HomeMy WebLinkAbout09-09-19 City Commission Packet Materials - A3. Res 5090, Form and Details of the General Obligation Bonds for the BPSC
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Kristin Donald, Finance Director
SUBJECT: Commission Resolution No. 5090- Determining the form and details of
General Obligation bonds, authorizing the execution and delivery, and
levying taxes for the payment.
MEETING DATE: September 9, 2019
AGENDA ITEM: Action
RECOMMENDATION: Approve Resolution No. 5090 – Determining the form and details,
authorizing the execution and delivery, and levying taxes for the payment thereof.
BACKGROUND:
In November 2018, the citizens of Bozeman approved the bond issuance for the building of the
Bozeman Public Safety Center. In May 2019, the City put out a request for proposals for
underwriting services for the bond issuance. Stifel, Nicolaus & Company were selected as
underwriter.
On August 12, 2019, the Commission Approved Resolution No. 5085, authorizing the issuance
and private negotiated sale of the $36,965,000 Million voter-approved Bozeman Public Safety
Center bonds.
On August 28, 2019, the bonds were offered for sale and a Bond Purchase Agreement was
executed by the Finance Director and Assistant City Manager Rosenberry, in accordance with
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the August 12, 2019 Resolution that authorized the issuance of the bonds. Through that offering,
the following bond par values and coupon rates were negotiated:
The bonds were sold at a net premium, with the true interest cost of the entire issuance at
2.099606%. This interest rate is nearly half of what we estimated it would be during our Public
Education campaigns last fall. One factor that assisted in achieving such a low rate was the
City’s recent bond rating upgrade by Moody’s Investor Service to AA1.
Some of the bonds were sold at a discount, and some were sold at a premium, based on the
underwriters best recommendations for marketing the bonds. This net premium totaled more
than $3,772,031. The net premium was used to bring down the principal amount of the bonds to
a par value of $34,405,000 pay for issuance costs and provide an additional $1 million for the
project fund. (Excess amounts in the project fund can be used to decrease debt service
payments.) Information on premium, coupon rate, and yield can be found on the Bond Pricing
Sheet attached in to this memo. The true interest cost of the bonds is 2.099606%
At the time of voter approval, we estimated the cost to a typical residence to be $101/year in
property taxes ($292,000 median home value). There were many variables involved in that
estimate that were subject to change: interest rates, median value of home, growth in our tax
base, etc. We estimated an average 4.04% interest rate and $36.9 million would be borrowed.
This sale’s final results are an interest rate of 2.09%, net premium received, and $34.4 million
Year Amount Rate Year Amount Rate
2020 990,000$ 2.00%2030 1,730,000$ 4.00%
2021 1,280,000$ 2.00%2031 1,800,000$ 4.00%
2022 1,305,000$ 2.00%2032 1,875,000$ 4.00%
2023 1,330,000$ 3.00%2033 1,950,000$ 4.00%
2024 1,370,000$ 4.00%2034 2,025,000$ 4.00%
2025 1,425,000$ 4.00%2035 2,110,000$ 2.25%
2026 1,480,000$ 4.00%2036 2,155,000$ 2.38%
2027 1,540,000$ 4.00%2037 2,205,000$ 2.38%
2028 1,600,000$ 4.00%2038 2,260,000$ 2.38%
2029 1,665,000$ 4.00%2039 2,310,000$ 2.50%
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borrowed. These favorable factors mean that City taxpayers will be repaying over $7.3 million
LESS for the project than was originally estimated.
Bond Principal Amount Interest Total Debt Service Estimated for BPSC Ballot
Education
$36,965,000.00
17,302,105.22
$54,267,466.80
Final BPSC Pricing
$34,405,000.00
12,490,545.84
$46,895,545.84
Total Savings
$ 7,371,920.96
Once this resolution is adopted, the bond closing can proceed on September 18, 2019. That
morning, the City will receive $38,073,816.40 (par amount and net premium, less issuance costs)
from the bond closing.
Adoption of this bond resolution requires the city to levy property taxes each year in an amount
sufficient to pay the annual debt service.
ALTERNATIVES: As suggested by the Commission
FISCAL EFFECTS: Once this resolution is adopted, the bond closing can proceed on
September 18, 2019. That morning, the City will receive $38,073,816.40 (par amount and net
premium, less underwriters discount) from the bond closing. This money will be deposited into
the Bozeman Public Safety Center Bond Fund for use in construction of the Center.
In the coming years, beginning with Fiscal Year 2020, the city is required to add the debt service
levy to our Tax Levy Resolution, in an amount sufficient to make the annual bond principal and
interest payments. The annual amount varies, but is approximately $990,000 to $2,310,000 per
year.
Updating for the known variables of interest rate on this bond sale and the growth in taxable
value and the updated median home of $354,000, this typical resident will see $71.48, for our
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previous median of $292,000 would be $59.62 in FY20. This first year is a partial payment and
the second year will be slightly higher with a full payment.
Attachment: Resolution No. 5090 Bond Purchasing Agreement 8.28.19 Report compiled on August 29, 2019
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RESOLUTION NO. 5090
RESOLUTION RELATING TO $34,405,000 GENERAL OBLIGATION BONDS, SERIES
2019; DETERMINING THE FORM AND DETAILS, AUTHORIZING THE EXECUTION
AND DELIVERY AND LEVYING TAXES FOR THE PAYMENT THEREOF
BE IT RESOLVED by the City Commission (the “Commission”) of the City of
Bozeman, Montana (the “City”), as follows:
Section 1
Authorization and Sale; Recitals.
1.01. Authorization. At an election duly called and held November 6, 2018, the electors
of the City authorized this Commission to issue and sell general obligation bonds of the City in
one or more series in the maximum principal amount of $36,965,000 for the purpose of paying,
with other available funds of the City, the costs of designing, constructing, equipping and
furnishing on City-owned land at the corner of East Oak Street and North Rouse Avenue a new
Bozeman Public Safety Center, to include the City’s fire station #1, police department
headquarters, municipal courts, prosecution, victim services, and other justice services, and
associated site improvements (the “Project”), and costs associated with the sale and issuance of
the bonds for the Project. This Commission has determined that it is in the best interests of the
City, upon the terms hereinafter set forth, to sell to Stifel, Nicolaus & Company, Incorporated, of
Denver, Colorado (the “Underwriter”), by private negotiated sale, its general obligation bonds in
the principal amount of $34,405,000, pursuant to Montana Code Annotated, Sections 7-7-4254
and 17-5-107, in order to pay a portion of the costs of the Project and costs associated with the
sale and issuance of such general obligation bonds.
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1.02. Purchase and Sale. The Underwriter and the City have entered into a Bond
Purchase Agreement, dated as of August 28, 2019, regarding the purchase and sale of general
obligation bonds of the City, to be denominated “General Obligation Bonds, Series 2019” (the
“Bonds”), in the aggregate principal amount of $34,405,000 at a purchase price of
$38,073,816.40 (representing the par amount of the Bonds plus net original issue premium of
$3,772,031.40 and less underwriter’s discount of $103,215.00). The Bonds bear interest at the
rates and mature on the dates and in the amounts and contain the further terms and conditions set
forth in this Resolution. The true interest cost of the Bonds is 2.099606%. The sale of the Bonds
to the Underwriter is hereby ratified and confirmed.
1.03. Recitals. All acts, conditions and things required by the Constitution and laws of
the State of Montana, including Montana Code Annotated, Title 7, Chapter 7, Part 42, as
amended, in order to make the Bonds valid and binding general obligations in accordance with
their terms and in accordance with the terms of this Resolution have been done, do exist, have
happened and have been performed in regular and due form, time and manner as so required.
The City has full power and authority to issue the Bonds.
The indebtedness to be evidenced by the Bonds, together with all other outstanding
general obligation indebtedness of the City, will not exceed 2.50% of the total assessed valuation
of taxable property of the City, determined as provided in Section 15-8-111, M.C.A., as
ascertained by the last assessment for state and county taxes.
Section 2
Bond Terms, Execution and Delivery.
2.01. Terms of Bonds. The Bonds shall be designated “General Obligation Bonds, Series
2019.” The Bonds shall be in the denomination of $5,000 each or any integral multiple thereof of
single maturities. The Bonds shall mature on July 1 in the years and amounts listed below, and
Bonds maturing in such years and amounts shall bear interest from date of original issue until paid
or duly called for redemption, at the rate per annum shown opposite such years and amounts, as
follows:
[See following page]
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Year Amount Rate Year Amount Rate 2020 $ 990,000 2.000% 2030 $1,730,000 4.000%
2021 1,280,000 2.000 2031 1,800,000 4.000
2022 1,305,000 2.000 2032 1,875,000 4.000
2023 1,330,000 3.000 2033 1,950,000 4.000 2024 1,370,000 4.000 2034 2,025,000 4.000 2025 1,425,000 4.000 2035 2,110,000 2.250
2026 1,480,000 4.000 2036 2,155,000 2.375
2027 1,540,000 4.000 2037 2,205,000 2.375
2028 1,600,000 4.000 2038 2,260,000 2.375 2029 1,665,000 4.000 2039 2,310,000 2.500
Interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months.
2.02. Registered Form, Interest Payment Dates. The Bonds shall be issuable only in fully
registered form, and the ownership of the Bonds shall be transferred only upon the bond register
of the City hereinafter described. The interest on the Bonds shall be payable on January 1 and July
1 in each year, commencing January 1, 2020. Interest on the Bonds shall be payable to the owners
of record thereof as such appear on the bond register as of the close of business on the 15th day of
the month immediately preceding each interest payment date, whether or not such day is a business
day. Interest on, and upon presentation and surrender thereof, the principal of each Bond shall be
payable by check or draft issued by or drawn on the Registrar described herein or, as appropriate,
by wire transfer.
2.03. Dated Date. Each Bond shall be originally dated as of September 18, 2019, and upon
authentication of any Bond the Registrar (as hereinafter defined) shall indicate thereon the date of
such authentication.
2.04. Registration. The City shall appoint, and shall maintain, a bond registrar, transfer
agent and paying agent (the “Registrar”). The effect of registration and the rights and duties of the
City and the Registrar with respect thereto shall be as follows:
(a) Register. The Registrar shall keep at its principal office a bond register in which
the Registrar shall provide for the registration of ownership of Bonds and the registration
of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged.
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(b) Transfer of Bonds. Upon surrender to the Registrar for transfer of any 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 shall
authenticate and deliver, in the name of the designated transferee or transferees, one or
more new Bonds of the same series of a like aggregate principal amount and maturity, as
the case may be, as requested by the transferor. The Registrar may, however, close the
books for registration of any transfer of any Bond or portion thereof selected or called for
redemption.
(c) Exchange of Bonds. Whenever any Bond is surrendered by the registered
owner for exchange, the Registrar shall authenticate and deliver one or more new Bonds
of the same series of a like aggregate principal amount, interest rate and maturity, as
requested by the registered owner or the owner’s attorney in writing.
(d) Cancellation. All Bonds surrendered upon any transfer or exchange shall be
promptly cancelled by the Registrar and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When any Bond is presented to the
Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that
the endorsement on such Bond or separate instrument of transfer is valid and genuine and
that the requested transfer is legally authorized. The Registrar shall 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 any Bond is at any time registered in the bond register as the absolute owner
of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving
payment of, or on account of, the principal of and interest on such Bond and for all other
purposes, and all such payments so made to any such registered owner or upon the owner’s
order shall be valid and effectual to satisfy and discharge the liability of the City upon such
Bond to the extent of the sum or sums so paid.
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(g) Taxes, Fees and Charges. For every transfer or exchange of Bonds (except for
an exchange upon the partial redemption of a Bond), 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 Bonds. In case any Bond shall become
mutilated or be lost, stolen or destroyed, the Registrar shall deliver a new Bond of the same
series 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 lost, stolen or destroyed, upon the payment of the reasonable expenses and charges
of the Registrar in connection therewith; and, in the case of a Bond lost, stolen or destroyed,
upon filing with the Registrar of evidence satisfactory to it that such Bond was lost, stolen
or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of 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. All Bonds so surrendered to
the Registrar shall be canceled by it and evidence of such cancellation shall be given to the
City. If the mutilated, lost, stolen or destroyed 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.
2.05. Appointment of Initial Registrar. The City hereby appoints U.S. Bank National
Association, in Salt Lake City, Utah, to act as registrar, transfer agent and paying agent (the
“Registrar”). 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,
Montana Code Annotated, Title 17, Chapter 5, Part 11, as amended (the “Registration Act”), but
the City agrees to pay the reasonable and customary charges of the Registrar for the services
performed.
2.06. Optional Redemption.
(a) Bonds with stated maturities in the years 2020 through 2029 are not subject to
optional redemption prior to their stated maturities. Bonds with stated maturities on or after July
1, 2030 are subject to redemption on July 1, 2029 and any date thereafter, at the option of the City,
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in whole or in part, and if in part from such stated maturities and in such principal amounts as the
City may designate in writing to the Registrar (or, if no designation is made, in inverse order of
maturities and within a maturity in $5,000 principal amounts selected by the Registrar by lot or
other manner it deems fair), at a redemption price equal to the principal amount thereof and interest
accrued to the redemption date, without premium.
(b) The date of redemption and the principal amount of the Bonds to be redeemed
shall be fixed by the City Manager who shall give notice thereof to the Registrar at least 45 days
prior to the redemption date. At least thirty days prior to the designated redemption date, the
Registrar shall cause notice of redemption to be mailed, by first class mail, or by other means
required by the securities depository, to the registered owners of each Bond to be redeemed at their
addresses as they appear on the bond register described in Section 2.04, but no defect in or failure
to give such notice shall affect the validity of proceedings for the redemption of any Bond not
affected by such defect or failure. The notice of redemption shall specify the redemption date,
redemption price, the numbers, interest rates, CUSIP numbers, and the maturity date of the Bonds
or portions thereof to be redeemed and the place at which the Bonds are to be surrendered for
payment. Official notice of redemption having been given as aforesaid, the Bonds or portions
thereof so to be redeemed shall, on the redemption date, become due and payable at the redemption
price therein specified and from and after such date (unless the City shall default in the payment
of the redemption price) such Bonds or portions thereof shall cease to bear interest.
2.07. Execution and Delivery. The Bonds shall be forthwith prepared for execution under
the direction of the City Clerk and shall be executed on behalf of the City by the signatures of the
Mayor, the City Manager and the City Clerk, provided that said signatures may be printed,
engraved or lithographed facsimiles thereof. The seal of the City need not be imprinted on or
affixed to any Bond. In case any officer whose signature or a facsimile of whose signature shall
appear on the Bonds shall cease to be such officer before the delivery thereof, such signature or
facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such officer had
remained in office until delivery. When the Bonds have been so executed by said City officers,
they shall be registered by the City Clerk in accordance with Montana Code Annotated, Section
7-7-4257, as amended. Notwithstanding such execution, no Bond shall be valid or obligatory for
any purpose or be entitled to any security or benefit under this Resolution unless and until a
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certificate of authentication on such 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 each Bond
shall be conclusive evidence that it has been authenticated and delivered under this Resolution.
When the Bonds have been fully executed and authenticated, they shall be delivered by the
Registrar to the Underwriter or as otherwise directed upon payment of the purchase price in
accordance with the contract of sale heretofore made and executed, and the Underwriter shall not
be obligated to see to the application of the purchase price.
2.08. Securities Depository for the Bonds.
(a) For purposes of this Section 2.08, the following terms shall have the following
meanings:
“Beneficial Owner” shall mean, whenever used with respect to a Bond, the
person in whose name such Bond is recorded as the beneficial owner of such Bond
by a Participant on the records of such Participant, or such person’s subrogee.
“Cede & Co.” shall mean Cede & Co., the nominee of DTC, and any
successor nominee of DTC with respect to the Bonds.
“DTC” shall mean The Depository Trust Company of New York,
New York.
“Participant” shall mean any broker-dealer, bank or other financial
institution for which DTC holds Bonds as securities depository.
“Representation Letter” shall mean the Blanket Issuer Letter of
Representations pursuant to which the City agrees to comply with DTC’s
Operational Arrangements.
(b) The Bonds of each series shall be initially issued as separately authenticated
fully registered Bonds, and one Bond shall be issued in the principal amount of each stated
maturity of each series of the Bonds. Upon initial issuance, the ownership of such Bonds
shall be registered in the Bond register in the name of Cede & Co., as nominee of DTC.
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The Registrar and the City may treat DTC (or its nominee) as the sole and exclusive owner
of the Bonds registered in its name for the purposes of payment of the principal of or
interest on the Bonds, selecting the Bonds or portions thereof to be redeemed, if any, giving
any notice permitted or required to be given to registered owners of Bonds under this
Resolution, registering the transfer of Bonds, and for all other purposes whatsoever; and
neither the Registrar nor the City shall be affected by any notice to the contrary. Neither
the Registrar nor the City shall have any responsibility or obligation to any Participant, any
Person claiming a beneficial ownership interest in the Bonds under or through DTC or any
Participant, or any other Person which is not shown on the Bond register as being a
registered owner of any Bonds, with respect to the accuracy of any records maintained by
DTC or any Participant, with respect to the payment by DTC or any Participant of any
amount with respect to the principal of or interest on the Bonds, with respect to any notice
which is permitted or required to be given to owners of Bonds under this Resolution, with
respect to the selection by DTC or any Participant of any person to receive payment in the
event of a partial redemption of the Bonds, or with respect to any consent given or other
action taken by DTC as registered owner of the Bonds. So long as any Bond is registered
in the name of Cede & Co., as nominee of DTC, the Registrar shall pay all principal of and
interest on such Bond, and shall give all notices with respect to such Bond, only to Cede &
Co. in accordance with the Representation Letter, and all such payments shall be valid and
effective to fully satisfy and discharge the City’s obligations with respect to the principal
of and interest on the Bonds to the extent of the sum or sums so paid. No Person other than
DTC shall receive an authenticated Bond for each separate stated maturity evidencing the
obligation of the City to make payments of principal and interest. Upon delivery by DTC
to the Registrar of written notice to the effect that DTC has determined to substitute a new
nominee in place of Cede & Co., the Bonds will be transferable to such new nominee in
accordance with paragraph (e) hereof.
(c) In the event the City determines to discontinue the book-entry-only system for
one or both series of Bonds, the City may notify DTC and the Registrar, whereupon DTC
shall notify the Participants of the availability through DTC of Bonds of such series in the
form of certificates. In such event, the Bonds of such series will be transferable in
accordance with paragraph (e) hereof. DTC may determine to discontinue providing its
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services with respect to the Bonds of one or both series at any time by giving notice to the
City and the Registrar and discharging its responsibilities with respect thereto under
applicable law. In such event the Bonds of such series will be transferable in accordance
with paragraph (e) hereof.
(d) The Representation Letter sets forth certain matters with respect to, among other
things, notices, consents and approvals by registered owners of the Bonds and Beneficial
Owners and payments on the Bonds. The Registrar shall have the same rights with respect
to its actions thereunder as it has with respect to its actions under this Resolution.
(e) In the event that any transfer or exchange of Bonds of a series is permitted
under paragraph (b) or (c) hereof, such transfer or exchange shall be accomplished upon
receipt by the Registrar of the Bonds to be transferred or exchanged and appropriate
instruments of transfer to the permitted transferee in accordance with the provisions of this
Resolution. In the event Bonds in the form of certificates are issued to owners other than
Cede & Co., its successor as nominee for DTC as owner of all the Bonds, or another
securities depository as owner of all the Bonds, the provisions of this Resolution shall also
apply to all matters relating thereto, including, without limitation, the preparation of such
Bonds in the form of Bond certificates and the method of payment of principal of and
interest on such Bonds in the form of Bond certificates.
2.10 Form of Bonds. The Bonds shall be prepared in substantially the form set forth
in Exhibit A hereto, and by this reference made a part hereof.
Section 3
Security Provisions.
3.01. Project Account; Use of Proceeds. There is hereby created a special account to be
designated as the “Public Safety Center Project Account” (the “Project Account”), to be held and
administered by the City Manager separate and apart from all other funds and accounts of the City.
The City appropriates to the Project Account the proceeds of the sale of the Bonds in the amount
of (a) $38,073,816.40 (representing the principal amount of the Bonds, plus net original issue
premium on the Bonds, less underwriter’s discount), and (b) all income derived from the
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investment of amounts on hand in the Project Account. The Project Account shall be used solely
to defray expenses of the Project to be paid with proceeds of the Bonds, including costs of issuance
of the Bonds. Upon payment of all costs and expenses of the Project to be paid with proceeds of
the Bonds and investment earnings thereon, any amounts remaining in the Project Account shall
be credited and paid to the Debt Service Account.
3.02. Debt Service Account. There is hereby created a special account to be designated as
the “Public Safety Center Debt Service Account” (the “Debt Service Account”), to be held and
administered by the City Manager separate and apart from all other funds and accounts of the City,
to be used solely to pay principal of and interest on the Bonds. The City irrevocably appropriates
to the Debt Service Account: (a) all funds, if any, to be transferred thereto from the Project Account
in accordance with the provisions of Section 3.01, (b) any taxes levied in accordance with this
Resolution, (c) all income derived from the investment of amounts on hand in the Debt Service
Account, and (d) such other money as shall be received and appropriated to the Debt Service
Account from time to time.
3.03. Tax Levies. The full faith and credit and taxing powers of the City shall be and are
hereby irrevocably pledged to the payment of the Bonds and interest due thereon, and the City
shall cause taxes to be levied annually on all taxable property in the City, without limitation as to
rate or amount, sufficient to pay the interest on the Bonds when it falls due and to pay and discharge
the principal at maturity of each and all of the Bonds as they respectively become due.
Section 4
Tax Covenants and Certifications.
4.01. Use of the Project. The Project will be owned and operated by the City and available
for use by members of the general public on a substantially equal basis. The City shall not enter
into any lease, use or other agreement with any non-governmental person relating to the use of the
Project or security for the payment of the Bonds which might cause the Bonds to be considered
“private activity bonds” or “private loan bonds” within the meaning of Section 141 of the Internal
Revenue Code of 1986, as amended (the “Code”).
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4.02. General Covenant. The City covenants and agrees with the owners from time to time
of the Bonds 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 Bonds to become includable in gross income for
federal income tax purposes under the Code and applicable Treasury Regulations (the
“Regulations”), and covenants to take any and all actions within its powers to ensure that the
interest on the Bonds will not become includable in gross income for federal income tax purposes
under the Code and the Regulations.
4.03. Arbitrage Certification. The Mayor, the City Manager and the City Clerk, being
among the officers of the City charged with the responsibility for issuing the Bonds pursuant to
this Resolution, are authorized and directed to execute and deliver to the Underwriter a certificate
in accordance with the provisions of Section 148 of the Code, and Section 1.148-2(b) of the
Regulations, stating that on the basis of facts, estimates and circumstances in existence on the date
of issue and delivery of the Bonds, it is reasonably expected that the proceeds of the Bonds will be
used in a manner that would not cause the Bonds to be “arbitrage bonds” within the meaning of
Section 148 of the Code and the Regulations.
4.04. Arbitrage Rebate. The City acknowledges that the Bonds are subject to the rebate
requirements of Section 148(f) of the Code. The City covenants and agrees to retain such records,
make such determinations, file such reports and documents and pay such amounts at such times as
are required under said Section 148(f) and applicable Regulations to preserve the exclusion of
interest on the Bonds from gross income for federal income tax purposes, unless the Bonds qualify
for the exception from the rebate requirement under Section 148(f)(4)(B) of the Code and no “gross
proceeds” of the Bonds (other than amounts constituting a “bona fide debt service fund”) arise
during or after the expenditure of the original proceeds thereof. In furtherance of the foregoing,
the Mayor, the City Manager and the City Clerk are hereby authorized and directed to execute a
Rebate Certificate, substantially in the form to be prepared by Bond Counsel, and the City hereby
covenants and agrees to observe and perform the covenants and agreements contained therein,
unless amended or terminated in accordance with the provisions thereof.
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4.05. Information Reporting. The City shall file with the Secretary of the Treasury, not
later than November 15, 2019, a statement concerning the Bonds containing the information
required by Section 149(e) of the Code.
Section 5
Defeasance or Discharge.
5.01. General. When the liability of the City on all Bonds issued under and secured by
this Resolution and all interest thereon has been discharged as provided in this section, all pledges,
covenants and other rights granted by this Resolution to the Holders of such Bonds shall cease.
5.02. Maturity. The City may discharge its liability with reference to all Bonds and interest
thereon which are due on any date by depositing with the Registrar for such Bonds on or before
the date a sum sufficient for the payment thereof in full; or if any Bond or interest thereon shall
not be paid when due, the City may nevertheless discharge its liability with reference thereto by
depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued
to the date of such deposit.
5.03. Redemption. The City may also discharge its liability with reference to any
prepayable Bonds which are called for redemption on any date in accordance with their terms, by
depositing with the Registrar on or before that date an amount equal to the principal, interest and
redemption premium, if any, which are then due thereon, provided that notice of such redemption
has been duly given as provided in this Resolution.
5.04. Escrow. The City may also at any time discharge its liability in its entirety with
reference to any Bonds subject to the provisions of law now or hereafter authorizing and regulating
such action, by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent
for this purpose, cash or securities which are general obligations of the United States or securities
of United States agencies which are authorized by law to be so deposited, bearing interest payable
at such times and at such rates and maturing on such dates as shall be required, without
reinvestment, to provide funds sufficient to pay all principal, interest and redemption premiums,
if any, to become due on such Bonds at their Stated Maturities or, if such Bonds are prepayable
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Page 13 of 25
and notice of redemption thereof has been given or irrevocably provided for, to such earlier
redemption date.
Section 6
Continuing Disclosure.
The Commission hereby approves the Continuing Disclosure Undertaking of the City
substantially in the form of the attached Exhibit B and authorizes the Mayor and the City Manager,
or in the absence of either of them or in the event of their inability to sign, their designees, to
execute and deliver on behalf of the City contemporaneously with the date of issuance and delivery
of the Bonds the Continuing Disclosure Undertaking, with such changes as may be necessary or
appropriate. The signatures of any two authorized officials of the City are adequate to cause the
Continuing Disclosure Undertaking to be binding and enforceable on the City.
Section 7
Certification of Proceedings.
The officers of the City are hereby authorized and directed to prepare and furnish to the
Underwriter and to Dorsey & Whitney LLP, Bond Counsel, certified copies of all proceedings and
records of the City, and such other affidavits, certificates and information as may be required to
show the facts relating to the legality and marketability of the Bonds as the same appear from the
books and records under their custody and control or as otherwise known to them, and all such
certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed
representations of the City as to the facts recited therein.
Section 8
Repeals and Effective Date.
8.01. Repeal. All provisions of other resolutions and other actions and proceedings of the
City and this Commission that are in any way inconsistent with the terms and provisions of this
Resolution are repealed, amended and rescinded to the full extent necessary to give full force and
effect to the provisions of this Resolution.
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Page 14 of 25
8.02. Effective Date. This Resolution shall take effect immediately upon its passage and
adoption by this Commission.
PASSED, ADOPTED, AND APPROVED by the City Commission of the City of
Bozeman, Montana, at a regular session thereof held on the 9th day of September, 2019.
___________________________________
CYNTHIA L. ANDRUS Mayor
ATTEST:
___________________________________
ROBIN CROUGH
City Clerk
APPROVED AS TO FORM:
___________________________________
GREG SULLIVAN City Attorney
484
EXHIBIT A
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF GALLATIN
CITY OF BOZEMAN
GENERAL OBLIGATION BOND
SERIES 2019
No. $ .00
Rate Maturity Date of Original Issue CUSIP
% July 1, September 18, 2019 103637
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: AND NO/100 DOLLARS
FOR VALUE RECEIVED, City of Bozeman, Gallatin County, State of Montana (the “City”), acknowledges itself to be indebted and hereby promises to pay to the registered owner named above, or registered assigns, the principal amount specified above on the maturity date
specified above or, if this Bond is prepayable as stated herein, on any date prior thereto on which
this Bond shall have been duly called for redemption, and to pay interest on said principal amount
to the registered owner hereof from the Date of Original Issue set forth above or from such later date to which interest has been paid or duly provided for until this Bond is paid or, if this Bond is prepayable, until it has been duly called for redemption, at the rate specified above. Principal of
this Bond is payable upon presentation and surrender hereof to U.S. Bank National Association,
of Salt Lake City, Utah, as Bond Registrar, Transfer Agent and Paying Agent, or its successor
designated under the Resolution described herein (the “Registrar”), at its operations center in St. Paul, Minnesota. The interest on this Bond shall be payable on January 1 and July 1 in each year, commencing January 1, 2020, and shall be calculated on the basis of a 360-day year composed of
twelve 30-day months. Interest on the Bonds shall be payable to the owners of record thereof as
such appear on the bond register as of the close of business on the 15th day of the month
immediately preceding each interest payment date, whether or not such day is a Business Day. Interest on, and upon presentation and surrender thereof, the principal of each Bond shall be
payable by check or draft issued by the Registrar described herein. “Business Day” means any
day other than a Saturday, Sunday or legal holiday of the State of Montana.
The principal of and interest on this Bond are payable in lawful money of the United States
of America. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are
hereby irrevocably pledged.
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A-2
Notwithstanding any other provisions of this Bond, so long as this Bond is registered in the name of Cede & Co., as nominee of The Depository Trust Company, or in the name of any other
nominee of The Depository Trust Company or other securities depository, the Registrar shall pay
all principal of and interest on this Bond, and shall give all notices with respect to this Bond, only
to Cede & Co. or other nominee in accordance with the operational arrangements of The Depository Trust Company or other securities depository as agreed to by the City.
This Bond is one of an issue in the total principal amount of $34,405,000 (the “Series 2019
Bonds”), all of like date of original issue and tenor except as to serial number, denomination,
maturity date, interest rate and redemption privilege, all authorized by the favorable vote of more
than the requisite majority of the qualified electors of the City voting on the question of the issuance thereof at a duly held election, all pursuant to resolutions duly adopted by the City Commission, including a bond resolution adopted on September 9, 2019 (the “Resolution”), and
in full conformity with the Constitution and laws of the State of Montana thereunto enabling. The
Bonds are issuable only as fully registered bonds of single maturities, in denominations of $5,000
or any integral multiple thereof.
Bonds with stated maturities in the years 2020 through 2029 are not subject to redemption prior to their stated maturities. Bonds with stated maturities on or after July 1, 2030 are subject to
redemption on July 1, 2029 and any date thereafter, at the option of the City, in whole or in part,
and if in part from such stated maturities and in such principal amounts as the City may designate
in writing to the Registrar (or, if no designation is made, in inverse order of maturities and within a maturity in $5,000 principal amounts selected by the Registrar by lot or other manner it deems fair), at a redemption price equal to the principal amount thereof and interest accrued to the
redemption date, without premium.
The date of redemption and the principal amount of the Bonds shall be fixed by the City
Manager, who shall give notice thereof to the Registrar at least forty-five days prior to the date of redemption. At least thirty days prior to the designated redemption date, the Registrar shall cause notice of redemption to be mailed, by first class mail, or by other means required by the securities
depository, to the registered owners of each Bond to be redeemed at their addresses as they appear
on the bond register. No defect in or failure to give such notice shall affect the validity of
proceedings for the redemption of any Bond not affected by such defect or failure. The notice of redemption shall specify the redemption date, redemption price, the numbers, interest rates, CUSIP
numbers, and the maturity date of the Bonds or portions thereof to be redeemed and the place at
which the Bonds are to be surrendered for payment. Official notice of redemption having been
given as aforesaid, the Bonds or portions thereof so to be redeemed shall, on the redemption date,
become due and payable at the redemption price therein specified and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portions
thereof shall cease to bear interest.
As provided in the Resolution and subject to certain limitations set forth therein, this Bond
is transferable upon the books of the City in the principal office of the Registrar, by the registered
owner hereof in person or by his 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 his attorney, and may also be surrendered in exchange for Bonds of other
authorized denominations. Upon any such transfer or exchange, the City will cause a new Bond
486
A-3
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 shall 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 Constitution and laws of the State of Montana to be done, to exist, to happen and to be performed precedent to and in the issuance of this Bond, in order to make it a valid and binding general obligation of the City according to its terms, have been done,
do exist, have happened and have been performed in regular and due form, time and manner as so
required; that the City Commission will annually levy an ad valorem tax on all of the taxable
property in the City in an amount sufficient to pay the interest hereon when it falls due and also to pay and discharge the principal of this Bond at maturity; that this Bond, together with all other general obligation indebtedness of the City outstanding on the date of original issue hereof, does
not exceed any constitutional or statutory limitation of indebtedness.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Resolution until the Certificate of Authentication hereon shall have been executed by the Registrar by the manual signature of one of its authorized representatives.
487
A-4
IN WITNESS WHEREOF, City of Bozeman, Montana, by its City Commission, has caused this Bond to be executed by the facsimile signatures of the Mayor, the City Manager and
the City Clerk and by a printed facsimile of the official seal of the City.
CITY OF BOZEMAN, MONTANA
(Facsimile Signature) MAYOR
(Facsimile Signature)
(Facsimile Seal) CITY MANAGER
(Facsimile Signature) CITY CLERK
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned herein.
U.S. BANK NATIONAL ASSOCIATION, as Registrar, Transfer Agent, and
Paying Agent
By Authorized Signature
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A-5
The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants UTMA............Custodian.....................
in common (Cust) (Minor)
TEN ENT -- as tenants by the entireties under Uniform Gifts to
JT TEN -- as joint tenants Minor Act............................................
with right of (State)
survivorship and not as tenants in common
Additional abbreviations may also be used.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints attorney to transfer the within
Bond on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER NOTICE: The signature to this assignment
OF ASSIGNEE: must correspond with the name as it appears
upon the face of the within Bond in every
/ / particular, without alteration, enlargement or any change whatsoever.
SIGNATURE GUARANTEED
Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Bond Registrar, which requirements include membership or participation in STAMP or such other
“signature guaranty program” as may be determined by the Bond Registrar in addition to or in substitution for STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
489
EXHIBIT B
CONTINUING DISCLOSURE UNDERTAKING
This CONTINUING DISCLOSURE UNDERTAKING is made by the City of Bozeman,
Montana (the “City’) in connection with the issuance and delivery by the City of its $34,405,000
General Obligation Bonds, Series 2019 (the “Bonds”), as of this 18th day of September, 2019.
(a) Purpose and Beneficiaries. To provide for the public availability of certain information relating to the Bonds and the security therefor and to permit participating
underwriters in the primary offering of the Bonds to comply with paragraph (b)(5) of Rule 15c2-
12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act
of 1934, as amended (the “Rule”), the City hereby makes the following covenants and agrees, for the benefit of the Owners (as hereinafter defined) from time to time of the outstanding Bonds, to provide annual reports of specified information and notice of the occurrence of certain events to
the Municipal Securities Rulemaking Board (“MSRB”) through its Electronic Municipal Market
Access system website (“EMMA”), as hereinafter described. The City is the only “obligated
person” in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made.
If the City fails to comply with this Continuing Disclosure Undertaking, any person
aggrieved thereby, including the Owners of any outstanding Bonds, may take whatever action at
law or in equity may appear necessary or appropriate to enforce performance and observance of
this Continuing Disclosure Undertaking, including an action for a writ of mandamus or specific performance. Direct, indirect, consequential and punitive damages shall not be recoverable for any default hereunder. Notwithstanding anything to the contrary contained herein, in no event
shall a default under this Continuing Disclosure Undertaking constitute a default under the
Bonds or under any other provision of this Resolution.
As used herein, “Owner” means, in respect of a Bond, the registered owner or owners thereof appearing in the bond register maintained by the Registrar or any Beneficial Owner (as hereinafter defined) thereof, if such Beneficial Owner provides to the Registrar evidence of such
beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used
herein, “Beneficial Owner” means, in respect of a Bond, any person or entity that (i) has the
power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds through nominees, depositories or other
intermediaries), or (ii) is treated as the owner of the Bond for federal income tax purposes.
(b) Information To Be Disclosed. The City will provide, in the manner set forth in
subsection (c) hereof, either directly or indirectly through an agent designated by the City, the
following information at the following times:
(1) on or before 270 days after the end of each fiscal year of the City, commencing
with the fiscal year ending June 30, 2019, the following financial information and
operating data in respect of the City (the “Disclosure Information”):
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B-2
(A) the audited financial statements of the City for such fiscal year, accompanied by the audit report and opinion of the accountant or government
auditor relating thereto, as permitted or required by the laws of the State of
Montana, containing a balance sheet as of the end of such fiscal year and a
statement of operations, changes in fund balances and cash flows for the fiscal year then ended, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified
in accordance with the governmental accounting standards promulgated by the
Governmental Accounting Standards Board or as otherwise provided under
Montana law, as in effect from time to time or, if and to the extent such financial statements have not been prepared in accordance with such generally accepted accounting principles for reasons beyond the reasonable control of the City,
noting the discrepancies therefrom and the effect thereof; and
(B) to the extent not included in the financial statements referred to in
paragraph (A) above, information of the type set forth below:
(1) updated figures for the City for such fiscal year to include general obligation bonds outstanding, assessed valuation, taxable
valuation, estimated City population, and debt capacity;
(2) tax levy and collection figures for such fiscal year in a
format similar to the table in Appendix A to the Official Statement titled “Tax Collections;” and
(3) a list of the major taxpayers for the City for such fiscal year
in a format similar to the table in Appendix A to the Official Statement
titled “Principal Property Taxpayers.”
Notwithstanding anything herein, if the audited financial statements are not available by the date specified, the City shall provide on or before such date unaudited financial statements in the format required for the audited financial statements as part of
the Disclosure Information and, within ten days after the receipt thereof, the City shall
provide the audited financial statements.
Any or all of the Disclosure Information may be incorporated, if it is updated as required hereby, by reference from other documents, including official statements, which
have been submitted to the MSRB in the manner set forth in subsection (c) hereof. The
City shall clearly identify the Disclosure Information in each document so incorporated
by reference.
If any part of the Disclosure Information can no longer be generated because the operations of the City have materially changed or been discontinued, such Disclosure
Information need no longer be provided if the City includes in the Disclosure Information
a statement to such effect; provided, however, if such operations have been replaced by
other City operations in respect of which data is not included in the Disclosure
Information and the City determines that certain specified data regarding such
491
B-3
replacement operations would be material (as hereinafter defined), then, from and after such determination, the Disclosure Information shall include such additional specified
data regarding the replacement operations.
If the Disclosure Information is changed or this Continuing Disclosure
Undertaking is amended, then the City shall include in the next Disclosure Information to be delivered pursuant to this Continuing Disclosure Undertaking, to the extent necessary, an explanation of the reasons for the amendment and the effect of any change in the type
of financial information or operating data provided.
(2) In a timely manner not in excess of ten business days, notice of the
occurrence of any of the following events:
(A) principal and interest payment delinquencies;
(B) non-payment related defaults, if material;
(C) unscheduled draws on debt service reserves reflecting financial
difficulties;
(D) unscheduled draws on credit enhancements reflecting financial difficulties;
(E) substitution of credit or liquidity providers, or their failure to
perform;
(F) adverse tax opinions, the issuance by the Internal Revenue Service
of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds;
(G) modifications to rights of holders of the Bonds, if material;
(H) bond calls, if material, and tender offers;
(I) defeasances;
(J) release, substitution or sale of property securing repayment of the Bonds, if material;
(K) rating changes;
(L) bankruptcy, insolvency, receivership, or similar event of the City;
(M) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City,
other than in the ordinary course of business, the entry into a definitive agreement
492
B-4
to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;
(N) appointment of a successor or additional trustee or the change of
name of a trustee, if material;
(O) incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security
holders, if material; and
(P) default, event of acceleration, termination event, modification of
terms, or other similar events under the terms of the financial obligation of the City, any of which reflect financial difficulties.
An event is “material” if it is an event as to which a substantial likelihood exists
that a reasonably prudent investor would attach importance thereto in deciding to buy,
hold or sell a Bond or, if not disclosed, would significantly alter the total information
otherwise available to an investor from the Official Statement, information disclosed in this Bond Resolution or information generally available to the public. Notwithstanding the foregoing sentence, an event is also “material” if it is an event that would be deemed
material for purposes of the purchase, holding or sale of a Bond within the meaning of
applicable federal securities laws, as interpreted at the time of discovery of the
occurrence of the event.
For purposes of paragraphs (O) and (P) above, the term “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or
pledged as security or a source of payment for, an existing or planned debt obligation; or
(iii) guarantee of either (i) or (ii). A “financial obligation” does not include municipal
securities for which a final official statement has been provided to the MSRB consistent with the Rule.
(3) In a timely manner, notice of the occurrence of any of the following events or
conditions:
(A) the failure of the City to provide the Disclosure Information
described above under paragraph (b)(1) above at the time specified thereunder;
(B) the amendment or supplementing of this Continuing Disclosure
Undertaking, together with a copy of such amendment or supplement and any
explanation provided by the City; and
(C) any change in the fiscal year of the City.
(c) Manner of Disclosure. The City agrees to make available the information described in subsection (b) hereof to the MSRB via EMMA or in a manner as may be otherwise proscribed
by the MSRB consistent with the Rule. All documents provided to the MSRB shall be
accompanied by identifying information as prescribed by the MSRB.
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B-5
(d) Term; Amendments; Interpretation.
(1) This Continuing Disclosure Undertaking shall remain in effect so long as any
Bonds are outstanding.
(2) This Continuing Disclosure Undertaking (and the form and requirements of
the Disclosure Information) may be amended or supplemented by the City from time to time, without notice to (except as provided in paragraph (b)(3) hereof) or the consent of the Owners of any Bonds, by a resolution of this Commission filed in the office of the
recording officer of the City accompanied by an opinion of Bond Counsel, who may rely
on certificates of the City and others and the opinion may be subject to customary
qualifications, to the effect that the Continuing Disclosure Undertaking (and the form and requirements of the Disclosure Information), as so amended or supplemented, will comply with the provisions of paragraph (b)(5) of the Rule, assuming that such
provisions apply to the Bonds.
If the Disclosure Information is so amended, the City agrees to provide,
contemporaneously with the effectiveness of such amendment, an explanation of the reasons for the amendment and the effect, if any, of the change in the type of financial information or operating data being provided hereunder.
(3) This Continuing Disclosure Undertaking is entered into to comply with the
continuing disclosure provisions of the Rule and should be construed so the undertaking
would satisfy the requirements of paragraph (b)(5) of the Rule.
[Signature Blocks For Mayor and City
Manager]
494
CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE
I, the undersigned, being the duly qualified and acting recording officer of the City of
Bozeman, Montana (the “City”), hereby certify that the attached resolution is a true copy of
Resolution No. 5090, entitled: “RESOLUTION RELATING TO $34,405,000 GENERAL
OBLIGATION BONDS, SERIES 2019; DETERMINING THE FORM AND DETAILS,
AUTHORIZING THE EXECUTION AND DELIVERY AND LEVYING TAXES FOR
THE PAYMENT THEREOF” (the “Resolution”), on file in the original records of the City in
my legal custody; that the Resolution was duly adopted by the City Commission of the City at a
meeting on September 9, 2019, and that the meeting was duly held by the City Commission and
was attended throughout by a quorum, pursuant to call and notice of such meeting given as
required by law; and that the Resolution has not as of the date hereof been amended or repealed.
I further certify that, upon vote being taken on the Resolution at said meeting, the
following Commissioners voted in favor thereof: ________________
; voted against
the same: ; abstained from voting
thereon: ; or were absent: .
WITNESS my hand officially this 9th day of September, 2019.
ROBIN CROUGH
City Clerk
495
Execution Copy
BOND PURCHASE AGREEMENT
By and Between
CITY OF BOZEMAN, MONTANA,
as City
AND
STIFEL, NICOLAUS & COMPANY, INCORPORATED,
as Underwriter
Dated
August 28, 2019
relating to
$34,405,000
City of Bozeman, Montana
General Obligation Bonds
Series 2019
This document was drafted by:
Ballard Spahr LLP (BWJ)
2000 IDS Center
80 S. 8th Street
Minneapolis, Minnesota 55402
496
i
Table of Contents
Page
1.Parties and Relevant Dates ................................................................................................................... 1
2.Defined Terms ...................................................................................................................................... 1
3.Offer to Purchase the Securities; Execution of Terms and Acceptance ............................................... 3
4.Purchase of the Securities .................................................................................................................... 3
5.Purchase Price ...................................................................................................................................... 4
6.Public Offering ..................................................................................................................................... 4
7.Good Faith Deposit .............................................................................................................................. 4
8.Official Statement ................................................................................................................................ 4
9.Representations and Warranties ........................................................................................................... 5
10.Third-Party Credit Enhancement or Support ........................................................................................ 8
11.Ratings .................................................................................................................................................. 8
12.Closing ................................................................................................................................................. 8
13.Closing Conditions ............................................................................................................................... 8
14.Establishment of Issue Price ................................................................................................................ 9
15.Accountants’ Letter ............................................................................................................................ 10
16.[Reserved] .......................................................................................................................................... 10
17.Termination ........................................................................................................................................ 11
18.Payment of Expenses ......................................................................................................................... 12
19.Notices ................................................................................................................................................ 13
20.Governing Law ................................................................................................................................... 13
21.Miscellaneous ..................................................................................................................................... 13
22.Counterparts ....................................................................................................................................... 13
23.Signatures ........................................................................................................................................... 13
24.Electronic Signatures.......................................................................................................................... 13
497
BOND PURCHASE AGREEMENT
1.Parties and Relevant Dates
City: City of Bozeman, Montana, its successor and assigns.
Underwriter: Stifel, Nicolaus & Company, Incorporated, its successor and assigns.
Securities: $34,405,000 General Obligation Bonds, Series 2019
Acceptance Deadline: August 28, 2019, 4:00 p.m. (Denver, Colorado time).
Effective Date and Time: August 28, 2019, 4:00 p.m. (Denver, Colorado time).
Closing or Closing Date: September 18, 2019.
2.Defined Terms
All capitalized terms used in this Agreement and not otherwise defined are used as defined in the
City Resolution or the Official Statement:
Acceptance Deadline: The date set forth in Section 1, being the date and time by which the City
must accept this Agreement.
Accountants: The public accountants for the City and/or any entity whose audit letter is included
with the audited financial statements of the City in the Preliminary Official Statement and the Official
Statement.
Agreement: This Bond Purchase Agreement, effective as of the Effective Date and Time,
including Schedule I attached hereto.
Bond Counsel: Dorsey & Whitney LLP, Missoula, Montana.
City: The City of Bozeman, Montana.
City Documents: All financing documents to which the City is a party relating to the issuance of
the Securities, as such documents are amended and supplemented to the Closing Date, including, but not
limited to:
(i)this Agreement;
(ii)the City Resolution; and
(iii)other applicable financing or operative documents with respect to the Securities
to which the City is a party, as such documents are amended and supplemented to the Closing
Date.
City Resolution: The Parameters Resolution, adopted by the City Commission of the City of
Bozeman on August 12, 2019 along with the Bond Resolution, to be adopted by the City Commission of
the City on or about September 9, 2019.
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2
Closing Date: The date set forth in Section 1 of this Agreement, being the date of the issuance
and delivery of the Securities.
Continuing Disclosure Undertaking: The Continuing Disclosure Undertaking to be entered into
by the City in connection with the Securities, to be dated the Closing Date, a form of which is attached as
an exhibit to the Bond Resolution.
Creditors’ Rights Laws: Limitations on enforceability as may result from bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally from
time to time in effect and from the application of general principles of equity and from public policy
limitations on the exercise of any rights to indemnification and contribution.
DTC: The Depository Trust Company, its successors and assigns.
Effective Date and Time: The date and time that this Agreement is effective, as set forth in
Section 1 of this Agreement.
End of the Underwriting Period: The later of (i) the Closing Date, or (ii) when the Underwriter
no longer retains an unsold balance of the Securities.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Excluded Sections: For purposes of the representations and warranties of the City set forth in
Sections 9(a), the “Excluded Sections” of the Preliminary Official Statement and the Official Statement
shall be: (i) the section describing DTC and its book-entry-only procedures, (ii) the section captioned
“UNDERWRITING,” and (iii) the reoffering prices and yield of the Securities set forth on the inside front
cover.
Good Faith Deposit: The amount, if any, to be provided as a good faith deposit by the
Underwriter to the City, if and to the extent set forth in this Agreement under Section 7.
Moody’s: Moody’s Investors Services, its successors and assigns.
MSRB: Municipal Securities Rulemaking Board, its successors and assigns.
Official Statement: The Official Statement, dated on August 28, 2019, relating to the Securities,
together with all appendices or exhibits, any materials incorporated by reference therein and any
amendments or supplements thereto.
Paying Agent: U.S. Bank National Association, its successors and assigns.
Preliminary Official Statement: The Preliminary Official Statement, dated August 16, 2019,
relating to the Securities, together with all appendices or exhibits, any materials incorporated by reference
therein and any amendments or supplements thereto.
Primary Offering Disclosure Period: The period commencing with the first submission to an
underwriter of an order for the purchase of the Securities or the purchase of such Securities from the City,
whichever first occurs, and ending 25 days after the final delivery by the City or its agents of all
Securities to or through the underwriting syndicate or sole underwriter.
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3
Purchase Price: The amount specified in Section 5 as the Purchase Price to be paid by the
Underwriter at the Closing for the purchase of the Securities on the Closing Date.
Rule 15c2-12: Rule 15c2-12 promulgated by the SEC under the Exchange Act, as amended.
SEC: Securities and Exchange Commission of the United States.
Securities: The Securities identified in Section 1 on the first page of this Agreement, as more
specifically described in Schedule I.
Securities Act: The Securities Act of 1933, as amended.
State: The State of Montana.
Trust Indenture Act: Trust Indenture Act of 1939, as amended.
Underwriter: The firm identified as such in Section 1 of this Agreement.
3.Offer to Purchase the Securities; Execution of Terms and Acceptance
The City and the Underwriter are entering into this Agreement, to provide for the purchase and
sale of the Securities. The Securities are further described in Schedule I.
The Underwriter hereby offers to purchase all (but not less than all) of the Securities from, and to
enter into this Agreement with, the City. This offer is subject to acceptance by the City by the Acceptance
Deadline and, if not so accepted, will be subject to withdrawal by the Underwriter by written notice
delivered to the City at any time prior to acceptance. The City shall accept this Agreement by its
execution hereof. Upon such execution, the Agreement will be binding upon the Underwriter and the
City. This Agreement is effective as of the Effective Date and Time.
4.Purchase of the Securities
The Underwriter shall purchase from the City, and the City shall sell to the Underwriter, all (but
not less than all) of the Securities on the Closing Date at the aggregate Purchase Price set forth below.
The Securities shall bear interest at the rates per annum, mature on the dates, be sold to the public at the
prices and be subject to optional redemption prior to maturity and to such other terms and provisions, all
as set forth in Schedule I. The Securities otherwise shall be as described in the Official Statement and the
City Documents. The Underwriter’s agreement to purchase the Securities is made in reliance upon the
City’s representations, covenants and warranties and on the terms and conditions set forth in this
Agreement.
The City acknowledges and agrees that: (i) the primary role of Stifel, Nicolaus & Company,
Incorporated, as an underwriter, is to purchase securities (such as the Securities) for resale to investors in
an arms-length commercial transaction between the City and the Underwriter and that the Underwriter has
financial and other interests that differ from those of the City; (ii) the Underwriter is not acting as a
municipal advisor, financial advisor or fiduciary to the City or any other person or entity and has not
assumed any advisory or fiduciary responsibility to the City with respect to the Securities contemplated
hereby and the discussions, undertakings and proceedings leading thereto (irrespective of whether the
Underwriter has provided other services or is currently providing other services to the City on other
matters); (iii) the only obligations the Underwriter has to the City with respect to the Securities
contemplated hereby expressly are set forth in this Agreement; and (iv) the City has consulted their own
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legal, accounting, tax, and other advisors, as applicable, to the extent it has deemed appropriate in
connection with the transaction contemplated herein.
5.Purchase Price
The Purchase Price of the Securities is $38,073,816.40 (representing the principal amount of the
Securities, less an Underwriter’s discount of $103,215.00, and plus original net issue premium of
$3,772,031.40). The Purchase Price shall be payable on the Closing Date by the Underwriter to or as
directed by the City by wire transfer in immediately available funds.
6.Public Offering
The Underwriter agrees to make a bona fide initial public offering of all the Securities in
compliance with federal and state securities laws, at a price not in excess of the initial offering price set
forth in the Official Statement. The Underwriter may change the initial offering price or prices as they
deem necessary in connection with the offering of the Securities without any requirement of prior notice,
and may offer and sell the Securities to certain institutions at prices lower than those stated in the Official
Statement. As described in Section 14, the Underwriter shall execute and deliver prior to the Closing an
issue price certificate substantially in the form attached hereto as Exhibit A.
7.Good Faith Deposit
No Good Faith Deposit will be delivered.
8.Official Statement
The City hereby consents to and ratifies the use and distribution by the Underwriter of the
Preliminary Official Statement and the Official Statement in connection with the public offering and sale
of the Securities by the Underwriter. The City hereby represents and warrants that the Preliminary
Official Statement previously furnished to the Underwriter was “deemed final” by the City as of its date
for purposes of Rule 15c2-12.
(a)The City, at its cost, shall provide, or cause to be provided, to the Underwriter
within seven (7) business days after the date of this Agreement (or within such shorter period as
may be requested by the Underwriter or required by applicable rule) such number of copies of a
final Official Statement as reasonably requested by the Underwriter, but in sufficient quantity to
permit the Underwriter to comply with paragraph (b)(4) of Rule 15c2-12, and Rule G-32 and any
other applicable rules of the SEC and the MSRB.
(b)The City authorizes the Underwriter to file, to the extent required by any
applicable SEC or MSRB rule, and the Underwriter agrees to so file, the Official Statement with
the MSRB or its designee. If an amended Official Statement is prepared during the Primary
Offering Disclosure Period, and if required by any applicable SEC or MSRB rule, the
Underwriter also shall make the required filings of the amended Official Statement. The City
shall provide the Underwriter with the information necessary to complete MSRB Form G-32 for
all filings to be made under this Section 8.
(c)The Preliminary Official Statement and the Official Statement may be delivered
in printed form and “designated electronic format” as defined in the MSRB’s Rule G-32 and as
may be agreed by the City and the Underwriter. If the Official Statement has been prepared in
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electronic form, the City hereby confirms that it does not object to distribution of the Official
Statement in electronic form.
(d)The City shall not supplement or amend the Official Statement or cause the
Official Statement to be supplemented or amended without the prior written consent of the
Underwriter. The City covenants to notify the Underwriter promptly if, on or prior to the 25th day
after the End of the Underwriting Period (or such other period as may be agreed to by the City
and the Underwriter), any event shall occur, or information comes to the attention of the City, that
is reasonably likely to cause the Official Statement (whether or not previously supplemented or
amended) to contain any untrue statement of a material fact or to omit to state a material fact
necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading, and if in the opinion of the Underwriter such event requires the preparation
and distribution of a supplement or amendment to the Official Statement, to prepare and furnish
to the Underwriter, at the City’s expense, such number of copies of the supplement or amendment
to the Official Statement, in (i) a “designated electronic format” consistent with the requirements
of the MSRB’s Rule G-32, and (ii) a printed form in substance mutually agreed upon by the City
and the Underwriter, as the Underwriter may reasonably request. If such notification shall be
given subsequent to the Closing Date, the City also shall furnish, or cause to be furnished, such
additional certificates, instruments and other documents as the Underwriter may reasonably deem
necessary to evidence the truth and accuracy of any such supplement or amendment to the
Official Statement.
9.Representations and Warranties
(a)Representations and Warranties of the City. The City hereby represents, warrants and
agrees as follows:
(i)At both the time of its acceptance hereof and at the time of the Closing, the City
is a municipal corporation and political subdivision of the State, with full legal right, power and
authority to enter into this Agreement;
(ii)As of the Closing Date, the City will have full legal right, power and authority
(i) to enter into the City Documents, and (ii) to carry out and consummate the transactions
contemplated by this Agreement, the other City Documents, the Securities, and the Official
Statement;
(iii)The City has duly executed and delivered this Agreement, has duly authorized
and approved the Preliminary Official Statement, has duly authorized and approved the execution
and delivery by the City of this Agreement, and on or prior to the Closing Date, will have
approved the execution and delivery of the City Documents and executed and delivered the City
Documents and approved the consummation of all other transactions contemplated by the Official
Statement;
(iv)Between the date of this Agreement and the date of the Closing, except as
contemplated by the Official Statement, the City will not incur any material liabilities, direct or
contingent, or enter into any material financial transaction payable from the full faith, credit and
taxing power of the City, in either case other than in the ordinary course of its business, and,
except as contemplated in the Official Statement, there shall not have been any material adverse
change in the financial condition of the City;
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(v)(A) The City is not in breach of or default under any applicable constitutional
provision, law or administrative regulation of the State or the United States or any applicable
judgment or decree or any loan agreement, indenture, bond, note, resolution, or other similar
agreement or instrument to which the City is a party or by which the City is bound, and no event
has occurred and is continuing which, with the passage of time or the giving of notice or both,
would constitute a default or event of default under any such instrument; and (B) the execution
and delivery of this Agreement and the other City Documents, the adoption and implementation
of and compliance with the provisions of this Agreement or the other City Documents will not
conflict with or constitute a breach of or default under any constitutional provision, law,
administrative regulation, judgment, court decree, loan agreement, indenture, bond, note,
resolution, or other similar agreement or instrument to which the City is a party, or by which it is
bound;
(vi)Except as disclosed in the Official Statement, there is no action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any court, governmental agency, public
board or body, pending or, to the best knowledge of the officer of the City executing this
Agreement, threatened (a) in any way questioning the corporate existence of the City or the titles
of the officers of the City to their respective offices; (b) affecting or seeking to prohibit, restrain
or enjoin the execution or delivery of any of the Securities, or the application of the proceeds of
sale of the Securities, or the execution and delivery by the City of this Agreement; (c) in any way
contesting or affecting the validity of the Securities, the City Documents, or the tax-exempt status
of interest due with respect to the Securities; or (d) contesting the completeness or accuracy of the
Preliminary Official Statement or the Official Statement or any supplement or amendment thereto
or asserting that the Preliminary Official Statement or Official Statement contained any untrue
statement of a material fact or omitted to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading;
(vii)The City will furnish such information, execute such instruments and take such
other action not inconsistent with law in cooperation with the Underwriter as the Underwriter
may request (a) to qualify the Securities for offer and sale under the Blue Sky or other securities
laws and regulations of such states and other jurisdictions of the United States as the Underwriter
may designate, and (b) to determine the eligibility of the Securities for investment under the laws
of such states and other jurisdictions, and will use its best efforts to continue such qualifications
in effect so long as required for the distribution of the Securities; provided, however, that the City
shall not be required to execute a general or special consent to service of process or qualify to do
business in connection with any such qualification or determination in any jurisdiction;
(viii)All authorizations, approvals, licenses, permits, consents and orders of any
governmental authority, legislative body, board, agency or commission having jurisdiction of the
matter which are required for the due authorization of, which would constitute a condition
precedent to or the absence of which would materially adversely affect the due performance by
the City of its obligations in connection with the execution, sale and delivery of the Securities
under this Agreement have been duly obtained, except for the adoption by the City Commission
of the City of the Bond Resolution, expected to occur on or about September 9, 2019 and
approval by the City of the Official Statement, and except for such approvals, consents and orders
as may be required under the Blue Sky or securities laws of any state in connection with the
offering and sale of the Securities;
(ix)As of its date, the Preliminary Official Statement did not, and the final Official
Statement will not, as of the Closing Date, contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light of the circumstances
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under which they were made, not misleading, provided, however, that the City does not make any
representation with respect to the Excluded Sections;
(x)At the time of the City’s acceptance hereof (unless an event occurs of the nature
described in Section 9(a)(xii) and at all times during the period from the date of this Agreement to
and including the date which is twenty-five (25) days following the End of the Underwriting
Period for the Securities) the Official Statement does not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, provided,
however, that the City does not make any representation with respect to the Excluded Sections;
(xi)If the Official Statement is supplemented or amended pursuant to Section
9(a)(xii), at the time of each supplement or amendment thereto and (unless subsequently again
supplemented or amended pursuant to such section) at all times during the period from the date of
this Agreement to and including the date which is twenty-five (25) days following the End of the
Underwriting Period, as so supplemented or amended, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, provided, however, that the City
does not make any representation with respect to the Excluded Sections;
(xii)If during the period from the date of this Agreement to and including the date
which is twenty-five (25) days following the End of the Underwriting Period any event shall
occur that to the actual knowledge of the City would cause the Official Statement, as then
supplemented or amended, to contain any untrue statement of a material fact or to omit to state a
material fact necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading, the City shall notify the Underwriter of any such event of which
it has knowledge and, if in the opinion of the Underwriter such event requires the preparation and
publication of a supplement or amendment to the Official Statement, the City will prepare and
furnish to the Underwriter (a) a reasonable number of copies of the supplement or amendment to
the Official Statement in form and substance acceptable to the Underwriter, and (b) if such
notification shall be subsequent to the Closing, such legal opinions, certificates, instruments and
other documents as the Underwriter may reasonably deem necessary to evidence the truth and
accuracy of such supplement or amendment to the Official Statement; and
(xiii)Except as disclosed in the Preliminary Official Statement and the Official
Statement, during the previous five years, the City has complied in all material respects with the
City’s continuing disclosure undertakings with regard to Rule 15c2-12 to provide annual reports
or notices of material events. The City agrees to undertake the continuing disclosure obligations
set forth in the Continuing Disclosure Undertaking.
(b)Representations and Warranties of the Underwriter. The Underwriter hereby agrees with,
and makes the following representations and warranties to, the City, as of the date hereof and as of the
Closing Date, which representations and warranties shall survive the Closing:
(i)The Underwriter is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization;
(ii)This Agreement has been duly authorized, executed and delivered by the
Underwriter and, assuming the due authorization, execution and delivery by the City, is the legal,
valid and binding obligation of the Underwriter enforceable in accordance with its terms, except
as the enforceability of this Agreement may be limited by application of Creditors’ Rights Laws;
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(iii)The Underwriter represents that it is licensed by and registered with the Financial
Industry Regulatory Authority as a broker-dealer and the MSRB as a municipal securities dealer;
and
(iv)The Underwriter will make a bona fide initial public offering of all the Securities
in compliance with federal and state securities laws.
10.Third-Party Credit Enhancement or Support
No policy or support facility will be provided with respect to the Securities.
11.Ratings
The following ratings on the Securities shall be in effect on the Closing Date:
Moody’s: Aa1
12.Closing
(a)The delivery of and payment for the Securities shall be the “Closing” for the Securities
and shall occur at or prior to 12:00 p.m., New York City time, on the Closing Date, or at such other time
or on such other date as may be mutually agreed by the Underwriter and the City. The location of the
Closing shall be at Bond Counsel’s offices located at 125 Bank Street, Suite 600, Missoula, Montana
59802.
(b)At the Closing, the Securities shall be delivered to DTC or Paying Agent on behalf of the
Underwriter, as further described in paragraph (c) below. The Securities shall be delivered in definitive
form, duly executed by the City and authenticated by the Paying Agent, together with the other
documents identified in Section 13. Subject to satisfaction of the conditions contained in this Agreement,
the Underwriter will accept delivery of the Securities as described above and pay the Purchase Price, in
immediately available funds, payable to the order of the City or as otherwise directed by the City.
(c)Delivery of the definitive Securities shall be made through the facilities of DTC’s book-
entry-only system in New York, New York, or at such other location as may be designated by the
Underwriter prior to the Closing. The Securities will be delivered as fully-registered bonds, bearing
CUSIP numbers, with a single bond for each maturity of each series of the Securities (or, if so provided in
Schedule I, for each separate interest rate within a maturity), and registered in the name of Cede & Co., as
nominee of DTC, which will act as securities depository for the Securities. Unless otherwise requested by
the Underwriter, the Securities will be delivered under DTC’s FAST delivery system.
13.Closing Conditions
The Underwriter has entered into this Agreement in reliance upon the respective representations
and warranties of the City contained herein and the performance by the City of its obligations hereunder
both as of the date hereof and as of the Closing Date. The Underwriter’s obligations under this Agreement
shall be conditioned upon the performance by the City of its obligations to be performed hereunder and
subject to the following conditions:
(a)The representations and warranties of the City contained herein shall be true, complete
and correct in all material respects on the date hereof and on the Closing Date.
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(b)At the time of the Closing, the City shall perform or have performed its obligations under
or specified in this Agreement which are required to be performed at or prior to the Closing.
(c)At or prior to the Closing, the Underwriter shall receive the following documents:
(i)The Official Statement and each supplement or amendment, if any, thereto;
(ii)The opinion of Dorsey & Whitney LLP, Bond Counsel, dated the date of the
Closing, in substantially the form attached to the Official Statement as Appendix F;
(iii)Written evidence that the rating on the Securities by the applicable rating service,
as set forth in Section 11, is in effect as of the Closing Date;
(iv)A certificate of an authorized officer of the City, dated the Closing Date, to the
effect that each of the representations and warranties set forth in Section 9 hereof is true, accurate
and complete in all material respects as of the Closing Date and each of the agreements of the
City, as set forth in this Agreement to be complied with at or prior to the Closing, has been
complied with;
(v)A certificate, in form and substance acceptable to the Underwriter, dated the
Closing Date of an authorized officer of the City to the effect that: (i) other than as set forth in the
Official Statement, no litigation is pending or, to his or her knowledge, threatened in any court to
restrain or enjoin the execution or delivery of any of the Securities, or the application of the
proceeds of the sale of the Securities or the execution and delivery of the City Documents; and
(ii) other than as set forth in the Official Statement, there is no litigation pending, or, to his or her
knowledge, threatened against the City or involving any of the property or assets under the
control of the City wherein an unfavorable decision, ruling or finding would materially adversely
affect the ability of the City to perform its obligations under the City Documents or the
transactions contemplated thereby or the exclusion of interest due with respect to the Securities
from gross income for purposes of federal or State income taxation;
(vi)Executed copies of the City Documents;
(vii)Evidence satisfactory to the Underwriter that, as of the date of Closing, the
Securities are rated “Aa1” by Moody’s; and
(viii)Such additional legal opinions, instruments and other documents as the
Underwriter or Bond Counsel may reasonably deem necessary to evidence the due execution and
delivery of the Securities, the truth and accuracy as of the time of the Closing of the City’s
representations, warranties and agreements contained in Section 9 hereof and the due
performance or satisfaction by the City at or prior to such time of all agreements then to be
performed and all conditions then to be satisfied by the City pursuant to the City Documents.
The opinions and certificates and other material referred to above shall be in form and substance
satisfactory to the undersigned and to Dorsey & Whitney LLP, as Bond Counsel.
14.Establishment of Issue Price
(a)The Underwriter agrees to assist the City in establishing the issue price of the Securities
and shall execute and deliver to the City at Closing an “issue price” certificate substantially in the form
attached hereto as Exhibit A, together with the supporting pricing wires or equivalent communications,
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with such modifications as may be appropriate or necessary, in the reasonable judgment of the
Underwriter, the City and Bond Counsel, to accurately reflect the sales price or prices or the initial
offering price or prices of the Securities to the Public.
(b)The Underwriter confirms that the Securities have been offered to the Public on or before
the Sale Date at the specified offering price (the “initial offering price”) for each Maturity, or at the
corresponding yield or yields, set forth in Schedule I. Schedule I also sets forth, as of the Sale Date, any
Maturity at least 10% of which has been sold to the Public at a single price and the first price at which at
least 10% of each such Maturity was sold to the Public.
(c)The Underwriter confirms that it has not agreed and will not agree pursuant to a written
contract directly or indirectly with any person other than the City to participate in the initial sale of the
Securities to the Public (including a member of a selling group or a party to a retail distribution agreement
participating in the initial sale of the Securities to the Public).
(d)The Underwriter acknowledges that sales of any Securities to any person that is a related
party to the Underwriter shall not constitute sales to the Public for purposes of this Section. Further, for
purposes of this Section:
(i)“Public” means any person other than a Member of the Distribution Group or a
related party to a Member of the Distribution Group,
(ii)“Maturity” means Securities with the same credit and payment terms;
(iii)“Member of the Distribution Group” means (A) any person that agrees pursuant
to a written contract with the City (or with the Underwriter to form an underwriting syndicate) to
participate in the initial sale of the Securities to the Public and (B) any person that agrees
pursuant to a written contract directly or indirectly with a person described in clause (A) to
participate in the initial sale of the Securities to the Public (including a member of a selling group
or a party to a retail distribution agreement participating in the initial sale of the Securities to the
Public),
(iv)A person is a “related party” to a Member of the Distribution Group if the
Member of the Distribution Group and that person are subject, directly or indirectly, to (A) at
least 50% common ownership of the voting power or the total value of their stock, if both entities
are corporations (including direct ownership by one corporation of another), (B) more than 50%
common ownership of their capital interests or profits interests, if both entities are partnerships
(including direct ownership by one partnership of another), or (C) more than 50% common
ownership of the value of the outstanding stock of the corporation or the capital interests or profit
interests of the partnership, as applicable, if one entity is a corporation and the other entity is a
partnership (including direct ownership of the applicable stock or interests by one entity of the
other), and
(v)“Sale Date” means the date of execution of this Agreement by all parties.
15.Accountants’ Letter
No Accountants’ letters will be delivered in connection with the issuance of the Securities.
16.[Reserved]
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17.Termination
The Underwriter shall have the right to cancel its obligation to purchase the Securities and to
terminate this Agreement by written notice to the City if, between the Effective Date and Time to and
including the Closing Date, in the sole and reasonable judgment of an authorized official of the
Underwriter, any of the following events shall occur (each a “Termination Event”):
(a)the market price or marketability of the Securities, or the ability of the Underwriter to
enforce contracts for the sale of the Securities, shall be materially adversely affected by any of the
following events:
(i)legislation shall have been enacted by the Congress of the United States or the
legislature of the State or shall have been favorably reported out of committee of either body or
be pending in committee of either body, or shall have been recommended to the Congress for
passage by the President of the United States or a member of the President’s Cabinet, or a
decision shall have been rendered by a court of the United States or the State or the Tax Court of
the United States, or a ruling, resolution, regulation or temporary regulation, release or
announcement shall have been made or shall have been proposed to be made by the Treasury
Department of the United States or the Internal Revenue Service, or other federal or state
authority with appropriate jurisdiction, with respect to federal or state taxation upon interest
received on obligations of the general character of the Securities; or
(ii)there shall have occurred (1) an outbreak or escalation of hostilities or the
declaration by the United States of a national emergency or war, or (2) any other calamity or
crisis in the financial markets of the United States; or
(iii)a general suspension of trading on the New York Stock Exchange or other major
exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and
be in force, or maximum ranges for prices for securities shall have been required and be in force
on any such exchange, whether by virtue of determination by that exchange or by order of the
SEC or any other governmental authority having jurisdiction; or
(iv)legislation shall have been enacted by the Congress of the United States or shall
have been favorably reported out of committee or be pending in committee, or shall have been
recommended to the Congress for passage by the President of the United States or a member of
the President’s Cabinet, or a decision by a court of the United States shall be rendered, or a
ruling, regulation, proposed regulation or statement by or on behalf of the SEC or other
governmental agency having jurisdiction of the subject matter shall be made, to the effect that any
obligations of the general character of the Securities or the City Documents, or any comparable
securities of the City, are not exempt from the registration, qualification or other requirements of
the Securities Act or the Trust Indenture Act or otherwise, or would be in violation of any
provision of the federal securities laws; or
(v)except as disclosed in or contemplated by the Official Statement, any material
adverse change in the affairs of the City shall have occurred; or
(vi)any rating downgrade on securities of the City which are secured by a pledge of
the general credit of the City; or
(b)any event or circumstance shall exist that either makes untrue or incorrect in any material
respect any statement or information in the Official Statement (other than any statement provided by the
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Underwriter) or is not reflected in the Official Statement but should be reflected therein in order to make
the statements therein, in light of the circumstances under which they were made, not misleading and, in
either such event, the City refuses to permit the Official Statement to be supplemented to supply such
statement or information, or the effect of the Official Statement as so supplemented as to materially
adversely affect the market price or marketability of the Securities or the ability of the Underwriter to
enforce contracts for the sale of the Securities; or
(c)a general banking moratorium shall have been declared by federal or State authorities
having jurisdiction and be in force; or
(d)a material disruption in securities settlement, payment or clearance services affecting the
Securities shall have occurred; or
(e)any new restriction on transactions in securities materially affecting the market for
securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a
charge to the net capital requirements of, underwriters shall have been established by the New York Stock
Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by
Executive Order; or
(f)a decision by a court of the United States shall be rendered, or a stop order, release,
regulation or no-action letter by or on behalf of the SEC or any other governmental agency having
jurisdiction of the subject matter shall have been issued or made, to the effect that the issuance, offering
or sale of the Securities, including the underlying obligations as contemplated by this Agreement or by
the Official Statement, or any document relating to the issuance, offering or sale of the Securities, is or
would be in violation of any provision of the federal securities laws at the Closing Date, including the
Securities Act, the Exchange Act and the Trust Indenture Act.
Upon the occurrence of a Termination Event and the termination of this Agreement by the
Underwriter, all obligations of the City and the Underwriter under this Agreement shall terminate, without
further liability.
18.Payment of Expenses
The Underwriter shall be under no obligation to pay, and the City shall pay from available funds
or from the proceeds of the Securities (to the extent permitted under applicable law) the following: (i) all
expenses in connection with the printing of the Preliminary Official Statement, the Official Statement and
any amendment or supplement to either; (ii) all expenses in connection with the printing, issuance and
delivery of the Securities; (iii) the fees and expenses of Bond Counsel; (iv) the fees and disbursements of
the Paying Agent and its counsel; (v) all expenses in connection with obtaining a rating or ratings for the
Securities; (vi) all expenses of the City in connection with the preparation, printing, execution and
delivery, and any recording or filing, of any City Document, or any other instrument; (vii) the City’s
administrative fees; (viii) a portion of the fee and expenses of Ballard Spahr LLP, as counsel to the
Underwriter as set forth in the closing memorandum; and (ix) all other expenses and costs of the City and
Paying Agent incident to its obligations in connection with the authorization, issuance, sale and
distribution of the Securities. The Underwriter shall pay the costs of qualifying the Securities for sale in
the various states chosen by the Underwriter, all advertising expenses in connection with the public
offering of the Securities, a portion of the fee and expenses of Ballard Spahr LLP as set forth in the
closing memorandum, and all other expenses incurred by the Underwriter in connection with the public
offering and distribution of the Securities.
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19.Notices
Any notice or other communication to be given to the City under this Agreement may be given by
certified mail or by delivering the same in writing to the City at 121 North Rouse Avenue, Bozeman,
Montana 59715 Attention: Andrea Surratt, City Manager, and any notice or other communication to be
given to the Underwriter under this Agreement may be given by delivering the same in writing to the
Underwriter, 1401 Lawrence Street, Suite 900, Denver, Colorado 80202 Attention: Bryan Stelmack,
Director, or to such other addresses as one party shall furnish the other in writing for receipt of notice.
20.Governing Law
This Agreement shall be governed by the laws of the State.
21.Miscellaneous
This Agreement is made solely for the benefit of the signatories hereto (including the Underwriter
and its successors or assigns) and no other person shall acquire or have any right hereunder or by virtue
hereof. Neither the City nor the Underwriter may assign this Agreement. The term “successor” shall not
include any holder of any Securities merely by virtue of such holding. All representations, warranties and
agreements contained in this Agreement shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of the Underwriter, and shall survive the delivery of and payment
for the Securities and any termination of this Agreement. Section headings have been included in this
Agreement as a matter of convenience of reference only and are not to be used in the interpretation of any
provisions of this Agreement. If any provision of this Agreement is, or is held or deemed to be, invalid,
inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, because
it conflicts with any provisions of any constitution, statute, rule of public policy or for any other reason,
such circumstances shall not make the provision in question invalid, inoperative or unenforceable in any
other case or circumstance, or make any other provision or provisions of this Agreement invalid,
inoperative or unenforceable to any extent whatever.
22.Counterparts
This Agreement may be executed in one or more counterparts with the same force and effect as if
all signatures appeared on a single instrument.
23.Signatures
Upon execution by the City and the Underwriter, this Agreement shall be binding upon the City
and the Underwriter as of the Effective Date and Time.
24.Electronic Signatures
The parties agree that the electronic signature of a party to this Agreement shall be as valid as an
original signature of such party and shall be effective to bind such party to this Agreement. For purposes
hereof: (i) “electronic signature” means a manually signed original signature that is then transmitted by
electronic means; and (ii) “transmitted by electronic means” means sent in the form of a facsimile or sent
via the internet as a portable document format (“pdf’) or other replicating image attached to an electronic
mail or internet message.
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511
512
Schedule I-1
Schedule I
Terms of the Securities
Serial Bonds
Maturity Date
(July 1)
Principal
Amount
Interest
Rate Yield Price
2020 $ 990,000 2.000% 1.030% 100.756%
2021 1,280,000 2.000 1.010 101.747
2022 1,305,000 2.000 1.010 102.712
2023 1,330,000 3.000 1.010 107.372
2024 1,370,000 4.000 1.010 113.934
2025 1,425,000 4.000 1.070 116.395
2026 1,480,000 4.000 1.100 118.911
2027 1,540,000 4.000 1.190 120.835
2028 1,600,000 4.000 1.250 122.813
2029 1,665,000 4.000 1.320 124.526
2030 1,730,000 4.000 1.440* 123.287
2031 1,800,000 4.000 1.580* 121.860
2032 1,875,000 4.000 1.690* 120.752
2033 1,950,000 4.000 1.790* 119.756
2034 2,025,000 4.000 1.860* 119.063
2035 2,110,000 2.250 2.370 98.425
2036 2,155,000 2.375 2.430 99.243
2037 2,205,000 2.375 2.470 98.637
2038 2,260,000 2.375 2.510 97.985
2039 2,310,000 2.500 2.560 99.071
*Yield to optional redemption date of July 1, 2029.
Optional Redemption. The Securities maturing on or after July 1, 2030 are subject to optional redemption
prior to maturity, in whole or in part, in integral multiples of $5,000 on July 1, 2029, and on any day thereafter, at a
redemption price equal to one hundred percent (100%) of the principal amount thereof, plus accrued interest to the
redemption date. Such Securities shall be selected for redemption from such stated maturities and principal amounts
as the City may designate and, within a maturity, in $5,000 principal amounts selected by lot or other manner
deemed fair by the Registrar.
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A-1
EXHIBIT A
FORM OF ISSUE PRICE CERTIFICATE
$34,405,000
City of Bozeman, Montana
General Obligation Bonds
Series 2019
ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (“Stifel”), hereby certifies as set
forth below with respect to the sale of the obligations named above (the “Bonds”).
1. Initial Offering Price of the Bonds. Stifel offered the Bonds to the Public for purchase at the
specified initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date.
2. First Price at Which Sold to the Public. On the Sale Date, at least 10% of each Maturity was first
sold to the Public at the respective Initial Offering Price.
3. Defined Terms. For purposes of this Issue Price Certificate:
(a) Issuer means the City of Bozeman, Montana.
(b) Maturity means Bonds with the same credit and payment terms. Any Bonds with different
maturity dates, or with the same maturity date but different stated interest rates, are treated as separate Maturities.
(c) Member of the Distribution Group means (i) any person that agrees pursuant to a written contract
with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the
Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person
described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a
member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to
the Public).
(d) Public means any person (i.e., an individual, trust, estate, partnership, association, company, or
corporation) other than a Member of the Distribution Group or a related party to a Member of the Distribution
Group. A person is a “related party” to a Member of the Distribution Group if the Member of the Distribution
Group and that person are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power
or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of
another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are
partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership
of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as
applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the
applicable stock or interests by one entity of the other).
(e) Sale Date means the first day on which there is a binding contract in writing for the sale of the
respective Maturity. The Sale Date of each Maturity was August 28, 2019.
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate
represents Stifel, Nicolaus & Company, Incorporated’s interpretation of any laws, including specifically Sections
103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The
undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of
the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules
affecting the Bonds, and by Dorsey & Whitney, LLP in connection with rendering its opinion that the interest on the
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Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue
Service Form 8038, and other federal income tax advice that it may give to the Issuer from time to time relating to
the Bonds.
STIFEL, NICOLAUS & COMPANY, INCORPORATED
By:______________________________________
Name: Bryan Stelmack
Title: Director
Dated: September 18, 2019
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SCHEDULE A
INITIAL OFFERING PRICES OF THE BONDS
DMNORTH #6943460 v5/027602.01/00320954
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