8447-93 Authorizing Economic Development Revenue (P.A.I. Properties $450,000)

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LOAN AGREEMENT, MORTGAGE AND SECURITY AGREEMENT This is a LOAN AGREEMENT, MORTGAGE AND SECURITY AGREEMENT, dated as of December 1, 1993 (herein referred to as the "Loan Agreement" or "Mortgage") between P.A.I. PROPERTIES, an Indiana Partnership (the "Borrower") , as mortgagor, and the CITY OF SOUTH BEND (the "Issuer") , a municipal corporation duly organized and validly existing under the laws of the State of Indiana. PRELIMINARY STATEMENT The Indiana Code, Title 36, Article 7, Chapters 11. 9 and 12 (the "Act") , have been enacted by the General Assembly of Indiana. The Act provides that an issuer may pursuant to the Act issue revenue bonds and loan the proceeds thereof to a developer or user for the purpose of financing all costs of purchase or construction of facilities, including real and personal property, for diversification of economic development and promotion of job opportunities in or near such issuer, such revenue bonds being payable primarily from the revenues derived from the repayment of such loan. The Issuer intends to issue its Economic Development Revenue Bond (P.A. I. Properties, an Indiana Partnership Project, Series 1993) (the "Series 1993 Bonds") in the aggregate principal amount of $450, 000. 00 pursuant to the Trust Indenture dated as of December 1, 1993 (the "Indenture") from the Issuer to 1st Source Bank, as Trustee (the "Trustee") , and intends to lend the proceeds of the Series 1993 Bonds pursuant to the provisions of this Loan Agreement to the Borrower to finance certain economic development facilities (the "Project") . This Loan Agreement provides for the repayment by the Borrower of the loan of the proceeds of the Series 1993 Bonds and further provides (i) for the Borrower s repayment obligation to be evidenced by the Borrower's Promissory Note, Series 1993 (the "Series 1993 Note") , in substantially the form attached hereto as Exhibit B, and (ii) for such loan and the Series 1993 Note to be secured by the mortgage and security interest herein provided. Pursuant to the Indenture, the Issuer will pledge and assign the Series 1993 Note and assign certain of its rights under this Loan Agreement as security for the Series 1993 Bonds. The Series 1993 Bonds and any Additional Bonds issued under the Indenture will be payable solely out of (i) the payments to be made by the Borrower on the Series 1993 Note and any other Notes, and (ii) Bond proceeds and proceeds of condemnation and insurance.