Document Missoula_doc_9c251a27f6

1 Missoula Brownfields Cleanup Revolving Loan Fund Amended and Restated Loan Agreement THIS AGREEMENT was originally entered into August 10, 2006 (the “Original Agreement”), between MILLSITE REVITALIZATION PROJECT LLC, a Montana Limited Liability Company having its principal office at 2800 South Reserve Street, Missoula County, Missoula, Montana and the MISSOULA REDEVELOPMENT AGENCY (“MRA”) acting on behalf of the CITY OF MISSOULA, a municipal corporation and political subdivision of the State of Montana (the “City”), (collectively, the “BORROWERS”), and the MISSOULA AREA ECONOMIC DEVELOPMENT CORPORATION, 1121 East Broadway, Missoula County, Missoula, Montana, (the “LENDER”) (collectively, the “Parties”). This Amended and Restated Loan Agreement has been revised pursuant to a First Amendment to Loan Agreement dated as of January 25, 2007, a Second Amendment to the Loan Agreement dated as of August 20, 2007, and a Third Amendment to the Loan Agreement dated as of December 22, 2008. This Amended and Restated Loan Agreement shall be dated as of December 14, 2009 and incorporates all amendments to the Original Agreement through December 14, 2009. WITNESSETH: WHEREAS, the City of Missoula (the “City”) is the recipient of Missoula Brownfields Cleanup Revolving Loan Funds from the U.S. Environmental Protection Agency (“EPA”) and is authorized to make certain loans from these funds (“the Revolving Loan Fund Program”); and WHEREAS, the City has created the Missoula Brownfields Cleanup Revolving Loan Fund Committee (the “COMMITTEE”) to assist with the implementation and oversight of cleanup projects receiving assistance from the and WHEREAS, the Committee will designate a Qualified Environmental Project Manager who at the expense of shall review, approve and inspect work performed using (the “COMMITTEE’S QEP”). WHEREAS, the City has selected the Missoula Area Economic Development Corporation (“MAEDC”) to be the fund manager for the Revolving Loan Fund Program; and WHEREAS, these funds are to be used to undertake cleanup of brownfields sites by making loans to parties willing to undertake said cleanup of these sites; and WHEREAS, the City Council (the “Council”) of the City, pursuant to Ordinance No. 2803 (the “Ordinance”) adopted on December 16, 1991, created its Urban Renewal District II (the “District”) and adopted an urban renewal plan for the District which Plan has been amended by Resolution No. 6533 and Ordinance No. 3215 adopted on July 22, 2002, (the “Urban Renewal District II Plan” or the “Plan”). The Plan, as adopted, contains a tax increment financing provision all as set forth in the Ordinance in accordance with Montana Code Annotated (MCA), Title 7, Chapter 15, Parts 42 and 43, as amended (“the Act”); and ---PAGE BREAK--- 2 WHEREAS, pursuant to Resolution No. 5210, adopted by the Council on September 16, 1991, the Council determined that the property described therein and commonly known as the Champion Mill Site Property, which is more fully described on Exhibit hereto (the “Mill Site Property” or “the Property”) was blighted within the meaning of Title 7, Chapter 15, Parts 42 and 43, MCA; and WHEREAS, Resolution No. 5210 further provided that should the Mill Site Property be annexed into the City, it would be annexed to and included in the District; and WHEREAS, the MRA has determined that the Mill Site Property has experienced continued deterioration due to neglect and vandalism since the Council declared that it was blighted through the adoption of Resolution No. 5210 on December 16, 1991 and that it continues to meet the definition of blight within the meaning of Title 7, Chapter 15, Parts 42 and 43, MCA; and WHEREAS, upon receipt of a petition signed by all persons with a property right interest in the Mill Site Property and pursuant to Resolution No. 6972, the City has annexed the Mill Site Property to the City and it is now part of the District; and WHEREAS, MRP has secured options to purchase title and fee interests in the Mill Site Property (the “Option to Purchase the Mill Site Property”) and an option to purchase the Leasehold interest in the Mill Site Property (the “Leasehold Option”), as more fully described on Exhibit hereto, in order to redevelop it; and WHEREAS, MRP has presented to the MRA and the City a proposal for the rehabilitation and development of the Mill Site Property; and WHEREAS, the City and the MRA have received a copy of the Voluntary Clean Up Plan for the Mill Site Property prepared by Maxim Technologies, and later GeoMatrix on behalf of MRP; and WHEREAS, MRP now estimates the cost of environmental remediation of the Mill Site Property at more than $1,000,000 (the “Remediation Activities”) and the cost of the demolition and removal work that needs to be undertaken at the Mill Site Property to be more than $1,000,000 (the "Demolition Activities"); and WHEREAS, the MRA has determined that the Remediation and Demolition Activities (collectively “the Activities”) are eligible activities for tax increment financing under Section 7- 15-4288, MCA; that the Activities are consistent with the Plan; that the Activities are beneficial to the District and the City; and has recommended that the Council approve the Remediation and Demolition Activities as an Urban Renewal Project and authorize the use of tax increment financing to pay or secure the costs of the Activities; and WHEREAS, the MAEDC has determined that the Remediation Activities may be funded from a Loan from the Revolving Loan Fund Program, the effective commitment date for which is August 18, 2005, which was ratified and confirmed by the COMMITTEE on February 10, 2006, ---PAGE BREAK--- 3 to fund a Loan in the principal amount of One Million Dollars ($1,000,000), subject to the satisfaction of certain terms and conditions; and WHEREAS, the MRA has entered into an agreement with MRP pursuant to which MRP will undertake the Remediation and Demolition Activities with the assistance to be provided by the City, the MRA, and the Revolving Loan Fund Loan and will work with the MRA to prepare and submit to the City for its review and approval redevelopment plans for the Mill Site Property consistent with all City requirements and procedures; and WHEREAS, on September 12, 2005, the Council adopted Resolution No. 6971, a Resolution of Intention to Approve the Environmental Remediation and Demolition Activities at the Champion Mill Site as an Urban Renewal Project for Urban Renewal District II; To Set Forth the Council’s Intention to Finance a Portion of the Project through the Issuance of Tax Increment Urban Renewal Bonds Payable from the Urban Renewal District II; To Approve the Security for the Revolving Fund Loan; And Calling a Public Hearing on the Proposed Project; and WHEREAS, pursuant to Resolution No. 6971, a public hearing was duly noticed and held on October 3, 2005, at which all persons wishing to speak were given the opportunity to address the Council with respect to the Plan and the Project; and WHEREAS, pursuant to Resolution No. 6978, adopted on October 3, 2005, the Activities were approved as an Urban Renewal Project for Urban Renewal District II; and WHEREAS, the Property is not listed or proposed for listing on EPA’s National Priorities List; and WHEREAS, neither BORROWER is a generator or transporter of the contamination at the site; and WHEREAS, neither BORROWER is or has been subject to any penalties resulting from environmental non-compliance at or on the Property, nor are the BORROWERS or their project contractors or subcontractors currently suspended, debarred, or otherwise declared ineligible for participation in this federal program or from the receipt of these funds; and WHEREAS, the City has agreed to pledge to the repayment of the Loan the tax increment revenues derived from the Property; and WHEREAS, the City had previously agreed to finance the costs of the Demolition Activities and costs of Remediation Activities in excess of this Loan up to $1,000,000 through the issuance of tax increment revenue bonds payable from the tax increment of Urban Renewal District II; and WHEREAS, MRP has requested that the City, rather than issue the $1,000,000 of Additional Bonds for Demolition Activities on the Property, issue Additional Bonds that would pay a portion of the costs of the acquisition of the leasehold interest in the Property (the “Leasehold”); and ---PAGE BREAK--- 4 WHEREAS it is currently anticipated that the City will not issue Urban Renewal District II tax increment bonds for that purpose, but instead may issue Urban Renewal District II tax increment bonds to pay a portion of the costs required to exercise the Leasehold Option; and WHEREAS, the MRA has determined that it is in the best interests of the City and the District and will recommend to the City Council that Urban Renewal District II tax increment bonds payable from the tax increment derived in Urban Renewal District II, excluding the Property, and the property known as the Intermountain Property and the Safeway Property (the “Excluded Property”) be issued to pay the costs of the acquisition of the Leasehold Option (the “Additional Bonds (Leasehold)”); and WHEREAS, the MRP has agreed that it will pay the principal of and interest on its share of the Leasehold Bonds which will be determined by the MRP and the MRA (the “MRP Portion of the Additional Bonds (Leasehold)”); and WHEREAS, MRP intends to acquire the Property after disposal and/or placement of hazardous substances and has not caused, contributed to, permitted, or exacerbated the release of additional hazardous substances on, or emanating from said Property; and WHEREAS, the purpose of MRP in acquiring the Property is to develop the site and make available for sale and development approximately forty-five (45) acres of land for mixed-use development, consisting of at least 350 residential units, office and retail space, and approximately 14 acres of parkland and trail systems (the “Development Project”); and WHEREAS, the BORROWERS agree and acknowledge that the master plan for the Development Project will include approximately fourteen (14) acres of park land, a minimum of ten (10) acres of which will be publicly owned, will be located on the north side of the Property, adjacent to the Clark Fork River, and will provide for the continuation of the Ron MacDonald Riverfront Trail. A portion of the approximately fourteen (14) acres of park land will be dedicated pursuant to state law, and the remainder will be acquired and conveyed subject to the terms and conditions of a subsequent agreement between the City, MRA, and MRP. WHEREAS, the City Council on April 3, 2006 adopted Resolution No. 7047, Resolution Relating to Urban Renewal District II; Authorizing the Issuance of a Tax Increment Urban Renewal Revenue Note, Series 2006 (Urban Renewal District II – Mill Site Project) as Security for a Loan Made Under the RLF Loan Agreement (the “Original Resolution”); and WHEREAS, pursuant to Resolution No. 7080, adopted by the City Council on June 12, 2006 (the “First Amended and Restated Resolution”), the City approved an amendment to the Original Resolution and revisions to the terms of the RLF Loan Agreement to conform to the First Amendment to the RLF Loan Agreement; and WHEREAS, pursuant to Resolution No. 7275, adopted by the City Council on August 27, 2007, the City approved the Second Amended and Restated Resolution Relating to Urban Renewal District II; Authorizing the Issuance of a Tax Increment Urban Renewal Revenue Note in the amount of $1,125,000, Series 2006 (Urban Renewal District II - Mill Site Project), As Security ---PAGE BREAK--- 5 For a Loan Made Under the RLF Loan Agreement to conform to the Second Amendment of the RLF Loan Agreement; and WHEREAS, pursuant to Resolution No. 7275, the City delivered an Amended and Restated Note; and WHEREAS, pursuant to Resolution No. 7385, adopted by the City Council on December 22, 2008, the City approved the Third Amended and Restated Resolution Relating to Urban Renewal District II; Authorizing the Issuance of a Tax Increment Urban Renewal Revenue Note, Series 2006 (Urban Renewal District II - Mill Site Project), As Security For a Loan Made Under the RLF Loan Agreement to conform to the Third Amendment to the RLF Loan Agreement; and WHEREAS, pursuant to Resolution No. 7385, the City delivered a Second Amended and Restated Note; and WHEREAS, pursuant to Resolution No. adopted by the City Council on 2009, the City approved the Fourth Amended and Restated Resolution Relating to Urban Renewal District II; Authorizing the Issuance of a Third Restated Tax Increment Urban Renewal Revenue Note, Series 2006 (Urban Renewal District II - Mill Site Project), As Security For a Loan Made Under the RLF Loan Agreement, Approving Additional Amendments to the RLF Loan Agreement and Approving an Amended and Restated RLF Loan Agreement (the “Fourth Amended and Restated Resolution”); and WHEREAS, $400,000 of additional Brownfield loan funds have become available to the Lender; and the MRP, the Lender, and the MRA desire to make such amounts available to the MRP for the Project; and WHEREAS, it is necessary and desirable that this RLF Loan Agreement be amended and restated to incorporate all previous amendments. NOW, THEREFORE, in consideration of the covenants and promises contained herein, it is mutually agreed by and among the Parties as follows: 1. PURPOSE AND AMOUNT OF LOAN. LENDER agrees to lend to BORROWERS, and the BORROWERS hereby agree to borrow from LENDER the principal sum not to exceed One Million Five Hundred Twenty-Five Thousand Dollars ($1,525,000.00), hereinafter called “the Loan,” for the purpose of performing an environmental cleanup of the Property in accordance with one or more Voluntary Cleanup Plans (“VCP”) that MRP has submitted or will submit to the Montana Department of Environmental Quality (“MDEQ”) and/or an order entered into with MDEQ relating to manganese in groundwater (“Cleanup Order”). Collectively, the VCP and the Cleanup Order constitute the "Remediation Project”. ---PAGE BREAK--- 6 2. SOURCES OF PAYMENT OF LOAN, INTEREST RATE, AND PAYMENT DATES. a. The City agrees to repay the Note only from the following sources and at the following times: i. Annual tax increment derived from the increment of the Mill Site Property, if the Development Project does not proceed to fruition or Bonds are not issued for the Mill Site Project. Interest only payments at the rate of one and one- half percent shall be made on January 1, 2008 and July 1, 2008 and on each January 1 and July 1 thereafter until the earlier of the date by which the Parties have determined that the Development Project will not proceed, or the expiration or termination of the Option to Purchase the Mill Site Property, whichever occurs first (the “End Date”). Increment remaining after the payment of interest shall be used to reduce the principal amount of the Loan to the extent available. Amortized payments of principal and interest will commence January 1 of the first January occurring after the End Date. ii. If Tax Increment Bonds are issued by the City to finance the Mill Site Development Project (including costs of the Remediation Project) payable from the increment revenues derived from the Mill Site Project and such additional security provided by MRP as may be required (the “Mill Site Project Bonds”) if the Development Project proceeds to fruition, $200,000 of the proceeds thereof will be applied to the repayment of principal of the Loan. If the Mill Site Project Bonds are issued, the principal of $200,000, plus any accrued and unpaid interest on the Note shall be payable on the day of closing of the Bonds. Interest only on the remaining principal amount of the Note shall be paid on each January 1 and July 1 (the “Payment Date”) commencing on the First Payment Date after the closing on the Bonds and through the sixteenth anniversary of the Note. The remaining principal of and interest on the Note shall be payable in equal semiannual installments commencing January 1 of the year first occurring after the sixteenth anniversary of the Note (the “Beginning Amortization Date”) in the amount necessary to assure that the principal of and interest on the Note is paid no later than the 25th year of the Note. The payment of the principal and interest on the Note from the Beginning Amortization Date shall be payable on a parity with payment of the principal and interest of the Bonds. The final payment will be in such lesser or greater amount as is necessary to pay the balance of principal and interest then remaining due. Such installment payments shall be made to the registered holder of the Note on each payment date, at its address as it appears on the Note Register on the date such principal and interest are payable, or as otherwise provided in Section 2.02, in lawful money of the United States of America. iii. It is anticipated that MRP will request the City to issue a series of the Mill Site Project Bonds in an amount not to exceed $1,000,000 for the purpose of ---PAGE BREAK--- 7 reimbursing MRP for Eligible Project Costs as approved by the City (the “Reimbursement Bonds”) on the condition that MRP continue with the Remediation and Demolition Activities in advance of satisfying all of the conditions for the Mill Site Project Bonds as set forth in a Development Agreement between the City and MRP. The Loan prepayment of $200,000 of principal and accrued interest thereon referenced in subsection ii of this Section 2(a) shall not be required upon the issuance of the Reimbursement Bonds, but shall be repaid from the proceeds of any Mill Site Project Bonds issued thereafter in accordance with the provisions of subsection ii of this Section 2(a). b. The City’s obligation to repay the Loan and the terms and conditions thereof shall be set forth in the Fourth Amended and Restated Resolution, which is attached hereto as Exhibit and incorporated by reference. c. The Loan to be made hereunder shall be evidenced by a note executed by the City (the “City Note”) substantively in the form attached to the Note Resolution as Exhibit B thereto. 3. ALTERNATIVE SOURCE OF PAYMENT, INTEREST RATE, AND PAYMENT DATES. a. If MRP and the City determine that it is in their respective best interests and the interests of the District that MRP assume full liability for the Loan, and upon consent of the LENDER, MRP shall repay the loan as follows: The Loan will bear interest at the rate of one and one-half per cent per annum on the principal received from the date received. Payment to be made in installments as follows: interest-only payments beginning thirty days after the date of closing on purchase of the Property and continuing for the following twenty-four months, with amortized payments of principal and interest, based on an amortization period of twenty years, commencing on the twenty-fifth payment date. Payments shall be applied first to interest at the rate specified on the unpaid principal amount of this Loan, accrued to date of receipt of said payment, and the balance of each payment, if any, shall be applied on account of principal. If payment is not received within ten days of the due date, a late fee of two per cent (2 of the payment due, or Fifty Dollars ($50.00), whichever is greater, shall be imposed. Following the completion of the interest-only period, the term of the Loan shall be two hundred forty (240) months. MRP shall pay the Loan in equal installments of principal and interest, with the entire balance due on the date of the two hundred fortieth (240th) payment. The loan may be repaid in full or in part without penalty at any time during the term. Full repayment will include all outstanding principal and interest accrued since the date of last ---PAGE BREAK--- 8 payment. Partial payments will consist first of accrued interest, with the balance applied to the outstanding principal. b. MRP shall execute and deliver to the LENDER a note in substantially the form of Exhibit (the “MRP Note”). Upon execution and delivery of the MRP Note, the LENDER shall deliver the City Note to the MRA marked “satisfied.” 4. APPLICATION OF PAYMENTS. All payments shall be applied first to the payment of interest accrued to the date of receipt thereof, and the balance, if any, to the reduction of principal and any balance thereafter, to the late fee. 5. RIGHTS AND OBLIGATION. LENDER and BORROWERS hereby expressly reserve the right to amend any provision of this Agreement upon mutual agreement, to consent to or waive any departure from the provisions of this Agreement, to amend upon mutual agreement, to consent to or waive departure from the provisions of the Notes, and to release or revise any collateral security for payment of the Note, as provided in Paragraph 8 herein. 6. APPLICATION OF PROCEEDS. BORROWERS agree that they will apply the funds received by them under this Agreement in accordance with the use of Loan proceeds specified in the Loan request as approved by the LENDER and described herein. 7. DISBURSEMENT OF LOAN. Loan proceeds will be disbursed as reimbursement for Remediation Project costs, as determined by LENDER (“Eligible Project Costs”). MRP may submit requests for reimbursement as needed, but no more frequently than once every month, which requests shall be paid within ten (10) days after submittal to LENDER. Attached hereto as Exhibit is the project budget (“Project Budget”). By execution of this Agreement, the Parties approve the Project Budget as Eligible Project Costs. The COMMITTEE’S QEP shall approve the Project Budget as Eligible Project Costs and deliver his written approval to LENDER. The Project Budget may be amended as agreed by the Parties and as approved by the COMMITTEE’S QEP. Any requests for reimbursement that are for amounts specified on the Project Budget attached as Exhibit or as later amended shall be approved by LENDER as submitted. After exhaustion of the entire Project Budget, after application of any remaining contingency amounts, MRP shall pay Eligible Project Costs that exceed the Project Budget up to a total of Two Hundred Thousand Dollars ($200,000) (the “Project Budget Commitment”). MRP shall deduct Eligible Project Costs from the Project Budget Commitment only after MRP’S submittal of requests for approval of such payment by the ---PAGE BREAK--- 9 COMMITTEE and the COMMITTEE’S QEP, which shall be made within 10 days after submittal. The LENDER will consider requests from MRP for reimbursement of Eligible Project Costs only if incurred after August 18, 2005 . The Parties recognize that MDEQ has not yet approved the Remediation Project, but that there is work to be done at the Property that will comply with the VCP and/or the Cleanup Order when approved (“Interim Work”). MRP may request reimbursement of Eligible Project Costs for Interim Work if MRP submits a letter from MDEQ recommending that the Interim Work be done, indicating that such Interim Work is or should be part of the VCP or the Cleanup Order or is needed by MDEQ. Such requests for reimbursement of Eligible Project Costs for Interim Work shall be handled using the procedure set forth in the first paragraph of this Section. 8. SECURITY. a. Prior to Closing, if the City executes the Note, the City will deliver to the Lender a resolution approved by the City Council at a regularly called meeting authorizing the issuance of the City Note pledging the tax increment generated by the Remediation and Demolition Activities on the Mill Site Project. b. The City shall agree in the Resolution to issue Mill Site Project Bonds in proceeds in an amount sufficient to repay the principal of and interest on the Loan, if MRP exercises its options to purchase the interests in the Property and determines to proceed with the Mill Site Development Project. c. If the Parties determine that a Note should be executed and delivered by MRP, and MRP has closed on the Property, MRP shall execute and deliver to LENDER a Deed of Trust or Trust Indenture (“Trust Indenture”) on the Property, as further security for the payment of the principal of the Note, the interest thereon, and any other sums payable by MRP hereunder. Said Trust Indenture shall be in form and substance similar to that included in Exhibit LENDER shall cause the Trust Indenture to be recorded at the expense of MRP. In the event additional financing is needed by the MRP, LENDER agrees to subordinate its lien to allow MRP to obtain financing necessary for redevelopment of the Property. LENDER agrees that it shall re-convey or release partially the Trust Indenture applicable to the minimum of ten acres of the Property that MRP expects to convey to the City pursuant to the terms of a subsequent agreement between the City, MRA and MRP. LENDER shall deliver such release for use at the closing of the conveyance of the applicable portion of the Property to the City. Upon arrangements mutually satisfactory to LENDER and MRP, LENDER agrees to re- convey or release partially the Trust Indenture in order that MRP may sell other portions of the Property free and clear of the LENDER’S lien. LENDER shall not unreasonably withhold its consent to such re-conveyance or partial release of the Trust Indenture. ---PAGE BREAK--- 10 d. The form of the City Note and Note Resolution is acceptable to the LENDER. e. The MRP Note, the Trust Indenture, and any other Loan documents required by the Loan Agreement (the “Project Documents”), shall be in substantially the form attached hereto as Exhibits and f. After MRP acquires the Leasehold and/or owns the Property, MRP shall, on demand, submit to LENDER annually paid real estate tax receipts showing that current taxes have been paid. g. LENDER shall, until the Loan has been fully repaid with interest, have the right at all reasonable hours to inspect and audit all relevant books, records, contractual documents, and all other papers relating to the business of BORROWERS provided LENDER agreed to keep MRP’s records confidential; and LENDER shall be given free access to the Property for the purpose of such inspection or environmental audit and also for the purpose of determining the condition of the security subject to MRP’s Access Agreement with Idaho Timber and without unreasonably interfering with operations at the Property. 9. REPRESENTATIONS OF BORROWERS. In order to induce the LENDER to make the Loan hereunder, BORROWERS represent and warrant: a. The City is a duly organized and existing municipal public body corporate of the State of Montana and has taken all actions as may be required to make this Agreement, the Note Resolution and the City Note valid and binding obligations of the City enforceable with their terms. b. MRP is a duly organized and validly existing limited liability company under the laws of Montana and has taken all actions as may be required to make this Agreement a valid and binding obligation of MRP, and has the authority to execute the MRP Note and the Trust Indenture as may be required herein. c. MRP’s financial statements provided to the LENDER and relied on by the LENDER in making this Loan are true, accurate and correct, and do not omit any relevant or pertinent information regarding the financial condition of the BORROWERS. d. MRP agrees to make a good faith effort to close on the purchase of the Property and to undertake the Development Project. e. Through the Project Budget Commitment, MRP agrees to pay up to Two Hundred Thousand Dollars ($200,000) toward the Eligible Project Costs of the Remediation Project in the event that the actual costs exceed the One Million Dollars ($1,000,000) available from the proceeds of the Loan. ---PAGE BREAK--- 11 f. MRP agrees to use it best efforts to obtain consent from the owner of the fee interest in the Mill Site Property that the Mill Site Property remain in the City upon commencement of the Remediation Project and the exercise of the Leasehold Option. g. Neither BORROWER is a party to any action, suit or proceeding pending, or, to the knowledge of either BORROWER, threatened at law or in equity before any Court or administrative officer or agency which brings into question the validity of the transaction herein contemplated or might result in any adverse change in the business or financial condition of either BORROWER. h. Neither BORROWER is in default of any obligations, covenants, or conditions contained in any bond, debenture, note, or other evidence of indebtedness or any mortgages, deeds of trust or collateral instruments securing the same. The making of this agreement and the consummation of the transaction contemplated herein will not violate any provision of law or result in a breach or constitute a default under any agreement to which either BORROWER is a party or result in a creation of any lien, charge or encumbrance upon any of its property or its assets. i. MRP has filed all tax returns which are required to be filed and has paid or made provision for the payment of all taxes which have or may become due pursuant to said returns or pursuant to any assessments received by them, including any payroll taxes owed to Federal or State agencies. No tax liability has been asserted by the Internal Revenue Service or other taxing agency, federal, state or foreign, for taxes materially in excess of those already provided for and MRP knows of no basis for any such deficiency assessment. j. MRP hereby indemnifies and holds the City, the MRA and the LENDER harmless against any losses, claims, damages or liabilities to which it may be subject as a result of any claim for services in the nature of a finder's fee or commission with respect to the transaction contemplated hereunder or arising out of any such claim and will reimburse LENDER or the City for any legal or other expenses incurred by it in investigating or defending any such claim or liability asserted therefor. k. The BORROWERS agree to use all of the proceeds of this Loan for the purposes stated in Section 1 hereof. 10. REPRESENTATIONS AND ACKNOWLEDGEMENTS OF LENDER. a. The LENDER hereby acknowledges and understands that MRP will be responsible for performing the duties and responsibilities identified in Section 11 on behalf of the BORROWERS. b. The LENDER acknowledges that the City’s obligation to repay this Loan as evidenced by the Note is a limited obligation of the City, payable solely from the ---PAGE BREAK--- 12 tax revenue to be received by the City from the incremental taxable value of the Property as a result of the Remediation Project or from the proceeds of tax increment bonds payable from the tax increment to be received by the City from the incremental taxable value of the Property as a result of the Mill Site Development Project being undertaken by MRP. The LENDER acknowledges that the City has made no representations as to whether the Development Project will be undertaken and completed or that the City will be able to issue tax increment bonds in the amount necessary to include the financing of all of the costs of the Development Project that MRP has requested. The LENDER acknowledges that the City's ability to issue tax increment bonds payable from the Development Project is dependent on MRP being able to provide adequate assurance and reasonable credit enhancement sufficient for such bonds to be marketable. The City represents that if such bonds are issued, the repayment of the Loan from the proceeds thereof will be the first priority, unless the Parties hereto agree otherwise and MRP executes a Note securing the loan. c. The LENDER acknowledges that if MRP does not undertake the Development Project or execute a Note, the only source of repayment of the loan will be the actual tax increment revenues received from the Mill Site Property. d. The LENDER acknowledges that the City has made no representations or guarantees that the tax increment revenues that may be derived from the Remediation Project will be sufficient to repay the Loan. e. The LENDER acknowledges and agrees that any tax increment revenue received by the City from the Mill Site Property in excess of the amount required to pay the annual debt service on the RLF Loan amortized at 1.5% over 25 years, as shown on Exhibit attached hereto (the “Excess Tax Increment”) may be used on an annual basis to pay annual debt service on the MRP Portion of the Additional Bonds (Leasehold). f. The LENDER agrees that it will not assign or otherwise transfer an interest in the Loan or the Trust Indenture to any third party other than the City without the prior written consent of the BORROWERS. 11. CONDITIONS OF LOAN. a. MRP on behalf of the BORROWERS will carry out the Remediation Project in accordance with the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) § 104(k); Uniform Administrative Requirements for Grants and Cooperative Agreements to States and Local Governments (40 CFR Part 31); and all other applicable provisions of federal, state or local law. b. MRP on behalf of the BORROWERS will carry out the Remediation Project in accordance with the Davis-Bacon Act of 1931 (40 U.S.C. 276a-276a-5 and 42 U.S.C. § 3222). CERCLA compliance with Davis-Bacon Act requires payment ---PAGE BREAK--- 13 of Federal prevailing wage rates for construction, repair or alteration work funded in whole or in part with Loan proceeds. MRP on behalf of BORROWERS shall obtain recent and applicable wage rates from the U.S. Department of Labor and incorporate them into the construction contract. MRP will meet all requirements of the Davis-Bacon Act, Contract Work Hours and Safety Standards Act and Anti-Kickback Act, as described in Exhibit to this Agreement. The BORROWERS shall also meet all common requirements for Department of Commerce grants and loan as set forth in 15 CFR § 24.36 and listed in Exhibit to this Agreement that are applicable to the BORROWERS. c. MRP on behalf of the BORROWERS shall comply with Executive Order 11246, Equal Employment Opportunity, and implement regulations at 41 CFR 60-4 relating to Federally-assisted construction contracts. d. MRP on behalf of the BORROWERS shall enter the site into the State voluntary cleanup program administered by the MDEQ and receive all State approvals required by that program and submit copies of the State approvals to the LENDER and EPA. e. MRP shall provide the LENDER with a copy of a Phase I and Phase II Environmental Assessment of the Property performed according to ASTM International standards, and if any portion of the Property will be purchased by MRP or the City after November 1, 2006, MRP will provide the City and the LENDER a certification from MRP’s environmental professional that EPA’s “All Appropriate Inquiry” Final Rule found in 40 CFR 312 has been satisfactorily completed prior to such purchase. The BORROWERS agree that Loan proceeds shall not be used for the payment of any cost or expense related to the Phase I assessment or any Phase II assessment, and that MRP shall be responsible for the payment of all costs and expenses related thereto. MRP on behalf of the BORROWERS shall also provide the LENDER with a copy of the environmental assessment of the Property prepared in accordance with Section 75-10-734(2), MCA, which shall include a description of the physical characteristics and operational history of the facility, the human and environmental exposure to releases of hazardous substances based on the current use of the facility, and readily available information on the environmental and regulatory and compliance history of the facility. f. The COMMITTEE’S QEP will review MRP’S remedial planning, design, engineering documents and cleanup activities as they are on-going to ensure that the cleanup is being performed in accordance with all applicable local, State, and Federal requirements. If MDEQ approves the VCP and/or enters into a Cleanup Order, then compliance with the VCP and any Cleanup Order, as determined by MDEQ, shall be deemed to satisfy all State cleanup requirements. The COMMITTEE shall ensure that the MDEQ-approved cleanup is protective of human health and the environment in accordance with the RLF and Cooperative ---PAGE BREAK--- 14 Agreement between the City and EPA. The QEP shall have reasonable access to the project site during the cleanup project For the purpose of monitoring the cleanup. If the COMMITTEE reasonably determines that it is necessary to modify the project work plan based on public comments or new information, it shall, if requested by BORROWER, submit such request in writing setting forth its request and the basis therefor. If a change in the work plan is necessary based on public comments or new information, the BORROWER will work with the MDEQ to amend the project work plan. g. The COMMITTEE shall prepare and implement a property-specific Community Relations Plan (“CRP”) with the assistance and cooperation of the BORROWERS. The CRP must be approved by EPA and then placed in the loan files maintained by the LENDER. The CRP shall include the following: Copies of notes of interviews conducted with residents and community leaders, local officials, and public interest groups. (ii) Copies of news releases and other information which explains the proposed project to be disseminated throughout the area surrounding the affected area. (iii) Procedures for the establishment of a local information repository at or near the potential site that includes public information supplied by both the COMMITTEE and the BORROWERS related to the Remediation Project. Upon request, the BORROWERS shall supply the COMMITTEE with any additional information that would assist the COMMITTEE in documenting the Remediation Project, provided such additional information reasonably relates to the Remediation Project and is in the possession or control of BORROWERS. h. After the COMMITTEE has prepared the CRP, the MRP shall draft an ”analysis of Brownfields cleanup alternatives” document that contains information about the site and contamination issues exposure pathways, identification of contaminant sources, etc.); cleanup standards; applicable laws; alternatives considered; and the proposed cleanup. The evaluation of alternatives shall include effectiveness, implementability, and the cost of the cleanup proposed. A VCP submitted to MDEQ in accordance with Section 75-10-734, MCA, and determined to be complete by MDEQ in accordance with Section 75-10-736(1), MCA, shall satisfy the requirements of this paragraph so long as MRP includes the cost of the cleanup proposed in the VCP submitted to MDEQ. Any feasibility study or similar assessment of alternatives to remediation of manganese in groundwater which is submitted to MDEQ in connection with a Cleanup Order also satisfies the requirements of this paragraph if it is approved by MDEQ. i. MRP on behalf of the BORROWERS shall make the draft analysis of Brownfields cleanup alternatives document available for review and public ---PAGE BREAK--- 15 comment for a period of not less than thirty (30) days from the date of publication of a public notice, which announces the availability of the document for public review. With respect to a VCP, compliance with the public participation requirements of Section 75-10-735, MCA, shall satisfy the requirements of this paragraph. With respect to a Cleanup Order, the public participation requirements of such order shall satisfy the requirements of this paragraph. j. MRP on behalf of the BORROWERS shall also submit copies of the draft analysis of Brownfields cleanup alternatives to the COMMITTEE’S QEP, if applicable, for review and comment. Compliance with the public participation requirements of Section 75-10-735, MCA, and the public participation requirements of any Cleanup Order shall satisfy the requirements of this paragraph. k. After the public comment period, the BORROWERS shall incorporate all appropriate comments into a final analysis of Brownfields cleanup alternatives document and prepare a written response to the public comments if appropriate. MDEQ’s compliance with the public participation requirements of Section 75-10- 735, MCA, and the public participation requirements of any Cleanup Order shall satisfy the requirements of this paragraph. l. MRP shall prepare a remediation proposal and submit it to MDEQ for review and approval and to the COMMITTEE’S QEP, if applicable, for review and comment. This may occur simultaneously with the submittal of the analysis of cleanup alternatives document and the COMMITTEE’S QEP for review and comment. Submission of a VCP to MDEQ in accordance with Section 75-10-734, MCA, and submission of any remediation proposal required by a Cleanup Order shall meet the requirements of this paragraph. m. If environmental samples will be collected in connection with implementation of the Remediation Project, MRP shall prepare a Quality Assurance Plan which sets forth the manner and method of collecting samples and submit it to EPA for review and approval. A Quality Assurance Plan submitted to and approved by MDEQ shall meet the requirements of this paragraph. n. MRP shall supply the LENDER with preliminary design, construction, and redevelopment plans, as well as a preliminary cost estimate for the Development Project. When MRP seeks financing for the Development Project from a lender that requires a lien on the Property to which LENDER will subordinate its lien, MRP shall provide LENDER information about the proposed sources and uses of all funds involved in the Development Project, and any commitments for construction and permanent financing secured by MRP. o. The BORROWERS further understand and agree that any and all work performed on the Property for which Loan proceeds are used and the receipt of any Loan ---PAGE BREAK--- 16 proceeds under this Agreement is conditioned upon full compliance with the Project Documents and this Agreement. p. The Loan proceeds shall be payable to MRP as reimbursement for Eligible Project Costs incurred based upon the progress of the work and in accordance with the approved Project Budget, attached hereto as Exhibit No reimbursement shall be made to MRP without the approval of the LENDER or the COMMITTEE’S QEP for any cost that is not shown on the Project Budget attached as Exhibit or the Project Budget as modified pursuant to Section 7 above; however, the LENDER shall not advance or be obligated to advance any Loan proceeds to MRP prior to the receipt of properly executed lien waivers. q. MRP agrees to keep all expenditures from the Loan proceeds within the approved Project Budget. Loan proceeds shall not be used to pay costs in excess of the amounts enumerated in the approved Project Budget without the prior written approval of the LENDER and the COMMITTEE’S QEP. r. MRP shall submit copies of all invoices, with lien waivers from payees for the portion of work for which payment is requested and paid, along with a certificate from MRP stating that all funds requested are consistent with the Project Budget, and that funds from LENDER shall be used by MRP for payment to payees as soon as practical (collectively called “Draw Request”). s. MRP shall also comply with the process required under the Montana Voluntary Cleanup and Redevelopment Act (“VCRA”), Section 75-10-735, MCA, which includes requirements for public participation, and preparation and submission to the State of a remediation proposal, including an assessment of remedial alternatives (Section 75-10-734(3), MCA) as may be required to obtain from the MDEQ approval of a closure petition with respect to the Remediation Project. 12. CONDITIONS OF CLOSING. The obligation of LENDER to make the Loan as provided in this Agreement is subject to the receipt by LENDER from a BORROWER of its respective Note in compliance with the terms hereof and to the following conditions precedent: a. The LENDER’S receipt of a Property appraisal from MRP. b. Evidence by MRP that no outstanding taxes, fees, charges, mortgages, liens, encumbrances or other assessments have been filed or are recorded against the Property. LENDER understands that at the time of first execution of this Agreement, title to the Property is not vested in MRP, and the Property is subject to a Lease/Option in favor of Idaho Timber. c. Evidence of liability insurance coverage of the types and with limits of liability as follows: MRP shall keep in full force and effect a policy of commercial general ---PAGE BREAK--- 17 liability insurance against claims for personal injury, death or property damage occurring on, in or as a result of use of the Property, with a combined single limit for personal or bodily injury and property damage of not less than One Million Dollars ($1,000,000); MRP shall also provide combined single limit of liability of $1,500,000.00 each occurrence for bodily injury or property damage for all owned, hired, and non-owned automobiles, which term shall include any land motor vehicle, trailer or semi-trailer designed for travel on public roads, but excluding mobile equipment. The LENDER and the City shall be listed as “additional insured” parties on the insurance policy. All insurance coverage required by this section shall remain in full force and effect during the term of this Agreement. d. Identification of MRP’S principal contractor(s) and subcontractor(s) for the Remediation Project. e. The LENDER’s receipt of the Project Budget attached hereto as Exhibit updated if necessary to the date of the Closing of the Loan, and approved by the LENDER and the COMMITTEE’S QEP. f. It is anticipated that at Closing of the Loan, the City will deliver to the LENDER its Note to secure the Loan and the Note Resolution of the City Council authorizing the execution and delivery of the Note and this Agreement. g. A certificate, if required, as to the truth and accuracy, as of the closing date, of all representations and warranties made herein by BORROWERS. h. Receipt by LENDER of such documents, certificates of officers of BORROWERS, and such other evidence as LENDER shall have reasonably requested respecting the meeting of the conditions of this Agreement. i. The receipt by LENDER from BORROWERS of copies of all documents in connection with this Agreement and the transactions contemplated hereby, or respecting the business and affairs of BORROWERS that LENDER or its counsel may reasonably have requested, satisfactory in form and substance to LENDER and its counsel and certified, when appropriate, by proper corporate officers and governmental authorities. j. The payment by the BORROWERS of all closing costs and expenses including, but not limited to, reasonable fees charged by LENDER’S attorney and/or closing agent for closing said Loan. LENDER agrees that all such costs and expenses shall be limited to and shall be paid from the loan origination fee of two per cent of the Loan. Said loan origination fee shall be paid to Lender solely from the proceeds of the Loan. ---PAGE BREAK--- 18 13. AFFIRMATIVE COVENANTS. MRP commenced work on the Remediation Project in August, 2005 and shall make reasonable efforts to perform all work on the Remediation Project in accordance with a Schedule of Work attached hereto as Exhibit and made a part hereof. LENDER acknowledges the uncertainty of schedule with respect to the MDEQ requirements, BORROWERS’ satisfaction of conditions to funding set forth in this agreement, and other factors. a. All material changes or modification to the Remediation Project shall be approved in writing by the MDEQ prior to such change or modification becoming effective. MRP shall provide notice of such modification and approval to LENDER and the City. All additional costs incurred as the result of any Change Orders that shall exceed the maximum Loan amount shall be the responsibility of MRP, up to a maximum of Two Hundred Thousand Dollars ($200,000), the Project Budget Commitment. In the event that unforeseen conditions are discovered during the Remediation Project implementation, the COMMITTEE reserves the right to request revisions to the Remediation Project and the Project Documents, but no such changes shall become effective without the approval of the BORROWERS. b. Except for Eligible Project Costs, MRP, at its sole cost and expense, and from sources other than Loan proceeds, shall be responsible for obtaining all permits, licenses, approvals, certifications and inspections required by federal, state or local law and to maintain such permits, licenses, approvals, certifications and inspections in current status during the term of this Agreement. c. MRP shall notify the LENDER when all Remediation Activities (other than any ongoing, periodic groundwater monitoring requirements) required by an approved voluntary cleanup plan or Cleanup Order have been implemented. The notice shall contain certification or documentation that the Remediation Project as outlined in the final approved Project Budget has been implemented and has been performed in accordance with the terms of this Agreement. This cleanup closeout documentation shall summarize the actions taken, the resources committed, the problems encountered in implementation of the Remediation Project, if any, identify any institutional controls required, and document that the cleanup (other than any ongoing, periodic groundwater monitoring) has been implemented and is protective of human health and the environment. This documentation shall be submitted to the State for review and approval with a copy to the COMMITTEE’S QEP for review and comment. A closure petition approved by MDEQ as part of MRP’S participation in the State of Montana’s Voluntary Cleanup Program shall serve to satisfy the requirements in this section. d. MRP shall perform all of its obligations and agreements under this Loan Agreement, the Note and the Trust Indenture securing same, if applicable, and any other agreements or instruments to which MRP is a party and which relate to this Loan or to the Remediation Project. ---PAGE BREAK--- 19 e. MRP will undertake on behalf of the BORROWERS all duties and responsibility with respect to the implementation of the VCP and any Cleanup Order, and in particular, and MRP agrees to make timely payments as due, taxes on the Property which it is obligated to pay by virtue of ownership, or other contractual obligations. f. The City shall perform its specified obligations and agreements under this Loan Agreement, the City Note, and the Note Resolution. g. Throughout the term of this Loan Agreement, MRP shall indemnify, defend and hold the City and the LENDER harmless from any and all liability, loss, damage(s) and expense(s), including reasonable attorney’s fees, which it may or shall incur in connection with the Remediation Project or by reason of any good faith action taken by the LENDER in order to protect its rights hereunder, and LENDER agrees to indemnify, defend, and hold BORROWERS harmless from any liability, loss, damage and expense(s), including reasonable attorney’s fees, for any negligence by the LENDER or its contractors or arising after LENDER takes possession of the Property. h. MRP shall erect a sign on the Property stating that the Remediation Project is being financed in part by the City, and the LENDER and providing the appropriate contacts for obtaining information on activities being conducted at the site and for reporting suspected criminal activities. The sign erected on the Property shall comply with all requirements of the state and local law applicable to on-premise outdoor advertising, and shall be 4’X8’ in size (or such smaller size as is required by local law) located so to be clearly visible to the public without the need to enter the Property. i. Any forbearance by the LENDER with respect to any of the terms and conditions of this Agreement or the Letter of Loan Commitment shall in no way constitute a waiver of any of LENDER’S rights or privileges granted hereunder. 14. EVENTS OF DEFAULT. a. General Events of Default. The following shall constitute an Event of Default under this Loan Agreement: The BORROWERS assign this Agreement or any Loan proceeds advanced hereunder or any interest herein to a third party. (ii) Any representation or warranty made herein or in any report, certificate, financial statement or other instrument furnished in connection with this Agreement or the Loan Documents shall prove to be false in any material respect. ---PAGE BREAK--- 20 (iii) Upon the occurrence of any one or more events of default enumerated in 14(a), and such default is not remedied within thirty (30) days, unless a longer period of time is reasonably required to cure the default, from and after written notice by certified mail, return receipt requested, from the LENDER to the BORROWERS, specifying said default, or, if such default cannot be remedied within that period, and remedial effort is not commenced within that period and diligently and continuously pursued, the LENDER shall have the right to proceed by appropriate judicial proceedings to enforce performance or observation of the applicable provisions of this Agreement and/or terminate this Agreement and recover damages from the BORROWERS to the extent allowed by law. b. MRP as Obligor on the Note. If MRP becomes the obligor on the Loan and issues its promissory note as provided in Section 3 hereof, the following shall constitute an Event of Default under the Loan Agreement: MRP assigns or otherwise transfers the Property or any interest therein to a third party other than the City without the prior written consent of the LENDER, (except for any subordination of this Loan contemplated in Section 8.c, or releases of portions of the Property from the Trust Indenture as provided in Section 8.c and upon sales of portions of the Property as provided in Section 8.c). (ii) MRP fails to pay principal of and interest on the MRP Note, if in existence, as it becomes due and payable and such failure continues beyond ten (10) business days. (iii) Any proceeding involving MRP or the Property, commenced under any bankruptcy or reorganization arrangement, probate, insolvency, readjustment of debt, dissolution or liquidation law of the United States, or any state, but if such proceedings are instituted, no Event of Default shall be deemed to have occurred hereunder unless MRP either approves, consents to, or acquiesces in such proceedings, or such proceedings are not dismissed within sixty (60) days. (iv) An order, judgment or decree is entered, without the application, approval or consent of MRP, by any court of competent jurisdiction approving the appointment of a receiver, trustee or liquidator of MRP of all or a substantial part of its assets, and such order, judgment or decree shall continue in effect for a period of sixty (60) days. Upon the occurrence of any one or more of the events of default enumerated in 14(b), all indebtedness of MRP to the LENDER pursuant to this Agreement shall become due and payable, both as to the principal and to the interest, if any, without presentment, demand, protest or notice of ---PAGE BREAK--- 21 any kind to the BORROWERS, all of which are hereby expressly waived by the BORROWERS. c. City Note. The Parties acknowledge that the indebtedness for the Loan as evidenced by the City Note shall be paid solely from sources and in the manner described in Section 2 hereof. Insufficiency of the tax increment to pay the principal of and interest on the City Note as due or the inability of the City to issue Mill Site Project Bonds in an amount sufficient to pay the principal of and interest on the Loan shall not constitute an Event of Default or result in the acceleration of any amounts due and owing under the Note Resolution or this Agreement. 15. ADDITIONAL COVENANTS. a. Debarment, Suspension (Nonprocurement) And Lobbying. This Loan Agreement is subject to Section 319 of Public Law 101-121, which added Section 1352, regarding lobbying restrictions, to Chapter 13 of Title 31 of the United States Code as implemented by 15 CFR Part 28. The BORROWERS are prohibited from using federal funds for lobbying the Executive or Legislative Branches of the Federal Government in connection with this Loan to the extent provided by applicable law. Each BORROWER receiving a Loan must file Form CD-512, "Certifications Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transactions and Lobbying", and Standard Form- LLL, "Disclosure of Lobbying Activities", regarding the use of any nonfederal funds for lobbying. Each BORROWER subject to this disclosure provision is required to file a disclosure form within 15 days of the end of each calendar quarter in which there occurs any event that requires disclosure or that materially affects the accuracy of the information contained in a previously filed disclosure form. b. The BORROWERS agree to maintain financial and programmatic records pertaining to all matters relative to this Agreement in accordance with generally accepted accounting principles and procedures and to retain all of their records and supporting documentation applicable to this Agreement for a period of three years except as follows: Records that are subject to audit findings shall be retained three years after such findings have been resolved. (ii) All such records and supporting documents shall be made available, upon request, for inspection or audit by the LENDER or its representatives. c. The BORROWERS agree to permit the LENDER or its designated representative to inspect and/or audit its records and books relative to this Agreement at BORROWERS’ offices in the City of Missoula, Montana at any time during normal business hours and under reasonable circumstances and to copy therefrom ---PAGE BREAK--- 22 any information that the LENDER desires relevant to this Agreement. The LENDER shall provide written notice to the BORROWERS prior to the execution of this provision. The records of the City and MRA shall always be kept in the City of Missoula, Montana. If MRP’S records are not located within the City of Missoula, Montana, MRP agrees to deliver the records or have the records delivered to the LENDER or its designated representative at an address designated by such party within the City of Missoula. If the LENDER or its representative finds that the records delivered by MRP are incomplete, MRP agrees to pay the LENDER or its representative’s costs to travel to MRP’S office or other location where the books or records are located to audit or retrieve the complete records. d. The BORROWERS will comply with the applicable statutes prohibiting discrimination on the grounds of race, color, national origin, sex and disability. In addition, the BORROWERS will undertake good faith efforts to give opportunities for qualified Small Business Enterprises (SBE), Minority Business Enterprises (MBE) and Women-Owned Business Enterprises (WBE) to submit proposals, bids, and provide services on contracts and subcontracts for services and supplies. The BORROWERS shall submit a report of such efforts on the City-provided form. e. MRP agrees to protect, indemnify, defend and hold harmless, the City of Missoula and the LENDER, its officers, administrators, agents, servants, and employees from, for or against any and all claims, demands, suits, losses, damages, judgments, costs and expenses, whether direct or indirect and including, but not limited to, all fees, expenses and reasonable charges of attorneys and other professionals, court costs, and other fees and expenses for bodily injury, including death, personal injury and property damage, arising out of or in connection with the performance of any work or any responsibility or obligation of MRP as provided herein to the extent caused in whole or in part by any act, error, or omission of MRP, its agents, servants, employees or assigns. f. None of the Parties shall assign or attempt to assign directly or indirectly, any of their respective rights under this Agreement or under any instrument referred to herein without the prior written consent of all of the Parties. Except as otherwise provided in this Agreement, the BORROWERS shall not assign all or any portion of the Property made the subject of this Agreement without the prior written consent of the LENDER. g. This Agreement is not intended to create or vest any rights in any third party or to create any third party beneficiaries. h. All amendments to this Agreement shall be in writing and signed by all Parties. i. It is expressly understood that a failure or delay on the part of the BORROWERS in the performance, in whole or in part, or any of the terms of this Agreement, if ---PAGE BREAK--- 23 such failure is attributable to an Act of God, fire, flood, riot, insurrection, embargo, emergency or governmental orders, regulations, priority, or other limitations or restrictions, or other similar unforeseen causes beyond the reasonable control of such party, then such failure or delay shall not constitute a breach or default under this Agreement. However, the BORROWERS shall use their best effort to ensure that the Remediation Project is completed in a reasonable time without unnecessary delay. j. The provisions of this Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective successors and assigns. k. No failure of a party to exercise any power or right given it hereunder or to insist on strict compliance by another party with its obligations hereunder, and no custom or practice of the parties at variance with the terms hereof shall constitute a waiver of the other party’s right to demand at any time exact compliance with the terms hereof. 16. REMEDIES. LENDER shall give notice to BORROWERS following BORROWERS’ breach of any covenant or agreement in this Agreement. The notice shall specify: the default; the action required to cure the default; and a date, not less than thirty (30) days from the date the notice is given to BORROWERS by which the default must be cured. The notice shall further inform BORROWERS of the right to bring a court action to assert the non-existence of a default or any other defense of BORROWERS to acceleration and sale. If the default is not cured on or before the date specified in the notice, LENDER, at its option, but subject to the terms of this Agreement, may require immediate payment in full of all sums owed to LENDER without further demand and may invoke the power of sale and any other remedies permitted by applicable law. LENDER shall be entitled to collect all expenses incurred in pursuing the remedies provided in this paragraph 16, including but not limited to, reasonable attorneys' fees and costs of title evidence. 17. WAIVER OF NOTICE. The BORROWERS hereby expressly waive any requirement for presentation, demand, protest, notice of protest or other notice or dishonor of any kind, other than the notice specifically provided for in this Agreement. ---PAGE BREAK--- 24 18. NOTICES. All notices, demands and communications provided for herein or made hereunder shall be delivered, or sent by certified mail, return receipt requested, addressed in each case as follows, until some other address shall have been designated in a written notice to the other party hereto given in like manner. To City: City of Missoula, Montana 435 Ryman Street Missoula, MT 59802 With copy to: Missoula Redevelopment Agency 140 W. Pine Street Missoula, MT 59802 To MRP: Millsite Revitalization Project, LLC 2800 South Reserve Street Missoula, MT 59801 With copies to: Ed Wetherbee Colorado Venture Management / Boulder Partners 1105 Spruce St Boulder, Colorado 80301 Bill Roberts Roberts Law Office, LLC 719 Walnut Street Boulder, Colorado 80302 To LENDER: Missoula Area Economic Development Corporation 1121 East Broadway, Suite 100 Missoula, MT 59802 Such notice shall be deemed to have been given or made when so delivered or mailed. Notification of change shall be delivered to LENDER and BORROWERS within ten days of any change affecting this provision. 19. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND OBLIGATIONS. All representations and warranties contained herein shall survive the execution and delivery of this Agreement and of the Note, and any additional loan documents, and any investigation at any time made by the LENDER or on its behalf, and any sale or transfer of the Note, and any additional loan documents. All obligations of BORROWERS under ---PAGE BREAK--- 25 this Loan Agreement, their respective Notes, or any additional loan documents to which one of the Borrowers may become party which have not been fully performed, paid and satisfied at the time of closing of the Loan, shall survive the closing. 20. CONSTRUCTION AND AMENDMENT. This Loan Agreement, including the City Note Resolution, the City Note, and the form of Note attached hereto and made part hereof, constitutes the entire agreement between the Parties pertaining to the Loan and supersedes all prior and contemporaneous agreements and understandings of the Parties in connection therewith. This Agreement may not be changed, amended or terminated orally but only by agreement in writing and signed by the party against whom enforcement of any change, amendment or termination is sought. 21. PAYMENT. The BORROWERS will pay to the LENDER at its address specified in Section 18, or at such other address as it may designate in writing, all amounts payable with respect to the principal of, and interest on, any Note held by the LENDER. 22. SUCCESSORS AND ASSIGNS. All covenants, agreements, representations and warranties made herein or in certificates delivered in connection herewith shall, whether so expressed or not, bind and inure to the benefit of the successors and assigns of the BORROWERS and LENDER. 23. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement shall not become effective until executed by all parties. 24. NO WAIVER; REMEDIES CUMULATIVE. No exercise, partial exercise, failure or delay on the part of the LENDER in exercising any power or right hereunder, or under the MRP Note or Trust Indenture, shall operate as a waiver of the power or with, except as specifically provided herein or therein. No remedy conferred herein or in the MRP Note or Trust Indenture is intended to be exclusive, to any other remedy, and each and every other remedy given hereunder or now hereafter existing at law or in equity or by statute or otherwise, may be sought by the enforcing party. ---PAGE BREAK--- 26 25. GOVERNING LAW. This Agreement, the MRP Note, the City Note Resolution, the City Note, and any additional loan documents shall be governed by and interpreted in accordance with the laws of the State of Montana without regard to the choice of law provisions thereof. LENDER: MISSOULA AREA ECONOMIC DEVELOPMENT CORPORATION BY: Date: Its: BORROWERS: THE CITY OF MISSOULA, MONTANA BY: Date: Its: Mayor BY: Date: Its: City Clerk MISSOULA REDEVELOPMENT AGENCY BY: Date: Its: President of the Board MILLSITE REVITALIZATION PROJECT, LLC BY: Date: Its: Manager BY: Date: Its: Manager ---PAGE BREAK--- A-1 [Exhibit A to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] EXHIBIT A DESCRIPTION OF THE MILL SITE PROPERTY Lots 1 to 20 in Block 9 of Sunnyside Addition to the City of Missoula, Montana, according to the official map or plat thereof on file and of record in the office of the County Clerk and Recorder of Missoula County, Montana. All of Block 13 of Sunnyside Addition to the City of Missoula, lying West of the right-of-way line of the Northern Pacific Railway Company. Lots 6 to 12 in Block 9 and Lots 6 to 19 in Block 16 of Eddy Addition to the City of Missoula, Montana, according to the official map or plat thereof on file and of record in the office of the County Clerk and Recorder of Missoula County, Montana. All that portion of the S1/2NE1/4NW1/4 of Section 21, T13N, R19W, lying South of the main channel of the Missoula River. The SE1/4NE1/4 of Section 21, T13N, R19W, excepting a certain right-of-way granted to the Chicago, Milwaukee, and St. Paul Railroad, a corporation of Montana, by deed recorded in Volume 37 of Deeds at Page 285, and also a certain grant to the Chicago, Milwaukee, and Puget Sound Railroad, a corporation of Washington, by deed recorded in Volume 56 of Deeds at Page 192, and subject to a certain right-of-way or easement for a water ditch made May 14, 1900, unto Robert Cobban, et al., recorded in Book 21 of Deeds at Page 257. TOGETHER WITH appurtenances. ---PAGE BREAK--- B-1 [Exhibit B to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] EXHIBIT B FOURTH AMENDED AND RESTATED RESOLUTION RELATING TO URBAN RENEWAL DISTRICT II; AUTHORIZING THE ISSUANCE OF A TAX INCREMENT URBAN RENEWAL REVENUE NOTE, SERIES 2006 (URBAN RENEWAL DISTRICT II - MILL SITE PROJECT), AS SECURITY FOR A LOAN MADE UNDER THE RLF LOAN AGREEMENT Please see attached. ---PAGE BREAK--- C-1 [Exhibit C to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] EXHIBIT C MRP NOTE [Use If MRP elects to Repay the Loan] Loan No. Date: Maturity Date: Loan Amount $1,525,000.00 For value received, the undersigned Millsite Revitalization Project, LLC, (“MRP”) promises to pay to the order of the Missoula Area Economic Development Corporation (the “LENDER”), at its offices at 1121 East Broadway, Suite 100, Missoula, Montana, or at the holder's option, at such other place as may be designated from time-to-time by the holder, the principal with interest on unpaid principal computed from the date hereof to the undersigned at the rate of one and one- half percent per annum, payment to be made in installments as follows: The Loan will bear interest at the rate of one and one-half per cent per annum on the principal received from the date received. Payment to be made in installments as follows: interest-only payments beginning thirty days after the date of closing on purchase of the Property and continuing for the following twenty-four months, with amortized payments of principal and interest, based on an amortization period of twenty years, commencing on the twenty-fifth payment date. Payments shall be applied first to interest at the rate specified on the unpaid principal amount of this Loan, accrued to date of receipt of said payment, and the balance of each payment, if any, shall be applied on account of principal. If payment is not received within ten days of the due date, a late fee of two per cent (2 of the payment due, or Fifty Dollars ($50.00), whichever is greater, shall be imposed. Following the completion of the interest-only period, the term of the Loan shall be two hundred forty (240) months. MRP shall pay the Loan in equal installments of principal and interest, with the entire balance due on the date of the two hundred fortieth (240th) payment. The loan may be repaid in full or in part without penalty at any time during the term. Full repayment will include all outstanding principal and interest accrued since the date of last payment. Partial payments will consist first of accrued interest, with the balance applied to the outstanding principal. MRP, if such escrow agent is requested or required by the LENDER, shall pay any and all escrow agent fees and/or charges. Default in any payment due hereunder, or in the performance of any term, covenant or writing of the Loan Agreement (as described in the next paragraph) at the option of the LENDER, constitute a default under this note and should MRP fail to cure any default within thirty (30) ---PAGE BREAK--- C-2 [Exhibit C to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] days after written notice of default from the LENDER, the entire unpaid principal sum and all unpaid accrued interest shall immediately become due and payable. If suit is brought to collect this note, the LENDER shall be entitled, upon final judgment in its favor, to collect all reasonable costs and expenses of suit, including but not limited to reasonable attorney's fees. This note is issued pursuant to and is governed by provisions of a Loan Agreement between the Missoula Redevelopment Agency (the “MRA”), MRP and LENDER dated the day of 2006, as the same may be amended, or supplemented from time-to-time (the "Loan Agreement"). Capitalized terms not defined in this Note shall have the meaning assigned to the same term in the Loan Agreement or in the other documents executed in connection with the Loan Agreement. This note shall be governed by and construed in accordance with the laws of the State of Montana without regard to the choice of law provisions thereof. MRP agrees to execute a Trust Indenture on the Property described in Exhibit in substantially the form of Exhibit to be placed of record at such time as LENDER requires after MRP’S purchase of said Property to secure MRP’S obligations under this Note and the Loan Agreement. The security rights of a holder (the Holder) and its assigns hereunder shall not be impaired by the Holder's sale, hypothecation or rehypothecation of this note or any item of the Collateral, or by any indulgence, including by not limited to any renewal, extension or modification which the Holder may grant with respect to the Indebtedness or any part thereof, any surrender, compromise, release, renewal, extension, exchange, or substitution which the Holder may grant in respect of the Collateral, or any indulgence granted in respect of any endorser, guarantor, or surety. The purchaser, assignee, transferee, or pledgee of this Note, the Collateral, any guaranty, and any other document (or any of them), sold, assigned, transferred, pledged, or repledged, shall forthwith become vested with and entitled to exercise all the powers and rights given by this Note, the Loan Agreement, the and other documents executed in connection with the Loan Agreement and all applications of the undersigned to the Holder as if said purchaser, assignee, transferee, or pledgee were originally named as payee in this note and in said application or applications. MILLSITE REVITALIZATION PROJECT, LLC BY: Its: Manager BY: Its: Manager ---PAGE BREAK--- D-1 [Exhibit D to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] EXHIBIT D DEED OF TRUST After Recording Return To: DEED OF TRUST (Trust Indenture Under The Small Tract Financing Act of Montana) THIS DEED OF TRUST ("Security Instrument") is made this day of The grantor is Millsite Revitalization Project, LLC, 2800 South Reserve Street, Missoula, Montana, 59801 ("BORROWER"). The trustee is ("TRUSTEE"). The beneficiary is Missoula Area Economic Development Corporation which is organized and existing under the laws of the United States of America and whose address is 1121 East Broadway, Missoula, Montana 59802 ("LENDER"). BORROWER owes LENDER the principal sum of One Million Five Hundred Twenty-Five Thousand Dollars ($1,525,000.00). This debt is evidenced by BORROWER'S note dated the same date as this Security Instrument ("Note"), which provides for payments, with the full debt, if not paid earlier, due and payable on This Security Instrument secures to LENDER: the repayment of the debt evidenced by the Note, with interest, and all renewals, extensions and modifications; the payment of all other sums, with interest, advanced under paragraph 7 to protect the security of this Security Instrument; and the performance of BORROWER'S covenants and agreements to protect the security of this Security Instrument; and the performance of BORROWER'S covenants and agreements under this Security Instrument and the Note. For this purpose, BORROWER irrevocably grants and conveys to Trustee, in trust, with the power of sale, the following described property located in Missoula County, Montana: Lots 1 to 20 in Block 9 of Sunnyside Addition to the City of Missoula, Montana, according to the official map or plat thereof on file and of record in the office of the County Clerk and Recorder of Missoula County, Montana. All of Block 13 of Sunnyside Addition to the City of Missoula, lying West of the right-of-way line of the Northern Pacific Railway Company. Lots 6 to 12 in Block 9 and Lots 6 to 19 in Block 16 of Eddy Addition to the City of Missoula, ---PAGE BREAK--- D-2 [Exhibit D to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] Montana, according to the official map or plat thereof on file and of record in the office of the County Clerk and Recorder of Missoula County, Montana. All that portion of the S1/2NE1/4NW1/4 of Section 21, T13N, R19W, lying South of the main channel of the Missoula River. The SE1/4NE1/4 of Section 21, T13N, R19W, excepting a certain right-of-way granted to the Chicago, Milwaukee, and St. Paul Railroad, a corporation of Montana, by deed recorded in Volume 37 of Deeds at Page 285, and also a certain grant to the Chicago, Milwaukee, and Puget Sound Railroad, a corporation of Washington, by deed recorded in Volume 56 of Deeds at Page 192, and subject to a certain right-of-way or easement for a water ditch made May 14, 1900, unto Robert Cobban, et al., recorded in Book 21 of Deeds at Page 257. TOGETHER WITH appurtenances. TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, rights, appurtenances, rents, royalties, mineral, oil and gas rights and profits, water rights and stock, and all fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the "Property"; BORROWER covenants that BORROWER is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. BORROWER warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record. THIS SECURITY INSTRUMENT combines uniform covenants for national use and non- uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property. BORROWER and LENDER covenant and agree as follows: 1. PAYMENT OF PRINCIPAL AND INTEREST; PREPAYMENT AND LATE CHARGES. BORROWER shall pay when due the principal of and interest on the debt evidenced by the Note and any prepayment and late charges due under the Note. 2. FUNDS FOR TAXES AND INSURANCE. BORROWER shall pay all taxes due directly to the local taxing agency and all premiums for insurance on said property directly to the insuring agency. Proof of payment made shall be given to the BORROWER within 30-days of due date. 3. Upon payment in full of all sums secured by this Security Instrument, LENDER shall refund to BORROWER any Funds held by LENDER. If under paragraph 18 the Property is sold or acquired by LENDER, LENDER shall apply, no later than immediately prior to the sale of the Property or its acquisition by LENDER, any Funds held by LENDER at the ---PAGE BREAK--- D-3 [Exhibit D to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] time of application as a credit against the sums secured by this Security Instrument. 4. APPLICATION OF PAYMENTS. Unless applicable law provides otherwise, all payments received by LENDER under paragraphs 1 and 2 shall be applied: first, to late charges due under the Note; second, to prepayment charges due under the Note; third, to amounts payable under paragraph 2; fourth, to interest due; and last, to principal due. 5. CHARGES; LIENS. BORROWER shall pay all taxes, assessments, charges, fines and impositions attributable to the Property which may attain priority over this Security Instrument, and leasehold payments or ground rents, if any. BORROWER shall pay these obligations in the manner provided under paragraph 2, or if not paid in that manner, BORROWER shall pay them on time directly to the person owed payment. BORROWER shall furnish to LENDER all notices of amounts to be paid under this paragraph. If BORROWER makes these payments directly, BORROWER shall furnish to LENDER receipts evidencing the payments. BORROWER shall discharge any lien which has priority over this Security Instrument unless BORROWER: agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to LENDER; contests in good faith the lien by, or defends against enforcement of the lien in, legal proceedings which, in the LENDER's opinion, operate to prevent the enforcement of the lien or forfeiture of any part of the Property; or secures from the holder of the lien an agreement satisfactory to LENDER subordinating the lien to this Security Instrument. If LENDER determines that any part of the Property is subject to a lien which may attain priority over this Security Instrument, LENDER may give BORROWER a notice identifying the lien. BORROWER shall satisfy the lien or take one or more of the actions set forth above within 10 days after the notice is given. 6. HAZARD INSURANCE. BORROWER shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage," and any other hazards for which LENDER requires insurance. This insurance shall be maintained in amounts and for the periods that LENDER reasonably requires. The insurance carrier providing the insurance shall be chosen by BORROWER subject to LENDER's approval which shall not be unreasonably withheld. All insurance policies and renewals shall be acceptable to LENDER and shall include a standard mortgage clause. LENDER shall have the right to hold the policies and renewals. If LENDER requires, BORROWER shall give to LENDER all receipts of paid premiums and renewal notices. In the event of loss, BORROWER shall give prompt notice to the insurance carrier and LENDER. LENDER may make proof of loss if not made by BORROWER. Unless LENDER and BORROWER otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Property damaged, if the restoration or repair is economically feasible and LENDER'S security is not lessened. If the restoration or repair is not economically feasible or LENDER'S security would be lessened, the insurance proceeds shall be ---PAGE BREAK--- D-4 [Exhibit D to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] applied to the sums secured by this Security Instrument, whether or not then due, with any excess paid to BORROWER. If BORROWER abandons the Property or does not answer within 30 days after a notice from LENDER that the insurance carrier has offered to settle a claim, then LENDER may collect the insurance proceeds. LENDER may use the proceeds to repair or restore the Property or to pay sums secured by this Security Instrument, whether or not then due. The 30-day period will begin when the notice is given. Unless LENDER and BORROWER otherwise agree in writing, any application of proceeds to principal shall not extend or postpone the due date of the payments referred to in paragraphs 1 and 2 or change the amount of the payments. If under paragraph 18 the Property is acquired by LENDER, BORROWER'S right to any insurance policies and proceeds resulting from damage to the Property prior to the acquisition shall pass to LENDER to the extent of the sums secured by this Security Instrument immediately prior to the acquisition. 7. PRESERVATION AND MAINTENANCE OF PROPERTY; LEASEHOLDS. BORROWER shall not destroy, damage or substantially change the Property, or allow the Property to deteriorate or commit waste. LENDER agrees, however, that BORROWER may make such changes in the Property as are envisioned by the Loan Agreement between LENDER and BORROWER (“Loan Agreement”) pertaining to the Note. If this Security Instrument is on a leasehold, BORROWER shall comply with the provisions of the lease, and if BORROWER acquires fee title to the Property, the leasehold and fee title shall not merge unless LENDER agrees to the merger in writing. 8. PROTECTION OF LENDER'S RIGHTS IN THE PROPERTY. If BORROWER fails to perform the covenants and agreements contained in this Security Instrument or there is a legal proceeding that may significantly affect LENDER'S rights in the Property (such as a proceeding in bankruptcy, probate, for condemnation, or to enforce laws or regulations), then LENDER may do and pay for whatever is necessary to protect the value of the Property and LENDER'S rights in the Property. LENDER'S actions may include paying any sums secured by a lien which has priority over this Security Instrument, appearing in court, paying reasonable attorneys' fees, and entering on the Property to make repairs. Although LENDER may take action under this paragraph 8, LENDER does not have to do so. Any amounts disbursed by LENDER under this paragraph 8 shall become additional debt of BORROWER secured by this Security Instrument. Unless BORROWER and LENDER agree to other terms of payment, these amounts shall bear interest from the date of disbursement at the Note rate and shall be payable, with interest, upon notice from LENDER to BORROWER requesting payment. 9. INSPECTION. LENDER or its agent may make reasonable entries upon and inspections of the Property. LENDER shall give BORROWER notice prior to an inspection specifying reasonable cause for the inspection. 10. CONDEMNATION. The proceeds of any award or claim for damages, direct or ---PAGE BREAK--- D-5 [Exhibit D to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] consequential, in connection with any condemnation or other taking of any part of the Property, or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to LENDER. In the event of a total taking of the Property, the proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with any excess paid to BORROWER. In the event of a partial taking of the Property, unless BORROWER and LENDER otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the proceeds multiplied by the following fraction: the total amount of the sums secured immediately before the taking, divided by the fair market valued of the Property immediately before the taking. Any balance shall be paid to BORROWER. If the Property is abandoned by BORROWER, or if, after notice by LENDER to BORROWER that the condemnor offers to make an award or settle a claim for damages, BORROWER fails to respond to LENDER within 30 days after the date such notice is given, LENDER is authorized to collect and apply the proceeds, at its option, either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due. Unless LENDER and BORROWER otherwise agree in writing, any application of proceeds to principal shall not extend or postpone the due date of the payments referred to in paragraphs 1 and 2 or change the amount of such payments. 11. BORROWER NOT RELEASED; FORBEARANCE BY LENDER NOT A WAIVER. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by LENDER to any successor in interest of BORROWER shall not operate to release the liability of the original BORROWER and BORROWER'S successors in interest. LENDER shall not be required to commence proceedings against any successor in interest or refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original BORROWER or BORROWER'S successors in interest. Any forbearance by LENDER in exercising any right or remedy shall not be a waiver of or preclude the exercise of any right to remedy. 12. SUCCESSORS AND ASSIGNS BOUND; JOINT AND SEVERAL LIABILITY; CO- SIGNERS. The covenants and agreements of this Security Instrument shall bind and benefit the successors and assigns of LENDER and BORROWER, subject to the provisions of paragraph 17. BORROWER'S covenants and agreements shall be joint and several. Any BORROWER who co-signs this Security Instrument but does not execute the Note: is co-signing this Security Instrument only to mortgage, grant and convey that BORROWER'S interest in the Property under the terms of the Security Instrument; is not personally obligated to pay the sums secured by this Security Instrument; and agrees that LENDER and any other BORROWER may agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without that BORROWER'S consent. 13. LOAN CHARGES. If the Loan secured by this Security Instrument is subject to a law which sets maximum Loan charges and that law is finally interpreted so that the interest or other ---PAGE BREAK--- D-6 [Exhibit D to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] Loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: any such Loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and any sums already collected from BORROWER which exceeded permitted limits will be refunded to BORROWER. LENDER may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to BORROWER. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge under the Note. 14. LEGISLATION AFFECTING LENDER'S RIGHTS. If enactment or expiration of applicable laws has the effect of rendering any provision of this Note or this Security Instrument unenforceable according to its terms, LENDER, at its option, may require immediate payment in full of all sums secured by this Security Instrument and may invoke any remedies permitted by paragraph 18. If LENDER exercises this option, LENDER shall take the steps specified in the second paragraph of paragraph 18. 15. NOTICES. Any notice provided for in this Security Instrument shall be deemed to have been given to BORROWER or LENDER when given as provided in this paragraph. Any notice under this Security Instrument shall be in writing and shall be effective when actually delivered in person or two days after being deposited in the U.S. Mail, certified, postage prepaid and addressed to the party at the address stated below or such other address as either party may designate by written notice to the other. TO LENDER: Missoula Area Economic Development Corporation 1121 East Broadway Missoula, Montana 59801 TO TRUSTEE: TO BORROWER: Millsite Revitalization Project, LLC 2800 South Reserve Missoula, MT 59802 with copy to: Bill Roberts Roberts Law Office, LLC ---PAGE BREAK--- D-7 [Exhibit D to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] 719 Walnut Street Boulder, Colorado 80302 16. GOVERNING LAW; SEVERABILITY. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located, without regard to conflicts of law provisions. In the event that any provision or clause of this Security Instrument or the Note conflicts with applicable law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. To this end the provisions of this Security Instrument and the Note are declared to be severable. 17. BORROWER'S COPY. BORROWER shall be given one conformed copy of the Note and this Security Instrument. 18. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN BORROWER. Except as provided in the Loan Agreement, if all or any part of the Property or an interest in it is sold or transferred (or if a beneficial interest in BORROWER is sold or transferred and BORROWER is not a natural person) without LENDER'S prior written consent, LENDER may, at its option, require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by LENDER if exercise is prohibited by federal law as of the date of this Security Instrument. If LENDER exercises this Option, LENDER shall give BORROWER notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is delivered or mailed within which BORROWER must pay all sums secured by this Security Instrument. If BORROWER fails to pay these sums prior to the expiration of this period, LENDER may invoke any remedies permitted by this Security Instrument without further notice or demand on BORROWER. 19. SALE OF PROPERTY. In the event of an unremedied default and upon written request of LENDER, Trustee shall sell the Property in accordance with the laws of the State of Montana at public or private sale as allowed by law to the highest bidder. Any person (except Trustee) may bid at the Trustee's sale. Trustee shall apply the proceeds of the sale as follows: to the expense of the sale, including a reasonable Trustee's fee and attorney's fee; to the obligation secured by this Security Instrument; and the surplus, if any, shall be distributed in accordance with the laws of Montana. Trustee shall deliver to the purchaser at the sale a Trustee's deed, without warranty, which shall convey to the purchaser such interest in the Property which BORROWER had or had the power to convey at the time of the execution of this Security Instrument, and such interest as Trustee may have acquired thereafter. The Trustee's deed shall recite the facts showing that the sale was conducted in compliance with all requirements of law and of this Security Instrument, which recital shall be prima facie evidence of such compliance and conclusive evidence thereof in favor of bona fide purchasers and encumbrancers for value. The power of sale conferred by this Security Instrument and by the laws of Montana is not an exclusive remedy and when not exercised, LENDER may foreclose this Security Instrument under the laws of Montana as a mortgage, provided, however, that LENDER shall not obtain a ---PAGE BREAK--- D-8 [Exhibit D to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] deficiency judgment. At any time LENDER may appoint in writing a successor trustee, or discharge and appoint a new Trustee in the place of any Trustee named herein, and upon the recording of such appointment in the records of the county in which this Security Instrument is recorded, the successor Trustee shall be vested with all the powers of the original Trustee. BORROWER agrees to surrender possession of the Property to the Purchaser at the aforesaid sale on or before the tenth (10th) day following the sale, in the event such possession has not previously been delivered. 20. BORROWER'S RIGHT TO REINSTATE. If BORROWER meets certain conditions, BORROWER shall have the right to discontinue enforcement of this Security Instrument at any time prior to the earlier of: 5 days (or such other period as applicable law may specify for reinstatement) before sale of the Property pursuant to any power of sale contained in this Security Instrument; or entry of a judgment enforcing this Security Instrument. Those conditions are that BORROWER: pays LENDER all sums which then would be due under this Security Instrument and the Note had no acceleration occurred; cures any default of any other covenants or agreements; pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys' fees; and takes such action as LENDER may reasonably require to assure that the lien of this Security Instrument, LENDER's rights in the Property and BORROWER'S obligation to pay the sums secured by this Security Instrument shall continue unchanged. Upon reinstatement by BORROWER, this Security Instrument and the obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under paragraphs 14 or 18. 21. OTHER ACTIONS. Without affecting the liability of any person, including BORROWER, for the payment of any indebtedness secured hereby, or the lien of this Security Instrument on the remainder of the Property for the full amount of any indebtedness unpaid, LENDER and Trustee are respectively empowered as follows: Beneficiary may from time to time and without notice: Release any person liable for payment of any of the indebtedness, Extend the time or otherwise alter the terms of payment of any of the indebtedness, Alter, substitute or release any property securing the indebtedness; Trustee may, at any time and from time to time, upon the written request of Beneficiary: Consent to the making of any map or plat of the property, Join in granting any easement or creating any restriction thereon, ---PAGE BREAK--- D-9 [Exhibit D to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] Join in any subordination or other agreement affecting this Trust Indenture or lien or charge thereof, Reconvey, without warranty, all or any part of the property. Upon written request of LENDER stating that all sums secured hereby have been paid, and upon surrender of this Security Instrument and the Note to Trustee for cancellation and retention and upon payment by LENDER of its fees, Trustee shall reconvey to BORROWER, without warranty, the Property then held hereunder. BY SIGNING BELOW, BORROWER accepts and agrees to the terms and covenants contained in this Security Instrument and in any rider(s) executed by BORROWER and recorded with it. Millsite Revitalization Project, LLC Ed Wetherbee, Manager Kevin Manager STATE OF MONTANA ) : ss. County of Missoula ) This instrument was acknowledged before me on the day of 2006, by Ed Wetherbee, Manager of Millsite Revitalization Project, LLC. Notary Signature: Printed Name: Notary Public for the State of Montana (NOTARIAL SEAL) Residing at: My Commission expires: 20__ STATE OF MONTANA ) : ss. County of Missoula ) This instrument was acknowledged before me on the day of 2006, by Kevin Manager of Millsite Revitalization Project, LLC. ---PAGE BREAK--- D-10 [Exhibit D to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] Notary Signature: Printed Name: Notary Public for the State of Montana (NOTARIAL SEAL) Residing at: My Commission expires: 20__ LENDER: MISSOULA AREA ECONOMIC DEVELOPMENT CORPORATION BY: Date: Its: STATE OF MONTANA ) : ss. County of Missoula ) This instrument was acknowledged before me on the day of 2006, by as of Missoula Area Economic Development Corporation. Notary Signature: Printed Name: Notary Public for the State of Montana (NOTARIAL SEAL) Residing at: My Commission expires: 20__ ---PAGE BREAK--- E-1 [Exhibit E to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] 1 EXHIBIT E LOAN AMORTIZATION SCHEDULE Please see attached. ---PAGE BREAK--- F-1 [Exhibit F to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] 1 EXHIBIT F SCHEDULE OF WORK – REMEDIATION PROJECT PROJECT BUDGET Environmental Site Cleanup $2,324,144 (paid to date) Woodchip Removal, Backfill & Methane $1,675,856 (remaining to be performed) Liability Insurance & Legal Services $400,000 Contingency $200,000 Total $4,600,000 ---PAGE BREAK--- G-1 [Exhibit G to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] 1 EXHIBIT G DAVIS-BACON ACT, CONTRACT WORK HOURS AND SAFETY STANDARDS ACT AND ANTI-KICKBACK ACT Minimum Wages All laborers and mechanics employed or working upon the site of the work will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. Contributions made or costs reasonably anticipated for bona fide fringe benefits under section 1(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics, subject to the provisions of paragraph (a)(1)(iv) of this section; also, regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period. Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the wage determination for the classification of work actually performed, without regard to skill, except as provided in Laborers or mechanics performing work in more than one classification may be compensated at the rate specified for each classification for the time actually worked therein: Provided, That the employer’s payroll records accurately set forth the time spent in each classification in which work is performed. The wage determination (including any additional classification and wage rates conformed under paragraph (a)(1)(ii) of this section) and the Davis- Bacon poster (WH-1321) shall be posted at all times by the contractor and its sub-contractors at the site of the work in a prominent and accessible place where it can be easily seen by the workers. Withholding. The Missoula Area Economic Development Corporation shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld from the contractor under this contract or any other Federal contract with the same prime contractor, or any other federally-assisted contract subject to David- Bacon prevailing wage requirements, which is held by the same prime contractor, so much of the accrued payments or advances as may be considered necessary to pay laborers and mechanics, including apprentices, trainees, and helpers, employed by the contractor or any subcontractor the full amount of wages required by the contract. In the event of failure to pay any laborer or mechanic, including any apprentice, trainee, or helper, employed or working on the site of the work, all or part of the wages required by the contract, the Missoula Area Economic Development Corporation may, after written notice to the contractor, sponsor, applicant, or owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds until such violations have ceased. Payrolls and basic records. Payrolls and basic records relating thereto shall be maintained by the contractor during the course of the work and preserved for a period of three ---PAGE BREAK--- G-2 [Exhibit G to Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] 2 years thereafter for all laborers and mechanics working at the site of the work. Such records shall contain the name, address, and social security number of each such worker, his or her correct classification, hourly rates of wages paid (including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described in section 1(b)(2)(B) of the Davis-Bacon Act), daily and weekly number of hours worked, deductions made and actual wages paid. Whenever the Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the wages of any laborer or mechanic include the amount of any costs reasonably anticipated in providing benefits under a plan or program described in section 1(b)(2)(B) of the Davis-Bacon Act, the contractor shall maintain records which show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanics affected, and records which show the costs anticipated or the actual cost incurred in providing such benefits. Contractors employing apprentices or trainees under approved programs shall maintain written evidence of the registration of apprenticeship programs and certification of trainee programs, the registration of the apprentices and trainees, and the ratios and wage rates prescribed in the applicable programs. Compliance with Copeland Act requirements. The contractor shall comply with the requirements of 29 CFR part 3, which are incorporated by reference in this contract. Overtime requirements. No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek. Violation; liability for unpaid wages; liquidated damages. In the event of any violation of the clause set forth in section the contractor and any subcontractor responsible therefor shall be liable for the unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of the clause set forth in section in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in section Withholding for unpaid wages and liquidated damages. The Missoula Area Economic Development Corporation shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the contractor or subcontractor under any such contract or any other Federal contract with the same prime contractor, or any other federally-assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in section ---PAGE BREAK--- H-1 [Exhibit H to the Missoula Brownfields Cleanup Revolving Loan Fund Loan Agreement] 1 EXHIBIT H DEPARTMENT OF COMMERCE REQUIREMENTS 1. Administrative, contractual or legal remedies in instances where contractors violate or breach contract terms, and provide for such sanctions and penalties as appropriate. 2. Termination for cause and for convenience by the grantee or subgrantee including the manner by which it will be effected and the basis for settlement. 3. Compliance with Executive Order 11246 of September 24, 1965, entitled "Equal Employment Opportunity," as amended by Executive Order 11375 of October 13, 1967, and as supplemented in Department of Labor regulations. 4. Compliance with the Copeland "Anti-Kickback" Act as supplemented in Department of Labor regulations. 5. Compliance with the Davis-Bacon Act as supplemented by Department of Labor regulations. 6. Compliance with Sections 103 and 107 of the Contract Work Hours and Safety Standards Act as supplemented by Department of Labor regulations. 7. Notice of awarding agency requirements and regulations pertaining to reporting. 8. Notice of awarding agency requirements of and regulations pertaining to patent rights with respect to any discovery or invention which arises or is developed in the course of or under such contract. 9. Awarding agency requirements and regulations pertaining to copyrights and rights in data. 10. Access by the grantee, the subgrantee, the Federal grantor agency, the Comptroller General of the United States, or any of their duly authorized representatives to any books, documents, papers, and records of the contractor which are directly pertinent to that specific contract for the purpose of making audit, examination, excerpts, and transcriptions. 11. Retention of all required records for three years after grantees or subgrantees make final payments and all other pending matters are closed. 12. Compliance with all applicable standards, orders, or requirements issued under Section 306 of the Clean Air Act, section 508 of the Clean Water Act and Environmental Protection Agency regulations. 13. Mandatory standards and policies relating to energy efficiency which are contained in the state energy conservation plan issued in compliance with the Energy Policy and Conservation Act.