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Sewer Revenue Capital Loan Notes Series 2010E $64.8 MTHE COF Dubuque DUtB AII•AmericaCity 1 1 Masterpiece on the Mississippi 2007 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Procedure to Complete Action on Issuance of $64,885,000 Sewer Revenue Capital Loan Note, Series 2010E (State of Iowa Revolving Fund Loan) DATE: August 5, 2010 Finance Director Ken TeKippe recommends City Council approval of the suggested proceedings to complete action required on the $64,885,000 Sewer Revenue Capital Loan Note from the State of Iowa Revolving Fund Loan /Iowa Water Pollution Control Works Financing Program. The loan funds will be used to provide funds to pay the costs of acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or part of the Municipal Sewer System, including those costs associated with the Water Pollution Control. Plant Modification project. This is the final City Council action required on the Series 2010E Note. concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Kenneth J. TeKippe, Finance Director THE CF Dubuque DU t B E AH- Amer icflily I I Masterpiece on the Mississippi 2007 TO: Michael C. Van Milligen, City Manager FROM: Kenneth J. TeKippe, Finance Director SUBJECT: Procedure to Complete Action on Issuance of $64,885,000 Sewer Revenue Capital Loan Note, Series 2010E (State of Iowa Revolving Fund Loan) DATE: August 5, 2010 The purpose of this memorandum is to provide suggested proceedings to complete action required on the $64,885,000 Sewer Revenue Capital Loan Note from the State of Iowa Revolving Fund Loan/ Iowa Water Pollution Control Works Financing Program. The borrowing permits the City to take advantage of the 3% fixed interest rate for 29 years with a .25% annual administrative fee associated with the borrowing. There is a one -time 1 % loan origination fee for the borrowing. The planning and design loan for this project will be rolled into this State of Iowa Revolving Fund Loan. There are no principal payments required during the three year construction project with principal repayments required over 26 years after construction complete. The loan funds will be used to provide funds to pay the costs of acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or part of the Municipal Sewer System, including those costs associated with the Water Pollution Control Plant Modification Project. The public hearing for the loan was held at the August 2, 2010 meeting. The resolution approves and authorizes the form of Loan and Disbursement Agreement and authorizes the issuance of the Series 2010E Note to the Iowa Finance Authority. The Loan and Disbursement Agreement also sets forth a number of covenants and agreements on the part of the City with respect to the repayment on the Loan. The Tax Exemption Certificate sets out in detail a number of facts, promises and obligations which must be met and agreed to by the City in order to maintain this Note as tax exempt. This is the final City Council action required on the Series 2010E Note. A letter from Attorney William Noth detailing information on the loan is enclosed. KT /jg Enclosures cc: Barry Lindahl, City Attorney Jenny Larson, Budget Director Jeanne Schneider, City Clerk AHLERS &GOONEY, P.C. 100 COURT AVENUE, SUITE 600 DES MOINES, IOWA 50309 -2231 PHONE: 515 - 243 -7611 FAX -. 515- 243 -2149 WWW.AHLERSLAW.COM WILLIAM J. NOTH wnolh @ahlerslaw.com August 5, 2010 Mr. Ken TeKippe Finance Officer City of Dubuque 50 West 13th Street Dubuque, Iowa 52001 -4864 RE: $64,885,000 Sewer Revenue Capital Loan Note, Series 2010E (State of Iowa Revolving Fund Loan) Dear Mr. TeKippe: Direct Dial: (515) 246 -0332 With this letter I am enclosing a resolution approving and authorizing the form of Loan and Disbursement Agreement and authorizing the issuance of the above Note to the Iowa Finance Authority (the i "). The resolution also incorporates by reference the form of the Tax Exemption Certificate and Loan and Disbursement Agreement, copies of which are enclosed for filing in your office. The Tax Exemption Certificate sets out in detail a number of facts, promises and obligations which must be met and agreed to by the City in order to maintain this Note as tax exempt. The Loan and Disbursement Agreement also sets forth a number of covenants and agreements on the part of the City with respect to the repayment of the Loan. This resolution is a "series resolution" and incorporates by reference many of the terms set forth in the Master Resolution No. 437 -08 approved on December 15, 2008, That Master Resolution establishes the flow of funds and payment terms for all sewer revenue obligations issued subsequent to its passage. This particular loan is being issued as a "Senior SRF Bond" under the Master Resolution, which means that it has a parity claim on the net revenues with other senior bonds, but will not be secured by the Debt Service Reserve Fund established under the Master Resolution. I am also enclosing the final closing certificates. The Transcript Certificate can be completed and dated as soon as final action has been taken. The Delivery Certificate and WISHARD & BAILY- 1888, GUERNSEY & BAILY- 1893; GAILY& STIPP - 1901; STIPP, PERRY. BANNISTER & STARIINOER -1914; BANNISTER. CARPENTER, AHLERS & COONEY - 1950; AHLERS, COONEY, DORWEILER, ALLBEE, HAYNIE & SMITH -1974; AHLERS, COONEY. DORWEILER, HAYNIE. SMITH & ALLBEE, P.C. - 1990 August 5, 2010 Page 2 the Tax Exemption Certificate should be executed but left undated. Please note a local bank must also sign the Delivery Certificate to attest the City signatures thereon. Similarly, all copies of the Loan and Disbursement Agreement should be signed and sealed but left undated. The dates will be added pursuant to authorization from the City at the time of final closing and delivery of the Note to the Authority. Please return these certificates and all copies of the Agreement to me for holding and review before the closing arrangements are made. An original form of Note R -1 is enclosed as well. The Note should be manually signed by the Mayor and City Clerk on the lines indicated on page 3, the seal of the City should be impressed as indicated and the City Clerk should manually execute as the Registrar where indicated. The date of authentication and date of delivery are not known at this time and should be left blank; both dates will be inserted as of the actual closing date of the Loan. The completed Note also should be returned to us for holding prior to closing. A highlighted copy of the Note is enclosed to illustrate the various spaces where a signature or seal is needed. The Tax Exemption Certificate is an important document and contains important information concerning the calculated yield on the Note and a number of covenants and obligations on the part of the City. This certificate should be retained as a part of your permanent records. I will not attempt to summarize all of the matters which are included in this certificate but I do want to point out some important ones. Tax exemption is based in part upon the fact that the use of the facilities to be acquired by the City with the proceeds of the Loan will be for the benefit of the public and will not be used in the private trade or business of any business or non - tax - exempt entity. The properties acquired with the proceeds must not be sold or diverted to any private or nonpublic use unless the significance of that action is reviewed by bond counsel. We understand that the proceeds of the loan will be used for the purpose of paying costs of construction of certain improvements and extensions to the Municipal Sanitary Sewer System of the City. All of the financed facilities are expected to be owned by the City and used by the public generally, including industrial users. We understand that there are no contractual arrangements or agreements of any sort between the City and any contributing industry using the municipal system with respect to rates or use of any part of the system. We recognize that contributing industries using the system may be subject to additional surcharges above the current user charges, depending on the strength and August 5, 2010 Page 3 volume of the waste they generate. However, any such surcharges must be imposed by virtue of City ordinances and apply to all entities meeting the standards set forth therein. No other charges or payments should be imposed or to the City by any contributing industry for wastewater treatment services or Project - related construction and acquisition activities beyond those mandated by ordinance for certain classes of users. These understandings are reflected in the Tax Exemption Certificate, so please let me know immediately if our understandings are not correct in any respect. In addition, the Tax Exemption Certificate sets forth the best knowledge and belief which the City has as of today concerning the timely expenditure of the proceeds as the City reasonably expects expenditures to occur. If for any reason the City finds it will be prevented from expending the proceeds fully within three years, that matter should be referred to us. This Note also is issued under the expectation that the City will be exempt from the requirement to rebate arbitrage earnings to the United States Government since you intend to spend the proceeds of the Note for construction purposes within two (2) years of issuance and meet the other requirements of the two -year expenditure exemption from the rebate regulations. There are a number of other general promises and commitments by the City to take or refrain from action, which are necessary to maintain the tax exemption of this Note. You should recognize that these promises and commitments are required of the City on an ongoing basis and that the possibility of some additional future action does exist. Also enclosed is IRS Form 8038 -G -- Information Return for Tax Exempt Governmental Bond Issues. Please fill in No. 2 under Part 1, sign, do not date and return to our office for completion. We will send you a completed copy for your file at closing. Extra copies of the proceedings are enclosed to be completed as the original and certified back to our office. August 5, 2010 Page 4 If any questions arise, please don't hesitate to call. Yours very truly, William J. Noth WJN:dc encl. DCORNELL \664493.1 \ W A 10422.112 (This Notice to be posted) NOTICE AND CALL OF PUBLIC MEETING Governmental Body: The City Council of Dubuque, Iowa. Date of Meeting: August 10, 2010 Time of Meeting: 4:45 o'clock P.M. Place of Meeting: Historic Federal Building, 350 West 6th Street, Dubuque, Iowa. PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental body will meet at the date, time and place above set out. The tentative agenda for said meeting is as follows: $64,885,000 Sewer Revenue Capital Loan Notes, Series 2010E Approve forms of Tax Exemption Certificate and Loan and Disbursement Agreement. Series Resolution authorizing and providing for the issuance and securing the payment of $64,885,000 Sewer Revenue Capital Loan Notes, Series 2010E, by the City of Dubuque, Iowa under the provisions of Chapter 384 of the Code of Iowa, providing for a method of payment thereof, approving Loan and Disbursement Agreement, and other related matters Such additional matters as are set forth on the additional two page(s) attached hereto. This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of Iowa, and the local rules of said governmental body. City Clerk, Dubuque, Iowa August 11, 2010 The City Council of Dubuque, Iowa, met in special session, in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at 4:45 o'clock P.M., on the above date. There were present Mayor Roy D. Buol, in the chair, and the following named Council Members: Karla Braig, Joyce Connors, Ric Jones, Kevin Lynch, David Resnick Absent: Dirk Voetberg Council Member Joyce Connors moved that the forms of Tax Exemption Certificate and Loan and Disbursement Agreement be placed on file and approved. Council Member Karla Braig seconded the motion and the roll being called thereon, the vote was as follows: AYES: Braig, Buol, Connors, Jones, Lynch, Resnick NAYS: None Council Member Joyce Connors introduced the following Resolution entitled "SERIES RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE PAYMENT OF $64,885,000 SEWER REVENUE CAPITAL LOAN NOTES, SERIES 2010E, BY THE CITY OF DUBUQUE, IOWA UNDER THE PROVISIONS OF CHAPTER 384 OF THE CODE OF IOWA, PROVIDING FOR A METHOD OF PAYMENT THEREOF, APPROVING LOAN AND DISBURSEMENT AGREEMENT, AND OTHER RELATED MATTERS ", and moved its adoption. Council Member Karla Braig seconded the motion to adopt. The roll was called and the vote was: AYES: Braig, Buol, Connors, Jones, Lynch, Resnick NAYS: None Whereupon the Mayor declared the following Resolution duly adopted: 0) RESOLUTION NO. 302 -10 SERIES RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE PAYMENT OF $64,885,000 SEWER REVENUE CAPITAL LOAN NOTES, SERIES 2010E, BY THE CITY OF DUBUQUE, IOWA UNDER THE PROVISIONS OF CHAPTER 384 OF THE CODE OF IOWA, PROVIDING FOR A METHOD OF PAYMENT THEREOF, APPROVING LOAN AND DISBURSEMENT AGREEMENT, AND OTHER RELATED MATTERS WHEREAS, the City Council of the City of Dubuque, Iowa (the "City ") has heretofore established charges, rates and rentals for services which are and will continue to be collected as system revenues of the Municipal Sanitary Sewer System, and said revenues have not been pledged and are available for the payment of sewer revenue bonds or notes, subject to the following premises; and WHEREAS, by Resolution No. 437 -08 passed and approved on December 15, 2008 (the "Master Resolution "), the City Council heretofore has authorized the issuance of $2,000,000 Sewer Revenue Capital Loan Notes, Series 2009A, for the purpose of financing the construction of the Series 2009A Project described therein, and to pay related costs of issuance; and WHEREAS, Section 8.3 of the Master Resolution authorizes the issuance of additional Senior Bonds, including Senior SRF Bonds, by the City from time to time, if all of the conditions set forth therein are satisfied; and WHEREAS, the notice of intention of the City Council to take action for the issuance of not to exceed $65,000,000 Sewer Revenue Capital Loan Notes has heretofore been duly published and no objections to such proposed action have been filed; and WHEREAS, the Council has determined to issue additional - Senior SRF Bonds, and has determined that, upon passage of this Series Resolution all of the requirements of Article VIII of the Master Resolution with respect to the issuance of additional Senior SRF Bonds will have been satisfied. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IN THE COUNTY OF DUBUQUE, STATE OF IOWA: 3 ARTICLE I DEFINITIONS Section 1.1. Definitions Except as otherwise provided below in this Article I, all words and terms defined in Article I of the Master Resolution shall have the same meanings in this Series Resolution as such defined words and terms are given in Article I of the Master Resolution. In addition, the following terms shall have the following meanings in this Series Resolution unless the text expressly or by necessary implication requires otherwise: "Agreement" shall mean the Loan and Disbursement Agreement dated as of the Closing between the City and the Original Purchaser relating to the Loan made to the City under the Program. "City" or "Issuer" shall mean the City of Dubuque, Iowa. "Closing" shall mean the date of execution of the Agreement and delivery of the Series 2010E Bonds to the Original Purchaser and the funding of the Loan by the Trustee. "Loan" shall mean the total principal amount allocated by the Original Purchaser to the City under the Program, equal in amount to the aggregate principal amount of the Series 2010E Bonds. "Master Resolution" means the City Council Resolution No. 437 -08, passed and approved on December 15, 2008, entitled "Master Resolution relating to the issuance of Sewer Revenue Bonds by the City of Dubuque, Iowa under the provisions of Chapter 3 84 of the Code of Iowa, authorizing and providing for the issuance and securing the payment of $2,000,000 Sewer Revenue Capital Loan Notes, Series 2009A, providing for a method of payment thereof, and related matters," as the same may be amended from time to time. "Original Purchaser" means the Iowa Finance Authority, as the purchaser of the Series 2010E Bonds from the City at the time of their original issuance. "Program" shall mean the Iowa Water Pollution Control Works Financing Program administered by the Original Purchaser. 11 "Series 2010E Bonds" means the $64,885,000 Sewer Revenue Capital Loan Notes, Series 2010E, dated the date of delivery, authorized to be issued pursuant to this Series Resolution. "Series 2010E Costs of Issuance Account" means the account by that name within the Project Fund established in Section 5.1 of the Master Resolution. "Series 2010E Project" shall mean the Project being financed with the proceeds of the Series 2010E Bonds, including those costs associated with the Water Pollution Control Plant Modification Project and the refinancing of the Sewer Revenue Capital Loan Notes Anticipation Project Note, Series 2009, dated March 11, 2009, issued in respect of such costs, as described generally in the Agreement and more particularly in the plans and specifications on file from time to time with the City Clerk. "Series 2010E Project Account" means the account by that name within the Project Fund established in Section 5.1 of the Master Resolution. "Series 2010E Rebate Account" means the account by that name within the Rebate Fund established in Section 6.10 of the Master Resolution. "Series Resolution" means this Resolution of the Council. "Tax Exemption Certificate" means the Tax Exemption Certificate executed by the Treasurer and delivered at the time of issuance and delivery of the Series 2010E Bonds. "Trustee" shall mean Wells Fargo Bank, National Association, with its principal office located in the City of Des Moines, Iowa, and its successors and any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor trustee under the Program. 5 ARTICLE II THE SERIES 2010E BONDS Section 2.1. Series 2010E Bonds - Authorization and Purpose Pursuant to the provisions of the Master Resolution and in particular Section 8.3 thereof, there are hereby authorized to be issued, negotiable, serial, fully registered Sewer Revenue Capital Loan Notes, Series 2010E, in the aggregate principal amount of $64,885,000, dated the date of delivery, for the purpose of constructing the Series 2010E Project and paying Project Costs relating thereto, and to pay related Costs of Issuance. The Series 2010E Bonds shall be issued as Senior SRF Bonds under the terms of the Master Resolution, for the purpose of paying costs of the Series 2010E Project. The Council, pursuant to Sections 384.24A and 384.82 of the Code of Iowa, hereby finds and determines that it is necessary and advisable to issue said Series 2010E Bonds authorized by the Agreement and this Resolution. The Series 2010E Bonds and the Registrar's Certificate of Authentication shall be in substantially the form set forth in Exhibit A attached hereto, with such variations, omissions, substitutions and insertions as are required or permitted by this Series Resolution. The Series 2010E Bonds shall be executed by the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the City Clerk of the Council, and shall be fully registered as to both principal and interest as provided in this Series Resolution; principal, interest and premium, if any shall be payable at the office of the Paying Agent by mailing of a check, wire transfer or automated clearing house system transfer to the registered owner of the Bond. The Series 2010E Bonds shall be in the denomination of $1,000 or multiples thereof and may at the request of the Original Purchaser be initially issued as a single Bond in the denomination of $64,885,000 and numbered R -1. The Series 2010E Bonds shall be issued pursuant to the provisions of Sections 384.24A and 384.82 of the Code of Iowa for the aforesaid purpose, be designated "SEWER REVENUE CAPITAL LOAN NOTE, SERIES 2010E ", be dated the date of delivery, and bear interest at the rate of 3.0% per annum from the date of each advancement made under the Agreement, until payment thereof, at the office of the Paying Agent, said interest payable on December 1, 2010, and semi - annually thereafter on the 1st day of June and December in each year until maturity as set forth on the Debt Service Schedule attached to the Agreement as Exhibit A and incorporated herein by this reference. As set forth on said Debt Service Schedule, principal shall be payable on June 1, 2014 and annually thereafter on the 1st day of June in the amounts set forth therein until 0 principal and interest are fully paid, except that the final installment of the entire balance of principal and interest, if not sooner paid, shall become due and payable on June 1, 2039. Notwithstanding the foregoing or any other provision hereof, principal and interest shall be payable as shown on said Debt Service Schedule until completion of the Series 2010E Project, at which time the final Debt Service Schedule shall be determined by the Trustee based upon actual advancements, final costs and completion of the Series 2010E Project, all as provided in the administrative rules governing the Program. Payment of principal and interest on the Series 2010E Bonds shall at all times conform to said Debt Service Schedule and the rules of the Program. In addition to the payment of principal of and interest on the Series 2010E Bonds, the City also agrees to pay the Initiation Fee and the Servicing Fee as defined and in accordance with the terms of the Agreement. Section 2.2. Issuance of Series 2010E Bonds in Certificated Form The Series 2010E Bonds shall be issued as Bonds in Authorized Denominations and may at the request of the Original Purchaser be issued as a single Series 2010E Bond in the full authorized amount thereof, and shall be registered in the name of the Original Purchaser. Section 2.3. Appointment of Registrar The Treasurer is hereby appointed as Registrar for the Series 2010E Bonds under the terms of this Series Resolution. Section 2.4. Execution, Authentication and Delivery of the Series 2010E Bonds Upon the adoption of this Resolution, the Mayor and City Clerk shall execute and deliver the Series 2010E Bonds to the Registrar, who shall authenticate the same and deliver the same to or upon order of the Original Purchaser. No such Series 2010E Bond shall be valid or obligatory for any purpose or shall be entitled to any right or benefit hereunder unless the Registrar shall duly endorse and execute on such Series 2010E Bond a Certificate of Authentication substantially in the form of the Certificate herein set forth. Such Certificate upon any such Series 2010E Bond executed on behalf of the Issuer shall be conclusive evidence that the Series 2010E Bond so authenticated has been duly issued under this Series Resolution and that the holder thereof is entitled to the benefits of this Series Resolution. 7 ARTICLE III REDEMPTION OF BONDS Section 3.1. Optional Redemption The Series 2010E Bonds are subject to optional redemption at a price of par plus accrued interest (i) on any date upon receipt of written consent of the Original Purchaser or (ii) in the event that all or substantially all of the Series 2010E Project is damaged or destroyed. Any optional redemption of the Series 2010E Bonds may be made from any funds regardless of source, in whole or from time to time in part, in inverse order of maturity, by giving not less than thirty (30) days notice of redemption by certified or registered mail to the Original Purchaser (or any other registered owner of the Series 2010E Bonds). The terms of redemption shall be par, plus accrued interest to date of call. The Series 2010E Bonds are also subject to mandatory redemption as set forth in Section 5 of the Agreement. ARTICLE IV DELIVERY AND APPLICATION OF PROCEEDS Section 4.1. Application of Series 2010E Bond Proceeds The Series 2010E Bonds shall be delivered as provided in Sections 6.1 and 6.2 and the proceeds thereof shall be applied as follows: (i) An amount sufficient to pay the Costs of Issuance of the Series 2010E Bonds shall be deposited into the Series 2010E Costs of Issuance Account. (ii) The balance of proceeds shall be deposited into the Series 2010E Project Account of the Project Fund and applied thereafter to pay Project Costs of the Series 2010E Project. Section 4.2. No Adjustment to Debt Service Reserve Requirement The Series 2010E Bonds shall be issued as Senior SRF Bonds under the Master Resolution, and shall not be secured by or payable from amounts held in the Debt Service Reserve Fund established in the Master Resolution. Upon issuance of the Series 2010E Bonds, the amount to be accumulated and maintained in the Debt Service Reserve Fund shall not be increased, but shall continue to remain equal to 100% of the Debt Service Reserve Requirement computed on a basis which includes all Senior Bonds which will be Outstanding immediately after issuance of the Series 2010E Bonds and which are not Senior SRF Bonds. ARTICLE V TAX PROVISIONS Section 5.1. Disposition of Bond Proceeds; Arbitrage Not Permitted The City reasonably expects and covenants that no use will be made of the proceeds from the issuance and sale of the Series 2010E Bonds issued hereunder which will cause any of the Series 2010E Bonds to be classified as arbitrage bonds within the meaning of Section 148(a) and (b) of the Code, and that throughout the term of said Series 2010E Bonds it will comply with the requirements of said statute and regulations issued thereunder. To the best knowledge and belief of the City, there are no facts or circumstances that would materially change the foregoing statements or the conclusion that it is not expected that the proceeds of the Series 2010E Bonds will be used in a manner that would cause such Bonds to be arbitrage bonds. Without limiting the generality of the foregoing, the City hereby agrees to comply with the provisions of the Tax Exemption Certificate and the provisions of the Tax Exemption Certificate are hereby incorporated by reference as part of this Series Resolution. The Treasurer is hereby directed to make and insert all calculations and determinations necessary to complete the Tax Exemption Certificate in all respects and to execute and deliver the Tax Exemption Certificate at issuance of the. Series 2010E Bonds to certify as to the reasonable expectations and covenants of the City at that date. The City covenants that it will treat as yield restricted any proceeds of the Series 2010E Bonds remaining unexpended after three years from the issuance and any other funds required by the Tax Exemption Certificate to be so treated. If any investments are held with respect to the Series 2010E Bonds, the City shall treat the same for the purpose of restricted yield as held in proportion to the original principal amounts of each issue. The City covenants that it will exceed any investment yield restriction provided in this Series Resolution only in the event that it shall first obtain an opinion of bond counsel that the proposed investment action will not cause the Series 2010E Bonds to be classified as arbitrage bonds under Section 148(a) and (b) of the Code. The City covenants that it will proceed with due diligence to spend the proceeds of the Series 2010E Bonds for the purpose set forth in this Series Resolution. The City further covenants that it will make no change in the use of the proceeds available for the construction of facilities or change in the use of any portion of the facilities constructed therefrom by persons other than the City or the general public unless it has obtained an opinion of bond counsel or a revenue ruling that the proposed project or use will not be of E such character as to cause interest on any of the Series 2010E Bonds not to be exempt from federal income taxes in the hands of holders under the provisions of the Code. Section 5.2. Additional Covenants, Representations and Warranties of the Cam. The City certifies and covenants with the purchasers and holders of the Series 2010E Bonds from time to time outstanding that the City through its officers, (a) will make such further specific covenants, representations and assurances as may be necessary or advisable; (b) comply with all representations, covenants and assurances contained in the Tax Exemption Certificate, which Tax Exemption Certificate shall constitute a part of the contract between the City and the owners of the Series 2010E Bonds; (c) consult with bond counsel (as defined in the Tax Exemption Certificate); (d) pay to the United States, as necessary, such sums of money representing required rebates of excess arbitrage profits relating to the Series 2010E Bonds; (e) file such forms, statements and supporting documents as may be required and in a timely manner; and (f) if deemed necessary or advisable by its officers, to employ and pay fiscal agents, financial advisors, attorneys and other persons to assist the City in such compliance. ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.1. Delivery of Series 2010E Bonds The City shall deliver the executed Agreement and the Series 2010E Bonds to the Original Purchaser at the price of par on the date of Closing. Delivery of the executed Agreement and the Series 2010E Bonds shall be made to the Original Purchaser as soon as practicable after the effective date of this Series Resolution. Section 6.2. Approval of Agreement The Agreement in substantially the form presented at this meeting of the Council is hereby authorized and approved, and the Mayor and City Clerk are authorized to execute and deliver the Agreement, with such changes therein as such officials deem appropriate, for and on behalf of the City, such officers' signatures thereon being conclusive evidence of such officials' and the City's approval thereof. Section 6.3. General Authorization From and after the date of adoption of this Series Resolution, the officers, employees and agents of the City are hereby authorized to do all such acts and things and to execute and deliver any and all other documents, agreements, certificates and instruments relating to the Series 2010E Bonds, the investment of the proceeds thereof and the other transactions contemplated on the part of 10 the City by this Series Resolution, including, but not limited to, the Tax Exemption Certificate referred to in Section 5.1 hereof. Section 6.4. Construction Except to the extent set forth herein, all of the applicable terms, conditions and provisions of the Master Resolution shall be deemed and construed to apply to the Series 2010E Bonds and are hereby incorporated by reference and made a part hereof to the same extent as if fully set forth herein. Except as may otherwise be provided herein, the Master Resolution shall remain in full force and effect. Section 6.5. Severability If any section, paragraph, or provision of this Series Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions. Section 6.6. Repeal of Conflicting Ordinances or Resolutions and Effective Date All other ordinances, resolutions and orders, or parts thereof, in conflict with the provisions of this Series Resolution are, to the extent of such conflict, hereby repealed; and this Series Resolution shall be in effect from and after its adoption. PASSED AND APPROVED this 10 day of August, 2010. Mayor ATTEST: 'City Clerk 11 CERTIFICATE STATE OF IOWA ) ) SS COUNTY OF DUBUQUE) I, the undersigned City Clerk of Dubuque, Iowa, do hereby certify that attached is a true and complete copy of the portion of the corporate records of said Municipality showing proceedings of the Council, and the same is a true and complete copy of the action taken by said Council with respect to said matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council (a copy of the face sheet of said agenda being attached hereto) pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty -four hours prior to the commencement of the meeting as required by said law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective city offices as indicated therein, that no Council vacancy existed except as may be stated in said proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of said Municipality hereto affixed this 1 l day of August, 2010. ity Clerk, Dubuque, Iowa SEAL 12 EXHIBIT A REGISTERED Bond No. R -_ CITY OF DUBUQUE, IOWA SEWER REVENUE CAPITAL LOAN NOTE FORM OF SERIES 2010E BONDS REGISTERED STATE OF IOWA $64,885,000 SERIES 2010E Rate Final Maturity Dated Date 3.00% REGISTERED OWNER: PRINCIPAL AMOUNT: June 1, 2039 August 18, 2010 IOWA FINANCE AUTHORITY SIXTY FOUR MILLION, EIGHT HUNDRED EIGHTY FIVE THOUSAND DOLLARS The City of Dubuque, Iowa, a municipal corporation organized and existing under and by virtue of the Constitution and laws of the State of Iowa (the "Issuer "), for value received, promises to pay from the source and as hereinafter provided, to IOWA FINANCE AUTHORITY or registered assigns, the principal sum of Sixty Four Million, Eight Hundred Eighty Five Thousand Dollars ($64,885,000) in lawful money of the United States of America, on the maturity dates and in the principal amounts set forth on the Debt Service Schedule attached hereto and incorporated herein by this reference, with interest on said sum from the date of each advancement made under a certain Loan and Disbursement Agreement, dated as of the date hereof until paid at the rate of 3.0% per annum, payable on December 1, 2010, and semi - annually thereafter on the 1st day of June and December in each year. As set forth on said Debt Service Schedule, principal shall be payable on June 1, 2014 and annually thereafter on the first day of June in the amounts set forth therein until principal and interest are fully paid, except that the final installment of the entire balance of 13 principal and interest, if not sooner paid, shall become due and payable on June 1, 2039. Notwithstanding the foregoing or any other provision hereof, principal and interest shall be payable as shown on said Debt Service Schedule until completion of the Series 2010E Project, at which time the final Debt Service Schedule shall be determined by the Trustee and attached hereto based upon actual advancements, final costs and completion of the Series 2010E Project, all as provided in the administrative rules governing the Iowa Water Pollution Control Works Financing Program. Payment of principal and interest of this Note shall at all times conform to said Debt Service Schedule and the rules of the Iowa Water Pollution Control Works Financing Program. Interest and principal shall be paid to the registered holder of the Note as shown on the records of ownership maintained by the Registrar as of the 15th day preceding such interest payment date. Interest shall be computed on the basis of a 360 -day year of twelve 30 -day months. This Note is issued pursuant to the provisions of Sections 384.24A and 384.83 of the Code of Iowa, for the purpose of paying costs of acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or part of the System, including those costs associated with the Water Pollution Control Plant Modification Project and the refinancing of the Sewer Revenue Capital Loan Notes Anticipation Project Note, Series 2009, dated March 11, 2009, issued in respect of such costs (as described in the Series Resolution hereinafter referred to), and evidences amounts payable under a certain Loan and Disbursement Agreement, dated as of the date hereof, in conformity to a Series Resolution of the City Council of said City duly passed and approved. For a complete statement of the revenues and funds from which and the conditions under which this Note is payable, a statement of the conditions under which additional notes or bonds of equal standing may be issued, and the general covenants and provisions pursuant to which this Note is issued, reference is made to the above - described Loan and Disbursement Agreement and Series Resolution. This Note is subject to optional redemption at a price of par plus accrued interest (i) on any date upon receipt of written consent of the Iowa Finance Authority or (ii) in the event that all or substantially all of the Series 2010E Project is damaged or destroyed. Any optional redemption of this Note may be made from any funds regardless of source, in whole or from time to time in part, in inverse order of maturity, by lot by giving thirty (30) days notice of redemption by certified or registered mail, to the Iowa Finance Authority (or any other registered owner of the Note). This Note is also subject to mandatory redemption as set forth in Section 5 of the Agreement. Ownership of this Note may be transferred only by transfer upon the books kept for such purpose by the Registrar. Such transfer on the books shall occur only upon 14 presentation and surrender of this Note at the office of the Registrar as designated below, together with an assignment duly executed by the owner hereof or his duly authorized attorney in the form as shall be satisfactory to the Registrar. Issuer reserves the right to substitute the Registrar and Paying Agent but shall, however, promptly give notice to registered Bondholders of such change. All Notes shall be negotiable as provided in Article 8 of the Uniform Commercial Code, subject to the provisions for registration and transfer contained in the Master Resolution. This Note, other obligations currently outstanding, and such other revenue bonds or notes of the Issuer as may in the future be issued on a parity therewith as Senior Bonds under the Master Resolution, are equally and ratably secured by pledge of the "Net Revenues" of the System, as defined in the Master Resolution. THE NOTES AND THE INTEREST THEREON ARE PAYABLE SOLELY AND ONLY FROM THE NET REVENUES. NEITHER THE PAYMENT OF THE PRINCIPAL NOR ANY PART THEREOF NOR ANY INTEREST THEREON CONSTITUTES A DEBT, LIABILITY OR OBLIGATION OF THE ISSUER WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER PROVISION WHATSOEVER. THE ISSUER HAS NO AUTHORITY TO LEVY ANY TAXES TO PAY THE NOTES. The Issuer has covenanted and hereby covenants and agrees at all times while any Notes are Outstanding and unpaid to budget for and collect amounts in respect of the use of the System fully sufficient at all times to: (i) provide for 100% of the budgeted Operation and Maintenance Expenses of the System and for the accumulation in the Revenue Fund of a reasonable reserve therefor, and (ii) produce Net Revenues in each Fiscal Year which will: (a) equal at least 110% of the Debt Service Requirement on all Senior Bonds then Outstanding for the year of computation, (b) enable the Issuer to make all required payments, if any, into the Debt Service Reserve Fund and the Rebate Fund, (c) enable the Issuer to accumulate an amount which, in the judgment of the Council, is adequate to meet the costs of major renewals, replacements, repairs, additions, betterments and improvements to the System, necessary to keep the same in good operating condition or as is required by any governmental agency having jurisdiction over the System, and (d) remedy all deficiencies in required payments into any of the funds and accounts established under the Master Resolution from prior Fiscal Years. The Master Resolution contains a more particular statement of the covenants and provisions securing the Notes, the conditions under which the owner of this Note may enforce covenants (other than the covenant to pay Principal of and interest on this Note when due from the sources provided, the right to enforce which is unconditional), the conditions upon which additional revenue bonds may be issued on a parity or achieve 15 parity status with this Note under the Master Resolution, and the conditions upon which the Master Resolution may be amended with the consent of the owners of not less than two- thirds in aggregate Principal amount of the Bonds Outstanding or the issuer of any Credit Facility, if any, of such Bonds. Upon the occurrence of an Event of Default under the Master Resolution, the owner of this Note shall be entitled to the remedies provided by the Master Resolution. And it is hereby represented and certified that all acts, conditions and things requisite, according to the laws and Constitution of the State of Iowa, to exist, to be had, to be done, or to be performed precedent to the lawful issue of this Note, have been existent, had, done and performed as required by law. IN TESTIMONY WHEREOF, said Issuer by its City Council has caused this Note to be signed by the manual signature of its Mayor and attested by the manual signature of its City Clerk, and authenticated by the manual signature of an authorized representative of the Registrar, the City Treasurer. ATTEST:' CITY OF DUBUQUE, IOWA LIZ VIA City Clerk Mayor (SEAL) Date of authentication: This is one of the Series 2010E Bonds described in the within mentioned Series Resolution, as registered by the City Treasurer. CITY TREASURER, Registrar M Authorized Signature Registrar and Transfer Agent: City Treasurer Paying Agent: City Treasurer 16 ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto (Social Security or Tax Identification No. ) the within Revenue Bond and does hereby irrevocably constitute and appoint attorney in fact to transfer the said Revenue Bond on the books kept for registration of the within Revenue Bond, with full power of substitution in the premises. Dated (Person(s) executing this Assignment sign(s) here) SIGNATURE GUARANTEED IMPORTANT - READ CAREFULLY The signature(s) to this Power must correspond with the name(s) as written upon the face of the certificate(s) or bond(s) in every particular without alteration or enlargement or any change whatever. Signature guarantee must be provided in accordance with the prevailing standards and procedures of the Registrar and Transfer Agent. Such standards and procedures may require signature to be guaranteed by certain eligible guarantor institutions that participate in a recognized signature guarantee program. INFORMATION REQUIRED FOR REGISTRATION OF TRANSFER Name of Transferee(s) Address of Transferee(s) Social Security or Tax Identification Number of Transferee(s) Transferee is a(n): Individual* Corporation Partnership Trust 17 *If the Bond is to be registered in the names of multiple individual owners, the names of all such owners and one address and social security number must be provided. The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though written out in full according to applicable laws or regulations:. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common IA UNIF TRANS MIN ACT - ..........Custodian.......... (Cust) (Minor) under Iowa Uniform Transfers to Minors Act ................ (State) comell/ 664496.1 /MSWord \10422.112 18 (This Notice to be posted) NOTICE AND CALL OF PUBLIC MEETING Governmental Body: The City Council of Dubuque, Iowa. Date of Meeting: August 10, 2010 Time of Meeting: 4:45 o'clock P.M. Place of Meeting: Historic Federal Building, 350 West 6th Street, Dubuque, Iowa. PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental body will meet at the date, time and place above set out. The tentative agenda for said meeting is as follows: $64,885,000 Sewer Revenue Capital Loan Notes, Series 2010E Approve forms of Tax Exemption Certificate and Loan and Disbursement Agreement. Series Resolution authorizing and providing for the issuance and securing the payment of $64,885,000 Sewer Revenue Capital Loan Notes, Series 2010E, by the City of Dubuque, Iowa under the provisions of Chapter 3 84 of the Code of Iowa, providing for a method of payment thereof, approving Loan and Disbursement Agreement, and other related matters Such additional matters as are set forth on the additional two page(s) attached hereto. This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of Iowa, and the local rules of said governmental body. City Clerk, Dubuque, Iowa August 11, 2010 The City Council of Dubuque, Iowa, met in special session, in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at 4:45 o'clock P.M., on the above date. There were present Mayor Roy D. Buol, in the chair, and the following named Council Members: Karla Braig, Joyce Connors, Ric Jones, Kevin Lynch, David Resnick Absent: Dirk Voetberg Council Member Joyce Connors moved that the forms of Tax Exemption Certificate and Loan and Disbursement Agreement be placed on file and approved. Council Member Karla Braig seconded the motion and the roll being called thereon, the vote was as follows: AYES: Braig, Buol,. Connors, Jones, Lynch, Resnick NAYS: None Council Member Joyce Connors introduced the following Resolution entitled "SERIES RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE PAYMENT OF $64,885,000 SEWER REVENUE CAPITAL LOAN NOTES, SERIES 2010E, BY THE CITY OF DUBUQUE, IOWA UNDER THE PROVISIONS OF CHAPTER 3 84 OF THE CODE OF IOWA, PROVIDING FOR A METHOD OF PAYMENT THEREOF, APPROVING LOAN AND DISBURSEMENT AGREEMENT, AND OTHER RELATED MATTERS ", and moved its adoption. Council Member Karla Braig seconded the motion to adopt. The roll was called and the vote was: AYES: Braig, Buol, Connors, Jones, Lynch, Resnick NAYS: None Whereupon the Mayor declared the following Resolution duly adopted: 2 RESOLUTION NO. 302 -10 SERIES RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE PAYMENT OF $64,885,000 SEWER REVENUE CAPITAL LOAN NOTES, SERIES 2010E, BY THE CITY OF DUBUQUE, IOWA UNDER THE PROVISIONS OF CHAPTER 384 OF THE CODE OF IOWA, PROVIDING FOR A METHOD OF PAYMENT THEREOF, APPROVING LOAN AND DISBURSEMENT AGREEMENT, AND OTHER RELATED MATTERS WHEREAS, the City Council of the City of Dubuque, Iowa (the "City ") has heretofore established charges, rates and rentals for services which are and will continue to be collected as system revenues of the Municipal Sanitary Sewer System, and said revenues have not been pledged and are available for the payment of sewer revenue bonds or notes, subject to the following premises; and WHEREAS, by Resolution No. 437 -08 passed and approved on December 15, 2008 (the "Master Resolution "), the City Council heretofore has authorized the issuance of $2,000,000 Sewer Revenue Capital Loan Notes, Series 2009A, for the purpose of financing the construction of the Series 2009A Project described therein, and to pay related costs of issuance; and WHEREAS, Section 8.3 of the Master Resolution authorizes the issuance of additional Senior Bonds, including Senior SRF Bonds, by the City from time to time, if all of the conditions set forth therein are satisfied; and WHEREAS, the notice of intention of the City Council to take action for the issuance of not to exceed $65,000,000 Sewer Revenue Capital Loan Notes has heretofore been duly published and no objections to such proposed action have been filed; and WHEREAS, the Council has determined to issue additional. Senior SRF Bonds, and has determined that, upon passage of this Series Resolution all of the requirements of Article VIII of the Master Resolution with respect to the issuance of additional Senior SRF Bonds will have been satisfied. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IN THE COUNTY OF DUBUQUE, STATE OF IOWA: ARTICLE I DEFINITIONS Section 11. Definitions Except as otherwise provided below in this Article I, all words and terms defined in Article I of the Master Resolution shall have the same meanings in this Series Resolution as such defined words and terms are given in Article I of the Master Resolution. In addition, the following terms shall have the following meanings in this Series Resolution unless the text expressly or by necessary implication requires otherwise: "Agreement" shall mean the Loan and Disbursement Agreement dated as of the Closing between the City and the Original Purchaser relating to the Loan made to the City under the Program. "City" or "Issuer" shall mean the City of Dubuque, Iowa. "Closing" shall mean the date of execution of the Agreement and delivery of the Series 2010E Bonds to the Original Purchaser and the funding of the Loan by the Trustee. "Loan" shall mean the total principal amount allocated by the Original Purchaser to the City under the Program, equal in amount to the aggregate principal amount of the Series 2010E Bonds. "Master Resolution" means the City Council Resolution No. 437 -08, passed and approved on December 15, 2008, entitled "Master Resolution relating to the issuance of Sewer Revenue Bonds by the City of Dubuque, Iowa under the provisions of Chapter 384 of the Code of Iowa, authorizing and providing for the issuance and securing the payment of $2,000,000 Sewer Revenue Capital Loan Notes, Series 2009A, providing for a method of payment thereof, and related matters," as the same may be amended from time to time. "Original Purchaser" means the Iowa Finance Authority, as the purchaser of the Series 2010E Bonds from the City at the time of their original issuance. "Program" shall mean the Iowa Water Pollution Control Works Financing Program administered by the Original Purchaser. 11 "Series 2010E Bonds" means the $64,885,000 Sewer Revenue Capital Loan Notes, Series 201 OE, dated the date of delivery, authorized to be issued pursuant to this Series Resolution. "Series 2010E Costs of Issuance Account" means the account by that name within the Project Fund established in Section 5.1 of the Master Resolution. "Series 2010E Project" shall mean the Project being financed with the proceeds of the Series 2010E Bonds, including those costs associated with the Water Pollution Control Plant Modification Project and the refinancing of the Sewer Revenue Capital Loan Notes Anticipation Project Note, Series 2009, dated March 11, 2009, issued in respect of such costs, as described generally in the Agreement and more particularly in the plans and specifications on file from time to time with the City Clerk. "Series 2010E Project Account" means the account by that name within the Project Fund established in Section 5.1 of the Master Resolution. "Series 2010E Rebate Account" means the account by that name within the Rebate Fund established in Section 6.10 of the Master Resolution. "Series Resolution" means this Resolution of the Council. "Tax Exemption Certificate" means the Tax Exemption Certificate executed by the Treasurer and delivered at the time .of issuance and delivery of the Series 2010E Bonds. "Trustee" shall mean Wells Fargo Bank, National Association, with its principal office located in the City of Des Moines, Iowa, and its successors and any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor trustee under the Program. 5 ARTICLE II THE SERIES 2010E BONDS Section 2.1. Series 2010E Bonds - Authorization and Purpose Pursuant to the provisions of the Master Resolution and in particular Section 8.3 thereof, there are hereby authorized to be issued, negotiable, serial, fully registered Sewer Revenue Capital Loan Notes, Series 2010E, in the aggregate principal amount of $64,885,000, dated the date of delivery, for the purpose of constructing the Series 2010E Project and paying Project Costs relating thereto, and to pay related Costs of Issuance. The Series 2010E Bonds shall be issued as Senior SRF Bonds under the terms of the Master Resolution, for the purpose of paying costs of the Series 2010E Project. The Council, pursuant to Sections 384.24A and 384.82 of the Code of Iowa, hereby finds and determines that it is necessary and advisable to issue said Series 2010E Bonds authorized by the Agreement and this Resolution. The Series 2010E Bonds and the Registrar's Certificate of Authentication shall be in substantially the form set forth in Exhibit A attached hereto, with such variations, omissions, substitutions and insertions as are required or permitted by this Series Resolution. The Series 2010E Bonds shall be executed by the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the City Clerk of the Council, and shall be fully registered as to both principal and interest as provided in this Series Resolution; principal, interest and premium, if any shall be payable at the office of the Paying Agent by mailing of a check, wire transfer or automated clearing house system transfer to the registered owner of the Bond. The Series 2010E Bonds shall be in the denomination of $1,000 or. multiples thereof and may at the request of the Original Purchaser be initially issued as a single Bond in the denomination of $64,885,000 and numbered R -1. The Series 2010E Bonds shall be issued pursuant to the provisions of Sections 384.24A and 384.82 of the Code of Iowa for the aforesaid purpose, be designated "SEWER REVENUE CAPITAL LOAN NOTE, SERIES 2010E ", be dated the date of delivery, and bear interest at the rate of 3.0% per annum from the date of each advancement made under the Agreement, until payment thereof, at the office of the Paying Agent, said interest payable on December 1, 2010, and semi - annually thereafter on the 1st day of June and December in each year until maturity as set forth on the Debt Service Schedule attached to the Agreement as Exhibit A and incorporated herein by this reference. As set forth on said Debt Service Schedule, principal shall be payable on June 1, 2014 and annually thereafter on the 1st day of June in the amounts set forth therein until principal and interest are fully paid, except that the final installment of the entire balance of principal and interest, if not sooner paid, shall become due and payable on June 1, 2039. Notwithstanding the foregoing or any other provision hereof, principal and interest shall be payable as shown on said Debt Service Schedule until completion of the Series 2010E Project, at which time the final Debt Service Schedule shall be determined by the Trustee based upon actual advancements, final costs and completion of the Series 2010E Project, all as provided in the administrative rules governing the Program. Payment of principal and interest on the Series 2010E Bonds shall at all times conform to said Debt Service Schedule and the rules of the Program. In addition to the payment of principal of and interest on the Series 2010E Bonds, the City also agrees to pay the Initiation Fee and the Servicing Fee as defined and in accordance with the terms of the Agreement. Section 2.2. Issuance of Series 2010E Bonds in Certificated Form The Series 2010E Bonds shall be issued as Bonds in Authorized Denominations and may at the request of the Original Purchaser be issued as a single Series 2010E Bond in the full authorized amount thereof, and shall be registered in the name of the Original Purchaser. Section 2.3. Appointment of RelZistrar The Treasurer is hereby appointed as Registrar for the Series 2010E Bonds under the terms of this Series Resolution. Section 2.4. Execution, Authentication and Delivery of the Series 2010E Bonds Upon the adoption of this Resolution, the Mayor and City Clerk shall execute and deliver the Series 2010E Bonds to the Registrar, who shall authenticate the same and deliver the same to or upon order of the Original Purchaser. No such Series 2010E Bond shall be valid or obligatory for any purpose or shall be entitled to any right or benefit hereunder unless the Registrar shall duly endorse and execute on such Series 2010E Bond a Certificate of Authentication substantially in the form of the Certificate herein set forth. Such Certificate upon any such Series 2010E Bond executed on behalf of the Issuer shall be conclusive evidence that the Series 2010E Bond so authenticated has been duly issued under this Series Resolution and that the holder thereof is entitled to the benefits of this Series Resolution. 7 ARTICLE III REDEMPTION OF BONDS Section 3.1. Optional Redemption The Series 2010E Bonds are subject to optional redemption at a price of par plus accrued interest (i) on any date upon receipt of written consent of the Original Purchaser or (ii) in the event that all or substantially all of the Series 2010E Project is damaged or destroyed. Any optional redemption of the Series 2010E Bonds may be made from any funds regardless of source, in whole or from time to time in part, in inverse order of maturity, by giving not less than thirty (30) days notice of redemption by certified or registered mail to the Original Purchaser (or any other registered owner of the Series 2010E Bonds). The terms of redemption shall be par, plus accrued interest to date of call. The Series 2010E Bonds are also subject to mandatory redemption as set forth in Section 5 of the Agreement. ARTICLE IV DELIVERY AND APPLICATION OF PROCEEDS Section 4.1. Application of Series 2010E Bond Proceeds The Series 2010E Bonds shall be delivered as provided in Sections 6.1 and 6.2 and the proceeds thereof shall be applied as follows: (i) An amount sufficient to pay the Costs of Issuance of the Series 2010E Bonds shall be deposited into the Series 2010E Costs of Issuance Account. (ii) The balance of proceeds shall be deposited into the Series 2010E Project Account of the Project Fund and applied thereafter to pay Project Costs of the Series 2010E Project. Section 4.2. No Adiustment to Debt Service Reserve Requirement The Series 2010E Bonds shall be issued as Senior SRF Bonds under the Master Resolution, and shall not be secured by or payable from amounts held in the Debt Service Reserve Fund established in the Master Resolution. Upon issuance of the Series 2010E Bonds, the amount to be accumulated and maintained in the Debt Service Reserve Fund shall not be increased, but shall continue to remain equal to 100% of the Debt Service Reserve Requirement computed on a basis which includes all Senior Bonds which will be Outstanding immediately after issuance of the Series 2010E Bonds and which are not Senior SRF Bonds. ARTICLE V TAX PROVISIONS Section 5.1. Disposition of Bond Proceeds; Arbitrage Not Permitted The City reasonably expects and covenants that no use will be made of the proceeds from the issuance and sale of the Series 2010E Bonds issued hereunder which will cause any of the Series 2010E Bonds to be classified as arbitrage bonds within the meaning of Section 148(a) and (b) of the Code, and that throughout the term of said Series 2010E Bonds it will comply with the requirements of said statute and regulations issued thereunder. To the best knowledge and belief of the City, there are no facts or circumstances that would materially change the foregoing statements or the conclusion that it is not expected that the proceeds of the Series 2010E Bonds will be used in a manner that would cause such Bonds to be arbitrage bonds. Without limiting the generality of the foregoing, the City hereby agrees to comply with the provisions of the Tax Exemption Certificate and the provisions of the Tax Exemption Certificate are hereby incorporated by reference as part of this Series Resolution. The Treasurer is hereby directed to make and insert all calculations and determinations necessary to complete the Tax Exemption Certificate in all respects and to execute and deliver the Tax Exemption Certificate at issuance of the. Series 2010E Bonds to certify as to the reasonable expectations and covenants of the City at that date. The City covenants that it will treat as yield restricted any proceeds of the Series 2010E Bonds remaining unexpended after three years from the issuance and any other funds required by the Tax Exemption Certificate to be so treated. If any investments are held with respect to the Series 2010E Bonds, the City shall treat the same for the purpose of restricted yield as held in proportion to the original principal amounts of each issue. The City covenants that it will exceed any investment yield restriction provided in this Series Resolution only in the event that it shall first obtain an opinion of bond counsel that the proposed investment action will not cause the Series 2010E Bonds to be classified as arbitrage bonds under Section 148(a) and (b) of the Code. The City covenants that it will proceed with due diligence to spend the proceeds of the Series 2010E Bonds for the purpose set forth in this Series Resolution. The City further covenants that it will make no change in the use of the proceeds available for the construction of facilities or change in the use of any portion of the facilities constructed therefrom by persons other than the City or the general public unless it has obtained an opinion of bond counsel or a revenue ruling that the proposed project or use will not be of 1 such character as to cause interest on any of the Series 2010E Bonds not to be exempt from federal income taxes in the hands of holders under the provisions of the Code. Section 5.2. Additional Covenants, Representations and Warranties of the Cam. The City certifies and covenants with the purchasers and holders of the Series 2010E Bonds from time to time outstanding that the City through its officers, (a) will make such further specific covenants, representations and assurances as may be necessary or advisable; (b) comply with all representations, covenants and assurances contained in the Tax Exemption Certificate, which Tax Exemption Certificate shall constitute a part of the contract between the City and the owners of the Series 2010E Bonds; (c) consult with bond counsel (as defined in the Tax Exemption Certificate); (d) pay to the United States, as necessary, such sums of money representing required rebates of excess arbitrage profits relating to the Series 2010E Bonds; (e) file such forms, statements and supporting documents as may be required and in a timely manner; and (f) if deemed necessary or advisable by its officers, to employ and pay fiscal agents, financial advisors, attorneys and other persons to assist the City in such compliance. ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.1. Delivery of Series 2010E Bonds The City shall deliver the executed Agreement and the Series 2010E Bonds to the Original Purchaser at the price of par on the date of Closing. Delivery of the executed Agreement and the Series 2010E Bonds shall be made to the Original Purchaser as soon as practicable after the effective date of this Series Resolution. Section 6.2. Approval of Agreement The Agreement in substantially the form presented at this meeting of the Council is hereby authorized and approved, and the Mayor and City Clerk are authorized to execute and deliver the Agreement, with such changes therein as such officials deem appropriate, for and on behalf of the City, such officers' signatures thereon being conclusive evidence, of such officials' and the City's approval thereof. Section 6.3. General Authorization From and after the date of adoption of this Series Resolution, the officers, employees and agents of the City are hereby authorized to do all such acts and things and to execute and deliver any and all other documents, agreements, certificates and instruments relating to the Series 2010E Bonds, the investment of the proceeds thereof and the other transactions contemplated on the part of 10 the City by this Series Resolution, including, but not limited to, the Tax Exemption Certificate referred to in Section 5.1 hereof. Section 6.4. Construction Except to the extent set forth herein, all of the applicable terms, conditions and provisions of the Master Resolution shall be deemed and construed to apply to the Series 2010E Bonds and are hereby incorporated by reference and made a part hereof to the same extent as if fully set forth herein. Except as may otherwise be provided herein, the Master Resolution shall remain in full force and effect. Section 6.5. Severability If any section, paragraph, or provision of this Series Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions. Section 6.6. Repeal of Conflicting Ordinances or Resolutions and Effective Date All other ordinances, resolutions and orders, or parts thereof, in conflict with the provisions of this Series Resolution are, to the extent of such conflict, hereby repealed; and this Series Resolution shall be in effect from and after its adoption. PASSED AND APPROVED this 10 day of August, 2010. Mayor ATTEST: i City Clerk 11 CERTIFICATE STATE OF IOWA ) ) SS COUNTY OF DUBUQUE) I, the undersigned City Clerk of Dubuque, Iowa, do hereby certify that attached is a true and complete copy of the portion of the corporate records of said Municipality showing proceedings of the Council, and the same is a true and complete copy of the action taken by said Council with respect to said matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council (a copy of the face sheet of said agenda being attached hereto) pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty -four hours prior to the commencement of the meeting as required by said law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective city offices as indicated therein, that no Council vacancy existed except as may be stated in said proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of said Municipality hereto affixed this 1 l day of August, 2010. ity Clerk, Dubuque, Iowa SEAL 12 EXHIBIT A REGISTERED Bond No. R CITY OF DUBUQUE, IOWA SEWER REVENUE CAPITAL LOAN NOTE FORM OF SERIES 2010E BONDS REGISTERED STATE OF IOWA $64,885,000 SERIES 2010E Rate Final Maturity Dated Date 3.00% REGISTERED OWNER: PRINCIPAL AMOUNT: June 1, 2039 August 18, 2010 IOWA FINANCE AUTHORITY SIXTY FOUR MILLION, EIGHT HUNDRED EIGHTY FIVE THOUSAND DOLLARS The City of Dubuque, Iowa, a municipal corporation organized and existing under and by virtue of the Constitution and laws of the State of Iowa (the "Issuer "), for value received, promises to pay from the source and as hereinafter provided, to IOWA FINANCE AUTHORITY or registered assigns, the principal sum of Sixty Four Million, Eight Hundred Eighty Five Thousand Dollars ($64,885,000) in lawful money of the United States of America, on the maturity dates and in the principal amounts set forth on the Debt Service Schedule attached hereto and incorporated herein by this reference, with interest on said sum from the date of each advancement made under a certain Loan and Disbursement Agreement, dated as of the date hereof until paid at the rate of 3.0% per annum, payable on December 1, 2010, and semi - annually thereafter on the 1st day of June and December in each year. As set forth on said Debt Service Schedule, principal shall be payable on June 1, 2014 and annually thereafter on the first day of June in the amounts set forth therein until principal and interest are fully paid, except that the final installment of the entire balance of 13 principal and interest, if not sooner paid, shall become due and payable on June 1, 2039. Notwithstanding the foregoing or any other provision hereof, principal and interest shall be payable as shown on said Debt Service Schedule until completion of the Series 2010E Project, at which time the final Debt Service Schedule shall be determined by the Trustee and attached hereto based upon actual advancements, final costs and completion of the Series 2010E Project, all as provided in the administrative rules governing the Iowa Water. Pollution Control Works Financing Program. Payment of principal and interest of this Note shall at all times conform to said Debt Service Schedule and the rules of the Iowa Water Pollution Control Works Financing Program. Interest and principal shall be paid to the registered holder of the Note as shown on the records of ownership maintained by the Registrar as of the 15th day preceding such interest payment date. Interest shall be computed on the basis of a 360 -day year of twelve 30 -day months. This Note is issued pursuant to the provisions of Sections 384.24A and 384.83 of the Code of Iowa, for the purpose of paying costs of acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or part of the System, including those costs associated with the Water Pollution Control Plant Modification Project and the refinancing of the Sewer Revenue Capital Loan Notes Anticipation Project Note, Series 2009, dated March 11, 2009, issued in respect of such costs (as described in the Series Resolution hereinafter referred to), and evidences amounts payable under a certain Loan and Disbursement Agreement, dated as of the date hereof, in conformity to a Series Resolution of the City Council of said City duly passed and approved. For a complete statement of the revenues and funds from which and the conditions under which this Note is payable, a statement of the conditions under which additional notes or bonds of equal standing may be issued, and the general covenants and provisions pursuant to which this Note is issued, reference is made to the above - described Loan and Disbursement Agreement and Series Resolution. This Note is subject to optional redemption at a price of par plus accrued interest (i) on any date upon receipt of written consent of the Iowa Finance Authority or (ii) in the event that all or substantially all of the Series 2010E Project is damaged or destroyed. Any optional redemption of this Note may be made from any funds regardless of source, in whole or from time to time in part, in inverse order of maturity, by lot by giving thirty (30) days notice of redemption by certified or registered mail, to the Iowa Finance Authority (or any other registered owner of the Note). This Note is also subject to mandatory redemption as set forth in Section 5 of the Agreement. Ownership of this Note may be transferred only by transfer upon the books kept for such purpose by the Registrar. Such transfer on the books shall occur only upon 14 presentation and surrender of this Note at the office of the Registrar as designated below, together with an assignment duly executed by the owner hereof or his duly authorized attorney in the form as shall be satisfactory to the Registrar. Issuer reserves the right to substitute the Registrar and Paying Agent but shall, however, promptly give notice to registered Bondholders of such change. All Notes shall be negotiable as provided in Article 8 of the Uniform Commercial Code, subject to the provisions for registration and transfer contained in the Master Resolution. This Note, other obligations currently outstanding, and such other revenue bonds or notes of the Issuer as -may in the future be issued on a parity therewith as Senior Bonds under the Master Resolution, are equally and ratably secured by pledge of the "Net Revenues" of the System, as defined in the Master Resolution. THE NOTES AND THE INTEREST THEREON ARE PAYABLE SOLELY AND ONLY FROM THE NET REVENUES. NEITHER THE PAYMENT OF THE PRINCIPAL NOR ANY PART THEREOF NOR ANY INTEREST THEREON CONSTITUTES A DEBT, LIABILITY OR OBLIGATION OF THE ISSUER WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER PROVISION WHATSOEVER. THE ISSUER HAS NO AUTHORITY TO LEVY ANY TAXES TO PAY THE NOTES. The Issuer has covenanted and hereby covenants and agrees at all times while any Notes are Outstanding and unpaid to budget for and collect amounts in respect of the use of the System fully sufficient at all times to: (i) provide for 100% of the budgeted Operation and Maintenance Expenses of the System and for the accumulation in the Revenue Fund of a reasonable reserve therefor, and (ii) produce Net Revenues in each Fiscal Year which will: (a) equal at least 110% of the Debt Service Requirement on all Senior Bonds then Outstanding for the year of computation, (b) enable the Issuer to make all required payments, if any, into the Debt Service Reserve Fund and the Rebate Fund, (c) enable the Issuer to accumulate an amount which, in the judgment of the Council, is adequate to meet the costs of major renewals, replacements, repairs, additions, betterments and improvements to the System, necessary to keep the same in good operating condition or as is required by any governmental agency having jurisdiction over the System, and (d) remedy all deficiencies in required payments into any of the funds and accounts established under the Master Resolution from prior Fiscal Years. The Master Resolution contains a more particular statement of the covenants and provisions securing the Notes, the conditions under which the owner of this Note may enforce covenants (other than the covenant to pay Principal of and interest on this Note when due from the sources provided, the right to enforce which is unconditional), the conditions upon which additional revenue bonds may be issued on a parity or achieve W parity status with this Note under the Master Resolution, and the conditions upon which the Master Resolution may be amended with the consent of the owners of not less than two- thirds in aggregate Principal amount of the Bonds Outstanding or the issuer of any Credit Facility, if any, of such Bonds. Upon the occurrence of an Event of Default under the Master Resolution, the owner of this Note shall be entitled to the remedies provided by the Master Resolution. And it is hereby represented and certified that all acts, conditions and things requisite, according to the laws and Constitution of the State of Iowa, to exist, to be had, to be done, or to be performed precedent to the lawful issue of this Note, have been existent, had, done and performed as required by law. IN TESTIMONY WHEREOF, said Issuer by its City Council has caused this Note to be signed by the manual signature of its Mayor and attested by the manual signature of its City Clerk, and authenticated by the manual signature of an authorized representative of the Registrar, the City Treasurer. ATTEST: CITY OF DUBUQUE, IOWA L O SM n City Clerk Mayor (SEAL) Date of authentication: This is one of the Series 2010E Bonds described in the within mentioned Series Resolution, as registered by the City Treasurer. CITY TREASURER, Registrar 52 Authorized Signature Registrar and Transfer Agent: City Treasurer Paying Agent: City Treasurer L ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto (Social Security or Tax Identification No. the within Revenue Bond and does hereby irrevocably constitute and appoint attorney'in fact to transfer the said Revenue Bond on the books kept for registration of the within Revenue Bond, with full power of substitution in the premises. Dated (Person(s) executing this Assignment sign(s) here) SIGNATURE GUARANTEED IMPORTANT - READ CAREFULLY The signature(s) to this Power must correspond with the name(s) as written upon the face of the certificate(s) or bond(s) in every particular without alteration or enlargement or any change whatever. Signature guarantee must be provided in accordance with the prevailing standards and procedures of the Registrar and Transfer Agent. Such standards and procedures may require signature to be guaranteed by certain eligible guarantor institutions that participate in a recognized signature guarantee program. INFORMATION REQUIRED FOR REGISTRATION OF TRANSFER Name of Transferee(s) Address of Transferee(s) Social Security or Tax Identification Number of Transferee(s) Transferee is a(n): Individual* Corporation Partnership Trust 17 *If the Bond is to be registered in the names of multiple individual owners, the names of all such owners and one address and social security number must be provided. The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common IA UNIF TRANS MIN ACT - ..........Custodian.......... (Cust) (Minor) under Iowa Uniform Transfers to Minors Act ................ (State) comell/ 664496.1 /MSWord \10422.112 18 TRANSCRIPT CERTIFICATE I, the undersigned, being first duly sworn, do hereby depose and certify that I am the duly appointed, qualified and acting Clerk of the City of Dubuque, Iowa, and that as such Clerk I have in my possession or have access to the complete corporate records of said City and of its Council and officials, and that I have carefully compared the transcript hereto attached with the aforesaid corporate records and that said transcript hereto attached is a true and complete copy of all the corporate records in relation to the authorization, issuance and disposition of a $64,885,000 Sewer Revenue Capital Loan Note, Series 2010E, of said City dated the date of delivery, and that said transcript hereto attached contains a true and complete statement of all the measures adopted and proceedings, acts and things had, done and performed up to the present time, in relation to the authorization, issuance and disposition of said Note, and that said Council consists of a Mayor and six (6) Council Members, and that said offices were duly and lawfully filled by the individuals listed in the attached transcript as of the dates and times referred to therein. I further certify that said City is and throughout the period of said proceedings has been governed under the Mayor /Council form of municipal government authorized by Chapter 372, City Code of Iowa, under the provisions of its charter as recorded with the Secretary of State. I further certify that all meetings of the City Council of said City at which action was taken in connection with said Note were open to the public at all times in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and was duly given at least twenty -four hours prior to the commencement of the meeting by notification of the communications media having requested such notice and posted on a bulletin board or other prominent place designated for the purpose and easily accessible to the public at the principal office of the Council all pursuant to the provisions and in accordance with the conditions of the local rules of the Council and Chapter 21, Code of Iowa. I further certify that no City officer or employee has any interest in the contract for the sale of the Note or any matter incidental thereto, according to my best knowledge and belief. I further certify the stated officers whose signatures appear below are now the duly qualified and acting officials of the City, possessed of the offices as designated below, to- wit: -1- Mayor: Roy Buol I Original Signature) City Clerk: Jeanne Schneider (Original Signature) WI SS my hand and the seal of said City hereto attached this /81 day of , 2010, at Dubuque, Iowa. � ;t y Clerk, Dubuque, Iowa (SEAL) STATE OF IOWA ) ) SS COUNTY OF DUBUQUE ) day of ibed sw orn to before me by Jeanne Schneider, on this 2010. SUSAN M. WINTER -- e r COMMISSION N0.183274 . ' (Seal) MY COMMISSION EXPIRES , 2114111 V N ary Public in and fcr Dubuque County, Iowa DCORNELL \664532.1 \W P\ 10422.112 -2- � CIG22 TAX EXEMPTION CERTIFICATE CITY OF DUBUQUE, IOWA THIS TAX EXEMPTION CERTIFICATE made and entered into on 2010, by the City of Dubuque, State of Iowa (the "Issuer "). INTRODUCTION This Certificate is executed and delivered in connection with the issuance by the Issuer of its $64,885,000 Sewer Revenue Capital Loan Note, Series 2010 (the "Bonds "). The Bonds are issued pursuant to the provisions of the Resolution of the Issuer authorizing the issuance of the Bonds. Such Resolution provides that the covenants contained in this Certificate constitute a part of the Issuer's contract with the owners of the Bonds. The Issuer recognizes that under the Code (as defined below) the tax - exempt status of the interest received by the owners of the Bonds is dependent upon, among other things, the facts, circumstances, and reasonable expectations of the Issuer as to future facts not in existence at this time, as well as the observance of certain covenants in the future. The Issuer covenants that it will take such action with respect to the Bonds as may be required by the Code, and pertinent legal regulations issued thereunder in order to establish and maintain the tax - exempt status of the Bonds, including the observance of all specific covenants contained in the Resolution and this Certificate. ARTICLE I DEFINITIONS The following terms as used in this Certificate shall have the meanings set forth below. The terms defined in the Resolution shall retain the meanings set forth therein when used in this Certificate. Other terms used in this Certificate shall have the meanings set forth in the Code or in the Regulations. -1- "Annual Debt Service" means the principal of and interest on the Bonds scheduled to be paid during a given Bond Year. "Bonds" means the $64,885,000 aggregate principal amount of a Sewer Revenue Capital. Loan Note of the Issuer issued in registered form pursuant to the Resolution. "Bond Counsel" means Ahlers & Cooney, P.C., Des Moines, Iowa, or an attorney at law or a firm of attorneys of nationally recognized standing in matters pertaining to the tax - exempt status of interest on obligations issued by states and their political subdivisions, duly admitted to the practice of law before the highest court of any State of the United States of America. "Bond Fund" means the Sinking Fund described in the Resolution. "Bond Year ", as defined in Regulation 1.148 -1(b), means a one -year period beginning on the day after expiration of the preceding Bond Year. The first Bond Year shall be the one -year or shorter period beginning on the Closing Date and ending on a principal or interest payment date, unless Issuer selects another date. "Bond Yield" means that discount rate which produces an amount equal to the Issue Price of the Bonds when used in computing the present value of all payments of principal and interest to be paid on the Bonds, using semiannual compounding on a 360 - day year as computed under Regulation 1.148 -4. "Certificate" means this Tax Exemption Certificate. "Closing" means the delivery of the Bonds in exchange for the agreed upon purchase price. "Closing Date" means the date of Closing. "Code" means the Internal Revenue Code of 1986, as amended, and any statutes which replace or supplement the Internal Revenue Code of 1986. "Computation Date" means each five -year period from the Closing Date through the last day of the fifth and each succeeding fifth Bond Year. "Excess Earnings" means the amount earned on all Nonpurpose Investments minus the amount which would have been earned if such Nonpurpose Investments were invested at a rate equal to the Bond Yield, plus any income attributable to such excess. -2- "Final Bond Retirement Date" means the date on which the Bonds are actually paid in full. "Governmental Obligations" means direct general obligations of, or obligations the timely payment of the principal of and interest on which is unconditionally guaranteed by the United States. "Gross Proceeds ", as defined in Regulation 1..148 -1(b), means any Proceeds of the Bonds and any replacement proceeds (as defined in Regulation 1.148 -1(c)) of the Bonds. "Gross Proceeds Funds" means Project Fund and any other fund or account held for the benefit of the owners of the Bonds or containing Gross Proceeds of the Bonds except the Bond Fund and the Rebate Fund. - "Issue Price ", as defined in Regulation 1.148 -1(b), means the initial offering price of the Bonds to the public (not including bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the Bonds were sold to the public. The Purchasers have certified the Issue Price to be not more than $64,885,000. "Issuer" means City of Dubuque, State of Iowa. "Minor Portion of the Bonds ", as defined in Regulation 1.148 -2(g), means the lesser of five (5) percent of Proceeds or $100,000. The Minor Portion of the Bonds is computed to be $100,000. "Nonpurpose Investments" means any investment property which is acquired with Gross Proceeds and is not acquired to carry out the governmental purpose of the Bonds, and may include but is not limited to U.S. Treasury bonds, corporate bonds, or certificates of deposit. "Proceeds ", as defined in Regulation 1.148 -1(b), means Sale Proceeds, investment proceeds and transferred proceeds of the Bonds. "Project" means the acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or part of the Municipal Sewer System, including those costs associated with the Water Pollution Control Plant Modification Project and the refinancing of the Sewer Revenue Capital Loan Notes Anticipation Project Note, Series 2009, dated March 11, 2009, issued in respect of such costs, as more fully described in the Resolution. -3- "Project Fund" means the fund established in the Resolution. "Purchaser" means the Iowa Finance Authority, Des Moines, Iowa,, constituting the initial purchaser of the Bonds from the Issuer. "Rebate Amount" means the amount computed as described in this Certificate. "Rebate Fund" means the fund to be created, if necessary, pursuant to this Certificate. "Rebate Payment Date" means a date chosen by the Issuer which is not more than 60 days following each Computation Date or the Final Bond Retirement Date. "Regulations" means the Income Tax Regulations, amendments and successor . provisions promulgated by the Department of the Treasury under Sections 103, 148 and 149 of the Code, or other Sections of the Code relating to "arbitrage bonds ", including without limitation Regulations 1.148 -1 through 1.148 -11, 1.149(b) -1, 1.149 -d(1), 1.150 -1 and 1.150 -2. "Replacement Proceeds" include, but are not limited to, sinking funds, amounts that are pledged as security for an issue, and amounts that are replaced because of a sufficiently direct nexus to a governmental purpose of an issue. "Resolution" means the resolution of the Issuer adopted on August 10, 2010 authorizing the issuance of the Bonds. "Sale Proceeds ", as defined in Regulation 1.148 -1(b), means any amounts actually or constructively received from the sale of the Bonds, including amounts used to pay underwriter's discount or compensation and accrued interest other than pre- issuance accrued interest. "Sinking Fund" means the Bond Fund. "Tax Exempt Obligations" means bonds or other obligations the interest on which is excludable from the gross income of the owners thereof under Section 103 of the Code and include certain regulated investment companies, stock in tax - exempt mutual funds and demand deposit SLGS. "Taxable Obligations" means all investment property, obligations or securities other than Tax Exempt Obligations. In "Verification Certificate" means the certificate attached to this Certificate as Exhibit A, establishing that the Purchaser will not reoffer or sell the Bonds to the public. ARTICLE II SPECIFIC CERTIFICATIONS, REPRESENTATIONS AND AGREEMENTS The Issuer hereby certifies, represents and agrees as follows: Section 2.1 Authority to Certify and Expectations (a) The undersigned officer of the Issuer along with other officers_ of the Issuer, are charged with the responsibility of issuing the Bonds. (b) This Certificate is being executed and delivered in part for the purposes specified in Section 1.148- 2(b)(2) of the Regulations and is intended (among other purposes) to establish reasonable expectations of the Issuer at this time. (c) The Issuer has not been notified of any disqualification or proposed disqualification of it by the Commissioner of the Internal Revenue Service as a bond issuer which may certify bond issues under Section 1.148- 2(b)(2) of the Regulations. (d) The certifications, representations and agreements set forth in this Article II are made on the basis of the facts, estimates and circumstances in existence on the date hereof, including the following: (1) with respect to amounts expected to be received from delivery of the Bonds, amounts actually received, (2) with respect to payments of amounts into various funds or accounts, review of the authorizations or directions for such payments made by the Issuer pursuant to the Resolution and this Certificate, (3) with respect to the Issue Price, the certifications of the Purchaser as set forth in the Verification Certificate, (4) with respect to expenditure of the Proceeds of the Bonds, actual expenditures and reasonable expectations of the Issuer as to when the Proceeds will be spent for purposes of the Project, (5) with respect to Bond Yield, review of the Verification Certificate, and (6) with respect to the amount of governmental bonds to be issued during the calendar year, the budgeting and present planning of Issuer. The Issuer has no reason to believe such facts, estimates or circumstances are untrue or incomplete in any material way. -5- (e) To the best of the knowledge and belief of the undersigned officer of the Issuer, there are no facts, estimates or circumstances that would materially change the representations, certifications or agreements set forth in this Certificate, and the expectations herein set out are reasonable. (f) No arrangement exists under which the payment of principal or interest on the Bonds would be directly or indirectly guaranteed by the United States or any agency or instrumentality thereof. (g) After the expiration of any applicable temporary periods, and excluding investments in a bona fide debt service fund or reserve fund, not more than five percent (5 %) of the Proceeds of the Bonds will be (a) used to make loans which are guaranteed by the United States or any agency or instrumentality thereof, or (b) invested in federally insured deposits or accounts. (h) The Issuer will file with the Internal Revenue Service in a timely fashion Form 8038 -G, Information Return for Tax - Exempt Governmental Obligations, with respect to the Bonds and such other reports required to comply with the Code and applicable Regulations. (i) The Issuer will take no action which would cause the Bonds to become "private activity bonds" as defined in Section 141(a) of the Code, including any use of the Project by any person other than a governmental unit if such use will be as other than a member of the general public. None of the Proceeds of the Bonds will be used directly or indirectly to make or finance loans to any person other than a governmental unit. 0) The Issuer will make no change in the nature or purpose of the Project except as provided in Section 6.1 hereof. (k) Except as provided in Section 6.1 hereof, the Issuer will not establish any sinking fund, bond fund, reserve fund, debt service fund or other fund reasonably expected to be used to pay debt service on the Bonds (other than the Bond Fund and any Reserve Fund), exercise its option to redeem Bonds prior to maturity or effect a refunding of the Bonds. (1) No bonds or other obligations of the Issuer (1) were sold in the 15 days preceding the date of sale of the Bonds, (2) were sold or will be sold within the .15 days after the date of sale of the Bonds, (3) have been delivered in the past 15 days or (4) will be delivered in the next 15 days pursuant to a common plan of financing for the issuance of the Bonds and payable out of substantially the same source of revenues. I MM (m) None of the Proceeds of the Bonds will be used directly or indirectly to replace funds of the Issuer used directly or indirectly to acquire obligations having a yield higher than the Bond Yield. (n) No portion of the Bonds will be issued for the purpose of investing such portion at a higher yield than the Bond Yield. (o) The Issuer does not expect that the Proceeds of the Bonds will be used in a manner that would cause them to be "arbitrage bonds" as defined in Section 148(a) of the Code. The Issuer does not expect that the Proceeds of the Bonds will be used in a manner that would cause the interest on the Bonds to be includable in the gross income of the owners of the Bonds under the Code. The Issuer will not intentionally use any portion of the Proceeds to acquire higher yielding investments. (p) The Issuer will not use the Proceeds of the Bonds to exploit the difference between tax - exempt and taxable interest rates to obtain a material financial advantage. (q) The Issuer has not issued more Bonds, issued the Bonds earlier, or allowed the Bonds to remain outstanding longer than is reasonably necessary to accomplish the governmental purposes of the Bonds. (r) The Bonds will not be Hedge Bonds as described in Section 149(g)(3) of the Code because the Issuer reasonably expects that it will meet the Expenditure Test set forth in Section 2.5(b) hereof and that not more than 50% of the Proceeds will be invested in Nonpurpose Investments having a substantially guaranteed yield for four or more years. Section 2.2 Receipts and Expenditures of Sale Proceeds Sale Proceeds received at Closing are expected to be deposited and expended as follows: (a) $ representing costs of issuing the Bonds and the Initiation Fee for the Loan will be used within six months of the Closing Date to pay the costs of issuance of the Bonds (with any excess remaining on deposit in the Project Fund); and (b) $ will be deposited into the Project Fund and will be used together with earnings thereon to pay the costs of the Project and will not exceed the amount necessary to accomplish the governmental purposes of the Bonds. -7- Section 2.3 Pumose of Bonds The Issuer is issuing the Bonds to pay costs of acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or part of the Municipal Sewer System, including those costs associated with the Water Pollution Control Plant Modification Project and the refinancing of the Sewer Revenue Capital Loan Notes Anticipation Project Note, Series 2009, dated March 11, 2009, issued in respect of such costs. Section 2.4 Facts Supporting; Tax - Exemption Classification The Bonds are considered to be governmental bonds, not subject to the provisions of the alternate minimum tax. Proceeds of the Bonds will be used for the purpose of paying costs of construction of certain improvements and extensions to the Sewer System Utility of the City, including those costs associated with the Water Pollution Control Plant Modification Project. All of the financed facilities are owned by the City and are expected to be used by the public generally, including industrial users. There are no contractual arrangements or agreements between the City and any contributing industry using the Sewer System Utility, and there are no other lease, management contract or other similar arrangements with respect to the Sewer System Utility. Contributing industries using the Sewer System Utility may be or become subject to additional surcharges above the current user charges, depending on the strength and volume of the waste they generate. All such surcharges, however, are or will be imposed by virtue of City ordinances applicable to all entities meeting the standards set forth therein. No other charges or payments will be imposed or paid to the City by any contributing industry for wastewater treatment services or Project - related construction and acquisition beyond those mandated by ordinance for certain classes of users. No amount of Proceeds of the Bonds were to be used directly or indirectly to make or finance loans to persons other than governmental units. Section 2.5 Facts Supporting Temporary Periods for Proceeds (a) Time Test Not later than six months after the Closing Date, the Issuer will incur a substantial binding obligation to a third party to expend at least 5% of the net Sale Proceeds of the Bonds. (b) Expenditure Test Not less than 85% of the net Sale Proceeds will be expended for Project costs, including the reimbursement of other funds expended to date, within a three -year temporary period from the Closing Date. (c) Due Diligence Test Not later than six months after Closing, work on the Project will have commenced and will proceed with due diligence to completion. (d) Proceeds of the Bonds representing less than six months accrued interest on the Bonds will be spent within six months of this date to pay interest on the Bonds, and will be invested without restriction as to yield for a temporary period not in excess of six months. Section 2.6 Resolution Funds at Restricted or Unrestricted Yield (a) Proceeds of the Bonds will be held and accounted for in the manner provided in the Resolution. The Issuer has not and does not expect to create or establish any other bond fund, reserve fund, or similar fund or account for the Bonds. The Issuer has not and will not pledge any moneys or Taxable Obligations in order to pay debt service on the Bonds or restrict the use of such moneys or Taxable Obligations so as to give reasonable assurances of their availability for such purposes. (b) Any monies which are invested beyond a temporary period are expected to constitute less than a major portion of the Bonds or to be restricted for investment at a yield not greater than one - eighth of one percent above the Bond Yield. (c) The Issuer has established and will use the Bond Fund primarily to achieve a proper matching of revenues and debt service within each Bond Year and the Issuer will apply moneys deposited into the Bond Fund to pay the principal of and interest on the Bonds. Such Fund will be depleted at least once each Bond Year except for a reasonable carryover amount. The carryover amount will not exceed the greater of (1) one year's earnings on the Bond Fund or (2) one - twelfth of Annual Debt Service. The Issuer will spend moneys deposited from time to time into such fund within 13 months after the date of deposit. Revenues, intended to be used to pay debt service on the Bonds, will be deposited into the Bond Fund as set forth in the Resolution. The Issuer will spend interest earned on moneys in such fund not more than 12 months after receipt. Accordingly, the Issuer will treat the Bond Fund as a bona fide debt service fund as defined in Regulation 1.148 -1(b). Investment of amounts on deposit in the Bond Fund will not be subject to arbitrage rebate requirements as the Bonds meet the safe harbor set forth in Regulation 1.148 -3(k), because the average annual debt service on the Bonds will not exceed $2,500,000. (d) The Minor Portion of the Bonds will be invested without regard to yield. la (e) The Issuer does not expect that principal of or interest on the Bonds will be paid from a debt service reserve fund. Section 2.7 Pertaining to Yields (a) The purchase price of all Taxable Obligations to which restrictions apply under this Certificate as to investment yield or rebate of Excess Earnings, if any, has been and shall be calculated using (i) the price taking into account discount, premium and accrued interest, as applicable, actually paid or (ii) the fair market value if less than the price actually paid and if such Taxable Obligations were not purchased directly from the United States Treasury. The Issuer will acquire all such Taxable Obligations directly from the United States Treasury or in an arm's length transaction without regard to any amounts paid to reduce the yield on such Taxable Obligations. The Issuer will not pay or permit the payment of any amounts (other than to the United States) to reduce the yield on any Taxable Obligations. Obligations pledged to the payment of debt service on the Bonds, or deposited into any reserve fund after they have been acquired by the Issuer will be treated as though they were acquired for their fair market value on the date of such pledge or deposit. Obligations on deposit in any reserve fund on the Closing Date shall be treated as if acquired for their fair market value on the Closing Date. (b) . Qualified guarantees have not been used in computing yield. (c) The Bond Yield has been computed as not less than 3.00 percent. This Bond Yield has been computed on the basis of a purchase price for the Bonds equal to the Issue Price. ARTICLE III REBATE Section 3.1 Records Sale Proceeds of the Bonds will be held and accounted for in the manner provided in the Resolution. The Issuer will maintain adequate records for funds created by the Resolution and this Certificate including all deposits, withdrawals, transfers from, transfers to, investments, reinvestments, sales, purchases, redemptions, liquidations and use of money or obligations until six years after the Final Bond Retirement Date. -10- Section 3.2 Rebate Fund (a) In the Resolution, the Issuer has covenanted to pay to the United States the Rebate Amount, an amount equal to the Excess Earnings on the Gross Proceeds Funds, if any, at the times and in the manner required or permitted and subject to stated special rules and allowable exceptions or exemptions. (b) The Issuer may establish a fund pursuant to the Resolution and this Certificate which is herein referred to as the Rebate Fund. The Issuer will invest and expend amounts on deposit in the Rebate Fund in accordance with this Certificate. (c) Moneys in the Rebate Fund shall be held by the Issuer or its designee and, subject to Sections 3.4, 3.5 and 6.1 hereof, shall be held for future payment to the United States as contemplated under the provisions of this Certificate and shall not constitute part of the trust estate held for the benefit of the owners of the Bonds or the Issuer. (d) The Issuer will pay to the United States from legally available money of the Issuer (whether or not such available money is on deposit in any fund or account related to the Bonds) any amount which is required to be paid to the United States, Section 3.3 Exceptions to Rebate The Issuer reasonably expects that the Bonds are eligible for one or more exemptions from the arbitrage rebate rules set forth in the Treasury Regulations. If the Bonds are ineligible, or become ineligible, for an exemption to the arbitrage rebate rules, the Issuer will comply with the provisions of Article III hereof. A description of the applicable rebate exemption(s) is as follows: - Election to Treat as Construction Bonds. The Bonds qualify as a "construction issue" as defined in Section 148(f)(4)(C)(vi) of the Code. The Issuer reasonably expects that more than 75 percent of the "available construction proceeds" ( "ACP ") of the Bonds, as defined in Section 148(f)(4)(C)(vi) of the Code, will be used for construction expenditures and that not less than the following percentages of the available construction proceeds will be spent within the following periods: 1) 10 percent spent within six months of the Closing Date 2) 45 percent spent within one year of the Closing Date 3) 75 percent spent within eighteen months of the Closing Date -11- 4) 100 percent spent within two years of the Closing Date (subject to 5 percent retainage for not more than one year) In any event, the Issuer expects that the 5% reasonable retainage will be spent within a three -year period beginning on the Closing Date. A failure to spend an amount that does not exceed the lesser of (i) 3% of the issue price or (ii) $250,000, is disregarded if the Issuer exercises due diligence to complete the Project. • Election with respect to future earnings Pursuant to Section 1.148- 7(h)(i)(3) of the Regulations, the Issuer shall calculate the amount of future earnings to be used in determining compliance with the first three spending periods based on its reasonable expectations that the average annual interest rate on investments of the ACP will be not more than 3 %. Compliance with the final spending period shall be calculated using actual earnings. Section 3.4 Calculation of Rebate Amount (a) As soon after each Computation Date as practicable, the Issuer shall, if necessary, calculate and determine the Excess Earnings on the Gross Proceeds Funds (the "Rebate Amount "). All calculations and determinations with respect to the Rebate Amount will be made on the basis of actual facts as of the Computation Date and reasonable expectations as to future events. (b) If the Rebate Amount exceeds the amount currently on deposit in the Rebate Fund, the Issuer may deposit an amount in the Rebate Fund such that the balance in the Rebate Fund after such deposit equals the Rebate Amount. If the amount in the Rebate Fund exceeds the Rebate Amount, the Issuer may withdraw such excess amount provided that such withdrawal can be made from amounts originally transferred to the Rebate Fund and not from earnings thereon, which may not be transferred, and only if such withdrawal may be made without liquidating investments at a loss. Section 3.5 Rebate Requirements and the Bond Fund It is expected that the Bond Fund described in the Resolution and Section 2.7(b) of this Certificate will be treated as a bona fide debt service fund as defined in Regulation 1.148 -1(b). As such, any amount earned during a Bond Year on the Bond Fund and amounts earned on such amounts, if allocated to the Bond Fund, will not be taken into account in calculating the Rebate Amount if the annual gross earnings on the Bond Fund for such Bond Year are less than $100,000 or if average annual debt service will not -12- exceed $2,500,000. However, should annual gross earnings exceed $100,000 or should the Bond Fund cease to be treated as a bona fide debt service fund, the Bond Fund will become subject to the rebate requirements set forth in Section 3.4 hereof. Section 3.6 Investment of the Rebate Fund (a) Immediately upon a transfer to the Rebate Fund, the Issuer may invest all amounts in the Rebate Fund not already invested and held in the Rebate Fund, to the extent possible, in (1) SLGS, such investments to be made at a yield of not more than one - eighth of one percent above the Bond Yield, (2) Tax Exempt Obligations, (3) direct obligations of the United States or (4) certificates of deposit of any bank or savings and loan association. All investments in the Rebate Fund shall be made to mature not later than the next Rebate Payment Date. (b) If the Issuer invests in SLGS, the Issuer shall file timely subscription forms for such securities (if required). To the extent possible, amounts received from maturing SLGS shall be reinvested immediately in zero yield SLGS maturing on or before the next Rebate Payment Date. Section 3.7 Payment to the United States (a) On each Rebate Payment Date, the Issuer will pay to the United States at least ninety percent (90 %) of the Rebate Amount less a computation credit of $1,000 per Bond Year for which the payment is made. (b) The Issuer will pay to the United States not later than sixty (60) days after the Final Bond Retirement Date all the rebatable arbitrage as of such date and any income attributable to such rebatable arbitrage as described in Regulation 1.148- 3(f)(2). (c) If necessary, on each Rebate Payment Date, the Issuer will mail a check to the Internal Revenue Service Center, Ogden, UT 84201. Each payment shall be accompanied by a copy of Form 8038 -T, Arbitrage Rebate, filed with respect to the Bonds or other information reporting form as is required to comply with the Code and applicable Regulations. Section 3.8 Records (a) The Issuer will keep and retain adequate records with respect to the Bonds, the Gross Proceeds Funds, the Bond Fund, and the Rebate Fund until six years after the Final Bond Retirement Date. Such records shall include descriptions of all calculations -13- of amounts transferred to the Rebate Fund, if any, and descriptions of all calculations of amounts paid to the United States as required by this Certificate. Such records will also show all amounts earned on moneys invested in such funds, and the actual dates and amounts of all principal, interest and redemption premiums (if any) paid on the Bonds. (b) Records relating to the investments in such Funds shall completely describe all transfers, deposits, disbursements and earnings including: (i) a complete list of all investments and reinvestments of amounts in each such Fund including, if applicable, purchase price, purchase date, type of security, accrued interest paid, interest rate, dated date, principal amount, date of maturity, interest payment dates, date of liquidation, receipt upon liquidation, market value of such investment on the Final Bond Retirement Date if held by the Issuer on the Final Bond Retirement Date, and market value of the investment on the date pledged to the payment of the Bonds, or the Closing Date if different from the purchase date. (ii) the amount and source of each payment to, and the amount, purpose and payee of each payment from, each such Fund. Section 3.9 Additional Payments The Issuer hereby agrees to pay to the United States from legally available money of the Issuer (whether or not such available money is on deposit in any fund or account related to the Bonds) any amount which is required to be paid to the United States, but which is not available in a fund related to the Bonds for transfer to the Rebate Fund or payment to the United States. ARTICLE IV INVESTMENT RESTRICTIONS Section 4.1 Avoidance of Prohibited Payments The Issuer will not enter into any transaction that reduces the amount required to be deposited into the Rebate Fund or paid to the United States because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Bond Yield not been relevant to either party. The Issuer will not invest or direct the investment of any funds in a manner which reduces an amount -14- required to be paid to the United States because such transaction results in a small profit or larger loss than would have resulted if the transaction had been at arm's length and had the Bond Yield not been relevant to the Issuer. In particular, notwithstanding anything to the contrary contained herein or in the Resolution, the Issuer will not invest or direct the investment of any funds in a manner which would violate any provision of this Article IV. Section 4.2 Market Price Requirement (a) The Issuer will not purchase or direct the purchase of Taxable Obligations for more than the then available market price for such Taxable Obligations. The Issuer will not sell, liquidate or direct the sale or liquidation of Taxable Obligations for less than the then available market price. (b) For purposes of this Certificate, United States Treasury obligations purchased directly from the United States Treasury will be deemed to be purchased at the market price. Section 4.3 Investment in Certificates of Deposit (a) Notwithstanding anything to the contrary contained herein or in the Resolution, the Issuer will invest or direct the investment of funds on deposit in the Gross Proceeds Fund, the Bond Fund, and the Rebate Fund, in a certificate of deposit of a bank or savings bank which is permitted by law and by the Resolution only if (1) the price at which such certificate of deposit is purchased or sold is the bona fide bid price quoted by a dealer who maintains an active secondary market in certificates of deposit of the same type or (2) if there is no active secondary market in such certificates of deposit, the certificate of deposit must have a yield (A) as high or higher than the yield on comparable obligations traded on an active secondary market, as certified by a dealer who maintains such a market, and (B) as high or higher than the yield available on comparable obligations of the United States Treasury. (b) The certificate of deposit described in part 2(A) of paragraph 4.3(a) above must be executed by a dealer who maintains an active secondary market in comparable certificates of deposit and must be based on actual trades adjusted to reflect the size and term of that certificate of deposit and the stability and reputation of the bank or savings bank issuing the certificate of deposit. -15- Section 4.4 Investment Pursuant to Investment Contracts and Agreements The Issuer will invest or direct the investment of funds on deposit in the Gross Proceeds Funds, the Bond Fund, and the Rebate Fund pursuant to an investment contract (including a repurchase agreement) only if all of the following requirements are satisfied: (a) The Issuer makes a bona fide solicitation for the purchase of the investment. A bona fide solicitation is a solicitation that satisfies all of the following requirements: (1) The bid specifications are in writing and are timely forwarded to potential providers. (2) The bid specifications include all material terms of the bid. A term is material if it may directly or indirectly affect the yield or the cost of the investment. (3) The bid specifications include a statement notifying potential providers that submission of a bid is a representation that the potential provider did not consult with any other potential provider about its bid, that the bid was determined without regard to any other formal or informal agreement that the potential provider has with the issuer or any other person (whether or not in connection with the Bonds), and that the bid is not being submitted solely as a courtesy to the issuer or any other person for purposes of satisfying the requirements of paragraph (d)(6)(iii)(13)(1) or (2) of section 1.148 -5 of the Regulations. (4) The terms of the bid specifications are commercially reasonable. A term is commercially reasonable if there is a legitimate business purpose for the term other than to increase the purchase price or reduce the yield of the investment. (5) For purchases of guaranteed investment contracts only, the terms of the solicitation take into account the Issuer's reasonably expected deposit and drawdown schedule for the amounts to be invested. (6) All potential providers have an equal opportunity to bid and no potential provider is given the opportunity to review other bids (i.e., a last look) before providing a bid. -16- (7) At least three reasonably competitive providers are solicited for bids. A reasonably competitive provider is a provider that has an established industry reputation as a competitive provider of the type of investments being purchased. (b) The bids received by the Issuer meet all of the following requirements: (1) The Issuer receives at least three bids from providers that the Issuer solicited under a bona fide solicitation meeting the requirements of paragraph (d)(6)(iii)(A) of section 1.148 -5 of the Regulations and that do not have a material financial interest in the issue. A lead underwriter in a negotiated underwriting transaction is deemed to have a material financial interest in the issue until 15 days after the issue date of the issue. In addition, any entity acting as a financial advisor with respect to the purchase of the investment at the time the bid specifications are forwarded to potential providers has a material financial interest in the issue. A provider that is a related party to a provider that has a material financial interest in the issue is deemed to have a material financial interest in the issue. (2) At least one of the three bids described in paragraph (d)(6)(iii)(13)(1) of section 1.148 -5 of the Regulations is from a reasonably competitive provider, within the meaning of paragraph (d)(6)(iii)(A)(7) of section 1.148 -5 of the Regulations. (3) If the Issuer uses an agent to conduct the bidding process, the agent did not bid to provide the investment. (c) The winning bid meets the following requirements: (1) Guaranteed investment contracts. If the investment is a guaranteed investment contract, the winning bid is the highest yielding bona fide bid (determined net of any broker's fees). (2) Other investments. If the investment is not a guaranteed investment contract, the winning bid is the lowest cost bona fide bid (including any broker's fees). (d) The provider of the investments or the obligor on the guaranteed investment contract certifies the administrative costs that it pays (or expects to pay, if any) to third parties in connection with supplying the investment. -17- (e) The Issuer will retain the following records with the bond documents until three years after the last outstanding bond is redeemed: (1) For purchases of guaranteed investment contracts, a copy of the contract, and for purchases of investments other than guaranteed investment contracts, the purchase agreement or confirmation. (2) The receipt or other record of the amount actually paid by the Issuer for the investments, including a record of any administrative costs paid by the - Issuer, and the certification under paragraph (d)(6)(iii)(D) of section 1.148 -5 of the Regulations. (3) For each bid that is submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results. (4) The bid solicitation form and, if the terms of the purchase agreement or the guaranteed investment contract deviated from the bid solicitation form or a submitted bid is modified, a brief statement explaining the deviation and stating the purpose for the deviation. (5) For purchases of investments other than guaranteed investment contracts, the cost of the most efficient portfolio of State and Local Government Series Securities, determined at the time that the bids were required to be submitted pursuant to the terms of the bid specifications. Section 4.5 Records The Issuer will maintain records of all purchases, sales, liquidations, investments, reinvestments, redemptions,, disbursements, deposits, and transfers of amounts on deposit. Section 4.6 Investments to be Legal All investments required to be made pursuant to this Certificate shall be made to the extent permitted by law. In the event that any such investment is determined to be ultra vires it shall be liquidated and the proceeds thereof shall be invested in a legal investment, provided that prior to reinvesting such proceeds, the Issuer shall obtain an opinion of Bond Counsel to the effect that such reinvestment will not cause the Bonds to become arbitrage bonds under Sections 103, 148, 149, or any other applicable provision of the Code. -18- ARTICLE V GENERAL COVENANTS The Issuer hereby covenants to perform all acts within its power necessary to ensure that the reasonable expectations set forth in Article II hereof will be realized. _ The Issuer reasonably expects to comply with all covenants contained in this Certificate. ARTICLE VI AMENDMENTS AND ADDITIONAL AGREEMENTS Section 6.1 Opinion of Bond Counsel: Amendments The various provisions of this Certificate need not be observed and this Certificate may be amended or supplemented at any time by the Issuer if the Issuer receives an opinion or opinions of Bond Counsel that the failure to comply with such provisions will not cause any of the Bonds to become "arbitrage bonds" under the Code and that the terms of such amendment or supplement will not cause any of the to become "arbitrage bonds" under the Code, or otherwise cause interest on any of the Bonds to become includable in gross income for federal income tax purposes. Section 6.2 Additional Covenants, Agreements The Issuer hereby covenants to make, execute and enter into (and to take such actions, if any, as may be necessary to enable it to do so) such agreements as may be necessary to comply with any changes in law or regulations in order to preserve the tax - exempt status of the Bonds to the extent that it may lawfully do so. The Issuer further covenants (1) to impose such limitations on the investment or use of moneys or investments related to the Bonds, (2) to make such payments to the United States Treasury, (3) to maintain such records, (4) to perform such calculations, and (5) to perform such other lawful acts as may be necessary to preserve the tax - exempt status of the Bonds. Section 6.3 Amendments Except as otherwise provided in Section 6.1 hereof, all the rights, powers, duties and obligations of the Issuer shall be irrevocable and binding upon the Issuer and shall not be subject to amendment or modification by the Issuer. . -19- IN WITNESS WHEREOF, the Issuer has caused this Certificate to be executed by its duly authorized officer, all as of the day first above written. CitW�rreasurer of City of Dubuque, Iowa (SEAL) -I- EXHIBIT A VERIFICATION CERTIFICATE OF THE PURCHASER The undersigned, Joseph O'Hern, the Executive Director of the Iowa Finance Authority (the "Purchaser "), hereby certifies as follows: 1. The Purchaser and the City of Dubuque, Iowa (the "Issuer "), have entered into a Loan and Disbursement Agreement (the "Agreement "), providing for the purchase of a $64,885,000 Sewer Revenue Capital Loan Note of the City dated as of the date of delivery (the "Notes "). 2. The Agreement is in full force and effect and has not been repealed, rescinded or amended. 3. • The Purchaser hereby confirms that the Notes were purchased at par and will not-be reoffered to the public, the terms of purchase being as follows: Price (% IN WITNESS WHEREOF, the Purchaser has caused this Verification Certificate to be executed by its duly authorized officer this day of . 2010. IOWA FINANCE AUTHORITY DCORNELL \664514.1 \ W P\ 10422.112 By: Its: -2- Executive Director of par) (do not Principal Principal include Amount Amount Interest accrued Issued Sold Rate interest $64,885,000 None 3.0% 100% IN WITNESS WHEREOF, the Purchaser has caused this Verification Certificate to be executed by its duly authorized officer this day of . 2010. IOWA FINANCE AUTHORITY DCORNELL \664514.1 \ W P\ 10422.112 By: Its: -2- Executive Director CLN2.SHL DELIVERY CERTIFICATE We, the undersigned City officials, do hereby certify that we are the officers, respectively below indicated, of a municipal corporation in the State of Iowa, known as the City of Dubuque, Iowa; that in pursuance of the provisions of Sections 384.24A and 3 84.82, Code of Iowa, there have been heretofore lawfully authorized and this day by us lawfully executed, issued, caused to be registered and authenticated and delivered one fully registered Sewer Revenue Capital Loan Note, Series 2010E, of said City of Dubuque, Iowa, in the amount of $64,885,000, dated the date of delivery, bearing interest at the rate of 3.0% per annum set forth on the Debt Service Schedule attached hereto and incorporated herein by this reference. The Note has been executed with the manual signature of the Mayor and the manual signature of the City Clerk of said City. The Note has been delivered to: Iowa Finance Authority of Des Moines, Iowa, and has been paid for in accordance with the terms of the contract of sale, and at a price of par. We further certify that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City, or the titles of the undersigned officers. to their respective positions, or the validity of the Note, or the pledge of the net earnings of the municipal sewer system, (the "System "), to the payment of the Note or the power and duty of the City to construct, own and operate its System as a revenue producing undertaking and to provide, charge and apply adequate rates and charges for the full and prompt payment of the principal and interest of the Note, and that none of the proceedings or authority for the issuance of the Note has been repealed, revoked, rescinded, or modified in any manner. We further certify that each of the officers whose signatures appear on the Note were in occupancy and possession of their respective offices at the time the Note was executed and do hereby adopt and affirm their signatures appearing in the Note. -I- We further certify that the present financial condition of the City is as follows: Total sewer revenue bonded indebtedness, including above - mentioned Sewer Revenue Capital Loan Note All other indebtedness of any kind, payable from Sewer Revenues a00 IN WITNESS WHEREOF, we have hereunto affixed our hands at Dubuque, Iowa, this Mayor City Clerk Treasurer (SEAL) I, the undersigned, the officer of the Bank indicated by my signature hereto, do hereby certify that I am personally acquainted with the persons whose signatures, each known to me to be genuine, are signed to the foregoing Certificate; and that I know that the persons aforesaid are the officers of the City named in said Certificate, indicated respectively by the title appended to the respective signature and whose signatures appear on the Note mentioned in said Certificate. Dated at Dubuque, Iowa, the date last above written. R 4 (Name f ank) B S DCORNELL \664531.1 \W P\ 10422.112 -2- d.9v of MI n Estimated Amortization Schedule City of Dubuque CWSRF Sewer Revenue Loan summary Estimated DrawSchedule Loan Closing Date Aug 18,201 Initiation Fee - Aug 18, 2010 648,850.00 Final Maturity Date Jun 1, 2039 P&D Payback- Aug 18, 2010 3,295,000.00 _ S Loan period in years 26.0 Estimated Draw - Oct 29, 2010 8,845,000,00 Total Loan Amount Requested $ 64,885,000.00 Estimated Draw - Feb 28, 2011 5,887,000.00 GEVOt1 if Fi §0 Less: 1 %Initiation Fee $ 648,850.00 EstimatedDrav - May31,2011 6,482,000.00 Net Proceeds to Borrower $ 64,236,150.00 Estimated Draw- Aug 31, 2011 8,807,000.00 Annual inlerest rate 3.00% Estimated Draw - Nov 30, 2011 8,977,000.00 Total interest $ 33,201,730.05 Eslimated braw - Feb 28, 2012 6,921,000.00 Servicing Fee rate 0.25% Estimated Draw - Jul 31, 2012 4,814,000.00 Total Servicing Fees $ 2,965,015.00 Estimated Draw- Oct 31, 2012 3,852,000.00 Total Loan Costs $ 36,815,595.05 Estimated Draw - Feb 28, 2013 1,314,000.00 Estimated Draw- Jul 31, 2013 4,982J50.00 Estimated Draw- Feb 1, 2014 60000.00 Total Draw Amount 64 885,000.00 MVESTMO M IOWA'S WATER As of $/1/2010 x�vw.iowexrf.«xn Beginning Servicing Total Loan Total Annual Ending Payment Date Balance Principal Interest Fee Payment Debt Service Balance Dec 1, 2010 12,788,850.00 57,438.05 57,438.05 12,788,850.00 Jun1 2011 25157850.00 237,01600 162,212.50 399,228.50 456,666.55 25,157,850.00 Dec 1, 2011 42 ,941,850.00 644,127.75 644,127.75 42,941,850.00 Jun 1, 2012 49,862,850.00 _ 747,942.75 162,212.50 910,155.25 1,554,283.00 49,662,850.00 Dec 1, 2012 58,528,850.00 877,932.75 877,932.75 58,528,850.00 Jun 1 2013 - __ _ 897,642.75 162,212.50 1,059, 855.25 1,937,788-00 Dec 1, 2013 64,825,000.00 972,375.00 972,375.00 64,825,000.00 Jun 1, 2014 64 885. 00 1,626 OOQ00 - 973,275.00 - _ j6? 12 50 2,761 1§7.50 3.733.862.50 63 259 000.00 Dec 1, 2014 63,259,000.00 948,885.00 948,885.00 63,259,000.00 Jun_1 2015 _1,679,000.00 948,885.00 158,147.50 2,786032.50 3,734,9 61,580,000.00 Dec 1, 2015 61,580,000.00 923,700.00 923,700.00 61,580,000.00 Jun_7,2016 - __ - . 61,580 x 00000 ---- 1,73300(100 ..__.. -- - -- ...-___ 923,700.00 ._ - - __ 153,950.00 - --- -._ -_- 2,810650.00 ___...._ - 3,734_,35000 - -- - -___ 59,8470 00,00 . --__. Dec 1, 2016 59,847,000.00 897,705.00 897,705.00 59,847,000.00 Jun 1, 2017 59,847,000.00 1,790,00(100 897,705.00 149,617,50 2,837,322.50 3,735,027.50 58,057,000.00 Dec.1, 2017 58,057,000.00 870,855.00 870,855.00 58,057,000.00 - Jun 1, 2018_58057,000,00 1,848,000.00__ _870855.00 145,142.50 -- - - 2, 863997.50 -- - -- 3,734,85250 -- _ - 56,209000 Dec 1, 2018 56,209,000.00 843,135.00 843135.00 56,209,000.00 _Jun 1 ,_2019 _ _ 56,209,000.00 1 908 ___841,135,q() 14 - �2 891657 50 3,734,792.50 54 30 0 00.90 _ Dec 1, 2019 54,301,000.00 814,515.00 814,515.00 54,301,000.00 1 2020 __ Jun 1 2020 _ 5 4301 _0 _ (100 1,970 00 (100 814,515 00 -- -- 135,752.50 .._... _ -_.._. 2,920 267.50 __ - -- 3,734,782.50 -- 52,331,000.00 Dec 1, 2020 52,331,000.00 784,965 00 784,965.00 - - -- - 52,331,000.00 Jun 1,2021 52331,000.00 2,034,00(100 784,96500 130,827.50 2,949792.50 3,734,757.50 50 297 000.00 Dec 1, 2021 50,297,000.00 754,455.00 754,455.00 50,297,000.00 Jun 1, 2022 s___. _ W- 50,29 __ _ 2, 1000OQ00_� 754 12 9809 2,17.50 _..- _...__ .___O 3,734,652.50 ___ -_- _- -- ._._ 48197,0 , 00.00 -. - __-- _- __.. -._ Dec 1, 2022 48,197,000.00 722,955.00 722,955.00 46,197,000.00 Jun 1, 2023__ __ 48 197,000 00___ __. _2 16 00(100 722 95500 - 120,492.50 _ _ - _3,011,447.50 -- ......_ .__- -- 3,734,402.50 - - -- -. 46,029,000.00 - -- - Dec 1, 2023 46,029,000.00 690,43500 690,435.00 46,029.000.00 Jun 1, 2024 _ 46 029000.00 2 239,00000 690 435.00 115,072.50 3 044 507.50 3,734,942 50 43 790,000.00 Dec'l, 2024 43,790,000.00 656,850.00 656,850.00 43,790,000.00 _____Jun 1, 2025 - 43,79000000_ - 2,31200 _ _ _ 656,8_50.00 109,475.00 3,078,325.00 3,735,175.00 41,478,000.00 Dec1,2025 41,478,000.00 622,170.00 622,170.00 41,478,000.00 . Jun1,2026 41,478,00000 2,387000.00 622,17000 103,695.00 .. 3,113865.00 - 3,735,035.00 39091,000.00 Dec 1, 2026 39,091,000.00 586,36500 586,365.00 39,091,000.00 __ 39091,00000 w 2,464OOQ00 586,365.00 97,727.50 - 3,146092.50 ..... 3,734,45750 -- --- - --- 36,627,000.00 .__ Dec 1, 2027 36,627,000.00 549,405.00 549,405.00 . - 36,627,000.00 Jun 1,202836,627,00000 2_,544,00_(10 - 549,405.00 91,567.50 3,184,972.50 3,734,377.50 34083,000.00 Dec 1, 2028 34,083,000.00 511,245.00 511,245.00 34,083,000.00 Jun 1, 2029 34 083,000.00 2,627,00000 511,245.00 85,207.50 3,223,452.50 3,734,697.50 31,456,000.00 Dec 1, 2029 31,456,000.00 471,84000 471,840.00 31,456,000.00 Jun 1, 2030 31,456,000.00 2,712 0 _ 471,840 00 78,640.00 3,262 480.00 3,734,320.00 28,744,000.00 Dec1 2030 28,744,000.00 431,16000 431160.00 28,744,000.00 Jun1�2031_ _ 28744,000.00 __380100(100_ 431,160.00 - ___ 71,_860.00 3,304,020.00 3,735,180.00 25943,000.00 Dec 1, 2031 25,943,000.00 389,145.00 389,145.00 25,943,000.00 Jun 25943,000.00 2,892000.00 389,14500 64,857.50 3,346,002.50 3,735,147.50 23,051,000.00 6ec1,2032 23,051,000.00 345.76 45,76500 345,765.00 23,051,000.00 _Jun_1,2033 23051,000.00 - __2_,9860 345,765,00 57627.50 3,389392.50 _ 3,735,157.50 20,065,000.00 Dec 1, 2033 20,065,000.00 300,975.00 300,975.00 20,065,000.00 Jun 1, 2034 20,065,000.00 3,083 00(100 300 97 500 50,162._50 _ _ 3,434. 3,735,112 50 16962 000.00 -- Dec 1, 2034 16,982,000.00 254,730.00 254,730.00 16,982,000.00 _ _. Jun 1 2035 16,982,00.00 -- 0 - -- - 3,18300(100 -- ,70.00 2543 - 42,455.00 - - 3,480,185.00 - -- - -- - -- -. 3,734,915.00 13,799,000.00 0 Dec 1, 2035 13,799,000.00 206,985. 00 206,985.00 -- - - 13,799,000.00 Jun 1, 2036 _ _ 13 799 000 00 3 266 000.00 206,985 00 34,497.50 3,527 482.50 3 734,467 50 10,513 Dec 1, 2036 10,513,000.00 157,695 00 157,695.00 10,513,000.00 Jun 1, 2037 - - - -- 10,513,000.00 -- -- - 3,393 000 - - . _ - .._.. Q0 -- 157,695 00 -- -- - - 26 282.50 3,576,977.50 - - 3,734,672.50 - 7,120,000.00 Dec 1, 2037 7,120,000.00 106,800.00 106,800.00 -- - - - -- 7,120,000.00 ___Jun 1, 2038 71 20,000.00 -- - 3,503,0 00,00 - _.. - 10680000 - ----._ _ ._ -_.. 17,800.00 3,627600.00 _. -- 3,734,400.00 -- _ 3617,000.00 - - - Dec 1, 2038 3 617,000.00 54,255.00 54 255.00 3,617,000.00 Jun 1, 2039 _._ ___...._..._. 3 617000.00 3 617 000.00 _.- .... _____ ._-__ 54 255.00 9,042.50 u _ _ Ql?___ 3,68Q29Z50 .�_____----_._ 3,734,552.50 ........__- -- - -- - 0.00 .. ____- .--- _._.... MVESTMO M IOWA'S WATER As of $/1/2010 x�vw.iowexrf.«xn REGISTERED REGISTERED Bond No. R -1 STATE OF IOWA $64,885,000 CITY OF DUBUQUE, IOWA SEWER REVENUE CAPITAL LOAN NOTE SERIES 2010E Final Rate Maturity Dated Date 3.00% June 1, 2039 August 18, 2010 REGISTERED OWNER: IOWA FINANCE AUTHORITY PRINCIPAL AMOUNT: SIXTY FOUR MILLION, EIGHT HUNDRED EIGHTY FIVE THOUSAND DOLLARS The City of Dubuque, Iowa, a municipal corporation organized and existing under and by virtue of the Constitution and laws of the State of Iowa (the "Issuer "), for value received, promises to pay from the source and as hereinafter provided, to IOWA FINANCE AUTHORITY or registered assigns, the principal sum of SIXTY FOUR MILLION, EIGHT HUNDRED EIGHTY FIVE THOUSAND DOLLARS ($64,885,000) in lawful money of the United States of America, on the maturity dates and in the principal amounts set forth on the Debt Service Schedule attached hereto and incorporated herein by this reference, with interest on said sum from the date of each advancement made under a certain Loan and Disbursement Agreement, dated as of the date hereof until paid at the rate of 3.0% per annum, payable on December 1, 2010, and semi - annually thereafter on the 1 st day of June and December in each year. As set forth on said Debt Service Schedule, principal shall be payable on June 1, 2014 and annually thereafter on the first day of June in the amounts set forth therein until principal and interest are fully paid, except that the final installment of the entire balance of principal and interest, if not sooner paid, shall become due and payable on June 1, 2039. Notwithstanding the foregoing or any other provision hereof, principal and interest shall be payable as shown on said Debt Service Schedule until completion of the Series 2010E Project, at which time the final Debt Service Schedule shall be determined by the Trustee and attached hereto based upon actual advancements, final costs and completion of the Series 2010E Project, all as provided in the administrative rules governing the. Iowa Water Pollution Control Works Financing Program. Payment of principal and interest of this Note shall at all times conform to said Debt Service Schedule and the rules of the Iowa Water Pollution Control Works Financing Program. Interest and principal shall be paid to the registered holder of the Note as shown on the records of ownership maintained by the Registrar as of the 15th day preceding such interest payment date. Interest shall be computed on the basis of a 360 -day year of twelve 30 -day months. This Note is issued pursuant to the provisions of Sections 384.24A and 384.83 of the Code of Iowa, for the purpose of paying costs of acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or part of the System, including those costs associated with the Water Pollution Control Plant Modification Project and the refinancing of the Sewer Revenue Capital Loan Notes Anticipation Project Note, Series 2009, dated March 11, 2009, issued in respect of such costs (as described in the Series Resolution hereinafter referred to), and evidences amounts payable under a certain Loan and Disbursement Agreement, dated as of the date hereof, in conformity to a Series Resolution of the City Council of said City duly passed and approved. For a complete statement of the revenues and funds from which and the conditions under which this Note is payable, a statement of the conditions under which additional notes or bonds of equal standing may be issued, and the general covenants and provisions pursuant to which this Note is issued, reference is made to the above - described Loan and Disbursement Agreement and Series Resolution. This Note is subject to optional redemption at a price of par plus accrued interest (i) on any date upon receipt of written consent of the Iowa Finance Authority or (ii) in the event that all or substantially all of the Series 2010E Project is damaged or destroyed. Any optional redemption of this Note may be made from any funds regardless of source, in whole or from time to time in part, in inverse order of maturity, by lot by giving thirty (30) days notice of redemption by certified or registered mail, to the Iowa Finance Authority (or any other registered owner of the Note). This Note is also subject to mandatory redemption as set forth in Section 5 of the Agreement. Ownership of this Note may be transferred only by transfer upon the books kept for such purpose by the Registrar. Such transfer on the books shall occur only upon presentation and surrender of this Note at the office of the Registrar as designated below, together with an assignment duly executed by the owner hereof or his duly authorized attorney in the form as shall be satisfactory to the Registrar. Issuer reserves the right to substitute the Registrar and Paying Agent but shall, however, promptly give notice to registered Bondholders of such change. All Notes shall be negotiable as provided in Article 8 of the Uniform Commercial Code, subject to the provisions for registration and transfer contained in the Master Resolution. This Note, other obligations currently outstanding, and such other revenue bonds or notes of the Issuer as may in the future be issued on a parity therewith as Senior Bonds under the Master Resolution, are equally and ratably secured by pledge of the "Net Revenues" of the System, as defined in the Master Resolution. THE NOTES AND THE INTEREST THEREON ARE PAYABLE SOLELY AND ONLY FROM THE NET REVENUES. NEITHER THE PAYMENT OF THE PRINCIPAL NOR ANY PART THEREOF NOR ANY INTEREST THEREON CONSTITUTES A DEBT, LIABILITY OR OBLIGATION OF THE ISSUER WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER PROVISION WHATSOEVER. THE ISSUER HAS NO AUTHORITY TO LEVY ANY TAXES TO PAY THE NOTES. The Issuer has covenanted and hereby covenants and agrees at all times while any Notes are Outstanding and unpaid to budget for and collect amounts in respect of the use of the System fully sufficient at all times to: (i) provide for 100% of the budgeted Operation and Maintenance Expenses of the System and for the accumulation in the Revenue Fund of a reasonable reserve therefor, and (ii) produce Net Revenues in each Fiscal Year which will: (a) equal at least 110% of the Debt Service Requirement on all Senior Bonds then Outstanding for the year of computation, (b) enable the Issuer to make all required payments, if any, into the Debt Service Reserve Fund and the Rebate Fund, (c) enable the Issuer to accumulate an amount which, in the judgment of the Council, is adequate to meet the costs of major renewals, replacements, repairs, additions, betterments and improvements to the System, necessary to keep the same in good operating condition or as is required by any governmental agency having jurisdiction over the System, and (d) remedy all deficiencies in required payments into any of the funds and accounts established under the Master Resolution from prior Fiscal Years. The Master Resolution contains a more particular statement of the covenants and provisions securing the Notes, the conditions under which the owner of this Note may enforce covenants (other than the covenant to pay Principal of and interest on this Note when due from the sources provided, the right to enforce which is unconditional), the conditions upon which additional revenue bonds may be issued on a parity or achieve parity status with this Note under the Master Resolution, and the conditions upon which the Master Resolution may be amended with the consent of the owners of not less than two- thirds in aggregate Principal amount of the Bonds Outstanding or the issuer of any Credit Facility, if any, of such Bonds. Upon the occurrence of an Event of Default under the Master Resolution, the owner of this Note shall be entitled to the remedies provided by the Master Resolution. And it is hereby represented and certified that all acts, conditions and things requisite, according to the laws and Constitution of the State of Iowa, to exist, to be had, to be done, or to be performed precedent to the lawful issue of this Note, have been existent, had, done and performed as required by law. IN TESTIMONY WHEREOF, said Issuer by its City Council has caused this Note to be signed by the manual signature of its Mayor and attested by the manual signature of its City Clerk, and authenticated by the manual signature of an authorized representative of the Registrar, the City Treasurer. ATTEST: By: City Clerk (SEAL) CITY OF DUBUQUE, IOWA I' , Mayor Date of authentication: This is one of the Series 2010E Bonds described in the within mentioned Series Resolution, as registered by the City Treasurer. CITY TREASURER, Registrar Authorized Signature Registrar and Transfer Agent: City Treasurer Paying Agent: City Treasurer ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto (Social Security or Tax Identification No. the within Revenue Bond and does hereby irrevocably constitute and appoint attorney in fact to transfer the said Revenue Bond on the books kept for registration of the within Revenue Bond, with full power of substitution in the premises. Dated (Person(s) executing this Assignment sign(s) here) SIGNATURE ) GUARANTEED ) IMPORTANT - READ CAREFULLY The signature(s) to this Power must correspond with the name(s) as written upon the face of the certificate(s) or bond(s) in every particular without alteration or enlargement or any change whatever. Signature guarantee must be provided in accordance with the prevailing standards and procedures of the Registrar and Transfer Agent. Such standards and procedures may require signature to be guaranteed by certain eligible guarantor institutions that participate in a recognized signature guarantee program. INFORMATION REQUIRED FOR REGISTRATION OF TRANSFER Name of Transferee(s) Address of Transferee(s) Social Security or Tax Identification Number of Transferee(s) Transferee is a(n): Individual* Partnership Corporation Trust *If the Bond is to be registered in the names of multiple individual owners, the names of all such owners and one address and social security number must be provided. The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common IA UNIF TRANS MIN ACT - ..........Custodian.......... (Cust) (Minor) under Iowa Uniform Transfers to Minors Act ................ (State) 664707 Estimated Amortization Schedule City of Dubuque CWSRF Sewer Revenue Loan summary Estimated DrawSchedule R Loan Closing Date Aug 18, 2010 Initiation Fee - Aug 18, 2010 648,850.00 Final Maturity Date Jun 1, 2039 P8D Payback Aug 18, 2010 3,295,000.00 n _ Loan period in years 26.0 Estimated Draw - Oct 29, 2010 8,845,000.00 ST A T E Total Loan AmourtRequested $ 64,885,000.00 EstimaledDraw- Feb28,2011 5,887,000.00 fiE,01H74 bJ O Less: 1 k Initiation Fee $ 648,850.00 Estimated Dram- May 31, 2011 6,482,000.00 Net Proceeds to Borrower $ 64,236,150.00 Estimated Draw- Aug 31, 2011 8,807,000.00 Annual interest rate 3.00% Estimated Draw- Nov 30.2011 8,977,000.00 Total interest $ 33,201,730.05 Eslimatedbraw- Feb28,2012 6,921,000.00 Servicing Fee rate 0.25 % Estimated Draw- Jul 31. 2012 4,814,000.00 Total Servicing Fees $ 2,965,015.00 Estimated Draw- Oct 31, 2012 3,852,000.00 Total Loan Costs $ 36,815,595.05 Estimated Draw- Feb28,2013 1,314,000.00 Estimated Draw - Jul 31, 2013 4 EstimaledDraw - Feb 1, 2014 60000.00 Total Draw Amount 64,885,000.00 Beginning Servicing Total Loan Total Annual Ending Payment Date Balance Principal Interest Fee Payment Debt Service Balance Dec 1, 2010 12,788,850.00 57,438.05 57,438.05 12,788,850.00 Jun_1 2011_ _ _ 25,157,85000 _ - 237,016.00 162,212.50 399,228.50 456,666.55 25,157,850.00 Dec 1, 2011 42,941,850.00 644,127.75 644,127.75 42,941,850.00 _Jun 1, 2012 49,862 ' 850.00 747,942.75 162,212.50 910,155.25 1,554,283.00 49,862,850.00 Dec 1, 2012 58,528,850.00 877,932.75 877,932.75 58,528,850.00 Jun 1 2013 59842,85000 . _____ - ._.____ 897,642.75 16221250 1,059,855.25 1,937,788.00 59,842,850.00 Dec 1, 2013 64,825,000.00 972,375.00 972,375.00 64,825,000.00 Jun 1, 2014 _ 64 885 00000 1 626 OOQ00 _ 973,275 - 162 212.50 2 761,487.50 3,733,862 50 63 259000.00 F.- .._L__.__..... _I'?, _ _.- .._._.._ J--- .A- .___._ Dec 1, 2014 63,259,000.00 948,885.00 948,885.00 63,259,000.00 Jun 1, 2015 -__ _63 259,000.00 1,679,000.00 - - _ 948,885 00 158,147.50 2,786,03250 3,734,917.50 61,580,000.00 Dec 1, 2015 61,560,000.00 923,700.00 923,70000 61,580,000.00 - ._Jun_1,2016 1,733,000.0_0_ 923,70000 _ 153,950.00 2,81Q650.00 3,734,350.00 59,847,000.00 ...... _ __....-- - -- - - - -._- - -- -- -- - - -- - -...- - - ----- - _._..__ - -- ---- - - Dec 1, 2016 59,847,000.00 897,705.00 897,705.00 59,847,000.00 Ju 1, 2017 59,8 1,790 897 ,705.00_ 149,617.50 _ 2,837. 3,735,027.50 58,057,0 Dec.1, 2017 58,057,000.00 - 870,855.00 _ 870,855.00 _ -� -- 58,057,000.00 -- Jun 1, 2018_ __ _ 58,057,000 00 _ .1,848 OOQ00_ 870,855.00 _ _ _14 2 863,997.50 3,734,852.50 56,209,00000 Dec 1, 2018 56,209,000.00 843,135.00 843,135.00 56,209,000.00 Jun 1 , 2 019 56 20 9,000.00 1,908,_ 0.00 84_3,135,90_ 140 0 522 ,50 __�2 891 y 657.50_ . _ _ 3 734,792 50 n , 54 301 000 00 . , Dec 1,2019 54,301,000.0 .814,515.00 814,515.00 54,301,000.00 Jun1,2020 54,301,000.00 _1,97000400_ 814,515.00 135752.50 2,920267.50 - 3,734,782.50 52331000.00 Dec i 52,331,000.00 784,965.00 784,965.00 52,331,000.00 Jun 1 2021___ - _52 331000_00 2,034,00000 _784,965.00 130827.50 2,949,792.50 3,734,757 50 50,297,000.00 -- _.._. - - - -...- -_ Dec 1, 2021 50,297,000.00 754,455.00 754,455.00 50,297,000.00 Jun 1, 2022 5429 O i 00A0 V 2 -_ 754 12 _ 2, 3,734,652.50 48,197,000.00 Dec 1, 2022 48,197,000.00 - - 722,955.00 722,955.00 48 197,000.00 Jun 1, 2023 _ 48,197,000 00 - 2,166 00.400 _ .722 955.00 _1 3,011,447.50 3,734,402.50 46,029,000.00 Dec 1, 2023 46,029,000.00 690,435.00 690,435.00 46 029,000.00 _ Jun 1, 2024 - _ _.._ 46 029C90.00 2 OOQ ,239 00 •• _ 690,435.00 •_ •. 115,072.50 3 044,507.50 _ 3,734,942.50 43 790,000.00 Dec'1, 2024 43,790,000.00 656,850.00 656,850.00 43,790,000.00 Jun 1, 2025 43 79000000 2,312,00400 656,850.00 109,475.00 3,078 325.00 3 735,17500 41 478,000.00 - - - -- -- . ...._ ____.__ - .__ -__ _ _.__..__ - ........ .._._-- - - - -- -- - -- -._- . 735, - ..- - -- -- _...... - - - - Dec 1, 2025 41,478,000.00 - 622,170.00 622,170.00 41,478,000.00 Jun 1,2026 _41,478000,90 2,38700000 622,170.00 103,695.00 3,112865.00 3735,035.00 39091,00000 Dec 1, 2026 39,091,000.00 586,365.00 586365.00 39,091,000.00 Jun 1_ 2027 39,091,000 00 2,464 OOQ00 586,365 00 97,727.50 3,148 092.50 3,734,457.50 36,627 000.00 Dec 1, 2027 36,627,000.00 549,405.00 549,405.00 36,627,000.00 Jun1,2028_ 36627,0 -- 0000 2,54400(100 54940500 91,567.50 3,184972.50 3,734,377.50 34,083,000.00 - ._ - - - - -- - _ _ _ - - -- -- - -- - - - Dec 1, 2028 34,083,000.00 511,245.00 511,245.00 34,083,000.00 Jun 1, 2029 34,083,000 00 . 2,627,00000 511,245.00 85,2 3,223,452.50 3,734,697.50 31,456,000.00 Dec 1, 2029 31,456,000.00 471,840.00 471,840.00 31,456,000.00 __Jun 1, 2030 31,456,00000 2,712,00(100 471.840 78,640.00 3.262 480.00 3,734,320.00 26744,000.00 Dec 1, 2030 28,744,000.00 431,160.00 431,160.00 28,744,000.00 _- Jun 2031 _ _ 28 000.00 - 2 _801,00400 431 X 160 00 - _ 71,860.00 3,304 020.00 3,735.180-00 25 943,000.00 Dec 1, 2031 25,943,000.00 389,145.00 389,145.00 25,943,000.00 Jun 2032 25 2,892 000.00 38914500 _64,857.50 3,346,002.50 3,735,147.50 _23,051,000.00 _ Decl,2032 23 ,051,000.00 345,765.00 345,765.00 23,051,000.00 Junl,2033 23,051,000.00 . _ - - - - - - -- - --- - -. ..-- - - -... .. - -- -- -- Dec 1, 2033 20,065,000.00 300,975.00 300,975.00 20,065,000.00 J 1 2034 2 ,0 065,000.00 3,08300400 300 - 50162.50 3,434137.50 3,735,112 50 16 982,000.00 - un - _.�__�___ _ .w. _. _- - - --- _.. - R00q. ... Dec 1, 2034 16,982,000.00 254,730.00 254,730.00 16,982,000.00 - Jun 1, 2035 .__ 16,982000.00 _ _3,183,OOQ00 254,730.00 _ 42,455.00 3,480185.00 3,734,915.00 13,799,000.00 Dec 1, 2035 13,799,000.00 206,985.00 206,985.00 13 799,000.00 Jun 1, 2036 13,799 000 00 3,286 OOQ00 206 985.00 34,497.50 _- - _3,527 482.50 3,734,467.50 10 513 000 00 Dec 1, 2036 10,513,000.00 157,695.00 157,695.00 10,513,000.00 J - u- - .- n 1, 2037 10. 513,000 00 3,393 OOQ00 157,695.00 26,282.50 _ 3,576,977.50 3,734,672.50 7,120,000.00 - - - - -- _ - - - -- _ - - - -- -- - _- -- - ----- - - Dec 1, 2037 7,120,000.00 106,800.00 106,800.00 7,120,000.00 Jun1,2038 _,_,7,120,000.00 - ___3503000.00 _ 10690000 17,800.00 3,627600.00 3,734,400.00 3,617,000.00 -- _ ... - - - _.- - Dec 1, 2038 3,617,000.00 54,255.00 54,255.00 3,617,000.00 Jun 1 2039 _ - 3 617.000.00 3 617,000.00 _ 54,255_00 9,042.50 3,680297.50_ 3,734,552 50 0.00 11 INVESTMG M IOWA'S WATER 803M Information Return for Tax - Exempt Governmental Obligations Form ► Under Internal Revenue Code section 149(e) OMB No. 1545 -0720 (Rev. May 2010) ► See separate instructions. Department of the Treasury Caution: If the issue price is under $100,000, use Form 8038 -GC. Internal Revenue Service Authority If Amended Return, check here ► LJ _ Reporting 1 Issuer's name 2 Issuer's employer identification number (EIN) DUBUQUE, IOWA 42 6004596 3 Number and street (or P.O. box if mail is not delivered to street address) Room /suite 4 Report number (For IRS Use Only) 50 West 13th Street 15 5 City, town, or post office, state, and ZIP code 6 Date of issue Dubuque, Iowa 52001 7 Name of Issue 8 CUSIP number Sewer Revenue Capital Loan Notes, Series 2010E NIA 9 Name and title of officer of the issuer or other person whom the IRS may call for more information 10 Telephone number of officer or other persor Ken TeKippe, Finance Director ( 563 ) 589 -4133 Type of Issue (enter the issue price) See instructions and attach schedule 11 Education . . . . . . . . . . . . . . . . . . 12 Health and hospital . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Environment (including sewage bonds) . . . . . . . . . . . . . . . . . . . . 16 Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Other. Describe ► 19 If obligations are TANS or RANs, check only box 19a . . . . . . . . . . . . ► ❑ If obligations are BANS, check only box 19b . . . . . . . . . . . . . . . ► ❑ 20 If obligations are in the form of a lease or installment sale, check box . . . . . . . ► ❑ i - 17 nnorrin +inn of r)hlina +inns (:mmnlata fnr tha antirr? iGquP for which this form is beina tiled. (a) Final maturity date (b) Issue price (c) Stated redemption price at maturity (d) Weighted average maturity (e) Yield 21 6- 1.2029 $ 64,885,000 $ 64,885,000 years 3.00 % r Uses of Proceeds of Bond issue yncivamg unaerwriiers afscoung 22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . 22 23 Issue price of entire issue (enter amount from line 21, column (b)) . . . . . 23 24 Proceeds used for bond issuance costs (including underwriters' discount) 24 25 Proceeds used for credit enhancement . . . . . . . . . . . 25 26 Proceeds allocated to reasonably required reserve or replacement fund . 26 27 Proceeds used to currently refund prior issues . . . . . . . . . 27 28 Proceeds used to advance refund prior issues . . . . . . . . . 28 29 Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . 29 30 Nonrefundin proceeds of the issue (subtract line 29 from line 23 and enter amount here) 30 01199 - Descriptibn of Refunded Bonds (Complete this part only for refunding bonds.) 31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . ► years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . ► years 33 Enter the last date on which the refunded bonds will be called (MM /DD/YYYY) . . . . . ► 34 Enter the date(s) the refunded bonds were issued ► ( MM /DD/YYYY) For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773S Form 8038 -G (Rev. 5 -2010) Form 8038 -G (Rev. 5 -2010) Page 2 nntscenaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . 35 360 Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC) (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 36a b Enter the final maturity date of the GIC ► 37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units . . . . . . . . . . . . . . . . . . . . . . . . . 37a b If this issue is a loan made from the proceeds of another tax - exempt issue, check box ► © and enter the name of the issuer ► Iowa Finance Authority and the date of the issue ► unknown 38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box , . . . ► ❑ 39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . . ► ❑ 40 If the issuer has identified a hedge, check box . . . . . . . . . . . . . . . . . . . . . . . . ► ❑ Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge Signature and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the issuer's return information, as necessary and to pr ss this return, to the person that I have authorized above. Consent Ken TeKippe, Finance Director ` Signature of issuer's (96thorized representative Date Type or print name and title Preparer's Date Check if Preparer's SSN or PTIN Paid signature ` self- employed ❑ P01074841 Preparer's Firm's name (or Ahlers & Cooney, P.C., 100 Court Avenue, EIN 42 1323559 Use Only yours if self - employed), address, and ZIP code Suite, 600, Qes Moines, Iowa 50309 Phone no. ( 515) 243 -7611 Form 8038 -G (Rev. 5 -2010)