Specimen BondUNITED STATES OF AMERICA
STATE OF MONTANA
FLATHEAD COUNTY
CITY OF KALISPELL
SPECIAL IMPROVEMENT DISTRICT NO. 345 BOND
(DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM),
SERIES 2014
No. R-1
M
FOR VALUE RECEIVED, THE CITY OF KALISPELL, MONTANA (the "City"), a
duly organized municipal corporation and political subdivision of � the State' of Montana,
acknowledges itself to be specially indebted and, for value received, hereby promises to pay to
the Department of Natural Resources and Conservation of the State of Montana (the "DNRC"),
or its registered assigns, solely from the Special Improvement DisWe'',t No. 345 Fund, 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 2.00%;;per annum on the unpaid balance until paid. In
addition, the City shall pay, solely from said source, an Administrative Expense Surcharge and a
Loan Loss Reserve Surcharge on the outstanding ,principal amount of this Bond at the rates of
seventy-five hundredths of one percent (0.75%) and twenty-five hundredths of one percent
(0.25%), respectively, per annum: ;, Interest and Administrative Expense Surcharge and the Loan
Loss Reserve Surcharge shall be payable in semiannual installments payable on each January 1
and July 1 (each a "Loari� Repaymeent Date"), 'commencing July 1, 2014. Principal shall be
payable on the dates setlorth in Schedule -B hereto. 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, the portion consisting of interest, the
portion consisting of Administrative Expense Surcharge, and the portion consisting of Loan Loss
Surcharge shall be as set forth in Schedule B hereto. Upon each disbursement of 2014 Loan
amounts to the City pursuant to the Resolution described below, the DNRC shall enter (or cause
to be entered) the amount advanced on Schedule A under "Advances" and the total amount
advanced under the Resolution (as hereinafter defined), including such disbursement, under
"Total Amount Advanced." The DNRC shall prepare Schedule B and any revised Schedule B,
or cause Schedule Band any revised Schedule B to be prepared, as provided in Section 5.1 of the
Resolution. Schedule B shall be calculated and recalculated on a level debt service basis
assuming an interest rate of 3.00% per annum. Past -due payments of principal and interest and
Administrative Expense Surcharge and the Loan Loss Reserve Surcharge shall bear interest at
the rate of ten percent (10.00%) per annum, until paid. Interest and Administrative Expense
Surcharge and Loan Loss Reserve Surcharge shall be calculated on the basis of a 360-day year
comprising 12 months of 30 days each. All payments under this Bond shall be made to the
registered holder of this Bond, at its address as it appears on the Bond register, in lawful money
of the United States of America.
This Bond is the City's "Special Improvement District No. 345 Bond (DNRC Water
Pollution Control State Revolving Loan Program), Series 2014 (the "Series 2014 Bond"), issued
under Resolution No. 5659, adopted by the City Council of the City on February 3, 2014 (the
"Resolution"), to which Resolution, copies of which are on file with the City, reference is hereby
made for a description of the nature and extent of the security, the respective rights thereunder of
the Owners of the Series 2014 Bond and the City and the terms upon which the Series 2014
Bond are to be issued and delivered. Terms used with initial capital letters but not defined herein
have the meanings given them in the Resolution. The Series 2014 Bond is issued in the
maximum authorized principal amount of $242,000. The Series 2014 Bond is issuable only as a
single, fully registered bond. The Series 2014 Bond is issued by the City for the purpose of
financing or reimbursing the City for a portion of the cost of the acquisition and construction of
certain local improvements within Special Improvement District No ,345 ;Rf the 'City (the
"District"), thereby assisting activities in the public interest and for the public welfare`of the
City.
The Series 2014 Bond is issued pursuant to and in full compliance with the Constitution
and laws of the State of Montana, particularly Montana Code Anaidtated, Title 7, Chapter 12,
Parts 41 and 42, as amended (the "Act"), and pursuant to the Resolution. ,This Bond is payable
from the collection of a special tax or assessment levied upon all assessable real property within
the boundaries of the District, in an aggregate principal amount of not less than the aggregate
principal amount of the Series 2014 Bond to be paid from special` assessments, except as such
amount may be reduced or increased in accordance with provisions of Montana law and except
that the payment of principal of and interesf`on the Series 2014 Bond due July 1, 2014 is from
other funds of the City. Such assessments constitute a lien against the assessable real estate
within the District, and the Series-'2014 Bond are not ;general obligations of the City. The City
has established in the District Fund, and funded with certain proceeds of the Series 2014 Bond, a
District Reserve Account (the "Reserve Account"), from which moneys are to be applied to pay
principal of and interest on the Series 2014 Bond in the event collections of special assessments
are insufficient therefor: There'is no obligation for the City to replenish the Reserve Account if
funds are withdrawn 'therefrom". „
The City has also validly, established a Special Improvement District Revolving Fund (the
"Revolving Fund") to secure the payment of certain of its special improvement district bonds,
including the Series 2014 Bond. The City has also agreed, to the extent permitted by the
Enabling Act, to issue:orders annually authorizing loans or advances from the Revolving Fund to
the District Fund, in amounts sufficient to make good any deficiency in the District Fund to pay
principato, -or interest`'on the Series 2014 Bond after depletion of the Reserve Account, to the
extent that funds are available in the Revolving Fund, and to provide funds for the Revolving
Fund by annually making a tax levy or loan from its general fund in an amount sufficient for that
purpose, subject to the limitation that no such tax levy or loan may in any year cause the balance
in the Revolving Fund to exceed five percent of the principal amount of the City's then
outstanding special improvement district bonds secured thereby and the durational limitations
specified in the Enabling Act.
The Series 2014 Bond is subject to mandatory redemption on any interest payment date
if, after paying all principal and interest then due on the Series 2014 Bond, there are funds to the
credit of the Special Improvement District No. 345 Fund of the City, from the prepayment of
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assessments levied in the District or from surplus proceeds of the Series 2014 Bond not required
to pay costs of the 2013 Project, for the redemption thereof, and in the manner provided for the
redemption of the same, as further provided in the Resolution. The Series 2014 Bond is subject
to redemption at the option of the City from other sources of funds available therefor on any
interest payment date, subject, however, to the terms and conditions specified in the Resolution.
The redemption price is equal to the principal amount of the Series 2014 Bond or portions
thereof to be redeemed plus interest accrued thereon to the date of redemption. Any prepayment
must be accompanied by payment of accrued Administrative Expense Surcharge and Loan Loss
Reserve Surcharge to the date of prepayment on the amount of principal prepaid. The date of
redemption shall be fixed by the City Finance Director, who shall give notice by'frst class mail,
postage prepaid, to the owner or owners of such Series 2014 Bond at their addresses:,shown on
the bond register, of the Series 2014 Bond or portions thereof to be,redeemed and the date on
which payment will be made, which date shall not be less than thirtyJ30) days after tie=cute of
mailing of notice, on which date so fixed interest shall cease. On the date so fixed interest on the
Series 2014 Bond or portions thereof so redeemed shall cease to accrue.
The Series 2014 Bond has been designated by City, as "qualified tax-exempt obligations"
pursuant to Section 265 of the Internal Revenue Code of 1986? as amended.
If provision is made for the payment of principal of and interest on this Series 2014 Bond
in accordance with the Resolution, this Series 2014 Bond shall no longer be deemed outstanding
under the Resolution, shall cease to be entitled to the benefits of the Resolution, and shall
thereafter be payable solely from the funds provided for payment.
The City may deem ar
registered as the absolute owner
purpose of receiving payment a
any notice to the contrary. The ;
IT IS I
things required
happened and 1
the resolutions`<
the person in whose name this Series 2014 Bond is
whether this Series 2014 Bond is overdue or not, for the
all other purposes, and the City shall not be affected by
014 Bond may be transferred as hereinafter provided.
D, RECITED, COVENANTED AND AGREED that all
it to the issuance of this Bond have been properly done,
manner prescribed by the laws of the State of Montana and
City relating to the issuance thereof.
IN WITNESS WHEREOF, the City of Kalispell, Montana, by its governing body, has
caused this Bond to be executed by the signatures of the Mayor, the City Manager and the City
Finance Director, and has caused this Bond to be dated as of the 15th day of May, 2014.
CITY OF KALISPELL, MONTANA
By
Mayor
And
01
And
rice Director
F.
REGISTRATION AND TRANSFER
This Bond shall be fully registered as to both principal and interest. No transfer of this
Bond shall be valid unless and until (1) the registered holder of the Bond, or his duly authorized
attorney or legal representative, executes the form of assignment appearing on this Bond, and
(2) the City Finance Director of the City, as bond registrar (the "Registrar"), has duly noted the
transfer on the Bond and recorded the transfer on the Registrar's registration books. The City
shall be entitled to deem and treat the person in whose name this Bond is registered as absolute
owner thereof for all purposes, notwithstanding any notice to the contrary. Payments on account
of the Bond shall be made only to the order of the registered holder thereof, and all such
payments shall be valid and effectual to satisfy and discharge the City's liability upon the Bond
to the extent of the sum or sums so paid.
REGISTER
The ownership of the unpaid Principal Balance of this Bond, and the interest accruing
thereon is registered on the books of the City of Kalispell, Montana in the narrib of the registered
holder appearing on the first page hereof or as last noted below:
Name and Address Signature of
Date of Registration of Registered Holder City Finance Director
Department of Natural
Resources and Conservation
1625Ileventli Avenue
May 15, 2014 Helena, MT 59620
has
am(
date
THE FOLLOWING
REGISTRAR UPOI
The
transferred, on the books of
TO BE MADE ONLY BY THE BOND
ON OF EACH TRANSFER
)r of the City of Kalispell, Montana, acting as Bond Registrar,
the"City, on the date last noted below, ownership of the principal
st on this Bond to the new registered holder noted next to such
; ipal and interest theretofore paid.
Name of New Signature of
Registered Holder Bond Registrar
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SCHEDULE A
SCHEDULE OF AMOUNTS ADVANCED
Total Amount
Date Advances Advanced
05/15/2014
$242,000.00
$242,AAA .nn
Notation Made By
%I
Date Principal Interest
SCHEDULE B
Loan Loss
Administrative Reserve
Expense Surcharge Surcharge
Total Loan
Payment