HomeMy WebLinkAboutOrdinance 4684 ORDINANCE NO, 4684
AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF THE
CITY'S $3,725,000 TAX INCREMENT INTEREST ACCRETION BONDS
(HIGHWAY 71 EAST SQUARE REDEVELOPMENT DISTRICT NO. 1
PROJECT), SERIES 2005, FOR THE PURPOSE OF FINANCING
CERTAIN IMPROVEMENTS WITHIN THE DISTRICT; AUTHORIZING
THE EXECUTION AND DELIVERY OF A TRUST INDENTURE
PURSUANT TO WHICH THE BONDS WILL BE ISSUED AND
SECURED; AUTHORIZING THE EXECUTION AND DELIVERY OF AN
OFFICIAL STATEMENT PURSUANT TO WHICH THE BONDS WILL
BE OFFERED; AUTHORIZING THE EXECUTION AND DELIVERY OF
A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF
THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A
CONTINUING DISCLOSURE AGREEMENT; PRESCRIBING OTHER
MATTERS RELATING THERETO; AND DECLARING AN
EMERGENCY
WHEREAS, the City Council of the City of Fayetteville, Arkansas (the "City") has
previously stated its determination in Resolution No. 19-05 adopted February 1 , 2005, that there
is a great need for a source of revenue to finance the costs of alleviating blight and encouraging
development and redevelopment within the City and in furtherance of such purposes has created
the Highway 71 East Square Redevelopment District No. 1 (the "District') pursuant to
Ordinance No. 4608 adopted on August 17, 2004, as amended by Ordinance No. 4662 adopted
on December 28, 2004, and by Ordinance No. 4673 adopted on January 25, 2005 ; and
WHEREAS, it has been determined that the specific actions needed to alleviate such
blight and encourage such development and redevelopment consist of (i) the acquisition of
certain real property, the demolition of existing structures thereon and site preparation in
connection therewith, which property is located within the District and consists of the former
Mountain Inn property, the former Niblock Law Offices, the former Red Bird Restaurant and the
former Washington County Courts Building, and (ii) the construction of certain sidewalk and
crosswalk improvements within the District (collectively, the "Project'); and
WHEREAS, upon completion of the Project and upon satisfaction of certain conditions,
the City intends to sell the cleared property to a private developer for the purpose of constructing
a hotel, meeting place, condominium and parking deck development thereon; and
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas, including particularly Amendment 78 to the
Constitution of the State of Arkansas ("Amendment 78") and Arkansas Code Annotated (2003
Supp.) Sections 14- 168-301 et seq. (as from time to time amended, the "Act'), to issue and sell
its bonds to finance the costs of various capital improvements within the District such as those
comprising the Project, which bonds are to be secured by and payable from the ad valorem tax
increment described in and authorized by the Act; and
WHEREAS, as authorized under the provisions of Amendment 78 and the Act, the City
has now determined to issue and sell its Tax Increment Interest Accretion Bonds (Highway 71
East Square Redevelopment District No. 1 Project), Series 2005, in the principal amount of
$3,725,000 (the "Bonds"), in order to provide financing for the costs of the Project and to pay
related costs of issuance; and
WHEREAS, the City has made arrangements for the sale of the Bonds to Crews &
Associates, Inc., Little Rock, Arkansas (the "Underwriter"), such sale to be made pursuant to the
terms of a Bond Purchase Agreement between the City and the Underwriter (the "Bond Purchase
Agreement") in substantially the form presented to and before this meeting; and
WHEREAS, the terms of the Bonds are consistent with the financing terms described in
the District's project plan originally adopted on December 7, 2004, pursuant to Ordinance No.
4646, and amended on December 28, 2004 and March 15, 2005, pursuant to Ordinance No. 4663
and Ordinance No. 4683 , respectively.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS THAT:
Section 1 : Under the authority of the Constitution and laws of the State of Arkansas,
including particularly Amendment 78 and the Act, there is hereby authorized the issuance of
bonds of the City to be designated as "City of Fayetteville, Arkansas Tax Increment Interest
Accretion Bonds (Highway 71 East Square Redevelopment District No. 1 Project), Series 2005."
The Bonds shall be issued at one time or from time to time in the original aggregate principal
amount of Three Million Seven Hundred Twenty-Five Thousand Dollars ($3 ,725,000). The
Bonds shall mature on August 1 , 2029 and shall bear interest at the rate of 6.50% per annum, as
specified in the Bond Purchase Agreement presented to this meeting.
The proceeds of the Bonds will be utilized to finance the costs of acquisition, demolition,
and site preparation relating to Project and to pay publication, legal, underwriting and other
expenses incidental to the issuance of the Bonds. The City Council hereby finds that the real
property within the District will be benefited upon completion of the Project.
The Bonds shall be issued in minimum denominations of $5,000 and in increments of
$5,000 in excess thereof. The Bonds shall be dated, shall be in the form, shall be numbered,
shall be subject to redemption prior to maturity, and shall contain such other terms, covenants
and conditions, all as set forth in that certain Trust Indenture to be dated as of April 15, 2005 (the
"Indenture"), by and between the City and The Bank of Fayetteville, as trustee (the "Trustee"), to
be entered into by the City and the Trustee in substantially the form submitted to this meeting.
The Mayor is hereby authorized and directed to execute and deliver the Bonds in
substantially the form thereof contained in the Indenture submitted to this meeting, and the City
Clerk is hereby authorized and directed to execute and deliver the Bonds and to affix the seal of
the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the
Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby authorized to
confer with the Trustee, the Underwriter and Kutak Rock LLP, Little Rock, Arkansas ("Bond
Counsel"), in order to complete the Bonds in substantially the form contained in the Indenture
2
i M
submitted to this meeting, with such changes as shall be approved by such persons executing the
Bonds, their execution to constitute conclusive evidence of such approval.
Section 2 : In order to pay the principal of and interest on the Bonds as they mature or
are called for redemption prior to maturity, the Act provides that the District's tax increment, as
defined in the Act (the "Tax Increment"), shall be calculated annually and any positive amount
distributed to the City for deposit into the Highway 71 East Square Redevelopment District No. 1
Tax Increment Fund created in Ordinance No. 4608. Pursuant to the Indenture, such fund will be
assigned to and held by the Trustee for the benefit of the holders of the Bonds. The City
covenants and agrees that all receipts relating to the Tax Increment will be accounted for
separately as special funds on the books of the City, and receipts of said Tax Increment will be
deposited and will be used solely as provided in the Indenture.
Section 3 : To prescribe the terms and conditions upon which the Bonds are to be
executed, authenticated, issued, accepted, held and secured, the Mayor is hereby authorized and
directed to execute and acknowledge the Indenture, and the Clerk is hereby authorized and
directed to execute and acknowledge the Indenture and to affix the seal of the City thereto, and
the Mayor and the City Clerk are hereby authorized and directed to cause the Indenture to be
accepted, executed and acknowledged by the Trustee. The Indenture is hereby approved in
substantially the form submitted to this meeting, including, without limitation, the provisions
thereof pertaining to the Tax Increment and the terms of the Bonds. The Mayor is hereby
authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete
the Indenture in substantially the form submitted to this meeting, with such changes as shall be
approved by such persons executing the Indenture, their execution to constitute conclusive
evidence of such approval.
(Advice is given that a copy of the Indenture in substantially the form authorized to be
executed is on file with the City Clerk and is available for inspection by any interested person.)
Section 4: There is hereby authorized and approved a Preliminary Official Statement
of the City, including the cover page and appendices attached thereto, relating to the Bonds. The
Preliminary Official Statement is hereby "deemed final" within the meaning of U.S. Securities
and Exchange Commission Rule 15c2- 12. The prior distribution of the Preliminary Official
Statement is hereby ratified and approved. The Preliminary Official Statement, as amended to
conform to the terms of the Bond Purchase Agreement, including Exhibit A thereto, and with
such other changes and amendments as are mutually agreed to by the City, the Underwriter and
Bond Counsel, is herein referred to as the "Official Statement", and the Mayor is hereby
authorized to execute the Official Statement for and on behalf of the City. The Official
Statement is hereby approved in substantially the form of the Preliminary Official Statement
submitted to this meeting, and the Mayor is hereby authorized to confer with the Underwriter and
Bond Counsel in order to complete the Official Statement in substantially the form of the
Pr6liminary Official Statement submitted to this meeting with such changes as shall be approved
by such persons, the Mayor's execution to constitute conclusive evidence of such approval.
(Advice is given that a copy of the Preliminary Official Statement is on file with the City
Clerk and is available for inspection by any interested person.)
3
Section 5 : In order to prescribe the terms and conditions upon which the Bonds are to
be sold to the Underwriter, the Mayor is hereby authorized and directed to execute the Bond
Purchase Agreement on behalf of the City, to be dated as of the date of its execution (the "Bond
Purchase Agreement'), by and between the City and the Underwriter, and said Bond Purchase
Agreement is hereby approved in substantially the form submitted to this meeting, and the
Mayor is hereby authorized to confer with the Underwriter and Bond Counsel in order to
complete the Bond Purchase Agreement in substantially the form submitted to this meeting, with
such changes as shall be approved by such persons executing the Bond Purchase Agreement,
their execution to constitute conclusive evidence of such approval.
(Advice is given that a copy of the Bond Purchase Agreement in substantially the form
authorized to be executed is on file with the City Clerk and is available for inspection by any
interested person.)
Section 6: In order to provide for continuing disclosure of certain financial and
operating information with respect to the City, the District and the Tax Increment in compliance
with the provisions of Rule 15c2- 12 of the U. S. Securities and Exchange Commission, the
Mayor is hereby authorized and directed to execute a Continuing Disclosure Agreement (the
"Continuing Disclosure Agreement'), by and between the City and the Trustee, and the Mayor is
hereby authorized and directed to cause the Continuing Disclosure Agreement to be executed by
the Trustee. The Continuing Disclosure Agreement is hereby approved in substantially the form
submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the
Underwriter and Bond Counsel in order to complete the Continuing Disclosure Agreement in
substantially the form submitted to this meeting with such changes as shall be approved by such
persons executing the Continuing Disclosure Agreement, their execution to constitute conclusive
evidence of such approval.
(Advice is given that a copy of the Continuing Disclosure Agreement in substantially the
form authorized to be executed is on file with the City Clerk and is available for inspection by
any interested person.)
Section 7: The Mayor and City Clerk, for and on behalf of the City, are hereby
authorized and directed to do any and all things necessary to effect the issuance, sale, execution
and delivery of the Bonds and to effect the execution and delivery of the Indenture, the Bond
Purchase Agreement, the Continuing Disclosure Agreement and a Tax Regulatory Agreement
relating to the tax exemption of interest on the Bonds, and to perform all of the obligations of the
City under and pursuant thereto. The Mayor and the City Clerk are further authorized and
directed, for and on behalf of the City, to execute all papers, documents, certificates and other
instruments that may be required for the carrying out of such authority or to evidence the
exercise thereof.
Section 8: The provisions of this Ordinance are hereby declared to be severable, and
if any section, phrase or provision shall for any reason be declared to be illegal or invalid, such
declaration shall not affect the validity of the remainder of the sections, phrases or provisions of
this Ordinance.
4
0
Section 9: All ordinances, resolutions and parts thereof in conflict herewith are
hereby repealed to the extent of such conflict.
Section 10: There is hereby found and declared to be an immediate need for certain
infrastructure improvements within the District, which improvements will benefit the public
health, safety and welfare of the City and its inhabitants, and the issuance and sale of the Bonds
approved hereby for the purpose of financing the Project and the taking of the other actions
authorized herein are immediately necessary in connection with such improvements. It is,
therefore, declared that an emergency exists and this Ordinance being necessary for the
immediate preservation of the public health, safety and welfare shall be in force and take effect
immediately upon and after its passage.
PASSED and APPROVED this 15`h day of March, 2005.
GTYpSGP: APPROVED:
c ; FAYETTEVILLE ;
:� a By:
%9so9. 'kANs?c J, A/ � COO Mayor
ATTEST: '%,�SjN . . . . •G () N
� ��ON�����.
By: &mA424
SO DRA SMITH, City Clerk
5
• •
EXECUTION COPY
BOND PURCHASE AGREEMENT
March 15, 2005
City of Fayetteville
City Administration Building
113 West Mountain
Fayetteville, Arkansas 72701
$3,725,000
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. I Project)
Series 2005
Ladies and Gentlemen:
On the basis of the representations, warranties and agreements and upon the terms and
conditions contained herein, the undersigned, Crews & Associates, Inc. (the "Underwriter"),
hereby offers to enter into this Bond Purchase Agreement (this "Bond Purchase Agreement")
with the City of Fayetteville, Arkansas (the "City") which, upon your acceptance of this offer,
will be binding upon you and upon the Underwriter. Terms not otherwise defined herein shall
have the same meanings as set forth in the Indenture defined and described below.
This offer is made subject to your acceptance of this Bond Purchase Agreement on or
before midnight on March 15, 2005.
1 . General. Upon the terms and conditions and in reliance upon the City's
representations, warranties and covenants herein, the Underwriter hereby agrees to purchase
from the City, and the City hereby agrees to sell to the Underwriter, all (but not less than all) of
$3,725,000 City of Fayetteville, Arkansas Tax Increment Interest Accretion Bonds (Highway 71
East Square Redevelopment District No. 1 Project), Series 2005 (the "Bonds"), at the purchase
price (the "Purchase Price") of $3,576,000.00 (equal to the par amount of the Bonds less
underwriter' s discount of $ 149,000.00).
The Bonds shall be issued by the City pursuant to the provisions of the Constitution and
laws of the State of Arkansas, including, particularly, Amendment 78 to the Constitution and
Arkansas Code Annotated (2003 Supp.) §§ 14- 168-301 et seq. (the "Act").
The Bonds will constitute special and limited obligations of the City, secured solely by
and payable solely from ( 1 ) a pledge of and lien on the receipts from the Tax Increment (as
defined below) of the City's Highway 71 East Square Redevelopment District No. 1 (the
"District") authorized under the Act, and (2) moneys on deposit in the Revenue Fund, Bond
Fund, Project Fund and Redemption Fund established by a Trust Indenture to be dated as of
April 15, 2005 (the "Indenture"), by and between the City and The Bank of Fayetteville,
Fayetteville, Arkansas, as trustee (the "Trustee"), all as more particularly described in the
10-106556.1
0 0
Indenture. The Tax Increment has the meaning set forth in the Act and is determined by
multiplying the incremental increase in value of the real property within the District following its
creation by the maximum applicable ad valorem rate permitted pursuant to the Act.
The Bonds shall be issued and secured pursuant to Ordinance No. 4684 of the City
Council of the City which was adopted on March 15, 2005 (the "Authorizing Ordinance"), and
pursuant to the Indenture. The Bonds shall be issued in $5,000 denominations and integral
multiples of $5,000 in excess thereof, shall mature on August 1 , 2029 and shall bear interest at
the rate of 6.50% per annum. Interest on the Bonds will accrete, compounded semiannually, as
shown on Exhibit A hereto. The Bonds shall be subject to redemption as set forth in the
Indenture and in the Official Statement (hereinafter defined).
The proceeds of the Bonds will be utilized (i) to pay the costs of the 2005 Project (as
defined in the Indenture), and (ii) to pay the costs of issuance of the Bonds.
The City will undertake, pursuant to a Continuing Disclosure Agreement to be dated as of
the date of delivery of the Bonds (the "Continuing Disclosure Agreement"), to provide certain
annual financial and operating information and notices of the occurrence of certain events, if
material, as required by Section (b)(5)(i) of Rule 15c2-12 under the Securities Exchange Act of
1934, as amended (the "Rule"). A description of this undertaking is set forth in the Preliminary
Official Statement and will also be set forth in the Official Statement (each hereinafter defined).
The City is not in default with respect to any of its obligations under previous undertakings
pursuant to the Rule.
In order to ensure compliance with the provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), the City will enter into a Tax Regulatory Agreement dated as _of the
date of delivery of the Bonds (the "Tax Regulatory Agreement').
2. Bona Fide Public Offering. The Underwriter agrees to make a bona fide public
offering of all of the Bonds at the offering prices set forth on the cover of the final Official
Statement described below.
3 . Delivery of Official Statement. (a) The City has previously provided the
Underwriter with copies of its Preliminary Official Statement, including the cover page
and the appendices thereto, dated March 11 , 2005, relating to the Bonds (the "Preliminary
Official Statement'). As of its date, the Preliminary Official Statement is "deemed final"
by the City for purposes of SEC Rule 15c2- 12(b)( 1 ). The Preliminary Official Statement,
as amended to conform to the terms of this Bond Purchase Agreement, including
Exhibit A hereto, and with such other changes and amendments as are mutually agreed to
by the City and the Underwriter, is herein referred to as the "Official Statement."
(b) The City agrees to deliver to the Underwriter, at such address as the
Underwriter shall specify, as many copies of the final Official Statement dated March 15,
2005, relating to the Bonds as the Underwriter shall reasonably request as necessary to
comply with paragraph (b)(4) of the Rule (as defined above) and with Rule G-32 and all
other applicable rules of the Municipal Securities Rulemaking Board. The City agrees to
2
10-106556. 1
0 0
deliver such final Official Statement within seven (7) business days after the execution
hereof.
(c) The City hereby authorizes and approves the Preliminary Official
Statement and the final Official Statement, consents to their distribution and use by the
Underwriter and authorizes the execution of the final Official Statement by a duly
authorized officer of the City.
(d) The Underwriter shall give notice to the City on the date after which no
participating underwriter, as such term is defined in the Rule, remains obligated to deliver
final Official Statements pursuant to paragraph (b)(4) of the Rule.
4. City's Representation and Warranties. The City represents and warrants to the
Underwriter that:
(a) The City is a duly organized and existing political subdivision under the
Constitution and laws of the State of Arkansas (the "State"). The City is authorized by
the provisions of the Act to issue the Bonds for the purpose of financing the 2005 Project.
(b) The City has the full legal right, power and authority (i) to adopt
Ordinance Nos. 4608 and 4662 creating the District (collectively, the "Creation
Ordinances"), (ii) to adopt Ordinance Nos. 4646, 4663 and 4683 approving the project
plan for the District (collectively, the "Project Plan Ordinances"), (iii) to adopt the
Authorizing Ordinance authorizing the issuance of and sale of the Bonds, (iv) to enter
into this Bond Purchase Agreement, the Indenture, the Continuing Disclosure Agreement
and the Tax Regulatory Agreement, (v) to issue, sell and deliver the Bonds to the
Underwriter as provided herein, (vi) to pledge irrevocably the receipts of the Tax
Increment to the payment of the principal of, premium, if any, and interest on the Bonds,
and (vii) to carry out and consummate all other transactions contemplated by each of the
aforesaid documents, and the City has complied with all provisions of applicable law,
including the Act, in all matters relating to such transactions.
(c) The City has duly authorized (i) the execution and delivery of the Bonds
and the execution, delivery and due performance of this Bond Purchase Agreement, the
Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement,
(ii) the distribution and use of the Preliminary Official Statement and the execution,
delivery and distribution of the final Official Statement, and (iii) the taking of any and all
such actions as may be required on the part of the City to carry out, give effect to and
consummate the transactions contemplated by such instruments. All consents or
approvals necessary to be obtained by the City in connection with the foregoing have
been received, and the consents or approvals so received remain still in full force and
effect.
(d) The Creating Ordinances, the Project Plan Ordinances and the Authorizing
Ordinance have been duly adopted by City Council of the City, are each in full force and
effect and each constitutes the legal, valid and binding act of the City; and this Bond
Purchase Agreement, the Indenture, the Continuing Disclosure Agreement and the Tax
3
10-106556.1
0 0
Regulatory Agreement, when executed and delivered, will constitute legal, valid and
binding obligations of the City, and this Bond Purchase Agreement, the Indenture, the
Continuing Disclosure Agreement and the Tax Regulatory Agreement are enforceable
against the City in accordance with their respective terms, except as enforceability
thereof may be limited by bankruptcy, insolvency or other laws affecting creditors' rights
generally.
(e) When delivered to or at the direction of the Underwriter, the Bonds will
have been duly authorized, executed, authenticated, issued and delivered and will
constitute legal, valid and binding obligations of the City in conformity with the laws of
the State of Arkansas, including the Act, and will be entitled to the benefit and security of
the Authorizing Ordinance and the Indenture.
(f) The City has duly approved and authorized the distribution and use of the
Preliminary Official Statement and the execution, delivery and distribution of the Official
Statement.
(g) The information contained in the Preliminary Official Statement is, and as
of the Closing Date such information in the final Official Statement will be, true and
correct in all material respects, and the Preliminary Official Statement does not and the
final Official Statement will not contain any untrue or misleading statement of a material
fact or omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(h) If, at any time prior to the earlier of (i) receipt of notice from the
Underwriter pursuant to Section 3(d) hereof that Official Statements are no longer
required to be delivered under the Rule or (ii) 25 days after the Closing Date, any event
occurs as a result of which the Official Statement, as then amended or supplemented,
might include an untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading, the City shall promptly notify the Underwriter in writing of
such event. Any information supplied by the City for inclusion in any amendments or
supplements to the Official Statement will not contain any untrue or misleading statement
of a material fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
Upon the request of the Underwriter therefor, the City shall prepare and deliver to the
Underwriter, at the City's expense, as many copies of an amendment or supplement to the
Official Statement which will correct any untrue statement or omission therein as the
Underwriter may reasonably request.
(i) Neither the adoption of the Authorizing Ordinance, the Creating
Ordinances or the Project Plan Ordinances, the execution and delivery of this Bond
Purchase Agreement, the Bonds, the Indenture, the Continuing Disclosure Agreement or
the Tax Regulatory Agreement, nor the consummation of the transactions contemplated
herein or therein or the compliance with the provisions hereof or thereof will conflict
with, or constitute on the part of the City a violation of, or a breach of or default under, (i)
any statute, indenture, mortgage, commitment, note or other agreement or instrument to
4
10-106556. 1
• •
which the City is a party or by which it is bound, (ii) any provision of the Constitution of
the State of Arkansas, or (iii) any existing law, rule, regulation, ordinance, judgment,
order or decree to which the City (or the members of its City Council or any of its
officers in their respective capacities as such) is subject. All consents, approvals,
authorizations and orders of governmental or regulatory authorities, if any, which are
required for the City's execution and delivery of, consummation of the transactions
contemplated by, and compliance with the provisions of this Bond Purchase Agreement,
the Authorizing Ordinance, the Creating Ordinances, the Project Plan Ordinances, the
Bonds, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory
Agreement have been obtained.
0) Except as is specifically disclosed in the Official Statement, there is no
action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, pending or, to the best knowledge of the City, threatened,
which in any way questions the powers of the City referred to in subparagraph 4(b)
above, or the validity of any proceeding taken by the City in connection with the issuance
of the Bonds or the pledge of the Tax Increment, or wherein an unfavorable decision,
ruling or finding could materially adversely affect the transactions contemplated by this
Bond Purchase Agreement, or of any other document or instrument required or
contemplated by the Bond financing, or which, in any way, could adversely affect the
validity or enforceability of the Authorizing Ordinance, the Creating Ordinances, the
Project Plan Ordinances, the Bonds, the Indenture, the Continuing Disclosure Agreement,
the Tax Regulatory Agreement or this Bond Purchase Agreement or, to the knowledge of
the City, which in any way questions the exclusion from gross income of the recipients
thereof of the interest on the Bonds for federal income tax purposes or in any other way
questions the status of the Bonds under federal or State of Arkansas tax laws or
regulations.
(k) Any certificate signed by any official of the City and delivered to the
Underwriter shall be deemed a representation and warranty by the City to the
Underwriter as to the truth of the statements therein contained.
(1) The City has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is a bond issuer whose arbitrage
certifications may not be relied upon.
(m) The City will not knowingly take or omit to take any action, which action
or omission will in any way cause the proceeds from the sale of the Bonds to be applied
in a manner other than as provided in the Indenture, or which would cause the interest on
the Bonds to be includable in gross income for federal income tax purposes.
5
10-106556.1
r •
5 . City's Covenants. The City covenants with the Underwriter as follows:
(a) The City will cooperate with the Underwriter in qualifying the Bonds for
offer and sale under the securities or Blue Sky laws of such jurisdictions of the
United States as the Underwriter may request; provided, however, that the City shall not
be required to consent to suit or to service of process in any jurisdiction. The City
consents to the use by the Underwriter in the course of its compliance with the securities
or Blue Sky laws of the various jurisdictions of the documents relating to the Bonds,
subject to the right of the City to withdraw such consent for cause by written notice to the
Underwriter.
(b) Prior to the earlier of (i) receipt of notice from the Underwriter pursuant to
Section 3(d) hereof that final Official Statements are no longer required under the Rule or
(ii) 25 days after the Closing Date, the City shall provide the Underwriter with such
information regarding the City, Tax Increment receipts, and the current financial
condition and valuation of property within the District, all as the Underwriter may
reasonably request.
6. Closing. At 10:00 a.m. Little Rock time on April 19, 2005, or at such other time
and/or date as shall have been mutually agreed upon by the City and the Underwriter (the
"Closing Date"), the City will deliver the Bonds, or cause the Bonds to be delivered, to or at the
direction of the Underwriter, said Bonds to be in definitive form duly executed by the City and
authenticated by The Bank of Fayetteville, Fayetteville, Arkansas, as trustee (the "Trustee"),
together with the other documents hereinafter mentioned; and the Underwriter will accept such
delivery and pay the Purchase Price of the Bonds by making a wire transfer of federal funds
payable to the order of the Trustee for the account of the City.
The Bonds shall be delivered to The Depository Trust Company in New York,
New York, and the activities relating to the final execution and delivery of the Authorizing
Ordinance, the Creating Ordinances, the Project Plan Ordinances, the Indenture, the Continuing
Disclosure Agreement and the Tax Regulatory Agreement and the other documents related to the
Bonds and the payment for the Bonds and the delivery of the certificates, opinions and other
instruments as described in Section 8 of this Bond Purchase Agreement shall occur in the offices
of Kutak Rock LLP, 425 West Capitol Avenue, Suite 1100, Little Rock, Arkansas ("Bond
Counsel") or at such other place as shall have been mutually agreed upon between the City and
the Underwriter. The payment for the Bonds and simultaneous delivery of the Bonds to or at the
direction of the Underwriter is herein referred to as the "Closing."
7. Underwriter's Right to Cancel. The Underwriter shall have the right to cancel
its obligation to purchase the Bonds hereunder by notifying the City in writing or by telegram of
its election to do so between the date hereof and the Closing, if at any time hereafter and prior to
the Closing:
(i) the House of Representatives or the Senate of the Congress of the
United States, or a committee of either, shall have pending before it, or shall have passed or
recommended favorably, legislation introduced previous to the date hereof, which
legislation, if enacted in its form as introduced or as amended, would have the purpose or
6
10-106556.1
0 9
effect of imposing federal income taxation upon revenues or other income of the general
character to be derived by the City or by any similar body under the Authorizing Ordinance
or the Indenture or similar documents or upon interest received on obligations of the general
character of the Bonds or the Bonds, or of causing interest on obligations of the general
character of the Bonds, or the Bonds, to be includable in gross income for purposes of
federal income taxation, and such legislation, in the Underwriter's opinion, materially
adversely affects the market price of the Bonds; or
(ii) a tentative decision with respect to legislation shall be reached by a
committee of the House of Representatives or the Senate of the Congress of the
United States, or legislation shall be favorably reported or rereported by such a committee or
be introduced, by amendment or otherwise, in or be passed by the House of Representatives
or the Senate, or recommended to the Congress of the United States for passage by the
President of the United States, or be enacted or a decision by a federal court of the
United States or the United States Tax Court shall have been rendered, or a ruling, release,
order, regulation or official statement by or on behalf of the United States Treasury
Department, the Internal Revenue Service or other governmental agency shall have been
made or proposed to be made having the purpose or effect, or any other action or event shall
have occurred which has the purpose or effect, directly or indirectly, of adversely affecting
the federal income tax consequences of owning the Bonds or of any of the transactions
contemplated in connection herewith, including causing interest on the Bonds to be included
in gross income for purposes of federal income taxation, or imposing federal income
taxation upon revenues or other income of the general character to be derived by the City or
by any similar body under the Authorizing Ordinance or the Indenture or similar documents
or upon interest received on obligations of the general character of the Bonds, or the Bonds
which, in the opinion of the Underwriter, materially adversely affects the market price of or
market for the Bonds; or
(iii) legislation shall have been enacted, or actively considered for enactment
with an effective date prior to the Closing, or a decision by a court of the United States shall
have been rendered, the effect of which is that the Bonds, including any underlying
obligations, or the Indenture, as the case may be, is not exempt from the registration,
qualification or other requirements of the Securities Exchange Act of 1933, as amended and
as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or
the Trust Indenture Act of 1939, as amended and as then in effect; or
(iv) a stop order, ruling, regulation or official statement by the Securities and
Exchange Commission or any other governmental agency having jurisdiction of the subject
matter shall have been issued or made or any other event occurs, the effect of which is that
the issuance, offering or sale of the Bonds, including any underlying obligations, or the
execution and delivery of the Indenture as contemplated hereby or by the Official Statement,
is or would be in violation of any provision of the federal securities laws, including the
Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of
1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and
as then in effect; or
7
10-106556.1
(v) any event shall have occurred or any information shall have become known
to the Underwriter which causes the Underwriter to reasonably believe that the Official
Statement as then amended or supplemented includes an untrue statement of a material fact,
or omits to state any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or
(vi) there shall have occurred any outbreak of hostilities or any national or
international calamity or crisis, including a financial crisis, the effect of which on the
financial markets of the United States is such as, in the reasonable judgment of the
Underwriter, would materially adversely affect the market for or market price of the Bonds;
or
(vii) there shall be in force a general suspension of trading on the New York
Stock Exchange, the effect of which on the financial markets of the United States is such as,
in the reasonable judgment of the Underwriter, would materially adversely affect the market
for or market price of the Bonds; or
(viii) a general banking moratorium shall have been declared by federal,
New York or State authorities; or
(ix) any proceeding shall be pending or threatened by the Securities and
Exchange Commission against the City; or
(x) additional material restrictions not in force as of the date hereof shall have
been imposed upon trading in securities generally by any governmental authority or by any
national securities exchange; or
(xi) there shall have been legislation enacted by the General Assembly of the
State of Arkansas or there shall have been a decision rendered by a court of competent
jurisdiction in the State of Arkansas that has, in the reasonable judgment of the Underwriter,
the effect of reducing the amount of the Tax Increment available to secure the Bonds; or
(xii) the New York Stock Exchange or other national securities exchange, or any
governmental authority, shall impose, as to the Bonds or obligations of the general character
of the Bonds, any material restrictions not now in force, or increase materially those now in
force, with respect to the extension of credit by, or the charge to the net capital requirements
of the Underwriter.
8. Conditions to Underwriter's Obligations. The obligation of the Underwriter to
purchase the Bonds shall be subject (a) to the performance by the City of its obligations to be
performed hereunder at and prior to the Closing, (b) to the accuracy of the representations and
warranties of the City herein as of the date hereof and as of the time of the Closing, and (c) to the
following conditions, including the delivery by the City of such documents as are enumerated
herein in form and substance satisfactory to the Underwriter:
(a) The Bonds shall have
been duly
authorized,
executed and delivered in
the
forms approved by the City in the
Indenture
with only
such changes therein as
the
I[oiULZiixl
Underwriter and the City shall mutually agree upon, which shall in all instances be as
described in the final Official Statement;
(b) At the time of Closing, (i) the Official Statement, this Bond Purchase
Agreement, the Indenture, the Authorizing Ordinance, the Creating Ordinances, the
Project Plan Ordinances, the Continuing Disclosure Agreement and the Tax Regulatory
Agreement shall be in full force and effect and shall not have been amended, modified or
supplemented from the date hereof, except as may have been agreed to in writing by the
Underwriter, (ii) the proceeds of the sale of the Bonds and other funds shall be deposited
and applied as described in the Indenture, (iii) no default or event of default under the
Indenture shall have occurred and be continuing, and (iv) no material adverse change
affecting the City or the Tax Increment shall have occurred, nor shall any development
involving a prospective and material adverse change in, or affecting the business,
financial condition, results of operations, prospects or properties of the District or the
City have occurred;
(c) Receipt of fully executed originals of the Indenture, the Continuing
Disclosure Agreement and the Tax Regulatory Agreement at or prior to the Closing;
(d) At or prior to the Closing, the Underwriter shall receive the following
documents in such number of counterparts as shall be mutually agreeable to the
Underwriter and Bond Counsel:
(1) A final approving opinion of Bond Counsel, dated the Closing
Date, in substantially the form set forth in Exhibit B hereto;
(2) A supplemental opinion of Bond Counsel, addressed to the City,
the Trustee and the Underwriter and dated the Closing Date, in substantially the
form set forth in Exhibit C hereto;
(3) The Official Statement executed by a duly authorized officer of the
City;
(4) Certified copies of the Authorizing Ordinance, the Creating
Ordinances and the Project Plan Ordinances and all other ordinances and
resolutions of the City relating to the Bonds;
(5) Photocopies of the Bonds as executed and delivered;
(6) A certificate, in form and substance satisfactory to the
Underwriter, of any duly authorized officer or official of the City satisfactory to
the Underwriter, dated as of the Closing Date, to the effect that: (i) each of the
City's representations, warranties and covenants contained herein are true and
correct as of the Closing Date; (ii) the City has duly adopted the Authorizing
Ordinance, the Creating Ordinances and the Project Plan Ordinances by all action
necessary under the Act and the laws and Constitution of the State of Arkansas,
including Amendment 78, and has duly authorized the execution, delivery and
due performance of the Bonds, the Indenture, the Continuing Disclosure
9
10-106556.1
Agreement, the Tax Regulatory Agreement, the Official Statement and this Bond
Purchase Agreement; (iii) no litigation is pending, or to the knowledge of the
officer or official of the City signing the certificate after due investigation and
inquiry, threatened, to restrain or enjoin the issuance or sale of the Bonds or in
any way affecting any authority for or the validity of the Bonds, the Tax
Increment, the Official Statement, the Authorizing Ordinance, the Creating
Ordinances, the Project Plan Ordinances, the Indenture, the Continuing Disclosure
Agreement, the Tax Regulatory Agreement, or this Bond Purchase Agreement;
(iv) the Bonds, the Indenture, this Bond Purchase Agreement, the Continuing
Disclosure Agreement and the Tax Regulatory Agreement, as executed and
delivered by the City, are in the form or in substantially the form approved for
such execution by appropriate proceedings of the City; (v) none of the
Authorizing Ordinance, the Creating Ordinances nor the Project Plan Ordinances
have been amended, modified or repealed as of the Closing Date, and the
Authorizing Ordinance, the Creating Ordinances and the Project Plan Ordinances
remain in full force and effect; (vi) none of the proceedings of the City taken
preliminary to the issuance of the Bonds, as certified in such certificate, have been
in any manner repealed, amended or changed; (vii) the City has complied in all
respects with the provisions of the Act and has full legal right, power and
authority to issue the Bonds for the purposes stated in the Act and to enter into
this Bond Purchase Agreement, to adopt the Authorizing Ordinance, the Creating
Ordinances and the Project Plan Ordinances, to issue, sell and deliver the Bonds
as provided in this Bond Purchase Agreement, and to carry out and consummate
all other transactions contemplated by this Bond Purchase Agreement, the
Authorizing Ordinance, the Creating Ordinances, the Project Plan Ordinances, the
Indenture, the Continuing Disclosure Agreement and the Tax Regulatory
Agreement; (viii) neither the Official Statement nor any amendment or
supplement thereto contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading; and (ix) to the best knowledge of the officer or official of the City
signing the certificate, no event affecting the City or the Tax Increment has
occurred since the date of the Official Statement which should be disclosed in the
Official Statement for the purposes for which it is used that is necessary to
disclose therein in order to make the statements and information therein not
misleading in any respect;
(7) An opinion of Kit Williams, Esq., City Attorney, dated the Closing
Date and addressed to the Underwriter, Bond Counsel and the Trustee, to the
effect that (i) the City is a duly organized and validly existing political
subdivision and city of the first class, organized under the laws of the State of
Arkansas, with full power and authority to adopt the Authorizing Ordinance, the
Creating Ordinances and the Project Plan Ordinances, to execute and deliver the
Bonds, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory
Agreement and this Bond Purchase Agreement; (ii) the City has duly approved
the Preliminary Official Statement and the Official Statement; (iii) the
Authorizing Ordinance, the Creating Ordinances and the Project Plan Ordinances
10
10-106556.1
have been duly adopted by the City by all action necessary under the Act and the
laws and Constitution of the State of Arkansas, and remain in full force and
effect; (iv) the Indenture, the Continuing Disclosure Agreement, the Tax
Regulatory Agreement and this Bond Purchase Agreement have been duly
authorized, approved, executed and delivered by the City and, subject to the
extent that the enforceability of the rights and remedies set forth therein may be
limited by bankruptcy, insolvency or other laws affecting creditors' rights
generally, constitute valid and binding agreements of the City enforceable in
accordance with their terms; (v) the information in the Official Statement under
the captions "THE PROJECT," "THE CITY AND THE DISTRICT" and
"LEGAL MATTERS" (apart from financial or statistical data contained or
incorporated therein, as to which no view need be expressed) is fair, accurate and
complete and does not omit any matter which, in such counsel's opinion, for the
purposes for which the Official Statement is to be used, should be included or
referred to therein; (vi) excepting those matters discussed in the Official
Statement, there is no action, suit or proceeding at law or in equity before or by
any court, public board or body, pending or threatened, against or affecting the
City, challenging the validity of the transactions contemplated by the Official
Statement or the validity of the Bonds, the Tax Increment, the Authorizing
Ordinance, the Creating Ordinances, the Project Plan Ordinances, the Indenture,
the Continuing Disclosure Agreement, the Tax Regulatory Agreement or this
Bond Purchase Agreement and, to the best of such counsel's knowledge, there is
no investigation, pending or threatened, and no threatened action, suit or
proceeding involving any of the matters hereinabove mentioned in this clause
(vi); (vii) the execution and delivery of the Authorizing Ordinance, the Creating
Ordinances, the Project Plan Ordinances, the Indenture, the Continuing Disclosure
Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement,
and compliance with the provisions hereof and thereof, under the circumstances
contemplated hereby and thereby, do not and will not in any material respect
conflict with or constitute on the part of the City a breach of or default under any
agreement or other instrument to which the City is a party or any existing law,
regulation, court order or consent decree to which the City is subject; and
(viii) based upon the examinations which such counsel has made as counsel to the
City, which shall be specified, nothing has come to such counsel's attention which
would lead such counsel to believe that the Official Statement (except for the
financial statements and other financial data included in the Official Statement, as
to which no view need be expressed) contains an untrue statement of a material
fact or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;
(8) Evidence that Federal Form 8038-G has been executed by the City
and is ready for filing with the Internal Revenue Service.
(9) Evidence that, except as disclosed in the Official Statement, all
necessary approvals, whether legal or administrative, have been obtained from
applicable federal, state and local entities and agencies; and
11
10-106556.1
(10) Such additional legal opinions, certificates, proceedings,
instruments and other documents as the Underwriter and Bond Counsel may
reasonably request to evidence compliance by the City with legal requirements,
the truth and accuracy, as of the time of Closing, of the representations of the City
herein contained and the due performance or satisfaction by the City at or prior to
such time of all agreements then to be performed and all conditions then to be
satisfied.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriter
contained in this Bond Purchase Agreement, or if the obligation of the Underwriter to purchase
and accept delivery of the Bonds shall be terminated for any reason permitted by this Bond
Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter
nor the City shall be under further obligation hereunder; except that the respective obligations to
pay expenses, as provided in Section 12 hereof, shall continue in full force and effect.
9.
Conditions
to
Obligations of the City. The obligations of the City hereunder are
subject to
the performance
by
the Underwriter of its obligations hereunder.
10. Survival. All representations, warranties and agreements of the City shall remain
operative and in full force and effect, regardless of any investigations made by or on behalf of
the Underwriter, and shall survive the Closing. The obligations of the City under Sections 11 or
12 hereof shall survive any termination of this Bond Purchase Agreement by the Underwriter
pursuant to the terms hereof.
11. Indemnification. The City, to the extent permitted by law, agrees to indemnify
and hold harmless the Underwriter, each member, officer, director, partner or employee of the
Underwriter and each person who controls the Underwriter within the meaning of Section 15 of
the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as
amended (collectively called the "Indemnified Parties"), against any and all losses, claims,
damages, liabilities or expenses (including any legal or other expenses incurred by an
Indemnified Party in connection with investigating any claims against an Indemnified Party and
defending any actions) whatsoever caused by any untrue statement or misleading statement or
alleged untrue statement or alleged misleading statement of a material fact contained in the
Official Statement or caused by any omission or alleged omission from the Official Statement of
any material fact required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading insofar as
such losses, claims, damages, liabilities or expenses are caused by any such untrue or misleading
statement or omission or alleged untrue or misleading statement or omission in the information
contained in the Official Statement; provided, however, that the City shall not be liable to an
Indemnified Party in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any of such documents in reliance upon and in conformity
with written information furnished to the City by the Underwriter specifically for use therein.
No Indemnified Parties shall be indemnified hereunder for any losses, claims, damages or
liabilities resulting from the negligence of such Indemnified Parties.
12
10-106556.1
12. Payment of Expenses. The City will pay or cause to be paid all reasonable
expenses incident to the performance of its obligations under this Bond Purchase Agreement,
including, but not limited to, expenses of mailing or delivery of the Bonds, costs of printing the
Bonds, the Preliminary and final Official Statements, any amendment or supplement to the
Preliminary or final Official Statement and this Bond Purchase Agreement, fees and
disbursements of Bond Counsel, any fees charged by investment rating agencies for the rating of
the Bonds, bond insurance premiums, if any, fees of the Trustee and any paying agent fees, and
any fees and disbursements in connection with the qualification of the Bonds for sale under the
securities or "Blue Sky" laws of the various jurisdictions and the preparation of "Blue Sky"
memoranda. In the event this Bond Purchase Agreement shall terminate because of the default
of the Underwriter, the City will, nevertheless, pay, or cause to be paid, all of the expenses
specified above. The Underwriter shall pay all advertising expenses in connection with the
public offering of the Bonds, and all other expenses incurred by it in connection with the public
offering and distribution of the Bonds, including the fees and expenses of any counsel retained
by the Underwriter. If the City defaults under this Bond Purchase Agreement, the Underwriter
may bring whatever legal action it may have against the City to recover damages, if any, incurred
by the Underwriter.
13. Notices. Any notice or other communication to be given to the City under this
Bond Purchase Agreement may be given by delivering the same in writing to the Mayor at the
address set forth above, and any notice or other communication to be given to the Underwriter
under this Bond Purchase Agreement may be given by delivering the same in writing to Crews &
Associates, Inc., First Security Center, 521 President Clinton Avenue, Suite 800, Little Rock, AR
72201, Attention: Mr. Robert Wright.
14. Nonassignability. This Bond Purchase Agreement is made solely for the benefit
of the City and the Underwriter (including any successor or assign of the Underwriter), and no
other person, including any purchaser of the Bonds, shall acquire or have any right hereunder or
by virtue hereof
15. Applicable Law. This Bond Purchase Agreement shall be governed by and
construed in accordance with the laws of the State of Arkansas.
13
10-106556.1
16. Counterparts. This Bond Purchase Agreement shall become effective upon your
acceptance hereof and may be executed in counterparts, each of which shall be regarded as an
original and all of which shall constitute one and the same document.
Very truly yours,
Accepted and agreed to as of 9:00 p.m.
on the date first above written:
CITY OF FAYETTEVILLL, ARKANSAS
By:
Title:
14
10-106556.1
C1
ACCRETION SCHEDULE
Date Accreted Value of a $5.000
Bond
4-19-05
$ 5,000.00
8-1-05
5,092.08
2-1-06
5,257.58
8-1-06
5,428.45
2-1-07
5,604.87
8-1-07
5,787.03
2-1-08
5,975.11
8-1-08
6,169.30
2-1-09
6,369.80
8-1-09
6,576.82
2-1-10
6,790.57
8-1-10
7,011.26
2-1-11
7,239.13
8-1-11
7,474.40
2-1-12
7,717.32
8-1-12
7,968.13
2-1-13
8,227.09
8-1-13
8,494.47
2-1-14
8,770.54
8-1-14
9,055.59
2-1-15
9,349.89
8-1-15
9,653.76
2-1-16
9,967.51
8-1-16
10,291.46
2-1-17
10,625.93
8-1-17
10,971.27
2-1-18
11, 327.84
8-1-18
11,695.99
2-1-19
12,076.11
8-1-19
12,468.59
2-1-20
12,873.81
8-1-20
13,292.21
2-1-21
13,724.21
8-1-21
14,170.25
2-1-22
14,630.78
8-1-22
15,106.28
2-1-23
15, 597.23
8-1-23
16,104.15
2-1-24
16,627.33
10-106556.1 A-1
Date Accreted Value of a $5,000
Bond
8-1-24
17,167.92
2-1-25
17,725.88
8-1-25
18, 301.97
2-1-26
18,896.79
8-1-26
19,510.93
2-1-27
20,145.04
8-1-27
20,799.75
2-1-28
21,475.74
8-1-28
22,173.71
2-1-29
22,894.35
8-1-29
23,638.42
10-106556.1 A-2
EXHIBIT B
PROPOSED FORM OF BOND COUNSEL APPROVING OPINION
Upon delivery of the Bonds in definitive form, Kutak Rock LLP, Little Rock, Arkansas,
proposes to deliver its approving opinion in substantially the following form:
April _, 2005
City of Fayetteville, Arkansas
Fayetteville, Arkansas
The Bank of Fayetteville, as Trustee
Fayetteville, Arkansas
Crews & Associates, Inc.
Little Rock, Arkansas
$3,725,000
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. 1 Project)
Series 2005
Ladies and Gentlemen:
We have acted as bond counsel in connection with the issuance and sale by the City of
Fayetteville, Arkansas (the "City"), a political subdivision of the State of Arkansas, of its
$3,725,000 Tax Increment Interest Accretion Bonds (Highway 71 East Square Redevelopment
District No. 1 Project), Series 2005 (the "Bonds").
The Bonds are being issued pursuant to the provisions of the Constitution and laws of the
State of Arkansas, including, particularly, Amendment 78 and Arkansas Code Annotated (Supp.
2003) §§14-168-301 et seq. (as from time to time amended, the "Act"), pursuant to Ordinance
No. 4684 of the City, duly adopted and approved on March 15, 2005 (the "Authorizing
Ordinance"), and pursuant to a Trust Indenture dated as of April 15, 2005 (the "Indenture"), by
and between the City and The Bank of Fayetteville, as trustee (the "Trustee"). Reference is
hereby made to the Indenture and to all indentures supplemental thereto for the provisions,
among others, with respect to the conditions for the issuance of parity debt by the City, the
nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the
Trustee and the Holders of the Bonds, and the terms upon which the Bonds are issued and
secured.
Reference
is made
to an opinion
of
even date herewith of Kit Williams, Esq., City
Attorney, a copy
of which
is on file with
the
Trustee, with respect, among other matters, to the
10-106556.1 B-1
•
status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance
and to enter into and perform its obligations under the Indenture, the valid adoption of the
Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the
City, and with respect to the Indenture being enforceable upon the City.
We have examined the law and such certified proceedings and other papers as we have
deemed necessary to render this opinion. As to questions of fact material to our opinion, we
have relied upon the representations of the City contained in the Authorizing Ordinance and the
Indenture and in the certified proceedings and other certifications of public officials furnished to
us, without undertaking to verify the same by independent investigation.
Based upon the foregoing, we are of the opinion, under existing law, as follows:
1. The City is duly created and validly existing as a municipal corporation of the
State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including,
particularly, Amendment 78 and the Act, the City is empowered to adopt the Authorizing
Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained
therein, and to issue the Bonds.
2. The Authorizing Ordinance has been duly adopted by the City and constitutes a
valid and binding obligation of the City enforceable upon the City in accordance with its terms.
3. The Indenture has been duly authorized, executed and delivered by the City and is
a valid and binding obligation of the City enforceable upon the City in accordance with its terms.
4. The Bonds have been validly authorized, executed, issued and delivered by the
City and represent valid and binding special obligations of the City. The principal, premium, if
any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and
pledge by the City to the Trustee of, the receipts of the Tax Increment (as defined in the
Indenture).
5. The Tax Increment receipts have been duly and validly assigned and pledged to
the Trustee under the Indenture.
6. Interest on the Bonds is excluded from gross income for federal income tax
purposes and is not a specific preference item for purposes of the federal alternative minimum
tax. The opinion described in the preceding sentence assumes the accuracy of certain
representations and compliance by the City with covenants designed to satisfy the requirements
of the Internal Revenue Code of 1986, as amended, that must be met subsequent to the issuance
of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be
included in gross income for federal income tax purposes retroactive to the date of issuance of
the Bonds. The City has covenanted to comply with such requirements.
7. The interest on the Bonds is exempt from all state, county and municipal taxes in
the State of Arkansas.
10-106556.1 B-2
8. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as
amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939,
as amended, in connection with the offer and sale of the Bonds.
It is to be understood that the rights of the registered owners of the Bonds and the
enforceability of the Bonds, the Authorizing Ordinance and the Indenture may be subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors'
rights heretofore or hereafter enacted to the extent constitutionally applicable and that their
enforcement may also be subject to the exercise of judicial discretion in appropriate cases.
Very truly yours,
10-106556.1 B-3
C
EXHIBIT C
PROPOSED FORM OF BOND COUNSEL SUPPLEMENTAL OPINION
April _, 2005
City of Fayetteville, Arkansas
Fayetteville, Arkansas
The Bank of Fayetteville, as Trustee
Fayetteville, Arkansas
Crews & Associates, Inc.
Little Rock, Arkansas
$3,725,000
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 Eat Square Redevelopment District No. 1 Project)
Series 2005
Ladies and Gentlemen:
This opinion supplements our bond approving opinion, dated the date hereof, relating to
the above -captioned bonds (the "Bonds"). Except as otherwise defined herein, the terms used
herein shall have the meanings prescribed for them in said opinion.
We have examined the law and such certified proceedings and other papers as we have
deemed necessary to render this opinion. As to questions of fact material to our opinion, we
have relied upon the representations of the City contained in the Indenture and in the certified
proceedings and other certifications of public officials furnished to us, without undertaking to
verify the same by independent investigation.
In addition to the documents specifically mentioned in the approving opinion, in
connection with this opinion we have also examined:
(a)
An executed counterpart of the
Bond
Purchase Agreement dated
March 15, 2005 (the "Bond Purchase Agreement"),
by and
between the City and Crews
& Associates,
Inc., as underwriter (the "Underwriter");
(b) An executed counterpart of the Continuing Disclosure Agreement dated
April 19, 2005 (the "Disclosure Agreement"), by and between the City and The Bank of
Fayetteville, as trustee (the "Trustee");
(c) An executed counterpart of the Tax Regulatory Agreement dated April 19,
2005 (the "Tax Regulatory Agreement"), by and between the City and the Trustee; and
10-106556.1 c-1
•
(d) Portions of the Official Statement dated March 15, 2005, with respect to
the Bonds (the "Official Statement"), captioned "INTRODUCTORY STATEMENT,"
"THE SERIES 2005 BONDS," "SECURITY FOR THE BONDS,", "ESTIMATED
SOURCES AND USES OF FUNDS," "DEFINITIONS OF CERTAIN TERMS,"
"SUMMARY OF THE INDENTURE," "SUMMARY OF THE CONTINUING
DISCLOSURE AGREEMENT," "TAX EXEMPTION," and "APPENDIX A — Form of
Opinion of Bond Counsel" (the "Relevant Captions") insofar as they relate to this
opinion.
Based on our examination, we are of the opinion, as of the date hereof and under existing
law, as follows:
I. The Bond Purchase Agreement has been duly authorized, executed and
delivered by the City and, assuming due authorization, execution and delivery by the
Underwriter, the Bond Purchase Agreement constitutes the valid and binding agreement
of the City enforceable in accordance with its terms.
2. The Disclosure Agreement has been duly authorized, executed and
delivered by the City and, assuming due authorization, execution and delivery by the
Trustee, the Disclosure Agreement constitutes the valid and binding agreement of the
City enforceable in accordance with its terms.
3. The Tax Regulatory Agreement has been duly authorized, executed and
delivered by the City and, assuming due authorization, execution and delivery by the
Trustee, the Tax Regulatory Agreement constitutes the valid and binding agreement of
the City enforceable in accordance with its terms.
4. The statements contained in the Official Statement under the Relevant
Captions, insofar as such statements purport to summarize certain provisions of the
Bonds, the Indenture and the Continuing Disclosure Agreement, or conclusions of law
and legal opinions, are true, accurate and correct summaries thereof in all material
respects and do not omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading.
The enforceability of the respective obligations of the parties to the documents and other
items described above, and the availability of certain rights and remedies provided for therein,
may be limited by bankruptcy, receivership, insolvency, reorganization, moratorium, marshalling
or other similar statutes or rules of law affecting creditors' rights and remedies, to general
principles of equity and to the discretion of any court in granting any relief or issuing any order,
whether the proceeding is considered a proceeding at law or equity. In particular, the right to
indemnification under any of the documents or other items described above may be limited by
federal of state securities laws or by the public policy underlying such laws.
This
opinion is being
rendered
to you solely for your use and benefit and may not be
relied upon
in any manner, nor used, by
any other person.
Very truly yours,
10-106556.1 C-2
CI
EonS
CITY OF FAYETTEVILLE, ARKANSAS
to
as Trustee
TRUST INDENTURE
Dated as of April 15, 2005
Providing for:
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. I Project)
Series 2005
KUTAK ROCK LLP
DRAFT 03/09/05
Prepared by:
425 West Capitol Avenue, Suite 1100
Little Rock, Arkansas 72201
10-70831.5
•
C1
TABLE OF CONTENTS
(This Table of Contents is not a part of the Trust
Indenture and is only for convenience of reference.)
Page No.
Parties..............................................................................................................................................
1
Recitals............................................................................................................................................
1
GrantingClauses
.............................................................................................................................
2
ARTICLE I
DEFINITIONS
Section101.
Definitions........................................................................................................4
Section
102.
Use of Words.................................................................................................
10
ARTICLE II
THE BONDS
Section 201. Security for the Bonds................................................................................... 10
Section 202. Authorized Amount....................................................................................... 11
Section 203. Details of Bonds............................................................................................. 11
Section204. Form............................................................................................................... 11
Section205. Payment.......................................................................................................... 12
Section206. Execution....................................................................................................... 12
Section207. Authentication................................................................................................ 12
Section 208. Delivery of the Bonds.................................................................................... 12
Section 209. Mutilated, Destroyed or Lost Bonds.............................................................. 13
Section 210. Registration and Transfer of Bonds............................................................... 14
Section211. Cancellation................................................................................................... 15
Section 212. Additional Bonds........................................................................................... 15
Section 213. Superior Obligations Prohibited.................................................................... 15
Section 214. [RESERVED]................................................................................................ 16
Section 215. Temporary Bonds........................................................................................... 16
ARTICLE III
REDEMPTION OF BONDS BEFORE MATURITY
Section301. Redemption.................................................................................................... 16
Section302. Notice............................................................................................................. 17
Section 303. Selection of Bonds to be Redeemed.............................................................. 17
Section 304. Surrender of Bonds Upon Redemption.......................................................... 17
10-70831.5
i
Section 305.
Section 306.
Section 307.
Section
401.
Section
402.
Section
403.
Section
404.
Section
405.
Section
406.
Section
407.
Section
408.
Section
409.
Section
410.
Redemptionin Part........................................................................................ 17
Payment of Redemption Price....................................................................... 18
Redemption of Additional Bonds.................................................................. 18
ARTICLE IV
GENERAL COVENANTS AND REPRESENTATIONS
Payment of Principal, Premium, if any, and Interest ..................................... 18
Performance of Covenants............................................................................. 18
Instruments of Further Assurance.................................................................. 19
Recordation and Filing...................................................................................19
Inspectionof Books.......................................................................................19
TaxCovenants............................................................................................... 19
Trustee's and Paying Agent's Fees and Expenses ......................................... 19
Completion of Project; Certification of Completion Date ............................. 20
Encumbrances................................................................................................ 20
Continuing Disclosure................................................................................... 20
FUNDS AND DEPOSITS
Section 501. Creation of Funds and Accounts.................................................................... 20
Section 502. Project Fund................................................................................................... 21
Section 503. Revenue Fund................................................................................................ 22
Section504. Bond Fund...................................................................................................... 23
Section 505. Cost of Issuance Fund.................................................................................... 23
Section 506. Redemption Fund........................................................................................... 23
Section 507. Rebate Fund................................................................................................... 24
Section 508. Debt Service Reserve Fund............................................................................ 25
Section 509. Cessation of Fund Deposits........................................................................... 25
Section 510. Separate Accounts Authorized....................................................................... 25
Section 601.
Section 602.
Section 603.
INVESTMENTS
Investment of Moneys.................................................................................... 26
Investment Earnings....................................................................................... 26
Responsibility of Trustee............................................................................... 27
10-70831.5 11
ARTICLE VII
I11I_.Yu C M atutE a 11rn1
Section
701.
Discharge of Lien...........................................................................................
27
Section
702.
Bonds Deemed Paid.......................................................................................27
Section
703.
Non -Presentment of Bonds............................................................................
27
ARTICLE VIII
DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS
Section
801.
Events of Default...........................................................................................
28
Section
802.
Acceleration...................................................................................................
28
Section
803.
Other Remedies; Rights of Bondholders.......................................................
29
Section
804.
Right of Bondholders to Direct Proceedings .................................................
29
Section
805.
Appointment of Receiver...............................................................................
29
Section806.
Waiver............................................................................................................
29
Section
807.
Application of Moneys..................................................................................
30
Section
808.
Remedies Vested in Trustee...........................................................................
31
Section
809.
Rights and Remedies of Bondholders............................................................
31
Section
810.
Termination of Proceedings...........................................................................
32
Section
811.
Waivers of Events of Default
32
.........................................................................
ARTICLE IX
TRUSTEE AND PAYING AGENTS
Section
901.
Acceptance of Trusts......................................................................................
32
Section
902.
Fees, Charges and Expenses of Trustee and Paying Agents; Trustee's
PriorLien.......................................................................................................
34
Section
903.
Additional Duties of Trustee..........................................................................
35
Section
904.
Notice to Bondholders of Default..................................................................
35
Section
905.
Intervention by Trustee..................................................................................
36
Section
906.
Merger or Consolidation of Trustee...............................................................
36
Section
907.
Resignation by Trustee..................................................................................
36
Section
908.
Removal of Trustee........................................................................................
36
Section
909.
Appointment of Successor Trustee................................................................
36
Section
910.
Concerning Any Successor Trustee...............................................................
36
Section
911.
Reliance Upon Instruments............................................................................
37
Section
912.
Appointment of Co-Trustee...........................................................................
37
Section
913.
Designation and Succession of Paying Agents ..............................................
38
10-70831.5 111
ARTICLE X
SUPPLEMENTAL INDENTURES
Section
1001.
Supplemental Indentures
Not Requiring Consent of Bondholders ................
38
Section
1002.
Supplemental Indentures
Requiring Consent of Bondholders .......................
39
Section
1003.
Effect of Supplemental Indentures.................................................................
40
"E R610iif*:il
MISCELLANEOUS
Section 1101.
Section1102.
Section 1103.
Section 1104.
Section 1105.
Section 1106.
Consents, etc. of Bondholders.......................................................................
Notices...........................................................................................................
Limitation of Rights.......................................................................................
Severability....................................................................................................
Applicable Provisions of Law........................................................................
Counterparts...................................................................................................
40
40
41
41
41
41
Section 1107.
Section1108.
Section 1109.
Section 1110.
Successors and Assigns..................................................................................
Captions.........................................................................................................
Photocopies and Reproductions.....................................................................41
Bonds Owned by the City..............................................................................
41
41
42
Exhibit A Form of Series 2005 Bond............................................................................. A-1
Exhibit B Form of Requisition........................................................................................ B-1
Exhibit C Series 2005 Bond Accretion Schedule........................................................... C-1
10-70831.5 iv
TRUST INDENTURE
THIS TRUST INDENTURE is made and entered into as of April 15, 2005, by and
between the CITY OF FAYETTEVILLE, ARKANSAS (the "City"), a city of the first class
organized under and existing by virtue of the laws of the State of Arkansas, and [TRUSTEE
NAME], as trustee (the "Trustee"), a organized under and existing by virtue of
the laws of the and having its principal corporate trust office in
Arkansas;
WITNESSETH:
WHEREAS, the City Council of the City has determined that there is a great need for a
source of revenue to finance the costs of alleviating certain blight and encouraging economic
development within the City and in furtherance of such purposes has created the Highway 71
East Square Redevelopment District No. I (the "District") pursuant to Ordinance No. 4608
adopted on August 17, 2004, as amended by Ordinance No. 4662 adopted on December 28,
2004; and
WHEREAS, the specific actions needed to alleviate such blight and encourage such
development consist of (i) the acquisition of certain real property and the demolition of existing
structures thereon, which property is located within the District and consists of the former
Mountain Inn property and surrounding parcels, and (ii) the construction of certain sidewalk and
crosswalk improvements within the District (the "2005 Project"); and
WHEREAS, following the acquisition and demolition components of the 2005 Project
described above, and upon the satisfaction of certain conditions set forth in that certain 2005
Redevelopment Agreement of even date herewith, the City intends to transfer the cleared real
property to for the purpose of constructing a hotel and meeting facility thereon;
and
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas, including particularly Amendment 78 to the
Constitution of the State of Arkansas ("Amendment 78") and Arkansas Code Annotated (2003
Supp.) Sections 14-168-301 et seq. (as from time to time amended, the "Act"), to issue and sell
its bonds to finance the costs of various capital improvements within the District such as those
comprising the 2005 Project, which bonds are to be secured by and payable from the ad valorem
tax increment described in and authorized by the Act; and
WHEREAS, pursuant to the provisions of Ordinance No. of the City, adopted by
the City Council on [March 15], 2005 (the "Authorizing Ordinance"), and in accordance with the
provisions of Amendment 78 and the Act, the City proposes to issue its Tax Increment Interest
Accretion Bonds (Highway 71 East Square Redevelopment District No. 1 Project), Series 2005
(the "Series 2005 Bonds") in the aggregate principal amount of $ , in order to
provide for the financing of the 2005 Project; and
10-70831.5
• 0
WHEREAS, the City has further determined to enter into this Indenture to authorize the
issuance of and to secure the Series 2005 Bonds by granting to the Trustee a pledge and
assignment of the interests and other rights herein contained, and certain funds and accounts
created hereby; and
WHEREAS, the Series 2005 Bonds are to be dated, bear interest, mature and be subject
to redemption as hereinafter in this Indenture set forth in detail; and
WHEREAS, provision is made in this Indenture for the issuance of Additional Bonds
(hereinafter defined) upon compliance with certain conditions set forth herein; and
WHEREAS, the execution and delivery of this Indenture and the issuance of the Series
2005 Bonds have been in all respects duly and validly confirmed, authorized and approved under
the provisions of the Authorizing Ordinance; and
WHEREAS, all things necessary to make the Series 2005 Bonds, when authenticated by
the Trustee and issued as in this Indenture provided, the valid, binding and legal obligations of
the City according to the import thereof, and to constitute this Indenture a valid pledge of the Tax
Increment (as defined herein) to the payment of the principal of, premium, if any, and interest on
the Series 2005 Bonds, as specified in and in accordance with the provisions hereof, have been
done and performed, and the creation, execution and delivery of this Indenture and the creation,
execution, issuance and delivery of the Series 2005 Bonds, subject to the terms hereof, have in
all respects been duly authorized;
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, THIS
INDENTURE WITNESSETH:
That the City, in consideration of the premises and the acceptance by the Trustee of the
trusts hereby created and of the purchase and acceptance of the Series 2005 Bonds by the
Holders and owners thereof, and the sum of Ten Dollars ($10.00), lawful money of the United
States of America, to it duly paid by the Trustee, at or before the execution and delivery of these
presents, and for other good and valuable consideration, the receipt of which is hereby
acknowledged, and in order to secure the payment of the principal of, premium, if any, and
interest on the Series 2005 Bonds and all Additional Bonds (hereinafter defined), if any,
according to their tenor and effect, and to secure the performance and observance by the City of
all the covenants expressed or implied herein and in the Series 2005 Bonds and Additional
Bonds (collectively, the "Bonds"), does hereby grant, bargain, sell, convey, mortgage, assign,
transfer and pledge unto the Trustee, and unto its successor or successors in trust, and to them
and their assigns forever, for the securing of the performance of the obligations of the City
hereinafter set forth the following:
Subject only to the provisions of this Indenture permitting the application thereof for the
purposes and on the terms and conditions set forth herein, the Tax Increment (as defined herein)
and the Revenue Fund established by this Indenture, which are hereby irrevocably assigned and
pledged to secure all obligations under this Indenture; and
10-70831.5 2
2.
Separately to each series of Bonds issued hereunder, but subject to the provisions of this
Indenture permitting the application thereof for the purposes and on the terms and conditions set
forth herein, the related Accounts of the Bond Fund, the Debt Service Reserve Fund, the Project
Fund and the Redemption Fund established by this Indenture, including the investment earnings
thereon, if any; and
0
Any and all other properties, rights and interests of every kind and nature (including any
proceeds realized upon the sale of the real property acquired with the proceeds of the sale of the
Series 2005 Bonds) from time to time which have been, are hereby, or hereafter are, by delivery
or by writing or transfer of any kind, conveyed, mortgaged, pledged, assigned or transferred, as
and for additional security hereunder, by the City or by any other Person, firm or corporation, or
with the written consent of the City, to the Trustee, which is hereby authorized to receive any
and all such properties, rights and interests at any time and at all times and to hold and apply the
same subject to the terms hereof.
TO HAVE AND TO HOLD all the same (the "Trust Estate") with all privileges and
appurtenances hereby conveyed and assigned, or agreed or intended so to be, to the Trustee and
its successors in said trusts and to them and their assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal
and proportionate benefit, security and protection of all owners of the said Bonds issued under
and secured by this Indenture (except as to the separate security described in clause 2 above);
without privilege, priority or distinction as to lien or otherwise of any of the Bonds over any of
the other Bonds; and provided further, that if the City, its successors or assigns, shall well and
truly pay, or cause to be paid, the principal of, premium, if any, and interest due on the Bonds, at
the times and in the manner provided in the Bonds, according to the true intent and meaning
thereof, and shall make the payments as required under this Indenture or shall provide, as
permitted hereby, for the payment thereof by depositing or causing to be deposited with the
Trustee the entire amount due or to become due thereon, and shall well and truly keep, perform
and observe all of the covenants and conditions pursuant to the terms of this Indenture to be kept,
and shall pay to the Trustee all sums of money due or to become due to it in accordance with the
terms and provisions hereof, then upon such final payments or deposits this Indenture and the
lien and rights hereby granted shall cease, determine and be void; otherwise, this Indenture is to
be and remain in full force and effect.
THIS INDENTURE FURTHER WITNESSETH that, and it is expressly declared that,
all Bonds issued and secured hereunder are to be issued, authenticated and delivered and all
revenues and income hereby pledged are to be dealt with and disposed of under, upon and
subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as
hereinafter expressed, and the City has agreed and covenanted, and does hereby agree and
10-70831.5 3
covenant, with the Trustee and with the respective owners from time to time of the Bonds or any
part thereof, as follows, that is to say:
ARTICLE I
DEFINITIONS
Section 101. Definitions. In addition to the words and terms elsewhere defined in this
Indenture, the following words and terms as used in this Indenture shall have the following
meanings:
"Account" means an Account established by Article V of this Indenture.
"Accountant" means
an independent
certified public accountant or a firm
of independent
certified public accountants.
"Accreted Value" means, with respect to each Series 2005 Bond:
(a) for any $5,000 minimum authorized denomination of a Series 2005 Bond,
as of any Accretion Date, the amount set forth in Exhibit C hereto as the Accreted Value
of a Series 2005 Bond as of such Accretion Date;
(b) as of any date (for purposes of this paragraph (b), a "Calculation Date")
that is not an Accretion Date, the sum of (i) the Accreted Value determined under
paragraph (a) above, as appropriate, as of the most recent Accretion Date plus (ii) the
amount determined pursuant to the following formula:
(A-B)(X/180),
where "A" is the Accreted Value determined under paragraph (a) above as of the
Accretion Date immediately following such Calculation Date; "B" is the Accreted Value
determined under paragraph (a) above as of the most recent Accretion Date; and "X" is
the number of days such Calculation Date follows the most recent Accretion Date,
determined assuming that each month in such period contains 30 days.
"Accretion Date" means, with respect to the Series 2005 Bonds, (i) the date on which the
Series 2005 Bonds are first issued by the City and February 1 and August 1 of each year,
commencing August 1, 2005.
"Act" means the enabling legislation for Amendment 78, codified as Arkansas Code
Annotated (2003 Supp.) Sections 14-168-301 et seq., as from time to time amended.
"Additional Bonds" mean Bonds in addition to the Series 2005 Bonds which are issued
under the provisions of Section 212 of this Indenture.
"Amendment 78" means Amendment No. 78 to the Constitution of Arkansas, approved
by the voters of the State on November 7, 2000.
10-70831.5 4
"Annual Debt Service" means, with respect to all or any particular amount of Bonds, as
the case may be, the Debt Service for any particular Fiscal Year required to be paid or set aside
during such Fiscal Year, less the amount of such payment which is provided from the proceeds
of the sale of Bonds or from sources other than Tax Increment receipts. With respect to the
Series 2005 Bonds, "Annual Debt Service" means the Debt Service for any particular year which
is deemed to accrete or mature as described under the definition of Debt Service set forth below.
"Authorized Representative" means the Mayor of the City and such additional person or
persons as from time to time may be designated to act on behalf of the City by a Certificate
furnished to the Trustee containing the specimen signature thereof and executed on behalf of the
City by its Mayor.
"Authorizing Ordinance" means Ordinance No. , adopted by the City on [March
15], 2005, which authorized the issuance of the Series 2005 Bonds pursuant to this Indenture.
"Bond Counsel" means any firm of nationally recognized municipal bond counsel
selected by the City and acceptable to the Trustee.
"Bond Fund" means the fund by that name created and established in Section 501 of this
Indenture.
"Bond Purchase Agreement" means each bond purchase agreement executed between the
City and the Original Purchaser or Purchasers of a series of Bonds issued hereunder.
"Bonds" mean the Series 2005 Bonds and all Additional Bonds issued by the City
pursuant to this Indenture.
"Certificate" means a document signed by an Authorized Representative of the City
attesting to or acknowledging the circumstances or other matters therein stated.
"City" means the City of Fayetteville, Arkansas, a municipality and political subdivision
under the laws of the State of Arkansas.
"City Clerk" means the person holding the office and performing the duties of the City
Clerk of the City.
"Closing Date" means, with respect to any series of Bonds, the date upon which there is
an exchange of such series of Bonds for the proceeds representing the initial purchase price for
such series of Bonds by the Original Purchaser or Purchasers thereof
"Code" means the Internal Revenue Code of 1986, as from time to time amended, and
applicable regulations issued or proposed thereunder.
"Completion Date" means the date upon which a particular Project is completed, as
certified by a Qualified Engineer in accordance with Section 408 hereof.
"Costs of Issuance" means
all
items of expense
payable
or reimbursable directly or
indirectly by the City and related to
the
authorization, sale
and issuance of the Bonds, including,
10-70831.5
but not limited to, underwriting discounts, fees and expenses, placement agent fees and expenses,
publication expenses, expenses of printing, reproducing, filing and recording documents, initial
fees and charges of the Trustee and any Paying Agent, fees and expenses for legal, accounting
and other professional services, rating fees, costs of securing any credit enhancement for the
Bonds, costs of execution, transportation and safekeeping of the Bonds, and other costs, charges
and fees incurred in connection with the foregoing.
"Costs of Issuance Fund" means the fund by that name created and established in
Section 501 of this Indenture.
"Debt Service" means, with respect to all or any particular amount of Bonds, the total as
of any particular date of computation and for any particular period of the scheduled amount of
interest and amortization of principal payable on such Bonds, excluding amounts scheduled
during such period which relate to principal which has been retired before the beginning of such
period. With respect to the Series 2005 Bonds, "Debt Service" shall include the increase in
Accreted Value during such period of computation and the pro rata portion of principal allocable
to such period of computation, assuming that the principal of the Series 2005 Bonds matures on a
level basis over the life of the Series 2005 Bonds, but excluding amounts which relate to Series
2005 Bonds which have been retired before the beginning of such period.
"Debt Service Reserve Fund" means the fund by that name created and established in
Section 501 of this Indenture.
"District" means the Highway 71 East Square Redevelopment District No. 1 created by
the City under the authority of Amendment 78 and the Act pursuant to Ordinance No. 4608
adopted on August 17, 2004, as amended by Ordinance No. 4662 adopted on December 28,
2004.
"Event of Default" means any event of default specified in Section 801 hereof.
"Fiscal Year" means the 12 -month period used, at any time, by the City for accounting
purposes, which may be the calendar year.
"Fund" means a fund established by Article V of this indenture.
"Government Securities" means (i) bonds, notes, certificates of indebtedness, treasury
bills or other securities constituting direct obligations of, or obligations on which the full and
timely payment of principal and interest is fully and unconditionally guaranteed by, the United
States of America (including any such securities issued or held in book -entry form on the books
of the Department of Treasury of the United States of America), and (ii) evidences of direct
ownership or proportionate or individual interest in future interest or principal payments on
specified direct obligations of, or obligations on which the full and timely payment of principal
and interest is fully and unconditionally guaranteed by, the United States of America, which
obligations are held by a bank or trust company organized and existing under the laws of the
United States of America or any state thereof in the capacity of custodian in form and substance
satisfactory to the Trustee.
10-70831.5 6
"Holder" or "Bondholder" or "owner of the Bonds" means the registered owner of any
Bond.
"Indenture" means this Trust Indenture dated as of April 15, 2005, between the City and
the Trustee, pursuant to which the Bonds are issued, and any amendments and supplements
hereto.
"Investment
Securities" means,
if and to
the extent the same are at the time legal for
investment of Funds
and Accounts held
under this
Indenture:
(a) Government Securities;
(b) bonds, notes or other obligations of any state of the United States of
America or any political subdivision of any state, which at the time of their purchase are
rated in either of the two highest rating categories by a nationally recognized Rating
Agency;
(c) certificates of deposit or time or demand deposits constituting direct
obligations of any bank, bank holding company, savings and loan association or trust
company organized under the laws of the United States of America or any state thereof
(including the Trustee or any of its affiliates), except that investments may be made only
in certificates of deposit or time or demand deposits which are:
(1) insured by the Federal Deposit Insurance Corporation, or any other
similar United States Government deposit insurance program then in existence; or
(2) continuously and fully secured by Government Securities, which
have a market value, exclusive of accrued interest, at all times at least equal to the
principal amount of such certificates of deposit or time or demand deposits;
(d) short term discount obligations of the Federal National Mortgage
Association and the Government National Mortgage Association; and
(e) money market mutual funds (1) that invest in Government Securities or
that are registered with the U.S. Securities and Exchange Commission (SEC), meeting
the requirements of Rule 2a-7 under the Investment Company Act of 1940, and (2) that
are rated in either of the two highest categories by a nationally recognized Rating
Agency.
"Mayor" means the person holding the office and performing the duties of the Mayor of
the City.
"Original Purchaser" means the first purchaser(s) of a series of Bonds from the City.
"Outstanding" means, as of any date of computation, Bonds theretofore or thereupon
being delivered under this Indenture, except:
10-70831.5 7
(a) Bonds cancelled at or prior to such date or delivered to or acquired by the
Trustee at or prior to such date for cancellation;
(b) Bonds deemed to be paid in accordance with Article VII of this Indenture;
and
(c)
Bonds in
lieu
of or in exchange or substitution for which other Bonds shall
have been
authenticated
and
delivered pursuant to this Indenture.
"Paying Agent" means any bank or trust company named by the City as the place at
which the principal of and premium, if any, and interest on the Bonds are payable.
"Person" means any natural person, firm, association, corporation, limited liability
company, partnership, joint stock company, joint venture, trust, unincorporated organization or
firm, or a government or any agency or political subdivision thereof or other public body.
"Project" means the acquisition, construction, reconstruction, improving, extension or
equipping of City infrastructure improvements to be financed with the proceeds of a series of
Bonds.
"2005 Project" means the acquisition of certain real property and the demolition of
existing structures thereon, which property is located within the District and consists of the
former Mountain Inn property and surrounding parcels, together with the construction of certain
sidewalk and crosswalk improvements within the District.
"Project Costs" shall have the meaning set forth in the Act, and shall include, with
respect to a Project, all costs of planning, designing, purchasing, acquiring, constructing,
reconstructing, improving, enlarging, extending, repairing, financing and placing a Project in
operation, including the demolition of existing structures, and the costs of obtaining
governmental approvals, certificates, permits and licenses with respect thereto, heretofore or
hereafter paid or incurred by or on behalf of the City and which shall include, but shall not be
limited to:
(a) interest accruing in whole or in part on a series of Bonds prior to the
receipt of sufficient Tax Increment receipts to pay such interest as it becomes due;
(b) preliminary investigation and development costs, engineering fees,
contractors' fees, labor costs, the cost of materials, equipment, utility services and
supplies, costs of obtaining permits, licenses and approvals, costs of real property,
insurance premiums, legal and financing fees and costs, administrative and general costs,
and all other costs properly allocable to the acquisition, construction, reconstruction,
improving, extending and equipping of a Project and placing the same in operation;
(c)
all costs
relating to
injury and damage claims arising out of the
acquisition,
construction
or equipping
of a Project;
10-70831.5 8
(d) all other costs incurred in connection with, and properly allocable to, the
acquisition, construction, reconstruction, improving, extending and equipping of a
Project; and
(e) amounts to pay or reimburse the City, any City fund or any other entity for
expenses incident and properly allocable to such planning, designing, purchasing,
acquiring, constructing, reconstructing, improving, enlarging, extending, repairing,
financing and placing in operation of a Project.
"Project Fund" means the fund by that name created and established in Section 501 of
this Indenture.
"Qualified Engineer" means either (i) the City's Building Services Director and Project
Manager or (ii) an independent consulting engineer or firm of independent consulting engineers
not in the regular employ of the City.
"Rating Agency" means Moody's Investors Service, Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., or Fitch, Inc., and their respective successors and assigns. If any
such corporation ceases to act as a securities rating agency, the City may appoint any nationally
recognized securities rating agency as a replacement.
"Rebate Fund" means the fund by that name created and established in Section 501 of
this Indenture.
"Redemption Fund" means the fund by that name established in Section 501 of this
Indenture.
"2005 Redevelopment Agreement" means that certain Redevelopment Agreement dated
April _, 2005, between the City and , in connection with the 2005 Project.
"Requisition" means a written requisition of the City in substantially the form set forth in
Exhibit B hereto, consecutively numbered, signed by an Authorized Representative, including,
without limitation, the following with respect to each payment requested:
(i) the name of the person or party to whom payment is to be made and the
purpose of the payment,
(ii) the amount to be paid thereunder;
(iii) that such amount has not been previously paid by the City and is justly due
and owing to the person(s) named therein as a proper payment or reimbursement of a
Project Cost; and
(iv) that no Event of Default exists under the Indenture and that, to the
knowledge of the Authorized Representative, no event has occurred and continues which
with notice or lapse of time or both would constitute an Event of Default under the
Indenture.
10-70831.5
W
"Reserve Requirement" means, with respect to each series of Bonds issued hereunder, at
any particular time, an amount equal to 10% of the total Outstanding principal amount of such
series of Bonds.
"Revenue Fund" means the fund by that name created and established in Section 501 of
this Indenture.
"Series 2005 Bonds" means the City's Tax Increment Interest Accretion Bonds (Highway
71 East Square Redevelopment District No.1 Project), Series 2005, issued under and secured by
this Indenture in aggregate principal amount not to exceed $
"State" means the State of Arkansas.
"Supplemental Indenture" means any indenture supplemental to or amendatory of this
Indenture, adopted by the City in accordance with Article X hereof.
"Tax Increment" shall have the meaning set forth in the Act, as determined by
multiplying the incremental value of the real property within the District by the maximum
applicable ad valorem rate permitted pursuant to the Act.
"Tax Regulatory Agreement" means with respect to any series of Bonds, that Tax
Regulatory Agreement of the City relating to maintenance of the excludability of interest on such
Bonds from gross income for federal income tax purposes, delivered in connection with the
issuance of such series of Bonds.
"Trustee"
means the banking corporation
or association
designated as Trustee in
the
Indenture, and
its successor or successors as
such Trustee.
The original Trustee
is
"Trust Estate" means the property described in the granting clauses of this Indenture.
Section 102. Use of Words. Words of the masculine gender shall be deemed and
construed to include correlative words of the feminine and neuter genders. Unless the context
shall otherwise indicate, the words "Bond", "owner", "holder" and "person" shall include the
plural, as well as the singular, number.
ARTICLE II
THE BONDS
Section 201. Security for the Bonds. (a) The Bonds are special and limited
obligations of the City payable as to principal, premium, if any, and interest solely out of the
Trust Estate. The Trust Estate is hereby pledged, appropriated and assigned to the payment of
the principal of, premium, if any, and interest on the Bonds, all in accordance with their terms
and the provisions of this Indenture. The Bonds do not constitute an indebtedness for which the
faith and credit of the State of Arkansas or the City is pledged within the meaning of any
Constitutional or statutory limitation. The Bonds shall never constitute an obligation of or a
charge against the general credit or general taxing powers of the City.
10-70831.5 10
(b) The pledge, charge, lien, trusts and assignments made herein with respect to the
Trust Estate shall be valid and binding, and shall be deemed continuously perfected from the
time of issuance of the Series 2005 Bonds, and the Trust Estate shall thereupon be immediately
subject to the pledge, charge, lien, trust and assignment created hereby upon receipt thereof by or
for the City or by the Trustee or the Paying Agent hereunder, without any physical delivery,
segregation thereof or further act, and such pledge, charge, lien, trust and assignment shall be
valid and binding as against all parties having claims of any kind in tort, contract or otherwise
against the City, irrespective of whether such parties have notice thereof.
(c) Except for the specific security provided separately for each series of Bonds
issued hereunder and described in clause 2 of the granting clauses of this Indenture, the Bonds
shall be equally and ratably payable and secured hereunder without priority by reason of date of
adoption of this Indenture or any Supplemental Indenture authorizing their issuance or by reason
of their series, number, date, date of issue, execution, authentication or sale, or otherwise.
(d) So long as any Bonds are Outstanding under the provisions of this Indenture, all
receipts derived from the Tax Increment shall be deemed to be necessary to accomplish the
purposes of the City and shall be subject to the covenants and agreements set forth in this
Indenture, and no such revenues or receipts shall ever be used or deposited otherwise except as
herein expressly permitted.
(e) The City covenants that while any of the Bonds are Outstanding it will use due
diligence in causing the collection of the Tax Increment.
Section 202. Authorized Amount. There is hereby authorized the issuance of bonds of
the City to be designated "City of Fayetteville, Arkansas Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. 1 Project), Series 2005" in the aggregate
principal amount of Dollars ($ ) (the
"Series 2005 Bonds"). No Bonds may be issued under the provisions of this Indenture except in
accordance with this Article II.
Section 203. Details of Bonds. The Series 2005 Bonds (i) shall be dated as of April _,
2005 [DATE OF DELIVERY], (ii) shall accrete interest at the rate of _% per annum from and
including their dated date, such interest to be compounded semiannually on each February I and
August 1, commencing August 1, 2005, as shown on Exhibit C hereto, and fully payable at
maturity or upon earlier redemption of the Series 2005 Bonds, (iii) shall be issued in
denominations of $5,000 each and in integral multiples of $5,000 in excess thereof, (iv) shall be
numbered from R05-1 upwards in order of issuance according to the records of the Trustee, and
(v) shall mature, unless sooner redeemed in the manner in this Indenture set forth, on August 1,
2029.
Section 204. Form. The Series 2005 Bonds shall be initially issued as fully registered
bonds, without coupons, in the form of one typewritten bond certificate to be delivered to The
Depository Trust Company. The Series 2005 Bonds and the Trustee's certificate of
authentication to be endorsed thereon shall be in substantially the form set forth in Exhibit A
hereto, with appropriate variations, insertions and omissions as permitted or required by this
10-70831.5 11
Indenture. There shall be included with or printed on the Series 2005 Bonds the approving
opinion of Bond Counsel.
Section 205. Payment. The Series 2005 Bonds shall be payable, with respect to
principal, premium, if any, and interest in any coin or currency of the United States of America
which at the time of payment is legal tender for the payment of public and private debts. The
principal of and premium, if any, and accreted interest on the Series 2005 Bonds shall be payable
upon surrender thereof at the principal corporate trust office of the Trustee. For purposes of this
Indenture, interest on the Series 2005 Bonds shall be deemed to accrue and accrete on the basis
of a 360 -day year of twelve 30 -day months.
Section 206. Execution. The Bonds shall be executed on behalf of the City by the
manual or facsimile signatures of its Mayor and City Clerk and shall have impressed or
imprinted thereon the seal of the City. A facsimile signature shall have the same force and effect
as if manually signed. In case any officer whose manual signature or a facsimile of whose
signature shall appear on the Bonds shall cease to be such officer before the delivery of such
Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all
purposes, the same as if such official had remained in office until delivery.
Section 207. Authentication. Only such Bonds as shall have endorsed thereon a
certificate of authentication substantially in the form set forth in Exhibit A attached hereto duly
executed by the Trustee shall be entitled to any right or benefit under this Indenture. No Bond
shall be valid and obligatory for any purpose unless and until such certificate of authentication
shall have been duly executed by the Trustee, and such certificate of the Trustee upon any such
Bond shall be conclusive evidence that such Bond has been authenticated and delivered under
this Indenture. The Trustee's certificate of authentication on any Bond shall be deemed to have
been executed if signed by an authorized officer of the Trustee, but it shall not be necessary that
the same officer sign the certificate of authentication on all of the Bonds issued hereunder.
Section 208. Delivery of the Bonds. The City shall execute and deliver to the Trustee
and the Trustee shall authenticate the Bonds of any series and deliver said Bonds to the Original
Purchaser(s) as may be directed in this Section 208, in Section 212 hereof or in any
Supplemental Indenture.
(1) Prior to the delivery or original issuance by the Trustee of any authenticated
Bonds of any series, there shall be delivered to the Trustee:
(a) An original executed counterpart of this Indenture or, in the case of
Additional Bonds, a Supplemental Indenture by and between the City and the Trustee
setting forth the details concerning such Additional Bonds;
(b)
Original executed
counterparts
of the Tax Regulatory Agreement and
Continuing
Disclosure Agreement
applicable to
such series of Bonds;
(c) An original executed Bond Purchase Agreement between the City and the
Original Purchaser(s) of each series of Bonds;
10-70831.5 12
(d) With respect to the Series 2005 Bonds, an original executed counterpart of
the 2005 Redevelopment Agreement;
(e) A Certificate directing the Trustee to authenticate the Bonds and
containing instructions as to the delivery of the Bonds upon payment to the Trustee, for
the account of the City, of a sum specified in such Certificate;
(f) A copy, duly certified by the City Clerk, of the proceedings of the City
authorizing the issuance of the Bonds;
(g) A written opinion of Bond Counsel approving the legality of the Bonds;
(h) In the case of any series of Additional Bonds, a Certificate signed by the
Mayor of the City certifying that (i) the City is not then in default in the performance of
any of the covenants, conditions, agreements or provisions contained in this Indenture,
and (ii) the City is current as to all required deposits at that time in all the Funds and
Accounts described in Article V of this Indenture or hereafter created by Supplemental
Indentures, or if the City is in default or is not so current, certifying in the case of (i) or
(ii) as to that fact and that, upon the application of the proceeds of the sale of such
Additional Bonds as provided in the Supplemental Indenture authorizing the issuance
thereof, the City will not be in default or will be current thereafter;
(i) In the case of any series of Additional Bonds, the Accountant's certificate
described in Section 212 hereof and a written opinion of Bond Counsel to the effect that
the exemption from federal income tax of the interest on the Series 2005 Bonds and any
Additional Bonds theretofore issued will not be adversely affected by the issuance of the
Additional Bonds being issued; and
0) Such further documents and certificates as may be required by the
Original Purchaser(s) of such series of Bonds.
(2) Upon the delivery of the Series 2005 Bonds to the Original Purchaser thereof, the
Trustee shall apply the proceeds (i.e., $ ) as follows:
(a) $ , an amount equal to the Reserve Requirement with respect
to the Series 2005 Bonds, shall be deposited in the Series 2005 Account of the Debt
Service Reserve Fund;
(b) An
amount equal to $
shall be
deposited in the Costs
of Issuance
Fund for payment
of Costs of Issuance
as directed by a
Certificate
of the City;
and
(c) The balance of said proceeds, in the amount of $ , shall be
deposited in the Series 2005 Account of the Project Fund and disbursed as directed by the
City pursuant to Section 502 hereof.
Section 209. Mutilated, Destroyed or Lost Bonds. In case any Bond issued hereunder
shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause
to be executed and the Trustee may authenticate and deliver a new Bond of like series, date,
10-70831.5 13
0
number, maturity and tenor in exchange and substitution for and upon cancellation of such
mutilated Bond, or in lieu of and in substitution for such Bond destroyed or lost, upon the
Holder's paying the reasonable expenses and charges of the City and the Trustee in connection
therewith, and, in the case of a Bond destroyed or lost, filing by the Holder with the Trustee
evidence satisfactory to the Trustee that such Bonds were destroyed or lost, and of the Holder's
ownership thereof, and furnishing the City and Trustee with indemnity satisfactory to them. The
Trustee is hereby authorized to authenticate any such new Bond. In the event any such Bonds
shall have matured, instead of issuing a new Bond, the City may pay the same without the
surrender thereof. Upon the issuance of a new Bond under this Section 209, the City may
require the payment of a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.
Section 210. Registration and Transfer of Bonds. The City hereby constitutes and
appoints the Trustee as Bond registrar of the City, and as Bond registrar the Trustee shall keep
books for the registration and for the transfer of the Bonds as provided in this Indenture at the
principal corporate trust office of the Trustee. The person in whose name any Bond shall be
registered shall be deemed and regarded as the absolute owner thereof for all purposes and
payment of or on account of the principal of, premium and interest on any such Bond shall be
made only to or upon the order of the registered owner thereof, or the owner's legal
representative, and neither the City, the Trustee nor the Bond registrar shall be affected by any
notice to the contrary, but such registration may be changed as herein provided. All such
payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the
extent of the sum or sums so paid.
Subject to the limitations set forth below, Bonds may be transferred on the books of
registration kept by the Trustee by the registered owner in person or by the owner's duly
authorized attorney, upon surrender thereof, together with a written instrument of transfer duly
executed by the registered owner or the owner's duly authorized attorney. Upon surrender for
transfer of any Bond at the principal corporate office of the Trustee, the City shall execute and
the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond
or Bonds of the same series and in the same aggregate principal amount and of any authorized
denomination or denominations.
Bonds may be exchanged at the principal corporate trust office of the Trustee for an equal
aggregate principal amount of Bonds of any other authorized denomination or denominations of
the same series with corresponding maturities. The City shall execute and the Trustee shall
authenticate and deliver Bonds which the Bondholder making the exchange is entitled to receive,
bearing numbers not contemporaneously then outstanding. The execution by the City of any
Bond of any denomination shall constitute full and due authorization of such denomination and
the Trustee shall thereby be authorized to authenticate and deliver such Bond.
Such transfers of registration or exchanges of Bonds shall be without charge to the
Holders of such Bonds, but any taxes or other governmental charges required to be paid with
respect to the same shall be paid by the Holder of the Bond requesting such transfer or exchange
as a condition precedent to the exercise of such privilege.
10-70831.5 14
The Trustee shall not be required to transfer or exchange any Bond after the mailing of
notice calling such Bond for redemption has been made, and prior to such redemption.
Section 211. Cancellation. All Bonds surrendered for payment, redemption, transfer or
exchange, if surrendered to the Trustee, shall be promptly cancelled by it, and, if surrendered to
any person other than the Trustee, shall be delivered to the Trustee and, if not already cancelled,
shall be promptly cancelled by it. The City may at any time deliver to the Trustee for
cancellation any Bonds previously authenticated and delivered hereunder, which the City may
have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled
by the Trustee. All cancelled Bonds held by the Trustee shall be disposed of as directed by the
City. Whenever in this Indenture provision is made for the cancellation by the Trustee and the
delivery to the City of any Bonds, the Trustee may, upon the written request of the City, in lieu
of such cancellation and delivery, destroy such Bonds in the presence of any officer of the City
(but only if the City shall so require), and deliver a certificate of such destruction to the City.
Section 212. Additional Bonds. The City may issue from time to time one or more
series of Additional Bonds for the purpose of (i) financing Project Costs in connection with a
Project, (ii) refunding the Series 2005 Bonds or any series of Additional Bonds, in whole or in
part, or (iii) any combination thereof. Additional Bonds shall be secured equally and ratably
with the Series 2005 Bonds and any other series of Additional Bonds theretofore issued and then
Outstanding, except insofar as any terms or conditions of redemption or purchase established
under this Indenture may afford additional benefit or security for the Bonds of any particular
series and except for the security afforded by any municipal bond insurance obtained with
respect to a particular series of Bonds. Before any Additional Bonds are authenticated, there
shall be delivered to the Trustee the items required for the issuance of Bonds by Section 208
hereof, plus an Accountant's certificate stating that, based upon necessary investigation, the Tax
Increment receipts transferred to the Trustee for deposit to the Revenue Fund during the most
recent twelve (12) months were not less than (i) 150% of the average Annual Debt Service on all
then Outstanding Bonds, plus the Additional Bonds then proposed to be issued, and (ii) the
amount, if any, needed to make required deposits to the Debt Service Reserve Fund.
Notwithstanding anything herein to the contrary, no Additional Bonds shall be issued unless
there is no default at the time of issuance under this Indenture.
Section 213. Superior Obligations Prohibited. Except to the extent permitted in
Section 212 hereof for the issuance of Additional Bonds, from and after the issuance of any of
the Bonds and for so long as any of the Bonds are Outstanding, the City shall not create or permit
the creation of any indebtedness, or issue any bonds, notes, warrants, certificates or other
obligations or evidences of indebtedness payable in any manner from the Tax Increment receipts
or otherwise from the Trust Estate which (i) will in any way be superior to or rank on a parity
with the Bonds, or (ii) will in any way be secured by a lien and charge on the Tax Increment
receipts or on the moneys deposited in or to be deposited in the Revenue Fund, prior to or equal
with the lien, pledge and charge created herein for the security of the Bonds, or (iii) will be
payable prior to or equal with the payments to be made from the Tax Increment receipts and the
Revenue Fund into the Bond Fund, Debt Service Reserve Fund and Redemption Fund or from
said Bond Fund, Debt Service Reserve Fund and Redemption Fund for the payment of principal
of and interest on the Bonds.
10-70831.5 15
Section 214. [RESERVED].
Section 215. Temporary Bonds. Until Bonds in definitive form are ready for delivery,
the City may execute, and upon the request of the City, the Trustee shall authenticate and deliver,
subject to the provisions, limitations and conditions set forth herein, one or more Bonds in
temporary form, whether printed, typewritten, lithographed or otherwise produced, substantially
in the form of the definitive Bonds, with appropriate omissions, variations and insertions, and in
authorized denominations. Until exchanged for Bonds in definitive form, such Bonds in
temporary form shall be entitled to the lien and benefit of this Indenture. Upon the presentation
and surrender of any Bond or Bonds in temporary form, the City shall, without unreasonable
delay, prepare, execute and deliver to the Trustee and the Trustee shall authenticate and deliver,
in exchange therefor, a Bond or Bonds in definitive form. Such exchange shall be made by the
Trustee without making any charge therefor to the Holder of such Bond in temporary form.
ARTICLE III
REDEMPTION OF BONDS BEFORE MATURITY
Section 301. Redemption. (a) The Series 2005 Bonds shall be subject to redemption
prior to maturity on any date, in whole or in part (in authorized denominations of the Series 2005
Bonds), by lot in such manner as the Trustee shall determine, at a redemption price equal to
100% of the Accreted Value thereof as of the date of redemption, (i) from moneys in the Series
2005 Account of the Project Fund in excess of the amount needed to complete the 2005 Project,
and (ii) from the first $120,000 of proceeds realized by the City upon any sale of any of the real
property originally acquired with the proceeds of the Series 2005 Bonds, which moneys shall be
transferred to the Series 2005 Account of the Redemption Fund pursuant to Section 502(d)
hereof.
(b) The Series 2005 Bonds shall be subject to redemption prior to maturity on each
February 1, in whole or in part (in authorized denominations of such Series 2005 Bonds), by lot
in such manner as the Trustee shall determine, at a redemption price equal to 100% of the
Accreted Value thereof as of the date of redemption, to the extent of.(i) Tax Increment receipts
deposited in the Series 2005 Account of the Redemption Fund pursuant to Section 503 hereof,
and (ii) investment earnings and permitted reductions in the balance of the Debt Service Reserve
Fund deposited in the Series 2005 Account of the Redemption Fund pursuant to Section 508
hereof.
(c) On and after February 1, 2010, the Series 2005 Bonds shall be subject to
redemption prior to maturity at the option of the City, in whole or in part on any date (in
authorized denominations of the Series 2005 Bonds), by lot in such manner as the Trustee shall
determine, from funds from any source, at a redemption price equal to 100% of the Accreted
Value thereof as of the date of redemption.
(d) Upon any determination that the Tax Increment is to be calculated by including
[all of][any portion of] the 25 mills described in Amendment 74 to the Constitution of the State
of Arkansas within the "applicable ad valorem rate" (as defined in the Act), which determination
is evidenced by (i) an opinion of the Arkansas Attorney General, (ii) a decision by an Arkansas
10-70831.5 16
0
court of competent jurisdiction, (iii) legislation enacted by the Arkansas General Assembly, or
(iv) an amendment to the Constitution of the State of Arkansas, then the Series 2005 Bonds shall
be subject to redemption prior to maturity at the option of the City, in whole on any date, from
funds from any source, at a redemption price equal to 101% of the principal amount of the
Outstanding Series 2005 Bonds plus the accreted interest thereon as of the date of redemption.
[WHAT ABOUT A SITUATION WHERE ADDITIONAL MILLS ARE LEVIED?]
Section 302. Notice. Notice of the call for any redemption, identifying the Bonds or
portions thereof being called and the date on which they shall be presented for payment, shall be
mailed by the Trustee by first class mail to the registered owner of each such Bond addressed to
such registered owner at his registered address and placed in the mails not less than thirty (30)
nor more than sixty (60) days prior to the date fixed for redemption; provided, however, that
failure to give such notice by mailing, or any defect therein, shall not affect the validity of any
proceeding for the redemption of any Bond with respect to which no such failure or defect has
occurred.
Any notice mailed as provided in this Section 302 shall be conclusively presumed to have
been duly given, whether or not the registered owner receives the notice.
Section 303. Selection of Bonds to be Redeemed. If less than all of the Bonds of like
series, maturity, interest rate and otherwise identical payment terms shall be called for
redemption, the particular Bonds or portions of Bonds to be redeemed shall be selected by lot by
the Trustee in such manner as the Trustee in its discretion may deem fair and appropriate;
provided, however, that the portion of any Bond of a denomination of larger than the minimum
denomination may be redeemed in the principal amount of such minimum denomination or a
multiple thereof, and that for purposes of selection and redemption, any such Bond of a
denomination larger than the minimum denomination shall be considered to be that number of
separate Bonds of such minimum denomination which is obtained by dividing the principal
amount of such Bond by such minimum denomination.
Section 304. Surrender of Bonds Upon Redemption. Notice having been given in the
manner and under the conditions hereinabove provided, and moneys for payment of the
redemption price being held by the Trustee as provided in this Indenture (i) the Bonds or portions
of Bonds so called for redemption shall, on the date fixed for redemption designated in such
notice, become due and payable at the redemption price provided for redemption of such Bonds,
and interest on such Bonds or portions of Bonds so called for redemption shall cease to accrue,
(ii) upon surrender of the Bonds or portions of Bonds so called for redemption in accordance
with such notice, such Bonds or portions of Bonds shall be paid at the applicable redemption
price, (iii) such Bonds or portions of Bonds shall cease to be entitled to any lien, benefit or
security under this Indenture, and (iv) the owners of said Bonds or portions of Bonds shall have
no rights in respect thereof except to receive payment of the redemption price thereof.
Section 305. Redemption in Part. Any Bond which is to be redeemed only in part shall
be surrendered to the Trustee (with, if the City or the Trustee so requires, due endorsement by, or
a written instrument of transfer in form satisfactory to the City and the Trustee duly executed by,
the owner thereof or his attorney duly authorized in writing), and the appropriate officials of the
City shall execute and the Trustee shall authenticate and deliver to the owner of such Bond,
10-70831.5 17
0 S
without service charge, a new Bond or Bonds of the same series, of any authorized denomination
or denominations, having the same maturity and interest rate, in aggregate principal amount
equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered.
Section 306. Payment of Redemption Price. For the redemption of any of the Series
2005 Bonds, the City shall cause to be deposited from the appropriate Account of the
Redemption Fund to the corresponding Account in the Bond Fund an amount sufficient to pay
the Accreted Value of such Series 2005 Bonds to be redeemed as of the date fixed for such
redemption. The obligation of the City to cause any such deposit to be made hereunder shall be
reduced by the amount of moneys in the applicable Account in the Bond Fund available on such
redemption date for payment of the Accreted Value on the Series 2005 Bonds to be redeemed.
Section 307. Redemption of Additional Bonds. Additional Bonds may be made
subject to optional, extraordinary and mandatory sinking fund redemption, in whole or in part, in
such manner, at such times and at such prices as may be provided in the Supplemental Indenture
providing for their issuance.
ARTICLE IV
GENERAL COVENANTS AND REPRESENTATIONS
Section 401. Payment of Principal, Premium, if any, and Interest. The City
covenants that it will promptly pay or cause to be paid the principal of and premium, if any, and
interest on every Bond issued under this Indenture at the place, on the dates and in the manner
provided herein and in the Bonds according to the true intent and meaning thereof. Said
principal, premium, if any, and interest are payable solely from the Trust Estate which is hereby
specifically pledged to the payment thereof in the manner and to the extent herein specified, and
nothing in the Bonds or this Indenture should be considered as assigning or pledging any funds
or assets of the City other than the Trust Estate. Anything in this Indenture to the contrary
notwithstanding, it is understood that whenever the City makes any covenants involving
financial commitments it pledges no funds or assets other than the Trust Estate in the manner and
to the extent herein specified, but nothing herein shall be construed as prohibiting the City from
using any other funds or assets. The City covenants to use due diligence in causing the
collection of the Tax Increment in the maximum amount permissible under the Act and
Amendment 78.
Section 402. Performance of Covenants. The City covenants that it will faithfully
perform at all times any and all covenants, undertakings, stipulations and provisions contained in
this Indenture, in any and every Bond executed, authenticated and delivered hereunder, and in all
ordinances pertaining hereto. The City covenants that it is duly authorized under the
Constitution and laws of the State of Arkansas, including particularly and without limitation
Amendment 78 and the Act, to issue the Bonds authorized hereby and to execute this Indenture
and to make the pledge of the Tax Increment and to make the covenants in the manner and to the
extent herein set forth, that all action on its part for the issuance of the Bonds and the execution
and delivery of this Indenture has been duly and effectively taken, and that the Bonds in the
hands of the Holders and owners thereof are and will be valid and enforceable obligations of the
City according to the import thereof. The City covenants that the District has been duly formed
10-70831.5 18
and is validly existing under the authority of Amendment 78 and the Act. The City further
covenants that the District will continue to exist until at least the earlier of (i) August 1, 2029, or
(ii) the date all of the Bonds issued hereunder have been paid in full. Notwithstanding the
foregoing, the City understands and agrees that Section 9 of the Act (Arkansas Code Annotated
Section 14-168-308) provides in part that no redevelopment district may be terminated so long as
bonds with respect to the district remain outstanding. The City acknowledges that this provision
of the Act was material to the decision of the Original Purchaser of the Series 2005 Bonds to
make such investment.
Section 403. Instruments of Further Assurance. At any and all times the City shall,
so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and
every such further resolutions, ordinances, acts, deeds, conveyances, assignments, transfers and
assurances as may be necessary or desirable for the better assuring, conveying, granting,
pledging, assigning and confirming of all and singular the receipts from the Tax Increment and
all other moneys hereby pledged or assigned, or intended so to be, or which the City may
become bound to pledge or assign.
Section 404. Recordation and Filing. To the extent necessary, the City covenants that
it will cause this Indenture, such security agreements, financing statements, and all supplements
thereto and other instruments as may be required from time to time to be kept, to be recorded and
filed in such manner and in such places as may be required by law in order to fully preserve and
protect the security of the owners of the Bonds and the rights of Trustee hereunder, and to perfect
the security interest created by this Indenture.
Section 405. Inspection of Books. The City shall keep proper books of record and
account (separate from all other records and accounts) in which complete and correct entries
shall be made of its transactions relating to the Project and the Funds and Accounts established
by this Indenture.
Section 406. Tax Covenants. The City shall not use or permit the use of any Bond
proceeds or any other funds of the City, directly or indirectly, in any manner, and will not take or
permit to be taken any other action or actions which would adversely effect the exclusion of
interest on any Bond from gross income for federal income tax purposes. No part of the
proceeds of the Bonds shall at any time be used, directly or indirectly, to acquire securities or
obligations the acquisition of which would cause any of such Bonds to be an "arbitrage bond" as
defined in Sections 148(a) and (b) of the Code. The City agrees that so long as any of the Bonds
remain Outstanding, it will comply with the provisions of each applicable Tax Regulatory
Agreement.
Section 407. Trustee's and Paying Agent's Fees and Expenses. Subject to the
provisions of Section 902 hereof, the City hereby agrees and covenants to make payments for the
fees, expenses and charges of the Trustee and Paying Agent, if any, as authorized and provided
by this Indenture. The City is to make payments on statements rendered by the Trustee and
Paying Agent either (i) directly to the Trustee and Paying Agent or (ii) pursuant to
Section 503(b) hereof.
10.70831.5 19
0
Section 408. Completion of Project; Certification of Completion Date. The City
hereby covenants to use its best efforts to complete each Project being financed with proceeds of
the Bonds with all reasonable dispatch and to use its best efforts to cause each Project to be
completed as soon as may be practicable, but in any case within a period not to exceed three
years after the issuance of the applicable series of Bonds, delays caused by force majeure only
excepted, but if for any reason a Project is not completed within said period, there shall be no
diminution or postponement of payments required hereunder to be made by the City. Promptly
after each such Completion Date, the City shall submit to the Trustee the certificate of a
Qualified Engineer which shall specify the Completion Date and shall state that the Project being
financed with a particular series of Bond proceeds has been completed and the Project Costs
have been paid, except for any Project Costs which have been incurred but are not then due and
payable, or the liability for the payment of which is being contested or disputed by the City, and
for the payment of which the Trustee is directed to retain specified amounts of moneys in the
applicable Account of the Project Fund. Notwithstanding the foregoing, such certificate may
state that it is given without prejudice to any rights against third parties which exist at the date
thereof or which may subsequently come into being.
Section 409. Encumbrances. The City covenants that it will not create or suffer to be
created any lien or charge upon the Trust Estate, except in accordance with the provisions of this
Indenture.
Section 410. Continuing Disclosure. The City hereby covenants and agrees that it will
comply with and carry out all of the provisions of each Continuing Disclosure Agreement.
Notwithstanding any other provision of this Indenture to the contrary, failure of the City or the
Trustee to comply with the provisions of a Continuing Disclosure Agreement shall not be
considered an Event of Default hereunder; however, the Trustee may (and at the request of the
Original Purchaser of a series of Bonds or the owners of at least 25% in aggregate Outstanding
principal amount of such series of Bonds, shall) or any Beneficial Owner may take such actions
as may be necessary and appropriate, including seeking mandate or specific performance by
court order, to cause the City or the Trustee, as the case may be, to comply with its obligations
under this Section 410. For purposes of this Section 410 only, "Beneficial Owner" shall mean
any Person which (a) has the power, directly or indirectly, to vote or consent with respect to, or
to dispose of ownership of, any Bonds (including Persons holding Bonds through nominees,
depositories or other intermediaries) or (b) is treated as the owner of Bonds for federal income
tax purposes.
ARTICLE V
FUNDS AND DEPOSITS
Section 501. Creation of Funds and Accounts. (a) There are hereby created and
established the following Funds and Accounts:
(i) Project Fund, and a Series 2005 Account therein;
10-70831.5 20
r
(ii) Revenue Fund (which shall be the fund mandated by Section 14-
168-305(e) of the Act and created in Section 5 of Ordinance No. 4608 of the
City);
(iii) Bond Fund, and a Series 2005 Account therein;
(iv) Redemption Fund, and a Series 2005 Account therein;
(v) Debt Service Reserve Fund, and a Series 2005 Account therein;
(vi) Cost of Issuance Fund; and
(vii) Rebate Fund, and a Series 2005 Account therein.
(b) All Funds and Accounts shall be held by the Trustee, which shall hold and
maintain said Funds and Accounts in trust, for the use and benefit of the Bondholders and
the City, but subject to the permitted applications expressed herein.
Section 502. Project Fund. (a) The Trustee shall deposit a portion of the proceeds of
the Series 2005 Bonds to the credit of the Series 2005 Account of the Project Fund in accordance
with the written directions of the City given as provided in Section 208 of this Indenture. In
addition, upon the sale of any portion of the real property originally acquired with the proceeds
of the Series 2005 Bonds, the first $120,000 of sale proceeds realized by the City from such sale
shall be deposited to the Series 2005 Account of the Redemption Funds pursuant to Section
506(a) hereof. Any remaining sale proceeds shall be deposited to the Series 2005 Account of the
Project Fund to be used for the purpose of constructing the sidewalk and crosswalk improvement
components of the 2005 Project.
(b) Moneys credited to the Project Fund shall be expended only as set forth in
this Section 502.
(c) Amounts in the Project Fund shall be expended and applied for the
payment or reimbursement of Project Costs; provided, however, expenditures related to
the sidewalk and crosswalk construction components of the 2005 Project shall be made
only from the property sale proceeds described in subsection (a) above. Disbursements
shall be made from the Project Fund on the basis of consecutively numbered Requisitions
in the form attached hereto as Exhibit B signed by an Authorized Representative.
Requisitions may be submitted to the Trustee by certified mail, first class mail or
facsimile transmission. If the Trustee deems that a Requisition submitted by the City is
sufficient pursuant to this Section 502, the amount requested thereunder shall be
disbursed in payment of the Project Costs set forth therein, or in reimbursement of such
Project Costs, within two (2) business days of the date of receipt of such Requisition by
the Trustee. Each Requisition shall specify:
(i) the name of the person or party to whom payment is to be made
and the purpose of the payment;
(ii) the amount to be paid thereunder;
I0-70831.5
21
(iii) that such amount has not been previously paid by the City and is
justly due and owing to the person(s) named therein as a proper payment or
reimbursement of a Project Cost; and
(iv) that no Event of Default exists under the Indenture and that, to the
knowledge of the Authorized Representative, no event has occurred and continues
which with notice or lapse of time or both would constitute an Event of Default
under the Indenture.
(d) The Trustee shall keep full and complete records concerning and reflecting
all disbursements from the Project Fund and shall file an accounting of said
disbursements if and when requested by the City. The Trustee shall only make payments
from the Project Fund pursuant to and in accordance with Requisitions. In making
payments from the Project Fund, the Trustee may rely on any Requisitions delivered to it
pursuant to this Section 502, and the Trustee shall be relieved of all liability relating to
payments made in accordance with such Requisitions and any supporting certificate or
certificates requested by the Trustee without physical inspection of the Project. Within
ninety (90) days following completion of the portion of the Project being financed with a
particular series of Bonds, the City shall deliver to the Trustee its Certificate stating that
the applicable portion of the Project is complete and the Trustee shall transfer the
remaining moneys in the Project Fund relating to such series of Bonds (save and except
moneys needed to satisfy unpaid Project Costs) to the appropriate Account of the
Redemption Fund for application to the retirement of Bonds by redemption or purchase,
as provided by Section 301(a) and (b) and Section 506 hereof. With respect to the 2005
Project, the delivery of the Trustee's Certificate and fund transfer obligation shall be
performed separately with respect to the completion of (i) the acquisition and demolition
component of the 2005 Project and (ii) the sidewalk and crosswalk construction
component of the 2005 Project.
(e) Upon the occurrence and continuance of an Event of Default or the
occurrence and continuance of an event which with notice or lapse of time or both would
constitute an Event of Default, amounts on deposit in the Project Fund shall not be
disbursed but shall instead be applied to the payment of Debt Service or the redemption
of the Bonds.
Section 503. Revenue Fund. (a) The Revenue Fund created and established as set forth
in Section 501(a)(ii) hereof is hereby assigned to the Trustee for the benefit of the Bondholders
as permitted by the Act. There shall be deposited to the credit of the Revenue Fund, as and when
received, all receipts derived from the Tax Increment.
(b)
Upon receipt, but in
no event later
than the last
day of each
month in
which Tax
Increment receipts are
deposited in
the Revenue
Fund, there
shall be
transferred
from the Revenue Fund, in
the following
order, the amounts set forth
below:
FIRST: For deposit to the appropriate Accounts of the Debt Service Reserve
Fund, an amount sufficient to cure any deficiency therein;
10-70831.5 22
SECOND:
For deposit to
the appropriate Accounts
of the Rebate Fund, an
amount sufficient to
satisfy the City's
obligations under Section
507 hereof;
THIRD: For payment to the Trustee and Paying Agent, the amount, if any,
necessary to pay or reimburse the Trustee and Paying Agent for fees and expenses related
to the Bonds; and
FOURTH: All remaining moneys will be transferred to the Redemption Fund
and shall be applied to call Bonds for redemption prior to maturity as provided in
Section 301(a) and (b) and Section 506 hereof; provided, however, that such transfers
shall be made to the various Accounts of the Redemption Fund in proportion to the
Outstanding principal amounts of the related series of Bonds and in such amounts as will
cause the redemption of Bonds in minimum authorized denominations.
(c) In the event there shall be insufficient moneys in the Revenue Fund in a
particular month to make the required transfers described above, then any deficiencies
shall be added to the required deposits during the next month.
Section 504. Bond Fund. (a) There shall be deposited to the credit of the appropriate
Accounts in the Bond Fund all moneys required to be transferred thereto pursuant to
Sections 505 and 506 of this Indenture and all other moneys received for said Fund.
(b) Moneys credited to the Bond Fund shall be expended only as set forth in
this Section 504.
(c) On each redemption date for any of the Series 2005 Bonds Outstanding,
the Trustee shall transfer out of moneys credited to Series 2005 Account of the Bond
Fund the amount required for the payment of the Accreted Amount of the Series 2005
Bonds being redeemed on such date unless the payment of such amount shall be
otherwise provided for, and such amount shall be applied to such payments.
(d) All payments made pursuant to this Section 504 shall be made in
immediately available funds.
Section 505. Cost of Issuance Fund. There shall be deposited to the credit of the Cost
of Issuance Fund all moneys received for said Fund pursuant to Section 208 hereof. The Trustee
shall pay those Costs of Issuance as directed by the City pursuant to a Certificate delivered on a
Closing Date. After all Costs of Issuance have been paid (and in any event not later than June 1,
2005 with respect to the Series 2005 Bonds), any remaining moneys in the Cost of Issuance Fund
shall be transferred to the Series 2005 Account of the Bond Fund.
Section 506. Redemption Fund. (a) There shall be deposited to the credit of Accounts
within the Redemption Fund all moneys required to be transferred thereto pursuant to
Section 502, 503 and 508 of this Indenture. In addition, the first $120,000 of proceeds realized
by the City upon the sale of all or any portion of the real property originally acquired with the
proceeds of the Series 2005 Bonds shall be transferred to the Series 2005 Account of the
Redemption Fund.
10-70831.5 23
(b) Moneys credited to the Redemption Fund shall be expended only as set
forth in this Section 506.
(c) Moneys in Accounts within the Redemption Fund shall be transferred to
corresponding Accounts within the Bond Fund at such times as may be necessary to
effectuate, on the first available date, redemptions of Bonds required by Section 301(a)
and (b) of this Indenture in minimum authorized principal amounts.
(d) The amounts accumulated in Accounts within the Redemption Fund, if so
directed by the City by means of a Certificate delivered to the Trustee, shall be applied by
the Trustee to the purchase of Bonds of the corresponding series which would otherwise
be redeemed pursuant to Section 301(a) and (b) and this Section 506 but for the
provisions of this subsection (d), at prices directed by the City not exceeding the
applicable redemption prices of the Bonds which would be redeemed but for the
operation of this sentence.
Section 507. Rebate Fund. (a) The Trustee shall establish and maintain, separate and
apart from any other Funds and Accounts established and maintained hereunder, a Fund to be
designated as the Rebate Fund, and a separate Account within the Rebate Fund with respect to
each series of Bonds issued hereunder, which Fund and Accounts are not pledged to the payment
of any Bonds. Subject to the transfer provisions provided in subsection (c) below, all moneys at
any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required
to satisfy the Rebate Amount (as defined in each Tax Regulatory Agreement), for payment to the
United States of America, and neither the City nor the owner of any Bond shall have any rights
in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be
governed by this Section 507, by Section 406, and by each Tax Regulatory Agreement (which
are incorporated herein by reference).
(b) As provided in Section 503(b) hereof, there shall be deposited into the
appropriate Account of the Rebate Fund the amount of all income or gain on moneys
deposited in any of the Funds and Accounts established by this Indenture which is
required to be rebated to the United States and is designated for deposit therein, as
calculated by the City to be owing to the United States pursuant to each Tax Regulatory
Agreement, which shall be delivered by the City concurrently with the issuance of a
series of Bonds.
(c) The Trustee, upon receipt of written instructions from the Mayor or the
Finance and Internal Services Director of the City, shall pay to the United States out of
amounts in the Rebate Fund such amounts as are required pursuant to each Tax
Regulatory Agreement.
(d) Any moneys remaining in an Account within the Rebate Fund after
payment to the United States, within sixty (60) days after the date on which the last Bond
of the corresponding series is redeemed, of one hundred percent (100%) of the Rebate
Amount as described in Section 148(f)(2) of the Code, shall be transferred to the Revenue
Fund.
10-70831.5 24
0
(e) The Trustee, as instructed by Certificate of the City, shall invest all
amounts held in the Rebate Fund in Investment Securities, subject to the restrictions set
forth in the applicable Tax Regulatory Agreements. Money shall not be transferred from
the Rebate Fund except as provided in subsection (c).
(f) Notwithstanding any other provision of this Indenture, the obligation to
remit the Rebate Amount to the United States and to comply with all other requirements
of this Section 507, Section 406 and each Tax Regulatory Agreement shall survive the
defeasance or payment in full of the Bonds.
Section 508. Debt Service Reserve Fund. As provided in Section 208 hereof, upon the
issuance of each series of Bonds there shall be deposited into the appropriate Account within the
Debt Service Reserve Fund, from the proceeds of such series of Bonds, an amount sufficient to
cause the amounts on deposit therein to be equal to the Reserve Requirement with respect to such
series of Bonds. Each Account within the Debt Service Reserve Fund shall be maintained in an
amount equal to the applicable Reserve Requirement. Moneys in Accounts in the Debt Service
Reserve Fund shall be used solely to pay the Accreted Value of the applicable series of Bonds
for which there are no available funds in the Bond Fund to make such payments, as the same
become due at maturity. If the amount in an Account within the Debt Service Reserve Fund is
reduced below the applicable Reserve Requirement, it shall be reimbursed in the amount of any
such deficiency as provided in Section 503. Notwithstanding the above provisions of this
Section 508, the amount on deposit in Accounts within the Debt Service Reserve Fund may be
used, together with other available funds, to provide for the payment at maturity or to redeem
prior to maturity all, but not less than all, of the corresponding series of Bonds. If an excess shall
exist at any time in an Account within the Debt Service Reserve Fund over and above the
applicable Reserve Requirement, such excess shall be transferred to the corresponding Account
of the Redemption Fund. The Trustee shall consider any excess that will result following
redemption in part pursuant to Section 301(a), (b) or (c), and shall transfer such excess to the
appropriate Account of the Redemption Fund so as to maximize the principal amount of Bonds
called for redemption.
Section 509. Cessation of Fund Deposits. When the moneys in the applicable
Accounts of the Bond Fund, the Debt Service Reserve Fund and the Redemption Fund shall be
and remain sufficient to pay in full the principal and interest or Accreted Value on all Bonds of
the corresponding series then Outstanding in accordance with Article VII of this Indenture,
together with the required fees and expenses to be paid or reimbursed to the Trustee and any
Paying Agent, the City shall have no further obligation to make further payments into said
Accounts.
Section 510. Separate Accounts Authorized. A Supplemental Indenture authorizing
the issuance of Additional Bonds may provide for the creation of separate Accounts within the
Bond Fund, Debt Service Reserve Fund, Redemption Fund, Project Fund, Costs of Issuance
Fund and Rebate Fund for such series of Bonds and such other Accounts as the City may direct.
If any Supplemental Indenture authorizing the issuance of Additional Bonds provides for
the establishment of separate Accounts for a series of Bonds, then such Supplemental Indenture
shall require that the Tax Increment receipts received by the City and deposited in the Revenue
10-70831.5 25
0
Fund shall be divided for deposit into Accounts within the Bond Fund and/or Redemption Fund
for each series of Bonds proportionately with the Outstanding principal amount of each series of
Bonds, to the end that the Bonds of each series shall be equally and ratable secured by the Tax
Increment receipts.
Any Supplemental Indenture authorizing the issuance of Additional Bonds may provide
that any proceeds of such series of Bonds and investment earnings thereon remaining after some
specified date, or after the construction of all facilities to be financed with the proceeds of such
series of Bonds, shall be applied to the redemption of such series of Bonds.
ARTICLE VI
INVESTMENTS
Section 601. Investment of Moneys. At the direction of the City or absent such
direction, the Trustee shall invest moneys in Funds or Accounts held by the Trustee in
Investment Securities with maturity or redemption dates consistent with the times at which said
moneys will be required for the purposes provided in this Indenture; provided, however, the
stated maturity dates of Investment Securities of Debt Service Reserve Fund moneys shall not
exceed years from the date of investment therein. Moneys in separate Funds or Accounts
may be commingled for the purpose of investment.
Investments in any Fund or Account shall be evaluated at least annually by the Trustee,
and in any event within thirty (30) days prior to the end of each Fiscal Year. The Trustee shall
report such determination of value to the City. For the purpose of determining the amount in any
Fund or Account, the City and the Trustee shall value all Investment Securities credited to such
Fund or Account at the price at which such Investment Securities are redeemable by the Holders
or owners thereof at their option if so redeemable, or, if not so redeemable, at the lesser of (i) the
cost of such Investment Securities minus the amortization of any premium or plus the
amortization of any discount thereon and (ii) the market value of such Investment Securities,
provided that Investment Securities credited to the Debt Service Reserve Fund, if not so
redeemable, shall be valued at the cost thereof minus the amortization of any premium or plus
the amortization of any discount thereon.
The Trustee shall sell or present for redemption any Investment Securities as necessary in
order to provide money for the purpose of making any payment required hereunder, and the
Trustee shall not be liable for any loss resulting from any such sale.
Section 602. Investment Earnings. Subject to the provisions of each Tax Regulatory
Agreement and Article V hereof, Investment Securities purchased with moneys held in or
attributable to any Fund or Account held by the Trustee under the provisions of this Indenture
shall be deemed at all times to be a part of such Fund or Account and the income or interest
earned, profits realized or losses suffered by a Fund or Account due to the investment thereof
shall be retained in, credited or charged, as the case may be, to such Fund or Account unless
otherwise provided pursuant to this Indenture.
10-70831.5 26
Section 603. Responsibility of Trustee. The Trustee shall not be responsible or liable
for any loss suffered in connection with any investment of moneys made by it at the direction of
the City.
ARTICLE VII
DISCHARGE OF LIEN
Section 701. Discharge of Lien. If the City shall pay or cause to be paid to the owners
of the Bonds the principal, premium, if any, and interest to become due thereon at the times and
in the manner stipulated therein, and if the City shall keep, perform and observe all and singular
the covenants and promises in the Bonds and in this Indenture expressed as to be kept, performed
and observed by it on its part, then these presents and the estate and rights hereby granted shall
cease, determine and be void, and thereupon the Trustee shall cancel and discharge the lien of
this Indenture, and execute and deliver to the City such instruments in writing as shall be
requisite to satisfy the lien hereof, and reconvey to the City the estate hereby conveyed, and
assign and deliver to the City any property at the time subject to the lien of this Indenture which
may then be in its possession, except moneys or Government Securities held by it for the
payment of the principal of and premium, if any, and interest on the Bonds.
Section 702. Bonds Deemed Paid. Any Bond shall be deemed to be paid within the
meaning of this Article VII when payment of the principal of and premium, if any, and interest
on such Bond (whether at maturity or upon redemption as provided in this Indenture, or
otherwise), either (i) shall have been made or caused to be made in accordance with the terms
thereof, or (ii) shall have been provided for by irrevocably depositing with the Trustee, in trust
and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such
payment or (2) Government Securities @rovided that such deposit will not affect the tax-exempt
status of the interest on any of the Bonds or cause any of the Bonds to be classified as "arbitrage
bonds" within the meaning of Section 148(a) of the Code, as reflected in an opinion of Bond
Counsel delivered to the Trustee), maturing as to principal and interest in such amount and at
such times as will provide sufficient moneys to make such payment, and all necessary and proper
fees, compensation and expenses of the Trustee and any Paying Agent pertaining to the Bonds
with respect to which such deposit is made shall have been paid or the payment thereof provided
for to the satisfaction of the Trustee and any said Paying Agent.
Section 703. Non -Presentment of Bonds. In the event any Bonds shall not be
presented for payment when the principal thereof becomes due, either at maturity or otherwise,
or at the date fixed for redemption thereof, if there shall have been deposited with the Trustee for
that purpose, or left in trust if previously so deposited, funds sufficient to pay the principal
thereof, and premium, if any, together with all interest unpaid and due thereon, to the due date
thereof, for the benefit of the Holder thereof, all liability of the City to the Holder thereof for the
payment of the principal thereof, premium if any, and interest thereon, shall forthwith cease,
determine and be completely discharged, and thereupon it shall be the duty of the Trustee to hold
such fund or funds, without liability for interest thereon, for the benefit of the Holder of such
Bonds, who shall thereafter be restricted exclusively to such fund or funds, for any claim of
whatever nature on his part under this Indenture or on, or with respect to, the Bonds.
10-70831.5 27
r 0
ARTICLE VIII
DEFAULT PROVISIONS AND REMEDIES
OF TRUSTEE AND BONDHOLDERS
Section 801. Events
of
Default. Each of the
following events shall constitute and is
referred to in this Indenture as
an
"Event of Default":
(a) Default in the due and punctual payment of any interest on any Bond;
(b) Default in the due and punctual payment of the principal of or premium, if
any, on any Bond, whether at the stated maturity thereof, or upon proceedings for
redemption thereof, or upon the maturity thereof by declaration;
(c) Default in the payment of any other amount required to be paid under this
Indenture or the performance or observance of any other of the covenants, agreements or
conditions contained in this Indenture, or in the Bonds issued hereunder, and continuance
thereof for a period of sixty (60) days after written notice specifying such failure and
requesting that it be remedied shall have been given to the City by the Trustee, which
may give such notice in its discretion and shall give such notice at the written request of
Bondholders of not less than 51% in aggregate principal amount of all Bonds then
Outstanding, unless the Trustee, or the Trustee and Holders of an aggregate principal
amount of Bonds not less than the aggregate principal amount of Bonds the Holders of
which requested such notice, as the case may be, shall agree in writing to an extension of
such period prior to its expiration; provided, however, if the failure stated in the notice
cannot be corrected within the applicable period, the Trustee will not unreasonably
withhold its consent to an extension of such time if corrective action is instituted by the
City within such period and is being diligently pursued;
(d) The filing of a petition in bankruptcy by or against the City under the
United States Bankruptcy Code or the commencement of a proceeding by or against the
City under any other law concerning insolvency, reorganization or bankruptcy; and
(e) If the State has limited or altered the rights of the City pursuant to the Act,
as in force on the date of this indenture, to fulfill the terms of any agreements made with
the Trustee or the Bondholders or in any way impaired the rights and remedies of the
Trustee or the Bondholders while any Bonds are Outstanding.
The term "default" as used in clauses (a), (b) and (c) above shall mean default by the City
in the performance or observance of any of the covenants, agreements or conditions on its part
contained in this Indenture or in the Bonds Outstanding hereunder, exclusive of any period of
grace required to constitute a default an "Event of Default" as hereinabove provided.
Section 802. Acceleration. Upon the occurrence of an Event of Default, the Trustee
may, and upon the written request of the Holders of not less than 51% in aggregate principal
amount of Bonds Outstanding hereunder shall, by notice in writing delivered to the City, declare
the principal of all Bonds then Outstanding, together with the interest accrued thereon,
10-70831.5 28
immediately due and payable, and such principal and interest shall thereupon become and be
immediately due and payable.
Section 803. Other Remedies; Rights of Bondholders. Upon the occurrence of an
Event of Default, the Trustee may, as an alternative, pursue any available remedy by suit at law
or in equity, including, without limitation, mandamus to enforce the payment of the principal of
and premium, if any, and interest on the Bonds then Outstanding hereunder.
If an Event of Default shall have occurred, and if it shall have been requested so to do by
the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding hereunder
and if it shall have been indemnified as provided in Section 901(l) hereof, the Trustee shall be
obligated to exercise such one or more of the rights and powers conferred upon it by this Section
803 as the Trustee, being advised by counsel, shall deem most expedient in the interests of the
Bondholders.
No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to
the Bondholders) is intended to be exclusive of any other remedy, but each and every such
remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now
or hereafter existing at law or in equity or by statute.
No delay or omission to exercise any right or power accruing upon any default or Event
of Default shall impair any such right or power or shall be construed to be a waiver of any such
default or Event of Default or acquiescence therein; and every such right and power may be
exercised from time to time and as often as may be deemed expedient.
No waiver of any default or Event of Default hereunder, whether by the Trustee or by the
Bondholders, shall extend to or shall affect any subsequent default or Event of Default or shall
impair any rights or remedies consequent thereon.
Section 804. Right of Bondholders to Direct Proceedings. Anything in this Indenture
to the contrary notwithstanding, the Holders of not less than 51% in aggregate principal amount
of Bonds Outstanding hereunder shall have the right, at any time, by an instrument or
instruments in writing executed and delivered to the Trustee, to direct the method and place of
conducting all proceedings to be taken in connection with the enforcement of the terms and
conditions of this Indenture, or for the appointment of a receiver or any other proceeding
hereunder; provided that such direction shall not be otherwise than in accordance with the
provisions of law and of this Indenture.
Section 805. Appointment of Receiver. Upon the occurrence of an Event of Default,
and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights
of the Trustee and of the Bondholders under this Indenture, the Trustee shall be entitled to the
appointment of a receiver or receivers of the Trust Estate and of the tolls, rents, revenues, issues,
earnings, income, products and profits thereof, including, without limitation, the Tax Increment
receipts, pending such proceedings with such powers as the court making such appointment shall
confer.
Section 806. Waiver. In
case of an Event of
Default
on its part, as
aforesaid, to the
extent that such rights may then
lawfully
be waived,
neither
the City nor
anyone claiming
10-70831.5 29
through the City or under the City shall or will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension or redemption laws now or thereafter in force, in order
to prevent or hinder the enforcement of this Indenture, but the City, for itself and all who may
claim through or under it, hereby waives, to the extent that it lawfully may do so, the benefit of
all such laws and all right of appraisement and redemption to which it may be entitled under the
laws of the State.
Section 807. Application of Moneys. Available moneys remaining after discharge of
costs, charges and liens prior to this Indenture shall be applied by the Trustee as follows:
(a) Unless the principal of all the Bonds shall have become or shall have been
declared due and payable, all such moneys shall be applied:
First: To the payment to the Persons entitled thereto of all
installments of interest then due, in the order of the maturity of the installments of
such interest, and, if the amount available shall not be sufficient to pay in full any
particular installment, then to the payment ratably, according to the amounts due
on such installment, to the Persons entitled thereto, without any discrimination or
privilege;
Second: To the payment to the Persons entitled thereto of the unpaid
principal of any of the Bonds which shall have become due (other than Bonds
called for redemption for the payment of which moneys are held pursuant to the
provisions of this Indenture), in the order of their due dates, with interest on such
Bonds from the respective dates upon which they become due, and, if the amount
available shall not be sufficient to pay in full Bonds due on any particular date,
together with such interest, then to the payment ratably, according to the amount
of principal due on such date, to the Persons entitled thereto without any
discrimination or privilege of any Bond over any other Bond and without
preference or priority of principal over interest or of interest over principal; and
Third: To the payment of the interest on and the principal of the
Bonds, and to the redemption of Bonds, all in accordance with the provisions of
Article V of this Indenture.
(b)
If the principal
of all the Bonds shall have become due or
shall have been
declared due
and payable, all
such moneys shall be applied first to the
payment of the
interest then
due and unpaid upon the Bonds, and then to the payment
of the principal
then due and
unpaid upon the
Bonds, in each case without preference or priority of any
Bond over any other Bond,
ratably, according to the amounts due
respectively for
principal and
interest, to the Persons entitled thereto.
(c) If the principal of all the Bonds shall have been declared due and payable,
and if such declaration shall thereafter have been rescinded and annulled under the
provisions of this Article VIII then, subject to the provisions of paragraph (b) of this
Section 807, in the event that the principal of all the Bonds shall later become due or be
10-70831.5 30
declared due and payable, the moneys shall be applied in accordance with the provisions
of paragraph (a) of this Section 807.
Whenever moneys are to be applied by the Trustee pursuant to the provisions of this
Section 807, such moneys shall be applied by it at such times, and from time to time, as it shall
determine, having due regard to the amount of such moneys available for application and the
likelihood of additional moneys becoming available for such application in the future. Whenever
the Trustee shall apply such funds, it shall fix the date (which shall be an interest payment date
unless it shall deem another date more suitable) upon which such application is to be made and
upon such date interest on the amounts of principal to be paid on such dates shall cease to accrue.
The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such
moneys and of the fixing of any such date and shall not be required to make payment to the
Holder of any Bond until such Bond shall be presented to the Trustee for appropriate
endorsement or for cancellation if fully paid.
Section 808. Remedies Vested in Trustee. All rights of action (including the right to
file proof of claim) under this Indenture or under any of the Bonds may be enforced by the
Trustee without the possession of any of the Bonds or the production thereof in any trial or other
proceeding relating thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its name as Trustee, without the necessity of joining as plaintiffs or defendants any
Bondholders hereby secured, and any recovery of judgment shall be for the equal benefit of the
Holders of all Outstanding Bonds.
Section 809. Rights and Remedies of Bondholders. No Bondholder shall have any
right to institute any suit, action or proceeding in equity or at law for the enforcement of this
Indenture or for the execution of any trust hereof or for the appointment of a receiver or any
other remedy hereunder, unless a default has occurred of which the Trustee has been notified as
provided in subsection (g) of Section 901, or of which by said subsection it is deemed to have
notice, nor unless such default shall have become an Event of Default and the Holders of not less
than 51% in aggregate principal amount of Bonds Outstanding hereunder shall have made
written request to the Trustee and shall have offered it reasonable opportunity either to proceed
to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its
own name, nor unless also they have offered to the Trustee indemnity as provided in
subsection (1) of Section 901, nor unless the Trustee shall thereafter fail or refuse to exercise the
powers hereinbefore granted, or to institute such action, suit or proceeding in its own name; and
such notification, request and offer of indemnity are hereby declared in every such case, at the
option of the Trustee, to be conditions precedent to the execution of the powers and trusts of this
Indenture, and to any action or cause of action for the enforcement of this Indenture or for the
appointment of a receiver or for any other remedy hereunder; it being understood and intended
that no one or more Holders of the Bonds shall have any right in any manner whatsoever to
affect, disturb or prejudice the lien of this Indenture by action of the Holder or Holders or to
enforce any right hereunder except in the manner herein provided, and that all proceedings at law
or in equity shall be instituted, held and maintained in the manner herein provided for the equal
benefit of the Holders of all Bonds Outstanding hereunder. Nothing in this Indenture contained
shall, however, affect or impair the right of any Bondholders to enforce the payment of the
principal of and premium, if any, and interest on any Bonds at and after the maturity thereof, or
the obligation of the City to pay the principal of and premium, if any, and interest on each of the
10-70831.5 31
Bonds issued hereunder to the respective Holders thereof at the time and place in said Bonds
expressed.
Section 810. Termination of Proceedings. In case the Trustee shall have proceeded to
enforce any right under this Indenture by the appointment of a receiver or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, then and in every such case the City and the Trustee shall be
restored to their former positions and rights hereunder with respect to the property herein
conveyed, and all rights, remedies and powers of the Trustee shall continue as if no such
proceedings had been taken, except to the extent the Trustee is legally bound by such adverse
determination.
Section 811. Waivers of Events of Default. The Trustee may, and upon the written
request of the Holders of not less than 51% in principal amount of all Bonds Outstanding
hereunder shall, waive any Event of Default hereunder and its consequences and rescind any
declaration of maturity of principal; provided, however, there shall not be waived any Event of
Default described in clause (a) or (b) of the first paragraph of Section 801 hereof, unless prior to
such waiver or rescission all arrears of principal (due otherwise than by declaration) and interest,
and all expenses of the Trustee and Paying Agent, shall have been paid or provided for. In case
of any such waiver or rescission the City, the Trustee and the Bondholders shall be restored to
their former positions and rights hereunder respectively, but no such waiver or rescission shall
extend to any subsequent or other default, or impair any right subsequent thereon.
ARTICLE IX
TRUSTEE AND PAYING AGENTS
Section 901. Acceptance of Trusts. The Trustee hereby accepts the trusts imposed
upon it by this Indenture and agrees to perform said trusts, but only upon and subject to the
following expressed terms and conditions:
(a) The Trustee may execute any of the trusts or powers hereof and perform
any duties required of it by or through attorneys, agents, receivers or employees, and
shall be entitled to advice of counsel concerning all matters of trusts hereof and its duties
hereunder, and may in all cases pay reasonable compensation to all such attorneys,
agents, receivers and employees as may reasonably be employed in connection with the
trusts hereof. Reimbursement of such compensation paid by the Trustee is subject to the
provisions of Section 902 hereof. The Trustee may act upon the opinion or advice of any
attorney, surveyor, engineer or accountant selected by it in the exercise of reasonable
care, or, if selected or retained by the City prior to the occurrence of a default of which
the Trustee has been notified as provided in subsection (g) of this Section 901, or of
which by said subsection the Trustee is deemed to have notice, approved by the Trustee
in the exercise of such care. The Trustee shall not be responsible for any loss or damage
resulting from an action or nonaction in accordance with any such opinion or advice.
(b)
The
Trustee shall not
be responsible for
any recital herein, or in the Bonds
(except in
respect
to the certificate
of authentication
of the Trustee endorsed on such
10-70831.5 32
Bonds), or for the validity of the execution by the City of this Indenture or of any
Supplemental Indentures or instruments of further assurance, or for the sufficiency of the
security for the Bonds issued hereunder or intended to be secured hereby, or for the value
of the title of the property herein conveyed or otherwise as to the maintenance of the
security hereof; except that in the event the Trustee enters into possession of a part or all
of the property herein conveyed pursuant to any provision of this Indenture, it shall use
due diligence in preserving such property; and the Trustee shall not be bound to ascertain
or inquire as to the performance or observance of any covenants, conditions and
agreements aforesaid as to the condition of the property herein conveyed.
(c)
The Trustee
may
become the owner of Bonds secured hereby with the
same rights
which it would
have
if not Trustee.
(d) The Trustee shall be protected in acting upon any notice, request, consent,
certificate, order, affidavit, letter, telegram or other paper or document believed by it, in
the exercise of reasonable care, to be genuine and correct and to have been signed or sent
by the proper person or persons. Any action taken by the Trustee pursuant to this
Indenture upon the request or authority or consent of the owner of any Bond secured
hereby, shall be conclusive and binding upon all future owners of the same Bond and
upon Bonds issued in exchange therefor or in place thereof.
(e) As to the existence or nonexistence of any fact or as to the sufficiency or
validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon
a Certificate of the City signed by its Mayor and attested by the City Clerk as sufficient
evidence of the facts therein contained and, prior to the occurrence of a default of which
it has been notified as provided in subsection (g) of this Section 901, or of which by that
subsection it is deemed to have notice, shall also be at liberty to accept a similar
certificate to the effect that any particular dealing, transaction, or action is necessary or
expedient, but may at its discretion, at the reasonable expense of the City, in every case
secure such further evidence as it may think necessary or advisable but shall in no case be
bound to secure the same. The Trustee may accept a certificate of the City Clerk under
the City's seal to the effect that a resolution or ordinance in the form therein set forth has
been adopted by the City as conclusive evidence that such resolution or ordinance has
been duly adopted, and is in full force and effect.
(f) The permissive right of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty of the Trustee, and the Trustee shall be
answerable only for its own gross negligence or willful misconduct.
(g) The Trustee shall not be required to take notice or be deemed to have
notice of any default hereunder (except for defaults under clause (a) or (b) of the first
paragraph of Section 801 hereof as to which the Trustee shall be deemed to have notice)
unless the Trustee shall be specifically notified in writing of such default by the City or
by the Holders of at least 10% in aggregate principal amount of Bonds Outstanding
hereunder, and all notices or other instruments required by this Indenture to be delivered
to the Trustee must, in order to be effective, be delivered to the principal corporate trust
10-70831.5 33
office of the
Trustee, and
in the absence of such
notice so delivered, the Trustee may
conclusively
assume there
is no such
default except
as aforesaid.
(h) [Reserved].
(i) At any and all reasonable times the Trustee, and its duly authorized agents,
attorneys, experts, engineers, accountants and representatives, shall have the right fully to
inspect any and all of the property herein conveyed, including all books, papers and
records of the City pertaining to the Tax Increment receipts and the Bonds, and to take
such memoranda from and in regard thereto as may be desired.
(j) The Trustee shall not be required to give any bond or surety in respect of
the execution of the said trusts and powers or otherwise in respect of the premises.
(k) Notwithstanding anything elsewhere in this Indenture contained, the
Trustee shall have the right, but shall not be required, to demand, in respect of the
authentication of any Bonds, the withdrawal of any cash, the release of any property, or
any action whatsoever within the purview of this Indenture, any showings, certificates,
opinions, appraisals or other information, or corporate action or evidence thereof, in
addition to that by the terms hereof required as a condition of such action by the Trustee,
deemed desirable for the purpose of establishing the right of the City to the authentication
of any Bonds, the withdrawal of any cash, the release of any property, or the taking of
any other action by the Trustee.
(1) Before taking such action hereunder, the Trustee may require that it be
furnished an indemnity bond satisfactory to it for the reimbursement to it of all expenses
to which it may be put and to protect it against all liability, except liability which is
adjudicated to have resulted from the gross negligence or willful misconduct of the
Trustee, by reason of any action so taken by the Trustee.
Section 902. Fees, Charges and Expenses of Trustee and Paying Agents; Trustee's
Prior Lien. (a) Subject to subsection (b) of this Section 902, the City shall, from moneys
lawfully available therefor, pay to the Trustee and any Paying Agent reasonable compensation
for all services performed hereunder and also all reasonable expenses, charges and other
disbursements and those of their attorneys, agents and employees incurred in and about the
administration and execution of the trusts hereby created and the performance of the powers and
duties hereunder and, to the extent permitted by law and from moneys lawfully available
therefor, shall indemnify and save the Trustee harmless against any liabilities which it may incur
in the exercise and performance of its powers and duties hereunder. With respect to the
Series 2005 Bonds, the Trustee's initial authentication fee shall be $ and the annual
administration fee of the Trustee shall be up to, but not exceeding, $ . If the City shall fail
to make any payment required by this subsection (a), the Trustee may make such payment from
any moneys in its possession under the provisions of this Indenture and shall be entitled to a
preference therefor over any of the Bonds Outstanding hereunder. The City shall not be required
to indemnify the Trustee against any liabilities which the Trustee may incur as a result of
negligent or wrongful acts or omissions of the Trustee.
10-70831.5 34
S 0
(b) The City shall pay to the Trustee compensation for its services as described in
Section 902(a), provided that such compensation, together with all expenses, charges and other
disbursements of the Trustee and its attorneys, agents and employees and all reimbursements to
the Trustee for all costs and other disbursements as described in Section 901(a) hereof shall not
exceed $ annually (not including the initial authentication fee) without the prior written
approval of the City, which approval shall not be unreasonably withheld. If the Trustee wishes
to consult with or retain counsel for any purpose hereunder whose anticipated fees, together with
all other compensation, disbursements and reimbursements of the Trustee and its attorneys,
agents and employees to be paid by the City hereunder, shall exceed $ annually, then
such counsel shall have to be acceptable to the City and such fees shall have to be approved by
the City as described above.
Section 903. Additional Duties of Trustee. (a) In addition to the other duties of the
Trustee described in this Indenture, it shall be the duty of the Trustee, on or before the tenth day
of each month after the month in which the Series 2005 Bonds are delivered, to file with the City
a statement setting forth in respect of the preceding calendar month:
(i) the amount withdrawn or transferred by it and the amount deposited with
it on account of each Fund and Account held by it under the provisions of this Indenture;
(ii) the amount on deposit with it at the end of such month to the credit of each
such Fund and Account;
(iii) a brief description (cost and market value) of all obligations held by it as
an investment of moneys in each such Fund and Account;
(iv) the amount applied to the purchase or redemption of Bonds under the
provisions of this Indenture and a description of the Bonds or portions of Bonds so
purchased or redeemed; and
(v) any other information that the City may reasonably request, including, but
not limited to, submittal of monthly statements of activity relating to the Bonds. Such
information shall also be provided at the direction of the City to one additional designated
entity.
All records and files pertaining to each such Fund and Account in the custody of the
Trustee hereunder shall be open at all reasonable times to the inspection of the City and its
agents and representatives, and the City may make copies thereof.
(b) The Trustee additionally shall be responsible for the preparation and timely
distribution of any and all forms and reports required by law to all Bondholders, the State and the
Internal Revenue Service in connection with the payment to the Bondholders of interest on the
Bonds.
Section 904. Notice to Bondholders of Default. If a default occurs of which the
Trustee is pursuant to the provisions of Section 901(g) deemed to have or is given notice, the
Trustee shall promptly make demand upon the City and give notice to each owner of Bonds then
Outstanding.
10-70831.5 35
• 0
Section 905. Intervention by Trustee. In any judicial proceeding to which the City is a
party and which in the opinion of the Trustee and its counsel has a substantial bearing on the
interests of Holders of Bonds issued hereunder, the Trustee may intervene on behalf of
Bondholders and shall do so if requested in writing by the Holders of at least 51% of the
aggregate principal amount of Bonds Outstanding hereunder. The rights and obligations of the
Trustee under this Section 905 are subject to the approval of the court having jurisdiction in the
premises.
Section 906. Merger or Consolidation of Trustee. Any bank or trust company to
which the Trustee may be merged, or with which it may be consolidated, or to which it may sell
or transfer its trust business and assets as a whole or substantially as a whole, or any bank or trust
company resulting from any such sale, merger, consolidation or transfer to which it is a party,
ipso facto, shall be and become successor trustee hereunder and vested with all of the title to the
whole property or Trust Estate and all the trusts, powers, discretions, immunities, privileges and
all other matters as was its predecessor, without the execution or filing of any instrument or any
further act, deed, or conveyance on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that such successor trustee shall have capital and
surplus of at least $40 million.
Section 907. Resignation by Trustee. The Trustee and any successor trustee may at
any time resign from the trusts hereby created by giving written notice to the City and the
Bondholders, and such resignation shall take effect upon the appointment of a successor trustee
by the Bondholders or by the City. Such notice may be served personally or sent by registered
mail (to the City) or first class mail (to the Bondholders).
Section 908. Removal of Trustee. The Trustee may be removed at any time by an
instrument or concurrent instruments in writing delivered to the Trustee and to the City, and
signed by the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding
hereunder.
Section 909. Appointment of Successor Trustee. In case the Trustee hereunder shall
resign or be removed, or be dissolved, or shall be in course of dissolution or liquidation, or
otherwise become incapable of acting hereunder, or in case it shall be taken under the control of
any public officer or officers, or of a receiver appointed by the court, a successor may be
appointed by the Holders of not less than 51% in aggregate principal amount of Bonds
Outstanding hereunder, by an instrument or concurrent instruments in writing signed by such
Holders, or by their attorneys in fact, duly authorized; provided, nevertheless, that in case of such
vacancy the City by an instrument executed and signed by its Mayor and attested by its City
Recorder/Treasurer under its seal, shall appoint a temporary trustee to fill such vacancy until a
successor trustee shall be appointed by the Bondholders in the manner above provided. Any
such temporary trustee appointed by the City shall immediately and without further act be
superseded by the trustee appointed by such Bondholders. Every such temporary trustee and
every such successor trustee shall be a trust company or bank in good standing, having capital
and surplus of not less than $40 million.
Section 910. Concerning Any Successor Trustee. Every successor or temporary
trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to
10-70831.5 36
the City an instrument in writing accepting such appointment hereunder, and thereupon such
successor or temporary trustee, without any further act or conveyance, shall become fully vested
with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessor;
but such predecessor shall, nevertheless, on the written request of the City or of its successor
trustee, execute and deliver an instrument transferring to such successor all the estate, properties,
rights, powers and trusts of such predecessor hereunder; and every predecessor trustee shall
deliver all securities, moneys and any other property held by it as trustee hereunder to its
successor. Should any instrument in writing from the City be required by any successor trustee
for more fully and certainly vesting in such successor the estates, rights, powers and duties
hereby vested or intended to be vested in the predecessor trustee, any and all such instruments in
writing shall, on request, be executed, acknowledged, and delivered by the City.
Section 911. Reliance Upon Instruments. The resolutions, opinions, certificates and
other instruments provided for in this Indenture may be accepted and relied upon by the Trustee
as conclusive evidence of the facts and conclusions stated therein and shall be full warrant,
protection and authority to the Trustee for its actions taken hereunder.
Section 912. Appointment of Co -Trustee. The City and the Trustee shall have power
to appoint, and upon the request of the Trustee the City shall for such purpose join with the
Trustee in the execution of all instruments necessary or proper to appoint, another corporation or
one or more Persons approved by the Trustee, either to act as co -trustee or co -trustees jointly
with the Trustee of all or any of the property subject to the lien hereof, with such powers as may
be provided in the instrument of appointment and to vest in such corporation or Person or
Persons as such co -trustee any property, title, right or power deemed necessary or desirable. In
the event that the City shall not have joined in such appointment within fifteen (15) days after the
receipt by it of a request so to do, the Trustee alone shall have the power to make such
appointment. Should any deed, conveyance or instrument in writing from the City be required by
the co -trustee so appointed for more fully and certainly vesting in and confirming to such co -
trustee such properties, rights, powers, trusts, duties and obligations, any and all such deeds,
conveyances and instruments in writing shall, on request, be executed, acknowledged and
delivered by the City. Every such co -trustee shall, to the extent permitted by law, be appointed
subject to the following provisions and conditions, namely:
(1) The Bonds shall be authenticated and delivered, and all powers, duties,
obligations and rights conferred upon the Trustee in respect of the custody of all money
and securities pledged or deposited hereunder, shall be exercised solely by the Trustee;
and
(2) The Trustee, at any time by an instrument in writing, may remove any
such separate Trustee or co -trustee.
Every instrument, other than this Indenture, appointing any such co -trustee shall refer to
this Indenture and the conditions of this Article IX expressed, and upon the acceptance in writing
by such co -trustee, the co -trustee shall be vested with the estate or property specified in such
instrument, jointly with the Trustee (except insofar as local law makes it necessary for any
separate trustee to act alone), subject to all the trusts, conditions and provisions of this Indenture.
Any such co -trustee may at any time, by an instrument in writing, constitute the Trustee as the
10-70831.5 37
co -trustee's agent or attorney -in -fact with full power and authority, to the extent authorized by
law, to do all acts and things and exercise all discretion authorized or permitted by the co -trustee,
for and on behalf of the co -trustee and in the co -trustee's name. In case any co -trustee shall die,
become incapable of acting, resign or be removed, all the estate, properties, rights, powers,
trusts, duties and obligations of said co -trustee shall vest in and be exercised by the Trustee until
the appointment of a new trustee or a successor to such co -trustee.
Section 913. Designation and Succession of Paying Agents. The Trustee and any
other banks or trust companies designated as Paying Agent or Paying Agents in any
Supplemental Indenture or in an instrument appointing a successor Trustee shall be the Paying
Agent or Paying Agents for the Bonds.
Any bank or trust company with which or into which any Paying Agent may be merged
or consolidated, or to which the assets and business of such Paying Agent may be sold, shall be
deemed the successor of such Paying Agent for the purposes of this Indenture. If the position of
Paying Agent shall become vacant for any reason, the City shall, within thirty (30) days
thereafter, appoint such bank or trust company as shall be specified by the City as such Paying
Agent to fill such vacancy; provided, however, that, if the City shall fail to appoint such Paying
Agent within said period, the Trustee shall make such appointment.
The Paying Agents shall enjoy the same protective provisions in the performance of its
duties hereunder as are specified in Section 901 hereof with respect to the Trustee insofar as such
provisions may be applicable.
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 1001. Supplemental Indentures Not Requiring Consent of Bondholders.
The City and the Trustee may, from time to time and at any time, without the consent of or
notice to the Bondholders, enter into Supplemental Indentures as follows:
(a) to cure any formal defect, omission, inconsistency or ambiguity in this
Indenture;
(b) to grant to or confer or impose upon the Trustee for the benefit of the
Bondholders any additional rights, remedies, powers, authority, security, liabilities or
duties which may lawfully be granted, conferred or imposed and which are not contrary
to or inconsistent with this Indenture as theretofore in effect, provided that no such
additional liabilities or duties shall be imposed upon the Trustee without its consent;
(c) to add to the covenants and agreements of, and limitations and restrictions
upon, the City in this Indenture other covenants, agreements, limitations and restrictions
to be observed by the City which are not contrary to or inconsistent with this Indenture as
theretofore in effect;
10-708315 38
0► •
(d) to confirm, as further assurance, any pledge under, and the subjection to
any claim, lien or pledge created or to be created by, this Indenture, of the Trust Estate or
of any other moneys, securities or funds;
(e) to comply with the requirements of the Trust Indenture Act of 1939, as
from time to time amended;
(f) to authorize the issuance and sale of one or more series of Additional
Bonds;
(g) to make such additions, deletions or modifications as may be necessary to
assure compliance with Section 148(f) of the Code relating to required rebate to the
United States or otherwise as may be necessary to assure exemption from federal income
taxation of interest on the Bonds; or
(h) to modify, alter, amend or supplement this Indenture in any other respect
which is not materially adverse to the Bondholders and which does not involve a change
described in clause (a), (b), (c), (d), (e) or (f) of Section 1002 hereof and which, in the
judgment of the Trustee, is not to the prejudice of the Trustee.
Section 1002. Supplemental Indentures Requiring Consent of Bondholders. Subject
to the terms and provisions contained in this Section 1002, and not otherwise, the Holders of not
less than 2/3 in aggregate principal amount of the Bonds then Outstanding shall have the right,
from time to time, anything contained in this Indenture to the contrary notwithstanding, to
consent to and approve the execution by the City and the Trustee of such indenture or indentures
supplemental hereto as shall be deemed necessary and desirable by the City for the purpose of
modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or
provisions contained in this Indenture or in any Supplemental Indenture; provided, however, that
nothing herein contained shall permit or be construed as permitting (a) an extension of the
maturity (or mandatory redemption date) of the principal of or the interest on any Bond issued
hereunder, or (b) a reduction in the principal amount of or redemption premium or rate of interest
on any Bond issued hereunder, or (c) the creation of any lien on the Trust Estate or any part
thereof, except as hereinbefore expressly permitted, or (d) a privilege or priority of any Bond or
Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the
Bonds required for consent to such Supplemental Indenture, or (f) depriving the Holder of any
Bond then Outstanding of the lien hereby created on the Trust Estate. Nothing herein contained,
however, shall be construed as making necessary the approval of Bondholders of the execution
of any Supplemental Indenture as provided in Section 1001 of this Article X.
If, at any time the City shall request the Trustee to enter into any Supplemental Indenture
for any of the purposes of this Section, the Trustee shall, at the expense of the City, cause notice
of the proposed execution of such Supplemental Indenture to be mailed by first class mail to each
registered owner of the Bonds. Such notice shall briefly set forth the nature of the proposed
Supplemental Indenture and shall state that copies thereof are on file at the principal office of the
Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to any
liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall
not affect the validity of such Supplemental Indenture when consented to and approved as
10-70831.5 39
provided in this Section 1002. If the Holders of not less than 2/3 in aggregate principal amount
of the Bonds Outstanding at the time of the execution of any such Supplemental Indenture shall
have consented to and approved the execution thereof as herein provided; no Holder of any Bond
shall have any right to object to any of the terms and provisions contained therein, or the
operation thereof, or in any manner to question the propriety of the execution thereof, or to
enjoin or restrain the Trustee or the City from executing the same or from taking any action
pursuant to the provisions thereof.
Section 1003. Effect of Supplemental Indentures. Upon the execution of any
Supplemental Indenture entered into pursuant to Section 1001 or 1002 hereof, this Indenture
shall be deemed to be modified and amended in accordance therewith.
ARTICLE XI
MISCELLANEOUS
Section 1101. Consents, etc. of Bondholders. Any request, direction, objection or
other instrument required by this Indenture to be signed and executed by the Bondholders may
be in any number of concurrent writings of similar tenor and may be signed or executed by such
Bondholders in person or by agent appointed in writing. Proof of the execution of any such
request, direction, objection or other instrument or of the writing appointing any such agent and
of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the
purposes of this Indenture, and shall be conclusive in favor of the Trustee with regard to any
action taken by it under such request or other instrument, namely:
(a) The fact and date of the execution by any Person of any such writing may
be proved by the certificate of any officer in any jurisdiction who by law has power to
take acknowledgments within such jurisdiction that the Person signing such writing
acknowledged before such officer the execution thereof, or by an affidavit of any witness
to such execution.
(b) The fact of ownership of Bonds and the amount or amounts, numbers, and
other identification of such Bonds, and the date of holding the same shall be proved by
the registration books of the City maintained by the Trustee, as Bond registrar.
Section 1102. Notices. Except as otherwise provided in this Indenture, all notices,
certificates or other communications shall be sufficiently given and shall be deemed given when
mailed by registered or certified mail, postage prepaid, to the City or the Trustee. Notices,
certificates or other communications shall be sent to the following addresses:
City: City of Fayetteville
113 West Mountain
Fayetteville, Arkansas 72701
Attention: Mayor
10-70831.5 40
S
Trustee:
Arkansas
Attention:
Either of
the foregoing may,
by notice given hereunder, designate any
further
or different
addresses
to which subsequent
notices, certificates or other communications
shall
be
sent.
Section 1103. Limitation of Rights. With the exception of rights herein expressly
conferred, nothing expressed or mentioned in or to be implied from this Indenture, or the Bonds
issued hereunder, is intended or shall be construed to give to any person or company other than
the parties hereto, and the Holders of the Bonds secured by this Indenture any legal or equitable
rights, remedy, or claim under or in respect to this Indenture or any covenants, conditions, and
provisions hereof being intended to be and being for the sole exclusive benefit of the parties
hereto and the Holders of the Bonds hereby secured as herein provided.
Section 1104. Severability. If any provisions of this Indenture shall be held or deemed
to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any
provisions or any constitution or statute or rule of public policy, or for any other reason, such
circumstances shall not have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to any extent whatever.
The invalidity of
any one or
more phrases, sentences,
clauses or paragraphs in this
Indenture contained shall
not affect the
remaining portions of this
Indenture or any part thereof.
Section 1105. Applicable Provisions of Law. This Indenture shall be considered to
have been executed in the State of Arkansas and it is the intention of the parties that the
substantive law of the State of Arkansas govern as to all questions of interpretation, validity and
effect.
Section 1106. Counterparts. This Indenture may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same
instrument.
Section 1107. Successors and Assigns. All the covenants, stipulations, provisions,
agreements, rights, remedies and claims of the parties hereto in this Indenture contained shall
bind and inure to the benefit of their successors and assigns.
Section 1108. Captions. The captions or headings in this Indenture are for convenience
only and in no way define, limit or describe the scope or intent of any provisions or sections of
this Indenture.
Section 1109. Photocopies and Reproductions. A photocopy or other reproduction of
this Indenture may be filed as a financing statement pursuant to the Uniform Commercial Code,
although the signatures of the City and the Trustee in such reproduction are not original manual
signatures.
10-70831.5 41
L�
•
Section 1110. Bonds Owned by the City. In determining whether Bondholders of the
requisite aggregate principal amount of the Bonds have concurred in any direction, consent or
waiver under this Indenture, Bonds which are owned by the City shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination, except that, for the
purpose of determining whether the Trustee shall be protected in relying on any such direction,
consent or waiver, only Bonds which the Trustee knows are so owned shall be so disregarded.
Bonds so owned which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Bonds and that the pledgee is not the City. In case of a dispute as to such right, any
decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10-70831.5 42
IN WITNESS WHEREOF, the City has caused these presents to be signed in its name
and behalf by its Mayor and its corporate seal to be hereunto affixed and attested by its City
Clerk, and, to evidence its acceptance of the trust hereby created, the Trustee has caused these
presents to be signed in its behalf by its duly authorized officers and its corporate seal to be
hereto affixed.
CITY OF FAYETTEVILLE, ARKANSAS
By:,
Mayor
ATTEST:
City Clerk
(SEAL)
as Trustee
By:
Title:
ATTEST:
By:_
Title:
(SEAL)
10-70831.5 43
ACKNOWLEDGMENT
STATE OF ARKANSAS )
) ss.
COUNTY OF WASHINGTON )
Before me a Notary Public, duly commissioned, qualified and acting within and for the
State and county aforesaid, appeared in person the within named Dan Coody and Sondra Smith,
Mayor and City Clerk, respectively, of the City of Fayetteville, Arkansas, to me personally
known, who stated that they were duly authorized in their respective capacities to execute the
foregoing instrument for and in the name of the City, and further stated and acknowledged that
they had signed, executed and delivered the foregoing instrument for the consideration, uses and
purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this _ day
of April, 2005.
Notary Public
My Commission expires:
(SEAL)
[ACKNOWLEDGEMENT TO TRUST INDENTURE]
10-70831.5 44
• 0
ACKNOWLEDGMENT
STATE OF ARKANSAS )
ss.
COUNTY OF )
Before me a Notary Public, duly commissioned, qualified and acting within and for the
State and county aforesaid, appeared in person the within named and
the and the , respectively, of
, to me personally known, who stated that they were duly
authorized in their respective capacities to execute the foregoing instrument for and in the name
of the [Bank], and further stated and acknowledged that they had signed, executed and delivered
the foregoing instrument for the consideration, uses and purposes therein mentioned and set
forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this _ day
of April, 2005.
Notary Public
My Commission expires:
(SEAL)
[ACKNOWLEDGEMENT TO TRUST INDENTURE]
10-70831.5 45
•
EXHIBIT A TO TRUST INDENTURE
Form of Series 2005 Bond
Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in
such other name as is requested by the authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized representative of
DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is
wrongful inasmuch as the registered owner hereof Cede & Co., has an interest herein.
REGISTERED
No. R05 -
REGISTERED
UNITED STATES OF AMERICA
STATE OF ARKANSAS
CITY OF FAYETTEVILLE, ARKANSAS
TAX INCREMENT INTEREST ACCRETION BOND
(HIGHWAY 71 EAST SQUARE REDEVELOPMENT DISTRICT NO. 1 PROJECT)
SERIES 2005
Interest Rate: %
Date of Bond: April _, 2005
Registered Owner: CEDE & CO.
Principal Amount:
KNOW ALL MEN BY THESE PRESENTS:
Maturity Date: August 1, 2029
DOLLARS
That the City of Fayetteville, Arkansas, a municipality and political subdivision
organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value
received, hereby promises to pay to the Registered Owner shown above, or registered assigns, on
the Maturity Date shown above, but solely from the source and in the manner hereinafter set
forth, the Principal Amount shown above and the interest accreted thereon. This bond will
accrete interest from the date of its issuance through maturity or earlier redemption at the Interest
Rate per annum shown above, such interest to compound semiannually on February 1 and
August 1 of each year, commencing on August 1, 2005, as set forth in Exhibit C to the Indenture
identified and defined below. The Accreted Value (as defined in the Indenture) of this bond and
any applicable redemption premium is payable in lawful money of the United States of America
upon the presentation and surrender hereof at the principal corporate trust office of
, , Arkansas, or its successor or successors, as trustee (the
"Trustee"). Notwithstanding the foregoing, so long as Cede & Co. or another nominee of The
Depository Trust Company is the registered owner of this bond, payment of the Accreted Value
hereof and any redemption premium shall be made by wire transfer of immediately available
funds.
10-70831.5 A-1
• i
This bond, designated "Tax Increment Interest Accretion Bond (Highway 71 East Square
Redevelopment District No. I Project), Series 2005", is one of a series of bonds aggregating
Dollars (S ) (the "Series 2005 Bonds"). The
Series 2005 Bonds are being issued for the purpose of financing the costs of acquiring certain
real property within the District (as defined below) and demolishing existing structures thereon,
and the construction of certain sidewalk and crosswalk improvements within the District (the
"Project"), funding a debt service reserve, and paying the costs of issuance of the Series 2005
Bonds.
The Series 2005 Bonds are issued under and are secured by and entitled to the protection
of a Trust Indenture dated as of April 15, 2005 (the "Indenture"), by and between the City and
the Trustee, which Indenture is available for inspection at the principal corporate trust office of
the Trustee. Reference is hereby made to the Indenture and to all indentures supplemental
thereto for the provisions, among others, with respect to the nature and extent of the security, the
rights, duties and obligations of the City, the Trustee and the owners of the Series 2005 Bonds,
and the terms upon which the Series 2005 Bonds are issued and secured.
The Series 2005 Bonds are issued pursuant to and in full compliance with the
Constitution and laws of the State of Arkansas, including particularly Amendment No. 78 to the
Constitution of Arkansas, as implemented by Act 1197 of 2001, codified as Arkansas Code
Annotated (2003 Supp.) §§14-168-301 et seq. (as from time to time amended, the "Act"), and
Ordinance No. of the City adopted [March 15], 2005, which ordinance authorized the
execution and delivery of the Indenture and the issuance of the Series 2005 Bonds. In
accordance with the Act, the City has pledged all receipts from the ad valorem tax increment (as
defined in the Act, the "Tax Increment") relating to its Highway 71 East Square Redevelopment
District No. 1 in order to provide funds for the repayment of the Series 2005 Bonds.
The pledge of the receipts of the Tax Increment presently secure payment of the Series
2005 Bonds only, but such Tax Increment receipts may additionally be pledged to secure the
payment of Additional Bonds issued under the provisions of the Indenture. The Indenture
provides that the City may hereafter issue Additional Bonds from time to time under certain
terms and conditions contained in the Indenture and, if issued or incurred, such Additional Bonds
will rank on a parity of security with the Series 2005 Bonds and be equally and ratably secured
by and entitled to the protection of the Indenture.
The Series 2005 Bonds are not general obligations of the City, but are special obligations
secured by an irrevocable pledge of and lien on the Tax Increment receipts, as more particularly
described in the Indenture. In no event shall the Series 2005 Bonds constitute an indebtedness of
the City within the meaning of any constitutional or statutory limitation or a pledge of the faith
and credit of the City.
The holder of this Series 2005 Bond shall have no right to enforce the provisions of the
Indenture or to institute action to enforce the covenants therein, or to take any action with respect
to any event of default under the Indenture, or to institute, appear in or defend any suit or other
proceeding with respect thereto, except as provided in the Indenture. In certain events, on the
conditions, in the manner and with the effect set forth in the Indenture, the principal of all the
Series 2005 Bonds and Additional Bonds, if any, issued under the Indenture and then outstanding
10-70831.5 A-2
0
may be declared and may become due and payable before the stated maturity thereof, together
with accrued or accreted interest thereon. Modifications or alterations of the Indenture, or of any
indenture supplemental thereto, may be made only to the extent and in the circumstances
permitted by the Indenture.
The Series 2005 Bonds shall be redeemed prior to maturity on any date, in whole or in
part, by lot in such manner as the Trustee shall determine, at a redemption price equal to 100% of
the Accreted Value thereof as of the date of redemption, (i) from moneys in the Series 2005
Account of the Project Fund in excess of the amount needed to complete the Project, and (ii)
from the first $120,000 of proceeds realized by the City upon any sale of the real property
originally acquired with the proceeds of the Series 2005 Bonds.
The Series 2005 Bonds shall be redeemed prior to maturity on each February 1, in whole or
in part (in minimum $5,000 denominations), by lot in such manner as the Trustee shall determine, at
a redemption price equal to 100% of the Accreted Value thereof as of the date of redemption, to the
extent of Tax Increment receipts and investment earnings and permitted reductions in the balance of
the Debt Service Reserve Fund deposited in the Series 2005 Account of the Redemption Fund. On
a monthly basis, following any required transfers of Tax Increment receipts to satisfy deficiencies
in the Debt Service Reserve Fund or the Rebate Fund and to pay Trustee fees and expenses, the
remaining balance of such Tax Increment receipts shall be transferred to the various accounts of
the Redemption Fund in proportion to the outstanding principal amounts of the related series of
Bonds.
On and after February 1, 2010, the Series 2005 Bonds shall be subject to redemption
prior to maturity at the option of the City, in whole or in part on any date (in minimum $5,000
denominations), by lot in such manner as the Trustee shall determine, from funds from any
source, at a redemption price equal to 100% of the Accreted Value thereof as of the date of
redemption.
Upon any determination that the Tax Increment is to be calculated by including [all of] [any
portion of] the 25 mills described in Amendment 74 to the Constitution of the State of Arkansas
within the "applicable ad valorem rate" (as defined in the Act), which determination is evidenced by
(i) an opinion of the Arkansas Attorney General, (ii) a decision by an Arkansas court of competent
jurisdiction, (iii) legislation enacted by the Arkansas General Assembly, or (iv) an amendment to
the Constitution of the State of Arkansas, then the Series 2005 Bonds shall be subject to redemption
prior to maturity at the option of the City, in whole on any date, from funds from any source, at a
redemption price equal to 101% of the principal amount of the Outstanding Series 2005 Bonds plus
the accreted interest thereon as of the date of redemption.
In selecting Series 2005 Bonds for redemption prior to maturity, in the case any
outstanding Series 2005 Bond is in a denomination greater than $5,000, each $5,000 of face
value of such Series 2005 Bond shall be treated as a separate Series 2005 Bond of the
denomination of $5,000.
In the event any of the Series 2005 Bonds or portions thereof are called for redemption,
notice thereof shall be given by the Trustee by first class mail to the registered owner of each
such Series 2005 Bond addressed to such registered owner at his registered address and placed in
10-70831.5 A-3
the mails not less than thirty (30) nor more than sixty (60) days prior to the date fixed for
redemption; provided, however, that failure to give such notice by mailing, or any defect therein,
shall not affect the validity of the proceedings for the redemption of any Series 2005 Bond with
respect to which no such failure or defect has occurred. Each notice shall identify the Series
2005 Bonds or portions thereof being called, and the date on which they shall be presented for
payment. After the date specified in such call notice, the Series 2005 Bond or Bonds so called
for redemption will cease to bear interest provided funds sufficient for their redemption have
been deposited with the Trustee, and, except for the purpose of payment, shall no longer be
protected by the Indenture and shall not be deemed to be outstanding under the provisions of the
Indenture.
This Series 2005 Bond may be transferred on the books of registration kept by the
Trustee by the registered owner or by his duly authorized attorney upon surrender hereof,
together with a written instrument of transfer duly executed by the registered owner or his duly
authorized attorney.
The Series 2005 Bonds are issuable as registered bonds without coupons in
denominations of $5,000 and integrals of $5,000 in excess thereof. Subject to the limitations and
upon payment of the charges provided in the Indenture, Series 2005 Bonds may be exchanged
for a like aggregate principal amount of Series 2005 Bonds of other authorized denominations.
No recourse shall be had for the payment of the principal of or premium, if any, or
interest on any of the Series 2005 Bonds or for any claim based thereon or upon any obligation,
covenant or agreement contained in the Series 2005 Bonds or the Indenture against any past,
present or future alderman, officer or employee of the City, or any successor, as such, either
directly or through the City or any successor of the City, under any rule of law or equity, statute
or constitution or by the enforcement of any assessment or penalty or otherwise, and all such
liability of any such alderman, officer or employee as such is hereby expressly waived and
released as a condition of and consideration for the issuance of any of the Series 2005 Bonds.
This Series 2005 Bond is issued with the intent that the laws of the State of Arkansas will
govern its construction.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and
things required to exist, happen and be performed precedent to and in the issuance of the Series
2005 Bonds do exist, have happened and have been performed in due time, form and manner as
required by law; that the indebtedness represented by the Series 2005 Bonds, together with all
obligations of the City, does not exceed any constitutional or statutory limitation; and that the
revenues pledged to the payment of the principal of and premium, if any, and interest on the
Series 2005 Bonds as the same become due and payable are expected to be sufficient in amount
for that purpose.
This Series 2005 Bond shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture until the Certificate of Authentication
hereon shall have been signed by the Trustee.
10-70831.5 A-4
IN WITNESS WHEREOF, the City of Fayetteville, Arkansas has caused this Series 2005
Bond to be executed by its Mayor and City Clerk, thereunto duly authorized (by their manual or
facsimile signatures), and its corporate seal to be affixed or imprinted hereon, all as of the date
hereof shown above.
CITY OF FAYETTEVILLE, ARKANSAS
Mayor
ATTEST:
By:
City Clerk
(SEAL)
(Form of Trustee's Certificate)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This bond is one of the Series 2005 Bonds of the issue described in and issued under the
provisions of the within mentioned Indenture.
Attached hereto is the complete text of the opinion of Kutak Rock LLP, a signed original
of which is on file with the undersigned, delivered and dated the date of the original delivery of
and payment for the Series 2005 Bonds.
as Trustee
Authorized Signature
10-70831.5 A-5
(Form of Assignment)
ASSIGNMENT
FOR VALUE RECEIVED, , hereby sells, assigns, and
transfers unto , the within bond and all rights thereunder, and
hereby irrevocably constitutes and appoints
as attorney to transfer the within bond on the books kept for registration thereof with full power
of substitution in the premises.
DATE: __________,20_
Transferor
GUARANTEED BY:
NOTICE: Signature(s) must be guaranteed by an institution satisfactory to the Trustee or
other transfer agent.
10-70831.5 A-6
0
11
EXHIBIT B TO TRUST INDENTURE
FORM OF REQUISITION
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds, Series 2005
Date:
Requisition No.:
TO:
as Trustee
Pursuant to the provisions of Section 502 of the Trust Indenture dated as of April 15, 2005
(the "Indenture"), by and between the City of Fayetteville, Arkansas (the "Issuer") and you, as
trustee, you are authorized to make the following described payment directly to the Payee named
below from the Project Fund:
Name and Address of Payee:
Amount of Payment:
General Classification of
the Expenditures:
The undersigned hereby certifies that he is authorized to deliver this Requisition on behalf of
the Issuer.
The amount requested hereunder has not been the basis for any previous Requisition by the
Issuer and is justly due and owing to the person(s) named herein as a proper payment or
reimbursement of a Project Cost (as defined in the Indenture).
10-70831.5
B-1
No Event of Default exists under the Indenture and, to the knowledge of the undersigned,
no event has occurred and continues which with notice or lapse of time or both would constitute
an Event of Default under the Indenture.
CITY OF FAYETTEVILLE, ARKANSAS
By:
Authorized Representative
10-70831.5 B-2
0
EXHIBIT C TO TRUST INDENTURE
SERIES 2005 BOND ACCRETION SCHEDULE
Accreted Value
Accretion Date (per $5,000 minimum denomination)
10-70831.5 C-1
i T
E ,e
•' v
-
2°
Oo V
6tn
co
v v
r� A
-
A
E
I..>-'
ea
v o
"Jo
ra o
C,—
>-0=
'-a')
o 0
_
V C 9
V l-
V N L
C)
1 Q N
NV
0 0
0 O A
J n
0
„'c
V
3
E $
E
C y
E U
Wo o
nU
u
VV
r c
E ' .
gco
V C A
u
tn
L - —
c m o
V N
V
c � 3
c m
82 g
c o c
.- e o
. 3
CI-
-
0
o_
9 V
C V
V ` N
E .E`
0 •V
V S n
Li
—.
C t
V i
E c
v y o
U V
S � C
F O.,
PRELIMINARY OFFICIAL STATEMENT DATED MARCH 11, 2005
NEW ISSUE
BOOK -ENTRY ONLY
NOT RATED
In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the
accuracy of certain representations and continuing compliance with certain covenants, interest on the Series 2005 Bonds is excluded from
gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax.
Under existing law, Bond Counsel is of the opinion that the Series 2005 Bonds and the interest thereon are exempt from all state, county and
municipal taxes in the State of Arkansas. See the caption "TAX MATTERS" herein.
$3,735,000*
CITY OF FAYETTEVILLE, ARKANSAS
TAX INCREMENT INTEREST ACCRETION BONDS
(HIGHWAY 71 EAST END REDEVELOPMENT DISTRICT NO. I PROJECT)
SERIES 2005
Dated: April 19, 2005
Due: August 1, 2029
The Tax Increment Interest Accretion Bonds (Highway 71 East End Redevelopment District No. I Project), Series 2005 (the "Series 2005
Bonds"), are being issued by the City of Fayetteville, Arkansas (the "City") for the purpose of (i) financing the costs of acquisition of certain real
property within the City, the demolition of existing structures thereon, site preparation in connection therewith, and the construction of sidewalk
and crosswalk improvements, and (ii) paying certain expenses in connection with the issuance of the Series 2005 Bonds. See the captions
"ESTIMATED SOURCES AND USES OF FUNDS" and "THE PROJECT' herein.
The Series 2005 Bonds are issuable only as fully registered bonds and, when issued, will be registered in the name of Cede & Co., as
nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal, premium, if any, and interest payments on
the Series 2005 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2005 Bonds. Individual purchases of the
Series 2005 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof Individual purchasers
("Beneficial Owners") of Series 2005 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY
SYSTEM" herein.
The Series 2005 Bonds shall accrete interest from their dated date at the rate of _% per annum, compounded semiannually on each
February I and August 1, commencing August 1, 2005, as shown on Appendix B hereto. Such interest shall be payable only upon maturity
or earlier redemption of the Series 2005 Bonds. The principal of, premium, if any, and accreted interest on the Series 2005 Bonds shall be
payable upon surrender of the Series 2005 Bonds at the principal corporate trust office of (the "Trustee"). So
long as DTC or its nominee is the registered owner of the Series 2005 Bonds, disbursement of such payments to DTC Participants is the
responsibility of DTC, and the disbursement of such payments to Beneficial Owners is the responsibility of DTC Participants or Indirect
Participants, as more fully described herein.
Pursuant to a Trust Indenture dated as of April 15, 2005 (the "Indenture"), between the City and the Trustee, the payment of the
principal of, premium, if any, and interest on the Series 2005 Bonds is secured by a pledge of the incremental ad valorem tax receipts (the
"Tax Increment") derived with respect to the real property within the City's Highway 71 East End Redevelopment District No. I (the
"District"). See the caption "SECURITY FOR THE BONDS" herein. Assuming the satisfaction of a prescribed coverage test set forth in the
Indenture, the City has reserved the right to incur additional indebtedness to be secured by the Tax Increment on a parity basis with the Series
2005 Bonds. See the caption "THE SERIES 2005 BONDS — Additional Bonds" herein. The Series 2005 Bonds are subject to optional and
mandatory redemption prior to maturity as more fully described herein under the caption "THE SERIES 2005 BONDS - Redemption."
The Series 2005 Bonds are special obligations of the City secured by and payable solely from the Tax Increment and moneys in
the funds and accounts established under the Indenture. The Series 2005 Bonds do not constitute an indebtedness of the City within
the meaning of any constitutional or statutory debt limitation or restriction. The issuance of the Series 2005 Bonds shall not directly,
indirectly or contingently obligate the City to levy or pledge any taxes whatsoever or to make any appropriation for the payment of
the Series 2005 Bonds, except as described herein with respect to the Tax Increment.
The Series 2005 Bonds are offered when, as and if issued by the City and are subject to the final approving opinion of Kutak Rock LLP,
Little Rock, Arkansas, Bond Counsel. Certain matters will be passed upon for the City by its counsel, Kit Williams, Esq., City Attorney. It is
expected that the Series 2005 Bonds will be available for delivery in New York, New York, on or about April 19, 2005.
• Preliminary; subject to change.
O
Crews&Associates
Member First Secutlly Bancorp
The date of this Official Statement is March ___,2005.
CITY OF FAYETTEVILLE, ARKANSAS
Issuer
City Council
Dan Coody, Mayor
Kyle Cook
Robert Ferrell
Lioneld Jordan
Shirley Lucas
Don Man
Robert Reynolds
Robert Rhoads
Brenda Thiel
Steve Davis, Finance & Internal Services Director
Sondra Smith, City Clerk
Kit Williams, City Attorney
, Arkansas
Trustee and Paying Agent
KUTAK ROCK LLP
Little Rock, Arkansas
Bond Counsel
CREWS & ASSOCIATES, INC.
Little Rock, Arkansas
Underwriter
1
No dealer, broker, salesman or other person has been authorized by the City or by Crews & Associates, Inc.
(the "Underwriter") to give any information or to make any representations, other than those contained herein; and,
if given or made, such other information or representations must not be relied upon as having been authorized by
either of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to
buy, nor shall there be any sale of any Series 2005 Bonds in any jurisdiction in which such offer is not authorized, or
in which the person making such offer, solicitation or sale is not qualified to do so, or to any person to whom it is
unlawful to make such offer, solicitation or sale. The information and expressions of opinion contained herein are
subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no change in the affairs of the City since
the date hereof.
THE SERIES 2005 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, NOR HAS THE TRUST INDENTURE BEEN QUALIFIED UNDER THE TRUST
INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON CERTAIN EXEMPTIONS FROM SUCH
REGISTRATION AND QUALIFICATION CONTAINED IN SUCH LAWS.
CERTAIN INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED FROM THE CITY, THE
DEPOSITORY TRUST COMPANY AND OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE.
THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN
ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE
FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS
TRANSACTION, BUT THE UNDERWRITER DOES NOT GUARANTY THE ACCURACY OR
COMPLETENESS OF SUCH INFORMATION.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2005 BONDS
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THIS OFFICIAL STATEMENT CONTAINS CERTAIN FORWARD -LOOKING STATEMENTS,
INCLUDING PROJECTIONS OF REAL PROPERTY VALUES AND INCREMENTAL AD VALOREM TAX
RECEIPTS ATTRIBUTABLE TO THE DISTRICT. POTENTIAL PURCHASERS ARE CAUTIONED THAT
FORWARD -LOOKING STATEMENTS ARE NOT GUARANTEES AND THAT ACTUAL RESULTS MAY
DIFFER MATERIALLY AND ADVERSELY FROM THOSE PROJECTED IN FORWARD -LOOKING
STATEMENTS.
TABLE OF CONTENTS
IntroductoryStatement........................................................................................................................
TheSeries 2005 Bonds........................................................................................................................
Securityfor the Bonds.........................................................................................................................
RiskFactors.........................................................................................................................................
Book -Entry Only System.....................................................................................................................
TheProject...........................................................................................................................................
Estimated Sources and Uses of Funds.................................................................................................
Projected Tax Increment and Mandatory Redemptions.......................................................................
TheCity and the District.....................................................................................................................
Definitions of Certain Terms...............................................................................................................
Summaryof the Indenture...................................................................................................................
Summary of the Continuing Disclosure Agreement............................................................................
Underwriting........................................................................................................................................
TaxMatters..........................................................................................................................................
LegalMatters.......................................................................................................................................
Miscellaneous......................................................................................................................................
Accuracy and Completeness of Official Statement.............................................................................
APPENDIX A - Form of Bond Counsel Opinion................................................................................
APPENDIX B - Series 2005 Accretion Schedule................................................................................
APPENDIX C - Feasibility Study of District......................................................................................
APPENDIXD - Map of District..........................................................................................................
Page
1
2
4
7
8
10
15
18
22
26
28
28
29
29
................ 30
0
PRELIMINARY OFFICIAL STATEMENT
$3,735,000*
CITY OF FAYETTEVILLE, ARKANSAS
TAX INCREMENT INTEREST ACCRETION BONDS
(HIGHWAY 71 EAST END REDEVELOPMENT DISTRICT NO. 1 PROJECT)
SERIES 2005
INTRODUCTORY STATEMENT
The following introductory statement is subject in all respects to the more complete information set forth in
this Official Statement. All descriptions and summaries of documents hereinafter set forth are qualified in their
entirety by reference to each such document. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms under the caption "DEFINITIONS OF CERTAIN TERMS" herein.
This Official Statement, including the cover page and the Appendices hereto, is furnished in connection
with the offering of Tax Increment Interest Accretion Bonds (Highway 71 East End Redevelopment District No. I
Project), Series 2005, in the principal amount of $3,735,000(the "Series 2005 Bonds"), by the City of Fayetteville,
Arkansas (the "City").
The City is a city of the first class organized and existing under the laws of the State of Arkansas (the
"State"). The City is authorized under Amendment 78 to the Constitution of the State ("Amendment 78") and
Arkansas Code Annotated (2003 Supp.) §§14-168-301 et seq. (as from time to time amended, the "Act"), to form
redevelopment districts and to issue and sell bonds for the purpose of financing projects to alleviate blight and
encourage economic development within such districts.
Pursuant to Ordinance No. 4608 of the City adopted August 17, 2004, as subsequently amended and
supplemented, the City has created Highway 71 East End Redevelopment District No. I (the "District"). The Series
2005 Bonds are to be issued by the City pursuant to Amendment 78, the Act and Ordinance No. _, adopted and
approved on March_, 2005 (the "Authorizing Ordinance"), for the purpose of (i) financing the costs of acquiring
certain real property within the District, demolishing existing buildings thereon, site preparation in connection
therewith, and certain sidewalk and crosswalk improvements throughout the District (the "Project"), and (ii) paying
the costs of issuing the Series 2005 Bonds. See the captions "ESTIMATED SOURCES AND USES OF FUNDS"
and 'THE PROJECT" herein.
The Series 2005 Bonds are not general obligations of the City, but are special obligations secured by and
payable solely from the moneys in the funds and accounts established under the Indenture (hereinafter defined) and
from certain ad valorem tax receipts (the "Tax Increment") attributable to the increase in assessed value of real
property within the District following its formation. See the captions "SECURITY FOR THE BONDS," "RISK
FACTORS," "PROJECTED TAX INCREMENT AND MANDATORY REDEMPTIONS" and "SUMMARY OF
THE INDENTURE" herein.
The faith and credit of the City are not pledged to the payment of the Series 2005 Bonds, and the
Series 2005 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or
statutory debt limitation or restriction. The issuance of the Series 2005 Bonds shall not directly, indirectly or
contingently obligate the City to levy or pledge any taxes whatsoever or to make any appropriation for the
payment of the Series 2005 Bonds, except as described herein with respect to the Tax Increment.
Additional Bonds may be issued on a parity of security with the Series 2005 Bonds under certain
circumstances set forth in the Indenture (hereinafter defined). The Series 2005 Bonds and any Additional Bonds are
herein collectively referred to as the "Bonds." See the caption "THE SERIES 2005 BONDS - Additional Bonds"
herein.
The Series 2005 Bonds are subject to mandatory redemption (i) from excess moneys in the Project Fund
following completion of the Project, (ii) from a portion of the proceeds realized upon the expected sale of the real
property originally acquired with proceeds of the Series 2005 Bonds following completion of the Project, and (iii)
from the Tax Increment. See the captions "THE SERIES 2005 BONDS — Redemption" and "PROJECTED TAX
INCREMENT AND MANDATORY REDEMPTIONS."
Preliminary; subject to change.
,w 0
Pursuant to the provisions of a Continuing Disclosure Agreement dated as of the date of delivery of the
Series 2005 Bonds, by and between the City and the Trustee (the "Continuing Disclosure Agreement"), the City has
undertaken certain obligations with respect to providing ongoing disclosure of certain financial and operating data
concerning the City and the Tax Increment and of the occurrence of certain material events. See the caption
"SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT" herein.
This Official Statement contains brief descriptions or summaries of, among other matters, the City, the
District, the Series 2005 Bonds, the Tax Increment, the Continuing Disclosure Agreement, and the Trust Indenture
dated as of April 15, 2005 (the "Indenture"), by and between the City and ,
Arkansas, as trustee (the "Trustee"), pursuant to which the Series 2005 Bonds are issued and secured. Such
descriptions and information do not purport to be comprehensive or definitive. All references herein to the Indenture
and the Continuing Disclosure Agreement are qualified in their entirety by reference to each such document, and all
references to the Series 2005 Bonds are qualified in their entirety by reference to the definitive form thereof and the
information with respect thereto included in the Indenture. Copies of the Continuing Disclosure Agreement, the
Indenture, and the form of Series 2005 Bond included therein, are available from the City by writing to the attention
of the Finance and Internal Services Director, City of Fayetteville, City Administration Building, 113 West
Mountain, Fayetteville, Arkansas 72701 and, during the initial offering period only, from the Underwriter, Crews &
Associates, Inc., First Security Center, 521 President Clinton Avenue, Suite 800, Little Rock, Arkansas 72201.
Certain financial and operating data have been provided by the City from the audited records of the City and certain
demographic information has been obtained from other sources which are believed to be reliable.
THE SERIES 2005 BONDS
Description. The Series 2005 Bonds will be initially dated as of their date of delivery, and will accrete
interest from such date at the rate of _% per annum, compounded semiannually on each February I and August
1, commencing August 1, 2005. The Series 2005 Bonds will mature, unless sooner redeemed, on August 1, 2029.
The Series 2005 Bonds are issuable only in the form of fully registered bonds and, when issued, will be
registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), New York,
New York, to which principal, premium, if any, and interest payments on the Series 2005 Bonds will be made so
long as Cede & Co. is the registered owner of the Series 2005 Bonds. Individual purchases of the Series 2005
Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual
purchasers ("Beneficial Owners") of Series 2005 Bonds will not receive physical delivery of bond certificates. See
the caption "BOOK -ENTRY ONLY SYSTEM" herein.
The principal of, premium, if any, and accreted interest on the Series 2005 Bonds shall be payable upon
surrender thereof at the principal corporate trust office of the Trustee. All such payments shall be valid and effectual
to satisfy and discharge the liability upon such Series 2005 Bond to the extent of the sum or sums so paid. So long
as DTC or its nominee is the registered owner of the Series 2005 Bonds, disbursement of such payments to DTC
Participants is the responsibility of DTC, and the disbursement of such payments to Beneficial Owners is the
responsibility of DTC Participants or Indirect Participants, as more fully described herein. Principal and accreted
interest will be payable only upon maturity or earlier redemption of the Series 2005 Bonds.
Redemption. (1) The Series 2005 Bonds shall be redeemed prior to maturity on any date, in whole or in
part (in minimum $5,000 denominations), by lot in such manner as the Trustee shall determine, at a redemption
price equal to 100% of the Accreted Value (as defined under the caption "DEFINITIONS OF CERTAIN TERMS"
herein) thereof as of the date of redemption, (i) from moneys in the Project Fund in excess of the amount needed to
complete the Project, and (ii) from the first $120,000 of proceeds realized by the City upon any sale of the real
property originally acquired with the proceeds of the Series 2005 Bonds. While it is not expected that there will be
any excess moneys in the Project Fund following completion of the Project, it is anticipated that the real property
acquired with the proceeds of the Series 2005 Bonds will be conveyed by the City to a private developer for a price
of $300,000 following completion of the demolition and site preparation components of the Project and upon
satisfaction of certain other conditions set forth in the Redevelopment Agreement. See the caption "THE
PROJECT" herein.
(2) The Series 2005 Bonds shall be redeemed prior to maturity on each February I, in whole or in part
(in minimum $5,000 denominations), by lot in such manner as the Trustee shall determine, at a redemption price
equal to 100% of the Accreted Value thereof as of the date of redemption, from the Tax Increment receipts on
deposit with the Trustee following the use of such Tax Increment receipts as are necessary (i) to pay any arbitrage
rebate due under Section 148(f) of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) to pay
Trustee and Paying Agent fees and expenses. See the caption "PROJECTED TAX INCREMENT AND
MANDATORY REDEMPTIONS" herein.
2
w •
(3) On and after February 1, 2010, the Series 2005 Bonds are subject to redemption prior to maturity
at the option of the City, in whole or in part on any date (in minimum $5,000 denominations), by lot in such manner
as the Trustee shall determine, from funds from any source, at a redemption price equal to 100% of the Accreted
Value thereof as of the date of redemption.
(4) Upon (i) the levy of additional millage by any taxing unit, which additional millage is included
within the District's "applicable ad valorem rate" (as defined in the Act) or (ii) any determination that the Tax
Increment is to be calculated by including any portion of the 25 mills described in Amendment 74 to the
Constitution of the State of Arkansas or any portion of the disputed 4.5 mills claimed as part of the "debt service ad
valorem rate" (as defined in the Act) by the Fayetteville School District within the "applicable ad valorem rate,"
which determination is evidenced by (a) an opinion of the Arkansas Attorney General, (b) a decision by an Arkansas
court of competent jurisdiction, (c) legislation enacted by the Arkansas General Assembly, or (d) an amendment to
the Constitution of the State of Arkansas, then the Series 2005 Bonds shall be subject to redemption prior to
maturity at the option of the City, in whole on any date, from funds from any source, at a redemption price equal to
101% of the then outstanding principal amount of the Series 2005 Bonds plus the accreted interest thereon as of the
date of redemption. See the caption "SECURITY FOR THE BONDS — Tax Increment Generally — Determination
of Applicable Ad Valorem Rate" herein.
Partial Redemption of the Series 2005 Bonds. If less than all of the Series 2005 Bonds are called for
redemption, the particular Series 2005 Bonds or portions of Series 2005 Bonds to be redeemed shall be selected by
lot in such manner as the Trustee in its discretion may deem fair and appropriate. So long as DTC or its nominee is
the sole registered owner of the Series 2005 Bonds, the procedures established by DTC shall control with respect to
the selection of the particular Series 2005 Bonds to be redeemed.
Notice of Redemption. Notice of the call for any redemption, identifying the Series 2005 Bonds or portions
thereof being called and the date on which they shall be presented for payment, shall be mailed by the Trustee by
first class mail (or, so long as DTC or its nominee is the sole registered owner of the Series 2005 Bonds, by any
other means acceptable to DTC, including facsimile) to the registered owner of each such Series 2005 Bond
addressed to such registered owner at his registered address and mailed not less than thirty (30) nor more than sixty
(60) days prior to the date fixed for redemption; provided, however, that failure to give such notice by mailing, or
any defect therein, shall not affect the validity of any proceeding for the redemption of any Series 2005 Bond with
respect to which no such failure or defect has occurred.
Any notice mailed as provided above shall be conclusively presumed to have been duly given, whether or
not the registered owner receives the notice.
Additional Bonds. The City may issue from time to time one or more series of Additional Bonds for the
purpose of (i) financing Project Costs in connection with any additional project with respect to the District permitted
by the Act, (ii) refunding the Series 2005 Bonds or any series of Additional Bonds, in whole or in part, or (iii) any
combination thereof. Additional Bonds shall be secured equally and ratably with the Series 2005 Bonds and any
other series of Additional Bonds theretofore issued and then Outstanding, except insofar as any terms or conditions
of redemption or purchase established under the Indenture may afford additional benefit or security for the Bonds of
any particular series and except for the security afforded by any municipal bond insurance obtained with respect to
any particular series of Bonds. Before any Additional Bonds are authenticated, there shall be delivered to the
Trustee the items required by the Indenture for the issuance of Bonds, plus an Accountant's certificate stating that,
based upon necessary investigation, the Tax Increment receipts transferred to the Trustee for deposit to the Revenue
Fund during the most recent twelve (12) months were not less than 150% of the average Annual Debt Service on all
then Outstanding Bonds, plus the Additional Bonds then proposed to be issued. No Additional Bonds shall be
issued unless there is no default at the time of issuance under the Indenture.
Transfer or Exchange. The Series 2005 Bonds may be transferred on the books of registration kept by the
Trustee by the registered owner in person or by the owner's duly authorized attorney, upon surrender thereof,
together with a written instrument of transfer duly executed by the registered owner or the owner's duly authorized
attorney. Upon surrender for transfer of any Series 2005 Bond at the principal corporate office of the Trustee, the
City shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new
Series 2005 Bond or Bonds in the same aggregate principal amount and of any authorized denomination or
denominations.
Transfers of registration or exchanges of Series 2005 Bonds shall be without charge to the Holders of such
Series 2005 Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be
paid by the Holder of the Series 2005 Bond requesting such transfer or exchange as a condition precedent to the
exercise of such privilege.
3
The Trustee shall not be required to transfer or exchange any Series 2005 Bond after the mailing of notice
calling such Series 2005 Bond for redemption has been made, and prior to such redemption.
So long as DTC or its nominee is the sole registered owner of the Series 2005 Bonds, transfers of beneficial
interests in the Series 2005 Bonds shall be in accordance with the rules and procedures of DTC and its direct and
indirect participants. See the caption "BOOK -ENTRY ONLY SYSTEM" herein.
SECURITY FOR THE BONDS
General. The Series 2005 Bonds are not general obligations of the City, but are special obligations secured
by and payable solely from the moneys in the funds and accounts established under the Indenture and from certain
ad valorem tax receipts (the "Tax Increment") attributable to the increase in the assessed value of real property
within the District following its formation. See the captions "RISK FACTORS," "PROJECTED TAX
INCREMENT AND MANDATORY REDEMPTIONS" and "SUMMARY OF THE INDENTURE" herein.
The faith and credit of the City are not pledged to the payment of the Series 2005 Bonds, and the
Series 2005 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or
statutory debt limitation or restriction. The issuance of the Series 2005 Bonds shall not directly, indirectly or
contingently obligate the City to levy or pledge any taxes whatsoever or to make any appropriation for the
payment of the Series 2005 Bonds, except as described herein with respect to the Tax Increment.
Tax Increment Generally. The Tax Increment has been pledged to secure the payment of debt service on
the Series 2005 Bonds pursuant to Ordinance No. duly adopted by the City Council of the City on March_,
2005 (the "Authorizing Ordinance").
Pursuant to the Act, the amount of the Tax Increment is to be calculated annually by multiplying the
"incremental value" of the District by the "applicable ad valorem rate." The "incremental value" of a
redevelopment district means the difference between (i) the assessed value of all real property within a district
subject to taxation as of the most recent assessment of property value after the formation of such district (the
"current value") and (ii) the assessed value of all real property within a district subject to taxation as of the most
recent assessment of property value preceding formation of such district (the "base value"). The "applicable ad
valorem rate" is the difference between (x) the total millage rate of all county, city, school or other local general
property taxes levied on all taxable property within a redevelopment district in a year (the "total ad valorem rate")
and (y) that portion of the total ad valorem rate pledged to the payment of debt service on bonds issued by any
taxing unit in which all or any part of such redevelopment district is located and approved by the voters prior to
January 1, 2001 (the "debt service ad valorem rate").
Determination of Incremental Value of District Real Property. The base value of the District real property
has been certified by the Washington County Assessor as $31,446,555. Projections of growth in the assessed value
of the real property within the District are set forth in the Feasibility Study of the Highway 71 East Square
Redevelopment District No. I (the "Feasibility Study") prepared by the Center for Business and Economic Research
of the Sam Walton College of Business at the University of Arkansas and attached hereto as Appendix C and under
the caption "PROJECTED TAX INCREMENT AND MANDATORY REDEMPTIONS" herein. SUCH
PROJECTIONS ARE BASED ON NUMEROUS FACTORS, SOME OF WHICH ARE DESCRIBED IN THE
FEASIBILITY STUDY. THERE CAN BE NO ASSURANCE THAT ACTUAL GROWTH IN ASSESSED
VALUE OF THE REAL PROPERTY WITHIN THE DISTRICT WILL APPROXIMATE SUCH PROJECTIONS.
See the caption "RISK FACTORS" herein.
Determination of Applicable Ad Valorem Rate. The Washington County Assessor has certified that the
total ad valorem rate within the District is presently 51.86 mills broken down as follows: 44.2 mills for the
Fayetteville School District (25.0 mills for maintenance and operations and 19.2 mills securing bond debt service);
5.86 mills for Washington County (4.75 mills for the general operations and 1.11 mills for the road fund); and 1.8
mills for the City of Fayetteville (1.0 mills for the Fayetteville Public Library, .4 mills for the Policemen's Pension
and Relief Fund and .4 mills for the Firemen's Pension and Relief Fund).
The Fayetteville School District millage securing bond debt service is the only portion of the total ad
valorem rate that should be considered as a debt service ad valorem rate. Amendment 78, effective as of January 1,
2001, states that "there shall be excluded from the division all ad valorem taxes for debt service approved by voters
in taxing unit prior to the effective date of this amendment." Forty-four mills were levied by the voters on
September 19, 2000 on behalf of the Fayetteville School District, immediately prior to the effective date of
Amendment 78. Twenty-five of those mills constitute the minimum levy required by Amendment 74 and by the
language of that September 19, 2000 ballot "to be used solely for maintenance and operation of schools ...." See the
discussion of Amendment 74 in the following paragraph. Although this required levy leaves only 19 potential mills
for debt service, the ballot also stated: "The total proposed school tax levy of 44.0 mills includes ... 23.7 mills for
debt service as a continuing levy ...." The current debt service levy for the School District pursuant to the County
levying ordinance is 19.2 mills but the School District claims it should receive the increment on 23.7 mills which
would include the increment on 4.5 mills levied by other governmental entities for other purposes. The City
disagrees with this interpretation.
In addition to the debt service ad valorem rate deduction, the Arkansas Attorney General has opined that
the 25 mills levied by the Fayetteville School District for maintenance and operation purposes should not be
included within the applicable ad valorem rate. Amendment 74 to the Constitution of the State of Arkansas
mandates a statewide 25 -mill minimum for the maintenance and operation of local schools. This minimum millage
is collected in the same manner as other property taxes, but the revenues generated therefrom are remitted by the
county collectors to the State Treasurer for distribution to the school districts. It is the Attorney General's position
that this 25 mills is levied by the State of Arkansas and is not a tax of a "taxing unit" within the meaning of the Act
and is thus not available for inclusion within the applicable ad valorem rate.
While an Attorney General's opinion is not binding on any Arkansas court or administrative body and
while the City disagrees with the Fayetteville School District's interpretation as to the calculation of the debt service
ad valorem rate, the City has nevertheless determined to structure the issuance of the Series 2005 Bonds by
assuming that only 3.16 mills may be available as the applicable ad valorem rate. This assumption is utilized in
the Feasibility Study attached hereto as Appendix C and in the tables set forth under the caption "PROJECTED
TAX RECEIPTS AND MANDATORY REDEMPTIONS" herein. The City has determined to legally challenge
both the Fayetteville School District's interpretation of the determination of the debt service ad valorem rate and the
Attorney General's opinion that the 25 mills for school operations and maintenance are not eligible for inclusion in
the applicable ad valorem rate. This challenge would likely take the form of a declaratory judgment action filed
against the Washington County Assessor and Collector. A favorable outcome could conceivably result in an
additional 29.5 mills (4.5 debt service mills + 25 operating mills) being included in the applicable ad valorem rate.
NO ASSURANCE CAN BE GIVEN AS TO THE PROBABILITY OF SUCCESS IN ANY SUCH LEGAL
CHALLENGE OR AS TO THE PRECISE REMEDY THAT WOULD GRANTED IN THE EVENT OF A
FAVORABLE OUTCOME. INVESTMENT DECISIONS WITH RESPECT TO THE SERIES 2005 BONDS
SHOULD BE MADE BASED ON THE ASSUMPTION THAT THE AVAILABLE AD VALOREM RATE WILL
BE 3.16 MILLS ONLY.
Ad Valorem Taxes Generally. Taxable real property is valued for tax purposes as of January 1 of each year
and only real property owned by a taxpayer on January I is assessed for that calendar year. The assessment process
is subject to rights of taxpayers to appeal and is not finalized until November of the year of assessment. Real
property is currently assessed in an amount equal to 20% of its value, but this percentage can be increased or
decreased by action of the Arkansas General Assembly. Following assessment, the total of the millage levied by
each taxing entity (municipalities, counties, school districts and community college districts) in which the property
is located is applied against the assessed value to determine the tax owed. The total taxes levied by all taxing
authorities are collected together by the county collector of the county in which the property is located in the
calendar year immediately following the year in which such taxes were levied. Taxes are due and payable between
the third Monday in February and October 10. Taxes not paid by October 10 are deemed delinquent and are subject
to a 10% penalty. Real estate as to which taxes are delinquent for two successive years is certified to the State Land
Commissioner, who offers the property for sale. The proceeds of such sale are apportioned among the taxing
authorities to which taxes are owed. Delinquent real property may be redeemed by the taxpayer within two years of
the delinquency. For an historical view of the assessed value of real property within the entire City, see the caption
"THE CITY — Economic Data" herein.
Effect of Amendment 59. Under Amendment 59 to the Constitution of the State of Arkansas, all real
property is subject to ad valorem taxation except for the following exempt categories: (i) public property used
exclusively for public purposes; (ii) churches used as such; (iii) cemeteries used exclusively as such; (iv) school
buildings; (v) libraries and grounds used exclusively for school purposes; and (vi) buildings and grounds used
exclusively for public charity. Amendment 59 also authorizes the General Assembly to exempt from taxation the
first $20,000 of value of a homestead of a taxpayer 65 years of age or older. Amendment 59 further provides that,
except as provided therein in connection with the transition period following a county -wide reassessment (see also
the discussion below regarding Amendment 79), (1) residential real property used solely as the principal place of
residence of the owner shall be assessed in accordance with its value as a residence, (2) land (but not improvements
thereon) used primarily for agricultural, pasture, timber, residential and commercial purposes shall be assessed upon
the basis of its value for such use, and (3) all other real property subject to taxation shall be assessed according to its
value. The Arkansas Supreme Court has held that the word "value," as used in a prior, substantially identical
constitutional provision, means "current market value".
Property owned by public utilities and common carriers and "used and/or held for use in the operation of
the company..." is assessed for tax purposes by the Tax Division of the Arkansas Public Service Commission.
Arkansas Code Annotated (1997 Repl.) Section 26-26-1605 provides that the Tax Division "shall assess the property
at its true and full market or actual value" and that all utility property of a company, whether located within or
without the State of Arkansas, is to be valued as a unit. Annually, each public utility and common carrier is
required to file a report with the Tax Division. The Tax Division then reviews these reports, along with other
reports (such as reports to shareholders, the Federal Communications Commission, the Federal Energy Regulatory
Commission and the Interstate Commerce Commission), to determine the value of the property. Valuation is
currently made on the basis of a statutorily prescribed formula with consideration given to (i) original cost less
depreciation, replacement cost less depreciation or reconstruction cost less depreciation; (ii) market value of capital
stock and funded debt; and (iii) capitalization of income. Once the value of a company's property as a unit is
determined, the Tax Division removes the value allocable to out-of-state property and allocates the remainder
among Arkansas taxing units on the basis of relative value within each jurisdiction. The Tax Division certifies the
assessment to the county assessor who enters the assessment on the county assessment roll. County officials have
no authority to change such assessment.
All other real property is assessed by the elected assessor of each Arkansas county or other officials
designated by law.
Effect of Amendment 79. Amendment 79 to the Constitution of the State of Arkansas requires each county
to appraise all market value real estate normally assessed by the county assessor at its full and fair value at a
minimum of once every five years. The most recent county -wide reassessment in Washington County was
completed in 2004 and the next such reassessment is scheduled for completion in 2007. Following any such county
reappraisal, the county assessor is required to compare the assessed value of each parcel of real property reappraised
or reassessed to the prior year's assessed value. If the assessed value of a parcel increased, then the assessed value
must be adjusted as provided below. Subject to the special circumstances described in the second following
paragraph, if a parcel is not the homestead and principal place of residence ("homestead") of a taxpayer, then any
increase in the assessed value in the first year after reappraisal cannot be greater than 10% (or 5% if the parcel is the
taxpayer's homestead) of the assessed value for the previous year. For each year thereafter, the assessed value shall
increase by an additional 10% (or 5% if the parcel is the taxpayer's homestead) of the assessed value for the year
preceding the first reassessment resulting from reappraisal; however, the increase cannot exceed the assessed value
determined by the reappraisal prior to the adjustment mandated by Amendment 79. For property owned by public
utilities and common carriers, any annual increase in the assessed value cannot exceed more than 10% of the
assessed value for the previous year. The Amendment 79 limitations on increases in assessed value do not apply to
newly discovered real property, new construction or substantial improvements to real property.
If a homestead is purchased or constructed on or after January 1, 2001 by a disabled person or by a person
over the age of 65, then that parcel will be assessed based on the lower of the assessed value as of the date of
purchase or construction or a later assessed value. If a person is disabled or is at least 65 years of age and owns a
homestead on January 1, 2001, then the homestead will be assessed based on the lower of the assessed value on
January 1, 2001 or a later assessed value. When a person becomes disabled or reaches age 65 on or after January 1,
2001, that person's homestead should thereafter be assessed based on the lower of the assessed value on the person's
65th birthday, on the date the person becomes disabled or a later assessed value. The provisions of this paragraph do
not apply to substantial improvements to real property. For real property described in the following paragraph, the
applicable date, in lieu of January 1, 2001, is January 1 of the year following completion of the adjustments to
assessed value described in the following paragraph.
If there has been no county -wide reappraisal and resulting reassessment of value of real property in a
county between January I, 1986 and December 1, 2000, then the assessed value of real property within that county
is adjusted in a different manner from the process described above. In such case, the assessor compares the assessed
value of each parcel to the assessed value of the parcel for the previous year. If the assessed value of the parcel has
increased, then the assessed value of the parcel for the year in which the parcel is reappraised is adjusted by adding
one-third (1/3) of the increase to the assessed value for the year prior to reappraisal. An additional one-third (1/3) of
the increase is added in each of the next two years. The adjustment contemplated by this paragraph does not apply
to the property of public utilities and common carriers. No adjustment will be made for newly discovered real
property, new construction or substantial improvements to real property.
Millage Rollbacks Under Amendments 59 and 79. In addition to the provisions of Amendments 59 and 79
discussed above, other provisions of these constitutional amendments provide for rollbacks in millage rates in
certain specified circumstances. Amendment 59 provides that whenever a county -wide reassessment results in an
overall increase in assessed value of 10% or more within the county, the tax rate of each taxing unit on property
located in that county is to be adjusted as described in detail therein. The year in which the reassessment is
completed is designated as the "Base Year." The assessed valuation for the Base Year is based on the reassessment.
Amendment 79 requires that the rollback adjustments mandated by Amendment 59 be determined after adjustments
are made to the assessed value under Amendment 79 (as described above). The "rolled -back" tax rates applicable
to real property in the county are computed by (I) deducting from the total Base Year assessed value the assessed
value of newly -discovered real property and new construction and improvements to real property to arrive at the
reassessed value of previously assessed real property, (2) determining the tax rate necessary to produce from the
previously assessed real property (on the basis of the Base Year assessment) the same amount of revenues produced
from such property in the Base Year (on the basis of the last previous assessed value and the tax rate applicable to
collections in the Base Year), and (3) either (a) fixing the tax rate determined in (2) as the tax rate for the real
property, including newly discovered real property and new construction and improvements to real estate, or (b) if
the tax rate so fixed would produce less than 110% of the revenues from real property produced in the Base Year,
increasing the tax rate determined in (2) in an amount sufficient to produce 110% of such revenues. The enabling
legislation for Amendment 59 provides that the "rollback" computation described above is to be made separately for
each tax source or millage levy (in the case of school districts, this would require separate computations for
operation and maintenance millage and debt service millage) with the new tax rate for each millage levy to be
rounded up to the nearest 1/10 mill. Amendment 79 specifically provides that its rollback provisions shall not
reduce the level of the minimum 25 mill levy mandated by Amendment 74 for maintenance and operation of local
schools. Further, Amendment 78 provides that, after the effective date of any ordinance approving the project plan
for a redevelopment district, no increases in the assessed valuation of property within such redevelopment district
shall be taken into account in making the "rollback" calculation described above.
Future Constitutional and Legislative Changes. Numerous constitutional amendments and legislative acts
have been proposed and will continue to be proposed which would alter facets of ad valorem taxation in Arkansas
generally, and its application in connection with redevelopment districts specifically. Many of such amendments
and acts have been initiated in response to public school funding shortfalls in the State. There can be no assurance
given as to the impact of the future enactment of any such amendments or bills on the size of the Tax Increment.
See the caption "RISK FACTORS" herein.
RISK FACTORS
The following is a summary statement of certain risks to owners of the Series 2005 Bonds relating to timely
payment of the Accreted Value of the Series 2005 Bonds at maturity or upon redemption and to the market value of
the Series 2005 Bonds. This summary statement is intended to highlight certain risks and is not a complete
statement of all such risks. Reference is made to the other portions of this Official Statement and in particular to the
information under the captions "SECURITY FOR THE BONDS" and "PROJECTED TAX INCREMENT AND
MANDATORY REDEMPTIONS" herein for further details of the risks to owners of the Series 2005 Bonds.
Real Property Value Growth. The City's ability to pay the Accreted Value of the Series 2005 Bonds at
maturity or upon redemption prior to maturity is dependent on the growth in assessed valuation of the real property
within the District. See the captions "SECURITY FOR THE BONDS" and "PROJECTED TAX INCREMENT
AND MANDATORY REDEMPTIONS" herein. There are many factors beyond the control of the City which could
have a significant impact on the level of such growth. A number of events could occur which would have an
material adverse effect upon property values, and thus on the amount of Tax Increment receipts projected to be
collected to pay Debt Service on the Series 2005 Bonds, including, but not limited to: (i) damage to or the
destruction of significant components of real property within the District; (ii) a general economic downturn resulting
in business closing or contributing to an inability of property owners to pay ad valorem taxes; and (iii) the enactment
or approval of legislation or constitutional amendments which further limit the amount of annual increases in real
property values or further restrict millages which are to be included within the applicable ad valorem rate (as defined
in the Act).
Limited Obligation of City. The Series 2005 Bonds are not general obligations of the City, but are special
obligations secured by and payable solely from the Tax Increment receipts and moneys on deposit in the Funds and
Accounts established in the Indenture. There can be no assurance that Tax Increment receipts deposited to the
Revenue Fund will be available or sufficient in amount to pay the Accreted Value of the Series 2005 Bonds at
maturity or upon redemption prior to maturity. In the event there are insufficient Tax Increment receipts to pay all
of the Debt Service on the Series 2005 Bonds in a timely manner, the City has no obligation to utilize any other
moneys to pay such Debt Service.
Revision of State Property Tax System. The State of Arkansas' system of assessing and taxing real property
for purposes of local ad valorem taxation for support of local political subdivisions, including cities, counties, school
districts and community colleges, has been the subject in recent years of constitutional amendment, legislation and
i S
litigation. Given the current debate over alternatives to remedy a perceived deficiency in the funding of Arkansas'
public schools, it is likely that the property tax system will continue to be the object of considerable controversy,
legal challenges and legislative action. Given this distinct possibility of additional legislation, constitutional
initiatives and referendums and litigation, there can be no assurance that Arkansas' system of assessing and taxing
real property will remain substantially unchanged. It is possible that such changes as do occur could materially and
adversely affect the amount of the Tax Increment. The approving opinion of Bond Counsel will be rendered based
on the law existing as of the date of issuance of the Series 2005 Bonds and in reliance upon general legal
presumptions in favor of the constitutionality of statutes and upon the holdings of existing case law.
No Investment Rating. The Series 2005 Bonds are not rated by a securities rating agency. The City has not
applied, and does not intend to apply, for any such rating. The absence of an investment rating may adversely affect
the marketability of the Series 2005 Bonds.
BOOK -ENTRY ONLY SYSTEM
The Series 2005 Bonds will be issued only as one fully registered Series 2005 Bond, in the name of Cede &
Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), as registered owner of all the
Series 2005 Bonds. The filly registered Series 2005 Bonds will be retained and immobilized in the custody of DTC.
DTC (or any successor securities depository) or its nominee for all purposes under the Indenture will be
considered by the City and the Trustee to be the owner or holder of the Series 2005 Bonds.
Owners of any book entry interests in the Series 2005 Bonds (the "book entry interest owners") described
below, will not receive or have the right to receive physical delivery of the Series 2005 Bonds, and will not be
considered by the City and the Trustee to be, and will not have any rights as, owners or holders of the Series 2005
Bonds under the bond proceedings and the Indenture except to the extent, if any, expressly provided thereunder.
CERTAIN INFORMATION REGARDING DTC AND DIRECT PARTICIPANTS IS SET FORTH
BELOW. THIS INFORMATION HAS BEEN PROVIDED BY DTC, THE CITY, THE UNDERWRITER AND
BOND COUNSEL ASSUME NO RESPONSIBILITY FOR THE ACCURACY OF SUCH STATEMENTS.
DTC, the world's largest depository, is a limited -purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934. DTC holds and provides asset servicing for over two million issues of U.S. and non-U.S. equity issues,
corporate and municipal debt issues and money market instruments from over 85 countries that DTC's participants
("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants
of sales and other securities transactions in deposited securities, through electronic computerized book -entry
transfers and pledges among Direct Participants' accounts. This eliminates the need for physical movement of
securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The
Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants
of DTC and by Members of the National Securities Clearing Corporation, Government Securities Clearing
Corporation, MBS Clearing Corporation and Emerging Markets Clearing Corporation (NSCC, GSCC, MBSCC and
EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock
Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available
to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing
corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The DTC Rules applicable to its Direct and Indirect Participants are on file with
the Securities and Exchange Commission. More information about DTC can be found at www.dtc.com.
Purchases of Series 2005 Bonds under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Series 2005 Bonds on DTC's records. The ownership interest of each actual
purchaser of each Series 2005 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but
Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Series 2005 Bonds are to be accomplished by
entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in Series 2005 Bonds, except in the event
that use of the Book -Entry System for the Series 2005 Bonds is discontinued.
8
To facilitate subsequent transfers, all Series 2005 Bonds deposited by Direct Participants with DTC are
registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an
authorized representative of DTC. The deposit of Series 2005 Bonds with DTC and their registration in the name of
Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Series 2005 Bonds, DTC's records reflect only the identity of the Direct Participants
to whose accounts such Series 2005 Bonds are credited, which may or may not be the Beneficial Owners. The
Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to
time. Redemption notices shall be sent to DTC. If less than all of the Series 2005 Bonds in a maturity are to be
redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such
maturity to be redeemed.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Series
2005 Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual
procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the Record Date. The Omnibus
Proxy will assign Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series
2005 Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy).
Payment of debt service and redemption proceeds with respect to the Series 2005 Bonds will be made to
Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is
to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the
City or the Trustee on payable date in accordance with their respective holdings shown on DTC's records.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices,
as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participant and not of DTC, the Trustee or the City, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of redemption proceeds and debt service to
Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the
responsibility of the City or the Trustee, disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of
Direct and Indirect Participants.
BENEFICIAL OWNERS SHOULD CONSULT WITH THE DIRECT PARTICIPANTS OR INDIRECT
PARTICIPANTS FROM WHOM THEY PURCHASE A BOOK ENTRY INTEREST TO OBTAIN
INFORMATION CONCERNING THE SYSTEM MAINTAINED BY SUCH DIRECT PARTICIPANTS OR
INDIRECT PARTICIPANTS TO RECORD SUCH INTERESTS, TO MAKE PAYMENTS, TO FORWARD
NOTICES OF REDEMPTION AND OF OTHER INFORMATION.
THE CITY AND THE TRUSTEE HAVE NO RESPONSIBILITY OR LIABILITY FOR ANY ASPECTS
OF THE RECORDS OR NOTICES RELATING TO, OR PAYMENTS MADE ON ACCOUNT OF, BOOK
ENTRY INTEREST OWNERSHIP, OR FOR MAINTAINING, SUPERVISING OR REVIEWING ANY
RECORDS RELATING TO THAT OWNERSHIP.
The Trustee and the City, so long as a book entry method of recording and transferring interest in the Series
2005 Bonds is used, will send any notice of redemption or of any Indenture amendment or supplement or other
notices to Bondholders under the Indenture only to DTC (or any successor securities depository) or its nominee.
Any failure of DTC to advise any Direct Participants, or of any Direct Participants or Indirect Participants to notify
any Beneficial Owner, of any such notice and its content or effect will not affect the validity of the redemption of
the Series 2005 Bonds called for redemption, the Indenture amendment or supplement, or any other action premised
on notice given under the Indenture.
The City and the Trustee cannot and do not give any assurances that DTC, Direct Participants, Indirect
Participants or others will distribute payments of debt service on the Series 2005 Bonds made to DTC or its nominee
as the registered owner of the Series 2005 Bonds, or any redemption or other notices, to the Beneficial Owners, or
that they will do so on a timely basis, or that DTC will serve and act in a manner described in this Official
Statement.
DTC may discontinue providing its services as securities depository with respect to the Series 2005 Bonds
at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a
successor securities depository is not obtained, bond certificates are required to be printed and delivered.
In addition, the City may decide to discontinue use of the system of book -entry transfers through DTC (or a
successor securities depository). In that event, bond certificates will be printed and delivered.
THE PROJECT
The proposed Project consists of the acquisition of four parcels of real property located within the District
in the downtown area of the City, the demolition of the majority of the existing structures thereon and site
preparation for subsequent development. In addition, it is anticipated that certain sidewalk and crosswalk
improvements will be funded throughout the District utilizing certain portions of the sale proceeds described below.
In view of the current conditions existing with respect to the property to be acquired, particularly the buildings
previously operated as the Mountain Inn, the City believes that the completion of the Project will alleviate blight and
encourage economic development within the District.
The total cost of the Project is expected to be approximately $3.68 million. $2.613 million of this amount
is the known acquisition cost of the real property, $887,000 is the estimate that has been developed by the City as
the cost of demolishing the existing buildings and clearing and preparing the site so as to make it available for
redevelopment, and the remaining $180,000 is the estimated cost of the sidewalk and crosswalk improvements. The
present Project schedule anticipates property acquisition on April 20, 2005, commencement of demolition on or
about June 1, 2005, and completion (except for the sidewalk and crosswalk improvements) in the third quarter of
2005. In the event the proceeds of the Series 2005 Bonds are insufficient to provide for the acquisition, demolition
and site preparation costs of the Project in full, the deficiency is expected to be funded by the Developer (defined
below).
The City has had numerous discussions with the principals of East Square Development, LLC (the
"Developer") concerning plans by the Developer to acquire the cleared real property upon completion of the Project
and to construct a $19 million hotel/meeting place/condominium/parking deck development (the "Development") on
such site. An agreement dated March 15, 2005 (the "Redevelopment Agreement"), has been entered into by and
between the City and the primary principals of the Developer setting forth the purchase price ($300,000) and other
terms and conditions with respect to any future conveyance of the Project real property to the Developer. In the
Redevelopment Agreement, the Developer principals have covenanted to cause the construction of a Development
having substantially the following components: (i) approximately 144 room, full service hotel; (ii) approximately 18
condominiums; (iii) approximately 12,000 square feet of conference/meeting space; (iv) approximately 300 space
multistory parking deck; and (v) restaurants, small retail shops, day spa and a rooftop botanical garden. The
Developer principals have agreed to cause the purchase of the Project real property from the City upon the
expenditure of $887,000 of the proceeds of the Series 2005 Bonds for demolition and site preparation purposes,
whether or not such demolition and site preparation can be completed at that level of expenditure. The
Redevelopment Agreement requires engineering and architectural contracts with respect to the Development to be in
place by the end of 2005. A construction contract shall be entered into by June I, 2006, and the Development shall
be completed and ready for occupation no later than September 1, 2007. All requirements for completion dates are
subject to force majeure and may be extended for good cause by the City Council. Upon the failure of the
Developer to meet the required dates for entry into engineering, architectural and construction contracts, the City's
remedy is the right to repurchase the Project real property for $10,000. Failure to complete the Development by
September 1, 2007 results in liquidated damages of $834.73 per day until the Development is opened for business
(not to exceed $300,504).
Completion and occupancy of the Development is presently expected to occur in the third quarter of 2006.
It should be noted that the Feasibility Study attached hereto as Appendix C assumes that the real property
components of the Development will first be assessed in 2007 and will contribute to the Tax Increment in 2008.
Any failure or delay in completion of the Development will have a negative impact on the amount of the Tax
Increment available to redeem the Series 2005 Bonds.
$180,000 of the proceeds received by the City upon the sale of the Project real property to the Developer
will be utilized to construct various sidewalk and crosswalk improvements throughout the District. The remaining
$120,000 of sale proceeds will be utilized to redeem a portion of the Series 2005 Bonds as described under the
caption "THE SERIES 2005 BONDS — Redemption" herein.
10
•
ESTIMATED SOURCES AND USES OF FUNDS
The proceeds of the Series 2005 Bonds are expected to be used as follows:
Sources of Funds(')
Series 2005 Bond Proceeds $3.735.000
Total Sources: $3.735.000
Uses of Funds'�
Deposit to Project Fund $3,500,000
Costs of Issuance and Underwriter's Discount 233,400
Contingency 1,600
Total Uses: S3.735.000
(1) Preliminary; subject to change.
PROJECTED TAX INCREMENT AND MANDATORY REDEMPTIONS
The following table shows the projected Tax Increment during the next 25 years at varying levels and the
corresponding mandatory redemptions of the Series 2005 Bonds at each such level. The Series 2005 Bonds are
subject to mandatory redemption prior to maturity on each February 1, in whole or in part (in minimum $5,000
denominations), by lot in such manner as the Trustee shall determine, at a redemption price equal to 100% of the
Accreted Value thereof as of the date of redemption, from Tax Increment receipts on deposit with the Trustee
following the transfer of any amounts necessary (i) to pay any arbitrage rebate due under Section 148(f) of the
Internal Revenue Code of 1986, as amended (the "Code"), and (ii) to pay Trustee and Paying Agent fees and
expenses.
The amount of the Tax Increment and Series 2005 Bond redemptions shown in the table immediately
below are based on the projections set forth in the Feasibility Study of the District attached as Appendix C hereto.
[THE REMAINDER OF THIS PAGE INTENTIONALLY BLANK]
0
C
TABLE I
ASSESSED VALUATION GROWTH AS SET FORTH IN THE FEASIBILITY STUDY
Outstanding Series 2005 Series 2005 Bond
Principal and Accreted Projected Tax Series 2005 Bond Principal
Date Interest Prior to Increment Principal Outstanding After
(February 1)1'1 Redemption(2) Receipts l'1 Redeemed Redemption
2006
$3,927,409
$ 131,375
$ 120,000
$ 3,615,000
2007
4,052,322
33,724
30,000
3,585,000
2008
4,284,153
81,971
70,000
3,515,000
2009
4,477,971
114,685
90,000
3,425,000
2010
4,651,538
145,574
105,000
3,320,000
2011
4,806,780
172,371
120,000
3,200,000
2012
4,939,082
202,262
130,000
3,070,000
2013
5,051,435
235,623
145,000
2,925,000
2014
5,130,768
272,908
155,000
2,770,000
2015
5,179,841
314,566
170,000
2,600,000
2016
5,183,106
361,175
180,000
2,420,000
2017
5,142,949
413,309
195,000
2,225,000
2018
5,040,888
471,703
205,000
2,020,000
2019
4,878,749
537,148
225,000
1,795,000
2020
4,621,699
610,539
235,000
1,560,000
2021
4,281,954
692,888
255,000
1,305,000
2022
3,818,634
785,345
265,000
1,040,000
2023
3,244,225
889,211
285,000
755,000
2024
2,510,757
1,005,962
305,000
450,000
2025
1,595,329
1,137,386
320,000
130,000
2026
491,316
1,285,302
130,000
-0-
2027
-0-
1,451,879
--
2028
1,639,735
--
2029
1.851.558
--
Totals:
The Series 2005 Bonds are subject to mandatory redemption from Tax Increment receipts on each
February 1. See the caption "THE SERIES 2005 Bonds — Redemption" herein.
(2) Assuming for the purposes of this Preliminary Official Statement a coupon rate on the Series 2005 Bonds
of 6.50% per annum.
(3) Assuming (I) assessed valuation growth as set forth in the Feasibility Study attached hereto as Appendix C,
(2) 3.16 mills of ad valorem taxes are available to pay debt service on the Series 2005 Bonds, and (3)
$120,000 of proceeds available from the sale of real property to the Developer. See the captions
"SECURITY FOR THE BONDS — Tax Increment" and "THE PROJECT" herein.
12
•
TABLE 11
ASSESSED VALUATION GROWTH AT 2000-2004 MEDIAN RATE
Outstanding Series 2005 Series 2005 Bond
Principal and Accreted Projected Tax Series 2005 Bond Principal
Date Interest Prior to Increment Principal Outstanding After
(February 1)1'1 Redemption(2) Receipts(3) Redeemed Redemption
2006
$3,927,409
$ 131,375
$ 120,000
$ 3,615,000
2007
4,052,322
33,724
30,000
3,585,000
2008
4,284,153
81,971
70,000
3,515,000
2009
4,477,971
114,685
90,000
3,425,000
2010
4,651,538
145,574
105,000
3,320,000
2011
4,806,780
167,398
120,000
3,200,000
2012
4,939,082
191,167
120,000
3,080,000
2013
5,067,889
217,054
135,000
2,945,000
2014
5,165,850
245,247
140,000
2,805,000
2015
5,245,290
275,953
145,000
2,660,000
2016
5,302,716
309,395
155,000
2,505,000
2017
5,323,590
345,815
165,000
2,340,000
2018
5,301,428
385,482
170,000
2,170,000
2019
5,241,033
428,682
175,000
1,995,000
2020
5,136,652
475,732
185,000
1,810,000
2021
4,968,164
526,974
190,000
1,620,000
2022
4,740,373
582,781
200,000
1,420,000
2023
4,429,615
643,561
205,000
1,215,000
2024
4,040,490
709,756
215,000
1,000,000
2025
3,545,176
781,849
220,000
780,000
2026
2,947,899
860,366
230,000
550,000
2027
2,215,954
945,878
235,000
315,000
2028
1,352,972
1,039,010
240,000
75,000
2029
343,415
1.140,440
75.000
-0-
(1) The Series 2005 Bonds are subject to mandatory redemption from Tax Increment receipts on each
February I. See the caption "THE SERIES 2005 Bonds — Redemption" herein.
(2) Assuming for the purposes of this Preliminary Official Statement a coupon rate on the Series 2005 Bonds
of 6.50% per annum.
(3) Assuming (1) assessed valuation growth for 2005 through 2009 as set forth in the Feasibility Study
attached hereto as Appendix C and thereafter at the rate of 8.91% (the median rate of growth for real
property within the District from 2000-2004), (2) 3.16 mills of ad valorem taxes are available to pay debt
service on the Series 2005 Bonds, and (3) $120,000 of proceeds available from the sale of real property to
the Developer. See the captions "SECURITY FOR THE BONDS — Tax Increment" and "THE PROJECT"
herein.
13
TABLE III
ASSESSED VALUATION GROWTH AT 1996-2000 MEDIAN RATE
Outstanding Series 2005 Series 2005 Bond
Principal and Accreted Projected Tax Series 2005 Bond Principal
Date Interest Prior to Increment Principal Outstanding After
(February I)(') Redemptiond2) Receipts(;) Redeemed Redemption
2006 $3,927,409 $ 131,375 $ 120,000 $ 3,615,000
2007 4,052,322 33,724 30,000 3,585,000
2008 4,284,153 81,971 70,000 3,515,000
2009 4,477,971 114,685 90,000 3,425,000
2010 4,651,538 145,574 105,000 3,320,000
2011 4,806,780 161,544 115,000 3,205,000
2012 4,946,800 178,556 115,000 3,090,000
2013 5,084,343 196,677 120,000 2,970,000
2014 5,209,703 215,979 120,000 2,850,000
2015 5,329,439 236,540 130,000 2,720,000
2016 5,422,327 258,441 130,000 2,590,000
2017 5,504,231 281,770 130,000 2,460,000
2018 5,573,296 306,621 135,000 2,325,000
2019 5,615,392 333,091 140,000 2,185,000
2020 5,625,857 361,288 140,000 2,045,000
2021 5,613,202 391,323 140,000 1,905,000
2022 5,574,327 423,316 145,000 1,760,000
2023 5,490,227 457,395 145,000 1,615,000
2024 5,370,692 493,697 150,000 1,465,000
2025 5,193,683 532,365 150,000 1,315,000
2026 4,969,855 573,554 150,000 1,165,000
2027 4,693,794 617,429 155,000 1,010,000
2028 4,338,100 664,164 155,000 855,000
2029 3,914,934 713.946 155.000 700,00014)
Totals: S 7.905.025 $3.035.000
(1) The Series 2005 Bonds are subject to mandatory redemption from Tax Increment receipts on each
February 1. See the caption "THE SERIES 2005 Bonds — Redemption" herein.
(2) Assuming for the purposes of this Preliminary Official Statement a coupon rate on the Series 2005 Bonds
of 6.50% per annum.
(3) Assuming (1) assessed valuation growth for 2005 through 2009 as set forth in the Feasibility Study
attached hereto as Appendix C and thereafter at the rate of 6.52% (the median rate of growth for real
property within the District from 1996-2000), (2) 3.16 mills of ad valorem taxes are available to pay debt
service on the Series 2005 Bonds, , and (3) $120,000 of proceeds available from the sale of real property to
the Developer. See the captions "SECURITY FOR THE BONDS — Tax Increment" and "THE PROJECT"
herein.
(4) Under this scenario, it is projected that there would remain $700,000 in principal amount of Series 2005
Bonds outstanding at maturity having a total Accreted Value of $3,309,378.
THE PROJECTED TAX INCREMENT AND MANDATORY REDEMPTION TABLES SET FORTH ABOVE
ARE BASED ON THE PROJECTIONS FOR THE DISTRICT'S ASSESSED PROPERTY VALUE GROWTH (I)
SET FORTH IN THE FEASIBILITY STUDY ATTACHED AS APPENDIX C HERETO OR (2) UTILIZING A
COMBINATION OF THE PROJECTIONS IN THE FEASIBILITY STUDY AND HISTORICAL MEDIAN
GROWTH RATES. THE ACTUAL AMOUNT OF THE TAX INCREMENT AND CORRESPONDING
REDEMPTIONS WILL DEPEND ON NUMEROUS FACTORS, AND THERE CAN BE NO ASSURANCE
GIVEN THAT THE TAX INCREMENT AVAILABLE TO REDEEM SERIES 2005 BONDS WILL
APPROXIMATE SUCH PROJECTIONS.
14
0
THE CITY AND THE DISTRICT
General. The City is a city of the first class organized and existing under the laws of the State of Arkansas.
The City is the seat of government of Washington County (the "County") and is the fourth largest city in the State.
The City is located in the Metropolitan Statistical Area of Fayetteville/Springdale/Rogers (the "MSA"), which
includes all of Washington and Benton Counties in the northwest corner of the State and is approximately 185 miles
northwest of Little Rock, Arkansas, 110 miles east of Tulsa, Oklahoma, and 210 miles south of Kansas City,
Missouri.
The City is served by U.S. Interstate 540, U.S. Highways 62 and 71, and State Highways 16, 45, 112, 156,
180 and 265. The Burlington Northern Railroad has several lines running through the City, and a general aviation
airport with a 6,006 -foot runway is available for limited commuter travel. The Northwest Arkansas Regional
Airport is located approximately 40 minutes from downtown Fayetteville and provides daily flights to numerous
venues.
Government. The City currently operates under the Mayor -Council form of government pursuant to which
a mayor, city attorney, city clerk and eight aldermen are elected, two from each of the City's four wards. The
mayor, city attorney and city clerk are full-time positions elected to four year terms. Aldermen also serve four year
terms.
The City's elected officials and the dates on which their respective terms expire are as follows:
Name
Office
Term Expires
Dan Coody
Mayor
12/31/08
Kit Williams
City Attorney
12/31/06
Sondra Smith
City Clerk
12/31/08
Kyle Cook
Alderman
12/31/06
Robert Ferrell
Alderman
12/31/08
Lioneld Jordan
Alderman
12/31/08
Shirley Lucas
Alderman
12/31/06
Don Man
Alderman
12/31/08
Robert Reynolds
Alderman
12/31/06
Robert Rhoads
Alderman
12/31/06
Brenda Thiel
Alderman
12/31/08
Population. The following is a table of population changes for the City, the MSA and the State of
Arkansas, according to the United States Census Bureau:
City of
State of
Year
Fayetteville
MSA
Arkansas
1960
20,274
92,069
1,786,272
1970
30,729
127,846
1,923,322
1980
36,608
178,609
2,286,435
1990
42,099
210,908
2,350,624
2000
58,047
311,121
2,673,400
lFI
0
C;
Economic Data. Per capita personal income figures for the MSA and the State of Arkansas are as follows:
State of
Year
MSA
Arkansas
1992
$18,260
$16,425
1993
18,765
16,995
1994
19,590
17,750
1995
20,193
18,546
1996
20,870
19,442
1997
21,586
20,228
1998
22,893
21,256
1999
24,213
22,223
2000
23,316
21,995
2001
24,585
22,750
2002
24,788
23,556
Source: Bureau of Economic Analysis.
Retail sales figures for the MSA and the State are as follows:
MSA
State of
MSA as % of
Year
Arkansas
State of Arkansas
1993
$1,880,105,000
$16,997,721,000
11.06%
1994
2,217,229,000
19,090,516,000
11.61
1995
2,486,425,000
20,998,923,000
11.84
1996
2,692,554,000
22,053,022,000
12.21
1997
2,845,968,000
22,872,236,000
12.44
1998
3,018,896,000
23,944,647,000
12.61
1999*
n/a
n/a
n/a
2000
3,526,791,000
28,488,033,000
12.38
2001
3,806,422,000
29,652,693,000
12.84
2002
3,841,326,000
29,269,775,000
13.12
2003
3,968,812,000
29,920,716,000
13.26
2004
4,470,048,000
31,463,983,000
14.21
* Methodology changed to calendar year basis. No reliable information is available for 1999.
Source: Sales and Marketing Management Survey of Buyer Power.
The following table shows the total assessed value of non -utility real and personal property within the City
for the years indicated:
Year
Real Property
Personal Property
Total
1994
$245,093,513
$ 86,322,277
$331,415,790
1995
340,593,452
101,274,620
441,868,072
1996
359,369,202
113,157,365
472,526,567
1997
382,798,143
120,064,627
502,862,770
1998
401,001,338
127,575,096
528,576,434
1999
413,648,415
137,404,499
551,052,914
2000
432,951,171
145,147,891
578,099,062
2001
486,853,822
155,794,579
642,648,401
2002
541,004,690
158,688,783
699,693,473
2003
565,846,525
167,638,657
733,485,182
2004
649,361,820
183,102,702
832,464,522
Source: Washington County Tax Assessor's Office. The assessed value represents 20% of the appraised value of
property.
16
Li
•
Building permits issued
by the City' ) are
shown below for the years indicated:
2000
2001
2002 2003(�)
2004
Residential Building Permits
361
339
328 735
755
Commercial Building Permits
37
38
35 31
29
Value of All Building Permits
$121,887,263
$85,262,302
$100,809,486 $179,007,987
$164,695,359
(1) Does not include building activity of the University of Arkansas, school permits and additions/alterations to existing structures.
(2) Increase largely due to the permitting of a significant number of multifamily developments as well as an acceleration of permit
requests in advance of the imposition of impact fees by the City.
Source: City of Fayetteville.
Unemployment figures for the MSA and the State of Arkansas, according to the U.S. Bureau of Labor
Statistics, are as follows:
Year
MSA
State of Arkansas
1994
2.4%
5.3%
1995
2.4
4.9
1996
2.9
5.4
1997
3.0
5.3
1998
3.2
5.5
1999
2.4
4.5
2000
2.1
4.4
2001
1.7
5.1
2002
2.4
5.4
2003
3.0
6.3
2004
4.0
5.6
Employment and Industry. The principal campus of the University of Arkansas is located in the City and
had total enrollment for the Spring semester of 2005 of approximately 16,100. For the 2004-05 fiscal year ending
June 30, 2005, the University has an operating budget in excess of $217 million, which does not include the
agricultural experimentation station or other associated operations. On the Fayetteville campus, the University
employs approximately 2,450 faculty, administrative, secretarial, clerical and maintenance personnel in both full-
time and part-time positions, making the University the largest employer in the City.
Other major employers in the City, their products or services and approximate number of employees are set
forth below:
Employer
Pinnacle Foods, International
Superior Industries
Washington Regional Medical Center
Northwest Arkansas Mail
Tyson Foods
Fayetteville School District
City of Fayetteville
Arkansas Western Gas Co.
Ayrshire Electronics
Hanna's
McClinton Anchor Company
Veteran's Admin. Medical Center
Wal-Mart Supercenter
Washington County Government
Source: Fayetteville Chamber of Commerce.
Product or Service
Frozen Dinners
Cast Aluminum Wheels
Medical
Retail (all stores)
Food Products
Education
Government
Utilities
Manufacturing
Potpourri, Soup & Candles
Limestone & Hot Mix
Medical
Retail
Government
Employee Range
1,000-2,499
1,000-2,499
1,000-2,499
1,000-2,499
800-1,599
500-999
300-499
300.499
300-499
300-499
300-499
300-499
300-499
300-499
17
The District. Highway 71 East Square Redevelopment District No. I (the "District") was created pursuant
to Amendment 78 and the Act by Ordinance No. 4608 of the City Council adopted on August 17, 2004, as amended
by Ordinance No. 4662 of the City adopted on December 28, 2004. The District's geographical boundaries were
expanded to their present location by Ordinance No. 4673 adopted on January 25, 2005 and are shown on the
District map attached hereto as Exhibit D. The District encompasses approximately 360.38 acres containing 1,111
separate parcels. The base value of the District real property for 2004 has been certified by the Washington County
Assessor as $31,446,555. Projections of growth in the assessed value of the real property within the District are set
forth in the Feasibility Study of the Highway 71 East Square Redevelopment District No. I (the "Feasibility Study")
prepared by the Center for Business and Economic Research of the Sam Walton College of Business at the
University of Arkansas and attached hereto as Appendix C and under the caption "PROJECTED TAX
INCREMENT AND MANDATORY REDEMPTIONS" herein. SUCH PROJECTIONS ARE BASED ON
NUMEROUS FACTORS, SOME OF WHICH ARE DESCRIBED IN THE FEASIBILITY STUDY. THERE CAN
BE NO ASSURANCE THAT ACTUAL GROWTH IN ASSESSED VALUE OF THE REAL PROPERTY
WITHIN THE DISTRICT WILL APPROXIMATE SUCH PROJECTIONS. See the caption "RISK FACTORS"
herein.
A project plan (the "Project Plan") for the District was adopted by the City pursuant to Ordinance No. 4646
adopted on December 7, 2004. The Project Plan was subsequently amended pursuant to Ordinance No. 4663
adopted on December 28, 2004. The Project Plan is designed to assist the City in the removal of designated blight
within the District and to encourage the commercial and residential redevelopment of real property within the
District, thereby preventing the spread of blighted, deteriorated and deteriorating areas and discouraging the loss of
commerce, industry and employment.
The "catalyst" development in the District to be assisted by the completion of the Project is the
redevelopment of certain blighted property on the eastern side of the City's historic downtown. The primary portion
of this property is the structure previously operated as the Mountain Inn. East Square Development, LLC (the
"Developer") has announced its intentions to construct a $19 million hotel/meeting place/condominium/parking
deck development on the site to be acquired with proceeds of the Series 2005 Bonds. Following completion of the
demolition of the existing structures on the Project site, the Developer intends to purchase the site from the City for
the price of $300,000. The purchase price has been determined based on appraisals obtained by the City. Certain
conditions for the transfer of the Project site are set forth in the Redevelopment Agreement. See the caption "THE
PROJECT" herein.
DEFINITIONS OF CERTAIN TERMS
The following are definitions of certain terms used in this Official Statement:
"Account" means an Account established by Article V of the Indenture.
"Accountant" means an independent certified public accountant or a firm of independent certified public
accountants.
"Accreted Value" means, with respect to each Series 2005 Bond:
(a) for any $5,000 minimum authorized denomination of a Series 2005 Bond, as of any
Accretion Date, the amount set forth in Exhibit C to the Indenture as the Accreted Value of a Series 2005
Bond as of such Accretion Date;
(b) as of any date (for purposes of this paragraph (b), a "Calculation Date") that is not an
Accretion Date, the sum of (i) the Accreted Value determined under paragraph (a) above, as appropriate, as
of the most recent Accretion Date plus (ii) the amount determined pursuant to the following formula:
(A-B)(X/180),
where "A" is the Accreted Value determined under paragraph (a) above as of the Accretion Date
immediately following such Calculation Date; "B" is the Accreted Value determined under paragraph (a)
above as of the most recent Accretion Date; and "X" is the number of days such Calculation Date follows
the most recent Accretion Date, determined assuming that each month in such period contains 30 days.
"Accretion Date" means, with respect to the Series 2005 Bonds, (i) the date on which the Series 2005
Bonds are first issued by the City and February I and August 1 of each year, commencing August 1, 2005.
"Act"
means the enabling
legislation for Amendment 78, codified as
Arkansas Code Annotated (2003
Supp.)
Sections
14-168-30I et seq.,
as from time to time amended.
0 •
"Additional Bonds" means Bonds in addition to the Series 2005 Bonds which are issued under the
provisions of Section 212 of the Indenture.
"Amendment 78" means Amendment No. 78 to the Constitution of Arkansas, approved by the voters of the
State on November 7, 2000.
"Annual Debt Service" means, with respect to all or any particular amount of Bonds, as the case may be,
the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the
amount of such payment which is provided from the proceeds of the sale of Bonds or from sources other than Tax
Increment receipts. With respect to the Series 2005 Bonds, "Annual Debt Service" means the Debt Service for any
particular year which is deemed to accrete or mature as described under the definition of Debt Service set forth
below.
"Authorized Representative" means either the Mayor of the City and such additional person or persons as
from time to time may be designated to act on behalf of the City by a Certificate furnished to the Trustee containing
the specimen signature thereof and executed on behalf of the City by its Mayor.
"Authorizing Ordinance" means Ordinance No. _, adopted by the City on , 2005, which
authorized the issuance of the Series 2005 Bonds pursuant to the Indenture.
"Bond Counsel" means any firm of nationally recognized municipal bond counsel selected by the City and
acceptable to the Trustee.
"Bond Fund" means the fund by that name created and established in the Indenture.
"Bonds" mean the Series 2005 Bonds and all Additional Bonds issued by the City pursuant to the
Indenture.
"Book -Entry System" means the book -entry system maintained by the Securities Depository and described
in the Indenture.
"Certificate" means a document signed by an Authorized Representative of the City attesting to or
acknowledging the circumstances or other matters therein stated.
"City" means the City of Fayetteville, Arkansas, a municipality and political subdivision under the laws of
the State of Arkansas.
"City Clerk" means the person holding the office and performing the duties of the City Clerk of the City.
"Closing Date" means, with respect to any series of Bonds, the date upon which there is an exchange of
such series of Bonds for the proceeds representing the purchase price for such series of Bonds by the Original
Purchaser or Purchasers thereof.
"Code" means the Internal Revenue Code of 1986, as from time to time amended, and applicable
regulations issued or proposed thereunder.
"Completion Date" means the date upon which a particular Project is completed, as certified by a Qualified
Engineer in accordance with the Indenture.
"Continuing Disclosure Agreement" means, collectively, each Continuing Disclosure Agreement between
the City and the Trustee, dated the date of issuance and delivery of a series of Bonds, as originally executed and as
amended from time to time in accordance with the terms thereof.
"Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City
and related to the authorization, sale and issuance of the Bonds, including, but not limited to, underwriting
discounts, fees and expenses, placement agent fees and expenses, publication expenses, expenses of printing,
reproducing, filing and recording documents, initial fees and charges of the Trustee and any Paying Agent, fees and
expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement
for the Bonds, costs of execution, transportation and safekeeping of the Bonds, and other costs, charges and fees
incurred in connection with the foregoing.
"Costs of Issuance Fund" means the fund by that name created and established in the Indenture.
"Debt Service" means, with respect to all or any particular amount of Bonds, the total as of any particular
date of computation and for any particular period of the scheduled amount of interest and amortization of principal
payable on such Bonds, excluding amounts scheduled during such period which relate to principal which has been
retired before the beginning of such period. With respect to the Series 2005 Bonds, "Debt Service" shall include the
increase in Accreted Value during such period of computation and the pro rata portion of principal allocable to such
19
0
period of computation, assuming that the principal of the Series 2005 Bonds matures on a level basis over the life of
the Series 2005 Bonds, but excluding amounts which relate to Series 2005 Bonds which have been retired before the
beginning of such period.
"Developer" means East Square Development, LLC, an Arkansas limited liability company.
"District" means the Highway 71 East Square Redevelopment District No. I created by the City under the
authority of Amendment 78 and the Act pursuant to Ordinance No. 4608 adopted on August 17, 2004, as amended
by Ordinance No.4662 adopted on December 28, 2004. A map of the District is attached hereto as Exhibit D.
"Event of Default" means any event of default specified in Section 801 of the Indenture.
"Fiscal Year" means the 12 -month period used, at any time, by the City for accounting purposes, which
may be the calendar year.
"Fund" means a fund established by the Indenture.
"Government Securities" means (i) bonds, notes, certificates of indebtedness, treasury bills or other
securities constituting direct obligations of, or obligations on which the full and timely payment of principal and
interest is fully and unconditionally guaranteed by, the United States of America (including any such securities
issued or held in book -entry form on the books of the Department of Treasury of the United States of America), and
(ii) evidences of direct ownership or proportionate or individual interest in future interest or principal payments on
specified direct obligations of, or obligations on which the full and timely payment of principal and interest is fully
and unconditionally guaranteed by, the United States of America, which obligations are held by a bank or trust
company organized and existing under the laws of the United States of America or any state thereof in the capacity
of custodian in form and substance satisfactory to the Trustee.
"Holder" or "Bondholder" or "owner of the Bonds" means the registered owner of any Bond.
"Indenture" means the Trust Indenture dated as of April 15, 2005, between the City and the Trustee,
pursuant to which the Bonds are issued, and any further amendments and supplements thereto.
"Investment Securities" means, if and to the extent the same are at the time legal for investment of Funds
and Accounts held under the Indenture:
(a) Government Securities;
(b) bonds, notes or other obligations of any state of the United States of America or any
political subdivision of any state, which at the time of their purchase are rated in either of the two highest
rating categories by a nationally recognized Rating Agency;
(c) certificates of deposit or time or demand deposits constituting direct obligations of any
bank, bank holding company, savings and loan association or trust company organized under the laws of
the United States of America or any state thereof (including the Trustee or any of its affiliates), except that
investments may be made only in certificates of deposit or time or demand deposits which are:
(1) insured by the Federal Deposit Insurance Corporation, or any other similar
United States Government deposit insurance program then in existence; or
(2) continuously and fully secured by Government Securities, which have a market
value, exclusive of accrued interest, at all times at least equal to the principal amount of such
certificates of deposit or time or demand deposits;
(d) short term discount obligations of the Federal National Mortgage Association and the
Government National Mortgage Association; and
(e) money market mutual funds (t) that invest in Government Securities or that are
registered with the federal Securities and Exchange Commission (SEC), meeting the requirements of Rule
2a-7 under the Investment Company Act of 1940, and (2) that are rated in either of the two highest
categories by a nationally recognized Rating Agency.
"Mayor" means the person holding the office and performing the duties of the Mayor of the City.
"Original Purchaser" means the first purchaser(s) of a series of Bonds from the City.
20
"Outstanding" means, as of any date of computation, Bonds theretofore or thereupon being delivered under
the Indenture, except:
(a) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or
prior to such date for cancellation;
(b) Bonds deemed to be paid in accordance with Article VII of the Indenture; and
(c) Bonds in lieu of or in exchange or substitution for which other Bonds shall have been
authenticated and delivered pursuant to the Indenture.
"Participants" means those financial institutions for which the Securities Depository effects book -entry
transfers and pledges of securities deposited with the Securities Depository in the Book -Entry System, as such
listing of Participants exists at the time of such reference.
"Paying Agent" means any bank or trust company named by the City as the place at which the principal of
and premium, if any, and interest on the Bonds are payable.
"Person" means any natural person, firm, association, corporation, limited liability company, partnership,
joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or
political subdivision thereof or other public body.
"Project" means the acquisition of certain real property, which property is located within the District and
consists primarily of the former Mountain Inn property and surrounding parcels, the demolition of the majority of
the existing structures thereon, site preparation in connection therewith, and the completion of certain sidewalk and
crosswalk improvements.
"Project Costs" shall have the meaning set forth in the Act, and shall include all costs of planning,
designing, purchasing, acquiring, constructing, reconstructing, improving, enlarging, extending, repairing, financing
and placing in a Project in operation, including the demolition of existing structures, and the costs of obtaining
governmental approvals, certificates, permits and licenses with respect thereto, heretofore or hereafter paid or
incurred by or on behalf of the City and which shall include, but shall not be limited to:
(a) preliminary investigation and development costs, engineering fees, contractors' fees,
labor costs, the cost of materials, equipment, utility services and supplies, costs of obtaining permits,
licenses and approvals, costs of real property, insurance premiums, legal and financing fees and costs,
administrative and general costs, and all other costs properly allocable to the acquisition, construction,
reconstruction, improving, extending and equipping of the Project and placing the same in operation;
(b) all costs relating to injury and damage claims arising out of the acquisition, construction
or equipping of the Project;
(c) all other costs incurred in connection with, and properly allocable to, the acquisition,
construction, reconstruction, improving, extending and equipping of the Project; and
(d) amounts to pay or reimburse the City or any City fund for expenses of the City incident
and properly allocable to such planning, designing, purchasing, acquiring, constructing, reconstructing,
improving, enlarging, extending, repairing, financing and placing in operation of the Project.
"Project Fund" means the fund by that name created and established in the Indenture.
"Qualified Engineer" means either (i) the City's Building Services Director and Project Manager or (ii) an
independent consulting engineer or firm of independent consulting engineers not in the regular employ of the City.
"Rating Agency" means Moody's Investors Service, Standard & Poor's, a Division of The McGraw-Hill
Companies, Inc., or Fitch, Inc., and their respective successors and assigns. If any such corporation ceases to act as
a securities rating agency, the City may appoint any nationally recognized securities rating agency as a replacement.
"Rebate Fund" means the fund by that name created and established in the Indenture.
"Redemption Date" means the fund by that name established in the Indenture.
"Redevelopment Agreement" means that certain agreement dated as of March 15, 2005, between the City
and the principals of the Developer, in connection with the Project.
"Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized
Representative including, without limitation, the following with respect to each payment requested:
21
0
(i) the name of the Person or party to whom payment is to be made and the purpose of the
payment,
(ii) the amount to be paid thereunder;
(iii) that such amount has not been previously paid by the City and is justly due and owing to
the Person(s) named therein as a proper payment or reimbursement of a Project Cost; and
(iv) that no Event of Default exists under the Indenture and that, to the knowledge of the
Authorized Representative, no event has occurred and continues which with notice or lapse of time or both
would constitute an Event of Default under the Indenture.
"Revenue Fund" means the fund by that name created and established in the Indenture.
"Securities Depository" means The Depository Trust Company, New York, New York, or its nominee, and
its successors and assigns.
"Series 2005 Bonds" means the City's Tax Increment Interest Accretion Bonds (Highway 71 East Square
Redevelopment District No. 1), Series 2005, issued under and secured by the Indenture in the aggregate principal
amount of $3,735,000*.
"State" means the State of Arkansas.
"Supplemental Indenture" means any indenture supplemental to or amendatory of the Indenture.
"Tax Increment" shall have the meaning set forth in the Act, as determined by multiplying the incremental
value of the real property within the District by the maximum applicable ad valorem rate permitted pursuant to the
Act.
"Tax Regulatory Agreement" means with respect to any series of Bonds, that Tax Regulatory Agreement of
the City relating to maintenance of the excludability of interest on such Bonds from gross income for federal income
tax purposes, delivered in connection with the issuance of such series of Bonds.
"Trustee" means the banking
corporation or association
designated
as Trustee in the Indenture, and its
successor or successors as such Trustee.
The original Trustee is
"Trust Estate" means the property described in the granting clauses of the Indenture.
Preliminary; subject to change.
SUMMARY OF THE INDENTURE
The following statements are brief summaries of certain provisions of the Indenture. The statements do not
purport to be complete, and reference is made to the Indenture, copies of which are available for examination at the
offices of the Finance and Internal Services Director of the City, for a full statement thereof.
Funds and Accounts. Tax Increment receipts are pledged by the Indenture to the payment of the principal
of, premium, if any, and interest on the Bonds. The following Funds and Accounts have been established with the
Trustee in connection with the Bonds:
Funds and Accounts
Revenue Fund
Bond Fund
Redemption Fund
Project Fund
Cost of Issuance Fund
Rebate Fund
Application of Tax Increment Receipts. The application of Tax Increment receipts is as follows:
(a) Revenue Fund. All Tax Increment receipts shall, as and when
received, be
deposited into the
Revenue Fund. All
moneys at any time in the Revenue Fund shall be applied on a
monthly basis to the payment of
any arbitrage rebate
due under Section 148(1) of the Code, to the payment of fees
and expenses
of the Trustee and
22
any Paying Agent, and to the early redemption of the Series 2005 Bonds, at the times and in the amounts set forth as
follows:
(b) Redemption Fund. After making any required deposits into the Rebate Fund and after paying the
fees and expenses of the Trustee and any Paying Agent, there shall be paid from the Revenue Fund into the
Redemption Fund all remaining moneys in the Revenue Fund. Moneys in the Redemption Fund shall be transferred
to the Bond Fund at such times as may be necessary to effectuate redemptions of the Series 2005 Bonds on the first
available redemption date. There shall also be transferred to the credit of the Redemption Fund moneys in the
Project Fund not needed to complete the Project and the first $120,000 of any proceeds realized by the City upon the
sale of any of the real property originally acquired with the proceeds of the Series 2005 Bonds. See the captions
"THE SERIES 2005 Bonds — Redemption" and "PROJECTED TAX INCREMENT AND MANDATORY
REDEMPTIONS" herein.
(c) Bond Fund. On any redemption date for the Series 2005 Bonds, the Trustee shall transfer to the
Bond Fund from the Redemption Fund an amount equal to the Accreted Amount of each Series 2005 Bond being
redeemed on such date unless payment of such amount shall be otherwise provided for. Moneys in the Bond Fund
shall be used solely for the purpose of paying Annual Debt Service on the Bonds upon redemption or final maturity.
The Trustee shall withdraw from the Bond Fund, on the date of maturity or final redemption, an amount equal to the
Accreted Value of the Series 2005 Bonds maturing or being called for redemption for the sole purpose of paying the
same.
(d) Project Fund. A portion of the proceeds of the Series 2005 Bonds shall be deposited in the Project
Fund. See the caption "ESTIMATED SOURCES AND USES OF FUNDS" herein. In addition, upon the sale by
the City of any portion of the real property originally acquired with the proceeds of the Series 2005 Bonds, sale
proceeds in excess of $120,000 shall be deposited in the Project Fund. Amounts in the Project Fund shall be
expended only for the payment or reimbursement of Project Costs upon the submission of Requisitions by the City
to the Trustee; provided, however, expenditures related to the sidewalk and crosswalk construction components of
the Project shall be made only from the property sale proceeds described in the preceding sentence. The Trustee
shall only make payments from the Project Fund pursuant to and in accordance with Requisitions. Within ninety
(90) days following completion of the Project (not including the sidewalk and crosswalk improvements), the City
shall deliver to the Trustee its Certificate stating that the Project is complete and the Trustee shall transfer the
remaining moneys in the Project Fund (save and except moneys needed to satisfy unpaid Project Costs) to the
Redemption Fund for application to the retirement of the Series 2005 Bonds. See the caption "THE SERIES 2005
Bonds — Redemption" herein.
(e) Cost of Issuance Fund. A portion of the proceeds of the Series 2005 Bonds shall be deposited to
the credit of the Cost of Issuance Fund. The Trustee shall pay those Costs of Issuance as directed by the City
pursuant to a Certificate delivered on a Closing Date. After all Costs of Issuance have been paid with respect to the
Series 2005 Bonds, any remaining moneys in the. Cost of Issuance Fund shall be transferred to the Bond Fund.
(t) Rebate Fund. The Trustee shall establish and maintain, separate and apart from any other Funds
and Accounts established and maintained under the Indenture, the Rebate Fund, which Fund is not pledged to the
payment of the Bonds. Subject to transfer to the United States in payment of any arbitrage rebate due under Section
148(1) of the Code, all moneys at any time deposited in the Rebate Fund shall be held by the Trustee in trust, and
neither the City nor the Owner of any Bond shall have any rights in or claim to such money. Any amounts
remaining in the Rebate Fund after payment in full of the rebate amount owing to the United States, within sixty
(60) days after the date on which the last Bond is redeemed, shall be transferred to the Revenue Fund.
Investment of Funds. At the direction of the City or absent such direction, the Trustee shall invest moneys
in Funds or Accounts held by the Trustee in Investment Securities with maturity or redemption dates consistent with
the times at which said moneys will be required for the purposes provided in the Indenture. Moneys in separate
Funds or Accounts may be commingled for the purpose of investment.
Obligations purchased as an investment of moneys in any Fund or Account created by the Indenture shall
be deemed at all times to be a part of such Fund or Account, and any income or loss due to an investment thereof
shall be charged to the respective Fund or Account for which the investment was made except as otherwise provided
in the Indenture.
Investments in any Fund or Account shall be evaluated at least annually by the Trustee. For the purpose of
determining the amount in any Fund or Account, the City and the Trustee shall value all Investment Securities
credited to such Fund or Account at the price at which such Investment Securities are redeemable by the Holders or
owners thereof at their option if so redeemable, or, if not so redeemable, at the lesser of (i) the cost of such
23
Investment Securities minus the amortization of any premium or plus the amortization of any discount thereon and
(ii) the market value of such Investment Securities.
The Trustee shall sell or present for redemption any Investment Securities as necessary in order to provide
money for the purpose of making any payment required under the Indenture, and the Trustee shall not be liable for
any loss resulting from any such sale.
Responsibility of Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection
with any investment of moneys made by it at the direction of the City.
Instruments of Further Assurance. At any and all times the City shall, so far as it may be authorized by
law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, ordinances, acts,
deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring,
conveying, granting, pledging, assigning and confirming of all and singular the receipts from the Tax Increment and
all other moneys pledged or assigned by the Indenture, or intended so to be, or which the City may become bound to
pledge or assign.
Tax Covenants. The City shall not use or permit the use of any Bond proceeds or any other funds of the
City, directly or indirectly, in any manner, and will not take or permit to be taken any other action or actions which
would adversely effect the exclusion of interest on any Bond from gross income for federal income tax purposes.
No part of the proceeds of the Bonds shall at any time be used, directly or indirectly, to acquire securities or
obligations the acquisition of which would cause any of such Bonds to be an "arbitrage bond" as defined in Sections
148(a) and (b) of the Code. The City agrees that so long as any of the Bonds remain Outstanding, it will comply
with the provisions of each applicable Tax Regulatory Agreement.
Defeasance. Any Bond shall be deemed to be paid within the meaning of the Indenture when payment of
the principal of and premium, if any, and interest on such Bond (whether at maturity or upon redemption as provided
in the Indenture, or otherwise), either (i) shall have been made or caused to be made in accordance with the terms
thereof, or (ii) shall have been provided for by irrevocably depositing with the Trustee, in trust and irrevocably set
aside exclusively for such payment, (1) moneys sufficient to make such payment or (2) Government Securities
(provided that such deposit will not affect the tax-exempt status of the interest on any of the Bonds or cause any of
the Bonds to be classified as "arbitrage bonds" within the meaning of Section 148(a) of the Code, as reflected in an
opinion of Bond Counsel delivered to the Trustee), maturing as to principal and interest in such amounts and at such
times as will provide sufficient moneys to make such payment, and all necessary and proper fees, compensation and
expenses of the Trustee and any Paying Agent pertaining to the Bonds with respect to which such deposit is made
shall have been paid or the payment thereof provided for to the satisfaction of the Trustee and any said Paying
Agent.
Events of Default. Each of the following events shall constitute and is referred to in the Indenture as an
"Event of Default":
(a) Default in the due and punctual payment of any interest on any Bond;
(b) Default in the due and punctual payment of the principal of or premium, if any, on any Bond,
whether at the stated maturity thereof, or upon proceedings for redemption thereof, or upon the maturity thereof by
declaration;
(c) Default in the payment of any other amount required to be paid under the Indenture or the
performance or observance of any other of the covenants, agreements or conditions contained in the Indenture, or in
the Bonds issued under the Indenture, and continuance thereof for a period of sixty (60) days after written notice
specifying such failure and requesting that it be remedied, shall have been given to the City by the Trustee, which
may give such notice in its discretion and shall give such notice at the written request of Holders of not less than
fifty-one percent (51%) in aggregate principal amount of the Bonds then Outstanding, unless the Trustee, or the
Trustee and Holders of an aggregate principal amount of Bonds not less than the aggregate principal amount of
Bonds the Holders of which requested such notice, as the case may be, shall agree in writing to an extension of such
period prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the
applicable period, the Trustee will not unreasonably withhold its consent to an extension of such time if corrective
action is instituted by the City within such period and is being diligently pursued;
(d) The filing of a petition in bankruptcy by or against the City under the United States Bankruptcy
Code or the commencement of a proceeding by or against the City under any other law concerning insolvency,
reorganization or bankruptcy; and
24
(e) If the State has limited or altered the rights of the City pursuant to the Act, as in force on the date
of the Indenture, to fulfill the terms of any agreements made with the Trustee or the Bondholders or in any way
impaired the rights and remedies of the Trustee or the Bondholders while any Bonds are Outstanding.
The term "default" as used in clauses (a), (b) and (c) above shall mean default by the City in the
performance or observance of any of the covenants, agreements or conditions on its part contained in the Indenture,
or in the Bonds Outstanding thereunder, exclusive of any period of grace required to constitute a default an "Event
of Default" as described above.
Acceleration. Upon the occurrence of an Event of Default, the Trustee may, and upon the written request
of the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding shall, by notice in writing
delivered to the City, declare the principal of all Bonds then Outstanding, together with any premium and the
interest accreted thereon, immediately due and payable, and such principal and interest shall thereupon become and
be immediately due and payable.
Other Remedies; Rights of Bondholders. Upon the occurrence of an Event of Default, the Trustee may, as
an alternative, pursue any available remedy by suit at law or in equity, including, without limitation, mandamus to
enforce the payment of the principal of and premium, if any, and interest on the Bonds then Outstanding.
If an Event of Default shall have occurred, and if it shall have been requested so to do by the Holders of
51% in aggregate principal amount of Bonds Outstanding and if it shall have been indemnified as provided in the
Indenture, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred upon it by
the Indenture as the Trustee, being advised by counsel, shall deem most expedient in the interests of the
Bondholders.
No remedy by the terms of the Indenture conferred upon or reserved to the Trustee (or to the Bondholders)
is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in
addition to any other remedy given under the Indenture or now or hereafter existing at law or in equity or by statute.
No delay or omission to exercise any right or power accruing upon any default or Event of Default shall
impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or
acquiescence therein; and every such right and power may be exercised from time to time and as often as may be
deemed expedient.
No waiver of any default or Event of Default under the Indenture, whether by the Trustee or by the
Bondholders, shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or
remedies consequent thereon.
Rights and Remedies of Bondholders. No Holder of any Bond shall have any right to institute any suit,
action or proceeding in equity or at law for the enforcement of the Indenture or for the execution of any trust thereof
or for the appointment of a receiver or any other remedy thereunder, unless a default has occurred of which the
Trustee has been notified as provided in the Indenture, or of which by the Indenture it is deemed to have notice, nor
unless such default shall have become an Event of Default and the Holders of not less than 51% in aggregate
principal amount of Bonds Outstanding shall have made written request to the Trustee and shall have offered it
reasonable opportunity either to proceed to exercise the powers granted or to institute such action, suit, or
proceeding in its own name, nor unless also they have offered to the Trustee indemnity as provided in the Indenture
nor unless the Trustee shall thereafter fail or refuse to exercise the powers granted, or to institute such action, suit, or
proceeding in its own name; and such notification, request and offer of indemnity are declared in every such case at
the option of the Trustee to be conditions precedent to the execution of the powers and trusts of the Indenture, and to
any action or cause of action for the enforcement of the Indenture or for the appointment of a receiver or for any
other remedy thereunder; it being understood and intended that no one or more Holders of the Bonds shall have any
right in any manner whatsoever to affect, disturb or prejudice the lien of the Indenture by action of the Holder or
Holders or to enforce any right under the Indenture except in the manner therein provided, and that all proceedings
at law or in equity shall be instituted, held and maintained in the manner therein provided for the equal benefit of the
Holders of all Bonds Outstanding thereunder. Nothing in the Indenture contained shall, however, affect or impair
the right of any Bondholders to enforce the payment of the principal of and premium, if any, and interest on any
Bonds at and after the maturity thereof, or the obligation of the City to pay the principal of and premium, if any, and
interest on each of the Bonds issued under the Indenture to the respective Holders thereof at the time and place in
said Bonds expressed.
Supplemental Indentures Not Requiring Consent of Bondholders. The City and the Trustee may, from time
to time and at any time, without the consent of or notice to the Bondholders, enter into Supplemental Indentures as
follows:
25
(a) to cure any formal defect, omission, inconsistency or ambiguity in the Indenture;
(b) to grant to or confer or impose upon the Trustee for the benefit of the Bondholders any additional
rights, remedies, powers, authority, security, liabilities or duties which may lawfully be granted, conferred or
imposed and which are not contrary to or inconsistent with the Indenture as theretofore in effect, provided that no
such additional liabilities or duties shall be imposed upon the Trustee without its consent;
(c) to add to the covenants and agreements of, and limitations and restrictions upon, the City in the
Indenture other covenants, agreements, limitations and restrictions to be observed by the City which are not contrary
to or inconsistent with the Indenture as theretofore in effect;
(d) to confirm, as further assurance, any pledge under, and the subjection to any claim, lien or pledge
created or to be created by, the Indenture, of the Trust Estate or of any other moneys, securities or funds;
(e) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time
amended;
(f) to authorize the issuance and sale of one or more series of Additional Bonds;
(g) to make such additions, deletions or modifications as may be necessary to assure compliance with
Section 148(f) of the Code relating to required rebate to the United States or otherwise as may be necessary to assure
exemption from federal income taxation of interest on the Bonds; or
(h) to modify, alter, amend or supplement the Indenture in any other respect which is not materially
adverse to the Bondholders and which does not involve a change described in clause (a), (b), (c), (d), (e) or (f) below
and which, in the judgment of the Trustee, is not to the prejudice of the Trustee.
Supplemental Indentures Requiring Consent of Bondholders. Subject to the terms and provisions contained
in this paragraph, and not otherwise, the Holders of not less than 2/3 in aggregate principal amount of the Bonds
then Outstanding shall have the right, from time to time, anything contained in the Indenture to the contrary
notwithstanding, to consent to and approve the execution by the City and the Trustee of such indenture or indentures
supplemental to the Indenture as shall be deemed necessary and desirable by the City for the purpose of modifying,
altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in the
Indenture or in any Supplemental Indenture; provided, however, that nothing contained in the Indenture shall permit
or be construed as permitting (a) an extension of the maturity (or mandatory redemption date) of the principal of or
the interest on any Bond issued thereunder, or (b) a reduction in the principal amount of or redemption premium or
rate of interest on any Bond issued thereunder, or (c) the creation of any lien on the Trust Estate or any part thereof,
except as expressly permitted in the Indenture, or (d) a privilege or priority of any Bond or Bonds over any other
Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such
Supplemental Indenture, or (f) depriving the Holder of any Bond then Outstanding of the lien created on the Trust
Estate.
If, at any time the City shall request the Trustee to enter into any Supplemental Indenture for any of the
purposes described above, the Trustee shall, at the expense of the City, cause notice of the proposed execution of
such Supplemental Indenture to be mailed by first class mail to each registered owner of the Bonds. Such notice
shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file
at the principal office of the Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to
any liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the
validity of such Supplemental Indenture when consented to and approved as provided above. If the Holders of not
less than 2/3 in aggregate principal amount of the Bonds Outstanding at the time of the execution of any such
Supplemental Indenture shall have consented to and approved the execution thereof, no Holder of any Bond shall
have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any
manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from
executing the same or from taking any action pursuant to the provisions thereof.
SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT
The City has entered into an undertaking in the form of the Continuing Disclosure Agreement as required
by the Indenture for the benefit of the Beneficial Owners of the Series 2005 Bonds to cause certain financial
information to be sent to certain information repositories annually and to cause notice to be sent to such information
repositories of certain specified events, pursuant to the requirements of Section (b)(5)(i) of Rule 15c2-12 of the
Securities Exchange Act of 1934, as amended (the "Rule"). The City has not failed to comply with any previous
undertaking pursuant to the Rule.
26
The Continuing Disclosure Agreement contains the following covenants and provisions:
(a) The City shall, not later than August l of each year, commencing August 1, 2005, provide to each
Repository and the Trustee its Annual Financial Information consistent with the requirements of subsection (d)
below.
(b) If, on the date specified in subsection (a) above for providing the Annual Financial Information to
Repositories, the Trustee has not received a copy of the Annual Financial Information, the Trustee shall contact the
Disclosure Representative to determine if the City is in compliance with subsection (a).
(c) If the Trustee is unable to verify that the Annual Financial Information has been provided to the
Repositories by the date required within subsection (a), the Trustee shall file a notice to such effect with the
Repositories and the MSRB.
(d) The City's Annual Financial Information shall contain or incorporate by reference the following:
(i) Tax Increment receipts during the latest Fiscal Year and for all previous Fiscal
Years;
(ii) The most recent determination of the "incremental value" (as defined in the Act)
of real property within the District and all such previous determinations;
(iii) The total principal amount and Accreted Value of all Series 2005 Bonds
Outstanding as of the end of the latest Fiscal Year and as of the end of each previous Fiscal Year;
and
(iv) The principal amount and Accreted Value of all Series 2005 Bonds redeemed
during the latest Fiscal Year and such amounts as were redeemed in previous Fiscal Years.
(e) The City has agreed to instruct the Trustee to deliver to each National Repository, or the MSRB
and the Arkansas State Repository, notice of the occurrence of any of the following Specified Events, if deemed
material:
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults;
(iii) Unscheduled draws on any debt service reserve reflecting financial difficulties;
(iv) Unscheduled draws on any credit enhancement reflecting financial difficulties;
(v) Substitution of any credit or liquidity providers, or their failure to perform;
(vi) Adverse tax opinions or events affecting the tax-exempt status of the Series 2005 Bonds;
(vii) Modifications to rights of Bondowners;
(viii) Bond calls;
(ix) Defeasances;
(x) Release, substitution or sale of property securing payment of the Series 2005 Bonds; or
(xi) Rating changes.
(I) The City has agreed that the foregoing undertakings shall be for the benefit of the Beneficial
Owners of the Series 2005 Bonds, and shall be enforceable by any Beneficial Owner of the Series 2005 Bonds in an
action for specific performance against the City.
(g) The continuing obligation of the City to provide Annual Financial Information and notice of the
occurrence of Specified Events, if material, will terminate if the City is no longer an "obligated person" within the
meaning of the Rule or upon the maturity, defeasance, prior redemption or payment in full of the Series 2005 Bonds.
The City and the Trustee may amend the Continuing Disclosure Agreement, and any provision of the Continuing
Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel,
reasonably acceptable to each of the City and the Trustee, to the effect that such amendment or waiver would not, in
and of itself, cause the undertakings under the Continuing Disclosure Agreement to violate the Rule, taking into
account any subsequent change in or official interpretation of the Rule.
27
(h) The following terms used under this caption shall have the meanings set forth below:
"Annual Financial Information" means the annual financial information to be provided by the City of the
type described in the Continuing Disclosure Agreement.
"Arkansas State Repository" means any public or private repository or entity as may be designated by the
State of Arkansas as a state repository for purposes of the Rule and recognized as such by the SEC. As of the date
of the Continuing Disclosure Agreement, there is no Arkansas State Repository.
"Beneficial Owner" means any Person which has the power, directly or indirectly, to vote or consent with
respect to, or to dispose of ownership of, any Series 2005 Bonds, including Persons holding Series 2005 Bonds
through nominees or depositories.
"Disclosure Representative" means the City's Finance and Internal Services Director or his or her designee,
or such other officer or employee as the City shall designate in writing to the Trustee from time to time.
"Fiscal Year" means the 12 -month period used, at any time, by the City for accounting purposes, which
may be the calendar year. The City's fiscal year presently ends on December 31.
"MSRB" means the Municipal Securities Rulemaking Board.
"National Repository" means any nationally recognized municipal securities information repository for
purposes of the Rule.
"Participating Underwriter" means Crews & Associates, Inc.
"Repository" means each National Repository and the Arkansas State Repository.
"Specified Events" means each of the events with respect to the Series 2005 Bonds listed in subsection (e)
above.
(i) A failure by the City to comply with the provisions of the Continuing Disclosure Agreement will
not constitute an Event of Default under the Indenture, and the sole remedy in such an event shall be an action to
compel specific performance. Nevertheless, such a failure to comply must be reported in accordance with the Rule
and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or
sale of the Series 2005 Bonds in the secondary market. Consequently, such a failure may adversely affect the
transferability and liquidity of the Series 2005 Bonds.
UNDERWRITING
Under a bond purchase agreement entered into by and among the City and Crews & Associates, Inc. (the
"Underwriter"), the Series 2005 Bonds are being purchased at a purchase price of $ (representing the
stated principal amount of the Series 2005 Bonds less an underwriting discount of $ ). The bond purchase
agreement provides that the Underwriter will purchase all of the Series 2005 Bonds if any are purchased. The
obligation of the Underwriter to accept delivery of the Series 2005 Bonds is subject to various conditions contained
in the bond purchase agreement, including the absence of pending or threatened litigation questioning the validity of
the District or the Series 2005 Bonds or any proceedings in connection with the issuance thereof, and the absence of
material adverse changes in the financial condition of the City.
The Underwriter intends to offer the Series 2005 Bonds to the public initially at the offering prices as set
forth on the cover page of this Official Statement, which offering prices (or bond yields establishing such offering
prices) may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join
with dealers and other underwriters in offering the Series 2005 Bonds to the public, and may offer the Series 2005
Bonds to such dealers and other underwriters at a price below the public offering price.
The City has
agreed
to indemnify the Underwriter
against certain
civil liabilities in connection with the
offering and sale of the
Series
2005 Bonds, including certain
liabilities under
federal securities laws.
TAX MATTERS
Federal Income Taxes. In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations,
rulings and judicial decisions, interest on the Series 2005 Bonds is excluded from gross income for federal income
tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. The opinion
described in the preceding sentence assumes the accuracy of certain representations and compliance by the City with
covenants designed to satisfy the requirements of the Code that must be satisfied subsequent to the issuance of the
Series 2005 Bonds. Failure to comply with certain of such requirements may cause interest on the Series 2005
Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the
Series 2005 Bonds. The City has covenanted to comply with such requirements.
Notwithstanding Bond Counsel's opinion that interest on the Series 2005 Bonds is not a specific preference
item for purposes of the federal alternative minimum tax, such interest will be included in adjusted current earnings
of certain corporations, and such corporations are required to include in the calculation of alternative minimum
taxable income 75% of the excess of such corporation's adjusted current earnings over its alternative minimum
taxable income (determined without regard to such adjustment and prior to reduction for certain net operating
losses).
Bond Counsel has expressed no opinion regarding other federal tax consequences arising with respect to
the Series 2005 Bonds.
The accrual or receipt of interest on the Series 2005 Bonds may otherwise affect the federal income tax
liability of the owners of the Series 2005 Bonds. The extent of these other tax consequences will depend upon such
owner's particular tax status and other items of income or deduction. Bond Counsel has expressed no opinion
regarding any such consequences. Purchasers of the Series 2005 Bonds, particularly purchasers that are
corporations (including S corporations and foreign corporations operating branches in the United States), property or
casualty insurance companies, banks, thrifts or other financial institutions, certain recipients of Social Security or
Railroad Retirement benefits, taxpayers otherwise entitled to claim the earned income credit, or taxpayers who may
be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, should consult
their tax advisors as to the tax consequences of purchasing or owning the Series 2005 Bonds.
Changes in Federal Tax Law. From time to time, there are legislative proposals in the Congress that, if
enacted, could alter or amend the federal tax matters referred to above or adversely affect the market value of the
Series 2005 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether
if enacted it would apply to bonds issued prior to enactment. Purchasers of the Series 2005 Bonds should consult
their tax advisors regarding any pending or proposed tax legislation. The opinions expressed by Bond Counsel are
based upon existing legislation as of the date of issuance and delivery of the Series 2005 Bonds, and Bond Counsel
has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation.
State Taxes. Bond Counsel is of the opinion that, under existing law, the interest on the Series 2005 Bonds
is exempt from all state, county and municipal taxes in the State of Arkansas.
LEGAL MATTERS
Legal Opinions. Legal matters incident to the authorization and issuance of the Series 2005 Bonds are
subject to the unqualified approving opinion of Kutak Rock LLP, Little Rock, Arkansas, Bond Counsel, a copy of
whose approving opinion will be delivered with the Series 2005 Bonds and a form of which is attached hereto as
Appendix A. Certain legal matters will be passed upon for the City by its counsel, Kit Williams, Esq., City
Attorney.
Litigation. There is no litigation pending seeking to restrain or enjoin the issuance or delivery of the Series
2005 Bonds or questioning or affecting the legality of District or of the Series 2005 Bonds or the proceedings and
authority under which the Series 2005 Bonds are to be issued, or questioning the right of the City to issue the Series
2005 Bonds. There is no action, suit or proceeding known to be pending or threatened, restraining or enjoining the
City in any way which could have a material adverse effect on the City or its financial affairs.
MISCELLANEOUS
Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not
so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of
the estimates will be realized. This Official Statement is not to be construed as a contract or agreement between the
City and the purchasers or owners of any of the Series 2005 Bonds.
al
ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT
The information contained in this Official Statement has been taken from sources considered to be reliable,
but is not guaranteed. To the best of the knowledge of the City, this Official Statement does not include any untrue
statement of a material fact, nor does it omit the statement of any material fact required to be stated herein, or
necessary to make the statements herein, in light of the circumstances under which they were made, not misleading.
The execution and delivery of this Official Statement has been duly authorized by the City of Fayetteville,
Arkansas.
CITY OF FAYETTEVILLE, ARKANSAS
By:
Mayor
30
APPENDIX A
PROPOSED FORM OF BOND COUNSEL OPINION
Kutak Rock LLP, Bond Counsel, will render an opinion with respect to the Series 2005 Bonds, dated the
date of issuance and delivery thereof, in substantially the following form:
April __, 2005
City of Fayetteville, Arkansas
Fayetteville, Arkansas
, as Trustee
Arkansas
Crews & Associates, Inc.
Little Rock, Arkansas
$3,735,000*
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. I Project)
Series 2005
Ladies and Gentlemen
We have acted as bond counsel in connection with the issuance and sale by the City of Fayetteville,
Arkansas (the "City"), a political subdivision of the State of Arkansas, of its $3,735,000• Tax Increment Interest
Accretion Bonds (Highway 71 East Square Redevelopment District No. I Project), Series 2005 (the "Bonds").
The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of
Arkansas, including, particularly, Amendment 78 and Arkansas Code Annotated (Supp. 2003) §§14-168-301 et seq.
(as from time to time amended, the "Act"), pursuant to Ordinance No. _ of the City, duly adopted and approved
on 2005 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of April 15, 2005 (the
"Indenture"), by and between the City and , as trustee (the "Trustee"). Reference is
hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with
respect to the conditions for the issuance of parity debt by the City, the nature and extent of the security for the
Bonds, the rights, duties and obligations of the City, the Trustee and the Holders of the Bonds, and the terms upon
which the Bonds are issued and secured.
Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of
which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the
power of the City to adopt the Authorizing Ordinance and to enter into and perform its obligations under the
Indenture, the valid adoption of the Authorizing Ordinance, and the due authorization, execution and delivery of the
Indenture by the City, and with respect to the Indenture being enforceable upon the City.
We have examined the law and such certified proceedings and other papers as we have deemed necessary
to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the
City contained in the Authorizing Ordinance and the Indenture and in the certified proceedings and other
certifications of public officials furnished to us, without undertaking to verify the same by independent
investigation.
* Preliminary; subject to change.
A-1
Based upon the foregoing, we are of the opinion, under existing law, as follows:
1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas.
Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 78 and the Act,
the City is empowered to adopt the Authorizing Ordinance, to execute and deliver the Indenture, to perform the
agreements on its part contained therein, and to issue the Bonds.
2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding
obligation of the City enforceable upon the City in accordance with its terms.
3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and
binding obligation of the City enforceable upon the City in accordance with its terms.
4. The Bonds have been validly authorized, executed, issued and delivered by the City and represent
valid and binding special obligations of the City. The principal, premium, if any, and interest on the Bonds shall be
payable from, and shall be secured by an assignment and pledge by the City to the Trustee of, the receipts of the Tax
Increment (as defined in the Indenture), subject to a parity pledge of such receipts securing any Additional Bonds (as
such term is defined in the Indenture) issued hereafter.
5.
The Tax Increment receipts have been duly
and validly
assigned
and pledged to the Trustee under
the Indenture.
6. Interest on the Bonds is excluded from gross income for federal income tax purposes and is not a
specific preference item for purposes of the federal alternative minimum tax. The opinion described in the
preceding sentence assumes the accuracy of certain representations and compliance by the City with covenants
designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended, that must be met subsequent
to the issuance of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be
included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City
has covenanted to comply with such requirements.
7. The interest on the Bonds is exempt from all state, county and municipal taxes in the State of
Arkansas.
8. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and
the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended, in connection with
the offer and sale of the Bonds.
It is to be understood that the rights of the registered owners of the Bonds and the enforceability of the
Bonds, the Authorizing Ordinance and the Indenture may be subject to bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent
constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in
appropriate cases.
Very truly yours,
A-2
APPENDIX B
SERIES 2005 ACCRETION SCHEDULE
Date Accreted Value of a $5,000 Bond
4-19-05
$ 5,000.00
8-1-05
5,092.08
2-1-06
5,257.58
8-1-06
5,428.45
2-1-07
5,604.87
8-1-07
5,787.03
2-1-08
5,975.11
8-1-08
6,169.30
2-1-09
6,369.80
8-1-09
6,576.82
2-1-10
6,790.57
8-1-10
7,011.26
2-1-11
7,239.13
8-1-11
7,474.40
2-1-12
7,717.32
8-1-12
7,968.13
2-1-13
8,227.09
8-1-13
8,494.47
2-1-14
8,770.54
8-1-14
9,055.59
2-1-15
9,349.89
8-1-15
9,653.76
2-1-16
9,967.51
8-1-16
10,291.46
2-1-17
10,625.93
8-1-17
10,971.27
2-1-18
11,327.84
8-1-18
11,695.99
2-1-19
12,076.11
8-1-19
12,468.59
2-1-20
12,873.81
8-1-20
13,292.21
2-1-21
13,724.21
8-1-21
14,170.25
2-1-22
14,630.78
8-1-22
15,106.28
2-1-23
15,597.23
8-1-23
16,104.15
2-1-24
16,627.33
B-1
Date Accreted Value of a $5.000 Bond
8-1-24
17,167.92
2-1-25
17,725.88
8-1-25
18,301.97
2-1-26
18,896.79
8-1-26
19,510.93
2-1-27
20,145.04
8-1-27
20,799.75
2-1-28
21,475.74
8-1-28
22,173.71
2-1-29
22,894.35
8-1-29
23,638.42
B-2
Amended
— s
Highway 71 East Square
Redevelopment District No. I
.
a.•
i • i
'1 S,IAp1^ i
W'ash:r.gta^ Elementary
4 a +
Dickson Sine: Er.+:erasnrc_-t astr att
:alto Arts Crier p-
•I
( IC
w � f
n ry
{
u1 «,'
*rS I
_-1 Ciy Ha ew Cnrvt^:ion Ce^:er
"?J.
• -/ Federal Courthouse
• l
fJP•
g
m �.
v ,
levelopment
Y
- flint tcgors A.
5
ryasyn •.•u�
D-2
• • KUTAK ROCK LLP
DRAFT 03/15/05
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement dated as of April _, 2005 (this "Agreement"), is
executed and delivered by the City of Fayetteville, Arkansas (the "City") and
, as trustee (the "Trustee"), in connection with the issuance of the City's
$3,725,000 Tax Increment Interest Accretion Bonds (Highway 71 East Square Redevelopment
District No. 1 Project), Series 2005 (the `Bonds"). The Bonds are being issued pursuant to the
terms and provisions of Ordinance No. _ duly adopted by the City Council of the City on
March _, 2005 (the "Authorizing Ordinance"), and a Trust Indenture dated as of April 15, 2005
(the "Indenture"), by and between the City and the Trustee. In connection with the issuance of
the Bonds, the City and the Trustee agree as follows:
Section 1. Purpose of this Agreement. This Agreement is being executed and
delivered by the City and the Trustee for the benefit of the Beneficial Owners of the Bonds and
in order to assist the Participating Underwriter in complying with, and constitutes the written
undertaking for the benefit of the Beneficial Owners of the Bonds required by, Section (b)(5)(i)
of Securities and Exchange Commission Rule 15c2-12 under the Securities Act of 1934, as
amended (17 C.F.R. Section 240.15c2-12) (the "Rule"). The City hereby represents that it has
not failed to comply with any previous undertaking pursuant to the Rule.
Section 2. Definitions. In addition to the definitions set forth in the Indenture, which
apply to any capitalized term used in this Agreement unless otherwise defined in this Section, the
following capitalized terms shall have the following meanings:
"Annual Financial Information" shall mean the annual financial information provided by
the City pursuant to, and as described in, Sections 3 and 4 of this Agreement.
"Arkansas State Repository" shall mean any public or private repository or entity as may
be designated by the State of Arkansas as a state repository for the purpose of the Rule and
recognized as such by the SEC. As of the date of this Agreement, there is no Arkansas State
Repository.
"Beneficial Owner" shall mean any person which has or shares the power, directly or
indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds, including
persons holding Bonds through nominees, depositories or other intermediaries.
"Disclosure Representative" shall mean the City's Finance and Internal Services Director
or his or her designee, or such other officer or employee as the City shall designate in writing to
the Trustee from time to time.
"Fiscal Year" shall mean the 12 -month period used, at any time, by the City for
accounting purposes, which may be the calendar year.
"MSRB"
shall mean
the Municipal Securities
Rulemaking Board established in
accordance with
the provisions
of Section 15B(b)(1) of the
1934 Act.
10-106557.1
0
"National Repository" shall mean any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule. The National Repositories currently approved
by the Securities and Exchange Commission are set forth in Exhibit B hereto.
"Participating Underwriter" shall mean Crews & Associates, Inc.
"Repository" shall mean each National Repository and the Arkansas State Repository,
if any.
"Rule" shall mean Rule 15c2 -12(b)(5) adopted by the Securities and Exchange
Commission ("SEC") under the Securities Exchange Act of 1934, as the same may be amended
from time to time ("1934 Act").
"Tax Increment" shall have the meaning given such term in the Act, as determined by
multiplying the incremental value of the real property within the District by the maximum
applicable ad valorem rate permitted pursuant to the Act.
"Specified Events" shall mean any of the events with respect to the Bonds listed in
Section 5(a) of this Agreement.
Section 3. Provision of Annual Financial Information.
(a) The City shall, not later than August 1 of each year, commencing
August 1, 2005, provide to each Repository and to the Trustee its Annual Financial
Information which is consistent with the requirements of Section 4 of this Agreement.
The City's Annual Financial Information may be submitted as a single document or as
separate documents comprising a package, and may cross-reference other information as
provided in Section 4(b) hereof. If the City's fiscal year changes, it shall give notice of
such change in the same manner as for a material Specified Event under Section 5 of this
Agreement.
(b) If, on the date specified in subsection (a) for providing the Annual
Financial Information to Repositories, the Trustee has not received a copy of the Annual
Financial Information, the Trustee shall contact the Disclosure Representative to
determine if the City is in compliance with subsection (a).
(c) If the Trustee is unable to verify that the Annual Financial Information has
been provided to the Repositories by the date required in subsection (a), the Trustee shall
file a notice with the Repositories and the MSRB in substantially the form set forth in
Exhibit A and as required by the Rule.
(d) The City shall:
(i)
determine
each
year
prior
to the date for providing the Annual
Financial
Information the
name
and
address
of each Repository; and
10-106557.1 2
0
(ii) file a report with the Trustee certifying that the Annual Financial
Information has been provided pursuant to this Agreement, stating the date it was
provided, and listing all of the Repositories to which it was provided.
Section 4. Content of Annual Financial Information.
(a) The City's Annual Financial Information shall contain or incorporate by
reference the following:
(i) Tax Increment receipts during the latest Fiscal Year and for all
previous Fiscal Years;
(ii) The most recent determination of "incremental vale" (as defined in
the Act) of real property within the District and all such previous determinations;
(iii) The total principal amount and Accreted Value of all Bonds
Outstanding as of the end of the latest Fiscal Year and as of the end of each
previous Fiscal Year; and
(iv) The principal amount and Accreted Value of all Bonds redeemed
during the latest Fiscal Year and such amounts as were redeemed in previous
Fiscal Years;
(b) Any or all of the items listed above may be incorporated by reference from
other documents, including official statements of debt issues of the City or related public
entities, which have been submitted to each of the Repositories or the Securities and
Exchange Commission. If the document has been incorporated by reference in a final
official statement, it must be available from the Municipal Securities Rulemaking Board.
The City must clearly identify each such other document incorporated by reference.
Section 5. Reporting of Specified Events.
(a) This Section 5 shall govern the giving of notices of the occurrence of any
of the following events with respect to the Bonds, if material:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults;
(3) Unscheduled draws on debt service reserves reflecting financial
difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial
difficulties;
(5) Substitution of any credit or liquidity providers, or their failure to
perform;
10-106557.1 3
a •
(6) Adverse tax opinions or events affecting the tax-exempt status of
the Bonds;
(7) Modifications to rights of Bondowners;
(8) Bond calls;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the
Bonds; and
(11) Rating changes.
(b) The Trustee, upon obtaining actual knowledge of the occurrence of any of
the Specified Events, shall promptly inform the Disclosure Representative of any
Specified Event that has occurred, and shall request that the City promptly notify the
Trustee in writing whether to report the event pursuant to subsection (e).
(c) If the City determines that the occurrence of a Specified Event is material
to a Beneficial Owner of the Bonds, the Disclosure Representative shall promptly notify
the Trustee in writing. Such notice shall instruct the Trustee to report the occurrence
pursuant to subsection (e) below.
(d) If the City determines that the occurrence of a Specified Event is not
material, the Disclosure Representative shall so notify the Trustee in writing and instruct
the Trustee not to report the occurrence pursuant to subsection (e) below.
(e) If the Trustee has been instructed by the Disclosure Representative to
report the occurrence of a Specified Event, the Trustee shall file a notice of such
occurrence with each National Repository, or with the MSRB and the Arkansas State
Repository. The Trustee shall not be obligated to report the occurrence of a Specified
Event if there is no instruction to do so from the Disclosure Representative.
Notwithstanding the foregoing:
(i) notice of the occurrence of a Specified Event described in
subsections (a)(1), (4) or (5) shall be given by the Trustee unless the Disclosure
Representative gives the Trustee affirmative instructions not to disclose such
occurrence; and
(ii) notice of the Specified Events described in subsections (a)(8) and
(9) need not be given under this subsection any earlier than the notice (if any) of
the underlying event is given to Beneficial Owners of affected Bonds pursuant to
the Indenture.
Section 6. Termination of Reporting Obligation. The City's obligations under this
Agreement shall terminate if the City is no longer an "obligated person" within the meaning of
10-106557.1
S
the Rule. The City's obligations under this Agreement shall terminate upon the maturity,
defeasance, prior redemption or payment in full of all of the Bonds.
Section 7. Amendment; Waiver. Notwithstanding any other provision of this
Agreement, the City and the Trustee may amend this Agreement (and the Trustee shall consent
in its discretion, such consent not to be unreasonably withheld, to any amendment so requested
by the City), and any provision of this Agreement may be waived, if such amendment or waiver
is supported by an opinion of counsel, reasonably acceptable to each of the City and the Trustee,
to the effect that such amendment or waiver would not, in and of itself, cause the undertakings
herein to violate the Rule taking into account any subsequent change in or official interpretation
of the Rule.
Section 8. Additional Information. Nothing in this Agreement shall be deemed to
prevent the City from disseminating any other information, using the means of dissemination set
forth in this Agreement or any other means of communication, or including any other
information in any Annual Financial Information or notice of occurrence of a Specified Event, in
addition to that which is required by this Agreement. If the City chooses to include any
information in any Annual Financial Information or notice of occurrence of a Specified Event in
addition to that which is specifically required by this Agreement, the City shall have no
obligation under this Agreement to update such information or include it in any future Annual
Financial Information or notice of occurrence of a Specified Event.
Section 9. Default.
(a) In the event of a failure of the City to provide to the Repositories the
Annual Financial Information as undertaken by the City in this Agreement, the Beneficial
Owner of any Bonds may take such actions as may be necessary and appropriate,
including seeking mandamus or specific performance by court order, to cause the City to
comply with its obligations to provide Annual Financial Information or notices under this
Agreement.
(b) Notwithstanding the foregoing, no Beneficial Owner of the Bonds shall
have the right to challenge the content or adequacy of the information provided pursuant
to Sections 3, 4 or 5 of this Agreement by mandamus, specific performance or other
equitable proceedings unless the City shall have been given ninety (90) days' written
notice by a Beneficial Owner of the Bonds to remedy the alleged inadequacy of the
information provided and unless Beneficial Owners of Bonds representing at least 25%
aggregate principal amount of outstanding Bonds shall join in such proceedings.
(c) A default under this Agreement shall not be deemed an Event of Default
under the Trust Indenture, and the sole remedy under this Agreement in the event of any
failure of the City or the Trustee to comply with this Agreement shall be an action to
compel performance.
Section 10. Duties, Immunities and Liabilities of Trustee. Article IX of the Indenture
is hereby made applicable to this Agreement as if this Agreement were (solely for this purpose)
contained in the Indenture. The Trustee shall have only such duties as are specifically set forth
10-106557.1 5
S
in this Agreement, and the City agrees to indemnify and save the Trustee, its officers, directors,
employees and agents, harmless against any liabilities which it may incur arising out of or in the
exercise or performance of its powers and duties hereunder, including the costs and expenses
(including attorneys' fees and expenses) of defending against any claim of liability, but
excluding liabilities due to its own negligence or willful misconduct.
Section 11. Beneficiaries. This Agreement shall inure solely to the benefit of the City,
the Trustee and the Beneficial Owners from time to time of the Bonds, and shall create no rights
in any other person or entity.
Section 12. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same
instrument.
CITY OF FAYETTEVILLE, ARKANSAS
By:
Title: Mayor
as Trustee
By:
Title:
10-106567.1 6
EXHIBIT A
NOTICE TO REPOSITORIES REGARDING
FINANCIAL INFORMATION
NAME OF ISSUER: City of Fayetteville, Arkansas
NAME OF BOND ISSUE: $3,725,000 Tax Increment Interest Accretion Bonds (Highway 71
East Square Redevelopment District No. 1 Project), Series 2005
DATE OF ISSUANCE: April _, 2005
NOTICE IS HEREBY GIVEN that the City of Fayetteville, Arkansas (the "City") has not
yet provided Annual Financial Information with respect to the above -named Bonds as required
by Section 3 of the Continuing Disclosure Agreement dated as of April _, 2005, between the
City and , as trustee. [The City anticipates that the Annual Financial
Information will be filed by .]
Dated:
as Trustee
cc: City of Fayetteville
Crews & Associates, Inc.
A-1
10-106557.1
EXHIBIT B
List of Nationally Recognized Municipal Securities Information Repositories
at the time of execution and delivery of the
Continuing Disclosure Agreement
This list may change from time to time. The Agreement requires that information and
notices be provided to each Repository. This list should be checked for changes each time
information or notice is to be provided.
A current list may be obtained from the Securities and Exchange Commission over the
Internet at http://www.sec.gov/info/municipal/nrmsir.htm.
Bloomberg Municipal Repository
100 Business Park Drive
Skillman, New Jersey 08558
Phone: (609) 279-3225
Fax: (609) 279-5962
http://www.bloomberg.com/markets/rates/municontacts.html
E-mail: Munis@Bloomberg.com
DPC Data Inc.
One Executive Drive
Fort Lee, New Jersey 07024
Phone: (201) 346-0701
Fax: (201) 947-0107
http://www.dpcdata.com
E-mail: nrmsir@dpcdata.com
FT Interactive Data
Attn: NRMSIR
100 Williams Street, 15th Floor
New York, New York 10038
Phone: (212) 771-6999; (800) 689-8466
Fax: (212) 771-7390
http://www.ftid.com
Email: NRMSIR@interactivedata.com
Standard & Poor's Securities Evaluations, Inc.
55 Water Street
45th Floor
New York, New York 10041
Phone: (212) 438-4595
Fax: (212) 438-3975
www.jjkenny/jjkenny/pser descrip data rep.html
Email: nrmsirrepository@sandp.com
B-1
10.106557.1
Pb .III
AFFIDAVIT OF PUBLICATION
I, & , do solemnly swear that I am the
Legal Clerk of the Arkansas Democrat-Gazette/Northwest Arkansas
Times newspaper, printed and published in Lowell, Arkansas, and that
from my own personal knowledge and reference to the files of said
publication, that advertisement of:
was inserted in the regular editions on
PO#
** Publication Charge: $ S/4' 's'. 7 a
Subscribed and sworn to before me this
day of j2f ' _, 2005.
Notary. Public Sharlene D. Williams
Notary Public
My Commission Expires: State of Arkansas
My Commission Expires
October 18, 2014
** Please do not pay from Affidavit.
An invoice will be sent.
RECEIVED
APR 0 4 2UB
'I'TV OF FAYt I1EVILLE
^'1 CLERK'S FFICE
P.O. BOX 1607 • 212 N. EAST AVENUE • FAYETTEVILLE, ARKANSAS 72701 • 479-442-1700 • 479-442-5477 (FAX)
1]
ORIXNANCS NO. 0084
ICDORDINANCE L13 OF THIS THU
B.00 AND ONC OP THE] INTECITY'REST
5,000 TAX S (HIGH NT R t EAST J{y
STION BONDS QIIONWAT 71 OAST
W REDBVBLOPMBM DISTRICT NO. I ARKANSAS
NCT), SERIES 2008, FOR THE PURPOSE
NANCINO CURTAIN IMPROVEMENTS
N THE DISTRICTt AUTHORIZING THE SXUCU TION AND DELIVERY OP A TRUST
RURB PURSUANT TO WHICH THU BONDS WILL SE ISSUED AND SBCURUDI
)RQMO THU WESCUTION AND DELIVERY OP AN OFFICIAL STATEMENT FUR -
TO WHICH THE] BONDS WILL BO OFFURBDI AUTHORIZING THU EXECUTION
IBLIVURY OP A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF
'AND$ AUTHORING THIS [EXECUTION AND DELIVERY OF A CONTINUING 018 -
Inn AGRBUMUUb PRESCRIBING OTHER MATTERS RELATING THBRBTOI AND
RUNG AN UMBROBNCY
WHEREAS. the City Council of the City of Fayetteville, Arkansas (the 'City') has previauy stated its
determination N Resolution No. 19-05 adopted February 1, 2005, that there Is a great need fa a source
of revenue to finance the costs of alleviating blight and encouraging development and redevelopment
within the City and in oMerance of such purposes has created Me Highway 71 East Square
Redevabprnent District No. 1 (the'Dlstrictl pursuant to Ordinance No. 4608 adopted on August 17,
2004, as amended by Ordinance No. 4662 adopted on December 28, 2004, and by Ordinance No.
4673 adopted on January 25, 2005: and
CR S ISAS. It has been determined that the specific c actions needed to alleviate such blight and encour-
age such development and redevelopment consist at () the acquisition of certain real property, the dem-
oltdn of strafing structures thereon and site preparation In connection therewith, whidh property is dcet-
ed within the strot and corssts of the former Mountain Inn property, the tourer Nibock Law Offices,
the fanner Red Bird Restaurant and Me former Washington County Courts Building. and OD Me con-
struction of certain sidewalk and crosswalk improvements within the District (cotlec2Ney, the Project);
and
WHEREAS, upon completion of the Project and upon satisfaction of certain conditions, the City intends
to sell the dewed property to a Private developer for Me purpose of constructing a hotel, meetrg place,
condominlum and pe dng deck development thereon; and
WHURSAB. the City is authorized and empowered under the provisions of the Constitution and awe of
the State of Arkansas. including particularly Amendment 78 to Me Constitution of the State of Arkansas
('Amendment 781 and Arkansas Code Annotated (2003 Supp.) Sections 14-168-301 at see. (as from
tyre to time amended, th0'Ad), to issue and sell Its bonds to finance the costs of various capital
limprovernente within the District such as those comprising the Project, which bonds are to be secured
by end payable from the ad valorem tax Increment described In and autrorized by the Act; and —
WHEREAS, as authorized under the provisions of Amendment 78 and the Act, the City has now deter-
iNned to issue and sell its Tax Increment Interest Accretion Bonds (Highway 71 East Square
Aedevelopment District No. 1 Project), Series 2005, in Me principal amount of $3,725,000 (the 'Bonds ),
In order to provide financing for the costs of Me Project and to pay related costs of issuance; and
WHEREAS, the City has made arrangements for Me sae of the Bonds to Crews & Associates, Inc.,
Utte Rode, Arkansas (the Undorwriter1, such sale to be made pursuant to the terms of a Bond
Purchase Agreement between the City and the Underwriter (the 'Bond Purchase Agreement) in sub-
santialy the form presented to and before this meeting; and
WHBRSAS, the tams of Me Bonds are consistent with the floating terra described in the DSMds
project plan originally adopted on December 7, 2004. pursuant to Ordinance No. 4646, and amended
on December 28, 2004 and March 15.2005, pursuant to Ordinance No. 4693 and Ordinance No, 4683,
THEREFORE, BET ORDAINED BY THU CITY COUNCIL OF THE CITY OF FAYUT-
TBVILLS, ARKANSAS THAT.
Section 1: Under the authority of the Constitution and laws of the State of Arkansas. including particu-
sity Amendment 78 and the Act, there Is hereby authorized the issuance of bonds of the City to be des-
Jgnated as 'Gry of Fayetteville, Arkansas Tax Increment Interest Accretion Bonds (Highway 71 East
Square Redevelopment District No. 1 Project), Series 2005." The Bonds shall be issued at one time or
'from time to time In the original aggregate principal amount of Three Million Seven Hundred Twenty -Five
'Thousand Dollars ($3,725,000). The Bonds shaft mature on August 1, 2029 and shall bear Interest at
the rain of 850% oar annum. as specified in the Bond Purchase Agreement presented to this meeting.
The proceeds of the Bonds will be utilized to finance the costs of acqustion, demolition, and site prepa-
ration relating to Project and to pay publication, legal, underwriting and other expenses Incidental to the
issuance of the Bonds. The City Council hereby finds that the real property within the District will be ben-
efited upon completion of the Project.
The Bonds shall be issued in minimum donominatlas of $5,000 and in increments of $5,000 in excess
thereof. The Bonds shall be dated. shall be in the form shall be numbered, shall be subject to redemp-
tion prior to maturity, and shall contain such other temps, covenants and conditions, all as set forth in that
certain Trust Indenture to be dated as of Apr N 15, 2005 (the 'Indenturel, by and between the City and
The Bank of Fayettedpe, as trustee (the 'Trustee), to be entered into by the City and the Trustee in sub-
stantleuy the farm submitted to this meeting.
The Mayor is hereby authorized and directed to execute and deliver the Bonds in subsantiay the form
thereof contained in Me Indenture submitted to this meeting, and Me City Clark is hereby authorized and
directed to execute and deliver the Bonds and to affix Me seal of the City thereto, end the Mayor and
City aerk are hereby autloriied and directed to cause the Bonds to be accepted and authenticated by
Me Trustee. The Mayor is hereby authorized to confer with the Trustee, the Underwriter and Kutak Rock
U.P. Utte Rock, Alkanses ('Bond Coin&"), in order to complete the Bonds in substantially me form
contalred in Me Indenture submitted to this meeting, with such changes as shall be approved by such
persons executing the Bonds, their execution to constitute cgrcusive evidence of such approval.
Section 2: In order to pay the principal of and interest on the Bonds as they mature or are called for
redemption prior to maturity, the Act provides that the Districts tax Increment, as defined in the Act (the
'Tax Inaementl, shall be calculated annually and any positive amount distributed to the City for deposit
Into the Highway 71 East Square Redevelopment District No. 1 Tax Increment Fad created in Ordinance
No. 4608. Pursuant to the IrdeMure, suds find will be assigned to and held by the Trustee for the ben-
efit of the holders of the Bonds. The City covenants nants and agrees that all receipts relating to the Tax
Increment will be accounted for separately as special funds on the books of Me City, and receipts of said
Tax Increment will be deposited and will be used solely as provided In Me Indenture.
Section 3: To prescribe the terms and conditions upon which the Bonds are to be executed authenti-
cated. Issued, accepted, held and secured, Me Mayor is hereby authorized and directed to execute and
acknowledge the Indenture, end the Clerk Is hereby authocized and directed to execute and ackrovA-
edge Me Indenture and to affix the seal of the City thereto, and the Maya and the City Clerk are hereby
authorized and directed to cause the Indenture to be accepted, executed and acknowledged by the
Trustee. The Indenture is hereby approved in substantially the form submitted to this meeting, trcuding,
without limitation, the provisions thereof pertaining to the Tax Increment and the arms of the Bonds. The
Mayor Is hereby authorized to confer with the Trustee, the Underwriter and Bad Counsel in order to
complete the Indenture In suastantla y the form suAmitted to this meeting, with such changes as shall
be approved by such persons executing the Indenture. their execution to constitute cacuwe evidence
c such approval.
kAcMce is given Met a copy of the Indenture in 9hbstaltaly the form authorized to be executed is /In file
fwlth Me City Clerk and Is available for Inspection by any interested person.)
Section 4: Them is hereby authorized and approved a Preliminary Official Statement of the City, includ-
ing the cover page and appendices attached thereto, relating to the Balls. The Preliminary Official
Statement a hereby "deemed final" within the meaning of U.S. Securities and Exchange Commission
Rule 15c2-12. The prior distribution of the Preliminary ONcal Statement is hereby ratified and approved.
The Preliminary Official Statement, as amended to conform to the terns of the Bond Purchase
Agreement, Incuding Exhibit A thereto, and with such other changes and amendments as are mutually
agreed to by the Gry, the Underwriter and Bond Counsel, is herein referred to as the 'Official Statement',
end the Mayor is hereby authorized to execute the Official Statement for and on behalf of the Ciry. The
Official Statement Is hereby approved in substantially the form of the Preliminary Ofida Statement sub-
mitted to this meeting, and the Mayor is hereby authorized to confer with the Underwriter and Bond
Counsel in order to complete Me Of Statement in substantaly the form of the Preliminary Official
Statement submitted to this meeting wM such changes as shall be approved by such persons, the
Mayor le execution to constitute condi ve evidence of such approval.
(Advice is given that a copy of the Prelimhary Official Statement is on Ne with the City Clark and is avail-
able for Inspection by any Interested person.)
Section 5: In order to prescribe Me terms and wnditiaw upon which the Bonds are to be sod to Me
Underwriter, the Mayor Is hereby authorized and directed to execute the Bad Purchase Agreement on
behalf of the City, to be dated as of the date of its execution (the Bond Purchase Agreement, by and
between the City and Me Undenwme, and said Bond Purchase Agreement is hereby approved in sub-
staitialy the form submitted to this meeting, and the Mayor is hereby autorized to confer with the
Underwriter and Bond Counsel in order to complete Me Bond Purchase Agreement h substantially the
form submitted to this meeting, with such changes as shall be appmved by such persons executing the
Bond Purchase Agreement. that execution to constitute condusFve evidence of such approval.
(Advice is given that a copy of the Bad Purchase Agreement In substantially the form authorized to be
executed Is on file with the City Clerk and is available for inspection by any interested person.)
Section 6: In order to provide for continuing disclosure of certain financial and operating information with
respect to the City, Me District and the Tax Increment in compliance with Me provisions of Rule 15c2-12
cute a Continuing Disclosure Agreement (the 'Continuing Disclosure Agreement"), by and between the
City and Me Trustee, and Me Mayor is hereby authorized and directed to cause the Continuing
osdosae Agreement to be executed by the Trustee. The Continuing Disclosva Agreement is hereby
approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to can -
fa with Me Trustee, the Underwriter and Bad Counsel In order to complete the Continuing Disdosure
Agreement in substantially the form submitted to this meeting with such changes as shall be approved
by such persons executing Me Continuing Disclosure Agreement, their execution to constitute condu-
shre evdence of such approval.
(Advice is given that a copy of the Continuing Disclosure Agreement in substantially Me form authorized
to be executed is on file with the City Clerk and Is available for Inspection by any interested person.)
Section 7: The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed
to do any and all things necessary to effect Me Issuance, sale, execution and delivery of the Bonds and
to effect the execution and delivery of the Indenture, the Bond Purchase Agreement, Me Continuing
Disclosure Agreement and a Tax Regulatory Agreement relating to the tax exemption of interest on the
Bonds, and to perform all of Me obligations of the City under and pursuant thereto. The Mayor and the
City Clerk are fuller authorized and directed, for and on behalf of the City, to execute all papers, docu-
ments, certificates and other Instruments Net may be required for Me carrying out of such authority or
to evidence the exercise thereof.
Section 8: The proisicns of this Ordinance are hereby declared to be severable, and If any section,
phrase a provision shall for any reason be declared to be illegal or Invalid, such declaration shall not
affect the validity of the remainder of Me sections, phrases or provisions of this Ordinance.
Section 9: All ordinances, resolutions and parts thereof In conflict herewith are hereby repealed to the
extent of such conflict,
Section 10: There is hereby found and declared to be an Immediate need for certain infrastructure
improvements within the District, which Improvements will benefit the public health, safety end welfare of
Me City and its irtabftana, and the Issuance and sale of Me Bads approved hereby for the purpose of
financing Me Project and the taking of the other actions authorized herein are immediately necessary In
connection with such improvements. It is. therefore, declared that an emergency exists and this
Ordinance being necessary for the Immediate preservation of Me public health, safety and welfare shall'!
be in force and take effect Immedlatey upon and afar Its passage.
PASSED mid APPROVED this 15th day of March, 2005.
APPROVED:
By: �—
DAN COODY, Mayor
\ I 1li1- .•
r..��
.jy.
"Northwest Arkazas'Most Wide(. Read Newspaper"
AFFIDAVIT OF PUBLICATION
I, I , do solemnly swear that I am the
Legal Clerk of the Arkansas Democrat-Gazette/Northwest Arkansas
Times newspaper, printed and published in Lowell, Arkansas, and that
from my own personal knowledge and reference to the files of said
publication, that advertisement of:
e99 was inserted in the regular editions on
r?
PO# /
** Publication Charge: $ 4t f. r%4
Subscrib d and sworn to before me this
day of , 2005.
Notary. Public
My Commission Expires:
Sharlene D. Williams
Notary Public
" Please do not pay from Affidavit. State of Arkansas
An invoice will be sent. MY Commission Expires
October 18, 2014
P.O. BOX 1607 • 212 N. EAST AVENUE • FAYETTEVILLE. ARKANSAS 72701 • 479-442-1700 • 479-442-5477 (FAX)
D
ORDINANCE NO. 4884
ORDINANCE RAND %ROFTNAUTHORIZING THErye evl le
NC! BALK OF TNN CITY'S
6.000 TAX INCREMENT INTEREST
ITION BONDS (HIGHWAY 71 EAST
UI REDMLOPMENT DISTRICT NO. I ARKANSAS
ICT, SERIES 2005. FOR THE PURPOSE
WITHIN THE PURSUANT
UTHORIZING TNN EXECUTION AND DELIVERY OP A TRUST
OIN NTURI TO WHICH THE BONDS WILL SE ISSUED AND SECURE
AUTHORIZING THE EXECUTION AND DELIVERY OF AN OPP1CW, STATEMENT PUR-
SUANT TO WHICH THE BONDS WILL BE EBMDI AUTHORIZING THE EXECUTION
AND DEUVERY OF A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF
THE BONDS AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING 016 -
CLOSURE AGREEMENT, PRESCRIBING OTHER MATTERS RELATING THERETO; AND
DECLARING AN EMERGENCY
WHEREAS, the City Council of the City of Fayetteville, Arkansas (the'Gly) has previously stated its
detemtlnation In Resolution No. 19-05 adopted February 1, 2005, Met there is a great need fora source
of revenue to finance the costs of elle+iating blight and encouraging development and redevelopment
within the City and in furtherance of such purposes has created the Highway 71 East Square
Redevelopment District No. 1 The 'Olstrlct") pursuant to Ordinance No. 4606 adopted on August 17,
2004, as amended by Ordinance No. 4662 adopted on December 28, 2004, and by Ordinance No.
4673 adopted on January 25, 2005: and
WHEREAS, it has been dotermbao that the specific actions needed to alleviate such blight and encour-
age such development and redevelopment consist of 0) the acqui ittlon of carton real property the dem-
olltbn of eating structures thereon and see preparation in connection therewith, which property is locat-
ed within the District and coralats of the former Mowta, inn property, the former Niblock Law Offices,
the former Red Bird Restaurant and the former Washington County Courts Building, and QI) to con-
Moton of certain sidewalk and crosswalk Improvements within Me District (c t vet the "Projects;
and
WN[R[AS, upon c rnpleton of Me Project and upon satisfaction of certain conditions, Me City intends
to sell the cleared o property to a private developer for the purpose of constructing a hotel, meeting place,
condominium and perking clock development thereon; and
WHEREAS, the City is authorized and empowered under the provision of the Constitution and laws of
the State of Arka sa s, including particularly Amendment 78 to Me Constitution of the State of Arkansas
('Amendment 781 and Arkansas Code Annotated (2003 Supps) Sections 14-168-301 et seq. (as from
time to time emended, the -Acts, to issue and sail its bonds to finance Me costs of various capital
improvements within the Disrct such as ihcea comprising the Project, which bonds are to be secured
by and payade from the ad valorem law increment described in and authorized by the Act: and
as authorized under the provsnns of Amendment 78 and Me Act, the City has now deter-
rrmJrued ned
to is Issue and sell its Tee Increment Interest Accretion Bonds (Highway 71 East Square
Redevelopment District No. I Project), Series 2005. in t to pal amount of $3,725,000 (the "Bonds").
In order to provide financing for the costs of the Project and to tpay related costs of issuance; and
WHEREAS, the City has made arrangements for Me sale of the Bonds to Crews & Associates, Inc..
U91e Rock, Arkansas (the 'Undenwriteysuch sae to be made pursuant to the temps of a Bond
Purse Agreement between the City and the Underwriter (the "Band Purchase Agreement) in sub-
stimaky the form presented to and before this meeting: and
WHEREAS, the terms of the Bonds are consistent with the financing tears described in Me Dlstricl5
object plan originafty adopted on December 7, 2004. pursuant to Ordinance No. 4646, and amended
on December 28, 2004 and March 15, 2005, pursuant to Ordnance No. 4663 and Ordinance No. 4683,
IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYE7-
Section 1: Under the authority of the Constitution and laws of the State of Arkansas, nckuding particu-
larly Amendment 78 and the Act, there is hereby authorized the Issuance of bonds of the City to be des-
gnated as 'City of Fayetteville. 7vkansas Tax Increment Interest Accretion Bonds Highway 71 East
Square Redevelopment District No, 1 Project). Series 2005.The Bonds shall be issued at one time or
from time to time in the original aggregate principal amount of Three Million Seven Hundred Twenty -Frye
Thousand Dollars ($3,725,000). The Bonds shall mature on August 1, 2029 and shall bear interest at
the rate of 6.50% per annum, as specified in the Bond Purdase Agreement presented to this meeting.
The proceeds of the Bonds will be utilized to finance the costs of acquisition, demolition, and site prepa-
ration relating to Project and to pay publication, legal, undarvniNtg and other expenses incidental to the
issuance of the Bonds. The City Council hereby finds that the real property within the District will be ben-
efited upon completion of the Project.
The Bonds shall be issued In minimum denominations of $5,000 and in increments of $5.090 in excess
thereof. The Bonds shall be dated, stall be in the form, shall be numbered, shall be subject to redemp-
tion prior to maturity. and shall contain such other terms, covenants and conditions, all as set forth in that
certain Trust Indenture to be dated as of Apr l 15, 2005 (the "Indenture"), by and between the City and
The Bank of Fayetteville, as trustee the 'Trustee'), to be entered into by the City and the Trustee in sub-
sfentlely the form submitted to this meeting.
The Mayor is hereby authorized and directed to execute and deliver the Bonds in substantialy the form
hereof contained in Me Indenture submitted to this meeting, and the City Clerk is hereby authorized and
directed to execute and deliver the Bonds and to affa that seal of the City thereto, and the Mayor and
City Clerk are hereby authorized and directed to cause the Bads to be accepted and authenticated by
the Trustee. The Mayor is hereby authorized to confer with the Trustee, the underwriter and Kulac Rock
I1P, Little Rock, Arkansas ('Bore Counsel', in order to complete the Bonds in substantia*y the form
contained In the Indenture submitted to this meeting, with such changes as she$ be approved by such
persons executing the BOMB, their execution to constitute conclusive evidence of such approval.
Section 2: In order to pay the principal of and interest on the BOMB as they mature a are called for
redemption prior to maturity, the Act provides that the Districts tax increment, as defined In the Act (the
Tax Increment"), shall be calculated annually and any positive amount ditbuted to the City for deposit
into the Highway 71 East Square Redevelopment District No.1 Tax Increment Fund created In Ordinance
No. 4608. Pursuant to the Indenture, such fund will be assigned to and held by the Trustee for the ben-
efit of the hdders of the Basis. The City covenants and agrees that all recepts relating to the Tax
Increment will be accounted for separately as special funds on the books of the Gry, and receipts of said
Tax Increment will be deposited and will be used solely as pro fled in Me Indenture.
Section 3; To prescribe the terms and cadltlons upon which the Bonds are to be executed. a i hentl-
cated, Issued, accepted, held and secured, the Mayor is hereby authorized and directed to execute and
acknowledge the Indenture, and the perk is hereby authorized and directed to execute and acknowl-
edge the Indenture and to affix the sea of the City thereto. and the Mayor and the City Clerk are hereby
authorized and directed to cause the Indenture to be accepted. executed and acknowledged by the
Trustee. The Indenture is hereby approved in substantially the form submitted to This meeting, including,
without limitation, the providers thereof pertalhng to the Tax Increment and the terms of the Bonds. The
Mayor is hereby authorized to confer with the Trustee the Underwriter and Bad Counsel in order to
complete the Indenture in substantially Me form submitted to this meeting, with such changes as shall
be approved by such persons executing the Indenture, their execution n to constitute conclusive evidence
of such approval. - __ — -.-
lyldvlce o gwen fret a copy of The Indenture in substahtidy the form authorized to be executed is on file
with the City Clerk and Is available for inspection by any Interested person.)
Section 4: There is hereby authorized and approved a Preliminary Official Statement of the City indud-
Ing the cover page and appendices attached thereto, relating to the Bands. The Preliminary Official
Statement is hereby "deemed final" within the meaning of U.S. Securities and Exchange Commission
Ruts 15c2-12. The prior distribution of the Preliminary Official Statement is hereby ratified and approved.
The prelbnknary Official Statement, as amended to conform to the terms of the Bond Purchase
Agreement, Irdutling Exttibit A Thereto, end with such other changes end amendments as are mutually
agreed to by the City, the UMeewdter end Band Counsel, Is herein referred to as the 'Official Statement',
end the Mayor is hereby authorized to execute the Official Statement for and on behalf of the City. The
Official Statement n hereby aPPnA'ed in substantially the form of the Preliminary Official Statement sub-
mitted to this meeting, and the Mayor a hereby authorized to confer with the Underwriter and Bond
Counsel In order to complete the Official Statement In substantially the form of the Preliminary Official
Statement submitted to this meeting with such flanges as shell be approved by such persons, the
Mayors execution to constitute cerhdudve evidence of each approval.
(dvice is given that a copy of the Preliminary Official Statement is on file with the City Clerk and is avall-
aba for inspection by any interested person.)
Sections: In osier to prescribe the terms and conditions upon wMch the Bonds are to be sold to the
Underwriter, the Mayor a hereby euMalzed and directed to execute the Bond Purchase Agreement on
behalf of the Cit) to be dated as of the date of its execution (ihe'Bond Purchase Agreement, by and
between the City and the Underwriter, and said Bond Purchase Agreement is hereby approved In sub-
santalN the form submitted to this meeting, end Me Mayor a hereby authorize to confer with the
nvri Uneeler end Bond Counsel In order to complete the Bond Purchase Agreement in substantially the
form submitted to this meeting, with such charges as stall co approved by such persons executing the
Bond Purchase Agreement, their execution to constitute cortdustve evidence of such approval.
)Advice is given that a copy of the Bond Purchase Agreement in substantially the form auttarizetl to be
executed is on file with the City Gerk and a available for Inspection by any Interested Person.)
Section 6: in order to provide far continuing disclosure of certain financial and operating information with
respect to the City, the GSNct end the Tax Increment in compliance with the rizsiau of Rule 15c2-12
of the U.S. Securities and Exchange Commission, the Mayor is hereby authorized and directed to exe-
cutea Continuing Disclosure Agreement (the "Continuing Gscbsure Agreement"). to . by and between the
Cm' and the Trustee, and the Mayor is hereby authorized and directed to cause the Continuing
Disdosure Agreement to be executed approved In substantially the form sWrNtted to this the remeeti rug, aanndthe f�.tiayor Disclosure
ereby authorized to is hereby
con-
fer with Me Trustee, Me Underwriter and Bond Counsel In order to complete the Continuing Disclosure
Agreement in substantially the form subntltted to this meeting with such flanges as shall be approved
by such persons executing the ContlntA g Disclosure Agreement, their execution to constktute conclu-
sive evidence of such approval,
fpdvlce a given that a copy of the Continuing Gsdosure Agreement in substantially the lone authorized
to be executed s an fie with the City Gerk and is awa1W11e for inspection by any interested person.)
Section 7: The Mayor and City Clerk, far and on behalf of the Gry, are hereby authorized and directed
to do any one all things necessary to affect the issuance, sae, execution and delivery of the Bond^, and
to effect the execution and delivery of the Indenture, the Bond Purchase Agreement, the Continuing
,psdosure Agreement end a Tax Regulatory Agreement relating to the tax exemptlon of interest on the
Bonds, and to perform all of to obligations of the City antler and pursuant thereto. The Mayor and the
City Clerk are further authorized and tlacted, to and an befall of the Gry. M execute all paperh.rocu-.
.manta, certificates end other Inslrumonts that may be required for the cohering out of such authority or
to evidence the exercise thereof.
Section 8: The provisions of this Ordinance are hereby declared to be stsuch
severable, and If any section.phrese or provision shall for any reason be declared to be Illegal or irrvakl, sucdeclaration shall not
affect the validity of the remainder of the sections, phrases or plod hens of His Ordinance.
M Section 9: ordinances, resolutions and pads thereof in conflict herewith are hereby repealed to the
extent of such conflict.
Ir Section 10: There is hereby found and declared to be an immediate need for certain infrastructure improvements benefit the pubUc health, safety and welfare 01
e Cry and s habitants, and improvements Me Issssuance and sale of I
1 the the Bonds approved hereby for the Purpose 01
I financing Me project and the taking of the other actions authorized herein are mmedntely necessary it
connection with such improvements. It is, therefore. declared that an emergency exists and this
Ordinance being necessary for the immediate preservation of Me public health, safety and welfare shot
be in force and take effect immediately upon and after its passage.
and APPROVED this 15th day of March, 2005.
SSONDRL..SMTH, Clem Wait
•
THANK YOU!
Arkansas Democrat -Gazette, NW Ed
212 N. East Avenue
Fayetteville, AR 72701
479-442-1700
VISA PURCHASE
CARD #************4345*
EXPIRATION DATE : *****
DATE 03-28-2005 #002781 A
TIME 13:25:15
SALE 468.72
APPROVED 037719
AVS: YES
CLERK :
MERCH ORDER#
ITEM DESC:
***PLEASE IMPRINT CARD***
------------ THANK YOU---------
oeo
• 3/j s /os
�6zry
Tir1 e&
TayveTevile
ARKANSAS
The City of Fayetteville, Arkansas
City Council Agenda Memo
City Council Meeting Date: March 15, 2005
To: Mayor Coody and Fayetteville City Council
From: Stephen Davis, Finance & Internal Services Director/_...S.
Date: March 3, 2005
Subject: HIGHWAY 71 EAST SQUARE REDEVELOPMENT DISTRICT
PROJECT #1
Recommendation:
Staff recommends City Council approve a bond ordinance and authorize the Mayor and City
Clerk to sign tax increment financing bond documents (trust indenture, bond purchase agreement
and other related documents) authorized under Amendment 78 and required to establish a project
fund for the purchase and demolition of properties identified in the corresponding 71 EAST
SQUARE REDEVELOPMENT DISTRICT PROJECT #1 Project Plan.
Background:
The City has been actively working to establish a, TIF District for the purpose of removing
blighted properties along Mountain Street and to transfer the cleared property to private
developers for a $20+ million improvement. During this process numerous public hearings have
been conducted and City Council has authorized bond counsel, bond underwriters and other
professional to assist the City in developing the appropriate bond documents and a financing plan
to accomplish removal of the blight;
Discussion:
A formal presentation of the financing plan will be presented at the March 8, 2005 City Council
Agenda Session. The financing plan that will be presented establishes a project fund of $3.5
million relies on historical real property assessment growth rates and utilizes currently available
millages to fund debt service on this issue. The most likely, conservative approach relies on 3.16
mils and the median real property assessment growth rate of 8.91% results in a short fall
(approximately $150,000) in the later years of the bond issue. Adjusting this financing scenario
113 WEST MOUNTAIN 72701
479-575-8330
479-575-8257 (Fax)
by adding 2 mils of property millage and reducing the real property asassessment growth rate to
6.52% provides a substantial cushion.
Budget Impact:
All of the costs associated with transaction are expected to be funded from the Project Fund and
it is not expected to create a financial obligation for any other operating fund of the City.
113 WEST MOUNTAIN 72701
479-575-8330
479-575-8257 IFaa)
•
0
O
Cn CD
CD
Cn=
o n.
OV (i
O
`3, C) Cn
CD l^
u) 0
•
O^)
C I CD
Cm
CD
a
CD
CD
0
3
CD
a
m
0)
0 0 0 0
c ? Oo c
N
D f°
903
0 7 -.
_ 0 N
v
0
w
N
O
O
A
A CO
N N W
O V O l0
O 00 O CO
O !O O O
• . . .A
0 N 0
a
a
0
0
s•
»•
0
0
.UMW
a
0
ui
1*
0
ii
a
N
CD
O
ii
a
o d
03
o 0
C
y
0
a.
01
A A
Y Y
a
a
O O
O O
pp
O O
O
n
N
O
ii
a
N
0)
CD
a.
m
N
v
CD
CD
A
co
N
O
O
N
Cl) Cl) w O 2a0
C o °' 3
C, -'
lD W - 3
CR N Q.
QO
N Z O
C
m C r
N - O
OCR
CD .�
A
y
S
c�
• M
� 7�
O
7 C
3 �
m7
n
Iq
>w -1 _ 6%
Q
n
—
C
m6D
_
n
o
O
D
o
n
cD
O
CD
•
0
CG
('3
C)
M
bob
O
O
-s
0c0
co
CD
I)
5
CD
CD
v
0
a.
0)
v
O
N
t%30
0
0
C.,','.
co
Dco
a,
00
(flj
fl
rt
I
V
0
•
O
-
-
-
000
000
N
N
N
N
N
N
000
000
N
N
N
000
co
00
v)
01
rn
•00
Cii
N
0
CI 1
oil
I I I
I I I
I I I
I I I
CD
C.
DC!)
CD
CD
�.
n
C!)
•
CD
a
O.
CD
0
a,
n
O
C
13
O
m
O
2)
'I
I (� 0
. O• oN • O CD
o o m O D n
cD Q o N n m IV 3 ap Qi in
O Q)
CD Q- CD 3 4SC') m v, v
_ E 3- CD In 5 3 = C cQ - c� 0
_. o m o �. o' o CD o o Cn
m can v 0 C/) m �. Q < 5.v Q CD
o CD o _• O o CD o ' c oN CD v Cl)
n v 62 cr G) v n v 69 am G7 O(n v Cr CCDD CD
m - CD 3 N cD o O
3(a o< (Q o< a 0 CD
I o o v 0
o ca = O
m a m y (DD m y (n �' m CA
W cn ,rt Cl)3 cn
3 Cr) w 3 CD
a' o O 69 o o o 0 o '
rn ca 6) iv O ca 00 v (O
9'a N N N(D O N CJJ
N) Ni (Q O O
O C)
Cn
NJ
. CD ° C v
CA ' C CA e O Cci 0,
C O I*
Q-
cn
_ -1� Cl) 0)
CD
cfl o CD cQ _ C cQ _ 0
v C CD C Q n O
v n m m < CD
C O C) = c O— ._�, a O- (D V J
can CD wc(n p O ccnn N a- CD C)
mn O CD O CD = O CD
W G o
CD ° 000 G
3Cfl- _ C) _ r r
o p = p O 3 C
Ni
Cfl o N Ni (}7
o coo.
a)
1 • 0
I
1
1 Highway 71 East Square
1 Redevelopment District #1
1 (Mountain Inn Project)
[]
I
1 Cashflow Projections
H
11
CI
I
H
I
I
L
I
I
I
I
7
J
I
H
I
I
I
H
F,
Ii
Combined ntain Inn & Downtown Master nan District
Based on 3.16 Mils /2000-2004 Median Growth Rate of 8.91%
(18 Projects Planned Over Next 5 Years /$128 Million Appraised Value)
Total Available Increment................................................................................ 3,762,802,081
Total Available Yield...................................................................................... 11,890,455
Net Present Value of Available Yield................................................................... 7,046,470
TaxRate.................................................................................................... 0.32%
Present Value Rate......................................................................................... 3.00%
Year
2005
2006
2007
2008
2009
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
Assessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
Increment
3,342,546
10,414,906
25,682,952
36,035,529
45,810,320
Available Yield
10,562
32,911
81,158
113,872
144,761
PV of Available Yield
10,255
31,022
74,271
101,174
124,872
Year
2010
2011
2012
2013
2014
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
84,420,670
91,942,552
100,134,633
109,056,629
118,773,575
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
52,716,831
60,238,713
68,430,794
77,352,790
87,069,736
Available Yield
166,585
190,354
216,241
244,435
275,140
PV of Available Yield
139,512
154,775
170,703
187,339
204,730
Year
2015
2016
2017
2018
2019
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
129,356,300
140,881,946
153,434,528
167,105,544
181,994,648
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
97,652,461
109,178,107
121,730,689
135,401,705
150,290,809
Available Yield
308,582
345,003
384,669
427,869
474,919
PV of Available Yield
222,926
241,978
261,941
282,872
304,832
Year
2020
2021
2022
2023
2024
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
198,210,371
215,870,916
235,105,014
256,052,871
278,867,182
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
166,506,532
184,167,077
203,401,175
224,349,032
247,163,343
Available Yield
526,161
581,968
642,748
708,943
781,036
PV of Available Yield
327,886
352,100
377,547
404,300
432,441
Year
2025
2026
2027
2028
2029
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
303,714,248
330,775,187
360,247,256
392,345,287
427,303,252
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
272,010,409
299,071,348
328,543,417
360,641,448
395,599,413
Available Yield
859,553
945,065
1,038,197
1,139,627
1,250,094
PV of Available Yield
462,052
493,223
526,046
560,621
597,052
1 •
Mountain I"an / Dickson Street Redevelopment District
Based on 2000-2004 Median Growth Rate of 8.91%
Par Amount 4,145,000.00
Interest Rate 6.85%
DSRF 414,500.00
Interest Earnings Rate 3.00%
DSRF Total Accrued Total Principal Excess Cash
Date Revenue Earnings Revenues Bonds Called Interest & Interest Balance
4/1/2005 - - - - - - -
2/1/2006 130,562.00 10,362.50 140,924.50 130,000.00 7,522.50 137,522.50 3,402.00
2/1/2007 32,911.00 12,435.00 48,748.00 40,000.00 5,262.80 45,262.80 3,485.20
2/1/2008 81,158.00 12,435.00 97,078.20 80,000.00 16,832.80 96,832.80 245.39
2/1/2009 113,872.00 12,435.00 126,552.39 95,000.00 28,000.59 123,000.59 3,551.81
' 2/1/2010 144,761.00 12,435.00 160,747.81 115,000.00 44,269.45 159,269.45 1,478.36
2/1/2011 166,585.00 12,435.00 180,498.36 120,000.00 57,773.47 177,773.47 2,724.89
2/1/2012 190,354.00 12,435.00 205,513.89 125,000.00 73,082.80 198,082.80 7,431.09
2/1/2013 216,241.00 12,435.00 236,107.09 135,000.00 93,834.54 228,834.54 7,272.54
2/1/2014 244,435.00 12,435.00 264,142.54 145,000.00 117,909.86 262,909.86 1,232.68
'2/1/2015 275,140.00 12,435.00 288,807.68 145,000.00 136,227.60 281,227.60 7,580.08
2/1/2016 308,582.00 12,435.00 328,597.08 155,000.00 166,567.90 321,567.90 7,029.18
2/1/2017 345,003.00 12,435.00 364,467.18 160,000.00 195,068.41 355,068.41 9,398.77
2/1/2018 384,669.00 12,435.00 406,502.77 170,000.00 233,545.06 403,545.06 2,957.71
'2/1/2019 427,869.00 12,435.00 443,261.71 170,000.00 261,661.28 431,661.28 11,600.43
2/1/2020 474,919.00 12,435.00 498,954.43 180,000.00 308,897.41 488,897.41 10,057.03
2/1/2021 526,161.00 12,435.00 548,653.03 185,000.00 352,487.07 537,487.07 11,165.96
2/1/2022 581,968.00 12,435.00 605,568.96 190,000.00 400,474.23 590,474.23 15,094.73
' 2/1/2023 642,748.00 12,435.00 670,277.73 200,000.00 464,857.24 664,857.24 5,420.49
2/1/2024 708,943.00 12,435.00 726,798.49 200,000.00 511,179.88 711,179.88 15,618.60
2/)/2025 781,036.00 12,435.00 809,089.60 210,000.00 588,766.46 798,766.46 10,323.14
2/1/2026 859,553.00 12,435.00 882,311.14 215,000.00 659,762.27 874,762.27 7,548.87
2/1/2027 945,065.00 12,435.00 965,048.87 220,000.00 737,470.33 957,470.33 7,578.54
2/1/2028 1,038,197.00 12,435.00 1,058,210.54 225,000.00 822,457.04 1,047,457.04 10,753.50
2/1/2029 1,139,627.00 426,935.00 1,577,315.50 315,000.00 1,253,611.22 1,568,611.22 8,704.28
8/1/2029 - - 8,704.28 220,000.00 913,060.17 1,133,060.17 (1,124,355.89)
Total 10,760,359.00 710,867.50 4,145,000.00 8,450,58239 12,595,582.39
I
Combined Nlfifentain Inn & Downtown
District
I
I
[1
I
I
I
I
I
I
I
I
I
I
I
I
I
I
Based on 3.16 Mils / UofA Projected Assessment Growth Rate
(18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
it Available Increment.................................................................................. 5,312,852,450
it Available Yield........................................................................................ 16,788,614
Present Value of Available Yield..................................................................... 9,709,769
Rate...................................................................................................... 0.316°
entValue Rate........................................................................................... 3.00%
Year
2005
2006
2007
2008
2009
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
Assessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
Increment
3,342,546
10,414,906
25,682,952
36,035,529
45,810,320
Available Yield
10,562
32,911
81,158
113,872
144,761
PV of Available Yield
10,255
31,022
74,271
101,174
124,872
ear
2010
2011
2012
2013
2014
-ozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Mal Assessment
85,994,207
95,453,570
106,010,735
117,809,730
130,992,639
ssessment Growth Rate
10.94%
11.00%
11.06%
11.13%
11.19%
crement
54,290,368
63,749,731
74,306,896
86,105,891
99,288,800
vailable Yield
171,558
201,449
234,810
272,095
313,753
V of Available Yield
143,677
163,797
185,361
208,538
233,461
(Year 2015 2016 2017 2018 2019
iFrozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
145,742,410
162,240,451
180,719,638
201,430,109
224,655,000
Assessment Growth Rate
11.26%
11.32%
11.39%
11.46%
11.53%
Increment
114,038,571
130,536,612
149,015,799
169,726,270
192,951,161
Available Yield
360,362
412,496
470,890
536,335
609,726
PV of Available Yield
260,333
289,316
320,653
354,581
391,360
Year
2020
2021
2022
2023
2024
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
250,714,980
279,973,418
312,842,298
349,788,973
391,378,882
Assessment Growth Rate
11.60%
11.67%
11.74%
11.81%
11.89%
Increment
219,011,141
248,269,579
281,138,459
318,085,134
359,675,043
Available Yield
692,075
784,532
888,398
1,005,149
1,136,573
PV of Available Yield
431,278
474,655
521,840
573,222
629,293
Year
2025
2026
2027
2028
2029
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
438,187,796
490,901,788
550,349,995
617,382,624
693,073,734
Assessment Growth Rate
11.96%
12.03%
12.11%
12.18%
12.26%
Increment
406,483,957
459,197,949
518,646,156
585,678,785
661,369,895
Available Yield
1,284,489
1,451,066
1,638,922
1,850,745
2,089,929
PV of Available Yield
690,476
757,300
830,428
910,444
998,162
CREWS & A SSOCJATES
Invescmenc Bankers
I
I
I
I
I
I
C
L
I
I
I
I
I
I
I
I
I
I
Combined 1V. ntain Inn & Downtown Maste an District
Based on 3.16 Mils /1996-2004 Median Growth Rate of 6.52%
(18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
Total Available Increment................................................................................ 2,699,896,867
Total Available Yield...................................................................................... 8,531,674
Net Present Value of Available Yield................................................................... 5,183,210
TaxRate.................................................................................................... 0.32%
PresentValue Rate......................................................................................... 3.00%
Year
2005
2006
2007
2008
2009
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
Assessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
Increment
3,342,546
10,414,906
25,682,952
36,035,529
45,810,320
Available Yield
10,562
32,911
81,158
113,872
144,761
PV of Available Yield
10,255
31,022
74,271
101,174
124,872
Year
2010
2011
2012
2013
2014
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
82,568,082
87,951,521
93,685,960
99,794,284
106,300,872
Assessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
Increment
50,864,243
56,247,682
61,982,121
68,090,445
74,597,033
Available Yield
160,731
177,743
195,864
215,166
235,727
PV of Available Yield
134,610
144,521
154,616
164,907
175,403
Year
2015
2016
2017
2018
2019
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
113,231,689
120,614,395
128,478,453
136,855,248
145,778,210
Assessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
Increment
81,527,850
88,910,556
96,774,614
105,151,409
114,074,371
Available Yield
257,628
280,957
305,808
332,278
360,475
PV of Available Yield
186,116
197,058
208,240
219,675
231,375
Year
2020
2021
2022
2023
2024
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
155,282,950
165,407,398
176,191,960
187,679,676
199,916,391
Assessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
Increment
123,579,111
133,703,559
144,488,121
155,975,837
168,212,552
Available Yield
390,510
422,503
456,582
492,884
531,552
PV of Available Yield
243,353
255,621
268,194
281,085
294,307
Year
2025
2026
2027
2028
2029
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
212,950,940
226,835,341
241,625,005
257,378,956
274,160,064
Assessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
Increment
181,247,101
195,131,502
209,921,166
225,675,117
242,456,225
Available Yield
572,741
616,616
663,351
713,133
766,162
PV of Available Yield
307,876
321,807
336,114
350,814
365,923
' Mountain Inn / Dickson Street Redevelopment District
Based on 1996-2004 Median Growth Rate of 6.52%
Par Amount 4,145,000.00
Interest Rate 6.85%
DSRF 414,500.00
Interest Earnings Rate 3.00%
DSRF Total Accrued Total Principal Excess Cash
Date Revenue Earnings Revenues Bonds Called Interest & Interest Balance
4/1/2005 - - - - - - -
2/1/2006 130,562.00 10,362.50 140,924.50 130,000.00 7,522.50 137,522.50 3,402.00
2/1/2007 32,911.00 12,435.00 48,748.00 40,000.00 5,262.80 45,262.80 3,485.20
2/1/2008 81,158.00 12,435.00 97,078.20 80,000.00 16,832.80 96,832.80 245.39
2/1/2009 113,872.00 12,435.00 126,552.39 95,000.00 28,000.59 123,000.59 3,551.81
2/1/2010 144,761.00 12,435.00 160,747.81 115,000.00 44,269.45 159,269.45 1,478.36
2/1/2011 160,731.00 12,435.00 174,644.36 115,000.00 55,366.24 170,366.24 4,278.12
2/1/2012 177,743.00 12,435.00 194,456.12 120,000.00 70,159.49 190,159.49 4,296.63
2/1/2013 195,864.00 12,435.00 212,595.63 125,000.00 86,883.84 211,883.84 711.79
2/1/2014 215,166.00 12,435.00 228,312.79 125,000.00 101,646.43 226,646.43 1,666.36
2/1/2015 235,727.00 12,435.00 249,828.36 125,000.00 117,437.58 242,437.58 7,390.77
2/1/2016 257,628.00 12,435.00 277,453.77 130,000.00 139,702.11 269,702.11 7,751.66
2/1/2017 280,957.00 12,435.00 301,143.66 135,000.00 164,588.97 299,588.97 1,554.69
2/1/2018 305,808.00 12,435.00 319,797.69 130,000.00 178,593.28 308,593.28 11,204.41
2/1/2019 332,278.00 12,435.00 355,917.41 140,000.00 215,485.76 355,485.76 431.65
2/1/2020 360,475.00 12,435.00 373,341.65 135,000.00 231,673.06 366,673.06 6,668.59
2/1/2021 390,510.00 12,435.00 409,613.59 140,000.00 266,746.97 406,746.97 2,866.63
2/1/2022 422,503.00 12,435.00 437,804.63 140,000.00 295,086.28 435,086.28 2,718.35
2/1/2023 456,582.00 12,435.00 471,735.35 140,000.00 325,400.07 465,400.07 6,335.28
2/1/2024 492,884.00 12,435.00 511,654.28 140,000.00 357,825.92 497,825.92 13,828.36
2/1/2025 531,552.00 12,435.00 557,815.36 145,000.00 406,529.22 551,529.22 6,286.14
2/1/2026 572,741.00 12,435.00 591,462.14 145,000.00 444,955.95 589,955.95 1,506.19
2/1/2027 616,616.00 12,435.00 630,557.19 140,000.00 469,299.30 609,299.30 21,257.89
2/1/2028 663,351.00 12,435.00 697,043.89 145,000.00 530,027.87 675,027.87 22,016.02
2/1/2029 713,133.00 426,935.00 1,162,084.02 230,000.00 915,335.17 1,145,335.17 16,748.84
8/1/2029 - - 16,748.84 1,040,000.00 4,316,284.44 5,356,284.44 (5,339,535.60)
Total 7,885,513.00 710,867.50 4,145,000.00 9,790,916.10 13,935,916.10
I
Combined NWntain Inn & Downtown
District
I
[1
I
I
I
I
I
I
I
H
I
I
I
H
H
H
Li
Based on 5.16 Mils / UofA Projected Assessment Growth Rate
(18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
LI Available Increment................................................................................ 5,312,852,450
it Available Yield...................................................................................... 27,414,319
Present Value of Available Yield................................................................... 15,855,192
Rate.................................................................................................... 0.516%
entValue Rate......................................................................................... 3.00%
ear
2005
2006
2007
2008
2009
-ozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
atal Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
ssessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
icrement
3,342,546
10,414,906
25,682,952
36,035,529
45,810,320
vailable Yield
17,248
53,741
132,524
185,943
236,381
V of Available Yield
16,745
50,656
121,278
165,208
203,905
ear
2010
2011
2012
2013
2014
1
•ozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
atal Assessment
85,994,207
95,453,570
106,010,735
117,809,730
130,992,639
ssessment Growth Rate
10.94%
11.00%
11.06%
11.13%
11.19%
crement
54,290,368
63,749,731
74,306,896
86,105,891
99,288,800
vailableYield
280,138
328,949
383,424
444,306
512,330
V of Available Yield
234,611
267,465
302,678
340,524
381,222
Year
2015
2016
2017
2018
2019
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
145,742,410
162,240,451
180,719,638
201,430,109
224,655,000
Assessment Growth Rate
11.26%
11.32%
11.39%
11.46%
11.53%
Increment
114,038,571
130,536,612
149,015,799
169,726,270
192,951,161
Available Yield
588,439
673,569
768,922
875,788
995,628
PV of Available Yield
425,101
472,428
523,598
578,999
639,056
Year
2020
2021
2022
2023
2024
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
250,714,980
279,973,418
312,842,298
349,788,973
391,378,882
Assessment Growth Rate
11.60%
11.67%
11.74%
11.81%
1 1.89%
Increment
219,011,141
248,269,579
281,138,459
318,085,134
359,675,043
Available Yield
1,130,097
1,281,071
1,450,674
1,641,319
1,855,923
PV of Available Yield
704,239
775,069
852,118
936,021
1,027,580
Year
2025
2026
2027
2028
2029
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
438,187,796
490,901,788
550,349,995
617,382,624
693,073,734
Assessment Growth Rate
11.96%
12.03%
12.11%
12.18%
l2.26%
Increment
406,483,957
459,197,949
518,646,156
585,678,785
661,369,895
Available Yield
2,097,457
2,369,461
2,676,214
3,022,103
3,412,669
PV of Available Yield
1,127,487
1,236,604
1,356,016
1,486,674
1,629,910
' Mountain 11Th / Dickson Street Redevelopment District
Based on UofA Projected Revenues at 5.16 Mils
Par Amount 4,145,000.00
Interest Rate 6.85%
DSRF 414,500.00
Interest Earnings Rate 3.00%
DSRF Total Accrued Total Principal Excess Cash
' Date Revenue Earnings Revenues Bonds Called Interest & Interest Balance
4/1/2005 - - - - - - -
' 2/1/2006 137,248.00 10,362.50 147,610.50 135,000.00 7,811.83 142,811.83 4,798.67
2/1/2007 53,741.00 12,435.00 70,974.67 60,000.00 7,894.21 67,894.21 3,080.47
' 2/1/2008 132,524.00 12,435.00 148,039.47 120,000.00 25,249.21 145,249.21 2,790.26
2/1/2009 185,943.00 12,435.00 201,168.26 155,000.00 45,685.17 200,685.17 483.09
' 2/1/2010 236,381.00 12,435.00 249,299.09 180,000.00 69,291.31 249,291.31 7.78
2/1/2011 280,138.00 12,435.00 292,580.78 195,000.00 93,881.89 288,881.89 3,698.90
2/1/2012 328,949.00 12,435.00 345,082.90 215,000.00 125,702.42 340,702.42 4,380.48
2/1/2013 383,424.00 12,435.00 400,239.48 235,000.00 163,341.61 398,341.61 1,897.86
2/1/2014 444,306.00 12,435.00 458,638.86 250,000.00 203,292.87 453,292.87 5,346.00
2/1/2015 512,330.00 12,435.00 530,111.00 270,000.00 253,665.18 523,665.18 6,445.82
2/1/2016 588,439.00 12,435.00 607,319.82 290,000.00 311,643.17 601,643.17 5,676.64
2/1/2017 673,569.00 12,435.00 691,680.64 310,000.00 377,945.04 687,945.04 3,735.60
' 2/1/2018 768,922.00 12,435.00 785,092.60 330,000.00 453,352.17 783,352.17 1,740.43
2/1/2019 875,788.00 12,435.00 889,963.43 350,000.00 538,714.40 888,714.40 1,249.03
' 2/1/2020 995,628.00 12,435.00 1,009,312.03 370,000.00 634,955.78 1,004,955.78 4,356.25
2/1/2021 1,130,097.00 12,435.00 1,146,888.25 390,000.00 743,080.84 1,133,080.84 13,807.40
2/1/2022 1,281,071.00 426,935.00 1,721,813.40 290,000.00 611,250.14 901,250.14 820,563.26
• 2/1/2023 1,450,674.00 - 2,271,237.26 2,271,237.26
2/1/2024 1,641,319.00 - - - 3,912,556.26 3,912,556.26
'2/1/2025 1,855,923.00 - 5,768,479.26 - - - 5,768,479.26
2/1/2026 2,097,457.00 7,865,936.26 - - - 7,865,936.26
1 2/1/2027 2,369,461.00 - 10,235,397.26 - - - 10,235,397.26
2/1/2028 2,676,214.00 - 12,911,611.26 - - - 12,911,611.26
2/1/2029 3,022,103.00 - 15,933,714.26 - - - 15,933,714.26
8/1/2029 - - 15,933,714.26 - - - 15,933,714.26
Total 24,121,649.00 623,822.50 4,145,000.00 4,666,757.24 8,811,757.24
I
I
I
f1
C
I
171
I
I
I
I
I
I
I
I
I
Combined Mtntain Inn & Downtown Master an District
Based on 5.16 Mils /2000-2004 Median Growth Rate of 8.91 %
(18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
Total Available Increment................................................................................ 3,762,802,081
Total Available Yield...................................................................................... 19,416,059
Net Present Value of Available Yield................................................................... 11,506,262
TaxRate.................................................................................................... 0.516%
Present Value Rate......................................................................................... 3.00%
Year
2005
2006
2007
2008
2009
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
Assessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
Increment
3,342,546
10,414,906
25,682,952
36,035,529
45,810,320
Available Yield
17,248
53,741
132,524
185,943
236,381
PV of Available Yield
16,745
50,656
121,278
165,208
203,905
Year
2010
2011
2012
2013
2014
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
84,420,670
91,942,552
100,134,633
109,056,629
118,773,575
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
52,716,831
60,238,713
68,430,794
77,352,790
87,069,736
Available Yield
272,019
310,832
353,103
399,140
449,280
PV of Available Yield
227,812
252,735
278,743
305,908
334,306
Year
2015
2016
2017
2018
2019
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
129,356,300
140,881,946
153,434,528
167,105,544
181,994,648
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
97,652,461
109,178,107
121,730,689
135,401,705
150,290,809
Available Yield
503,887
563,359
628,130
698,673
775,501
PV of Available Yield
364,018
395,129
427,726
461,905
497,764
Year
2020
2021
2022
2023
2024
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
198,210,371
215,870,916
235,105,014
256,052,871
278,867,182
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
166,506,532
184,167,077
203,401,175
224,349,032
247,163,343
Available Yield
859,174
950,302
1,049,550
1,157,641
1,275,363
PV of Available Yield
535,409
574,948
616,500
660,186
706,137
Year
2025
2026
2027
2028
2029
Frozen Assessment
31,703,839
31,703,839
31,703,839
31,703,839
31,703,839
Total Assessment
303,714,248
330,775,187
360,247,256
392,345,287
427,303,252
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
272,010,409
299,071,348
328,543,417
360,641,448
395,599,413
Available Yield
1,403,574
1,543,208
1,695,284
1,860,910
2,041,293
PV of Available Yield
754,490
805,389
858,986
915,444
974,933
' Mountain 11Th/ Dickson Street Redevelopment District
' Based on 2000-2004 Median Growth Rate of 8.91@ at 5.16 Mils
Par Amount 4,145,000.00
Interest Rate 6.85%
DSRF 414,500.00
Interest Earnings Rate 3.00%
DSRF Total Accrued Total Principal Excess Cash
' Date Revenue Earnings Revenues Bonds Called Interest & Interest Balance
4/1/2005 - - - - - - -
' 2/1/2006 137,248.00 10,362.50 147,610.50 135,000.00 7,811.83 142,811.83 4,798.67
2/1/2007 53,741.00 12,435.00 70,974.67 60,000.00 7,894.21 67,894.21 3,080.47
' 2/1/2008 132,524.00 12,435.00 148,039.47 120,000.00 25,249.21 145,249.21 2,790.26
2/1/2009 185,943.00 12,435.00 201,168.26 155,000.00 45,685.17 200,685.17 483.09
2/1/2010 236,381.00 12,435.00 249,299.09 180,000.00 69,291.31 249,291.31 7.78
2/1/2011 272,019.00 12,435.00 284,461.78 190,000.00 91,474.66 281,474.66 2,987.12
2/1/2012 310,832.00 12,435.00 326,254.12 205,000.00 119,855.79 324,855.79 1,398.33
2/1/2013 353,103.00 12,435.00 366,936.33 215,000.00 149,440.20 364,440.20 2,496.13
' 2/1/2014 399,140.00 12,435.00 414,071.13 225,000.00 182,963.58 407,963.58 6,107.55
2/1/2015 449,280.00 12,435.00 467,822.55 240,000.00 225,480.16 465,480.16 2,342.39
2/1/2016 503,887.00 12,435.00 518,664.39 250,000.00 268,657.91 518,657.91 6.48
2/1/2017 563,359.00 12,435.00 575,800.48 255,000.00 310,890.28 565,890.28 9,910.20
' 2/1/2018 628,130.00 12,435.00 650,475.20 270,000.00 370,924.50 640,924.50 9,550.70
2/1/2019 698,673.00 12,435.00 720,658.70 280,000.00 430,971.52 710,971.52 9,687.18
2/1/2020 775,501.00 12,435.00 797,623.18 290,000.00 497,668.05 787,668.05 9,955.13
' 2/1/2021 859,174.00 12,435.00 881,564.13 300,000.00 571,600.65 871,600.65 9,963.49
2/1/2022 950,302.00 12,435.00 972,700.49 310,000.00 653,405.33 963,405.33 9,295.16
2/1/2023 1,049,550.00 12,435.00 1,071,280.16 320,000.00 743,771.59 1,063,771.59 7,508.57
2/1/2024 1,157,641.00 426,935.00 1,592,084.57 145,000.00 370,605.41 515,605.41 1,076,479.16
' 2/1/2025 1,275,363.00 - 2,351,842.16 2,351,842.16
2/1/2026 1,403,574.00 - - - 3,755,416.16 3,755,416.16
' 2/1/2027 1,543,208.00 - 5,298,624.16 - - - 5,298,624.16
2/1/2028 1,695,284.00 - 6,993,908.16 - - - 6,993,908.16
' 2/1/2029 1,860,910.00 - 8,854,818.16 - - - 8,854,818.16
8/1/2029 - - 8,854,818.16 - - - 8,854,818.16
Total 17,494,767.00 648,692.50 4,145,000.00 5,143,641.34 9,288,641.34
CREWS & A SSOCIATES
Investment Bankers
' Combined Muuntain Inn & Downtown MasterTlan District
Based on 5.16 Mils /1996-2004 Median Growth Rate of 6.52%
' (18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
' Total Available Increment................................................................................ 2,699,896,867
Total Available Yield...................................................................................... 13,931,468
Net Present Value of Available Yield................................................................... 8,463,723
' Tax Rate.................................................................................................... 0.516°r
PresentValue Rate......................................................................................... 3.00°r
' Year 2005 2006 2007 2008 2009
Frozen Assessment 31,703,839 31,703,839 31,703,839 31,703,839 31,703,839
' Total Assessment 35,046,385 42,118,745 57,386,791 67,739,368 77,514,159
Assessment Growth Rate 10.54% 20.18% 36.25% 18.04% 14.439
Increment 3,342,546 10,414,906 25,682,952 36,035,529 45,810,320
' Available Yield 17,248 53,741 132,524 185,943 236,381
PV of Available Yield 16,745 50,656 121,278 165,208 203,905
' Year 2010 2011 2012 2013 2014
Frozen Assessment 31,703,839 31,703,839 31,703,839 31,703,839 31,703,839
Total Assessment 82,568,082 87,951,521 93,685,960 99,794,284 106,300,872
'Assessment Growth Rate 6.52% 6.52% 6.52% 6.52% 6.529
Increment 50,864,243 56,247,682 61,982,121 68,090,445 74,597,033
Available Yield 262,459 290,238 319,828 351,347 384,921
PV of Available Yield 219,806 235,990 252,475 269,278 286,417
I
Year 2015 2016 2017 2018 2019
Frozen Assessment 31,703,839 31,703,839 31,703,839 31,703,839 31,703,839
Total Assessment 113,231,689 120,614,395 128,478,453 136,855,248 145,778,210
' Assessment Growth Rate 6.52% 6.52% 6.52% 6.52% 6.52°r
Increment 81,527,850 88,910,556 96,774,614 105,151,409 114,074,371
Available Yield 420,684 458,778 499,357 542,581 588,624
PV of Available Yield 303,911 321,778 340,038 358,710 377,815
Year 2020 2021 2022 2023 2024
'
Frozen Assessment 31,703,839 31,703,839 31,703,839 31,703,839 31,703,839
Total Assessment 155,282,950 165,407,398 176,191,960 187,679,676 199,916,391
' Assessment Growth Rate 6.52% 6.52% 6.52% 6.52% 6.52°,
Increment 123,579,111 133,703,559 144,488,121 155,975,837 168,2 12,552
Available Yield 637,668 689,910 745,559 804,835 867,977
PV of Available Yield 397,374 417,407 437,937 458,986 480,578
Year 2025 2026 2027 2028 2029
' Frozen Assessment 31,703,839 31,703,839 31,703,839 31,703,839 31,703,839
Total Assessment 212,950,940 226,835,341 241,625,005 257,378,956 274,160,064
Assessment Growth Rate 6.52% 6.52% 6.52% 6.52% 6.52°°
Increment 181,247,101 195,131,502 209,921,166 225,675,117 242,456,225
Available Yield 935,235 1,006,879 1,083,193 1,164,484 1,251,074
PV of Available Yield 502,735 525,482 548,845 572,849 597,520
Mountain in / Dickson Street Redevelopment District
II
Based on 1996-2004 Median Growth Rate of 6.52% at 5.16 Mils
'Par Amount
Interest Rate
DSRF
Interest Earnings Rate
4,145,000.00
6.85%
414,500.00
3.00%
DSRF
Total
Accrued
Total Principal
Excess Cash
Date Revenue Earnings
Revenues Bonds Called
Interest
& Interest
Balance
4/1/2005 - - - - - - -
' 2/1/2006 137,248.00 10,362.50 147,610.50 135,000.00 7,811.83 142,811.83 4,798.67
2/1/2007 53,741.00 12,435.00 70,974.67 60,000.00 7,894.21 67,894.21 3,080.47
' 2/1/2008 132,524.00 12,435.00 148,039.47 120,000.00 25,249.21 145,249.21 2,790.26
2/1/2009 185,943.00 12,435.00 201,168.26 155,000.00 45,685.17 200,685.17 483.09
2/1/2010 236,381.00 12,435.00 249,299.09 180,000.00 69,291.31 249,291.31 7.78
2/1/2011 262,459.00 12,435.00 274,901.78 185,000.00 89,067.43 274,067.43 834.35
' 2/1/2012 290,238.00 12,435.00 303,507.35 190,000.00 111,085.86 301,085.86 2,421.49
2/1/2013 319,828.00 12,435.00 334,684.49 195,000.00 135,538.79 330,538.79 4,145.71
' 2/1/2014 351,347.00 12,435.00 367,927.71 200,000.00 162,634.29 362,634.29 5,293.41
2/1/2015 384,921.00 12,435.00 402,649.41 205,000.00 192,597.64 397,597.64 5,051.78
2/1/2016 420,684.00 12,435.00 438,170.78 210,000.00 225,672.64 435,672.64 2,498.14
2/1/2017 458,778.00 12,435.00 473,711.14 210,000.00 256,027.29 466,027.29 7,683.85
2/1/2018 499,357.00 12,435.00 519,475.85 215,000.00 295,365.81 510,365.81 9,110.04
2/1/2019 542,581.00 12,435.00 564,126.04 220,000.00 338,620.48 558,620.48 5,505.56
' 2/1/2020 588,624.00 12,435.00 606,564.56 220,000.00 377,541.28 597,541.28 9,023.28
2/1/2021 637,668.00 12,435.00 659,126.28 225,000.00 428,700.49 653,700.49 5,425.80
' 2/1/2022 689,910.00 12,435.00 707,770.80 225,000.00 474,245.80 699,245.80 8,525.00
'2/1/2023 745,559.00 12,435.00 766,519.00 230,000.00 534,585.83 764,585.83 1,933.17
2/1/2024 804,835.00 12,435.00 819,203.17 230,000.00 587,856.86 817,856.86 1,346.30
'2/1/2025 867,977.00 12,435.00 881,758.30 230,000.00 644,839.46 874,839.46 6,918.85
2/1/2026 935,235.00 12,435.00 954,588.85 230,000.00 705,792.20 935,792.20 18,796.65
' 2/1/2027 1,006,879.00 426,935.00 1,452,610.65 75,000.00 251,410.34 326,410.34 1,126,200.31
2/1/2028 1,083,193.00 - 2,209,393.31 - - - 2,209,393.31
' 2/1/2029 1,164,484.00 - 3,373,877.31 - - - 3,373,877.31
8/1/2029 - - 3,373,877.31 - - - 3,373,877.31
Total 12,800,394.00 685,997.50 4,145,000.00 5,967,514.19 10,112,514.19
Combined A'antain Inn & Downtown
District
Based on 3.16 Mils / UofA Projected Assessment Growth Rate
(18 Projects Planned Over Next S Years / $128 Million Appraised Value)
Total Available Increment.................................................................................. 5,319,284,550
Total Available Yield........................................................................................ 16,808,939
Net Present Value of Available Yield..................................................................... 9,723,926
TaxRate...................................................................................................... 0.316°,'
Present Value Rate........................................................................................... 3.00°°
Year
2005
2006
2007
2008
2009
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
Assessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43°/
Increment
3,599,830
10,672,190
25,940,236
36,292,813
46,067,604
Available Yield
11,375
33,724
81,971
114,685
145,574
PV of Available Yield
11,044
31,788
75,015
101,896
125,573
(ear
2010
2011
2012
2013
2014
,rozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
85,994,207
95,453,570
106,010,735
117,809,730
130,992,639
lssessment Growth Rate
10.94%
11.00%
11.06%
11.13%
11.19°i
ncrement
54,547,652
64,007,015
74,564,180
86,363,175
99,546,084
\vailable Yield
172,371
202,262
235,623
272,908
314,566
'V of Available Yield
144,358
164,458
186,003
209,161
234,066
tear
2015
2016
2017
2018
2019
�rozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
145,742,410
162,240,451
180,719,638
201,430,109
224,655,000
assessment Growth Rate
11.26%
11.32%
11.39%
11.46%
11.530/
ncrement
114,295,855
130,793,896
149,273,083
169,983,554
193,208,445
\vailableYield
361,175
413,309
471,703
537,148
610,539
'V of Available Yield
260,920
289,886
321,207
355,118
391,882
(ear
2020
2021
2022
2023
2024
�rozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
250,714,980
279,973,418
312,842,298
349,788,973
391,378,882
assessment Growth Rate
11.60%
11.67%
11.74%
11.81%
1 1.89°
ncrement
219,268,425
248,526,863
281,395,743
318,342,418
359,932,327
\vailable Yield
692,888
785,345
889,211
1,005,962
1,137,386
'V of Available Yield
431,785
475,147
522,317
573,686
629,743
Year
2025
2026
2027
2028
2029
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
438,187,796
490,901,788
550,349,995
617,382,624
693,073,734
Assessment Growth Rate
11.96%
12.03%
12.11%
12.18%
12.26°r
Increment
406,741,241
459,455,233
518,903,440
585,936,069
661,627,179
Available Yield
1,285,302
1,451,879
1,639,735
1,851,558
2,090,742
PV of Available Yield
690,913
757,725
830,840
910,844
998,550
Mountain Inn / Dickson Street Redevelopm t District
Based on UofA Projected Revenues
Par Amount of Bonds.............................................................................................. 3,725,000.00
InterestRate........................................................................................................ 6.50%
Accrued Total Principal Excess Cash
Date Revenue Bonds Called Interest & Interest Balance
4/19/2005
-
-
-
-
-
2/1/2006
131,375.46
120,000.00
6,181.92
126,181.92
5,193.54
2/1/2007
33,724.12
30,000.00
3,629.28
33,629.28
5,288.38
2/1/2008
81,971.14
70,000.00
13,651.54
83,651.54
3,607.99
2/1/2009
114,685.29
90,000.00
24,656.58
114,656.58
3,636.70
2/1/2010
145,573.63
105,000.00
37,601.97
142,601.97
6,608.36
2/1/2011
172,370.58
120,000.00
53,739.12
173,739.12
5,239.82
2/1/2012
202,262.17
130,000.00
70,650.32
200,650.32
6,851.67
2/1/2013
235,622.81
145,000.00
93,585.90
238,585.90
3,888.58
2/1/2014
272,907.63
155,000.00
116,887.05
271,887.05
4,909.16
2/1/2015
314,565.62
170,000.00
147,896.60
317,896.60
1,578.18
2/1/2016
361,174.90
180,000.00
178,830.72
358,830.72
3,922.36
2/1/2017
413,308.71
195,000.00
219,411.27
414,411.27
2,819.81
2/1/2018
471,702.94
205,000.00
259,441.44
464,441.44
10,081.31
2/1/2019
537,148.03
225,000.00
318,425.40
543,425.40
3,803.94
2/1/2020
610,538.69
235,000.00
370,069.54
605,069.54
9,273.08
2/1/2021
692,888.22
255,000.00
444,935.22
699,935.22
2,226.09
2/1/2022
785,344.89
265,000.00
510,431.87
775,431.87
12,139.11
2/1/2023
889,210.55
285,000.00
604,042.68
889,042.68
12,306.97
2/1/2024
1,005,962.04
305,000.00
709,279.33
1,014,279.33
3,989.68
2/1/2025
1,137,386.15
320,000.00
814,456.96
1,134,456.96
6,918.88
2/1/2026
1,285,302.32
120,000.00
333,522.96
453,522.96
838,698.24
2/1/2027
1,451,878.54
-
-
-
2,290,576.78
2/1/2028
1,639,734.87
-
-
-
3,930,311.64
2/1/2029
1,851,557.98
-
-
-
5,781,869.62
8/1/2029
-
-
-
-
5,781,869.62
Total
14,838,197.29
3,725,000.00
5,331,327.67
9,056,327.67
Combined entain Inn & Downtown
District
Based on 3.16 Mils /2000-2004 Median Growth Rate of 8.91%
(18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
Total Available Increment................................................................................ 3,769,234,181
Total Available Yield...................................................................................... 1 1,910,780
Net Present Value of Available Yield................................................................... 7,060,627
TaxRate.................................................................................................... 0.32°/a
PresentValue Rate......................................................................................... 3.00°/a
Year
2005
2006
2007
2008
2009
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
Assessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
Increment
3,599,830
10,672,190
25,940,236
36,292,813
46,067,604
Available Yield
11,375
33,724
81,971
114,685
145,574
PV of Available Yield
11,044
31,788
75,015
101,896
125,573
Year
2010
2011
2012
2013
2014
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
84,420,670
91,942,552
100,134,633
109,056,629
118,773,575
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
52,974,115
60,495,997
68,688,078
77,610,074
87,327,020
Available Yield
167,398
191,167
217,054
245,248
275,953
PV of Available Yield
140,193
155,437
171,345
187,962
205,335
ear
2015
2016
2017
2018
2019
-ozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
oral Assessment
129,356,300
140,881,946
153,434,528
167,105,544
181,994,648
ssessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.910/c
icrement
97,909,745
109,435,391
121,987,973
135,658,989
150,548,093
vailable Yield
309,395
345,816
385,482
428,682
475,732
V of Available Yield
223,513
242,548
262,494
283,410
305,354
ear
2020
2021
2022
2023
2024
rozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
198,210,371
215,870,916
235,105,014
256,052,871
278,867,182
.ssessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
icrement
166,763,816
184,424,361
203,658,459
224,606,316
247,420,627
vailable Yield
526,974
582,781
643,561
709,756
781,849
V of Available Yield
328,393
352,592
378,024
404,764
432,891
Year
2025
2026
2027
2028
2029
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
303,714,248
330,775,187
360,247,256
392,345,287
427,303,252
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.9l°/
Increment
272,267,693
299,328,632
328,800,701
360,898,732
395,856,697
Available Yield
860,366
945,878
1,039,010
1,140,440
1,250,907
PV of Available Yield
462,489
493,647
526,458
561,021
597,440
Mountain n / Dickson Street Redevelopmot District
Based on 2000-2004 Median Growth Rate of 8.91%
Par Amount of Bonds .........
Interest Rate ....................
Date Revenue
4/19/2005
2/1/2006
2/1/2007
2/1/2008
2/1/2009
2/1/2010
2/1/2011
2/1/2012
2/1/2013
2/1/2014
2/1/2015
2/1/2016
2/1/2017
2/1/2018
2/1/2019
2/1/2020
2/1/2021
2/1/2022
2/1/2023
2/1/2024
2/1/2025
2/1/2026
2/1/2027
2/1/2028
2/1/2029
8/1/2029
Total
Accrued
Bonds Called Interest
... 3,725,000.00
6.50%
Total Principal Excess Cash
& Interest Balance
131,375.46
120,000.00
6,181.92
126,181.92
5,193.54
33,724.12
30,000.00
3,629.28
33,629.28
5,288.38
81,971.14
70,000.00
13,651.54
83,651.54
3,607.99
114,685.29
90,000.00
24,656.58
114,656.58
3,636.70
145,573.63
105,000.00
37,601.97
142,601.97
6,608.36
167,398.20
120,000.00
53,739.12
173,739.12
267.44
191,167.35
120,000.00
65,215.68
185,215.68
6,219.11
217,054.33
135,000.00
87,131.70
222,131.70
1,141.74
245,247.83
140,000.00
105,575.40
245,575.40
814.17
275,953.38
145,000.00
126,147.10
271,147.10
5,620.45
309,394.79
155,000.00
153,993.12
308,993.12
6,022.13
345,815.84
165,000.00
185,655.69
350,655.69
1,182.27
385,481.99
170,000.00
215,146.56
385,146.56
1,517.71
428,682.41
175,000.00
247,664.20
422,664.20
7,535.91
475,731.97
185,000.00
291,331.34
476,331.34
6,936.55
526,973.66
190,000.00
331,520.36
521,520.36
12,389.85
582,780.98
200,000.00
385,231.60
585,231.60
9,939.23
643,560.73
205,000.00
434,486.84
639,486.84
14,013.12
709,755.96
215,000.00
499,983.79
714,983.79
8,785.29
781,849.18
220,000.00
559,939.16
779,939.16
10,695.31
860,365.91
230,000.00
639,252.34
869,252.34
1,808.88
945,878.48
235,000.00
711,816.88
946,816.88
870.47
1,039,010.22
240,000.00
790,836.00
1,030,836.00
9,044.69
1,140,439.99
65,000.00
232,626.68
297,626.68
851,858.00
10,779,872.85 3,725,000.00 6,203,014.85 9,928,014.85
Combined I ntain Inn & Downtown
District
Based on 3.16 Mils /1996-2004 Median Growth Rate of 6.52%
(18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
LI Available Increment................................................................................ 2,706,328,967
LIAvailable Yield...................................................................................... 8,552,000
Present Value of Available Yield................................................................... 5,197,368
Rate.................................................................................................... 0.32%
entValue Rate.........................................................................................
Year
2005
2006
2007
2008
2009
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
Assessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43°/
Increment
3,599,830
10,672,190
25,940,236
36,292,813
46,067,604
Available Yield
11,375
33,724
81,971
114,685
145,574
PV of Available Yield
11,044
31,788
75,015
101,896
125,573
Year
2010
2011
2012
2013
2014
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
82,568,082
87,951,521
93,685,960
99,794,284
106,300,872
Assessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
Increment
51,121,527
56,504,966
62,239,405
68,347,729
74,854,317
Available Yield
161,544
178,556
196,677
215,979
236,540
PV of Available Yield
135,291
145,182
155,258
165,530
176,008
ear
2015
2016
2017
2018
2019
cozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
113,231,689
120,614,395
128,478,453
136,855,248
145,778,210
ssessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
icrement
81,785,134
89,167,840
97,031,898
105,408,693
114,331,655
vailable Yield
258,441
281,770
306,621
333,091
361,288
V of Available Yield
186,703
197,628
208,794
220,213
231,897
ear
2020
2021
2022
2023
2024
•ozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
155,282,950
165,407,398
176,191,960
187,679,676
199,916,391
ssessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
icrement
123,836,395
133,960,843
144,745,405
156,233,121
168,469,836
vailable Yield
391,323
423,316
457,395
493,697
532,365
V of Available Yield
243,860
256,113
268,672
281,548
294,757
Year
2025
2026
2027
2028
2029
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
212,950,940
226,835,341
241,625,005
257,378,956
274,160,064
Assessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
Increment
181,504,385
195,388,786
210,178,450
225,932,401
242,713,509
Available Yield
573,554
617,429
664,164
713,946
766,975
PV of Available Yield
308,313
322,231
336,526
351,214
366,311
Mountainn / Dickson Street Redevelopm t District
Based on 1996-2004 Median Growth Rate of 6.52%
Par Amount of Bonds.............................................................................................. 3,725,000.00
InterestRate........................................................................................................ 6.50%
Accrued
Total Principal
Excess Cash
Date Revenue Bonds Called
Interest
& Interest
Balance
4/19/2005
-
-
-
-
-
2/1/2006
131,375.46
120,000.00
6,181_92
126,181.92
5,193.54
2/1/2007
33,724.12
30,000.00
3,629.28
33,629.28
5,288.38
2/1/2008
81,971.14
70,000.00
13,651.54
83,651.54
3,607.99
2/1/2009
114,685.29
90,000.00
24,656.58
114,656.58
3,636.70
2/1/2010
145,573.63
105,000.00
37,601.97
142,601.97
6,608.36
2/1/2011
161,544.02
115,000.00
51,499.99
166,499.99
1,652.39
2/1/2012
178,555.69
115,000.00
62,498.36
177,498.36
2,709.72
2/1/2013
196,676.52
120,000.00
77,450.40
197,450.40
1,935.84
2/1/2014
215,978.82
120,000.00
90,493.20
210,493.20
7,421.46
2/1/2015
236,539.64
130,000.00
113,097.40
243,097.40
863.71
2/1/2016
258,441.02
130,000.00
129,155.52
259,155.52
149.21
2/1/2017
281,770.37
130,000.00
146,274.18
276,274.18
5,645.40
2/1/2018
306,620.80
135,000.00
170,851.68
305,851.68
6,414.52
2/1/2019
333,091.47
140,000.00
198,131.36
338,131.36
1,374.63
2/1/2020
361,288.03
140,000.00
220,466.96
360,466.96
2,195.70
2/1/2021
391,323.01
140,000.00
244,278.16
384,278.16
9,240.55
2/1/2022
423,316.26
145,000.00
279,292.91
424,292.91
8,263.90
2/1/2023
457,395.48
145,000.00
307,319.96
452,319.96
13,339.42
2/1/2024
493,696.66
150,000.00
348,825.90
498,825.90
8,210.19
2/1/2025
532,364.68
150,000.00
381,776.70
531,776.70
8,798.17
2/1/2026
573,553.86
150,000.00
416,903.70
566,903.70
15,448.33
2/1/2027
617,428.56
155,000.00
469,496.24
624,496.24
8,380.65
2/1/2028
664,163.90
155,000.00
510,748.25
665,748.25
6,796.30
2/1/2029
713,946.39
155,000.00
554,725.16
709,725.16
11,017.53
8/1/2029
-
690,000.00
2,572,101.96
3,262,101.96
(3,251,084.43)
Total
7,905,024.85
3,725,000.00
7,431,109.28
11,156,109.28
Combined NOntain Inn & Downtown
District
Based on 5.16 Mils / UofA Projected Assessment Growth Rate
(18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
Total Available Increment................................................................................ 5,319,284,550
Total Available Yield...................................................................................... 27,447,508
Net Present Value of Available Yield................................................................... 15,878,309
TaxRate.................................................................................................... 0.516°
Present Value Rate......................................................................................... 3.00°
Year
2005
2006
2007
2008
2009
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
Assessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
Increment
3,599,830
10,672,190
25,940,236
36,292,813
46,067,604
Available Yield
18,575
55,069
133,852
187,271
237,709
PV of Available Yield
18,034
51,907
122,493
166,388
205,050
Year
2010
2011
2012
2013
2014
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
85,994,207
95,453,570
106,010,735
117,809,730
130,992,639
Assessment Growth Rate
10.94%
11.00%
11.06%
11.13%
11.19%
Increment
54,547,652
64,007,015
74,564,180
86,363,175
99,546,084
Available Yield
281,466
330,276
384,751
445,634
513,658
PV of Available Yield
235,723
268,545
303,726
341,541
382,210
Year
2015
2016
2017
2018
2019
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
145,742,410
162,240,451
180,719,638
201,430,109
224,655,000
Assessment Growth Rate
11.26%
11.32%
11.39%
11.46%
11.53%
Increment
114,295,855
130,793,896
149,273,083
169,983,554
193,208,445
Available Yield
589,767
674,897
770,249
877,115
996,956
PV of Available Yield
426,060
473,359
524,502
579,876
639,908
ear
2020
2021
2022
2023
2024
-ozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
250,714,980
279,973,418
312,842,298
349,788,973
391,378,882
ssessment Growth Rate
11.60%
11.67%
11.74%
11.81%
11.89%
icrement
219,268,425
248,526,863
281,395,743
318,342,418
359,932,327
vailable Yield
1,131,425
1,282,399
1,452,002
1,642,647
1,857,251
V of Available Yield
705,067
775,872
852,898
936,779
1,028,315
ear
2025
2026
2027
2028
2029
rozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
438,187,796
490,901,788
550,349,995
617,382,624
693,073,734
ssessment Growth Rate
11.96%
12.03%
12.11%
12.18%
12.26%
icrement
406,741,241
459,455,233
518,903,440
585,936,069
661,627,179
vailable Yield
2,098,785
2,370,789
2,677,542
3,023,430
3,413,996
V of Available Yield
1,128,200
1,237,297
1,356,688
1,487,327
1,630,544
Mountain 15n / Dickson Street Redevelopm!t District
Based on UofA Projected Revenues at 5.16 Mils
Par Amount of Bonds.............................................................................................. 3,725,000.00
InterestRate........................................................................................................ 6.50%
Accrued
Total Principal
Excess Cash
Date
Revenue
Bonds Called
Interest
& Interest
Balance
4/19/2005
-
-
-
-
-
211/2006
138,575.12
130,000.00
6,697.08
136,697.08
1,878.04
2/1/2007
55,068.50
50,000.00
6,048.80
56,048.80
897.75
2/1/2008
133,851.62
110,000.00
21,452.42
131,452.42
3,296.94
2/1/2009
187,270.91
145,000.00
39,724.49
184,724.49
5,843.37
2/1/2010
237,708.83
175,000.00
62,669.95
237,669.95
5,882.25
2/1/2011
281,465.89
195,000.00
87,326.07
282,326.07
5,022.07
2/1/2012
330,276.20
215,000.00
116,844.76
331,844.76
3,453.51
2/1/2013
384,751.17
235,000.00
151,673.70
386,673.70
1,530.98
2/1/2014
445,633.98
250,000.00
188,527.50
438,527.50
8,637.46
2/1/2015
513,657.79
275,000.00
239,244.50
514,244.50
8,050.75
2/1/2016
589,766.61
295,000.00
293,083.68
588,083.68
9,733.68
2/1/2017
674,896.50
320,000.00
360,059.52
680,059.52
4,570.67
2/1/2018
770,249.11
340,000.00
430,293.12
770,293.12
4,526.65
2/1/2019
877,115.14
365,000.00
516,556.76
881,556.76
85.03
2/1/2020
996,955.58
385,000.00
606,284.14
991,284.14
5,756.47
2/1/2021
1,131,425.07
240,000.00
418,762.56
658,762.56
478,418.98
2/1/2022
1,282,398.61
-
-
-
1,760,817.60
2/1/2023
1,452,002.03
-
-
-
3,212,819.63
2/1/2024
1,642,646.88
-
-
-
4,855,466.51
2/1/2025
1,857,250.81
-
-
-
6,712,717.31
2/1/2026
2,098,784.80
-
-
-
8,811,502.12
2/1/2027
2,370,789.00
-
-
-
11,182,291.12
2/1/2028
2,677,541.75
-
-
-
13,859,832.87
2/1/2029
3,023,430.12
-
-
-
16,883,262.98
8/1/2029
-
-
-
-
16,883,262.98
Total
24,153,512.03
3,725,000.00
3,545,249.05
7,270,249.05
Combined AWintain Inn & Downtown
District
Based on 5.16 Mils /2000-2004 Median Growth Rate of 8.91%
(18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
Total Available Increment................................................................................ 3,769,234,181
Total Available Yield...................................................................................... 1 9,449,248
Net Present Value of Available Yield................................................................... 1 1,529,379
TaxRate.................................................................................................... 0.516°/a
Present Value Rate......................................................................................... 3.00°/a
Year
•Frozen
2005
2006
2007
2008
2009
Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
Assessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
Increment
3,599,830
10,672,190
25,940,236
36,292,813
46,067,604
Available Yield
18,575
55,069
133,852
187,271
237,709
PV of Available Yield
18,034
51,907
122,493
166,388
205,050
Year
2010
2011
2012
2013
2014
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
84,420,670
91,942,552
100,134,633
109,056,629
118,773,575
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
52,974,115
60,495,997
68,688,078
77,610,074
87,327,020
Available Yield
273,346
312,159
354,430
400,468
450,607
PV of Available Yield
228,923
253,814
279,791
306,925
335,294
ear
2015
2016
2017
2018
2019
-ozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
129,356,300
140,881,946
153,434,528
167,105,544
181,994,648
ssessmentGrowthRate
8.91%
8.91%
8.91%
8.91%
8.91%
icrement
97,909,745
109,435,391
121,987,973
135,658,989
150,548,093
vailable Yield
505,214
564,687
629,458
700,000
776,828
V of Available Yield
364,978
396,060
428,630
462,783
498,616
Year
2020
2021
2022
2023
2024
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
198,210,371
215,870,916
235,105,014
256,052,871
278,867,182
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
166,763,816
184,424,361
203,658,459
224,606,316
247,420,627
Available Yield
860,501
951,630
1,050,878
1,158,969
1,276,690
PV of Available Yield
536,236
575,752
617,280
660,944
706,873
x
2025
2026
2027
2028
2029
zen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
al Assessment
303,714,248
330,775,187
360,247,256
392,345,287
427,303,252
essmentGrowthRate
8.91%
8.91%
8.91%
8.91%
8.91%
'ement
272,267,693
299,328,632
328,800,701
360,898,732
395,856,697
tilable Yield
1,404,901
1,544,536
1,696,612
1,862,237
2,042,621
of Available Yield
755,204
806,082
859,659
916,097
975,567
MountainOn / Dickson Street Redeveloprat District
Based on 2000-2004 Median Growth Rate of 8.91@ at 5.16 Mils
Par Amount of Bonds.............................................................................................. 3,725,000.00
InterestRate........................................................................................................ 6.50%
Accrued Total Principal Excess Cash
Date Revenue Bonds Called Interest & Interest Balance
4/19/2005
-
-
-
-
-
2/1/2006
138,575.12
130,000.00
6,697.08
136,697.08
1,878.04
2/1/2007
55,068.50
50,000.00
6,048.80
56,048.80
897.75
2/1/2008
133,851.62
110,000.00
21,452.42
131,452.42
3,296.94
2/1/2009
187,270.91
145,000.00
39,724.49
184,724.49
5,843.37
2/1/2010
237,708.83
175,000.00
62,669.95
237,669.95
5,882.25
2/1/2011
273,346.43
190,000.00
85,086.94
275,086.94
4,141.74
2/1/2012
312,159.34
200,000.00
108,692.80
308,692.80
7,608.29
2/1/2013
354,430.48
220,000.00
141,992.40
361,992.40
46.37
2/1/2014
400,467.98
225,000.00
169,674.75
394,674.75
5,839.60
2/1/2015
450,607.42
240,000.00
208,795.20
448,795.20
7,651.82
2/1/2016
505,214.28
255,000.00
253,343.52
508,343.52
4,522.59
2/1/2017
564,686.62
265,000.00
298,174.29
563,174.29
6,034.92
2/1/2018
629,457.94
280,000.00
354,359.04
634,359.04
1,133.82
2/1/2019
700,000.38
285,000.00
403,338.84
688,338.84
12,795.36
2/1/2020
776,828.16
305,000.00
480,303.02
785,303.02
4,320.50
2/1/2021
860,501.29
315,000.00
549,625.86
864,625.86
195.94
2/1/2022
951,629.70
325,000.00
626,001.35
951,001.35
824.29
2/1/2023
1,050,877.65
10,000.00
21,194.48
31,194.48
1,020,507.46
2/1/2024
1,158,968.59
-
-
-
2,179,476.05
2/1/2025
1,276,690.43
-
-
-
3,456,166.48
2/1/2026
1,404,901.29
-
-
-
4,861,067.77
2/1/2027
1,544,535.74
-
-
-
6,405,603.52
2/1/2028
1,696,611.62
-
-
-
8,102,215.13
2/1/2029
1,862,237.46
-
-
-
9,964,452.59
8/1/2029
-
-
-
-
9,964,452.59
Total
17,526,627.82
3,725,000.00
3,837,175.23
7,562,175.23
'Par Amount
Interest Rate
DSRF
Interest Earnings Rate
II
Mountain A / Dickson Street Redevelopment District
Based on UofA
4,145,000.00
6.85%
414,500.00
3.00%
DSRF Total
Date Revenue Earnings Revenues Bonds Called
Revenues
Accrued Total Principal Excess Cash
Interest & Interest Balance
• 4/1/2005 - - - - - - -
' 2/1/2006 130,562.00 10,362.50 140,924.50 130,000.00 7,522.50 137,522.50 3,402.00
2/1/2007 32,911.00 12,435.00 48,748.00 40,000.00 5,262.80 45,262.80 3,485.20
' 2/1/2008 81,158.00 12,435.00 97,078.20 80,000.00 16,832.80 96,832.80 245.39
2/1/2009 113,872.00 12,435.00 126,552.39 95,000.00 28,000.59 123,000.59 3,551.81
2/1/2010 144,761.00 12,435.00 160,747.81 115,000.00 44,269.45 159,269.45 1,478.36
2/1/2011 171,558.00 12,435.00 185,471.36 125,000.00 60,180.70 185,180.70 290.66
2/1/2012 201,449.00 12,435.00 214,174.66 135,000.00 78,929.43 213,929.43 245.23
2/1/2013 234,810.00 12,435.00 247,490.23 145,000.00 100,785.25 245,785.25 1,704.98
' 2/1/2014 272,095.00 12,435.00 286,234.98 155,000.00 126,041.58 281,041.58 5,193.41
2/1/2015 313,753.00 12,435.00 331,381.41 170,000.00 159,715.11 329,715.11 1,666.29
2/1/2016 360,362.00 12,435.00 374,463.29 180,000.00 193,433.69 373,433.69 1,029.60
2/1/2017 412,496.00 12,435.00 425,960.60 190,000.00 231,643.74 421,643.74 4,316.86
2/1/2018 470,890.00 12,435.00 487,641.86 205,000.00 281,627.86 486,627.86 1,014.00
2/1/2019 536,335.00 12,435.00 549,784.00 215,000.00 330,924.56 545,924.56 3,859.44
2/1/2020 609,726.00 12,435.00 626,020.44 230,000.00 394,702.24 624,702.24 1,318.20
2/1/2021 692,075.00 12,435.00 705,828.20 240,000.00 457,280.52 697,280.52 8,547.68
' 2/1/2022 784,532.00 12,435.00 805,514.68 255,000.00 537,478.57 792,478.57 13,036.10
2/1/2023 888,398.00 12,435.00 913,869.10 270,000.00 627,557.28 897,557.28 16,311.83
2/1/2024 1,005,149.00 12,435.00 1,033,895.83 290,000.00 741,210.83 1,031,210.83 2,685.00
'2/1/2025 1,136,573.00 12,435.00 1,151,693.00 300,000.00 841,094.94 1,141,094.94 10,598.06
2/1/2026 1,284,489.00 12,435.00 1,307,522.06 320,000.00 981,971.76 1,301,971.76 5,550.30
'2/1/2027 1,451,066.00 420,717.50 1,877,333.80 260,000.00 871,555.84 1,131,555.84 745,777.95
2/1/2028 1,638,922.00 - 2,384,699.95 - - - 2,384,699.95
2/1/2029 1,850,745.00 - 4,235,444.95 - - - 4,235,444.95
8/1/2029 - - 4,235,444.95 - - - 4,235,444.95
Total 14,818,687.00 679,780.00 4,145,000.00 7,118,022.05 11,263,022.05
Combined
ntain Inn
& Downtown Maste
an District
Based on 5.16
Mils /1996-2004 Median Growth Rate of 6.52%
(18 Projects Planned Over Next
5 Years / $128 Million
Appraised Value)
Total Available Increment................................................................................
2,706,328,967
Total Available Yield......................................................................................
13,964,657
Net Present Value of Available
Yield...................................................................
8,486,841
TaxRate....................................................................................................
0.516%
PresentValue Rate.........................................................................................
3.00%
Year
2005
2006
2007
2008
2009
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
Assessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
Increment
3,599,830
10,672,190
25,940,236
36,292,813
46,067,604
Available Yield
18,575
55,069
133,852
187,271
237,709
PV of Available Yield
18,034
51,907
122,493
166,388
205,050
•Year
2010
2011
2012
2013
2014
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
82,568,082
87,951,521
93,685,960
99,794,284
106,300,872
Assessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
Increment
51,121,527
56,504,966
62,239,405
68,347,729
74,854,317
Available Yield
263,787
291,566
321,155
352,674
386,248
PV of Available Yield
220,918
237,070
253,523
270,295
287,405
Year
2015
2016
2017
2018
2019
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
113,231,689
120,614,395
128,478,453
136,855,248
145,778,210
Assessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
Increment
81,785,134
89,167,840
97,031,898
105,408,693
114,331,655
Available Yield
422,011
460,106
500,685
543,909
589,951
PV of Available Yield
304,870
322,709
340,942
359,588
378,667
Year
2020
2021
2022
2023
2024
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
155,282,950
165,407,398
176,191,960
187,679,676
199,916,391
Assessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
Increment
123,836,395
133,960,843
144,745,405
156,233,121
168,469,836
Available Yield
638,996
691,238
746,886
806,163
869,304
PV of Available Yield
398,201
418,210
438,717
459,743
481,313
Year
2025
2026
2027
2028
2029
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
212,950,940
226,835,341
241,625,005
257,378,956
274,160,064
Assessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
Increment
181,504,385
195,388,786
210,178,450
225,932,401
242,713,509
Available Yield
936,563
1,008,206
1,084,521
1,165,811
1,252,402
PV of Available Yield
503,449
526,175
549,518
573,502
598,154
Mountain In / Dickson Street Redevelopment District
Based on 1996-2004 Median Growth Rate of 6.52% at 5.16 Mils
Par Amount of Bonds.............................................................................................. 3,725,000.00
InterestRate........................................................................................................ 6.50%
Accrued Total Principal Excess Cash
Date Revenue Bonds Called Interest & Interest Balance
4/19/2005
-
-
-
-
-
2/1/2006
138,575.12
130,000.00
6,697.08
136,697.08
1,878.04
2/1/2007
55,068.50
50,000.00
6,048.80
56,048.80
897.75
2/1/2008
133,851.62
110,000.00
21,452.42
131,452.42
3,296.94
2/1/2009
187,270.91
145,000.00
39,724.49
184,724.49
5,843.37
2/1/2010
237,708.83
175,000.00
62,669.95
237,669.95
5,882.25
2/1/2011
263,787.08
185,000.00
82,847.81
267,847.81
1,821.52
2/1/2012
291,565.62
190,000.00
103,258.16
293,258.16
128.98
2/1/2013
321,155.33
195,000.00
125,856.90
320,856.90
427.41
2/1/2014
352,674.28
200,000.00
150,822.00
350,822.00
2,279.69
2/1/2015
386,248.27
205,000.00
178,345.90
383,345.90
5,182.07
2/1/2016
422,011.29
210,000.00
208,635.84
418,635.84
8,557.52
2/1/2017
460,106.05
220,000.00
247,540.92
467,540.92
1,122.65
2/1/2018
500,684.59
220,000.00
278,424.96
498,424.96
3,382.28
2/1/2019
543,908.86
225,000.00
318,425.40
543,425.40
3,865.74
2/1/2020
589,951.34
230,000.00
362,195.72
592,195.72
1,621.36
2/1/2021
638,995.80
230,000.00
401,314.12
631,314.12
9,303.04
2/1/2022
691,237.95
235,000.00
452,647.13
687,647.13
12,893.86
2/1/2023
746,886.29
240,000.00
508,667.52
748,667.52
11,112.63
2/1/2024
806,162.91
245,000.00
569,748.97
814,748.97
2,526.57
2/1/2025
869,304.35
85,000.00
216,340.13
301,340.13
570,490.79
2/1/2026
936,562.63
-
-
-
1,507,053.42
2/1/2027
1,008,206.14
-
-
-
2,515,259.55
2/1/2028
1,084,520.80
-
-
-
3,599,780.36
2/1/2029
1,165,811.19
-
-
-
4,765,591.55
8/1/2029
-
-
-
-
4,765,591.55
Total
12,832,255.77
3,725,000.00
4,341,664.22
8,066,664.22
From: Clarice Pearman
To: Davis, Steve; Williams, Kit
Subject: Ord. 4684
Attached is a copy of the ordinance passed by City Council, March 15, 2005 regarding the TIF bonds.
CC: Deaton, Vicki
tASHINGTON COUNTY
STATE OF ARKANSAS
Washington County Courthouse
280 North College - Suite 250
Fayetteville, Arkansas 72701
January 29, 2005
City of Fayetteville
113 West Mountain
Fayetteville AR 727
Please accept this letter and its attachments as the assessor's certification required by ACA 14-168-
306(b)(5) for the approval of the Amended Highway 71 East Square Redevelopment District No. 1
Project Plan.
The assessed value of all real
property within the amended
redevelopment district
subject to
ad
valorem taxation, also known
as the Base Value as defined
in ACA 14-168-301 as
of January
1,
The total of the local millage rates of Washington County, the Fayetteville School District, and the
City of Fayetteville, also known as the Total Ad Valorem Rate as defined in ACA 14-168-301, is:
The portion of the total ad valorem rate that was, at January 1, 2001, pledged to the payment of debt
service by the Fayetteville School District, certified to me by the Fayetteville School District, also
known as the Debt Service Ad Valorem Rate as defined in ACA 14-168-301, is:
The total local ad valorem rate less the debt service ad valorem rate for property located in the
Fayetteville School District, also known as the Applicable Ad Valorem Rate as defined in A.C.A.
14-168-301, is:
Attached are the certifications from the Fayetteville School District of the debt service ad valorem
rate, a copy of the most recent millage ordinance detailing levied ad valorem millage rates for all
taxing entities in Washington County, and a report from the assessor's database detailing the
appraised and assessed value of each parcel in the redevelopment district along with totals for the
entire district.
E
•
CELEBRATING THE PAST WHILE EMBRACING THE FUTURE
September 21, 2004
Ms. Lee Ann Kizzar
County Assessor
Washington County Courthouse
280 North College - Suite 360
Fayetteville, AR 72701
Dear Ms. Kizzar:
Please be informed that the Fayetteville School Districts millage structure at January 1,
2001 was as follows:
19.3 mills General Maintenance & Operation
23.7 mills Debt Service
1.0 mill Capital Outlay
44.0 mills
I have attached the school ballot from that election for your reference. Please call me if
you have any questions.
Thank you;
USG(H.
LisZ.Molytad
1000 WEST STONE STREET PO Box 849 FAYETTEVILLE, ARKANSAS 72702 (501) 444-300
&UAL SCHOOL ELECTION BALA*
DISTRICT NO, 1
INSTRUCTIONS TO VOTER
1. To vote you must blacken
the Oval ( ) completely
next to the candidate of your
choice.
2. Use only the pencil
provided.
3. After voting, deposit ballot
in ballot box.
School Board Director. - 3yr.
Pos 2
o Howard Hamilton
(Unopposed)
School Board Director. - 3yr.
Pos 6
Pam Grondin
(Unopposed)
School Tax
44.0 Mills
The total rate proposed above Includes the
uniform rate of 25.0 mills (the Statewide
Uniform Rate-) to be collected on all taxable
property in the State and remitted to the
State Treasurer pursuant to Amendment No.
74 to the Arkansas Constitution to be used
solely for maintenance and operation of
schools In the State. As provided In
Amendment No. 74, the Statewide Uniform
Rate replaces a portion of the existing rate of
tax levied by this school District and
available for maintenance and operation of
the schools in this District. The total
proposed school tax levy of 44.0 mills
Includes 19.3 mills for general maintenance
and operation, 1.0 mill for current
expenditures/dedicated maintenance and
operation expenditures dedicated
specifically for the purposes of purchasing
school buses, purchasing furniture and
equipment, purchasing computer software
and renovatlnn and rena'rin.. .. tInn
continuing levy pledged for the retirement of
existing bonded indebtedness. The 23.7 debt
service mills are allocated as follows; 3.0
mills Is a continuing levy dedicated
exclusively to the retirement of the District's
Bonds dated November 1, 1997 and May 1,
1998, and 20.7 mills Is a continuing levy
pledged for the retirement of all other
existing bonded Indebtness. The surplus
revenues produced by the 20.7 debt service
mills may be used by the District for other
school purposes.
If the proposed school tax levy Is approved
by the electors, then the total school tax rate
shall be 44.0 mills (this being the effect of
such approval not withstanding the results
of the litigation referred to below). II the
proposed school tax levy is not approved by
the electors, then the total school tax rate
shall be a lower rate determined in
accordance with pending litigation in the
Circuit Court of Washington County,
Arkansas (the 'Court') involving the rollback
provisions of Amendment No. 59 to the
Arkansas Constitution, In which the Court
has ruled that the rollback provisions of
Amendment No.59 have been triggered (the
'Rollback Millage Rate'). The total proposed
tax levy of 44.0 mills represents an Increase
in total mills equal to the difference between
the proposed levy of the 44.0 mills and the
lower Rollback Millage Rate.
L_) FORTAX
o AGAINST TAX
I.
Amended Higiy 71 East Square Redevelopment Dist*No. I
Parcel ID
Tax District
Type
765-01638-000
011
CI
765-01639-000
011
CI
765-01640-000
011
RI
765-01641-000
011
CV
765-01642-000
011
CM
765-01643-000
011
CI
765-01644-000
011
Cl
765-01645-000
011
ET
765-01646-000
011
Cl
765-01647-000
011
Cl
765-01648-000
011
EX
765-01649-000
011
EX
765-01650-000
011
CI
765-01651-000
011
CI
765-01652-000
011
CV
765-01653-000
011
CM
765-01654-000
011
Cl
765-01655-000
011
CI
765-01656-000
011
Cl
765-01657-000
011
CI
765-01658-000
011
Cl
765-01659-000
011
CI
765-01660-000
011
CI
765-01661-000
011
CI
765-01663-000
011
CM
765-01663-000
011
CM
765-01664-000
011
Cl
765-01664-000
011
Cl
765-01665-000
011
CI
765-01665-000
011
CI
765-01666-000
011
CI
765-01666-001
011
CB
765-01667-000
011
CV
765-01668-000
011
CM
765-01669-000
011
Cl
765-01670-000
011
RI
765-01671-000
011
CI
765-01672-000
011
CV
765-01673-000
011
RI
765-01674-000
011
CR
765-01675-000
011
RI
765-01676-000
011
CI
765-01677-000
011
CV
765-01678-000
011
RI
765-01679-000
011
CV
765-01680-000
011
CI
765-01681-000
011
CV
765-01682-000
011
RI
765-01683-000
011
CI
765-01684-000
011
CI
765-01685-000
011
Cl
765-01686-000
011
CV
765-01687-000
011
CV
765-01688-000
011
CI
765-01690-000
011
CV
765-01691-000
011
RI
765-01692-000
011
RI
765-01693-000
011
RI
765-01694-000
011
RI
765-01695-000
011
CI
765-01696-000
011
RI
Total ADoraised
136,600
125,800
141,850
43,700
64,100
696,850
1,358,600
0
210,950
275,950
0
0
379,000
576,450
86,000
186,850
995,300
249,300
194,000
230,400
170,100
202,350
124,050
210,900
80,150
80,150
130,200
130,200
128,450
128,450
251,450
29,300
130,000
168,750
338,850
165,250
114,100
27,200
131,500
155,050
89,450
74,900
160,000
85,950
80,000
182,000
180,000
158,650
138,800
296,550
254,200
116,150
21,100
337,950
58,000
112,250
157,050
122,450
87,150
476,400
134,650
Total Assessed
26,488
20,020
22,719
6,435
9,724
125,070
182,559
0
35,905
49,207
0
0
71,258
98,927
16,819
25,926
148,334
42,743
32,895
30,778
30,602
32,340
16,701
38,988
10,687
10,687
10,802
10,802
19,734
19,734
27,199
5,860
25,080
24,138
52,124
27,367
18,690
4,400
18,682
27,311
10,090
7,794
11,440
14,459
10,450
30,007
29,700
24,151
25,333
27,957
49,477
7,951
1,444
44,200
6,163
17,760
27,317
14,813
13,900
69,155
15,044
1/29/2005
Parcel ID
T istrict
Type
765-01697-000
11
RI
765-01698-000
011
RI
765-01699-000
011
RI
765-01700-000
011
CR
765-01701-000
011
RI
765-01702-000
011
CR
765-01703-000
011
CM
765-01704-000
011
CR
765-01705-000
011
CI
765-01706-000
011
CI
765-01707-000
011
CI
765-01708-000
011
CM
765-01709-000
011
CI
765-01710-000
011
CT
765-01711-000
011
CV
765-01712-000
011
RI
765-01713-000
011
EX
765-01714-000
011
RI
765-01715-000
011
RI
765-01716-000
011
EX
765-01717-000
011
CR
765-01718-000
011
RI
765-01719-000
011
RI
765-01721-000
011
RI
765-01726-000
011
EX
765-01733-000
011
EX
765-01736-000
011
Cl
765-01739-000
011
EX
765-01740-000
011
EX
765-01741-000
011
CI
765-01742-000
011
EX
765-01743-000
011
CI
765-01743-002
011
EX
765-01743-003
011
EX
765-01744-000
011
ET
765-01745-000
011
PS
765-01745-001
011
EX
765-01745-002
011
EX
765-01746-000
011
EX
765-01747-000
011
CR
765-01748-000
011
RI
765-01749-000
011
RI
765-01750-000
011
ET
765-01751-000
011
ET
765-01752-000
011
ET
765-01753-000
011
EX
765-01754-000
011
RI
765-01755-000
011
CI
765-01756-000
011
CR
765-01757-000
011
CR
765-01758-000
011
RI
765-01759-000
011
RI
765-01760-000
011
CI
765-01761-000
011
CR
765-01762-000
011
CI
765-01763-000
011
RI
765-01764-000
011
CI
765-01765-000
011
Cl
765-01766-000
011
RI
765-01767-000
011
CR
765-01768-000
011
RI
765-01769-000
011
RV
765-01770-000
011
RI
765-01771-000
011
RI
Total Appraised
65,850
57,050
86,650
102,400
76,950
287,950
90,150
239,500
207,750
458,650
634,200
71,800
270,550
69,000
50,400
78,800
0
92,550
163,750
0
134,600
56,250
199,550
169,450
0
0
805,300
0
0
504,900
0
1,356,950
0
0
0
0
0
0
0
213,300
155,950
87,700
0
0
0
0
133,500
146,000
351,850
95,600
128,400
87,150
93,350
197,600
179,650
116,100
153,700
151,800
259,400
269,800
107,700
20,000
90,650
74,650
Total Assessed
10,053
7,402
12,740
12,601
12,572
52,426
11,341
36,594
26,984
74,419
92,444
12,177
24,574
7,445
8,129
9,621
0
13,566
20,203
0
16,130
8,850
31,021
28,940
0
0
127,523
0
0
55,567
0
231,535
0
0
0
0
0
0
0
38,223
16,052
16,403
0
0
0
0
20,861
23,724
29,284
13,327
19,900
15,530
12,999
39,520
24,123
14,629
28,754
27,092
47,498
48,671
15,101
2,816
8,990
10,167
1/29/2005
Parcel ID
T istrict
Type
765-01772-000
11
CR
765-01773-000
011
RI
765-01774-000
011
CI
765-01774-001
011
CM
765-01775-000
011
CI
765-01776-000
011
RI
765-01777-000
011
CV
765-01777-001
011
RI
765-01778-000
011
CR
765-01779-000
011
CI
765-01780-000
011
EX
765-01781-000
011
CI
765-01782-000
011
CI
765-01783-000
011
CI
765-01784-000
011
Cl
765-01785-000
011
CM
765-01786-000
011
CI
765-01787-000
011
RI
765-01788-000
011
CI
765-01789-000
011
CI
765-01790-000
011
RI
765-01791-000
011
RI
765-01792-000
011
CI
765-01793-000
011
RI
765-01794-000
011
ET
765-01795-000
011
ET
765-01796-000
011
CI
765-01797-000
011
CI
765-01798-000
011
CI
765-01799-000
011
CI
765-01800-000
011
ET
765-01801-000
011
ET
765-01802-000
011
CI
765-01803-000
011
CI
765-01804-000
011
CI
765-01806-000
011
CI
765-01807-000
011
PS
765-01808-000
011
CI
765-01809-000
011
PS
765-01810-000
011
CI
765-01811-000
011
CI
765-01812-000
011
CI
765-01813-000
011
CM
765-01814-000
011
CI
765-01815-000
011
CM
765-01816-000
011
CI
765-01817-000
011
ET
765-01820-000
011
CI
765-01821-000
011
CI
765-01827-000
011
CI
765-01828-000
011
CI
765-01829-000
011
CI
765-01830-000
011
CI
765-01831-000
011
CI
765-01832-000
011
CI
765-01832-001
011
CI
765-01833-000
011
CI
765-01834-000
011
CI
765-01835-000
011
CV
765-01835-001
011
CB
765-01836-000
011
CI
765-01837-000
011
CV
765-01838-000
011
CI
765-01839-000
011
CI
Total Appraised
174,550
71,300
671,000
63,500
139,050
192300
18,150
90,900
286,400
100,050
0
282,450
268,800
188,650
70,900
61,450
284,600
136,300
223,100
263,050
68,200
90,200
92,950
73,000
0
0
144,100
146,300
168,950
193,000
0
0
226,500
184,200
339,000
173,850
5,211, 350
168,350
144,750
1,077000
1,296,200
290,300
47,850
380,200
55,600
409,400
0
6,400,000
6,190,100
171,100
199,850
141,800
580,000
240,300
169,100
100,100
163,700
405,400
396,900
1,953,100
4,000,000
64,850
455,400
982,300
otal Assessed
32,742
9,796
134,200
12,111
27,137
22,618
2,189
14,257
41,598
17,646
0
44,165
45,133
31,812
12,999
8,514
23,995
17,604
24,004
34,738
9,295
9,020
15,656
10,704
0
0
21,912
19,005
25,267
31,257
0
0
37,180
26,312
48,532
33,297
1,042,270
28,882
28,950
152,757
206,492
58,060
6,710
73,871
10,978
80,993
0
1,280,000
1,086,591
32,990
38,338
26,712
67,696
44,573
31,746
18,633
22,537
64,106
75,533
299,207
770,000
11,231
84,885
122,694
1/29/2005
Parcel ID
Ta trict
Type
765-01840-000
1
CM
765-01841-000
011
CI
765-01842-000
011
EX
765-01843-000
011
CI
765-01844-000
011
CI
765-01844-001
011
Cl
765-01845-000
011
Cl
765-01846-000
011
Cl
765-01847-000
011
Cl
765-01848-000
011
Cl
765-01849-000
011
ET
765-01850-000
011
ET
765-01851-000
011
ET
765-01852-000
011
ET
765-01853-000
011
EX
765-01854-000
011
ET
765-01855-000
011
ET
765-01856-000
011
Cl
765-01857-000
011
CI
765-01858-000
011
RI
765-01859-000
011
CI
765-01860-000
011
RI
765-01861-000
011
RI
765-01862-000
011
CM
765-01863-000
011
RI
765-01864-000
011
CM
765-01865-000
011
CI
765-01866-000
011
CI
765-01867-000
011
CI
765-01868-000
011
RI
765-01869-000
011
ET
765-01870-000
011
ET
765-01871-000
011
ET
765-01872-000
011
ET
765-01873-000
011
EX
765-01874-000
011
CI
765-01875-000
011
CI
765-01876-000
011
RI
765-01877-000
011
RI
765-01878-000
011
CI
765-01879-000
011
EX
765-01880-000
011
RI
765-01881-000
011
RI
765-01882-000
011
CR
765-01882-001
011
CI
765-01883-000
011
CR
765-01884-000
011
RI
765-01885-000
011
RV
765-01886-000
011
CI
765-01887-000
011
CI
765-01887-002
011
EX
765-01888-000
011
RI
765-01889-000
011
RI
765-01890-000
011
RI
765-01891-000
011
RI
765-01892-000
011
RI
765-01893-000
011
RI
765-01894-000
011
RI
765-01895-000
011
CM
765-01896-000
011
RI
765-01897-000
011
RI
765-01898-000
011
RI
765-01899-000
011
RI
765-01900-000
011
CV
Total Appraised
89,000
68,150
0
85,250
67,100
67,000
275,950
722,150
702,950
2,500,000
0
0
0
0
0
0
0
412,450
161,850
187,750
118,200
73,100
64,400
76,550
171,850
66,550
482,350
290,200
123,500
154,700
0
0
0
0
0
46,050
41,650
78,550
437,050
106,850
0
112,000
163,450
276,150
445,900
231,000
75,350
500
75,700
88,050
0
54,950
62,650
47,050
86,500
107,000
100,500
86,000
135,200
100,950
137,550
137,350
79,750
58,400
tal Assessed
17,270
12,112
0
14,143
11,168
11,140
52,573
127,470
140,590
461,627
0
0
0
0
0
0
0
68,990
26,727
27,955
15,378
12,197
6,030
12,325
25,333
11,484
49,325
49,940
12,727
23,924
0
0
0
0
0
7,865
7,021
13,695
85,102
19,118
0
16,103
17,139
45,624
89,180
46,200
12,735
100
9,482
7,894
9,324
8,451
7,536
14,850
17,586
13,002
15,389
12,598
15,766
18,690
17,593
7,899
3,080
1/29/2005
• Parcel ID
Ta trict
Type
765-01901-000
1
CI
765-01902-000
011
RI
765-01903-000
011
CI
765-01904-000
011
RI
765-01905-000
011
CR
765-01906-000
011
CR
765-01907-000
011
RI
765-01908-000
011
RI
765-01909-000
011
EX
765-01910-000
011
RI
765-01911-000
011
EX
765-01912-000
011
RI
765-01913-000
011
CI
765-01914-000
011
ET
765-01915-000
011
CI
765-01916-000
011
CI
765-01917-000
011
CI
765-01918-000
011
CI
765-01919-000
011
CI
765-01920-000
011
CI
765-01924-000
011
CI
765-01925-000
011
CI
765-01926-000
011
EX
765-01927-000
011
CI
765-01928-000
011
EX
765-01929-000
011
ET
765-01930-000
011
CI
765-01932-000
011
CI
765-01933-000
011
CI
765-01935-000
011
CI
765-01938-000
011
Cl
765-01939-000
011
CI
765-01940-000
011
CI
765-01940-001
011
CI
765-01941-000
011
EX
765-01942-000
011
CI
765-01943-000
011
CI
765-01944-000
011
CI
765-01945-000
011
CI
765-01946-000
011
EX
765-01947-000
011
EX
765-01948-000
011
CI
765-01949-000
011
CI
765-01950-000
011
CI
765-01952-000
011
ET
765-01953-000
011
ET
765-01954-000
011
Cl
765-01955-000
011
RV
765-01956-000
011
RI
765-01958-000
011
EX
765-01959-000
011
EX
765-01960-000
011
EX
765-01961-000
011
EX
765-01962-000
011
EX
765-01963-000
011
EX
765-01964-000
011
EX
765-01965-000
011
EX
765-01966-000
011
CI
765-01967-000
011
Cl
765-01968-000
011
CV
765-01969-000
011
CV
765-01970-000
011
CV
765-01971-000
011
CV
765-01972-000
011
Cl
Total Appraised
55,450
65,450
209,500
436,350
246,900
228,650
174,150
125,650
0
55,350
0
52,750
112,650
0
95,400
362,450
435,500
1,975,950
244,900
238,800
236,850
481,400
0
717700
0
0
389,750
527,600
432,400
4,380,500
167,550
334,850
668,400
230,800
0
341,350
470,250
109,650
175,450
0
0
332,700
239,150
260,950
0
0
151,150
22,500
72,550
0
0
0
0
0
0
0
0
396,000
98,200
69,000
34,500
34,500
23,000
1,294,050
tat Assessed
6,907
9,162
28,929
55,159
27,478
22,765
31,856
17,576
0
7,136
0
10,550
12,627
0
17,578
37,752
60,380
377,706
34,120
45,485
47,370
79,671
0
129,031
0
0
77,950
59,068
72,758
849,736
30,488
62,062
119,577
45,485
0
68,266
90,167
14,715
23,695
0
0
61,576
44,959
52,190
0
0
26,609
3,168
12,913
0
0
0
0
0
0
0
0
79,200
10,496
13,365
6,688
6,688
4,455
130,545
1/29/2005
Parcel ID
Ta trict
Type
765-01975-000
011
EX
765-01976-000
011
ET
765-01977-000
011
ET
765-01978-000
011
ET
765-01979-000
011
ET
765-01980-000
011
ET
765-01981-000
011
ET
765-01982-000
011
ET
765-01983-000
011
ET
765-01984-000
011
ET
765-01985-000
011
ET
765-01985-001
011
CI
765-01986-000
011
EX
765-01987-000
011
EX
765-01988-000
011
EX
765-01989-000
011
EX
765-01990-000
011
EX
765-01991-000
011
CI
765-01992-000
011
ET
765-01993-000
011
ET
765-01994-000
011
CI
765-01995-000
011
CI
765-01996-000
011
EX
765-01997-000
011
EX
765-01998-000
011
EX
765-01999-000
011
CI
765-01999-001
011
CI
765-02000-000
011
CI
765-02001-000
011
CI
765-02002-000
011
RI
765-02003-000
011
CI
765-02004-000
011
CI
765-02005-000
011
CI
765-02006-000
011
RI
765-02007-000
011
CR
765-02008-000
011
RI
765-02010-000
011
CT
765-02020-000
011
RI
765-02021-000
011
EX
765-02022-000
011
RI
765-02023-000
011
RI
765-02024-000
011
RI
765-02025-000
011
RI
765-02026-000
011
EX
765-02027-000
011
RI
765-02028-000
011
RI
765-02029-000
011
RI
765-02030-000
011
EX
765-02031-000
011
RI
765-02032-000
011
RI
765-02033-000
011
EX
765-02034-000
011
RM
765-02035-000
011
RV
765-02036-000
011
EX
765-02037-000
011
EX
765-02038-000
011
EX
765-02039-000
011
EX
765-02040-000
011
EX
765-02041-000
011
EX
765-02041-000
011
EX
765-02042-000
011
EX
765-02043-000
011
CI
765-02044-000
011
RI
765-02045-000
011
RI
Total Appraised
0
0
0
0
0
0
0
0
0
0
0
1,219,550
0
0
0
0
0
392,300
0
0
294,300
218,100
0
0
0
208,650
141,000
340,350
285,650
471,650
341,350
334,350
324,800
72,500
185,600
67,700
146,050
98,700
0
49,400
79,850
65,550
80,500
0
46,550
46,600
96,650
0
82,150
44,000
0
22,300
50,500
0
0
0
0
0
0
0
0
222,950
91,800
78,550
tat Assessed
0
0
0
0
0
0
0
0
0
0
0
225,577
0
0
0
0
0
69,398
0
0
52,613
29,835
0
0
0
41,173
20,933
47,018
40,865
78,977
56,049
39'344
60,665
7,305
37,120
10,978
26,950
10,915
0
4,730
10,608
7,635
15,149
0
7,908
7,207
15,133
0
8,735
8,393
0
4,460
8,666
0
0
0
0
0
0
0
0
30,901
10,011
9,515
1/29/2005
Parcel ID
Ta strict
Type
765-02046-000
VT 1
CI
765-02047-000
011
CR
765-02048-000
011
RI
765-02049-000
011
RI
765-02050-000
011
RI
765-02051-000
011
RI
765-02052-000
011
RI
765-02053-000
011
CI
765-02054-000
011
RI
765-02055-000
011
RI
765-02056-000
011
RI
765-02057-000
011
RI
765-02058-000
011
RI
765-02059-000
011
RI
765-02060-000
011
RI
765-02061-000
011
RI
765-02062-000
011
RI
765-02063-000
011
RI
765-02064-000
011
CI
765-02064-001
011
RI
765-02065-000
011
RI
765-02066-000
011
RI
765-02067-000
011
RI
765-02068-000
011
RI
765-02069-000
011
CI
765-02070-000
011
CR
765-02071-000
011
PS
765-02072-000
011
EX
765-02073-000
011
EX
765-02074-000
011
RI
765-02075-000
011
RV
765-02076-000
011
RI
765-02077-000
011
RI
765-02078-000
011
RI
765-02080-000
011
RI
765-02081-000
011
RI
765-02082-000
011
CI
765-02083-000
011
RI
765-02084-000
011
RI
765-02085-000
011
RI
765-02086-000
011
CV
765-02087-000
011
CV
765-02088-000
011
CI
765-02088-001
011
CI
765-02092-000
011
RV
765-02093-000
011
RV
765-02093-001
011
RI
765-02094-000
011
CI
765-02095-000
011
RV
765-02096-000
011
RI
765-02097-000
011
CV
765-02098-000
011
CV
765-02099-000
011
CV
765-02100-000
011
RI
765-02102-000
011
RV
765-02103-000
011
RV
765-02104-000
011
EX
765-02106-000
011
RI
765-02108-000
011
CI
765-02112-000
011
RI
765-02113-000
011
RV
765-02114-000
011
RV
765-02115-000
011
RM
765-02116-000
011
CI
Total Appraised
160,650
216,050
111,700
68,600
66,250
86,150
77,350
299,400
79,450
75,350
65,650
50,850
65,950
52,200
54,000
76,100
104,900
68,100
183,050
86,150
112,900
111,300
58,100
56,050
160,350
359,500
1,750
0
0
50,900
22,500
66,250
132,800
61,650
35,650
47,950
153,200
51,800
35,850
57,050
26,500
43,700
160,250
34,950
100
500
61,100
79,250
17,500
51,200
23,500
80,050
52,150
46,000
15,000
17500
0
49,650
44,850
58,100
20,000
6,250
19,350
231,950
otal Assessed
25,464
34,939
17,606
7,401
7,052
10,925
8,827
42,056
7,624
6,100
7,317
6,635
8,041
6,364
6,635
7,362
13,033
9,462
26,933
7,744
11,182
9,560
5,952
5,630
26,169
52,773
350
0
0
5,808
2,860
10,427
16,352
7,765
6,303
7,222
24,915
7,444
5,477
8,065
3,795
5,754
21,607
4,791
20
100
6,901
13,607
2,464
9,812
4,312
14,674
9,559
7,951
2,059
2,402
0
7,072
6,787
7,579
2,231
1,250
3,069
41,599
1/29/2005
Parcel ID
Ta trict
Type
765-02118-000
fll
RV
765-02119-000
011
RI
765-02120-000
011
RI
765-02121-000
011
RI
765-02123-000
011
RV
765-02124-000
011
CI
765-02127-000
011
RV
765-02128-000
011
RI
765-02129-000
011
RV
765-02130-000
011
CI
765-02133-000
011
CV
765-02134-000
011
CI
765-02135-000
011
RI
765-02137-000
011
RI
765-02138-000
011
CM
765-02139-000
011
RI
765-02140-000
011
RI
765-02980-000
011
RI
765-02981-000
011
CI
765-02982-000
011
RI
765-02983-000
011
RM
765-02984-000
011
RI
765-02985-000
011
RI
765-02986-000
011
RI
765-02987-000
011
RI
765-02988-000
011
RI
765-02989-000
011
RI
765-02990-000
011
RM
765-02991-000
011
RI
765-04310-000
011
CI
765-04312-000
011
RI
765-04313-000
011
RI
765-04314-000
011
RI
765-04315-000
011
CI
765-04316-000
011
RI
765-04317-000
011
RI
765-04318-000
011
CI
765-04319-000
011
CI
765-04320-000
011
CI
765-04321-000
011
CI
765-04322-000
011
CM
765-04323-000
011
CM
765-04324-000
011
CM
765-04325-000
011
CM
765-04326-000
011
ET
765-04327-000
011
RV
765-04328-000
011
ET
765-04329-000
011
ET
765-04330-000
011
ET
765-04331-000
011
ET
765-04332-000
011
ET
765-04333-000
011
ET
765-04334-000
011
ET
765-04334-100
011
ET
765-04335-000
011
ET
765-04336-000
011
ET
765-04337-000
011
RI
765-04338-000
011
RV
765-04339-000
011
RI
765-04340-000
011
RI
765-04341-000
011
RI
765-04342-000
011
RI
765-04343-000
011
RI
765-04344-000
011
CI
Total Appraised
10,000
68,250
54,000
67,950
26,250
98,900
31,250
66,850
33,750
324,750
34,250
131,300
112,800
66,100
18,550
110,750
83,600
44,050
73,250
43,450
10,500
22,250
36,250
37,500
33,850
72,950
26,250
10,300
23,600
98,250
165,500
157,400
61,100
173,900
167,650
149,050
240,250
113,200
499,050
342,150
97,850
40,350
52,200
58,300
0
23,400
0
0
0
0
0
0
0
0
0
0
152,350
20,650
99,700
93,650
133500
186,100
70,200
53,750
tal Assessed
1,408
7,424
6,499
10,013
5,250
15,473
2,603
8,309
4,752
64,146
5,445
18,733
16,574
6,195
3,663
8,900
9,708
6,119
12,474
6,363
1,485
2,922
6,450
4,936
5,048
10,221
4,147
1,496
4,276
19,437
23,568
18,559
8,910
34,780
24,518
21,411
46,689
22,418
60,117
65,670
16,632
6,765
6,428
7,309
0
2,860
0
0
0
0
0
0
0
0
0
0
19,625
2,640
14,300
10,642
20,270
22,803
14,040
10,750
1/29/2005
Parcel ID
T 'istrict
Type
765-04345-000
11
RI
765-04346-000
011
ET
765-04347-000
011
RI
765-04348-000
011
RI
765-04349-000
011
RI
765-04350-000
011
CI
765-04350-001
011
Cl
765-04351-000
011
ET
765-04352-000
011
ET
765-04353-000
011
ET
765-04354-000
011
ET
765-04355-000
011
RI
765-04356-000
011
RI
765-04357-000
011
CR
765-04357-100
011
EX
765-04358-000
011
CI
765-04359-000
011
CI
765-04360-000
011
CI
765-04361-000
011
CI
765-04362-000
011
CI
765-04362-001
011
EX
765-04363-000
011
CM
765-04363-001
011
EX
765-04364-000
011
CI
765-04365-000
011
CI
765-04366-000
011
CI
765-04367-000
011
CI
765-04368-000
011
CI
765-04369-000
011
CI
765-04370-000
011
CI
765-04371-000
011
CI
765-04372-000
011
CI
765-04373-000
011
CI
765-04374-000
011
CM
765-04375-000
011
CI
765-04376-000
011
CI
765-04376-000
011
CI
765-04378-000
011
VP
765-04378-001
011
CI
765-04379-000
011
CI
765-04380-000
011
ET
765-04381-000
011
ET
765-04382-000
011
ET
765-04384-000
011
ET
765-04385-000
011
ET
765-04388-000
011
ET
765-04389-000
011
ET
765-04390-000
011
ET
765-04391-000
011
Cl
765-04392-000
011
RI
765-04393-000
011
RI
765-04394-000
011
RI
765-04395-000
011
RI
765-04396-000
011
RI
765-04397-000
011
CV
765-04398-000
011
CI
765-04399-000
011
CI
765-04400-000
011
CI
765-04401-000
011
CI
765-04402-000
011
CI
765-04403-000
011
RI
765-04404-000
011
RI
765-04405-000
011
RI
765-04406-000
011
CR
Total Appraised
30,150
0
58,300
68,550
78,250
301,850
223,400
0
0
0
0
55,250
56,650
119,750
0
54,000
81,350
70,350
1,072,400
393,700
0
168,900
0
1225,100
265,350
85,550
110,200
97,650
242,500
257,850
134,500
152,400
247,550
106,450
830,250
255,000
255,000
0
280,300
510,150
0
0
0
0
0
0
0
0
341,500
58,400
57,650
114,450
83,800
97,550
54,000
926,000
547,650
167,600
304,650
210,850
78,100
41,400
85,550
84,500
Total Assessed
W 4,114
0
10,410
10,054
11,682
50,736
39,556
0
0
0
0
7,465
7,679
14,915
0
10,800
14,377
12,033
185,001
64,625
0
5,420
0
177,117
42,400
11,703
9,626
11,005
39,039
26,183
18,805
20,878
22,542
16,145
105,770
37,336
37,336
0
43,618
57,537
0
0
0
0
0
0
0
0
68,300
8,525
9,648
14,297
10,534
15,021
9,900
185,200
93,093
20,578
26,984
19,133
14,626
8,280
12,793
14,784
1/29/2005
Parcel ID
T istrict
Type
765-04407-000
11
RI
765-04408-000
011
RI
765-04409-000
011
CR
765-04410-000
011
RI
765-04411-000
011
RI
765-04412-000
011
RI
765-04413-000
011
RI
765-04414-000
011
RI
765-04415-000
011
RI
765-04416-000
011
RI
765-04417-000
011
RI
765-04418-000
011
RI
765-04419-000
011
RI
765-04421-000
011
RI
765-04424-000
011
RM
765-04427-000
011
RI
765-04428-000
011
RI
765-04430-000
011
RI
765-04431-000
011
CV
765-04432-000
011
RI
765-04433-000
011
CM
765-04434-000
011
CI
765-04435-000
011
EX
765-04436-000
011
EX
765-04437-000
011
EX
765-04438-000
011
RI
765-04439-000
011
EX
765-04440-000
011
EX
765-04441-000
011
EX
765-04442-000
011
CM
765-04443-000
011
CI
765-04444-000
011
EX
765-04445-000
011
EX
765-04446-000
011
EX
765-04447-000
011
EX
765-04448-000
011
EX
765-04449-000
011
CI
765-04450-000
011
CI
765-04451-000
011
EX
765-04452-000
011
CI
765-04453-000
011
EX
765-04454-000
011
EX
765-04455-000
011
EX
765-04456-000
011
EX
765-04457-000
011
EX
765-04458-000
011
EX
765-04459-000
011
EX
765-04461-000
011
EX
765-04462-000
011
EX
765-04463-000
011
EX
765-04464-000
011
EX
765-04465-000
011
EX
765-04466-000
011
EX
765-04467-000
011
EX
765-04513-000
011
RI
765-04514-000
011
RI
765-04515-000
011
RI
765-04516-000
011
RI
765-04517-000
011
CI
765-04518-000
011
CV
765-05441-000
011
CI
765-05441-001
011
EX
765-05442-000
011
RI
765-05442-001
011
RV
Total Appraised
43,250
59,100
145,100
88,300
69,150
119,400
86,650
75,350
120,200
129,400
112,100
129,100
99,700
194,050
25,950
52,600
53,750
54,150
100,000
388,550
45,100
643,250
0
0
0
143,700
0
0
0
207,100
2,092,250
0
0
0
0
0
134,350
334,600
0
261,200
0
0
0
0
0
0
0
0
0
0
0
0
0
0
96,900
88,150
99,250
97,050
782,150
165,250
1,300,650
0
69,500
26,400
Total Assessed
vw 8,650
9,109
18,620
10,455
11,087
23,880
9,298
15,070
14,012
16,881
16,228
13,490
9,596
28,820
5,190
5,639
6,364
6,964
14,300
39,674
9,020
104,621
0
0
0
22,583
0
0
0
41,420
274,283
0
0
0
0
0
26,345
64,162
0
44,602
0
0
0
0
0
0
0
0
0
0
0
0
0
0
14,144
15,279
17,003
14,359
136,798
12,584
159,654
0
13,288
4,543
1/29/2005
10
Parcel ID
T istrict
Type
Total Appraised
Total Assessed
765-05443-000
11
RV
14,400
2,475
765-05444-000
011
RI
56,700
10,780
765-05445-000
011
RI
55,750
10,582
765-05446-000
011
EX
0
0
765-05447-000
011
CV
273,950
23,298
765-05448-000
011
CI
230,650
46,130
765-05448-001
011
EX
0
0
765-05449-000
011
CI
77,200
12,864
765-05450-000
011
EX
0
0
765-05451-000
011
CR
107,300
18,336
765-05452-000
011
RM
22,500
3,900
765-05453-000
011
RI
41,150
7,689
765-05454-000
011
CR
76,250
8,965
765-05455-000
011
EX
0
0
765-05456-000
011
CV
5,800
825
765-05457-000
011
EX
0
0
765-05458-000
011
CI
73,600
12,758
765-05459-000
011
EX
0
0
765-05460-000
011
EX
0
0
765-05461-000
011
EX
0
0
765-05462-000
011
RI
24,300
4,179
765-05462-001
011
CR
87,850
16,643
765-05463-000
011
RV
16,000
3,200
765-05465-000
011
CI
107,850
17,827
765-05466-000
011
EX
0
0
765-05467-000
011
EX
0
0
765-05468-000
011
CI
250,850
46,884
765-05469-000
011
RI
51,400
9,285
765-05470-000
011
RI
46,900
7,570
765-05471-000
011
RI
59,600
10,982
765-05472-000
011
RI
135,150
20,678
765-05473-000
011
RI
42,200
5,020
765-05474-000
011
RI
37,700
6,678
765-05475-000
011
RI
55,850
8,561
765-05476-000
011
RI
55,300
7,993
765-05477-000
011
RI
52,700
9,744
765-05478-000
011
RI
44,250
7,036
765-05479-000
011
CI
205,000
31,163
765-05481-000
011
CM
16,350
2,563
765-05482-000
011
RI
67,750
10,854
765-05483-000
011
RI
43,350
8,173
765-05484-000
011
RI
51,050
8,723
765-05485-000
011
RI
31,450
5,786
765-05486-000
011
RI
62,650
12,497
765-05487-000
011
CI
93,500
15,928
765-05492-001
011
EX
0
765-05498-000
011
EX
0
0
765-05499-000
011
EX
0
0
765-05500-000
011
EX
0
0
765-05501-000
011
CI
110,700
14,542
765-05501-001
011
EX
0
0
765-05502-000
011
CV
42,550
4,455
765-05504-000
011
ET
0
0
765-05505-000
011
EX
0
0
765-05506-001
011
EX
0
0
765-05506-002
011
EX
0
0
765-05507-000
011
IV
45,750
8,852
765-05508-000
011
CI
28,700
4,994
765-05509-000
011
II
418,350
80,553
765-05510-000
011
CI
103,350
16,541
765-05511-000
011
CI
83,300
16,613
765-05520-000
011
CI
74,500
11,561
765-05520-000
011
CI
74,500
11,561
765-05521-000
011
CI
120,050
19,524
1/29/2005
11
• Parcel ID
Ta trict
Type
765-05521-001
Dli
EX
765-05522-000
011
IV
765-05523-000
011
II
765-05523-001
011
EX
765-05524-000
011
CI
765-05524-001
011
EX
765-05525-000
011
EX
765-05525-001
011
CV
765-05526-000
011
RI
765-05527-000
011
RI
765-05528-000
011
CI
765-05529-000
011
RI
765-05530-000
011
RI
765-05531-000
011
CI
765-05532-000
011
RI
765-05533-000
011
CI
765-05534-000
011
CV
765-05535-000
011
RI
765-05536-000
011
RV
765-05537-000
011
RV
765-05538-000
011
RI
765-05539-000
011
RV
765-05539-001
011
EX
765-05540-000
011
II
765-05541-000
011
CI
765-05541-001
011
EX
765-05572-010
011
CI
765-05573-000
011
ET
765-05574-000
011
ET
765-05575-000
011
ET
765-05576-000
011
ET
765-05577-000
011
ET
765-05578-000
011
RI
765-05579-000
011
ET
765-05580-000
011
ET
765-05581-000
011
ET
765-05582-000
011
ET
765-05583-000
011
ET
765-05584-000
011
RI
765-05585-000
011
ET
765-05586-000
011
ET
765-05587-000
011
ET
765-05588-000
011
ET
765-05589-000
011
ET
765-06024-000
011
RI
765-06025-000
011
CV
765-06026-000
011
RI
765-06027-000
011
CI
765-06028-000
011
RI
765-06029-000
011
RI
765-06030-000
011
RI
765-06031-000
011
RI
765-06032-000
011
RI
765-06033-000
011
RI
765-06034-000
011
RM
765-06035-000
011
RI
765-06036-000
011
CI
765-06037-000
011
EX
765-06038-000
011
EX
765-06039-000
011
RI
765-06040-000
011
CI
765-06380-000
011
RI
765-06381-000
011
RV
765-06382-000
011
RI
Total ADoraised
0
36,550
366850
0
40,100
0
0
17,800
34,150
37,050
14550
54,450
31,700
69,850
42,150
253,600
15,000
37,200
15,200
25,600
42,100
6,400
0
72,850
42,950
0
338,350
0
0
0
0
0
59,850
0
0
0
0
0
60,600
0
0
0
0
0
124,450
52,850
218,500
748,650
80,800
64,500
254,000
271,650
347,150
92,700
24,600
125,200
185,400
0
0
329,900
291,100
62,100
12,600
49,850
tal Assessed
0
4,378
73,370
0
5764
0
0
2,640
6,314
6875
2,910
9938
5,660
13,970
6,291
45,912
2,233
6,897
2,618
2,860
7,493
1,100
0
13,274
5,205
0
58,344
0
0
0
0
0
9,416
0
0
0
0
0
9,395
0
0
0
0
0
22,825
9,009
41,635
147,180
12,999
11,968
48,710
51,939
54,271
17,910
3,818
23,892
28,328
0
0
41,400
49,478
11,571
1,683
9,515
1/29/2005
12
Parcel ID
T istrict
Type
765-07060-000
011
CI
765-07061-000
011
RI
765-07062-000
011
RI
765-07063-000
011
RI
765-07064-000
011
RV
765-07065-000
011
RI
765-07066-000
011
RI
765-07067-000
011
RV
765-07068-000
011
RV
765-07069-000
011
RI
765-07070-000
011
RI
765-07087-000
011
CI
765-07088-000
011
CI
765-07089-000
011
RM
765-07090-000
011
RI
765-07091-000
011
RI
765-07092-000
011
RI
765-07093-000
011
RI
765-07094-000
011
RI
765-07095-000
011
RI
765-07096-000
011
RV
765-07097-000
011
RI
765-07098-000
011
RI
765-07099-000
011
RI
765-07100-000
011
RI
765-07123-000
011
RI
765-07124-000
011
RI
765-07125-000
011
CV
765-07126-000
011
EX
765-07128-000
011
RI
765-07129-000
011
RI
765-07130-000
011
RV
765-07131-000
011
RI
765-07969-000
011
RI
765-07972-000
011
RI
765-07973-000
011
CI
765-07975-000
011
CI
765-07976-000
011
CI
765-07978-000
011
CR
765-07979-000
011
CI
765-07980-000
011
CI
765-07984-000
011
RI
765-07987-000
011
CI
765-07988-000
011
EX
765-08077-000
011
CI
765-08078-000
011
PS
765-08082-000
011
CV
765-08083-000
011
CI
765-08084-000
011
CV
765-08088-000
011
CV
765-08089-000
011
EX
765-08239-000
011
RI
765-08240-000
011
RI
765-08241-000
011
RV
765-08242-000
011
RI
765-08243-000
011
RI
765-08245-000
011
EX
765-08247-000
011
EX
765-08248-000
011
CI
765-08249-000
011
RI
765-08249-001
011
CV
765-08250-000
011
RI
765-08539-000
011
RI
765-08540-000
011
RI
Total Aooraised
69,850
20,650
86,900
33,150
15,000
45,150
33,700
10,500
10,500
40,900
32,750
267,550
116,550
14,250
36,400
66,450
50,400
41000
57,450
29,500
100
41,800
37,450
49,500
57,700
72,450
50,500
10,500
0
13,250
59,000
18,750
56,500
107,250
110,350
187,850
308,200
100,350
205,000
246,350
163,250
111,250
1,007,700
0
2,059,200
30,400
92,450
525,300
77,050
16,900
0
54,850
60,100
8,750
64,000
82,900
0
0
189,500
106,300
18,900
55,000
691,000
635,000
Total Assessed
11,826
2,898
12,396
5,577
1,760
5,218
5,302
1,232
1,232
6,886
5,005
43,987
22,156
1,749
4,950
9,195
6,835
4,460
9,639
3,861
20
6,842
5,657
6,992
8,036
6,100
8,492
1,650
0
2,650
7,770
2,200
7,030
18,260
17,241
37,445
55,873
20,070
38,685
47,539
31,635
19,360
196,118
0
411,840
6080
10,824
92398
9,020
1,130
0
9,174
8,565
1,375
8,633
11568
0
0
37,900
13,388
2,970
5,941
80,600
78,741
1/29/2005 13
Parcel ID
Ta strict
Type
765-08541-000
11
RI
765-08542-000
011
RI
765-08543-000
011
RI
765-08544-000
011
RI
765-08545-000
011
RV
765-08546-000
011
RI
765-08547-000
011
RI
765-08548-000
011
RI
765-08549-000
011
RI
765-08550-000
011
RI
765-08551-000
011
RI
765-08552-000
011
RI
765-08553-000
011
RV
765-08554-000
011
RI
765-08555-000
011
RI
765-08556-000
011
RI
765-09759-000
011
EX
765-09760-000
011
EX
765-09761-000
011
EX
765-09762-000
011
EX
765-09763-000
011
CR
765-09764-000
011
RV
765-09765-000
011
RV
765-09766-000
011
PS
765-09767-000
011
EX
765-09768-000
011
EX
765-09769-000
011
EX
765-09770-000
011
EX
765-09914-000
011
CI
765-09915-000
011
CI
765-09917-000
011
CI
765-09918-000
011
ET
765-09919-000
011
EX
765-09920-000
011
CI
765-09921-000
011
RI
765-09922-000
011
RI
765-09923-000
011
RV
765-09924-000
011
RV
765-09925-000
011
EX
765-09926-000
011
EX
765-11664-000
011
RI
765-11723-000
011
EX
765-11724-000
011
EX
765-11724-001
011
EX
765-11731-000
011
EX
765-11731-001
011
CM
765-11731-010
011
EX
765-11917-000
011
RI
765-11918-000
011
RI
765-11919-000
011
CR
765-11920-000
011
RI
765-11921-000
011
RI
765-11922-000
011
RI
765-11923-000
011
RI
765-11924-000
011
RI
765-11925-000
011
RI
765-11926-000
011
RI
765-11927-000
011
RI
765-11928-000
011
RI
765-11929-000
011
RI
765-11930-000
011
RI
765-11931-000
011
RI
765-11932-000
011
RI
765-11933-000
011
RI
Total ADoraised
481,500
357,000
376,600
749,700
52,500
263,600
354,950
122,700
218,450
315,100
299,450
113,250
100,000
120,550
109,100
298,350
0
0
0
0
126,450
27,500
27,500
1,500
0
0
0
0
357,650
406,650
318,100
0
0
767,550
169,950
127,150
22,000
22,000
0
0
139,450
0
0
0
0
60,200
0
151,850
387,650
74,250
107,750
70,250
52,300
82,050
60,550
77,250
67,750
100,300
94,300
61,550
61,500
74,600
77,300
122,800
otal Assessed
60,091
44,459
54,926
93,626
3,432
28,432
37,040
14,443
32,604
36,124
36,261
11,101
5,577
13,542
12,037
34,172
0
0
0
0
25,290
3,300
3,300
300
0
0
0
0
54,726
59,000
51,022
0
0
99,843
30,308
24,588
3,300
3,300
0
0
14,041
0
0
0
0
10,353
0
20,455
77,530
12,935
19,763
9,650
8,505
16,410
10,362
11,579
11,364
16,491
17951
12,310
10,141
13,101
11,410
20,108
1/29/2005 14
• Parcel ID
Ta trict
Type
765-11934-000
Dli
RI
765-11935-000
011
RI
765-11936-000
011
RI
765-12671-000
011
ET
765-12672-000
011
CI
765-12673-000
011
CI
765-12674-000
011
RI
765-12675-000
011
CM
765-12676-000
011
RI
765-12681-000
011
ET
765-12682-000
011
ET
765-12684-000
011
EX
765-12686-000
011
CI
765-12687-000
011
RV
765-12688-000
011
RI
765-12689-000
011
EX
765-12689-001
011
RV
765-12691-000
011
EX
765-12709-000
011
ET
765-12710-001
011
CI
765-12710-002
011
CI
765-12710-003
011
CI
765-12710-004
011
CI
765-12710-005
011
CI
765-12710-006
011
CI
765-12710-007
011
Cl
765-12710-009
011
CI
765-12710-010
011
CI
765-12710-011
011
CI
765-12711-000
011
ET
765-12712-000
011
ET
765-12713-000
011
ET
765-12714-000
011
ET
765-12715-000
011
CI
765-12716-000
011
EX
765-12718-000
011
CV
765-12720-000
011
CV
765-12721-000
011
CV
765-12722-000
011
CM
765-12764-000
011
EX
765-12764-001
011
CI
765-12764-002
011
CI
765-12765-000
011
RV
765-12766-000
011
RV
765-12767-000
011
RV
765-12768-000
011
RV
765-12781-000
011
CR
765-12782-000
011
CI
765-12783-000
011
CM
765-12785-000
011
CI
765-12789-000
011
CV
765-12791-000
011
CM
765-12792-000
011
RI
765-12793-000
011
RI
765-12794-000
011
RV
765-12795-000
011
RV
765-12796-000
011
RV
765-12797-000
011
RI
765-12811-000
011
RI
765-12867-000
011
CV
765-12868-000
011
CI
765-12868-001
011
CI
765-12869-000
011
RI
765-12870-000
011
RI
Total Appraised
81,550
90,850
86,150
0
133,600
266,600
71,350
27,500
98,350
0
0
0
493,100
23,000
128,350
0
1,000
0
0
320,142
194,534
146,175
170,293
199,308
68,680
26,076
65,008
22,648
11,386
0
0
0
0
1,724,950
0
12,800
19,200
14,700
26,000
0
307,800
436,250
14,400
14,400
16,000
16,000
49,900
74,150
17,150
467,700
28,350
36,150
111,600
47,650
19,200
13,600
8,000
58,000
24,800
150,000
675,500
216,250
114,250
110,350
tal Assessed
14,973
10,774
13,924
0
26,068
50,850
12,455
5,500
18,150
0
0
0
94,373
3,575
14,286
0
200
0
0
50,912
30,943
23,243
27,080
31,702
10,929
4,145
10,340
3,603
1,815
0
0
0
0
247,592
0
1,188
1,782
1,364
2,552
0
25,454
80,680
2,288
2,288
2,574
2,574
8,723
11,268
2,013
88,717
4,455
5,786
21,043
8,148
3,300
2,145
1,375
8,050
4,290
18,036
83,484
27,196
15,909
14,863
1/29/2005
15
Parcel ID
Ta strict
Type
765-12871-000
V11
CI
765-12872-000
011
CI
765-12873-000
011
Cl
765-12874-000
011
CI
765-12875-000
011
CM
765-12875-001
011
CB
765-12875-002
011
CB
765-12875-003
011
EX
765-12875-004
011
CB
765-12875-010
011
PS
765-12876-000
011
CV
765-12877-000
011
Cl
765-12878-000
011
EX
765-12879-000
011
RI
765-12880-000
011
RI
765-12881-000
011
EX
765-12882-000
011
RI
765-12883-000
011
RI
765-12884-000
011
RV
765-12885-000
011
RI
765-12886-000
011
EX
765-12888-000
011
RI
765-12889-000
011
RI
765-12890-000
011
PS
765-12893-000
011
PS
765-12894-000
011
CI
765-12899-000
011
CV
765-12900-000
011
RI
765-12901-000
011
CV
765-12904-000
011
CI
765-12905-000
011
CI
765-12906-000
011
CM
765-12907-000
011
Cl
765-12908-000
011
CI
765-12932-000
011
PS
765-12932-001
011
CI
765-12933-000
011
EX
765-12934-000
011
CI
765-12935-000
011
CV
765-12944-000
011
CI
765-12945-000
011
RI
765-12946-000
011
CR
765-12954-000
011
CI
765-12957-000
011
RI
765-12958-000
011
RI
765-12959-000
011
RI
765-12960-000
011
RI
765-12961-000
011
CI
765-12962-000
011
RI
765-13020-000
011
CI
765-13020-001
011
EX
765-17377-000
011
EX
765-20935-010
011
CI
765-20935-020
011
CI
765-22032-000
011
RI
765-22033-000
011
RI
765-22034-000
011
RI
765-22035-000
011
RI
765-22036-000
011
CI
765-22037-000
011
CI
765-22038-000
011
CI
765-22039-000
011
CI
765-22040-000
011
CI
765-22041-000
011
CI
Total ADDraised
132,150
89,300
93,450
122,050
76,950
42,550
9,100
0
187,950
0
117,900
82,050
0
87,750
109,900
0
216,750
139,300
22,000
281,300
0
86,150
130,550
0
0
524,350
142,000
174,000
50,000
776,450
636,600
259,900
333,000
337,850
940,650
585,650
0
190,650
46,550
224,950
69,600
680,400
238,550
50,000
91,600
60,850
52,450
221,500
46,500
44,300
0
0
1,436, 854
371,646
420,119
359,032
384,607
465,242
315,192
145,374
859,361
293,367
252,856
304,296
otal Assessed
18,994
12,141
12,012
15,315
11,782
8,510
1,820
0
36,113
0
13,599
9,209
0
12,799
18,090
0
33,176
15,094
3,520
46,404
0
11,197
23,109
0
0
49,464
8,237
20,778
2,959
74,474
102,828
37,166
42,843
37,199
188,130
74,143
0
29,172
8,536
33,173
7,645
109,340
45,934
6,035
14,421
5,750
7,136
44,300
6,793
5,749
0
0
273,665
70,528
78,887
64,170
72,188
93,048
49,280
24,640
141,680
49,280
43,120
60,819
1/29/2005
16
• Parcel ID
Ta trict
Type
765-22042-000
1
CI
765-22043-000
011
CI
765-22044-000
011
CI
765-22045-000
011
CI
765-22046-000
011
CI
765-22047-000
011
CI
765-22048-000
011
CI
765-22049-000
011
CI
765-22050-000
011
RI
765-22051-000
011
RI
765-22052-000
011
RI
765-22053-000
011
RI
765-22054-000
011
RI
765-22055-000
011
RI
765-22056-000
011
RI
765-22057-000
011
RI
765-22058-000
011
RI
765-22059-000
011
RI
765-22060-000
011
RI
765-22061-000
011
RI
765-22062-000
011
CI
765-22063-000
011
CI
765-22064-000
011
CI
765-22065-000
011
CI
765-22066-000
011
CI
765-22067-000
011
CI
765-22068-000
011
CI
765-22367-000
011
RI
765-22368-000
011
RI
765-22369-000
011
RI
765-22370-000
011
RI
765-22371-000
011
RI
765-22372-000
011
RI
765-22373-000
011
RI
765-22374-000
011
RI
765-22375-000
011
RI
765-22376-000
011
RI
765-22377-000
011
RI
765-22378-000
011
RI
765-22379-000
011
RI
765-22380-000
011
RI
765-22381-000
011
CI
765-22382-000
011
CI
765-22383-000
011
CI
765-22384-000
011
CI
765-22536-000
011
CI
765-22537-000
011
CI
765-22538-000
011
CI
765-22539-000
011
CI
765-22540-000
011
RI
765-22541-000
011
RI
765-22542-000
011
RI
765-22543-000
011
RI
765-22544-000
011
RI
765-22545-000
011
RI
765-22546-000
011
CI
765-22547-000
011
CI
765-22548-000
011
CI
765-22549-000
011
CI
765-22550-000
011
CI
765-22551-000
011
CI
765-22552-000
011
CI
765-22553-000
011
CI
765-22554-000
011
CI
Total AoDraised
616,394
366,715
312,098
397,925
827,060
795,850
226,271
210,666
148,247
124,839
124,839
132,642
132,642
288,691
202,864
413,530
234,074
163,851
163,851
273,086
109,234
444,740
249,678
187,259
117,037
117,037
117,037
206,100
208,950
208,350
224,450
209,950
225,400
208,350
225,050
209,950
225,050
208,350
224,050
308,300
322,800
206,200
135,050
963,750
0
339,500
394,850
457,600
476,000
239,850
228,800
184,500
114,400
114,400
147,650
553,550
439,150
0
97,400
97,400
97,400
97,400
97,400
97,400
tal Assessed
123,200
73,293
62,381
79,552
165,319
159,093
45,221
42,119
29,645
24,959
23,825
26,521
26,521
57,695
40,557
82,676
46,783
32,747
32,747
52,112
21,824
88,902
49,907
37,433
23,397
23,397
23,397
40,370
40,370
38,535
44,000
40,370
44,000
40,370
42,000
40,370
44,000
38,535
44,000
60,500
59,850
41,240
27,010
192,750
0
67,900
78,970
91,520
95,200
47,970
45,760
36,900
22,880
22,880
29,530
110,710
87,830
0
9,009
9,009
9,009
9,009
9,009
9,009
1/29/2005
17
Parcel ID
Ta trict
Type
765-22555-000
1
CI
765-22556-000
011
CI
765-22557-000
011
CI
765-22558-000
011
CI
765-22559-000
011
CI
765-22560-000
011
CI
765-22561-000
011
CI
765-22562-000
011
CI
765-22563-000
011
CI
765-22564-000
011
Cl
765-22565-000
011
CI
765-22566-000
011
CI
765-23362-000
011
RI
765-23363-000
011
RI
765-23364-000
011
RI
765-23365-000
011
RI
765-23366-000
011
RI
765-23367-000
011
RI
765-23368-000
011
CI
765-23413-000
011
RI
765-23414-000
011
RI
765-23415-000
011
RI
765-23416-000
011
RI
765-23417-000
011
RI
765-23418-000
011
RI
765-23419-000
011
CR
Total ADoraised
97,400
97,400
97,400
97,400
97,400
97,400
97,400
97,400
0
274,147
273,053
0
234,000
214,600
225,900
306,600
337,250
321,650
0
85,450
65,100
76,900
134,950
81,700
303,700
0
191,120,753
191,120,753
tal Assessed
9,009
9,009
9,009
9,009
9,009
9,009
9,009
9,009
0
50,204
49,995
0
46,800
42,920
45,180
61,320
67,450
64,330
0
17,090
13,020
15,380
26,990
16,340
60,740
0
31,446,555
31,446,555
1/29/2005 18
E
BOND PURCHASE AGREEMENT
March 15, 2005
City of Fayetteville
City Administration Building
113 West Mountain
Fayetteville, Arkansas 72701
KUTAK ROCK LLP
DRAFT 03/15/05
$3,725,000
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. 1 Project)
Series 2005
Ladies and Gentlemen:
On the basis of the representations, warranties and agreements and upon the terms and
conditions contained herein, the undersigned, Crews & Associates, Inc. (the "Underwriter"),
hereby offers to enter into this Bond Purchase Agreement (this "Bond Purchase Agreement")
with the City of Fayetteville, Arkansas (the "City") which, upon your acceptance of this offer,
will be binding upon you and upon the Underwriter. Terms not otherwise defined herein shall
have the same meanings as set forth in the Indenture defined and described below.
This offer is made subject to your acceptance of this Bond Purchase Agreement on or
before midnight on March 15, 2005.
1. General. Upon the terns and conditions and in reliance upon the City's
representations, warranties and covenants herein, the Underwriter hereby agrees to purchase
from the City, and the City hereby agrees to sell to the Underwriter, all (but not less than all) of
$3,725,000 City of Fayetteville, Arkansas Tax Increment Interest Accretion Bonds (Highway 71
East Square Redevelopment District No. 1 Project), Series 2005 (the "Bonds"), at the purchase
price (the "Purchase Price") of $3,576,000.00 (equal to the par amount of the Bonds less
underwriter's discount of $149,000.00).
The Bonds shall be issued by the City pursuant to the provisions of the Constitution and
laws of the State of Arkansas, including, particularly, Amendment 78 to the Constitution and
Arkansas Code Annotated (2003 Supp.) §§14-168-301 et seq. (the "Act").
The Bonds will constitute special and limited obligations of the City, secured solely by
and payable solely from (1) a pledge of and lien on the receipts from the Tax Increment (as
defined below) of the City's Highway 71 East Square Redevelopment District No. I (the
"District") authorized under the Act, and (2) moneys on deposit in the Revenue Fund, Bond
Fund, Project Fund and Redemption Fund established by a Trust Indenture to be dated as of
April 15, 2005 (the "Indenture"), by and between the City and The Bank of Fayetteville,
Fayetteville, Arkansas, as trustee (the "Trustee"), all as more particularly described in the
10-106556.1
0
Indenture. The
Tax Increment has
the meaning set forth in the Act and is determined
by
multiplying the
incremental increase
in value of the real property within the District following
its
creation by the maximum applicable
ad valorem rate permitted
pursuant to the Act.
The Bonds shall be issued and secured pursuant to Ordinance No. of the City
Council of the City which was adopted on March 15, 2005 (the "Authorizing Ordinance"), and
pursuant to the Indenture. The Bonds shall be issued in $5,000 denominations and integral
multiples of $5,000 in excess thereof, shall mature on August 1, 2029 and shall bear interest at
the rate of 6.50% per annum. Interest on the Bonds will accrete, compounded semiannually, as
shown on Exhibit A hereto. The Bonds shall be subject to redemption as set forth in the
Indenture and in the Official Statement (hereinafter defined).
The proceeds of the Bonds
will
be
utilized (i) to pay the costs of the 2005 Project (as
defined in the Indenture), and (ii) to
pay
the
costs of issuance of the Bonds.
The City will undertake, pursuant to a Continuing Disclosure Agreement to be dated as of
the date of delivery of the Bonds (the "Continuing Disclosure Agreement"), to provide certain
annual financial and operating information and notices of the occurrence of certain events, if
material, as required by Section (b)(5)(i) of Rule 15c2-12 under the Securities Exchange Act of
1934, as amended (the "Rule"). A description of this undertaking is set forth in the Preliminary
Official Statement and will also be set forth in the Official Statement (each hereinafter defined).
The City is not in default with respect to any of its obligations under previous undertakings
pursuant to the Rule.
In order to ensure compliance with the provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), the City will enter into a Tax Regulatory Agreement dated as of the
date of delivery of the Bonds (the "Tax Regulatory Agreement").
2. Bona Fide Public Offering. The Underwriter agrees to make a bona fide public
offering of all of the Bonds at the offering prices set forth on the cover of the final Official
Statement described below.
3. Delivery of Official Statement. (a) The City has previously provided the
Underwriter with copies of its Preliminary Official Statement, including the cover page
and the appendices thereto, dated March 11, 2005, relating to the Bonds (the "Preliminary
Official Statement"). As of its date, the Preliminary Official Statement is "deemed final"
by the City for purposes of SEC Rule 15c2 -12(b)(1). The Preliminary Official Statement,
as amended to conform to the terms of this Bond Purchase Agreement, including
Exhibit A hereto, and with such other changes and amendments as are mutually agreed to
by the City and the Underwriter, is herein referred to as the "Official Statement."
(b) The City agrees to deliver to the Underwriter, at such address as the
Underwriter shall specify, as many copies of the final Official Statement dated March 15,
2005, relating to the Bonds as the Underwriter shall reasonably request as necessary to
comply with paragraph (b)(4) of the Rule (as defined above) and with Rule G-32 and all
other applicable rules of the Municipal Securities Rulemaking Board. The City agrees to
2
10-106556.1
deliver such final Official Statement within seven (7) business days after the execution
hereof.
(c) The City hereby authorizes and approves the Preliminary Official
Statement and the final Official Statement, consents to their distribution and use by the
Underwriter and authorizes the execution of the final Official Statement by a duly
authorized officer of the City.
(d) The Underwriter shall give notice to the City on the date after which no
participating underwriter, as such term is defined in the Rule, remains obligated to deliver
final Official Statements pursuant to paragraph (b)(4) of the Rule.
4. City's Representation and Warranties. The City represents and warrants to the
Underwriter that:
(a) The City is a duly organized and existing political subdivision under the
Constitution and laws of the State of Arkansas (the "State"). The City is authorized by
the provisions of the Act to issue the Bonds for the purpose of financing the 2005 Project.
(b) The City has the full legal right, power and authority (i) to adopt
Ordinance Nos. 4608 and 4662 creating the District (collectively, the "Creation
Ordinances"), (ii) to adopt Ordinance Nos. 4646, 4663 and _ approving the project
plan for the District (collectively, the "Project Plan Ordinances"), (iii) to adopt the
Authorizing Ordinance authorizing the issuance of and sale of the Bonds, (iv) to enter
into this Bond Purchase Agreement, the Indenture, the Continuing Disclosure Agreement
and the Tax Regulatory Agreement, (v) to issue, sell and deliver the Bonds to the
Underwriter as provided herein, (vi) to pledge irrevocably the receipts of the Tax
Increment to the payment of the principal of, premium, if any, and interest on the Bonds,
and (vii) to carry out and consummate all other transactions contemplated by each of the
aforesaid documents, and the City has complied with all provisions of applicable law,
including the Act, in all matters relating to such transactions.
(c) The City has duly authorized (i) the execution and delivery of the Bonds
and the execution, delivery and due performance of this Bond Purchase Agreement, the
Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement,
(ii) the distribution and use of the Preliminary Official Statement and the execution,
delivery and distribution of the final Official Statement, and (iii) the taking of any and all
such actions as may be required on the part of the City to carry out, give effect to and
consummate the transactions contemplated by such instruments. All consents or
approvals necessary to be obtained by the City in connection with the foregoing have
been received, and the consents or approvals so received remain still in full force and
effect.
(d) The Creating Ordinances, the Project Plan Ordinances and the Authorizing
Ordinance have been duly adopted by City Council of the City, are each in full force and
effect and each constitutes the legal, valid and binding act of the City; and this Bond
Purchase Agreement, the Indenture, the Continuing Disclosure Agreement and the Tax
3
10-106556.1
Regulatory Agreement, when executed and delivered, will constitute legal, valid and
binding obligations of the City, and this Bond Purchase Agreement, the Indenture, the
Continuing Disclosure Agreement and the Tax Regulatory Agreement are enforceable
against the City in accordance with their respective terms, except as enforceability
thereof may be limited by bankruptcy, insolvency or other laws affecting creditors' rights
generally.
(e) When delivered to or at the direction of the Underwriter, the Bonds will
have been duly authorized, executed, authenticated, issued and delivered and will
constitute legal, valid and binding obligations of the City in conformity with the laws of
the State of Arkansas, including the Act, and will be entitled to the benefit and security of
the Authorizing Ordinance and the Indenture.
(f) The City has duly approved and authorized the distribution and use of the
Preliminary Official Statement and the execution, delivery and distribution of the Official
Statement.
(g) The information contained in the Preliminary Official Statement is, and as
of the Closing Date such information in the final Official Statement will be, true and
correct in all material respects, and the Preliminary Official Statement does not and the
final Official Statement will not contain any untrue or misleading statement of a material
fact or omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(h) If, at any time prior to the earlier of (i) receipt of notice from the
Underwriter pursuant to Section 3(d) hereof that Official Statements are no longer
required to be delivered under the Rule or (ii) 25 days after the Closing Date, any event
occurs as a result of which the Official Statement, as then amended or supplemented,
might include an untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading, the City shall promptly notify the Underwriter in writing of
such event. Any information supplied by the City for inclusion in any amendments or
supplements to the Official Statement will not contain any untrue or misleading statement
of a material fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
Upon the request of the Underwriter therefor, the City shall prepare and deliver to the
Underwriter, at the City's expense, as many copies of an amendment or supplement to the
Official Statement which will correct any untrue statement or omission therein as the
Underwriter may reasonably request.
(i) Neither the adoption of the Authorizing Ordinance, the Creating
Ordinances or the Project Plan Ordinances, the execution and delivery of this Bond
Purchase Agreement, the Bonds, the Indenture, the Continuing Disclosure Agreement or
the Tax Regulatory Agreement, nor the consummation of the transactions contemplated
herein or therein or the compliance with the provisions hereof or thereof will conflict
with, or constitute on the part of the City a violation of, or a breach of or default under, (i)
any statute, indenture, mortgage, commitment, note or other agreement or instrument to
4
10-106556.1
which the City is a party or by which it is bound, (ii) any provision of the Constitution of
the State of Arkansas, or (iii) any existing law, rule, regulation, ordinance, judgment,
order or decree to which the City (or the members of its City Council or any of its
officers in their respective capacities as such) is subject. All consents, approvals,
authorizations and orders of governmental or regulatory authorities, if any, which are
required for the City's execution and delivery of, consummation of the transactions
contemplated by, and compliance with the provisions of this Bond Purchase Agreement,
the Authorizing Ordinance, the Creating Ordinances, the Project Plan Ordinances, the
Bonds, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory
Agreement have been obtained.
(j) Except as is specifically disclosed in the Official Statement, there is no
action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, pending or, to the best knowledge of the City, threatened,
which in any way questions the powers of the City referred to in subparagraph 4(b)
above, or the validity of any proceeding taken by the City in connection with the issuance
of the Bonds or the pledge of the Tax Increment, or wherein an unfavorable decision,
ruling or finding could materially adversely affect the transactions contemplated by this
Bond Purchase Agreement, or of any other document or instrument required or
contemplated by the Bond financing, or which, in any way, could adversely affect the
validity or enforceability of the Authorizing Ordinance, the Creating Ordinances, the
Project Plan Ordinances, the Bonds, the Indenture, the Continuing Disclosure Agreement,
the Tax Regulatory Agreement or this Bond Purchase Agreement or, to the knowledge of
the City, which in any way questions the exclusion from gross income of the recipients
thereof of the interest on the Bonds for federal income tax purposes or in any other way
questions the status of the Bonds under federal or State of Arkansas tax laws or
regulations.
(k) Any certificate signed by any official of the City and delivered to the
Underwriter shall be deemed a representation and warranty by the City to the
Underwriter as to the truth of the statements therein contained.
(1) The City has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is a bond issuer whose arbitrage
certifications may not be relied upon.
(m) The City will not knowingly take or omit to take any action, which action
or omission will in any way cause the proceeds from the sale of the Bonds to be applied
in a manner other than as provided in the Indenture, or which would cause the interest on
the Bonds to be includable in gross income for federal income tax purposes.
5
10-106556.1
CI
5. City's Covenants. The City covenants with the Underwriter as follows:
(a) The City will cooperate with the Underwriter in qualifying the Bonds for
offer and sale under the securities or Blue Sky laws of such jurisdictions of the
United States as the Underwriter may request; provided, however, that the City shall not
be required to consent to suit or to service of process in any jurisdiction. The City
consents to the use by the Underwriter in the course of its compliance with the securities
or Blue Sky laws of the various jurisdictions of the documents relating to the Bonds,
subject to the right of the City to withdraw such consent for cause by written notice to the
Underwriter.
(b) Prior to the earlier of (i) receipt of notice from the Underwriter pursuant to
Section 3(d) hereof that final Official Statements are no longer required under the Rule or
(ii) 25 days after the Closing Date, the City shall provide the Underwriter with such
information regarding the City, Tax Increment receipts, and the current financial
condition and valuation of property within the District, all as the Underwriter may
reasonably request.
6. Closing. At 10:00 a.m. Little Rock time on April 19, 2005, or at such other time
and/or date as shall have been mutually agreed upon by the City and the Underwriter (the
"Closing Date"), the City will deliver the Bonds, or cause the Bonds to be delivered, to or at the
direction of the Underwriter, said Bonds to be in definitive form duly executed by the City and
authenticated by The Bank of Fayetteville, Fayetteville, Arkansas, as trustee (the "Trustee"),
together with the other documents hereinafter mentioned; and the Underwriter will accept such
delivery and pay the Purchase Price of the Bonds by making a wire transfer of federal funds
payable to the order of the Trustee for the account of the City.
The Bonds shall be delivered to The Depository Trust Company in New York,
New York, and the activities relating to the final execution and delivery of the Authorizing
Ordinance, the Creating Ordinances, the Project Plan Ordinances, the Indenture, the Continuing
Disclosure Agreement and the Tax Regulatory Agreement and the other documents related to the
Bonds and the payment for the Bonds and the delivery of the certificates, opinions and other
instruments as described in Section 8 of this Bond Purchase Agreement shall occur in the offices
of Kutak Rock LLP, 425 West Capitol Avenue, Suite 1100, Little Rock, Arkansas ("Bond
Counsel") or at such other place as shall have been mutually agreed upon between the City and
the Underwriter. The payment for the Bonds and simultaneous delivery of the Bonds to or at the
direction of the Underwriter is herein referred to as the "Closing."
7. Underwriter's Right to Cancel. The Underwriter shall have the right to cancel
its obligation to purchase the Bonds hereunder by notifying the City in writing or by telegram of
its election to do so between the date hereof and the Closing, if at any time hereafter and prior to
the Closing:
(i) the House of Representatives or the Senate of the Congress of the
United States, or a committee of either, shall have pending before it, or shall have passed or
recommended favorably, legislation introduced previous to the date hereof, which
legislation, if enacted in its form as introduced or as amended, would have the purpose or
6
10-106556.1
effect of imposing federal income taxation upon revenues or other income of the general
character to be derived by the City or by any similar body under the Authorizing Ordinance
or the Indenture or similar documents or upon interest received on obligations of the general
character of the Bonds or the Bonds, or of causing interest on obligations of the general
character of the Bonds, or the Bonds, to be includable in gross income for purposes of
federal income taxation, and such legislation, in the Underwriter's opinion, materially
adversely affects the market price of the Bonds; or
(ii) ' a tentative decision with respect to legislation shall be reached by a
committee of the House of Representatives or the Senate of the Congress of the
United States, or legislation shall be favorably reported or rereported by such a committee or
be introduced, by amendment or otherwise, in or be passed by the House of Representatives
or the Senate, or recommended to the Congress of the United States for passage by the
President of the United States, or be enacted or a decision by a federal court of the
United States or the United States Tax Court shall have been rendered, or a ruling, release,
order, regulation or official statement by or on behalf of the United States Treasury
Department, the Internal Revenue Service or other governmental agency shall have been
made or proposed to be made having the purpose or effect, or any other action or event shall
have occurred which has the purpose or effect, directly or indirectly, of adversely affecting
the federal income tax consequences of owning the Bonds or of any of the transactions
contemplated in connection herewith, including causing interest on the Bonds to be included
in gross income for purposes of federal income taxation, or imposing federal income
taxation upon revenues or other income of the general character to be derived by the City or
by any similar body under the Authorizing Ordinance or the Indenture or similar documents
or upon interest received on obligations of the general character of the Bonds, or the Bonds
which, in the opinion of the Underwriter, materially adversely affects the market price of or
market for the Bonds; or
(iii) legislation shall have been enacted, or actively considered for enactment
with an effective date prior to the Closing, or a decision by a court of the United States shall
have been rendered, the effect of which is that the Bonds, including any underlying
obligations, or the Indenture, as the case may be, is not exempt from the registration,
qualification or other requirements of the Securities Exchange Act of 1933, as amended and
as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or
the Trust Indenture Act of 1939, as amended and as then in effect; or
(iv) a stop order, ruling, regulation or official statement by the Securities and
Exchange Commission or any other governmental agency having jurisdiction of the subject
matter shall have been issued or made or any other event occurs, the effect of which is that
the issuance, offering or sale of the Bonds, including any underlying obligations, or the
execution and delivery of the Indenture as contemplated hereby or by the Official Statement,
is or would be in violation of any provision of the federal securities laws, including the
Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of
1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and
as then in effect; or
7
10-106556.1
(v) any event shall have occurred or any information shall have become known
to the Underwriter which causes the Underwriter to reasonably believe that the Official
Statement as then amended or supplemented includes an untrue statement of a material fact,
or omits to state any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or
(vi) there shall have occurred any outbreak of hostilities or any national or
international calamity or crisis, including a financial crisis, the effect of which on the
financial markets of the United States is such as, in the reasonable judgment of the
Underwriter, would materially adversely affect the market for or market price of the Bonds;
or
(vii) there shall be in force a general suspension of trading on the New York
Stock Exchange, the effect of which on the financial markets of the United States is such as,
in the reasonable judgment of the Underwriter, would materially adversely affect the market
for or market price of the Bonds; or
(viii) a general banking moratorium shall have been declared by federal,
New York or State authorities; or
(ix) any proceeding shall be pending or threatened by the Securities and
Exchange Commission against the City; or
(x) additional material restrictions not in force as of the date hereof shall have
been imposed upon trading in securities generally by any governmental authority or by any
national securities exchange; or
(xi) there shall have been legislation enacted by the General Assembly of the
State of Arkansas or there shall have been a decision rendered by a court of competent
jurisdiction in the State of Arkansas that has, in the reasonable judgment of the Underwriter,
the effect of reducing the amount of the Tax Increment available to secure the Bonds; or
(xii) the New York Stock Exchange or other national securities exchange, or any
governmental authority, shall impose, as to the Bonds or obligations of the general character
of the Bonds, any material restrictions not now in force, or increase materially those now in
force, with respect to the extension of credit by, or the charge to the net capital requirements
of the Underwriter.
8. Conditions to Underwriter's Obligations. The obligation of the Underwriter to
purchase the Bonds shall be subject (a) to the performance by the City of its obligations to be
performed hereunder at and prior to the Closing, (b) to the accuracy of the representations and
warranties of the City herein as of the date hereof and as of the time of the Closing, and (c) to the
following conditions, including the delivery by the City of such documents as are enumerated
herein in form and substance satisfactory to the Underwriter:
(a) The Bonds shall have been duly authorized, executed and delivered in the
forms approved by the City in the Indenture with only such changes therein as the
10-106556.1
Underwriter and the City shall mutually agree upon, which shall in all instances be as
described in the final Official Statement;
(b) At the time of Closing, (i) the Official Statement, this Bond Purchase
Agreement, the Indenture, the Authorizing Ordinance, the Creating Ordinances, the
Project Plan Ordinances, the Continuing Disclosure Agreement and the Tax Regulatory
Agreement shall be in full force and effect and shall not have been amended, modified or
supplemented from the date hereof, except as may have been agreed to in writing by the
Underwriter, (ii) the proceeds of the sale of the Bonds and other funds shall be deposited
and applied as described in the Indenture, (iii) no default or event of default under the
Indenture shall have occurred and be continuing, and (iv) no material adverse change
affecting the City or the Tax Increment shall have occurred, nor shall any development
involving a prospective and material adverse change in, or affecting the business,
financial condition, results of operations, prospects or properties of the District or the
City have occurred;
(c) Receipt of fully executed originals of the Indenture, the Continuing
Disclosure Agreement and the Tax Regulatory Agreement at or prior to the Closing;
(d)
At or prior to the
Closing, the Underwriter
shall receive the following
documents
in such number of
counterparts as shall be
mutually agreeable to the
Underwriter
and Bond Counsel:
(1) A final approving opinion of Bond Counsel, dated the Closing
Date, in substantially the form set forth in Exhibit B hereto;
(2) A supplemental opinion of Bond Counsel, addressed to the City,
the Trustee and the Underwriter and dated the Closing Date, in substantially the
form set forth in Exhibit C hereto;
(3) The Official Statement executed by a duly authorized officer of the
City;
(4) Certified copies of the Authorizing Ordinance, the Creating
Ordinances and the Project Plan Ordinances and all other ordinances and
resolutions of the City relating to the Bonds;
(5) Photocopies of the Bonds as executed and delivered;
(6) A certificate, in form and substance satisfactory to the
Underwriter, of any duly authorized officer or official of the City satisfactory to
the Underwriter, dated as of the Closing Date, to the effect that: (i) each of the
City's representations, warranties and covenants contained herein are true and
correct as of the Closing Date; (ii) the City has duly adopted the Authorizing
Ordinance, the Creating Ordinances and the Project Plan Ordinances by all action
necessary under the Act and the laws and Constitution of the State of Arkansas,
including Amendment 78, and has duly authorized the execution, delivery and
due performance of the Bonds, the Indenture, the Continuing Disclosure
9
10-106556.1
Agreement, the Tax Regulatory Agreement, the Official Statement and this Bond
Purchase Agreement; (iii) no litigation is pending, or to the knowledge of the
officer or official of the City signing the certificate after due investigation and
inquiry, threatened, to restrain or enjoin the issuance or sale of the Bonds or in
any way affecting any authority for or the validity of the Bonds, the Tax
Increment, the Official Statement, the Authorizing Ordinance, the Creating
Ordinances, the Project Plan Ordinances, the Indenture, the Continuing Disclosure
Agreement, the Tax Regulatory Agreement, or this Bond Purchase Agreement;
(iv) the Bonds, the Indenture, this Bond Purchase Agreement, the Continuing
Disclosure Agreement and the Tax Regulatory Agreement, as executed and
delivered by the City, are in the form or in substantially the form approved for
such execution by appropriate proceedings of the City; (v) none of the
Authorizing Ordinance, the Creating Ordinances nor the Project Plan Ordinances
have been amended, modified or repealed as of the Closing Date, and the
Authorizing Ordinance, the Creating Ordinances and the Project Plan Ordinances
remain in full force and effect; (vi) none of the proceedings of the City taken
preliminary to the issuance of the Bonds, as certified in such certificate, have been
in any manner repealed, amended or changed; (vii) the City has complied in all
respects with the provisions of the Act and has full legal right, power and
authority to issue the Bonds for the purposes stated in the Act and to enter into
this Bond Purchase Agreement, to adopt the Authorizing Ordinance, the Creating
Ordinances and the Project Plan Ordinances, to issue, sell and deliver the Bonds
as provided in this Bond Purchase Agreement, and to carry out and consummate
all other transactions contemplated by this Bond Purchase Agreement, the
Authorizing Ordinance, the Creating Ordinances, the Project Plan Ordinances, the
Indenture, the Continuing Disclosure Agreement and the Tax Regulatory
Agreement; (viii) neither the Official Statement nor any amendment or
supplement thereto contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading; and (ix) to the best knowledge of the officer or official of the City
signing the certificate, no event affecting the City or the Tax Increment has
occurred since the date of the Official Statement which should be disclosed in the
Official Statement for the purposes for which it is used that is necessary to
disclose therein in order to make the statements and information therein not
misleading in any respect;
(7) An opinion of Kit Williams, Esq., City Attorney, dated the Closing
Date and addressed to the Underwriter, Bond Counsel and the Trustee, to the
effect that (i) the City is a duly organized and validly existing political
subdivision and city of the first class, organized under the laws of the State of
Arkansas, with full power and authority to adopt the Authorizing Ordinance, the
Creating Ordinances and the Project Plan Ordinances, to execute and deliver the
Bonds, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory
Agreement and this Bond Purchase Agreement; (ii) the City has duly approved
the Preliminary Official Statement and the Official Statement; (iii) the
Authorizing Ordinance, the Creating Ordinances and the Project Plan Ordinances
10
10-106556.1
have been duly adopted by the City by all action necessary under the Act and the
laws and Constitution of the State of Arkansas, and remain in full force and
effect; (iv) the Indenture, the Continuing Disclosure Agreement, the Tax
Regulatory Agreement and this Bond Purchase Agreement have been duly
authorized, approved, executed and delivered by the City and, subject to the
extent that the enforceability of the rights and remedies set forth therein may be
limited by bankruptcy, insolvency or other laws affecting creditors' rights
generally, constitute valid and binding agreements of the City enforceable in
accordance with their terms; (v) the information in the Official Statement under
the captions "THE PROJECT," "THE CITY AND THE DISTRICT" and
"LEGAL MATTERS" (apart from financial or statistical data contained or
incorporated therein, as to which no view need be expressed) is fair, accurate and
complete and does not omit any matter which, in such counsel's opinion, for the
purposes for which the Official Statement is to be used, should be included or
referred to therein; (vi) excepting those matters discussed in the Official
Statement, there is no action, suit or proceeding at law or in equity before or by
any court, public board or body, pending or threatened, against or affecting the
City, challenging the validity of the transactions contemplated by the Official
Statement or the validity of the Bonds, the Tax Increment, the Authorizing
Ordinance, the Creating Ordinances, the Project Plan Ordinances, the Indenture,
the Continuing Disclosure Agreement, the Tax Regulatory Agreement or this
Bond Purchase Agreement and, to the best of such counsel's knowledge, there is
no investigation, pending or threatened, and no threatened action, suit or
proceeding involving any of the matters hereinabove mentioned in this clause
(vi); (vii) the execution and delivery of the Authorizing Ordinance, the Creating
Ordinances, the Project Plan Ordinances, the Indenture, the Continuing Disclosure
Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement,
and compliance with the provisions hereof and thereof, under the circumstances
contemplated hereby and thereby, do not and will not in any material respect
conflict with or constitute on the part of the City a breach of or default under any
agreement or other instrument to which the City is a party or any existing law,
regulation, court order or consent decree to which the City is subject; and
(viii) based upon the examinations which such counsel has made as counsel to the
City, which shall be specified, nothing has come to such counsel's attention which
would lead such counsel to believe that the Official Statement (except for the
financial statements and other financial data included in the Official Statement, as
to which no view need be expressed) contains an untrue statement of a material
fact or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;
(8) Evidence that Federal Form 8038-G has been executed by the City
and is ready for filing with the Internal Revenue Service.
(9) Evidence that, except as disclosed in the Official Statement, all
necessary approvals, whether legal or administrative, have been obtained from
applicable federal, state and local entities and agencies; and
11
10-106556.1
(10) Such additional legal opinions, certificates, proceedings,
instruments and other documents as the Underwriter and Bond Counsel may
reasonably request to evidence compliance by the City with legal requirements,
the truth and accuracy, as of the time of Closing, of the representations of the City
herein contained and the due performance or satisfaction by the City at or prior to
such time of all agreements then to be performed and all conditions then to be
satisfied.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriter
contained in this Bond Purchase Agreement, or if the obligation of the Underwriter to purchase
and accept delivery of the Bonds shall be terminated for any reason permitted by this Bond
Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter
nor the City shall be under further obligation hereunder; except that the respective obligations to
pay expenses, as provided in Section 12 hereof, shall continue in full force and effect.
9. Conditions to Obligations of the City. The obligations of the City hereunder are
subject to the performance by the Underwriter of its obligations hereunder.
10. Survival. All representations, warranties and agreements of the City shall remain
operative and in full force and effect, regardless of any investigations made by or on behalf of
the Underwriter, and shall survive the Closing. The obligations of the City under Sections 11 or
12 hereof shall survive any termination of this Bond Purchase Agreement by the Underwriter
pursuant to the terms hereof.
11. Indemnification. The City, to the extent permitted by law, agrees to indemnify
and hold harmless the Underwriter, each member, officer, director, partner or employee of the
Underwriter and each person who controls the Underwriter within the meaning of Section 15 of
the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as
amended (collectively called the "Indemnified Parties"), against any and all losses, claims,
damages, liabilities or expenses (including any legal or other expenses incurred by an
Indemnified Party in connection with investigating any claims against an Indemnified Party and
defending any actions) whatsoever caused by any untrue statement or misleading statement or
alleged untrue statement or alleged misleading statement of a material fact contained in the
Official Statement or caused by any omission or alleged omission from the Official Statement of
any material fact required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading insofar as
such losses, claims, damages, liabilities or expenses are caused by any such untrue or misleading
statement or omission or alleged untrue or misleading statement or omission in the information
contained in the Official Statement; provided, however, that the City shall not be liable to an
Indemnified Party in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any of such documents in reliance upon and in conformity
with written information furnished to the City by the Underwriter specifically for use therein.
No Indemnified Parties shall be indemnified hereunder for any losses, claims, damages or
liabilities resulting from the negligence of such Indemnified Parties.
12
10-106556.1
12. Payment of Expenses. The City will pay or cause to be paid all reasonable
expenses incident to the performance of its obligations under this Bond Purchase Agreement,
including, but not limited to, expenses of mailing or delivery of the Bonds, costs of printing the
Bonds, the Preliminary and final Official Statements, any amendment or supplement to the
Preliminary or final Official Statement and this Bond Purchase Agreement, fees and
disbursements of Bond Counsel, any fees charged by investment rating agencies for the rating of
the Bonds, bond insurance premiums, if any, fees of the Trustee and any paying agent fees, and
any fees and disbursements in connection with the qualification of the Bonds for sale under the
securities or "Blue Sky" laws of the various jurisdictions and the preparation of "Blue Sky"
memoranda. In the event this Bond Purchase Agreement shall terminate because of the default
of the Underwriter, the City will, nevertheless, pay, or cause to be paid, all of the expenses
specified above. The Underwriter shall pay all advertising expenses in connection with the
public offering of the Bonds, and all other expenses incurred by it in connection with the public
offering and distribution of the Bonds, including the fees and expenses of any counsel retained
by the Underwriter. If the City defaults under this Bond Purchase Agreement, the Underwriter
may bring whatever legal action it may have against the City to recover damages, if any, incurred
by the Underwriter.
13. Notices. Any notice or other communication to be given to the City under this
Bond Purchase Agreement may be given by delivering the same in writing to the Mayor at the
address set forth above, and any notice or other communication to be given to the Underwriter
under this Bond Purchase Agreement may be given by delivering the same in writing to Crews &
Associates, Inc., First Security Center, 521 President Clinton Avenue, Suite 800, Little Rock, AR
72201, Attention: Mr. Robert Wright.
14. Nonassignability. This Bond Purchase Agreement is made solely for the benefit
of the City and the Underwriter (including any successor or assign of the Underwriter), and no
other person, including any purchaser of the Bonds, shall acquire or have any right hereunder or
by virtue hereof.
15. Applicable Law. This Bond Purchase Agreement shall be governed by and
construed in accordance with the laws of the State of Arkansas.
13
10-106556.1
0
16. Counterparts. This Bond Purchase Agreement shall become effective upon your
acceptance hereof and may be executed in counterparts, each of which shall be regarded as an
original and all of which shall constitute one and the same document.
Very truly yours,
TES, INC.
By:
Accepted and agreed to as of 9:00 p.m.
on the date first above written:
CITY OF F,WETTEVILLE, ARKANSAS
By:_
Title:
14
10-106556.1
r
C
16. Counterparts. This Bond Purchase Agreement shall become effective upon your
acceptance hereof and may be executed in counterparts, each of which shall be regarded as an
original and all of which shall constitute one and the same document.
Very truly yours,
CREWS & ASSOCIATES, INC.
By:
Authorized Representative
TIME
Accepted and agreed to as of
the date first above written:
CITY OF FAYETTEVILLE, ARKANSAS
By:
Title: Mayor
14
10-106556.1
LJ
C
EXHIBIT A
ACCRETION SCHEDULE
Date Accreted Value of a $5,000
Bond
4-19-05
$ 5,000.00
8-1-05
5,092.08
2-1-06
5,257.58
8-1-06
5,428.45
2-1-07
5,604.87
8-1-07
5,787.03
2-1-08
5,975.11
8-1-08
6,169.30
2-1-09
6,369.80
8-1-09
6,576.82
2-1-10
6,790.57
8-1-10
7,011.26
2-1-11
7,239.13
8-1-11
7,474.40
2-1-12
7,717.32
8-1-12
7,968.13
2-1-13
8,227.09
8-1-13
8,494.47
2-1-14
8,770.54
8-1-14
9,055.59
2-1-15
9,349.89
8-1-15
9,653.76
2-1-16
9,967.51
8-1-16
10,291.46
2-1-17
10,625.93
8-1-17
10,971.27
2-1-18
11, 327.84
8-1-18
11,695.99
2-1-19
12,076.11
8-1-19
12,468.59
2-1-20
12,873.81
8-1-20
13,292.21
2-1-21
13,724.21
8-1-21
14,170.25
2-1-22
14,630.78
8-1-22
15,106.28
2-1-23
15,597.23
8-1-23
16,104.15
2-1-24
16,627.33
10-106556.1 A -I
Date Accreted Value of a $5,000
Bond
8-1-24
17,167.92
2-1-25
17,725.88
8-1-25
18,301.97
2-1-26
18,896.79
8-1-26
19,510.93
2-1-27
20,145.04
8-1-27
20,799.75
2-1-28
21,475.74
8-1-28
22,173.71
2-1-29
22,894.35
8-1-29
23,638.42
10-106556.1 A-2
PROPOSED FORM OF BOND COUNSEL APPROVING OPINION
Upon delivery of the Bonds in definitive form, Kutak Rock LLP, Little Rock, Arkansas,
proposes to deliver its approving opinion in substantially the following form:
April _, 2005
City of Fayetteville, Arkansas
Fayetteville, Arkansas
The Bank of Fayetteville, as Trustee
Fayetteville, Arkansas
Crews & Associates, Inc.
Little Rock, Arkansas
$3,725,000
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. 1 Project)
Series 2005
Ladies and Gentlemen:
We have acted as bond counsel in connection with the issuance and sale by the City of
Fayetteville, Arkansas (the "City"), a political subdivision of the State of Arkansas, of its
$3,725,000 Tax Increment Interest Accretion Bonds (Highway 71 East Square Redevelopment
District No. 1 Project), Series 2005 (the "Bonds").
The Bonds are being issued pursuant to the provisions of the Constitution and laws of the
State of Arkansas, including, particularly, Amendment 78 and Arkansas Code Annotated (Supp.
2003) §§14-168-301 et seq. (as from time to time amended, the "Act"), pursuant to Ordinance
No. of the City, duly adopted and approved on March _, 2005 (the "Authorizing
Ordinance"), and pursuant to a Trust Indenture dated as of April 15, 2005 (the "Indenture"), by
and between the City and The Bank of Fayetteville, as trustee (the "Trustee"). Reference is
hereby made to the Indenture and to all indentures supplemental thereto for the provisions,
among others, with respect to the conditions for the issuance of parity debt by the City, the
nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the
Trustee and the Holders of the Bonds, and the terms upon which the Bonds are issued and
secured.
Reference is made to an opinion of even date herewith of Kit Williams, Esq., City
Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the
10-106556.1 B-1
status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance
and to enter into and perform its obligations under the Indenture, the valid adoption of the
Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the
City, and with respect to the Indenture being enforceable upon the City.
We have examined the law and such certified proceedings and other papers as we have
deemed necessary to render this opinion. As to questions of fact material to our opinion, we
have relied upon the representations of the City contained in the Authorizing Ordinance and the
Indenture and in the certified proceedings and other certifications of public officials furnished to
us, without undertaking to verify the same by independent investigation.
Based upon the foregoing, we are of the opinion, under existing law, as follows:
1. The City is duly created and validly existing as a municipal corporation of the
State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including,
particularly, Amendment 78 and the Act, the City is empowered to adopt the Authorizing
Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained
therein, and to issue the Bonds.
2. The Authorizing Ordinance has been duly adopted by the City and constitutes a
valid and binding obligation of the City enforceable upon the City in accordance with its terms.
3. The Indenture has been duly authorized, executed and delivered by the City and is
a valid and binding obligation of the City enforceable upon the City in accordance with its terms.
4. The Bonds have been validly authorized, executed, issued and delivered by the
City and represent valid and binding special obligations of the City. The principal, premium, if
any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and
pledge by the City to the Trustee of, the receipts of the Tax Increment (as defined in the
Indenture).
5. The Tax Increment receipts have been duly and validly assigned and pledged to
the Trustee under the Indenture.
6. Interest on the Bonds is excluded from gross income for federal income tax
purposes and is not a specific preference item for purposes of the federal alternative minimum
tax. The opinion described in the preceding sentence assumes the accuracy of certain
representations and compliance by the City with covenants designed to satisfy the requirements
of the Internal Revenue Code of 1986, as amended, that must be met subsequent to the issuance
of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be
included in gross income for federal income tax purposes retroactive to the date of issuance of
the Bonds. The City has covenanted to comply with such requirements.
7. The interest on the Bonds is exempt from all state, county and municipal taxes in
the State of Arkansas.
10-106556.1 B-2
L
•
8. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as
amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939,
as amended, in connection with the offer and sale of the Bonds.
It is to be understood that the rights of the registered owners of the Bonds and the
enforceability of the Bonds, the Authorizing Ordinance and the Indenture may be subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors'
rights heretofore or hereafter enacted to the extent constitutionally applicable and that their
enforcement may also be subject to the exercise of judicial discretion in appropriate cases.
Very truly yours,
10-106556.1 B-3
L
EXHIBIT C
PROPOSED FORM OF BOND COUNSEL SUPPLEMENTAL OPINION
April _, 2005
City of Fayetteville, Arkansas
Fayetteville, Arkansas
The Bank of Fayetteville, as Trustee
Fayetteville, Arkansas
Crews & Associates, Inc.
Little Rock, Arkansas
$3,725,000
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 Eat Square Redevelopment District No. I Project)
Series 2005
Ladies and Gentlemen:
This opinion supplements our bond approving opinion, dated the date hereof, relating to
the above -captioned bonds (the "Bonds"). Except as otherwise defined herein, the terns used
herein shall have the meanings prescribed for them in said opinion.
We have examined the law and such certified proceedings and other papers as we have
deemed necessary to render this opinion. As to questions of fact material to our opinion, we
have relied upon the representations of the City contained in the Indenture and in the certified
proceedings and other certifications of public officials furnished to us, without undertaking to
verify the same by independent investigation.
In addition to the documents specifically mentioned in the approving opinion, in
connection with this opinion we have also examined:
(a) An executed counterpart of the Bond Purchase Agreement dated March
_ 2005 (the "Bond Purchase Agreement"), by and between the City and Crews &
Associates, Inc., as underwriter (the "Underwriter");
(b) An executed counterpart of the Continuing Disclosure Agreement dated
April _, 2005 (the "Disclosure Agreement"), by and between the City and The Bank of
Fayetteville, as trustee (the "Trustee");
(c)
An executed counterpart
of the Tax Regulatory Agreement
dated April
2005 (the "Tax
Regulatory Agreement"),
by and between the City and the
_,
Trustee; and
10-106556.1 C-1
(d) Portions of the Official Statement dated March _, 2005, with respect to
the Bonds (the "Official Statement"), captioned "INTRODUCTORY STATEMENT,"
"THE SERIES 2005 BONDS," "SECURITY FOR THE BONDS,", "ESTIMATED
SOURCES AND USES OF FUNDS," "DEFINITIONS OF CERTAIN TERMS,"
"SUMMARY OF THE INDENTURE," "SUMMARY OF THE CONTINUING
DISCLOSURE AGREEMENT," "TAX EXEMPTION," and "APPENDIX A — Form of
Opinion of Bond Counsel" (the "Relevant Captions") insofar as they relate to this
opinion.
Based on our examination, we are of the opinion, as of the date hereof and under existing
law, as follows:
1. The Bond Purchase Agreement has been duly authorized, executed and
delivered by the City and, assuming due authorization, execution and delivery by the
Underwriter, the Bond Purchase Agreement constitutes the valid and binding agreement
of the City enforceable in accordance with its terms.
2. The Disclosure Agreement has been duly authorized, executed and
delivered by the City and, assuming due authorization, execution and delivery by the
Trustee, the Disclosure Agreement constitutes the valid and binding agreement of the
City enforceable in accordance with its terms.
3. The Tax Regulatory Agreement has been duly authorized, executed and
delivered by the City and, assuming due authorization, execution and delivery by the
Trustee, the Tax Regulatory Agreement constitutes the valid and binding agreement of
the City enforceable in accordance with its terms.
4. The statements contained in the Official Statement under the Relevant
Captions, insofar as such statements purport to summarize certain provisions of the
Bonds, the Indenture and the Continuing Disclosure Agreement, or conclusions of law
and legal opinions, are true, accurate and correct summaries thereof in all material
respects and do not omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading.
The enforceability of the respective obligations of the parties to the documents and other
items described above, and the availability of certain rights and remedies provided for therein,
may be limited by bankruptcy, receivership, insolvency, reorganization, moratorium, marshalling
or other similar statutes or rules of law affecting creditors' rights and remedies, to general
principles of equity and to the discretion of any court in granting any relief or issuing any order,
whether the proceeding is considered a proceeding at law or equity. In particular, the right to
indemnification under any of the documents or other items described above may be limited by
federal of state securities laws or by the public policy underlying such laws.
This
opinion is being
rendered
to you solely for your use and benefit and may not be
relied upon
in any manner, nor used, by
any other person.
Very truly yours,
10-106556.1 C-2
Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to the City or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in
such other name as is requested by the authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized representative of
DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is
wrongful inasmuch as the registered owner hereof Cede & Co., has an interest herein.
REGISTERED REGISTERED
No. R05-1 $3,725,000
UNITED STATES OF AMERICA
STATE OF ARKANSAS
CITY OF FAYETTEVILLE, ARKANSAS
TAX INCREMENT INTEREST ACCRETION BOND
(HIGHWAY 71 EAST SQUARE REDEVELOPMENT DISTRICT NO. 1 PROJECT)
SERIES 2005
Interest Rate: 6.50% Maturity Date: August 1, 2029
Date of Bond: April 19, 2005
Registered Owner: CEDE & CO.
Principal Amount: THREE MILLION SEVEN HUNDRED TWENTY-FIVE THOUSAND DOLLARS
KNOW ALL MEN BY THESE PRESENTS:
That the City of Fayetteville, Arkansas, a municipality and political subdivision
organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value
received, hereby promises to pay to the Registered Owner shown above, or registered assigns, on
the Maturity Date shown above, but solely from the source and in the manner hereinafter set
forth, the Principal Amount shown above and the interest accreted thereon. This bond will
accrete interest from the date of its issuance through maturity or earlier redemption at the Interest
Rate per annum shown above, such interest to compound semiannually on February 1 and
August 1 of each year, commencing on August 1, 2005, as set forth in Exhibit C to the Indenture
identified and defined below. The Accreted Value (as defined in the Indenture) of this bond and
any applicable redemption premium is payable in lawful money of the United States of America
upon the presentation and surrender hereof at the principal corporate trust office of The Bank of
Fayetteville, N.A., Fayetteville, Arkansas, or its successor or successors, as trustee (the
"Trustee"). Notwithstanding the foregoing, so long as Cede & Co. or another nominee of The
Depository Trust Company is the registered owner of this bond, payment of the Accreted Value
hereof and any redemption premium shall be made by wire transfer of immediately available
funds.
10-108529.1
This bond, designated "Tax Increment Interest Accretion Bond (Highway 71 East Square
Redevelopment District No. 1 Project), Series 2005", is one of a series of bonds aggregating
Three Million Seven Hundred Twenty -Five Thousand Dollars ($3,725,000) (the "Series 2005
Bonds"). The Series 2005 Bonds are being issued for the purpose of financing the costs of
acquiring certain real property within the District (as defined below) and demolishing existing
structures thereon, and the construction of certain sidewalk and crosswalk improvements within
the District (the "Project"), and paying the costs of issuance of the Series 2005 Bonds.
The Series 2005 Bonds are issued under and are secured by and entitled to the protection
of a Trust Indenture dated as of April 15, 2005 (the "Indenture"), by and between the City and
the Trustee, which Indenture is available for inspection at the principal corporate trust office of
the Trustee. Reference is hereby made to the Indenture and to all indentures supplemental
thereto for the provisions, among others, with respect to the nature and extent of the security, the
rights, duties and obligations of the City, the Trustee and the owners of the Series 2005 Bonds,
and the terms upon which the Series 2005 Bonds are issued and secured.
The Series 2005 Bonds are issued pursuant to and in full compliance with the
Constitution and laws of the State of Arkansas, including particularly Amendment No. 78 to the
Constitution of Arkansas, as implemented by Act 1197 of 2001, codified as Arkansas Code
Annotated (2003 Supp.) §§14-168-301 et seq. (as from time to time amended, the "Act"), and
Ordinance No. 4684 of the City adopted March 15, 2005, which ordinance authorized the
execution and delivery of the Indenture and the issuance of the Series 2005 Bonds. In
accordance with the Act, the City has pledged all receipts from the ad valorem tax increment (as
defined in the Act, the "Tax Increment") relating to its Highway 71 East Square Redevelopment
District No. 1 in order to provide funds for the repayment of the Series 2005 Bonds.
The pledge of the receipts of the Tax Increment presently secure payment of the Series
2005 Bonds only, but such Tax Increment receipts may additionally be pledged to secure the
payment of Additional Bonds issued under the provisions of the Indenture. The Indenture
provides that the City may hereafter issue Additional Bonds from time to time under certain
terms and conditions contained in the Indenture and, if issued or incurred, such Additional Bonds
will rank on a parity of security with the Series 2005 Bonds and be equally and ratably secured
by and entitled to the protection of the Indenture.
The Series 2005 Bonds are not general obligations of the City, but are special obligations
secured by an irrevocable pledge of and lien on the Tax Increment receipts, as more particularly
described in the Indenture. In no event shall the Series 2005 Bonds constitute an indebtedness of
the City within the meaning of any constitutional or statutory limitation or a pledge of the faith
and credit of the City.
The holder of this Series 2005 Bond shall have no right to enforce the provisions of the
Indenture or to institute action to enforce the covenants therein, or to take any action with respect
to any event of default under the Indenture, or to institute, appear in or defend any suit or other
proceeding with respect thereto, except as provided in the Indenture. In certain events, on the
conditions, in the manner and with the effect set forth in the Indenture, the principal of all the
Series 2005 Bonds and Additional Bonds, if any, issued under the Indenture and then outstanding
may be declared and may become due and payable before the stated maturity thereof, together
10-108529.1 2
with accrued or accreted interest thereon. Modifications or alterations of the Indenture, or of any
indenture supplemental thereto, may be made only to the extent and in the circumstances
permitted by the Indenture.
The Series 2005 Bonds shall be redeemed prior to maturity on any date, in whole or in
part, by lot in such manner as the Trustee shall determine, at a redemption price equal to 100% of
the Accreted Value thereof as of the date of redemption, (i) from moneys in the Series 2005
Account of the Project Fund in excess of the amount needed to complete the Project, and (ii)
from the first $120,000 of proceeds realized by the City upon any sale of the real property
originally acquired with the proceeds of the Series 2005 Bonds.
The Series 2005 Bonds shall be redeemed prior to maturity on each February 1, in whole or
in part (in minimum $5,000 denominations), by lot in such manner as the Trustee shall determine, at
a redemption price equal to 100% of the Accreted Value thereof as of the date of redemption, to the
extent of Tax Increment receipts deposited in the Series 2005 Account of the Redemption Fund. On
a monthly basis, following any required transfers of Tax Increment receipts to satisfy deficiencies
in the Rebate Fund and to pay Trustee fees and expenses, the remaining balance of such Tax
Increment receipts shall be transferred to the various accounts of the Redemption Fund in
proportion to the outstanding principal amounts of the related series of Bonds.
On and after February 1, 2010, the Series 2005 Bonds shall be subject to redemption
prior to maturity at the option of the City, in whole or in part on any date (in minimum $5,000
denominations), by lot in such manner as the Trustee shall determine, from funds from any
source, at a redemption price equal to 100% of the Accreted Value thereof as of the date of
redemption.
Upon (i) the levy of additional millage by any taxing unit, which additional millage is
included within the District's "applicable ad valorem rate" (as defined in the Act) or (ii) any
determination that the Tax Increment is to be calculated by including any portion of the 25 mills
described in Amendment 74 to the Constitution of the State of Arkansas or any portion of the
disputed 4.5 mills claimed as part of the "debt service ad valorem rate" (as defined in the Act) by
the Fayetteville School District within the "applicable ad valorem rate," which determination is
evidenced by (a) an opinion of the Arkansas Attorney General, (b) a decision by an Arkansas court
of competent jurisdiction, (c) legislation enacted by the Arkansas General Assembly, or (d) an
amendment to the Constitution of the State of Arkansas, then the Series 2005 Bonds shall be subject
to redemption prior to maturity at the option of the City, in whole on any date, from funds from any
source, at a redemption price equal to 101% of the principal amount of the Outstanding Series 2005
Bonds plus the accreted interest thereon as of the date of redemption.
In selecting Series 2005 Bonds for redemption prior to maturity, in the case any
outstanding Series 2005 Bond is in a denomination greater than $5,000, each $5,000 of face
value of such Series 2005 Bond shall be treated as a separate Series 2005 Bond of the
denomination of $5,000.
In the event any of the Series 2005 Bonds or portions thereof are called for redemption,
notice thereof shall be given by the Trustee by first class mail to the registered owner of each
such Series 2005 Bond addressed to such registered owner at his registered address and placed in
10-108529.1 3
the mails not less than thirty (30) nor more than sixty (60) days prior to the date fixed for
redemption; provided, however, that failure to give such notice by mailing, or any defect therein,
shall not affect the validity of the proceedings for the redemption of any Series 2005 Bond with
respect to which no such failure or defect has occurred. Each notice shall identify the Series
2005 Bonds or portions thereof being called, and the date on which they shall be presented for
payment. After the date specified in such call notice, the Series 2005 Bond or Bonds so called
for redemption will cease to bear interest provided funds sufficient for their redemption have
been deposited with the Trustee, and, except for the purpose of payment, shall no longer be
protected by the Indenture and shall not be deemed to be outstanding under the provisions of the
Indenture.
This Series 2005 Bond may be transferred on the books of registration kept by the
Trustee by the registered owner or by his duly authorized attorney upon surrender hereof,
together with a written instrument of transfer duly executed by the registered owner or his duly
authorized attorney.
The Series 2005 Bonds are issuable as registered bonds without coupons in
denominations of $5,000 and integrals of $5,000 in excess thereof. Subject to the limitations and
upon payment of the charges provided in the Indenture, Series 2005 Bonds may be exchanged
for a like aggregate principal amount of Series 2005 Bonds of other authorized denominations.
No recourse shall be had for the payment of the principal of or premium, if any, or
interest on any of the Series 2005 Bonds or for any claim based thereon or upon any obligation,
covenant or agreement contained in the Series 2005 Bonds or the Indenture against any past,
present or future alderman, officer or employee of the City, or any successor, as such, either
directly or through the City or any successor of the City, under any rule of law or equity, statute
or constitution or by the enforcement of any assessment or penalty or otherwise, and all such
liability of any such alderman, officer or employee as such is hereby expressly waived and
released as a condition of and consideration for the issuance of any of the Series 2005 Bonds.
This Series 2005 Bond is issued with the intent that the laws of the State of Arkansas will
govern its construction.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and
things required to exist, happen and be performed precedent to and in the issuance of the Series
2005 Bonds do exist, have happened and have been performed in due time, form and manner as
required by law; that the indebtedness represented by the Series 2005 Bonds, together with all
obligations of the City, does not exceed any constitutional or statutory limitation; and that the
revenues pledged to the payment of the principal of and premium, if any, and interest on the
Series 2005 Bonds as the same become due and payable are expected to be sufficient in amount
for that purpose.
This Series 2005 Bond shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture until the Certificate of Authentication
hereon shall have been signed by the Trustee.
10-108529.1
(Form of Assignment)
ASSIGNMENT
FOR VALUE RECEIVED, , hereby sells, assigns, and
transfers unto , the within bond and all rights thereunder, and
hereby irrevocably constitutes and appoints
as attorney to transfer the within bond on the books kept for registration thereof with full power
of substitution in the premises.
DATE: , 20 .
Transferor
GUARANTEED BY:
NOTICE: Signature(s) must be guaranteed by an institution satisfactory to the Trustee or
other transfer agent.
IDHDI:M07%]
IN WITNESS WHEREOF, the City of Fayetteville, Arkansas has caused this Series 2005
Bond to be executed by its Mayor and City Clerk, thereunto duly authorized (by their manual or
facsimile signatures), and its corporate seal to be affixed or imprinted hereon, all as of the date
hereof shown above.
CITY OF FAYETTEVILLE, ARKANSAS
By:
ATTEST:
(Form of Trustee's Certificate)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This bond is one of the Series 2005 Bonds of the issue described in and issued under the
provisions of the within mentioned Indenture.
Attached hereto is the complete text of the opinion of Kutak Rock LLP, a signed original
of which is on file with the undersigned, delivered and dated the date of the original delivery of
and payment for the Series 2005 Bonds.
THE BANK OF FAYETTEVILLE, N.A.,
as Trustee
10-108529.1
V L PRELIMINARY OFFICIAL STATEMENT DATED MARCH 11, 2005
E N , .n
5 NEW ISSUE r �J ✓`^'�Q o i _� �M�
✓ `�`" � ��Wr , NOT RATED
8 BOOK -ENTRY ONLY on. y, ,. a, -1 —QS-
re lations, i S C�lJ1 ss
B F in the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions a assuming the
accuracy of certain representations and continuing compliance with certain covenants, interest on the Series 2005 Bonds is excluded from
gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax.
i 5 Under existing law, Bond Counsel is of the opinion that the Series 2005 Bonds and the interest thereon are exempt from allstate, county and
municipal taxes in the Stale ofArkansas. See the caption "TAX MATTERS" herein. t2 U
$3,735,000* `R 3t ? a , QO® �.dt 11aM,r e,
o t CITY OF FA �r , ARKANSAS
A o TAX INCREMENT INTEREST ACCRETION BONDS
o (HIGHWAY 71 EAST END REDEVELOPMENT DISTRICT NO. I PROJECT) AL 01 I
SERIES 2005 `�
Dated: April 19, 2005 Due: August 1, 2029
T c The Tax Increment Interest Accretion Bonds (Highway 71 East End Redevelopment District No. I Project), Series 2005 (the "Series 2005
Bonds"), are being issued by the City of Fayetteville, Arkansas (the "City") for the purpose of (i) financing the costs of acquisition of certain real
I N property within the City, the demolition of existing structures thereon, site preparation in connection therewith, and the construction of sidewalk
.. and crosswalk improvements, and (ii) paying certain expenses in connection with the issuance of the Series 2005 Bonds. See the captions
o g s "ESTIMATED SOURCES AND USES OF FUNDS" and "THE PROJECT" herein.
N N
N N
The Series 2005 Bonds are issuable only as fully registered bonds and, when issued, will be registered in the name of Cede & Co., as
F x nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal, premium, if any, and interest payments on
w the Series 2005 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2005 Bonds. Individual purchases of the
'o to Series 2005 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers
("Beneficial Owners") of Series 2005 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY
_ SYSTEM" herein.
In The Series 2005 Bonds shall accrete interest from their dated date at the rate of % per annum, compounded semiannually on each
$' February I and August 1, commencing August 1, 2005, as shown on Appendix B hereto. Such interest shall be payable only upon maturity
E v or earlier redemption of the Series 2005 Bonds. The principal of, premium, if any, and accreted interest on the Series 2005 Bonds shall be
v L payable upon surrender of the Series 2005 Bonds at the principal corporate trust office of (the "Trustee"). So
o y s long as DTC or its nominee is the registered owner of the Series 2005 Bonds, disbursement of such payments to DTC Participants is the
to responsibility of DTC, and the disbursement of such payments to Beneficial Owners is the responsibility of DTC Participants or Indirect
P ty P Y P ty P
a Participants, as more fully described herein.
6O
Pursuant to a Trust Indenture dated as of April 15, 2005 (the "Indenture"), between the City and the Trustee, the payment of the
g 0 principal of, premium, if any, and interest on the Series 2005 Bonds is secured by a pledge of the incremental ad valorem tax receipts (the
d _ n "Tax Increment") derived with respect to the real property within the City's Highway 71 East End Redevelopment District No. I (the
0 0.m "District"). See the caption "SECURITY FOR THE BONDS" herein. Assuming the satisfaction of a prescribed coverage test set forth in the
o Indenture, the City has reserved the right to incur additional indebtedness to be secured by the Tax Increment on a parity basis with the Series
" 2005 Bonds. See the caption "THE SERIES 2005 BONDS — Additional Bonds" herein. The Series 2005 Bonds are subject to optional and
c a o
� y mandatory redemption prior to maturity as more fully described herein under the caption "THE SERIES 2005 BONDS - Redemption."
V q�
3 The Series 2005 Bonds are special obligations of the City secured by and payable solely from the Tax Increment and moneys in
L the funds and accounts established under the Indenture. The Series 2005 Bonds do not constitute an indebtedness of the City within
the meaning of any constitutional or statutory debt limitation or restriction. The issuance of the Series 2005 Bonds shall not directly,
.5 o indirectly or contingently obligate the City to levy or pledge any taxes whatsoever or to make any appropriation for the payment of
g —'o the Series 2005 Bonds, except as described herein with respect to the Tax Increment.
. 3
The Series 2005 Bonds are offered when, as and if issued by the City and are subject to the final approving opinion of Kutak Rock LLP,
Little Rock, Arkansas, Bond Counsel. Certain matters will be passed upon for the City by its counsel, Kit Williams, Esq., City Attorney. It is
€ expected that the Series 2005 Bonds will be available for delivery in New York, New York, on or about April 19, 2005.
a � W
A CPE L
�4 d
Crews&Associates
Member Flrsl Secunlr Bancorp
IF O 5
v 3 The date of this Official Statement is March , 2005.
E
E � c
• Preliminary; subject to change.
a
FO '_,
CITY OF FAYETTEVILLE, ARKANSAS
Issuer
City Council
Dan Coody, Mayor
Kyle Cook
Robert Ferrell
Lioneld Jordan
Shirley Lucas
Don Marr
Robert Reynolds
Robert Rhoads
Brenda Thiel
Steve Davis, Finance & Internal Services Director
Sondra Smith, City Clerk
Kit Williams, City Attorney
, Arkansas
Trustee and Paying Agent
KUTAK ROCK LLP
Little Rock, Arkansas
Bond Counsel
CREWS & ASSOCIATES, INC.
Little Rock, Arkansas
Underwriter
No dealer, broker, salesman or other person has been authorized by the City or by Crews & Associates, Inc.
(the "Underwriter") to give any information or to make any representations, other than those contained herein; and,
if given or made, such other information or representations must not be relied upon as having been authorized by
either of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to
buy, nor shall there be any sale of any Series 2005 Bonds in any jurisdiction in which such offer is not authorized, or
in which the person making such offer, solicitation or sale is not qualified to do so, or to any person to whom it is
unlawful to make such offer, solicitation or sale. The information and expressions of opinion contained herein are
subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no change in the affairs of the City since
the date hereof.
THE SERIES 2005 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, NOR HAS THE TRUST INDENTURE BEEN QUALIFIED UNDER THE TRUST
INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON CERTAIN EXEMPTIONS FROM SUCH
REGISTRATION AND QUALIFICATION CONTAINED IN SUCH LAWS.
CERTAIN INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED FROM THE CITY, THE
DEPOSITORY TRUST COMPANY AND OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE.
THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN
ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE
FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS
TRANSACTION, BUT THE UNDERWRITER DOES NOT GUARANTY THE ACCURACY OR
COMPLETENESS OF SUCH INFORMATION.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2005 BONDS
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THIS OFFICIAL STATEMENT CONTAINS CERTAIN FORWARD -LOOKING STATEMENTS,
INCLUDING PROJECTIONS OF REAL PROPERTY VALUES AND INCREMENTAL AD VALOREM TAX
RECEIPTS ATTRIBUTABLE TO THE DISTRICT. POTENTIAL PURCHASERS ARE CAUTIONED THAT
FORWARD -LOOKING STATEMENTS ARE NOT GUARANTEES AND THAT ACTUAL RESULTS MAY
DIFFER MATERIALLY AND ADVERSELY FROM THOSE PROJECTED IN FORWARD -LOOKING
STATEMENTS.
TABLE OF CONTENTS
Introductory Statement
The Series 2005 Bonds
Security for the Bonds ................................................
RiskFactors................................................................
Book -Entry Only System ............................................
TheProject..................................................................
Estimated Sources and Uses of Funds ........................
Projected Tax Increment and Mandatory Redemptions
The City and the District .............................................
Definitions of Certain Terms ......................................
Summary of the Indenture ..........................................
Summary of the Continuing Disclosure Agreement ...
Underwriting...............................................................
TaxMatters.................................................................
LegalMatters..............................................................
Miscellaneous.............................................................
Accuracy and Completeness of Official Statement ....
Page
2
4
7
8
10
11
1
15
18
22
26
28
28
29
29
30
APPENDIX A - Form of Bond Counsel Opinion................................................................................................. A-1
APPENDIX B - Series 2005 Accretion Schedule................................................................................................. B -I
APPENDIX C - Feasibility Study of District....................................................................................................... C-1
APPENDIXD - Map of District........................................................................................................................... D-1
PRELIMINARY OFFICIAL STATEMENT
$3,735,000*
CITY OF FAYETTEVILLE, ARKANSAS
TAX INCREMENT INTEREST ACCRETION BONDS
(HIGHWAY 71 EAST END REDEVELOPMENT DISTRICT NO. 1 PROJECT)
SERIES 2005
INTRODUCTORY STATEMENT
The following introductory statement is subject in all respects to the more complete information set forth in
this Official Statement. All descriptions and summaries of documents hereinafter set forth are qualified in their
entirety by reference to each such document. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms under the caption "DEFINITIONS OF CERTAIN TERMS" herein.
This Official Statement, including the cover page and the Appendices hereto, is furnished in connection
with the offering of Tax Increment Interest Accretion Bonds (Highway 71 East End Redevelopment District No. I
Project), Series 2005, in the principal amount of $3,735,000• (the "Series 2005 Bonds"), by the City of Fayetteville,
Arkansas (the "City").
The City is a city of the first class organized and existing under the laws of the State of Arkansas (the
"State"). The City is authorized under Amendment 78 to the Constitution of the State ("Amendment 78") and
Arkansas Code Annotated (2003 Supp.) §§14-168-301 et seq. (as from time to time amended, the "Act"), to form
redevelopment districts and to issue and sell bonds for the purpose of financing projects to alleviate blight and
encourage economic development within such districts.
Pursuant to Ordinance No. 4608 of the City adopted August 17, 2004, as subsequently amended and
supplemented, the City has created Highway 71 East End Redevelopment District No. I (the "District"). The Series
2005 Bonds are to be issued by the City pursuant to Amendment 78, the Act and Ordinance No. ____,adopted and
approved on March , 2005 (the "Authorizing Ordinance"), for the purpose of (i) financing the costs of acquiring
certain real property within the District, demolishing existing buildings thereon, site preparation in connection
therewith, and certain sidewalk and crosswalk improvements throughout the District (the "Project"), and (ii) paying
the costs of issuing the Series 2005 Bonds. See the captions "ESTIMATED SOURCES AND USES OF FUNDS"
and 'THE PROJECT" herein.
The Series 2005 Bonds are not general obligations of the City, but are special obligations secured by and
payable solely from the moneys in the funds and accounts established under the Indenture (hereinafter defined) and
from certain ad valorem tax receipts (the "Tax Increment") attributable to the increase in assessed value of real
property within the District following its formation. See the captions "SECURITY FOR THE BONDS," "RISK
FACTORS," "PROJECTED TAX INCREMENT AND MANDATORY REDEMPTIONS" and "SUMMARY OF
THE INDENTURE" herein.
The faith and credit of the City are not pledged to the payment of the Series 2005 Bonds, and the
Series 2005 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or
statutory debt limitation or restriction. The issuance of the Series 2005 Bonds shall not directly, indirectly or
contingently obligate the City to levy or pledge any taxes whatsoever or to make any appropriation for the
payment of the Series 2005 Bonds, except as described herein with respect to the Tax Increment.
Additional Bonds may be issued on a parity of security with the Series 2005 Bonds under certain
circumstances set forth in the Indenture (hereinafter defined). The Series 2005 Bonds and any Additional Bonds are
herein collectively referred to as the "Bonds." See the caption "THE SERIES 2005 BONDS - Additional Bonds"
herein.
The Series 2005 Bonds are subject to mandatory redemption (i) from excess moneys in the Project Fund
following completion of the Project, (ii) from a portion of the proceeds realized upon the expected sale of the real
property originally acquired with proceeds of the Series 2005 Bonds following completion of the Project, and (iii)
from the Tax Increment. See the captions "THE SERIES 2005 BONDS — Redemption" and "PROJECTED TAX
INCREMENT AND MANDATORY REDEMPTIONS."
Preliminary; subject to change.
Pursuant to the provisions of a Continuing Disclosure Agreement dated as of the date of delivery of the
Series 2005 Bonds, by and between the City and the Trustee (the "Continuing Disclosure Agreement"), the City has
undertaken certain obligations with respect to providing ongoing disclosure of certain financial and operating data
concerning the City and the Tax Increment and of the occurrence of certain material events. See the caption
"SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT" herein.
This Official Statement contains brief descriptions or summaries of, among other matters, the City, the
District, the Series 2005 Bonds, the Tax Increment, the Continuing Disclosure Agreement, and the Trust Indenture
dated as of April 15, 2005 (the "Indenture"), by and between the City and ,
Arkansas, as trustee (the "Trustee"), pursuant to which the Series 2005 Bonds are issued and secured. Such
descriptions and information do not purport to be comprehensive or definitive. All references herein to the Indenture
and the Continuing Disclosure Agreement are qualified in their entirety by reference to each such document, and all
references to the Series 2005 Bonds are qualified in their entirety by reference to the definitive form thereof and the
information with respect thereto included in the Indenture. Copies of the Continuing Disclosure Agreement, the
Indenture, and the form of Series 2005 Bond included therein, are available from the City by writing to the attention
of the Finance and Internal Services Director, City of Fayetteville, City Administration Building, 113 West
Mountain, Fayetteville, Arkansas 72701 and, during the initial offering period only, from the Underwriter, Crews &
Associates, Inc., First Security Center, 521 President Clinton Avenue, Suite 800, Little Rock, Arkansas 72201.
Certain financial and operating data have been provided by the City from the audited records of the City and certain
demographic information has been obtained from other sources which are believed to be reliable.
THE SERIES 2005 BONDS
Description. The Series 2005 Bonds will be initially dated as of their date of delivery, and will accrete
interest from such date at the rate of % per annum, compounded semiannually on each February 1 and August
1, commencing August 1, 2005. The Series 2005 Bonds will mature, unless sooner redeemed, on August 1, 2029.
The Series 2005 Bonds are issuable only in the form of fully registered bonds and, when issued, will be
registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), New York,
New York, to which principal, premium, if any, and interest payments on the Series 2005 Bonds will be made so
long as Cede & Co. is the registered owner of the Series 2005 Bonds. Individual purchases of the Series 2005
Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual
purchasers (`Beneficial Owners") of Series 2005 Bonds will not receive physical delivery of bond certificates. See
the caption "BOOK -ENTRY ONLY SYSTEM" herein.
The principal of, premium, if any, and accreted interest on the Series 2005 Bonds shall be payable upon
surrender thereof at the principal corporate trust office of the Trustee. All such payments shall be valid and effectual
to satisfy and discharge the liability upon such Series 2005 Bond to the extent of the sum or sums so paid. So long
as DTC or its nominee is the registered owner of the Series 2005 Bonds, disbursement of such payments to DTC
Participants is the responsibility of DTC, and the disbursement of such payments to Beneficial Owners is the
responsibility of DTC Participants or Indirect Participants, as more fully described herein. Principal and accreted
interest will be payable only upon maturity or earlier redemption of the Series 2005 Bonds.
Redemption. (1) The Series 2005 Bonds shall be redeemed prior to maturity on any date, in whole or in
part (in minimum $5,000 denominations), by lot in such manner as the Trustee shall determine, at a redemption
price equal to 100% of the Accreted Value (as defined under the caption "DEFINITIONS OF CERTAIN TERMS"
herein) thereof as of the date of redemption, (i) from moneys in the Project Fund in excess of the amount needed to
complete the Project, and (ii) from the first $120,000 of proceeds realized by the City upon any sale of the real
,property originally acquired with the proceeds of the Series 2005 Bonds. While it is not expected that there will be
any excess moneys in the Project Fund following completion of the Project, it is anticipated that the real property
acquired with the proceeds of the Series 2005 Bonds will be conveyed by the City to a private developer for a price
of $300,000 following completion of the demolition and site preparation components of the Project and upon
satisfaction of certain other conditions set forth in the Redevelopment Agreement. See the caption "THE
PROJECT" herein.
(2) The Series 2005 Bonds shall be redeemed prior to maturity on each February 1, in whole or in part
(in minimum $5,000 denominations), by lot in such manner as the Trustee shall determine, at a redemption price
equal to 100% of the Accreted Value thereof as of the date of redemption, from the Tax Increment receipts on
deposit with the Trustee following the use of such Tax Increment receipts as are necessary (i) to pay any arbitrage
rebate due under Section 148(f) of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) to pay
Trustee and Paying Agent fees and expenses. See the caption "PROJECTED TAX INCREMENT AND
MANDATORY REDEMPTIONS" herein.
(3) On and after February 1, 2010, the Series 2005 Bonds are subject to redemption prior to maturity
at the option of the City, in whole or in part on any date (in minimum $5,000 denominations), by lot in such manner
as the Trustee shall determine, from funds from any source, at a redemption price equal to 100% of the Accreted
Value thereof as of the date of redemption.
(4) Upon (i) the levy of additional millage by any taxing unit, which additional millage is included
within the District's "applicable ad valorem rate" (as defined in the Act) or (ii) any determination that the Tax
Increment is to be calculated by including any portion of the 25 mills described in Amendment 74 to the
Constitution of the State of Arkansas or any portion of the disputed 4.5 mills claimed as part of the "debt service ad
valorem rate" (as defined in the Act) by the Fayetteville School District within the "applicable ad valorem rate,"
which determination is evidenced by (a) an opinion of the Arkansas Attorney General, (b) a decision by an Arkansas
court of competent jurisdiction, (c) legislation enacted by the Arkansas General Assembly, or (d) an amendment to
the Constitution of the State of Arkansas, then the Series 2005 Bonds shall be subject to redemption prior to
maturity at the option of the City, in whole on any date, from funds from any source, at a redemption price equal to
101% of the then outstanding principal amount of the Series 2005 Bonds plus the accreted interest thereon as of the
date of redemption. See the caption "SECURITY FOR THE BONDS — Tax Increment Generally — Determination
of Applicable Ad Valorem Rate" herein.
Partial Redemption of the Series 2005 Bonds. If less than all of the Series 2005 Bonds are called for
redemption, the particular Series 2005 Bonds or portions of Series 2005 Bonds to be redeemed shall be selected by
lot in such manner as the Trustee in its discretion may deem fair and appropriate. So long as DTC or its nominee is
the sole registered owner of the Series 2005 Bonds, the procedures established by DTC shall control with respect to
the selection of the particular Series 2005 Bonds to be redeemed.
Notice of Redemption. Notice of the call for any redemption, identifying the Series 2005 Bonds or portions
thereof being called and the date on which they shall be presented for payment, shall be mailed by the Trustee by
first class mail (or, so long as DTC or its nominee is the sole registered owner of the Series 2005 Bonds, by any
other means acceptable to DTC, including facsimile) to the registered owner of each such Series 2005 Bond
addressed to such registered owner at his registered address and mailed not less than thirty (30) nor more than sixty
(60) days prior to the date fixed for redemption; provided, however, that failure to give such notice by mailing, or
any defect therein, shall not affect the validity of any proceeding for the redemption of any Series 2005 Bond with
respect to which no such failure or defect has occurred.
Any notice mailed as provided above shall be conclusively presumed to have been duly given, whether or
not the registered owner receives the notice.
Additional Bonds. The City may issue from time to time one or more series of Additional Bonds for the
purpose of (i) financing Project Costs in connection with any additional project with respect to the District permitted
by the Act, (ii) refunding the Series 2005 Bonds or any series of Additional Bonds, in whole or in part, or (iii) any
combination thereof. Additional Bonds shall be secured equally and ratably with the Series 2005 Bonds and any
other series of Additional Bonds theretofore issued and then Outstanding, except insofar as any terms or conditions
of redemption or purchase established under the Indenture may afford additional benefit or security for the Bonds of
any particular series and except for the security afforded by any municipal bond insurance obtained with respect to
any particular series of Bonds. Before any Additional Bonds are authenticated, there shall be delivered to the
Trustee the items required by the Indenture for the issuance of Bonds, plus an Accountant's certificate stating that,
based upon necessary investigation, the Tax Increment receipts transferred to the Trustee for deposit to the Revenue
Fund during the most recent twelve (12) months were not less than 150% of the average Annual Debt Service on all
then Outstanding Bonds, plus the Additional Bonds then proposed to be issued. No Additional Bonds shall be
issued unless there is no default at the time of issuance under the Indenture.
Transfer or Exchange. The Series 2005 Bonds may be transferred on the books of registration kept by the
Trustee by the registered owner in person or by the owner's duly authorized attorney, upon surrender thereof,
together with a written instrument of transfer duly executed by the registered owner or the owner's duly authorized
attorney. Upon surrender for transfer of any Series 2005 Bond at the principal corporate office of the Trustee, the
City shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new
Series 2005 Bond or Bonds in the same aggregate principal amount and of any authorized denomination or
denominations.
Transfers of registration or exchanges of Series 2005 Bonds shall be without charge to the Holders of such
Series 2005 Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be
paid by the Holder of the Series 2005 Bond requesting such transfer or exchange as a condition precedent to the
exercise of such privilege.
The Trustee shall not be required to transfer or exchange any Series 2005 Bond after the mailing of notice
calling such Series 2005 Bond for redemption has been made, and prior to such redemption.
So long as DTC or its nominee is the sole registered owner of the Series 2005 Bonds, transfers of beneficial
interests in the Series 2005 Bonds shall be in accordance with the rules and procedures of DTC and its direct and
indirect participants. See the caption "BOOK -ENTRY ONLY SYSTEM" herein.
SECURITY FOR THE BONDS
General. The Series 2005 Bonds are not general obligations of the City, but are special obligations secured
by and payable solely from the moneys in the funds and accounts established under the Indenture and from certain
ad valorem tax receipts (the "Tax Increment") attributable to the increase in the assessed value of real property
within the District following its formation. See the captions "RISK FACTORS," "PROJECTED TAX
INCREMENT AND MANDATORY REDEMPTIONS" and "SUMMARY OF THE INDENTURE" herein.
The faith and credit of the City are not pledged to the payment of the Series 2005 Bonds, and the
Series 2005 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or
statutory debt limitation or restriction. The issuance of the Series 2005 Bonds shall not directly, indirectly or
contingently obligate the City to levy or pledge any taxes whatsoever or to make any appropriation for the
payment of the Series 2005 Bonds, except as described herein with respect to the Tax Increment.
Tax Increment Generally. The Tax Increment has been pledged to secure the payment of debt service on
the Series 2005 Bonds pursuant to Ordinance No. ___,duly adopted by the City Council of the City on March_,
2005 (the "Authorizing Ordinance").
Pursuant to the Act, the amount of the Tax Increment is to be calculated annually by multiplying the
"incremental value" of the District by the "applicable ad valorem rate." The "incremental value" of a
redevelopment district means the difference between (i) the assessed value of all real property within a district
subject to taxation as of the most recent assessment of property value after the formation of such district (the
"current value") and (ii) the assessed value of all real property within a district subject to taxation as of the most
recent assessment of property value preceding formation of such district (the "base value"). The "applicable ad
valorem rate" is the difference between (x) the total millage rate of all county, city, school or other local general
property taxes levied on all taxable property within a redevelopment district in a year (the "total ad valorem rate")
and (y) that portion of the total ad valorem rate pledged to the payment of debt service on bonds issued by any
taxing unit in which all or any part of such redevelopment district is located and approved by the voters prior to
January 1, 2001 (the "debt service ad valorem rate").
Determination of Incremental Value of District Real Property. The base value of the District real property
has been certified by the Washington County Assessor as $31,446,555. Projections of growth in the assessed value
of the real property within the District are set forth in the Feasibility Study of the Highway 71 East Square
Redevelopment District No. I (the "Feasibility Study") prepared by the Center for Business and Economic Research
of the Sam Walton College of Business at the University of Arkansas and attached hereto as Appendix C and under
the caption "PROJECTED TAX INCREMENT AND MANDATORY REDEMPTIONS" herein. SUCH
PROJECTIONS ARE BASED ON NUMEROUS FACTORS, SOME OF WHICH ARE DESCRIBED IN THE
FEASIBILITY STUDY. THERE CAN BE NO ASSURANCE THAT ACTUAL GROWTH IN ASSESSED
VALUE OF THE REAL PROPERTY WITHIN THE DISTRICT WILL APPROXIMATE SUCH PROJECTIONS.
See the caption "RISK FACTORS" herein.
Determination of Applicable Ad Valorem Rate. The Washington County Assessor has certified that the
total ad valorem rate within the District is presently 51.86 mills broken down as follows: 44.2 mills for the
Fayetteville School District (25.0 mills for maintenance and operations and 19.2 mills securing bond debt service);
5.86 mills for Washington County (4.75 mills for the general operations and 1.11 mills for the road fund); and 1.8
mills for the City of Fayetteville (1.0 mills for the Fayetteville Public Library, .4 mills for the Policemen's Pension
and Relief Fund and .4 mills for the Firemen's Pension and Relief Fund).
The Fayetteville School District millage securing bond debt service is the only portion of the total ad
valorem rate that should be considered as a debt service ad valorem rate. Amendment 78, effective as of January 1,
2001, states that "there shall be excluded from the division all ad valorem taxes for debt service approved by voters
in taxing unit prior to the effective date of this amendment." Forty-four mills were levied by the voters on
September 19, 2000 on behalf of the Fayetteville School District, immediately prior to the effective date of
Amendment 78. Twenty-five of those mills constitute the minimum levy required by Amendment 74 and by the
language of that September 19, 2000 ballot "to be used solely for maintenance and operation of schools ...." See the
discussion of Amendment 74 in the following paragraph. Although this required levy leaves only 19 potential mills
for debt service, the ballot also stated: "The total proposed school tax levy of 44.0 mills includes ... 23.7 mills for
debt service as a continuing levy ...." The current debt service levy for the School District pursuant to the County
levying ordinance is 19.2 mills but the School District claims it should receive the increment on 23.7 mills which
would include the increment on 4.5 mills levied by other governmental entities for other purposes. The City
disagrees with this interpretation.
In addition to the debt service ad valorem rate deduction, the Arkansas Attorney General has opined that
the 25 mills levied by the Fayetteville School District for maintenance and operation purposes should not be
included within the applicable ad valorem rate. Amendment 74 to the Constitution of the State of Arkansas
mandates a statewide 25 -mill minimum for the maintenance and operation of local schools. This minimum millage
is collected in the same manner as other property taxes, but the revenues generated therefrom are remitted by the
county collectors to the State Treasurer for distribution to the school districts. It is the Attorney General's position
that this 25 mills is levied by the State of Arkansas and is not a tax of a "taxing unit" within the meaning of the Act
and is thus not available for inclusion within the applicable ad valorem rate.
While an Attorney General's opinion is not binding on any Arkansas court or administrative body and
while the City disagrees with the Fayetteville School District's interpretation as to the calculation of the debt service
ad valorem rate, the City has nevertheless determined to structure the issuance of the Series 2005 Bonds by
assuming that only 3.16 mills may be available as the applicable ad valorem rate. This assumption is utilized in
the Feasibility Study attached hereto as Appendix C and in the tables set forth under the caption "PROJECTED
TAX RECEIPTS AND MANDATORY REDEMPTIONS" herein. The City has determined to legally challenge
both the Fayetteville School District's interpretation of the determination of the debt service ad valorem rate and the
Attorney General's opinion that the 25 mills for school operations and maintenance are not eligible for inclusion in
the applicable ad valorem rate. This challenge would likely take the form of a declaratory judgment action filed
against the Washington County Assessor and Collector. A favorable outcome could conceivably result in an
additional 29.5 mills (4.5 debt service mills + 25 operating mills) being included in the applicable ad valorem rate.
NO ASSURANCE CAN BE GIVEN AS TO THE PROBABILITY OF SUCCESS IN ANY SUCH LEGAL
CHALLENGE OR AS TO THE PRECISE REMEDY THAT WOULD GRANTED IN THE EVENT OF A
FAVORABLE OUTCOME. INVESTMENT DECISIONS WITH RESPECT TO THE SERIES 2005 BONDS
SHOULD BE MADE BASED ON THE ASSUMPTION THAT THE AVAILABLE AD VALOREM RATE WILL
BE 3.16 MILLS ONLY.
Ad Valorem Taxes Generally. Taxable real property is valued for tax purposes as of January 1 of each year
and only real property owned by a taxpayer on January I is assessed for that calendar year. The assessment process
is subject to rights of taxpayers to appeal and is not finalized until November of the year of assessment. Real
property is currently assessed in an amount equal to 20% of its value, but this percentage can be increased or
decreased by action of the Arkansas General Assembly. Following assessment, the total of the millage levied by
each taxing entity (municipalities, counties, school districts and community college districts) in which the property
is located is applied against the assessed value to determine the tax owed. The total taxes levied by all taxing
authorities are collected together by the county collector of the county in which the property is located in the
calendar year immediately following the year in which such taxes were levied. Taxes are due and payable between
the third Monday in February and October 10. Taxes not paid by October 10 are deemed delinquent and are subject
to a 10% penalty. Real estate as to which taxes are delinquent for two successive years is certified to the State Land
Commissioner, who offers the property for sale. The proceeds of such sale are apportioned among the taxing
authorities to which taxes are owed. Delinquent real property may be redeemed by the taxpayer within two years of
the delinquency. For an historical view of the assessed value of real property within the entire City, see the caption
"THE CITY — Economic Data" herein.
Effect of Amendment 59. Under Amendment 59 to the Constitution of the State of Arkansas, all real
property is subject to ad valorem taxation except for the following exempt categories: (i) public property used
exclusively for public purposes; (ii) churches used as such; (iii) cemeteries used exclusively as such; (iv) school
buildings; (v) libraries and grounds used exclusively for school purposes; and (vi) buildings and grounds used
exclusively for public charity. Amendment 59 also authorizes the General Assembly to exempt from taxation the
first $20,000 of value of a homestead of a taxpayer 65 years of age or older. Amendment 59 further provides that,
except as provided therein in connection with the transition period following a county -wide reassessment (see also
the discussion below regarding Amendment 79), (1) residential real property used solely as the principal place of
residence of the owner shall be assessed in accordance with its value as a residence, (2) land (but not improvements
thereon) used primarily for agricultural, pasture, timber, residential and commercial purposes shall be assessed upon
the basis of its value for such use, and (3) all other real property subject to taxation shall be assessed according to its
value. The Arkansas Supreme Court has held that the word "value," as used in a prior, substantially identical
constitutional provision, means "current market value".
Property owned by public utilities and common carriers and "used and/or held for use in the operation of
the company..." is assessed for tax purposes by the Tax Division of the Arkansas Public Service Commission.
Arkansas Code Annotated (1997 Rep!.) Section 26-26-1605 provides that the Tax Division "shall assess the property
at its true and full market or actual value" and that all utility property of a company, whether located within or
without the State of Arkansas, is to be valued as a unit. Annually, each public utility and common carrier is
required to file a report with the Tax Division. The Tax Division then reviews these reports, along with other
reports (such as reports to shareholders, the Federal Communications Commission, the Federal Energy Regulatory
Commission and the Interstate Commerce Commission), to determine the value of the property. Valuation is
currently made on the basis of a statutorily prescribed formula with consideration given to (i) original cost less
depreciation, replacement cost less depreciation or reconstruction cost less depreciation; (ii) market value of capital
stock and funded debt; and (iii) capitalization of income. Once the value of a company's property as a unit is
determined, the Tax Division removes the value allocable to out-of-state property and allocates the remainder
among Arkansas taxing units on the basis of relative value within each jurisdiction. The Tax Division certifies the
assessment to the county assessor who enters the assessment on the county assessment roll. County officials have
no authority to change such assessment.
All other real property is assessed by the elected assessor of each Arkansas county or other officials
designated by law.
Effect of Amendment 79. Amendment 79 to the Constitution of the State of Arkansas requires each county
to appraise all market value real estate normally assessed by the county assessor at its full and fair value at a
minimum of once every five years. The most recent county -wide reassessment in Washington County was
completed in 2004 and the next such reassessment is scheduled for completion in 2007. Following any such county
reappraisal, the county assessor is required to compare the assessed value of each parcel of real property reappraised
or reassessed to the prior year's assessed value. If the assessed value of a parcel increased, then the assessed value
must be adjusted as provided below. Subject to the special circumstances described in the second following
paragraph, if a parcel is not the homestead and principal place of residence ("homestead") of a taxpayer, then any
increase in the assessed value in the first year after reappraisal cannot be greater than 10% (or 5% if the parcel is the
taxpayer's homestead) of the assessed value for the previous year. For each year thereafter, the assessed value shall
increase by an additional 10% (or 5% if the parcel is the taxpayer's homestead) of the assessed value for the year
preceding the first reassessment resulting from reappraisal; however, the increase cannot exceed the assessed value
determined by the reappraisal prior to the adjustment mandated by Amendment 79. For property owned by public
utilities and common carriers, any annual increase in the assessed value cannot exceed more than 10% of the
assessed value for the previous year. The Amendment 79 limitations on increases in assessed value do not apply to
newly discovered real property, new construction or substantial improvements to real property.
If a homestead is purchased or constructed on or after January 1, 2001 by a disabled person or by a person
over the age of 65, then that parcel will be assessed based on the lower of the assessed value as of the date of
purchase or construction or a later assessed value. If a person is disabled or is at least 65 years of age and owns a
homestead on January 1, 2001, then the homestead will be assessed based on the lower of the assessed value on
January 1, 2001 or a later assessed value. When a person becomes disabled or reaches age 65 on or after January 1,
2001, that person's homestead should thereafter be assessed based on the lower of the assessed value on the person's
65i° birthday, on the date the person becomes disabled or a later assessed value. The provisions of this paragraph do
not apply to substantial improvements to real property. For real property described in the following paragraph, the
applicable date, in lieu of January 1, 2001, is January I of the year following completion of the adjustments to
assessed value described in the following paragraph.
If there has been no county -wide reappraisal and resulting reassessment of value of real property in a
county between January 1, 1986 and December 1, 2000, then the assessed value of real property within that county
is adjusted in a different manner from the process described above. In such case, the assessor compares the assessed
value of each parcel to the assessed value of the parcel for the previous year. If the assessed value of the parcel has
increased, then the assessed value of the parcel for the year in which the parcel is reappraised is adjusted by adding
one-third (1/3) of the increase to the assessed value for the year prior to reappraisal. An additional one-third (1/3) of
the increase is added in each of the next two years. The adjustment contemplated by this paragraph does not apply
to the property of public utilities and common carriers. No adjustment will be made for newly discovered real
property, new construction or substantial improvements to real property.
Millage Rollbacks Under Amendments 59 and 79. In addition to the provisions of Amendments 59 and 79
discussed above, other provisions of these constitutional amendments provide for rollbacks in millage rates in
certain specified circumstances. Amendment 59 provides that whenever a county -wide reassessment results in an
overall increase in assessed value of 10% or more within the county, the tax rate of each taxing unit on property
located in that county is to be adjusted as described in detail therein. The year in which the reassessment is
completed is designated as the "Base Year." The assessed valuation for the Base Year is based on the reassessment.
Amendment 79 requires that the rollback adjustments mandated by Amendment 59 be determined after adjustments
are made to the assessed value under Amendment 79 (as described above). The "rolled -back" tax rates applicable
to real property in the county are computed by (1) deducting from the total Base Year assessed value the assessed
value of newly -discovered real property and new construction and improvements to real property to arrive at the
reassessed value of previously assessed real property, (2) determining the tax rate necessary to produce from the
previously assessed real property (on the basis of the Base Year assessment) the same amount of revenues produced
from such property in the Base Year (on the basis of the last previous assessed value and the tax rate applicable to
collections in the Base Year), and (3) either (a) fixing the tax rate determined in (2) as the tax rate for the real
property, including newly discovered real property and new construction and improvements to real estate, or (b) if
the tax rate so fixed would produce less than 110% of the revenues from real property produced in the Base Year,
increasing the tax rate determined in (2) in an amount sufficient to produce 110% of such revenues. The enabling
legislation for Amendment 59 provides that the "rollback" computation described above is to be made separately for
each tax source or millage levy (in the case of school districts, this would require separate computations for
operation and maintenance millage and debt service millage) with the new tax rate for each millage levy to be
rounded up to the nearest 1/10 mill. Amendment 79 specifically provides that its rollback provisions shall not
reduce the level of the minimum 25 mill levy mandated by Amendment 74 for maintenance and operation of local
schools. Further, Amendment 78 provides that, after the effective date of any ordinance approving the project plan
for a redevelopment district, no increases in the assessed valuation of property within such redevelopment district
shall be taken into account in making the "rollback" calculation described above.
Future Constitutional and Legislative Changes. Numerous constitutional amendments and legislative acts
have been proposed and will continue to be proposed which would alter facets of ad valorem taxation in Arkansas
generally, and its application in connection with redevelopment districts specifically. Many of such amendments
and acts have been initiated in response to public school funding shortfalls in the State. There can be no assurance
given as to the impact of the future enactment of any such amendments or bills on the size of the Tax Increment.
See the caption "RISK FACTORS" herein.
RISK FACTORS
The following is a summary statement of certain risks to owners of the Series 2005 Bonds relating to timely
payment of the Accreted Value of the Series 2005 Bonds at maturity or upon redemption and to the market value of
the Series 2005 Bonds. This summary statement is intended to highlight certain risks and is not a complete
statement of all such risks. Reference is made to the other portions of this Official Statement and in particular to the
information under the captions "SECURITY FOR THE BONDS" and "PROJECTED TAX INCREMENT AND
MANDATORY REDEMPTIONS" herein for further details of the risks to owners of the Series 2005 Bonds.
Real Property Value Growth. The City's ability to pay the Accreted Value of the Series 2005 Bonds at
maturity or upon redemption prior to maturity is dependent on the growth in assessed valuation of the real property
within the District. See the captions "SECURITY FOR THE BONDS" and "PROJECTED TAX INCREMENT
AND MANDATORY REDEMPTIONS" herein. There are many factors beyond the control of the City which could
have a significant impact on the level of such growth. A number of events could occur which would have an
material adverse effect upon property values, and thus on the amount of Tax Increment receipts projected to be
collected to pay Debt Service on the Series 2005 Bonds, including, but not limited to: (i) damage to or the
destruction of significant components of real property within the District; (ii) a general economic downturn resulting
in business closing or contributing to an inability of property owners to pay ad valorem taxes; and (iii) the enactment
or approval of legislation or constitutional amendments which further limit the amount of annual increases in real
property values or further restrict millages which are to be included within the applicable ad valorem rate (as defined
in the Act).
Limited Obligation of City. The Series 2005 Bonds are not general obligations of the City, but are special
obligations secured by and payable solely from the Tax Increment receipts and moneys on deposit in the Funds and
Accounts established in the Indenture. There can be no assurance that Tax Increment receipts deposited to the
Revenue Fund will be available or sufficient in amount to pay the Accreted Value of the Series 2005 Bonds at
maturity or upon redemption prior to maturity. In the event there are insufficient Tax Increment receipts to pay all
of the Debt Service on the Series 2005 Bonds in a timely manner, the City has no obligation to utilize any other
moneys to pay such Debt Service.
Revision of State Property Tax System. The State of Arkansas' system of assessing and taxing real property
for purposes of local ad valorem taxation for support of local political subdivisions, including cities, counties, school
districts and community colleges, has been the subject in recent years of constitutional amendment, legislation and
litigation. Given the current debate over alternatives to remedy a perceived deficiency in the funding of Arkansas'
public schools, it is likely that the property tax system will continue to be the object of considerable controversy,
legal challenges and legislative action. Given this distinct possibility of additional legislation, constitutional
initiatives and referendums and litigation, there can be no assurance that Arkansas' system of assessing and taxing
real property will remain substantially unchanged. It is possible that such changes as do occur could materially and
adversely affect the amount of the Tax Increment. The approving opinion of Bond Counsel will be rendered based
on the law existing as of the date of issuance of the Series 2005 Bonds and in reliance upon general legal
presumptions in favor of the constitutionality of statutes and upon the holdings of existing case law.
No Investment Rating. The Series 2005 Bonds are not rated by a securities rating agency. The City has not
applied, and does not intend to apply, for any such rating. The absence of an investment rating may adversely affect
the marketability of the Series 2005 Bonds.
BOOK -ENTRY ONLY SYSTEM
The Series 2005 Bonds will be issued only as one fully registered Series 2005 Bond, in the name of Cede &
Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), as registered owner of all the
Series 2005 Bonds. The fully registered Series 2005 Bonds will be retained and immobilized in the custody of DTC.
DTC (or any successor securities depository) or its nominee for all purposes under the Indenture will be
considered by the City and the Trustee to be the owner or holder of the Series 2005 Bonds.
Owners of any book entry interests in the Series 2005 Bonds (the "book entry interest owners") described
below, will not receive or have the right to receive physical delivery of the Series 2005 Bonds, and will not be
considered by the City and the Trustee to be, and will not have any rights as, owners or holders of the Series 2005
Bonds under the bond proceedings and the Indenture except to the extent, if any, expressly provided thereunder.
CERTAIN INFORMATION REGARDING DTC AND DIRECT PARTICIPANTS IS SET FORTH
BELOW. THIS INFORMATION HAS BEEN PROVIDED BY DTC, THE CITY, THE UNDERWRITER AND
BOND COUNSEL ASSUME NO RESPONSIBILITY FOR THE ACCURACY OF SUCH STATEMENTS.
DTC, the world's largest depository, is a limited -purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code,
and a "blearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934. DTC holds and provides asset servicing for over two million issues of U.S. and non-U.S. equity issues,
corporate and municipal debt issues and money market instruments from over 85 countries that DTC's participants
("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants
of sales and other securities transactions in deposited securities, through electronic computerized book -entry
transfers and pledges among Direct Participants' accounts. This eliminates the need for physical movement of
securities certificates. -Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The
Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants
of DTC and by Members of the National Securities Clearing Corporation, Government Securities Clearing
Corporation, NIBS Clearing Corporation and Emerging Markets Clearing Corporation (NSCC, GSCC, MBSCC and
EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock
Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available
to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing
corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The DTC Rules applicable to its Direct and Indirect Participants are on file with
the Securities and Exchange Commission. More information about DTC can be found at www.dtc.com.
Purchases of Series 2005 Bonds under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Series 2005 Bonds on DTC's records. The ownership interest of each actual
purchaser of each Series 2005 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but
Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Series 2005 Bonds are to be accomplished by
entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in Series 2005 Bonds, except in the event
that use of the Book -Entry System for the Series 2005 Bonds is discontinued.
To facilitate subsequent transfers, all Series 2005 Bonds deposited by Direct Participants with DTC are
registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an
authorized representative of DTC. The deposit of Series 2005 Bonds with DTC and their registration in the name of
Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Series 2005 Bonds, DTC's records reflect only the identity of the Direct Participants
to whose accounts such Series 2005 Bonds are credited, which may or may not be the Beneficial Owners. The
Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to
time. Redemption notices shall be sent to DTC. If less than all of the Series 2005 Bonds in a maturity are to be
redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such
maturity to be redeemed.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Series
2005 Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual
procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the Record Date. The Omnibus
Proxy will assign Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series
2005 Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy).
Payment of debt service and redemption proceeds with respect to the Series 2005 Bonds will be made to
Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is
to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the
City or the Trustee on payable date in accordance with their respective holdings shown on DTC's records.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices,
as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participant and not of DTC, the Trustee or the City, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of redemption proceeds and debt service to
Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the
responsibility of the City or the Trustee, disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of
Direct and Indirect Participants.
BENEFICIAL OWNERS SHOULD CONSULT WITH THE DIRECT PARTICIPANTS OR INDIRECT
PARTICIPANTS FROM WHOM THEY PURCHASE A BOOK ENTRY INTEREST TO OBTAIN
INFORMATION CONCERNING THE SYSTEM MAINTAINED BY SUCH DIRECT PARTICIPANTS OR
INDIRECT PARTICIPANTS TO RECORD SUCH INTERESTS, TO MAKE PAYMENTS, TO FORWARD
NOTICES OF REDEMPTION AND OF OTHER INFORMATION.
THE CITY AND THE TRUSTEE HAVE NO RESPONSIBILITY OR LIABILITY FOR ANY ASPECTS
OF THE RECORDS OR NOTICES RELATING TO, OR PAYMENTS MADE ON ACCOUNT OF, BOOK
ENTRY INTEREST OWNERSHIP, OR FOR MAINTAINING, SUPERVISING OR REVIEWING ANY
RECORDS RELATING TO THAT OWNERSHIP.
The Trustee and the City, so long as a book entry method of recording and transferring interest in the Series
2005 Bonds is used, will send any notice of redemption or of any Indenture amendment or supplement or other
notices to Bondholders under the Indenture only to DTC (or any successor securities depository) or its nominee.
Any failure of DTC to advise any Direct Participants, or of any Direct Participants or Indirect Participants to notify
any Beneficial Owner, of any such notice and its content or effect will not affect the validity of the redemption of
the Series 2005 Bonds called for redemption, the Indenture amendment or supplement, or any other action premised
on notice given under the Indenture.
The City and the Trustee cannot and do not give any assurances that DTC, Direct Participants, Indirect
Participants or others will distribute payments of debt service on the Series 2005 Bonds made to DTC or its nominee
as the registered owner of the Series 2005 Bonds, or any redemption or other notices, to the Beneficial Owners, or
that they will do so on a timely basis, or that DTC will serve and act in a manner described in this Official
Statement.
DTC may discontinue providing its services as securities depository with respect to the Series 2005 Bonds
at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a
successor securities depository is not obtained, bond certificates are required to be printed and delivered.
In addition, the City may decide to discontinue use of the system of book -entry transfers through DTC (or a
successor securities depository). In that event, bond certificates will be printed and delivered.
THE PROJECT
The proposed Project consists of the acquisition of four parcels of real property located within the District
in the downtown area of the City, the demolition of the majority of the existing structures thereon and site
preparation for subsequent development. In addition, it is anticipated that certain sidewalk and crosswalk
improvements will be funded throughout the District utilizing certain portions of the sale proceeds described below.
In view of the current conditions existing with respect to the property to be acquired, particularly the buildings
previously operated as the Mountain Inn, the City believes that the completion of the Project will alleviate blight and
encourage economic development within the District.
The total cost of the Project is expected to be approximately $3.68 million. $2.613 million of this amount
is the known acquisition cost of the real property, $887,000 is the estimate that has been developed by the City as
the cost of demolishing the existing buildings and clearing and preparing the site so as to make it available for
redevelopment, and the remaining $180,000 is the estimated cost of the sidewalk and crosswalk improvements. The
present Project schedule anticipates property acquisition on April 20, 2005, commencement of demolition on or
about June 1, 2005, and completion (except for the sidewalk and crosswalk improvements) in the third quarter of
2005. In the event the proceeds of the Series 2005 Bonds are insufficient to provide for the acquisition, demolition
and site preparation costs of the Project in full, the deficiency is expected to be funded by the Developer (defined
below).
The City has had numerous discussions with the principals of East Square Development, LLC (the
"Developer") concerning plans by the Developer to acquire the cleared real property upon completion of the Project
and to construct a $19 million hotel/meeting place/condominium/parking deck development (the "Development") on
such site. An agreement dated March 15, 2005 (the "Redevelopment Agreement"), has been entered into by and
between the City and the primary principals of the Developer setting forth the purchase price ($300,000) and other
terms and conditions with respect to any future conveyance of the Project real property to the Developer. In the
Redevelopment Agreement, the Developer principals have covenanted to cause the construction of a Development
having substantially the following components: (i) approximately 144 room, full service hotel; (ii) approximately 18
condominiums; (iii) approximately 12,000 square feet of conference/meeting space; (iv) approximately 300 space
multistory parking deck; and (v) restaurants, small retail shops, day spa and a rooftop botanical garden. The
Developer principals have agreed to cause the purchase of the Project real property from the City upon the
expenditure of $887,000 of the proceeds of the Series 2005 Bonds for demolition and site preparation purposes,
whether or not such demolition and site preparation can be completed at that level of expenditure. The
Redevelopment Agreement requires engineering and architectural contracts with respect to the Development to be in
place by the end of 2005. A construction contract shall be entered into by June 1, 2006, and the Development shall
be completed and ready for occupation no later than September 1, 2007. All requirements for completion dates are
subject to force majeure and may be extended for good cause by the City Council. Upon the failure of the
Developer to meet the required dates for entry into engineering, architectural and construction contracts, the City's
remedy is the right to repurchase the Project real property for $10,000. Failure to complete the Development by
September 1, 2007 results in liquidated damages of $834.73 per day until the Development is opened for business
(not to exceed $300,504).
Completion and occupancy of the Development is presently expected to occur in the third quarter of 2006.
It should be noted that the Feasibility Study attached hereto as Appendix C assumes that the real property
components of the Development will first be assessed in 2007 and will contribute to the Tax Increment in 2008.
Any failure or delay in completion of the Development will have a negative impact on the amount of the Tax
Increment available to redeem the Series 2005 Bonds.
$180,000 of the proceeds received by the City upon the sale of the Project real property to the Developer
will be utilized to construct various sidewalk and crosswalk improvements throughout the District. The remaining
$120,000 of sale proceeds will be utilized to redeem a portion of the Series 2005 Bonds as described under the
caption "THE SERIES 2005 BONDS —Redemption" herein.
10
0
ESTIMATED SOURCES AND USES OF FUNDS
The proceeds of the Series 2005 Bonds are expected to be used as follows:
Sources of Funds'I
Series 2005 Bond Proceeds $3.735,000
Total Sources: $3.735.000
Uses of Funds'l
Deposit to Project Fund $3,500,000
Costs of Issuance and Underwriter's Discount 233,400
Contingency 1.600
Total Uses: $3.735.000
(1) Preliminary; subject to change.
PROJECTED TAX INCREMENT AND MANDATORY REDEMPTIONS
The following table shows the projected Tax Increment during the next 25 years at varying levels and the
corresponding mandatory redemptions of the Series 2005 Bonds at each such level. The Series 2005 Bonds are
subject to mandatory redemption prior to maturity on each February 1, in whole or in part (in minimum $5,000
denominations), by lot in such manner as the Trustee shall determine, at a redemption price equal to I00% of the
Accreted Value thereof as of the date of redemption, from Tax Increment receipts on deposit with the Trustee
following the transfer of any amounts necessary (i) to pay any arbitrage rebate due under Section 148(f) of the
Internal Revenue Code of 1986, as amended (the "Code"), and (ii) to pay Trustee and Paying Agent fees and
expenses.
The amount of the Tax Increment and Series 2005 Bond redemptions shown in the table immediately
below are based on the projections set forth in the Feasibility Study of the District attached as Appendix C hereto.
[THE REMAINDER OF THIS PAGE INTENTIONALLY BLANK]
11
TABLE I
ASSESSED VALUATION GROWTH AS SET FORTH IN THE FEASIBILITY STUDY
Outstanding Series 2005 Series 2005 Bond
Principal and Accreted Projected Tax Series 2005 Bond Principal
Date Interest Prior to Increment Principal Outstanding After
(February 1)t') Redemption(2) Receipts°) Redeemed Redemption
2006
$3,927,409
$ 131,375
$ 120,000
$ 3,615,000
2007
4,052,322
33,724
30,000
3,585,000
2008
4,284,153
81,971
70,000
3,515,000
2009
4,477,971
114,685
90,000
3,425,000
2010
4,651,538
145,574
105,000
3,320,000
2011
4,806,780
172,371
120,000
3,200,000
2012
4,939,082
202,262
130,000
3,070,000
2013
5,051,435
235,623
145,000
2,925,000
2014
5,130,768
272,908
155,000
2,770,000
2015
5,179,841
314,566
170,000
2,600,000
2016
5,183,106
361,175
180,000
2,420,000
2017
5,142,949
413,309
195,000
2,225,000
2018
5,040,888
471,703
205,000
2,020,000
2019
4,878,749
537,148
225,000
1,795,000
2020
4,621,699
610,539
235,000
1,560,000
2021
4,281,954
692,888
255,000
1,305,000
2022
3,818,634
785,345
265,000
1,040,000
2023
3,244,225
889,211
285,000
755,000
2024
2,510,757
1,005,962
305,000
450,000
2025
1,595,329
1,137,386
320,000
130,000
2026
491,316
1,285,302
130,000
-0-
2027
-0-
1,451,879
--
2028
1,639,735
--
2029
1.851.558
—
") The Series 2005 Bonds are subject to mandatory redemption from Tax Increment receipts on each
February 1. See the caption "THE SERIES 2005 Bonds — Redemption" herein.
(2) Assuming for the purposes of this Preliminary Official Statement a coupon rate on the Series 2005 Bonds
of 6.50% per annum.
(3) Assuming (1) assessed valuation growth as set forth m the Feasibility Study attached hereto as Appendix C,
(2) 3.16 mills of ad valorem taxes are available to pay debt service on the Series 2005 Bonds, and (3)
$120,000 of proceeds available from the sale of real property to the Developer. See the captions
"SECURITY FOR THE BONDS — Tar Increment" and "THE PROJECT" herein.
12
TABLE II
ASSESSED VALUATION GROWTH AT 2000-2004 MEDIAN RATE
Outstanding Series 2005 Series 2005 Bond
Principal and Accreted Projected Tax Series 2005 Bond Principal
Date Interest Prior to Increment Principal Outstanding After
(February 1)1') Redemption Receipts (3) Redeemed Redemption
2006
$3,927,409
$ 131,375
$ 120,000
$ 3,615,000
2007
4,052,322
33,724
30,000
3,585,000
2008
4,284,153
81,971
70,000
3,515,000
2009
4,477,971
114,685
90,000
3,425,000
2010
4,651,538
145,574
105,000
3,320,000
2011
4,806,780
167,398
120,000
3,200,000
2012
4,939,082
191,167
120,000
3,080,000
2013
5,067,889
217,054
135,000
2,945,000
2014
5,165,850
245,247
140,000
2,805,000
2015
5,245,290
275,953
145,000
2,660,000
2016
5,302,716
309,395
155,000
2,505,000
2017
5,323,590
345,815
165,000
2,340,000
2018
5,301,428
385,482
170,000
2,170,000
2019
5,241,033
428,682
175,000
1,995,000
2020
5,136,652
475,732
185,000
1,810,000
2021
4,968,164
526,974
190,000
1,620,000
2022
4,740,373
582,781
200,000
1,420,000
2023
4,429,615
643,561
205,000
1,215,000
2024
4,040,490
709,756
215,000
1,000,000
2025
3,545,176
781,849
220,000
780,000
2026
2,947,899
860,366
230,000
550,000
2027
2,215,954
945,878
235,000
315,000
2028
1,352,972
1,039,010
240,000
75,000
2029
343,415
1.140,440
75.000
-0-
Totals
(1) The Series 2005 Bonds are subject to mandatory redemption from Tax Increment receipts on each
February 1. See the caption "THE SERIES 2005 Bonds — Redemption" herein.
a) •Assuming for the purposes of this Preliminary Official Statement a coupon rate on the Series 2005 Bonds
of 6.50% per annum.
(3) Assuming (1) assessed valuation growth for 2005 through 2009 as set forth in the Feasibility Study
attached hereto as Appendix C and thereafter at the rate of 8.91% (the median rate of growth for real
property within the District from 2000-2004), (2) 3.16 mills of ad valorem taxes are available to pay debt
service on the Series 2005 Bonds, and (3) $120,000 of proceeds available from the sale of real property to
the Developer. See the captions "SECURITY FOR THE BONDS — Tax Increment' and "THE PROJECT"
herein.
13
TABLE III
ASSESSED VALUATION GROWTH AT 1996-2000 MEDIAN RATE
Outstanding Series 2005
Series 2005 Bond
Principal and Accreted Projected Tax
Series 2005 Bond Principal
Date Interest Prior to Increment
Principal Outstanding After
(February 1)111 Redemption[) Receipts 131
Redeemed Redemption
2006
$3,927,409
S 131,375
$ 120,000
$ 3,615,000
2007
4,052,322
33,724
30,000
3,585,000
2008
4,284,153
81,971
70,000
3,515,000
2009
4,477,971
114,685
90,000
3,425,000
2010
4,651,538
145,574
105,000
3,320,000
2011
4,806,780
161,544
115,000
3,205,000
2012
4,946,800
178,556
115,000
3,090,000
2013
5,084,343
196,677
120,000
2,970,000
2014
5,209,703
215,979
120,000
2,850,000
2015
5,329,439
236,540
130,000
2,720,000
2016
5,422,327
258,441
130,000
2,590,000
2017
5,504,231
281,770
130,000
2,460,000
2018
5,573,296
306,621
135,000
2,325,000
2019
5,615,392
333,091
140,000
2,185,000
2020
5,625,857
361,288
140,000
2,045,000
2021
5,613,202
391,323
140,000
1,905,000
2022
5,574,327
423,316
145,000
1,760,000
2023
5,490,227
457,395
145,000
1,615,000
2024
5,370,692
493,697
150,000
1,465,000
2025
5,193,683
532,365
150,000
1,315,000
2026
4,969,855
573,554
150,000
1,165,000
2027
4,693,794
617,429
155,000
1,010,000
2028
4,338,100
664,164
155,000
855,000
2029
3,914,934
713.946
155.000
700,0001"1
Totals
(1) The Series 2005 Bonds are subject to mandatory redemption from Tax Increment receipts on each
February 1. See the caption "THE SERIES 2005 Bonds —Redemption" herein.
(2) Assuming for the purposes of this Preliminary Official Statement a coupon rate on the Series 2005 Bonds
of 6.50% per annum.
(3)
Assuming (1) assessed valuation growth for 2005 through 2009 as set forth in the Feasibility Study
attached hereto as Appendix C and thereafter at the rate of 6.52% (the median rate of growth for real
property within the District from 1996-2000), (2) 3.16 mills of ad valorem taxes are available to pay debt
service on the Series 2005 Bonds, , and (3) $120,000 of proceeds available from the sale of real property to
the Developer. See the captions "SECURITY FOR THE BONDS — Tax Increment" and "THE PROJECT"
herein.
(4) Under this scenario, it is projected that there would remain $700,000 in principal amount of Series 2005
Bonds outstanding at maturity having a total Accreted Value of $3,309,378.
THE PROJECTED TAX INCREMENT AND MANDATORY REDEMPTION TABLES SET FORTH ABOVE
ARE BASED ON THE PROJECTIONS FOR THE DISTRICT'S ASSESSED PROPERTY VALUE GROWTH (1)
SET FORTH IN THE FEASIBILITY STUDY ATTACHED AS APPENDIX C HERETO OR (2) UTILIZING A
COMBINATION OF THE PROJECTIONS IN THE FEASIBILITY STUDY AND HISTORICAL MEDIAN
GROWTH RATES. THE ACTUAL AMOUNT OF THE TAX INCREMENT AND CORRESPONDING
REDEMPTIONS WILL DEPEND ON NUMEROUS FACTORS, AND THERE CAN BE NO ASSURANCE
GIVEN THAT THE TAX INCREMENT AVAILABLE TO REDEEM SERIES 2005 BONDS WILL
APPROXIMATE SUCH PROJECTIONS.
14
I
THE CITY AND THE DISTRICT
General The City is a city of the first class organized and existing under the laws of the State of Arkansas.
The City is the seat of government of Washington County (the "County") and is the fourth largest city in the State.
The City is located in the Metropolitan Statistical Area of Fayetteville/Springdale/Rogers (the "MSA"), which
includes all of Washington and Benton Counties in the northwest comer of the State and is approximately 185 miles
northwest of Little Rock, Arkansas, 110 miles east of Tulsa, Oklahoma, and 210 miles south of Kansas City,
Missouri.
The City is served by U.S. Interstate 540, U.S. Highways 62 and 71, and State Highways 16, 45, 112, 156,
180 and 265. The Burlington Northern Railroad has several lines running through the City, and a general aviation
airport with a 6,006 -foot runway is available for limited commuter travel. The Northwest Arkansas Regional
Airport is located approximately 40 minutes from downtown Fayetteville and provides daily flights to numerous
venues.
Government. The City currently operates under the Mayor -Council form of government pursuant to which
a mayor, city attorney, city clerk and eight aldermen are elected, two from each of the City's four wards. The
mayor, city attorney and city clerk are full-time positions elected to four year terms. Aldermen also serve four year
terms.
The City's elected officials and the dates on which their respective terms expire are as follows:
Name
Office
Term Expires
Dan Coody
Mayor
12/31/08
Kit Williams
City Attorney
12131/06
Sondra Smith
City Clerk
12/31/08
Kyle Cook
Alderman
12/31/06
Robert Ferrell
Alderman
12/31/08
Lioneld Jordan
Alderman
12/31/08
Shirley Lucas
Alderman
12/31/06
Don Marr
Alderman
12/31/08
Robert Reynolds
Alderman
12/31/06
Robert Rhoads
Alderman
12/31/06
Brenda Thiel
Alderman
12/31/08
Population. The following is a table of population changes for the City, the MSA and the State of
Arkansas, according to the United States Census Bureau:
City of
State of
Year
Fayetteville
MSA
Arkansas
1960
20,274
92,069
1,786,272
1970
30,729
127,846
1,923,322
1980
36,608
178,609
2,286,435
1990
42,099
210,908
2,350,624
2000
58,047
311,121
2,673,400
15
Economic Data. Per capita personal income figures for the MSA and the State of Arkansas are as follows:
State of
Year
MSA
Arkansas
1992
$18,260
$16,425
1993
18,765
16,995
1994
19,590
17,750
1995
20,193
18,546
1996
20,870
19,442
1997
21,586
20,228
1998
22,893
21,256
1999
24,213
22,223
2000
23,316
21,995
2001
24,585
22,750
2002
24,788
23,556
Source: Bureau of Economic Analysis.
Retail sales figures for the MSA and the State are as follows:
MSA
State of
MSA as % of
Year
Arkansas
State of Arkansas
1993
$1,880,105,000
$16,997,721,000
11.06%
1994
2,217,229,000
19,090,516,000
11.61
1995
2,486,425,000
20,998,923,000
11.84
1996
2,692,554,000
22,053,022,000
12.21
1997
2,845,968,000
22,872,236,000
12.44
1998
3,018,896,000
23,944,647,000
12.61
1999*
n/a
n/a
n/a
2000
3,526,791,000
28,488,033,000
12.38
2001
3,806,422,000
29,652,693,000
12.84
2002
3,841,326,000
29,269,775,000
13.12
2003
3,968,812,000
29,920,716,000.
13.26
2004
4,470,048,000
31,463,983,000
14.21
* Methodology changed to calendar year basis. No reliable information is available for 1999.
Source: Sales and Marketing Management Survey of Buyer Power.
The following table shows the total assessed value of non -utility real and personal property within the City
for the years indicated:
Year
Real Property
Personal Property
Total
1994
$245,093,513
$ 86,322,277
$331,415,790
1995
340,593,452
101,274,620
441,868,072
1996
359,369,202
113,157,365
472,526,567
1997
382,798,143
120,064,627
502,862,770
1998
401,001,338
127,575,096
528,576,434
1999
413,648,415
137,404,499
551,052,914
2000
432,951,171
145,147,891
578,099,062
2001
486,853,822
155,794,579
642,648,401
2002
541,004,690
158,688,783
699,693,473
2003
565,846,525
167,638,657
733,485,182
2004
649,361,820
183,102,702
832,464,522
Source: Washington County Tax Assessor's Office. The assessed value represents 20% of the appraised value of
property.
16
•
Building permits issued by the City' 1 are shown below for the years indicated:
2000
2001
2002 2003t�1
2004
Residential Building Permits
361
339
328 735
755
Commercial Building Permits
37
38
35 31
29
Value of All Building Permits
$121,887,263
$85,262,302
$100,809,486 $179,007,987
$164,695,359
(1) Does not include building activity of the University of Arkansas, school permits and additions/alterations to existing structures.
(2) Increase largely due to the permitting of a significant number of multifamily developments as well as an acceleration of permit
requests in advance of the imposition of impact fees by the City.
Source: City of Fayetteville.
Unemployment figures for the MSA and the State of Arkansas, according to the U.S. Bureau of Labor
Statistics, are as follows:
Year
MSA
State of Arkansas
1994
2.4%
5.3%
1995
2.4
4.9
1996
2.9
5.4
1997
3.0
5.3
1998
3.2
5.5
1999
2.4
4.5
2000
2.1
4.4
2001
1.7
5.1
2002
2.4
5.4
2003
3.0
6.3
2004
4.0
5.6
Employment and Industry. The principal campus of the University of Arkansas is located in the City and
had total enrollment for the Spring semester of 2005 of approximately 16,100. For the 2004-05 fiscal year ending
June 30, 2005, the University has an operating budget in excess of $217 million, which does not include the
agricultural experimentation station or other associated operations. On the Fayetteville campus, the University
employs approximately 2,450 faculty, administrative, secretarial, clerical and maintenance personnel in both full-
time and part-time positions, making the University the largest employer in the City.
Other major employers in the City, their products or services and approximate number of employees are set
forth below:
Employer
Product or Service
Employee Range
Pinnacle Foods, International
Frozen Dinners
1,000-2,499
Superior Industries
Cast Aluminum Wheels
1,000-2,499
Washington Regional Medical Center
Medical
1,000-2,499
Northwest Arkansas Mall
Retail (all stores)
1,000-2,499
Tyson Foods
Food Products
800-1,599
Fayetteville School District
Education
500-999
City of Fayetteville
Government
300.499
Arkansas Western Gas Co.
Utilities
300-499
Ayrshire Electronics
Manufacturing
300-499
Hanna's
Potpourri, Soup & Candles
300-499
McClinton Anchor Company
Limestone & Hot Mix
300-499
Veteran's Admin. Medical Center
Medical
300-499
Wal-Mart Supercenter
Retail
300-499
Washington County Government
Government
300-499
Source: Fayetteville Chamber of Commerce.
17
The District Highway 71 East Square Redevelopment District No. I (the "District") was created pursuant
to Amendment 78 and the Act by Ordinance No. 4608 of the City Council adopted on August 17, 2004, as amended
by Ordinance No. 4662 of the City adopted on December 28, 2004. The District's geographical boundaries were
expanded to their present location by Ordinance No. 4673 adopted on January 25, 2005 and are shown on the
District map attached hereto as Exhibit D. The District encompasses approximately 360.38 acres containing 1,111
separate parcels. The base value of the District real property for 2004 has been certified by the Washington County
Assessor as $31,446,555. Projections of growth in the assessed value of the real property within the District are set
forth in the Feasibility Study of the Highway 71 East Square Redevelopment District No. I (the "Feasibility Study")
prepared by the Center for Business and Economic Research of the Sam Walton College of Business at the
University of Arkansas and attached hereto as Appendix C and under the caption "PROJECTED TAX
INCREMENT AND MANDATORY REDEMPTIONS" herein. SUCH PROJECTIONS ARE BASED ON
NUMEROUS FACTORS, SOME OF WHICH ARE DESCRIBED IN THE FEASIBILITY STUDY. THERE CAN
BE NO ASSURANCE THAT ACTUAL GROWTH IN ASSESSED VALUE OF THE REAL PROPERTY
WITHIN THE DISTRICT WILL APPROXIMATE SUCH PROJECTIONS. See the caption "RISK FACTORS"
herein.
A project plan (the "Project Plan") for the District was adopted by the City pursuant to Ordinance No. 4646
adopted on December 7, 2004. The Project Plan was subsequently amended pursuant to Ordinance No. 4663
adopted on December 28, 2004. The Project Plan is designed to assist the City in the removal of designated blight
within the District and to encourage the commercial and residential redevelopment of real property within the
District, thereby preventing the spread of blighted, deteriorated and deteriorating areas and discouraging the loss of
commerce, industry and employment.
The "catalyst" development in the District to be assisted by the completion of the Project is the
redevelopment of certain blighted property on the eastern side of the City's historic downtown. The primary portion
of this property is the structure previously operated as the Mountain Inn. East Square Development, LLC (the
"Developer") has announced its intentions to construct a $19 million hotel/meeting place/condominium/parking
deck development on the site to be acquired with proceeds of the Series 2005 Bonds. Following completion of the
demolition of the existing structures on the Project site, the Developer intends to purchase the site from the City for
the price of $300,000. The purchase price has been determined based on appraisals obtained by the City. Certain
conditions for the transfer of the Project site are set forth in the Redevelopment Agreement. See the caption "THE
PROJECT' herein.
DEFINITIONS OF CERTAIN TERMS
The following are definitions of certain terms used in this Official Statement:
"Account" means an Account established by Article V of the Indenture.
"Accountant" means an independent certified public accountant or a firm of independent certified public
accountants.
"Accreted Value" means, with respect to each Series 2005 Bond:
(a) for any $5,000 minimum authorized denomination of a Series 2005 Bond, as of any
Accretion Date, the amount set forth in Exhibit C to the Indenture as the Accreted Value of a Series 2005
Bond as of such Accretion Date;
(b) as of any date (for purposes of this paragraph (b), a "Calculation Date") that is not an
Accretion Date, the sum of (i) the Accreted Value determined under paragraph (a) above, as appropriate, as
of the most recent Accretion Date plus (ii) the amount determined pursuant to the following formula:
(A-BXX/l80),
where "A" is the Accreted Value determined under paragraph (a) above as of the Accretion Date
immediately following such Calculation Date; "B" is the Accreted Value determined under paragraph (a)
above as of the most recent Accretion Date; and "X" is the number of days such Calculation Date follows
the most recent Accretion Date, determined assuming that each month in such period contains 30 days.
"Accretion Date" means, with respect to the Series 2005 Bonds, (i) the date on which the Series 2005
Bonds are first issued by the City and February 1 and August I of each year, commencing August 1, 2005.
"Act" means the enabling legislation for Amendment 78, codified as Arkansas Code Annotated (2003
Supp.) Sections 14-168-301 et seq., as from time to time amended.
18
"Additional Bonds" means Bonds in addition to the Series 2005 Bonds which are issued under the
provisions of Section 212 of the Indenture.
"Amendment 78" means Amendment No. 78 to the Constitution of Arkansas, approved by the voters of the
State on November 7, 2000.
"Annual Debt Service" means, with respect to all or any particular amount of Bonds, as the case may be,
the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the
amount of such payment which is provided from the proceeds of the sale of Bonds or from sources other than Tax
Increment receipts. With respect to the Series 2005 Bonds, "Annual Debt Service" means the Debt Service for any
particular year which is deemed to accrete or mature as described under the definition of Debt Service set forth
below.
"Authorized Representative" means either the Mayor of the City and such additional person or persons as
from time to time may be designated to act on behalf of the City by a Certificate furnished to the Trustee containing
the specimen signature thereof and executed on behalf of the City by its Mayor.
"Authorizing Ordinance" means Ordinance No. adopted by the City on 2005, which
authorized the issuance of the Series 2005 Bonds pursuant to the Indenture.
"Bond Counsel" means any firm of nationally recognized municipal bond counsel selected by the City and
acceptable to the Trustee.
"Bond Fund" means the fund by that name created and established in the Indenture.
"Bonds" mean the Series 2005 Bonds and all Additional Bonds issued by the City pursuant to the
Indenture.
"Book -Entry System" means the book -entry system maintained by the Securities Depository and described
in the Indenture.
"Certificate" means a document signed by an Authorized Representative of the City attesting to or
acknowledging the circumstances or other matters therein stated.
"City" means the City of Fayetteville, Arkansas, a municipality and political subdivision under the laws of
the State of Arkansas.
"City Clerk" means the person holding the office and performing the duties of the City Clerk of the City.
"Closing Date" means, with respect to any series of Bonds, the date upon which there is an exchange of
such series of Bonds for the proceeds representing the purchase price for such series of Bonds by the Original
Purchaser or Purchasers thereof.
"Code" means the Internal Revenue Code
of 1986,
as from time to time amended,
and applicable
regulations issued or proposed thereunder.
"Completion Date" means the date upon which a particular Project is completed, as certified by a Qualified
Engineer in accordance with the Indenture.
"Continuing Disclosure Agreement" means, collectively, each Continuing Disclosure Agreement between
the City and the Trustee, dated the date of issuance and delivery of a series of Bonds, as originally executed and as
amended from time to time in accordance with the terms thereof.
"Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City
and related to the authorization, sale and issuance of the Bonds, including, but not limited to, underwriting
discounts, fees and expenses, placement agent fees and expenses, publication expenses, expenses of printing,
reproducing, filing and recording documents, initial fees and charges of the Trustee and any Paying Agent, fees and
expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement
for the Bonds, costs of execution, transportation and safekeeping of the Bonds, and other costs, charges and fees
incurred in connection with the foregoing.
"Costs of Issuance Fund" means the fund by that name created and established in the Indenture.
"Debt Service" means, with respect to all or any particular amount of Bonds, the total as of any particular
date of computation and for any particular period of the scheduled amount of interest and amortization of principal
payable on such Bonds, excluding amounts scheduled during such period which relate to principal which has been
retired before the beginning of such period. With respect to the Series 2005 Bonds, "Debt Service" shall include the
increase in Accreted Value during such period of computation and the pro rata portion of principal allocable to such
19
period of computation, assuming that the principal of the Series 2005 Bonds matures on a level basis over the life of
the Series 2005 Bonds, but excluding amounts which relate to Series 2005 Bonds which have been retired before the
beginning of such period.
"Developer" means East Square Development, LLC, an Arkansas limited liability company.
"District" means the Highway 71 East Square Redevelopment District No. I created by the City under the
authority of Amendment 78 and the Act pursuant to Ordinance No. 4608 adopted on August 17, 2004, as amended
by Ordinance No.4662 adopted on December 28, 2004. A map of the District is attached hereto as Exhibit D.
"Event of Default" means any event of default specified in Section 801 of the Indenture.
"Fiscal Year" means
the 12 -month period
used, at any time, by the
City for accounting purposes, which
may be the calendar year.
"Fund" means a fund established by the Indenture.
"Government Securities" means (i) bonds, notes, certificates of indebtedness, treasury bills or other
securities constituting direct obligations of, or obligations on which the full and timely payment of principal and
interest is fully and unconditionally guaranteed by, the United States of America (including any such securities
issued or held in book -entry form on the books of the Department of Treasury of the United States of America), and
(ii) evidences of direct ownership or proportionate or individual interest in future interest or principal payments on
specified direct obligations of, or obligations on which the full and timely payment of principal and interest is fully
and unconditionally guaranteed by, the United States of America, which obligations are held by a bank or trust
company organized and existing under the laws of the United States of America or any state thereof in the capacity
of custodian in form and substance satisfactory to the Trustee.
"Holder" or "Bondholder" or "owner of the Bonds" means the registered owner of any Bond.
"Indenture" means the Trust Indenture dated as of April 15, 2005, between the City and the Trustee,
pursuant to which the Bonds are issued, and any further amendments and supplements thereto.
"Investment Securities" means, if and to the extent the same are at the time legal for investment of Funds
and Accounts held under the Indenture:
(a) Government Securities;
(b) bonds, notes or other obligations of any state of the United States of America or any
political subdivision of any state, which at the time of their purchase are rated in either of the two highest
rating categories by a nationally recognized Rating Agency;
(c) certificates of deposit or time or demand deposits constituting direct obligations of any
bank, bank holding company, savings and loan association or trust company organized under the laws of
the United States of America or any state thereof (including the Trustee or any of its affiliates), except that
investments may be made only in certificates of deposit or time or demand deposits which are:
(1) insured by the Federal Deposit Insurance Corporation, or any other similar
United States Government deposit insurance program then in existence; or
(2) continuously and fully secured by Government Securities, which have a market
value, exclusive of accrued interest, at all times at least equal to the principal amount of such
certificates of deposit or time or demand deposits;
(d) short term discount obligations of the Federal National Mortgage Association and the
Government National Mortgage Association; and
(e) money market mutual funds (1) that invest in Government Securities or that are
registered with the federal Securities and Exchange Commission (SEC), meeting the requirements of Rule
2a-7 under the Investment Company Act of 1940, and (2) that are rated in either of the two highest
categories by a nationally recognized Rating Agency.
"Mayor" means the person holding the office and performing the duties of the Mayor of the City.
"Original Purchaser" means the first purchaser(s) of a series of Bonds from the City.
OW
"Outstanding" means, as of any date of computation, Bonds theretofore or thereupon being delivered under
the Indenture, except:
(a) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or
prior to such date for cancellation;
(b) Bonds deemed to be paid in accordance with Article VII of the Indenture; and
(c) Bonds in lieu of or in exchange or substitution for which other Bonds shall have been
authenticated and delivered pursuant to the Indenture.
"Participants" means those financial institutions for which the Securities Depository effects book -entry
transfers and pledges of securities deposited with the Securities Depository in the Book -Entry System, as such
listing of Participants exists at the time of such reference.
"Paying Agent" means any bank or trust company named by the City as the place at which the principal of
and premium, if any, and interest on the Bonds are payable.
"Person" means any natural person, fum, association, corporation, limited liability company, partnership,
joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or
political subdivision thereof or other public body.
"Project" means the acquisition of certain real property, which property is located within the District and
consists primarily of the former Mountain Inn property and surrounding parcels, the demolition of the majority of
the existing structures thereon, site preparation in connection therewith, and the completion of certain sidewalk and
crosswalk improvements.
"Project Costs" shall have the meaning set forth in the Act, and shall include all costs of planning,
designing, purchasing, acquiring, constructing, reconstructing, improving, enlarging, extending, repairing, financing
and placing in a Project in operation, including the demolition of existing structures, and the costs of obtaining
governmental approvals, certificates, permits and licenses with respect thereto, heretofore or hereafter paid or
incurred by or on behalf of the City and which shall include, but shall not be limited to:
(a) preliminary investigation and development costs, engineering fees, contractors' fees,
labor costs, the cost of materials, equipment, utility services and supplies, costs of obtaining permits,
licenses and approvals, costs of real property, insurance premiums, legal and financing fees and costs,
administrative and general costs, and all other costs properly allocable to the acquisition, construction,
reconstruction, improving, extending and equipping of the Project and placing the same in operation;
(b) all costs relating to injury and damage claims arising out of the acquisition, construction
or equipping of the Project;
(c) all other costs incurred in connection with, and properly allocable to, the acquisition,
construction, reconstruction, improving, extending and equipping of the Project; and
(d) amounts to pay or reimburse the City or any City fund for expenses of the City incident
and properly allocable to such planning, designing, purchasing, acquiring, constructing, reconstructing,
improving, enlarging, extending, repairing, financing and placing in operation of the Project.
"Project Fund" means the fund by that name created and established in the Indenture.
"Qualified Engineer" means either (i) the City's Building Services Director and Project Manager or (ii) an
independent consulting engineer or firm of independent consulting engineers not in the regular employ of the City.
"Rating Agency" means Moody's Investors Service, Standard & Poor's, a Division of The McGraw-Hill
Companies, Inc., or Fitch, Inc., and their respective successors and assigns. If any such corporation ceases to act as
a securities rating agency, the City may appoint any nationally recognized securities rating agency as a replacement.
"Rebate Fund" means the fund by that name created and established in the Indenture.
"Redemption Date" means the fund by that name established in the Indenture.
"Redevelopment Agreement" means that certain agreement dated as of March 15, 2005, between the City
and the principals of the Developer, in connection with the Project.
"Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized
Representative including, without limitation, the following with respect to each payment requested:
21
(i) the name of the Person or party to whom payment is to be made and the purpose of the
payment,
(ii) the amount to be paid thereunder;
(iii) that such amount has not been previously paid by the City and is justly due and owing to
the Person(s) named therein as a proper payment or reimbursement of a Project Cost; and
(iv) that no Event of Default exists under the Indenture and that, to the knowledge of the
Authorized Representative, no event has occurred and continues which with notice or lapse of time or both
would constitute an Event of Default under the Indenture.
"Revenue Fund" means the fund by that name created and established in the Indenture.
"Securities Depository' means The Depository Trust Company, New York, New York, or its nominee, and
its successors and assigns.
"Series 2005 Bonds" means the City's Tax Increment Interest Accretion Bonds (Highway 71 East Square
Redevelopment District No. 1), Series 2005, issued under and secured by the Indenture in the aggregate principal
amount of $3,735,000*.
"State" means the State of Arkansas.
"Supplemental Indenture" means any indenture supplemental to or amendatory of the Indenture.
"Tax Increment" shall have the meaning set forth in the Act, as determined by multiplying the incremental
value of the real property within the District by the maximum applicable ad valorem rate permitted pursuant to the
Act.
"Tax Regulatory Agreement" means with respect to any series of Bonds, that Tax Regulatory Agreement of
the City relating to maintenance of the excludability of interest on such Bonds from gross income for federal income
tax purposes, delivered in connection with the issuance of such series of Bonds.
"Trustee" means the banking corporation or association designated as Trustee in the Indenture, and its
successor or successors as such Trustee. The original Trustee is
"Trust Estate" means the property described in the granting clauses of the Indenture.
Preliminary; subject to change.
SUMMARY OF THE INDENTURE
The following statements are brief summaries of certain provisions of the Indenture. The statements do not
purport to be complete, and reference is made to the Indenture, copies of which are available for examination at the
offices of the Finance and Internal Services Director of the City, for a full statement thereof.
Funds and Accounts. Tax Increment receipts are pledged by the Indenture to the payment of the principal
of, premium, if any, and interest on the Bonds. The following Funds and Accounts have been established with the
Trustee in connection with the Bonds:
Funds and Accounts
Revenue Fund
Bond Fund
Redemption Fund
Project Fund
Cost of Issuance Fund
Rebate Fund
Application of Tax Increment Receipts. The application of Tax Increment receipts is as follows:
(a) Revenue Fund. All Tax Increment receipts shall, as and when received, be deposited into the
Revenue Fund. All moneys at any time in the Revenue Fund shall be applied on a monthly basis to the payment of
any arbitrage rebate due under Section 148(f) of the Code, to the payment of fees and expenses of the Trustee and
22
any Paying Agent, and to the early redemption of the Series 2005 Bonds, at the times and in the amounts set forth as
follows:
(b) Redemption Fund. After making any required deposits into the Rebate Fund and after paying the
fees and expenses of the Trustee and any Paying Agent, there shall be paid from the Revenue Fund into the
Redemption Fund all remaining moneys in the Revenue Fund. Moneys in the Redemption Fund shall be transferred
to the Bond Fund at such times as may be necessary to effectuate redemptions of the Series 2005 Bonds on the first
available redemption date. There shall also be transferred to the credit of the Redemption Fund moneys in the
Project Fund not needed to complete the Project and the first $120,000 of any proceeds realized by the City upon the
sale of any of the real property originally acquired with the proceeds of the Series 2005 Bonds. See the captions
"THE SERIES 2005 Bonds — Redemption" and "PROJECTED TAX INCREMENT AND MANDATORY
REDEMPTIONS" herein.
(c) Bond Fund. On any redemption date for the Series 2005 Bonds, the Trustee shall transfer to the
Bond Fund from the Redemption Fund an amount equal to the Accreted Amount of each Series 2005 Bond being
redeemed on such date unless payment of such amount shall be otherwise provided for. Moneys in the Bond Fund
shall be used solely for the purpose of paying Annual Debt Service on the Bonds upon redemption or final maturity.
The Trustee shall withdraw from the Bond Fund, on the date of maturity or final redemption, an amount equal to the
Accreted Value of the Series 2005 Bonds maturing or being called for redemption for the sole purpose of paying the
same.
(d) Project Fund. A portion of the proceeds of the Series 2005 Bonds shall be deposited in the Project
Fund. See the caption "ESTIMATED SOURCES AND USES OF FUNDS" herein. In addition, upon the sale by
the City of any portion of the real property originally acquired with the proceeds of the Series 2005 Bonds, sale
proceeds in excess of $120,000 shall be deposited in the Project Fund. Amounts in the Project Fund shall be
expended only for the payment or reimbursement of Project Costs upon the submission of Requisitions by the City
to the Trustee; provided, however, expenditures related to the sidewalk and crosswalk construction components of
the Project shall be made only from the property sale proceeds described in the preceding sentence. The Trustee
shall only make payments from the Project Fund pursuant to and in accordance with Requisitions. Within ninety
(90) days following completion of the Project (not including the sidewalk and crosswalk improvements), the City
shall deliver to the Trustee its Certificate stating that the Project is complete and the Trustee shall transfer the
remaining moneys in the Project Fund (save and except moneys needed to satisfy unpaid Project Costs) to the
Redemption Fund for application to the retirement of the Series 2005 Bonds. See the caption "THE SERIES 2005
Bonds — Redemption" herein.
(e) Cost of Issuance Fund. A portion of the proceeds of the Series 2005 Bonds shall be deposited to
the credit of the Cost of Issuance Fund. The Trustee shall pay those Costs of Issuance as directed by the City
pursuant to a Certificate delivered on a Closing Date. After all Costs of Issuance have been paid with respect to the
Series 2005 Bonds, any remaining moneys in the. Cost of Issuance Fund shall be transferred to the Bond Fund.
(f) Rebate Fund. The Trustee shall establish and maintain, separate and apart from any other Funds
and Accounts established and maintained under the Indenture, the Rebate Fund, which Fund is not pledged to the
payment of the Bonds. Subject to transfer to the United States in payment of any arbitrage rebate due under Section
148(O of the Code, all moneys at any time deposited in the Rebate Fund shall be held by the Trustee in trust, and
neither the City nor the Owner of any Bond shall have any rights in or claim to such money. Any amounts
remaining in the Rebate Fund after payment in full of the rebate amount owing to the United States, within sixty
(60) days after the date on which the last Bond is redeemed, shall be transferred to the Revenue Fund.
Investment of Funds. At the direction of the City or absent such direction, the Trustee shall invest moneys
in Funds or Accounts held by the Trustee in Investment Securities with maturity or redemption dates consistent with
the times at which said moneys will be required for the purposes provided in the Indenture. Moneys in separate
Funds or Accounts may be commingled for the purpose of investment.
Obligations purchased as an investment of moneys in any Fund or Account created by the Indenture shall
be deemed at all times to be a part of such Fund or Account, and any income or loss due to an investment thereof
shall be charged to the respective Fund or Account for which the investment was made except as otherwise provided
in the Indenture.
Investments in any Fund or Account shall be evaluated at least annually by the Trustee. For the purpose of
determining the amount in any Fund or Account, the City and the Trustee shall value all Investment Securities
credited to such Fund or Account at the price at which such Investment Securities are redeemable by the Holders or
owners thereof at their option if so redeemable, or, if not so redeemable, at the lesser of (i) the cost of such
23
Investment Securities minus the amortization of any premium or plus the amortization of any discount thereon and
(ii) the market value of such Investment Securities.
The Trustee shall sell or present for redemption any Investment Securities as necessary in order to provide
money for the purpose of making any payment required under the Indenture, and the Trustee shall not be liable for
any loss resulting from any such sale.
Responsibility of Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection
with any investment of moneys made by it at the direction of the City.
Instruments of Further Assurance. At any and all times the City shall, so far as it may be authorized by
law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, ordinances, acts,
deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring,
conveying, granting, pledging, assigning and confirming of all and singular the receipts from the Tax Increment and
all other moneys pledged or assigned by the Indenture, or intended so to be, or which the City may become bound to
pledge or assign.
Tax Covenants. The City shall not use or permit the use of any Bond proceeds or any other funds of the
City, directly or indirectly, in any manner, and will not take or permit to be taken any other action or actions which
would adversely effect the exclusion of interest on any Bond from gross income for federal income tax purposes.
No part of the proceeds of the Bonds shall at any time be used, directly or indirectly, to acquire securities or
obligations the acquisition of which would cause any of such Bonds to be an "arbitrage bond" as defined in Sections
148(a) and (b) of the Code. The City agrees that so long as any of the Bonds remain Outstanding, it will comply
with the provisions of each applicable Tax Regulatory Agreement.
Defeasance. Any Bond shall be deemed to be paid within the meaning of the Indenture when payment of
the principal of and premium, if any, and interest on such Bond (whether at maturity or upon redemption as provided
in the Indenture, or otherwise), either (i) shall have been made or caused to be made in accordance with the terms
thereof, or (ii) shall have been provided for by irrevocably depositing with the Trustee, in trust and irrevocably set
aside exclusively for such payment, (1) moneys sufficient to make such payment or (2) Government Securities
(provided that such deposit will not affect the tax-exempt status of the interest on any of the Bonds or cause any of
the Bonds to be classified as "arbitrage bonds" within the meaning of Section 148(a) of the Code, as reflected in an
opinion of Bond Counsel delivered to the Trustee), maturing as to principal and interest in such amounts and at such
times as will provide sufficient moneys to make such payment, and all necessary and proper fees, compensation and
expenses of the Trustee and any Paying Agent pertaining to the Bonds with respect to which such deposit is made
shall have been paid or the payment thereof provided for to the satisfaction of the Trustee and any said Paying
Agent.
Events of Default. Each of the following events shall constitute and is referred to in the Indenture as an
"Event of Default":
(a) Default in the due and punctual payment of any interest on any Bond;
(b) Default in the due and punctual payment of the principal of or premium, if any, on any Bond,
whether at the stated maturity thereof, or upon proceedings for redemption thereof, or upon the maturity thereof by
declaration;
(c) Default in the payment of any other amount required to be paid under the Indenture or the
performance or observance of any other of the covenants, agreements or conditions contained in the Indenture, or in
the Bonds issued under the Indenture, and continuance thereof for a period of sixty (60) days after written notice
specifying such failure and requesting that it be remedied, shall have been given to the City by the Trustee, which
may give such notice in its discretion and shall give such notice at the written request of Holders of not less than
fifty-one percent (51%) in aggregate principal amount of the Bonds then Outstanding, unless the Trustee, or the
Trustee and Holders of an aggregate principal amount of Bonds not less than the aggregate principal amount of
Bonds the Holders of which requested such notice, as the case may be, shall agree in writing to an extension of such
period prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the
applicable period, the Trustee will not unreasonably withhold its consent to an extension of such time if corrective
action is instituted by the City within such period and is being diligently pursued;
(d) The filing of a petition in bankruptcy by or against the City under the United States Bankruptcy
Code or the commencement of a proceeding by or against the City under any other law concerning insolvency,
reorganization or bankruptcy; and
24
(e) If the State has limited or altered the rights of the City pursuant to the Act, as in force on the date
of the Indenture, to fulfill the terms of any agreements made with the Trustee or the Bondholders or in any way
impaired the rights and remedies of the Trustee or the Bondholders while any Bonds are Outstanding.
The term "default" as used in clauses (a), (b) and (c) above shall mean default by the City in the
performance or observance of any of the covenants, agreements or conditions on its part contained in the Indenture,
or in the Bonds Outstanding thereunder, exclusive of any period of grace required to constitute a default an "Event
of Default" as described above.
Acceleration. Upon the occurrence of an Event of Default, the Trustee may, and upon the written request
of the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding shall, by notice in writing
delivered to the City, declare the principal of all Bonds then Outstanding, together with any premium and the
interest accreted thereon, immediately due and payable, and such principal and interest shall thereupon become and
be immediately due and payable.
Other Remedies; Rights of Bondholders. Upon the occurrence of an Event of Default, the Trustee may, as
an alternative, pursue any available remedy by suit at law or in equity, including, without limitation, mandamus to
enforce the payment of the principal of and premium, if any, and interest on the Bonds then Outstanding.
If an Event of Default shall have occurred, and if it shall have been requested so to do by the Holders of
51% in aggregate principal amount of Bonds Outstanding and if it shall have been indemnified as provided in the
Indenture, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred upon it by
the Indenture as the Trustee, being advised by counsel, shall deem most expedient in the interests of the
Bondholders.
No remedy by the terms of the Indenture conferred upon or reserved to the Trustee (or to the Bondholders)
is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in
addition to any other remedy given under the Indenture or now or hereafter existing at law or in equity or by statute.
No delay or omission to exercise any right or power accruing upon any default or Event of Default shall
impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or
acquiescence therein; and every such right and power may be exercised from time to time and as often as may be
deemed expedient.
No waiver of any default or Event of Default under the Indenture, whether by the Trustee or by the
Bondholders, shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or
remedies consequent thereon.
Rights and Remedies of Bondholders. No Holder of any Bond shall have any right to institute any suit,
action or proceeding in equity or at law for the enforcement of the Indenture or for the execution of any trust thereof
or for the appointment of a receiver or any other remedy thereunder, unless a default has occurred of which the
Trustee has been notified as provided in the Indenture, or of which by the Indenture it is deemed to have notice, nor
unless such default shall have become an Event of Default and the Holders of not less than 51% in aggregate
principal amount of Bonds Outstanding shall have made written request to the Trustee and shall have offered it
reasonable opportunity either to proceed to exercise the powers granted or to institute such action, suit, or
proceeding in its own name, nor unless also they have offered to the Trustee indemnity as provided in the Indenture
nor unless the Trustee shall thereafter fail or refuse to exercise the powers granted, or to institute such action, suit, or
proceeding in its own name; and such notification, request and offer of indemnity are declared in every such case at
the option of the Trustee to be conditions precedent to the execution of the powers and trusts of the Indenture, and to
any action or cause of action for the enforcement of the Indenture or for the appointment of a receiver or for any
other remedy thereunder; it being understood and intended that no one or more Holders of the Bonds shall have any
right in any manner whatsoever to affect, disturb or prejudice the lien of the Indenture by action of the Holder or
Holders or to enforce any right under the Indenture except in the manner therein provided, and that all proceedings
at law or in equity shall be instituted, held and maintained in the manner therein provided for the equal benefit of the
Holders of all Bonds Outstanding thereunder. Nothing in the Indenture contained shall, however, affect or impair
the right of any Bondholders to enforce the payment of the principal of and premium, if any, and interest on any
Bonds at and after the maturity thereof, or the obligation of the City to pay the principal of and premium, if any, and
interest on each of the Bonds issued under the Indenture to the respective Holders thereof at the time and place in
said Bonds expressed.
Supplemental Indentures Not Requiring Consent ofBondholders. The City and the Trustee may, from time
to time and at any time, without the consent of or notice to the Bondholders, enter into Supplemental Indentures as
follows:
25
(a)
to cure any formal defect, omission, inconsistency or ambiguity in the Indenture;
(b) to grant to or confer or impose upon the Trustee for the benefit of the Bondholders any additional
rights, remedies, powers, authority, security, liabilities or duties which may lawfully be granted, conferred or
imposed and which are not contrary to or inconsistent with the Indenture as theretofore in effect, provided that no
such additional liabilities or duties shall be imposed upon the Trustee without its consent;
(c) to add to the covenants and agreements of, and limitations and restrictions upon, the City in the
Indenture other covenants, agreements, limitations and restrictions to be observed by the City which are not contrary
to or inconsistent with the Indenture as theretofore in effect;
(d) to confirm, as further assurance, any pledge under, and the subjection to any claim, lien or pledge
created or to be created by, the Indenture, of the Trust Estate or of any other moneys, securities or funds;
(e) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time
amended;
(f) to authorize the issuance and sale of one or more series of Additional Bonds;
(g) to make such additions, deletions or modifications as may be necessary to assure compliance with
Section 148(f) of the Code relating to required rebate to the United States or otherwise as may be necessary to assure
exemption from federal income taxation of interest on the Bonds; or
(h) to modify, alter, amend or supplement the Indenture in any other respect which is not materially
adverse to the Bondholders and which does not involve a change described in clause (a), (b), (c), (d), (e) or (I) below
and which, in the judgment of the Trustee, is not to the prejudice of the Trustee.
Supplemental Indentures Requiring Consent ofBondholders. Subject to the terms and provisions contained
in this paragraph, and not otherwise, the Holders of not less than 2/3 in aggregate principal amount of the Bonds
then Outstanding shall have the right, from time to time, anything contained in the Indenture to the contrary
notwithstanding, to consent to and approve the execution by the City and the Trustee of such indenture or indentures
supplemental to the Indenture as shall be deemed necessary and desirable by the City for the purpose of modifying,
altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in the
Indenture or in any Supplemental Indenture; provided, however, that nothing contained in the Indenture shall permit
or be construed as permitting (a) an extension of the maturity (or mandatory redemption date) of the principal of or
the interest on any Bond issued thereunder, or (b) a reduction in the principal amount of or redemption premium or
rate of interest on any Bond issued thereunder, or (c) the creation of any lien on the Trust Estate or any part thereof,
except as expressly permitted in the Indenture, or (d) a privilege or priority of any Bond or Bonds over any other
Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such
Supplemental Indenture, or (f) depriving the Holder of any Bond then Outstanding of the lien created on the Trust
Estate.
If, at any time the City shall request the Trustee to enter into any Supplemental Indenture for any of the
purposes described above, the Trustee shall, at the expense of the City, cause notice of the proposed execution of
such Supplemental Indenture to be mailed by first class mail to each registered owner of the Bonds. Such notice
shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file
at the principal office of the Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to
any liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the
validity of such Supplemental Indenture when consented to and approved as provided above. If the Holders of not
less than 2/3 in aggregate principal amount of the Bonds Outstanding at the time of the execution of any such
Supplemental Indenture shall have consented to and approved the execution thereof, no Holder of any Bond shall
have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any
manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from
executing the same or from taking any action pursuant to the provisions thereof.
SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT
The City has entered into an undertaking in the form of the Continuing Disclosure Agreement as required
by the Indenture for the benefit of the Beneficial Owners of the Series 2005 Bonds to cause certain financial
information to be sent to certain information repositories annually and to cause notice to be sent to such information
repositories of certain specified events, pursuant to the requirements of Section (b)(5)(i) of Rule 15c2-12 of the
Securities Exchange Act of 1934, as amended (the "Rule"). The City has not failed to comply with any previous
undertaking pursuant to the Rule.
26
The Continuing Disclosure Agreement contains the following covenants and provisions:
(a) The City shall, not later than August I of each year, commencing August 1, 2005, provide to each
Repository and the Trustee its Annual Financial Information consistent with the requirements of subsection (d)
below.
(b) If, on the date specified in subsection (a) above for providing the Annual Financial Information to
Repositories, the Trustee has not received a copy of the Annual Financial Information, the Trustee shall contact the
Disclosure Representative to determine lithe City is in compliance with subsection (a).
(c) If the Trustee is unable to verify that the Annual Financial Information has been provided to the
Repositories by the date required within subsection (a), the Trustee shall file a notice to such effect with the
Repositories and the MSRB.
(d) The City's Annual Financial Information shall contain or incorporate by reference the following
(i) Tax Increment receipts during the latest Fiscal Year and for all previous Fiscal
Years;
(ii) The most recent determination of the "incremental value" (as defined in the Act)
of real property within the District and all such previous determinations;
(iii) The total principal amount and Accreted Value of all Series 2005 Bonds
Outstanding as of the end of the latest Fiscal Year and as of the end of each previous Fiscal Year;
and
(iv) The principal amount and Accreted Value of all Series 2005 Bonds redeemed
during the latest Fiscal Year and such amounts as were redeemed in previous Fiscal Years.
(e) The City has agreed to instruct the Trustee to deliver to each National Repository, or the MSRB
and the Arkansas State Repository, notice of the occurrence of any of the following Specified Events, if deemed
material:
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults;
(iii) Unscheduled draws on any debt service reserve reflecting financial difficulties;
(iv) Unscheduled draws on any credit enhancement reflecting financial difficulties;
(v) Substitution of any credit or liquidity providers, or their failure to perform;
(vi) Adverse tax opinions or events affecting the tax-exempt status of the Series 2005 Bonds;
(vii) Modifications to rights of Bondowners;
(viii) Bond calls;
(ix) Defeasances;
(x) Release, substitution or sale of property securing payment of the Series 2005 Bonds; or
(xi) Rating changes.
(f) The City has agreed that the foregoing undertakings shall be for the benefit of the Beneficial
Owners of the Series 2005 Bonds, and shall be enforceable by any Beneficial Owner of the Series 2005 Bonds in an
action for specific performance against the City.
(g) The continuing obligation of the City to provide Annual Financial Information and notice of the
occurrence of Specified Events, if material, will terminate if the City is no longer an "obligated person" within the
meaning of the Rule or upon the maturity, defeasance, prior redemption or payment in full of the Series 2005 Bonds.
The City and the Trustee may amend the Continuing Disclosure Agreement, and any provision of the Continuing
Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel,
reasonably acceptable to each of the City and the Trustee, to the effect that such amendment or waiver would not, in
and of itself, cause the undertakings under the Continuing Disclosure Agreement to violate the Rule, taking into
account any subsequent change in or official interpretation of the Rule.
27
•
(h) The following terms used under this caption shall have the meanings set forth below:
"Annual Financial Information" means the annual financial information to be provided by the City of the
type described in the Continuing Disclosure Agreement.
"Arkansas State Repository" means any public or private repository or entity as may be designated by the
State of Arkansas as a state repository for purposes of the Rule and recognized as such by the SEC. As of the date
of the Continuing Disclosure Agreement, there is no Arkansas State Repository.
"Beneficial Owner" means any Person which has the power, directly or indirectly, to vote or consent with
respect to, or to dispose of ownership of, any Series 2005 Bonds, including Persons holding Series 2005 Bonds
through nominees or depositories.
"Disclosure Representative" means the City's Finance and Internal Services Director or his or her designee,
or such other officer or employee as the City shall designate in writing to the Trustee from time to time.
"Fiscal Year" means the 12 -month period used, at any time, by the City for accounting purposes, which
maybe the calendar year. The City's fiscal year presently ends on December 31.
"MSRB" means the Municipal Securities Rulemaking Board.
"National Repository" means any nationally recognized municipal securities information repository for
purposes of the Rule.
"Participating Underwriter" means Crews & Associates, Inc.
"Repository" means each National Repository and the Arkansas State Repository.
"Specified Events" means each of the events with respect to the Series 2005 Bonds listed in subsection (e)
above.
(i) A failure by the City to comply with the provisions of the Continuing Disclosure Agreement will
not constitute an Event of Default under the Indenture, and the sole remedy in such an event shall be an action to
compel specific performance. Nevertheless, such a failure to comply must be reported in accordance with the Rule
and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or
sale of the Series 2005 Bonds in the secondary market. Consequently, such a failure may adversely affect the
transferability and liquidity of the Series 2005 Bonds.
UNDERWRITING
Under a bond purchase agreement entered into by and among the City and Crews & Associates, Inc. (the
"Underwriter'), the Series 2005 Bonds are being purchased at a purchase price of $ (representing the
stated principal amount of the Series 2005 Bonds less an underwriting discount of $). The bond purchase
agreement provides that the Underwriter will purchase all of the Series 2005 Bonds if any are purchased. The
obligation of the Underwriter to accept delivery of the Series 2005 Bonds is subject to various conditions contained
in the bond purchase agreement, including the absence of pending or threatened litigation questioning the validity of
the District or the Series 2005 Bonds or any proceedings in connection with the issuance thereof, and the absence of
material adverse changes in the financial condition of the City.
The Underwriter intends to offer the Series 2005 Bonds to the public initially at the offering prices as set
forth on the cover page of this Official Statement, which offering prices (or bond yields establishing such offering
prices) may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join
with dealers and other underwriters in offering the Series 2005 Bonds to the public, and may offer the Series 2005
Bonds to such dealers and other underwriters at a price below the public offering price.
The City has agreed to indemnify the Underwriter against certain civil liabilities in connection with the
offering and sale of the Series 2005 Bonds, including certain liabilities under federal securities laws.
TAX MATTERS
Federal Income Taxes. In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations,
rulings and judicial decisions, interest on the Series 2005 Bonds is excluded from gross income for federal income
tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. The opinion
described in the preceding sentence assumes the accuracy of certain representations and compliance by the City with
covenants designed to satisfy the requirements of the Code that must be satisfied subsequent to the issuance of the
28
Series 2005 Bonds. Failure to comply with certain of such requirements may cause interest on the Series 2005
Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the
Series 2005 Bonds. The City has covenanted to comply with such requirements.
Notwithstanding Bond Counsel's opinion that interest on the Series 2005 Bonds is not a specific preference
item for purposes of the federal alternative minimum tax, such interest will be included in adjusted current earnings
of certain corporations, and such corporations are required to include in the calculation of alternative minimum
taxable income 75% of the excess of such corporation's adjusted current earnings over its alternative minimum
taxable income (determined without regard to such adjustment and prior to reduction for certain net operating
losses).
Bond Counsel has expressed no opinion regarding other federal tax consequences arising with respect to
the Series 2005 Bonds.
The accrual or receipt of interest on the Series 2005 Bonds may otherwise affect the federal income tax
liability of the owners of the Series 2005 Bonds. The extent of these other tax consequences will depend upon such
owner's particular tax status and other items of income or deduction. Bond Counsel has expressed no opinion
regarding any such consequences. Purchasers of the Series 2005 Bonds, particularly purchasers that are
corporations (including S corporations and foreign corporations operating branches in the United States), property or
casualty insurance companies, banks, thrifts or other financial institutions, certain recipients of Social Security or
Railroad Retirement benefits, taxpayers otherwise entitled to claim the earned income credit, or taxpayers who may
be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, should consult
their tax advisors as to the tax consequences of purchasing or owning the Series 2005 Bonds.
Changes in Federal Tax Law. From time to time, there are legislative proposals in the Congress that, if
enacted, could alter or amend the federal tax matters referred to above or adversely affect the market value of the
Series 2005 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether
if enacted it would apply to bonds issued prior to enactment. Purchasers of the Series 2005 Bonds should consult
their tax advisors regarding any pending or proposed tax legislation. The opinions expressed by Bond Counsel are
based upon existing legislation as of the date of issuance and delivery of the Series 2005 Bonds, and Bond Counsel
has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation.
State Taxes. Bond Counsel is of the opinion that, under existing law, the interest on the Series 2005 Bonds
is exempt from all state, county and municipal taxes in the State of Arkansas.
LEGAL MATTERS
Legal Opinions. Legal matters incident to the authorization and issuance of the Series 2005 Bonds are
subject to the unqualified approving opinion of Kutak Rock LLP, Little Rock, Arkansas, Bond Counsel, a copy of
whose approving opinion will be delivered with the Series 2005 Bonds and a form of which is attached hereto as
Appendix A. Certain legal matters will be passed upon for the City by its counsel, Kit Williams, Esq., City
Attorney.
Litigation. There is no litigation pending seeking to restrain or enjoin the issuance or delivery of the Series
2005 Bonds or questioning or affecting the legality of District or of the Series 2005 Bonds or the proceedings and
authority under which the Series 2005 Bonds are to be issued, or questioning the right of the City to issue the Series
2005 Bonds. There is no action, suit or proceeding known to be pending or threatened, restraining or enjoining the
City in any way which could have a material adverse effect on the City or its financial affairs.
MISCELLANEOUS
Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not
so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of
the estimates will be realized. This Official Statement is not to be construed as a contract or agreement between the
City and the purchasers or owners of any of the Series 2005 Bonds.
ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT
The information contained in this Official Statement has been taken from sources considered to be reliable,
but is not guaranteed. To the best of the knowledge of the City, this Official Statement does not include any untrue
statement of a material fact, nor does it omit the statement of any material fact required to be stated herein, or
necessary to make the statements herein, in light of the circumstances under which they were made, not misleading.
The execution and delivery of this Official Statement has been duly authorized by the City of Fayetteville,
Arkansas.
CITY OF FAYETTEVILLE, ARKANSAS
Mayor
30
APPENDIX A
PROPOSED FORM OF BOND COUNSEL OPINION
Kutak Rock LIP, Bond Counsel, will render an opinion with respect to the Series 2005 Bonds, dated the
date of issuance and delivery thereof, in substantially the following form:
April _.2005
City of Fayetteville, Arkansas
Fayetteville, Arkansas
as Trustee
Arkansas
Crews & Associates, Inc.
Little Rock, Arkansas
$3,735,000'
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. I Project)
Series 2005
Ladies and Gentlemen:
We have acted as bond counsel in connection with the issuance and sale by the City of Fayetteville,
Arkansas (the "City"), a political subdivision of the State of Arkansas, of its $3,735,000• Tax Increment Interest
Accretion Bonds (Highway 71 East Square Redevelopment District No. 1 Project), Series 2005 (the "Bonds").
The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of
Arkansas, including, particularly, Amendment 78 and Arkansas Code Annotated (Supp. 2003) §§14-168-301 et seq.
(as from time to time amended, the "Act"), pursuant to Ordinance No. _ of the City, duly adopted and approved
on 2005 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of April 15, 2005 (the
"Indenture"), by and between the City and , as trustee (the "Trustee"). Reference is
hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with
respect to the conditions for the issuance of parity debt by the City, the nature and extent of the security for the
Bonds, the rights, duties and obligations of the City, the Trustee and the Holders of the Bonds, and the terms upon
which the Bonds are issued and secured.
Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of
which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the
power of the City to adopt the Authorizing Ordinance and to enter into and perform its obligations under the
Indenture, the valid adoption of the Authorizing Ordinance, and the due authorization, execution and delivery of the
Indenture by the City, and with respect to the Indenture being enforceable upon the City.
We have examined the law and such certified proceedings and other papers as we have deemed necessary
to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the
City contained in the Authorizing Ordinance and the Indenture and in the certified proceedings and other
certifications of public officials furnished to us, without undertaking to verify the same by independent
investigation.
* Preliminary; subject to change.
A-1
Based upon the foregoing, we are of the opinion, under existing law, as follows:
I. The City is duly created and validly existing as a municipal corporation of the State of Arkansas.
Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 78 and the Act,
the City is empowered to adopt the Authorizing Ordinance, to execute and deliver the indenture, to perform the
agreements on its part contained therein, and to issue the Bonds.
2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding
obligation of the City enforceable upon the City in accordance with its terms.
3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and
binding obligation of the City enforceable upon the City in accordance with its terms.
4. The Bonds have been validly authorized, executed, issued and delivered by the City and represent
valid and binding special obligations of the City. The principal, premium, if any, and interest on the Bonds shall be
payable from, and shall be secured by an assignment and pledge by the City to the Trustee of, the receipts of the Tax
Increment (as defined in the Indenture), subject to a parity pledge of such receipts securing any Additional Bonds (as
such term is defined in the Indenture) issued hereafter.
5. The Tax Increment receipts have been duly and validly assigned and pledged to the Trustee under
the Indenture.
6. Interest on the Bonds is excluded from gross income for federal income tax purposes and is not a
specific preference item for purposes of the federal alternative minimum tax. The opinion described in the
preceding sentence assumes the accuracy of certain representations and compliance by the City with covenants
designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended, that must be met subsequent
to the issuance of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be
included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City
has covenanted to comply with such requirements.
7.
The interest on the Bonds is exempt
from all state,
county
and municipal taxes in the State of
Arkansas.
8. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and
the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended, in connection with
the offer and sale of the Bonds.
It is to be understood that the rights of the registered owners of the Bonds and the enforceability of the
Bonds, the Authorizing Ordinance and the Indenture may be subject to bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent
constitutionally applicable. and that their enforcement may also be subject to the exercise of judicial discretion in
appropriate cases.
Very truly yours,
A-2
APPENDIX B
SERIES 2005 ACCRETION SCHEDULE
Date Accreted Value of a $5,000 Bond
4-19-05 $ 5,000.00
8-1-05 5,092.08
2-1-06 5,257.58
8-1-06 5,428.45
2-1-07 5,604.87
8-1-07 5,787.03
2-1-08 5,975.11
8-1-08 6,169.30
2-1-09 6,369.80
8-1-09 6,576.82
2-1-10 6,790.57
8-1-10 7,011.26
2-1-11 7,239.13
8-1-11 7,474.40
2-1-12 7,717.32
8-1-12 7,968.13
2-1-13 8,227.09
8-1-13 8,494.47
2-1-14 8,770.54
8-1-14 9,055.59
2-1-15 9,349.89
8-1-15 9,653.76
2-1-16 9,967.51
8-1-16 10,291.46
2-1-17 10,625.93
8-1-17 10,971.27
2-1-18 11,327.84
8-1-18 11,695.99
2-1-19 12,076.11
8-1-19 12,468.59
2-1-20 12,873.81
8-1-20 13,292.21
2-1-21 13,724.21
8-1-21 14,170.25
2-1-22 14,630.78
8-1-22 15,106.28
2-1-23 15,597.23
8-1-23 16,104.15
2-1-24 16,627.33
Lai
Date
8-1-24
2-1-25
8-1-25
2-1-26
8-1-26
2-1-27
8-1-27
2-1-28
8-1-28
2-1-29
8-1-29
Accreted Value of a $5.000 Bond
17,167.92
17,725.88
18,301.97
18,896.79
19,510.93
20,145.04
20,799.75
21,475.74
22,173.71
22,894.35
23,638.42
B-2
D-2
KUTAK ROCK LLP
DRAFT 03/15/05
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement dated as of April _, 2005 (this "Agreement"), is
executed and delivered by the City of Fayetteville, Arkansas (the "City") and
, as trustee (the "Trustee"), in connection with the issuance of the City's
$3,725,000 Tax Increment Interest Accretion Bonds (Highway 71 East Square Redevelopment
District No. I Project), Series 2005 (the `Bonds"). The Bonds are being issued pursuant to the
terms and provisions of Ordinance No. _ duly adopted by the City Council of the City on
March_, 2005 (the "Authorizing Ordinance"), and a Trust Indenture dated as of April 15, 2005
(the "Indenture"), by and between the City and the Trustee. In connection with the issuance of
the Bonds, the City and the Trustee agree as follows:
Section 1. Purpose of this Agreement. This Agreement is being executed and
delivered by the City and the Trustee for the benefit of the Beneficial Owners of the Bonds and
in order to assist the Participating Underwriter in complying with, and constitutes the written
undertaking for the benefit of the Beneficial Owners of the Bonds required by, Section (b)(5)(i)
of Securities and Exchange Commission Rule 15c2-12 under the Securities Act of 1934, as
amended (17 C.F.R. Section 240.I5c2-12) (the "Rule"). The City hereby represents that it has
not failed to comply with any previous undertaking pursuant to the Rule.
Section 2. Definitions. In addition to the definitions set forth in the Indenture, which
apply to any capitalized term used in this Agreement unless otherwise defined in this Section, the
following capitalized terms shall have the following meanings:
"Annual Financial Information" shall mean the annual financial information provided by
the City pursuant to, and as described in, Sections 3 and 4 of this Agreement.
"Arkansas State Repository" shall mean any public or private repository or entity as may
be designated by the State of Arkansas as a state repository for the purpose of the Rule and
recognized as such by the SEC. As of the date of this Agreement, there is no Arkansas State
Repository.
"Beneficial Owner" shall mean any person which has or shares the power, directly or
indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds, including
persons holding Bonds through nominees, depositories or other intermediaries.
"Disclosure Representative" shall mean the City's Finance and Internal Services Director
or his or her designee, or such other officer or employee as the City shall designate in writing to
the Trustee from time to time.
"Fiscal Year" shall mean the 12 -month period used, at any time, by the City for
accounting purposes, which may be the calendar year.
"MSRB" shall mean the Municipal Securities Rulemaking Board established in
accordance with the provisions of Section 15B(b)(1) of the 1934 Act.
10-106557.1
"National Repository" shall mean any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule. The National Repositories currently approved
by the Securities and Exchange Commission are set forth in Exhibit B hereto.
"Participating Underwriter" shall mean Crews & Associates, Inc.
"Repository" shall mean each National Repository and the Arkansas State Repository,
if any.
"Rule" shall mean Rule 15c2 -12(b)(5) adopted by the Securities and Exchange
Commission ("SEC") under the Securities Exchange Act of 1934, as the same may be amended
from time to time ("1934 Act").
"Tax Increment" shall have the meaning given such term in the Act, as determined by
multiplying the incremental value of the real property within the District by the maximum
applicable ad valorem rate permitted pursuant to the Act.
"Specified Events" shall mean any of the events with respect to the Bonds listed in
Section 5(a) of this Agreement.
Section 3. Provision of Annual Financial Information.
(a) The City shall, not later than August 1 of each year, commencing
August 1, 2005, provide to each Repository and to the Trustee its Annual Financial
Information which is consistent with the requirements of Section 4 of this Agreement.
The City's Annual Financial Information may be submitted as a single document or as
separate documents comprising a package, and may cross-reference other information as
provided in Section 4(b) hereof. If the City's fiscal year changes, it shall give notice of
such change in the same manner as for a material Specified Event under Section 5 of this
Agreement.
(b) If, on the date specified in subsection (a) for providing the Annual
Financial Information to Repositories, the Trustee has not received a copy of the Annual
Financial Information, the Trustee shall contact the Disclosure Representative to
determine if the City is in compliance with subsection (a).
(c) If the Trustee is unable to verify that the Annual Financial Information has
been provided to the Repositories by the date required in subsection (a), the Trustee shall
file a notice with the Repositories and the MSRB in substantially the form set forth in
Exhibit A and as required by the Rule.
(d) The City shall:
(i) determine each year prior to the date for providing the Annual
Financial Information the name and address of each Repository; and
10-106557.1 2
(ii) file a report with the Trustee certifying that the Annual Financial
Information has been provided pursuant to this Agreement, stating the date it was
provided,.and listing all of the Repositories to which it was provided.
Section 4. Content of Annual Financial Information.
(a) The City's Annual Financial Information shall contain or incorporate by
reference the following:
(i) Tax Increment receipts during the latest Fiscal Year and for all
previous Fiscal Years;
(ii) The most recent determination of "incremental vale" (as defined in
the Act) of real property within the District and all such previous determinations;
(iii) The total principal amount and Accreted Value of all Bonds
Outstanding as of the end of the latest Fiscal Year and as of the end of each
previous Fiscal Year; and
(iv) The principal amount and Accreted Value of all Bonds redeemed
during the latest Fiscal Year and such amounts as were redeemed in previous
Fiscal Years;
(b) Any or all of the items listed above may be incorporated by reference from
other documents, including official statements of debt issues of the City or related public
entities, which have been submitted to each of the Repositories or the Securities and
Exchange Commission. If the document has been incorporated by reference in a final
official statement, it must be available from the Municipal Securities Rulemaking Board.
The City must clearly identify each such other document incorporated by reference.
Section 5. Reporting of Specified Events.
(a) This Section 5 shall govern the giving of notices of the occurrence of any
of the following events with respect to the Bonds, if material:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults;
(3) Unscheduled draws on debt service reserves reflecting financial
difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial
difficulties;
(5) Substitution of any credit or liquidity providers, or their failure to
perform;
10.106557.1 3
0_
(6) Adverse tax opinions or events affecting the tax-exempt status of
the Bonds;
(7) Modifications to rights of Bondowners;
(8) Bond calls;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the
Bonds; and
(11) Rating changes.
(b) The Trustee, upon obtaining actual knowledge of the occurrence of any of
the Specified Events, shall promptly inform the Disclosure Representative of any
Specified Event that has occurred, and shall request that the City promptly notify the
Trustee in writing whether to report the event pursuant to subsection (e).
(c) If the City determines that the occurrence of a Specified Event is material
to a Beneficial Owner of the Bonds, the Disclosure Representative shall promptly notify
the Trustee in writing. Such notice shall instruct the Trustee to report the occurrence
pursuant to subsection (e) below.
(d) If the City determines that the occurrence of a Specified Event is not
material, the Disclosure Representative shall so notify the Trustee in writing and instruct
the Trustee not to report the occurrence pursuant to subsection (e) below.
(e) If the Trustee has been instructed by the Disclosure Representative to
report the occurrence of a Specified Event, the Trustee shall file a notice of such
occurrence with each National Repository, or with the MSRB and the Arkansas State
Repository. The Trustee shall not be obligated to report the occurrence of a Specified
Event if there is no instruction to do so from the Disclosure Representative.
Notwithstanding the foregoing:
(i) notice of the occurrence of a Specified Event described in
subsections (a)(1), (4) or (5) shall be given by the Trustee unless the Disclosure
Representative gives the Trustee affirmative instructions not to disclose such
occurrence; and
(ii) notice of the Specified Events described in subsections (a)(8) and
(9) need not be given under this subsection any earlier than the notice (if any) of
the underlying event is given to Beneficial Owners of affected Bonds pursuant to
the Indenture.
Section 6. Termination of Reporting Obligation. The City's obligations under this
Agreement shall terminate if the City is no longer an "obligated person" within the meaning of
10-106557.1
S • . ..
the Rule. The City's obligations under this Agreement shall terminate upon the maturity,
defeasance, prior redemption or payment in full of all of the Bonds.
Section 7. Amendment; Waiver. Notwithstanding any other provision of this
Agreement, the City and the Trustee may amend this Agreement (and the Trustee shall consent
in its discretion, such consent not to be unreasonably withheld, to any amendment so requested
by the City), and any provision of this Agreement may be waived, if such amendment or waiver
is supported by an opinion of counsel, reasonably acceptable to each of the City and the Trustee,
to the effect that such amendment or waiver would not, in and of itself, cause the undertakings
herein to violate the Rule taking into account any subsequent change in or official interpretation
of the Rule.
Section 8. Additional Information. Nothing in this Agreement shall be deemed to
prevent the City from disseminating any other information, using the means of dissemination set
forth in this Agreement or any other means of communication, or including any other
information in any Annual Financial Information or notice of occurrence of a Specified Event, in
addition to that which is required by this Agreement. If the City chooses to include any
information in any Annual Financial Information or notice of occurrence of a Specified Event in
addition to that which is specifically required by this Agreement, the City shall have no
obligation under this Agreement to update such information or include it in any future Annual
Financial Information or notice of occurrence of a Specified Event.
Section 9. Default.
(a) In the event of a failure of the City to provide to the Repositories the
Annual Financial Information as undertaken by the City in this Agreement, the Beneficial
Owner of any Bonds may take such actions as may be necessary and appropriate,
including seeking mandamus or specific performance by court order, to cause the City to
comply with its obligations to provide Annual Financial Information or notices under this
Agreement.
(b) Notwithstanding the foregoing, no Beneficial Owner of the Bonds shall
have the right to challenge the content or adequacy of the information provided pursuant
to Sections 3, 4 or 5 of this Agreement by mandamus, specific performance or other
equitable proceedings unless the City shall have been given ninety (90) days' written
notice by a Beneficial Owner of the Bonds to remedy the alleged inadequacy of the
information provided and unless Beneficial Owners of Bonds representing at least 25%
aggregate principal amount of outstanding Bonds shall join in such proceedings.
(c) A default under this Agreement shall not be deemed an Event of Default
under the Trust Indenture, and the sole remedy under this Agreement in the event of any
failure of the City or the Trustee to comply with this Agreement shall be an action to
compel performance.
Section 10. Duties, Immunities and Liabilities of Trustee. Article IX of the Indenture
is hereby made applicable to this Agreement as if this Agreement were (solely for this purpose)
contained in the Indenture. The Trustee shall have only such duties as are specifically set forth
10-106557.1 5
in this Agreement, and the City agrees to indemnify and save the Trustee, its officers, directors,
employees and agents, harmless against any liabilities which it may incur arising out of or in the
exercise or performance of its powers and duties hereunder, including the costs and expenses
(including attorneys' fees and expenses) of defending against any claim of liability, but
excluding liabilities due to its own negligence or willful misconduct.
Section 11. Beneficiaries. This Agreement shall inure solely to the benefit of the City,
the Trustee and the Beneficial Owners from time to time of the Bonds, and shall create no rights
in any other person or entity.
Section 12. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same
instrument.
CITY OF FAYETTEVILLE, ARKANSAS
By:
Title: Mayor
as Trustee
By:
Title:
10-106557.1 6
I
.• --- ---- •
EXHIBIT A
NOTICE TO REPOSITORIES REGARDING
FINANCIAL INFORMATION
NAME OF ISSUER: City of Fayetteville, Arkansas
NAME OF BOND ISSUE: $3,725,000 Tax Increment Interest Accretion Bonds (Highway 71
East Square Redevelopment District No. I Project), Series 2005
DATE OF ISSUANCE: April _, 2005
NOTICE IS HEREBY GIVEN that the City of Fayetteville, Arkansas (the "City") has not
yet provided Annual Financial Information with respect to the above -named Bonds as required
by Section 3 of the Continuing Disclosure Agreement dated as of April , 2005, between the
City and , as trustee. [The City anticipates that the Annual Financial
Information will be filed by
Dated:
cc: City of Fayetteville
Crews & Associates, Inc.
10-106557.1
as Trustee
A-1
r
EXHIBIT B
List of Nationally Recognized Municipal Securities Information Repositories
at the time of execution and delivery of the
Continuing Disclosure Agreement
This list may change from time to time. The Agreement requires that information and
notices be provided to each Repository. This list should be checked for changes each time
information or notice is to be provided.
A current list may be obtained from the Securities and Exchange Commission over the
Internet at http://www.see.gov/info/municipal/nrmsir.htm.
Bloomberg Municipal Repository
100 Business Park Drive
Skillman, New Jersey 08558
Phone: (609) 279-3225
Fax: (609) 279-5962
http://www.bloomberg.com/markets/rates/municontacts.html
E-mail: Munis@Bloomberg.com
DPC Data Inc.
One Executive Drive
Fort Lee, New Jersey 07024
Phone: (201) 346-0701
Fax: (201) 947-0107
http://www.dpcdata.com
E-mail: nrmsir@dpcdata.com
FT Interactive Data
Attn: NRMSIR
100 Williams Street, 15a' Floor
New York, New York 10038
Phone: (212) 771-6999; (800) 689-8466
Fax: (212) 771-7390
http://www.ftid.com
Email: NRMSIR@interactivedata.com
Standard & Poor's Securities Evaluations, Inc.
55 Water Street
45th Floor
New York, New York 10041
Phone: (212) 438-4595
Fax: (212) 438-3975
www.jjkenny/jjkenny/pser descrip data rep.html
Email: nrmsir_repository@sandp.com
10-106557.1
0
BOND PURCHASE AGREEMENT
March 15, 2005
City of Fayetteville
City Administration Building
113 West Mountain
Fayetteville, Arkansas 72701
KUTAK ROCK LLP
DRAFT 03/15/05
$3,725,000
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. 1 Project)
Series 2005
Ladies and Gentlemen:
On the basis of the representations, warranties and agreements and upon the terms and
conditions contained herein, the undersigned, Crews & Associates, Inc. (the "Underwriter"),
hereby offers to enter into this Bond Purchase Agreement (this "Bond Purchase Agreement")
with the City of Fayetteville, Arkansas (the "City") which, upon your acceptance of this offer,
will be binding upon you and upon the Underwriter. Terms not otherwise defined herein shall
have the same meanings as set forth in the Indenture defined and described below.
This offer is made subject to your acceptance of this Bond Purchase Agreement on or
before midnight on March 15, 2005.
1. General. Upon the terms and conditions and in reliance upon the City's
representations, warranties and covenants herein, the Underwriter hereby agrees to purchase
from the City, and the City hereby agrees to sell to the Underwriter, all (but not less than all) of
$3,725,000 City of Fayetteville, Arkansas Tax Increment Interest Accretion Bonds (Highway 71
East Square Redevelopment District No. 1 Project), Series 2005 (the "Bonds"), at the purchase
price (the "Purchase Price") of $3,576,000.00 (equal to the par amount of the Bonds less
underwriter's discount of $149,000.00).
The Bonds shall be issued by the City pursuant to the provisions of the Constitution and
laws of the State of Arkansas, including, particularly, Amendment 78 to the Constitution and
Arkansas Code Annotated (2003 Supp.) §§14-168-301 et seq. (the "Act").
The Bonds will constitute special and
and payable solely from (1) a pledge of and
defined below) of the City's Highway 71
"District") authorized under the Act, and (2
Fund, Project Fund and Redemption Fund e
April 15, 2005 (the "Indenture"), by and b
Fayetteville, Arkansas, as trustee (the "Tru
limited obligations of the City, secured solely by
lien on the receipts from the Tax Increment (as
last Square Redevelopment District No. I (the
moneys on deposit in the Revenue Fund, Bond
tablished by a Trust Indenture to be dated as of
:tween the City and The Bank of Fayetteville,
tee"), all as more particularly described in the
10-106556.1
Indenture. The Tax Increment has the meaning set forth in the Act and is determined by
multiplying the incremental increase in value of the real property within the District following its
creation by the maximum applicable ad valorem rate permitted pursuant to the Act.
The Bonds shall be issued and secured pursuant to Ordinance No. _ of the City
Council of the City which was adopted on March 15, 2005 (the "Authorizing Ordinance"), and
pursuant to the Indenture. The Bonds shall be issued in $5,000 denominations and integral
multiples of $5,000 in excess thereof, shall mature on August 1, 2029 and shall bear interest at
the rate of 6.50% per annum. Interest on the Bonds will accrete, compounded semiannually, as
shown on Exhibit A hereto. The Bonds shall be subject to redemption as set forth in the
Indenture and in the Official Statement (hereinafter defined).
The proceeds of the Bonds will be utilized (i) to pay the costs of the 2005 Project (as
defined in the Indenture), and (ii) to pay the costs of issuance of the Bonds.
The City will undertake, pursuant to a Continuing Disclosure Agreement to be dated as of
the date of delivery of the Bonds (the "Continuing Disclosure Agreement"), to provide certain
annual financial and operating information and notices of the occurrence of certain events, if
material, as required by Section (b)(5)(i) of Rule 15c2-12 under the Securities Exchange Act of
1934, as amended (the "Rule"). A description of this undertaking is set forth in the Preliminary
Official Statement and will also be set forth in the Official Statement (each hereinafter defined).
The City is not in default with respect to any of its obligations under previous undertakings
pursuant to the Rule.
In order to ensure compliance with the provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), the City will enter into a Tax Regulatory Agreement dated as of the
date of delivery of the Bonds (the "Tax Regulatory Agreement").
2. Bona Fide Public Offering. The Underwriter agrees to make a bona fide public
offering of all of the Bonds at the offering prices set forth on the cover of the final Official
Statement described below.
3. Delivery of Official Statement. (a) The City has previously provided the
Underwriter with copies of its Preliminary Official Statement, including the cover page
and the appendices thereto, dated March 11, 2005, relating to the Bonds (the "Preliminary
Official Statement"). As of its date, the Preliminary Official Statement is "deemed final"
by the City for purposes of SEC Rule 15c2 -12(b)(1). The Preliminary Official Statement,
as amended to conform to the terms of this Bond Purchase Agreement, including
Exhibit A hereto, and with such other changes and amendments as are mutually agreed to
by the City and the Underwriter, is herein referred to as the "Official Statement."
(b) The City agrees to deliver to the Underwriter, at such address as the
Underwriter shall specify, as many copies of the final Official Statement dated March 15,
2005, relating to the Bonds as the Underwriter shall reasonably request as necessary to
comply with paragraph (b)(4) of the Rule (as defined above) and with Rule G-32 and all
other applicable rules of the Municipal Securities Rulemaking Board. The City agrees to
10-106556.1
deliver such final Official Statement within seven (7) business days after the execution
hereof.
(c) The City hereby authorizes and approves the Preliminary Official
Statement and the final Official Statement, consents to their distribution and use by the
Underwriter and authorizes the execution of the final Official Statement by a duly
authorized officer of the City.
(d) The Underwriter shall give notice to the City on the date after which no
participating underwriter, as such term is defined in the Rule, remains obligated to deliver
final Official Statements pursuant to paragraph (b)(4) of the Rule.
4. City's Representation and Warranties. The City represents and warrants to the
Underwriter that:
(a) The City is a duly organized and existing political subdivision under the
Constitution and laws of the State of Arkansas (the "State"). The City is authorized by
the provisions of the Act to issue the Bonds for the purpose of financing the 2005 Project.
(b) The City has the full legal right, power and authority (i) to adopt
Ordinance Nos. 4608 and 4662 creating the District (collectively, the "Creation
Ordinances"), (ii) to adopt Ordinance Nos. 4646, 4663 and _ approving the project
plan for the District (collectively, the "Project Plan Ordinances"), (iii) to adopt the
Authorizing Ordinance authorizing the issuance of and sale of the Bonds, (iv) to enter
into this Bond Purchase Agreement, the Indenture, the Continuing Disclosure Agreement
and the Tax Regulatory Agreement, (v) to issue, sell and deliver the Bonds to the
Underwriter as provided herein, (vi) to pledge irrevocably the receipts of the Tax
Increment to the payment of the principal of, premium, if any, and interest on the Bonds,
and (vii) to carry out and consummate all other transactions contemplated by each of the
aforesaid documents, and the City has complied with all provisions of applicable law,
including the Act, in all matters relating to such transactions.
(c) The City has duly authorized (i) the execution and delivery of the Bonds
and the execution, delivery and due performance of this Bond Purchase Agreement, the
Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement,
(ii) the distribution and use of the Preliminary Official Statement and the execution,
delivery and distribution of the final Official Statement, and (iii) the taking of any and all
such actions as may be required on the part of the City to carry out, give effect to and
consummate the transactions contemplated by such instruments. All consents or
approvals necessary to be obtained by the City in connection with the foregoing have
been received, and the consents or approvals so received remain still in full force and
effect.
(d) The Creating Ordinances, the Project Plan Ordinances and the Authorizing
Ordinance have been duly adopted by City Council of the City, are each in full force and
effect and each constitutes the legal, valid and binding act of the City; and this Bond
Purchase Agreement, the Indenture, the Continuing Disclosure Agreement and the Tax
10-106556.1
Regulatory Agreement, when executed and delivered, will constitute legal, valid and
binding obligations of the City, and this Bond Purchase Agreement, the Indenture, the
Continuing Disclosure Agreement and the Tax Regulatory Agreement are enforceable
against the City in accordance with their respective terms, except as enforceability
thereof may be limited by bankruptcy, insolvency or other laws affecting creditors' rights
generally.
(e) When delivered to or at the direction of the Underwriter, the Bonds will
have been duly authorized, executed, authenticated, issued and delivered and will
constitute legal, valid and binding obligations of the City in conformity with the laws of
the State of Arkansas, including the Act, and will be entitled to the benefit and security of
the Authorizing Ordinance and the Indenture.
(I) The City has duly approved and authorized the distribution and use of the
Preliminary Official Statement and the execution, delivery and distribution of the Official
Statement.
(g) The information contained in the Preliminary Official Statement is, and as
of the Closing Date such information in the final Official Statement will be, true and
correct in all material respects, and the Preliminary Official Statement does not and the
final Official Statement will not contain any untrue or misleading statement of a material
fact or omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(h) If, at any time prior to the earlier of (i) receipt of notice from the
Underwriter pursuant to Section 3(d) hereof that Official Statements are no longer
required to be delivered under the Rule or (ii) 25 days after the Closing Date, any event
occurs as a result of which the Official Statement, as then amended or supplemented,
might include an untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading, the City shall promptly notify the Underwriter in writing of
such event. Any information supplied by the City for inclusion in any amendments or
supplements to the Official Statement will not contain any untrue or misleading statement
of a material fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
Upon the request of the Underwriter therefor, the City shall prepare and deliver to the
Underwriter, at the City's expense, as many copies of an amendment or supplement to the
Official Statement which will correct any untrue statement or omission therein as the
Underwriter may reasonably request.
(i) Neither the adoption of the Authorizing Ordinance, the Creating
Ordinances or the Project Plan Ordinances, the execution and delivery of this Bond
Purchase Agreement, the Bonds, the Indenture, the Continuing Disclosure Agreement or
the Tax Regulatory Agreement, nor the consummation of the transactions contemplated
herein or therein or the compliance with the provisions hereof or thereof will conflict
with, or constitute on the part of the City a violation of, or a breach of or default under, (i)
any statute, indenture, mortgage, commitment, note or other agreement or instrument to
10-106556.1
which the City is a party or by which it is bound, (ii) any provision of the Constitution of
the State of Arkansas, or (iii) any existing law, rule, regulation, ordinance, judgment,
order or decree to which the City (or the members of its City Council or any of its
officers in their respective capacities as such) is subject. All consents, approvals,
authorizations and orders of governmental or regulatory authorities, if any, which are
required for the City's execution and delivery of, consummation of the transactions
contemplated by, and compliance with the provisions of this Bond Purchase Agreement,
the Authorizing Ordinance, the Creating Ordinances, the Project Plan Ordinances, the
Bonds, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory
Agreement have been obtained.
(j) Except as is specifically disclosed in the Official Statement, there is no
action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, pending or, to the best knowledge of the City, threatened,
which in any way questions the powers of the City referred to in subparagraph 4(b)
above, or the validity of any proceeding taken by the City in connection with the issuance
of the Bonds or the pledge of the Tax Increment, or wherein an unfavorable decision,
ruling or fording could materially adversely affect the transactions contemplated by this
Bond Purchase Agreement, or of any other document or instrument required or
contemplated by the Bond financing, or which, in any way, could adversely affect the
validity or enforceability of the Authorizing Ordinance, the Creating Ordinances, the
Project Plan Ordinances, the Bonds, the Indenture, the Continuing Disclosure Agreement,
the Tax Regulatory Agreement or this Bond Purchase Agreement or, to the knowledge of
the City, which in any way questions the exclusion from gross income of the recipients
thereof of the interest on the Bonds for federal income tax purposes or in any other way
questions the status of the Bonds under federal or State of Arkansas tax laws or
regulations.
(k) Any certificate signed by any official of the City and delivered to the
Underwriter shall be deemed a representation and warranty by the City to the
Underwriter as to the truth of the statements therein contained.
(1) The City has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is a bond issuer whose arbitrage
certifications may not be relied upon.
(m) The City will not knowingly take or omit to take any action, which action
or omission will in any way cause the proceeds from the sale of the Bonds to be applied
in a manner other than as provided in the Indenture, or which would cause the interest on
the Bonds to be includable in gross income for federal income tax purposes.
10-106556.1
5. City's Covenants. The City covenants with the Underwriter as follows:
(a) The City will cooperate with the Underwriter in qualifying the Bonds for
offer and sale under the securities or Blue Sky laws of such jurisdictions of the
United States as the Underwriter may request; provided, however, that the City shall not
be required to consent to suit or to service of process in any jurisdiction. The City
consents to the use by the Underwriter in the course of its compliance with the securities
or Blue Sky laws of the various jurisdictions of the documents relating to the Bonds,
subject to the right of the City to withdraw such consent for cause by written notice to the
Underwriter.
(b) Prior to the earlier of (i) receipt of notice from the Underwriter pursuant to
Section 3(d) hereof that final Official Statements are no longer required under the Rule or
(ii) 25 days after the Closing Date, the City shall provide the Underwriter with such
information regarding the City, Tax Increment receipts, and the current financial
condition and valuation of property within the District, all as the Underwriter may
reasonably request.
6. Closing. At 10:00 a.m. Little Rock time on April 19, 2005, or at such other time
and/or date as shall have been mutually agreed upon by the City and the Underwriter (the
"Closing Date"), the City will deliver the Bonds, or cause the Bonds to be delivered, to or at the
direction of the Underwriter, said Bonds to be in definitive form duly executed by the City and
authenticated by The Bank of Fayetteville, Fayetteville, Arkansas, as trustee (the "Trustee"),
together with the other documents hereinafter mentioned; and the Underwriter will accept such
delivery and pay the Purchase Price of the Bonds by making a wire transfer of federal funds
payable to the order of the Trustee for the account of the City.
The Bonds shall be delivered to The Depository Trust Company in New York,
New York, and the activities relating to the final execution and delivery of the Authorizing
Ordinance, the Creating Ordinances, the Project Plan Ordinances, the Indenture, the Continuing
Disclosure Agreement and the Tax Regulatory Agreement and the other documents related to the
Bonds and the payment for the Bonds and the delivery of the certificates, opinions and other
instruments as described in Section 8 of this Bond Purchase Agreement shall occur in the offices
of Kutak Rock LLP, 425 West Capitol Avenue, Suite 1100, Little Rock, Arkansas ("Bond
Counsel") or at such other place as shall have been mutually agreed upon between the City and
the Underwriter. The payment for the Bonds and simultaneous delivery of the Bonds to or at the
direction of the Underwriter is herein referred to as the "Closing."
7. Underwriter's Right to Cancel. The Underwriter shall have the right to cancel
its obligation to purchase the Bonds hereunder by notifying the City in writing or by telegram of
its election to do so between the date hereof and the Closing, if at any time hereafter and prior to
the Closing:
(i) the House of Representatives or the Senate of the Congress of the
United States, or a committee of either, shall have pending before it, or shall have passed or
recommended favorably, legislation introduced previous to the date hereof, which
legislation, if enacted in its form as introduced or as amended, would have the purpose or
10-106556.1
effect of imposing federal income taxation upon revenues or other income of the general
character to be derived by the City or by any similar body under the Authorizing Ordinance
or the Indenture or similar documents or upon interest received on obligations of the general
character of the Bonds or the Bonds, or of causing interest on obligations of the general
character of the Bonds, or the Bonds, to be includable in gross income for purposes of
federal income taxation, and such legislation, in the Underwriter's opinion, materially
adversely affects the market price of the Bonds; or
(ii) ' a tentative decision with respect to legislation shall be reached by a
committee of the House of Representatives or the Senate of the Congress of the
United States, or legislation shall be favorably reported or rereported by such a committee or
be introduced, by amendment or otherwise, in or be passed by the House of Representatives
or the Senate, or recommended to the Congress of the United States for passage by the
President of the United States, or be enacted or a decision by a federal court of the
United States or the United States Tax Court shall have been rendered, or a ruling, release,
order, regulation or official statement by or on behalf of the United States Treasury
Department, the Internal Revenue Service or other governmental agency shall have been
made or proposed to be made having the purpose or effect, or any other action or event shall
have occurred which has the purpose or effect, directly or indirectly, of adversely affecting
the federal income tax consequences of owning the Bonds or of any of the transactions
contemplated in connection herewith, including causing interest on the Bonds to be included
in gross income for purposes of federal income taxation, or imposing federal income
taxation upon revenues or other income of the general character to be derived by the City or
by any similar body under the Authorizing Ordinance or the Indenture or similar documents
or upon interest received on obligations of the general character of the Bonds, or the Bonds
which, in the opinion of the Underwriter, materially adversely affects the market price of or
market for the Bonds; or
(iii) legislation shall have been enacted, or actively considered for enactment
with an effective date prior to the Closing, or a decision by a court of the United States shall
have been rendered, the effect of which is that the Bonds, including any underlying
obligations, or the Indenture, as the case may be, is not exempt from the registration,
qualification or other requirements of the Securities Exchange Act of 1933, as amended and
as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or
the Trust Indenture Act of 1939, as amended and as then in effect; or
(iv) a stop order, ruling, regulation or official statement by the Securities and
Exchange Commission or any other governmental agency having jurisdiction of the subject
matter shall have been issued or made or any other event occurs, the effect of which is that
the issuance, offering or sale of the Bonds, including any underlying obligations, or the
execution and delivery of the Indenture as contemplated hereby or by the Official Statement,
is or would be in violation of any provision of the federal securities laws, including the
Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of
1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and
as then in effect; or
10-106556.1
ELI
(v) any event shall have occurred or any information shall have become known
to the Underwriter which causes the Underwriter to reasonably believe that the Official
Statement as then amended or supplemented includes an untrue statement of a material fact,
or omits to state any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or
(vi) there shall have occurred any outbreak of hostilities or any national or
international calamity or crisis, including a financial crisis, the effect of which on the
financial markets of the United States is such as, in the reasonable judgment of the
Underwriter, would materially adversely affect the market for or market price of the Bonds;
or
(vii) there shall be in force a general suspension of trading on the New York
Stock Exchange, the effect of which on the financial markets of the United States is such as,
in the reasonable judgment of the Underwriter, would materially adversely affect the market
for or market price of the Bonds; or
(viii) a general banking moratorium shall have been declared by federal,
New York or State authorities; or
(ix) any proceeding shall be pending or threatened by the Securities and
Exchange Commission against the City; or
(x) additional material restrictions not in force as of the date hereof shall have
been imposed upon trading in securities generally by any governmental authority or by any
national securities exchange; or
(xi) there shall have been legislation enacted by the General Assembly of the
State of Arkansas or there shall have been a decision rendered by a court of competent
jurisdiction in the State of Arkansas that has, in the reasonable judgment of the Underwriter,
the effect of reducing the amount of the Tax Increment available to secure the Bonds; or
(xii) the New York Stock Exchange or other national securities exchange, or any
governmental authority, shall impose, as to the Bonds or obligations of the general character
of the Bonds, any material restrictions not now in force, or increase materially those now in
force, with respect to the extension of credit by, or the charge to the net capital requirements
of the Underwriter.
8. Conditions to Underwriter's Obligations. The obligation of the Underwriter to
purchase the Bonds shall be subject (a) to the performance by the City of its obligations to be
performed hereunder at and prior to the Closing, (b) to the accuracy of the representations and
warranties of the City herein as of the date hereof and as of the time of the Closing, and (c) to the
following conditions, including the delivery by the City of such documents as are enumerated
herein in form and substance satisfactory to the Underwriter:
(a) The Bonds shall have
been duly
authorized,
executed and delivered in
the
forms approved by the City in the
Indenture
with only
such changes therein as
the
8
10-106556.1
Underwriter and the City shall mutually agree upon, which shall in all instances be as
described in the final Official Statement;
(b) At the time of Closing, (i) the Official Statement, this Bond Purchase
Agreement, the Indenture, the Authorizing Ordinance, the Creating Ordinances, the
Project Plan Ordinances, the Continuing Disclosure Agreement and the Tax Regulatory
Agreement shall be in full force and effect and shall not have been amended, modified or
supplemented from the date hereof, except as may have been agreed to in writing by the
Underwriter, (ii) the proceeds of the sale of the Bonds and other funds shall be deposited
and applied as described in the Indenture, (iii) no default or event of default under the
Indenture shall have occurred and be continuing, and (iv) no material adverse change
affecting the City or the Tax Increment shall have occurred, nor shall any development
involving a prospective and material adverse change in, or affecting the business,
financial condition, results of operations, prospects or properties of the District or the
City have occurred;
(c) Receipt of fully executed originals of the Indenture, the Continuing
Disclosure Agreement and the Tax Regulatory Agreement at or prior to the Closing;
(d) At or prior to the Closing, the Underwriter shall receive the following
documents in such number of counterparts as shall be mutually agreeable to the
Underwriter and Bond Counsel:
(1) A final approving opinion of Bond Counsel, dated the Closing
Date, in substantially the form set forth in Exhibit B hereto;
(2) A supplemental opinion of Bond Counsel, addressed to the City,
the Trustee and the Underwriter and dated the Closing Date, in substantially the
form set forth in Exhibit C hereto;
(3) The Official Statement executed by a duly authorized officer of the
City;
(4) Certified copies of the Authorizing Ordinance, the Creating
Ordinances and the Project Plan Ordinances and all other ordinances and
resolutions of the City relating to the Bonds;
(5) Photocopies of the Bonds as executed and delivered;
(6) A certificate, in form and substance satisfactory to the
Underwriter, of any duly authorized officer or official of the City satisfactory to
the Underwriter, dated as of the Closing Date, to the effect that: (i) each of the
City's representations, warranties and covenants contained herein are true and
correct as of the Closing Date; (ii) the City has duly adopted the Authorizing
Ordinance, the Creating Ordinances and the Project Plan Ordinances by all action
necessary under the Act and the laws and Constitution of the State of Arkansas,
including Amendment 78, and has duly authorized the execution, delivery and
due performance of the Bonds, the Indenture, the Continuing Disclosure
10-106556.1
Agreement, the Tax Regulatory Agreement, the Official Statement and this Bond
Purchase Agreement; (iii) no litigation is pending, or to the knowledge of the
officer or official of the City signing the certificate after due investigation and
inquiry, threatened, to restrain or enjoin the issuance or sale of the Bonds or in
any way affecting any authority for or the validity of the Bonds, the Tax
Increment, the Official Statement, the Authorizing Ordinance, the Creating
Ordinances, the Project Plan Ordinances, the Indenture, the Continuing Disclosure
Agreement, the Tax Regulatory Agreement, or this Bond Purchase Agreement;
(iv) the Bonds, the Indenture, this Bond Purchase Agreement, the Continuing
Disclosure Agreement and the Tax Regulatory Agreement, as executed and
delivered by the City, are in the form or in substantially the form approved for
such execution by appropriate proceedings of the City; (v) none of the
Authorizing Ordinance, the Creating Ordinances nor the Project Plan Ordinances
have been amended, modified or repealed as of the Closing Date, and the
Authorizing Ordinance, the Creating Ordinances and the Project Plan Ordinances
remain in full force and effect; (vi) none of the proceedings of the City taken
preliminary to the issuance of the Bonds, as certified in such certificate, have been
in any manner repealed, amended or changed; (vii) the City has complied in all
respects with the provisions of the Act and has full legal right, power and
authority to issue the Bonds for the purposes stated in the Act and to enter into
this Bond Purchase Agreement, to adopt the Authorizing Ordinance, the Creating
Ordinances and the Project Plan Ordinances, to issue, sell and deliver the Bonds
as provided in this Bond Purchase Agreement, and to carry out and consummate
all other transactions contemplated by this Bond Purchase Agreement, the
Authorizing Ordinance, the Creating Ordinances, the Project Plan Ordinances, the
Indenture, the Continuing Disclosure Agreement and the Tax Regulatory
Agreement; (viii) neither the Official Statement nor any amendment or
supplement thereto contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading; and (ix) to the best knowledge of the officer or official of the City
signing the certificate, no event affecting the City or the Tax Increment has
occurred since the date of the Official Statement which should be disclosed in the
Official Statement for the purposes for which it is used that is necessary to
disclose therein in order to make the statements and information therein not
misleading in any respect;
(7) An opinion of Kit Williams, Esq., City Attorney, dated the Closing
Date and addressed to the Underwriter, Bond Counsel and the Trustee, to the
effect that (i) the City is a duly organized and validly existing political
subdivision and city of the first class, organized under the laws of the State of
Arkansas, with full power and authority to adopt the Authorizing Ordinance, the
Creating Ordinances and the Project Plan Ordinances, to execute and deliver the
Bonds, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory
Agreement and this Bond Purchase Agreement; (ii) the City has duly approved
the Preliminary Official Statement and the Official Statement; (iii) the
Authorizing Ordinance, the Creating Ordinances and the Project Plan Ordinances
10
10-106556.1
have been duly adopted by the City by all action necessary under the Act and the
laws and Constitution of the State of Arkansas, and remain in full force and
effect; (iv) the Indenture, the Continuing Disclosure Agreement, the Tax
Regulatory Agreement and this Bond Purchase Agreement have been duly
authorized, approved, executed and delivered by the City and, subject to the
extent that the enforceability of the rights and remedies set forth therein may be
limited by bankruptcy, insolvency or other laws affecting creditors' rights
generally, constitute valid and binding agreements of the City enforceable in
accordance with their terms; (v) the information in the Official Statement under
the captions "THE PROJECT," "THE CITY AND THE DISTRICT" and
"LEGAL MATTERS" (apart from financial or statistical data contained or
incorporated therein, as to which no view need be expressed) is fair, accurate and
complete and does not omit any matter which, in such counsel's opinion, for the
purposes for which the Official Statement is to be used, should be included or
referred to therein; (vi) excepting those matters discussed in the Official
Statement, there is no action, suit or proceeding at law or in equity before or by
any court, public board or body, pending or threatened, against or affecting the
City, challenging the validity of the transactions contemplated by the Official
Statement or the validity of the Bonds, the Tax Increment, the Authorizing
Ordinance, the Creating Ordinances, the Project Plan Ordinances, the Indenture,
the Continuing Disclosure Agreement, the Tax Regulatory Agreement or this
Bond Purchase Agreement and, to the best of such counsel's knowledge, there is
no investigation, pending or threatened, and no threatened action, suit or
proceeding involving any of the matters hereinabove mentioned in this clause
(vi); (vii) the execution and delivery of the Authorizing Ordinance, the Creating
Ordinances, the Project Plan Ordinances, the Indenture, the Continuing Disclosure
Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement,
and compliance with the provisions hereof and thereof, under the circumstances
contemplated hereby and thereby, do not and will not in any material respect
conflict with or constitute on the part of the City a breach of or default under any
agreement or other instrument to which the City is a party or any existing law,
regulation, court order or consent decree to which the City is subject; and
(viii) based upon the examinations which such counsel has made as counsel to the
City, which shall be specified, nothing has come to such counsel's attention which
would lead such counsel to believe that the Official Statement (except for the
financial statements and other financial data included in the Official Statement, as
to which no view need be expressed) contains an untrue statement of a material
fact or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;
(8) Evidence that Federal Form 8038-G has been executed by the City
and is ready for filing with the Internal Revenue Service.
(9) Evidence that, except as disclosed in the Official Statement, all
necessary approvals, whether legal or administrative, have been obtained from
applicable federal, state and local entities and agencies; and
11
10-106556.1
(10) Such additional legal opinions, certificates, proceedings,
instruments and other documents as the Underwriter and Bond Counsel may
reasonably request to evidence compliance by the City with legal requirements,
the truth and accuracy, as of the time of Closing, of the representations of the City
herein contained and the due performance or satisfaction by the City at or prior to
such time of all agreements then to be performed and all conditions then to be
satisfied.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriter
contained in this Bond Purchase Agreement, or if the obligation of the Underwriter to purchase
and accept delivery of the Bonds shall be terminated for any reason permitted by this Bond
Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter
nor the City shall be under further obligation hereunder; except that the respective obligations to
pay expenses, as provided in Section 12 hereof, shall continue in full force and effect.
9. Conditions to Obligations of the City. The obligations of the City hereunder are
subject to the performance by the Underwriter of its obligations hereunder.
10. Survival. All representations, warranties and agreements of the City shall remain
operative and in full force and effect, regardless of any investigations made by or on behalf of
the Underwriter, and shall survive the Closing. The obligations of the City under Sections 11 or
12 hereof shall survive any termination of this Bond Purchase Agreement by the Underwriter
pursuant to the terms hereof.
11. Indemnification. The City, to the extent permitted by law, agrees to indemnify
and hold harmless the Underwriter, each member, officer, director, partner or employee of the
Underwriter and each person who controls the Underwriter within the meaning of Section 15 of
the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as
amended (collectively called the "Indemnified Parties"), against any and all losses, claims,
damages, liabilities or expenses (including any legal or other expenses incurred by an
Indemnified Party in connection with investigating any claims against an Indemnified Party and
defending any actions) whatsoever caused by any untrue statement or misleading statement or
alleged untrue statement or alleged misleading statement of a material fact contained in the
Official Statement or caused by any omission or alleged omission from the Official Statement of
any material fact required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading insofar as
such losses, claims, damages, liabilities or expenses are caused by any such untrue or misleading
statement or omission or alleged untrue or misleading statement or omission in the information
contained in the Official Statement; provided, however, that the City shall not be liable to an
Indemnified Party in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any of such documents in reliance upon and in conformity
with written information furnished to the City by the Underwriter specifically for use therein.
No Indemnified Parties shall be indemnified hereunder for any losses, claims, damages or
liabilities resulting from the negligence of such Indemnified Parties.
12
10-106556.1
•
12. Payment of Expenses. The City will pay or cause to be paid all reasonable
expenses incident to the performance of its obligations under this Bond Purchase Agreement,
including, but not limited to, expenses of mailing or delivery of the Bonds, costs of printing the
Bonds, the Preliminary and final Official Statements, any amendment or supplement to the
Preliminary or final Official Statement and this Bond Purchase Agreement, fees and
disbursements of Bond Counsel, any fees charged by investment rating agencies for the rating of
the Bonds, bond insurance premiums, if any, fees of the Trustee and any paying agent fees, and
any fees and disbursements in connection with the qualification of the Bonds for sale under the
securities or "Blue Sky" laws of the various jurisdictions and the preparation of "Blue Sky"
memoranda. In the event this Bond Purchase Agreement shall terminate because of the default
of the Underwriter, the City will, nevertheless, pay, or cause to be paid, all of the expenses
specified above. The Underwriter shall pay all advertising expenses in connection with the
public offering of the Bonds, and all other expenses incurred by it in connection with the public
offering and distribution of the Bonds, including the fees and expenses of any counsel retained
by the Underwriter. If the City defaults under this Bond Purchase Agreement, the Underwriter
may bring whatever legal action it may have against the City to recover damages, if any, incurred
by the Underwriter.
13. Notices. Any notice or other communication to be given to the City under this
Bond Purchase Agreement may be given by delivering the same in writing to the Mayor at the
address set forth above, and any notice or other communication to be given to the Underwriter
under this Bond Purchase Agreement may be given by delivering the same in writing to Crews &
Associates, Inc., First Security Center, 521 President Clinton Avenue, Suite 800, Little Rock, AR
72201, Attention: Mr. Robert Wright.
14. Nonassignability. This Bond Purchase Agreement is made solely for the benefit
of the City and the Underwriter (including any successor or assign of the Underwriter), and no
other person, including any purchaser of the Bonds, shall acquire or have any right hereunder or
by virtue hereof.
15. Applicable Law. This Bond Purchase Agreement shall be governed by and
construed in accordance with the laws of the State of Arkansas.
13
10-106556.1
16. Counterparts. This Bond Purchase Agreement shall become effective upon your
acceptance hereof and may be executed in counterparts, each of which shall be regarded as an
original and all of which shall constitute one and the same document.
Very truly yours,
CREWS & ASSOCIATES, INC.
By:
Authorized Representative
TIME
Accepted and agreed to as of
the date first above written:
CITY OF FAYETTEVILLE, ARKANSAS
By:
Title: Mayor
14
104 06556.1
•..
EXHIBIT A
ACCRETION SCHEDULE
Date Accreted Value of a $5,000
Bond
4-19-05
$ 5,000.00
8-1-05
5,092.08
2-1-06
5,257.58
8-1-06
5,428.45
2-1-07
5,604.87
8-1-07
5,787.03
2-1-08
5,975.11
8-1-08
6,169.30
2-1-09
6,369.80
8-1-09
6,576.82
2-1-10
6,790.57
8-1-10
7,011.26
2-1-11
7,239.13
8-1-11
7,474.40
2,1-12
7,717.32
8-1-12
7,968.13
2-1-13
8,227.09
8-1-13
8,494.47
2-1-14
8,770.54
8-1-14
9,055.59
2-1-15
9,349.89
8-1-15
9,653.76
2-1-16
9,967.51
8-1-16
10,291.46
2-1-17
10,625.93
8-1-17
10,971.27
2-1-18
11,327.84
8-1-18
11,695.99
2-1-19
12,076.11
8-1-19
12,468.59
2-1-20
12,873.81
8-1-20
13,292.21
2-1-21
13,724.21
8-1-21
14,170.25
2-1-22
14,630.78
8-1-22
15,106.28
2-1-23
15,597.23
8-1-23
16,104.15
2-1-24
16,627.33
10-106556.1 A-1
r
8-1-24
2-1-25
8-1-25
2-1-26
8-1-26
2-1-27
8-1-27
2-1-28
8-1-28
2-1-29
8-1-29
10-106556.1 A-2
Accreted Value
of
a $5000
Bond
17,167.92
17,725.88
18,301.97
18,896.79
19,510.93
20,145.04
20,799.75
21,475.74
22,173.71
22,894.35
23,638.42
EXHIBIT B
PROPOSED FORM OF BOND COUNSEL APPROVING OPINION
Upon delivery of the Bonds in definitive form, Kutak Rock LLP, Little Rock, Arkansas,
proposes to deliver its approving opinion in substantially the following form:
April _, 2005
City of Fayetteville, Arkansas
Fayetteville, Arkansas
The Bank of Fayetteville, as Trustee
Fayetteville, Arkansas
Crews & Associates, Inc.
Little Rock, Arkansas
$3,725,000
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. 1 Project)
Series 2005
Ladies and Gentlemen:
We have acted as bond counsel in connection with the issuance and sale by the City of
Fayetteville, Arkansas (the "City"), a political subdivision of the State of Arkansas, of its
$3,725,000 Tax Increment Interest Accretion Bonds (Highway 71 East Square Redevelopment
District No. I Project), Series 2005 (the "Bonds").
The Bonds are being issued pursuant to the provisions of the Constitution and laws of the
State of Arkansas, including, particularly, Amendment 78 and Arkansas Code Annotated (Supp.
2003) §§14-168-301 et seq. (as from time to time amended, the "Act"), pursuant to Ordinance
No. of the City, duly adopted and approved on Marches 2005 (the "Authorizing
Ordinance"), and pursuant to a Trust Indenture dated as of April 15, 2005 (the "Indenture"), by
and between the City and The Bank of Fayetteville, as trustee (the "Trustee"). Reference is
hereby made to the Indenture and to all indentures supplemental thereto for the provisions,
among others, with respect to the conditions for the issuance of parity debt by the City, the
nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the
Trustee and the Holders of the Bonds, and the terms upon which the Bonds are issued and
secured.
Reference is made to an opinion of even date herewith of Kit Williams, Esq., City
Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the
10-106556.1 B -I
status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance
and to enter into and perform its obligations under the Indenture, the valid adoption of the
Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the
City, and with respect to the Indenture being enforceable upon the City.
We have examined the law and such certified proceedings and other papers as we have
deemed necessary to render this opinion. As to questions of fact material to our opinion, we
have relied upon the representations of the City contained in the Authorizing Ordinance and the
Indenture and in the certified proceedings and other certifications of public officials furnished to
us, without undertaking to verify the same by independent investigation.
Based upon the foregoing, we are of the opinion, under existing law, as follows:
1. The City is duly created and validly existing as a municipal corporation of the
State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including,
particularly, Amendment 78. and the Act, the City is empowered to adopt the Authorizing
Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained
therein, and to issue the Bonds.
2. The Authorizing Ordinance has been duly adopted by the City and constitutes a
valid and binding obligation of the City enforceable upon the City in accordance with its terms.
3. The Indenture has been duly authorized, executed and delivered by the City and is
a valid and binding obligation of the City enforceable upon the City in accordance with its terms.
4. The Bonds have been validly authorized, executed, issued and delivered by the
City and represent valid and binding special obligations of the City. The principal, premium, if
any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and
pledge by the City to the Trustee of, the receipts of the Tax Increment (as defined in the
Indenture).
5. The Tax Increment receipts have been duly and validly assigned and pledged to
the Trustee under the Indenture.
6. Interest on the Bonds is excluded from gross income for federal income tax
purposes and is not a specific preference item for purposes of the federal alternative minimum
tax. The opinion described in the preceding sentence assumes the accuracy of certain
representations and compliance by the City with covenants designed to satisfy the requirements
of the Internal Revenue Code of 1986, as amended, that must be met subsequent to the issuance
of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be
included in gross income for federal income tax purposes retroactive to the date of issuance of
the Bonds. The City has covenanted to comply with such requirements.
7. The interest on the Bonds is exempt from all state, county and municipal taxes in
the State of Arkansas.
10-106556.1 B-2
8.
The Bonds are exempt from
registration pursuant to the Securities Act of
1933, as
amended, and
the Indenture is not required
to be qualified under the Trust Indenture Act
of 1939,
as amended, in connection with the offer and sale of the Bonds.
It is to be understood that the rights of the registered owners of the Bonds and the
enforceability of the Bonds, the Authorizing Ordinance and the Indenture may be subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors'
rights heretofore or hereafter enacted to the extent constitutionally applicable and that their
enforcement may also be subject to the exercise of judicial discretion in appropriate cases.
Very truly yours,
10-106556.1 B-3
EXHIBIT C
PROPOSED FORM OF BOND COUNSEL SUPPLEMENTAL OPINION
April_, 2005
City of Fayetteville, Arkansas
Fayetteville, Arkansas
The Bank of Fayetteville, as Trustee
Fayetteville, Arkansas
Crews & Associates, Inc.
Little Rock, Arkansas
$3,725,000
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 Eat Square Redevelopment District No. I Project)
Series 2005
Ladies and Gentlemen:
This opinion supplements our bond approving opinion, dated the date hereof, relating to
the above -captioned bonds (the "Bonds"). Except as otherwise defined herein, the terms used
herein shall have the meanings prescribed for them in said opinion.
We have examined the law and such certified proceedings and other papers as we have
deemed necessary to render this opinion. As to questions of fact material to our opinion, we
have relied upon the representations of the City contained in the Indenture and in the certified
proceedings and other certifications of public officials furnished to us, without undertaking to
verify the same by independent investigation.
In addition to the documents specifically mentioned in the approving opinion, in
connection with this opinion we have also examined:
(a) An executed counterpart of the Bond Purchase Agreement dated March
_, 2005 (the "Bond Purchase Agreement"), by and between the City and Crews &
Associates, Inc., as underwriter (the "Underwriter");
(b) An executed counterpart of the Continuing Disclosure Agreement dated
April _, 2005 (the "Disclosure Agreement"), by and between the City and The Bank of
Fayetteville, as trustee (the "Trustee");
(c) An executed counterpart of the Tax Regulatory Agreement dated April _,
2005 (the "Tax Regulatory Agreement"), by and between the City and the Trustee; and
10-106556.1 C- I
S
(d) Portions of the Official Statement dated March _, 2005, with respect to
the Bonds (the "Official Statement"), captioned "INTRODUCTORY STATEMENT,"
"THE SERIES 2005 BONDS," "SECURITY FOR THE BONDS,", "ESTIMATED
SOURCES AND USES OF FUNDS," "DEFINITIONS OF CERTAIN TERMS,"
"SUMMARY OF THE INDENTURE," "SUMMARY OF THE CONTINUING
DISCLOSURE AGREEMENT," "I'AX EXEMPTION," and "APPENDIX A — Form of
Opinion of Bond Counsel" (the "Relevant Captions") insofar as they relate to this
opinion.
Based on our examination, we are of the opinion, as of the date hereof and under existing
law, as follows:
1. The Bond Purchase Agreement has been duly authorized, executed and
delivered by the City and, assuming due authorization, execution and delivery by the
Underwriter, the Bond Purchase Agreement constitutes the valid and binding agreement
of the City enforceable in accordance with its terms.
2. The Disclosure Agreement has been duly authorized, executed and
delivered by the City and, assuming due authorization, execution and delivery by the
Trustee, the Disclosure Agreement constitutes the valid and binding agreement of the
City enforceable in accordance with its terms.
3. The Tax Regulatory Agreement has been duly authorized, executed and
delivered by the City and, assuming due authorization, execution and delivery by the
Trustee, the Tax Regulatory Agreement constitutes the valid and binding agreement of
the City enforceable in accordance with its terms.
4. The statements contained in the Official Statement under the Relevant
Captions, insofar as such statements purport to summarize certain provisions of the
Bonds, the Indenture and the Continuing Disclosure Agreement, or conclusions of law
and legal opinions, are true, accurate and correct summaries thereof in all material
respects and do not omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading.
The enforceability of the respective obligations of the parties to the documents and other
items described above, and the availability of certain rights and remedies provided for therein,
may be limited by bankruptcy, receivership, insolvency, reorganization, moratorium, marshalling
or other similar statutes or rules of law affecting creditors' rights and remedies, to general
principles of equity and to the discretion of any court in granting any relief or issuing any order,
whether the proceeding is considered a proceeding at law or equity. In particular, the right to
indemnification under any of the documents or other items described above may be limited by
federal of state securities laws or by the public policy underlying such laws.
This opinion is being rendered to you solely for your use and benefit and may not be
relied upon in any manner, nor used, by any other person.
Very truly yours,
10-106556.1 C-2
KUTAK ROCK LLP
DRAFT 03/09/05
CITY OF FAYETTEVILLE, ARKANSAS
to
as Trustee
TRUST INDENTURE
Dated as of April 15, 2005
Providing for:
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. I Project)
Series 2005
Prepared by:
Kutak Rock LLP
425 West Capitol Avenue, Suite 1100
Little Rock, Arkansas 72201
10-708315
0
TABLE OF CONTENTS
0
(This Table of Contents is not a part of the Trust
Indenture and is only for convenience of reference.)
Parties..........................................................................................
Recitals......................................................................................................
GrantingClauses.......................................................................................
ARTICLE I
DEFINITIONS
Section 101. Definitions ..............................................
Section 102. Use of Words .........................................
ARTICLE II
THE BONDS
...........0..
...0..........
Section 201.
Security for the Bonds...................................................................................10
Section 202.
Authorized Amount.......................................................................................11
Section 203.
Details of Bonds.............................................................................................
11
Section204.
Form...............................................................................................................
11
Section205.
Payment..........................................................................................................
12
Section206.
Execution.......................................................................................................
12
20 Section 7.
Authentication................................................................................................
12
Section 208.
Delivery of the Bonds....................................................................................12
Section 209.
Mutilated, Destroyed or Lost Bonds..............................................................
13
Section 210.
Registration and Transfer of Bonds...............................................................
I4
Section211.
Cancellation...................................................................................................
15
Section212.
Additional Bonds...........................................................................................15
Section 213.
Superior Obligations Prohibited....................................................................
15
Section 214.
[RESERVED]................................................................................................
16
Section215.
Temporary Bonds...........................................................................................16
ARTICLE III
REDEMPTION OF BONDS BEFORE MATURITY
Section 301. Redemption.........................................................................
Section302. Notice..................................................................................
Section 303. Selection of Bonds to be Redeemed ...................................
Section 304. Surrender of Bonds Upon Redemption ...............................
10-70831.5 i
16
17
17
17
Section
305.
Redemption in Part........................................................................................
17
Section
306.
Payment of Redemption Price.......................................................................18
Section
307.
Redemption of Additional Bonds..................................................................18
ARTICLE IV
GENERAL COVENANTS AND REPRESENTATIONS
Section 401. Payment of Principal, Premium, if any, and Interest ..................................... 18
Section 402. Performance of Covenants.............................................................................18
Section 403. Instruments of Further Assurance.................................................................. 19
Section 404. Recordation and Filing. 19
Section 405. Inspection of Books....................................................................................... 19
Section406. Tax Covenants............................................................................................... 19
Section 407. Trustee's and Paying Agent's Fees and Expenses ......................................... 19
Section 408. Completion of Project; Certification of Completion Date ............................. 20
Section 409. Encumbrances................................................................................................ 20
Section 410. Continuing Disclosure................................................................................... 20
ARTICLE V
FUNDS AND DEPOSITS
Section
Section502.
Section503.
Section504.
Section
501.
505.
Creation of Funds and Accounts....................................................................
Project Fund...............................................................................................
Revenue Fund................................................................................................
Bond Fund......................................................................................................
Cost of Issuance Fund....................................................................................
20
.21
22
23
23
Section506.
Section507.
Section
Section
508.
509.
Redemption Fund...........................................................................................
Rebate Fund...................................................................................................
Debt Service Reserve Fund............................................................................
Cessation of Fund Deposits...........................................................................
23
24
25
25
Section
510.
Separate Accounts Authorized.......................................................................
25
ARTICLE VI
INVESTMENTS
Section 601. Investment of Moneys.................................................................................... 26
Section 602. Investment Earnings....................................................................................... 26
Section 603. Responsibility of Trustee............................................................................... 27
10-70831.5 ii
ARTICLE VII
DISCHARGE OF LIEN
Section
701.
Discharge of Lien...........................................................................................
27
Section
702.
Bonds Deemed Paid.......................................................................................
27
Section
703.
Non -Presentment of Bonds............................................................................
27
ARTICLE VIII
DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS
Section
801.
Events of Default...........................................................................................
28
Section802.
Acceleration...................................................................................................
28
Section
803.
Other Remedies; Rights of Bondholders.......................................................
29
Section
804.
Right of Bondholders to Direct Proceedings .................................................
29
Section
805.
Appointment of Receiver...............................................................................
29
Section806.
Waiver............................................................................................................
29
Section
807.
Application of Moneys..................................................................................
30
Section
808.
Remedies Vested in Trustee...........................................................................
31
Section
809.
Rights and Remedies of Bondholders............................................................
31
Section
810.
Termination of Proceedings...........................................................................
32
Section
811.
Waivers of Events of Default.........................................................................
32
ARTICLE IX
TRUSTEE AND PAYING AGENTS
Section 901.
Acceptance of Trusts...................................................................................... 32
Section
902.
Fees, Charges and Expenses of Trustee and Paying Agents; Trustee's
PriorLien................................................................................................
.... 34
Section
903.
Additional Duties of Trustee..........................................................................
35
Section
904.
Notice to Bondholders of Default..................................................................35
Section
905.
Intervention by Trustee..................................................................................
36
Section
906.
Merger or Consolidation of Trustee...............................................................
36
Section
907.
Resignation by Trustee..................................................................................
36
Section
908.
Removal of Trustee........................................................................................
36
Section
909.
Appointment of Successor Trustee................................................................
36
Section
910.
Concerning Any Successor Trustee...............................................................
36
Section
911.
Reliance Upon Instruments............................................................................
37
Section
912.
Appointment of Co-Trustee...........................................................................
37
Section
913.
Designation and Succession of Paying Agents ..............................................
38
10-70831.5 iii
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 1001.
Section 1002.
Section 1003.
Section 1101.
Section 1102.
Section 1103.
Section 1104.
Section 1105.
Section 1106.
Section 1107.
Section 1108.
Section 1109.
Section 1110.
Exhibit A
Exhibit B
Exhibit C
Supplemental Indentures Not Requiring Consent of Bondholders ................ 38
Supplemental Indentures Requiring Consent of Bondholders ....................... 39
Effect of Supplemental Indentures................................................................. 40
ARTICLE XI
MISCELLANEOUS
Consents, etc. of Bondholders .....................
Notices..........................................................
Limitation of Rights ......................................
Severability...................................................
Applicable Provisions of Law.......................
Counterparts..................................................
Successors and Assigns .................................
Captions........................................................
Photocopies and Reproductions....................
Bonds Owned by the City .............................
Form of Series 2005 Bond .................
Form of Requisition............................,
Series 2005 Bond Accretion Schedule
10-70831.5 iv
................................................. 40
................................................. 40
................................................. 41
................................................. 41
................................................. 41
................................................. 41
.....................6........................... 41
................................................. 41
................................................. 41
................................................. 42
A-1
B-1
C-1
TRUST INDENTURE
THIS TRUST INDENTURE is made and entered into as of April 15, 2005, by and
between the CITY OF FAYETTEVILLE, ARKANSAS (the "City"), a city of the first class
organized under and existing by virtue of the laws of the State of Arkansas, and [TRUSTEE
NAME], as trustee (the "Trustee"), a organized under and existing by virtue of
the laws of the and having its principal corporate trust office in
Arkansas;
WITNESSETH:
WHEREAS, the City Council of the City has determined that there is a great need for a
source of revenue to finance the costs of alleviating certain blight and encouraging economic
development within the City and in furtherance of such purposes has created the Highway 71
East Square Redevelopment District No. I (the "District") pursuant to Ordinance No. 4608
adopted on August 17, 2004, as amended by Ordinance No. 4662 adopted on December 28,
2004; and
WHEREAS, the specific actions needed to alleviate such blight and encourage such
development consist of (i) the acquisition of certain real property and the demolition of existing
structures thereon, which property is located within the District and consists of the former
Mountain Inn property and surrounding parcels, and (ii) the construction of certain sidewalk and
crosswalk improvements within the District (the "2005 Project"); and
WHEREAS, following the acquisition and demolition components of the 2005 Project
described above, and upon the satisfaction of certain conditions set forth in that certain 2005
Redevelopment Agreement of even date herewith, the City intends to transfer the cleared real
property to for the purpose of constructing a hotel and meeting facility thereon;
and
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas, including particularly Amendment 78 to the
Constitution of the State of Arkansas ("Amendment 78") and Arkansas Code Annotated (2003
Supp.) Sections 14-168-301 et seq. (as from time to time amended, the "Act"), to issue and sell
its bonds to finance the costs of various capital improvements within the District such as those
comprising the 2005 Project, which bonds are to be secured by and payable from the ad valorem
tax increment described in and authorized by the Act; and
WHEREAS, pursuant to the provisions of Ordinance No. of the City, adopted by
the City Council on [March 15], 2005 (the "Authorizing Ordinance"), and in accordance with the
provisions of Amendment 78 and the Act, the City proposes to issue its Tax Increment Interest
Accretion Bonds (Highway 71 East Square Redevelopment District No. 1 Project), Series 2005
(the "Series 2005 Bonds") in the aggregate principal amount of $ , in order to
provide for the financing of the 2005 Project; and
10-70831.5
0
WHEREAS, the City has further determined to enter into this Indenture to authorize the
issuance of and to secure the Series 2005 Bonds by granting to the Trustee a pledge and
assignment of the interests and other rights herein contained, and certain funds and accounts
created hereby; and
WHEREAS, the Series 2005 Bonds are to be dated, bear interest, mature and be subject
to redemption as hereinafter in this Indenture set forth in detail; and
WHEREAS, provision is made in this Indenture for the issuance of Additional Bonds
(hereinafter defined) upon compliance with certain conditions set forth herein; and
WHEREAS, the execution and delivery of this Indenture and the issuance of the Series
2005 Bonds have been in all respects duly and validly confirmed, authorized and approved under
the provisions of the Authorizing Ordinance; and
WHEREAS, all things necessary to make the Series 2005 Bonds, when authenticated by
the Trustee and issued as in this Indenture provided, the valid, binding and legal obligations of
the City according to the import thereof, and to constitute this Indenture a valid pledge of the Tax
Increment (as defined herein) to the payment of the principal of, premium, if any, and interest on
the Series 2005 Bonds, as specified in and in accordance with the provisions hereof, have been
done and performed, and the creation, execution and delivery of this Indenture and the creation,
execution, issuance and delivery of the Series 2005 Bonds, subject to the terms hereof, have in
all respects been duly authorized;
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, THIS
INDENTURE WITNESSETH:
That the City, in consideration of the premises and the acceptance by the Trustee of the
trusts hereby created and of the purchase and acceptance of the Series 2005 Bonds by the
Holders and owners thereof, and the sum of Ten Dollars ($10.00), lawful money of the United
States of America, to it duly paid by the Trustee, at or before the execution and delivery of these
presents, and for other good and valuable consideration, the receipt of which is hereby
acknowledged, and in order to secure the payment of the principal of, premium, if any, and
interest on the Series 2005 Bonds and all Additional Bonds (hereinafter defined), if any,
according to their tenor and effect, and to secure the performance and observance by the City of
all the covenants expressed or implied herein and in the Series 2005 Bonds and Additional
Bonds (collectively, the "Bonds"), does hereby grant, bargain, sell, convey, mortgage, assign,
transfer and pledge unto the Trustee, and unto its successor or successors in trust, and to them
and their assigns forever, for the securing of the performance of the obligations of the City
hereinafter set forth the following:
1.
Subject only to the provisions of this Indenture permitting the application thereof for the
purposes and on the terms and conditions set forth herein, the Tax Increment (as defined herein)
and the Revenue Fund established by this Indenture, which are hereby irrevocably assigned and
pledged to secure all obligations under this Indenture; and
10-70831.5
* 0
2.
Separately to each series of Bonds issued hereunder, but subject to the provisions of this
Indenture permitting the application thereof for the purposes and on the terms and conditions set
forth herein, the related Accounts of the Bond Fund, the Debt Service Reserve Fund, the Project
Fund and the Redemption Fund established by this Indenture, including the investment earnings
thereon, if any; and
3.
Any and all other properties, rights and interests of every kind and nature (including any
proceeds realized upon the sale of the real property acquired with the proceeds of the sale of the
Series 2005 Bonds) from time to time which have been, are hereby, or hereafter are, by delivery
or by writing or transfer of any kind, conveyed, mortgaged, pledged, assigned or transferred, as
and for additional security hereunder, by the City or by any other Person, firm or corporation, or
with the written consent of the City, to the Trustee, which is hereby authorized to receive any
and all such properties, rights and interests at any time and at all times and to hold and apply the
same subject to the terms hereof.
TO HAVE AND TO HOLD all the same (the "Trust Estate") with all privileges and
appurtenances hereby conveyed and assigned, or agreed or intended so to be, to the Trustee and
its successors in said trusts and to them and their assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal
and proportionate benefit, security and protection of all owners of the said Bonds issued under
and secured by this Indenture (except as to the separate security described in clause 2 above);
without privilege, priority or distinction as to lien or otherwise of any of the Bonds over any of
the other Bonds; and provided further, that if the City, its successors or assigns, shall well and
truly pay, or cause to be paid, the principal of, premium, if any, and interest due on the Bonds, at
the times and in the manner provided in the Bonds, according to the true intent and meaning
thereof, and shall make the payments as required under this Indenture or shall provide, as
permitted hereby, for the payment thereof by depositing or causing to be deposited with the
Trustee the entire amount due or to become due thereon, and shall well and truly keep, perform
and observe all of the covenants and conditions pursuant to the terms of this Indenture to be kept,
and shall pay to the Trustee all sums of money due or to become due to it in accordance with the
terms and provisions hereof, then upon such final payments or deposits this Indenture and the
lien and rights hereby granted shall cease, determine and be void; otherwise, this Indenture is to
be and remain in full force and effect.
THIS INDENTURE FURTHER WITNESSETH that, and it is expressly declared that,
all Bonds issued and secured hereunder are to be issued, authenticated and delivered and all
revenues and income hereby pledged are to be dealt with and disposed of under, upon and
subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as
hereinafter expressed, and the City has agreed and covenanted, and does hereby agree and
10-70831.5
covenant, with the Trustee and with the respective owners from time to time of the Bonds or any
part thereof, as follows, that is to say:
ARTICLE I
DEFINITIONS
Section 101. Definitions. In addition to the words and terms elsewhere defined in this
Indenture, the following words and terms as used in this Indenture shall have the following
meanings:
"Account" means an Account established by Article V of this Indenture.
"Accountant" means an independent certified public accountant or a firm of independent
certified public accountants.
"Accreted Value" means, with respect to each Series 2005 Bond:
(a) for any $5,000 minimum authorized denomination of a Series 2005 Bond,
as of any Accretion Date, the amount set forth in Exhibit C hereto as the Accreted Value
of a Series 2005 Bond as of such Accretion Date;
(b) as of any date (for purposes of this paragraph (b), a "Calculation Date")
that is not an Accretion Date, the sum of (i) the Accreted Value determined under
paragraph (a) above, as appropriate, as of the most recent Accretion Date plus (ii) the
amount determined pursuant to the following formula:
(A-B)(X/180),
where "A" is the Accreted Value determined under paragraph (a) above as of the
Accretion Date immediately following such Calculation Date; "B" is the Accreted Value
determined under paragraph (a) above as of the most recent Accretion Date; and "X" is
the number of days such Calculation Date follows the most recent Accretion Date,
determined assuming that each month in such period contains 30 days.
"Accretion Date" means, with respect to the Series 2005 Bonds, (i) the date on which the
Series 2005 Bonds are first issued by the City and February 1 and August 1 of each year,
commencing August 1, 2005.
"Act" means the enabling legislation for Amendment 78, codified as Arkansas Code
Annotated (2003 Supp.) Sections 14-168-301 et seq., as from time to time amended.
"Additional Bonds" mean Bonds in addition to the Series 2005 Bonds which are issued
under the provisions of Section 212 of this Indenture.
"Amendment 78" means Amendment No. 78 to the Constitution of Arkansas, approved
by the voters of the State on November 7, 2000.
10-708315 4
"Annual Debt Service" means, with respect to all or any particular amount of Bonds, as
the case may be, the Debt Service for any particular Fiscal Year required to be paid or set aside
during such Fiscal Year, less the amount of such payment which is provided from the proceeds
of the sale of Bonds or from sources other than Tax Increment receipts. With respect to the
Series 2005 Bonds, "Annual Debt Service" means the Debt Service for any particular year which
is deemed to accrete or mature as described under the definition of Debt Service set forth below.
"Authorized Representative" means the Mayor of the City and such additional person or
persons as from time to time may be designated to act on behalf of the City by a Certificate
furnished to the Trustee containing the specimen signature thereof and executed on behalf of the
City by its Mayor.
"Authorizing Ordinance" means Ordinance No. adopted by the City on [March
15], 2005, which authorized the issuance of the Series 2005 Bonds pursuant to this Indenture.
"Bond Counsel" means any firm of nationally recognized municipal bond counsel
selected by the City and acceptable to the Trustee.
"Bond Fund" means the fund by that name created and established in Section 501 of this
Indenture.
"Bond Purchase Agreement" means each bond purchase agreement executed between the
City and the Original Purchaser or Purchasers of a series of Bonds issued hereunder.
"Bonds" mean the Series 2005 Bonds and all Additional Bonds issued by the City
pursuant to this Indenture.
"Certificate" means a document signed by an Authorized Representative of the City
attesting to or acknowledging the circumstances or other matters therein stated.
"City" means the City of Fayetteville, Arkansas, a municipality and political subdivision
under the laws of the State of Arkansas.
"City Clerk" means the person holding the office and performing the duties of the City
Clerk of the City.
"Closing Date" means, with respect to any series of Bonds, the date upon which there is
an exchange of such series of Bonds for the proceeds representing the initial purchase price for
such series of Bonds by the Original Purchaser or Purchasers thereof.
"Code" means the Internal Revenue Code of 1986, as from time to time amended, and
applicable regulations issued or proposed thereunder.
"Completion Date" means the date upon which a particular Project is completed, as
certified by a Qualified Engineer in accordance with Section 408 hereof.
"Costs of Issuance" means
all
items of expense
payable
or reimbursable directly or
indirectly by the City and related to
the
authorization, sale
and issuance of the Bonds, including,
10-70831.5
but not limited to, underwriting discounts, fees and expenses, placement agent fees and expenses,
publication expenses, expenses of printing, reproducing, filing and recording documents, initial
fees and charges of the Trustee and any Paying Agent, fees and expenses for legal, accounting
and other professional services, rating fees, costs of securing any credit enhancement for the
Bonds, costs of execution, transportation and safekeeping of the Bonds, and other costs, charges
and fees incurred in connection with the foregoing.
"Costs of Issuance Fund" means the fund by that name created and established in
Section 501 of this Indenture.
"Debt Service" means, with respect to all or any particular amount of Bonds, the total as
of any particular date of computation and for any particular period of the scheduled amount of
interest and amortization of principal payable on such Bonds, excluding amounts scheduled
during such period which relate to principal which has been retired before the beginning of such
period. With respect to the Series 2005 Bonds, "Debt Service" shall include the increase in
Accreted Value during such period of computation and the pro rata portion of principal allocable
to such period of computation, assuming that the principal of the Series 2005 Bonds matures on a
level basis over the life of the Series 2005 Bonds, but excluding amounts which relate to Series
2005 Bonds which have been retired before the beginning of such period.
"Debt Service Reserve Fund" means the fund by that name created and established in
Section 501 of this Indenture.
"District" means the Highway 71 East Square Redevelopment District No. 1 created by
the City under the authority of Amendment 78 and the Act pursuant to Ordinance No. 4608
adopted on August 17, 2004, as amended by Ordinance No. 4662 adopted on December 28,
2004.
"Event of Default" means any event of default specified in Section 801 hereof.
"Fiscal Year" means the 12 -month period used, at any time, by the City for accounting
purposes, which may be the calendar year.
"Fund" means a fund established by Article V of this Indenture.
"Government Securities" means (i) bonds, notes, certificates of indebtedness, treasury
bills or other securities constituting direct obligations of, or obligations on which the full and
timely payment of principal and interest is fully and unconditionally guaranteed by, the United
States of America (including any such securities issued or held in book -entry form on the books
of the Department of Treasury of the United States of America), and (ii) evidences of direct
ownership or proportionate or individual interest in future interest or principal payments on
specified direct obligations of, or obligations on which the full and timely payment of principal
and interest is fully and unconditionally guaranteed by, the United States of America, which
obligations are held by a bank or trust company organized and existing under the laws of the
United States of America or any state thereof in the capacity of custodian in form and substance
satisfactory to the Trustee.
10-70831.5
"Holder" or "Bondholder" or "owner of the Bonds" means the registered owner of any
Bond.
"Indenture" means this Trust Indenture dated as of April 15, 2005, between the City and
the Trustee, pursuant to which the Bonds are issued, and any amendments and supplements
hereto.
"Investment Securities" means,
if and to
the extent
the same are at the time legal for
investment of Funds and Accounts held
under this
Indenture:
(a) Government Securities;
(b) bonds, notes or other obligations of any state of the United States of
America or any political subdivision of any state, which at the time of their purchase are
rated in either of the two highest rating categories by a nationally recognized Rating
Agency;
(c) certificates of deposit or time or demand deposits constituting direct
obligations of any bank, bank holding company, savings and loan association or trust
company organized under the laws of the United States of America or any state thereof
(including the Trustee or any of its affiliates), except that investments may be made only
in certificates of deposit or time or demand deposits which are:
(1) insured by the Federal Deposit Insurance Corporation, or any other
similar United States Government deposit insurance program then in existence; or
(2) continuously and fully secured by Government Securities, which
have a market value, exclusive of accrued interest, at all times at least equal to the
principal amount of such certificates of deposit or time or demand deposits;
(d) short term discount obligations of the Federal National Mortgage
Association and the Government National Mortgage Association; and
(e) money market mutual funds (1) that invest in Government Securities or
that are registered with the U.S. Securities and Exchange Commission (SEC), meeting
the requirements of Rule 2a-7 under the Investment Company Act of 1940, and (2) that
are rated in either of the two highest categories by a nationally recognized Rating
Agency.
"Mayor" means the person holding the office and performing the duties of the Mayor of
the City.
"Original Purchaser" means the first purchaser(s) of a series of Bonds from the City.
"Outstanding" means, as of any date of computation, Bonds theretofore or thereupon
being delivered under this Indenture, except:
10-70831.5 7
0
(a) Bonds cancelled at or prior to such date or delivered to or acquired by the
Trustee at or prior to such date for cancellation;
(b) Bonds deemed to be paid in accordance with Article VII of this Indenture;
and
(c)
Bonds in
lieu
of or in exchange or substitution for which other Bonds shall
have been
authenticated
and
delivered pursuant to this Indenture.
"Paying Agent" means any bank or trust company named by the City as the place at
which the principal of and premium, if any, and interest on the Bonds are payable.
"Person" means any natural person, firm, association, corporation, limited liability
company, partnership, joint stock company, joint venture, trust, unincorporated organization or
firm, or a government or any agency or political subdivision thereof or other public body.
"Project" means the acquisition, construction, reconstruction, improving, extension or
equipping of City infrastructure improvements to be financed with the proceeds of a series of
Bonds.
"2005 Project" means the acquisition of certain real property and the demolition of
existing structures thereon, which property is located within the District and consists of the
former Mountain Inn property and surrounding parcels, together with the construction of certain
sidewalk and crosswalk improvements within the District.
"Project Costs" shall have the meaning set forth in the Act, and shall include, with
respect to a Project, all costs of planning, designing, purchasing, acquiring, constructing,
reconstructing, improving, enlarging, extending, repairing, financing and placing a Project in
operation, including the demolition of existing structures, and the costs of obtaining
governmental approvals, certificates, permits and licenses with respect thereto, heretofore or
hereafter paid or incurred by or on behalf of the City and which shall include, but shall not be
limited to:
(a) interest accruing in whole or in part on a series of Bonds prior to the
receipt of sufficient Tax Increment receipts to pay such interest as it becomes due;
(b) preliminary investigation and development costs, engineering fees,
contractors' fees, labor costs, the cost of materials, equipment, utility services and
supplies, costs of obtaining permits, licenses and approvals, costs of real property,
insurance premiums, legal and financing fees and costs, administrative and general costs,
and all other costs properly allocable to the acquisition, construction, reconstruction,
improving, extending and equipping of a Project and placing the same in operation;
(c) all costs relating to injury and damage claims arising out of the
acquisition, construction or equipping of a Project;
1070831.5
(d) all other costs incurred in connection with, and properly allocable to, the
acquisition, construction, reconstruction, improving, extending and equipping of a
Project; and
(e) amounts to pay or reimburse the City, any City fund or any other entity for
expenses incident and properly allocable to such planning, designing, purchasing,
acquiring, constructing, reconstructing, improving, enlarging, extending, repairing,
financing and placing in operation of a Project.
"Project Fund" means the fund by that name created and established in Section 501 of
this Indenture.
"Qualified Engineer" means either (i) the City's Building Services Director and Project
Manager or (ii) an independent consulting engineer or firm of independent consulting engineers
not in the regular employ of the City.
"Rating Agency" means Moody's Investors Service, Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., or Fitch, Inc., and their respective successors and assigns. If any
such corporation ceases to act as a securities rating agency, the City may appoint any nationally
recognized securities rating agency as a replacement.
"Rebate Fund" means the fund by that name created and established in Section 501 of
this Indenture.
"Redemption Fund" means the fund by that name established in Section 501 of this
Indenture.
"2005 Redevelopment Agreement" means that certain Redevelopment Agreement dated
April _, 2005, between the City and in connection with the 2005 Project.
"Requisition" means a written requisition of the City in substantially the form set forth in
Exhibit B hereto, consecutively numbered, signed by an Authorized Representative, including,
without limitation, the following with respect to each payment requested:
(i) the name of the person or party to whom payment is to be made and the
purpose of the payment,
(ii) the amount to be paid thereunder;
(iii) that such amount has not been previously paid by the City and is justly due
and owing to the person(s) named therein as a proper payment or reimbursement of a
Project Cost; and
(iv) that no Event of Default exists under the Indenture and that, to the
knowledge of the Authorized Representative, no event has occurred and continues which
with notice or lapse of time or both would constitute an Event of Default under the
Indenture.
10-70831.5
"Reserve Requirement" means, with respect to each series of Bonds issued hereunder, at
any particular time, an amount equal to 10% of the total Outstanding principal amount of such
series of Bonds.
"Revenue Fund" means the fund by that name created and established in Section 501 of
this Indenture.
"Series 2005 Bonds" means the City's Tax Increment Interest Accretion Bonds (Highway
71 East Square Redevelopment District No.1 Project), Series 2005, issued under and secured by
this Indenture in aggregate principal amount not to exceed $
"State" means the State of Arkansas.
"Supplemental Indenture" means any indenture supplemental to or amendatory of this
Indenture, adopted by the City in accordance with Article X hereof.
"Tax Increment" shall have the meaning set forth in the Act, as determined by
multiplying the incremental value of the real property within the District by the maximum
applicable ad valorem rate permitted pursuant to the Act.
"Tax Regulatory Agreement" means with respect to any series of Bonds, that Tax
Regulatory Agreement of the City relating to maintenance of the excludability of interest on such
Bonds from gross income for federal income tax purposes, delivered in connection with the
issuance of such series of Bonds.
"Trustee"
means the banking corporation
or association designated as Trustee in
the
Indenture, and
its successor or successors as
such Trustee. The original Trustee
is
"Trust Estate" means the property described in the granting clauses of this Indenture.
Section 102. Use of Words. Words of the masculine gender shall be deemed and
construed to include correlative words of the feminine and neuter genders. Unless the context
shall otherwise indicate, the words "Bond", "owner", "holder" and "person" shall include the
plural, as well as the singular, number.
ARTICLE II
THE BONDS
Section 201. Security for the Bonds. (a) The Bonds are special and limited
obligations of the City payable as to principal, premium, if any, and interest solely out of the
Trust Estate. The Trust Estate is hereby pledged, appropriated and assigned to the payment of
the principal of, premium, if any, and interest on the Bonds, all in accordance with their terms
and the provisions of this Indenture. The Bonds do not constitute an indebtedness for which the
faith and credit of the State of Arkansas or the City is pledged within the meaning of any
Constitutional or statutory limitation. The Bonds shall never constitute an obligation of or a
charge against the general credit or general taxing powers of the City.
10-70871.5 10
(b) The pledge, charge, lien, trusts and assignments made herein with respect to the
Trust Estate shall be valid and binding, and shall be deemed continuously perfected from the
time of issuance of the Series 2005 Bonds, and the Trust Estate shall thereupon be immediately
subject to the pledge, charge, lien, trust and assignment created hereby upon receipt thereof by or
for the City or by the Trustee or the Paying Agent hereunder, without any physical delivery,
segregation thereof or further act, and such pledge, charge, lien, trust and assignment shall be
valid and binding as against all parties having claims of any kind in tort, contract or otherwise
against the City, irrespective of whether such parties have notice thereof.
(c) Except for the specific security provided separately for each series of Bonds
issued hereunder and described in clause 2 of the granting clauses of this Indenture, the Bonds
shall be equally and ratably payable and secured hereunder without priority by reason of date of
adoption of this Indenture or any Supplemental Indenture authorizing their issuance or by reason
of their series, number, date, date of issue, execution, authentication or sale, or otherwise.
(d) So long as any Bonds are Outstanding under the provisions of this Indenture, all
receipts derived from the Tax Increment shall be deemed to be necessary to accomplish the
purposes of the City and shall be subject to the covenants and agreements set forth in this
Indenture, and no such revenues or receipts shall ever be used or deposited otherwise except as
herein expressly permitted.
(e) The City covenants that while any of the Bonds are Outstanding it will use due
diligence in causing the collection of the Tax Increment.
Section 202. Authorized Amount. There is hereby authorized the issuance of bonds of
the City to be designated "City of Fayetteville, Arkansas Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. 1 Project), Series 2005" in the aggregate
principal amount of Dollars ($ ) (the
"Series 2005 Bonds"). No Bonds may be issued under the provisions of this Indenture except in
accordance with this Article II.
Section 203. Details of Bonds. The Series 2005 Bonds (i) shall be dated as of April __
2005 [DATE OF DELIVERY], (ii) shall accrete interest at the rate of% per annum from and
including their dated date, such interest to be compounded semiannually on each February 1 and
August 1, commencing August 1, 2005, as shown on Exhibit C hereto, and fully payable at
maturity or upon earlier redemption of the Series 2005 Bonds, (iii) shall be issued in
denominations of $5,000 each and in integral multiples of $5,000 in excess thereof, (iv) shall be
numbered from R05-1 upwards in order of issuance according to the records of the Trustee, and
(v) shall mature, unless sooner redeemed in the manner in this Indenture set forth, on August 1,
2029.
Section 204. Form. The Series 2005 Bonds shall be initially issued as fully registered
bonds, without coupons, in the form of one typewritten bond certificate to be delivered to The
Depository Trust Company. The Series 2005 Bonds and the Trustee's certificate of
authentication to be endorsed thereon shall be in substantially the form set forth in Exhibit A
hereto, with appropriate variations, insertions and omissions as permitted or required by this
10-70831.5 11
!
Indenture. There shall be included with or printed on the Series 2005 Bonds the approving
opinion of Bond Counsel.
Section 205. Payment. The Series 2005 Bonds shall be payable, with respect to
principal, premium, if any, and interest in any coin or currency of the United States of America
which at the time of payment is legal tender for the payment of public and private debts. The
principal of and premium, if any, and accreted interest on the Series 2005 Bonds shall be payable
upon surrender thereof at the principal corporate trust office of the Trustee. For purposes of this
Indenture, interest on the Series 2005 Bonds shall be deemed to accrue and accrete on the basis
of a 360 -day year of twelve 30 -day months.
Section 206. Execution. The Bonds shall be executed on behalf of the City by the
manual or facsimile signatures of its Mayor and City Clerk and shall have impressed or
imprinted thereon the seal of the City. A facsimile signature shall have the same force and effect
as if manually signed. In case any officer whose manual signature or a facsimile of whose
signature shall appear on the Bonds shall cease to be such officer before the delivery of such
Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all
purposes, the same as if such official had remained in office until delivery.
Section 207. Authentication. Only such Bonds as shall have endorsed thereon a
certificate of authentication substantially in the form set forth in Exhibit A attached hereto duly
executed by the Trustee shall be entitled to any right or benefit under this Indenture. No Bond
shall be valid and obligatory for any purpose unless and until such certificate of authentication
shall have been duly executed by the Trustee, and such certificate of the Trustee upon any such
Bond shall be conclusive evidence that such Bond has been authenticated and delivered under
this Indenture. The Trustee's certificate of authentication on any Bond shall be deemed to have
been executed if signed by an authorized officer of the Trustee, but it shall not be necessary that
the same officer sign the certificate of authentication on all of the Bonds issued hereunder.
Section 208. Delivery of the Bonds. The City shall execute and deliver to the Trustee
and the Trustee shall authenticate the Bonds of any series and deliver said Bonds to the Original
Purchaser(s) as may be directed in this Section 208, in Section 212 hereof or in any
Supplemental Indenture.
(1) Prior to the delivery or original issuance by the Trustee of any authenticated
Bonds of any series, there shall be delivered to the Trustee:
(a) An original executed counterpart of this Indenture or, in the case of
Additional Bonds, a Supplemental Indenture by and between the City and the Trustee
setting forth the details concerning such Additional Bonds;
(b) Original executed counterparts of the Tax Regulatory Agreement and
Continuing Disclosure Agreement applicable to such series of Bonds;
(c) An original executed Bond Purchase Agreement between the City and the
Original Purchaser(s) of each series of Bonds;
10-70831.5 12
(d) With respect to the Series 2005 Bonds, an original executed counterpart of
the 2005 Redevelopment Agreement;
(e) A Certificate directing the Trustee to authenticate the Bonds and
containing instructions as to the delivery of the Bonds upon payment to the Trustee, for
the account of the City, of a sum specified in such Certificate;
(f) A copy, duly certified by the City Clerk, of the proceedings of the City
authorizing the issuance of the Bonds;
(g) A written opinion of Bond Counsel approving the legality of the Bonds;
(h) In the case of any series of Additional Bonds, a Certificate signed by the
Mayor of the City certifying that (i) the City is not then in default in the performance of
any of the covenants, conditions, agreements or provisions contained in this Indenture,
and (ii) the City is current as to all required deposits at that time in all the Funds and
Accounts described in Article V of this Indenture or hereafter created by Supplemental
Indentures, or if the City is in default or is not so current, certifying in the case of (i) or
(ii) as to that fact and that, upon the application of the proceeds of the sale of such
Additional Bonds as provided in the Supplemental Indenture authorizing the issuance
thereof, the City will not be in default or will be current thereafter;
(i) In the case of any series of Additional Bonds, the Accountant's certificate
described in Section 212 hereof and a written opinion of Bond Counsel to the effect that
the exemption from federal income tax of the interest on the Series 2005 Bonds and any
Additional Bonds theretofore issued will not be adversely affected by the issuance of the
Additional Bonds being issued; and
0) Such
further
documents and certificates as may
be required by the
Original Purchaser(s)
of such
series of Bonds.
(2) Upon the delivery of the Series 2005 Bonds to the Original Purchaser thereof, the
Trustee shall apply the proceeds (i.e., $ ) as follows:
(a) $ , an amount equal to the Reserve Requirement with respect
to the Series 2005 Bonds, shall be deposited in the Series 2005 Account of the Debt
Service Reserve Fund;
(b) An amount equal to $
shall be
deposited in the Costs
of Issuance
Fund for payment of Costs of Issuance as
directed by a
Certificate of the City;
and
(c) The balance of said proceeds, in the amount of $ , shall be
deposited in the Series 2005 Account of the Project Fund and disbursed as directed by the
City pursuant to Section 502 hereof.
Section 209. Mutilated, Destroyed or Lost Bonds. In case any Bond issued hereunder
shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause
to be executed and the Trustee may authenticate and deliver a new Bond of like series, date,
10-70831.5 13
number, maturity and tenor in exchange and substitution for and upon cancellation of such
mutilated Bond, or in lieu of and in substitution for such Bond destroyed or lost, upon the
Holder's paying the reasonable expenses and charges of the City and. the Trustee in connection
therewith, and, in the case of a Bond destroyed or lost, filing by the Holder with the Trustee
evidence satisfactory to the Trustee that such Bonds were destroyed or lost, and of the Holder's
ownership thereof, and furnishing the City and Trustee with indemnity satisfactory to them. The
Trustee is hereby authorized to authenticate any such new Bond. In the event any such Bonds
shall have matured, instead of issuing a new Bond, the City may pay the same without the
surrender thereof. Upon the issuance of a new Bond under this Section 209, the City may
require the payment of a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.
Section 210. Registration and Transfer of Bonds. The City hereby constitutes and
appoints the Trustee as Bond registrar of the City, and as Bond registrar the Trustee shall keep
books for the registration and for the transfer of the Bonds as provided in this Indenture at the
principal corporate trust office of the Trustee. The person in whose name any Bond shall be
registered shall be deemed and regarded as the absolute owner thereof for all purposes and
payment of or on account of the principal of, premium and interest on any such Bond shall be
made only to or upon the order of the registered owner thereof, or the owner's legal
representative, and neither the City, the Trustee nor the Bond registrar shall be affected by any
notice to the contrary, but such registration may be changed as herein provided. All such
payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the
extent of the sum or sums so paid.
Subject to the limitations set forth below, Bonds may be transferred on the books of
registration kept by the Trustee by the registered owner in person or by the owner's duly
authorized attorney, upon surrender thereof, together with a written instrument of transfer duly
executed by the registered owner or the owner's duly authorized attorney. Upon surrender for
transfer of any Bond at the principal corporate office of the Trustee, the City shall execute and
the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond
or Bonds of the same series and in the same aggregate principal amount and of any authorized
denomination or denominations.
Bonds may be exchanged at the principal corporate trust office of the Trustee for an equal
aggregate principal amount of Bonds of any other authorized denomination or denominations of
the same series with corresponding maturities. The City shall execute and the Trustee shall
authenticate and deliver Bonds which the Bondholder making the exchange is entitled to receive,
bearing numbers not contemporaneously then outstanding. The execution by the City of any
Bond of any denomination shall constitute full and due authorization of such denomination and
the Trustee shall thereby be authorized to authenticate and deliver such Bond.
Such transfers of registration or exchanges of Bonds shall be without charge to the
Holders of such Bonds, but any taxes or other governmental charges required to be paid with
respect to the same shall be paid by the Holder of the Bond requesting such transfer or exchange
as a condition precedent to the exercise of such privilege.
10-70831.5 14
The Trustee shall not be required to transfer or exchange any Bond after the mailing of
notice calling such Bond for redemption has been made, and prior to such redemption.
Section 211. Cancellation. All Bonds surrendered for payment, redemption, transfer or
exchange, if surrendered to the Trustee, shall be promptly cancelled by it, and, if surrendered to
any person other than the Trustee, shall be delivered to the Trustee and, if not already cancelled,
shall be promptly cancelled by it. The City may at any time deliver to the Trustee for
cancellation any Bonds previously authenticated and delivered hereunder, which the City may
have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled
by the Trustee. All cancelled Bonds held by the Trustee shall be disposed of as directed by the
City. Whenever in this Indenture provision is made for the cancellation by the Trustee and the
delivery to the City of any Bonds, the Trustee may, upon the written request of the City, in lieu
of such cancellation and delivery, destroy such Bonds in the presence: of any officer of the City
(but only if the City shall so require), and deliver a certificate of such destruction to the City.
Section 212. Additional Bonds. The City may issue from time to time one or more
series of Additional Bonds for the purpose of (i) financing Project Costs in connection with a
Project, (ii) refunding the Series 2005 Bonds or any series of Additional Bonds, in whole or in
part, or (iii) any combination thereof. Additional Bonds shall be secured equally and ratably
with the Series 2005 Bonds and any other series of Additional Bonds theretofore issued and then
Outstanding, except insofar as any terms or conditions of redemption or purchase established
under this Indenture may afford additional benefit or security for the Bonds of any particular
series and except for the security afforded by any municipal bond insurance obtained with
respect to a particular series of Bonds. Before any Additional Bonds are authenticated, there
shall be delivered to the Trustee the items required for the issuance of Bonds by Section 208
hereof, plus an Accountant's certificate stating that, based upon necessary investigation, the Tax
Increment receipts transferred to the Trustee for deposit to the Revenue Fund during the most
recent twelve (12) months were not less than (i) 150% of the average Annual Debt Service on all
then Outstanding Bonds, plus the Additional Bonds then proposed to be issued, and (ii) the
amount, if any, needed to make required deposits to the Debt Service Reserve Fund.
Notwithstanding anything herein to the contrary, no Additional Bonds shall be issued unless
there is no default at the time of issuance under this Indenture.
Section 213. Superior Obligations Prohibited. Except to the extent permitted in
Section 212 hereof for the issuance of Additional Bonds, from and after the issuance of any of
the Bonds and for so long as any of the Bonds are Outstanding, the City shall not create or permit
the creation of any indebtedness, or issue any bonds, notes, warrants, certificates or other
obligations or evidences of indebtedness payable in any manner from the Tax Increment receipts
or otherwise from the Trust Estate which (i) will in any way be superior to or rank on a parity
with the Bonds, or (ii) will in any way be secured by a lien and charge on the Tax Increment
receipts or on the moneys deposited in or to be deposited in the Revenue Fund, prior to or equal
with the lien, pledge and charge created herein for the security of the Bonds, or (iii) will be
payable prior to or equal with the payments to be made from the Tax Increment receipts and the
Revenue Fund into the Bond Fund, Debt Service Reserve Fund and Redemption Fund or from
said Bond Fund, Debt Service Reserve Fund and Redemption Fund for the payment of principal
of and interest on the Bonds.
10-70831.5 15
Section 214. [RESERVED].
Section 215. Temporary Bonds. Until Bonds in definitive form are ready for delivery,
the City may execute, and upon the request of the City, the Trustee shall authenticate and deliver,
subject to the provisions, limitations and conditions set forth herein, one or more Bonds in
temporary form, whether printed, typewritten, lithographed or otherwise produced, substantially
in the form of the definitive Bonds, with appropriate omissions, variations and insertions, and in
authorized denominations. Until exchanged for Bonds in definitive form, such Bonds in
temporary form shall be entitled to the lien and benefit of this Indenture. Upon the presentation
and surrender of any Bond or Bonds in temporary form, the City shall, without unreasonable
delay, prepare, execute and deliver to the Trustee and the Trustee shall authenticate and deliver,
in exchange therefor, a Bond or Bonds in definitive form. Such exchange shall be made by the
Trustee without making any charge therefor to the Holder of such Bond in temporary form.
ARTICLE III
REDEMPTION OF BONDS BEFORE MATURITY
Section 301. Redemption. (a) The Series 2005 Bonds shall be subject to redemption
prior to maturity on any date, in whole or in part (in authorized denominations of the Series 2005
Bonds), by lot in such manner as the Trustee shall determine, at a redemption price equal to
100% of the Accreted Value thereof as of the date of redemption, (i) from moneys in the Series
2005 Account of the Project Fund in excess of the amount needed to complete the 2005 Project,
and (ii) from the first $120,000 of proceeds realized by the City upon any sale of any of the real
property originally acquired with the proceeds of the Series 2005 Bonds, which moneys shall be
transferred to the Series 2005 Account of the Redemption Fund pursuant to Section 502(d)
hereof.
(b) The Series 2005 Bonds shall be subject to redemption prior to maturity on each
February 1, in whole or in part (in authorized denominations of such Series 2005 Bonds), by lot
in such manner as the Trustee shall determine, at a redemption price equal to 100% of the
Accreted Value thereof as of the date of redemption, to the extent of.(i) Tax Increment receipts
deposited in the Series 2005 Account of the Redemption Fund pursuant to Section 503 hereof,
and (ii) investment earnings and permitted reductions in the balance of the Debt Service Reserve
Fund deposited in the Series 2005 Account of the Redemption Fund pursuant to Section 508
hereof.
(c) On and after February 1, 2010, the Series 2005 Bonds shall be subject to
redemption prior to maturity at the option of the City, in whole or in part on any date (in
authorized denominations of the Series 2005 Bonds), by lot in such manner as the Trustee shall
determine, from funds from any source, at a redemption price equal to 100% of the Accreted
Value thereof as of the date of redemption.
(d) Upon any determination that the Tax Increment is to be calculated by including
[all of][any portion of] the 25 mills described in Amendment 74 to the Constitution of the State
of Arkansas within the "applicable ad valorem rate" (as defined in the Act), which determination
is evidenced by (i) an opinion of the Arkansas Attorney General, (ii) a decision by an Arkansas
10-70831.5 16
0
court of competent jurisdiction, (iii) legislation enacted by the Arkansas General Assembly, or
(iv) an amendment to the Constitution of the State of Arkansas, then the Series 2005 Bonds shall
be subject to redemption prior to maturity at the option of the City, in whole on any date, from
funds from any source, at a redemption price equal to 101% of the principal amount of the
Outstanding Series 2005 Bonds plus the accreted interest thereon as of the date of redemption.
[WHAT ABOUT A SITUATION WHERE ADDITIONAL MILLS ARE LEVIED?]
Section 302. Notice. Notice of the call for any redemption, identifying the Bonds or
portions thereof being called and the date on which they shall be presented for payment, shall be
mailed by the Trustee by first class mail to the registered owner of each such Bond addressed to
such registered owner at his registered address and placed in the mails not less than thirty (30)
nor more than sixty (60) days prior to the date fixed for redemption; provided, however, that
failure to give such notice by mailing, or any defect therein, shall not affect the validity of any
proceeding for the redemption of any Bond with respect to which no such failure or defect has
occurred.
Any notice mailed as provided in this Section 302 shall be conclusively presumed to have
been duly given, whether or not the registered owner receives the notice.
Section 303. Selection of Bonds to be Redeemed. If less than all of the Bonds of like
series, maturity, interest rate and otherwise identical payment terms shall be called for
redemption, the particular Bonds or portions of Bonds to be redeemed shall be selected by lot by
the Trustee in such manner as the Trustee in its discretion may deem fair and appropriate;
provided, however, that the portion of any Bond of a denomination of larger than the minimum
denomination may be redeemed in the principal amount of such minimum denomination or a
multiple thereof, and that for purposes of selection and redemption, any such Bond of a
denomination larger than the minimum denomination shall be considered to be that number of
separate Bonds of such minimum denomination which is obtained by dividing the principal
amount of such Bond by such minimum denomination.
Section 304. Surrender of Bonds Upon Redemption. Notice having been given in the
manner and under the conditions hereinabove provided, and moneys for payment of the
redemption price being held by the Trustee as provided in this Indenture (i) the Bonds or portions
of Bonds so called for redemption shall, on the date fixed for redemption designated in such
notice, become due and payable at the redemption price provided for redemption of such Bonds,
and interest on such Bonds or portions of Bonds so called for redemption shall cease to accrue,
(ii) upon surrender of the Bonds or portions of Bonds so called for redemption in accordance
with such notice, such Bonds or portions of Bonds shall be paid at the applicable redemption
price, (iii) such Bonds or portions of Bonds shall cease to be entitled to any lien, benefit or
security under this Indenture, and (iv) the owners of said Bonds or portions of Bonds shall have
no rights in respect thereof except to receive payment of the redemption price thereof.
Section 305. Redemption in Part. Any Bond which is to be redeemed only in part shall
be surrendered to the Trustee (with, if the City or the Trustee so requires, due endorsement by, or
a written instrument of transfer in form satisfactory to the City and the Trustee duly executed by,
the owner thereof or his attorney duly authorized in writing), and the appropriate officials of the
City shall execute and the Trustee shall authenticate and deliver to the owner of such Bond,
10-70831.5 17
without service charge, a new Bond or Bonds of the same series, of any authorized denomination
or denominations, having the same maturity and interest rate, in aggregate principal amount
equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered.
Section 306. Payment of Redemption Price. For the redemption of any of the Series
2005 Bonds, the City shall cause to be deposited from the appropriate Account of the
Redemption Fund to the corresponding Account in the Bond Fund an amount sufficient to pay
the Accreted Value of such Series 2005 Bonds to be redeemed as of the date fixed for such
redemption. The obligation of the City to cause any such deposit to be made hereunder shall be
reduced by the amount of moneys in the applicable Account in the Bond Fund available on such
redemption date for payment of the Accreted Value on the Series 2005 Bonds to be redeemed.
Section 307. Redemption of Additional Bonds. Additional Bonds may be made
subject to optional, extraordinary and mandatory sinking fund redemption, in whole or in part, in
such manner, at such times and at such prices as may be provided in the Supplemental Indenture
providing for their issuance.
ARTICLE IV
GENERAL COVENANTS AND REPRESENTATIONS
Section 401. Payment of Principal, Premium, if any, and Interest. The City
covenants that it will promptly pay or cause to be paid the principal of and premium, if any, and
interest on every Bond issued under this Indenture at the place, on the dates and in the manner
provided herein and in the Bonds according to the true intent and meaning thereof. Said
principal, premium, if any, and interest are payable solely from the Trust Estate which is hereby
specifically pledged to the payment thereof in the manner and to the extent herein specified, and
nothing in the Bonds or this Indenture should be considered as assigning or pledging any funds
or assets of the City other than the Trust Estate. Anything in this Indenture to the contrary
notwithstanding, it is understood that whenever the City makes any covenants involving
financial commitments it pledges no funds or assets other than the Trust Estate in the manner and
to the extent herein specified, but nothing herein shall be construed as prohibiting the City from
using any other funds or assets. The City covenants to use due diligence in causing the
collection of the Tax Increment in the maximum amount permissible under the Act and
Amendment 78.
Section 402. Performance of Covenants. The City covenants that it will faithfully
perform at all times any and all covenants, undertakings, stipulations and provisions contained in
this Indenture, in any and every Bond executed, authenticated and delivered hereunder, and in all
ordinances pertaining hereto. The City covenants that it is duly authorized under the
Constitution and laws of the State of Arkansas, including particularly and without limitation
Amendment 78 and the Act, to issue the Bonds authorized hereby and to execute this Indenture
and to make the pledge of the Tax Increment and to make the covenants in the manner and to the
extent herein set forth, that all action on its part for the issuance of the Bonds and the execution
and delivery of this Indenture has been duly and effectively taken, and that the Bonds in the
hands of the Holders and owners thereof are and will be valid and enforceable obligations of the
City according to the import thereof. The City covenants that the District has been duly formed
10-70831.5 18
and is validly existing under the authority of Amendment 78 and the Act. The City further
covenants that the District will continue to exist until at least the earlier of (i) August 1, 2029, or
(ii) the date all of the Bonds issued hereunder have been paid in full. Notwithstanding the
foregoing, the City understands and agrees that Section 9 of the Act (Arkansas Code Annotated
Section 14-168-308) provides in part that no redevelopment district maybe terminated so long as
bonds with respect to the district remain outstanding. The City acknowledges that this provision
of the Act was material to the decision of the Original Purchaser of the Series 2005 Bonds to
make such investment.
Section 403. Instruments of Further Assurance. At any and all times the City shall,
so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and
every such further resolutions, ordinances, acts, deeds, conveyances, assignments, transfers and
assurances as may be necessary or desirable for the better assuring, conveying, granting,
pledging, assigning and confirming of all and singular the receipts from the Tax Increment and
all other moneys hereby pledged or assigned, or intended so to be, or which the City may
become bound to pledge or assign.
Section 404. Recordation and Filing. To the extent necessary, the City covenants that
it will cause this Indenture, such security agreements, financing statements, and all supplements
thereto and other instruments as may be required from time to time to be kept, to be recorded and
filed in such manner and in such places as may be required by law in order to fully preserve and
protect the security of the owners of the Bonds and the rights of Trustee hereunder, and to perfect
the security interest created by this Indenture.
Section 405. Inspection of Books. The City shall keep proper books of record and
account (separate from all other records and accounts) in which complete and correct entries
shall be made of its transactions relating to the Project and the Funds and Accounts established
by this Indenture.
Section 406. Tax Covenants. The City shall not use or permit the use of any Bond
proceeds or any other funds of the City, directly or indirectly, in any manner, and will not take or
permit to be taken any other action or actions which would adversely effect the exclusion of
interest on any Bond from gross income for federal income tax purposes. No part of the
proceeds of the Bonds shall at any time be used, directly or indirectly, to acquire securities or
obligations the acquisition of which would cause any of such Bonds to be an "arbitrage bond" as
defined in Sections 148(a) and (b) of the Code. The City agrees that so long as any of the Bonds
remain Outstanding, it will comply with the provisions of each applicable Tax Regulatory
Agreement.
Section 407. Trustee's and Paying Agent's Fees and Expenses. Subject to the
provisions of Section 902 hereof, the City hereby agrees and covenants to make payments for the
fees, expenses and charges of the Trustee and Paying Agent, if any, as authorized and provided
by this Indenture. The City is to make payments on statements rendered by the Trustee and
Paying Agent either (i) directly to the Trustee and Paying Agent or (ii) pursuant to
Section 503(b) hereof.
10-70831.5 19
Section 408. Completion of Project; Certification of Completion Date. The City
hereby covenants to use its best efforts to complete each Project being financed with proceeds of
the Bonds with all reasonable dispatch and to use its best efforts to cause each Project to be
completed as soon as may be practicable, but in any case within a period not to exceed three
years after the issuance of the applicable series of Bonds, delays caused by force majeure only
excepted, but if for any reason a Project is not completed within said period, there shall be no
diminution or postponement of payments required hereunder to be made by the City. Promptly
after each such Completion Date, the City shall submit to the Trustee the certificate of a
Qualified Engineer which shall specify the Completion Date and shall state that the Project being
financed with a particular series of Bond proceeds has been completed and the Project Costs
have been paid, except for any Project Costs which have been incurred but are not then due and
payable, or the liability for the payment of which is being contested or disputed by the City, and
for the payment of which the Trustee is directed to retain specified amounts of moneys in the
applicable Account of the Project Fund. Notwithstanding the foregoing, such certificate may
state that it is given without prejudice to any rights against third parties which exist at the date
thereof or which may subsequently come into being.
Section 409. Encumbrances. The City covenants that it will not create or suffer to be
created any lien or charge upon the Trust Estate, except in accordance with the provisions of this
Indenture.
Section 410. Continuing Disclosure. The City hereby covenants and agrees that it will
comply with and carry out all of the provisions of each Continuing Disclosure Agreement.
Notwithstanding any other provision of this Indenture to the contrary, failure of the City or the
Trustee to comply with the provisions of a Continuing Disclosure Agreement shall not be
considered an Event of Default hereunder; however, the Trustee may (and at the request of the
Original Purchaser of a series of Bonds or the owners of at least 25% in aggregate Outstanding
principal amount of such series of Bonds, shall) or any Beneficial Owner may take such actions
as may be necessary and appropriate, including seeking mandate or specific performance by
court order, to cause the City or the Trustee, as the case may be, to comply with its obligations
under this Section 410. For purposes of this Section 410 only, "Beneficial Owner" shall mean
any Person which (a) has the power, directly or indirectly, to vote or consent with respect to, or
to dispose of ownership of, any Bonds (including Persons holding Bonds through nominees,
depositories or other intermediaries) or (b) is treated as the owner of Bonds for federal income
tax purposes.
ARTICLE V
FUNDS AND DEPOSITS
Section
501. Creation
of
Funds and Accounts.
(a)
There are hereby created and
established the
following Funds
and
Accounts:
(i) Project Fund, and a Series 2005 Account therein;
10-70831.5 20
•
(ii) Revenue Fund (which shall be the fund mandated by Section 14-
168-305(e) of the Act and created in Section 5 of Ordinance No. 4608 of the
City);
(iii) Bond Fund, and a Series 2005 Account therein;
(iv) Redemption Fund, and a Series 2005 Account therein;
(v) Debt Service Reserve Fund, and a Series 2005 Account therein;
(vi) Cost of Issuance Fund; and
(vii) Rebate Fund, and a Series 2005 Account therein.
(b) All Funds and Accounts shall be held by the Trustee, which shall hold and
maintain said Funds and Accounts in trust, for the use and benefit of the Bondholders and
the City, but subject to the permitted applications expressed herein.
Section 502. Project Fund. (a) The Trustee shall deposit a portion of the proceeds of
the Series 2005 Bonds to the credit of the Series 2005 Account of the Project Fund in accordance
with the written directions of the City given as provided in Section 208 of this Indenture. In
addition, upon the sale of any portion of the real property originally acquired with the proceeds
of the Series 2005 Bonds, the first $120,000 of sale proceeds realized by the City from such sale
shall be deposited to the Series 2005 Account of the Redemption Funds pursuant to Section
506(a) hereof. Any remaining sale proceeds shall be deposited to the Series 2005 Account of the
Project Fund to be used for the purpose of constructing the sidewalk and crosswalk improvement
components of the 2005 Project.
(b) Moneys credited to the Project Fund shall be expended only as set forth in
this Section 502.
(c) Amounts in the Project Fund shall be expended and applied for the
payment or reimbursement of Project Costs; provided, however, expenditures related to
the sidewalk and crosswalk construction components of the 2005 Project shall be made
only from the property sale proceeds described in subsection (a) above. Disbursements
shall be made from the Project Fund on the basis of consecutively numbered Requisitions
in the form attached hereto as Exhibit B signed by an Authorized Representative.
Requisitions may be submitted to the Trustee by certified mail, first class mail or
facsimile transmission. If the Trustee deems that a Requisition submitted by the City is
sufficient pursuant to this Section 502, the amount requested thereunder shall be
disbursed in payment of the Project Costs set forth therein, or in reimbursement of such
Project Costs, within two (2) business days of the date of receipt of such Requisition by
the Trustee. Each Requisition shall specify:
(i) the name of the person or party to whom payment is to be made
and the purpose of the payment;
(ii) the amount to be paid thereunder;
10-70831.5 21
(iii) that such amount has not been previously paid by the City and is
justly due and owing to the person(s) named therein as a proper payment or
reimbursement of a Project Cost; and
(iv) that no Event of Default exists under the Indenture and that, to the
knowledge of the Authorized Representative, no event has occurred and continues
which with notice or lapse of time or both would constitute an Event of Default
under the Indenture.
(d) The Trustee shall keep full and complete records concerning and reflecting
all disbursements from the Project Fund and shall file an accounting of said
disbursements if and when requested by the City. The Trustee shall only make payments
from the Project Fund pursuant to and in accordance with Requisitions. In making
payments from the Project Fund, the Trustee may rely on any Requisitions delivered to it
pursuant to this Section 502, and the Trustee shall be relieved of all liability relating to
payments made in accordance with such Requisitions and any supporting certificate or
certificates requested by the Trustee without physical inspection of the Project. Within
ninety (90) days following completion of the portion of the Project being financed with a
particular series of Bonds, the City shall deliver to the Trustee its Certificate stating that
the applicable portion of the Project is complete and the Trustee shall transfer the
remaining moneys in the Project Fund relating to such series of Bonds (save and except
moneys needed to satisfy unpaid Project Costs) to the appropriate Account of the
Redemption Fund for application to the retirement of Bonds by redemption or purchase,
as provided by Section 301(a) and (b) and Section 506 hereof. With respect to the 2005
Project, the delivery of the Trustee's Certificate and fund transfer obligation shall be
performed separately with respect to the completion of (i) the acquisition and demolition
component of the 2005 Project and (ii) the sidewalk and crosswalk construction
component of the 2005 Project.
(e) Upon the occurrence and continuance of an Event of Default or the
occurrence and continuance of an event which with notice or lapse of time or both would
constitute an Event of Default, amounts on deposit in the Project Fund shall not be
disbursed but shall instead be applied to the payment of Debt Service or the redemption
of the Bonds.
Section 503. Revenue Fund. (a) The Revenue Fund created and established as set forth
in Section 501(a)(ii) hereof is hereby assigned to the Trustee for the benefit of the Bondholders
as permitted by the Act. There shall be deposited to the credit of the Revenue Fund, as and when
received, all receipts derived from the Tax Increment.
(b)
Upon receipt, but in
no event later than the last
day of each
month in
which Tax
Increment receipts are
deposited in the Revenue
Fund, there
shall be
transferred
from the Revenue Fund, in the following order, the amounts set forth
below:
FIRST: For deposit to the appropriate Accounts of the Debt Service Reserve
Fund, an amount sufficient to cure any deficiency therein;
10-70831.5 22
SECOND: For deposit to the appropriate Accounts of the Rebate Fund, an
amount sufficient to satisfy the City's obligations under Section 507 hereof;
THIRD: For payment to the Trustee and Paying Agent, the amount, if any,
necessary to pay or reimburse the Trustee and Paying Agent for fees and expenses related
to the Bonds; and
FOURTH: All remaining moneys will be transferred to the Redemption Fund
and shall be applied to call Bonds for redemption prior to maturity as provided in
Section 301(a) and (b) and Section 506 hereof; provided, however, that such transfers
shall be made to the various Accounts of the Redemption Fund in proportion to the
Outstanding principal amounts of the related series of Bonds and in such amounts as will
cause the redemption of Bonds in minimum authorized denominations.
(c) In the event there shall be insufficient moneys in the Revenue Fund in a
particular month to make the required transfers described above, then any deficiencies
shall be added to the required deposits during the next month.
Section 504. Bond Fund. (a) There shall be deposited to the credit of the appropriate
Accounts in the Bond Fund all moneys required to be transferred thereto pursuant to
Sections 505 and 506 of this Indenture and all other moneys received for said Fund.
(b) Moneys credited to the Bond Fund shall be expended only as set forth in
this Section 504.
(c) On each redemption date for any of the Series 2005 Bonds Outstanding,
the Trustee shall transfer out of moneys credited to Series 2005 Account of the Bond
Fund the amount required for the payment of the Accreted Amount of the Series 2005
Bonds being redeemed on such date unless the payment of such amount shall be
otherwise provided for, and such amount shall be applied to such payments.
(d) All payments made pursuant to this Section 504 shall be made in
immediately available funds.
Section 505. Cost of Issuance Fund. There shall be deposited to the credit of the Cost
of Issuance Fund all moneys received for said Fund pursuant to Section 208 hereof. The Trustee
shall pay those Costs of Issuance as directed by the City pursuant to a Certificate delivered on a
Closing Date. After all Costs of Issuance have been paid (and in any event not later than June 1,
2005 with respect to the Series 2005 Bonds), any remaining moneys in the Cost of Issuance Fund
shall be transferred to the Series 2005 Account of the Bond Fund.
Section 506. Redemption Fund. (a) There shall be deposited to the credit of Accounts
within the Redemption Fund all moneys required to be transferred thereto pursuant to
Section 502, 503 and 508 of this Indenture. In addition, the first $120,000 of proceeds realized
by the City upon the sale of all or any portion of the real property originally acquired with the
proceeds of the Series 2005 Bonds shall be transferred to the Series 2005 Account of the
Redemption Fund.
10-70831.5 23
(b) Moneys credited to the Redemption Fund shall be expended only as set
forth in this Section 506.
(c) Moneys in Accounts within the Redemption Fund shall be transferred to
corresponding Accounts within the Bond Fund at such times as may be necessary to
effectuate, on the first available date, redemptions of Bonds required by Section 301(a)
and (b) of this Indenture in minimum authorized principal amounts.
(d) The amounts accumulated in Accounts within the Redemption Fund, if so
directed by the City by means of a Certificate delivered to the Trustee, shall be applied by
the Trustee to the purchase of Bonds of the corresponding series which would otherwise
be redeemed pursuant to Section 301(a) and (b) and this Section 506 but for the
provisions of this subsection (d), at prices directed by the City not exceeding the
applicable redemption prices of the Bonds which would be redeemed but for the
operation of this sentence.
Section 507. Rebate Fund. (a) The Trustee shall establish and maintain, separate and
apart from any other Funds and Accounts established and maintained hereunder, a Fund to be
designated as the Rebate Fund, and a separate Account within the Rebate Fund with respect to
each series of Bonds issued hereunder, which Fund and Accounts are not pledged to the payment
of any Bonds. Subject to the transfer provisions provided in subsection (c) below, all moneys at
any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required
to satisfy the Rebate Amount (as defined in each Tax Regulatory Agreement), for payment to the
United States of America, and neither the City nor the owner of any Bond shall have any rights
in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be
governed by this Section 507, by Section 406, and by each Tax Regulatory Agreement (which
are incorporated herein by reference).
(b) As provided in Section 503(b) hereof, there shall be deposited into the
appropriate Account of the Rebate Fund the amount of all income or gain on moneys
deposited in any of the Funds and Accounts established by this Indenture which is
required to be rebated to the United States and is designated for deposit therein, as
calculated by the City to be owing to the United States pursuant to each Tax Regulatory
Agreement, which shall be delivered by the City concurrently with the issuance of a
series of Bonds.
(c) The Trustee, upon receipt of written instructions from the Mayor or the
Finance and Internal Services Director of the City, shall pay to the United States out of
amounts in the Rebate Fund such amounts as are required pursuant to each Tax
Regulatory Agreement.
(d) Any moneys remaining in an Account within the Rebate Fund after
payment to the United States, within sixty (60) days after the date on which the last Bond
of the corresponding series is redeemed, of one hundred percent (100%) of the Rebate
Amount as described in Section 148(f)(2) of the Code, shall be transferred to the Revenue
Fund.
10-70831.5 24
I
•
(e) The Trustee, as instructed by Certificate of the City, shall invest all
amounts held in the Rebate Fund in Investment Securities, subject to the restrictions set
forth in the applicable Tax Regulatory Agreements. Money shall not be transferred from
the Rebate Fund except as provided in subsection (c).
(f) Notwithstanding any other provision of this Indenture, the obligation to
remit the Rebate Amount to the United States and to comply with all other requirements
of this Section 507, Section 406 and each Tax Regulatory Agreement shall survive the
defeasance or payment in full of the Bonds.
Section 508. Debt Service Reserve Fund. As provided in Section 208 hereof, upon the
issuance of each series of Bonds there shall be deposited into the appropriate Account within the
Debt Service Reserve Fund, from the proceeds of such series of Bonds, an amount sufficient to
cause the amounts on deposit therein to be equal to the Reserve Requirement with respect to such
series of Bonds. Each Account within the Debt Service Reserve Fund shall be maintained in an
amount equal to the applicable Reserve Requirement. Moneys in Accounts in the Debt Service
Reserve Fund shall be used solely to pay the Accreted Value of the applicable series of Bonds
for which there are no available funds in the Bond Fund to make such payments, as the same
become due at maturity. If the amount in an Account within the Debt Service Reserve Fund is
reduced below the applicable Reserve Requirement, it shall be reimbursed in the amount of any
such deficiency as provided in Section 503. Notwithstanding the above provisions of this
Section 508, the amount on deposit in Accounts within the Debt Service Reserve Fund may be
used, together with other available funds, to provide for the payment at maturity or to redeem
prior to maturity all, but not less than all, of the corresponding series of Bonds. If an excess shall
exist at any time in an Account within the Debt Service Reserve Fund over and above the
applicable Reserve Requirement, such excess shall be transferred to the corresponding Account
of the Redemption Fund. The Trustee shall consider any excess that will result following
redemption in part pursuant to Section 301(a), (b) or (c), and shall transfer such excess to the
appropriate Account of the Redemption Fund so as to maximize the principal amount of Bonds
called for redemption.
Section 509. Cessation of Fund Deposits. When the moneys in the applicable
Accounts of the Bond Fund, the Debt Service Reserve Fund and the Redemption Fund shall be
and remain sufficient to pay in full the principal and interest or Accreted Value on all Bonds of
the corresponding series then Outstanding in accordance with Article VII of this Indenture,
together with the required fees and expenses to be paid or reimbursed to the Trustee and any
Paying Agent, the City shall have no further obligation to make further payments into said
Accounts.
Section 510. Separate Accounts Authorized. A Supplemental Indenture authorizing
the issuance of Additional Bonds may provide for the creation of separate Accounts within the
Bond Fund, Debt Service Reserve Fund, Redemption Fund, Project Fund, Costs of Issuance
Fund and Rebate Fund for such series of Bonds and such other Accounts as the City may direct.
If any Supplemental Indenture authorizing the issuance of Additional Bonds provides for
the establishment of separate Accounts for a series of Bonds, then such Supplemental Indenture
shall require that the Tax Increment receipts received by the City and deposited in the Revenue
10-70831.5 25
Fund shall be divided for deposit into Accounts within the Bond Fund and/or Redemption Fund
for each series of Bonds proportionately with the Outstanding principal amount of each series of
Bonds, to the end that the Bonds of each series shall be equally and ratable secured by the Tax
Increment receipts.
Any Supplemental Indenture authorizing the issuance of Additional Bonds may provide
that any proceeds of such series of Bonds and investment earnings thereon remaining after some
specified date, or after the construction of all facilities to be financed with the proceeds of such
series of Bonds, shall be applied to the redemption of such series of Bonds.
ARTICLE VI
INVESTMENTS
Section 601. Investment of Moneys. At the direction of the City or absent such
direction, the Trustee shall invest moneys in Funds or Accounts held by the Trustee in
Investment Securities with maturity or redemption dates consistent with the times at which said
moneys will be required for the purposes provided in this Indenture; provided, however, the
stated maturity dates of Investment Securities of Debt Service Reserve Fund moneys shall not
exceed years from the date of investment therein. Moneys in separate Funds or Accounts
may be commingled for the purpose of investment.
Investments in any Fund or Account shall be evaluated at least annually by the Trustee,
and in any event within thirty (30) days prior to the end of each Fiscal Year. The Trustee shall
report such determination of value to the City. For the purpose of determining the amount in any
Fund or Account, the City and the Trustee shall value all Investment Securities credited to such
Fund or Account at the price at which such Investment Securities are redeemable by the Holders
or owners thereof at their option if so redeemable, or, if not so redeemable, at the lesser of (i) the
cost of such Investment Securities minus the amortization of any premium or plus the
amortization of any discount thereon and (ii) the market value of such Investment Securities,
provided that Investment Securities credited to the Debt Service Reserve Fund, if not so
redeemable, shall be valued at the cost thereof minus the amortization of any premium or plus
the amortization of any discount thereon.
The Trustee shall sell or present for redemption any Investment Securities as necessary in
order to provide money for the purpose of making any payment required hereunder, and the
Trustee shall not be liable for any loss resulting from any such sale.
Section 602. Investment Earnings. Subject to the provisions of each Tax Regulatory
Agreement and Article V hereof, Investment Securities purchased with moneys held in or
attributable to any Fund or Account held by the Trustee under the provisions of this Indenture
shall be deemed at all times to be a part of such Fund or Account and the income or interest
earned, profits realized or losses suffered by a Fund or Account due to the investment thereof
shall be retained in, credited or charged, as the case may be, to such Fund or Account unless
otherwise provided pursuant to this Indenture.
10-70831.5 26
Section 603. Responsibility of Trustee. The Trustee shall not be responsible or liable
for any loss suffered in connection with any investment of moneys made by it at the direction of
the City.
ARTICLE VII
DISCHARGE OF LIEN
Section 701. Discharge of Lien. If the City shall pay or cause to be paid to the owners
of the Bonds the principal, premium, if any, and interest to become due thereon at the times and
in the manner stipulated therein, and if the City shall keep, perform and observe all and singular
the covenants and promises in the Bonds and in this Indenture expressed as to be kept, performed
and observed by it on its part, then these presents and the estate and rights hereby granted shall
cease, determine and be void, and thereupon the Trustee shall cancel and discharge the lien of
this Indenture, and execute and deliver to the City such instruments in writing as shall be
requisite to satisfy the lien hereof, and reconvey to the City the estate hereby conveyed, and
assign and deliver to the City any property at the time subject to the lien of this Indenture which
may then be in its possession, except moneys or Government Securities held by it for the
payment of the principal of and premium, if any, and interest on the Bonds.
Section 702. Bonds Deemed Paid. Any Bond shall be deemed to be paid within the
meaning of this Article VII when payment of the principal of and premium, if any, and interest
on such Bond (whether at maturity or upon redemption as provided in this Indenture, or
otherwise), either (i) shall have been made or caused to be made in accordance with the terms
thereof, or (ii) shall have been provided for by irrevocably depositing with the Trustee, in trust
and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such
payment or (2) Government Securities (provided that such deposit will not affect the tax-exempt
status of the interest on any of the Bonds or cause any of the Bonds to be classified as "arbitrage
bonds" within the meaning of Section 148(a) of the Code, as reflected in an opinion of Bond
Counsel delivered to the Trustee), maturing as to principal and interest in such amount and at
such times as will provide sufficient moneys to make such payment, and all necessary and proper
fees, compensation and expenses of the Trustee and any Paying Agent pertaining to the Bonds
with respect to which such deposit is made shall have been paid or the payment thereof provided
for to the satisfaction of the Trustee and any said Paying Agent.
Section 703. Non -Presentment of Bonds. In the event any Bonds shall not be
presented for payment when the principal thereof becomes due, either at maturity or otherwise,
or at the date fixed for redemption thereof, if there shall have been deposited with the Trustee for
that purpose, or left in trust if previously so deposited, funds sufficient to pay the principal
thereof, and premium, if any, together with all interest unpaid and due thereon, to the due date
thereof, for the benefit of the Holder thereof, all liability of the City to the Holder thereof for the
payment of the principal thereof, premium if any, and interest thereon, shall forthwith cease,
determine and be completely discharged, and thereupon it shall be the duty of the Trustee to hold
such fund or funds, without liability for interest thereon, for the benefit of the Holder of such
Bonds, who shall thereafter be restricted exclusively to such fund or funds, for any claim of
whatever nature on his part under this Indenture or on, or with respect to, the Bonds.
10-70831.5 27
ARTICLE VIII
DEFAULT PROVISIONS AND REMEDIES
OF TRUSTEE AND BONDHOLDERS
Section 801. Events of Default. Each of the following events shall constitute and is
referred to in this Indenture as an "Event of Default":
(a) Default in the due and punctual payment of any interest on any Bond;
(b) Default in the due and punctual payment of the principal of or premium, if
any, on any Bond, whether at the stated maturity thereof, or upon proceedings for
redemption thereof, or upon the maturity thereof by declaration;
(c) Default in the payment of any other amount required to be paid under this
Indenture or the performance or observance of any other of the covenants, agreements or
conditions contained in this Indenture, or in the Bonds issued hereunder, and continuance
thereof for a period of sixty (60) days after written notice specifying such failure and
requesting that it be remedied shall have been given to the City by the Trustee, which
may give such notice in its discretion and shall give such notice at the written request of
Bondholders of not less than 51% in aggregate principal amount of all Bonds then
Outstanding, unless the Trustee, or the Trustee and Holders of an aggregate principal
amount of Bonds not less than the aggregate principal amount of Bonds the Holders of
which requested such notice, as the case may be, shall agree in writing to an extension of
such period prior to its expiration; provided, however, if the failure stated in the notice
cannot be corrected within the applicable period, the Trustee will not unreasonably
withhold its consent to an extension of such time if corrective action is instituted by the
City within such period and is being diligently pursued;
(d) The filing of a petition in bankruptcy by or against the City under the
United States Bankruptcy Code or the commencement of a proceeding by or against the
City under any other law concerning insolvency, reorganization or bankruptcy; and
(e) If the State has limited or altered the rights of the City pursuant to the Act,
as in force on the date of this Indenture, to fulfill the terms of any agreements made with
the Trustee or the Bondholders or in any way impaired the rights and remedies of the
Trustee or the Bondholders while any Bonds are Outstanding.
The term "default" as used in clauses (a), (b) and (c) above shall mean default by the City
in the performance or observance of any of the covenants, agreements or conditions on its part
contained in this Indenture or in the Bonds Outstanding hereunder, exclusive of any period of
grace required to constitute a default an "Event of Default" as hereinabove provided.
Section 802. Acceleration. Upon the occurrence of an Event of Default, the Trustee
may, and upon the written request of the Holders of not less than 51% in aggregate principal
amount of Bonds Outstanding hereunder shall, by notice in writing delivered to the City, declare
the principal of all Bonds then Outstanding, together with the interest accrued thereon,
10-70831.5 28
immediately due and payable, and such principal and interest shall thereupon become and be
immediately due and payable.
Section 803. Other Remedies; Rights of Bondholders. Upon the occurrence of an
Event of Default, the Trustee may, as an alternative, pursue any available remedy by suit at law
or in equity, including, without limitation, mandamus to enforce the payment of the principal of
and premium, if any, and interest on the Bonds then Outstanding hereunder
If an Event of Default shall have occurred, and if it shall have been requested so to do by
the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding hereunder
and if it shall have been indemnified as provided in Section 901(1) hereof, the Trustee shall be
obligated to exercise such one or more of the rights and powers conferred upon it by this Section
803 as the Trustee, being advised by counsel, shall deem most expedient in the interests of the
Bondholders.
No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to
the Bondholders) is intended to be exclusive of any other remedy, but each and every such
remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now
or hereafter existing at law or in equity or by statute.
No delay or omission to exercise any right or power accruing upon any default or Event
of Default shall impair any such right or power or shall be construed to be a waiver of any such
default or Event of Default or acquiescence therein; and every such right and power may be
exercised from time to time and as often as may be deemed expedient.
No waiver of any default or Event of Default hereunder, whether by the Trustee or by the
Bondholders, shall extend to or shall affect any subsequent default or Event of Default or shall
impair any rights or remedies consequent thereon.
Section 804. Right of Bondholders to Direct Proceedings. Anything in this Indenture
to the contrary notwithstanding, the Holders of not less than 51% in aggregate principal amount
of Bonds Outstanding hereunder shall have the right, at any time, by an instrument or
instruments in writing executed and delivered to the Trustee, to direct the method and place of
conducting all proceedings to be taken in connection with the enforcement of the terms and
conditions of this Indenture, or for the appointment of a receiver or any other proceeding
hereunder; provided that such direction shall not be otherwise than in accordance with the
provisions of law and of this Indenture.
Section 805. Appointment of Receiver. Upon the occurrence of an Event of Default,
and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights
of the Trustee and of the Bondholders under this Indenture, the Trustee shall be entitled to the
appointment of a receiver or receivers of the Trust Estate and of the tolls, rents, revenues, issues,
earnings, income, products and profits thereof, including, without limitation, the Tax Increment
receipts, pending such proceedings with such powers as the court making such appointment shall
confer.
Section 806. Waiver. In
case of an Event of
Default
on its part, as
aforesaid, to the
extent that such rights may then
lawfully
be waived,
neither
the City nor
anyone claiming
10-70831.5 29
•
through the City or under the City shall or will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension or redemption laws now or thereafter in force, in order
to prevent or hinder the enforcement of this Indenture, but the City, for itself and all who may
claim through or under it, hereby waives, to the extent that it lawfully may do so, the benefit of
all such laws and all right of appraisement and redemption to which it may be entitled under the
laws of the State.
Section 807. Application of Moneys. Available moneys remaining after discharge of
costs, charges and liens prior to this Indenture shall be applied by the Trustee as follows:
(a) Unless the principal of all the Bonds shall have become or shall have been
declared due and payable, all such moneys shall be applied:
First: To the payment to the Persons entitled thereto of all
installments of interest then due, in the order of the maturity of the installments of
such interest, and, if the amount available shall not be sufficient to pay in full any
particular installment, then to the payment ratably, according to the amounts due
on such installment, to the Persons entitled thereto, without any discrimination or
privilege;
Second: To the payment to the Persons entitled thereto of the unpaid
principal of any of the Bonds which shall have become due (other than Bonds
called for redemption for the payment of which moneys are held pursuant to the
provisions of this Indenture), in the order of their due dates, with interest on such
Bonds from the respective dates upon which they become due, and, if the amount
available shall not be sufficient to pay in full Bonds due on any particular date,
together with such interest, then to the payment ratably, according to the amount
of principal due on such date, to the Persons entitled thereto without any
discrimination or privilege of any Bond over any other Bond and without
preference or priority of principal over interest or of interest over principal; and
Third: To the payment of the interest on and the principal of the
Bonds, and to the redemption of Bonds, all in accordance with the provisions of
Article V of this Indenture.
(b)
If the principal
of all the Bonds shall have become due or
shall have been
declared due
and payable, all
such moneys shall be applied first to the
payment of the
interest then
due and unpaid upon the Bonds, and then to the payment
of the principal
then due and
unpaid upon the
Bonds, in each case without preference or priority of any
Bond over any other Bond,
ratably, according to the amounts due
respectively for
principal and
interest, to the Persons entitled thereto.
(c) If the principal of all the Bonds shall have been declared due and payable,
and if such declaration shall thereafter have been rescinded and annulled under the
provisions of this Article VIII then, subject to the provisions of paragraph (b) of this
Section 807, in the event that the principal of all the Bonds shall later become due or be
10-70831.5 30
declared due and payable, the moneys shall be applied in accordance with the provisions
of paragraph (a) of this Section 807.
Whenever moneys are to be applied by the Trustee pursuant to the provisions of this
Section 807, such moneys shall be applied by it at such times, and from time to time, as it shall
determine, having due regard to the amount of such moneys available for application and the
likelihood of additional moneys becoming available for such application in the future. Whenever
the Trustee shall apply such funds, it shall fix the date (which shall be an interest payment date
unless it shall deem another date more suitable) upon which such application is to be made and
upon such date interest on the amounts of principal to be paid on such dates shall cease to accrue.
The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such
moneys and of the fixing of any such date and shall not be required to make payment to the
Holder of any Bond until such Bond shall be presented to the Trustee for appropriate
endorsement or for cancellation if fully paid.
Section 808. Remedies Vested in Trustee. All rights of action (including the right to
file proof of claim) under this Indenture or under any of the Bonds may be enforced by the
Trustee without the possession of any of the Bonds or the production thereof in any trial or other
proceeding relating thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its name as Trustee, without the necessity of joining as plaintiffs or defendants any
Bondholders hereby secured, and any recovery of judgment shall be for the equal benefit of the
Holders of all Outstanding Bonds.
Section 809. Rights and Remedies of Bondholders. No Bondholder shall have any
right to institute any suit, action or proceeding in equity or at law for the enforcement of this
Indenture or for the execution of any trust hereof or for the appointment of a receiver or any
other remedy hereunder, unless a default has occurred of which the Trustee has been notified as
provided in subsection (g) of Section 901, or of which by said subsection it is deemed to have
notice, nor unless such default shall have become an Event of Default and the Holders of not less
than 51% in aggregate principal amount of Bonds Outstanding hereunder shall have made
written request to the Trustee and shall have offered it reasonable opportunity either to proceed
to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its
own name, nor unless also they have offered to the Trustee indemnity as provided in
subsection (1) of Section 901, nor unless the Trustee shall thereafter fail or refuse to exercise the
powers hereinbefore granted, or to institute such action, suit or proceeding in its own name; and
such notification, request and offer of indemnity are hereby declared in every such case, at the
option of the Trustee, to be conditions precedent to the execution of the powers and trusts of this
Indenture, and to any action or cause of action for the enforcement of this Indenture or for the
appointment of a receiver or for any other remedy hereunder; it being understood and intended
that no one or more Holders of the Bonds shall have any right in any manner whatsoever to
affect, disturb or prejudice the lien of this Indenture by action of the Holder or Holders or to
enforce any right hereunder except in the manner herein provided, and that all proceedings at law
or in equity shall be instituted, held and maintained in the manner herein provided for the equal
benefit of the Holders of all Bonds Outstanding hereunder. Nothing in this Indenture contained
shall, however, affect or impair the right of any Bondholders to enforce the payment of the
principal of and premium, if any, and interest on any Bonds at and after the maturity thereof, or
the obligation of the City to pay the principal of and premium, if any, and interest on each of the
10-70831.5 31
Bonds issued hereunder to the respective Holders thereof at the time and place in said Bonds
expressed.
Section 810. Termination of Proceedings. In case the Trustee shall have proceeded to
enforce any right under this Indenture by the appointment of a receiver or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, then and in every such case the City and the Trustee shall be
restored to their former positions and rights hereunder with respect to the property herein
conveyed, and all rights, remedies and powers of the Trustee shall continue as if no such
proceedings had been taken, except to the extent the Trustee is legally bound by such adverse
determination.
Section 811. Waivers of Events of Default. The Trustee may, and upon the written
request of the Holders of not less than 51% in principal amount of all Bonds Outstanding
hereunder shall, waive any Event of Default hereunder and its consequences and rescind any
declaration of maturity of principal; provided, however, there shall not be waived any Event of
Default described in clause (a) or (b) of the first paragraph of Section 801 hereof, unless prior to
such waiver or rescission all arrears of principal (due otherwise than by declaration) and interest,
and all expenses of the Trustee and Paying Agent, shall have been paid or provided for. In case
of any such waiver or rescission the City, the Trustee and the Bondholders shall be restored to
their former positions and rights hereunder respectively, but no such waiver or rescission shall
extend to any subsequent or other default, or impair any right subsequent thereon.
ARTICLE IX
TRUSTEE AND PAYING AGENTS
Section 901. Acceptance of Trusts. The Trustee hereby accepts the trusts imposed
upon it by this Indenture and agrees to perform said trusts, but only upon and subject to the
following expressed terms and conditions:
(a) The Trustee may execute any of the trusts or powers hereof and perform
any duties required of it by or through attorneys, agents, receivers or employees, and
shall be entitled to advice of counsel concerning all matters of trusts hereof and its duties
hereunder, and may in all cases pay reasonable compensation to all such attorneys,
agents, receivers and employees as may reasonably be employed in connection with the
trusts hereof. Reimbursement of such compensation paid by the Trustee is subject to the
provisions of Section 902 hereof. The Trustee may act upon the opinion or advice of any
attorney, surveyor, engineer or accountant selected by it in the exercise of reasonable
care, or, if selected or retained by the City prior to the occurrence of a default of which
the Trustee has been notified as provided in subsection (g) of this Section 901, or of
which by said subsection the Trustee is deemed to have notice, approved by the Trustee
in the exercise of such care. The Trustee shall not be responsible for any loss or damage
resulting from an action or nonaction in accordance with any such opinion or advice.
(b)
The
Trustee shall not
be responsible for
any recital herein, or in the Bonds
(except in
respect
to the certificate
of authentication
of the Trustee endorsed on such
10-70831.5 32
Bonds), or for the validity of the execution by the City of this Indenture or of any
Supplemental Indentures or instruments of further assurance, or for the sufficiency of the
security for the Bonds issued hereunder or intended to be secured hereby, or for the value
of the title of the property herein conveyed or otherwise as to the maintenance of the
security hereof; except that in the event the Trustee enters into possession of a part or all
of the property herein conveyed pursuant to any provision of this Indenture, it shall use
due diligence in preserving such property; and the Trustee shall not be bound to ascertain
or inquire as to the performance or observance of any covenants, conditions and
agreements aforesaid as to the condition of the property herein conveyed.
(c) The Trustee may become the owner of Bonds secured hereby with the
same rights which it would have if not Trustee.
(d) The Trustee shall be protected in acting upon any notice, request, consent,
certificate, order, affidavit, letter, telegram or other paper or document believed by it, in
the exercise of reasonable care, to be genuine and correct and to have been signed or sent
by the proper person or persons. Any action taken by the Trustee pursuant to this
Indenture upon the request or authority or consent of the owner of any Bond secured
hereby, shall be conclusive and binding upon all future owners of the same Bond and
upon Bonds issued in exchange therefor or in place thereof
(e) As to the existence or nonexistence of any fact or as to the sufficiency or
validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon
a Certificate of the City signed by its Mayor and attested by the City Clerk as sufficient
evidence of the facts therein contained and, prior to the occurrence of a default of which
it has been notified as provided in subsection (g) of this Section 901, or of which by that
subsection it is deemed to have notice, shall also be at liberty to accept a similar
certificate to the effect that any particular dealing, transaction, or action is necessary or
expedient, but may at its discretion, at the reasonable expense of the City, in every case
secure such further evidence as it may think necessary or advisable but shall in no case be
bound to secure the same. The Trustee may accept a certificate of the City Clerk under
the City's seal to the effect that a resolution or ordinance in the form therein set forth has
been adopted by the City as conclusive evidence that such resolution or ordinance has
been duly adopted, and is in fill force and effect.
(f) The permissive right of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty of the Trustee, and the Trustee shall be
answerable only for its own gross negligence or willful misconduct.
(g) The Trustee shall not be required to take notice or be deemed to have
notice of any default hereunder (except for defaults under clause (a) or (b) of the first
paragraph of Section 801 hereof as to which the Trustee shall be deemed to have notice)
unless the Trustee shall be specifically notified in writing of such default by the City or
by the Holders of at least 10% in aggregate principal amount of Bonds Outstanding
hereunder, and all notices or other instruments required by this Indenture to be delivered
to the Trustee must, in order to be effective, be delivered to the principal corporate trust
10-70831.5 33
office of the
Trustee, and
in the absence of such
notice so delivered, the Trustee may
conclusively
assume there
is no such default except
as aforesaid.
(h) [Reserved].
(i) At any and all reasonable times the Trustee, and its duly authorized agents,
attorneys, experts, engineers, accountants and representatives, shall have the right fully to
inspect any and all of the property herein conveyed, including all books, papers and
records of the City pertaining to the Tax Increment receipts and the Bonds, and to take
such memoranda from and in regard thereto as may be desired.
(j) The Trustee shall not be required to give any bond or surety in respect of
the execution of the said trusts and powers or otherwise in respect of the premises.
(k) Notwithstanding anything elsewhere in this Indenture contained, the
Trustee shall have the right, but shall not be required, to demand, in respect of the
authentication of any Bonds, the withdrawal of any cash, the release of any property, or
any action whatsoever within the purview of this Indenture, any showings, certificates,
opinions, appraisals or other information, or corporate action or evidence thereof, in
addition to that by the terms hereof required as a condition of such action by the Trustee,
deemed desirable for the purpose of establishing the right of the City to the authentication
of any Bonds, the withdrawal of any cash, the release of any property, or the taking of
any other action by the Trustee.
(I) Before taking such action hereunder, the Trustee may require that it be
furnished an indemnity bond satisfactory to it for the reimbursement to it of all expenses
to which it may be put and to protect it against all liability, except liability which is
adjudicated to have resulted from the gross negligence or willful misconduct of the
Trustee, by reason of any action so taken by the Trustee.
Section 902. Fees, Charges and Expenses of Trustee and Paying Agents; Trustee's
Prior Lien. (a) Subject to subsection (b) of this Section 902, the City shall, from moneys
lawfully available therefor, pay to the Trustee and any Paying Agent reasonable compensation
for all services performed hereunder and also all reasonable expenses, charges and other
disbursements and those of their attorneys, agents and employees incurred in and about the
administration and execution of the trusts hereby created and the performance of the powers and
duties hereunder and, to the extent permitted by law and from moneys lawfully available
therefor, shall indemnify and save the Trustee harmless against any liabilities which it may incur
in the exercise and performance of its powers and duties hereunder. With respect to the
Series 2005 Bonds, the Trustee's initial authentication fee shall be $ and the annual
administration fee of the Trustee shall be up to, but not exceeding, $ . If the City shall fail
to make any payment required by this subsection (a), the Trustee may make such payment from
any moneys in its possession under the provisions of this Indenture and shall be entitled to a
preference therefor over any of the Bonds Outstanding hereunder. The City shall not be required
to indemnify the Trustee against any liabilities which the Trustee may incur as a result of
negligent or wrongful acts or omissions of the Trustee.
10-70831.5 34
(b) The City shall pay to the Trustee compensation for its services as described in
Section 902(a), provided that such compensation, together with all expenses, charges and other
disbursements of the Trustee and its attorneys, agents and employees and all reimbursements to
the Trustee for all costs and other disbursements as described in Section 901(a) hereof shall not
exceed $ annually (not including the initial authentication fee) without the prior written
approval of the City, which approval shall not be unreasonably withheld. If the Trustee wishes
to consult with or retain counsel for any purpose hereunder whose anticipated fees, together with
all other compensation, disbursements and reimbursements of the Trustee and its attorneys,
agents and employees to be paid by the City hereunder, shall exceed $ annually, then
such counsel shall have to be acceptable to the City and such fees shall have to be approved by
the City as described above.
Section 903. Additional Duties of Trustee. (a) In addition to the other duties of the
Trustee described in this Indenture, it shall be the duty of the Trustee, on or before the tenth day
of each month after the month in which the Series 2005 Bonds are delivered, to file with the City
a statement setting forth in respect of the preceding calendar month:
(i) the amount withdrawn or transferred by it and the amount deposited with
it on account of each Fund and Account held by it under the provisions of this Indenture;
(ii) the amount on deposit with it at the end of such month to the credit of each
such Fund and Account;
(iii) a brief description (cost and market value) of all obligations held by it as
an investment of moneys in each such Fund and Account;
(iv) the amount applied to the purchase or redemption of Bonds under the
provisions of this Indenture and a description of the Bonds or portions of Bonds so
purchased or redeemed; and
(v) any other information that the City may reasonably request, including, but
not limited to, submittal of monthly statements of activity relating to the Bonds. Such
information shall also be provided at the direction of the City to one additional designated
entity.
All records and files pertaining to each such Fund and Account in the custody of the
Trustee hereunder shall be open at all reasonable times to the inspection of the City and its
agents and representatives, and the City may make copies thereof.
(b) The Trustee additionally shall be responsible for the preparation and timely
distribution of any and all forms and reports required by law to all Bondholders, the State and the
Internal Revenue Service in connection with the payment to the Bondholders of interest on the
Bonds.
Section 904. Notice to Bondholders of Default. If a default occurs of which the
Trustee is pursuant to the provisions of Section 901(g) deemed to have or is given notice, the
Trustee shall promptly make demand upon the City and give notice to each owner of Bonds then
Outstanding.
10.70831.5 35
Section 905. Intervention by Trustee. In any judicial proceeding to which the City is a
party and which in the opinion of the Trustee and its counsel has a substantial bearing on the
interests of Holders of Bonds issued hereunder, the Trustee may intervene on behalf of
Bondholders and shall do so if requested in writing by the Holders of at least 51% of the
aggregate principal amount of Bonds Outstanding hereunder. The rights and obligations of the
Trustee under this Section 905 are subject to the approval of the court having jurisdiction in the
premises.
Section 906. Merger or Consolidation of Trustee. Any bank or trust company to
which the Trustee may be merged, or with which it may be consolidated, or to which it may sell
or transfer its trust business and assets as a whole or substantially as a whole, or any bank or trust
company resulting from any such sale, merger, consolidation or transfer to which it is a party,
ipso facto, shall be and become successor trustee hereunder and vested with all of the title to the
whole property or Trust Estate and all the trusts, powers, discretions, immunities, privileges and
all other matters as was its predecessor, without the execution or filing of any instrument or any
further act, deed, or conveyance on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that such successor trustee shall have capital and
surplus of at least $40 million.
Section 907. Resignation by Trustee. The Trustee and any successor trustee may at
any time resign from the trusts hereby created by giving written notice to the City and the
Bondholders, and such resignation shall take effect upon the appointment of a successor trustee
by the Bondholders or by the City. Such notice may be served personally or sent by registered
mail (to the City) or first class mail (to the Bondholders).
Section 908. Removal of Trustee. The Trustee may be removed at any time by an
instrument or concurrent instruments in writing delivered to the Trustee and to the City, and
signed by the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding
hereunder.
Section 909. Appointment of Successor Trustee. In case the Trustee hereunder shall
resign or be removed, or be dissolved, or shall be in course of dissolution or liquidation, or
otherwise become incapable of acting hereunder, or in case it shall be taken under the control of
any public officer or officers, or of a receiver appointed by the court, a successor may be
appointed by the Holders of not less than 51% in aggregate principal amount of Bonds
Outstanding hereunder, by an instrument or concurrent instruments in writing signed by such
Holders, or by their attorneys in fact, duly authorized; provided, nevertheless, that in case of such
vacancy the City by an instrument executed and signed by its Mayor and attested by its City
Recorder/Treasurer under its seal, shall appoint a temporary trustee to fill such vacancy until a
successor trustee shall be appointed by the Bondholders in the manner above provided. Any
such temporary trustee appointed by the City shall immediately and without further act be
superseded by the trustee appointed by such Bondholders. Every such temporary trustee and
every such successor trustee shall be a trust company or bank in good standing, having capital
and surplus of not less than $40 million.
Section 910. Concerning Any Successor Trustee. Every successor or temporary
trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to
10-70831.5 36
the City an instrument in writing accepting such appointment hereunder, and thereupon such
successor or temporary trustee, without any further act or conveyance, shall become fully vested
with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessor;
but such predecessor shall, nevertheless, on the written request of the City or of its successor
trustee, execute and deliver an instrument transferring to such successor all the estate, properties,
rights, powers and trusts of such predecessor hereunder; and every predecessor trustee shall
deliver all securities, moneys and any other property held by it as trustee hereunder to its
successor. Should any instrument in writing from the City be required by any successor trustee
for more fully and certainly vesting in such successor the estates, rights, powers and duties
hereby vested or intended to be vested in the predecessor trustee, any and all such instruments in
writing shall, on request, be executed, acknowledged, and delivered by the City.
Section 911. Reliance Upon Instruments. The resolutions, opinions, certificates and
other instruments provided for in this Indenture may be accepted and relied upon by the Trustee
as conclusive evidence of the facts and conclusions stated therein and shall be full warrant,
protection and authority to the Trustee for its actions taken hereunder.
Section 912. Appointment of Co -Trustee. The City and the Trustee shall have power
to appoint, and upon the request of the Trustee the City shall for such purpose join with the
Trustee in the execution of all instruments necessary or proper to appoint, another corporation or
one or more Persons approved by the Trustee, either to act as co -trustee or co -trustees jointly
with the Trustee of all or any of the property subject to the lien hereof, with such powers as may
be provided in the instrument of appointment and to vest in such corporation or Person or
Persons as such co -trustee any property, title, right or power deemed necessary or desirable. In
the event that the City shall not have joined in such appointment within fifteen (15) days after the
receipt by it of a request so to do, the Trustee alone shall have the power to make such
appointment. Should any deed, conveyance or instrument in writing from the City be required by
the co -trustee so appointed for more fully and certainly vesting in and confirming to such co -
trustee such properties, rights, powers, trusts, duties and obligations, any and all such deeds,
conveyances and instruments in writing shall, on request, be executed, acknowledged and
delivered by the City. Every such co -trustee shall, to the extent permitted by law, be appointed
subject to the following provisions and conditions, namely:
(1) The Bonds shall be authenticated and delivered, and all powers, duties,
obligations and rights conferred upon the Trustee in respect of the custody of all money
and securities pledged or deposited hereunder, shall be exercised solely by the Trustee;
and
(2) The Trustee, at any time by an instrument in writing, may remove any
such separate Trustee or co -trustee.
Every instrument, other than this Indenture, appointing any such co -trustee shall refer to
this Indenture and the conditions of this Article IX expressed, and upon the acceptance in writing
by such co -trustee, the co -trustee shall be vested with the estate or property specified in such
instrument, jointly with the Trustee (except insofar as local law makes it necessary for any
separate trustee to act alone), subject to all the trusts, conditions and provisions of this Indenture.
Any such co -trustee may at any time, by an instrument in writing, constitute the Trustee as the
10-70831.5 37
. 0 r
co -trustee's agent or attorney -in -fact with full power and authority, to the extent authorized by
law, to do all acts and things and exercise all discretion authorized or permitted by the co -trustee,
for and on behalf of the co -trustee and in the co -trustee's name. In case any co -trustee shall die,
become incapable of acting, resign or be removed, all the estate, properties, rights, powers,
trusts, duties and obligations of said co -trustee shall vest in and be exercised by the Trustee until
the appointment of a new trustee or a successor to such co -trustee.
Section 913. Designation and Succession of Paying Agents. The Trustee and any
other banks or trust companies designated as Paying Agent or Paying Agents in any
Supplemental Indenture or in an instrument appointing a successor Trustee shall be the Paying
Agent or Paying Agents for the Bonds.
Any bank or trust company with which or into which any Paying Agent may be merged
or consolidated, or to which the assets and business of such Paying Agent may be sold, shall be
deemed the successor of such Paying Agent for the purposes of this Indenture. If the position of
Paying Agent shall become vacant for any reason, the City shall, within thirty (30) days
thereafter, appoint such bank or trust company as shall be specified by the City as such Paying
Agent to fill such vacancy; provided, however, that, if the City shall fail to appoint such Paying
Agent within said period, the Trustee shall make such appointment.
The Paying Agents shall enjoy the same protective provisions in the performance of its
duties hereunder as are specified in Section 901 hereof with respect to the Trustee insofar as such
provisions may be applicable.
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 1001. Supplemental Indentures Not Requiring Consent of Bondholders.
The City and the Trustee may, from time to time and at any time, without the consent of or
notice to the Bondholders, enter into Supplemental Indentures as follows:
(a) to cure any formal defect, omission, inconsistency or ambiguity in this
Indenture;
(b) to grant to or confer or impose upon the Trustee for the benefit of the
Bondholders any additional rights, remedies, powers, authority, security, liabilities or
duties which may lawfully be granted, conferred or imposed and which are not contrary
to or inconsistent with this Indenture as theretofore in effect, provided that no such
additional liabilities or duties shall be imposed upon the Trustee without its consent;
(c) to add to the covenants and agreements of, and limitations and restrictions
upon, the City in this Indenture other covenants, agreements, limitations and restrictions
to be observed by the City which are not contrary to or inconsistent with this Indenture as
theretofore in effect;
10708315 38
(d) to confirm, as further assurance, any pledge under, and the subjection to
any claim, lien or pledge created or to be created by, this Indenture, of the Trust Estate or
of any other moneys, securities or funds;
(e)
to
comply with
the requirements of the Trust Indenture Act of 1939, as
from time
to time
amended;
(f) to authorize the issuance and sale of one or more series of Additional
Bonds;
(g) to make such additions, deletions or modifications as may be necessary to
assure compliance with Section 148(f) of the Code relating to required rebate to the
United States or otherwise as may be necessary to assure exemption from federal income
taxation of interest on the Bonds; or
(h) to modify, alter, amend or supplement this Indenture in any other respect
which is not materially adverse to the Bondholders and which does not involve a change
described in clause (a), (b), (c), (d), (e) or (f) of Section 1002 hereof and which, in the
judgment of the Trustee, is not to the prejudice of the Trustee.
Section 1002. Supplemental Indentures Requiring Consent of Bondholders. Subject
to the terms and provisions contained in this Section 1002, and not otherwise, the Holders of not
less than 2/3 in aggregate principal amount of the Bonds then Outstanding shall have the right,
from time to time, anything contained in this Indenture to the contrary notwithstanding, to
consent to and approve the execution by the City and the Trustee of such indenture or indentures
supplemental hereto as shall be deemed necessary and desirable by the City for the purpose of
modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or
provisions contained in this Indenture or in any Supplemental Indenture; provided, however, that.
nothing herein contained shall permit or be construed as permitting (a) an extension of the
maturity (or mandatory redemption date) of the principal of or the interest on any Bond issued
hereunder, or (b) a reduction in the principal amount of or redemption premium or rate of interest
on any Bond issued hereunder, or (c) the creation of any lien on the Trust Estate or any part
thereof, except as hereinbefore expressly permitted, or (d) a privilege or priority of any Bond or
Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the
Bonds required for consent to such Supplemental Indenture, or (f) depriving the Holder of any
Bond then Outstanding of the lien hereby created on the Trust Estate. Nothing herein contained,
however, shall be construed as making necessary the approval of Bondholders of the execution
of any Supplemental Indenture as provided in Section 1001 of this Article X.
If, at any time the City shall request the Trustee to enter into any Supplemental Indenture
for any of the purposes of this Section, the Trustee shall, at the expense of the City, cause notice
of the proposed execution of such Supplemental Indenture to be mailed by first class mail to each
registered owner of the Bonds. Such notice shall briefly set forth the nature of the proposed
Supplemental Indenture and shall state that copies thereof are on file at the principal office of the
Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to any
liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall
not affect the validity of such Supplemental Indenture when consented to and approved as
10-70831.5 39
provided in this Section 1002. If the Holders of not less than 2/3 in aggregate principal amount
of the Bonds Outstanding at the time of the execution of any such Supplemental Indenture shall
have consented to and approved the execution thereof as herein provided; no Holder of any Bond
shall have any right to object to any of the terms and provisions contained therein, or the
operation thereof, or in any manner to question the propriety of the execution thereof, or to
enjoin or restrain the Trustee or the City from executing the same or from taking any action
pursuant to the provisions thereof.
Section 1003. Effect of Supplemental Indentures. Upon the execution of any
Supplemental Indenture entered into pursuant to Section 1001 or 1002 hereof, this Indenture
shall be deemed to be modified and amended in accordance therewith.
ARTICLE XI
MISCELLANEOUS
Section 1101. Consents, etc. of Bondholders. Any request, direction, objection or
other instrument required by this Indenture to be signed and executed by the Bondholders may
be in any number of concurrent writings of similar tenor and may be signed or executed by such
Bondholders in person or by agent appointed in writing. Proof of the execution of any such
request, direction, objection or other instrument or of the writing appointing any such agent and
of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the
purposes of this Indenture, and shall be conclusive in favor of the Trustee with regard to any
action taken by it under such request or other instrument, namely:
(a) The fact and date of the execution by any Person of any such writing may
be proved by the certificate of any officer in any jurisdiction who by law has power to
take acknowledgments within such jurisdiction that the Person signing such writing
acknowledged before such officer the execution thereof, or by an affidavit of any witness
to such execution.
(b) The fact of ownership of Bonds and the amount or amounts, numbers, and
other identification of such Bonds, and the date of holding the same shall be proved by
the registration books of the City maintained by the Trustee, as Bond registrar.
Section 1102. Notices. Except as otherwise provided in this Indenture, all notices,
certificates or other communications shall be sufficiently given and shall be deemed given when
mailed by registered or certified mail, postage prepaid, to the City or the Trustee. Notices,
certificates or other communications shall be sent to the following addresses:
City: City of Fayetteville
113 West Mountain
Fayetteville, Arkansas 72701
Attention: Mayor
10-703313 40
Trustee:
. Arkansas
Attention:
Either of
the foregoing may, by notice given hereunder, designate any
further
or different
addresses
to which subsequent notices, certificates or other communications
shall be
sent.
Section 1103. Limitation of Rights. With the exception of rights herein expressly
conferred, nothing expressed or mentioned in or to be implied from this Indenture, or the Bonds
issued hereunder, is intended or shall be construed to give to any person or company other than
the parties hereto, and the Holders of the Bonds secured by this Indenture any legal or equitable
rights, remedy, or claim under or in respect to this Indenture or any covenants, conditions, and
provisions hereof being intended to be and being for the sole exclusive benefit of the parties
hereto and the Holders of the Bonds hereby secured as herein provided.
Section 1104. Severability. If any provisions of this Indenture shall be held or deemed
to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any
provisions or any constitution or statute or rule of public policy, or for any other reason, such
circumstances shall not have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to any extent whatever.
The invalidity of
any one or more phrases, sentences,
clauses or paragraphs in this
Indenture contained shall
not affect the remaining portions of this
Indenture
or any part thereof.
Section 1105. Applicable Provisions of Law. This Indenture shall be considered to
have been executed in the State of Arkansas and it is the intention of the parties that the
substantive law of the State of Arkansas govern as to all questions of interpretation, validity and
effect.
Section 1106. Counterparts. This Indenture may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same
instrument.
Section 1107. Successors and Assigns. All the covenants, stipulations, provisions,
agreements, rights, remedies and claims of the parties hereto in this Indenture contained shall
bind and inure to the benefit of their successors and assigns.
Section 1108. Captions. The captions or headings in this Indenture are for convenience
only and in no way define, limit or describe the scope or intent of any provisions or sections of
this Indenture.
Section 1109. Photocopies and Reproductions. A photocopy or other reproduction of
this Indenture may be filed as a financing statement pursuant to the Uniform Commercial Code,
although the signatures of the City and the Trustee in such reproduction are not original manual
signatures.
10-70831.5 41
Section 1110. Bonds Owned by the City. In determining whether Bondholders of the
requisite aggregate principal amount of the Bonds have concurred in any direction, consent or
waiver under this Indenture, Bonds which are owned by the City shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination, except that, for the
purpose of determining whether the Trustee shall be protected in relying on any such direction,
consent or waiver, only Bonds which the Trustee knows are so owned shall be so disregarded.
Bonds so owned which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Bonds and that the pledgee is not the City. In case of a dispute as to such right, any
decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10-70831.5 42
IN WITNESS WHEREOF, the City has caused these presents to be signed in its name
and behalf by its Mayor and its corporate seal to be hereunto affixed and attested by its City
Clerk, and, to evidence its acceptance of the trust hereby created, the Trustee has caused these
presents to be signed in its behalf by its duly authorized officers and its corporate seal to be
hereto affixed.
CITY OF FAYETTEVILLE, ARKANSAS
By:
Mayor
ATTEST:
City Clerk
(SEAL)
as Trustee
By:
Title:
ATTEST:
Title:
(SEAL)
10.70831.5 43
ACKNOWLEDGMENT
STATE OF ARKANSAS )
) ss.
COUNTY OF WASHINGTON )
Before me a Notary Public, duly commissioned, qualified and acting within and for the
State and county aforesaid, appeared in person the within named Dan Coody and Sondra Smith,
Mayor and City Clerk, respectively, of the City of Fayetteville, Arkansas, to me personally
known, who stated that they were duly authorized in their respective capacities to execute the
foregoing instrument for and in the name of the City, and further stated and acknowledged that
they had signed, executed and delivered the foregoing instrument for the consideration, uses and
purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this _ day
of April, 2005.
Notary Public
My Commission expires:
(SEAL)
[ACKNOWLEDGEMENT TO TRUST INDENTURE]
10-70831.5 44
ACKNOWLEDGMENT
STATE OF ARKANSAS
ss.
COUNTY OF
Before me a Notary Public, duly commissioned, qualified and acting within and for the
State and county aforesaid, appeared in person the within named and
the and the , respectively, of
to me personally known, who stated that they were duly
authorized in their respective capacities to execute the foregoing instrument for and in the name
of the [Bank], and further stated and acknowledged that they had signed, executed and delivered
the foregoing instrument for the consideration, uses and purposes therein mentioned and set
forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this _ day
of April, 2005.
My Commission expires:
(SEAL)
Notary Public
[ACKNOWLEDGEMENT TO TRUST INDENTURE]
10-70831.5 45
EXHIBIT A TO TRUST INDENTURE
Form of Series 2005 Bond
Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to the City or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in
such other name as is requested by the authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized representative of
DTC), any transfer, pledge or other use hereoffor value or otherwise by or to any person is
wrongful inasmuch as the registered owner hereof Cede & Co., has an interest herein.
REGISTERED
No. R05-
$
UNITED STATES OF AMERICA
STATE OF ARKANSAS
CITY OF FAYETTEVILLE, ARKANSAS
TAX INCREMENT INTEREST ACCRETION BOND
(HIGHWAY 71 EAST SQUARE REDEVELOPMENT DISTRICT NO. 1 PROJECT)
SERIES 2005
Interest Rate: _%
Date of Bond: April _, 2005
Registered Owner: CEDE & CO.
Principal Amount:
KNOW ALL MEN BY THESE PRESENTS:
Maturity Date: August 1, 2029
DOLLARS
That the City of Fayetteville, Arkansas, a municipality and political subdivision
organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value
received, hereby promises to pay to the Registered Owner shown above, or registered assigns, on
the Maturity Date shown above, but solely from the source and in the manner hereinafter set
forth, the Principal Amount shown above and the interest accreted thereon. This bond will
accrete interest from the date of its issuance through maturity or earlier redemption at the Interest
Rate per annum shown above, such interest to compound semiannually on February 1 and
August 1 of each year, commencing on August 1, 2005, as set forth in Exhibit C to the Indenture
identified and defined below. The Accreted Value (as defined in the Indenture) of this bond and
any applicable redemption premium is payable in lawful money of the United States of America
upon the presentation and surrender hereof at the principal corporate trust office of
, , Arkansas, or its successor or successors, as trustee (the
"Trustee"). Notwithstanding the foregoing, so long as Cede & Co. or another nominee of The
Depository Trust Company is the registered owner of this bond, payment of the Accreted Value
hereof and any redemption premium shall be made by wire transfer of immediately available
funds.
10-70831.5 A -I
This bond, designated "Tax Increment Interest Accretion Bond (Highway 71 East Square
Redevelopment District No. 1 Project), Series 2005", is one of a series of bonds aggregating
Dollars ($ ) (the "Series 2005 Bonds"). The
Series 2005 Bonds are being issued for the purpose of financing the costs of acquiring certain
real property within the District (as defined below) and demolishing existing structures thereon,
and the construction of certain sidewalk and crosswalk improvements within the District (the
"Project"), funding a debt service reserve, and paying the costs of issuance of the Series 2005
Bonds.
The Series 2005 Bonds are issued under and are secured by and entitled to the protection
of a Trust Indenture dated as of April 15, 2005 (the "Indenture"), by and between the City and
the Trustee, which Indenture is available for inspection at the principal corporate trust office of
the Trustee. Reference is hereby made to the Indenture and to all indentures supplemental
thereto for the provisions, among others, with respect to the nature and extent of the security, the
rights, duties and obligations of the City, the Trustee and the owners of the Series 2005 Bonds,
and the terms upon which the Series 2005 Bonds are issued and secured.
The Series 2005 Bonds are issued pursuant to and in full compliance with the
Constitution and laws of the State of Arkansas, including particularly Amendment No. 78 to the
Constitution of Arkansas, as implemented by Act 1197 of 2001, codified as Arkansas Code
Annotated (2003 Supp.) §§14-168-301 et seq. (as from time to time amended, the "Act"), and
Ordinance No. of the City adopted [March 15], 2005, which ordinance authorized the
execution and delivery of the Indenture and the issuance of the Series 2005 Bonds. In
accordance with the Act, the City has pledged all receipts from the ad valorem tax increment (as
defined in the Act, the "Tax Increment") relating to its Highway 71 East Square Redevelopment
District No. 1 in order to provide funds for the repayment of the Series 2005 Bonds.
The pledge of the receipts of the Tax Increment presently secure payment of the Series
2005 Bonds only, but such Tax Increment receipts may additionally be pledged to secure the
payment of Additional Bonds issued under the provisions of the Indenture. The Indenture
provides that the City may hereafter issue Additional Bonds from time to time under certain
terms and conditions contained in the Indenture and, if issued or incurred, such Additional Bonds
will rank on a parity of security with the Series 2005 Bonds and be equally and ratably secured
by and entitled to the protection of the Indenture.
The Series 2005 Bonds are not general obligations of the City, but are special obligations
secured by an irrevocable pledge of and lien on the Tax Increment receipts, as more particularly
described in the Indenture. In no event shall the Series 2005 Bonds constitute an indebtedness of
the City within the meaning of any constitutional or statutory limitation or a pledge of the faith
and credit of the City.
The holder of this Series 2005 Bond shall have no right to enforce the provisions of the
Indenture or to institute action to enforce the covenants therein, or to take any action with respect
to any event of default under the Indenture, or to institute, appear in or defend any suit or other
proceeding with respect thereto, except as provided in the Indenture. In certain events, on the
conditions, in the manner and with the effect set forth in the Indenture, the principal of all the
Series 2005 Bonds and Additional Bonds, if any, issued under the Indenture and then outstanding
10-70831.5 A-2
may be declared and may become due and payable before the stated maturity thereof, together
with accrued or accreted interest thereon. Modifications or alterations of the indenture, or of any
indenture supplemental thereto, may be made only to the extent and in the circumstances
permitted by the Indenture.
The Series 2005 Bonds shall be redeemed prior to maturity on any date, in whole or in
part, by lot in such manner as the Trustee shall determine, at a redemption price equal to 100% of
the Accreted Value thereof as of the date of redemption, (i) from moneys in the Series 2005
Account of the Project Fund in excess of the amount needed to complete the Project, and (ii)
from the first $120,000 of proceeds realized by the City upon any sale of the real property
originally acquired with the proceeds of the Series 2005 Bonds.
The Series 2005 Bonds shall be redeemed prior to maturity on each February 1, in whole or
in part (in minimum $5,000 denominations), by lot in such manner as the Trustee shall determine, at
a redemption price equal to 100% of the Accreted Value thereof as of the date of redemption, to the
extent of Tax Increment receipts and investment earnings and permitted reductions in the balance of
the Debt Service Reserve Fund deposited in the Series 2005 Account of the Redemption Fund. On
a monthly basis, following any required transfers of Tax Increment receipts to satisfy deficiencies
in the Debt Service Reserve Fund or the Rebate Fund and to pay Trustee fees and expenses, the
remaining balance of such Tax Increment receipts shall be transferred to the various accounts of
the Redemption Fund in proportion to the outstanding principal amounts of the related series of
Bonds.
On and after February 1, 2010, the Series 2005 Bonds shall be subject to redemption
prior to maturity at the option of the City, in whole or in part on any date (in minimum $5,000
denominations), by lot in such manner as the Trustee shall determine, from funds from any
source, at a redemption price equal to 100% of the Accreted Value thereof as of the date of
redemption.
Upon any determination that the Tax Increment is to be calculated by including [all of] [any
portion of] the 25 mills described in Amendment 74 to the Constitution of the State of Arkansas
within the "applicable ad valorem rate" (as defined in the Act), which determination is evidenced by
(i) an opinion of the Arkansas Attorney General, (ii) a decision by an Arkansas court of competent
jurisdiction, (iii) legislation enacted by the Arkansas General Assembly, or (iv) an amendment to
the Constitution of the State of Arkansas, then the Series 2005 Bonds shall be subject to redemption
prior to maturity at the option of the City, in whole on any date, from funds from any source, at a
redemption price equal to 101% of the principal amount of the Outstanding Series 2005 Bonds plus
the accreted interest thereon as of the date of redemption.
In selecting Series 2005 Bonds for redemption prior to maturity, in the case any
outstanding Series 2005 Bond is in a denomination greater than $5,000, each $5,000 of face
value of such Series 2005 Bond shall be treated as a separate Series 2005 Bond of the
denomination of $5,000.
In the event any of the Series 2005 Bonds or portions thereof are called for redemption,
notice thereof shall be given by the Trustee by first class mail to the registered owner of each
such Series 2005 Bond addressed to such registered owner at his registered address and placed in
10-70831.5 A-3
the mails not less than thirty (30) nor more than sixty (60) days prior to the date fixed for
redemption; provided, however, that failure to give such notice by mailing, or any defect therein,
shall not affect the validity of the proceedings for the redemption of any Series 2005 Bond with
respect to which no such failure or defect has occurred. Each notice shall identify the Series
2005 Bonds or portions thereof being called, and the date on which they shall be presented for
payment. After the date specified in such call notice, the Series 2005 Bond or Bonds so called
for redemption will cease to bear interest provided funds sufficient for their redemption have
been deposited with the Trustee, and, except for the purpose of payment, shall no longer be
protected by the Indenture and shall not be deemed to be outstanding under the provisions of the
Indenture.
This Series 2005 Bond may be transferred on the books of registration kept by the
Trustee by the registered owner or by his duly authorized attorney upon surrender hereof,
together with a written instrument of transfer duly executed by the registered owner or his duly
authorized attorney.
The Series 2005 Bonds are issuable as registered bonds without coupons in
denominations of $5,000 and integrals of $5,000 in excess thereof Subject to the limitations and
upon payment of the charges provided in the Indenture, Series 2005 Bonds may be exchanged
for a like aggregate principal amount of Series 2005 Bonds of other authorized denominations.
No recourse shall be had for the payment of the principal of or premium, if any, or
interest on any of the Series 2005 Bonds or for any claim based thereon or upon any obligation,
covenant or agreement contained in the Series 2005 Bonds or the Indenture against any past,
present or future alderman, officer or employee of the City, or any successor, as such, either
directly or through the City or any successor of the City, under any rule of law or equity, statute
or constitution or by the enforcement of any assessment or penalty or otherwise, and all such
liability of any such alderman, officer or employee as such is hereby expressly waived and
released as a condition of and consideration for the issuance of any of the Series 2005 Bonds.
This Series 2005 Bond is issued with the intent that the laws of the State of Arkansas will
govern its construction.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and
things required to exist, happen and be performed precedent to and in the issuance of the Series
2005 Bonds do exist, have happened and have been performed in due time, form and manner as
required by law; that the indebtedness represented by the Series 2005 Bonds, together with all
obligations of the City, does not exceed any constitutional or statutory limitation; and that the
revenues pledged to the payment of the principal of and premium, if any, and interest on the
Series 2005 Bonds as the same become due and payable are expected to be sufficient in amount
for that purpose.
This Series 2005 Bond shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture until the Certificate of Authentication
hereon shall have been signed by the Trustee.
10-70831.5 AA
IN WITNESS WHEREOF, the City of Fayetteville, Arkansas has caused this Series 2005
Bond to be executed by its Mayor and City Clerk, thereunto duly authorized (by their manual or
facsimile signatures), and its corporate seal to be affixed or imprinted hereon, all as of the date
hereof shown above.
CITY OF FAYETTEVILLE, ARKANSAS
By:
Mayor
ATTEST:
By:
City Clerk
(SEAL)
(Form of Trustee's Certificate)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This bond is one of the Series 2005 Bonds of the issue described in and issued under the
provisions of the within mentioned Indenture.
Attached hereto is the complete text of the opinion of Kutak Rock LLP, a signed original
of which is on file with the undersigned, delivered and dated the date of the original delivery of
and payment for the Series 2005 Bonds.
as Trustee
By:
Authorized Signature
10-70831.5 A-5
(Form of Assignment)
ASSIGNMENT
FOR VALUE RECEIVED, , hereby sells, assigns, and
transfers unto , the within bond and all rights thereunder, and
hereby irrevocably constitutes and appoints
as attorney to transfer the within bond on the books kept for registration thereof with full power
of substitution in the premises.
DATE: , 20_.
Transferor
GUARANTEED BY:
NOTICE: Signature(s) must be guaranteed by an institution satisfactory to the Trustee or
other transfer agent.
10-70831.5 A-6
EXHIBIT B TO TRUST INDENTURE
FORM OF REQUISITION
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds, Series 2005
Date:
Requisition No.:
TO: , as Trustee
Pursuant to the provisions of Section 502 of the Trust Indenture dated as of April 15, 2005
(the "Indenture"), by and between the City of Fayetteville, Arkansas (the "Issuer") and you, as
trustee, you are authorized to make the following described payment directly to the Payee named
below from the Project Fund:
Name and Address of Payee:
Amount of Payment: $
General Classification of
the Expenditures:
The undersigned hereby certifies that he is authorized to deliver this Requisition on behalf of
the Issuer.
The amount requested hereunder has not been the basis for any previous Requisition by the
Issuer and is justly due and owing to the person(s) named herein as a proper payment or
reimbursement of a Project Cost (as defined in the Indenture).
10-70831.5 B -I
No Event of Default exists under the Indenture and, to the knowledge of the undersigned,
no event has occurred and continues which with notice or lapse of time or both would constitute
an Event of Default under the Indenture.
CITY OF FAYETTEVILLE, ARKANSAS
By:
Authorized Representative
10-70831.5 B-2
EXHIBIT C TO TRUST INDENTURE
SERIES 2005 BOND ACCRETION SCHEDULE
Accreted Value
Accretion Date (per $5,000 minimum denomination)
I O 70831.5 C-1
City of Fayetteville, Arkansas
Millage Revenue and Predicted TIF Impact
Tax Assessment Growth 1994-2004
Total
Real Property
Total
Real Property
Assessments -
Assessments -
Assessments -
Assessments -
Value
Value
1994
$ 331,415,790
$ 245,093,513
1995
$ 441,868,072
$ 340,593,452
33.33%
38.96%
1996
$ 472,526,567
$ 359,369,202
6.94%
5.51%
1997
$ 502,862,770
$ 382,798,143
6.42%
6.52%
1998
$ 528,576,434
$ 401,001,338
5.11%
4.76%
1999
$ 551,052,914
$ 413,648,415
4.25%
3.15%
2000
$ 578,099,062
$432,951,171
4.91%
4.67%
2001
$ 642,648,401
$ 486,853,822
11.17%
12.45%
2002
$ 699,693,473
$ 530,235,135
8.88%
8.91%
2003
$ 733,485,182
$ 565,846,525
4.83%
6.72%
2004
$ 832,464,522
$649,361,820
13.49%
14.76%
Average Growth %
1994-2004
9.93%
10.64%
Average Growth %
2000-2004
8.65%
9.50%
Median Growth % 1994-2004
6.68%
6.62%
Median Growth %
1996-2004
6.52%
Median Growth % 2000-2004
8.88%
8.91%
Growth Calculated
by Comparing 2001
and 2004
33.38%
Calculated Average 2001-2004
8.34%
City of Fayetteville, Arkansas
Highway 71 East Square Redevelopment District Number I
Table I
lRaB
Highway 71 Easl
Assessments By Year/ Assessment
Total City
Hghway 71 East
Mas
Combined 1W
Square.
District
Square, Original
OrginaI
Districts, Original
Amended -
UoiA
2001 Valuation $
486,853,822
$ 13.577,473
$ 10,281.073
$ 23,858.546
2004 Valuation
$649,361,820
$ 16.616,684
$ 15.083,761
$ 31,700.445
$ 31.446.555
Total Growth Over 4 Years - $ $
162,507,998
$ 3.039.211
44,802,688
$ 7.841.899
Total Growth Over 4 Yews-%
33.38%
22.38%
4671%
32.07%
Average Growth Per Year -%
6.34%
5.60%
11.68%
8.22%
Median Overall City Growth 1996-2004
6.52%
Median Overae City Growth 2000-2004
8.91%
Distribution of TIF Millages as
Certified by Washington County
Assessor
"otal
Millage Rates -
Millage
Millage Rates
Fayenevine
evilDiste
Millage - By Taxing Unit - 2004
Excluded
Available for
TIF District
2004
School ict
From TIF
TIF
Fayetteville School District - M & O
25.00
25.00
0.00
Fayetteville School District - Debt Service
19.20
19.20
0.00
County General Operations
4.75
4.75
County Road Millage
1.11
1.11
City Library
1.00
1.00
City Fire Pension
0.40
0.40
City Police Pension
0.40
0.40
Total Millage
51.86
44.20
7.66
3.16 4.50
Cily d FayettevAe, Aekansas
Highway71 East Spuare Redevelopment District Number 1
1
2 3.5
With TIP
(FebnMry 2005U
Table 2- With Mountain Inn and
Associated Developments
A
o1 Sh
Total Wage Revenue Genemled
Highway T1 -Table
I
Predicicd Futuna Values
Assessed Value
1 MB
2 Mil
35 Mil
2005
1 34,171,226
$
34.800
$
69,500
$
121,700
2006
$ 41,838,959
S
41,800
$
83,700
1
146.400
2007
$ 57.087.778
$
57,100
$
114,200
$
199,800
2008
$ 67.417,730
$
67,400
S
134,800
$
236,000
2009
$ 77.210,055
$
77200
S
154,400
S
270200
2010
$ 85,725.636
$
85,700
$
171,500
$
300,000
2011
S 95.239,758
$
95,200
$
190,500
$
333,300
2012
$ 105.877.030
$
105,900
$
211,800
$
370,600
2013
1 117.778.577
$
117,800
$
235,600
$
412200
2014
$ 131,104,342
$
131,100
$
262200
$
458,900
2015
$ 146,035,736
$
146,000
$
292,100
$
511,100
2016
$ 162,778.660
$
162,800
S
325.600
$
569.700
2017
$ 181,566,986
S
181,600
$
363,100
$
635,500
2018
$ 202.666.540
$
202700
1
405,300
$
709.300 ..
2019
$ 226,379,677
$
226,400
1
452.800
$
792.300
2020
$ 253,050,540
$
253,100
1
506,100
$
685.700
2021
$ 283,071,091
$
283,100
$
566,100
1
990,700
2022
$ 316,888,056
$
316,900
$
633.800
$
1.109.100
2023
$ 355.010,900
$
355,000
$
710.000
$
1,242,500
2024
1 398.021.007
$
398,000
$
796,000
$
t,393,100
2025
$ 446,582.239
1
446,600
S
893,200
$
1,563.000
2026
$ 501453.093
$
501.500
$
1,002900
$
1,755,100
2027
S 563,500,698
$
563,500
$
1,127,000
$
1,972.300
2028
$ 633,716,942
$
633.700
$
1267,400
$
2,218,000
2029
$ 713.237,040
$
713,200
$
1,426,500
S
2,496,300
;:i
City of Fayetteville. Mantras
Highway 71 Easl Square Redevelopment District Number I
With TIF
Table 3- With Mountain Inn and
(February 2005U
Associated Developments
of A dy-
Highwayway 71-
1
Millage Revenue
Based on I Mil
Predicted Future Values
Assessed Value
2005
$ 34.771 226
$
34,771
2006
$ 41.838.959
$
41.839
2007
$ 57,087,778
$
57.088
2008
$ 67.417.730
$
67,418
2009
$ 77,210,055
$
77,210
2010
$ 85.725.636
$
85,726
2011
$ 95,239,758
$
95.240
2012
$ 105,877,030
S
105,877
2013
$ 117778,577
$
117.779
2014
$ 131,104,342
$
131.104
2015
$ 146,035.736
$
146.036
2016
$ 162,778.660
S
162779
2017
S 181,566.986
$
181,567
2018
$ 202,666,540
$
202,667
2019
$ 226.379,677
$
226,380
2020
S 253,050,540
$
253,051
2021
$ 283,071,091
$
283.071
2022
$ 316,888,056
$
316,888
2023
$ 355.010.900
$
355,011
2024
$ 398,021,007
$
398.021
2025
$ 446,582239
$
446,582
2026
$ 501,453,093
$
501,453
2027
$ 563,500.698
$
563,501
2028
S 633.716,942
$
633.717
2029
$ 713,237.048
$
713,237
3.16 4.50
41.25% 58.75%
Distribution
Based on I MU
Frozen
Increment Millage
Millage
Library
Total Increment
TIF
Fayetteville
School D'a9ct
31.447
$
3.325
5
1,371
$
1,,953
31.4 47
$
10.392
$
4,287
$
6,106
31,447
$
25.641
$
10,577
S
15.064
31,447
$
35.971
$
14,838
S
21.133
31.447
$
45.764
$
18,877
$
26,686
31647
$
51.279
$
22,390
S
31,889
31447
$
63,793
$
26,315
$
37.479
31,447
S
74630
$
30,703
$
43.728
31.447
$
86.332
$
35.612
$
50.720
31647
$
99,656
$
41,109
$
58,549
31,447
$
114,589
$
47,268
$
67,321
31,447
S
131.332
S
54.174
$
77,158
31,447
$
150,120
$
61.925
$
88,196
31,447
5
171.220
$
70.628
$
100,592
31,447
$
194.933
$
80,410
S
114,523
31,447
$
221,604
$
91,412
$
130,192
31,447
$
251,625
$
103.795
$
147.829
31,447
$
285,442
$
117745
$
167,697
31,447
$
323.564
$
133,470
$
190.094
31.447
$
366.574
$
151.212
$
215,362
31,447
S
415,136
$
171,243
$
243.892
31,447
$
470,007
$
193.878
$
276,129
31.447
$
532054
$
219,472
$
312,682
31,447
$
602,270
$
248.437
$
353,834
31,447
$
681.790
$
281,239
$
400.552
City at Fayeltevile, Arkansas
HgMvay 71 East Square Redevelopment District Numbe, I
With TIF
(Febua y 2005 U
Less:
Developments
Table 4. Without Mountain Inn and
of A Study -
Linked to Mountain
Adjusted Table
Associated Developments
Higway 71- Table
Inn-
Cunwblive
Millage Revenue Generated
Revised
Predicted Future Values
Assessed Value
7.80%
Assessed Value
1 M4
2 Md
3,5 Mt
2005
$
34.771,226
$
$
34,771.226
$
34.800
$
69,500
$
121,700
2006
$
41638.959
$
-
S
41,838,959
$
41.800
$
83.700
$
146,400
2007
$
57.087,778
$
5,700.000
S
51.387.778
S
51.400
S
102.800
$
179.900
2008
$
67.417.730
3
6,974,600
$
60.443.130
$
60.400
$
120.900
$
211,600
2009
$
77,210,055
$
7,518,619
S
69,691.436
S
69,700
$
139.400
S
243,900
2010
$
85.725.636
S
8.105.071
$
77,620,565
$
77.600
$
155,200
$
271,700
2011
$
95,239.758
S
8.737.267
S
86.502.491
S
86.500
$
173,000
$
302.800
2012
S
105.577.030
S
9.418.773
$
96.458.257
$
96.500
$
192,900
$
337,600
2013
S
117.778,577
S
10,151438
S
107.625.139
$
107.600
S
215,300
$
376,700
2014
E
131.104.312
S
10,945.406
E
120.158,936
$
120.200
$
240,300
$
420,600
2015
S
146.035.736
$
11,799.148
$
134.236,588
$
134,200
$
268,500
S
469,800
2016
$
162,778,660
$
12,719,481
$
150.059,179
$
150,100
$
300.100
$
525,200
2017
$
181.566,986
$
13,711,601
$
167.855,385
S
167,900
$
335.700
$
587.500
2018
$
202.666.540
$
14.781.105
S
187.885,435
$
187.900
$
375,800
$
657,600
2019
S
226.379.677
$
15.934,032
$
210,445,645
$
210,400
$
420,900
$
736.600
2020
$
253.0`0.540
$
17,176,886
S
235,873.651
$
235,900
$
471,700
$
825,600
2021
$
283,071.091
$
18,516.683
$
264.554,408
S
264,600
$
529,100
S
925,900
2022
$
316,888,056
$
19,960,984
$
296.927.072
$
296,900
$
593,900
$
1,039,200
2023
$
355,010,900
$
21,517,941
S
333.492.959
$
333,500
$
667,000
$
1,167,200
2024
$
398,021,007
$
23,196,341
$
374,824.666
$
374,800
$
749,600
$
1.311,900
2025
$
446,582,239
$
25,005,655
$
421,576,584
$
421,600
S
843.200
$
1.475,500
2026
$
501.451093
$
26,956,096
$
474,496,997
$
474,500
$
949.000
$
1.660.700
2027
$
563,500,698
S
29,058,672
$
534,442,026
$
534,400
S
1,068.900
$
1,870.500
2028
$
633,716,942
$
31,325,248
S
602.391,694
S
602.400
$
1,204,800
$
2,108,400
2029
$
713,237,048
$
31,325,248
$
681.911,800
$
681,900
$
1.361800
$
2,386,700
00 C c
o,m c c a
N N N N N N MM N N N N N N N N N N N W S n
O. O O O O O O O O O O O O O O O O O O O O O O O O O
O_ N N N N N N N N N N>>>>>>>!>> O O O O O
1m mCD V O01A W N>OOCO V m W A W N> OO W V W Ut
Tg. 69www(nenw w w wwwwwwwwwwwwwww
5 D 6 I_-'
- 0
R 2•41 V W 01 N A W W W N N N N>>>>!! C O
C > W a O a 001 >OD NN OO a a W> 00 OD V 001 a W 3 D 0
g. G co W (.1 >a OD N a W Co OI N> N m> V 0 0 (1 V V V> A» y m
G N V (n ANOOOO O W 0)01 V O> V ODN V NAOO V '� O•
W W> 0 01 CO N> W' (Si V 0) 0) V W O V V W N>> W W V 7 c
--.1 0)0 W N>OCD>O(00)0)OD (n(0 V (0 V10 -1-40>7 d
o O O V W O V V 0 N c
r 3 A A O 0 W O O (n O A V A W 0 W A V W w W N W V 01 N m)
m W N W W O V O O! O V O O) O W N V O W O) N O W N W
i a
ww w w w to wwwwwfAwwwwwwwwwwww
K 41 V O) (T O A W W W N N N N»»» ) m
> W O O A O 01 > aD 01 N O w W A W> O (O Q7 V a) N A w D7 0 m (D_
W W 00W11 ! O) N 01 M W w w 0)! N b> V OD 01 01 V �1 V> A 3
3 W H O (AII OND N� OWD W W O W J W O V A N -N+ -a O OD W v 0 c (c
V V> CON) aD >> O V V m W A O V O O O W W f0 > 7 0 1D
0)
» w w w w w w w w w w w w w a w w w w w w w w w w w 3
wwwwwwwwwwwwwwwwwwwwwwwww3
CD > J A>A J > ! -s_S J A>A AJA > ! > > J A>A A> > > A > > l J > 0 O
O A A A A A A A A A A A A A A A A A A A A A A A A A 0 0
V V V V V V V V V V V V V V V V V V V V V V V V V 3
v
w w w w w w w w w w w w w w wen w w w w w w w w w w 7 m
vt 0
p O O) w A A M 0 O
O OD O W V cn O) N O N N O V 01 W+ 1D Om V W A W N
P �NNO01 W W VI��A->•O-A(DO)A W A(T0)(TO W 3_ 3 a
IT JN 00 0)qp1 CON+W N W IJ-4w a) (9 W w �0)
> O O A 0OWA I
) (n A8A W O O N m-4 N 0 V W (VO W ?� N A j
N N
N www wwwww wwwwfAwfAa(nwwwwwwww p 0c
N N>>» J! V A N n Q
j O
N O> V Ut 0) O A O D7 OD O O W O) > 0t > V W O V W ((pp A N 01 D) M= r
0)w N 01 W wN co 0(n N(O N(O> 0DNO W OO(n (D 0)> a m d
O W O N 0OD W -J W O A V N W CO N N 00) N v W A W 0) 0 W (D O c `o N
3 O O N 0) OD A O) W N V O W A 01 V1 01 N 0 0 0 01 N V 0) (D m •z
3 wwwen<n(nv>wvienw<O6969(n(nv�w<nenwtn(n(nw 3 w
J > > J > > > > > > > J J > > ! > ! J ! J > > > ! 3 d a
0000000000000000000000000 — 0 A l
___
0000000000000000000000000 W 7CD
D)0IO W W O OOTa) W O O DO) W W 0)O)4)m 0)Om N w
01N 01 Ut UtN010101NUt01NN01N W 010)N010101(na
w w w w w w w w w w w w w w w w w w w w eA w w w w w
nA
O N N a (� N W n
N 0WDO W ON OND W m 00D V O(ONNO W 000)N00)Mw W+ "a O
(O O) V NtnN W N(0001N(D(ntO�ODNO W (0001 (O W 3 3 5i
J NWaOWOAoO p0) Op14 W A W OGD �(n IJ10�OD VW C) (p O
(0D
N
Ut
C)
0
O
C)_
A
0
O
3
vt
3
N
Combined Mountain Inn & Downtown Master Plan District
Based on 3.16 Mils / UofA Projected Assessment Growth Rate
(18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
otal Available Increment..................................................................................
5,319,284,550
otal Available Yield........................................................................................
16,808,939
let Present Value of Available Yield
.....................................................................
9,723,926
axRate......................................................................................................
0.316°/
resentValue Rate...........................................................................................
3.00°/
2005 ' \
2006
2007
2008
2009
eai
rozen Assessment ..
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
'otalAssessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
,ssessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43°/
tcrement
3,599,830
10,672,190
25,940,236
36,292,813
46,067,604
,vailable Yield
11,375
33,724
81,971
114,685
145,574
V of Available Yield
11,044
31,788
75,015
101,896
125,573
d.' •' LiT1: ' _
?010
2011
.2012
2013
ZO14
zen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
a] Assessment
85,994,207
95,453,570
106,010,735
117,809,730
130,992,639
essment Growth Rate
10.94%
11.00%
11.06%
11.13%
11.19°/
"ement
54,547,652
64,007,015
74,564,180
86,363,175
99,546,084
tilableYield
172,371
202,262
235,623
272,908
314,566
of Available Yield
144,358
164,458
186,003
209,161
234,066
arm e_
-' 5
2016
2017 2018
2019 k'
,
)zen Assessment
_ __ ..
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
tal Assessment
145,742,410
162,240,451
180,719,638
201,430,109
224,655,000
sessment Growth Rate
11.26%
11.32%
11.39%
11.46%
11.53°/
rement
114,295,855
130,793,896
149,273,083
169,983,554
193,208,445
ailable Yield
361,175
413,309
471,703
537,148
610,539
of Available Yield
260,920
289,886
321,207
355,118
391,882
T 3
2021 2022.\".f
2023..
2024 is
rzen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
talAssessment
250,714,980
279,973,418
312,842,298
349,788,973
391,378,882
sessment Growth Rate
11.60%
11.67%
11.74%
11.81%
11.89°/
:rement
219,268,425
248,526,863
281,395,743
318,342,418
359,932,327
ailableYield
692,888
785,345
889,211
1,005,962
1,137,386
of Available Yield
431,785
475,147
522,317
573,686
629,743
ar _\
2025A ;
2027
2028
2029
-
L.)zen Assessment
31,446,555
__-2026
31,446,555
31,446,555
31,446,555
31,446,555
tal Assessment
438,187,796
490,901,788
550,349,995
617,382,624
693,073,734
sessment Growth Rate
11.96%
12.03%
12.11%
12.18%
12.26°
rement
406,741,241
459,455,233
518,903,440
585,936,069
661,627,179
ailable Yield
1,285,302
1,451,879
1,639,735
1,851,558
2,090,742
' of Available Yield
690,913
757,725
830,840
910.844
998.550
Mountain Inn / Dickson Street Redevelopment District
Based on UofA Projected Revenues
Par Amount of Bonds.............................................................................................. 3,725,000.00
InterestRate........................................................................................................ 6.50%
Accrued Total Principal Excess Cash
Date Revenue Bonds Called Interest & Interest Balance
4/19/2005
-
-
-
-
-
2/1/2006
131,375.46
120,000.00
6,181.92
126,181.92
5,193.54
2/1/2007
33,724.12
30,000.00
3,629.28
33,629.28
5,288.38
2/1/2008
81,971.14
70,000.00
13,651.54
83,651.54
3,607.99
2/1/2009
114,685.29
90,000.00
24,656.58
114,656.58
3,636.70
2/1/2010
145,573.63
105,000.00
37,601.97
142,601.97
6,608.36
2/1/2011
172,370.58
120,000.00
53,739.12
173,739.12
5,239.82
2/1/2012
202,262.17
130,000.00
70,650.32
200,650.32
6,851.67
2/1/2013
235,622.81
145,000.00
93,585.90
238,585.90
3,888.58
2/12014
272,907.63
155,000.00
116,887.05
271,887.05
4,909.16
2/1/2015
314,565.62
170,000.00
147,896.60
317,896.60
1,578.18
2/12016
361,174.90
180,000.00
178,830.72
358,830.72
3,922.36
2/1/2017
413,308.71
195,000.00
219,411.27
414,411.27
2,819.81
2/1/2018
471,702.94
205,000.00
259,441.44
464,441.44
10,081.31
2/1/2019
537,148.03
225,000.00
318,425.40
543,425.40
3,803.94
2/12020
610,538.69
235,000.00
370,069.54
605,069.54
9,273.08
2/12021
692,888.22
255,000.00
444,935.22
699,935.22
2,226.09
2/1/2022
785,344.89
265,000.00
510,431.87
775,431.87
12,139.11
2/1/2023
889,210.55
285,000.00
604,042.68
889,042.68
12,306.97
2/12024
1,005,962.04
305,000.00
709,279.33
1,014,279.33
3,989.68
2/12025
1,137,386.15
320,000.00
814,456.96
1,134,456.96
6,918.88
2/1/2026
1,285,302.32
120,000.00
333,522.96
453,522.96
838,698.24
211/2027
1,451,878.54
-
-
-
2,290,576.78
2/12028
1,639,734.87
-
-
-
3,930,311.64
2/1/2029
1,851,557.98
-
-
-
5,781,869.62
8/1/2029
-
-
-
-
5,781,869.62
Total
14,838,19729
3,725,000.00
5,331,327.67
9,056,327.67
Combined Mountain Inn & Downtown Master Plan District
Based on 3.16 Mils /2000-2004 Median Growth Rate of 8.91%
(18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
t1 Available Increment................................................................................ 3,769,234,181
d Available Yield...................................................................................... 11,910,780
Present Value of Available Yield................................................................... 7,060,627
Rate.................................................................................................... 0.32%
;ent Value Rate......................................................................................... 3.00%
ear =
,T2005
2006
2007
2008
2009
ozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
ssessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
icrement
3,599,830
10,672,190
25,940,236
36,292,813
46,067,604
vailable Yield
11,375
33,724
81,971
114,685
145,574
V ofAvailable Yield
11,044
31,788
75,015
101,896
125,573
012 0
' 0 I Y
_ 2012
T 2013
2014
sen Assessment
_'
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
sl Assessment
84,420,670
91,942,552
100,134,633
109,056,629
118,773,575
essment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
ement
52,974,115
60,495,997
68,688,078
77,610,074
87,327,020
�ilable Yield
167,398
191,167
217,054
245,248
275,953
of Available Yield
140,193
155,437
171,345
187,962
205,335
li_�. {.aY,'� ?Fx.:�'`` °d'r��r•r:.:`L--„U�1
L(L10
p•�LUI/
oLU18...
2019 '�•.
zenAssessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
al Assessment
129,356,300
140,881,946
153,434,528
167,105,544
181,994,648
essment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
-ement
97,909,745
109,435,391
121,987,973
135,658,989
150,548,093
tilable Yield
309,395
345,816
385,482
428,682
475,732
of Available Yield
223,513
242,548
262,494
283,410
305,354
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
198,210,371
215,870,916
235,105,014
256,052,871
278,867,182
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
166,763,816
184,424,361
203,658,459
224,606,316
247,420,627
Available Yield
526,974
582,781
643,561
709,756
781,849
PV of Available Yield
328,393
352,592
378,024
404,764
432,891
ear"_ .'. ;r
t '202
2076,
2027'
2028
2029 .
_
Frozen Assessment
31„446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
303,714,248
330,775,187
360,247,256
392,345,287
427,303,252
Assessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
Increment
272,267,693
299,328,632
328,800,701
360,898,732
395,856,697
Available Yield
860,366
945,878
1,039,010
1,140,440
1,250,907
PV of Available Yield
462,489
493,647
526,458
561,021
597,440
Mountain Inn / Dickson Street Redevelopment District
Based on 2000-2004 Median Growth Rate of 8.91%
ParAmount of Bonds.............................................................................................. 3,725,000.00
InterestRate........................................................................................................ 6.50%
Accrued
Total Principal
Excess Cash
Date
Revenue
Bonds Called
Interest
& Interest
Balance
4/19/2005
-
-
-
-
-
2/1/2006
131,375.46
120,000.00
6,181.92
126,181.92
5,193.54
2/1/2007
33,724.12
30,000.00
3,629.28
33,629.28
5,288.38
2/1/2008
81,971.14
70,000.00
13,651.54
83,651.54
3,607.99
2/1/2009
114,685.29
90,000.00
24,656.58
114,656.58
3,636.70
2/1/2010
145,573.63
105,000.00
37,601.97
142,601.97
6,608.36
2/1/2011
167,398.20
120,000.00
53,739.12
173,739.12
267.44
2/1/2012
191,167.35
120,000.00
65,215.68
185215.68
6,219.11
2/1/2013
217,054.33
135,000.00
87,131.70
222,131.70
1,14114
2/1/2014
245,247.83
140,000.00
105,575.40
245,575.40
814.17
2/1/2015
275,953.38
145,000.00
126,147.10
271,147.10
5,620.45
2/1/2016
309,394.79
155,000.00
153,993.12
308,993.12
6,022.13
2/1/2017
345,815.84
165,000.00
185,655.69
350,655.69
1,182.27
2/1/2018
385,481.99
170,000.00
215,146.56
385,146.56
1,517.71
2/1/2019
428,682.41
175,000.00
247,664.20
422,664.20
7,535.91
2/1/2020
475,731.97
185,000.00
291,331.34
476,331.34
6,936.55
2/1/2021
526,973.66
190,000.00
331,520.36
521,520.36
12,389.85
2/1/2022
582,780.98
200,000.00
385,231.60
585,231.60
9,939.23
2/1/2023
643,560.73
205,000.00
434,486.84
639,486.84
14,013.12
2/1/2024
709,755.96
215,000.00
499,983.79
714,983.79
8,785.29
2/1/2025
781,849.18
220,000.00
559,939.16
779,939.16
10,695.31
2/1/2026
860,365.91
230,000.00
639,252.34
869,252.34
1,808.88
2/1/2027
945,878.48
235,000.00
711,816.88
946,816.88
870.47
2/1/2028
1,039,010.22
240,000.00
790,836.00
1,030,836.00
9,044.69
2/1/2029
1,140,439.99
65,000.00
232,626.68
297,626.68
851,858.00
N IILVGp
Total 10,779,872.85 3,725,000.00 6,203,014.85 9,928,014.85
Combined Mountain Inn & Downtown Master Plan District
Based on 3.16 Mils /1996-2004 Median Growth Rate of 6.52%
(18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
LI Available Increment................................................................................ 2,706,328,967
LIAvailable Yield...................................................................................... 8,552,000
Present Value of Available Yield................................................................... 5,197,368
Rate....................................................................................................
entValue Rate......................................................................................... 3.00%
Year"
" =200 ;;
200b,
2007
200 _^i'
009
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
Assessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
Increment
3,599,830
10,672,190
25,940,236
36,292,813
46,067,604
Available Yield
11,375
33,724
81,971
114,685
145,574
PV of Available Yield
11,044
31,788
75,015
101,896
125,573
2013
2014 �,
zen Assessment
31,446,555
31,446,555
31,446,555
_
31,446,555
31,446,555
al Assessment
82,568,082
87,951,521
93,685,960
99,794,284
106,300,872
essment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
ement
51,121,527
56,504,966
62,239,405
68,347,729
74,854,317
�ilable Yield
161,544
178,556
196,677
215,979
236,540
of Available Yield
135,291
145,182
155,258
165,530
176,008
!-t,
ear�ty �uj,•.,A<201S}'~,2017
. T ! ..
2018,:.
TT
2019'r`a
rozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
113,231,689
120,614,395
128,478,453
136,855,248
145,778,210
ssessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
icrement
81,785,134
89,167,840
97,031,898
105,408,693
114,331,655
vailable Yield
258,441
281,770
306,621
333,091
361,288
V of Available Yield
186,703
197,628
208,794
220,213
231,897
rozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
155,282,950
165,407,398
176,191,960
187,679,676
199,916,391
ssessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
icrement
123,836,395
133,960,843
144,745,405
156,233,121
168,469,836
vailable Yield
391,323
423,316
457,395
493,697
532,365
V of Available Yield
243,860
256,113
268,672
281,548
294,757
Y,eai y9 "x '� 2025
2027
2028
2029'
.
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
212,950,940
226,835,341
241,625,005
257,378,956
274,160,064
Assessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
Increment
181,504,385
195,388,786
210,178,450
225,932,401
242,713,509
Available Yield
573,554
617,429
664,164
713,946
766,975
PV of Available Yield
308,313
322,231
336,526
351,214
366,311
Mountain Inn / Dickson Street Redevelopment District
Based on 1996-2004 Median Growth Rate of 6.52%
Par Amount of Bonds.............................................................................................. 3,725,000.00
InterestRate........................................................................................................ 6.50%
Accrued Total Principal Excess Cash
Date Revenue Bonds Called Interest & Interest Balance
4/19/2005
-
-
-
-
-
2/1/2006
131,375.46
120,000.00
6,181.92
126,181.92
5,193.54
2/1/2007
33,724.12
30,000.00
3,629.28
33,629.28
5,288.38
2/1/2008
81,971.14
70,000.00
13,651.54
83,651.54
3,607.99
2/1/2009
114,685.29
90,000.00
24,656.58
114,656.58
3,636.70
2/1/2010
145,573.63
105,000.00
37,601.97
142,601.97
6,608.36
2/1/2011
161,544.02
115,000.00
51,499.99
166,49999
1,652.39
2/1/2012
178,555.69
115,000.00
62,498.36
177,498.36
2,709.72
2/1/2013
196,676.52
120,000.00
77,450.40
197,450.40
1,935.84
2/1/2014
215,978.82
120,000.00
90,493.20
210,493.20
7,421.46
2/1/2015
236,539.64
130,000.00
113,097.40
243,097.40
863.71
2/1/2016
258,441.02
130,000.00
129,155.52
259,155.52
149.21
2/1/2017
281,770.37
130,000.00
146,274.18
276,274.18
5,645.40
2/1/2018
306,620.80
135,000.00
170,851.68
305,851.68
6,414.52
2/1/2019
333,091.47
140,000.00
198,131.36
338,131.36
1,374.63
2/1/2020
361,288.03
140,000.00
220,466.96
360,466.96
2,195.70
2/1/2021
391,323.01
140,000.00
244,278.16
384,278.16
9,240.55
2/1/2022
423,316.26
145,000.00
279,292.91
424,292.91
8,263.90
2/1/2023
457,395.48
145,000.00
307,319.96
452,319.96
13,339.42
2/1/2024
493,696.66
150,000.00
348,825.90
498,825.90
8,210.19
2/1/2025
532,364.68
150,000.00
381,776.70
531,776.70
8,798.17
2/1/2026
573,553.86
150,000.00
416,903.70
566,903.70
15,448.33
2/1/2027
617,428.56
155,000.00
469,496.24
624,496.24
8,380.65
2/1/2028
664,163.90
155,000.00
510,748.25
665,748.25
6,796.30
2/1/2029
713,946.39
155,000.00
554,725.16
709,725.16
11,017.53
8/1/2029
-
690,000.00
2,572,101.96
3,262,101.96
(3,251,084.43)
Total
7,905,024.85
3,725,000.00
7,431,109.28
11,156,10928
Combined Mountain Inn & Downtown Master Plan District
Based on £16 Mils / UofA Projected Assessment Growth Rate
(18 Projects Planned Over Next 5 Years / $128 Million Appraised Value)
d Available Increment................................................................................ 5,319,284,550
d Available Yield...................................................................................... 27,447,508
Present Value of Available Yield................................................................... 15,878,309
Rate .............................. . . .................................................................... 0.516%
entValue Rate......................................................................................... 3.00%
ear. wry, t_w r .,
2005'
2006
2007
2008
2009
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
Assessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
Increment
3,599,830
10,672,190
25,940,236
36,292,813
46,067,604
Available Yield
18,575
55,069
133,852
187,271
237,709
PV of Available Yield
18,034
51,907
122,493
166,388
205,050
2010 ;r
2011
`. 2012'
2013.
2014
zen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
al Assessment
85,994,207
95,453,570
106,010,735
117,809,730
130,992,639
essment Growth Rate
10.94%
11.00%
11.06%
11.13%
11.19%
ement
54,547,652
64,007,015
74,564,180
86,363,175
99,546,084
Lilable Yield
281,466
330,276
384,751
445,634
513,658
of Available Yield
235,723
268,545
303,726
341,541
382,210
Yeairn- '`
2015 ' ;
-2016
x2017
2018
2019
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
_'
31,446,555
Total Assessment
145,742,410
162,240,451
180,719,638
201,430,109
224,655,000
Assessment Growth Rate
11.26%
11.32%
11.39%
11.46%
11.53%
Increment
114,295,855
130,793,896
149,273,083
169,983,554
193,208,445
Available Yield
589,767
674,897
770,249
877,115
996,956
PV of Available Yield
426,060
473,359
524,502
579,876
639,908
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
250,714,980
279,973,418
312,842,298
349,788,973
391,378,882
Assessment Growth Rate
11.60%
11.67%
11.74%
11.81%
11.89%
Increment
219,268,425
248,526,863
281,395,743
318,342,418
359,932,327
Available Yield
1,131,425
1,282,399
1,452,002
1,642,647
1,857,251
PV of Available Yield
705,067
775,872
852,898
936,779
1,028,315
2025
2026
2027
2028.
2029
zen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
al Assessment
438,187,796
490,901,788
550,349,995
617,382,624
693,073,734
essment Growth Rate
11.96%
12.03%
12.11%
12.18%
12.26%
'ement
406,741,241
459,455,233
518,903,440
585,936,069
661,627,179
iilable Yield
2,098,785
2,370,789
2,677,542
3,023,430
3,413,996
of Available Yield
1,128,200
1,237,297
1,356,688
1,487,327
1,630,544
Mountain Inn / Dickson Street Redevelopment District
Based on UofA Projected Revenues at 5.16 Mils
Par Amount of Bonds.............................................................................................. 3,725,000.00
InterestRate ........................ ................................................................................ 6.50%
Accrued
Total Principal
Excess Cash
Date
Revenue
Bonds Called
Interest
& Interest
Balance
4/19/2005
-
-
-
-
-
2/1/2006
138,575.12
130,000.00
6,697.08
136,697.08
1,878.04
2/1/2007
55,068.50
50,000.00
6,048.80
56,048.80
897.75
2/1/2008
133,851.62
110,000.00
21,452.42
131,452.42
3,296.94
2/1/2009
187,270.91
145,000.00
39,724.49
184,724.49
5,843.37
2/1/2010
237,708.83
175,000.00
62,669.95
237,669.95
5,882.25
2/1/2011
281,465.89
195,000.00
87,326.07
282,326.07
5,022.07
2/1/2012
330,276.20
215,000.00
116,844.76
331,844.76
3,453.51
2/1/2013
384,751.17
235,000.00
151,673.70
386,673.70
1,530.98
2/1/2014
445,633.98
250,000.00
188,527.50
438,527.50
8,637.46
2/1/2015
513,657.79
275,000.00
239,244.50
514,244.50
8,050.75
2/1/2016
589,766.61
295,000.00
293,083.68
588,083.68
9,733.68
2/1/2017
674,896.50
320,000.00
360,059.52
680,059.52
4,570.67
2/1/2018
770,249.11
340,000.00
430,293.12
770,293.12
4,526.65
2/1/2019
877,115.14
365,000.00
516,556.76
881,556.76
85.03
2/1/2020
996,955.58
385,000.00
606,284.14
991,284.14
5,756.47
2/1/2021
1,131,425.07
240,000.00
418,762.56
658,762.56
478,418.98
2/1/2022
1,282,398.61
-
-
-
1,760,817.60
2/1/2023
1,452,002.03
-
-
-
3,212,819.63
2/1/2024
1,642,646.88
-
-
-
4,855,466.51
2/1/2025
1,857,250.81
-
-
-
6,712,717.31
2/1/2026
2,098,784.80
-
-
-
8,811,502.12
2/1/2027
2,370,789.00
-
-
-
11,182,291.12
2/1/2028
2,677,541.75
-
-
-
13,859,832.87
2/1/2029
3,023,430.12
-
-
-
16,883,262.98
8/1/2029
-
-
-
-
16,883,262.98
Total
24,153,512.03
3,725,000.00
3,545,249.05
7,270,249.05
Combined Mountain Inn & Downtown Master Plan District
Based on 5.16 Mils /2000-2004 Median Growth Rate oft 91 %
(18 Projects Planned Over Next 5 Years /$128 Million Appraised Value)
d Available Increment................................................................................ 3,769,234,181
it Available Yield...................................................................................... 19,449,248
Present Value of Available Yield................................................................... 11,529,379
Rate.................................................................................................... 0.516%
entValue Rate......................................................................................... 3.00%
rear ->
2005= ;„-g................
2006
..2007
2008
2009
rozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
.ssessment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
icrement
3,599,830
10,672,190
25,940,236
36,292,813
46,067,604
.vailable Yield
18,575
55,069
133,852
187,271
237,709
V of Available Yield
18,034
51,907
122,493
166,388
205,050
9 .•eaaz�,. r' �' "a •y am*
02 0 h
20.:1 4 ,,2012
2013
2014 �T
rozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
84,420,670
91,942,552
100,134,633
109,056,629
118,773,575
.ssessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
icrement
52,974,115
60,495,997
68,688,078
77,610,074
87,327,020
.vailable Yield
273,346
312,159
354,430
400,468
450,607
V of Available Yield
228,923
253,814
279,791
306,925
335,294
<,. --..,,
ear ;R ,,a . ,, -201v5, ;;E
F r —
« x2017
-
2018
-
2019
rozen Assessment
�..
31,446,555
.=:=20;16:1 _
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
129,356,300
140,881,946
153,434,528
167,105,544
181,994,648
.ssessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
icrement
97,909,745
109,435,391
121,987,973
135,658,989
150,548,093
.vailable Yield
505,214
564,687
629,458
700,000
776,828
V of Available Yield
364,978
396,060
428,630
462,783
498,616
ear*<
iM 1 i .N4t4L4b a .+Y.£Y K...yrZFv
n2 0 r' 2027 9 2022 f
2023
S
2O24%r
rozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
otal Assessment
198,210,371
215,870,916
235,105,014
256,052,871
278,867,182
.ssessment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
icrement
166,763,816
184,424,361
203,658,459
224,606,316
247,420,627
.vailable Yield
860,501
951,630
1,050,878
1,158,969
1,276,690
V of Available Yield
536,236
575,752
617,280
660,944
706,873
2025
202&--,-
2027
2028;'
2029
zen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
al Assessment
303,714,248
330,775,187
360,247,256
392,345,287
427,303,252
essment Growth Rate
8.91%
8.91%
8.91%
8.91%
8.91%
'ement
272,267,693
299,328,632
328,800,701
360,898,732
395,856,697
tilable Yield
1,404,901
1,544,536
1,696,612
1,862,237
2,042,621
of Available Yield
755,204
806,082
859,659
916,097
975,567
E
Mountain Inn / Dickson Street Redevelopment District
Based on 2000-2004 Median Growth Rate of 8.91@ at 5.16 Mils
Par Amount of Bonds.............................................................................................. 3,725,000.00
InterestRate........................................................................................................ 6.50%
Accrued
Total Principal
Excess Cash
Date
Revenue
Bonds Called
Interest
& Interest
Balance
4/19/2005
-
-
-
-
-
2/1/2006
138,575.12
130,000.00
6,697.08
136,697.08
1,878.04
2/1/2007
55,068.50
50,000.00
6,048.80
56,048.80
897.75
2/1/2008
133,851.62
110,000.00
21,452.42
131,452.42
3,296.94
2/1/2009
187,270.91
145,000.00
39,724.49
184,724.49
5,843.37
2/1/2010
237,708.83
175,000.00
62,669.95
237,669.95
5,882.25
2/1/2011
273,346.43
190,000.00
85,086.94
275,086.94
4,141.74
2/1/2012
312,159.34
200,000.00
108,692.80
308,692.80
7,608.29
2/1/2013
354,430.48
220,000.00
141,992.40
361,992.40
46.37
2/1/2014
400,467.98
225,000.00
169,674.75
394,674.75
5,839.60
2/1/2015
450,607.42
240,000.00
208,795.20
448,795.20
7,651.82
2/1/2016
505,214.28
255,000.00
253,343.52
508,343.52
4,522.59
2/1/2017
564,686.62
265,000.00
298,174.29
563,174.29
6,034.92
2/1/2018
629,457.94
280,000.00
354,359.04
634,359.04
1,133.82
2/1/2019
700,000.38
285,000.00
403,338.84
688,338.84
12,795.36
2/1/2020
776,828.16
305,000.00
480,303.02
785,303.02
4,320.50
2/1/2021
860,501.29
315,000.00
549,625.86
864,625.86
195.94
2/1/2022
951,629.70
325,000.00
626,001.35
951,001.35
824.29
2/1/2023
1,050,877.65
10,000.00
21,194.48
31,194.48
1,020,507.46
2/1/2024
1,158,968.59
-
-
-
2,179,476.05
2/1/2025
1,276,690.43
-
-
-
3,456,166.48
2/1/2026
1,404,901.29
-
-
-
4,861,067.77
2/1/2027
1,544,535.74
-
-
-
6,405,603.52
2/1/2028
1,696,611.62
-
-
-
8,102,215.13
2/1/2029
1,862,237.46
-
-
-
9,964,452.59
8/1/2029
-
-
-
-
9,964,452.59
Total
17,526,627.82
3,725,000.00
3,837,175.23
7,562,175.23
•
Combined Mountain Inn & Downtown Master Plan District
Based on 5.16 Mils / 1996-2004 Median Growth Rate of 6.52%
(18 Projects Planned Over Next 5 Years /$128 Million Appraised Value)
tl Available Increment................................................................................ 2,706,328,967
tl Available Yield...................................................................................... 13,964,657
Present Value of Available Yield................................................................... 8,486,841
Rate.................................................................................................... 0.516%
entValue Rate......................................................................................... 3.00%
,2005 3
=2006
-2007
2008
2009
zen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
al Assessment
35,046,385
42,118,745
57,386,791
67,739,368
77,514,159
essment Growth Rate
10.54%
20.18%
36.25%
18.04%
14.43%
-ement
3,599,830
10,672,190
25,940,236
36,292,813
46,067,604
tilable Yield
18,575
55,069
133,852
187,271
237,709
of Available Yield
18,034
51,907
122,493
166,388
205,050
2013
2014
zen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
al Assessment
82,568,082
87,951,521
93,685,960
99,794,284
106,300,872
essment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
-ement
51,121,527
56,504,966
62,239,405
68,347,729
74,854,317
tilable Yield
263,787
291,566
321,155
352,674
386,248
of Available Yield
220,918
237,070
253,523
270,295
287,405
vtZ��'*`�Wp�,vT.r201>5.. `1 X226'16 a •,a201>7
2018>:
201.9"
zen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
al Assessment
113,231,689
120,614,395
128,478,453
136,855,248
145,778,210
essment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
-ement
81,785,134
89,167,840
97,031,898
105,408,693
114,331,655
Lilable Yield
422,011
460,106
500,685
543,909
589,951
of Available Yield
304,870
322,709
340,942
359,588
378,667
As x 2O20 , �' x20211 X2022 ^
2023
s
��
zen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
al Assessment
155,282,950
165,407,398
176,191,960
187,679,676
199,916,391
essment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
"ement
123,836,395
133,960,843
144,745,405
156,233,121
168,469,836
tilable Yield
638,996
691,238
746,886
806,163
869,304
of Available Yield
398,201
418,210
438,717
459,743
481,313
2027
2028
2029
Frozen Assessment
31,446,555
31,446,555
31,446,555
31,446,555
31,446,555
Total Assessment
212,950,940
226,835,341
241,625,005
257,378,956
274,160,064
Assessment Growth Rate
6.52%
6.52%
6.52%
6.52%
6.52%
Increment
181,504,385
195,388,786
210,178,450
225,932,401
242,713,509
Available Yield
936,563
1,008,206
1,084,521
1,165,811
1,252,402
PV of Available Yield
503,449
526,175
549,518
573,502
598,154
0 0
Mountain Inn / Dickson Street Redevelopment District
Based on 1996-2004 Median Growth Rate of 6.52% at 5.16 Mils
ParAmount of Bonds..............................................................................................
3,725,000.00
InterestRate........................................................................................................
6.50%
Accrued
Total Principal
Excess Cash
Date
Revenue
Bonds Called
Interest
& Interest
Balance
4/19/2005
-
-
-
-
-
2/1/2006
138,575.12
130,000.00
6,697.08
136,697.08
1,878.04
2/1/2007
55,068.50
50,000.00
6,048.80
56,048.80
897.75
2!1/2008
133,851.62
110,000.00
21,452.42
131,452.42
3,296.94
2/1/2009
187,270.91
145,000.00
39,724.49
184,724.49
5,843.37
2/1/2010
237,708.83
175,000.00
62,669.95
237,669.95
5,882.25
2/1/2011
263,787.08
185,000.00
82,847.81
267,847.81
1,821.52
2/1/2012
291,565.62
190,000.00
103,258.16
293,258.16
128.98
2/1/2013
321,155.33
195,000.00
125,856.90
320,856.90
427.41
2/1/2014
352,674.28
200,000.00
150,822.00
350,822.00
2,279.69
2/1/2015
386,248.27
205,000.00
178,345.90
383,345.90
5,182.07
2/1/2016
422,011.29
210,000.00
208,635.84
418,635.84
8,557.52
2/1/2017
460,106.05
220,000.00
247,540.92
467,540.92
1,122.65
2/1/2018
500,684.59
220,000.00
278,424.96
498,424.96
3,382.28
2/1/2019
543,908.86
225,000.00
318,425.40
543,425.40
3,865.74
2/1/2020
589,951.34
230,000.00
362,195.72
592,195.72
1,621.36
2/1/2021
638,995.80
230,000.00
401,314.12
631,314.12
9,303.04
2/1/2022
691,237.95
235,000.00
452,647.13
687,647.13
12,893.86
2/1/2023
746,886.29
240,000.00
508,667.52
748,667.52
11,112.63
2/1/2024
806,162.91
245,000.00
569,748.97
814,748.97
2,526.57
2/1/2025
869,304.35
85,000.00
216,340.13
301,340.13
570,490.79
2/1/2026
936,562.63
-
-
-
1,507,053.42
2/1/2027
1,008,206.14
-
-
-
2,515,259.55
2/1/2028
1,084,520.80
-
-
-
3,599,780.36
2/1/2029
1,165,811.19
-
-
-
4,765,591.55
8/1/2029
-
-
-
-
4,765,591.55
Total
12,832,255.77
3,725,000.00
4,341,664.22
8,066,664.22
Fss
KUTAK ROCK LLP If' -
TA
CHICAGO
SUITE 1100 DENVER
425 WEST CAPITOL AVENUE DES MOINES
FAYETTEVILLE
NORTHWEST ARKANSAS OFFICE LITTLE ROCK, ARKANSAS 72201-3409 IRVINE
THE THREE SISTER$ BUILDING KANSAS CITY
501-975-3000
214 WEST DICKSON STREET LOS ANGELES
FACSIMILE 501-975-3001 OKLAHOMA CITY
FAYETTEVILLE. ARKANSAS 72701-5221
•79-978-4200 W W W.ku1Gkrock.COR1 OMAHA
PASADENA
RICHMOND
GORDON M. WILBOURN SCOTTSDALE
goroon.wiIboum@kulakmck.com June 27, 2005 WASHINGTON
(501) 975-3101 WICHITA
VIA FEDEX p
rrrcf/on
Mr. Steve Davis
Finance and Internal Services Director
City of Fayetteville, Arkansas
113 West Mountain
Fayetteville, AR 72701
$3,725,000
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. 1 Project)
Series 2005
Dear Steve:
Enclosed is your CD -Rom copy of the final transcript with respect to the above -captioned
matter. The contents of the CD -Rom transcript are identical to the hardbound transcript
previously distributed.
Sincerely,
on M. Wilbourn
paj
Enclosure
Shelly Turberville
Submitted By
trustee
$ 5,000.00
Cost of this request
3370.9370.7502.00
Account Number
City of Fayetteville
Staff Review Form
City Council Agenda Items
or
Contracts
City Cbun6il Meeting Date
Accounting Finance & Internal Services
Division Department
Action Required:
r the Successor Trustee on TIF bonds. The successor is Regions Bank.
$ - TIF Bonds
Category / Project Budget Program Category / Project Name
TIF Bonds
Funds Used to Date Program / Project Category Name
TIF
Project Number Remaining Balance Fund Name
Budgeted Item Budget Adjustment Attached
Previous Ordinance or Resolution # 4 1DB 1
Department Director
Date Original Contract Date:
/zzi o6
City Attorney Date
Financ n nternal Service Directo Da
Mayor
Date
Original Contract Number:
Received in ih/CIKI) Office
tlY I E�ttE
Received in Mayor's Office ENTEREp
,13
Regions
� Bank
Trustee Fee Schedule
For
City of Fayetteville, Arkansas Tax Increment Interest
Accretion Bonds (Highway 71 East Square Redevelopment
District No. 1 Project) Series 2005
Trustee Authentication & Acceptance Fee: $1,500.00
(remainder of initial fees received from prior trustee)
Annual Trustee Fees:
(Each April 1)
(Extraordinary legal expenses at cost)
Accepted by:
Date:
$3,500.00
ClaricePearman - Regions Bank
Page 1
From: Clarice Pearman
To: Turberville, Shelly
Date: 6.23.06 4:57PM
Subject: Regions Bank
Shelly,
Attached is a copy of the fee schedule for Regions Bank as successor. Have a good weekend.
Thanks.
Clarice
CC: Audit; Farthing, Marsha
City of Fayetteville
Staff Review Form
City Council Agenda Items
or
Contracts
City Council Meeting Date
Marsha Farthing Accounting and Audit
Submitted By Division
Action Required:
Approval of agreement with Bank of Fayetteville to appoint a successor trust
Interest Accretion Bonds (TIF), series 2005.
Cost of this request
Account Number
Project Number
Budgeted Item
Department Director
City mey
Mayor
Category / Project Budget
Funds Used to Date
Remaining Balance
fu5l,(z4a
/-uif 5e.nis
Fin and Int Services
Budget Adjustment Attached EJ
Date
/lfroco
Date
� b
Date
Department
Tax Increment
Program Category / Project Name
Program / Project Category Name
Fund Name
Previous Ordinance or Resolution #
Original Contract Date:
Original Contract Number:
Received i tlfltKtrce
Received in Mayor's Office EEp
AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE
THIS AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE,
dated as of June 1, 2006, by and among the CITY OF FAYETTEVILLE, ARKANSAS (the
"Issuer"), THE BANK OF FAYETTEVILLE, N.A., a national banking association organized
under and existing by virtue of the laws of the United States of America (the "Prior Trustee"),
and REGIONS BANK, a banking corporation organized under and existing by virtue of the laws
of the State of Alabama, with a principal trust office in Little Rock, Arkansas (the "Successor
Trustee");
WITNESSETH:
WHEREAS, the Issuer appointed the Prior Trustee as trustee under the Trust Indenture
dated as of April 15, 2005 (the "Indenture"), by and between the Issuer and the Prior Trustee, as
trustee for the holders of the Issuer's $3,725,000 Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. 1 Project), Series 2005 (the "Bonds"); and
WHEREAS, the Prior Trustee has given the Issuer and the holders of the Bonds notice of
its resignation from the performance of its duties pursuant to Section 907 of the Indenture;
WHEREAS, as permitted by Section 909 of the Indenture, the Issuer desires to appoint
the Successor Trustee as sucessor trustee to succeed the Prior Trustee in its capacity as trustee
under the Indenture; and
WHEREAS, the Successor Trustee is willing to accept such appointment as successor
trustee under the Indenture;
NOW, THEREFORE, the Issuer, the Prior Trustee and the Successor Trustee, for and in
consideration of the premises and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby consent and agree as follows:
THE PRIOR TRUSTEE
Section 1.01. The Prior Trustee hereby resigns as trustee under the Indenture.
Section 1.02. The Prior Trustee hereby assigns, transfers, delivers and confirms to the
Successor Trustee all right, title and interest of the Prior Trustee in and to the Trust Estate under
the Indenture and all the rights, powers and trusts of the Prior Trustee, as trustee under the
Indenture. The Prior Trustee shall execute and deliver such further instruments and shall do such
other things as the Successor Trustee may reasonably require so as to more fully and certainly
vest and confirm in the Successor Trustee all the rights, powers and trusts hereby assigned,
transferred, delivered and confirmed to the Successor Trustee, as trustee under the Indenture.
4813-6978-2016.2
"AIIQPno1I
THE ISSUER
Section 2.01. The Issuer hereby accepts the resignation of the Prior Trustee as trustee
under the Indenture.
Section 2.02. All conditions relating to the appointment of Regions Bank as successor
trustee under the Indenture have been met by the Issuer, and the Issuer hereby appoints the
Successor Trustee as trustee under the Indenture with like effect as if originally named as trustee
in the Indenture.
ARTICLE III
THE SUCCESSOR TRUSTEE
Section 3.01. The Successor Trustee hereby represents and warrants to the Prior Trustee
and to the Issuer that the Successor Trustee is not disqualified to act as trustee under the
Indenture.
Section 3.02. The Successor Trustee hereby accepts its appointment as successor trustee
under the Indenture and accepts the rights, powers, duties and obligations of the Prior Trustee as
trustee under the Indenture, upon the terms and conditions set forth therein, with like effect as if
originally named as trustee under the Indenture.
MISCELLANEOUS
Section 4.01. This Agreement and the resignation, appointment and acceptance effected
hereby shall be effective as of the date of execution by all of the parties hereto.
Section 4.02. This Agreement shall be governed by and construed in accordance with
the laws of the State of Arkansas.
Section 4.03. This Agreement maybe executed in any number of counterparts each of
which shall be original, but such counterparts shall together constitute but one and the same
instrument.
Section 4.04. The persons signing this Agreement on behalf of the Issuer, the Successor
Trustee and the Prior Trustee are duly authorized to execute it on behalf of such parties, and each
party warrants that it is authorized to execute this Agreement and to perform its duties hereunder.
4813-6978-2016.2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement of Resignation,
Appointment and Acceptance to be duly executed and acknowledged all as of the day and year
first above written.
CITY OF FAYETTEVILLE, ARKANSAS,
as Issuer
Name: Dan Coody
Title: Mayor
ATTEST:
By: I
Name: Sondra Smith
Title: City Clerk
THE BANK OF FAYETTEVILLE, N.A.,
as Prior Trustee
By:
Name: t'1 • }ce dQ r;t k SV\QP
Title: Sevot- J:cez9'rttt& .nor
REGIONS BANK,
as Successor Trustee
By:
Name:���a..._
Title: V&c Py 5cc --%
4813-6978-2016.1
AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE
THIS AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE,
dated as of June 1, 2006, by and among the CITY OF FAYETTEVILLE, ARKANSAS (the
"Issuer"), THE BANK OF FAYETTEVILLE, N.A., a national banking association organized
under and existing by virtue of the laws of the United States of America (the "Prior Trustee"),
and REGIONS BANK, a banking corporation organized under and existing by virtue of the laws
of the State of Alabama, with a principal trust office in Little Rock, Arkansas (the "Successor
Trustee");
WITNESSETH:
WHEREAS, the Issuer appointed the Prior Trustee as trustee under the Trust Indenture
dated as of April 15, 2005 (the "Indenture"), by and between the Issuer and the Prior Trustee, as
trustee for the holders of the Issuer's $3,725,000 Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. 1 Project), Series 2005 (the "Bonds"); and
WHEREAS, the Prior Trustee has given the Issuer and the holders of the Bonds notice of
its resignation from the performance of its duties pursuant to Section 907 of the Indenture;
WHEREAS, as permitted by Section 909 of the Indenture, the Issuer desires to appoint
the Successor Trustee as sucessor trustee to succeed the Prior Trustee in its capacity as trustee
under the Indenture; and
WHEREAS, the Successor Trustee is willing to accept such appointment as successor
trustee under the Indenture;
NOW, THEREFORE, the Issuer, the Prior Trustee and the Successor Trustee, for and in
consideration of the premises and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby consent and agree as follows:
ARTICLE I
THE PRIOR TRUSTEE
Section 1.01. The Prior Trustee hereby resigns as trustee under the Indenture.
Section 1.02. The Prior Trustee hereby assigns, transfers, delivers and confirms to the
Successor Trustee all right, title and interest of the Prior Trustee in and to the Trust Estate under
the Indenture and all the rights, powers and trusts of the Prior Trustee, as trustee under the
Indenture. The Prior Trustee shall execute and deliver such further instruments and shall do such
other things as the Successor Trustee may reasonably require so as to more fully and certainly
vest and confirm in the Successor Trustee all the rights, powers and trusts hereby assigned,
transferred, delivered and confirmed to the Successor Trustee, as trustee under the Indenture.
4813-6978-2016.2
ARTICLE II
THE ISSUER
Section 2.01. The Issuer hereby accepts the resignation of the Prior Trustee as trustee
under the Indenture.
Section 2.02. All conditions relating to the appointment of Regions Bank as successor
trustee under the Indenture have been met by the Issuer, and the Issuer hereby appoints the
Successor Trustee as trustee under the Indenture with like effect as if originally named as trustee
in the Indenture.
ARTICLE III
THE SUCCESSOR TRUSTEE
Section 3.01. The Successor Trustee hereby represents and warrants to the Prior Trustee
and to the Issuer that the Successor Trustee is not disqualified to act as trustee under the
Indenture.
Section 3.02. The Successor Trustee hereby accepts its appointment as successor trustee
under the Indenture and accepts the rights, powers, duties and obligations of the Prior Trustee as
trustee under the Indenture, upon the terms and conditions set forth therein, with like effect as if
originally named as trustee under the Indenture.
F"1 4914LllA"T
MISCELLANEOUS
Section 4.01. This Agreement and the resignation, appointment and acceptance effected
hereby shall be effective as of the date of execution by all of the parties hereto.
Section 4.02. This Agreement shall be governed by and construed in accordance with
the laws of the State of Arkansas.
Section 4.03. This Agreement maybe executed in any number of counterparts each of
which shall be original, but such counterparts shall together constitute but one and the same
instrument.
Section 4.04. The persons signing this Agreement on behalf of the Issuer, the Successor
Trustee and the Prior Trustee are duly authorized to execute it on behalf of such parties, and each
party warrants that it is authorized to execute this Agreement and to perform its duties hereunder.
4813-6978-2016.2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement of Resignation,
Appointment and Acceptance to be duly executed and acknowledged all as of the day and year
first above written.
CITY OF FAYETTEVILLE, ARKANSAS,
as Issuer
By:
Name: Dan Coody
Title: Mayor
ATTEST:
By:
Name: Sondra Smith
Title: City Clerk
THE BANK OF FAYETTEVILLE, N.A.,
as Prior Trustee
ByD
Name: 'b • ice e c;C ([ g1nQ�
Title: Sev�:oe` d;eQ�res:a K�
REGIONS BANK,
as Successor Trustee
Na: Name:q,� k r P
Title: %JJ, e Py Rs cQ
4817-6978-2016.1
1 • 1 • • 11 1.1 •(_I1 1 ti 1 1 : K C YI 111 : ' '1 >. 1X11 1 '1Ti,
1
11 111 _1 41 Yal ♦ 1 11 .YI♦1 :11 :,V '''id -1•.1 1 1 1 :11
CITY OF FAYETfEVILLE, ARKANSAS,
as Issuer
By:
Name: Dan Coody
Title: Mayor
ATTEST:
Name: Sondra Smith
Tide: City Clerk
THE BANK OF FAYETTEVILLE, N.A.,
as Prior Trustee
By.
Name:
Title:
Pli 11 II. .:.
4113.6971-2016.2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement of Resignation,
Appointment and Acceptance to be duly executed and acknowledged all as of the day and year
first above written.
CITY OF FAYETTEVILLE, ARKANSAS,
as Issuer
Name: Dan Coody
Title: Mayor
ATTEST:
By:
Name: Sondra Smith
Title: City Clerk
THE BANK OF FAYETTEVILLE, N.A.,
as Prior Trustee
By-
Name: t7 i cQ a e o:t �c $Y�Q
Title: Scvvot- I;ce^tes:a .n�C
REGIONS BANK,
as Successor Trustee
Name:
Title:
4813.6978-2016.1
Clarice Pearman - Re: Bank of Fayetteville •Page 1
From: Shelly Turberville
To: Pearman, Clarice
Date: 6.19.06 11:17AM
Subject: Re: Bank of Fayetteville
Clarice,
Gordon who is our Bond Council has the Bank Signatures. I will talk to Marsha and see what she wants
me to do.
Thanks
Shelly Turberville
Accounting Coordinator
City of Fayetteville
113 W. Mountain Street
Fayetteville, AR 72701
(479) 575-8274
(479) 575-8273 Fax
sturberville@ci.fayetteville.ar.us
>>> Clarice Pearman 6/19/2006 9:58 am >>>
Shelly,
Do you haveagreements with Bank of Fayetteville and Regions Bank signatures. If not, please get me
signed agreements and then I will get the mayors signature. Any contract submitted for the mayors
signature must have the signature of the other parties first. The only exception to that is the federal
government agreements, state agreements or Washington County agreements.
Thanks.
Clarice
Clarice Pearman - Trustee A reement Page 1
From: Clarice Pearman
To: Farthing, Marsha; Turberville, Shelly
Date: 6.21.06 3:34PM
Subject: Trustee Agreement
Shelly & Marsha:
Attached is a copy of the trustee's agreement with all the pertinent signatures. Thanks.
Clarice
CC: Smith. Sondra