Resolution 4022 - Sewer Revenue Bonds2 4�0
CERTIFICATE AS TO RESOLUTION
I, the undersigned, being the duly qualified and acting recording officer
of the City of Kalispell, Montana (the "City") , hereby certify that the attached
resolution is a true copy of Resolution No. 4022, entitled: "RESOLUTION
RELATING TO $4,717,000 SEWERAGE SYSTEM REVENUE BONDS (DNRC
REVOLVING LOAN PROGRAM), SERIES 1991A; AUTHORIZING THE ISSUANCE
AND FIXING THE TERMS AND CONDITIONS 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 Council of the City at a meeting on November 4, 1991, and
that the meeting was duly held by the City Council 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that the Resolution has not as of the date hereof been amended or repealed.
WITNESS my hand officially this 4th day of November, 1991.
Finance Director
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CERTIFICATE AS TO RESOLUTION
I, the undersigned, being the duly qualified and acting recording officer
of the City of Kalispell, Montana (the "City") , hereby certify that the attached
resolution is a true copy of Resolution No. 4022, entitled: "RESOLUTION
RELATING TO $4,717,000 SEWERAGE SYSTEM REVENUE BONDS (DNRC
REVOLVING LOAN PROGRAM), SERIES 1991 A; AUTHORIZING THE ISSUANCE
AND FIXING THE TERMS AND CONDITIONS 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 Council of the City at a meeting on November 4,1991, and
that the meeting was duly held by the City Council 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that the Resolution has not as of the date hereof been amended or repealed.
WITNESS my hand officially this 4th day of November, 1991.
Finance Director
BOND RESOLUTION
Relating to
$4,717,000 SEWERAGE SYSTEM REVENUE BOND
(DNRC REVOLVING LOAN PROGRAM), SERIES 1991A
CITY OF KALISPELL
Adopted: November 4, 1991
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I
TABLE OF CONTENTS
EA&e
Recitals................................................................ 1
ARTICLE I
DEFINITIONS, RULES OF CONSTRUCTION AND APPENDICES
Section
1.1.
Definitions ............................................. 2
Section
1.2.
Other Rules of Construction ............................ 7
Section
1.3.
Appendices ......:.................................... 8
Section
1.4.
Outstanding Bonds .................................... 8
ARTICLE II
REPRESENTATIONS AND COVENANTS
Section 2.1. Representations ....................................... 8
Section 2.2. Covenants ............................................ 11
ARTICLE III
USE OF PROCEEDS; THE PROJECT
Section
3.1.
Use of Proceeds ........................................
15
Section
3.2.
The Project .............................................
15
Section
3.3.
Project Representations and Covenants ..................
17
Section
3.4.
Completion or Cancellation or Reduction of
Costs of the Project ......................................
17
ARTICLE IV
THE LOAN
Section
4.1.
The Loan; Disbursement of Loan ........................
18
Section
4.2.
Commencement of Loan Term .........................
20
Section
4.3.
Termination of Loan Term .............................
20
Section
4.4.
Loan Closing Submissions ................................
21
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ARTICLE V
REPAYMENT OF LOAN
Section
5.1.
Repayment of Loan ....................................
21
Section
5.2.
Additional Payments ....................................
22
Section
5.3.
Prepayments ..........................................
23
Section
5.4.
Obligations of Borrower Unconditional ..................
23
Section
5.5.
Limited Liability .......................................
23
ARTICLE VI
OTHER AGREEMENTS OF BORROWER
Section 6.1. Maintenance of Existence; Merger,
Consolidation, Etc.; Disposition of Assets ................ 24
Section 6.2. Covenants Relating to the Tax -Exempt
Status of the State Bonds ............................... 25
ARTICLE VII
INDEMNIFICATION OF DNRC, DHSS AND TRUSTEE .................. 28
ARTICLE VIII
ASSIGNMENT
Section 8.1.
Assignment by Borrower ...............................
28
Section 8.2.
Assignment by DNRC...................................
28
Section 8.3.
State Refunding Bonds ..................................
28
ARTICLE IX
THE SERIES 1991A BOND
Section 9.1.
Authorization ..........................................
29
Section 9.2.
Outstanding Wastewater Debt ..........................
29
Section 9.3.
Sources of Funding ....................................
29
Section 9.4.
Issuance as Parity Bond ..................................
29
Section 9.5.
Net Revenues Available ...............................
29
Section 9.6.
Section 9.7.
Issuance and Sale of the Series 1991 A Bond ..............
Terms ................................................
30
30
Section 9.8.
Negotiability, Transfer and Registration .................
30
I
Section 9.9. Execution and Delivery ................................ 31
Section 9.10. Form ................................................. 31
ARTICLE X
APPROPRIATION OF PROCEEDS OF THE SERIES 1991A BONDS.. 31
ARTICLE XI
SECURITY FOR THE SERIES 1991A BONDS
Section 11.1 Parity Bond ........................................... 31
Section 11.2 Funding of Reserve ..................................... 32
ARTICLE XII
TAX MATTERS
Section
12.1.
Use of Project .........................................
33
Section
12.2,
General Covenant .....................................
33
Section
12.3.
Arbitrage Certification .................................
33
Section
12.4.
Arbitrage Rebate ......................................
33
Section
12.5.
Information Reporting ..................................
34
ARTICLE XIII
MISCELLANEOUS
Section 13.1.
Notices ...............................................
35
Section 13.2.
Binding Effect .........................................
35
Section 13.3.
Severability...........................................
35
Section 13.4.
Amendments .........................................
35
Section 13.5.
Applicable Law ........................................
35
Section 13.6.
Captions; References to Sections ........................
35
Section 13.7.
No Liability of Individual Officers, Directors or Trustees....
35
Section 13.8.
Payments Due on Holidays .............................
35
Section 13.9.
Right of Others To Perform Borrower's Covenants .......
36
Section 13.10.
Authentication of Transcript ...........................
36
Section 13.11.
Effective Date ........ . ...............................
36
APPENDIX A --Description
APPENDIX B—Farm
of the Project
of Series 1991A Bond
APPENDIX C--Additional Representations and Covenants
RESOLUTION NO. 4022
RESOLUTION RELATING TO $4,717,000 SEWERAGE SYSTEM
REVENUE BONDS (DNRC REVOLVING LOAN PROGRAM), SERIES
1991A; AUTHORIZING THE ISSUANCE AND FIXING THE TERMS
AND CONDITIONS THEREOF
WHEREAS, pursuant to the Montana Wastewater Treatment
Revolving Fund Act, Montana Code Annotated, Title 75, Chapter 5, Part 11, as
amended (the "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 Health and Environmental Sciences of the
State of Montana, an agency of the State (the "DHES"), and has provided that a
revolving wastewater treatment works revolving fund (the "Revolving Fund") 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 water pollution control revolving fund
under the Federal Water Pollution Control Act (also known as the Clean Water Act)
(the "Clean 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 Clean Water Act and
according to rules adopted by the Board of Health and Environmental Sciences and
the Board of Natural Resources and Conservation; and
WHEREAS, the City of Kalispell, Flathead County, Montana (the
"Borrower"), has applied to the DNRC for a Ioan (the "Loan") from the Revolving
Fund to enable the Borrower to finance, refinance or reimburse itself for the costs of
the Project (as hereinafter defined) which will carry out the purposes of the Clean
Water Act; and
WHEREAS, the Borrower is authorized under applicable laws,
ordinances and regulations to adopt this Resolution and to issue the Series 1991A
Bond (as hereinafter defined) to evidence the Loan for the purposes set forth herein;
and
WHEREAS, the DNRC will fund the Loan in part, directly or indirectly,
with proceeds of the State's $2,595,000 General Obligation Bonds (Wastewater
Treatment Works Revolving Fund) Bonds, Series 1991AB (the "State Bonds") and
in part, directly or indirectly, with funds provided by the United States
Environmental Protection Agency.
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NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE BORROWER AS FOLLOWS:
ARTICLE I
DEFINITIONS, RULES OF CONSTRUCTION AND APPENDICES
Section 1.1. Definitions. In this Resolution, unless a different meaning
clearly appears from the context:
"Accountant" or "Accountants" means an independent certified public
accountant or a firm of independent certified public accountants satisfactory to the
DNRC.
"Acquisition and Construction Account" means the account within the
Fund established pursuant to Sections 12.1 and 12.2.
"Act" means Montana Code Annotated, Title 75, Part 5, Chapter 11, as
amended from time to time.
"Administrative Expense Surcharge" means a surcharge on the Loan
charged by the DNRC to the Borrower equal to seventy-five hundredths of one
percent (0.75%) per annum on the outstanding principal amount of the Loan,
payable by the Borrower on the same dates that payments of interest on the Loan are
due.
"Administrative Fee" means a fee equal to .00575% of the initial
Committed Amount, $27,781 retained by the DNRC from the proceeds of the Loan at
Closing.
"Authorized DNRC Officer" means the Director or Deputy Director of
the DNRC, and, when used with reference to an act or document, also means any
other individual authorized by resolution of the Board of Natural Resources and
Conservation to perform such act or sign such document. If authorized by a
resolution of the Board of Natural Resources and Conservation, an Authorized
DNRC Officer may delegate all or a portion of his authority as an Authorized DNRC
Officer to another individual and such individual shall be deemed an Authorized
DNRC Officer for purposes of exercising such authority.
"Bond Counsel" means any Counsel acceptable to the DNRC which is
nationally recognized as bond counsel. Counsel is nationally recognized as bond
counsel if it has rendered a legal opinion as to the validity and enforceability of state
or municipal bonds and as to the exclusion of interest thereon from gross income
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for federal income tax purposes (short-term issues excluded) during the two-year
period preceding the date of determination.
"Bonds" means the Outstanding Bonds, the Series 1991A Bond and any
additional bonds to be issued on a parity therewith pursuant to the Ordinance.
"Borrower" means the City of Kalispell, Montana.
"Business Day" means any day which is not a Saturday or Sunday and
is not a day on which banks in Montana are authorized or required by law to close.
"Clean Water Act" means the Federal Water Pollution Control Act, 33
U.S.C. §§ 1251-1387, as amended, and all regulations, rules and interpretations issued
by the EPA thereunder.
"Closing" means the date of delivery of the Bond to the DNRC.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Documents" means any security agreement, guaranty or
other document or agreement delivered to the DNRC securing the obligations of the
Borrower under this Resolution and the Series 1991A Bond. If no Collateral
Documents secure such obligations, any reference to Collateral Documents in this
Resolution shall be without effect.
"Committed Amount" means the amount of the Loan committed to be
lent by the DNRC to the Borrower pursuant to Section 4.1, as such amount may be
reduced pursuant to Sections 3.2(b), 3.4 and 9.2.
"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 Borrower 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 Borrower
for borrowed money or for the deferred purchase price of property or services; (2) the
obligation of the Borrower as lessee under leases which should be recorded as capital
leases under generally accepted accounting principles; and (3) obligations of the
Borrower under direct or indirect guarantees in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a
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creditor against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clause (1) or (2) above.
"DNRC" means the Department of Natural Resources and
Conservation of the State of Montana, an agency of the State, and any successor to its
powers, duties and obligations under the Act.
"DHES" means the Department of Health and Environmental Sciences
of the State of Montana, an agency of the State, or any successor to its powers, duties
and obligations under the Act or the EPA Agreements.
"Enabling Act" means Montana Code Annotated, Title 7, Chapter 7,
Part 44, as amended, which authorizes the Borrower to own and operate the System,
to undertake the Project and to issue the Series 1991A Bond to finance a portion of
the costs of the Project.
"EPA" means the Environmental Protection Agency, an agency of the
United States of America, and any successor to its functions under the Clean Water
Act.
"EPA Agreements" means all capitalization grant agreements and
other written agreements between the Department of Health and Environmental
Sciences of the State and the EPA concerning the Program.
"EPA Capitalization Grant" means a grant of funds to the State by the
EPA under Title VI of the Clean Water Act and any grant made available by the EPA
for deposit in the Revolving Fund pursuant to Section 245(m) of the Clean Water
Act.
"Event of Default" means any event described in Section 9.1 hereof.
"Fund" means the Sewage System Fund established pursuant to
Section 3 of the Ordinance.
"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 June 1, 1991,
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.
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"Loan" means the Loan made to the Borrower by the DNRC pursuant
to the Program in the maximum amount of the Committed Amount to provide
funds to pay all or a portion of the costs of the 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.
"Net Revenues" means the entire amount of the gross revenues of the
System (as described in Section 3.01 of the Ordinance) remaining upon each such
monthly apportionment, after crediting to the Operating Account the amount
required hereby, including sums required to maintain the Operating Reserve in the
minimum amount required by the Ordinance.
"Operating Account" means the account within the Fund established
pursuant to Section 3.03 of the Ordinance.
"Operating Expenses" means those expenses of the System defined as
such in Section 3.03 of the Ordinance.
"Operating Reserve" means the reserve to be maintained in the
Operating Account as required by Section 3.03 of the Ordinance.
"Opinion of Counsel means a written opinion of Counsel.
"Ordinance" means Ordinance No. 859 as it may from time to time be
amended or supplemented in accordance with its terms, including supplements by
Ordinance No. 1011, Resolution Nos. 2861, 3649 and 3980 and this Resolution.
"Origination Fee" means $33,144, which represents the Borrower's pro
rata share of the costs of issuance of the State Bonds.
"Outstanding Bonds" shall have the meaning assigned in Section 1.4.
"Person" means any Private Person or Public Entity.
"Private Person" means an individual, corporation, partnership,
association, joint venture, joint stock company or unincorporated organization,
except a Public Entity.
"Program" means the State Wastewater Treatment Works Revolving
Loan Program established by the Act.
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"Project" means the facilities, improvements and activities financed,
refinanced or the cost of which is being reimbursed to the Borrower in part with
proceeds of the Loan, described in Exhibit A hereto.
"Public Entity" means a municipality, town, county, school district,
political or administrative subdivision of State government, irrigation district,
drainage district or other public body established by State law.
"Regulations" means the Treasury Regulations, whether final,
temporary or proposed, promulgated under the Code or otherwise applicable to the
Series 1991A Bond.
"Replacement and Depreciation Account" means the account within
the Fund established pursuant to Section 3.05 of the Ordinance.
"Reserve" means the reserve established in the Revene Bond Account
pursuant to Section 3.04 of the Ordinance.
"Reserve Requirement" means, as of the date of calculation, an
amount equal to the maximum amount of principal and interest payable on the
Bonds in 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 Project upon
completion thereof as provided in Section 3.4(a).
"Revenue Bond Account" means the account within the Fund
established pursuant to Section 3.04 of the Ordinance.
"Series 1991A Bond" means the $4,717,000 Sewerage System Revenue
Bond (DNRC Revolving Loan Program), Series 1991 A, issued to the DNRC to
evidence the Loan.
"State" means the State of Montana.
"State Bonds" means the State's General Obligation Bonds (Wastewater
Treatment Works Revolving Fund Program), Series 1991E issued pursuant to the
Indenture.
"Surplus Account" means the account within the Fund established
pursuant to Section 3.06 of the Ordinance.
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"Surplus Net Revenues" shall mean that portion of the Net Revenues
in excess of the current requirements of the Operating Account, the Revenue Bond
Account and the Reserve.
"System" means the existing sewerage system of the Borrower and all
extensions, improvements and betterments thereof hereafter constructed and
acquired, including the Project.
"Trustee" means First Trust Company of Montana National
Association, in Billings, Montana, or any successor trustee under the Indenture.
"Sewerage" means sewage, sewage sludge, industrial wastes,
stormwater, other wastes or any combination thereof.
"Sewerage Debt" means all Bonds and any other Debt incurred to
acquire, construct, extend, improve, add to or otherwise pay expenses of or related to
the System, without regard to the source of payment and security for such Debt (i.e.,
without regard to whether it is general obligation or revenue Debt).
"Sewerage Debt Service" means, for the period of determination, all
required payments of principal and interest (including mandatory sinking fund
redemptions) on all Sewerage Revenue Debt of the Borrower.
"Sewerage Revenue Debt" means all Debt of the Borrower which is
secured solely or partly by the Wastewater Revenues.
"Sewerage Revenues" means revenues (gross or net) received by the
Borrower from or in connection with the operation of the System.
Section 1.2. Other Rules of Construction. For all purposes of this
Resolution, except where the context clearly indicates otherwise: -
(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.
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(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 Project;
Appendix B: the form of the Series 1991A Bond; and
Appendix C: additional agreements and representations of the
Borrower.
Section 1.4. Outstanding Bonds. In accordance with the authorization
described in Section 1 and pursuant to Ordinance Nos. 859 and 1011 and Resolution
Nos. 2861, 3649 and 3980, the City has issued and sold the following bonds which are
currently outstanding: Sewerage System Revenue Bonds, dated as of January 1, 1972;
Sewerage System Revenue Bonds, dated as of July 1, 1976; its Sewerage System
Revenue Bonds, Series .1986, dated, as originally issued, as of June 1, 1986; and its
Sewerage System Revenue Bonds, Series 1989, dated, as originally issued, as of April
15, 1991 (the "Series 1991 Bonds") (collectively, the "Outstanding Bonds"), for the
purpose of financing part of the costs of construction of improvements to the
System, including, as to a portion of the Series 1991 Bonds, the Project. No other
bonds or indebtedness are outstanding that are payable from revenues of the
System. The Outstanding Bonds are outstanding in the aggregate principal amount
of $4,240,000.
ARTICLE II
REPRESENTATIONS AND COVENANTS
Section 2.1. Representations. The Borrower represents as follows:
(a) Or anization and Authority. The Borrower:
(i) is duly organized and validly existing as a municipal corporation
and political subdivision of the State;
(H) 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
1991A Bond and to carry out and consummate all transactions contemplated
by the Ordinance, this Resolution, the 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 Resolution, the Series 1991A
Bond and the Collateral Documents and the incurrence of the Debt evidenced
by the Series 1991A Bond in the maximum amount of the Committed
Amount.
(b) Pending Litigation. There is no litigation or proceeding pending, or
to the knowledge of the Borrower threatened, against or affecting the Borrower 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 Borrower, or the ability of the Borrower to
make all payments and otherwise perform its obligations under the Ordinance, this
Resolution, the Series 1991A Bond and the Collateral Documents, or the financial
condition of the Borrower, or the transactions contemplated by the Ordinance, this
Resolution, the Bond and the Collateral Documents or the validity and
enforceability of the Ordinance, this Resolution, the Series 1991A Bond and the
Collateral Documents. No referendum petition has been filed with respect to any
resolution or other action of the Borrower relating to the Project, the Series 1991A
Bond or any Collateral Documents and the period for filing any such petition will
have expired before issuance of the Bond.
(c) Borrowing Legal and Authorized. The adoption of this Resolution,
the execution and delivery of the Series 1991A Bond and the Collateral Documents
and the consummation of the transactions provided for in this Resolution, the
Series 1991A Bond and the Collateral Documents and compliance by the Borrower
with the provisions of the Ordinance, this Resolution, the Series 1991A Bond and
the Collateral Documents:
(i) are within the powers of the Borrower and have been duly
authorized by all necessary action on the part of the Borrower; and
(ii) do not and will not result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Borrower pursuant to any ordinance, resolution, indenture,
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loan agreement or other agreement or instrument (other than this
Resolution and any Collateral Documents) to which the Borrower is a party
or by which the Borrower 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 Borrower, its properties or operations are subject.
(d) No Defaults. No event has occurred and no condition exists that,
upon execution and delivery of the Bond and the Collateral Documents, would
constitute a default under the Ordinance, this Resolution or the Collateral
Documents. The Borrower 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
Borrower with the terms hereof or of the Series 1991A Bond and the Collateral
Documents.
(e) Governmental Consent. The Borrower has obtained or made all
permits, findings and approvals required to the date of adoption of this Resolution
by any governmental body or officer for the making and performance by the
Borrower of its obligations under the Ordinance, this Resolution, the Bond and the
Collateral Documents (including any necessary sewerage rate increase) or for the
Project, the financing or refinancing thereof or the reimbursement of the Borrower
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 Borrower as a condition to adopting this
Resolution, issuing the Series 1991A Bond or entering into the Collateral
Documents and the performance of the Borrower's obligations hereunder and
thereunder. If a utility board or commission manages or controls the System, such
board or commission has agreed with the DNRC to abide by the terms of this
Resolution and the Collateral Documents, including approving any necessary
wastewater rate increases.
(f) Binding Obligation. The Ordinance, this Resolution, the Series
1991A Bond and any Collateral Document to which the Borrower is a party are the
valid and binding obligations and agreements of the Borrower, enforceable against
the Borrower 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 Project. The Project consists and will consist of the facilities,
improvements and activities described in Appendix A, as such Appendix A may be
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amended from time to time in accordance with the provision of Article III of this
Resolution.
(h) Full Disclosure. There is no fact that the Borrower has not
specifically disclosed in writing to the DNRC that materially and adversely affects or
(so far as the Borrower 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
Borrower'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 Borrower's ability
to perform its obligations under the Ordinance, this Resolution, the Series 1991A
Bond and the Collateral Documents and to pledge any revenues or other property
pledged to the payment of the Bond.
(i) Compliance With Law. The Borrower:
(1) is in compliance with all laws, ordinances, governmental rules and
regulations and court or other governmental orders, judgments and decrees
to which it is subject and which are material to the properties, operations and
finances of the System or its status as a Public Entity and Governmental Unit,
and
(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 affect the ability of the Borrower to conduct the operation of the
System as presently conducted or the condition (financial or otherwise) of the
System or the Borrower's ability to perform its obligations under the
Ordinance, this Resolution, the Series 1991A Bond and the Collateral
Documents.
Section 2.2. Covenants.
(a) Insurance. The Borrower at all times shall keep and maintain with
respect to the System property and casualty insurance and liability insurance as
required by Sections 5.03 and 5.04 of the Ordinance. All such insurance policies shall
name the DNRC as an additional insured. Each policy must provide that it cannot
be cancelled by the insurer without giving the Borrower and the DNRC 30 days'
prior written notice. The Borrower shall give the DNRC prompt notice of each
insurance policy it obtains or maintains to comply with this Section 2.2(a) and of
it 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
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deductibles and carrier of each new or replacement policy. Such notice shall
specifically note any adverse change as being an adverse change. The Borrower shall
deliver to the DNRC at Closing a certificate providing the information required by
this Section 2.2(a).
(b) Right of Insl2ection and Notice of Change of Location. The DNRC,
the DHES 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 Borrower for the purpose of inspecting the System
or any or all books and records of the Borrower relating to the System.
(c) Further Assurance. The Borrower 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 Ordinance, this Resolution, the Series 1991A 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 this Resolution,
the Series 1991A Bond and the Collateral Documents.
(d) Maintenance of Security, if An • Recordation of Interest.
(i) The Borrower shall, at its expense, take all necessary action to
maintain and preserve the Iien and security interest of the Ordinance, this
Resolution and the Collateral Documents so long as any amount is owing
under this Resolution or the Series 1991A Bond;
(ii) The Borrower shall forthwith, after the execution and delivery of
the Series 1991A Bond and thereafter from time to time, cause the Ordinance,
this 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 relating thereto to be filed, registered and recorded in
such manner and in such places as may be required by law in order to perfect
and protect fully the lien and security interest hereof and thereof and the
security interest in them granted by the Ordinance and, from time to time,
shall perform or cause to be performed any other act required by law,
including executing or causing to be executed any and all required
continuation statements and shall execute or cause to be executed any further
instruments that may be requested by the DNRC for such perfection and
protection; and
(iii) Except to the extent it is exempt therefrom, the Borrower shall pay
or cause to be paid all filing, registration and recording fees incident to such
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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 1991A Bond and the Collateral Documents and the
documents described in subparagraph (ii).
(e) Additional Agreements. The Borrower covenants to comply with
all representations, covenants, conditions and agreements, if any, set forth in
Appendix C hereto.
(f) Financial Information. The Borrower agrees that for each fiscal year
it shall furnish to the DNRC and the DHES, promptly when available:
(1) the preliminary budget for the System, with items for the Project
shown separately; and
(2) when adopted, the final budget for the System, with items for the
Project shown separately.
The Borrower will cause proper and adequate books of record and
account to be kept showing complete and correct entries of all receipts, disburse-
ments and other transactions relating to the System as required by Section 5.06 of the
Ordinance. It will cause such books to be maintained on the basis of the same fiscal
year as that utilized by the Borrower. The Borrower shall, within 180 days after the
close of each fiscal year, cause to be prepared and supply to the DNRC the financial
report required by Section 5.06 of the Ordinance with respect to the System for such
fiscal year.
(g) Project Accounts. The Borrower shall maintain Project accounts in
accordance with generally accepted government accounting standards, and as
separate accounts, as required by Section 602(b)(9) of the Clean Water Act.
(h) Records. After reasonable notice from the EPA, the Borrower shall
make available to the EPA such records as the EPA reasonably requires to review
and determine compliance with Title VI of the Clean Water Act, as provided in
Section 606(e) of the Clean Water Act.
(i) Compliance with Clean Water Act. The Borrower has complied
and shall comply with all conditions and requirements of the Clean Water Act
pertaining to the Loan and the Project.
(j) Program Covenant. The Borrower agrees that neither it nor any
"related person" to the Borrower (within the meaning of Section 147(a)(2) of the
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Code) shall, whether pursuant to a formal or informal arrangement, acquire bonds
issued by the State under the Indenture in an amount related to the amount of the
Series 1991A Bond.
ARTICLE III
USE OF PROCEEDS, THE PROJECT
Section 3.1. Use of Proceeds. The Borrower shall apply the proceeds of
the Loan from the DNRC solely as follows:
(a) The Borrower shall apply the proceeds of the Loan solely to the
financing, refinancing or reimbursement of the costs of the 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
Project has not been completed prior to Closing, the Borrower shall, as quickly
as reasonably possible, complete the Project and expend proceeds of the Series
1991A Bond to pay the costs of completing the Project.
(b) No portion of the proceeds of the Loan shall be used to reimburse
the Borrower for costs paid prior to the date of adoption of this Resolution of
a Project the construction or acquisition of which occurred or began earlier
than March 7, 1985. In addition, if any proceeds of the Loan are to be used to
reimburse the Borrower for Project costs paid prior to the date of adoption of
this.Resolution and in a prior fiscal year of the Borrower, the Borrower
represents that at the time it incurred such costs it intended to finance them
with tax-exempt debt or a loan under a state revolving fund program such as
the Program.
(c) Any Debt to be refinanced with proceeds of the Loan was incurred
after March 7, 1985 for a Project the construction or acquisition of which began
after March 7,1985. 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 Project. Set forth in Appendix A to this Resolution is
a description of the 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
funded from the Loan (the Project may consist of more than one facility or activity).
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The Project may be changed and the description thereof in Appendix A may be
amended from time to time by the Borrower but only after delivery to the DNRC of
the following:
(a) A certificate of the Borrower 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 Project,
an increase or decrease in the amount of Loan proceeds which will be
required to complete the Project and whether the change will materially
accelerate or delay the construction schedule for the Project,
(b) A written consent to such change in the Project by an Authorized
DNRC Officer,
(c) An Opinion or Opinions of Bond Counsel stating that the Project,
as constituted after such amendment, is, and was at the time the State Bonds
were issued, eligible for financing under the Act and is, and was at the time
the Series 1991A Bond was issued, eligible for financing under the Enabling
Act, such amendment will not violate the Act or the Enabling Act and such
amendment will not adversely affect the exclusion of interest on the State
Bonds or the Series 1991A Bond from gross income for purposes of federal
income taxation. Such an Opinion of Bond Counsel shall not be required for
amendments which do not affect the type of facility to be constructed or
activity to be financed.
The Borrower acknowledges and agrees that an increase in the
principal amount of the Loan may be made only upon an application to the DHES,
the DNRC and the Trustee, in such form as the DHES shall specify, which is
approved by the DHES and the DNRC, in their sole and absolute discretion, and
adoption by the governing body of the Borrower of a resolution amendatory of or
supplementary to this resolution authorizing the additional loan and delivery of
written certifications by officers of the Borrower to the DHES, the DNRC and the
Trustee to the effect that all representations and covenants contained in this
resolution as it may be so amended or supplemented are true as of the date of
closing of the additional loan. No assurance can be given that any additional loan
funds will be available udder the Program at the time of any such application or
thereafter. The Borrower acknowledges and agrees that neither the DHES, the
DNRC, the Trustee' nor any of their agents, employees or representatives shall have
any liability to the Borrower and have made no representations to the Borrower 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. Project Rel2resentations and Covenants. The Borrower
hereby represents to and covenants with the DNRC that:
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(a) all construction of the 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 Project will be done only pursuant to
fixed price construction contracts. The Borrower 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 Borrower's, the DNRC's
and the DHES's satisfaction;
(c) all future construction will be done in accordance with plans and
specifications on file with the DNRC and the DHES, provided that changes
may be made in such plans and specifications with the written consent of an
Authorized DNRC Officer and the DHES;
(d) the Project is a project of the type permitted to be financed under
the Enabling Act, the Act and the Program and Title VI of the Clean Water
Act, and
(e) the Borrower will undertake the Project promptly after the Closing
Date and will cause the Project to be completed as promptly as practicable with
all reasonable dispatch, except only as completion may be delayed by a cause
or event not reasonably within the control of the Borrower; it is estimated by
the Borrower that the Project will be substantially completed by September 1,
1991 (the Estimated Completion Date.)
Section 3.4. Completion or Cancellation or Reduction of Costs of the
Project.
(a) Upon completion of the Project, the Borrower shall deliver to the
DNRC a certificate stating that the 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
Borrower shall so inform the DNRC and release such amount. If Appendix A
describes two or more separate projects as making up the Project, a separate
completion certificate shall be delivered for each.
(b) If all or any portion of the Project is cancelled or cut back or its costs
are reduced or for any other reason the Borrower will not require the full
Committed Amount, the Borrower shall promptly notify the DNRC in
writing of such fact and release the portion of the Committed Amount which
will not be needed.
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ARTICLE IV
THE LOAN
Section 4.1. The Loan; Disbursement of Loan. The DNRC has agreed to
lend to the Borrower, from time to time as the requirements of this Section 4.1 are
met, an amount up to $4,717,000 (the "Committed Amount") for the purposes of
financing, refinancing or reimbursing the Borrower for a portion of the costs of the
Project; provided the DNRC shall not be required to loan any proceeds of the State
Bonds to the Borrower after 360 days of the Estimated Completion Date. The
Committed Amount may be reduced as provided in Sections 3.2(b), 3.4 and 9.2. 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 1991A Bond by the
Borrower, 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 1991A Bond and the security therefor and
stating in effect that interest on the Series 1991A Bond is not includable
in gross income of the owner thereof for purposes of federal income
taxation, in form and substance satisfactory to the DNRC;
(2) the Series 1991A Bond, fully executed and authenticated;
(3) a certified copy of this Resolution;
(4) any other security instruments or documents required by the
DNRC or DHES 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 Borrower 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 March 7, 1985 or the debt was
incurred no earlier than March 7, 1985, (B) of the Borrower's title to the
Project, (C) of the costs of such Project and that such costs have been
paid by the Borrower and (D) if such costs were paid in a previous fiscal
year of the Borrower, that the Borrower intended at the time it
incurred such costs to finance them with tax-exempt debt or a loan
under a state revolving fund program such as the Program;
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(b) 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 DHES 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 Project, the Borrower 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 Borrower may obtain disbursements
only for costs which have been legally incurred and are due and payable. All
Loan disbursements will be made to the Borrower only upon proof that cost
was incurred.
(c) On the date of Closing, the Trustee is authorized to make an initial
disbursement of the Loan in an amount sufficient to pay the Administration
Fee and the Origination Fee. The DNRC will retain, and not physically
advance to the Borrower, an amount equal to the sum of Administration Fee
and the Origination Fee, and the Borrower acknowledges and agrees that such
retainage constitutes a disbursement of proceeds of the Loan in an amount
equal to the amount retained by the DNRC.
(d) For refinancings, a disbursement schedule complying with the
requirements of the Clean Water Act shall be established by the DNRC and
the Borrower at Closing. The Trustee shall disburse Loan amounts directly to
the holder of the debt being refinanced according to such schedule. If the
Borrower 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 Borrower for
Project costs paid by it prior to Closing, the Borrower shall present at Closing
the items required by Section 4.1(b) relating to such costs. The Trustee shall
disburse such amounts to the Borrower pursuant to a disbursement schedule
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complying with the requirements of the Clean Water Act established by the
DNRC and the Borrower 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 Borrower acknowledges that if Project costs are
incurred faster than the Borrower 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 shall note such
disbursement on Schedule A to the Series 1991A Bond.
(h) The Borrower agrees that it will deposit in the Reserve upon
receipt thereof, either on the Closing Date of the Loan or upon any
disbursement date, any proceeds of the Loan borrowed for the purpose of
increasing the balance in the Reserve to the Reserve Requirement. The
Borrower 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 1991A Bond and interest
thereon shall accrue only from the date of transfer.
Section 4.2. Commencement of Loan Term. The Borrower's
obligations under this Resolution and the Collateral Documents shall commence on
the date hereof unless otherwise provided in this 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 Borrower's obligations
under this Resolution and the Collateral Documents shall terminate upon payment
in full of all amounts due under the Series 1991A Bond and this Resolution;
provided, however, that the covenants and obligations provided in Article VII and
Section 12.4 shall survive the termination of this Resolution.
Section 4.4. Loan_ Closing Submissions.
Borrower will have delivered to the DNRC and the
required by Section 7.05 of the Indenture.
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On or prior to the Closing, the
Trustee the closing submissions
ARTICLE V
REPAYMENT OF LOAN
Section 5.1. Repayment of Loan. The Borrower 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 of one percent (2.25%)
per annum, in semiannual Loan Repayments. In addition, the Borrower 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
Loan Loss Reserve Surcharge equal to one percent (1.00%) per annum on the
outstanding principal amount of the Loan. The Borrower shall pay all Loan
Repayments and Administrative Expense Surcharges and Loan Loss Reserve
Surcharge in lawful money of the United States of America to the DNRC. Interest
and Administrative Expense Surcharges 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, commencing January 1, 1992, (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 July 3, 1993 and the
amount of each principal payment shall be calculated on the basis of level
debt service at an interest rate of 4% 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 1991A 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
1991A Bond. Upon each disbursement of Loan amounts to the Borrower pursuant
to Section 4.1 hereof, the Trustee shall enter or cause to be entered the amount
advanced on Schedule A to the Series 1991A Bond under "Advances" and the total
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amount advanced under Section 4.1, including such disbursement, under "Total
Amount Advanced."
If the advance was made to pay costs of the 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 a
Project has been delivered to the DNRC, the Trustee shall revise Schedule B to the
Series 1991A Bond in accordance with this Section 5.1 and the Trustee shall send a
copy of such Schedule B to the Borrower within one month after delivery of the
completion certificate.
Past -due payments of principal and interest and Administrative
Expense Surcharges and Loan Loss Reserve Surcharge shall bear interest at the rate
of ten percent (10.00%) per annum, until paid.
Any payment of principal, interest or Administrative Expense
Surcharge and Loan Loss Reserve Surcharge under this Section 5.1 shall also be
credited against the same payment obligation under the Series 1991A Bond.
Section 5.2. Additional Payments. The Borrower 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 Borrower so chooses, all reasonable expenses
of the DNRC and the Trustee in connection with the Loan, the Collateral
Documents and the Series 1991A Bond, including, but not limited to:
(1) the cost of reproducing this Resolution, the Collateral Documents
and the Series 1991A Bond;
(2) the fees and disbursements of Bond Counsel and other Counsel
utilized by the DNRC and the Trustee in connection with the Loan, this
Resolution, the Collateral Documents and the Series 1991A 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 1991A Bond,
whether or not the Series 1991A 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 1991A Bond, the
Collateral Documents and this 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.
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Section 5.3. Prepayments. The Borrower may not prepay all or any part
of the outstanding principal amount of the Series 1991A 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 1991A 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 Borrower Unconditional. The obligations of
the Borrower to make the payments required by this Resolution and the Series
1991A Bond and to perform its other agreements contained in the Ordinance, this
Resolution, the Series 1991A Bond and Collateral Documents shall be absolute and
unconditional, except as otherwise provided herein or in such documents. The
Borrower (a) shall not suspend or discontinue any payments provided for in this
Resolution and the Series 1991A Bond, (b) shall perform all its other agreements in
the Ordinance, this Resolution, the Series 1991A Bond and the Collateral
Documents and (c) shall not terminate the Ordinance, this Resolution, the Series
1991A 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 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 this Resolution.
Section 5.5. Limited -Li ability. All payments of principal of and interest
on the Loan and other payment obligations of the Borrower hereunder and under
the Series 1991A Bond shall be special, limited obligations of the Borrower payable
solely out of the Net Revenues or out of the Revenue Bond Account and shall not
be payable out of any other funds or revenues of the Borrower. The obligations of
the Borrower under the Ordinance, this Resolution and the Series 1991A Bond shall
never constitute an indebtedness of the Borrower within the meaning of any state
constitutional provision or statutory limitation and shall never constitute or give
rise to a pecuniary liability of the Borrower or a charge against its general credit or
taxing power. The taxing powers of the Borrower may not be used to pay principal
of or interest on the Series 1991A Bond, and no funds or property of the Borrower
other than the Net Revenues or funds on deposit in the Revenue Bond Account
may be used to pay principal of or interest on the Series 1991 A Bond.
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ARTICLE VI
OTHER AGREEMENTS OF BORROWER
Section 6.1. Maintenance of Existence• Mer er Consolidation Etc.;
Disposition of Assets. The Borrower 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 Borrower)
0) is a Public Entity and (ii) assumes in writing all of the obligations of the Borrower
under the Ordinance, this Resolution, the Series 1991A 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 Borrower under the
Ordinance, this Resolution, the Bond and the Collateral Documents, (b) such action
does not violate the Act or the Clean Water Act and does not adversely affect the
exclusion of interest on the Series 1991A Bond or the State Bonds from gross income
for federal income tax purposes and (c) the Borrower delivers to the DNRC on the
date of such action an Opinion of Bond Counsel that such action complies with this
Section 6.2.
Other than pursuant to the preceding paragraph, the Borrower shall
not transfer the System or any portion thereof to any other Person, except as
permitted by Section 5.05 of the Ordinance.
Section 6.2. Covenants Relating to the Tax -Exempt Status of the State
Bonds.
(a) The Borrower covenants and agrees that it will not use or permit to
be used any of the proceeds of the Series 1991A Bond or any other funds of the
Borrower, 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.
In addition, the Borrower 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.
(b) The Borrower shall not use or permit the use of the Project directly
or indirectly in any trade or business carried on by any Person who is not a
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_V,
Governmental Unit. For the purpose of this subparagraph, use as a member of the
general public 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.
(c) Any portion of the 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 Borrower and not by any other Person. Any portion of the Project
being financed shall be acquired by and shall, during the term of the Loan, be owned
by the Borrower and not by any other Person. Notwithstanding the previous two
sentences, the Borrower may transfer the Project or a portion thereof to another
Governmental Unit which is also a Public Entity if such transfer is otherwise
permitted hereunder and if such organization agrees with the DNRC to comply
with Sections 2.2(h), 2.20) and 6.3 hereof and if the DNRC receive an Opinion of
Bond Counsel that such transfer will not violate the Act or the Clean Water Act or
adversely affect the exclusion of interest on the Bonds from gross income or
purposes of federal income taxation. In addition, except as otherwise provided
herein or in any Collateral Documents, the Borrower may sell or otherwise dispose
of any portion of the Project which has become obsolete or outmoded or is being
replaced or for other reasons is not needed by the Borrower or beneficial to the
general public or necessary to carry out the purposes of the Clean Water Act.
(d) 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 Borrower instructions concerning compliance by the Borrower with the
arbitrage rebate requirements of Section 148 of the Code (the "Arbitrage Rebate
Instructions"). The Borrower 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
excludibility of interest on the State Bonds or any Additional State Bonds (except
Additional 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.
(e) The Borrower agrees that during the Loan Term it will not contract
with or permit any Private Person to manage the Project or any portion thereof
except according to a written management contract which _complies with the
following provisions:
(1) If any contract between the Borrower and the Private Person with
respect to the Project provides for compensation based on a percentage of fees
charged for services rendered by the Private Person, the contract may not
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exceed a term of five years (including any renewal options). At Ieast 50% of
the compensation to the Private Person must be based upon a periodic fixed
fee. In addition, the Borrower must be able to cancel the contract without
penalty or cause at the end of any three-year period of the contract term. The
compensation must be reasonable, and it may not be based on a percentage of
the net profits of the Project or the System or any portion thereof or any other
division or activity of the Borrower.
(2) If any contract between the Borrower and the Private Person with
respect to the Project provides for compensation based on a periodic flat fee,
the compensation must be reasonable and the contract may not exceed a term
of five years (including any renewal options. In addition, the Borrower must
be able to cancel the contract without penalty or cause at the end of any
three-year period of the contract term. If the contract provides for automatic
increases in the periodic flat fee, the increases may not exceed the percentage
increases determined by particular external standards for computing such
increases that are mutually agreed upon in the contract. The percentage
increases reflected in the Consumer Price Index compiled by the Bureau of
Labor Statistics, U.S. Department of Labor, or the actual percentage increases
for services that result from the application of external criteria (for example,
increases in rates paid by insurance companies) are illustrations of two
external standards that may be used.
(3) If a Private Person and the Borrower enter into a contract described
in subparagraph (1) or (2) above and the governing body of the Borrower
contains five or more members, no more than one member of the governing
body of the Borrower may be the Private Person or a related person (as
described in Section 144(a)(3) of the Code) (a "Related Person"), an employee
of the Private Person or a Related Person, or a member of the governing body
of the Private Person or a Related Person. However, such Private Person or a
Related Person, employee of the Private Person or a Related Person or a
member of the governing body of the Private Person or a Related Person may
not serve as the chief executive of the Borrower. If a Private Person and the
Borrower enter into a contract described in (1) or (2) above and the governing
body contains less than five members, no member of the governing body may
be the Private Person or a Related Person, an employee of the Private Person
or a Related Person or a member of the governing body of the Private Person
or a Related Person.
(4) The Borrower may depart from any of its agreements contained in
subparagraphs (1) through (3) if it delivers to the DNRC, at the Borrower's
expense, an Opinion of Bond Counsel that to do so would not adversely affect
the exclusion of interest on the State Bonds from gross income for purposes
of federal income taxation.
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(f) The Borrower may not lease the Project or any portion thereof to
any Person other than a Nonexempt Person which agrees in writing with the
Borrower and the State not to cause any Default to occur under this Resolution,
provided the Borrower may lease all or any portion of the 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.
(g) The Borrower shall not change the use or nature of the Project if (i)
such change will violate the Clean 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.
ARTICLE VII
INDEMNIFICATION OF DNRC, DHSS AND TRUSTEE
The Borrower shall indemnify and save harmless the DNRC, the
DHSS, 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 Project. The Borrower
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
Borrower shall, upon notice from the Indemnified Party, defend such proceeding on
behalf of the Indemnified Party. Notwithstanding the foregoing, the Borrower 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.
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ARTICLE VIII
ASSIGNMENT
Section 8.1. Assignment by Borrower. The Borrower may not assign its
rights and obligations under this Resolution or the Series 1991A Bond, except as
provided in Section 6.2.
Section 8.2. Assignment by DNRC. The DNRC will pledge its rights
under and interest in this Resolution, the Series 1991A Bond and the Collateral
Documents (except to the extent otherwise provided in the Indenture) as security for
the payment of the State Bonds.
Section 8.3. 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 this 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 this 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 IX
THE SERIES 1991A BOND
Section 9.1. Authorization. Under the provisions of the Enabling Act,
the Borrower 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
Borrower.
- Section 9.2. Outstanding Sewerage Debt. Apart from the Outstanding
Bonds, no bonds or indebtedness are outstanding that are payable from Sewerage
Revenues of the System.
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The Borrower may prepay the Series 1991A Bond, in whole or in part,
only upon the terms and conditions under which it can prepay the Loan under
Section 5.3.
Section 9.8. Negotiability, Transfer and Registration. The Series 1991A
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 1991A Bond shall be payable to the DNRC at the Office
of the Department of Natural Resources and Conservation, 1520 East Sixth Avenue,
Helena, Montana 59620-2301 or such other place as may be designated by the DNRC
in writing and delivered to the Borrower. The Series 1991A Bond shall be
negotiable, subject to the provisions for registration and transfer contained in this
section. No transfer of the Series 1991A 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 Bond, and (2) the Finance Director of the
Borrower (the "Registrar"), as Bond Registrar, has duly noted the transfer on the
Series 1991A 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 Borrower shall be entitled to deem and treat the person
in whose name the Series 1991A Bond is registered as the absolute owner of the
Series 1991A 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 Borrower's liability upon such Bond to the extent of the sum or sums
so paid.
Section 9.9. Execution and Delivery. The Series 1991A Bond shall be
executed on behalf of the Borrower by the manual signatures of the Mayor and the
Finance Director. Any or all of such signatures may be affixed at or prior to the date
of delivery of the Series 1991A Bond. The Bond shall be sealed with the corporate
seal of the Borrower. In the event that any of the officers who shall have signed the
Series 1991 A Bond shall cease to be officers of the Borrower before the Bond is issued
or delivered, their signatures shall remain binding upon the Borrower. Conversely,
the Series 1991A 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
1991A Bond shall be delivered to the DNRC, or its attorney or legal representative.
Section 9.10. Form. The Series 1991A Bond shall be prepared in
substantially the form attached as Appendix B.
ARTICLE X
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APPROPRIATION OF PROCEEDS OF THE SERIES 1991A BOND
The proceeds of the Series 1991A Bond are appropriated to the Fund and are
to be deposited or applied as follows:
(a) Proceds shall be credited to the Reserve as provided in Section 11.2 hereof;
(b) $60,925 shall be applied to pay the Administrative Fee and the Origination
Fee; and
(c) The balance of the proceeds of the Series 1991A Bond shall be credited to
the Construction Account and applied to payment of costs of the Project.
ARTICLE XI
SECURITY FOR THE SERIES 1991A BOND
Section 11.1. Parity -Bond. The Series 1991A Bond is issued under
Section 4.03 of the Ordinance and shall, with the Outstanding Bonds and any other
additional bonds issued under the provisions of said Section 4.03 or Section 4.02 of
the Ordinance, be equally and ratably secured by the provisions of the Ordinance and
this Resolution and payable out of the Net Revenues appropriated to the Revenue
Bond Account of the Sewerage System Fund, without preference or priority, all as
provided in the Ordinance, and secured by the Reserve established in the Revenue
Bond Account. The City shall keep, perform and observe each and every one of its
covenants and undertakings set forth in the Ordinance and this Resolution and
shall cause the Project to be undertaken and completed expeditiously.
Section 11.2. Funding of Reserve. On the Closing Date and on each
date of disbursement of proceeds of the Series 1991A Bond thereafter until the final
disbursement of such proceeds, the Borrower shall deposit in the Reserve, from
proceeds of the Series 1991A Bond or, to the extent necessary, from other available
funds of the Borrower, an amount equal to the product of W the Incremental
Reserve Deposit (as hereinafter defined) times (ii) a fraction the numerator of
which is the amount of proceeds of the Series 1991 A Bond to be disbursed on said
date and the denominator of which is the Committed Amount of the Loan. As
used herein, Incremental Reserve Deposit means the difference, calculated as of the
Closing Date, between the Reserve Requirement based on the Committed Amount
of the Loan ($770,905) and the balance then on deposit in the Reserve. On the date
of the final disburserrient of proceeds of the Series 1991A Bond, the Borrower shall
deposit in the Reserve, from proceeds of the Series 1991A Bond or, to the extent
necessary, from other available funds of the Borrower, an amount necessary to cause
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the balance in the Reserve to equal the Reserve Requirement, calculated as of that
date and based on the actual principal amount of the Series 1991A Bond.
ARTICLE XII
TAX MATTERS
Section 12.1. Use of Project and System. The Project and the System
will be owned and operated by the Borrower and available for use by members of the
general public on a substantially equal basis. The Borrower shall not enter into any
lease, use or other agreement with any non -governmental person relating to the use
of the Project or the System or security for the payment of the Series 1991 A Bond
which might cause the Series 1991A Bond to be considered a "private activity bond"
or "private loan bond" within the meaning of Section 141 of the Code.
Section 12.2. General Covenant. The Borrower covenants and agrees
with the owners from time to time of the Series 1991A 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 1991A 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
1991A Bond will not become includable in gross income for federal income tax
purposes under the Code and the Regulations.
Section 12.3. Arbitrage Certification. The Mayor and the City Clerk -
Treasurer, being the officers of the Borrower charged with the responsibility for
issuing the Series 1991A Bond pursuant to this 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 Sections 1.103-13, 1.103-14 and 1.103-15 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 1991A Bond, it is reasonably
expected that the proceeds of the Series 1991A Bond will be used in a manner that
would not cause the Series 1991A Bond to be an "arbitrage bond" within the
meaning of Section 148 of the Code and the Regulations.
Section 12.4. Arbitrage Rebate. The City acknowledges that the Series
1991A Bond is 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 such times as are required
under said Section 148(f) and applicable Treasury Regulations to preserve the
exclusion of interest on the Series 1991A Bond from gross income for federal
income tax purposes, unless the 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 1991A Bond (other than amounts constituting a "bona fide debt service
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fund") arise during or after the expenditure of the original. proceeds thereof. In
furtherance of the foregoing, the Finance Director is hereby authorized and directed
to execute a Rebate Certificate containing such covenants and agreements, 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.
Section 12.5. Information Reporting. The Borrower shall file with the
Secretary of the Treasury, not later than February 15, 1992, a statement concerning
the Series 1991A Bond containing the information required by Section 149(e) of the
Code.
ARTICLE XIII
MISCELLANEOUS
Section 13.1. Notices. All notices or other communications hereunder
shall be sufficiently sent or given and shall be deemed sent or given when delivered
or mailed by certified mail, postage prepaid, to the parties at the following addresses:
DNRC: Department of Natural Resources
and Conservation
1520 East Sixth Avenue
Helena, Montana 59620
Attention: Conservation and
Resource Development
Trustee: First Trust Company of Montana
National Association
303 North Broadway
P.O. Box 30678
Billings, Montana 59115
Borrower: City of Kalispell
P.O. Box 1997
Kalispell, Montana 59903-1997
Attention: Finance Director
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.
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Section 13.2. Binding Effect. This Resolution shall inure to the benefit
of and shall be binding upon the DNRC, the Borrower and their respective
permitted successors and assigns.
Section 13.3. Severability. If any provision of this Resolution shall be
determined to be unenforceable at any time, it shall not affect any other provision of
this Resolution or the enforceability of that provision at any other time.
Section 13.4. Amendments. This Resolution may not be effectively
amended without the written consent of the DNRC.
Section 13.5. Applicable Law. This Resolution shall be governed by
and construed in accordance with the laws of the State.
Section 13.6. Captions; References to Sections. The captions in this
Resolution are for convenience only and do not define or limit the scope or intent
of any provisions or Sections of this Resolution. References to Articles and Sections
are to the Articles and Sections of this Resolution, unless the context otherwise
requires.
Section 13.7. No Liability of Individual. Officers, Directors or Trustees.
No recourse under or upon any obligation, covenant or agreement contained in the
Ordinance or this Resolution shall be had against any director, officer or employee,
as such, past, present or future, of the DNRC or the Trustee, either directly or
through the DNRC or the Trustee, or against any officer, or member of the
governing body or employee of the Borrower, 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 Borrower is hereby expressly waived and
released by the Borrower and by the DNRC as a condition of and in consideration for
the adoption of this Resolution and the making of the Loan.
Section 13.8. Payments Due on Holidays. If the date for making any
payment or the last date for performance of any act or the exercise of any right, as
provided in the Ordinance, this Resolution or the Series 1991A Bond, shall not be
Business Day, such payments may be made or act performed or right exercised on
the next succeeding Business Day with the same force and effect as if done on the
nominal date provided in the Ordinance, this Resolution or the Series 1991A Bond.
Section 13.9. Right of Others To Perform Borrower's Covenants. In the
event the Borrower 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
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ccount of the Borrower and make advances for that purpose. No such performance
or advance shall operate to release the Borrower 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 from the date of the advance until repaid. The DNRC and the
provider of any Collateral Document shall have the right to enter the Project or the
facility or facilities of which the 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 13.10. Authentication of Transcript. The officers of the
Borrower 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
1991A Bond and such other certificates and affidavits as may be required to show the
right, power and authority of the Borrower to issue the Series 1991A Bond, and all
statements contained in and shown by such instruments, including any heretofore
furnished, shall constitute representations of the Borrower as to the truth of the
statements purported to be shown thereby.
Section 13.11. Effective Date. This Resolution shall take effect
immediately.
PASSED AND ADOPTED by the City Council of the City of Kalispell,
Montana, on this 4th day of November, 1991.
Attest:
Finance Director
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9
The motion for the adoption of the foregoing resolution was duly
seconded by Atkinson and upon vote being taken thereon, the following
voted in favor thereof: Collins, Nystul, Kennedy, Larson, Buck, Moses, Granmo
Atkinson and Rauthe
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted and was signed by
the acting Mayor and attested by the Finance Director.
I
I
I
APPENDIX A
Description of the Project
The proposed project comprises the construction of a new wastewater
treatment facility including pretreatment, grit removal, pumping, activated sludge
secondary treatment process capable of removing phosphorus and nitrogen,
clarification, filtration, ultraviolet disinfection, reaeration, and all necessary
appurtenant structures described in the project plans and specifications approved by
DHES on November 19, 1990.
A-1
APPENDIX B
[Form of the Bond]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FLATHEAD
CITY OF KALISPELL
SEWERAGE SYSTEM REVENUE BOND
(DNRC REVOLVING LOAN PROJECT), SERIES 1991A
No. R-1
$4,717,000
FOR VALUE RECEIVED, the City of Kalispell, Montana (the
"Borrower"), 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 Revenue Bond Account of its Sewerage 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 2.25% per annum on the unpaid
balance until paid. In addition, the Borrower shall pay, solely from said source, 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 (LOOM 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 January 1, 1992. 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 shall be as
set forth in Schedule B hereto. Upon each disbursement of Loan amounts to the
Borrower 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
B-1
4% per annum. Past -due payments of principal and interest, Administrative
Expense Surcharge and Loan Loss Reserve Surcharge shall bear interest at the rate of
ten percent (10.00%) per annum, until paid. Interest and Administrative Expense
Surcharge and Loan Loss Reserve Surcharge shall be calculated on the basis of a
360-day year comprising 12 months of 30 days each. All payments under this Bond
shall be made to the registered holder of this Bond, at its address as it appears on the
Bond register, in lawful money of the United States of America.
This Bond is one of an issue of Sewerage System Revenue Bonds of the
City authorized to be issued from time to time, and constitutes a series in the
maximum authorized principal amount of $4,717,000 (the "Series 1991A Bond").
The Series 1991A Bond is issued to finance a portion of the costs of the construction
of certain improvements to the sewerage system of the Borrower (the "System"), to
make a deposit to a reserve fund for the Bonds and to pay costs of issuance of the
Series 1991A Bond. The Series 199IA Bond is issued pursuant to and in full
conformity with the Constitution and laws of the State of Montana thereunto
enabling, including Montana Code Annotated, Title 7, Chapter 7, Part 44, as
amended, and ordinances and resolutions duly adopted by the governing body of
the Borrower, including Montana Code Annotated, as amended, Title 7, Chapter 7,
Parts 44 and 45, as amended, and Ordinance No. 859 and Resolution No. 4022 duly
enacted by the City Council (collectively, the "Ordinance"). The Series 1991A Bond
is issuable only as a single, fully registered bond. The Series 1991A Bond is issued on
a parity and is equally and ratably secured by the Net Revenues of the System with
outstanding sewerage system revenue bonds of the City, Series 1972, Series 1976,
Series 1986 and Series 1989, dated as of January 1,1972, July 1,1976, June 1, 1986, and
April 15, 1991, respectively (the "Outstanding Bonds").
Reference is made to the Ordinance for a more complete statement of
the terms and conditions upon which the Series 1991A 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
Ordinance and made payable from such net revenues on a parity with the
Outstanding Bonds and the Series 1991A Bond (collectively, the "Bonds") or
otherwise, the conditions upon which the Ordinance may be amended, the rights,
duties and obligations of the City, and the rights of the owners of the Series 1991A
Bond.
The Borrower may prepay the principal of the Series 1991A Bond only
if W it obtains the prior written consent of the DNRC thereto, and 00 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
M
the Series 1991A 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 Borrower within the meaning of any
constitutional or statutory limitation or provision.
The Borrower may deem and treat the person in whose name this
Series 1991A Bond is registered as the absolute owner hereof, whether this Series
1991A Bond is overdue or not, for the purpose of receiving payment and for all
other purposes, and the Borrower shall not be affected by any notice to the contrary.
The Series 1991A Bond may be transferred hereinafter as provided.
IT IS CERTIFIED, RECITED, COVENANTED AND AGREED that the
City has duly authorized and will forthwith construct and complete 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 Sewerage System Fund into which the gross
revenues of the System, including all additions thereto and replacements and
improvements thereof, will be paid, and a separate and special Revenue Bond
Account in that fund, into which will be paid each month, from and as a first and
prior lien on the Net Revenues of the System then on hand, 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 Bonds secured by the Ordinance and payable from that Account, and in which
shall be established and maintained a reserve balance equal to the maximum
amount of principal and interest to become due on the Series 1991A Bond and all
other Bonds in any subsequent fiscal year; that the Revenue Bond Account will be
used only to pay the principal of, premium, if any, and interest on the Series 1991A
Bond, the Outstanding Bonds and any other additional Bonds issued pursuant to
and secured by the Ordinance on a parity therewith, and such rates and charges will
from time to time be made and kept sufficient, subject to regulations of the Montana
Public Service Commission, to provide gross income and revenues adequate to pay
promptly the reasonable and current expenses of operating and maintaining the
System and to produce in each fiscal year Net Revenues in excess of such current
expenses, equal to 125% of the maximum amount of principal and interest payable
from the Revenue Bond Account in any subsequent fiscal year; that additional
Bonds and refunding Bonds may be issued and made payable from the Revenue
Bond Account on a parity with the Series 1991A Bond and Outstanding Bonds, upon
certain conditions set forth in the Ordinance, but no obligation will be otherwise
incurred and made payable from the Net Revenues of the System, 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
B-3
Series 1991A Bond, the Outstanding Bonds and additional parity Bonds on such Net
Revenues; that all provisions for the security of the holder of this Bond set forth in
the Ordinance 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 1991A 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 1991A
Bond and the interest hereon are payable solely from the Net Revenues of the
System pledged and appropriated to the Revenue Bond Account and do not
constitute a debt of the City within the meaning of any constitutional or statutory
limitation or provision and the issuance of the Series 1991A Bond does not cause
either the general or the special indebtedness of the City to exceed any constitutional
or statutory limitation.
IlV WITNESS WHEREOF, the City of Kalispell, Montana, by its
governing body, has caused this Bond to be executed by the signatures of the Mayor
and the Finance Director, and has caused the official seal of the Borrower to be
affixed hereto, and has caused this Bond to be dated as of the day of
1991.
Seal) Mayor Finance Director
(
REGISTRATION 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 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 Borrower 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 Borrower'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 Finance Director of the City of Kalispell, Montana, acting as Bond
Registrar, has transferred, on the books of the Borrower, 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, this Bond is hereby transferred and assigned by the
undersigned holder, without recourse, to on this day of
By:
(authorized signature)
For:
(Holder)
IM
Date
SCHEDULE A
SCHEDULE OF AMOUNTS ADVANCED
Total Amount
Advances Advanced
Notation
MLde By
I
SCHEDULE B
Administrative
Date Principal interest Ex nse Surchar e
"ATTACHED"
B-7
Loan Loss
Reserve
Surchar e
Total Loan
Payment
.r
City of Kalispell
SCLEDUU 8
LOU L..A$
Aanlnie-n " Reserve TOW
LWte Principal Intoregrt Upewm SkIrcbarge S,rch',.6 Pap went
`--
7/ 1/93 70,000.00 53066.25 17,688.75 - Y 23,585.00
,172,340.00
1/ 1/94 50,000.00 52,188.75 17,396.25 23,195.00 172,780.DO
7/ 1/94 61,000.00 51,288.75 17,096.25 22,715.00 172,180.00
1/ 1/95 83,000.00 50,377.50 16,192,50 22,350.00 172,560.00
7/ 1/95 85,000.D0 49,443.75 16,461.25 21 975.00 172,900.00
1/ 1/% 86,ow.00 481*487.50 16,162.50 21,550.00 172,200.00
7/ V96 68,000.00 47,520.00 15,840.00 21,120.00 172,480.00
1/ 1/97 90,000.D0 46,530.00 15,510.D0 20,680.00 172,720.00
7/ 1/97 92,000.00 45,517.50 13,172.50 20,230.00 172,920.00
1/ 3/98 93,000.00 44,482.50 14,OZ7.50 19,770.00 172,080.00
7/ 1/98 95,000.00 43,436.25 14,478.75 19,305.00 172,220.00
1/ 1/99 97,000.00 42,MI.50 14,122.50 18,830,00 172,320.00
7/ 1/99 99,000.00 41,275.25 13,758.75 16,345.00 172,380.00
k/ 1/ 0 101,000.00 40,162.50 13,387.50 17,850.00 172,400.00
7/ 1/ 0 103,000.00 39,U25.26 13,008.75 17,345.00 172,380,d0
Y/ 1/ 1 105,000.00 37,867.50 12,622.50 16,830.00 172,320.00
7/ 1/ 1 107,000.00 36,688.25 12,228.75 16,305.00 172,220.o0
l/ 1/ 2 , 109,000.00 35,4a2.5a 11,827.50 15,770.00 172,080.00
7/ 1/ 2 112,000.00 34,256.25 11,43.a.75 15,225.00 172,900.00
l/ 1/ 3 114,000.00 32,996.25 10,9%.75 14,665.00 172,M.00
7/ 1/ 3 116,000.00 31,713.75 10,571.25 14,095.00 172,380.00
1/ 1/ 4 118,000.00 30,AM. 75 10,138.25 13,515.00 172,060.DO
7/ 1/ 4 121,000.00 29,081.25 9,693.75 12,9z.00 172,700.00
1/ 1/ 5 123,000.00 27,720.00 9,240.00 12,=.OQ 177,280.00
7/ 1/ 5 1r6,000.D0 26,336.25 8,778.75 11,705.00 172,820.00
1/ 1/ 6 128,000.00 24,918.75 8,306.25 11,075.00 172,300.00
7/ 1/ 6 131,000.00 23,478.75 7,825.25 10,435.00 172,740.00
1/ 1/ 7 133,000.00 22,005.00 7,335.00 9,790.00 172,120,00
7/ 1/ 7 136,000.09 20,508.75 6,836.25 9,115.00 172,460.00
1/ 1/ a 139,D00.00 18,978.75 6,324.25 8,435.00 172,740.00
7/ 1/ 8 141,000.00 17,415.00 5,805.00 7,740.00 171,960.00
1/ 1/ 9 144,000.00 15,828.75 5,176.25 7,015.DO 172,140.00
7/ 11 9 147,MO. 00 14,208.75 4,736.25 5,315.00 172,260.00
1/ 1/10 150,D00.00 12,555.00 4,185,00 5,580.00 172,320.00
7/ 1/10 153,OW. Do 10,867.50 3,622.50 4,630.00 172,320.Do
A/ 1/11 156,000.00 9,146.25 3,04a.75 4'065.00 172,260.00
7/ 1/11 159,000.Oo 7,391.25 2,463.75 31205.00 172,140.00
1/ 1/12 163,000.00 5,602.50 1,367.50 2,490.00 172,960.00
7J 1/12 166,000.00 3,766.75 1,256.25 1,675.00 172,700.00
1/ 1/17 169,00o.00 1,901.25 633.75 645.00 172,380.00
6
I
APPENDIX C
ADDITIONAL REPRESENTATIONS AND COVENANTS
"NONE"
C-1