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99. CHAPTER 380 ECONOMIC DEVELOPMENT GRANT AND LOAN AGREEMENT This Chapter 380 Economic Development Grant and Loan Agreement (the "Agreement") is made as of July 15, 2005 by and between City of San Marcos, Texas, a Texas municipal corporation ("City"), and John Q. Hammons, as Trustee of the Revocable Trust of John Q. Hammons, Dated December 28, 1989, as amended and restated ("JQH"). JQH and City are each a "Party" and are referred to collectively as the "Parties", RECITALS WHEREAS, City has adopted a resolution dated May 3, 2005 approving an Economic Development Incentives Policy as contemplated by Chapter 380 of the Texas Local Government Code. WHEREAS, JQH and the City are pursuing a joint project (the "Project") whereby (i) JQH would construct and operate a full service upscale hotel (the "Hotel") of at least ten (10) stories in height with a minimum of two hundred fifty (250) guest rooms and (ii) the City would construct, and lease to JQH, a first class conference center facility and related improvements (the "Conference Center") adjacent to the Hotel, which Conference Center would contain one large ballroom sufficient to lawfully accommodate one thousand (1,000) people for a banquet style event; and WHEREAS, JQH and City have identified that certain fifteen (15) acre tract of land located in San Marcos, Hays County, Texas and more particularly described on Exhibit "A" attached hereto (the "Desired Project Site") as the preferred site for the Project; and WHEREAS, while JQH and City have not reached a defmitive agreement concerning the Parties respective obligations relating to the Project, and neither currently has any obligation one unto the other with respect thereto, JQH and City believe that, due to market conditions and competitive forces, it is imperative that the Desired Project Site be acquired immediately; and WHEREAS, Gilmore-Austex Properties, Ltd. ("Gilmore"), has offered to (i) sell that portion of the Desired Project Site more particularly described on Exhibit "B" attached hereto consisting of approximately ten (10) acres of land (the "Property") to JQH for $2,000,000.00 and (ii) donate the remaining approximately five (5) acre portion of the Desired Project Site which is more particularly described on Exhibit "c" attached hereto to the City (said portion being herein called the "Conference Center Site"); and WHEREAS, JQH has requested that the City, pursuant to the City's existing Chapter 380 Economic Development Program, make (i) a $500,000.00 grant (the "Grant") to JQH and (ii) a $1,500,000.00 loan (the "Loan") to JQH, to facilitate the acquisition of the Property by JQH; WHEREAS, the City Council has determined that the potential construction and operation of the Hotel and Conference Center on the Desired Project Site would have significant economic development benefits to the community including generating additional tax revenue and enhancing employment opportunities within the City and that therefore it is appropriate to make the Grant and Loan pursuant to the terms of this Agreement to facilitate the acquisition of the Property by JQH in efforts to further the Project, notwithstanding the fact that the Parties have yet to reach any definitive agreement concerning same; WHEREAS, the City's Economic Development Incentives Policy authorizes the City Council to make grants and loans for the purpose of promoting local economic development and to stimulate business and commercial activity in the City, and that such grants or loans can be used to facilitate the CITY OF SA.'" MARcos-JQH LOAN AGREEMENT 779097.9