HomeMy WebLinkAboutContinuing Covenant Agreement .
CONTINUING COVENANT AGREEMENT
dated as of December 30,2025,
between
CITY OF WATERLOO,IOWA,BY AND THROUGH ITS BOARD OF TRUSTEES OF THE MUNICIPAL
COMMUNICATIONS UTILITY,ALSO KNOWN AS WATERLOO FIBER
and
WESTERN ALLIANCE BUSINESS TRUST
relating to
$60,000,000
CITY OF WATERLOO,IOWA,BY AND THROUGH ITS BOARD OF TRUSTEES OF THE MUNICIPAL
COMMUNICATIONS UTILITY
COMMUNICATIONS UTILITY REVENUE CAPITAL LOAN NOTES,
SERIES 2025
4824-1504-7024.2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms 1
Section 1.02. Computation of Time Periods 7
Section 1.03. Construction 7
Section 1.04. Accounting Terms and Determinations 8
Section 1.05. Relation to Other Documents; Acknowledgment of Different
Provisions of Related Documents; Incorporation by Reference 8
ARTICLE II
PURCHASE OF NOTES
Section 2.01. Purchase of Notes 9
ARTICLE III
THE CITY'S OBLIGATIONS
Section 3.01. Payment Obligations 9
Section 3.02. Default Rate 10
Section 3.03. Determination of Taxability 10
Section 3.04. Maximum Interest Rate 11
Section 3.05. Increased Costs 11
Section 3.06. Taxes 12
Section 3.07. Obligations Absolute 12
ARTICLE IV
CONDITIONS PRECEDENT TO PURCHASE OF NOTES
Section 4.01. Conditions Precedent to Effective Date 13
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Existence and Power 14
Section 5.02. Due Authorization 15
Section 5.03. Valid and Binding Obligations 15
Section 5.04. Noncontravention; Compliance with Law 15
Section 5.05. Pending Litigation and Other Proceedings 16
Section 5.06. Financial Statements 16
Section 5.07. Employee Benefit Plan Compliance 16
Section 5.08. No Defaults 16
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Section 5.09. Insurance 16
Section 5.10. Title to Assets 16
Section 5.11. Correct Information 16
Section 5.12. Investment Company 17
Section 5.13. Margin Stock 17
Section 5.14. Tax-Exempt Status 17
Section 5.15. Usury 17
Section 5.16. Security 17
Section 5.17. Pending Legislation and Decisions 17
Section 5.18. Environmental Matters 18
Section 5.19. Sovereign Immunity 18
Section 5.20. No Public Vote or Referendum 18
Section 5.21. Anti-Money Laundering; Anti-Terrorism 18
ARTICLE VI
COVENANTS OF THE CITY REGARDING THE SYSTEM
Section 6.01. Existence, Etc 18
Section 6.02. Maintenance of Properties 19
Section 6.03. Compliance with Laws; Taxes and Assessments 19
Section 6.04. Insurance 19
Section 6.05. Reports 19
Section 6.06. Maintenance of Books and Records 20
Section 6.07. Access to Books and Records 21
Section 6.08. Compliance With Documents 21
Section 6.09. Rate Covenant 21
Section 6.10. Further Assurances 21
Section 6.11. No Impairment 22
Section 6.12. Application of Note Proceeds 22
Section 6.13. Limitation on Additional Debt 22
Section 6.14. Related Documents 22
Section 6.15. Liens 22
Section 6.16. Redemptions 22
Section 6.17. Other Agreements 22
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Section 6.18. Sovereign Immunity 23
Section 6.19. Swap Contracts 23
Section 6.20. Use of Bank's Name 23
Section 6.21. Maintenance of Tax-Exempt Status of Notes 23
Section 6.22. Environmental Laws 23
Section 6.23. Federal Reserve Board Regulations 23
Section 6.24. Use of Proceeds 24
Section 6.25. Government Regulation 24
Section 6.26. Alternate Financing 24
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default 24
Section 7.02. Consequences of an Event of Default 26
Section 7.03. Remedies Cumulative; Solely for the Benefit of Bank 27
Section 7.04. Waivers or Omissions 27
Section 7.05. Discontinuance of Proceedings 27
ARTICLE VIII
INDEMNIFICATION
Section 8.01. Indemnification 27
Section 8.02. Survival 28
ARTICLE IX
MISCELLANEOUS
Section 9.01. Patriot Act Notice 28
Section 9.02. Amendments and Waivers; Enforcement 28
Section 9.03. No Implied Waiver; Cumulative Remedies 28
Section 9.04. Notices 28
Section 9.05. No Third-Party Rights 29
Section 9.06. Severability 29
Section 9.07. Governing Law; Waiver of Jury Trial 29
Section 9.08. Prior Understandings 30
Section 9.09. Duration 30
Section 9.10. Counterparts 30
Section 9.11. Successors and Assigns 30
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Section 9.12. No Advisory or Fiduciary Responsibility 32
Section 9.13. Headings 32
Section 9.14. Electronic Signatures 32
Section 9.15. EMMA Postings 32
Section 9.16. Confidentiality 33
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CONTINUING COVENANT AGREEMENT
THIS CONTINUING COVENANT AGREEMENT, dated as of December 30, 2025 (as amended,
modified or restated from time to time, this "Agreement"), between the CITY OF WATERLOO, IOWA, BY
AND THROUGH ITS BOARD OF TRUSTEES OF THE MUNICIPAL COMMUNICATIONS UTILITY, ALSO KNOWN
AS WATERLOO FIBER, a body politic and corporate organized and existing under the laws of the State of
Iowa, and WESTERN ALLIANCE BUSINESS TRUST, a Delaware statutory trust, and a wholly owned
subsidiary of Western Alliance Bank.
RECITALS
WHEREAS, the City has issued its Communications Utility Revenue Capital Loan Notes, Series
2025 in an aggregate principal amount of$60,000,000 (the "Notes") pursuant to that certain resolution
adopted on December 22, 2025 (the "Resolution") by the Board of Trustees of the Municipal
Communications Utility of the City(the"Board of Trustees"); and
WHEREAS, the Bank(as defined herein) has agreed to purchase the Notes in accordance with the
terms hereof, and as a condition to such purchase of the Notes, the Bank has required the City to enter
into this Agreement.
Now, THEREFORE, to induce the Bank to purchase the Notes, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby,the City and the Bank hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. In addition to the terms defined in the recitals and
elsewhere in this Agreement,the following terms shall have the following meanings:
"1933 Act"means the Securities Act of 1933,as amended.
"Affiliate" means, with respect to any Person, any Person that directly or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common control with, such first Person.
A Person shall be deemed to control another Person for the purposes of this definition if such first Person
possesses, directly or indirectly, the power to direct, or cause the direction of, the management and
policies of the second Person, whether through the ownership of voting securities, common directors,
trustees or officers,by contract or otherwise.
"Agreement"has the meaning set forth in the introductory paragraph hereof.
"AML Party"has the meaning set forth in Section 5.21 hereof.
"AML Requirements"has the meaning set forth Section 5.21 hereof.
"Amortization Period"has the meaning set forth in Section 3.01(b)hereof.
"Applicable Law" means (a)all applicable common law and principles of equity and (b)all
applicable provisions of all (i)constitutions, statutes, rules, regulations and orders of all Governmental
Authorities, (ii)Governmental Approvals and (iii)orders, decisions, judgments, writs, injunctions and
decrees of all courts(whether at law or in equity)and arbitrators.
"Bank" means, initially, Western Alliance Business Trust, a Delaware statutory trust, and a
wholly owned subsidiary of Western Alliance Bank, and its successors and assigns, and upon the receipt
from time to time by the City of a notice described in Section 9.11(a)from time to time means the Person
designated in such notice as the Bank,as more fully provided in Section 9.11(a)hereof.
"Bank Affiliate" means the Bank and any Affiliate of the Bank, and includes, without limitation,
Western Alliance Bank,a national banking association.
"Bank Agreement" means any credit agreement, liquidity agreement, standby bond purchase
agreement, reimbursement agreement, direct purchase agreement, bond purchase agreement, or other
agreement or instrument (or any amendment, supplement or other modification thereof) under which,
directly or indirectly, any Person or Persons undertake(s) to make or provide funds to make payment of,
or to purchase or provide credit enhancement for bonds or notes of the City secured by or payable from
Net Revenues.
"Bank Transferee"has the meaning set forth in Section 9.11(b)hereof.
"Beneficial Ownership Certification" means the beneficial ownership certification provided by
the City or its Affiliate to the City prior to the Effective Date regarding the ownership of the City.
"Beneficial Ownership Regulation"has the meaning set forth in Section 9.01 hereof.
"Board of Trustees"has the meaning set forth in the recitals hereof.
"Bond Counsel" means Ahlers & Cooney, P.C., or any other firm of attorneys nationally
recognized on the subject of tax-exempt municipal finance selected by the City.
"Business Day" means a day which is not (a)a Saturday, Sunday or legal holiday on which
banking institutions in the City of Waterloo, Iowa or New York, New York or the states where the
principal corporate office of the City or the principal corporate office of the Bank is located are
authorized by law to close, (b)a day on which the New York Stock Exchange or the Federal Reserve
Bank is closed or(c)a day on which the principal office of the Bank is closed.
"Change in Law"means the occurrence, after the Effective Date,of any of the following: (a)the
adoption or taking effect of any Law, rule, regulation or treaty, (b)any change in any Law, rule,
regulation or treaty or in the administration, interpretation, implementation or application thereof by any
Governmental Authority or (c)the making or issuance of any request, rule, guideline or directive
(whether or not having the force of law) by any Governmental Authority; provided that notwithstanding
anything herein to the contrary, (i)the Dodd-Frank Wall Street Reform and Consumer Protection Act and
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all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii)all
requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision(or any successor or similar authority)or the United States or foreign
regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a "Change in
Law",regardless of the date enacted,adopted or issued.
"City"means the City of Waterloo, Iowa, by and through its Board of Trustees of the Municipal
Communications Utility, also known as Waterloo Fiber, acting solely for and on behalf of the System, a
body politic and corporate organized and existing under the laws of the State of Iowa, and any permitted
successor or assign thereof hereunder. For the avoidance of doubt, all references to the City in this
Agreement pertain to the portion of the City governed by the Board of Trustees of the Municipal
Communications Utility.
"City Representative"means any person authorized from time to time in writing by the City, or
its successors and assigns,to perform a designated act or execute a designated document.
"Code" means the Internal Revenue Code of 1986, as amended, and, where appropriate any
statutory predecessor or any successor thereto.
"Compliance Certificate"means a certificate substantially in form of Exhibit A hereto.
"Controlled Group" means all members of a controlled group of corporations and all trades or
businesses(whether or not incorporated)under common control which,together with the City, are treated
as a single employer under Section 414 of the Code.
"Confidential Information" means any sensitive or confidential information regarding the City,
the Bank or any Affiliate of the Bank including, without limitation, address and account information, e-
mail addresses, telephone numbers, facsimile numbers, names and signatures of officers, employees and
signatories.
"Debt" of any Person means at any date, without duplication, (a)all obligations of such Person
for borrowed money, (b)all obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (c)all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of business, (d)all obligations of
such Person as lessee under capital leases, (e)all Debt of others secured by a lien on any asset of such
Person,whether or not such Debt is assumed by such Person, (f)all Guarantees by such Person of Debt of
other Persons and(g)all obligations of such Person under any Swap Contract.
"Default" means any event or condition which, with notice, the passage of time or any
combination of the foregoing,would constitute an Event of Default.
"Default Rate" means, for any day, a rate of interest per annum equal to the sum of the interest
rate on the Notes in effect on such day plus five percent(5.00%).
"Determination of Taxability"has the meaning set forth in the Resolution.
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"Effective Date" means December 30, 2025, subject to the satisfaction or waiver by the Bank of
the conditions precedent set forth in Article IV hereof.
"EMMA" means Electronic Municipal Market Access as provided by the Municipal Securities
Rulemaking Board.
"Environmental Laws" means any and all federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including those related to hazardous
substances or wastes,air emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute of similar import,and regulations thereunder, in each case as in effect from time to time.
References to Sections of ERISA shall be construed also to refer to any successor Sections.
"Event of Default" with respect to this Agreement has the meaning set forth in Section 7.01 of
this Agreement and,with respect to any Related Document,has the meaning assigned therein.
"Excess Interest Amount"has the meaning set forth in Section 3.04 hereof.
"Fiscal Year" means the twelve-month period from January 1 through the following December
31.
"FRB" means the Board of Governors of the Federal Reserve System of the United States,
together with any successors thereof
"Generally Accepted Accounting Principles" or "GAAP" means generally accepted accounting
principles in effect from time to time in the United States and applicable to entities such as the City.
"Governmental Approval" means an authorization, consent, approval, permit, license, or an
exemption of,a registration or filing with,or a report to any Governmental Authority.
"Governmental Authority" means any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through stock or capital ownership
or otherwise,by any of the foregoing.
"Guarantee" means, as to any Person, any (a)any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any Debt or other obligation payable
or performable by another Person (the `primary obligor") in any manner, whether directly or indirectly,
and including any obligation of such Person, direct or indirect, (i)to purchase or pay (or advance or
supply funds for the purchase or payment of) such Debt or other obligation, (ii)to purchase or lease
property, securities or services for the purpose of assuring the obligee in respect of such Debt or other
obligation of the payment or performance of such Debt or other obligation, (iii)to maintain working
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capital, equity capital or any other financial statement condition or liquidity or level of income or cash
flow of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, or
(iv)entered into for the purpose of assuring in any other manner the obligee in respect of such Debt or
other obligation of the payment or performance thereof or to protect such obligee against loss in respect
thereof(in whole or in part), or (b)any Lien on any assets of such Person securing any Debt or other
obligation of any other Person, whether or not such Debt or other obligation is assumed by such Person
(or any right, contingent or otherwise, of any holder of such Debt to obtain any such Lien). The amount
of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the
related primary obligation,or portion thereof, in respect of which such Guarantee is made or, if not stated
or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term"Guarantee"as a verb has a corresponding meaning.
"Indemnitee"has the meaning set forth in Section 8.01 hereof.
"Law" means any treaty or any federal, regional, state and local law, statute, rule, ordinance,
regulation, code, license,authorization, decision,injunction,interpretation, order or decree of any court or
other Governmental Authority.
"Liabilities"has the meaning set forth in Section 8.01 hereof.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or
preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including
any conditional sale or other title retention agreement, any easement, right of way or other encumbrance
on title to real property, and any financing lease having substantially the same economic effect as any of
the foregoing).
"Loan Agreement" means that certain Loan Agreement dated the date hereof, between the City,
acting by and through its Board of Trustees,and the Bank.
"Majority Noteholder"means the Noteholders with a majority of the aggregate principal amount
of Notes from time to time. As of the Effective Date, Western Alliance Business Trust shall be the
Majority Noteholder.
"Mandatory Tender Date"has the meaning set forth in the Resolution.
"Margin Stock"has the meaning ascribed to such term in Regulation U promulgated by the FRB,
as now and hereafter from time to time in effect.
"Material Adverse Effect" means: (a)a material adverse change in, or a material adverse effect
upon, the operations, business, properties, actual liabilities, financial condition of the City; (b)a material
impairment of the ability of the City to perform its obligations under any Related Document to which it is
a party; or(c)a material adverse effect upon the legality, validity,binding effect or enforceability against
the City of any Related Document to which it is a party.
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"Maximum Interest Rate" means the maximum rate of interest on the relevant obligation
permitted by Applicable Law.
"Net Revenues"has the meaning assigned to such term in the Resolution.
"Non-Bank Transferee"has the meaning set forth in Section 9.11(c)hereof
"Noteholder" means the Bank and each Bank Transferee or Non-Bank Transferee pursuant to
Section 9.11 hereof so long as such Bank Transferee or Non-Bank Transferee is an owner of Notes.
"Notes"has the meaning set forth in the recitals hereof.
"Obligations" means all amounts payable by the City, and all other obligations to be performed
by the City, pursuant to this Agreement and the other Related Documents (including any amounts to
reimburse the Bank for any advances or expenditures by it under any of such documents).
"OFAC"has the meaning set forth in Section 5.21 hereof.
"Parity Debt" means any Debt of the City secured on a parity with, the Lien on Net Revenues
securing the payment of the principal of and interest on the Notes.
"Patriot Act" means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub.L. 107-56 (signed into law
October 26,2001).
"Person" means any natural person, any unincorporated association, any corporation, any
partnership, any joint venture, any trust, any limited liability company, any other legal entity, or any
Governmental Authority.
"Plan" means, with respect to the City at any time, an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code and either (i)is maintained, or has within the preceding five plan years been maintained, by a
member of the Controlled Group for employees of a member of the Controlled Group of which the City is
a part, (ii)is maintained pursuant to a collective bargaining agreement or any other arrangement under
which more than one employer makes contributions and to which a member of the Controlled Group of
which the City is a part is then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"Project"has the meaning set forth in the Resolution.
"Project Fund"has the meaning set forth in the Resolution.
"Property" means any interest in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, whether now owned or hereafter acquired.
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"Purchase Agreement" means that certain Purchase Agreement dated the date hereof, by the
Bank and accepted by the City by and through its Board of Trustees.
"Purchase Price"has the meaning set forth in Section 2.01(a)hereof.
"Related Documents"means this Agreement,the Resolution,the Notes,the Loan Agreement,the
Purchase Agreement and any exhibits, schedules, instruments or agreements relating thereto, as the same
may be amended,modified or supplemented in accordance with the terms thereof and hereof.
"Resolution"has the meaning set forth in the recitals hereof.
"SDNList"has the meaning set forth in Section 5.21 hereof.
"State"means the State of Iowa.
"Swap Contract" means (a)any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or
forward bond or forward bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options to enter into any of the
foregoing), whether or not any such transaction is governed by or subject to any master agreement, and
(b)any and all transactions of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the International Swaps and
Derivatives Association, Inc.,any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a "Master Agreement"),
including any such obligations or liabilities under any Master Agreement.
"System"has the meaning assigned to such term in the Resolution.
"Taxable Date"has the meaning set forth in the Resolution.
"Taxable Period"has the meaning set forth in Section 3.03 hereof.
"Taxable Rate"has the meaning set forth in the Resolution.
Section 1.02. Computation of Time Periods. In this Agreement, 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
the words"to"and"until"each mean"to but excluding."
Section 1.03. Construction. Unless the context of this Agreement otherwise clearly requires,
references to the plural include the singular, to the singular include the plural and to the part include the
whole. The word "including" shall be deemed to mean "including but not limited to," and "or" has the
inclusive meaning represented by the phrase "and/or." The words "hereof," "herein," "hereunder" and
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similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of
this Agreement. The Section headings contained in this Agreement and the table of contents preceding
this Agreement are for reference purposes only and shall not control or affect the construction of this
Agreement or the interpretation thereof in any respect. Section, subsection and exhibit references are to
this Agreement unless otherwise specified.
Section 1.04. Accounting Terms and Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made,
and all financial statements required to be delivered hereunder shall be prepared, in accordance with
GAAP. If, after the Effective Date, there shall occur any change in GAAP from those used in the
preparation of the financial statements referred to in Section 6.05 hereof and such change shall result in a
change in the method of calculation of any financial covenant, standard or term found in this Agreement
including, without limitation, a recharacterization of operating leases to the effect that certain operating
leases are to be treated as capital leases, either the City or the Bank may by notice to the other party
hereto,require that the Bank and the City negotiate in good faith to amend such covenants, standards, and
terms so as equitably to reflect such change in accounting principles,with the desired result being that the
criteria for evaluating the financial condition of the City shall be the same as if such change had not been
made. No delay by the City or the Bank in requiring such negotiation shall limit their right to so require
such a negotiation at any time after such a change in accounting principles. Until any such covenant,
standard, or term is amended in accordance with this Section 1.04, financial covenants shall be computed
and determined in accordance with GAAP in effect prior to such change in accounting principles.
Section 1.05. Relation to Other Documents; Acknowledgment of Different Provisions of
Related Documents; Incorporation by Reference. (a) Nothing in this Agreement shall be deemed to
amend, or relieve the City of its obligations under, any Related Document to which it is a party.
Conversely, to the extent that the provisions of any Related Document, other than the Resolution, allow
the City to take certain actions, or not to take certain actions, with regard for example to permitted liens,
transfers of assets, maintenance of financial ratios and similar matters,the City nevertheless shall be fully
bound by the provisions of this Agreement.
(b) Except as provided in subsection(c) of this Section 1.05, all references to other
documents shall be deemed to include all amendments, modifications and supplements thereto to
the extent such amendment, modification or supplement is made in accordance with the
provisions of such document and this Agreement.
(c) All provisions of this Agreement making reference to specific Sections of any
Related Document shall be deemed to incorporate such Sections into this Agreement by reference
as though specifically set forth herein (with such changes and modifications as may be herein
provided) and shall continue in full force and effect with respect to this Agreement
notwithstanding payment of all amounts due under or secured by the Related Documents, the
termination or defeasance thereof or any amendment thereto or any waiver given in connection
therewith, so long as this Agreement is in effect and until all Obligations are paid in full. No
amendment, modification, consent, waiver or termination with respect to any of such Sections
shall be effective as to this Agreement until specifically agreed to in writing by the parties hereto
with specific reference to this Agreement.
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For the avoidance of doubt,this Agreement is intended to supplement the Resolution; nothing in
this Agreement shall override the terms of the Resolution;to the extent possible,this Agreement
and the Resolution shall be interpreted to give full force and effect to all terms of this Agreement
and the Resolution; and the terms of the Resolution shall control in the event of any
inconsistency between terms of this Agreement and the Resolution.
ARTICLE II
PURCHASE OF NOTES
Section 2.01. Purchase of Notes.
(a) Purchase Price. Upon the conditions set forth in Article IV hereof and based on
the representations, warranties and covenants of the City set forth herein,the Bank hereby agrees
to purchase from the City and the City hereby agrees to sell to the Bank, all, but not less than all,
of the Notes at par as set forth in the Purchase Agreement(such principal amount of the Notes set
forth therein,the"Purchase Price").
(b) Closing. On the Effective Date, the City shall deliver to the Bank the documents
described in Section 4.01 hereof. Upon delivery of such documents and the satisfaction or waiver
by the Bank of the conditions precedent set forth in Section 4.01 hereof,the Bank will pay the full
Purchase Price for the Notes in immediately available federal funds payable to the City. One
fully registered Note, in the aggregate principal amount equal to the Purchase Price, shall be
issued to and registered in the name of the Bank,or as otherwise directed by the Bank. The Notes
shall be so issued and registered to and held by the Bank,or as otherwise directed by the Bank.
ARTICLE III
THE CITY'S OBLIGATIONS
Section 3.01. Payment Obligations. (a) The City hereby unconditionally, irrevocably and
absolutely agrees to make prompt and full payment of all payment obligations owed to the Bank under the
Related Documents and to pay any other monetary Obligations owing to the Bank whether now existing
or hereafter arising, irrespective of their nature, whether direct or indirect, absolute or contingent, with
interest thereon at the rate or rates provided in such Related Documents and under such Obligations;
provided, however, that all such payment obligations and any other monetary Obligations are payable
solely from Net Revenues as provided in the Resolution, and are not general obligations of the City of
Waterloo,Iowa.
(b) [Intentionally Omitted].
(c) The City shall pay within thirty(30)days after demand:
(i) if an Event of Default shall have occurred, all costs and expenses of the
Bank in connection with the enforcement (whether by means of legal proceedings or
otherwise) of any of its rights under this Agreement, the other Related Documents and
such other documents which may be delivered in connection therewith;
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(ii) a fee for each amendment to this Agreement or any other Related
Document or any consent or waiver by the Bank with respect to any Related Document,
in each case, in a minimum amount of$2,500 plus the reasonable fees and expenses of
counsel to the Bank;
(iii) the reasonable fees and out-of-pocket expenses for counsel or other
reasonably required consultants to the Bank in connection with advising the Bank as to its
rights and responsibilities under this Agreement and the other Related Documents or in
connection with responding to requests from the City for approvals, consents and
waivers;and
(iv) any amounts advanced by or on behalf of the Bank to the extent required
to cure any Default, Event of Default or event of nonperformance hereunder or any
Related Document,together with interest at the Default Rate.
In addition, if at any time any Governmental Authority shall require revenue or other
documentary stamps or any other tax in connection with the execution or delivery of this
Agreement or other Related Documents,then, if the City lawfully may pay for such stamps,taxes
or fees, the City shall pay, when due and payable, for all such stamps, taxes and fees, including
interest and penalties thereon,and the City agrees to save the Bank harmless from and against any
and all liabilities with respect to or resulting from any delay of the City in paying, or omission of
the City to pay,such stamps,taxes and fees hereunder.
Section 3.02. Default Rate. Upon the occurrence and during the continuance of an Event of
Default, the Obligations of the City hereunder shall bear interest at the Default Rate, which shall be
payable by the City to each Noteholder (or, if applicable, the Bank) upon demand therefor and be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
Section 3.03. Determination of Taxability.
(a) In the event a Determination of Taxability occurs,to the extent not payable to the
Bank or any other Noteholder under the terms of the Resolution and the Notes, the City hereby
agrees to pay to the Bank or any other Noteholder on demand therefor(i)an amount equal to the
difference between(A)the amount of interest that would have been paid to the Bank or any other
Noteholder on the Notes during the period for which interest on the Notes is included in the gross
income of the Bank or any other Noteholder if the Notes had borne interest at the Taxable Rate,
beginning on the Taxable Date (the "Taxable Period"), and (B)the amount of interest actually
paid to the Bank or any other Noteholder during the Taxable Period, and(ii)an amount equal to
any interest,penalties or charges owed by the Bank or any other Noteholder as a result of interest
on the Notes becoming included in the gross income of the Bank or any other Noteholder,
together with any and all attorneys' fees, court costs, or other out-of-pocket costs incurred by the
Bank or any other Noteholder in connection therewith;
(b) Subject to the provisions of paragraph (c) below, the Bank or any other
Noteholder shall afford the City the opportunity, at the City's sole cost and expense, to contest
(i)the validity of any amendment to the Code which causes the interest on the Notes to be
included in the gross income of the Bank or any other Noteholder or (ii)any challenge to the
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validity of the tax exemption with respect to the interest on the Notes, including the right to direct
the necessary litigation contesting such challenge (including administrative audit appeals);
provided that, in no event shall a Noteholder be required to make available its tax returns(or any
other information relating to its taxes that it deems confidential)to the City or any other Person;
and
(c) As a condition precedent to the exercise by the City of its right to contest set
forth in paragraph (b) above,the City shall, on demand, immediately reimburse the Bank or any
other Noteholder for any and all expenses (including attorneys' fees for services that may be
required or desirable, as determined by the Bank or any other Noteholder in its sole discretion)
that may be incurred by the Bank or any other Noteholder in connection with any such contest,
and shall, on demand, immediately reimburse the Bank or any other Noteholder for any and all
penalties or other charges payable by the Bank or any other Noteholder for failure to include such
interest in its gross income.
(d) Survival. Without prejudice to the survival of any other agreement of the City
hereunder, the agreements and obligations of the City contained in this Section shall survive the
termination of this Agreement and the payment in full of the Notes and the obligations of the City
thereunder and hereunder.
Section 3.04. Maximum Interest Rate. (a) If the amount of interest payable for any period in
accordance with the terms hereof or the Notes exceeds the amount of interest that would be payable for
such period had interest for such period been calculated at the Maximum Interest Rate, then interest for
such period shall be payable in an amount calculated at the Maximum Interest Rate.
(b) Any interest that would have been due and payable for any period but for the
operation of the immediately preceding paragraph(a) shall accrue and be payable as provided in
this paragraph(b) and shall, less interest actually paid to each Noteholder for such period,
constitute the "Excess Interest Amount." If there is any accrued and unpaid Excess Interest
Amount as of any date,then the principal amount with respect to which interest is payable shall
bear interest at the Maximum Interest Rate until payment to each Noteholder of the entire Excess
Interest Amount.
(c) Notwithstanding the foregoing, on the date on which no principal amount with
respect to the Notes remains unpaid, the City shall pay to each Noteholder a fee equal to any
accrued and unpaid Excess Interest Amount.
Section 3.05. Increased Costs.
(a) Capital Requirements. If the Bank determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return on the Bank's or
the Noteholder's capital or on the capital of Bank's or the Noteholder's holding company, if any,
as a consequence of this Agreement or ownership of the Notes to a level below that which the
Bank or the Noteholder or the Bank's or the Noteholder's holding company could have achieved
but for such Change in Law (taking into consideration the Bank's or the Noteholder's policies
with respect to capital adequacy), then from time to time upon written request of.the Bank as
provided in subsection (b) the City will pay to the Bank or the Noteholder, as the case may be,
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such additional amount or amounts as will compensate the Bank or the Noteholder or the Bank's
or the Noteholder's holding company for any such reduction suffered.
(b) Bank's Certificate. A certificate of the Bank or any Noteholder setting forth in
reasonable detail, including the basis for and the calculation of,the amount or amounts necessary
to compensate the Bank or any such Noteholder or the Bank's or any such Noteholder's holding
company, as the case may be, as specified in this Section shall be delivered to the City and shall
be conclusive absent manifest error. The City shall pay the Bank or any such Noteholder, as the
case may be,the amount shown as due on any such certificate within thirty(30)days after receipt
thereof.
(c) No Waiver. Failure or delay on the part of the Bank or any such Noteholder to
demand compensation pursuant to this Section shall not constitute a waiver of the Bank's or any
such Noteholder's right to demand such compensation; provided that the City shall not be
required to compensate the Bank or any such Noteholder pursuant to this Section for any
increased costs incurred or reductions suffered more than one hundred eighty (180) days prior to
the date that the Bank or any such Noteholder, as the case may be, notifies the City of the Change
in Law giving rise to such increased costs or reductions, and of the Bank's or any such
Noteholder's intention to claim compensation therefor;provided,further that, if the Change in
Law giving rise to such increased costs or reductions is retroactive, then the one hundred eighty
(180) day period referred to above shall be extended to include the period of retroactive effect
thereof).
Section 3.06.Taxes. If any payments to the Bank under this Agreement are made from outside
the United States, the City will not deduct any foreign taxes from any payments it makes to the Bank. If
any such taxes are imposed on any payments made by the City (including payments under this
paragraph), the City will pay the taxes and will also pay to the Bank, at the time interest is paid, any
additional amount which the Bank specifies as necessary to preserve the after-tax yield the Bank would
have received if such taxes had not been imposed. The City will confirm that it has paid the taxes by
giving the Bank official tax receipts(or notarized copies)within thirty(30)days after the due date.
Section 3.07. Obligations Absolute. The payment obligations of the City under this Agreement
shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances,including without limitation the following:
(a) any lack of validity or enforceability of this Agreement, the Notes or any of the
other Related Documents;
(b) any amendment or waiver of or any consent to departure from all or any of the
Related Documents;
(c) the existence of any claim, set-off, defense or other right which the City may
have at any time against the Bank, any other Noteholder or any other person or entity, whether in
connection with this Agreement, the other Related Documents, the transactions contemplated
herein or therein or any unrelated transaction;or
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(d) any other circumstance or happening whatsoever, whether or not similar to any
of the foregoing.
Notwithstanding this Section, the Bank acknowledges the City may have the right to bring a collateral
action with respect to one or more of the foregoing circumstances. The City's payment obligations shall
remain in full force and effect pending the final disposition of any such action. All fees payable pursuant
to this Agreement shall be deemed to be fully earned when due and non-refundable when paid.
ARTICLE IV
CONDITIONS PRECEDENT TO PURCHASE OF NOTES
Section 4.01. Conditions Precedent to Effective Date. The obligation of the Bank to purchase
the Notes is subject to the conditions precedent that the Bank shall have received, on or before the
Effective Date, the items listed below in this Section, each dated and in form and substance as is
satisfactory to the Bank.
(a) The following documents of the City:
(i) copies of the resolutions of the Board of Trustees approving the
execution and delivery of the Related Documents to which the City is a party, approving
the form of the Related Documents to which it is not a party and the other matters
contemplated hereby, certified by a City Representative as being true and complete and in
full force and effect on the Effective Date; and
(ii) a certificate dated the Effective Date and executed by a City
Representative certifying the names and signatures of the persons authorized to sign, on
behalf of the City,the Related Documents to which it is a party and the other documents
to be delivered by it hereunder or thereunder.
(b) An executed original or certified copy, as applicable, of each of the Related
Documents.
(c) The following opinions,dated the Effective Date and addressed to the Bank or on
which the Bank is otherwise expressly authorized to rely:
(i) from Bond Counsel, opinions as to the due authorization, execution,
delivery and enforceability of this Agreement, the Resolution, the Notes, and the Loan
Agreement,and such other customary matters as the Bank may reasonably request; and
(ii) from Bond Counsel, opinions to the effect that the interest on the Notes
is excludable from gross income for federal income tax purposes and such other
customary matters as the Bank may reasonable request.
(d) The following documents and other information:
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(i) a certificate dated the Effective Date and executed by a City
Representative certifying(A)that there has been no event or circumstance since June 30,
2025, that has had or could be reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect, (B)that the representations and warranties
contained in Article V hereof and the other Related Documents are true and correct in all
material respects on the Effective Date and (C)no event has occurred and is continuing,
or would result from entry into this Agreement, which would constitute a Default or
Event of Default; and
(ii) true and correct copies of all Governmental Approvals, if any, necessary
for the City to execute,deliver and perform the Related Documents to which it is a party.
(e) Certification that no controversy or litigation is pending, prayed or threatened
involving the incorporation, organization, existence or boundaries of the City, or the validity of
the Notes or any other Related Document, or the pledge of the Project Fund,to the payment of the
Notes or the power and duty of the City to construct, own and operate the System as a revenue
producing undertaking and to provide,charge and apply adequate rates and charges,and that none
of the proceedings or authority for the issuance of the Notes has been repealed, revoked,
rescinded,or modified in any manner.
(f) (i) The Bank shall have received reimbursement of the Bank's fees and
expenses and any other fees incurred in connection with the transaction contemplated by the
Related Documents.
(ii) The Bank shall have received the fee set forth in Section 9 of the Loan
Agreement.
(g) All other legal matters pertaining to the execution and delivery of this
Agreement and the Related Documents shall be satisfactory to the Bank and its counsel, and the
Bank shall have received such other statements, certificates, agreements, documents and
information with respect to the City and the other parties to the Related Documents and matters
contemplated by this Agreement as the Bank may reasonably request.
(h) The Notes shall not be (i)assigned a specific rating by any rating agency,
(ii)registered with The Depository Trust Company or any other securities depository, (iii)issued
pursuant to any type of official statement, private placement memorandum or other offering
document or (iv) placed or offered by a broker-dealer in the capacity of an underwriter or a
placement agent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The City makes the following representations and warranties to each Noteholder:
Section 5.01. Existence and Power. The System is owned, operated and managed by the City.
The City (a) is a municipal corporation and political subdivision duly organized and validly existing
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under the laws of the State; (b) has all powers and all material governmental licenses, authorizations,
consents, and approvals required to carry on its business as now conducted and to own and operate the
System; and (c) has full legal right, power and authority to adopt, executed, deliver and perform its
obligations, as applicable under this Agreement, the Notes, the Resolution and the other Related
Documents.
Section 5.02. Due Authorization. (a) The City has the corporate power, and has taken all
necessary corporate action to authorize the Related Documents to which it is a party, and to execute,
deliver and perform its obligations under this Agreement and each of the other Related Documents to
which it is a party in accordance with their respective terms. The City has approved the form of the
Related Documents to which it is not a party.
(b) The City is duly authorized and licensed to own its Property comprising the
System and to operate its business under the laws, rulings, regulations and ordinances of all
Governmental Authorities having the jurisdiction to license or regulate such Property or business
activity and the departments, agencies and political subdivisions thereof, and the City has
obtained all requisite approvals of all such governing bodies required to be obtained for such
purposes. All Governmental Approvals necessary for the City to enter into this Agreement and
the other Related Documents and to perform the transactions contemplated hereby and thereby
and to conduct its business activities and own its property comprising the System have been
obtained and remain in full force and effect and are subject to no further administrative or judicial
review. No other Governmental Approval or other action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery and performance by the City
of this Agreement or the due execution, delivery or performance by the City of the Related
Documents.
Section 5.03. Valid and Binding Obligations. This Agreement has been duly executed and
delivered by one or more duly authorized officers of the City, and each of the Related Documents to
which the City is a party, when executed and delivered by the City will be, a legal, valid and binding
obligation of the City enforceable in accordance with its terms, except as such enforceability may be
limited by (a)the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar
law affecting creditors' rights generally, and (b)general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 5.04. Noncontravention; Compliance with Law. (a) The execution, delivery and
performance of this Agreement and each of the other Related Documents in accordance with their
respective terms do not and will not (i)contravene the City's authorizing legislation, (ii)require any
consent or approval of any creditor of the City, (iii)violate any Laws (including, without limitation,
Regulations T,U or X of the FRB,or any successor regulations),(iv)conflict with,result in a breach of or
constitute a default under any contract to which the City is a party or by which it or any of its Property
comprising the System may be bound or (v)result in or require the creation or imposition of any Lien
upon or with respect to any Property comprising the System now owned or hereafter acquired by the City
or any Affiliate thereof except such Liens, if any,expressly created by a Related Document.
(b) The City is in compliance with all Laws, except for such noncompliance that,
singly or in the aggregate, has not caused or is not reasonably expected to cause a Material
Adverse Effect.
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Section 5.05. Pending Litigation and Other Proceedings. There is no action, suit or
proceeding pending in any court, any other governmental authority with jurisdiction over the City or any
arbitration in which service of process has been completed against the City or, to the knowledge of the
City, any other action, suit or proceeding pending or threatened in any court, any other governmental
authority with jurisdiction over the City or any arbitrator, in either case against the City and the System or
any of its properties or revenues, or any of the Related Documents to which it is a party, which if
determined adversely to the City would adversely affect the rights, security, interests or remedies of the
Bank hereunder or under any of the other Related Documents or which is reasonably likely to result in a
Material Adverse Effect, except any action, suit or proceeding which has been brought prior to the
Effective Date as to which the Bank has received an opinion of counsel satisfactory to the Bank, in form
and substance satisfactory to the Bank and the Bank's legal counsel, to the effect that such action, suit or
proceeding is without substantial merit.
Section 5.06. Financial Statements. The materials concerning the System heretofore furnished
to the Bank fairly present the financial condition of the System in all material respects as of the date of
such materials. Since the Fiscal Year of the System most recently concluded, there has been no material
adverse change in the financial condition or operations of the System.
Section 5.07. Employee Benefit Plan Compliance. The City has no funding liability or
obligation currently due and payable with respect to any employee benefit plan which could reasonably
be expected to result in a Material Adverse Effect. The City and each employee benefit plan is in
compliance in all material respects with the terms of any such plan and applicable law related thereto.
Neither the City nor a member of the Controlled Group is subject to ERISA or maintains a Plan.
Section 5.08. No Defaults. No default by the City has occurred and is continuing in the payment
of the principal of or premium, if any, or interest on any Parity Debt. No bankruptcy, insolvency or other
similar proceedings pertaining to the City or any agency or instrumentality of the City are pending or
presently contemplated. No Default or Event of Default has occurred and is continuing hereunder.
No "default" or "event of default" under, and as defined in, any of the other Related Documents has
occurred and is continuing. The City is not presently in default under any material agreement to
which it is a party which could reasonably be expected to have a Material Adverse Effect. The City is not
in violation of any material term of the authorizing legislation applicable to the City or any material term
of any bond indenture or agreement to which it is a party or by which any of its Property comprising the
System is bound which could reasonably be expected to result in a Material Adverse Effect.
Section 5.09. Insurance. The City currently maintains insurance on the System of such type and
in such amounts or in excess of such amounts as are customarily carried by,and insures against such risks
as are customarily insured against by,public agencies with similar public utility systems.
Section 5.10. Title to Assets. The City has good and marketable title to the properties and assets
comprising the System, except where the failure to have good and marketable title to any of its properties
and assets would not have a Material Adverse Effect.
Section 5.11. Correct Information. All information, reports and other papers and data with
respect to the System furnished by the City to the Bank were, at the time the same were so furnished,
correct in all material respects. Any financial, budget and other projections furnished by the City to the
Bank were prepared in good faith on the basis of the assumptions stated therein, which assumptions were
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fair and reasonable in light of conditions existing at the time of delivery of such financial, budget or other
projections,and represented, and as of the date of this representation,represent(subject to the updating or
supplementation of any such financial, budget or other projections by any additional information provided
to the Bank in writing,the representations contained in this Agreement being limited to financial, budget
or other projections as so updated or supplemented), in the judgment of the City, a reasonable,good faith
estimate of the information purported to be set forth, it being understood that uncertainty is inherent in
any projections and that no assurance can be given that the results set forth in the projections will actually
be obtained. No fact is known to the City that materially and adversely affects or in the future may(as far
as it can reasonably foresee) materially and adversely affect the security for any of the Notes, or the
ability of the City to repay when due the Obligations, that has not been set forth in the financial
statements and other documents referred to in this Section 5.11 or in such information,reports,papers and
data or otherwise disclosed in writing to the Bank. The documents furnished and statements made by the
City in connection with the negotiation, preparation or execution of this Agreement and the Related
Documents do not contain untrue statements of material facts or omit to state material facts necessary to
make the statements contained therein, in light of the circumstances under which they were made, not
misleading.
Section 5.12. Investment Company. The City is not an "investment company" or a company
"controlled" by an "investment company," as such terms are defined in the Investment Company Act of
1940,as amended.
Section 5.13. Margin Stock The City is not engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and no part of the proceeds from the issuance of the
Notes will be used to purchase or carry any such Margin Stock or extend credit to others for the purpose
of purchasing or carrying any such Margin Stock.
Section 5.14. Tax-Exempt Status. The City has not taken any action or omitted to take any
action, and has no actual knowledge of any action taken or omitted to be taken by any other Person,
which action,if taken or omitted,would adversely affect the exclusion of interest on the Notes from gross
income for federal income tax purposes.
Section 5.15. Usury. None of the Related Documents or the Notes provide for any payments
that would violate any applicable law regarding permissible maximum rates of interest.
Section 5.16. Security. The Resolution creates, for the benefit of the owners of the Notes, the
legally valid, binding and irrevocable Lien on and pledge of Net Revenues as provided in the Resolution.
There is no Lien on Net Revenues other than the lien created by the Resolution. The Resolution does not
permit the issuance or incurrence of any Debt secured by the Net Revenues to rank senior to the Notes.
The payment of the Notes ranks on a parity with the payment of the principal and purchase price of and
interest on all Parity Debt and is not subordinate to any payment secured by a Lien on Net Revenues.No
filing, registration, recording or publication of the Resolution or any other instrument is required to
establish the pledge provided for thereunder or to perfect, protect or maintain the Lien created thereby on
the Net Revenues to secure the Notes.
Section 5.17. Pending Legislation and Decisions. There is no amendment, or to the knowledge
of the City, proposed amendment to the Constitution of the State or any State law or any administrative
interpretation of the Constitution of the State or any State law, or any legislation that has passed either
17
house of the legislature of the State, or any judicial decision interpreting any of the foregoing, the effect
of which will materially adversely affect the issuance of any of the Notes, the security for any of the
Notes or any Obligation, the creation, organization, or existence of the City or the titles to office of any
officers executing this Agreement or any Related Documents to which the City is a party or the City's
ability to repay when due its obligations under this Agreement,any of the Notes or any other Obligation.
Section 5.18. Environmental Matters. The operations of the City related to the System are in
material compliance with all of the requirements of applicable federal, state and local environmental,
health and safety statutes and regulations and are not the subject of any governmental investigation
evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste
or substance into the environment, where a failure to comply with any such requirement or the need for
any such remedial action could reasonably be expected to result in a Material Adverse Effect.
Section 5.19. Sovereign Immunity. The defense of immunity on the grounds of sovereignty or
otherwise is not available to the City in any proceeding by the Bank to enforce the Obligations or the
performance of any obligations of the City under this Agreement, the Resolution, the Notes or the other
Related Documents.
Section 5.20. No Public Vote or Referendum. There is no public vote or referendum pending,
proposed or concluded, the results of which could reasonably be expected result in a Material Adverse
Effect.
Section 5.21. Anti-Money Laundering; Anti-Terrorism. The City (an "AML Party") is and
will remain in compliance with the following(collectively,the "AML Requirements"): all U.S. economic
sanctions laws and executive orders; all regulations promulgated by the U.S. Office of Foreign Assets
Control ("OFAC"); and all applicable anti-money laundering and counter-terrorism provisions of the
Bank Secrecy Act, the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56, and all rules and regulations issued pursuant
to such laws, including those relating to "know your customer", anti-money laundering, and anti-
terrorism. No AML Party is or will become a Person (a) included by OFAC on the list of Specially
Designated Nationals and Blocked Persons (the "SDN List") or who is otherwise the target of U.S.
economic sanctions laws, such that, in either case, a U.S. Person cannot engage in business transactions
with such Person; or (b) that is controlled by, or acting, directly or indirectly, for or on behalf of, any
Person on the SDN List or a foreign government that is the target of U.S. economic sanctions
prohibitions, such that entry into or performance under any Related Document would violate Applicable
Law.
ARTICLE VI
COVENANTS OF THE CITY REGARDING THE SYSTEM
The City covenants and agrees, until the full and final payment and satisfaction of all of the
Obligations, except in any instance in which the Bank specially agrees in writing to any performance or
noncompliance,that:
Section 6.01. Existence, Etc. The City (a) shall maintain its rights, franchises and privileges
material to the operation of the System, other than video services and related aspects of the business of
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the System, (b) shall maintain its ownership of the System, (c) shall not liquidate or dissolve, or sell or
lease or otherwise transfer or dispose of all or any substantial part of the property, assets or business of
the System, other than video services and related aspects of the business of the System, and (d) shall not
combine, merge or consolidate with or into any other entity or change the use of facilities or assets that
generate Net Revenues.
Section 6.02. Maintenance of Properties. The City shall, in all material respects, maintain,
preserve and keep its Property comprising the System in good repair, working order and condition
(ordinary wear and tear excepted), except to the extent that the failure to do so could reasonably be
expected to result in a Material Adverse Effect.
Section 6.03. Compliance with Laws; Taxes and Assessments. The City shall comply,with all
Laws applicable to it and its Property comprising the System (including all applicable Environmental
Laws and AML Requirements), except where non compliance could not reasonably be expected to result
in a Material Adverse Effect, such compliance to include, without limitation, paying all taxes,
assessments and governmental charges imposed upon it or such Property before the same become
delinquent, unless and to the extent that the same are being contested in good faith and by appropriate
proceedings and reserves are provided therefor that in the opinion of the City are adequate.
Section 6.04. Insurance. The City shall maintain insurance with reputable insurance companies
or associations(or a system of self-insurance)with respect to the Property comprising the System in such
amounts and covering such risks as are usually carried by organizations engaged in the same or a similar
business and similarly situated, which insurance may provide for reasonable deductibles from coverage.
The City shall upon request of the Bank furnish a certificate setting forth in summary form the nature and
extent of the insurance maintained pursuant to this Section 6.04.
Section 6.05. Reports. The City shall furnish to the Bank in form and detail satisfactory to the
Bank:
(a) Annual Report. As soon as available, and in any event within 270 days after the
end of the Fiscal Year, the annual audited financial statements of the System, which includes the
annual financial statements of the System, together with (1)the opinion of the System's
independent accountants and(2)a Compliance Certificate signed by a City Representative stating
that no Event of Default or Default has occurred, or if such Event of Default or Default has
occurred, specifying the nature of such Event of Default or Default, the period of its existence,
the nature and status thereof and any remedial steps taken or proposed to correct such Event of
Default or Default.
(b) Budget. As soon as available, and in any event within 45 days following the
approval thereof,the operating budget of the System.
(c) Offering Memorandum and Material Event Notices. (A) Within ten (10) days
after the issuance of any securities by the City with respect to which a final official statement or
other offering or disclosure document has been prepared by the City, (1) a copy of such official
statement or offering circular or(2) notice that such information has been filed with EMMA and
is publicly available; and (B) during any period of time the City is subject to continuing
disclosure requirements under Rule 15c2-12 promulgated pursuant to the Securities Exchange
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Act of 1934, as amended (17 C.F.R. Sec. 240-15c2-12), or any successor or similar legal
requirement, immediately following any dissemination, distribution or provision thereof to any
Person, (1) a copy of any reportable event notice (as described in b(5)(i)(C) of Rule 15c2-12)
disseminated, distributed or provided in satisfaction of or as may be required pursuant to such
requirements or (2) notice that such event notice has been filed with EMMA and is publicly
available.
(d) Monthly Reports Pertaining to the Project and the Project Fund. As soon as
available, and in any event within 15 days following the end of each calendar month, a report
containing a narrative summary of construction progress on the Project during the preceding
month, the status of the overall project schedule and budget compared to the baseline cost, an
updated project schedule outlining construction completed, construction in progress, and
remaining construction to complete the Project. Such report shall include the total budget and
remaining expenditures to complete the Project, amounts spent on the Project during the
immediately preceding month, amounts drawn from the Project Fund during the immediately
preceding month and the use thereof, amounts deposited into the Project Fund during the
immediately preceding month and the source thereof, the balance of the Project Fund as of the
end of the immediately preceding month, a variance analysis showing the original construction
budget vs. the current budget, a summary of change orders, environmental issues and changes to
the City's general contractor for completion of the Project. Such report shall be substantially in
the form of Exhibit B hereto.
(e) Notice of Default or Event of Default. (i)Promptly upon obtaining actual
knowledge of any Default or Event of Default, or notice thereof, and in any event within ten(10)
Business Days thereafter, a certificate signed by a City Representative specifying in reasonable
detail the nature and period of existence thereof and what action the City has taken or proposes to
take with respect thereto; (ii)promptly following a written request of the Bank, a certificate of a
City Representative as to the existence or absence, as the case may be, of a Default or an Event of
Default under this Agreement; and (iii) promptly upon obtaining knowledge of any "default" or
"event of default" as defined under any Bank Agreement, notice specifying in reasonable detail
the nature and period of existence thereof and what action the City has taken or proposes to take
with respect thereto.
(f) Litigation. As promptly as practicable, written notice to the Bank of all actions,
suits or proceedings pending or threatened against the City with respect to the System in court or
before any arbitrator of any kind or before any governmental authority which could reasonably be
expected to result in a Material Adverse Effect.
(g) Other Information. Such other information regarding the business affairs,
financial condition and/or operations of the City with respect to the System as the Bank may from
time to time reasonably request.
Section 6.06. Maintenance of Books and Records. The City will keep proper books of record
and account in which full,true and correct entries in accordance with GAAP. All financial data(including
financial ratios and other financial calculations)required to be submitted pursuant to this Agreement shall
be prepared in conformity with GAAP applied on a consistent basis, as in effect from time to time,
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applied in a manner consistent with that used in preparing the financial statements, except as otherwise
specifically prescribed herein.
Section 6.07. Access to Books and Records. To the extent permitted by law, the City will
permit any Person designated by the Bank(at the expense of the Bank,unless and until a Default or Event
of Default has occurred,at which time such expenses shall be borne by the City)to visit any of the offices
of the City to examine the books and financial records (except books and financial records the
examination of which by the Bank is prohibited by law or by attorney or client privilege), including
minutes of meetings of any relevant governmental committees or agencies, and make copies thereof or
extracts therefrom, and to discuss the affairs, finances and accounts of the System with their principal
officials, all at such reasonable times and as often as the Bank may reasonably request.
Section 6.08. Compliance With Documents. The City agrees that it will perform and comply
with each and every covenant and agreement required to be performed or observed by it in the Resolution
and each of the other Related Documents to which it is a party, which provisions, as well as related
defined terms contained therein, are hereby incorporated by reference herein with the same effect as if
each and every such provision were set forth herein in its entirety all of which shall be deemed to be made
for the benefit of the Bank and shall be enforceable against the City. To the extent that any such
incorporated provision permits the City or any other party to waive compliance with such provision or
requires that a document, opinion or other instrument or any event or condition be acceptable or
satisfactory to the City or any other party, for purposes of this Agreement, such provision shall be
complied with unless it is specifically waived by the Bank in writing and such document,opinion or other
instrument and such event or condition shall be acceptable or satisfactory only if it is acceptable or
satisfactory to the Bank which shall only be evidenced by the written approval by the Bank of the same.
Except as permitted by Section 6.14 hereof, no termination or amendment to such covenants and
agreements or defined terms or release of the City with respect thereto made pursuant to the Resolution or
any of the other Related Documents to which the City is a party, shall be effective to terminate or amend
such covenants and agreements and defined terms or release the City with respect thereto in each case as
incorporated by reference herein without the prior written consent of the Bank. Notwithstanding any
termination or expiration of the Resolution or any such other Related Document to which the City is a
party, the City shall continue to observe the covenants therein contained for the benefit of the Bank until
the termination of this Agreement and the payment in full of the Notes and all other Obligations. All such
incorporated covenants shall be in addition to the express covenants contained herein and shall not be
limited by the express covenants contained herein nor shall such incorporated covenants be a limitation
on the express covenants contained herein.
Section 6.09. Rate Covenant. The City covenants and agrees that it shall take any and all action
necessary to comply with the rate setting requirements of the Resolution, including Sections 16 and 19(b)
thereof.
Section 6.10. Further Assurances. From time to time hereafter, the City will execute and
deliver such additional instruments, certificates or documents, and will take all such actions as the Bank
may reasonably request for the purposes of implementing or effectuating the provisions of the Related
Documents to which the City is a party or for the purpose of more fully perfecting or renewing the rights
of the Bank with respect to the rights, properties or assets subject to such documents (or with respect to
any additions thereto or replacements or proceeds thereof or with respect to any other property or assets
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hereafter acquired by the City which may be deemed to be a part of the System). Upon the exercise by
the Bank of any power, right,privilege or remedy pursuant to the Related Documents to which the City is
a party which requires any consent, approval, registration, qualification or authorization of any
governmental authority or instrumentality, the City will, to the fullest extent permitted by law, execute
and deliver all necessary applications, certifications, instruments and other documents and papers that the
Bank may be required to obtain for such governmental consent, approval, registration, qualification or
authorization. At any time, and from time to time, upon request by the Bank, the City will, at the City's
expense, correct any defect, error or omission which may be discovered in the form or content of any of
the Related Documents to which the City is a party or protect the Bank's interests, security, rights and
remedies with respect to the Net Revenues or its security under the Resolution or hereunder. At all times,
the City will defend, preserve and protect the pledge of certain funds pursuant to the Resolution and all
the rights of the Bank hereunder and under the Resolution against all claims and demands of all Persons
whosoever.
Section 6.11. No Impairment. The City will neither take any action under the Resolution or any
other Related Document which would materially adversely affect the rights, interests, remedies or
security of the Bank under this Agreement or any other Related Document or which could reasonably be
expected to result in a Material Adverse Effect.
Section 6.12. Application of Note Proceeds. The City will not take or omit to take any action,
which action or omission will in any way result in the proceeds from the issuance of the Notes being
applied in a manner other than as provided in the Resolution.
Section 6.13. Limitation on Additional Debt. The City will not issue or incur any additional
Debt payable from or secured by Net Revenues, except for (a) Debt, the proceeds of which are used to
pay the principal of and interest on the Notes in full,or(b)such Debt that is permitted by the Resolution.
Section 6.14. Related Documents. The City shall not modify, amend or consent to any
modification, amendment or waiver in any material respect of any Related Document without the prior
written consent of the Bank.
Section 6.15. Liens. The City shall not,directly or indirectly, incur, create or permit to exist any
Lien on all or any part of the security provided by the Resolution that is senior to or on a parity with the
Lien securing the Notes and the Obligations,other than(i)Liens created under and in accordance with the
terms of the Resolution; (ii)the Liens created for the benefit of the Notes and the Obligations and other
Parity Debt that has heretofore or may hereafter be issued; and (iii)Liens which could not reasonably be
expected to materially adversely affect the interests, rights, remedies or security of the Bank under this
Agreement and the other Related Documents.
Section 6.16. Redemptions. The City shall provide thirty (30) days written notice to the Bank
prior to the date of any proposed optional redemption or purchase in lieu of redemption of Notes pursuant
to the Resolution.
Section 6.17. Other Agreements. In the event that the City has previously entered into or shall
hereafter enter into or otherwise consent to any Bank Agreement solely with respect to an obligation
secured by the Net Revenues of the System,which such Bank Agreement provides such Person with more
restrictive covenants, additional events of default and/or greater rights and remedies than are provided to
22
the Bank in this Agreement, the City shall provide the Bank with a copy of each such Bank Agreement
and such more restrictive covenants, additional events of default and/or greater rights and remedies shall
automatically be deemed to be incorporated into this Agreement and the Bank shall have the benefits of
such more restrictive covenants, additional events of default and/or greater rights and remedies as if
specifically set forth herein. In such event, the City shall promptly enter into an amendment to this
Agreement to include said more restrictive covenants, additional events of default and/or greater rights
and remedies; provided that the Bank shall have and maintain the benefit of such more restrictive
covenants, additional events of default and/or greater rights and remedies even if the City fails to provide
such amendment. Notwithstanding the foregoing, in no event shall such a provision described in this
Section be deemed incorporated into this Agreement should such incorporation adversely impact the tax
exempt status of the interest income on the Notes for federal tax purposes or cause a reissuance of the
Notes under the Code or regulations thereunder.
Section 6.18. Sovereign Immunity. To the extent that the City has or hereafter may acquire
under any Applicable Law any right to immunity from legal proceedings on the grounds of sovereignty or
otherwise,the City hereby irrevocably waives,to the extent permitted by law,such rights to immunity for
itself in respect of its obligations arising under or related to this Agreement,the Resolution,the Notes or
the other Related Documents to which it is a party.
Section 6.19. Swap Contracts. Without the prior written consent of the Bank, the City will not
enter into any Swap Contract relating to Debt(i)wherein any termination payments thereunder are senior
to or on parity with the payment of the Notes or the other Obligations or (ii) which requires the City to
post cash collateral to secure its obligations thereunder.
Section 6.20. Use of Bank's Name. Except as may be required by law (including, but limited
to, federal and state securities laws), the City shall not use the Bank's name in any published materials
(other than the City's staff reports, annual statements, audited financial statements, rating agency
presentations)without the prior written consent of the Bank.
Section 6.21. Maintenance of Tax-Exempt Status of Notes. The City shall not take any action
or omit to take any action which, if taken or omitted, would adversely affect the tax-exempt status of the
Notes.
Section 6.22. Environmental Laws. The City shall comply with all applicable Environmental
Laws and cure any defect thereto (or cause other Persons to effect any such cure)to the extent necessary
to bring such real property owned, leased, occupied or operated by the System back into compliance with
Environmental Laws and to comply with any cleanup orders issued by a Governmental Authority having
jurisdiction thereover. The City shall at all times use commercially reasonable efforts to render or
maintain any real property owned, leased,occupied or operated by the System safe and fit for its intended
uses. The City shall also immediately notify the Bank of any actual or alleged material failure to so
comply with or perform,or any material breach,violation or default under any Environmental Law.
Section 6.23. Federal Reserve Board Regulations. The City shall not use any portion of the
proceeds of the Purchase Price of the Notes for the purpose of carrying or purchasing any Margin Stock
and shall not incur any Debt which is to be reduced,retired or purchased by the City out of such proceeds.
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Section 6.24. Use of Proceeds. The City shall not use any portion of the proceeds from the
issuance of the Notes for the purpose of carrying or purchasing any Margin Stock and shall not incur any
Debt which is to be reduced,retired or purchased by the City out of such proceeds. The City shall not use
or allow to be used, and its directors, officers, employees and agents shall not use or allow to be used,the
proceeds of any of the Notes in any manner that would result in the violation of any applicable AML
Requirements.
Section 6.25. Government Regulation. The City shall not(a) be or become subject at any time
to any law,regulation, or list of any Governmental Authority(including, without limitation,the SDN List
or any other OFAC list)that prohibits or limits the Bank from making any advance or extension of credit
to the City or from otherwise conducting business with the City, or (b) fail to provide documentary and
other evidence of the City's identity as may be requested by the Bank at any time to enable the Bank to
verify the City's identity or to comply with any applicable law or regulation, including, without
limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318. The City shall at all
times comply with all AML Requirements. The City shall not use any proceeds from the issuance of the
Notes directly or indirectly for any payments to any government official or employee, political party,
political party official, candidate for political office, or anyone else acting in an official capacity, in order
to obtain, retain or direct business or obtain any improper advantage, in violation of the U.S. Foreign
Corrupt Practices Act of 1977. Within five (5) days of written request, the City shall provide the Bank
with such documentation as the Bank may request from time to time,to verify compliance with the terms
and conditions of this Section.
Section 6.26. Alternate Financing. Not less than six months prior to the Mandatory Tender
Date, the City agrees to use commercially reasonable efforts to optionally redeem or otherwise refinance
the Notes in whole on or prior to the Mandatory Tender Date. The City shall provide the Bank with
evidence of its refinancing efforts including delivery to the Bank of any term sheets, applications or
engagement letters requested and received by the City if and to the extent such term sheets, applications
or engagement letters are not considered confidential by the applicable lender(s) or purchaser(s);
provided,however,that the City will use reasonable efforts to obtain such lender's or purchaser's consent
to provide any such confidential information. The Bank will maintain the confidentiality of such term
sheets, applications or engagement letters with the same degree of care it accords to its own confidential
information.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default. The occurrence of any of the following events (whatever the
reason for such event and whether voluntary, involuntary, or effected by operation of Law) shall be an
"Event of Default"hereunder,unless waived in writing by the Bank:
(a) the City shall fail to pay the principal of or interest on the Notes when due;
(b) the City shall fail to pay any Obligation (other than the obligation to pay the
principal of or interest on the Notes)and such failure shall continue for three(3)Business Days;
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(c) any representation or warranty made by or on behalf of the City in this
Agreement or in any other Related Document or in any certificate or statement delivered
hereunder or thereunder shall be incorrect or untrue in any material respect when made or deemed
to have been made or delivered;
(d) the City shall default in the due performance or observance of any of the
covenants set forth in Section 6.01,6.08,6.09,6.11,6.14, 6.18,6.24, 6.25 hereof;
(e) the City shall default in the due performance or observance of any other term,
covenant or agreement contained in this Agreement or any other Related Document and such
default shall remain unremedied for a period of thirty(30)days after the occurrence thereof;
(f) the City shall(i)have entered involuntarily against it an order for relief under the
United States Bankruptcy Code, as amended, (ii)become insolvent or shall not pay, or be unable
to pay, or admit in writing its inability to pay, its debts generally as they become due, (iii)make
an assignment for the benefit of creditors, (iv)apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any
substantial part of its Property comprising the System, (v)institute any proceeding seeking to
have entered against it an order for relief under the United States Bankruptcy Code, as amended,
to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, marshalling of assets, adjustment or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or
other pleading denying the material allegations of any such proceeding filed against it, (vi)take
any corporate action in furtherance of any matter described in parts (i) through (v) above, or
(vii)fail to contest in good faith any appointment or proceeding described in Section 7.01(g) of
this Agreement;
(g) a custodian, receiver, trustee, examiner, liquidator or similar official shall be
appointed for the City or any substantial part of its Property comprising the System, or a
proceeding described in Section 7.01(f)(v)shall be instituted against the City and such proceeding
continues undischarged or any such proceeding continues undismissed or unstayed for a period of
thirty(30)or more days;
(h) any material provision of this Agreement, the Notes, the Resolution or any
Related Document shall at any time for any reason cease to be the legal, valid and binding
obligation of the City or shall cease to be in full force and effect, or shall be declared to be not
valid or binding in accordance with the terms thereof, or the validity or enforceability thereof
shall be contested by the City or any Governmental Authority, as the case may be, shall renounce
the same or deny that it has any further liability hereunder or thereunder;
(i) a debt moratorium, debt restructuring, debt adjustment or comparable restriction
is imposed on the repayment when due and payable of the principal of or interest on any Debt of
the City by the City or any Governmental Authority with appropriate jurisdiction;
(j) dissolution or termination of the existence of the City;
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(k) the City shall (i)default on the payment of the principal of or interest on any
Debt secured by Net Revenues, beyond the period of grace, if any, provided in the instrument or
agreement under which such Debt was created or incurred; or (ii)default in the observance or
performance of any agreement or condition relating to any Debt secured by Net Revenues or
contained in any instrument or agreement evidencing, securing or relating thereto, or any other
default, event of default or similar event shall occur or condition exist,the effect of which default,
event of default or similar event or condition is to permit(determined without regard to whether
any notice is required)the holders of such Parity Debt to declare such Parity Debt to be due prior
to its stated maturity or scheduled payment date, whether pursuant to acceleration, mandatory
tender, mandatory redemption or to otherwise take remedial action with respect to such Parity
Debt;
(1) any final, unappealable judgment or judgments, writ or writs or warrant or
warrants of attachment, or any similar process or processes, which are not covered in full by
insurance, with written acknowledgement of such coverage having been provided by the provider
of such insurance coverage to the Bank, in an aggregate amount not less than$5,000,000 shall be
entered or filed against the City or against any of its Property comprising the System and remain
unpaid,unvacated,unbonded or unstayed for a period of sixty(60) days; or
(m) any "event of default" under any Related Document (as defined respectively
therein)shall have occurred.
Section 7.02. Consequences of an Event of Default. If an Event of Default specified in
Section 7.01 hereof shall occur and be continuing, the Bank may take one or more of the following
actions at any time and from time to time (regardless of whether the actions are taken at the same or
different times):
(a) by written notice to the City, declare the outstanding amount of the Obligations
under this Agreement to be immediately due and payable without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived, and an action therefor
shall immediately accrue;
(b) deliver a written notice to the City that an Event of Default has occurred and is
continuing and direct the City, as applicable,to take such remedial action as is provided for in the
Resolution;
(c) either personally or by attorney or agent without bringing any action or
proceeding, or by a receiver to be appointed by a court in any appropriate action or proceeding,
take whatever action at law or in equity may appear necessary or desirable to collect the amounts
due and payable under the Related Documents or to enforce performance or observance of any
obligation, agreement or covenant of the City under the Related Documents, whether for specific
performance of any agreement or covenant of the City or in aid of the execution of any power
granted to the Bank in the Related Documents;
(d) cure any Default, Event of Default or event of nonperformance hereunder or
under any Related Document;provided, however, that the Bank shall have no obligation to effect
such a cure; and
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(e) exercise, or cause to be exercised, any and all remedies as it may have available
at law and at equity.
Section 7.03. Remedies Cumulative; Solely for the Benefit of Bank. To the extent permitted
by, and subject to the mandatory requirements of, applicable Law, each and every right, power and
remedy herein specifically given to the Bank in the Related Documents shall be cumulative, concurrent
and nonexclusive and shall be in addition to every other right,power and remedy herein specifically given
or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy
(whether specifically herein given or otherwise existing) may be exercised from time to time and as often
and in such order as may be deemed expedient by the Bank, and the exercise or the beginning of the
exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same
time or thereafter any other right,power or remedy.
The rights and remedies of the Bank specified herein are for the sole and exclusive benefit, use
and protection of the Bank, and the Bank is entitled, but shall have no duty or obligation to the City or
any other Person or otherwise, to exercise or to refrain from exercising any right or remedy reserved to
the Bank hereunder or under any of the other Related Documents.
Section 7.04. Waivers or Omissions. No delay or omission by the Bank in the exercise of any
right,remedy or power or in the pursuit of any remedy shall impair any such right remedy or power or be
construed to be a waiver of any default on the part of the Bank or to be acquiescence therein. No express
or implied waiver by the Bank of any Event of Default shall in any way be a waiver of any future or
subsequent Event of Default.
Section 7.05. Discontinuance of Proceedings. In case the Bank shall proceed to invoke any
right, remedy or recourse permitted hereunder or under the Related Documents and shall thereafter elect
to discontinue or abandon the same for any reason,the Bank shall have the unqualified right so to do and,
in such event, the City and the Bank shall be restored to their former positions with respect to the
Obligations, the Related Documents and otherwise, and the rights, remedies, recourse and powers of the
Bank hereunder shall continue as if the same had never been invoked.
ARTICLE VIII
INDEMNIFICATION
Section 8.01. Indemnification. In addition to any and all rights of reimbursement,
indemnification, subrogation or any other rights pursuant hereto or under law or equity, the City hereby
agrees (to the extent permitted by law)to indemnify and hold harmless each Noteholder and its officers,
directors and agents (each, an "Indemnitee") from and against any and all claims, damages, losses,
liabilities, reasonable costs or expenses whatsoever (including reasonable attorneys' fees) which may
incur or which may be claimed against an Indemnitee by any Person or entity whatsoever (collectively,
the "Liabilities") by reason of or in connection with (a)the execution and delivery or transfer of, or
payment or failure to pay under,any Related Document; (b)the issuance and sale of the Notes;and(c)the
use of the proceeds of the Notes;provided that the City shall not be required to indemnify an Indemnitee
for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused
by the willful misconduct or gross negligence of such Indemnitee. Nothing under this Section 8.01 is
intended to limit the City's payment of the Obligations.
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Section 8.02. Survival. The obligations of the City under this Article VIII shall survive the
payment of the Notes and the termination of this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Patriot Act Notice. The Bank hereby notifies the City that pursuant to the
requirements of the USA PATRIOT Act(Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the "PATRIOT Act") and 31 C.F.R. § 1010.230 (the "Beneficial Ownership Regulation"), the Bank is
required to obtain, verify and record information that identifies the City, which information includes the
name and address of the City, a Beneficial Ownership Certification and other information that will allow
the Bank to identify the City in accordance with the PATRIOT Act and the Beneficial Ownership
Regulation. The City shall, promptly following a request by the Bank, provide all documentation and
other information that the Bank requests in order to comply with its ongoing obligations under applicable
"know your customer"and anti-money laundering rules and regulations, including, without limitation,the
PATRIOT Act and the Beneficial Ownership Regulation.
Section 9.02. Amendments and Waivers; Enforcement. The Bank and the City may from
time to time enter into agreements amending, modifying or supplementing this Agreement or the other
Related Documents or changing the rights of the Bank or the City hereunder or thereunder, and the Bank
may from time to time grant waivers or consents to a departure from the due performance of the
obligations of the City hereunder or thereunder. Any such agreement, waiver or consent must be in
writing and shall be effective only to the extent specifically set forth in such writing. In the case of any
such waiver or consent relating to any provision hereof, any Default or Event of Default so waived or
consented to shall be deemed to be cured and not continuing, but no such waiver or consent shall extend
to any other or subsequent Default or Event of Default or impair any right consequent thereto.
Section 9.03. No Implied Waiver; Cumulative Remedies. No course of dealing and no delay
or failure of the Bank in exercising any right, power or privilege under this Agreement or the other
Related Documents shall affect any other or future exercise thereof or exercise of any right, power or
privilege; nor shall any single or partial exercise of any such right, power or privilege or any
abandonment or discontinuance of steps to enforce such a right, power or privilege preclude any further
exercise thereof or of any other right, power or privilege. The rights and remedies of the Bank under this
Agreement are cumulative and not exclusive of any rights or remedies which the Bank would otherwise
have under any Related Document,at law or in equity.
Section 9.04. Notices. All notices, requests, demands, directions and other communications
(collectively "notices") under the provisions of this Agreement shall be in writing (including facsimile
communication), unless otherwise expressly permitted hereunder, and shall be sent by first-class mail or
overnight delivery and shall be deemed received as follows: (i)if by first class mail, five (5) days after
mailing; (ii)if by overnight delivery, on the next Business Day; (iii)if by telephone, when given to a
person who confirms such receipt; and(iv)if by facsimile, when confirmation of receipt is obtained. All
notices shall be sent to the applicable party at the following address or in accordance with the last
unrevoked written direction from such party to the other parties hereto:
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•
The City: Waterloo Fiber
402 E 4th Street
Waterloo, Iowa 50703
Attention: Eric Lage,General Manager
Telephone: (319)291-0715 ext.3725
With copy to:
Steven M.Nadel
Ahlers&Cooney,P.C.
100 Court Avenue,Suite 600
Des Moines,IA 50309
(515)246-0306
The Bank: Western Alliance Business Trust
do Western Alliance Bank
One E.Washington Street, Suite 1400
Phoenix,Arizona 85004
Attention: Municipal Finance Group
Email: municipalfinancegroup@westernalliancebank.com
The Bank may rely on any notice(including telephone communication)purportedly made by or on behalf
of the other, and shall have no duty to verify the identity or authority of the Person giving such notice,
unless such actions or omissions would amount to gross negligence or intentional misconduct.
Section 9.05. No Third-Party Rights. Nothing in this Agreement, whether express or implied,
shall be construed to give to any Person other than the parties hereto and the Noteholders any legal or
equitable right,remedy or claim under or in respect of this Agreement, which is intended for the sole and
exclusive benefit of the parties hereto.
Section 9.06. Severability. The provisions of this Agreement are intended to be severable. If
any provision of this Agreement shall be held invalid or unenforceable in whole or in part in any
jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
Section 9.07. Governing Law;Waiver of Jury Trial.
(a) This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Iowa without giving effect to conflicts of laws provisions.
(b) TO THE EXTENT PERMITTED BY APPLICABLE LAWS, EACH OF THE
PARTIES HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE
RELATED DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
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OR THEREBY, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS,AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
(c) The covenants and waivers made pursuant to this Section 9.07 shall be
irrevocable and unmodifiable, whether in writing or orally, and shall be applicable to any
subsequent amendments,renewals, supplements or modifications of this Agreement. In the event
of litigation,this Agreement may be filed as a written consent to a trial by the court.
Section 9.08. Prior Understandings. This Agreement and the other Related Documents
supersede all other prior understandings and agreements,whether written or oral, among the parties hereto
relating to the transactions provided for herein and therein.
Section 9.09. Duration. All representations and warranties of the City contained herein or made
in connection herewith shall survive the making of and shall not be waived by the execution and delivery
of this Agreement or the other Related Documents. All covenants and agreements of the City contained
herein shall continue in full force and effect from and after the date hereof until the Obligations have been
fully discharged.
Section 9.10. Counterparts. This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts each of which, when so executed, shall be
deemed an original,but all such counterparts shall constitute but one and the same instrument.
Section 9.11. Successors and Assigns.
(a) Successors and Assigns Generally. This Agreement is a continuing obligation
and shall be binding upon the City, its successors, transferees and assigns and shall inure to the
benefit of the Noteholders and their respective permitted successors,transferees and assigns. The
City may not assign or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of the Bank. Each Noteholder may, in its sole discretion and in accordance
with applicable Law,from time to time assign,sell or transfer in whole or in part,this Agreement,
its interest in the Notes and the Related Documents in accordance with the provisions of
paragraph(b)or(c)of this Section. Each Noteholder may at any time and from time to time enter
into participation agreements in accordance with the provisions of paragraph (d) of this Section.
Each Noteholder may at any time pledge or assign a security interest subject to the restrictions of
paragraph(e)of this Section. Western Alliance Business Trust shall be the Bank hereunder until
such time as the Majority Noteholder designates an alternate Person to serve as the Bank
hereunder by delivery of written notice to the City and such Person accepts and agrees to act as
the Bank hereunder and under the Related Documents. The Majority Noteholder may so
designate an alternate Person to act as the Bank from time to time. Upon acceptance and
notification thereof to the City, the successor to the Bank for such purposes shall thereupon
succeed to and become vested with all of the rights, powers, privileges and responsibilities of the
Bank, and Western Alliance Business Trust or any other Person being replaced as the Bank shall
be discharged from its duties and obligations as the Bank hereunder.
(b) Sales and Transfers by Noteholder to a Bank Transferee. Without limitation of
the foregoing generality and notwithstanding anything to the contrary in the Purchase Agreement,
a Noteholder may at any time sell or otherwise transfer to one or more transferees all or a portion
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of the Notes to a Person that is (i) a Bank Affiliate or (ii) a trust or other custodial arrangement
established by the Bank or a Bank Affiliate, the owners of any beneficial interest in which are
limited to "qualified institutional buyers" as defined in Rule 144A promulgated under the 1933
Act (each, a "Bank Transferee"). The Bank shall provide written notice to the City of any such
transfer to a Bank Transferee;provided that the failure to provide such notice shall not affect such
transfer or the City's obligations under any Related Document. From and after the date of such
sale or transfer, Western Alliance Business Trust(and its successors) shall continue to have all of
the rights of the Bank hereunder and under the other Related Documents as if no such transfer or
sale had occurred;provided, however, that(A)no such sale or transfer referred to in clause(b)(i)
or (b)(ii) hereof shall in any way affect the obligations of the Bank hereunder, (B)the City shall
be required to deal only with the Bank with respect to any matters under this Agreement and
(C)in the case of a sale or transfer referred to in clause(b)(i)or(b)(ii)hereof,only the Bank shall
be entitled to enforce the provisions of this Agreement against the City.
(c) Sales and Transfers by Noteholder to a Non-Bank Transferee. Without limitation
of the foregoing generality, a Noteholder may at any time sell or otherwise transfer to one or
more transferees which are not Bank Transferees pursuant to the requirements of the Purchase
Agreement.
From and after the date the City and the selling Noteholder have received written notice
and an executed Investment Letter (as defined in the Purchase Agreement), (A)the Non-Bank
Transferee thereunder shall be a party hereto and shall have the rights and obligations of a
Noteholder hereunder and under the other Related Documents, and this Agreement shall be
deemed to be amended to the extent, but only to the extent,necessary to effect the addition of the
Non-Bank Transferee, and any reference to the assigning Noteholder hereunder and under the
other Related Documents shall thereafter refer to such transferring Noteholder and to the
Non-Bank Transferee to the extent of their respective interests, and (B)if the transferring
Noteholder no longer owns any Notes, then it shall relinquish its rights and be released from its
obligations hereunder and under the Related Documents.
(d) Participations. The Bank shall have the right to grant participations in all or a
portion of the Bank's interest in the Notes, this Agreement and the other Related Documents to
one or more other banking institutions;provided, however, that (i) no such participation by any
such participant shall in any way affect the obligations of the Bank hereunder and (ii) the City
shall be required to deal only with the Bank, with respect to any matters under this Agreement,
the Notes and the other Related Documents and no such participant shall be entitled to enforce
any provision hereunder against the City.
(e) Certain Pledges. The Bank may at any time pledge or grant a security interest in
all or any portion of its rights under the Notes, this Agreement and the Related Documents to
secure obligations of the Bank, including any pledge or assignment to secure obligations to a
Federal Reserve Bank;provided that no such pledge or assignment shall release the Bank from
any of its obligations hereunder or substitute any such pledgee or assignee for the Bank as a party
hereto.
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Section 9.12. No Advisory or Fiduciary Responsibility. In connection with all aspects of the
transactions contemplated by this Agreement and the Related Documents (including in connection with
any amendment, waiver or other modification of this Agreement or of any Related Document), the City
acknowledges and agrees that: (a)(i) any arranging, structuring and other services regarding this
Agreement and the Related Documents provided by the Bank or any Affiliate of the Bank are arm's
length commercial transactions between the City on the one hand, and the Bank and any Affiliate of the
Bank on the other hand, (ii)the City has consulted its own legal, accounting, regulatory and tax advisors
to the extent it has deemed appropriate, and (iii) the City is capable of evaluating, and understands and
accepts, the terms, risks and conditions of the transactions contemplated by this Agreement and the
Related Documents; (b)(i) the Bank and each Affiliate of the Bank is and has been acting solely as a
principal and has not been, is not, and will not be acting as an advisor, agent or fiduciary for the City or
any other Person and (ii)neither the Bank nor any Affiliate of the Bank has any obligation to the City
with respect to the transactions contemplated by this Agreement and the Related Documents,except those
obligations expressly set forth herein; and(c)the Bank and each Affiliate of the Bank may be engaged in
a broad range of transactions that involve interests that differ from those of the City, and neither the Bank
nor any Affiliate of the Bank has any obligation to disclose any of such interests to the City. To the
fullest extent permitted by Applicable Laws, the City hereby waives and releases any claims that it may
have against the Bank and each Affiliate of the Bank with respect to any breach or alleged breach of
agency or fiduciary duty in connection with any aspect of the transactions contemplated by this
Agreement and the Related Documents.
Section 9.13. Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement for any other purpose.
Section 9.14. Electronic Signatures. The parties agree that the electronic signature of a party to
this Agreement shall be as valid as an original signature of such party and shall be effective to bind such
party to this Agreement. The parties agree that any electronically signed document (including this
Agreement) shall be deemed (i)to be "written" or "in writing," (ii)to have been signed and (iii)to
constitute a record established and maintained in the ordinary course of business and an original written
record when printed from electronic files. Such paper copies or"printouts," if introduced as evidence in
any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the parties to
the same extent and under the same conditions as other original business records created and maintained
in documentary form. Neither party shall contest the admissibility of true and accurate copies of
electronically signed documents on the basis of the best evidence rule or as not satisfying the business
records exception to the hearsay rule. For purposes hereof, "electronic signature" means a
manually-signed original signature that is then transmitted by electronic means; "transmitted by electronic
means" means sent in the form of a facsimile or sent via the internet as a "pdf' (portable document
format) or other replicating image attached to an e-mail message; and, "electronically signed document"
means a document transmitted by electronic means and containing, or to which there is affixed, an
electronic signature.
Section 9.15. EMMA Postings. In the event the City files with EMMA this Agreement, any
Related Documents or any description of the material terms thereof or notice of any agreement to
covenants, events of default, remedies, priority rights or other similar terms, either voluntarily or as
required pursuant a continuing disclosure agreement or Rule 15c2-12 promulgated pursuant to the
Securities and Exchange Act of 1934, as amended (the "Rule") (each such posting, an "EMMA
32
Posting"), the City shall (i) provide the Bank with a copy of each EMMA Posting prior to submitting or
posting on EMMA and (ii) shall not file or permit the filing of any EMMA Posting that includes
Confidential Information The City acknowledges and agrees that although the Bank may request review,
edits or redactions of such materials prior to filing,the Bank is not responsible for the City's or any other
entity's (including, but not limited to, any broker-dealer's) compliance or noncompliance (or any claims,
losses or liabilities arising therefrom) with any continuing disclosure agreement or any applicable
securities or other laws,including,but not limited to,those relating to the Rule.
Section 9.16. Confidentiality. The Bank shall treat all City information regarding the Municipal
Communications Utility System(other than information that is available to the Bank on a nonconfidential
basis prior to the disclosure by the City) as confidential, including but not limited to all information
regarding the System and its operations,finances, financial models,projections,business plans, costs,and
rates, it being understood by the parties that disclosure of such information could harm the competitive
position of the System; provided, that, in the case of information received from the City after the date
hereof, such information is clearly identified at the time of delivery as confidential. Notwithstanding the
foregoing,the Bank may disclose such information: (a)to its Affiliates in connection with the transactions
contemplated hereby or in connection with marketing of services by such Affiliate to the City (it being
understood that the Persons to whom such disclosure is made will be informed of the confidential nature
of such information and instructed to keep such information confidential), (b)to the extent required or
requested by, or required to be disclosed to, any regulatory or similar authority purporting to have
jurisdiction over the Bank or its Affiliates (including any self-regulatory authority, such as the National
Association of Insurance Commissioners) or in accordance with the Bank's or its Affiliate's regulatory
compliance policy if the Bank deems such disclosure to be necessary for the mitigation of claims by those
authorities against the Bank or any of its Affiliates (in which case, the Bank shall use commercially
reasonable efforts to, except with respect to any audit or examination conducted by bank accountants or
any governmental bank regulatory authority exercising examination or regulatory authority, promptly
notify the City, in advance, to the extent practicable and otherwise permitted by Applicable Law), (c)as
to the extent required by Applicable Laws or regulations or in any legal, judicial, administrative
proceeding or other compulsory process, (d) in connection with the exercise of any remedies under this
Agreement or under any other Related Document, or any action or proceeding relating to this Agreement
or any other Related Document, or the enforcement of rights hereunder or thereunder, (e)subject to an
agreement containing provisions substantially the same as those of this Section, to any Bank-Transferee,
transferee other than a Bank-Transferee, or participant in any of its rights and obligations under this
Agreement, (f) with the consent of the City, (g)to the extent such information (i)becomes publicly
available other than as a result of a breach of this Section or(ii)becomes available to the Bank or any of
its Affiliates from a third party that is not, to such Person's knowledge, subject to confidentiality
obligations to the City,(h)to the extent that such information is independently developed by the Bank, or
(i)for purposes of establishing a"due diligence"defense.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
33
•
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered as of the Effective Date.
WESTERN ALLIANCE BUSINESS TRUST
By
Name:
Title:
CITY OF WATERLOO,IOWA,BY AND THROUGH ITS
BOARD OF TRUSTEES OF THE MUNICIPAL
COMMUNICATIONS UTILITY,FOR AND ON BEHALF
OF THE MUNICIPAL CO ATIONS UTILITY
Name: 4 N JM, i
Title: 41 rt �s
Signature Page to Continuing Covenant Agreement
EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate (this "Certificate") is furnished to Western Alliance Business Trust
(the "Bank") pursuant to that certain Continuing Covenant Agreement dated as of December 30, 2025
(the `Agreement"), between City of Waterloo, Iowa, by and through its Board of Trustees of the
Municipal Communications Utility, also known as Waterloo Fiber, acting solely for and on behalf of the
Municipal Communications Utility (the "City") and the Bank. Unless otherwise defined herein, the
terms used in this Certificate shall have the meanings assigned thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly appointed City representative of the Municipal Communications
Utility;
2. I have reviewed the terms of the Agreement and I have made, or have caused to
be made under my supervision, a detailed review of the transactions and conditions of the System
during the accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or the occurrence of any event which constitutes a
Default or Event of Default during or at the end of the accounting period covered by the attached
financial statements or as of the date of this Certificate,except as set forth below;and
4. The financial statements required by Section 6.05 of the Agreement and being
furnished to you concurrently with this certificate fairly represent the consolidated financial
condition of the System in accordance with GAAP (subject to year end adjustments) as of the
dates and for the periods covered thereby.
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which the City has taken, is
taking,or proposes to take with respect to each such condition or event:
The foregoing certifications and the financial statements delivered with this Certificate in support
hereof,are made and delivered this day of ,20_.
CITY OF WATERLOO,IOWA,BY AND THROUGH
ITS BOARD OF TRUSTEES OF THE
MUNICIPAL COMMUNICATIONS UTILITY
B -..—R..---_
Name: 4iva2&.Vdv poet'
Title: CI-t4i4iv 4"
A-2
EXHIBIT B
MONTHLY CONSTRUCTION AND PROJECT FUND REPORT
This Monthly Construction and Project Fund Report (this "Report") is delivered pursuant to the Continuing
Covenant Agreement by and between the City of Waterloo, by and through its Board of Trustees of the Municipal
Communications Utility, State of Iowa (the "Issuer") and Western Alliance Business Trust (the "Lender"), and
covers the reporting period ending (the"Reporting Period").
SECTION 1.CONSTRUCTION PROGRESS NARRATIVE
Narrative summary of construction progress during the Reporting Period:
SECTION 2.PROJECT SCHEDULE STATUS
2.1 Construction Status by Phase
Phase Status %Complete Comments
System FTTP
{Other}
2.2 Schedule Variance
Item System FTTP {Other}
Original Substantial
Completion
Current Substantial
Completion
Variance(Days)
Original Final Completion
Current Final Completion
Variance(Days)
SECTION 3.PROJECT BUDGET AND COST STATUS
3.1 Budget Summary
Category Original Budget($) Current Budget($) Variance($)
System FTTP
{Other}
Exhibit B
3.2 Costs to Date and Remaining Costs
Item Amount($)
Total Budget
Total Costs Incurred to Date
Remaining Costs to Complete
Comments:
SECTION 4.CHANGE ORDERS
Change Order No. Description Approved Amount Pending Amount Schedule Impact
($) ($)
SECTION 5.ENVIRONMENTAL AND REGULATORY MATTERS
❑No environmental or regulatory issues affecting the Project.
❑Environmental or regulatory issues exist(describe below):
SECTION 6.GENERAL CONTRACTOR STATUS
Item Response
Current General Contractor
Any changes to General Contractor during
reporting period
Reason for change
SECTION 7.PROJECT FUND DRAW REPORT
7.1 Monthly Draw Detail
Draw Date Amount($) Payee Use of Funds Budget Line Item
•
7.2 Cumulative Project Fund Summary
Item Amount($)
Project Fund Balance at Beginning of Period
Total Draws for This Period
Cumulative Draws to Date
Remaining Project Fund Balance
SECTION 8.OTHER REPORTS
❑ Attached is the"EnTrust Project Dashboard"as provided by the EnTrust
SECTION 9.CERTIFICATIONS
The undersigned hereby certifies,on behalf of the Issuer,that:
❑All amounts drawn from the Project Fund during the Reporting Period were used solely for qualifying Project
costs.
❑All Project Fund amounts were invested and expended in compliance with applicable IRS tax-exempt debt
regulations.
❑No Event of Default or Potential Event of Default exists under the CCA
❑This Report is true,correct,and complete in all material respects.
SECTION 10.ISSUER CERTIFICATION
Authorized Signatory:
Title:
Date: