HomeMy WebLinkAboutResolution 5131 Authorizing Execution and Delivery for the Midtown Tax Increment Urban Renewal Revenue Bonds Series 2020
RESOLUTION NO. 5131
RESOLUTION RELATING TO $6,500,000 TAX INCREMENT URBAN RENEWAL
REVENUE BONDS (BOZEMAN MIDTOWN URBAN RENEWAL DISTRICT), SERIES
2020; AUTHORIZING THE EXECUTION AND DELIVERY FOR MIDTOWN TIF BOND
ISSUANCE
BE IT RESOLVED by the City Commission (the “Commission”) of the City of Bozeman,
Montana (the “City”), as follows:
Section 1
Definitions, Authorizations and Findings.
1.01. Definitions. The terms defined in this Section 1.01 shall for all purposes of this
Resolution have the meanings herein specified, unless the context clearly otherwise requires:
Accountant means a Person engaged in the practice of accounting as a certified public
accountant, whether or not employed by the City.
Act means Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended or
supplemented.
Additional Bonds means any Bonds issued pursuant to Sections 4.01 through 4.03.
Bond Account means the account so designated in the Tax Increment Debt Service
Account.
Bond Counsel means any firm of nationally recognized bond counsel experienced in
matters relating to tax-exempt financing, selected by the City.
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Bond Register means the register maintained for the purpose of registering the ownership,
transfer and exchange of the Bonds of any series.
Bonds means the Series 2020 Bonds and any Additional Bonds.
Business Day means, with respect to the Bonds of any series, any day other than a Saturday,
Sunday or other day on which the Registrar for such series of Bonds is not open for business.
City means the City of Bozeman, Montana, or its successors.
Code means the Internal Revenue Code of 1986, as amended.
Commission means the City Commission of the City or any successor governing body
thereof.
Construction Account means the account so designated in the Tax Increment Capital
Project Account.
Defeasance Obligations means obligations which are general obligations of the United
States or securities of United States agencies which are authorized by law to be so deposited, or
money market funds invested in such obligations, which are not subject to redemption or
prepayment other than at the option of the holder thereof.
District means the Bozeman Midtown Urban Renewal District created and established
pursuant to the Act and the Ordinance, as such district may be enlarged or reduced in accordance
with the Act and this Resolution.
Fiscal Year means the period commencing on the first day of July of any year and ending
on the last day of June of the next calendar year, or any other twelve-month period authorized by
law and specified by this Commission as the City’s Fiscal Year.
Independent means, when used with respect to any specified Person, such a Person who
(i) is in fact independent; (ii) does not have any direct financial interest or any material indirect
financial interest in the City, other than the payment to be received under a contract for services to
be performed by such Person; and (iii) is not connected with the City as an officer, employee,
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promoter, trustee, partner, director, underwriter or person performing similar functions. Whenever
it is herein provided that any Independent Person’s opinion or certificate shall be furnished, such
Person shall be appointed by the City and such opinion or certificate shall state that the signer has
read this definition and that the signer is Independent within the meaning hereof.
Interest Account means the subaccount so designated in the Bond Account.
Interest Payment Date means the Stated Maturity of an installment of interest on any of the
Bonds.
Ordinance means Ordinance No. 1685 adopted by the Commission on November 27, 2006,
as amended by Ordinance No. 1925, adopted by the City Commission on December 16, 2015, as
the same may be further amended or supplemented from time to time in accordance with the Act
and this Resolution.
Original Purchaser means, with respect to any series of Bonds, the Person who purchases
such series of Bonds from the City when first issued. The Original Purchaser of the Series 2020
Bonds is Stifel, Nicolaus & Company, Incorporated, of Denver, Colorado.
Outstanding means, with reference to Bonds, as of the date of determination, all Bonds
theretofore issued and delivered under this Resolution except:
(i) Bonds theretofore cancelled by the City or delivered to the City cancelled or for
cancellation;
(ii) Bonds and portions of Bonds for whose payment or redemption money or
Defeasance Obligations (as provided in Section 10.04) shall have been theretofore
deposited in trust for the Owners of such Bonds; provided, however, that if such Bonds are
to be redeemed, notice of such redemption shall have been duly given pursuant to this
Resolution or irrevocable instructions to call such Bonds for redemption at a stated
Redemption Date shall have been given by the City; and
(iii) Bonds in exchange for or in lieu of which other Bonds shall have been issued
and delivered pursuant to this Resolution;
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provided, however, that in determining whether the Owners of the requisite principal amount of
Outstanding Bonds have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Bonds owned by the City shall be disregarded and deemed not to be
Outstanding.
Owner means, with respect to any Bond, the Person in whose name such Bond is registered
in the Bond Register.
Person means any individual, corporation, partnership, joint venture, limited liability
company, limited liability partnership, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Plan means the Bozeman Midtown Urban Renewal Plan adopted by the Commission on
November 27, 2006, as heretofore and hereafter amended or supplemented from time to time, all
in accordance with the Act, the Ordinance and this Resolution.
Principal Account means the subaccount so designated in the Bond Account.
Principal and Interest Requirements means, with respect to any Bonds and for any Fiscal
Year or other specified period, the amount required to pay the principal of and interest on such
Bonds during such Fiscal Year or other period, determined on the assumption that each Serial
Bond is to be paid on its Stated Maturity and each Term Bond is to be paid on the Sinking Fund
Payment Dates according to the mandatory redemption requirements established for such Term
Bond by the applicable section of this Resolution or any Supplemental Resolution.
Principal Payment Date means the Stated Maturity of principal of any Serial Bond and the
Sinking Fund Payment Date for any Term Bond.
Project means the 2020 Project and any other urban renewal project undertaken under the
Act in or for the benefit of the District, the costs of which are to be paid, in whole or in part, from
the proceeds of Bonds.
Qualified Investments has the meaning given such term in Section 5.07.
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Redemption Date when used with respect to any Bond to be redeemed means the date on
which it is to be redeemed.
Redemption Price when used with respect to any Bond to be redeemed means the price at
which it is to be redeemed.
Registrar means the Person, if any, appointed by the City to act as bond registrar, transfer
agent and paying agent for a series of Bonds. With respect to the Series 2020 Bonds, the Registrar
shall be appointed as set forth in Section 3.05.
Regulations means the Treasury Regulations promulgated under the Code.
Reserve Account means the account so designated in the Tax Increment Debt Service
Account.
Reserve Requirement means an amount equal, as of the date of calculation, to the least of
(i) ten percent (10%) of the original principal amount of the Bonds; (ii) the maximum Principal
and Interest Requirements on the Bonds in the current or any future Fiscal Year; or (iii) 125% of
the average Principal and Interest Requirements on the Bonds payable in any Fiscal Year.
Resolution means this Resolution No. [____] as originally adopted or as it may from time
to time be amended or supplemented pursuant to the applicable provisions hereof.
Serial Bonds means Bonds which are not Term Bonds.
Series 2020 Bonds means the City’s Tax Increment Urban Renewal Revenue Bonds
(Bozeman Midtown Urban Renewal District), Series 2020, issued in the original aggregate
principal amount of $6,500,000.
Sinking Fund Payment Date means a date set forth in any applicable provision of this
Resolution or a Supplemental Resolution for the making of a mandatory principal payment for the
redemption of a Term Bond.
State means the State of Montana.
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State Entitlements means the system of local government entitlements and block grants
established pursuant to HB 124 enacted by the 2001 Legislature and codified at 15-1-120 through
15-1-123, M.C.A., as may be amended from time to time.
Stated Maturity when used with respect to any Bond or any installment of interest thereon
means the date specified in such Bond as the fixed date on which principal of such Bond or such
installment of interest is due and payable.
Subordinate Obligations means any bonds, notes or obligations of the City issued on a
subordinate basis to the Bonds as to the Tax Increment pursuant to Section 4.04.
Supplemental Resolution means any resolution supplemental to this Resolution adopted
pursuant to Section 10.
Surety Bond means a surety bond or insurance policy issued for the Reserve Account by
an insurance company initially rated in one of the two highest rating categories by Fitch, Inc.,
Moody’s Investors Service, Inc., or S&P Global Ratings, or any successors thereto.
Tax Increment means the amount received by the City pursuant to the Act from the
extension of levies of Taxes (expressed in mills) against the incremental taxable value (as defined
in the Act) of all Taxable Property, and shall include all payments in lieu of Taxes attributable to
the incremental taxable value, State Entitlements received by the City with respect to the District,
and all payments received by the City designated as replacement revenues for lost Tax Increment,
as provided in Section 8.08.
Tax Increment Capital Project Account means the account so designated in the Tax
Increment Accounts.
Tax Increment Debt Service Account means the account so designated in the Tax
Increment Accounts.
Tax Increment Development Account means the account so designated in the Tax
Increment Accounts.
Tax Increment Accounts means the accounts established pursuant to Section 5.
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Taxable Property means all real and personal property located in the District and subject
to Taxes, including land, improvements and equipment.
Taxes means all taxes levied on an ad valorem basis by any Taxing Body against the
Taxable Property (exclusive of the six mill levy for university purposes levied by the State), and
shall include all payments in lieu of taxes received by the City with respect to Taxable Property.
Taxing Body means the City; Gallatin County, Montana; School District No. 7 (Bozeman),
Gallatin County, Montana; High School District No. 7 (Bozeman), Gallatin County, Montana; the
State of Montana; and any other political subdivision or governmental unit which may hereafter
levy Taxes against property within the District.
Term Bond means any Bond for the payment of the principal of which mandatory payments
are required by this Resolution or Supplemental Resolution to be made at times and in amounts
sufficient to redeem all or a portion of such Bond prior to its Stated Maturity.
2020 Project shall have the meaning set forth in Section 1.04.
2020 Surety Policy means the debt service reserve fund insurance policy provided by
Assured Guaranty Municipal Corp. in the amount of $412,750 on behalf of the Series 2020 Bonds.
The 2020 Surety Policy is a Surety Bond.
1.02. Rules of Construction. Unless the context otherwise requires or except as otherwise
expressly provided:
(a) All references in this Resolution to designated sections and other
subdivisions are to the designated sections and other subdivisions of this Resolution as
originally adopted.
(b) The words “herein,” “hereof” and “hereunder” and other words of similar
import without reference to any particular section or subdivision refer to this Resolution as
a whole and not to any particular section or other subdivision unless the context clearly
indicates otherwise.
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(c) The terms defined in this Resolution 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 applicable
to governmental entities.
(e) All computations provided herein shall be made in accordance with
generally accepted accounting principles applicable to governmental entities consistently
applied.
(f) “Or” is not intended to be exclusive, but is intended to contemplate or
encompass one or more or all of the terms or alternatives conjoined.
1.03. Recitals. Under the Act, the City is authorized to create urban renewal areas, prepare
and adopt an urban renewal plan therefor and amendments thereto, undertake urban renewal
projects therein, provide for the segregation and collection of tax increment with respect to
property taxes collected in such areas, issue its bonds to pay the costs of such projects and to refund
bonds previously issued under the Act and pledge to the repayment of the bonds the tax increment
and other revenues derived from projects undertaken within the urban renewal area.
1.04. Prior City Actions; the 2020 Project. Pursuant to the Act and the Ordinance, the
Commission created the District and approved the Plan containing a tax increment financing
provision, all as set forth in the Ordinance. In accordance with the Act, the Plan and the Ordinance,
this Commission determined to undertake, as an urban renewal project for the District, the design,
engineering and construction of various public infrastructure improvements within the District,
including (i) development of Aspen Street as a “festival” street, including sidewalk, street light
and curb and gutter improvements, pedestrian crossing, street trees and stormwater infrastructure
improvements to Aspen Street between North 5th Avenue and North 7th Avenue; (ii) installation
of angle parking infrastructure along the western edge of the Westlake BMX Park; (iii) street,
sidewalk, street light and curb and gutter improvements, pedestrian crossing, street trees and
stormwater infrastructure improvements to North 7th Avenue between Durston Road and
Mendenhall Street; (iv) improvements to sewer lines or mains serving North 5th Avenue in the
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District; and (v) construction of a multi-use path, allowing pedestrian and bike connectivity to the
Westlake BMX Park and the Aspen Street improvements described above (such public
infrastructure improvements, collectively, the “2020 Project”), and the Commission declared its
intention to use Tax Increment to finance a portion of the costs of the 2020 Project.
1.05. Authorization and Sale of Series 2020 Bonds. Pursuant to Resolution No. 5167
adopted April 20, 2020 (the “Parameters Resolution”), this Commission determined that it is in
the best interests of the City to issue its Series 2020 Bonds, as authorized by Section 7-15-4301 of
the Act and this Resolution, and to sell the Series 2020 Bonds to the Original Purchaser. In
furtherance thereof, the Commission, by the Parameters Resolution, authorized the various City
officers, subject to the satisfaction of certain parameters, to enter into the Bond Purchase
Agreement, dated June 18, 2020, with the Original Purchaser (the “Bond Purchase Agreement”),
pursuant to which the Original Purchaser agreed to purchase the Series 2020 Bonds at the
aggregate purchase price of $7,100,259.15 (representing the par amount of the Series 2020 Bonds,
less underwriter’s compensation of $48,750 and plus original issue premium of $649,009.15),
subject to the terms and conditions of the Bond Purchase Agreement and this Resolution. The
terms of the sale and purchase of the Series 2020 Bonds, as set forth in the Bond Purchase
Agreement and this Resolution, are consistent with the terms and limitations of the Parameters
Resolution. The sale of the Series 2020 Bonds to the Original Purchaser is hereby ratified and
confirmed. To the extent the provisions of this Resolution and of the Bond Purchase Agreement
conflict, the provisions of this Resolution will prevail.
1.06. Application of Series 2020 Bond Proceeds. Proceeds of the Series 2020 Bonds will
be applied as follows:
Sources of Funds: Principal Amount of the Series 2020 Bonds $ 6,500,000.00
Original Issue Premium 649,009.15
Total Sources of Funds $ 7,149,009.15
Application of Funds:
Deposit to the Construction Account to Pay 2020 Project Costs $ 6,763,030.57 Premium of the Policy and 2020 Surety Policy 232,028.58 Payment of Underwriter’s Discount 48,750.00
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Deposit to Construction Account to Pay Costs of
Issuance 105,200.00
Total Application of Funds $ 7,149,009.15
1.07. Development Agreements; Estimate of Tax Increment. The City has previously
entered into various development agreements with developers of projects in the District (the
“Development Agreements”). Pursuant to the Development Agreements, the City has agreed to
reimburse the developers of various projects for certain eligible costs of the respective projects in
the maximum aggregate amount of $2,003,159. In addition, there is a pending request from the
developer of a project in the District for reimbursement from Tax Increment for certain eligible
costs in the approximate amount of $45,000. There is currently $2,454,300 on hand in the Tax
Increment Development Account of the District, which is available to pay the City’s obligations
under the Development Agreements. The various projects undertaken in connection with the
Development Agreements are underway and all are expected to be completed prior to June 30,
2021. The City currently anticipates paying its obligations under the Development Agreements in
Fiscal Year 2021 from Tax Increment monies on hand and available therefor in the Tax Increment
Development Account.
The City estimates that Tax Increment from the District will be at least $644,686 per year,
based on $644,686 in Tax Increment received by the City in Fiscal Year 2019. (Tax Increment to
be received in Fiscal Year 2020 is expected to be approximately $1,089,328.) The maximum
Principal and Interest Requirements on the Series 2020 Bonds in any Fiscal Year are $412,750.
There are no other bonds or obligations of the City payable from Tax Increment, other than
amounts due pursuant to the Development Agreements.
Accordingly, this Commission hereby estimates that, in accordance with Section 7-15-
4324 of the Act, there will be sufficient Tax Increment and other revenues and amounts on hand
to pay the Series 2020 Bonds in each Fiscal Year such Bonds are Outstanding and to pay amounts
to become due pursuant to the Development Agreements.
1.08. Bond Insurance; 2020 Surety Policy. In connection with the issuance of the Series
2020 Bonds, the City has determined that it is in the best interest of the City and the 2020 Project
to obtain a municipal bond insurance policy with respect to the Series 2020 Bonds (the “Policy”)
as well as a municipal debt service reserve insurance policy (the “2020 Surety Policy”), in each
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case from Assured Guaranty Municipal Corp. (“AGM”). In consideration of AGM’s agreement
to issue the Policy and the 2020 Surety Policy, the City hereby agrees to the provisions set forth in
Exhibit C and Exhibit D hereto, respectively, which are hereby incorporated herein. The
provisions set forth in Exhibit C and Exhibit D shall govern, notwithstanding anything to the
contrary herein. The Mayor, City Manager and City Finance Director or their designees are
authorized and directed to approve, execute and deliver to AGM all documentation necessary for
the issuance of the Policy and the 2020 Surety Policy, including but not limited to insurance
agreements with respect to the Policy and the 2020 Surety Policy.
1.09. Findings and Determinations. It is hereby found, determined and declared by this
Commission as follows:(a) the conditions precedent to the issuance of the Series 2020 Bonds
under the Act, the Ordinance and this Resolution have or will be met prior to the issuance of the
Series 2020 Bonds;
(b) the estimated Tax Increment to be received by the City will be sufficient to
pay the principal of and interest on the Series 2020 Bonds when due;
(c) it is in the best interests of the City to sell and issue the Series 2020 Bonds to
pay all or portion of the costs of the 2020 Project, pay the premium of the 2020 Surety
Policy, and pay costs of issuance of the Series 2020 Bonds, as provided in this
Resolution; and
(d) all acts, conditions and things required by the Constitution and laws of the
State, including the Act, in order to pledge the Tax Increment to the payment of the Series
2020 Bonds, to make the Series 2020 Bonds valid and binding special, limited obligations
of the City in accordance with their terms and with the terms of this Resolution have been
done, do exist, have happened and have been performed in regular and due form, time
and manner as so required.
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Section 2
The Bonds.
2.01. General Title. The general title of the Bonds of all series shall be “Tax Increment
Urban Renewal Revenue Bonds (Bozeman Midtown Urban Renewal District)” with appropriate
additions for refunding bonds or Subordinate Obligations and to distinguish Bonds of each series
from Bonds of other series.
2.02. General Limitations; Issuable in Series. The aggregate principal amount of Bonds
that may be authenticated and delivered and Outstanding under this Resolution is not limited,
except as provided in Section 4 and except as may be limited by law.
The Bonds may be issued in series as from time to time authorized by the City.
The Bonds are special, limited obligations of the City. The Bonds are not general
obligations of the City and neither the general credit nor the taxing power of the City, Gallatin
County or the State is pledged to the payment of the Bonds or the interest thereon. Principal of,
premium, if any, and interest on the Bonds (except to the extent expressly payable out of proceeds
of the Bonds) are payable solely from the Tax Increment or other sources which may be pledged
to the payment of any series of Bonds. Gallatin County and the State shall in no event be liable
for the payment of the principal of, premium, if any, or interest on the Bonds or the performance
of any pledge of any kind whatsoever that may be undertaken by the City with respect thereto.
Neither this Resolution, the Bonds, nor any of the agreements or obligations of the City contained
herein or therein shall be construed to constitute an indebtedness of the City, Gallatin County or
the State within the meaning of any constitutional or statutory provisions whatsoever.
If any Stated Maturity, Redemption Date or Sinking Fund Payment Date shall be on a day
which is not a Business Day, then payment of principal of, premium, if any, or interest due on such
day may be made on the next succeeding Business Day, with the same force and effect as if made
on such Stated Maturity, Redemption Date or Sinking Fund Payment Date (whether or not such
next succeeding Business Day occurs in a succeeding month), and no interest shall accrue for the
intervening period.
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2.03. Terms of a Particular Series. Each series of Bonds (other than the Series 2020 Bonds,
as to which specific provision is made in Section 3) shall be created by a Supplemental Resolution
and pursuant to Section 4. The City may, at the time of the creation of any series of Bonds or at
any time thereafter make, and the Bonds of that series may also contain, provision for a sinking,
amortization, improvement or other analogous fund. All Bonds of the same series shall be
substantially identical except as to denomination and the differences specified herein or in a
Supplemental Resolution between interest rates, Stated Maturities and redemption provisions.
2.04. Form. The form of the Bonds (other than the Series 2020 Bonds, as to which specific
provision is made in Section 3) shall be established by the Supplemental Resolution creating such
series. The Bonds of any series shall be issuable as fully registered Bonds, in such denominations
as shall be provided in the Supplemental Resolution creating such series (other than the Series
2020 Bonds, as to which specific provision is made in Section 3).
2.05. Execution and Delivery. Each Bond shall be executed on behalf of the City by the
officials of the City specified in a Supplemental Resolution (other than the Series 2020 Bonds, as
to which specific provision is made in Section 3). The signature of any official may be facsimile,
if permitted by applicable law. Bonds bearing the manual or facsimile signatures of individuals
who were at any time the proper officials of the City shall bind the City, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the delivery of such Bonds or
did not hold such offices at the date of such Bonds.
At any time and from time to time, the City may deliver Bonds executed by the proper
officers of the City to the Registrar for authentication, and the Registrar shall authenticate and
deliver such Bonds as specified in a Supplemental Resolution (other than the Series 2020 Bonds,
as to which specific provision is made in Section 3).
Section 3
The Series 2020 Bonds.
3.01. Term of Series 2020 Bonds. The Series 2020 Bonds shall be designated “Tax
Increment Urban Renewal Revenue Bonds (Bozeman Midtown Urban Renewal District), Series
2020.” The Series 2020 Bonds shall be in denominations of $5,000 or any integral multiple thereof
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of single maturities. The Series 2020 Bonds shall mature, subject to redemption as hereinafter
provided, on July 1 in the years and amounts listed below, and shall bear interest from date of
original issue until paid or duly called for redemption (including mandatory sinking fund
redemption as to the term bonds maturing in 2035, 2040 and 2044) at the rates shown opposite
such years and amounts, as follows:
Year Amount Interest Rate 2021 $ 175,000 2.00%
2022 180,000 2.00 2023 185,000 2.00 2024 190,000 3.00 2025 195,000 4.00 2026 205,000 4.00
2027 210,000 4.00 2028 220,000 4.00 2029 230,000 4.00 2030 235,000 4.00 2035* 1,330,000 4.00
2040* 1,620,000 4.00 2044* 1,525,000 3.00 *Term Bonds subject to mandatory sinking fund redemption as set forth in Section 3.07
below.
Interest shall be calculated on the basis of a 360-day year composed of twelve 30-day
months.
3.02. Registered Form, Interest Payment Dates. The Series 2020 Bonds shall be issuable
only in fully registered form, and the ownership of the Series 2020 Bonds shall be transferred only
upon the Bond Register. The interest on the Series 2020 Bonds shall be payable on January 1 and
July 1 in each year, commencing January 1, 2021. Interest on the Series 2020 Bonds shall be
payable to the Owners thereof as of the close of business on the 15th day of the month immediately
preceding each Interest Payment Date, whether or not such day is a Business Day. Interest on, and
upon presentation and surrender thereof, the principal of each Series 2020 Bond shall be payable
by check or draft issued by the Registrar described herein.
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3.03. Date. Each Series 2020 Bond shall be dated, as originally issued, as of July 9, 2020,
and upon authentication of any Series 2020 Bond the Registrar shall indicate thereon the date of
such authentication.
3.04. Registration. The City shall appoint, and shall maintain, a bond registrar, transfer
agent and paying agent (the “Registrar”). This Section 3.04 shall establish a system of registration
for the Series 2020 Bonds. The effect of registration and the rights and duties of the City and the
Registrar with respect thereto shall be as follows:
(a) Bond Register. The Registrar shall keep at its principal office a Bond
Register in which the Registrar shall provide for the registration of ownership of Series
2020 Bonds and the registration of transfers and exchanges of Series 2020 Bonds entitled
to be registered, transferred or exchanged.
(b) Transfer of Series 2020 Bonds. Upon surrender to the Registrar for transfer
of any Series 2020 Bond duly endorsed by the Owner thereof or accompanied by a written
instrument of transfer, in form satisfactory to the Registrar, duly executed by the Owner
thereof or by an attorney duly authorized by the Owner in writing, the Registrar shall
authenticate and deliver, in the name of the designated transferee or transferees, one or
more new Series 2020 Bonds of the same series and a like aggregate principal amount,
interest rate and maturity, as requested by the transferor. The Registrar may, however,
close the books for registration of transfer of any Series 2020 Bond or portion thereof
selected or called for redemption.
(c) Exchange of Series 2020 Bonds. Whenever any Series 2020 Bond is
surrendered by the Owner for exchange, the Registrar shall authenticate and deliver one or
more new Series 2020 Bonds of the same series and a like aggregate principal amount,
interest rate and maturity, as requested by the Owner or the Owner’s attorney in writing.
(d) Cancellation. All Series 2020 Bonds surrendered upon any transfer or
exchange shall be promptly cancelled by the Registrar and thereafter disposed of as
directed by the City.
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(e) Improper or Unauthorized Transfer. When any Series 2020 Bond is
presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it
is satisfied that the endorsement on such Series 2020 Bond or separate instrument of
transfer is valid and genuine and that the requested transfer is legally authorized. The
Registrar shall incur no liability for the refusal, in good faith, to make transfers which it, in
its judgment, deems improper or unauthorized.
(f) Persons Deemed Owners. The City and the Registrar may treat the Person
in whose name any Series 2020 Bond is at any time registered in the Bond Register as the
absolute owner of such Series 2020 Bond, whether such Series 2020 Bond shall be overdue
or not, for the purpose of receiving payment of, or on account of, the principal of, premium,
if any, and interest on such Series 2020 Bond and for all other purposes, and all such
payments so made to any such registered owner or upon the owner’s order shall be valid
and effectual to satisfy and discharge the liability of the City upon such Series 2020 Bond
to the extent of the sum or sums so paid.
(g) Taxes, Fees and Charges. For every transfer or exchange of Series 2020
Bonds (except for an exchange upon a partial redemption of a Series 2020 Bond), the
Registrar may impose a charge upon the Owner thereof sufficient to reimburse the
Registrar for any tax, fee or other governmental charge required to be paid with respect to
such transfer or exchange.
(h) Mutilated, Lost, Stolen or Destroyed Series 2020 Bonds. In case any Series
2020 Bond shall become mutilated or be lost, stolen or destroyed, the Registrar shall deliver
a new Series 2020 Bond of the same series and a like aggregate principal amount, interest
rate and maturity in exchange and substitution for and upon cancellation of any such
mutilated Series 2020 Bond or in lieu of and in substitution for any such Series 2020 Bond
lost, stolen or destroyed, upon the payment of the reasonable expenses and charges of the
Registrar in connection therewith; and, in the case of a Series 2020 Bond lost, stolen or
destroyed, upon filing with the Registrar of evidence satisfactory to it that such Series 2020
Bond was lost, stolen or destroyed, and of the ownership thereof, and upon furnishing to
the Registrar of an appropriate bond or indemnity in form, substance and amount
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satisfactory to it, in which both the City and the Registrar shall be named as obligees. All
Series 2020 Bonds so surrendered to the Registrar shall be cancelled by it and evidence of
such cancellation shall be given to the City. If the mutilated, lost, stolen or destroyed Series
2020 Bond has already matured or such Series 2020 Bond has been called for redemption
in accordance with its terms, it shall not be necessary to issue a new Series 2020 Bond prior
to payment.
3.05. Appointment of Initial Registrar. The City hereby appoints U.S. Bank National
Association, of Salt Lake City, Utah, to act as the Registrar. The City reserves the right to appoint
a successor Registrar, but the City agrees to pay the reasonable and customary charges of the
Registrar for the services performed. Upon merger or consolidation of a bank or trust company
that is acting as the Registrar, if the resulting corporation is a bank or trust company authorized by
law to conduct such business, such corporation shall be authorized to act as successor Registrar.
The City reserves the right to remove any Registrar upon 30 days’ notice and upon the appointment
of a successor Registrar, in which event the predecessor Registrar shall deliver all cash and Series
2020 Bonds in its possession as Registrar to the successor Registrar and shall deliver the Bond
Register to the successor Registrar.
3.06. Optional Redemption. The Series 2020 Bonds with Stated Maturities on or after
July 1, 2035 are subject to redemption on July 1, 2030 and any date thereafter, at the option of the
City, in whole or in part, and if in part from such Stated Maturities and in such principal amounts
as the City may designate in writing to the Registrar (or, if no designation is made, in inverse order
of maturities and within a maturity in $5,000 principal amounts selected by the Registrar by lot or
other manner as directed by the City), at a Redemption Price equal to the principal amount thereof
and interest accrued to the Redemption Date, without premium.
The Redemption Date and the principal amount of the Series 2020 Bonds to be redeemed
shall be fixed by the City Finance Director who shall give notice thereof to the Registrar at least
45 days prior to the Redemption Date or such lesser period as the Registrar accepts. The Registrar,
at least 30 days prior to the designated Redemption Date, shall cause notice of redemption to be
given by first class mail or by other means required by the securities depository, to the Owners of
each Series 2020 Bond to be redeemed at their addresses as they appear on the Bond Register, but
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no defect in or failure to give such notice shall affect the validity of proceedings for the redemption
of any Series 2020 Bond not affected by such defect or failure. The notice of redemption shall
specify the Redemption Date, Redemption Price, the numbers, interest rates and CUSIP numbers
of the Series 2020 Bonds to be redeemed and the place at which the Series 2020 Bonds are to be
surrendered for payment, which is the principal office of the Registrar. Official notice of
redemption having been given as aforesaid, the Series 2020 Bonds or portions thereof so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein
specified and from and after such date (unless the City shall default in the payment of the
Redemption Price) such Series 2020 Bonds or portions thereof shall cease to bear interest.
3.07. Mandatory Sinking Fund Redemption. The Series 2020 Bonds having Stated
Maturities in 2035, 2040 and 2044 are subject to mandatory sinking fund redemption on July 1 in
the respective years and the respective principal amounts set forth below in $5,000 principal
amounts selected by the Registrar, by lot or other manner as directed by the City, at a Redemption
Price equal to the principal amount thereof to be redeemed plus interest accrued to the Redemption
Date:
2035 Term Bonds 2040 Term Bonds 2044 Term Bonds
July 1
Sinking Fund Payment
Amount July 1
Sinking Fund Payment
Amount July 1
Sinking Fund Payment
Amount
2031 $245,000 2036 $300,000 2041 $365,000
2032 255,000 2037 310,000 2042 375,000
2033 265,000 2038 325,000 2043 385,000
2034 275,000 2039 335,000
If the Term Bonds having a Stated Maturity in 2035, 2040 and 2044 are not previously
purchased by the City in the open market or prepaid, $290,000, $350,000 and $400,000,
respectively, in principal amount of such Term Bonds would remain to mature in 2035, 2040 and
2044, respectively. The principal amount of such Term Bonds required to be redeemed on the
above Sinking Fund Payment Dates shall be reduced by the principal amount of such Term Bonds
theretofore redeemed at the option of the City and as to which the City has not previously applied
amounts to reduce the principal amount of such Term Bonds on a Sinking Fund Payment Date.
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3.08. Execution and Delivery. The Series 2020 Bonds shall be forthwith prepared for
execution under the direction of the City Clerk and shall be executed on behalf of the City by the
signatures of the Mayor, the City Manager and the City Clerk, provided that said signatures may
be printed, engraved or lithographed facsimiles thereof. The seal of the City need not be imprinted
on or affixed to any Series 2020 Bond. In case any officer whose signature or a facsimile of whose
signature shall appear on the Series 2020 Bonds shall cease to be such officer before the delivery
thereof, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the
same as if such officer had remained in office until delivery. When the Series 2020 Bonds have
been so executed by said City officers, they shall be registered by the City Clerk in accordance
with Montana Code Annotated, Section 7-15-4322, as amended. Notwithstanding such execution,
no Series 2020 Bond shall be valid or obligatory for any purpose or be entitled to any security or
benefit under this Resolution unless and until a certificate of authentication on such Series 2020
Bond has been duly executed by the manual signature of an authorized representative of the
Registrar. Certificates of authentication on different Series 2020 Bonds need not be signed by the
same representative. The executed certificate of authentication on each Series 2020 Bond shall be
conclusive evidence that it has been authenticated and delivered under this Resolution. When the
Series 2020 Bonds have been fully executed and authenticated, they shall be delivered by the
Registrar to the Original Purchaser upon payment of the purchase price in accordance with the
contract of sale heretofore made and executed, and the Original Purchaser shall not be obligated
to see to the application of the purchase price.
3.09. Securities Depository for the Series 2020 Bonds.
(a) For purposes of this Section 3.09, the following terms shall have the following
meanings:
“Beneficial Owner” means, whenever used with respect to a Series 2020 Bond of
which DTC (as hereinafter defined) or its nominee is the Owner, the Person (or subrogee
of the Person) recorded as the beneficial owner of such Series 2020 Bond on the records
of the Participant (as hereinafter defined) in whose name DTC holds such Series 2020
Bond.
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“Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee
of DTC with respect to the Series 2020 Bonds.
“DTC” means The Depository Trust Company of New York, New York.
“Participant” means any broker-dealer, bank or other financial institution for which
DTC holds Series 2020 Bonds as securities depository.
“Representation Letter” means the Blanket Issuer Letter of Representations
pursuant to which the City agrees to comply with DTC’s Operational Arrangements.
(b) The Series 2020 Bonds shall be initially issued as separately authenticated fully
registered Series 2020 Bonds, and one Series 2020 Bond shall be issued in the principal amount
of each Stated Maturity of the Series 2020 Bonds. Upon initial issuance, the ownership of all
Series 2020 Bonds shall be registered in the Bond Register in the name of Cede & Co., as nominee
of DTC. The Registrar and the City may treat DTC (or its nominee) as the sole and exclusive
Owner of the Series 2020 Bonds registered in its name for the purposes of payment of the principal
of or interest on the Series 2020 Bonds, selecting the Series 2020 Bonds or portions thereof to be
redeemed, if any, giving any notice permitted or required to be given to Owners of Series 2020
Bonds under this Resolution, registering the transfer of Series 2020 Bonds, and for all other
purposes whatsoever; and neither the Registrar nor the City shall be affected by any notice to the
contrary. Neither the Registrar nor the City shall have any responsibility or obligation to any
Participant, any Person claiming a beneficial ownership interest in the Series 2020 Bonds under or
through DTC or any Participant, or any other Person which is not shown on the Bond Register as
being an Owner, with respect to the accuracy of any records maintained by DTC or any Participant,
with respect to the payment by DTC or any Participant of any amount with respect to the principal
of or interest on the Series 2020 Bonds, with respect to any notice which is permitted or required
to be given to Owners under this Resolution, with respect to the selection by DTC or any
Participant of any Person to receive payment in the event of a partial redemption of the Series 2020
Bonds, or with respect to any consent given or other action taken by DTC as Owner of the Series
2020 Bonds. So long as any Series 2020 Bond is registered in the name of Cede & Co., as nominee
of DTC, the Registrar shall pay all principal of and interest on such Series 2020 Bond, and shall
give all notices with respect to such Series 2020 Bond, only to Cede & Co. in accordance with the
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Representation Letter, and all such payments shall be valid and effective to fully satisfy and
discharge the City’s obligations with respect to the principal of and interest on the Series 2020
Bonds to the extent of the sum or sums so paid. Unless the services of DTC as securities depository
with respect to the Series 2020 Bonds are terminated as provided in subsection (c) hereof, no
Person other than DTC shall receive an authenticated Series 2020 Bond for each separate stated
maturity evidencing the obligation of the City to make payments of principal and interest. Upon
delivery by DTC to the Registrar of written notice to the effect that DTC has determined to
substitute a new nominee in place of Cede & Co., the Series 2020 Bonds will be transferable to
such new nominee in accordance with subsection (e) hereof.
(c) In the event the City determines to discontinue the book-entry-only system for the
Series 2020 Bonds, the City may notify DTC and the Registrar, whereupon DTC shall notify the
Participants of the availability through DTC of Series 2020 Bonds in the form of certificates. In
such event, the Series 2020 Bonds will be transferable in accordance with subsection (e) hereof.
DTC may determine to discontinue providing its services with respect to the Series 2020 Bonds at
any time by giving notice to the City and the Registrar and discharging its responsibilities with
respect thereto under applicable law. In such event the Series 2020 Bonds will be transferable in
accordance with subsection (e) hereof.
(d) The Representation Letter sets forth certain matters with respect to, among other
things, notices, consents and approvals by Owners and Beneficial Owners and payments on the
Series 2020 Bonds. The Registrar shall have the same rights with respect to its actions thereunder
as it has with respect to its actions under this Resolution.
(e) In the event that any transfer or exchange of Series 2020 Bonds is permitted under
subsection (b) or (c) hereof, such transfer or exchange shall be accomplished upon receipt by the
Registrar of the Series 2020 Bonds to be transferred or exchanged and appropriate instruments of
transfer to the permitted transferee in accordance with the provisions of this Resolution. In the
event Series 2020 Bonds in the form of certificates are issued to Owners other than Cede & Co.,
its successor as nominee for DTC as Owner of all the Series 2020 Bonds, or another securities
depository as Owner of all the Series 2020 Bonds, the provisions of this Resolution shall also apply
to all matters relating thereto, including, without limitation, the preparation of such Series 2020
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Bonds in the form of Series 2020 Bond certificates and the method of payment of principal of and
interest on such Series 2020 Bonds in the form of Series 2020 Bond certificates.
3.10. Form of Series 2020 Bonds. The Series 2020 Bonds shall be prepared in
substantially the form set forth in Exhibit A hereto and by this reference is made a part hereof.
3.11. Certification of Proceedings. The officers of the City are hereby authorized and
directed to prepare and furnish to the Original Purchaser and to Dorsey & Whitney LLP, Bond
Counsel, certified copies of all proceedings and records of the City, and such other affidavits,
certificates and information as may be required to show the facts relating to the legality and
marketability of the Series 2020 Bonds as the same appear from the books and records under their
custody and control or as otherwise known to them, and all such certified copies, certificates and
affidavits, including any heretofore furnished, shall be deemed representations of the City as to the
facts recited therein.
Section 4
Additional Bonds.
4.01. General Provisions. In addition to the Series 2020 Bonds, whose issuance and
delivery is provided for in Section 3, Additional Bonds may at any time and from time to time be
issued, sold and delivered by the City but only upon compliance with the conditions of
Sections 4.02 and 4.03, whichever may be applicable, and upon filing with the City Clerk the
following:
(i) A Supplemental Resolution authorizing the issuance of such series of
Additional Bonds and the sale thereof to the Original Purchaser or Purchasers named
therein for the purchase price set forth therein.
(ii) A certificate executed by the Mayor and the City Finance Director stating
that upon the issuance of such series of Additional Bonds, no default hereunder has
occurred and is continuing which would not be cured upon the issuance of such series of
Additional Bonds and application of the proceeds thereof.
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(iii) An opinion of Bond Counsel (who may rely on factual representations of
the City and which opinion may be qualified by customary qualifications and exceptions),
addressed to the City, stating that:
(A) all conditions precedent provided for in this Resolution relating to
the issuance and delivery of such series of Additional Bonds have been complied
with, including any conditions precedent specified in this Section 4.01; and
(B) the series of Additional Bonds when issued and delivered by the
City will be valid and binding special, limited obligations of the City in accordance
with their terms and entitled to the benefits of and secured by this Resolution.
In connection with the issuance of a series of Additional Bonds, the City shall cause
amounts in the Reserve Account to be increased, from the proceeds of the Additional Bonds, from
amounts on hand and available therefor and/or from Surety Bonds, to an amount equal to the
Reserve Requirement after giving effect to the issuance of such Additional Bonds.
Any Additional Bonds shall be dated, shall bear interest at a rate or rates, shall have Stated
Maturities, and may be subject to redemption at such times and prices and on such terms and
conditions, all as may be provided by the Supplemental Resolution authorizing their issuance. All
Additional Bonds issued pursuant to Sections 4.02 and 4.03 shall be payable and secured ratably
and equally and on a parity with the Series 2020 Bonds and any Additional Bonds theretofore
issued, entitled to the same benefits and security of this Resolution.
4.02. Additional Bonds To Pay the Cost of Projects. Additional Bonds may be issued for
the purpose of providing funds, with any other funds available and committed therefor, for paying
the cost of one or more Projects and any costs of issuance or other expenses in connection with
such financing.
Prior to the execution and delivery of any series of Additional Bonds under this Section
4.02, there shall be filed with the City Clerk:
(i) A certificate executed by the Mayor and the City Finance Director stating:
(A) the estimated cost of the Projects being financed thereby, including an allowance for
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contingencies and all costs of issuance, fees, expenses and financing costs, (B) the amount,
if any, which will be required to be deposited in the Reserve Account in connection with
the issuance of the Additional Bonds, (C) the amount, if any, which will be required to be
credited to the Bond Account to pay interest on the Additional Bonds prior to collection of
sufficient Tax Increment available therefor, (D) the amount of Tax Increment received by
the City in the last completed Fiscal Year, (E) the amount of the maximum Principal and
Interest Requirements on the Outstanding Bonds and the Additional Bonds proposed to be
issued for any future Fiscal Year during the term of the Outstanding Bonds, and (F) that
the principal amount of such Additional Bonds is sufficient to provide for the payment of
all estimated costs of Projects to be financed thereby and credits to the Reserve Account
and the Bond Account as set forth above; and
(ii) a certificate executed by the Mayor and the City Finance Director stating
that:
(A) the Tax Increment received by the City in the last completed Fiscal
Year, which may in the City’s discretion be adjusted as provided in Section
4.02(ii)(B), was equal to at least 125% of the maximum Principal and Interest
Requirements for any future calendar year (during the term of the Outstanding
Bonds) with respect to the Outstanding Bonds and the Additional Bonds proposed
to be issued.
(B) For the purpose of calculating the adjustment referenced in Section
4.02(ii)(A), the Tax Increment received by the City in the last completed Fiscal
Year may be adjusted by adding 90% of any increase in Tax Increment that would
have resulted from applying the aggregate tax rates of the Taxing Bodies effective
for the last completed Fiscal Year to then-current taxable value of the District as of
the date of calculation, either (I) as certified by the Department of Revenue or (II)
as estimated by the City Finance Director, including any projects completed or
underway in the District, the taxable values of which are not yet included in the
actual taxable value (as defined in the Act) of the District. Estimates by the City
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Finance Director under Section 4.02(ii)(B)(II) shall be based on information
provided by the Department of Revenue and developers of projects in the District.
This Commission shall approve and confirm the findings and estimates set forth in the
above-described certificates in the Supplemental Resolution authorizing the issuance of the
Additional Bonds.
4.03. Additional Bonds for Refunding Purposes. Additional Bonds may be issued for the
purpose of providing funds, with any other funds available and committed therefor, for refunding
Outstanding Bonds and paying any expenses in connection with such financing. Such Additional
Bonds shall be designated substantially as the Bonds to be refunded, with the addition of the term
“refunding.”
Prior to the execution and delivery of any series of Additional Bonds under this Section
4.03, there shall be filed with the City Clerk:
(i) such documents as shall be required to show that provisions have been duly
made in accordance with this Resolution for the redemption of all of the Outstanding Bonds
to be refunded; and
(ii) (a) in the case of a gross defeasance, at the time of issuance and delivery of
the Additional Bonds that are refunding bonds, whether or not proceeds are deposited in
escrow, a report of an Independent Accountant or a certificate from an underwriter or from
the sole holder of the Bonds to be refunded (if applicable) to the effect that the proceeds
(excluding accrued interest but including any premium) of the Additional Bonds plus any
moneys to be withdrawn from the Bond Account or any other funds deposited for such
purpose, will be sufficient to pay the Redemption Price on the Outstanding Bonds to be
refunded, or (b) in the case of a net defeasance, a report of an Independent Accountant to
the effect that from such proceeds there shall be deposited in trust, Defeasance Obligations,
the principal of and the interest on which when due and payable (or redeemable at the
option of the holder thereof) will provide, together with any other moneys which shall have
been deposited in trust irrevocably for such purpose, but without reinvestment, sufficient
moneys to pay such principal, redemption premium and interest.
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If Additional Bonds are issued to refund Subordinate Obligations issued pursuant to
Section 4.04, the conditions for the issuance of Additional Bonds pursuant to Section 4.02 must
be satisfied in lieu of this Section 4.03.
4.04. Subordinate Obligations. Except as provided in Sections 4.01, 4.02 and 4.03, no
bonds, notes or other evidence of indebtedness of the City will be issued under or secured by the
provisions of this Resolution, and no bonds, notes or other evidence of indebtedness will be made
payable from the Bond Account, unless the pledge and appropriation of Tax Increment for the
payment and security of such bonds, notes or other evidence of indebtedness is expressly
subordinated to the pledge and appropriation made for the benefit and security of the Series 2020
Bonds and all Additional Bonds (“Subordinate Obligations”). In the event of the issuance of any
such Subordinate Obligations, the principal, premium, if any, and interest thereon will be made
payable from one or more additional accounts created within the Tax Increment Development
Account for that purpose, and the balance of funds at any time on hand in any such account(s) shall
be subject to the prior lien of the Bond Account and the Reserve Account, and shall be transferred
whenever needed to meet the current requirements of the Bond Account and Reserve Account set
forth in Sections 5.04 and 5.05.
Section 5
The Tax Increment Accounts.
5.01. Bond Proceeds and Tax Increment Pledged and Appropriated. The City hereby
establishes on its books and records three accounts designated as the Tax Increment Capital Project
Account, the Tax Increment Debt Service Account and the Tax Increment Development Account
(collectively, the “Tax Increment Accounts”). The Tax Increment Accounts shall be maintained
as separate and special bookkeeping accounts on the official books and records of the City until
all Bonds have been fully paid, or the City’s obligation with reference to all Bonds has been
discharged as provided in this Resolution.
All proceeds of Bonds and all other funds hereafter received or appropriated for purposes
of the Projects are appropriated to the Tax Increment Accounts (except amounts otherwise
appropriated in a Supplemental Resolution or received from Additional Bonds issued to refund
Outstanding Bonds pursuant to Section 4.03). All Tax Increment is irrevocably pledged and
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appropriated and shall be credited as received to the Tax Increment Debt Service Account.
Outstanding Bonds shall be secured by a first pledge of and lien on all of the Tax Increment and
all other moneys from time to time in the Tax Increment Accounts in the manner and to the extent
provided in this Section 5. The Tax Increment Accounts shall be subdivided into separate accounts
as designated and described in Sections 5.03 to 5.06.
5.02. Tax Increment Receipts. All Tax Increment received by the City and credited to the
Tax Increment Debt Service Account, as required in Section 5.01, shall be credited as received as
follows: (a) first, to the Interest Account, until the balance on hand in the Interest Account is at
least equal to all interest on Bonds due and payable from the Interest Account within the next six
full calendar months; (b) second, after any credit to the Interest Account required by the preceding
clause, to the Principal Account, until the balance on hand in the Principal Account is at least equal
to all principal of and premium, if any, on Bonds due and payable from the Principal Account
(including amounts due and payable on a Sinking Fund Payment Date) within the next twelve full
calendar months; (c) third, after any credit to the Interest Account or the Principal Account required
by the preceding clauses, to the Reserve Account until the balance on hand in the Reserve Account
is equal to the Reserve Requirement; and (d) fourth, after any credit to the Interest Account, the
Principal Account or the Reserve Account required by the preceding clauses, to the Tax Increment
Development Account.
5.03. Construction Account. For each Project there shall be a separate Construction
Account within the Tax Increment Capital Project Account, to be used only to pay allowed costs
as incurred, which under accepted accounting principles are costs of the particular Project,
including but not limited to payments due for work and materials performed and delivered under
construction contracts, architectural, engineering, inspection, supervision, fiscal and legal
expenses, the cost of lands and easements, interest accruing on Bonds during the period of
construction of a Project financed thereby and for a period of time thereafter authorized by the Act
and deemed necessary by this Commission, if and to the extent that the Interest Account is not
sufficient for payment of such interest, reimbursement of any loans or advances made from other
City funds, and all other expenses incurred in connection with the acquisition, construction and
financing of the Project, including costs of issuance of Bonds or Subordinate Obligations. To the
Construction Account shall be credited as received (i) all proceeds of Bonds issued to finance such
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Project, except amounts otherwise appropriated in a Supplemental Resolution or received from
Additional Bonds issued to refund Outstanding Bonds, (ii) all other funds appropriated by the City
for the Project, and (iii) all income received from the investment of the Construction Account.
Upon completion of any Project and payment of the costs thereof, the City may transfer any money
then remaining in the Construction Account for that Project to the Interest Account and, if money
is then remaining in the Construction Account, to the Principal Account.
5.04. Bond Account. The Bond Account is hereby established as a special account within
the Tax Increment Debt Service Account. There are hereby established within the Bond Account
two separate subaccounts, designated as the Interest Account and the Principal Account.
(a) Interest Account. There shall be credited to the Interest Account the
following amounts: (i) any amount specified in any Supplemental Resolution to be
credited to the Interest Account; (ii) from the Tax Increment as received by the City, the
amount specified in clause (a) of Section 5.02; and (iii) any amounts transferred from the
Construction Account as provided in Section 5.03.
On or before each Interest Payment Date, the City shall withdraw from the Interest
Account an amount sufficient to pay the interest coming due on the Bonds on such Interest
Payment Date, and shall use such amount to pay, or make provision with the Registrar for
the payment of, interest on the Bonds on such Interest Payment Date.
If on any Interest Payment Date the balance in the Interest Account is not sufficient
to pay the total amount of interest due on such Interest Payment Date, the City shall transfer
any money then on hand in the Tax Increment Development Account, the Reserve Account
or the Principal Account, in the order listed and in an amount equal to such deficiency, to
the Interest Account.
All income derived from the investment of amounts in the Interest Account shall
be credited as received to the Interest Account.
(b) Principal Account. There shall be credited to the Principal Account the
following amounts: (i) any amount specified in a Supplemental Resolution to be credited
to the Principal Account; (ii) from the Tax Increment as received by the City, the amount
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specified in clause (b) of Section 5.02; and (iii) any amounts transferred from the
Construction Account as provided in Section 5.03.
Amounts on hand in the Principal Account shall be used on any Interest Payment
Date to make up a deficiency in the Interest Account, if and to the extent required by the
third paragraph of subsection (a) hereof.
On or before each Principal Payment Date, the City shall withdraw from the
Principal Account an amount sufficient to pay the principal due on the Bonds on such
Principal Payment Date, and shall use such amount to pay, or make provision with the
Registrar for the payment of, principal of the Bonds on such Principal Payment Date.
If on any Principal Payment Date the balance in the Principal Account is not
sufficient to pay the total amount of principal due on such Principal Payment Date, the City
shall transfer any money then on hand in the Tax Increment Development Account or the
Reserve Account, in the order listed and in an amount equal to such deficiency, to the
Principal Account.
All income derived from the investment of amounts in the Principal Account shall
be credited as received to the Principal Account.
5.05. Reserve Account. (a) The Reserve Account is hereby established as a special
account within the Tax Increment Debt Service Account. There shall be credited to the Reserve
Account the following amounts: (i) the 2020 Surety Policy with a face value of $412,750, as
provided in Section 1.08; (ii) any amount specified in any Supplemental Resolution to be
credited to the Reserve Account; (iii) from the Tax Increment as received by the City, the
amount specified in clause (c) of Section 5.02; and (iv) any other amounts appropriated from
time to time to the Reserve Account.
If on any Interest Payment Date or on any Principal Payment Date there shall exist, after
the transfers thereto of any money then on hand in the Tax Increment Development Account a
deficiency in the Interest Account or Principal Account, the City shall transfer from the Reserve
Account to such account an amount equal to such deficiency.
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All income derived from the investment of amounts in the Reserve Account shall be
credited as received to the Reserve Account until such time as the balance in the Reserve Account
is equal to the Reserve Requirement, and thereafter all such investment income as received shall
be transferred to the Principal Account.
Money in the Reserve Account shall be used only to pay when due principal of, premium,
if any, and interest on Outstanding Bonds when the balance on hand in the Bond Account is
insufficient therefor; provided that on any date when the balance then on hand in the Bond Account
allocable to a series of Bonds (exclusive of any Surety Bond), plus the balance then on hand in the
Reserve Account allocable to the series of Bonds, is sufficient with other money available to pay
or discharge all Outstanding Bonds of that series and the interest accrued thereon in full, and the
balance thereafter on hand in the Reserve Account will be at least equal to the Reserve
Requirement for all Outstanding Bonds not to be discharged, it may be used for that purpose.
If at any time the balance in the Reserve Account exceeds the Reserve Requirement, the
City shall transfer such excess to the Interest Account or Principal Account. If no credit to the
Interest Account or Principal Account is required and the balance in each such account is at
required levels, the City may credit excess amounts to the Tax Increment Development Account.
Qualified Investments in the Reserve Account will be valued by the City on each July 1,
commencing July 1, 2021 (each a “Valuation Date”), on the basis of fair market value (which
valuation must take into account any accrued and unpaid interest). If on any Valuation Date, the
amount credited to the Reserve Account is less than ninety-five percent (95%) of the Reserve
Requirement as a result of a decline in the market value of investments credited to such account,
the City will transfer into the Reserve Account, solely from Tax Increment and subject to the prior
lien of the Bond Account, the amount necessary to restore the balance of the Reserve Account to
the Reserve Requirement, as described in Section 5.02.
If at any time the amount credited to the Reserve Account is less than one hundred percent
(100%) of the Reserve Requirement as a result of amounts in the Reserve Account having been
transferred to the Bond Account to pay debt service on any series of Bonds, the City will transfer
to the Reserve Account, solely from Tax Increment and subject to the prior lien of the Bond
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Account, the amount necessary to restore the balance of the Reserve Account to the Reserve
Requirement, as described in Section 5.02.
(b) The City may elect to satisfy in whole or in part the Reserve Requirement with a
Surety Bond. Any Surety Bond shall be valued at the amount available to be drawn thereon. At
any time the Reserve Account contains both cash and a Surety Bond, the cash shall be used first
to pay principal and interest due on the Bonds, to the extent money in the Bond Account is
insufficient therefor, before any demand is made on the Surety Bond. In the event the Reserve
Account contains more than one Surety Bond, any draw on the Surety Bonds to pay principal and
interest on the Bonds shall be made on a pro rata basis.
If the balance in the Reserve Account is less than the Reserve Requirement, amounts
transferred to the Reserve Account shall be used first to repay draws on Surety Bonds and to pay
expenses and interest accrued thereon, and second to replenish the cash in the Reserve Account
such that the cash plus the amounts available to be drawn on any Surety Bonds are equal to the
Reserve Requirement.
If funds are required to be drawn on the 2020 Surety Policy to pay principal or interest due
on Bonds, the City shall deliver to AGM as the issuer of the 2020 Surety Policy a demand for
payment under the terms of the 2020 Surety Policy at least five business days prior to the date on
which funds are required to make such payment, and the City shall maintain adequate records,
verified with AGM as the issuer of the 2020 Surety Policy, as to the amount available to be drawn
at any given time under the 2020 Surety Policy and as to amounts paid and owing to AGM under
the terms of the 2020 Surety Policy.
5.06. Tax Increment Development Account. There shall be credited to the Tax
Increment Development Account any and all Tax Increment remaining after the required credits
to the Bond Account and Reserve Account and any investment income and other moneys in any
of the accounts within the Tax Increment Accounts in excess of the requirements of said
accounts and which the City determines in its discretion to transfer to the Tax Increment
Development Account. Money from time to time on hand in the Tax Increment Development
Account shall be transferred to the Bond Account and Reserve Account as provided by
Sections 5.04 and 5.05 and may be used for any of the following purposes and not otherwise:
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(a) to be transferred to the Construction Account to pay costs authorized to be
paid therefrom;
(b) to pay administrative costs of the City and the District and costs incurred in
connection with urban renewal projects (as defined in the Act) within the District as
authorized by the Act (including any loans or advances therefor made from other City
funds);
(c) to pay, redeem, discharge or otherwise secure Subordinate Obligations in
accordance with the provisions of this Resolution or any Supplemental Resolution;
(d) to redeem or discharge Bonds prior to their Stated Maturities in accordance
with this Resolution or any Supplemental Resolution or to purchase Bonds on the open
market;
(e) to make payments of arbitrage rebate to the United States of America
pursuant to Section 148(f) of the Code in respect of any series of Bonds; and
(f) to pay other Taxing Bodies a portion of the annual Tax Increment received
by the City, pursuant to an agreement with respect thereto as authorized by the Act;
provided, however, no such agreement shall require or permit the City to remit to any other
Taxing Bodies any portion of the annual Tax Increment received in a Fiscal Year and on
deposit in the Tax Increment Development Account unless (1) the Bond Account is funded
as described above, (2) the balance in the Reserve Account as of the date of the remittance
is not less than the Reserve Requirement and no amounts are owing to a provider of a
Surety Bond; and (3) there is no default under the provisions of this Resolution as
evidenced by a certificate of the City Finance Director filed with the City Clerk as of the
date of remittance.
5.07. Investments. The City Finance Director shall cause all moneys from time to time
in the Tax Increment Accounts to be deposited as received with one or more depository banks
duly qualified in accordance with the provisions of Montana Code Annotated, Section 7-6-201,
as amended, and shall cause the balances in such accounts, except any part thereof covered by
federal deposit insurance, to be secured by the pledge of bonds or securities of the kinds required
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by law, and no money shall at any time be withdrawn from such deposit accounts except for the
purposes of the Tax Increment Accounts as defined and authorized by this Resolution. The
funds to the credit of the several accounts within the Tax Increment Accounts may be
commingled in one or more deposit accounts. The balance on hand in any of the accounts of the
Tax Increment Accounts may at any time be invested and reinvested in Qualified Investments as
provided below, maturing and bearing interest payable at the times and in the amounts estimated
to be required to provide cash when needed for the purposes of the respective accounts; provided
that the Reserve Account and Tax Increment Development Account shall be invested in
Qualified Investments maturing not later than five years from the date of investment. Income
from the investment of the moneys in the various accounts shall be credited thereto. Subject to
the provisions of law now or hereafter controlling investment of such funds, money on hand in
any of the accounts of the Tax Increment Accounts may be invested in any of the following
Qualified Investments, but no others:
(a) direct obligations of or obligations guaranteed by the United States of
America;
(b) bank time deposits or certificates of deposit secured by obligations and
securities described in clause (a) above; and
(c) the short-term investment pool administered by the Board of Investments of
the State or any successor investment pool created pursuant to Montana law.
Section 6
Continuing Disclosure.
The Commission hereby approves the Continuing Disclosure Undertaking of the City
substantially in the form of the attached Exhibit B and authorizes the Mayor and the City Manager,
or in the absence of either of them or in the event of their inability to sign, their designees, to
execute and deliver on behalf of the City contemporaneously with the date of issuance and delivery
of the Series 2020 Bonds the Continuing Disclosure Undertaking, with such changes as may be
necessary or appropriate. The signatures of any two authorized officials of the City are adequate
to cause the Continuing Disclosure Undertaking to be binding and enforceable on the City.
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Section 7
Tax Covenants and Certifications.
7.01. Use of the Projects. The 2020 Project will be owned and operated by the City. No
user of the 2020 Project is granted any concession, license or special arrangement with respect to
the same. The City shall not enter into any lease, use or other agreement or arrangement with any
non-governmental Person relating to the use of the 2020 Project or security for the payment of the
Series 2020 Bonds which might cause the Series 2020 Bonds to be considered “private activity
bonds” or “private loan bonds” within the meaning of Section 141 the Code. No “impermissible
agreement,” as defined in Section 1.141-4(e)(4)(ii) of the Regulations, has been or will be entered
into by the Commission in respect of the Tax Increment or otherwise to secure the Series 2020
Bonds.
7.02. General Covenant. The City covenants and agrees with the Owners from time to
time of the Series 2020 Bonds that it will not take or permit to be taken by any of its officers,
employees or agents any action which would cause the interest on the Series 2020 Bonds to become
includable in gross income for federal income tax purposes under the Code and applicable
Regulations, and covenants to take any and all actions within its powers to ensure that the interest
on the Series 2020 Bonds will not become includable in gross income for federal income tax
purposes under the Code and the Regulations.
7.03. Arbitrage Certification. The Mayor, the City Manager and the City Clerk being the
officers of the City charged with the responsibility for issuing the Series 2020 Bonds pursuant to
this Resolution, are authorized and directed to execute and deliver to the Original Purchaser a
certificate in accordance with the provisions of Section 148 of the Code, and Section 1.148-2(b)
of the Regulations, stating that on the basis of facts, estimates and circumstances in existence on
the date of issue and delivery of the Series 2020 Bonds, it is reasonably expected that the proceeds
of the Series 2020 Bonds will not be used in a manner that would cause the Series 2020 Bonds to
be “arbitrage bonds” within the meaning of Section 148 of the Code and the Regulations.
7.04. Arbitrage Rebate. The City acknowledges that the Series 2020 Bonds are subject to
the rebate requirements of Section 148(f) of the Code. The City covenants and agrees to retain
such records, make such determinations, file such reports and documents and pay such amounts at
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such times as are required under said Section 148(f) and applicable Regulations to preserve the
exclusion of interest on the Series 2020 Bonds from gross income for federal income tax purposes,
unless or to the extent that the Series 2020 Bonds qualify for the exception from the rebate
requirement under Section 148(f)(4)(B) of the Code and no “gross proceeds” of the Series 2020
Bonds (other than amounts constituting a “bona fide debt service fund”) arise during or after the
expenditure of the original proceeds thereof. In furtherance of the foregoing, the Mayor, the
Manager and the City Clerk are hereby authorized and directed to execute a Rebate Certificate,
substantially in the form to be prepared by Bond Counsel, and the City hereby covenants and
agrees to observe and perform the covenants and agreements contained therein, unless amended
or terminated in accordance with the provisions thereof.
7.05. Information Reporting. The City shall file with the Secretary of the Treasury, not
later than November 15, 2020, a statement concerning the Series 2020 Bonds containing the
information required by Section 149(e) of the Code.
Section 8
Other Covenants of City.
8.01. Punctual Payment. The City will duly and punctually pay or cause to be paid the
principal of, premium, if any, and interest on the Bonds in accordance with the terms of this
Resolution and any applicable Supplemental Resolution and of the Bonds, and it will faithfully
observe and perform all of the conditions, covenants and requirements of this Resolution and all
Supplemental Resolutions and of the Bonds. Nothing herein contained shall prevent the City from
making advances of its own moneys however derived to any of the uses or purposes referred to
herein, nor shall anything herein be deemed or constitute a pledge or appropriation of funds or
assets of the City other than those expressly pledged or appropriated hereby. The City further
covenants that it will promptly deposit or cause to be deposited all Tax Increment it receives into
the Tax Increment Debt Service Account, as set forth in Section 5.02.
8.02. Accumulation of Claims of Interest. In order to prevent any accumulation of claims
for interest after maturity, the City will not, directly or indirectly, extend or consent to the extension
of the time for the payment of any claim for interest on any of the Bonds and will not, directly or
indirectly, be a party to or approve any such arrangements by purchasing or funding said claims
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for interest or in any other manner. In case any such claim for interest shall be extended or funded,
whether or not with the consent of the City, such interest so extended or funded shall not be
entitled, in case of default hereunder, to the benefits of this Resolution, except subject to the prior
payment in full of the principal of all of the Bonds then outstanding and of all claims for interest
which shall not have been so extended or funded.
8.03. Against Encumbrances. The City will not encumber, pledge or place any charge or
lien upon any of the Tax Increment superior to or on a parity with the pledge and lien herein created
for the benefit of the Bonds.
8.04. Books and Accounts; Financial Statements. The City will keep, or cause to be kept,
proper books of record and accounts, separate from all other records and accounts of the City, in
which complete and correct entries shall be made of all transactions relating to the Tax Increment
and the Tax Increment Accounts. Such books of record and accounts shall be at all times during
business hours subject to the inspection of the Owners of not less than ten percent (10%) of the
principal amount of Outstanding Bonds, or their representatives authorized in writing.
8.05. Further Assurances. The City will adopt, make, execute and deliver any and all such
further resolutions, instruments and assurances as may be reasonably necessary or proper to carry
out the intention or to facilitate the performance of this Resolution, and for the better assuring and
confirming unto the Owners of the rights and benefits provided in this Resolution.
8.06. Amendment of Ordinance. Except to authorize additional Projects, the City will not
amend or modify the Ordinance or reduce the size of the District if an effect thereof will be to
materially and adversely affect the security of the Outstanding Bonds.
8.07. Increase in Base Taxable Value. The City shall not increase the “base taxable value”
of the District pursuant to Section 7-15-4287 of the Act so long as any Bonds are Outstanding
unless remaining Tax Increment following such increase will be not less than 200% of the
maximum Principal and Interest Requirements of all Outstanding Bonds.
8.08. Pledge of Replacement Revenues. In the event the Constitution or laws of the State
are amended to abolish or substantially reduce or eliminate real or personal property taxation and
State law then or thereafter provides to the City an alternate or supplemental source or sources of
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revenue specifically to replace or supplement reduced or eliminated historical Tax Increment, then
the City pledges, and covenants to appropriate annually, subject to the limitations of then
applicable law, to the Bond Account from such alternate or supplemental revenues an amount that
will, with money on hand in the Bond Account or available to be transferred to the Bond Account
during such Fiscal Year, be sufficient to pay the principal of, premium, if any, and interest on the
Outstanding Bonds payable in that Fiscal Year.
8.09. Owners’ Rights. No Owner of any Bond issued and secured under the provisions of
this Resolution shall have the right to institute any proceeding, judicial or otherwise, for the
enforcement of the covenants herein contained, without the written concurrence of the Owners of
not less than 25% in aggregate principal amount of all Outstanding Bonds; but the Owners of such
aggregate principal amount of Outstanding Bonds may, either at law or in equity, by suit, action
or other proceedings, protect and enforce the rights of all Owners of Bonds and compel the
performance of any and all of the covenants required herein to be performed by the City and its
officers and employees. The Owner of a majority in aggregate principal amount of all Outstanding
Bonds shall have the right to direct the time, method and place of conducting any proceedings for
any remedy available to the Owners or the exercise of any power conferred on them, and the right
to waive a default in the performance of any such covenant, and its consequences, except a default
in the payment of the principal of or interest on any Bond when due. Nothing herein shall impair
the absolute and unconditional right of the Owner of each Bond to receive payment of the principal
of and interest on any Bond as such principal and interest respectively become due, and to institute
suit for the enforcement of any such payment. In the event of default in any such payment, any
court having jurisdiction of the action may appoint a receiver to administer the Tax Increment
Accounts and to collect and segregate and apply the Tax Increment and other revenues pledged
thereto as provided by this Resolution or any Supplemental Resolution and the Act.
Section 9
Supplemental Resolutions.
9.01. General. Notwithstanding Section 9.02, the City reserves the right to adopt
Supplemental Resolutions to this Resolution from time to time and at any time, for the purpose of
curing any ambiguity or of curing, correcting or supplementing any defective provision contained
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herein, or of making such provisions with regard to matters or questions arising hereunder as the
City may deem necessary or desirable and not inconsistent with this Resolution, and which shall
not adversely affect the interests of the Owners of Bonds issued hereunder, or for the purpose of
adding to the covenants and agreements herein contained, or to the Tax Increment herein pledged,
other covenants and agreements thereafter to be observed and additional revenues or income
thereafter appropriated to the Tax Increment Accounts, or for the purpose of surrendering any right
or power herein reserved to or conferred upon the City, or for the purpose of authorizing the
creation and issuance of a series of Additional Bonds, as provided in and subject to the conditions
and requirements of Section 4. Any such Supplemental Resolution may be adopted without the
consent of the Owner of any of the Bonds issued hereunder.
9.02. Consent of Owners. With the consent of the Owners of a majority in principal
amount of Outstanding Bonds affected thereby as provided in Section 9.04, the City may from
time to time and at any time adopt a Supplemental Resolution for the purpose of amending this
Resolution by adding any provisions hereto or changing in any manner or eliminating any of the
provisions hereof or of any Supplemental Resolution, except that no Supplemental Resolution shall
be adopted at any time without the consent of the Owners of all Outstanding Bonds affected
thereby, if it would extend the time of payment of interest thereon, would reduce the amount of
the principal thereof or redemption premium thereon, would give to any Bond or Bonds any
privilege over any other Bond or Bonds (except for the privilege accorded Bonds over Subordinate
Obligations), would reduce the sources of Tax Increment or other revenues or income appropriated
to the Tax Increment Accounts, or would reduce the percentage in principal amount of such Bonds
required to authorize or consent to any such Supplemental Resolution.
9.03. Notice. Notice of a Supplemental Resolution to be adopted pursuant to Section 9.02
shall be mailed by first-class mail, postage prepaid, to the Owners of all Outstanding Bonds at their
addresses appearing in the Bond Register and shall become effective only upon the filing of written
consents with the City Clerk, signed by the Owners of the requisite aggregate principal amount of
Outstanding Bonds affected thereby. Any written consent to the Supplemental Resolution may be
embodied in and evidenced by one or any number of concurrent written instruments of
substantially similar tenor signed by Owners thereof in person or by agent duly appointed in
writing, and shall become effective when delivered to the City Clerk. Any consent by the Owner
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of any Bond shall bind that Owner and every future Owner of the same Bond with respect to any
Supplemental Resolution adopted by the City pursuant to such consent; provided than any Owner
may revoke his consent with reference to any Bond by written notice received by the City Clerk
before the Supplemental Resolution has become effective. In the event that unrevoked consents
of the Owners of the requisite aggregate principal amount of Bonds have not been received by the
City Clerk within one year after the publication of notice of the Supplemental Resolution, the
Supplemental Resolution and all consents theretofore received shall be of no further force and
effect.
9.04. Manner of Consent. Proof of the execution of any consent, or of a writing appointing
any agent to execute the same, shall be sufficient for any purpose of this Resolution and shall be
conclusive in favor of the City if made in the manner provided in this Section 9.04. The fact and
date of the execution by any Person of any such consent may be proved by the affidavit of a witness
of such execution or by the certification of any notary public or other officer authorized by law to
take acknowledgment of deeds, certifying that the Person signing it acknowledged to him the
execution thereof. The fact and date of execution of any such consent may also be proved in any
other manner which the City may deem sufficient; but the City may nevertheless, in its discretion,
require further proof in cases where it deems further proof desirable. The ownership of any Bonds
shall be proved by the Bond Register.
Section 10
Defeasance or Discharge.
10.01. General. When the liability of the City on all Bonds issued under and secured by
this Resolution and all interest thereon has been discharged as provided in this Section 10, all
pledges, covenants and other rights granted by this Resolution to the Owners of such Bonds shall
cease.
10.02. Maturity. The City may discharge its liability with reference to all Bonds and
interest thereon which are due on any date by depositing with the Registrar on or before the date a
sum sufficient for the payment thereof in full; or if any Bond or interest thereon shall not be paid
when due, the City may nevertheless discharge its liability with reference thereto by depositing
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with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date
of such deposit.
10.03. Redemption. The City may also discharge its liability with reference to any Bonds
which are called for redemption on any date in accordance with their terms, by depositing with the
Registrar on or before that date an amount equal to the principal, premium, if any, and interest
which are then due thereon; provided that notice of such redemption has been duly given or
irrevocably provided for as provided in this Resolution.
10.04. Escrow. The City may also at any time discharge its liability in its entirety with
reference to any Bond subject to the provisions of law now or hereafter authorizing and regulating
such action, by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent
for this purpose, cash or Defeasance Obligations which are authorized by law to be so deposited,
bearing interest payable at such times and at such rates and maturing on such dates as shall be
required, without reinvestment, to provide funds sufficient to pay all principal, premium, if any,
and interest to become due on such Bond at its Stated Maturity or, if such Bond is prepayable and
notice of redemption thereof has been given or irrevocably provided for as provided in this
Resolution, to such earlier Redemption Date.
Section 11
Repeals and Effective Date.
11.01. Repeal. All provisions of other resolutions and other actions and proceedings of
the City and this Commission that are in any way inconsistent with the terms and provisions of
this Resolution are repealed, amended and rescinded to the full extent necessary to give full force
and effect to the provisions of this Resolution.
11.02. Effective Date. This Resolution shall take effect immediately upon its passage and
adoption by this Commission.
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PASSED, ADOPTED, AND APPROVED by the City Commission of the City of
Bozeman, Montana, this 6th day of July, 2020.
___________________________________
CHRIS MEHL Mayor ATTEST:
___________________________________ MIKE MAAS City Clerk
APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney
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CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE
I, the undersigned, being the duly qualified and acting recording officer of the City of
Bozeman, Montana (the “City”), hereby certify that the attached resolution is a true copy of
Resolution No. 5131, entitled: “RESOLUTION RELATING TO $6,500,000 TAX
INCREMENT URBAN RENEWAL REVENUE BONDS (BOZEMAN MIDTOWN
URBAN RENEWAL DISTRICT), SERIES 2020; AUTHORIZING THE ISSUANCE AND
PRESCRIBING THE FORM AND TERMS THEREOF” (the “Resolution”), on file in the
original records of the City in my legal custody; that the Resolution was duly adopted by the City
Commission of the City at a regular meeting on July 6, 2020, and that the meeting was duly held
by the City Commission and was attended throughout by a quorum, pursuant to call and notice of
such meeting given as required by law; and that the Resolution has not as of the date hereof been
amended or repealed.
I further certify that, upon vote being taken on the Resolution at said meeting, the
following Commission Members voted in favor thereof: Mehl, Andrus, Pomeroy
; voted against
the same: ; abstained from voting
thereon: ; or were absent: .
WITNESS my hand officially this 6th day of July, 2020.
(SEAL) MICHAEL MAAS City Clerk
Cunningham, Wallner
N/A
N/A N/A
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EXHIBIT A
UNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF GALLATIN
CITY OF BOZEMAN, MONTANA
TAX INCREMENT URBAN RENEWAL REVENUE BONDS
(BOZEMAN MIDTOWN URBAN RENEWAL DISTRICT), SERIES 2020
No. _____ $__________
Rate Maturity Date Date of Original Issue CUSIP
% _________, 20__ July 9, 2020 103707 [__]
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: DOLLARS AND NO/100
FOR VALUE RECEIVED, CITY OF BOZEMAN, GALLATIN COUNTY, STATE OF MONTANA (the “City”), acknowledges itself to be specially indebted and hereby promises to pay to the registered owner named above or registered assigns the principal amount specified above on
the maturity date specified above or, if this Bond is prepayable as stated below, on an earlier date on which this Bond shall have been duly called for redemption, with interest hereon from the date of original issue hereof, or such later date to which interest hereon has been paid or duly provided for, until the principal amount is paid or until this Bond, if redeemable, has been duly called for redemption, at the annual rate specified above. Principal of this Bond is payable upon presentation
and surrender hereof to U.S. Bank National Association, Salt Lake City, Utah, as registrar, transfer agent and paying agent, or its successor designated under the Resolution described herein (the “Registrar”) at its operations center in St. Paul, Minnesota. The interest on this Bond shall be payable on January 1 and July 1 in each year, commencing January 1, 2021. Interest on the Series 2020 Bonds shall be payable to the owners of record thereof as such appear on the Bond Register
as of the close of business on the 15th day of the month immediately preceding each interest payment date, whether or not such day is a Business Day. Interest on, and upon presentation and surrender thereof, the principal of each Bond shall be payable by check or draft issued by the Registrar described herein.
The principal of and interest on this Bond are payable in lawful money of the United States
of America. Interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months.
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Notwithstanding any other provisions of this Bond, so long as this Bond is registered in the
name of Cede & Co., as nominee of The Depository Trust Company, or in the name of any other nominee of The Depository Trust Company or other securities depository, the Registrar shall pay all principal of and interest on this Bond, and shall give all notices with respect to this Bond, only to Cede & Co. or other nominee in accordance with the operational arrangements of The Depository Trust Company or other securities depository as agreed to by the City.
This Bond is one of a duly authorized issue of Bonds of the City designated as “Tax Increment Urban Renewal Revenue Bonds (Bozeman Midtown Urban Renewal District)” (collectively, the “Bonds”), issued and to be issued in one or more series under, and all equally and ratably secured by, Resolution No. [____], adopted by the City Commission on July 6, 2020 (as amended or supplemented in accordance with the provisions thereof, the “Resolution”), to
which Resolution, copies of which are on file with the City, reference is hereby made for a description of the nature and extent of the security, the respective rights thereunder of the Owners of the Bonds and the City and the terms upon which the Bonds are to be issued and delivered. This Bond is one of the series specified in its title, issued in the aggregate principal amount of $6,500,000 (the “Series 2020 Bonds”), all of like date of original issue and tenor except as to serial
number, denomination, date, interest rate, maturity date and redemption privilege. The Series 2020 Bonds are issued by the City for the purpose of financing a portion of the costs of an urban renewal project (as defined in the Act) within the City’s Bozeman Midtown Urban Renewal District (the “District”), and paying costs of issuing the Series 2020 Bonds, including municipal bond insurance and debt service reserve fund insurance premiums. Capitalized terms used herein but not otherwise
defined shall have the respective meanings given such terms in the Resolution.
The Series 2020 Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Montana, particularly Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended (the “Act”), and pursuant to the Resolution. The Bonds are payable solely, equally and ratably from Tax Increment received by the City and resulting from the extension of
ad valorem taxes levied by certain Taxing Bodies against the incremental taxable value of taxable property within the District pursuant to the Act, except that under certain conditions as described in the Resolution, the Bonds may be payable from replacement revenues, if any, provided in the event of the abolition or substantial elimination of property taxation in Montana.
The Bonds are not general obligations of the City and the City’s general credit and taxing powers are not pledged to the payment of the Bonds or the interest thereon. The Bonds shall not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitations.
The Series 2020 Bonds with Stated Maturities on or after July 1, 2035 are subject to redemption on July 1, 2030 and any date thereafter, at the option of the City, in whole or in part,
and if in part from such Stated Maturities and in such principal amounts as the City may designate in writing to the Registrar (or, if no designation is made, in inverse order of maturities and within a maturity in $5,000 principal amounts selected by the Registrar by lot or other manner as directed by the City), at a Redemption Price equal to the principal amount thereof and interest accrued to the Redemption Date, without premium.
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The Series 2020 Bonds having Stated Maturities in 2035, 2040 and 2044 are subject to
mandatory sinking fund redemption on July 1 in the respective years and the respective principal amounts set forth below in $5,000 principal amounts selected by the Registrar, by lot or other manner as directed by the City, at a Redemption Price equal to the principal amount thereof to be redeemed plus interest accrued to the Redemption Date:
2035 Term Bonds 2040 Term Bonds 2044 Term Bonds
July 1
Sinking Fund Payment Amount July 1
Sinking Fund Payment Amount July 1
Sinking Fund Payment Amount 2031 $245,000 2036 $300,000 2041 $365,000 2032 255,000 2037 310,000 2042 375,000 2033 265,000 2038 325,000 2043 385,000 2034 275,000 2039 335,000
If the Term Bonds having a Stated Maturity in 2035, 2040 and 2044 are not previously purchased by the City in the open market or prepaid, $290,000, $350,000 and $400,000, respectively, in principal amount of such Term Bonds would remain to mature in 2035, 2040 and 2044, respectively. The principal amount of such Term Bonds required to be redeemed on the above Sinking Fund Payment Dates shall be reduced by the principal amount of such Term Bonds
theretofore redeemed at the option of the City and as to which the City has not previously applied amounts to reduce the principal amount of such Term Bonds on a Sinking Fund Payment Date.
As provided in the Resolution and subject to certain limitations set forth therein, this Series 2020 Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by his attorney duly authorized in writing, upon surrender
hereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his attorney; and may also be surrendered in exchange for Series 2020 Bonds of other authorized denominations. Upon any such transfer or exchange, the City will cause a new Series 2020 Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same
date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange.
The City and the Registrar may deem and treat the Person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar shall be
affected by any notice to the contrary.
Assured Guaranty Municipal Corp. (“AGM”), New York, New York, has delivered its municipal bond insurance policy (the “Policy”) with respect to the scheduled payments due of principal of and interest on this Bond to the Registrar. Said Policy is on file and available for inspection at the principal office of the Registrar and a copy thereof may be obtained from AGM
or the Registrar. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. The owner of this Bond acknowledges and consents to the subrogation rights of AGM as more fully set forth in the Policy.
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IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required
by the Constitution and laws of the State of Montana and ordinances and resolutions of the City to be done, to exist, to happen and to be performed in order to make this Series 2020 Bond a valid and binding special, limited obligation of the City in accordance with its terms have been done, do exist, have happened and have been performed as so required; that this Series 2020 Bond has been issued by the City in connection with an urban renewal project (as defined in the Act); that the
City, in and by the Resolution, has validly made and entered into covenants and agreements with and for the benefit of the Owners from time to time of all Bonds issued thereunder, including covenants that it will pledge, appropriate and credit the Tax Increment to the Tax Increment Debt Service Account of the City; that Additional Bonds may be issued and made payable from the Tax Increment Debt Service Account on a parity with the Series 2020 Bonds upon certain conditions
set forth in the Resolution, but no obligation will be otherwise incurred and made payable from the Tax Increment, unless the lien thereof shall be expressly made subordinate to the lien of the Series 2020 Bonds on the Tax Increment; that all provisions for the security of the Owners of the Bonds as set forth in the Resolution will be punctually and faithfully performed as therein stipulated; and that the issuance of the Series 2020 Bonds does not cause the obligations of the
City to exceed any constitutional or statutory limitation of indebtedness.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon shall have been executed by the Registrar by the manual signature of one of its authorized representatives.
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IN WITNESS WHEREOF, the City of Bozeman, Montana, by its City Commission, has
caused this Bond to be executed by the facsimile signatures of the Mayor, the City Manager and the City Clerk, and by a printed facsimile of the official seal of the City.
CITY OF BOZEMAN, MONTANA
(Facsimile Signature) MAYOR
(Facsimile Signature) (Facsimile Seal) CITY MANAGER
(Facsimile Signature) CITY CLERK Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned herein.
U.S. BANK NATIONAL ASSOCIATION, as Registrar, Transfer Agent, and Paying Agent
By Authorized Signature
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The following abbreviations, when used in the inscription on the face of this Bond, shall be
construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants UTMA............Custodian..................... in common (Cust) (Minor)
TEN ENT -- as tenants by the entireties
under Uniform Gifts to
JT TEN -- as joint tenants Minor Act............................................ with right of (State) survivorship and not as tenants in
common
___________________________ Additional abbreviations may also be used.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto _____
___________________________ the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints _____________________ attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises.
Dated: ___________
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:
NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration, enlargement or any change whatsoever.
SIGNATURE GUARANTEED
Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in STAMP or such other “signature guaranty program” as may be determined by the Registrar in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
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EXHIBIT B
$6,500,000 Tax Increment Urban Renewal Revenue Bonds (Bozeman Midtown Urban Renewal District), Series 2020 City of Bozeman, Montana
CONTINUING DISCLOSURE UNDERTAKING
This CONTINUING DISCLOSURE UNDERTAKING is made by the City of Bozeman, Montana (the “City”) in connection with the issuance and delivery by the City of its $6,500,000 Tax Increment Urban Renewal Revenue Bonds (Bozeman Midtown Urban Renewal District), Series 2020 (the “Bonds”), as of this 9th day of July, 2020.
(a) Purpose and Beneficiaries. To provide for the public availability of certain
information relating to the Bonds and the security therefor and to permit participating underwriters in the primary offering of the Bonds to comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Rule”), the City hereby makes the following covenants and agrees, for the benefit of the Owners (as hereinafter defined) from time to time of the outstanding Bonds, to
provide annual reports of specified information and notice of the occurrence of certain events to the Municipal Securities Rulemaking Board (“MSRB”) through its Electronic Municipal Market Access system website (“EMMA”), as hereinafter described. The City is the only “obligated person” in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made.
If the City fails to comply with this Continuing Disclosure Undertaking, any person aggrieved thereby, including the Owners of any outstanding Bonds, may take whatever action at law or in equity may appear necessary or appropriate to enforce performance and observance of this Continuing Disclosure Undertaking, including an action for a writ of mandamus or specific performance. Direct, indirect, consequential and punitive damages shall not be recoverable for
any default hereunder. Notwithstanding anything to the contrary contained herein, in no event shall a default under this Continuing Disclosure Undertaking constitute a default under the Bonds or under any other provision of the Resolution.
As used herein, “Owner” means, in respect of a Bond, the registered owner or owners thereof appearing in the bond register maintained by the Registrar or any Beneficial Owner (as
hereinafter defined) thereof, if such Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used herein, “Beneficial Owner” means, in respect of a Bond, any person or entity that (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds through nominees, depositories or other
intermediaries), or (ii) is treated as the owner of the Bond for federal income tax purposes.
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(b) Information To Be Disclosed. The City will provide, in the manner set forth in
subsection (c) hereof, either directly or indirectly through an agent designated by the City, the following information at the following times:
(1) on or before 270 days after the end of each fiscal year of the City, commencing with the fiscal year ending June 30, 2020, the following financial information and operating data in respect of the City (the “Disclosure Information”):
(A) the audited financial statements of the City for such fiscal year, accompanied by the audit report and opinion of the accountant or government auditor relating thereto, as permitted or required by the laws of the State of Montana, containing a balance sheet as of the end of such fiscal year and a statement of operations, changes in fund balances and cash flows for the fiscal
year then ended, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under Montana law, as in effect from time to time or, if and to the extent such financial
statements have not been prepared in accordance with such generally accepted accounting principles for reasons beyond the reasonable control of the City, noting the discrepancies therefrom and the effect thereof; and
(B) to the extent not included in the financial statements referred to in paragraph (A) above, information of the type set forth below:
(1) information about the incremental value and total taxable value of taxable property in the District and the amount of Tax Increment received for such fiscal year in a format similar to the table in the Official Statement relating to the Bonds (the “Official Statement”) under the heading “Table of Historical Tax Increment Receipts;”
(2) mill levies in the District for such fiscal year in a format similar to the table in the Official Statement under the heading “Table of Historical Level of Mills;”
(3) information regarding the types of property in the District in a format similar to the table in the Official Statement under the heading
“Table of Properties in the TIF District;”
(4) a list of the major taxpayers in the District for such fiscal year in a format similar to the table in the Official Statement under the heading “Table of Largest 10 Taxpayers in the District;” and
(5) debt service coverage for such fiscal year.
Notwithstanding anything herein, if the audited financial statements are not available by the date specified, the City shall provide on or before such date unaudited financial statements in the format required for the audited financial statements as part of
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the Disclosure Information and, within ten days after the receipt thereof, the City shall
provide the audited financial statements.
Any or all of the Disclosure Information may be incorporated, if it is updated as required hereby, by reference from other documents, including official statements, which have been submitted to the MSRB in the manner set forth in subsection (c) hereof. The City shall clearly identify the Disclosure Information in each document so incorporated
by reference.
If any part of the Disclosure Information can no longer be generated because the operations of the City have materially changed or been discontinued, such Disclosure Information need no longer be provided if the City includes in the Disclosure Information a statement to such effect; provided, however, if such operations have been replaced by
other City operations in respect of which data is not included in the Disclosure Information and the City determines that certain specified data regarding such replacement operations would be material (as hereinafter defined), then, from and after such determination, the Disclosure Information shall include such additional specified data regarding the replacement operations.
If the Disclosure Information is changed or this Continuing Disclosure Undertaking is amended, then the City shall include in the next Disclosure Information to be delivered pursuant to this Continuing Disclosure Undertaking, to the extent necessary, an explanation of the reasons for the amendment and the effect of any change in the type of financial information or operating data provided.
(2) In a timely manner not in excess of ten business days, notice of the occurrence of any of the following events:
(A) principal and interest payment delinquencies;
(B) non-payment related defaults, if material;
(C) unscheduled draws on debt service reserves reflecting financial
difficulties;
(D) unscheduled draws on credit enhancements reflecting financial difficulties;
(E) substitution of credit or liquidity providers, or their failure to perform;
(F) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds;
(G) modifications to rights of holders of the Bonds, if material;
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(H) bond calls, if material, and tender offers;
(I) defeasances;
(J) release, substitution or sale of property securing repayment of the Bonds, if material;
(K) rating changes;
(L) bankruptcy, insolvency, receivership, or similar event of the City;
(M) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;
(N) appointment of a successor or additional trustee or the change of name of a trustee, if material;
(O) incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security
holders, if material; and
(P) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the City, any of which reflect financial difficulties.
An event is “material” if it is an event as to which a substantial likelihood exists
that a reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a Bond or, if not disclosed, would significantly alter the total information otherwise available to an investor from the Official Statement, information disclosed in this Bond Resolution or information generally available to the public. Notwithstanding the foregoing sentence, an event is also “material” if it is an event that would be deemed
material for purposes of the purchase, holding or sale of a Bond within the meaning of applicable federal securities laws, as interpreted at the time of discovery of the occurrence of the event.
For purposes of paragraphs (O) and (P) above, the term “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or
pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of either (i) or (ii). A “financial obligation” does not include municipal securities for which a final official statement has been provided to the MSRB consistent with the Rule.
(3) In a timely manner, notice of the occurrence of any of the following events or
conditions:
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(A) the failure of the City to provide the Disclosure Information
described above under paragraph (b)(1) above at the time specified thereunder;
(B) the amendment or supplementing of this Continuing Disclosure Undertaking, together with a copy of such amendment or supplement and any explanation provided by the City; and
(C) any change in the fiscal year of the City.
(c) Manner of Disclosure. The City agrees to make available the information described in subsection (b) hereof to the MSRB via EMMA or in a manner as may be otherwise proscribed by the MSRB consistent with the Rule. All documents provided to the MSRB shall be accompanied by identifying information as prescribed by the MSRB.
(d) Term; Amendments; Interpretation.
(1) This Continuing Disclosure Undertaking shall remain in effect so long as any Bonds are outstanding.
(2) This Continuing Disclosure Undertaking (and the form and requirements of the Disclosure Information) may be amended or supplemented by the City from time to time, without notice to (except as provided in paragraph (b)(3) hereof) or the consent of
the Owners of any Bonds, by a resolution of this Commission filed in the office of the recording officer of the City accompanied by an opinion of Bond Counsel, who may rely on certificates of the City and others and the opinion may be subject to customary qualifications, to the effect that the Continuing Disclosure Undertaking (and the form and requirements of the Disclosure Information), as so amended or supplemented, will
comply with the provisions of paragraph (b)(5) of the Rule, assuming that such provisions apply to the Bonds.
If the Disclosure Information is so amended, the City agrees to provide, contemporaneously with the effectiveness of such amendment, an explanation of the reasons for the amendment and the effect, if any, of the change in the type of financial
information or operating data being provided hereunder.
(3) this Continuing Disclosure Undertaking is entered into to comply with the continuing disclosure provisions of the Rule and should be construed so the undertaking would satisfy the requirements of paragraph (b)(5) of the Rule.
Dated: July 9, 2020
CITY OF BOZEMAN, MONTANA
By ____________________________________ Mayor
By ____________________________________
City Manager
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EXHIBIT C
PROVISIONS RELATING TO BOND INSURANCE
(a) “Insurance Policy” shall be defined as follows: “the insurance policy issued by the Insurer guaranteeing the scheduled payment of principal of and interest on the Insured Bonds when due”. “Insurer” shall be defined as follows: “Assured Guaranty Municipal Corp., a New York stock insurance company, or any successor thereto or assignee thereof”. “Issuer” shall
mean the City of Bozeman, Montana. “Insured Bonds” shall be defined to mean the Tax Increment Urban Renewal Revenue Bonds (Bozeman Midtown Urban Renewal District), Series 2020, issued by the Issuer pursuant to the Resolution attached hereto (the “Resolution”). Capitalized terms not otherwise defined herein have the meanings given such terms in the Resolution.
(b) The prior written consent of the Insurer shall be a condition precedent to the deposit of the 2020 Surety Policy provided in lieu of a cash deposit into the Reserve Account, if any. Notwithstanding anything to the contrary set forth in the Resolution, amounts on deposit in the Reserve Account shall be applied solely to the payment of debt service due on the Bonds.
(c) The Insurer shall be deemed to be the sole holder of the Insured Bonds for the
purpose of exercising any voting right or privilege or giving any consent or direction or taking any other action that the holders of the Insured Bonds are entitled to take pursuant to the section or article of the Resolution pertaining to defaults and remedies. In furtherance thereof and as a term of the Resolution and each Bond, each Bondholder appoints the Insurer as their agent and attorney-in-fact and agree that the Insurer may at any time during the continuation of any
proceeding by or against the Issuer under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an “Insolvency Proceeding”) direct all matters relating to such Insolvency Proceeding, including without limitation, (A) all matters relating to any claim or enforcement proceeding in connection with an Insolvency Proceeding (a “Claim”), (B) the direction of any appeal of any order relating to any
Claim, (C) the posting of any surety, supersedeas or performance bond pending any such appeal, and (D) the right to vote to accept or reject any plan of adjustment. In addition, each Bondholder delegates and assigns to the Insurer, to the fullest extent permitted by law, the rights of each Bondholder in the conduct of any Insolvency Proceeding, including, without limitation, all rights of any party to an adversary proceeding or action with respect to any court order issued in
connection with any such Insolvency Proceeding. Remedies granted to the Bondholders shall expressly include mandamus.
(d) If acceleration is permitted under the Resolution, the maturity of the Insured Bonds shall not be accelerated without the consent of the Insurer and in the event the maturity of the Insured Bonds is accelerated, the Insurer may elect, in its sole discretion, to pay accelerated
principal and interest accrued, on such principal to the date of acceleration (to the extent unpaid by the Issuer). Upon payment of such accelerated principal and interest accrued to the acceleration date as provided above, the Insurer’s obligations under the Insurance Policy with respect to such Insured Bonds shall be fully discharged.
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(e) No grace period for a covenant default shall exceed 30 days or be extended for
more than 60 days, without the prior written consent of the Insurer. No grace period shall be permitted for payment defaults.
(f) The Insurer shall be included as a third party beneficiary to the Resolution.
(g) The exercise of any provision of the Resolution which permits the purchase of Bonds in lieu of redemption shall require the prior written approval of the Insurer if any Bond so
purchased is not cancelled upon purchase.
(h) Any amendment, supplement, modification to, or waiver of, the Resolution or any other transaction document, including any underlying security agreement (each a “Related Document”), that requires the consent of Bondowners or adversely affects the rights and interests of the Insurer shall be subject to the prior written consent of the Insurer.
(i) The rights granted to the Insurer under the Resolution or any other Related Document to request, consent to or direct any action are rights granted to the Insurer in consideration of its issuance of the Insurance Policy. Any exercise by the Insurer of such rights is merely an exercise of the Insurer’s contractual rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the Bondholders and such action does not evidence any
position of the Insurer, affirmative or negative, as to whether the consent of the Bondowners or any other person is required in addition to the consent of the Insurer.
(j) Only (1) cash, (2) non-callable direct obligations of the United States of America (“Treasuries”), (3) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the
owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, (4) subject to the prior written consent of the Insurer, pre-refunded municipal obligations rated “AAA” and “Aaa” by S&P and Moody’s, respectively, or (5) subject to the prior written consent of the Insurer,
securities eligible for “AAA” defeasance under then existing criteria of S & P or any combination thereof, shall be used to effect defeasance of the Insured Bonds unless the Insurer otherwise approves.
To accomplish defeasance, the Issuer shall cause to be delivered (i) a report of an independent firm of nationally recognized certified public accountants or such other accountant
as shall be acceptable to the Insurer (“Accountant”) verifying the sufficiency of the escrow established to pay the Insured Bonds in full on the maturity or redemption date (“Verification”), (ii) an Escrow Deposit Agreement (which shall be acceptable in form and substance to the Insurer), (iii) an opinion of nationally recognized bond counsel to the effect that the Insured Bonds are no longer “Outstanding” under the Resolution and (iv) if there is a Trustee, a
certificate of discharge of the Trustee with respect to the Insured Bonds; each Verification and defeasance opinion shall be acceptable in form and substance, and addressed, to the Issuer, Trustee (if any) and Insurer. The Insurer shall be provided with final drafts of the above-referenced documentation not less than five business days prior to the funding of the escrow.
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Bonds shall be deemed “Outstanding” under the Resolution unless and until they are in
fact paid and retired or the above criteria are met.
(k) Amounts paid by the Insurer under the Insurance Policy shall not be deemed paid for purposes of the Resolution and the Insured Bonds relating to such payments shall remain Outstanding and continue to be due and owing until paid by the Issuer in accordance with the Resolution. The Resolution shall not be discharged unless all amounts due or to become due to
the Insurer have been paid in full or duly provided for.
(l) Claims Upon the Insurance Policy and Payments by and to the Insurer.
If, on the third Business Day prior to the related scheduled interest payment date or principal payment date (“Payment Date”) there is not on deposit with the Paying Agent, after making all transfers and deposits required under the Resolution, moneys sufficient to pay the
principal of and interest on the Insured Bonds due on such Payment Date, the Paying Agent shall give notice to the Insurer and to its designated agent (if any) (the “Insurer’s Fiscal Agent”) by telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time, on such Business Day. If, on the second Business Day prior to the related Payment Date, there continues to be a deficiency in the amount available to pay the principal of and interest on the
Insured Bonds due on such Payment Date, the Paying Agent shall make a claim under the Insurance Policy and give notice to the Insurer and the Insurer’s Fiscal Agent (if any) by telephone of the amount of such deficiency, and the allocation of such deficiency between the amount required to pay interest on the Insured Bonds and the amount required to pay principal of the Insured Bonds, confirmed in writing to the Insurer and the Insurer’s Fiscal Agent by 12:00
noon, New York City time, on such second Business Day by filling in the form of Notice of Claim and Certificate delivered with the Insurance Policy.
The Registrar shall designate any portion of payment of principal on Insured Bonds paid by the Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Insured Bonds
registered to the then current Bondholder, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Insurer, registered in the name of Assured Guaranty Municipal Corp., in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Registrar’s failure to so designate any payment or issue any replacement Bond shall have no effect on the amount of principal or interest payable
by the Issuer on any Bond or the subrogation rights of the Insurer.
The Registrar shall keep a complete and accurate record of all funds deposited by the Insurer into the Policy Payments Account (defined below) and the allocation of such funds to payment of interest on and principal of any Bond. The Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Registrar.
Upon payment of a claim under the Insurance Policy, the Registrar shall establish a separate special purpose trust account for the benefit of Bondholders referred to herein as the “Policy Payments Account” and over which the Registrar shall have exclusive control and sole right of withdrawal. The Registrar shall receive any amount paid under the Insurance Policy in trust on behalf of Bondholders and shall deposit any such amount in the Policy Payments
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Account and distribute such amount only for purposes of making the payments for which a claim
was made. Such amounts shall be disbursed by the Registrar to Bondholders in the same manner as principal and interest payments are to be made with respect to the Insured Bonds under the sections hereof regarding payment of Bonds. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments. Notwithstanding anything herein to
the contrary, the Issuer agrees to pay to the Insurer (i) a sum equal to the total of all amounts paid by the Insurer under the Insurance Policy (the “Insurer Advances”); and (ii) interest on such Insurer Advances from the date paid by the Insurer until payment thereof in full, payable to the Insurer at the Late Payment Rate per annum (collectively, the “Insurer Reimbursement Amounts”). “Late Payment Rate” means the lesser of (a) the greater of (i) the per annum rate of
interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in The City of New York, as its prime or base lending rate (any change in such rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank) plus 3%, and (ii) the then applicable highest rate of interest on the Insured Bonds and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate
shall be computed on the basis of the actual number of days elapsed over a year of 360 days. The Issuer hereby covenants and agrees that the Insurer Reimbursement Amounts are secured by a lien on and pledge of Tax Increment of the District and payable from such Tax Increment of the District on a parity with debt service due on the Insured Bonds and any parity bonds.
Funds held in the Policy Payments Account shall not be invested by the Registrar and
may not be applied to satisfy any costs, expenses or liabilities of the Registrar. Any funds remaining in the Policy Payments Account following a Bond payment date shall promptly be remitted to the Insurer.
The Issuer shall take all actions required by the Dissolution Act to ensure that all Insurer Reimbursement Amounts (including any amounts due the Insurer pursuant to item (o) below) are
paid to the Insurer when due, including the submission of Recognized Obligation Payment Schedules providing for Insurer Reimbursement Amounts and such other amounts.
(m) The Insurer shall, to the extent it makes any payment of principal of or interest on the Insured Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Insurance Policy (which subrogation rights shall also include
the rights of any such recipients in connection with any Insolvency Proceeding). Each obligation of the Issuer to the Insurer under the Related Documents shall survive discharge or termination of such Related Documents.
(n) The Issuer shall pay or reimburse the Insurer, solely from Tax Increment of the District, any and all charges, fees, costs and expenses that the Insurer may reasonably pay or
incur in connection with (i) the administration, enforcement, defense or preservation of any rights or security in any Related Document; (ii) the pursuit of any remedies under the Resolution or any other Related Document or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or related to, the Resolution or any other Related Document whether or not executed or completed, or (iv) any litigation or other dispute in
connection with the Resolution or any other Related Document or the transactions contemplated thereby, other than costs resulting from the failure of the Insurer to honor its obligations under
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the Insurance Policy. The Insurer reserves the right to charge a reasonable fee as a condition to
executing any amendment, waiver or consent proposed in respect of the Resolution or any other Related Document.
(o) After payment of reasonable expenses of the Trustee, if any, the application of funds realized upon default shall be applied to the payment of expenses of the Issuer or rebate only after the payment of past due and current debt service on the Insured Bonds and amounts
required to restore the Reserve Account to the Reserve Requirement.
(p) The Insurer shall be entitled to pay principal or interest on the Insured Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Insurance Policy) and any amounts due on the Insured Bonds as a result of acceleration of the maturity thereof in accordance with the Resolution, whether or not
the Insurer has received a Notice of Nonpayment (as such terms are defined in the Insurance Policy) or a claim upon the Insurance Policy.
(q) The notice address of the Insurer is: Assured Guaranty Municipal Corp., 1633 Broadway, New York, New York 10019, Attention: Managing Director – Surveillance, Re: Policy No. , Telephone: (212) 974-0100; Telecopier: (212) 339-3556. In each case in which
notice or other communication refers to an Event of Default, then a copy of such notice or other communication shall also be sent to the attention of the General Counsel and shall be marked to indicate “URGENT MATERIAL ENCLOSED.”
(r) The Insurer shall be provided with the following information by the Issuer or the Trustee, if any:
(i) Annual audited financial statements within nine (9) months after the end of the Issuer’s fiscal year (together with a certification of the Issuer that it is not aware of any default or Event of Default under the Resolution), and the Issuer’s annual budget within 60 days after the approval thereof together with such other information, data or reports as the Insurer shall reasonably request from time to time;
(ii) Notice of any draw upon the Reserve Account within two Business Days after knowledge thereof other than (i) withdrawals of amounts in excess of the Reserve Requirement and (ii) withdrawals in connection with a refunding of Bonds;
(iii) Notice of any default known to the Issuer within five Business Days after knowledge thereof;
(iv) Prior notice of the advance refunding or redemption of any of the Insured Bonds, including the principal amount, maturities and CUSIP numbers thereof;
(v) Notice of the resignation or removal of the Registrar and the appointment of, and acceptance of duties by, any successor thereto;
(vi) Notice of the commencement of any proceeding by or against the Issuer
commenced under the United States Bankruptcy Code or any other applicable
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bankruptcy, insolvency, receivership, rehabilitation or similar law (an “Insolvency
Proceeding”);
(vii) Notice of the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal of, or interest on, the Insured Bonds;
(viii) A full original transcript of all proceedings relating to the execution of any
amendment, supplement, or waiver to the Related Documents; and
(ix) All reports, notices and correspondence to be delivered to Bondholders under the terms of the Related Documents.
In addition, to the extent that the Issuer has entered into a continuing disclosure agreement, covenant or undertaking with respect to the Insured Bonds, all information
furnished pursuant to such agreements shall also be provided to the Insurer, simultaneously with the furnishing of such information.
(s) The Insurer shall have the right to receive such additional information as it may reasonably request.
(t) The Issuer will permit the Insurer to discuss the affairs, finances and accounts of
the Issuer or any information the Insurer may reasonably request regarding the security for the Insured Bonds with appropriate officers of the Issuer and will use commercially reasonable efforts to enable the Insurer to have access to the facilities, books and records of the Issuer on any business day upon reasonable prior notice.
(u) The Trustee, if any, shall notify the Insurer of any failure of the Issuer to provide
notices, certificates and other information under the transaction documents.
(v) Notwithstanding satisfaction of the other conditions to the issuance of Additional Bonds set forth in the Resolution, no such issuance may occur (1) if an Event of Default (or any event which, once all notice or grace periods have passed, would constitute an Event of Default) exists unless such default shall be cured upon such issuance and (2) unless the Reserve Account
is fully funded at the Reserve Requirement (including the proposed issue) upon the issuance of such Additional Bonds, in either case unless otherwise permitted by the Insurer.
(w) In determining whether any amendment, consent, waiver or other action to be taken, or any failure to take action, under the Resolution would adversely affect the security for the Insured Bonds or the rights of the Bondholders, the Trustee, if any, shall consider the effect
of any such amendment, consent, waiver, action or inaction as if there were no Insurance Policy.
(x) No contract shall be entered into or any action taken by which the rights of the Insurer or security for or sources of payment of the Insured Bonds may be impaired or prejudiced in any material respect except upon obtaining the prior written consent of the Insurer.
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(y) The Issuer shall not enter into any interest rate exchange agreement or interest
rate maintenance agreement secured by and payable from the Tax Increment without prior written consent of the Insurer.
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EXHIBIT D
PROVISIONS RELATING TO 2020 SURETY POLICY
(a) The City of Bozeman, Montana (the “Issuer”) shall repay any draws under the 2020 Surety Policy and pay all related reasonable expenses incurred by AGM and shall pay interest thereon from the date of payment by AGM at the Late Payment Rate. “Late Payment Rate” means the lesser of (x) the greater of (i) the per annum rate of interest, publicly announced
from time to time by JPMorgan Chase Bank at its principal office in the City of New York, as its prime or base lending rate (“Prime Rate”) (any change in such Prime Rate to be effective on the date such change is announced by JPMorgan Chase Bank) plus 3%, and (ii) the then applicable highest rate of interest on the Series 2020 Bonds or any Additional Bonds (collectively, the “Bonds”), and (y) the maximum rate permissible under applicable usury or similar laws limiting
interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. In the event JPMorgan Chase Bank ceases to announce its Prime Rate publicly, Prime Rate shall be the publicly announced prime or base lending rate of such national bank as AGM shall specify. If the interest provisions of this subparagraph (a) shall result in an effective rate of interest which, for any period, exceeds the limit of the usury or any
other laws applicable to the indebtedness created herein, then all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice between or by any party hereto, be applied as additional interest for any later periods of time when amounts are outstanding hereunder to the extent that interest otherwise due hereunder for such periods plus such additional interest would not exceed the limit of the usury or such other
laws, and any excess shall be applied upon principal immediately upon receipt of such moneys by AGM, with the same force and effect as if the Issuer had specifically designated such extra sums to be so applied and AGM had agreed to accept such extra payment(s) as additional interest for such later periods. In no event shall any agreed-to or actual exaction as consideration for the indebtedness created herein exceed the limits imposed or provided by the law applicable to this
transaction for the use or detention of money or for forbearance in seeking its collection.
Repayment of draws and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, “Policy Costs”) shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1/12 of the aggregate of Policy Costs related to such draw.
Amounts in respect of Policy Costs paid to AGM shall be credited first to interest due, then to the expenses due and then to principal due. As and to the extent that payments are made to AGM on account of principal due, the coverage under the 2020 Surety Policy will be increased by a like amount, subject to the terms of the 2020 Surety Policy. The obligation to pay Policy Costs shall be secured by a valid lien on all Tax Increment of the District and other
collateral pledged as security for the Bonds (subject only to the priority of payment provisions set forth under the Resolution attached hereto (the “Resolution”)).
All cash and investments in the debt service reserve account established for the Bonds (the “Reserve Account”) shall be transferred to the debt service fund for payment of debt service on Bonds before any drawing may be made on the 2020 Surety Policy or any other credit facility
credited to the Reserve Account in lieu of cash (“Credit Facility”). Payment of any Policy Costs
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shall be made prior to replenishment of any such cash amounts. Draws on all Credit Facilities
(including the 2020 Surety Policy) on which there is available coverage shall be made on a pro-rata basis (calculated by reference to the coverage then available thereunder) after applying all available cash and investments in the Reserve Account. Payment of Policy Costs and reimbursement of amounts with respect to other Credit Facilities shall be made on a pro-rata basis prior to replenishment of any cash drawn from the Reserve Account. For the avoidance of
doubt, “available coverage” means the coverage then available for disbursement pursuant to the terms of the applicable alternative credit instrument without regard to the legal or financial ability or willingness of the provider of such instrument to honor a claim or draw thereon or the failure of such provider to honor any such claim or draw.
(b) If the Issuer shall fail to pay any Policy Costs in accordance with the requirements
of subparagraph (a) hereof, AGM shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided under the Resolution other than (i) acceleration of the maturity of the Bonds or (ii) remedies which would adversely affect owners of the Bonds.
(c) The Resolution shall not be discharged until all Policy Costs owing to AGM shall have been paid in full. The Issuer's obligation to pay such amounts shall expressly survive
payment in full of the Bonds.
(d) The Issuer shall include any Policy Costs then due and owing AGM in the calculation of the additional bonds test and the rate covenant in the Resolution.
(e) The Resolution shall require the Trustee, if any, to ascertain the necessity for a claim upon the 2020 Surety Policy in accordance with the provisions of subparagraph (a) hereof
and to provide notice to AGM in accordance with the terms of the 2020 Surety Policy at least five business days prior to each date upon which interest or principal is due on the Bonds. Where deposits are required to be made by the Issuer with the Trustee to the debt service fund for the Bonds more often than semi-annually, the Trustee shall be instructed to give notice to AGM of any failure of the Issuer to make timely payment in full of such deposits within two business
days of the date due.
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