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HomeMy WebLinkAboutResolution 4385 Authorizing Participation in the Intercap Program (GENERAL FUND LOAN) RESOLUTION AUTHORIZING PARTICIPATION IN THE INTERCAP PROGRAM CERTIFICATE OF MINUTES RELATING TO RESOLUTION NO. Issuer: City of Bozeman Rind, date, time and place of meeting: A meeting held on at o'clock ,in. in Yl , Montana. LOU Members present: �, c %",' ... l � ,� Members absent:( RESOLUTION NO. 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 1, the undersigned, being, the frilly 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, from which they have been transcribed; that the documents are a correct and complete transcript of the minutes of meeting of the 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 thise day of 2012_ By Its ,, RES01,UTION- I RESOLUTION NO. RESOLUTION AUTHORIZING PARTICIPATION IN THE BOARD OF INVESTMENTS OF THE STATE OF MONTANA ANNUAL ADJUSTABLE RATE "FENDER 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 BE IT RESOLVED BY THEIIS,S,( (the Governing Body) OF THE CITY OF BOZEAN(the Borrower)AS FOLLOWS: ARTICLE I DETERMINATIONS AND DEFINITIONS Section 1.01. Definitions. The following terins 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. Adiusted 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 Linder the laws of the State and its successors and assigns. Board Act shall mean Section 2-15-1808, Title 17, Chapter 5, Part lf, 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 certain 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. I..,oan Rate means the rate of interest on the Loan which is initially 1.25% per annum through February 15, 2013 and thereafter a rate equal to the Adjusted Interest Rate on the Bonds and Lip to 1.5% per annum as necessary to pay Program Expenses. RESOLUTION-2 Note means the promissory note to be executed by the Borrower ptursuatit 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 IN"I'ERCAP 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_ 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 authorized 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 Deliveu y of Nate. 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$1,700,000.00 and upon the further terms and conditions set forth herein, and as set forth in the Term Sheet and the Loan Agreement. ARTICLE 11 THE LOAN AGREEMENT Section 2.01. Terms. (a) The Loan Agreement shall be dated as of the Loan Date, in the principal amount of $1,700,000.00 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 1.25% per annum through February 15, 2013 and thereafter at the Adjusted Interest Rate, plus up to 1.5% 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 the respective amounts of principal and interest payable by each Borrower on and with respect to its Loan Agreement and Nate for the subsequent August 15 and February 15 payments, and prepare and mail by first class mail a statement therefor to the Borrower. RESOLUTION-3 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/Suminary 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 satisfactory to the Borrower's Counsel and the Board's Bond Counsel and such other certificates, 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. Pavmcnt 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 Pro e Lfax 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 Property Tax Limitation Act), The Borrower is familiar with the Property 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 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. ARTICLE 11I 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. RFsOLU ION-4 PASSEL) AND APPROVED by the � ? �`� � � 'this day of .�� .., 2012. By Its Attest: . By Its RESOLUTION-_w Loan 42431 LOAN AGREEMENT between BOARD OF INVESTMENTS OF THE STATE OF MONTANA and CITY OF BOZEMAN as Borrower DATE OF AGREEMENT: July 6, 2012 LOAN AMOUNT: ONE MILLON SEVEN HUNDRED THOUSAND AND 00/100 DOLLARS {$1,700,000.00} ADDRESS OF BORROWER: City of Bozeman PO Box 1230 Bozeman,MT 59771 CONTACT PERSON OF BORROWER: NAME Anna Rosenberry TITLE Finance Director TELEPHONE (406) 582-2325 FACSIMILE (406)582-2344 E-MAIL arosenberr abozeman.net ALTERNATE CONTACT PERSON NAME Stacy Ulmen TITLE City Clerk TELEPHONE (406)582-2321 FACSIMILE (406) 582-2344 E-MAIL sulmen bozeman,net STATUTORY AUTHORITY FOR BORROWING: 7-7-4101, 7-7-4104 and 7-12-44, MCA TABLE OFCONTENTS ARTICLE I. DEFINITIONS AND RULES ()F INTERPRETATION. ___ ............... ...... __________.2 SECTION l.OI. DEFINITIONS................ ......................---...— .... ............................... -----_------_----_�2 SECTION 1.02. RULES OF —.................................... — ............. .......................... ------'_--_—'5 SECTION I<8. ATTACuMcmTs— ... ........ -- ................. ....... .......... ......... ...... --------_------------5 ARTICLE 11. REPRESENTATIONS,COVENANTS AND WARRANTIES OF BCU0R{}WEB— ......................5 SscTmm2.01. REPRESENTATIONS AND WAnn/wwrIEs. —................................ ............... _________________..5 SECTION 2D2. PARTICULAR COVENANTS or BORROWER,............. ......................---.............. 7 ARTICLE 111. LOAN TO --------— ARTICLE IV. LOAN PR(}VISl(JNS._ ... — ............ ....................................... 7 SEcTo]m4.01. COMMENCEMENT op LOAN AooasMEwz—............. ......._ .............._ ......... ________________7 SECTION 4.&2. TERMINATION wp AGREEMENT. .......................... ..... — ............... ---------_—_---_--_—..7 SECTION 4i0}. TERM 0*LOAN AGREEMENT.— ............................— ... ...... — ............ -------_---_------..7 SECTION 4.04. LOAN CLOSING SUBMISSIONS........ —_—.........—........ ----------------_---_—_----'8 SECTION 4.05. INITIAL AND SUBSEQUENT DRAWS Or LOAN..................... ........._ ......................... ........... ........... �8 ARTICLE V. LOAN REPAYMENTS AND N(]TE.: ......................................... 8 SECTION 5.01. P^rmENrop LOAN REPAYMENTS.......................... _................. _...... ...... Q SECTION 5.02. DELINQUENT LOAN PAYMENTS............................ ............... _... .... .... ....... ...... —_—_---------_9 SECTION 5.8J. THE NOTE. _— ..............----........ ........................... ....................... 9 ARTICLEV]. TERM............................................. .......................... ................---------_--------A ARTICLE VII. OBLIGATIONS OF BORROWER UNCONDITIONAL__- SECTION 7.01. OBLIGATIONS OF,BORROWER. ........... ....---......... .... ............ 0 ARTICLE VIII, FINANCIAL . ...............— ...... ...............— .............. ...... l0 SFCTow8.01. REPRESENTATION REGARDING THE PROPERTY TAX LIMITATION AcT — ...... ..................... ......---........—lV SECTION 8.02. LEVY AND APPROPRIATE FUNDS rVREPAY LoxN ... ............ ...... ...—.... ......... .......... .......... .............l0 SECTION 8.03. REPORTS AND OPINION;INSPECTIONS. ........................— ...................... .............. ....... ...... ........................lV /\8T7[LE IX. DISCLAIMER OF WARRANTIES.......................... .............................. _—_--------� IU ARTICLE X. OPTION 7O PREPAY LOAN....... ........ .......................................... ...... — .......... --....... ... l0 ARTICLE XI. /\ _--_-------------------------------------- Il SECTION ll.0l. ASSIGNMENT oY BOARD nm TRUSTEE,.......... —.......... .......... ... .......... .........._--_---___----l} SECTION 11.02. ASSIGNMENT orBODRnWEm_ ...... ........ _..... .......... _ ................ .... _........... _11 ARTICLE XI . EVENTS [OF DEFAULT AND REMEDIES, ...... ......................................................... ---. l| SECTION lZ0l. EVENTS o*DEFAULT DEPNso.— ... ..... ..... ..............---......... ............ --------__-----]l SECTION 12.02. NOTICE 0FDEFAULT...................... .......................................... ................ .... ........ ...... ......_---......-l2 SECTION 12.03. REMEDIES ow DEFAULT..................... ......... .......... ....... .......... ...... .................. ........ ......... ......._---]2 SECTION 12.04, ATTORNEYS FEES AND OTHER ExPEmoso................ ......... ...... .................. ....._..... .................---__J2 SECTION 12,05. APPLICATION npM0wsYS.--.................. .............---......... _-- .............. ....... ........---...—..... ........12 /\RTlCLE)UIl. MISCELLANEOUS........... _—....... ..................... ..... .......................— ...... ....... ............ ... %3 SECTIONG.0i NOTICES. .................... —_-- ............................_.......... .......-- ........... ............----...... .............. —12 SECTION \3.02. BzNoavoEFpscr_--........ -----...... ........ ........__-------........... —........................... ....... ....13 SECTION GlG. 3FvsuxBILoY............... —........... .................. ............ -- ........ .....—_— ......... --.................._— ....13 SECTION G�04 AMENDMENTS,CHANGES AND MopIFICxnom3— ................ — ...... — ...... —_-- ---................ _....l3 SECTION 13-05 EXECUTION� uxn COUNTERPARTS. — .......---......... .................... .......... ................. ...— ............... .........I3 SECTION 13.06. ApPLxC^BLF-AcT ----..._............_--_----- ....... ....----— .................. ............. ............... ..l3 SECTION l3]D. CONSENTS AND A"pnuvacS_ ....... ........ ................................ ......... ........._—.......... ................ ---l3 SECTIONl310. INDEMNITY.......— ...... —.............. — ......---...... .................... ........ ......................— ................----�l4 SECTION l9.09. WAIVER mrPERSONAL LIABILITY. .........— ........ .......... ....... --........... ......... ---........ ......--_ ...l4 SECTIONlS]0. CAPTIONS......... --....... ...... .........--_ ....... ........ .......... — .......... ............... —_ ........ ...... _— ...l4 x This Loan Agreement (the "Agreement") dated as of the date set forth on the cover hereof, 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 the Borrower whose name is set forth on the cover hereof ("the Borrower"), a political subdivision 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 snaking 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 set forth on the Description of the Project/Summary of Disbursements attached hereto and the cover hereof, 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 Bate" 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 tine 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 the Eligible Government Unit which is set forth on the cover of this Agreement and 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 the section of Montana Code Annotated indicated on the cover hereto, 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 the date of the Agreement as set forth on the cover hereof 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 I 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, buolmd' the attachments hereto, if any, as originally executed or as they may frono time to time be supplemented, modified or unnoodcd in euuorduocc with the terms hereof and ofthe Indenture. "Loan lDate" means the date mf closing uLoan. "Loan Rate" maeumn the o4s of interest on the Lmoo as provided for in Section 5.01 of this /\gzeooeut. "Loan Date" nnemmm February 15th and August 15tb or, if any such day is not o Business Day,the next Business Day thereafter, during the term mfthe Loan. "Loan " naeauy the payments payable by the Borrower pursuant to Article V of this Agreement. "Loan Term" means the ten-n provided for in Article VI of this Agreement. "Maxinnurn Interest Rate" means the maximurn rate of interest on the Bonds which shall not exceed fifteen percent([596)per annum. ,7Note" noeoon the promissory note executed and delivered by the Borrower attached hereto and made u part hereof. "Program" noeaom the Board's D4TERCAP Program established under the Act and pnxouuot to which the Board finances Projects fo Eligible Government Units. "Program Expenses" ozeuno the expenses of the Program, including (vvhhmoT limitation) the fees and expooeua of the Trustee and such other fees and expenses of the Program or uf the Board relating thereto as shall be approved bv the Board. "Projec " means those items wfequipment, peruouu\ or real property improvements to be acquired, installed, fioaooud or refinanced under the Program and set forth in the Description of the Project/Summary of Disbursements attached hereto. "Project Costs" nbeU\ roowo the portion of the costs of the Total Project to be fiuuucod by the DNTERCAPI.oau. The Project Costs may not exceed the Loan Amount am set forth oo the cover hereof. "Series Trust" coeooy oSuppleruertul Indenture of Trust authorizing the issuance of an additional series of bonds in accordance with the provisions of the Indenture. ,'Stale'' means the state ofMontana. "Subsequent Date" means February i6imthe years the Loan remains outstanding. "Term Sheet" shall mean the document containing the terms and conditions issued bv the Board to the Borrower that must hema1imfied prior toentering into u Loan Agreement. "Term Date" means the date the Board czecnnoo its Term Sheet under the Board's Program. " " mbn}l oocxm the project as described in Section 14 of the Term Sheet and/or Section 2 of the application, of which some or all iu1mhcfinanced by the 7NTETlCAP Loan. 4 "Total Protect 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. "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 11. 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: 5 (1) is a political subdivision of the State of Montana; and (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) Pull 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 arnount 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). (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 Le al 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 and shall file with the Board financial reports and audits when such reports and audits.are required to be filed by the Department of Commerce. (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) Expense The Borrower will, at the request of the Board, pay all expenses relating to the Loan,the Note, and the Security Instrument and this Agreement, including but not limited to. ARTICLE 111. 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 the Loan Amount as set forth on the cover hereof. 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. 7 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): (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 ifs, 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 8 (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; (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 1/2% 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 or wire transfer 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 maxii-num 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 RegardLing the Property Tax I imitation 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. Lew and Appropriate Funds to RepMLoan. 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 'Fax 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 Vill hereof. (b) The Borrower agrees to pen-nit 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 its 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 rearnortized by ratably reducing the principal portion of each remaining Loan Repayment. 14 ARTICLE XI. ASSIGNMENT. Section 11.0 1. 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 12.011. 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 telegraphic 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 12.0)1(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 Trustees 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 tirne 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 12 Article X11, it shall not be necessary to give any notice, other than such notice as may be required in this Article x1l. ARTICLE X111. 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 par-ties at the following addresses. (1) Board: Montana Board of Investments Attu; 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, 7th 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, Binding Effect. 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. Severabilij2L In j 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, 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 1.3.08 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 i By Louise Welsh Its Bond Pro ram Officer WITNESS Oiz ,' , CITY OF BOZEAN By °" .' By Chris Kukulski Its Citr " Its City Mana er - 14 CERTIFICATE OF APPROPRIATION The undersigned Finance Director hereby certifies with respect to thc �an Agreement (the "Loan "), dated as of July 6, 2012, by and between the City of Bozeman (the "Borrower") and the Board of Investments (the "Board")that: l. The governing body o[the Borrower will prepare its budget for the fiscal year 20l3 and include imits bndQotuoar0000t designated and sufficient hn make the Loan Repayments(as dofin*din the"Loan Agreement") due iu fiscal year 2Ql3. Dated this 6th day mf July,ZO\2. CITY OF BUZEMA0 B/ Its Finance Director Loan #12431 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 ONE MILLON SEVEN HUNDRED THOUSAND AND 00/100 DOLLARS (S 1,700,000,00) 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 aannount 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, 2022 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 July 6, 2012, 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. 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 1.2.01 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 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. PROMISSORY NOT - 1 IN WITNESS WHEREOF, the City of Bozeman has caused this Promissory Note to be duly executed, attested and delivered, as of this 6th day of July, 2012. CITY OF BOZEMAN F By Chris Kukulski Its City Manager (SEAL) ATTEST: 1 a By Stacy Ulm Its Cijy Clerk "4$ ` TIN CO 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 Louise Welsh 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: City of Bozeman Final Payment: August 15,2022 Total Commitment: $1,700,000.00 Total#of Payments: 20 Total Draws to Date: 50.00 Draw Number: 2431 1 This Draw Down: $92,917.65 Date of this Draw: July 6,2012 Remaining Commitment: $1,607,082.35 Date of Loan Agreement July 6,2012 Project: South 8th Avenue Street Reconstruction Series: 2000 Payment Interest #Days Interest Principal O/S Loan 'Total Amount Due Rate Due Payment Payment Balance of Payment "Beginning Balance** 92,917.65 *please see comments 02/15/13 1.250% 224 710.84 4,499,81 88,417.84 5,210.65 08/15/13 181 4,408.71 84,009,13 02/15/14 184 4,427.41 79,58132 08/15/14 181 4,463.48 75,118.23 02/15/15 184 4,483.43 70,634.80 08/15/15 181 4,518.94 66,115.85 02/15/16 184 4,540.16 61,575.69 08/15/16 182 4,574.04 57,00L65 02/15/17 184 4,598.58 52,403.08 08/15/17 181 4,63'1.96 47,771.12 02115/18 184 4,655.76 43,115.37 08/15/18 181 4,689.53 38,425.84 02/15/19 184 4,714.65 33,711.19 08/15/19 181 4,747.82 28,96337 02/15/20 184 4,774.27 24,189.10 08/15/20 182 4,806.43 19,382,67 02/15/21 184 4,834.98 1 4,547.69 08/15/21 181 4,866.61 9,681.09 02/15/22 184 4,895.78 4,785.31 08/15/22 181 4,785.31 0.00 92,917.65 COMMENTS: Interest payments shown from February 16,2012 to February 15,2013 are computed at 1.25 percent. After February 15,2013 interest rates will be atjusted 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 Spit Lvckbox CM'9695 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 4 180121 167365 St. Paul,MN 55108 'Wire Clearing Account 4 47300023 ATTN:503 64256/996103DKO INTERCAP: City of Bozeman 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 July 6, 2012 (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. I. 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 Cast, 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 6th day of July, 2012. CITY OF BOZEMAN C"A :4 ' By Chris Kukulski $[} y a. Its City Manager ATTEST: y Its BORROWFR'S DRAW'C'ERTIFIC'A7"E_ I BORROWER'S CASH ADVANCE CERTIFICATE NQ. 1 1. Closing Date for Loan: July 6,2012 2. Cash Amount to be Advanced(wire): $92,917.65 1 The Term Over Which the Loan Advance is to be Amortized: July 6,2012 through August 15, 2022. (10 years) 4. Items to be Financed (serial number, model): Serial and Item Model Number Amount South 8th Avenue Street Reconstruction $ 92,317.65 SPECIAL.INSTRUCTIONS: - wire funds to: US Bank ABA# 0929003 83 For Cr To City of Bozeman Acct. #15009573624$ BORROWER'S DRAW CERTIFICATE-2 ~30 `,. THE CITY OF BOZEMAN 20 E OLIVE - P O. BOX 1230 ti(72EM.AN_ MONTANA 543771-12.30 v X41 *! t � fI ENGINEERING DEPARTMENT Cl�s'I Pt-IONE-. i4061 582-2280 FAX. l406Y 552-2263 �'��'� CC7 �`c• NIf:MOB,A Nl9UM J me mil, 20 12 To: Jerma Louttit, Claims From: Bob Murray,. Project Engineer Opi Re. Claim for ConstrgCtiOLI Ser•viCCS Soutta 818 Ave. Harrison to Main Reconstruction Project Attached is the approved Claim and back-up for construction services performed by Knife River Belgrade. on South 8"' Ave. Harrison to Maain Reconstruction project. Also attached is the approved claim aril back-up for the State Department of Revmue 1% Gross Receipts Tax. The amc u«t of the chinas is as follows: 91,988.47 (Knife River) 929.18 (Dept. of Revenge) please torward the Gross Rcceit,)ts cont nict ikward and the Gross Receipts'Withholding Report alone; with the payment to the State Department of'Revenue. It'] caia be of further assistance, please feel free to contract me. K i A M 6•� r cc: Project file: 1�atclotitu'c: HOME OF MONTANA STATE UNIVERSITY GATEWAY TO YELLOWSTONE PARK /0/ �� w~ / ��> CITY OF BOZEK0AN ACCOUNTS PAYABLE CHECK#_______ PD Box 123U Bnzeman. NlT 59771'1230 (406) 582-2334 PAYTO� Knife River TOTAL P.O. Box 9 Belgrade, MT 59714-0009 DATE INVOICE Fund/[}ept-Div//\ot/E|m-Obj DESCRIPTION AMOUNT 05/24/2012 South 8" Avenue Harrison St. to Main St. Reconstruction Project Pay Estimate No, I $ 91,988,47 �olo 6010 70 a Total 91,988,A7 CERTIFICATION THAT GOODS OR SERVICES HAVE BEEN RECEIVED: DEPARTMENT HEAD OR DESIGNEE APPROVAL: FINANCE DEPARTMENT REVIEW: _______ /.the u"ce,s^sneu.mu solemnly swear,that|"nn ' OFFICIAL TITLE COMPANY OR CORPORATION /ama utwe and lawful uuhnagainst the cuvo,Bozeman and umnovwopaN Sign here pxo^o� (206)388-4035 SS#or Tax|o# auaiaaunuocmycw _12-0005562� THE CITY OF BOZEMAN MUST HAVE YOUR SS#OR TAX ID#AND BUSINESS LICENSE NUMBER BEFORE THIS CLAIM WILL BEPROCESSED. CLEAR FORM MONTANA CGR-2 ENLIE 1% Contractor's Gross Receipts Rev 01-10 Gross Receipts Withholding Return Form CGR-2 is required to be completed and mailed to the Department of Revenue within 30 days after each payment is made to the prime contractor or subcontractor. I Contract awarded by: Enter the federal employer identification number, business name and address. Place an "X" in the"Government Entity" box if you are remitting the 1% contractor's gross receipts payment on behalf of a prime contractor Place an"X" in the*Prime Contractor" box if you are allocating the 1% contractor's gross receipts from your prime col"llractor's account to your subcontractor's account. --..------Government Entity RI Prin,ie ContractortD. Federal Identification Number(FEIN) 81-6001238 Name City of Bozeman Address P.0. Box 1230 .......... -------------17-- TZlp Code 59771 City Bozeman State MT 2, contract awarded to: Enter the federal employer identification number, business name and address Place an'X` in the"Prime Contractor" box if YOU are remitting the I% contractor's gross receipts on behalf of a prime contractor. Place an'X" in the"Subcontractor" box if you are allocating the 1% contractor's gross receipts from your prime contractor's account to your subcontractor's account. Prime Contractor ✓ Subcontractor Federal identification Number(FEIN) 81-0465363 Name Knife River- Belgrade Address P.O. Box 9 ... City Belgrade . State MT Zip Co de 59714 3 Enter the Government issued Purchase Order Number here ... ............-......—.3. .............. .......-.4. 04 1 16 /2012 4. Enter the contract award date here. ................ ....... ......... — 120- — 5 Enter the month and year this payment was earned. ........... ...............-5, 05 12 6 Enter the gross dollar amount due to the prime contractor or subcontractor here..,.....6. $ 92,9,17.65 7. Multiply the amount on line 6 by 1% (.01) and enter the result here.This is your 10/6 Contractor's Gross Receipts.... ....__............ .. .. .. ................ ..............7 $ 929,18 8 Subtract line 7 from line 6 and enter the result here.This is the net amount paid to the prime contractor or subcontractor......... ........................8. $ 91,988.47 __E1_1eckLJ1e box below that identifies the type of return you are filing and enter the date 9, the payment was made to the prime contractor or subcontractor.... ......... ....__........._9 9(a)Z I am enclosing the amount reported on line 7 for credit to my prime contractor's account 9(b)[]I am allocating the amount reported on line 7 for credit to my subcontractor's account. 10, Enter a description of the work performed under this contract. Reconstruction of South 8th Ave. from Harrison Street to Main Street. 11, Enter the location in Montana where this work is performed. Be specific with your description. Bozeman City limits. Withholding return submitted by: Select the appropriate box identifying which entity is completing this return, sign this return and enter the information requested below. Government Entity Prime Contractor El Subcontractor Preparers Signature Prepares Title Project Engineer Telephone Nun-iber 406-582-2280 Fax Number 406-582-2263 Please mail this registration to Department of Revenue, P.O. Box 5835, Helena, MT 59604-5835 CLEAR FORM MONTANA CGR-1 VENUE 1% Contractor's Gross Receipts Rev 01-10 Contract Award Registration Form CGR-1 is required to be completed and mailed to the Department of Revenue within 10 days after 21contract or bid is officially awarded. 1 Contract awarded by: Enter the federal employer identification number, business name and address. Place an "X"in the"Government Entity'box if you are registering this contract between a government entity and a prime contractor. Place an'X'in the"Prime Contractor" box if you are registering this contract between a prime contractor and a subcontractor. Government Entity Prime Contractor❑ Federal Identification Number(FEIN) 81-6001238 Name .—City of Bozeman – Address P.O. Box 1230 City Bozeman State MT Zip Code 59771 2, Contract awarded to: Enter the federal employer identification number, business name and address. Place an .1X11 in the"Prime Contractor" box if you are registering this contract between a government entity and a prime contractor. Place an'X" in the"Subcontractor"box if you are registering this contract between a prime contractor and a subcontractor. Prime Contractor l.21 Subcontractor Federal Identification Number(FEIN)--81-0465363 -Name Knife River-Belgrade -Address P.O. Box 9 City Belgrade State MT Zip Code 59714 3, Enter the Government Issued Purchase Order Number ...............................3. Enter the contract award date here.,............... .......... ...................................................4. 04 / 16 12012 5, _Enter the estimated construction completion date here. 10 / 11 12012 6. Enter the total dollar amount of the contract here................ ...... .............. 6- $ 7. Enter a description of the work that will be performed under this contract. Reconstruction of South 8th Ave, from Harrison Street to Main Street. B. Enter the location in Montana where this work will be performed. Be specific with your description. Bozeman City iii-nits. Contract award registration submitted by: Select the appropriate box identifying which entity is completing this return, sign this return and enter the information requested below. Government Entity Prime Contractor Subcontractor[] Preparers Signature Preparer's Title Project Engineer Date Telephone Number 406-582-2280 Fax Number 406-582-2263 Please mail this registration to: Department of Revenue, P.O. 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(il N C C C: Cl1 'b" m �. tl1 L [] a t m ti o : m rc o c V) �, a c a ns n7 rCU cu ni rt) v) ff7 +Ji U7 a. t i u) 0) (emu .fin. U as �'p M m, (n o .c L -t o a E I- LL. U) U) 0 C 9 o ® 'm ms m m v ( r ix) � w uy 0 0 U tr) f"") (n in en w 3 °. 0i.. m �- -o C7 as E � x m = r'. cc a ar C) . C' U in E. D o.. m e a7 a7 v 8L °m v x c c c > ci ° o o a) a) E c w n — E o al � :ae r a w r7 w m _N O (n U) cb a u ? _, a tL U < m D a) o m m m tea' m' M 01 �= c a 7c x 9t x i< Ln v7 ca x 'c7 fn C c c o u! u! W w uJ f s ra n`) W u7 C) ° U Ll 10 n u1 ur n c� c z c m a7 �lY_ dY` c*t _ U a as Q) �, w Ala U n ay L ti ql u v u n 'o a o o Ll C� c E E cl c s a+ (U p � (n a u m rn x a� E E E E E cn ct) tT Q v 'a o 5 n c �o �L c > aE > aE ?' M Ar m 'o L' N b7 0.f t)J i V �T 'a' X N dll. O CrQ7 �7 GF Cs 'S] © rt :1s m m m (6 O 1- =J l',' �_' x [Y ear N W ct i� :� 0 U) C`J 'e^: d, U C} C) 11' 0. 'CC C) Q e� !- ♦- CL. a- CL 0.'...[l. �. a) r N cn �r 1r1 Lof r, ca a I k"I 0 n m al O .-. N (1) 't en eD r-- co C AT O O C3 O C7 Q C] 'C cn O o t° cN m m O Sl h W D m. G3 17)3 I C [(7 t- 4' N E C'd1 CD Ga Q7 C U f+4 �3 �i lf7 [f} ids ff3 iH lo cf} 113 I t I n u3 Z m .0 4. b) 64 fA C3 0 W h -C iO 0 C] h [J7 APO O Q o N O ® Lfl 1`, CCI �OD tr) Oi cL 69 ON7 to E o C� LU U7 [F? [fl Cfi 4f) Cf3 Cfi 69V eH VH 4 Y Q O 0 Q io c7 -E N r o i 0- Ln, ; T7 � R r.0 Ca C C $ i �C J � � C C tSN'7 M cz Ln N C5 i i i i Ln tn $ u i r C f'- C�5 (9 C Ln O E ° CD a fu a U (a LL� N C , c G7 cu O m tm w cv eE Ca a- �u C U7 -W; Z .a 7"4•1 cn DESCRIPTION OF THE PROJECT/SUMMARY OF DISBURSEMENTS FOR CITY OF BOZEMAN Allocated Amount of Loan Description of Proiect I. South 8th Avenue Street Reconstruction $1,700,000.00 Amount Amount Amount Remaining Draw Description Allocated Date of Remaining Reserved # of Item for Item of Draw Draw for Item Amount Reserved Amount $1,700,000.00 2431-01 #1 above $1,700,000.00 7/6/2012 92,917.65 1,607,082,35 1,607,082.35 DESCRIPTION OF PROJFC17SL1Pv MARY OF DISBURSEMENTS-I -2P City of Bozeman City Attorney's Office Greg Sullivan, City Attorney 0 Tim Cooper Staff Attorney M Susan L. Wordal, Staff Attorney Kyla Murray, Staff Attorney Ryan McCarty, Staff Attorney Anna Saverud, Staff Attorney July 6,2012 Board of Investments of the State of Montana 2401 Colonial Drive, 3rd Floor P. O. Box 200126 Helena, MT 59620-0126 U.S. Bank Trust National Association MT Corporate Trust Department WWH 1022 1420 Fifth Avenue, 7"'Floor Seattle,WA 98 101 Ladies and Gentlemen: I 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 July 6,2012(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: a) the Borrower Act; b) the Loan Agreement dated as of July 6, 2012 and executed by the Borrower; c) the Promissory Note(the "Note")dated as of July 6, 2012 and executed by the Borrower; d) Resolution No.43 85 of the Borrower,dated June 25,2012(the"Loan Agreement Resolution");and e) 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. Based upon the foregoing,I am of the opinion that: a) The Borrower is a political subdivision duly organized and validly existing under the laws and Street Address: 121 North Rouse Phone: (406)582-2309 Mailing Address: P.O. Box 1230 P I Fax: (406)582-2302 Bozeman, Montana 5977J-123 age of2 0 TDD: (406)582-2301 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 for 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 b) 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 party 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. Sincerely, BO AN CITY ATTORNEY GreW-ullivan, City Attorney Page 2 of 2