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HomeMy WebLinkAboutResolution 4462 Sewer System Revenue bonds RESOLUTION NO, 4462 RESOLUTION RELATING T0 FIRST AMENDED AND RESTATED SEWER SYSTEM REVENUE BONDS (DN8C WATER POLLUTION CONTROL STATE REVOLVING LOAN PR0GBAM); AMENDING AUTHORIZING RESOLUTIONS ADOPTED JANUARY l9, 20{0, FEBRUARY }h, 20l0, MAY 3, 2AlA, AND NOVEMBER l, 20l0 AND BONDS 8E [1FRESOLVED by the City Cornmniseiou uf the City nf Bozeman, Montana(tbe "Issuer"), as follows: ` Section l. |.@]. Issuance of Bonds. Pursuant to Resolution No. 4220mf the Issuer mdopt- �� 6v the n�om City Cni*sinnenNovcnubcrl0, 200g (the "Original flcxo{utiom`^), mmurmcodedand supplemented by Resolution Nos. 4234 (the ^^2AlOABCRcsolction,` , 4245kbe"2O|0D 8cou)odom`l, 4254 (the "'20]8EF{} Resolutiom°), and 42g9 (t6r°2O 'ODJlem` |otion"), adopted by the <�i1y��om�mmiesjmumnJanuary 14, 2VlO, February l6, ' OUO" ��my3, 20|O, and "—November l 20l0, rewpcc�vtly0be Original Rosm!o�ou, asumumonmdcd and supplemented, the ~`Pc ` Resolutions"), the Issuer authorized, as the Original Resolution were then in effect, the o[ /ncspectiYoly` its5en/er SyeTcmlflevrouoBond (D�|[lCVVu�,Pollution Control S<-- Revolriogl.ouo Program), Series 20l0(� (the "Sedcm20}O(� ]�ood`�, �usucd in the mo--�zn000 pdnuinolan�oontmf$],223,000, itaSevverSy«te/� ]�cvcmneBood / - kLC �Vu�rpol--�oo {�omtrol0�tc ]�evo{ving Loan yrogroo�), Series 2OlADAbe "^Scrio' 2A}ODl�ood'l, i:--�dinthe rnauicouruprincipal anzuun{ of$9,500,AV0, its ScvvcrSystem Revenue Bond (D�| 'C---'-r Pnl|utinm (�motro[ S1a1c }(evm}viugLoanProgrmnm), Seriux20l0FOhe ^^Smden` 0lO[ I�'--�^l issued io the cmuximnumo 'uc��a� urn000< of�8}h 000 its 8�vv�r System Il Bond '^ ».^ " ^ ��xrmn �v�ouoBmo (Dy�8LC YymtorPollution Control State Flevo1vingLoan Prngrazn), Scdem20I0O (thr ^^8erie82Ol`G X�ond'"), issucdintbemusirouruprhncipa| un,0uoiof$3,9O3,A00. uodiTo- e`�erSymeun '-cvcoue Bond (D0�Il�� �Vatcr Pollution [o/�cnl State Revolving Loan 9rogrora), Series 20l 'B /--c ^^Sericn2Ol0�� Bund`^), issued in the rnuxiznoruprincipal aznouo\ Vf$ ',573,A0O\m finance- improvements of the rnonicipml xep/cr system and related improvements (the "Projects") as part of the municipal sewer system of the Issuer(the^ Systczo ^}, msmore particularly described in the e 0rigina| Qcan]udmn. The Series 2OKOC Bond,the Series 2010D Bond, the Series 2OlO Bond, the Series 201 OG Bond, and the Series 201 OH Bond (collectively, the "'Prior Bonds") were purchased and are currently held hy the Department nf Natural Resources and Conservation of the State of Montana (the ^DNRC^l. There are ou other bonds orindebtedness o f the Issuer that are outstanding and payable from Net Revenues of the System, except its Sewer Systern Revenue I9omd ([)NllC Water Pollution Control State Revolving Loan Progruom), Series 2OlQf� (the ^^3cries2AlVl� Rmud")~ issued in the nnaxjnmnro principal oommootof$3-9`3O0, vvhicbi`held 6y 1heD;�F<(�. Terms vvi1hinidulcapital /c�ernused but not dc�oedherein have the rnca-imgm given them in the Original Resolution. 1.02. Interest Rate Reduction. Pursuant to the Intended Use Plan for fiscal year 2013- 2014 (the ^'lOP^`) for the Water Pollution Control State Revolving Loan Program (the CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE 1, 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. 4462 entitled: "RESOLUTION RELATING TO FIRST AMENDED AND RESTATED SEWER SYSTEM REVENUE BONDS (DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM); AMENDING AUTHORIZING RESOLUTIONS ADOPTED JANUARY 19, 2010, FEBRUARY 16, 2010, MAY 3, 2010, AND NOVEMBER 1, 2010 AND BONDS" (tile "Resolution"), on file in the original records of the City in illy legal custody; that the Resolution was duly adopted by the City Commission of tile City at a rnecting on August 5, 2013, 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.-P—atioy- &ske,-K C-r- Kva!4551 Cy. 7-at4fpv-� j I ; voted against the same: \j abstained from voting thereon: or were absent: WITNESS in),hand officially this Ay of August, 2013, City lerI�.* 1�83 CC APPENDIX A [FORM OF FIRST AMENDED AND RESTATED SERIES 20100 BOND] UNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF GALLATIN CITY OF BO ZEMAN FIRST AMENDED AND RESTATED SEWER SYSTEM REVENUE BOND (DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAM PROGRAM) SERIES 201 OC No. R-2 $885,081 FOR VALUE RECEIVED, T HE CITY OF BOZEMAN, MONTANA (the "City"), a duly organized municipal corporation and political subdivision of the State of Montana, acknowledges itself to be specially indebted and, for value received, hereby promises to pay to the Department of Natural Resources and Conservation of the State of Montana (the IDNRC"), or its registered assigns, solely from the Revenue Bond Account of its Sewer System Fund, the principal surn of $885,081, with interest on such amount from the date hereof at the rate of two percent (2.00%) per annum on the unpaid balance until paid. In addition, the City shall pay an Administrative Expense Surcharge and a Loan Loss Reserve Surcharge on t he outstanding principal amount of this Bond at the rates of seventy-five hundredths of one percent (0,75%) and twenty-five hundredths of one percent (0.25%), respectively, per annum. Interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall be payable in semiannual installments payable on each January I and July I (each a "Loan Repayment Date") commencing January 1, 2014. Each installment shall reflect all interest rate of three percent (3,00%) per annum and shall be in the amount set forth opposite its due date in Schedule A hereto under "Total Loan Payment." The portion of each such payment consisting of principal, the portion consisting of interest, the portion consisting of Administrative Expense Surcharge, and the portion consisting of Loan Loss Reserve Surcharge shall be as set forth in Schedule A hereto. Past-due payments of principal, interest, Administrative Expense Surcharge, Loan Loss Reserve Surcharge shall bear interest at the rate of tell percent (10.00%) per annual, until paid. Interest, Administrative Expense Surcharge, and Loan Loss Reserve Surcharge shall be calculated on the basis of a 360-day year comprising 12 months of 30 days each. All payments under this Bond shall be made to the registered holder of this Bond, at its address as it appears on the Bond register, in lawful money of the United States of America, This Bond constitutes a series in the maximum authorized principal amount of $1;223,000 (the "Series 20100 Bond"), issued to finance a portion of the costs of construction of certain improvements to the sewer system of the City (the "System"), to fund the Reserve Account, and to pay costs of issuance of the Series 20100 Bond. The Series 20100 Bond is issued pursuant to and in full conformity with the Constitution and laws of the State of Montana thereunto enabling, including Montana Code Annotated, Title 7, Chapter 7, Part 44 and 45, as A-1- amended, and resolutions duly adopted by the governing body of the City, including Resolution No. 4220 duly enacted by the City Commission on November 16, 2009, a s amended and supplemented by Resolution Nos. 4234, 4245, 4 254, 4299, and 4462 adopted on January 19, 2010, February 16, 2010, May 3, 2010,Noven-iber 1, 2010, and August 5, 2013, respectively (the Original Resolution, as so amended and supplemented, the "Resolution"). T lie Series 20100 Bond is issuable only as a single, fully registered bond. The Series 20100 Bond is issued oil a parity and is equally and ratably secured by the Net Revenues of the Systern with the City's outstanding $359.300 Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 2010E (the "Series 2010B Bond"), First Amended and Restated Sewer Systern Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 201 OD (the "Series 201 OD Bond"), First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 2010E (the "Series 201 OF Bond"), First Amended and Restated Sewer Systern Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 2010E (the "Series 201OG Bond"), and First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 201 OH (the "Series 201 OH Bond"). Tile Series 201 OD Bond, the Series 20 1 OF Bond, the Series 201 OG Bond, and the Series 201 OH Bond are being issued simultaneously herewith. Reference is made to the Resolution for a more complete staternent of the terms and conditions upon which the Series 201 OC Bond has been issued, the Net Revenues of the System pledged and appropriated for the payment and security thereof, the conditions upon which additional bonds may be issued under the Resolution and made payable frorn such Net Revenues on a parity with the Series 20108 Bond, the Series 201 OC Bond, the Series 201 OD Bond, the Series 201 OF Bond, the Series 201 OG Bond, and the Series 201 OH Bond (collectively, the "Bonds") or otherwise, the conditions upon which the Resolution may be amended, the rights, duties and obligations of the City, and the rights of the owners of the Series 201 OC Bond, The City may prepay the principal of the Series 20100 Bond only if(i) it obtains the prior written consent of the DNRC thereto, and (ii) no Loan Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent. A ny prepayment permitted by the DNRC must be accompanied by payment of accrued interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the amount of principal prepaid. If the Series 201 OC Bond is prepaid in part, such prepayments shall be applied to principal payments in inverse order of maturity, The Bonds, including interest and any premium for the redemption thereof, are payable solely frorn the Net Revenues pledged for the payment thereof and do not constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation or provision. The City may deern and treat the person in whose name this Series 20100 Bond is registered as the absolute owner hereof, whether this Series 20100 Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and the City shall not be affected by any notice to the contrary. A-2- |T }6 HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has fixed and established and will collect reasonable rates and charges for the services and facilities afforded by the System, and has created ospmuioi Sewer Sym1con Fund into which the gross revenues of the System, including all additions thereto and rey|aocmuno1m and improvements thereof, will be paid, and usspom }� separate o�oc�uI evooutBond Account in that fund, into vvbioh will be paid each rnooT6, Net 5(cvemuom of the System then on hand (the gross revenues remaining after the payment of Operating Expenses nfthe Syotcco), iomnmoz"untequal to not less than the su/n of one-sixth of the interest due within the ocx1 six months and one- twelfth of the principal doe within the next twelve months with respect to all outstanding Bonds payable oemli-000ua}|Y frono that oocoumt, and a Reserve /\cupoot (the "Reserve-) into which shall be paid additional Net Revenues sufficient to cn1xbliob and maintain u reserve therein equal {o, as of the date of calculation, the Reserve Requirement; that the Revenue Bond Account and the Reserve will be used only tu pay the principal o[ preco|um, if any, and interest on the Bonds issued pursuant to the authority herein recited; that the rates and charges for the System will frorn time totiroebo made and kept sufficient toprovide gross income and revenues adequate 1npay promptly the reasonable and current expenses of operating and 000im1cioiog the Sy*troo and to produce in each fimuuIyear Net Revenues ;m excess of such current expenses equal to \25Y6mf the principal and interest payable from the Revenue Bond Account iu any subsequent fiscal year, to roaio\eio the balance in the Reserve at the 8nme,vc Requirement, to pay promptly the reasonable and current expenses nf operating and maintaining the System, tm pay the principal of and io1erco( nnmny Subordinate Obligations and to provide reserves for the rcp|aomrneot and depreciation of the 8ystcno; that additional I)nudn and refunding Bonds rnmyhe issued and made payable {r)mothe Revenue Bond Account oou parity with the Bonds upon certain conditions set forth in the Bcun\utiom but no obligation will be nthc/pvine incurred and onodo payable from the Net ]Itveouco, uo)cmm the lien thereof shall be expressly made subordinate to the lien of the Bonds and other additional Bonds om such Net Revenues; that all provisions for the eccmd{y of this 8ohus 2010C Bond set {bUh in the Resolution will be punctually and faithfully performed as therein stipulated; that all acts, conditions and things required by the Constitution and laws ofthe State of Montana and the ordinances and resolutions of the City to be done, To exist, to happen and to be performed in order to make this Series 2010[ Bond m valid and binding special obligation of the City according to its terms have been done, do exist, have happened and have been performed as so required; and that this Sccica 2010C Bond and the premium, if any, and interest |zcrenm are payable solely fro,m the Net Revenues of the Systezn pledged and appropriated 10 the Revenue Bond Account and do not constitute a debt of the City within the oncuninA of any constitutional, statutory *rcharter limitation or provision and the issuance of the Series 20|0C 800U does not uuoso either the general or the mpcoin[ indebtedness of the City to esoccd any constitutional, statutory or charter limitation. A-3- IN WITNESS WHEREOF, the City of Bozeman, Montana, by its governing body, has caused this Bond to be executed by the signatures of its signatures of the Mayor, the Finance Director and the City Clerk, and has caused the official sea] of tile City to be affixed hereto, and has caused this Bond to be dated as of the 21 st day of August, 2013. Mayor (SEAL) 01. a 4 Ci 7 Finance nance Di e tor 40 A L11N'�X' City Clerk,b&p"� A-4- "Prograrn"), the DNRC and the Department of Environmental Quality of the State of Montana have determined that it is in the best interests of borrowers of loans 'nade under the Program and the Program to reduce the interest rates available under the Program. 1.03. Reduction in Interest Rate on Prior Bonds, It is proposed that debt service on the Prior Bonds be reduced in accordance with the interest rate reduction proposal under the ]UP, thereby reducing the interest rate on (i)the Series 20100 Bond from three and three-quarters percent (3.75%)per annun to three percent(3.00%) per annu-n from and after the date of delivery of the First Amended and Restated Series 20100 Bond; (ii) the Series 2010D Bond from three and three-quarters percent (3.75%) per annr►m to three percent (3.00%)per annum from and after the date of deliver), of the First Amended and Restated Series 2010D Bond; (iii)the Series 20101" Bond from three and three-quarters percent (3.75'%,) per annun to three percent (3.00%) per annum fi-orn and after the date of delivery of the First Amended and Restated Series 2010F Bond; (iv) the Series 2010E Bond from three and three-quarters percent(3.75%) per annum to three percent (3.00%) per annunn from and after the date of delivery of the First Amended and Restated Series 2010G Bond; and (v) the Series 2010H Bond from three and three-quailers percent (3.75%)per annum to three percent (3.00%) per annum from and after the date of delivery of the first Amended and Restated Series 2010H Bond. Section 2. Amendment of Original Resolution. 2.01. Authorization. The Issuer, in Section 13.4 of the 2010ABC Resolution, Section 12.4 of the 2010D Resolution, Section 13.4 of the 2010EFG Resolution, and Section 12.4 of the 2010H Resolution, reserved the right to amend such resolutions upon notice to and with the consent of the DNRC. 2.02. Consent of DNRC. The DNRC has agreed to the amendment of certain provisions of such resolutions in connection with the determination to reduce certain interest rates under the Program. 2.03. Amendment of C)riainal Resolution. Pursuant to the authority cited in Sections 2.01 and 2.02 of this resolution, (a) The 2010ABC Resolution is hereby amended effective as of the date of delivery of the First Amended and Restated Series 2010E Bond (as hereinafter defined)to read as follows: (i) all references to the aggregate interest rate, or that interest rate that includes the interest rate and all surcharges, on the Series 20100 Bond are hereby amended to read 3.00%b per annum, instead of 3.75% per annum; (ii) the interest rate on the Series 20100 Bond exclusive of any surcharges will continue in effect at 2.00%per annum; (iii) the administrative expense :surcharge on the Series 20100 Bond will continue in effect at 0.75%per annum; and (iv) all references to the loan loss reserve surcharge on the Series 20100 Bond are hereby amended to read 0.25%per annum, instead of 1.00%per annum; and (ii) the total principal amount of the First Amended and Restated Series 20100 Bond is $885,081. -2- (b) The 201 OD Resolution is hereby amended effective aonfthe date of delivery of the First Amended and Restated Series 2OlOD Bond (as bereimafter defined) no read asfollows: (i) all rrforcoueo to the 4ggzmgu1c interest rate, or that im{nreyT rate that includes the interest rate and all surcharges, on the Series 20|0D Bond are hereby anncodcd to read 3.00%per annunn, instead of3.75%per annum; (ii) the interest rate omthe Series 2A10[} Bond exclusive o{any surcharges will continue io effect nt2.0O%per omnmcn; (iii� 1�e udrmioimL�t|*e expense surcharge oothe Series 2010D Bond will continue in effect at 0.75% per annum; and (iv) all references tothe |nuo loss reserve surcharge on the Series 20|OZ} Bond are hereby amended to read A.25%per annum, instead 0f].00% per annum-, and /ii>the total principal amount of the First Amended and Restated Series 20lOI} Bond is $8,3A8'00O' (o) Tile 20l0BFG Resolution io hereby amended effective ouof the date nf delivery of the First Amended and Restated Series 2Ol0F Bond (as hereinafter defined) 1n read usfollows: (i) all references to the aggregate interest rate, or that interest rate that includes the interest rate and uU1 surcharges, onthe Series 30lVF Bond are hereby amended to read 3.OQ%per annum, instead of3.75%per annum, (iDthe interest rate mothe Series 2O\AF Bond exclusive of any surcharges will continue in effect ui2.O0%per annum; (�ib1hc effect ai 0.75%per mmoo/n; and (iv) all references to the loan loss reserve surcharge on the Scr|ty 20]0F Bond are hereby amended tu read 8.25%per annum, instead of).00% per anourn; and (ii)the total principal amount nf the First Amended and Restated Series 2O\OF Bond iy $72A,A00. (d) The 20 1 OEFG Resolution is hereby further amended effective as of the date of delivery of the First/\nncmdmd and }tcoturod Series 201 O Bond (as hereinafter defined) 10 read as follows: ' /i\al| references to the aggregate interest rato, or that io/mrevT rate that includes the interest rate and all surcharges, on the Series 201OG Bond are hereby amended to read ].0096 per umnmnn, instead of3.75%per au000m; (ii) the interest rate oothe Series 20l0{] Bond exclusive ofan), surcharges will continue |n effect o12.AA%per anouzn; (iiD\be rn o� inixtoedve expense yurc|�aqgconthe Series 20l0(� Bond will continue ine�e' at O.75Y6 per annum; and (iv) all references to the loan \uws reserve onztberge on tile Series 20lA(]Bond are hereby amended tm read A.25Y6 per 0omurn, instead of7.0O%per mmunz; and (ii) the total principal amount mf the First Amended and Restated Series 201 O Bond is $3,558,000. (c) The 201 OH Resolution is hereby amended effective as of tile date of delivery of the First Amended and 8omtu1cd Series 201 OH 0mod /us hereinafter defined)to nuud as follows: � -3- (i) all references to the aggregate interest rate, or that interest rate that includes the interest rate and all surcharges, on the Series 201 OH Bond are hereby amended to read 3.00% per annum, instead of 3.75% per annum; (ii) the interest rate on the Series 2010H Bond exclusive of any surcharges will continue in effect at 2.00%per annum; (iii) the administrative expense surcharge on the Series 2010H Bond will continue in effect at 0.75% per annum: and (iv) all references to the loan loss reserve surcharge on the Series 2010H Bond are hereby amended to read 0,25%per annum, instead of 1.00%per annum; and (ii) the total principal amount of the First Amended and Restated Series 2010H Bond is $8,692,000. (f) Except as expressly noted herein, other interest rates or surcharges are not adjusted, including, without limitation, interest on past due amounts. 2.04. Amendment of Forms of Bonds. Pursuant to the authority cited in Sections 2.01 and 2.02 of this resolution, effective as of the date of delivery of each series of amended and restated bonds, the Series 2010C Bond attached as Appendix B-3 to the 201 OABC Resolution is hereby amended and restated in its entirety substantially as set forth on the attached Appendix A (the "First Amended and Restated Series 20100 Bond"), the Series 201 OD Bond attached as Appendix B to the 201 OD Resolution is hereby amended and restated in its entirety substantially as set forth on the attached Appendix B (the"First Amended and Restated Series 20 1 OD Bond"), the Series 2010F Bond attached as Appendix B,-2 to the 201 OEFG Resolution is hereby amended and restated in its entirety substantially as set forth on the attached Appendix C (the "First Amended and Restated Series 2010F Bond"),the Series 2010E Bond attached as Appendix B-3 to the 201 OEFG Resolution is hereby amended and restated in its entirety substantially as set forth on the attached Appendix D (the "First Amended and Restated Series 2010G Bond"), and the Series 2010H Bond attached as Appendix B to the 2010H Resolution is hereby amended and restated in its entirety substantially as set forth on the attached AP2endix E (the"First Amended and Restated Series 201014 Bond"). 2,05. Effect of Amendments. Except as amended by Sections 2.03 and 2.04 of this resolution, the Original Resolution shall remain unamended and, frorn and after the date of delivery of the First Amended and Restated Bonds (as hereinafter defined), shall continue in full force and effect as amended by Sections 2.03 and 2.04 of this resolution for the benefit of the holders from time to time of the First Amended and Restated Bonds, the Series 20 1 OB Bond, and any additional Bonds that may be issued thereunder. Section 3. Preparation and Delivery of First Amended and Restated Bonds, Tile First Amended and Restated Series 2010C Bond,the First Amended and Restated Series 2010D Bond, the First Amended and Restated Series 2010E Bond, the First Amended and Restated Series 2010E Bond, and the First Amended and Restated Series 2010H Bond (collectively, the "First Amended and Restated Bonds") shall be prepared under the direction of the City Finance Director of the Issuer and shall be executed on behalf of the Issuer by the signatures of the Mayor, the City Finance Director, and the City Clerk of the Issuer and scaled with the official corporate seal of the Issuer. When the First Amended and Restated Bonds have been executed, the City Finance Director of the Issuer shall cause them to be dated as of the date of delivery and -4- delivered 10 the l)N}lC, aopurchaser thereof, in anticipation ^f the surrender ofthe corresponding Prior Bond. TbeCi|v Finance Director ip authorized and directed tV act mpbond registrar io connection with the First Amended and Restated Bonds. Section 4. The City Finance Director of tbe Issuer im authorized and directed to transfer amounts |n the Revenue Bond Account iopay interest owing oo the Prior Bonds usof the date of delivery of the First Amended and Restated Bonds. The City Finance Director ofthe lxnmcr is further authorized and directed to transfer amounts made available in the Reserve Account 6ecmmoo of the foregoing interest rate adjustments to the Revenue Bond Account&oprepay any one nx more Prior Bonds uaOf tile date of delivery of the First Amended and Restated Bonds, to transfer arnounts to the Revenue Bond Account to pay interest on the First Amended and Restated Bonds on January 1, 2014,to pay costs of issuance of the First Amended and Restated Bonds. , or to any other eligible fund or account or for any other eligible purpose, as described more particularly in certificates or documents delivered in conjunction with the delivery of the First Amended and Restated Bonds. Section 5. Tax Matters. 5.0K. General Covenants. The Issuer covenants and agrees with the owners from time to time of the First Amended and Restated Bonds that it will not take or permit tobe taken 6% mo), of its officers, employees or agents any action which would cause the interest uothe First Amended and Restated Bonds to become includable io gross income for federal income tax purposes under the Internal Revenue Code of 1986, as amended 8he "Code"), and applicable Treasury Regulations (the "Regu|etioms"), and covenants to take aoI and all actions within its powers to ensure that the interest on the First Amended and Restated Bonds will not boco/np includable in gross income for federal incorne tax purposes under the Code and the Regulations. The Projects and the System are each owned and maintained by the Issuer and available for use hy members nf the general public moa substantially equal basis. The Issuer agrees not 1venter into any |uume, use or other agreement with any omo-gwneomrocotaA person relating 1othe use of the Projects orthcSymiczoorwccurityfbrUhe payment ofthe First Amended and Restated Bonds which might cause the First Amended and Restated Bonds to be considered "private activity bonds" or"Private loan bonds"within the meaning nf Section l4lnf the Code. 5.02. Arbitraize Rebate. The City acknowledges that the First Amended and Restated Bonds are subject tm the rebate requirements nf Section l48(f) of the Code. The City covenants and agrees tn retain such records, make such d#1mrnmi nations, file such reports and documents and pay such amounts at such times as are required under said Section 148(f) and applicable Treasury Regulations to preserve the exclusion of interest om the First Amended and Tle:1a1md Bonds from gross income for federal income tax purposes. In furtherance of the foregoing, the Mayor, the City Finance Director, and the City Clerk are hereby authorized and directed to execute m Rebate Certificate, substantially inthe form nf the Rebate Certificate prepared hvl�ood Counsel and the <�ityhereby covenants and agrees tu observe and perfhrm� the covenants and agreements contained therein, unless enncodmU or terminated in accordance with the provisions 1hercof. 5.03. Certification. The Mayor, the City Finance I)i[eo1or^ and tho City Clerk of tile Issuer, being the officers of the Issuer charged with the responsibility for issuing the First -5- Amended and Restated Bonds pursuant to this resolution, are authorized and directed to execute and deliver to the DNRC certifications tosatisfy the provisions o{Sections 1.148-2(b) of the Treasury Regulations relating 1oa reasonable expectation that the proceeds o[the First Amended and Restated Bonds will be used iomon000er that will not cause Uhorotobc arbitrage bonds, 5.04. Information ReportiLig. The Issuer shall fi}c with the Secretary oftile Treasury. not later than November 15, 2013, n etndonmeo1 concerning the First Amended and Restated Bonds containing the }nKormodno required by Section 149(e) of tile Code. 5.05. No Bank Qualification.or Counting-of Reissued Bonds Toward Qualified Small Status.Issuer . , the extent -the First Amended and Restated Bonds constitute ^ ,e/suumuccw/ the Prior Bonds, such nriouuanctiondtcroed current refunding. The principal amount ofthe First Amended and Restated Bonds that constitutes a reissuance does not exceed the principal amount of the nm7xtomdiog Prior Elmmdo being reissued. Accordingly, pursuant in Section 265/b\(3)(C)(iU8}0mf the Code, that portion ofthe First Amended and Restated Bonds that constitutes a ,eisumaocc is hereby not taken into mcoomm1 in determining the ]oowcr^m status as a qualified small issuer under Section 265(b)/3\ of the Code. The First Amended and Restated Bonds are not designated me "qualified tax-exempt mh\jgati*om." Section 6. Pro rarn Covenants. The Issuer agrees that (i) neither iT nor any"related perpon"tothc Issuer(within the meaning ofSection l47(a)/2\ nf the Code) shall, whether pursuant tou formal or informal arrangement, acquire bonds issued by the State under the Trust Indenture for the Program in an amount related to the amount of the First Amended and Restated Bonds; and (ii) that portion ofthe issuance o[the First Amended and Restated Bonds that imu reinnuamccof the Prior Bonds constitutes a ^^deennmd" refunding of the Prior Bonds effective aso[ the date nf delivery o{the First Amended and Restated Bonds and, as tn that portion, the DNRC shall bcdecnocd to have relent the proceeds of the Prior Bonds under the Program to the Issuer effective asofsuch date, Section 7. Certification and Effective Date, 7'01. Certification. The officers of tile Issuer are authorized and directed to prepare and furnish to dbo Dl4RC and to the attorneys rendering an opinion as to The legality of the First Amended and Restated Bonds, certified copies of all ordinances, resolutions and records and such other certificates, affidavits and ot/zc[ instruments as may be required to evidence the validity, status of tax-exempt interest, or marketability o[the First Amended and Restated Bonds and all such certified copies, certificates and affidavits shall constitute representati oils of the Issuer onto the truth ofall statements n[fact contained therein, 7.02. Effective Date. This resolution shall be in full force and effect from and after its passage. The amendments to the First Amended and Restated Bonds noted herein, however, shall be effective only from and after the date of delivery of the First Amended and Restated Bonds. -6- Adopted by the City CoInnroission of the City of Bozeman, Montana, on this 5th day of August., 2013. J � a 4VI Mayor Attest. City e1 " co (SEAL) -7- REGISTRATION AND TRANSFER This Bond ahuJ| be fully registered as to both principal and interest. No trmmmter of this Bond shall be valid unless and until (1) the registered holder of the Bond. or his duly authorized ottonncynr }cgm| n:prcneotm1ive, rxecotcs1hefonnofoasignncm1sppeariogmnihioBoud, uud (2) the City Finance Director. as bond registrar (the "Registrar"), has duly noted the transfer oil the Bond and recorded the transfer oil the Registrar's registration books. The Issuer shall bcentitled to dmon and treat the person in vv6osc name this Bond is registered as absolute owner thereof for all purposes, notwithstanding any notice tothe contrary, Payments Vn account mfthe Bond abo|[ be made only to the order of the registered holder thereof, and all such Peyconu1s shall be valid and effectual to ao1imfv and discharge the Issuer's liability upon the Bond to the extent of the sum mrmu/na so paid. REGISTER The ownership of the unpaid Principal Balance of this Bond and the interest accruing thoo:om is ccgi0(crod oil the books of the City of Bozeman, Montana in the oaroc of the registered holder appearing on the first page hereof orus last noted bc}nvv: Date of Name and Address Signature of Registration of Registered Holder City Finance Director oe Augu,st..2. .... 2013 Department of Natural Resour�es and Conservation 1625 Eleventh Avenue Helena...MT 59620 THE FOLLOWING EY4?[{}2S ARE TO BE MADE ONLY BY THE BOND REGISTRAR UPON REGISTRATION 0FEACH TRANSFER The City Finance Director of the City of Bozernan, Montana, acting as Bond Registrar, has transferred. oil the books of the Issuer, oo the date 1un�omt�d ���ovv, ovvmcos}�ipofthe principal amount ofand the accrued interest on this Bond to the new registered holder noted next to such date, except for amounts o[principal and interest theretofore paid. Date of Transfer Narne of New Registered Holder Signature of Bond Registrar A-5- FORM OF ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatsoever, A-6- SCHEDULE A Loan Loss Administrative Reserve Total Loan Date Principal Interest Expense Surcharge SurchAMe Payment A-7- APPENDIX B [FORM OF FIRST AMENDED AND RESTATED SERIES 2010D BOND] UNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF GALLATIN CITY OF BOZEMAN FIRST AMENDED AND RESTATED SEWER SYSTEM REVENUE BOND (DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM) SERIES 201 OD No. R-2 $8,308,000 FOR VALUE RECEIVED, T HE CITY OF BOZEMAN, MONTANA (the "City"), a duly organized municipal corporation and political subdivision of the State of Montana, acknowledges itself to be specially indebted and, for value received, hereby promises to pay to the Department of Natural Resources and Conservation of the State of Montana (the "DNRC"), or its registered assigns, solely from the Revenue Bond Account of its Sewer System Fund, the principal sum of$8,308,000, with interest on such arnount from the date hereof at the rate of two percent (2.00%) per annum on the unpaid balance until paid. In addition, the City shall pay an Administrative Expense Surcharge and a Loan Loss Reserve Surcharge on t he outstanding principal amount of this Bond at the rates of seventy-five hundredths of one percent (0.75%) and twenty-five hundredths of one percent (0.25%), respectively, per annum. Interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall be payable in semiannual installments payable on each January I and July I (each a "Loan Repayment Date") commencing January 1, 2014. Each installment shall reflect an interest rate of three percent (3.00%) per annum and shall be in the amount set forth opposite its due date in Schedule A hereto under "Total Loan Payment." The portion of each such payment consisting of principal. the portion consisting of interest. the portion consisting of Administrative Expense Surcharge and the portion consisting of Loan Loss Reserve Surcharge shall be as set forth in Schedule A hereto. Past-due payments of principal, interest, Administrative Expense Surcharge, and Loan Loss Reserve Surcharge shall bear interest at the rate of ten percent (10.00%) per annum, until paid. Interest, Administrative Expense Surcharge, and Loan Loss Reserve Surcharge shall be calculated on the basis of a 360-day year comprising 12 months of 30 days each. All payments under this Bond shall be made to the registered holder of this Bond, at its address as it appears on the Bond register, in lawful money of the United States of America. This Bond constitutes a series in the maximum authorized principal amount of $9,500,000 (the "Series 201 OD Bond"), issued to finance a portion Of the costs of construction of certain improvements to the sewer system of the City (the "System"), to make a d eposit to a reserve account for the Bonds and to pay costs of issuance of the Series 201 OD Bond. The Series 2010D Bond is issued pursuant to and in full conformity with the Constitution and laws of the State of Montana thereunto enabling, including Montana Code Annotated, Title 7, Chapter 7, B-1- Pail 44 and 45, as mmnmdcd, and resolutions duly adopted by the governing body of tile Cityt including Resolution No. 432Oduly enacted hw the City Commission un November }0. 2RO9^ un amended and supplemented by Resolution Nos. 4234, 4245,4254, 4299, and 4462 adopted oil ]monory 19, 2010, February 16, 2010, May 3, 20]0, November 1, 2010, and August 5, 2013~ respectively (tile Original Resolution, moom amended and supplemented, the ^^FteaV}u1iom"). The Series 2O|0C Bond iuissmab)o only ama single, fully registered bond. The Series 2Al0[) Bond im issued on a parity and is equally and ratably secured by the Net Revenues of the System with the City's outstanding $359,3DO Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 2010B (the ^^6criea 20108 Bond'*), First /\oomodod and Bcm1atmd Sewer System f(cvcouc Bond (IJN]lC Water Pollution Control State Revolving Loan Program), Series 201 O (the "Series 201 O Bond"), First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 201 OF (dmc "Series 201UF Bond"), First Amended and Restated Scvvcr Byotero TleYeooc Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 20IOG (the "Series 201QG Bond"), and First Amended and Restated Sewer System Revenue Bond ([}NQC Water Pollution Coo1zv] State Revolving Loan Poogromn), Series 20lOff (the "Series 2Ol0H Bond"). The Series 2010C Bond, the Series 2O|OF Bond, tile Series 20]8{} Bond, and the Series 2010H Bond are being issued simultaneously herewith. Ac0:,cnoe is made to the Resolution for arno,e complete r1a1ernco1 of the terms and conditions upon which the Series 20101] Bond has been issued, tile Net Revenues of the System pledged and appropriated for the payment and security thoromf, the conditions upon vv6icb additional bonds may be issued under the Deomlm<iuo and made payable f}nnz such Net Revenues on parity with the Series 201 O Bond, the Series 201 0C Bond, tile Sccima 201 OD Bond, the Series 2OlOF Bond` the Series 20l O(] Bond, and the Series 2010B| Bond (collectively, the °^0omds`) or otherwise, the conditions upon which the RemV]otimo may be amended, the rights, duties and obligations of the City, and the rights of the owners of the Series 20l0DBond. The City may prepay the principal nf the Series 2Ol0I) Bond only if(i) itobtains the prior written consent of the I>NQC thereto, and (ii) no Loan Repayment or Administrative Expense Surcharge or Loan l.ouo f<cxervc Surcharge is dzeo delinquent. /\ ny pnnpaYonmn1 permitted by the [}NRC moyJ be accompanied by payroeot of accrued iotmccmi and Administrative Expense Surcharge and Loan Loss Reserve Surcharge tothe dmdc of prepayment oil the mn000t of principal pncpaid, If the Series 2010[) Bond is prepaid in part, such prepayments shall be applied to principal payments in inverse order of maturity. The Bonds, including io1emcmt and any prenniunm for the redemption thorcof, are payable nmloUy from the Net flcveuocm pledged for the pnyrnooL thereof and do not constitute u debt of the City within the meaning of any constitutional, statutory or c}ze,tor limitation or provision. The City may dcemo and treat the person iu whose omozo this Series 20]0D Bond io registered as the ahumlu1n owner hereof, whether this Sczioa 201 OD Bond is overdue or not, for the purpose of receiving payrilent and for all other purposes, and the City shall not be affected by any notice to the contrary. B-2- IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has fixed and established and will collect reasonable rates and charges for the services and facilities afforded by the System, and has created a special Sewer Systern Fund into which the gross revenues of the System, including all additions thereto and replacernents and improvements thereof, will be paid, and a separate and special Revenue Bond Account in that fund, into which will be paid each month, Net Revenues of the Systern then on hand (the gross revenues remaining after the payment of Operating Expenses of the System), in an arnount equal to not less than the surn of one-sixth of the interest due within the next six months and one- twelfth of the principal due within the next twelve months with respect to all Outstanding Bonds payable semi-annually from that account, and a Reserve Account (the "Reserve") into which shall be paid additional Net Revenues sufficient to establish and maintain a reserve therein equal to, as of the date of calculation, the Reserve Requirement; that the Revenue Bond Account and the Reserve will be used only to pay the principal of, prernium, if ally, and interest on the Bonds issued pursuant to the authority herein recited; that the rates and charges for the Systern will from tirne to tirne be made and kept sufficient to provide gross income and revenues adequate to pay promptly the reasonable and current expenses of operating and maintaining the System and to produce in each fiscal year Net Revenues in excess of such current expenses equal to 125% of the principal and interest payable from the Revenue Bond Account in any subsequent fiscal year, to maintain the balance in the Reserve at the Reserve Requirement, to pay promptly the reasonable and current expenses of operating and maintaining the System, to pay the principal of and interest on any Subordinate Obligations and to provide reserves for the replacement and depreciation of the System; that additional Bonds and refunding Bonds may be issued and made payable frorn the Revenue Bond Account on a parity with the Bonds upon certain conditions set forth in the Resolution but no obligation will be otherwise incurred and made payable frorn the Net Revenues, unless the lien thereof shall be expressly made subordinate to the lien of the Bonds and other additional Bonds on such Net Revenues; that all provisions for the security of this Series 201 OD Bond set forth in the Resolution will be punctually and faithfully performed as therein stipulated; that all acts, conditions and things required by the Constitution and laws of the State of Montana and the ordinances and resolutions of the City to be done, to exist, to happen and to be performed in order to make this Series 2010D Bond a valid and binding special obligation of the City according to its terms have been done, do exist, have happened and have been performed as so required; and that this Series 2010D Bond and the premium, if an),, and interest hereon are payable solely from the Net Revenues of the Systern pledged and appropriated to the Revenue Bond Account and do not constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation or provision and the issuance of the Series 2010D Bond does not cause either the general or the special indebtedness of the City to exceed any constitutional, statutory or charter limitation. 13-3- IN WITNESS WHEREOF, the City of Bozeman, Montana, by its governing body, has caused this Bond to be executed by the signatures of its signatures of the Mayor, the City Finance Director, and the City Clerk, and has caused the official seal of the City to be affixed hereto, and has caused this Bond to be dated as of the 21 st day of August, 2013. Mayor 0 (SEAL) -5 Ci inanceD' e tor City Jerk, DO-P"-I) B-4- REGISTRATION AND TRANSFER This Bond shall be full), registered as to both principal and interest. No transfer of this Bond shall be valid unless and until (1) the registered holder of the Bond, or his duly authorized attorney or legal representative, executes the form of assignment appearing on this Bond, and (2) the City Finance Director, as bond registrar (the "Registrar"), has duly noted the transfer on the Bond and recorded the transfer on the Registrar's registration books. The Issuer shall be entitled to deem and treat the person in whose narne this Bond is registered as absolute owner thereof for all purposes, notwithstanding any notice to the contrary. Payments on account of the Bond shall be made only to the order of the registered holder thereof, and all such payments shall be valid and effectual to satisfy and discharge the Issuer's liability upon the Bond to the extent of the surn or sums so paid. REGISTER The ownership of the unpaid Principal Balance of this Bond and the interest accruing thereon is registered on the books of the City of Bozeman, Montana in the name of the registered holder appearing on the first page hereof or as last noted below: Date of Name and Address Signature of Registration of Registered Holder City Finance Director August 21, 2013 Department of Natural Resources and Conservation 1625 Eleventh Avenue Helena, MT 59620 THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND REGISTRAR UPON REGISTRATION OF EACH TRANSFER The City Finance Director of the City of Bozeman, Montana, acting as Bond Registrar, has transferred, on the books of the Issuer, on the date last noted below, ownership of the principal amount of and the accrued interest on this Bond to the new registered holder noted next to such date, except for amounts of principal and interest theretofore paid. Date of Transfer Narne of New Registered Holder Signature of Bond Registrar B-5- FORM OF ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof, with full power o[Substitution in the pccnnzmem. Dated: Notice, The assignor's signature {o this assignment roust correspond with the onrueumit appears upon the face n[ the within Bond in every paoioulmr, without alteration or any change whatsoever. ff-6- SCHEDULE A Lean Loss Administrative Reserve Total Loan Date Principal Interest Expense Surcharge Surcharge Pa rent B-7- APPENDIX C [FORM OF FIRST AMENDED AND RESTATED SERIES 2010F BOND] UNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF GALLATIN CITY OF BOZEMAN FIRST AMENDED AND RESTATED SEWER SYSTEM REVENUE BOND (DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM) SERIES 2010E No. R-2 $729,000 FOR VALUE RECEIVED, T HE CITY OF BOZEMAN, MONTANA (the -City"), a duly organized municipal corporation and political subdivision of the State of Montana, acknowledges itself to be specially indebted and, for value received, hereby promises to pay to the Department of Natural Resources and Conservation of the State of Montana (the "DNRC"), or its registered assigns, solely from the Revenue Bond Account of its Sewer System Fund, the principal sum of $729,000, with interest on such amount from the date hereof at the rate of two percent (2,00%) per annum on the unpaid balance until paid. In addition, the City shall pay an Administrative Expense Surcharge and a Loan Loss Reserve Surcharge on t lie outstanding principal amount of this Bond at the rates of severity-five hundredths of one percent (0.75%) and twenty-five hundredths of one percent (0.25%), respectively, per annum. Interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall be payable in semiannual installments payable on each January I and July I (each a "Loan Repayment Date") commencing January 1, 2014. Each installment shall reflect an interest rate of three percent (3,00%) per annum and shall be in the amount set forth opposite its due date in Schedule A hereto under "Total Loan Payment." The portion of each such payment consisting of principal, the portion consisting of interest, the portion consisting of Administrative Expense Surcharge, and the portion consisting of Loan Loss Reserve Surcharge shall be as set forth in Schedule A hereto. Past-due payments of principal, interest, Administrative Expense Surcharge, and Loan Loss Reserve Surcharge shall bear interest at the rate of ten percent (10.00%) per annum, until paid. Interest, Administrative Expense Surcharge, and Loan Loss Reserve Surcharge shall be calculated on the basis of a 360-day year comprising 12 months of 30 days each. All payments Linder this Bond shall be made to the registered holder of this Bond, at its address as it appears on the Bond register., in lawful money of the United States of America. This Bond constitutes a series in the maximum authorized principal amount of $816,000 (the "Series 201 OF Bond"), issued to finance a portion of the costs of construction of certain improvements to the sewer system of the City (the "System"), to make ad eposit to a reserve account for the Bonds and to pay costs of issuance of the Series 2010E Bond, The Series 2010E Bond is issued pursuant to and in full conformity with the Constitution and laws of the State of Montana thereunto enabling, including Montana Code Annotated, Title 7, Chapter 7, C-1- Part 44 and 45, as amended, and resolutions duly adopted by the governing body of the City, including Resolution No. 4220 duly enacted by the City Commission on November 16, 2009, as amended and supplemented by Resolution Nos, 4234, 4245, 4254, 4299, and 4462 adopted on January 19, 2010, February 16, 2010, May 3, 2010, November 1, 2010.. and August 5, 2013, respectively (tile Original Resolution, as so amended and supplemented, the "Resolution"). The Series 20100 Bond is issuable only as a single, fully registered bond. The Series 2010E Bond is issued on a parity and is equally and ratably secured by the Net Revenues of the System with the City's outstanding $359,300 Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 2010B (the "Series 201013 Bond"), First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 20100 (the "Series 20100 Bond"), First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 201 OD (the "Series 201OD Bond"), First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 20100 (the "Series 201OG Bond"), and First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 201 OH (the "Series 201 OH Bond"). The Series 20100 Bond, the Series 201 OD Bond, tine Series 2.010E Bond, and the Series 201OH Bond are being issued simultaneously herewith. Reference is made to the Resolution for a more complete statement of the terms and conditions upon which the Series 2010E Bond has been issued, the Net Revenues of the System pledged and appropriated for the payment and security thereof, the conditions upon which additional bonds may be issued under the Resolution and made payable frorn such Net Revenues on a parity with the Series 201 OB Bond, the Series 201 OC Band, the Series 201 OD Bond, the Series 201 OF Bond, the Series 201 OG Bond, and the Series 201 OH Bond (collectively, the "Bonds") or otherwise, the conditions upon which the Resolution may be amended, the rights, duties and obligations of the City, and the rights of the owners of the Series 2010E Bond. The City may prepay the principal of the Series 201 OF Bond only if(i) it obtains the prior written consent of the DNRC thereto, and (ii) no Loan Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent. A ny prepayment permitted by the DNRC must be accompanied by payment of accrued interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the amount of principal prepaid. If the Series 2010E Bond is prepaid in part, such prepayments shall be applied to principal payments in inverse order of maturity. The Bonds, including interest and any premium; for the redemption thereof, are payable solely from the Net Revenues pledged for the payment thereof and do not constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation or provision. The City may deem and treat the person in whose name this Series 201 OF Bond is registered as the absolute owner hereof, whether this Series 201 OF Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and the City shall not be affected by any notice to the contrary. C-2- IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has fixed and established and will collect reasonable rates and charges for the services and facilities afforded by the System, and has created a special Sewer System Fund into which the gross revenues of the System, including all additions thereto and replacements and improvements thereof. will be paid, and a separate and special Revenue Bond Account in that fund, into which will be paid each month, Net Revenues of the System then on hand (the gross revenues remaining after the payment of Operating Expenses of the System), in an amount equal to not less than the sum of one-sixth of the interest due within the next six months and one- twelfth of the principal due within the next twelve months with respect to all outstanding Bonds payable semi-annually from that account, and a Reserve Account (the "Reserve") into which shall be paid additional Net Revenues sufficient to establish and maintain a reserve therein equal to, as of the date of calculation, the Reserve Requirement; that the Revenue Bond Account and the Reserve will be used only to pay the principal of, premium, if any, and interest on the Bonds issued pursuant to the authority herein recited; that the rates and charges for the System will from time to time be made and kept sufficient to provide gross income and revenues adequate to pay, promptly the reasonable and current expenses of operating and maintaining the System and to produce in each fiscal year Net Revenues in excess of such current expenses equal to 125% of the principal and interest payable from the Revenue Bond Account in any subsequent fiscal year, to maintain the balance in the Reserve at the Reserve Requirement, to pay promptly the reasonable and current expenses of operating and maintaining the Systern, to pay the principal of and interest oil a ny Subordinate Obligations and to provide reserves for the replacement and depreciation of the System; that additional Bonds and refunding Bonds may be issued and made payable frorn the Revenue Bond Account on a parity with the Bonds upon certain conditions set forth in the Resolution but no obligation will be otherwise incurred and made payable from the Net Revenues, unless the lien thereof shall be expressly made subordinate to the lien of the Bonds and other additional Bonds on such Net Revenues; that all provisions for the security of this Series 201 OF Bond set forth in the Resolution will be punctually and faithfully performed as therein stipulated; that all acts, conditions and things required by the Constitution and laws of the State of Montana and the ordinances and resolutions of the City to be done, to exist, to happen and to be performed in order to make this Series 201 OF Bond a valid and binding special obligation of the City according to its terms have been done, do exist, have happened and have been performed as so required; and that this Series 2010E Bond and the premium, if ally, and interest hereon are payable solely frorn the Net Revenues of the System pledged and appropriated to the Revenue Bond Account and do not constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation or provision and the issuance of the Series 2010E Bond does not cause either the general or the special indebtedness of the City to exceed any constitutional, statutory or charter limitation. C-3- IN WITNESS WHEREOF, the City of Bozeman, Montana, by its governing body, has caused this Bond to be executed by the signatures of its signatures of the Mayor, the City Finance Director, and the City Clerk, and has caused the official seal of the City to be affixed hereto, .and has caused this Bond to be dated as of the 21 st day of August, 2013. Mayor vy c � C1t Finance D e for ILA s1"1Tv Co City lerlci Y C-4- REGISTRATION AND TRANSFER This Bond shall be fully registered as to both principal and interest. No transfer of this Bond shall be valid unless and until (I) the registered holder of the Bond, or his duly authorized attorney or legal representative, executes the form of assignment appearing on this Bond, and (2) the City Finance Director, as bond registrar (the "Registrar"), has duly noted the transfer oil the Bond and recorded the transfer oil the Registrar's registration books. The Issuer shall be entitled to deem and treat the person in whose name this Bond is registered as absolute owner thereof for all purposes, notwithstanding any notice to the contrary. Payments on account of the Bond shall be made only to the order of the registered holder thereof, and all such payments shall be valid and effectual to satisfy and discharge the Issuer's liability upon the Bond to the extent of the surn or sums so paid. REGISTER The ownership of the unpaid Principal Balance of this Bond and the interest accruing thereon is registered on the books of the City of Bozeman, Montana in the name of the registered holder appearing on the first page hereof or as last noted below: Z:� Date of Narne and Address Signature of Registration of Registered Holder City Finance Director August 2 1. 2013 Department of Natural Resources and Conservation 1625 Eleventh Avenue Helena. MT 59620 THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND REGISTRAR UPON REGISTRATION OF EACH TRANSFER The City Finance Director of the City of Bozeman, Montana, acting as Bond Registrar, has transferred, on the books of the Issuer, on the date last noted below, ownership of the principal amount of and the accrued interest on this Bond to the new registered holder noted next to such date, except for amounts of principal and interest theretofore paid. Date of Transfer Name of New Refistered Holder Signature of Bond RegjqKE C-5- FORM OF ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bo irrevocably constitute and appoint Bond and does hereby. attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatsoever. C-6- SCHEDULE Loan Loss Administrative Reserve Total Loan Date Principal Interest Expense Surcharge Surcharge Payment C-7- APPENDIX D [FORM OF FIRST AMENDED AND RESTATED SERIES 201 OG BONDS� UNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF GALLATIN CITY OF BOZEMAN FIRST AMENDED AND RESTATED SEWER SYSTEM REVENUE BOND (DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM) SERIES 201 OG No. R-2 $3,558,000 FOR VALUE RECEIVED, T HE CITY OF BOZEMAN, MONTANA (the "City"), a duly organized municipal corporation and political subdivision of the State of Montana, acknowledges itself to be specially indebted and, for value received, hereby promises to pay to the Department of Natural Resources and Conservation of the State of Montana (the "DNRC"), or its registered assigns, solely from the Revenue Bond Account of its Sewer System Fund, the principal surn of$3,558,000, with interest on such amount from the date hereof at the rate of two percent (2.00%) per annum on the unpaid balance until paid. In addition, the City shall pay an Administrative Expense Surcharge and a Loan Loss Reserve Surcharge on the outstanding principal amount of this Bond at the rates of seventy-five hundredths of one percent (0.75%) and twenty-five hundredths of one percent (0.25%), respectively, per annum. Interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall be payable in semiannual installments payable on each January I and July I (each a "Loan Repayment Date") commencing January 1., 2014. Each installment shall reflect an interest rate of three percent (3.00%) per annurn and shall be in the amount set forth opposite its due date in Schedule A hereto under "Total Loan Payment." The portion of each such payment consisting of principal, the portion consisting of interest, the portion consisting of Administrative Expense Surcharge, and the portion consisting of Loan Loss Reserve Surcharge shall be as set forth in Schedule A hereto. Past-due payments of principal, interest, Administrative Expense Surcharge, and Loan Loss Reserve Surcharge shall bear interest at the rate often percent (10.00%) per annurn, until paid. Interest, Administrative Expense Surcharge, and Loan Loss Reserve Surcharge shall be calculated on the basis of a 360-day year comprising 12 months of 30 days each. All payments under this Bond shall be made to the registered holder of this Bond, at its address as it appears on the Bond register, in lawful money of the United States of America. This Bond constitutes a series in the maximum authorized principal amount of $3,903,000 (the "Series 201 OG Bond"), issued to finance a portion of the costs of construction of certain improvements to the sewer system of the City (the "System"), to make a d eposit to a reserve account for the Bonds and to pay costs of issuance of the Series 201 OG Bond. The Series 201 OG Bond is issued pursuant to and in full conformity with the Constitution and laws of the State of Montana thercunto enabling, including Montana Code Annotated, Title 7, Chapter 7, D-1- Part 44 and 45, as amended, and resolutions duly adopted by the governing body of the City, including Resolution No. 4220 duly enacted by the City Commission on November 16, 2009, as amended and supplemented by Resolution Nos. 4234, 4245, 4254, 4299, and 4462 adopted on January 19, 2010, February 16. 2010, May 3, 2010, November 1, 2010, and August 5, 2013, respectively (the Original Resolution, as so arnended and supplemented, the "Resolution"). The Series 2010C Bond is issuable only as a single, fully registered bond, The Series 2010G Bond is issued on a parity and is equally and ratably secured by the Net Revenues of the System with the City's outstanding $359,300 Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 20108 (the "Series 2.010E Bond"), First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 2010C (the "Series 2010C Bond"), First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 2010D (the "Series 2010D Bond*'), First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 2010F (the "Series 2010E Bond"), and First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 2010H (the "Series 2010H Bond"). The Series 2010C Bond, the Series 2010D Bond, the Series 2010F Bond, and the Series 2010H Bond are being issued simultaneously herewith. Reference is made to the Resolution for a more complete statement of the terms and conditions upon which the Series 201OG Bond has been issued, the Net Revenues of the System pledged and appropriated for the payment and security thereof, the conditions upon which additional bonds may be issued under the Resolution and made payable from such Net Revenues on a parity with the Series 20108 Bond, the Series 2010C Bond, the Series 2010D Bond, the Series 201 OF Bond, the Series 20 1 OG Bond, and the Series 201 OH Bond (collectively, the "Bonds") or otherwise, the conditions upon which the Resolution may be amended, the rights, duties and obligations of the City, and the rights of the owners of the Series 2010E Bond. The City may prepay the principal of the Series 2010E Bond only if(i) it obtains the prior written consent of the DNRC thereto, and (ii) no Loan Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent. A ny prepayment permitted by the DNRC must be accompanied by payment of accrued interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the amount of principal prepaid. If the Series 2010G Bond is prepaid in part, such prepayments shall be applied to principal payments in inverse order of maturity. The Bonds, including interest and any premium for the redemption thereof, are payable solely from the Net Revenues pledged for the payment thereof and do not constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation or provision. The City may deem and treat the person in whose name this Series 201 OG Bond is registered as the absolute owner hereof, whether this Series 201 OG Bond is overdue or not, for the put-pose of receiving payment and for all other purposes, and the City shall not be affected by any notice to the contrary. D-2- IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has fixed and established and will collect reasonable rates and charges for the services and facilities afforded by the System, and has created a special Sewer System Fund into which the gross revenues of the System, including all additions thereto and replacements and improvements thereof, will be paid, and a separate and special Revenue Bond Account in that fund, into which will be paid each month, Net Revenues of the System then on hand (tile gross revenues remaining after the payment of Operating Expenses of the System), in an amount equal to not less than the sum of one-sixth of the interest due within the next six months and one- twelfth of the principal due within the next twelve months with respect to all outstanding Bonds payable semi-annually from that account, and a Reserve Account (the "Reserve") into which shall be paid additional Net Revenues sufficient to establish and maintain a reserve therein equal to, as of the date of calculation, the Reserve Requirement; that the Revenue Bond Account and the Reserve will be used only to pay the principal of, premium, if any, and interest on the Bonds, issued pursuant to the authority herein recited; that the rates and charges for the System will from tirne to time be made and kept sufficient to provide gross income and revenues adequate to pay promptly the reasonable and current expenses of operating and maintaining the System and to produce in each fiscal year Net Revenues in excess of such current expenses equal to 125% of the principal and interest payable from the Revenue Bond Account in any subsequent fiscal year, to maintain the balance in the Reserve at the Reserve Requirement, to Pay promptly the reasonable and current expenses of operating and maintaining the System, to pay the principal of and interest on a ny Subordinate Obligations and to provide reserves for the replacement and depreciation of the System; that additional Bonds and refunding Bonds may be issued and made payable from the Revenue Bond Account on a parity with the Bonds upon certain conditions set forth in the Resolution but no obligation will be otherwise incurred and made payable from the Net Revenues, unless the lien thereof shall be expressly made subordinate to the lien of the Bonds and other additional Bonds on such Net Revenues; that all provisions for the security of this Series 2010E Bond set forth in the Resolution will be punctually and faithfully performed as therein stipulated; that all acts, conditions and things required by the Constitution and laws of the State of Montana and the ordinances and resolutions of the City to be done, to exist, to happen and to be performed in order to make this Series 201OG Bond a valid and binding special obligation of the City according to its terms have been done, do exist, have happened and have been performed as so required; and that this Series 2010G Bond and the premium, if any, and interest hereon are payable solely from the Net Revenues of the System pledged and appropriated to the Revenue Bond Account and do not constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation or provision and the issuance of the Series 201 OG Bond does not cause either the general or the special indebtedness of the City to exceed any constitutional, statutory or charter limitation. D-3- IN WITNESS W1-IEREOF, the City of Bozeman, Montana, by its governing body, has caused this .Bond to be executed by the signatures of its signatures of the Mayor, the City Finance Director, and the City Clerk, and has caused the official sea] of the City to be affixed hereto, and has caused this Bond to be dated as of the 21st day of August, 2013. Mayor (SEAL) B0 City inance Dire o 1883 Cit y Clerk I D-4- REGISTRATION AND TRANSFER This Bond shall be fully registered as to both principal and interest. No transfer of this Bond shall be valid unless and until (1) the registered holder of the Bond, or his duly authorized attorney or legal representative, executes the form of assignment appearing on this Bond., and (2) the City Finance Director, as bond registrar (the "Registrar"), has duly noted the transfer on the Bond and recorded the transfer on the Registrar's registration books. The Issuer shall be entitled to deem and treat the person in whose name this Bond is registered as absolute owner thereof for all purposes, notwithstanding an), notice to the contrary. Payments on account of the Bond shall be made only to the order of the registered holder thereof, and all such payments shall be valid and effectual to satisfy and discharge the Issuer's liability upon the Bond to the extent of the sun, or surns so paid. REGISTER The ownership of the unpaid Principal Balance of this Bond and the interest accruing thereon is registered on the books of the City of Bozeman, Montana in the name of the registered holder appearing on the first page hereof or as last noted below: Date of Name and Address Signature of Registration of Registered Holder City Finance Director August 21, 2013 Department of Natural Resources and Conservation 1625 Eleventh Avenue Helena. MT 59620 THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND REGISTRAR UPON REGISTRATION OF EACH TRANSFER The City Finance Director of the City of Bozeman, Montana, acting as Bond Registrar,, has transferred, on the books of the Issuer, on the date last noted below, ownership of the principal amount of and the accrued interest on this Bond to the new registered holder noted next to such date, except for amounts of principal and interest theretofore paid. Date of Transfer Name of New Registered Holder Si mature of Bond. Registrar D-5- FORM OF ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the narne as it appears upon the face of the within Bond in every particular,without alteration or any change whatsoever. D-6- SCHEDULE Loan Loss Administrative Reserve Total Loan Date Principal Interest Ex ease Surcharge Surcharge Payment D-7- APPENDIX E [FORM OF FIRST AMENDED AND RESTATED SERIES 2010H BOND] UNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF GALLATIN CITY OF BOZEMAN FIRST AMENDED AND RESTATED SEWER SYSTEM REVENUE BOND (DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM) SERIES 201 OH No. R-2 $8,692,000 FOR VALUE RECEIVED, THE CITY OF BOZEMAN, MONTANA (the "City"), a duly organized municipal corporation and political subdivision of the State of Montana, acknowledges itself to be specially indebted and, for value received, hereby promises to pay to the Department of Natural Resources and Conservation of the State of Montana (the "DNRC"), or its registered assigns, solely frown the Revenue Bond Account of its Sewer System Fund, the principal sun? of$8,692,000, with interest on such amount from the date hereof at the rate of two percent (2.00%) per annum on the unpaid balance until paid. In addition, the City shall pay an Administrative Expense Surcharge and a Loan Loss Reserve Surcharge on the outstanding principal amount of this Bond at the rates of seventy-five hundredths of one percent (0.75%) and twenty-five hundredths of one percent (0.25%), respectively, per annum. Interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall be payable in semiannual installments payable on each January I and July I (each a "Loan Repayment Date") commencing January 1. 2014. Each installment shall reflect an interest rate of three percent (3.00%) per annum and shall be in the amount set forth opposite its due date in Schedule A hereto under "Total Loan Payment." The portion of each such payment consisting of principal, the portion consisting of interest, the portion consisting of Administrative Expense Surcharge, and the portion consisting of Loan Loss Reserve Surcharge shall be as set forth in Schedule A hereto. Past-due payments of principal, interest, Administrative Expense Surcharge, and Loan Loss Reserve Surcharge shall bear interest at the rate of ten percent (10,00%) per annum, until paid. Interest, Administrative Expense Surcharge, and Loan Loss Reserve Surcharge shall be calculated on the basis of a 360-day year comprising 12 months of 30 days each. All payments under this Bond shall be made to the registered holder of this Bond, at its address as it appears on the Bond register, in lawful money of the United States of America, This Bond constitutes a series in the maximum authorized principal amount of $9,573,000 (the "Series 201 OH Bond"), issued to finance a portion of the costs of construction of certain improvements to the sewer system of the City (the "Systern"), to make ad eposit to a reserve account for the Bonds and to pay costs of issuance of the Series 201 OH Bond, The Series 201 OH Bond is issued pursuant to and in full conformity with the Constitution and laws of the State of Montana thereunto enabling, including Montana Code Annotated, Title 7, Chapter 7, E-1- Part 44 a rid 45, as amended, and resolutions duty adopted by the governing body of the City, including Resolution No. 4220 duly enacted by the City Commission on November 16. 2009, as amended and supplemented by Resolution Nos. 4234, 4245, 4254, 4299, and 4462 adopted oil January 19, 2010, February 16, 2010, May 3, 2010, November 1, 2010, and August 5, 2013, respectively (the Original Resolution, as so amended and supplemented, the "Resolution*'), The Series 201 OC Bond is issuable only as a single, fully registered bond. The Series 201 OH Bond is issued on a parity and is equally and ratably secured by the Net Revenues of the System with the City's outstanding $359.300 Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 201 OB (the "Series 201 OB Bond"), First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 20 1 OC (the "Series 201 OC Bond"), First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 201 OD (tile "Series 2010D Bond"), First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 2010F (the "Series 2010F Bond"), and First Amended and Restated Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 20106 (the "Series 2010G Bond"). The Series 201 OC Bond, the Series 201 OD Bond, the Series 201 OF Bond, and the Series 20100; Bond are being issued simultaneously herewith. Reference is made to the Resolution for a more complete statement of the terms and conditions upon which the Series 201 OH Bond has been issued, the Net Revenues of the System pledged and appropriated for the payment and security thereof, the conditions upon -which additional bonds may be issued under the Resolution and made payable frorn such Net Revenues on a parity with the Series 20 1 OB Bond, the Series 201 OC Bond, the Series 201 OD Bond, the Series 201 OF Bond, the Series 201 OG Bond, and the Series 201 OH Bond (collectively, the "Bonds") or otherwise, the conditions upon which the Resolution may be amended, the rights, duties and obligations of the City, and the rights of the owners of the Series 201 OH Bond. The City may prepay the principal of the Series 201 OH Bond only if(i) it obtains the prior written consent of the DNRC thereto, and (ii) no Loan Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent. A ny prepayment permitted by the DNRC must be accompanied by payment of accrued interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the amount of principal prepaid. If the Series 2010H Bond is prepaid in part, such prepayments shall be applied to principal payments in inverse order of maturity. The Bonds, including interest and any premium for the redemption thereof, are payable solely from the Net Revenues pledged for the payment thereof and do not constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation or provision. The City may deem and treat the person in whose name this Series 201 Oil Bond is registered as the absolute owner hereof, whether this Series 201 OH Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and the City shall not be affected by any notice to the contrary. E-2- IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has fixed and established and will collect reasonable rates and charges for the services and facilities afforded by the System, and has created a special Sewer System Fund into which the gross revenues of the Systern, including all additions thereto and replacements and imp•overrients, thereof, will be paid, and a separate and special Revenue Bond Account in that fund, into which will be paid each month, Net Revenues of the Systern then on hand (the gross revenues remaining after the payment of Operating Expenses of the Systern), in an amount equal to not less than the sum of one-sixth of the interest due within the next six months and one- twelfth of the principal due within the next twelve months with respect to all outstanding Bonds payable semi-annually from that account, and a Reserve Account (the "Reserve") into which shall be paid additional Net Revenues sufficient to establish and maintain a reserve therein equal to, as of the date of calculation, the Reserve Requirement; that the Revenue Bond Account and the Reserve will be used only to pay the principal of, premium, if any, and interest on the Bonds issued pursuant to the authority herein recited; that the rates and charges for the System will frorn time to time be made and kept sufficient to provide gross income and revenues adequate to pay promptly the reasonable and current expenses of operating and maintaining the System and to produce in each fiscal year Net Revenues in excess of such current expenses equal to 125% of the principal and interest payable frorn the Revenue Bond Account in any subsequent fiscal year, to maintain the balance in the Reserve at the Reserve Requirement, to pay promptly the reasonable and current expenses of operating and maintaining the Systern, to pay the principal of and interest on any Subordinate Obligations and to provide reserves for the replacernent and depreciation of the System; that additional Bonds and refunding Bonds may be issued and made payable frorn the Revenue Bond Account on a parity with the Bonds upon certain conditions set forth in the Resolution but no obligation will be otherwise incurred and made payable from the Net Revenues, unless the lien thereof shall be expressly made subordinate to the lien of the Bonds and other additional Bonds on such Net Revenues-, that all provisions for the security of this Series 201 OH Bond set forth in the Resolution will be punctually and faithfully performed as therein stipulated; that all acts, conditions and things required by the Constitution and laws of the State of Montana and the ordinances and resolutions of the City to be done, to exist, to happen and to be performed in order to make this Series 2010H Bond a valid and binding special obligation of the City according to its terms have been done, do exist, have happened and have been performed as so required: and that this Series 201 OH Bond and the premium, if any, arid interest hereon are payable solely frorn the Net Revenues of the System pledged and appropriated to the Revenue Bond Account and do not constitute a debt of the City within the meaning of any constitutional, statutory Or charter lirnitation or provision and the issuance of the Series 201 OH Bond does not cause either the general or the special indebtedness of the City to exceed any constitutional, statutory or charter limitation. E-3- IN WITNESS WHEREOF, the City of Bozeman, Montana, by its governing body, has caused this Bond to be executed by the signatures of its signatures of the Mayor, the City Finance Director, and the City Clerk, and has caused the official seal of the City to be affixed hereto, and has caused this Bond to be dated as of the 21st day of August, 2013. ayor (SEAL) jCiFinance i ector t City Jerk,-bapt E-4- REGISTRATION AND TRANSFER This Bond shall be fully registered as to both principal and interest. No transfer of this Bond shall be valid unless and until (1) the registered holder of the Bond, or his duly authorized attorney or legal representative, executes the form of assignment appearing on this Bond, and (2) the City Finance Director, as bond registrar (the "Registrar-), has duly noted the transfer on the Bond and recorded the transfer on the Registrar's registration books. The Issuer shall be entitled to deem and treat the person in whose name this Bond is registered as absolute owner thereof for all purposes, notwithstanding any notice to the contrary. Payments on account of the Bond shall be made only to the order of the registered holder thereof, and all such payments shall be valid and effectual to satisfy and discharge the Issuer's liability upon the Bond to the extent of the sum or sun-is so paid. REGISTER. The ownership of the unpaid Principal Balance of this Bond and the interest accruing thereon is registered on the books of the City of Bozeman, Montana in the name of the registered holder appearing on the first page hereof or as last noted below: Date of Name and Address Signature of Registration of Registered Holder C Lity Finance Director August 21, 2013 Department of Natural Resources and Conservation 1625 Eleventh Avenue Helena. NIT 59620 THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND REGISTRAR UPON REGISTRATION OF EACH TRANSFER The City Finance Director of the City of Bozeman, Montana, acting as Bond Registrar, has transferred, on the books of the Issuer, on the date last noted below, ownership of the principal amount of and the accrued interest on this Bond to the new registered holder noted next to such date, except for amounts of principal and interest theretofore paid. Date of Transfer Name of New Re ictered Holder Signature of Bond Registrar E-5- FORM OF ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and does hereby irrevocably constitute and appoint attorney to transfer the Bond on the books kept for the registration thereof.with full power of substitution in the premises. Dated:. Notice. The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatsoever. E-6- SCHEDULE A Loan loss Administrative Reserve Total Loan Date Principal Interest Expense Surcharge SurchgMe Pa}anent -7-