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HomeMy WebLinkAbout2010-05-17-Resolutions 10-149_Bonds - Golf Course Revenue Refunding CLN Series 2010 - IssuanceRESOLUTION 10-149 A RESOLUTION APPROVING AND AUTHORIZING A FORM OF LOAN AGREEMENT AND AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE PAYMENT OF $776,228 GOLF COURSE REVENUE REFUNDING CAPITAL LOAN NOTE,SERIES 2010,OF THE CITY OF WAUKEE,STATE OF IOWA,UNDER THE PROVISIONS OF THE CITY CODE OF lOW A,AND PROVIDING FOR A METHOD OF PAYMENT OF THE NOTE WHEREAS,the City Council of the City of Waukee,State ofIowa,sometimes hereinafter referred to as the "Issuer",has heretofore established charges,rates and rentals for services which are and will continue to be collected as system revenues of the Sugar Creek Golf Course,which is operated as a City enterprise by the City of Waukee, sometimes hereinafter referred to as the "System",and the revenues have not been pledged and are available for the payment of a Golf Course Revenue Refunding Capital Loan Note,Series 2010,subject to the following premises;and WHEREAS,Issuer proposes to issue its Golf Course Revenue Refunding Capital Loan Note,Series 2010,to the extent of $776,228,for the purpose of defraying the costs of the project as set forth in Section 3 of this Resolution;and,it is deemed necessary and advisable and in the best interests of the City that a form of Loan Agreement be approved and authorized;and WHEREAS,the notice of intention ofIssuer to take action for the issuance of not to exceed $815,000 Golf Course Revenue Refunding Capital Loan Note,Series 2010,has heretofore been duly published and no objections to such proposed action have been filed: NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WAUKEE,IN THE COUNTY OF DALLAS,STATE OF IOWA: Section I.Definitions.The following terms shall have the following meanings in this Resolution unless the text expressly or by necessary implication requires otherwise: o "Additional Obligations"shall mean any Golf Course Revenue notes or bonds issued on a parity with the Note in accordance with the provisions of this Resolution. o "Call Date"shall mean June I,2010,on which date the Refunded Bonds shall be redeemed and paid. D "Clerk"shall mean the City Clerk,or such other officer ofthe successor Governing Body as shall be charged with substantially the same duties and responsibilities. D "Fiscal Year"shall mean the twelve-month period beginning on July I of each year and ending on the last day of June of the following year,or any other consecutive twelve-month period adopted by the Governing Body or by law as the official accounting period of the System.Requirements of a Fiscal Year as expressed in this Resolution shall exclude any payment of principal or interest falling due on the first day of the Fiscal Year and include any payment of principal or interest falling due on the first day of the succeeding Fiscal Year. D "Governing Body"shall mean the City Council of the City,or its successor in function with respect to the operation and control of the System. D "Issuer"and "City"shall mean the City of Waukee,State ofIowa. D "Loan Agreement"shall mean a Loan Agreement between the Issuer and a lender or lenders in substantially the form attached to and approved by this Resolution. D "Net Revenues"shall mean gross earnings of the System after deduction of current expenses;"Current Expenses"shall mean and include the reasonable and necessary cost of operating,maintaining,repairing and insuring the System, including purchases at wholesale,if any,salaries,wages,and costs of materials and supplies but excluding depreciation and principal of and interest on the Notes and any Parity Obligations or payments to the various funds established herein; capital costs,depreciation and interest or principal payments are not System expenses. D "Note"shall mean $776,228 Golf Course Revenue Refunding Capital Loan Note,Series 2010,authorized to be issued by this Resolution. D "Original Purchaser"shall mean the purchaser of the Note from Issuer at the time of their original issuance. D "Parity Obligations"shall mean Golf Course Revenue notes,bonds or other obligations payable solely from the Net Revenues of the System on an equal basis with the Note herein authorized to be issued,and shall include Additional Obligations as authorized to be issued under the terms of this Resolution and the Outstanding Obligations. D "Paying Agent"shall mean the City Clerk,or such successor as may be approved by Issuer as provided herein and who shall carry out the duties prescribed herein as Issuer's agent to provide for the payment of principal of and interest on the Note as the same shall become due. D "Permitted Investments"shall mean any investments permitted in Iowa Code chapter 12B or section 12C.9.All interim investments must mature before the date on which the moneys are required for payment of principal and interest on the Note or project costs. D "Project Fund"shall mean the fund into which a portion of the proceeds that will be used,together with interest earnings thereon,to pay the principal, interest and redemption premium,if any,on the Refunded Bonds. D "Refunded Bonds"shall mean $776,228 of the $925,000 Golf Course Revenue Notes,Series 2005,dated March 4,2005. D "Registrar"shall mean the City Clerk of Waukee,Iowa,or such successor as may be approved by Issuer as provided herein and who shall carry out the duties prescribed herein with respect to maintaining a register of the owners of the Note. Unless otherwise specified,the Registrar shall also act as Transfer Agent for the Note. D "Reserve Fund Requirement"shall mean an amount not exceeding the lesser of (a)the maximum annual amount of the principal and interest coming due on the Notes and Parity Obligations;(b)10 %of the stated principal amount of the Notes and Parity Obligations or (c)125%of the average aunual principal and interest coming due on the Notes and Parity Obligations.For purposes of this definition:(1)"issue price"shall be substituted for "stated principal amount"for issues with original issue discount or original issue premium of more than a de minimus amount and (2)stated principal amount shall not include any portion of an issue refunded or advance refunded by a subsequent issue. o "Resolution"shall mean this resolution authorizing the issuance of the Note. D "System"or "Golf Course"shall mean the Sugar Creek Golf Course,which is operated as a City enterprise,of the Issuer and all properties of every nature hereinafter owned by the Issuer comprising part of or used as a part of the System, including all improvements and extensions made by Issuer while the Note or Parity Obligations remain outstanding;all real and personal property;and all appurtenances,contracts,leases,franchises and other intangibles. o "Tax Exemption Certificate"shall mean the Tax Exemption Certificate executed by the Treasurer and delivered at the time of issuance and delivery of the Note. o "Treasurer"shall mean the Director of Finance or such other officer as shall succeed to the same duties and responsibilities with respect to the recording and payment of the Note issued hereunder. o "Yield Restricted"shall mean required to be invested at a yield that is not materially higher than the yield on the Note under section 148 (a)of the Intemal Revenue Code or regulations issued thereunder. Section 2.Authoritv,The Loan Agreement and the Note authorized by this Resolution shall be issued pursuant to Sections 384.24A and 384.83,of the City Code of Iowa,and in compliance with all applicable provisions of the Constitution and laws of the State of Iowa.The Loan Agreement shall be substantially in the form attached to this Resolution and is authorized to be executed and issued on behalf of the Issuer by the Mayor and attested by the City Clerk. Section 3.Authorization and Purpose.There are hereby authorized to be issued, negotiable,serial,fully registered Revenue Note of the City of Waukee,in the County of Dallas,State ofIowa,in the aggregate amount of $776,228,for the purpose of paying costs of adjusting,extending and refunding existing Golf Course Revenue indebtedness including the $925,000 Golf Course Revenue Note,Series 2005. Section 4.Source of Payment.The Note herein authorized and Parity Notes and Parity Obligations and the interest thereon shall be payable solely and only out of the net earnings of the System and shall be a first lien on the future Net Revenues of the System. The Note shall not be a general obligation of the Issuer nor shall they be payable in any manner by taxation and the Issuer shall be in no manner liable by reason of the failure of the net revenues to be sufficient for the payment ofthe Note. Section 5.Note Details.Golf Course Revenue Refunding Capital Loan Note, Series 2010,of the City in the amount of $776,228,shall be issued to evidence the obligations of the Issuer under the Loan Agreement pursuant to the provisions of Sections 384.24A and 384.83 of the City Code ofIowa for the aforesaid purpose.The Note shall be designated "$776,228 GOLF COURSE REVENUE REFUNDING CAPITAL LOAN NOTE,SERIES 2010",be dated June 1,2010. The Note shall be executed by the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the City Clerk,and impressed or printed with the seal of the City and shall be fully registered as to both principal and interest as provided in this Resolution;principal,interest and premium,if any,shall be payable at the office of the Paying Agent by mailing of a check to the registered owner ofthe Note. Principal ofthe Note shall bear interest at the rate of 4.45%per annum. Thereafter,both principal of and interest on the Note shall be payable in equal semiannual instalhnents in the amount of$35,739.95 each,due on the first day ofJune and December each year,commencing December I,20 I 0,and continuing through and including December 1,2014,with one final installment of all remaining principal and interest due thereon at maturity on June 1,2015.All payments shall be applied first to the payment of interest due and next to the reduction of principal.Interest shall be calculated on the basis of a 360-day year comprised oftwelve 30-day months. Section 6.Redemption.The City reserves the right to prepay principal on the Note in whole or in part at any time prior to and in any order of maturity on terms of par and accrued interest.All principal so prepaid shall cease to bear interest on the prepayment date. Section 7.Registration of Note;Appointment of Registrar;Transfer;Ownership; Delivery;and Cancellation. (a)Registration.The ownership of Note may be transferred only by the making of an entry upon the books kept for the registration and transfer of ownership of the Note,and in no other way.The City Clerk is hereby appointed as Note Registrar under the terms of this Resolution.Registrar shall maintain the books of the Issuer for the registration of ownership of the Notes for the payment of principal of and interest on the Note as provided in this Resolution.The Note shall be negotiable as provided in Article 8 of the Uniform Commercial Code subject to the provisions for registration and transfer contained in the Note and in this Resolution. (b)Transfer.The ownership of any Note may be transferred only upon the Registration Books kept for the registration and transfer of the Note and only upon surrender thereof at the office of the Registrar together with an assignment duly executed by the holder or his duly authorized attorney in fact in such form as shall be satisfactory to the Registrar,along with the address and social security number or federal employer identification number of such transferee (or,if registration is to be made in the name of multiple individuals,of all such transferees).In the event that the address of the registered owner of a Note (other than a registered owner which is the nominee of the broker or dealer in question)is that of a broker or dealer,there must be disclosed on the Registration Books the information pertaining to the registered owner required above.Upon the transfer of any such Note,a new fully registered Note,of any denomination or denominations permitted by this Resolution in aggregate principal amount equal to the unmatured and unredeemed principal amount of such transferred fully registered Note,and bearing interest at the same rate and maturing on the same date or dates shall be delivered by the Registrar. (c)Registration of Transferred Note.In all cases of the transfer of the Note,the Registrar shall register,at the earliest practicable time,on the Registration Books, the Note,in accordance with the provisions of this Resolution. (d)Ownership.As to any Note,the person in whose name the ownership of the same shall be registered on the Registration Books of the Registrar shall be deemed and regarded as the absolute owner thereof for all purposes,and payment of or on account ofthe principal of the Note and the premium,if any,and interest thereon shall be made only to or upon the order of the registered owner thereof or his legal representative.All such payments shall be valid and effectual to satisfy and discharge the liability upon such Note,including the interest thereon,to the extent of the sum or sums so paid. (e)Cancellation.The Note which has been redeemed shall not be reissued but shall be cancelled by the Registrar.The Note which is cancelled by the Registrar shall be destroyed and a Certificate of the destruction thereof shall be furnished promptly to the Issuer;provided that if the Issuer shall so direct,the Registrar shall forward the cancelled Note to the Issuer. (f)Non-Presentment of Note.In the event any payment check representing payment of principal of or interest on the Note is returned to the Paying Agent or if any note is not presented for payment of principal at the maturity or redemption date,if funds sufficient to pay such principal of or interest on Note shall have been made available to the Paying Agent for the benefit of the owner thereof,all liability of the Issuer to the owner thereof for such interest or payment of such Note shall forthwith cease,terminate and be completely discharged,and thereupon it shall be the duty of the Paying Agent to hold such funds,without liability for interest thereon,for the benefit of the owner of such Note who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Resolution or on,or with respect to,such interest or Note.The Paying Agent's obligation to hold such funds shall continue for a period equal to two years and six months following the date on which such interest or principal became due, whether at maturity,or at the date fixed for redemption thereof,or otherwise,at which time the Paying Agent,shall surrender any remaining funds so held to the Issuer,whereupon any claim under this Resolution by the Owners of such interest or Note of whatever nature shall be made upon the Issuer. (g)Registration and Transfer Fees.The Registrar may furnish to each owner,at the Issuer's expense,one note for each annual maturity.The Registrar shall furnish all additional Note in lesser denominations (but not less than the minimum denomination)to an owner who so requests. Section 8.Reissuance of Mutilated,Destroyed,Stolen or Lost Notes.In case any outstanding Note shall become mutilated or be destroyed,stolen or lost,the Issuer shall at the request of Registrar authenticate and deliver a new Note of like tenor and amount as the Note so mutilated,destroyed,stolen or lost,in exchange and substitution for such mutilated Note to Registrar,upon surrender of such mutilated Note,or in lieu of and substitution for the Note destroyed,stolen or lost,upon filing with the Registrar evidence satisfactory to the Registrar and Issuer that such Note has been destroyed,stolen or lost and proof of ownership thereof,and upon furnishing the Registrar and Issuer with satisfactory indemnity and complying with such other reasonable regulations as the Issuer or its agent may prescribe and paying such expenses as the Issuer may incur in connection therewith. Section 9.Record Date.Payments of principal and interest,otherwise than upon full redemption,made in respect of the Note,shall be made to the registered holder thereof or to their designated Agent as the same appear on the books of the Registrar on the 15th day preceding the payment date.All such payments shall fully discharge the obligations ofthe Issuer in respect of such Note to the extent of the payments so made. Payment of principal shall only be made upon surrender of the Note to the Paying Agent. Section 10.Execution,Authentication and Delivery of the Note.Upon the adoption of this Resolution,the Mayor and Clerk shall execute and deliver the Note to the Registrar,who shall authenticate the Note and deliver the same to or upon order of the Original Purchaser.No Note shall be valid or obligatory for any purpose or shall be entitled to any right or benefit hereunder nnless the Registrar shall duly endorse and execute on such Note a Certificate of Authentication substantially in the form of the Certificate herein set forth.Such Certificate upon any Note executed on behalf of the Issuer shall be conclusive evidence that the Note so authenticated has been duly issued under this Resolution and that the holder thereof is entitled to the benefits of this Resolution. Section 11.Right to Name Substitute Paying Agent or Registrar.Issuer reserves the right to name a substitute,successor Registrar or Paying Agent upon giving prompt written notice to each registered N oteholder. Section 12.Form of Note.The Note shall be printed in substantial compliance with standards proposed by the American Standards Institute substantially in the form as follows: (6)(6) (7)(8) (1) (2)(3)(4)(5) (9) (9a) (10) (Continued on the back of this Note) (11 )(12)(13)(14)(15) FIGURE 1 (Front) (10) (Continued) FIGURE 2 (Back) (16) The text of the Note to be located thereon at the item numbers shown shall be as follows: Item 1,figure 1= Item 2,figure 1 = Item 3,figure 1 = Item 4,figure 1 = Item 5,figure 1 = Item 6,figure 1 = Item 7,figure 1 = Item 8,figure 1 = "STATE OF IOWA" "COUNTY OF DALLAS" "CITY OF WAUKEE" "GOLF COURSE REVENUE REFUNDING CAPITAL LOAN NOTE" "SERIES 2010" Rate:4.45% Maturity:June 1,2015 Note Date:June 1,2010 CUSIP No.:N/A "Registered" Note No.1 Principal Amount:$776,228 Item 9,figure 1=The City of Waukee,State of Iowa,a municipal corporation organized and existing under and by virtue of the Constitution and laws of the State of Iowa (the "Issuer"),for value received,promises to pay from the source and as hereinafter provided,on the maturity date indicated above,to Item 9A,figure 1 =(Registration panel to be completed by Registrar or Printer with name of Registered Owner). Item 10,figure 1 =or registered assigns,the principal sum of SEVEN HUNDRED SEVENTY-SIX THOUSAND TWO HUNDRED TWENTY-EIGHT DOLLARS in lawful money of the United States of America,on the maturity date shown above,only upon presentation and surrender hereof at the office of the City Clerk,Paying Agent of this issue,or its successor,with interest on such sum from the date hereof until paid at the rate per annum specified above. Principal of the Note shall bear interest at the rate of 4.45%per annum. Thereafter,both principal of and interest on the Note shall be payable in equal semiannual installments in the amount of$35,739.95 each,due on the first day of June and December each year,commencing December 1,2010,and continuing through and including December 1,2014,with one final installment of all remaining principal and interest due thereon at maturity on June 1,2015.All payments shall be applied first to the payment of interest due and next to the reduction of principaL Interest shall be calculated on the basis of a 360-day year comprised of twelve 30-day months. 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. The City reserves the right to prepay principal on the Note in whole or in part at any time prior to and in any order of maturity on terms of par and accrued interest.All principal so prepaid shall cease to bear interest on the prepayment date. This Note is issued pursuant to the provisions of Sections 384.24A and 384.83 of the City Code of Iowa,for the purpose of paying costs of adjusting,extending and refimding existing Golf Course Revenue indebtedness including the $925,000 Golf Course Revenue Note,Series 2005,and in order to evidence the obligations of the Issuer under a certain Loan Agreement dated the date hereof,in conformity to a Resolution of the City Council of the City duly passed and approved.For a complete statement of the revenues and funds from which and the conditions under which this Note is payable,a statement of the conditions under which additional 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 Agreement and Resolution. Ownership of this Note may be transferred only by transfer upon the books kept for such purpose by the City Clerk,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 Noteholders of such change.All Notes shall be negotiable as provided in Article 8 of the Uniform Commercial Code and subject to the provisions for registration and transfer contained in the Note Resolution. This Note and the series of which it forms a part and any Additional Obligations which may be hereafter issued and outstanding from time to time on a parity with the Notes,as provided in the Note Resolution and Loan Agreement of which notice is hereby given and which are hereby made a part hereof,are payable from and secured by a pledge of the net revenues of the Sugar Creek golf enterprise of the City of Waukee (the "System"),as defmed and provided in the Resolution.There has heretofore been established and the City covenants and agrees that it will maintain just and equitable rates or charges for the use of and service rendered by the System in each year for the payment of the proper and reasonable expenses of operation and maintenance of the System and for the establishment of a sufficient sinking fund to meet the principal of and interest on this series of Notes,and other Obligations ranking on a parity therewith,as the same become due.This Note is not payable in any manner by taxation and under no circumstances shall the City be in any marmer liable by reason of the failure of the net earnings to be sufficient for the payment hereof. This Note is a "qualified tax-exempt obligation"designated by the City for purposes of Section 265(b )(3)(B)of the Internal Revenue Code of 1986. And it is hereby represented and certified that all acts,conditions and things requisite,according to the laws and Constitution of the State ofIowa,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,the City 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 Clerk,with the seal of the City impressed hereon,and authenticated by the manual signature of an authorized representative of the Registrar,the City Clerk,Waukee,Iowa. Item II,figure 1 =Date of Authentication: Item 12,figure 1 =This is oric of the Notes described in the within mentioned Resolution,as registered by the City Clerk CITY CLERK,Registrar By:------------c------------Authorized Signature Item 13,fignre I Registrar and Transfer Agent:City Clerk Paying Agent:City Clerk SEE REVERSE FOR CERTAIN DEFINITIONS Item 14,figure 1 Item 15,figure I (Seal) (Signature Block) CITY OF WAUKEE,STATE OF IOWA By:_______----'====-====L-_ Mayor ATTEST: (manual signature) By:_______----'====-====L-_ City Clerk (manual signature) Item 17,figure I =(Assignment Block) (Information Required for Registration) ASSIGNMENT For value received,the undersigned hereby sells,assigns and transfers unto ____________(Social Security or Tax Identification No. ______-!)the within Note and does hereby irrevocably constitute and appoint ____________attorney in fact to transfer the said Note on the books kept for registration of the within Note,with full power of substitution in the premises. Dated this day of ,2010. (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 Note(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 ofthe 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)----:-:::----c--------------------- Social Security or Tax Identification Number ofTransferee(s)_ Transferee is a(n): Individual* Partnership Corporation _ Trust *Ifthe Note is to be registered in the names of multiple individual owners,the names of all such owners and one address and social security number must be provided. The following abbreviations,when used in the inscription on the face of this Note, shall be construed as though written out in full according to applicable laws or regulations: TEN COM -as tenants in common TEN ENT -as tenants by the entireties JT TEN -as joint tenants with rights of survivorship and not as tenants in common IA UNIF TRANS MIN ACT -Custodian . (Cust)(Minor) Under Iowa Uniform Transfers to Minors Act.... (State) ADDITIONAL ABBREVIATIONS MAY ALSO BE USED THOUGH NOT IN THE ABOVE LIST Section 13.Equality of Lien.The timely payment of principal of and interest on the Note and Parity Obligations shall be secured equally and ratably by the Net Revenues of the System without priority by reason of number or time of sale or delivery;and the revenues of the System are hereby irrevocably pledged to the timely payment of both principal and interest as the same become due. Section 14.Application of Note Proceeds -Redemption and Cunent RefLmding of Refunded Bonds.Proceeds of the Notes shall be applied as follows: Proceeds shall be deemed used for the payment of the Refunded Bonds and are irrevocably appropriated exclusively to the payment of principal of, interest on and premium,if any,due on the redemption thereof. The Refunded Bonds are called and shall be redeemed as of the Call Date. Section 15.User Rates.So long as the Note or any Parity Obligations are outstanding,the City shall maintain the Golf Course in good condition,and the Golf Course shall be operated in an efficient manner and at a reasonable cost as a revenue producing undertaking.The City shall establish,impose,adjust and provide for the collection of rates to be charged to customers of the Golf Course to produce gross revenues (the "Gross Revenues")at least sufficient to pay the expenses of operation and maintenance of the Golf Course (the "Operating Expenses"),which shall include salaries, wages,cost of maintenance and operation,materials,supplies,insurance and all other items normally included under recognized accounting practices (but does not include allowances for depreciation in the valuation of physical property)and to leave a balance of Net Revenues at least sufficient to pay the principal of and interest on the Note and any Parity Obligations outstanding from time to time,as the same become due,except that the City shall not be required to increase rates sufficient to pay the fmal installment of principal of and interest on the Note due June 1,2015,and to maintain a reasonable reserve for the payment of such principal and interest,as hereinafter provided. Section 16.Application of Revenues.From and after the delivery of the Note,and as long as the Note or Parity Obligations shall be outstanding and unpaid either as to principal or as to interest,or until the Note and Parity Obligations then outstanding shall have been discharged and satisfied in the manner provided in this Resolution,the entire income and revenues of the System shall be deposited as collected in a fund to be known as the Golf Course Revenue Fund (the "Revenue Fund"),and shall be disbursed only as follows: (a)Operation and Maintenance Fund.Money in the Revenue F1Uldshall first be disbursed to make deposits into a separate and special fund to pay current expenses.The fund shall be known as the Golf Course Revenue Operation and Maintenance Fund (the "Operation and Maintenance Fund").There shall be deposited in the Operation and Maintenance Fund each month an amount sufficient to meet the current expenses of the month plus an amount equal to 1/12th of expenses payable on an annual basis such as insurance.After the first day of the month,further deposits may be made to this account from the Revenue Fund to the extent necessary to pay current expenses accrued and payable to the extent that funds are not available in the Surplus Fund. (b)Sinking Fund.Money in the Revenue Fund shall next be disbursed to make deposits into a separate and special fund to pay the principal and interest requirements of the Fiscal Year on the Note and Parity Obligations.The fund shall be known as the Golf Course Revenue Sinking Fund (the "Sinking Fund"),into which there shall be set aside from the future Net Revenues of the Golf Course such portion thereof as will be sufficient to pay the interest upon and principal of the Note as the same become due,and it is hereby determined that the minimum amount to be so set aside into the Sinking Fund from the Net Revenues during each month of each year shall not be less than as follows: Commencing on June 1,2010,and continuing thereafter,a sum equal to one-sixth (1/6)of the installment payment amount due on the next succeeding payment date. If for any reason the amount on hand in the Sinking Fund exceeds the required amount,the excess shall forthwith be withdrawn and paid into the Revenue Fund.Money in the Sinking Fund shall be used solely for the purpose of paying principal of and interest on the Note and Parity Obligations as the same shall become due and payable. Whenever Parity Obligations are issued,provisions shall be made for additional payments to be made into the Sinking Fund for the purpose of paying the interest on and principal of such Parity Obligations. Such payments into the Sinking Fund shall be made in equal monthly installments on the first day of each month,except that when the first day of any month shall be a Sunday or legal holiday,then such payments shall be made on the next succeeding business day. If at any time there be a failure to pay into the Sinking Fund the full amount above stipulated,then an amount equivalent to the deficiency shall be paid into the Sinking Fund from the Net Revenues of the Golf Course as soon as available,and the same shall be in addition to the amount otherwise required to be so set apart and paid into the Sinking Fund. (c)Reserve Fund.Money in the Revenue Fund shall be disbursed to maintain a debt service reserve in an amount equal to the Reserve Fund Requirement.Such fund shall be known as the Golf Course Revenue Debt Service Reserve Fund (the "Reserve Fund").In each month there shall be deposited in the Reserve Fund an amount equal to $1,000;provided,however,that when the amount on deposit in the Reserve Fund shall be not less than $50,000,no further deposits shall be made into the Reserve Fund except to maintain such level,and when the amount on deposit in the Reserve Fund is greater than the balance required above,such additional amounts shall be withdrawn and paid into the Revenue Fund.Money in the Reserve Fund shall be used solely for the purpose of paying principal at maturity of or interest on the Notes and Parity Obligations for the payment of which insufficient money shall be available in the Sinking Fund. Whenever it shall become necessary to so use money in the Reserve Fund,the payments required above shall be continued or resmned until it shall have been restored to the required minimum amount.At Closing,the existing Reserve Fund of the Refunded Bonds shall transfer as security for the Notes. (d)Subordinate Obligations.Money in the Revenue Fund may next be used to pay principal of and interest on (including reasonable reserves therefor) any other obligations which by their terms shall be payable from the revenues of the System,but subordinate to the Note and Parity Obligations,and which have been issued for the purposes of extensions and improvements to the System or to retire the Note or Parity Obligations in advance of maturity,or to pay for extraordinary repairs or replacements to the System. (e)Surplus Revenue.All money thereafter remaining in the Revenue Fund at the close of each month may be deposited in any of the funds created by this Resolution,to pay for extraordinary repairs or replacements to the System,or may be used to payor redeem the Note or Parity Obligations,any of them,or for any lawful purpose. Money in the Revenue Fund shall be allotted and paid into the various funds and accounts hereinbefore referred to in the order in which the funds are listed,on a cumulative basis on the 10th day of each month,or on the next succeeding business day when the 10th shall not be a business day;and if in any month the money in the Revenue Fund shall be insufficient to deposit or transfer the required amount in any of the funds or accounts,the deficiency shall be made up in the following month or months after payments into all funds and accounts enjoying a prior claim to the revenues shall have been met in full.The provisions of this Section shall not be construed to require the Issuer to maintain separate bank accounts for the funds created by this Section;except the Sinking Fund and the Reserve Fund shall be maintained in a separate account but may be invested in conjunction with other funds of the City but designated as a trust fund on the books and records of the City. Section 17.Investments.All of the funds provided by this Resolution may be invested only in Permitted Investments or deposited in financial institutions which are members ofthe Federal Deposit Insurance Corporation or its equivalent successor,and the deposits in which are insured thereby and all such deposits exceeding the maximum amount insured from time to time by FDIC or its equivalent successor in anyone financial institution shall be continuously secured in compliance with Chapter l2C of the Code ofIowa,2009,as amended,or otherwise by a valid pledge of direct obligations of the United States Government having an equivalent market value.All such interim investments shall mature before the date on which the moneys are required for the purposes for which the fund was created or otherwise as herein provided but in no event maturing in more than three years in the case of the Reserve Fund. All income derived from such investments shall be deposited in the Revenue Fund and shall be regarded as revenues of the System.Investments shall at any time necessary be liquidated and the proceeds thereof applied to the purpose for which the respective fund was created. Section 18.Covenants Regarding the Operation of the System.The Issuer hereby covenants and agrees with each and every holder of the Note and Parity Obligations: (a)Maintenance and Efficiency.The Issuer will maintain the System in good condition and operate it in an efficient manner and at reasonable cost. (b)Sufficiency of Rates.On or before the beginning of each Fiscal Year the Governing Body will adopt or continue in effect rates for all services rendered by the System determined to be sufficient to produce Net Revenues for the next succeeding Fiscal Year adequate to pay principal and interest requirements and create reserves as provided in this Resolution but not less than 100%percent of the principal and interest requirements of the Fiscal Year,except that the City shall not be required to increase rates sufficient to pay the final installment of principal of and interest on the Note due June 1,2015.No free use of the System by the Issuer or any department,agency or instrumentality of the Issuer shall be permitted except upon the determination of the Governing Body that the rates and charges otherwise in effect are sufficient to provide Net Revenues at least equal to the requirements of this subsection. (c)Insurance.That the Issuer shall maintain insurance for the benefit of the Noteholders on the insurable portions of the System of a kind and in an amount which normally would be carried by private companies engaged in a similar kind of business.The proceeds of any insurance,except public liability insurance,shall be used to repair or replace the part or parts of the System damaged or destroyed,or if not so used shall be placed in the Revenue Fund. (d)Accounting and Audits.The Issuer will cause to be kept proper books and accounts adapted to the System and in accordance with generally accepted accounting practices,and will diligently act to cause the books and accounts to be audited annually and reported upon not later than 180 days after the end of each Fiscal Year by an Independent Auditor and will provide copies of the audit report to the holders ofthe Note and Parity Obligations upon request.The holders of the Notes and Parity Obligations shall have at all reasonable times the right to inspect the System and the records,accounts and data of the Issuer relating thereto. (e)State Laws.The Issuer will faithfully and punctually perform all duties with reference to the System required by the Constitution and laws of the State ofIowa,including the making and collecting of reasonable and sufficient rates for services rendered by the System as above provided,and will segregate the revenues of the System and apply the revenues to the funds specified in this Resolution. (f)Property.The Issuer will not sell,lease,mortgage or in any mauner dispose of the System,or any capital part thereof,including any and all extensions and additions that may be made thereto,until satisfaction and discharge of the Note and Parity Obligations shall have been provided for in the manner provided in this Resolution;provided,however,that this covenant shall not be construed to prevent the disposal by the Issuer of property which in the judgment of its Governing Body has become inexpedient or unprofitable to use in connection with the System,or if it is to the advantage of the System that other property of equal or higher value be substituted therefor,and provided further that the proceeds of the disposition of such property shall be placed in a revolving fund to be used in preference to other sources for capital improvements to the System.Any such proceeds ofthe disposition of property acquired with the proceeds of the Note or Parity Obligations shall not be used to pay principal or interest on the Note or Parity Obligations or for payments into the Sinking or Reserve Fund. (g)Fidelity Bond.The Issuer shall maintain fidelity bond coverage in amounts which normally would be carried by private companies engaged in a similar kind of business on each officer or employee having custody of funds of the System. (h)Additional Charges.The Issuer will require proper connecting charges and/or other security for the payment of service charges. (i)Budget.The Governing Body of the Issuer shall approve and conduct operations pursuant to a system budget of revenues and current expenses for each Fiscal Year.Such budget shall take into account revenues and current expenses during the current and last preceding Fiscal Year.Copies of such budget and any amendments thereto shall be provided to the holders of the Note upon request. Section 19.Remedies of Note holders.Except as herein expressly limited the holder or holders of the Note and Parity Obligations shall have and possess all the rights of action and remedies afforded by the common law,the Constitution and statutes of the State ofIowa,and of the United States of America,for the enforcement of payment of their Note and interest thereon,and of the pledge of the revenues made hereunder,and of all covenants of the Issuer hereunder. Section 20.Prior Lien and Parity Obligations.The Issuer will issue no other notes, bonds or obligations of any kind or nature payable from or enjoying a lien or claim on the property or revenues of the System having priority over the Note or Parity Obligations. The City hereby reserves the right to issue Additional Obligations on a parity and equality of rank with the Note with respect to the lien and claim of such Additional Obligations to the revenues of the System and the money on deposit in the funds adopted by this Resolution,subject to the approval of the Purchaser. Section 21.Disposition of Proceeds;Arbitrage Not Permitted.The Issuer reasonably expects and covenants that no use will be made of the proceeds from the issuance and sale ofthe Note issued hereunder which will cause the Note to be classified as arbitrage bonds within the meaning of Section 148(a)and (b)of the Internal Revenue Code of the United States,and that throughout the term of the Note it will comply with the requirements of such statute and regulations issued thereunder. To the best knowledge and belief of the Issuer,there are no facts or circumstances that would materially change the foregoing statements or the conclusion that it is not expected that the proceeds of the Note will be used in a manner that would cause the Note to be arbitrage notes.Without limiting the generality of the foregoing,the Issuer hereby agrees to comply with the provisions of the Tax Exemption Certificate and the provisions of the Tax Exemption Certificate are hereby incorporated by reference as part of this Resolution.The Treasurer is hereby directed to make and insert all calculations and determinations necessary to complete the Tax Exemption Certificate in all respects and to execute and deliver the Tax Exemption Certificate at issuance of the Notes to certify as to the reasonable expectations and covenants of the Issuer at that date. The Issuer covenants that it will treat as Yield Restricted any proceeds of the Note remaining unexpended after three years from the issuance and any other funds required by the Tax Exemption Certificate to be so treated.If any investments are held with respect to the Note and Parity Obligations,the Issuer shall treat the same for the purpose of restricted yield as held in proportion to the original principal amounts of each issue. The Issuer covenants that it will exceed any investment yield restriction provided in this Resolution only in the event that it shall first obtain an opinion of recognized bond counsel that the proposed investment action will not cause the Note to be classified as arbitrage bonds under Section l48(a)and (b)the Internal Revenue Code or regulations issued thereunder. The Issuer covenants that it will proceed with due diligence to spend the proceeds of the Note for the purpose set forth in this Resolution.The Issuer further covenants that it will make no change in the use of the proceeds available for the construction of facilities or change in the use of any portion of the facilities constructed therefrom by persons other than the Issuer or the general public unless it has obtained an opinion of bond counselor a revenue ruling that the proposed proj ect or use will not be of such character as to cause interest on any of the Note not to be exempt from federal income taxes in the hands of holders other than substantial users of the project,under the provisions of Section l42(a)of the Intemal Revenue Code of the United States,related statutes and regulations. Section 22.Additional Covenants,Representations and Warranties of the Issuer. The Issuer certifies and covenants with the purchasers and holders of the Note from time to time outstanding that the Issuer through its officers,(a)will make such further specific covenants,representations and assurances as may be necessary or advisable;(b)comply with all representations,covenants and assurances contained in the Tax Exemption Certificate,which Tax Exemption Certificate shall constitute a part of the contract between the Issuer and the owners of the Note;(c)consult with bond counsel (as defined in the Tax Exemption Certificate);(d)pay to the United States,as necessary,such sums of money representing required rebates of excess arbitrage profits relating to the Note;(e) file such forms,statements and supporting documents as may be required and in a timely manner;and (f)if deemed necessary or advisable by its officers,to employ and pay fiscal agents,financial advisors,attorneys and other persons to assist the Issuer in such compliance. Section 23.Qualified Tax-Exempt Obligations.The Notes currently refund obligations oflike amount previously designated as "qualified tax exempt obligations"by the Issuer under Section 265(b)(3)of the Internal Revenue Code.Accordingly,the Note retains such designation under Section 265(b )(3)(D). Section 24.Discharge and Satisfaction of the Note.The covenants,liens and pledges entered into,created or imposed pursuant to this Resolution may be fully discharged and satisfied with respect to the Note and Parity Obligations,or any of them, in anyone or more of the following ways: (a)By paying the Note or Parity Obligations when the same shall become due and payable;and (b)By depositing in trust with the Treasurer,or with a corporate trustee designated by the Governing Body for the payment of the obligations and irrevocably appropriated exclusively to that purpose an amount in cash or direct obligations of the United States the maturities and income of which shall be sufficient to retire at maturity,or by redemption prior to maturity on a designated date upon which the obligations may be redeemed,all of such obligations outstanding at the time,together with the interest thereon to maturity or to the designated redemption date,premiums thereon,if any,that may be payable on the redemption of the same;provided that proper notice of redemption of all such obligations to be redeemed shall have been previously published or provisions shall have been made for such publication. Upon such payment or deposit of money or securities,or both,in the amount and manner provided by this Section,all liability of the Issuer with respect to the Notes or Parity Obligations shall cease,determine and be completely discharged,and the holders thereof shall be entitled only to payment out of the money or securities so deposited. Section 25.Resolution a Contract.The provisions of this Resolution shall constitute a contract between the Issuer and the holder or holders of the Note and Parity Obligations,and after the issuance of any of the Note no change,variation or alteration of any kind in the provisions of this Resolution shall be made in any manner,except as provided in the next succeeding Section,until such time as all of the Note and Parity Obligations,and interest due thereon,shall have been satisfied and discharged as provided in this Resolution. Section 26.Amendment of Resolution Without Consent.The Issuer may,without the consent of or notice to any of the holders of the Note and Parity Obligations,amend or supplement this Resolution for anyone or more of the following purposes: (a)to cure any ambiguity,defect,omission or inconsistent provision in this Resolution or in the Note or Parity Obligations;or to comply with any application provision oflaw or regulation of federal or state agencies;provided,however,that such action shall not materially adversely affect the interests of the holders of the Note or Parity Obligations; (b)to change the terms or provisions of this Resolution to the extent necessary to prevent the interest on the Note or Parity Obligations from being includable within the gross income of the holders thereof for federal income tax purposes; (c)to grant to or confer upon the holders of the Note or Parity Obligations any additional Tights,remedies,powers or authority that may lawfully be granted to or conferred upon the holders of the Note; (d)to add to the covenants and agreements of the Issuer contained in this Resolution other covenants and agreements of,or conditions or restrictions upon, the Issuer orto surrender or eliminate any right or power reserved to or conferred upon the Issuer in this Resolution;or (e)to subject to the lien and pledge of this Resolution additional pledged revenues as may be permitted by law. Section 27.Amendment of Resolution Requiring Consent.This Resolution may be amended from time to time if such amendment shall have been consented to by holders of not less than two-thirds in principal amount of the Note and Parity Obligations at any time outstanding (not including in any case any Note which may then be held or owned by or for the account of the Issuer,but including such refunding obligations as may have been issued for the purpose of refunding any of such Note if such refunding obligations shall not then be owned by the Issuer);but this Resolution may not be so amended in such mauner as to: (a)Make ally change in the maturity of interest rate of the Note,or modify the terms of payment of principal of or interest on the Note or any ofthem or impose any conditions with respect to such payment; (b)Materially affect the rights of the holders of less than all of the Note and Parity Obligations then outstanding;and (c)Reduce the percentage of the principal amount of Note,the consent of the holders of which is required to effect a further amendment. Whenever the Issuer shall propose to amend this Resolution under the provisions of this Section,it shall cause notice of the proposed amendment to be filed with the Original Purchaser and to be mailed by certified mail to each registered owner of any Note as shown by the records ofthe Registrar,Such notice shall set forth the nature of the proposed amendment and shall state that a copy of the proposed amendatory Resolution is on file in the office of the City Clerk. Whenever at any time within one year from the date of the mailing of the notice there shall be filed with the City Clerk an instrument or instruments executed by the holders of at least two-thirds in aggregate principal amount of the Note then outstanding as in this Section defmed,which instrument or instruments shall refer to the proposed amendatory Resolution described in the notice and shall specifically consent to and approve the adoption thereof,thereupon,but not otherwise,the Governing Body of the Issuer may adopt such amendatory Resolution and such Resolution shall become effective and binding upon the holders of all of the Note and Parity Obligations. Any consent given by the holder of a Note pursuant to the provisions of this Section shall be irrevocable for a period of six months from the date of the instrument evidencing such consent and shall be conclusive and binding upon all future holders of the same Note during such period.Such consent may be revoked at any time after six months from the date of such instrument by the holder who gave such consent or by a successor in title by filing notice of such revocation with the City Clerk. The fact and date of the execution of any instrument under the provisions of this Section may be proved by the certificate of any officer in any jurisdiction who by the laws thereof is authorized to take acknowledgments of deeds within such jurisdiction that the person signing such instrument acknowledged before him the execution thereof,or may be proved by an affidavit of a witness to such execution sworn to before such officer. The amount and numbers of the Note held by any person executing such instrument and the date of his holding the same may be proved by an affidavit by such person or by a certificate executed by an officer of a bank or trust company showing that on the date therein mentioned such person had on deposit with such bank or trust company the Note described in such certificate. Section 28.Severability.If any section,paragraph,or provision of this Resolution shall be held to be invalid or unenforceable for any reason,the invalidity or unenforceability of such section,paragraph or provision shall not affect any of the....remammg provisions. Section 29.Repeal of Conflicting Ordinances or Resolutions and Effective Date. All other ordinances,resolutions and orders,or parts thereof,in conflict with the provisions of this Resolution are,to the extent of such conflict,hereby repealed;and this Resolution shall be in effect from and after its adoption. ADOPTED AND APPROVED this 17th day of May,2010. ATTEST: ROLL CALL VOTE Shane Blanchard Dan Dutcher Casey L.Harvey Darlene Stanton Mike Watts AYE X X X X NAY ABSENT ABSTAIN X