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HomeMy WebLinkAbout2024-455 and 456-08.05.2024- Authorizing Resolution 2024E Sewer CLN - FINAL (02379292x7F7E1)ITEMS TO INCLUDE ON AGENDA CITY OF WATERLOO, IOWA $5,500,000 Sewer Revenue Capital Loan Note, Series 2024E. • Resolution Appointing Paying Agent, Note Registrar, and Transfer Agent, Approving the Paying Agent and Note Registrar and Transfer Agent Agreement and Authorizing the Execution of the Agreement. • Resolution approving and authorizing a form of Loan Agreement and authorizing and providing for the issuance of Sewer Revenue Capital Loan Note and providing for a method of payment of the Note; Approval of the Tax Exemption Certificate NOTICE MUST BE GIVEN PURSUANT TO IOWA CODE CHAPTER 21 AND THE LOCAL RULES OF THE CITY. August 5, 2024 The City Council of the City of Waterloo, State of Iowa, met in regular session, in the Council Chambers, City Hall, 715 Mulberry Street, Waterloo, Iowa, at 5:30 o'clock P.M., on the above date. There were present Mayor Quentin Hart, in the chair, and the following named Council Members: Boesen, Nichols, Creighton -Smith, Chiles, Simmons and Wilder Absent: Feuss Vacant: None 1 Council Member Nichols introduced the following resolution entitled "RESOLUTION APPOINTING UMB BANK, N.A. OF WEST DES MOINES, IOWA, TO SERVE AS PAYING AGENT, NOTE REGISTRAR, AND TRANSFER AGENT, APPROVING THE PAYING AGENT AND NOTE REGISTRAR AND TRANSFER AGENT AGREEMENT AND AUTHORIZING THE EXECUTION OF THE AGREEMENT", and moved that the resolution be adopted. Council Member Creighton -Smith seconded the motion to adopt. The roll was called and the vote was, AYES: Boesen, Nichols, Creighton -Smith, Chiles, Simmons and Wilder NAYS: None Whereupon, the Mayor declared the resolution duly adopted as follows: RESOLUTION NO. 2024-455 RESOLUTION APPOINTING UMB BANK, N.A. OF WEST DES MOINES, IOWA, TO SERVE AS PAYING AGENT, NOTE REGISTRAR, AND TRANSFER AGENT, APPROVING THE PAYING AGENT AND NOTE REGISTRAR AND TRANSFER AGENT AGREEMENT AND AUTHORIZING THE EXECUTION OF THE AGREEMENT WHEREAS, $5,500,000 Sewer Revenue Capital Loan Note, Series 2024E, dated August 19, 2024, have been sold and action should be taken to provide for the maintenance of records, registration of certificates and payment of principal and interest in connection with the issuance of the Note; and WHEREAS, this Council has deemed that the services offered by UMB Bank, N.A. of West Des Moines, Iowa, are necessary for compliance with rules, regulations, and requirements governing the registration, transfer and payment of registered Note; and WHEREAS, a Paying Agent, Note Registrar and Transfer Agent Agreement (hereafter "Agreement") has been prepared to be entered into between the City and UMB Bank, N.A. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATERLOO, STATE OF IOWA: Section 1. That UMB BANK, N.A. of West Des Moines, Iowa, is hereby appointed to serve as Paying Agent, Note Registrar and Transfer Agent in connection with the issuance of $5,500,000 Sewer Revenue Capital Loan Note, Series 2024E, dated August 19, 2024. 2 Section 2. That the Agreement with UMB BANK, N.A. of West Des Moines, Iowa, is hereby approved and that the Mayor and Clerk are authorized to sign the Agreement on behalf of the City. PASSED AND APPROVED this 5th day of August 2024. ATTEST: Nancy Higby, Deputy City Clerk Quetthtz 9-(4rE Quentin Hart, Mayor 3 Council Member Nichols introduced the following Resolution entitled "A RESOLUTION APPROVING AND AUTHORIZING A FORM OF LOAN AGREEMENT AND AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE PAYMENT OF $5,500,000 SEWER REVENUE CAPITAL LOAN NOTE, SERIES 2024E, OF THE CITY OF WATERLOO, STATE OF IOWA, UNDER THE PROVISIONS OF THE CODE OF IOWA, AND PROVIDING FOR A METHOD OF PAYMENT OF THE NOTE, WHICH INCLUDES APPROVAL OF TAX EXEMPTION CERTIFICATE", and moved its adoption. Council Member Creighton -Smith seconded the motion to adopt. The roll was called and the vote was: AYES: Boesen, Nichols, Creighton -Smith, Chiles, Simmons and Wilder NAYS: None Whereupon the Mayor declared the following Resolution duly adopted: Resolution No. 2024-456 A RESOLUTION APPROVING AND AUTHORIZING A FORM OF LOAN AGREEMENT AND AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE PAYMENT OF $5,500,000 SEWER REVENUE CAPITAL LOAN NOTE, SERIES 2024E, OF THE CITY OF WATERLOO, STATE OF IOWA, UNDER THE PROVISIONS OF THE CODE OF IOWA, AND PROVIDING FOR A METHOD OF PAYMENT OF THE NOTE, WHICH INCLUDES APPROVAL OF TAX EXEMPTION CERTIFICATE WHEREAS, the City Council of the City of Waterloo, Iowa, sometimes hereinafter referred to as the "Issuer", has heretofore established charges, rates and rentals for services which are and will continue to be collected as system revenues of the municipal sewer system, sometimes hereinafter referred to as the "System", and said revenues are available for the payment of Sewer Revenue Capital Loan Note, Series 2024E, subject to the following premises; and WHEREAS, the Issuer proposes to issue its Sewer Revenue Capital Loan Note, Series 2024E, to the extent of $5,500,000, for the purpose of defraying the costs of the Project as set forth in Section 3 of this Resolution; and, it is deemed necessary and advisable and in the best interests of the City that a form of Loan Agreement be approved and authorized; and WHEREAS, there were previously issued $1,600,000 Taxable Sewer Revenue Capital Loan Note, Series 2018, dated May 18, 2018; $2,077,000 Taxable Sewer Revenue Capital Loan Note, Series 2019, dated April 19, 2019; $1,128,000 Taxable Sewer Revenue Capital Loan Note, Series 2020A, dated September 4, 2020; $5,138,000 Taxable Sewer Revenue Capital Loan Note, 4 Series 2020B, dated September 4, 2020 (as amended on November 18, 2022 resulting in a $4,861,743.40 Taxable Sewer Revenue Capital Loan Note (Sponsored Project Amendment), Series 2022E); $19,186,000 Taxable Sewer Revenue Capital Loan Note, Series 2020C, dated September 4, 2020; $8,105,000 Taxable Sewer Revenue Capital Loan Note, Series 2022A, dated May 13, 2022; $4,202,000 Taxable Sewer Revenue Capital Loan Note, Series 2022B, dated May 13, 2022; $1,036,000 Taxable Sewer Revenue Capital Loan Note, Series 2022C, dated May 13, 2022; $1,068,000 Sewer Revenue Capital Loan Note, Series 2022D, dated November 18, 2022; $4,045,000 Sewer Revenue Capital Loan Note, Series 2023B; $1,014,000 Sewer Revenue Capital Loan Note, Series 2023C; and $7,948,000 Sewer Revenue Capital Loan Note, Series 2024A, part of each of which remain outstanding and are a lien on the Net Revenues of the System (the "Outstanding Obligations"). WHEREAS, In the Prior Note Resolutions (as hereinafter defined) it is provided that additional revenue notes or bonds may be issued on a parity with the outstanding notes or bonds, for the costs of future improvements and extensions to the System, provided that there has been procured and placed on file with the City Clerk, a statement complying with the conditions and limitations therein imposed upon the issuance of said parity notes or bonds; and WHEREAS, a statement of Speer Financial Inc., an independent financial consultant not in the regular employ of Issuer, has been placed on file in the office of the City Clerk prior to Closing (as hereinafter defined), showing the conditions and limitations of said Prior Note Resolutions, with regard to the sufficiency of the revenues of the System to permit the issuance of additional revenue notes or bonds ranking on a parity with the outstanding notes or bonds to have been met and satisfied as required; and WHEREAS, the notice of intention of Issuer to take action for the issuance of not to exceed $9,000,000 Sewer Revenue Capital Loan Note has heretofore been duly published, no objections to such proposed action have been filed, and the Issuer has held a public meeting and hearing upon the proposal to institute proceedings for the issuance of the Note, and is now authorized to proceed with said issuance. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATERLOO, STATE OF IOWA: Section 1. Definitions. The following terms shall have the following meanings in this Resolution unless the text expressly or by necessary implication requires otherwise: ♦ "Additional Obligations" shall mean any sewer revenue bonds or notes or other obligations issued on a parity with the Note in accordance with the provisions of Section 21 hereof. ♦ " City Clerk" shall mean the City Clerk or such other officer of the successor Governing Body as shall be charged with substantially the same duties and responsibilities. 5 ♦ "Closing" shall mean the date of delivery of the Note to the Original Purchaser and the funding of the Loan. ♦ "Corporate Seal" shall mean the official seal of Issuer adopted by the Governing Body. • "Default Rate" means an interest rate per annum equal to the sum of the interest rate otherwise in effect on the Notes plus 4.00%. • "Fiscal Year" shall mean the twelve months' period beginning on July 1 of each year and ending on the last day of June of the following year, or any other consecutive twelve-month period adopted by the Governing Body or by law as the official accounting period of the System; provided, that the requirements of a fiscal year as expressed in this Resolution shall exclude any payment of principal or interest falling due on the first day of the fiscal year and include any payment of principal or interest falling due on the first day of the succeeding fiscal year. • "Governing Body" shall mean the City Council, or its successor in function with respect to the operation and control of the System. ♦ "Independent Auditor" shall mean an independent firm of certified public accountants or the Auditor of State. ♦ "Issuer" and "City" shall mean the City of Waterloo, Iowa. • "Loan Agreement" or "Agreement" shall mean a Loan Agreement between the Issuer and the Original Purchaser in substantially the form attached to and approved by this Resolution, as the same may be amended, restated, supplemented or otherwise modified in accordance with its terms. • `Maximum Federal Corporate Tax Rate" means, for any day, the maximum rate of income taxation imposed on corporations pursuant to Section 11(b) of the Code, as in effect as of such day (or, if as a result of a change in the Code, the rate of income taxation imposed on corporations generally shall not be applicable to the Original Purchaser, the maximum statutory rate of federal income taxation which could apply to the Original Purchaser as of such day). • "Net Revenues" shall mean gross earnings of the System after deduction of Current Expenses; "Current Expenses" shall mean and include the reasonable and necessary cost of operating, maintaining, repairing and insuring the System, including purchases at wholesale, if any, salaries, wages, and costs of materials and supplies, but excluding depreciation and principal of and interest on the Note and any Parity Obligations or payments to the various funds established herein; capital costs, depreciation and interest or principal payments are not System expenses. 6 • "Note" or "Notes" shall mean the $5,500,000 Sewer Revenue Capital Loan Note, Series 2024E, authorized to be issued by this Resolution. ♦ "Original Purchaser" shall mean DNT Asset Trust, as the purchaser of the Note from the Issuer at the time of their original issuance. ♦ "Outstanding Obligations" shall mean: • $7,948,000 Sewer Revenue Capital Loan Note, Series 2024A, dated March 22, 2024, issued in according with a resolution dated March 4, 2024; • Sewer Revenue Capital Loan Note, Series 2023C, dated December 22, 2023, issued in accordance with a resolution dated December 4, 2023; • Sewer Revenue Capital Loan Note, Series 2023B, dated August 25, 2023, issued in accordance with a resolution dated August 7, 2023; • Sewer Revenue Capital Loan Note, Series 2022A, dated May 13, 2022, issued in accordance with a resolution dated April 18, 2022; • Sewer Revenue Capital Loan Note, Series 2022B, dated May 13, 2022, issued in accordance with a resolution dated April 18, 2022; • Sewer Revenue Capital Loan Note, Series 2022C, dated May 13, 2022, issued in accordance with a resolution dated April 18, 2022; • Sewer Revenue Capital Loan Note, Series 2022D, dated December 16, 2022, issued in accordance with a resolution dated November 21, 2022; • Sewer Revenue Capital Loan Note, Series 2020A, dated September 4, 2020, issued in accordance with a resolution dated August 10, 2020; • Sewer Revenue Capital Loan Note, Series 2020B, dated September 4, 2020, issued in accordance with a resolution dated August 10, 2020, and amended on November 18, 2022 resulting in a Series 2022E Note; • Sewer Revenue Capital Loan Note, Series 2020C, dated September 4, 2020, issued in accordance with a resolution dated August 10, 2020; • Sewer Revenue Capital Loan Note, Series 2019, dated April 19, 2019, issued in accordance with a resolution dated March 25, 2019; and • Taxable Sewer Revenue Capital Loan Note, Series 2018 dated May 18, 2018, issued in accordance with a resolution dated April 30, 2018. • "Parity Obligations" shall mean notes or bonds payable solely from the Net Revenues of the System on an equal basis with the Note herein authorized to be issued and shall include Additional Obligations as authorized to be issued under the terms of this Resolution and the Outstanding Obligations. • "Paying Agent" shall mean UMB Bank, N.A., of West Des Moines, Iowa, or such successor as may be approved by Issuer as provided herein and who shall carry out the duties prescribed herein as Issuer's Agent to provide for the payment of principal of and interest on the Note as the same shall become due. 7 • "Permitted Investments" shall mean: ■ direct obligations of (including obligations issued or held in book entry form on the books of) the Department of the Treasury of the United States of America; • cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in the above paragraph); ■ obligations of any of the following federal agencies which obligations represent full faith and credit of the United States of America, including: -Export - Import Bank -Farm Credit System Financial Assistance Corporation -USDA - Rural Development -General Services Administration - U.S. Maritime Administration - Small Business Administration - Government National Mortgage Association (GNMA) - U.S. Department of Housing & Urban Development (PHA's) - Federal Housing Administration ■ repurchase agreements whose underlying collateral consists of the investments set out above if the Issuer takes delivery of the collateral either directly or through an authorized custodian. Repurchase agreements do not include reverse repurchase agreements; ■ senior debt obligations rated "AAA" by Standard & Poor's Corporation (S&P) or "Aaa" by Moody's Investors Service Inc. (Moody's) issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; ■ U.S. dollar denominated deposit accounts, federal funds and banker's acceptances with domestic commercial banks which have a rating on their short- term certificates of deposit on the date of purchase of "A-1" or "A-1+" by S&P or "P-1" by Moody's and maturing no more than 360 days after the date of purchase (ratings on holding companies are not considered as the rating of the bank); • commercial paper which is rated at the time of purchase in the single highest classification, "A-1+" by S&P or "P-1" by Moody's and which matures not more than 270 days after the date of purchase; • investments in a money market fund rated "AAAm" or "AAAm-G" or better by S&P; • pre -refunded Municipal Obligations, defined as any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (a) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of S&P or Moody's or any successors thereto; or (b)(i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or direct obligations of the Department of the Treasury of the United States of America, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate; and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; ■ tax exempt bonds as defined and permitted by section 148 of the Internal Revenue Code and applicable regulations and only if rated within the two highest classifications as established by at least one of the standard rating services approved by the superintendent of banking by rule adopted pursuant to chapter 17A Code of Iowa; ■ an investment contract rated within the two highest classifications as established by at least one of the standard rating services approved by the superintendent of banking by rule adopted pursuant to chapter 17A Code of Iowa; and ■ Iowa Public Agency Investment Trust. • "Prior Note Resolutions" shall mean the resolution of the City Council adopted on March 4, 2024, authorizing the issuance of the $7,948,000 Sewer Revenue Capital Loan Note, Series 2024A, dated March 22, 2024; the resolution of the City Council adopted on December 4, 2023, authorizing the issuance of the $1,014,000 Sewer Revenue Capital Loan Note, Series 2023C dated December 22, 2023; the resolution of the City Council adopted on August 7, 2023, authorizing the issuance of the $4,045,000 Sewer Revenue Capital Loan Note, Series 2023B dated August 25, 2023; the resolution of the City Council adopted on October 17, 2022, authorizing the issuance of the $4,861,743.40 Taxable Sewer Revenue Capital Loan Note (Sponsored Project Amendment), Series 2022E dated November 18, 2022; the resolution of the City Council adopted on November 21, 2022, authorizing the issuance of the $1,068,000 Sewer Revenue Capital Loan Note, Series 2022D, dated December 16, 2022; the resolution of the City Council adopted on April 18, 2022, authorizing the issuance of the $1,036,000 Taxable Sewer Revenue Capital Loan Note, Series 2022C dated May 13, 2022; the 9 resolution of the City Council adopted $4,202,000 Taxable Sewer Revenue Capital Loan Note, Series 2022B dated May 13, 2022; the resolution of the City Council adopted on April 18, 2022, authorizing the issuance of the Sewer Revenue Capital Loan Note, Series 2022A, dated May 13, 2022; the resolution of the City Council adopted on April 18, 2022, authorizing the issuance of the Sewer Revenue Capital Loan Note, Series 2022B, dated May 13, 2022; the resolution of the City Council adopted on April 18, 2022, authorizing the issuance of the Sewer Revenue Capital Loan Note, Series 2022C, dated May 13, 2022; the resolution of the City Council adopted on August 10, 2020, authorizing the issuance of the Sewer Revenue Capital Loan Note, Series 2020A, dated September 4, 2020; the resolution of the City Council adopted on August 10, 2020, authorizing the issuance of the Sewer Revenue Capital Loan Note, Series 2020B, dated September 4, 2020; the resolution of the City Council adopted on August 10, 2020, authorizing the issuance of the Sewer Revenue Capital Loan Note, Series 2020C, dated September 4, 2020; the resolution of the City Council adopted on April 30, 2018, authorizing the issuance of the Sewer Revenue Capital Loan Note, Series 2018, dated May 18, 2018; and the resolution of the City Council adopted on March 25, 2019, authorizing the issuance of the Sewer Revenue Capital Loan Note, Series 2019, dated April 19, 2019. • "Project" shall mean the costs of acquisition, construction, extension, improvement and equipping of all or part of the Municipal Sewer Utility System, including the acquisition, construction and installation of all or part of a fiber optic backbone broadband communications system for Municipal Sewer Utility System purposes. • "Project Fund" shall mean the fund established under this Resolution for the deposit of a portion of the proceeds to pay costs of the Project. • "Rebate Fund" shall mean the fund so defined in and established pursuant to the Tax Exemption Certificate. • "Registrar" shall mean UMB Bank, N.A. of West Des Moines, Iowa, or such successor as may be approved by Issuer as provided herein and who shall carry out the duties prescribed herein with respect to maintaining a register of the owners of the Note. Unless otherwise specified, the Registrar shall also act as Transfer Agent for the Note. • "Resolution" shall mean this resolution authorizing the issuance of the Note. • "System" shall mean the Municipal Sewer System of the Issuer and all properties of every nature hereinafter owned by the Issuer comprising part of or used as a part of the System, including all improvements and extensions made by Issuer while any of the Note or Parity Obligations remain outstanding; all real and personal property; and all appurtenances, contracts, leases, franchises and other intangibles. - 10 - • "Taxable Rate" means, for each day applicable, a rate of interest per annum equal to the product of (i) the interest rate on the Notes for such date and (ii) the applicable Taxable Rate Factor. • "Taxable Rate Factor" means for each date the Taxable rate is determined the quotient of (i) one divided by (ii) one minus the Maximum Federal Corporate Tax Rate in effect as of such day. • "Tax Exemption Certificate" shall mean the Tax Exemption Certificate executed by the Treasurer and delivered at the time of issuance and delivery of the Note. • "Treasurer" shall mean the Finance Director or such other officer as shall succeed to the same duties and responsibilities with respect to the recording and payment of the Note issued hereunder. • "Yield Restricted" shall mean required to be invested at a yield that is not materially higher than the yield on the Note under Section 148(a) of the Internal Revenue Code or regulations issued thereunder. Section 2. Authority. The Loan Agreement and the Note authorized by this Resolution shall be issued pursuant to Sections 384.24A and 384.83, of the Code of Iowa, and in compliance with all applicable provisions of the Constitution and laws of the State of Iowa. The Loan Agreement shall be substantially in the form attached to this Resolution and is authorized to be executed and issued on behalf of the Issuer by the Mayor and attested by the City Clerk. Section 3. Authorization and Purpose. There are hereby authorized to be issued one negotiable, fully registered Sewer Revenue Term Note of the City of Waterloo, in the County of Black Hawk, Iowa, to be designated as "Sewer Revenue Capital Loan Note, Series 2024E", in the aggregate amount of $5,500,000, for the purpose of paying costs of the Project. The City Council, pursuant to Sections 384.24A and 384.83 of the Code of Iowa, hereby finds and determines that it is necessary and advisable to issue said Note authorized by the Loan Agreement and this Resolution. Section 4. Source of Payment. The Note herein authorized and Parity Obligations and the interest thereon shall be payable solely and only out of the Net Revenues of the System and shall be a first lien on the future Net Revenues of the System. The Note shall not be a general obligation of the Issuer nor shall it be payable in any manner by taxation and the Issuer shall be in no manner liable by reason of the failure of the said Net Revenues to be sufficient for the payment of the Note. Section 5. Note Details. Sewer Revenue Capital Loan Note, Series 2024E, of the City in the amount of $5,500,000, shall be issued to evidence the obligations of the Issuer under the Agreement pursuant to the provisions of Sections 384.24A and 384.83 of the Code of Iowa for the aforesaid purpose. The Note shall be designated "SEWER REVENUE CAPITAL LOAN NOTE, SERIES 2024E", be dated the date of delivery, and bear interest at the rate of 3.770% per annum from said date, until payment thereof, at the office of the Paying Agent, said interest - 11 - payable on June 1, 2025, and semi-annually thereafter on the 1st day of June and December in each year until maturity as set forth in the Loan Agreement. Notwithstanding the foregoing, (i) in the event any principal of or interest on the Notes is not paid when due, the Notes shall bear interest at the Default Rate and (ii) from and after the date the date on which interest on the Notes is first includable in the gross income of the holder thereof due to negligent act or omission of the City, the Notes shall bear interest at the Taxable Rate. The Note shall be executed by the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the Clerk, and impressed or imprinted with the seal of the City and shall be fully registered as to both principal and interest as provided in this Resolution; principal, interest and premium, if any, shall be payable at the office of the Paying Agent by mailing of a check, wire transfer or automated clearing house system transfer to the registered owner of the Note. The Note shall be in the denomination of $250,000 or integral multiples of $5,000 in excess thereof and shall be initially issued as a single Term Note in the denomination of $5,500,000 and numbered R-1. Section 6. Redemption. The Note is not subject to optional redemption prior to maturity. Section 7. Mandatory Payment and Redemption. The Note is subject to mandatory redemption prior to maturity at a price equal to 100% of the portion of the principal amount thereof to be redeemed plus accrued interest at the redemption date on June 1st of each of the years in the principal amount set opposite each year in the following schedule: Principal Interest Maturity Amount Rate * * June 1st $241,000 3.770% 2025 $288,000 3.770% 2026 $299,000 3.770% 2027 $311,000 3.770% 2028 $323,000 3.770% 2029 $336,000 3.770% 2030 $350,000 3.770% 2031 $364,000 3.770% 2032 $378,000 3.770% 2033 $393,000 3.770% 2034 $409,000 3.770% 2035 $426,000 3.770% 2036 $443,000 3.770% 2037 $460,000 3.770% 2038 $479,000 3.770% 2039* * Final Maturity ** Subject to the applicability of the Default Rate and Taxable Rate - 12 - Section 8. Registration of Note; Appointment of Registrar; Transfer; Ownership; Delivery; and Cancellation. (a) Registration. The ownership of Note may be transferred only by the making of an entry upon the books kept for the registration and transfer of ownership of the Note, and in no other way. UMB Bank, N.A. is hereby appointed as Note Registrar under the terms of this Resolution and under the provisions of a separate agreement with the Issuer filed herewith which is made a part hereof by this reference. Registrar shall maintain the books of the Issuer for the registration of ownership of the Note for the payment of principal of and interest on the Note as provided in this Resolution. The Note shall be negotiable as provided in Article 8 of the Uniform Commercial Code subject to the provisions for registration and transfer contained in the Note and in this Resolution. (b) Transfer. The ownership of any Note may be transferred only upon the Registration Books kept for the registration and transfer of Note and only upon surrender thereof at the office of the Registrar together with an assignment duly executed by the holder or his duly authorized attorney in fact in such form as shall be satisfactory to the Registrar, along with the address and social security number or federal employer identification number of such transferee (or, if registration is to be made in the name of multiple individuals, of all such transferees). In the event that the address of the registered owner of the Note (other than a registered owner which is the nominee of the broker or dealer in question) is that of a broker or dealer, there must be disclosed on the Registration Books the information pertaining to the registered owner required above. Upon the transfer of any such Note, a new fully registered Note, of any denomination or denominations permitted by this Resolution in aggregate principal amount equal to the unmatured and unredeemed principal amount of such transferred fully registered Note, and bearing interest at the same rate and maturing on the same date or dates shall be delivered by the Registrar. (c) Registration of Transferred Note. In all cases of the transfer of the Note, the Registrar shall register, at the earliest practicable time, on the Registration Books, the Note, in accordance with the provisions of this Resolution. (d) Ownership. The person in whose name the ownership of the Note shall be registered on the Registration Books of the Registrar shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any such Note and the premium, if any, and interest thereon shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Note, including the interest thereon, to the extent of the sum or sums so paid. (e) Cancellation. The Note, once redeemed, shall not be reissued but shall be cancelled by the Registrar. Once cancelled by the Registrar the Note shall be destroyed and a Certificate of the destruction thereof shall be furnished promptly to the Issuer; - 13 - provided that if the Issuer shall so direct, the Registrar shall forward the cancelled Note to the Issuer. (f) Non -Presentment of Note. In the event any payment check representing payment of principal of or interest on the Note is returned to the Paying Agent or if any note is not presented for payment of principal at the maturity or redemption date (provided that presentation or surrender of any Note shall not be required until payment in full), if funds sufficient to pay such principal of or interest on Note shall have been made available to the Paying Agent for the benefit of the owner thereof, all liability of the Issuer to the owner thereof for such interest or payment of such Note shall forthwith cease, terminate and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the owner of such Note who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Resolution or on, or with respect to, such interest or Note. The Paying Agent's obligation to hold such funds shall continue for a period equal to two years and six months following the date on which such interest or principal became due, whether at maturity, or at the date fixed for redemption thereof, or otherwise, at which time the Paying Agent, shall surrender any remaining funds so held to the Issuer, whereupon any claim under this Resolution by the Owners of such interest or Note of whatever nature shall be made upon the Issuer. Section 9. Reissuance of Mutilated, Destroyed, Stolen or Lost Note. In case any outstanding Note shall become mutilated or be destroyed, stolen or lost, the Issuer shall at the request of Registrar authenticate and deliver a new Note of like tenor and amount as the Note so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Note to Registrar, upon surrender of such mutilated Note, or in lieu of and substitution for the Note destroyed, stolen or lost, upon filing with the Registrar evidence satisfactory to the Registrar and Issuer that such Note has been destroyed, stolen or lost and proof of ownership thereof, and upon furnishing the Registrar and Issuer with satisfactory indemnity and complying with such other reasonable regulations as the Issuer or its agent may prescribe and paying such expenses as the Issuer may incur in connection therewith. Section 10. Record Date. Payments of principal and interest, otherwise than upon full redemption, made in respect of any Note, shall be made to the registered holder thereof or to their designated Agent as the same appear on the books of the Registrar on the 15th day of the month preceding the payment date, without presentation or surrender until payment in full. All such payments shall fully discharge the obligations of the Issuer in respect of such Note to the extent of the payments so made. Upon receipt of the final payment of principal, the holder of the Note shall surrender the Note to the Paying Agent. Section 11. Execution, Authentication and Delivery of the Note. Upon the adoption of this Resolution, the Mayor and Clerk shall execute and deliver the Note to the Registrar, who shall authenticate the Note and deliver the same to or upon order of the Original Purchaser. No Note shall be valid or obligatory for any purpose or shall be entitled to any right or benefit hereunder unless the Registrar shall duly endorse and execute on such Note a Certificate of Authentication substantially in the form of the Certificate herein set forth. Such Certificate upon - 14 - any Note executed on behalf of the Issuer shall be conclusive evidence that the Note so authenticated has been duly issued under this Resolution and that the holder thereof is entitled to the benefits of this Resolution. No Note shall be authenticated and delivered by the Registrar, unless and until there shall have been provided the following: • A certified copy of the resolution of Issuer approving the execution of a Loan Agreement and a copy of the Loan Agreement; • A written order of Issuer signed by the Treasurer directing the authentication and delivery of the Note to or upon the order of the Original Purchaser upon payment of the purchase price as set forth therein; • The approving opinion of Ahlers & Cooney, P.C., Bond Counsel, concerning the validity and legality of all the Note proposed to be issued. Section 12. Right to Name Substitute Paying Agent or Registrar. Issuer reserves the right to name a substitute, successor Registrar or Paying Agent upon giving prompt written notice to each registered Noteholder. Section 13. Form of Note. Note shall be printed in substantial compliance with standards proposed by the American Standards Institute substantially in the form as follows: - 15 - (6) (7) (6) (8) (1) (2) (3) (4) (5) (9) (9a) (10) (Continued on the back of this Bond) (11)(12)(13) (14) FIGURE 1 (Front) (15) - 16 - (10) (Continued) (16) FIGURE 2 (Back) The text of the Note to be located thereon at the item numbers shown shall be as follows: Item 1, figure 1 = "STATE OF IOWA" "COUNTY OF BLACK HAWK" " CITY OF WATERLOO" "SEWER REVENUE CAPITAL LOAN NOTE" "SERIES 2024E" - 17 - Item 2, figure 1 = Rate: 3.770% per annum Item 3, figure 1 = Final Maturity: June 1, 2039 Item 4, figure 1 = Note Date: August 19, 2024 Item 5, figure 1 = CUSIP # - N/A Item 6, figure 1 = "Registered" Item 7, figure 1 = Certificate No. R-1 Item 8, figure 1 = Principal Amount: $5,500,000 Item 9, figure 1 = The City of Waterloo, Iowa, a municipal corporation organized and existing under and by virtue of the Constitution and laws of the State of Iowa (the "Issuer"), for value received, promises to pay from the source and as hereinafter provided, on the maturity date indicated above, to DNT ASSET TRUST 10 South Dearborn Street, Floor 36 Chicago, Illinois 60603 FEDERAL TAX I.D. NUMBER: Item 10, figure 1 = or registered assigns, the principal sum of FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS in lawful money of the United States of America, with interest on said sum from the date of delivery until paid at the rate of 3.770% per annum (subject to the applicability of the Default Rate or Taxable Rate as set forth in the Resolution), interest payable on June 1, 2025, and semi-annually thereafter on the 1st day of each December and June in each year. The Note is subject to mandatory redemption prior to maturity on June 1, 2025 and annually thereafter on the first day of June in the amounts set forth below. Interest and principal shall be paid to the registered holder of the Note as shown on the records of ownership maintained by the Registrar as of the 15th day of the month next preceding such interest payment date or principal payment date, as applicable. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. This Note is issued pursuant to the provisions of Sections 384.24A and 384.83 of the Code of Iowa, for the purpose of paying costs of acquisition, construction, extension, improvement and equipping of all or part of the Municipal Sewer Utility, including the acquisition, construction and installation of all or part of a fiber optic backbone broadband communications system for Municipal Sewer Utility purposes, and evidences amounts payable under a certain Loan Agreement dated as of the date hereof, in conformity to a Resolution of the City Council of the City duly passed and approved. For a complete statement of the revenues and funds from which and the conditions under which this Note is payable, a statement of the conditions under which additional Note or bonds of equal standing may be issued, and the general covenants and provisions pursuant to which this Note is issued, reference is made to the above -described Loan Agreement and Resolution. This Note is not subject to optional redemption prior to maturity. - 18 - The Note is subject to mandatory redemption prior to maturity at a price equal to 100% of the portion of the principal amount thereof to be redeemed plus accrued interest at the redemption date on June 1st of each of the years in the principal amount set opposite each year in the following schedule: Principal Interest Maturity Amount Rate** June 1st $241,000 3.770% 2025 $288,000 3.770% 2026 $299,000 3.770% 2027 $311,000 3.770% 2028 $323,000 3.770% 2029 $336,000 3.770% 2030 $350,000 3.770% 2031 $364,000 3.770% 2032 $378,000 3.770% 2033 $393,000 3.770% 2034 $409,000 3.770% 2035 $426,000 3.770% 2036 $443,000 3.770% 2037 $460,000 3.770% 2038 $479,000 3.770% 2039* * Final Maturity ** Subject to the applicability of the Default Rate and Taxable Rate Ownership of this Note may be transferred only by transfer upon the books kept for such purpose by UMB Bank, N.A., West Des Moines, Iowa, the Registrar. Such transfer on the books shall occur only upon presentation and surrender of this Note at the office of the Registrar, together with an assignment duly executed by the owner hereof or his duly authorized attorney in the form as shall be satisfactory to the Registrar. Issuer reserves the right to substitute the Registrar and Paying Agent but shall, however, promptly give notice to registered Noteholders of such change. The Note shall be negotiable as provided in Article 8 of the Uniform Commercial Code and subject to the provisions for registration and transfer contained in the Note Resolution. This Note and the series of which it forms a part, Outstanding Obligations ranking on a parity therewith and any Additional Obligations which may be hereafter issued and outstanding from time to time on a parity with said Note, as provided in the Resolution and Loan Agreement of which notice is hereby given and which are hereby made a part hereof, are payable from and secured by a pledge of the Net Revenues of the municipal sewer system utility (the "System"), as defined and provided in said Resolution. There has heretofore been established and the City covenants and agrees that it will maintain just and equitable rates or charges for the use of and service rendered by said System in each year for the payment of the proper and reasonable - 19 - expenses of operation and maintenance of said System and for the establishment of a sufficient sinking fund to meet the principal of and interest on this series of Note, and other obligations ranking on a parity therewith, as the same become due. This Note is not payable in any manner by taxation and under no circumstances shall the City be in any manner liable by reason of the failure of said Net Revenues to be sufficient for the payment hereof. And it is hereby represented and certified that all acts, conditions and things requisite, according to the laws and Constitution of the State of Iowa, to exist, to be had, to be done, or to be performed precedent to the lawful issue of this Note, have been existent, had, done and performed as required by law. IN TESTIMONY WHEREOF, said City by its City Council has caused this Note to be signed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its City Treasurer, with the seal of said City impressed hereon, and authenticated by the manual or facsimile signature of an authorized representative of the Registrar, UMB Bank, N.A., West Des Moines, Iowa, all as of the day of , 2024. Item 11, figure 1 = Date of authentication: Item 12, figure 1 = This is one of the Note described in the within mentioned Resolution, as registered by the City Treasurer. UMB BANK, N.A. By: Registrar Item 13, figure 1 = Registrar and Transfer Agent: UMB BANK, N.A. Paying Agent: UMB BANK, N.A. SEE REVERSE FOR CERTAIN DEFINITIONS Item 14, figure 1 = (Seal) Item 15, figure 1 = (Signature Block) CITY OF WATERLOO, STATE OF IOWA By: manual or facsimile Mayor ATTEST: By: manual or facsimile City Clerk - 20 - Item 17, figure 2 = [Assignment Block] [Information Required for Registration] ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto (Social Security or Tax Identification No. ) the within Note and does hereby irrevocably constitute and appoint attorney in fact to transfer the said Note on the books kept for registration of the within Note, with full power of substitution in the premises. Dated: (Person(s) executing this Assignment sign(s) here) SIGNATURE ) GUARANTEED) IMPORTANT - READ CAREFULLY The signature(s) to this Power must correspond with the name(s) as written upon the face of the certificate(s) or bond(s) in every particular without alteration or enlargement or any change whatever. Signature guarantee must be provided in accordance with the prevailing standards and procedures of the Registrar and Transfer Agent. Such standards and procedures may require signature to be guaranteed by certain eligible guarantor institutions that participate in a recognized signature guarantee program. INFORMATION REQUIRED FOR REGISTRATION OF TRANSFER Name of Transferee(s) Address of Transferee(s) Social Security or Tax Identification Number of Transferee(s) Transferee is a(n): Individual* Corporation Partnership Trust *If the Note is to be registered in the names of multiple individual owners, the names of all such owners and one address and social security number must be provided. The following abbreviations, when used in the inscription on the face of this Note, shall be construed as though written out in full according to applicable laws or regulations: -21 - TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with rights of survivorship and not as tenants in common IA UNIF TRANS MIN ACT - Custodian (Cust) (Minor) Under Iowa Uniform Transfers to Minors Act (State) Section 14. Equality of Lien. The timely payment of principal of and interest on the Note and Parity Obligations shall be secured equally and ratably by the Net Revenues of the System without priority by reason of number or time of sale or delivery; and the Net Revenues of the System are hereby irrevocably pledged to the timely payment of both principal and interest as the same become due. Section 15. Application of Note Proceeds. Proceeds of the Note shall be applied as follows: • $5,428,350.00 shall be deposited to the Project Fund • $71,650 shall be used to pay costs of issuance. The Project Fund shall be invested in accordance with this Resolution. Earnings on investments of the Project Fund shall be deposited in and expended from the Project Fund. Any amounts on hand in the Project Fund shall be available for the payment of the principal of or interest on the Note at any time that other funds of the System shall be insufficient to the purpose, in which event such funds shall be repaid to the Project Fund at the earliest opportunity. Any balance on hand in the Project Fund and not immediately required for its purposes may be invested not inconsistent with limitations provided by law, the Internal Revenue Code and this Resolution. Section 16. User Rates. There has heretofore been established and published as required by law, just and equitable rates or charges for the use of the service rendered by the System. The rates or charges shall be paid by the owner of each and every lot, parcel of real estate, or building that is connected with and uses the System, by or through any part of the System or that in any way uses or is served by the System. So long as the Note are outstanding and unpaid the rates or charges to consumers of services of the System shall be sufficient in each year for the payment of the proper and reasonable expenses of operation and maintenance of the System and for the payment of principal and interest on the Note and Parity Obligations as the same fall due. Section 17. Application of Revenues. From and after the delivery of any Note, and as long as any of the Note or Parity Obligations shall be outstanding and unpaid either as to principal or as to interest, or until all of the Note and Parity Obligations then outstanding shall have been discharged and satisfied in the manner provided in this Resolution, the entire income and revenues of the System shall be deposited as collected in a fund to be known as the Sewer Revenue Fund (the "Revenue Fund"), and shall be disbursed only as follows: - 22 - The provisions in the Prior Note Resolutions, whereby there was created and is to be maintained a Sewer Revenue Note Principal and Interest Sinking Fund, and for the monthly payment into said fund from the future Net Revenues of the System such portion thereof as will be sufficient to meet the principal and interest of the Outstanding Obligations, are hereby ratified and confirmed, and all such provisions inure to and constitute the security for the payment of the principal and interest on Note hereby authorized to be issued; provided, however, that the amounts to be set aside and paid into the Sewer Revenue Note Principal and Interest Sinking Fund in equal monthly installments from the earnings shall be sufficient to pay the principal and interest due each year, not only on the Outstanding Obligations, but also the principal and interest of the Note herein authorized to be issued. Sections 17, 19 and 21 of the Prior Note Resolutions are hereby ratified, confirmed, adopted and incorporated herein as a part of this Resolution. Except as may be otherwise provided in the above Prior Note Resolutions, proceeds of the Note or other funds may be invested in Permitted Investments. Nothing in this Resolution shall be construed to impair the rights vested in the Outstanding Obligations. The amounts herein required to be paid into the various funds named in this Section shall be inclusive of payments required in respect to the Outstanding Obligations. The provisions of the legislation authorizing the Outstanding Obligations and the provisions of this Resolution are to be construed wherever possible so that the same will not be in conflict. In the event such construction is not possible, the provisions of the resolution first adopted shall prevail until such time as the Note or bonds authorized by said resolution have been paid in full or otherwise satisfied as therein provided at which time the provisions of this Resolution shall again prevail. At such time as the Outstanding Obligations are paid and so long as the Note or Parity Obligations remain outstanding and unpaid the same are discharged and satisfied in the manner provided in this Resolution, the entire income and revenues of the system shall be deposited and collected in a fund to be known as the Revenue Fund, and shall be disbursed only as follows: • Operation and Maintenance Fund. Money in the Revenue Fund shall first be disbursed to make deposits into a separate and special fund to pay current expenses. The fund shall be known as the Sewer Utility Operation and Maintenance Fund (the "Operation and Maintenance Fund"). There shall be deposited in the Operation and Maintenance Fund each month an amount sufficient to meet the current expenses of the month plus an amount equal to 1/12th of expenses payable on an annual basis such as insurance. After the first day of the month, further deposits may be made to this account from the Revenue Fund to the extent necessary to pay current expenses accrued and payable to the extent that funds are not available in the Surplus Fund. • Sinking Fund. Money in the Revenue Fund shall next be disbursed to make deposits into a separate and special fund to pay principal of and interest on the Note and Parity Obligations. The fund shall be known as the Sewer Revenue Note Principal and Interest Sinking Fund (the "Sinking Fund"). The required amount to be deposited in the Sinking Fund in any month shall be an amount equal to 1/6th of the installment of interest coming due on the next interest payment date on the then outstanding Note and Parity Obligations, plus 1/12th of the installment of principal coming due on such Note and - 23 - Parity Obligations on the next succeeding principal payment date until the full amount of such installment is on hand. If for any reason the amount on hand in the Sinking Fund exceeds the required amount, the excess shall forthwith be withdrawn and paid into the Revenue Fund. Money in the Sinking Fund shall be used solely for the purpose of paying principal of and interest on the Note and Parity Obligations as the same shall become due and payable. • Subordinate Obligations. Money in the Revenue Fund may next be used to pay principal of and interest on any other obligations which by their terms shall be payable from the revenues of the System, but subordinate to the Note and Parity Obligations, and which have been issued for the purposes of extensions and improvements to the System or to retire the Note or Parity Obligations in advance of maturity, or to pay for extraordinary repairs or replacements to the System. • Surplus Revenue. All money thereafter remaining in the Revenue Fund at the close of each month may be deposited in any of the funds created by this Resolution, to pay for extraordinary repairs or replacements to the System, or may be used to pay or redeem the Note or Parity Obligations, any of them, or for any lawful purpose. Money in the Revenue Fund shall be allotted and paid into the various funds and accounts hereinbefore referred to in the order in which said funds are listed, on a cumulative basis on the loth day of each month, or on the next succeeding business day when the loth shall not be a business day; and if in any month the money in the Revenue Fund shall be insufficient to deposit or transfer the required amount in any of said funds or accounts, the deficiency shall be made up in the following month or months after payments into all funds and accounts enjoying a prior claim to the revenues shall have been met in full. Section 18. Investments. Moneys on hand in the Project Fund and all of the funds provided by this Resolution may be invested only in Permitted Investments or deposited in financial institutions which are members of the Federal Deposit Insurance Corporation, or its equivalent successor, and the deposits of which are insured thereby and all such deposits exceeding the maximum amount insured from time to time by FDIC or its equivalent successor in any one financial institution shall be continuously secured in compliance with Iowa Code chapter 12C, or otherwise by a valid pledge of direct obligations of the United States Government having an equivalent market value. All investments shall mature before the date on which the moneys are required for the purposes for which the fund was created or otherwise as herein provided. The provisions of this Section shall not be construed to require the Issuer to maintain separate accounts for the funds created by this Resolution. The Sinking Fund shall be segregated in a separate account but may be invested in the same manner as other funds of the Issuer but designated as a trust fund on the books and records of the Issuer. The Sinking Fund shall not be available for any other purposes other than those specified in this Resolution. All income derived from such investments shall be deposited in the Revenue Fund and shall be regarded as revenues of the System. Investments shall at any time necessary be - 24 - liquidated and the proceeds thereof applied to the purpose for which the respective fund was created. Section 19. Covenants Regarding the Operation of the System. The Issuer hereby covenants and agrees with each and every holder of the Note and Parity Obligations: (a) Maintenance and Efficiency. The Issuer will maintain the System in good condition and operate it in an efficient manner and at reasonable cost. (b) Sufficiency of Rates. On or before the beginning of each Fiscal Year the Governing Body will adopt or continue in effect rates for all services rendered by the System determined to be sufficient to produce Net Revenues for the next succeeding Fiscal Year which are (i) adequate to pay the principal and interest requirements thereof and to create or maintain the reserves as provided in this Resolution, and (ii) not less than 110 percent of the principal and interest requirements of the next succeeding Fiscal Year. No free use of the System by the Issuer or any department, agency or instrumentality of the Issuer shall be permitted except upon the determination of the Governing Body that the rates and changes otherwise in effect are sufficient to provide Net Revenues at least equal to the requirements of this subsection. (c) Insurance. The Issuer shall maintain insurance for the benefit of the Noteholders on the insurable portions of the System of a kind and in an amount which normally would be carried by private companies engaged in a similar kind of business. The proceeds of any insurance, except public liability insurance, shall be used to repair or replace the part or parts of the System damaged or destroyed, or if not so used shall be placed in an improvement fund for the benefit of the System. (d) Accounting and Audits. The Issuer will cause to be kept proper books and accounts adapted to the System and in accordance with generally accepted accounting practices and will diligently act to cause the books and accounts to be audited and reported upon by an Independent Auditor. The Original Purchaser and holders of any of the Note and Parity Obligations shall have at all reasonable times the right to inspect the System and the records, accounts and data of the Issuer relating thereto. (e) State Laws. The Issuer will faithfully and punctually perform all duties with reference to the System required by the Constitution and laws of the State of Iowa, including the making and collecting of reasonable and sufficient rates for services rendered by the System as above provided, and will segregate the revenues of the System and apply said revenues to the funds specified in this Resolution. (f) Property. The Issuer will not sell, lease, mortgage or in any manner dispose of the System, or any capital part thereof, including any and all extensions and additions that may be made thereto, until satisfaction and discharge of all of the Note and Parity Obligations shall have been provided for in the manner provided in this Resolution; provided, however, this covenant shall not be construed to prevent the disposal by the Issuer of property which in the judgment of its Governing Body has become inexpedient - 25 - or unprofitable to use in connection with the System, or if it is to the advantage of the System that other property of equal or higher value be substituted therefor, and provided further that the proceeds of the disposition of such property shall be placed in a revolving fund to be used in preference to other sources for capital improvements to the System. Any such proceeds of the disposition of property acquired with the proceeds of the Note or Parity Obligations shall not be used to pay principal or interest on the Note and Parity Obligations or for payments into the Sinking Fund. (g) Fidelity Bond. That the Issuer shall maintain fidelity bond coverage in amounts which normally would be carried by private companies engaged in a similar kind of business on each officer or employee having custody of funds of the System. (h) Additional Charges. The Issuer will require proper connecting charges and/or other security for the payment of service charges. (i) Budget. The Governing Body of the Issuer shall approve and conduct operations pursuant to a system budget of revenues and current expenses for each Fiscal Year. Such budget shall take into account revenues and current expenses during the current and last preceding Fiscal Years. Copies of such budget and any amendments thereto shall be mailed to the Original Purchaser and to the Noteholders upon request. Section 20. Remedies of Noteholders. Except as herein expressly limited the holder or holders of the Note and Parity Obligations shall have and possess all the rights of action and remedies afforded by the common law, the Constitution and statutes of the State of Iowa, and of the United States of America, for the enforcement of payment of their Note and interest thereon, and of the pledge of the Net Revenues made hereunder, and of all covenants and agreements of the Issuer hereunder and under the Loan Agreement. Section 21. Prior Lien and Parity Obligations. The Issuer will issue no other notes, bonds or obligations of any kind or nature payable from or enjoying a lien or claim on the property or Net Revenues of the System having priority over the Note or Parity Obligations. Additional Obligations may be issued on a parity and equality of rank with the Note with respect to the lien and claim of such Additional Obligations to the Net Revenues of the System and the money on deposit in the funds adopted by this Resolution, for the following purposes and under the following conditions, but not otherwise: (a) For the purpose of refunding any of the Note or Parity Obligations which shall have matured or which shall mature not later than three months after the date of delivery of such refunding obligation and for the payment of which there shall be insufficient money in the Sinking Fund; (b) For the purpose of making extensions, additions, improvements or replacements to the System, or refunding any Outstanding Obligations, Parity Obligations or other obligations issued for such extensions, additions and improvements, if all of the following conditions shall have been met: - 26 - (i) before any such Additional Obligations ranking on a parity are issued, there will have been procured and filed with the Clerk, a statement of an Independent Auditor, or independent municipal advisor, not a regular employee of the Issuer, reciting the opinion based upon necessary investigations that the Net Revenues of the System for the preceding Fiscal Year (with adjustments as hereinafter provided) were equal to at least 1.10 times the maximum amount that will be required in any Fiscal Year prior to the longest maturity of any of the then outstanding Note or Parity Obligations for both principal of and interest on all Note or Parity Obligations then outstanding which are payable from the Net Revenues of the System and the Additional Obligations then proposed to be issued. For the purpose of determining the Net Revenues of the System for the preceding Fiscal Year as aforesaid, the amount of the gross revenues for such year may be adjusted by an independent consulting engineer or by the Independent Auditor or Municipal Advisor, so as to reflect any changes in the amount of such revenues which would have resulted had any revision of the schedule of rates or charges imposed at or prior to the time of the issuance of any such Additional Obligations been in effect during all of such preceding Fiscal Year. (ii) the Additional Obligations must be payable as to principal and as to interest on the same month and day as the Note herein authorized. (iii) for the purposes of this Section, principal and interest falling due on the first day of a Fiscal Year shall be deemed a requirement of the immediately preceding Fiscal Year. (iv) for the purposes of this Section, general obligation bonds or notes shall be refunded only upon a finding of necessity by the Governing Body and only to the extent the general obligation bonds or notes were issued or the proceeds thereof were expended for the System. (v) for purposes of this Section, "preceding Fiscal Year" shall be the most recently completed Fiscal Year for which audited financial statements prepared by a certified public accountant are issued and available, but in no event a Fiscal Year which ended more than eighteen months prior to the date of issuance of the Additional Obligations. Section 22. Disposition of Proceeds; Arbitrage Not Permitted. The Issuer reasonably expects and covenants that no use will be made of the proceeds from the issuance and sale of the Note issued hereunder which will cause the Note to be classified as an arbitrage bond within the meaning of Section 148(a) and (b) of the Internal Revenue Code of the United States, and that throughout the term of said Note it will comply with the requirements of said statute and regulations issued thereunder. - 27 - To the best knowledge and belief of the Issuer, there are no facts or circumstances that would materially change the foregoing statements or the conclusion that it is not expected that the proceeds of the Note will be used in a manner that would cause the Note to be an arbitrage bonds. Without limiting the generality of the foregoing, the Issuer hereby agrees to comply with the provisions of the Tax Exemption Certificate and the provisions of the Tax Exemption Certificate are hereby incorporated by reference as part of this Resolution. The Treasurer is hereby directed to make and insert all calculations and determinations necessary to complete the Tax Exemption Certificate in all respects and to execute and deliver the Tax Exemption Certificate at issuance of the Note to certify as to the reasonable expectations and covenants of the Issuer at that date. The Issuer covenants that it will treat as Yield Restricted any proceeds of the Note remaining unexpended after three years from the issuance and any other funds required by the Tax Exemption Certificate to be so treated. If any investments are held with respect to the Note and Parity Obligations, the Issuer shall treat the same for the purpose of restricted yield as held in proportion to the original principal amounts of each issue. The Issuer covenants that it will exceed any investment yield restriction provided in this Resolution only in the event that it shall first obtain an opinion of recognized bond counsel that the proposed investment action will not cause the Note to be classified as an arbitrage bond under Section 148(a) and (b) the Internal Revenue Code or regulations issued thereunder. The Issuer covenants that it will proceed with due diligence to spend the proceeds of the Note for the purpose set forth in this Resolution. The Issuer further covenants that it will make no change in the use of the proceeds available for the construction of facilities or change in the use of any portion of the facilities constructed therefrom by persons other than the Issuer or the general public unless it has obtained an opinion of bond counsel or a revenue ruling that the proposed project or use will not be of such character as to cause interest on the Note not to be exempt from federal income taxes in the hands of holders other than substantial users of the project, under the provisions of Section 142(a) of the Internal Revenue Code of the United States, related statutes and regulations. Section 23. Additional Covenants, Representations and Warranties of the Issuer. The Issuer certifies and covenants with the purchasers and holders of the Note from time to time outstanding that the Issuer through its officers, (a) will make such further specific covenants, representations and assurances as may be necessary or advisable; (b) comply with all representations, covenants and assurances contained in the Tax Exemption Certificate, which Tax Exemption Certificate shall constitute a part of the contract between the Issuer and the owners of the Note; (c) consult with bond counsel (as defined in the Tax Exemption Certificate); (d) pay to the United States, as necessary, such sums of money representing required rebates of excess arbitrage profits relating to the Note; (e) file such forms, statements and supporting documents as may be required and in a timely manner; and (f) if deemed necessary or advisable by its officers, to employ and pay fiscal agents, financial advisors, attorneys and other persons to assist the Issuer in such compliance. - 28 - Section 24. Amendment of Resolution to Maintain Tax Exemption. This Resolution may be amended without the consent of any owner of the Note if, in the opinion of bond counsel, such amendment is necessary to maintain tax exemption with respect to the Note under applicable Federal law or regulations and such amendment could not adversely affect any owner of the Note or its rights, security, interests or remedies hereunder. Section 25. Discharge and Satisfaction of Note. The covenants, liens and pledges entered into, created or imposed pursuant to this Resolution may be fully discharged and satisfied with respect to the Note and Parity Obligations, or any of them, in any one or more of the following ways: (a) By paying the Note or Parity Obligations in full when the same shall become due and payable; and (b) By depositing in trust with the Treasurer, or with a corporate trustee designated by the Governing Body, for the payment of said obligations and irrevocably appropriated exclusively to that purpose an amount in cash or direct obligations of the United States the maturities and income of which shall be sufficient to retire at maturity, or by redemption prior to maturity on a designated date upon which said obligations may be redeemed, all of such obligations outstanding at the time, together with the interest thereon to maturity or to the designated redemption date, premiums thereon, if any that may be payable on the redemption of the same; provided that proper notice of redemption of all such obligations to be redeemed shall have been previously published or provisions shall have been made for such publication. Upon such payment or deposit of money or securities, or both, in the amount and manner provided by this Section, all liability of the Issuer with respect to the Note or Obligations shall cease, determine and be completely discharged, and the holders thereof shall be entitled only to payment out of the money or securities so deposited. Section 26. Resolution a Contract. The provisions of this Resolution shall constitute a contract between the Issuer and the holder or holders of the Note and Parity Obligations, and after the issuance of any of the Note no change, variation or alteration of any kind in the provisions of this Resolution shall be made in any manner, except as provided in the next succeeding Section, until such time as all of the Note and Parity Obligations, and interest due thereon, shall have been satisfied and discharged as provided in this Resolution. Section 27. Amendment of Resolution Without Consent. The Issuer may, without the consent of or notice to any of the holders of the Bonds and Parity Obligations, amend or supplement this Resolution for any one or more of the following purposes: (a) to cure any ambiguity, defect, omission or inconsistent provision in this Resolution or in the Note or Parity Obligations; or to comply with any applicable provision of law or regulation of federal or state agencies; provided, however, that such action shall not materially adversely affect the rights, security, interests or remedies of the holders of the Note or Parity Obligations; - 29 - (b) Reserved. (c) to grant to or confer upon the holders of the Note or Parity Obligations any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the holders of the Note; (d) to add to the covenants and agreements of the Issuer contained in this Resolution other covenants and agreements of, or conditions or restrictions upon, the Issuer or to surrender or eliminate any right or power reserved to or conferred upon the Issuer in this Resolution; or (e) to subject to the lien and pledge of this Resolution additional pledged revenues as may be permitted by law. Section 28. Amendment of Resolution Requiring Consent. This Resolution may be amended from time to time if such amendment shall have been consented to by holders of not less than two-thirds in principal amount of the Note and Parity Obligations at any time outstanding (not including in any case any Note which may then be held or owned by or for the account of the Issuer, but including such Refunding Obligations as may have been issued for the purpose of refunding any of such Note if such Refunding Obligations shall not then be owned by the Issuer); but this Resolution may not be so amended in such manner as to: (a) Make any change in the maturity or interest rate of the Note, or modify the terms of payment of principal of or interest on the Note or impose any conditions with respect to such payment; (b) Materially affect the rights of the holders of less than all of the Note and Parity Obligations then outstanding; and (c) Reduce the percentage of the principal amount of Note, the consent of the holders of which is required to effect a further amendment. Whenever the Issuer shall propose to amend this Resolution under the provisions of this Section, it shall cause notice of the proposed amendment to be filed with the Original Purchaser and to be mailed by certified mail to each registered owner of any Note as shown by the records of the Registrar. Such notice shall set forth the nature of the proposed amendment and shall state that a copy of the proposed amendatory Resolution is on file in the office of the City Clerk. Whenever at any time within one year from the date of the mailing of said notice there shall be filed with the City Clerk an instrument or instruments executed by the holders of at least two-thirds in aggregate principal amount of the Note then outstanding as in this Section defined, which instrument or instruments shall refer to the proposed amendatory Resolution described in said notice and shall specifically consent to and approve the adoption thereof, thereupon, but not otherwise, the Governing Body of the Issuer may adopt such amendatory Resolution and such - 30 - Resolution shall become effective and binding upon the holders of all of the Note and Parity Obligations. Any consent given by the holder of the Note pursuant to the provisions of this Section shall be irrevocable for a period of six months from the date of the instrument evidencing such consent and shall be conclusive and binding upon all future holders of the same Note during such period. Such consent may be revoked at any time after six months from the date of such instrument by the holder who gave such consent or by a successor in title by filing notice of such revocation with the City Clerk. The fact and date of the execution of any instrument under the provisions of this Section may be proved by the certificate of any officer in any jurisdiction who by the laws thereof is authorized to take acknowledgments of deeds within such jurisdiction that the person signing such instrument acknowledged before him the execution thereof, or may be proved by an affidavit of a witness to such execution sworn to before such officer. The amount and numbers of the Note held by any person executing such instrument and the date of his holding the same may be proved by an affidavit by such person or by a certificate executed by an officer of a bank or trust company showing that on the date therein mentioned such person had on deposit with such bank or trust company the Note described in such certificate. Notwithstanding anything in this Section to the contrary, the holder or holders of 100% of the Note and Parity Obligations may consent to any amendment of this Resolution, or waive any notices required hereunder, on such terms and under such conditions as said holders shall determine to be appropriate. Section 29. Severability. If any section, paragraph, or provision of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions. Section 30. Repeal of Conflicting Ordinances or Resolutions and Effective Date. All other Ordinances, Resolutions and orders, or parts thereof, in conflict with the provisions of this Resolution are, to the extent of such conflict, hereby repealed; and this Resolution shall be in effect from and after its adoption. -31 - PASSED AND APPROVED this 5th day of August, 2024. ATTEST: DIGITALLY '' 11 G�.V..GIi i"F (., 121 SIGNED Nancy Higby, Deputy City Clerk Quemia »ir1 Quentin Hart, Mayor - 32 - CERTIFICATE STATE OF IOWA ) SS COUNTY OF BLACK HAWK I, the undersigned City Clerk of the City of Waterloo, State of Iowa, do hereby certify that attached is a true and complete copy of the portion of the records of the City showing proceedings of the Council, and the same is a true and complete copy of the action taken by the Council with respect to the matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty-four hours prior to the commencement of the meeting as required by law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective City offices as indicated therein, that no Council vacancy existed except as may be stated in the proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. 2024. WITNESS my hand and the seal of the Council hereto affixed this 5th day of August, Na. fr1 -I412"1 A Deputy City Clerk, City of Waterlo . , tate of Iowa 02379292\11310-163