Document Missoula_doc_e63903882e

RESOLUTION NUMBER A RESOLUTION OF THE CITY OF MISSOULA, MISSOULA COUNTY, MONTANA, AUTHORIZING THE SALE, ISSUANCE AND DELIVERY OF NOT TO EXCEED $1,200,000 OF THE CITY’S LIMITED TAX GENERAL FUND OBLIGATION REFUNDING BONDS, SERIES 2010A; TO PROVIDE MONEY TO REFUND A PORTION OF THE CITY’S OUTSTANDING GENERAL FUND OBLIGATION BONDS, SERIES 2001A; PROVIDING FOR THE DESIGNATION, DATE, TERMS, MATURITIES, FORM, PAYMENT AND REDEMPTION PROVISIONS OF THE BONDS; DESIGNATING A FISCAL AGENT; PLEDGING THE CITY’S GENERAL CREDIT FOR THE PAYMENT OF THE BONDS; CREATING AND ADOPTING CERTAIN FUNDS AND ACCOUNTS AND PROVIDING FOR DEPOSITS THEREIN; COVENANTING TO COMPLY WITH CERTAIN FEDERAL TAX AND SECURITIES LAWS; DESIGNATING THE BONDS AS QUALIFIED TAX-EXEMPT OBLIGATIONS; AUTHORIZING THE MAYOR AND THE FINANCE DIRECTOR/TREASURER TO EXECUTE A BOND PURCHASE CONTRACT; RATIFYING CERTAIN ACTIONS IN CONNECTION WITH THE PRELIMINARY OFFICIAL STATEMENT; AND PROVIDING FOR OTHER MATTERS PROPERLY RELATING THERETO ---PAGE BREAK--- TABLE OF CONTENTS Section 1: Definitions 2 Section 2: Interpretation 4 Section 3: Purpose of the Bonds 5 Section 4: Authorization of the Bonds 5 Section 5: Redemption Prior to Maturity 6 Section 6: Sale of the Bonds Authorized 7 Section 7: Place, Manner and Medium of Payment 8 Section 8: General Obligations, Pledge of General Credit 9 Section 9: The Debt Service Account 9 Section 10: The Refunding Plan 10 Section 11: The Refunding Trustee; Escrow Agreement 10 Section 12: Creation of the Escrow Account 10 Section 13: The Government Obligations 11 Section 14: Irrevocable Call 12 Section 15: Execution and Authentication of the Bonds 12 Section 16: The Registrar 13 Section 17: Book-Entry System Authorized 14 Section 18: Transfer and Exchange of the Bonds 15 Section 19: Mutilated, Lost, Stolen or Destroyed Bonds 16 Section 20: Defeasance of the Bonds 17 Section 21: Cancellation of Surrendered Bonds 17 Section 22: Tax Covenants 18 Section 23: Amendments to the Resolution 18 Section 24: Covenant to Provide Continuing Disclosure 19 Section 25: Bonds Designated “Qualified Tax-Exempt Obligations” 23 Section 26: Ratification of Preliminary Official Statement 23 Section 27: Ratification 24 Section 28: Contract; Severability 24 Section 29: Repealer 24 Section 30: No Personal Recourse 24 Section 31: Effective Date 25 Exhibit Form of Bond Exhibit Form of Escrow Agreement ---PAGE BREAK--- RESOLUTION NUMBER A RESOLUTION OF THE CITY OF MISSOULA, MISSOULA COUNTY, MONTANA, AUTHORIZING THE SALE, ISSUANCE AND DELIVERY OF NOT TO EXCEED $1,200,000 OF THE CITY’S LIMITED TAX GENERAL FUND OBLIGATION REFUNDING BONDS, SERIES 2010A; TO PROVIDE MONEY TO REFUND A PORTION OF THE CITY’S OUTSTANDING GENERAL FUND OBLIGATION BONDS, SERIES 2001A; PROVIDING FOR THE DESIGNATION, DATE, TERMS, MATURITIES, FORM, PAYMENT AND REDEMPTION PROVISIONS OF THE BONDS; DESIGNATING A FISCAL AGENT; PLEDGING THE CITY’S GENERAL CREDIT FOR THE PAYMENT OF THE BONDS; CREATING AND ADOPTING CERTAIN FUNDS AND ACCOUNTS AND PROVIDING FOR DEPOSITS THEREIN; COVENANTING TO COMPLY WITH CERTAIN FEDERAL TAX AND SECURITIES LAWS; DESIGNATING THE BONDS AS QUALIFIED TAX-EXEMPT OBLIGATIONS AUTHORIZING THE MAYOR AND THE FINANCE DIRECTOR/TREASURER TO EXECUTE A BOND PURCHASE CONTRACT; RATIFYING CERTAIN ACTIONS IN CONNECTION WITH THE PRELIMINARY OFFICIAL STATEMENT; AND PROVIDING FOR OTHER MATTERS PROPERLY RELATING THERETO CITY OF MISSOULA Missoula County, Montana LIMITED TAX GENERAL FUND OBLIGATION REFUNDING BONDS, SERIES 2010A PRINCIPAL AMOUNT OF NOT TO EXCEED $1,200,000 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MISSOULA, MISSOULA COUNTY, MONTANA, as follows: WHEREAS, the City of Missoula, Missoula County, Montana (the “City”) is a municipality duly organized and existing under and by virtue of the Constitution and the laws of the State of Montana (the “State”); WHEREAS, the City is authorized and empowered by Montana Code Annotated (“MCA”) Sections 7-7-4301 through 7-7-4316, inclusive, to issue, sell and deliver its general obligation refunding bonds to refund all or a portion of its outstanding general obligation bonds; WHEREAS, pursuant to Resolution No. 6386, adopted by the City Council of the City (the “Council”) on December 18, 2000, the City issued its “General Fund Obligation Bonds, Series 2001A” (the “2001A Bonds”) to provide funds for the financing of costs of acquiring land and a building in the City at 1301 Scott Street and constructing real and personal property improvements thereon to be used as the City’s street maintenance and storage facility and to pay the costs of issuing the 2001A Bonds; ---PAGE BREAK--- 2 WHEREAS, the City reserved the right to redeem the outstanding 2001 Bonds maturing on July 1 in the years 2012 through 2020, inclusive, in whole or in part at any time on or after July 1, 2011, for a price equal to 100 percent of the principal to be redeemed, together with accrued interest thereon and to the date of redemption; WHEREAS, after due consideration, the Council has determined that it will be financially advantageous to the City and result in a savings to the City’s taxpayers to pay, redeem and retire $955,000 principal amount of the 2001A Bonds maturing on July 1 in the years 2012 through 2020, inclusive (the “Refunded Bonds”) by the sale, issuance and delivery of refunding bonds to execute the refunding plan as detailed in Section 10 of this Resolution; WHEREAS, in order to effect such refunding plan in the manner that will be most advantageous to the City, the Council has determined to acquire certain government obligations from a portion of bond proceeds and other available money that bear interest and mature at such times as necessary to: pay interest on the Bonds, when due, up to and including July 1, 2011; and (ii) redeem the Refunded Bonds on July 1, 2011, at the price of par plus accrued interest to the date of redemption (the “Refunding Plan”), as authorized by the Resolution; WHEREAS, the Council deems it necessary and advisable that the City sell, issue and deliver at this time not to exceed $1,200,000 to accomplish the Refunding Plan and to pay the costs of the issuance of its Limited Tax General Fund Obligation Refunding Bonds, Series 2010A (the “Bonds”); WHEREAS, the Bonds do not mature later than the Refunded Bonds would have matured; WHEREAS, the annual debt service requirements of the Bonds do not exceed the annual debt service requirements of the Refunded Bonds; WHEREAS, the Council has determined it to be in the best interest of the City to authorize the Mayor and the Finance Director/Treasurer to negotiate and accept an offer to purchase the Bonds at the prices and according to the terms set forth in a bond purchase contract, pursuant to MCA Section 7-7-4311, without publishing prior notice thereof; NOW, THEREFORE, IT IS HEREBY FOUND, DETERMINED AND ORDERED as follows: Section 1: Definitions As used in this Resolution, the following terms have the meanings provided in this Section 1. Bond Purchase Contract shall mean the contract between the Underwriter and the City regarding the purchase and sale of the Bonds, pursuant to the terms of this Resolution. Bond Register shall mean the registration records maintained by the Registrar on which shall appear the names and addresses of the Registered Owners. Bonds shall mean the herein-authorized series of bonds, designated as “City of Missoula, Montana, Limited Tax General Fund Obligation Refunding Bonds, Series 2010A.” ---PAGE BREAK--- 3 City shall mean the City of Missoula, Missoula County, Montana. City Clerk shall mean the de facto or de jure Clerk of the City, or other officer of the City who is the custodian of the seal of the City and of the records of the proceedings of the Council, or her successor in functions, if any. Code shall mean the Internal Revenue Code of 1986, as amended, and any Treasury Regulations promulgated thereunder. Council shall mean the City’s Council, as duly and regularly constituted from time to time. Debt Service Account mean the City’s “Limited Tax General Fund Obligation Refunding Bonds, Series 2010A Debt Service Account” created pursuant to Section 9 of this Resolution. Director of Finance/Treasurer shall mean the Finance Director/Treasurer of the City, duly appointed by the Mayor, or his successor in functions. DTC shall mean The Depository Trust Company, a limited-purpose trust company organized under the laws of the state of New York, which will act as securities depository for the Bonds. Escrow Account shall mean the “Limited Tax General Fund Obligation Refunding Bonds, Series 2010A, Escrow Account” created pursuant to Section 12 of this Resolution. Escrow Agreement shall mean the “Limited Tax General Fund Obligation Refunding Bonds, Series 2010A, Escrow Agreement.” Financial Advisor shall mean Springsted Incorporated, St. Paul, Minnesota, the City’s financial advisor with respect to the issuance of the Bonds. General Fund means the City’s “General Fund” heretofore created by the City. Government Obligations shall mean cash or any government obligation defined in MCA Section 7-7-4316 pledged solely for the redemption of the Refunded Bonds, and referred to in Section 13 of this Resolution. Letter of Representations shall mean the Blanket Issuer Letter of Representations, dated March 11, 1996, setting forth certain understandings of the City and the Registrar with respect to DTC’s services. Mayor shall mean the de facto or de jure Mayor of the City, or any presiding officer or titular head of the City, or his successor in functions, if any. Outstanding shall mean, when used with reference to the Bonds, as of any particular date, all Bonds that have been issued, executed, authenticated and delivered except: Bonds canceled because of payment or redemption prior to their stated dates of maturity; and any Bond (or portion thereof) deemed to have been paid pursuant to Section 20 of this Resolution. ---PAGE BREAK--- 4 Participants shall mean those broker-dealers, banks and other financial institutions from time to time for which DTC holds the Bonds as securities depository. Refunded Bonds shall mean the Outstanding 2001A Bonds maturing on July 1 in the years 2012 through 2020, inclusive. Refunding Plan shall mean the payment of the interest on the Bonds when due, up to and including July 1, 2011; and redemption of the Refunded Bonds on July 1, 2011, at the price of par plus accrued interest to the date of redemption, if any, as authorized by this Resolution. Refunding Trustee shall mean U.S. Bank National Association, appointed herein by the Council to supervise the Escrow Account and the Government Obligations. Registered Owner shall mean the person named as the registered owner of a Bond on the Bond Register. Registrar shall mean U.S. Bank National Association, acting in the capacity as registrar, authenticating agent, paying agent and transfer agent of the Bonds, or its successor in functions, as now or hereafter designated. Resolution shall mean this resolution adopted by the Council on April 26, 2010, authorizing the sale, issuance and delivery of the Bonds. Resolution No. 6386 shall mean Resolution No. 6386, adopted by the Council on December 18, 2000, authorizing the issuance, sale and delivery of the 2001A Bonds. Treasurer shall mean the Finance Director/Treasurer of the City, duly appointed by the Mayor. True Interest Cost shall mean the yield that, when discounting all future principal and interest payments to the delivery date of the Bonds, produces a present value equal to the principal amount of the Bonds, less the Underwriter’s discount, plus any original issue premium, less any original issue discount, plus accrued interest, if any. Underwriter shall mean D.A. Davidson & Co., of Great Falls, Montana, as the initial purchaser of the Bonds. 2001A Bonds shall mean the City’s “General Fund Obligation Bonds, Series 2001A,” originally issued in the principal amount of $1,600,000, authorized by Resolution No. 6386. Section 2: Interpretation For all purposes of this Resolution, except as otherwise expressly provided or unless the context otherwise requires: A. Internal References. All references in this Resolution to designated “Sections” and other subdivisions are to the designated sections and other subdivisions of this Resolution. The words “herein,” “hereof,” “hereto,” “hereby,” “hereunder” and other words of similar import refer to this Resolution as a whole and not to any particular section or other subdivision. ---PAGE BREAK--- 5 B. Persons. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Words imparting the singular number shall include the plural numbers and vice versa, unless the context shall otherwise dictate. Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public Councils, as well as natural persons. C. Headings. Any headings preceding the texts of the several sections of this Resolution and the table of contents, shall be solely for convenience of reference and shall not constitute a part of this Resolution, nor shall they affect its meaning, construction or effect. D. Writing Requirement. Every “notice,” “certificate,” “consent” or similar action hereunder by the City shall, unless the form thereof is specifically provided, be in writing signed by an authorized representative of the City. E. Time. In the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and each of the words “to” and “until” means “to but excluding.” F. Redemption. Words importing the redemption or redeeming of a Bond or the calling of a Bond for redemption do not include or connote the payment of such Bond at its stated maturity or the purchase of such Bond. G. Payment Terms. References to the payment of the Bonds shall be deemed to include references to the payment of interest thereon. Section 3: Purpose of the Bonds The Bonds are being issued to provide money to accomplish the Refunding Plan and to pay the costs of issuance of the Bonds. Section 4: Authorization of the Bonds General obligation bonds of the City, designated “City of Missoula, Montana, Limited Tax General Fund Obligation Refunding Bonds, Series 2010A,” are hereby authorized to be sold, issued and delivered pursuant to MCA Sections 7-7-4301 through 7-7-4316, inclusive, and Section 17-5-2102. The Bonds shall be issued in an aggregate principal of not to exceed $1,200,000; shall be issued in fully registered form; shall be in denominations of $5,000 each or any integral multiple thereof within a single maturity; and shall be numbered separately in such manner and with any additional designation as the Registrar deems necessary for purposes of identification. The Bonds shall be in substantially the form of Exhibit attached hereto. The Bond Purchase Contract shall establish the following: A. the date or dates of the Bonds; B. the date or dates upon which the Bonds shall mature; C. the principal amount of the Bonds maturing on each maturity date; ---PAGE BREAK--- 6 D. the interest rate for each maturity of the Bonds; and E. the date on which interest first will be payable for each Bond. Section 5: Redemption Prior to Maturity A. Optional Redemption. The Bonds may be subject to redemption prior to their stated dates of maturity at the times and prices and in the manner specified in the Bond Purchase Contract. B. Partial Redemption. In accordance with the preceding paragraph, portions of the principal amount of any Bond, in installments of $5,000 or any integral multiple of $5,000, may also be redeemed. If less than all the principal amount of any Bond is redeemed, upon surrender of such Bond at the designated corporate trust office of the Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal amount thereof, a new Bond or Bonds, at the option of the Registered Owner, with like maturity and interest rate, in any denomination authorized by this Resolution. C. Notice of Redemption. Unless waived by the Registered Owner of any Bond to be redeemed, notice of any such redemption shall be sent by the Registrar by first-class mail, postage prepaid, not less than 30 nor more than 60 days prior to the date fixed for redemption to the Registered Owner of each Bond to be redeemed at the address shown on the Bond Register, or at such other address as may be furnished in writing by such Registered Owner to the Registrar. The requirements of this subsection C shall be deemed to be complied with when notice is mailed as herein provided, regardless of whether it is actually received by the Registered Owner of any Bond to be redeemed. D. Special Notice of Redemption to DTC. For so long as DTC is the securities depository for the Bonds, the Registrar shall send redemption and defeasance notices to DTC in the manner required by the Letter of Representations. E. Continuing Disclosure Undertaking. For so long as Section 24 of this Resolution remains in effect, redemption notices shall also be given in the manner specified in subsection E of such Section 24; provided, neither any defect in such notices nor any failure to give all or any portion of such notices shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as prescribed in subsection C above. F. Effect of Redemption. When so called for redemption, the Bonds shall cease to accrue interest on the specified redemption date, provided money for redemption is on deposit at the place of payment at that time, and shall not be deemed to be Outstanding as of such redemption date. G. Voluntary Redemption Notice. In addition to the notice required by subsection C above, further notice may be given by the Registrar as set out below, but neither any defect in such further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as prescribed in such subsection C. ---PAGE BREAK--- 7 Each further notice of redemption given hereunder may contain the following information: the redemption date; the redemption price; if less than all Bonds Outstanding are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed; notification that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after such date; the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the designated corporate trust office of the Registrar; the CUSIP numbers, if any, of all Bonds being redeemed; the date of issue of the Bonds as originally issued; the rate of interest borne by each Bond being redeemed; the maturity date of each Bond being redeemed; and any other descriptive information needed to identify accurately the Bonds being redeemed. Each further notice of redemption may be sent at least 30 days before the redemption date by first-class mail to: all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds, such depositories now being DTC; and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds (such as Moody’s Municipal and Government, or Standard & Poor’s Called Bond Record). Each such further notice may be published one time in The Bond Buyer in New York, New York or, if such publication is impractical or unlikely to reach a substantial number of the Registered Owners, in some other financial newspaper or journal which regularly carries notices of redemption of other obligations similar to the Bonds, such publication to be made at least 30 days prior to the date fixed for redemption. H. Open Market Purchase and Cancellation. The City hereby reserves the right to purchase the Bonds on the open market at any time and at any price. All Bonds purchased or redeemed under this Section 5 shall be canceled. Section 6: Sale of the Bonds Authorized The Bonds shall be sold to the Underwriter pursuant to the Bond Purchase Contract. The Mayor and the Finance Director/Treasurer are each hereby authorized and directed to execute the Bond Purchase Contract and cause the Bonds to be delivered to the Underwriter at such time as the following conditions are satisfied: A. the True Interest Cost of the Bonds does not exceed four percent B. the Bonds do not mature on a date later than July 1, 2020; C. the principal amount of the Bonds does not exceed $1,200,000; and D. the net present value savings shall be at least $35,000. ---PAGE BREAK--- 8 Prior to executing the Bond Purchase Contract, the Mayor and the Finance Director/Treasurer shall cause the following information to be included in the Bond Purchase Contract: A. the date of the Bond Purchase Contract; B. the purchase price for the Bonds and its components; C. the terms to be established in the Bond Purchase Contract pursuant to Section 4 of this Resolution; D. the date the Bonds are to be delivered to the Underwriter; E. the approximate yield and price for each maturity of the Bonds; and F. the redemption provisions pertaining to the Bonds. The Mayor and the Finance Director/Treasurer are each hereby authorized to approve additions, deletions or alterations to the Bond Purchase Contract or any other document or certificate related hereto so long as such additions, deletions or alterations do not substantially alter the intent and substance of this Resolution. The Mayor, City Clerk, Finance Director/Treasurer, the Financial Advisor and Koegen Edwards LLP are hereby further authorized to do everything necessary for the prompt execution and delivery of the Bonds to the Underwriter and for the proper application and use of the proceeds of the sale thereof, including: preparing the final official statement regarding the Bonds; and executing such certificates and receipts as may be necessary to properly document the issuance of the Bonds. Section 7: Place, Manner and Medium of Payment A. Payment Medium. The principal of and interest on the Bonds are payable in lawful money of the United States of America to the Registered Owners thereof. B. Payment of Interest. Payment of each installment of interest shall be made to the Registered Owner whose name appears on the Bond Register at the close of business on the fifteenth day of the calendar month preceding the interest payment date. Each installment of interest shall be paid by check or draft of the Registrar mailed to such Registered Owner on the due date at the address appearing on the Bond Register, or at such other address as may be furnished in writing by such Registered Owner to the Registrar. C. Payment of Principal. Principal of each Bond shall be payable to the Registered Owner, upon presentation and surrender of the Bonds on or after the date of maturity or prior redemption, at the designated corporate trust office of the Registrar. Upon the payment of the Bonds at maturity, and/or upon payment of the redemption price of any Bond being redeemed, each check or other transfer of money issued for such purpose shall bear the CUSIP number, if any, and identify by issue and maturity the Bonds being paid or redeemed with the proceeds of such check or other transfer. ---PAGE BREAK--- 9 D. Interest on Delinquent Amounts. If any Bond is not redeemed when properly presented at its maturity or redemption date, the City shall pay interest on that Bond at the same rate provided in the Bond from and after its maturity or redemption date until the principal of and interest on such Bond is paid in full or until sufficient money for its payment in full is on deposit in the Debt Service Account and the Bond has been called for payment by giving notice to the Registered Owner of the unpaid Bond. E. Ownership of Bonds. The City and the Registrar may deem and treat the Registered Owner of each Bond as the absolute owner of such Bond for the purpose of receiving payments of principal and interest due on such Bond and for all other purposes, and neither the City nor the Registrar shall be affected by any notice to the contrary. Section 8: General Obligations, Pledge of General Credit The Bonds are general obligations of the City, but are not secured by a pledge of the taxing power of the City. The general credit (but not the taxing power) of the City shall be and is hereby irrevocably pledged to the prompt and full payment of the principal of and interest on the Bonds when due. The principal of and interest on the Bonds are payable from any funds of the City legally for the payment thereof, including funds on hand in the General Fund. If on any date the payment of principal of or interest on the Bonds is due and the amount on hand in the Debt Service Account is insufficient for the payment thereof, the Council shall appropriate to the Debt Service Account sufficient legally available money of the City to pay such deficiency. As security for the Bonds, the City hereby covenants and agrees to appropriate each fiscal year during the term of the Bonds from the General Fund an amount sufficient for the payment of the principal of and interest on the Bonds due in such fiscal year. Such funds shall be credited to the Debt Service Account. It is acknowledged and agreed that the City has not granted a lien on any revenues in the General Fund or otherwise provided for the segregation of such revenues as security for the payment of the Bonds, and that any ad valorem taxes the City may in its discretion levy to pay principal of and interest on the Bonds are subject to applicable limits now or hereafter imposed by law on the amount of taxes levied by the City. Section 9: The Debt Service Account A. Debt Service Account. There is hereby created pursuant and shall continue to be maintained in the office of the Treasurer, an account separate and distinct from all other accounts of the City, designated the “Limited Tax General Fund Obligation Refunding Bonds, Series 2010A Debt Service Account” for the purpose of paying the principal of, premium, if any, and interest on the Bonds when due. B. Deposits to the Debt Service Account. Accrued interest received from the sale of the Bonds, if any, shall be deposited in the Debt Service Account. Money in the General Fund and, as from time to time directed by the Council, other City money legally available for payment of the Bonds will be deposited to the Debt Service Account to the extent necessary to pay the principal of, premium, if any, and interest on the Bonds. The Treasurer is hereby authorized and directed to pay to the Registrar, in its capacity as the City’s paying agent, all payments of principal and interest due on the Bonds in sufficient time for such payments to be made. ---PAGE BREAK--- 10 C. Investment of Money in the Debt Service Account. Money in the Debt Service Account may be invested as permitted by law, which investments shall mature prior to the date on which such money shall be needed for required interest or principal payments. All interest earned and income derived by virtue of such investments shall remain in the Debt Service Account and be used to meet the required deposits therein. Section 10: The Refunding Plan A. Description of the Refunded Bonds. The City is desirous of paying, redeeming and retiring the Refunded Bonds. The Refunded Bonds are callable on July 1, 2011. B. Payments on the Refunded Bonds. The City shall irrevocably deposit certain Government Obligations in sufficient amounts and maturing at appropriate times to pay the interest on the Bonds, up to and including July 1, 2011, and to redeem and retire the Refunded Bonds on such date at the price of 100 percent of the principal amount thereof. Any amounts necessary to accomplish the Refunding Plan that are not provided for in full by the purchase and deposit of the Government Obligations shall be provided for by an irrevocable deposit of cash from the proceeds of the Bonds or from other legally available money of the City. C. Notice of Redemption. The Refunding Trustee is hereby directed to give notice of the call and redemption of the Refunded Bonds in substantially in the form set forth as Attachment II to the Escrow Agreement and in the manner required by Resolution No. 6386. Section 11: The Refunding Trustee; Escrow Agreement The City hereby appoints U.S. Bank National Association to serve as Refunding Trustee with respect to the Refunded Bonds and the Refunding Plan. In order to carry out the purposes of this Resolution, the Mayor and the City Clerk are authorized and directed to execute and deliver to the Refunding Trustee an Escrow Agreement substantially in the form marked Exhibit attached hereto and by this reference incorporated herein. The Escrow Agreement shall set forth the duties, obligations and responsibilities of the Refunding Trustee in connection with the refunding of the Refunded Bonds as provided herein; and the Refunding Trustee shall state therein that such provisions for the payment of the fees, compensation and expenses of such Refunding Trustee are satisfactory to it. The Refunding Trustee shall be entitled to the fees provided in the Escrow Agreement and no other fees. Section 12: Creation of the Escrow Account A. Creation of the Escrow Account. The Refunding Trustee is hereby authorized and directed to establish the “Limited Tax General Fund Obligation Refunding Bonds, Series 2010A Escrow Account,” or such other designations as conform to accounting principles and banking practices. B. Deposits into the Escrow Account. The proceeds of the Bonds other than: accrued interest, if any, received from the sale of the Bonds, which shall be deposited into the Debt Service Account and amounts, if any, received due to rounding the principal amount of the Bonds to the next denomination of $5,000 and to pay for any contingencies, which shall be deposited into the Debt Service Account, shall be deposited with the Refunding Trustee, which shall use such money to acquire Government Obligations for deposit into the Escrow Account ---PAGE BREAK--- 11 and to pay the costs of issuing the Bonds on the issue date of the Bonds. Such Government Obligations, together with any cash balance remaining after the Government Obligations are purchased and such issuance costs paid, shall be irrevocably deposited into the Escrow Account. The Government Obligations and money to be deposited into the Escrow Account shall be held by the Refunding Trustee in trust. All Government Obligations, all proceeds thereof and all money credited to the Escrow Account shall be deemed so credited to and held in the Escrow Account notwithstanding the fact that such Government Obligations, proceeds and money therein are held by the Refunding Trustee in trust for the owners of the Refunded Bonds and the Bonds in order to accomplish the Refunding Plan. C. Use of Money in the Escrow Account. The Refunding Trustee, on behalf of the City, is hereby authorized and directed to use the proceeds of the Bonds, together with other legally available money of the City, to purchase Government Obligations in the amounts, of the type, bearing interest and maturing in such amounts as are necessary to make the payments to accomplish the Refunding Plan. The investment income from and maturing principal of the Government Obligations and money to be deposited into the Escrow Account shall be transmitted to the Registrar for the sole purpose of accomplishing the Refunding Plan. D. Surplus Money. Any money remaining on deposit in the Escrow Account after the payment in full of the Refunded Bonds, as herein set forth, shall be transferred by the Refunding Trustee to the City and deposited into the Debt Service Account. Section 13: The Government Obligations A. Purpose of the Government Obligations. The Government Obligations shall be used for the sole purpose of making the payments described in Section 12 above. The Government Obligations, the earnings thereon and the proceeds therefrom may be used for no other purpose, nor may any of such investments be liquidated prior to maturity without the written opinion of nationally recognized bond counsel that such redemption would not cause the interest on the Refunded Bonds and the Bonds to become includible in gross income for federal income tax purposes. B. Sufficiency of the Government Obligations. Prior to the delivery of the Bonds, the City shall receive an opinion of a nationally recognized firm of independent certified public accountants or arbitrage consultants stating, in substance, that the money and Government Obligations to be deposited with the Refunding Trustee for the payment of the Refunded Bonds will discharge and satisfy the City’s obligations under Resolution No. 6386 to make payments on the Refunded Bonds in accordance with the Refunding Plan. C. Substitution of the Government Obligations. The City hereby reserves the right to substitute Government Obligations for investments in the Escrow Account in the event it may do so pursuant to Section 103 of the Code; provided, that at all times the money and Government Obligations in the Escrow Account shall be sufficient to accomplish the Refunding Plan as provided herein. Prior to each such substitution, the City shall obtain: a supplemental verification addressed to the City and the Refunding Trustee from an independent firm of certified public accountants or arbitrage consultants, which shall be satisfactory to nationally recognized bond counsel, that the money and ---PAGE BREAK--- 12 Government Obligations on deposit in the Escrow Account after such substitution will be sufficient to accomplish the Refunding Plan and that such substitute Government Obligations are noncallable; and a written opinion addressed to the City from nationally recognized bond counsel that such substitution will not cause the interest on the Refunded Bonds and the Bonds to become includible in gross income for federal income tax purposes. Section 14: Irrevocable Call A. Irrevocable Call for Redemption. In accordance with Section 2.06 of Resolution No. 6386, the City hereby calls the Refunded Bonds for redemption on July 1, 2011. Such call for redemption shall be irrevocable upon the delivery of the Bonds to the Purchaser. B. Irrevocable Pledge of Amounts in the Escrow Account. The City hereby irrevocably pledges the Government Obligations and amounts on deposit in the Escrow Account to pay the interest on the Bonds, up to and including July 1, 2011, and to redeem and retire the Refunded Bonds on such date at the price of 100 percent of the principal amount thereof. Such Government Obligations are hereby irrevocably pledged to be set aside to effect such payment, redemption and retirement. C. Findings Regarding Defeasance of the Refunded Bonds. The City hereby finds that, as of the date the Bonds are issued and the money and Government Obligations are deposited into the Escrow Account: no further payments need to be made into the Debt Service Account for the payment of the principal of and interest on the Refunded Bonds on and after July 1, 2011; on July 1, 2011, the Refunded Bonds and the interest accrued thereon shall cease to be entitled to any lien, benefit or security of Resolution No. 6386 except the right to receive the funds so set aside and pledged; and on July 1, 2011, the Refunded Bonds and the interest accruing thereon shall no longer be deemed to be Outstanding under Resolution No. 6386. D. Bonds. The Council hereby further finds and determines that the issuance and sale of the Bonds will benefit the City through a reduction in the debt service requirement, and will thereby effect a savings to the City. In making such finding and determination, the Council has given consideration to the interest to maturity of the Bonds and the Refunded Bonds, the costs of issuance of the Bonds and the known earned income from the Government Obligations pending the redemption and retirement of the Refunded Bonds. Section 15: Execution and Authentication of the Bonds A. Execution of the Bonds. Without unreasonable delay, the City shall cause definitive Bonds to be prepared, executed, and delivered, which Bonds shall be lithographed or printed with steel engraved or lithographed borders. The Bonds shall be executed on behalf of the City by the manual or facsimile signature of the Mayor, by the manual or facsimile signature of the City Clerk and by the manual or facsimile signature of the Treasurer and shall have the seal of the City impressed or imprinted thereon. B. Authentication of the Bonds. The executed Bonds shall be delivered to the Registrar for authentication. The Bonds shall be numbered separately in the manner and with ---PAGE BREAK--- 13 any additional designation as the Registrar deems necessary for purposes of identification. Only those Bonds that bear a Certificate of Authentication substantially in the form set forth in Exhibit attached hereto and manually executed by an authorized representative of the Registrar shall be valid or obligatory for any purpose or entitled to the benefits of this Resolution. Such Certificate of Authentication shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Resolution. C. Temporary Bonds. Until the definitive Bonds are prepared, the City may, if deemed necessary by the City Clerk, utilize a temporary Bond which shall be typewritten, and which shall be delivered to the Purchaser in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds. Such temporary Bond shall be dated as of the date of the Bonds, shall be in the denomination of not to exceed $1,200,000, shall be numbered T-1, shall be substantially of the tenor of such definitive Bonds, but with such omissions, insertions and variations as may be appropriate to temporary bonds, and shall be signed by the manual or facsimile signature of the Mayor, by the manual or facsimile signature of the City Clerk and by the manual or facsimile signature of the Treasurer and shall have the seal of the City impressed or imprinted thereon. The Treasurer shall be the Registrar in the event and for so long as a temporary Bond is utilized. D. Validity of Signatures. In case any of the officers who shall have signed or attested any of the Bonds shall cease to be such officer or officers of the City before the Bonds so signed or attested shall have been authenticated or delivered by the Registrar, or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued, and, upon such authentication, delivery and issue, shall be as binding upon the City as though those who signed and attested the same had continued to be such officers of the City. Any Bond may also be signed and attested on behalf of the City by such persons as at the actual date of execution of such Bond shall be the proper officers of the City although at the original date of such Bond any such person shall not have been such officer of the City. Section 16: The Registrar A. Registrar Appointed. U.S. Bank National Association is hereby appointed as the City’s legally designated registrar, authenticating agent, paying agent and transfer agent with respect to the Bonds. B. Delegated Duties. The Registrar is hereby authorized and directed, on behalf of the City, to authenticate and deliver Bonds initially issued or transferred or exchanged in accordance with the provisions of the Bonds and this Resolution and to carry out all of the Registrar’s powers and duties under this Resolution. C. Bond Register. The Bonds shall be issued only in registered form as to both principal and interest. The Registrar shall keep, or cause to be kept, at its designated corporate trust office, the Bond Register which shall at all times be open to inspection by the City. D. Fees and Costs. The City shall pay to the Registrar from time to time reasonable compensation for all services rendered under this Resolution together with reasonable expenses, charges, fees of counsel, accountants and consultants and other disbursements, including those of ---PAGE BREAK--- 14 its attorneys, agents and employees, incurred in good faith in and about the performance of their powers and duties under this Resolution. E. Representations. The Registrar shall be responsible for its representations contained in the Registrar’s Certificate of Authentication on the Bonds. F. Ownership Rights. The Registrar may become the Registered Owner of Bonds with the same rights it would have if it were not the Registrar, and, to the extent permitted by law, may act as depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Registered Owners of the Bonds. G. Cancellation of Surrendered Bonds. Bonds surrendered to the Registrar for payment, redemption, transfer or exchange, as well as Bonds surrendered by the City for cancellation, shall be canceled immediately by the Registrar and returned to the City. Section 17: Book-Entry System Authorized A. The Bonds shall be initially issued in the form of a separate, single-certificated, fully registered Bond for each maturity, in the aggregate principal amount of such maturity. Upon initial issuance, the ownership of each Bond shall be registered in the Bond Register in the name of Cede & Co., as nominee of DTC, the securities depository for the Bonds. Except as provided in subsection D of this Section 17 all of the Bonds shall be registered in the Bond Register in the name of Cede & Co., as nominee of DTC. B. With respect to Bonds registered in the Bond Register in the name of Cede & Co., as nominee of DTC, the City and the Registrar shall have no responsibility or obligation to any Participant or to any person on behalf of which a Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Registrar shall have no responsibility or obligation with respect to: the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, the delivery to any Participant or any other person, other than a Registered Owner, of any notice with respect to the Bonds, including any notice of redemption, or the payment to any Participant or any other person, other than a Registered Owner, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City and the Registrar may treat and consider the Registered Owner of each Bond as the absolute owner of such Bond for the purpose of payment of principal, premium, if any, and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Registrar shall pay all principal of, premium, if any, and the interest on the Bonds, and all such payments shall be valid and effective to fully satisfy and discharge the City’s obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sums so paid. No person other than a Registered Owner shall receive a certificated Bond evidencing the obligation of the City to make payments of principal, premium, if any, and interest pursuant to this Resolution. 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., and subject to the provisions herein with respect to the transfer and payment of the Bonds, the phrase “Cede & Co.” in this Resolution shall refer to such new nominee of DTC. ---PAGE BREAK--- 15 C. The City heretofore has delivered a Letter of Representations to the Registrar and DTC. The delivery of the Letter of Representations shall not in any way limit the provisions of subsection B of this Section 17 or in any other way impose upon the City any obligation whatsoever with respect to persons having interests in the Bonds other than the Registered Owner. The Registrar shall take all action necessary for all representations of the City in the Letter of Representations with respect to the Registrar, to at all times be complied with. D. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and to the Registrar, and discharging its responsibilities with respect thereto under applicable law. The City, in its sole discretion and without the consent of any other person, may terminate the services of DTC with respect to the Bonds if the City determines that: DTC is unable to discharge its responsibilities with respect to the Bonds; or a continuation of the requirement that all of the Bonds be registered in the Bond Register in the name of Cede & Co., or any other nominee of DTC, is not in the best interest of the beneficial owners of the Bonds. Upon termination of the services of DTC with respect to the Bonds pursuant to subsection D(2)(b) of this Section 17, or upon the discontinuance or termination of the services of DTC with respect to the Bonds pursuant to subsection D(1) or subsection D(2)(a) of this Section 17 after which no substitute securities depository willing to undertake the functions of DTC hereunder can be found that, in the opinion of the City, is willing and able to undertake such functions upon reasonable and customary terms, the City shall deliver certificated Bonds at the expense of the City, as described in this Resolution, and the Bonds shall no longer be restricted to being registered in the Bond Register in the name of Cede & Co. as nominee of DTC, but may be registered in the names that the Registered Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Resolution. E. Notwithstanding any other provision of this Resolution to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal, premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, in the manner provided in the Letter of Representations. Section 18: Transfer and Exchange of the Bonds A. Transfer of Bonds. Each Bond shall be transferable by the Registered Owner thereof in person, or by its attorney duly authorized in writing, upon due completion of the assignment form appearing thereon and upon surrender of such Bond at the designated corporate trust office of the Registrar for cancellation and issuance of a new Bond registered in the name of the transferee, in exchange therefor. B. Exchange of Bonds. Each Bond shall be exchangeable by the Registered Owner thereof in person, or by its attorney duly authorized in writing, for one or more new Bonds, upon surrender of such Bond at the designated corporate trust office of the Registrar for cancellation. ---PAGE BREAK--- 16 C. Authentication and Delivery of New Bonds. Whenever a Bond shall be surrendered for transfer or exchange, the Registrar shall authenticate and deliver to the transferee or exchangee, in exchange therefor, a new fully registered Bond or Bonds of any authorized denomination or denominations, of the same maturity and interest rate as, and for the aggregate principal amount of, the Bond being surrendered. Notwithstanding the foregoing sentence, the Registrar is not required to transfer or exchange any Bond during the 15 days preceding any principal or interest payment date. D. Payment of Fees and Costs. The Registrar shall require the payment by the Registered Owner requesting such transfer or exchange of any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. Section 19: Mutilated, Lost, Stolen or Destroyed Bonds A. Issuance of Substitute Bonds. If any Bond shall become mutilated, destroyed, lost or stolen, the affected Registered Owner shall be entitled to the issuance of a substitute Bond only as follows: in the case of a lost, stolen or destroyed Bond, the Registered Owner shall provide notice of the loss, theft or destruction to the City and the Registrar within a reasonable time after the Registered Owner receives notice of the loss, theft or destruction, request the issuance of a substitute Bond, provide evidence, satisfactory to the City and the Registrar, of the ownership and the loss, theft or destruction of the affected Bond, and file in the offices of the Treasurer or City Clerk and the Registrar a written affidavit specifically alleging on oath that such Registered Owner is the proper owner, payee or legal representative of such owner or payee of the Bond that has been lost, stolen or destroyed, giving the date the Bond was issued, the number, principal amount and series of such Bond, and stating that the Bond has been lost, stolen or destroyed, and has not been paid and has not been received by such Registered Owner; in the case of a mutilated Bond, the Registered Owner shall surrender the Bond to the Registrar for cancellation; and in all cases, the Registered Owner shall provide indemnity against any and all claims arising out of or otherwise related to the issuance of substitute Bonds pursuant to this Section 19 satisfactory to the City and the Registrar. Upon compliance with the foregoing, a new Bond of like tenor and denomination, bearing the same number as the mutilated, destroyed, lost or stolen Bond, and with the word “DUPLICATE” stamped or printed plainly on its face, shall be executed by the City, authenticated by the Registrar and delivered to the Registered Owner, all at the expense of the Registered Owner to whom the substitute Bond is delivered. Notwithstanding the foregoing, the Registrar shall not be required to authenticate and deliver any substitute Bond for a Bond which has been called for redemption or which has matured or is about to mature and, in any such case, the principal or redemption price and interest then due or becoming due shall be paid by the Registrar in accordance with the terms of the mutilated, destroyed, lost or stolen Bond without substitution therefor. ---PAGE BREAK--- 17 B. Notation on the Bond Register. Upon the issuance and authentication of any substitute Bond under the provisions of this Section 19, the Registrar shall enter upon the Bond Register a notation that the original Bond was cancelled and a substitute Bond was issued therefor. C. Rights of Registered Owners of Substitute Bonds. Every substituted Bond issued pursuant to this Section 19 shall constitute an additional contractual obligation of the City and shall be entitled to all the benefits of this Resolution equally and proportionately with any and all other Bonds duly issued hereunder unless the Bond alleged to have been destroyed, lost or stolen shall be at any time enforceable by a bona fide purchaser for value without notice. In the event the Bond alleged to have been destroyed, lost or stolen shall be enforceable by anyone, the City may recover the substitute Bond from the Registered Owner to whom it was issued or from anyone taking under the Registered Owner except a bona fide purchaser for value without notice. D. Exclusive Rights. All Bonds shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Bonds, and shall preclude any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or of investment or other securities without their surrender. Section 20: Defeasance of the Bonds In the event that money and/or government obligations, maturing or having guaranteed redemption prices at the option of the owner at such times and bearing interest to be earned thereon, in such amounts as are sufficient (together with any resulting cash balances) to redeem and retire part or all of the Bonds in accordance with their terms, are hereafter irrevocably set aside in a special account and pledged to effect such redemption and retirement, then no further payments need be made into the Debt Service Account for the payment of the principal of and interest on the certain Bonds so provided for, and such Bonds and interest accrued thereon shall no longer be deemed to be Outstanding hereunder. If the principal or redemption price of any Bonds becoming due, at maturity or otherwise, together with all interest accruing thereon to the due date, has been paid or provision therefor made in accordance with this Section 20, all interest on such Bonds shall cease to accrue on the due date and all liability of the City with respect to such Bonds shall likewise cease, except as hereinafter provided. Thereafter the Registered Owners of such Bonds shall be restricted exclusively to the funds so deposited for any claim of whatsoever nature with respect to such Bonds, and the Registrar shall hold such funds in trust for such Registered Owners uninvested and without interest. Section 21: Cancellation of Surrendered Bonds Bonds surrendered to the Registrar for payment, redemption, transfer or exchange, as well as Bonds surrendered by the City for cancellation, shall be canceled immediately by the Registrar and returned to the City. Such Bonds thereafter shall be destroyed. ---PAGE BREAK--- 18 Section 22: Tax Covenants A. The City covenants to comply with each requirement of the Code necessary to maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes. In furtherance of the covenant contained in the preceding sentence, the City covenants to comply with the provisions of the Arbitrage and Tax Regulatory Certificate executed by the City on the date of initial issuance and delivery of the Bonds, as such tax certificate may be amended from time to time. B. The City covenants to make any and all payments required to be made to the United States Department of the Treasury in connection with the Bonds pursuant to Section 148(f) of the Code. C. Notwithstanding any other provision of this Resolution to the contrary, so long as necessary in order to maintain the exclusion from gross income of interest on the Bonds for federal income tax purposes, the covenants contained in this Section 22 shall survive the payment of the Bonds and the interest thereon, including any payment or defeasance thereof pursuant to Section 20 of this Resolution D. Notwithstanding any other provision of this Resolution to the contrary, upon the City’s failure to observe or refusal to comply with the above covenants, the Registered Owners, or any trustee acting on their behalf, shall be entitled to the rights and remedies provided to the Registered Owners under this Resolution, other than the right to declare the principal of all Bonds then Outstanding, and the interest accrued thereon, to be due and payable and neither the holder nor registered owner of bonds of any series other than the Bonds, nor any trustee acting on their behalf, shall be entitled to exercise any right or remedy provided to the Registered Owners under this Resolution based upon the City’s failure to observe, or refusal to comply with, the above covenants. Section 23: Amendments to the Resolution A. The Council may adopt at any time resolutions supplemental hereto, which resolutions thereafter shall become a part of this Resolution, for any one or more of all of the following purposes: to add to or delete from the covenants and agreements of the City in this Resolution, so long as the covenants and agreements thereafter to be observed shall not adversely affect the interests of the Registered Owners of any Bonds, or surrender any right or power herein reserved; or to make such provisions for the purpose of curing any ambiguities or of curing, correcting or supplementing any defective provision contained in this Resolution or any resolution authorizing future bonds in regard to matters or questions arising under such resolutions as the Council may deem necessary or desirable and not inconsistent with such resolutions and which shall not adversely affect, in any material respect, the interests of the Registered Owners of the Bonds. ---PAGE BREAK--- 19 Any such supplemental resolution may be adopted without the consent of the Registered Owners of any Bonds at any time Outstanding, notwithstanding any of the provisions of subsection B of this Section 23. B. With the consent of not less than 65 percent in aggregate principal amount of the Bonds at the time Outstanding, the Council may adopt a resolution or resolutions supplemental hereto for the purpose of adding any provisions to, or changing in any manner, or eliminating any of the provisions of this Resolution or of any supplemental resolution; provided, however, that no such supplemental resolution shall: extend the fixed maturity of any Bonds, or reduce the rate of interest thereon, or extend the time of payments of interest from their due date, or reduce the amount of the principal thereof, or reduce any premium payable on the redemption thereof, without the consent of the Registered Owner of each Bond so affected; or reduce the aforesaid percentage of Registered Owners of Bonds required to approve any such supplemental resolution, without the consent of the Registered Owners of all of the Bonds then Outstanding. It shall not be necessary for the consent of Registered Owners of Bonds under this subsection B to approve the particular form of any proposed supplemental resolution, but it shall be sufficient if such consent shall approve the substance thereof. C. Upon the adoption of any supplemental resolution pursuant to the provisions of this Section 23, this Resolution shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations of the City under this Resolution and all Registered Owners of Bonds Outstanding hereunder shall thereafter be determined, exercised and enforced thereunder, subject in all respects to such modification and amendments, and all terms and conditions of any such supplemental resolution shall be deemed to be part of the terms and conditions of this Resolution for any and all purposes. D. Bonds executed and delivered after the execution of any supplemental resolution adopted pursuant to the provisions of this Section 23 may have a notation as to any matter provided for in such supplemental resolution, and if such supplemental resolution shall so provide, new Bonds so modified as to conform in the opinion of the Council to any modification of this Resolution contained in any such supplemental resolution, may be prepared and delivered without cost to the Registered Owners of any affected Bonds then Outstanding, upon surrender for cancellation of such Bonds in equal aggregate principal amounts. Section 24: Covenant to Provide Continuing Disclosure A. Limitation of Rights. The City intends that this Section 24 constitutes the City’s undertaking to provide the information and notices described by 17 CFR § 240.15c2-12(b)(5) with respect solely to the Bonds (the “Undertaking”). Notwithstanding any other provision of this Resolution to the contrary, neither the registered owner or holder of Bonds of any series other than the Bonds, nor any trustee acting on their behalf, shall be entitled to any right or to exercise any remedy provided to the Holders under this Undertaking based upon the City’s failure to observe, or refusal to comply with, the covenants contained in this Undertaking. ---PAGE BREAK--- 20 B. Definitions for Purposes of this Undertaking. Solely for the purposes of this Undertaking, the following terms shall have the following meanings unless the context otherwise requires: “Annual Financial Information” shall mean on or before 270 days after the end of each fiscal year of the City, commencing with the fiscal year ending June 30, 2010, the following financial information and operating data with respect to the City (the “Disclosure Information”): the audited financial statements of the City for such fiscal year, accompanied by the audit report and opinion of the accountant or government auditor relating thereto, as permitted or required by the laws of the State, containing balance sheets as of the end of such fiscal year and a statement of operations, changes in fund balances and cash flows for the fiscal year then ended, showing in comparative form such figures for the preceding fiscal year of the City, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under Montana law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with such generally accepted accounting principles for reasons beyond the reasonable control of the City, noting the discrepancies thereof and the effect thereof, and certified as to accuracy and completeness in all material respects by the Finance Director/Treasurer of the City; and to the extent not included in the financial statements referred to in paragraph hereof, the information for such fiscal year or for the period most recently available for the type identified below, which information may be unaudited, but shall be certified as to accuracy and completeness in all material respects by the Finance Director/Treasurer of the City to the best of his knowledge, which certification may be used on the reliability of information obtained from governmental or other third-party sources. Contents of the City’s Annual Report shall contain all of the information and data contained in those sections of the Official Statement entitled “City Property Value,” “city Indebtedness” and “City Tax Rates, Levies and Collections.” Notwithstanding the foregoing paragraph if the audited financial statements from which such information are to be taken are not available by the date specified, the City shall provide on or before such date information from unaudited financial statements in the format required for the audited financial statements in the format required for the audited financial statements as part of the Disclosure Information and within 10 days after the receipt thereof, the City shall provide information from the audited financial statements. Any or all of the Disclosure Information may be incorporated by reference, if it is updated as required herein, from other documents, including official statements, which have been submitted to EMMA. If the document incorporated by reference is a final official statement, it must also be available from the MSRB. The City shall clearly identify in the Disclosure Information each document incorporated by reference. If any part of the Disclosure Information can no longer be generated because the operations of the City have materially changed or been discontinued, such Disclosure ---PAGE BREAK--- 21 Information may no longer be provided by the City and shall include a statement to such effect in the Disclosure Information; provided, however, if such operations have been replaced by other City operations with respect to such data which is not included in the Disclosure Information and the City determines certain specified data regarding such replacement operations would be a material fact, then, from and after such determination, the Disclosure Information shall include such additional specified data regarding the replacement operations. “Audited Financial Statements” shall mean the City’s duly audited financial statements. “EMMA” shall mean the MSRB’s Electronic Municipal Market Access system, which shall receive all required filings under Rule 15c2-12 at http://emma.mrsb.org. “Holder” shall mean any Registered Owner of a Bond and any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares: voting power which includes the power to vote, or to direct the voting of, a Bond; and/or investment power which includes the power to dispose, or direct the disposition of, a Bond. “MSRB” shall mean the Municipal Securities Rulemaking Board or any successor in functions thereto. “Official Statement” shall mean the City’s final official statement relating to the Bonds, together with any amendments thereto. “Required Filings” shall mean any filing made pursuant to subsections C, D, E and F of this Section 24. “Rule 15c2-12” shall mean Rule 15c2-12 of the SEC, as amended. “SEC” shall mean the Securities and Exchange Commission or any successor in functions thereto. C. Annual Financial Information. The City will provide to EMMA within nine months after the end of each fiscal year, commencing on or before March 31, 2011, Annual Financial Information and Audited Financial Statements for the City. Presently, the City’s fiscal year commences on July 1. All or any portion of the Annual Financial Information may be incorporated in the Annual Financial Information by cross reference to any other documents which have been filed with the SEC. Annual Financial Information for any fiscal year containing any modified operating data or financial information for such fiscal year shall explain, in narrative form, the reasons for such modification and the effect of such modification on the Annual Financial Information being provided for such fiscal year. If a change in accounting principles is included in any such modification, the initial Annual Financial Information after such modification shall present a comparison between the financial statements or information prepared on the basis of the modified accounting principles and those prepared on the basis of the former accounting principles. The City will provide notice of the modification of operating data or financial information or change in accounting principles to EMMA. ---PAGE BREAK--- 22 D. Audited Financial Statements. To the extent the City’s Audited Financial Statements are not submitted as part of the Annual Financial Information under subsection C of this Section 24, the City will provide to EMMA the Audited Financial Statements of the City (commencing with the audited financial statements for the fiscal year ending June 30, 2010), when and if such Audited Financial Statements are available. Although the City may submit a comprehensive annual financial report (a “CAFR”) together with such Audited Financial Statements (which, at a minimum, will include the Annual Financial Information), there is no requirement to do so hereunder, and the dissemination of a CAFR in any year shall not be construed as a requirement to disseminate a CAFR in any subsequent year. E. Material Event Notices. The City will provide to EMMA in a timely manner, notice of any of the following events with respect to the Bonds, if material: principal and interest payment delinquencies; non-payment related defaults; unscheduled draws on debt service reserves reflecting financial difficulties; unscheduled draws on credit enhancements reflecting financial difficulties; substitution of credit or liquidity providers, or their failure to perform; adverse tax opinions or events affecting the tax-exempt status of the security; modifications to rights of security holders; bond calls (except for scheduled mandatory sinking fund redemptions); defeasances; (10) release, substitution or sale of property securing repayment of the Bonds; and (11) rating changes. F. Notice of Late Filing. The City will provide to EMMA in a timely manner, notice of a failure of the City to provide the required Annual Financial Information on or before the date specified in subsection C of this Section 24. G. Term of this Undertaking. The term of this Undertaking shall commence on the date of closing and initial delivery of the Bonds to the Registered Owners, and shall terminate when the Bonds shall have been paid in full or defeased in accordance with this Resolution. The City shall provide notice of such defeasance to EMMA; provided, such notice shall not be a condition to such defeasance. H. Amendments. Notwithstanding any provision of this Resolution to the contrary, the City may amend this Undertaking in conformity with Rule 15c2-12, as interpreted from time to time by the courts of competent jurisdiction, the SEC, or the SEC staff. Upon the adoption of any amendment to the Rule, this Undertaking shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations of the City and all Holders under this Undertaking shall thereafter be determined, exercised and enforced thereunder, subject in all respects to such modification and amendments, and all terms and conditions of any such amendment shall be deemed to be part of the terms and conditions of this Undertaking for any and all purposes. If the consent of Holders is necessary for such amendment, only the Holders of the Bonds shall be considered for purposes of determining whether such consent has been rendered. I. Additional Information. Nothing in this Undertaking shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Undertaking or any other means of communication, or including any other information in any Required Filing, in addition to that which is required by this Undertaking. If the City chooses to include any information in any Required Filing in addition to that which is specifically required ---PAGE BREAK--- 23 by this Undertaking, the City shall have no obligation under this Undertaking to update such information or include it in any future Required Filing. J. Defaults of this Undertaking. If the City shall fail to comply with any provision of this Undertaking, then any Holder may enforce, for the equal benefit and protection of all Holders similarly situated, by mandamus or other suit or proceeding at law or in equity, such provision against the City and any of the officers, agents and employees of the City, and may compel the City or any such officers, agents or employees to perform and carry out their duties under this Undertaking; provided, that the sole and exclusive remedy for breach of this Undertaking shall be an action to compel specific performance of the obligations of the City hereunder and no person or entity shall be entitled to recover monetary damages hereunder under any circumstances. K. Rescission Rights. The City hereby reserves the right to rescind this Undertaking without the consent of the Holders in the event Rule 15c2-12 is repealed by the SEC or is ruled to be invalid by a federal court and the time to appeal from such decision has expired. In the event of a partial repeal or invalidation of Rule 15c2-12, the City hereby reserves the right to rescind those provisions of this Undertaking that were required by those parts of Rule 15c2-12 that are so repealed or invalidated. L. Miscellaneous. The City hereby reserves the right to comply with this Section 24 by meeting its annual disclosure requirements through any system approved by the SEC. All Required Filings shall be made in an electronic format as prescribed by the MSRB. Section 25: Bonds Designated “Qualified Tax-Exempt Obligations” The City hereby designates the Bonds as “qualified tax-exempt obligations” pursuant to and as defined in Section 265(b) of the Code. The City covenants that it shall not designate more than $30,000,000 of tax-exempt obligations during the calendar year 2010. The City does not reasonably anticipate that it will issue in the aggregate more than $30,000,000 principal amount of tax-exempt obligations during the calendar year 2010. In applying this $30,000,000 limitation, the City has taken into account: tax-exempt obligations that it has issued and anticipates issuing; tax-exempt obligations that any “subordinate entity” has issued or anticipates issuing; tax-exempt obligations that any entity that issues obligations on behalf of the City has issued or anticipates issuing; and tax-exempt obligations that an entity formed to avoid this $30,000,000 limitation has issued or anticipates issuing. However, in applying this $30,000,000 limitation, the City has not taken into account any private activity bond (other than qualified 501(c)(3) bonds) or any obligation issued to refund (other than in an advance refunding) another obligation to the extent that the amount of the refunding obligation does not exceed the amount of the refunded obligation. Section 26: Ratification of Preliminary Official Statement The City hereby ratifies all acts undertaken by its officers, employees and agents with respect to the preparation and distribution of the preliminary official statement with respect to the Bonds, including any action taken to deem such preliminary official statement final as of its date except for the omission of information dependent upon the pricing of the issue and the completion of the underwriting agreement, such as offering prices, interest rates, selling ---PAGE BREAK--- 24 compensation, aggregate principal amount, principal amount per maturity, delivery dates and other terms of the Bonds dependent on the foregoing matters. The City agrees to cooperate with the Underwriter to deliver or cause to be delivered, within seven business days from the date hereof and in sufficient time to accompany any confirmation that requests payment from any customer of the Underwriter, copies of a final official statement in sufficient quantity to comply with paragraph of Securities and Exchange Commission Rule 15c2-12 and the rules of the Municipal Securities Rulemaking Board. Section 27: Ratification All actions not inconsistent with the provisions of this Resolution heretofore taken by the City and its employees with respect to the issuance, sale and delivery of the Bonds, are hereby in all respects ratified, approved and confirmed. Section 28: Contract; Severability The covenants contained in this Resolution and in the Bonds shall constitute a contract between the City and the holder of each and every Bond. All the covenants, promises and agreements in this Resolution contained by or on behalf of the City, or by or on behalf of the Registrar, shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not. If any one or more of the covenants or agreements provided in this Resolution to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenants or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements in this Resolution and shall in no way affect the validity of the other provisions of this Resolution or of any Bonds. Section 29: Repealer All Resolutions or resolutions or parts thereof in conflict herewith are, to the extent of such conflict, hereby repealed, and shall have no further force or effect. Section 30: No Personal Recourse No recourse shall be had for any claim based on this Resolution or the Bonds against any Council member or the City, nor any officer or employee, past, present or future, of the City or of any successor body as such, either directly or through the City or any such successor body, under any constitutional provision, statute or rule of law or by the enforcement of any assessment or penalty or otherwise. ---PAGE BREAK--- 25 Section 31: Effective Date This Resolution shall be in full force and effect from and after its date of adoption. PASSED AND ADOPTED by the Council of the City of Missoula, Missoula County, Montana, at a regular meeting thereof, held this 26th day of April, 2010. CITY OF MISSOULA Missoula County, Montana John Engen, Mayor ATTEST: Martha L. Rehbein, City Clerk (S E A L) ---PAGE BREAK--- 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: “AUTHORIZING THE SALE, ISSUANCE AND DELIVERY OF NOT TO EXCEED $1,200,000 OF THE CITY’S LIMITED TAX GENERAL FUND OBLIGATION REFUNDING BONDS, SERIES 2010A; TO PROVIDE MONEY TO REFUND A PORTION OF THE CITY’S OUTSTANDING GENERAL FUND OBLIGATION BONDS, SERIES 2001A; PROVIDING FOR THE DESIGNATION, DATE, TERMS, MATURITIES, FORM, PAYMENT AND REDEMPTION PROVISIONS OF THE BONDS; DESIGNATING A FISCAL AGENT; PLEDGING THE CITY’S GENERAL CREDIT FOR THE PAYMENT OF THE BONDS; CREATING AND ADOPTING CERTAIN FUNDS AND ACCOUNTS AND PROVIDING FOR DEPOSITS THEREIN; COVENANTING TO COMPLY WITH CERTAIN FEDERAL TAX AND SECURITIES LAWS; DESIGNATING THE BONDS AS QUALIFIED TAX-EXEMPT OBLIGATIONS AUTHORIZING THE MAYOR AND THE FINANCE DIRECTOR/TREASURER TO EXECUTE A BOND PURCHASE CONTRACT; RATIFYING CERTAIN ACTIONS IN CONNECTION WITH THE PRELIMINARY OFFICIAL STATEMENT; AND PROVIDING FOR OTHER MATTERS PROPERLY RELATING THERETO” (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 April 26, 2010, 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 such meeting, the Resolution was adopted by the following vote: AYES, and in favor thereof: NAYS: ABSENT: ABSTAIN: WITNESS my hand officially this 26th day of April, 2010. Martha L. Rehbein, City Clerk (S E A L) ---PAGE BREAK--- Exhibit Page 1 EXHIBIT [Face of Bond] UNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF MISSOULA CITY OF MISSOULA LIMITED TAX GENERAL FUND OBLIGATION REFUNDING BOND, SERIES 2010A The Bonds of this series have been designated “Qualified Tax-Exempt Obligations.” Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation to the Registrar for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co., or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co., or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the Registered Owner hereof, Cede & Co., has an interest herein Numbe Dollars See Reverse Side For Additional Provisions INTEREST RATE: MATURITY DATE: CUSIP NO.: The CITY OF MISSOULA, Missoula County, Montana (the “City”), a municipality duly organized and existing under and by virtue of the Constitution and laws of the State of Montana (the “State”) now in force, acknowledges itself to owe and, for value received, promises to pay from the “City of Missoula, Montana, Limited Tax General Fund Obligation Refunding Bonds, Series 2010A Debt Service Account” (the “Debt Service Account”), created by Resolution No. adopted by the City Council of the City (the “Council”) on April 26, 2010 (the “Resolution”), to CEDE & CO. or registered assigns, on the Maturity Date set forth above, the principal sum of AND NO/100 DOLLARS and to pay interest thereon from the Debt Service Account from 1, 2010, or from the most recent date to which interest has been paid or duly provided for, whichever is later, at the Interest Rate per annum set forth above, payable commencing on July 1, 2010, and semiannually thereafter on each January 1 and July 1, to the Maturity Date set forth above. Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. Any capitalized term used in this Bond and not otherwise defined herein shall have the same meaning as in the Resolution. The principal of and interest on this Bond are payable in lawful money of the United ---PAGE BREAK--- Exhibit Page 2 States of America to the Registered Owner hereof, whose name and address shall appear on the registration books of the City (the “Bond Register”) maintained by U.S. Bank National Association, Seattle, Washington (the “Registrar”). Interest shall be paid to the Registered Owner whose name appears on the Bond Register at the close of business on the fifteenth day of the calendar month preceding the interest payment date, and shall be paid by check or draft of the Registrar mailed to such Registered Owner on the due date at the address appearing on the Bond Register, or at such other address as may be furnished in writing by such Registered Owner to the Registrar. Reference is hereby made to the Additional Provisions of this Bond set forth on page 2 hereof, and such Additional Provisions shall for all purposes have the same effect as if set forth in this space. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon is manually signed by the Registrar. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that this Bond and the series of which it is one, are issued pursuant to and in strict compliance with the Constitution and the laws of the State now in force and the resolutions and ordinances of the City, specifically the Resolution; and that all acts, conditions and things required to be done precedent to and in the issuance of this Bond have happened, been done and been performed. IN WITNESS WHEREOF, the City of Missoula, Missoula County, Montana, has caused this Bond to be executed by the manual signature of its Mayor, by the manual or facsimile signature of the City Clerk and by the manual or facsimile signature of the Treasurer, and impressed with its seal on 2010. CITY OF MISSOULA Missoula County, Montana [manual signature] Mayor ATTEST: [manual signature] City Clerk [ S E A L ] [manual signature] Treasurer ---PAGE BREAK--- Exhibit Page 3 CERTIFICATE OF AUTHENTICATION Date of Authentication: This Bond is one of the City of Missoula, Montana, Limited Tax General Fund Obligation Refunding Bonds, Series 2010A, dated 2010, and described in the within- mentioned Resolution. U.S. BANK NATIONAL ASSOCIATION, as Registrar Authorized Officer _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ [Reverse Side of Bond] ADDITIONAL PROVISIONS This Bond is one of a duly authorized series of Bonds of like date, tenor, redemption provisions and effect, except for variations required to state denominations, numbers, interest rates, and dates of maturity, aggregating the principal amount of The Bonds are issued as serial Bonds, are issued in fully registered form in denominations of $5,000 or any integral multiple thereof within a single maturity, mature on July 1 of the years 2012 through 2020, inclusive. Capitalized terms used in this Bond shall have the meanings given to them in the Resolution. The Bonds are issued by the City pursuant to and in full compliance with the Constitution and the laws of the State now in force, particularly Montana Code Annotated, 7-7-4301 through 7-7-4316, inclusive, and Section 17-5-2102, and proceedings duly adopted and authorized by the Council, more particularly the Resolution, for the purpose of providing money necessary to accomplish the Refunding Plan and to pay the costs of issuance of the Bonds, all as more particularly described in the Resolution. The Bonds are general obligations of the City, but are not secured by a pledge of the taxing power of the City. The general credit (but not the taxing power) of the City shall be and is hereby irrevocably pledged to the prompt and full payment of the principal of and interest on the Bonds when due. The principal of and interest on the Bonds are payable from any funds of the City legally for the payment thereof, including funds on hand in the General Fund. If on any date the payment of principal of or interest on the Bonds is due and the amount on hand in the Debt Service Account is insufficient for the payment thereof, the Council shall appropriate to the Debt Service Account sufficient legally available money of the City to pay such deficiency. ---PAGE BREAK--- Exhibit Page 4 As security for the Bonds, the City hereby covenants and agrees to appropriate each fiscal year during the term of the Bonds from the General Fund an amount sufficient for the payment of the principal of and interest on the Bonds due in such fiscal year. Such funds shall be credited to the Debt Service Account. It is acknowledged and agreed that the City has not granted a lien on any revenues in the General Fund or otherwise provided for the segregation of such revenues as security for the payment of the Bonds, and that any ad valorem taxes the City may in its discretion levy to pay principal of and interest on the Bonds are subject to applicable limits now or hereafter imposed by law on the amount of taxes levied by the City. The Bonds maturing in the years 2010 through inclusive, are not subject to redemption prior to their stated dates of maturity. Bonds maturing on or after July 1, prior to their stated dates of maturity, in whole at any time, or in part on any interest payment date (maturities to be selected by the City and by lot within a maturity in such manner as the Registrar shall determine), on or after July 1, at the price of par plus accrued interest to the date of redemption. Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of money issued for such purpose shall bear the CUSIP number, if any, identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. In accordance with the preceding paragraph, portions of the principal amount of any Bond, in installments of $5,000 or any integral multiple of $5,000, may also be redeemed. If less than all the principal amount of any Bond is redeemed, upon surrender of such Bond at the principal corporate trust office of the Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal amount thereof, a new Bond or Bonds, at the option of the Registered Owner, with like maturity and interest rate, in any denomination authorized by this Resolution. Unless waived by the Registered Owner of any Bond to be redeemed, notice of any such redemption shall be sent by the Registrar by first-class mail, postage prepaid, not less than 30 nor more than 60 days prior to the date fixed for redemption to the Registered Owner of each Bond to be redeemed at the address shown on the Bond Register, or at such other address as may be furnished in writing by such Registered Owner to the Registrar. The requirements of this paragraph shall be deemed to be complied with when notice is mailed as herein provided, regardless of whether it is actually received by the Registered Owner of any Bond to be redeemed. The City has reserved the right in the Resolution to purchase the Bonds on the open market at any time and at any price. Any such Bonds so purchased shall be canceled. This Bond is transferable or exchangeable by the Registered Owner hereof in person or by his attorney duly authorized in writing upon presentation and surrender of this Bond at the designated corporate trust office of the Registrar. Upon such transfer or exchange, a new Bond of an authorized denomination, of the same maturity and interest rate, and for the same aggregate principal amount will be issued to the transferee or exchangee, in exchange therefor. The City and the Registrar may deem and treat the Registered Owner hereof as the absolute owner hereof for the purpose of receiving payments of principal hereof and interest due ---PAGE BREAK--- Exhibit Page 5 hereon and for all other purposes, and neither the City nor the Registrar shall be affected by any notice to the contrary. The covenants contained herein and in the Resolution, as such pertain to this Bond, may be discharged by making provision, at any time, for the payment of the principal of and interest on this Bond in the manner provided in the Resolution. BOND COUNSEL OPINION It is hereby certified that the following is a true and complete copy of the bond counsel opinion of Koegen Edwards LLP, Spokane, Washington, on file in my office, which opinion is dated the date of delivery of and payment for the Bonds described therein, an original of which was delivered to me on such date, and is a part of the permanent records of the City. CITY OF MISSOULA Missoula County, Montana [manual signature] City Clerk [Insert Koegen Edwards LLP Bond Counsel Opinion] ---PAGE BREAK--- Exhibit Page 6 The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM as tenants UNIF TRFS MIN ACT . . . . . . . . . . . . . . . . . . . in common (Cust) (Minor) TEN ENT as tenants by the entireties under Uniform Transfer to Minors Act . . . . . . . . . . JT TEN as joint tenants (State) with right of Survivorship and not as tenants in common Additional abbreviations may also be used although not in the above list. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto: Name of Transferee: Address: Tax Identification No. the within Bond and hereby irrevocably constitutes and appoints to transfer such Bond on the books kept for registration thereof with full power of substitution in the premises. Registered Owner NOTE: The signature on this Assignment must correspond with the name of the Registered Owner as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever. Dated: SIGNATURE GUARANTEED: Bank, Trust Company or Member Firm of the New York Stock Exchange Authorized Officer ---PAGE BREAK--- Exhibit Page 1 EXHIBIT CITY OF MISSOULA Missoula County, Montana LIMITED TAX GENERAL FUND OBLIGATION REFUNDING BONDS, SERIES 2010A PRINCIPAL AMOUNT OF ESCROW AGREEMENT This ESCROW AGREEMENT is made and entered into on 1, 2010, by and between the City of Missoula, Missoula County, Montana (the “City”), a municipal corporation created under the Constitution and laws of the State of Montana (the “State”), and U.S. Bank National Association, of Seattle, Washington (the “Refunding Trustee”), with respect to the redemption of certain bonds, as provided for in Resolution Number of the City, adopted on April 26, 2010 (the “Resolution”). Unless otherwise defined in this Escrow Agreement, all capitalized terms shall have the meanings set forth in Section 1 of the Resolution. W I T N E S S E T H WHEREAS, the City Council of the City (the “Council”) authorized this Escrow Agreement to be executed pursuant to Section 11 of the Resolution; WHEREAS, pursuant to Resolution No. 6386, adopted by the Council on December 18, 2001, the City issued bonds designated “City of Missoula General Fund Obligation Bonds, Series 2001A” (the “2001A Bonds”), to provide funds for the financing of costs of acquiring land and a building in the City at 1301 Scott Street and constructing real and personal property improvements thereon to be used as the City’s street maintenance and storage facility and to pay the costs of issuance of the 2001A Bonds; WHEREAS, Resolution No. 6346 reserved the right for the City to redeem the 2001A Bonds maturing on July 1 in the years 2012 through 2020, inclusive, in whole or in part at any time on and after July 1, 2011, at the price of 100 percent of the principal to be redeemed, together with accrued interest to the date of redemption; WHEREAS, pursuant to the Resolution, the Council determined to pay, redeem and retire $955,000 principal amount of the 2001A Bonds, maturing on July 1 in the years 2012 through 2020, inclusive (the “Refunded Bonds”), by the sale, issuance and delivery of principal amount of its Limited Tax General Fund Obligation Refunding Bonds, Series 2010A (the “Bonds”); and NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto covenant, agree and bind themselves as follows: ---PAGE BREAK--- Exhibit Page 2 Section 1. Acceptance of Refunding Trustee Duties. U.S. Bank National Association, of Seattle, Washington, hereby accepts its appointment by the City as the Refunding Trustee with respect to the Refunded Bonds. Section 2. City Representations. The City represents to the Refunding Trustee that: the City is a municipal corporation duly organized and existing under and by virtue of the Constitution and laws of the State; and the City is authorized to enter into this Escrow Agreement. Section 3. Refunding Trustee Representations. The Refunding Trustee represents to the City that: the Refunding Trustee is a trust company or state or national bank having the powers of a trust company within or without the State; and the Refunding Trustee is authorized to enter into this Escrow Agreement. Section 4. The Escrow Account. The Refunding Trustee hereby agrees to establish, hold, invest and otherwise administer the Escrow Account in the manner provided by Section 12 of the Resolution. In the furtherance of the foregoing, the Refunding Trustee will, on behalf of the City, use the Bond proceeds and other money, if any, deposited with the Refunding Trustee to purchase Government Obligations in the amounts, of the type, bearing interest and maturing as set forth in the following schedule: Type of Obligation Par Amount Interest Rate Delivery Date Maturity Date United States Treasury Securities – State and Local Government Series Certificate $ % 0_/__/2010 07/01/2010 United States Treasury Securities – State and Local Government Series Certificate 0_/__/2010 01/01/2011 United States Treasury Securities – State and Local Government Series Certificate 0_/__/2010 07/01/2011 Section 5. Receipt of Certain Money. Execution of this Escrow Agreement by the Refunding Trustee shall constitute written acknowledgment by the Refunding Trustee of its receipt from the City of of which will be invested in Government Obligations, of which will be held as an initial cash balance and the balance of will be used to pay costs of issuance of the Bonds. Section 6. Sufficiency of Government Obligations. Based on the escrow verification report of the City represents that the Government Obligations and the maturing principal thereof and the interest thereon, if paid when due, together with a beginning cash balance of will be sufficient to make the payments described in Section 7 hereof. Section 7. Payments on the Refunded Bonds. The Refunding Trustee will use money from the Escrow Account in the amounts, and at the times, necessary to enable it to make the payments described in the following schedule: ---PAGE BREAK--- Exhibit Page 3 The Bonds Payment Date Principal Interest Total 07/01/2010 $ $ 01/01/2011 07/01/2011 $ The Refunded Bonds Payment Date Principal Interest Total 07/01/2011* $955,000 $ $ * Redemption Date. Section 8. The Government Obligations. The Refunding Trustee will purchase the Government Obligations described in Section 4 above, on behalf of the City, from the Bond proceeds and other money, if any, deposited with the Refunding Trustee on the date the Bonds are issued. The Refunding Trustee will use such Government Obligations, and the earnings thereon, for the sole purpose of making the payments described in Section 7 hereof (the “Refunding Plan”). The Refunding Trustee will not allow any Government Obligations to be liquidated prior to maturity without: the City’s written consent; receiving a supplemental verification addressed to the City and the Refunding Trustee of an independent firm of certified public accountants, which shall be satisfactory to nationally recognized bond counsel, that the money and Government Obligations on deposit after such liquidation will be sufficient to effect the refunding of the Refunded Bonds; and receiving the written opinion of nationally recognized bond counsel that such redemption would not cause the interest on the Refunded Bonds or the Bonds to become includible in gross income for federal income tax purposes. Section 9. Safekeeping of Money and Investments. All Government Obligations, money and investment income deposited with or received by the Refunding Trustee pursuant to this Escrow Agreement shall be subject to the trust created by this Escrow Agreement, and the Refunding Trustee shall be liable for the safekeeping thereof. All money deposited with the Refunding Trustee or received by the Refunding Trustee as maturing principal or interest on the Government Obligations prior to the times the Refunding Trustee is required to make the payments described in Section 7 of this Escrow Agreement shall be held uninvested, in cash, by the Refunding Trustee. Section 10. Substitution of the Government Obligations. The Refunding Trustee acknowledges the City’s right to substitute Government Obligations for investments in the Escrow Account. The Refunding Trustee will cooperate with the City in making any such substitution, so long as such substitution is made in accordance with Section 13 of the Resolution. Section 11. Transfer of Surplus Money Prior to Full Redemption. The Refunding Trustee will transfer to the City any money remaining on deposit in the Escrow Account prior to the accomplishment of the Refunding Plan if the City furnishes to the Refunding Trustee: a supplemental verification addressed to the City and the Refunding Trustee of an independent firm of certified public accountants, which shall be satisfactory to nationally recognized bond counsel, that the money and Government Obligations on deposit after such transfer will be ---PAGE BREAK--- Exhibit Page 4 sufficient to effect the Refunding Plan; and an opinion addressed to the City and to the Refunding Trustee from nationally recognized bond counsel that such transfer will not cause the interest on the Refunded Bonds or the Bonds to become includible in gross income for federal income tax purposes. Section 12. Transfer of Surplus Money After Full Redemption. The Refunding Trustee will transfer to the City any money remaining on deposit in the Escrow Account after the accomplishment of the Refunding Plan. Section 13. Notices of Defeasance and Redemption. The Refunding Trustee will cause notice of the defeasance of the Refunded Bonds to be given, substantially in the form set forth in Attachment I hereto, not later than 30 days after the Bonds are delivered to the Purchaser by the City. The notice of defeasance shall be given to all nationally recognized municipal securities information repositories (within the meaning of Rule 15c2-12 of the Securities and Exchange Commission). The Refunding Trustee will give notice, or cause notice to be given, at the expense of the City, of the redemption of the Refunded Bonds in the form and manner required by the City’s Resolution No. 6386. Such notice of redemption shall be substantially in the form set forth in Attachment II hereto, and shall be given not less than 30 nor more than 60 days prior to the redemption date. Section 14. Limitation of Refunding Trustee’s Duties. The duties and obligations of the Refunding Trustee shall be prescribed by the provisions of this Escrow Agreement and Sections 10 through 14 of the Resolution, and the Refunding Trustee shall not be liable except for the performance of its duties and obligations as specifically set forth herein or therein and the duty to act in good faith in the performance thereof and no implied duties or obligations shall be incurred by such Refunding Trustee other than those specified herein and therein. Nothing contained herein shall require the Refunding Trustee to advance its own money or otherwise to incur any financial liability to carry out its obligations hereunder. The Refunding Trustee shall not be responsible or liable for the sufficiency, correctness, genuineness or validity of the Government Obligations; the performance or compliance by any party other than the Refunding Trustee with the terms or conditions of any such instruments; or any loss which may occur by reason of forgeries, false representations or the exercise of the Refunding Trustee’s discretion in any particular manner, unless such exercise is negligent or constitutes willful misconduct. Section 15. Interpleader. If any controversy arises between the City and any third person, the Refunding Trustee shall not be required to determine the same or to take any action in the premises, but it may institute, in its discretion, an interpleader or other proceedings in connection therewith as it may deem proper, and in following either course, it shall not be liable. Section 16. Reporting Requirements. For as long as any of the Refunded Bonds are outstanding, the Refunding Trustee shall render a statement as of the last day of the preceding month to the City’s Treasurer setting forth: the Government Obligations which have matured and the amounts received by the Refunding Trustee by reason of such maturity; the amounts paid pursuant to Section 7 of this Escrow Agreement and the dates of such payments, for payments on the Refunded Bonds; and any other transactions of the Refunding Trustee pertaining to its duties and obligations as set forth herein. ---PAGE BREAK--- Exhibit Page 5 Section 17. Compensation of the Refunding Trustee. The Refunding Trustee hereby acknowledges receipt of the sum of for services rendered and to be rendered by it pursuant to the provisions of this Escrow Agreement in payment of all fees, compensation and expenses of the Refunding Trustee. The Refunding Trustee hereby agrees that such compensation has been made to the satisfaction of the Refunding Trustee. Such amount does not take into consideration any extraordinary fees and expenses of the Refunding Trustee. The Refunding Trustee represents that it has incurred no extraordinary fees and expenses pertaining to this Escrow Agreement. The Refunding Trustee shall comply with the requirements of the following paragraph before incurring any extraordinary fees and costs to be billed to the City. The Refunding Trustee acknowledges that it is not entitled to a lien on any Government Obligations or other obligations or money of the City held by it pursuant to this Escrow Agreement or any other agreement. The Refunding Trustee shall provide the City with a good faith estimate of its fees and costs if and when it is requested by the City to: render any service that is not provided for in this Escrow Agreement; amend this Escrow Agreement; or substitute securities under this Escrow Agreement. The City will pay the Refunding Trustee reasonable compensation for such unanticipated services, provided the City is first provided with such estimate and approves thereof in writing. Section 18. Amendments to this Escrow Agreement. The Refunding Trustee and the City recognize that the owners of the Bonds and the Refunded Bonds have a beneficial interest in the money and the Government Obligations to be held in trust by the Refunding Trustee pursuant to this Escrow Agreement. Therefore, this Escrow Agreement shall be subject to amendment only in writing executed by the City and the Refunding Trustee for the purposes of: clarifying an ambiguity in the duties and obligations set forth hereunder; or altering the reporting or other ministerial obligations of the Refunding Trustee to the City. The parties will not amend this Escrow Agreement in such a manner as to permit the Refunding Trustee to invest in or deposit in the Escrow Account any obligations other than noncallable, nonprepayable obligations of, or obligations unconditionally guaranteed by, the United States of America. Each amendment to this Escrow Agreement shall be accompanied by an opinion addressed to the City and to the Refunding Trustee from nationally recognized bond counsel that such amendment will not cause the interest on the Refunded Bonds or the Bonds to become includible in gross income for federal income tax purposes. In addition, if such amendment results in any change of the maturities, interest earnings or redemption features of the Government Obligations, then such amendment shall also be accompanied by a supplemental verification addressed to the City and to the Refunding Trustee from an independent firm of certified public accountants, which shall be satisfactory to nationally recognized bond counsel, that the money and Government Obligations on deposit after the amendment will be sufficient to effect the Refunding Plan. Section 19. Notification of Deficiency. The Refunding Trustee will give the City prompt notice if the Refunding Trustee shall determine there are or will be insufficient money or Government Obligations to make the payments specified in Section 7 of this Escrow Agreement, and the City shall deposit with the Refunding Trustee additional sums of money required to correct such deficiencies. This Section 19 is not intended to create an obligation on the part of the Refunding Trustee to calculate or in any way verify the sufficiency or projected future sufficiency of the maturing principal of and interest on the Government Obligations and ---PAGE BREAK--- Exhibit Page 6 other money held by the Refunding Trustee pursuant to this Escrow Agreement to pay the debt service on the Bonds and the Refunding Bonds. Section 20. Successor Refunding Trustee. The Refunding Trustee shall, upon receiving a written request from the City, or may, upon providing 30 days prior written notice to the City, be removed as Refunding Trustee hereunder; provided, the Refunding Trustee will not relinquish its duties hereunder until a qualified successor accepts its appointment. The City shall appoint a successor Refunding Trustee upon the removal of the Refunding Trustee; provided, the Refunding Trustee may petition a court of competent jurisdiction for the appointment of a successor Refunding Trustee if the successor Refunding Trustee appointed by the City does not accept its appointment within 45 days after the giving of notice described in the preceding sentence. Any successor Refunding Trustee shall assume all the obligations of the Refunding Trustee under this Escrow Agreement. All the Government Obligations and money then held by the Refunding Trustee pursuant to this Escrow Agreement shall thereafter be transferred to such successor. Any corporation or association into which the Refunding Trustee may be merged or with which it may be consolidated, or any corporation or association resulting from any merger, consolidation or reorganization to which the Refunding Trustee may be a party, or any corporation or association to which the Refunding Trustee may sell or transfer all or substantially all of its corporate trust business, shall be the successor to the Refunding Trustee without the execution or filing of any paper or any further act on the part of the City or the Refunding Trustee. Section 21. Receipt of Statements. The Refunding Trustee hereby acknowledges receipt from the City of statements setting forth the interest payment schedules and maturity schedules of the Refunded Bonds by number, amount, date of maturity and interest rates, the amount of interest to be paid on each semiannual interest payment date of such Refunded Bonds, if any, and the amount of the principal to be paid on the date that the Refunded Bonds are to be redeemed. Section 22. Holidays. If the date for making any payment or the last date for performance of any act or the exercising of any right or duty, as provided in this Escrow Agreement, shall be a legal holiday, a day on which banking institutions in Seattle, Washington, and New York, New York, are authorized by law to remain closed, or a day on which the New York Stock Exchange is closed, such payment may be made, such act performed, or such right exercised on the next succeeding day, with the same force and effect as if done on the nominal date provided in this Escrow Agreement. Section 23. Term. The term of this Escrow Agreement shall commence on the date the Bonds are delivered to the Purchaser and shall expire on the later of: the date the final payment is made pursuant to Section 7 hereof; the date any surplus money remaining in the Escrow Account is transferred to the City pursuant to Section 12 hereof; and the date the final statement required by Section 16 hereof is received by the City. Notwithstanding the expiration of this Escrow Agreement, the Refunding Trustee shall not be relieved of any liability for a breach of this Escrow Agreement occurring during the term hereof. ---PAGE BREAK--- Exhibit Page 7 Section 24. Writings Required. Any notice, authorization, request or demand required or permitted to be given in accordance with the terms of this Escrow Agreement shall be in writing. Section 25. Governing Law. This Escrow Agreement shall be governed by and construed in accordance with the laws of the State, without regard to conflict of law principles. Section 26. Severability. In the event any one or more of the provisions contained in this Escrow Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Escrow Agreement, and this Escrow Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. If any portion of this Escrow Agreement is amended, severed or revoked, the City agrees to notify any rating agency with a current rating on the Bonds prior to such action. Section 27. Counterparts. This Escrow Agreement may be executed in several counterparts, each of which shall be regarded as the original and all of which shall constitute one and the same Escrow Agreement. CITY OF MISSOULA Missoula County, Montana John Engen, Mayor ATTEST: Martha L. Rehbein, City Clerk (S E A L) U.S. BANK NATIONAL ASSOCIATION Seattle, Washington, as Refunding Trustee Sherrie L. Pantle, Vice President ---PAGE BREAK--- Attachment “II” Page 1 ATTACHMENT NOTICE OF DEFEASANCE CITY OF MISSOULA Missoula County, Montana GENERAL FUND OBLIGATION BONDS, SERIES 2001A NOTICE IS HEREBY GIVEN that pursuant to the provisions of Section 2.06 of Resolution No. 6386, adopted on December 18, 2000, by the City Council of the City of Missoula, Montana (the “City”), the City has defeased its outstanding General Fund Obligation Bonds, Series 2001A (the “2001A Bonds”), as set forth below, by depositing certain Government Obligations in an escrow account held by U.S. Bank National Association, of Seattle, Washington, as Refunding Trustee. Maturity Date Principal Amount Interest Rate CUSIP Nos. 07/01/2012 $ 85,000 4.85% 07/01/2013 90,000 4.90 07/01/2014 95,000 4.95 07/10/2015 100,000 5.00 07/01/2016 105,000 5.05 07/01/2017 110,000 5.10 07/01/2018 115,000 5.15 07/01/2019 125,000 5.20 07/01/2020 130,000 5.20 The 2001A Bonds will become due and will be redeemed and paid on July 1, 2011, at the redemption price of 100 percent of the principal to be redeemed, together with interest accrued to such date. Interest on the 2001A Bonds shall cease to accrue on and after July 1, 2011, whether or not such 2001A Bonds are presented for redemption. Dated: 2010. U.S. BANK NATIONAL ASSOCIATION Seattle, Washington, as Refunding Trustee By: Trust Officer ---PAGE BREAK--- Attachment “II” Page 1 ATTACHMENT “II” NOTICE OF REDEMPTION CITY OF MISSOULA Missoula County, Montana GENERAL FUND OBLIGATION BONDS, SERIES 2001A NOTICE IS HEREBY GIVEN that pursuant to the provisions of Section 14(A) of Resolution Number adopted on April 26, 2010, by the City Council of the City of Missoula, Montana (the “City”), the City has called for redemption on July 1, 2011, the outstanding $955,000 principal amount of its General Fund Obligation Bonds, Series 2001A, dated January 1, 2001, and originally issued on 2001, that mature on July 1 in the years 2010 through 2020, inclusive, as set forth below: Maturity Date Principal Amount Interest Rate CUSIP Nos. 07/01/2012 $ 85,000 4.85% 07/01/2013 90,000 4.90 07/01/2014 95,000 4.95 07/01/2015 100,000 5.00 07/01/2016 105,000 5.05 07/01/2017 110,000 5.10 07/01/2018 115,000 5.15 07/01/2019 125,000 5.20 07/01/2020 130,000 5.20 The 2001A Bonds will become due and will be redeemed and paid on July 1, 2011, at the redemption price of 100 percent of the principal to be redeemed, together with interest accrued to such date. Interest on the 2001A Bonds shall cease to accrue on and after July 1, 2011, whether or not such 2001A Bonds are presented for redemption. On July 1, 2011, the 2001A Bonds designated will become due and payable at the specified redemption price at the following address: In Person or By Mail: [U.S. Bank National Association] [address] [ZIP Code] U.S. Bank National Association, as Refunding Trustee, shall not be held responsible for the selection or use of the CUSIP number, nor is any representation made as to its correctness indicated in this Redemption Notice. It is included solely for convenience of the Registered Owners. [insert relevant federal and state law tax consequences of redemption payments] No representation is made as to the correctness of the number either as printed on the 2001A Bonds or as contained in any notice of redemption and reliance may be placed only on the identification numbers printed on the 2001A Bonds. Dated: 2010. U.S. BANK NATIONAL ASSOCIATION Seattle, Washington, as Registrar