Loading...
HomeMy WebLinkAbout05- Rocky Mountain Furniture; Economic Loan - Loan Agreement LOAN AGREEMENT THIS LOAN AGREEMENT is made and entered into this 26!!:day of February 2005, by and between Rocky Mountain Furniture, LLC and Marc Lien, Kevin Cook and Karl Cook, as individuals, hereinafter referred to as "Borrowers", and the City of Bozeman, hereinafter referred to as the "Lender". Borrower agrees to pay to Lender the sum of One Hundred Thousand and No/lOO Dollars ($100,000.00), plus interest in accordance with the terms of this agreement. RECITALS WHEREAS, the Lender has established a Revolving Loan Fund for the pwpose of furthering economic development in the Bozeman jurisdictional area; and WHEREAS, the Borrowers wish to borrow funds from the Lender to further the activities of the company; and WHEREAS, the Borrowers have agreed not to remove the business activities or facilities for which the loan is intended from the Lender's jurisdictional area during the term of the loan; and WHEREAS, the Borrowers do not have sufficient assets available to satisfactorily secure this loan and the partners have agreed to personally guarantee the repayment on behalf of the Borrowers, NOW, THEREFORE, in consideration of the mutual covenants and conditions herein, the parties agree as follows: 1. Amount of Loan The Lender agrees under the terms and conditions of this Agreement, to make a loan for equipment and working capital to the Borrowers in the principal amount of $1 00,000, to be repaid over a term of not more than five (5) years. This loan is evidenced by a promissory note and further secured by an insurance policy in the amount of$500,000 naming Marc Lien, Managing Member, as the insured. Although the policy is owned by Rocky Mountain Furniture, LLC, the Borrowers will execute an assignment of benefits to the Lender in the amount of this loan. In addition, the Lender will have a second lien against all business assets of the Borrowers, including accounts receivable. 2. Interest Rate and Repayment of Loan The loan shall bear interest at five and one-quarter percent (5.25%) per annum. The term ofthe loan is five (5) years. Commencing with the 5th day of April, 2005, Borrowers shall make payments in the amount of $1,898.60 per month, in accordance with the amortization schedule attached hereto as exhibit "A". These payments will continue to be due and payable on the fifth day of each and every month thereafter until the loan is paid in full. The Borrowers will pay a late charge of two percent (2%) of the scheduled payment for any payment not made by the 15th day of the month in which it is due. Interest will accrue from the date funds are disbursed. Interest will accrue on both the delinquent payment and unpaid balance. All payments shall be first applied to penalties, then interest. There will be no penalty for prepayment of the loan. 3. Disbursement of Funds Lender shall distribute the full amount of the loan to the Borrowers within five (5) days of receiving all signed documents from the Borrowers. Page 1 of 8 4. Conditions of Loan A. The Managing Member, Marc Lien, will maintain a life insurance policy naming the Lender as an Assignee for the amount of the loan and shall deliver to the Lender a fully executed Assignment as collateral for the loan. B. Upon receipt of reasonable advance notice, the Borrowers will permit representatives of the Lender to inspect the Borrowers' facilities and records which are the subject of this loan. C. This Agreement is non-assignable except upon the written consent of the Lender. A request for consent to assignment must include a statement justifying the request and the financial statement ofthe proposed assignee. This statement must be current to within 90 days of the request. The Lender reserves the right to deny requests for assignment and to modify rates and terms of the Loan Agreement and its exhibits as conditions of an assignment. D. The Borrowers waive any and all claims and recourse against the Lender, including the right of contribution for loss and damage to persons or property arising from, growing out of, or in any way connected with or incident to this Agreement. Further, the Borrowers will indemnify, hold harmless, and defend the Lender against any and all claims, demands, damages, costs, expenses or liability arising out of the performance of the Borrowers. E. In the event that Rocky Mountain Furniture, LLC is sold or transferred during the term of this loan, the loan will become immediately due and payable. F. The Borrowers shall not remove the business activities or facilities for which the loan is intended from the city limits of the City of Bozeman. G. Borrowers shall not use the proceeds of the loan to payor repay rental monies in arrears over sixty (60) days. Living Wage The Borrowers agree to pay all workers employed by the Borrowers in the performance of this loan, a living wage as provided by Chapter 2.96 of the Bozeman Municipal Code. The Borrowers agree to make available for City inspection it's payroll records relating to employees providing services under this loan. If any payroll records of the Borrowers contain any false, misleading or fraudulent information, or ifthe Borrowers fail to comply with any of the provisions of Bozeman Municipal Code Chapter 2.96, the Borrowers will be in default and the City may withhold payments on the agreement, terminate, cancel or suspend the agreement in whole, or in part in addition to any remedies contained herein or at law. 6. Default A. The occurrence of anyone or more of the following events shall constitute a default ("event of default") by Borrowers under this Agreement: 1. Any representation or warranty made by the Borrowers in this Agreement or in any request or certificate or other information furnished to the Lender hereunder proves to have been incorrect in any material respect; 2. The Borrowers fail in any material respect to carry out the obligations under the proposal to the Lender for the loan provided hereunder; 3. The Borrowers fail to pay, when due, any indebtedness for any money borrowed, for which Borrowers are liable as principal obligor; Page 2 of 8 .,-. 4. The Borrowers apply for or consent to the appointment of a receiver, trustee or liquidator, admit in writing to its inability to pay its debts as they become due, make a general assignment for the benefit of creditors, or invoke any relief under any chapter of the United States Bankruptcy Code; 5. The Borrowers fail to provide adequate collateral for the subject loan ; 6. The Borrowers fail to pay all local personal property taxes specified to the project funded by the proceeds ofthis loan, as applicable; 7. The Borrowers remove the business activities for which the loan is intended from the Lender's jurisdictional area during the term of the loan; 8. The Borrowers fail to execute any documents reasonably necessary to make the Lender secure in its financial position as stated in this Agreement; 9. The Borrowers sell, transfer, pledge or hypothecate its stock so as to render the Lender insecure in its position of having the loan repaid; 10. The Members allow the life insurance policy assigned to the City to lapse and do not renew said policy in the amount specified in this Agreement; 11. The Borrowers violate any term, assurance, or condition of this Agreement; 12. Borrowers fail to obtain all applicable City business licenses. B. In the event the Borrowers fail to make timely payments under this Agreement or perform any of the covenants on its part or any event of default occurs as stated above, the Lender at any time thereafter may declare the Borrowers to be in default and thereafter give the Borrowers written notice setting forth the action or inaction which constitutes the default and giving the Borrowers thirty (30) days in which to correct the default. If the Borrowers fail to correct the default within thirty (30) days of receipt of this notice, the Lender may notify the Borrowers in writing that the full balance due upon this Agreement is then due and payable in full within thirty (30) days. It is agreed by the parties hereto that the provisions of this Agreement provide for reasonable and sufficient notice to be given to the Borrowers in case of the Borrowers' failure to perform any of its covenants and that this notice is sufficient for the Borrowers to rectify its actions or inaction of default. Any waiver by the Lender of any default by the Borrowers does not constitute a waiver of a continuing breach or a waiver of a subsequent breach. Any agreement contrary to this Agreement is not binding upon either party hereto unless it is in writing and signed by both parties. In the event of default, Lender, in its own absolute discretion, may exercise anyone or more ofthe rights and remedies accruing to a secured party under the laws of the State of Montana and any other applicable law and this agreement. All of the Lender's rights and remedies under this Agreement and the other agreements are cumulative and nonexclusive. 7. Non-Discrimination A. Civil Rights Act of 1964. The Borrowers will abide by the provisions of Title VI of the Civil Rights Act of 1964 which states that no person may, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance. Page 3 of 8 ....- B. Section 109 of the Housing and Community Development Act of 1974. In the performance of this contract the Borrower will obey this provision which states that: "No person in the United States may, on the grounds of race, color, national origin, or sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity funded in whole or in part with the funds made available under this title. Any prohibition against discrimination on the basis of age under the Age Discrimination Act of 1974 or with respect to an otherwise qualified handicapped individual as provided in Section 504 of the Rehabilitation Act of 1973 will also apply to any such program or activity." 8. Additional Assurances The Borrowers will remain fully obligated under the provisions of this Agreement notwithstanding its designation of any third party or parties with written approval of the Lender for the undertaking of all or any part of the program with respect to which assistance is being provided under this Agreement. The Borrowers will comply with all applicable laws, rules and regulations of the Lender, the State of Montana, and the United States Government and with all lawful requirements of the Lender so as to insure that this Agreement is carried out in accordance with the obligations and responsibility of the Lender of the State of Montana. 9. Insurance A. The Borrowers agree to provide fire and extended coverage insurance protection on machinery, equipment, furniture and fixtures in the sum of at least 80 percent of the cost of replacing the machinery, equipment, furniture and fixtures payable to the Lender for the amount of Lender's interest in such machinery, equipment, furniture and fixtures. B. The Borrowers may, upon written approval of the Lender, in the event of loss, apply insurance proceeds received by the Lender towards the payment of the loan or use the proceeds to replace the machinery, equipment, furniture and fixtures destroyed. During the term of this Loan Agreement, when the Borrowers renew the insurance policy by payment of an additional year's premium, the Borrowers will provide proof of payment of the premium to the Lender so as to keep the Lender advised at all times that the properties are insured. Failure to so notify the Lender is an event of default of this Loan Agreement for purposes of the default provisions of Section 6 above. 10. Litigation The Borrowers state that to the best of its knowledge and belief there are no suits or proceedings pending or threatened against or affecting it, other than those disclosed in the loan application, which, if adversely determined, would have a material adverse effect on its financial condition. In addition, to the knowledge of the Borrowers, there are no proceedings by or before any governmental commission, board, bureau or other administrative agency pending, or threatened against the Borrowers. 11. Attorney's Fees In the event that either party incurs legal expenses, including the costs, expenses, salary and fees of the in-house counsel, to include City Attorney, to enforce the terms and conditions of this Agreement, the prevailing party is entitled to recover reasonable attorney's fees and other costs and expenses, whether the same are incurred with or without suit, including fees on appeal. 12. Avoidance of Conflict of Interest The Borrowers covenant that no officer, member, agent, or employee of the Lender who participates in the administration of this Agreement in other than a purely ministerial capacity will have any personal interest, real 'or apparent, in the proceeds of the loan provided hereby. For Page 4 of 8 purposes ofthis covenant, an impermissible conflict of interest exists if the officer, member, agent or employee; any member of his or her inunediate family; his or her partner; or an organization which employs, or is about to employ, any of the foregoing has a financial or other interest in the proceeds hereof during his or her tenure or for one year thereafter. The Borrowers shall incorporate, or cause to be incorporated, in all contracts or subcontracts a provision prohibiting such interest pursuant to the purposes of this section. 13. Construction and Venue This Agreement will be construed under and governed by the laws of the State of Montana. In the event oflitigation concerning it, venue is in the 18th Judicial District Court, Gallatin County, Montana. 14. Modifications Any amendments or modifications of this agreement, or any provisions herein shall be made in writing and executed in the same manner as an original document and shall after execution become part of this agreement. 15. Demand: Any demand upon or notice to either party shall be by personal service or addressed and mailed to the following addresses: LENDER: BORROWER: City Manager Rocky Mountain Furniture, LLC P.O. Box 1230 2310 North 7th Bozeman, MT 59771 Bozeman, Montana 59715 Mailing shall be by certified mail, return receipt requested, and shall be effective when served or three (3) days after deposit in the United States Mail, whichever occurs first. 16. Waiver No waiver of any default shall constitute a waiver of any other default, nor shall such waiver constitute a continuing waiver. No waiver of any term or condition of this Agreement shall constitute a waiver of any other term or condition, whether or not similar, nor shall such waiver constitute a continuing waiver. 17. Headings The headings used in this Agreement are for reference purposes only. 18. Binder This Agreement shall be binding upon the heirs, personal representatives, successors and assigns of the Parties. Page 5 of 8 19. Authority The undersigned Borrowers affirm that they have the authority to enter into this agreement on behalf ofthemselves and the Members and to bind the undersigned Borrowers and Members to this Agreement. DATEDnnS2S-daYOf~~IU'l:J., ,2~ BORR ERS: ROCKY MOUNTAIN FURNITURE, LLC BY:~L.t _L Marc Lien, Managing Member AND ffi Ilu-~ L Marc Lien, Individually :;c~~ ---, . Kevin Cook, Individua y - //~ Karl Cook, IndlVI uaUy LENDER: CITY OF BOZEMAN anager ATTEST: ~.~v~ Clerk of Commission STATE OF MONTANA ) :ss County of Gallatin ) On this ~ay of February 2005, before me, a Notary Public for the State of Montana, personally appeared Marc Lien known to me to be the Managing Member of Rocky Mountain Furniture, LLC and the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same for and on behalf of the Rocky Mountain Furniture, LLC. Page 6 of 8 .IN-WiTNESS WHEREOF, I have hereunto set my hand and affixed my seal on the day and yeO)" ;UsI wrill~~~ve. ~ ~ '--"'~"" (~.-~ ---'" -~ ~ --: ::: .. ., -" YO. " ./ 0.. pm~e Of~ Pub Ie :- ' ::: ...~ Notary Public for the State of Montana -;:. _ ::-. r-.... .: . - Residing at Bozeman, Montana -'. :..,:..: .:,.'v My Commission Expires 'Z/I.:t/2.00 r STATE OF MONTANA ) :ss County of Gallatin ) On this 2S-tb.day of February 2005, before me, a Notary Public for the State of Montana, personally appeared MARC LIEN known to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal on the day and year first written above. .. _ (SEAt}_. - ~::. -:-~ >::- -'- Printe 'ame of 0 - Pub1i~ :.- ~/:C.::. Notary Public for the State of Montana "" =- ~~ ...7 Residing at Bozeman, Montana '. ".' ..... My Commission Expires 12.../t 0/ ,2 t"J ~ S- STAT~.G:S:'MONTANA) " -- :~ County of Gallatin ) On this 2S f~ay of February 2005, before me, a Notary Public for the State of Montana, personally appeared KEVIN COOK known to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. ... .; .IN- WITNESS WHEREOF, I have hereunto set my hand and affixed my seal on the day and ->Yea:~n:J WtitJen above. _ ~ -~~ :-~ (kM1 . ~ -. ~ >};.:- Printed ame ~f 01 - ;'blif" .G" . Notary Public for the State of Montana Residing at Bozeman, Montana My Commission Expires 12IJd / Lad lr' , , STATE OF MONTANA ) :ss County of Gallatin ) On this ~ay of February 2005, before me, a Notary Public for the State of Montana, Page 7 of 8 personally appeared KARL COOK known to me to be the persons whose name is subscribed to the \Yithin ,itl$trument, and acknowledged to me that he executed the same. -- ....."';. '"... "" -jo , -- .~-.~- v.: ~ wtiNEss WHEREOF, I have hereunto set my hand and affixed my seal on the day and -';: yearBrsttvritten above. ~ >;kAL~ - ~i: . - _ - Printe ~e o~ .ry ~hrfc - Notary Public for the State of Montana Residing at Bozeman, Montana STATE OF MONTANA ) My Commission Expires 12.../J.3 /~? S :ss County of Gallatin ) .,.. On thisalf day of February 2005, before me, a Notary Public for the State of Montana, personally appeared Ron Brey and Robin L. Sullivan, known to me to be the Assistant City Manager and the Clerk of Commission of the City of Bozeman, respectively, ofthe City of Bozeman and the persons whose names are subscribed to the within instrument, and acknowledged to me that they executed the same for and on behalf of the City ofBozemano _. /-~ -'-NWI'l:~~SS WHEREOF, I have hereunto set y hand and affixed my seal on the day and year first~tten rve. . '? ..- -(SE'AL) - . I ~ (! Printed Name of Notary Public Notary Public for the State of Montana Residing at Bozeman, Montana My Commission Expires d, -/., o,d dt) ? Page 8 of 8