HomeMy WebLinkAboutResolution 2652 Authorizing participation in MEDB INTERCAP Commitment Agreement: 4-13-87
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COMMISSION RESOLUTION NO. 2652
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
BOZEMAN, MONTANA, RELATING TO THE MONTANA ECONOMIC
DEVELOPMENT BOARD'S INTERCAP PROGRAM; APPROVING AND
AUTHORIZING PARTICIPATION THEREIN AND APPROVING THE
COMMITMENT AGREEMENT.
BE IT RESOLVED by the City Commission of the City of Bozeman, Mon-
tana (the Participant), as follows:
Section 1. The Montana Economic Development Board (the Board) has
established an I ntermediate Term Capital Program (I NTERCAP) pursuant to
which it proposes to issue Bonds for the purpose of financing capital projects
for Montana cities and towns (Local Government Units).
Section 2. The Board has required that the Participant evidence its
intention to participate in I NTERCAP by executing and returning to the Board a
Commitment Agreement (the Agreement), the form of which has been presented
to and reviewed by the Governing Body, and a Commitment Fee as defined in
such Agreement.
Section 3. The Participant is authorized to participate and hereby
agrees to participate in I NTERCAP in the amount and subject to the terms and
conditions set forth in the Commitment Agreement. The City Manager and Di rec-
tor of Finance are hereby authorized to execute and deliver to the Board the ,
Commitment Agreement and the Commitment, with such additions and corrections .
thereto as may be approved by the Clerk of the Commission and the Partici-
pant's legal counsel.
Section 4. The Participant hereby ratifies and approves all repre-
sentations and covenants contained in the Agreement.
PASSED AND ADOPTED by the City Commission of the City of Bozeman,
Montana, this 13th day of April 1987.
~ f\.M~
J . MATHRE, Mayor
ATTEST:
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. e/k'-;)f ~ ommlsSlon
APPROVED AS TO FORM:
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MONTANA ECONOMIC DEVELOPMENT BOARD
INTERMEDIATE TERM CAPITAL PROGRAM (INTERCAP)
Exh ibit B
Form of Commitment Agreement Resolution
A RESOLUTION RELATING TO THE MONTANA ECONOI~IC DEVELOPMENT
BOARD'S INTERCAP PROGRAM; APPROVING
AND AUTHORIZING
PARTICIPATION THEREIN AND APPROVING THE COMMITMENT AGREEMENT
Be It Resolved By The Governing Body
(the Participant), as follows:
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Section 1. The Montana Economic Development Board (the
Board)
has established an Intermediate Term Capital
Program (INTERCAP)
pursuant to which it proposes to issue
Bonds for tile purpose of
financing capital projects For Montana
c it i es and towns (Local
Government Units).
Section 2. The Board has required that the Participant evidence
its intention to participate in INTERCAP by executing and returning to
the Board a Commitment Agreement (the Agreement), the forrn of wh i eh
has been presented to and r{~viewed by the
Governing Body. and a
Commitment Fee as defined in such Agreement.
Section 3. The Part i c i pant is authorized
to participate and
hereby agrees to participate in INTERCAP in the amount and subject to
the terms and cond i t ions set forth in the COlan i tment Agreement. Thf~
anc!
are
hereby
authorized to execute and deliver to the Board the COIT1T1itment Agreement
and the Commitment, with such additions and corrections thereto as may
be approved by the .,
- and the Participant's
legal counsel.
Section 4. The Participant hereby
ratifies and approves all
representations and covendnts contained in the Agreement.
Passed and adopted by the
of
.
Montana this day or
. 19a .
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COMMITMENT AGREEMENT
Intermediate Term Capital Program (INTERCAP)
between
MONTANA ECONOMIC DEVELOPMENT BOARD
(herein referred to as the Board)
and
(herein "referred to -as the Participant)
line A: Cost of Project $
li ne B: Costs of Issuance
line C: Total CooII,i tted Amount $
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lim! D: less Deposit of Cormritment Fee ( )
line E: Principal ^nount of Installment $
Purchase Contract ----------------
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MONTANA ECONOMIC DEVELOPMENT BOARD
INTERMEDIATE TERM CAPITAL PROGRAM (INTERCAP)
Commitment Agreement
The Commitment Agreement (the Agreement), is between the Board and
the Part i c i pant. The Board and the Part ic ipant hereby agree as
follows:
Section 1. Definitions, Recitals and Other Provisions of General
Applications.
Section 1.1. Definitions. The terms defined in this Section 1.1
shall have the meanings herein specified, unless the context clearly
otherwise requires:
Act shall mean Title 17, Chapter 5, Part 16, M.C.A., as arnend(~d.
Adjusted Interest Rate shall mean the int(~rest rate on the
Installment Purchase Contract determined and estahl ished pursuant to
Section 5.3 hereof and the Installment purchase Contract.
A~reement shall mean th i s Commitment Agreemen t as the same may
from t,me to time be amended or supplemented.
Board shall mean the Montana Economic Develor,ment Board and any
successor to its functions hereunder.
Board of Investments shall mean the Montana Board of Investments
and every successor to its functions.
Bonds shall mean the Bonds or Notes to be issued by the Board
pursuant to the Indenture to finance the Program.
Code shall mean the Internal Revenue Code of 1986, as amended.
Commit ted Amount shall mean the tota 1 doll ar amount shown on ttle
cover hereof.
Corrunitrnent Fee sha 11 mean a fee equal to the fee owed the Board.
Costs of Issuance shall mean all items of expense directly or
indirectly payable by or reimbursable to the Board and related to the
authorization, sale and issuance of the Bonds, including but not
limited to the Issuer's fees, costs of preparation and reproduction of
documents, initial fees and charges of the Trustee, underwriters
discount, legal fees and charges, fees and disbursements of consultants
and professionals, fees and charges for preparation and execution of
the Bonds, and any other cost, charge or fee in connection with the
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original issuance of the Bonds.
Governing Body shall mean, with respect to a County, the Board of
County Commissioners, and with respect to a City, the City Councilor
Commission.
Indenture shall mean the Indenture of Trust between the Board and
the Trustee pursuant to which the Bonds
are to be issued and
all
supplements thereto.
Initial Interest Rate shall mean
the rate on the Installment
purchase Contract from the date of the Installment purchase Contract to
March 1, 1988, not to exceed 5.75%.
Installment Purchase Contract shall mean the Installment Purchase
Contract entered lnto by the Local
Government Unit and the Board
pursuant to the Installment Contract Act
and Installment Contract
Resolution.
Installment Contract Act sha 11 mean
with respect to a city or
town, Sectlon 7-5-4306, M.C.A. and with respect to a county, Section
7-5-2306 and 7-5-2307, M.C.A.
Insta 11ment Resol ut ion shall mean the resolution duly enacted by
the governing body of the Participant pursuant to which the Installment
Purchase Contract is authorized.
Interest Adjustment Date shall mean March 1, 1988 and each Harch 1
thereafter.
Local Government Unit shall mean a Montana city, town or county.
Participant shall mean the Local
Government Unit named on the
cover of this Agreement.
Program shall mean the Intermeejiate Term Capital Program
(INTERCAP) of the Board pursuant to which the Board will issue and sell
the Bonds and use the proceeds thereof to finance the acquis it ion of
Projects pursuan t to Installment Purchase
Contracts executed by
participating Local Government Un its pursuant
to the Installment
Contract Act.
Project shall mean the items to be financed or refinanced by the
Local Government pursuant to the Program and set forth on the Project
Data Sheet hereto.
Project Contract shall mean the contrac t with a vendor for
the
purchase or installation of the Project.
Project Data Sheet shall mean
the document attached hereto as
Exhiblt A WhlCh contalns the list of
the items to be financed
or
refinanced, the estimated cost of each item and the term over which the
financing is to be amortized.
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Trustee shall mean the bank or
trust company from time to time
act ing as trustee under the Indenture and its successors and ass igns
thereunder.
Section 1.2. References and Construction. All references in this
instrument to designated "Sections" and other subdivisions are to the
des ignated Sections and other subdivisions
of this instrument as
originally executed. The words, "herein", "hereof",
and "hereunder",
and other words of s imi 1 ar import refer to this Agreement as a whole
and not to any particular Section
or other subdivision unless the
context clearly indicates otherwise. This Agreement shall be construed
in accordance with the laws of the State of Montana.
Section 1.3. Exhibits. The following Exhibits are attached to
and by reference made a part of this Agreement.
Exhibit A: The Project Data Sheet.
Exhibit B: A form of resolution authorizing execution and
delivery of thls Agreement by the Participant (the Commitment Agreement
Resolution) .
Section 2. Representations by Board. The Board makes the
following representations as the basis for its covenants herein:
Section 2.1. The Board is authorized by the Act to issue and sell
its Bonds and apply the proceeds thereof to finance loans or refinance
loans to Local Government Units and to purchase bonds or notes issued
by Local Government Units. Pursuant to this authorization the Board
has created and imp 1 emente(j the Program and
has authorized pursuant
thereto the issuance of Bonds for the purpose of financing Projects by
Local Government Units pursuant to the Installment Contract Act.
Section 2.2. The Board has
receive(j an application from
the
Participant to participate in the Program for the purpose of obtaining
financ ing for the items shown on Exhibit J\ hereto in the amount shown
on the cover of this Agreement.
Section 2.3. The Board has
proposed to issue and sell
its
Municipal Finance Consol idation Act Intermediate Term Capital
Program
Bonds (th e Bonds) in an amount
sufficient to finance the
capital
equipment needs of Montana local governments over a three year period
beginning on the date of the sale
of the Board's bonds and
ending
February 15, 1990.
Section 3. Representations by the Participant. The Participant
makes the following representations as the
basis for its covenants
herein:
Section 3.1. The Participant is a duly
organized and existing
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Local Government Unit in the State of Montana, has power to enter into
this Agreement, and by proper action of its Governing Body has
authorized the execution and delivery of this Agreement.
Section 3.2. The purchase, acquisition or construction of the
items set forth in Exhibit A hereto has been authorized by the
Governing Body of the Participant.
Section 3.3. The execution of an Installment Purchase Contract in
the amount shown on the line E on the cover hereof will not cause the
Participant to exceed its statutory debt limitation.
Section 3.4. The execution of this Agreement has been duly
authorized by the Governing Body of the Participant, as evidenced by a
certified copy of a resolution in substantially the form of Exhibit B
hereto.
Section 4. Covenants of the Participant and the Board.
Section 4.1. Participant's Agreement to Enter Into Project
Contract. The Participant agrees to enter into a Project Contract with
a vendor providing for the delivery, construction and/or installation
of the Project and to comply with all pertinent provisions of Title 7,
Chapter 5, Parts 23 and 43. M.C.A., respectively, in the acquisition of
such Project, to the extent required by law.
Section 4.2. Participant's Agreement to Enter Into Installment
Purchase Contract With Board. The Participant agrees to enter into an
Insta Ilment Purchase Contract with the Board no later than August 15,
1987 for financing the Project in an amount equal to the amount shown
on 1 i ne E on the cover hereof, or such other amount as herein be
provided.
Section 4.3. Covenants Under the Installment Purchase Contract.
Pursuant to the Installment Purchase Contract, the Participant will
agree to:
a. Pay to the Board from any source available therefor in
semi-annual installments, over a period not to exceed five years,
the total principal amount of the Installment Purchase Contract,
with interest thereon at a rate equal to the interest rate on the
Bonds, as such rate as may be adjusted from time to time, plus up
to 1.5% per annum which represents the amount necessary to pay the
costs of administering the Program.
b. Grant a security interest in the Project to the Board to
the extent allowed by law.
c. Pro v ide to the Board, no later than August 15 of each
year of the term of the Installment Purchase Contract, evidence
that the Governing Body has budgeted and appropriated for the then
current fiscal year an amount sufficient to provide for the
payment of that fiscal year's installments as they come due.
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Section 4.4. Participant's Responsibility for Costs of Issuance.
a. The Participant is responsible for paying its
proportionate share of the Costs of Issuance, which share shall
not exceed 2.5% of the Project Amount. The Participant's share of
the Costs of Issuance shall be paid by a Comnitment Fee based on
1% of the project amount payable with the submission of this
Agreement and by capitalization of the remaining 1.5% in the
principal amount of the Installment Purchase Contract.
b. In the event that the Participant does not enter into an
Installment purchase Contract with the Board by August 15, 1987,
or if the amount of the Installment Purchase Contract entered into
is less than the amount shown on line E on the cover hereof, the
Participant shall neverthl~less be obl igated to pay to the Board
the full amount of Costs of Issuance as shown on 1 ine B on the
cover of th'is Agreement, less the amount of Commitment Fee
previously paid by the Participant.
c. If the Participant has failed to enter into an
Insta llment Purchase Contract with the Board or has entered into
an Installment Purchase Contract in an amount less than the amount
shown on line E of the cover hereof and subsequent to August 15,
1987, enters into an Installment Purchase Contract with the Board
or borrows the full amount shown on line E on the cover hereof,
the costs of issuance paid pursuant to Section 4.4.a and 4.4.b
shall be applied toward Participant's proportionate share of Costs
of Issuance on that or any subsequent Installment Purchase
Contract. I f no Installment Purchase Contract has b(~en entered
into by August 15, 1987, the Participant shall pay to the MEDB the
remainder of its share of the Costs of Issuance (l.5% of 1 ine A on
the cover hereof).
Section 4.5. Board's Covenant to Issue Bonds and purchase
Installment Purchase Contracts. Based on representations and
warranties c(mtdTned herein, the Board agrees to use its best efforts
to issue and ,:>(~ll the Bonds and, solely from the proceeds thereof,
finance the purchase of the Project over a period not to exceed five
years pursur1llt to an Installment Purchase Contract. If the Bonds are
not sold by April 1, 1987, the Board will return the Commibnent Fee, as
hereinafter described.
Section 5. Installment Purchase Contract.
Section 5.1. Amount of Installment Purchase Contract.
a. The amount of the Installment Purchase Contract shall be
the doll ar amount as set forth on 1 i ne E on the cover hereof,
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except as provided in Section 5.1(b) hereof.
b. Between the date of execution of this Agreement and the
date of execution of
the Installment purchase Contract,
the
Participant may request the
Board to modify the Project
to be
financed so as to increase or decrease the scope and costs of the
Project or to substitute elements of the Project by:
1. Delivering
to the Board a revised Exh ib it
A and
Cover Page to the
Agreement which reflects
the requested
changes;
2. Delivering
a certificate of the chairman
or
presiding officer of the
Governing Body that such changes
have been du 1 y author i zed and approved. Provided, however,
that a reduction in the amount of the Project to be financed
shall not reduce the obl igation to pay Costs of Issuance as
set forth in Section 4.4 hereof.
c. Any changes in the scope or amount of the Project to be
financed are subject to the Board's approval.
Section 5.2. Execution of Installment
Purchase Contract .
The
Board wi 11 execute the Installment
Purchase Contract and fund
the
Project subject to the following terms and conditions:
a. The Ins tall men t purchase
Contract wi 11 be in a
form
provided by the Board;
b. At the time of funding, the Participant will deliver to
the Board: ( i ) a certified
copy of a resolution,
in a form
acceptable to the Board,
of the Govern i ng Body authoriz'ing the
execution by the Participant of the Installment Purchase Contract,
( i i ) an opinion of
counsel to the Participant,
in a form
acceptable to the Board,
to the effect that the Ins tall men t
purchase Contract has been duly authorized,
(iii) other closing
documents deemed appropriate by the Board.
Section 5.3. Amortization
of Installment Purchase Con tr act;
Calculation of Interest Rate.
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a. At the time of
execution of the Installment purchase
Contract, the principal amount
of the Installment Purchase
Contract will be fully amortized over a period not to exceed five
(5 ) years, as designated by
the Participant, at the
Initial
Interest Rate and approved by the
Board. The Initial
Interest
Rate shall not exceed 5.75%. The Board wi 11
prov i de a comp 1 ete
schedule of payments.
b. On each Interest Adjustment Date the Board shall notify
the Participant of the Adjusted Interest Rate and shall calculate
and provide to the Part ic ipant the schedul e of payments for the
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remainder of the term of the Installment Purchase Contract at the
Adjusted Interest Rate.
c. The i nsta llment payments shall be due on August 15 and
February 15 of each year.
d. The Participant shall have
the right to prepay the
principal amount of the Installment
Purchase Contract plus
i nteres t accrued thereon on February 15 with due notice to the
Board.
section 6. Convnitment Fee and Submiss ion of Commitment Agreement.
Section 6.1. Comm itmen t Fee and Commitment Agreement. The
Participant shall submit to the Montana Economic Development Board no
later than January 15, 1987 a fully executed copy of this Agreement,
together wi th a fully exec uted copy of the
Commitment Agreement
Resolution and a Commitment Fee equal to
one percent (1%) of the
project amount as shown on line A on the cover hereof.
Section 6.2. Refund of Commitment Fee. If the Board is unable to
sell its bonds by April 15, 1987, the Comnitment Fee will be refunded
in full with interest thereon at the rate the Board is able to obtain
on the investment of such fee.
MONTANA
ECONOMIC bEVELOPMENT BOARD
By
Its
Date
of Execution
PARTI
C I PJ\NT
By
Its
Date
of Execution
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