H2. Resolution 6133, BOI LoanKALISPELL
CITY (OF
City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903-1997
Telephone (406) 758-7701 Fax - (406) 758-7758
REPORT TO: Doug Russell, City Manager
FROM: Aimee Cooke, Finance Director
SUBJECT: Resolution No. 6133 — Authorizing Loan with the Montana Board of
Investments for Annual Purchases of Budgeted Equipment
MEETING DATE: May 15, 2023 — Regular Council Meeting
BACKGROUND: The City utilizes the Montana Board of Investments (BOI) Intercap
Loan Program to assist it in making purchases of needed equipment. This helps the City in
managing the consistency of its cash flows. The use of this program was again anticipated and
calculated into the fiscal year 2023 budget that was presented and approved by Council.
The maximum amount of the loan is $252,000 and is for a term of up to five years. The initial
rate is 5.75% and may be adjusted annually by the BOI based upon the market. The City may
elect, at any time, to prepay the loan upon giving 30 days' notice. The interest obligation on the
loan begins upon making a draw and only to the extent of the draws that are made. As of this
date the Parks Department has completed the purchase of a toro mower, tractor, and zero turn
mower for $134,605. It is the intent to make a draw on the loan for this amount so payments may
be made over the term of up to five years.
RECOMMENDATION: It is recommended that the City Council, by means of Resolution
6133, authorize the City Manager to execute the necessary agreements included in this packet to
finalize this loan with the Montana Board of Investments Intercap Loan Program.
FISCAL IMPACT: The debt service on the loan proceeds is currently 5.75% and may be
adjusted annually. The City may elect to prepay the loan at any time if it becomes apparent that
the advantage of the cash flow control is outweighed by the cost of loan. The initial annual debt
service will be approximately $34,660.
ATTACHMENTS: Resolution 6133 with loan agreement documents
www.kalispell.com
(GENERAL FUND LOAN)
RESOLUTION AUTHORIZING PARTICIPATION IN THE INTERCAP PROGRAM
CERTIFICATE OF MINUTES RELATING TO
RESOLUTION NO.6133
Issuer: City of Kalispell
Kind, date, time and place of meeting: A regular meeting held on May 15, 2023 at 7 o'clock p.m.
in Kalispell, Montana.
Members present:
Members absent:
RESOLUTION NO. 6133
RESOLUTION AUTHORIZING PARTICIPATION IN THE BOARD OF INVESTMENTS
OF THE STATE OF MONTANA ANNUAL ADJUSTABLE RATE MUNICIPAL
FINANCE CONSOLIDATION ACT EXTENDABLE BOND (INTERCAP LOAN
PROGRAM), APPROVING THE FORM AND TERMS OF THE LOAN AGREEMENT
AND AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS
RELATED THERETO
I, the undersigned, being the fully qualified and acting recording officer of the
public body issuing the obligations referred to in the title of this certificate, certify that the
documents attached hereto, as described above, have been carefully compared with the original
records of the public body in my legal custody, from which they have been transcribed; that the
documents are a correct and complete transcript of the minutes of a meeting of the governing body
at the meeting, insofar as they relate to the obligations; and that the meeting was duly held by the
governing body at the time and place and was attended throughout by the members indicated
above, pursuant to call and notice of such meeting given as required by law.
WITNESS my hand officially as such recording officer this 15th day of May, 2023.
Its
RESOLUTION NO. 6133
RESOLUTION AUTHORIZING PARTICIPATION IN THE BOARD OF INVESTMENTS
OF THE STATE OF MONTANA ANNUAL ADJUSTABLE RATE MUNICIPAL
FINANCE CONSOLIDATION ACT EXTENDABLE BOND (INTERCAP LOAN
PROGRAM), APPROVING THE FORM AND TERMS OF THE LOAN AGREEMENT
AND AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS
RELATED THERETO
BE IT RESOLVED BY THE CITY COUNCIL (the Governing Body) OF THE CITY
OF KALISPELL (the Borrower) AS FOLLOWS:
ARTICLE I
DETERMINATIONS AND DEFINITIONS
Section 1.01. Definitions. The following terms will have the meanings indicated
below for all purposes of this Resolution unless the context clearly requires otherwise. Capitalized
terms used in this Resolution and not defined herein shall have the meanings set forth in the Loan
Agreement.
Adjusted Interest Rate means the rate of interest on the INTERCAP Bond
determined in accordance with the Board Resolution.
Authorized Representative shall mean the officers of the Borrower designated and
duly empowered by the Governing Body and set forth in the application.
Board means the Board of Investments of the State of Montana, a public body
corporate organized and existing under the laws of the State and its successors and assigns.
Board Act means Section 2-15-1808, Title 17, Chapter 5, Part 16, MCA, as
amended.
"Board Resolution" means Board Resolution No. 249, adopted November 30, 2021,
authorizing the issuance and sale of the INTERCAP Bonds for the purpose of making loans to
Eligible Government Units.
Borrower means the local government entity above named, eligible to participate
in the INTERCAP Loan Program.
"Borrower Act" means §§ 7-7-4101, and 7-7-4201, 7-5-4306 , MCA authorizing an
Eligible Government Unit to borrow money on terms consistent with the Program.
"Electronic Funds Transfer (EFT) Authorization" shall mean the authorization
given by the Borrower to the Board to initiate electronic debit and/or credit entries to the
Borrower's specified account to fund the Loan and make automatic Loan repayments when due.
The Board may also initiate the electronic debit for periodic principal paydown or payoff prior to
loan maturity upon the Borrower's request.
INTERCAP Bond means the Bond issued by the Board pursuant to the Board
Resolution to finance the Program.
Loan means the loan of money by the Board to the Borrower under the terms of the
Loan Agreement pursuant to the Act and the Borrower Act and evidenced by the Note.
Loan Agreement means the Loan Agreement between the Borrower and the Board,
including any amendment thereof or supplement thereto entered into in accordance with the
provisions thereof and hereof.
Loan Agreement Resolution means this Resolution or such other form of resolution
that the Board may approve and all amendments and supplements thereto.
Loan Date means the date of closing a Loan.
Loan Rate means the rate of interest on the Loan which is initially 5.75% (6.00%
less 0.25% for Borrowers with EFT Authorization) per annum through February 15, 2024 and
thereafter a rate equal to the Adjusted Interest Rate on the Bond and up to 1.50% per annum as
necessary to pay Program Expenses.
Note means the promissory note to be executed by the Borrower pursuant to the
Loan Agreement, in accordance with the provisions hereof and thereof, in substantially the form
set forth in the Promissory Note, or in such form that may be approved by the Board.
Program means the Board's INTERCAP Loan Program pursuant to which the
Board issued the INTERCAP Bond to use the proceeds to make loans to participating Eligible
Government Units.
Project means those items of equipment, personal or real property improvements to
be acquired, installed, financed or refinanced under the Program as set forth in the Description of
the Project/Summary of Draws.
Section 1.02. Authon1y. The Borrower is authorized to undertake the Project and
is further authorized by the Borrower Act to enter into the Loan Agreement for the purpose of
obtaining a loan to finance or refinance the acquisition and installation costs of the Project.
Section 1.03. Execution of Agreement and Delivery of Note. Pursuant to the Board
Act, the Board has issued and sold the INTERCAP Bond and deposited a part of proceeds thereof
in the Loan Fund. The Board has, pursuant to the Term Sheet, agreed to make a Loan to the
Borrower in the principal amount of $252,000.00 and upon the further terms and conditions set
forth herein, and as set forth in the Term Sheet and the Loan Agreement.
ARTICLE II
THE LOAN AGREEMENT
Section 2.01. Terms. (a) The Loan Agreement shall be dated as of the Loan Date,
in the principal amount of $252,000.00 and shall constitute a valid and legally binding obligation
of the Borrower. The obligation to repay the Loan shall be evidenced by a Promissory Note. The
Loan shall bear interest at the initial rate of 5.75% (6.00% less 0.25% for Borrowers with EFT
Authorization) per annum through February 15, 2024, and thereafter at the Adjusted Interest Rate,
plus up to 1.50% per annum as necessary to pay the cost of administering the Program (the Program
Expenses). All payments will be automatic pursuant to the EFT Authorization attached hereto
when due.
(b) The Loan Repayment Dates shall be February 15 and August 15 of each
year.
(c) The principal amount of the Loan may be prepaid in whole or in part if the
Borrower requests that the Board approve prepayment of the loan. Upon approval, the Board will
initiate an electronic debit using the attached EFT Authorization for prepayment provided that the
Borrower has given written notice of its intention to prepay the Loan in whole or in part to the
Board no later than 30 days prior to the designated prepayment date or less if the Board agrees to
shorter notice.
(d) The Prepayment Amount shall be equal to the principal amount of the Loan
outstanding, plus accrued interest thereon to the date of prepayment.
(e) Within the next month following an Adjustment Date, the Board shall
calculate the respective amounts of principal and interest payable by each Borrower on and with
respect to its Loan Agreement and Note for the subsequent August 15 and February 15 payments
and prepare and mail a statement therefor to the Borrower.
Section 2.02. Use and Disbursement of the Proceeds. The proceeds of the Loan
will be expended solely for the purposes set forth in the Description of the Project/Summary of
Draws. The proceeds from the sale of the Note to the Board shall remain in the Borrower's Account
pending disbursement at the request of the Borrower to pay the budgeted expenditures in
anticipation of which the Note was issued. Requests for disbursement of the Loan shall be made
to the Board. Prior to the closing of the Loan and the first disbursement, the Borrower shall have
delivered to the Board a certified copy of this Resolution, the executed Loan Agreement and Note
in a form satisfactory to the Borrower's Counsel and the Board's Bond Counsel and such other
certificates, documents and opinions as set forth in the Loan Agreement or as the Board may
require. The Borrower will pay the loan proceeds to a third party within five business days after
the date they are advanced (except for proceeds to reimburse the Borrower for previously paid
expenditures, which are deemed allocated on the date advanced).
Section 2.03. Payment and Security for the Note. In consideration of the making
of the Loan to the Borrower by the Board, the provisions of this Resolution shall be a part of the
Agreement of the Borrower with the Board. The provisions, covenants, and Agreements herein
set forth to be performed by or on behalf of the Borrower shall be for the benefit of the Board. The
Loan Agreement and Note shall constitute a valid and legally binding obligation of the Borrower
and the principal of and interest on the Loan shall be payable from the general fund of the
Borrower, and any other money and funds of the Borrower otherwise legally available therefor.
The Borrower shall enforce its rights to receive and collect all such taxes and revenues to insure
the prompt payment of the Borrower obligations hereunder.
Section 2.04. Representation Regarding the Property Tax Limitations. The
Borrower recognizes and acknowledges that the amount of taxes it may levy is limited by state
law pursuant to § 15-10-402, MCA, et. seq. The Borrower is familiar with the Montana's property
tax limitations and acknowledges that the obligation to repay the Loan under the Agreement and
Note are not exceptions to these provisions. The Borrower represents and covenants that the
payment of principal of and interest on the Loan can and will be made from revenues available to
the Borrower in the years as they become due, notwithstanding the provisions of property tax
limitations.
Section 2.05. Levy and Appropriate Funds to Repay Loan. The Borrower agrees
that in order to meet its obligation to repay the Loan and all other payments hereunder that it will
budget, levy taxes for and appropriate in each fiscal year during the term of the Loan an amount
sufficient to pay the principal of and interest hereon within the limitations of the Property Tax
Limitation Act, as may be amended, and will reduce other expenditures if necessary to make the
payments hereunder when due.
ARTICLE III
CERTIFICATIONS, EXECUTION, AND DELIVERY
Section 3.01. Authentication of Transcript. The Authorized Representatives are
authorized and directed to prepare and furnish to the Board and to attorneys approving the validity
of the Loan, certified copies of this Resolution and all other resolutions and actions of the Borrower
and of said officers relating to the Loan Agreement and the Note and certificates as to all other
proceedings and records of the Borrower which are reasonably required to evidence the validity
and marketability of the Note. All such certified copies and certificates shall be deemed the
representations and recitals of the Borrower as to the correctness of the statements contained
therein.
Section 3.02. Legal Opinion. The attorney to the Borrower is hereby authorized
and directed to deliver to the Board at the time of Closing of the Loan his or her opinion regarding
the Loan, the Loan Agreement, the Note, and this Resolution in substantially the form of the
opinion set forth in the Attorney's Opinion.
Section 3.03. Execution. The Loan Agreement, the Note, and any other document
required to close the Loan shall be executed in the name of the Borrower and shall be executed on
behalf of the Borrower by the signatures of the Authorized Representatives of the Borrower.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF
THE CITY OF KALISPELL, THIS 15TH DAY OF MAY, 2023.
Mark Johnson
Mayor
ATTEST:
Aimee Brunckhorst, CMC
City Clerk
DocuSign Envelope ID: 71 F68133-5882-4BF5-B2D9-4D6FB57E7D5C
Loan #2984
LOAN AGREEMENT
between
BOARD OF INVESTMENTS
OF THE STATE OF MONTANA
as Lender
and
CITY OF KALISPELL
as Borrower
DATE OF AGREEMENT: June 2, 2023
LOAN AMOUNT: TWO HUNDRED FIFTY-TWO THOUSAND AND NO/100 DOLLARS
($252,000.00)
ADDRESS OF BORROWER: City of Kalispell
P.O. Box 1997
Kalispell, MT 59903
CONTACT PERSON OF BORROWER:
NAME Aimee Cooke
TITLE Interim Finance Director
TELEPHONE (406) 758-7755
E-MAIL acooke@kalispell.com
ALTERNATE CONTACT PERSON
NAME Julie Hawes
TITLE Interim Assistant Finance Director
TELEPHONE (406) 758-7755
E-MAIL jhawes@kalispell.com
STATUTORY AUTHORITY FOR BORROWING: §§ 7-7-4101, and 7-7-4201, 7-5-4306 , MCA
DocuSign Envelope ID: 71 F68133-5882-4BF5-B2D9-4D6FB57E7D5C
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND RULES OF INTERPRETATION................................................................... 2
SECTION 1 .01 . DEFINITIONS ........................
SECTION 1.02. RULES OF INTERPRETATION..
SECTION 1.03. ATTACHMENTS .....................
2
5
5
ARTICLE II. REPRESENTATIONS, COVENANTS AND WARRANTIES OF BORROWER .............................. b
SECTION 2.01 . REPRESENTATIONS AND WARRANTIES.....
SECTION 2.02. PARTICULAR COVENANTS OF BORROWER.
I
ARTICLE III. LOAN TO BORROWER....................................................................................................... 7
ARTICLE IV. LOAN PROVISIONS.......................................................................................................... 7
SECTION 4.01.
COMMENCEMENT OF LOAN AGREEMENT.......
SECTION 4.02.
TERMINATION OF AGREEMENT .....................
SECTION 4.03.
TERM OF LOAN AGREEMENT ........................
SECTION 4.04.
LOAN CLOSING SUBMISSIONS ......................
SECTION 4.05.
INITIAL AND SUBSEQUENT DRAWS OF LOAN..
7
7
8
8
8
ARTICLE V. LOAN REPAYMENTS AND NOTE........................................................................................ 8
SECTION 5.01. PAYMENT OF LOAN REPAYMENTS
SECTION 5.02. DELINQUENT LOAN PAYMENTS....
SECTION 5.03. THE NOTE .................................
ARTICLEVI. TERM............................................................................................................................... 10
ARTICLE VII. OBLIGATIONS OF BORROWER UNCONDITIONAL........................................................ 10
SECTION 7.01. OBLIGATIONS OF BORROWER.
10
ARTICLE VIII. FINANCIAL COVENANTS (GENERAL FUND)............................................................... 10
SECTION 8.01. REPRESENTATION REGARDING PROPERTY TAX LIMITATIONS
SECTION 8.02. LEVY AND APPROPRIATE FUNDS TO REPAY LOAN ................
SECTION 8.03. REPORTS AND OPINION; INSPECTIONS ................................
10
10
10
ARTICLE IX. DISCLAIMER OF WARRANTIES........................................................................................ 10
ARTICLE X. OPTION TO PREPAY LOAN.............................................................................................. 11
ARTICLE XI. ASSIGNMENT.................................................................................................................. 11
ARTICLE XII. EVENTS OF DEFAULT AND REMEDIES............................................................................. 11
SECTION 12.01.
EVENTS OF DEFAULT DEFINED ..........................
SECTION 12.02.
NOTICE OF DEFAULT ........................................
SECTION 12.03.
REMEDIES ON DEFAULT ....................................
SECTION 12.04.
ATTORNEYS' FEES AND OTHER EXPENSES........
SECTION 12.05.
APPLICATION OF MONEY ...................................
SECTION 12.06.
NO EXCLUSIVE REMEDY, WAIVER, AND NOTICE.
11
12
12
12
12
12
ARTICLE XIII. MISCELLANEOUS.......................................................................................................... 13
SECTION 13.01.
NOTICES...........................................................
SECTION 13.02.
BINDING EFFECT ...............................................
SECTION 13.03.
SEVERABILITY...................................................
SECTION 13.04.
AMENDMENTS, CHANGES, AND MODIFICATIONS..
SECTION 13.05.
EXECUTION IN COUNTERPARTS ..........................
SECTION 13.06.
APPLICABLE ACT ...............................................
SECTION 13.07.
CONSENTS AND APPROVALS ..............................
SECTION 13.08.
INDEMNITY........................................................
SECTION 13.09.
WAIVER OF PERSONAL LIABILITY ........................
SECTION 13.10.
CAPTIONS.........................................................
13
13
13
13
13
13
13
14
14
14
e
DocuSign Envelope ID: 71 F68133-5882-4BF5-B2D9-4D6FB57E7D5C
This Loan Agreement (the "Agreement") dated as of June 2, 2023, and entered into
between the Board of Investments of the State of Montana (the "Board"), a public body corporate and
instrumentality of the state of Montana, and the City of Kalispell ("the Borrower"), a political subdivision of
the state of Montana;
WITNESSETH:
WHEREAS, pursuant to § 2-15-1808, Montana Code Annotated (MCA) and Title 17,
Chapter 5, Part 16, MCA (the "Act"), the Board has established its INTERCAP Loan Program pursuant to
which the Board will issue, from time to time, its Annual Adjustable Rate Municipal Finance Consolidation
Act Extendable Bond (INTERCAP Loan Program) (the "INTERCAP Bond"), for the purpose of making
loans to Eligible Government Units to finance or refinance the acquisition and installation of equipment,
personal and real property improvements, and to provide temporary financing of projects, or for other
authorized corporate purposes of an Eligible Government Unit (the "Projects"); and
WHEREAS, the Board has agreed to loan part of the proceeds of an issue of such Bonds
to the Borrower in the amount of $252,000.00, and the Borrower has agreed to borrow such amount from
the Board, subject to the terms and conditions of and for the purposes set forth in this Agreement; and
WHEREAS, the Borrower is authorized under the laws of the State of Montana, and has
taken all necessary action, to enter into this Agreement for the Project as identified in the Description of
the Project/Summary of Disbursements attached hereto.
NOW, THEREFORE, for and in consideration of the premises hereinafter contained, the
parties hereby agree as follows:
ARTICLE I. DEFINITIONS AND RULES OF INTERPRETATION.
Section 1.01. Definitions
The following terms will have the meanings indicated below for all purposes of this Agreement
unless the context clearly requires otherwise. Capitalized terms used in this Agreement and not defined
herein shall have the meanings set forth in the Board Resolution.
"Act" means Section 2-15-1808, MCA and Title 17, Chapter 5, Part 16, MCA as now in
effect and as it may from time to time be amended or supplemented.
"Adjusted Interest Rate" means the interest rate on the Loan determined and established
pursuant to the Promissory Note and the Loan Agreement or Borrower Resolution.
"Adjustment Date" means the Initial Adjustment Date or a Subsequent Adjustment Date.
"Adjustment Period" means the period beginning on an Adjustment Date and ending on the
day before the next succeeding Adjustment Date.
"Amortization Schedule" means the schedule prepared for a loan advance to the Borrower
showing the principal amount advanced, the amortization of the principal, and the interest and principal
payments due to the Subsequent Interest Adjustment Date.
"Authorized Representative" shall mean the officers of the Borrower designated by the
Governing Body and set forth in the Application and signed on behalf of the Borrower by a duly authorized
official.
DocuSign Envelope ID: 71 F68133-5882-4BF5-B2D9-4D6FB57E7D5C
"Board" means the Board of Investments of the State of Montana, a public body corporate
organized and existing under the laws of the State and its successors and assigns.
"Board Resolution" means Board Resolution No. 249, adopted November 30, 2021,
authorizing the issuance and sale of the INTERCAP Bond for the purpose of making loans to Eligible
Government Units.
"Borrower" means the City of Kalispell, the Eligible Government Unit, which is borrowing
and using the proceeds of the Loan to finance, refinance, or be reimbursed for, all or a portion of the Cost
of the Total Project.
"Borrower Act" means §§ 7-7-4101, and 7-7-4201, 7-5-4306 , MCA authorizing an Eligible
Government Unit to borrow money on terms consistent with the Program.
"Borrower Resolution" means a resolution, duly and validly adopted by a Borrower
authorizing the execution and delivery to the Board of an Agreement and Note, in substantially the form
provided, or such other form of Resolution that the Board may approve, and all amendments and
supplements thereto.
"Commencement Date" means June 2, 2023, the date when the term of this Agreement
begins and when the obligation of the Borrower to make Loan Repayments begins to accrue.
"Counsel" means an attorney or firm of attorneys duly admitted to practice law before the
highest court of any state.
"Default" means an event or condition the occurrence of which would, with the lapse of time
or the giving of notice or both, become an Event of Default.
"Electronic Funds Transfer (EFT) Authorization" shall mean the authorization given by the
Borrower to the Board to initiate electronic debit and/or credit entries to the Borrower's specified account
to fund the Loan and make automatic Loan repayments when due. The Board may also initiate the
electronic debit for periodic principal paydown or payoff prior to loan maturity upon the Borrower's request.
"Eligible Government Unit" shall mean any municipal corporation or political subdivision of
the state, including without limitation any city, town, county, school district, or other special taxing district
or assessment or service district authorized by law to borrow money; any board, agency, or department of
the state; or the board of regents of the Montana university system when authorized by law to borrow
money.
"Event of Default" means any occurrence or event described in Article X hereof.
"Fiscal Year" means the fiscal year of the Borrower beginning July 1 and ending June 30.
"Governing Body" means (i) with respect to a county, the Board of County Commissioners;
(ii) with respect to a city, the City Council or Commission; and (iii) with respect to a school district, county
water or sewer district, hospital district, rural fire district, or any other special purpose district, the Board of
Trustees.
"Initial Adjustment Date" means the first February 16 following the date of the Agreement.
"Initial Interest Rate" means the Loan Rate from the date of the Agreement to the Initial
Adjustment Date.
DocuSign Envelope ID: 71 F68133-5882-4BF5-B2D9-4D6FB57E7D5C
"INTERCAP Bond" means the Board of Investments of the State of Montana's Annual
Adjustable Rate Municipal Finance Consolidation Act Extendable Bond (INTERCAP Loan Program),
Taxable Series 2022, authorized to be issued for the Program.
"Loan" means the loan of money by the Board to the Borrower under the terms of this
Agreement pursuant to the Act and the Borrower Act, evidenced by the Note.
"Loan Agreement" or "Agreement" means this Agreement, including, the attachments
hereto, as originally executed or as they may from time to time be supplemented, modified or, amended in
accordance with the terms hereof.
"Loan Date" means the date of closing a Loan.
"Loan Rate" means the rate of interest on the Loan as provided for in Section 5.01 of this
Agreement
"Loan Repayment Date" means February 15th and August 15th or, if any such day is not a
Business Day, the next Business Day thereafter, during the term of the Loan.
"Loan Repayments" means the payments payable by the Borrower pursuant to Article V of
this Agreement.
"Loan Term" means the term provided for in Article VI of this Agreement.
"Maximum Rate" means the maximum rate of interest on the INTERCAP Bond which shall
not exceed seven and sixty-five hundredths percent (7.65%) per annum plus up to an additional one and
fifty hundredths percent (1.50%), as such Maximum Rate may be adjusted as provided in the Board
Resolution.
"Note" means the promissory note executed and delivered by the Borrower attached hereto
and made a part hereof.
"Program" means the Board's INTERCAP Loan Program established under the Act and
pursuant to which the Board finances Projects for Eligible Government Units.
"Program Expenses" means the expenses of the Program, including (without limitation)
other fees and expenses of the Program or of the Board relating thereto as shall be approved by the Board.
"Project" means those items of equipment, personal or real property improvements to be
acquired, installed, financed, or refinanced under the Program and set forth in the Description of the
Project/Summary of Disbursements attached hereto.
"Project Costs" shall mean the portion of the costs of the Total Project to be financed by the
INTERCAP Loan. The Project Costs may not exceed the Loan Amount as set forth on the cover hereof.
"State" means the state of Montana.
"Subsequent Interest Adjustment Date or Subsequent Adjustment Date" means February
16 in the years the Loan remains outstanding.
"Term Sheet" means the document containing the terms and conditions issued by the Board
to the Borrower that must be satisfied prior to entering into a Loan Agreement.
"Term Sheet Issuance Date" means the date the Board executes its Term Sheet under the
Board's Program.
DocuSign Envelope ID: 71 F68133-5882-4BF5-B2D9-4D6FB57E7D5C
"Total Project" means the project as described in Section 14 of the Term Sheet and/or
Section 2 of the application, of which some or all is to be financed by the INTERCAP Loan.
"Total Project Costs" means the entire cost of acquiring, completing or constructing the
project as further described in Section 14 of the Terms & Conditions Sheet and/or Section 2 of the
application.
Section 1.02. Rules of Interpretation.
For purposes of this Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) "This Agreement" means this instrument as originally executed and as it may from time
to time be modified or amended.
(b) All references in this instrument to designated "Articles", "Sections" and other
subdivisions are to the designated Articles, Sections and other subdivisions of this instrument as
originally executed. The words "herein", "hereof', "hereunder", and "herewith" and other words of
similar import refer to this Agreement as a whole and not to any particular Article, Section or other
subdivision.
(c) The terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular.
(d) All accounting terms not otherwise defined herein have the meanings assigned to them
in accordance with generally accepted accounting principles.
(e) The terms defined elsewhere in this Agreement shall have the meanings therein
prescribed for them.
(f) Words of the masculine gender shall be deemed and construed to include correlative
words of the feminine and neuter gender.
(g) The headings or captions used in this Agreement are for convenience of reference only
and shall not define or limit or describe any of the provisions hereof or the scope or intent hereof.
(h) This Agreement shall be construed in accordance with the laws of the State.
Section 1.03. Attachments
The following are attachments and a part of this Agreement:
Description of the Project/Summary of Disbursements.
Borrower's Draw Certificate.
Promissory Note.
Opinion of Borrower's Counsel.
Electronic Funds Transfer (EFT) Authorization
Certificate of Appropriation (if applicable).
DocuSign Envelope ID: 71 F68133-5882-4BF5-B2D9-4D6FB57E7D5C
ARTICLE II. REPRESENTATIONS, COVENANTS AND WARRANTIES OF BORROWER.
Section 2.01. Representations and Warranties.
Borrower represents and warrants for the benefit of the Board and the Bondholder as follows:
(a) Organization and Authority. The Borrower:
(1) is a political subdivision of the State of Montana; and
(2) has complied with all public bidding and other State and Federal laws applicable
to this Agreement and the acquisition or installation of the Project.
(b) Full Disclosure. There is no fact that the Borrower has not disclosed to the Board or its
agents in writing that materially adversely affects or (so far as the Borrower can now foresee),
except for pending or proposed legislation or regulations that are a matter of public information
affecting the ability of the Borrower to levy property taxes, collect fees and charges for services
provided by the Borrower or otherwise receive revenues, that will materially adversely affect the
properties, activities, prospects or condition (financial or otherwise) of the Borrower or the ability of
the Borrower to make all repayments and otherwise perform its obligations under this Agreement,
and the Note.
(c) Pending Litigation. There are no proceedings pending, or to the knowledge of the
Borrower threatened against or affecting the Borrower in any court or before any governmental
authority or arbitration board or tribunal that, if adversely determined, would materially adversely
affect the properties, activities, prospects or condition (financial or otherwise) of the Borrower, or
the ability of the Borrower to make all Loan Repayments and otherwise perform its obligations
under this Agreement, and the Note, and that have not been disclosed in writing to the Board.
(d) Borrowing Legal and Authorized. The transaction provided for in this Agreement and
the Note:
(1) are within the powers of the Borrower and have been duly authorized by all
necessary action on the part of the Borrower, including the adoption of a resolution
substantially in the form provided hereto with such modification as may be provided by the
Board; and
(2) will not result in any breach of any of the terms, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Borrower pursuant to any indenture, loan
agreement or other instrument (other than this Agreement and the Note) to which the
Borrower is a party or by which the Borrower may be bound, nor will such action result in
any violation of the provisions of any state laws, or ordinances or resolutions of the
Borrower; and
(3) the amount of the Loan represented hereby has been added to the amount of
all other outstanding debt of the Borrower and together therewith does not result in the
Borrower exceeding its statutory debt limitation.
(e) No Violation. No event has occurred and no condition exists that, upon execution of
this Agreement and the Note or receipt of the Loan, would constitute a Default or an Event of
Default. The Borrower is not in violation in any material respect, and has not received notice of
any claimed violation, of any term of any agreement, statute, ordinance, resolution, bylaw or other
instrument to which it is a party or by which it or its property may be bound.
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(f) Use of Proceeds. The Borrower will apply the proceeds of the Loan solely to finance
the Project Costs described in the Description of the Project/Summary of Disbursements attached
hereto. In addition, the Borrower will pay the loan proceeds to a third party within five business
days after the date they are advanced (except for proceeds to reimburse the Borrower for
previously paid expenditures, which are deemed allocated on the date advanced).
(g) Completion of the Total Project; Payment of Total Project Costs. The Borrower shall
proceed diligently to complete the Total Project and to obtain the necessary funds to pay the Total
Project Costs thereof. The Borrower shall pay any amount required for the acquisition, construction
and equipping of the Total Project in excess of the Loan Amount as set forth on the cover hereof.
Section 2.02. Particular Covenants of Borrower.
(a) Compliance with Statutory Requirements, Competitive Bidding, Montana Labor Laws,
Environmental Review, and Other Legal Requirements. The Borrower has complied with all
statutory requirements, including competitive bidding and labor requirements and environmental
review, applicable to the acquisition and construction of the Project.
(b) Maintenance and Use of Project. The Borrower shall maintain the Project in good
condition, make all necessary renewals, replacements, additions, betterments and improvements
thereto, is not for private use, and maintain insurance with respect to the Project, its other properties
and its operations in such amounts and against such risks as are customary for governmental
entities such as the Borrower.
(c) Financial Reports and Audits. The Borrower shall comply with the provisions of Title 2,
Chapter 7, Part 5 Montana Code Annotated.
(d) Liens. The Borrower shall not create, incur or suffer to exist any lien, charge or
encumbrance on the project vehicle and/or equipment.
(e) Expenses. The Borrower will, at the request of the Board, pay all expenses relating to
the Loan and the Note and this Agreement.
ARTICLE III. LOAN TO BORROWER,
Subject to the terms and conditions of this Agreement, the Board hereby agrees to loan and
advance to the Borrower, and the Borrower agrees to borrow and accept from the Board, the Loan in the
principal amount not to exceed $252,000.00.
ARTICLE IV. LOAN PROVISIONS.
Section 4.01. Commencement of Loan Agreement
This Agreement shall commence on the date hereof unless otherwise provided in this Agreement.
Section 4.02. Termination of Agreement.
This Agreement will terminate upon payment in full of all amounts due under this Agreement and
upon the full and complete performance and payment of all the Borrower's other obligations hereunder.
Until such termination, all terms, conditions, and provisions of this Agreement shall remain in full force and
effect.
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Section 4.03. Term of Loan Agreement.
This Agreement shall be valid for the entire loan amount approved for one year from the Term
Sheet Issuance Date. Beginning one year after the Term Sheet Issuance Date, the Board may refuse to
make a loan advance if the Board determines that there has been a material adverse change in the
circumstances of the Borrower.
Section 4.04. Loan Closing Submissions.
Concurrently with the execution and delivery of this Agreement, the Borrower is providing to the
Board, the following documents (except that the Board may waive any of such documents):
(a) A certified resolution of the Borrower in form and substance substantially identical to
that provided hereto; provided, however, that the Board may permit variances in such certified
resolution from the form or substance of such resolution if, in the good faith judgment of the Board,
such variance is not to the material detriment of the interests of the Program and the Bondholder;
(b) An opinion of the Borrower's counsel in form and substance substantially identical to
the Attorney's Opinion hereto; provided, however, that the Board may permit variances in such
opinion from the form or substance of such Attorney's Opinion if, in the good faith judgment of the
Board, such variance is not to the material detriment of the interests of the Program and the
Bondholder;
(c) The complete and executed EFT Authorization, attached hereto, required by the Board;
(d) A bill, or bills of sale, construction contract or contracts, invoice or invoices, purchase
order or purchase orders or other evidence satisfactory to the Board that the Project has been
purchased, ordered, constructed or installed by the Borrower or that any construction has been
substantially completed and that payment therefor is due and owing or, if the Borrower is to be
reimbursed, that payment has been made; and for any debt being refinanced, the canceled note or
other financing document or other evidence satisfactory to the Board of such refinancing;
(e) Such other closing documents and certificates as the Board may reasonably request.
Section 4.05. Initial and Subsequent Draws of Loan.
For the initial draw of the Loan, the Borrower shall deliver to the Board an executed copy of the
Agreement, complete with all attachments as listed in Section 4.04, including the Note and the Agreement
Resolution and other documents the Board requires.
For subsequent draws, if applicable, the Borrower shall deliver to the Board, an executed copy of
a Disbursement Request items listed in 4.04(d) that are equal to or more than requested draw amount,
and any other documents the Board requires.
ARTICLE V. LOAN REPAYMENTS AND NOTE.
Section 5.01. Payment of Loan Repayments
(a) The Loan Repayment Dates shall be on February 15 and August 15 of each year with
the first Loan Repayment Date determined as follows:
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First Loan Payment
Date of Draw Repayment Date Consisting of:
February 15 through April 17 August 15 Principal and Interest
April 18 through June 16 August 15 Interest only
June 17 through August 14 February 15 Principal and interest
from date of draw
August 15 through October 18 February 15 Principal and Interest
October 19 through December 17 February 15 Interest only
December 18 through February 14 August 15 Principal and Interest
from date of draw
(b) Borrower hereby agrees the Loan Repayments will be made pursuant to the attached
EFT Authorization on each Loan Repayment Date to be calculated by the Board and consisting of
the sum of the following items:
(i) Principal in an amount based upon the initial Amortization Schedule, the
Amortization Schedule being initially determined utilizing the Initial Interest Rate. Each
advance of the principal of the Loan as shown on the Amortization Schedule shall be repaid
in semiannual installments on each Loan Repayment Date commencing on the first Loan
Repayment Date following the date thereof and ending on the final maturity date set forth
on the Amortization Schedule. Principal payments will not be adjusted but the interest
payment will be adjusted as provided in Section 5.01 hereof.
(ii) Interest for each Adjustment Period at the Loan Rate.
(c) The Loan Rate is a combination of the INTERCAP Bond rate per annum plus up to an
additional one and fifty hundredth percent (1.50%) per annum as is necessary to pay the Borrower's
share of Program Expenses, as determined by the Board, and shall not exceed the Maximum Rate.
(d) Within the following month of the Adjustment Date the Board shall calculate the new
interest component of the Loan Repayments and shall send a revised Amortization Schedule to
the Borrower showing the amount of the Borrower's semiannual Loan Repayments.
Section 5.02. Delinquent Loan Payments.
If the automatic EFT Authorization fails due to insufficient funds, from and after any Loan
Repayment Date, until repaid, the Loan shall bear interest at a rate equal to two percent on the yield
(coupon equivalent) as of the Loan Repayment Date, on U.S. Treasury Bills of a duration as close as
possible to the term over which the Loan Repayment is delinquent.
Section 5.03. The Note.
On the date of this Agreement, the Borrower shall execute the attached Note. The obligations of
the Borrower under the Note shall be deemed to be amounts payable under Section 5.01. Each payment
made to the Board pursuant to the Note shall be deemed to be a credit against the corresponding obligation
of the Borrower under Section 5.01 and any such payment made to the Board shall fulfill the Borrower's
obligation to pay such amount hereunder and under the Note.
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ARTICLE VI. TERM.
The term of the Loan will be a maximum of five (5) years and the specific term for each loan draw
will be set forth in the Borrower's Draw Certificate.
ARTICLE VII. OBLIGATIONS OF BORROWER UNCONDITIONAL
Section 7.01. Obligations of Borrower.
The obligations of the Borrower to make the payments required hereunder shall be absolute and
unconditional without any defense or right of set off, counterclaim, or recoupment by reason of any default
by the Board under the Loan Agreement or under any other indebtedness or liability at any time owing to
the Borrower by the Board or for any other reason.
ARTICLE VIII. FINANCIAL COVENANTS (GENERAL FUND).
Section 8.01. Representation Regarding Property Tax Limitations.
The Borrower recognizes and acknowledges that the amount of taxes it may levy may be limited
by the state pursuant to § 15-10-402, et seq. The Borrower is familiar with the Montana property tax
provisions and acknowledges that the Loan Repayments to be made under the Agreement and Note are
not exceptions to those provisions. The Borrower represents and covenants that such Loan Repayments
can and will be made from revenues available to the Borrower, notwithstanding those provisions.
Section 8.02. Levy and Appropriate Funds to Repay Loan.
The Borrower agrees that in order to meet its obligation to make the Loan Repayments and all
other payments hereunder that it will budget for as authorized and appropriate from taxes or any other
available sources in each fiscal year during the term of this Agreement an amount sufficient to pay the
principal of and interest hereon within property tax limitations and will reduce other expenditures if
necessary to make the payments hereunder when due.
Section 8.03. Reports and Opinion; Inspections.
(a) The Borrower shall deliver to the Board by no later than August 15 of each year during
the term of this Agreement, a certificate in substantially the form attached hereto that the Governing
Body of the Borrower has budgeted and appropriated for the then current Fiscal Year an amount
sufficient to make the Loan Repayments due in that Fiscal Year, as required in Article VIII.
(b) The Borrower agrees to permit the Board to visit, examine, and inspect, at any
reasonable time, the property constituting the Project, and the Borrower's facilities, and any
accounts, books and records, including its receipts, disbursements, contracts, investments, and
any other matters relating thereto and to its financial standing, and to supply such reports and
information as the Board or the Trustee may reasonably require.
ARTICLE IX. DISCLAIMER OF WARRANTIES.
THE BOARD AND ITS AGENTS MAKE NO WARRANTY OR REPRESENTATION,
EITHER EXPRESSED OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY,
OR FITNESS FOR ANY OR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE PROJECT OR
ANY PORTION THEREOF OR ANY OTHER WARRANTY WITH RESPECT THERETO. In no event shall
the Board or its respective agents be liable for any incidental, indirect, special, or consequential damages
in connection with or arising out of this Agreement or the Project or the existence, furnishing, functioning,
or Borrower's use of the Project or any item or products or services provided for in this Agreement.
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ARTICLE X. OPTION TO PREPAY LOAN.
The Borrower may request the Board approve prepayment of the loan. Upon approval, the
Board will initiate an electronic debit using the attached EFT Authorization for prepayment of the Loan in
whole or in part upon giving 30 days prior written notice to the Board unless the Board agrees to shorter
notice.
If the Loan is prepaid in part, the principal amount of the Loan shall be reduced by the
portion of the prepayment representing principal and the Loan shall be reamortized by ratably reducing the
principal portion of each remaining Loan Repayment.
ARTICLE XI. ASSIGNMENT.
This Agreement may not be assigned or encumbered by the Borrower for any reason without the
express written consent of the Board.
ARTICLE XII. EVENTS OF DEFAULT AND REMEDIES.
Section 12.01. Events of Default Defined.
If any of the following events occur, it is an "Event of Default"
(a) Failure by the Borrower to pay any Loan Repayment required to be paid hereunder at
the time specified herein and the continuation of such failure for a period of three (3) days after
telephonic or e-mail notice by the Board that such payment has not been received;
(b) Failure by the Borrower to observe and perform any covenant, condition, or agreement
on its part to be observed or performed under this Agreement, other than as referred to in Section
12.01(a) for a period of thirty (30) days after written notice, specifying such failure and requesting
that it be remedied, is given to the Borrower by the Board, unless the Board shall agree in writing
to an extension of time prior to its expiration; provided, however, if the failure stated in the notice
cannot be corrected within the applicable period, the Board will not unreasonably withhold their
consent to an extension of such time if corrective action is instituted by the Borrower within the
applicable period and diligently pursued until the Default is corrected;
(c) Any warranty, representation, or other statement by or on behalf of the Borrower
contained in this Agreement or in any instrument furnished in compliance with or in reference to
this Agreement or in connection with the Loan, is false or misleading in any material respect;
(d) The Borrower files a petition in voluntary bankruptcy under the United States Bankruptcy
Code or seeks relief under any provision of any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, or liquidation law of any jurisdiction, whether now or
hereafter in effect, or consents to the filing of any petition against it under such law;
(e) The Borrower is generally not paying its debts as the debts become due, or becomes
insolvent or bankrupt or makes an assignment for the benefit of creditors, or a custodian (including
without limitation a receiver, liquidator or trustee) of the Borrower or any of its property is appointed
by court order or takes possession thereof and such order remains in effect or the possession
continues for more than 30 days.
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Section 12.02. Notice of Default.
The Borrower agrees to give the Board prompt written notice if any petition referred to in Section
12.01(d) is filed by the Borrower or upon the occurrence of any other event or condition constituting a
Default or an Event of Default immediately upon becoming aware of the existence thereof.
Section 12.03. Remedies on Default.
If an Event of Default referred to in Section 12.01 shall have occurred, the Board shall declare the
Loan and all other amounts due hereunder to be immediately due and payable, and upon notice to the
Borrower the same shall become due and payable without further notice or demand. Whenever any Event
of Default referred to in Section 12.01 hereof shall have happened and be continuing, the Board shall have
the right to take one or any combination of the following remedial steps:
(a) Declare the Loan and all other amounts due hereunder to be immediately due and
payable, and upon notice to the Borrower the same shall become immediately due and payable by
Borrower without further notice or demand; and
(b) Take whatever other action at law or in equity may appear necessary or desirable to
collect the amounts then due and thereafter to become due hereunder or to enforce any other of
its or the Board's rights hereunder, including without limitation, the appointment of a receiver as
provided in the Act.
Section 12.04. Attorneys' Fees and Other Expenses.
Upon an Event of Default, the Borrower shall pay to the Board the reasonable fees and expenses
of attorneys and other reasonable expenses incurred by either of them, or by any agency of the State
selected by the Board to act on its behalf or by the Attorney General, in the collection of Loan Repayments
or any other sum due or the enforcement of performance of any other obligations of Borrower.
Section 12.05. Application of Money.
Any money collected by the Board pursuant to Section 12.03 shall be applied: (a) first, to pay any
attorney's fees or other fees and expenses owed by Borrower pursuant to Section 12.04 hereof; (b) second,
to pay interest due on the Loan; (c) third, to pay principal due on the Loan; (d) fourth, to pay any other
amounts due hereunder; and (e) fifth, to pay interest and principal on the Loan and other amounts payable
hereunder but which are not due, as they become due (in the same order, as to amounts which come due
simultaneously, as in (a) through (d) in this Section 12.05).
Section 12.06. No Exclusive Remedy, Waiver, and Notice.
No remedy herein conferred upon or reserved to the Board is intended to be exclusive and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement
or now or hereafter existing at law or in equity. No delay or omission to exercise any right, remedy, or
power accruing upon any Default or Event of Default shall impair any such right, remedy, or power or shall
be construed to be a waiver thereof, but any such right, remedy, or power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle the Board to exercise any remedy
reserved to it in this Article XII, it shall not be necessary to give any notice, other than such notice as may
be required in this Article XII.
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ARTICLE XIII. MISCELLANEOUS.
Section 13.01. Notices.
All notices, certificates or other communications hereunder shall be sufficiently given when hand
delivered or five days after mailing by registered or certified mail, postage prepaid, to the Borrower at the
address specified herein and to the other parties at the following address:
(1) Board: Montana Board of Investments
Attn: Bond Program Office
P.O. Box 200126
Helena, Montana 59620-0126
(2) Borrower: City of Kalispell
P.O. Box 1997
Kalispell, MT 59903
Any of the parties may, by notice in writing given to the others, designate any further or different address
to which subsequent notices, certifies or other communications shall be sent.
Section 13.02. Binding Effect.
This Agreement shall inure to the benefit of and shall be binding upon the Board, the Borrower, and
their respective successors and assigns.
Section 13.03. Severability.
In the event any provision of this Agreement shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision
hereof.
Section 13.04. Amendments, Changes, and Modifications.
This Agreement may not be amended, changed, or modified by the Borrower unless the
amendment shall have been consented to in writing by the Board and made part of this Agreement.
Section 13.05. Execution in Counterparts,
This Agreement may be simultaneously executed in several counterparts, each of which shall be
an original and all which shall constitute but one and the same instrument.
Section 13.06. Applicable Act.
This Agreement shall be governed by and construed in accordance with the laws of the State.
Section 13.07. Consents and Approvals.
Whenever the written consent or approval of the Board shall be required under the provisions of
this Agreement, such consent or approval may be given by the Executive Director of the Board, or
designee, unless otherwise provided by law or by rules, regulations or resolutions of the Board.
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Section 13.08. Indemnity.
The Borrower agrees to indemnify and hold harmless the Board, their respective officers,
employees, and agents, from and against any and all losses, claims, damages, liability, or expenses, of
every conceivable kind, character and nature whatsoever, including, but not limited to, losses, claims,
damages, liabilities, or expenses (including reasonable fees for attorneys, accountants, consultants, and
other experts) (collectively referred to hereinafter in this Section 13.08 as "Damages") as follows:
(a) For all Damages arising out of, resulting from, or in any way connected with the Loan
or this Agreement, without limitation; and
(b) For all Damages arising out of, resulting from, or in any way connected with the
acquisition, construction, installation, and operation of the Project.
Notwithstanding the foregoing, the Borrower shall have no liability for damages solely arising out of,
resulting from, or connected to the Loan or Agreement of any other Borrower.
Section 13.09. Waiver of Personal Liability.
No member, officer, agent, or employee of the Board shall be individually or personally liable for
the making of the Loan or be subject to any personal liability or accountability by reason hereof; but nothing
herein contained shall relieve any such member, officer, agent, or employee from the performance of any
official duty provided by law or by this Agreement.
Section 13.10. Captions.
The captions or headings in this Agreement are for convenience only and in no way define, limit,
or describe the scope or intent of any provisions or sections of this Agreement.
IN WITNESS WHEREOF, the Board has executed this Agreement by its duly authorized
officers and the Borrower has caused this Agreement to be executed in its name by its duly authorized
officers. All the above occurred as of the date first above written.
WITNESS OR ATTEST:
By Aimee Brunckhorst
Its City Clerk
BOARD OF INVESTMENTS OF THE
STATE OF MONTANA
DocuSigned by: //An
B9493C3E3B57486...
By Louise Welsh
Its Senior Bond Program Officer
CITY OF KALISPELL
By Doug Russell
Its City Manager
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