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1. $168,386 SID Bond 348 Series 2025AUNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF FLATHEAD CITY OF KALISPELL CITY OF KALISPELL SPECIAL IMPROVEMENT DISTRICT BOND (SPECIAL IMPROVEMENT DISTRICT NO.348 (GREEN ACRES ACOMMUNITY IMPROVEMENT)), SUBORDINATE LIEN TAXABLE SERIES 2025A No. R-1 $168,386 Dated: August 27, 2025 FOR VALUE RECEIVED, the City of Kalispell, Montana (the "City"), a duly organized and existing municipal corporation in Flathead County, Montana, acknowledges itself to be specially indebted and hereby promises to pay to the Department of Natural Resources and Conservation of the State of Montana (the '*DNRC"), or its registered assigns, solely out of available funds in the District Account (the "District Account"), the principal sum equal to the sum of the amounts entered on Schedule A attached hereto under "Total Amount Advanced," with interest on each such amount from the date such amount is advanced hereunder at the rate of two percent (2.00%) per annum on the unpaid balance until paid, together with an Administrative Expense Surcharge and a Loan Loss Reserve Surcharge on the outstanding principal amount of this Series 2025A Bond from the date of each advance of principal, each at the rate of twenty- five hundredths of one percent (0.25%) per annum, all subject to the effect of the immediately following paragraph. Principal, interest, Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall be payable in semiannual installments payable on each January i and July 1 (each a "Loan Repayment Date") commencing with the Payment Date that is the first to occur following delivery by the DNRC to the City of a statement that the City's obligation to repay the principal amount of the 2025A Loan is not forgiven and ending on July 1, 2045, all as described in the Resolution (as hereinafter defined), subject to earlier redemption. Each installment shall be in the amount set forth opposite its due date in Schedule B attached hereto under "Total Loan Payment." The portion of each such payment consisting of principal, of interest, of Administrative Expense Surcharge, and of Loan Loss Reserve Surcharge shall be as set forth in Schedule B hereto. Upon each disbursement of 2025A Loan, the DNRC shall enter (or cause to be entered) the principal amount advanced on Schedule A under ``Advances" and the total amount advanced under the Resolution, including such advance, under "Total Amount Advanced." The DNRC shall prepare Schedule B and any revised Schedule B, or cause Schedule B and any revised Schedule B to be prepared, as provided in the Resolution, and the final Schedule B will reflect repayments under the Resolution. Schedule B shall be calculated and recalculated on a level debt service basis assuming an interest rate of 2.50% per annum. Past -due payments of principal and interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall bear interest at the rate of ten percent (10.00%) per annum, until paid. Interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall be calculated on the basis of a 360-day year comprising 12 months of 30 days each. All payments under this Series 2025A Bond shall be made to the registered holder of this Series 2025A Bond, at its address as it appears on the Bond register, in lawful money of the United States of America. NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SERIES 2025A BOND, IN THE EVENT THAT THE CITY TIMELY DELIVERS A COMPLIANCE CERTIFICATE AND REQUEST (AS DEFINED IN THE RESOLUTION) IN FORM AND SUBSTANCE SATISFACTORY TO THE DNRC AND THE DNRC IN RESPONSE THERETO SUPPLIES TO THE CITY A FORGIVENESS STATEMENT, THEN THEREUPON INTEREST SHALL BE DEEMED TO ACCRUE ON THE PRINCIPAL ON THIS SERIES 2025A BOND FROM THE DATE OF EACH ADVANCE AT THE RATE OF ZERO PERCENT (0.00%) PER ANNUM AND THE CITY' S OBLIGATION TO REPAY PRINCIPAL ADVANCED HEREUNDER SHALL BE FORGIVEN, AND THE CITY SHALL HAVE NO OBLIGATION TO REPAY THE DNRC OR ITS REGISTERED ASSIGNS ANY AMOUNTS ADVANCED HEREUNDER OR INTEREST OR ANY SURCHARGE THEREON. THIS SERIES 2025A BOND SHALL THEREUPON BE MARKED "CANCELLED" AND RETURNED BY THE HOLDER TO THE CITY, AND THIS SERIES 2025A BOND SHALL NO LONGER CONSTITUTE AN OBLIGATION OF THE CITY OR OF THE SYSTEM (AS HEREINAFTER DEFINED). IN ADDITION, UNTIL THE DELIVERY OF A DETERMINATION STATEMENT BY THE DNRC TO THE CITY, THE OBLIGATION FO THE CITY TO REPAY THE OUTSTANDING PRINCIPAL AMOUNT HEREOF SHALL BE DEFERRED UNTIL THE PAYMENT DATE FIRST OCCURRING AFTER DELIVERY OF A NONCOMPLIANCE STATEMENT AND INTEREST SHALL BE DEEMED TO ACCRUE ON THE PRINCIPAL OF THIS SERIES 2025A BOND FROM THE DATE OF EACH ADVANCE UNTIL DELIVERY OF SUCH NONCOMPLIANCE STATEMENT AT THE RATE OF ZERO PERCENT (0.00%) PER ANNUM. This Series 2025A Bond is one of an issue of Special Improvement District Bonds (Special Improvement District No. 348 (Green Acres Community Improvement)), Series 2025 Bonds of the City authorized to be issued in one or more series from time to time, and constitutes a series in the maximum authorized principal amount of $168,386 (the "Series 2025A Bond"). The Series 2025A Bond is issued to finance a portion of costs of Local sewer improvements (the "Improvements") to benefit the property located at 1721 South Woodland Drive in the City ("Green Acres Community") and to pay costs of issuance of the Series 2025 Bands (as defined herein). The Series 2025A Bond is issued pursuant to and in full conformity with the Constitution and laws of the State of Montana thereunto enabling, including Montana Code Annotated, Title 7, Chapter 7, Part 44 and 45, as amended, and a Resolution No. 6274 duly adopted by the City Council of the City on August 4, 2025 (the "Resolution"). Terms used with initial capital letters but not defined herein have the meanings given to them in the Resolution. This Series 2025A Bond is issuable only as a single, fully registered bond. This Series 2025A Bond is issued as a Subordinate Obligation payable out of District Fund. Simultaneously herewith, the City is issuing its $175,000 Special Improvement District Bonds (Special Improvement District No. 348 (Green Acres Community Improvement)), Tax -Exempt Series 2025B (the "Series 2025B Bond," and together with the Series 2025A Bond, the "Series 2025 Bonds"), which is payable from the District Fund. Following the 2025B First Advance, the total amount of each advance will be split equally between the Series 2025A Bond and the Series 2025B Bond, until the entire amount of the Series 2025A Bond is advanced. Reference is made to the Resolution for a more complete statement of the terms and conditions upon which this Series 2025A Bond has been issued, the conditions upon which the Resolution may be amended, the rights, duties and obligations of the City, and the rights of the owners of this Series 2025A Bond. The City may prepay the principal of this Series 2025A Bond only if (i) a Determination Statement has been delivered, (ii) it obtains the prior written consent of the DNRC thereto, and (iii) no Loan Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent. Any prepayment permitted by the DNRC must be accompanied by payment of accrued interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the amount of principal prepaid. If this Series 2025A Bond is prepaid in part, such prepayments shall be applied to principal payments in inverse order of maturity. This Series 2025A Bond, including interest and any premium, are payable solely from the District Fund and do not constitute a debt of the City within the meaning of any constitutional or statutory limitation or provision. 2 The City may deem and treat the person in whose name this Series 2025A Bond is registered as the absolute owner hereof, whether this Series 2025A Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and the City shall not be affected by any notice to the contrary. This Subordinate Series 2025A Bond may be transferred as hereinafter provided. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has duly authorized and will forthwith construct and complete the Improvements to the Green Acres Community described in the Resolution, that it will levy special assessment against property located in the District; that all acts, conditions and things required by the Constitution and laws of the State of Montana and the ordinances and resolutions of the City to be done, to exist, to happen and to be perfon-ned in order to make this Series 2025A Bond a valid and binding special obligation of the City according to its terms have been done, do exist, have happened and have been perfon-ned as so required; and that this Series 2025A Bond and the premium, if any, and interest hereon are payable solely out of the District Fund and do not constitute a debt of the City within the meaning of any constitutional or statutory limitation or provision and the issuance of this Series 2025A Bond does not cause either the general or the special indebtedness of the City to exceed any constitutional or statutory limitation. (The remainder of this page is intentionally left blank) FORM OF ASSIGNMENT For value received, the Series 2025A Bond is hereby transferred and assigned by the undersigned holder, without recourse, to on this day of By: (Authorized Signature) For: (Holder) 0 SCHEDULE OF AMOUNTS ADVANCED Total Amount Date Advances Advanced Notation Made SCHEDULE Date Principal Interest Administrative Expense Surcharge Loan Loss Reserve Surcharge Total Loan Payment