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Resolution 5267 - Bond - Fire TruckRESOLUTION NO, 5267 A RESOLUTION AWARDING THE SALE OF GENERAL FUND BOND, SERIES 2008-0 FIXING ITS FORM AND SPECIFICATIONS; DIRECTING ITS EXECUTION AND DELIVERY; AND PROVIDING FOR ITS PAYMENT BE IT RESOLVED by the City Council (the "City Council") of the City of Kalispell, Flathead County, Montana (the "City") as follows: Section 1. Sale of Bond. 1.01. Statutory Authorization. Pursuant to Montana Code Annotated, Section 7-7-4104, as amended (the "Act"), a municipality such as the City is authorized to incur an obligation for any purpose authorized by law, including the purposes set forth in Montana Code Annotated, Section 7-7W4101, that is a general obligation of the municipality secured by the general fund of the municipality, but not the taxing power of the municipality. obligations issued by a municipality pursuant to the Act may be issued without submitting the question of incurring the indebtedness to the electors and may be sold in a public or private sale on, on terms and at prices that the governing body of the municipality determines to be advantageous. The terms of the Act require that the obligations to be issued by a municipality may only be issued if: (i) the principal amount of the obligations to be incurred by the municipality does not exceed ten percent (10%) of the general fund budget of the municipality in each of the two preceding fiscal years; (i i) at the time the obligations are incurred, the debt service in the current or any future fiscal year on the obligations and any other outstanding obligations issued pursuant to the Act does not exceed two percent (2%) of the revenues deposited in the general fund of the municipality in each of the two immediately preceding fiscal years; and (iii) the term of the obligations does not exceed twenty (20) years. 1.02. Issuance of the Bond and Compliance with Conditions of the Act. The City is issuing its General Fund Bond, Series 2008 (the "Bond"), in original aggregate principal amount of $575,000, for the purpose of paying a portion of the costs of (i) a fire truck for the City (the "Project"), and (ii) the costs of issuance of the Bond. The Bond will be a general obligation of the City to which the general credit of the City is pledged, provided, however that the Bond is not secured by the taxing power of the City. By this resolution, the City grants a lien on all revenue collected and deposited in the general fund of the City (the "General Fund"), to the extent such funds are necessary to pay debt service on the Bond, subject to any prior pledges of such funds by the City. The City represents that it will meet the conditions of the Act as follows: (a) The principal amount of the Bond will not exceed ten percent (10%) of the General Fund budget of the City for the immediately two preceding fiscal years, i.e., $1,114,282 for the fiscal year ended June 30, 2006 and $1,117,1 68 for fiscal year ended June 30, 2007. The principal amount of the Bond when issued by the City also does not exceed ten percent (10%) of the General Fund budget of the City for the fiscal year ended June 30, 2008 ($1,101,472 (estimated)). (b) The maximum annual debt service due on the Bond in any year, plus debt service on other obligations previously issued by the City pursuant to the Act, does not exceed two percent (2%) of the revenue deposited in the General Fund of the City for the fiscal year ended June 30, 2006 ($176,253) and the fiscal year ended June 30, 2007 ($196,002). The maximum amount of debt service due on the Bond in any year, plus debt service on other obligations previously issued by the City pursuant to the Act, also does not exceed two percent (2%) of the revenue deposited in the General Fund of the City for the fiscal year ended June 30, 2008 ($207,094 (estimated)). (c) The final maturity of the Bond (March 1, 2018) is less than twenty (20) years from the date of issue of the Bond. 1.03. Award to the Purchaser and Interest Rates. The proposal of Rocky Mountain Bank, Kalispell, Montana (the "Purchaser"), to purchase the Bond of the City is found and determined to be a reasonable offer and advantageous to the fiscal operation of the City. The proposal of the Purchaser to purchase the Bond is accepted, the proposal being to purchase the Bond for a price of par at an interest rate equal to 3.95 % per annum. 1.04. Terms and Principal Amounts of the Bond,. The Bond shall be dated February 28, 2008 or such later date as determined by the City, and shall be issued as a single bond numbered R-1. The Bond shall be issued in the original aggregate principal amount not to exceed $575,000. The Bond shall bear interest at a rate of 3.95 % per annum and shall be payable as set forth in Section 2.02 hereof, computed on the basis of a 360-day year of twelve thirty -day months. The Bond shall mature on March 1, 2018. The Bond is subject to optional redemption, in advance of stated maturity, in whole or in part, on any business day, at a price of par plus accrued interest on the amount so redeemed. 1.05. MandatoLy Sinking Fund Redemption. (a) The Bond maturing on March 1, 2018 is subject to mandatory sinking fund redemption on March 1 and September 1 of the following years in the following principal amounts: Payment Date Principal Amount Payment Date Principal Amount September 1, 2008 $23,500 September 1, 2013 $29,000 March 1, 2009 247000 March 1, 2014 29,500 September 1, 2009 24,500 September 1, 2014 305000 March 1, 2010 25,000 March 1, 2015 30,500 September 1, 2010 25,500 September 1, 2015 31,000 March 1, 2011 269000 March 1, 2016 32,000 September 1, 2011 26,500 September 1, 2016 32,500 March 1, 2012 27,500 March 1, 2017 33,000 September 1, 2012 28,000 September 1, 2017 34,000 March 1, 2013 28,500 March 1, 201.8* 34,500 * Maturity Section 2. Re- istration and Pa ment. 2.01. Registered Form. The Bond will be issued only in fully registered form. The interest thereon and, upon surrender of the Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2 2.02. Dates Interest Payment Dates. The Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bond will be payable on March l and September 1 of each year, commencing September 1, 2008, to the registered owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 2.03. Registration. The City hereby appoints the Finance Director of the City (the "Finance Director") as the initial Registrar for the Bond. The City reserves the right to appoint a successor bond registrar, transfer agent or paying agent, as authorized by the Model Public obligations Registration Act of Montana (the `Bond Registration Act"). This Section 2.03 shall establish a system of registration for the Bond as defined by the Bond Registration Act. The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Re ister. The Registrar shall keep a bond register in which the Registrar provides for the registration of ownership of the Bond and the registration of transfers and exchanges of the Bond entitled to be registered, transferred or exchanged. (b) Transfer of the Bond. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchan e of Bond. when a Bond is surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. A Bond surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Im ro r or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes and payments so made to registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. 3 (g) Taxes, Fees, and Charges. For every transfer of a Bond or exchange of a Bond (except for an exchange upon the partial redemption of any Bond pursuant to Section 2.05 hereof), the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated Lost Stolen or Destroyed Bond. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond destroyed, stolen, or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both the City and the Registrar shall be named as obligees. Any Bond so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or such Bond has been called for redemption in accordance with its terms, it shall not be necessary to issue a new Bond prior to payment. (i) Redemption. In the event any Bond is called for redemption, notice thereof identifying the Bond to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04 Execution, Authentication and Delivery. The Bond will be prepared under the direction of the City Clerk and executed on behalf of the City by the signatures of the Mayor and the City Clerk, provided that those signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bond ceases to be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bond has been so prepared, executed and authenticated, the Bond will be delivered to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.05. Temporary Bond. The City may elect to deliver in lieu of a printed definitive Bond one or more typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of a definitive Bond, the temporary Bond will be exchanged therefor and cancelled. 4 Section 3. Form of Bond. 3.01. Execution of the Bond. The Bond will be printed or typewritten in substantially the form set forth in Exhibit A attached hereto and made a part hereof. 3.02. Approving,.Legal Oinion. The City Manager will obtain a copy of the proposed approving legal opinion of Kennedy &. Graven, Chartered, P.C., Minneapolis, Minnesota, ("Bond Counsel") which will be complete except as to dating thereof and will cause the opinion to accompany the Bond. Section 4. Payment; Security; Pledszes and Covenants. 4.01. General Fund Obligations. The Bond is a general obligation of the City payable from the General Fund of the City. The general credit of the City is irrevocably pledged for the payment of both the principal of and interest on the Bond as they become due. The Bond is not secured by a pledge of the C ity' s taxing power and the City is not obligated to levy taxes for the payment of principal of and interest on the Bond. The revenues of the General Fund of the City are anticipated to be sufficient to make the principal and interest payments on the Bond. The City has granted a lien on the revenues of the General Fund to the extent that such amounts are required to pay debt service on the Bond. The principal of and interest on the Bond is payable from any funds of the City legally available for the payment, including funds in its General Fund. The City has granted a lien on revenues in its General Fund for the payment of the Bond, but has not otherwise provided for the segregation of such revenues as security for the payment of the Bond. 4.02. Payment of Deficiencies, if Any. If on any date that the payment of principal of or interest on the Bond is due and the amount on hand in the Debt Service Account is insufficient for the payment thereof, this City Council shall forthwith appropriate to the Debt Service Account sufficient legally available money of the City to make good the deficiency. 4.03 NecessaLy Funds to be Appropriated. As security for the Bond, the City hereby covenants and agrees to appropriate each fiscal year during the term of the Bond from its General Fund an amount sufficient for the payment of the principal of and interest on the Bond due in such fiscal year. Such appropriated funds shall be credited to the Debt Service Account. It is acknowledged and agreed that the City has not otherwise provided for the segregation of such revenues as security for the payment of the Bond. Section 5. Funds and Accounts. 5.01, Debt Service Account. For the convenience and proper administration of the money to be borrowed and repaid on the Bond, and to provide adequate and specific security for the Purchaser and holders from time to time of the Bond, there is hereby created a special fund to be designated the Series ZOOS General Fund Bond Debt Service Account (the "Debt Service Account") to be administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Debt Service Account will be maintained in the manner herein specified until the Bond has been paid. The City irrevocably appropriates to the Debt Service Account: (i) any amounts of the Bond in excess of the initial amounts deposited in the Project Fund, if any; (ii) all funds to be credited and paid in accordance with Section 5.03; (iii) all amounts to be appropriated and transferred in accordance with Section 4.03; (iv) all income derived from the investment of amounts on deposit in the Debt Service Account, if any; and (v) all other amounts as the City may deposit in the Debt Service Account from time to time, if any. 5 5.02. Debt Service Account Covenants. The money in the Debt Service Account will be used solely to pay the principal of and interest on the Bond. No portion of the proceeds of the Bond will be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (i) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bond was issued, and (ii) in addition to the above, in an amount not greater than the lesser of five percent (5%) of the proceeds of the Bond. In addition, the proceeds of the Bond and money in the Debt Service Account will not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Bond to be federally guaranteed within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code"). 5.03. 2008 Fire Truck Capital Project Fund. There is hereby created a special fund to be designated as the "2008 Fire Truck Capital Project Fund" (the "Project Fund"), to be held and administered by the Finance Director separate and apart from all other funds of the City. The City irrevocably appropriates to the Project Fund: (i) proceeds of the sale of the Bond in the amount of $575,000; and (ii) all income derived from the investment of amounts on deposit in the Project Fund. The Project Fund shall be used solely by the City to pay costs of the Project, including, but not limited to costs of issuance of the Bond. Upon completion and payment of all costs of the Project, any remaining proceeds of the Bond in the Project Fund, but not later than January 31, 2009, shall be transferred and credited to the Debt Service Account. Section 6. Authentication of Transcript. 6.01. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and Bond Counsel, certified copies of proceedings and records of the City relating to the Bond and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bond, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. Section 7. Tax Covenants. 7.01. Tax-Exem t Bond. The City covenants and agrees with the holders from time to time of the Bond that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bond to become subject to taxation under the Code, and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bond. 7.02. No Rebate Re wired. (a) The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bond under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bond, and the rebate of excess investment earnings to the United States if the Bond (together with other obligations reasonably expected to be issued in calendar year 2008) exceed the small -issuer exception amount of $5,000,000. (b) For purposes of qualifying for the small issuer exception under Section 148(f)(4)(D) of the Code and the applicable Treasury Regulations, the City finds, determines and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the City (and all subordinate entities of the City) during the calendar year 2008 (the year in which the Bond is issued and outstanding) is not reasonably expected to exceed $5,000,000. (c) 1n the event that the City does not qualify for the small issuer exception, the City also expects to qualify for the eighteen (18) month spending exception. The City will allocate the gross proceeds of the Bond to expenditures with respect to the Project in accordance with the following schedule: (i) at least fifteen percent (15%) within six (6) months from the date of issuance of the Bond; (ii) at least sixty percent (60%) within twelve (12) months from the date of issuance of the Bond; and (iii) one hundred percent (100%) within eighteen (18) months of the date of issuance of the Bond. Therefore, the City expects to qualify for a spending exception with respect to the rebate requirements under Section 148(f) of the Code and does not expect to be required to make rebate payments to the United States pursuant to the terms of Section 148(f) of the Code and the applicable Treasury Regulations. 7.03. Not Private Activity Bond. The City further covenants not to use the proceeds of the Bond or to cause or permit them or any of them to be used, in such a manner as to cause the Bond to be a "private activity bond" within the meaning of Sections 103 and 1.41 through 150 of the Code. 7.04. Qualified Tax -Exempt Obligations. In order to qualify the Bond as a "qualified tax- exempt obligation" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bond is not a "private activity bond" as defined in Section 141 of the Code, (b) the City designates the Bond as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity Bond that are not qualified 501(c)(3) Bond) which will be issued by the City (and all subordinate entities of the City) during calendar year 2008 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2008 have been designated for purposes of Section 265(b)(3) of the Code. 7.05. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 8. Re ortin . 8.01. The City hereby agrees to provide or cause to be provided at least annually to the Purchaser financial information (including the audited financial statements of the City) and operating data (the "Annual Financial Information"), within two hundred seventy (270) days after the end of the City's preceding fiscal year. Section 9. Defeasance. 9.01. When all Bond and all interest thereon, have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bond will cease, except that the pledge of the general credit (but not the taxing power) of the City for the prompt and full payment of the principal of and interest on the Bond will remain in full force and effect. The City may discharge the Bond on any date by depositing with the Registrar on or before that date a sum, which along with interest 7 earnings thereon, shall be sufficient for the payment in full of the Bond. If the Bond is not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. PASSED AND APPROVED BY THE CITY COUNCIL, OF THE CITY OF KALISPELL THIS 19TH DAY OF FEBRUARY, 2008. Pamela B. Kennedy Mayor ATTEST: Theresa White City Clerk 0 No. R-1 Date EXHIBIT A FORM OF BOND UNITED STATES OF AMERICA STATE OF MONTANA COUNTY of FLATHEAD CITY of KALISPELL GENERAL FUND BOND SERIES 2008 Date of Maturity original Issue 3.95% March 1., 2018 February 28, 2008 Registered owner: Rocky Mountain Bank $575,000 Principal Amount: FIVE HUNDRED SEVENTY-SEVEN THOUSAND FIVE HUNDRED AND 00/ 100 Dollars The City of Kalispell, Montana, a duly organized and existing municipal corporation in Flathead County, Montana (the "City"), acknowledges itself to be indebted and for value received hereby promises to pay to the Registered owner specified above or registered assigns, the principal sum of $575,000 on the maturity date specified above without option of prior payment, with interest thereon from the date hereof at the annual rate specified above, payable March 1 and September 1 in each year, commencing September 1, 2008, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by City Director of Finance as Registrar, Paying Agent, Transfer Agent. and Authenticating Agent, or its designated successor under the Resolution described below. This Bond is the single bond of an issue in the original aggregate principal amount of $575,000 all of like original issue date and tenor, except as to number, maturity date, and interest rate, issued pursuant to Resolution No. adopted by the City Council on February 1.9, 2008 (the "Resolution"), for the purpose of paying a portion of the costs of (i) a new fire truck for the City (the "Project"), and (ii) the costs of issuance of the Bond. The Bond has been issued by the City pursuant to and in full conformity with the Constitution and laws of the State of Montana, including Montana Code Annotated, Section 7-7-4104, as amended, and the principal hereof and interest hereon are payable from the general credit of the City from revenues collected and deposited in the General Fund of the City. The City has granted a lien on all revenue collected and deposited in the General Fund, subject to prior liens, for payment of debt service on the Bond. However, the Bond is not secured by the taxing power of the City. The Bond is subject to optional redemption, in advance of stated maturity, in whole or in part, on any business day, at a price of par plus accrued interest on the amount so redeemed. A-1 The City Council has designated the Bond as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), relating to disallowance of interest expense for financial institutions and within the $1 o million limit allowed by the Code for the calendar year of issue. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Registrar by manual signature of one of its authorized representatives. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bond of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Registrar may deem and treat the person in whose name this Bond is registered - as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the charter of the City and the Constitution and laws of the State of Montana to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, statutory or charter limitation of indebtedness. AW2 IN WITNESS WHEREOF, the City of Kalispell, Flathead County, Montana, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth below. Dated: February 28, 2008 (SEAL) CITY OF KALISPELL, MONTANA By: (facsimile signature) Mayor By: _ facsimile signature) City Clerk CERTIFICATE OF AUTHENTICATION This is one of the Bond delivered pursuant to the Resolution mentioned within. CITY OF KALISPELL, MONTANA City Finance Director A-3 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFIMIN ACT Custodian TEN ENT -- as tenants under Uniform Gifts or by entireties Transfers to Minors (Cush JT TEN --- as joint tenants with right of survivorship and Act . . . . . . . . . . . . not as tenants in common (State) (Minor) Additional abbreviations may also be used though not in the above list. A-4 ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ("STAMP" ), the Stock Exchange Medallion Program C"SEMP"), the New York Stock Exchange, Inc. Medallion Signatures Program ("MSP") or other such "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: [Include information for all joint owners if this Bond is held by joint account.] Please insert social security or other identifying number of assignee A-5 PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last Bond below. Signature of Date of Registration Registered owner officer of the Registrar February 28, 2008 KA225-6 (BWJ) 325536v4 Rocky Mountain Bank Federal ID # [End of Form of Bond] A-f