HomeMy WebLinkAboutResolution 5050 Intercap Loan Documents for Broken Park Sidewalk and Story Mill Facility Upgrades RESOLUTION NO. 5050
A RESOLUTION AUTHORIZING PARTICIPATION IN THE BOARD OF
INVESTMENTS OF THE STATE OF MONTANA ANNUAL ADJUSTABLE RATE
TENDER OPTION MUNICIPAL FINANCE CONSOLIDATION ACT BONDS
(INTERCAP REVOLVING PROGRAM), APPROVING THE FORM AND TERMS OF
THE LOAN AGREEMENT AND AUTHORIZING THE EXECUTION AND DELIVERY
OF DOCUMENTS RELATED THERETO.
WHEREAS, the State of Montana Board of Investments (the Board) has established an
INTERCAP revolving program (the Program) pursuant to which it proposes to issue tax-exempt
bonds for the purpose of financing capital programs for Montana local government units; and
WHEREAS, the City Commission did, on the 25th day of June 2018, after due and
proper legal notice, conduct a public hearing on adopted the municipal budget including this
funding and projects.
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of
Bozeman, Montana,to wit:
Section 1 —Determination and Definitions
Section 1.01. Definitions. The following terms will have the meanings indicated below
for all purposes of this Resolution unless the context clearly requires otherwise. Capitalized
terms used in this Resolution and not defined herein shall have the meanings set forth in the
Loan Agreement.
Resolution 5050, Promissory Note and Loan Agreement
Adjusted Interest Rate means the rate of interest on the Bonds determined in
accordance with the provisions of Section 3. 03 of the Indenture.
Authorized Representative shall mean the officers of the Borrower designated and duly
empowered by the Governing Body and set forth in the application.
Board shall mean the Board of Investments of the State of Montana, a public body
corporate organized and existing under the laws of the State and its successors and assigns.
Board Act shall mean Section 2-15-1808, Title 17, Chapter 5,Pait 16, MCA, as
amended.
Bonds shall mean the Bonds issued by the Board pursuant to the Indenture to finance
the Program.
Borrower shall mean the Borrower above named.
Indenture shall mean that celtain Indenture of Trust dated March 1, 1991 by and
between the Board and the Trustee pursuant to which the Bonds are to be issued and all
supplemental indentures thereto.
Loan means the loan of money by the Board to the Borrower under the terms of the
Loan Agreement pursuant to the Act and the Borrower Act and evidenced by the Note.
Loan Agreement means the Loan Agreement between the Borrower and the Board,
including any amendment thereof or supplement thereto entered into in accordance with the
provisions thereof and hereof.
Loan Agreement Resolution means this Resolution or such other form of resolution
that the Board may approve and all amendments and supplements thereto.
Loan Date means the date of closing a Loan.
Loan Rate means the rate of interest on the Loan which is initially 3 .3 7%per annum
through February 15, 2020 and thereafter a rate equal to the Adjusted Interest Rate on the Bonds .
and up to 1.50%per annum as necessary to pay Program Expenses.
Note means the promissory note to be executed by the Borrower pursuant to the Loan
Agreement, in accordance with the provisions hereof and thereof, in substantially the form set
forth in the Promissory Note, or in such form that may be approved by the Board.
Program shall mean the INTER CAP Program of the Board pursuant to which the
Board will issue and sell Bonds and use the proceeds to make loans to participating Eligible
Government Units.
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Resolution 5050,Promissmy Note and Loan Agreement
Project shall mean those items of equipment, personal or real property improvements to
be acquired, installed, financed or refinanced under the Program as set forth in the Description of
the Project/Summary of Draws.
Trustee shall mean U.S. Bank National Association (formerly known as First Trust
Company of Montana National Association) and its successors.
Section 1.02. Authority. The Borrower is auth' rized to undertake the Project and is
further authorized by the Borrower Act to enter into the Loan Agreement for the purpose of
obtaining a loan to finance or refinance the acquisition and installation costs of the Project.
Section 1.03. Execution of Agreement and Delivery of Note. Pursuant to the Indenture
and the Board Act,the Board has issued and sold the Bonds and deposited a part of proceeds
thereof in the Loan Fund held by the Trustee. The Board has,pursuant to the Term Sheet, agreed
to make a Loan to the Borrower in the principal amount of$563,746.00 and upon the further
terms and conditions set forth herein, and as set forth in the Term Sheet and the Loan
Agreement.
Section 2—The Loan Agreement
Section 2.01. Terms. (a) The Loan Agreement shall be dated as of the Loan Date, in the
principal amount of$563,746.00 and shall constitute a valid and legally binding obligation of the
Borrower. The obligation to repay the Loan shall be evidenced by a Promissory Note. The Loan
shall bear interest at the initial rate of 3 .37%per annum through February 15, 2020 and thereafter
at the Adjusted Interest Rate, plus up to 1.50% per annum as necessary to pay the cost of
administering the Program(the Program Expenses). All payments may be made by check or wire
transfer to the Trustee at its principal corporate trust office.
(b) The Loan Repayment Dates shall be February 15 and August 15 of each year.
(c)The principal amount of the Loan may be prepaid in whole or in part provided
that the Borrower has given written notice of its intention to prepay the Loan in whole or in part
to the Board no later than 30 days prior to the designated prepayment date.
( d) The Prepayment Amount shall be equal to the principal amount of the Loan
outstanding,plus accrued interest thereon to the date of prepayment.
(e) Within fifteen days following an Adjustment Date, the Trustee shall calculate
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Resolution 5050,Promissory Note and Loan Agreement
the respective amounts of principal and interest payable by each Borrower on and with respect to
its Loan Agreement and Note for the subsequent August 15 and February 15 payments, and
prepare and mail by first class mail a statement therefor to the Borrower.
Section 2.02. Use and Disbursement of the Proceeds. The proceeds of the Loan
will be expended solely for the purposes set forth in the Description of the Project/Summary of
Draws. The proceeds from the sale of the Note to the Board shall remain in the Borrower's
Account pending disbursement at the request of the Borrower to pay the budgeted expenditures
in anticipation of which the Note was issued. Requests for disbursement of the Loan shall be
made to the Board. Prior to the closing of the Loan and the first disbursement,the Borrower shall
have delivered to the Trustee a certified copy of this Resolution,the executed Loan Agreement
and Note in a form satisfactOly to the Borrower's Counsel and the Board's Bond Counsel and
such other celiificates, documents and opinions as set forth in the Loan Agreement or as the
Board or Trustee may require. The Borrower will pay the loan proceeds to a third party within
five business days after the date they are advanced (except for proceeds to reimburse the
Borrower for previously paid expenditures,which are deemed allocated on the date advanced).
Section 2.03. Payment and Security for the Note. In consideration of the making
of the Loan to the Borrower by the Board,the provisions of this Resolution shall be a part of the
Agreement of the Borrower with the Board. The provisions, covenants and Agreements herein
set forth to be performed by or on behalf of the Borrower shall be for the benefit of the Board.
The Loan Agreement and Note shall constitute a valid and legally binding obligation of the
Borrower and the principal of and interest on the Loan shall be payable from the general fund of
the Borrower, and any other money and funds of the Borrower otherwise legally available
therefor. The Borrower shall enforce its rights to receive and collect all such taxes and revenues
to insure the prompt payment of the Borrower obligations hereunder.
Section 2.04. Representation Regarding the Property Tax Limitation Act. The
Borrower recognizes and acknowledges that the amount of taxes it may levy is limited by the
state pursuant to Section 15-10-402, et. seq. (the Propeliy Tax Limitation Act). The Borrower is
familiar with the Propriety Tax Limitation Act and acknowledges that the obligation to repay the
Loan under the Agreement and Note are not exceptions to the provisions of the Property Tax
Limitation Act. The Borrower represents and covenants that the payment of principal of and
interest on the Loan can and will be made from revenues available to the Borrower in the years
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Resolution 5050,Promissory Note and Loan Agreement
as they become due, notwithstanding the provisions of the Property Tax Limitation Act.
Section 2.05. Levy and Appropriate Funds to Repay Loan. The Borrower agrees that in order to
meet its obligation to repay the Loan and all other payments hereunder that it will budget, levy
taxes for and appropriate in each fiscal year during the term of the Loan an amount sufficient to
pay the principal of and interest hereon within the limitations of the Property Tax Limitation Act,
as may be amended, and will reduce other expenditures if necessary to make the payments
hereunder when due.
Section 3- Certifications,Execution and Delivery
Section 3.01. Authentication of Transcript. The Authorized Representatives are
authorized and directed to prepare and furnish to the Board and to attorneys approving the validity
of the Bonds, certified copies of this Resolution and all other resolutions and actions of the
Borrower and of said officers relating to the Loan Agreement, the Note, and certificates as to all
other proceedings and records of the Borrower which are reasonably required to evidence the
validity and marketability of the Note. All such certified copies and certificates shall be deemed
the representations and recitals of the Borrower as to the correctness of the statements contained
therein.
Section 3.02. Legal Opinion. The attorney to the Borrower is hereby authorized and
directed to deliver to the Board at the time of Closing of the Loan his or her opinion regarding the
Loan, the Loan Agreement, the Note and this Resolution in substantially the form of the opinion
set forth in the Attorney's Opinion.
Section 3.03. Execution. The Loan Agreement, Note, and any other document
required to close the Loan shall be executed in the name of the Borrower and shall be executed on
behalf of the Borrower by the signatures of the Authorized Representatives of the Borrower.
Section 4
That should it be found by any court of competent jurisdiction that any section, clause,
portion, sentence, word, or phrase of this resolution is deemed to be contrary to any existing law
or regulations,that in this instance, it is the intent of the City Commission of the City of Bozeman,
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Resolution 5050,Promissory Note and Loan Agreement
Montana, that all other portions, sections, words, clauses,phrases, or paragraphs of this document
shall remain in full force and effect
PASSED, ADOPTED, AND APPROVED by the City Commission of the City of
Bozeman, Montana, at a regular session thereof held on the 13th day of May, 2019.
YN IA L DRUS
Mayor
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ATTEST:
. K
ROBIN CROUGH � ��-•�,
City Clerk �'•. 1883 .• ,
�LgTIN CO.—
APPROVED TO FORM:
RE ULLIVAN
City Attorney
Page 6 of 6
STATE OF MONTANA BOARD OF INVESTMENTS
Loan Closing Instructions
Attached are two sets of the INTERCAP loan closing documents which should be properly executed (signed)by the
Authorized Representatives of the Borrower. The original set of documents should be returned to the Board of
Investments (the "Board");please keep the set stamped"Copy"for your files. Please send to:
Board of Investments
Bond Program Office
P.O. Box 200126
Helena,Montana 59620-0126
(406)444-0001
LOAN CLOSING DOCUMENTS:
1. Resolution AuthorizingPrticipation in the INTERCAP Program-The Borrower's governing board will have
to authorize the INTERCAP loan. A Resolution is enclosed for your use. An Authorized Representative
should sign and certify the Resolution.
2. Loan Agreement-Check all numbers on the face of the Loan Agreement to be sure that you are in agreement.
Have an Authorized Representative enter into this loan agreement and sign it where indicated.
3. Description of the Project/Summary of Disbursements - Examine the information and numbers on this
document.This is an informational record that will keep a running total of how much has been expended on
the Project.
4. Borrower's Draw Certificate-This document shows the specific funding amounts for the cash advancement
and funding instructions. The certificate has been completed by the BOI; however, it should be carefully
reviewed for accuracy and signed by an Authorized Representative.
5. Promissory Note - Be sure that this document is signed by an Authorized Representative. Examine the
schedule which shows the principal payments for the life of the loan and interest payments to the next interest
adjustment date.
6. Opinion of Counsel-Your governing body's general counsel must review the entire transaction and provide
the BOI with an opinion substantially in this format on its letterhead and dated as of the day of the closing.
The opinion calls for several representations and also that the Borrower has perfected a security interest for
the benefit of the BOI for equipment and vehicles, if applicable.
7. Certificate of Appropriations(if applicable)-This certificate must be executed and returned to our office. A
new Certificate of Appropriations must be executed and returned to our office by August 15 of each year the
loan is outstanding. The Trustee will remind you in July of its submission requirement.
8. Disbursement Request Form When requesting additional funds, a Disbursement Request Form must be
completed and signed by an Authorized Representative with invoice(s)attached. If your request is received
by Tuesday, the disbursement will be made that Friday. Otherwise, the disbursement will be made the
following Friday. There may be instances when additional documents may be necessary in addition to a
Disbursement Request Form. For example, if your INTERCAP application included two different projects
(e.g.real property and equipment)and your initial draw was for real property(which didn't require a Security
Agreement), when additional funds are requested for the equipment, a Security Agreement and an Opinion
of Counsel reflecting a first lien on the equipment will be needed. More time may be needed if additional
documents are required and we will contact you with specific requirements.
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Loan#2810
LOAN AGREEMENT
between
BOARD OF INVESTMENTS
OF THE STATE OF MONTANA
as Lender
and
CITY OF BOZEMAN
as Borrower
DATE OF AGREEMENT: May 24,2019
LOAN AMOUNT: FIVE HUNDRED SIXTY-THREE THOUSAND SEVEN HUNDRED
FORTY-SIX AND N0/100 DOLLARS ($563,746.00)
ADDRESS OF BORROWER: City of Bozeman
P.O. Box 1230
Bozeman,MT 59771
CONTACT PERSON OF BORROWER:
NAME Andrea Surratt
TITLE City Manager
TELEPHONE (406) 582-2300
E-MAIL Asurratt@,bozeman.net
ALTERNATE CONTACT PERSON
NAME Robin Crough
TITLE ^,_-,-and n eem J� Li Uvk-
TELEPHONE (406)582-2331
E-MAIL rcroughObozeman.net
STATUTORY AUTHORITY FOR BORROWING: 7-5-4306, 7-16-4104,MCA
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND RULES OF INTERPRETATION. ...................................................................2
SECTION1.01. DEFINITIONS....................................................................................................................................................2
SECTION 1.02. RULES OF INTERPRETATION.............................................................................................................................5
SECTION1.03. ATTACHMENTS................................................................................................................................................5
ARTICLE II. REPRESENTATIONS, COVENANTS AND WARRANTIES OF BORROWER...........................5
SECTION 2.01. REPRESENTATIONS AND WARRANTIES............................................................................................................5
SECTION 2.02. PARTICULAR COVENANTS OF BORROWER.......................................................................................................7
ARTICLE III. LOAN TO BORROWER..................................................................................................................7
ARTICLE IV. LOAN PROVISIONS.......................................................................................................................7
SECTION 4.01. COMMENCEMENT OF LOAN AGREEMENT.........................................................................................................7
SECTION 4.02. TERMINATION OF AGREEMENT........................................................................................................................7
SECTION 4.03. TERM OF LOAN AGREEMENT...........................................................................................................................7
SECTION 4.04. LOAN CLOSING SUBMISSIONS..........................................................................................................................7
SECTION 4.05. INITIAL AND SUBSEQUENT DRAWS OF LOAN...................................................................................................8
ARTICLE V. LOAN REPAYMENTS AND NOTE................................................................................................8
SECTION 5.01. PAYMENT OF LOAN REPAYMENTS...................................................................................................................8
SECTION 5.02. DELINQUENT LOAN PAYMENTS.......................................................................................................................9
SECTION5.03. THE NOTE........................................................................................................................................................9
ARTICLEVI. TERM. ..............................................................................................................................................9
ARTICLE VII. OBLIGATIONS OF BORROWER UNCONDITIONAL...............................................................9
SECTION 7.01. OBLIGATIONS OF BORROWER..........................................................................................................................9
ARTICLE VIII. FINANCIAL COVENANTS (GENERAL FUND).................................................................... 10
SECTION 8.01. REPRESENTATION REGARDING THE PROPERTY TAX LIMITATION ACT..........................................................10 P
SECTION 8.02. LEVY AND APPROPRIATE FUNDS TO REPAY LOAN. .......................................................................................10
SECTION 8.03. REPORTS AND OPINION;INSPECTIONS...........................................................................................................10
ARTICLE IX. DISCLAIMER OF WARRANTIES............................................................................................... 10
ARTICLE X. OPTION TO PREPAY LOAN......................................................................................................... 10
ARTICLEXI. ASSIGNMENT............................................................................................................................... 11
SECTION 11.01. ASSIGNMENT BY BOARD OR TRUSTEE.........................................................................................................11
SECTION IL 02. ASSIGNMENT BY BORROWER.......................................................................................................................I I
ARTICLE XII. EVENTS OF DEFAULT AND REMEDIES................................................................................ I I
SECTION 12.01. EVENTS OF DEFAULT DEFINED....................................................................................................................11
SECTION12.02. NOTICE OF DEFAULT. ..................................................................................................................................12
SECTION 12.03. REMEDIES ON DEFAULT...............................................................................................................................12
SECTION 12.04. ATTORNEYS FEES AND OTHER EXPENSES....................................................................................................12
SECTION 12.05. APPLICATION OF MONEYS...........................................................................................................................12
SECTION 12.06. NO REMEDY EXCLUSIVE,WAIVER AND NOTICE..........................................................................................12
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ARTICLE XIII. MISCELLANEOUS..................................................................................................................... 13
SECTION13.01. NOTICES. .....................................................................................................................................................13
SECTION 13.02. BINDING EFFECT..........................................................................................................................................13
SECTION13.03. SEVERABILITY.............................................................................................................................................13
SECTION 13.04. AMENDMENTS,CHANGES AND MODIFICATIONS..........................................................................................13
SECTION 13.05. EXECUTION IN COUNTERPARTS. ..................................................................................................................13
SECTION13.06. APPLICABLE ACT.........................................................................................................................................13
SECTION 13.07. CONSENTS AND APPROVALS........................................................................................................................13
SECTION13.08. INDEMNITY..................................................................................................................................................14
SECTION 13.09. WAIVER OF PERSONAL LIABILITY. ..............................................................................................................14
SECTION13.10. CAPTIONS....................................................................................................................................................14
ii
This Loan Agreement (the "Agreement") dated as of May 24, 2019, and entered into between the
Board of Investments of the State of Montana(the 'Board"), a public body corporate and instrumentality of the state
of Montana, and City of Bozeman("the Borrower"), a political subdivision of the State of Montana organized under
the laws of the State of Montana;
WITNESSETH:
WHEREAS,pursuant to Section 2-15-1808,Montana Code Annotated and Title 17, Chapter 5,Part
16,Montana Code Annotated (the "Act") and in accordance with the Indenture of Trust, dated as of March 1, 1991,
between the Board and U.S. Bank National Association (formerly known as First Trust Company of Montana
National Association) (the "Trustee"), has established its INTERCAP Revolving Program pursuant to which the
Board will issue,from time to time, its Annual Adjustable Rate Tender Option Municipal Finance Consolidation Act
Bonds (INTERCAP Revolving Program) (the 'Bonds"), for the purpose of making loans to Eligible Government
Units to finance or refinance the acquisition and installation of equipment,personal and real property improvements,
to provide temporary financing of projects or for other authorized corporate purposes of an Eligible Government Unit
(the "Projects"); and
WHEREAS, the Board has agreed to loan part of the proceeds of an issue of such Bonds to the
Borrower in the amount of$563,746.00,and the Borrower has agreed to borrow such amount from the Board,subject
to the terms and conditions of and for the purposes set forth in this Agreement; and
WHEREAS, the Borrower is authorized under the laws of the State of Montana, and has taken all
necessary action;to enter into this Agreement for the Project as identified in the Description of the Project/Summary
of Disbursements attached hereto.
NOW, THEREFORE, for and in consideration of the premises hereinafter contained, the parties
hereby agree as follows:
ARTICLE I. DEFINITIONS AND RULES OF INTERPRETATION.
Section 1.01. Definitions
The following terms will have the meanings indicated below for all purposes of this Agreement unless the
context clearly requires otherwise. Capitalized terms used in this Agreement and not defined herein shall have the
meanings set forth in the Indenture.
"Act"means Section 2-15-1808,Montana Code Annotated and Title 17,Chapter 5,Part 16,Montana
Code Annotated as now in effect and as it may from time to time hereafter be amended or supplemented.
"Adjusted Interest Rate"shall mean the interest rate on the Loan determined and established pursuant
to the Promissory Note hereto and the Loan Agreement or Bond Resolution.
"Adjustment Date" means the Initial Adjustment Date or a Subsequent Adjustment Date.
"Adjustment Period" means the period beginning on an Adjustment Date and ending on the day
before the next succeeding Adjustment Date.
"Amortization Schedule" means the schedule prepared for a loan advance to the Borrower showing
the principal amount advanced,the amortization of the principal, and the interest and principal payments due to the
Subsequent Interest Adjustment Date.
"Authorized Representative" shall mean the officers of the Borrower designated by the Governing
Body and set forth in the Application and signed on behalf of the Borrower by a duly authorized official.
2
"Board"means the Board of Investments of the State of Montana,a public body corporate organized
and existing under the laws of the State and its successors and assigns.
"Bonds" means the Board of Investments of the State of Montana's Annual Adjustable Rate Tender
Option Municipal Finance Consolidation Act Bonds (INTERCAP Revolving Program) authorized to be issued for
the Program.
"Borrower" means City of Bozeman, the Eligible Government Unit, which is borrowing and using
the proceeds of the Loan to finance,refinance or be reimbursed for, all or a portion of the Cost of the Total Project.
"Borrower Act"means 7-5-4306,7-16-4104,the section of Montana Code Annotated that authorizes
an Eligible Government Unit to borrow money on terms consistent with the Program.
"Borrower Resolution" means a resolution, duly and validly adopted by a Borrower authorizing the
execution and delivery to the Board of an Agreement and Note,in substantially the form provided,or such other form
of Resolution that the Board may approve and all amendments and supplements thereto.
"Commencement Date" means May 24, 2019, the date of the Agreement when the term of this
Agreement begins and the obligation of the Borrower to make Loan Repayments begins to accrue.
"Counsel" means an attorney or firm of attorneys duly admitted to practice law before the highest
court of any state.
"Default" means an event or condition the occurrence of which would, with the lapse of time or the
giving of notice or both,become an Event of Default.
"Eligible Government Unit" shall mean any municipal corporation or political subdivision of the
state, including without limitation any city,town,county,school district,or other special taxing district or assessment
or service district authorized by law to borrow money or any board, agency, or department of the state,or the board
of regents of the Montana university system when authorized by law to borrow money.
"Event of Default"means any occurrence or event described in Article X hereof.
"Fiscal Year" means the fiscal year of the Borrower beginning on July 1 and ending June 30.
"Governing Body" shall mean(i)with respect to a county,the Board of County Commissioners, (ii)
with respect to a city, the City Council or Commission, and (iii) with respect to a school district, county water or
sewer district, hospital district,rural fire district, or any other special purpose district,the Board of Trustees.
"Indenture" means that certain Indenture of Trust, dated as of March 1, 1991, by and between the
Board and the Trustee, as originally executed or as it may from time to time be supplemented, modified or amended
in accordance with its terms.
"Initial Adjustment Date"means the first February 16 following the date of the Agreement.
"Initial Interest Rate" means the Loan Rate from the date of the Agreement to the Initial Adjustment
Date.
"Loan" means the loan of money by the Board to the Borrower under the terms of this Agreement
pursuant to the Act and the Borrower Act, evidenced by the Note.
"Loan Agreement" or"Agreement"means this Agreement, including,the attachments hereto, if any,
as originally executed or as they may from time to time be supplemented, modified or amended in accordance with
,the terms hereof and of the Indenture.
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"Loan Date" means the date of closing a Loan.
"Loan Rate"means the rate of interest on the Loan as provided for in Section 5.01 of this Agreement.
"Loan Repayment Date" means February 15th and August 15th or, if any such day is not a Business
Day,the next Business Day thereafter, during the term of the Loan.
"Loan Repayments" means the payments payable by the Borrower pursuant to Article V of this
Agreement.
"Loan Term" means the term provided for in Article VI of this Agreement.
"Maximum Interest Rate" means the maximum rate of interest on the Bonds which shall not exceed
fifteen percent(15%)per annum.
"Note"means the promissory note executed and delivered by the Borrower attached hereto and made
a part hereof.
"Program"means the Board's INTERCAP Program established under the Act and pursuant to which
the Board finances Projects for Eligible Government Units.
"Program Expenses"means the expenses of the Program, including(without limitation)the fees and
expenses of the Trustee and such other fees and expenses of the Program or of the Board relating thereto as shall be
approved by the Board.
"Pro'ect" means those items of equipment, personal or real property improvements to be acquired,
installed, financed or refinanced under the Program and set forth in the Description of the Project/Summary of
Disbursements attached hereto.
"Project Costs" shall mean the portion of the costs of the Total Project to be financed by the
INTERCAP Loan. The Project Costs may not exceed the Loan Amount as set forth on the cover hereof.
"Series Supplemental Indenture of Trust" means a Supplemental Indenture of Trust authorizing the
issuance of an additional series of bonds in accordance with the provisions of the Indenture.
"State" means the state of Montana.
"Subsequent Interest Adjustment Date or Subsequent Adjustment Date" means February 16 in the
years the Loan remains outstanding.
"Term Sheet" shall mean the document containing the terms and conditions issued by the Board to
the Borrower that must be satisfied prior to entering into a Loan Agreement.
"Term Sheet Issuance Date" means the date the Board executes its Term Sheet under the Board's
Program.
"Total Project" shall mean the project as described in Section 14 of the Term Sheet and/or Section 2
of the application,of which some or all is to be financed by the INTERCAP Loan.
"Total Project Costs" shall mean the entire cost of acquiring, completing or constructing the project
as further described in Section 14 of the Terms&Conditions Sheet and/or Section 2 of the application.
4
"Trustee" means the U.S. Bank National Association (formerly known as First Trust Company of
Montana National Association), a corporation organized and existing under the laws of the United States, or its
successor as trustee as provided in the Indenture.
Section 1.02.. Rules of Interpretation.
For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise
requires:
(a) "This Agreement" means this instrument as originally executed and as it may from time to time
be modified or amended.
(b) All references in this instrument to designated "Articles", "Sections" and other subdivisions are
to the designated Articles, Sections and other subdivisions of this instrument as originally executed. The
words "herein", "hereof', "hereunder", and "herewith" and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or other subdivision.
(c) The terms defined in this Article have the meanings assigned to them in this Article and include
the plural as well as the singular.
(d) All accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles.
(e) The terms defined elsewhere in this Agreement shall have the meanings therein prescribed for
them.
(f) Words of the masculine gender shall be deemed and construed to include correlative words of
the feminine and neuter gender.
(g) The headings or captions used in this Agreement are for convenience of reference only and shall
not define or limit or describe any of the provisions hereof or the scope or intent hereof.
(h) This Agreement shall be construed in accordance with the laws of the State.
Section 1.03. Attachments
The following are attachments and a part of this Agreement:
Description of the Project/Summary of Disbursements.
Borrower's Draw Certificate.
Promissory Note.
Opinion of Borrower's Counsel.
Certificate of Appropriation(if applicable).
ARTICLE II. REPRESENTATIONS COVENANTS AND WARRANTIES OF BORROWER.
Section 2.01. Representations and Warranties.
Borrower represents and warrants for the benefit of the Board,the Trustee and the Bondholders as follows:
(a) Organization and Authority. The Borrower:
(1) is a political subdivision of the State of Montana; and
5
(2) has complied with all public bidding and other State and Federal laws applicable to this
Agreement and the acquisition or installation of the Project.
(b) Full Disclosure. There is no fact that the Borrower has not disclosed to the Board or its agents
in writing that materially adversely affects or(so far as the Borrower can now foresee), except for pending.
or proposed legislation or regulations that are a matter of public information affecting the ability of the
Borrower to levy property taxes,collect fees and charges for services provided by the Borrower or otherwise
receive revenues, that will materially adversely affect the properties, activities, prospects or condition
(financial or otherwise)of the Borrower or the ability of the Borrower to make all repayments and otherwise
perform its obligations under this Agreement, and the Note.
(c) Pending Litigation. There are no proceedings pending, or to the knowledge of the Borrower
threatened against or affecting the Borrower in any court or before any governmental authority or arbitration
board or tribunal that, if adversely determined, would materially adversely affect the properties, activities,
prospects or condition (financial or otherwise) of the Borrower, or the ability of the Borrower to make all
Loan Repayments and otherwise perform its obligations under this Agreement, and the Note,and that have
not been disclosed in writing to the Board.
(d) Borrowing Legal and Authorized. The transaction provided for in this Agreement,and the Note:
(1) are within the powers of the Borrower and have been duly authorized by all necessary
action on the part of the Borrower, including the adoption of a resolution substantially in the form
provided hereto with such modification as may be provided by the Board; and
(2) will not result in any breach of any of the terms,conditions or provisions of,or constitute
a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Borrower pursuant to any indenture, loan agreement or other instrument
(other than this Agreement and,the Note)to which the Borrower is a party or by which the Borrower
may be bound, nor will such action result in any violation of the provisions of any state laws, or
ordinances or resolutions of the Borrower; and
(3) the amount of the Loan represented hereby has been added to the amount of all other
outstanding debt of the Borrower and together therewith does not result in the Borrower exceeding
its statutory debt limitation.
(e) No Violation. No event has occurred and no condition exists that, upon execution of this
Agreement, and the Note or receipt of the Loan, would constitute a Default or an Event of Default. The
Borrower is not in violation in any material respect,and has not received notice of any claimed violation, of
any term of any agreement, statute, ordinance,resolution, bylaw or other instrument to which it is a party or
by which it or its property may be bound.
(f) Use of Proceeds. The Borrower will apply the proceeds of the Loan solely to finance the Project
Costs described in the Description of the Project/Summary of Disbursements attached hereto. In addition,
the Borrower will pay the loan proceeds to a third party within five business days after the date they are
advanced(except for proceeds to reimburse the Borrower for previously paid expenditures,which are deemed
allocated on the date advanced).Investment of proceeds by the Borrowers within the five business day period
of disbursement to a third party (except for proceeds to reimburse the Borrower for previously paid
expenditures)should be in Non-AMT Obligations as that term is defined in the Board's tax certificates.
(g) Completion of the Total Project; Payment of Total Project Costs. The Borrower shall proceed
diligently to complete the Total Project and to obtain the necessary funds to pay the Total Project Costs
thereof. The Borrower shall pay any amount required for the acquisition, construction and equipping of the
Total Project in excess of the Loan Amount as set forth on the cover hereof.
6
Section 2.02. Particular Covenants of Borrower.
(a) Compliance with Statutory Requirements Competitive Bidding Montana Labor Laws
Environmental Review, and Other Legal Requirements. The Borrower has complied with all statutory
requirements, including competitive bidding and labor requirements and environmental review, applicable
to the acquisition and construction of the Project.
(b) Maintenance and Use of Project. The Borrower shall maintain the Project in good condition,
make all necessary renewals, replacements, additions, betterments and improvements thereto and maintain
insurance with respect to the Project, its other properties and its operations in such amounts and against such
risks as are customary for governmental entities such as the Borrower.
(c) Financial Reports and Audits. The Borrower shall comply with the provisions of Title 2,Chapter
7,Part 5 Montana Code Annotated.
(d) Liens. The Borrower shall not create, incur or suffer to exist any lien, charge or encumbrance
on the property constituting the Project prior to the security interest granted hereunder other than (i) any
security interest or lien pursuant to a loan agreement,mortgage, deed of trust, indenture or similar financing
agreement of the Borrower in force and effect as of the date of this Agreement which creates a security
interest or lien in after-acquired property of the Borrower and which is approved in writing by the Board,(ii),
any security interest,mortgage or deed of trust permitted in writing by the Trustee,or(iii)any security interest
or lien imposed or arising by statute or operation of law.
(e) Expenses. The Borrower will,at the request of the Board,pay all expenses relating to the Loan,
the Note and this Agreement.
ARTICLE III. LOAN TO BORROWER.
Subject to the terms and conditions of this Agreement,the Board hereby agrees to loan and advance
to the Borrower,and the Borrower agrees to borrow and accept from the Board,the Loan in the principal amount not
to exceed$563,746.00.
ARTICLE IV. LOAN PROVISIONS.
Section 4.01. Commencement of Loan Agreement
This Agreement shall commence on the date hereof unless otherwise provided in this Agreement.
Section 4.02. Termination of Agreement.
This Agreement will terminate upon payment in full of all amounts due under this Agreement and upon the
full and complete performance and payment of all of the Borrower's other obligations hereunder. Until such
termination, all terms,conditions, and provisions of this Agreement shall remain in full force and effect.
Section 4.03. Term of Loan Agreement.
This Agreement shall be valid for the entire loan amount approved for one year from the Term Sheet Issuance
Date. Beginning one year after the Term Sheet Issuance Date, the Board may refuse to make a loan advance if the
Board determines that there has been a material adverse change in the circumstances of the Borrower.
Section 4.04. Loan Closing Submissions.
Concurrently with the execution and delivery of this Agreement,the Borrower is providing to the Board and
the Trustee,the following documents(except that the Board may waive any of such documents):
7
(a) A certified resolution of the Borrower in form and substance substantially identical to that
provided hereto; provided, however, that the Board may permit variances in such certified resolution from
the form or substance of such resolution if, in the good faith judgment of the Board, such variance is not to
the material detriment of the interests of the Program, the Bondholders and such certified resolutions are
acceptable to the Trustee;
(b) An opinion of the Borrower's counsel in form and substance substantially identical to the
Attorney's Opinion hereto;provided,however,that the Board may permit variances in such opinion from the
form or substance of such Attorney's Opinion if, in the good faith judgment of the Board, such variance is
not to the material detriment of the interests of the Program,the Bondholders and such opinion is acceptable
to the Trustee;
(c) A bill, or bills of sale,construction contract or contracts, invoice or invoices,purchase order or
purchase orders or other evidence satisfactory to the Board that the Project has been purchased, ordered,
constructed or installed by the Borrower or that any construction has been substantially completed and that
payment therefor is due and owing or, if the Borrower is to be reimbursed,that payment has been made; and
for any debt being refinanced, the canceled note or other financing document or other evidence satisfactory
to the Board of such refinancing;
(d) Such other closing documents and certificates as the Board may reasonably request.
Section 4.05. Initial and Subsequent Draws of Loan.
For the initial draw of the Loan,the Borrower shall deliver to the Board an executed copy of the Agreement,
complete with all attachments as listed in Section 4.04 including the Note and the Agreement Resolution and other
documents the Board requires.
For subsequent draws, if applicable, the Borrower shall deliver to the Board, an executed copy of a
Disbursement Request and any other documents the Board requires.
ARTICLE V. LOAN REPAYMENTS AND NOTE.
Section 5.01. Payment of Loan Repayments
(a) The Loan Repayment Dates shall be on February 15 and August 15 of each year with the first
Loan Repayment Date determined as follows:
First Loan Payment
Date of Draw Repayment Date Consisting of:
February 15 through April 17 August 15 Principal and Interest
April 18 through June 16 August 15 Interest only
June 17 through August 14 February 15 Principal and interest from
date of draw
August 15 through October 18 February 15 Principal and Interest
October 19 through December 17 February 15 Interest only
December 18 through February 14 August 15 Principal and Interest from
date of draw
(b) Borrower hereby agrees to make Loan Repayments to the Trustee on each Loan Repayment Date
to be calculated by the Trustee and consisting of the sum of the following items:
8
(i) Principal in an amount based upon the initial Amortization Schedule, the Amortization
Schedule being initially determined utilizing the Initial Interest Rate. Each advance of the principal
of the Loan as shown on the Amortization Schedule shall be repaid in semiannual installments on
each Loan Repayment Date commencing on the first Loan Repayment Date following the date
thereof and ending on the final maturity date set forth on the Amortization Schedule. Principal
payments will not be adjusted but the interest payment will be adjusted as provided in Section 5.01
hereof.
(ii) Interest for each Adjustment Period at the Loan Rate.
(c) The Loan Rate shall equal the interest rate on the Board's bonds, as determined pursuant to
Section 3.03 of the Indenture, plus up to 1.50% per annum as is necessary to pay the Borrower's share of
Program Expenses as determined by the Board. The interest rate on the Bonds shall not exceed 15% per
annum.
(d) Within thirty days of the Adjustment Date the Trustee shall calculate the new interest component
of the Loan Repayments and shall send a revised Amortization Schedule to the Borrower showing the amount
of the Borrower's semiannual Loan Repayments.
(e) Loan Repayments may be made by check,wire transfer,or Automatic Clearing House(ACH)of
funds to the Trustee.
Section 5.02. Delinquent Loan Payments.
From and after any Loan Repayment Date, until repaid, the Loan shall bear interest at a rate equal to two
percent on the yield(coupon equivalent)as of the Loan Repayment Date,on United States of America Treasury Bills
of a duration as close as possible to the term over which the Loan Repayment is delinquent.
Section 5.03. The Note.
On the date of this Agreement,the Borrower shall execute the attached Note. The obligations of the Borrower
under the Note shall be deemed to be amounts payable under Section 5.01. Each payment made to the Trustee
pursuant to the Note shall be deemed to be a credit against the corresponding obligation of the Borrower under Section
5.01 and any such payment made to the Trustee shall fulfill the Borrower's obligation to pay such amount hereunder
and under the Note.
ARTICLE VI. TERM.
The term of the Loan will be a maximum of ten(10)years and the specific term for each loan draw will be
set forth in the Borrower's Draw Certificate.
ARTICLE VII. OBLIGATIONS OF BORROWER UNCONDITIONAL
Section 7.01. Obligations of Borrower.
The obligations of the Borrower to make the payments required hereunder shall be absolute and unconditional
without any defense or right of set off, counterclaim or recoupment by reason of any default by the Board under the
Loan Agreement or under any other indebtedness or liability at any time owing to the Borrower by the Board or for
any other reason.
9
ARTICLE VIII. FINANCIAL COVENANTS (GENERAL FUND).
Section 8.01. Representation Regarding the Property Tax Limitation Act.
The Borrower recognizes and acknowledges that the amount of taxes it may levy is limited by the state
pursuant to Section 15-10-420, as amended (the Property Tax Limitation Act). The Borrower is familiar with the
Property Tax Limitation Act and acknowledges that the Loan Repayments to be made under the Agreement and Note
are not exceptions to the provisions of the Property Tax Limitation Act. The Borrower represents and covenants that
such Loan Repayments can and will be made from revenues available to the Borrower,notwithstanding the provisions
of the Property Tax Limitation Act.
Section 8.02. Levy and Appropriate Funds to Repay Loan.
The Borrower agrees that in order to meet its obligation to make the Loan Repayments and all other payments
hereunder that it will budget for as authorized and appropriate from taxes or any other available sources in each fiscal
year during the term of this Agreement an amount sufficient to pay the principal of and interest hereon within the
limitations of the Property Tax Limitation Act and will reduce other expenditures if necessary to make the payments
hereunder when due.
Section 8.03. Reports and Opinion; Inspections.
(a) The Borrower shall deliver to the Board by no later than August 15 of each year during the term
of this Agreement, a certificate in substantially the form attached hereto that the Governing Body of the
Borrower has budgeted and appropriated for the then current Fiscal Year an amount sufficient to make the
Loan Repayments due in that Fiscal Year, as required in Article VIII hereof.
(b) The Borrower agrees to permit the Board and the Trustee to examine, visit and inspect, at any
reasonable time,the property constituting the Project,and the Borrower's facilities,and any accounts,books
and records, including its receipts, disbursements, contracts, investments and any other matters relating
thereto and to pits financial standing, and to supply such reports and information as the Board or the Trustee
may reasonably require.
ARTICLE IX. DISCLAIMER OF WARRANTIES.
THE BOARD AND ITS AGENTS MAKE NO WARRANTY OR REPRESENTATION, EITHER
EXPRESSED OR IMPLIED,AS TO THE VALUE,DESIGN,CONDITION,MERCHANTABILITY OR FITNESS
FOR ANY OR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE PROJECT OR ANY PORTION
THEREOF OR ANY OTHER WARRANTY WITH RESPECT THERETO. In no event shall the Board or the
Trustee or their respective agents be liable for any incidental,indirect,special or consequential damages in connection
with or arising out of this Agreement or the Project or the existence,furnishing,functioning or Borrower's use of the
Project or any item or products or services provided for in this Agreement.
ARTICLE X. OPTION TO PREPAY LOAN.
The Borrower may prepay the Loan in whole or in part upon giving 30 days prior written notice to
the Board.
If the Loan is prepaid in part,the principal amount of the Loan shall be reduced by the portion of the
prepayment representing principal and the Loan shall be reamortized by ratably reducing the principal portion of each
remaining Loan Repayment.
10
ARTICLE XI. ASSIGNMENT.
Section 11.01. Assignment by Board or Trustee.
(a) The Borrower expressly acknowledges that all right,title and interest.of the Board in and to this
Agreement(except for the rights of the Board to indemnification pursuant to Section 13.08 hereof) and the
Note have been assigned to the Trustee, as security for the Bonds, under and as provided in the Indenture,
and that if any Event of Default shall occur, the Trustee shall be entitled to act hereunder in the place and
stead of the Board. In addition, the Borrower acknowledges that the Board has appointed the Trustee as
servicer entitled to act hereunder in the place and stead of the Board. This Agreement and the Note including
(without limitation) the right to receive payments required to be made by the Borrower hereunder and to
compel or otherwise enforce performance by the Borrower of its other obligations hereunder,may be further
assigned and reassigned in whole or in part to one or more assignees or subassignees by the Trustee at any
time subsequent to their execution without the necessity of obtaining the consent of the Borrower. Forthwith
upon any such assignment the Trustee shall notify the Borrower thereof.
(b) The Borrower acknowledges that payment of the Bonds does not constitute payment of the
amounts due under this Agreement.
Section 11.02. Assignment by Borrower.
This Agreement may not be assigned or encumbered by the Borrower for any reason without the express
written consent of the Trustee and the Board.
ARTICLE XII. EVENTS OF DEFAULT AND REMEDIES.
Section 12.01. Events of Default Defined.
If any of the following events occur, it is hereby defined as and declared to be and to constitute an "Event of
Default":
(a) Failure by the Borrower to pay any Loan Repayment required to be paid hereunder at the time
specified herein and the continuation of such failure for a period of three(3) days after telephonic or e-mail
notice by the Trustee that such payment has not been received;
(b) Failure by the Borrower to observe and perform any covenant,condition or agreement on its part
to be observed or performed under this Agreement, other than as referred to in Section 12.01(a)for a period
of thirty(30)days after written notice, specifying such failure and requesting that it be remedied, is given to
the Borrower by the Trustee, unless the Trustee shall agree in writing to an extension of such time prior to
its expiration; provided,however, if the failure stated in the notice cannot be corrected within the applicable
period, the Trustee will not unreasonably withhold their consent to an extension of such time if corrective
action is instituted by the Borrower within the applicable period and diligently pursued until the Default is
corrected;
(c) Any warranty, representation or other statement by or on behalf of the Borrower contained in
this Agreement or in any instrument furnished in compliance with or in reference to this Agreement or in
connection with the Loan, is false or misleading in any material respect;
(d) The Borrower files a petition in voluntary bankruptcy under the United States Bankruptcy Code
or seeks relief under any provision of any bankruptcy,reorganization,arrangement,insolvency,readjustment
of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect,or consents to
the filing of any petition against it under such law;
11
(e) The Borrower is generally not paying its debts as such debts become due, or becomes insolvent
or bankrupt or makes an assignment for the benefit of creditors,or a custodian(including without limitation
a receiver, liquidator or trustee) of the Borrower or any of its property is appointed by court order or takes
possession thereof and such order remains in effect or such possession continues for more than 30 days.
Section 12.02. Notice of Default.
The Borrower agrees to give the Trustee and the Board prompt written notice if any petition referred to in
Section 12.01(d) is filed by the Borrower or of the occurrence of any other event or condition which constitutes a
Default or an Event of Default immediately upon becoming aware of the existence thereof.
Section 12.03. Remedies on Default.
If an Event of Default referred to in Section 12.01(d)shall have occurred,the Trustee shall declare the Loan
and all other amounts due hereunder to be immediately due and payable, and upon notice to the Borrower the same
shall become due and payable without further notice or demand. Whenever any Event of Default referred to in
Section 12.01 hereof shall have happened and be continuing,the Trustee or the Board shall have the right to take any
action permitted or required pursuant to the Indenture and shall take one or any combination of the following remedial
steps:
(a) Declare the Loan and all other amounts due hereunder to be immediately due and payable, and
upon notice to the Borrower the same shall become immediately due and payable by Borrower without further
notice or demand; and
(b) Take whatever other action at law or in equity may appear necessary or desirable to collect the
amounts then due and thereafter to become due hereunder or to enforce any other of its or the Board's rights
hereunder, including without limitation,the appointment of a receiver as provided in the Act.
Section 12.04. Attorneys Fees and Other Expenses.
The Borrower shall on demand pay to the Board or the Trustee the reasonable fees and expenses of attorneys
and other reasonable expenses incurred by either of them, or by any agency of the State selected by the Board to act
on its behalf or by the Attorney General, in the collection of Loan Repayments or any other sum due or the
enforcement of performance of any other obligations of Borrower upon an Event of Default.
Section 12.05. Application of Moneys.
Any moneys collected by the Board or the Trustee pursuant to Section 12.03 hereof shall be applied(a)first,
to pay any attorney's fees or other fees and expenses owed by Borrower pursuant to Section 12.04 hereof; (b)second,
to pay interest due on the Loan; (c)third,to pay principal due on the Loan;(d)fourth,to pay any other amounts due
hereunder;and(e)fifth,to pay interest and principal on the Loan and other amounts payable hereunder but which are
not due,as they become due(in the same order, as to amounts which come due simultaneously, as in(a)through(d)
in this Section 12.05).
Section 12.06. No Remedy Exclusive, Waiver and Notice.
No remedy herein conferred upon or reserved to the Board or the Trustee is intended to be exclusive and
every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or
now or hereafter existing at law or in equity. No delay or omission to exercise any right, remedy or power accruing
upon any Default or Event of Default shall impair any such right, remedy or power or shall be construed to be a
waiver thereof, but any such right, remedy or power may be exercised from time to time and as often as may be
deemed expedient. In order to entitle the Board or the Trustee to exercise any remedy reserved to it in this Article
XII, it shall not be necessary to give any notice, other than such notice as may be required in this Article XII.
12
ARTICLE XIII. MISCELLANEOUS.
Section 13.01. Notices.
All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed
given when hand delivered or five days after mailed by registered or certified mail,postage prepaid,to the Borrower
at the address specified on the cover hereof and to the other parties at the following addresses:
(1) Board: Montana Board of Investments
Attn: Bond Program Office
P.O.Box 200126
Helena,Montana 59620-0126
(2) Trustee: U.S. Bank National Association
Corporate Trust Services PD-WA-T7CT
1420 Fifth Avenue, 71"Floor
Seattle,WA 98101
Any of the parties may, by notice in writing given to the others,designate any further or different addresses to which
subsequent notices,certifies or other communications shall be sent.
Section 13.02. BindingEffect.
ffect.
This Agreement shall inure to the benefit of and shall be binding upon the Board, the Borrower and their
respective successors and assigns.
Section 13.03. Severability.
In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction,such holding shall not invalidate or render unenforceable any other provision hereof.
Section 13.04. Amendments,Changes and Modifications.
This Agreement may not be amended by the Board and the Borrower unless such amendment shall have been
consented to in writing by the Trustee.
Section 13.05. Execution in Counterparts.
This Agreement may be simultaneously executed in several counterparts, each of which shall be an original
and all of which shall constitute but one and the same instrument.
Section 13.06. Applicable Act.
This Agreement shall be governed by and construed in accordance with the laws of the State.
Section 13.07. Consents and Approvals.
Whenever the written consent or approval of the Board shall be required under the provisions of this
Agreement,such consent or approval may be given by the Executive Director of the Board,unless otherwise provided
by law or by rules,regulations or resolutions of the Board or unless delegated to the Trustee.
13
Section 13.08. Indemnity.
The Borrower agrees to indemnify and hold harmless the Board and the Trustee, their respective officers,
employees and agents, from and against any and all losses, claims, damages, liability or expenses, of every
conceivable kind, character and nature whatsoever, including, but not limited to, losses, claims, damages, liabilities
or expenses(including reasonable fees for attorneys,accountants,consultants and other experts)(collectively referred
to hereinafter in this Section 13.08 as "Damages")as follows:
(a) For all Damages arising out of, resulting from or in any way connected with the Loan or this
Agreement,without limitation; and
(b) For all Damages arising out of, resulting from or in any way connected with the acquisition,
construction, installation and operation of the Project.
Notwithstanding the foregoing, the Borrower shall have no liability for damages solely arising out of,resulting from
or connected to the Loan or Agreement of any other Borrower.
Section 13.09. Waiver of Personal Liability.
No member,officer,agent or employee of the Board shall be individually or personally liable for the making
of the Loan or be subject to any personal liability or accountability by reason hereof; but nothing herein contained
shall relieve any such member,officer,agent or employee from the performance of any official duty provided by law
or by this Agreement.
Section 13.10. Captions.
The captions or headings in this Agreement are for convenience only and in no way define, limit or describe
the scope or intent of any provisions or sections of this Agreement.
IN WITNESS WHEREOF, the Board has executed this Agreement by its duly authorized officers
and the Borrower has caused this Agreement to be executed in its name by its duly authorized officers. All of the
above occurred as of the date first above written.
BOARD OF INVESTMENTS OF THE
STATE OF MONTANA
By Pamela Nelson
$Q Its Bond Program Officer
'7 r r , •G '
A, •
WITNESS OR ATTEST: "U' ,� , :-^ : * : CITY OF BOZEMAN
is r• __1.y� ��:�Q '\
tx
9 .:._3 •• Q.F.
By Robin Crough By Andrea Surratt
Its Gt c 141 = Its Ci1y Manager
14
DESCRIPTION OF THE PROJECT/SUMMARY OF DISBURSEMENTS
FOR
CITY OF BOZEMAN
Allocated
Amount
of Loan
Description of Project
1. City improvement projects $563,746.00
Amount Amount Amount Remaining
Draw Description Allocated Date of Remaining Reserved
# of Item for Item of Draw Draw for Item Amount
Reserved Amount $563,746.00
2810-01 #1 above $563,746.00 5/24/2019 314,558.74 249,187.26 249,187.26
DESCRIPTION OF PROJECT/SUMMARY OF DISBURSEMENTS-I
BORROWER'S DRAW CERTIFICATE NO. 1
FOR DISBURSEMENT OF FUNDS
UNDER THE LOAN AGREEMENT
The undersigned,Authorized Representative of the City of Bozeman(the"Borrower")under the
Loan Agreement, dated as of May 24, 2019 (the "Loan Agreement"), by and between the Board of Investments
of the state of Montana(the "Board"), certify pursuant to Section 4.04, as follows:
1. We have read Section 4.05 of the Loan Agreement and the subsections of Section 4.04
referred to therein and have reviewed appropriate records and documents of the Borrower relating to matters
covered by this Certificate. All capitalized terms used in this Certificate shall have the meanings given them in
the Loan Agreement unless otherwise defined herein;
2. All terms and conditions of the Loan Agreement to be complied with by the Borrower
as of the date hereof have been complied with and satisfied, and all documents described in Section 4 have been
delivered;
3. The item number, amount, and nature of each item of Project Costs, as shown on the
attached Borrower's Cash Advance Certificate,hereby requested to be reimbursed or paid to the Borrower(a)has
been paid or incurred, (b) is an eligible Project Cost, and (c) has not been previously reimbursed or paid by the
Program under the Loan Agreement;
4. To our knowledge after reasonable investigation, there has been no default by the
Borrower under the Loan Agreement,which has not been cured; and
5. All representations and warranties made by the Borrower in the Loan Agreement are
true and correct on and as of the date of this Borrower's Certificate with the same effect as if made on such date.
You are hereby requested to advance pursuant to Section 4.05 of the Loan Agreement the amount
shown on the Borrower's Cash Advance Certificate and make payment to the entitled entity to receipt thereof as
shown on said Certificate.
WITNESS my hand this 24th of May, 2019.
CITY O BOZEMAN
$OZe
,� .•� By Andrea Surratt
�:�,, .� •'�'RF Its City Manager
ATTEST: ;,..,■ �,� •,,; �`
. �IN CC•��' -
By Robin Crough
Its C (A -K (.6A;-n
BORROWER'S DRAW CERTIFICATE-I
BORROWER'S CASH ADVANCE CERTIFICATE NO. 1
1. Closing Date for Loan: May 24,2019
2. Cash Amount to be Advanced (wire): $314,558.74
3. The Term Over Which the Loan Advance is to be Amortized:
May 24, 2019 through August 15,2029(ten years)
4. Items to be Financed (serial number, model):
Serial and
Item Model Number Amount
City improvement projects $314,558.74
SPECIAL INSTRUCTIONS:
wire funds to: US Bank
ABA#092900383
For Cr To City of Bozeman
Acct.#150095736248
BORROWER'S DRAW CERTIFICATE-2
P
Loan 42810
PROMISSORY NOTE
FOR VALUE RECEIVED,the City of Bozeman,a political subdivision organized under the laws of
the state of Montana(the "Borrower"), hereby promises to pay to the order of the Board of Investments of the State
of Montana (the "Board") the principal amount of FIVE HUNDRED SIXTY THREE THOUSAND SEVEN
HUNDRED FORTY-SIX AND NO/100 DOLLARS ($563,746.00) or such lesser amount as shall actually be
advanced to the Borrower under the Loan Agreement (hereinafter defined) as evidenced by the Amortization
Schedule attached hereto and as annually revised by March 15 for every year the loan advance is outstanding,together
with interest thereon in the amount calculated as provided in the Loan Agreement,payable semiannually on February
15 and August 15 in the amounts and as provided in the Loan Agreement and as set forth hereto.
The maturity date of this loan as evidenced by this Promissory Note is August 15,2029 or sooner at
the option of the Borrower pursuant to the Loan Agreement.
This Promissory Note is issued pursuant to the Loan Agreement dated as of May 24,2019, between
the Board and the Borrower (the "Loan Agreement"), and issued in consideration of the loan made thereunder (the
"Loan") and in evidence of the obligations of the Borrower set forth in Section 5 thereof. This Promissory Note has
been assigned to the Trustee under the Indentures of the Program. Payments hereunder shall be made directly to the
Trustee for the account of the Board pursuant to such assignment. Such assignment has been made as security for
the payment of the Board of Investments'INTERCAP bonds. All of the terms,conditions and provisions of the Loan
Agreement are, by this reference hereto, incorporated herein as a part of this Promissory Note.
Interest on this Note is computed on a 365/365 simple interest basis;that is, by applying the ratio of
the interest rate over the number of days in a year,multiplied by the outstanding principal balance,multiplied by the
actual number of days the principal balance is outstanding. All interest payable under this Note is computed using
this method.
Pursuant to the Loan Agreement,advances shall be made to the Borrower under the Loan Agreement
from time to time upon the terms and conditions set forth in the Loan Agreement.
This Promissory Note is entitled to the benefits and is subject to the conditions of the Loan
Agreement. The obligations of the Borrower to make the payments required hereunder shall be absolute and
unconditional without any defense or right of setoff, counterclaim or recoupment by reason of any default by the
Board under the Loan Agreement or under any other indebtedness or liability at any time owing to the Borrower by
the Board or for any other reason.
This Promissory Note is subject to optional prepayment under the terms and conditions provided in
Article X of the Loan Agreement upon giving 30 days prior written notice to the Board.
If an "Event of Default" occurs under Section 12.01 of the Loan Agreement, the principal of this
Promissory Note may be declared due and payable in the manner and to the extent provided in Article XII of the
Loan Agreement.
IT IS HEREBY CERTIFIED,RECITED, COVENANTED AND AGREED that all acts, conditions
and things required by the Constitution and laws of the State of Montana to be done, to exist,to happen and to be
performed precedent to and in the issuance of this Note, in order to make it a valid and binding obligation of the
Borrower according to its terms, have been done, do exist, have happened and have been performed in regular and
due form, time and manner as so required; that the Borrower will, as authorized by and according to applicable
provisions and limitations of law annually levy sufficient tax receipts or collect sufficient revenues, as the case may
be,with other funds available therefor,to pay the principal and interest hereon when due;and that this Note,together
PROMISSORY NOTE -I
with all other indebtedness of the Borrower outstanding on the date of original issue hereof and on the date of its
actual issuance and delivery, does not exceed any constitutional or statutory limitation of indebtedness of the
Borrower.
IN WITNESS WHEREOF, the City of Bozeman has caused this Promissory Note to be duly
executed, attested and delivered, as of this 24th of May, 2019.
CITY OF BOZEMAN
By Andrea Surratt
Its Ci1y Manager
�0 ,
(SEAL) y �� • ,�=
ATTEST: * �. �'�.�- ^•'� .
• �
c9� -�aa3 • �.=
'�rrN co•�'
By Robin Crough
Its C ( V
Board of Investments of the State of Montana hereby assigns the foregoing Loan Agreement and
Promissory Note to U.S. Bank National Association (formerly known as First Trust Company of Montana), as
Trustee.
BOARD OF INVESTMENTS OF THE
STATE OF MONTANA
By Pamela Nelson
Its Bond Program Officer
PROMISSORY NOTE -2
MONTANA BOARD OF INVESTMENTS
ANNUAL ADJUSTABLE RATE TENDER OPTION
MUNICIPAL FINANCE CONSOLIDATION ACT BONDS
(INTERCAP REVOLVING PROGRAM)
Municipality: Bozeman Final Payment: August 15,2029
Total Commitment: $563,746.00 Total#of Payments: 20
Total Draws to Date: $0,00 Draw Number: 2810 1
This Draw Down: $314,558.74 Date of this Draw: May 24,2019
Remaining Commitment: $249,187.26 Date of Loan Agreement: May 24,2019
Project: City Property Improvements Series: 2007
Payment Interest #Days Interest Principal O/S Loan Total Amount
Due Rate Due Payment Payment Balance of Payment
"Beginning Balance" 314,558.74 *please see comments
08/15/19 3.370% 83 2,410.55 0.00 314,558.74 2,410.55
02/15/20 3.370% 184 5,343.88 13,313.69 301,245.05 18,657.57
08/15/20 182 13,609.33 287,635.72
02/15/21 184 13,784.42 273,851.30
08/15/21 181 14,081.10 259,770.20
02/15/22 184 14,244.47 245,525.73
08/15/22 181 14,554.46 230,971.27
02/15/23 184 14,733.72 216,237.55
08/15/23 181 15,043.91 201,193.64
02/15/24 184 15,239.59 185,954.04
08/15/24 182 15,541.37 170,412.68
02/15/25 184 15,770.42 154,642.25
08/15/25 181 16,073.26 138,568.99
02/15/26 184 16,303.49 122,265.50
08/15/26 181 16,614.33 105,651.17
02/15/27 184 16,862.72 88,788.45
08/15/27 181 17,173.78 71,614.67
02/15/28 184 17,440.94 54,173.73
08/15/28 182 17,749.73 36,424.00
02/15/29 184 18,040.47 18,383.53
08/15/29 181 18,383.53 0.00
314,558.74
COMMENTS:
Interest payments shown are actual payments that will be due. Interest payments shown from February 16,2019
to February 15,2020 are computed at 3.37 percent. After February 15,2020 interest rates will be adjusted to
reflect the adjusted interest rate applied on the outstanding principal balance.
IMPORTANT: If payment is made by check,please send the enclosed amortization schedule(s)with
check for proper credit. Please make sure that SpA Lockbox CM9695 is on both the check and envelope.
Please mail a copy of the amortization OR Please wire funds to:
schedule with a check made payable to:
U.S.Bank N.A.(Minneapolis)
U.S.Bank Trust-SpA Lockbox CM9695 ABA 091000022
ATTN:Operations Center FFC:U.S.Bank Trust N.A.
1200 Energy Park Drive Account# 180121167365
St.Paul,MN 55108 Wire Clearing Account#47300023
ATTN:503 64256/996103 DKO
INTERCAP: Bozeman
OPINION OF BORROWER'S COUNSEL
[TO BE TYPED ON LETTERHEAD.OF BORROWER'S COUNSEL]
TO BE DATED THE DATE OF CLOSING
(May 24, 2019)
Board of Investments
of the State of Montana
2401 Colonial Drive,3`d Floor
P. O.Box 200126
Helena,MT 59620-0126
U.S. Bank National Association
Corporate Trust Services PD-WA-T7CT
1420 Fifth Avenue, 7`'Floor
Seattle, WA 98101
Ladies and Gentlemen:
1 have served as counsel to the City of Bozeman(the"Borrower")in connection with its participation
in the INTERCAP Program (the "Program") of the Board of Investments of the State of Montana (the "Board").
Terms used herein which are defined in the Loan Agreement, dated as of May 24, 2019 (the "Loan Agreement")
between the Borrower and the Board shall have the meanings specified therein. The resolution of the Borrower
authorizing its participation in the Program and the issuance of its Loan Agreement relating thereto is herein referred
to as the Loan Agreement Resolution.
I have examined, among other things:
i) the Borrower Act;
ii) the Loan Agreement dated as of May 24,2019 and executed by the Borrower;
iii) the Promissory Note (the "Note") dated as of May 24, 2019 and executed by the
Borrower;
l�
iv) Resolution No. 5050 of the Borrower, dated P"AA 1 the "Loan Agreement
Resolution");
v) the proceedings of the Borrower with respect to the due execution and delivery by
the Borrower of the Loan Agreement and Note(the Program Documents), and such certificates and
other documents relating to the Borrower, the Program Documents and the Loan Agreement
Resolution of the Borrower, and have made such other examination of applicable Montana law and
a review of the Borrower's actions with respect to applicable ordinances and resolutions as we have
deemed necessary in giving this opinion.
ATTORNEY'S OPINION-1
Based upon the foregoing,we are of the opinion that:
(a) The Borrower is a political subdivision duly organized and validly existing
under the laws and Constitution of the State of Montana with full legal right, power and
authority to enter into, execute and perform its obligations under the Program Documents
and to carry out and effectuate the transactions contemplated thereunder.
(b) The execution of the Loan Agreement and Promissory Note have been duly
authorized and are valid, binding and enforceable against the Borrower in accordance with
its terms.
(c) The Loan Agreement Resolution of the Borrower has been duly adopted and
is valid, binding and enforceable against the Borrower in accordance with its terms.
(d) The Borrower has taken all action required to be taken by it to authorize the
execution and delivery of and the performance of the obligations contained in the Program
Documents; and such authorization is in full force and effect on the date hereof.
(e) The Borrower has complied with all applicable competitive bidding
requirements foi•the purchase, acquisition, and construction of the Project.
(f) All environmental permits necessary for the construction and continued
operation of the Project have been obtained.
(g) No consent,approval,authorization,order,filing,registration,qualification,
election or referendum, of or by any person, organization, court or governmental agency or
public body whatsoever is required to be obtained by the Borrower in connection with the
execution,delivery and performance of the Program Documents or the consummation of the
other transactions effected or contemplated thereby.
(h) The execution, delivery and performance of the Program Documents, and
compliance with the provisions thereof will not conflict with or constitute a breach of, a
violation of, or default under,the Constitution of the State of Montana, or any existing law,
charter, judgment, ordinance, administrative regulation, decree, order or resolution of or
relating to the Borrower and do not conflict with or result in a violation or breach of, or
constitute a default under,any agreement, indenture, mortgage, lease or other instrument,to
which the Borrower is a parry or by which it is bound or to which it is subject.
(i) The Program Documents executed by the Borrower, when delivered to the
Board, will have been duly authorized and executed and will constitute validly issued and
legally binding obligations of the Borrower according to their terms.
It is understood that the enforceability of the Program Documents may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement or creditors
rights.
r
Sin el
r r Attorney
ATTORNEY'S OPINION-2
CERTIFICATE OF APPROPRIATION
The undersigned Finance Director hereby certifies with respect to the Loan Agreement (the "Loan Agreement"),
dated as of May 24,2019, by and between the City of Bozeman (the 'Borrower") and the Board.of Investments(the
"Board")that:
1. The governing body of the Borrower has prepared its budget for the fiscal year 2019 and included in its
budget an amount designated and sufficient to make the Loan Repayments (as defined in the "Loan
Agreement") due in fiscal year 2019.
Dated this 24th of May, 2019.
CITY OF BOZEMAN
By Kristin Donald
Its Finance Director
CERTIFICATE OF APPROPRIATION-1
(GENERAL FUND LOAN)
RESOLUTION AUTHORIZING PARTICIPATION IN THE INTERCAP PROGRAM
CERTIFICATE OF MINUTES RELATING TO
RESOLUTION NO. 6a5•
Issuer: City of Bozeman
Kind, date,time and place of meeting: A meeting held on N� 15 t o'clock R.m. in
&Z2$A9V1 ,Montana.
Members present: Ma Chins oM�t 1s51ov�2v5 e �ySS
Tevwd l.�nv��►'�9-+ni► ,�v�d �—rla Members absent:
absent: —
RESOLUTION NO. �jOSy
RESOLUTION AUTHORIZING PARTICIPATION IN THE BOARD OF INVESTMENTS OF
THE STATE OF MONTANA ANNUAL ADJUSTABLE RATE TENDER OPTION MUNICIPAL
FINANCE CONSOLIDATION ACT BONDS (INTERCAP REVOLVING. PROGRAM),
APPROVING THE FORM AND TERMS OF THE LOAN AGREEMENT AND AUTHORIZING
THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED THERETO
I, the undersigned, being the fully qualified and acting recording officer of the public body issuing
the obligations referred to in the title of this certificate,certify that the documents attached hereto,as described above,
have been carefully compared with the original records of the public body in my legal custody, fioln which they have
been transcribed;that the documents are a correct and complete transcript ofthe minutes of a meeting ofthe governing
body at the meeting, insofar as they relate to the obligations; and that the meeting was duly held by the governing
body at the time and place and was attended throughout by the members indicated above,pursuant to call and notice
of such meeting given as required by law.
WITNESS my hand officially as such recording officer this 2??!day of ,2019.
By
Its k*!hA'r 11
y 11 •♦
ti
RESOLUTION-I