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Exhibit 10(i)
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of June 1, 1994 between
the City of Huntingburg, Indiana, a municipality and political subdivision
existing under the laws of the State of Indiana (the "Issuer"), and DMI
Furniture, Inc., a Delaware corporation (the "Borrower"), under the
circumstances summarized in the following recitals (the capitalized terms not
defined above or in the recitals being used therein as defined in or pursuant to
Article 1 hereof):
A. Pursuant to the provisions of the laws of the State of
Indiana, including the Act, the Issuer has heretofore issued the Prior Bonds to
provide financing for costs of the Project, and to reduce the financing costs of
the Project the Issuer has now determined to issue, sell and deliver the Project
Bonds and to loan the proceeds thereof to the Borrower to be applied to the
refunding of the Prior Bonds.
B. The Borrower and the Issuer have full right and lawful
authority to enter into this Agreement and to perform and observe the provisions
hereof on their respective parts to be performed and observed.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto covenant, agree and bind
themselves as follows (provided that any obligation of the Issuer created by or
arising out of this Agreement shall not be a general debt on its part but shall
be payable solely out of the Revenues):
ARTICLE I
DEFINITIONS
Section 1.1. USE OF DEFINED TERMS. Words and terms defined in the
Indenture shall have the same meanings when used herein, unless the context or
use clearly indicates another meaning or intent. In addition, the words and
terms set forth in Section 1.2 hereof shall have the meanings set forth therein
unless the context or use clearly indicates another meaning or intent.
Section 1.2. DEFINITIONS. As used herein:
"Additional Payments" means the amounts required to be paid by the
Borrower pursuant to the provisions of Section 4.2 hereof.
"Agreement" means this Loan Agreement, as amended or supplemented from
time to time.
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"Engineer" means an individual or firm acceptable to the Trustee and
qualified to practice the profession of engineering or architecture under the
laws of the State.
"Event of Default" means any of the events described as an Event of
Default in Section 7.1 hereof.
"Force Majeure" means any of the causes, circumstances or events
described as constituting Force Majeure in Section 7.1 hereof.
"Indenture" means the Trust Indenture, dated as of even date herewith,
between the Issuer and the Trustee, as amended or supplemented from time to
time.
"Loan" means the loan by the Issuer to the Borrower of the proceeds
received from the sale of the Project Bonds.
"Loan Payment Date" means any date on which any of the Loan Payments
are due and payable, whether at maturity, upon acceleration, call for redemption
or prepayment, or otherwise.
"Loan Payments" means the amounts required to be paid by the Borrower
in repayment of the Loan pursuant to the provisions of the Notes and of Section
4.1 hereof.
"Notes" means the Project Note and any Additional Notes.
"Notice Address" means:
(a) As to the Issuer: City of Huntingburg, Indiana
City Office Building
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: Mayor
(b) As to the Borrower: DMI Furniture, Inc.
000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Mr. Xxx Xxxx
(c) As to the Trustee: PNC Bank, Indiana, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxxxxx 00000
Attention: Corporate Trust Department
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(d) As to the Bank: Bank One, Indianapolis, NA
Bank One Center/Tower
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Manager, Mid-America
Department B
(e) As to the
Remarketing Agent: Bank One, Columbus, NA
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xx. Xxxxx Xxxxxx
or such additional or different address, notice of which is given under Section
8.2 hereof.
"Prior Bonds" means the Issuer's Economic Development Revenue Bonds
(DMI Furniture, Inc. Project), Series 1989, in the original principal amount of
$3,780,000 and dated as of April 15, 1989 and presently outstanding in the
principal amount of $2,940,000.
"Prior Bond Owners" means the holders of the Prior Bonds.
"Project" means, collectively, the Project Site and the Project
Facilities, together constituting a "project" as defined in the Act.
"Project Bonds" means the City of Huntingburg, Indiana Adjustable Rate
Economic Development Revenue Refunding Bonds, Series 1994 (DMI Furniture
Project) authorized in the Indenture in the original principal amount of
$2,940,000.
"Project Facilities" means the facilities described in Exhibit B
hereto, together with any additions, modifications and substitutions to those
facilities.
"Project Note" means the promissory note of the Borrower, dated as of
even date with the Project Bonds, in the form attached hereto as Exhibit A and
in the principal amount of $2,940,000 evidencing the obligation of the Borrower
to make Loan Payments.
"Project Site," means the real estate described in Exhibit C hereto,
and any additions thereto, less any removals therefrom.
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"Remarketing Agreement" means the Remarketing Agreement of even date
herewith between the Borrower and Bank One, Columbus, NA, as Remarketing Agent,
as amended and supplemented from time to time.
"Tax Certificate" means the Certificate of Tax Covenants and
Representations of the Borrower delivered in connection with the initial
issuance and delivery of the Project Bonds.
"Trustee" means the Trustee at the time acting as such under the
Indenture, originally PNC Bank, Indiana, Inc., as Trustee, and any successor
Trustee as determined or designated under or pursuant to the Indenture.
"Unassigned Issuer's Rights" means all of the rights of the Issuer to
receive Additional Payments under Section 4.2 hereof, to be held harmless and
indemnified under Section 5.3 hereof, to be reimbursed for attorney's fees and
expenses under Section 7.4 hereof, and to give or withhold consent to
amendments, changes, modifications, alterations and termination of this
Agreement under Section 8.5 hereof.
Section 1.3. INTERPRETATION. Any reference herein to the Issuer, to the
Issuing Authority or to any member or officer of either includes entities or
officials succeeding to their respective functions, duties or responsibilities
pursuant to or by operation of law or lawfully performing their respective
functions.
Any reference to a section or provision of the constitution of the
State or the Act, or to a section, provision or chapter of the Indiana Revised
Code or to any statute of the United States of America, includes that section,
provision, chapter or statute as amended, modified, revised, supplemented or
superseded from time to time; provided, that no amendment, modification,
revision, supplement or superseding section, provision, chapter or statute shall
be applicable solely by reason of this provision if it constitutes in any way an
impairment of the rights or obligations of the Issuer, the Holders, the Trustee,
the Bank or the Borrower under this Agreement.
Unless the context indicates otherwise, words importing the singular
number include the plural number, and vice versa; the terms "hereof," "hereby,"
"herein," "hereto," "hereunder" and similar terms refer to this Agreement; and
the term "hereafter" means after, and the term "heretofore" means before, the
date of delivery of the Project Bonds. Words of any gender include the
correlative words of the other genders, unless the sense indicates otherwise.
Section 1.4. CAPTIONS AND HEADINGS. The captions and headings in this
Agreement are solely for convenience of reference and in no way define, limit or
describe the scope or intent of any Articles, Sections, subsections, paragraphs,
subparagraphs or clauses hereof.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
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Section 2.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER.
The Issuer represents and warrants that:
(a) It is a duly organized and validly existing municipality
and political subdivision existing under the laws of the State.
(b) It has full legal right, power and authority pursuant to
the Act to finance the Project through the issuance of the Prior Bonds and to
refinance the Project and refund the Prior Bonds through the issuance of the
Project Bonds; has made the necessary findings of public purpose, has given any
necessary notices and has taken all other steps and followed all procedures
required by the Constitution and laws of the State (including the Act) in
connection therewith; and has full legal right, power and authority to (i) enter
into this Agreement, the Bond Placement Agreement, the Letter of Representations
and the Indenture, (ii) issue, sell and deliver the Project Bonds and (iii)
carry out and consummate all other transactions contemplated by this Agreement,
the Bond Placement Agreement, the Letter of Representations and the Indenture.
(c) It has duly authorized (i) the execution, delivery and
performance of this Agreement, the Project Bonds, the Bond Placement Agreement,
the Letter of Representations and the Indenture, and (ii) the taking of any and
all such actions as may be required on the part of the Issuer to carry out, give
effect to and consummate the transactions contemplated by such instruments.
(d) This Agreement, the Bond Placement Agreement, the Letter
of Representations and the Indenture constitute legal, valid and binding
obligations of the Issuer, enforceable in accordance with their respective
terms; this Agreement, the Bond Placement Agreement, the Letter of
Representations and the Indenture have been duly authorized and executed by the
Issuer; and, when authenticated by the Trustee in accordance with the provisions
of the Indenture, the Project Bonds will have been duly authorized, executed,
issued and delivered and will constitute legal, valid and binding special
obligations of the Issuer in conformity with the provisions of the Act and the
Constitution of the State.
(e) There is no action, suit, proceeding, inquiry, or
investigation at law or in equity or before or by any court, public board or
body, pending or, to the best of the knowledge of the Issuer, threatened
against the Issuer, nor to the best of the knowledge of the Issuer is there any
basis therefor, which in any manner questions the validity of the Act, the
powers of the Issuer referred to in paragraph (b) above or the validity of any
proceedings taken by the Issuer in connection with the issuance of the Prior
Bonds or the Project Bonds or wherein any unfavorable decision, ruling or
finding could materially adversely affect the transactions contemplated by this
Agreement or which, in any way, would adversely affect the validity or
enforceability of the Project Bonds, the Indenture, the Letter of
Representations, the Bond Placement Agreement or this Agreement (or of any other
instrument required or contemplated for use in consummating the transactions
contemplated thereby and hereby).
(f) The execution and delivery by the Issuer of this
Agreement, the Project Bonds, the Letter of Representations, the Bond Placement
Agreement and the Indenture in compliance with the provisions of each of such
instruments will not conflict with or constitute a breach of, or default under,
any
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material commitment, agreement or other instrument to which the Issuer is a
party or by which it is bound, or under any provision of the Act, the
Constitution of the State or any existing law, rule, regulation, ordinance,
judgment, order or decree to which the Issuer is subject.
(g) The Issuer will do or cause to be done all things
necessary, so far as lawful, to preserve and keep in full force and effect its
existence or to assure the assumption of its obligations under this Agreement,
the Letter of Representations, the Indenture and the Bonds by any successor
public body.
Section 2.2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
The Borrower represents, warrants and covenants that:
(a) The Borrower is a Delaware corporation, duly organized and
validly existing in good standing under the laws of the State of Delaware, duly
authorized to transact business in the State and has full power and authority to
execute, deliver and perform this Agreement, the Bond Placement Agreement, the
Reimbursement Agreement, the Remarketing Agreement and the Project Note and to
enter into and carry out the transactions contemplated by those documents. That
execution, delivery and performance do not, and will not violate any provision
of law applicable to the Borrower or its Articles of Incorporation or Bylaws and
do not, and will not conflict with or result in a default under any agreement or
instrument to which the Borrower is a party or by which the Borrower is bound.
This Agreement, the Bond Placement Agreement, the Reimbursement Agreement, the
Remarketing Agreement and the Project Note, by proper corporate action, have
been duly authorized, executed and delivered by the Borrower and are valid and
binding obligations of the Borrower.
(b) The Project is owned by the Borrower for use as a
furniture manufacturing, distribution and warehouse facility. The Project has
created or preserved jobs and employment opportunities within the boundaries of
the State and Issuer, and the Project is and will be operated and maintained in
such manner as to conform in all material respects with all applicable zoning,
planning, building, health, environmental and other applicable governmental
rules and regulations and as to be consistent with the Act.
(c) The representations contained in the Tax Certificate
(which is incorporated herein by this reference thereto) are true and correct
and the Borrower will observe the covenants contained therein as fully as if set
forth herein.
(d) The undertaking of the financing of a portion of the cost
of the Project by the Issuer and the loan of the proceeds of the Prior Bonds and
the Project Bonds has constituted an inducement to the Borrower to acquire,
construct and maintain the Project in Huntingburg, Xxxxxx County, Indiana.
(e) The Borrower is not in default in the payment of principal
of, or interest on, any of the Borrower's indebtedness for borrowed money, or in
default under any instrument under which, or subject to which, any indebtedness
has been incurred, and no event has occurred and is continuing under the
provisions of any agreement involving the Borrower that, with the lapse of time
or the giving of notice, or both, would constitute an event of default
thereunder.
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(f) No litigation at law or in equity nor any proceeding
before any governmental agency or other tribunal involving the Borrower is
pending or, to the knowledge of the Borrower, threatened, in which any liability
of the Borrower is not adequately covered by insurance or in which any judgment
or order would have a material and adverse effect upon the business or assets of
the Borrower or would materially and adversely affect the operation of the
Project, the validity of this Agreement, the Bond Placement Agreement, the
Reimbursement Agreement, the Remarketing Agreement and the Project Note or the
performance of the Borrower's obligations thereunder or the transactions
contemplated hereby.
(g) The Borrower has not made and will not make any changes to
the Project or to the operation thereof which would affect the qualification of
the Project under the Act or impair the exclusion from gross income for federal
income tax purposes of the interest on the Project Bonds.
ARTICLE III
ISSUANCE OF THE PROJECT BONDS
Section 3.1. ISSUANCE OF THE PROJECT BONDS; APPLICATION OF PROCEEDS. To
provide funds to make the loan for purposes of refunding the Prior Bonds and
thereby refinancing costs of the Project, the Issuer will issue, sell and
deliver the Project Bonds as required by the provisions of the Bond Placement
Agreement. The Project Bonds will be issued pursuant to the Indenture in the
aggregate principal amount, will bear interest, will mature and will be subject
to redemption as set forth therein. The Borrower hereby approves the terms and
conditions of the Indenture and the Project Bonds, and the terms and conditions
under which the Project Bonds will be issued, sold and delivered.
The proceeds from the sale of the Project Bonds shall be loaned to the
Borrower by depositing such proceeds with the Trustee which shall deposit them
in the Project Fund as provided in the Indenture.
At the request of the Borrower, and for the purposes and upon
fulfillment of the conditions specified in the Indenture, the Issuer, in its
sole discretion, may provide for the issuance, sale and delivery of Additional
Bonds and loan the proceeds from the sale thereof to the Borrower.
The Trustee is hereby instructed to disburse the entire balance in the
Project Fund to the Prior Bonds Trustee on June 9, 1994. Such disbursement shall
be made by wire transfer of immediately available funds on June 9, 1994. The
Issuer and the Borrower shall provide notice to the Prior Bonds Trustee of such
disbursement. Such notice shall direct the Prior Bonds Trustee to utilize such
disbursement, together with other funds provided by the Borrower and available
for such purpose, to reimburse Bank One, Indianapolis, N.A., as the issuer of a
Letter of Credit securing the Prior Bonds, for a draw made upon the Prior Bonds
Letter of Credit in the amount of $2,940,000, used to defease the Prior Bonds on
June 9, 1994, as provided in Section 6.01 of the Trust Indenture between the
Issuer and PNC Bank, Indiana, Inc. (f/k/a Citizens Fidelity Bank and Trust
Company -- Indiana), which Indenture secured the Prior Bonds.
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Section 3.2. INVESTMENT OF FUND MONEYS. At the written or oral request
(promptly confirmed in writing) of the Authorized Borrower Representative, any
moneys held as part of the Bond Fund (except moneys held in the Bond Fund from
draws on the Letter of Credit for purposes of defeasing the Project Bonds
pursuant to Article IX of the Indenture), the Project Fund or the Rebate Fund
shall be invested or reinvested by the Trustee in Eligible Investments. The
Issuer and the Borrower each hereby covenants that it will restrict that
investment and reinvestment and the use of the proceeds of the Project Bonds in
such manner and to such extent, if any, as may be necessary, after taking into
account reasonable expectations at the time of delivery of and payment for the
Project Bonds, so that the Project Bonds will not constitute arbitrage bonds
under Section 148 of the Code.
The Borrower shall provide the Issuer with, and the Issuer may base its
certifications as authorized by the Bond Legislation on, a certificate of the
Borrower for inclusion in the transcript of proceedings for the Project Bonds,
setting forth the reasonable expectations of the Borrower on the date of
delivery of and payment for the Project Bonds regarding the amount and use of
the proceeds of the Project Bonds and the facts, estimates and circumstances on
which those expectations are based.
Section 3.3. REBATE FUND. The Borrower agrees to make such payments to
the Trustee as are required of it under Section 5.11 of the Indenture. The
obligation of the Borrower to make such payments shall remain in effect and be
binding upon the Borrower notwithstanding the release and discharge of the
Indenture.
The Borrower and the Issuer each covenants to the owners of the Project
Bonds that, notwithstanding any other provision of this Agreement or any other
instrument, it shall take no action, nor shall the Borrower direct the Trustee
to take or approve the Trustee's taking any action or direct the Trustee to make
or approve the Trustee's making any investment or use of proceeds of the Project
Bonds or any other moneys which may arise out of or in connection with this
Agreement, the Indenture or the Project, which would cause the Project Bonds to
be treated as "arbitrage bonds" within the meaning of Section 148 of the Code.
In addition, the Borrower covenants and agrees to comply with the requirements
of Section 148(f) of the Code as it may be applicable to the Project Bonds or
the proceeds derived from the sale of the Project Bonds or any other moneys
which may arise out of, or in connection with, this Agreement, the Indenture or
the Project throughout the term of the Project Bonds. No provision of this
Agreement shall be construed to impose upon the Trustee any obligation or
responsibility for compliance with arbitrage regulations, except as provided in
the Indenture.
ARTICLE IV
LOAN BY ISSUER; REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS
Section 4.1. LOAN REPAYMENT; DELIVERY OF NOTES AND LETTER OF CREDIT.
Upon the terms and conditions of this Agreement, the Issuer will make the Loan
to the Borrower. In consideration of and in repayment of the Loan, the Borrower
shall make, as Loan Payments, payments sufficient in time and amount to pay when
due all Bond Service Charges, all as more particularly provided in the Project
Note and any Additional Note. The Project Note shall be executed and delivered
by the Borrower concurrently with
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the execution and delivery of this Agreement. All Loan Payments shall be paid to
the Trustee in accordance with the terms of the Notes for the account of the
Issuer and shall be held and applied in accordance with the provisions of the
Indenture and this Agreement. To the extent of payments made with, respect to
Bond Service Charges pursuant to draws upon the Letter of Credit, the Borrower
shall receive a credit against its obligation to make Loan Payments under this
Agreement and the Project Note.
In connection with the issuance of any Additional Bonds permitted by
the Bank, the Borrower shall execute and deliver to the Trustee one or more
Additional Notes in a form substantially similar to the form of the Project
Note. All such Additional Notes shall:
(a) provide for payments of interest equal to the payments of
interest on the corresponding Additional Bonds;
(b) require payments of principal and prepayments and any
premium equal to the payments of principal, redemption payments and sinking fund
payments and any premium on the corresponding Additional Bonds;
(c) require all payments on any such Additional Notes to be
made no later than the due dates for the corresponding payments to be made on
the corresponding Additional Bonds; and
(d) contain by reference or otherwise optional and mandatory
prepayment provisions and provisions in respect of the optional and mandatory
acceleration or prepayment of principal and any premium corresponding with the
redemption and acceleration provisions of the corresponding Additional Bonds.
All Notes shall secure equally and ratably all outstanding Bonds,
except that, so long as no Event of Default described in paragraph (a), (b),
(c), (g) or (h) of Section 7.01 of the Indenture has occurred and is continuing,
payments by the Borrower on the Project Note shall be used by the Trustee to
reimburse the Bank for drawings on the Letter of Credit used to pay Bond Service
Charges on the Project Bonds.
Upon payment in full, in accordance with the Indenture, of the Bond
Service Charges on any series of Bonds, whether at maturity or by redemption or
otherwise, or upon provision for the payment thereof having been made in
accordance with the provisions of the Indenture, (i) the Notes issued
concurrently with those corresponding Bonds, of the same maturity, bearing the
same interest rate and in an amount equal to the aggregate principal amount of
the Bonds so surrendered and canceled or for the payment of which provision has
been made, shall be deemed fully paid, the obligations of the Borrower
thereunder shall be terminated, and any such Notes shall be surrendered by the
Trustee to the Borrower, and shall be canceled by the Borrower, or (ii) in the
event there is only one of those Notes, an appropriate notation shall be
endorsed thereon evidencing the date and amount of the principal payment or
prepayment equal to the Bonds so paid, or with respect to which provision for
payment has been made, and that Note shall be surrendered by the Trustee to the
Borrower for cancellation if all Bonds shall have been paid (or provision made
therefor) and canceled as aforesaid. Unless the Borrower is entitled to a credit
under express terms of
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this Agreement or the Notes, all payments on each of the Notes shall be in the
full amount required thereunder.
Except for such interest of the Borrower and the Bank as may hereafter
arise pursuant to Section 5.07 or 5.08 of the Indenture, the Borrower and the
Issuer each acknowledge that neither the Borrower nor the Issuer has any
interest in the Bond Fund and any moneys deposited therein shall be in the
custody of and held by the Trustee in trust for the benefit of the Holders and,
to the extent of amounts due under the Reimbursement Agreement, the Bank.
Section 4.2. ADDITIONAL PAYMENTS. The Borrower shall pay to the Issuer,
as Additional Payments hereunder, any and all costs and expenses incurred or to
be paid by the Issuer in connection with the issuance and delivery of the
Project Bonds and Additional Bonds or otherwise related to actions taken by the
Issuer under this Agreement or the Indenture.
The Borrower shall pay to the Trustee, the Registrar and any Paying
Agent or Authenticating Agent, their reasonable fees, charges and expenses for
acting as such under the Indenture.
The Borrower also shall pay the Remarketing Agent remarketing fees in
respect of the Project Bonds as provided in the Remarketing Agreement.
Any payments under this Section not paid when due shall bear interest
at the Interest Rate for Advances.
Section 4.3. PLACE OF PAYMENTS. The Borrower shall make all Loan
Payments directly to the Trustee at its principal corporate trust office.
Additional Payments shall be made directly to the person or entity to whom or to
which they are due.
Section 4.4. OBLIGATIONS UNCONDITIONAL. The obligations of the Borrower
to make Loan Payments, Additional Payments and any payments required of the
Borrower under Section 5.08 or Section 6.03 of the Indenture shall be absolute
and unconditional, and the Borrower shall make such payments without abatement,
diminution or deduction regardless of any cause or circumstances whatsoever
including, without limitation, any defense, set-off, recoupment or counterclaim
which the Borrower may have or assert against the Issuer, the Trustee, any
Paying Agent or Authenticating Agent, the Remarketing Agent, the Bank or any
other Person; provided that the Borrower may contest or dispute the amount of
any such obligation (other than Loan Payments) so long as such contest or
dispute does not result in an Event of Default under the Indenture.
Section 4.5. ASSIGNMENT OF AGREEMENT AND REVENUES. To secure the
payment of Bond Service Charges, the Issuer shall assign to the Trustee, by the
Indenture, all its right, title and interest in and to the Revenues, the
Agreement (except for Unassigned Issuer's Rights) and the Project Note. The
Borrower hereby agrees and consents to that assignment.
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Section 4.6. LETTER OF CREDIT. Simultaneously with the initial delivery
of the Project Bonds pursuant to the Indenture and the Bond Placement Agreement,
the Borrower shall cause the Bank to issue and deliver the Letter of Credit to
the Trustee. The Letter of Credit may be replaced by an Alternate Letter of
Credit complying with the provisions of Section 5.09 of the Indenture and shall
be in substantially the form attached to the Reimbursement Agreement and made a
part thereof. The Borrower shall take whatever action may be necessary to
maintain the Letter of Credit or an Alternate Letter of Credit in full force and
effect during the period required by the Indenture, including the payment to the
Bank of all amounts due and payable under the Reimbursement Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS
Section 5.1. RIGHT OF INSPECTION. Subject to reasonable security and
safety regulations and upon reasonable notice, the Issuer, the Bank and the
Trustee, and their respective agents, shall have the right during normal
business hours to inspect the Project.
Section 5.2. SALE, LEASE OR GRANT OF USE BY BORROWER. With the written
consent of the Bank, and subject to any lease or other agreement to which the
Borrower is a party or by which it is bound, the Borrower may sell, lease or
grant the right to occupy and use the Project, in whole or in part, to others,
provided that:
(a) No such sale, lease or grant shall relieve the Borrower
from the Borrower's obligations under this Agreement or the Notes;
(b) In connection with any such sale, lease or grant the
Borrower shall retain such rights and interests as will permit the Borrower to
comply with the Borrower's obligations under this Agreement and the Notes;
(c) No such sale, lease or grant shall impair materially the
purposes of the Act to be accomplished by operation of the Project Facilities as
herein provided or adversely affect the exclusion from gross income for federal
income tax purposes of the interest on the Bonds.
Section 5.3. INDEMNIFICATION. The Borrower releases the Issuer from,
agrees that the Issuer shall not be liable for, and shall indemnify the Issuer
against, all liabilities, claims, costs and expenses, including attorneys fees
and expenses, imposed upon, incurred or asserted against the Issuer on account
of: (a) any loss or damage to property or injury to or death of or loss by any
person that may be occasioned by any cause whatsoever pertaining to the
construction, maintenance, operation and use of the Project; (b) any breach or
default on the part of the Borrower in the performance of any covenant or
agreement of the Borrower under this Agreement, the Reimbursement Agreement, the
Project Note or any related document, or arising from any act or failure to act
by the Borrower, or any of the Borrower's agents, contractors, servants,
employees or licensees; (c) the authorization, issuance, sale, trading,
redemption or servicing of the Project Bonds, and the provision of any
information or certification furnished in connection therewith
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concerning the Project Bonds, the Project or the Borrower including, without
limitation, the Preliminary Offering Memorandum and the Offering Memorandum
(each as defined in the Bond Placement Agreement), any information furnished by
the Borrower for, and included in, or used as a basis for preparation of, any
certifications, information statements or reports furnished by the Issuer, and
any other information or certification obtained from the Borrower to assure the
exclusion of the interest on the Project Bonds from gross income of the Holders
thereof for federal income tax purposes; (d) the Borrower's failure to comply
with any requirement of this Agreement, the Prior Code or the Code pertaining to
such exclusion of that interest, including the covenants in section 5.4 hereof;
and (e) any claim, action or proceeding brought with respect to the matters set
forth in (a), (b), (c), or (d) above.
The Borrower agrees to indemnify the Trustee for, and to hold it
harmless against, all liabilities, claims, costs and expenses incurred without
negligence or willful misconduct on the part of the Trustee on account of any
action taken or omitted to be taken by the Trustee in accordance with the terms
of this Agreement, the Bonds, the Reimbursement Agreement, the Letter of Credit,
the Notes or the Indenture, or any action taken at the request of or with the
consent of the Borrower, including the costs and expenses of the Trustee in
defending itself against any such claim, action or proceeding brought in
connection with the exercise or performance of any of its powers or duties under
this Agreement, the Bonds, the Indenture, the Reimbursement Agreement, the
Letter of Credit or the Notes.
In case any action or proceeding is brought against the Issuer or the
Trustee in respect of which indemnity may be sought hereunder, the party seeking
indemnity promptly shall give notice of that action or proceeding to the
Borrower, and the Borrower upon receipt of that notice shall have the obligation
and the right to assume the defense of the action or proceeding; provided, that
failure of a party to give that notice shall not relieve the Borrower from any
of the Borrower's obligations under this Section unless that failure materially
prejudices the defense of the action or proceeding by the Borrower and then,
only to the extent of such prejudice to the Borrower. At the Borrower's expense,
an indemnified party may employ separate counsel and participate in the defense.
The Borrower shall not be liable for any settlement made without the Borrower's
consent.
If the Borrower shall not have employed counsel to have charge of the
defense of the action, claim or proceeding, or if an indemnified party shall
have concluded reasonably that there may be a defense available to it or to any
other indemnified party which is different from or in addition to those
available to the Borrower or to any other indemnified party or if an indemnified
party shall have reasonably concluded that counsel representing other
indemnified parties cannot fairly represent such indemnified party because of a
conflict of interest, (i) the Borrower shall not have the right to direct the
defense of the action, claim or proceeding on behalf of that indemnified party
and (ii) legal and other expenses incurred by the indemnified party (including
without limitation, to the extent permitted by law, reasonable attorney's fees
and expenses) shall be borne by the Borrower.
The indemnification set forth above is intended to and shall include
the indemnification of all affected officials, directors, officers and employees
of the Issuer and the Trustee, respectively. That indemnification is intended to
and shall be enforceable by the Issuer and the Trustee, respectively, to the
full extent permitted by law.
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Section 5.4. BORROWER NOT TO ADVERSELY AFFECT EXCLUSION FROM GROSS
INCOME OF INTEREST ON PROJECT BONDS. The Borrower hereby represents that the
Borrower has taken and caused to be taken, and covenants that the Borrower will
take and cause to be taken, all actions that may be required of the Borrower,
alone or in conjunction with the Issuer, for the interest on the Project Bonds
to be and remain excluded from gross income for federal income tax purposes, and
represents that the Borrower has not taken or permitted to be taken on the
Borrower's behalf, and covenants that the Borrower will not take or permit to be
taken on the Borrower's behalf, any actions that would adversely affect such
exclusion under the provisions of the Code.
Section 5.5. ASSIGNMENT BY ISSUER. Except for the assignment of this
Agreement to the Trustee, the Issuer shall not attempt to further assign,
transfer or convey its interest in the Revenues or this Agreement or create any
pledge or lien of any form or nature with respect to the Revenues or the
payments hereunder.
Section 5.6. BORROWER'S PERFORMANCE UNDER INDENTURE. The Borrower has
examined the Indenture and approves the form and substance of, and agrees to be
bound by, its terms. The Borrower, for the benefit of the Issuer and each
Bondholder, shall do and perform all acts and things required or contemplated in
the Indenture to be done or performed by the Borrower. The Borrower is a third
party beneficiary of certain provisions of the Indenture, and Section 8.05 of
the Indenture is hereby incorporated herein by reference.
Section 5.7. MAINTENANCE OF PROJECT. The Borrower shall keep and
maintain or make arrangements with others to maintain the Project in good order
and condition and in rentable and tenantable state of repair, and will make or
make arrangements with others to make, as and when necessary, all repairs,
renewals and replacements, structural and nonstructural, exterior and interior,
ordinary and extraordinary, foreseen and unforeseen.
Section 5.8. CONTINUED EXISTENCE. Except as otherwise provided in or
permitted pursuant to the Reimbursement Agreement, the Borrower shall maintain
its existence and continue to be a corporation duly formed, validly existing and
in good standing under the laws of the State of Delaware and duly authorized to
transact business in the State.
ARTICLE VI
REDEMPTION OF PROJECT BONDS
Section 6.1. OPTIONAL REDEMPTION. Provided no Event of Default shall
have occurred and be continuing, at any time and from time to time, the
Borrower, with the consent of the Bank, may deliver moneys to the Trustee in
addition to Loan Payments or Additional Payments required to be made and direct
the Trustee to use the moneys so delivered for the purpose of purchasing Project
Bonds or of reimbursing the Bank for drawings on the Letter of Credit used to
redeem Project Bonds called for optional redemption in accordance with the
applicable provisions of the Indenture.
Section 6.2. EXTRAORDINARY OPTIONAL REDEMPTION. The Borrower, with the
consent of the Bank, shall have, subject to the conditions hereinafter imposed,
the option to direct the redemption of the entire
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unpaid principal balance of the Project Bonds in accordance with the applicable
provisions of the Indenture upon the occurrence of any of the following events:
(a) The Project shall have been damaged or destroyed to such
an extent that (1) it cannot reasonably be expected to be restored, within a
period of three months, to the condition thereof immediately preceding such
damage or destruction or (2) its normal use and operation is reasonably expected
to be prevented for a period of three consecutive months;
(b) Title to, or the temporary use of, all or a significant
part of the Project shall have been taken under the exercise of the power of
eminent domain (1) to such extent that the Project cannot reasonably be expected
to be restored within a period of three months to a condition of usefulness
comparable to that existing prior to the taking or (2) as a result of the
taking, normal use and operation of the Project is reasonably expected to be
prevented for a period of three consecutive months;
(c) As a result of any changes in the Constitution of the
State, the constitution of the United States of America, or state or federal
laws, or as a result of legislative or administrative action (whether state or
federal) or by final decree, judgment or order of any court or administrative
body (whether state or federal) entered after the contest thereof by the Issuer,
the Trustee or the Borrower in good faith, this Agreement shall have become void
or unenforceable or impossible of performance in accordance with the intent and
purpose of the parties as expressed in this Agreement, or if unreasonable
burdens or excessive liabilities shall have been imposed with respect to the
Project or the operation thereof, including, without limitation, federal, state
or other ad valorem, property, income or other taxes not being imposed on the
date of this Agreement other than ad valorem taxes presently levied upon
privately owned property used for the same general purpose as the Project; or
(d) Changes in the economic availability of raw materials,
operating supplies, energy sources or supplies, or facilities (including, but
not limited to, facilities in connection with the disposal of industrial wastes)
necessary for the operation of the Project shall have occurred or technological
or other changes shall have occurred which the Borrower cannot reasonably
overcome or control and which in the Borrower's reasonable judgment render the
operation of the Project uneconomic.
The Borrower also shall have the option, with the consent of the Bank,
in the event that title to or the temporary use of a portion of the Project
shall be taken under the exercise of the power of eminent domain, even if the
taking is not of such nature as to permit the exercise of the redemption option
upon an event specified in clause (b) above, to direct the redemption, at a
redemption price of 100% of the principal amount thereof prepaid, plus accrued
interest to the redemption date, of that part of the outstanding principal
balance of the Project Bonds as may be payable from the proceeds received by the
Borrower (after the payment of costs and expenses incurred in the collection
thereof) in the eminent domain proceeding, provided that the Borrower shall
furnish to the Issuer and the Trustee a certificate of an Engineer stating that
(1) the property comprising the part of the Project taken is not essential to
continued operations of the Project in the manner existing prior to that taking,
(2) the Project has been restored to a condition substantially equivalent to
that existing prior to the taking, or (3) other improvements have been acquired
or made which are suitable for the continued operation of the Project.
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To exercise any option under this Section, the Borrower within 90 days
following the event authorizing the exercise of that option, or at any time
during the continuation of the condition referred to in clause (d) of the first
paragraph of this Section, shall give notice to the Issuer and to the Trustee
specifying the date of redemption, which date shall be not more than ninety days
from the date that notice is mailed, and shall make arrangements satisfactory to
the Trustee for the giving of the required notice of redemption.
The rights and options granted to the Borrower in this Section may be
exercised whether or not the Borrower is in default hereunder; provided, that
such default will not relieve the Borrower from performing those actions which
are necessary to exercise any such right or option granted hereunder.
Section 6.3. MANDATORY REDEMPTION OF PROJECT BONDS. If, as provided in
the Project Bonds and the Indenture, the Project Bonds become subject to
mandatory redemption as a result of a Determination of Taxability or termination
of the Letter of Credit or any Alternate Letter of Credit, the Borrower shall
deliver to the Trustee, upon the date requested by the Trustee, moneys
sufficient to pay in full the Project Bonds in accordance with the mandatory
redemption provisions relating thereto set forth in the Indenture.
Section 6.4. ACTIONS BY ISSUER. At the request of the Borrower or the
Trustee, the Issuer shall take all steps required of it under the applicable
provisions of the Indenture or the Bonds to effect the redemption of all or a
portion of the Bonds pursuant to this Article VI.
Section 6.5. REQUIRED DEPOSITS FOR OPTIONAL REDEMPTION. Except with the
prior written consent of the Bank, the Trustee shall not give notice of call to
the Holders pursuant to the optional redemption provisions of Section 4.01 of
the Indenture and Sections 6.1 and 6.2 hereof unless prior to the date by which
the call notice is to be given there shall be on deposit with the Trustee funds
sufficient to redeem at the redemption price thereof, including interest accrued
to the redemption date, all Project Bonds for which notice of redemption is to
be given.
All amounts paid by the Borrower pursuant to this Article which are
used to pay principal of, premium, if any, or interest on the Bonds, or to
reimburse the Bank for moneys drawn under the Letter of Credit and used for such
purposes, shall constitute prepaid Loan Payments.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. EVENTS OF DEFAULT. Each of the following shall be an Event
of Default:
(a) The Borrower shall fail to observe and perform any
agreement, term or condition contained in this Agreement, and the continuation
of such failure for a period of 30 days after notice thereof shall have been
given to the Borrower by the Issuer or the Trustee, or for such longer period as
the Issuer and the Trustee may agree to in writing; provided, that if the
failure is other than the payment of money and is of such nature that it can be
corrected but not within the applicable period, that failure shall not
constitute
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an Event of Default so long as the Borrower institutes curative action within
the applicable period and diligently pursues that action to completion; and
provided further that no such failure shall constitute an Event of Default
solely because it results in a Determination of Taxability;
(b) The Borrower shall: (i) admit in writing its inability to
pay its debts generally as they become due; (ii) have an order for relief
entered in any case commenced by or against it under the federal bankruptcy
laws, as now or hereafter in effect; (iii) commence a proceeding under any other
federal or state bankruptcy, insolvency, reorganization or similar law, or have
such a proceeding commenced against it and either have an order of insolvency or
reorganization entered against it or have the proceeding remain undismissed and
unstayed for 90 days; (iv) make an assignment for the benefit of creditors; or
(v) have a receiver or trustee appointed for it or for the whole or any
substantial part of its property;
(c) There shall occur an "Event of Default" as defined in
Section 7.01 of the Indenture.
Notwithstanding the foregoing, if, by reason of Force Majeure, the
Borrower is unable to perform or observe any agreement, term or condition hereof
which would give rise to an Event of Default under subsection (a) hereof, other
than the payment of money, the Borrower shall not be deemed in default during
the continuance of such inability. However, the Borrower shall promptly give
notice to the Trustee and the Issuer of the existence of an event of Force
Majeure and shall use its best efforts to remove the effects thereof; provided
that the settlement of strikes or other industrial disturbances shall be
entirely within the Borrower's discretion.
The term Force Majeure shall mean, without limitation, the following:
(i) acts of God; strikes; lockouts or other industrial
disturbances; acts of public enemies; orders or restraints of any kind of the
government of the United States of America or of the State or any of their
departments, agencies, political subdivisions or officials, or any civil or
military authority; insurrections; civil disturbances; riots; epidemics;
landslides; lightning; earthquakes; fires; hurricanes; tornados; storms;
droughts; floods; arrests; restraint of government and people; explosions;
breakage, malfunction or accident to facilities, machinery, transmission pipes
or canals; partial or entire failure of utilities; shortages of labor,
materials, supplies or transportation; or
(ii) any cause, circumstance or event not reasonably within
the control of the Borrower.
The declaration of an Event of Default under subsection (b) above, and
the exercise of remedies upon any such declaration, shall be subject to any
applicable limitations of federal bankruptcy law affecting or precluding that
declaration or exercise during the pendency of or immediately following any
bankruptcy, liquidation or reorganization proceedings.
Section 7.2. REMEDIES ON DEFAULT. Whenever an Event of Default shall
have happened and be continuing, any one or more of the following remedial steps
may be taken:
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(a) If and only if acceleration of the principal amount of the
Bonds has been declared pursuant to Section 7.03 of the Indenture, the Trustee
shall declare all Loan Payments and Notes to be immediately due and payable,
whereupon the same shall become immediately due and payable;
(b) The Bank or the Trustee may have access to, inspect,
examine and make copies of the books, records, accounts and financial data of
the Borrower pertaining to the Project; and
(c) The Issuer or the Trustee may pursue all remedies now or
hereafter existing at law or in equity to collect all amounts then due and
thereafter to become due under this Agreement, the Letter of Credit or the Notes
or to enforce the performance and observance of any other obligation or
agreement of the Borrower under those instruments.
Notwithstanding the foregoing, the Issuer shall not be obligated to
take any step which in its opinion will or might cause it to expend time or
money or otherwise incur liability unless and until a satisfactory indemnity
bond has been furnished to the Issuer at no cost or expense to the Issuer. Any
amounts collected as Loan Payments or applicable to Loan Payments and any other
amounts which would be applicable to payment of Bond Service Charges collected
pursuant to action taken under this Section shall be paid into the Bond Fund and
applied in accordance with the provisions of the Indenture or, if the
outstanding Bonds have been paid and discharged in accordance with the
provisions of the Indenture, shall be paid as provided in Section 5.08 of the
Indenture for transfers of remaining amounts in the Revenue Fund and the Bond
Fund.
The provisions of this section are subject to the further limitation
that the rescission by the Trustee of its declaration that all of the Bonds are
immediately due and payable also shall constitute an annulment of any
corresponding declaration made pursuant to paragraph (a) of this Section and a
waiver and rescission of the consequences of that declaration and of the Event
of Default with respect to which that declaration has been made, provided that
no such waiver or rescission shall extend to or affect any subsequent or other
default or impair any right consequent thereon.
Section 7.3. NO REMEDY EXCLUSIVE. No remedy conferred upon or reserved
to the Issuer or the Trustee by this Agreement is intended to be exclusive of
any other available remedy or remedies but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement, the Letter of Credit or any Note, or now or hereafter existing at
law, in equity or by statute. No delay or omission to exercise any right or
power accruing upon any default shall impair that right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle
the Issuer or the Trustee to exercise any remedy reserved to it in this Article,
it shall not be necessary to give any notice, other than any notice required by
law or for which express provision is made herein.
Section 7.4. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. If an Event
of Default should occur and the Issuer or the Trustee should incur expenses,
including attorneys' fees, in connection with the enforcement of this Agreement,
the Letter of Credit or any Note or the collection of sums due thereunder,
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the Borrower shall reimburse the Issuer and the Trustee, as applicable, for the
reasonable expenses so incurred upon demand.
Section 7.5. NO WAIVER. No failure by the Issuer or the Trustee to
insist upon the strict performance by the Borrower of any provision hereof shall
constitute a waiver of their right to strict performance and no express waiver
shall be deemed to apply to any other existing or subsequent right to remedy the
failure by the Borrower to observe or comply with any provision hereof.
Section 7.6. NOTICE OF DEFAULT. The Borrower or the Issuer shall notify
the Trustee and the Bank immediately if it becomes aware of the occurrence of
any Event of Default hereunder or of any fact, condition or event which, with
the giving of notice or passage of time or both, would become an Event of
Default.
Section 7.7. REMEDIES SUBJECT TO BANK'S DIRECTION. Except in the case
of an Event of Default pursuant to Section 7.01(g) or (h) of the Indenture, the
Bank shall have the right to direct the remedies to be exercised by the Trustee,
whether under Article VII of this Agreement or under Article VII of the
Indenture.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. TERM OF AGREEMENT. This Agreement shall be and remain in
full force and effect from the date of initial delivery of the Project Bonds
until such time as all of the Bonds shall have been fully paid (or provision
made for such payment) pursuant to the Indenture and all other sums payable by
the Borrower under this Agreement and the Notes shall have been paid, except for
obligations of the Borrower under Sections 3.3, 4.2 and 5.3 hereof, which shall
survive any termination of this Agreement.
Section 8.2. NOTICES. All notices, certificates, requests or other
communications hereunder shall be in writing and shall be deemed to be
sufficiently given when mailed by first class mail, postage prepaid, and
addressed to the appropriate Notice Address. A duplicate copy of each notice,
certificate, request or other communication given hereunder to the Issuer, the
Borrower, the Bank, the Remarketing Agent or the Trustee shall also be given to
the others. The Borrower, the Issuer, the Bank, the Remarketing Agent, and the
Trustee, by notice given hereunder, may designate any further or different
addresses to which subsequent notices, certificates, requests or other
communications shall be sent.
Section 8.3. EXTENT OF COVENANTS OF THE ISSUER; NO PERSONAL LIABILITY.
All covenants, obligations and agreements of the Issuer contained in this
Agreement or the Indenture shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or agreement shall be
deemed to be a covenant, obligation or agreement of any present or future
member, officer, agent or employee of the Issuer or the Issuing Authority in
other than his official capacity, and neither the members of the Issuing
Authority nor any official executing the Bonds shall be liable personally on the
Bonds or be subject to any personal liability or accountability by reason of the
issuance thereof or by reason of the covenants, obligations or agreements of the
Issuer contained in this Agreement or in the Indenture.
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Section 8.4. BINDING EFFECT. This Agreement shall inure to the benefit
of and shall be binding in accordance with its terms upon the Issuer, the
Borrower and their respective successors and assigns; provided that this
Agreement may not be assigned by the Borrower (except in connection with a sale,
lease or grant of use pursuant to Section 5.2 hereof) and may not be assigned by
the Issuer except to the Trustee pursuant to the Indenture or as otherwise may
be necessary to enforce or secure payment of Bond Service Charges. This
Agreement may be enforced only by the parties, their assignees and others who
may, by law, stand in their respective places.
Section 8.5. AMENDMENTS AND SUPPLEMENTS. Except as otherwise expressly
provided in this Agreement, any Note or the Indenture, subsequent to the
issuance of the Project Bonds and prior to all conditions provided for in the
Indenture for release of the Indenture having been met, this Agreement or any
Note may not be effectively amended, changed, modified, altered or terminated
except in accordance with the applicable provisions of Article XI of the
Indenture.
Section 8.6. EXECUTION COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which shall be regarded as an original and
all of which shall constitute but one and the same instrument.
Section 8.7. SEVERABILITY. If any provision of this Agreement, or any
covenant, obligation or agreement contained herein, is determined by a court of
competent jurisdiction to be invalid or unenforceable, that determination shall
not affect any other provision, covenant, obligation or agreement, each of which
shall be construed and enforced as if the invalid or unenforceable portion were
not contained herein. That invalidity or unenforceability shall not affect any
valid and enforceable application thereof, and each such provision, covenant,
obligation or agreement shall be deemed to be effective, operative, made,
entered into or taken in the manner and to the full extent permitted by law.
Section 8.8. GOVERNING LAW. This Agreement shall be deemed to be a
contract made under the laws of the State and for all purposes shall be governed
by and construed in accordance with the laws of the State.
Section 8.9. AMOUNTS REMAINING IN FUNDS. Any amounts in the Bond Fund
remaining unclaimed by the Holders of Bonds for four years after the due date
thereof (whether at stated maturity, by redemption or pursuant to any mandatory
sinking fund requirements or otherwise), shall be paid to the Borrower provided
that if the Trustee shall have drawn on the Letter of Credit, and the Bank is
owed any amount by the Borrower pursuant to the Reimbursement Agreement, such
amounts remaining in the Bond Fund shall belong and be paid first to the Bank to
the extent of such unpaid amounts. With respect to that principal of and any
premium and interest on the Bonds to be paid from moneys paid to the Borrower or
the Bank pursuant to the preceding sentence, the Holders of the Bonds entitled
to those moneys shall look solely to the Borrower for the payment of those
moneys.
Further, any amounts remaining in the Bond Fund (subject to any
limitations in the Indenture) and any other special funds or accounts (other
than the Project Fund and the Rebate Fund) created under this
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Agreement or the Indenture after all of the outstanding Bonds shall be deemed
to have been paid and discharged under the provisions of the Indenture and all
other amounts required to be paid under this Agreement, the Notes and the
Indenture have been paid, shall be paid (to the extent that those moneys are in
excess of the amounts necessary to effect the payment and discharge of the
outstanding Bonds) first, to the Bank to the extent that any amount is owed by
the Borrower to the Bank under the terms of the Letter of Credit or
Reimbursement Agreement, and then to the Borrower.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Issuer and the Borrower have executed this Loan
Agreement, all as of the date first above written.
THE CITY OF HUNTINGBURG, INDIANA
ATTEST:
By: /s/ Xxxxxx X. Xxxx
------------------
/s/ Xxxxxx X. Xxxxxxxxx Mayor
----------------------------
Clerk-Treasurer
DMI FURNITURE, INC.
By: /s/ Xxxxxx X. Xxxx
------------------------------------------
Title: Vice President, Chief Financial Officer
---------------------------------------
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EXHIBIT A
PROJECT NOTE
$2,940,000 June __, 1994
DMI Furniture, Inc., a Delaware corporation (the "Borrower"), for value
received, promises to pay to PNC Bank, Indiana, Inc., as trustee (the "Trustee")
under the Indenture hereinafter referred to, the principal sum of
TWO MILLION NINE HUNDRED FORTY THOUSAND DOLLARS
($2,940,000)
and to pay (i) interest on the unpaid balance of such principal sum from and
after the date of this Note at the interest rate borne by the Project Bonds from
time to time and (ii) interest on overdue principal, and to the extent permitted
by law, on overdue interest, at the interest rate provided under the terms of
the Project Bonds.
This Note has been executed and delivered by the Borrower pursuant to a
certain Loan Agreement (the "Agreement"), dated as of June 1, 1994, between the
City of Huntingburg, Indiana (the "Issuer") and the Borrower. Terms used but not
defined herein shall have the meanings ascribed to such terms in the Agreement
and the Indenture, as defined below.
Under the Agreement, the Issuer has loaned the Borrower the proceeds
received from the sale of the $2,940,000 aggregate principal amount of City of
Huntingburg, Indiana Adjustable Rate Economic Development Revenue Refunding
Bonds, Series 1994 (DMI Furniture Project), dated the date of their initial
delivery (the "Project Bonds"), to be applied to the refunding of the Prior
Bonds and thereby to assist in the refinancing of the Project. The Borrower has
agreed to repay such loan by making Loan Payments at the times and in the
amounts set forth in this Note. The Project Bonds have been issued, concurrently
with the execution and delivery of this Note, pursuant to, and are secured by,
the Trust Indenture (the "Indenture"), dated as of June 1, 1994, between the
Issuer and the Trustee.
To provide funds to pay the Bond Service Charges on the Project Bonds
as and when due, or to reimburse the Bank for draws under the Letter of Credit
to make such payments, the Borrower hereby agrees to and shall make Loan
Payments as follows: on each Interest Payment Date the amount equal to interest
due on the Project Bonds on such Interest Payment Date (each such day being a
"Loan Payment Date"). In addition, to provide funds to pay the Bond Service
Charges on the Project Bonds as and when due at any other time, the Borrower
hereby agrees to and shall make Loan Payments on any other date on which any
Bond Service Charges on the Project Bonds shall be due and payable, whether at
maturity, upon acceleration, call for redemption or otherwise.
A-1
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If payment or provision for payment in accordance with the Indenture is
made in respect of the Bond Service Charges on the Project Bonds from moneys
other than Loan Payments, this Note shall be deemed paid to the extent such
payments or provision for payment of Bond Service Charges has been made. The
Borrower shall receive a credit against its obligation to make Loan Payments
hereunder to the extent of the moneys delivered to the Trustee under and
pursuant to the Letter of Credit and any other amounts on deposit in the Bond
Fund and available to pay Bond Service Charges on the Project Bonds pursuant to
the Indenture. Subject to the foregoing, all Loan Payments shall be in the full
amount required hereunder.
All Loan Payments shall be payable in lawful money of the United States
of America and shall be made to the Trustee at its corporate trust office for
the account of the Issuer, deposited in the Bond Fund and used as provided in
the Indenture.
The obligation of the Borrower to make the payments required hereunder
shall be absolute and unconditional and the Borrower shall make such payments
without abatement, diminution or deduction regardless of any cause or
circumstances whatsoever including, without limitation, any defense, set-off,
recoupment or counterclaim which the Borrower may have or assert against the
Issuer, the Trustee, the Remarketing Agent, the Bank or any other person.
This Note is subject to optional, extraordinary optional and mandatory
prepayment, in whole or in part, upon the same terms and conditions, on the same
dates and at the same prepayment prices, as the Project Bonds are subject to
optional, extraordinary optional and mandatory redemption. Any optional or
extraordinary optional prepayment is also subject to satisfaction of any
applicable notice, deposit or other requirements set forth in the Agreement or
the Indenture.
Whenever an Event of Default under Section 7.01 of the Indenture shall
have occurred and, as a result thereof, the principal of and any premium on all
Bonds then outstanding, and interest accrued thereon, shall have been declared
to be immediately due and payable pursuant to Section 7.03 of the Indenture, the
unpaid principal amount of and any premium and accrued interest on this Note
also shall be due and payable on the date on which the principal of and premium
and interest on the Project Bonds shall have been declared due and payable;
provided that the annulment of a declaration of acceleration with respect to the
Bonds shall also constitute an annulment of any corresponding declaration with
respect to this Note.
IN WITNESS WHEREOF, the Borrower has signed this Note on June __, 1994.
DMI FURNITURE, INC.,
a Delaware corporation
By:
----------------------------
Xxxxxx X. Xxxx
Chief Financial Officer
A-2
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EXHIBIT B
PROJECT FACILITIES
The Project Facilities include the acquisition, construction and
equipping of a wood furniture manufacturing facility on the Project Site, and
all equipment, fixtures and furniture therein.
B-1
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EXHIBIT C
PROJECT SITE
LEGAL DESCRIPTION
A part of the Northwest Quarter of Section 34, Township 2 South, Range
5 West, described as follows:
Beginning South 1 degree 58 minutes East 1325.7 feet along the section
line and North 88 degrees 02 minutes East 30.0 feet from the northwest corner of
said quarter section; thence North 88 degrees 02 minutes East 805.78 feet;
thence South 1 degree 58 minutes East 287.70 feet along the west line of a
3.47-Acre tract heretofore conveyed to Xxxxxxxxx Warehouses, Inc. to the
southwest corner of said 3.47-Acre tract; thence North 88 degrees 02 minutes
East 230.8 feet to a point 30.0 feet South 88 degrees 02 minutes West of the
centerline of the Xxxxxx Street extended north; thence South 0 degrees 00
minutes West 316.53 feet parallel with and 30 feet West of the centerline of
Xxxxxx Street and/or the centerline projected; thence South 1 degree 58 minutes
East 100.0 feet; thence South 88 degrees 02 minutes West 522.96 feet; thence
South 1 degree 58 minutes East 152.69 feet; thence South 88 degrees 02 minutes
West 512.9 feet to the east line of Chestnut Street (30 feet from centerline);
thence North 1 degree 58 minutes West 856.53 feet to the point of beginning and
containing 16.68 Acres, more or less.
C-1
26
EXHIBIT 10(i)
LOAN AGREEMENT
between
CITY OF HUNTINGBURG, INDIANA
and
DMI FURNITURE, INC.
------------------------------------
Relating to
$2,940,000
City of Huntingburg, Indiana
Adjustable Rate Economic Development
Revenue Refunding Bonds, Series 1994
(DMI Furniture Project)
Dated
as of
June 1, 1994
Xxxxx, Xxxx & Heyburn
Bond Counsel
27
DISCUSSION DRAFT
INDEX
(This Index is not a part of the Agreement
but rather is for convenience of reference only)
Preambles Page
--------- ----
ARTICLE I 4
Section 1.1. USE OF DEFINED TERMS........................................................................4
Section 1.2. DEFINITIONS.................................................................................4
Section 1.3. INTERPRETATION..............................................................................7
Section 1.4. CAPTIONS AND HEADINGS.......................................................................7
ARTICLE II 7
Section 2.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER.....................................8
Section 2.2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER...................................9
ARTICLE III 10
Section 3.1. ISSUANCE OF THE PROJECT BONDS; APPLICATION OF PROCEEDS.....................................10
Section 3.2. INVESTMENT OF FUND MONEYS..................................................................11
Section 3.3. REBATE FUND................................................................................11
ARTICLE IV 11
Section 4.1. LOAN REPAYMENT; DELIVERY OF NOTES AND LETTER OF CREDIT.....................................11
Section 4.2. ADDITIONAL PAYMENTS........................................................................13
Section 4.3. PLACE OF PAYMENTS..........................................................................13
Section 4.4. OBLIGATIONS UNCONDITIONAL..................................................................13
Section 4.5. ASSIGNMENT OF AGREEMENT AND REVENUES.......................................................13
Section 4.6. LETTER OF CREDIT...........................................................................14
ARTICLE V 14
Section 5.1. RIGHT OF INSPECTION........................................................................14
Section 5.2. SALE, LEASE OR GRANT OF USE BY BORROWER....................................................14
Section 5.3. INDEMNIFICATION............................................................................14
Section 5.4. BORROWER NOT TO ADVERSELY AFFECT EXCLUSION FROM GROSS INCOME OF INTEREST ON PROJECT BONDS..16
Section 5.5. ASSIGNMENT BY ISSUER.......................................................................16
Section 5.6. BORROWER'S PERFORMANCE UNDER INDENTURE.....................................................16
Section 5.7. MAINTENANCE OF PROJECT.....................................................................16
Section 5.8. CONTINUED EXISTENCE........................................................................16
ARTICLE VI 16
Section 6.1. OPTIONAL REDEMPTION........................................................................16
Section 6.2. EXTRAORDINARY OPTIONAL REDEMPTION..........................................................16
3
28
Section 6.3. MANDATORY REDEMPTION OF PROJECT BONDS......................................................18
Section 6.4. ACTIONS BY ISSUER..........................................................................18
Section 6.5. REQUIRED DEPOSITS FOR OPTIONAL REDEMPTION..................................................18
ARTICLE VII 18
Section 7.1. EVENTS OF DEFAULT..........................................................................18
Section 7.2. REMEDIES ON DEFAULT........................................................................19
Section 7.3. NO REMEDY EXCLUSIVE........................................................................20
Section 7.4. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES..............................................20
Section 7.5. NO WAIVER..................................................................................21
Section 7.6. NOTICE OF DEFAULT..........................................................................21
Section 7.7. REMEDIES SUBJECT TO BANK'S DIRECTION.......................................................21
ARTICLE VIII 21
Section 8.1. TERM OF AGREEMENT..........................................................................21
Section 8.2. NOTICES....................................................................................21
Section 8.3. EXTENT OF COVENANTS OF THE ISSUER; NO PERSONAL LIABILITY...................................21
Section 8.4. BINDING EFFECT.............................................................................22
Section 8.5. AMENDMENTS AND SUPPLEMENTS.................................................................22
Section 8.6. EXECUTION COUNTERPARTS.....................................................................22
Section 8.7. SEVERABILITY...............................................................................22
Section 8.8. GOVERNING LAW..............................................................................22
Section 8.9. AMOUNTS REMAINING IN FUNDS.................................................................22
Exhibit A - PROJECT NOTE................. A-1
Exhibit B - PROJECT FACILITIES........... B-1
Exhibit C - PROJECT SITE................. C-1
4
