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2. Resolution 5604 - Board of Investment LoanCity of Kalispell Charles A. Harball Office of City Attorney City Attorney 201 First Avenue East P.O. Box 1997 Kalispell, MT 59903-1997 101 TO: Doug Russell, City Manager�� FROM: Charles Harball, City Attorney Tel 406.758.7709 Fax 406.758.7771 charball@kalispell.com SUBJECT: Resolution No. 5604 — Authorizing Loan with Montana Board of Investments for Annual Purchases of Budgeted Equipment MEETING DATE: January 22, 2013 — Regular Council Meeting BACKGROUND: During those times when the borrowing rates have been advantageous to the City, it has utilized the Montana BOI Intercap Revolving Loan Fund to assist it in making purchases of needed equipment. This helps the City in managing the consistency of its cash flows. Because it was projected that the available interest rates would remain low, the use of this loan fund was again anticipated and calculated into the budget that was presented and approved by the Council. The cost of the equipment acquisition included in this loan was also calculated into the budget that has been presented and approved by the Council. The principal amount of the loan is $375,000 and is for a term of five years. The initial rate is 1.25% and may be adjusted by the MBOI 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 upon the loan and only to the extent of the draws that are made. As of this date the City has purchased $65,000 worth of budgeted equipment for the Parks Department. It is the intent to make a draw on the loan for this amount so that payments may be made over the term of up to five years thereby assisting the Parks Department with its cash flows. The Public Works Department anticipates making budgeted equipment purchases during this fiscal year and to also take advantage of the loan proceeds and the favorable rates. RECOMMENDATION: It is recommended that the City Council, by means of Resolution No. 5604, authorize the City Manager to execute the necessary agreements included in this packet to finalize this loan with the Montana Board of Investments Intercap Revolving Loan Fund. Resolution No. 5604 Memorandum January 16, 2013 Page - 2 FISCAL IMPACTS: The debt service on the loan proceeds is currently 1.25% and could possibly increase, depending upon the market. 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. If the entire amount of the loan was drawn by the City immediately, the initial annual debt service would be approximately $4,800. However, as the draws will occur in increments through the year and two payments are made each year, this debt service is declining so long as the rate remains as it is or declines. Respectfully submitted, r Charles arb 11, City Attorney Office of City Attorney City of Kalispell RESOLUTION NO.5604 A RESOLUTION AUTHORIZING PARTICIPATION IN THE BOARD OF INVESTMENTS OF THE STATE OF MONTANA ANNUAL ADJUSTABLE RATE TENDER OPTION MUNICIPAL FINANCE CONSOLIDATION ACT BONDS (INTERCAP REVOLVING PROGRAM), APPROVING THE FORM AND TERMS OF THE LOAN AGREEMENT AND AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED THERETO. BE IT RESOLVED BY THE CITY COUNCIL 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 Bonds determined in accordance with the provisions of Section 3.03 of the Indenture. Authorized Representative shall mean the officers of the Borrower designated and duly empowered by the Governing Body and set forth in the application. Board shall mean the Board of Investments of the State of Montana, a public body corporate organized and existing under the laws of the State and its successors and assigns. Board Act shall mean Section 2-15-1808, Title 17, Chapter 5, Part 16, MCA, as amended. Bonds shall mean the Bonds issued by the Board pursuant to the Indenture to finance the Program. Borrower shall mean the Borrower above named. Indenture shall mean that certain Indenture of Trust dated March 1, 1991 by and between the Board and the Trustee pursuant to which the Bonds are to be issued and all supplemental indentures thereto. Loan means the loan of money by the Board to the Borrower under the terms of the Loan Agreement pursuant to the Act and the Borrower Act and evidenced by the Note. Loan Agreement means the Loan Agreement between the Borrower and the Board, including any amendment thereof or supplement thereto entered into in accordance with the provisions thereof and hereof. Loan Agreement Resolution means this Resolution or such other form of resolution that the Board may approve and all amendments and supplements thereto. Loan Date means the date of closing a Loan. Loan Rate means the rate of interest on the Loan which is initially 1.25% per annum through February 15, 2013 and thereafter a rate equal to the Adjusted Interest Rate on the Bonds and up to 1.5% 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. Prog am shall mean the INTERCAP Program of the Board pursuant to which the Board will issue and sell Bonds and use the proceeds to make loans to participating Eligible Government Units. Project shall mean those items of equipment, personal or real property improvements to be acquired, installed, financed or refinanced under the Program as set forth in the Description of the Project/Summary of Draws. Security Instrument means a security agreement in substantially the form set forth, and, a Uniform Commercial Code financing statement, in a form acceptable to the Board and the Trustee granting a security interest in, or a lien on, the property constituting the Project or other real or personal properties added to or substituted therefor. Trustee shall mean U. S. Bank National Association (formerly known as First Trust Company of Montana National Association) and its successors. Section 1.02. Authority. The Borrower is authorized to undertake the Project and is further authorized by the Borrower Act to enter into the Loan Agreement for the purpose of obtaining a loan to finance or refinance the acquisition and installation costs of the Project. Section 1.03. Execution of Agreement and Delivery of Note. Pursuant to the Indenture and the Board Act, the Board has issued and sold the Bonds and deposited a part of proceeds thereof in the Loan Fund held by the Trustee. The Board has, pursuant to the Term Sheet, agreed to make a Loan to the Borrower in the principal amount of $375,000.00 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 $375,000.00 and shall constitute a valid and legally binding obligation of the Borrower. The obligation to repay the Loan shall be evidenced by a Promissory Note. The Loan shall bear interest at the initial rate of 1.25% per annum through February 15, 2013 and thereafter at the Adjusted Interest Rate, plus up to 1.5% per annum as necessary to pay the cost of administering the Program (the Program Expenses). All payments may be made by check or wire transfer to the Trustee at its principal corporate trust office. (b) The Loan Repayment Dates shall be February 15 and August 15 of each year. (c) The principal amount of the Loan may be prepaid in whole or in part provided that the Borrower has given written notice of its intention to prepay the Loan in whole or in part to the Board no later than 30 days prior to the designated prepayment date. (d) The Prepayment Amount shall be equal to the principal amount of the Loan outstanding, plus accrued interest thereon to the date of prepayment. (e) Within fifteen days following an Adjustment Date, the Trustee shall calculate the respective amounts of principal and interest payable by each Borrower on and with respect to its Loan Agreement and Note for the subsequent August 15 and February 15 payments, and prepare and mail by first class 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 del. v ered to the Trustee a certified copy of this Resolution, the executed Loan Agreement and Note in a form satisfactory to the Borrower's Counsel and the Board's Bond Counsel and such other certificates, documents and opinions as set forth in the Loan Agreement or as the Board or Trustee may require. The Borrower will pay the loan proceeds to a third party within five business days after the date they are advanced (except for proceeds to reimburse the Borrower for previously paid expenditures, which are deemed allocated on the date advanced). Section 2.03. 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 repayment of the Loan shall be secured by a security interest in the Project being financed.] 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 Limitation Act. The Borrower recognizes and acknowledges that the amount of taxes it may levy is limited by the state pursuant to Section 15-10-402, et. seq. (the Property Tax Limitation Act). The Borrower is familiar with the Property Tax Limitation Act and acknowledges that the obligation to repay the Loan under the Agreement and Note are not exceptions to the provisions of the Property Tax Limitation Act. The Borrower represents and covenants that the payment of principal of and interest on the Loan can and will be made from revenues available to the Borrower in the years as they become due, notwithstanding the provisions of the Property Tax Limitation Act. Section 2.05. Levy and Appropriate Funds to Repay. 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 Bonds, certified copies of this Resolution and all other resolutions and actions of the Borrower and of said officers relating to the Loan Agreement, the Note, the Security Agreement 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. Leizal Opinion. The attorney to the Borrower is hereby authorized and directed to deliver to the Board at the time of Closing of the Loan his or her opinion regarding the Loan, the Loan Agreement, the Note and this Resolution in substantially the form of the opinion set forth in the Attorney's Opinion. Section 3.03. Execution. The Loan Agreement, Note, Security Agreement 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, ON THE 22ND DAY OF JANUARY, 2013. Tammi Fisher Mayor ATTEST: Theresa White City Clerk DATE OF AGREEMENT: LOAN AMOUNT: ADDRESS OF BORROWER: COPY LOAN AGREEMENT between BOARD OF INVESTMENTS OF THE STATE OF MONTANA and CITY OF KALISPELL as Borrower February 1, 2013 Loan #2475 THREE HUNDRED SEVENTY-FIVE THSOUAND AND 00/100 DOLLARS ($375,000.00) CONTACT PERSON OF BORROWER: NAME TITLE TELEPHONE FACSIMILE E-MAIL ALTERNATE CONTACT PERSON NAME TITLE TELEPHONE FACSIMILE E-MAIL City of Kalispell P.O. Box 1997 Kalispell, MT 59903-1997 Doug Russell City Manager (406) 758-7703 (406) 758-7758 drussell@kalispell.com Theresa White City Clerk (406)758-7701 (406) 758-7758 twhite@,kalispell.com STATUTORY AUTHORITY FOR BORROWING: 7,7-4101, 7-7-4201 and 7-5-4306, M.C.A. TABLE OF CONTENTS ARTICLE I. DEFINITIONS AND RULES OF INTERPRETATION . ........................... ....................................... 2 SECTION1.01. DEFINITIONS .................................................................................................................................................... 2 SECTION 1.02. RULES OF INTERPRETATION . ................................................................................................................ ........ -.5 SECTION1.03. ATTACHMENTS ................................................................................................................................................ 5 ARTICLE 11. REPRESENTATIONS, COVENANTS AND WARRANTIES OF BORROWER ........................... 6 SECTIoN2.01. REPRESENTATIONS AND WARRANTIES . ........................................................................................................... 6 SECTION 2.02. PARTICULAR COVENANTS OF BORROWER . ............................................ ......................................................... 7 ARTICLE111. LOAN TO BORROWER .................................................................................................................. 7 ARTICLEIV. LOAN PROVISIONS . ........................................................... : ........................................................... 7 SECTION 4.01. COMMENCEMENT OF LOAN AGREEMENT ......................................................................................................... 7 SECTION 4.02. TERMINATION OF AGREEMENT . ....................................................................................................................... 8 SECTION 4.03. TERM OF LOAN AGREEMENT . ................... ...................................................................................................... 8 SECTION 4.04. LOAN CLOSING SUBMISSIONS .......................................................................................................................... 8 SECTION 4.05. INITIAL AND SUBSEQUENT DRAWS OF LOAN . .................................................................................................. 8 ARTICLE V. LOAN REPAYMENTS AND NOTE . ............................................................................................... 9 SECTION 5.01. PAYMENT OF LOAN REPAYMENTS .................................................................................................................. 9 SECTION 5.02. DELINQUENT LOAN PAYMENTS . ................. ..................................................................................................... 9 SECTION5.03. THE NOTE .................................................... ................................................................................................... 9 ARTICLEVI. TERK ............................. ................................................................................................................ 10 ARTICLE VII. OBLIGATIONS OF BORROWER UNCONDITIONAL ............................................................. 10 SEcTioN7.01. OBLIGATIONS OF BORROWER . ....................................................................................................................... 10 ARTICLE VIII. FINANCIAL COVENANTS (GENERAL FUND) . ................................................................... 10 SECTION 8.01. REPRESENTATION REGARDING THE PROPERTY TAX LIMITATION ACT . ......................................................... 10 SECTION 8.02. LEVY AND APPROPRIATE FUNDS To REPAY LOAN ......................................................................................... 10 SECTION 8.03. REPORTS AND OPINION; INSPECTIONS . ..................................... .................................................................... 10 ARTICLE IX. DISCLAIMER OF WARRANTIES . ....................................................................................... v ...... 10 ARTICLEX. OPTION TO PREPAY LOAN ......................................................................................................... I I ARTICLEXI. ASSIGNMENT ........................................................................ I ...................................................... I I SECTION 11.01. ASSIGNMENT By BOARD OR TRUSTEE . ........................................................ ............................................... 11 SECTION 11.02. ASSIGNMENT By BORROWER ....................................................................................................................... I I ARTICLE XII. EVENTS OF DEFAULT AND REMEDIES . ............................................................................... I I SECTION 12.01. EVENTS OF DEFAULT DEFINED . ......................................... ................................................................. ....... 11 SECTION 12.02. NOTICE OF DEFAULT ........................................................... :"*",*,*"* ....... * ....... ........ - ...... 12 SECTION 12.03. REMEDIES ON DEFAULT ................. ................. .................................... .......................................... 12 SECTION 12.04. ATTORNEYS FEES AND OTHER EXPENSES .............................................. ......................................... ........... 12 SECTION12.05. APPLICATION OF MONEYS . .......................................................................................................................... 13 SECTION 12.06. NO REMEDY EXCLUSIVE, WAIVER AND NOTICE ................................................. ........................................ 11) ARTICLEXIII. MISCELLANEOUS...........................................................................................................:.........13 SECTION13.01. NOTICES. . ................................................................................................................. .................................. 13 SECTION13.02. BINDING EFFECT.......................................................................................................................................... 13 SECTION13.03. SEVERABILITY.............................................................................................................................................13 SECTION 13.04. AMENDMENTS, CHANGES AND MODIFICATIONS..........................................................................................14 SECTION 13.05. EXECUTION IN COUNTERPARTS...................................................................................................................14 SECTION13.06. APPLICABLE ACT.........................................................................................................................................14 SECTION 13.07. CONSENTS AND APPROVALS........................................................................................................................ 14 SECTION13.08. INDEMNITY.................................................................................................................................................. 14 SECTION 13.09. WAIVER OF PERSONAL LIABILITY...............................................................................................................14 SECTION13.10. CAPTIONS....................................................................................................................................................14 This Loan Agreement (the "Agreement") dated as of the date set forth on the cover hereof, and entered into between the Board of Investments of the State of Montana (the 'Board"), a public body corporate and instrumentality of the state of Montana, and the .Borrower whose name is set forth on the cover hereof ("the Borrower"), a political subdivision of the State of Montana; WITNESSETH: WHEREAS, pursuant to Section 2-15-1808, Montana Code Annotated and Title 17, Chapter 5, Part 16, Montana Code Annotated (the "Act") and in accordance with the Indenture of Trust, dated as of March 1, 1991, between the Board and U. S. Bank National Association (formerly known as First Trust Company of Montana National Association) (the "Trustee"), has established its 1NTERCAP Revolving Program pursuant to which the Board will issue, from time to time, its Annual Adjustable Rate Tender Option Municipal Finance Consolidation Act Bonds (INTERCAP Revolving Program) (the "Bonds"), for the purpose of making loans to Eligible Government Units to finance or refinance the acquisition and installation of equipment, personal and real property improvements, to provide temporary financing of projects or for other authorized corporate purposes of an Eligible Government Unit (the "Projects"); and WHEREAS, the Board has agreed to loan part of the proceeds of an issue of such Bonds to the Borrower in the amount set forth on the Description of the Project/Summary of Disbursements attached hereto and the cover hereof, and the Borrower has agreed to borrow such amount from the Board, subject to the terms and conditions of and for the purposes set forth in this Agreement; and WHEREAS, the Borrower is authorized under the laws of the State of Montana, and has taken all necessary action, to enter into this Agreement for the Project as identified in the Description of the Project/Summary of Disbursements attached hereto. NOW, THEREFORE, for and in consideration of the premises hereinafter contained, the parties hereby agree as follows: ARTICLE I. DEFINITIONS AND RULES OF INTERPRETATION. Section 1.01. Definitions The following terms will have the meanings indicated below for all purposes of this Agreement unless the context clearly requires otherwise. Capitalized terms used in this Agreement and not defined herein shall have the meanings set forth in the Indenture. "Act" means Section 2-15-1808, Montana Code Annotated and Title 17, Chapter 5, Part 16, Montana Code Annotated as now in effect and as it may from time to time hereafter be amended or supplemented. "Adjusted Interest Rate" shall mean the interest rate on the Loan determined and established pursuant to the Promissory Note hereto and the Loan Agreement or Bond Resolution. "Adjustment 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. 2 "Board" means the Board of Investments of the State of Montana, a public body corporate organized and existing under the laws of the State and its successors and assigns. "Bonds" means the Board of Investments of the State of Montana's Annual Adjustable Rate Tender Option Municipal Finance Consolidation Act Bonds (INTERCAP Revolving Program) authorized to be issued for the Program. "Borrower" means the Eligible Government Unit which is set forth on the cover of this Agreement and which is borrowing and using the proceeds of the Loan to finance, refinance or be reimbursed for, all or a portion of the Cost of the Total Project. "Borrower Act" means the section of Montana Code Annotated indicated on the cover hereto, that authorizes an Eligible Government Unit to borrow money on terms consistent with the Program. "Borrower Resolution" means a resolution, duly and validly adopted by a Borrower authorizing the execution and delivery to the Board of an Agreement and Note, in substantially the form provided, or such other form of Resolution that the Board may approve and all amendments and supplements thereto. "Commencement Date" means the date of the Agreement as set forth on the cover hereof when the term of this Agreement begins and the obligation of the Borrower to make Loan Repayments begins to accrue. "Counsel" means an attorney or firm of attorneys duly admitted to practice law before the highest court of any state. "Default" means an event or condition the occurrence of which would, with the lapse of time or the giving of notice or both, become an Event of Default. "Eligible Government Unit" shall mean any municipal corporation or political subdivision of the state, including without limitation any city, town, county, school district, or other special taxing district or assessment or service district authorized by law to borrow money or any board, agency, or department of the state, or the board of regents of the Montana university system when authorized by law to borrow money. "Event of Default" means any occurrence or event described in Article X hereof. "Fiscal Year" means the fiscal year of the Borrower beginning on July 1 and ending June 30. "Governing Body" shall mean (i) with respect to a county, the Board of County Commissioners, (ii) with respect to a city, the City Council or Commission, and (ill) with respect to a school district, county water or sewer district, hospital district, rural fire district, or any other special purpose district, the Board of Trustees. "Indenture" means that certain Indenture of Trust, dated as of March 1, 1991,.by and between the Board and the Trustee, as originally executed or as it may from time to time be supplemented, modified or amended in accordance with its terms. "Initial Adjustment Date" means the first February 16 following the date of the Agreement. "Initial Interest Rate" means the Loan Rate from the date of the Agreement to the Initial Adjustment Date. "Loan" means the loan of money by the Board to the Borrower under the terms of this Agreement pursuant to the Act and the Borrower Act, evidenced by the Note. "Loan Agreement" or "Agreement" means this Agreement, including, the attachments hereto, and the Security Instrument, if any, as originally executed or as they may from time to time be supplemented, modified or amended in accordance with the terms hereof and of the Indenture. "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. Agreement. "Loan Repayments" means the payments payable by the Borrower pursuant to Article V of this "Loan Term" means the term provided for in Article VI of this Agreement. "Maximum Interest Rate" means the maximum rate of interest on the Bonds which shall not exceed fifteen percent (15%) per annum. "Note" means the promissory note executed and delivered by the Borrower attached hereto and made a part hereof. "Program" means the Board's INTERCAP Program established under the Act and pursuant to which the Board finances Projects for Eligible Government Units. "Program Ex ep nses" means the expenses of the Program, including (without limitation) the fees and expenses of the Trustee and such 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 1NTERCAP Loan. The Project Costs may not exceed the Loan Amount as set forth on the cover hereof. "Security Instrument" means a Security Agreement in substantially the form set forth hereto, and, a Uniform Commercial Code financing statement, in a form acceptable to the Board and the Trustee granting a security interest in, or a lien on, the property constituting the Project or other real or personal properties added to or substituted therefor. "Series Supplemental Indenture of Trust" means a Supplemental Indenture of Trust authorizing the issuance of an additional series of bonds in accordance with the provisions of the Indenture. "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" shall mean 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. "Total Project" shall mean the project as described in Section 14 of the Tenn Sheet and/or Section 2 of the application, of which some or all is to be financed by the 1NTERCAP Loan. "Total Project Costs" shall mean the entire cost of acquiring, completing or constructing the project as further described in Section 14 of the Terms & Conditions Sheet and/or Section 2 of the application. "Trustee" means the U. S. Bank National Association (formerly known as First Trust Company of Montana National Association), a. corporation organized and existing under the laws of the United States, or its successor as trustee as provided in the Indenture. Section 1.02. Rules of Interpretation. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) "This Agreement" means this instrument as originally executed and as it may from time to time be modified or amended. (b) All references in this instrument to designated "Articles", "Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of this instrument as originally executed. The words "herein", "hereof', "hereunder", and "herewith" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. (c) The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular. (d) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles. (e) The terms defined elsewhere in this Agreement shall have the meanings therein prescribed for them. (f) Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter gender. (g) The headings or captions used in this Agreement are for convenience of reference only and shall not define or limit or describe any of the provisions hereof or the scope or intent hereof (h) This Agreement shall be construed .in accordance with the laws of the State. Section 1.03. Attachments The following are attachments and a part of this Agreement: Description of the Project/Summary of Disbursements. Borrower's Draw Certificate. Promissory Note. Opinion of Borrower's Counsel. Certificate of Appropriation (if applicable). Form. of Security Instrument (if applicable). ARTICLE II. REPRESENTATIONS COVENANTS AND WARRANTIES OF BORROWER Section 2.01. Representations and Warranties. Borrower represents and warrants for the benefit of the Board, the Trustee and the Bondholders as follows: (a) Organization and Authority. The Borrower: (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, the Note, and the Security Instrument. (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, the Note, and the Security Instrument, and that have not been disclosed in writing to the Board. (d) Borrowing Legal and Authorized. The transaction provided for in this Agreement, the Note, and the Security Instrument: (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, the Note, and the Security Instrument) 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, the Note, and the Security Instrument or receipt of the Loan, would constitute a Default or an Event of Default. The Borrower is not in violation in any material respect, and has not received notice of any claimed violation, of any term of any agreement, statute, ordinance, resolution, bylaw or other instrument to which it is a party or by which it or its property may be bound. (f) Use of' Proceeds. The Borrower will apply the proceeds of the Loan solely to finance the Project Costs described in the Description of the Project/Summary of Disbursements attached hereto. In addition, the Borrower will pay the loan proceeds to a third party within five business days after the date they are advanced (except for proceeds to reimburse the Borrower for previously paid expenditures, which are deemed allocated on the date advanced). (g) Completion of the Total Proiect; 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 and maintain insurance with respect to the Project, its other properties and its operations in such amounts and against such risks as are customary for governmental entities such as the Borrower. (c) Financial Reports and Audits. The Borrower shall comply with the provisions of Title 2, Chapter 7, Part 5 Montana Code Annotated and shall file with the Board financial reports and audits when such reports and audits are required to be filed by the Department of Commerce. (d) Security Interest. The Borrower shall grant the Board a first security interest in the Project being financed by the Loan to 'the extent allowed by law, by executing and delivering the' Security Instrument. (e) Liens. The Borrower shall not create, incur or suffer to exist any lien, charge or encumbrance on the property constituting the Project prior to the security interest granted hereunder other than (i) any security interest or lien pursuant to a loan agreement, mortgage, deed of trust, indenture or similar financing agreement of the Borrower in force and effect as of the date of this Agreement which creates a security interest or lien in after -acquired property of the Borrower and which is approved in writing by the Board, (ii), any security interest, mortgage or deed of trust permitted in writing by the Trustee, or (iii) any security interest or lien imposed or arising by statute or operation of law. (f) Expenses. The Borrower will, at the request of the Board, pay all expenses relating to the Loan, the Note, and the Security Instrument and this Agreement; including but not limited to: (1) The Borrower will cause all financing statements necessary to be filed in connection with the security interest granted in the Security Instrument, if any is required hereunder, to be executed and filed, at Borrower's expense. ARTICLE II1. LOAN TO BORROWER. Subject to the terms and conditions of this Agreement, the Board hereby agrees to loan and advance to the Borrower, and the Borrower agrees to borrow and accept from the Board, the Loan in the principal amount not to exceed the Loan Amount as set forth on the cover hereof. ARTICLE IV. LOAN PROVISIONS. Section 4.01. Commencement of Loan Agreement This Agreement shall commence on the date hereof unless otherwise provided in this Agreement. Section 4.02. Termination of Agreement. This Agreement will terminate upon payment in full of all amounts due under this Agreement and upon the full and complete performance and payment of all of the Borrower's other obligations hereunder. Until such termination, all terms, conditions, and provisions of this Agreement shall remain in full force and effect. Section 4.03. Term of Loan Agreement. This Agreement shall be valid for the entire loan amount approved for one year from the Term Sheet Issuance Date. Beginning one year after the Term Sheet Issuance Date, the Board may refuse to make a loan advance if the Board determines that there has been a material adverse change in the circumstances of the Borrower. Section 4.04. Loan Closing Submissions. Concurrently with the execution and delivery of this Agreement, the Borrower is providing to the Board and the Trustee, the following documents (except that the Board may waive any of such documents): (a) A certified resolution of the Borrower in form and substance substantially identical to that provided hereto; provided, however, that the Board may permit variances in such certified resolution from the form or substance of such resolution if, in the good faith judgment of the Board, such variance is not to the .material detriment of the interests of the Program, the Bondholders and such certified resolutions are acceptable to the Trustee; (b) An opinion of the Borrower's counsel in form and substance substantially identical to the Attorney's Opinion hereto; provided, however, that the Board may permit variances in such opinion from the form or substance of such Attorney's Opinion if, in the good faith judgment of the Board, such variance is not to the material detriment of the interests of the Program, the Bondholders and such opinion is acceptable to the Trustee; (c) The executed Security Instrument, attached hereto, required by the Board, including evidence of filing of a financing statement, if any, in every office in which it is required to be filed in order to perfect the security interest of the Board in the personal property pledged pursuant to the Security Instrument; (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 and Security Instrument, if required, and any other documents the Board requires. 8 ARTICLE V. LOAN REPAYMENTS AND NOTE. Section 5.01. Payment of Loan Repayments (a) The Loan Repayment Dates shall be on February 15 and August 15 of each year with the first Loan Repayment Date determined as follows: First Loan Payment Date of Draw Repayment Date Consisting of: February 15 through April 17 August 15 Principal and Interest April 18 through June 16 August 15 Interest only June 17 through August 14 February 15 Principal and interest from date of draw August :15 through October 18 February 15 Principal and Interest October 19 through December 17 February 15 Interest only December 18 through February 14 August 15 Principal and Interest from date of draw (b) Borrower hereby agrees to make Loan Repayments to the Trustee on each Loan Repayment Date to be calculated by the Trustee and consisting of the sum of the following items: (i) Principal in an amount based upon the initial Amortization Schedule, the Amortization Schedule being initially determined utilizing the Initial Interest Rate. Each advance of the principal of the Loan as shown on the Amortization Schedule shall be repaid in semiannual installments on each Loan Repayment Date commencing on the first Loan Repayment Date following the date thereof and ending on the final maturity date set :Forth on the Amortization Schedule. Principal payments will not be adjusted but the interest payment will be adjusted as provided in Section 5.01 hereof. (ii) Interest for each Adjustment Period at the Loan Rate. (c) The Loan Rate shall equal the interest rate on the Board's bonds, as determined pursuant to Section 3.03 of the Indenture, plus up to 1 1/2% per annum as is .necessary to pay the Borrower's share of Program Expenses as determined by the Board. The interest rate on the Bonds shall not exceed 15% per annum. (d) Within thirty days of the Adjustment Date the Trustee shall calculate the new interest component of the Loan Repayments and shall send a revised Amortization Schedule to the Borrower showing the amount of the Borrower's semiannual Loan Repayments. (e) Loan Repayments may be made by check or wire transfer of funds to the Trustee. Section 5.02. Delinquent Loan Payments. From and after any Loan Repayment Date, until repaid, the Loan shall bear interest at a rate equal to two percent on the yield (coupon equivalent) as of the Loan Repayment Date; on United States of America'Treasury Bills of a duration as close as possible to the term over which the Loan Repayment is delinquent. Section 5.03. The Note. On the date of this Agreement:, the Borrower shal! execute the attached Note. The obligations of the Borrower under the Note shall be deemed to be amounts payable under Section 5.01. Each payment made to the Trustee pursuant to the Note shall be deemed to be a credit against the corresponding obligation of the Borrower under Section 5.01 and any such payment made to the Trustee shall fulfill the Borrower's obligation to pay such amount hereunder and under the Note. ARTICLE VI. TERM. The term of the Loan will be a 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 the Property Tax Limitation Act. The Borrower recognizes and acknowledges that the amount of taxes it may levy is limited by the state pursuant to Section 15-10-420, as amended (the Property Tax Limitation Act). The Borrower is familiar with the Property Tax Limitation Act and acknowledges that the Loan Repayments to be made under the Agreement and Note are not exceptions to the. provisions of the Property Tax Limitation Act. The Borrower represents and covenants that such Loan Repayments can and will be made from revenues available to the Borrower, notwithstanding the provisions of the Property Tax Limitation Act. Section 8.02. Lew and Appropriate Funds to 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 the limitations *of the Property Tax Limitation Act and will reduce other expenditures if necessary to make the payments hereunder when due. Section 8.03. Reports and Opinion; Inspections. (a) The Borrower shall deliver to the Board .by no later than August 15 of each year during the term of this Agreement, a certificate in' substantially the form attached hereto that the Governing Body of the Borrower has budgeted and appropriated for the then current Fiscal Year an amount sufficient to make the Loan Repayments due in that Fiscal Year, as required in Article VIII hereof. (b) The Borrower agrees to permit the Board and the Trustee to examine, visit and inspect, at any reasonable time, the property constituting the Project, and the Borrower's facilities, and any accounts, books and records, including its receipts, disbursements, contracts, investments and any other matters relating thereto and to its financial standing, and to supply such reports and information as the Board or the Trustee may reasonably require. ARTICLE IX. DISCLAIMER OF WARRANTIES. THE BOARD AND ITS AGENTS MAKE NO WARRANTY OR REPRESENTATION, EITHER EXPRESSED OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR In FITNESS FOR ANY OR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE PROJECT OR ANY PORTION THEREOF OR ANY OTHER WARRANTY WITH RESPECT THERETO. In no event shall the Board or the Trustee or their respective agents be liable for any incidental, indirect, special or consequential damages in connection with or arising out of this Agreement or the Project or the existence, furnishing, functioning or Borrower's use of the Project or any item or products or services provided for in this Agreement. ARTICLE X. OPTION TO PREPAY LOAN. The Borrower may prepay the Loan in whole or in part upon giving 30 days prior written notice to the Board. If the Loan is prepaid in part, the principal amount of the Loan shall be reduced by the portion of the prepayment representing principal and the Loan shall be reamortized by ratably reducing the principal portion of each remaining Loan Repayment. ARTICLE XI. ASSIGNMENT. Section 11.01. Assignment by Board or Trustee. (a) The Borrower expressly acknowledges that all right, title and interest of the Board in and to this Agreement (except for the rights of the Board to indemnification pursuant to Section 13.08 hereof) the Note, and the Security Instrument have been assigned to the Trustee, as security for the Bonds, under and as provided in the Indenture, and that if any Event of Default shall occur, the Trustee shall be entitled to act hereunder in the place and stead of the Board. In addition, the Borrower acknowledges that the Board has appointed the Trustee as servicer entitled to act hereunder in the place and stead of the Board. This Agreement, the Note, and the Security Instrument, including (without limitation) the right to receive payments required to be made by the Borrower hereunder and to compel or otherwise enforce performance by the Borrower of its other obligations hereunder, may be further assigned and reassigned in whole or in part to one or more assignees or subassignees by the Trustee at any time subsequent to their execution without the necessity of obtaining the consent of the Borrower. Forthwith upon any such assignment the Trustee shall notify the Borrower thereof. (b) The Borrower acknowledges that payment of the Bonds does not constitute payment of the amounts due under this Agreement. Section 11.02. Assignment by Borrower. This Agreement may not be assigned or encumbered by the Borrower for any reason without the express written consent of the Trustee and the Board. ARTICLE XII. EVENTS OF DEFAULT AND REMEDIES. Section 12.01. Events of Default Defined. If any of the following events occur, it is hereby defined as and declared to be and to constitute an "Event of Default": (a) Failure by the Borrower to pay any Loan Repayment required to be paid hereunder at the time specified herein and the continuation of such failure for a period of three (3) days after telephonic or telegraphic notice by the Trustee that such payment has not been received; (b) Failure by the Borrower to observe and perform any covenant, condition or agreement on its part to be observed or performed under this Agreement, other than as referred to in Section 12.01(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 Trustee, unless the Trustee shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the Trustee will not unreasonably withhold their consent to an extension of such time if corrective action is instituted by the Borrower within the applicable period and diligently pursued until the Default is corrected; (c) Any warranty, representation or other statement by or on behalf of the Borrower contained in this Agreement or in any instrument furnished in compliance with or in reference to this Agreement or in connection with the Loan, is false or misleading in any material respect; (d) The Borrower files a petition in voluntary bankruptcy under the United States Bankruptcy Code or seeks relief under any provision of any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect, or consents to the filing of any petition against it under such law; (e) The Borrower is generally not paying its debts as such debtsbecome due, or becomes insolvent or bankrupt or makes an assignment for the benefit of creditors, or a custodian (including without limitation a receiver, liquidator or trustee) of the Borrower or any of its property is appointed by court order or takes possession thereof and such order remains in effect or such possession continues for more than 30 days; (f) A default occurs under the Security Instrument, if any. Section 12.02. Notice of Default. The Borrower agrees to give the Trustee and the Board prompt written notice if any petition referred to in Section 12.01(d) is filed by the Borrower or of the occurrence of any other event or condition which constitutes a Default or an Event of Default immediately upon becoming aware of the existence thereof. Section 12.03. Remedies on Default. If an Event of Default referred to in Section 12.01(d) shall have occurred, the Trustee shall declare the Loan and all other amounts due hereunder to be immediately due and payable, and upon notice to the Borrower the same shall become due and payable without further notice or demand. Whenever any Event of Default referred to in Section 12.01 hereof shall have happened and be continuing, the Trustee or the Board shall have the right to take any action permitted or required pursuant to the Indenture and shall take one or any combination of the following remedial steps: (a) Declare the Loan and all other amounts due hereunder to be immediately due and payable, and upon notice to the Borrower the same shall become immediately due and payable by Borrower without further notice or demand; and (b) Take whatever other action at law or in equity may appear necessary or desirable to collect the amounts then due and thereafter to become due hereunder or to enforce any other of its or the Board's rights hereunder, including without limitation, the appointment of a receiver as provided in the Act. Section 12.04. Attorneys Fees and Other Ex ep nses. The Borrower shall on demand pay to the Board or the Trustee the reasonable fees and expenses of attorneys and other reasonable expenses incurred by either of them, or by any agency of the State selected by the Board to act on its behalf or by the Attorney General, in the collection of Loan Repayments or any other sum due or the enforcement of performance of any other obligations of Borrower upon an Event of Default. 12 Section 12.05. Application of Moneys. Any moneys collected by the Board or the Trustee pursuant to Section 12.03 hereof shall be applied (a) first, to pay any attorney's fees or other fees and expenses owed by Borrower pursuant to Section 12.04 hereof, (b) second, to pay interest due on the Loan; (c) third, to pay principal due on the Loan; (d) fourth, to pay any other amounts due hereunder; and (e) fifth, to pay interest and principal on the Loan and other amounts payable hereunder but which are not due, as they become due (in the same order, as to amounts which come due simultaneously, as in (a) through (d) in this Section 12.05). Section 12.06. No Remedy Exclusive, Waiver and Notice. No remedy herein conferred upon or reserved to the Board or the Trustee 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 or the Trustee 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 XIl. ARTICLE XIII. MISCELLANEOUS. Section 13.01. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when hand delivered or five days after mailed by registered or certified mail, postage prepaid, to the Borrower at the address specified on the cover hereof and to the other parties at the following addresses: (1) Board: Montana Board of Investments Attn: Bond Program Office P.O. Box 200126 Helena, Montana 59620-0126 (2) Trustee: U. S. Bank National Association Corporate Trust Services PD-WA-T7CT 1420 Fifth Avenue, 7"' Floor Seattle, WA 98101 Any of the parties may, by notice in writing given to the others, designate any further or different addresses to which subsequent notices, certifies or other communications shall be sent. Section 13.02. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the Board, the Borrower and their respective successors and assigns. Section 13.03. Severabili y. 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. 13 Section 13.04. Amendments, Changes and Modifications. This Agreement may not be amended by the Board and the Borrower unless such amendment shall have been consented to in writing by the Trustee. Section 13.05. Execution in Counterparts. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 13.06. Applicable Act. This Agreement shall be governed by and construed in accordance with the laws of the State. Section 13.07. Consents and Approvals. Whenever the written consent or approval of the Board shall be required under the provisions of this Agreement, such consent or approval may be given by the Executive Director of the Board, unless otherwise provided by law or by rules, regulations or resolutions of the Board or unless delegated to the Trustee. Section 13.08. Indemnity. The Borrower agrees to indemnify and hold harmless the Board and the Trustee, their respective officers, employees and agents, from and against any and all losses, claims, damages, liability or expenses, of every conceivable kind, character and nature whatsoever, including, but not limited to, losses, claims, damages, liabilities or expenses (including reasonable fees for attorneys, accountants, consultants and other experts) (collectively referred to hereinafter in this Section 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. 14 IN WITNESS WHEREOF, the Board has executed this Agreement by its duly authorized officers and the Borrower has caused this Agreement to be executed in its name by its duly authorized officers. All of the above occurred as of the date first above written. WITNESS OR ATTEST: By Theresa White Its City Clerk BOARD OF INVESTMENTS OF THE STATE OF MONTANA By Juli lynn Its Bond Program Officer CITY OF KALISPELL By Doug Russell Its Cijy Manager [E COPYLoan #2475 PROMISSORY NOTE FOR VALUE RECEIVED, the City of Kalispell, a political subdivision organized under the laws of the state of Montana (the "Borrower"), hereby promises to pay to the order of the Board of Investments of the State of Montana (the "Board") the principal amount of THREE HUNDRED SEVENTY-FIVE THOSUAND AND 00/100 DOLLARS ($375,000.00) or such lesser amount as shall actually be advanced to the Borrower under the Loan Agreement (hereinafter defined) as evidenced by the Amortization Schedule attached hereto and as annually revised by March 15 for every year the loan advance is outstanding, together with interest thereon in the amount calculated as provided in the Loan Agreement, payable semiannually on February 15 and August 15 in the amounts and as provided in the Loan Agreement and as set forth hereto. The maturity date of this loan as evidenced by this Promissory Note is February 15, 2018 or sooner at the option of the Borrower pursuant to the Loan Agreement. This Promissory Note is issued pursuant to the Loan Agreement dated as of February 1, 2013, between the Board and the Borrower (the "Loan Agreement"), and issued in consideration of the loan made thereunder (the "Loan") and in evidence of the obligations of the Borrower set forth in Section 5 thereof. This Promissory Note has been assigned to the Trustee under the Indentures of the Program. Payments hereunder shall be made directly to the Trustee for the account of the Board pursuant to such assignment. Such assignment has been made as security for the payment of the Board of Investments' INTERCAP bonds. All of the terms, conditions and provisions of the Loan Agreement are, by this reference hereto, incorporated herein as a part of this Promissory Note. Pursuant to the Loan Agreement, advances shall be made to the Borrower under the Loan Agreement from time to time upon the terms and conditions set forth in the Loan Agreement. This Promissory Note .is entitled to the benefits and is subject to the conditions of the Loan Agreement. The obligations of the Borrower to make the payments required hereunder shall be absolute and unconditional without any defense or right of setoff, counterclaim or recoupment by reason of any default by the Board under the Loan Agreement or under any other indebtedness or liability at any time owing to the Borrower by the Board or for any other reason. This Promissory Note is subject to optional prepayment under the terms and conditions provided in Article X of the Loan Agreement upon giving 30 days prior written notice to the Board. If an "Event of Default" occurs under Section 12.01 of the Loan Agreement, the principal of this Promissory Note may be declared due and payable in the manner and to the extent provided in Article XII of the Loan Agreement. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Montana to be done, to exist, to happen and to be performed precedent to and in the issuance of this Note, in order to make it a valid and binding obligation of the Borrower according to its terms, have been done, do exist, have happened and have been performed in regular and due form, time and manner as so required; that the Borrower will, as authorized by and according to applicable provisions and limitations of law annually levy sufficient tax receipts or collect sufficient revenues, as the case may be, with other funds available therefor, to pay the principal and interest hereon when due; and that this Note, together with all other indebtedness of the Borrower outstanding on the date of original issue hereof and on the date of its actual issuance and delivery, does not exceed any constitutional or statutory limitation of indebtedness of the Borrower. PROMISSORY NOTE -I IN WITNESS WHEREOF, the City of Kalispell has caused this Promissory Note to be duly executed, attested and delivered, as of this Ist day of February, 2013. CITY OF KALISPELL By Doug Russell Its City Manager (SEAL) ATTEST: By Theresa White Its Citv Clerk Board of Investments of the State of Montana hereby assigns the foregoing Loan Agreement and Promissory Note to U. S. Bank National Association (formerly known as First Trust Company of Montana), as Trustee. BOARD OF INVESTMENTS OF THE STATE OF MONTANA By JerF-1 yLin Its Bond Program Officer PROMISSORY NOTE - 2 MONTANA BOARD OF INVESTMENTS ANNUAL ADJUSTABLE RATE TENDER OPTION MUNICIPAL FINANCE CONSOLIDATION ACT BONDS (INTERCAP REVOLVING PROGRAM) Municipality: City of Kalispell Final Payment: February 15, 2018 Total Commitment: $375,000.00 Total # of Payments: 10 Total Draws to Date: $0.00 Draw Number: 2475 1 This Draw Down: $45,000.00 Date of this Draw: February 1, 2013 Remaining Commitment: $330,000.00 Date of Loan Agreement: February 1, 2013 Project: Purchase Vehicles and equipment Series: 2010 Payment Interest # Days Interest Principal O/S Loan Total Amount Due Rate Due PPq ent Pa ment Balance of Payment 02/1.5/13 08/15/13 02/15/14 08/15/14 02/15/15 68/15/15 02/15/16 08/15/16 02/15/17 08/15/17 02/15/18 COMMENTS: **Beginning Balance** 45,000.00 1.250% 14 21.52 0.00 45,000.00 181 4,398.71 40,601.29 184 4,400.29 36,201.00 181 4,431.74 31,769.26 184 4,455.94 27,313.32 181 4,486.83 22,826.49 . 184 4,512.29 18,314.20 182 4,542.29 13,771.90 184 4,569.59 9,202.31 181 4,599.09 4,603.22 184 4,603.22 0.00 45,000.00 *please see comments Interest payment shown is not due. Your first payment will be on August 15, 2013. Interest payments shown from February 16, 2012 to February 15, 2013 are computed at 1.25%. After February 15, 2013 interest rates will be adjusted to reflect the adjusted interest rate applied on the outstanding principal balance. We will send a revised amortization schedule combining the February 15, 2013 interest at 1.25% and the August 15, 2013 principal & interest at the new adjusted rate. IMPORTANT: If payment is made by check, please send the enclosed amortization schedule(s) with check for proper credit. Please make sure that SpA Lockbox CM9695 is on both the check and envelope. Please mail a copy of the amortization schedule with a check made payable to: U.S. Bank Trust-SpA Lockbox CM9695 ATTN: Operations Center 1200 Energy Park Drive . St. Paul, MN 55108 OR Please wire funds to: U.S. Bank N.A. (Minneapolis) ABA 091000022 FFC: U.S. Bank Trust N.A. Account # 180121167365 Wire Clearing Account # 47300023 ATTN: 503 64256/996103 DKO INTERCAP: City of Kalispell MONTANA BOARD OF INVESTMENTS ANNUAL ADJUSTABLE RATE TENDER OPTION MUNICIPAL FINANCE CONSOLIDATION ACT BONDS (INTERCAP REVOLVING PROGRAM) Municipality: City of Kalispell Final Payment: Total Commitment: $375,000.00 Total # of Payments: Total Draws to Date: $45,000.00 Draw Number: This Draw Down: $20,000.00 Date of this Draw: Remaining Commitment: $310,000.00 Date of Loan Agreement: Project: Purchase Vehicles and equipment Series: Payment Interest # Days Due Rate Due 02/15/13 08/15/13 02/15/14 08/15/14 02/15/15 08/15/15 02/15/16 08/15/16 02/15/17 08/15/17 02/15/18 COMMENTS: 1.250% 14 181 184 181 184 181 184 182 184 181 184 Interest Principal Payment Payment "Beginning Balance* 9.56 0.00 1,954.98 1,955.68 1,969.66 1,980.42 1,994.15 2,005.46 2,018.80 2,030.93 2,044.04 2,045.88 20,000.00 O/S Loan Balance, 20,000.00 20,000.00 18,045.02 16,089.33 14,110.67 12,139.25 10,145.11 8,139.64 6,120.85 4,089.92 2,045.88 0.00 February 15, 2018 10 2475 2 February 1, 2013 February 1, 2013 2007 Total Amount of Payment *please see comments Interest payment shown is not due. Your first payment will be on August 15, 2013. Interest payments shown from February 16, 2012 to February 15, 2013 are computed at 1.25%. After February 15, 2013 interest rates will be adjusted to reflect the adjusted interest rate applied on the outstanding principal balance. We will send a. revised amortization schedule combining the February 15, 2013 interest at 1.25% and the August 15, 2013 principal & interest at the new adjusted rate. IMPORTANT: If payment is made by check, please send the enclosed amortization schedule(s) with check for proper credit. Please make sure that SpA Lockbox CM9695 is on both the check and envelope. Please mail a copy of the amortization schedule with a check made payable to: U.S. Bank Trust-SpA Lockbox CM9695 ATTN: Operations Center 1200 Energy Park Drive St. Paul, MN 55108 OR Please wire funds to: U.S. Bank N.A. (Minneapolis) ABA 091000022 FFC: U.S. Bank Trust N.A. Account# 180121167365 Wire Clearing Account # 47300023 ATTN: 50364256/996103DKO INTERCAP: City of Kalispell %O%JrY SECURITY AGREEMENT This SECURITY AGREEMENT (the "Security Agreement" or "Agreement") is made as of February 1, 2013 by and between the City of Kalispell (the "Borrower"), an Eligible Government Unit, duly organized and validly existing under the laws and Constitution of the state of Montana, and the Board of Investments of the State of Montana (the "Board"). The Borrower enters this agreement in consideration of the loan to it by the Board and for the purpose of securing the Borrower's performance of each and every covenant contained in this agreement and in that certain Loan Agreement dated as of February 1, 2013 by and between the Board and the Borrower (the "Loan Agreement"). All right, title and interest of the Board in this Agreement and the Collateral subject hereto shall be assigned to U. S. Bank National Association (formerly known as First Trust Company of Montana National Association and as the First Trust Company of Montana) (the "Trustee"), as Trustee, under the Indenture of Trust dated March 1, 1991, a First Supplemental Indenture of Trust dated as of March 1, 1992, and a Second Supplemental Indenture of Trust dated as of June 1, 1994 (together the "Indenture") between the Board and the Trustee. Section 1. Grant. The Borrower hereby grants the Board a security interest in all goods, equipment, machinery, inventory, furniture, furnishings, fixtures, and all other tangible personal property of the Borrower described in this Security Agreement, whether currently owned or hereafter acquired, together with all accessories, attachments, and additions thereto and replacements therefor and all rents, income and proceeds therefrom (all such property being herein referred to collectively as the "Collateral"). Section 2. Representations. Borrower represents and warrants that the Collateral, or any part thereof, is not subject to, and shall be kept free from, any security interest, lien or encumbrance other than permitted encumbrances as hereinafter defined in Section 8 hereof ("Permitted Encumbrances"). Section 3. Covenants of the Borrower. For the purpose of protecting and preserving the security of this Security Agreement, the Borrower promises: (a) (i) to care for and keep all of the Collateral in good condition and repair; (ii) not to remove, demolish or substantially alter (except such alterations as may be required by laws, ordinances or regulations) the Collateral; provided, however, that the Borrower may make such proper replacements, repairs, removals and alterations as it .shall in good faith determine to be necessary or advisable to maintain or enhance the efficiency and value of the security created hereby; (iii) to comply with all laws, ordinances, regulations, conditions and restrictions now or hereafter affecting the Collateral or any part thereof; (iv) not to commit or permit any waste and not to permit any deterioration of the Collateral; and (v) not to commit, suffer or permit any act to be done in, upon, or with the Collateral in violation of any law or ordinance if such act might have consequences that would materially and adversely affect the financial condition, assets, properties or operation of the Borrower; (b) to provide and maintain hazard insurance on the Collateral for its full replacement value; to obtain such insurance from a company of the Borrower's choice, subject to the Trustee's and the Board's approval; to name the Trustee and the Board as additional insured parties in such policies; to deliver duplicate originals or certified copies of the policies of said insurance to the Trustee upon its request; SECURITY AGREEMENT - 1 (c) to appear in and defend any action or proceeding affecting or purporting to affect the security of this Security Agreement, and additional or other security for any of the obligations secured hereby, or the interest, rights, powers, or duties of the Trustee of the Board hereunder, it being agreed, however, that in the case of an action or proceeding against the Trustee or the Board said Trustee or Board, at their option, may appear in and defend any such action or proceeding and, in addition, it being agreed that the Trustee may commence any action or proceeding deemed necessary by it to perfect, maintain or protect such interest, rights, powers or duties; all in such manner and to such extent as it may see fit, and the Trustee is authorized to pay, purchase or compromise on behalf of the Borrower any encumbrance or claim which in its judgment appears or purports to affect the security hereof or to be superior hereto; to pay all costs and expenses, including costs of evidence of title and attorney's fees in a reasonable sum, in any above described action or proceeding in which the Board or the Trustee may appear; (d) to pay immediately and without demand all reasonable and necessary sums that the Trustee or the Board expend to enforce the terms of this agreement, including attorneys' fees, with interest from date of expenditure at the rate of twelve percent (12%) per annum; and (e) (i) to inform the Trustee and the Board in writing of the location of such Collateral and of any changes in the Collateral's location, to execute and deliver to the Trustee and the Board such financing statements and other documents in a form satisfactory to the Trustee and the Board, (ii) to do all acts that may be reasonably requested in order to establish and maintain a perfected interest in the Collateral, and (iii) to pay the costs of filing any notices or statements in any public office in which the Trustee deems filing or recording to be necessary or desirable. Section 4. Acceptance Not Waiver. By accepting payment of any sum secured hereby after its due date, neither the Trustee nor the Board shall be deemed to have waived its right either to require prompt payment when due of all other sums so secured or to declare default as herein provided for failure so to pay. Section 5. Amendment, Additional Security. Without affecting the liability of any other person liable for the payment of any obligation herein mentioned, and without affecting the lien or charge of this Security Agreement upon any property not then or theretofore released as security for the full amount of all unpaid obligations, the Trustee may, upon written request by the Board, and without notice to the Borrower, release any person other than the Borrower so liable, extend the maturity or alter any of the terms of any such obligation, or grant other indulgences or releases or cause to be released any portion or all of the Collateral, release any other or additional security for any obligation herein mentioned, to make compositions or other arrangements with debtors in relation thereto; and if .the Trustee at any time holds any additional security for any obligations secured hereby, it may enforce the sale thereof or otherwise realize upon the same at its option, either before or concurrently herewith or after a sale is made hereunder. Section 6. Right of Entry for Inspection. The Trustee and the Board and their employees and agents may inspect the Collateral at any reasonable time or times, regardless of where such Collateral is located. Section 7. Entry, Possession, Operation of Equipment and Other Remedies. If the Borrower fails or refuses to make any payment or to do any act which this agreement obligates it to make or do at the time and in the manner herein provided, then the Trustee and the Board, in their sole discretion, without notice to or demand upon the Borrower and without releasing the Borrower .from any obligation hereof, are each authorized to do any of the following: SECURITY AGREEMENT - 2 (a) make any such payment or do any such act in such manner and to such extent as they may deem necessary to protect the security hereof, or (b) pay, contest or compromise any claim, debt, lien, charge or encumbrance which in the judgment of the Trustee or Board may affect or appear to affect the security of this Security Agreement, the interest of the Board or the rights, powers or duties of the Trustee or the Board hereunder. In addition to any right or remedies it may have hereunder or otherwise, the Trustee or the Board shall have all the rights and remedies of a secured party under the Uniform Commercial Code of Montana, including without limitation, the right to dispose of such Collateral at public or private sale. The Trustee and the Board are not obligated to make any of the payments or to do any of the acts mentioned above, but, upon election so to do, employment of an attorney is authorized and payment of such attorney's fees and of all other necessary expenditures is hereby secured. Section 8. Permitted Encumbrances. There are no Permitted Encumbrances allowed under this Agreement. Section 9. Duration of Securitv Interest. The security interest herein granted shall continue in full force and effect until all indebtedness hereby secured shall have been fully paid and satisfied and all commitments of the Board to extend credit to or for the account of the Borrower have expired. Section 10. Additional Security. The Trustee shall be entitled to enforce payment and performance of any indebtedness or obligations secured hereby and to exercise all rights and powers under this Security Agreement or under any other agreement or any laws now or hereafter in force, notwithstanding that some or all of the indebtedness and obligations secured hereby are now or shall hereafter be otherwise secured, whether by mortgage, deed of trust, security agreement, lien, or otherwise. The obligation to repay the indebtedness secured hereby remains without reference to condition, disposition or location of the Collateral. Neither the Trustee's acceptance of this Security Agreement nor its enforcement, whether by court action or pursuant to the power of sale or other powers her contained, shall prejudice or in any manner affect the Trustee's right to realize upon or enforce any other security now or hereafter held by the Trustee or the Board. Section 11. Successors and Assi ns. This Security Agreement applies to, inures to the benefit of, and binds all parties hereto, the Board and the successors and assigns of any of them. Section 12. Severability If any provision hereof should be held unenforceable or void, in whole or in part, then such unenforceable or void provision or part shall be deemed separable from the remaining provisions and shall in no way affect the validity of the remainder of this Security Agreement. Section 13. Notice of Actions. The Trustee shall be under no obligation to notify any parry hereto of any action or proceeding of any kind in which the Borrower, the Board or the Trustee shall be a party, unless brought by the Trustee, or of any pending sale under any other deed of trust or security agreement. SECURITY AGREEMENT - 3 Section 14. Charge for Provision of Statement. For any statement regarding the obligations secured hereby, a charge, which the Borrower agrees to pay, may be made in an amount not exceeding the maximum allowed by law at the time any such statement is requested. Section 15. Waiver of Statute of Limitations. The right to plead any and all statutes of limitations as a defense to any demand secured by this Security Agreement is hereby waived. Section 16. Substitution of Trustee. The Board may substitute a successor Trustee from time to time by recording at the places required by law an instrument stating the election by the Board to make such substitution and identifying this Security Agreement. Section 17. Choice of Law. The laws of the state of Montana shall govern the construction and interpretation of this agreement. Section 18. Notice. Notices to the Borrower may be mailed to it at: , Attention: , or at such other address as the Borrower may file in writing with the Trustee. Notices to the Trustee hereunder may be mailed to it at: U. S. Bank National Association, Corporate Trust Services PD-WA-T7CT, 1420 Fifth Avenue, 7`f' Floor, Seattle, WA 98101, or at such other address as the Trustee may file in writing with the Borrower. Notices to the .Board may be mailed to the Board of Investments of the State of Montana, P.O. Box 200126, Helena, Montana 59620-0126 IN WITNESS WHEREOF, the Borrower has caused this Security Agreement to be duly executed as of this 1 st day of February, 2013 . CITY OF KALISPELL By Doug Russell Its City Manager (SEAL) ATTEST: By Theresa White Its City Clerk SECURITY AGREEMENT - 4 For value received, the undersigned hereby grants, assigns and transfers to U. S. Bank National Association (formerly known as First Trust Company of Montana National Association and as First Trust Company of Montana), as trustee under the Indenture of Trust dated March 1, 1991, between the undersigned and said trustee for the holders of the Board of Investments of the state of Montana Annual Adjustable Rate Tender Option Municipal Finance Consolidation Act Bonds (INTERCAP Revolving Program), Series 1991, all of its right, title and interest in this Security Agreement and the Collateral subject hereto: Dated: February 1, 2013 BOARD OF INVESTMENTS OF THE STATE OF MONTANA By Ju i Fl yn n Its Bond Program Officer SECURITY AGREEMENT - 5 DESCRIPTION OF COLLATERAL Item Mower and Attachments 2012 KUB F 3680 Mower 2012 KUB RCK 72P-F 36 Mower 2012 KUB GCK 72-F 36 Bagger 2012 KUB B 2765A Snowblade Used half -ton pickup 2008 GMC 1500 E/C 4X4 Stump Grinder and engine Model 2550 Stump Grinder Briggs & Stratton 35 HP Gas Engine Serial and Model Number Amount SN: 17750 $ 20,900.00 SN: 16161 3,300.00 SN: 10649 3,400.00 SN: 21206837 1,400.00 VIN: ZGTEK19TEK19J681198293 .16,000.00 SN: 251077 SN: 00111942 $ 20,000.00 TOTAL $ 65,000.00 SECURITY AGREEMENT-6 rlvly a_.` �y� /JJ—VVLV / aI Yv v. bV v aV i Vl a vL IIVII LLL—I VIL—I V 1 \it/.I 11 ML/. -IULLFREE- FAX:6406) 755-0634 2765 Hwy 2 West (888) 727-7661 Kalispell, MT 59901 www.parsonstractor.com SOLD TO TERMS: NET 10th CITY OF KALISPELL ?ACE BOX 1997 1 KALISPELL MT 59901 CASH CHI. I F.P. UNIT SALES INVOICE i ACCT. NO. 26280 SAIL_SMAN PURCHASE ORDER N0. R.O. NO. P.L. No. INVOICE DATE TIME . INVOICE DH 86602 12/28/2012 16:01, 0 NO. 3286 Unit Sale: 2012 KUB F3680 MOWER stock number: K17750 serial number: 17750 Unit Sale: 2012 KUB RCK72P-F36 MOWER stock number: K16161 serial number: 16161 Unit Sale: 2012 KUB GCK72-F36 BAGGER stock number: K10649 serial number: 10649 Unit Sale: 2012 KUB B2765A SNOWBLADE stock number: K06837 serial number: 21206837 36HP, 4WD, TURF TIRES, CURTIS CAB W/ HEAT, PWR STEERING, FRONT WORKLIGHTS, BEACON, 72" HIPRO SIDE DISCHARGE MOWER, HYDRAULIC LOW DUMP GRASS CATCHER, BLOWER, 60" HD SNOW/UTIL .BLADE W/ HYDRAULIC ANGLE. MUNICIPALITY DISCOUNT PRICING. Received By: X ten} www.parsonstractor.com Sales Tax �/i �vaJ0. 20900.00 Bobcat 3300.00 3400.00 1400.00 $0.00 rnvly �.t"rlvj, JJ-uuLu I I I iVI I Vl IIVII L_LI VIL_IM I %_1 it Vll.-TOLLFREE- FAX:(,06) 755-0634 2765 Hwy 2 West (888) 727-7661 Kalispell, MT 59901 www.parsonstractor.com SOLD TO TERMS: NET 10th FKALISPELL LISPELL PAGE 2 MT59901 cases CHG. P.P. UNIT SALES INVOICE ACCT. NO. 26280 MAN I PURCHASE ORDER ND. DH 186602 INVOICE DATE TIME INVOICE 12/28/2012 1 16:01:10 NO. 3286 Settlements CHARGE 26280 $29000.00 FOR SALES, SERVICE, PARTS AND RENTALS, PARSON TRACTOR IS YOUR ONE STOP EQUIPMENT SHOP. THANK YOU FOR SUPPORTING OUR LOCALLY OWNED AND OPERATED BUSINESS! Received By: X Kli h o fta® PON ITotal Sale $29000.00 Total Settlements 29000.00 LEM/��000 www.parsonstractor.com Bobcat .,s r VEHICLEPURCHASiE:OfibER EXECUTIVE AUTO SALES' INC. 3810 Hwy, 93 South Kalispell, MT 59901 .1; 10, (406) 752-1138 STOC —IT0. DATE PURCHASER'S i % / ` ✓ f ��y. NAMEli STREET CDTDRESS STATE ZIP RES. PHONE BUS. PHONE I hereby order from the dealer subject to all terme, conditions and agreements CASH PRICE OF VEHICLE contained herein, and the ADDITIONAL CONDITIONS printed on the reverse - side together with all attachments herein referred to. YEAR MAKE MODEL TYPE �6 U 8 i �o n 1E COLOR TRIM SERIAL NO. S/ 2 r �C`nyG/ 1 98 -2 91 LIC.NO. TAB NO. TO BE DELIVERED ON OR ABOUT Jam/ 19 The Odometer of the Vehicle described above now r O reads miles/kilometers. L' See attached Odometer mileage statement (Federal regulations require you to state the odometer mileage upon transfer of ownership. An inaccurate or untruthful statement may make you liable for _ damages to your transferee, forattorney fees and for civil or criminal penalties, pursuant to -sections 409, 412 and 413 of the Motor Vehicle Information and Cost Savings Act of 1972 (Pub. L. 95.513, as amended by Pub. L. 94-364.) I The Odometer of the Vehicle described below now CASH PRICE j reads miles/kilometers. TAX See attached Odometer mileage statement LICENSE TRANSFER TITLE REGISTRATION 1. TOTAL CASH PRICE DELIVERED DESCRIPTION OF TRADE-IN YEAR MAKE \ MODEL TYPE I.D. NO. LIC. NO. TAB NO. LIEN HOLDER ADDRESS NET VERIFIED GOOD UNTIL Purchaser assumes responsibility for any difference in payoff in excess of amount shown on this order, and will pay such difference in cash on demand. It not so paid, purchaser authorized dealer, at dealer's option, to repossess the car sold. "DISCLAIMER OF WARRANTY" Purchaser has read attachment hereto "DISCLAIMER OF WARRANTY" and specifically agrees to same DEPOSIT ON ORDER 0 0 2. CASH DUE ON DELIVERY W N P ALLOWANCE AS A TRADE APPRAISED 3' LESS BALANCE OWING M IN E N T 4. TOTAL DOWN PAYMENT (2 + 3) 5. UNPAID BALANCE OF CASH PRICE (1 - 4) If the unpaid balance of cash price stated above Is the proceeds of a time pay ment agreement as noted below, all terms and conditions of that agreement are hereto made as part of and an attachment to this order by this reference. ❑ CHATTEL MORTGAGE TO BE EXECUTED ❑ CONDITIONAL ON OR BEFORE O DELIVERY. REMARKS: Purchaser agrees that (1) this order includes all the terms and conditions on both the face and the reverse side of, together with any attachments herein referred to. (2) This order cancels and supercedes any prior agreement and as of the date herein comprises the complete and exclusive statement of the terms of this agree. ment relating to the subject matters covered hereby. (3) This order shall not become binding until accepted by Dealer or his authorized representative and in the event of a time sale, Dealer shall not be obligated to sell until approval of the terms hereof Is given by a Bank or Financial Institution willing to purchase a time sales agreement between the parties hereto based on such terms. (4) Purchaser by -execution of this order certifies that he or she is of legal age and acknowledges that he or she has read its terms, conditions and attachments and has received a true copy of this order. j; 4k �� ACCEP �P�Ab� TEDaY,'\ SER'S SIGNRE �t v DATE w DEALER OR HIS AUTHORIZED REPRESENTATIVE ORDER FORMS FROM: WSIADA • P.O. Box 69440 • Seattle, WA 98168 (2D6) 431-8111 SHIPPED UPSICOD DAILY • WASHINGTON, OREGON, IDAHO, MONTANA, ALASKA TOLL FREE 1-800-877-DLRS tBandlot INDUSTRIES, INC. 6750 Millbrook Road • Remus, MI 49340 USA TELEPHONE989.561.2270 FAX 989.561.2273 SALES@BANDrrCHiPPERS.COM WWW.BANDITCHIPPERS.COM Bill To Kalispell Parks and Recreation 306 1 st Ave East Kalispell, MT 59903 USA REMIT PAYMENT TO: (VIA REGULAR MAIL) Dept # 77983 Bandit Industries P.O. Box 77000 Detroit, MI 48277-0983 71�0 Invoice No. 484821 Customer No: KALISP : Ship To Kalispell Parks and Recreation 306 1 st Ave East Kalispell, MT 59903 USA �� v Invoice Date Order Date SO Number Ordered By Customer PO Number < 'Payinent Method 12/18/12 11/02/12 353516 Chad Huber signed order Net 30 Days Warehouse Ship Via F.O.B. Salesperson Resale Number MAIN OAK STREET Remus Chad Huber Order Shipped ' Unit Extended Quantity Quantity Tax Item Number/Description Disc% Price Price 1 1 Y MODEL-2550 U ofM: EACH 17.00 20,000.00 16,600.00 Model 2550 hydrostatic self-propelled stump grinder Job# 48821 SIN 251077 1 1 Y 990-RC0738-319 U ofM: EACH 17.00 3,075.00 2,552.25 Briggs & Stratton 35HP gas engine Serial No_ 00111942 I 1 Y 333-32273 Imron Bandit yellow paint 40-1490 17.00 0.00 0.00 l I Y 990-100937 2 wheel drive unit (35" wide steering assembly) 17.00 0.00 0.00 Che o t our demo and used equipment specials at www.band tchip ers.com Remit Via Overnieht Courier/LTS RED: 9000 Haggerty Road relivery Address: Re: Box # 77983 List Price 3,. 00 Dealer Discount - 3,92222.75 Belleville, Michigan 48111-1632 Freight 847.75 Print Date 12/18/12 Total Paid 0.00 Print Time 10:34:35 AM Balance Due 20,000.00 Page No. 1 Due Date . 01/17/1.3 Entered By: Configurator Invoice Total 1 20,000.00 CERTIFICATE OF ORIGIN FOR MACHINERY Bandit IndUstries, Inc. DATE DECEMBER 18, 2012 YEAR 2012 INVOICE # 484821 VEHICLE IDENTIFICATION NUMBER 251077 BODY TYPE SELF PROPELLED ENGINE HP (S.A.E) NO. CYL'S 35 HP 2 G.A.W.R. G.V.W.R. NA NA MAKE MODEL 2550 STUMP GRINDER SHIPPING, WEIGHT 2180# ENGINE SERIES/MODEL BRIGGS & STRATTON 35 HP GAS ENGINE SN 00111942 I, the undersigned authorized representative of the company, firm or corporation named below, hereby certify that the vehicle described above is the property of the said company, firm or corporation and is transferred on the above date and under the Invoice Number indicated to the following distributor or dealer. NAME OF DISTRIBUTOR, DEALER, ETC. KALISPELL PARKS AND RECREATION 306 1 ST AVE EAST KALISPELL, MT 59903 It is further certified that this was the first transfer of such new vehicle in ordinary trade and commerce. BANDIT INDUSTRIES, INC. o /SIGNATURE OF AUTHORIZtJD REPRESENTATIVE (agent) t� 6750 Millbrook Road, Remus, Michigan 49340 ADDRESS DESCRIPTION OF TPPPECT/SYMARY OF DISBURSEMENTS FOR CITY OF KALISPELL Description of Project Purchase Vehicles and equipment Allocated Amount of Loan $375,000.00 I Amount Amount Amount Remaining Draw Description Allocated Date of Remaining Reserved # of Item for Item of Draw Draw for Item Amount Re s e rve d Amount $375,000.00 2475-01 # 1 above $375,000.00 2/1/2013 45,000.00 330,000.00 330,000.00 2475-02 saa 2/1/20131 20,000.00 316,000.00 310,000.00 DESCRIPTION OF PROJECT/SUMMARY OF DISBURSEMENTS - I COPY' BORROWER'S DRAW CERTIFICATE NO. 1 FOR DISBURSEMENT OF FUNDS UNDER THE LOAN AGREEMENT The undersigned, Authorized Representative of the City of Kalispell (the "Borrower") under the Loan Agreement, dated as of February 1, 2013 (the "Loan Agreement"), by and between the Board of Investments of the state of Montana (the "Board"), certify pursuant to Section 4.04, as follows: 1. We have read Section 4.05 of the Loan Agreement and the subsections of Section 4.04 referred to therein and have reviewed appropriate records and documents of the Borrower relating to matters covered by this Certificate. All capitalized terms used in this Certificate shall have the meanings given them in the Loan Agreement unless otherwise defined herein; 2. All terms and conditions of the Loan Agreement to be complied with by the Borrower as of the date hereof have been complied with and satisfied, and all documents described in Section 4 have been delivered; 3. The item number, amount, and nature of each item of Project Costs, as shown on the attached Borrower's Cash Advance Certificate, hereby requested to be reimbursed or paid to the Borrower (a) has been paid or incurred, (b) is an eligible Project Cost, and (c) has not been previously reimbursed or paid by the Program under the Loan Agreement; 4. To our knowledge after reasonable investigation, there has been no default by the Borrower under the Loan Agreement, which has not been cured; and 5. All representations and. warranties made by the Borrower in the Loan Agreement are true and correct on and as of the date of this Borrower's Certificate with the same' effect as if made on such date. You are hereby requested to advance pursuant to Section 4.05 of the Loan Agreement the amount shown on the Borrowers Cash Advance Certificate and make payment to the entitled entity to receipt thereof as shown on said Certificate. WITNESS my hand this 1st day of February, 2013. CITY OF KALISPELL By Doug Russell Its City Manager ATTEST: By Theresa White Its Citv Clerk BORROWER'S DRAW CERTIFICATE - 1 BORROWER'S CASH ADVANCE CERTIFICATE NO. 1 1. Closing Date for Loan: February 1, 2013 2. Cash Amount to be Advanced (wire): $65,000.00 3. The Term Over Which the Loan Advance is to be Amortized: Februrary 1, 2013 through February 15, 2018 (5 years) 4. Items to be Financed (serial number, model): Serial and Item Model Number Amount Mower and Attachments 2012 KUB F 3680 Mower SN: 17750 $ 20,900.00 2012 KUB RCK 72P-F 36 Mower SN: 16161 3,300.00 2012 KUB GCK 72-F 36 Bagger SN: 10649 3,400.00 2012 KUB B 2765A Snowblade SN: 21206837 1,400.00 Used half -ton pickup 2008 GMC 1500 E/C 4X4 VIN: ZGTEKI9TEK19J681198293 16,000.00 Stump Grinder and engine Model 2550 Stump Grinder SN: 251077 Briggs & Stratton 35 HP Gas Engine SN: 00111942 $ 20,000.00 TOTAL $ 65,000.00 SPECIAL INSTRUCTIONS: - wire funds to: Glacier Bank ABA # 292970825 For Cr To City of Kalispell Acct. #10163583 BORROWER'S DRAW CERTIFICATE - 2 PHONE:( 06)755-0628 PARSONS TRACTOR & IMPLEMENT CO., INC.-TOLL FREE- FAX:41�06) 755 0634 2765 Hwy 2 West (888) 727-7661 Kalispell, MT 59901 SOLD TO www.parsonstractor.com TERMS: NET 10th CITY OF KALISPELL PAGE BOX 1997 1 KALISPELL MT 59901 CASH I CHG. I F.P. UNIT SALES INVOICE ACCT. NO. 26280 SALESMAN PURCHASE ORDER NO. R.O. NO. P.L. NO. INVOICE DATE TIME INVOICE DH 186602 12/28/2012 1 16:01:.10 NO. 3286 Unit Sale: 2012 KUB F3680 MOWER stock number: K17750 serial number: 17750 Unit Sale: 2012 KUB RCK72P-F36 MOWER stock number: K16161 serial number: 16161 Unit Sale: 2012 KUB GCK72-F36 BAGGER stock number: K10649 serial number: 10649 Unit Sale: 2012 KUB B2765A SNOWBLADE stock number: K06837 serial number: 21206837 36HP, 4WD, TURF TIRES, CURTIS CAB W/ HEAT, PWR STEERING, FRONT WORKLIGHTS, BEACON, 72" HIPRO SIDE DISCHARGE MOWER, HYDRAULIC LOW DUMP GRASS CATCHER, BLOWER, 60" HD SNOW/UTIL BLADE W/ HYDRAULIC ANGLE. MUNICIPALITY DISCOUNT PRICING. IM3 Received By: X <1J boftao Ty Pvua� Sales Tax pL]G3�OG7� www.parsonstractor.com 20900.00 3300.00 3400.00 1400.00 '` Bobcat $0.00 PHONE.: 4Q6) 755-0628 PARSONS TRACTOR & IMPLEMENT CO., INC. -TOLL FREE- FAX:-,406) 755-0634 2765 Hwy 2 West (888) 727-7661 Kalispell, MT 59901 wurw narsonstractor com SOLD TO CITY OF KALISPELL BOX 1997 KALISPELL MT 59901 TERMS: NET 10th PAGE 2 CHG. F.P. UNIT SALES INVOICE ACCT. NO. 26280 SAI.I,SMAN I PURCHASE ORDER NO. I R.O. NO. I P.L. NO. INVOICE DATE I TIME IINVOICE DH 86602 12/28/2012 16:01:10 INO. 3286 CHARGE 26280 FOR SALES, SERVICE, PARTS AND RENTALS, PARSON TRACTOR IS YOUR ONE STOP EQUIPMENT SHOP. THANK YOU FOR SUPPORTING OUR LOCALLY OWNED AND OPERATED BUSINESS ! Received By: X t<IJhoh. $29000.00 Total Sale $29000.00 Total Settlements 2900000 pLMG3�00€0 www_parsonstractor.com Bobcat n a� VEHICLE PURCHA►SE..O-� bER c,/; A/- i4i -4_.� C-- C . � P� INC.STOCK EXECUTIVE AUTO SALES, C 3810 Hwy. 93 South, Kalispell, MT 59901 iq (406) 752-1 138 90. DATE PURCHASER'S NAME 1 . •� �i s s'� (' �(y K� ASTREET DDRESS CITY ////)) / rSx�� .%PJ1 STATE ice/ ZIP RES. PHONE BUS. PHONE i hereby order from the dealer subject to all terms, conditions and agreements contained herein, and the ADDITIONAL CONDITIONS printed on the reverse.,% side together with all attachments herein referred to. CASH PRICE OF VEHICLE �G �8J s/ e YEAR MAKE MODEL TYPE /C_` COLOR TRIM SERIAL NO. LIC. NO. TAB NO. TO BE DELIVERED ON OR ABOUT i9 The Odorneter of the Vehicle described above now reads miles/kilometers.�°R' See attached Odometer mileage statement (Federal regulations require you to state the odometer mileage upon transfer of :ownership. An inaccurate or untruthful statement may make you liable for damages to your transferee, for attorney fees and for civil or criminal penalties, pursuant to sections 409, 412 and 413 of the Motor Vehicle Information and Cost Savings Act of 1972 (Pub. L. 95-513, as amended by Pub. L. 94-364.) The Odometer of the Vehicle described below now reads miles/kilometers. See attached Odometer mileage statement CASH PRICE TAX LICENSE TRANSFER TITLE REGISTRATION 1. TOTAL CASH PRICE DELIVERED DESCRIPTION OF TRADE-IN YEAR MODEL TYPE I.D. NO. — LIC. NO. TAB NO. LIEN HOLDER iADDRESS NET VERIFIED GOOD UNTIL Purchaser assumes responsibility for any difference in payoff in excess of amount shown on this order, and will pay such difference in cash on demand. If not so paid, purchaser authorized dealer, at dealer's option, to repossess the car sold. "DISCLAIMER OF WARRANTY" Purchaser has read attachment hereto "DISCLAIMER OF WARRANTY" and specifically agrees to same 0 DEPOSIT ON, ORDER O 2. CASH W DUE ON DELIVERY N P ALLOWANCE AS A TRADE APPRAISED M 3' IN LESS BALANCE OWING E N 4. TOTAL DOWN PAYMENT (2 + 3) T 5. UNPAID BALANCE OF CASH PRICE 0-4) If the unpaid balance of cash price stated above Is the proceeds of a time pay. ment agreement as noted below, all terms and conditions of that agreement are hereto made as part of and an attachment to this order by this reference. D CHATTEL MORTGAGE D CONDITIONAL TO BE EXECUTED ON OR BEFORE D DELIVERY. REMARKS: Purchaser agrees that (1) this order includes all the terms and conditions on both the face and the reverse side of, together with any attachments herein referred to. (2) This order cancels and supercedes any prior agreement and as of the date herein comprises the complete and exclusive statement of the terms of this agree- ment relating to the subject matters covered hereby. (3) This order shall not become binding until accepted by Dealer or his authorized representative and in the event of a time sale, Dealer shall not be obligated to sell until approval of the terms hereof Is given by a Bank or Financial Institution willing to purchase a time sales agreement between the parties hereto based on such terms. (4) Purchaser by'execution of this order certifies that he or she Is of legal age and acknowledges that he or she has read its terms, c ndFtions and attachments and has received a true copy of this order. ACCEPTED ARC ASER'S SIGNATURE DATE w DEALER OR HIS AUTHORIZED REPRESENTATIVE ORDER FORMS FROM: WSIADA • P.O. Box 69440 • Seattle, WA 98168 (206) 431-Bt11 SHIPPED UPSICOD DAILY • WASHINGTON, OREGON, IDAHO, MONTANA, ALASKA TOLL FREE 1800-877•DLRS tBandlmt INDUSTRIES, INC. 6750 Millbrook Road a Remus, MI 49340 USA TELEPHONE 989,561.2270 FAX 989.561.2273 SALES@BANDrrGHIPPERS.COM WWW.BANDITCHIPPERS.COM Bill To Kalispell Parks and Recreation 306 1st Ave East Kalispell, MT 59903 USA REMIT PAYMENT TO: (VIA REGULAR MAIL) Dept # 77983 Bandit Industries P.O. Box 77000 Detroit, MI 48277-0983 --71qb Invoice Invoice No. 484821 Customer —No. KALISP Ship To Kalispell Parks and Recreation 306 1st Ave East Kalispell, MT 59903 USA 4----7 41 Invoice Date Order Date . SO Number Ordered By Customer PO Number Payment Method 12/18/12 11/02/12 353516 Chad Huber signed order Net 30 Days Warehouse Ship Via F.O.B. Salesperson Resale Number MAIN OAK STREET Remus Chad Huber Order Shipped Unit Extended Quantity Quantity Tax Item Number/ Description Disc%o Price Price 1 1 Y MODEL-2550 U of M: EACH 17.00 ,. 20,000.00 16,600.00 Model 2550 hydrostatic self-propelled stump grinder Job# 48821 SIN 251077 1 1 Y 990-RC0738-319 U ofM: EACH 17.00 3,075.00 2,552.25 Briggs & Stratton 35HP gas engine Serial No. 00111942 1 1 Y 333-32273 Imron Bandit yellow paint 40-1490 17.00 0.00 0.00 1 1 Y 990-100937 2 wheel drive unit (35" wide steering assembly) 17.00 0.00 0.00 Che oi it our demo and used equipment specials at www.band tchipi ers.com �l.`. Remit Via Overnight Courier/UPS RED: 9000 Haggerty Road Delivery Address: Re: Box #. 77983 Belleville, Michigan 48111-1632 Print Date 12/18/12 Total Paid 0.00 Print -Time 10:34:35 AM Balance Due 20,000.00 Page No. 1 Due Date 01/17/13 Entered By: Configurator List Price 23,075.00 Dealer Discount-3,922.75 Freight 847.75 Invoice Total CERTIFICATE OF ORIGIN FOR MACHINERY Bandit 1ndUstries, Inc. DATE DECEMBER 18, 2012 YEAR 2012 VEHICLE IDENTIFICATION NUMBER 251077 BODY TYPE SELF PROPELLED ENGINE HP (S.A.E) NO. CYL'S 35 HP 2 G.A.W.R. G.V.W.R. NA NA INVOICE # 484821 MAKE MODEL 2550 STUMP GRINDER SHIPPING WEIGHT 2180# ENGINE SERIES/MODEL BRIGGS & STRATTON 35 HP GAS ENGINE SN 00111942 IF, the undersigned authorized representative of the company, firm or corporation named below, hereby certify that the vehicle described above is the property of the said company, firm or corporation and is transferred on the above date and under the Invoice Number indicated to the following distributor or dealer. NAME OF DISTRIBUTOR, DEALER, ETC. KALISPELL PARKS AND RECREATION 3061STAVE EAST KALISPELL, MT 59903 It is further certified that this was the first transfer of such new vehicle in ordinary trade and commerce. BANDIT INDUSTRIES, INC. SIGNATURE OF AUTHORIZED REPRESENTATIVE (agent) 6750 Millbrook Road, Remus, Michigan 49340 ADDRESS CERTIFICATE OF APPROPRIATION The undersigned Treasurer hereby certifies with respect to the Loan Agreement (the "Loan Agreement"), dated as of February 1, 2013, by and between the City of Kalispell (the 'Borrower") and the Board of Investments (the "Board") that: 1. The governing body of the Borrower has prepared its budget for fiscal year 2013. 1. The Borrower has included in the budget an amount designated and sufficient to make the Loan Repayments (as defined in the "Loan Agreement") due in fiscal year 2013. Dated this 1 st day of February, 2013. CITY OF KALISPELL By Deb Deist Its Treasurer CERTIFICATE OF APPROPRIATION - I