CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE I, the undersigned, being the duly qualified and acting recording officer of the City of Missoula, Montana (the “City”), hereby certify that the attached resolution is a true copy of a resolution entitled: “RESOLUTION RELATING TO $5,225,000 TAX AND REVENUE ANTICIPATION NOTES, SERIES 2003; FIXING THE FORM AND DETAILS THEREOF, PROVIDING FOR THE EXECUTION AND DELIVERY THEREOF AND PROVIDING FOR A DEBT SERVICE FUND THEREFOR” (the “Resolution”), on file in the original records of the City in my legal custody; that the Resolution was duly adopted by the City Council of the City at a meeting on September 15, 2003, and that the meeting was duly held by the City Council 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notice of such meeting given as required by law; and that the Resolution has not as of the date hereof been amended or repealed.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 Council Members voted in favor thereof: Ballas, Charney, Childers, Crowley, Engen, Floyd, Herbig, Kazmierczak, Morgan, Reidy, Torma abstained from voting thereon: None ; voted against the same: ; or were absent: McGrath . None ;
WITNESS my hand officially this 15th day of September, 2003.
/s/ Martha L. Rehbein City Clerk
RESOLUTION NO. 6706 RESOLUTION RELATING TO $5,225,000 TAX AND REVENUE ANTICIPATION NOTES, SERIES 2003; FIXING THE FORM AND DETAILS THEREOF, PROVIDING FOR THE EXECUTION AND DELIVERY THEREOF AND PROVIDING FOR A DEBT SERVICE FUND THEREFOR BE IT RESOLVED by the City Council (the “Council”) of City of Missoula, Montana (the “City”), as follows: Section 1. Authorization and Sale.
1.01 The City is authorized pursuant to Montana Code Annotated, Title 7, Chapter 6, Part 11, as amended (the “Act”), to issue its short-term obligations in anticipation of taxes or revenues budgeted to be received and appropriated for expenditure during the fiscal year in which the obligations are issued and the proceeds of which are used solely for the purpose for which the taxes or revenues were appropriated and for costs and expenses incidental to the issuance and sale of the obligations. 1.02 The City has adopted its budget for the fiscal year ending June 30, 2004 (the “Fiscal Year”), which delineates the taxes and revenues budgeted and to be received in the Fiscal Year and appropriated for expenditure during the Fiscal Year. Based on the projections of the Finance Director/Treasurer, as reflected in the final budget, there will not be a proper matching month to month of the revenues with the expenditures to be made from the funds and accounts of the City. Based on the budget, the total amount of taxes and revenues available for deposit to the City’s general fund prior to June 30, 2004, including the beginning fund balance, is estimated to be $32,027,221. 1.03 To satisfy an anticipated deficit in funds, this Council by Resolution No. 6664, adopted July 21, 2003, called for the public sale of notes pursuant to the Act in the aggregate principal amount of up to $5,270,000, to be denominated “Tax and Revenue Anticipation Notes, Series 2003” (the “Notes”). 1.04 Advertisement for bids for the purchase of the Notes were published in accordance with the provisions of Montana Code Annotated, Sections 7-7-4434 and 17-5-106, as amended. By Resolution No. 6699, this Council determined the bid submitted by TGH Securities, of Blue Bell, Pennsylvania (the “Purchaser”), to purchase the Notes at a price of $5,225,000.00, plus a premium of $46,920.50, bearing interest at the rate of 2.00% per annum from the date of delivery to the Purchaser, to be the most advantageous to the City and awarded the sale of the Notes to the Purchaser. Such purchase price and interest rate results in a true interest rate of 1.3662% per annum and a total net interest dollar cost of $69,222.77, assuming a September 18, 2003 delivery date. 1.05 All acts, conditions and things which are 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 valid issuance of the Notes having been done, existing, having happened and having been performed, it is now necessary for this Council to establish the form and terms of the Notes, to provide the security therefor and to issue the Notes forthwith. Section 2. 2.01 Exhibit A. The Notes.
Form of Notes. The Notes shall be prepared in substantially the form attached hereto as
2.02 Note Terms. The Notes shall be dated as of the date of delivery to the Purchaser, shall mature, without option of redemption, on September 1, 2004, and shall be in the denominations of $5,000 each or in integral multiples thereof. The Notes shall bear interest at the rate of two percent (2.00%) from date of original issue until paid. Interest shall be calculated on the basis of a 360-day year
consisting of twelve 30-day months. The principal of and interest on the Notes shall be payable at maturity upon surrender thereof, at the principal office of the Registrar (as hereinafter defined). The Notes shall not be subject to redemption prior to maturity. The Notes shall be issuable only in fully registered form, and the ownership of the Notes shall be transferred only upon the register of the City hereinafter described. 2.03 Execution and Delivery. The Notes shall be executed by the signatures of the Mayor, Finance Director/Treasurer, and the City Clerk, provided that such signatures may be printed, engraved or lithographed facsimiles thereof. Notwithstanding such execution, no Note shall be valid or obligatory for any purpose or entitled to any security or benefit under this resolution unless and until a certificate of authentication on such Note has been duly executed by the manual signature of an authorized representative of the Registrar. Notes of authentication on different Notes need not be signed by the same representative. The executed certificate of authentication on each Note shall be conclusive evidence that it has been authenticated and delivered under this resolution. When the Notes have been fully executed and authenticated, they shall be delivered to the Purchaser upon receipt of payment of the purchase price, including accrued interest to the date of delivery. The Purchaser shall not be required to see to the application of the proceeds of the Notes. 2.04 Initial Registrar; Registration. The City hereby appoints U.S. Bank National Association, of Seattle, Washington, to act as bond registrar, transfer agent and paying agent (the “Registrar”). The City reserves the right to appoint a successor Registrar, 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”). The City agrees to pay the reasonable and customary charges of any appointed Registrar for the services performed. This Section shall establish a system of registration for the Notes as defined in the Registration Act. Upon merger or consolidation of any successor Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, such corporation shall be authorized to act as successor Registrar. The City reserves the right to remove any successor Registrar upon thirty (30) days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar shall deliver all cash and Notes in its possession to the successor Registrar and shall deliver the certificate register to the successor 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 register in which the Registrar shall provide for the registration of ownership of Notes and the registration of transfers and exchanges of Notes entitled to be registered, transferred or exchanged. (b) Transfer of Notes. Upon surrender to the Registrar for transfer of any Note 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 Notes of a like aggregate principal amount and maturity, as requested by the transferor. (c) Exchange of Notes. Whenever any Note is surrendered by the registered owner for exchange, the Registrar shall authenticate and deliver one or more new Notes of a like aggregate principal amount, interest rate and maturity, as requested by the registered owner or the owner’s attorney duly authorized in writing. (d) Cancellation. All Notes 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 Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Note or separate instrument of transfer is valid and genuine and that the requested
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transfer is legally authorized. The Registrar shall incur no liability for its 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 (if other than the City) may treat the person in whose name any Note is at any time registered in the Note register as the absolute owner of such Note, whether such Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Note 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 Note to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. For every transfer or exchange of Notes, 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 Notes. In case any Note shall become mutilated or be lost, stolen or destroyed, the Registrar shall deliver a new Note of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Note or in lieu of and in substitution for any such Note 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 Note lost, stolen or destroyed, upon filing with the Registrar evidence satisfactory to it that such Note was lost, stolen or destroyed, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount as may be required by law and as is satisfactory to the Registrar, in which both the City and the Registrar shall be named as obligees. All Notes so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the City. If the mutilated, lost, stolen or destroyed Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Note prior to payment. Section 2.05 (a) meanings: Securities Depository for the Notes. For purposes of this Section, the following terms shall have the following
“Beneficial Owner” shall mean, whenever used with respect to a Note, the person in whose name such Note is recorded as the beneficial owner of such Note 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 Notes. “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 Notes as securities depository. “Representation Letter” shall mean the Blanket Issuer Letter of Representations from the City to DTC, attached hereto as Exhibit B. (b) The Notes shall be initially issued as separately authenticated fully registered Notes, and one Note shall be issued in the principal amount of each stated maturity of the Notes. Upon initial issuance, the ownership of such Notes shall be registered in the Note register in the name of Cede & Co., as nominee of DTC. The Registrar and the City may treat DTC (or its nominee) as the sole and exclusive owner of the Notes registered in its name for the purposes of payment of the principal of or interest on the Notes, selecting the Notes or portions thereof to be
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redeemed, if any, giving any notice permitted or required to be given to registered owners of Notes under this Resolution, registering the transfer of Notes, 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 Notes under or through DTC or any Participant, or any other Person which is not shown on the Note register as being a registered owner of any Notes, 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 Notes, with respect to any notice which is permitted or required to be given to owners of Notes 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 Notes, or with respect to any consent given or other action taken by DTC as registered owner of the Notes. So long as any Note is registered in the name of Cede & Co., as nominee of DTC, the Registrar shall pay all principal of and interest on such Note, and shall give all notices with respect to such Note, 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 Notes to the extent of the sum or sums so paid. No Person other than DTC shall receive an authenticated Note 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 Notes will be transferable to such new nominee in accordance with paragraph (e) hereof. (c) In the event the City determines that it is in the best interest of the Beneficial Owners that they be able to obtain Notes in the form of Note certificates, the City may notify DTC and the Registrar, whereupon DTC shall notify the Participants of the availability through DTC of Notes in the form of certificates. In such event, the Notes will be transferable in accordance with paragraph (e) hereof. DTC may determine to discontinue providing its services with respect to the Notes 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 Notes 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 Notes and Beneficial Owners and payments on the Notes. 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 Notes is permitted under paragraph (b) or (c) hereof, such transfer or exchange shall be accomplished upon receipt by the Registrar of the Notes 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 Notes in the form of certificates are issued to owners other than Cede & Co., its successor as nominee for DTC as owner of all the Notes, or another securities depository as owner of all the Notes, the provisions of this Resolution shall also apply to all matters relating thereto, including, without limitation, the printing of such Notes in the form of Note certificates and the method of payment of principal of and interest on such Notes in the form of Note certificates. 2.06 Use of Proceeds of Notes. The proceeds of the Notes shall be expended solely for the purposes for which the taxes and revenues were appropriated within the Fiscal Year to finance the cash flow deficit of the City during the Fiscal Year, and to pay costs and expenses incidental to the issuance of the Notes. 2.07 Arbitrage. The Notes are not authorized or issued, and it is not reasonably expected that the proceeds thereof will be used, in a manner that would cause them to be “arbitrage bonds” within the meaning of Section 148 of the Code and the Treasury Regulations promulgated thereunder. The Notes will not be outstanding after a period ending 13 months after the date of issuance thereof or for a period
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ending 60 days after the last date for payment without interest or penalty of the last installment of the taxes anticipated thereby. The working capital expenditures and available revenues for payment thereof of the General Fund of the City during the present fiscal year, as defined in said Regulations, are estimated as follows: Monthly Cash Flow Schedule (in Millions) Ending Cash Balance $3,031,087 1,151,200 (1,662,729)* (1,461,378) (2,555,802) (3,917,782) 2,320,932 291,831 1,949,828 1,970,637 (947,709) (2,305,893) 2,141,501
Revenues July, 2003 August September October November December January 2004 February March April May June Total $1,020,709 1,803,932 1,917,936 940,322 674,301 8,354,425 764,041 3,070,419 1,452,782 (769,716) 291,987 7,548,118 $27,069,255
Expenditures ($2,900,596) (4,617,861) (1,716,585) (2,034,746) (2,036,282) (2,115,711) (2,793,142) (1,412,421) (1,431,973) (2,148,630) (1,650,171) (3,100,724) $(27,958,841)
* Includes the repayment of Tax and Revenue Anticipation Note, Series 2002 in the amount of $1,000,000. The foregoing schedule does not reflect the receipt of proceeds of or the payment of principal of the Notes, but it does reflect estimated investment earnings, if any, which are anticipated to accrue in the General Fund pending disbursements therefrom. Except as set forth in the foregoing schedule, it is not estimated that there will be any funds of the City other than the General Fund, which will be available for the payment of the above expenditures without a legislative, judicial or contractual requirement that such funds be reimbursed. The maximum estimated cash flow deficit during the period for which the Notes will be outstanding is not less than $5,225,000. 2.08 Maximum Amount of Notes. The amount by which the working capital expenditures of the General Fund are expected to exceed available amounts for payment thereof within the meaning of the Treasury Regulations, during the period for which the Notes will be outstanding, is $5,225,000. The aggregate original principal amount of the Notes does not exceed such amount. 2.09 Payment and Security for the Notes. The Notes shall constitute general obligations of the City and the principal of and interest on the Notes shall be payable from the money derived from the taxes and revenues in the General Fund of the City in anticipation of which it is issued, income from investment of the proceeds of the Notes, and any money and funds of the City otherwise legally available therefor. The City will agree to apply to the extent necessary all legally available funds and revenues of the City, including available amounts in the General Fund of the City, to the payment of the principal of and interest on the Notes when due. The taxing power of the City is not pledged to the payment of the Notes or interest thereon. 2.10 Delivery and Disposition of Proceeds. After the foregoing certifications have been made and the Notes have been executed in accordance with this Resolution and recorded in the office of the City Clerk, the Registrar shall authenticate and deliver the Notes to the Purchaser upon payment of the purchase price as set forth in Section 1.04. Pursuant to Section 17-2-102, M.C.A., the proceeds of the
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Notes when received shall be deposited in the General Fund and expended therefrom upon the order of the Council, solely to pay the legal demands upon the General Fund. 2.11 Defeasance. When all of the Notes have been discharged as provided in this Section, all pledges, covenants and other rights granted by this resolution to the owners of the Notes shall cease. The City may discharge its obligations with respect to any Notes which are due on any date by irrevocably depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full; or, if any Note should not be paid when due, the City may nevertheless discharge its obligations with respect thereto by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also at any time discharge its obligations with respect to any Notes, 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 time and at such rates and maturing on such dates as shall be required, without reinvestment, to pay all principal and interest to become due thereon to maturity. Any Note discharged in accordance with the provisions of this Section shall cause the Notes, or applicable portion thereof, to be no longer “Outstanding” for purposes of this resolution, including Section 4. Section 3. Tax Covenants and Arbitrage Matters.
3.01 Compliance with Applicable Law. The City hereby covenants and represents that in preparation of its budget for the Fiscal Year and in the preparation of information used to determine the City’s cash flow deficit, it has complied with the laws set forth in Montana Code Annotated with respect to the preparation of its budget and the management of its fiscal affairs. 3.02 General Tax Covenant. The City covenants and agrees with the owners from time to time of the Notes 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 Notes to become includable in gross income for federal income tax purposes under the Internal Revenue Code of 1986, as amended (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 Notes will not become includable in gross income for federal income tax purposes under the Code and the Regulations. Proceeds received from the City from the issuance of the Notes shall be used to pay capital expenditures of City owned property or general operating expenses of the City and the City will not make any use of the proceeds of the Notes which would cause the Notes to be considered “private activity bonds” or “private loan bonds” within the meaning of Section 141 of the Code and applicable Regulations. 3.03 Arbitrage Rebate. The City acknowledges that the Notes may be 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 Treasury Regulations to preserve the exclusion of interest on the Notes from gross income for federal income tax purposes, unless the Notes qualify for the exception from the rebate requirement under Section 148(f)(4)(B)(iii) of the Code and no “gross proceeds” of the Notes (other than amounts constituting a “bona fide debt service fund”) arise during or after the expenditures of the original proceeds thereof. The Council on behalf of the City represents that it intends to qualify for and avail itself of the “safe harbor” exception to the payment of rebate amounts provided in Section 148(f)(4)(B)(iii) of the Code, based on its expectation that the “cumulative cash flow deficit” for the period ending six months after the date of issuance of the Notes, will exceed 90% of the proceeds of the Notes. The Council acknowledges that the “safe harbor” exception of Section 148(f)(4)(B)(iii) is available only if the actual “cumulative cash flow deficit” calculated on the basis of actual facts and circumstances exceeds 90% of the proceeds of the Notes. The Mayor, City Clerk and Finance Director/Treasurer are hereby authorized and directed to certify, within ten business days after the conclusion of the six-month period referred to in the second immediately preceding sentence, to the Council in writing, the “cumulative cash flow deficit” with respect to the Notes within the meaning of Section 148(f)(4)(B)(iii)(II) of the Code, including actual revenues and expenditures of the General Fund for the period commencing on the date
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of issuance of the Notes and concluding six months thereafter. In furtherance of the foregoing, the Mayor, City Clerk and Finance Director/Treasurer are hereby authorized and directed to execute a Rebate Certificate in the form 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. 3.04 “Qualified Tax-Exempt Obligations.” Pursuant to Section 265(b)(3)(B)(ii) of the Code, the City hereby designates the Notes as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code. The City has not designated any obligation in 2003 under Section 265(b)(3) other than the Notes and an $805,000 Pooled Special Sidewalk, Curb, Gutter and Alley Approach Bonds, Series 2003A. The City hereby represents that it does not anticipate that obligations bearing interest not includable in gross income for purposes of federal income taxation under Section 103 of the Code (including refunding obligations as provided in Section 265(b)(3) of the Code and including “qualified 501(c)(3) bonds” but excluding other “private activity bonds,” as defined in Sections 141(a) and 145(a) of the Code) will be issued by or on behalf of the City and all “subordinate entities” of the City in 2003 in an amount greater than $10,000,000. 3.05 Information Reporting. The City shall file with the Secretary of the Treasury, not later than November 15, 2003, a statement concerning the Notes containing the information required by Section 149(e) of the Code. Section 4. Continuing Disclosure.
(a) Limited Exemption from Rule. The Securities and Exchange Commission (the “SEC”) has promulgated amendments to Rule 15c2-12 under the Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12) (as in effect and interpreted from time to time, the “Rule”) which govern the obligations of certain underwriters to require that issuers of municipal securities enter into agreements for the benefit of holders of the municipal securities to provide continuing disclosure with respect to the securities. This Council hereby finds, determines and declares that the Notes are exempt from the application of paragraph (b)(5) of the Rule by reason of the exemption granted in paragraph (d)(3) thereof. The exemption from the Rule for the Notes is conditioned upon the City agreeing to provide certain continuing disclosure as hereinafter provided. The City has complied in all material respects with any undertaking previously entered into by it under the Rule. (b) Purpose and Beneficiaries. To provide for the public availability of certain information relating to the Notes and the security therefor and to permit underwriters of the Notes to comply with the Rule, which will enhance the marketability of the Notes, the City hereby makes the covenants and agreements contained in this Section 4 for the benefit of the Owners (as hereinafter defined) from time to time of the Outstanding Notes. If the City fails to comply with any provisions of this Section 4, any person aggrieved thereby, including the Owners of any Outstanding Notes, may take whatever action at law or in equity may appear necessary or appropriate to enforce performance and observance of any agreement or covenant contained in this Section 4. Direct, indirect, consequential and punitive damages shall not be recoverable for any default hereunder to the extent permitted by law. Notwithstanding anything to the contrary contained herein, in no event shall a default under this Section 4 constitute a default under the Notes or under any other provision of this resolution. As used in this Section 4, “Owner” or “Noteowner” means, in respect of a Note, the registered owner or owners thereof appearing in the note 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 Note, any person or entity which (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, such Note (including
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persons or entities holding Notes through nominees, depositories or other intermediaries), or (b) is treated as the owner of the Note for federal income tax purposes. (c) Information To Be Disclosed. The City will provide, either directly or indirectly through an agent designated by the City, in a timely manner, to the Municipal Securities Rulemaking Board and to the state information depository then designated or operated by the State of Montana as contemplated by the Rule, if any, notice of the occurrence of any of the following events which is a Material Fact (as hereinafter defined): (A) Principal and interest payment delinquencies; (B) Non-payment related defaults; (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 or events affecting the tax-exempt status of the security; (G) Modifications to rights of security holders; (H) Bond calls; (I) Defeasances; (J) Release, substitution, or sale of property securing repayment of the securities; and (K) Rating changes. As used herein, a “Material Fact” is a fact 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 hereunder or information generally available to the public. Notwithstanding the foregoing sentence, a “Material Fact” is also 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. (d) Term; Amendments; Interpretation. The covenants of the City in this Section 4 shall remain in effect so long as any Notes are Outstanding. Notwithstanding the preceding sentence, however, the obligations of the City under this Section 4 shall terminate and be without further effect as of any date on which the City delivers to the Registrar an opinion of Bond Counsel to the effect that, because of legislative action or final judicial or administrative actions or proceedings, the failure of the City to comply with the requirements of this Section 4 will not cause participating underwriters in the primary offering of the Notes to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory thereof. This Section 4 may be amended or supplemented by the City from time to time, without notice to or the consent of the Owners of any Notes, by a resolution of this Council 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: (i) such amendment or supplement (a) is made in connection with a change in circumstances that arises from a change in law or regulation or a change in the identity, nature or status of the General Fund of the City or the type of operations conducted by the City, or (b) is required by, or better complies with, the provisions of paragraph (d)(3) of the Rule; (ii) this Section 4 as so amended or supplemented would have complied with the requirements of paragraph (d)(3) of the Rule at the time of the primary offering of the Bonds, giving effect to any change in circumstances applicable under clause (i)(a) and assuming that the Rule as in effect and interpreted at the time of the amendment or supplement was in effect at the time of the primary offering; and (iii) such amendment or supplement does not materially impair the interests of the Bondowners under the Rule. This Section 4 is entered into to comply with, and should be construed so as to satisfy the requirements of, paragraph (d)(3) of the Rule. (e) Limitation of Liability of City. If and to the extent to the limitations of liability contained in subsection (a) are not effective, anything contained in subsection (a) to the contrary notwithstanding, in making the agreements, provisions and covenants set forth in this Section 4, the City has not obligated
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itself except with respect to the General Fund. None of the agreements or obligations of the City contained in this Section 4 shall be construed to constitute an indebtedness of the City within the meaning of any constitutional or statutory provisions whatsoever or constitute a pledge of the general credit or taxing powers of the City. Section 5. Certification of Proceedings. The officers of the City are hereby authorized and directed to prepare and furnish to the Purchaser 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 Notes 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. Passed and adopted by the City Council of City of Missoula, Montana, this 15th day of September, 2003.
/s/ Mike Kadas Mayor Attest:
/s/ Martha L. Rehbein City Clerk
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EXHIBIT A UNITED STATES OF AMERICA STATE OF MONTANA CITY OF MISSOULA TAX AND REVENUE ANTICIPATION NOTE SERIES 2003 No. R-_____ Rate 2.00% REGISTERED OWNER: PRINCIPAL AMOUNT: Maturity Date September 1, 2004 CEDE & CO. AND NO/100 DOLLARS Date of Original Issue [ ] $__________.00 CUSIP 605843 JF9
FOR VALUE RECEIVED, CITY OF MISSOULA, 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, with interest thereon at the rate per annum specified above, payable on the maturity date specified above, to the person in whose name this Note is registered at the close of business on the date which is 15 days prior to the maturity date specified above, upon presentation and surrender of this Note, all subject to the provisions referred to herein. Both principal and interest are payable to U.S. Bank National Association, as 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, in any coin or currency of the United States of America which on the date of payment is legal tender for public and private debts. For the prompt payment of the principal of and interest on this Note as the same respectively become due, the full faith, credit and taxing powers of the City are hereby irrevocably pledged. Notwithstanding any other provisions of this Note, so long as this Note 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 Note, and shall give all notices with respect to this Note, 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 Note is one of an issue, all of like date and tenor, except as to serial number and denomination, in the aggregate principal amount of $5,225,000 (the “Notes”), issued pursuant to and in accordance with the Constitution and laws of the State of Montana thereunto enabling, including Montana Code Annotated, Title 7, Chapter 6, Part 11, as amended, and a resolution duly adopted by the City Council of the City on September 8, 2003. The Notes are issued in anticipation of the collection of taxes and revenues payable by the City during the fiscal year ending June 30, 2004. The Notes are issuable only in fully registered form, in denominations of $5,000 or any integral multiple thereof. The Notes are not subject to redemption. The City has designated the Notes as “qualified tax-exempt obligations” within the meaning of Section 265(b) of the Internal Revenue Code of 1986, as amended, relating to the deduction of interest expense allocable to the Notes by certain financial institutions.
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As provided in the Resolution and subject to certain limitations set forth therein, this Note is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner’s attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or the owner’s attorney; and may also be surrendered in exchange for Notes of other authorized denominations. Upon any such transfer or exchange, the City will cause a new Note or Notes 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 Note is registered as the absolute owner hereof, whether this Note 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 law to be done, to happen, to exist, and to be performed precedent to and in the issuance of this Note have been done, have happened, do exist and have been performed in regular and due form, time and manner as required by law; and that the issuance of the Notes does not cause the indebtedness of the City to exceed any constitutional or statutory limitation. This Note 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.
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IN WITNESS WHEREOF, City of Missoula, Montana, by its City Council, has caused this Note to be executed by the facsimile signatures of the Mayor, Finance Director/Treasurer, and the City Clerk.
(Facsimile Signature) Mayor
(Facsimile Signature) Finance Director/Treasurer
(Facsimile Signature) City Clerk Dated: ______________________________ CERTIFICATE OF AUTHENTICATION This is one of the Notes delivered pursuant to the Resolution mentioned within. U.S. BANK NATIONAL ASSOCIATION, as Registrar
By ___________________________________ Authorized Representative
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The following abbreviations, when used in the inscription on the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM – TEN ENT – JT TEN – as tenants in common as tenants by the entireties as joint tenants with right of survivorship and not as tenants in common Other abbreviations may also be used. ______________________________ ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _______________________________________ the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints __________________________________________ attorney to transfer the within Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: _______________ PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within Note in every particular, without alteration, enlargement or any change whatsoever. SIGNATURE GUARANTEE: UTMA. . . . . . .Custodian. . . . . . (Cust) (Minor) under Uniform Transfers to Minors Act. . . . . . . . . . . . . . . . . . (State)
Signature(s) must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in STAMP or such other “signature guaranty program” as may be determined by the Registrar in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
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EXHIBIT B FORM OF DTC LETTER