HomeMy WebLinkAboutOrdinance 4718 ORDINANCE NO. 4718
AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT TO
EXCEED $65,000,000 OF A SALES AND USE TAX CAPITAL
IMPROVEMENT BOND, SERIES 2005, BY THE CITY OF FAYETTEVILLE,
ARKANSAS FOR THE PURPOSE OF FINANCING A PORTION OF THE
COSTS OF ACQUIRING, CONSTRUCTING AND EQUIPPING A NEW
WASTEWATER TREATMENT FACILITY AND RELATED SEWERAGE
IMPROVEMENTS; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL
OF AND INTEREST ON THE SERIES 2005 BOND; AUTHORIZING THE
EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT
PROVIDING FOR THE SALE OF THE SERIES 2005 BOND; AUTHORIZING
THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE
AGREEMENT; AND PRESCRIBING OTHER MATTERS RELATING
THERETO
WHEREAS, the City Council of the City of Fayetteville, Arkansas (the "City") has
determined that there is a great need for a source of revenue to finance the costs of acquisition,
construction and equipping of a new wastewater treatment facility and related sewerage
improvements to serve the western portion of the City (the "Project'); and
WHEREAS, based on the engineering report (the "Engineering Report") of McGoodwin,
Williams and Yates, Fayetteville, Arkansas, which Engineering Report has been reviewed by the
City Council, it has been determined that the remaining costs of the Project are in excess of
$65,000,000; and
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas, including particularly Amendment 62 to the
Constitution of the State of Arkansas ("Amendment 62") and Arkansas Code Annotated (1998
Repl. & 2003 Supp.) Sections 14- 164-301 et seq. (as from time to time amended, the "Local
Government Bond Act'), to issue and sell its capital improvement bonds to finance the costs of
various capital improvements such as those comprising the Project, which capital improvement
bonds may be secured by and payable from the receipts of the special city-wide sales and use tax
authorized by the Local Government Bond Act; and
WHEREAS, pursuant to the provisions of Ordinance No. 4327 of the City, adopted and
approved on August 7, 2001 (the "Election Ordinance"), there was submitted to the qualified
electors of the City the question of the issuance of not to exceed $ 125,000,000 in aggregate
principal amount of capital improvement bonds pursuant to Amendment 62 and the Local
Government Bond Act to finance a portion of the wastewater system improvements described in
the Election Ordinance, said bonds to be secured by a pledge of and lien upon all of the receipts
of a special city-wide sales and use tax levied at the rate of three-quarters of one percent (0.75%)
pursuant to the Local Government Bond Act (the "Sales and Use Tax"); and
WHEREAS, at a special election held November 6, 2001 , a majority of the qualified
electors of the City voting on the question approved the issuance of said capital improvement
bonds (and the corresponding levy of the Sales and Use Tax and the pledge of Sales and Use Tax
receipts to the payment of the capital improvement bonds); and
WHEREAS, pursuant to such authority, the City has previously issued its $25,000,000
Sales and Use Tax Capital Improvement Bonds, Series 2002 (the "Series 2002 Bonds"), and its
$35,000,000 Sales and Use Tax Capital Improvement Bonds, Series 2004 (the "Series 2004
Bonds"), in order to provide for the funding of various wastewater system improvements,
including initial portions of the Project; and
WHEREAS, the Series 2002 Bonds have been redeemed in full from receipts of the
Sales and Use Tax; and
WHEREAS, as authorized under the provisions of Amendment 62 and the Local
Government Bond Act and as approved by the qualified electors of the City, and in order to
secure funds necessary to pay a portion of the costs of engineering, planning, designing,
acquiring, constructing and equipping of the Project, and the legal costs incident to the issuance
of a revenue bond to finance the costs of said Project, upon the most favorable terms to the City
and the users of the City's wastewater system, the City has made arrangements for the sale of its
Sales and Use Tax Capital Improvement Bond, Series 2005 (the "Series 2005 Bond"), in the
principal amount of not to exceed $65,000,000 to the Arkansas Development Finance Authority,
as purchaser (the "Bondholder"), at a price of par, which Series 2005 Bond shall bear interest at
the rate of two percent (2.00%) per annum, pursuant to a Bond Purchase Agreement (the "Bond
Purchase Agreement") among the City, the Bondholder and the Arkansas Soil and Water
Conservation Commission (the "Commission"); and
WHEREAS, the City will also be required to pay to the Arkansas Development Finance
Authority, as servicer with respect to the Series 2005 Bond (the "Authority"), a semiannual
servicing fee equal to one percent (1 .00%) per annum of the outstanding principal amount of the
Series 2005 Bond (the "Servicing Fee"); and
WHEREAS, the Series 2005 Bond will be issued and secured by the Sales and Use Tax
receipts on a panty basis with the Series 2004 Bonds, except that the Series 2005 Bond will not
be secured by the debt service reserve securing the Series 2004 Bonds ; and
WHEREAS, a copy of the Bond Purchase Agreement has been presented to and is
before this meeting;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1 : The Project shall be accomplished and shall be a part of the City's
wastewater system (the "System"). The accomplishment of the Project shall be under the control
and supervision of, and all details in connection therewith shall be handled by, the City, and the
City shall make all contracts and agreements necessary or incidental to the performance of its
duties and the execution of its powers. The City shall let all contracts pursuant to and in
accordance with existing laws and shall require such performance bonds and insurance from the
contractors as will fully insure completion of the Project in accordance with the Engineering
Report so as to fully promote and protect the best interests of the City and the Bondholder.
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Section 2: The sale to the Bondholder of the City's Series 2005 Bond in the
maximum principal amount of $65,000,000 at a price of par, such Series 2005 Bond to bear
interest at the rate of 2.00% per annum and to be subject to a Servicing Fee of 1 .00% per annum
and otherwise to be subject to the terms and provisions hereafter in this Ordinance set forth in
detail be, and is hereby approved and the Series 2005 Bond is hereby sold to the Bondholder.
The Mayor is hereby authorized and directed to execute and deliver the Bond Purchase
Agreement on behalf of the City and to take all action required on the part of the City to fulfill its
obligations under the Bond Purchase Agreement. The Bond Purchase Agreement is hereby
approved in substantially the form submitted to this meeting with such changes as may be
approved by the Mayor, his execution to constitute complete evidence of such approval.
Section 3 : The City Council hereby finds and declares that the period of usefulness of
the System after completion of the Project will be more than twenty-five (25) years, which is
longer than the term of the Series 2005 Bond.
Section 4: Under the authority of the Constitution and laws of the State of Arkansas,
including particularly Amendment 62 to the Constitution of the State of Arkansas and the Local
Government Bond Act, the City of Fayetteville, Arkansas Sales and Use Tax Capital
Improvement Bond, Series 2005 (the "Series 2005 Bond"), is hereby authorized to be issued in
the total principal amount of not to exceed Sixty-Five Million Dollars ($65,000,000), the
proceeds of the sale of which are necessary to provide sufficient funds to pay a portion of the
costs of accomplishing the Project, including, without limitation, engineering fees, legal fees and
other necessary expenses incidental to accomplishment of the Project, and to the issuance of the
Series 2005 Bond.
The Series 2005 Bond shall bear interest at the rate of two percent (2.00%) per annum
and shall be subject to a Servicing Fee of one percent (1 .00%) per annum based upon a 360-day
year of twelve consecutive 30-day months compounded semiannually. The Series 2005 Bond
shall be dated the date of its delivery to the Bondholder. Accrued interest and the Servicing Fee
only shall be payable on each April 15 and October 15, commencing October 15, 2005, to and
including October 15, 2008. Principal, interest and the Servicing Fee shall be payable on
April 15, 2009, and on each April 15 and October 15 thereafter until the unpaid principal is paid
in full as follows:
Date Payment Amount Interest Servicing Fee Principal
April 15, 2009 $3,785,973 .00 $6505000.00 $3255000.00 $25810,973 .00
October 15, 2009 35785,973 .00 621 ,890.00 310,945.00 2,8539138.00
April 15, 2010 35785,973 .00 593,359.00 296,679.00 2,895,935.00
October 15, 2010 39785,973 .00 5645400.00 2829200.00 2,939,373.00
April 15, 2011 3,7853973 .00 535,006.00 2675503.00 2,983,464.00
Date Payment Amount Interest Servicing Fee Principal
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October 15, 2011 3,7855973 .00 505, 171 .00 252,586.00 3,0289216.00
April 15, 2012 397855973 .00 474,889.00 237,445.00 39073,639.00
October 15, 2012 33785,973 .00 444, 153.00 2225076.00 39119,744.00
April 15, 2013 35785,973.00 412,955.00 206,478.00 3, 166,540.00
October 15, 2013 397855973 .00 3819290.00 190,645 .00 3,2145038.00
April 15, 2014 35785,973 .00 3495149.00 174,575.00 3,2625249.00
October 15, 2014 3,785,973.00 3169527.00 158,263 .00 313115183.00
April 15, 2015 3 ,7855973 .00 283,415.00 1419708.00 333605850.00
October 15, 2015 39785,973.00 2495807.00 124,903 .00 3,4111263.00
April 15, 2016 3 ,7853973 .00 215,694.00 1079847.00 33462,432.00
October 15, 2016 3,785,973.00 181 ,070.00 90,535.00 3,514,368.00
April 15, 2017 3,785,973 .00 145,926.00 72,963 .00 35567,084.00
October 15, 2017 3,785,973.00 110,255.00 555128.00 35620,590.00
April 15, 2018 3,785,973 .00 74,049.00 37,025.00 3,6749899.00
October 15, 2018 3 ,785,972.00 37,300.00 185650.00 397305022.00
The Series 2005 Bond shall be issued in the form of a single typewritten bond, registered
as to both principal and interest, payable to the Bondholder, or registered assigns, as set forth
hereinafter in the bond form, and shall be numbered R05- 1 .
Payment of principal and interest shall be by check or draft mailed by Simmons First
Trust Company, N.A., as trustee in connection with the Series 2004 Bonds (the "Trustee"), to the
Bondholder at its address shown on the registration books of the City which shall be maintained
by the City Clerk as Bond Registrar, without presentation or surrender of the Series 2005 Bond
(except upon final payment), and such payments shall discharge the obligation of the City to the
extent thereof The City Clerk or her designee shall keep a payment record and make proper
notations thereon of all payments of principal and interest.
Payment of principal and interest shall be in any coin or currency of the United States of
America which, as at the time of payment, shall be legal tender for the payment of debts due the
United States of America. When the principal of and interest on the Series 2005 Bond has been
fully paid, it shall be delivered to the City Clerk and shall be canceled.
Section 5 : The Series 2005 Bond shall be executed on behalf of the City by its Mayor
and City Clerk, and shall have impressed thereon the seal of the City. In order to pay the
principal of and interest on the Series 2005 Bond and the Servicing Fee in connection therewith,
there is hereby pledged all of the receipts of the Sales and Use Tax levied by the Election
Ordinance. As permitted under the Trust Indenture dated as of June 1 , 2002, as amended (the
"Indenture"), securing the Series 2004 Bonds, such pledge is made on a parity basis with the
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existing pledge of receipts of the Sales and Use Tax securing the payment of the Series 2004
Bonds. The levy and collection of the Sales and Use Tax shall continue until such time as the
Series 2004 Bonds and the Series 2005 Bond are no longer outstanding or sufficient funds are on
deposit with the Trustee under the Indenture to redeem the Series 2004 Bonds and the Series
2005 Bond in full. The City covenants and agrees that all receipts from the Sales and Use Tax
will be accounted for separately as special funds on the books of the City, and receipts of said
Sales and Use Tax will be deposited and will be used solely as provided herein and in the
Indenture. The Series 2005 Bond is not a general obligation of the City but is a special
obligation, the principal of and the interest on which, and the Servicing Fee in connection
therewith, are secured by a pledge of the receipts from the Sales and Use Tax. The principal of
and interest on the Series 2005 Bond shall not constitute an indebtedness of the City within the
meaning of any constitutional or statutory debt limitation or restriction.
Section 6: The Series 2005 Bond shall be in substantially the following form, and the
Mayor and City Clerk are hereby authorized and directed to make all the recitals contained
therein:
Registered United States of America Registered
No. R05-1 $653000,000
State of Arkansas
County of Washington
City of Fayetteville, Arkansas
Sales and Use Tax Capital Improvement Bond
Series 2005
Registered Owner: ARKANSAS DEVELOPMENT FINANCE AUTHORITY
Principal Amount: SIXTY-FIVE MILLION DOLLARS
Know All Men By These Presents:
That the City of Fayetteville, Arkansas (the "City") hereby acknowledges itself to owe,
and for value received promises to pay to the order of the Arkansas Development Finance
Authority, or registered assigns, but solely from the special fund provided therefor as hereinafter
set forth, in lawful money of the United States of America, the Principal Amount shown above
(or so much of the Principal Amount as should have been advanced as shown on the Record of
Payment of Advances attached hereto), and to pay in like coin or currency interest thereon at the
rate of 2.00% per annum from the date of each advance. A servicing fee of 1 .00% per annum
(the "Servicing Fee") shall also be payable by the City to the Arkansas Development Finance
Authority or its successor in the same manner and upon the same dates as interest hereon.
Interest on the unpaid balance of the total principal amount outstanding and the Servicing
Fee shall be payable on October 15, 2005, April 15, 2006, October 15, 2006, April 15, 2007,
October 15, 2007, April 15, 2008 and October 15, 2008. Principal, interest and the Servicing Fee
shall be payable on April 15, 2009, and on each April 15 and October 15 thereafter until the
unpaid principal is paid in full as follows:
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[Here will be inserted the amortization schedule
set forth in Section 4 of this Ordinance.]
Payments of principal and interest due hereon shall be made, except for final payment,
without presentation and surrender of this bond, directly to the Registered Owner at its address
shown on the registration book of the City maintained by the City Clerk as Bond Registrar, and
such payments shall fully discharge the obligation of the City to the extent of the payments so
made.
This bond is issued for the purpose of (i) providing, financing for a portion of the costs of
planning, designing, acquiring, constructing and equipping of a new wastewater treatment
facility and related sewerage improvements to serve the western portion of the City (the
"Project"), and (ii) paying costs of authorizing and issuing this bond, and is issued pursuant to
and in full compliance with the Constitution and laws of the State of Arkansas, including
particularly Amendment No. 62 to the Constitution of the State of Arkansas ("Amendment 62")
and the Local Government Bond Act, codified as Arkansas Code Annotated Sections 14- 164-301
et seq. ( 1998 Repl. & 2003 Supp.) (the "Act"), and pursuant to Ordinance No.,, y '718 of the
City, duly adopted and approved on the _% day of. , dy , 2005 (the "Authorizing Ordinance").
Reference is hereby made to the Authorizing Ordinance f r the details of the nature and extent of
the security and of the rights and obligations of the City and the Registered Owner of this bond.
This bond may be assigned only upon the written approval of the Arkansas Soil and
Water Conservation Commission (the "Commission"), and in order to effect such assignment,
the assignor shall promptly notify the City Clerk by registered mail, and the assignee shall
surrender this bond along with a written assignment and written approval of the Commission to
the City Clerk for transfer on the registration records. Every assignee shall take this bond subject
to all payments and prepayments of principal and interest (as reflected on the Payment Record
maintained by the City Clerk or her designee) prior to such surrender for transfer.
Following payment in full of the City's Sales and Use Tax Capital Improvement Bonds,
Series 2004 (the "Series 2004 Bonds"), the outstanding principal of this bond shall be prepaid by
the City from time to time with receipts of the Sales and Use Tax (defined below) in excess of
amounts needed to make scheduled payments of the principal, interest and Servicing Fee hereon.
Further, on and after October 15, 2014, this bond may be prepaid at the option of the City from
funds from any source, in whole but not in part, at a prepayment price equal to the principal
amount outstanding, plus accrued interest to the prepayment date. Notice of any prepayment,
whether mandatory or optional, shall be given to the registered owner of this bond at least 90
days prior to the prepayment date. Such notice shall be in writing mailed to the address of the
registered owner of this bond at the address appearing on the bond registration records
maintained by the City Clerk.
This bond does not constitute an indebtedness of the City or the State of Arkansas within
the meaning of any constitutional or statutory limitation or provision, and, except with respect to
receipts generated from the Sales and Use Tax, the taxing power of the City is not pledged to the
payment of the principal of and interest on this bond.
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This bond is not a general obligation of the City, but is a special limited obligation
payable solely from the receipts of a special City-wide sales and use tax levied at the rate of
three-quarters of one percent (0.75%) pursuant to the Local Government Bond Act (the "Sales
and Use Tax"). In this regard, the pledge of Sales and Use Tax receipts is made on a parity basis
with the prior pledge of such receipts securing the City's Sales and Use Tax Capital
Improvement Bonds, Series 2004 (the "Series 2004 Bonds"). Pursuant to the Trust Indenture
dated as of June 1 , 2002, as amended (the "Indenture), under which the Series 2004 Bonds are
issued and secured, an amount of Sales and Use Tax receipts sufficient to pay principal and
interest on this bond as due shall be set aside monthly in a special fund created for that purpose
identified as the Bond Fund. Reference is made to the Indenture for a detailed statement of the
nature and extent of the security, and the rights and obligations of the City and registered owner
of this bond.
This bond is issued with the intent that the laws of the State of Arkansas will govern its
construction.
No recourse shall be had for the payment of the principal of or premium, if any, or
interest on this bond or for any claim based thereon or upon any obligation, covenant, or
agreement contained in this bond or in the Authorizing Ordinance against any past, present or
future alderman, officer or employee of the City, or any alderman, officer or employee of any
successor of the City, 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
this bond.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions
and things required by the Constitution and statutes of the State of Arkansas to exist, happen and
be performed precedent to and in the issuance of this bond do exist, have happened and have
been performed in due time, form and manner as required by law; that the indebtedness
represented by this bond does not exceed or violate any constitutional or statutory limitation of
indebtedness; and that provision has been made for the payment of the principal of and interest
on this bond, as provided in the Authorizing Ordinance.
IN WITNESS WHEREOF, the City of Fayetteville, Arkansas has caused this bond to
be executed in its name by the manual signatures of its Mayor and City Clerk, thereunto duly
authorize, and its corporate seal to be affixed hereto, all as of the 5k day of
2005 .
CITY OF FAYETTEVILLE,
ARKANSAS
By:
DA COODY, Mayor
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ATTEST: = ; FAYETTEVILLE ;
SON RA SMITH, City lerk
REGISTRATION CERTIFICATE
Date of Registration Name of Registered Owner Signature of City Clerk
Arkansas Development
Finance Authority
RECORD OF PAYMENT OF ADVANCES
Signature of Vice
President of Arkansas
* Total Principal Development Finance
Date of Advance Amount of Outstanding Authority
Advance
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*The date of each advance shall be the interest commencement date from which the
principal amount of such advance bears interest and from which the Servicing Fee is calculated.
Section 7. All of the terms and provisions of the Indenture, as now in effect, except
for those provisions clearly inapplicable hereto or in direct conflict herewith, including, without
limitation, those terms and provisions pertaining to the receipt, investment and handling of Sales
and Use Tax receipts, are hereby made applicable hereto and incorporated by reference as though
fully set forth herein. The effect of the foregoing sentence shall be to continue the applicable
provisions in full force and effect until the Series 2005 Bond is paid, or provision made therefor,
even after payment of the Series 2004 Bonds.
Section 8. The City shall assure that (i) not in excess of 10% of the proceeds of the
Series 2005 Bond is used for Private Business Use (as defined below) if, in addition, the payment
of more than 10% of the principal or 10% of the interest due on the Series 2005 Bond during the
term thereof are, under the terms of the Series 2005 Bond or any underlying arrangement,
directly or indirectly secured by any interest in property used or to be used for a Private Business
Use or in payments in respect of property used or to be used for a Private Business Use or are to
be derived from payments, whether or not to the City, in respect of property or borrowed moneys
used or to be used for a Private Business Use; and (ii) that, in the event that both (A) in excess of
5% of the proceeds of the Series 2005 Bond are used for a Private Business Use, and (B) an
amount in excess of 5% of the principal or 5% of the interest due on the Series 2005 Bond during
the term thereof are, under the terms of the Series 2005 Bond or any underlying arrangement,
directly or indirectly, secured by any interest in property used or to be used for said Private
Business Use or in payments in respect of property used or to be used for said Private Business
Use or are to be derived from payments, whether or not to the City, in respect of property or
borrowed money used or to be used for said Private Business Use, then said excess over said 5%
of proceeds of the Series 2005 Bond used for a Private Business Use shall be used for a Private
Business Use related to the governmental use of the Project.
The City shall assure that not in excess of 5% of the proceeds of the Series 2005 Bond are
used, directly or indirectly, to make or finance a loan to persons other than state or local
governmental units.
As used in this Section, "Private Business Use" means use directly or indirectly in a trade
or business carried on by a natural person or in any activity carried on by a person other than a
natural person, excluding, however, use by a state or local governmental unit and use as a
member of the general public.
Section 9: Installments of principal and interest on the Series 2005 Bond shall be
prepayable prior to maturity as provided in the form of the Series 2005 Bond set forth in Section
5 of this Ordinance.
Section 10: So long as the Series 2005 Bond is outstanding, the City shall not issue or
attempt to issue any bonds or other indebtedness having or claimed to be entitled to a pledge of
the Sales and Use Tax receipts on a priority or panty basis with the lien thereon securing the
Series 2004 Bonds and the Series 2005 Bond.
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Section 11 : It is covenanted and agreed by the City with the Bondholder and the
Commission that it will faithfully and punctually perform all duties with reference to the System
required by the Constitution and laws of the State of Arkansas and by this Ordinance, including,
without limitation, the making and collecting of reasonable and sufficient rates lawfully
established for services rendered by the System and the segregating of System revenues.
The City covenants and agrees that the Bondholder shall have the protection of all the .
provisions of the Local Government Bond Act, the Indenture and this Ordinance, and that the
City will diligently proceed to enforce those provisions to the end of the Bondholder realizing
fully upon its security. If the City shall fail to proceed within thirty (30) days after written
request shall have been filed by the Bondholder or the Commission, the Bondholder or the
Commission may proceed to enforce all such provisions.
If there be any default in the payment of the principal of or interest on the Series 2005
Bond, or if the City defaults in any Bond Fund requirement described in the Indenture or in the
performance of any of the other covenants contained in this Ordinance or in the Bond Purchase
Agreement, the Bondholder and the Commission (with respect to covenants contained in the
Bond Purchase Agreement) may, by proper suit, compel the performance of the duties of the
officials of the City under the laws of the State of Arkansas. No remedy herein conferred upon
or reserved to the Bondholder is intended to be exclusive of any other remedy or remedies herein
provided or provided by law, and every such remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or given by law. No delay or omission of the Bondholder
to exercise any right or power accrued upon any default shall impair any such right or power or
shall be construed to be a waiver of any default or an acquiescence therein; and every power and
remedy given by this Ordinance to the Bondholder may be exercised from time to time and as
often as may be deemed expedient.
No waiver of any default shall extend to or affect . any other existing or any subsequent
default or defaults or impair any rights or remedies consequent thereon. Any costs of
enforcement of the Series 2005 Bond or of any provision of this Ordinance, including reasonable
attorney' s fees, shall be paid by the City. The Bondholder may enforce all rights and exercise all
remedies available to the Bondholder in the event the Servicing Fee is not paid when due.
Section 12: When the Series 2005 Bond has been executed by the Mayor and City
Clerk and the seal of the City impressed thereon as herein provided, it shall be delivered to the
Bondholder upon the payment of all or a portion of the purchase price in accordance with the
Bond Purchase Agreement. The purchase price shall be deposited, as and when received, in a
special account of the City hereby created in a bank that is a member of the Federal Deposit
Insurance Corporation and designated the "2005 Wastewater Construction Fund" (the
"Construction Fund"). The moneys in the Construction Fund shall be used for accomplishing the
Project, paying expenses incidental thereto and paying the expenses of issuing the Series 2005
Bond approved in accordance with the Bond Purchase Agreement. Payments from the
Construction Fund shall be by check or voucher signed by the City Clerk or her designee, and
drawn on the depository. Each such check or voucher shall briefly specify the purpose of the
expenditure.
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When the Project has been completed and all required expenses paid and expenditures
made from the Construction Fund for and in connection with the accomplishment of the Project
and the financing thereof, this fact shall be evidenced by a certificate signed by the City Clerk or
her designee, and by the consulting engineer, which certificate shall state, among other things,
the date of the completion and that all obligations payable from the Construction Fund have been
discharged. A copy of the certificate shall be filed with the depository bank, the Bondholder and
the Commission.
Disbursements shall be made by the Bondholder for costs of the Project pursuant to
written Disbursement Requests as provided in the Bond Purchase Agreement.
Section 13 : The terms and provisions of this Ordinance shall constitute a binding
contract among the City, the Bondholder and the Commission, and no variation or change in the
undertaking herein set forth shall be made while the Series 2005 Bond is outstanding unless
consented to in writing by the Bondholder and the Commission.
Section 14: The City covenants and agrees that it will maintain the System in good
condition and operate it in an efficient manner and at reasonable cost. The City agrees to keep
proper records, books and accounts relating to the operation of the System, which shall be kept
separate from all other records and accounts of the City, in which complete and correct entries
shall be made of all transactions relating to the operation of the System in accordance with
generally accepted government accounting standards. Such books shall be available for
inspection by the Bondholder and the Commission, or the agent or the representative of either, at
reasonable times and under reasonable circumstances. The City agrees to have these records
audited annually. If requested, the City agrees to furnish the audit report with respect to the
System to the Bondholder and the Commission.
The City also agrees that it will furnish to the Bondholder and the Commission on or
before 30 days after the end of each fiscal year, if requested, a statement showing (i) total
receipts of the Sales and Use Tax during such fiscal year, (ii) the application of such receipts to
pay the principal of and interest on the Series 2004 Bonds, and (iii) the application of such
receipts to pay the principal of and the interest on the Series 2005 Bond and the Servicing Fee
with respect thereto.
Section 15 : The City agrees that the Bondholder may pledge the Series 2005 Bond as
security for the payment of its wastewater system revolving loan fund revenue bonds (the
"ADFA Bonds"), and the trustee or municipal bond insurer for the ADFA Bonds may exercise
any rights or remedies available to the Bondholder under this Ordinance or the Bond Purchase
Agreement while the Series 2005 Bond is pledged and/or the ADFA Bonds are insured. In
addition, the City agrees that while the Series 2005 Bond is pledged and/or the ADFA Bonds are
insured, copies of all financial information relating to the City, the System and the Sales and Use
Tax receipts shall be furnished to the trustee and/or the municipal insurer for the ADFA Bonds.
Section 16: 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 Series 2005 Bond and to effect the execution and delivery of the Bond
Purchase Agreement, and to perform all of the obligations of the City under and pursuant thereto.
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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 17: Kutak Rock LLP, Little Rock, Arkansas, is hereby appointed to act as
Bond Counsel on behalf of the City in connection with the issuance and sale of the Series 2005
Bond.
Section 18 : 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.
Section 19: All ordinances, resolutions and parts thereof in conflict herewith are
hereby repealed to the extent of such conflict.
PASSED and APPROVED this 5 h day of July, 2005 .
APPROVED:
' U@ FAYETTEVILLE : By:
�: •� DA GOODY, Mayor
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By: ebAJA0 V
SONDRA SMITH, City Clerk
12
PLEASE SEE
ORDINANCE
# 4768
OCTOBER 4, 2005
BOND PURCHASE AGREEMENT
City of Fayetteville, Arkansas
113 West Mountain Street
Fayetteville, Arkansas 72701
Attention: Mayor
Ladies and Gentlemen:
2005
Certain terms used in this Bond Purchase Agreement are defined as follows:
Issuer:
Principal Amount:
Interest Rate:
Servicing Fee:
Administrative Fee:
Bond:
Bond Counsel:
Bond Ordinance:
Security:
Closing:
City of Fayetteville, Arkansas
$65,000,000 (See Exhibit B)
2.00%
per annum
of
the outstanding principal
amount
of the Bond
(see
Exhibit A)
1.00%
per annum
of
the outstanding principal
amount
of the Bond
(see
Exhibit A)
$ .0 -
City of Fayetteville, Arkansas Sales and Use Tax
Improvement Bond, Series 2005
Kutak Rock LLP
Ordinance No. ig of the Issuer, adopted on
J u ( sl S 2005, under which the Bond is
to be issued and secured
Receipts of the Issuer's 0.75% Sales and Use Tax
(the "Tax") levied pursuant to Ordinance No. 4327
of the Issuer (the "Levying Ordinance"), adopted on
August 7, 2001, and approved by the registered
voters of the Issuer at a special election held on
November 6, 2001
1:30 p.m., prevailing local time, on August 9, 2005,
or at such other time or on such later date as is
mutually agreed upon, at the offices of Bond
Counsel in Little Rock, Arkansas
Disbursement Cut Off Date: October 15, 2008
Authorizing
Legislation: Amendment 62 to the Constitution of the State of
Arkansas and the Local Government Bond Act of
1985, as amended (A.C.A. §14-164-301 et seq.)
The Arkansas Soil and Water Conservation Commission (the "Commission") and the
Arkansas Development Finance Authority (the "Authority") hereby offer to enter into this Bond
Purchase Agreement (the "Agreement") with you (the "Issuer") for the purchase by the
Authority from moneys in the Construction Assistance Revolving Loan Fund, created by
Arkansas Code Annotated Section 15-5-901 et seq., as the same may be amended from time to
time (the "Revolving Loan Fund"), and the sale by you of the Bond of the Issuer more
particularly described below. Upon approval by you and by the execution of the acceptance
hereof by the Mayor of the Issuer, this Agreement shall be in full force and effect in accordance
with its terms and shall be valid, binding and enforceable upon the Issuer, the Commission and
the Authority.
Further terms of this Agreement are:
1. Upon the terms and conditions and upon the basis of the representations herein set
forth, the Authority hereby agrees to purchase from the Issuer and the Issuer hereby agrees to sell
to the Authority the entire Principal Amount of the Bond to be issued under and secured by the
Bond Ordinance.
2. The Bond is being issued for the purpose of financing the construction of
improvements to the treatment facilities of the Issuer's wastewater system (the "System") as
described in the facilities plan furnished by the Issuer to and concurred with by the Commission
(the "Project"), paying costs incidental thereto, and paying approved expenses incurred in
connection with the issuance of the Bond as set forth in Exhibit B hereto.
3. The Bond and Servicing Fee shall be secured by a pledge of and payable from
receipts of the Tax (the "Tax Receipts"), subject to a pledge in favor of certain outstanding bonds
identified in the Bond Ordinance. The Tax has been levied and is being collected pursuant to the
Levying Ordinance.
4. The Bond shall be dated the date of the Closing. The Bond shall be authorized in
an amount up to the Principal Amount identified above, and shall bear interest at the Interest
Rate identified above. Principal and interest shall be amortized in accordance with the schedule
set forth on Exhibit A attached hereto (which is based upon semiannual repayment of principal
and interest commencing six months following the Disbursement Cut Off Date and a 10 -year
amortization), and the Issuer shall pay to the Authority on the first business day of each month,
commencing six months prior to the first principal payment date set forth on Exhibit A, an
amount equal to 1/6 of the next installment of interest and principal due on the Bond, plus the
Issuer shall pay to the Authority interest on the Bond on each April 15 and October 15 after the
Bond is issued to and including October 15, 2008. In addition to the payment of principal and
interest on the Bond, the Issuer shall be obligated to pay the Servicing Fee to the Authority. The
Servicing Fee shall be payable in the same manner and on the same dates as interest on the Bond
is due. The payment of the Servicing Fee is expressly made subordinate to the payment of the
2
principal of and interest on the Bond. The Issuer agrees that any delay in completion of the
Project beyond the Disbursement Cut Off Date shall not result in any extension of the date on
which principal and interest payments are to be made on the Bond. The Bond shall be subject to
redemption prior to maturity, shall be payable, and shall be as otherwise described in the Bond
Ordinance. Interest on the Bond shall not be excludable from gross income for federal income
tax purposes.
5. The Issuer recognizes that in the event the actual costs of the Project exceed the
amount of the Bond, the Authority and the Commission shall be under no obligation to provide
any additional funds to the Issuer. If, for any reason, the Issuer does not utilize the entire Bond
proceeds, then in such event the Principal Amount of the Bond will be reduced to the amount
actually withdrawn. Any reduction of the Bond pursuant to this provision shall result in pro rata
reductions of the remaining installments of principal so that the weighted average life of the
Bond immediately following any such reduction shall be substantially equal to the weighted
average life of the Bond immediately prior to such reduction. The Authority agrees to accept, or
cause the registered assigns of the Bond to accept, a new Bond from the Issuer reflecting the
revised payment schedule.
6. Subject to the terms and conditions and upon the basis of the representations
herein set forth, the Authority hereby agrees to purchase the Bond from the Issuer in installments
from time to time from moneys in the Revolving Loan Fund in an amount up to the Principal
Amount, and the Issuer hereby agrees to sell the Bond to the Authority at a price of one hundred
percent (100%) of the Principal Amount of the Bond purchased from time to time. The purchase
price for the Bond shall be paid in a series of advances in accordance with the provisions of
paragraph 7. The initial advance of the purchase price of the Bond shall take place at the
Closing. At the Closing, the Issuer will deliver, or cause to be delivered, to the Authority a
single typewritten bond, duly executed and authenticated, together with the other documents
herein required, and the Authority will accept delivery and make the initial advance of the
purchase price of the Bond by wire transfer of immediately available funds or by certified or
official bank cashier's check as directed by the Issuer. If the Closing and the initial advance do
not occur within 180 days from the date hereof, then the Authority's obligation to purchase the
Bond is terminated.
7. So long as the Issuer is in compliance with the terms and provisions of this
Agreement and the Bond Ordinance and the representations and warranties of the Issuer made
herein remain true and correct, the Authority agrees to make, and the Commission agrees to
approve, advances of the purchase price of the Bond ("Disbursements") from moneys in the
Revolving Loan Fund as follows:
(a) Disbursements shall only be made based upon actual work completed;
(b) The Issuer may request reimbursement for costs not more often than
monthly, provided, however, during the Project performance period requests for
reimbursement shall be limited to quarterly;
k3
(c) Disbursements shall be made for costs incurred prior to the Disbursement
Cut Off Date, and no Disbursement shall be made following the Disbursement Cut Off
Date;
(d) Disbursements shall be made for eligible work called for in the
engineering services contract and in the plans and specifications approved by the
Commission, and Bond issuance costs eligible under Title XVI of the Commission, as
now or hereafter amended ("Title XVI"); and
(e) All requests for Disbursements must be made in accordance with
Title XVI and shall be made by forwarding a completed copy of a Disbursement Request,
in the form attached as Exhibit C hereto, to the Commission's Water Resources
Development Division, along with the documentation for eligible Project Costs incurred
since the last Disbursement Request and not previously submitted.
8. [RESERVED].
9. The parties hereto acknowledge that the Authority intends to pledge the Bond to
the Trustee for the Authority's Wastewater System Revolving Loan Fund Revenue Bonds (the
"ADFA Bonds"). The Authority agrees not to make any other transfer or attempt to transfer the
Bond without the prior written consent of the Commission and without written disclosure to the
transferee that the interest on the Bond is includable in gross income for federal income tax
purposes. Upon transfer of the Bond, the Authority and the Commission may assign their rights
hereunder to the new owner of the Bond without consent of the Issuer.
10. The Issuer represents and warrants to, and agrees with the Authority and the
Commission that:
(a) The Issuer is a city of the first class, duly organized and validly existing
under the laws of the State of Arkansas, and has, and at the date of Closing will have, full
legal right, power and authority (i) to enter into this Agreement, (ii) to adopt the Bond
Ordinance and the Levying Ordinance, (iii) to issue, sell and deliver the Bond to the
Authority as provided herein, (iv) to levy the Tax and pledge the Tax Receipts, and (v) to
carry out and consummate the transactions contemplated by this Agreement, the Bond
Ordinance and the Levying Ordinance;
(b) The Issuer has complied, and will at the date of Closing be in compliance,
in all respects, with the Authorizing Legislation;
(c) By adoption of the Bond Ordinance pursuant to the Authorizing
Legislation, the Issuer has duly authorized and approved the execution and delivery of,
and the performance by the Issuer of the obligations contained in, the Bond and this
Agreement and, when delivered to and paid for by the Authority at the Closing in
accordance with the provisions of this Agreement, the Bond will have been duly
authorized, executed, issued and delivered and will constitute a valid and binding
obligation of the Issuer in accordance with its terms, in conformity with the Authorizing
Legislation, entitled to the benefit and security of the Bond Ordinance;
9
(d) The financial statements of the System delivered to the Commission and
the Authority are true and correct in all respects, have been prepared in accordance with
generally accepted governmental accounting standards for municipalities, consistently
applied, and fairly present the financial condition of the System as of their respective
dates;
(e) The execution and delivery of this Agreement and the Bond, the adoption
of the Bond Ordinance and the Levying Ordinance, the pledge of the Tax Receipts to the
Bond, and the carrying out and consummation of the transactions contemplated by this
Agreement and the Bond Ordinance will not conflict with or constitute a breach of or
default under any applicable law or administrative regulation of the State of Arkansas or
the United States or any judgment or decree or any agreement or other instrument to
which the Issuer is a party or is otherwise subject;
(f) There is no action, suit, proceeding or investigation involving the Issuer
before or by any court, public board or body pending or, to the knowledge of the Issuer,
threatened wherein an unfavorable decision, ruling or finding would: (i) affect the
creation, organization, existence or powers of the Issuer or the titles of its officials to
their offices, (ii) enjoin or restrain the issuance, sale or delivery of the Bond, the levy of
the Tax, the collection of the Tax Receipts or the pledge thereof, (iii) in any way question
or affect any of the rights, powers, duties or obligations of the Issuer with respect to the
Tax Receipts, (iv) in any way question or affect any authority for the issuance of the
Bond or the validity or enforceability of the Bond, the Bond Ordinance or the Levying
Ordinance, or (v) in any way question or affect this Agreement or the transactions
contemplated by this Agreement, or any other agreement or instrument relating thereto to
which the Issuer is a party;
(g) The Tax has been duly levied under the Authorizing Legislation and the
Levying Ordinance, and the Tax Receipts have been duly pledged to the payment of the
Bond under the Bond Ordinance pursuant to the authority granted by the Authorizing
Legislation; and
(h) The Issuer will promptly remit each Disbursement to the person or persons
to whom payment is then due and owing.
11. The Issuer covenants and agrees with the Commission:
(a) To comply with all applicable federal and State of Arkansas statutes and
regulations, including particularly, without limitation, Title XVI;
(b) To utilize and expend the proceeds of the Bond in a timely and
expeditious manner by: (1) utilizing Bond proceeds for eligible Project Costs and
approved issuance costs, (2) proceeding expeditiously with and completing the Project,
and (3) completing all facilities recommended in the approved facilities plan;
(c) To establish and maintain adequate financial records for the Project in
accordance with "generally accepted governmental accounting standards" defined as, but
not limited to, those contained in the U.S. General Accounting Office (GAO) publication
5
"Standards for Audit of Governmental Organizations, Programs, Activities and
Functions" (February 27, 1981), and make these records available to the Commission, the
EPA Inspector General, or their authorized representatives;
(d) To undertake the Project on its own responsibility and release and hold
harmless the Commission and the Authority, and their officers, members and employees,
from any claim arising in connection with the design, construction or operation of the
Project or any other aspect of the wastewater treatment works of the Issuer, including any
matter due solely to their own negligence;
(e) To comply with all terms and conditions of any construction contracts,
architectural or engineering agreements, and other agreements affecting the Project, the
premises of the wastewater treatment works of the Issuer, and its operations and to
require its construction contractor to furnish both a performance bond and payment bond
in the full amount of the construction contract for the Project;
(f) To become familiar with and comply with all federal and state laws
pertaining to equal employment opportunities ensuring that all engineers and contractors
for the Project do not discriminate against any person on the basis of race, color, religion,
sex, age, national origin or handicap;
(g) To provide complete (unaudited) financial statements and budget
information for the System to the Commission, within 30 days of a written request from
the Commission, for any year(s) during which this Agreement is in effect; and
(h) To maintain and operate the System in a sound and economical manner
and in accordance with standards as may be required or prescribed by federal, state or
local regulatory agencies.
12. The Authority and the Commission have entered into this Agreement in reliance
upon the representations and agreements of the Issuer herein and the performance by the Issuer
of its obligations hereunder, both as of the date hereof and as of the date of the Closing. The
obligations of the Authority and the Commission under this Agreement are and shall be subject
to the following further conditions:
(a) At the Closing, the Bond Ordinance and the Levying Ordinance shall be in
full force and effect and shall not have been amended, modified or supplemented after the
date hereof except as may have been agreed to by the Authority and the Commission, and
the Issuer shall have duly adopted and there shall be in full force and effect such other
ordinances and resolutions as, in the opinion of Bond Counsel and the Commission, shall
be necessary in connection with the transactions contemplated hereby.
(b) The representations and warranties of the Issuer contained herein shall be
true, complete and correct on the date hereof and on and as of the date of the Closing, as
if made on and as of the date of the Closing.
(c) At or prior to the Closing, the Commission and the Authority shall have
received the following:
6
r
(1) The Bond Ordinance and the Levying Ordinance, certified by the
Issuer under its seal as having been duly adopted and as being in full force and
effect, with only such amendments as may have been agreed to by the
Commission and the Authority;
(2) An unqualified approving opinion, dated the date of the Closing, of
Bond Counsel, in form and substance satisfactory to the Commission and the
Authority, to the effect that:
(i) the Issuer is duly created and validly existing as a city of
the first class under the laws of the State of Arkansas, with the power to
adopt the Bond Ordinance and the Levying Ordinance, perform the
agreements on its part contained in the Bond Ordinance, and issue the
Bond;
(ii) the Bond has been duly authorized and issued by the Issuer
and is a valid and binding special obligation of the Issuer enforceable in
accordance with its terms;
(iii) the Bond is secured by an irrevocable pledge of the Tax
Receipts as provided in the Bond Ordinance, which pledge is valid and
enforceable, subject to the prior pledge of such Tax Receipts to secure the
Issuer's obligations with respect to (A) its Sales and Use Tax Capital
Improvement Bonds, Series 2002, and (B) its Sales and Use Tax Capital
Improvement Bonds, Series 2004; and
(iv) the interest on the Bond is exempt from all Arkansas state,
county and municipal taxes;
(3) A supplemental opinion, dated the date of Closing, of Bond
Counsel, in form and substance satisfactory to the Commission and the Authority,
to the effect that (i) the Bond and the Bond Ordinance conform in both form and
tenor to the provisions relating thereto summarized in the Term Sheet attached to
the Memorandum of Agreement for the Project, and (ii) if the Bond were being
purchased on a tax-exempt basis, the Bond would not constitute a "private activity
bond" within the meaning of Section 141 of the Internal Revenue Code of 1986,
as amended, and covering such other matters as may be reasonably be requested
by the Authority and the Commission;
(4) A certificate dated the date of the Closing and signed by the Mayor
and City Clerk of the Issuer to the effect that: (i) the representations and
warranties of the Issuer contained herein are true and correct in all material
respects on and as of the date of the Closing as if made on the date of the Closing,
(ii) the Issuer has complied with all agreements and covenants and satisfied all
conditions on its part to be complied with or satisfied at or prior to the Closing,
and (iii) there has been no material adverse change in the business, property or
financial condition of the System and the System has not incurred any material
N
liabilities other than in the normal course of business which have not been
disclosed in writing to the Commission and the Authority since the date of the
latest financial statements submitted to the Commission and the Authority;
(5) Two counterpart originals of a transcript of all proceedings relating
to the authorization and issuance of the Bond; and
(6) Such additional legal opinions, certificates, proceedings,
instruments and other documents as the Commission, the Authority and Bond
Counsel may reasonably request to evidence compliance by the Issuer with legal
requirements, the truth and accuracy, as of the time of Closing, of the
representations of the Issuer herein contained, and the due performance or
satisfaction by the Issuer at or prior to such time of all agreements then to be
performed and all conditions then to be satisfied by the Issuer.
All of the opinions, letters, certificates, instruments and other documents mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions
hereof if, but only if, they are in form and substance satisfactory to the Commission and the
Authority. The performance of any and all obligations of the Issuer under this Agreement and
the performance of any and all conditions contained herein for the benefit of the Authority and
the Commission may be waived by the Authority and the Commission in their sole discretion.
The Issuer covenants and agrees with the Authority as follows:
(a) For purposes of this Paragraph 13, the following terms shall have the
meanings set forth below:
"Rule 15c2-12" shall mean Rule 15c2-12 adopted by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as the same
may be amended from time to time (17 C.F.R. Part 240 §240.15c2-12).
"Obligated Person" shall mean any person who is committed by contract
or other arrangement to support payments in a sum equal to ten percent (10%) or
more of the aggregate payments of the loans, including the Bond, which comprise
the Wastewater System Revolving Loan Fund administered by the Authority and
which are pledged as security for ADFA Bonds, the proceeds of which fund a
portion of the Bond.
(b) If during any fiscal year of the Authority, the outstanding obligations of
the Issuer under the terms of the Bond shall cause the Issuer to be deemed an Obligated
Person, and unless in the opinion of bond counsel for the ADFA Bonds, an exemption
from Rule 15c2-12 is then available, the Issuer shall, upon notice from the Authority,
within 120 days after the close of each fiscal year of the Authority, furnish to the
Authority (i) a copy of the latest financial statements of the Issuer (or the System if
separately audited) prepared in accordance with generally accepted government
accounting standards and audited by independent auditors (or, if not available as of such
date, the latest unaudited financial statements of the Issuer (or the System if separately
audited) and, as soon thereafter as available, the audited financial statements) and (ii)
such financial information and operating data relating to the Issuer and the System as
agreed to by the Issuer and the Authority.
(c) The Issuer shall provide to the Authority, promptly upon the occurrence
thereof, notice of any of the following events with respect to the Bond, if material:
(1) any principal or interest payment delinquency with respect to the
Bond;
(2) any non-payment related default under the Bond Ordinance, the
Bond or this Agreement;
(3) any event that would cause the Bond to be a "private activity
bond" under the Internal Revenue Code of 1986, as amended;
(4) any use of the debt service reserve to pay the principal of and
interest on the Bond when due;
(5) any defeasance of the Bond, in whole or in part; and
(6) any release, substitution or sale of property securing repayment of
the Bond.
(d) The Issuer's obligations under this Paragraph 13 shall terminate upon the
defeasance, prior redemption or payment in full of the Bond.
(e) Nothing in this Paragraph 13 shall be deemed to prevent the Issuer from
disseminating any other information, or including any other information in any notice or
report made hereunder, in addition to that which is specifically required by this Paragraph
13. If the Issuer chooses to include any information in any report or notice made
hereunder in addition to that which is specifically required by this Paragraph 13, the
Issuer shall have no obligation hereunder to update such information or include it in any
future report or notice.
(f) The reporting requirements set forth in this Agreement are in addition to
the financial reporting requirements set forth in the Bond Ordinance.
14. All notices, demands and formal actions hereunder will be in writing mailed,
telegraphed or delivered to the parties at the following addresses:
The Issuer: City of Fayetteville, Arkansas
113 West Mountain Street
Fayetteville, Arkansas 72701
Attention: Mayor
9
Arkansas Soil and Water Conservation Commission
101 E. Capitol Avenue, Suite 350
Little Rock, Arkansas 72201
Attention: Scott Savoy
The Authority: Arkansas Development Finance Authority
Little Rock, Arkansas 72201
Attention: Vice President for Finance & Administration
15. All representations, warranties, and covenants of the Issuer contained herein shall
remain operative and in full force and shall survive (a) the execution and delivery of this
Agreement, (b) any investigation made by or on behalf of the Commission or the Authority, (c)
the purchase of the Bond hereunder, and (d) any disposition of or payment for the Bond.
16. Any audit or review of plans and specifications and any inspection of the work
shall be for the Commission's convenience only in order to determine that they are within the
approved scope of the Project. No such review and inspection, approvals and disapprovals shall
be an undertaking by the Commission of responsibility for design or construction.
17. Neither the Commission nor the Authority is a partner, joint venturer, or in any
other way a party to the Project or the operation of the wastewater treatment works of the Issuer.
Neither the Commission nor the Authority shall in any way be liable or responsible by reason of
the provisions hereof to the Issuer or to any third party for the payment of any claims in
connection therewith.
18. The Authority agrees that it will invest the monthly payments made by the Issuer
until applied to the semiannual principal and interest and Servicing Fee payments due on the
Bond, and semiannually to credit interest accruing on such investments against the next six
monthly principal and interest payments due from the Issuer and to notify the Issuer in writing of
such credit.
20. This Agreement will inure to the benefit of and be binding upon the parties hereto
and their successors and will not confer any rights upon any other person. This Agreement shall
be governed by and construed in accordance with the laws of the State of Arkansas.
ARKANSAS SOIL AND WATER
CONSERVATION COMMISSION
By:_
Title:
ARKANSAS DEVELOPMENT FINANCE
AUTHORITY
By:_
Title:
ACCEPTED this day of 2005.
CITY OF FAYETTEVILLE, ARKANSAS
By:
DAN COODY, Mayor
EXHIBIT A
Amortization Schedule
Date Payment Amount Interest Servicing Fee Principal
April 15, 2009
$3,785,973.00
$650,000.00
$325,000.00
$2,810,973.00
October 15, 2009
3,785,973.00
621,890.00
310,945.00
2,853,138.00
April 15, 2010
3,785,973.00
593,359.00
296,679.00
2,895,935.00
October 15, 2010
3,785,973.00
564,400.00
282,200.00
2,939,373.00
April 15, 2011
3,785,973.00
535,006.00
267,503.00
2,983,464.00
October 15, 2011
3,785,973.00
505,171.00
252,586.00
3,028,216.00
April 15, 2012
3,785,973.00
474,889.00
237,445.00
3,073,639.00
October 15, 2012
3,785,973.00
444,153.00
222,076.00
3,119,744.00
April 15, 2013
3,785,973.00
412,955.00
206,478.00
3,166,540.00
October 15, 2013
3,785,973.00
381,290.00
190,645.00
3,214,038.00
April 15, 2014
3,785,973.00
349,149.00
174,575.00
3,262,249.00
October 15, 2014
3,785,973.00
316,527.00
158,263.00
3,311,183.00
April 15, 2015
3,785,973.00
283,415.00
141,708.00
3,360,850.00
October 15, 2015
3,785,973.00
249,807.00
124,903.00
3,411,263.00
April 15, 2016
3,785,973.00
215,694.00
107,847.00
3,462,432.00
October 15, 2016
3,785,973.00
181,070.00
90,535.00
3,514,368.00
April 15, 2017
3,785,973.00
145,926.00
72,963.00
3,567,084.00
October 15, 2017
3,785,973.00
110,255.00
55,128.00
3,620,590.00
April 15, 2018
3,785,973.00
74,049.00
37,025.00
3,674,899.00
October 15, 2018
3,785,972.00
37,300.00
18,650.00
3,730.022.00
75.719.459.00
7.146.305.00
3.573.154.00
65.000.000.00
A-1
EXHIBIT B
Uses of Funds
Issuer: City of Fayetteville, Arkansas
Loan Number: 00183-CWRLF-L
Item Costs
Planning and Design $ -0-
Administrative Fee -0-
Local Loan Expenses 30,000
Capitalized Interest -0-
Construction Costs 64,970,000
Contingency .0.
Principal Amount: $65 0 00
B-1
Project Name:
Project Number:
Employer Identification No.:
Cost Classification
Costs Incurred
to Date
RLF Eligible
Amount
Previous RLF
Disbursements
RLF Payment Due
this Request
a. Land Acquisition
Administration
b. Costs (Land)
Construction
c. Plant
Construction
d. Line work
Administration
e. Costs (Const.)
A/E Basic Fees
f. Bid Phase
A/E Basic Fees
g. Const. Phase
In. Inspection Phase
i. Start -Up Services
Project Performance
j. Fees
k. O&M Manual
I. Material Testing
Project Performance
m. Testing
n. Equipment
Allowance
o. (Planning/Design)
p. ADFA Fee
q. Legal Fees
r. Issuance Costs
s.
It.
TOTAL
I certify that to the best of my
knowledge, that this
disbursement request accurately
reflects the total RLF amount due
to date and that all costs
requested are in accordance with
the terms of the bond purchase
agreement and RLF regulations.
I further certify that all work has
been inspected and performed in
accordance with RLF program
requirements.
Requested
By
Signature of Authorized Certifying Official
Date Report Submitted
Typed or Printed Name and Title
Telephone Number
Prepared
By
Signature of Engineering Consultant
Date Signed
Typed or Printed Name and Title
Telephwe Number
Approved
By
Signature of RLF Official
Date Signed
Typed or Printed Name and Title
Telephone Number
Signature of Project Engineer
Date Signed
Typed or Printed Name and Title
Telephone Number
EXHIBIT C
• RLF-76
DISBURSEMENT REQUE (R-09/02)
Arkansas Soil and Water Conservation Commission
Revolving Loan Fund
Request Number:
Percent Complete:
C-1
d�Q
FAYETTEVILLE wztis�
THE CITY OF FAYETTEVILLE, ARKANSAS P n 5 &V
DEPARTMENTAL CORRESPONDENCE 'qxILS d S
TO: Mayor Coody and Fayetteville City Council rn
FROM: Stephen Davis, Finance & Internal Services DirectQr�i �1
DATE: June 17, 2005
SUBJECT: Bond Ordinance — Arkansas Soil and Water Conservation Commission
Recommendation
Approval of a bond ordinance authorizing the Mayor to execute a bond purchase agreement with the
Arkansas Soil and Water Conservation Commission and the Arkansas Development Finance
Authority for $65 million to be used to fund a portion of the costs associated with the Wastewater
System Improvements Project (West -side Treatment Plant and associated Lines/Lift Stations) and
authorize City Staff to prepare the required budget amendments/payments to implement the bond
purchase agreement.
Background/Discuss ion
Fayetteville citizens by public vote authorized the issuance of up -to $125 million in sales tax backed
bonds to fund the projects costs associated with the WSIP improvements. This request will utilize
the remaining voter authorization for the sales tax backed bond issues.
This bond (loan) is for $65 million and functions as a draw -down loan. The loan interest rate is 3%
fixed interest. The Bond Purchase Agreement also contains mandatory redemption requirements for
any sales taxes collected that are in excess of the scheduled payment. The City and the Arkansas
Soil and Water Conservation Commission are committing to a disbursement cut-off date of October
15, 2008. This contract provision means that the City must request or draw -down all of the funds
before October 15, 2008. Any cost for the project that is in excess of the $125 million or is after
October 15, 2008 will have to be funded from other City sources.
Budget Impact
The annual debt service cost is included in the City's Adopted Budget.
KUTAK ROCK LLP
DRAFT 06/08/05
ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT
TO EXCEED $65,000,000 OF A SALES AND USE TAX CAPITAL
IMPROVEMENT BOND, SERIES 2005, BY THE CITY OF
FAYETTEVILLE, ARKANSAS FOR THE PURPOSE OF FINANCING A
PORTION OF THE COSTS OF ACQUIRING, CONSTRUCTING AND
EQUIPPING A NEW WASTEWATER TREATMENT FACILITY AND
RELATED SEWERAGE IMPROVEMENTS; PROVIDING FOR THE
PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE SERIES
2005 BOND; AUTHORIZING THE EXECUTION AND DELIVERY OF A
BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF
THE SERIES 2005 BOND; AUTHORIZING THE EXECUTION AND
DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT; AND
PRESCRIBING OTHER MATTERS RELATING THERETO.
WHEREAS, the City Council of the City of Fayetteville, Arkansas (the "City") has
determined that there is a great need for a source of revenue to finance the costs of acquisition,
construction and equipping of a new wastewater treatment facility and related sewerage
improvements to serve the western portion of the City (the "Project"); and
WHEREAS, based on the engineering report (the "Engineering Report") of McGoodwin,
Williams and Yates, Fayetteville, Arkansas, which Engineering Report has been reviewed by the
City Council, it has been determined that the remaining costs of the Project are approximately
$ ; and
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas, including particularly Amendment 62 to the
Constitution of the State of Arkansas ("Amendment 62") and Arkansas Code Annotated (1998
Repl. & 2003 Supp.) Sections 14-164-301 et seq. (as from time to time amended, the "Local
Government Bond Act'), to issue and sell its capital improvement bonds to finance the costs of
various capital improvements such as those comprising the Project, which capital improvement
bonds may be secured by and payable from the receipts of the special city-wide sales and use tax
authorized by the Local Government Bond Act; and
WHEREAS, pursuant to the provisions of Ordinance No. 4327 of the City, adopted and
approved on August 7, 2001 (the "Election Ordinance"), there was submitted to the qualified
electors of the City the question of the issuance of not to exceed $125,000,000 in aggregate
principal amount of capital improvement bonds pursuant to Amendment 62 and the Local
Government Bond Act to finance the wastewater system improvements described in the Election
Ordinance, said bonds to be secured by a pledge of and lien upon all of the receipts of a special
city-wide sales and use tax levied at the rate of three-quarters of one percent (0.75%) pursuant to
the Local Government Bond Act (the "Sales and Use Tax"); and
4844-1449-7024.1
WHEREAS, at a special election held November 6, 2001, a majority of the qualified
electors of the City voting on the question approved the issuance of said capital improvement
bonds (and the corresponding levy of the Sales and Use Tax and the pledge of Sales and Use Tax
receipts to the payment of the capital improvement bonds); and
WHEREAS, pursuant to such authority, the City has previously issued its $25,000,000
Sales and Use Tax Capital Improvement Bonds, Series 2002 (the "Series 2002 Bonds"), and its
$35,000,000 Sales and Use Tax Capital Improvement Bonds, Series 2004 (the "Series 2004
Bonds'), in order to provide for the funding of various wastewater system improvements,
including initial portions of the Project; and
WHEREAS, the Series 2002 Bonds have been redeemed in full from receipts of the
Sales and Use Tax; and
WHEREAS, as authorized under the provisions of Amendment 62 and the Local
Government Bond Act and as approved by the qualified electors of the City, and in order to
secure funds necessary to pay the costs of engineering, planning, designing, acquiring,
constructing and equipping of the Project, and the legal costs incident to the issuance of a
revenue bond to finance the costs of said Project, upon the most favorable terms to the City and
the users of the City's wastewater system, the City has made arrangements for the sale of its
Sales and Use Tax Capital Improvement Bond, Series 2005 (the "Series 2005 Bond"), in the
principal amount of not to exceed $65,000,000 to the Arkansas Development Finance Authority,
as purchaser (the "Bondholder"), at a price of par, which Series 2005 Bond shall bear interest at
the rate of two percent (2.00%) per annum, pursuant to a Bond Purchase Agreement (the "Bond
Purchase Agreement") among the City, the Bondholder and the Arkansas Soil and Water
Conservation Commission (the "Commission"); and
WHEREAS, the City will also be required to pay to the Arkansas Development Finance
Authority, as servicer with respect to the Series 2005 Bond (the "Authority"), a semiannual
servicing fee equal to one percent (1.00%) per annum of the outstanding principal amount of the
Series 2005 Bond (the "Servicing Fee"); and
WHEREAS, the Series 2005 Bond will be issued and secured by the Sales and Use Tax
receipts on a parity basis with the Series 2004 Bonds, except that the Series 2005 Bond will not
be secured by the debt service reserve securing the Series 2004 Bonds ; and
Is
WHEREAS, a copy of the Bond Purchase Agreement has been presented to and ar
before this meeting;
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of
Fayetteville, Arkansas that:
Section 1. The Project shall be accomplished and shall be a part of the City's
wastewater system (the "System"). The accomplishment of the Project shall be under the control
and supervision of, and all details in connection therewith shall be handled by, the City, and the
City shall make all contracts and agreements necessary or incidental to the performance of its
duties and the execution of its powers. The City shall let all contracts pursuant to and in
accordance with existing laws and shall require such performance bonds and insurance from the
4844-1449-7024.1 2
contractors as will fully insure completion of the Project in accordance with the Engineering
Report so as to fully promote and protect the best interests of the City and the Bondholder.
Section 2. The sale to the Bondholder of the City's Series 2005 Bond in the
maximum principal amount of $65,000,000 at a price of par, such Series 2005 Bond to bear
interest at the rate of 2.00% per annum and to be subject to a Servicing Fee of 1.00% per annum
and otherwise to be subject to the terms and provisions hereafter in this Ordinance set forth in
detail be, and is hereby approved and the Series 2005 Bond is hereby sold to the Bondholder.
The Mayor is hereby authorized and directed to execute and deliver the Bond Purchase
Agreement on behalf of the City and to take all action required on the part of the City to fulfill its
obligations under the Bond Purchase Agreement. The Bond Purchase Agreement is hereby
approved in substantially the form submitted to this meeting with such changes as may be
approved by the Mayor, his execution to constitute complete evidence of such approval.
Section 3. The City Council hereby finds and declares that the period of usefulness of
the System after completion of the Project will be more than twenty-five (25) years, which is
longer than the term of the Series 2005 Bond.
Section 4. Under the authority of the Constitution and laws of the State of Arkansas,
including particularly Amendment 62 to the Constitution of the State of Arkansas and the Local
Government Bond Act, the City of Fayetteville, Arkansas Sales and Use Tax Capital
Improvement Bond, Series 2005 (the "Series 2005 Bond"), is hereby authorized to be issued in
the total principal amount of not to exceed Sixty -Five Million Dollars ($65,000,000), the
proceeds of the sale of which are necessary to provide sufficient funds to pay the costs of
accomplishing the Project, including, without limitation, engineering fees, legal fees and other
necessary expenses incidental to accomplishment of the Project, and to the issuance of the Series
2005 Bond.
The Series 2005 Bond shall bear interest at the rate of two percent (2.00%) per annum
and shall be subject to a Servicing Fee of one percent (1.00%) per annum based upon a 360 -day
year of twelve consecutive 30 -day months compounded semiannually. The Series 2005 Bond
shall be dated the date of its delivery to the Bondholder. Accrued interest and the Servicing Fee
only shall be payable on each April 15 and October 15, commencing October 15, 2005, to and
including October 15, 2008. Principal, interest and the Servicing Fee shall be payable on
April 15, 2009, and on each April 15 and October 15 thereafter until the unpaid principal is paid
in full as follows:
Date Payment Amount Interest Servicing Fee Principal
April 15, 2009
$3,785,973.00
$650,000.00
$325,000.00
$2,810,973.00
October 15, 2009
3,785,973.00
621,890.00
310,945.00
2,853,138.00
April 15, 2010
3,785,973.00
593,359.00
296,679.00
2,895,935.00
October 15, 2010
3,785,973.00
564,400.00
282,200.00
2,939,373.00
April 15, 2011
3,785,973.00
535,006.00
267,503.00
2,983,464.00
4844-1449-7024.1 3
Date Payment Amount Interest Servicing Fee Principal
October 15, 2011
3,785,973.00
505,171.00
252,586.00
3,028,216.00
April 15, 2012
3,785,973.00
474,889.00
237,445.00
3,073,639.00
October 15, 2012
3,785,973.00
444,153.00
222,076.00
3,119,744.00
April 15, 2013
3,785,973.00
412,955.00
206,478.00
3,166,540.00
October 15, 2013
3,785,973.00
381,290.00
190,645.00
3,214,038.00
April 15, 2014
3,785,973.00
349,149.00
174,575.00
3,262,249.00
October 15, 2014
3,785,973.00
316,527.00
158,263.00
3,311,183.00
April 15, 2015
3,785,973.00
283,415.00
141,708.00
3,360,850.00
October 15, 2015
3,785,973.00
249,807.00
124,903.00
3,41 1 ,263.00
April 15, 2016
3,785,973.00
215,694.00
107,847.00
3,462,432.00
October 15, 2016
3,785,973.00
181,070.00
90,535.00
3,514,368.00
April 15, 2017
3,785,973.00
145,926.00
72,963.00
3,567,084.00
October 15, 2017
3,785,973.00
110,255.00
55,128.00
3,620,590.00
April 15, 2018
3,785,973.00
74,049.00
37,025.00
3,674,899.00
October 15, 2018
3,785,972.00
37,300.00
18,650.00
3,730,022.00
The Series 2005 Bond shall be issued in the form of a single typewritten bond, registered
as to both principal and interest, payable to the Bondholder, or registered assigns, as set forth
hereinafter in the bond form, and shall be numbered R05-1.
Payment of principal and interest shall be by check or draft mailed by Simmons First
Trust Company, N.A., as trustee in connection with the Series 2004 Bonds (the "Trustee"), to the
Bondholder at its address shown on the registration books of the City which shall be maintained
by the City Clerk as Bond Registrar, without presentation or surrender of the Series 2005 Bond
(except upon final payment), and such payments shall discharge the obligation of the City to the
extent thereof. The [Finance and Internal Services Director] shall keep a payment record and
make proper notations thereon of all payments of principal and interest.
Payment of principal and interest shall be in any coin or currency of the United States of
America which, as at the time of payment, shall be legal tender for the payment of debts due the
United States of America. When the principal of and interest on the Series 2005 Bond has been
fully paid, it shall be delivered to the City Clerk and shall be canceled.
Section 5. The Series 2005 Bond shall be executed on behalf of the City by its Mayor
and City Clerk, and shall have impressed thereon the seal of the City. In order to pay the
principal of and interest on the Series 2005 Bond and the Servicing Fee in connection therewith,
4844-1449-7024.1 4
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there is hereby pledged all of the receipts of the Sales and Use Tax levied by the Election
Ordinance. As permitted under the Trust Indenture dated as of June 1, 2002, as amended (the
"Indenture"), securing the Series 2004 Bonds, such pledge is made on a parity basis with the
existing pledge of receipts of the Sales and Use Tax securing the payment of the Series 2004
Bonds. The levy and collection of the Sales and Use Tax shall continue until such time as the
Series 2004 Bonds and the Series 2005 Bond are no longer outstanding or sufficient funds are on
deposit with the Trustee under the Indenture to redeem the Series 2004 Bonds and the Series
2005 Bond in full. The City covenants and agrees that all receipts from the Sales and Use Tax
will be accounted for separately as special funds on the books of the City, and receipts of said
Sales and Use Tax will be deposited and will be used solely as provided herein and in the
Indenture. The Series 2005 Bond is not a general obligation of the City but is a special
obligation, the principal of and the interest on which, and the Servicing Fee in connection
therewith, are secured by a pledge of the receipts from the Sales and Use Tax. The principal of
and interest on the Series 2005 Bond shall not constitute an indebtedness of the City within the
meaning of any constitutional or statutory debt limitation or restriction.
Section 6. The Series 2005 Bond shall be in substantially the following form, and the
Mayor and City Clerk are hereby authorized and directed to make all the recitals contained
therein:
Registered United States of America Registered
No. R05-1 $65,000,000
State of Arkansas
County of Washington
City of Fayetteville, Arkansas
Sales and Use Tax Capital Improvement Bond
Series 2005
Registered Owner: ARKANSAS DEVELOPMENT FINANCE AUTHORITY
Principal Amount: SIXTY-FIVE MILLION DOLLARS
Know All Men By These Presents:
That the City of Fayetteville, Arkansas (the "City") hereby acknowledges itself to owe,
and for value received promises to pay to the order of the Arkansas Development Finance
Authority, or registered assigns, but solely from the special fund provided therefor as hereinafter
set forth, in lawful money of the United States of America, the Principal Amount shown above
(or so much of the Principal Amount as should have been advanced as shown on the Record of
Payment of Advances attached hereto), and to pay in like coin or currency interest thereon at the
rate of 2.00% per annum from the date of each advance. A servicing fee of 1.00% per annum
(the "Servicing Fee") shall also be payable by the City to the Arkansas Development Finance
Authority or its successor in the same manner and upon the same dates as interest hereon.
Interest on the unpaid balance of the total principal amount outstanding and the Servicing
Fee shall be payable on October 15, 2005, April 15, 2006, October 15, 2006, April 15, 2007,
4844-1449-7024.1 5
October 15, 2007, April 15, 2008 and October 15, 2008. Principal, interest and the Servicing Fee
shall be payable on April 15, 2009, and on each April 15 and October 15 thereafter until the
unpaid principal is paid in full as follows:
[Here will be inserted the amortization schedule
set forth in Section 4 of this Ordinance.]
Payments of principal and interest due hereon shall be made, except for final payment,
without presentation and surrender of this bond, directly to the Registered Owner at its address
shown on the registration book of the City maintained by the City Clerk as Bond Registrar, and
such payments shall fully discharge the obligation of the City to the extent of the payments so
made.
This bond is issued for the purpose of (i) providing financing for a portion of the costs of
planning, designing, acquiring, constructing and equipping of a new wastewater treatment
facility and related sewerage improvements to serve the western portion of the City (the
"Project"), and (ii) paying costs of authorizing and issuing this bond, and is issued pursuant to
and in full compliance with the Constitution and laws of the State of Arkansas, including
particularly Amendment No. 62 to the Constitution of the State of Arkansas ("Amendment 62")
and the Local Government Bond Act, codified as Arkansas Code Annotated Sections 14-164-301
et seq. (1998 Repl. & 2003 Supp.) (the "Act"), and pursuant to Ordinance No. of the
City, duly adopted and approved on the day of 2005 (the "Authorizing Ordinance").
Reference is hereby made to the Authorizing Ordinance for the details of the nature and extent of
the security and of the rights and obligations of the City and the Registered Owner of this bond.
This bond may be assigned only upon the written approval of the Arkansas Soil and
Water Conservation Commission (the "Commission"), and in order to effect such assignment,
the assignor shall promptly notify the City Clerk by registered mail, and the assignee shall
surrender this bond along with a written assignment and written approval of the Commission to
the City Clerk for transfer on the registration records. Every assignee shall take this bond subject
to all payments and prepayments of principal and interest (as reflected on the Payment Record
maintained by the [Finance and Internal Services Director]) prior to such surrender for transfer.
Following payment in full of the City's Sales and Use Tax Capital Improvement Bonds,
Series 2004 (the "Series 2004 Bonds"), the outstanding principal of this bond shall be prepaid by
the City from time to time with receipts of the Sales and Use Tax (defined below) in excess of
amounts needed to make scheduled payments of the principal, interest and Servicing Fee hereon.
Further, on and after October 15, 2014, this bond may be prepaid at the option of the City from
funds from any source, in whole but not in part, at a prepayment price equal to the principal
amount outstanding, plus accrued interest to the prepayment date. Notice of any prepayment,
whether mandatory or optional, shall be given to the registered owner of this bond at least 90
days prior to the prepayment date. Such notice shall be in writing mailed to the address of the
registered owner of this bond at the address appearing on the bond registration records
maintained by the City Clerk.
This bond does not constitute an indebtedness of the City or the State of Arkansas within
the meaning of any constitutional or statutory limitation or provision, and, except with respect to
4844-1449-7024.1 6
r
receipts generated from the Sales and Use Tax, the taxing power of the City is not pledged to the
payment of the principal of and interest on this bond.
This bond is not a general obligation of the City, but is a special limited obligation
payable solely from the receipts of a special City-wide sales and use tax levied at the rate of
three-quarters of one percent (0.75%) pursuant to the Local Government Bond Act (the "Sales
and Use Tax"). In this regard, the pledge of Sales and Use Tax receipts is made on a parity basis
with the prior pledge of such receipts securing the City's Sales and Use Tax Capital
Improvement Bonds, Series 2004 (the "Series 2004 Bonds"). Pursuant to the Trust Indenture
dated as of June 1, 2002, as amended (the "Indenture), under which the Series 2004 Bonds are
issued and secured, an amount of Sales and Use Tax receipts sufficient to pay principal and
interest on this bond as due shall be set aside monthly in a special fund created for that purpose
identified as the Bond Fund. Reference is made to the Indenture for a detailed statement of the
nature and extent of the security, and the rights and obligations of the City and registered owner
of this bond.
This bond is issued with the intent that the laws of the State of Arkansas will govern its
construction.
No recourse shall be had for the payment of the principal of or premium, if any, or
interest on this bond or for any claim based thereon or upon any obligation, covenant, or
agreement contained in this bond or in the Authorizing Ordinance against any past, present or
future alderman, officer or employee of the City, or any alderman, officer or employee of any
successor of the City, 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
this bond.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and
things required by the Constitution and statutes of the State of Arkansas to exist, happen and be
performed precedent to and in the issuance of this bond do exist, have happened and have been
performed in due time, form and manner as required by law; that the indebtedness represented by
this bond does not exceed or violate any constitutional or statutory limitation of indebtedness;
and that provision has been made for the payment of the principal of and interest on this bond, as
provided in the Authorizing Ordinance.
4844-1449-7024.1 7
•
IN WITNESS WHEREOF, the City of Fayetteville, Arkansas has caused this bond to be
executed in its name by the manual signatures of its Mayor and City Clerk, thereunto duly
authorize, and its corporate seal to be affixed hereto, all as of the day of
2005.
ATTEST:
City Clerk
CITY OF FAYETTEVILLE,
ARKANSAS
By:
Mayor
REGISTRATION CERTIFICATE
Date of Registration
Name of Registered Owner
Signature of City Clerk
Arkansas Development
Finance Authority
4844-1449-7024.1
RECORD OF PAYMENT OF ADVANCES
Signature of Vice
President of Arkansas
Total Principal Development Finance
Date of Advance* Amount of Outstanding Authority
Advance
*The date of each advance shall be the interest commencement date from which the
principal amount of such advance bears interest and from which the Servicing Fee is calculated.
Section 7. All of the terms and provisions of the Indenture, as now in effect, except
for those provisions clearly inapplicable hereto or in direct conflict herewith, including, without
limitation, those terms and provisions pertaining to the receipt, investment and handling of Sales
and Use Tax receipts, are hereby made applicable hereto and incorporated by reference as though
fully set forth herein. The effect of the foregoing sentence shall be to continue the applicable
provisions in full force and effect until the Series 2005 Bond is paid, or provision made therefor,
even after payment of the Series 2004 Bonds.
Section 8. The City shall assure that (i) not in excess of 10% of the proceeds of the
Series 2005 Bond is used for Private Business Use (as defined below) if, in addition, the payment
of more than 10% of the principal or 10% of the interest due on the Series 2005 Bond during the
term thereof are, under the terms of the Series 2005 Bond or any underlying arrangement,
directly or indirectly secured by any interest in property used or to be used for a Private Business
Use or in payments in respect of property used or to be used for a Private Business Use or are to
be derived from payments, whether or not to the City, in respect of property or borrowed moneys
used or to be used for a Private Business Use; and (ii) that, in the event that both (A) in excess of
5% of the proceeds of the Series 2005 Bond are used for a Private Business Use, and (B) an
amount in excess of 5% of the principal or 5% of the interest due on the Series 2005 Bond during
the term thereof are, under the terms of the Series 2005 Bond or any underlying arrangement,
directly or indirectly, secured by any interest in property used or to be used for said Private
Business Use or in payments in respect of property used or to be used for said Private Business
Use or are to be derived from payments, whether or not to the City, in respect of property or
4844-1449-7024.1 9
borrowed money used or to be used for said Private Business Use, then said excess over said 5%
of proceeds of the Series 2005 Bond used for a Private Business Use shall be used for a Private
Business Use related to the governmental use of the Project.
The City shall assure that not in excess of 5% of the proceeds of the Series 2005 Bond are
used, directly or indirectly, to make or finance a loan to persons other than state or local
governmental units.
As used in this Section, "Private Business Use" means use directly or indirectly in a trade
or business carried on by a natural person or in any activity carried on by a person other than a
natural person, excluding, however, use by a state or local governmental unit and use as a
member of the general public.
Section 9. Installments of principal and interest on the Series 2005 Bond shall be
prepayable prior to maturity as provided in the form of the Series 2005 Bond set forth in Section
5 of this Ordinance.
Section 10. So long as the Series 2005 Bond is outstanding, the City shall not issue or
attempt to issue any bonds or other indebtedness having or claimed to be entitled to a pledge of
the Sales and Use Tax receipts on a priority or parity basis with the lien thereon securing the
Series 2004 Bonds and the Series 2005 Bond.
Section 11. It is covenanted and agreed by the City with the Bondholder and the
Commission that it will faithfully and punctually perform all duties with reference to the System
required by the Constitution and laws of the State of Arkansas and by this Ordinance, including,
without limitation, the making and collecting of reasonable and sufficient rates lawfully
established for services rendered by the System and the segregating of System revenues.
The City covenants and agrees that the Bondholder shall have the protection of all the
provisions of the Local Government Bond Act, the Indenture and this Ordinance, and that the
City will diligently proceed to enforce those provisions to the end of the Bondholder realizing
fully upon its security. If the City shall fail to proceed within thirty (30) days after written
request shall have been filed by the Bondholder or the Commission, the Bondholder or the
Commission may proceed to enforce all such provisions.
If there be any default in the payment of the principal of or interest on the Series 2005
Bond, or if the City defaults in any Bond Fund requirement described in the Indenture or in the
performance of any of the other covenants contained in this Ordinance or in the Bond Purchase
Agreement, the Bondholder and the Commission (with respect to covenants contained in the
Bond Purchase Agreement) may, by proper suit, compel the performance of the duties of the
officials of the City under the laws of the State of Arkansas. No remedy herein conferred upon
or reserved to the Bondholder is intended to be exclusive of any other remedy or remedies herein
provided or provided by law, and every such remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or given by law. No delay or omission of the Bondholder
to exercise any right or power accrued upon any default shall impair any such right or power or
shall be construed to be a waiver of any default or an acquiescence therein; and every power and
4844-1449-7024.1 10
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remedy given by this Ordinance to the Bondholder may be exercised from time to time and as
often as may be deemed expedient.
No waiver of any default shall extend to or affect any other existing or any subsequent
default or defaults or impair any rights or remedies consequent thereon. Any costs of
enforcement of the Series 2005 Bond or of any provision of this Ordinance, including reasonable
attorney's fees, shall be paid by the City. The Bondholder may enforce all rights and exercise all
remedies available to the Bondholder in the event the Servicing Fee is not paid when due.
Section 12. When the Series 2005 Bond has been executed by the Mayor and City
Clerk and the seal of the City impressed thereon as herein provided, it shall be delivered to the
Bondholder upon the payment of all or a portion of the purchase price in accordance with the
Bond Purchase Agreement. The purchase price shall be deposited, as and when received, in a
special account of the City hereby created in a bank that is a member of the Federal Deposit
Insurance Corporation and designated the "2005 Wastewater Construction Fund" (the
"Construction Fund"). The moneys in the Construction Fund shall be used for accomplishing the
Project, paying expenses incidental thereto and paying the expenses of issuing the Series 2005
Bond approved in accordance with the Bond Purchase Agreement. Payments from the
Construction Fund shall be by check or voucher signed by the [Accounting Manager] of the City,
and drawn on the depository. Each such check or voucher shall briefly specify the purpose of the
expenditure.
When the Project has been completed and all required expenses paid and expenditures
made from the Construction Fund for and in connection with the accomplishment of the Project
and the financing thereof, this fact shall be evidenced by a certificate signed by the [Finance and
Internal Services Director] and by the consulting engineer, which certificate shall state, among
other things, the date of the completion and that all obligations payable from the Construction
Fund have been discharged. A copy of the certificate shall be filed with the depository bank, the
Bondholder and the Commission.
Disbursements shall be made by the Bondholder for costs of the Project pursuant to
written Disbursement Requests as provided in the Bond Purchase Agreement.
Section 13. The terms and provisions of this Ordinance shall constitute a binding
contract among the City, the Bondholder and the Commission, and no variation or change in the
undertaking herein set forth shall be made while the Series 2005 Bond is outstanding unless
consented to in writing by the Bondholder and the Commission.
Section 14. The City covenants and agrees that it will maintain the System in good
condition and operate it in an efficient manner and at reasonable cost. The City agrees to keep
proper records, books and accounts relating to the operation of the System, which shall be kept
separate from all other records and accounts of the City, in which complete and correct entries
shall be made of all transactions relating to the operation of the System in accordance with
generally accepted government accounting standards. Such books shall be available for
inspection by the Bondholder and the Commission, or the agent or the representative of either, at
reasonable times and under reasonable circumstances. The City agrees to have these records
4844-1449-7024.1 11
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audited annually. If requested, the City agrees to furnish the audit report with respect to the
System to the Bondholder and the Commission.
The City also agrees that it will furnish to the Bondholder and the Commission on or
before 30 days after the end of each fiscal year, if requested, a statement showing (i) total
receipts of the Sales and Use Tax during such fiscal year, (ii) the application of such receipts to
pay the principal of and interest on the Series 2004 Bonds, and (iii) the application of such
receipts to pay the principal of and the interest on the Series 2005 Bond and the Servicing Fee
with respect thereto.
Section 15. The City agrees that the Bondholder may pledge the Series 2005 Bond as
security for the payment of its wastewater system revolving loan fund revenue bonds (the
"ADFA Bonds"), and the trustee or municipal bond insurer for the ADFA Bonds may exercise
any rights or remedies available to the Bondholder under this Ordinance or the Bond Purchase
Agreement while the Series 2005 Bond is pledged and/or the ADFA Bonds are insured. In
addition, the City agrees that while the Series 2005 Bond is pledged and/or the ADFA Bonds are
insured, copies of all financial information relating to the City, the System and the Sales and Use
Tax receipts shall be furnished to the trustee and/or the municipal insurer for the ADFA Bonds.
Section 16. 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 Series 2005 Bond and to effect the execution and delivery of the Bond
Purchase Agreement, 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 17. Kutak Rock LLP, Little Rock, Arkansas, is hereby appointed to act as
Bond Counsel on behalf of the City in connection with the issuance and sale of the Series 2005
Bond.
Section 18. 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.
4844-1449-7024.1 12
Section 19. All ordinances, resolutions and parts thereof in conflict herewith are
hereby repealed to the extent of such conflict.
ADOPTED AND APPROVED THIS DAY OF 2005.
APPROVED:
Mayor
ATTEST:
City Clerk
(S E A L)
4844-1449-7024.1 13
KUTAK ROCK LLP
DRAFT 06/08/2005
BOND PURCHASE AGREEMENT
2005
City of Fayetteville, Arkansas
113 West Mountain Street
Fayetteville, Arkansas 72701
Attention: Mayor
Ladies and Gentlemen:
Certain terms used in this Bond Purchase Agreement are defined as follows:
Issuer:
Principal Amount:
Interest Rate:
Servicing Fee:
Administrative Fee:
Bond:
Bond Counsel:
City of Fayetteville, Arkansas
$65,000,000 (See E
2.00% per annum
amount of the Bond
1.00% per annum
amount of the Bond
$ -0-
thibi
of
(see
of
(see
t B)
the outstanding principal
Exhibit A)
the outstanding principal
Exhibit A)
City of Fayetteville, Arkansas Sales and Use Tax
Improvement Bond, Series 2005
Kutak Rock LLP
Bond Ordinance: Ordinance No. of the Issuer, adopted on
2005, under which the Bond is
to be issued and secured
Security: Receipts of the Issuer's 0.75% Sales and Use Tax
(the "Tax") levied pursuant to Ordinance No. 4327
of the Issuer (the "Levying Ordinance"), adopted on
August 7, 2001, and approved by the registered
voters of the Issuer at a special election held on
November 6, 2001
Closing:
Disbursement Cut Off Date:
10:00 a.m., prevailing local time, on
2005, or at such other time or on such later date as
is mutually agreed upon, at the offices of Bond
Counsel in Little Rock, Arkansas
October 15, 2008
4828-7944-0640.4
Authorizing
Legislation: Amendment 62 to the Constitution of the State of
Arkansas and the Local Government Bond Act of
1985, as amended (A.C.A. § 14-164-301 et seq.)
The Arkansas Soil and Water Conservation Commission (the "Commission") and the
Arkansas Development Finance Authority (the "Authority") hereby offer to enter into this Bond
Purchase Agreement (the "Agreement") with you (the "Issuer") for the purchase by the
Authority from moneys in the Construction Assistance Revolving Loan Fund, created by
Arkansas Code Annotated Section 15-5-901 et seq., as the same may be amended from time to
time (the "Revolving Loan Fund"), and the sale by you of the Bond of the Issuer more
particularly described below. Upon approval by you and by the execution of the acceptance
hereof by the Mayor of the Issuer, this Agreement shall be in full force and effect in accordance
with its terms and shall be valid, binding and enforceable upon the Issuer, the Commission and
the Authority.
Further terms of this Agreement are:
1. Upon the terms and conditions and upon the basis of the representations herein set
forth, the Authority hereby agrees to purchase from the Issuer and the Issuer hereby agrees to sell
to the Authority the entire Principal Amount of the Bond to be issued under and secured by the
Bond Ordinance.
2. The Bond is being issued for the purpose of financing the construction of
improvements to the treatment facilities of the Issuer's wastewater system (the "System") as
described in the facilities plan furnished by the Issuer to and concurred with by the Commission
(the "Project"), paying costs incidental thereto, and paying approved expenses incurred in
connection with the issuance of the Bond as set forth in Exhibit B hereto.
3. The Bond and Servicing Fee shall be secured by a pledge of and payable from
receipts of the Tax (the "Tax Receipts"), subject to a pledge in favor of certain outstanding bonds
identified in the Bond Ordinance. The Tax has been levied and is being collected pursuant to the
Levying Ordinance.
4. The Bond shall be dated the date of the Closing. The Bond shall be authorized in
an amount up to the Principal Amount identified above, and shall bear interest at the Interest
Rate identified above. Principal and interest shall be amortized in accordance with the schedule
set forth on Exhibit A attached hereto (which is based upon semiannual repayment of principal
and interest commencing six months following the Disbursement Cut Off Date and a 10 -year
amortization), and the Issuer shall pay to the Authority on the first business day of each month,
commencing six months prior to the first principal payment date set forth on Exhibit A, an
amount equal to 1/6 of the next installment of interest and principal due on the Bond, plus the
Issuer shall pay to the Authority interest on the Bond on each April 15 and October 15 after the
Bond is issued to and including October 15, 2008. In addition to the payment of principal and
interest on the Bond, the Issuer shall be obligated to pay the Servicing Fee to the Authority. The
Servicing Fee shall be payable in the same manner and on the same dates as interest on the Bond
is due. The payment of the Servicing Fee is expressly made subordinate to the payment of the
4828-7944-0640.4 2
principal of and interest on the Bond. The Issuer agrees that any delay in completion of the
Project beyond the Disbursement Cut Off Date shall not result in any extension of the date on
which principal and interest payments are to be made on the Bond. The Bond shall be subject to
redemption prior to maturity, shall be payable, and shall be as otherwise described in the Bond
Ordinance. Interest on the Bond shall not be excludable from gross income for federal income
tax purposes.
5. The Issuer recognizes that in the event the actual costs of the Project exceed the
amount of the Bond, the Authority and the Commission shall be under no obligation to provide
any additional funds to the Issuer. If, for any reason, the Issuer does not utilize the entire Bond
proceeds, then in such event the Principal Amount of the Bond will be reduced to the amount
actually withdrawn. Any reduction of the Bond pursuant to this provision shall result in pro rata
reductions of the remaining installments of principal so that the weighted average life of the
Bond immediately following any such reduction shall be substantially equal to the weighted
average life of the Bond immediately prior to such reduction. The Authority agrees to accept, or
cause the registered assigns of the Bond to accept, a new Bond from the Issuer reflecting the
revised payment schedule.
6. Subject to the terms and conditions and upon the basis of the representations
herein set forth, the Authority hereby agrees to purchase the Bond from the Issuer in installments
from time to time from moneys in the Revolving Loan Fund in an amount up to the Principal
Amount, and the Issuer hereby agrees to sell the Bond to the Authority at a price of one hundred
percent (100%) of the Principal Amount of the Bond purchased from time to time. The purchase
price for the Bond shall be paid in a series of advances in accordance with the provisions of
paragraph 7. The initial advance of the purchase price of the Bond shall take place at the
Closing. At the Closing, the Issuer will deliver, or cause to be delivered, to the Authority a
single typewritten bond, duly executed and authenticated, together with the other documents
herein required, and the Authority will accept delivery and make the initial advance of the
purchase price of the Bond by wire transfer of immediately available funds or by certified or
official bank cashier's check as directed by the Issuer. If the Closing and the initial advance do
not occur within 180 days from the date hereof, then the Authority's obligation to purchase the
Bond is terminated.
7. So long as the Issuer is in compliance with the terms and provisions of this
Agreement and the Bond Ordinance and the representations and warranties of the Issuer made
herein remain true and correct, the Authority agrees to make, and the Commission agrees to
approve, advances of the purchase price of the Bond ("Disbursements") from moneys in the
Revolving Loan Fund as follows:
(a) Disbursements shall only be made based upon actual work completed;
(b) The Issuer may request reimbursement for costs not more often than
monthly, provided, however, during the Project performance period requests for
reimbursement shall be limited to quarterly;
4828-79440640.4 3
(c) Disbursements shall be made for costs incurred prior to the Disbursement
Cut Off Date, and no Disbursement shall be made following the Disbursement Cut Off
Date;
(d) Disbursements shall be made for eligible work called for in the
engineering services contract and in the plans and specifications approved by the
Commission, and Bond issuance costs eligible under Title XVI of the Commission, as
now or hereafter amended ("Title XVI"); and
(e) All requests for Disbursements must be made in accordance with
Title XVI and shall be made by forwarding a completed copy of a Disbursement Request,
in the form attached as Exhibit C hereto, to the Commission's Water Resources
Development Division, along with the documentation for eligible Project Costs incurred
since the last Disbursement Request and not previously submitted.
8. [RESERVED].
9. The parties hereto acknowledge that the Authority intends to pledge the Bond to
the Trustee for the Authority's Wastewater System Revolving Loan Fund Revenue Bonds (the
"ADFA Bonds"). The Authority agrees not to make any other transfer or attempt to transfer the
Bond without the prior written consent of the Commission and without written disclosure to the
transferee that the interest on the Bond is includable in gross income for federal income tax
purposes. Upon transfer of the Bond, the Authority and the Commission may assign their rights
hereunder to the new owner of the Bond without consent of the Issuer.
10. The Issuer represents and warrants to, and agrees with the Authority and the
Commission that:
(a) The Issuer is a city of the first class, duly organized and validly existing
under the laws of the State of Arkansas, and has, and at the date of Closing will have, full
legal right, power and authority (i) to enter into this Agreement, (ii) to adopt the Bond
Ordinance and the Levying Ordinance, (iii) to issue, sell and deliver the Bond to the
Authority as provided herein, (iv) to levy the Tax and pledge the Tax Receipts, and (v) to
carry out and consummate the transactions contemplated by this Agreement, the Bond
Ordinance and the Levying Ordinance;
(b) The Issuer has complied, and will at the date of Closing be in compliance,
in all respects, with the Authorizing Legislation;
(c) By adoption of the Bond Ordinance pursuant to the Authorizing
Legislation, the Issuer has duly authorized and approved the execution and delivery of,
and the performance by the Issuer of the obligations contained in, the Bond and this
Agreement and, when delivered to and paid for by the Authority at the Closing in
accordance with the provisions of this Agreement, the Bond will have been duly
authorized, executed, issued and delivered and will constitute a valid and binding
obligation of the Issuer in accordance with its terms, in conformity with the Authorizing
Legislation, entitled to the benefit and security of the Bond Ordinance;
4828-7944-0640.4 4
(d) The financial statements of the System delivered to the Commission and
the Authority are true and correct in all respects, have been prepared in accordance with
generally accepted governmental accounting standards for municipalities, consistently
applied, and fairly present the financial condition of the System as of their respective
dates;
(e) The execution and delivery of this Agreement and the Bond, the adoption
of the Bond Ordinance and the Levying Ordinance, the pledge of the Tax Receipts to the
Bond, and the carrying out and consummation of the transactions contemplated by this
Agreement and the Bond Ordinance will not conflict with or constitute a breach of or
default under any applicable law or administrative regulation of the State of Arkansas or
the United States or any judgment or decree or any agreement or other instrument to
which the Issuer is a party or is otherwise subject;
(f) There is no action, suit, proceeding or investigation involving the Issuer
before or by any court, public board or body pending or, to the knowledge of the Issuer,
threatened wherein an unfavorable decision, ruling or finding would: (i) affect the
creation, organization, existence or powers of the Issuer or the titles of its officials to
their offices, (ii) enjoin or restrain the issuance, sale or delivery of the Bond, the levy of
the Tax, the collection of the Tax Receipts or the pledge thereof, (iii) in any way question
or affect any of the rights, powers, duties or obligations of the Issuer with respect to the
Tax Receipts, (iv) in any way question or affect any authority for the issuance of the
Bond or the validity or enforceability of the Bond, the Bond Ordinance or the Levying
Ordinance, or (v) in any way question or affect this Agreement or the transactions
contemplated by this Agreement, or any other agreement or instrument relating thereto to
which the Issuer is a party;
(g) The Tax has been duly levied under the Authorizing Legislation and the
Levying Ordinance, and the Tax Receipts have been duly pledged to the payment of the
Bond under the Bond Ordinance pursuant to the authority granted by the Authorizing
Legislation; and
(h) The Issuer will promptly remit each Disbursement to the person or persons
to whom payment is then due and owing.
11. The Issuer covenants and agrees with the Commission:
(a) To comply with all applicable federal and State of Arkansas statutes and
regulations, including particularly, without limitation, Title XVI;
(b) To utilize and expend the proceeds of the Bond in a timely and
expeditious manner by: (1) utilizing Bond proceeds for eligible Project Costs and
approved issuance costs, (2) proceeding expeditiously with and completing the Project,
and (3) completing all facilities recommended in the approved facilities plan;
(c) To establish and maintain adequate financial records for the Project in
accordance with "generally accepted governmental accounting standards" defined as, but
not limited to, those contained in the U.S. General Accounting Office (GAO) publication
as2s-79aa-0640A 5
"Standards for Audit of Governmental Organizations, Programs, Activities and
Functions" (February 27, 1981), and make these records available to the Commission, the
EPA Inspector General, or their authorized representatives;
(d) To undertake the Project on its own responsibility and release and hold
harmless the Commission and the Authority, and their officers, members and employees,
from any claim arising in connection with the design, construction or operation of the
Project or any other aspect of the wastewater treatment works of the Issuer, including any
matter due solely to their own negligence;
(e) To comply with all terms and conditions of any construction contracts,
architectural or engineering agreements, and other agreements affecting the Project, the
premises of the wastewater treatment works of the Issuer, and its operations and to
require its construction contractor to furnish both a performance bond and payment bond
in the full amount of the construction contract for the Project;
(f) To become familiar with and comply with all federal and state laws
pertaining to equal employment opportunities ensuring that all engineers and contractors
for the Project do not discriminate against any person on the basis of race, color, religion,
sex, age, national origin or handicap;
(g) To provide complete (unaudited) financial statements and budget
information for the System to the Commission, within 30 days of a written request from
the Commission, for any year(s) during which this Agreement is in effect; and
(h) To maintain and operate the System in a sound and economical manner
and in accordance with standards as may be required or prescribed by federal, state or
local regulatory agencies.
12. The Authority and the Commission have entered into this Agreement in reliance
upon the representations and agreements of the Issuer herein and the performance by the Issuer
of its obligations hereunder, both as of the date hereof and as of the date of the Closing. The
obligations of the Authority and the Commission under this Agreement are and shall be subject
to the following further conditions:
(a) At the Closing, the Bond Ordinance and the Levying Ordinance shall be in
full force and effect and shall not have been amended, modified or supplemented after the
date hereof except as may have been agreed to by the Authority and the Commission, and
the Issuer shall have duly adopted and there shall be in full force and effect such other
ordinances and resolutions as, in the opinion of Bond Counsel and the Commission, shall
be necessary in connection with the transactions contemplated hereby.
(b) The representations and warranties of the Issuer contained herein shall be
true, complete and correct on the date hereof and on and as of the date of the Closing, as
if made on and as of the date of the Closing.
(c) At or prior to the Closing, the Commission and the Authority shall have
received the following:
4828-7944-0640.4 6
(1) The Bond Ordinance and the Levying Ordinance, certified by the
Issuer under its seal as having been duly adopted and as being in full force and
effect, with only such amendments as may have been agreed to by the
Commission and the Authority;
(2) An unqualified approving opinion, dated the date of the Closing, of
Bond Counsel, in form and substance satisfactory to the Commission and the
Authority, to the effect that:
(i) the Issuer is duly created and validly existing as a city of
the first class under the laws of the State of Arkansas, with the power to
adopt the Bond Ordinance and the Levying Ordinance, perform the
agreements on its part contained in the Bond Ordinance, and issue the
Bond;
(ii) the Bond has been duly authorized and issued by the Issuer
and is a valid and binding special obligation of the Issuer enforceable in
accordance with its terms;
(iii) the Bond is secured by an irrevocable pledge of the Tax
Receipts as provided in the Bond Ordinance, which pledge is valid and
enforceable, subject to the prior pledge of such Tax Receipts to secure the
Issuer's obligations with respect to (A) its Sales and Use Tax Capital
Improvement Bonds, Series 2002, and (B) its Sales and Use Tax Capital
Improvement Bonds, Series 2004; and
(iv) the interest on the Bond is exempt from all Arkansas state,
county and municipal taxes;
(3) A supplemental opinion, dated the date of Closing, of Bond
Counsel, in form and substance satisfactory to the Commission and the Authority,
to the effect that (i) the Bond and the Bond Ordinance conform in both form and
tenor to the provisions relating thereto summarized in the Term Sheet attached to
the Memorandum of Agreement for the Project, and (ii) if the Bond were being
purchased on a tax-exempt basis, the Bond would not constitute a "private activity
bond" within the meaning of Section 141 of the Internal Revenue Code of 1986,
as amended, and covering such other matters as may be reasonably be requested
by the Authority and the Commission;
(4) A certificate dated the date of the Closing and signed by the Mayor
and City Clerk of the Issuer to the effect that: (i) the representations and
warranties of the Issuer contained herein are true and correct in all material
respects on and as of the date of the Closing as if made on the date of the Closing,
(ii) the Issuer has complied with all agreements and covenants and satisfied all
conditions on its part to be complied with or satisfied at or prior to the Closing,
and (iii) there has been no material adverse change in the business, property or
financial condition of the System and the System has not incurred any material
4828-7944-0640.4 7
liabilities other than in the normal course of business which have not been
disclosed in writing to the Commission and the Authority since the date of the
latest financial statements submitted to the Commission and the Authority;
(5) Two
counterpart
originals of a
transcript of all proceedings relating
to the authorization
and issuance of the Bond;
and
(6) Such additional legal opinions, certificates, proceedings,
instruments and other documents as the Commission, the Authority and Bond
Counsel may reasonably request to evidence compliance by the Issuer with legal
requirements, the truth and accuracy, as of the time of Closing, of the
representations of the Issuer herein contained, and the due performance or
satisfaction by the Issuer at or prior to such time of all agreements then to be
performed and all conditions then to be satisfied by the Issuer.
All of the opinions, letters, certificates, instruments and other documents mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions
hereof if, but only if, they are in form and substance satisfactory to the Commission and the
Authority. The performance of any and all obligations of the Issuer under this Agreement and
the performance of any and all conditions contained herein for the benefit of the Authority and
the Commission may be waived by the Authority and the Commission in their sole discretion.
13. The Issuer covenants and agrees with the Authority as follows:
(a)
For
purposes
of this Paragraph
13, the following terms shall have the
meanings set
forth
below:
"Rule 15c2-12" shall mean Rule 15c2-12 adopted by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as the same
may be amended from time to time (17 C.F.R. Part 240 §240.15c2-12).
"Obligated Person" shall mean any person who is committed by contract
or other arrangement to support payments in a sum equal to ten percent (10%) or
more of the aggregate payments of the loans, including the Bond, which comprise
the Wastewater System Revolving Loan Fund administered by the Authority and
which are pledged as security for ADFA Bonds, the proceeds of which fund a
portion of the Bond.
(b) if during any fiscal year of the Authority, the outstanding obligations of
the Issuer under the terms of the Bond shall cause the Issuer to be deemed an Obligated
Person, and unless in the opinion of bond counsel for the ADFA Bonds, an exemption
from Rule 15c2-12 is then available, the Issuer shall, upon notice from the Authority,
within 120 days after the close of each fiscal year of the Authority, furnish to the
Authority (i) a copy of the latest financial statements of the Issuer (or the System if
separately audited) prepared in accordance with generally accepted government
accounting standards and audited by independent auditors (or, if not available as of such
date, the latest unaudited financial statements of the Issuer (or the System if separately
audited) and, as soon thereafter as available, the audited financial statements) and (ii)
4828-7944-0640.4 8
such financial information and operating data relating to the Issuer and the System as
agreed to by the Issuer and the Authority.
(c) The Issuer shall provide to the Authority, promptly upon the occurrence
thereof, notice of any of the following events with respect to the Bond, if material:
(1) any principal or interest payment delinquency with respect to the
Bond;
(2) any non-payment related default under the Bond Ordinance, the
Bond or this Agreement;
(3) any event that would cause the Bond to be a "private activity
bond" under the Internal Revenue Code of 1986, as amended;
(4) any use of the debt service reserve to pay the principal of and
interest on the Bond when due;
(5) any defeasance of the Bond, in whole or in part; and
(6) any release, substitution or sale of property securing repayment of
the Bond.
(d) The Issuer's obligations under this Paragraph 13 shall terminate upon the
defeasance, prior redemption or payment in full of the Bond.
(e) Nothing in this Paragraph 13 shall be deemed to prevent the Issuer from
disseminating any other information, or including any other information in any notice or
report made hereunder, in addition to that which is specifically required by this Paragraph
13. If the Issuer chooses to include any information in any report or notice made
hereunder in addition to that which is specifically required by this Paragraph 13, the
Issuer shall have no obligation hereunder to update such information or include it in any
future report or notice.
(f) The reporting requirements set forth in this Agreement are in addition to
the financial reporting requirements set forth in the Bond Ordinance.
14. All notices, demands and formal actions hereunder will be in writing mailed,
telegraphed or delivered to the parties at the following addresses:
The Issuer: City of Fayetteville, Arkansas
113 West Mountain Street
Fayetteville, Arkansas 72701
Attention: Mayor
4828-7944-0640.4 9
11
The Commission: Arkansas Soil and Water Conservation Commission
101 E. Capitol Avenue, Suite 350
Little Rock, Arkansas 72201
Attention: Scott Savoy
The Authority: Arkansas Development Finance Authority
423 Main Street
Little Rock, Arkansas 72201
Attention: Vice President for Finance & Administration
15. All representations, warranties, and covenants of the Issuer contained herein shall
remain operative and in full force and shall survive (a) the execution and delivery of this
Agreement, (b) any investigation made by or on behalf of the Commission or the Authority, (c)
the purchase of the Bond hereunder, and (d) any disposition of or payment for the Bond.
16. Any audit or review of plans and specifications and any inspection of the work
shall be for the Commission's convenience only in order to determine that they are within the
approved scope of the Project. No such review and inspection, approvals and disapprovals shall
be an undertaking by the Commission of responsibility for design or construction.
17. Neither the Commission nor the Authority is a partner, joint venturer, or in any
other way a party to the Project or the operation of the wastewater treatment works of the Issuer.
Neither the Commission nor the Authority shall in any way be liable or responsible by reason of
the provisions hereof to the Issuer or to any third party for the payment of any claims in
connection therewith.
18. The Authority agrees that it will invest the monthly payments made by the Issuer
until applied to the semiannual principal and interest and Servicing Fee payments due on the
Bond, and semiannually to credit interest accruing on such investments against the next six
monthly principal and interest payments due from the Issuer and to notify the Issuer in writing of
such credit.
19. This Agreement may be executed in any number of counterparts with each
executed counterpart constituting an original but all of which together shall constitute one and
the same instrument.
4828-7944-0640.4 10
r 0
20. This Agreement will inure to the benefit of and be binding upon the parties hereto
and their successors and will not confer any rights upon any other person. This Agreement shall
be governed by and construed in accordance with the laws of the State of Arkansas.
ARKANSAS SOIL AND WATER
CONSERVATION COMMISSION
By:_
Title:
ARKANSAS DEVELOPMENT FINANCE
AUTHORITY
Title:
ACCEPTED this day of 2005.
CITY OF FAYETTEVILLE, ARKANSAS
Mayor
4828-7944-0640.4
•
EXHIBIT A
Amortization Schedule
Date Payment Amount Interest Servicing Fee Principal
April 15, 2009
$3,785,973.00
$650,000.00
$325,000.00
$2,810,973.00
October 15, 2009
3,785,973.00
621,890.00
310,945.00
2,853,138.00
April 15, 2010
3,785,973.00
593,359.00
296,679.00
2,895,935.00
October 15, 2010
3,785,973.00
564,400.00
282,200.00
2,939,373.00
April 15, 2011
3,785,973.00
535,006.00
267,503.00
2,983,464.00
October 15, 2011
3,785,973.00
505,171.00
252,586.00
3,028,216.00
April 15, 2012
3,785,973.00
474,889.00
237,445.00
3,073,639.00
October 15, 2012
3,785,973.00
444,153.00
222,076.00
3,119,744.00
April 15, 2013
3,785,973.00
412,955.00
206,478.00
3,166,540.00
October 15, 2013
3,785,973.00
381,290.00
190,645.00
3,214,038.00
April 15, 2014
3,785,973.00
349,149.00
174,575.00
3,262,249.00
October 15, 2014
3,785,973.00
316,527.00
158,263.00
3,311,183.00
April 15, 2015
3,785,973.00
283,415.00
141,708.00
3,360,850.00
October 15, 2015
3,785,973.00
249,807.00
124,903.00
3,411,263.00
April 15, 2016
3,785,973.00
215,694.00
107,847.00
3,462,432.00
October 15, 2016
3,785,973.00
181,070.00
90,535.00
3,514,368.00
April 15, 2017
3,785,973.00
145,926.00
72,963.00
3,567,084.00
October 15, 2017
3,785,973.00
110,255.00
55,128.00
3,620,590.00
April 15, 2018
3,785,973.00
74,049.00
37,025.00
3,674,899.00
October 15, 2018
3,785,972.00
37,300.00
18,650.00
3,730,022.00
$75.719.459.00 7.146.305.00 $3.573.154.00 65.000.000.00
4828-7944-0640.4 A-1
EXHIBIT B
Uses of Funds
Issuer: City of Fayetteville, Arkansas
Loan Number: 00183-CWRLF-L
Item
Planning and Design
Administrative Fee
Local Loan Expenses
Capitalized Interest
Construction Costs
Contingency
Principal Amount:
Costs
$ -0-
-0-
30,000
-0-
64,970,000
-0-
4828-7944-0640.4 B-1
EXHIBIT C
RLF-76
DISBURSEMENT REQUEST (R-09/02)
Arkansas Soil and Water Conservation Commission
Revolving Loan Fund
Project Name: Request Number:
Project Number: Percent Complete:
Employer Identification No.:
Cost Classification
Costs Incurred
to Date
RLF Eligible
Amount
Previous RLF
Disbursements
RLF Payment Due
this Request
a. Land Acquisition
Administration
b. Costs (Land)
Construction —
c. Plant
Construction —
d. Line work
Administration
e. Costs (Const.)
A/E Basic Fees
f. Bid Phase
A/E Basic Fees
g. Const. Phase
h. Inspection Phase
i. Start -Up Services
Project Performance
j. Fees
k. O&M Manual
I. Material Testing
Project Performance
m. Testing
n. Equipment
Allowance
o. (Planning/Design)
p. ADFA Fee
q. Legal Fees
r. Issuance Costs
S.
t.
TOTAL
I certify that to the best of my
knowledge, that this
disbursement request accurately
reflects the total RLF amount due
to date and that all costs
requested are in accordance with
the terms of the bond purchase
agreement and RLF regulations.
I further certify that all work has
been inspected and performed in
accordance with RLF program
requirements.
Requested
By
Signature of Authorized Certifying Official
Date Report Submitted
Typed or Printed Name and Title
Telephone Number
Prepared
By
Signature of Engineering Consultant
Date Signed
Typed or Printed Name and Title
Telephone Number
Approved
Signature of RLF Official
Date Signed
Typed or Printed Name and Title
Telephone Number
4828-7944-0640.4 C -f
• City of Fayetteville •
Staff Review Form
City Council Agenda Items
or
Contracts
5 -Jul -05
City Council Meeting Date
Stephen Davis FIS Director
Submitted By Division
Action Required
Finance & Internal Services
Department
Approval of a bond ordinance authorizing the Mayor to execute a bond purchase agreement with the Arkansas Soil
and Water Conservation Commission and the Arkansas Development Finance Authority for $65 million to be used to
fund a portion of the costs associated with the Wastewater System Improvements Project (West-sideTreatment Plant
and associated Lines/Lift Stations) and authorize City Staff to prepare the required budget amendments/payments to
implement the bond purchase agreement.
ebt Service Funded By a Dedicated
3/4% Sales & Use Tax
Cost of this request
Account Number
Project Number
Budgeted Item XX
Category/Project Budget
Funds Used to Date
Remaining Balance
Budget Adjustment Attached
D&partment Director Date
City Attorney
Received in City Clerk's Office a�7
lance and Internal Service Director Date
Received in Mayor's Office ENTERED
Mayor Date
WSIP
Program Category / Project Name
F= --d
Program / Project Category Name
Wastewater Construction Improvement
Fund Name
Previous Ordinance or Resolution #
Original Contract Date:
Original Contract Number:
4624, 4389 &
4327
From: Clarice Pearman
To: Davis, Steve
Date: 7/12/05 2:54PM
Subject: Ord. 4718
Steve,
Attached is a copy of the ordinance passsed by City Council, July 5, 2005 regarding the Sale and Use Tax
CIP Bond. I will be forwarding to you an original to give to bond counsel for the bond book.
Thanks.
Clarice
CC: Deaton. Vicki
From: Clarice Pearman
To: Davis, Steve
Date: 7/12/05 3:28PM
Subject: Ord. 4718
Steve,
Attached is a copy of the ordinance passed by City Council, July 5, 2005. 1 had two originals of the
ordinance to attached to our file and for the bond counsel to include in bond book.
I was noticing though that there was some blanks. Are they going to fill these in or they sending an
original? Let me know. I'll hold up on publishing until I here from you.
Thanks. Clarice
From: Steve Davis
To: Pearman, Clarice
Date: 7/12/05 7:33PM
Subject: Fwd: RE: Ord. 4718
>>> "Wilbourn, Gordon M." <Gordon.Wilbourn@KutakRock.com> 07/12/05 04:18PM >>>
Thanks Steve. The blanks noted by Clarice are in the bond form and
should not be completed prior to publication of the ordinance.
-----Original Message -----
From: Steve Davisfmailto:sdavis(o)ci.favetteville.ar.usl
Sent: Tuesday, July 12, 2005 4:12 PM
To: Wilbourn, Gordon M.
Subject: Fwd: Ord. 4718
>>> Clarice Pearman 07/12/05 03:28PM >>>
Steve,
Attached is a copy of the ordinance passed by City Council, July 5,
2005. 1 had two originals of the ordinance to attached to our file and
for the bond counsel to include in bond book.
I was noticing though that there was some blanks. Are they going tc
fill these in or they sending an original? Let me know. I'll hold up
on publishing until I here from you.
Thanks. Clarice
ANY FEDERAL TAX ADVICE CONTAINED• • NOT BE USED OR
REFERRED TO IN THE PROMOTING, MARKETING OR
RECOMMENDING OF ANY PLAN OR ARRANGEMENT,•IS SUCH
-
ADVICE • OR WRITTEN TO BE USED, AND
INTERNAL REVENUE CODE.
sff Lt
This E-mail message is confidential, intendedoabove
information
message in error, please notify- •- 402-346-6000 and•_ --message.
iij
"NorduvestAriCaos"'most Widely Read Ne,"Paper"
AFFIDAVIT OF PUBLICATION
I, Erin Emis. 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: $ 1(0
Subscribed and sworn to before me this
day o 2005.
Notary Public Sharlene D. Williams
Notary Public
My Commission Expires: State of Arkansas
__ —WGeremission Expires
October 18, 2014
** Please do not pay from Affidavit.
An invoice will be sent.
RECEIVED
JUL 2 9 2005
CITY OF FAYET-II EVILLE
CITY CLERK'S OFFICE
P.O. BOX 1607 • 212 N. EAST AVENUE • FAYETTEVILLE, ARKANSAS 72701 • 479-571-6470
NORTHWEST ARKANSAS TIMES
410)INIINGB NO. {T1B
AN ORDINANCE BKCEERING THE ISSUANCE
ALES aYe 'Lle
AALE OF NOT TO APITAL IM ROVEM OF A SALESAND USE TAX y THEL IITY O FAYETENT DONE,
SERIES 2X)5, RY THE PO OF FAVERENLLE,
ARKANSPORTHON FOR THE PURPOSE OF IRING, CO - A
STR CTI OF THE COSTS OF ACQUIRING, CON-
STRUCTING AND EQUIPPING A NEW WASTEWATER
OF THE
EM FAGLIO AND RELATED SEWERAGE IMPROVEMENTS; PROVIDING FOR THE PAYMENT
OF THE PRINCILIVERY OF OF AND INTEREST ON THE SERIES PRO BOND; OR THE SAL THE HE SERIES
AND DELIVERY AUTHORIZING A BOND PURCHASE AGREEMENT ELIVER O FOR THE SALEG THE SERIES
AGR BOND; NDPRESCRI THE OTHER
ION AND DELIVERY OF A CONTINUING DISCLOSURE
AGREEMENT, AND PRESCRI&NG OTHER MATTERS RELATING THERETO''
MINENEAS♦ the City Caundl of the City of Fayetteville, Arkansas (tile •City'[ has detuttrh(E }Nat there is
e item need for a Sauce of revenue to fuwnce the IXSts of acquisition, corstructbn and egWppirF,p v, a
r1eW N5vrtaxytgr trltatnlBrlt fBfOh and related sewarage inprWBnpnts to 5BRB 1118 xR5Iart1 pptbl of file
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'. •. 1.I 10 S550.000.00 3:••:11• $2,1310.9 11
actober 15,2009 3,785,973.00 621.890.00 .
• 15,2010 1. • < t • 1 M.679.002,895.M5.00
• •Af fly_. •I:••- •' I•••�:••'•• >• :• • :. •`
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By:
DAN GOODY, ••Wl•••
ATTEST:
Bye
SONDRA SMRN♦ Chy Clark
CpR�Y OF PAAYETTE RI&S.
REGISTRATION CERTIFICATE
Date of Registration
Nome of Registered Darner
Signature of City Clerk 1
"
AAamo plvrlolmee
' Fi®lo Awhwiry
.
i
RECORD OF PAYMENT OF ADVANCES
Date of Advance*
Amount of
Advance
Tow Prind Pv
Outstanding"
Slpsture of Vita I
President ofArtamme .
1 Development Finance 1
Authority 1
� 15, 2012
3,785,973.00
444,153.00
222.075.= -
3,119,744.00
15.2013
3,765,973.00
412,955.00
206.478.00
3,166,540.00
"15,2013
3,785,973.00
391,290.00
190,645.00
3,214,038.00
15,2014
3,785,973.00
349.149.00
174,575.90
3,262,249.00
0&15, 2014
3,785,973.00
316,527.00
158,263.80
3,311,183.00
15, 2015
3.785,973.00
283,415-00
141,708.00
3.368850.00
Der 15, 2015
3,785,973.00
249,807.00
124,903.00
3,411,263.00
15, 2016
3,785,973.00
215,694.00
107,847.00
3,462,432.00
Der 15. 2016
3,785,973.00
181,070.00
90,535.00
3,514,368.00
15,2017
3,785.973.00
145,926.00
72,963.00
3,567,084.00
Der 15, 2017
3,765,973.00
110,255.00
55,128.00
3,620,590.00
15, 2018
3.785,973.00
74,049.00
37,025.00
3,674,899.00
Der 15, 2018
3,785,972.00
37,300.00
18,850.00
3,730,022.00
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'15 :,I 11 111
County of Washington
City of Fayettevillo, Arkarwas
Sales :. . LN& lm Capital topnwernent
Registered Owner ARKANSAS DEVELOPMENT RNANCE AUTHORITY
Principal Arralmt SIXTY-FME MILLION DOLLARS
1
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PAWED wall APPROVED MIS 4M day of J*, 2005.
DAN COODY, Mayor
THANK YOU!
Arkansas Democrat -Gazette, NW Ed.
212 N. East Avenue
Fayetteville, AR 72701
479-442-1700
VISA PURCHASE
CARD #************4345*
EXPIRATION DATE : *****
DATE 07-21-2005 #006151 A
TIME 13:07:55
SALE 1220.16
APPROVED 025765
AVS: YES
CLERK : Ashley Stewart
MERCH ORDER# :
ITEM DESC:
X
***PLEASE IMPRINT CARD***
------------ THANK YOU -
1
By Signature of Project Engineer Date Signed
Typed or Printed Name and Title Telephone Number
4828-7944-0640.4 2