Resolution 4603 - Supplemental Resolution - $761,000 Water System Revenue Bonds (DNRC)2225
RESOLUTION NO.4603
RESOLUTION RELATING TO $761,000 WATER SYSTEM REVENUE BOND
(DNRC DRINKING WATER REVOLVING LOAN PROGRAM), SERIES 2001;
AUTHORIZING THE ISSUANCE AND FDCING THE TERMS AND
CONDITIONS THEREOF
WHEREAS, pursuant to the Drinking Water State Revolving Fund Act, Montana Code
Annotated, Title 75, Chapter 6, Part 2, as amended (the "State Act"), the State of Montana (the
"State") has established a revolving loan program (the "Program") to be administered by the
Department of Natural Resources and Conservation of the State of Montana, an agency of the
State (the "DNRC'), and by the Department of Environmental Quality of the State of Montana,
an agency of the State (the "DEQ"), and has provided that a drinking water state revolving fund
(the "Revolving Fund'D be created within the state treasury and all federal, state and other funds
for use in the Program be deposited into the Revolving Fund, including, but not limited to, all
federal grants for capitalization of a state drinking water revolving fund under the federal Safe
Drinking Water Act (the "Safe Drinking Water Act'), all repayments of assistance awarded from
the Revolving Fund, interest on investments made on money in the Revolving Fund and
payments of principal of and interest on loans made from the Revolving Fund; and
WHEREAS, the Act provides that funds from the Program shall be disbursed and
administered for the purposes set forth in the Safe Drinking Water Act and according to rules
adopted by the DEQ and the DNRC; and
WHEREAS, the City of Kalispell, Flathead County, Montana (the "City") has applied
to the DNRC for a loan (the "Loan") from the Revolving Fund to enable the City to finance,
refinance or reimburse itself for the costs of the 2001 Project (as hereinafter defined) which will
carry out the purposes of the Safe Drinking Water Act; and
WHEREAS, the City is authorized under applicable laws, ordinances and regulations to
adopt this Resolution and to issue the Series 2001 Bond (as hereinafter defined) to evidence the
Loan for the purposes set forth herein; and
WHEREAS, the DNRC will fund the Loan from Recycled Moneys in the Revolving
Fund.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF KALISPELL, MONTANA, AS FOLLOWS:
ARTICLE I
DEFINITIONS, RULES OF CONSTRUCTION AND APPENDICES
Section LI. Definitions. Unless a different meaning clearly appears from the context,
terms used with initial capital letters but undefined in this Supplemental Resolution shall have
the meanings given them in the Resolution or as follows:
"Accountant" or "Accountants" means an independent certified public accountant or a
firm of independent certified public accountants satisfactory to the DNRC.
"Act" means Montana Code Annotated, Title 7, Chapter 7, Parts 44 and 45, as
heretofore and hereafter amended or supplemented.
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"Authorized DNRC Officer" means the Director of the DNRC or his or her designee.
"Bond Counsel" means any Counsel nationally recognized as experienced in matters
relating to the issuance by states or political subdivisions of tax-exempt obligations selected by
the City and acceptable to the DNRC.
"Bonds" means the Series 1996 Bonds, the Series 2001 Bond and any Additional
Bonds.
"Business Day" means any day which is not a Saturday or Sunday, a legal holiday in the
State or a day on which banks in Montana are authorized or required by law to close.
"Closing" means the date of delivery of the Series 2001 Bond to the DNRC.
"Collateral Documents" means any security agreement, guaranty or other document or
agreement delivered to the DNRC securing the obligations of the City under this Supplemental
Resolution and the Series 2001 Bond. If no Collateral Documents secure such obligations, any
reference to Collateral Documents in this Supplemental Resolution shall be without effect.
"Committed Amount" means the amount of the Loan committed to be lent by the
DNRC to the City pursuant to Section 4.1 of this Supplemental Resolution, as such amount may
be reduced pursuant to Sections 3.2(b), and 3.4 of this Supplemental Resolution.
"Construction Account" means the account created in the Water System Fund pursuant
to Section 7.02 of the Resolution.
"Consultant" means a nationally recognized consultant or firm of consultants, or an
independent engineer or firm of independent engineers, or an Accountant, which in any case is
qualified and has skill and experience in the preparation of financial feasibility studies or
projections for facilities similar to the System or the Project, selected by the City and satisfactory
to the DNRC.
"Counsel" means an attorney duly admitted to practice law before the highest court of
any state and satisfactory to the DNRC.
"Debt" means, without duplication, (1) indebtedness of the City for borrowed money or
for the deferred purchase price of property or services; (2) the obligation of the City as lessee
under leases which should be recorded as capital leases under generally accepted accounting
principles; and (3) obligations of the City under direct or indirect guarantees in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in
clause (1) or (2) above.
"Debt Service Account" means the account created in the Water System Fund pursuant
to Section 7.04 of the Resolution.
"DEQ" means the Department of Environmental Quality of the State of Montana, an
agency of the State, or any successor to its powers, duties and obligations under the State Act or
the EPA Agreements.
"DNRC" means the Department of Natural Resources and Conservation of the State of M
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"EPA Agreements" means all capitalization grant agreements and other written
agreements between the DEQ, DNRC and the EPA concerning the Program.
"EPA Capitalization Grant" means a grant of fiends to the State by the EPA under
Section 1452 of the Safe Drinking Water Act.
"Fund" means the Water System Fund established pursuant to Section 7.01 of the
Resolution.
"Governmental Unit" means governmental unit as such term is used in Section 145(a)
of the Code.
"Indenture" means the Indenture of Trust, dated as of May 1, 1998, between the Board
of Examiners of the State and the Trustee, as such may be supplemented or amended from time
to time in accordance with the provisions thereof, pursuant to which, among other things, the
State Bonds are to be or have been issued.
"Loan" means the Loan made to the City by the DNRC pursuant to the Program in the
maximum amount of the Committed Amount to provide fiends to pay all or a portion of the costs
of the 2001 Project, the Origination Fee and the Administrative Fee payable under the Program
and to fund a deposit to the Reserve Account.
"Loan Loss Reserve Surcharge" means a fee equal to one percent (1.00%) per annum
on the outstanding principal amount of the Loan, payable on the same dates that payments of
interest on the Loan are due.
"1996 Project" means the acquisition, construction and installation of various
improvements to the System, consisting of (i) water main extension on Two Mile Drive from
Glenwood to Hawthorn; (ii) water main looping on 14th Street East from 6th Avenue East to 7th
Avenue East; (iii) water main looping in upper service zone and increase water pressure between
Liberty Street and Three Mile Drive; (iv) water main looping on South Woodland from Kelly
Road to Woodland Court; and (v) construction of the north side water well, and related
improvements.
"2001 Project" means the costs of the facilities, improvements and activities financed,
refinanced or the cost of which is being reimbursed to the City with proceeds of the Loan,
described in Exhibit A to this Supplemental Resolution.
"Operating Account" means the account created in the Water System Fund pursuant to
Section 6.03 of the Resolution.
"Origination Fee" means $7,610, which is 1.00% of the Committed Amount.
"Program" means the Drinking Water State Revolving Fund Program established by the
State Act.
"Project" means an improvement, betterment, reconstruction or extension of the
System, including the 1996 Project and the 2001 Project.
"Public Entity" means a State agency, town, municipality, irrigation district, county
water and sewer district, a soil conservation district or other public body established by State law
i or an Indian tribe that has a federally recognized governing body carrying out substantial
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"Regulations" means the Treasury Department, Income Tax Regulations, as amended or
any successor regulation thereto, promulgated under the Code or otherwise applicable to the
Series 2001 Bond.
"Repair and Replacement Account" means the Account created in the Water System
Fund pursuant to Section 7.07 of the Resolution.
"Reserve Account" means the account created in the Water System Fund pursuant to
Section 7.05 of the Resolution.
"Reserve Requirement" means, as of the date of calculation, an amount equal to the
lesser of. (i) 10% of the original principal amount of all series of Bonds then outstanding, or (ii)
an amount equal to the maximum principal of and interest payable on outstanding Bonds in the
current or any future fiscal year (giving effect to mandatory sinking fund redemption, if any).
"Reserved Amounts" means any undisbursed Committed Amount which will or may be
required to pay any remaining costs of the 2001 Project upon completion thereof as provided in
Section 3.4(a) of this Supplemental Resolution.
"Resolution" means Resolution No. 4273 of the City adopted on June 17, 1996, as
amended and supplemented by this Supplemental Resolution and other Supplemental
Resolutions.
"Safe Drinking Water Act" means Title )UV of the Public Health Service Act,
commonly known as the Safe Drinking Water Act, 42 U.S.C. §§300f et seq., as amended, and all
regulations, rules and interpretations issued by the EPA thereunder.
"Series 1996 Bonds" means the Water System Revenue Bonds, Series 1996, issued by
the City, in the original principal amount of $1,060,000 pursuant to the Resolution.
"Series 2001 Bond" means the $761,000 Water System Revenue Bond (DNRC
Drinking Water Revolving Loan Program), Series 2001, issued to the DNRC to evidence the
Loan.
"State" means the State of Montana.
"State Bonds" means the State's General Obligation Bonds (Drinking Water State
Revolving Fund Program), issued or to be issued pursuant to the Indenture.
"State Act" means Montana Code Annotated, Title 75, Part 6, Chapter 2, as amended
from time to time.
"Supplemental Resolution" means this Resolution No. 4603, of the City adopted on
March 5, 2001.
"Surplus Account" means the account created in the Water System Fund pursuant to
Section 7.08 of the Resolution.
"System" means the water system of the City and all extensions, improvements and
betterments thereof heretofore or hereafter constructed and acquired.
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(a) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted government accounting
standards.
(b) Terms in the singular include the plural and vice versa.
(c) All references to time shall refer to Helena, Montana time, unless otherwise
provided herein.
(d) All references to mail shall refer to first-class mail postage prepaid.
(e) Words of the masculine gender shall be deemed and construed to include
correlative words of the feminine and neuter genders.
(f) "Or" is not exclusive, but is intended to permit or encompass one, more or
all of the alternatives conjoined.
Section 1.3. Appendices. Attached to this Resolution and hereby made a part hereof
are the following Appendices:
Appendix A: a description of the 2001 Project;
A endix B: the form of the Series 2001 Bond; and
Ap eta radix C: additional agreements and representations of the City.
ARTICLE II
AUTHORIZATION, FINDINGS, REPRESENTATIONS AND COVENANTS
Section 2.1. Authorization and Findings.
(a) Authorization. Under the provisions of the Act, the City is authorized to issue and
sell its revenue bonds payable during a term not exceeding forty years from their date of issue, to
provide funds for the reconstruction, improvement, betterment and extension of the System or to
refund its revenue bonds issued for such purpose; provided that the bonds and the interest
thereon are to be payable solely out of the net income and revenues to be derived from rates, fees
and charges for the services, facilities and commodities furnished by the undertaking, and are not
to create any obligation for the payment of which taxes may be levied except to pay for services
provided by the undertaking to the City.
(b) The Ste. The City, pursuant to the Act and other laws of the State has
established and presently owns and operates the System.
(c) The 2001 Project. After investigation of the facts and as authorized by the Act, this
Council has determined it to be necessary and desirable and in the best interests of the City to
acquire and construct the 2001 Project.
(d) Outstanding Bonds. Pursuant to the Act and the Resolution, the City has issued its
Series 1996 Bonds to finance the 1996 Project and to pay costs of issuance of the Series 1996
Bonds. The Series 1996 Bonds are payable from Net Revenues of the System, and no other
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improvement, extension or rehabilitation of the System; provided that if the Additional Bonds are
issued to finance a Project, a certificate is to be signed by an Independent Consultant stating that
the Net Revenues in the Fiscal Year immediately preceding the issuance of such Additional
Bonds were at least equal to 125% of the maximum Principal and Interest Requirements for any
complete, future Fiscal Year (during the term of the then Outstanding Bonds) with respect to the
Outstanding Bonds and the Additional Bonds proposed to be issued. Based on a certificate
executed by the Independent Consultant, it is hereby determined that the City is authorized to
issue $761,000 in aggregate principal amount of Additional Bonds pursuant to Section 6.01 of
the Resolution payable from and secured by the Net Revenues on a parity with the Outstanding
Series 1996 Bonds.
Section 2.2. Representations. The City represents as follows:
(a) Organization and Authority. The City:
(i) is duly organized and validly existing as a municipal corporation of the
State;
(ii) has all requisite power and authority and all necessary licenses and permits
required as of the date hereof to own and operate the System and to carry on its current
activities with respect to the System, to adopt this Resolution and to enter into the
Collateral Documents and to issue the Series 2001 Bond and to carry out and
consummate all transactions contemplated by the Resolution, the Series 2001 Bond and
the Collateral Documents;
(iii) is a Governmental Unit and a Public Entity; and
(iv) has taken all proper action to authorize the execution, delivery and
performance of its obligations under this Supplemental Resolution, the Series 2001 Bond
and the Collateral Documents and the incurrence of the Debt evidenced by the Series
2001 Bond in the maximum amount of the Committed Amount.
(b) Litigation. There is no litigation or proceeding pending, or to the knowledge of the
City threatened, against or affecting the City in any court or before or by any governmental
authority or arbitration board or tribunal that, if adversely determined, would materially and
adversely affect the existence, corporate or otherwise, of the City, or the ability of the City to
make all payments and otherwise perform its obligations under the Resolution, the Series 2001
Bond and the Collateral Documents, or the financial condition of the City, or the transactions
contemplated by the Resolution, the Series 2001 Bond and the Collateral Documents or the
validity and enforceability of the Resolution, the Series 2001 Bond and the Collateral
Documents. No referendum petition has been filed with respect to any resolution or other action
of the City relating to the 2001 Project, the Series 2001 Bond or any Collateral Documents and
the period for filing any such petition will have expired before issuance of the Series 2001 Bond.
(c) Borrowinggal and Authorized. The adoption of this Supplemental Resolution,
the execution and delivery of the Series 2001 Bond and the Collateral Documents and the
consummation of the transactions provided for in this Supplemental Resolution, the Series 2001
Bond and the Collateral Documents and compliance by the City with the provisions of the
Resolution, the Series 2001 Bond and the Collateral Documents:
(i) are within the powers of the City and have been duly authorized by all
necessary action on the part of the City; and M
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City or its property may be bound, nor will such action result in any violation of the
provisions of any laws, ordinances, governmental rules or regulations or court or other
governmental orders to which the City, its properties or operations are subject.
(d) No Defaults. No event has occurred and no condition exists that, upon execution
and delivery of the Series 2001 Bond and the Collateral Documents, would constitute a default
under the Resolution or the Collateral Documents. The City is not in violation of any term of any
agreement, bond resolution, trust indenture, charter or other instrument to which it is a party or
by which it or its property may be bound which violation would materially and adversely affect
the transactions contemplated hereby or the compliance by the City with the terms hereof or of
the Series 2001 Bond and the Collateral Documents.
(e) Governmental Consent. The City has obtained or made all permits, findings and
approvals required to the date of adoption of this Supplemental Resolution by any governmental
body or officer for the making and performance by the City of its obligations under this
Supplemental Resolution, the Series 2001 Bond and the Collateral Documents (including any
necessary water rate increase) or for the 2001 Project, the financing or refinancing thereof or the
reimbursement of the City for the costs thereof. No consent, approval or authorization of, or
filing, registration or qualification with, any governmental authority (other than those, if any,
already obtained) is required on the part of the City as a condition to adopting this Supplemental
Resolution, issuing the Series 2001 Bond or entering into the Collateral Documents and the
performance of the City's obligations hereunder and thereunder.
(f) Binding Obligation. The Resolution, the Series 2001 Bond and any Collateral
Document to which the City is a party are the valid and binding special, limited obligations and
agreements of the City, enforceable against the City in accordance with their terms, except to the
extent that the enforceability thereof may be limited by laws relating to bankruptcy, moratorium,
reorganization, insolvency or similar laws affecting creditors' rights and general principles of
equity.
(g) The 2001 Proiect. The 2001 Project consists and will consist of the facilities,
improvements and activities described in Appendix A, as such Appendix A may be amended
from time to time in accordance with the provision of Article III of this Supplemental Resolution.
The 2001 Project comprises facilities of a type that, as determined by the EPA, will facilitate
compliance with the national primary drinking water regulations applicable to the System or will
otherwise significantly further the health protection objectives of the Safe Drinking Water Act.
(h) The System. The System is a "community water system" within the meaning of the
Act and the Safe Drinking Water Act in that it is a public water system, comprising collection,
treatment, storage and distribution facilities for the provision to the public of water for human
consumption, that serves not less than 15 service connections used by year-round residents of the
area served by the System or regularly serves not less than 25 year-round residents.
(i) Full Disclosure. There is no fact that the City has not specifically disclosed in
writing to the DNRC that materially and adversely affects or (so far as the City can now foresee),
except for pending or proposed legislation or regulations that are a matter of general public
information, that will materially and adversely affect the properties, operations and finances of
the System, the City's status as a Public Entity and Governmental Unit, its ability to own and
operate the System in the manner it is currently operated or the City's ability to perform its
obligations under the Resolution, the Series 2001 Bond and the Collateral Documents and to
pledge any revenues or other property pledged to the payment of the Series 2001 Bond.
a M Compliance With Law. The Citv:
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(2) has obtained all licenses, permits, franchises or other governmental
authorizations necessary to the ownership of the System and the operation thereof and
agrees to obtain all such licenses, permits, franchises or other governmental
authorizations as may be required in the future for the System and the operation thereof,
which failure to obtain might materially and adversely afifect the ability of the City to
conduct the operation of the System as presently conducted or the condition (financial or
otherwise) of the System or the City's ability to perform its obligations under the
Resolution, the Series 2001 Bond and the Collateral Documents.
Section 2.3. Covenants.
(a) Insurance. In addition to the requirements of Sections 8.03 and 8.04 of the
Resolution, the City at all times shall keep and maintain with respect to the System property and
casualty insurance and liability insurance with financially sound and reputable insurers, or self-
insurance as authorized by State law, against such risks and in such amounts, and-Fwith such
deductible provisions, as are customary in the State in the case of entities of the same size and
type as the City and similarly situated and shall carry and maintain, or cause to be carried and
maintained, and pay or cause to be paid timely the premiums for all such insurance. Each policy
must provide that it cannot be cancelled by the insurer without giving the City and the DNRC 30
days' prior written notice. The City shall give the DNRC prompt notice of each insurance policy
it obtains or maintains to comply with this Section 2.3(a).and of each renewal, replacement,
change in coverage or deductible under or amount of or cancellation of each such insurance
policy and the amount and coverage and deductibles and carrier of each new or replacement
policy. Such notice shall specifically note any adverse change as being an adverse change. The
City shall deliver to the DNRC at Closing a certificate providing the information required by this
Section 2.3(a).
(b) Right of Inspection and Notice of Change of Location, The DNRC, the DEQ and
the EPA and their designated agents shall have the right at all reasonable times during normal
business hours and upon reasonable notice to enter into and upon the property of the City for the
purpose of inspecting the System or any or all books and records of the City relating to the
System.
(c) Further Assurance. The City shall execute and deliver to the DNRC all such
documents and instruments and do all such other acts and things as may be necessary or required
by the DNRC to enable the DNRC to exercise and enforce its rights under the Resolution, the
Series 2001 Bond and the Collateral Documents and to realize thereon, and record and file and
re-record and refile all such documents and instruments, at such time or times, in such manner
and at such place or places, all as may be necessary or required by the DNRC to validate,
preserve and protect the position of the DNRC under the Resolution, the Series 2001 Bond and
the Collateral Documents.
(d) Maintenance of Securily. if An • Recordation of Interest.
(i) The City shall, at its expense, take all necessary action to maintain and
preserve the lien and security interest of the Resolution and the Collateral Documents so
long as any amount is owing under the Resolution or the Series 2001 Bond;
(ii) The City shall forthwith, after the execution and delivery of the Series 2001
Bond and thereafter from time to time, cause the Resolution and any Collateral
Documents granting a security interest in revenues or real or personal property and any
financing statements or other notices or documents relatiniz thereto to be filed. recristered
22-33
(iii) Except to the extent it is exempt therefrom, the City shall pay or cause to
be paid all filing, registration and recording fees incident to such filing, registration and
recording, and all expenses incident to the preparation, execution and acknowledgment of
the documents described in subparagraph (ii), and all federal or state fees and other
similar fees, duties, imposts, assessments and charges arising out of or in connection with
the execution and delivery of the Series 2001 Bond and the Collateral Documents and the
documents described in subparagraph (ii).
(e) Additional A ements. The City covenants to comply with all representations,
covenants, conditions and agreements, if any, set forth in Appendix C hereto.
(f) Financial Information. This Section 2.3(f) supplements, and is not intended to limit,
the requirements in Section 8.06 of the Resolution. The City agrees that for each fiscal year it
shall famish to the DNRC and the DEQ, promptly when available:
(1) the preliminary budget for the System, with items for the 2001 Project
shown separately; and
(2) when adopted, the final budget for the System, with items for the 2001
Project shown separately.
The City will cause proper and adequate books of record and account to be kept
showing complete and correct entries of all receipts, disbursements and other transactions
relating to the System, the monthly gross revenues derived from its operation, and the
segregation and application of the gross revenues in accordance with the Resolution, in such
reasonable detail as may be determined by the City in accordance with generally accepted
governmental accounting practice and principles. It will cause such books to be maintained on
the basis of the same fiscal year as that utilized by the City. The City shall, within 180 days after
the close of each fiscal year, cause to be prepared and supply to the DNRC a financial report with
respect to the System for such fiscal year. The report shall be prepared at the direction of the
financial officer of the City in accordance with applicable generally accepted governmental
accounting principles and, in addition to whatever matters may be thought proper by the financial
officer to be included therein, shall include the following:
(A) A statement in detail of the income and expenditures of the System for the
fiscal year, identifying capital expenditures and separating them from operating
expenditures;
(B) A balance sheet as of the end of the fiscal year;
(C) The number of premises connected to the System at the end of the fiscal
year;
(D) The amount on hand in each account of the Fund at the end of the fiscal
year;
(E) A list of the insurance policies and fidelity bonds in force at the end of the
fiscal year, setting out as to each the amount thereof, the risks covered thereby, the name
of the insurer or surety and the expiration date of the policy or bond; and
i
(F) A determination that the report shows full compliance by the City with the
a provisions of the Resolution during the fiscal year covered thereby, including proper
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The City shall also have prepared and supplied to the DNRC and the DEQ, within 180 days of
the close of every other fiscal year, an audit report prepared by an independent certified public
accountant or an agency of the state in accordance with generally accepted governmental
accounting principles and practice with respect to the financial statements and records of the
System. The audit report shall include an analysis of the City's compliance with the provisions
of the Resolution.
(g) 2001 Project Accounts. The City shall maintain 2001 Project accounts in
accordance with generally accepted government accounting standards.
(h) Records. After reasonable notice from the EPA or the DNRC, the City shall make
available to the EPA or the DNRC such records as the -EPA or the DNRC reasonably requires to
review and determine compliance with the Safe Drinking Water Act, as provided in Section 75-
6-224(1)(h) of the Act.
(i) Compliance with Safe Drinking Water Act. The City has complied and shall
comply with all conditions and requirements of the Safe Drinking Water Act pertaining to the
Loan and the 2001 Project, and shall maintain sufficient financial, managerial and technical
capability to continue to effect such compliance.
0) Compliance with DE6 Requirements. The City shall comply with plan,
specification and other requirements for public water systems established by the DEQ, as
required by Section 756-224(1)(h).
Section 2.4. Covenants Relating to the Tax -Exempt Status of the State Bonds.
(a) The City covenants and agrees that it will not use or permit to be used any of the
proceeds of the Series 2001 Bond or any other funds of the City in respect of the 2001 Project or
the Series 2001 Bond, directly or indirectly, in a manner that would cause, or take any other
action that would cause, any State Bond to be an "arbitrage bond" within the meaning of Section
148 of the Code or would otherwise cause the interest on the State Bonds to be included in gross
income for purposes of federal income taxation.
(b) The City agrees that it will not enter into, or allow any "related person" (as defined
in Section 147(a)(2) of the Code) to enter into, any arrangement, formal or informal, for the
purchase of the State Bonds or any other obligations of the DNRC in an amount related to the
amount of the Loan or the portion of the Loan derived directly or indirectly from proceeds of the
State Bonds or that would otherwise cause any State Bond to be an "arbitrage bond" within the
meaning of Section 148 of the Code.
(c) The City shall not use or permit the use of the 2001 Project directly or indirectly in
any trade or business carried on by any Person who is not a Governmental Unit. For the purpose
of this subparagraph, use as a member of the general public (within the meaning of the
Regulations) shall not be taken into account and any activity carried on by a Person other than a
natural person shall be treated as a trade or business.
(d) Any portion of the 2001 Project being refinanced or the cost of which is being
reimbursed was acquired by and is now and shall, during the term of the Loan, be owned by the
City and not by any other Person. Any portion of the 2001 Project being financed shall be
acquired by and shall, during the term of the Loan, be owned by the City and not by any other
Person. Notwithstanding the previous two sentences, the City may transfer the 2001 Project or a
portion thereof to another Governmental Unit which is also a Public Entity if such transfer is
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(e) At the Closing of the Loan, the DNRC will, if necessary to obtain the Opinion of
Bond Counsel described in Section 7.05(a) of the Indenture, deliver to the City instructions
concerning compliance by the City with the arbitrage rebate requirements of Section 148 of the
Code (the "Arbitrage Rebate Instructions"). The City shall comply with the Arbitrage Rebate
Instructions, if any, delivered to it by the DNRC at Closing, as such Instructions may be amended
or replaced by the DNRC from time to time. The Arbitrage Rebate instructions may be amended
or replaced by new Arbitrage Rebate Instructions delivered by the DNRC and accompanied by an
Opinion of Bond Counsel to the effect that the use of said amended or new Arbitrage Rebate
Instructions will not adversely affect the excludability of interest on the State Bonds or any
Additional State Bonds (except State Bonds the interest on which the State did not intend to be
excluded from gross income for federal income tax purposes) from gross income of the recipients
thereof for federal income tax purposes.
(f) The City agrees that during the Loan Term it will not contract with or permit any
Private Person to manage the 2001 Project or any portion thereof except according to a written
management contract and upon delivery to the DNRC of an opinion of Bond Counsel to the
effect that the execution and delivery of such management contract will not violate the State Act
or the Safe Drinking Water Act or adversely affect the exclusion of interest on State Bonds from
gross income or purposes of federal income taxation.
(g) The City may not lease the 2001 Project or any portion thereof to any Person'other
than a Nonexempt Person which agrees in writing with the City and the State not to cause any
default to occur under the Resolution; provided the City may lease all or any portion of the 2001
Project to a Nonexempt Person pursuant to a lease which in the Opinion of Bond Counsel
delivered to the DNRC will not cause the interest on the State Bonds to be included in gross
income for purposes of federal income taxation.
(h) The City shall not change the use or nature of the 2001 Project if (i) such change
will violate the Safe Drinking Water Act, or (ii) so long as the State Bonds are outstanding
unless, in the Opinion of Bond Counsel delivered to the DNRC, such change will not result in the
inclusion in gross income of interest on the State Bonds for federal income tax purposes.
Section 2.5. Maintenance of System, Liens. The City shall maintain the System,
including the 2001 Project, in good condition and make all necessary renewals, replacements,
additions, betterments and improvements thereto. The City shall not grant or permit to exist any
lien on the 2001 Project or any other property making up part of the System, other than liens
securing Debt where a parity or senior lien secures the Series 2001 Bond; provided that this
Section 2.5 shall not be deemed to be violated if a mechanic's or contractor's lien is filed against
any such property so long as the City uses its best efforts to obtain the discharge of such lien and
promptly reports to the DNRC the filing of such lien and the steps it plans to take and does take
to discharge of such lien.
Section 2.6. Maintenance of Existence: Merger. Consolidation_ Etc.: Disposition of
Assets. The City shall maintain its corporate existence, except that it may consolidate with or
merge into another Governmental Unit or permit one or more Governmental Units to consolidate
with or merge into it or may transfer all or substantially all of its assets to another Governmental
Unit and then dissolve if the surviving, resulting or transferee entity (if other than the City) (i) is
a Public Entity and (ii) assumes in writing all of the obligations of the City under the Resolution,
the Series 2001 Bond and the Collateral Documents; and (a) such action does not result in any
default in the performance or observance of any of the terms, covenants or agreements of the City
under the Resolution, the Series 2001 Bond and the Collateral Documents, (b) such action does
- not violate the State Act or the Safe Drinking Water Act and does not adversely affect the
2 36
Other than pursuant to the preceding paragraph, the City shall not transfer the System or
any portion thereof to any other Person, except for property which is obsolete, outmoded, worn
out, is being replaced or otherwise is not needed for the operation of the System, unless the
provisions. of (a) and (b) of the preceding paragraph are satisfied and the City delivers to the
DNRC an Opinion of Bond Counsel to that effect and, in addition, the DNRC consents to such
transfer.
ARTICLE III
USE OF PROCEEDS; THE 2001 PROJECT
Section 3.1. Use of Proceeds. The City shall apply the proceeds of the Loan from the
DNRC solely as follows:
(a) The City shall apply the proceeds of the Loan solely to the financing,
refinancing or reimbursement of the costs of the 2001 Project as set forth in Appendix A
hereto and this Section 3.1. The Loan will be disbursed in accordance with Article IV
hereof and Article VII of the Indenture. If the 2001 Project has not been completed prior
to Closing, the City shall, as quickly as reasonably possible, complete the 2001 Project
and expend proceeds of the Series 2001 Bond to pay the costs of completing the 2001
Project.
(b) No portion of the proceeds of the Loan shall be used to reimburse the City
for costs paid prior to the date of adoption of this Supplemental Resolution of a Project
the construction or acquisition of which occurred or began earlier than June 1, 1993. In
addition, if any proceeds of the Loan are to be used to reimburse the City for 2001 Project
costs paid prior to the date of adoption of this Supplemental Resolution, the City shall
have complied with Section 1.150-2 of the Regulations in respect of such costs.
(c) Any Debt to be refinanced with proceeds of the Loan was incurred after
June 1, 1993 for a Project the construction or acquisition of which began after June 1, _
1993. No proceeds of the Loan shall be used for the purpose of refinancing an obligation
the interest on which is exempt from federal income tax or excludable from gross income
for purposes of federal income taxation unless the DNRC has received an Opinion of
Bond Counsel, satisfactory to it, to the effect that such refinancing will not adversely
affect the exclusion of interest on the State Bonds from gross income for purposes of
federal income taxation.
Section 3.2. The 2001 Project. Set forth in Appendix A to this Supplemental
Resolution is a description of the 2001 Project, which describes the property which has been or is
to be acquired, installed, constructed or improved and the other activities, if any to be futuled
from the Loan (the 2001 Project may consist of more than one facility or activity). The 2001
Project may be changed and the description thereof in Appendix A may be amended from time to
time by the City but only after delivery to the DNRC of the following:
(a) A certificate of the City setting forth the amendment to Appendix A and
stating the reason therefor, including statements whether the amendment would cause an
increase or decrease in the cost of the 2001 Project, an increase or decrease in the amount
of Loan proceeds which will be required to complete the 2001 Project and whether the
change will materially accelerate or delay the construction schedule for the 2001 Project;
2237
(c) An Opinion or Opinions of Bond Counsel stating that the 2001 Project, as
constituted after such amendment, is, and was at the time the State Bonds were issued,
eligible for financing under the State Act and is, and was at the time the Series 2001 Bond
was issued, eligible for financing under the Act, such amendment will not violate the
State Act or the Act and such amendment will not adversely affect the exclusion of
interest on the State Bonds or the Series 2001 Bond from gross income for purposes of
federal income taxation. Such an Opinion of Bond Counsel shall not be required for
amendmen#s which do not affect the type of facility to be constructed or activity to be
financed.
The City acknowledges and agrees that an increase in the principal amount of the Loan
may be made only upon an application to the DEQ, the DNRC and the Trustee, in such form as
the DEQ shall specify, which is approved by the DEQ and the DNRC, in their sole and absolute
discretion, and adoption by the governing body of the City of a resolution amendatory of or
supplementary to the Resolution authorizing the additional loan and delivery of written'
certifications by officers of the City to the DEQ, the DNRC and the Trustee to the .effect that all
representations and covenants contained in the resolution as it may be so amended or
supplemented are true as of the date of closing of the additional loan and compliance with
applicable tests for the incurrence of such Debt. No assurance can be given that any additional
loan fends will be available under the Program at the time of any such application or thereafter.
The City acknowledges and agrees that neither the DEQ, the DNRC, the Trustee nor any of their
agents, employees or representatives shall have any liability to the City and have made no
representations to the City as to the sufficiency of the Loan to pay Project Costs or as to the
availability of additional funds under the Program to increase the principal amount of the Loan.
Section 3.3. 2001 Project Representations and Covenants. The City hereby represents
to and covenants with the DNRC that:
(a) all construction of the 2001 Project has complied and will comply with all
federal and state standards, including, without limitation, EPA regulations and standards;
(b) all future construction of the 2001 Project will be done only pursuant to
fixed price construction contracts. The City shall obtain a performance and payment
bond from the contractor for each construction contract in the amount of 100% of the
construction price and ensure that such bond is maintained until construction is
completed to the City's, the DNRC's and the DEQ's satisfaction;
(c) all future construction will be done in accordance with plans and
specifications on file with the DNRC and the DEQ, provided that changes may be made
in such plans and specifications with the written consent of an Authorized DNRC Officer
and the DEQ; and
(d) the 2001 Project is a project of the type permitted to be financed under the
Act, the State Act and the Program and Section 1452 of the Safe Drinking Water Act.
Section 3.4. Completion or Cancellation or Reduction of Costs of the 2001 Project.
(a) Upon completion of the 2001 Project, the City shall deliver to the DNRC a
certificate stating that the 2001 Project is complete, stating the amount, if any, of the .
Reserved Amounts, and releasing the remaining amount, if any, of the Committed
Amount. If any Reserved Amount is not later needed, the City shall so inform the DNRC
and release such amount. If Appendix A describes two or more separate projects as
r makina un the 2001 Proiect a separate completion certificate shall be delivered for each.
22-38
ARTICLE IV
THE LOAN
Section 4.1. The Loan; Disbursement of Loan. The DNRC has agreed to lend to the
City, from time to time as the requirements of this Section 4.1 are met, an amount up to $761,000
(the "Committed Amount") for the purposes of financing, refinancing or reimbursing the City for
the costs of the 2001 Project; provided the DNRC shall not be required to loan any proceeds of
the State Bonds to the City after March 1, 2002. The Committed Amount may be reduced as
provided in Sections 3.2(a) and 3.4 of this Supplemental Resolution. The Loan shall be
disbursed as provided in this Section 4.1. The DNRC intends to disburse the Loan through the
Trustee.
(a) In consideration of the issuance of the Series 2001 Bond by the City, the DNRC
shall make, or cause the Trustee to make, a disbursement of all or a portion of the Loan upon
receipt of the following documents:
(1) an Opinion of Bond Counsel as to the validity and enforceability of the Series
2001 Bond and the security therefor and stating in effect that interest on the Series 2001
Bond is not includable in gross income for purposes of federal income taxation, in form
and substance satisfactory to the DNRC;
(2) the Series 2001 Bond, fully executed and authenticated;
(3) a certified copy of the Resolution and this Supplemental Resolution;.
(4) any other security instruments or documents required by the DNRC or DEQ
as a condition to their approval of the Loan;
(5) if all or part of a Loan is being made to refinance a Project or reimburse the
City for the costs of a Project paid prior to the Closing, evidence, satisfactory to the
DNRC and the Bond Counsel referred to in (1) above, (A) that the acquisition or
construction of the Project was begun no earlier than June 1, 1993 or the debt was
incurred no earlier than June 1,1993, (B) of the City's title to the Project, (C) of the costs
of such Project and that such costs have been paid by the City and (D) if such costs were
paid before adoption of this Supplemental Resolution that the City has complied with
Section 1.150-2 of the Regulations;
(6) the items required by the Indenture for the portion of the Loan to be disbursed
at Closing;
(7) payment or provision for payment of the Administrative Fee and the
Origination Fee; and
(8) such other certificates, documents and other information as the DNRC; the
DEQ or the Bond Counsel giving the opinion referred to in subparagraph (1) may require
(including any necessary arbitrage rebate instructions).
(b) In order to obtain a disbursement of a portion of the Loan to pay costs of the 2001
Project, the City shall submit to the DNRC and the Trustee a signed request for disbursement on
the form prescribed by the DNRC, with all attachments required by such form. The City may
obtain disbursements only for costs which have been legally incurred and are due and payable.
All Loan disbursements will be made to the City only upon proof that cost was incurred.
2239
(d) For refinancings, a disbursement schedule complying with the requirements of the
Safe Drinking Water Act shall, be established by the DNRC and the City at Closing. The Trustee
shall disburse Loan amounts directly to the holder of the debt being refinanced according to such
schedule. If the City should repay all or a portion of the debt to be refinanced from other sources
or should otherwise not need any portion of the Loan which was to have been used to refinance
such debt, it shall inform the�DNRC and the Trustee of such fact pursuant to Section 3.4(b) and a
new disbursement schedule shall be drawn up by the DNRC. The DNRC shall obtain a receipt
from the holder of the debt being refinanced for each disbursement made to pay or prepay a
portion of such debt.
(e) If all or a portion of a Loan is made to reimburse a City for Project costs paid by it
prior to Closing, the City shall present at Closing the items required by Section 4.1(b) relating to
such costs. The Trustee shall disburse such amounts to the City pursuant to a disbursement
schedule complying with the requirements of the Safe Drinking Water Act established by the
DNRC and the City at the Closing.
(f) Notwithstanding anything else provided herein, the Trustee shall not be obligated to
disburse the Loan any faster or to any greater extent than it has available EPA Capitalization
Grants, Bond proceeds and other amounts available therefor in the Revolving Fund. The DNRC
shall not be required to do "overmatching" pursuant to Section 5.04(b) of the Indenture, but may
do so in its discretion. The City acknowledges that if Project costs are incurred faster than the
City projected at Closing, there may be delays in making Loan disbursements for such costs
because of the schedule under which EPA makes EPA Capitalization Grant money available to
the DNRC. The DNRC will use its best efforts to obtain an acceleration of such schedule if
necessary.
(g) Upon making each Loan disbursement, the Trustee is to note such disbursement on
Schedule A to the Series 2001 Bond.
(h) The City agrees that it will deposit in the Reserve Account upon receipt any
proceeds of the Loan borrowed for the purpose of causing the balance in the Reserve Account
equal the Reserve Requirement, either on the Closing Date of the Loan or upon any disbursement
date. The City further acknowledges and agrees that any portions of the Loan representing
capitalized interest shall be advanced only on Payment Dates and shall be transferred by the
Trustee on the Payment Date directly to the Debt Service Account. The amount of any such
transfer shall be a credit against the interest payments due on the Series 2001 Bond and interest
thereon shall accrue only from the date of transfer.
(i) Compliance by the City with its representations, covenants and agreements
contained in the Resolution, this Supplemental Resolution and the Collateral Documents shall be
a further condition precedent to the disbursement of the Loan in whole or in part. The DNRC
and the Trustee, in their sole and absolute discretion, may make one or more disbursements, in
whole or in part, notwithstanding such noncompliance, and without liability to make any
subsequent disbursement of the Loan.
Section 4.2. Commencement of Loan Term. The City's obligations under this
Supplemental Resolution and the Collateral Documents shall commence on the date hereof
unless otherwise provided in this Supplemental Resolution. However, the obligation to make
payments under Article V hereof shall commence only upon the first disbursement by the Trustee
of Loan proceeds.
Section 4.3. Termination of Loan Term. The City's obligations under the Resolution
and the Collateral Documents in recnPrt of the Cpriae InnI Ttnvi to o17n11 +�; +s ,,.. __
2240
ARTICLE V
REPAYMENT OF LOAN
section 5.1. Re a ment of Loan The City shall repay the amounts lent to it pursuant
to Section 4.1 hereof, plus interest on the unpaid amounts lent at the rate of two and twenty-five
hundredths percent (2.251/o) per annum, in semiannual Loan Repayments. In addition, the City
shall pay an Administrative Expense Surcharge on the outstanding principal amount of the Loan
at the rate of seventy-five hundredths of one percent (0.75%) per annum and a Load Loss
Reserve Surcharge equal to one percent (1.00%) per annum on the outstanding principal amount
of the Loan. For purposes of this Resolution and the Program, the term "Interest on the Loan"
shall include the Administrative Expense Surcharge and the Loan Loss Reserve Surcharge. The
City shall pay all Loan Repayments and Administrative Expense Surcharge and Loan Loss
Reserve Surcharge in lawful money of the United States of America to the DNRC. Interest and
Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall be calculated on the
basis of a year of 360 days comprising 12 months of 30 days each.
The Loan Repayments required by this Section 5.1, and the Administrative Expense
Surcharge and the Loan Loss Reserve Surcharge, shall be due on each January 1 and July 1 (the
"Payment Dates"), as follows:
(1) interest and Administrative Expense Surcharge and Loan Loss Reserve
Surcharge on the outstanding principal balance of the Loan shall be payable on each
January 1 and July 1, beginning on the first Payment Date after the closing of the Loan
(unless the Loan is closed within 30 days of the first Payment Date in which case
payments shall begin on the next succeeding payment date; and
(2) the principal of the Loan shall be repayable on each Payment Date,
beginning on July 1, 2001 and concluding on January 1, 2021, and the amount of each
principal payment shall be calculated on the basis of level debt service at an interest rate
of 4.00% per annum.
The payments of principal of and interest and Administrative Expense Surcharge and
Loan Loss Reserve Surcharge on the Loan shall be due on the dates and in the amounts .shown in
Schedule B to the Series 2001 Bond, as such Schedule B shall be modified from time to time as
provided below. The portion of each such Loan Repayment consisting of principal and the
portion consisting of interest and the amount of each Administrative Expense Surcharge and the
amount of each Loan Loss Reserve Surcharge shall be set forth in Schedule B to the Series 2001
Bond. Upon each disbursement of Loan amounts to the City pursuant to Section 4.1 hereof, the
Trustee shall enter or cause to be entered the amount advanced on Schedule A to the Series 2001
Bond under "Advances" and the total amount advanced under Section 4.1, including such
disbursement, under "Total Amount Advanced."
If the advance was made to pay costs of the 2001 Project pursuant to Section 4.1(b),
interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge on such
advance shall accrue from the date the advance is made and shall be payable on each Payment
Date thereafter. Once the completion certificate for the 2001 Project has been delivered to the
DNRC, the Trustee shall revise Schedule B to the Series 2001 Bond in accordance with this
Section 5.1 and the Trustee shall send a copy of such Schedule B to the City within one month
after delivery of the completion certificate.
Past -due payments of principal and interest and Administrative Expense Surcharge and
Loan Loss Reserve Surcharge shall bear interest at the rate of ten percent (10.00%) per annum,
2241
Section 5.2. Additional Payments. The City shall also pay, within 30 days after receipt
of a bill therefor, from any legally available funds therefor, including proceeds of the Loan, if the
City so chooses, all reasonable expenses of the DNRC and the Trustee in connection with the
Loan, the Collateral Documents and the Series 2001 Bond, including, but not limited to:
(1) the cost of reproducing this Supplemental Resolution, the Collateral
Documents and the Series 2001 Bond;
(2) the fees and disbursements of Bond Counsel and other Counsel utilized by
the DNRC and the Trustee in connection with the Loan, the Resolution, the Collateral
Documents and the Series 2001 Bond and the enforcement thereof; and
(3) all taxes and other governmental charges in connection with the execution
and delivery of the Collateral Documents or the Series 2001 Bond, whether or not the
Series 2001 Bond is then outstanding, including all recording and filing fees relating to
the Collateral Documents and the pledge of the State's right, title and interest in and to
the Series 2001 Bond, the Collateral Documents and the Resolution under the Board
Resolution (and with the exceptions noted therein) and all expenses, including attorneys'
fees, relating to any amendments, waivers, consents or collection or enforcement
proceedings pursuant to the provisions hereof or thereof.
Section 5.3. Prepayments. The City may not prepay all or any part of the outstanding
principal amount of the Series 2001 Bond unless (i) it obtains the prior written consent of the
DNRC thereto, and (ii) no Loan Repayment or Administrative Expense Surcharge or Loan Loss
Reserve Surcharge is then delinquent. Any prepayment permitted by the DNRC must be
accompanied by payment of accrued interest and Administrative Expense Surcharge and Loan
Loss Reserve Surcharge to the date of prepayment on the amount of principal prepaid. if the
Series 2001 Bond is prepaid in part pursuant to this Section 5.3, such prepayments shall be
applied to principal payments in inverse order of maturity,
Section 5.4. Obligations of City Unconditional. The obligations of the City to make
the payments required by the Resolution and the Series 2001 Bond and to perform its other
agreements contained in the Resolution, the Series 2001 Bond and Collateral Documents shall be
absolute and unconditional, except as otherwise provided herein or in such documents. The City
(a) shall not suspend or discontinue any payments provided for in the Resolution and :he Series
2001 Bond, (b) shall perform all its other agreements in the Resolution, the Series 2001 Bond
and the Collateral Documents and (c) shall not terminate the Resolution, the Series 2001 Bond or
the Collateral Documents for any cause, including any acts or circumstances that may constitute
failure of consideration, destruction of or damage to the 2001 Project or the System, commercial
frustration of purpose, any dispute with the DNRC or the EPA, any change in the laws of the
United States or of the State or any political subdivision of either or any failure of the DNRC to
perform any of its agreements, whether express or implied, or any duty, liability or obligation
arising from or connected with the Resolution.
Section 5.5. Limited Liability. All payments of principal of and interest on the Loan
and other payment obligations of the City hereunder and under the Series 2001 Bond shall be
special, limited obligations of the City payable solely out of the Net Revenues and shall not,
except at the option of the City and as permitted by law, be payable out of any other revenues of
the City. The obligations of the City under the Resolution and the Series 2001 Bond shall never
constitute an indebtedness of the City within the meaning of any state constitutional provision or
statutory or charter limitation and shall never constitute or give rise to a pecuniary liability of the
- City or a charge against its general credit or taxing power.^ The taxing powers of the City may
2242
ARTICLE VI
INDEMNIFICATION OF DNRC, DEQ AND TRUSTEE
The City shall indemnify and save harmless the DNRC, the DEQ, the Trustee and their
officers, employees and agents (each an "Indemnified Party" or, collectively, the "Indemnified
Parties") against and from any and all claims, damages, demands, expenses, liabilities and losses
of every kind asserted by or on behalf of any Person arising out of, resulting from or in any way
connected with the condition, use, possession, conduct, management, planning, design,
acquisition, construction, installation or financing of the 2001 Project. The City shall also
indemnify and save harmless the Indemnified Parties against and from all costs, reasonable
counsel fees, expenses and liabilities incurred in any action or proceeding brought by reason of
any such claim or demand. If any proceeding is brought against an Indemnified Party by reason
of any such claim or demand, the City shall, upon notice from the Indemnified Party, defend such
proceeding on behalf of the Indemnified Party. Notwithstanding the foregoing, the City shall not
be obligated to indemnify an Indemnified Party or any of its officers, employees or agents or hold
any of them harmless against or from or in respect of any claim, damage, demand, expense,
liability or loss arising from the intentional or willful misconduct or gross negligence of the
Indemnified Parties.
ARTICLE VII
ASSIGNMENT
Section 7.1. Assignment by City. The City may not assign its rights and obligations
under the Resolution or the Series 2001 Bond.
Section 7.2. Assignment by DNRC. The DNRC will pledge its rights under and
interest in the Resolution, the Series 2001 Bond and the Collateral Documents (except to the
extent otherwise provided in the Indenture) as security for the payment of the State Bonds and
may further assign such interests to the extent permitted by the Indenture, without the consent of
the City.
Section 7.3. State Refunding Bonds. In the event the State Bonds and Additional State
Bonds are refunded by bonds which are not Additional State Bonds, all references in the
Resolution to State Bonds and Additional State Bonds shall be deemed to refer to the refunding
bonds and any bonds of the State on a parity with such refunding bonds (together, the "Refunding
Bonds") or, in the case of a crossover refunding, to the State Bonds and Additional State Bonds
and the Refunding Bonds. In the event the State Bonds are refunded by an issue of Additional
State Bonds, all references in the Resolution to the State Bonds shall be deemed to refer to such
Additional State Bonds or, in the case of a crossover refunding, both the State Bonds and such
Additional State Bonds.
ARTICLE VIII
THE SERIES 2001 BOND
Section S.1. Net Revenues Available. The City is authorized to charge just and
equitable rates, charges and rentals for all services directly or indirectly furnished by the System,
and to pledge and appropriate to the Outstanding Bonds and the Series 2001 Bond the Net
2243
Section 8.2. Issuance and Sale of the Series 2001 Bond. The Council has investigated
the facts necessary and hereby finds, determines and declares it to be necessary and desirable for
the City to issue the Series 2001 Bond to evidence the Loan. The Series 2001 Bond is issued to
the DNRC without public sale pursuant to Montana Code Annotated, Section 7-7-4433(2)(a).
Section 8.3. Terms. The Series 2001 Bond shall be in the maximum principal amount
equal to the original Committed Amount of the Loan, shall be issued as a single, fully registered
bond numbered R-1, shall be dated as of the date of delivery to the DNRC, and shall bear interest
at the rate charged by the DNRC on the Loan. The principal of and interest on the Series 2001
Bond shall be payable on the same dates and in the same amounts as principal and interest of the
Loan Repayments are payable. Advances of principal of the Series 2001 Bond shall be deemed
made when advances of the Loan are made under Section 4.1, and such advances shall be
payable in accordance with Schedule B to the Series 2001 Bond, as it may be revised by the
DNRC from time to time in accordance with Section 5.1.
The City may prepay the Series 2001 Bond, in whole or in part, only upon the terms and
conditions under which it can prepay the Loan under Section 5.3.
Section 8.4. Ne otiabili Transfer and Registration- The Series 2001 Bond shall be
fully registered as to both principal and interest, and shall be initially registered in the name of
and payable to the DNRC. While so registered, principal of and interest on the Series 2001 Bond
shall be payable to the DNRC at the Office of the Department of Natural Resources and
Conservation, 1625 Eleventh Avenue, Helena, Montana 59620-1601 or such other place as may
be designated by the DNRC in writing and delivered to the City. The Series 2001 Bond shall be
negotiable, subject to the provisions for registration and transfer contained in this Section. No
transfer of the Series 2001 Bond shall be valid unless and until (1) the holder, or his duly
authorized attorney or legal representative, has executed the form of assignment appearing on the
Series 2001 Bond, and (2) the Finance Director of the City (or successors, the "Registrar"), as
Bond Registrar, has duly noted the transfer on the Series 2001 Bond and recorded the transfer on
the registration books of the Registrar. The Registrar may, prior to noting and recording the
transfer, require appropriate proof of the transferor's authority and the genuineness of the
transferor's signature. The City shall be entitled to deem and treat the Person in whose name the
Series 2001 Bond is registered as the absolute owner of the Series 2001 Bond for all purposes,
notwithstanding any notice to the contrary, and all payments to the registered holder shall be
valid and effectual to satisfy and discharge the City's liability upon such Bond to the extant of the
sum or sums so paid.
Section 8.5. Execution and Delivegy. The Series 2001 Bond shall be executed on
behalf of the City by the manual signatures of the Mayor, City Manager and the City Finance
Director. Any or all of such signatures may be affixed at or prior to the date of delivery of the
Series 2001 Bond. The Series 2001 Bond shall be sealed with the corporate seal of the City. In
the event that any of the officers who shall have signed the Series 2001 Bond shall cease to be
officers of the City before the Series 2001 Bond is issued or delivered, their signatures shall
remain binding upon the City. Conversely, the Series 2001 Bond may be signed by an authorized
official who did not hold such office on the date of adoption of this Supplemental Resolution.
The Series 2001 Bond shall be delivered to the DNRC, or its attorney or legal representative.
Section 8.6. Form. The Series 2001 Bond shall be prepared in substantially the form
attached as Appendix B.
a ARTICLE IX
2244
of the Water System Fund, without preference or priority, all as provided in the Resolution, and
secured by the Reserve Account, as further provided in Section 7.05 of the Resolution. Upon
advancement of principal of the Series 2001 Bond, the Finance Director shall transfer from
available funds of the System or proceeds of the Series 2001 Bond such amount or amounts to
the Reserve Account to cause the balance therein to equal the Reserve Requirement, treating such
principal amount as Outstanding. Upon the first advance of proceeds of the Series 2001 Bond,
the deposit to the Reserve Account shall be sufficient to cause the balance in the Reserve
Account to equal the Reserve Requirement in respect of the Series 1996 Bonds and the principal
of the Series 2001 Bond so advanced. The City shall keep, perform and observe each and every
one of its covenants and undertakings set forth in the Resolution for the benefit of the registered
owners from time to time of the Series 2001 Bond.
ARTICLE X
TAX MATTERS
Section 10.1. Use of 2001 Project. The 2001 Project will be owned and operated by
the City and available for use by members of the general public on a substantially equal basis.
The City shall not enter into any lease, use or other agreement with any non -governmental person
relating to the use of the 2001 Project or the System or security for the payment of the Series
2001 Bond which might cause the Series 2001 Bond to be considered a "private activity bond" or
"private loan bond" within the meaning of Section 141 of the Code.
Section 10.2. General Covenant. The City covenants and agrees with the owners from
time to time of the Series 2001 Bond 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 2001 Bond
to become includable in gross income for federal income tax purposes under the Code and the
Regulations, and covenants to take any and all actions within its powers to ensure that the interest
on the Series 2001 Bond will not become includable in gross income for federal income tax
purposes under the Code and the Regulations.
Section 10.3. Arbitrage Certification. The Mayor, City Manager and the City Finance
Director, being the officers of the City charged with the responsibility for issuing the Series 2001
Bond pursuant to the Resolution, are authorized and directed to execute and deliver to the DNRC
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 2001 Bond, it is reasonably expected that
the proceeds of the Series 2001 Bond will be used in a manner that would not cause the Series
2001 Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code and the
Regulations.
Section 10.4. Arbitraize Rebate Exem lion.
(a) The Borrower hereby represents that the Series 2001 Bond qualifies for the
exception for small governmental units to the arbitrage rebate provisions contained in Section
148(f) of the Code. Specifically, the Borrower represents:
(1) Substantially all (not less than 95%) of the proceeds of the Series 2001
Bond (except for amounts to be applied to the payment of costs of issuance) will be used
for local governmental activities of the Borrower.
(2) The aggregate face amount of all "tax-exempt bonds" (including warrants, M
2245
(b) If notwithstanding the provisions of paragraph (a) of this Section 10.4, the
arbitrage rebate provisions of Section 148(f) of the Code apply to the Series 2001 Bond, the
Borrower hereby covenants and agrees to make the determinations, retain records and rebate to
the United- States the amounts at the times and in the manner required by said Section 148(t).
Section 10.5. Information Re ortin . The City shall file with the Secretary of the
Treasury, not later than May 15, 2001, a statement concerning the Series 2001 Bond containing
the information required by Section 149(e) of the Code.
Section 10.6. " ualified T -Exem t Obligations.'! Pursuant to Section
265(b)(3)(B)(ii) of the Code, the City hereby designates the Series 2001 Bond as a "qualified tax-
exempt obligation" for purposes of Section 265(b)(3) of the Code. The City has not designated
any obligations in 2001 under Section 265(b)(3) other than the Series 2001 Bond. The City
hereby represents that it does not anticipate that obligations bearing interest not includable in
gross income for purposes of federal income taxation under Section 103 of the Code (including
refunding obligations as provided in Section 265(b)(3) of the Code and including "qualified
501(c)(3) bonds" but excluding other "private activity bonds," as defined in Sections 141(a) and
145(a) of the Code) will be issued by or on behalf of the City and all "subordinate entities" of the
City in 2001 in an amount greater than $10,000,000.
ARTICLE XI
CONTINUING DISCLOSURE
The City understands and acknowledges that the DNRC is acquiring the Series 2001
Bond under the Program pursuant to which the State issues from time to time State Bonds to
provide funds therefor. The City covenants and agrees that, upon written request of the DNRC
from time to time, the City will promptly provide to the DNRC all information that the DNRC
reasonably determines to be necessary or appropriate to offer and sell State Bonds or to provide
continuing disclosure in respect of State Bonds, whether under Rule 15c2-12 (17 C.F.R. §
240.15c2-12) promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, or. otherwise. Such information shall include, among other
things and if so requested, financial statements of the City 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 (such financial statements to relate to a fiscal year or any period therein
for which they are customarily prepared by the City, and, if for a fiscal year and so requested by
the DNRC, subject to an audit report and opinion of an accountant or government auditor, as
permitted or required by the laws of the State). The City will also provide, with any information
so furnished to the DNRC, a certificate of the Mayor, the City Manager and the City Clerk of the
City to the effect that, to the best of their knowledge, such information does not include any
untrue statement of a material fact or omit to state any material fact required to be stated therein
to make the statements made, in light of the circumstances under which they are made, not
misleading.
ARTICLE XII
MISCELLANEOUS
2246
DNRC: Department of Natural Resources
and Conservation
1625 Eleventh Avenue
P. O. Box 201601
Helena, Montana 59620-1601
Attn: Conservation and Resource
Development Division
Trustee: U.S. Bank Trust National Association MT
c/o Corporate Trust Services
Two Union Square
601 Union Street, Suite 2120
Seattle, Washington 98101
City: City of Kalispell
312 - I' Avenue East
P. 0. Box 1997
Kalispell, Montana 59903
Attn: City Manager
Any of the above parties may, by notice in writing given to the others, designate any further or
different addresses to which subsequent notices or other communications shall be sent.
Section 12.2. Binding Effect. This Supplemental Resolution shall inure to the benefit
of and shall be binding upon the DNRC, the City and their respective successors and assigns.
Section 12.3. Severability. If any provision of this Supplemental Resolution shall be
determined to be unenforceable at any time, it shall not affect any other provision of the
Resolution or the enforceability of that provision at any other time.
Section 12.4. Amendments. This Supplemental Resolution may not be effectively
amended without the written consent of the DNRC.
Section 12.5. Applicable Law. This Supplemental Resolution shall be governed by and
construed in accordance with the internal laws of the State.
Section 12.6. Ca tions• References to Sections. The captions in this Supplemental
Resolution are for convenience only and do not define or limit the scope or intent of any
provisions or Sections of this Supplemental Resolution.
Section 12.7. No Liability. of Individual Officers, Directors or Trustees. No recourse
under or upon any obligation, covenant or agreement contained in this Supplemental Resolution
shall be had against any director, officer or employee, as such, past, present or future, of the
DNRC, the DEQ or the Trustee, either directly or through the DNRC, the DEQ or the Trustee, or
against any officer, or member of the governing body or employee of the City, past, present or
future, as an individual so long as such individual was acting in good faith. Any and all personal
liability of every nature, whether at common law or in equity, or by statute or by constitution or
otherwise, of any such officer or member of the governing body or employee of the DNRC, the
Trustee or the City is hereby expressly waived and released by the City and by the DNRC as a
condition of and in consideration for the adoption of this Resolution and the making of the Loan.
Section 12.8. Payments Due on Holidgys. If the date for making any payment or the
2247
Section 12.9. Right of Others To Perform City's Covenants. In the event the City shall
fail to make any payment or perform any act `required to be performed hereunder, then and in
each such case the DNRC or the provider of any Collateral. Document may (but shall not be
obligated to) remedy such default for the account of the City and make advances for that purpose.
No such performance or advance shall operate to release the City from any such default and any
sums so advanced by the DNRC or the provider of any Collateral Document shall be paid
immediately to the party making such advance and shall bear interest at the rate of ten percent
(10.00%) per annum from the date of the advance until repaid. The DNRC and the provider of
any Collateral Document shall have the right to enter the 2001 Project or the facility or facilities
of which the 2001 Project is a part or any other facility which is a part of the System in order to
effectuate the purposes of this Section.
Section 12.10. Authentication of Transcript. The officers of the City are hereby
authorized and directed to furnish to the DNRC and to Bond Counsel certified copies of all
proceedings relating to the issuance of the Series 2001 Bond and such other certificates and
affidavits as may be required to show the right, power and authority of the City to issue the Series
2001 Bond, and all statements contained in and shown by such instruments, including any
heretofore furnished, shall constitute representations of the City as to the truth of the statements
of fact purported to be shown thereby.
Section 12.11. Effective Date. This Supplemental Resolution shall take effect
immediately.
Adopted by the City Council of the City of Kalispell, Montana, on this 5th day of
March, 2001.
Attest: . S
City Clerk
r.i"a L�.. •.�'ati �Y. G i�i
F) t t1
f•+il7iljCiOi i�l': ii��t�t1
WM F- .baharsM
Mayor
M
2248
APPENDIX A
Description of the 2001 Project
The cost of designing and engineering upgrades and improvements to the water system,
which will include installation of a 20-diameter water main, 10-inch diameter water mains,
valves, hydrants and appurtenant structures from the intersection of Main Street and Sunset
Boulevard south to the intersection of Main Street and Center Street.
APPENDIX B -- -- ---- - -
[Form of the Series 2001 Bond]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FLATHEAD
CITY OF KALISPELL
WATER SYSTEM REVENUE BOND
(DNRC DRINKING WATER REVOLVING LOAN PROGRAM)
SERIES 2001
1*1W
$761,000
FOR VALUE RECEIVED, THE CITY OF KALISEPLL, MONTANA (the "City"), a
duly organized municipal corporation and political subdivision of the State of Montana,
acknowledges itself to be specially indebted and, for value received, hereby promises to pay to
the Department of Natural Resources and Conservation of the State of Montana (the "DNRC'),
or its registered assigns, solely from the Debt Service Account of its Water System Fund, the
principal sum equal to the sum of the amounts entered on Schedule A hereto under "Total
Amount Advanced," with interest on each such amount from the date such amount is advanced
hereunder at the rate of two and one -quarter percent (2.25%) per annum on the unpaid balance
until paid. In addition, the City shall pay an Administrative Expense Surcharge and a Loan Loss
Reserve Surcharge on the outstanding principal amount of this Bond at the rates of seventy-five
hundredths of one percent (0.75%) and one percent (1.00%), respectively, per annum. Interest
and Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall be payable in
semiannual installments payable on each January 1 and July 1 (each a "Loan Repayment Date")
commencing July 1, 2001. Principal shall be payable on the dates set forth in Schedule B hereto.
Each installment shall be in the amount set forth opposite its due date in Schedule B hereto under
"Total Loan Payment." The portion of each such payment consisting of principal, the portion
consisting of interest and the portion consisting of Administrative Expense Surcharge and the
portion consisting of Loan Loss Reserve Surcharge shall be as set forth in Schedule B hereto.
Upon each disbursement of Loan amounts to the City pursuant to the Resolution described
below, the DNRC shall enter (or cause to be entered) the amount advanced on Schedule A under
"Advances" and the total amount advanced under the Resolution (as hereinafter defined),
including such disbursement, under "Total Amount Advanced." The DNRC shall prepare
Schedule B and revised Schedules B, or cause Schedule B and revised Schedules B to be
prepared, as provided in Section 5.1 of the Resolution. Schedule B shall be calculated and
recalculated on a level debt service basis assuming an interest rate of four percent (4.00%) per a
2249
amended and supplemented by Resolution No. 4603, adopted March 5, 2001 (as so amended and
supplemented, the "Resolution"). The Series 2001 Bond is issuable only as a single, fully
registered bond. The Series 2001 Bond is issued on a parity and is equally and ratably secured by
the Net Revenues of the System with the City's outstanding Water System Revenue Bonds,
Series 1996 (the "Series 1996 Bonds").
Reference is made to the Resolution for a more complete statement of the terms and
conditions upon which the Series 2001 Bond has been issued, the Net Revenues of the System
pledged and appropriated for the payment and security thereof, the conditions upon which
additional bonds may be issued under the Resolution and made payable from such Net Revenues
on a parity with the Series 1996 Bonds and the Series 2001 Bond (collectively, the "Bonds") or
otherwise, the conditions upon which the Resolution may be amended, the rights, duties and
obligations of the City, and the rights of the owners of the Series 2001 Bond.
The City may prepay the principal of the Series 2001 Bond only if (i) it obtains the prior
written consent of the DNRC thereto, and (ii) no Loan Repayment or Administrative Expense
Surcharge or Loan Loss Reserve Surcharge is then delinquent. Any prepayment permitted by the
DNRC must be accompanied by payment of accrued interest and Administrative Expense
Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the amount of
principal prepaid. If the Series 2001 Bond is prepaid in part, such prepayments shall be applied
to principal payments in inverse order of maturity.
The Bonds, including interest and any premium for the redemption thereof, are payable
solely from the Net Revenues pledged for the payment thereof and do not constitute a debt of the
City within the meaning of any constitutional, statutory or charter limitation or provision.
The City may deem and treat the person in whose name this Series 2001 Bond is
registered as the absolute owner hereof, whether this Series 2001 Bond is overdue or not, for the
purpose of receiving payment and for all other purposes, and the City shall not be affected by any
notice to the contrary.
This Series 2001 Bond has been designated by the City as a "qualified tax-exempt
obligation" pursuant to Section 265 of the Internal Revenue Code of 1986, as amended.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the
City has duly authorized and will forthwith undertake the improvements to the System
hereinabove described, has fixed and established and will collect reasonable rates and charges for
the services and facilities afforded by the System, and has created a special Water System Fund
into which the Revenues (as defined in the Resolution) of the System, including all additions
thereto and replacements and improvements thereof, will be paid, and a separate and special Debt
Service Account in that fund, into which will be paid each month, Net Revenues of the System
then on hand (the gross revenues remaining after the payment of operating expenses of the
System), an amount equal to not less than the sum of one -sixth of the interest due within the next
six months and one -twelfth of the principal due within the next twelve months with respect to all
outstanding Bonds payable from that account, and a Reserve Account in that fund into which
shall be paid additional Net Revenues sufficient to establish and maintain a reserve therein equal
to, as of the date of calculation, the maximum amount of Principal and Interest Requirements on
all Outstanding Bonds in the current or any future Fiscal Year (giving effect to any mandatory
sinking fund redemption); that the Debt Service Account and the Reserve Account will be used
only to pay the principal of, premium, if any, and interest on the Bonds issued pursuant to the
authority herein recited; that the rates and charges for the System will from time to time be made
and kept sufficient to provide Net Revenues (Revenues less Operating Expenses, as defined in
the Resolution) for each Fiscal Year at least equal to 125% of the nrincinal and interest navahle
2250
certain conditions set forth in the Resolution but no obligation will be otherwise incurred and
made payable from the Net Revenues, whether or not such obligation shall also constitute a
general obligation and indebtedness of the City, unless the lien thereof shall be expressly made
subordinate to the lien of the Series 1996 Bonds, the Series 2001 Bond and other Additional
Bonds on such Net Revenues; that all provisions for the security of this Series 2001 Bond set
forth in the Resolution will be punctually and faithfully performed as therein stipulated; that all
acts, conditions and things required by the Constitution and laws of the State of Montana and the
ordinances and resolutions of the City to be done, to exist, to happen and to be performed in
order to make this Series 2001 Bond a valid and binding special obligation of the City according
to its terms have been done, do exist, have happened and have been performed as so required;
and that this Series 2001 Bond and the premium, if any, and interest hereon are payable solely
from the Net Revenues of the System pledged and appropriated to the Debt Service Account and
do not constitute a debt of the City within the meaning of any constitutional, statutory or charter
limitation or provision and the issuance of the Series 2001 Bond does not cause either the general
or the special indebtedness of the City to, exceed any constitutional, statutory or charter
limitation.
IN WITNESS WHEREOF, the City of Kalispell, Montana, by its governing body, has
caused this Bond to be executed by the signatures of its Mayor, City Manager and City Finance
Director, and has caused the official seal of the City t be affixed hereto, and has caused this
Bond to be dated as of the L* day of h2 2001.
wm.F- ,B&ars i
Mayor
City Manager
dP0wAlTE
SEAL
M0 Ci Finance Director
i
1
2251
RE ISMTION AND TRANSFER
This Bond shall be fully registered as to both principal and interest. No transfer of this
Bond shall be valid unless and until (1) the registered holder of the Bond, or his duly authorized
attorney or legal representative, executes the form of assignment appearing on this Bond, and (2)
the City Finance Director as bond registrar (the "Registrar', has duly noted the transfer on the
Bond and recorded the transfer on the Registrar's registration books. The City shall be entitled to
deem and treat the person in whose name this Bond is registered as absolute owner thereof for all
purposes, notwithstanding any notice to the contrary. Payments on account of the Bond shall be
made only to the order of the registered holder thereof, and all such payments shall be valid and
effectual to satisfy and discharge the City's liability upon the Bond to the extent of the sum or
sums so paid.
THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND
REGISTRAR UPON REGISTRATION OF EACH TRANSFER
The City Finance Director of the City of Kalispell, Montana, acting as Bond Registrar,
has transferred, on the books of the City, on the date last noted below, ownership of the principal
amount of and the accrued interest on this Bond to the new registered holder noted next to such
date, except for amounts of principal and interest theretofore paid.
Name of New Signature of
Date of Transfer Registered Holder Bond Registrar
FORM OF ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and does hereby
irrevocably constitute and appoint attorney to transfer
the Bond on the books kept for the registration thereof, with full power of substitution in the
premises.
Dated:
2252
SCHEDULE A
SCHEDULE OF AMOUNTS ADVANCED
Total Amount
Date Advances Advanced ___ Made By Notation
2253
SPATE OF MONTANA Schedule B
GENERAL OBLIGATION BONDS —�
DRINKING WATER
{REVOLVING FUND PROGRAM} SER Ol
BORROWER: Kalispell
PROJECT NAME:
FINAL LOAN PAYMENT:
7/1/2020
LOAN COMMITMENT:
$761,000
# OF LOAN PAYMENTS:
40
LOAN AMOUNT:
761,000
PROJECT NUMBER:
INTEREST RATE:
4.00%
DATE OF FUNDING:
3/20/2001
YIvI:NT
LOAN LOSS ADM wENSE
INTEREST
PRINCIPAL
O/S LOAN
TOTAL AMOUNT
DUE
RESERVE
SURCHARGE
PAYMENT
PAYMENT
BALANCE
OF PAYMENT
1
7/1/2001
2,135.03
1,601.27
4,803.81
13,000.00
748,000.00
$21,540.11
2
l/l/2002
3,740.00
2,805.00
8,415.00
13,000.00
735.000.00
$27,960.00
3
7/1/2002
3,675,00
2,756.25
8,268.75
13,000.00
722.000.00
$27,700.00
4
1/l/2003
3,610.00
2,707.50
8,122.50
13.000.00
709,000.00
$27,440.00
5
7/l/2003
3,545.00
2.658.75
7,976.25
14,000.00
695,000.00
$28,180.00
6
1/1/2004
3,475.00
2,606.25
7,818.75
14,000.00
681,000.00
$27,900.00
7
7/1/2004
3,405.00
2,553.75
7,661.25
14,000.00
667,000.00
$27,620.00
8
l/l/2005
3,335.00
2,501.25
7,503.75
14,000.00
653,000.00
$27.340.00
9
7/1/2005
3,265.00
2,448.75
7.346.25
15,000.00
638,000.00
$28.060.00
10
1/1/2006
3,190.00
2,392.50
7,177.50
15,000.00
623,000.00
$27.760 0Q
11
7/1/2006
3,115.00
2,336.25
7,008.75
15,000.00
608,000.00
$27.460.00
12
l/l/2007
3,040.00
2,280.00
6,840.00
16,000.00
592,000.00
$28,160.00
13
7/1/2007
2,960.00
2,220.00
6,660.00
16,000.00
576,000.00
$27,840.00
14
1/1/2008
2,880.00
2,160.00
6,480.00
16,000.00
560,000.00
$27,520.00
15
7/1/2008
2,800.00
2,100.00
6,300.00
17.000.00
543,000.00
$28,200.00
16
1/1/2009
2.715.00
2,036.25
6,108.75
17.000.00
526,000.00
$27.860.00
17
7/l/2009
2,630.00
1,972.50
5.917.50
17,000.00
509,000.00
$27.520.00
18
l/l/2010
2,545.00
1,908.75
5,726.25
18,000.00
491,000.00
$28,180.00
19
12010
2,455.00
1,841.25
5,523.75
18,000.00
473,000.00
$27,920.00
/2011
120
2,365.00
1,773.75
5,321.25
18,000.00
455,000.00
$27,460.00
2112011
2,275.00
1.706.25
5,118.75
19,000.00
436,000.00
$28.100.00
22
l/l/2012
2,180.00
1.635.00
4,905.00
19,000.00
417,000.00
$27,720.00
23
7/1/2012
2,085.00
1,563.75
4,691.25
19,000.00
398,000.00
$27,340.00
24
1/1/2013
1,990.00
1,492.50
4,477.50
20,000.00
378,000.00
$27,960.00
25
7/1/2013
1,890.00
1,417.50
4,252.50
20,000.00
358,000.00
$27,560.00
26
1/1/2014
1,790.00
1,342.50
4,027.50
21,000.00
337,000.00
$28,160.00
27
7/l/2014
1.685.00
1,263.75
3,791.25
21,000.00
316.000.00
$27,740.00
28
1/1/2015
1,580.00
1,185.00
3.555.00
22,000.00
294,000.00
$28,320.00
29
7/1/2015
1,470.00
1,102.50
3,307.50
22.000.00
272,000.00
$27,880.00
30
1/1/2016
1,360.00
1,020.00
3,060.00
22,0D0.00
250,000.00
$27,440.00
31
7/1/2016
1,250.00
937.50
2,812.50
23.000.00
227.000.00
$28,000.00
32
l/l/2017
1,135.00
851.25
2.553.75
23.000.00
204,000.00
$27,540.00
33
7/1/2017
1,020.00
765.00
2,295.00
24.000.00
180,000.00
$28.090.00
34
1/1/2018
900.00
675.00
2.025.00
24,000.00
156,000.00
$27.600.00
35
7/112018
780.00
585.00
1.755.00
25.000.00
131,000.00
$28,120.00
36
1/1/2019
655.00
491.25
1,473.75
25,000.00
106,000.00
$27,620.00
37
7/1/2019
530.00
397.50
1.192.50
26,000.00
80,000.00
$28,120.00
38
1/l/2020
400.00
300.00
900.00
26,000.00
54,000.00
$27,600.00
39
7/1/2020
270.00
202.50
607.50
27.000.00
27.000.00
$28,080.00
40
l/112021
135.00
101.25
303.75
27.000.00
0.00
$27.540.00
■
86,260.03
64,695.02
194.085.06
761,000.00
1,106,040.11
2254
None
EXHIBIT C
ADDITIONAL REPRESENTATIONS AND COVENANTS
1
1