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Ordinance 5713
ORDINANCE NO. 5713 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $11,900,000 OF HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS, SERIES 2014, BY THE CITY OF FAYETTEVILLE, ARKANSAS FOR THE PURPOSE OF (1) REFUNDING THE CITY'S OUTSTANDING HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX REFUNDING BONDS, SERIES 2003, (2) FINANCING CERTAIN COSTS IN CONNECTION WITH THE RENOVATION AND EXPANSION OF WALTON ARTS CENTER, AND (3) FINANCING CERTAIN COSTS IN CONNECTION WITH A REGIONAL PARK; AUTHORIZING THE EXECUTION AND DELIVERY OF A TRUST INDENTURE PURSUANT TO WHICH THE SERIES 2014 BONDS WILL BE ISSUED AND SECURED; AUTHORIZING THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT PURSUANT TO WHICH THE SERIES 2014 BONDS WILL BE OFFERED; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF THE SERIES 2014 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF AN ESCROW DEPOSIT AGREEMENT PROVIDING FOR THE REDEMPTION OF THE SERIES 2003 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT; AND PRESCRIBING OTHER MATTERS RELATING THERETO WHEREAS, the City of Fayetteville, Arkansas (the "City") is authorized under the provisions of the Advertising and Promotion Commission Act, Arkansas Code Annotated (2008 Repl. & 2013 Supp.) §§26-75-601 et seg. (as from time to time amended, the "Act"), to issue its bonds secured by and payable from the revenues derived by the City from the one percent (1%) tax (the "Tax") levied by the City pursuant to Ordinance No. 2310 adopted by the City on March 1, 1977, as subsequently amended, upon (i) the gross receipts or gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses within the City from the sale of prepared food and beverages for on -premises or off -premises consumption; and Page 2 Ordinance No. 5713 WHEREAS, under the authority of the Act and pursuant to the provisions of Ordinance No. 4488 adopted on May 20, 2003, the City has previously issued and there are presently outstanding not more than $1,275,000 in aggregate principal amount of the City's Hotel, Motel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), which Series 2003 Bonds are secured by the pledge of and lien upon the City's receipts of the A&P Commission Tax; and WHEREAS, the City's Advertising and Promotion Commission (the "A&P Commission") by resolution adopted on May 13, 2013, has recommended that the City assist in (i) the completion of the Walton Arts Center expansion and renovation (the "Walton Arts Center Improvements") and (ii) the acquisition, construction and equipping of a regional park (the "Park Improvements") through the issuance of its Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds ("capital improvement bonds"); and WHEREAS, the A&P Commission has determined and the City Council concurs that the Walton Arts Center is a cultural arts and entertainment facility and its expansion and renovation will constitute a "tourism project" within the meaning of Arkansas Code Annotated (1998 Repl.) §14-170-205 which will secure and develop tourism and thereby stimulate and enhance the economic growth and well-being of the City and its people; and WHEREAS, the A&P Commission has further determined and the City Council concurs that the City's proposed regional park will constitute a "public recreation facility" and "city park" within the meaning of Arkansas Code Annotated (2008 Repl.) §26-75-606 and a "tourism project" within the meaning of Arkansas Code Annotated (1998 Repl.) §14-170-205 which will secure and develop tourism and thereby stimulate and enhance the economic growth and well-being of the City and its people; and WHEREAS, pursuant to the provisions of Ordinance No. 5605, duly adopted by the City Council on August 6, 2013, there was submitted to the qualified electors of the City the questions of the issuance of bonds pursuant to the Act in principal amount (i) not to exceed $1,500,000 for the purpose of refunding the Series 2003 Bonds, (ii) not to exceed $6,900,000 for the purpose of financing a portion of the Walton Arts Center Improvements, and (iii) not to exceed $3,500,000 for the purpose of financing a portion of the Park Improvements, said bonds to be secured by a pledge of and lien upon the City's receipts of the Tax (the "Tax Receipts"); and WHEREAS, at a special election held November 12, 2013, a majority of the qualified electors of the City voting on the aforementioned questions approved the issuance of the bonds for each of aforementioned purposes and the corresponding pledge of the Tax Receipts to the payment thereof; and NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Fayetteville, Arkansas that: Page 3 Ordinance No. 5713 Section 1. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution of the State of Arkansas and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014" (the "Bonds"). The Bonds shall be issued in the original aggregate principal amount of not to exceed Eleven Million Nine Hundred Thousand Dollars ($11,900,000), shall mature not later than December 1, 2044, and shall bear interest at the rates specified in the Bond Purchase Agreement. As authorized by the November 12, 2013 special election, not to exceed $1,500,000 aggregate principal amount of the Bonds shall be deemed applicable to the refunding of the Series 2003 Bonds, not to exceed $6,900,000 aggregate principal amount of the Bonds shall be deemed applicable to the Walton Arts Center Improvements, and not to exceed $3,500,000 aggregate principal amount of the Bonds shall be deemed applicable to the Park Improvements The average yield on the Bonds as a whole shall not exceed 5.000% per annum. The proceeds of the Bonds will be utilized (i) to finance a portion of the cost of redeeming the Series 2003 Bonds, (ii) to finance a portion of the costs of the Walton Arts Center Improvements, (iii) to finance a portion of the costs of the Park Improvements, (iv) to establish a debt service reserve for the Bonds or to purchase a surety bond for reserve purposes, (v) to pay a premium for bond insurance, if deemed economically beneficial, and (vi) to pay printing, underwriting, legal and other expenses incidental to the issuance of the Bonds. The Bonds shall be issued in the forms and denominations, shall be dated, shall be numbered, shall mature, shall be subject to redemption prior to maturity, and shall contain such other terms, covenants and conditions, all as set forth in the Trust Indenture submitted to this meeting. The Mayor is hereby authorized and directed to execute and deliver the Bonds in one or more series, each series to be in substantially the form thereof contained in the Trust Indenture submitted to this meeting, and the City Clerk is hereby authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby authorized to confer with the Trustee, Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), and Kutak Rock LLP, Little Rock, Arkansas ("Bond Counsel"), in order to complete the Bonds in substantially the form contained in the Trust Indenture submitted to this meeting, with such changes as shall be approved by such persons executing the Bonds, their execution to constitute conclusive evidence of such approval. Page 4 Ordinance No. 5713 Section 2. In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, there is hereby pledged all of the Tax Receipts. The levy and collection of the Tax shall not be discontinued or reduced while any of the Bonds are outstanding unless sufficient funds are on deposit with the Trustee under the Trust Indenture to redeem the Bonds in full. The City covenants and agrees that all Tax Receipts will be accounted for separately as special funds on the books of the City, and all Tax Receipts will be deposited and will be used solely as provided in the Trust Indenture. Section 3. To prescribe the terms and conditions upon which the Bonds are to be executed, authenticated, issued, accepted, held and secured, the Mayor is hereby authorized and directed to execute and acknowledge the Trust Indenture, by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, the Trustee, and the City Clerk is hereby authorized and directed to execute and acknowledge the Trust Indenture and to affix the seal of the City thereto, and the Mayor and the City Clerk are hereby authorized and directed to cause the Trust Indenture to be accepted, executed and acknowledged by the Trustee. The Trust Indenture is hereby approved in substantially the form submitted to this meeting, including, without limitation, the provisions thereof pertaining to the pledge of Tax Receipts and the terms of the Bonds. The Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Trust Indenture in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Trust Indenture, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Trust Indenture in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 4. There is hereby authorized and approved a Preliminary Official Statement of the City, including the cover page and appendices attached thereto, relating to the Bonds. The Preliminary Official Statement is hereby "deemed final" by the City within the meaning of U.S. Securities and Exchange Commission Rule 15c2-12. The distribution of the Preliminary Official Statement is hereby approved. The Preliminary Official Statement, as amended to conform to the terms of the Bond Purchase Agreement, including Exhibit A thereto, and with such other changes and amendments as are mutually agreed to by the City and the Underwriter, is herein referred to as the "Official Statement," and the Mayor is hereby authorized to execute the Official Statement for and on behalf of the City. The Official Statement is hereby approved in substantially the form of the Preliminary Official Statement submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Official Statement in substantially the form of the Preliminary Official Statement submitted to this meeting, with such changes as shall be approved by such persons, the Mayor's execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Preliminary Official Statement is on file with the City Clerk and is available for inspection by any interested person.) Page 5 Ordinance No. 5713 Section 5. In order to prescribe the terms and conditions upon which the Bonds are to be sold to the Underwriter, the Mayor is hereby authorized and directed to execute the Bond Purchase Agreement on behalf of the City, to be dated as of the date of its execution, by and between the City and the Underwriter, and the Bond Purchase Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Underwriter and Bond Counsel in order to complete the Bond Purchase Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Bond Purchase Agreement, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Bond Purchase Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 6. In order to provide for the redemption of the Series 2003 Bonds, the Mayor is hereby authorized and directed to execute the Escrow Deposit Agreement to be dated as of the date of its execution, by and between the City and BOKF, NA, as the Escrow Trustee, and the Mayor is hereby authorized and directed to cause the Escrow Agreement to be executed by the Escrow Trustee. The Escrow Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Underwriter, the Escrow Trustee and Bond Counsel in order to complete the Escrow Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Escrow Agreement, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Escrow Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 7. In order to provide for continuing disclosure of certain financial and operating information with respect to the Tax and the City in compliance with the provisions of Rule 15c2-12 of the U. S. Securities and Exchange Commission, the Mayor is hereby authorized and directed to execute the Continuing Disclosure Agreement to be dated as of the date of its execution, by and between the City and the Simmons First Trust Company, N.A., the Dissemination Agent, and the Mayor is hereby authorized and directed to cause the Continuing Disclosure Agreement to be executed by the Dissemination Agent. The Continuing Disclosure Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Dissemination Agent, the Underwriter and Bond Counsel in order to complete the Continuing Disclosure Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Continuing Disclosure Agreement, their execution to constitute conclusive evidence of such approval. Page 6 Ordinance No. 5713 (Advice is given that a copy of the Continuing Disclosure Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 8. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider the purchase of a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of the principal of and interest on the Bonds when due. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a bond insurance policy with respect to the Bonds. Section 9. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things necessary to effect the issuance, sale, execution and delivery of the Bonds and to effect the execution and delivery of the Trust Indenture, the Bond Purchase Agreement, the Official Statement, the Escrow Agreement, the Continuing Disclosure Agreement and a Tax Regulatory Agreement relating to the tax exemption of interest on the Bonds, and to perform all of the obligations of the City under and pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on behalf of the City, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of such authority or to evidence the exercise thereof. Section 10. 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 11. All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. PASSED and APPROVED this day of 16th day of September, 2014. ATTEST: By:'�'� SONDRA E. SMITH, City Clerk/Trj egw"n, 0A Y 01 : FAYETTEVILLE•}; City of Fayetteville Staff Review Form 2014-0393 Legistar File ID 9/16/2014 City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item Paul Becker 8/28/2014 Billing & Collections / Finance & Internal Services Department Submitted By Submitted Date Division / Department Action Recommendation: Approval of An Ordinance Authorizing The Issuance And Sale Of Not To Exceed $11,900,000 Of Hotel And Restaurant Gross Receipts Tax Capital Improvement And Refunding Bonds, Series 2014. The bond proceeds are to be used for renovation and expansion of the Walton Arts Center and for financing certain costs in connection with a regional park. Budget Impact: Account Number Fund Project Number Project Title Budgeted Item? No Current Budget $ Funds Obligated $ Current Balance $ Does item have a cost? No Item Cost Budget Adjustment Attached? No Budget Adjustment Previous Ordinance or Resolution # Original Contract Number: Comments: Remaining Budget D 24 1 EN74711L, 3 f Approval Date:_ "T" v-&) Iz, JN— Q,.: ce Q . a. `t THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENT CORRESPONDENCE To: Mayor Jordan Thru: Don Marr, Chief of Staff From: Paul A Becker PPS Date: August 29, 2014 Subject: Approval of a Bond Ordinance Authorizing the Issuance and Sale of Hotel and Restaurant Gross Receipts Tax Capital Improvement and Refunding Bonds Series 2014 in an Amount Not To Exceed $11,900,000 PROPOSAL: At the request of the A & P Commission the City Council passed Ordinance Number 5605 which authorized ballot questions to be submitted to the voter regarding the issuance of HMR Tax bonds for the following purposes: An amount not to exceed $1,500,000 for the purpose of refunding the Series 2003 HMR Bonds. An amount not to exceed $6,900,000 for the purpose of financing Walton Arts Center Improvements. An amount not to exceed $3,500,000 for the purpose of financing Parks Improvements. At the special election held on November 12, 2013 all three of these questions were approved by the voter. The City and the Walton Arts Center is now prepared to move forward with these important capital improvements. This Ordinance will authorize the actual issuance of these bonds to provide funds for the projects described above. RECOMMENDATION: THE CITY OF FAYETTEVILLE, ARKANSAS The Staff recommends approval of issuance and sale of the Hotel and Restaurant Gross Receipts Tax Capital Improvement and Refunding Bonds Series 2014. BUDGETIMPACT The issuance of these bonds will provide funds for the Walton Arts Center Expansion and Renovation as well as providing funds for the Regional Park. [1J_7.17IU Cto)DIC[1a AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $11,900,000 OF HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS, SERIES 2014, BY THE CITY OF FAYETTEVILLE, ARKANSAS FOR THE PURPOSE OF (1) REFUNDING THE CITY'S OUTSTANDING HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX REFUNDING BONDS, SERIES 2003, (2) FINANCING CERTAIN COSTS IN CONNECTION WITH THE RENOVATION AND EXPANSION OF WALTON ARTS CENTER, AND (3) FINANCING CERTAIN COSTS IN CONNECTION WITH A REGIONAL PARK; AUTHORIZING THE EXECUTION AND DELIVERY OF A TRUST INDENTURE PURSUANT TO WHICH THE SERIES 2014 BONDS WILL BE ISSUED AND SECURED; AUTHORIZING THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT PURSUANT TO WHICH THE SERIES 2014 BONDS WILL BE OFFERED; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF THE SERIES 2014 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF AN ESCROW DEPOSIT AGREEMENT PROVIDING FOR THE REDEMPTION OF THE SERIES 2003 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT; AND PRESCRIBING OTHER MATTERS RELATING THERETO WHEREAS, the City of Fayetteville, Arkansas (the "City") is authorized under the provisions of the Advertising and Promotion Commission Act, Arkansas Code Annotated (2008 Repl. & 2013 Supp.) §§26-75-601 et seq. (as from time to time amended, the "Act"), to issue its bonds secured by and payable from the revenues derived by the City from the one percent (1%) tax (the "Tax") levied by the City pursuant to Ordinance No. 2310 adopted by the City on March 1, 1977, as subsequently amended, upon (i) the gross receipts or gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses within the City from the sale of prepared food and beverages for on -premises or off -premises consumption; and Page 2 Ordinance No. WHEREAS, under the authority of the Act and pursuant to the provisions of Ordinance No. 4488 adopted on May 20, 2003, the City has previously issued and there are presently outstanding not more than $1,275,000 in aggregate principal amount of the City's Hotel, Motel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), which Series 2003 Bonds are secured by the pledge of and lien upon the City's receipts of the A&P Commission Tax; and WHEREAS, the City's Advertising and Promotion Commission (the "A&P Commission") by resolution adopted on May 13, 2013, has recommended that the City assist in (i) the completion of the Walton Arts Center expansion and renovation (the "Walton Arts Center Improvements") and (ii) the acquisition, construction and equipping of a regional park (the "Park Improvements") through the issuance of its Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds ("capital improvement bonds"); and WHEREAS, the A&P Commission has determined and the City Council concurs that the Walton Arts Center is a cultural arts and entertainment facility and its expansion and renovation will constitute a "tourism project" within the meaning of Arkansas Code Annotated (1998 Repl.) §14-170-205 which will secure and develop tourism and thereby stimulate and enhance the economic growth and well-being of the City and its people; and WHEREAS, the A&P Commission has fiuther determined and the City Council concurs that the City's proposed regional park will constitute a "public recreation facility" and "city park" within the meaning of Arkansas Code Annotated (2008 Repl.) §26-75-606 and a "tourism project" within the meaning of Arkansas Code Annotated (1998 Repl.) §14-170-205 which will secure and develop tourism and thereby stimulate and enhance the economic growth and well- being of the City and its people; and WHEREAS, pursuant to the provisions of Ordinance No. 5605, duly adopted by the City Council on August 6, 2013, there was submitted to the qualified electors of the City the questions of the issuance of bonds pursuant to the Act in principal amount (i) not to exceed $1,500,000 for the purpose of refunding the Series 2003 Bonds, (ii) not to exceed $6,900,000 for the purpose of financing a portion of the Walton Arts Center Improvements, and (iii) not to exceed $3,500,000 for the purpose of financing a portion of the Park Improvements, said bonds to be secured by a pledge of and lien upon the City's receipts of the Tax (the "Tax Receipts"); and WHEREAS, at a special election held November 12, 2013, a majority of the qualified electors of the City voting on the aforementioned questions approved the issuance of the bonds for each of aforementioned purposes and the corresponding pledge of the Tax Receipts to the payment thereof; and NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Fayetteville, Arkansas that: Page 3 Ordinance No. Section 1. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution of the State of Arkansas and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014" (the "Bonds"). The Bonds shall be issued in the original aggregate principal amount of not to exceed Eleven Million Nine Hundred Thousand Dollars ($11,900,000), shall mature not later than December 1, 2044, and shall bear interest at the rates specified in the Bond Purchase Agreement. As authorized by the November 12, 2013 special election, not to exceed $1,500,000 aggregate principal amount of the Bonds shall be deemed applicable to the refunding of the Series 2003 Bonds, not to exceed $6,900,000 aggregate principal amount of the Bonds shall be deemed applicable to the Walton Arts Center Improvements, and not to exceed $3,500,000 aggregate principal amount of the Bonds shall be deemed applicable to the Park Improvements The average yield on the Bonds as a whole shall not exceed 5.000% per annum. The proceeds of the Bonds will be utilized (i) to finance a portion of the cost of redeeming the Series 2003 Bonds, (ii) to finance a portion of the costs of the Walton Arts Center Improvements, (iii) to finance a portion of the costs of the Park Improvements, (iv) to establish a debt service reserve for the Bonds or to purchase a surety bond for reserve purposes, (v) to pay a premium for bond insurance, if deemed economically beneficial, and (vi) to pay printing, underwriting, legal and other expenses incidental to the issuance of the Bonds. The Bonds shall be issued in the forms and denominations, shall be dated, shall be numbered, shall mature, shall be subject to redemption prior to maturity, and shall contain such other terms, covenants and conditions, all as set forth in the Trust Indenture submitted to this meeting. The Mayor is hereby authorized and directed to execute and deliver the Bonds in one or more series, each series to be in substantially the form thereof contained in the Trust Indenture submitted to this meeting, and the City Clerk is hereby authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby authorized to confer with the Trustee, Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), and Kutak Rock LLP, Little Rock, Arkansas ("Bond Counsel"), in order to complete the Bonds in substantially the form contained in the Trust Indenture submitted to this meeting, with such changes as shall be approved by such persons executing the Bonds, their execution to constitute conclusive evidence of such approval. Page 4 Ordinance No. Section 2. In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, there is hereby pledged all of the Tax Receipts. The levy and collection of the Tax shall not be discontinued or reduced while any of the Bonds are outstanding unless sufficient funds are on deposit with the Trustee under the Trust Indenture to redeem the Bonds in full. The City covenants and agrees that all Tax Receipts will be accounted for separately as special funds on the books of the City, and all Tax Receipts will be deposited and will be used solely as provided in the Trust Indenture. Section 3. To prescribe the terms and conditions upon which the Bonds are to be executed, authenticated, issued, accepted, held and secured, the Mayor is hereby authorized and directed to execute and acknowledge the Trust Indenture, by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, the Trustee, and the City Clerk is hereby authorized and directed to execute and acknowledge the Trust Indenture and to affix the seal of the City thereto, and the Mayor and the City Clerk are hereby authorized and directed to cause the Trust Indenture to be accepted, executed and acknowledged by the Trustee. The Trust Indenture is hereby approved in substantially the form submitted to this meeting, including, without limitation, the provisions thereof pertaining to the pledge of Tax Receipts and the terms of the Bonds. The Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Trust Indenture in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Trust Indenture, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Trust Indenture in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 4. There is hereby authorized and approved a Preliminary Official Statement of the City, including the cover page and appendices attached thereto, relating to the Bonds. The Preliminary Official Statement is hereby "deemed final" by the City within the meaning of U.S. Securities and Exchange Commission Rule 15c2-12. The distribution of the Preliminary Official Statement is hereby approved. The Preliminary Official Statement, as amended to conform to the terms of the Bond Purchase Agreement, including Exhibit A thereto, and with such other changes and amendments as are mutually agreed to by the City and the Underwriter, is herein referred to as the "Official Statement," and the Mayor is hereby authorized to execute the Official Statement for and on behalf of the City. The Official Statement is hereby approved in substantially the form of the Preliminary Official Statement submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Official Statement in substantially the form of the Preliminary Official Statement submitted to this meeting, with such changes as shall be approved by such persons, the Mayor's execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Preliminary Official Statement is on file with the City Clerk and is available for inspection by any interested person.) Page 5 Ordinance No. Section 5. In order to prescribe the terms and conditions upon which the Bonds are to be sold to the Underwriter, the Mayor is hereby authorized and directed to execute the Bond Purchase Agreement on behalf of the City, to be dated as of the date of its execution, by and between the City and the Underwriter, and the Bond Purchase Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Underwriter and Bond Counsel in order to complete the Bond Purchase Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Bond Purchase Agreement, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Bond Purchase Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 6. In order to provide for the redemption of the Series 2003 Bonds, the Mayor is hereby authorized and directed to execute the Escrow Deposit Agreement to be dated as of the date of its execution, by and between the City and BOKF, NA, as the Escrow Trustee, and the Mayor is hereby authorized and directed to cause the Escrow Agreement to be executed by the Escrow Trustee. The Escrow Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Underwriter, the Escrow Trustee and Bond Counsel in order to complete the Escrow Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Escrow Agreement, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Escrow Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 7. In order to provide for continuing disclosure of certain financial and operating information with respect to the Tax and the City in compliance with the provisions of Rule 15c2-12 of the U. S. Securities and Exchange Commission, the Mayor is hereby authorized and directed to execute the Continuing Disclosure Agreement to be dated as of the date of its execution, by and between the City and the Simmons First Trust Company, N.A., the Dissemination Agent, and the Mayor is hereby authorized and directed to cause the Continuing Disclosure Agreement to be executed by the Dissemination Agent. The Continuing Disclosure Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Dissemination Agent, the Underwriter and Bond Counsel in order to complete the Continuing Disclosure Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Continuing Disclosure Agreement, their execution to constitute conclusive evidence of such approval. Page 6 Ordinance No. (Advice is given that a copy of the Continuing Disclosure Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 8. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider the purchase of a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of the principal of and interest on the Bonds when due. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a bond insurance policy with respect to the Bonds. Section 9. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things necessary to effect the issuance, sale, execution and delivery of the Bonds and to effect the execution and delivery of the Trust Indenture, the Bond Purchase Agreement, the Official Statement, the Escrow Agreement, the Continuing Disclosure Agreement and a Tax Regulatory Agreement relating to the tax exemption of interest on the Bonds, and to perform all of the obligations of the City under and pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on behalf of the City, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of such authority or to evidence the exercise thereof. Section 10. 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 11. All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. PASSED and APPROVED this day of 16"' day of September, 2014. APPROVED: LIONELD JORDAN, Mayor ATTEST: In SONDRA E. SMITH, City Clerk/Treasurer NORTHWEST ARKANSAS DEMOCRAT -GAZETTE NORTHWEST ARKANSAS DALE THE MORNINNINGNEFSPRINOGERS ��SPAPERSLLC THNORTH EST ARK OF STIMES NORTHWEST ARKANSAS TIMES BENTON COUNTY DAILY RECORD 212 NORTH EAST AVENUE, FAYETTEVILLE, ARKANSAS 72701 1 P.O. BOX 1607, 72702 1 479.442-1700 1 WWW.NWANEWS.COM AFFIDAVIT OF PUBLICATION I, Karen Caler, do solemnly swear that I am the Legal Clerk of the Northwest Arkansas Newspapers, LLC, printed and published in Washington and Benton County, Arkansas, bona fide circulation, that from my own personal knowledge and reference to the files of said publication, the advertisement of City of Fayetteville - Ordinance 5713 Was inserted in the Regular Editions on: Sept. 19, 2014 Publication Charges: $ 1081.58 Karen ealer Subscribed and sworn to before me This 2� day of 2014. Notary Public My Commission Expires:7�(Zo CATHY WILES Arkansas - Benton County Notary Public - Comm* 12397118 My Commission Expires Feb 20, 2024 **NOTE** Please do not pay from Affidavit. Invoice will be sent. RECEIVED SEP 2 4 2014 CITY OF FAYETTEYILLE CITY C WROFFICE See Attached ORDINANCE NO. 5773 ,AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE PT NOT TO EXCEED a e devvle REVSUE OFHOTEL, MOTEMND RESTAURANTGROSSRECEIPTSTAX ANDTOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS, SERIES G T BY THE CITY OF FAYE17EVILLE, ARKANSAS FOR THE PURPOSE OF (1)REFUNDING THE CITY'S S •OUTSTANDING HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX REFUNDING BONDS, SERIES 2003, (2) FINANCING CERTAIN COSTS IN CONNECTION WITH THE RETHE EXECUTION AND EXPANSION OF ARTS CENTER, AND (3) FINANCING CERTAIN COSTS IN CONNECTION WITH A REGIONAL PARK; AUTHORIZING THE EXECUTION AND DELIVERY OF ATRUST INDENTURE PURSUANTWHICH THE ';SERIES BONDS WILL BE ISSUED AND SECURED; AUTHORIZING THE EXECUTION AND DELIVERY OFF AN OFFICIAL STATEMENT PURSUANT TO WHICH THE SERIES 2014 BONDS WILL BE OFFERED; AUTHORIZING THE EXECUTION AND (THE EXECUTION OFA BOND PURCHASE AGREEMENT W DEPOSIT FOR THE SALE R THE SERIES 2014 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF AN ESCROW DEPOSIT AGREEMENT PROVIDING FOR THE REDEMPTION THE -. iSERIES. 2003 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT; 'AND PRESCRIBING OTHER MATTERS RELATING THERETO. i'WHEREAS, the City of Fayetteville, Arkansas (the "City") is authorized under the provisions of the Advertising and Promotion (Commission Act, Arkansas Code Annotated (2008 Repl. & 2013 Supp.) §§26 75 601 at seq. (as from time to time amended, fthe "Act"), to issue its bonds secured by and payable from the revenues derived by the City from the one percent (1 %) tax (the "Tax") levied by the City pursuant to Ordinance No. 2310 adopted by the City on March 1, 1977, as subsequently amended, "upon (1) the gross receipts or gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommoda- 'tions for profit within the boundaries of the City and (it) the portion of gross receipts or gross proceeds received by restaurants, 'cafes, cafeterias, delis, drive-in restaurants, carry-out restaurants, concession stands, convenience stores, grocery store- 'restaurants, caterers and similar businesses within the City from the sale of prepared food and beverages for on premises or off-premises consumption; and WHEREAS, under the authority of the Act and pursuant to the provisions of Ordinance No. 4488 adopted on May 20, 2003, the City has previously issued and there are presently outstanding not more than $1,275,000 in aggregate principal amount of the City's Hotel, Motel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), which Series v 1-2003 Bonds are secured by the pledge of and lien upon the City's receipts of the A&P Commission Tax; and WHEREAS, the City's Advertising and Promotion Commission (the "A&P Commission") by resolution adopted on May 13, 2013, has recommended that the City assist in (i) the completion of the Walton Arts Center expansion and renovation (the "Walton -Arts Center Improvements") and (ii) the acquisition, construction and equipping of a regional park (the "Park Improvements") :. through the issuance of its Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bands ,.rcapital improvement bonds"); and WHEREAS, the A&P Commission has determined and the City Council concurs that the Walton Arts Center is a cultural arts and entertainment facility and its expansion and renovation will censtdute a "tourism project" within the meaning of Arkansas Code �. <Annotated If 998 RepIJ §14-170-205 which will secure and develop tourism and thereby stimulate and enhance the economic `growth and well-being of the City and its people; and '.WHEREAS, the A&P Commission has further determined and the City Council concurs that the City's proposed regional park :will constitute a "public recreation facility" and "city park" within the meaning of Arkansas Code Annotated (2008 Repl.) §26 75 606 and a "tourism project" within the meaning of Arkansas Code Annotated (1998 Refel.) §14-170-205 whirill secure and 'develop tourism and thereby stimulate and enhance the economic growth and well-being of the City and its p.,-ple; and WHEREAS, pursuant to the provisions of Ordinance No. 5605, duly adopted by the City Council on August 6, 2013, there was 'submitted to the qualified electors of the City the questions of the issuance of bonds pursuant to the Act in principal amount (q not to exceed $1,500,000 for the purpose of refunding the Sense 2003 Bonds, (i) not to exceed $6,900,000 for the purpose sof financing a portion of the Walton Arts Center Improvements, and (ii) not to exceed $3,500,000 for the purpose of hem, ^g is portion of the Park Improvements, said bonds to be secured by a pledge of and lien upon the City's receipts of the Tax (the "Tax Receipts"); and WHEREAS, at a special election held November 12, 2013, a majority of the qualified electors of the City voting on the afore- :: mentioned questions approved the issuance of the bonds for each of aforementioned purposes and the corresponding pledge of the Tax Receipts to the payment thereof; and ' NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Fayetteville. Arkansas that: Section 1. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution of the State of Arkansas and the Act, there is hereby authorized the issuance of bands of the City to be "designated as "Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014" (the "Bonds"). The Bonds shall be issued in the original aggregate principal amount of not to exceed Eleven Million Nine Hundred Thousand Dollars ($11,900,000), shall mature not later than December 1, 2044, and shall bear interest at the rates specified in the Bond Purchase Agreement. As authorized by the November 12, 2013 special election, -" `not to exceed $1,50D,000 aggregate principal amount of the Bonds shall be deemed applicable to the refunding of the Series 2003 Bonds, not to exceed $6,900,000 aggregate principal amount of the Bonds shall be deemed applicable to the Walton Arts Center Improvements, and not to exceed $3,500,000 aggregate principal amount of the Bonds shall be deemed applicable to the Park Improvements •..The.average yield on the Bonds as a whole shall' not exceed 5.000% per annum. The proceeds of the Bands will be utilized .(i) to finance a portion of the cost of redeeming the Series 2003 Bonds, (i) to finance a portion of the costs of the Walton Arts Center Improvements, (iii) to finance a portion of the costs of the Park Improvements. (iv) to establish a debt service reserve for I' the Bonds or to purchase a surety band for reserve purposes, (v) to pay a premium for bond insurance, if deemed economi- cally beneficial, and (vi) to pay printing, underwriting, legal and other expenses incidental to the issuance of the Bonds. The Bonds shall be issued in the forms and denominations, shall be dated, shall be numbered, shall mature, shall be subject to redemption priorto maturity, and shall contain such other terms, covenants and conditions, all as set forth in the Trust Indenture submitted to this meeting- -' The Mayor is hereby authorized and directed to execute and deliver the Bonds in one or more series, each series to be in substantially the form thereof contained in the Trust Indenture submitted to this meeting, and the City Clerk is hereby autho- = lied and directed to execute and deliver the Bonds and to affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby F Stephens Inc., Fayetteville, Arkansas (the "Underwriter" and Kutak Rock LLP, Little ,,,. authorizetl to Confer with the Trustee, p y I riiock, Arkansas ("Band Counsel"), h orderes complete the proved b substantially the form contained in the Trust Indenture 'submitted to this meeting, with such changes as shall be approved by such persons executing the Bonds, their execution to :constitute conclusive evidence of such approval. CSection 2. In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to matu- thy, there is hereby pledged all of the Tax Receipts. The levy and collection of the Tax shall not be discontinued or reduced whlle any of the Bonds are outstanding unless sufficient funds are on deposit with the Trustee under the Trust Indenture to ,.redeem the Bonds in full. The City covenants and agrees that all Tax Receipts will be accounted for separately as special funds 'i; on the books of the City, and all Tax Receipts will be deposited and will be used solely as provided in the Trust Indenture. mu. o prescribe the terms and conditions upon which the Bonds are to be executed, authenticated, issued, accepted, and secured, the Mayor is hereby authorized and directed to execute and acknowledge the Trust Indenture, by and an the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, the Trustee, and the City Clerk is hereby rized and directed to execute and acknowledge the Trust Indenture and to affix the seal blithe City thereto, and the Mayor to City Clerk are hereby authorized and directed to cause the Trust Indenture to be accepted, executed and acknowl- I by the Trustee. The Trust Indenture is hereby approved in substantially the form submitted to this meeting, including, Alimhation, the provisions thereof pertaining to the pledge of Tax Receipts and the terms of the Bonds. The Mayor is y authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Trust Indenture in antially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Trust lure, their execution to constitute conclusive evidence of such approval. :e is given that a copy of the Trust Indenture in substantially the formauthorized to be executed is on file with the City and is available for inspection by any interested person.) on 4. There is hereby authorized and approved a Preliminary Official Statement of the City, including thecover page appendices attached thereto, relating to the Bonds. The Preliminary Official Statement is hereby "deemed final" by the Vithin the meaning of U.S. Securities and Exchange Commission Rule 15c2-12. The distribution of the Preliminary Official ment is hereby approved. The Preliminary Official Statement, as amended to conform to the terms of the Bond Purchase anent, including. Exhibit A thereto, and with such other changes and amendments as are mutually agreed to by the City he Underwriter, is herein referred to as the "Official Statement," and the Mayor is hereby authorized to execute the Official hien for and on behalf of the City. The Official Statement is hereby approved in substantially the forth of the Preliminary at Statement submitted.to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the Underwriter and I Counsel in order to complete the Official Statement in substantially the form of the Preliminary. Official Statement submit- ) this meeting, with such changes as shall be approved by such persons, the Mayor's execution to constitute conclusive ince of such approval.` ca is given that a copy of the Preliminary Official Statement Is on file with the City Clerk and is available for inspection by nterested person.) Ion 6. In order to prescribe.the terms and conditions. upon which the Bonds are to be sold to the Underwriter, the Mayor reby authorized and directed to execute the Bond Purchase Agreement on behalf of the City, to be dated as of the date of umution, by and between the City and the Underwriter, and the Bond Purchase Agreement is hereby approved in substan- the form submitted to this meeting, and the Mayor Is hereby authorized to confer with the Underwriter and Bond Counsel Jar to complete the Bond Purchase Agreement in substantially the form submitted to this meeting, with such changes as . be approved by such persons executing the Bond Purchase Agreement their execution to constitute conclusive evidence ich approval. ice is given that a copy of the Bond Purchase Agreement in substantially the form authorized to be executed is on file with ;ity Clerk and is available for inspection by any interested person.) :ion 6. in order to provide for the redemption of the Series 2003 Bonds, the Mayor is hereby authorized and directed to :ute the Escrow Deposit Agreement to be dated as of the date of its execution, by and between the City and BOKF,NA, to Escrow Trustee, and the Mayor is hereby authorized and directed to cause the Escrow Agreement to be executed by Escrow Trustee. The Escrow Agreement is hereby approved in substantially the form submitted to this meeting, and the or is hereby authorized to confer with the Underwriter, the Escrow Trustee and Bond Counsel in order to complete the ow Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons Ming the Escrow Agreement, their execution to constitute conclusive evidence of such approval. rice is given theta copy of the Escrow Agreement in substantially the form authorized to be executed is on file with the City k and Is available for inspection by any interested person.) ,lion 7. In order to provide for continuing disclosure of certain financial and operating information with respect to the Tax the City in compliance with the provisions of Rule 15c2 12 of the U. S. Securities and Exchange Commission, the Mayor is ,by authorized and directed to execute the Continuing Disclosure Agreement to be dated as of the date of its execution, by between the City and the Simmons First Trust Company, N.A., the Dissemination Agent, and the Mayor is hereby autho- i and directed to cause the Continuing Disclosure Agreement to be executed by the Dissemination Agent. The Continuing :losure Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby autho- i to confer with the Disseminatlon Agent, the Underwriter slid Bond Counsel in order to complete the Continuing Disclosure cement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons outing the Continuing Disclosure Agreement, their execution to constitute conclusive evidence of such approval. Ace is given that a copy of the Continuing Disclosure Agreement in substantially the form authorized to be executed is on with the City Clerk and is available for inspection by any Interested person.) :tion S. In order to secure lower Interest refuse on the Bonds, the Underwriter has proposed that the City consider the pur- se of a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of principal of and interest on the Bonds when due. If deemed economically advantageous by the Mayor, upon the advice of Underwriter, the Mayor is hereby authorized to execute an Insurance commitment and to do anyand all things necessary accomplish the delivery of a bond insurance policy with respect to the Bonds. :Hong. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things essary to effect the issuance, sale, execution and delivery of the Bonds and to effect the execution and delivery of theTrust anture, the Bond Purchase Agreement, the Official Statement, the Escrow Agreement, the Continuing Disclosure Agreement I a Tax Regulatory Agreement relating to the tax exemption of interest on the Bonds, and to perform all of the obligations he City under and pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on behalf of City, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of such hority or to evidence the exercise thereof. ;tion 10. The provisions of this Ordinance are hereby declared to be severable, and if any section, phrase or provision shall any reason he declared to be illegal or invalid, such declaration shall not affect the validity of the remainder of the sections, ases or provisions of this Ordinance. :Hon 11. All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such con: and APPROVED this day of 16th day of September, 2014. ATTEST: By: JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer $10,980,000 CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS SERIES 2014 TRANSCRIPT OF PROCEEDINGS Dated as of November 1, 2014 Prepared By: KUTAK ROCK LLP 124 West Capitol, Suite 2000 Little Rock, Arkansas 72201 4825-1229-0077.2 $10,980,000 CITY OF FAYETTEVILLE, ARKANSAS MOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS SERIES 2014 CLOSING INDEX TAB Proceedings and Certificates Related to Election Certificate of City of Fayetteville, Arkansas (the "City") as to Election Matters Exhibit A - Ordinance No. 5605 adopted August 6, 2013, calling a special election on the issuance of the Bonds Exhibit B - Minutes of City Council meeting held August 6, 2013, reciting the adoption of Ordinance No. 5605 Exhibit C - Proof of Publication of Ordinance No. 5605 in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on August 15, 2013 4 Exhibit D - Proof of Publication of Notice of Special Election in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on October 30, 2013 Exhibit E - Mayor's Proclamation of Election Results and Proof of Publication in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on November 25, 2013 6 Certificate of Washington County Board of Election Commissioners Ascertaining and Declaring Results of Special Election held November 12, 2013 Proceedings and Certificates Related to Bond Issuance Closing Certificate and Request of the City Exhibit A - Ordinance No. 2310 adopted March 1, 1977, levying a one percent (1.00%) hotel and restaurant gross receipts tax (the "Tax") 9 4825-1229-0077.2 TAB Exhibit B - Ordinance No. 2315 adopted March 15, 1977, Ordinance No. 2648 adopted July 15, 1980, Ordinance No. 2711 adopted March 24, 1981, Ordinance No. 2869 adopted October 19, 1982, Ordinance No. 4303 adopted March 20, 2001, and Ordinance No. 4317 adopted June 5, 2001, each amending Ordinance No. 2310 with respect to the levying of the Tax 10 Exhibit C - Ordinance No. 5713 adopted September 16, 2014, authorizing issuance of the Bonds and pledging the receipts of the Tax (the "Tax Receipts") 11 Exhibit D - Minutes of City Council meeting held September 16, 2014, reciting adoption of Ordinance No. 5713 12 Exhibit E - Proof of Publication of Ordinance No. 5713 in the Northwest Arkansas Edition of the Arkansas Democrat -Gazette on September 19, 2014 13 Exhibit F — Resolution of the City Advertising and Promotion Commission (the "Commission") adopted March 11, 2013, approving the issuance of the Bonds 14 Exhibit G — Schedule of Bond Issuance Costs to be Paid at Closing 15 Form 8038-G and Proof of Mailing to Internal Revenue Service 16 Principal Documents Trust Indenture dated as of November 1, 2014, by and between the City and Simmons First Trust Company, N.A., as trustee (the "Trustee") 17 Tax Regulatory Agreement dated November 19, 2014, by and between the City and the Trustee 18 Escrow Deposit Agreement dated November 19, 2014, by and between the City and BOKF, NA, as escrow trustee (the "Escrow Trustee") 19 Continuing Disclosure Agreement dated November 19, 2014, by and between the City and Simmons First Trust Company, N.A., as dissemination agent 20 Copies of Bonds 21 Bond Purchase Agreement dated October 28, 2014, by and between the City and Stephens Inc., as underwriter (the "Underwriter") 22 4825-1229-0077.2 TAB Preliminary Official Statement 23 Official Statement 24 Opinions Approving Opinion of Bond Counsel 25 Supplemental Opinion of Bond Counsel 26 Defeasance Opinion of Bond Counsel 27 Reliance Letter to Bond Insurer 28 Opinion of City Attorney 29 Miscellaneous Certificate of Commission 30 Trustee's Certificate 31 Escrow Trustee's Certificate 32 Underwriter's Certificate 33 Trustee's Receipt and Certificate as to Application of Funds 34 Escrow Trustee's Receipt 35 Underwriter's Receipt 36 DTC Blanket Letter of Representation 37 S&P Rating Letters 38 Bond Insurance (Build America Mutual Insurance Company) BAM Municipal Bond Insurance Policy 39 BAM Debt Service Reserve Insurance Policy 40 Certificates of BAM 41 Opinion of Counsel to BAM 42 Debt Service Reserve Agreement 43 3 482-1229-0077.2 Transcripts delivered to: City of Fayetteville, Attn: Mr. Paul Becker (2 bound), Attn: Ms. Sondra Smith (1 CD) Simmons First Trust Company, N.A., Attn: Ms. Glenda Dean (1 bound and 1 CD) Stephens Inc., Attn: Mr. Dennis Hunt (1 bound and 1 CD) Fayetteville City Attorney, Attn: Kit Williams, Esq. (1 bound) Build America Mutual Insurance Company, Attn: Nolan Miller (2 CDs) Kutak Rock LLP (1 bound) 4825-1229-0077.2 CERTIFICATE OF CITY AS TO ELECTION MATTERS The undersigned Mayor and City Clerk of the City of Fayetteville, Arkansas, a duly organized municipality and political subdivision of the State of Arkansas (the "City"), do hereby certify and covenant as follows: 1. The undersigned are the duly elected, qualified and acting Mayor and City Clerk of the City, and as such officials have in their possession or have access to the official books and corporate records of the City. This Certificate is executed and delivered in connection with the issuance of the City's $10,980,000 Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 (the "Bonds"). 2. Attached hereto as Exhibit A is a true, complete, and correct copy of Ordinance No. 5605 (the "Election Ordinance"), duly adopted by City Council of the City, at a regular meeting, open to the public, held August 6, 2013, pursuant to which there was submitted to the qualified electors of the City questions with respect to the issuance of up to $11,900,000 in aggregate principal amount of Bonds secured by receipts of the City's Advertising and Promotion Tax. Attached hereto as Exhibit B is a true, complete and correct copy of the minutes of a duly called regular meeting of the City Council, open to the public, held August 6, 2013, reciting the adoption of the Election Ordinance, as said minutes appear in the official records of the City; at the meeting a quorum was present and acted throughout; the Election Ordinance is in full force and effect and has not been altered, amended, or repealed as of the date hereof. No petition or petitions to refer the Election Ordinance to the people under Amendment No.7 to the Constitution of the State of Arkansas has been filed as of the date hereof and the City Council has not referred the Election Ordinance to the people for adoption or rejection. Attached hereto as Exhibit C is a true, complete, and correct copy of a publisher's affidavit showing publication of the Election Ordinance in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on August 15, 2013. Attached hereto as Exhibit D is a true, complete and correct copy of a publisher's affidavit showing publication of a Notice of Special Election in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on October 30, 2013. Attached hereto as Exhibit E is a true, complete and correct copy of a Mayor's Proclamation of Election Results declaring the results of the Special Election and a true, complete and correct copy of a publisher's affidavit showing publication of the Proclamation in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on November 25, 2013. 3. The meeting of the City Council referred to in paragraph 2 hereof was open to the public in compliance with the provisions of Section 25-19-106 of the Arkansas Code Annotated, as amended and supplemented. 4814-8627-4336.1 4. The City has not adopted any by-laws or rules of procedure relating to the conduct of its meetings. 5. Regular meetings of the City Council are held on the first and third Tuesdays of each month. 6. In the City the time for filing a referendum petition is fixed at 31 days after the publication of local measures passed by the City Council of the City. IN WITNESS WHEREOF, the undersigned have hereunto set their hands this 19th day of November, 2014. CITY OF FAYETTEVILLE, ARKANSAS C By: �G�2L✓nrrrrrrr Sondra Smith, City Clerk �.`°� E• RFy'�.,� • FAYEn f--Vil_j e_r__ %y • 9 2 4814-8627-4336.1 Doc ID: 015343970007 Type; REL Kind: ORDINANCE Recorded: 08/14/2013 at 10:56:54 AM Fee Amt: $45.00 Pape 1 of 7 Washington County, AR Kyle Sylvester circuit Clerk File2013-00027823 ORDINANCE NO. 5605 AN ORDINANCE CALLING AND SETTING A DATE FOR A ELECTION ON THE QUESTIONS OF THE ISSUANCE BY THE CIT*ff t -.I) NOT TO EXCEED $1,500,000 OF HOTEL AND RESTAURANT REP RECEIPTS TAX REFUNDING BONDS FOR THE PURPOS%a-'v0F REFUNDING THE CITY'S OUTSTANDING HOTEL AND RESTAURANT GROSS RECEIPTS TAX REFUNDING BONDS, SERIES 2003, (2) NOT TO EXCEED $6,900,000 OF HOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT BONDS FOR THE PURPOSE OF FINANCING CERTAIN COSTS IN CONNECTION WITH THE RENOVATION AND EXPANSION OF WALTON ARTS CENTER, AND (3) NOT TO EXCEED $3,500,000 OF HOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT BONDS FOR THE PURPOSE OF FINANCING CERTAIN COSTS IN CONNECTION WITH A PROPOSED REGIONAL PARK; PLEDGING THE PROCEEDS FROM THE EXISTING ONE PERCENT (1.00%) HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX ORIGINALLY LEVIED BY ORDINANCE NO. 2310 TO THE PAYMENT OF THE REFUNDING BONDS AND CAPITAL IMPROVEMENT BONDS; PRESCRIBING OTHER MATTERS PERTAINING THERETO; AND DECLARING AN EMERGENCY WHEREAS, under the authority of Title 26, Chapter 75, Subchapter 6 of the Arkansas Code of 1987 Annotated (the "Advertising and Promotion Commission Act") and pursuant to Ordinance No. 2310 adopted on March 1, 1977, and as subsequently amended (the "Levying Ordinance"), the City has previously levied a one percent (1.00%) tax (the "A&P Tax") upon the gross receipts or gross proceeds (i) derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) of restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses within the boundaries of the City engaged in the business of selling prepared food for on -premises or off -premises consumption; and 0 Page 2 Ordinance No. 5605 WHEREAS, under the authority of the Advertising and Promotion Commission Act and pursuant to the provisions of Ordinance No. 4488 adopted on May 20, 2003, the City has previously issued and there are presently outstanding $1,875,000 in aggregate principal amount of the City's Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), which Series 2003 Bonds are secured by the pledge of and lien upon the City's receipts of the A&P Tax; and WHEREAS, the City's Advertising and Promotion Commission (the "Commission") by resolution adopted on May 13, 2013, has recommended that the City assist in (i) the completion of the proposed Walton Arts Center expansion and renovation (the "Walton Arts Center Improvements") and (ii) the acquisition, construction and equipping of a regional park (the "Park Improvements") through the issuance of its capital improvement bonds; and WHEREAS, the Commission has determined and the City Council concurs that the Walton Arts Center is a cultural arts and entertainment facility and its expansion and renovation will constitute a "tourism project" within the meaning of Arkansas Code Annotated (1998 Repl.) §14-170-205 which will secure and develop tourism and thereby stimulate and enhance the economic growth and well-being of the City and its people; and WHEREAS, the Commission has further determined and the City Council concurs that the City's proposed regional park will constitute a "public recreation facility" and "city park" within the meaning of Arkansas Code Annotated (2008 Repl.) § 26-75-606 and a "tourism project" within the meaning of Arkansas Code Annotated (1998 Repl.) § 14-170-205 which will secure and develop tourism and thereby stimulate and enhance the economic growth and well- being of the City and its people; and WHEREAS, the City Council has determined that there is a critical need for a source of revenue to finance the Walton Arts Center Improvements and the Park Improvements, and that the receipts of the A&P Tax could be so utilized, but only upon refunding or redemption of the Series 2003 Bonds; and WHEREAS, if approved by the electors of the City, the City has determined to issue (1) its refunding bonds in a principal amount not to exceed $1,500,000 (the "Refunding Bonds") for the purpose of refunding the Series 2003 Bonds, (2) its capital improvement bonds in principal amount not to exceed $6,900,000 (the "Walton Arts Center Bonds') for the purpose of financing a portion of the Walton Arts Center Improvements, and (3) its capital improvement revenue bonds in a principal amount not to exceed $3,500,000 (the "Park Bonds") for the purpose of financing a portion of the Park Improvements, which Refunding Bonds, Walton Arts Center Page 3 Ordinance No. 5605 Bonds and Park Bonds are to be equally and ratably secured by a pledge of and lien upon the receipts of the A&P Tax; and WHEREAS, the purpose of this Ordinance is to call a special election on the issuance by the City of the Refunding Bonds, the Walton Arts Center Bonds and the Park Bonds; NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Fayetteville, Arkansas: Section 1: That under the authority of the Constitution and laws of the State of Arkansas, including particularly the Advertising and Promotion Commission Act and Title 14, Chapter 170, Subchapter 2 of the Arkansas Code of 1987 Annotated (the "Tourism Revenue Bond Act"), and subject to approval by the electors of the City as provided in Section 2 below, there is hereby authorized the issuance of (1) the City's Hotel and Restaurant Gross Receipts Tax Refunding Bonds in the aggregate principal amount of not to exceed $1,500,000 (the "Refunding Bonds") for the purpose of refunding the Series 2003 Bonds, (2) the City's Hotel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds in the aggregate principal amount of not to exceed $6,900,000 (the "Walton Arts Center Bonds") for the purpose of financing a portion of the Walton Arts Center Improvements, and (3) the City's Hotel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds in the aggregate principal amount of not to exceed $3,500,000 (the "Park Bonds") for the purpose of financing a portion of the Park Improvements. Any bonds approved by the electors of the City may thereafter be issued in one or more series from time to time in an aggregate principal amount not to exceed the respective principal amount(s) approved by the City's electors. Such bonds as are issued by the City will be secured on a parity basis by a pledge of and a lien upon the receipts of the A&P Tax. Section 2: That there be, and there is hereby called, a special election to be held on Tuesday, November 12, 2013, at which election there shall be submitted to the electors of the City the questions of the issuance of the Refunding Bonds, the Walton Arts Center Bonds and the Park Bonds. Section 3: That the questions shall be placed on the ballot for the special election in substantially the following forms: Ouestion One: There is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the issuance of refunding bonds in a principal amount not to exceed $1,500,000 (the "Refunding Bonds"), pursuant to Title 26, Chapter 75, Subchapter 6 of the Arkansas Code of 1987 Annotated (the "Advertising and Promotion Commission Act"), for the purpose of refunding the City's outstanding Page 4 Ordinance No. 5605 Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"). If the issuance of the Refunding Bonds is approved, the Refunding Bonds shall be secured by a pledge of and lien upon the receipts of an existing one percent (1.00%) tax (the "A&P Tax") levied pursuant to Ordinance No. 2310 upon the gross receipts or gross proceeds (i) derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) of restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses within the boundaries of the City engaged in the business of selling prepared food for on -premises or off -premises consumption. Vote on the question by placing an "X" in one of the squares following the question, either for or against: FOR the issuance of Refunding Bonds in a principal amount not to exceed $1,500,000................................................................................... ❑ AGAINST the issuance of Refunding Bonds in a principal amount not to exceed $1,500,000................................................................................... 0 Question Two: There is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the issuance of capital improvement bonds in a principal amount not to exceed $6,900,000 (the "Walton Arts Center Bonds"), pursuant to Title 14, Chapter 170, Subchapter 2 of the Arkansas Code of 1987 Annotated (the "Tourism Revenue Bond Act") and Title 26, Chapter 75, Subchapter 6 of the Arkansas Code of 1987 Annotated (the "Advertising and Promotion Commission Act'), for the purpose of financing a portion of the costs of the expansion and renovation of the Walton Arts Center located within Fayetteville, (the "Walton Arts Center Improvements"). If the issuance of the Walton Arts Center Bonds is approved, the Walton Arts Center Bonds shall be secured by a pledge of and lien upon the receipts of an existing one percent (1.00%) tax (the "A&P Tax") levied pursuant to Ordinance No. 2310 upon the gross receipts or gross proceeds (i) derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) of restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses within the boundaries of the City engaged in the business of selling prepared food for on -premises or off -premises consumption. Page 5 Ordinance No.5605 Vote on the question by placing an "X" in one of the squares following the question, either for or against: FOR the issuance of Walton Arts Center Bonds in a principal amount not to exceed $6,900,000 for the purpose of financing a portion of the costs of the Walton Arts Center Improvements..........................................................0 AGAINST the issuance of Walton Arts Center Bonds in a principal amount not to exceed $6,900,000 for the purpose of financing a portion of the costs of the Walton Arts Center Improvements....................................................... ❑ Question Three: There is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the issuance of capital improvement bonds in principal amount not to exceed $3,500,000 (the "Park Bonds"), pursuant to Title 14, Chapter 170, Subchapter 2 of the Arkansas Code of 1987 Annotated (the "Tourism Revenue Bond Act") and Title 26, Chapter 75, Subchapter 6 of the Arkansas Code of 1987 Annotated (the "Advertising and Promotion Commission Act"), for the purpose of financing a portion of the costs of constructing and equipping a regional park owned by and located within the City of Fayetteville, which may include baseball fields, soccer fields and related facilities (the "Park Project"). If the issuance of the Park Bonds is approved, the Park Bonds shall be secured by a pledge of and lien upon the receipts of an existing one percent (1.00%) tax (the "A&P Tax") levied pursuant to Ordinance No. 2310 upon the gross receipts or gross proceeds (i) derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) of restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses within the boundaries of the City engaged in the business of selling prepared food for on -premises or off -premises consumption. Vote on the question by placing an "X" in one of the squares following the question, either for or against: Page 6 Ordinance No. 5605 FOR the issuance of Park Bonds in a principal amount not to exceed $3,500,000 for the purpose of financing a portion of the costs of constructing and equipping the Park Improvements...................................................................... 0 AGAINST the issuance of Park Bonds in a principal amount not to exceed $3,500,000 for the purpose of financing a portion of the costs of constructing and equipping the Park Improvements.......................................................... ❑ Section 4: That the election shall be held and conducted and the vote canvassed and the results declared under the law and in the manner now provided for Arkansas municipal elections unless otherwise provided in the Advertising and Promotion Commissions Act or the Tourism Revenue Bond Act, and only qualified voters of the City shall have the right to vote at the election. The City Clerk is hereby directed to give notice of the special election by one advertisement in a newspaper of general circulation within the City, the publication to be not less than ten (10) days prior to the date of the election. Section 5: That the results of the special election shall be proclaimed by the Mayor, and his proclamation shall be published one time in a newspaper of general circulation within the City. The proclamation shall advise that the results as proclaimed shall be conclusive unless attacked in the Circuit Court of Washington County within thirty (30) days after the date of publication of the proclamation. Section 6: That the Mayor and the City Clerk, for and on behalf of the City, be, and they hereby are authorized and directed to do any and all things necessary to call and hold the special election as herein provided and, if the issuance of the Refunding Bonds, the Walton Arts Center Bonds and/or the Park Bonds are approved by the electors, to perform all acts of whatever nature necessary to carry out the authority conferred by this Ordinance. Section 7: That all ordinances and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. Section 8: That it is hereby ascertained and declared that there is a critical need to obtain an additional source of revenue to finance needed capital improvements, including the Walton Arts Center Project and the Park Project, all in order to promote and protect the peace, health, safety and welfare of the inhabitants of the City. It is, therefore, declared that an emergency exists and this Ordinance being necessary for the immediate preservation of public peace, health and safety shall be in force and effect immediately from and after its passage. PASSED AND APPROVED this 6th day of August, 2013. APPROVED: ATTEST: L By: --__ By: z O ELD AN, Mayor SONDRA E. SMITH, C Page 7 Ordinance No. 5605 •SAYE-TEVILLE' 9 •� Mayor Lioneld Jordan City Attorney Kit Williams City Clerk Sondra Smith ayePITille City of Fayetteville Arkansas City Council Meeting Minutes August 6, 2013 City Council Meeting August 6, 2013 Page I of 13 Aldermen Ward 1 Position I —Adella Gray Ward 1 Position 2 — Sarah Marsh Ward 2 Position 1 —Mark Kinion Ward 2 Position 2 —Matthew Petty Ward 3 Position I — Justin Tennant Ward 3 Position 2—Martin W. Schoppmeyer, Jr. Ward 4 Position 1 — Rhonda Adams Ward 4 Position 2 — Alan T. Long A meeting of the Fayetteville City Council was held on August 6, 2013 at 6:00 PM in Room 219 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. Mayor Jordan called the meeting to order. PRESENT: Alderman Adella Gray, Sarah Marsh, Mark Kinion, Matthew Petty, Justin Tennant, Martin Schoppmeyer, Rhonda Adams, Alan Long, Mayor Lioneld Jordan, Assistant City Attorney Jason Kelley, City Clerk Sondra Smith, Staff, Press, and Audience. Alderman Gray arrived at 6:25 PM Pledge of Allegiance Mayor's Announcements, Proclamations and Recognitions: City Council Meeting Presentations, Reports and Discussion Items: Nominating Committee Report: Fayetteville Housing Authority Board Appointment Alderman Adams presented the Nominating Committee Report A copy of the report is attached. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDfM (479) 521-1316 City Council Meeting August 6, 2013 Page 2 of 13 Alderman Kinion moved to approve the Nominating Committee Report. Alderman Tennant seconded the motion. Upon roll call the motion passed 7-0. Alderman Gray was absent during the vote. Agenda Additions: None Consent: Approval of the July 16, 2013 City Council meeting minutes. Approved Arkansas State Highway and Transportation Department: A resolution to approve an Agreement of Understanding between the City of Fayetteville and the Arkansas State Highway and Transportation Department and to approve the attached budget adjustment of $75,000.00. Resolution 165-13 as recorded in the office of the City Clerk 2013 ADEQ E -Waste Grant: A resolution authorizing acceptance of a 2013 Arkansas Department of Environmental Quality E -Waste Grant of $25,000.00 for an &Waste coupon redemption program, and approving a budget adjustment. Resolution 166-13 as recorded in the office of the City Clerk Bid #13-38 General Construction Solutions, Inc.: A resolution awarding Bid #13-38 and approving a contract with General Construction Solutions, Inc. in the amount of $108,982.00 for construction of sanitary sewer repairs in the vicinity of the Cliffs Apartments due to Spring 2011 flooding, approving a $10,000.00 project contingency, and approving a budget adjustment. Resolution 167-13 as recorded in the office of the City Clerk Bid 413-39 Goodwin & Goodwin: A resolution awarding Bid #13-39 and approving a contract with Goodwin & Goodwin, Inc. in the amount of $1,262,647.00 for construction of water and sewer main replacements along the West Fork of the White River, approving a project contingency of $125,000.00, and approving a budget adjustment. Resolution 168-13 as recorded in the office of the City Clerk Bid #13-37 Pick -It Construction, Inc.: A resolution awarding Bid #13-37 and approving a contract with Pick -It Construction, Inc. in the amount of $403,987.00 for construction of pool building renovations at Wilson Park, and approving a fifteen percent (15%) project contingency. Resolution 169-13 as recorded in the office of the City Clerk 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting August 6, 2013 Page 3 of 13 Crafton Tull Amendment #1: A resolution approving Amendment No. 1 to the contract with Crafton Tull for construction phase services associated with renovation of pool buildings at Wilson Park in an additional amount not to exceed $15,000.00, and approving a budget adjustment. Resolution 170-13 as recorded in the office of the City Clerk Landers Toyota of Little Rock: A resolution authorizing the purchase of two (2) Toyota Tacoma pickup trucks in the total amount of $48,838.00, pursuant to a state procurement contract, from Landers Toyota of Little Rock for use by the Transportation and Water & Sewer divisions, and approving a budget adjustment. Removed from the Consent Agenda George Nunnally Chevrolet of Bentonville: A resolution authorizing the purchase of two (2) Chevrolet Tahoes in the total amount of $57,110.00, pursuant to a state procurement contract, from George Nunnally Chevrolet of Bentonville for use by the Fire Department and the Solid Waste Division, and approving two (2) budget adjustments. Resolution 171-13 as recorded in the office of the City Clerk Arkansas State Highway Department Safe Routes to School Grant: A resolution authorizing acceptance of an Arkansas State Highway and Transportation Department Safe Routes to School Grant in the amount of $81,248.00 to be utilized for construction of a pedestrian bridge along Salem Road connecting Holcomb Elementary and Holt Middle School, and approving a budget adjustment. Resolution 172-13 as recorded in the office of the City Clerk Aircraft Passenger Stairs: A resolution approving a budget adjustment in the amount of $3,500.00 to provide for an increase in the project budget for the purchase of aircraft passenger stairs for Fayetteville Executive Airport -Drake Field. Resolution 173-13 as recorded in the office of the City Clerk RFP #13-07 Everbridge, Inc.: A resolution awarding RFP #13-07 and approving a contract with Everbridge, Inc. for the provision of emergency notification services, and approving a budget adjustment in the amount of $32,000.00. Resolution 174-13 as recorded in the office of the City Clerk Alderman Adams moved to approve the Consent Agenda as read with Landers Toyota of Little Rock removed for discussion. Alderman Long seconded the motion. Upon roll call the motion passed 7-0. Alderman Gray was absent during the vote. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device forthe Deaf TDDfF Y (479) 521-1316 City Council Meeting August 6, 2013 Page 4 of 13 The followine item was removed from the Consent Aeenda for discussion Landers Toyota of Little Rock: A resolution authorizing the purchase of two (2) Toyota Tacoma pickup trucks in the total amount of $48,838.00, pursuant to a state procurement contract, from Landers Toyota of Little Rock for use by the Transportation and Water & Sewer divisions, and approving a budget adjustment. Alderman Petty moved to remove Landers Toyota of Little Rock from the Consent Agenda and table it indefinitely. Alderman Tennant seconded the motion. Upon roll can the motion passed 7-0. Alderman Gray was absent during the vote. Unfinished Business: None Public Hearine: Raze and Removal 515 E. Township Street: A resolution ordering the razing and removal of a dilapidated and unsafe structure owned by Marshall Aaron Mahan located at 515 E. Township Street in the City of Fayetteville, Arkansas. Chad Ball, Code Compliance Administrator gave a brief description of the raze and removal. Mayor Jordan opened the Public Hearing There was no public comment Mayor Jordan closed the Public Hearing Alderman Kinion moved to approve the resolution. Alderman Long seconded the motion. Upon roll call the resolution passed 7-0. Alderman Gray was absent during the vote. Resolution 175-I3 as recorded in the office of the City Clerk. New Business: RZN 13-4410 (2468 N. Crossover Rd./Lynnwood Estates): An ordinance rezoning that property described in rezoning petition RZN 13-4410, for approximately 4.66 acres located at 2468 North Crossover Road from RSF-2, Residential Single -Family, 2 units per acre, to R -O, Residential Office, subject to a Bill of Assurance. Assistant City Attorney Jason Kelley read tire ordinance. Jeremy Pate, Director of Development Services gave a brief description of the ordinance. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDn TY (479) 521-1316 City Council Meeting August 6, 2013 Page 5 of 13 Alderman Tennant: You mentioned compatibility on the 2030 Plan and you mentioned that sometimes non-residential uses when a corner is involved. The corner of 265 and Township is not part of this. Jeremy Pate: That is correct. Alderman Tennant: Since we are not talking about the corner, do you know of any examples in Fayetteville where we deviated from the 2030 Plan residential wise, to something that is not on a comer? Jeremy Pate: Honestly, I don't know the answer to that. I think we have seen form based codes be utilized more, because in those cases we know the use, we know the form of the project. The ones that come to mind for me are PZD's, because you know what the project is going to be and how it is going to function in relationship to surrounding land uses. Alderman Tennant: I would prefer to not vote since we have a tour planned. I have questions and if you could work on finding the answers, I would appreciate it. Will a u -tum be permitted at the light if you are traveling south on 265? Jeremy Pate: Yes, the Highway Department designed Highway 265 with minimum quarter mile segments. They are designed for larger vehicle to have a turning radius and still be able to make a u -turn. Alderman Tennant: Are there any other curb cuts, other than Candlewood and Township? Jeremy Pate: Not that I am aware of, but I can find out. Alderman Tennant: I don't know the process of contacting the school to see if anyone has questions about school traffic being affected from this not being residential. Jeremy Pate: By state statute we notify the school district for all our zoning actions and annexations. Alderman Tennant: What is the amount of land that has been lost by the landowner, compared to what was there before? Jeremy Pate: The Highway Department did the land acquisition and so we weren't as involved in that, but we can find out. Alderman Tennant: When you are going south on 265 and you turn at Township, if you don't make a u -turn, there is a fear that people will take a left at Township, go east and then have to make a turn around to get back north on 265. There is a driveway for the houses that are built on the south side of Township. Is that a street? Jeremy Pate: No, it is a shared private driveway. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDITTY (479) 521-1316 City Council Meeting August 6, 2013 Page 6 of 13 Alderman Tennant: Could theses people put a gate up on each side? Jeremy Pate: I don't believe so, but I will find out. Alderman Tennant: Say we do this and in two years nothing ever gets developed and then it is sold to somebody else. Does the Bill of Assurance follow that new owner? Jeremy Pate: Yes. Mayor Jordan: I know that a Bill of Assurance can only be changed by the City Council. Ben Israel, Developer: Mr. Israel spoke in favor of the ordinance. Alderman Petty: In the Planning Commission minutes, it says Commissioner Hoskins asked if you would consider the Neighborhood Services zoning district and staff said that while it wouldn't alleviate all their concerns it would some of them. You answered that you hadn't considered other zoning districts. Would you be open to considering the Neighborhood Services zoning district? Ben Israel: We were, but staff said it wouldn't be possible. Jeremy Pate: The council has the right to rezone it, if you so desire. Alderman Petty: I am confused about the logic that staff has presented for separation of uses. I do share some of their concerns about the forms of the building and Neighborhood Services is a zoning district that allows a property owner a greater degree of flexibility in exchange for committing to building in a certain way. Ben Israel: Is that a possible zoning for that? Jason Kelley, Assistant City Attorney: The council has the legal authority to zone it that way. Mayor Jordan: Jeremy, do you think that would be possible? Jeremy Pate: I think anything is really possible in terms of a request to rezone property. The Planning Commission votes on what is before them and they supported this request. I don't know why the applicant would change. I agree with what Mr. Israel indicated, because he read directly from our City Plan 2030 and I have no argument with that. I don't think staff agreed that RO would create a walk able and vibrant community in this particular location. Paul Henry: Mr. Henry spoke in opposition of the ordinance. Alderman Tennant: You live in a house that has a private drive access. Do you see people turn at the Township light and use your private drive to turn around? 113 West Mountain Fayetteville, AR 72701 (479) 5758323 accessfayetteville.org Telecommunications Device for the Deaf TDDITTY (479) 521-1316 City Council Meeting August6,2013 Page 7 of 13 Paul Henry: We do have some, but it is not a large volume because there is not a lot of reason too. What concerns us, as individual owners, is that it is a private drive and increase count could increase the cost to maintain the road due to wear and tear. Jerry Jones, owner of the proposed development change spoke about his personal home, traffic flow, signed petitions and is in favor of the ordinance. Alderman Tennant: Is there a sidewalk separating your property to Highway 265? Jerry Jones: Yes. Alderman Tennant: Is the curb and sidewalk new or was that already there? Jerry Jones: It is new. Alderman Tennant: When people take a u -turn at the light in the future, they would have to run over the curb and sidewalk to get to your property. You will see a lot of u -tum vehicles and publicly you are saying you are ok with that? Jerry Jones: It is where I choose to live. There are changes taking place in Fayetteville and there are sacrifices we all have to make. Caleb Critz, President of Hickory Park Property Owners Association spoke in opposition of the ordinance. Alderman Tennant: Can you turn left out of Hickory Park now? Caleb Critz: I can now, but I don't believe I will be able too in the future. Leslie Cameron, Secretary of Hickory Park Property Owners Association spoke in opposition of the ordinance. This ordinance was left on the First Reading. ADM 13-4408 (Bicycle Parking Code Amendments): An ordinance to amend §172.10 Bicycle Parking Rack Requirements (D)(2)(e) to reduce the minimum clearance to a fire hydrant from 15 feet to 6 feet. Assistant City Attorney Jason Kelley read the ordinance. Jeremy Pate, Director of Development Services gave a brief description of the ordinance. Alderman Petty: Where did the original rules come from? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDIM (479) 521-1316 City Council Meeting August 6, 2013 Page 8 of 13 Jeremy Pate: We do research on peer cities and look at requirements. For fire codes, they are adopted by the state. For bicycle parking ordinance we did an extensive study in 2002 and there is a national standard for bicycle parking and ratios. We recently updated that about a year ago to reflect changes in those standards. Alderman Gray moved to suspend the rules and go to the second reading. Alderman Marsh seconded the motion. Upon roll call the motion passed unanimously. Assistant City Attorney Jason Kelley read the ordinance. Alderman Long moved to suspend the rules and go to the third and final reading. Alderman Adams seconded the motion. Upon roll call the motion passed unanimously. Assistant City Attorney Jason Kelley read the ordinance. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed unanimously. Ordinance 5603 as recorded in the office of the City Clerk Amend §72.58 Off -Street Parking Facilities; Rules and Rates: An ordinance to amend §72.58 Off -Street Parking Facilities; Rules and Rates by enacting a new subsection (l) Electric Vehicle Charging Station. Assistant City Attorney Jason Kelley read the ordinance. Peter Nierengarten, Director of Sustainability & Strategic Planning gave a brief description of the ordinance. Alderman Marsh: I noticed on the sign it says it is only limited from 8:00 a.m. to 6:00 p.m. Does that mean that after 6:00 p.m., any vehicle could park there or does it continue to be reserved for electric vehicles? Peter Nierengarten: I believe it says you must pay the parking meter. Don Marr, Chief of Staff: Rather than have one single space on a lot have a different rule than the entire lot, we wanted the pay period to be equivalent to the pay period for every other space. What concerns me is that if it confused you Alderman Marsh, we need to have wording that is clearer, because it would be ticketed as an electric vehicle space. It isn't a lot we would monitor after 6:00 p.m. because it is not a paid lot after 6:00 p.m. Alderman Marsh: Maybe if there were two different signs on the same post, electric vehicle parking only; pay during these hours. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDr TY (479) 521-1316 City Council Meeting August 6, 2013 Page 9 of 13 Peter Nierengarten: We can work with the Parking Division and see if we can come up with something a little clearer. Alderman Adams: Can a bicycle charge at an electric car charging station? Peter Nierengarten: The plug is 220 volts and it is only available on electric cars. Electric bicycles use a 110 receptacle. Alderman Gray moved to suspend the rules and go to the second reading. Alderman Marsh seconded the motion. Upon roll call the motion passed unanimously. Assistant City Attorney Jason Kelley read the ordinance. Alderman Adams moved to suspend the rules and go to the third and final reading. Alderman Marsh seconded the motion. Upon roll call the motion passed unanimously. Assistant City Attorney Jason Kelley read the ordinance. Alderman Gray: I am happy that we have done this and it is a good thing for our progressive city to encourage electric cars. Thank you, Peter. Mayor Jordan: I too would like to thank Peter for his work on this and the Parking Department. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed unanimously. Ordinance 5604 as recorded in the office of the City Clerk Special Election for HMR Bonds: An ordinance calling and setting a date for a special election on the questions of the issuance by the City of (1) not to exceed $1,500,000 of Hotel and Restaurant Gross Receipts Tax Refunding Bonds for the purpose of refunding the City's outstanding Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003, (2) not to exceed $6,900,000 of Hotel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds for the purpose of financing certain costs in connection with the renovation and expansion of Walton Arts Center, and (3) not to exceed $3,500,000 of Hotel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds for the purpose of financing certain costs in connection with a proposed Regional Park; pledging the proceeds from the existing one percent (1.00%) Hotel, Motel and Restaurant Gross Receipts Tax originally levied by Ordinance No. 2310 to the payment of the Refunding Bonds and Capital Improvement Bonds; prescribing other matters pertaining thereto; and declaring an emergency. Assistant City Attorney Jason Kelley read the ordinance. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDfiTY (479) 521-1316 City Council Meeting August 6, 2013 Page 10 of 13 Paul Becker, Finance Director gave a brief description of the proposed election. Don Marr, Chief of Staff: In our staff memo, we have budget impact as none. There is actually a budget impact; it is the cost of the special election which will need to be flmded because there is no other scheduled election for November 12, 2013. Aubrey Shepherd: Mr. Shepherd voiced his opinion about the ordinance. Greg Harton, NWA Media: In the ordinance when it refers to the Regional Park, does that refer only to the sight at Cato Springs and I-540? Could you detail the use of the $3.5 million in spending that would take place if the bonds are approved and how that will be divided among the different uses at the park? . Connie Edmonston, Director of Parks and Recreation: The use of the $3.5 million would help add three baseball fields and accommodate all the parking. A discussion followed about the use of the money for the Regional Park for the upcoming years. Terri Trotter, Walton Arts Center: We are thrilled that the A&P brought this forward and that you are considering sending this bond issue to a public election. We have a conceptual plan to add about 30,000 square feet of additional space to WAC. The goal is to connect WAC to the activity happening on Dickson Street to add additional space for events. We believe this will allow us to host more events and bring more people into the city. Mayor Jordan: How old is the Walton Arts Center? Terri Trotter: 21 years old. Part of the plan we have is to refurbish some of the equipment. Mayor Jordan: How long have you needed a renovation? Terri Trotter: We have not gone through a major renovation ever. There was a surface level renovation about ten years ago, replacing the carpeting, seats in the theatre and wall coverings. A discussion followed about the use of the money for the Walton Arts Center for the upcoming years. Steve Clark, Chamber of Commerce President: I would like to compliment Mayor Jordan and members of the council and to thank you. This ordinance that is being considered is best described as an economic development infrastructure ordinance. It is an infrastructure that would be developed as parks, arts, playgrounds and people and is an infrastructure that will flourish and thrive. You have empowered everybody in the City of Fayetteville who is of voting age to decide how they want to play a part in this. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayettevil le. org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting August 6, 2013 Page 11 of 13 Alderman Long: How did we come up with $6.9 million for the Walton Arts Center expansion and $3.5 million for the Regional Park? How did we determine those numbers specifically? Marilyn Heifner, Executive Director for the A&P Commission: The WAC came to the A&P Commission and asked for $6.9 million to expand the center and as we looked at a twenty five (25) year issue of new bonds there was fortunately $3.5 million left over after we paid off the bonds that we had. Ms. Heifner continued to speak about why the Regional Park would be an advantage Alderman Tennant: I would like to thank Marilyn for her work on this. Alderman Marsh: Does this lock us into a sports megaplex Regional Park or does it leave room to include Kessler Mountain into this plan? Jason Kelley, Assistant City Attorney: It says it is financing a portion of the cost of constructing and equipping a Regional Park owned and located within the City of Fayetteville which may include baseball fields, soccer fields and related facilities. Alderman Gray: I like the term economic development infrastructure and that is what I see this ordinance as. It is time that we take care of our young people. Alderman Long: I would like us to consider making this a more equitable split between the two. I think it would be a good compromise and help us to accomplish more at the Regional Park. Alderman Tennant: Everyone needs to keep in mind that passing this in its entirety, doesn't pay for all of the Regional Park and certainly doesn't pay for all the Walton Arts Center expansion. The WAC is moving forward with fundraising efforts and I am hoping that the Regional Park can also benefit from fundraising. Paul Becker gave a brief statement declaring that these are preliminary numbers at this point and time. Jason Kelley: Kit Williams requested at Agenda Session along with Gordon, our bond counsel that they would be present on August 20, 2013 to be able to address specific legal issues. Our bond counsel is not here tonight, so I would request that we do not complete this tonight. Mayor Jordan: What is your opinion? Dennis Hunt, Stephens Inc: Mr. Wilboum, Mr. Williams, Mr. Becker and I have thoroughly reviewed the ordinance. If you want to delay that is fine, but everybody has had an opportunity to review and comment. The author of the ordinance received our comments and made the modifications. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDD/1 TY (479) 521-1316 City Council Meeting August 6, 2013 Page 12 of 13 Alderman Schoppmeyer moved to suspend the rules and go to the second reading. Alderman Adams seconded the motion. Upon roll call the motion passed unanimously. Assistant City Attorney Jason Kelley read the ordinance. Alderman Tennant moved to suspend the rules and go to the third and final reading. Alderman Gray seconded the motion. Upon roll call the motion passed 7-1. Alderman Long voting no. Assistant City Attorney Jason Kelley read the ordinance. Mayor Jordan: I have been on this council since 2001 and we have talked about the Regional Park since then. We have talked about renovating the Walton Arts Center and making expansions and we know that this park will help the youth of this city. If we make any kind of investment, it should be in children. It will help drive the economic engine of this city and we need this. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed unanimously. Alderman Adams moved to approve an emergency clause. Alderman Tennant seconded the motion. Upon roll call the motion passed 7-1. Alderman Long voting no. Ordinance 5605 as recorded in the office of the City Clerk City Council Agenda Session Presentations: 2012 Audit Management Letter Report — Tony C. Uth, Jr., Audit Committee Chair Budget Reserves Discussion — Paul Becker, Finance Director City Council Tour: August 12, 2013 at 5:00 pm - RZN 13-4410 (2468 N. Crossover RdJLynnwood Estates Announcements- Alderman Gray: We have some openings on the Boards and Commissions of the city and we would like for you to go to our website and look at the openings. Don Marr: This Thursday, August 8, 2013 at 5:30 p.m. to 7:00 p.m., there will be an open house for our Eastgate Master Planning at Happy Hollow Elementary. Gulley Park will be having their final concert for this season and the group is Uncrowned Kings . It will begin at 7:00 p.m. on August 8, 2013. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDfM (479) 521-1316 City Council Meeting August 6, 2013 Page 13 of 13 The City Council has a tour scheduled for this Monday, August 12, 2013 at 5:00 p.m. The council will meet at City Hall. Adjournment: 8:15 p.m. Lioneld Jo an, ayor J Sondra E. Smith, City Clerk/Treasurer 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDrM (479) 521-1316 Nominating Committee Report Housing Authority Board HOUSING AUTHORITY BOARD The Housing Authority Board recommends the following appointments with the approval of the City Council. • Christopher Terry - One Unexpired Term Ending 12/28/14 NORTHWEST ARKANSAS DEMOCRATGAZETTE NORTHWEST ARKANSAS THE MORNING NEWSW SPROF INGDALE N�;WSPAPERSLLC THNORTH ESTNG ARK NSAS RMRS NORTHWEST ARKANSAS TIMES BENTON COUNTY DAILY RECORD 212 NORTH EASTAVENUE, FAYETTEVILLE, ARKANSAS 72701 1 P.O. BOX 1607, 727021 47944817001 WWW.NWANEWS.COM AFFIDAVIT OF PUBLICATION I, Holly Andrews, do solemnly swear that I am the Legal Clerk of the Northwest Arkansas Newspapers, LLC, printed and published in Washington and Benton County, Arkansas, bona fide circulation, that from my own personal knowledge and reference to the files of said publication, the advertisement of: City of Fayetteville - Ordinance 5605 Was inserted in the Regular Editions on: August 15, 2013 Publication Charges: $ 557.71 i i Holry,AhArews Subscribed and sworn to before me This ag day of 0 OAS , 2013. `Notary Public My Commission Expires: T4/ae/v- ,eunune� CATHY J. WILES �"" Benton County .� ` M Commission Expire, '�Z ,�.,�.� yFebruary 20, 2014 **NOTE** Please do not pay from Affidavit. Invoice will be sent. RECE Vi=m AUG 2 9 2013 CITY OF FAYETTEVILLE CITY CLERK'S OFFICE r1o�iGC ORDINANCE NO. 5605 AN ORDINANCE CALLING AND 'SEQU A DATE ay OFCI A SPECIAL ELECTION THEE QUESTIONS THE ISSUANCE BY THE CITY OF (1) NOT TO EXCEEQ$l,600.00DOFHOTELMDRESTAU�W ARKANSAS GROSS RECEIPTS TAX REFUNDING BONDS FOR TPOSE OF REFUNDING THE CITY'S OUTSTANUTSTANDING HOTEL AND RESTAURANT GROSS RECEIPTS TAX REFUNDING ::BONDS, SERIES 20TA (2) NOT TO EXCEED R VENUE$6,900,000CA IT HOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT BONDS FOR THE PURPOSE OF FINANCING CERTAIN COSTS IN . A CONNECTION NON WITH THE -,RENOVATION AND EXPANSIONST RESTAURANT ARTS CENTER,ANO(3)NOTTOEXCEED . ;53;500,000 OF HOTEL AND RESTAURANT GROSS ECTAX AND TOURISM' :.REVENUE CAPITAL IMPROVEMENT BONGS FOR THE PURPOSEFINANCING '.CERTAN PROCEEDS IN CONNECTION WITH A PROPOSED REGIONAL PARR K PLEDGING THE PROCEEDS FROM THE EXISTING ONE PERCENT LEVIED HOTEL, MOTEL AND +2611)10 THE GROSS RECEIPTS SAX ORIGINALLY LEVIED BY ORDINANCE N0: ;h2ON T' THE.PAYMETIYpF;THE:RERUNDING BONDS AND CAPITAL IMPROVEMENT BONGS; PRESCRIBING OTHER`MATTERS PERTAINING THERETO; AND DECLARING AAN:EMEflGENCV '.u{,}yHEREAS antler the authority of Title 26, Chapter 75, Subchapter 6 of the Arkansas ;:Code` of 4887 Anhotatetl$he "Advertising antl Promdtion Comm(ssion Act"j end Wasu- tent_to Ordinance No. 2310 adopin'on March 1, 1977, and es subsequently, amendn '(rQe "Levying Ordinance"), the CIty hes previousry lavietl a one percent (1.00%) taz (the ABP Tax") upon the gross receipts br grass proceeds til tledvetl from ranting; leasing t„''c�,othervrise furnishing hotel or molal accommnaticns for profit wHhln the boundaries of'the City and p) of restaurants, cafes, cafeterias, delis, dilve-in reslauranls,. carryrou[ restaurants, concession stands, convenience stores, grocery store-reslaurents, crushem 'and similar businesses within the boundaries ofthe City engaged in the business of Sell- ing -prepared food far on -premises ocoH-premises. consumption; and W�EBEAS under the authority of the Advertising and Promotion Commission Act and onsuant to the provisions of Ordinance No. 4488 adopted on May 20, 2D03, the City has 3 N"Ousiy Isauedantl them we presently outstanding $1,875,000 in aggregate principal amqunt of the City's Hotel And Restaurant Gross Receipts Tex RefunNng Bands, Series 20 3:(On "Series 2003 Bond., which Series 2003 Bontls are securetl by the pledge of 'nand fish upon the City's receipts of the ASP Tax; and WHEREAS the City's Ativenising and Promotlon Commission Ohe "Commission") by %resolu0on adopted on May 13, 2013, has recommentlatl that meCiry assist In (A the ^completion .1 'he phulicsed Walton Arts Center axpenalan and renovation (the "Walton ils Center Improvements') antl fiq IDs a.o.leition, construction antl equipping of,e regional park (the "Park Improvements") through the Issuance of its capHai enprovsmant 'bond.; and - WHEREAS the Commission has dotem ined.and the City Council poncum that the Walton ARS Center is a cultural arts and entertainment facility and its expansion and mino- Wvetlon Will constitute a "tourism project' within the meaning of Arkansas Code Annotated (1998 Repl.) §14-170-205 which vidl secure and develop tourism and thereby shmiulale and enhance the economic growth and well-being tithe City and its people; and WHEREAS the Commission has further determined and the City Council concurs that the City's proposed regional park will constitute a "public recreation facility' and "city park" within the meaning of Arkansas Code Annotated (2008 Repl.) § 26-75-606 and a "OurP -ism project" within the meaning of Arkansas Code Annotated (1998 Repl.) § 14-170-205 :which will secure and develop tourism and thereby stimulate and enhance the ecohomlc ;growth and Well-being of the City and he people; and WHEREAS the City Council AAs determined that there Is a critical need for a source of menus to finance the Walton Arts Center improvements and the Park Improvements. and that the receipts of the A&P Tax could be so utilized, but only upon refunding or. redemption of the Series 2003 Bonds, and WHEREAS if approved by the electors of the, City, the City has determined to issue (1) Its refunding bonds in a principal amount not to exceed $1,600,000 (the "Refunding Bonds") for the purpose of refurs ing the Series 2003 Bonds, (2) its capital improvement bonds in principalamount not to exceed $6,900,000 (Ne "Walton Arts Center Bonds') for the purpose of financing a portion of the Walton Ads Center Improvements, and (3) He capital. improvement revenue bons M a principal amount not to exceed $3,500,000 (the ."Perk Bonds") for the purpose of financing a portion of the Park Improvements, which Refunding Bonds, Welton Arts Center Bonds and Park Bonds are to be equally and rat 'ably securetl by a pledge of and lien Troon the receipts of the AOP Tax; and - WHEREAS the purpose of this Ordinance is to,call a special election on the Issuance by the City of Refunding Bonds, the Welton Arts Center Bonds and the Park Bonds; ,NO.W,. THEREFORE, BE IT ORDAINED by the ally Council of the City of Fayetteville, � t: That under the authority of the Constitution and laws of the State of 3rArkenses, Including particularly the Advertising and Promotion Commission Act and ,' Title 14, Chapter 170, Subchapter 2 of the Arkansas Code of. 1987 Annotated (the "tourism Revenue Bond Act'), and subject to approval by the electors of the,City as {provlded in Section 2 below, there is hereby authorized the issuance of (1) the City's ;Hotel and Restaurant Gross Receipts Tax Refunding Bonds in the aggregate principal Y4mcunt of not to exceed $1,500,000 Qhs "Refunding Bands) for the purpose of refund Iqg the Senea 2003 Bonds, (2) the City's Hotel antl Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds in the aggregate principal amount of not twexceed $6,900,000 (the "Walton Arts Center Bonds') for the purpose of financing a r •portion of the Welton Arts Center Improvements, and (3) the City's Hotel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds in the aggregate ?: principal amount of not to exceed $3,500,000 (the "Park Bonds") for the purpose of .. financing a portion of the Perk Imbrovements. Any bonds approved by the electors of ^:the City may thereafter be issued in one or more series from time to time in an eggre- }gate principal amount not to exceed the respective principal amounts) approved by the City's electors. Such bons as are Issued by the City will be secured on a parity basis bye pledge of and a lien upon the receipts of IDs A&P Tax.. %-YfiQktlAJLli,2• That there be, and there is hereby called, a special election to be hold on ,..7uesday, November 12, 2013, at which election there shall be subtpitted to the'elec- tons of the City the questions of the Issuance of the Refunding Bonds, the Walton. Arts Center Bonds and the Park Bonds. $ggJ(.gp-$; That the questions Shall be placed on the ballot for the special election In ._substantially the following foams; Question One: Thom is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the issuance of refunding bonds in a prinrppal amount not to;exceed $1,500,000 (the "Refunding Bonds"), pursuant to Tile 26. Chapter 75. Subchapter 6 of the Arkansas Code of 1987.Annotid d (the "Advadlsing and Promotion Commission Act'), for the purpose ofrefunding'the City's outstanding Hoteland Restaurent Gross Receipts Tax Refunding Bond., Sade. 2003 Oh. "Series 20M Bands"). if Me two- ance of the Refunding Bends is approved, the Refunding Bonds shall be secured by a pledge of and lien upon the receipts of an existing one percent (1.00%) tax One "A&P Tax') levied pursuant to Ordinance No. 2310 upon the gross receipts or grossproceeds O,dedvad}rentmntipg,leasingorothervrimiumishh hotelormotel accommodations for profit within the boundaries of the City antl Qi) of restaurants, cafes, cafeterias, delis, drive -In restaurarls, carry -out restaurants, concession stantls, convenience stores, grocery store -restaurants, caterers and similar businesses within the boundaries of the City engaged in the business of selling prepared food for 0o- premises orbH-premisas Consumption. - Vote on Me question by placing an "X" in one of the squares following the question, either far or against: FOR the Issuance of Refunding Bends in a principal amount not to exceed $1,500,000 ................................................................................... :AGAINST the issuance of Refunding Bonds in a principalamount not to exceed $1.500101:0- ................................................ ...................... - "Question Two• ' There is submitted to the qualified electors of Me City of Fayetteville, Arkansas, the question of the issuance of capital Improvement bends in a principal amount not to exceed $6,900,000 (the "Walton Arts Center Sandal, pursuant to Title 14, Chapter i:..,170, Subchapter 2 of Me Arkansas Code of 1987 Annotated (the "Tourism Revenue Bond Act') antl TIM, 26, Chapter 76. Subohapter 6 of Me Arkansas Code of 1987 Ahnotated (the "Advertlem; and Promotion Comrnlsslon Acf), far the purpose of financing a portion of the costs of the expansion and renovation of the Walton Aria "Center lacetetl wkhirt Fayetteville, (the "Walton Art. Center Improvements'). 0 the e�-=once pf the Welton Arts Center Bonds Is approved, the Walton Ads Center Bonds .hall be secured by a pledge of and Ilan upon Me receipts of an existing one percent (1:00%) tax Rhe "A&P Tax") levied pursuant to Ordinance No. 2310 upon the gross receipts.or gross proceeds O derived from renting, leasing or otherwise furnishing" hotel or motel accommodations for profit within the boundaries of the City and (O Of restaurants, cafes, cafeterias, dais, drive -Int restaurants; carry -out restaurants. '. "name ion stands, convenience stores, grocery store -restaurant& caterers and similar businesses Within the boundides of the, City engaged In the business of selling k'.prepared food for on -premises or off -premises -consumption. Vote on,the question by placing an "X" in one of the squares following the question, - eltherfororagainst: ' y;FOR theissuanceof Welton Ads Center Bonds in a principal amount not to exceed $6,900,000 for the purpose of financing a portion of the costs of the Walton Arts the issuance of Walton Ads Center Bonds in a principal amount not to ,900,000 for the purpose of financing a. portion of the costs of the Walton r Improvements,..........................:........................... e is submitted to the qualified electore of the City of Fayetteville, Arkansas, the lion of the issuance of capital improvement bonds In principal amount not to ad $3,500,000 (the "Park Bonds"), pursuant to Title 14, Chapter 170, Subchapter the Arkansas Coon of 1987 Annotatad (the "Tourism Revenue Bond Act-) and 26, Chapter 75, Subchapter 6 of the Arkansas Code of 1967 Annotated (the arguing and Promotlon Commission Act"), for the purpose of financing a portion e. costs of constructing and equipping a regional park owned by and located n. the City of Fayetteville, which may include baseball fields, soccer fields and Park Bands stall be secured by pledge of and Ilan upon the receipts of an exhl- one percent (1.00%) tax (the "A&P. Tax j levied pursuant to Ordlnarwe No. 2310 n the gross receipts or gross proceeds O derived from reefing, leasing or other- s furnishing hotel or motel accommodations for profit within the boundaries of City and (O of restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out iimllar businesses within the boundaries ofthe City engaged In the business prepared two for on -premises or oli-premises consumption. he question' by placing an "X" in one of the squares fallowing the question, oragainst - Issuance of Perk Bonds In a principal amount not to exceed $3,500,000 for xse of Mincing a portion of the costs of gonstructing and equipping the Park nems ..................................................... the issuance of Park Bonds in a principal amount not to exceed $3,500,000 moose of financing a portion of the costs of constructing and equipping the rovements..................... .... ... .................... ...... That the eleyllon shall be held end conducted and the vote canvassed and declared under the law and in the manner now provided forArkansas munlcl- )s unless otherwise provided in the Advertising and Promotion Commissions Tounsm Revenue Bond Aat and only qualified voters of the Dry shall have vote at the election. The City Clerk Is hereby directed to give notice of the alion by one advertisement In a newspaper of general circulation wMh Me rblleatlon to be not less than ten (10) days prior to Me date of the election. That the results of the special election shall be piodaaned by the Mayor, clarrnalon shall be published onetime In a newspaper of general circulation v, Yuu u , u e yro ---- That u, n.That the Mayorand the City Clerk, for and on behalf of the City, be, and they authorized and directed to do any and all things necessary to call and hold I election as herein provided and, If the issuance of the Refunding Bonds. I Arts Center Bonds and/or the Park Bonds are approved by the electors; to I acts of whatever nature necessary to tarty out the authority conferred by ince. That all ordinances and parts thereof in conflict herewith are hereby repeated int of such conflict 1 That it is hereby ascertained and declared that there is A critical need an additional eoume.of revenue to -finance needed capital Improvements, he Walton Alts Center Project and the Park Project, all in order to pronate it Me peace, health,:safety and welfare of the Inhabitants of the City. It Is, declared that an emergency exists and this Ordinance being necessary for Irate preservation of public peace, health and safety shat be in force and edlately from shot after Its passage. d APPROVED this 6th day of August, 2013 ATTEST: Mayor SONDRA E. SMITH, City NORTHWEST ARKANSAS DEMOCRAT'SCEITE THE MORNING NEWS OE SPRINGDALE ,,WEST ARKANSAS THE MORNING NEWS OF ROGERS NO -PT iSPAMRS FNTON LEST ARKANSAS LLC BENTON COUNTY GAILY RECORD 212NORTH EAST AVENUE, FAYETEVILLE, ARKANSAS 72701 P.O.BO%1607.72702 479'442-7700 WI' AN S.COM AFFIDAVIT OF PUBLICATION I, Holly Andrews, do solemnly sweaz that I am the Legal Clerk of the Northwest Arkansas Newspapers, LLC, printed and published in Washington and Benton County, Arkansas, bona fide circulation, that from my own personal knowledge and reference to the files Of said publication, the advertisement of: City of Fayetteville - Notice of Special Election Was inserted in the Regular Editions on: October 30, 2013 Publication Charges: $ 448.50 I ___ Holly ndrews Subscribed and sworn to before me This �day of DC-, 2013. Notary Public My Commission Expires: Z(1�ti 7N"i 3 -1 M/-�i r4S"�L�P4J 4 **NOTE** Please do not pay from Affidavit. Invoice will be sent. RECEIVED OCT 3 0 2013 CITY CLE"YE OFFICE NORTHWEST ARKANSAS DEMOCRAPGAZETTE NORTHWEST ARKANSAS THE THE MO MORNINOF GN W SPR ROGERS NORTHWETIMES NOWSPAPERSLLC ENTON COUNTY DAILY RECORD 212 NORTH FAST AVENUE, FAYETTEVILLE, ARKANSAS 727011 P.O. Box 1607, 72702 479,442.17001 WWW,NWANEWS.COM AFFIDAVIT OF PUBLICATION I, Holly Andrews, do solemnly swear that I am the Legal Clerk of the Northwest Arkansas Newspapers, LLC, printed and published in Washington and Benton County, Arkansas, bona fide circulation, that from my own personal knowledge and reference to the files of said publication, the advertisement of: City of Fayetteville- oRuFeuElTeEUt 1 11oTAfc'RIeGjN: "S 0A8 r1E. Public Notice -Proclamation rveool=n'MlnnoN"o> cuuiNo C .r �(THPa,RE LT,S,ZO,�ELEQTION .. Y'ETfEVIL�CEnARKnnSASE�ITY Was inserted SU the Regular Ed1t10r1S On: OFF 70 T}1E PEOPLsE�OF771�E GIiY OF FAME November 25, 2013 ;oAEEr7Nos it}>"=. Publication Charges: $ 214.50 Holly ndrews Subscribed and sworn to before me This 'j day of �(G 2013. Notary Public My Commission Expires: I mai°error `` Ci:YHYJ.��Lnty _ t IsenloCounty 11 .. fres l�Ay Co 7missicn Exp f e `y n 2014 11 **NOTE** Please do not pay from Affidavit. Invoice will be sent. 305,.a. Speclal Election was held, ice of three bondspledgedto be Motel and Restaurant tax which is rises, ryor of the M of Fayetteville, by. Id hereby proclaim the following to reoial Election: . ling Bonds nds in a principal amount not to, Ig bonds In a principai amount not to Arts. Center Bonds s -center Bonds in a Principalamount me of financing a porti6n of the costs a:: Vts Bonds in a principal amount not to; financing a portion of the costs of the Perk Bonds Is In a pAncipal amount not to exceed 3 a portan,of the costs of constructing ndsin a principal amount notto.exceed g E portion of the costs of constructing yor shall be conclusive unless attacked unty Within thirty. days after the data of punto set my hand and caused the seal of November, 2013. TEST: . CERTIFICATE OF WASHINGTON COUNTY BOARD OF ELECTION COMMISSIONERS ASCERTAINING AND DECLARING RESULTS OF THE CITY OF FAYETTEVILLE SPECIAL ELECTION IN WASHINGTON COUNTY, ARKANSAS STATE OF ARKANSAS ) COUNTY OF WASHINGTON ) We, the undersigned members of the Board of Election Commissioners of Washington County, Arkansas, do hereby certify the following Washington County results in the November 12, 2013 Election on the question of: Question 1: Refunding Bonds There is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the issuance of refunding bonds in a principal amount not to exceed $1,500,000 (the "Refunding Bonds"), pursuant to Title 26, Chapter 75, Subchapter 6 of the Arkansas Code of 1987 Annotated (the "Advertising and Promotion Commission Act"), for the purpose of refunding the City s outstanding Hotel and Restaurant Grass Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"). If the issuance of the Refunding Bonds is approved, the Refunding Bonds shall be secured by a pledge of and lien upon the receipts of an existing one percent (1.00%) tax (the "A&P Tax") levied pursuant to Ordinance No. 2310 upon the gross receipts or gross proceeds (i) derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) of restaurants, cafes, cafeterias, dells, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses within the boundaries of the City engaged in the business of selling prepared food for on -premises or off -premises consumption. FOR the issuance of Refunding Bonds in a principal amount not to exceed $1,500,000 AGAINST the issuance of Refunding Bonds in a principal amount not to exceed $1,500,000 FOR: 3705 7r. -trunr- CrI GP•L � 1 r AGAINST: 571 u:. Question 2: Walton Arts Center Bonds There is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the issuance of capital improvement bonds in a principal amount not to exceed $6,900,000 (the "Walton Arts Center Bonds"), pursuant to Title 14, Chapter 170, Subchapter 2 of the Arkansas Code of 1987 Annotated Cthe "Tourism Revenue Band Act") and Tide 26, Chapter 75, Subchapter 6 of the Arkansas Code of 1987 Annotated (the "Advertising and Promotion Commission Act'), for the purpose of financing a portion of the costs of the expansion and renovation of the Walton Arts Center located within Fayetteville, (the "Walton Arts Center Improvements"). If the issuance of the Walton Arts Center Bonds is approved, the Walton Arts Center Bonds shall be secured by a pledge of and lien upon the receipts of an existing one percent (1.00a%) tax (the "A&P Tax") levied pursuant to Ordinance No. 2310 upon the gross receipts or gross proceeds (i) derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) of restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses within the boundaries of the City engaged in the business of selling prepared food for on -premises or off -premises consumption. FOR the issuance of Walton Arts Center Bonds in a principal amount not to exceed $6,900,000 for the purpose of financing a portion of the costs of the Walton Arts Center Improvements AGAINST the issuance of Walton Arts Center Bonds in a principal amount not to exceed $6,900,000 for the purpose of Financing a portion of the costs of the Walton Arts Center Improvements FOR: 3640 AGAINST: 666 Question 3: Park Bonds There is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the issuance of capital improvement bonds in principal amount not to exceed $3,500,000 (the "Park Bands"), pursuantto Title 14, Chapter 170, Subchapter 2 of the Arkansas Code of 1987 Annotated (the "Tourism Revenue Bond Act") and Title 26, Chapter 75, Subchapter 6 of the Arkansas Code of 1987 Annotated (the "Advertising and Promotion Commission Act"), for the purpose of financing a portion of the costs of constructing and equipping a regional park owned by and located within the City of Fayetteville, which may include baseball fields, soccer fields and related facilities (the "Park Project'7. If the issuance of the Park Bonds is approved, the Park Bands shall be secured by a pledge of and lien upon the receipts of an existing one percent (1.0045) tax (the "A&P Tax") levied pursuant to Ordinance No. 2310 upon the gross receipts or gross proceeds (1) derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (it) of restaurants, cafes, cafeterias, dells, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses within the boundaries ofthe City engaged in the business of selling prepared food for on -premises or off -premises consumption. FOR the issuance of Park Bonds in a principal amount not to exceed $3,500,000 for the purpose of financing a portion of the costs of constructing and equipping the Park Improvements AGAINST the issuance of Park Bonds in a principal amount not to exceed $3,500,000 for the purpose of financing a portion of the costs of constructing and equipping the Park Improvements FOR: 3682 AGAINST: 628 Returns of the votes for the City of Fayetteville, Special Election in Washington County, Arkansas have been delivered by us to the Washington County Clerk. We further certify that the polls were open from 7:30 A. M. until 7:30 P.M., that only the duly appointed election officials made due returns of the votes cast, and that we have canvassed the votes as required bylaw. IN TESTIMONY WHEREOF, we have hereinto set our hands this November 15, 2013. Board of Election CommissiAters, Washington County AR l Rende Oelschlaeger, lUmber r �7 Peter Loris, Member CERTIFICATE I CERTIFY THAT THIS INSTRUMENT 1S A TRUE COPY OF THE ON FILE IN THIS OFFICE ATE_ 1 BECKY LEWAL EN - COUNTY CLERK^ CLOSING CERTIFICATE AND REQUEST OF THE CITY The undersigned Mayor and City Clerk of the City of Fayetteville, Arkansas, a duly organized municipality and political subdivision of the State of Arkansas (the "City"), do hereby certify, represent, covenant and request as follows: 1. The undersigned are the duly elected, qualified, and acting Mayor and City Clerk of the City, and as such officials have in their possession or have access to the official books and corporate records of the City. This Certificate is executed and delivered in connection with the issuance of the City's $10,980,000 Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Bonds"). 2. Attached hereto as Exhibit A is a true, complete and correct copy of Ordinance No. 2310 (the "Levying Ordinance"), duly adopted by a majority of the Board of Directors of the City at a duly called regular meeting of the Board of Directors, open to the public, held March 1, 1977. The Levying Ordinance levies a one percent (1%) tax upon certain gross receipts derived by hotel, motel and restaurant establishments within the City (the "Tax"). The Levying Ordinance is in full force and effect and has not been repealed as of the date hereof, except as specifically described in the next succeeding paragraph. No petition or petitions to refer the Levying Ordinance to the people under Amendment No. 7 to the Constitution of the State of Arkansas have been filed as of the date hereof, and the City Council has not referred the Levying Ordinance to the people for adoption or rejection. Attached hereto as Exhibit B are true, complete and correct copies of (i) Ordinance No. 2315, duly adopted by a majority of the Board of Directors of the City at a duly called regular meeting of the Board of Directors, open to the public, held March 15, 1977, (ii) Ordinance No. 2648, duly adopted by a majority of the Board of Directors of the City at a duly called regular meeting of the Board of Directors, open to the public, held July 15, 1980, (iii) Ordinance No. 2711, duly adopted by a majority of the Board of Directors of the City at a duly called regular meeting of the Board of Directors, open to the public, held March 24, 1981, (iv) Ordinance No. 2869, duly adopted by a majority of the Board of Directors of the City at a duly called regular meeting of the Board of Directors, open to the public, held October 19, 1982, (v) Ordinance No. 4303, duly adopted by a majority of the City Council at a duly called regular meeting of the City Council, open to the public, held March 20, 2001, and (vi) Ordinance No. 4317, duly adopted by a majority of the City Council at a duly called regular meeting of the City Council, open to the public, held June 5, 2001 (collectively, the "Amending Ordinances"). Each of the Amending Ordinances were adopted for the purpose of amending and supplementing the Levying Ordinance and, except with respect to the effects attributable to the other Amending Ordinances listed in this paragraph, none of the Amending Ordinances have been altered, amended or repealed as of the date hereof. No petition or petitions to refer any of the Amending Ordinances to the people under Amendment No. 7 to the Constitution of the State of Arkansas have been filed as of the date hereof, and the City Council has not referred any of the Amending Ordinances to the people for adoption or rejection. Attached hereto as Exhibit C is a true, complete, and correct copy of Ordinance No. 5713 (the "Bond Ordinance"), duly adopted by a majority of the City Council at a duly called regular meeting of the City Council, open to the public, held September 16, 2014. The Bond Ordinance 4840-8634-9600.2 authorizes the issuance, sale and delivery of the Bonds, and the Bond Ordinance is in full force and effect and has not been altered, amended or repealed as of the date hereof. No petition or petitions to refer the Bond Ordinance to the people under Amendment No. 7 to the Constitution of the State of Arkansas have been filed as of the date hereof, and the City Council has not referred the Bond Ordinance to the people for adoption or rejection. Attached hereto as Exhibit D is a true, complete and correct copy of the minutes of a meeting of the City Council held September 16, 2014, showing adoption of the Bond Ordinance, as said minutes appear in the official records of the City. At said meeting a quorum was present and acted throughout. Attached hereto as Exhibit E is a true, complete, and correct copy of a publisher's affidavit showing publication of the Bond Ordinance in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on September 19, 2014. No authority or proceeding in connection with the issuance, sale and delivery of the Bonds has been repealed, revoked or rescinded. 3. The following described instruments, as executed and delivered by the Mayor and/or City Clerk, are in substantially the same form and text as the copies of such instruments which were before and approved by the City Council at the September 19, 2014 meeting referred to in paragraph 2 above, with such changes not inconsistent with the Bond Ordinance as have been approved by the officials executing the same. Document Date Other Party or Parties Trust Indenture November 1, Simmons First Trust Company, 2014 N.A., as trustee (the "Trustee") Tax Regulatory Agreement November 19, Trustee 2014 Escrow Deposit Agreement November 19, BOKF, NA, as escrow trustee (the 2014 "Escrow Trustee" Continuing Disclosure Agreement November 19, Trustee 2014 Bond Purchase Agreement October 28, 2014 Stephens Inc., as underwriter (the "Underwriter") Official Statement October 28, 2014 None The Trust Indenture, the Tax Regulatory Agreement, the Escrow Deposit Agreement, the Continuing Disclosure Agreement, the Bond Purchase Agreement, the Official Statement and the Debt Service Reserve Agreement dated November 19, 2015 (the "Reserve Agreement"), by and 2 4840-8634-9600.2 between the City and Build America Mutual Assurance Company ("BAM"), are hereinafter collectively referred to as the "City Documents." 4. The persons named below were on the date or dates of the execution of the City Documents, and are on the date hereof, the duly qualified and acting incumbents of the offices of the City set opposite their respective names. The undersigned, or their successors in office, are the authorized representatives of the City for all purposes of the Bond Ordinance and the City Documents. Title Name Mayor Lioneld Jordan City Clerk Sondra Smith 5. The undersigned Mayor of the City did manually execute each of the City Documents and the undersigned City Clerk of the City did manually attest the Trust Indenture. The undersigned Mayor of the City did manually execute and the undersigned City Clerk did manually attest $10,890,000 aggregate principal amount of Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Bonds"), said series of bonds being initially issued in the form of fourteen (14) fully registered bonds numbered from R14-1 upwards, initially dated as of November 1, 2014. 6. The City has duly adopted the Levying Ordinance, the Amending Ordinances and the Bond Ordinance (and has duly pledged the Tax Receipts described therein) and has duly authorized, executed and delivered the Bonds and each of the City Documents by all necessary action under the Constitution and laws of the State of Arkansas, including particularly Arkansas Code Annotated Sections 26-75-601 (the "Authorizing Legislation"). As of the date hereof, the Levying Ordinance, the Amending Ordinances, the Bond Ordinance, the Bonds and each of the City Documents are in full force and effect and each constitutes the valid, binding and enforceable obligation of the City, except to the extent their enforceability may be limited by bankruptcy, insolvency or other similar laws affecting creditors' rights generally, or by the availability of equitable remedies, and the City is entitled to the benefits of the same. The City has complied in all respects with the provisions of the Authorizing Legislation and has full legal right, power and authority to issue the Bonds for the purpose stated in the Authorizing Legislation and to enter into the Bond Purchase Agreement, to adopt the Bond Ordinance, to issue, sell and deliver the Bonds as provided in the Bond Purchase Agreement, and to carry out and consummate all other transactions contemplated by the City Documents. 7. Any certificate signed by any official of the City (including this certificate) delivered to the Trustee or the Underwriter shall be deemed a representation and warranty by the City to the Trustee or the Underwriter as to the statements made therein (and herein). 8. The sea] affixed to this certificate is the legally adopted, proper and only official seal of the City, and has been duly affixed to the Bonds. 3 4840-8634-9600.2 9. The meetings of the City Council of the City referred to in paragraph 2 hereof were open to the public in compliance with the provisions of Section 25-19-106 of the Arkansas Code Annotated, as amended and supplemented. 10. The present officials of the City and their respective terms are as follows: 11. The Levying Ordinance created the City Advertising and Promotion Commission (the "Commission"), which is presently composed of the following members: Date of Expiration Name Office of Term Lioneld Jordan Mayor 12/31/16 Kit Williams City Attorney 12/31/14 Sondra Smith City Clerk 12/31/16 Rhonda Adams Alderman 12/31/14 Adella Gray Alderman 12/31/14 Mark Kinion Alderman 12/31/14 Alan Long Alderman 12/31/16 Sarah Marsh Alderman 12/31/16 Matthew Petty Alderman 12/31/16 Martin Schoppmeyer, Jr. Alderman 12/31/16 Justin Tennant Alderman 12/31/14 11. The Levying Ordinance created the City Advertising and Promotion Commission (the "Commission"), which is presently composed of the following members: By Resolution duly adopted by the Commission on March 11, 2013 (the "Approving Resolution"), the Commission has approved the issuance of the Bonds and the pledge of the Tax Receipts. A copy of the Approving Resolution is attached hereto as Exhibit F. 12. The Authorized Representatives of the City for all purposes of the Trust Indenture are Lioneld Jordan, Mayor, whose signature appears on page 8, and Paul Becker, Finance Director, whose signature appears below. Until further written notice to you, any instrument authorized by the Trust Indenture to be signed by an Authorized Representative of the City is to be honored if it contains the manual signature of either of these individuals. Paul Becker, Finance Director 4 4840-8634-9600.2 Date of Expiration Name Office of Term Ching Mong Chairman 4-1-18 Matt Behrend Member 4-1-15 Robert Ferrell Member 4-1-17 Tim Freeman Member 4-1-16 Mathew Petty City Council Representative n/a Justin Tenant City Council Representative n/a Hannah Withers Member 4-1-17 By Resolution duly adopted by the Commission on March 11, 2013 (the "Approving Resolution"), the Commission has approved the issuance of the Bonds and the pledge of the Tax Receipts. A copy of the Approving Resolution is attached hereto as Exhibit F. 12. The Authorized Representatives of the City for all purposes of the Trust Indenture are Lioneld Jordan, Mayor, whose signature appears on page 8, and Paul Becker, Finance Director, whose signature appears below. Until further written notice to you, any instrument authorized by the Trust Indenture to be signed by an Authorized Representative of the City is to be honored if it contains the manual signature of either of these individuals. Paul Becker, Finance Director 4 4840-8634-9600.2 13. The City has not and will not engage in any activity which might result in the income of the Bonds becoming taxable to it or any interest on the Bonds becoming taxable to the recipients thereof under the Federal income tax laws. This covenant is made to all owners of the Bonds, their successors and assigns, as a further inducement for the purchase of the Bonds. 14. All of the conditions, covenants and agreements required in the Trust Indenture and the Bond Purchase Agreement to be satisfied or performed by the City at or prior to the issuance and sale of the Bonds have been complied with, satisfied or performed in the manner and with the effect contemplated in the Trust Indenture and the Bond Purchase Agreement. Each of the representations and warranties of the City contained in the Bond Purchase Agreement and the Trust Indenture are true and correct in all material respects on and as of the date of this Certificate as if made on the date of this Certificate. 15. The information contained in the Official Statement relating to the City, its organization, properties, operations and financial condition, and the description of the Bonds, the Commission, the Trust Indenture, the Bond Ordinance, the Tax and the Tax Receipts is true and correct in all material respects. To the best of the knowledge of the undersigned, as of its issue date, the Official Statement does not contain any untrue or incorrect statement of a material fact and does not omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. To the best knowledge of the undersigned officials of the City, no event affecting the City, the Commission, the Tax or the Tax Receipts has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is used that is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect. 16. There are hereby delivered to the Trustee fourteen (14) typewritten Bonds, one for each maturity, in the aggregate principal amount of $10,980,000, to be registered in the name of Cede & Co. The Trustee is hereby requested to authenticate the Bonds and to receipt for and upon the order of the Underwriter on behalf of the City, deliver the Bonds to The Depository Trust Company, New York, New York, after authentication and upon payment therefor of $11,532,990.60, plus accrued interest to the date of delivery in the amount of $20,270.63, and less $27,730.55 paid by the Underwriter to Build America Mutual Assurance Company on behalf of the City for the Policy (as defined in the Trust Indenture) and the Reserve Policy (as defined in the Trust Indenture), for a total purchase price of $11,525,530.68. The Trustee is hereby directed to deposit the Bond proceeds as follows: (a) Deposit the accrued interest on the Bonds in the amount of $20,270.63 into the Interest Account of the Bond Fund; (b) $599,100.06 shall be transferred to the Escrow Trustee for deposit in the Escrow Fund (as defined in the Escrow Agreement), and shall be used, together with $56,091.82 of other legally available funds of the City, to pay the maturing principal and interest on the Series 2003 Bonds (as defined in the Trust Indenture); (c) Deposit $82,500.00 into the Costs of Issuance Fund and immediately pay those Costs of Issuance with respect to the Bonds, as set forth in Exhibit G hereto; 5 4840-8634-9600.2 (d) Deposit $7,181,004.09 in the Walton Arts Center Account of the Projects Fund; (e) Deposit the remaining balance (viz., the sum of $3,642,655.90) in the Park Account of the Projects Fund. 17. The City is a city of the first class pursuant to Title 14, Subtitle 3, Chapter 43 of the Arkansas Code Annotated. The City is operating under the major -council form of government pursuant to Title 14. 18. The City has not adopted any by-laws or rules of procedure relating to the conduct of its City Council meetings. 19. There is no action, suit, proceeding, inquiry or investigation involving the City or the Commission before or by any court or public board or body pending or, to the knowledge of the undersigned, threatened wherein an unfavorable decision, ruling or finding would: (i) affect the creation, organization, existence or powers of the City or the Commission or the titles of their officials to their respective offices, (ii) enjoin or restrain the issuance, sale or delivery of any of the Bonds or the City Documents, the levy or collection of the Tax, or the pledge of the Tax Receipts thereof, (iii) in any way question or affect any of the rights, powers, duties or obligations of the City or the Commission with respect to the Tax, (iv) in any way question or affect any authority for the issuance, authorization, execution, authentication, sale or delivery of the Bonds or the validity or enforceability of the Bonds, the City Documents, the Tax, the Levying Ordinance, the Amending Ordinances, the Bond Ordinance, or the assignment by the City of any of the moneys, instruments or other rights pledged under the Trust Indenture, or (v) in any way question or affect the Official Statement or the transactions contemplated thereby, or any other agreement or instrument to which the City is a party and relating to the Bonds. 20. The Tax authorized under the Authorizing Legislation has been levied within the City pursuant to the Levying Ordinance (as amended by the Amending Ordinances) and the collection of such Tax commenced on April 1, 1977, as approved by the voters of the City. The Tax Receipts are not presently pledged or hypothecated in any manner or for any purpose other than for the payment of the Bonds as provided in the Trust Indenture. 21. In the City, the time for filing a referendum petition is fixed at 31 days after the publication of the measure upon which the referendum is sought. 22. The adoption of the Levying Ordinance, the Amending Ordinances and the Bond Ordinance, the execution and delivery of the City Documents, the authorization, execution and delivery of the Bonds, and compliance with the provisions thereof under the circumstances contemplated thereby does not and will not in any material respect conflict with, or constitute on the part of the City a breach or default under, any agreement or other instrument to which the City is a party, or any existing law, administrative regulation, court order or consent decree to which the City is subject. 23. The City's employer tax identification number is 71-6018462 6 4840-8634-9600.2 24. The City Documents and the information supplied to Ambac Assurance Corporation in order to obtain the Surety Bond and the Financial Guaranty Insurance Policy do not contain any untrue or misleading statement of a material fact and do not fail to state a material fact required to be stated therein or necessary in order to make the information contained therein not misleading. [The remainder of this page intentionally blank] 7 4840-8634-9600.2 25. Lioneld Jordan, Mayor, hereby certifies that the signature of Sondra Smith, City Clerk, affixed hereto is her true and correct signature, and Sondra Smith, City Clerk, hereby certifies that the signature of Lioneld Jordan, Mayor, affixed hereto is his true and correct signature. IN WUNESS WHEREOF, the undersigned have hereunto set their hands as of November 19, 2014. CITY OF FAIYETTEVILLE. ARKANSAS V / L d J dan, Mayor Eq J,,�i�'` By: Sondra Smithjlty C1erl E: 75-FP�Efi P (S E A L) �'�.� gRKANS•Go 8 4840-8634-9600.2 ORDINANCE NO. 2310 r OP R E '77 MAR 22 PM 2; 26 AN ORDINANCE LEVYING A TAX UPON THE GROSS RECEIPTS HOTELS, MOTELS, RESTAURANTS, CAFES AND CAFETERIASsd]HIQn i-L•;;TY CITY; PRESCRIBING THE PROCEDURE FOR THE COLLECTION Y=-,; ; FORCEMENT OF THE TAX; PRESCRIBING THE PURPOSES FOtE��i,mEr ; REVENUES DERIVED FROM COLLECTION OF THE TAX MAY SE IS;C(FAj; CREATING A CITY ADVERTISING AND PROMOTION COMMISSION: PRE- SCRIBING OTHER MATTERS PERTAINING THERETO; AND DECLARING AN EMERGENCY. t WHEREAS, the City of Fayetteville, Arkansas (the 'CiCy')'has many benefits to offer visitors to the City and is presently not taking full advantage of its resources for the attraction of visitors; and WHEREAS, the development of such resources would result in many economic and other benefits to the City and its inhabitants; and WHEREAS, the City does not have funds available but the General Assembly of the State of Arkansas has adopted Act No. 185 of 1965 ('Act No. 185'), as amended by Act No. 123 of 1969 Met No. 123'), providing a means by which the City can obtain the needed funds; NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. There is hereby levied,effective Aril 1, 1977 a tax of one per cent (the 'tax') upon the gross receipt: zom e renting, leasing or otherwise furnishing of hotel or motel accom- modations for profit in the City and upon the gross receipts of restaurants, cafes, cafeterias and all other establishments engaged in the business of selling prepared food for consumption on the premises of such establishment in the City. (b) The tax shall be collected from the purchaser or user of the food or accommodations by the person, firm, corporation, association, trust or estate (or other entity of whatever nature) �. selling such food or furnishing such accommodations (the "taxpayer"), and the taxpayer shall remit to the City on the fifteenth day of each month all collections of the tax for the preceding month, f accompanied by reports on forms to be prescribed by the City Manager. (c) As provided in Act No. 185, the provisions of Act No. 386 of 1941, as amended, together with the rules and regulations thereunder, shall, so far as practicable, apply to the administra- tion, collection, assessment and enforcement of the tax. Section 2. There is hereby created the City Advertising and Promotion Fund, to which fund there shall be credited all collections of the tax. Section 3. The City Advertising and Promotion Fund shall be nsed, in the manner determined by the City Advertising and Pro- - exclusively E, -,r the advertiseaent and promotion of the City and its environs and/or for the c.;nstr_ tion, main- tenance, repair and operation of a convention center, including the pledge of revenues therein to the payment of bonds issued under Act No. 185, as amended by Act No. 123. zx27 928 314 :,l T; -1 - Section 4. (a) There is hereby created the City Advertising and Promotion Commission (the 'Commission'). The Commission shall have the powers and duties- prescribed by Act No. 185, as now or hereafter amended. The Commission shall be composed of seven members as follows; Four members shall be owners or managers of hotels, motels or restaurants (or other establishments engaged in the business of selling food for consumption on the premises) (the 'hotel and restaurant members•) who shall be appointed by the Mayor with the approval of the Board of Directors of theCCa�ttty; three members shall be the Mayor of the City and two members Of the Board of Directors of the City selected by the Board of Directors of the City. (b) The hotel and restaurant members shall at the first meeting of the Commission draw lots for terms of one to four years; all successors (except those appointed to complete an unexpired term) shall serve a term of four years. Section 5. All ordinances and resolutions, and parts thereof, in conflict, in whole or in part, with any of the provisions of this ordinance are hereby repealed to the extent of such conflict. Section 6. The provisions of this ordinance are hereby declared to be severable. If any provision shall be held to be invalid or to be inapplicable to any persons or circumstances, such invalidity of inapplicability shall not affect the remainder of the provisions of this ordinance. Section 7. It has been found, and it is hereby declared, that the City badly needs additional revenues for the advertising and promotion of the City and for the development of a convention centers that this ordinance and the tax levied by it are the only reasonable means available for the alleviation of these needs; and that the advertisement and promotion of the City and the development of a convention center are essential to the continued development of the City and to the welfare of the inhabitants thereof. This ordinance, therefore, being necessary for the pre- servation of the public peace, health and safety, an emergency is declared to exist, and this ordinance shall be in effect from and after its passage and approval. PASSED AND APPROVED THIS /,& DAY OF v ?L&4, •J,_J , 1977. Y• 'I T`/'� `ATVs: APPROVED: MAYOR C'i:� of fisc^••,try Plc j I. Par':-• `.. �+.t. •i•. i"••k am F[- --ZIVANCE x0. a3/3` A.11 ORDINANCE MENDING SECTION 1 OF ORDINANCE, NUMBER 2314 CHANGE THE EFFECTIVE DATE OF THE 1$ HOTEL AND RESTAURANT TAX. LEVIED =HEREBY TO JUNE 1, 1977. BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY OF FpyETT-Z�ILLS, ARKANSAS: Section 1. That the effective date of the It Hotel and Restaurant Gross Receipts Tax levied by Section 1 of Ordinance .jurmber 2310 be, and the same is hereby, changed from April 1, 1977 to June 1, 1977. PASS= =VD APPROVED THIS &&DAY OF L977. APPROVED: ATTEST.: D- , CITY CLERK LSI t ORDINANCE NO. 7 AN ORDINANCE AMENDING SECTION 1 OF TO PRESCRIBE A PENALTY FOR FAILURE HOTEL, MOTEL AND RESTAURANT TAX. �•� ORDINANCE TO PAY THE CIT L$c` BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That Section 1 of Ordinance No. 2310 is hereby amended by adding Paragraph (d) to read as follows: (d) Any person required under this Ordinance to pay over the tax levied by Section 1 hereof and who shall fail to do so shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not more than $500.00 or double that sum for each repetition of such offense. PASSED AND APPROVED this L5 day of��, 1980. APPROVED: MAYOR ATTEST: CEI:T1FiCAT% OF i.ECORD State of ArGarsas ( �S J City of Fayetteviiie I. Bonnie Goering, C!" Clcrl; recorder for the City of Fayetteviac• do i:crs- w;tF` ;t by certify that t;ie anncxcd or of record in my office and tiie ...rt ..' t. pears in Ordinance & Resolution b:.,,)!;` atpages i•i-03 •,`: itn^s r.;. tti hand and al this— (10 iay of _ 19 R) City Clerk an(l E�: Offic'i'o •i AN ORDINANCE AMENDING ORDINANCE NO. 2310 TO REQUIRE THE TAXPAYER LIABLE FOR THE TAX IMPOSED THEREBY TO ATTACH TO THE CITY'S MONTHLY REPORTING FORM A COPY �!o" OF SAID PERSON'S CONCURRENT MONTHLY STATE SALES TAX •`�%T�� F�lY//�� REPORT. CF?jrFA•c77 ,. BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETTEVILLE, ARKANSAS: - Section 1. That Sec. 1(b) of Ordinance No. 2310 is hereby amended by adding the following: The taxpayer shall attach to the City's monthly reporting form a copy of the taxpayer's concurrent monthly State gross receipts tax report; provided the requirement prescribed hereby shall not apply if the taxpayer executes a written authorization for the Arkansas Commissioner of Revenues to release said monthly reports to the City. Section 2. That Ordinance No. 2310, and all amendatory ordinances thereto, shall be codified as Sec. 18A-1 of the Fayetteville Code of Ordinances. Section 3. The Board of Directors hereby determines that effective administration of City hotel and motel and restaurant tax collections is essential to provide badly needed additional revenue for the advertising and promotion of the City; and that this ordinance is necessary for effective administration of said tax collections. Therefore, an emergency is hereby declared to exist, and this ordinance being necessary for the public welfare shall be in full force and effect frau and after its passage and approval. PASSED AND APPROVED this g71s, day of `h7tit t%J , 1981. CITY CLERK lC .. APPROVED' L2/ MAYOR rnz inn rt r vgm 4'4 J ham. ORDINANCE NO. oZ SSG % 3`2 ? !rr Z,✓F ~'� C r, 20 AN ORDINANCE AMENDING SEC. 18A-1 OF THE FAYETTftti;=y Y. , CODE OF ORDINANCES TO CLARIFY THE TIME AT WHICH FAILURE TO PAY THE CITY'S ONE PER CENT HOTEL, MOTEL AND RESTAURANT TAX IS PUNISHABLE BY A FINE. BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY OF G FAYETTEVILLE, ARKANSAS: Section 1. That Sec. 18A -1(b) of the Fayetteville Code of OrTj�nances is hereby amended by adding the following: It shall be unlawful for any taxpayer, as defined herein, to fail to remit to the City by the 20th day of each month all collections of the tax levied by Section (a) above; and, upon conviction thereof, the taxpayer shall be punished by a fine of not more than $500.00, or double that sum for each repetition of such offense. Section 2. That Sec. 18A-1 (c.l) of the Fayetteville Code o Or finances is hereby repealed. / PASSED AND APPROVED this ' day of �7'O�, 1982. L�.r zRYETTF/ APPROVED: k. Mayor ATTEST:; BY City C erk .. ^.ar for 846 ..-.. .... u.. fare- dw1;63 and 3Y ��(iiuo Re^ rded per putt' Cierk APR 24 2003 4:24PM HP LASERJET 3200 P.6 I Y ORDINANCENO. AN ORDINANCE AMENDING §35.20 OF THE CODE OF FAYFFIEVILLE (ORDINANCE NO. 2310, AS AiNfENDED), TRANSIENT OCCUPANCY TAX, LEVY OF TAX TO PROVIDE PENALTIES AND ENFORC AIENT, ALLOWING EXAMINATION OF RECORDS AND INVESTIGATIONS AND PROVIDING FOR RULE MAKING POWER. WHEREAS, the City wishes to allow for the examination of taxpayer records and investigations to assist in the fair and accurate collection of the Hotel, Motel and Restaurant tax (hereinafter HMR tax) and; WHEREAS, provisions are needed for penalties against those who fail to comply with the HMR tax ordinance and; WHEREAS, the City believes that promulgating rules and regulations in administering the HMR tax will be beneficial in fairly and accurately interpreting the provisions of the HMR tax, NOW, TIiEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYEITEV'ILLE, ARKANSAS: secti�. That §35.25 of the Code of Fayetteville is hereby added as follows: §35.25 Penalties and Enforcement, The City may assess penalties and interest against taxpayers who fail to timely report or pay the tax. The penalty shall be equal to five percent (5%) of the unpaid tax amount per month not to exceed a total assessment of thirty-five percent (35%) of the unpaid tax. Simple interest on unpaid taxes shall be assessed at the rate of ten percent (10%) per annum. In addition, the City may exercise all powers listed under A.C.A.§26-75- 603 (c) as may be amended from time to time and may utilize the provisions of A.C.A. §26-75-603 (d) and (e) as may be amended from time to time in enforcing the tax. cp,- rm ? That §35.26 of the Code of Fayetteville is hereby added as follows: §35.26 Examinations and Investigations. The collector of the tax in order to enforce the tax, by determining the accuracy of taxpayer reports and remittances, or fixing any liability under the ordinance, may melee an examination or investigation of the place of business, the tangible personal property, equipment, and facilities, and the books, records, papers, vouchers, accounts, and documents of any taxpayer or other person. Every taxpayer or 12, RPR 24 2003 4:24PM HP LASERJET 3200 P VLV. . other person and his agents and employees shall exhibit to the collector these places and items and facilitate any examination or investigation. SectLcn 3. That §35.27 of the Code of Fayetteville is hereby added as follows: §35.27 Rules and Regulations. The City after notice and public hearing may pass any rules and regulations necessary for carrying into effect the provisions for the enforcement of this ordinance. ,r• APPROVED this day of March, 2001. RPR 24 2003 4:25PM HP LnSERJET 3200 P,g ORDINANCE NO. 4317 AN ORDINANCE AMENDING §35.20 OF Th—7 CODE OF FAYETTEV711LE (ORDINANCE NO. 2310, AS AMENDED), TRANSIENT OCCUPANCY TAX, LEVY OF TAX TO ADD DELIS, DRIVE-IN RESTAURANTS, CARRY -OUT R STAURAN55, CONCESSION STANDS, CONVENIENCE STORES; GROCERY STORE RESTAURANTS, CATERERS AND SIMILAR BUSINESSES TO THE LIST OF BUSINESSES TO WHICH THE CITY'S GROSS RECEIPT TAX OF 1 % (HOTEL, MOTEL AND RESTAURANT TAX) APPLIES (A.C.A. §26-75-601 ET SEQ.); ADDING OFF PREMISES CONSUMFTION BUSINESSES TO THE LLT OF BUSINESSES SO TAXED, EXCLUDING FRONI TAXATION? GROSS RECEIPTS OR GROSS PROCEEDS OF ORGANIZATIONS QUALIFIED UNDER 501(c) (3) OF THE FEDERAL I_NTERiNAL REVENUE CODE WHEREAS, the current gross receipts of tax of 14e on Hotel, Motel and Restaurants (A.C.A. §26-75-601 et seq.) established by Ordinance No. 2310, as amended (HMR tax) levies the tax only upon restaurants, cafes, cafeterias and all other establishments engaged in the business of selling prepared food for consumption on the premises of such establishment in the city, and; WHEREAS, the City wishes to also apply the HMR tax to delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store restaurants, caterers and similar businesses selling prepared food or beverages for on or off premises consumption as allowed by A.C.A.§26-75-602 and; WHEREAS, the City wishes to exclude from HMR taxation the gross receipts or gross proceeds of organizations qualified under §501(c)(3) of the Federal Internal Revenue Code. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Secton 1. That §35.20 of the Code of Fayetteville, Tax, Levy of Tax, is hereby repealed and the following inserted in its stead: §55-20. Levy of Tax. There is hereby levied, a tax of 1% (the tax) upon the gross receipts or gross proceeds from the renting, leasing, or otherwise RPR 24 2003 4:25PM HP LRSERJET 3200 P.9 ord. 4317 furnishing of hotel or motel accommodaticro for profit in the City and upon the portion of thea oss receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses as may be defined from time to time by ordinance from the sale of prepared food and beverages for on or off -premises consumption, but such tax shall not apply to such gross receipts or gross proceeds of organizations qualified under §501- (c)(3) of the Federal Internal Revenue Code. Section 2. That §35.28 is hereby added as follows: 633?8. Definitions (pursuant to A.C.A. §26-75-602 (c)(2)1 A_ Delis - Delis shall include establishments selling prepared food or beverage as defined, however this tax shall not apply to sliced meat and/or cheese sold by the pound. B. Concession Stands - Stands owned by non-profit groups are excluded from this taxation, as well as stands operated on a short term basis, such as First Night, Springfest, Autu=dest and County fairs. Other stands operated on a recurring basis, such as for athletic events, barbecue stands and other on-going stands, whether mobile or sationary will collect the HMR tax. C. Convenience Stores - All food and beverages prepared on site I ISIh`� are taxable. ��l1 J D. Caterers - Caterers are for profit businesses or persons who �° deliver or serve catered food or beverages at a location within the city limits of � ty � 1 Fayetteville. \Ij r.Gv In F. Bakeries, Donut Shops & Ice Cream Shops —These are6TfrJrV/P mil included within the definitions of "sin -War businesses" of this ordinance and are, T therefore, subject to this tax. F' Beverage Shops - Businesses that sell beverages prepared or dispensed at their business are included within the definition of "sir lar businesses" of this ordinance and are therefore subject to this tax. APR 24 2003 4:25PM HP LHSERJET 3200 P.10 G. Prepared Food or Beverage - Any food or beverage product prepared or altered in a food/beverage establishment for sale. PASSED AND APPROVED this r day of 2001. APPROVED -- BY: DAN COODY, Iola ATTEST: By: Bather Woodruff, City Clerk ord. 4317 ORDINANCE NO. 5713 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $11,900,000 OF HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS, SERIES 2014, BY THE CITY OF FAYETTEVILLE, ARKANSAS FOR THE PURPOSE OF (1) REFUNDING THE CITY'S OUTSTANDING HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX REFUNDING BONDS, SERIES 2003, (2) FINANCING CERTAIN COSTS IN CONNECTION WITH THE RENOVATION AND EXPANSION OF WALTON ARTS CENTER, AND (3) FINANCING CERTAIN COSTS IN CONNECTION WITH A REGIONAL PARK; AUTHORIZING THE EXECUTION AND DELIVERY OF A TRUST INDENTURE PURSUANT TO WHICH THE SERIES 2014 BONDS WILL BE ISSUED AND SECURED; AUTHORIZING THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT PURSUANT TO WHICH THE SERIES 2014 BONDS WILL BE OFFERED; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF THE SERIES 2014 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF AN ESCROW DEPOSIT AGREEMENT PROVIDING FOR THE REDEMPTION OF THE SERIES 2003 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT; AND PRESCRIBING OTHER MATTERS RELATING THERETO WHEREAS, the City of Fayetteville, Arkansas (the "City") is authorized under the provisions of the Advertising and Promotion Commission Act, Arkansas Code Annotated (2008 Repl. & 2013 Supp.) §§26-75-601 et seq. (as from time to time amended, the "Act"), to issue its bonds secured by and payable from the revenues derived by the City from the one percent (1%) tax (the "Tax") levied by the City pursuant to Ordinance No. 2310 adopted by the City on March 1, 1977, as subsequently amended, upon (i) the gross receipts or gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses within the City from the sale of prepared food and beverages for on -premises or off -premises consumption; and Page 2 Ordinance No. 5713 WHEREAS, under the authority of the Act and pursuant to the provisions of Ordinance No. 4488 adopted on May 20, 2003, the City has previously issued and there are presently outstanding not more than $1,275,000 in aggregate principal amount of the City's Hotel, Motel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), which Series 2003 Bonds are secured by the pledge of and lien upon the City's receipts of the A&P Commission Tax; and WHEREAS, the City's Advertising and Promotion Commission (the "A&P Commission") by resolution adopted on May 13, 2013, has recommended that the City assist in (i) the completion of the Walton Arts Center expansion and renovation (the "Walton Arts Center Improvements") and (ii) the acquisition, construction and equipping of a regional park (the "Park Improvements") through the issuance of its Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds ("capital improvement bonds"); and WHEREAS, the A&P Commission has determined and the City Council concurs that the Walton Arts Center is a cultural arts and entertainment facility and its expansion and renovation will constitute a "tourism project" within the meaning of Arkansas Code Annotated (1998 Repl.) §14-170-205 which will secure and develop tourism and thereby stimulate and enhance the economic growth and well-being of the City and its people; and WHEREAS, the A&P Commission has further determined and the City Council concurs that the City's proposed regional park will constitute a "public recreation facility" and "city park" within the meaning of Arkansas Code Annotated (2008 Repl.) §26-75-606 and a "tourism project" within the meaning of Arkansas Code Annotated (1998 Repl.) § 14-170-205 which will secure and develop tourism and thereby stimulate and enhance the economic growth and well-being of the City and its people; and WHEREAS, pursuant to the provisions of Ordinance No. 5605, duly adopted by the City Council on August 6, 2013, there was submitted to the qualified electors of the City the questions of the issuance of bonds pursuant to the Act in principal amount (i) not to exceed $1,500,000 for the purpose of refunding the Series 2003 Bonds, (ii) not to exceed $6,900,000 for the purpose of financing a portion of the Walton Arts Center Improvements, and (iii) not to exceed $3,500,000 for the purpose of financing a portion of the Park Improvements, said bonds to be secured by a pledge of and lien upon the City's receipts of the Tax (the "Tax Receipts"); and WHEREAS, at a special election held November 12, 2013, a majority of the qualified electors of the City voting on the aforementioned questions approved the issuance of the bonds for each of aforementioned purposes and the corresponding pledge of the Tax Receipts to the payment thereof; and NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Fayetteville, Arkansas that: Page 3 Ordinance No. 5713 Section 1. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution of the State of Arkansas and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014" (the "Bonds"). The Bonds shall be issued in the original aggregate principal amount of not to exceed Eleven Million Nine Hundred Thousand Dollars ($11,900,000), shall mature not later than December 1, 2044, and shall bear interest at the rates specified in the Bond Purchase Agreement. As authorized by the November 12, 2013 special election, not to exceed $1,500,000 aggregate principal amount of the Bonds shall be deemed applicable to the refunding of the Series 2003 Bonds, not to exceed $6,900,000 aggregate principal amount of the Bonds shall be deemed applicable to the Walton Arts Center Improvements, and not to exceed $3,500,000 aggregate principal amount of the Bonds shall be deemed applicable to the Park Improvements The average yield on the Bonds as a whole shall not exceed 5.000% per annum. The proceeds of the Bonds will be utilized (i) to finance a portion of the cost of redeeming the Series 2003 Bonds, (ii) to finance a portion of the costs of the Walton Arts Center Improvements, (iii) to finance a portion of the costs of the Park Improvements, (iv) to establish a debt service reserve for the Bonds or to purchase a surety bond for reserve purposes, (v) to pay a premium for bond insurance, if deemed economically beneficial, and (vi) to pay printing, underwriting, legal and other expenses incidental to the issuance of the Bonds. The Bonds shall be issued in the forms and denominations, shall be dated, shall be numbered, shall mature, shall be subject to redemption prior to maturity, and shall contain such other terms, covenants and conditions, all as set forth in the Trust Indenture submitted to this meeting. The Mayor is hereby authorized and directed to execute and deliver the Bonds in one or more series, each series to be in substantially the form thereof contained in the Trust Indenture submitted to this meeting, and the City Clerk is hereby authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby authorized to confer with the Trustee, Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), and Kutak Rock LLP, Little Rock, Arkansas ("Bond Counsel"), in order to complete the Bonds in substantially the form contained in the Trust Indenture submitted to this meeting, with such changes as shall be approved by such persons executing the Bonds, their execution to constitute conclusive evidence of such approval. Page 4 Ordinance No. 5713 Section 2. In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, there is hereby pledged all of the Tax Receipts. The levy and collection of the Tax shall not be discontinued or reduced while any of the Bonds are outstanding unless sufficient funds are on deposit with the Trustee under the Trust Indenture to redeem the Bonds in full. The City covenants and agrees that all Tax Receipts will be accounted for separately as special funds on the books of the City, and all Tax Receipts will be deposited and will be used solely as provided in the Trust Indenture. Section 3. To prescribe the terms and conditions upon which the Bonds are to be executed, authenticated, issued, accepted, held and secured, the Mayor is hereby authorized and directed to execute and acknowledge the Trust Indenture, by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, the Trustee, and the City Clerk is hereby authorized and directed to execute and acknowledge the Trust Indenture and to affix the seal of the City thereto, and the Mayor and the City Clerk are hereby authorized and directed to cause the Trust Indenture to be accepted, executed and acknowledged by the Trustee. The Trust Indenture is hereby approved in substantially the form submitted to this meeting, including, without limitation, the provisions thereof pertaining to the pledge of Tax Receipts and the terms of the Bonds. The Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Trust Indenture in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Trust Indenture, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Trust Indenture in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 4. There is hereby authorized and approved a Preliminary Official Statement of the City, including the cover page and appendices attached thereto, relating to the Bonds. The Preliminary Official Statement is hereby "deemed final" by the City within the meaning of U.S. Securities and Exchange Commission Rule 15c2-12. The distribution of the Preliminary Official Statement is hereby approved. The Preliminary Official Statement, as amended to conform to the terms of the Bond Purchase Agreement, including Exhibit A thereto, and with such other changes and amendments as are mutually agreed to by the City and the Underwriter, is herein referred to as the "Official Statement," and the Mayor is hereby authorized to execute the Official Statement for and on behalf of the City. The Official Statement is hereby approved in substantially the form of the Preliminary Official Statement submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Official Statement in substantially the form of the Preliminary Official Statement submitted to this meeting, with such changes as shall be approved by such persons, the Mayor's execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Preliminary Official Statement is on file with the City Clerk and is available for inspection by any interested person.) Page 5 Ordinance No. 5713 Section 5. In order to prescribe the terms and conditions upon which the Bonds are to be sold to the Underwriter, the Mayor is hereby authorized and directed to execute the Bond Purchase Agreement on behalf of the City, to be dated as of the date of its execution, by and between the City and the Underwriter, and the Bond Purchase Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Underwriter and Bond Counsel in order to complete the Bond Purchase Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Bond Purchase Agreement, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Bond Purchase Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 6. In order to provide for the redemption of the Series 2003 Bonds, the Mayor is hereby authorized and directed to execute the Escrow Deposit Agreement to be dated as of the date of its execution, by and between the City and BOKF, NA, as the Escrow Trustee, and the Mayor is hereby authorized and directed to cause the Escrow Agreement to be executed by the Escrow Trustee. The Escrow Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Underwriter, the Escrow Trustee and Bond Counsel in order to complete the Escrow Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Escrow Agreement, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Escrow Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 7. In order to provide for continuing disclosure of certain financial and operating information with respect to the Tax and the City in compliance with the provisions of Rule 15c2-12 of the U. S. Securities and Exchange Commission, the Mayor is hereby authorized and directed to execute the Continuing Disclosure Agreement to be dated as of the date of its execution, by and between the City and the Simmons First Trust Company, N.A., the Dissemination Agent, and the Mayor is hereby authorized and directed to cause the Continuing Disclosure Agreement to be executed by the Dissemination Agent. The Continuing Disclosure Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Dissemination Agent, the Underwriter and Bond Counsel in order to complete the Continuing Disclosure Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Continuing Disclosure Agreement, their execution to constitute conclusive evidence of such approval. Page 6 Ordinance No. 5713 (Advice is given that a copy of the Continuing Disclosure Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 8. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider the purchase of a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of the principal of and interest on the Bonds when due. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a bond insurance policy with respect to the Bonds. Section 9. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things necessary to effect the issuance, sale, execution and delivery of the Bonds and to effect the execution and delivery of the Trust Indenture, the Bond Purchase Agreement, the Official Statement, the Escrow Agreement, the Continuing Disclosure Agreement and a Tax Regulatory Agreement relating to the tax exemption of interest on the Bonds, and to perform all of the obligations of the City under and pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on behalf of the City, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of such authority or to evidence the exercise thereof. Section 10. 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 11. All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. PASSED and APPROVED this day of 16' day of September, 2014. A nnn nN Mr . ATTEST: By: 0&'d' ( • AwjL SONDRA E. SMITH, City Clerk/Trggtkwman, ;0,01Y OF: FAYETTEVILLE J'< 9RXA NSp�. •��. ... H Alderman Adella Gray Ward 1 Position 1 Alderman Sarah Marsh Ward I Position 2 Alderman Mark Kinion Ward 2 Position 1 Alderman Matthew Petty Ward 2 Position 2 Mayor Lioneld Jordan City Attorney Kit Williams City Clerk Sondra E. Smith City of Fayetteville Arkansas City Council Meeting September 16, 2014 City Council Meeting Minutes September 16, 2014 Page 1 of 8 Alderman Justin Tennant Ward 3 Position 1 Alderman Martin W. Schoppmeyer, Jr Ward 3 Position 2 Alderman Rhonda Adams Ward 4 Position I Alderman Alan T. Long Ward 4 Position 2 A meeting of the Fayetteville City Council was held on September 16, 2014 at 5:30 PM in Room 219 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. Mayor Jordan called the meeting to order. PRESENT: Alderman Adella Gray, Sarah Marsh, Mark Kinion, Matthew Petty, Justin Tennant, Martin Schoppmeyer, Rhonda Adams, Alan Long, Mayor Lioneld Jordan, City Attorney Kit Williams, City Clerk Sondra Smith, Staff, Press, and Audience. Pledge of Allegiance Mayor's Announcements, Proclamations and Recognitions: None City Council Meeting Presentations, Reports and Discussion Items: Nominating Committee Report Alderman Tennant moved to add Dr. Damon Lipinski as an appointment to the Urban Forestry Advisory Board and add him to the Nominating Committee report. Alderman Gray seconded the motion. Upon roll call the motion passed 7-0. Alderman Adams was absent during the vote. Alderman Tennant presented the Nominating Committee Report. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 16, 2014 Page 2 of 8 A copy of the report is attached. Alderman Gray moved to approve the Nominating Committee report. Alderman Tennant seconded the motion. Upon roll call the motion passed 7-0. Alderman Adams was absent during the vote. Agenda Additions: None Consent: 2014 Bulletproof Vest Partnership Program: A resolution authorizing acceptance of a fifty percent (50%) matching grant award from the 2014 Bulletproof Vest Partnership Program in the amount of $40,209.00 for the replacement of body armor vests for Fayetteville police officers and tactical body armor vests for emergency response team officers, and approving a budget adjustment. Resolution 167-14 as recorded in the office of the City Clerk. Federal and State Law Enforcement Forfeiture Revenue: A resolution approving a budget adjustment in the total amount of $54,451.00 recognizing federal and state law enforcement forfeiture revenue received through August 2014 and proceeds from the sale of used tasers. Resolution 168-14 as recorded in the office of the City Clerk. Arkansas Fire and Police Pension Board Supplement: A resolution to approve a budget adjustment in the amount of $12,563.00 to recognize revenue received from the Arkansas Fire and Police Pension Board for a future supplement to pensioners of the Fayetteville Firefighters Pension and Relief Fund. Resolution 169-14 as recorded in the office of the City Clerk. Bid #14-50 H&H Directional Boring Services: A resolution to award Bid #14-50 and authorize the purchase of directional boring services from H&H Directional Boring, Inc. in variable amounts as needed for constructing pipeline crossings through the end of 2014. Resolution 170-14 as recorded in the office of the City Clerk. Alderman Long moved to approve the Consent Agenda as read. Alderman Tennant seconded the motion. Upon roll call the consent agenda passed unanimously. Unfinished Business: None 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 16, 2014 Page 3 of 8 Public Hearin: 909 W. Eagle Street Raze and Removal: A resolution to order the razing and removal of a dilapidated and unsafe structure owned by Kenneth C. and Wanda L. Easterling located at 909 W. Eagle Street in the City of Fayetteville, Arkansas, and to approve a budget adjustment. Jeremy Pate, Director of Development Services stated the owner obtained a demolition permit and is removing the structure and cleaning up the property. He requested the item to be tabled to December 2, 2014 to allow for sufficient time to do the work. Alderman Petty moved to table the resolution to the December 2, 2014 City Council meeting. Alderman Marsh seconded the motion. Upon roll call the motion passed unanimously. This resolution was tabled to December 2, 2014. New Business: RZN 14-4803 (Intersection of Champion and Windswept Drives/Summit Place S/D): An ordinance rezoning that property described in Rezoning Petition RZN 14-4803, for approximately 15.62 acres, located along Champion and Windswept Drives from NC, Neighborhood Conservation, to RSF-4, Residential Single Family, 4 units per acre. City Attorney Kit W11liams read the ordinance. Jeremy Pate, Director of Development Services gave a brief description of the ordinance. Planning Commission voted 8-0 in favor and staff is supporting the request. Alderman Petty moved to suspend the rules and go to the second reading. Alderman Gray seconded the motion. Upon roll call the motion passed unanimously. City Attorney Kit Williams read the ordinance. Alderman Gray moved to suspend the rules and go to the third and final reading. Alderman Marsh seconded the motion. Upon roll call the motion passed unanimously. City Attorney Kit Williams read the ordinance. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed unanimously. Ordinance 5710 as Recorded in the office of the City Clerk. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 16, 2014 Page 4 of 8 RZN 14-4807 (103 Plainview Ave./Daniel): An ordinance rezoning that property described in Rezoning Petition RZN 14-4807, for approximately 3.34 acres, located at 103 Plainview Avenue from RSF-4, Residential Single Family, 4 units per acre, to R-0, Residential -Office. City Attorney Kit Williams read the ordinance. Jeremy Pate, Director of Development Services gave a brief description of the ordinance. Planning Commission voted in favor of the request and staff is supporting the request. Alderman Tennant moved to suspend the rules and go to the second reading. Alderman Adams seconded the motion. Upon roll call the motion passed unanimously. City Attorney Kit Williams read the ordinance. Alderman Adams moved to suspend the rules and go to the third and final reading. Alderman Tennant seconded the motion. Upon roll call the motion passed unanimously. City Attorney Kit Williams read the ordinance. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed unanimously. Ordinance 5711 as Recorded in the office of the City Clerk. Kessler Consulting, Inc.: A resolution to authorize a contract with Kessler Consulting, hic. of Tampa, Florida for the development of a ten year solid waste master plan in an amount not to exceed $264,890.00, and to approve a budget adjustment. Jeff Coles, Director of Recycling & Trash Collection Division stated they were looking forward to moving forward with this. Quin Montana: I would like for the city to deal with the plastic bags, specifically as a separate issue from other waste. I know there is a plan that has been discussed. Jeff Coles: We discussed with Kessler Consulting about that very item. It will be an integral part of the plan and or ultimately what determinations are made about what's to be done with that. Quin Montana stated she had collected petition of people who are interested in dealing with plastic bags. She believes it is time this specific issue be addressed separately. She gave statistics on plastic bags. A discussion continued about plastic bags being a part of the overall plan. Alderman Marsh: This is something we have talked about in the Environmental Action Committee on several occasions. I have requested from our Chief of Staff as to when we can put 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 w Jayetteville-ar.gov City Council Meeting Minutes September 16, 2014 Page 5 of 8 this on staff schedule to look at this and he has promised me there will be staff time available in the spring. A discussion followed about performance metrics for the purpose of improving the program. Alderman Petty: Thank you to staff for preparing the Request for Proposals and making a selection. I want to be careful because sometimes it sounds like when we say we are going to study something, it sounds like we are saying we are going to wait for the study to see if it is a good idea or not to deal with it. That is not what I want to communicate. The reason we are doing this is because we know we have a problem and we need to put some effort into looking at it. Alderman Gray: Matthew, you are more interested in seeing the plan, than the study? Alderman Petty: Yes, the study is the baby step. Alderman Kinion: When this was developed we. talked about the different tasks that were involved with the Water, Sewer & Solid Waste Committee. This is very comprehensive. The price tag is formidable. We want to put a workable plan together where we meet our very aggressive goals the city has put forward previously. I would encourage anyone to look at the task that are outlined in this plan and also the committee that reviewed the companies that applied for this. We worked very hard to be sure they had the capacity to deliver what we had asked. I feel confident after working on the committee that this is an organization that will give us the deliverables we are asking for. Alderman Marsh: The Environmental Action Committee was involved in drafting the Request for Proposals for this. We are calling it a study, but the study is to make sure our plan is as effective as it possibly can be. I feel good about this proposal. I intend to address the plastics issue as soon as we are able. Alderman Petty moved to approve the resolution. Alderman Marsh seconded the motion. Upon roll call the resolution passed unanimously. Resolution 171-14 as recorded in the office of the City Clerk. 2014 Millage Levy: An ordinance levying a tax on the real and personal property within the City of Fayetteville, Arkansas, for the year 2014 fixing the rate thereof at 1.3 mills for General Fund Operations, 0.4 mills for the Firemen's Pension and Relief Fund, 0.4 mills for the Policemen's Pension and Relief Fund and 1.0 mill for the Fayetteville Public Library; and certifying the same to the County Clerk of Washington County, Arkansas. City Attorney Kit Williams read the ordinance. Paul Becker, Finance Director gave a brief description of the ordinance. He stated there was a story reported on the television that talked about this being a tax increase. He stated the television report was incorrect. He stated the same millage is being recommended as last year. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 w Iayetteville-ar.gov City Council Meeting Minutes September l6, 2014 Page 6 of 8 Alderman Petty moved to suspend the rules and go to the second reading. Alderman Gray seconded the motion. Upon roll call the motion passed unanimously. City Attorney Kit Williams read the ordinance. Alderman Petty moved to suspend the rules and go to the third and final reading. Alderman Gray seconded the motion. Upon roll call the motion passed unanimously. City Attorney Kit Williams read the ordinance. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed unanimously. Ordinance 5712 as Recorded in the office of the City Clerk. Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014: An ordinance authorizing the issuance and sale of not to exceed $11,900,000 of Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014, by the City of Fayetteville, Arkansas for the purpose of (1) refunding the City's outstanding Hotel, Motel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003, (2) financing certain costs in connection with the renovation and expansion of Walton Arts Center, and (3) financing certain costs in connection with a Regional Park; authorizing the execution and delivery of a Trust Indenture pursuant to which the Series 2014 Bonds will be issued and secured; authorizing the execution and delivery of an Official Statement pursuant to which the Series 2014 Bonds will be offered; authorizing the execution and delivery of a Bond Purchase Agreement providing for the sale of the Series 2014 Bonds; authorizing the execution and delivery of an Escrow Deposit Agreement providing for the redemption of the Series 2003 Bonds; authorizing the execution and delivery of a continuing Disclosure Agreement; and prescribing other matters relating thereto. City Attorney Kit Williams read the ordinance. Paul Becker, Finance Director gave a brief description of the ordinance. Alderman Long: What is BOKF, NA Bank? Paul Becker: Bank of Oklahoma and they have an affiliation or association with the Bank of Arkansas. They are the trustee on this issue. Alderman Gray moved to suspend the rules and go to the second reading. Alderman Marsh seconded the motion. Upon roll call the motion passed unanimously. City Attorney Kit Williams read the ordinance. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 16, 2014 Page 7 of 8 Alderman Long: What portion of the bond proceeds could be used to purchase the bond insurance? Dennis Hunt, .Stephens Inc.: I don't know an exact amount. Given what I've seen in the environment with the insurers right now it is relatively a small amount compared to the overall bond issue size. Paul Becker: Stephens is the underwriter. They are not our financial advisors. When the information is gathered it comes to me and I recommend that decision to the Mayor. We make the decisions on that based on a recommendation from the underwriter. Alderman Gray moved to suspend the rules and go to the third and final reading. Alderman Adams seconded the motion. Upon roll call the motion passed unanimously. City Attorney Kit Williams read the ordinance. City Attorney Kit Williams: For the last dozen or so years we have been served by Stephens Inc. as our underwriter and Kutak Rock as our bond counsel. They have been good to work with and very conscientious. It has been a pleasure working with you and thank you for your help with this particular issue. Mayor Jordan: You all have done a great job. Alderman Kinion: As an employee of the Bank of Arkansas which is owned by the Bank of Oklahoma Financial group, I am voluntarily going to abstain. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed 7-0. Alderman Kinion abstained. Ordinance 5713 as Recorded in the office of the City Clerk. City Council Agenda Session Presentations: 2015 General Fund Budget Discussion — Paul Becker, Finance Director City Council Tour: None Announcements: None Adjournment: 6:30 p.m. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 w .fayetteville-ar.gov City Council Meeting Minutes September 16, 2014 Page 8 of 8 Sondra E. Smith, City Clerk/Treasurer 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 w .fayetteville-ar.gov NORTHWEST ARKANSAS DEMOCRATGA7ETTE NORTHWEST ARKANSAS THE MORNING NEWSOFSPRINGDALE THE MORNING OFROGERS NEW SPME16LLC TIMES ON COUNTY Y BEN DAILEST CRECORD 212 NORTH FAST AVENUE, FAYETTEVILI$ ARKANSAS 72701 1 P.O. BOX 1607, 727021479-442-17001 WWW.NWANEWS.COM AFFIDAVIT OF PUBLICATION I, Karen Caler, do solemnly swear that I am the Legal Clerk of the Northwest Arkansas Newspapers, LLC, printed and published in Washington and Benton County, Arkansas, bona fide circulation, that from my own personal knowledge and reference to the files of said publication, the advertisement of. City of Fayetteville - Ordinance 5713 Was inserted in the Regular Editions on: Sept. 19, 2014 Publication Charges: $ 1081.58 L Karen ealer Subscribed and sworn to before me This 2`1 day of &�- , 2014. 0A*' W& Notary My Commission Expires:(2.0 CATHY WILES Arkansas - Benton County Notary Public - Comm# 12397118 My Commission Expires Feb 20, 2024 **NOTE** Please do not pay from Affidavit. Invoice will be sent. RECEIVED SEP 24 2014 CITY OF FAYETTEVILLE CITY CLERKS OFFICE See Attached 1 o prescribe the terms and conditions upon which the Bonds areto be executed, authenticated, issued, accepted, secured, the Mayor Is hereby authorized and directed to execute and acknowledge the Trust Indenture, by and the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, the Trustee, and the CityClerk is hereby b and directed to execute and acknowledge the Trust Indenture and to affix the seal of the City thereto, and the Mayor City Clerk are hereby authorized and directed to cause the Trust Indenture to be accepted, executed and'acknowl- y the Trustee. The Trust Indenture is hereby approved insubstantially the form submitted to the meeting, including, Imitation, the provisions thereof pertaining to the pledge of Tax Receipts and the terms of the Bonds. The Mayor is wthorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Trust Indenture in laity the form submitted to this meeting, With such changes as shall be approved by such persons executing the Trust e, their execution to constitute conclusive evidence of such approval. s given that a copy of the Trust Indenture in substantially the to" authorized to be executed is on file with the City d Is available for inspection by any interested person.) 4. There is hereby authorized and approved a Preliminary Official Statement of the City, Including thecover page enclose, attached thereto, relating to the Bands.' The Preliminary Official Statement is hereby "deemed final' by the in the meaning of U.S. Securities and Exchange Commission Rule 15c2-12. The distribution of the Preliminary Official nt is hereby approved. The Preliminary Official Statement, as amended to conform to the terms of.the Bond Purchase int, including Exhibit A thereto, and with such other changes and amendments as are mutually agreed to by the City a this meeting, with such changes as shail.be approved by such persons, the Mayor's execution to constitute conclusive ince of such approval. be is given that a copy of the Preliminary Ctficlai Statement Is on file with the City Clerk and Is available for Inspection by .4t-msted person.) - IonS.- In order to prescribe.the terms and conditions upon which the Bonds are to be sold to the Underwriter, the Mayor 'eby authorized and directed to execute the Bond Purchase Agreement on behalf of the City, to be dated as of the date of :scution, by and between the City and the Underwriter, and the Bond Purchase Agreement is hereby approved in substan- the form submitted to this meeting, and the Mayor Is hereby authorized to confer with the Underwriter and Bond Counsel Jet to complete the Bond Purchase Agreement In substantially the form submitted to this meeting, with such changes as be approved by such persons executing the Bond Purchase Agreement, their execution to constitute conclusive evidence ch approval. ce is given that a copy of the Bond Purchase Agreement in substantially the forth authorized to be executed Is on file with :Ity Clerk and is available for Inspection by any interested person.) on 6. In order to provide for the redemption of the Series 2003 Bonds, the Mayor is hereby authorized and directed to Aetna Escrow Deposit Agreement to be dated as of the date of Its execution, by and between the City and BOKF. NA, a Escrow Trustee, and the Mayor is hereby authorized and directed to cause the Escrow Agreement to be executed by scrow Trustee. The Escrow Agreement is hereby approved in substantially the form submitted to this meeting, and the fr is hereby authorized to confer with the Underwriter, the Escrow Trustee and Bond Counsel in order to complete the low Agreement in substantially the forth submitted to this meeting, with such changes as shall be approved by such persons long the Escrow Agreement, their execution to constitute conclusive evidence of such approval. ce is given'thata copy of the Escrow Agreement In substantially the form authorized to be executed is on file with the City and is available for Inspection by any interested person.) fon 7. In order to Drovide for continulnq disclosure of certain financial and ooeratina information with respect to the Tax Died to execute the Continuing Disclosure Agreement to be dated as of the date of c the Simmons First Trust Company. N.A., the Dissemination Agent, and the Mayor is 'eament In substantially the form submitted to this meeting, with such changes as shall be approved by such. persons ipofing the Continuing Disclosure Agreement, their execution to constitute conclusive evidence of such approval ince is given that a copy of the Continuing Disclosure Agreement in substantially the forth authorized to be executed is on With the City Clerk and Is available for Inspection by any Interested person.) Alone. In order to secure lower Interest rates on the Bonds, the Underwriter has proposed that the City consider the pur- use of a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of 'principal of and interest on the Bonds when due. If deemed economically advantageous by the Mayor, upon the advice of 'Underwrites, the Mayor is hereby authorized to execute an Insurance commitment and to do anyand all things necessary accomplish the delivery of a bond Insurance policy with respect to the Bonds. Stkm 9. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things :eatery to effect the issuance, sale, execution and delivery of the Bends and to effect the execution and delivery of the Trust enters, the Bond Purchase Agreement, the Official Statement, the Escrow Agreement, the Continuing Disclosure Agreement I a Tax Regulatory Agreement relating to the tax exemption of interest on the Bonds, and to perform all of the obligations' he City under and pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on behalf of City, to execute all papers, documents, certificates and other Instruments that may be required for the carrying out of such homy or to evidence the exercise thereof. :don 10. The provisions of this Ordinance are hereby declared to be severable, and if any section, phrase or provision shall any reason be declared to be Illegal or invalid, such declaration shall not affect the validity of the remainder of the sections, ases or provisions of this Ordinance. - aWn 11. All ordinances, resolutions and pads thereof In conflict herewith are hereby repealed to the extent of such con, - f "PASSED and APPROVED this day of 16th day of September, 2014. ,APPROVED:, - ATTEST: LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerklfreasurer NORTHWEST ARKANSAS DEMOCRAT-GAZETTE NORTHWEST ARKANSAS THE S NGDALE �SPAPERS W F ROGERS THEMORNINGMORNING NEWS OF ASTERS THE NORTHWEST NORTHWEST ARKANSAS TIMES LLC RESTOS COUNTY DAILY RECORD 212 NORTH EAST AVENUE, FAYETTEVILLE. ARKANSAS 72701 1 P.O.BOX 1607, 72702 1 479442-1700 1 WWW.NWANEWSCOM AFFIDAVIT OF PUBLICATION I, Karen Caler, do solemnly swear that I am the Legal Clerk of the Northwest Arkansas Newspapers, LLC, printed and published in Washington and Benton County, Arkansas, bona fide circulation, that from my own personal knowledge and reference to the files of said publication, the advertisement of: City of Fayetteville - Ordinance 5713 Was inserted in the Regular Editions on: Sept. 19, 2014 Publication Charges: $ 1081.58 Karen ealer Subscribed and sworn to before me This 21-� day of 2014. Notary Public My Commission Expires:Z�(Zo CATHY WILES Arkansas - Benton County Notary Public - Comm# 12397118 My Commission EzPires Feb 20, 2024 **NOTE** Please do not pay from Affidavit. Invoice will be sent. RECEIVED SEP 2 4 2014 CITY OF FAYETTEVILLE CITY CLERKS OFFICE See Attached ORDINANCE NO. 5713 ORDINANCE AUTHORIZING THE ISSUANCE AND SALE PT NOT TO IXCEEDHE a e evl le 30QC000FTAL HOTEL, IM MOTEL AND RESTAND REANT FUNDING BONDS, SERIES 2014, BY ISE j] =NUE CAPITAL IMPROVEMENT AND REFUNDING BONDS, SERIES REFUNDING T BY THE !y STANDIOF ETTENLLE, ARKANSAS RE THEPURPOSEGROSS RECEIPTTFUNDING .xsxxasns STANDING HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX REFUNDING D$, SERIES 2003, EXPANSION OF WA CERTAIN COSTS , CONNECTION WITH THE OVATION AND IXPANSION OF WALTON ARTS CENTER, AND (3) FINANCING CERTAIN COSTS IN CONNECTION WITH :STATEMENT PURSUANT TO WHICH THE SERIES 2014 BONDS WILL BE OFFERED; AUTHORIZING THE EXECUTION AND iDELIVERY OFA BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF THE SERIES 2014 BONDS; AUTHORIZING ,THE EXECUTION AND DELIVERY OF AN ESCROW DEPOSIT AGREEMENT PROVIDING FOR THE REDEMPTION OF THE ;SERIES. 2003 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT; SAND PRESCRIBING OTHER MATTERS RELATING THERETO. '.WHEREAS, the City of Fayetteville, Arkansas (the 'City" is authorized untler the provisions of the Advertising and Promotion jGommissicn Act, Arkansas Code Annotated (2008 Rept. & 2013 Supp.) §§26 75 601 et seq. (as from time to time amended :the "Act"), to issue its bonds secured by and payable from the revenues derived by the Clty from the one percent (1 %) tax (the I'tiTax'7lI so' by the City pursuant to Ordinance No. 2310 adopted by the Clty on March 1, 1977, As subsequently amended 'upon (i) the gross receipts or gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommoda- itlons for profit within the boundaries of the City antl (iif the portionbI gross receipts or gross proceeds received by restaureate, cafes, cafeterias, tlelis, tlnve-in re'stauranis, cartyout restauren[s, concession stands, convenience stores, grocery store- resfeuranls,.caterers antl similar businesses within the City from the sale of prepared food and v.AgAsfaran premises or off -premises consumption; and WHEREAS, under the authority of the Act and pursuant to the provisions of Ordinance No. 4488 adopted on May 20, 2003, the City has previously issued and there are presently outstanding not more than $1,275,000 in aggregate parapet amount of the City's Hotel, Motel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), which Series 200$ Bonds are secured by the pledge of and lien upon the City's receipts of the A&P Commission Tax; and WHEREAS, the City's Advertising and Promotion Commission (the "A&P Commission'h by resolution adopted on May 13, 2013, has recommended that the City assist in (i) the completion of the Walton Arts Center expansion and renovation (the "Walton Arts Center Improvements") and (ii) the acquisition, construction and equipping of a regional park (the "Park Improvements'"), through the issuance of Its Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds WHEREAS, the A&P Commission has determined and the City Council concurs that the Walton Arts Center is a cultural arts and entertainment facility and its expansion and renovation will constitute a "tourism project" within the meaning of Arkansas Code Annotated (1998 Real.) §14-170-205 which will secure and develop tourism and thereby stimulate and enhance the economic growth and well-being of the City and its people; and - WHEREAS, the A&P Commission has further determined and the City Council concurs that the City's proposed regional park will constitute a "public recreation facility" and "city park" within the meaning of Arkansas Code Annotated (2008 Repi.) §26 75 606 and a "tourism project" within the meaning of Arkansas Code Annotated (1998 Repl.) §14-170-205 whlr' III secure and develop tourism and thereby stimulate and enhance the economic growth and well-being of the City and its p__ple; and WHEREAS, pursuant to the provisions of Ordinance No. 5605, duly adopted by the City Council on August 6, 2013, there was submitted to the qualified electors of the CiN the questions of the issuance of bonds pursuant to the Act in principal amount O not to exceed $1,500,000 for the purpose of refunding the Series 2003 Bonds, (i) not to exceed $6,900,000 for the purpose of financing a portion of the Walton Arts Center Improvements, and (ii) not to exceed $3,500,000 for the purpose of finer., qg A portion of the Park Improvements, said bonds to be secured by a pledge of and lien upon the City's receipts of the Tax (the WHEREAS, at a special election held November 12, 2013, a majority of the qualified electors of the Cit/ voting on the afore- mentioned questions approved the Issuance of the bonds for each of aforementioned purposes and the corresponding pledge of the Tax Receipts to the payment thereof; and i NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Fayetteville, Arkansas that: Section 1. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitutionof the State of Arkansas and the Act, there Is hereby authorized the issuance of bonds of the City to be designated As "Hotel, Motel and Restaurant Gross Receipts Tax end Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014" (the "Bonds"). The Bonds shall be issued in the original aggregate principal amount of not to exceed Eleven Million Nine Hundred Thousand Dollars ($11,900,000), shall mature not later than December 1, 2044, and shall bear jriteia d at the rates specified in the Bond Purchase Agreement. As authorized by the November 12, 2013 special election, natio exceed $1,500,000aggregate principal amount of the Bonds shall be deemed applicable to the refunding of the Series 2003 Bonds, not to exceed $6,900,000 aggregate principal amount of the Bonds shall be deemed applicable to the Watton Arts Canter Improvements, and not to exceed $3,500,000 aggregate principal amount of the Bonds shall be deemed Applicable to Theaverage yield on the Bonds as a whole shall'not exceed 5.000% per annum. The proceeds of the Bonds will be utilized @ to finance a portion of the cost of redeeming the Series 2003 Bonds, (t) to finance a portion of the costs of the Walton Arts Center Improvements, IN) to finance a portion of the costs of the Park Improvements, (iv) to establish a debt service reserve for the Bonds or to purchase a surety bond for reserve purposes, (v) to pay a premium for bond insurance, if deemed economi- :elly beneficial, and (vi) to pay printing, underwriting, legal antl other expenses incidental to the issuance of the Bonds. The Bonds shall be Issued in the fortes and denominations, shall be dated shall be numbered, shall mature, shall be subject to 'ademption prior to maturity, and shall contain such other terms, covenants and conditions, all as set forth in the Trust Indenture submitted to this meeting. - - - - The Mayor Is hereby authorized and directed to execute and deliver the Bonds in one or more series, each series to be in Wbetantlally the form thereof contained in the Trust Indenture submitted to this meeting, and the City Clerk is hereby autho- fied and directed to execute and deliver the Bonds and an affix the seal of the City thereto, and the Mayor antl City Clerk are jereby Authorized and directed to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby' iutbodzed to confer with the Trustee, Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), and Kutak Rock LLP, [idle Rock, Arkansas ("Bond Counsel"), In order to complete the Bonds in substantially the form contained in the Trust Intlenture suEml ted to this meeting, with such changes As shall be approved by such persons executing the Bonds, their execution to �nstRute conclusive evidence of such approval. - - 3Action 2. In order to pay the principal of and Interest on the Bonds as they mature or are called for redemption prior to matu- !iSy; there is hereby pledged all of the Tax Receipts. The levy and collection of the Tax shall not be discontinued or reduced dhlle any of the Bonds are outstanding unless sufficient funds are on deposit with the Trustee under the Trust Indenture to 'redeem the Bonds In full. The City covenants and agrees that all Tax Receipts will be accounted for separately as special funs on the books of the City, and all TAX Receipts will be deposited and will be used solely as provided in the Trust Indenture. 1 o prescribe the terms and conditions upon which the Bonds are to be executed, authenticated, issued, accepted, secured, the Mayor is hereby authorized and directed to execute and acknowledge the Twat Indenture, by and the City and Simmons Post Trust Company, N.A., Pine Bluff, Arkansas, the Trustee, and the City Clerk is hereby d and directed to execute and acknowledge the Twat Indenture and to affix the seal of the City thereto, and the Mayor City Clerk are hereby authorized and directed to cause the Trust Indenture to be accepted, executed and acknowl- y the Trustee. The Trust Indenture is hereby approved insubstantially the form submitted to this meeting, including, limitation, the provisions thereof pertaining to the pledge of Tax Receipts and the terms of the Bonds. The Mayor is urthorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Twat Indenture in lally the form submitted to this meeting, with such changes as shall be approved by such persons executing the Trust e, their execution to constitute conclusive evidence of such approval. s given that a copy of the Trust Indenture in substantially the formauthorized to be executed is on file with the City d is available for inspection by any interested person.) - 4. There is hereby authorized and approved a Preliminary Official Statement of the City, Including thecover page andices attached thereto. relalino to the Bonds.' The Pralimin. Official Statement is hembry "deemed final" by the J. The Preliminary Official Statement, as amended to conform to the terms of.the A thereto, and with such other changes and amendments as are mutually agree referred to es the 'Official Statement." and the Mayor is hereby authorized to exa >f the Cay. The Official Statement is hereby approved in substantially the form o Cyto this meeting, with, such changes as shall be approved by such persons, the Mayor's execution to constitute conclusive Blanca of such approval - os Is given that a copy of the PreOminary Official Statement Is on file with the City Clerk and is available for Inspection by y yaerested person.)- iritlon 5.' In order to prescribe. the terms and conditions upon which the Bonds are to be sold to the Underwriter, the Mayor Hereby authorized and directed to execute the Bond Purchase Agreement on behalf of the City, to be dated as of the date of execution, by and between the City and the Underwriter, and the Bond Purchase Agreement is hereby approved in substan- ity the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Underwriter and Bond Counsel order to complete the Bond Purchase Agreement in substantially the form submitted to this meeting, with such changes as all be approved by such persons executing the Bond Purchase Agreement, their execution to constitute conclusive evidence such approval. ivlce is given that a Copy of the Bond Purchase Agreement In substantially the form authorized to be executed Is on file with City Clerk and is available for Inspection by any Interested person.) etion & In order to provide for the redemption of the Series 2003 Bonds, the Mayor is hereby authorized and directed to acute the Escrow Deposit Agreement to be dated as of the date of its execution, by and between the City and BOKF, NA, She Escrow Trustee, and the Mayor is hereby authorized and directed to cause the Escrow Agreement to be executed by 1 Escrow Trustee. The Escrow Agreement is hereby approved in substantially the form submitted to this meeting, and the tyor is hereby authorized to confer with the Underwriter, the Escrow Trustee and Bond Counsel in order to complete the crow Agreementm substamiallythe form submitted to this meeting, with such changes as shall be approved by such persons ecuting the Escrow Agreement, their execution to constitute conclusive evidence of such approval lvloe is glven'that a copy of the Escrow Agreement in substantially the form authorized to be executed is on file with the City srk,and is available for Inspection by any interested person.) bcgon 7. In order to provide for continuing disclosure of Coa In financial and operating information with respect to the Tax Ized and directed to execute the Continuing Disclosure Agreement to be dated as or the the Citv' and the Simmons First Trust Company. N.K. the Dissemination Agent, and the Hent in substantially the form submitted to this meeting, with such changes as shall be approved by such persons ng the Continuing Disolosure Agreement, their execution to constitute conclusive evidence of such approval. is given that a copy of the Continuing Disclosure Agreement in substantially the form authorized to be executed Is on n the City Clerk and is available for Inspection by any interested person.) 18. In.order to secure lower Interest rates on the Bonds, the Underwriter has proposed.that the City Consider the put - if a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of aipal of and interest on the Bonds when due. If deemed economicaly advantageous by the Mayor, upon the advice of lerwritet, the Mayor is hereby authorized to execute an Insurance commitment and to do any.and all things necessary mplish the delivery of a bond Insurance policy with respect to the Bonds. i l). The Mayor and City Clark, for and on behalf of the City, are hereby authorized and directed to do any and all things ary to effect the Issuance, sale, execution and delivery of the Bonds and to effect the execution and delivery oflheTrust re, the Bond Purchase Agreement, the Official Statement, the Escrow Agreement, the Continuing Disclosure Agreement 'ax Regulatory Agreement relating to the tax exemption of interest on the Bonds, and to perform all of the obligations My under and pursuant thereto. The Mayor and the City Clerk are further authorized and directed for and on behalf of to execute all papers, documents, certificates and other Instruments that may be required for the carrying out of such y or to evidence the exercise thereof. . . r 10. The provisions of this Ordinance are hereby declared to be severable, and if any section, phrase or provision shall reason be declared to be illegal or invalid, such declaration shall not affect the validity of the remainder of the sections. i or provisions of this Ordinance, - - n 11. All ordinances, resolutions and parts thereof In conflict herewith we hereby repealed to the extent of such con,- tASSED and APPROVED this day of 18th day of September, 2014. JoPROVED:. - ATTEST: y: By: LIONELD JORDAN, Mayor SONDRA E. SMITH, City ClerkfTreasurer CITY OF FAYETTEVILLE, ARKANSAS ADVERTISING AND PROMOTION COMMISSION A RESOLUTION RECOMMENDING TO THE CITY THE ISSUANCE AND SALE OF (1) APPROXIMATELY $1,500,000 OF HOTEL AND RESTAURANT GROSS RECEIPTS TAX REFUNDING BONDS FOR THE PURPOSE OF REFUNDING THE CITY'S OUTSTANDING HOTEL AND RESTAURANT GROSS RECEIPTS TAX REFUNDING BONDS, SERIES 2003, (2) APPROXIMATELY $6,900,000 OF HOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT BONDS FOR THE PURPOSE OF FINANCING CERTAIN CAPITAL IMPROVEMENTS IN CONNECTION WITH THE PROPOSED WALTON ARTS CENTER EXPANSION AND RENOVATION, AND (3) APPROXIMATELY $3,500,000 OF HOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT BONDS FOR THE PURPOSE OF FINANCING CERTAIN CAPITAL IMPROVEMENTS IN CONNECTION WITH A PROPOSED REGIONAL PARK; AND PRESCRIBING OTHER MATTERS RELATING THERETO. WHEREAS, the Advertising and Promotion Commission (the "Commission") of the City of Fayetteville, Arkansas (the "City") was established under the provisions of the Advertising and Promotion Commission Act, Arkansas Code Annotated (2008 Repl.) §§26-75-601 et seq. (as from time to time amended, the "Act"); and WHEREAS, pursuant to the Act and following the recommendation of the Commission, the City has previously issued its City of Fayetteville, Arkansas Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003, dated July 1, 2003 (the "Series 2003 Bonds"), for the purpose of refinancing a portion of the costs of constructing the Fayetteville Town Center; and WHEREAS, the Series 2003 Bonds were originally issued in the aggregate principal amount of $6,335,000, of which $1,885,000 presently remains outstanding; and WHEREAS, the Commission finds that the Walton Arts Center is a cultural arts and entertainment facility and its expansion and renovation will constitute a "tourism project" within the meaning of Arkansas Code Annotated (1998 Repl.) §14-170-205 which will secure and develop tourism and thereby stimulate and enhance the economic growth and well-being of the City and its people; and WHEREAS, the Commission recommends that the City assist in the completion of the proposed Walton Arts Center expansion and renovation (the "Walton Arts Center Improvements") through the issuance of its capital improvement bonds under the authority of the Act and Arkansas Code Annotated (1998 Repl.) §14-170-201 et seq.; and 4843-6717-3376.4 WHEREAS, the Commission finds that the City's proposed regional park will constitute a "public recreation facility" and "city park" within the meaning of Arkansas Code Annotated (2008 Repl.) §26-75-606 and a "tourism project" within the meaning of Arkansas Code Annotated (1998 Repl.) §14-170-205 which will secure and develop tourism and thereby stimulate and enhance the economic growth and well-being of the City and its people; and WHEREAS, the Commission recommends that the City assist in the financing of the acquisition, construction and equipping of a regional park (the "Park Improvements") through the issuance of its capital improvement bonds under the authority of the Act and Arkansas Code Annotated (1998 Repl.) §14-170-201 et seq.; and WHEREAS, in order to accomplish the financing of the Walton Arts Center Improvements and/or the Parks Improvements, it is desirable to restructure the City's existing debt service obligations with respect to the Series 2003 Bonds by refunding such bonds; and NOW, THEREFORE, BE IT RESOLVED by the Advertising and Promotion Commission of the City of Fayetteville, Arkansas that: Section 1. The issuance and sale of Hotel and Restaurant Gross Receipts Tax Refunding Bonds (the "Refunding Bonds") in the approximate principal amount of $1,500,000 is hereby recommended to the City in order to provide a portion of the funds needed to redeem the Series 2003 Bonds, to establish a debt service reserve, and to pay the costs of issuing the Refunding Bonds, including the procurement of bond insurance if deemed economically feasible. Section 2. The issuance and sale of Hotel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds (the "Walton Arts Center Bonds") in the approximate principal amount of $6,900,000 is hereby recommended to the City in order to provide a portion of the funds needed to finance the Walton Arts Center Improvements, to establish a debt service reserve, and to pay the costs of issuing the Walton Arts Center Bonds, including the procurement of bond insurance if deemed economically feasible. Section 3. The issuance and sale of Hotel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds (the "Parks Bonds") in the approximate principal amount of $3,500,000 is hereby recommended to the City in order to provide a portion of the funds needed to finance the Parks Improvements, to establish a debt service reserve, and to pay the costs of issuing the Parks Bonds, including the procurement of bond insurance if deemed economically feasible. Section 4. The Chairman is hereby authorized and directed to do any and all things necessary to effect the issuance, sale, execution and delivery of the Refunding Bonds, the Walton Arts Center Bonds and the Parks Bonds and the performance of all acts of whatever nature necessary to effect and carry out the authority conferred by this Resolution. Section 5. The provisions of this Resolution 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 Resolution. 2 4843-6717-3376.4 Section 6. All resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. ADOPTED AND APPROVED THIS /„5 DAY OF 2013. Cha4nlan 4843-6717-3376.4 EXHIBIT G COSTS OF ISSUANCE Bond Counsel Fee and Expenses Kutak Rock LLP 425 West Capitol Avenue, Suite 1100 Little Rock, AR 72201 Rating Fee Standard & Poor's Ratings Services 2542 Collection Center Drive Chicago, IL 60693 Trustee Fees Simmons First Trust Company, N.A. 501 Main Street Pine Bluff, AR 71601 Escrow Trustee Fees BOKF, NA P.O. Box 2300 Tulsa, OK 74192 Publication Reimbursement (Ordinances and Notices) City of Fayetteville 113 West Mountain Fayetteville, AR 72701 Underwriting Expenses Stephens Inc. 3425 North Futrall Drive, Suite 201 Fayetteville, AR 72703 Total: G-1 4840-8634-9600.2 $ 55,000.00 17,300.00 2,500.00 2,112.50 2,302.29 3,057.31 $K222 10 KUTAK ROCK LLP LITTLE ROCK, ARKANSAS Telephone 501-975-3000 Facsimile 501-975-3001 Federal ID 47-0597598 November 19, 2014 Check Remit To: Kmak Rock LLP PO Box 30057 Omaha, NE 68103-1157 Wire Transfer Remit To: ABA # 104000016 First National Bank of Omaha Kutak Rock LLP A/C # 24-690470 City of Fayetteville, Arkansas Fayetteville, AR Invoice No. 2010171 Matter No. 1123401-23 $10,980,000 CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS SERIES 2014 For Professional Legal Services Rendered and Expenses Incurred as Bond Counsel to the City of Fayetteville, Arkansas in connection with the issuance of the captioned bonds Total: 4846-9996-8800.1 ®STANDARD & POOR'S Standard & Poor's Financial Services, LLC RATINGS SERVICES Federal I.D.: 26-3740348 MOGRAW HILL FINANCIAL 0201 MR. DENNIS HUNT STEPHENS, INC. 3425 N. FUTRALL, SUITE 201 FAYETTEVILLE AR 72703 101011 ANALYTICAL SERVICES RENDERED IN CONNECPION WITH: US$10,995,000 City of Fayetteville, Arkansas, Hotel, Motel, & Restaurant Gross Receipts Tax & Tourism Revenue Capital Improvement & Refunding Bonds, Series 2014, dated: November 1, 2014, due: November 1, 2024 [Fee Discounted For Frequent Issuance] FOR IWUIRIES PLEASE CONTACT:SANTOSHI VYRAGARAM SANTHOSHI.VYRAGARAt4@STANDARDANDPOORS.CCM PHONE: 1-800-767-1896 EXT #5 FAX: 1-212-438-5178 For inquiries contact the client services representative listed on this invoice. Do not return it or direct any inquiries about the invoice to credit ratings analysts. S&P maintains a separation of commercial and analytical activities. Please note that our credit ratings analysts are not permitted to communicate, negotiate, arrange or collect credit rating fees. PLEASE REFERENCE INVOICE OR STATEMENT NUMBER ON ALL CHECKS AND WIRE TRANSFERS Invoice No.: 10356760 Customer No.: 1000073473 Invoice Date: 10/20/14 Page No.: 1 Print Date: 10/27/14 $17,300.00 This Invoice Due and Payable As Of: 10/20/14 INVOICE TOTAL $17,300.00 USD Make Checks Payable To: ®STANDARD&POOR'S RATINGS SERVICES MoGRAW HILLFINANCIAL Standard & Poor's Financial Services, LLC Federal I.D.: 26- 3740348 Billed TO: Wire Transfer To: 0201 MR. DENNIS HUNT STEPHENS, INC. 3425 N. FUTRALL, FAYETTEVILLE AR Invoice No.: 10356760 Customer No.: 1000073473 Invoice Date: 10/20/14 Remit To: Please include invoice # STANDARD AND POOR'S Bank of America -San Francisco CA 2542 COLLECTION CENTER DRIVE SUITE 201 Standard & Poor's CHICAGO, IL 60693 72703 Account # 12334-02500 ABA # 0260-0959-3 Or E-mail: cashapps@mhfi.com 10000734731 10356760 01730000 1 700 10 07 1014 2 TOTAL AMOUNT DUE: $17,300.00 USD AMOUNT ENCLOSED: Stephens Jackson T. Stephens, 1923-2005 Chairman Emeritus in Perpetuity $10,890,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax Refunding and Capital Improvement Bonds Series 2014 Clearing: CUSIP Service Breau DTC I-Preo Misc. (Postage, Federal Express, Ticket Charges) Day Loan Total Stephens Inc 111 Center Street 501-377-2000 (t) Little Rock, AR 72201 501-377-2666 (f) 800-643-9691 $668.00 820.00 370.38 878.00 320.93 $3,057.31 www.stephens.com 7014 1200 0000 2279 1765 VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED Internal Revenue Service Center Ogden Utah 84201 $10,980,000 CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS SERIES 2014 Dear Sir or Madame: I have enclosed for filing the original and one copy of IRS Form 8038-G with respect to the above -captioned matter. Please return the copy to me, showing your file -mark, using the enclosed prepaid self addressed envelope. If you have any questions or require additional information, please do not hesitate to contact me. Sincerely, (�..� or on M. Wilbourn js enclosure 4848-4460-9056.1 KUTAK ROCK LLP ATLANTA CHICAGO SUITE 2000 DENVER 124 WEST CAPITOL AVENUE FwYETTEVILLE IRVINE NORTHWEST ARKANSAS OFFICE LITTLE ROCK, AR 72201-3706 KANSAS CITY LITTLE ROCK SUITE 400 501-975-3000 LOS ANGELES 234 EAST MILLSAP ROAD FACSIMILE 501-975-3001 MINNEAPOLIS FAYETTEVILLE, ARKANSAS 72703-4033 OKLAHOMA CITY 473-073-4200 W W W.kutakrook-oom OMAHA PHILADELPHIA RICHMOND SCOTTSDALE GORDON M. WILBOURN gordon.wI1boum@?kutakMCkC0M November 20, 2014 WASHINGTON wwsHlrvaroN (501)975-3101 WICHITA 7014 1200 0000 2279 1765 VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED Internal Revenue Service Center Ogden Utah 84201 $10,980,000 CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS SERIES 2014 Dear Sir or Madame: I have enclosed for filing the original and one copy of IRS Form 8038-G with respect to the above -captioned matter. Please return the copy to me, showing your file -mark, using the enclosed prepaid self addressed envelope. If you have any questions or require additional information, please do not hesitate to contact me. Sincerely, (�..� or on M. Wilbourn js enclosure 4848-4460-9056.1 F. 8038-16 Information Return for Tax -Exempt Governmental Obligations (Rev. September 2011) ►Under Internal Revenue Code section 149(e) OMB No. 1545-0720 111 -See separate instructions. Department of the Treasury Internal Revenue Service Caution: If the issue price is under $100,000, use Form 8038 -GC. l;MM Renortina Authority If Amended Return. check here ► F-1 1 Issuer's name 2 Issuer's employer identification number (EIN) City of Fayetteville, Arkansas 71 6018462 3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions) 3b Telephone number of other person shown on 3a 4 Number and street (or P.O. box if mail is not delivered to street address) Room/suite 5 Report number (Far IRS Use Only) 113 West Mountain Street 18 11,642,791 00 131 1 6 City, town, or post office, state, and ZIP code 7 Date of issue Fayetteville, Arkansas 72701 11-19-14 8 Name of issue Hotel, Motel & Restaurant Gross Receipts Tax and Tourism Revenue 9 CUSIP number Capital Improvement and Refunding Bonds, Series 2014 312665 AP7 10a Name and title of officer or other employee of the issuer whom the IRS may call for more Information (see 101, Telephone number of officer or other instructions) employee shown on 10a Gordon Wilboum, Kutak Rock LLP 501-975-3000 ■mil■ Tvoe of Issue tenter the ISSue once). See the instructions and attach schedule. 11 12 13 14 15 16 17 18 19 20 Education . . . . . . . . . . . . . . . . . . . . . . . . Health and hospital . . . . . . . . . . . . . . . . . . . . Transportation . . . . . . . . . . . . . . . . . . . . . . Public safety . . . . . . . . . . . . . . . . . . . . . . . Environment (including sewage bonds) . . . . . . . . . . . . . . Housing . . . . . . . . . . . . . . . . . . . . . . . . Utilities . . . . . . . . . . . . . . . . . . . . . . . . Other. Describe ► Civic Center and Parks If obligations are TANS or RANs, check only box 19a . . . . . . . . . If obligations are BANS, check only box 19b . . . . . . . . . . . . If obligations are in the form of a lease or installment sale, check box . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ► ❑ . . . . ► ❑ . . . . ► ❑ 11 12 13 14 15 16 17 18 11,642,791 00 Description of Obligations. Complete for the entire issue for which this form is being filed. (a) Final maturity date (b) Issue price (c) Stated redemption price at maturity (d) Weighted average maturity (e) Yield 21 11-1-39 11,642,7911 $ 10,980,0001 0,980,000 14.872 ears 3.2554 % Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . 22 20,271 00 23 Issue price of entire issue (enter amount from line 21, column (b)) . . . . . 23 11,642,791 00 24 Proceeds used for bond issuance costs (including underwriters' discount) . 24 1 192,3001 00 25 Proceeds used for credit enhancement . . . . . . . . . . . 25 27,731 00 26 Proceeds allocated to reasonably required reserve or replacement fund 26 00 27 Proceeds used to currently refund prior issues . . . . . . . . . 27 599,100 00 28 Proceeds used to advance refund prior issues . . . . . . . . . 28 00 29 Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . . 29 819,131 00 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) . . . 30 10,823,660 00 31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . ► 0.867 Vears 32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . ► years 33 Enter the last date on which the refunded bonds will be called (MM/DD/YYYY) . . . . . . ► 12-22-14 34 Enter the date(s) the refunded bonds were issued ► (MM/DDNYYY) 7-10-03 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773s Form 8038-G (Rev. 9-2011) Form 8088-G (Rev. 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35 1 01 00 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC) (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 36a 0 00 b Enter the final maturity date of the GIC ► C Enter the name of the GIC provider► 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units . . . . . . . . . . . . . . . . . . . . . . . . 37 38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box ► ❑ and enter the following information: b Enter the date of the master pool obligation ► c Enter the EIN of the issuer of the master pool obligation ► I Enter the name of the issuer of the master pool obligation ► 39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box . . . . ► ❑ 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . . ► ❑ 41a If the issuer has identified a hedge, check here ► ❑ and enter the following information: b Name of hedge provider 01 c Type of hedge ► d Term of hedge ► 42 If the issuer has superintegrated the hedge, check box . . . . . . . . . . . . . . . . . . . . . ► ❑ 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations (see instructions), check box . . . . . . . . ► 0 44 If the issuer has established written procedures to monitor the requirements of section 148, check box . . . . . ► Q 458 If some portion of the proceeds was used to reimburse expenditures, check here ► ❑ and enter the amount of reimbursement . . . . . . . . . ► b Enter the date the official intent was adopted ► Under penalti of perjury, I declare th t I have ex mined this return and accompanying schedules and statements, and to the best of my knowledge Signature and belief, the are ta, co fect, nd mplete. I rther declare that I consent to the IRS's disclosure of the issuer's return information, as necessary to and proceI tum, 1L the p s fi the I have a orized above. Consent ='I // Lioneld Jordan, Mayor ' gnat a of issuer' Gho zed representative ate Type or pont name and title Paid Print/Type prepare na Prep er's signature Date Check ❑ if Pr IN Preparer Gordon Wilboum t �� �9 self-employed P01079125 Use Only Firm's name ► Rock LLP Firm's N NI 47-0597598 SIN Firm's address ► 124 W. Capitol, Suite 20 tie Rock, AR 72201 Phone no. 501-975-3000 Form 8038-6 (Rev. 9-2011) ° e x In D rCo r9 N ■ Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. ■ Print your name and address on the reverse so that we can return the card to you. IN Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to �S 0�U1- A. Signature X ❑ Agent ❑ Addressee B. Receiv d by (P(iiited 1pdr jg, F'4.lpate oil Delivery r.. t.. D. Is deliv�g{ p dress different from Item 17 P,,�Y63 If YES,�en� deliY�j}'�dd�es blt� lT10 3. Se Ice Type ertified Mall' ❑ Priority Mall Express - 0 Registered ❑ Return Receipt for Merchandise ❑ Insured Mail ❑ Collect on Delivery 4. Restricted Delivery? (Extra Fee) ❑ Yes 2. Raikee Number c k I M ns rom service label) PS Form 3811, July 2013 Domestic Return Receipt M1 ru Postag f7J Cedifietl F M p Return Receipt F Postmark - (Endorsement Require Here C3 Restricted Defvery Fee (End., _.nt Required) E3 CrC-1:33 ru Vital Po$tage & ees dj N ■ Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. ■ Print your name and address on the reverse so that we can return the card to you. IN Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to �S 0�U1- A. Signature X ❑ Agent ❑ Addressee B. Receiv d by (P(iiited 1pdr jg, F'4.lpate oil Delivery r.. t.. D. Is deliv�g{ p dress different from Item 17 P,,�Y63 If YES,�en� deliY�j}'�dd�es blt� lT10 3. Se Ice Type ertified Mall' ❑ Priority Mall Express - 0 Registered ❑ Return Receipt for Merchandise ❑ Insured Mail ❑ Collect on Delivery 4. Restricted Delivery? (Extra Fee) ❑ Yes 2. Raikee Number c k I M ns rom service label) PS Form 3811, July 2013 Domestic Return Receipt EXECUTION COPY CITY OF FAYETTEVILLE, ARKANSAS, Issuer to SIMMONS FIRST TRUST COMPANY, N.A., Trustee TRUST INDENTURE Dated as of November 1, 2014 Providing for: $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 Prepared by: Kutak Rock LLP 124 West Capitol Avenue, Suite 2000 Little Rock, Arkansas 72201 4836-3891-9709.4 TABLE OF CONTENTS Page (This Table of Contents is not part of the Trust Indenture and is only for convenience of reference.) ARTICLE 11 THE BONDS Section 201. Security for Bonds................................................................................................. 12 Section 202. Authorized Amount............................................................................................... 13 Section 203. Details of Bonds..................................................................................................... 13 Section 204. Form of Bonds....................................................................................................... 14 Section205. Payment................................................................................................................. 14 Section206. Execution............................................................................................................... 14 Section 207. Authentication........................................................................................................ 15 Section 208. Delivery of Bonds.................................................................................................. 15 Section 209. Mutilated, Destroyed or Lost Bonds...................................................................... 16 Section 210. Registration and Transfer of Bonds....................................................................... 17 Section211. Cancellation........................................................................................................... 18 Section 212. Additional Bonds................................................................................................... 18 Section 213. Superior Obligations Prohibited............................................................................ 19 Section 214. Temporary Bonds................................................................................................... 19 Section 215. Book -Entry Bonds; Securities Depository............................................................. 19 ARTICLE III REDEMPTION OF BONDS BEFORE MATURITY Section 301. Redemption of Bonds............................................................................................ 20 Section302. Notice..................................................................................................................... 22 Section 303. Selection of Bonds to be Redeemed...................................................................... 22 Section 304. Surrender of Bonds Upon Redemption.................................................................. 22 Section 305. Redemption in Part................................................................................................ 23 1 4836-3891-9709.4 ARTICLE IV GENERAL COVENANTS AND REPRESENTATIONS Section 401. Payment of Principal, Premium and Interest......................................................... 23 Section 402. Performance of Covenants..................................................................................... 23 Section 403. Instruments of Further Assurance.......................................................................... 24 Section 404. Recordation and Filing........................................................................................... 24 Section 405. Inspection of Books............................................................................................... 24 Section 406. Tax Covenants....................................................................................................... 24 Section 407. Trustee's and Paying Agent's Fees and Expenses ................................................. 24 Section 408. Construction of Projects; Certification of Completion Date ................................. 24 Section 409. Encumbrances........................................................................................................ 25 Section 410. Continuing Disclosure........................................................................................... 25 Section 411. Authority of Commission...................................................................................... 25 Section 412. Security for the Bonds........................................................................................... 25 ARTICLE V REVENUES AND FUNDS Section 501. Creation of Funds and Accounts............................................................................ 26 Section 502. Projects Fund......................................................................................................... 26 Section503. Revenue Fund........................................................................................................ 27 Section504. Bond Fund.............................................................................................................. 28 Section 505. Cost of Issuance Fund............................................................................................ 29 Section 506. Redemption Fund................................................................................................... 29 Section507. Rebate Fund........................................................................................................... 30 Section 508. Debt Service Reserve Fund.................................................................................... 30 Section 509. Cessation of Fund Deposits................................................................................... 31 Section 510. Separate Accounts Authorized............................................................................... 31 ARTICLE VI INVESTMENTS Section 601. Investment of Moneys............................................................................................ 31 Section 602. Investment Earnings............................................................................................... 32 Section 603. Valuation of Funds................................................................................................. 32 Section 604. Responsibility of Trustee....................................................................................... 32 ARTICLE VII DISCHARGE OF LIEN Section 701. Discharge of Lien................................................................................................... 32 Section 702. Bonds Deemed Paid............................................................................................... 33 Section 703. Non -Presentment of Bonds.................................................................................... 33 ii 4836-3891-9709.4 ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS Section 801. Events of Default .................................................. Section 802. Acceleration.......................................................... Section 803. Other Remedies; Rights of Bondholders .............. Section 804. Right of Bondholders to Direct Proceedings ........ Section 805. Appointment of Receiver ...................................... Section 806. Waiver................................................................... Section 807. Application of Moneys ......................................... Section 808. Remedies Vested in Trustee ................................. Section 809. Rights and Remedies of Bondholders ................... Section 810. Termination of Proceedings .....................:............ Section 811. Waivers of Events of Default ................................ ARTICLE IX TRUSTEE AND PAYING AGENT Section 901. Acceptance of Trusts............................................................................................. 38 Section 902. Fees, Charges and Expenses of Trustee and Paying Agent ................................... 40 Section 903. Additional Duties of Trustee.................................................................................. 41 Section 904. Notice to Bondholders of Default.......................................................................... 41 Section 905. Intervention by Trustee.......................................................................................... 41 Section 906. Merger or Consolidation of Trustee....................................................................... 41 Section 907. Resignation by Trustee.......................................................................................... 42 Section 908. Removal of Trustee................................................................................................ 42 Section 909. Appointment of Successor Trustee........................................................................ 42 Section 910. Concerning Any Successor Trustee....................................................................... 42 Section 911. Reliance Upon Instruments.................................................................................... 43 Section 912. Appointment of Co-Trustee................................................................................... 43 Section 913. Designation and Succession of Paying Agent ........................................................ 44 ARTICLE X SUPPLEMENTAL INDENTURES Section 1001. Supplemental Indentures Not Requiring Consent of Bondholders ...................... 44 Section 1002. Supplemental Indentures Requiring Consent of Bondholders ............................. 45 Section 1003. Effect of Supplemental Indentures....................................................................... 45 ARTICLE XI MUNICIPAL BOND INSURANCE POLICY; DEBT SERVICE RESERVE INSURANCE POLICY Section 1101. Article XI Definitions.......................................................................................... 46 Section 1102. Notices and Other Information to be Given to BAM.......................................... 46 Section1103. Defeasance...........................................................................................................46 4836-3891-9709.4 Section 1104. Trustee and Paying Agent.................................................................................... 47 Section 1105. Amendments, Supplements and Consents........................................................... 47 Section 1106. BAM as Third Party Beneficiary......................................................................... 49 Section 1107. Payment Procedures Under Policy....................................................................... 49 Section 1108. Additional Payments............................................................................................ 51 Section 1109. Debt Service Reserve Fund and Projects Fund .................................................... 51 Section 1110. Exercise of Rights by BAM................................................................................. 52 ARTICLE XII MISCELLANEOUS Section 1201. Consents, etc. of Bondholders............................................................................. 52 Section1202. Notices.................................................................................................................52 Section 1203. Limitation of Rights............................................................................................. 53 Section1204. Severability..........................................................................................................53 Section 1205. Applicable Provisions of Law.............................................................................. 53 Section 1206. Counterparts......................................................................................................... 54 Section 1207. Successors and Assigns....................................................................................... 54 Section1208. Captions...............................................................................................................54 Section 1209. Photocopies and Reproductions........................................................................... 54 Section 1210. Bonds Owned by City.......................................................................................... 54 Signatures..................................................................................................................................... 55 Exhibit A Form of Series 2014 Bond................................................................................. A-1 Exhibit B Form of Coverage Certificate............................................................................. B-1 Exhibit C Form of Requisition........................................................................................... C-1 iv 4836-3891-9709.4 TRUSTINDENTURE THIS TRUST INDENTURE, made and entered into as of November 1, 2014, by and between the CITY OF FAYETTEVILLE, ARKANSAS, a city of the first class organized under and existing by virtue of the laws of the State of Arkansas (the "City"), as party of the first part, and SIMMONS FIRST TRUST COMPANY, N.A., a national banking association organized under and existing by virtue of the laws of the United States of America, and having its principal corporate trust office in Pine Bluff, Arkansas (the "Trustee"), as party of the second part; WITNESSETH: WHEREAS, the City is authorized under the provisions of the Advertising and Promotion Commission Act, Arkansas Code Annotated (2008 Repl. & 2013 Supp.) §§26-75-601 et seq. (as from time to time amended, the "Act"), to issue its bonds secured by and payable from the revenues derived by the City from the one percent (1%) tax (the "Tax") levied by the City pursuant to Ordinance No. 2310 adopted by the City on March 1, 1977, as subsequently amended, upon (i) the gross receipts or gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive- in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store - restaurants, caterers and similar businesses from the sale of prepared food and beverages for on -premises or off -premises consumption; and WHEREAS, pursuant to the provisions of Ordinance No. 4038, duly adopted by the City on June 3, 1997, there was submitted to the qualified electors of the City the question of the issuance of not to exceed $6,950,000 in principal amount of bonds pursuant to the Act, said bonds to be secured by a pledge of and lien upon the City's receipts of the Tax (the "Tax Receipts"); and WHEREAS, at a special election held August 5, 1997, a majority of the qualified electors of the City voting on the aforementioned question approved the issuance of the bonds and the corresponding pledge of the Tax Receipts to the payment thereof; and WHEREAS, pursuant to the Act and the results of the aforementioned election, the City issued its Hotel and Restaurant Gross Receipts Tax Bonds, Series 1998, dated November 1, 1998 (the "Series 1998 Bonds"), for the purpose of financing a portion of the costs of constructing the Fayetteville Town Center; and WHEREAS, in order to achieve debt service savings, the Series 1998 Bonds were refunded by the City's Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003, dated July 1, 2003 (the "Series 2003 Bonds"), originally issued in the aggregate principal amount of $6,335,000, of which $650,000 presently remains outstanding; and WHEREAS, the City's Advertising and Promotion Commission (the "Commission") by resolution adopted on May 13, 2013, recommended that the City assist in (i) the completion of a proposed Walton Arts Center expansion and renovation (the "Walton Arts Center Project") and 4836-3891-9709.4 (ii) the acquisition, construction and equipping of a regional park (the "Park Project") through the issuance of its capital improvement bonds secured by the Tax Receipts; and WHEREAS, pursuant to the provisions of Ordinance No. 5605, duly adopted by the City on August 6, 2013, there was submitted to the qualified electors of the City the questions of the issuance pursuant to the Act of (i) not to exceed $1,500,000 in principal amount of bonds for the purpose of refunding the outstanding Series 2003 Bonds, (ii) not to exceed $6,900,000 in principal amount of bonds for the purpose of financing a portion of the Walton Arts Center Project, and (iii) not to exceed $3,500,000 in principal amount of bonds for the purpose of financing a portion of the Park Project, said bonds to be secured by a pledge of and lien upon the Tax Receipts; and WHEREAS, at a special election held November 12, 2013, a majority of the qualified electors of the City voting on the aforementioned questions approved the issuance of the bonds for each of the aforementioned purposes and the corresponding pledge of the Tax Receipts to the payment thereof, and WHEREAS, pursuant to the Act and the provisions of Ordinance No. 5713 adopted by the City Council of the City on September 16, 2014 (the "Authorizing Ordinance"), the City has now determined to issue its Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Series 2014 Bonds"), in the aggregate principal amount of $10,980,000 for the purpose of refunding the Series 2003 Bonds and financing the Walton Arts Center Project and the Park Project; and WHEREAS, the payment of debt service on the Series 2014 Bonds will be secured by a pledge of the Tax Receipts; and WHEREAS, the Series 2014 Bonds and the Trustee's Certificate of Authentication to be endorsed thereon are to be in substantially the forms set forth in Exhibit A hereto, with necessary and appropriate variations, omissions and insertions as permitted or required by this Indenture; and WHEREAS, the execution and delivery of this Indenture and the issuance of the Series 2014 Bonds have been in all respects duly and validly authorized by the Authorizing Ordinance; and WHEREAS, all things necessary to make the Series 2014 Bonds, when authenticated by the Trustee and issued as in this Indenture provided, the valid, binding and legal obligations of the City according to the import thereof, and to constitute this Indenture a valid obligation of the City and a valid pledge of the Tax Receipts to the payment of the principal of and premium, if any, and interest on the Series 2014 Bonds, as specified in and in accordance with the provisions of the Act and the provisions hereof, have been done and performed, and the creation, execution and delivery of this Indenture and the creation, execution, issuance and delivery of the Series 2014 Bonds, subject to the terms hereof, have in all respects been duly authorized; 2 4836-3891-9709.4 NOW, THEREFORE, KNOW ALL PERSONS BY THESE PRESENTS, THIS INDENTURE WITNESSETH: That the City, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created, the issuance of the Policy (hereinafter defined) by BAM (hereinafter defined), and of the purchase and acceptance of the Series 2014 Bonds by the holders and owners thereof, and the sum of Ten Dollars ($10.00), lawful money of the United States of America, to it duly paid by the Trustee, at or before the execution and delivery of these presents, and for other good and valuable consideration, the receipt of which is hereby acknowledged, and in order to secure the payment of the principal of and premium, if any, and interest on the Series 2014 Bonds and all Additional Bonds (hereinafter defined), if any, according to their tenor and effect, to secure the reimbursement to BAM of all amounts reimbursable pursuant to the Policy, and to secure the performance and observance by the City of all the covenants expressed or implied herein and in the Series 2014 Bonds and Additional Bonds (collectively, the "Bonds"), subject to all of the provisions hereof, does hereby grant, bargain, sell, convey, mortgage, assign, transfer and pledge unto the Trustee, and unto its successor or successors in trust, and to them and their assigns forever, for the security of the performance of the obligations of the City hereinafter set forth, the following: The revenues derived by the City from the Tax levied by the City upon (i)the gross receipts or gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses from the sale of prepared food and beverages for on -premises or off -premises consumption (the "Tax Receipts"). The Tax has been levied by Ordinance No. 2310 adopted March 1, 1977, as amended, of the City pursuant to the authority of the Act, at the rate of one percent (1 %). 2. The Bond Fund, Debt Service Reserve Fund, Redemption Fund, Projects Fund and all other funds held by the Trustee pursuant to the Indenture except the Rebate Fund and Cost of Issuance Fund, and all moneys and investments in the pledged funds but subject to the provisions of this Indenture pertaining thereto, including the making of disbursements therefrom. 3. Any and all other moneys, rights and interests of every kind and nature which is from time to time hereafter conveyed, pledged, assigned or transferred by delivery or by writing or transfer of any kind, as and for additional security hereunder, by the City or by any other person, firm or corporation, to the Trustee, which is hereby authorized to receive any and all such property at any time and at all times and to hold and apply the same subject to the terms hereof. 3 4836-3891-9709.4 TO HAVE AND TO HOLD all the same (the "Trust Estate") with all privileges and appurtenances hereby conveyed and assigned, or agreed or intended so to be, to the Trustee and its successors in said trusts and to them and their assigns forever; IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit, security and protection of all owners of the said Bonds issued under and secured by this Indenture without privilege, priority or distinction as to lien or otherwise of any of said Bonds over any of the other Bonds; provided, however, that if the City, its successors or assigns, shall well and truly pay, or cause to be paid, the principal of, premium, if any, and interest due on the Bonds, at the times and in the manner provided in the Bonds according to the true intent and meaning thereof, and shall make the payments as required under this Indenture or shall provide, as permitted hereby, for the payment thereof by depositing with or causing to be deposited with the Trustee the entire amount due or to become due thereon, and shall well and truly keep, perform and observe all of the covenants and conditions pursuant to the terms of this Indenture to be kept, performed and observed by it, and shall pay to the Trustee all sums of money due or to become due to it in accordance with the terms and provisions hereof, and shall pay all amounts due to BAM by way of reimbursement or otherwise, then upon such final payments or deposits this Indenture and the lien and rights hereby granted shall cease, determine and be void; otherwise, this Indenture to be and remain in full force and effect. THIS INDENTURE FURTHER WITNESSETH that, and it is expressly declared that, all Bonds issued and secured hereunder are to be issued, authenticated and delivered and all said revenues and income hereby pledged are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the City has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the holders from time to time of the Bonds or any part thereof, as follows, that is to say: ARTICLE I DEFINITIONS Section 101. Definitions. In addition to the words and terms elsewhere defined in this Indenture, the following words and terms as used in this Indenture shall have the following meanings: "Account" means an Account established by Article V of this Indenture. "Act" means the Advertising and Promotion Commission Act, Arkansas Code Annotated (1997 Repl. & 2013 Supp.) §§ 26-75-601 et seq., as from time to time amended. "Additional Bonds" means Bonds in addition to the Series 2014 Bonds which are issued under the provisions of Section 212 of this Indenture. "Additional Facilities" means land, buildings, structures, machinery, furniture, fixtures, equipment and all related or necessary tangible property constituting improvements which are permitted to be financed under the provisions of the Act. 4 4636-3691-9709.4 "Annual Debt Service" means, with respect to all or any particular amount of Bonds, the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the amount of such payment which is provided from the proceeds of the sale of Bonds or from sources other than Tax Receipts. "Authorized Representative" means either the Mayor or the Finance Director of the City and such additional persons as from time to time may be designated to act on behalf of the City by a Certificate furnished to the Trustee containing the specimen signature thereof and executed on behalf of the City by its Mayor. "Authorizing Ordinance" means Ordinance No. 5713, adopted by the City on September 16, 2014, which authorized the issuance of the Series 2014 Bonds pursuant to this Indenture. "BAM" means Build America Mutual Assurance Company, a New York domiciled municipal insurance corporation. "Beneficial Owner" means any Person who acquires beneficial ownership interest in a Bond held by the Securities Depository. In determining the Beneficial Owner of any Bond, the Trustee may rely exclusively upon written representations made and information given to the Trustee by the Securities Depository or its Participants with respect to any Bond held by the Securities Depository in which a beneficial ownership interest is claimed. "Bond Counsel" means any firm of nationally recognized municipal bond counsel designated by the City and acceptable to the Trustee. "Bond Fund" means the fund by that name created and established in Section 501 of this Indenture. "Bonds" means the Series 2014 Bonds and all Additional Bonds, if any, authenticated and delivered under this Indenture. "Book -Entry System" means the book -entry system maintained by the Securities Depository and described in Section 215 of this Indenture. "Certificate" means a document signed by an Authorized Representative of the City attesting to or acknowledging the circumstances or other matters therein stated. "City" means the City of Fayetteville, Arkansas. "City Clerk" means the person holding the office and performing the duties of the City Clerk of the City. "Closing Date" means, with respect to any series of Bonds, the date upon which there is an exchange of such series of Bonds for the proceeds representing the purchase price for such series of Bonds by the Original Purchaser or Purchasers thereof. 5 4836-3891-9709.4 "Code" means the Internal Revenue Code of 1986, as from time to time amended, and applicable regulations issued or proposed thereunder. "Commission" means the Advertising and Promotion Commission of the City of Fayetteville, Arkansas, or any successor thereto. "Completion Date" means the date upon which a Project is first ready for normal continuous operation (or the date upon which all expenditures have been made with respect to the portion of a Project being financed with proceeds of Bonds) or the date upon which damaged Project facilities are replaced in normal and continuous operation. "Continuing Disclosure Agreement" means, collectively, each Continuing Disclosure Agreement between the City and the Trustee, dated the date of issuance and delivery of a series of Bonds, as originally executed and as amended from time to time in accordance with the terms thereof. "Cost of Issuance Fund" means the fund by that name created and established in Section 501 of this Indenture. "Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, including, but not limited to, underwriting discounts, fees and expenses, election expenses, publication expenses, expenses of printing, reproducing, filing and recording documents, initial fees and charges of the Trustee and Paying Agent, fees and expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement for the Bonds, costs of execution, transportation and safekeeping of the Bonds, and other costs, charges and fees incurred in connection with the foregoing. "Debt Service" means, with respect to all or any particular amount of Bonds for any Payment Period, the amount required to pay the sum of the interest on such Bonds payable during the Payment Period and the principal of, and any other amount required to effect any mandatory redemption of, such Bonds, if any, during the Payment Period. "Debt Service Reserve Fund" means the fund by that name created and established in Section 501 of this Indenture. "Event of Default" means any event of default specified in Section 801 hereof. "Fiscal Year" means the 12 -month period used, at any time, by the City for accounting purposes, which may be the calendar year. "Fund" means a fund confirmed or established by Article V of this Indenture. "Government Securities" means (i) direct obligations of the United States of America, (ii) obligations on which the full and timely payment of principal and interest is fully and unconditionally guaranteed by the United States of America (including any such securities issued or held in book -entry form on the books of the Department of Treasury of the United States of 6 4836-3891-9709.4 America), and (iii) evidences of direct ownership or proportionate or individual interest in future interest or principal payments on specified direct obligations of, or obligations on which the full and timely payment of principal and interest is fully and unconditionally guaranteed by, the United States of America, which obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian in form and substance satisfactory to the Trustee. "Holder" or "Bondholder" or "Owner of the Bonds" means the registered owner of any "Indenture" means this Trust Indenture dated as of November 1, 2014, between the City and the Trustee, together with all indentures supplemental hereto. "Interest Payment Date" means any date on which interest is payable on the Bonds. "Investment Obligations" means, if and to the extent the same are at the time legal for investment of funds held under this Indenture: (a) Cash deposits, certificates of deposits or money market deposits (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with Government Obligations); (b) Government Securities; (c) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America: U.S. Export -Import Bank (Eximbank); Rural Economic Community Development Administration; Federal Financing Bank; General Services Administration; U.S. Maritime Administration; U.S. Department of Housing and Urban Development (PHAs); Small Business Administration; Government National Mortgage Association (GNMA); Federal Housing Administration; and Farm Credit System Financial Assistance Corporation. (d) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: (i) Senior debt obligations rated in the highest long-term rating category by at least two nationally recognized rating agencies issued by the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC); and (ii) Senior debt obligations of the Federal Home Loan Bank System; (e) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which either (i) have a rating on their short- term certificates of deposit on the date of purchase in the highest short-term rating category of at least two nationally recognized rating agencies, (ii) are insured at all times 7 4836-3891-9709.4 by the Federal Deposit Insurance Corporation, or (iii) are collateralized with direct obligations of the United States of America at 102% valued daily. All such certificates must mature no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (f) Commercial paper which is rated at the time of purchase in the highest short-term rating category of at least two nationally recognized rating agencies and which matures no more than 270 days after the date of purchase; (g) Investments in (i) money market funds subject to SEC Rule 2a-7 and rated in the highest short-term rating category of at least one of S&P and Moody's and (ii) public sector investment pools operated pursuant to SEC Rule 2a-7 in which the City's deposit shall not exceed 5% of the aggregate pool balance at any time and such pool is rated in one of the two highest short -tern rating categories of at least one of S&P and Moody's; (h) Pre -refunded municipal obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (i) Which are rated, based on an irrevocable escrow account or fund (the "Escrow"), in the highest long-term rating category of at least two nationally recognized rating agencies; or (ii) (1) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or direct obligations of the United States of America, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (II) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; (i) General obligations of states with a short-term rating in one of the two highest rating categories and a long-term rating in one of the two highest rating categories of at least two nationally recognized rating agencies. In the event such obligations are variable rate obligations, the interest rate on such obligations must be reset not less frequently than annually; and 8 4836-3691-9709.4 0) Any cash sweep account maintained by the Trustee and consisting of investments described in clauses (a) through (i). "Mayor" means the person holding the office and performing the duties of the Mayor of the City. "Moody's means Moody's Investors Service. "Original Purchaser" means the first purchaser(s) of a series of Bonds from the City. "Outstanding" means, as of any date of computation, Bonds theretofore or thereupon being delivered under this Indenture, except: (a) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or prior to such date for cancellation; (b) Bonds deemed to be paid in accordance with Article VII of this Indenture; and (c) Bonds in lieu of or in exchange or substitution for which other Bonds shall have been authenticated and delivered pursuant to this Indenture; provided, however, that in the event that the principal and/or interest due on the Series 2014 Bonds shall be paid by BAM pursuant to the Policy, said Series 2014 Bonds shall be deemed to remain Outstanding for all purposes. "Park Project" means the acquisition, construction and equipping of a regional park, financed in part with the proceeds of the Series 2014 Bonds. "Participants" means those financial institutions for whom the Securities Depository effects book -entry transfers and pledges of securities deposited with the Securities Depository in the Book -Entry System, as such listing of Participants exists at the time of such reference. "Payment Period" means a period from, but not including, a Principal Payment Date up to, and including, the next succeeding Principal Payment Date. "Person" means any natural person, firm, association, corporation, limited liability company, partnership, joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Policy" means the municipal bond insurance policy issued by BAM insuring the payment when due of the principal and interest on the Series 2014 Bonds as provided therein. "Principal Payment Date" means any date on which principal is payable on the Bonds, whether at maturity, by operation of the mandatory sinking fund, or otherwise. "Projects" means the Walton Arts Center Project, the Park Project and any Additional Facilities that may be acquired, constructed or equipped in the future with the proceeds of Bonds issued hereunder. 9 4836-3891-9709.4 "Project Costs" means, to the extent permitted by the Act or other applicable laws, with respect to a Project, all costs of planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation, including obtaining governmental approvals, certificates, permits and licenses with respect thereto, heretofore or hereafter paid or incurred by or on behalf of the City and which shall include, but shall not be limited to: (a) interest accruing in whole or in part on the Bonds prior to and during construction of a Project, including all amounts required by this Indenture to be paid from the proceeds of the Bonds into the Bond Fund; (b) preliminary investigation and development costs, engineering fees, contractors' fees, labor costs, the cost of materials, equipment, utility services and supplies, costs of obtaining permits, licenses and approvals, costs of real property, insurance premiums, legal and financing fees and costs, administrative and general costs, and all other costs properly allocable to the acquisition, construction and equipping of a Project and placing the same in operation; (c) all costs relating to injury and damage claims arising out of the acquisition, construction or equipping of a Project; (d) all other costs incurred in connection with, and properly allocable to, the acquisition, construction and equipping of a Project; and (e) amounts to pay or reimburse the City or any City fund for expenses of the City incident and properly allocable to such planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation of a Project. "Projects Fund" means the fund by that name created and established in Section 501 of this Indenture. "Qualified Engineer" means a consulting engineer or firm of consulting engineers, whether or not in the regular employ of the City. "Rebate Fund" means the fund by that name created and established in Section 501 of this Indenture. "Record Date" means the close of business on the 15th day of the calendar month next preceding each Interest Payment Date on the Bonds or, if such day shall not be a business day, the immediately preceding business day. "Redemption Fund" means the fund by that name created and established in Section 501 of this Indenture. 10 4836-3891-9709.4 "Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized Representative and including, without limitation, the specific information required in Section 502 hereof. "Reserve Policy" means the debt service reserve insurance policy issued by BAM guaranteeing certain payments into the Debt Service Reserve Fund with respect to the Series 2014 Bonds as provided therein and subject to the limitations set forth therein. "Reserve Requirement" means, at any particular time, an amount equal to the least of (a) 10% of the face amount of each series of Outstanding Bonds, (b) the maximum Annual Debt Service on each series of Outstanding Bonds, or (c) 1.25 times the average Annual Debt Service on each series of Outstanding Bonds. For all purposes of this Indenture, the Reserve Requirement may be satisfied by cash or by the Reserve Policy. "Revenue Fund" means the fund by that name confirmed and continued in Section 501 of this Indenture. "S&P" means Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc. "Securities Depository" means The Depository Trust Company, a limited -purpose trust company organized under the laws of the State of New York, or its nominee, and it successors and assigns, or any other depository institution appointed by the City to act as depository for the Bonds in connection with the Book -Entry -Only System. "Series 2003 Bonds" means the $6,335,000 City of Fayetteville, Arkansas Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003, dated July 1, 2003, of which $650,000 in principal amount presently remains Outstanding. The Series 2003 Bonds are being refunded with a portion of the proceeds of the Series 2014 Bonds. "Series 2014 Bonds" means the $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014, dated November 1, 2014, issued under and secured by this Indenture. "State" means the State of Arkansas. "Supplemental Indenture" means any indenture supplemental to or amendatory of this Indenture, adopted by the City in accordance with Article X hereof. "Tax" means the one percent (I%) tax levied by the City pursuant to Ordinance No. 2310 adopted by the City on March 1, 1977, as subsequently amended, upon (i) the gross receipts or gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses from the sale of prepared food and beverages for on -premises or off -premises consumption. 4836-3891-9709.4 "Tax Receipts" means receipts derived by the City from the levy of the Tax. "Tax Regulatory Agreement" means with respect to any series of Bonds issued under this Indenture, that Tax Regulatory Agreement of the City relating to maintenance of the excludability of interest on such Bonds from gross income for federal income tax purposes, delivered in connection with the issuance of such series of Bonds. "Trustee" and Paying Agent' means the trustee and paying agent for the time being, whether original or successor, with the same institution to always occupy both positions, and with the original Trustee and Paying Agent being Simmons First Trust Company, N.A., Pine Bluff, Arkansas. "Trust Estate" means the property described in the granting clauses of this Indenture. "Walton Arts Center Project" means the expansion and renovation of the Walton Arts Center, financed in part with the proceeds of the Series 2014 Bonds. Section 102. Use of Words. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, the words "Bond," "owner," "holder," and "person" shall include the plural, as well as the singular number. ARTICLE II THE BONDS Section 201. Security for Bonds. (a) The Bonds are special and limited obligations of the City payable as to principal, premium, if any, and interest solely out of the Trust Estate. The Trust Estate is hereby pledged, appropriated and assigned to the payment of the principal of, premium, if any, and interest on the Bonds, all in accordance with their terms and the provisions of this Indenture. The Bonds do not constitute an indebtedness for which the faith and credit of the State of Arkansas or the City is pledged within the meaning of any Constitutional or statutory limitation. The Bonds shall never constitute an obligation of or a charge against the general credit or general taxing powers of the City. (b) The pledge, charge, lien, trusts and assignments made herein with respect to the Trust Estate shall be valid and binding, and shall be deemed continuously perfected from the time of issuance of the Series 2014 Bonds, and the Trust Estate shall thereupon be immediately subject to the pledge, charge, lien, trust and assignment created hereby upon receipt thereof by or for the City or by the Trustee and Paying Agent hereunder, without any physical delivery, segregation thereof or further act, and such pledge, charge, lien, trust and assignment shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the City, irrespective of whether such parties have notice thereof. (c) The Bonds shall be equally and ratably payable and secured hereunder without priority by reason of date of adoption of this Indenture or any Supplemental Indenture authorizing their issuance or by reason of their series, number, date, date of issue, execution, authentication or sale, or otherwise. 12 4836-3891-9709.4 (d) So long as any Bonds are Outstanding under the provisions of this Indenture, all Tax Receipts shall be deemed to be necessary to accomplish the purposes of the City and shall be subject to the covenants and agreements set forth in this Indenture, and no such Tax Receipts shall ever be used or deposited otherwise except as herein expressly permitted. (e) The City covenants, as permitted by the Act, that while any of the Bonds are Outstanding, the levy and collection of the Tax shall not be reduced or discontinued, and the City will use due diligence in causing the collection of the Tax. Nothing herein shall prohibit the City from increasing the rate of the Tax from time to time, to the extent permitted by law, and no part of the revenues or receipts derived by the City from any such increase shall be deemed part of the Tax Receipts unless authorized and pledged by a Supplemental Indenture. Section 202. Authorized Amount. There is hereby authorized the issuance of bonds of the City to be designated "Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014" in the principal amount of Ten Million Nine Hundred Eighty Thousand Dollars ($10,980,000) (the "Series 2014 Bonds"). No Bonds may be issued under the provisions of this Indenture except in accordance with this Article II. The total principal amount of Bonds that may be issued hereunder is limited to the extent described in Section 212 hereof, except as provided in Section 209 and except for refunding bonds issued under the provisions of Section 212. Section 203. Details of Bonds. (a) The Series 2014 Bonds (i) shall be designated "City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014," (ii) shall be in the aggregate principal amount of $10,980,000, (iii) shall be dated as of November 1, 2014, (iv) shall bear interest from such date at the rates hereinafter provided until paid, payable semiannually on May 1 and November 1 of each year, commencing May 1, 2015, (v) shall be issued in denominations of $5,000 each, or any integral multiple thereof, (vi) shall be numbered from R14- 1 upwards in order of issuance according to the records of the Trustee, and (vii) shall mature, unless sooner redeemed in the manner in this Indenture set forth, on November 1 in each of the years and in the amounts set forth in the following table, which table also sets forth the interest rates for the Series 2014 Bonds: 13 4836-3891-9709.4 Year (November 1) Principal Amount Interest Rate 2015 $ 295,000 2.000% 2016 300,000 2.000% 2017 310,000 2.000% 2018 315,000 2.000% 2019 320,000 2.500% 2020 330,000 2.750% 2021 335,000 3.000% 2022 345,000 3.000% 2023 355,000 3.000% 2024 370,000 3.000% 2025 380,000 3.000% 2029 1,655,000 4.000% 2034 2,525,000 5.000% 2039 3,145,000 3.750% Section 204. Form of Bonds. (a) The Series 2014 Bonds shall be initially issued as fully registered Bonds, without coupons, in the form of fourteen typewritten bond certificates (one for each maturity) to be delivered to the Securities Depository. Each such certificate shall be initially registered in the name of the nominee of the Securities Depository, and no Beneficial Owner will receive a certificate representing his interest in the Series 2014 Bonds, except upon the occurrence of the events described in Section 215 hereof. Beneficial Owners shall be deemed to have waived any right to receive a bond certificate except under the circumstances described in Section 215. The Series 2014 Bonds and the Trustee's certificate of authentication to be endorsed thereon shall be in substantially the form set forth in Exhibit A hereto, with appropriate variations, insertions and omissions as permitted or required by this Indenture. Section 205. Payment. The Bonds shall be payable, with respect to principal, premium, if any, and interest in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. The principal of and premium, if any, on the Bonds shall be payable upon surrender thereof at the principal corporate trust office of the Trustee. Payment of interest on each Bond shall be made by check or draft mailed to the registered owner of such Bond as of the applicable Record Date at his address as it appears on the registration books maintained by the Trustee. For purposes of this Indenture, interest on the Bonds shall be deemed to accrue on the basis of a 360 -day year of twelve 30 -day months. So long as the Securities Depository or its nominee is the sole registered owner of the Bonds, payment of interest thereon shall be made by wire transfer of immediately available funds by the Paying Agent to the Securities Depository or its nominee. Section 206. Execution. The Bonds shall be executed on behalf of the City by the manual or facsimile signatures of its Mayor and City Clerk and shall have impressed or imprinted thereon the seal of the City. A facsimile signature shall have the same force and effect as if manually signed. In case any officer whose manual signature or a facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of such Bonds, such 14 4836-3891-9709.4 signature or such facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such official had remained in office until delivery. Section 207. Authentication. Only such Bonds as shall have endorsed thereon a certificate of authentication substantially in the form set forth in Exhibit A attached hereto duly executed by the Trustee shall be entitled to any right or benefit under this Indenture. No Bond shall be valid and obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Trustee, and such certificate of the Trustee upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Indenture. The Trustee's certificate of authentication on any Bond shall be deemed to have been executed if signed by an authorized officer of the Trustee, but it shall not be necessary that the same officer sign the certificate of authentication on all of the Bonds issued hereunder. Section 208. Delivery of Bonds. The City shall execute and deliver to the Trustee and the Trustee shall authenticate the Bonds of any series and deliver said Bonds to the Securities Depository as may be directed in this Section 208, in Section 212 hereof or in any Supplemental Indenture. (a) Prior to the delivery or original issuance by the Trustee of any authenticated Bonds of any series, there shall be delivered to the Trustee: (1) An original executed counterpart of this Indenture or, in the case of Additional Bonds, a Supplemental Indenture by and between the City and the Trustee setting forth the details concerning such Additional Bonds; (2) Original executed counterparts of the Continuing Disclosure Agreement and the Tax Regulatory Agreement applicable to such series of Bonds; (3) A Certificate directing the Trustee to authenticate the Bonds and containing instructions as to the delivery of the Bonds upon payment to the Trustee, for the account of the City, of a sum specified in such Certificate; (4) A copy, duly certified by the City Clerk, of the proceedings of the City authorizing the issuance of the Bonds; (5) A written opinion of Bond Counsel approving the legality of the Bonds; (6) In the case of any series of Additional Bonds, a Certificate signed by the Mayor certifying that (i) the City is not then in default in the performance of any of the covenants, conditions, agreements or provisions contained in this Indenture, and (ii) the City is current as to all required deposits at that time in all the Funds and Accounts described in Article V of this Indenture or hereafter created by Supplemental Indentures, or if the City is in default or is not so current, certifying in the case of (i) or (ii) as to that fact and that, upon the application of the proceeds of the sale of such Additional Bonds as provided in the Supplemental Indenture authorizing the issuance thereof, the City will not be in default or will be current thereafter; 15 4836-3891-9709.4 (7) In the case of any series of Additional Bonds, a written opinion of Bond Counsel to the effect that the exemption from federal income tax of the interest on the Series 2014 Bonds and any Additional Bonds theretofore issued will not be adversely affected by the issuance of the Additional Bonds then being issued; (8) A resolution of the Commission approving the issuance of the Additional Bonds; and (9) Such further documents and certificates as may be required by the Original Purchaser of such series of Bonds. (b) Simultaneously with the delivery of the Series 2014 Bonds, the Trustee shall apply the proceeds thereof as follows: (1) The amount, if any, received as accrued interest on the Series 2014 Bonds shall be deposited in the Bond Fund; (2) $11,607.96 shall be transferred to BAM in order to pay the premium for the Reserve Policy; (3) $16,122.59 shall be transferred to BAM in payment of the premium on the Policy; (4) An amount equal to $82,500.00 shall be deposited in the Costs of Issuance Fund for payment of Costs of Issuance as directed by a Certificate of the City; (5) An amount sufficient, together with moneys held by BOKF, NA, as trustee for the Series 2003 Bonds, in funds and accounts created by the trust indenture securing the payment of the Series 2003 Bonds, to refund the Series 2003 Bonds shall be deposited in trust with BOKF, NA, as escrow trustee (the "2003 Escrow Trustee"), in accordance with the provisions of an Escrow Deposit Agreement to be dated as of the date of delivery of the Series 2014 Bonds (the "2003 Escrow Agreement'), by and between the City and the 2003 Escrow Trustee. The 2003 Escrow Agreement shall provide for the investment of the funds, to the extent feasible, in Government Securities which will mature and bear interest at such times and in such amounts as will, together with any uninvested moneys held by the 2003 Escrow Trustee, provide sufficient moneys to pay as due at maturity and upon redemption prior to maturity on December 22, 2014, all principal of and premium, if any, and interest on the Series 2003 Bonds. The 2003 Escrow Agreement will provide for giving notice of redemption prior to maturity of the Series 2003 Bonds, for the payment of required trustee and paying agent fees on the Series 2003 Bonds, and for release of all claims of the Series 2003 Bonds on the Trust Estate; (6) The balance of said proceeds ($10,823,659.99) shall be deposited in the Projects Fund ($3,642,655.90 into the Park Account and $7,181,004.09 into the Walton Arts Center Account for payment of Project Costs pursuant to the written direction of the City as provided in Section 502. Section 209. Mutilated, Destroyed or Lost Bonds. In case any Bond issued hereunder shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be executed and the Trustee may authenticate and deliver a new Bond of like series, date, 16 4836-3891-9709.4 number, maturity and tenor in exchange and substitution for and upon cancellation of such mutilated Bond, or in lieu of and in substitution for such Bond destroyed or lost, upon the Bondholder's paying the reasonable expenses and charges of the City and the Trustee in connection therewith, and, in the case of a Bond destroyed or lost, filing by the Bondholder with the Trustee evidence satisfactory to the Trustee that such Bonds were destroyed or lost, and of the Bondholder's ownership thereof, and furnishing the City and Trustee with indemnity satisfactory to them. The Trustee is hereby authorized to authenticate any such new Bond. In the event any such Bonds shall have matured, instead of issuing a new Bond, the City may pay the same without the surrender thereof. Upon the issuance of a new Bond under this Section 209, the City may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Section 210. Registration and Transfer of Bonds. The City hereby constitutes and appoints the Trustee as Bond Registrar of the City, and as Bond Registrar the Trustee shall keep books for the registration and for the transfer of the Bonds as provided in this Indenture at the principal corporate trust office of the Trustee. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and payment of or on account of the principal of and interest on any such Bond shall be made only to or upon the order of the registered owner thereof, or the owner's legal representative, and neither the City, the Trustee nor the Bond Registrar shall be affected by any notice to the contrary, but such registration may be changed as herein provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. Bonds may be transferred on the books of registration kept by the Trustee by the registered owner in person or by the owner's duly authorized attorney, upon surrender thereof, together with a written instrument of transfer duly executed by the registered owner or the owner's duly authorized attorney. Upon surrender for transfer of any Bond at the principal corporate office of the Trustee, the City shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds of the same series and in the same aggregate principal amount and of any authorized denomination or denominations. Bonds may be exchanged at the principal corporate trust office of the Trustee for an equal aggregate principal amount of Bonds of any other authorized denomination or denominations of the same series with corresponding maturities. The City shall execute and the Trustee shall authenticate and deliver Bonds which the Bondholder making the exchange is entitled to receive, bearing numbers not contemporaneously then Outstanding. The execution by the City of any Bond of any denomination shall constitute full and due authorization of such denomination and the Trustee shall thereby be authorized to authenticate and deliver such Bond. Such transfers of registration or exchanges of Bonds shall be without charge to the Owners of such Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Owner of the Bond requesting such transfer or exchange as a condition precedent to the exercise of such privilege. 17 4836-3891-9709.4 The Trustee shall not be required to transfer or exchange any Bond during the period from and including a Record Date to the next succeeding Interest Payment Date of such Bond nor to transfer or exchange any Bond after the mailing of notice calling such Bond for redemption has been made, and prior to such redemption. If the Securities Depository or its nominee is the sole registered owner of the Bonds, transfers of ownership and exchanges shall be effected on the records of the Securities Depository and its Participants pursuant to rules and procedures established by the Securities Depository and its Participants. In such case, the Trustee shall deal with the Securities Depository as representative of the Beneficial Owners of the Bonds for purposes of exercising the rights of Bondholders hereunder, and the rights of the Beneficial Owners of such Bonds held by the Securities Depository or its nominee shall be limited to those established by law and agreements between such Beneficial Owners and the Securities Depository and its Participants. Requests, consents and directions from, and votes of, the Securities Depository or its nominee as representative shall not be deemed inconsistent if they are made with respect to different Participants or Beneficial Owners. Section 211. Cancellation. All Bonds surrendered for payment, redemption, transfer or exchange, if surrendered to the Trustee, shall be promptly cancelled by it, and, if surrendered to any person other than the Trustee, shall be delivered to the Trustee and, if not already cancelled, shall be promptly cancelled by it. The City may at any time deliver to the Trustee for cancellation any Bonds previously authenticated and delivered hereunder, which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Trustee. All cancelled Bonds held by the Trustee shall be disposed of as directed by the City. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the City of any Bonds, the Trustee may, upon the written request of the City, in lieu of such cancellation and delivery, destroy such Bonds in the presence of any officer of the City (but only if the City shall so require), and deliver a certificate of such destruction to the City. Section 212. Additional Bonds. The City may issue from time to time one or more series of Additional Bonds for the purpose of (i) financing Project Costs in connection with the acquisition, construction and/or equipping of a Project, (ii) refunding the Series 2014 Bonds or any series of Additional Bonds, in whole or in part, or (iii) any combination thereof. Additional Bonds shall be secured equally and ratably with the Series 2014 Bonds and any other series of Additional Bonds theretofore issued and then Outstanding, except insofar as any terms or conditions of redemption or purchase established under this Indenture may afford additional benefit or security for the Bonds of any particular series and except for the security afforded by any municipal bond insurance obtained with respect to a particular series of Bonds. Before any Additional Bonds are authenticated, there shall be delivered to the Trustee the items required for the issuance of Bonds by Section 208 hereof, plus a Certificate of the Finance Director of the City (in the form attached as Exhibit B hereto) certifying that, based upon necessary investigation, the Tax Receipts deposited into the Revenue Fund during the most recent twelve (12) months were not less than (i) 140% of the maximum Annual Debt Service requirement on all then Outstanding Bonds, plus the Additional Bonds then proposed to be issued, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. IM 4836-3891-9709.4 Notwithstanding anything herein to the contrary, no Additional Bonds shall be issued unless there is no default at the time of issuance under this Indenture. Section 213. Superior Obligations Prohibited. Except to the extent permitted in Section 212 hereof for the issuance of Additional Bonds, from and after the issuance of any of the Bonds and for so long as any of the Bonds are Outstanding, the City shall not create or permit the creation of any indebtedness, or issue any bonds, notes, warrants, certificates or other obligations or evidences of indebtedness payable in any manner from the Tax Receipts or otherwise from the Trust Estate which (i) will in any way be superior to or rank on a parity with the Bonds, or (ii) will in any way be secured by a lien and charge on the Tax Receipts or on the moneys deposited in or to be deposited in the Revenue Fund, prior to or equal with the lien, pledge and charge created herein for the security of the Bonds, or (iii) will be payable prior to or equal with the payments to be made from the Tax Receipts or the Revenue Fund into the Bond Fund or Debt Service Reserve Fund, or from said Bond Fund or Debt Service Reserve Fund for the payment of the Bonds. Nothing in Section 213 shall be construed as prohibiting or restricting the issuance of bonds payable from Tax Receipts so long as use of the Tax Receipts in favor of bonds issued pursuant to this Section 213 shall be made expressly subject and subordinate to the pledge and use of Tax Receipts to pay principal of and premium, if any, and interest on the Bonds and to make all required deposits into all funds held by the Trustee pursuant to the Indenture. Section 214. Temporary Bonds. Until Bonds in definitive form are ready for delivery, the City may execute, and upon the request of the City, the Trustee shall authenticate and deliver, subject to the provisions, limitations and conditions set forth herein, one or more Bonds in temporary form, whether printed, typewritten, lithographed or otherwise produced, substantially in the form of the definitive Bonds, with appropriate omissions, variations and insertions, and in authorized denominations. Until exchanged for Bonds in definitive form, such Bond in temporary form shall be entitled to the lien and benefit of this Indenture. Upon the presentation and surrender of any Bond or Bonds in temporary form, the City shall, without unreasonable delay, prepare, execute and deliver to the Trustee and the Trustee shall authenticate and deliver, in exchange therefor, a Bond or Bonds in definitive form. Such exchange shall be made by the Trustee without making any charge therefor to the Owner of such Bond in temporary form. Section 215. Book -Entry Bonds; Securities Depository. The Bonds shall initially be registered to Cede & Co., the nominee for The Depository Trust Company, New York, New York (the "Securities Depository'), and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Trustee issues replacement bonds as provided in this Section 215. It is anticipated that during the term of the Bonds, the Securities Depository will make book -entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Trustee authenticates and delivers replacement bonds to the Beneficial Owners as described in the following paragraph. If the City or the Trustee determines (A) that the Securities Depository is unable to properly discharge its responsibilities, or (B) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange 19 4836-3891-9709.4 Act of 1934, as amended, or (C) that the continuation of a Book -Entry System to the exclusion of any Bonds being issued to any Bondholder other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, or (2) if the Trustee receives written notice from Participants representing interests in not less than 50% of the Bonds Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the Securities Depository), that the continuation of a Book -Entry System to the exclusion of any Bonds being issued to any Bondholder other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, then the Trustee shall notify the Bondholders of such determination or such notice and of the availability of certificates to Bondholders requesting the same, and the Trustee shall register in the name of and authenticate and deliver replacement bonds to the Beneficial Owners or their nominees in principal amounts representing the interest of each; provided, that in the case of a determination under (A) or (B) of this paragraph, the City or the Trustee may select a successor securities depository in accordance with the following paragraph to effect book -entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of replacement bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Trustee, to the extent applicable with respect to such replacement bonds. If the Securities Depository resigns and the City, the Trustee or Bondholders are unable to locate a qualified successor of the Securities Depository in accordance with the following paragraph, then the Trustee shall authenticate and cause delivery of replacement bonds to Bondholders, as provided herein. The Trustee may rely conclusively on information from the Securities Depository and its Participants as to the names and addresses of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of replacement bonds shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Trustee receives written evidence satisfactory to the Trustee with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Trustee upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of Bonds to the successor Securities Depository in appropriate denominations and form as provided herein. ARTICLE III REDEMPTION OF BONDS BEFORE MATURITY Section 301. Redemption of Bonds. The Bonds shall be subject to redemption prior to maturity as follows: (a) The Series 2014 Bonds are subject to redemption at the election of the City, on and after November 1, 2024, in whole or in part (in any order of maturities directed by the City, 20 4836-3891-9709.4 and by lot within a maturity) at any time, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. (b) The applicable series of Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from Projects Fund moneys in excess of the amount needed to complete the applicable Project or portion thereof being financed with the proceeds of such series of Bonds, which moneys shall be transferred to the Redemption Fund pursuant to Section 502 hereof. (c) The Series 2014 Bonds maturing on November 1, 2029, are subject to mandatory sinking fund redemption prior to maturity in part, on November 1 in the years and amounts set forth below at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption, without premium Year Principal Amount 2026 $390,000 2027 $405,000 2028 $420,000 2029 (maturity) $440,000 (d) The Series 2014 Bonds maturing on November 1, 2034, are subject to mandatory sinking fund redemption prior to maturity in part, on November 1 in the years and amounts set forth below at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption, without premium: Year Principal Amount 2030 $455,000 2031 $480,000 2032 $505,000 2033 $530,000 2034 (maturity) $555,000 (e) The Series 2014 Bonds maturing on November 1, 2039, are subject to mandatory sinking fund redemption prior to maturity in part, on November 1 in the years and amounts set forth below at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption, without premium: Year 2035 2036 2037 2038 2039 (maturity) 21 4836-3891-9709.4 Principal Amount $585,000 $605,000 $630,000 $650,000 $675,000 (f) Additional Bonds may also be made subject to optional, extraordinary and mandatory sinking fund redemption, in whole or in part, in such manner, at such times and at such prices as may be provided in the Supplemental Indenture providing for their issuance. At its option, to be exercised on or before the 45`" day next preceding any mandatory sinking fund redemption date for any Series 2014 Bonds, the City may deliver to the Trustee for cancellation Series 2014 Bonds of the appropriate maturity, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2014 Bond, or portion thereof, so delivered or previously redeemed (otherwise than through mandatory sinking fund redemption) and canceled by the Trustee shall be credited by the Trustee at 100% of the principal amount thereof on the obligation of the City on such mandatory sinking fund redemption date, and any excess over such amount shall be credited on future mandatory sinking fund redemption obligations of that maturity in chronological order, and the principal amount of such Series 2014 Bonds so to be redeemed shall be accordingly reduced. Section 302. Notice. Notice of the call for any redemption (other than mandatory sinking fund redemption), identifying the Bonds or portions thereof being called and the date on which they shall be presented for payment, shall be mailed by the Trustee by first class mail (or, so long as the Securities Depository or its nominee is the sole registered owner of the Bonds, by any other means acceptable to the Securities Depository, including facsimile) to the registered owner of each such Bond addressed to such registered owner at his registered address and placed in the mails not less than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption; provided, however, that failure to give such notice by mailing, or any defect therein, shall not affect the validity of any proceeding for the redemption of any Bond with respect to which no such failure or defect has occurred. Any notice mailed as provided in this Section 302 shall be conclusively presumed to have been duly given, whether or not the registered owner receives the notice. Section 303. Selection of Bonds to be Redeemed. If less than all of the Bonds of like series, maturity, interest rate and otherwise identical payment terms shall be called for redemption, the particular Bonds or portions of Bonds to be redeemed shall be selected by lot by the Trustee in such manner as the Trustee in its discretion may deem fair and appropriate; provided, however, that the portion of any Bond of a denomination of larger than the minimum denomination may be redeemed in the principal amount of such minimum denomination or a multiple thereof, and that for purposes of selection and redemption, any such Bond of a denomination larger than the minimum denomination shall be considered to be that number of separate Bonds of such minimum denomination which is obtained by dividing the principal amount of such Bond by such minimum denomination. So long as the Securities Depository or its nominee is the sole registered owner of a series of Bonds, the procedures established by the Securities Depository shall control with respect to the selection of the particular Bonds of such series to be redeemed. Section 304. Surrender of Bonds Upon Redemption. Notice having been given in the manner and under the conditions hereinabove provided, and moneys for payment of the redemption price being held by the Trustee as provided in this Indenture (i) the Bonds or portions of Bonds so called for redemption shall, on the date fixed for redemption designated in such 22 4836-3891-9709.4 notice, become due and payable at the redemption price provided for redemption of such Bonds, and interest on such Bonds or portions of Bonds so called for redemption shall cease to accrue, (ii) upon surrender of the Bonds or portions of Bonds so called for redemption in accordance with such notice, such Bonds or portions of Bonds shall be paid at the applicable redemption price, (iii) such Bonds or portions of Bonds shall cease to be entitled to any lien, benefit or security under this Indenture, and (iv) the owners of said Bonds or portions of Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. Section 305. Redemption in Part. Any Bond which is to be redeemed only in part shall be surrendered to the Trustee (with, if the City or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the City and the Trustee duly executed by, the owner thereof or his attorney duly authorized in writing), and the appropriate officials of the City shall execute and the Trustee shall authenticate and deliver to the owner of such Bond, without service charge, a new Bond or Bonds of the same series, of any authorized denomination or denominations, having the same maturity and interest rate as requested by such owner, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. ARTICLE IV GENERAL COVENANTS AND REPRESENTATIONS Section 401. Payment of Principal, Premium and Interest. The City covenants that it will promptly pay or cause to be paid the principal of and premium, if any, and interest on every Bond issued under this Indenture at the place, on the dates and in the manner provided herein and in the Bonds according to the true intent and meaning thereof. The principal, premium, if any, and interest (except interest paid from the proceeds from the sale of the Bonds and accrued interest) are payable solely from the Trust Estate which is hereby specifically pledged to the payment thereof in the manner and to the extent herein specified, and nothing in the Bonds or this Indenture should be considered as assigning or pledging any funds or assets of the City other than the Trust Estate. Anything in this Indenture to the contrary notwithstanding, it is understood that whenever the City makes any covenants involving financial commitments it pledges no funds or assets other than the Trust Estate in the manner and to the extent herein specified, but nothing herein shall be construed as prohibiting the City from using any other funds or assets. The City covenants that the Tax will not be repealed, and the rate of the Tax will not be reduced, for so long as there are any Outstanding Bonds. It is further covenanted that all necessary action will be taken, from time to time, to collect the Tax in the full amount due and to apply Tax Receipts in the manner provided in this Indenture. Section 402. Performance of Covenants. The City covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Indenture, in any and every Bond executed, authenticated and delivered hereunder, and in all ordinances pertaining hereto. The City covenants that it is duly authorized under the Constitution and laws of the State of Arkansas, including particularly and without limitation, the Act, to issue the Bonds authorized hereby and to execute this Indenture and to make the pledge of the Tax Receipts and to make the covenants in the manner and to the extent herein set forth, that all action on its part for the issuance of the Bonds and the execution and delivery of this Indenture 23 4836-3891-9709.4 has been duly and effectively taken, and that the Bonds in the hands of the Holders and owners thereof are and will be valid and enforceable obligations of the City according to the import thereof. Section 403. Instruments of Further Assurance. At the request of the Trustee, the City shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, ordinances, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, pledging, assigning and confirming of all and singular the Tax Receipts and all other moneys hereby pledged or assigned, or intended so to be, or which the City may become bound to pledge or assign. Section 404. Recordation and Filing. To the extent necessary, the City covenants that it will cause this Indenture, such security agreements, financing statements, and all supplements thereto and other instruments as may be required from time to time to be kept, to be recorded and filed in such manner and in such places as may be required by law in order to fully preserve and protect the security of the owners of the Bonds and the rights of Trustee hereunder, and to perfect the security interest created by this Indenture. Section 405. Inspection of Books. The City shall keep proper books of record and account (separate from all other records and accounts) in which complete and correct entries shall be made of its transactions relating to the Projects and the Funds and Accounts established by this Indenture. Section 406. Tax Covenants. The City covenants that it will not use or permit the use of any Bond proceeds or any other funds of the City, directly or indirectly, in any manner, and will not take or permit to be taken any other action or actions which would adversely effect the exclusion of interest on any Bond from gross income for federal income tax purposes. Without limiting the generality of the foregoing, the City further covenants that no part of the proceeds of the Bonds shall at any time be used, directly or indirectly, to acquire securities or obligations the acquisition of which would cause any of the Bonds to be an "arbitrage bond" as defined in Sections 148(a) and (b) of the Code. The City agrees that so long as any of the Bonds remain Outstanding, it will comply with the provisions of each applicable Tax Regulatory Agreement. Section 407. Trustee's and Paying Agent's Fees and Expenses. Subject to the provisions of Section 902 hereof, the City hereby agrees and covenants to make payments for the fees, expenses and charges of the Trustee and Paying Agent, if any, as authorized and provided by this Indenture. The City is to make payments on statements rendered by the Trustee and Paying Agent either (i) directly to the Trustee and Paying Agent or (ii) pursuant to Section 503(b) hereof. Section 408. Construction of Projects; Certification of Completion Date. The City hereby covenants to use its best efforts to acquire, construct and equip each Project (or portion thereof) being financed with proceeds of the Bonds with all reasonable dispatch and to use its best efforts to cause the acquisition, construction and equipping of such Project (or portion thereof) to be completed as soon as may be practicable, but in any case within a period not to 24 4836-3891-9709.4 exceed three years after the issuance of the applicable series of Bonds, delays caused by force majeure only excepted, but if for any reason such acquisition, construction and equipping is not completed within said period, there shall be no diminution or postponement of payments required hereunder to be made by the City. Promptly after each such Completion Date, the City shall submit to the Trustee the certificate of a Qualified Engineer which shall specify the Completion Date and shall state that acquisition, construction and equipping of such Project (or portion thereof) being financed with a particular series of Bond proceeds has been completed and the Project Costs have been paid, except for any Project Costs which have been incurred but are not then due and payable, or the liability for the payment of which is being contested or disputed by the City, and for the payment of which the Trustee is directed to retain specified amounts of moneys in the Projects Fund. Notwithstanding the foregoing, such certificate may state that it is given without prejudice to any rights against third parties which exist at the date thereof or which may subsequently come into being. Section 409. Encumbrances. The City covenants that it will not create or suffer to be created any lien or charge upon the Trust Estate, except in accordance with the provisions of this Indenture. Section 410. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of each Continuing Disclosure Agreement. Notwithstanding any other provision of this Indenture to the contrary, failure of the City or the Trustee to comply with the provisions of a Continuing Disclosure Agreement shall not be considered an Event of Default hereunder; however, the Trustee may (and at the request of the Original Purchaser of a series of Bonds or the owners of at least 25% in aggregate Outstanding principal amount of such series of Bonds, shall) or any Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City or the Trustee, as the case may be, to comply with its obligations under this Section 410. Section 411. Authority of Commission. The City hereby recognizes that the Commission is the agency and instrumentality of the City designated by the Act and ordinances of the City to expend the Tax Receipts. Such authority and responsibility of the Commission is hereby confirmed and continued. Section 412. Security for the Bonds. (a) This Indenture creates a valid and binding pledge and assignment of and security interest in the Tax Receipts in favor of the Trustee as security for payment of the Bonds, enforceable by the Trustee in accordance with the terms hereof. (b) Under the laws of the State of Arkansas, such pledge, assignment and security interest is and shall be prior to any judicial lien hereafter imposed on the Tax Receipts to enforce a judgment against the City on a simple contract. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated (2001 Repl.) Section 4-9-109(d)(14), it is not necesssary to file a Uniform Commercial Code financing statement in order to perfect a security interest in the Tax Receipts. 25 4836-3891-9709.4 (c) The City has not heretofore made a pledge of, granted a lien on or security interest in, or made an assignment or sale of the Tax Receipts that ranks on a parity with or prior to the pledge, assignment and security interest granted hereby. The City shall not hereafter make or suffer to exist any pledge or assignment of, lien on, or security interest in the Tax Receipts that ranks prior to or on a parity with the pledge, assignment and security interest granted hereby, or file any financing statement describing any such pledge, assignment, lien or security interest, except as expressly permitted hereby. ARTICLE V REVENUES AND FUNDS Section 501. Creation of Funds and Accounts. (a) There is hereby confirmed and continued the Revenue Fund confirmed in the trust indenture securing the Series 2003 Bonds. The Revenue Fund shall be maintained by the City as a segregated fund. There are hereby created and established with the Trustee the following Funds and Accounts: (i) Projects Fund, and a Park Account and a Walton Arts Center Account therein; (ii) Bond Fund, and an Interest Account and a Principal Account therein; (iii) Debt Service Reserve Fund; (iv) Cost of Issuance Fund; (v) Redemption Fund; and (vi) Rebate Fund. (b) Except for the Revenue Fund, all Funds and Accounts shall be held by the Trustee, which shall hold and maintain said Funds and Accounts in trust, for the use and benefit of the Bondholders and the City, but subject to the permitted applications expressed herein. Section 502. Projects Fund. (a) The Trustee shall maintain the Projects Fund to the credit of which there shall be deposited a portion of the proceeds of the Series 2014 Bonds as provided in Section 208(b) hereof and the proceeds of Additional Bonds as directed in a Supplemental Indenture. (b) Moneys credited to the Projects Fund shall be expended only as set forth in this Section 502. (c) Amounts in Accounts of the Projects Fund shall be expended and applied for the payment of Project Costs attributable to the related Project. Disbursements shall be made from the Projects Fund on the basis of consecutively numbered Requisitions in the form attached hereto as Exhibit C signed by an Authorized Representative. Requisitions may be submitted to the Trustee by certified mail, first class mail or facsimile transmission. If the Trustee deems that a Requisition submitted by the City is sufficient pursuant to this Section 502, the amount 26 4836-3891-9709.4 requested thereunder shall be disbursed in payment of the Project Costs set forth therein, or in reimbursement of such Project Costs, within two (2) business days of the date of receipt of such Requisition by the Trustee. Each Requisition shall specify: (i) the specific Project to which such payment will apply; (ii) the name of the person or party to whom payment is to be made and the purpose of the payment; (iii) the amount to be paid thereunder; (iv) that such amount has not been previously paid by the City and is justly due and owing to the person(s) named therein as a proper payment or reimbursement of a Project Cost; and (v) that no Event of Default exists under the Indenture and that, to the knowledge of the Authorized Representative, no event has occurred and continues which with notice or lapse of time or both would constitute an Event of Default under the Indenture. (d) The Trustee shall keep full and complete records concerning and reflecting all disbursements from the Projects Fund and shall file an accounting of said disbursements if and when requested by the City. The Trustee shall only make payments from the Projects Fund pursuant to and in accordance with Requisitions. In making payments from the Projects Fund, the Trustee may rely on any Requisitions delivered to it pursuant to this Section 502, and the Trustee shall be relieved of all liability relating to payments made in accordance with such Requisitions and any supporting certificate or certificates requested by the Trustee without physical inspection of the Project. Within ninety (90) days following completion of any Project or portion thereof being financed with a particular series of Bonds, the City shall deliver to the Trustee its Certificate stating that such Project or applicable portion thereof is complete and the Trustee shall transfer the remaining moneys in the applicable Account of the Projects Fund relating to such series of Bonds (save and except moneys needed to satisfy unpaid Project Costs) to the Redemption Fund for application to the retirement of Bonds by redemption or purchase, as provided by Section 301(b) and Section 506 hereof. (e) Upon the occurrence and continuance of an Event of Default or the occurrence and continuance of an event which with notice or lapse of time or both would constitute an Event of Default, amounts on deposit in the Projects Fund shall not be disbursed but shall instead be applied to the payment of Debt Service or the redemption price of the Bonds. Section 503. Revenue Fund. (a) There shall be deposited to the credit of the Revenue Fund, as and when received, all Tax Receipts. For the purposes of financial reporting by the City with respect to the Tax, "receipts" and "revenues" shall have the same meaning. (b) On or before the fifteenth day of each month, commencing December 15, 2014, the City shall transfer to the Trustee from the Revenue Fund, in the following order, the amounts set forth below: 27 4836-3891-9709.4 FIRST: For deposit to the Interest Account of the Bond Fund, an amount equal to one-sixth (1/6) of the interest on the Outstanding Bonds due on the next Interest Payment Date (except that with respect to deposits required with respect to a series of Bonds prior to the first Interest Payment Date for such series of Bonds, the required monthly transfers shall be equal to a fraction, the numerator of which shall be 1 and the denominator of which shall be the number of transfers to be made prior to such Interest Payment Date); SECOND: For deposit to the Principal Account of the Bond Fund, an amount equal to one -twelfth (1/12) of the next scheduled principal maturity of Outstanding Bonds (including mandatory sinking fund redemptions) (except that with respect to deposits required with respect to a series of Bonds prior to the first Principal Payment Date for such series of Bonds, the required monthly transfers shall be equal to a fraction, the numerator of which shall be 1 and the denominator of which shall be the number of transfers to be made prior to such Principal Payment Date); THIRD: For deposit to the Debt Service Reserve Fund, an amount sufficient to cure any deficiency in the Debt Service Reserve Fund; FOURTH: For deposit to the Rebate Fund, an amount sufficient to satisfy the City's obligations under Section 507 hereof, and FIFTH: For payment to the Trustee and Paying Agent, the amount, if any, necessary to pay or reimburse the Trustee and Paying Agent for fees and expenses related to the Bonds. (c) Required deposits into the Interest Account and Principal Account of the Bond Fund and the Debt Service Reserve Fund shall be reduced by investment earnings, if any, in said Funds and Accounts and, with respect to required deposits to the Interest Account of the Bond Fund only, by any accrued interest deposited to the Interest Account of the Bond Fund upon the initial sale of a series of Bonds. In the event there shall be insufficient moneys in the Revenue Fund in a particular month to make the required transfers described above, then any deficiencies shall be added to the required deposits during the next month. (d) Any moneys remaining in the Revenue Fund following the required transfers set forth above may be used for any lawful purpose as determined by the Commission. Section 504. Bond Fund. (a) There shall be deposited to the credit of the appropriate Account of the Bond Fund all moneys required to be transferred thereto pursuant to Sections 208, 503, 505, 506 and 508 of this Indenture and all other moneys received for said Fund. (b) Moneys credited to the Bond Fund shall be expended only as set forth in this Section 504. (c) (i) On each Interest Payment Date for any of the Bonds Outstanding, the Trustee shall pay out of moneys credited to the Interest Account of the Bond Fund the amounts required for the payment of interest on the Bonds due on such date, and on each 28 4836-3891-9709.4 redemption date, the amounts required for the payment of accrued interest on Bonds then to be redeemed or purchased unless the payment of such accrued interest shall be otherwise provided for, and such amounts shall be applied to such payments. (ii) On each principal payment or redemption date for any of the Bonds Outstanding, the Trustee shall pay out of moneys credited to the Principal Account of the Bond Fund the amounts required for the payment of principal and premium, if any, due on the Bonds on such date and such amounts shall be applied to such payments. (iii) If there shall be insufficient moneys in the Bond Fund to pay in full interest, principal or premium, if any, due on the Bonds on any interest or principal payment or redemption date, the Trustee shall, three days prior to such date, notify the City of such deficiency, and if by one day prior to such date such deficiency has not been cured, transfer an amount equal to the deficiency into the appropriate Account of the Bond Fund from the Funds indicated in the following order: FIRST: the Redemption Fund; and SECOND: the Debt Service Reserve Fund (for payment of principal and interest on any Interest or Principal Payment Date only). (d) All payments made pursuant to this Section 504 shall be made in immediately available funds. Section 505. Cost of Issuance Fund. There shall be deposited to the credit of the Cost of Issuance Fund all moneys received for said Fund pursuant to Section 208 hereof. The Trustee shall pay those Costs of Issuance as directed by the City pursuant to a Certificate delivered on a Closing Date. After all Costs of Issuance have been paid (and in any event not later than January 1, 2015 with respect to the Series 2014 Bonds), any remaining moneys in the Cost of Issuance Fund shall be transferred to the Interest Account of the Bond Fund. The Cost of Issuance Fund is not pledged to the payment of the Bonds. Section 506. Redemption Fund. (a) There shall be deposited to the credit of the Redemption Fund all moneys required to be transferred thereto to effect an optional redemption of the Bonds pursuant to Section 301(a) hereof and all moneys transferred thereto pursuant to Section 502 of this Indenture. (b) Moneys credited to the Redemption Fund shall be expended only as set forth in this Section 506. (c) Moneys in the Redemption Fund shall be transferred to the Principal Account of the Bond Fund at such times as may be necessary to effectuate, on the first available date, redemptions of Bonds required by Section 301(a) and (b) of this Indenture. (d) The amounts accumulated in the Redemption Fund, if so directed by the City by means of a Certificate delivered to the Trustee, shall be applied by the Trustee to the purchase of Bonds of the maturities which would otherwise be redeemed pursuant to Section 301(a) and (b) 29 4836-3891-9709.4 and this Section 506 but for the provisions of this subsection (d), at prices directed by the City not exceeding the applicable redemption prices of the Bonds which would be redeemed but for the operation of this sentence. Interest accrued on the Bonds so purchased shall be paid from moneys credited to the Interest Account of the Bond Fund. Section 507. Rebate Fund. (a) The Trustee shall establish and maintain, separate and apart from any other Funds and Accounts established and maintained hereunder, a Fund to be designated as the Rebate Fund, which Fund is not pledged to the payment of any Bonds. Subject to the transfer provisions provided in subsection (c) below, all moneys at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Amount (as defined in each Tax Regulatory Agreement), for payment to the United States of America, and neither the City nor the Owner of any Bond shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section 507, by Section 406, and by each Tax Regulatory Agreement (which are incorporated herein by reference). (b) As provided in Section 503(b) hereof, there shall be deposited in the Rebate Fund the amount of all income or gain on moneys deposited in any of the Funds and Accounts established by this Indenture which is required to be rebated to the United States and is designated for deposit therein, as calculated by the City to be owing to the United States pursuant to the Tax Regulatory Agreement, which shall be delivered by the City concurrently with the issuance of a series of Bonds. (c) The Trustee, upon receipt of written instructions from the Mayor or Finance Director of the City, shall pay to the United States out of amounts in the Rebate Fund such amounts as are required pursuant to each Tax Regulatory Agreement. (d) Any moneys remaining in the Rebate Fund after payment to the United States, within sixty (60) days after the date on which the last Bond is redeemed, of one hundred percent (100%) of the rebate amount as described in Section 148(f)(2) of the Code, shall be transferred to the Revenue Fund. (e) The Trustee, as instructed by Certificate of the City, shall invest all amounts held in the Rebate Fund in Investment Obligations, subject to the restrictions set forth in the applicable Tax Regulatory Agreement. Money shall not be transferred from the Rebate Fund except as provided in subsection (c). (f) Notwithstanding any other provision of this Indenture, the obligation to remit the Rebate Amount to the United States and to comply with all other requirements of this Section 507, Section 406 and each Tax Regulatory Agreement shall survive the defeasance or payment in full of the Bonds. Section 508. Debt Service Reserve Fund. As provided in Section 208(b)(2) hereof, upon the issuance of each series of Bonds, there shall be deposited into the Debt Service Reserve Fund, from proceeds of the Bonds, an amount sufficient to cause the amounts on deposit therein to be equal to the Reserve Requirement. The Debt Service Reserve Fund shall be maintained in 30 4836-3891-9709.4 an amount equal to the Reserve Requirement. With respect to the Series 2014 Bonds, the Reserve Requirement shall be satisfied by the deposit of the Reserve Policy in the Debt Service Reserve Fund. The Debt Service Reserve Fund shall be used solely to pay the principal of and interest on Outstanding Bonds for which there are insufficient funds available in the Bond Fund to make such payments, as the same become due at maturity (including mandatory sinking fund redemption). If the Debt Service Reserve Fund, by virtue of any such payment, is reduced below the Reserve Requirement, it shall be reimbursed in the amount of any such deficiency as provided in Section 503. Notwithstanding the above provisions of this Section 508, the amount on deposit in the Debt Service Reserve Fund may be used, together with other available funds, to provide for the payment at maturity or to redeem prior to maturity all, but not less than all, of the Outstanding Bonds. If an excess shall exist in the Debt Service Reserve Fund over and above the Reserve Requirement, such excess shall be transferred to the Interest Account of the Bond Fund. Section 509. Cessation of Fund Deposits. When the moneys in the Bond Fund, the Debt Service Reserve Fund and the Redemption Fund shall be and remain sufficient to pay in full the principal and interest on all Bonds then Outstanding in accordance with Article VII of this Indenture, together with the required fees and expenses to be paid or reimbursed to the Trustee and Paying Agent, the City shall have no further obligation to make payments into said Funds. Section 510. Separate Accounts Authorized. A Supplemental Indenture authorizing the issuance of Additional Bonds may provide for the creation of separate Accounts within the Bond Fund, Debt Service Reserve Fund, Redemption Fund, Projects Fund, Costs of Issuance Fund and Rebate Fund for such series of Bonds and such other Accounts as the City may direct; provided, that the creation of such separate Accounts shall be solely for the ease of administration and shall in no event affect the equal and ratable security of the Bonds of each series. If any Supplemental Indenture authorizing the issuance of Additional Bonds provides for the establishment of separate Accounts for a series of Bonds, then such Supplemental Indenture shall require that the Tax Receipts received by the City shall be deposited pursuant to written direction of the City into each of the Accounts within the Bond Fund and Debt Service Reserve Fund for each series of Bonds on the basis of the installments of principal, premium, if any, and interest due on each series of Bonds and the amounts required to be deposited in the Accounts within the Bond Fund and the Debt Service Reserve Fund during the applicable period, to the end that the Bonds of each series shall be equally and ratably secured by the Tax Receipts. Any Supplemental Indenture authorizing the issuance of Additional Bonds shall provide that any proceeds of such series of Bonds and investment earnings thereon remaining after some specified date, or after the construction of all facilities to be financed with the proceeds of such series of Bonds, shall be applied to the redemption of such series of Bonds. ARTICLE VI INVESTMENTS Section 601. Investment of Moneys. At the direction of the City or absent such direction, the Trustee shall invest moneys in Funds or Accounts held by the Trustee in 31 4836-3891-9709.4 Investment Obligations with maturity or redemption dates consistent with the times at which said moneys will be required for the purposes provided in this Indenture; provided, however, the stated maturity dates of Investment Obligations of Debt Service Reserve Fund moneys shall not exceed five years from the date of investment therein. Moneys in separate Funds or Accounts may be commingled for the purpose of investment. Section 602. Investment Earnings. Subject to the provisions of the Tax Regulatory Agreement and Article V hereof, Investment Obligations purchased with moneys held in or attributable to any Fund or Account held by the Trustee under the provisions of this Indenture shall be deemed at all times to be a part of such Fund or Account and the income or interest earned, profits realized or losses suffered by a Fund or Account due to the investment thereof shall be retained in, credited or charged, as the case may be, to such Fund or Account unless otherwise provided pursuant to this Indenture. Section 603. Valuation of Funds. Investments in any Fund or Account shall be evaluated monthly by the Trustee. The Trustee shall report the determined value of each Fund and Account to the City. For the purpose of determining the amount in any Fund or Account, the Trustee shall value all Investment Obligations credited to such Fund or Account at the fair market value thereof. The Trustee shall determine the fair market value based on accepted industry standards and from accepted industry providers. As to certificates of deposit and bankers' acceptances, fair market value shall mean the face amount thereof, plus accrued interest thereon, and as to any other investment not specified above, fair market value is the value thereof as established by prior agreement among the City, the Trustee and BAM. The Trustee shall sell or present for redemption any Investment Obligations as necessary in order to provide money for the purpose of making any payment required hereunder, and the Trustee shall not be liable for any loss resulting from any such sale. Section 604. Responsibility of Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of moneys made by it at the direction of the City. ARTICLE VII DISCHARGE OF LIEN Section 701. Discharge of Lien. If the City shall pay or cause to be paid to the owners of the Bonds the principal, premium, if any, and interest to become due thereon at the times and in the manner stipulated therein, and if the City shall keep, perform and observe all and singular the covenants and promises in the Bonds and in this Indenture expressed as to be kept, performed and observed by it on its part, then these presents and the estate and rights hereby granted shall cease, determine and be void, and thereupon the Trustee shall cancel and discharge the lien of this Indenture, and execute and deliver to the City such instruments in writing as shall be requisite to satisfy the lien hereof, and reconvey to the City the estate hereby conveyed, and assign and deliver to the City any property at the time subject to the lien of this Indenture which may then be in its possession, except moneys or Government Securities held by it for the payment of the principal of and premium, if any, and interest on the Bonds. 32 4836-3891-9709.4 Section 702. Bonds Deemed Paid. Any Bond shall be deemed to be paid within the meaning of this Article VII when payment of the principal of and premium, if any, and interest on such Bond (whether at maturity or upon redemption as provided in this Indenture, or otherwise), either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for by irrevocably depositing with the Trustee, in trust and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such payment or (2) Government Securities (provided that such deposit will not affect the tax-exempt status of the interest on any of the Bonds or cause any of the Bonds to be classified as "arbitrage bonds" within the meaning of Section 148(a) of the Code, as reflected in an opinion of Bond Counsel delivered to the Trustee), maturing as to principal and interest in such amount and at such times as will provide sufficient moneys to make such payment, and all necessary and proper fees, compensation and expenses of the Trustee and any Paying Agent pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of the Trustee and any said Paying Agent. Notwithstanding anything in this Indenture to the contrary, in the event that the principal and/or interest due on the Series 2014 Bonds shall be paid by BAM pursuant to the Policy, the Series 2014 Bonds shall remain Outstanding for all purposes, shall not be defeased or otherwise satisfied and shall not be considered paid by the City, and the pledge and assignment of the Trust Estate and all covenants, agreements and other obligations of the City to the registered owners shall continue to exist and shall run to the benefit of BAM, and BAM shall be subrogated to the rights of such registered owners. Section 703. Non -Presentment of Bonds. In the event any Bonds shall not be presented for payment when the principal thereof becomes due, either at maturity or otherwise, or at the date fixed for redemption thereof, if there shall have been deposited with the Trustee for that purpose, or left in trust if previously so deposited, funds sufficient to pay the principal thereof, and premium, if any, together with all interest unpaid and due thereon, to the due date thereof, for the benefit of the Holder thereof, all liability of the City to the Holder thereof for the payment of the principal thereof, premium if any, and interest thereon, shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Trustee to hold such fund or funds, without liability for interest thereon, for the benefit of the Holder of such Bonds, who shall thereafter be restricted exclusively to such fund or funds, for any claim of whatever nature on his part under this Indenture or on, or with respect to, the Bonds. ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS Section 801. Events of Default. Each of the following events shall constitute and is referred to in this Indenture as an "Event of Default": (a) Default in the due and punctual payment of any interest on any Bond; (b) Default in the due and punctual payment of the principal of or premium, if any, on any Bond, whether at the stated maturity thereof, or upon proceedings for redemption thereof, or upon the maturity thereof by declaration; 33 4836-3891-9709.4 (c) Default in the payment of any other amount required to be paid under this Indenture or the performance or observance of any other of the covenants, agreements or conditions contained in this Indenture, or in the Bonds issued hereunder, and continuance thereof for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied shall have been given to the City by the Trustee, which may give such notice in its discretion and shall give such notice at the written request of Bondholders of not less than 51% in aggregate principal amount of the Bonds then Outstanding, unless the Trustee, or the Trustee and Holders of an aggregate principal amount of Bonds not less than the aggregate principal amount of Bonds the Holders of which requested such notice, as the case may be, shall agree in writing to an extension of such period prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the Trustee will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the City within such period and is being diligently pursued; (d) The filing of a petition in bankruptcy by or against the City under the United States Bankruptcy Code or the commencement of a proceeding by or against the City under any other law concerning insolvency, reorganization or bankruptcy; and (e) If the State has limited or altered the rights of the City pursuant to the Act, as in force on the date of this Indenture, to fulfill the terms of any agreements made with the Trustee or the Bondholders or in any way impaired the rights and remedies of the Trustee or the Bondholders while any Bonds are Outstanding. The term "default' as used in clauses (a), (b) and (c) above shall mean default by the City in the performance or observance of any of the covenants, agreements or conditions on its part contained in this Indenture or in the Bonds Outstanding hereunder, exclusive of any period of grace required to constitute a default an "Event of Default' as hereinabove provided. Section 802. Acceleration. Upon the occurrence of an Event of Default, the Trustee may, and upon the written request of the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding hereunder shall, by notice in writing delivered to the City, declare the principal of all Bonds then Outstanding, together with the interest accrued thereon, immediately due and payable, and such principal and interest shall thereupon become and be immediately due and payable. Section 803. Other Remedies; Rights of Bondholders. Upon the occurrence of an Event of Default, the Trustee may, as an alternative, pursue any available remedy by suit at law or in equity, including, without limitation, mandamus to enforce the payment of the principal of and premium, if any, and interest on the Bonds then Outstanding hereunder. If an Event of Default shall have occurred, and if it shall have been requested so to do by the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding hereunder and if it shall have been indemnified as provided in Section 901(1) hereof, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred upon it by this Section 803 as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Bondholders. 34 4836-3891-9709.4 No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to the Bondholders) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or acquiescence therein; and every such right and power may be exercised from time to time and as often as may be deemed expedient. No waiver of any default or Event of Default hereunder, whether by the Trustee or by the Bondholders, shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. Section 804. Right of Bondholders to Direct Proceedings. Anything in this Indenture to the contrary notwithstanding, the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding hereunder shall have the right, at any time, by an instrument or instruments in writing executed and delivered to the Trustee, to direct the method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of this Indenture, or for the appointment of a receiver or any other proceeding hereunder; provided that such direction shall not be otherwise than in accordance with the provisions of law and of this Indenture. Section 805. Appointment of Receiver. Upon the occurrence of an Event of Default, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Bondholders under this Indenture, the Trustee shall be entitled to the appointment of a receiver or receivers of the Trust Estate and of the tolls, rents, revenues, issues, earnings, income, products and profits thereof, including, without limitation, the Tax Receipts, pending such proceedings with such powers as the court making such appointment shall confer. Section 806. Waiver. In case of an Event of Default on its part, as aforesaid, to the extent that such rights may then lawfully be waived, neither the City nor anyone claiming through the City or under the City shall or will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption laws now or thereafter in force, in order to prevent or hinder the enforcement of this Indenture, but the City, for itself and all who may claim through or under it, hereby waives, to the extent that it lawfully may do so, the benefit of all such laws and all right of appraisement and redemption to which it may be entitled under the laws of the State. Section 807. Application of Moneys. Available moneys remaining after discharge of costs, charges and liens prior to this Indenture shall be applied by the Trustee as follows: (a) Unless the principal of all the Bonds shall have become or shall have been declared due and payable, all such moneys shall be applied: 35 4836-3891-9709.4 First: To the payment to the Persons entitled thereto of all installments of interest then due, in the order of the maturity of the installments of such interest, and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or privilege; Second: To the payment to the Persons entitled thereto of the unpaid principal of any of the Bonds which shall have become due (other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of this Indenture), in the order of their due dates, with interest on such Bonds from the respective dates upon which they become due, and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then to the payment ratably, according to the amount of principal due on such date, to the Persons entitled thereto without any discrimination or privilege of any Bond over any other Bond and without preference or priority of principal over interest or of interest over principal; and Third: To the payment of the interest on and the principal of the Bonds, and to the redemption of Bonds, all in accordance with the provisions of Article V of this Indenture. (b) If the principal of all the Bonds shall have become due or shall have been declared due and payable, all such moneys shall be applied first to the payment of the interest then due and unpaid upon the Bonds, and then to the payment of the principal then due and unpaid upon the Bonds, in each case without preference or priority of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the Persons entitled thereto. (c) If the principal of all the Bonds shall have been declared due and payable, and if such declaration shall thereafter have been rescinded and annulled under the provisions of this Article VIII then, subject to the provisions of paragraph (b) of this Section 807, in the event that the principal of all the Bonds shall later become due or be declared due and payable, the moneys shall be applied in accordance with the provisions of paragraph (a) of this Section 807. Whenever moneys are to be applied by the Trustee pursuant to the provisions of this Section 807, such moneys shall be applied by it at such times, and from time to time, as it shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an Interest Payment Date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such dates shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date and shall not be required to make payment to the 36 4836-3891-9709.4 Holder of any Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Section 808. Remedies Vested in Trustee. All rights of action (including the right to file proof of claim) under this Indenture or under any of the Bonds may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or other proceeding relating thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its name as Trustee, without the necessity of joining as plaintiffs or defendants any Bondholders hereby secured, and any recovery of judgment shall be for the equal benefit of the Holders of all Outstanding Bonds. Section 809. Rights and Remedies of Bondholders. No Bondholder shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of this Indenture or for the execution of any trust hereof or for the appointment of a receiver or any other remedy hereunder, unless a default has occurred of which the Trustee has been notified as provided in subsection (g) of Section 901, or of which by said subsection it is deemed to have notice, nor unless such default shall have become an Event of Default and the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding hereunder shall have made written request to the Trustee and shall have offered it reasonable opportunity either to proceed to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name, nor unless also they have offered to the Trustee indemnity as provided in subsection (1) of Section 901, nor unless the Trustee shall thereafter fail or refuse to exercise the powers hereinbefore granted, or to institute such action, suit or proceeding in its own name; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers and trusts of this Indenture, and to any action or cause of action for the enforcement of this Indenture or for the appointment of a receiver or for any other remedy hereunder; it being understood and intended that no one or more Holders of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of this Indenture by action of the Holder or Holders or to enforce any right hereunder except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, held and maintained in the manner herein provided for the equal benefit of the Holders of all Bonds Outstanding hereunder. Nothing in this Indenture contained shall, however, affect or impair the right of any Bondholders to enforce the payment of the principal of and premium, if any, and interest on any Bonds at and after the maturity thereof, or the obligation of the City to pay the principal of and premium, if any, and interest on each of the Bonds issued hereunder to the respective Holders thereof at the time and place in said Bonds expressed. Section 810. Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the City and the Trustee shall be restored to their former positions and rights hereunder with respect to the property herein conveyed, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken, except to the extent the Trustee is legally bound by such adverse determination. 37 4836-3891-9709.4 Section 811. Waivers of Events of Default. The Trustee may, and upon the written request of the Holders of not less than 51% in principal amount of all Bonds Outstanding hereunder shall, waive any Event of Default hereunder and its consequences and rescind any declaration of maturity of principal; provided, however, there shall not be waived any Event of Default described in clause (a) or (b) of the first paragraph of Section 801 hereof, unless prior to such waiver or rescission all arrears of principal (due otherwise than by declaration) and interest, and all expenses of the Trustee and Paying Agent, shall have been paid or provided for. In case of any such waiver or rescission the City, Trustee and the Bondholders shall be restored to their former positions and rights hereunder respectively, but no such waiver or rescission shall extend to any subsequent or other default, or impair any right subsequent thereon. ARTICLE IX TRUSTEE AND PAYING AGENT Section 901. Acceptance of Trusts. The Trustee hereby accepts the trusts imposed upon it by this Indenture and agrees to perform said trusts, but only upon and subject to the following expressed terms and conditions: (a) The Trustee may execute any of the trusts or powers hereof and perform any duties required of it by or through attorneys, agents, receivers or employees, and shall be entitled to advice of counsel concerning all matters of trusts hereof and its duties hereunder, and may in all cases pay reasonable compensation to all such attorneys, agents, receivers and employees as may reasonably be employed in connection with the trusts hereof. Reimbursement of such compensation paid by the Trustee is subject to the provisions of Section 902 hereof. The Trustee may act upon the opinion or advice of any attorney, surveyor, engineer or accountant selected by it in the exercise of reasonable care, or, if selected or retained by the City prior to the occurrence of a default of which the Trustee has been notified as provided in subsection (g) of this Section 901, or of which by said subsection the Trustee is deemed to have notice, approved by the Trustee in the exercise of such care. The Trustee shall not be responsible for any loss or damage resulting from an action or nonaction in accordance with any such opinion or advice. (b) The Trustee shall not be responsible for any recital herein, or in the Bonds (except in respect to the certificate of authentication of the Trustee endorsed on such Bonds), or for the validity of the execution by the City of this Indenture or of any Supplemental Indentures or instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby, or for the value of the title of the property herein conveyed or otherwise as to the maintenance of the security hereof, except that in the event the Trustee enters into possession of a part or all of the property herein conveyed pursuant to any provision of this Indenture, it shall use due diligence in preserving such property; and the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenants, conditions and agreements aforesaid as to the condition of the property herein conveyed. (c) The Trustee may become the owner of Bonds secured hereby with the same rights which it would have if not Trustee. 38 4836-3891-9709.4 (d) The Trustee shall be protected in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram or other paper or document believed by it, in the exercise of reasonable care, to be genuine and correct and to have been signed or sent by the proper person or persons. Any action taken by the Trustee pursuant to this Indenture upon the request or authority or consent of the owner of any Bond secured hereby, shall be conclusive and binding upon all future owners of the same Bond and upon Bonds issued in exchange therefor or in place thereof. (e) As to the existence or nonexistence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a Certificate of the City signed by its Authorized Representative and attested by the City Clerk as sufficient evidence of the facts therein contained and, prior to the occurrence of a default of which it has been notified as provided in subsection (g) of this Section 901, or of which by that subsection it is deemed to have notice, shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction, or action is necessary or expedient, but may at its discretion, at the reasonable expense of the City, in every case secure such further evidence as it may think necessary or advisable but shall in no case be bound to secure the same. The Trustee may accept a certificate of the City Clerk of the City under its seal to the effect that a resolution or ordinance in the form therein set forth has been adopted by the City as conclusive evidence that such resolution or ordinance has been duly adopted, and is in full force and effect. (f) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty of the Trustee, and the Trustee shall be answerable only for its own gross negligence or willful misconduct. (g) The Trustee shall not be required to take notice or be deemed to have notice of any default hereunder (except for defaults under clause (a) or (b) of the first paragraph of Section 801 hereof as to which the Trustee shall be deemed to have notice) unless the Trustee shall be specifically notified in writing of such default by the City or by the Holders of at least 10% in aggregate principal amount of Bonds Outstanding hereunder, and all notices or other instruments required by this Indenture to be delivered to the Trustee must, in order to be effective, be delivered to the principal corporate trust office of the Trustee, and in the absence of such notice so delivered, the Trustee may conclusively assume there is no such default except as aforesaid. (h) [Reserved]. (i) At any and all reasonable times the Trustee, and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right fully to inspect any and all of the property herein conveyed, including all books, papers and records of the City pertaining to the Tax Receipts and the Bonds, and to take such memoranda from and in regard thereto as may be desired. 0) The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises. 39 4836-3891-9709.4 (k) Notwithstanding anything elsewhere in this Indenture contained, the Trustee shall have the right, but shall not be required, to demand, in respect of the authentication of any Bonds, the withdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Indenture, any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, in addition to that by the terms hereof required as a condition of such action by the Trustee, deemed desirable for the purpose of establishing the right of the City to the authentication of any Bonds, the withdrawal of any cash, the release of any property, or the taking of any other action by the Trustee. (1) Before taking such action hereunder, the Trustee may require that it be furnished an indemnity bond satisfactory to it for the reimbursement to it of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from the gross negligence or willful misconduct of the Trustee, by reason of any action so taken by the Trustee. Section 902. Fees, Charges and Expenses of Trustee and Paying Agent. (a) Subject to subsection (b) of this Section 902, the City shall, from moneys lawfully available therefor, pay to the Trustee and Paying Agent reasonable compensation for all services performed hereunder and also all reasonable expenses, charges and other disbursements and those of their attorneys, agents and employees incurred in and about the administration and execution of the trusts hereby created and the performance of the powers and duties hereunder and, to the extent permitted by law and from moneys lawfully available therefor, shall indemnify and save the Trustee harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder. With respect to the Series 2014 Bonds, the Trustee's initial authentication fee shall be $2,500 and the annual administration fee of the Trustee shall be $2,500; provided, however, that during any period in which amounts are on deposit in the Projects Fund, the annual administration fee of the Trustee shall be $3,000. If the City shall fail to make any payment required by this subsection (a), the Trustee may make such payment from any moneys in its possession under the provisions of this Indenture and shall be entitled to a preference therefor over any of the Bonds Outstanding hereunder. The City shall not be required to indemnify the Trustee against any liabilities which the Trustee may incur as a result of negligent or wrongful acts or omissions of the Trustee. (b) The City shall pay to the Trustee compensation for its services as described in Section 902(a), provided that such compensation, together with all expenses, charges and other disbursements of the Trustee and its attorneys, agents and employees and all reimbursements to the Trustee for all costs and other disbursements as described in Section 901(a) hereof shall not exceed $9,500 annually (not including the initial authentication fee) without the prior written approval of the City, which approval shall not be unreasonably withheld. If the Trustee wishes to consult with or retain counsel for any purpose hereunder whose anticipated fees, together with all other compensation, disbursements and reimbursements of the Trustee and its attorneys, agents and employees to be paid by the City hereunder, shall exceed $10,000 annually, then such counsel shall have to be acceptable to the City and such fees shall have to be approved by the City as described above. 40 4836-3891-9709.4 Section 903. Additional Duties of Trustee. (a) In addition to the other duties of the Trustee described in this Indenture, it shall be the duty of the Trustee, on or before the tenth day of each month after the month in which the Series 2014 Bonds are delivered, to file with the City a statement setting forth in respect of the preceding calendar month: (i) the amount withdrawn or transferred by it and the amount deposited with it on account of each Fund and Account held by it under the provisions of this Indenture; (ii) the amount on deposit with it at the end of such month to the credit of each such Fund and Account; (iii) a brief description of all obligations held by it as an investment of moneys in each such Fund and Account; (iv) the amount applied to the purchase or redemption of Bonds under the provisions of this Indenture and a description of the Bonds or portions of Bonds so purchased or redeemed; and (v) any other information that the City may reasonably request, including, but not limited to, submittal of monthly statements of activity relating to the Bonds. Such information shall also be provided at the direction of the City to one additional designated entity. All records and files pertaining to each such Fund and Account in the custody of the Trustee hereunder shall be open at all reasonable times to the inspection of the City and its agents and representatives, and the City may make copies thereof. (b) The Trustee additionally shall be responsible for the preparation and timely distribution of any and all forms and reports required by law to all Bondholders, the State and the Internal Revenue Service in connection with the payment to the Bondholders of interest on the Bonds. Section 904. Notice to Bondholders of Default. If a default occurs of which the Trustee is pursuant to the provisions of Section 901(g) deemed to have or is given notice, the Trustee shall promptly make demand upon the City and give notice to each owner of Bonds then Outstanding. Section 905. Intervention by Trustee. In any judicial proceeding to which the City is a party and which in the opinion of the Trustee and its counsel has a substantial bearing on the interests of Holders of Bonds issued hereunder, the Trustee may intervene on behalf of Bondholders and shall do so if requested in writing by the Holders of at least 51% of the aggregate principal amount of Bonds Outstanding hereunder. The rights and obligations of the Trustee under this Section 905 are subject to the approval of the court having jurisdiction in the premises. Section 906. Merger or Consolidation of Trustee. Any bank or trust company to which the Trustee may be merged, or with which it may be consolidated, or to which it may sell or transfer its trust business and assets as a whole or substantially as a whole, or any bank or trust 41 4836-3891-9709.4 company resulting from any such sale, merger, consolidation or transfer to which it is a party, ipso facto, shall be and become successor trustee hereunder and vested with all of the title to the whole property or Trust Estate and all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed, or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that such successor trustee shall have capital and surplus of at least $40 million. Section 907. Resignation by Trustee. The Trustee and any successor trustee may at any time resign from the trusts hereby created by giving written notice to the City and the Bondholders, and such resignation shall take effect upon the appointment of a successor trustee by the Bondholders or by the City. Such notice may be served personally or sent by registered mail (to the City) or first class mail (to the Bondholders). Section 908. Removal of Trustee. The Trustee may be removed at any time by an instrument or concurrent instruments in writing delivered to the Trustee and to the City, and signed by the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding hereunder. Section 909. Appointment of Successor Trustee. In case the Trustee hereunder shall resign or be removed, or be dissolved, or shall be in course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in case it shall be taken under the control of any public officer or officers, or of a receiver appointed by the court, a successor may be appointed by the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding hereunder, by an instrument or concurrent instruments in writing signed by such Holders, or by their attorneys in fact, duly authorized; provided, nevertheless, that in case of such vacancy the City by an instrument executed and signed by its Mayor and attested by its City Clerk under its seal, shall appoint a temporary trustee to fill such vacancy until a successor trustee shall be appointed by the Bondholders in the manner above provided. Any such temporary trustee appointed by the City shall immediately and without further act be superseded by the trustee appointed by such Bondholders. Every such temporary trustee and every such successor trustee shall be a trust company or bank in good standing, having capital and surplus of not less than $75 million. Section 910. Concerning Any Successor Trustee. Every successor or temporary trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the City an instrument in writing accepting such appointment hereunder, and thereupon such successor or temporary trustee, without any further act or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessor; but such predecessor shall, nevertheless, on the written request of the City or of its successor trustee, execute and deliver an instrument transferring to such successor all the estate, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor trustee shall deliver all securities, moneys and any other property held by it as trustee hereunder to its successor. Should any instrument in writing from the City be required by any successor trustee for more fully and certainly vesting in such successor the estates, rights, powers and duties 42 4836-3891-9709.4 hereby vested or intended to be vested in the predecessor trustee, any and all such instruments in writing shall, on request, be executed, acknowledged, and delivered by the City. Section 911. Reliance Upon Instruments. The resolutions, opinions, certificates and other instruments provided for in this Indenture may be accepted and relied upon by the Trustee as conclusive evidence of the facts and conclusions stated therein and shall be full warrant, protection and authority to the Trustee for its actions taken hereunder. Section 912. Appointment of Co -Trustee. The City and the Trustee shall have power to appoint, and upon the request of the Trustee the City shall for such purpose join with the Trustee in the execution of all instruments necessary or proper to appoint, another corporation or one or more Persons approved by the Trustee, either to act as co -trustee or co -trustees jointly with the Trustee of all or any of the property subject to the lien hereof, with such powers as may be provided in the instrument of appointment and to vest in such corporation or Person or Persons as such co -trustee any property, title, right or power deemed necessary or desirable. In the event that the City shall not have joined in such appointment within fifteen (15) days after the receipt by it of a request so to do, the Trustee alone shall have the power to make such appointment. Should any deed, conveyance or instrument in writing from the City be required by the co -trustee so appointed for more fully and certainly vesting in and confirming to such co - trustee such properties, rights, powers, trusts, duties and obligations, any and all such deeds, conveyances and instruments in writing shall, on request, be executed, acknowledged and delivered by the City. Every such co -trustee shall, to the extent permitted by law, be appointed subject to the following provisions and conditions, namely: (a) The Bonds shall be authenticated and delivered, and all powers, duties, obligations and rights conferred upon the Trustee in respect of the custody of all money and securities pledged or deposited hereunder, shall be exercised solely by the Trustee; and (b) The Trustee, at any time by an instrument in writing, may remove any such separate Trustee or co -trustee. Every instrument, other than this Indenture, appointing any such co -trustee shall refer to this Indenture and the conditions of this Article IX expressed, and upon the acceptance in writing by such co -trustee, the co -trustee shall be vested with the estate or property specified in such instrument, jointly with the Trustee (except insofar as local law makes it necessary for any separate trustee to act alone), subject to all the trusts, conditions and provisions of this Indenture. Any such co -trustee may at any time, by an instrument in writing, constitute the Trustee as the co -trustee's agent or attorney-in-fact with full power and authority, to the extent authorized by law, to do all acts and things and exercise all discretion authorized or permitted by the co -trustee, for and on behalf of the co -trustee and in the co -trustee's name. In case any co -trustee shall die, become incapable of acting, resign or be removed, all the estate, properties, rights, powers, trusts, duties and obligations of said co -trustee shall vest in and be exercised by the Trustee until the appointment of a new trustee or a successor to such co -trustee. 43 4836-3891-9709.4 Section 913. Designation and Succession of Paying Agent. The Trustee and any successor Trustee shall also be the Paying Agent for the Bonds. The Paying Agent shall enjoy the same protective provisions in the performance of its duties hereunder as are specified in Section 901 hereof with respect to the Trustee insofar as such provisions may be applicable. ARTICLE X SUPPLEMENTAL INDENTURES Section 1001. Supplemental Indentures Not Requiring Consent of Bondholders. The City and the Trustee may, from time to time and at any time, without the consent of or notice to the Bondholders, enter into Supplemental Indentures as follows: (a) to cure any formal defect, omission, inconsistency or ambiguity in this Indenture; (b) to grant to or confer or impose upon the Trustee for the benefit of the Bondholders any additional rights, remedies, powers, authority, security, liabilities or duties which may lawfully be granted, conferred or imposed and which are not contrary to or inconsistent with this Indenture as theretofore in effect, provided that no such additional liabilities or duties shall be imposed upon the Trustee without its consent; (c) to add to the covenants and agreements of, and limitations and restrictions upon, the City in this Indenture other covenants, agreements, limitations and restrictions to be observed by the City which are not contrary to or inconsistent with this Indenture as theretofore in effect; (d) to confirm, as further assurance, any pledge under, and the subjection to any claim, lien or pledge created or to be created by, this Indenture, of the Trust Estate or of any other moneys, securities or funds; (e) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time amended; (f) to authorize the issuance and sale of one or more series of Additional Bonds; (g) to make such additions, deletions or modifications as may be necessary to assure compliance with Section 148(f) of the Code relating to required rebate to the United States or otherwise as may be necessary to assure exemption from federal income taxation of interest on the Bonds; or (h) to modify, alter, amend or supplement this Indenture in any other respect which is not materially adverse to the Bondholders and which does not involve a change described in clause (a), (b), (c), (d), (e) or (f) of Section 1002 hereof and which, in the judgment of the Trustee, is not to the prejudice of the Trustee.- 44 rustee: 44 4836-3891-9709.4 Section 1002. Supplemental Indentures Requiring Consent of Bondholders. Subject to the terms and provisions contained in this Section 1002, and not otherwise, the Holders of not less than 2/3 in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in this Indenture to the contrary notwithstanding, to consent to and approve the execution by the City and the Trustee of such indenture or indentures supplemental hereto as shall be deemed necessary and desirable by the City for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in this Indenture or in any Supplemental Indenture; provided, however, that nothing herein contained shall permit or be construed as permitting (a) an extension of the maturity (or mandatory redemption date) of the principal of or the interest on any Bond issued hereunder, or (b) a reduction in the principal amount of or redemption premium or rate of interest on any Bond issued hereunder, or (c) the creation of any lien on the Trust Estate or any part thereof, except as hereinbefore expressly permitted, or (d) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture, or (f) the deprivation of the Holder of any Bond then Outstanding of the lien hereby created on the Trust Estate. Nothing herein contained, however, shall be construed as making necessary the approval of Bondholders of the execution of any Supplemental Indenture as provided in Section 1001. If, at any time the City shall request the Trustee to enter into any Supplemental Indenture for any of the purposes of this Section, the Trustee shall, at the expense of the City, cause notice of the proposed execution of such Supplemental Indenture to be mailed by first class mail to each registered owner of the Bonds. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the principal office of the Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such Supplemental Indenture when consented to and approved as provided in this Section 1002. If the Holders of not less than 2/3 in aggregate principal amount of the Bonds Outstanding at the time of the execution of any such Supplemental Indenture shall have consented to and approved the execution thereof as herein provided, no Holder of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from executing the same or from taking any action pursuant to the provisions thereof. Section 1003. Effect of Supplemental Indentures. Upon the execution of any Supplemental Indenture entered into pursuant to Section 1001 or 1002 hereof, this Indenture shall be deemed to be modified and amended in accordance therewith. ARTICLE XI MUNICIPAL BOND INSURANCE POLICY; RESERVE POLICY Notwithstanding any other provision to the contrary contained in the Indenture, so long as the Policy remains in full force and effect (or any amounts are owed to BAM in connection therewith), the provisions of this Article XI shall control where applicable. 45 4836-3891-9709.4 Section 1101. Article XI Definitions. For purposes of this Article XI only, the following terms shall have the meanings ascribed below: "BAM" shall mean Build America Mutual Assurance Company, or any successor thereto. "Insured Obligations" shall mean the x$10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014, dated November 1, 2014, issued under and secured by this Indenture. "Issuer" shall mean the City of Fayetteville, Arkansas. "Late Payment Rate" shall mean the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank, N.A., at its principal office in the City of New York, New York, as its prime or base lending rate ("Prime Rate") (any change in such Prime Rate to be effective on the date such change is announced by JPMorgan Chase Bank, N.A.) plus 3%, and (ii) the then applicable highest rate of interest on the Insured Obligations and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. In the event JPMorgan Chase Bank, N.A., ceases to announce its Prime Rate, the Prime Rate shall be the prime or base lending rate of such other bank, banking association or trust company as BAM, in its sole and absolute discretion, shall designate. Interest at the Late Payment Rate on any amount owing to BAM shall be computed on the basis of the actual number of days elapsed in a year of 360 days. "Policy" shall mean the Municipal Bond Insurance Policy issued by BAM that guarantees the scheduled payment of principal of and interest on the Insured Obligations when due. "Security Documents" shall mean the Authorizing Ordinance, Indenture and/or any additional or supplemental document executed in connection with the Insured Obligations. Section 1102. Notices and Other Information to be Given to BAM. The Issuer will provide BAM with all notices and other information it is obligated to provide (i) under its Continuing Disclosure Agreement and (ii) to the holders of Insured Obligations or the Trustee under the Security Documents. The notice address of BAM is: Build America Mutual Assurance Company, 1 World Financial Center, 27th Floor, 200 Liberty Street, New York, NY 10281, Attention: Surveillance, Re: Policy No. 2014B0584, Telephone: (212) 235-2500, Telecopier: (212) 235-1542, Email: notices@buildamerica.com. In each case in which notice or other communication refers to an event of default or a claim on the Policy, then a copy of such notice or other communication shall also be sent to the attention of the General Counsel at the same address and at claims@buildamerica.com or at Telecopier: (212) 235-5214 and shall be marked to indicate "URGENT MATERIAL ENCLOSED." Section 1103. Defeasance. Investments in any defeasance escrow relating to the Insured Obligation shall be limited to non -callable, direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal 46 4836-3891-9709.4 and interest by the United States of America, or as otherwise maybe authorized under State law and approved by BAM. At least (three) 3 Business Days prior to any defeasance with respect to the Insured Obligations, the Issuer shall deliver to BAM draft copies of an escrow agreement, an opinion of bond counsel regarding the validity and enforceability of the escrow agreement and the defeasance of the Insured Obligations, and a verification report (a "Verification Report") prepared by a nationally recognized independent financial analyst or firm of certified public accountants regarding the sufficiency of the escrow fund. Such opinion and Verification Report shall be addressed to BAM and shall be in form and substance satisfactory to BAM. In addition, the escrow agreement shall provide that: (a) Any substitution of securities following the execution and delivery of the escrow agreement shall require the delivery of a Verification Report, an opinion of bond counsel that such substitution will not adversely affect the exclusion (if interest on the Insured Obligations is excludable) from gross income of the holders of the Insured Obligations of the interest on the Insured Obligations for federal income tax purposes, and the prior written consent of BAM, which consent will not be unreasonably withheld. (b) The Issuer will not exercise any prior optional redemption of Insured Obligations secured by the escrow agreement or any other redemption other than mandatory sinking fund redemptions unless (i) the right to make any such redemption has been expressly reserved in the escrow agreement and such reservation has been disclosed in detail in the official statement for the refunding bonds, and (ii) as a condition to any such redemption there shall be provided to BAM a Verification Report as to the sufficiency of escrow receipts without reinvestment to meet the escrow requirements remaining following any such redemption. (c) The Issuer shall not amend the escrow agreement or enter into a forward purchase agreement or other agreement with respect to rights in the escrow without the prior written consent of BAM. Section 1104. Trustee and Paying Agent. BAM shall receive prior written notice of any name change of the trustee (the "Trustee") or, if applicable, the paying agent (the "Paying Agent") for the Insured Obligations or the resignation or removal of the Trustee or, if applicable, the Paying Agent. Any Trustee must be (A) a national banking association that is supervised by the Office of the Comptroller of the Currency and has at least $250 million of assets, (B) a state - chartered commercial bank that is a member of the Federal Reserve System and has at least $1 billion of assets, or (C) otherwise approved by BAM in writing. No removal, resignation or termination of the Trustee or, if applicable, the Paying Agent shall take effect until a successor, acceptable to BAM, shall be qualified and appointed. Section 1105. Amendments, Supplements and Consents. BAM's prior written consent is required for all amendments and supplements to the Security Documents, with the exceptions noted below. The Issuer shall send copies of any such amendments or supplements to BAM and the rating agencies which have assigned a rating to the Insured Obligations. 47 4836-3891-9709.4 (a) Consent of BAM. Any amendments or supplements to the Security Documents shall require the prior written consent of BAM with the exception of amendments or supplements: i. To cure any ambiguity or formal defect or omissions or to correct any inconsistent provisions in the transaction documents or in any supplement thereto, or ii. To grant or confer upon the holders of the Insured Obligations any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the holders of the Insured Obligations, or iii. To add to the conditions, limitations and restrictions on the issuance of bonds or other obligations under the provisions of the Security Documents other conditions, limitations and restrictions thereafter to be observed, or iv. To add to the covenants and agreements of the Issuer in the Security Documents other covenants and agreements thereafter to be observed by the Issuer or to surrender any right or power therein reserved to or conferred upon the Issuer. (b) Consent of BAM in Addition to Bondholder Consent. Any amendment, supplement, modification to, or waiver of, any of the Security Documents that requires the consent of holders of the Insured Obligations or adversely affects the rights or interests of BAM shall be subject to the prior written consent of BAM. (c) Consent of BAM in the Event of Insolvency. Any reorganization or liquidation plan with respect to the Issuer must be acceptable to BAM. In the event of any reorganization or liquidation of the Issuer, BAM shall have the right to vote on behalf of all holders of the Insured Obligations absent a continuing failure by BAM to make a payment under the Policy. (d) Consent of BAM Upon Default. Anything in the Security Documents to the contrary notwithstanding, upon the occurrence and continuance of a default or an event of default, BAM shall be entitled to control and direct the enforcement of all rights and remedies granted to the holders of the Insured Obligations or the Trustee or Paying Agent for the benefit of the holders of the Insured Obligations under any Security Document. No default or event of default may be waived without BAM's written consent. (e) BAM as Owner. Upon the occurrence and continuance of a default or an event of default, BAM shall be deemed to be the sole owner of the Insured Obligations for all purposes under the Security Documents, including, without limitations, for purposes of exercising remedies and approving amendments. (f) Consent of BAM for Acceleration. BAM's prior written consent is required as a condition precedent to and in all instances of acceleration. 48 4836-3891-9709.4 (g) Grace Period for Payment Defaults. No grace period shall be permitted for payment defaults on the Insured Obligations. No grace period for a covenant default shall exceed 30 days without the prior written consent of BAM. (h) Special Provisions for Insurer Default. If an Insurer Default shall occur and be continuing, then, notwithstanding anything in paragraphs (a) -(e) above to the contrary, (1) if at any time prior to or following an Insurer Default, BAM has made payment under the Policy, to the extent of such payment BAM shall be treated like any other holder of the Insured Obligations for all purposes, including giving of consents, and (2) if BAM has not made any payment under the Policy, BAM shall have no further consent rights until the particular Insurer Default is no longer continuing or BAM makes a payment under the Policy, in which event, the foregoing clause (1) shall control. For purposes of this paragraph, "Insurer Default' means: (A) BAM has failed to make any payment under the Policy when due and owing in accordance with its terms; or (B) BAM shall (i) voluntarily commence any proceeding or file any petition seeking relief under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or similar law, (ii) consent to the institution of or fail to controvert in a timely and appropriate manner, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for such party or for a substantial part of its property, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take action for the purpose of effecting any of the foregoing; or (C) any state or federal agency or instrumentality shall order the suspension of payments on the Policy or shall obtain an order or grant approval for the rehabilitation, liquidation, conservation or dissolution of BAM (including without limitation under the New York Insurance Law). Section 1106. BAM as Third Party Beneficiary. BAM is recognized as and shall be deemed to be a third party beneficiary of the Security Documents and may enforce the provisions of the Security Documents as if it were a party thereto. Section 1107. Payment Procedure under the Policy. In the event that principal and/or interest due on the Insured Obligations shall be paid by BAM pursuant to the Policy, the Insured Obligations shall remain outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Issuer, the assignment and pledge of the trust estate and all covenants, agreements and other obligations of the Issuer to the registered owners shall continue to exist and shall run to the benefit of BAM, and BAM shall be subrogated to the rights of such registered owners including, without limitation, any rights that such owners may have in respect of securities law violations arising from the offer and sale of the Insured Obligations. In the event that on the second (2nd ) business day prior to any payment date on the Insured Obligations, the Paying Agent or Trustee has not received sufficient moneys to pay all principal of and interest on the Insured Obligations due on such payment date, the Paying Agent or Trustee shall immediately notify BAM or its designee on the same business day by telephone or electronic mail, of the amount of the deficiency. If any deficiency is made up in whole or in 49 4836-3891-9709.4 part prior to or on the payment date, the Paying Agent or Trustee shall so notify BAM or its designee. In addition, if the Paying Agent or Trustee has notice that any holder of the Insured Obligations has been required to disgorge payments of principal of or interest on the Insured Obligations pursuant to a final, non -appealable order by a court of competent jurisdiction that such payment constitutes an avoidable preference to such holder within the meaning of any applicable bankruptcy law, then the Paying Agent or Trustee shall notify BAM or its designee of such fact by telephone or electronic mai], or by overnight or other delivery service as to which a delivery receipt is signed by a person authorized to accept delivery on behalf of BAM. The Paying Agent or Trustee shall irrevocably be designated, appointed, directed and authorized to act as attorney-in-fact for holders of the Insured Obligations as follows: (a) If there is a deficiency in amounts required to pay interest and/or principal on the Insured Obligations, the Paying Agent or Trustee shall (i) execute and deliver to BAM, in form satisfactory to BAM, an instrument appointing BAM as agent and attorney-in-fact for such holders of the Insured Obligations in any legal proceeding related to the payment and assignment to BAM of the claims for interest on the Insured Obligations, (ii) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the Policy payment from BAM with respect to the claims for interest so assigned, and (iii) disburse the same to such respective holders; and (b) If there is a deficiency in amounts required to pay principal of the Insured Obligations, the Paying Agent or Trustee shall (i) execute and deliver to BAM, in form satisfactory to BAM, an instrument appointing BAM as agent and attorney-in-fact for such holder of the Insured Obligations in any legal proceeding related to the payment of such principal and an assignment to BAM of the Insured Obligations surrendered to BAM, (ii) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the Policy payment therefore from BAM, and (iii) disburse the same to such holders. The Trustee shall designate any portion of payment of principal on Insured Obligations paid by BAM, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Insured Obligations registered to the then current holder, whether DTC or its nominee or otherwise, and shall issue a replacement Insured Obligation to BAM, registered in the name directed by BAM, in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Trustee's failure to so designate any payment or issue any replacement Insured Obligation shall have no effect on the amount of principal or interest payable by the Issuer on any Insured Obligation or the subrogation or assignment rights of BAM. Payments with respect to claims for interest on and principal of Insured Obligations disbursed by the Paying Agent or Trustee from proceeds of the Policy shall not be considered to discharge the obligation of the Issuer with respect to such Insured Obligations, and BAM shall become the owner of such unpaid Insured Obligations and claims for the interest in accordance 50 4836-3891-9709.4 with the tenor of the assignment made to it under the provisions of the preceding paragraphs or otherwise. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agent and Trustee agree for the benefit of BAM that: (a) They recognize that to the extent BAM makes payments directly or indirectly (e.g., by paying through the Paying Agent or Trustee), on account of principal of or interest on the Insured Obligations, BAM will be subrogated to the rights of such holders to receive the amount of such principal and interest from the Issuer, with interest thereon, as provided and solely from the sources stated in the Security Documents and the Insured Obligations; and (b) They will accordingly pay to BAM the amount of such principal and interest, with interest thereon as provided in the transaction documents and the Insured Obligations, but only from the sources and in the manner provided therein for the payment of principal of and interest on the Insured Obligations to holders, and will otherwise treat BAM as the owner of such rights to the amount of such principal and interest. Section 1108. Additional Payments. The Issuer agrees unconditionally that it will pay or reimburse BAM on demand any and all reasonable charges, fees, costs, losses, liabilities and expenses that BAM may pay or incur, including, but not limited to, fees and expenses of BAM's agents, attorneys, accountants, consultants, appraisers and auditors and reasonable costs of investigations, in connection with the administration (including waivers and consents, if any), enforcement, defense, exercise or preservation of any rights and remedies in respect of the Security Documents ("Administrative Costs"). For purposes of the foregoing, costs and expenses shall include a reasonable allocation of compensation and overhead attributable to the time of employees of BAM spent in connection with the actions described in the preceding sentence. The Issuer agrees that failure to pay any Administrative Costs on a timely basis will result in the accrual of interest on the unpaid amount at the Late Payment Rate, compounded semi-annually, from the date that payment is first due to BAM until the date BAM is paid in full. Notwithstanding anything herein to the contrary, the Issuer agrees to pay to BAM (i) a sum equal to the total of all amounts paid by BAM under the Policy ("BAM Policy Payment"); and (ii) interest on such BAM Policy Payments from the date paid by BAM until payment thereof in full by the Issuer, payable to BAM at the Late Payment Rate per annum (collectively, "BAM Reimbursement Amounts") compounded semi-annually. The Issuer hereby covenants and agrees that the BAM Reimbursement Amounts are payable from and secured by a lien on and pledge of the same revenues and other collateral pledged to the Insured Obligations on a parity with debt service due on the Insured Obligations. Section 1109. Debt Service Reserve and Projects Fund. The prior written consent of BAM shall be a condition precedent to the deposit of any credit instrument (other than the Reserve Policy) provided in lieu of a cash deposit into the Debt Service Reserve Fund. Amounts on deposit in the Debt Service Reserve Fund shall be applied solely to the payment of debt 51 4836-3891-9709.4 service due on the Insured Obligations. Unless BAM otherwise directs, upon the occurrence and continuance of an Event of Default or an event which with notice or lapse of time would constitute an Event of Default, amounts on deposit in the Projects Fund shall not be disbursed, but shall instead be applied to the payment of debt service or the redemption price of the Insured Obligations. Section 1110. Exercise of Rights by BAM. The rights granted to BAM under the Security Documents to request, consent to or direct any action are rights granted to BAM in consideration of its issuance of the Policy. Any exercise by BAM of such rights is merely an exercise of the BAM's contractual rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the holders of the Insured Obligations and such action does not evidence any position of BAM, affirmative or negative, as to whether the consent of the holders of the Insured Obligations or any other person is required in addition to the consent of BAM. BAM shall be entitled to pay principal or interest on the Insured Obligations that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Policy) and any amounts due on the Insured Obligations as a result of acceleration of the maturity thereof in accordance with the Security Documents, whether or not BAM has received a claim upon the Policy. ARTICLE XII MISCELLANEOUS Section 1201. Consents, etc. of Bondholders. Any request, direction, objection or other instrument required by this Indenture to be signed and executed by the Bondholders may be in any number of concurrent writings of similar tenor and may be signed or executed by such Bondholders in person or by agent appointed in writing. Proof of the execution of any such request, direction, objection or other instrument or of the writing appointing any such agent and of the ownership of Bonds, if made in the following manner, shall be sufficient for any of the purposes of this Indenture, and shall be conclusive in favor of the Trustee with regard to any action taken by it under such request or other instrument, namely: (a) The fact and date of the execution by any Person of any such writing may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the Person signing such writing acknowledged before such officer the execution thereof, or by an affidavit of any witness to such execution. (b) The fact of ownership of Bonds and the amount or amounts, numbers, and other identification of such Bonds, and the date of holding the same shall be proved by the registration books of the City maintained by the Trustee, as Bond registrar. Section 1202. Notices. Except as otherwise provided in this Indenture, all notices, certificates or other communications shall be sufficiently given and shall be deemed given when mailed by registered or certified mail, postage prepaid, to the City or the Trustee. Notices, certificates or other communications shall be sent to the following addresses: 52 4836-3891-9709.4 City: City of Fayetteville City Administration Building 113 West Mountain Fayetteville, Arkansas 72701 Attention: Mayor Trustee: Simmons First Trust Company, N.A. 501 Main Street Pine Bluff, Arkansas 71601 Attention: Glenda L. Dean, Corporate Trust Bond Insurer: Build America Mutual Assurance Company 1 World Financial Center, 27`h Floor 200 Liberty Street New York, New York 10281 Attn: Surveillance, Re: Policy No. 2014BO584 Telephone: (212) 235-2500 Fax: (212) 235-1542 Any of the foregoing may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Section 1203. Limitation of Rights. With the exception of rights herein expressly conferred, nothing expressed or mentioned in or to be implied from this Indenture, or the Bonds issued hereunder, is intended or shall be construed to give to any person or company other than the parties hereto, and the Holders of the Bonds secured by this Indenture any legal or equitable rights, remedy, or claim under or in respect to this Indenture or any covenants, conditions, and provisions hereof being intended to be and being for the sole exclusive benefit of the parties hereto and the Holders of the Bonds hereby secured as herein provided. Section 1204. Severability. If any provisions of this Indenture shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions or any constitution or statute or rule of public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or paragraphs in this Indenture contained shall not affect the remaining portions of this Indenture or any part thereof. Section 1205. Applicable Provisions of Law. This Indenture shall be considered to have been executed in the State of Arkansas and it is the intention of the parties that the substantive law of the State of Arkansas govern as to all questions of interpretation, validity and effect. 53 4836-3891-9709.4 Section 1206. Counterparts. This Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 1207. Successors and Assigns. All the covenants, stipulations, provisions, agreements, rights, remedies and claims of the parties hereto in this Indenture contained shall bind and inure to the benefit of their successors and assigns. Section 1208. Captions. The captions or headings in this Indenture are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Indenture. Section 1209. Photocopies and Reproductions. A photocopy or other reproduction of this Indenture may be filed as a financing statement pursuant to the Uniform Commercial Code, although the signatures of the City and the Trustee in such reproduction are not original manual signatures. Section 1210. Bonds Owned by City. In determining whether Bondholders of the requisite aggregate principal amount of the Bonds have concurred in any direction, consent or waiver under this Indenture, Bonds which are owned by the City shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Bonds which the Trustee knows are so owned shall be so disregarded. Bonds so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Bonds and that the pledgee is not the City. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. 54 4836-3891-9709.4 IN WITNESS WHEREOF, the City has caused these presents to be signed in its name and behalf by its Mayor and its corporate seal to be hereunto affixed and attested by its City Clerk, and, to evidence its acceptance of the trust hereby created, the Trustee has caused these presents to be signed in its behalf by its duly authorized officers and its corporate seal to be hereto affixed. ATTEST: City Cleltunrnrprr (S E A L) G\T Y 0 9s�'l, ;FAYETf._VC_... G TON' 0 111111l Irk �` e ATTEST: By: &641l Title. ��: tw SEAL) PIPIfti m 4836-3891-9709.4 CITY OF ARKANSAS SIMMONS FIRST TRUST COMPANY, N.A., as Trustee B Title: ----";re President &fCorporate Trust Officer [SIGNATURE PAGE TO TRUST INDENTURE) CONSENT AND AGREEMENT TO TRUST INDENIURE The Advertising and Promotion Commission of the City of Fayetteville, Arkansas hereby consents to the execution and delivery of the foregoing Trust Indenture. ADVERTISING AND PROMOTION COMMISSION OF THE CITY OF FAYETTEVILLE ARKANSAS Y:: Title: CIferman ATTEST: City Clerk [CONSENT PAGE TO TRUST INDENTURE] 4836-3891-9709.3 CONSENT AND AGREEMENT TO TRUST INDENIURE The Advertising and Promotion Commission of the City of Fayetteville, Arkansas hereby consents to the execution and delivery of the foregoing Trust Indenture. ATTEST: City Cly U-:: �0�.• UTV .F5 -5> Fil �q NS err 4836-3891-9709.4 ADVERTISING AND PROMOTION COMMISSION OF THE CITY OF FAYETTEVILLE, ARKANSAS By: Title: Chairman f CONSENT PAGE TO TRUST INDENTURE] EXHIBIT A TO TRUST INDENTURE Form of Series 2014 Bond Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ( "DTC"), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14 - UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: % Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. Principal Amount: KNOW ALL MEN BY THESE PRESENTS: REGISTERED Maturity Date: November 1, 20_ CUSIP: 312665 DOLLARS That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment A-1 4836-3891-9709.4 of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, payment of interest hereon shall be made by check or draft of the Trustee to the Registered Owner as of the applicable Record Date, at the owner's address as it appears on the bond registration books of the City kept by the Trustee. This bond, designated "Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bond, Series 2014", is one of a series of bonds aggregating Ten Million Nine Hundred Eighty Thousand Dollars ($10,980,000) in principal amount (the "Series 2014 Bonds"). The Series 2014 Bonds are being issued for the purpose of (i) financing a portion of the costs of refunding the City's outstanding Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), (ii) financing a portion of the costs of acquisition, construction and equipping of a regional park (the "Park Project'), (iii) financing a portion of the costs of expansion and renovation of an arts center within the City (the "Walton Arts Center Project"), (iv) purchasing a policy of municipal bond insurance, (v) purchasing a debt service reserve insurance policy and (vi) paying the costs of issuance of the Series 2014 Bonds. The Series 2014 Bonds are issued under and are secured by and entitled to the protection of a Trust Indenture dated as of November 1, 2014 (the "Indenture"), by and between the City and the Trustee, which Indenture is available for inspection at the principal corporate trust office of the Trustee. Reference is hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the City, the Trustee and the owners of the Series,2014 Bonds, and the terms upon which the Series 2014 Bonds are issued and secured. The Series 2014 Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas, including particularly, the Advertising and Promotion Commission Act, codified as Arkansas Code Annotated (2008 Repl. & 2013 Supp.) §§26-75-601 et seq. (as from time to time amended, the "Act"), and Ordinance No. 5713 of the City adopted September 16, 2014, which ordinance authorized the execution and delivery of the Indenture. In order to secure the repayment of the Series 2014 Bonds, the City has, in accordance with the Act, pledged all receipts from a one percent (1%) tax (the "Tax") levied by the City pursuant to Ordinance No. 2310 adopted by the City on March 1, 1977, as subsequently amended, upon (i) the gross receipts or gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive- in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store - restaurants, caterers and similar businesses from the sale of prepared food and beverages for on -premises or off -premises consumption. A-2 4836-3891-9709.4 STATEMENT OF INSURANCE Build America Mutual Assurance Company ("BAM"), New York, New York, has delivered its municipal bond insurance policy (the "Policy") with respect to the scheduled payments due of principal and interest on this Bond to Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor as trustee for the Series 2014 Bonds (the "Trustee"). Said Policy is on file and is available for inspection at the principal office of the Trustee and a copy thereof may be obtained from BAM or the Trustee. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. By its purchase of these Series 2014 Bonds, the owner acknowledges and consents to the subrogation and all other rights of BAM as more fully set forth in the Policy. The Indenture provides that the City may hereafter issue Additional Bonds under certain terms and conditions contained in the Indenture and, if issued or incurred, such Additional Bonds will rank on a parity of security with the Series 2014 Bonds and be equally and ratably secured by and entitled to the protection of the Indenture. The Series 2014 Bonds are not general obligations of the City, but are special obligations secured by an irrevocable pledge of and lien on the Tax Receipts, as more particularly described in the Indenture. In no event shall the Series 2014 Bonds constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation. The holder of this Series 2014 Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Indenture, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture. In certain events, on the conditions, in the manner and with the effect set forth in the Indenture, the principal of all the Series 2014 Bonds and Additional Bonds, if any, issued under the Indenture and then outstanding may be declared and may become due and payable before the stated maturity thereof, together with accrued interest thereon. Modifications or alterations of the Indenture, or of any indenture supplemental thereto, may be made only to the extent and in the circumstances permitted by the Indenture. The Series 2014 Bonds are subject to redemption at the election of the City, on and after November 1, 2024, in whole or in part (in any order of maturities directed by the City, and by lot within a maturity) at any time, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. The Series 2014 Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from Projects Fund moneys in excess of the amount needed to complete the Park Project or Walton Arts Center Project or portion thereof being financed with the proceeds of the Series 2014 Bonds. A-3 4836-3891-9709.4 The Series 2014 Bonds maturing on November 1, 2029, are subject to mandatory sinking fund redemption prior to maturity in part, on November 1 in the years and amounts set forth below at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption, without premium: Year Principal Amount 2026 $390,000 2027 $405,000 2028 $420,000 2029 (maturity) $440,000 The Series 2014 Bonds maturing on November 1, 2034, are subject to mandatory sinking fund redemption prior to maturity in part, on November 1 in the years and amounts set forth below at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption, without premium: Year 2030 2031 2032 2033 2034 (maturity) Principal Amount $455,000 $480,000 $505,000 $530,000 $555,000 The Series 2014 Bonds maturing on November 1, 2039, are subject to mandatory sinking fund redemption prior to maturity in part, on November 1 in the years and amounts set forth below at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption, without premium: Year 2035 2036 2037 2038 2039 (maturity) Principal Amount $585,000 $605,000 $630,000 $650,000 $675,000 At its option, to be exercised on or before the 45`h day next preceding any mandatory sinking fund redemption date for any Series 2014 Bonds, the City may deliver to the Trustee for cancellation Series 2014 Bonds of the appropriate maturity, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2014 Bond, or portion thereof, so delivered or previously redeemed (otherwise than through mandatory sinking fund redemption) and canceled by the Trustee shall be credited by the Trustee at 100% of the principal amount thereof on the obligation of the City on such mandatory sinking fund redemption date, and any excess over such amount shall be credited on future mandatory sinking fund redemption obligations of that maturity in chronological order, and the principal amount of such Series 2014 Bonds so to be redeemed shall be accordingly reduced. M,� 4836-3891-9709.4 Notwithstanding the foregoing, so long as DTC or its nominee is the sole registered owner of the Series 2014 Bonds, the particular Series 2014 Bonds or portions thereof to be redeemed in part within a maturity shall be selected by lot by DTC in such manner as DTC shall determine. In selecting Series 2014 Bonds for redemption prior to maturity, in the case any outstanding Series 2014 Bond is in a denomination greater than $5,000, each $5,000 of face value of such Series 2014 Bond shall be treated as a separate Series 2014 Bond of the denomination of $5,000. In the event any of the Series 2014 Bonds or portions thereof (which shall be $5,000 or any integral multiple thereof) are called for redemption, notice thereof shall be given by the Trustee by first class mail to the registered owner of each such Series 2014 Bond addressed to such registered owner at his registered address and placed in the mails not less than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption; provided, however, that failure to give such notice by mailing, or any defect therein, shall not affect the validity of the proceedings for the redemption of any Series 2014 Bond with respect to which no such failure or defect has occurred. Each notice shall identify the Series 2014 Bonds or portions thereof being called, and the date on which they shall be presented for payment. After the date specified in such call notice, the Series 2014 Bond or Bonds so called for redemption will cease to bear interest provided funds sufficient for their redemption have been deposited with the Trustee, and, except for the purpose of payment, shall no longer be protected by the Indenture and shall not be deemed to be outstanding under the provisions of the Indenture. This Series 2014 Bond may be transferred on the books of registration kept by the Trustee by the registered owner or by his duly authorized attorney upon surrender hereof, together with a written instrument of transfer duly executed by the registered owner or his duly authorized attorney. The Series 2014 Bonds are issuable as registered bonds without coupons in denominations of $5,000 and any integral multiple thereof. Subject to the limitations and upon payment of the charges provided in the Indenture, Series 2014 Bonds may be exchanged for a like aggregate principal amount of Series 2014 Bonds of other authorized denominations. No recourse shall be had for the payment of the principal of or premium, if any, or interest on any of the Series 2014 Bonds or for any claim based thereon or upon any obligation, covenant or agreement contained in the Series 2014 Bonds or the Indenture against any past, present or future alderman, officer or employee of the City, or any successor, as such, either directly or through the City or any successor of the City, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such alderman, officer or employee as such is hereby expressly waived and released as a condition of and consideration for the issuance of any of the Series 2014 Bonds. This Series 2014 Bond is issued with the intent that the laws of the State of Arkansas will govern its construction. A-5 4836-3891-9709.4 IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of the Series 2014 Bonds do exist, have happened and have been performed in due time, form and manner as required by law; that the indebtedness represented by the Series 2014 Bonds, together with all obligations of the City, does not exceed any constitutional or statutory limitation; and that the revenues pledged to the payment of the principal of and premium, if any, and interest on the Series 2014 Bonds as the same become due and payable will be sufficient in amount for that purpose. This Series 2014 Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the Certificate of Authentication hereon shall have been signed by the Trustee. A-6 4836-3891-9709.4 IN WITNESS WHEREOF, the City of Fayetteville, Arkansas has caused this Series 2014 Bond to be executed by its Mayor and City Clerk, thereunto duly authorized (by their manual or facsimile signatures), and its corporate seal to be affixed or imprinted hereon, all as of the date hereof shown above. ATTEST: By: City Clerk (S E A L) CITY OF FAYETTEVILLE, ARKANSAS Mayor (Form of Trustee's Certificate) TRUSTEE'S CERTIFICATE OF AUTHENTICATION This bond is one of the Series 20t4 Bonds of the issue described in and issued under the provisions of the within mentioned Indenture. Attached hereto is the complete text of the opinion of Kutak Rock LLP, a signed original of which is on file with the undersigned, delivered and dated the date of the original delivery of and payment for the Series 2014 Bonds. SIMMONS FIRST TRUST COMPANY, N.A., as Trustee LE Authorized Signature A-7 4836-3891-9709.4 (Form of Assignment) ASSIGNMENT FOR VALUE RECEIVED, , hereby sells, assigns, and transfers unto , the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints as attorney to transfer the within Bond on the books kept for registration thereof with full power of substitution in the premises. DATE: 20 . Transferor GUARANTEED BY: NOTICE: Signature(s) must be guaranteed by an institution satisfactory to the Trustee or other transfer agent. A-8 4836-3891-9709.4 EXHIBIT B TO TRUST INDENTURE COVERAGE CERTIFICATE City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 TO: Simmons First Trust Company, N.A., as Trustee This certificate is provided pursuant to the provisions of Section 212 of the Trust Indenture dated as of November 1, 2014 (the "Indenture"), by and between the City of Fayetteville, Arkansas (the "City") and you, as trustee, in connection with the proposed issuance of Additional Bonds. In connection with such issuance, the undersigned certifies as follows: (a) Tax Receipts deposited into Revenue Fund for preceding twelve (12) months: $ (b) Maximum Annual Debt Service on all Outstanding Bonds, plus the proposed Additional Bonds: $ (c) (a) divided by (b) _ % (which is greater than 140%) The undersigned hereby certifies that he is authorized to deliver this Certificate on behalf of the City. No Event of Default exists under the Indenture and, to the knowledge of the undersigned, no event has occurred and continues which with notice or lapse of time or both would constitute an Event of Default under the Indenture. All capitalized terms not otherwise defined herein shall have the meanings set forth in the Indenture. CITY OF FAYETTEVILLE, ARKANSAS By: Finance Director B-1 4836-3891-9709.4 EXHIBIT C TO TRUST INDENTURE FORM OF REQUISITION City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement Bonds, Series Requisition Ni Project Name: TO: Simmons First Trust Company, N.A., as Trustee Pursuant to the provisions of Section 502 of the Trust Indenture dated as of November 1, 2014 (the "Indenture"), by and between the City of Fayetteville, Arkansas (the "City") and you, as trustee, you are authorized to make the following described payment from the Projects Fund [as a reimbursement to the City for payments previously made to the Payee named below][directly to the Payee named below]: Name and Address of Payee: Amount of Payment: General Classification of the Expenditures: The undersigned hereby certifies that he is authorized to deliver this Requisition on behalf of the City. The amount requested hereunder has not been the basis for any previous Requisition by the City and is justly due and owing to the person(s) named herein as a proper payment or reimbursement of a Project Cost. No Event of Default exists under the Indenture and, to the knowledge of the undersigned, no event has occurred and continues which with notice or lapse of time or both would constitute an Event of Default under the Indenture. CITY OF FAYETTEVILLE, ARKANSAS M Authorized Representative C-1 4836-3891-9709.4 TAX REGULATORY AGREEMENT between CITY OF FAYETTEVILLE, ARKANSAS MM SIMMONS FIRST TRUST COMPANY, N.A. as Trustee Dated as of November 19, 2014 Relating to: $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 Prepared by: Kutak Rock LLP 124 West Capitol Avenue Suite 2000 Little Rock, Arkansas 72201 4813-3810-1280.1 TAX REGULATORY AGREEMENT THIS TAX REGULATORY AGREEMENT (this "Tax Regulatory Agreement) is made and dated as of November 19, 2014, by and between the CITY OF FAYETTEVILLE, ARKANSAS, a city of the first class and political subdivision of the State of Arkansas (the "Issuer"), and SIMMONS FIRST TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, not in its individual capacity but solely in its capacity as the trustee (the "Trustee") named under that certain Trust Indenture dated as of November 1, 2014 (the "Indenture"), by and between the Issuer and the Trustee. k"AA N elID&WYwom WHEREAS, pursuant to the Constitution and laws of the State of Arkansas, including particularly Arkansas Code Annotated §§ 26-75-601 et seq. (2008 Repl. & 2013 Supp.) (as from time to time amended, the "Authorizing Legislation"), the Issuer has authorized the issuance of $10,980,000 aggregate principal amount of its Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Series 2014 Bonds"), pursuant to the Indenture and Ordinance No. 5713, adopted and approved on September 16, 2014 (the "Authorizing Ordinance"), for the purposes of providing a portion of the funds needed (i) to expand and renovate Walton Arts Center (the "Walton Arts Center Project"), (ii) to acquire, construct and equip a regional park (the "Park Project"), (iii) to refund the City's outstanding Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), (iv) to pay the premium on a debt service reserve insurance policy for deposit into a debt service reserve, (v) to pay the premium on a municipal bond insurance policy, and (vi) to pay the costs of issuance of the Series 2014 Bonds; and WHEREAS, the Series 2003 Bonds were originally issued by the Issuer for the purpose of refinancing a portion of the costs of acquiring, constructing and equipping certain convention facilities known as the Fayetteville Town Center (the "Existing Facilities"); and WHEREAS, the Issuer has determined that the issuance, sale and delivery of the Series 2014 Bonds is necessary in order to provide a portion of the financing needed for the Walton Arts Center Project and the Park Project and to refund the Series 2003 Bonds and thereby refinance the cost of the Existing Facilities; and WHEREAS, this Tax Regulatory Agreement has been entered into by the Issuer and the Trustee to provide for compliance with the provisions of the Internal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder; and WHEREAS, this Tax Regulatory Agreement is executed in part for the purpose of setting forth the facts, estimates and expectations of the Issuer on the date hereof as to future events regarding the Series 2014 Bonds; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Issuer and the Trustee hereby agree as follows: 4813-3810-1280.1 ARTICLE I DEFINITIONS Section 1.1. Definitions. The following words and phrases shall have the following meanings. Any capitalized word or term used herein but not defined herein shall have the same meaning given in the Indenture. "Adjusted Fair Market Value" of an investment means the Fair Market Value plus the sum of all adjustments, if any, made to the issue price of such investment under Section 1272 of the Code, since the date the investment became a Nonpurpose Obligation. "Arbitrage Rebate Consultant" means an accounting firm or a firm of attorneys or another person or firm with knowledge of or experience in advising bond trustees with respect to the provisions of Section 148(f) of the Code. "Bond Counsel" means Kutak Rock LLP or an attorney or firm of attorneys recognized as having expertise in matters relating to the issuance of tax-exempt obligations reasonably acceptable to the Trustee. "Bond Year" means the one-year period beginning on the day after expiration of the preceding bond year. The first Bond Year begins on the date of issue of the Series 2014 Bonds and ends November 1, 2015. "Code" means the Internal Revenue Code of 1986, as amended, and the Regulations thereunder. "Computation Period" means each period from the date of issue through the date on which a determination of the Rebate Amount is made. "Costs of Issuance" means all costs incurred in connection with the borrowing. Examples of costs of issuance include (but are not limited to): (a) underwriter's spread (whether realized directly or derived through purchase of the Series 2014 Bonds at a discount below the price at which a substantial number of Series 2014 Bonds are sold to the public); (b) counsel fees (including bond counsel, underwriter's counsel, issuer's counsel, trustee's counsel and any other specialized counsel fees incurred in connection with the borrowing); (c) financial advisor fees (including the Issuer's financial advisor) incurred in connection with the borrowing; (d) rating agency fees; (e) trustee fees incurred in connection with the borrowing; (f) paying agent and certifying and authenticating agent fees related to issuance of the Series 2014 Bonds; 2 4813-3810-1280.1 (g) accountant fees related to issuance of the Series 2014 Bonds; (h) printing costs (for the Series 2014 Bonds and of preliminary and final offering materials); and (i) costs incurred in connection with the required public approval process (e.g., publication costs for public notices generally and costs of any public hearing or voter referendum or election expense). "Escrow Agreement" means the Escrow Deposit Agreement date November 19, 2014, between the Issuer and the Escrow Trustee, providing for the defeasance and redemption of the Series 2003 Bonds. "Escrow Fund" means the fund established under the Escrow Agreement for the purpose of depositing moneys and investments in an amount sufficient to accomplish the defeasance of the Series 2003 Bonds. "Escrow Trustee" means BOKF, NA, in its capacity as escrow trustee under the Escrow Agreement. "Existing Facilities" means the facilities originally financed or refinanced with the proceeds of the Series 2003 Bonds. "Fair Market Value" of an investment means the fair market value, including accrued interest, of such investment at the time it becomes a Nonpurpose Obligation. "Gross Proceeds" means: (a) Sale proceeds (as defined in Section 1.148-1(b) of the Regulations); (b) Investment proceeds (as defined in Section 1.148-1(b) of the Regulations); (c) Transferred proceeds (as defined in Section 1.148-9 of the Regulations); (d) Any amounts held as a sinking fund for the Series 2014 Bonds; (e) Any amounts held in a pledged fund or reserve fund for the Series 2014 Bonds; and (f) Any other replacement proceeds (as defined in Section 1.148-1(c) of the Regulations). "Net Sale Proceeds" means sale proceeds, less the portion of those sales proceeds invested in a reasonably required reserve or replacement fund under Section 148(d) of the Code. "Nonpurpose Obligation" means any investment property, as defined in Section 148(b) of the Code, in which Gross Proceeds are invested and which is not acquired to carry out the governmental purpose of the issue. "Park Project" means the various park improvements to be financed with the proceeds of the Series 2014 Bonds. "Project" means, collectively, the Park Project and the Walton Arts Center Project. 3 4813-3810-1280.1 "Qualified Project Costs" means Project Costs (as defined in the Indenture); provided, however, that (i) Project Costs paid or incurred more than sixty (60) days prior to September 16, 2014 shall not be deemed to be Qualified Project Costs (except for costs under the de minimis and preliminary expenditure exceptions set forth in Section 1.150-2 of the U.S. Treasury Regulations), (ii) Costs of Issuance shall not be deemed to be Qualified Project Costs, and (iii) interest prior to the Completion Date (as defined in the Indenture) of the Project, letter of credit fees, and municipal bond insurance premiums which represent a transfer of credit risk must be allocated between Qualified Project Costs and other costs and expenses to be paid with Series 2014 Bond proceeds. "Rebate Amount" means, with respect to the Series 2014 Bonds, the amount computed as described in Section 4.14 hereof. "Regulation" or "Regulations" means the temporary, proposed or final Income Tax Regulations promulgated by the Department of the Treasury and applicable to the Series 2014 Bonds. "Series 2003 Bonds" means the Issuer's $6,335,000 original principal amount of Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003. "Series 2014 Bonds" means the Issuer's $10,980,000 original principal amount of Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014. "State" means the State of Arkansas. "Tax Regulatory Agreement" means this Tax Regulatory Agreement. "Trustee" means Simmons First Trust Company, N.A., a national banking association organized and existing under the laws of the United States of America, or any successor trustee under the Indenture. "Underwriter" means Stephens Inc. "Walton Arts Center Project" means the expansion, renovation and improvements to the Walton Arts Center to be financed with the proceeds of the Series 2014 Bonds. "Yield" means, with respect to the Series 2014 Bonds, yield computed under Section 1.148-4 of the Regulations, and with respect to an investment, yield computed under Section 1.148-5 of the Regulations. Section 1.2. Reliance on Issuer Information. Bond Counsel and the Trustee shall be permitted to rely upon the contents of this Tax Regulatory Agreement and any certification, document or instructions provided pursuant to this Tax Regulatory Agreement and shall not be responsible or liable in any way for the accuracy of their contents or the failure of the Issuer to deliver any required information. 4813-3810-1280.1 ARTICLE II REPRESENTATIONS AND COVENANTS BY THE ISSUER Section 2.1. Organization and Authority. The Issuer hereby represents that it (1) is a political subdivision duly organized and existing under the laws of the State of Arkansas, and (2) has lawful power and authority to issue the Series 2014 Bonds for the purposes set forth in the Indenture, to enter into, execute and deliver the Indenture and this Tax Regulatory Agreement, and to carry out its obligations under such documents, and (3) by all necessary action has been duly authorized to execute and deliver the Indenture and this Tax Regulatory Agreement, acting by and through its duly authorized officials. Section 2.2. Use of Series 2014 Bond Proceeds and Series 2003 Bond Proceeds; Ownership of the Existing Facilities and the Project. The Issuer hereby represents and warrants for the benefit of the Bond Counsel, the Trustee and holders of the Series 2014 Bonds that the proceeds of the Series 2014 Bonds will be used (i) to finance or reimburse a portion of the costs of the acquisition, construction, reconstruction, extending, improving and equipping of the Project and (ii) to redeem the Series 2003 Bonds (except for those limited proceeds which are used to pay the premiums on a municipal bond insurance policy and a debt service reserve insurance policy and to pay Costs of Issuance) and that all of the Project and the Existing Facilities financed and refinanced with proceeds of the Series 2014 Bonds will be, or will continue to be, owned and operated by the Issuer (or by the Walton Arts Center Foundation on behalf of the Issuer). The Issuer represents and warrants that it will not use or permit the use of any of the proceeds of the Series 2014 Bonds or any other funds of the Issuer, directly or indirectly, in any manner, and will not take or permit to be taken any other action, including use of the Project or the Existing Facilities, that would cause interest on the Series 2014 Bonds to be included in the gross income of the owners thereof for federal income tax purposes. In particular, the Issuer will not use, or permit the use of, any portion of the Project or the Existing Facilities in a manner that would cause the Series 2014 Bonds to be deemed "private activity bonds" within the meaning of Section 141 of the Code. The Issuer further represents and warrants that its representations and warranties with respect to the Series 2003 Bonds, the use of the proceeds thereof, and the Existing Facilities contained in that certain Tax Regulatory Agreement dated July 10, 2003, remain true and correct as of the date hereof. Section 2.3. Change in Use or Ownership of the Project or the Existing Facilities. The Issuer represents that it intends to own and operate the Project and the Existing Facilities at all times during the term of the Series 2014 Bonds; provided, however, that the Walton Arts Center Project may be operated by the Walton Arts Center Foundation on behalf of the Issuer. The Issuer does not know of any reason why the Project or the Existing Facilities will not be so used in the absence of (i) supervening circumstances not now anticipated by it, (ii) adverse circumstances beyond its control, or (iii) obsolescence of such insubstantial parts or portions thereof as may occur as a result of normal wear and tear. The Issuer covenants that it will not change or permit a change in the use, ownership or nature of any portion of the Project or the Existing Facilities so long as any of the Series 2014 Bonds are outstanding unless, in the written opinion of Bond Counsel, such change will not result in the inclusion of interest on the Series 2014 Bonds in the gross income of the recipient thereof for purposes of federal income taxation, except that the Issuer may, without an opinion, sell or otherwise dispose of minor parts or 5 4813-3810-1280.1 portions of the Project or the Existing Facilities as may be necessary or desirable due to normal wear, tear or obsolescence. The Issuer will monitor the use of the Project and the Existing Facilities in order to assure that interest on the Series 2014 Bonds remains excludable from the gross income of the recipients thereof for purposes of federal income taxation, and the Issuer will consult with Bond Counsel as necessary to determine whether, and to what extent, if as a result of a change in use or purpose of any portion of the Project or the Existing Facilities any remedial action is required under the Code or the Regulations. Section 2.4. Series 2014 Bonds in Registered Form. The Series 2014 Bonds will be issued in registered form as required by Section 149(a) of the Code. Section 2.5. Information Reporting. Section 149(e) of the Code requires as a condition to qualification for tax -exemption that the Issuer provide to the Secretary of the Treasury certain information with respect to the Series 2014 Bonds and the application of the proceeds derived therefrom. The Issuer hereby represents, for the benefit of Bond Counsel and the owners of the Series 2014 Bonds, that it has reviewed the Internal Revenue Code Form 8038- G (Information Return for Tax -Exempt Governmental Obligations) prepared by Bond Counsel and that the information contained therein is true, complete and correct to the best knowledge of the Issuer as of the date of issuance of the Series 2014 Bonds. Section 2.6. No Federal Guarantee. The Issuer represents and covenants that it has not taken and will not take, or permit to be taken, any action that will cause the Series 2014 Bonds to be "federally guaranteed" within the meaning of § 149(b) of the Code. Section 2.7. Series 2014 Bonds Not Hedge Bonds. The Issuer represents that it reasonably expects to expend at least 85 percent of the "spendable proceeds" of the Series 2014 Bonds for the specific purposes for which the Series 2014 Bonds are issued within three years of the date hereof and not more than 50 percent of the proceeds of the Series 2014 Bonds will be invested in Nonpurpose Obligations having substantially guaranteed Yields for four years or more. Section 2.8. Reimbursement. The Issuer acknowledges its understanding that if any proceeds of the Series 2014 Bonds are used to reimburse the Issuer for costs relating to the Project that were paid prior to the date of issuance of the Series 2014 Bonds, such costs shall be deemed Qualified Project Costs eligible for requisition from the Project Fund by the Issuer only if the reimbursement is valid under §1.150-2 of the Regulations. The Issuer further acknowledges its understanding that, in general, a reimbursement is valid only if (A) such costs were paid no sooner than sixty (60) days prior to September 16, 2014, the date the Issuer adopted an ordinance expressing its official intent to issue tax-exempt bonds to finance the Project, and (B) Series 2014 Bond proceeds are allocated to reimburse such costs within eighteen (18) months after the later of the date such expenditures were made or the date the Project is placed in service, but in no event later than three (3) years after the original expenditure was paid. Series 2.9. No Replacement. No portion of the amounts received from the sale of the Series 2014 Bonds will be used as a substitute for other funds which were otherwise to be used as a source of financing for the Project, and which will be used to acquire, directly or indirectly, investment obligations producing a Yield in excess of the Yield on the Series 2014 Bonds. 6 4813-3810-1280.1 Section 2.10. No Abusive Arbitrage Device. The Issuer represents that the Series 2014 Bonds are not and will not be part of a transaction or series of transactions that has the effect of (1) enabling the Issuer to exploit the difference between tax-exempt and taxable interest rates to gain a material financial advantage, and (2) overburdening the tax-exempt bond market. Section 2.11. Single Issue. The Issuer represents that the Series 2014 Bonds constitute a single "issue" under §1.150-1(c) of the Regulations. No other obligations of the Issuer (1) are being sold within fifteen (15) days of the sale of the Series 2014 Bonds, (2) are being sold pursuant to the same plan of financing as the Series 2014 Bonds, and (3) are expected to be paid from substantially the same source of funds (disregarding guaranties from third parties, such as bond insurance) as the Series 2014 Bonds. Section 2.12. Representations as to Limits on the Use of Proceeds. The amount of Series 2014 Bond proceeds to be utilized to pay the premium on the Reserve Policy (as defined in the Indenture) for deposit to the Debt Service Reserve Fund shall not exceed the lesser of (i) 10 percent of the initial. stated principal amount of the Series 2014 Bonds, (ii) the maximum annual debt service on the Series 2014 Bonds, or (iii) 125 percent of the average annual debt service on the Series 2014 Bonds, Section 2.13. Reliance on Representations of Issuer, Survival. The Issuer understands and acknowledges that Bond Counsel is relying on the various representations, warranties and covenants of the Issuer contained in this Tax Regulatory Agreement for purposes of delivering its approving opinion. All representations and certifications of the Issuer contained in this Tax Regulatory Agreement will survive the execution and delivery of this Tax Regulatory Agreement and the issuance, sale and delivery of the Series 2014 Bonds, as representations of facts existing as of the date of the execution and delivery of this Tax Regulatory Agreement. The covenants and warranties of the Issuer contained in this Article II will remain in full force and effect notwithstanding the defeasance of the Series 2014 Bonds and the discharge of the Indenture, until the final maturity date of all Series 2014 Bonds Outstanding and payment of such Series 2014 Bonds. ARTICLE III COVENANTS OF THE TRUSTEE Section 3.1. Covenants of the Trustee. The Trustee covenants to the Issuer that it will comply with all applicable provisions of this Tax Regulatory Agreement and any written letter or opinion of Bond Counsel which sets forth any action necessary by the Trustee to preserve interest on the Series 2014 Bonds from the gross income of the recipients thereof for federal income tax purposes. Such covenant will remain in full force and effect notwithstanding the defeasance of the Series 2014 Bonds and the discharge of the Indenture, until the final maturity date of all Series 2014 Bonds Outstanding and payment of such Series 2014 Bonds. The Trustee shall keep records of the expenditure of Gross Proceeds of the Series 2014 Bonds for the term of this Tax Regulatory Agreement. Such records, if any, as are maintained by the Trustee may, at the option of the Trustee, be maintained by electronic filing or record keeping systems. 7 4813-3810-1280.1 ARTICLE IV ARBITRAGE AND REBATE Section 4.1. Purpose. The purpose of this Article IV is to certify, pursuant to §1.148- 2(b) of the Regulations, the reasonable expectations of the Issuer as to the sources, uses and investment of Series 2014 Bond proceeds and other moneys in order to support the Issuer's conclusion that the Series 2014 Bonds will not be deemed to be "arbitrage bonds" within the meaning of §148 of the Code. The person executing this Tax Regulatory Agreement on behalf of the Issuer is an officer of the Issuer responsible for issuing and delivering the Series 2014 Bonds. The Issuer has not been notified of any listing or proposed listing of the Issuer by the Internal Revenue Service as an issuer that may not certify its bonds. Section 4.2. Reasonable Expectations. The facts, estimates, expectations and representations of the Issuer set forth in this Article IV are based upon the Issuer's understanding of various documents and certificates executed in connection with the issuance of the Series 2014 Bonds, including (1) the Indenture, (2) the Escrow Agreement, (3) this Tax Regulatory Agreement, and (4) a certificate of the Underwriter (in the form attached hereto as Exhibit A). To the Issuer's knowledge, the facts, estimates and expectations set forth in this Tax Regulatory Agreement are reasonable. The Issuer has no knowledge that would cause it to believe that the representations, warranties and certifications described herein are unreasonable or inaccurate or may not be relied upon. Section 4.3. Authority and Purpose for Series 2014 Bonds. The Issuer is issuing and delivering the Series 2014 Bonds simultaneously with the execution of this Tax Regulatory Agreement, pursuant to the Authorizing Legislation, the Indenture and the Authorizing Ordinance. The Series 2014 Bonds are being issued for the purposes of providing a portion of the funds needed for (i) the Walton Arts Center Project, (ii) the Park Project, (iii) refunding the Series 2003 Bonds, (iv) paying the premium for the Reserve Policy (as defined in the Indenture) for deposit into the Debt Service Reserve Fund (as defined in the Indenture), (v) paying the premium on the Policy (as defined in the Indenture), and (vi) paying Costs of Issuance of the Series 2014 Bonds. The proceeds of the Series 2014 Bonds to be used to acquire, construct and equip the Project and to defease and redeem the Series 2003 Bonds, together with other available moneys and investment earnings on such moneys and proceeds, do not exceed the amount necessary to provide for such purposes. Section 4.4. Funds and Accounts. The following funds and accounts have been established with the Trustee pursuant to the Indenture in connection with the Series 2014 Bonds: Project Fund, and a Walton Arts Center Account and a Park Account therein; Bond Fund, and an Interest Account and Principal Account therein; Redemption Fund; Debt Service Reserve Fund; Costs of Issuance Fund; and Rebate Fund. 8 4813-3810-1280.1 Section 4.5. Source and Disbursement of Series 2014 Bond Proceeds. The Series 2014 Bonds will be sold to the public at a purchase price equal to $11,663,061.23 (representing the $10,980,000 par amount of the Series 2014 Bonds, plus an original net offering premium of $662,790.60 and plus $20,270.63 of accrued interest thereon). The Underwriter will retain an underwriting discount of $109,800.00. Accordingly, the net amount of proceeds of the Series 2014 Bonds to be received by the Issuer shall be $11,553,261.23, which amount shall be deposited and expended as follows: (i) $20,270.63, representing the accrued interest on the Series 2014 Bonds, will be deposited into the Interest Account of the Bond Fund and will be utilized to make a portion of the first interest payment due on the Series 2014 Bonds on May 1, 2015; (ii) $11,607.96 will be paid to Build America Mutual Assurance Company (`BAM") for the premium on the Reserve Policy (as defined in the Indenture), which Reserve Policy shall be deposited in the Debt Service Reserve Fund; (iii) $16,122.59 will be paid to Build America Mutual Assurance Company (`BAM") for the premium on the Policy (as defined in the Indenture); (iv) $599,100.06 will be transferred to the Escrow Trustee for deposit in the Escrow Fund, and shall be used, together with $56,091.82 of legally available moneys of the Issuer (representing the debt service fund for the Series 2003 Bonds) also deposited in the Escrow Fund, to pay maturing principal and interest on the Series 2003 Bonds and to redeem the Series 2003 Bonds in full on December 22, 2014; (v) $7,181,004.09 will be deposited into the Walton Arts Center Account of the Project Fund and will be used to pay Qualified Project Costs with respect to the Walton Arts Center Project; (vi) $3,642,655.90 will be deposited into the Park Account of the Project Fund and will be used to pay Qualified Project Costs with respect to the Park Project; and (vii) the remaining $82,500.00 of the proceeds will be deposited into the Cost of Issuance Fund and used to pay Costs of Issuance of the Series 2014 Bonds. Section 4.6. Costs of Issuance Fund. The Indenture creates the Costs of Issuance Fund which will be initially funded with $82,500.00 of Series 2014 Bond proceeds. Moneys in the Cost of Issuance Fund will be used to pay Costs of Issuance associated with the Series 2014 Bonds. Proceeds of the Series 2014 Bonds deposited in the Costs of Issuance Fund shall be spent within a one-year period beginning on the date of issuance of the Series 2014 Bonds and may be invested until expended in Nonpurpose Obligations that bear a Yield that is materially higher than the Yield on the Series 2014 Bonds. The earnings on such investments will be subject to the rebate requirements described in Section 4.14 of this Tax Regulatory Agreement unless the Issuer qualifies under one of the rebate exemptions described in the Code and the Regulations. Section 4.7. Revenue Fund, Bond Fund and Redemption Fund. The Indenture creates the Bond Fund and the Redemption Fund. Moneys will be transferred to the Revenue 9 4813-3810-1280.1 Fund (defined in the Indenture) held by the Issuer, and from the Revenue Fund to the Bond Fund as described in the Indenture, to provide for the payment of principal of and interest on the Series 2014 Bonds as due. Moneys will be transferred from the Revenue Fund to the Redemption Fund as described in the Indenture to provide for the payment prior to maturity of the principal of the Series 2014 Bonds. Moneys deposited in the Revenue Fund, the Bond Fund and the Redemption Fund will be spent within a 13 -month period beginning on the date of the original deposit therein, and any amount received from investment of moneys held in the Revenue Fund, the Bond Fund or the Redemption Fund will be spent within a one-year period beginning on the date of receipt. The Revenue Fund, the Bond Fund and the Redemption Fund will be completely depleted at least once a year. Accordingly, the Revenue Fund, the Bond Fund and the Redemption Fund constitute "bona fide debt service funds" for the Series 2014 Bonds. Amounts in the Revenue Fund, Bond Fund and Redemption Fund may be invested until expended in Nonpurpose Obligations that bear a Yield that is materially higher than the Yield on the Series 2014 Bonds. The earnings on such investments will be subject to the rebate requirements described in Section 4.14 of this Tax Regulatory Agreement for any year in which the sum of such investment earnings equals or exceeds $100,000 unless the Issuer qualifies under one of the other rebate exemptions described in the Code and the Regulations. Section 4.8. Debt Service Reserve Fund. The Indenture creates the Debt Service Reserve Fund into which $11,607.96 of the proceeds of the Series 2014 Bonds will be deposited for the payment of the premium on the Reserve Policy (as defined in the Indenture). Moneys and investments in the Debt Service Reserve Fund will be expended solely to pay principal of and interest on the Series 2014 Bonds when the same become due, when and if there is a deficiency in the Bond Fund available to make such payments. The Debt Service Reserve Fund will be maintained in an amount equal to the Reserve Requirement (as defined in the Indenture). The Issuer is of the opinion, based on representations of the Underwriter, that the amount deposited in the Debt Service Reserve Fund is reasonably required for the purposes for which such fund is established. Accordingly, the Debt Service Reserve Fund is a "reasonably required reserve fund" for the Series 2014 Bonds within the meaning of the Code and the Regulations. Amounts in the Debt Service Reserve Fund may be invested until expended in Nonpurpose Obligations that bear a Yield that is materially higher than the Yield on the Series 2014 Bonds. The earnings on such investments will be subject to the rebate requirements described in Section 4.14 of this Tax Regulatory Agreement unless the Issuer qualifies under one of the rebate exemptions described in the Code and the Regulations. Section 4.9. Project Fund. The Indenture creates the Project Fund which will be initially funded with $10,823,659.99 of Series 2014 Bond proceeds ($7,181,004.09 in the Walton Arts Center Account and $3,642,655.90 in the Park Account). Moneys in the Project Fund will be used to pay costs associated with the Walton Arts Center Project and the Park Project. The Issuer has incurred, or will incur within six (6) months of the date of issuance of the Series 2014 Bonds, a substantial binding obligation to a third party to spend at least 5% of the Net Sale Proceeds on the Project. The completion of the Project and the allocation of Net Sale Proceeds to expenditures will proceed with due diligence. Completion of the Project is expected to occur on or before November 19, 2017. At least 85% of the Net Sale Proceeds will be allocated to Project expenditures within three (3) years from the date of issuance of the Series 2014 Bonds. Until November 19 2017, the Net Sale Proceeds of the Series 2014 Bonds deposited in the Project Fund may be invested until expended in Nonpurpose Obligations that bear a Yield that is 10 4813-3810-1280.1 materially higher than the Yield on the Series 2014 Bonds. The earnings on such investments will be subject to the rebate requirements described in Section 4.14 of this Tax Regulatory Agreement unless the Issuer qualifies under one of the rebate exemptions described in the Code and the Regulations. Section 4.10. Escrow Fund. The Escrow Agreement creates the Escrow Fund. Proceeds of the Series 2014 Bonds and other available moneys deposited in the Escrow Fund will be invested in accordance with the terms of the Escrow Agreement. Amounts in the Escrow Fund may be invested until expended in Nonpurpose Obligations that bear a Yield that is materially higher than the Yield on the Series 2014 Bonds. The earnings on such investments are not subject to the rebate requirements described in Section 4.14 of this Tax Regulatory Agreement. Section 4.11. Yield on the Series 2014 Bonds. (a) The Underwriter has certified (i) that the initial offering price of the Series 2014 Bonds, as set forth in Section 4.5 of this Tax Regulatory Agreement, represents the maximum initial offering price at which a substantial amount of each maturity of the Series 2014 Bonds were offered for sale and sold to purchasers (exclusive of bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) through a bona fide offering, (ii) that such initial offering prices were established by a bona fide bid without regard to any amounts which would increase the Yield on any maturity of the Series 2014 Bonds above its market yield, and (iii) that the description of interest rates and Yields contained in the final Official Statement with respect to the Series 2014 Bonds constitutes a true and correct summary thereof. (b) The Yield on the Series 2014 Bonds has been calculated by the Underwriter to be not less than 3.2553654%. The calculation of Yield has been made on the basis of semiannual compounding using a 360 -day year and upon the assumption that payments are made on the last day of each semiannual interest payment period. For purposes of computing Yield on Nonpurpose Obligations, the purchase price of any such obligation is equal to the Fair Market Value as of the date of a binding contract to acquire such obligation. Section 4.12. Arbitrage Representations. Pursuant to the issuance of the Series 2014 Bonds, the Issuer hereby represents, certifies and warrants as follows: (a) Other than Revenue Fund, the Bond Fund, the Redemption Fund, the Project Fund, the Debt Service Reserve Fund and the Costs of Issuance Fund created under the Indenture, there has not been created or established and the Issuer does not expect that there will be created or established, any sinking fund, pledged fund or similar fund, including, without limitation, any arrangement under which money, securities or obligations are pledged directly or indirectly to secure the Series 2014 Bonds or any contract securing the Series 2014 Bonds or any arrangement providing for compensating balances to be maintained by the Issuer with any holder of the Series 2014 Bonds. (b) All funds established pursuant to the Indenture will be invested pursuant to the Indenture and this Tax Regulatory Agreement. The Escrow Fund will be invested pursuant to the Escrow Agreement. 11 4813-3810-1280.1 (c) The Issuer will instruct the Trustee with respect to investment of the. various funds held under the Indenture. (i) The Issuer will not instruct the Trustee to invest in any Nonpurpose Obligation unless at Fair Market Value. The Fair Market Value of a Nonpurpose Obligation shall be the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's-length transaction determined as of the date on which the contract to buy or sell the investment is entered into. (ii) If a Nonpurpose Obligation is acquired or sold or disposed of in an arm's length transaction without regard to any amount paid to reduce the Yield on the Nonpurpose Obligation, or any reduction in sale or disposition price to reduce the Rebate Amount, the Fair Market Value of the Nonpurpose Obligation shall be the amount paid for, or the amount realized upon the sale or disposition of, the Nonpurpose Obligation. (iii) If a United States Treasury obligation is acquired directly from or sold or disposed of directly to the United States Treasury, such acquisition or sale or disposition shall be treated as establishing a market for the obligation and as establishing the Fair Market Value of the obligation. (iv) The purchase or sale of a certificate of deposit issued by a commercial bank will be at Fair Market Value if the Yield at which it is purchased is not less than (i) the Yield of comparable United States Treasury Obligations and (ii) the highest Yield posted by such provider on comparable deposits to the public. (v) The Trustee, on behalf of the Issuer, may not purchase or sell Nonpurpose Obligations pursuant to any investment contract or repurchase agreement unless (i) it receives at least three bids from persons other than those with an interest in the Series 2014 Bonds, (ii) a certification is provided by the person whose bid is accepted stating the administrative costs that are reasonably expected to be paid to third parties in connection with the investment contract, (iii) a certification is provided by the person whose bid is accepted stating that the Yield of the investment contract is not less than the Yield of comparable investment contracts to other persons who do not utilize proceeds of tax-exempt bonds to purchase such contracts, (iv) the Yield on the investment contract is at least equal to the Yield offered under the highest bid received from a noninterested party, (v) the bidding for the investment contract takes into account as a significant factor the expected drawdown schedule of the Series 2014 Bond proceeds, and (vi) any collateral security requirements of the investment contract are reasonable. Section 4.13. Arbitrage Compliance. The Issuer acknowledges that the continued exclusion of interest on the Series 2014 Bonds from gross income of the recipients for purposes of federal income taxation depends, in part, upon compliance with the arbitrage limitations 12 4813-3810-1280.1 imposed by Section 148 of the Code, including the rebate requirement described in Sections 4.14, 4.15 and 4.16 below. The Issuer hereby agrees and covenants that it shall not permit at any time or times any of the proceeds of the Series 2014 Bonds or other funds of the Issuer to be used, directly or indirectly, to acquire any asset or obligation, the acquisition of which would cause the Series 2014 Bonds to be "arbitrage bonds" for purposes of Section 148 of the Code. The Issuer further agrees and covenants that it shall do and perform all acts and things necessary in order to ensure that the requirements of Section 148 of the Code are met. To that end, the Issuer hereby agrees to take the actions described in Sections 4.14 through 4.16 below with respect to the investment of Gross Proceeds on deposit in the funds and accounts established under the Indenture and the Escrow Agreement and to direct the Trustee and the Escrow Trustee to make the required transfers and dispositions described in Sections 4.14, 4.15 and 4.16, below. The Issuer will monitor the investment of proceeds of the Series 2014 Bonds to assure compliance with Section 148 of the Code, and the Issuer will consult with Bond Counsel periodically with respect to arbitrage issues and compliance. Section 4.14. Rebate Fund, Calculation of Rebate Amount. Section 148(f) of the Code requires the payment to the United States of the excess of the amount earned on the investment of Gross Proceeds in Nonpurpose Obligations over the amount that would have been earned on such investments had the amount so invested been invested at a rate equal to the Yield on the Series 2014 Bonds, together with any income attributable to such excess. The Cost of Issuance Fund, the Project Fund, the Revenue Fund, the Bond Fund, the Redemption Fund, the Debt Service Reserve Fund and the Rebate Fund (defined below) are subject to this rebate requirement. In accordance with the requirements set out in the Code, the Rebate Fund (the "Rebate Fund") has been created in the Indenture with respect to the Series 2014 Bonds to be held by the Trustee and used as provided in this Section 4.14. The Rebate Fund shall be held and disbursed in accordance with the following: (a) All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, except as may otherwise be directed in writing by the Issuer, for payment to the federal government of the United States of America. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Tax Regulatory Agreement. The Trustee shall be deemed conclusively to have complied with this Tax Regulatory Agreement if it follows the directions of the Issuer or an Arbitrage Rebate Consultant engaged by the Issuer, and shall have no liability or responsibility to enforce compliance by the Issuer with the terms of this Tax Regulatory Agreement. (b) (i) Any funds remaining in the Rebate Fund after redemption and payment of all the Series 2014 Bonds and the final payment to the United States of America described in Section 4.15 below, or provision made therefor including accrued interest and payment of any applicable fees and expenses to the Trustee and any Arbitrage Rebate Consultant and satisfaction of the payment of the Rebate Amount in accordance with directions from the Issuer, shall be withdrawn by the Trustee upon written instructions from the Issuer and remitted to the Issuer. (ii) Notwithstanding anything to the contrary in this Tax Regulatory Agreement, any amount received from the investments of amounts held in the 13 4813-3810-1280.1 Rebate Fund which represents an amount earned shall be credited to and retained in the Rebate Fund upon the receipt thereof. (iii) In the event that on the first day of any Bond Year the amount on deposit in the Rebate Fund exceeds the aggregate Rebate Amount as certified by an Arbitrage Rebate Consultant engaged by or on behalf of the Issuer, the Trustee, upon written instructions from the Issuer, shall withdraw the excess from the Rebate Fund, pay any amounts then due and payable under the Indenture and pay any remaining excess to the Issuer. (iv) For purposes of crediting amounts to the Rebate Fund or withdrawing amounts from the Rebate Fund, Nonpurpose Obligations shall be valued in the manner provided in this Tax Regulatory Agreement. (c) On or before 30 days following the end of the fifth Bond Year, upon the Issuer's written direction, an amount shall be deposited to the Rebate Fund by the Trustee from deposits made by the Issuer, if and to the extent required, so that the balance of the Rebate Fund shall equal the aggregate Rebate Amount required as of the end of such fifth Bond Year. (d) In order to meet the Issuer's obligations in complying with the rebate requirement of Section 148(f) of the Code, the Trustee and the Issuer agree and covenant to take the following actions: (i) For each investment of amounts held with respect to the Series 2014 Bonds (other than investments in obligations described in Section 103(a) of the Code, including amounts so treated) in the (I) Costs of Issuance Fund, (II) Project Fund, (III) Revenue Fund, (IV) Bond Fund, (V) Redemption Fund, (VI) Debt Service Reserve Fund, and (VII) Rebate Fund, the Trustee shall record the purchase date of such investment, its purchase price, the accrued interest due on its purchase date, its face amount, its coupon rate, the frequency of its interest payment, and if disposed of, its disposition price, accrued interest due on its disposition date and its disposition date. If so engaged by the Issuer, an Arbitrage Rebate Consultant shall calculate the Fair Market Value for such investments and the Yield thereon. The Yield for an investment shall be calculated by using as its purchase price its Fair Market Value on the purchase date of such investment or on the date on which it becomes a Nonpurpose Obligation, whichever is later. (ii) Any Arbitrage Rebate Consultant shall determine the amount of earnings received on all investments described in paragraph (i) above, other than investments in obligations described in Section 103(a) of the Code (including amounts so treated) which are not defined by the Code as "investment property" or amounts in the Revenue Fund, Bond Fund and Redemption Fund if the earnings on the Revenue Fund, Bond Fund and Redemption Fund do not, in the aggregate, exceed $100,000 for any Bond Year, during the Computation Periods ending with the following determination dates: (I) the last day of the first Bond Year and each succeeding last day of each Bond Year; (II) the maturity date of the Series 2014 Bonds; and (III) if all outstanding Series 2014 Bonds are redeemed 14 4813-3810-1280.1 prior to the maturity date of the Series 2014 Bonds, the date on which all Series 2014 Bonds are redeemed. In addition, where Nonpurpose Obligations are retained by the Trustee after retirement of the Series 2014 Bonds, any unrealized gains or losses as of the date of retirement of the Series 2014 Bonds must be taken into account in calculating the earnings on such Nonpurpose Obligations with each such obligation treated as sold for its Fair Market Value. In calculating the earnings described above, earnings received in a Bond Year shall include amounts which would be treated as income under Section 1272 of the Code regarding the accrual of original issue discount. In addition, earnings received in any Bond Year within the Computation Period shall include the gain or loss on the sale of any investment determined by subtracting the Adjusted Fair Market Value of the investment from the disposition price of the investment. For purposes of assisting the Issuer or an Arbitrage Rebate Consultant engaged by or on behalf of the Issuer in making such determinations, the Trustee shall provide to the Issuer or Arbitrage Rebate Consultant all information requested by the Issuer or Arbitrage Rebate Consultant in the possession of the Trustee. (iii) For each Computation Period specified in paragraph (ii) above, the Issuer or an Arbitrage Rebate Consultant engaged by the Issuer shall determine the amount of earnings on all investments held in the Rebate Fund during the Computation Period. In calculating the earnings, earnings within the Computation Period shall include amounts which would be treated as income under Section 1272 of the Code regarding the accrual of original issue discount. In addition, earnings in any Bond Year within the Computation Period shall include the gain or loss on the sale of any investment determined by subtracting the Adjusted Fair Market Value of the investment from the disposition price of the investment. (iv) For each Computation Period specified in paragraph (ii) above, the Issuer or an Arbitrage Rebate Consultant engaged by the Issuer shall calculate the Rebate Amount by any appropriate method described in the Code and Regulations applicable or which become applicable to the Series 2014 Bonds. (v) For each Computation Period specified in paragraph (ii) above and within 30 days of the end of each such Computation Period, the Issuer or an Arbitrage Rebate Consultant engaged by the Issuer shall calculate the Rebate Amount and notify the Issuer (if the calculation is made by an Arbitrage Rebate Consultant) and the Trustee in writing of the Rebate Amount. If the Rebate Amount (less amounts previously rebated to the United States) exceeds the amount on deposit in the Rebate Fund, the Issuer shall immediately pay such amount to the Trustee for deposit into the Rebate Fund. If the Issuer does not pay such amount within 20 days of notice of the Rebate Amount to the Trustee, the Trustee shall withdraw and transfer such amount, first, from amounts on deposit in the funds and accounts under the Indenture (and the Trustee, without direction from the Issuer, and without making demand on, but with notice to, the Issuer, shall immediately withdraw such amount from such funds and accounts) and, if such amounts are insufficient, second, from any other source. 15 4813-3810-1280.1 Section 4.15. Payment to United States. (a) Within 45 days after the end of the fifth Bond Year and after every fifth Bond Year thereafter, the Issuer shall direct the Trustee to pay to the United States, not later than 45 days after the end of the fifth Bond Year, and not later than five years after each preceding payment was due or would have been due if a Rebate Amount existed at that time, an amount equal to not less than the excess of (i) 90% of the sum of the balance, if any, in the Rebate Fund at such time plus all previous payments made to the United States, over (ii) all previous payments made to the United States. The Issuer shall direct the Trustee and the Trustee, in accordance with such directions, shall pay to the United States, not later than 60 days after the last outstanding Series 2014 Bonds are paid or redeemed, 100% of the Rebate Amount as of the end of the final Computation Period less all previous payments made to the United States. (b) Each payment of Rebate Amount shall be mailed by the Trustee to the Internal Revenue Service Center, Ogden, Utah 84201. Each payment shall be accompanied by a copy of the Form 8038-T and the statement summarizing the determination of the Rebate Amount. (c) If during any Computation Period, the aggregate amount earned on Nonpurpose Obligations in which the Gross Proceeds of the Series 2014 Bonds are invested is less than the amount that would have been earned if the obligations had been invested at a rate equal to the Yield on the Series 2014 Bonds, such deficit may at the request of the Issuer be withdrawn from the Rebate Fund and paid to the Issuer. The Issuer may direct that any overpayment of rebate may be recovered from any Rebate Amount previously paid to the United States under any procedure that may, after the date of this Tax Regulatory Agreement, be permitted by the Code or the Regulations. (d) The Issuer shall provide to the Trustee all information and calculations necessary for the Trustee to fulfill its obligations under this Section 4.15. Section 4.16. Recordkeeping. In connection with the rebate requirement, the Trustee and the Issuer shall maintain the following records: (a) The Trustee and the Issuer shall record all amounts paid to the United States pursuant to Section 4.15. (b) The Trustee and the Issuer shall retain records of any rebate calculations until six years after the retirement of the last obligation of the issue. Section 4.17. Payment to Arbitrage Rebate Consultant. The Issuer shall pay the fees and expenses of any Arbitrage Rebate Consultant. If at any time when the Issuer has retained and is required to pay an Arbitrage Rebate Consultant and the Issuer does not make sufficient payment, the Trustee, 20 days after receiving from the Arbitrage Rebate Consultant a demand for such payment, shall withdraw from the funds and accounts established under the Indenture (except for the Rebate Fund) such amount as may be needed to pay the fees and expenses of the Arbitrage Rebate Consultant. 16 4813-3810-1280.1 ARTICLE V TERM OF TAX REGULATORY AGREEMENT Section 5.1. Term. Including all representations, warranties and covenants herein, this Tax Regulatory Agreement shall be effective from the date of issuance of the Series 2014 Bonds through the date that is six years after the last Series 2014 Bond is redeemed, paid or deemed paid pursuant to the Indenture. ARTICLE VI AMENDMENTS Section 6.1. Amendments. Notwithstanding any other provision hereof, any provision of this Tax Regulatory Agreement may be deleted or modified at any time at the option of the Issuer if the Issuer has provided to the Trustee an opinion of Bond Counsel, in form and substance satisfactory to the Trustee, that such deletion or modification will not adversely affect the exclusion of interest on the Series 2014 Bonds from the gross income of the recipients for purposes of federal income taxation. ARTICLE VII EVENTS OF DEFAULT; Section 7.1. Events of Default. The failure of either party to this Tax Regulatory Agreement to perform any of its required duties under any provision hereof shall constitute an Event of Default under this Tax Regulatory Agreement. Section 7.2. Remedies for an Event of Default. Upon an occurrence of an Event of Default under Section 7.1 hereof, the Issuer or the Trustee may, in their discretion, proceed to protect and enforce their rights and the rights of the holders of the Series 2014 Bonds by pursuing any available remedy, including a suit at law or in equity. ARTICLE VIII PROTECTION OF TRUSTEE Section 8.1. Protection of Trustee. (a) It is hereby recognized and agreed that the Trustee is entering into this Tax Regulatory Agreement in its respective capacity as Trustee under the Indenture, and the Trustee shall, with respect to this Tax Regulatory Agreement, be entitled to all of the same rights, protections and immunities hereunder as are afforded to the Trustee under the Indenture. (b) The parties hereto acknowledge that the Trustee has no liabilities with respect to compliance with the Code except to take administrative actions as directed by the Issuer pursuant to this Tax Regulatory Agreement. 17 4813-3810-1280.1 (c) The Issuer hereby agrees to indemnify and hold the Trustee harmless for, from and against any and all claims, losses, damages, judgments, costs and expenses incurred by the Trustee relating to this Tax Regulatory Agreement except for claims caused by the negligence, breach of trust or willful misconduct of the Trustee. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.] 18 4813-3810-1280.1 IN WITNESS WHEREOF, the Issuer and the Trustee have caused this Tax Regulatory Agreement to be executed in their respective names and by their proper officers thereunto duly authorized, all as of the day and year first written above. SIMMONS FIRST TRUST COMPANY, N.A., as Trustee By -Z-- ' Title: Vice President and orporate Trust Officer [SIGNATURE PAGE TO TAX REGULATORY AGREEMENT] 19 4813-3810-1280.1 EXHIBIT A TO TAX REGULATORY AGREEMENT UNDERWRITER'S CERTIFICATE The undersigned officer of Stephens Inc., the Underwriter (defined below) for the $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Series 2014 Bonds"), hereby makes the certifications set forth below in connection with the execution and delivery of the Series 2014 Bonds. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Tax Regulatory Agreement to which this certificate is attached as an exhibit. (1) Stephens Inc. has served as underwriter (the "Underwriter") and has been involved in the structuring and marketing of the Series 2014 Bonds, including particularly, the establishment of the issue size, the computation of Yield and weighted average maturity, and other factors relating to compliance with Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated thereunder. (2) Based upon our records and other information available to us which we have no reason to believe is not correct: (a) All of the Series 2014 Bonds have been the subject of a bona fide initial offering to the public (excluding of bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at the public offering prices or yields indicated on the inside cover of the Issuer's Official Statement dated October 28, 2014 (the "Official Statement"); (b) At the time the Underwriter agreed to purchase the Series 2014 Bonds, based upon the prevailing market conditions, the Underwriter had no reason to believe that any of the Series 2014 Bonds would be initially sold to the public (excluding of bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at greater prices, or yields less, than those indicated on the inside cover of the Official Statement; and (c) As of the date of the Bond Purchase Agreement entered into by and between the Issuer and the Underwriter with respect to the Series 2014 Bonds, the first prices at which the Underwriter reasonably expected to sell 10% of each maturity of the Series 2014 Bonds to the public (excluding of bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) were the respective prices shown on the cover of the Official Statement, or in the case of obligations sold on a yield basis, at the respective yields shown on the cover of the Official Statement. A-1 4813-3810-1280.1 (3) The Yield on the Series 2014 Bonds is 3.2553654%. For purposes of calculating the Yield on the Series 2014 Bonds, the Series 2014 Bonds sold at substantial premiums have been treated as called on their earliest call date resulting in the lowest Yield. (4) The establishment of the Debt Service Reserve Fund is reasonably required to obtain the issuance of the Series 2014 Bonds at an economic interest rate for the Issuer, and is, in the judgment of the undersigned, established at a funding level comparable to that found for obligations similar to the Series 2014 Bonds issued within the past year. (5) To the best knowledge of the undersigned, the representations of the Issuer contained in the Tax Regulatory Agreement are true and correct. The undersigned understands that this certificate shall form a part of the basis for the opinion, dated the date hereof, of Kutak Rock LLP, to the effect that interest with respect to the Series 2014 is excluded from the gross income of the recipient thereof for purposes of federal income taxation under existing laws, regulations, rulings and judicial decisions. IN WITNESS WHEREOF, the undersigned has set his hand as of the date set forth below. Dated: November 19, 2014 STEPHENS INC. By: _ Title: A-2 4813-3810-1280.1 EXECUTION COPY ESCROW DEPOSIT AGREEMENT THIS ESCROW DEPOSIT AGREEMENT (this "Agreement') dated November 19, 2014, by and between the City of Fayetteville, Arkansas, a political subdivision of the State of Arkansas (the "City"), and BOKF, NA, Tulsa, Oklahoma, a national banking association organized and existing by virtue of the laws of the United States of America, as escrow trustee for the hereinafter defined Prior Bonds (the "Escrow Trustee"); WITNESSETH: WHEREAS, the City has heretofore issued its $6,335,000 Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003, dated as of July 1, 2003, of which $650,000 aggregate principal amount remain outstanding and are stated to mature on October 1, 2015 (the "Prior Bonds"); and WHEREAS, the terms of and the security for the Prior Bonds are prescribed by that certain Trust Indenture dated as of July 1, 2003 (the "Prior Indenture"), by and between the City and the BOKF, NA, as trustee (the "Prior Trustee"); and WHEREAS, Article VII of the Prior Indenture provides under certain circumstances that the Prior Bonds shall be deemed paid within the meaning of the Prior Indenture if there shall be on deposit with the Prior Trustee moneys or certain types of investment obligations described therein maturing on or prior to the maturity or redemption dates of the Prior Bonds and sufficient to pay when due the principal of, premium, if any, and interest on the Prior Bonds to the maturity date or redemption date, as the case may be; and WHEREAS, the City, pursuant to an ordinance adopted by its City Council on September 16, 2014, and the Constitution and laws of the State of Arkansas, has authorized the issuance of $10,980,000 aggregate principal amount of its Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Refunding Bonds"), a portion of the proceeds of which are to be used, together with other available funds, to redeem all of the Prior Bonds prior to maturity; and WHEREAS, the City has made arrangements for deposit with the Escrow Trustee of moneys and investment obligations derived from and purchased with (a) a portion of the proceeds derived from the sale of the Refunding Bonds, and (b) amounts released from the Bond Fund for the Prior Bonds, which in the aggregate will provide sufficient immediately available funds to enable the Escrow Trustee to pay the principal of and interest on the Prior Bonds upon redemption on December 22, 2014 (the "Redemption Date"), as set forth on Schedule 1 hereto; and WHEREAS, the City has entered into this Agreement with the Escrow Trustee in order to ensure that the procedures required for discharging the Prior Bonds will be followed; 4945-6212-5341.4 NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, and in order to provide for the redemption of the Prior Bonds and to set forth the obligations of the parties hereto, the parties hereto agree as follows: Section 1. Establishment of Escrow Fund. There is hereby created and established with the Escrow Trustee a special, segregated and irrevocable escrow account designated "City of Fayetteville, Arkansas - 2003 Refunding Escrow Fund" (the "Escrow Fund") to be held in the custody of the Escrow Trustee as a trust fund for the benefit of the registered owners of the Prior Bonds, separate and apart from other funds of the City and the Escrow Trustee. Section 2. Deposit to Escrow Fund; Application of Moneys. Simultaneously with the execution of this Agreement, the City has sold and delivered the Refunding Bonds. From the proceeds of the sale of the Refunding Bonds, the City has delivered to the Escrow Trustee for deposit in the Escrow Fund immediately available moneys in the amount of $599,100.06. The Escrow Trustee, in its role as Prior Trustee, is hereby directed to liquidate all investments in the Bond Fund established under the Prior Indenture and applicable to the Prior Bonds, and to transfer such moneys (viz., the sum of $56,091.82) to the Escrow Fund. The Escrow Trustee has purchased, from and as an investment of moneys in the Escrow Fund, at the prices indicated, the direct noncallable obligations of the United States of America identified in Schedule 2 attached hereto (the "Government Obligations"). Accordingly, the Escrow Trustee now holds (or has the right to receive principal and interest on) the Governmental Obligations and $0.88 in uninvested cash. Section 3. Deposit to Escrow Fund Irrevocable. The deposit of the moneys and Governmental Obligations in the Escrow Fund shall constitute an irrevocable deposit of said moneys and Governmental Obligations exclusively for the benefit of the owners of the Prior Bonds, and such moneys and Governmental Obligations shall be held in escrow and shall be applied solely to the payment of the principal of and interest on the Prior Bonds through and including the Redemption Date. Subject to the requirements set forth herein for the use of the Escrow Fund and the moneys therein, the City covenants and agrees that the Escrow Trustee shall have full and complete control and authority over and with respect to the Escrow Fund and the moneys and Governmental Obligations deposited therein. Section 4. Use of Moneys. The Escrow Trustee shall apply the moneys and Governmental Obligations deposited in the Escrow Fund, together with any interest or income earned thereon, in accordance with the provisions hereof. The Escrow Trustee shall withdraw from the Escrow Fund immediately available funds for application to the payment of the principal of and interest on the Prior Bonds in the amounts and at the times necessary in accordance with Schedule 1 attached hereto. Schedule 3 attached hereto shows the availability and application of moneys in the Escrow Fund necessary to meet the requirements set forth in Section 1. The Escrow Trustee shall not sell, transfer, otherwise dispose of or cause to be redeemed prior to maturity, any Government Obligations, except as authorized by Section 5 hereof. The Escrow Trustee shall make no further investment or reinvestment except as expressly authorized by Section 5. The liability of the Escrow Trustee for the payment of the amounts to be paid hereunder shall be limited to the moneys available for such purposes in the Escrow Fund. 4845-6212-5341.4 2 Subject to the provisions of Section 5 hereof, any amounts held as cash in the Escrow Fund shall be held in cash without any investment thereof, not as a deposit with any bank or other depository. The Escrow Trustee shall not have any duty with respect to calculating or verifying the mathematical sufficiency of the moneys in the Escrow Fund to be utilized to pay the principal of, redemption premium and interest on the Prior Bonds as the same shall become due and payable. Section 5. Investment of Escrow Fund Moneys. (a) The Escrow Trustee may from time to time sell, cause the redemption of, or otherwise dispose of any Government Obligations in the Escrow Fund upon the substitution of other direct or fully guaranteed and noncallable obligations of the United States of America, provided: (1) The Escrow Trustee shall have previously obtained an opinion of an independent certified public accountant that the substitution will not adversely affect the availability of moneys in the Escrow Fund at times and in amounts sufficient to meet the required payments on the Prior Bonds provided in Schedule 1 attached hereto; and (2) The Escrow Trustee shall receive an unqualified opinion of recognized attorneys in the field of tax-exempt municipal bonds to the effect that, if such substitution had been reasonably expected on the date of issuance of the Prior Bonds, such substitution would not have caused any of the Prior Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations of the U.S. Treasury thereunder proposed or in effect at the time of such substitution and applicable to obligations issued on the date of issuance of the Prior Bonds, so as to adversely affect the exemption from Federal income taxation of the interest on the Prior Bonds or the Refunding Bonds; and (3) The City shall have given the Escrow Trustee its written consent to the substitution. All substituted obligations shall become a part of the Escrow Fund and shall be "Government Obligations" for all purposes of this Agreement. (b) Notwithstanding any other provision of this Agreement, the City and the Escrow Trustee hereby covenant that no part of the proceeds of the moneys in the Escrow Fund shall be used, at any time, directly or indirectly, in such a manner which, if such use had been reasonably anticipated on the date of issuance of the Refunding Bonds, would have caused any of the Refunding Bonds to be an "arbitrage bond" under Section 148 of the Code and the regulations of the U.S. Treasury thereunder proposed or in effect at the time of such use and applicable to obligations issued on the date of issuance of the Refunding Bonds. Section 6. Redemption and Defeasance. (a) The City hereby calls the Prior Bonds for redemption prior to maturity on December 22, 2014. The instructions to the Escrow Trustee to redeem the Prior Bonds on December 22, 2014 are hereby declared to be irrevocable. (b) The Escrow Trustee is hereby irrevocably instructed to give notice of the call for redemption to all registered owners of the Prior Bonds. Such notice shall be given by first class mail, postage prepaid, in the form attached hereto as Exhibit A, at least thirty (30) days prior to 4845-6212-5341.4 3 the redemption date. The City will be responsible for any out-of-pocket expenses incurred in connection with this Section 6(b) from moneys other than those in the Escrow Fund. Section 7. Remaining Moneys in Escrow Fund. Upon the retirement of the Prior Bonds, any amounts remaining in the Escrow Fund shall be deposited in the bond fund for the Refunding Bonds, free and clear of the trust created by the Prior Indenture and this Agreement. Section 8. Rights of Owners of Prior Bonds. The escrow created hereby shall be irrevocable and the owners of the Prior Bonds shall have a beneficial interest and a first, prior and paramount lien and claim on all moneys in the Escrow Fund until paid out, used and applied in accordance with this Agreement. Section 9. Fees of Escrow Trustee. In consideration of the services rendered by the Escrow Trustee under this Agreement, the City has made arrangements satisfactory to the Escrow Trustee for payment of its reasonable fees and expenses, and the Escrow Trustee hereby acknowledges that it shall have no lien whatsoever upon any moneys in the Escrow Fund for payment of such fees and expenses. The Escrow Trustee agrees to remain in office until all of the Prior Bonds have been redeemed. Except to the extent arising from their gross negligence or willful misconduct, the Escrow Trustee and its respective successors, assigns, agents and servants shall not be held to any liability whatsoever, in tort, contract or otherwise, in connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund, the acceptance of the moneys and Governmental Obligations deposited therein, or by reason of any act, omission or error of the Escrow Trustee made in good faith in the conduct of its duties. The Escrow Trustee makes no representations or warranties as to whether the Escrow Fund is adequate or sufficient to defease or redeem the Prior Bonds and shall not be responsible or liable for any inadequacy or insufficiency. The Escrow Trustee shall be entitled to the immunities, powers, privileges and protections set forth in the Prior Indenture for the benefit of the Trustee as if set forth herein in their entirety. Section 10. Enforcement. The City and the owners of the Prior Bonds shall have the right to take all actions available under law or equity to enforce this Agreement or the terms hereof. Section 11. Successors Bound. All covenants, promises and agreements in this Agreement shall bind and inure to the benefit of the respective successors and assigns of the City, the Escrow Trustee and the owners of the Prior Bonds, whether so expressed or not. Section 12. Arkansas Law Governing. This Agreement shall be governed by the applicable laws of the State of Arkansas. Section 13. Termination. This Agreement shall terminate when all of the Prior Bonds have been paid as aforesaid and any remaining moneys have been transferred as provided in Section 7 hereof. 4845-6212-5341.4 4 Section 14. Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the City or the Escrow Trustee to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. Section 15. Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be one and the same instrument. Section 16. No Recourse Against City Officers and Employees. No recourse shall be had for the payment of the principal of or interest on any of the Prior Bonds or for any claim based thereon or upon any obligation, covenant or agreement in this Agreement contained against any past, present or future officer, member, alderman or employee of the City or of 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 officers, members, aldermen or employees, as such, is hereby expressly waived and released as a condition of and consideration for the execution of this Agreement. Section 17. Notices. Unless otherwise provided, any notice, demand, direction, request or other instrument authorized or required by this Agreement to be given to or filed with the City or the Escrow Trustee shall be in writing and shall be addressed as follows: To the City: City of Fayetteville, Arkansas 113 West Mountain Fayetteville, Arkansas 72701 Attention: Finance & Internal Services Director To the Escrow Trustee: BOKF, NA dba Bank of Oklahoma P.O. Box 2300 Tulsa, OK 74192 Attention: Cynthia Wilkinson 4845-6212-5341.4 5 IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized officers as of the date first above written. CITY OF F ,AYETTEVILLE, ARKANSAS BOKF, NA By: _ Title: [SIGNATURE PAGE TO ESCROW AGREEMENT] 4845-6212-5341.4 IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized officers as of the date first above written. CITY OF FAYETTEVILLE, ARKANSAS 0 Mayor BOKF,NA By: Title: Se or Vice President and Trust Officer [SIGNATURE PAGE TO ESCROW AGREEMENT] 4845-6212-5341.4 SCHEDULEI REQUIREMENTS TO PAY AND REDEEM THE PRIOR BONDS Principal Redemption Payment Date Principal Due Redeemed Premium 12-22-14 $ -0- $ 650,000.00 $ -0- S-1 4845-6212-5341.4 Interest Due $5,191.88 Total Due $655,191.88 SCHEDULE2 DESCRIPTION OF GOVERNMENT OBLIGATIONS Tvpe U.S. Treasury Securities - SLGS Maturity Date Principal Amount Coupon Rate 12/22/14 S-2 4845-6212-5341.4 $655,191.00 0.00% SCHEDULE3 SCHEDULE OF AVAILABILITY AND APPLICATION OF ESCROW FUND Cash Balance at Receipts from Debt Service Requirement Cash Balance at Period Endimp Beginning of Period Government Obli atn ions to Retire Prior Bonds End of Period 11-19-14 $ - $ .00 $ - $0.88 12-22-14 $0.88 $655,191.00 $ 655,191.88 $0.00 S-3 4845-6212-5341.4 1W4soI1.11W.1 NOTICE OF REDEMPTION City of Fayetteville, Arkansas Hotel and Restaurant Gross Receipts Tax Refunding Bonds Series 2003 NOTICE IS HEREBY GIVEN by BOKF, NA, Tulsa, Oklahoma, the trustee (the "Trustee") for the Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003, of the City of Fayetteville, Arkansas (the "City"), dated July 1, 2003 (the "Bonds"), that all of the outstanding Bonds are hereby called for redemption and prepayment on December 22, 2014. The outstanding Bonds called for redemption mature, bear interest and have been assigned CUSIP numbers as follows: Maturity Date (October 1) 2015 Principal Amount Interest Rate $ 650,000 3.55% CUSIP 312664 BN4 No representation is made as to the accuracy of the CUSIP number set forth above, and the redemption of the Bonds shall not be affected by any defect in or omission of such number. Each of the Bonds so called for redemption and prepayment shall be redeemed and prepaid at a redemption price of 100.0% of the principal amount thereof plus accrued interest to the date of redemption. The Bonds shall cease to bear interest as of December 22, 2014. The Bonds so called for redemption shall be payable at the corporate trust office of the Trustee and shall be presented as follows: If by Mail: BOKF, NA, dba Bank of Oklahoma P.O. Box 64106 St. Paul, MN 55164-0105 If by Overnight Mail: BOKF, NA, dba Bank of Oklahoma Corporate Trust Services 111 Fillmore Ave. E St. Paul, MN 55107 Withholding of 30% of gross redemption proceeds of any payment made within the United States may be required by the Economic Growth and Tax Relief Reconciliation Act of 2001, unless the paying agent has the correct taxpayer identification number (social security or taxpayer identification number) or exemption certificate or equivalent when presenting your securities for payment. Dated this day of November, 2014. BOKF, NA, as Trustee Instructions: Mail by first class mail, postage prepaid to the registered owner of each Bond to be redeemed, addressed to such registered owner at the owner's registered address, and placed in the mails no later than November 22, 2014. A- 1 4845-6212-5341.4 EXECUTION COPY CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement (this "Disclosure Agreement") is executed and delivered by the City of Fayetteville, Arkansas (the "City"), and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, a national banking association, as dissemination agent (the "Dissemination Agent'), in connection with the issuance of $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Bonds"). The Bonds are being issued pursuant to the terns and provisions of a Trust Indenture dated as of November 1, 2014 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"). In connection with the issuance and delivery of the Bonds, the City and the Dissemination Agent covenant and agree as follows: Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the City and the Dissemination Agent for the benefit of the Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with SEC Rule 15c2 -12(b)(5) (the "Rule"). The City is an "obligated person" within the meaning of the Rule. The Dissemination Agent shall have no liability with respect to the content of any disclosure provided hereunder, and shall be liable only to the City for sending notices hereunder. As required by the Rule, this Disclosure Agreement is enforceable by Beneficial Owners of the Bonds pursuant to Section 7 hereof. Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings: "Annual Financial Information" means the financial information and operating data described in Exhibit I. "Annual Financial Information Disclosure" means the dissemination of disclosure concerning Annual Financial Information and the dissemination of the Audited Financial Statements as set forth in Section 4. "Audited Financial Statements" means the audited consolidated financial statements of the City, prepared pursuant to the standards and as described in Exhibit I. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Commission" means the U.S. Securities and Exchange Commission. "Dissemination Agent" shall mean Simmons First Trust Company, N.A., Pine Bluff, Arkansas, acting in its capacity as a dissemination agent hereunder, or any successor dissemination agent designated in writing by the City and which has filed with the Trustee a written acceptance of such designation. 4827-33584157.2 "EMMA" means the Electronic Municipal Market Access facility for municipal securities disclosure of the MSRB. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Material Event" means the occurrence of any of the events with respect to the Bonds set forth in Exhibit H. "Material Events Disclosure" means dissemination of a notice of a Material Event as set forth in Section 5. "MSRB" shall mean the Municipal Securities Rulemaking Board established in accordance with the provisions of Section 15B(b)(1) of the 1934 Act. "Participating Underwriter" means each broker, dealer or municipal securities dealer acting as an underwriter in any primary offering of the Bonds. "Prescribed Form" means, with regard to the filing of Annual Financial Information, Audited Financial Statements and notices of Material Events with the MSRB at www.emma.msrb.org (or such other address or addresses as the MSRB may from time to time specify), such electronic format, accompanied by such identifying information, as shall have been prescribed by the MSRB and which shall be in effect on the date of filing of such information. "Rule" shall mean Rule 15c2 -12(b)(5) adopted by the Securities and Exchange Commission ("SEC") under the Exchange Act, as the same may be amended from time to time. "State" means the State of Arkansas. "Tax" shall mean the one percent (I%) tax levied by the City pursuant to Ordinance No. 2310 adopted by the City on March 1, 1977, as subsequently amended, upon (i) the gross receipts or gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses from the sale of prepared food and beverages for on -premises or off -premises consumption. "Tax Receipts" shall mean receipts derived by the City from the levy of the Tax. "Undertaking" means the obligations of the City pursuant to Sections 4 and 5. Section 3. CUSIP Number/Final Official Statement. The CUSIP Number of the final maturity of the Bonds is 312665 APT The final Official Statement relating to the Bonds is dated October 28, 2014 (the "Final Official Statement"). Section 4. Annual Financial Information Disclosure. Subject to Section 9 of this Disclosure Agreement, the City hereby covenants that it will disseminate, or will cause the 2 4827-3358-4157.2 Dissemination Agent to disseminate, the Annual Financial Information and the Audited Financial Statements (in the form and by the dates set forth below and in Exhibit I) by delivering such Annual Financial Information and the Audited Financial Statements to the MSRB within 180 days of the completion of the fiscal year of the City. The City is required to deliver or cause delivery of such information in Prescribed Form and by such time so that such entities receive the information by the dates specified. If any part of the Annual Financial Information can no longer be generated because the operations to which it is related have been materially changed or discontinued, the City will disseminate or cause dissemination of a statement to such effect as part of its Annual Financial Information for the year in which such event first occurs. If any amendment is made to this Disclosure Agreement, the Annual Financial Information for the year in which such amendment is made (or in any notice or supplement provided to the MSRB) shall contain a narrative description of the reasons for such amendment and its impact on the type of information being provided. Section 5. Material Events Disclosure. Subject to Section 9 of this Disclosure Agreement, the City hereby covenants that it will disseminate or cause dissemination in a timely manner, not in excess of ten (10) business days after the occurrence of the event, Material Events Disclosure to the MSRB in Prescribed Form. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Bonds or defeasance of any Bonds need not be given under this Disclosure Agreement any earlier than the notice (if any) of such redemption or defeasance is given to the owners of the Bonds pursuant to the Indenture. The City is required to deliver or cause delivery of such Material Events Disclosure in the same manner as provided by Section 4 of this Disclosure Agreement. Section 6. Duty to Update EMMA/MSRB. The Dissemination Agent shall determine, in the manner it deems appropriate, whether there has occurred a change in the MSRB's e-mail address or filing procedures and requirements under EMMA each time it is required to file information with the MSRB. Section 7. Consequences of Failure of the City to Provide Information. The City shall give notice in a timely manner or shall cause such notice to be given by the Dissemination Agent, not in excess of ten (10) business days after the occurrence of the event, to the MSRB in Prescribed Form of any failure to provide Annual Financial Information Disclosure when the same is due hereunder. In the event of a failure of the City to comply with any provision of this Disclosure Agreement, the Trustee may (and at the request of a Participating Underwriter or the Beneficial Owners of at least 25% in aggregate outstanding principal amount of the Bonds, shall) or the Beneficial Owner of any Bond may seek specific performance by court order to cause the City to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture or any other agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the City or 3 4827-33584157.2 the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance. Section 8. Amendments; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the City and the Dissemination Agent may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, if - (i) The amendment or waiver is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the City or the type of business conducted; (ii) This Disclosure Agreement, as amended, or the provision, as waived, would have complied with the requirements of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; (iii) The amendment or waiver does not materially impair the interests of the Beneficial Owners of the Bonds, as determined either by parties unaffiliated with the City (such as the Trustee) or by an approving vote of the Beneficial Owners of the Bonds holding a majority of the aggregate principal amount of the Bonds (excluding Bonds held by or on behalf of the City or its affiliates) pursuant to the terms of the Indenture at the time of the amendment; or (iv) The amendment or waiver is otherwise permitted by the Rule. Section 9. Termination of Undertaking. The Undertaking of the City shall be terminated hereunder when the City shall no longer have any legal liability for any obligation on or relating to the repayment of the Bonds. The City shall give notice to the MSRB, or shall cause the Dissemination Agent to give notice, in a timely manner and in Prescribed Form if this Section is applicable. Section 10. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out their obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. A Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Disclosure Agreement. If at any time there is not any other designated Dissemination Agent, the Trustee shall be the Dissemination Agent for the City. Section 11. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Financial Information Disclosure or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Agreement. If the City chooses to include any information from any document or notice of occurrence of a Material Event in addition to that which is specifically required by this Disclosure Agreement, the City shall not have any obligation under this Disclosure Agreement to 4 4827-3358-4157.2 update such information or include it in any future disclosure or notice of the occurrence of a Material Event. Section 12. Beneficiaries. This Disclosure Agreement has been executed in order to assist the Participating Underwriter in complying with the Rule; however, this Disclosure Agreement shall inure solely to the benefit of the City, the Dissemination Agent, if any, the Trustee and the Beneficial Owners of the Bonds, and shall create no rights in any other person or entity. Section 13. Recordkeeping. The City and the Dissemination Agent shall maintain records of all Annual Financial Information Disclosure and Material Events Disclosure, including the content of such disclosure, the names of the entities with whom such disclosure was filed and the date of filing such disclosure. Section 14. Past Compliance. The City is a party to multiple prior undertakings pursuant to the Rule. Except as set forth in the Official Statement for the Bonds under the caption "SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT," the City has, to the best of its knowledge, for the past five years, been in compliance in all material respects with the provisions in such undertakings to which it is a party requiring that it file certain financial information and financial statements and certain listed events with the MSRB. Section 15. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent (if other than the Trustee or the Trustee in its capacity as Dissemination Agent) shall have only such duties as are specifically set forth in this Disclosure Agreement, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise of performance of its powers and duties under this Disclosure Agreement, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's gross negligence or willful misconduct. Such indemnification obligations of the City shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Section 16. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 5 4827-3358-4157.2 Section 17. Governing Law. This Disclosure Agreement shall be governed by and construed in accordance with the laws of the State, provided that to the extent this Disclosure Agreement addresses matters of federal securities laws, including the Rule, this Disclosure Agreement shall be construed in accordance with such federal securities laws and official interpretations thereof. Dated: November 19, 2014 SIMMONS FIRST TRUST COMPANY, N.A., as Dissemination Agent By: Title. Vice President & Corporate Trust Officer 6 4827-3358-4157.2 EXHIBIT I ANNUAL FINANCIAL INFORMATION AND TIMING AND AUDITED FINANCIAL STATEMENTS "Annual Financial Information" means the Tax Receipts for the latest Fiscal Year and for the four previous Fiscal Years. All or a portion of the Annual Financial Information and the Audited Financial Statements as set forth below may be included by reference to other documents which have been submitted to the MSRB or filed with the Commission. The City shall clearly identify each such item of information included by reference. Annual Financial Information will be provided to the MSRB within 180 days after the last day of the City's fiscal year. Audited Financial Statements as described below should be filed at the same time as the Annual Financial Information. If Audited Financial Statements are not available when the Annual Financial Information is filed, unaudited financial statements shall be included, and Audited Financial Statements will be provided to the MSRB within ten (10) business days after availability to the City. Audited Financial Statements will be prepared in accordance with generally accepted accounting principles in the United States as in effect from time to time. If any change is made to the Annual Financial Information as permitted by Section 4 of the Disclosure Agreement, including for this purpose a change made to the fiscal year-end of the City, the City will disseminate a notice to the MSRB of such change in Prescribed Form as required by such Section 4. I-1 4827-3358-4157.2 EXHIBIT II EVENTS WITH RESPECT TO THE BONDS FOR WHICH MATERIAL EVENTS DISCLOSURE IS REQUIRED 1. Principal and interest payment delinquencies 2. Nonpayment -related defaults, if material 3. Unscheduled draws on debt service reserves reflecting financial difficulties 4. Unscheduled draws on credit enhancements reflecting financial difficulties 5. Substitution of credit or liquidity providers, or their failure to perform 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability,. Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security 7. Modifications to rights of security holders, if material 8. Bond calls, if material, and tender offers 9. Defeasances 10. Release, substitution or sale of property securing repayment of the securities, if material 11. Rating changes 12. Bankruptcy, insolvency, receivership or similar event of the City` 13. The consummation of a merger, consolidation or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material This event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. II -1 4827-3358-4157.2 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-1 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE REGISTERED $295,000 CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 2.000% Maturity Date: November 1, 2015 Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. CUSIP: 312665 AAO Principal Amount: TWO HUNDRED NINETY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 COPY Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (`DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-2 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 2.000% Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. REGISTERED $300,000 Maturity Date: November 1, 2016 Principal Amount: THREE HUNDRED THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: CUSIP: 312665 A138 That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (`DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-3 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 2.000% Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. REGISTERED $310,000 Maturity Date: November 1, 2017 Principal Amount: THREE HUNDRED TEN THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: CUSIP: 312665 AC6 That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (`DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-4 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 2.000% Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. REGISTERED $315,000 Maturity Date: November 1, 2018 CUSIP: 312665 AD4 Principal Amount: THREE HUNDRED FIFTEEN THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (`DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-5 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 2.500% Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. REGISTERED $320,000 Maturity Date: November 1, 2019 CUSIP: 312665 AE2 Principal Amount: THREE HUNDRED TWENTY THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (`DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-6 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 2.750% Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. REGISTERED $330,000 Maturity Date: November 1, 2020 CUSIP: 312665 AF9 Principal Amount: THREE HUNDRED THIRTY THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-7 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 3.000% Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. REGISTERED $335,000 Maturity Date: November 1, 2021 CUSIP: 312665 AG7 Principal Amount: THREE HUNDRED THIRTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 Cy Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (`DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-8 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 3.000% Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. $345,000 Maturity Date: November 1, 2022 CUSIP: 312665 AH5 Principal Amount: THREE HUNDRED FORTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (`DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-9 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 3.000% Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. REGISTERED $355,000 Maturity Date: November 1, 2023 CUSIP: 312665 AJl Principal Amount: THREE HUNDRED FIFTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-33684000.1 C Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-10 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 3.000% Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. REGISTERED $370,000 Maturity Date: November 1, 2024 CUSIP: 312665 AK8 Principal Amount: THREE HUNDRED SEVENTY THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 COPY Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (`DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-11 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 3.000% Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. REGISTERED $380,000 Maturity Date: November 1, 2025 CUSIP: 312665 AL6 Principal Amount: THREE HUNDRED EIGHTY THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-12 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 4.000% Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. REGISTERED $1,655,000 Maturity Date: November 1, 2029 CUSIP: 312665 AM4 Principal Amount: ONE MILLION SIX HUNDRED FIFTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (`DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereoffor value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-13 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 5.000% Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. REGISTERED $2,525,000 Maturity Date: November 1, 2034 CUSIP: 312665 AN2 Principal Amount: TWO MILLION FIVE HUNDRED TWENTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 COPY Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (`DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R14-14 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE REGISTERED $3,145,000 CAPITAL IMPROVEMENT AND REFUNDING BOND SERIES 2014 Interest Rate: 3.750% Maturity Date: November 1, 2039 Date of Bond: November 1, 2014 Registered Owner: CEDE & CO. CUSIP: 312665 AP7 Principal Amount: THREE MILLION ONE HUNDRED FORTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on May 1 and November 1 of each year, commencing on the May 1 or November 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forth with respect to redemption of this bond prior to maturity may become applicable hereto. The principal of and premium, if any, on this bond are payable in lawful money of the United States of America upon the presentation and surrender hereof at the principal corporate trust office of Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor or successors, as trustee (the "Trustee"). So long as Cede & Co. or another nominee of DTC is the registered owner of this bond, payment of interest hereon shall be made by wire transfer of immediately available funds by the Trustee to the Registered Owner as of the fifteenth day of the calendar month preceding the calendar month in which such interest payment date shall fall (the "Record Date"). At any time thereafter, 4835-3368-4000.1 copy payment of interest hereon shall be made by check or draft of the Trustee to the Registered Owner as of the applicable Record Date, at the owner's address as it appears on the bond registration books of the City kept by the Trustee. This bond, designated "Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bond, Series 2014", is one of a series of bonds aggregating Ten Million Nine Hundred Eighty Thousand Dollars ($10,980,000) in principal amount (the "Series 2014 Bonds"). The Series 2014 Bonds are being issued for the purpose of (i) financing a portion of the costs of refunding the City's outstanding Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), (ii) financing a portion of the costs of acquisition, construction and equipping of a regional park (the "Park Project'), (iii) financing a portion of the costs of expansion and renovation of an arts center within the City (the "Walton Arts Center Project"), (iv) purchasing a policy of municipal bond insurance, (v) purchasing a debt service reserve insurance policy, and (vi) paying the costs of issuance of the Series 2014 Bonds. The Series 2014 Bonds are issued under and are secured by and entitled to the protection of a Trust Indenture dated as of November 1, 2014 (the "Indenture"), by and between the City and the Trustee, which Indenture is available for inspection at the principal corporate trust office of the Trustee. Reference is hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the City, the Trustee and the owners of the Series 2014 Bonds, and the terms upon which the Series 2014 Bonds are issued and secured. The Series 2014 Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas, including particularly, the Advertising and Promotion Commission Act, codified as Arkansas Code Annotated (2008 Repl. & 2013 Supp.) §§26-75-601 et seq. (as from time to time amended, the "Act"), and Ordinance No. 5713 of the City adopted September 16, 2014, which ordinance authorized the execution and delivery of the Indenture. In order to secure the repayment of the Series 2014 Bonds, the City has, in accordance with the Act, pledged all receipts from a one percent (1%) tax (the "Tax") levied by the City pursuant to Ordinance No. 2310 adopted by the City on March 1, 1977, as subsequently amended, upon (i) the gross receipts or gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive- in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store - restaurants, caterers and similar businesses from the sale of prepared food and beverages for on -premises or off -premises consumption. STATEMENT OF INSURANCE Build America Mutual Assurance Company ("BAM"), New York, New York, has delivered its municipal bond insurance policy (the "Policy") with respect to the scheduled payments due of principal and interest on this Bond to Simmons First Trust Company, N.A., Pine Bluff, Arkansas, or its successor, as trustee for the Series 2014 Bonds (the "Trustee"). Said Policy is on file and is available for inspection at the principal office of the Trustee and a copy thereof may be obtained from BAM or the Trustee. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. By its purchase of these Series 2 4835-3368-4000.1 ropy 2014 Bonds, the owner acknowledges and consents to the subrogation and all other rights of BAM as more fully set forth in the Policy. The Indenture provides that the City may hereafter issue Additional Bonds under certain terms and conditions contained in the Indenture and, if issued or incurred, such Additional Bonds will rank on a parity of security with the Series 2014 Bonds and be equally and ratably secured by and entitled to the protection of the Indenture. The Series 2014 Bonds are not general obligations of the City, but are special obligations secured by an irrevocable pledge of and lien on the Tax Receipts, as more particularly described in the Indenture. In no event shall the Series 2014 Bonds constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation. The holder of this Series 2014 Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Indenture, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture. In certain events, on the conditions, in the manner and with the effect set forth in the Indenture, the principal of all the Series 2014 Bonds and Additional Bonds, if any, issued under the Indenture and then outstanding may be declared and may become due and payable before the stated maturity thereof, together with accrued interest thereon. Modifications or alterations of the Indenture, or of any indenture supplemental thereto, may be made only to the extent and in the circumstances permitted by the Indenture. The Series 2014 Bonds are subject to redemption at the election of the City, on and after November 1, 2024, in whole or in part (in any order of maturities directed by the City, and by lot within a maturity) at any time, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. The Series 2014 Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from Projects Fund moneys in excess of the amount needed to complete the Park Project or Walton Arts Center Project or portion thereof being financed with the proceeds of the Series 2014 Bonds. The Series 2014 Bonds maturing on November 1, 2029, are subject to mandatory sinking fund redemption prior to maturity in part, on November 1 in the years and amounts set forth below at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption, without premium: Year Principal Amount 2026 $390,000 2027 $405,000 2028 $420,000 2029 (maturity) $440,000 The Series 2014 Bonds maturing on November 1, 2034, are subject to mandatory sinking fund redemption prior to maturity in part, on November 1 in the years and amounts set forth below at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption, without premium: 3 4835-3368-4000.1 Year 2030 2031 2032 2033 2034 (maturity) Principal Amount $455,000 $480,000 $505,000 $530,000 $555,000 The Series 2014 Bonds maturing on November 1, 2039, are subject to mandatory sinking fund redemption prior to maturity in part, on November 1 in the years and amounts set forth below at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption, without premium: Year 2035 2036 2037 2038 2039 (maturity) Principal Amount $585,000 $605,000 $630,000 $650,000 $675,000 At its option, to be exercised on or before the 45`h day next preceding any mandatory sinking fund redemption date for any Series 2014 Bonds, the City may deliver to the Trustee for cancellation Series 2014 Bonds of the appropriate maturity, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2014 Bond, or portion thereof, so delivered or previously redeemed (otherwise than through mandatory sinking fund redemption) and canceled by the Trustee shall be credited by the Trustee at 100% of the principal amount thereof on the obligation of the City on such mandatory sinking fund redemption date, and any excess over such amount shall be credited on future mandatory sinking fund redemption obligations of that maturity in chronological order, and the principal amount of such Series 2014 Bonds so to be redeemed shall be accordingly reduced. Notwithstanding the foregoing, so long as DTC or its nominee is the sole registered owner of the Series 2014 Bonds, the particular Series 2014 Bonds or portions thereof to be redeemed in part within a maturity shall be selected by lot by DTC in such manner as DTC shall determine. In selecting Series 2014 Bonds for redemption prior to maturity, in the case any outstanding Series 2014 Bond is in a denomination greater than $5,000, each $5,000 of face value of such Series 2014 Bond shall be treated as a separate Series 2014 Bond of the denomination of $5,000. In the event any of the Series 2014 Bonds or portions thereof (which shall be $5,000 or any integral multiple thereof) are called for redemption, notice thereof shall be given by the Trustee by first class mail to the registered owner of each such Series 2014 Bond addressed to such registered owner at his registered address and placed in the mails not less than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption; provided, however, that failure to give such notice by mailing, or any defect therein, shall not affect the validity of the proceedings for the redemption of any Series 2014 Bond with respect to which no such failure or defect has occurred. Each notice shall identify the Series 2014 Bonds or portions thereof being called, and the date on which they shall be presented for payment. After the date specified in such call notice, the Series 2014 Bond or Bonds so called for redemption will cease to bear interest provided funds sufficient for their redemption have been deposited with the Trustee, and, 0 4835-3368-4000.1 except for the purpose of payment, shall no longer be protected by the Indenture and shall not be deemed to be outstanding under the provisions of the Indenture. This Series 2014 Bond may be transferred on the books of registration kept by the Trustee by the registered owner or by his duly authorized attorney upon surrender hereof, together with a written instrument of transfer duly executed by the registered owner or his duly authorized attorney. The Series 2014 Bonds are issuable as registered bonds without coupons in denominations of $5,000 and any integral multiple thereof. Subject to the limitations and upon payment of the charges provided in the Indenture, Series 2014 Bonds may be exchanged for a like aggregate principal amount of Series 2014 Bonds of other authorized denominations. No recourse shall be had for the payment of the principal of or premium, if any, or interest on any of the Series 2014 Bonds or for any claim based thereon or upon any obligation, covenant or agreement contained in the Series 2014 Bonds or the Indenture against any past, present or future alderman, officer or employee of the City, or any successor, as such, either directly or through the City or any successor of the City, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such alderman, officer or employee as such is hereby expressly waived and released as a condition of and consideration for the issuance of any of the Series 2014 Bonds. This Series 2014 Bond is issued with the intent that the laws of the State of Arkansas will govern its construction. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of the Series 2014 Bonds do exist, have happened and have been performed in due time, form and manner as required by law; that the indebtedness represented by the Series 2014 Bonds, together with all obligations of the City, does not exceed any constitutional or statutory limitation; and that the revenues pledged to the payment of the principal of and premium, if any, and interest on the Series 2014 Bonds as the same become due and payable will be sufficient in amount for that purpose. This Series 2014 Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the Certificate of Authentication hereon shall have been signed by the Trustee. 5 4835-3368-4000.1 copy IN WITNESS WHEREOF, the City of Fayetteville, Arkansas has caused this Series 2014 Bond to be executed by its Mayor and City Clerk, thereunto duly authorized (by their manual or facsimile signatures), and its corporate seal to be affixed or imprinted hereon, all as of the date hereof shown above. ATTEST: By: wR City Clerk a•� `�'y p'':L�. (Form of Trustee's Certificate) TRUSTEE'S CERTIFICATE OF AUTHENTICATION This bond is one of the Series 2014 Bonds of the issue described in and issued under the provisions of the within mentioned Indenture. Attached hereto is the complete text of the opinion of Kutak Rock LLP, a signed original of which is on file with the undersigned, delivered and dated the date of the original delivery of and payment for the Series 2014 Bonds. SIMMONS FIRST TRUST COMPANY, N.A., as Trustee B6::: Authorized Signatur 6 4835-3368-4000.1 (Form of Assignment) COPY ASSIGNMENT FOR VALUE RECEIVED, , hereby sells, assigns, and transfers unto , the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints as attorney to transfer the within Bond on the books kept for registration thereof with full power of substitution in the premises. DATE: , 20 . Transferor GUARANTEED BY: NOTICE: Signature(s) must be guaranteed by an institution satisfactory to the Trustee or other transfer agent. 7 4835-3368-4000.1 BOND PURCHASE AGREEMENT October 28, 2014 City of Fayetteville City Administration Building 113 West Mountain Fayetteville, Arkansas 72701 EXECUTION COPY $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 Ladies and Gentlemen: On the basis of the representations, warranties and agreements and upon the terms and conditions contained herein, the undersigned, Stephens Inc. (the "Underwriter"), hereby offers to enter into this Bond Purchase Agreement (this `Bond Purchase Agreement") with the City of Fayetteville, Arkansas (the "City") which, upon your acceptance of this offer, will be binding upon you and upon the Underwriter. Terms not otherwise defined herein shall have the same meanings as set forth in the Indenture defined and described below. This offer is made subject to your acceptance of this Bond Purchase Agreement on or before midnight on October 28, 2014. 1. General. Upon the terns and conditions and in reliance upon the respective representations, warranties and covenants herein, the Underwriter hereby agrees to purchase from the City, and the City hereby agrees to sell to the Underwriter, all (but not less than all) of $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the `Bonds"), at the purchase price (the "Purchase Price") of $11,532,990.60 (equal to the par amount of the Bonds plus a net reoffering premium of $662,790.60 and less an underwriter's discount of $109,800.00), plus accrued interest, if any, from November 1, 2014, to the Closing Date (hereinafter defined). The Bonds shall be issued by the City pursuant to the provisions of the laws of the State of Arkansas, including, particularly, the Advertising and Promotion Commission Act, Arkansas Code Annotated (2008 Repl. & 2013 Supp.) §§26-75-601 et seq. (the "Act"). The Bonds will constitute special and limited obligations of the City, secured solely by and payable solely from (1) a pledge of and lien on the receipts from a one percent (1.00%) gross receipts tax (the "Tax") authorized under the Act and levied by the City pursuant to Ordinance No. 2310 of the City adopted on March 1, 1977, as subsequently amended (the "Levying Ordinance"), and (2) moneys or investments on deposit in the Bond Fund and the Debt Service Reserve Fund established by a Trust Indenture to be dated as of November 1, 2014 (the 4831-8672-1309.3 "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"), all as more particularly described in the Indenture. The Tax is levied upon (i) the gross receipts or gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants, caterers and similar businesses from the sale of prepared food and beverages for on -premises or off -premises consumption. The Bonds shall be issued and secured pursuant to Ordinance No. 5713 of the City Council of the City which was adopted on September 16, 2014 (the "Authorizing Ordinance"), and pursuant to the Indenture. The Bonds shall have the maturities and interest rates as set forth in Exhibit A hereto. The Bonds shall be subject to redemption as set forth in the Indenture and in the Official Statement (hereinafter defined). The proceeds of the Bonds will be utilized to finance (i) a portion of the costs of refunding the City's outstanding Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), (ii) a portion of the costs of expanding and renovating Walton Arts Center (the "Walton Arts Center Project"), (iii) a portion of the costs of acquiring, constructing and equipping a regional park (the "Park Project"), (iv) the payment of the premium for a policy of municipal bond insurance to be issued by Build America Mutual Assurance Company ("BAM"), (v) the payment of the premium for a policy of municipal debt service reserve insurance to be issued by BAM, and (vi) the payment of the costs of issuance of the Bonds. The issuance of the Bonds for each of the aforementioned purposes was approved by a majority of the qualified electors of the City at a special election held November 12, 2013, pursuant to Ordinance No. 5605 of the City Council adopted on August 6, 2013 (the `Election Ordinance"). A portion of the proceeds of the Bonds will be deposited with the BOKF, NA, Tulsa, Oklahoma, as escrow trustee (the "Escrow Trustee"), pursuant to the terms of an Escrow Deposit Agreement to be dated as of the date of delivery of the Bonds (the "Escrow Agreement"), by and between the City and the Escrow Trustee, and said proceeds will be utilized by the Escrow Trustee (along with other available moneys) to redeem the Series 2003 Bonds on December 22, 2014. The City will undertake, pursuant to a Continuing Disclosure Agreement to be dated as of the date of delivery of the Bonds (the "Continuing Disclosure Agreement"), to provide certain annual financial and operating information and notices of the occurrence of certain events, if material, as required by Section (b)(5)(i) of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (the "Rule"). A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement (each hereinafter defined). Except as set forth in the Preliminary Official Statement and the Official Statement under the caption "SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT", the City has not, during the immediately preceding fine years, failed to comply in any material respect with any of its previous undertakings pursuant to the Rule. 2 4831-8672-1309.3 In order to ensure compliance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code'), the City will enter into a Tax Regulatory Agreement dated as of the date of delivery of the Bonds (the "Tax Regulatory Agreement"). 2. Bona Fide Public Offering. The Underwriter agrees to make a bona fide public offering of all of the Bonds at the offering prices set forth on the inside cover of the final Official Statement described below. 3. Delivery of Official Statement. (a) The City has previously provided the Underwriter with copies of its Preliminary Official Statement, including the cover page and the appendix thereto, dated October 20, 2014, relating to the Bonds (the "Preliminary Official Statement"). As of its date, the Preliminary Official Statement is "deemed final" by the City for purposes of SEC Rule 15c2 -12(b)(1). The Preliminary Official Statement, as amended to conform to the terms of this Bond Purchase Agreement, including Exhibit A hereto, and with such other changes and amendments as are mutually agreed to by the City and the Underwriter, is herein referred to as the "Official Statement." (b) The City agrees to deliver to the Underwriter, at such address as the Underwriter shall specify, as many copies of the final Official Statement dated October 28, 2014, relating to the Bonds as the Underwriter shall reasonably request as necessary to comply with paragraph (b)(4) of the Rule (as defined above) and with Rule G-32 and all other applicable rules of the Municipal Securities Rulemaking Board. The City agrees to deliver such final Official Statement within seven (7) business days after the execution hereof. (c) The City hereby authorizes and approves the Preliminary Official Statement and the final Official Statement, consents to their distribution and use by the Underwriter and authorizes the execution of the final Official Statement by a duly authorized officer of the City. (d) The Underwriter shall give notice to the City on the date after which no participating underwriter, as such term is defined in the Rule, remains obligated to deliver final Official Statements pursuant to paragraph (b)(4) of the Rule. 4. City's Representation and Warranties. The City represents and warrants to the Underwriter that: (a) The City is a duly organized and existing political subdivision under the Constitution and laws of the State of Arkansas (the "State"). The City is authorized by the provisions of the Act to issue the Bonds for the purpose of financing a portion of the costs of refunding the Series 2003 Bonds and completing the Walton Arts Center Project and the Park Project. (b) The City has the full legal right, power and authority (i) to adopt the Levying Ordinance levying the Tax, (ii) to adopt the Election Ordinance calling a special election on the issuance of the Bonds, (iii) to adopt the Authorizing Ordinance authorizing the issuance of and sale of the Bonds, (iv) to enter into this Bond Purchase Agreement, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement 3 4831-8672-1309.3 and the Tax Regulatory Agreement, (v) to levy the Tax, (vi) to issue, sell and deliver the Bonds to the Underwriter as provided herein, (vii) to pledge irrevocably the Tax Receipts to the payment of the principal of, premium, if any, and interest on the Bonds, and (viii) to carry out and consummate all other transactions contemplated by each of the aforesaid documents, and the City has complied with all provisions of applicable law, including the Act, in all matters relating to such transactions. (c) The City has duly authorized all actions necessary under the Act or otherwise to be taken by it or on its behalf for (i) the pledge of the Tax Receipts as set forth in the Indenture and as described in the Official Statement, (ii) the execution and delivery of the Bonds and the execution, delivery and due performance of this Bond Purchase Agreement, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement and the Tax Regulatory Agreement, (iii) the distribution and use of the Preliminary Official Statement and the execution, delivery and distribution of the final Official Statement, and (iv) the taking of any and all such actions as may be required on the part of the City to carry out, give effect to and consummate the transactions contemplated by such instruments. All consents or approvals necessary to be obtained by the City in connection with the foregoing have been received, and the consents or approvals so received remain still in full force and effect. (d) The Levying Ordinance, the Election Ordinance and the Authorizing Ordinance have been duly adopted by governing body of the City, are each in full force and effect and each constitutes the legal, valid and binding act of the City; and this Bond Purchase Agreement, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement and the Tax Regulatory Agreement, when executed and delivered, will constitute legal, valid and binding obligations of the City, and this Bond Purchase Agreement, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement and the Tax Regulatory Agreement are enforceable against the City in accordance with their respective terns, except as enforceability thereof may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally. (e) When delivered to or at the direction of the Underwriter, the Bonds will have been duly authorized, executed, authenticated, issued and delivered and will constitute legal, valid and binding obligations of the City in conformity with the laws of the State of Arkansas, including the Act, and will be entitled to the benefit and security of the Authorizing Ordinance and the Indenture. (f) The City has duly approved and authorized the distribution and use of the Preliminary Official Statement and the execution, delivery and distribution of the Official Statement. (g) The information contained in the Preliminary Official Statement is, and as of the Closing Date such information in the final Official Statement will be, true and correct in all material respects, and the Preliminary Official Statement does not and the final Official Statement will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 4 4831-8672-1309.3 (h) If, at any time prior to the earlier of (i) receipt of notice from the Underwriter pursuant to Section 3(d) hereof that Official Statements are no longer required to be delivered under the Rule or (ii) 25 days after the Closing Date, any event occurs as a result of which the Official Statement, as then amended or supplemented, might include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the City shall promptly notify the Underwriter in writing of such event. Any information supplied by the City for inclusion in any amendments or supplements to the Official Statement will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Upon the request of the Underwriter therefor, the City shall prepare and deliver to the Underwriter, at the City's expense, as many copies of an amendment or supplement to the Official Statement which will correct any untrue statement or omission therein as the Underwriter may reasonably request. (i) Neither the adoption of the Authorizing Ordinance, the Election Ordinance or the Levying Ordinance, the execution and delivery of this Bond Purchase Agreement, the Bonds, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement or the Tax Regulatory Agreement, nor the consummation of the transactions contemplated herein or therein or the compliance with the provisions hereof or thereof will conflict with, or constitute on the part of the City a violation of, or a breach of or default under, (i) any statute, indenture, mortgage, commitment, note or other agreement or instrument to which the City is a party or by which it is bound, (ii) any provision of the Constitution of the State of Arkansas, or (iii) any existing law, rule, regulation, ordinance, judgment, order or decree to which the City (or the members of its City Council or any of its officers in their respective capacities as such) is subject. All consents, approvals, authorizations and orders of governmental or regulatory authorities, if any, which are required for the City's execution and delivery of, consummation of the transactions contemplated by, and compliance with the provisions of this Bond Purchase Agreement, the Authorizing Ordinance, the Election Ordinance, the Levying Ordinance, the Bonds, the Escrow Agreement, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement have been obtained. (j) Except as is specifically disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending or, to the best knowledge of the City, threatened, which in any way questions the powers of the City referred to in subparagraph 4(b) above, or the validity of any proceeding taken by the City in connection with the issuance of the Bonds, the levy of the Tax or the pledge of the Tax Receipts, or wherein an unfavorable decision, ruling or finding could materially adversely affect the transactions contemplated by this Bond Purchase Agreement, or of any other document or instrument required or contemplated by the Bond financing, or which, in any way, could adversely affect the validity or enforceability of the Authorizing Ordinance, the Levying Ordinance, the Bonds, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement, the Tax Regulatory Agreement or this Bond Purchase Agreement or, to the knowledge of the City, which in any way questions the exclusion from gross income of the recipients 5 4831-8672-1309.3 thereof of the interest on the Bonds for federal income tax purposes or in any other way questions the status of the Bonds under federal or State of Arkansas tax laws or regulations. (k) Any certificate signed by any official of the City and delivered to the Underwriter shall be deemed a representation and warranty by the City to the Underwriter as to the truth of the statements therein contained. (1) The City has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon. (m) The collection history with respect to the Tax Receipts as set forth in the Preliminary Official Statement under the caption entitled "SECURITY FOR THE BONDS" is fair, accurate and complete. (n) The City will not knowingly take or omit to take any action, which action or omission will in any way cause the proceeds from the sale of the Bonds to be applied in a manner other than as provided in the Indenture, or which would cause the interest on the Bonds to be includable in gross income for federal income tax purposes. 5. City's Covenants. The City covenants with the Underwriter as follows: (a) The City will cooperate with the Underwriter in qualifying the Bonds for offer and sale under the securities or Blue Sky laws of such jurisdictions of the United States as the Underwriter may request; provided, however, that the City shall not be required to consent to suit or to service of process in any jurisdiction. The City consents to the use by the Underwriter in the course of its compliance with the securities or Blue Sky laws of the various jurisdictions of the documents relating to the Bonds, subject to the right of the City to withdraw such consent for cause by written notice to the Underwriter. (b) Prior to the earlier of (i) receipt of notice from the Underwriter pursuant to Section 3(d) hereof that final Official Statements are no longer required under the Rule or (ii) 25 days after the Closing Date, the City shall provide the Underwriter with such information regarding the City, the Tax Receipts, and the current financial condition and ongoing operations of the City, all as the Underwriter may reasonably request. 6. Closing. At 10:00 a.m. Little Rock time on November 19, 2014, or at such other time and/or date as shall have been mutually agreed upon by the City and the Underwriter (the "Closing Date"), the City will deliver the Bonds, or cause the Bonds to be delivered, to or at the direction of the Underwriter, said Bonds to be in definitive form duly executed by the City and authenticated by the Trustee, together with the other documents hereinafter mentioned; and the Underwriter will accept such delivery and pay the Purchase Price of the Bonds by making a wire transfer of federal funds payable to the order of the Trustee for the account of the City. The Bonds shall be delivered to The Depository Trust Company in New York, New York, and the activities relating to the final execution and delivery of the Authorizing 6 4831-8672-1309.3 Ordinance, the Election Ordinance, the Levying Ordinance, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement and the Tax Regulatory Agreement and the other documents related to the Bonds and the payment for the Bonds and the delivery of the certificates, opinions and other instruments as described in Section 8 of this Bond Purchase Agreement shall occur in the offices of Kutak Rock LLP, 124 West Capitol Avenue, Suite 2000, Little Rock, Arkansas ("Bond Counsel") or at such other place as shall have been mutually agreed upon between the City and the Underwriter. The payment for the Bonds and simultaneous delivery of the Bonds to or at the direction of the Underwriter is herein referred to as the "Closing." 7. Underwriter's Right to Cancel. The Underwriter shall have the right to cancel its obligation to purchase the Bonds hereunder by notifying the City in writing or by telegram of its election to do so between the date hereof and the Closing, if at any time hereafter and prior to the Closing: (i) the House of Representatives or the Senate of the Congress of the United States, or a cormnittee of either, shall have pending before it, or shall have passed or recommended favorably, legislation introduced previous to the date hereof, which legislation, if enacted in its form as introduced or as amended, would have the purpose or effect of imposing federal income taxation upon revenues or other income of the general character to be derived by the City or by any similar body under the Authorizing Ordinance or the Indenture or similar documents or upon interest received on obligations of the general character of the Bonds or the Bonds, or of causing interest on obligations of the general character of the Bonds, or the Bonds, to be includable in gross income for purposes of federal income taxation, and such legislation, in the Underwriter's opinion, materially adversely affects the market price of the Bonds; or (ii) a tentative decision with respect to legislation shall be reached by a committee of the House of Representatives or the Senate of the Congress of the United States, or legislation shall be favorably reported or rereported by such a committee or be introduced, by amendment or otherwise, in or be passed by the House of Representatives or the Senate, or recommended to the Congress of the United States for passage by the President of the United States, or be enacted or a decision by a federal court of the United States or the United States Tax Court shall have been rendered, or a ruling, release, order, regulation or official statement by or on behalf of the United States Treasury Department, the Internal Revenue Service or other govennnental agency shall have been made or proposed to be made having the purpose or effect, or any other action or event shall have occurred which has the purpose or effect, directly or indirectly, of adversely affecting the federal income tax consequences of owning the Bonds or of any of the transactions contemplated in connection herewith, including causing interest on the Bonds to be included in gross income for purposes of federal income taxation, or imposing federal income taxation upon revenues or other income of the general character to be derived by the City or by any similar body under the Authorizing Ordinance or the Indenture or similar documents or upon interest received on obligations of the general character of the Bonds, or the Bonds which, in the opinion of the Underwriter, materially adversely affects the market price of or market for the Bonds; or 7 4831-8672-1309.3 (iii) legislation shall have been enacted, or actively considered for enactment with an effective date prior to the Closing, or a decision by a court of the United States shall have been rendered, the effect of which is that the Bonds, including any underlying obligations, or the Indenture, as the case may be, is not exempt from the registration, qualification or other requirements of the Securities Exchange Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or (iv) a stop order, ruling, regulation or official statement by the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall have been issued or made or any other event occurs, the effect of which is that the issuance, offering or sale of the Bonds, including any underlying obligations, or the execution and delivery of the Indenture as contemplated hereby or by the Official Statement, is or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or (v) any event shall have occurred or any infonnation shall have become known to the Underwriter which causes the Underwriter to reasonably believe that the Official Statement as then amended or supplernented includes an untrue statement of a material fact, or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (vi) there shall have occurred any outbreak of hostilities or any national or international calamity or crisis, including a financial crisis, the effect of which on the financial markets of the United States is such as, in the reasonable judgment of the Underwriter, would materially adversely affect the market for or market price of the Bonds; or (vii) there shall be in force a general suspension of trading on the New York Stock Exchange, the effect of which on the financial markets of the United States is such as, in the reasonable judgment of the Underwriter, would materially adversely affect the market for or market price of the Bonds; or (viii) a general banking moratorium shall have been declared by federal, New York or State authorities; or (ix) any proceeding shall be pending or threatened by the Securities and Exchange Commission against the City; or (x) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; or (xi) the New York Stock Exchange or other national securities exchange, or any governmental authority, shall impose, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in 8 4831-8672-1309.3 force, with respect to the extension of credit by, or the charge to the net capital requirements of the Underwriter. 3. Conditions to Underwriter's Obligations. The obligation of the Underwriter to purchase the Bonds shall be subject (a) to the performance by the City of its obligations to be performed hereunder at and prior to the Closing, (b) to the accuracy of the representations and warranties of the City herein as of the date hereof and as of the time of the Closing, and (c) to the following conditions, including the delivery by the City of such documents as are enumerated herein in form and substance satisfactory to the Underwriter: (a) The Bonds shall have been duly authorized, executed and delivered in the form approved by the City in the Indenture with only such changes therein as the Underwriter and the City shall mutually agree upon, which shall in all instances be as described in the final Official Statement; (b) At the time of Closing, (i) the Official Statement, this Bond Purchase Agreement, the Indenture, the Escrow Agreement, the Authorizing Ordinance, the Levying Ordinance, the Continuing Disclosure Agreement and the Tax Regulatory Agreement shall be in full force and effect and shall not have been amended, modified or supplemented from the date hereof, except as may have been agreed to in writing by the Underwriter, (ii) the proceeds of the sale of the Bonds and other funds shall be deposited and applied as described in the Indenture and the Escrow Agreement, (iii) no default or event of default under the Indenture shall have occurred and be continuing, and (iv) no material adverse change affecting the City, the Tax or the Tax Receipts shall have occurred; (c) Receipt of fully executed originals of the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement and the Tax Regulatory Agreement at or prior to the Closing; (d) At or prior to the Closing, the Underwriter shall receive the following documents in such nnrnber of counterparts as shall be mutually agreeable to the Underwriter and Bond Counsel: (1) A final approving opinion of Bond Counsel, dated the Closing Date, in substantially the form set forth in Exhibit B hereto; (2) A supplemental opinion of Bond Counsel, addressed to the City, the Trustee and the Underwriter and dated the Closing Date, in substantially the form set forth in Exhibit C hereto; (3) The Official Statement executed by a duly authorized officer of the City; (4) Certified copies of the Authorizing Ordinance, the Election Ordinance and the Levying Ordinance and all other ordinances and resolutions of the City relating to the Bonds and the Tax; 9 4831-8672-1309.3 (5) Certified copies of the Notice of Election and Mayor's Proclamation of Election Results, together with the proofs of publication thereof; (6) Photocopies of the Bonds as executed and delivered; (7) A letter or letters from Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc., to the effect that the Bonds have been assigned a rating of not less than "AA" (stable outlook) based on the delivery of the Policy (defined below) and an underlying rating of "A+" (stable outlook), which ratings shall be in effect as of the Closing Date; (8) The Municipal Bond Insurance Policy (the "Policy") and the Debt Service Reserve Insurance Policy (the "Reserve Policy") issued by Build America Mutual Assurance Company ("BAM"), together with such supporting certificates of BAM and opinions of counsel to BAM as shall be satisfactory to Bond Counsel; (9) A certificate, in form and substance satisfactory to the Underwriter, of any duly authorized officer or official of the City satisfactory to the Underwriter, dated as of the Closing Date, to the effect that: (i) each of the City's representations, warranties and covenants contained herein are true and correct as of the Closing Date; (ii) the City has duly adopted the Authorizing Ordinance, the Election Ordinance and the Levying Ordinance by all action necessary under the Act and the laws of the State of Arkansas, and has duly authorized the execution, delivery and due performance of the Bonds, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement, the Tax Regulatory Agreement, the Official Statement and this Bond Purchase Agreement; (iii) no litigation is pending, or to the knowledge of the officer or official of the City signing the certificate after due investigation and inquiry, threatened, to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity of the Bonds, the Tax, the Official Statement, the Authorizing Ordinance, the Election Ordinance, the Levying Ordinance, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement, the Tax Regulatory Agreement or this Bond Purchase Agreement; (iv) the Bonds, the Indenture, the Escrow Agreement, this Bond Purchase Agreement, the Continuing Disclosure Agreement and the Tax Regulatory Agreement, as executed and delivered by the City, are in the form or in substantially the form approved for such execution by appropriate proceedings of the City; (v) neither the Authorizing Ordinance nor the Levying Ordinance have been amended, modified or repealed as of the Closing Date, and the Authorizing Ordinance and the Levying Ordinance remain in full force and effect; (vi) none of the proceedings of the City taken preliminary to the issuance of the Bonds, as certified in such certificate, including the levy of the Tax, have been in any manner repealed, amended or changed; (vii) the City has complied in all respects with the provisions of the Act and has full legal right, power and authority to levy the Tax, to pledge the Tax Receipts and to issue the Bonds for the purposes stated in the Act and to enter into this Bond Purchase Agreement, to adopt the 10 4831-8672-1309.3 Authorizing Ordinance, the Election Ordinance and the Levying Ordinance, to issue, sell and deliver the Bonds as provided in this Bond Purchase Agreement, and to carry out and consummate all other transactions contemplated by this Bond Purchase Agreement, the Authorizing Ordinance, the Election Ordinance, the Levying Ordinance, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement and the Tax Regulatory Agreement; (viii) neither the Official Statement nor any amendment or supplement thereto contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading; and (ix) to the best knowledge of the officer or official of the City signing the certificate, no event affecting the City or the Tax has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is used that is necessary to disclose therein in order to make the statements and information therein not misleading in any respect; (10) An opinion of Kit Williams, Esq., City Attorney, dated the Closing Date and addressed to the Underwriter, Bond Counsel and the Trustee, to the effect that (i) the City is a duly organized and validly existing political subdivision and city of the first class, organized under the laws of the State of Arkansas, with full power and authority to adopt the Authorizing Ordinance, the Election Ordinance and the Levying Ordinance, to levy the Tax, to pledge the Tax Receipts and to execute and deliver the Bonds, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement; (ii) the City has duly approved the Preliminary Official Statement and the Official Statement; (iii) the Authorizing Ordinance, the Election Ordinance and the Levying Ordinance have been duly adopted by the City by all action necessary under- the Act and the laws of the State of Arkansas, and each remains in full force and effect; (iv) the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement have been duly authorized, approved, executed and delivered by the City and, subject to the extent that the enforceability of the rights and remedies set forth therein may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally, constitute valid and binding agreements of the City enforceable in accordance with their terns; (v) the information in the Official Statement under the captions "THE REFUNDING PROGRAM," "THE PROJECTS," "THE CITY," "THE COMMISSION" and "LEGAL MATTERS" (apart from financial or statistical data contained or incorporated therein, as to which no view need be expressed) is fair, accurate and complete and does not omit any matter which, in such counsel's opinion, for the purposes for which the Official Statement is to be used, should be included or referred to therein; (vi) excepting those matters discussed in the Official Statement, there is no action, suit or proceeding at law or in equity before or by any court, public board or body, pending or threatened, against or affecting the City, challenging the validity of the transactions contemplated by the Official Statement or the validity of the Bonds, the Tax, the Authorizing Ordinance, the Election Ordinance, the Levying Ordinance, the 11 4831-8672-1309.3 Indenture, the Escrow Agreement, the Continuing Disclosure Agreement, the Tax Regulatory Agreement or this Bond Purchase Agreement and, to the best of such counsel's knowledge, there is no investigation, pending or threatened, and no threatened action, suit or proceeding involving any of the matters hereinabove mentioned in this clause (vi); (vii) the execution and delivery of the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement, and compliance with the provisions hereof and thereof, under the circumstances contemplated hereby and thereby, do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or any existing law, regulation, court order or consent decree to which the City is subject; and (viii) based upon the examinations which such counsel has made as counsel to the City, which shall be specified, nothing has come to such counsel's attention which would lead such counsel to believe that the Official Statement (except for the financial statements and other financial data included in the Official Statement, as to which no view need be expressed) contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (I1) Evidence that Federal Form 8038-G has been executed by the City and is ready for filing with the Internal Revenue Service; (12) Evidence that, except as disclosed in the Official Statement, all necessary approvals, whether legal or administrative, have been obtained from applicable federal, state and local entities and agencies; and (13) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter and Bond Counsel may reasonably request to evidence compliance by the City with legal requirements, the truth and accuracy, as of the time of Closing, of the representations of the City herein contained and the due perfonnance or satisfaction by the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied. If the City shall be unable to satisfy the conditions to the obligations of the Underwriter contained in this Bond Purchase Agreement, or if the obligation of the Underwriter to purchase and accept delivery of the Bonds shall be tenninated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter nor the City shall be under further obligation hereunder; except that the respective obligations to pay expenses, as provided in Section 12 hereof, shall continue in full force and effect. 9. Conditions to Obligations of the City. The obligations of the City hereunder are subject to the performance by the Underwriter of its obligations hereunder. 10. Survival. All representations, warranties and agreements of the City shall remain operative and in full force and effect, regardless of any investigations made by or on behalf of 12 4831-8672-1309.3 the Underwriter, and shall survive the Closing. The obligations of the City under Sections 11 or 12 hereof shall survive any termination of this Bond Purchase Agreement by the Underwriter pursuant to the terms hereof. 11. Indemnification. The City, to the extent pennitted by law, agrees to indemnify and hold harmless the Underwriter, each member, officer, director, partner or employee of the Underwriter and each person who controls the Underwriter within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended (collectively called the "Indemnified Parties"), against any and all losses, claims, damages, liabilities or expenses (including any legal or other expenses 'incurred by an Indemnified Party in connection with investigating any claims against an Indemnified Party and defending any actions) whatsoever caused by any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact contained in the Official Statement or caused by any omission or alleged omission from the Official Statement of any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading insofar as such losses, claims, damages, liabilities or expenses are caused by any such untrue or misleading statement or omission or alleged untrue or misleading statement or omission in the information contained in the Official Statement; provided, however, that the City shall not be liable to an Indemnified Party in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made in any of such documents in reliance upon and in conformity with written information furnished to the City by the Underwriter specifically for use therein. No Indemnified Parties shall be indemnified hereunder for any losses, claims, damages or liabilities resulting from the negligence of such Indemnified Parties. In case any action shall be brought against one or more of the Indemnified Parties based upon the Official Statement and in respect of which indemnity may be sought against the City, the Indemnified Parties shall promptly notify the City in writing, and, to the extent permitted by law, the City shall promptly assume the defense thereof, including the employment of counsel, the payment of all expenses and the right to negotiate and consent to settlement. Any one or more of the Indemnified Parties shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless employment of such counsel has been specifically authorized by the City. The City shall not be liable for any settlement of any such action effected without its consent by any of the Indemnified Parties, but if settled with the consent of the City, the City agrees to indemnify and hold harmless the Indemnified Parties to the extent provided in this Bond Purchase Agreement and to the extent permitted by law. 12. Payment of Expenses. The City will pay or cause to be paid all reasonable expenses incident to the performance of its obligations under this Bond Purchase Agreement, including, but not limited to, expenses of mailing or delivery of the Bonds, legal publication costs, costs for obtaining CUSIP numbers on the Bonds, fees payable to The Depository Trust Company relating to the Bonds, Federal Funds charges, costs of printing the Bonds, the Preliminary and final Official Statements, any amendment or supplement to the Preliminary or final Official Statement and this Bond Purchase Agreement, fees and disbursements of Bond Counsel, accountants' fees and expenses, any fees charged by investment rating agencies for the 13 4831-8672-1309.3 rating of the Bonds, bond insurance premiums, if any, fees of the Trustee and any paying agent fees, and any fees and disbursements in connection with the qualification of the Bonds for sale under the securities or "Blue Sky" laws of the various jurisdictions and the preparation of `Blue Sky" memoranda. In the event this Bond Purchase Agreement shall terminate because of the default of the Underwriter, the City will, nevertheless, pay, or cause to be paid, all of the expenses specified above. The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds, and all other expenses incurred by it in connection with the public offering and distribution of the Bonds, including the fees and expenses of any counsel retained by the Underwriter. If the City defaults under this Bond Purchase Agreement, the Underwriter may bring whatever legal action it may have against the City to recover damages, if any, incurred by the Underwriter. 13. Notices. Any notice or other communication to be given to the City under this Bond Purchase Agreement may be given by delivering the same in writing to the Mayor at the address set forth above, and any notice or other communication to be given to the Underwriter under this Bond Purchase Agreement may be given by delivering the same in writing to Stephens Inc., 3425 North Futrall, Suite 201, Fayetteville, AR 72703, Attention: Mr. Dennis Hunt. 14. Nonassignability. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriter (including any successor or assign of the Underwriter), and no other person, including any purchaser of the Bonds, shall acquire or have any right hereunder or by virtue hereof. 15. Applicable Law. This Bond Purchase Agreement shall be governed by and construed in accordance with the laws of the State of Arkansas. 14 4831-8672-1309.3 16. Counterparts. This Bond Purchase Agreement shall become effective upon your acceptance hereof and may be executed in counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. Very truly yours, STEPHENS INC. By:C K. /IJ7' Authorized Representative Accepted and agreed to as of 3:00 p.m. on the date first above written: 15 4831-8672-1309.3 EXHIBIT A MATURITY SCHEDULE (November 1) Principal Interest Maturity Amount Rate Yield Price 2015 $295,000 2.000% 0.300% 101.611% 2016 300,000 2.000% 0.590% 102.729% 2017 310,000 2.000% 0.900% 103.195% 2018 315,000 2.000% 1.210% 103.037% 2019 320,000 2.500% 1.520% 104.655% 2020 330,000 2.750% 1.860% 104.990% 2021 335,000 3.000% 2.150% 105.459% 2022 345,000 3.000% 2.390% 104.392% 2023 355,000 3.000% 2.520% 103.823% 2024 370,000 3.000% 2.620% 103.308% 2025 380,000 3.000% 2.720% 102.425%12) 2026 390,00011) 4.000% 3.125% 107.431%12) 2027 405,00011 4.000% 3.125% 107.431%") 2028 420,00011) 4.000% 3.125% 107.431%"1 2029 440,000 4.000% 3.125% 107.431%(2) 2030 455,000(1 5.000% 2.870% 118.321%12) 2031 480,00011) 5.000% 2.870% 118.321%12) 2032 505,00011 5.000% 2.870% 118.321%12) 2033 530,00011) 5.000% 2.870% 118.321%12) 2034 555,000 5.000% 2.870% 118.321%12) 2035 585,00011) 3.750% 3.860% 98.250% 2036 605,00011 3.750% 3.860% 98.250% 2037 630,00011 3.750% 3.860% 98.250% 2038 650,00011) 3.750% 3.860% 98.250% 2039 675,000 3.750% 3.860% 98.250% (with accrued interest on all Bonds from November 1, 2014) " Mandatory sinking fund redemption. (2) Priced to the first optional redemption date (November 1, 2024) A-1 4831-8672-1309.3 EXHIBIT B PROPOSED FORM OF BOND COUNSEL APPROVING OPINION Upon delivery of the Bonds in definitive form, Kutak Rock LLP, Little Rock, Arkansas, proposes to deliver its approving opinion in substantially the following fon-n: November , 2014 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons First Trust Company, N.A., as trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance and sale by the City of Fayetteville, Arkansas (the "City"), a political subdivision of the State of Arkansas, of its $10,980,000 Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, the Advertising and Promotion Commission Act, Arkansas Code Annotated (2008 Repl. & 2013 Repl.) §§26-75-601 et seg. (as from time to time amended, the "Act'), pursuant to Ordinance No. 5713 of the City, duly adopted and approved on September 16, 2014 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of November 1, 2014 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., as trustee (the "Trustee"). Reference is hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with respect to the conditions for the issuance of parity indebtedness by the City, the nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Levying Ordinance, the Election Ordinance and the Authorizing Ordinance and to enter into and perform its obligations B-1 4831-8672-1309.3 under the Indenture, the valid adoption of the Levying Ordinance, the Election Ordinance and the Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the hrdenture being enforceable upon the City. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Election Ordinance, the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials fumished to us, without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, the Act, the City is empowered to adopt the Election Ordinance and the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and binding obligation of the City enforceable upon the City in accordance with its terns. 4. The Bonds have been duly authorized, executed, issued and delivered by the City and represent valid and binding special obligations of the City. The principal of, premium, if any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and pledge by the City to the Trustee of, the Tax Receipts (as defined in the Indenture). 5. The Tax Receipts have been duly and validly assigned and pledged to the Trustee under the Indenture, and the Indenture creates, as security for the Bonds, a valid security interest in the Tax Receipts. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated (2001 Repl.) Section 4-9-109(d)(14), the pledge, assignment and security interest in the Tax Receipts securing the Bonds is and shall be prior to any judicial lien hereafter imposed on the Tax Receipts to enforce a judgment against the City on a simple contract, and it is not necessary to file a Uniform Commercial Code financing statement in order to perfect a security interest in the Tax Receipts. 6. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. The opinions set forth in the preceding sentence are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied prior to or subsequent to the issuance of the Bonds in order that the interest thereon be, or continue to be, excluded from gross income for federal B-2 4831-8672-1309.3 income tax purposes. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 7. The interest on the Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. 8. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended, in connection with the offer and sale of the Bonds. It is to be understood that the rights of the registered owners of the Bonds and the enforceability of the Bonds, the Authorizing Ordinance and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Very truly yours, B-3 4831-8672-1309.3 EXHIBIT C PROPOSED FORM OF BOND COUNSEL SUPPLEMENTAL OPINION November , 2014 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons First Trust Company, N.A., as trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 Ladies and Gentlemen: This opinion supplements our bond approving opinion, dated the date hereof, relating to the above -captioned bonds (the "Bonds"). Except as otherwise defined herein, the terms used herein shall have the meanings prescribed for them in said opinion. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion.. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. In addition to the documents specifically mentioned in the approving opinion, in connection with this opinion we have also examined: (a) An executed counterpart of the Bond Purchase Agreement dated October 28, 2014 (the "Bond Purchase Agreement'), by and between the City and Stephens Inc., as underwriter (the "Underwriter"); (b) An executed counterpart of the Escrow Deposit Agreement dated November 19, 2014 (the "Escrow Agreement'), by and between the City and the BOKF, NA, as escrow trustee (the "Escrow Trustee"); (c) An executed counterpart of the Continuing Disclosure Agreement dated November 19, 2014 (the "Disclosure Agreement'), by and between the City and C-1 4831-8672-1309.3 Simmons First Trust Company, N.A., as dissemination agent (the "Dissemination Agent"); (d) An executed counterpart of the Tax Regulatory Agreement dated November'l9, 2014 (the "Tax Regulatory Agreement'), by and between the City and the Trustee; (e) An executed Debt Service Reserve Agreement dated November 19, 2014 (the "Reserve Agreement'), by and between the City and Build America Mutual Assurance Company ("BAM"); and (f) Portions of the Official Statement dated October 28, 2014, with respect to the Bonds (the "Official Statement'), captioned "INTRODUCTORY STATEMENT," "THE SERIES 2014 BONDS," "SECURITY FOR THE BONDS," "SOURCES AND USES OF FUNDS," "DEFINITIONS OF CERTAIN TERMS," "SUMMARY OF THE INDENTURE," "SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT," "TAX MATTERS," and "APPENDIX A — Form of Opinion of Bond Counsel' (the "Relevant Captions") insofar as they relate to this opinion. Based on our examination, we are of the opinion, as of the date hereof and under existing law, as follows: 1. The Bond Purchase Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Underwriter, the Bond Purchase Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its teams. 2. The Escrow Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Escrow Trustee, the Escrow Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 3. The Disclosure Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Trustee, the Disclosure Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 4. The Tax Regulatory Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Trustee, the Tax Regulatory Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 5. The Reserve Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by BAM, the Reserve Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. C-2 4831-8672-1309.3 6. The statements contained in the Official Statement under the Relevant Captions, insofar as such statements purport to smmnarize certain provisions of the Bonds, the Indenture and the Continuing Disclosure Agreement, or conclusions of law and legal opinions, are true, accurate and correct summaries thereof in all material respects and do not omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The enforceability of the respective obligations of the parties to the documents and other items described above, and the availability of certain rights and remedies provided for therein, may be limited by bankruptcy, receivership, insolvency, reorganization, moratorium, marshalling or other similar statutes or rules of law affecting creditors' rights and remedies, to general principles of equity and to the discretion of any court in granting any relief or issuing any order, whether the proceeding is considered a proceeding at law or equity. In particular, the right to indemnification under any of the documents or other items described above may be limited by federal or state securities laws or by the public policy underlying such laws. This opinion is being rendered to you solely for your use and benefit and may not be relied upon in any manner, nor used, by any other person. Very truly yours, C-3 4831-8672-1309.3 PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 20, 2014 NEW ISSUE *RATINGS: S&P: "AA" (stable outlook) '= = BOOK -ENTRY ONLY (Build America Mutual Assurance Company) r 'E Underlying "A+" (stable outlook) c In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the n accuracy of certain representation and continuing compliance with certain covenants, interest on the Series 2014 Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. Under existing law, Bond Counsel is of the opinion that the Series 2014 Bonds and the interest thereon are exempt from all state, county and municipal taxes in the State of Arkansas. See the caption "TAX MATTERS" herein. L $10,995,000** L s CITY OF FAYETTEVILLE, ARKANSAS o HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS SERIES 2014 o Dated: November 1, 2014 Due: November 1, as shown on inside cover C C The Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the ° s "Series 2014 Bonds"), are being issued by the City of Fayetteville, Arkansas (the "City") for the purpose of(i)paying a portion of the costs of r redeeming the City's Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), (ii) paying a portion of s o the costs of expanding and renovating Walton Arts Center, (iii) paying a portion of the costs of acquiring, constructing and equipping a regional 75 park, (iv) purchasing a municipal bond debt service reserve insurance policy for deposit to a debt service reserve, (v) purchasing a municipal o = bond insurance policy, and (vi) paying certain expenses in connection with the issuance of the Series 2014 Bonds. See the captions ° "ESTIMATED SOURCES AND USES OF FUNDS," "REFUNDING PROGRAM," "THE PROJECTS" and "BOND INSURANCE" herein. The Series 2014 Bonds are issuable only as fully registered bonds and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal, premium, if any, and interest payments on the Series 2014 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2014 Bonds. Individual purchases of the Series 2014 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers ("Beneficial Owners") of Series 2014 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY y = v SYSTEM" herein. v 3 g w _ The Series 2014 Bonds shall bear interest from their dated date, payable on May I and November 1 of each year, commencing May 1, = 2015. All such interest payments shall be payable to the persons in whose name such Series 2014 Bonds are registered on the bond ''— registration books maintained by the Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee and paying agent (the "Trustee"), 1, as of the fifteenth day of the calendar month next preceding the calendar month in which the applicable interest payment date falls. Principal 25 °o r of and premium, if any, on the Series 2014 Bonds shall be payable at the principal corporate most office of the Trustee. So long as DTC or its t nominee is the registered owner of the Series 2014 Bonds, disbursement of such payments to DTC Participants is the responsibility of DTC, and the disbursement of such payments to Beneficial Owners is the responsibility of DTC Participants or Indirect Participants, as more fully 1 o described herein. Pursuant to a Trust Indenture dated as of November 1, 2014 (the "Indenture"), between the City and the Trustee, the payment of the � u-4` principal of, premium, if any, and interest on the Series 2014 Bonds is secured by a pledge of the receipts from a one percent (I ) city-wide wide a c s tax (the "Tax") levied by the City upon (i) the gross receipts and gross proceeds derived from renting, leasing or otherwise furnishing hotel or o i, motel accommodations for profit within the boundaries of the City, and (ii) the portion of gross receipts or gross proceeds received by 3 ° restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store- ,e restaurants, caterers and similar businesses from the sale of prepared food and beverages for on -premises or off -premises consumption. See 'enthe caption "SECURITY FOR THE BONDS" herein. Assuming the satisfaction of certain coverage tests, the City has reserved the right to issue additional bonds to be secured on a parity basis with the Series 2014 Bonds. See the caption "THE SERIES 2014 BONDS — Additional = t.= Bonds" herein. The Series 2014 Bonds are subject to optional and mandatory redemption prior to maturity as more fully described herein — under the caption "THE SERIES 2014 BONDS -Redemption" r—' The scheduled payment of principal of and interest on the Series 2014 Bonds when due will be guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery of the Series 2014 Bonds by Build America Mutual Assurance Company. F ° ` L i4e BA M c 3 c y -, The Series 2014 Bonds are special obligations of the City secured by and payable solely from receipts of the Tax. The Series 2014 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restriction. The issuance of the Series 2014 Bonds shall not directly, indirectly or contingently obligate the City to levy or pledge any taxes whatsoever or to make any appropriation for the payment of the Series 2014 Bonds, except as described herein with respect to `.^ the Tax. E .5 The Series 2014 Bonds are offered when, as and if issued by the City and are subject to the final approving opinion of Kutak Rock LLP, 3 :' Little Rock, Arkansas, Bond Counsel. Certain matters will be passed upon for the City by its counsel, Kit Williams, Esq., City Attorney. It is expected that the Series 2014 Bonds will be available for delivery in New York, New York, on or about November 19, 2014. 5 Stephens Inc. C�- g - The date of this Official Statement is October _, 2014. c 3 � 1 *` See the caption "RATINGS" herein. .9'c °" Preliminary; subject to change. F v CUSIP $2,115,000 _% Term Bond due November 1, 2029 Yield: _% CUSIP: $2,545,000 _% Term Bond due November 1, 2034 Yield: _% CUSIP: $3,045,000 _% Term Bond due November 1, 2039 Yield: _% CUSIP: (Plus accrued interest) * Preliminary; subject to change. MATURITY SCHEDULE* Maturity Principal Interest (November 1) Amount Rate Yield 2015 $295,000 % % 2016 300,000 2017 310,000 2018 310,000 2019 315,000 2020 330,000 2021 345,000 2022 350,000 2023 360,000 2024 375,000 CUSIP $2,115,000 _% Term Bond due November 1, 2029 Yield: _% CUSIP: $2,545,000 _% Term Bond due November 1, 2034 Yield: _% CUSIP: $3,045,000 _% Term Bond due November 1, 2039 Yield: _% CUSIP: (Plus accrued interest) * Preliminary; subject to change. CITY OF FAYETTEVILLE, ARKANSAS Issuer City Council Lioneld Jordan, Mayor Rhonda Adams Adella Gray Mark Kinion Alan Long Sarah Marsh Matthew Petty Martin Schoppmeyer, Jr. Justin Tennant Don Marr, Chief of Staff Paul Becker, Finance Director Sondra Smith, City Clerk Kit Williams, City Attorney Fayetteville Advertising and Promotion Commission Ching Mong, Chair Matt Behrend Robert Ferrell Tim Freeman Matthew Petty Justin Tennant Hannah Withers Marilyn Heifner, Executive Director SIMMONS FIRST TRUST COMPANY, N.A. Pine Bluff, Arkansas Trustee and Paying Agent KUTAK ROCK LLP Little Rock, Arkansas Bond Counsel STEPHENS INC. Fayetteville, Arkansas Underwriter No dealer, broker, salesman or other person has been authorized by the City or by Stephens Inc. (the "Underwriter") to give any information or to make any representations, other than those contained herein; and, if given or made, such other information or representations must not be relied upon as having been authorized by either of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of any Series 2014 Bonds in any jurisdiction in which such offer is not authorized, or in which the person making such offer, solicitation or sale is not qualified to do so, or to any person to whom it is unlawful to make such offer, solicitation or sale. The information and expressions of opinion contained herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. Build America Mutual Assurance Company ("BAM") makes no representation regarding the Series 2014 Bonds or the advisability of investing in the Series 2014 Bonds. In addition, BAM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding BAM, supplied by BAM and presented under the heading "BOND INSURANCE" and "EXHIBIT B — Specimen Municipal Bond Insurance Policy". THE SERIES 2014 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE TRUST INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON CERTAIN EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION CONTAINED IN SUCH LAWS. CERTAIN INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED FROM THE CITY, THE DEPOSITORY TRUST COMPANY, BUILD AMERICA MUTUAL ASSURANCE COMPANY AND OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE. THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITER DOES NOT GUARANTY THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2014 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. TABLE OF CONTENTS Introductory Statement.............................................................................. The Series 2014 Bonds.............................................................................. Security for the Bonds............................................................................... BondInsurance............................................................................................ Book -Entry Only System.......................................................................... Refunding Program ............................................... TheProjects........................................................... Estimated Sources and Uses of Funds ................... Estimated Debt Service Requirements .................. Estimated Debt Service Coverage ......................... TheCity................................................................. The Commission ................................................... Definitions of Certain Terms .................................. Page .......................................................... 1 ........................................................... 2 ........................................................... 5 ........................................................... 6 ........................................................... 7 ................................................................................................ 10 ................................................................................................ 10 ................................................................................................ 11 ................................................................................................ I I ................................................................................................ 12 ................................................................................................ 15 ............... 15 Summaryof the Indenture..................................................................................................................................... 20 Summary of the Continuing Disclosure Agreement.............................................................................................. 24 Underwriting......................................................................................................................................................... 27 TaxMatters........................................................................................................................................................... 27 Ratings.................................................................................................................................................................... 28 LegalMatters........................................................................................................................................................ 29 Miscellaneous........................................................................................................................................................ 29 Accuracy and Completeness of Official Statement............................................................................................... 30 APPENDIX A - Form of Bond Counsel Opinion.................................................................................................A-1 APPENDIX B - Specimen Municipal Bond Insurance Policy..............................................................................B-1 OFFICIAL STATEMENT $10,995,000* CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS SERIES 2014 INTRODUCTORY STATEMENT The following introductory statement is subject in all respects to the more complete information set forth in this Official Statement. All descriptions and summaries of documents hereinafter set forth are qualified in their entirety by reference to each such document. Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms under the caption "DEFINITIONS OF CERTAIN TERMS" herein. This Official Statement, including the cover page and the Appendices hereto, is furnished in connection with the offering of Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014, in the principal amount of $10,995,000* (the "Series 2014 Bonds"), by the City of Fayetteville, Arkansas (the "City"). The City is a city of the first class organized and existing under the laws of the State of Arkansas (the "State"). The City is authorized under the laws of the State, including particularly, the Advertising and Promotion Commission Act, Arkansas Code Annotated (2008 Repl. & 2013 Supp.) §§26-75-601 et seq. (as from time to time amended, the "Act"), to issue and sell its bonds for the purpose of financing and refinancing the cost of tourism projects, such as cultural arts and entertainment facilities and public recreation facilities. Pursuant to the Act, the City has previously issued and there are currently outstanding its Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"). The Series 2014 Bonds are to be issued by the City pursuant to the Act and Ordinance No. 5713, adopted and approved by the City Council on September 16, 2014 (the "Authorizing Ordinance"), for the purpose of (i) paying a portion of the costs of redeeming all of the outstanding Series 2003 Bonds, (ii) paying a portion of the costs of expanding and renovating Walton Arts Center, a cultural arts facility owned by and located within the City (the "Walton Arts Center Project'), (iii) paying a portion of the costs of acquiring, constructing and equipping a regional park within the City (the "Park Project'), (iv) purchasing a municipal bond debt service reserve insurance policy for deposit to a debt service reserve, (v) purchasing a municipal bond insurance policy, and (vi) paying certain expenses in connection with the issuance of the Series 2014 Bonds. See the captions "ESTIMATED SOURCES AND USES OF FUNDS," "REFUNDING PROGRAM" and "THE PROJECTS" herein. The issuance of the Series 2014 Bonds for the aforementioned purposes was approved by a majority of the qualified electors of the City at a special election held November 12, 2013. The Series 2014 Bonds are not general obligations of the City, but are special obligations payable solely from and secured by a pledge of the revenues derived by the City from a one percent (I%) tax (the "Tax") originally levied in 1977 upon (i) the gross receipts and gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City, and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants and similar businesses from the sale of prepared food and beverages for on -premises and off -premises consumption. The regularly scheduled payment of principal of and interest on the Series 2014 Bonds when due is guaranteed under a municipal bond insurance policy (the "Policy") issued concurrently with the delivery of the Series 2014 Bonds by Build America Mutual Assurance Company, a New York domiciled mutual insurance corporation (`BAM"). See the captions "SECURITY FOR THE BONDS," "BOND INSURANCE" and "SUMMARY OF THE INDENTURE" herein. The faith and credit of the City are not pledged to the payment of the Series 2014 Bonds, and the Series 2014 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restriction. The issuance of the Series 2014 Bonds shall not directly, indirectly or contingently obligate the City to levy or pledge any taxes whatsoever or to make any appropriation for the payment of the Series 2014 Bonds, except as described herein with respect to the Tax Receipts. Preliminary; subject to change. Additional Bonds may be issued on a parity of security with the Series 2014 Bonds under certain circumstances set forth in the Indenture (hereinafter defined). The Series 2014 Bonds and any such Additional Bonds are herein collectively referred to as the "Bonds." Seethe caption "THE SERIES 2014 BONDS -Additional Bonds" and " - Superior Obligations Prohibited" herein. The Series 2014 Bonds are subject to optional and mandatory redemption as provided under the caption "THE SERIES 2014 Bonds — Redemption" herein. Pursuant to the provisions of a Continuing Disclosure Agreement dated as of the date of delivery of the Series 2014 Bonds, by and between the City and Simmons First Trust Company, N.A., as dissemination agent (the "Continuing Disclosure Agreement'), the City has undertaken certain obligations with respect to providing ongoing disclosure of certain financial and operating data concerning the City and the Tax Receipts and of the occurrence of certain material events. See the caption "SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT" herein. This Official Statement contains brief descriptions or summaries of, among other matters, the City, the Series 2014 Bonds, the Tax Receipts, the Continuing Disclosure Agreement, and the Trust Indenture dated as of November 1, 2014, (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee and paying agent (the "Trustee"), pursuant to which the Series 2014 Bonds are issued and secured. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Indenture and the Continuing Disclosure Agreement are qualified in their entirety by reference to each such document, and all references to the Series 2014 Bonds are qualified in their entirety by reference to the definitive form thereof and the information with respect thereto included in the Indenture. Copies of the Continuing Disclosure Agreement, the Indenture, and the form of Series 2014 Bond included therein, are available from the City by writing to the attention of the City Clerk, City of Fayetteville, City Administration Building, 113 West Mountain, Fayetteville, Arkansas 72701, and, during the initial offering period only, from the Underwriter, Stephens Inc., 3425 North Futrall, Suite 201, Fayetteville, Arkansas 72703. Tax Receipt data has been provided by the City from the audited records of the City and certain demographic information has been obtained from other sources which are believed to be reliable. THE SERIES 2014 BONDS Description. The Series 2014 Bonds will be initially dated as of November 1, 2014, and will bear interest payable semiannually on May 1 and November 1 of each year, commencing May 1, 2015, at the rates set forth on the inside cover page hereof. The Series 2014 Bonds will mature on November I in the years and in the principal amounts set forth on the inside cover page hereof. The Series 2014 Bonds are issuable only in the form of fully registered bonds and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC'), New York, New York, to which principal, premium, if any, and interest payments on the Series 2014 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2014 Bonds. Individual purchases of the Series 2014 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers ("Beneficial Owners") of Series 2014 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. All interest payments on the Series 2014 Bonds shall be payable to the persons in whose name such Series 2014 Bonds are registered on the bond registration books maintained by the Trustee, as of the fifteenth day of the calendar month next preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2014 Bonds shall be payable at the principal corporate trust office of the Trustee. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Series 2014 Bond to the extent of the sum or sums so paid. So long as DTC or its nominee is the registered owner of the Series 2014 Bonds, disbursement of such payments to DTC Participants is the responsibility of DTC, and the disbursement of such payments to Beneficial Owners is the responsibility of DTC Participants or Indirect Participants, as more fully described herein. Redemption. (1) The Series 2014 Bonds are subject to redemption prior to maturity at the election of the City, on and after November 1, 2024, in whole or in part (in any order of maturities directed by the City, and by lot within a maturity) at any time, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. (2) The Series 2014 Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from moneys on deposit in the Projects Fund in excess of the amount needed to complete the Walton Arts Center Project or the Park Project. (3) The Series 2014 Bonds maturing on November 1, 2029, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on November 1 in the years and amounts set forth below at a redemption price equal to 10017b of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount* 2025 $390,000 2026 405,000 2027 425,000 2028 440,000 2029 (maturity) 455,000 (4) The Series 2014 Bonds maturing on November 1, 2034, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on November 1 in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount* 2030 $475,000 2031 490,000 2032 510,000 2033 525,000 2034 (maturity) 545,000 (5) The Series 2014 Bonds maturing on November 1, 2039, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on November 1 in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount* 2035 $565,000 2036 585,000 2037 610,000 2038 630,000 2039 (maturity) 655,000 At its option, to be exercised on or before the 450' day next preceding any mandatory sinking fund redemption date for any Series 2014 Bonds maturing November 1, 2029, November 1, 2034 and November 1, 2039 (the "Series 2014 Term Bonds"), the City may deliver to the Trustee for cancellation Series 2014 Term Bonds, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2014 Term Bond, or portion thereof, so delivered or previously redeemed (otherwise than through mandatory sinking fund redemption) and canceled by the Trustee shall be credited by the Trustee at 100% of the principal amount thereof on the obligation of the City on such mandatory sinking fund redemption date, and any excess over such amount shall be credited on future mandatory sinking fund redemption obligations with respect to the Series 2014 Term Bonds in chronological order, and the principal amount of such Series 2014 Term Bonds so to be redeemed shall be accordingly reduced. * Preliminary; subject to change. Partial Redemption of a Series 2014 Bond. If less than all of the Series 2014 Bonds of a maturity are called for redemption, the particular Series 2014 Bonds or portions of Series 2014 Bonds to be redeemed shall be selected by lot in such manner as the Trustee in its discretion may deem fair and appropriate. So long as DTC or its nominee is the sole registered owner of the Series 2014 Bonds, the procedures established by DTC shall control with respect to the selection of the particular Series 2014 Bonds to be redeemed. Notice of Redemption. Notice of the call for any redemption (other than mandatory sinking fund redemption), identifying the Series 2014 Bonds or portions thereof being called and the date on which they shall be presented for payment, shall be mailed by the Trustee by first class mail (or, so long as DTC or its nominee is the sole registered owner of the Series 2014 Bonds, by any other means acceptable to DTC, including facsimile) to the registered owner of each such Series 2014 Bond addressed to such registered owner at his registered address and placed in the mails not less than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption; provided, however, that failure to give such notice by mailing, or any defect therein, shall not affect the validity of any proceeding for the redemption of any Series 2014 Bond with respect to which no such failure or defect has occurred. Any notice mailed as provided above shall be conclusively presumed to have been duly given, whether or not the registered owner receives the notice. Additional Bonds. The City may issue from time to time one or more series of Additional Bonds for the purpose of (i) financing Project costs in connection with the acquisition, construction and/or equipping of a Project, (ii) refunding the Series 2014 Bonds or any series of Additional Bonds, in whole or in part, or (iii) any combination thereof. Additional Bonds shall be secured equally and ratably with the Series 2014 Bonds and any other series of Additional Bonds theretofore issued and then Outstanding, except insofar as any terms or conditions of redemption or purchase established under the Indenture may afford additional benefit or security for the Bonds of any particular series and except for the security afforded by any municipal bond insurance obtained with respect to any particular series of Bonds. Before any Additional Bonds are authenticated, there shall be delivered to the Trustee the items required for the issuance of Bonds by the Indenture, plus a Certificate of the Finance Director of the City certifying that, based upon necessary investigation, the Tax Receipts deposited into the Revenue Fund during the most recent twelve (12) months were not less than (i) 140% of the maximum Annual Debt Service on all then Outstanding Bonds, plus the Additional Bonds then proposed to be issued, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. No Additional Bonds shall be issued unless there is no default at the time of issuance under the Indenture. Superior Obligations Prohibited. Except to the extent as provided above with respect to the issuance of Additional Bonds, so long as Bonds are Outstanding under the Indenture, the City has covenanted not to create or permit the creation of any indebtedness, or to issue any bonds, notes, warrants, certificates or other obligations or evidences of indebtedness payable in any manner from the Tax Receipts or otherwise from the Trust Estate which (i) will in any way be superior to or rank on a parity with the Bonds, or (ii) will in any way be secured by a lien and charge on the Tax Receipts or on the moneys deposited in or to be deposited in the Revenue Fund, prior to or equal with the lien, pledge and charge created in the Indenture for the security of the Bonds, or (iii) will be payable prior to or equal with the payments to be made from the Tax Receipts or the Revenue Fund into the Bond Fund or Debt Service Reserve Fund, or from said Bond Fund or Debt Service Reserve Fund for the payment of the Bonds. The City is not prohibited or restricted from issuing bonds payable from Tax Receipts so long as use of the Tax Receipts in favor of said bonds shall be made expressly subject and subordinate to the pledge and use of Tax Receipts to pay principal of and premium, if any, and interest on the Bonds and to make all required deposits into all funds held by the Trustee pursuant to the Indenture. Transfer or Exchange. The Bonds may be transferred on the books of registration kept by the Trustee by the registered owner in person or by the owner's duly authorized attorney, upon surrender thereof, together with a written instrument of transfer duly executed by the registered owner or the owner's duly authorized attorney. Upon surrender for transfer of any Bond at the principal corporate office of the Trustee, the City shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds of the same series and in the same aggregate principal amount and of any authorized denomination or denominations. Transfers of registration or exchanges of Bonds shall be without charge to the Holders of such Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Holder of the Bond requesting such transfer or exchange as a condition precedent to the exercise of such privilege. The Trustee shall not be required to transfer or exchange any Bond during the period from and including a Record Date to the next succeeding interest payment date of such Bond nor to transfer or exchange any Bond after the mailing of notice calling such Bond for redemption has been made, and prior to such redemption. So long as DTC or its nominee is the sole registered owner of the Series 2014 Bonds, transfers of beneficial interests in the Series 2014 Bonds shall be in accordance with the rules and procedures of DTC and its direct and indirect participants. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. SECURITY FOR THE BONDS Tax Receipts. The Bonds are special obligations of the City secured by and payable from the revenues derived by the City from a one percent (1%) tax (the "Tax") levied upon (i) the gross receipts and gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City, and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store - restaurants and similar businesses from the sale of prepared food and beverages for on -premises and off -premises consumption. Pursuant to the Act, the City levied the Tax in 1977. The Tax is limited by statute to 3% of the amount of such gross receipts and proceeds. Pursuant to the Act and the Indenture, the City has pledged the receipts of the Tax (the "Tax Receipts") to the payment of the Bonds. The Advertising and Promotion Commission of the City of Fayetteville, Arkansas (the "Commission') has approved such pledge, as required by statute. The City has continuously collected the Tax since June 1, 1977, following approval by the citizens of the City in a special election held on May 3, 1977. The City has covenanted in the Indenture that, for so long as there are Outstanding Bonds, the Tax will not be repealed and the current Tax rate of 1% will not be reduced. In addition, the City has further covenanted that all necessary action will be taken, from time to time, to collect such tax in full amount due and to apply the Tax Receipts in the manner provided in the Indenture. The following table shows Tax Receipts for the years 2002 through 2014. Calendar Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012(1 2013 2014121 ,l) Includes $211,138 in accruals due to revenue recognition timing change. (2) Unaudited; For the eight months ended August 31, 2014. Source: City records. Tax Receipts $ 1,489,011 1,556,511 1,756,319 1,944,250 2,063,875 2,030,913 2,171,452 2,165,809 2,181,585 2,298,187 2,732,282 2,624,137 1,775,061 The faith and credit of the City are not pledged to the payment of the Series 2014 Bonds, and the Series 2014 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restriction. The issuance of the Series 2014 Bonds shall not directly, indirectly or contingently obligate the City to levy or pledge any taxes whatsoever or to make any appropriation for the payment of the Series 2014 Bonds, except as described herein with respect to the Tax Receipts. Debt Service Reserve. The Indenture creates a Debt Service Reserve Fund and requires that it be maintained in an amount equal to the least of (a) 10% of the face amount of each series of Outstanding Bonds, (b) the maximum Annual Debt Service on each series of Outstanding Bonds, or (c) 1.25 times the average Annual Debt Service on each series of Outstanding Bonds. The Debt Service Reserve Fund shall be used solely to pay the principal of and interest on Outstanding Bonds as due for which there are no available funds in the Bond Fund to make such payments. The Indenture authorizes the City to obtain a debt service reserve insurance policy in place of fully funding the Debt Service Reserve Fund. Accordingly, application has been made to Build America Mutual Assurance Company (`BAM"), and BAM has made a commitment to issue a debt service reserve insurance policy (the "Reserve Policy"), effective as of the date of issuance of the Series 2014 Bonds, for the purpose of funding the Debt Service Reserve Fund. The Series 2014 Bonds will only be delivered upon the issuance of such Reserve Policy. The premium on the Reserve Policy is to be fully paid at or prior to the issuance and delivery of the Series 2014 Bonds. The Reserve Policy provides that RAM will make payment to the Trustee of that portion of the principal of and interest on the Series 2014 Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the City, as provided in the Reserve Policy, on the later of (i) the Business Day on which such principal and interest becomes Due for Payment and (ii) the first Business Day following the Business Day on which RAM shall have received a completed Notice of Nonpayment in a form reasonably satisfactory to it. Payment by RAM to the Trustee for the benefit of the Owners of the Series 2014 Bonds shall, to the extent thereof, discharge the obligation of RAM under the Reserve Policy. The amount available at any particular time to be paid to the Trustee under the terms of the Reserve Policy shall automatically be reduced by and to the extent of any payment under the Reserve Policy. However, after such payment, the amount available under the Reserve Policy shall be reinstated in full or in part, but only up to the Policy Limit, to the extent of the reimbursement of such payment (after taking into account the payment of interest and expenses) to RAM by or on behalf of the City. Unless otherwise defined under this caption, all capitalized terms used in the language under this caption shall have the respective meanings set forth in the Reserve Policy. For information on BAM see the caption "BOND INSURANCE" herein Bond Insurance. Subject to certain limitations as described herein, the payment of the principal of and interest on the Series 2014 Bonds is unconditionally and irrevocably guaranteed by RAM pursuant to its municipal bond insurance policy (the "Policy"). See the caption "BOND INSURANCE" herein for further information concerning the terms and conditions of the Policy and a description of RAM. A specimen of the Policy appears as Appendix B to this Official Statement. BOND INSURANCE Bond Insurance Policy Concurrently with the issuance of the Bonds, Build America Mutual Assurance Company ("BAM") will issue its Municipal Bond Insurance Policy for the Series 2014 Bonds (the "Policy"). The Policy guarantees the scheduled payment of principal of and interest on the Series 2014 Bonds when due as set forth in the form of the Policy included as an exhibit to this Official Statement. The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law. Build America Mutual Assurance Company RAM is a New York domiciled mutual insurance corporation. RAM provides credit enhancement products solely to issuers in the U.S. public finance markets. BAM will only insure obligations of states, political subdivisions, integral parts of states or political subdivisions or entities otherwise eligible for the exclusion of income under section 115 of the U.S. Internal Revenue Code of 1986, as amended. No member of RAM is liable for the obligations of RAM. The address of the principal executive offices of RAM is: 200 Liberty Street, 27`h Floor, New York, New York 10281, its telephone number is: 212-235-2500, and its website is located at: www.buildamerica.com. RAM is licensed and subject to regulation as a financial guaranty insurance corporation under the laws of the State of New York and in particular Articles 41 and 69 of the New York Insurance Law. RAM's financial strength is rated "AA/Stable" by Standard and Poor's Ratings Services, a Standard & Poor's Financial Services LLC business ("S&P"). An explanation of the significance of the rating and current reports may be obtained from S&P at www.standardandpoors.com. The rating of RAM should be evaluated independently. The rating reflects S&P's current assessment of the creditworthiness of RAM and its ability to pay claims on its policies of insurance. The above rating is not a recommendation to buy, sell or hold the Series 2014 Bonds, and such rating is subject to revision or withdrawal at any time by S&P, including withdrawal initiated at the request of RAM in its sole discretion. Any downward revision or withdrawal of the above rating may have an adverse effect on the market price of the Series 2014 Bonds. RAM only guarantees scheduled principal and scheduled interest payments payable by the issuer of the Series 2014 Bonds on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the Policy), and RAM does not guarantee the market price or liquidity of the Series 2014 Bonds, nor does it guarantee that the rating on the Series 2014 Bonds will not be revised or withdrawn. Capitalization of BAM BAM's total admitted assets, total liabilities, and total capital and surplus, as of June 30, 2014 and as prepared in accordance with statutory accounting practices prescribed or permitted by the New York State Department of Financial Services were $477.8 million, $17.9 million and $459.9 million, respectively. BAM is party to a first loss reinsurance treaty that provides first loss protection up to a maximum of 15% of the par amount outstanding for each policy issued by BAM, subject to certain limitations and restrictions. BAM's most recent Statutory Annual Statement, which has been filed with the New York State Insurance Department and posted on BAM's website at www.buildamerica.com, is incorporated herein by reference and may be obtained, without charge, upon request to BAM at its address provided above (Attention: Finance Department). Future financial statements will similarly be made available when published. BAM makes no representation regarding the Series 2014 Bonds or the advisability of investing in the Series 2014 Bonds. In addition, BAM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding BAM, supplied by BAM and presented under the heading "BOND INSURANCE". Additional Information Available from BAM Credit Insights Videos. For certain BAM-insured issues, BAM produces and posts a brief Credit Insights video that provides a discussion of the obligor and some of the key factors BAM's analysts and credit committee considered when approving the credit for insurance. The Credit Insights videos are easily accessible on BAM's website at buildamerica.com/creditinsights/. Obligor Disclosure Briefs. Subsequent to closing, BAM posts an Obligor Disclosure Brief on every issue insured by BAM, including the Series 2014 Bonds. BAM Obligor Disclosure Briefs provide information about the gross par insured by CUSIP, maturity and coupon; sector designation (e.g. general obligation, sales tax); a summary of financial information and key ratios; and demographic and economic data relevant to the obligor, if available. The Obligor Disclosure Briefs are also easily accessible on BAM's website at buildamerica.com/obligor/. Disclaimers. The Obligor Disclosure Briefs and the Credit Insights videos and the information contained therein are not recommendations to purchase, hold or sell securities or to make any investment decisions. Credit - related and other analyses and statements in the Obligor Disclosure Briefs and the Credit Insights videos are statements of opinion as of the date expressed, and BAM assumes no responsibility to update the content of such material. The Obligor Disclosure Briefs and Credit Insight videos are prepared by BAM and have not been reviewed or approved by the issuer of or the underwriter for the Series 2014 Bonds, and they assume no responsibility for their content. BAM receives compensation (an insurance premium) for the insurance that it is providing with respect to the Series 2014 Bonds. Neither BAM nor any affiliate of BAM has purchased, or committed to purchase, any of the Series 2014 Bonds, whether at the initial offering or otherwise. BOOK -ENTRY ONLY SYSTEM The Series 2014 Bonds will be issued only as one fully registered Series 2014 Bond for each maturity, in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), as registered owner of all the Series 2014 Bonds. The fully registered Series 2014 Bonds will be retained and immobilized in the custody of DTC. DTC (or any successor securities depository) or its nominee for all purposes under the Indenture will be considered by the City and the Trustee to be the owner or holder of the Series 2014 Bonds. Owners of any book entry interests in the Series 2014 Bonds (the "book entry interest owners") described below, will not receive or have the right to receive physical delivery of the Series 2014 Bonds, and will not be considered by the City and the Trustee to be, and will not have any rights as, owners or holders of the Series 2014 Bonds under the bond proceedings and the Indenture except to the extent, if any, expressly provided thereunder. CERTAIN INFORMATION REGARDING DTC AND DIRECT PARTICIPANTS IS SET FORTH BELOW. THIS INFORMATION HAS BEEN PROVIDED BY DTC. THE CITY, THE UNDERWRITER AND BOND COUNSEL ASSUME NO RESPONSIBILITY FOR THE ACCURACY OF SUCH STATEMENTS. DTC, the world's largest depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues and money market instruments (from over 120 countries and territories) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges among Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, the National Securities Clearing Corporation and the Fixed Income Clearing Corporation, all of which are registered agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The DTC Rules applicable to its Direct and Indirect Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.com. Purchases of Series 2014 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2014 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2014 Bond (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2014 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2014 Bonds, except in the event that use of the Book -Entry System for the Series 2014 Bonds is discontinued. To facilitate subsequent transfers, all Series 2014 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2014 Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2014 Bonds, DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2014 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Series 2014 Bonds within a maturity are to be redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Series 2014 Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the Record Date. The Omnibus Proxy will assign Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2014 Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy). Payment of debt service and redemption proceeds with respect to the Series 2014 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or the Trustee on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds and debt service to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. BENEFICIAL OWNERS SHOULD CONSULT WITH THE DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS FROM WHOM THEY PURCHASE A BOOK ENTRY INTEREST TO OBTAIN INFORMATION CONCERNING THE SYSTEM MAINTAINED BY SUCH DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS TO RECORD SUCH INTERESTS, TO MAKE PAYMENTS, TO FORWARD NOTICES OF REDEMPTION AND OF OTHER INFORMATION. THE CITY AND THE TRUSTEE HAVE NO RESPONSIBILITY OR LIABILITY FOR ANY ASPECTS OF THE RECORDS OR NOTICES RELATING TO, OR PAYMENTS MADE ON ACCOUNT OF, BOOK ENTRY INTEREST OWNERSHIP, OR FOR MAINTAINING, SUPERVISING OR REVIEWING ANY RECORDS RELATING TO THAT OWNERSHIP. The Trustee and the City, so long as a book entry method of recording and transferring interest in the Series 2014 Bonds is used, will send any notice of redemption or of any Indenture amendment or supplement or other notices to Bondholders under the Indenture only to DTC (or any successor securities depository) or its nominee. Any failure of DTC to advise any Direct Participants, or of any Direct Participants or Indirect Participants to notify any Beneficial Owner, of any such notice and its content or effect will not affect the validity of the redemption of the Series 2014 Bonds called for redemption, the Indenture amendment or supplement, or any other action premised on notice given under the Indenture. The City and the Trustee cannot and do not give any assurances that DTC, Direct Participants, Indirect Participants or others will distribute payments of debt service on the Series 2014 Bonds made to DTC or its nominee as the registered owner of the Series 2014 Bonds, or any redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or that DTC will serve and act in a manner described in this Official Statement. DTC may discontinue providing its services as securities depository with respect to the Series 2014 Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, bond certificates are required to be printed and delivered. In addition, the City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered. REFUNDING PROGRAM Purpose. A portion of the proceeds of the Series 2014 Bonds will be utilized, along with other available moneys, to effect a current refunding of $650,000 outstanding principal amount of the City's Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"). The Series 2003 Bonds were issued to refund a prior series of bonds approved by a majority of the qualified electors of the City at a special election held August 5, 1997, for the purpose of financing a portion of the costs of constructing the Fayetteville Town Center, a multipurpose civic center located on the south side of the downtown square. Refunded Bonds. The Series 2003 Bonds will be called for redemption by the City on December 22, 2014, pursuant to the provisions of the trust indenture under which the Series 2003 Bonds were issued, and will be paid from funds deposited with the BOKF, NA, Tulsa, Oklahoma, as escrow trustee (the "Escrow Trustee") under the provisions of an Escrow Deposit Agreement to be dated as of the date of delivery of the Series 2014 Bonds (the "Escrow Agreement"), between the City and the Escrow Trustee. The Indenture provides that a portion of the proceeds from the sale of the Series 2014 Bonds, together with moneys released from the bond fund relating to the Series 2003 Bonds, will be held by the Escrow Trustee under the Escrow Agreement in an escrow fund (the "Escrow Fund") and used to purchase direct obligations of the United States of America (or their equivalents) (the "Defeasance Securities"). The Underwriter will verify at the time of delivery of the Series 2014 Bonds that the Defeasance Securities will mature and yield interest in such amounts which, together with uninvested funds, if any, in the Escrow Fund will be sufficient to pay, when due, the principal of and interest on the Series 2003 Bonds. Pursuant to the terms of the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Series 2003 Bonds. By the deposit of Defeasance Securities and uninvested cash with the Escrow Trustee pursuant to the Escrow Agreement, the City will have defeased the Series 2003 Bonds. In the opinion of Bond Counsel, the Series 2003 Bonds will no longer be payable from, or secured by a pledge of, the Tax Receipts, but will be payable solely from the principal of and the interest on the Defeasance Securities and uninvested cash held for such purpose by the Escrow Trustee, and the pledge of Tax Receipts securing the Series 2003 Bonds, together with all other obligations of the City to the holders of the Series 2003 Bonds under the trust indenture securing the Series 2003 Bonds, will be discharged. THE PROJECTS Walton Arts Center Project. The total cost of the Walton Arts Center expansion and renovation is estimated to be $16.5 million. Approximately $6,953,000 of this amount will be funded with proceeds of the Series 2014 Bonds, with the remainder to be provided by private donations solicited by the Walton Arts Center Foundation or from existing assets of the Foundation. The City's funding share of the Walton Arts Center Project will be limited to available proceeds of the Series 2014 Bonds deposited in the Walton Arts Center Account of the Projects Fund. Such proceeds are expected to be applied to costs associated with site and structural improvements for the Walton Arts Center lobby and Starr Theater, the back staging area of the theater, lobby restrooms, and electrical and HVAC infrastructure enhancements. Park Project. The Park Project is the first phase of the acquisition, construction and equipping of a regional park facility in the southwestern portion of the City near the intersection of U.S. Interstate 40 and Cato Springs Road. The current estimated total cost of the regional park is $28 million to be completed in phases as funding becomes available. Approximately $3,527,000 of the proceeds of the Series 2014 Bonds will be deposited into the Park Account of the Projects Fund and applied to pay for Phase One of the regional park. Phase One components are expected to include baseball fields and soccer fields and related improvements, as well as a pavilion and playground to be located on the "Great Lawn" of the park. ESTIMATED SOURCES AND USES OF FUNDS The proceeds of the Series 2014 Bonds and other available moneys are expected to be used as follows: Sources of Funds(i) Series 2014 Bond Proceeds $ 10,995,000 Series 2003 Bond Fund 56,090 Net Reoffering Premium Total Sources: $ Uses of Funds(l) Transfer to Escrow Trustee $ 653,077 Deposit to Projects Fund (Walton Arts Center Project) 6,953,000 Deposit to Projects Fund (Park Project) 3,527,000 Purchase of Debt Service Reserve Fund Insurance Policy Purchase of Municipal Bond Insurance Policy Costs of Issuance and Underwriter's Discount Total Uses: Preliminary; subject to change. SI] ESTIMATED DEBT SERVICE REQUIREMENTS As of the date of closing, the Series 2014 Bonds will constitute the only debt obligations secured by the Tax Receipts. The following table sets forth estimates of the amounts required to pay scheduled principal of and interest on the Series 2014 Bonds during each year: (1) Series 2014 Series 2014 Total Debt Year Principal Interest(() Service 2015 $ 295,000 $ 385,544 $ 680,544 2016 300,000 379,644 679,644 2017 310,000 373,644 683,644 2018 310,000 367,444 677,444 2019 315,000 359,694 674,694 2020 330,000 351,818 681,818 2021 345,000 341,919 686,919 2022 350,000 331,569 681,569 2023 360,000 321,069 681,069 2024 375,000 306,668 681,668 2025 390,000 291,669 681,669 2026 405,000 276,069 681,069 2027 425,000 259,869 684,869 2028 440,000 242,868 682,868 2029 455,000 225,269 680,269 2030 475,000 207,069 682,069 2031 490,000 190,444 680,444 2032 510,000 173,293 683,293 2033 525,000 155,444 680,444 2034 545,000 137,069 682,069 2035 565,000 117,994 682,994 2036 585,000 96,100 681,100 2037 610,000 73,431 683,431 2038 630,000 49,793 679,793 2039 655,000 25,381 680,381 Totals: 510.995.000 $6.040.775 $17.035.775 Preliminary; subject to change. Assuming for purposes of this Preliminary Official Statement, an average coupon rate on the Series 2014 Bonds of 3.71% per annum. ESTIMATED DEBT SERVICE COVERAGE The following table shows estimated maximum annual debt service coverage with respect to the Series 2014 Bonds utilizing Tax Receipts for the twelve months ended August 31, 2014. Historical Tax Receipts([) $2,677,468 Maximum Annual Debt Service Requirement on the Series 2014 Bonds (2) $ 686,919 Maximum Annual Debt Service Coverage 3.90 X See the caption "SECURITY FOR THE BONDS -Tax Receipts" herein. (2) Preliminary; subject to change. See the caption "ESTIMATED DEBT SERVICE REQUIREMENTS" herein. THE COVERAGE NUMBERS SET FORTH ABOVE ARE BASED ON HISTORICAL COLLECTIONS OF TAX RECEIPTS CALCULATED ON AN ACCRUAL BASIS. ACTUAL COLLECTIONS OF TAX RECEIPTS WILL DEPEND ON NUMEROUS FACTORS, AND THERE CAN BE NO ASSURANCE THAT FUTURE TAX RECEIPTS AVAILABLE TO PAY DEBT SERVICE ON THE SERIES 2014 BONDS WILL APPROXIMATE SUCH HISTORICAL RESULTS. THE CITY General. The City is a city of the first class organized and existing under the laws of the State of Arkansas. The City is the seat of government of Washington County (the "County") and is the fourth largest city in the State. The City is located in the Metropolitan Statistical Area of Fayetteville/Springdale/Rogers (the "MSA"), which includes all of Washington and Benton Counties in the northwest comer of the State and is approximately 185 miles northwest of Little Rock, Arkansas, 125 miles east of Tulsa, Oklahoma, and 210 miles south of Kansas City, Missouri. The City is served by U.S. Interstate 49, U.S. Highways 62 and 71, and State Highways 16, 45, 112, 156, 180 and 265. The Burlington Northern Railroad has several lines running through the City, and a general aviation airport with a 6,006 -foot runway is available for limited commuter travel. The Northwest Arkansas Regional Airport is located approximately 40 minutes from downtown Fayetteville and provides daily flights to numerous venues. Government. The City currently operates under the Mayor -Council form of government pursuant to which a mayor, city attorney, city clerk and eight aldermen are elected, two from each of the City's four wards. The mayor, city attorney and city clerk are full-time positions elected to four-year terms. Aldermen also serve four-year terms. The City's elected officials and the dates on which their respective terms expire are as follows: Name Office Term Expires Lioneld Jordan Mayor 12/31/16 Kit Williams City Attorney 12/31/14 Sondra Smith City Clerk 12/31/16 Rhonda Adams Alderman 12/31/14 Adella Gray Alderman 12/31/14 Mark Kinion Alderman 12/31/14 Alan Long Alderman 12/31/16 Sarah Marsh Alderman 12/31/16 Matthew Petty Alderman 12/31/16 Martin Schoppmeyer, Jr. Alderman 12/31/16 Justin Tennant Alderman 12/31/14 Population. The following is a table of population changes for the City, the MSA and the State of Arkansas, according to the United States Census Bureau: 12 City of State of Year Fayetteville MSA Arkansas 1960 20,274 92,069 1,786,272 1970 30,729 127,846 1,923,322 1980 36,608 178,609 2,286,435 1990 42,099 210,908 2,350,624 2000 58,047 311,121 2,673,400 2010 73,580 463,204 2,915,918 12 Economic Data. Per capita personal income figures for the MSA and the State of Arkansas areas follows: Source: Discover Arkansas, Data Analysis. Retail sales figures for the MSA and the State are as follows: Real Property State of Year MSA Arkansas 2003 $25,387 $25,434 2004 27,420 26,846 2005 28,685 27,908 2006 30,168 29,459 2007 31,586 31,517 2008 32,537 32,257 2009 32,313 31,688 2010 33,309 32,373 2011 34,130 33,740 2012 35,437 34,723 Source: Discover Arkansas, Data Analysis. Retail sales figures for the MSA and the State are as follows: o' Does not include McDonald County, Missouri Demographics USA, County Edition, 2003-2008. Nielsen Consumer Buying Power: 2009 -forward. The following table shows the total assessed value of non-utility real and personal property within the City for the years indicated: Year Real Property State of MSA as % of Year MSA Arkansas State of Arkansas 2003 $3,968,812,000 29,920,716,000 13.3% 2004 4,610,051,000 31,436,983,000 14.7% 2005 5,287,158,000 34,290,412,000 15.4% 2006 7,251,810,000 38,843,312,000 18.7% 2007 8,250,140,000 43,504,752,000 19.0% 2008 8,291,415,000 43,820,789,000 18.9% 2009 5,527,678,00001 35,498,326,000 15.6% 2010 6,133,565,000 0. 35,247,629,000 17.4% 2011 7,236,224,000 0. 42,160,822,000 17.2% 2012 7,231,740,00007 42,262,644,000 17.1% o' Does not include McDonald County, Missouri Demographics USA, County Edition, 2003-2008. Nielsen Consumer Buying Power: 2009 -forward. The following table shows the total assessed value of non-utility real and personal property within the City for the years indicated: Year Real Property Personal Property Total 2003 $565,846,525 $167,638,657 $733,485,182 2004 649,361,820 183,102,702 832,464,522 2005 729,172,106 212,694,254 941,866,260 2006 802,306,156 198,469,816 1,000,775,972 2007 942,667,570 203,094,564 1,145,762,134 2008 1,026,022,871 203,311,701 1,232,334,572 2009 1,067,947, 653 191,973,349 1,299,921,002 2010 1,025,933,870 188,130,198 1,214,064,068 2011 1,046,174,941 199,900,209 1,246,075,150 2012 1,063,617,013 203,289,225 1,266,906,238 Source: Washington County Tax Assessor's Office. The assessed value represents 20% of the appraised value of property. 13 Building permits issued by the City(l) are shown below for the years indicated: Residential Building Permits Commercial Building Permits Value of All Building Permits 2010 2011 2012 256 273 394 16 29 18 $79,103,682 $81,146,187 $251,041,427 2013 2014"' 379 289 24 17 $157,970,433 $139,775,340 "I Does not include building activity of the University of Arkansas, school permits and additions/alterations to existing structures. (3) For the eight months ended August 31, 2014. Source: City of Fayetteville. Unemployment figures for the MSA and the State of Arkansas, according to the U.S. Bureau of Labor Statistics, are as follows: Year MSA State of Arkansas 2004 3.8%n 5.6%n 2005 3.3% 5.3% 2006 3.6% 5.4% 2007 3.9% 5.4% 2008 3.8%n 5.2% 2009 6.1% 7.4% 2010 6.5% 7.9% 2011 6.2% 8.0% 2012 5.6% 7.3% 2013 4.9% 7.5% 2014* 4.9% 6.2% * August, 2014 only; preliminary. Employment and Industry. The principal campus of the University of Arkansas is located in the City and had total enrollment for the Fall semester of 2014 of approximately 26,300. On the Fayetteville campus, the University employs approximately 4,396 faculty, administrative, secretarial, clerical and maintenance personnel in both full-time and part-time positions, making the University the largest employer in the City. Other major employers in the City, their products or services and approximate number of employees are set forth below: Employer Washington Regional Med Center Veteran's Admin. Medical Ctr. Washington Co. Government Fayetteville School District Superior Industries City of Fayetteville Wal-Mart #9149 Tyson Mexican Original Wal-Mart #144 Source: 2013 City of Fayetteville CAFR. Product or Service Employees Hospital 1,500 Hospital 1,442 Government 1,386 Education 1,340 Transportation equipment 822 Government 731 Optical lab 670 Food products 631 Retail 550 14 THE COMMISSION Pursuant to the authority of the Act, the Advertising and Promotion Commission of the City of Fayetteville, Arkansas (the "Commission") was created by ordinance of the City dated March 1, 1977. The Commission is responsible for the advertising and promotion of the City and its environs and oversees the leasing of certain City - owned convention facilities to the Board of Trustees of the University of Arkansas. The Commission is composed of four members appointed by the City Council, who are hotel, motel or restaurant owners or managers. The three remaining members are two aldermen on the City Council and one member from the public at large. The present members of the Commission are as follows: Member Ching Mong, Chairman Matt Behrend Robert Ferrell Tim Freemen Matthew Petty Justin Tennant Hannah Withers Term Expires Tourism Appointee, March 31, 2018 Tourism Appointee, March 31, 2015 At -Large Appointee, March 31, 2017 Tourism Appointee, March 31, 2016 City Council Member City Council Member Tourism Appointee, March 31, 2017 OF CERTAIN TERMS The following are definitions of certain terms used in this Official Statement: "Account" means an Account established by Article V of the Indenture. "Act" means the Advertising and Promotion Commission Act, codified as Arkansas Code Annotated (2008 Repl. & 2013 Supp.) Sections 26-75-601 et seq., as from time to time amended. "Additional Bonds" means Bonds in addition to the Series 2014 Bonds which are issued under the provisions of Section 212 of the Indenture. "Additional Facilities" means land, buildings, structures, machinery, furniture, fixtures, equipment and all related or necessary tangible property constituting improvements which are permitted to be financed under the provisions of the Act. "Annual Debt Service" means, with respect to all or any particular amount of Bonds, the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the amount of such payment which is provided from the proceeds of the sale of Bonds or from sources other than Tax Receipts. "Authorized Representative" means either the Mayor or the Finance Director of the City and such additional persons as from time to time may be designated to act on behalf of the City by a Certificate furnished to the Trustee containing the specimen signature thereof and executed on behalf of the City by its Mayor. "Authorizing Ordinance" means Ordinance No. 5713, adopted by the City on September 16, 2014, which authorized the issuance of the Series 2014 Bonds pursuant to the Indenture. "BAM" means Build America Mutual Assurance Company, a New York domiciled municipal insurance corporation. "Beneficial Owner" means any Person who acquires beneficial ownership interest in a Bond held by the Securities Depository. In determining the Beneficial Owner of any Bond, the Trustee may rely exclusively upon written representations made and information given to the Trustee by the Securities Depository or its Participants with respect to any Bond held by the Securities Depository in which a beneficial ownership interest is claimed. "Bond Counsel" means any firm of nationally recognized municipal bond counsel selected by the City and acceptable to the Trustee. "Bond Fund" means the fund by that name created and established in the Indenture. "Bonds" mean the Series 2014 Bonds and all Additional Bonds, if any, issued by the City pursuant to the Indenture. "Book -Entry System" means the book -entry system maintained by the Securities Depository and described in the Indenture. 15 "Certificate" means a document signed by an Authorized Representative of the City attesting to or acknowledging the circumstances or other matters therein stated. "City" means the City of Fayetteville, Arkansas, a municipality and political subdivision under the laws of the State of Arkansas. "City Clerk" means the person holding the office and performing the duties of the City Clerk of the City. "Closing Date" means, with respect to any series of Bonds, the date upon which there is an exchange of such series of Bonds for the proceeds representing the purchase price for such series of Bonds by the Original Purchaser or Purchasers thereof. "Code" means the Internal Revenue Code of 1986, as from time to time amended, and applicable regulations issued or proposed thereunder. "Commission" means the Advertising and Promotion Commission of the City of Fayetteville, Arkansas, or any successor thereto. "Completion Date" means the date upon which a Project is first ready for normal continuous operation or the date upon which damaged Project facilities are replaced in normal and continuous operation. "Continuing Disclosure AgreemenC means, collectively, each Continuing Disclosure Agreement between the City and the Trustee, dated the date of issuance and delivery of a series of Bonds, as originally executed and as amended from time to time in accordance with the terms thereof. "Cost of Issuance Fund" means the fund by that name created and established in the Indenture. "Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, including, but not limited to, underwriting discounts, fees and expenses, election expenses, publication expenses, expenses of printing, reproducing, filing and recording documents, initial fees and charges of the Trustee and any Paying Agent, fees and expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement for the Bonds, costs of execution, transportation and safekeeping of the Bonds, and other costs, charges and fees incurred in connection with the foregoing. "Debt Service" means, with respect to all or any particular amount of Bonds for any Payment Period, the amount required to pay the sum of the interest on such Bonds payable during the Payment Period and the principal of, and any other amount required to effect any mandatory redemption of, such Bonds, if any, during the Payment Period. "Debt Service Reserve Fund" means the fund by that name created and established in the Indenture. "Election Ordinance" means Ordinance No. 5605, adopted by the City on August 6, 2013, which called a special election on November 12, 2013, on the issuance of the Series 2014 Bonds. "Event of Default" means any event of default specified in Section 801 of the Indenture. "Fiscal Year" means the 12 -month period used, at any time, by the City for accounting purposes, which may be the calendar year. "Fund" means a fund confirmed or established by the Indenture. "Government Securities" means (i) direct obligations of the United States of America, (ii) obligations on which the full and timely payment of principal and interest is fully and unconditionally guaranteed by the United States of America (including any such securities issued or held in book -entry form on the books of the Department of Treasury of the United States of America), and (iii) evidences of direct ownership or proportionate or individual interest in future interest or principal payments on specified direct obligations of, or obligations on which the full and timely payment of principal and interest is fully and unconditionally guaranteed by, the United States of America, which obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian in form and substance satisfactory to the Trustee. "Holder" or "Bondholder" or "Owner of the Bonds" means the registered owner of any Bond. "Indenture" means the Trust Indenture dated as of November 1, 2014, between the City and the Trustee, pursuant to which the Bonds are issued, and any amendments and supplements thereto. "Interest Payment Date" means any date on which interest is payable on the Bonds. "Investment Obligations" means, if and to the extent the same are at the time legal for investment of funds held under this Indenture: V (a) Cash deposits, certificates of deposits or money market deposits (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with Government Obligations); (b) Government Securities; (c) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America: U.S. Export -Import Bank (Eximbank); Rural Economic Community Development Administration; Federal Financing Bank; General Services Administration; U.S. Maritime Administration; U.S. Department of Housing and Urban Development (PHAs); Small Business Administration; Government National Mortgage Association (GNMA); Federal Housing Administration; and Farm Credit System Financial Assistance Corporation. (d) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: (i) Senior debt obligations rated in the highest long-term rating category by at least two nationally recognized rating agencies issued by the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC); and (ii) Senior debt obligations of the Federal Home Loan Bank System; (e) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which either (i) have a rating on their short-term certificates of deposit on the date of purchase in the highest short-term rating category of at least two nationally recognized rating agencies, (ii) are insured at all times by the Federal Deposit Insurance Corporation, or (iii) are collateralized with direct obligations of the United States of America at 102% valued daily. All such certificates must mature no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (f) Commercial paper which is rated at the time of purchase in the highest short-term rating category of at least two nationally recognized rating agencies and which matures no more than 270 days after the date of purchase; (g) Investments in (i) money market funds subject to SEC Rule 2a-7 and rated in the highest short-term rating category of at least one of S&P and Moody's and (ii) public sector investment pools operated pursuant to SEC Rule 2a-7 in which the City's deposit shall not exceed 5% of the aggregate pool balance at any time and such pool is rated in one of the two highest short-term rating categories of at least one of S&P and Moody's; (h) Pre -refunded municipal obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (i) Which are rated, based on an irrevocable escrow account or fund (the "Escrow"), in the highest long-term rating category of at least two nationally recognized rating agencies; or (ii) (I) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or direct obligations of the United States of America, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (II) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; (i) General obligations of states with a short-term rating in one of the two highest rating categories and a long-term rating in one of the two highest rating categories of at least two nationally recognized rating agencies. In the event such obligations are variable rate obligations, the interest rate on such obligations must be reset not less frequently than annually; and 17 0) Any cash sweep account maintained by the Trustee and consisting of investments described in clauses (a) through (i). "Mayor" means the person holding the office and performing the duties of the Mayor of the City. "Moody's" means Moody's Investors Service. "Original Purchaser" means the first purchaser(s) of a series of Bonds from the City. "Outstanding" means, as of any date of computation, Bonds theretofore or thereupon being delivered under the Indenture, except: (a) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or prior to such date for cancellation; (b) Bonds deemed to be paid in accordance with Article VII of the Indenture; and (c) Bonds in lieu of or in exchange or substitution for which other Bonds shall have been authenticated and delivered pursuant to the Indenture; provided, however, that in the event that the principal and/or interest due on the Series 2014 Bonds shall be paid by BAM pursuant to the Policy, said Series 2014 Bonds shall be deemed to remain Outstanding for all purposes. "Park Project" means the acquisition, construction and equipping of a regional park, financed in part with the proceeds of the Series 2014 Bonds. "Participants" means those financial institutions for whom the Securities Depository effects book -entry transfers and pledges of securities deposited with the Securities Depository in the Book -Entry System, as such listing of Participants exists at the time of such reference. "Payment Period" means a period from, but not including, a Principal Payment Date up to, and including, the next succeeding Principal Payment Date. "Person" means any natural person, firm, association, corporation, limited liability company, partnership, joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Policy" means the municipal bond insurance policy issued by BAM insuring the payment when due of the principal of and interest on the Series 2014 Bonds as provided therein. "Principal Payment Date" means any date on which principal is payable on the Bonds, whether at maturity, by operation of the mandatory sinking fund, or otherwise. "Projects" means the Walton Arts Center Project, the Park Project and any Additional Facilities that may be acquired, constructed and equipped in the future with the proceeds of Bonds. "Project Costs" means, to the extent permitted by the Act or other applicable laws, with respect to a Project, all costs of planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation, including obtaining governmental approvals, certificates, permits and licenses with respect thereto, heretofore or hereafter paid or incurred by or on behalf of the City and which shall include, but shall not be limited to: (a) interest accruing in whole or in part on the Bonds prior to and during construction of a Project, including all amounts required by this Indenture to be paid from the proceeds of the Bonds into the Bond Fund; (b) preliminary investigation and development costs, engineering fees, contractors' fees, labor costs, the cost of materials, equipment, utility services and supplies, costs of obtaining permits, licenses and approvals, costs of real property, insurance premiums, legal and financing fees and costs, administrative and general costs, and all other costs properly allocable to the acquisition, construction and equipping of a Project and placing the same in operation; (c) all costs relating to injury and damage claims arising out of the acquisition, construction or equipping of a Project; (d) all other costs incurred in connection with, and properly allocable to, the acquisition, construction and equipping of a Project; and In (e) amounts to pay or reimburse the City or any City fund for expenses of the City incident and properly allocable to such planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation of a Project. "Projects Fund" means the fund by that name created and established in Section 501 of this Indenture. "Qualified Engineer" means a consulting engineer or firm of consulting engineers, whether or not in the regular employ of the City. "Rebate Fund" means the fund by that name created and established in the Indenture. "Record Date" means the close of business on the fifteenth day of the calendar month next preceding each Interest Payment Date on the Bonds or, if such day shall not be a business day, the immediately preceding business day. "Redemption Fund" means the fund by that name established in the Indenture. "Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized Representative and including, without limitation, the specific information required by the Indenture. "Reserve Policy" means the debt service reserve insurance policy issued by BAM guaranteeing certain payments into the Debt Service Reserve Fund with respect to the Series 2014 Bonds as provided therein and subject to the limitations set forth therein. "Reserve Requirement" means, at any particular time, an amount equal to the least of (a) 10% of the face amount of each series of Outstanding Bonds, (b) the maximum Annual Debt Service on each series of Outstanding Bonds, or (c) 1.25 times the average Annual Debt Service on each series of Outstanding Bonds. "Revenue Fund" means the fund by that name confirmed and continued in the Indenture. "S&P" means Standard & Poor's Ratings Services, a Division of the McGraw-Hill Companies, Inc. "Securities Depository" means The Depository Trust Company, a limited -purpose trust company organized under the laws of the State of New York, or its nominee, and its successors and assigns, or any other depository institution appointed by the City to act as depository for the Bonds in connection with the Book -Entry System. "Series 2003 Bonds" means the $6,335,000 City of Fayetteville, Arkansas Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003, dated July 1, 2003, of which $650,000 remains Outstanding. "Series 2014 Bonds" means the City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014, dated November 1, 2014, issued under and secured by the Indenture in the aggregate principal amount of $10,995,000*. "State" means the State of Arkansas. "Supplemental Indenture" means any indenture supplemental to or amendatory of the Indenture. "Tax" means the one percent (1%) tax (the "Tax") originally levied in 1977 upon (i) the gross receipts and gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City, and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants and similar businesses from the sale of prepared food and beverages for on -premises and off - premises consumption. "Tax Receipts" means receipts derived by the City from the levy of the Tax. "Tax Regulatory Agreement" means with respect to any series of Bonds, that Tax Regulatory Agreement of the City relating to maintenance of the excludability of interest on such Bonds from gross income for federal income tax purposes, delivered in connection with the issuance of such series of Bonds. "Trustee" and "Paying Agent" means the trustee and paying agent for the time being, whether original or successor, with the same institution to always occupy both positions, and with the original Trustee and Paying Agent being Simmons First Trust Company, N.A., Pine Bluff, Arkansas. "Trust Estate" means the property described in the granting clauses of the Indenture. "Walton Arts Center Project" means the expansion and renovation of the Walton Arts Center, financed in part with the proceeds of the Series 2014 Bonds. Preliminary; subject to change. 19 SUMMARY OF THE INDENTURE The following statements are brief summaries of certain provisions of the Indenture. The statements do not purport to be complete, and reference is made to the Indenture, copies of which are available for examination at the offices of the City Clerk, for a full statement thereof. Funds and Accounts. The Tax Receipts are pledged by the Indenture to the payment of the principal of and interest on the Bonds. The Indenture confirms and continues the Revenue Fund referenced in the trust indenture securing the Series 2003 Bonds. In addition, the following Funds and Accounts are established with the Trustee in connection with the Bonds: Funds and Accounts Bond Fund, and a Principal Account and an Interest Account therein Debt Service Reserve Fund Redemption Fund Projects Fund, and a Park Account and a Walton Arts Center Account therein Cost of Issuance Fund Rebate Fund Application of Tax Receipts. The application of Tax Receipts is as follows (a) Revenue Fund. All Tax Receipts shall, as and when received, be deposited into the Revenue Fund. The Revenue Fund is maintained by the City as a segregated fund. Moneys at any time on deposit in the Revenue Fund are to be applied, as needed, on a monthly basis to provide for the payment of Debt Service on the Bonds, to the maintenance of the Debt Service Reserve Fund, to the payment of any arbitrage rebate due under Section 148(f) of the Code, and to the payment of fees and expenses of the Trustee and any Paying Agent, at the times and in the amounts set forth as follows: (b) Bond Fund. On or before the fifteenth day of each month, commencing December 15, 2014, there shall be transferred from the Revenue Fund (i) into the Interest Account of the Bond Fund, an amount equal to 1/6 of the interest on the Bonds due on the next Interest Payment Date, and (ii) into the Principal Account of the Bond Fund, an amount equal to 1/12 of the principal on the Bonds due on the next Principal Payment Date. Moneys in the Bond Fund shall be used solely for the purpose of paying Annual Debt Service on the Bonds, as provided in the Indenture. The Trustee shall withdraw from the Bond Fund, on the date of any principal or interest payment, an amount equal to such payment for the sole purpose of paying the same. If Tax Receipts in the Revenue Fund are insufficient to make the required monthly payment into the Bond Fund, the amount of any such deficiency in the payment made shall be added to the amount otherwise required to be paid into the Bond Fund in the next succeeding month. When the moneys held in the Bond Fund, the Debt Service Reserve Fund and the Redemption Fund shall be and remain sufficient to pay in full the principal of and interest on all Bonds then Outstanding in accordance with the Indenture, together with the required fees and expenses to be paid or reimbursed to the Trustee and Paying Agent, the City shall have no further obligation to make payments into such Funds. (c) Debt Service Reserve Fund. See the caption "SECURITY FOR THE BONDS — Debt Service Reserve" herein. (d) Redemption Fund. There shall be deposited to the credit of the Redemption Fund all moneys necessary to effect an optional redemption of the Bonds and all remaining moneys transferred from the Projects Fund upon completion of a Project. Moneys in the Redemption Fund shall be transferred to the Principal Account of the Bond Fund at such times as may be necessary to effectuate redemptions of the Bonds on the first available redemption date. See the caption "THE SERIES 2014 BONDS — Redemption" herein. (e) Cost of Issuance Fund. A portion of the proceeds of the Series 2014 Bonds shall be deposited to the credit of the Cost of Issuance Fund. The Trustee shall pay those Costs of Issuance as directed by the City pursuant to a Certificate delivered on a Closing Date. After all Costs of Issuance have been paid with respect to a series of Bonds, any remaining moneys in the Cost of Issuance Fund shall be transferred to the Interest Account of the Bond Fund. 20 (f) Projects Fund. A portion of the proceeds of the Series 2014 Bonds shall be deposited to the Park Account and the Walton Arts Center Account of the Projects Fund. Amounts in the Accounts of the Projects Fund shall be expended and applied for the payment of Project Costs attributable to the related Project. Disbursements shall be made from the Projects Fund on the basis of Requisitions in the form specified in the Indenture. Within ninety (90) days following completion of a Project or portion thereof being financed by the Bonds, the City shall deliver to the Trustee its Certificate stating that such project or applicable portion thereof is complete, and the Trustee shall transfer the remaining moneys in the applicable Account of the Projects Fund (save and except moneys needed to satisfy unpaid Project Costs) to the Redemption Fund for application to the retirement of Bonds by redemption or purchase as provided in the Indenture. (g) Rebate Fund. The Trustee shall establish and maintain, separate and apart from any other Funds and Accounts established and maintained under the Indenture, the Rebate Fund, which Fund is not pledged to the payment of any Bonds. Subject to transfer to the United States in payment of any arbitrage rebate due under Section 148(f) of the Code, all moneys at any time deposited in the Rebate Fund shall be held by the Trustee in trust, and neither the City nor the Owner of any Bond shall have any rights in or claim to such money. Any amounts remaining in the Rebate Fund after payment in full of the rebate amount owing to the United States, within sixty (60) days after the date on which the last Bond is redeemed, shall be transferred to the Revenue Fund. Any moneys remaining in the Revenue Fund following the required transfers described above may be used for any lawful purpose as determined by the Commission. Investment of Funds. At the direction of the City or absent such direction, the Trustee shall invest moneys in Funds or Accounts held by the Trustee in Investment Obligations with maturity or redemption dates consistent with the times at which said moneys will be required for the purposes provided in the Indenture; provided, however, the stated maturity dates of Investment Obligations of Debt Service Reserve Fund moneys shall not exceed five years from the date of investment therein. Moneys in separate Funds or Accounts may be commingled for the purpose of investment. Obligations purchased as an investment of moneys in any Fund or Account created by the Indenture shall be deemed at all times to be a part of such Fund or Account, and any income or loss due to an investment thereof shall be charged to the respective Fund or Account for which the investment was made except as otherwise provided in the Indenture. Valuation of Funds and Accounts. Investments in any Fund or Account shall be evaluated monthly by the Trustee. For the purpose of determining the amount in any Fund or Account, the City and the Trustee shall value all Investment Obligations credited to such Fund or Account at fair market value. The Trustee shall determine the fair market value based on accepted industry standards and from accepted industry providers. The fair market value of certificates of deposit and bankers' acceptances shall be equal to the face amount thereof plus accrued interest thereon. The fair market value of any Investment Obligation that cannot be determined in the manner provided above shall be established pursuant to the prior agreement of the City and the Trustee. The Trustee shall sell or present for redemption any Investment Obligations as necessary in order to provide money for the purpose of making any payment required under the Indenture, and the Trustee shall not be liable for any loss resulting from any such sale. Responsibility of Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of moneys made by it at the direction of the City. Instruments of Further Assurance. At the request of the Trustee, the City shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, ordinances, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, pledging, assigning and confirming of all and singular the Tax Receipts and all other moneys pledged or assigned by the Indenture, or intended so to be, or which the City may become bound to pledge or assign. Tax Covenants. The City shall not use or permit the use of any Bond proceeds or any other funds of the City, directly or indirectly, in any manner, and will not take or permit to be taken any other action or actions which would adversely effect the exclusion of interest on any Bond from gross income for federal income tax purposes. No part of the proceeds of the Bonds shall at any time be used, directly or indirectly, to acquire securities or obligations the acquisition of which would cause any of such Bonds to be an "arbitrage bond" as defined in Sections 148(a) and (b) of the Code. The City agrees that so long as any of the Bonds remain Outstanding, it will comply with the provisions of each applicable Tax Regulatory Agreement. 21 Defeasance. Any Bond shall be deemed to be paid within the meaning of the Indenture when payment of the principal of and premium, if any, and interest on such Bond (whether at maturity or upon redemption as provided in the Indenture, or otherwise), either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for by irrevocably depositing with the Trustee, in trust and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such payment or (2) Government Securities (provided that such deposit will not affect the tax-exempt status of the interest on any of the Bonds or cause any of the Bonds to be classified as "arbitrage bonds" within the meaning of Section 148(a) of the Code, as reflected in an opinion of Bond Counsel delivered to the Trustee), maturing as to principal and interest in such amounts and at such times as will provide sufficient moneys to make such payment, and all necessary and proper fees, compensation and expenses of the Trustee and any Paying Agent pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of the Trustee and any said Paying Agent. Events of Default. Each of the following events shall constitute and is referred to in the Indenture as an "Event of Default": (a) Default in the due and punctual payment of any interest on any Bond; (b) Default in the due and punctual payment of the principal of or premium, if any, on any Bond, whether at the stated maturity thereof, or upon proceedings for redemption thereof, or upon the maturity thereof by declaration; (c) Default in the payment of any other amount required to be paid under the Indenture or the performance or observance of any other of the covenants, agreements or conditions contained in the Indenture, or in the Bonds issued under the Indenture, and continuance thereof for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied, shall have been given to the City by the Trustee, which may give such notice in its discretion and shall give such notice at the written request of Holders of not less than fifty-one percent (51%) in aggregate principal amount of the Bonds then Outstanding, unless the Trustee, or the Trustee and Holders of an aggregate principal amount of Bonds not less than the aggregate principal amount of Bonds the Holders of which requested such notice, as the case may be, shall agree in writing to an extension of such period prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the Trustee will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the City within such period and is being diligently pursued; (d) The filing of a petition in bankruptcy by or against the City under the United States Bankruptcy Code or the commencement of a proceeding by or against the City under any other law concerning insolvency, reorganization or bankruptcy; and (e) If the State has limited or altered the rights of the City pursuant to the Act, as in force on the date of the Indenture, to fulfill the terms of any agreements made with the Trustee or the Bondholders or in any way impaired the rights and remedies of the Trustee or the Bondholders while any Bonds are Outstanding. The term "default" as used in clauses (a), (b) and (c) above shall mean default by the City in the performance or observance of any of the covenants, agreements or conditions on its part contained in the Indenture, or in the Bonds Outstanding thereunder, exclusive of any period of grace required to constitute a default an "Event of Default' as described above. Acceleration. Upon the occurrence of an Event of Default, the Trustee may, with consent of BAM, and shall, upon the written request of BAM or of the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding with the consent of BAM, by notice in writing delivered to the City, declare the principal of all Bonds then Outstanding, together with any premium and the interest accrued thereon, immediately due and payable, and such principal and interest shall thereupon become and be immediately due and payable. Other Remedies; Rights of Bondholders. Upon the occurrence of an Event of Default, the Trustee may, as an alternative, pursue any available remedy by suit at law or in equity, including, without limitation, mandamus to enforce the payment of the principal of and premium, if any, and interest on the Bonds then Outstanding. If an Event of Default shall have occurred, and if it shall have been requested so to do by the Holders of 51% in aggregate principal amount of Bonds Outstanding and if it shall have been indemnified as provided in the Indenture, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred upon it by the Indenture as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Bondholders. 22 No remedy by the terms of the Indenture conferred upon or reserved to the Trustee (or to the Bondholders) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given under the Indenture or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or acquiescence therein; and every such right and power may be exercised from time to time and as often as may be deemed expedient. No waiver of any default or Event of Default under the Indenture, whether by the Trustee or by the Bondholders, shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. Rights and Remedies of Bondholders. No Holder of any Bond shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of the Indenture or for the execution of any trust thereof or for the appointment of a receiver or any other remedy thereunder, unless a default has occurred of which the Trustee has been notified as provided in the Indenture, or of which by the Indenture it is deemed to have notice, nor unless such default shall have become an Event of Default and the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding shall have made written request to the Trustee and shall have offered it reasonable opportunity either to proceed to exercise the powers granted or to institute such action, suit, or proceeding in its own name, nor unless also they have offered to the Trustee indemnity as provided in the Indenture nor unless the Trustee shall thereafter fail or refuse to exercise the powers granted, or to institute such action, suit, or proceeding in its own name; and such notification, request and offer of indemnity are declared in every such case at the option of the Trustee to be conditions precedent to the execution of the powers and trusts of the Indenture, and to any action or cause of action for the enforcement of the Indenture or for the appointment of a receiver or for any other remedy thereunder; it being understood and intended that no one or more Holders of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of the Indenture by action of the Holder or Holders or to enforce any right under the Indenture except in the manner therein provided, and that all proceedings at law or in equity shall be instituted, held and maintained in the manner therein provided for the equal benefit of the Holders of all Bonds Outstanding thereunder. Nothing in the Indenture contained shall, however, affect or impair the right of any Bondholders to enforce the payment of the principal of and premium, if any, and interest on any Bonds at and after the maturity thereof, or the obligation of the City to pay the principal of and premium, if any, and interest on each of the Bonds issued under the Indenture to the respective Holders thereof at the time and place in said Bonds expressed. Consent of BAM Upon Event of Default. Anything in the Indenture to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default, BAM shall be entitled to control and direct the enforcement of all rights and remedies granted to the Bondholders or to the Trustee for the benefit of the Bondholders under the Indenture, including, without limitation: (i) the right to accelerate the principal of the Series 2014 Bonds, and (ii) the right to annul any declaration of acceleration, and BAM shall also be entitled to approve all waivers of Events of Default. Supplemental Indentures Not Requiring Consent of Bondholders. The City and the Trustee may, from time to time and at any time, without the consent of or notice to the Bondholders, enter into Supplemental Indentures as follows: (a) to cure any formal defect, omission, inconsistency or ambiguity in the Indenture; (b) to grant to or confer or impose upon the Trustee for the benefit of the Bondholders any additional rights, remedies, powers, authority, security, liabilities or duties which may lawfully be granted, conferred or imposed and which are not contrary to or inconsistent with the Indenture as theretofore in effect, provided that no such additional liabilities or duties shall be imposed upon the Trustee without its consent; (c) to add to the covenants and agreements of, and limitations and restrictions upon, the City in the Indenture other covenants, agreements, limitations and restrictions to be observed by the City which are not contrary to or inconsistent with the Indenture as theretofore in effect; (d) to confirm, as further assurance, any pledge under, and the subjection to any claim, lien or pledge created or to be created by, the Indenture, of the Trust Estate or of any other moneys, securities or funds; (e) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time amended; (f) to authorize the issuance and sale of one or more series of Additional Bonds; 23 (g) to make such additions, deletions or modifications as may be necessary to assure compliance with Section 148(f) of the Code relating to required rebate to the United States or otherwise as may be necessary to assure exemption from federal income taxation of interest on the Bonds; or (h) to modify, alter, amend or supplement the Indenture in any other respect which is not materially adverse to the Bondholders and which does not involve a change described in clause (a), (b), (c), (d), (e) or (f) below and which, in the judgment of the Trustee, is not to the prejudice of the Trustee. Supplemental Indentures Requiring Consent of Bondholders. Subject to the terms and provisions contained above and in this paragraph, and not otherwise, BAM and the Holders of not less than 2/3 in aggregate principal amount of the Bonds then Outstanding shall be required, from time to time, anything contained in the Indenture to the contrary notwithstanding, to consent to and approve the execution by the City and the Trustee of such indenture or indentures supplemental to the Indenture as shall be deemed necessary and desirable by the City for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in the Indenture or in any Supplemental Indenture; provided, however, that nothing contained in the Indenture shall permit or be construed as permitting (a) an extension of the maturity (or mandatory redemption date) of the principal of or the interest on any Bond issued thereunder, or (b) a reduction in the principal amount of or redemption premium or rate of interest on any Bond issued thereunder, or (c) the creation of any lien on the Trust Estate or any part thereof, except as expressly permitted in the Indenture, or (d) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture, or (f) depriving the Holder of any Bond then Outstanding of the lien created on the Trust Estate. If, at any time the City shall request the Trustee to enter into any Supplemental Indenture for any of the purposes described above, the Trustee shall, at the expense of the City, cause notice of the proposed execution of such Supplemental Indenture to be mailed by first class mail to each registered owner of the Bonds. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the principal office of the Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such Supplemental Indenture when consented to and approved as provided above. If BAM and the Holders of not less than 2/3 in aggregate principal amount of the Bonds Outstanding at the time of the execution of any such Supplemental Indenture shall have consented to and approved the execution thereof, no Holder of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from executing the same or from taking any action pursuant to the provisions thereof. SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT The City has entered into an undertaking in the form of the Continuing Disclosure Agreement for the benefit of the Beneficial Owners of the Series 2014 Bonds to cause certain financial information to be sent to certain information repositories annually and to cause notice to be sent to such information repositories of certain specified events, pursuant to the requirements of Section (b)(5)(i) of Rule 15c2-12 of the Securities Exchange Act of 1934, as amended (the "Rule"). The City is a party to multiple continuing disclosure agreements for various bond issues of the City secured by different repayment sources. Except as set forth below, the City has, to the best of its knowledge for the past five years, been in compliance in all material respects with the provisions in such agreements to which it is a party requiring that it file certain financial information and financial statements and certain listed events with the MSRB through its EMMA system. With respect to the City's continuing disclosure obligations relating to the Series 2003 Bonds being refunded with a portion of the proceeds of the Series 2014 Bonds, the City's audited financial statements and supplemental financial data for fiscal years 2009, 2010 and 2011 were not posted on a timely basis (posted 7/30/14). Ratings changes with respect to the insurer of the Series 2003 Bonds were not posted. With respect to the City's continuing disclosure obligations for certain bonds secured by water and sewer revenues which are no longer outstanding, audited financial statements and supplemental operating and financial data for fiscal years 2009, 2010 and 2011 were not posted on a timely basis. Said audited financial statements and supplemental operating and financial data were timely posted on EMMA for one issue of the City's water and sewer revenue bonds. A ratings upgrade with respect to one series of water and sewer revenue bonds (no longer outstanding) was not posted. 24 Supplemental financial data for fiscal years 2009, 2010 and 2011 was timely filed but incomplete (remedied 6/27/13) for an issue of the City's tax increment finance bonds. With respect to an issue of the City's general obligation bonds which are no longer outstanding, the City's audited financial statements for fiscal year 2009 were not timely posted on EMMA. The City makes no representation as to the materiality of the continuing disclosure delinquencies and omissions described above. The City has undertaken steps to ensure future compliance with its continuing disclosure obligations. The Continuing Disclosure Agreement contains the following covenants and provisions: (a) The City covenants that it will disseminate, or will cause the Dissemination Agent to disseminate, the Annual Financial Information and the Audited Financial Statements (in the form and by the dates set forth in Exhibit I to the Continuing Disclosure Agreement) by delivering such Annual Financial Information to the MSRB within 180 days of the completion of the City's fiscal year. Audited Financial Statements, if available, shall be filed with the MSRB at the same time as the Annual Financial Information. If not then available, unaudited financial statements shall be included with the MSRB filing, and Audited Financial Statements shall be provided to the MSRB within ten (10) business days after availability thereof. The City is required to deliver or cause delivery of such information in Prescribed Form and by such time so that such entity receives the information by the dates specified. (b) If any part of the Annual Financial Information can no longer be generated because the operations to which it is related have been materially changed or discontinued, the City will disseminate or cause dissemination of a statement to such effect as part of its Annual Financial Information for the year in which such event first occurs. (c) If any amendment is made to the Continuing Disclosure Agreement, the Annual Financial Information for the year in which such amendment is made (or in any notice or supplement provided to the MSRB) shall contain a narrative description of the reasons for such amendment and its impact on the type of information being provided. (d) The City covenants to disseminate or cause dissemination in a timely manner, not in excess of ten (10) business days after the occurrence of the event, of Material Events Disclosure to the MSRB in Prescribed Form. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Series 2014 Bonds or defeasance of any Series 2014 Bonds need not be given under the Continuing Disclosure Agreement any earlier than the notice (if any) of such redemption or defeasance is given to the owners of the Series 2014 Bonds pursuant to the Indenture. The City is required to deliver or cause delivery of such Material Events Disclosure in the same manner as provided for Annual Financial Information and Audited Financial Statements. (e) The City shall give notice in a timely manner or shall cause such notice to be given by the Dissemination Agent, not in excess of ten (10) business days after the occurrence of the event, to the MSRB in Prescribed Form of any failure to provide Annual Financial Information Disclosure when the same is due. (f) The Continuing Disclosure Agreement has been executed in order to assist the Participating Underwriter in complying with the Rule; however, the Continuing Disclosure Agreement shall inure solely to the benefit of the City, the Dissemination Agent, if any, the Trustee and the Beneficial Owners of the Series 2014 Bonds, and shall create no rights in any other person or entity. In the event of a failure of the City to comply with any provision of the Continuing Disclosure Agreement, the Beneficial Owner of any Series 2014 Bond may seek specific performance by court order to cause the City to comply with its obligations under the Continuing Disclosure Agreement. A default under the Continuing Disclosure Agreement shall not be deemed an Event of Default under the Indenture or any other agreement, and the sole remedy under the Continuing Disclosure Agreement in the event of any failure of the City or the Dissemination Agent to comply with the Continuing Disclosure Agreement shall be an action to compel performance. (g) The Undertaking of the City pursuant to the Continuing Disclosure Agreement shall be terminated hereunder when the City shall no longer have any legal liability for any obligation on or relating to the repayment of the Series 2014 Bonds. The City shall give notice to the MSRB, or shall cause the Dissemination Agent to give such notice, in a timely manner and in Prescribed Form in such event. (h) The City and the Dissemination Agent may amend the Continuing Disclosure Agreement, and any provision of the Continuing Disclosure Agreement may be waived, if (i) the amendment or waiver is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the City or type of business conducted; (ii) the Continuing Disclosure Agreement, 25 as amended, or the provision, as waived, would have complied with the requirements of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; (iii) the amendment or waiver does not materially impair the interests of the Beneficial Owners of the Series 2014 Bonds, as determined either by parties unaffiliated with the City (such as the Trustee) or by an approving vote of the Beneficial Owners of the Series 2014 Bonds holding a majority of the aggregate principal amount of the Series 2014 Bonds (excluding Series 2014 Bonds held by or on behalf of the City or its affiliates) pursuant to the terms of the Indenture at the time of the amendment; or (iv) the amendment or waiver is otherwise permitted by the Rule. (i) The following terms used under this caption shall have the meanings set forth below: "Annual Financial Information" means the Tax Receipts for the latest fiscal year and for the four previous fiscal years. "Annual Financial Information Disclosure" means the dissemination of disclosure concerning Annual Financial Information and the dissemination of the Audited Financial Statements as set forth in subsection (a) above. "Audited Financial Statements" means the audited consolidated financial statements of the City, prepared pursuant to generally accepted accounting standards and as described in Exhibit I to the Continuing Disclosure Agreement. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2014 Bonds (including persons holding Series 2014 Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2014 Bonds for federal income tax purposes. "Commission" means the U.S. Securities and Exchange Commission. "Dissemination Agent" shall mean Simmons First Trust Company, N.A., Pine Bluff, Arkansas, acting in its capacity as a dissemination agent under the Continuing Disclosure Agreement, or any successor dissemination agent designated in writing by the City and which has filed with the Trustee a written acceptance of such designation. UJl:`1." Bonds: "EMMA" means the Electronic Municipal Market Access facility for municipal securities disclosure of the "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Material Event" means the occurrence of any of the following events with respect to the Series 2014 (1) Principal and interest payment delinquencies; (2) Nonpayment -related defaults, if material; (3) Unscheduled draws on debt service reserves reflecting financial difficulties; (4) Unscheduled draws on credit enhancements reflecting financial difficulties; (5) Substitution of credit or liquidity providers, or their failure to perform; (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; (7) Modifications to rights of security holders, if material; (8) Bond calls, if material, and tender offers; (9) Defeasances; (10) Release, substitution or sale of property securing repayment of the securities, if material; (11) Rating changes; (12) Bankruptcy, insolvency, receivership or similar event of the City; (13) The consummation of a merger, consolidation or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry 26 into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material. "Material Events Disclosure" means dissemination of a notice of a Material Event as set forth in subsection (d) above. "MSRB" shall mean the Municipal Securities Rulemaking Board established in accordance with the provisions of Section 1513(b)(1) of the 1934 Act. "Participating Underwriter" means each broker, dealer or municipal securities dealer acting as an underwriter in any primary offering of the Series 2014 Bonds. "Prescribed Form" means, with regard to the filing of Annual Financial Information, Audited Financial Statements and notices of Material Events with the MSRB at www.emma.msrb.org (or such other address or addresses as the MSRB may from time to time specify), such electronic format, accompanied by such identifying information, as shall have been prescribed by the MSRB and which shall be in effect on the date of filing of such information. "Rule" shall mean Rule 15c2 -12(b)(5) adopted by the Securities and Exchange Commission ("SEC') under the Exchange Act, as the same may be amended from time to time. "State" means the State of Arkansas. "Undertaking" means the obligation of the City pursuant to subsections (a) and (d) above. UNDERWRITING Under a bond purchase agreement entered into by and between the City and Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), the Series 2014 Bonds are being purchased at a purchase price of $ (representing the stated principal amount of the Series 2014 Bonds less an underwriting discount of $ ) plus accrued interest from November 1, 2014 to the date of delivery of the Series 2014 Bonds. The bond purchase agreement provides that the Underwriter will purchase all of the Series 2014 Bonds if any are purchased. The obligation of the Underwriter to accept delivery of the Series 2014 Bonds is subject to various conditions contained in the bond purchase agreement, including the absence of pending or threatened litigation questioning the validity of the Series 2014 Bonds or any proceedings in connection with the issuance thereof, and the absence of material adverse changes in the financial condition of the City. The Underwriter intends to offer the Series 2014 Bonds to the public initially at the offering prices as set forth on the inside cover page of this Official Statement, which offering prices (or bond yields establishing such offering prices) may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the Series 2014 Bonds to the public, and may offer the Series 2014 Bonds to such dealers and other underwriters at a price below the public offering price. The City has agreed to indemnify the Underwriter against certain civil liabilities in connection with the offering and sale of the Series 2014 Bonds, including certain liabilities under federal securities laws. TAX MATTERS Federal Income Taxes. In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Series 2014 Bonds is excludable from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinion described in the preceding sentence assumes the accuracy of certain representations and compliance by the City with covenants designed to satisfy the requirements of the Code that must be met subsequent to the issuance of the Series 2014 Bonds. Failure to comply with such requirements could cause interest on the Series 2014 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2014 Bonds. The City has covenanted to comply with such requirements. 27 Notwithstanding Bond Counsel's opinion that interest on the Series 2014 Bonds is not a specific preference item for purposes of the federal alternative minimum tax, such interest will be included in adjusted current earnings of certain corporations, and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of such corporation's adjusted current earnings over their alternative minimum taxable income (determined without regard to such adjustment and prior to reduction for certain net operating losses). Bond Counsel has expressed no opinion regarding other federal tax consequences arising with respect to the Series 2014 Bonds. The accrual or receipt of interest on the Series 2014 Bonds may otherwise affect the federal income tax liability of the owners of the Series 2014 Bonds. The extent of these other tax consequences will depend upon such owner's particular tax status and other items of income or deduction. Bond Counsel has expressed no opinion regarding any such consequences. Purchasers of the Series 2014 Bonds, particularly purchasers that are corporations (including S corporations and foreign corporations operating branches in the United States), property or casualty insurance companies, banks, thrifts or other financial institutions, certain recipients of Social Security or Railroad Retirement benefits, taxpayers otherwise entitled to claim the earned income credit, or taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, should consult their tax advisors as to the tax consequences of purchasing or owning the Series 2014 Bonds. Backup Withholding. As a result of the enactment of the Tax Increase Prevention and Reconciliation Act of 2005, interest on tax-exempt obligations such as the Series 2014 Bonds is subject to information reporting in a manner similar to interest paid on taxable obligations. Backup withholding may be imposed on payments made after March 31, 2007 to any bondholder who fails to provide certain required information, including an accurate taxpayer identification number, to any person required to collect such information pursuant to Section 6049 of the Code. The new reporting requirement does not in and of itself affect or alter the excludability of interest on the Series 2014 Bonds from gross income for federal income tax purposes or any other federal tax consequence of purchasing, holding or selling tax-exempt obligations. Changes in Federal and State Tax Law. From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the Series 2014 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the Series 2014 Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular lawsuit will be resolved, or whether the Series 2014 Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2014 Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial authorities as of the date of issuance and delivery of the Series 2014 Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation. State Taxes. Bond Counsel is of the opinion that, under existing law, the interest on the Series 2014 Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. RATINGS Standard & Poor's Rating Services, a Standard & Poor's Financial Services LLC business ("S&P"), is expected to assign a rating of "AA" (stable outlook) to the Series 2014 Bonds based on the delivery of the Policy by BAM and has assigned an underlying rating of "A+" (stable outlook) to the Series 2014 Bonds. Such ratings reflect only the view of S&P at the time such ratings were given. An explanation of the significance of the ratings may be obtained only from Standard & Poor's Rating Services, 25 Broadway, New York, New York 10004, telephone (212) 208-1723. There can be no assurance that any rating will continue for any given period of time or that ratings will not be revised downward or withdrawn entirely. In the Continuing Disclosure Agreement, the City has agreed to give notice of certain material events, including the revision or withdrawal of any rating on the Series 2014 Bonds. Neither the City nor the Underwriter have undertaken any responsibility subsequent to the issuance of the Series 2014 Bonds to assure the maintenance of the ratings or to oppose any revision or withdrawal of the ratings. No application has been made to any rating agency other than S&P for a rating on the Series 2014 Bonds. or] LEGAL MATTERS Legal Opinions. Legal matters incident to the authorization and issuance of the Series 2014 Bonds are subject to the unqualified approving opinion of Kutak Rock LLP, Little Rock, Arkansas, Bond Counsel, a copy of whose approving opinion will be delivered with the Series 2014 Bonds and a form of which is attached hereto as Appendix A. Certain legal matters will be passed upon for the City by its counsel, Kit Williams, Esq., City Attorney. Litigation. There is no litigation pending seeking to restrain or enjoin the issuance or delivery of the Series 2014 Bonds or questioning or affecting the legality of the Series 2014 Bonds or the proceedings and authority under which the Series 2014 Bonds are to be issued, or questioning the right of the City to issue the Series 2014 Bonds or to levy the Tax or pledge the Tax Receipts. MISCELLANEOUS Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or owners of any of the Series 2014 Bonds. [REMAINDER OF PAGE INTENTIONALLY BLANK] 29 ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT The information contained in this Official Statement has been taken from sources considered to be reliable, but is not guaranteed. To the best of the knowledge of the City, this Official Statement does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated herein, or necessary to make the statements herein, in light of the circumstances under which they were made, not misleading. The execution and delivery of this Official Statement has been duly authorized by the City of Fayetteville, Arkansas. CITY OF FAYETTEVILLE, ARKANSAS Mayor 30 APPENDIX A Proposed Form of Bond Counsel Opinion Kutak Rock LLP, Bond Counsel, will render an opinion with respect to the Series 2014 Bonds, dated the date of issuance and delivery thereof, in substantially the following form: City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas November_, 2014 $10,995,000* City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance and sale by the City of Fayetteville, Arkansas (the "City"), a political subdivision of the State of Arkansas, of its $10,995,000* Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, the Advertising and Promotion Commission Act, Arkansas Code Annotated (2008 Repl. & 2013 Supp.) §§26-75-601 et seq. (as from time to time amended, the "Act"), pursuant to Ordinance No. 5713 of the City, duly adopted and approved on September 16, 2014 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of November 1, 2014 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., as trustee (the "Trustee"). Reference is hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with respect to the conditions for the issuance of parity indebtedness by the City, the nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the Holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Levying Ordinance, the Election Ordinance and the Authorizing Ordinance and to enter into and perform its obligations under the Indenture, the valid adoption of the Levying Ordinance, the Election Ordinance and the Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Election Ordinance, the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. * Preliminary; subject to change. A-1 Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, the Act, the City is empowered to adopt the Election Ordinance and the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 4. The Bonds have been validly authorized, executed, issued and delivered by the City and represent valid and binding special obligations of the City. The principal of, premium, if any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and pledge by the City to the Trustee of the Tax Receipts (as defined in the Indenture). 5. The Tax Receipts have been duly and validly assigned and pledged to the Trustee under the Indenture, and the Indenture creates, as security for the Bonds, a valid security interest in the Tax Receipts. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated (2001 Repl.) Section 4-9-109(d)(14), the pledge, assignment and security interest in the Tax Receipts securing the Bonds is and shall be prior to any judicial lien hereafter imposed on the Tax Receipts to enforce ajudgment against the City on a simple contract, and it is not necessary to file a Uniform Commercial Code financing statement in order to perfect a security interest in the Tax Receipts. 6. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. The opinions set forth in the preceding sentence are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied prior to or subsequent to the issuance of the Bonds in order that the interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. The interest on the Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. 8. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended, in connection with the offer and sale of the Bonds. It is to be understood that the rights of the registered owners of the Bonds and the enforceability of the Bonds, the Authorizing Ordinance and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Very truly yours, A-2 APPENDIX B SPECIMEN MUNICIPAL BOND INSURANCE POLICY 1f BA M ISSUER: [NAME OF ISSUER] MEMBER: [NAME OF MEMBER] BONDS: $ in aggregate principal amount of [NAME OF TRANSACTION] [and maturing on] MUNICIPAL BOND INSURANCE POLICY Policy No: Effective Date: Risk Prem Member Surplus C Total lnsu BUILD AMERICA MUTUAL ASSURANCE COMPANY ( IRREVOCABLY agrees to pay to the trustee (the "Trustee') or paying documentation providing for the issuance and securing of the Bonds), Owner, subject only to the terms of this Policy (which includes each Gd that shall become Due for Payment but shall be unpaid by reason ofAii On (he later of the day on which such principal on which RAM shall have received Notice ofNonpaymh Nonpayment) to or for the benefit of each Owner of it Payment but is then unpaid by reason of Nonpayment 5 evidence of the Owner's right to receive payment of sip instruments of assignment, (lint all of die Owners rights` vest in RAM. A Notice of Nonpayment will be", e Arw)ned ri Business Day; otherwise, it will be deemed'`received on shall be deemed not to have been recett@d by RAMfor Agent or Owner, as appropriate, an} tifAmn m�agay 4tbm Bond and to the extent of such payment E":shall bac payment of principal of or aderext,on such`Boobil and sl payments under such Bond .PG�ihZuHby BAMc ',Aiher fid account of any Nonpayrrundshall dts.6barge the oi'll aim iffwiL, hereby UNCONDITIONALLY AND .`,tic Bonds named above (as set forth in the or. at the election of RAM, directly to each of the principal of and interest on the Bonds rid indust becoftaacD,uc for PaYihcnt or the first Business Day' following the Business Day �yg W4',vtl drcbuisaXbut without duplication in the case of duplicate claims for the same r Bonds, the face amount of principal of and interest on the Bonds that is then Due for the Issuer, but only upon receipt by RAM, in a font reasonably satisfactory to it, of (a) { principal or interest then Due for Payment and (b) evidence, including any appropriate ith_respect to payment Of Such principal or interest that is Due for Payment shall thereupon reAd on a giYen Business Day if it is received prior to 1:00 p.m. (New York time) on such he ne pslbcss Day. If any Notice of Nonpayment received to RAM is incomplete, it arposes of the preceding sentence, and RAM shall promptly so advise the Trustee, Paying :an amended Notice of Nonpayment Upon disbursement under this Policy in respect of a inethe owner of such Bond, any appurtenant coupon to such Bond and right to receipt of ill be fully subrogated to the rights of the Owner, including the Ow'ner's right to receive he Trustee or Paying Agent I'or duo benefit of the Owners, or directly to the Owners, on of BAM under this Policy with respect to said Nonpayment, Except to the e3ten'Lcx r sl}' modified by an endorsement hereto, the following terms shall have the meanings specified Rand purposes of this Policy. `Business Dayneaps any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State ofNov York or the Insurer r3Pis&I Agent (o's ' 'fined herein) are authorized or required 6y law or executive order to remain closed. "Due for Payment" means (a) when referring to the principal or"69d, payable on the slated maturity date thereof or the dale on which the same shall have been duly called for mandatory Sliking ,fatd,-Mdcmptiop'mhd docs not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandamggstglf�ng:ftind rt;dEmpliant, acceleration or other advancement of maturity (unless BAM shall elect, in its sole discretion, to pay such principal due tipon such acceleration together want any accrued interest to the date of acceleration) and dd when referring to interest on a Bond, payable on the sated dateJoor payment of interest. `Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trusts 'orj f there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. `Nonpayment •shall also include, in respect of a Bond, any payment made to an Owner by or on behalf of the Issuer of principal or interest that is Due for Payment. which payment has been recovered from such Owner pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competenijurisdiclion. "Notice"means delivery to RAM ofa noieeofelaim and certificate, by certified mail, email or lelecopy, as set forth on the attached Schedule or other acceptable electronic delivery, in a form satisfactory to BAM. from and signed by an Owner, the Trustee or the Paying Agent, which notice shall specify (a) the person or entity making the claim, (b) the Policy Number. (c) the claimed amount. (d) payment instructions and (e) the date such claimed amount becomes or became Due for Payment. "Owmer' means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is enticed under the terms of such Ron([ to payment thereof, except dial "Owner" shall not include the Issuer, the Member or any other person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds. BAM may appoint a fiscal agent (the `Insurer's Fiscal Agent") for purposes of this Policy by giving written notice to the Trustee, the Paying Agent, the Member and the Issuer specifying the name and notice address ofthe Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trusice, the Paying Agent, the Member or the Issuer (a) copies of all notices required to be delivered to BAM pursuant to this Policy shall be simullareously delivered to the Insurer's Fiscal Agent and to BAM and shall not be deemed received until received by both and (b) all payments required to be made by BAM under this Policy may be made directly by BAM or by the Insurer's Fiscal Agent on behalf of BAM. The Insurer's Fiscal Agent is the agent of BAM only, and the Insurer's Fiscal Agent shall in no event be liable to the Trustee, Paying Agent or any Owner for any act of the Insurer's Fiscal Agent or any failure of BAM to deposit or cause to be deposited sufficient funds to make payments due under this Policy. To the fullest extent permitted by applicable law. BAM agrees not to assert, and hereby waives, only for the benefit of each Owmer, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of wail),,, µ'hether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to BAM to avoid payment°ofils obligations under this Policy in accordance with the express provisions of this Policy. This Policy may not be canceled or revoked. This Policy sets forth in full the undertaking of BAM and shall not be modified altered or affected by any otitB apeement or`ipswment, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement het0to;eny prermunarIeu, 0spect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, dftjfiq Bonds prior to maturity. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED``[ARTICLE 76OF THE NEW YORK INSURANCE LAW. THIS POLICY IS ISSUED WITHOUT CONTINGENT MUTUAL. I4CABILITY FOR ASSESSMENT. In witness whereof, BUILD AMERICA MUTUAL ASSURANCE COMPANY has caused this Politylo be executed on its behalf by its Authorized Officer. W iNY Notices (Unless Otherwise Specified by BADI) Email: claimsCd',buildamerica.com Address: I World Financial Center, 27th Boor 200 Liberty Street New York. New York 10281 Tclecopy: 212-962-1524(attention: Claims) M OFFICIAL STATEMENT NEW ISSUE BOOK -ENTRY ONLY *RATINGS: S&P: "AA" (stable outlook) (Build America Mutual Assurance Company) Underlying "A+" (stable outlook) In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the accuracy of certain representation and continuing compliance with certain covenants, interest air the Series 2014 Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. Under existing law, Bond Counsel is of the opinion that the Series 2014 Bonds and the interest thereon are exemptfrom all state, county and municipal taxes in the State of Arkansas. See the caption "TAX MATTERS" herein. $10,980,000 CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS SERIES 2014 Dated: November 1, 2014 Due: November 1, as shown on inside cover The Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Series 2014 Bonds"), are being issued by the City of Fayetteville, Arkansas (the "City") for the purpose of (i) paying a portion of the costs of redeeming the City's Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), (ii) paying a portion of the costs of expanding and renovating Walton Arts Center, (iii) paying a portion of the costs of acquiring, constructing and equipping a regional park, (iv) purchasing a municipal bond debt service reserve insurance policy for deposit to a debt service reserve, (v) purchasing a municipal bond insurance policy, and (vi) paying certain expenses in connection with the issuance of the Series 2014 Bonds. See the captions "SOURCES AND USES OF FUNDS," "REFUNDING PROGRAM," "THE PROJECTS" and "BOND INSURANCE" herein. The Series 2014 Bonds are issuable only as fully registered bonds and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal, premium, if any, and interest payments on the Series 2014 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2014 Bonds. Individual purchases of the Series 2014 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers (`Beneficial Owners") of Series 2014 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. The Series 2014 Bonds shall bear interest from their dated date, payable on May I and November 1 of each year, commencing May I, 2015. All such interest payments shall be payable to the persons in whose name such Series 2014 Bonds are registered on the bond registration books maintained by the Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee and paying agent (the "Trustee"), as of the fifteenth day of the calendar month next preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2014 Bonds shall be payable at the principal corporate trust office of the Trustee. So long as DTC or its nominee is the registered owner of the Series 2014 Bonds, disbursement of such payments to DTC Participants is the responsibility of DTC, and the disbursement of such payments to Beneficial Owners is the responsibility of DTC Participants or Indirect Participants, as more fully described herein. Pursuant to a Trust Indenture dated as of November 1, 2014 (the "Indenture"), between the City and the Trustee, the payment of the principal of, premium, if any, and interest on the Series 2014 Bonds is secured by a pledge of the receipts from a one percent (1%) city-wide tax (the "Tax") levied by the City upon (i) the gross receipts and gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City, and (ii) the portion of grass receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store - restaurants, caterers and similar businesses from the sale of prepared food and beverages for on -premises or off -premises consumption. See the caption "SECURITY FOR THE BONDS" herein. Assuming the satisfaction of certain coverage tests, the City has reserved the right to issue additional bonds to be secured on a parity basis with the Series 2014 Bonds. See the caption `THE SERIES 2014 BONDS — Additional Bonds" herein. The Series 2014 Bonds are subject to optional and mandatory redemption prior to maturity as more fully described herein under the caption "THE SERIES 2014 BONDS - Redemption." The scheduled payment of principal of and interest on the Series 2014 Bonds when due will be guaranteed under a municipal band insurance policy to be issued concurrently with the delivery of the Series 2014 Bonds by Build America Mutual Assurance Company. tie BA M The Series 2014 Bonds are special obligations of the City secured by and payable solely from receipts of the Tax. The Series 2014 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restriction. The issuance of the Series 2014 Bonds shall not directly, indirectly or contingently obligate the City to levy or pledge any taxes whatsoever or to make any appropriation for the payment of the Series 2014 Bonds, except as described herein with respect to the Tax. The Series 2014 Bonds are offered when, as and if issued by the City and are subject to the final approving opinion of Kutak Rock LLP, Little Rock, Arkansas, Bond Counsel. Certain matters will be passed upon for the City by its counsel, Kit Williams, Esq., City Attorney. It is expected that the Series 2014 Bonds will be available for delivery in New York, New York, on or about November 19, 2014. Stephens Inc. The date of this Official Statement is October 28, 2014. ° See the caption "RATINGS" herein. $1,655,000 4.000% Term Bond due November 1, 2029 Yield: 3.125% CUSIP: 312665 AM4 $2,525,000 5.000% Term Bond due November 1, 2034 Yield: 2.870% CUSIP: 312665 AN2 $3,145,000 3.750% Term Bond due November 1, 2039 Yield: 3.860% CUSIP: 312665 AP7 (Plus accrued interest) MATURITY SCHEDULE Maturity Principal Interest (November 1) Amount Rate Yield CUSIP 2015 $295,000 2.000% 0.300% 312665 AAO 2016 300,000 2.000% 0.590% 312665 AB8 2017 310,000 2.000% 0.900% 312665 AC6 2018 315,000 2.000% 1.210% 312665 AD4 2019 320,000 2.500% 1.520% 312665 AE2 2020 330,000 2.750% 1.860% 312665 AF9 2021 335,000 3.000% 2.150% 312665 AG7 2022 345,000 3.000% 2.390% 312665 AH5 2023 355,000 3.000% 2.520% 312665 AJI 2024 370,000 3.000% 2.620% 312665 AK8 2025 380,000 3.000% 2.720% 312665 AL6 $1,655,000 4.000% Term Bond due November 1, 2029 Yield: 3.125% CUSIP: 312665 AM4 $2,525,000 5.000% Term Bond due November 1, 2034 Yield: 2.870% CUSIP: 312665 AN2 $3,145,000 3.750% Term Bond due November 1, 2039 Yield: 3.860% CUSIP: 312665 AP7 (Plus accrued interest) CITY OF FAYETTEVILLE, ARKANSAS Issuer City Council Lioneld Jordan, Mayor Rhonda Adams Adella Gray Mark Kinion Alan Long Sarah Marsh Matthew Petty Martin Schoppmeyer, Jr. Justin Tennant Don Marr, Chief of Staff Paul Becker, Finance Director Sondra Smith, City Clerk Kit Williams, City Attorney Fayetteville Advertising and Promotion Commission Ching Mong, Chair Matt Behrend Robert Ferrell Tim Freeman Matthew Petty Justin Tennant Hannah Withers Marilyn Heifner, Executive Director SIMMONS FIRST TRUST COMPANY, N.A. Pine Bluff, Arkansas Trustee and Paying Agent KUTAK ROCK LLP Little Rock, Arkansas Bond Counsel STEPHENS INC. Fayetteville, Arkansas Underwriter No dealer, broker, salesman or other person has been authorized by the City or by Stephens Inc. (the "Underwriter") to give any information or to make any representations, other than those contained herein; and, if given or made, such other information or representations must not be relied upon as having been authorized by either of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of any Series 2014 Bonds in any jurisdiction in which such offer is not authorized, or in which the person making such offer, solicitation or sale is not qualified to do so, or to any person to whom it is unlawful to make such offer, solicitation or sale. The information and expressions of opinion contained herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. Build America Mutual Assurance Company ("BAM") makes no representation regarding the Series 2014 Bonds or the advisability of investing in the Series 2014 Bonds. In addition, BAM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding BAM, supplied by BAM and presented under the heading "BOND INSURANCE" and "EXHIBIT B — Specimen Municipal Bond Insurance Policy". THE SERIES 2014 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE TRUST INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON CERTAIN EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION CONTAINED IN SUCH LAWS. CERTAIN INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED FROM THE CITY, THE DEPOSITORY TRUST COMPANY, BUILD AMERICA MUTUAL ASSURANCE COMPANY AND OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE. THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITER DOES NOT GUARANTY THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2014 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. TABLE OF CONTENTS Page IntroductoryStatement.............................................................................................................I............................ I TheSeries 2014 Bonds.......................................................................................................................................... 2 Securityfor the Bonds........................................................................................................................................... 4 BondInsurance........................................................................................................................................................ 6 Book -Entry Only System...................................................................................................................................... 7 RefundingProgram............................................................................................................................................... 9 TheProjects........................................................................................................................................................... 10 Sourcesand Uses of Funds.................................................................................................................................... 10 DebtService Requirements................................................................................................................................... 11 EstimatedDebt Service Coverage......................................................................................................................... 11 TheCity................................................................................................................................................................. 12 TheCommission................................................................................................................................................... 15 Definitions of Certain Terms................................................................................................................................. 15 Summaryof the Indenture..................................................................................................................................... 20 Summary of the Continuing Disclosure Agreement.............................................................................................. 24 Underwriting......................................................................................................................................................... 27 TaxMatters........................................................................................................................................................... 27 Ratings.................................................................................................................................................................... 29 LegalMatters........................................................................................................................................................ 29 Miscellaneous........................................................................................................................................................ 30 Accuracy and Completeness of Official Statement............................................................................................... 30 APPENDIX A - Form of Bond Counsel Opinion.................................................................................................A-1 APPENDIX B - Specimen Municipal Bond Insurance Policy..............................................................................B-1 OFFICIAL STATEMENT $10,980,000 CITY OF FAYETTEVILLE, ARKANSAS HOTEL, MOTEL AND RESTAURANT GROSS RECEIPTS TAX AND TOURISM REVENUE CAPITAL IMPROVEMENT AND REFUNDING BONDS SERIES 2014 INTRODUCTORYSTATEMENT The following introductory statement is subject in all respects to the more complete information set forth in this Official Statement. All descriptions and summaries of documents hereinafter set forth are qualified in their entirety by reference to each such document. Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms under the caption "DEFINITIONS OF CERTAIN TERMS" herein. This Official Statement, including the cover page and the Appendices hereto, is furnished in connection with the offering of Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014, in the principal amount of $10,980,000 (the "Series 2014 Bonds"), by the City of Fayetteville, Arkansas (the "City"). The City is a city of the first class organized and existing under the laws of the State of Arkansas (the "State"). The City is authorized under the laws of the State, including particularly, the Advertising and Promotion Commission Act, Arkansas Code Annotated (2008 Repl. & 2013 Supp.) §§26-75-601 et seq. (as from time to time amended, the "Act"), to issue and sell its bonds for the purpose of financing and refinancing the cost of tourism projects, such as cultural arts and entertainment facilities and public recreation facilities. Pursuant to the Act, the City has previously issued and there are currently outstanding its Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"). The Series 2014 Bonds are to be issued by the City pursuant to the Act and Ordinance No. 5713, adopted and approved by the City Council on September 16, 2014 (the "Authorizing Ordinance"), for the purpose of (i) paying a portion of the costs of redeeming all of the outstanding Series 2003 Bonds, (ii) paying a portion of the costs of expanding and renovating Walton Arts Center, a cultural arts facility owned by and located within the City (the "Walton Arts Center Project"), (iii) paying a portion of the costs of acquiring, constructing and equipping a regional park within the City (the "Park Project'), (iv) purchasing a municipal bond debt service reserve insurance policy for deposit to a debt service reserve, (v) purchasing a municipal bond insurance policy, and (vi) paying certain expenses in connection with the issuance of the Series 2014 Bonds. See the captions "SOURCES AND USES OF FUNDS," "REFUNDING PROGRAM" and "THE PROJECTS" herein. The issuance of the Series 2014 Bonds for the aforementioned purposes was approved by a majority of the qualified electors of the City at a special election held November 12, 2013. The Series 2014 Bonds are not general obligations of the City, but are special obligations payable solely from and secured by a pledge of the revenues derived by the City from a one percent (I%) tax (the "Tax") originally levied in 1977 upon (i) the gross receipts and gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City, and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants and similar businesses from the sale of prepared food and beverages for on -premises and off -premises consumption. The regularly scheduled payment of principal of and interest on the Series 2014 Bonds when due is guaranteed under a municipal bond insurance policy (the "Policy") issued concurrently with the delivery of the Series 2014 Bonds by Build America Mutual Assurance Company, a New York domiciled mutual insurance corporation (`BAM"). See the captions "SECURITY FOR THE BONDS," "BOND INSURANCE" and "SUMMARY OF THE INDENTURE" herein. The faith and credit of the City are not pledged to the payment of the Series 2014 Bonds, and the Series 2014 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restriction. The issuance of the Series 2014 Bonds shall not directly, indirectly or contingently obligate the City to levy or pledge any taxes whatsoever or to make any appropriation for the payment of the Series 2014 Bonds, except as described herein with respect to the Tax Receipts. Additional Bonds may be issued on a parity of security with the Series 2014 Bonds under certain circumstances set forth in the Indenture (hereinafter defined). The Series 2014 Bonds and any such Additional Bonds are herein collectively referred to as the "Bonds." Seethe caption "THE SERIES 2014 BONDS -Additional Bonds" and " - Superior Obligations Prohibited" herein. The Series 2014 Bonds are subject to optional and mandatory redemption as provided under the caption "THE SERIES 2014 Bonds —Redemption" herein. Pursuant to the provisions of a Continuing Disclosure Agreement dated as of the date of delivery of the Series 2014 Bonds, by and between the City and Simmons First Trust Company, N.A., as dissemination agent (the "Continuing Disclosure Agreement"), the City has undertaken certain obligations with respect to providing ongoing disclosure of certain financial and operating data concerning the City and the Tax Receipts and of the occurrence of certain material events. See the caption "SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT" herein. This Official Statement contains brief descriptions or summaries of, among other matters, the City, the Series 2014 Bonds, the Tax Receipts, the Continuing Disclosure Agreement, and the Trust Indenture dated as of November 1, 2014, (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee and paying agent (the "Trustee"), pursuant to which the Series 2014 Bonds are issued and secured. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Indenture and the Continuing Disclosure Agreement are qualified in their entirety by reference to each such document, and all references to the Series 2014 Bonds are qualified in their entirety by reference to the definitive form thereof and the information with respect thereto included in the Indenture. Copies of the Continuing Disclosure Agreement, the Indenture, and the form of Series 2014 Bond included therein, are available from the City by writing to the attention of the City Clerk, City of Fayetteville, City Administration Building, 113 West Mountain, Fayetteville, Arkansas 72701, and, during the initial offering period only, from the Underwriter, Stephens Inc., 3425 North Futrall, Suite 201, Fayetteville, Arkansas 72703. Tax Receipt data has been provided by the City from the audited records of the City and certain demographic information has been obtained from other sources which are believed to be reliable. THE SERIES 2014 BONDS Description. The Series 2014 Bonds will be initially dated as of November 1, 2014, and will bear interest payable semiannually on May 1 and November I of each year, commencing May 1, 2015, at the rates set forth on the inside cover page hereof. The Series 2014 Bonds will mature on November 1 in the years and in the principal amounts set forth on the inside cover page hereof. The Series 2014 Bonds are issuable only in the form of fully registered bonds and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal, premium, if any, and interest payments on the Series 2014 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2014 Bonds. Individual purchases of the Series 2014 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers ("Beneficial Owners") of Series 2014 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. All interest payments on the Series 2014 Bonds shall be payable to the persons in whose name such Series 2014 Bonds are registered on the bond registration books maintained by the Trustee, as of the fifteenth day of the calendar month next preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2014 Bonds shall be payable at the principal corporate trust office of the Trustee. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Series 2014 Bond to the extent of the sum or sums so paid. So long as DTC or its nominee is the registered owner of the Series 2014 Bonds, disbursement of such payments to DTC Participants is the responsibility of DTC, and the disbursement of such payments to Beneficial Owners is the responsibility of DTC Participants or Indirect Participants, as more fully described herein. Redemption. (1) The Series 2014 Bonds are subject to redemption prior to maturity at the election of the City, on and after November 1, 2024, in whole or in part (in any order of maturities directed by the City, and by lot within a maturity) at any time, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. (2) The Series 2014 Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from moneys on deposit in the Projects Fund in excess of the amount needed to complete the Walton Arts Center Project or the Park Project. (3) The Series 2014 Bonds maturing on November 1, 2029, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on November I in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount 2026 $ 390,000 2027 405,000 2028 420,000 2029 (maturity) 440,000 (4) The Series 2014 Bonds maturing on November 1, 2034, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on November 1 in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount 2030 $455,000 2031 480,000 2032 505,000 2033 530,000 2034 (maturity) 555,000 (5) The Series 2014 Bonds maturing on November 1, 2039, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on November 1 in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount 2035 $585,000 2036 605,000 2037 630,000 2038 650,000 2039 (maturity) 675,000 At its option, to be exercised on or before the 45" day next preceding any mandatory sinking fund redemption date for any Series 2014 Bonds maturing November 1, 2029, November 1, 2034 and November 1, 2039 (the "Series 2014 Term Bonds"), the City may deliver to the Trustee for cancellation Series 2014 Term Bonds, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2014 Term Bond, or portion thereof, so delivered or previously redeemed (otherwise than through mandatory sinking fund redemption) and canceled by the Trustee shall be credited by the Trustee at 100% of the principal amount thereof on the obligation of the City on such mandatory sinking fund redemption date, and any excess over such amount shall be credited on future mandatory sinking fund redemption obligations with respect to the Series 2014 Term Bonds in chronological order, and the principal amount of such Series 2014 Term Bonds so to be redeemed shall be accordingly reduced. Partial Redemption of a Series 2014 Bond. If less than all of the Series 2014 Bonds of a maturity are called for redemption, the particular Series 2014 Bonds or portions of Series 2014 Bonds to be redeemed shall be selected by lot in such manner as the Trustee in its discretion may deem fair and appropriate. So long as DTC or its nominee is the sole registered owner of the Series 2014 Bonds, the procedures established by DTC shall control with respect to the selection of the particular Series 2014 Bonds to be redeemed. Notice of Redemption. Notice of the call for any redemption (other than mandatory sinking fund redemption), identifying the Series 2014 Bonds or portions thereof being called and the date on which they shall be presented for payment, shall be mailed by the Trustee by first class mail (or, so long as DTC or its nominee is the sole registered owner of the Series 2014 Bonds, by any other means acceptable to DTC, including facsimile) to the registered owner of each such Series 2014 Bond addressed to such registered owner at his registered address and placed in the mails not less than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption; provided, however, that failure to give such notice by mailing, or any defect therein, shall not affect the validity of any proceeding for the redemption of any Series 2014 Bond with respect to which no such failure or defect has occurred. Any notice mailed as provided above shall be conclusively presumed to have been duly given, whether or not the registered owner receives the notice. Additional Bonds. The City may issue from time to time one or more series of Additional Bonds for the purpose of (i) financing Project costs in connection with the acquisition, construction and/or equipping of a Project, (ii) refunding the Series 2014 Bonds or any series of Additional Bonds, in whole or in part, or (iii) any combination thereof. Additional Bonds shall be secured equally and ratably with the Series 2014 Bonds and any other series of Additional Bonds theretofore issued and then Outstanding, except insofar as any terms or conditions of redemption or purchase established under the Indenture may afford additional benefit or security for the Bonds of any particular series and except for the security afforded by any municipal bond insurance obtained with respect to any particular series of Bonds. Before any Additional Bonds are authenticated, there shall be delivered to the Trustee the items required for the issuance of Bonds by the Indenture, plus a Certificate of the Finance Director of the City certifying that, based upon necessary investigation, the Tax Receipts deposited into the Revenue Fund during the most recent twelve (12) months were not less than (i) 140% of the maximum Annual Debt Service on all then Outstanding Bonds, plus the Additional Bonds then proposed to be issued, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. No Additional Bonds shall be issued unless there is no default at the time of issuance under the Indenture. Superior Obligations Prohibited. Except to the extent as provided above with respect to the issuance of Additional Bonds, so long as Bonds are Outstanding under the Indenture, the City has covenanted not to create or permit the creation of any indebtedness, or to issue any bonds, notes, warrants, certificates or other obligations or evidences of indebtedness payable in any manner from the Tax Receipts or otherwise from the Trust Estate which (i) will in any way be superior to or rank on a parity with the Bonds, or (ii) will in any way be secured by a lien and charge on the Tax Receipts or on the moneys deposited in or to be deposited in the Revenue Fund, prior to or equal with the lien, pledge and charge created in the Indenture for the security of the Bonds, or (iii) will be payable prior to or equal with the payments to be made from the Tax Receipts or the Revenue Fund into the Bond Fund or Debt Service Reserve Fund, or from said Bond Fund or Debt Service Reserve Fund for the payment of the Bonds. The City is not prohibited or restricted from issuing bonds payable from Tax Receipts so long as use of the Tax Receipts in favor of said bonds shall be made expressly subject and subordinate to the pledge and use of Tax Receipts to pay principal of and premium, if any, and interest on the Bonds and to make all required deposits into all funds held by the Trustee pursuant to the Indenture. Transfer or Exchange. The Bonds may be transferred on the books of registration kept by the Trustee by the registered owner in person or by the owner's duly authorized attorney, upon surrender thereof, together with a written instrument of transfer duly executed by the registered owner or the owner's duly authorized attorney. Upon surrender for transfer of any Bond at the principal corporate office of the Trustee, the City shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds of the same series and in the same aggregate principal amount and of any authorized denomination or denominations. Transfers of registration or exchanges of Bonds shall be without charge to the Holders of such Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Holder of the Bond requesting such transfer or exchange as a condition precedent to the exercise of such privilege. The Trustee shall not be required to transfer or exchange any Bond during the period from and including a Record Date to the next succeeding interest payment date of such Bond nor to transfer or exchange any Bond after the mailing of notice calling such Bond for redemption has been made, and prior to such redemption. So long as DTC or its nominee is the sole registered owner of the Series 2014 Bonds, transfers of beneficial interests in the Series 2014 Bonds shall be in accordance with the rules and procedures of DTC and its direct and indirect participants. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. SECURITY FOR THE BONDS Tax Receipts. The Bonds are special obligations of the City secured by and payable from the revenues derived by the City from a one percent (1%) tax (the "Pax") levied upon (i) the gross receipts and gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City, and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store- restaurants and similar businesses from the sale of prepared food and beverages for on -premises and off -premises consumption. Pursuant to the Act, the City levied the Tax in 1977. The Tax is limited by statute to 3% of the amount of such gross receipts and proceeds. Pursuant to the Act and the Indenture, the City has pledged the receipts of the Tax (the "Tax Receipts") to the payment of the Bonds. The Advertising and Promotion Commission of the City of Fayetteville, Arkansas (the "Commission") has approved such pledge, as required by statute. The City has continuously collected the Tax since June 1, 1977, following approval by the citizens of the City in a special election held on May 3, 1977. The City has covenanted in the Indenture that, for so long as there are Outstanding Bonds, the Tax will not be repealed and the current Tax rate of 1% will not be reduced. In addition, the City has further covenanted that all necessary action will be taken, from time to time, to collect such tax in full amount due and to apply the Tax Receipts in the manner provided in the Indenture. The following table shows Tax Receipts for the years 2002 through 2014. Calendar Year Tax Receipts 2002 $ 1,489,011 2003 1,556,511 2004 1,756,319 2005 1,944,250 2006 2,063,875 2007 2,030,913 2008 2,171,452 2009 2,165,809 2010 2,181,585 2011 2,298,187 2012[71 2,732,282 2013 2,624,137 2014121 1,775,061 7.' Includes $211,138 in accruals due to revenue recognition timing change. 721 Unaudited; for the eight months ended August 31, 2014. Source: City records. The faith and credit of the City are not pledged to the payment of the Series 2014 Bonds, and the Series 2014 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restriction. The issuance of the Series 2014 Bonds shall not directly, indirectly or contingently obligate the City to levy or pledge any taxes whatsoever or to make any appropriation for the payment of the Series 2014 Bonds, except as described herein with respect to the Tax Receipts. Debt Service Reserve. The Indenture creates a Debt Service Reserve Fund and requires that it be maintained in an amount equal to the least of (a) 10% of the face amount of each series of Outstanding Bonds, (b) the maximum Annual Debt Service on each series of Outstanding Bonds, or (c) 1.25 times the average Annual Debt Service on each series of Outstanding Bonds. The Debt Service Reserve Fund shall be used solely to pay the principal of and interest on Outstanding Bonds as due for which there are no available funds in the Bond Fund to make such payments. The Indenture authorizes the City to obtain a debt service reserve insurance policy in place of fully funding the Debt Service Reserve Fund. Accordingly, application has been made to Build America Mutual Assurance Company ("BAM"), and BAM has made a commitment to issue a debt service reserve insurance policy (the "Reserve Policy"), effective as of the date of issuance of the Series 2014 Bonds, for the purpose of funding the Debt Service Reserve Fund. The Series 2014 Bonds will only be delivered upon the issuance of such Reserve Policy. The premium on the Reserve Policy is to be fully paid at or prior to the issuance and delivery of the Series 2014 Bonds. The Reserve Policy provides that BAM will make payment to the Trustee of that portion of the principal of and interest on the Series 2014 Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the City, as provided in the Reserve Policy, on the later of (i) the Business Day on which such principal and interest becomes Due for Payment and (ii) the first Business Day following the Business Day on which BAM shall have received a completed Notice of Nonpayment in a form reasonably satisfactory to it. Payment by BAM to the Trustee for the benefit of the Owners of the Series 2014 Bonds shall, to the extent thereof, discharge the obligation of BAM under the Reserve Policy. The amount available at any particular time to be paid to the Trustee under the terms of the Reserve Policy shall automatically be reduced by and to the extent of any payment under the Reserve Policy. However, after such payment, the amount available under the Reserve Policy shall be reinstated in full or in part, but only up to the Policy Limit, to the extent of the reimbursement of such payment (after taking into account the payment of interest and expenses) to BAM by or on behalf of the City. Unless otherwise defined under this caption, all capitalized terms used in the language under this caption shall have the respective meanings set forth in the Reserve Policy. For information on BAM see the caption "BOND INSURANCE" herein Bond Insurance. Subject to certain limitations as described herein, the payment of the principal of and interest on the Series 2014 Bonds is unconditionally and irrevocably guaranteed by BAM pursuant to its municipal bond insurance policy (the "Policy"). See the caption "BOND INSURANCE" herein for further information concerning the terms and conditions of the Policy and a description of BAM. A specimen of the Policy appears as Appendix B to this Official Statement. BOND INSURANCE Bond Insurance Policy Concurrently with the issuance of the Bonds, Build America Mutual Assurance Company ("BAM") will issue its Municipal Bond Insurance Policy for the Series 2014 Bonds (the "Policy"). The Policy guarantees the scheduled payment of principal of and interest on the Series 2014 Bonds when due as set forth in the form of the Policy included as an exhibit to this Official Statement. The Policy is not covered by any insurance security or guaranty fund established under New York, California, Connecticut or Florida insurance law. Build America Mutual Assurance Company BAM is a New York domiciled mutual insurance corporation. BAM provides credit enhancement products solely to issuers in the U.S. public finance markets. BAM will only insure obligations of states, political subdivisions, integral parts of states or political subdivisions or entities otherwise eligible for the exclusion of income under section 115 of the U.S. Internal Revenue Code of 1986, as amended. No member of BAM is liable for the obligations of BAM. The address of the principal executive offices of BAM is: 200 Liberty Street, 27" Floor, New York, New York 10281, its telephone number is: 212-235-2500, and its website is located at: www.buildamerica.com. BAM is licensed and subject to regulation as a financial guaranty insurance corporation under the laws of the State of New York and in particular Articles 41 and 69 of the New York Insurance Law. BAM's financial strength is rated "AA/Stable" by Standard and Poor's Ratings Services, a Standard & Poor's Financial Services LLC business ("S&P"). An explanation of the significance of the rating and current reports may be obtained from S&P at www.standardandpoors.com. The rating of BAM should be evaluated independently. The rating reflects S&P's current assessment of the creditworthiness of BAM and its ability to pay claims on its policies of insurance. The above rating is not a recommendation to buy, sell or hold the Series 2014 Bonds, and such rating is subject to revision or withdrawal at any time by S&P, including withdrawal initiated at the request of BAM in its sole discretion. Any downward revision or withdrawal of the above rating may have an adverse effect on the market price of the Series 2014 Bonds. BAM only guarantees scheduled principal and scheduled interest payments payable by the issuer of the Series 2014 Bonds on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the Policy), and BAM does not guarantee the market price or liquidity of the Series 2014 Bonds, nor does it guarantee that the rating on the Series 2014 Bonds will not be revised or withdrawn. Capitalization of BAM BAM's total admitted assets, total liabilities, and total capital and surplus, as of June 30, 2014 and as prepared in accordance with statutory accounting practices prescribed or permitted by the New York State Department of Financial Services were $477.8 million, $17.9 million and $459.9 million, respectively. BAM is party to a first loss reinsurance treaty that provides first loss protection up to a maximum of 15% of the par amount outstanding for each policy issued by BAM, subject to certain limitations and restrictions. BAM's most recent Statutory Annual Statement, which has been filed with the New York State Insurance Department and posted on BAM's website at www.buildamerica.com, is incorporated herein by reference and may be obtained, without charge, upon request to BAM at its address provided above (Attention: Finance Department). Future financial statements will similarly be made available when published. BAM makes no representation regarding the Series 2014 Bonds or the advisability of investing in the Series 2014 Bonds. In addition, BAM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding BAM, supplied by BAM and presented under the heading "BOND INSURANCE". Additional Information Available from BAM Credit Insights Videos. For certain BAM-insured issues, BAM produces and posts a brief Credit Insights video that provides a discussion of the obligor and some of the key factors BAM's analysts and credit committee considered when approving the credit for insurance. The Credit Insights videos are easily accessible on BAM's website at buildamerica.com/creditinsights/. Obligor Disclosure Briefs. Subsequent to closing, BAM posts an Obligor Disclosure Brief on every issue insured by BAM, including the Series 2014 Bonds. BAM Obligor Disclosure Briefs provide information about the gross par insured by CUSIP, maturity and coupon; sector designation (e.g. general obligation, sales tax); a summary of financial information and key ratios; and demographic and economic data relevant to the obligor, if available. The Obligor Disclosure Briefs are also easily accessible on BAM's website at buildamerica.com/obligor/. Disclaimers. The Obligor Disclosure Briefs and the Credit Insights videos and the information contained therein are not recommendations to purchase, hold or sell securities or to make any investment decisions. Credit - related and other analyses and statements in the Obligor Disclosure Briefs and the Credit Insights videos are statements of opinion as of the date expressed, and BAM assumes no responsibility to update the content of such material. The Obligor Disclosure Briefs and Credit Insight videos are prepared by BAM and have not been reviewed or approved by the issuer of or the underwriter for the Series 2014 Bonds, and they assume no responsibility for their content. BAM receives compensation (an insurance premium) for the insurance that it is providing with respect to the Series 2014 Bonds. Neither BAM nor any affiliate of BAM has purchased, or committed to purchase, any of the Series 2014 Bonds, whether at the initial offering or otherwise. BOOK -ENTRY ONLY SYSTEM The Series 2014 Bonds will be issued only as one fully registered Series 2014 Bond for each maturity, in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), as registered owner of all the Series 2014 Bonds. The fully registered Series 2014 Bonds will be retained and immobilized in the custody of DTC. DTC (or any successor securities depository) or its nominee for all purposes under the Indenture will be considered by the City and the Trustee to be the owner or holder of the Series 2014 Bonds. Owners of any book entry interests in the Series 2014 Bonds (the "book entry interest owners") described below, will not receive or have the right to receive physical delivery of the Series 2014 Bonds, and will not be considered by the City and the Trustee to be, and will not have any rights as, owners or holders of the Series 2014 Bonds under the bond proceedings and the Indenture except to the extent, if any, expressly provided thereunder. CERTAIN INFORMATION REGARDING DTC AND DIRECT PARTICIPANTS IS SET FORTH BELOW. THIS INFORMATION HAS BEEN PROVIDED BY DTC. THE CITY, THE UNDERWRITER AND BOND COUNSEL ASSUME NO RESPONSIBILITY FOR THE ACCURACY OF SUCH STATEMENTS. DTC, the world's largest depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues and money market instruments (from over 120 countries and territories) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges among Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, the National Securities Clearing Corporation and the Fixed Income Clearing Corporation, all of which are registered agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The DTC Rules applicable to its Direct and Indirect Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.com. Purchases of Series 2014 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2014 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2014 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2014 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2014 Bonds, except in the event that use of the Book-Entry System for the Series 2014 Bonds is discontinued. To facilitate subsequent transfers, all Series 2014 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2014 Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2014 Bonds, DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2014 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Series 2014 Bonds within a maturity are to be redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Series 2014 Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the Record Date. The Omnibus Proxy will assign Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2014 Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy). Payment of debt service and redemption proceeds with respect to the Series 2014 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or the Trustee on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds and debt service to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. BENEFICIAL OWNERS SHOULD CONSULT WITH THE DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS FROM WHOM THEY PURCHASE A BOOK ENTRY INTEREST TO OBTAIN INFORMATION CONCERNING THE SYSTEM MAINTAINED BY SUCH DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS TO RECORD SUCH INTERESTS, TO MAKE PAYMENTS, TO FORWARD NOTICES OF REDEMPTION AND OF OTHER INFORMATION. THE CITY AND THE TRUSTEE HAVE NO RESPONSIBILITY OR LIABILITY FOR ANY ASPECTS OF THE RECORDS OR NOTICES RELATING TO, OR PAYMENTS MADE ON ACCOUNT OF, BOOK ENTRY INTEREST OWNERSHIP, OR FOR MAINTAINING, SUPERVISING OR REVIEWING ANY RECORDS RELATING TO THAT OWNERSHIP. The Trustee and the City, so long as a book entry method of recording and transferring interest in the Series 2014 Bonds is used, will send any notice of redemption or of any Indenture amendment or supplement or other notices to Bondholders under the Indenture only to DTC (or any successor securities depository) or its nominee. Any failure of DTC to advise any Direct Participants, or of any Direct Participants or Indirect Participants to notify any Beneficial Owner, of any such notice and its content or effect will not affect the validity of the redemption of the Series 2014 Bonds called for redemption, the Indenture amendment or supplement, or any other action premised on notice given under the Indenture. The City and the Trustee cannot and do not give any assurances that DTC, Direct Participants, Indirect Participants or others will distribute payments of debt service on the Series 2014 Bonds made to DTC or its nominee as the registered owner of the Series 2014 Bonds, or any redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or that DTC will serve and act in a manner described in this Official Statement. DTC may discontinue providing its services as securities depository with respect to the Series 2014 Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, bond certificates are required to be printed and delivered. In addition, the City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered. REFUNDING PROGRAM Purpose. A portion of the proceeds of the Series 2014 Bonds will be utilized, along with other available moneys, to effect a current refunding of $650,000 outstanding principal amount of the City's Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"). The Series 2003 Bonds were issued to refund a prior series of bonds approved by a majority of the qualified electors of the City at a special election held August 5, 1997, for the purpose of financing a portion of the costs of constructing the Fayetteville Town Center, a multipurpose civic center located on the south side of the downtown square. Refunded Bonds. The Series 2003 Bonds will be called for redemption by the City on December 22, 2014, pursuant to the provisions of the trust indenture under which the Series 2003 Bonds were issued, and will be paid from funds deposited with the BOKF, NA, Tulsa, Oklahoma, as escrow trustee (the "Escrow Trustee") under the provisions of an Escrow Deposit Agreement to be dated as of the date of delivery of the Series 2014 Bonds (the "Escrow Agreement"), between the City and the Escrow Trustee. The Indenture provides that a portion of the proceeds from the sale of the Series 2014 Bonds, together with moneys released from the bond fund relating to the Series 2003 Bonds, will be held by the Escrow Trustee under the Escrow Agreement in an escrow fund (the "Escrow Fund") and used to purchase direct obligations of the United States of America (or their equivalents) (the "Defeasance Securities"). The Underwriter will verify at the time of delivery of the Series 2014 Bonds that the Defeasance Securities will mature and yield interest in such amounts which, together with uninvested funds, if any, in the Escrow Fund will be sufficient to pay, when due, the principal of and interest on the Series 2003 Bonds. Pursuant to the terms of the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Series 2003 Bonds. By the deposit of Defeasance Securities and uninvested cash with the Escrow Trustee pursuant to the Escrow Agreement, the City will have defeased the Series 2003 Bonds. In the opinion of Bond Counsel, the Series 2003 Bonds will no longer be payable from, or secured by a pledge of, the Tax Receipts, but will be payable solely from the principal of and the interest on the Defeasance Securities and uninvested cash held for such purpose by the Escrow Trustee, and the pledge of Tax Receipts securing the Series 2003 Bonds, together with all other obligations of the City to the holders of the Series 2003 Bonds under the trust indenture securing the Series 2003 Bonds, will be discharged. THE PROJECTS Walton Arts Center Project. The total cost of the Walton Arts Center expansion and renovation is estimated to be $16.5 million. Approximately $6,953,000 of this amount will be funded with proceeds of the Series 2014 Bonds, with the remainder to be provided by private donations solicited by the Walton Arts Center Foundation or from existing assets of the Foundation. The City's funding share of the Walton Arts Center Project will be limited to available proceeds of the Series 2014 Bonds deposited in the Walton Arts Center Account of the Projects Fund. Such proceeds are expected to be applied to costs associated with site and structural improvements for the Walton Arts Center lobby and Starr Theater, the back staging area of the theater, lobby restrooms, and electrical and HVAC infrastructure enhancements. Park Project. The Park Project is the first phase of the acquisition, construction and equipping of a regional park facility in the southwestern portion of the City near the intersection of U.S. Interstate 40 and Cato Springs Road. The current estimated total cost of the regional park is $28 million to be completed in phases as funding becomes available. Approximately $3,527,000 of the proceeds of the Series 2014 Bonds will be deposited into the Park Account of the Projects Fund and applied to pay for Phase One of the regional park. Phase One components are expected to include baseball fields and soccer fields and related improvements, as well as a pavilion and playground to be located on the "Great Lawn" of the park. SOURCES AND USES OF FUNDS $ 655,192 The proceeds of the Series 2014 Bonds and other available moneys will be used as follows: Sources of Funds Deposit to Projects Fund (Park Project) Series 2014 Bond Proceeds $ 10,980,000 Series 2003 Bond Fund 56,092 Net Reoffering Premium 662.791 Total Sources: $11.698.883 Uses of Funds Transfer to Escrow Trustee $ 655,192 Deposit to Projects Fund (Walton Arts Center Project) 7,181,021 Deposit to Projects Fund (Park Project) 3,642,639 Purchase of Debt Service Reserve Fund Insurance Policy 11,608 Purchase of Municipal Bond Insurance Policy 16,123 Costs of Issuance and Underwriter's Discount 192,300 Total Uses: $ 11.698.883 10 DEBT SERVICE REQUIREMENTS As of the date of closing, the Series 2014 Bonds will constitute the only debt obligations secured by the Tax Receipts. The following table sets forth the amounts required to pay scheduled principal of and interest on the Series 2014 Bonds during each year: Including mandatory sinking fund redemptions. ESTIMATED DEBT SERVICE COVERAGE The following table shows estimated maximum annual debt service coverage with respect to the Series 2014 Bonds utilizing Tax Receipts for the twelve months ended August 31, 2014. Historical Tax ReceiptsM $2,677,468 Maximum Annual Debt Service Requirement on the Series 2014 Bonds (2) $ 703,513 Maximum Annual Debt Service Coverage 3.81 X "' See the caption "SECURITY FOR THE BONDS -Tax Receipts" herein. (i) See the caption "DEBT SERVICE REQUIREMENTS" herein. THE COVERAGE NUMBERS SET FORTH ABOVE ARE BASED ON HISTORICAL COLLECTIONS OF TAX RECEIPTS CALCULATED ON AN ACCRUAL BASIS. ACTUAL COLLECTIONS OF TAX RECEIPTS WILL DEPEND ON NUMEROUS FACTORS, AND THERE CAN BE NO ASSURANCE THAT FUTURE TAX RECEIPTS AVAILABLE TO PAY DEBT SERVICE ON THE SERIES 2014 BONDS WILL APPROXIMATE SUCH HISTORICAL RESULTS. Series 2014 Series 2014 Total Debt Year Principal(') Interest Service 2015 $ 295,000 $ 405,413 $ 700,413 2016 300,000 399,512 699,512 2017 310,000 393,513 703,513 2018 315,000 387,312 702,312 2019 320,000 381,013 701,013 2020 330,000 373,012 703,012 2021 335,000 363,938 698,938 2022 345,000 353,887 698,887 2023 355,000 343,538 698,538 2024 370,000 332,887 702,887 2025 380,000 321,788 701,788 2026 390,000 310,387 700,387 2027 405,000 294,788 699,788 2028 420,000 278,587 698,587 2029 440,000 261,788 701,788 2030 455,000 244,187 699,187 2031 480,000 221,438 701,438 2032 505,000 197,437 702,437 2033 530,000 172,188 702,188 2034 555,000 145,687 700,687 2035 585,000 117,938 702,938 2036 605,000 96,000 701,000 2037 630,000 73,312 703,312 2038 650,000 49,688 699,688 2039 675.000 25.312 700.312 Totals: $10.980A00 $6.544.550 $17.524.550 Including mandatory sinking fund redemptions. ESTIMATED DEBT SERVICE COVERAGE The following table shows estimated maximum annual debt service coverage with respect to the Series 2014 Bonds utilizing Tax Receipts for the twelve months ended August 31, 2014. Historical Tax ReceiptsM $2,677,468 Maximum Annual Debt Service Requirement on the Series 2014 Bonds (2) $ 703,513 Maximum Annual Debt Service Coverage 3.81 X "' See the caption "SECURITY FOR THE BONDS -Tax Receipts" herein. (i) See the caption "DEBT SERVICE REQUIREMENTS" herein. THE COVERAGE NUMBERS SET FORTH ABOVE ARE BASED ON HISTORICAL COLLECTIONS OF TAX RECEIPTS CALCULATED ON AN ACCRUAL BASIS. ACTUAL COLLECTIONS OF TAX RECEIPTS WILL DEPEND ON NUMEROUS FACTORS, AND THERE CAN BE NO ASSURANCE THAT FUTURE TAX RECEIPTS AVAILABLE TO PAY DEBT SERVICE ON THE SERIES 2014 BONDS WILL APPROXIMATE SUCH HISTORICAL RESULTS. THE CITY General. The City is a city of the first class organized and existing under the laws of the State of Arkansas. The City is the seat of government of Washington County (the "County") and is the fourth largest city in the State. The City is located in the Metropolitan Statistical Area of Fayetteville/Springdale/Rogers (the "MSA"), which includes all of Washington and Benton Counties in the northwest corner of the State and is approximately 185 miles northwest of Little Rock, Arkansas, 125 miles east of Tulsa, Oklahoma, and 210 miles south of Kansas City, Missouri. The City is served by U.S. Interstate 49, U.S. Highways 62 and 71, and State Highways 16, 45, 112, 156, 180 and 265. The Burlington Northern Railroad has several lines running through the City, and a general aviation airport with a 6,006 -foot runway is available for limited commuter travel. The Northwest Arkansas Regional Airport is located approximately 40 minutes from downtown Fayetteville and provides daily flights to numerous venues. Government. The City currently operates under the Mayor -Council form of government pursuant to which a mayor, city attorney, city clerk and eight aldermen are elected, two from each of the City's four wards. The mayor, city attorney and city clerk are full-time positions elected to four-year terms. Aldermen also serve four-year terms. The City's elected officials and the dates on which their respective terms expire are as follows: Name Office Term Expires Lioneld Jordan Mayor 12/31/16 Kit Williams City Attorney 12/31/14 Sondra Smith City Clerk 12/31/16 Rhonda Adams Alderman 12/31/14 Adella Gray Alderman 12/31/14 Mark Kinion Alderman 12/31/14 Alan Long Alderman 12/31/16 Sarah Marsh Alderman 12/31/16 Matthew Petty Alderman 12/31/16 Martin Schoppmeyer, Jr. Alderman 12/31/16 Justin Tennant Alderman 12/31/14 Population. The following is a table of population changes for the City, the MSA and the State of Arkansas, according to the United States Census Bureau: 12 City of State of Year Fayetteville MSA Arkansas 1960 20,274 92,069 1,786,272 1970 30,729 127,846 1,923,322 1980 36,608 178,609 2,286,435 1990 42,099 210,908 2,350,624 2000 58,047 311,121 2,673,400 2010 73,580 463,204 2,915,918 12 Economic Data. Per capita personal income figures for the MSA and the State of Arkansas areas follows: State of Year MSA Arkansas 2003 $25,387 $25,434 2004 27,420 26,846 2005 28,685 27,908 2006 30,168 29,459 2007 31,586 31,517 2008 32,537 32,257 2009 32,313 31,688 2010 33,309 32,373 2011 34,130 33,740 2012 35,437 34,723 Source: Discover Arkansas, Data Analysis. Retail sales figures for the MSA and the State are as follows: "n Does not include McDonald County, Missouri Demographics USA, County Edition, 2003-2008. Nielsen Consumer Buying Power: 2009 -forward. The following table shows the total assessed value of non-utility real and personal property within the City for the years indicated: Year Real Property State of MSA as % of Year MSA Arkansas State of Arkansas 2003 $3,968,812,000 29,920,716,000 13.3% 2004 4,610,051,000 31,436,983,000 14.7% 2005 5,287,158,000 34,290,412,000 15.4% 2006 7,251,810,000 38,843,312,000 18.7% 2007 8,250,140,000 43,504,752,000 19.0% 2008 8,291,415,000 43,820,789,000 18.9% 2009 5,527,678,000"' 35,498,326,000 15.6% 2010 6,133,565,000... 35,247,629,000 17.4% 2011 7,236,224,000... 42,160,822,000 17.2% 2012 7,231,740,000... 42,262,644,000 17.1% "n Does not include McDonald County, Missouri Demographics USA, County Edition, 2003-2008. Nielsen Consumer Buying Power: 2009 -forward. The following table shows the total assessed value of non-utility real and personal property within the City for the years indicated: Year Real Property Personal Property Total 2003 $565,846,525 $167,638,657 $733,485,182 2004 649,361,820 183,102,702 832,464,522 2005 729,172,106 212,694,254 941,866,260 2006 802,306,156 198,469,816 1,000,775,972 2007 942,667,570 203,094,564 1,145,762,134 2008 1,026,022,871 203,311,701 1,232,334,572 2009 1,067,947,653 191,973,349 1,299, 921,002 2010 1,025,933,870 188,130,198 1,214,064,068 2011 1,046,174,941 199,900,209 1,246,075,150 2012 1,063,617,013 203,289,225 1,266,906,238 Source: Washington County Tax Assessor's Office. The assessed value represents 20% of the appraised value of property. 13 Building permits issued by the Cityttl are shown below for the years indicated: 2010 2011 2012 2013 2014(21 Residential Building 256 273 394 379 289 Permits Commercial Building 16 29 18 24 17 Permits Value of All Building Permits $79,103,682 $81,146,187 $251,041,427 $157,970,433 $139,775,340 Does not include building activity of the University of Arkansas, school permits and additions/alterations to existing structures. al For the eight months ended August 31, 2014, Source: City of Fayetteville. Unemployment figures for the MSA and the State of Arkansas, according to the U.S. Bureau of Labor Statistics, are as follows: Year MSA State of Arkansas 2004 3.8% 5.6% 2005 3.3% 5.3% 2006 3.6% 5.4% 2007 3.9% 5.4% 2008 3.8% 5.2% 2009 6.1% 7.4% 2010 6.5% 7.9% 2011 6.2% 8.0% 2012 5.6% 7.3% 2013 4.9% 7.5% 2014* 4.9% 6.2% * August, 2014 only; preliminary. Employment and Industry. The principal campus of the University of Arkansas is located in the City and had total enrollment for the Fall semester of 2014 of approximately 26,300. On the Fayetteville campus, the University employs approximately 4,396 faculty, administrative, secretarial, clerical and maintenance personnel in both full-time and part-time positions, making the University the largest employer in the City. Other major employers in the City, their products or services and approximate number of employees are set forth below: Employer Washington Regional Med Center Veteran's Admin. Medical Ctr. Washington Co. Government Fayetteville School District Superior Industries City of Fayetteville Wal-Mart #9149 Tyson Mexican Original Wal-Mart #144 Source: 2013 City of Fayetteville CAFR. Product or Service Employees Hospital 1,500 Hospital 1,442 Government 1,386 Education 1,340 Transportation equipment 822 Government 731 Optical lab 670 Food products 631 Retail 550 14 THE COMMISSION Pursuant to the authority of the Act, the Advertising and Promotion Commission of the City of Fayetteville, Arkansas (the "Commission") was created by ordinance of the City dated March 1, 1977. The Commission is responsible for the advertising and promotion of the City and its environs and oversees the leasing of certain City - owned convention facilities to the Board of Trustees of the University of Arkansas. The Commission is composed of four members appointed by the City Council, who are hotel, motel or restaurant owners or managers. The three remaining members are two aldermen on the City Council and one member from the public at large. The present members of the Commission are as follows: Member Ching Mong, Chairman Matt Behrend Robert Ferrell Tim Freemen Matthew Petty Justin Tennant Hannah Withers Term Expires Tourism Appointee, March 31, 2018 Tourism Appointee, March 31, 2015 At -Large Appointee, March 31, 2017 Tourism Appointee, March 31, 2016 City Council Member City Council Member Tourism Appointee, March 31, 2017 DEFINITIONS OF CERTAIN TERMS The following are definitions of certain terms used in this Official Statement: "Account" means an Account established by Article V of the Indenture. "Act" means the Advertising and Promotion Commission Act, codified as Arkansas Code Annotated (2008 Repl. & 2013 Supp.) Sections 26-75-601 et seq., as from time to time amended. "Additional Bonds" means Bonds in addition to the Series 2014 Bonds which are issued under the provisions of Section 212 of the Indenture. "Additional Facilities" means land, buildings, structures, machinery, furniture, fixtures, equipment and all related or necessary tangible property constituting improvements which are permitted to be financed under the provisions of the Act. "Annual Debt Service" means, with respect to all or any particular amount of Bonds, the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the amount of such payment which is provided from the proceeds of the sale of Bonds or from sources other than Tax Receipts. "Authorized Representative" means either the Mayor or the Finance Director of the City and such additional persons as from time to time may be designated to act on behalf of the City by a Certificate furnished to the Trustee containing the specimen signature thereof and executed on behalf of the City by its Mayor. "Authorizing Ordinance" means Ordinance No. 5713, adopted by the City on September 16, 2014, which authorized the issuance of the Series 2014 Bonds pursuant to the Indenture. "BAM" means Build America Mutual Assurance Company, a New York domiciled municipal insurance corporation. "Beneficial Owner" means any Person who acquires beneficial ownership interest in a Bond held by the Securities Depository. In determining the Beneficial Owner of any Bond, the Trustee may rely exclusively upon written representations made and information given to the Trustee by the Securities Depository or its Participants with respect to any Bond held by the Securities Depository in which a beneficial ownership interest is claimed. "Bond Counsel" means any firm of nationally recognized municipal bond counsel selected by the City and acceptable to the Trustee. "Bond Fund" means the fund by that name created and established in the Indenture. "Bonds" mean the Series 2014 Bonds and all Additional Bonds, if any, issued by the City pursuant to the Indenture. "Book -Entry System" means the book -entry system maintained by the Securities Depository and described in the Indenture. 15 "Certificate" means a document signed by an Authorized Representative of the City attesting to or acknowledging the circumstances or other matters therein stated. "City" means the City of Fayetteville, Arkansas, a municipality and political subdivision under the laws of the State of Arkansas. "City Clerk" means the person holding the office and performing the duties of the City Clerk of the City. "Closing Date" means, with respect to any series of Bonds, the date upon which there is an exchange of such series of Bonds for the proceeds representing the purchase price for such series of Bonds by the Original Purchaser or Purchasers thereof. "Code" means the Internal Revenue Code of 1986, as from time to time amended, and applicable regulations issued or proposed thereunder. "Commission" means the Advertising and Promotion Commission of the City of Fayetteville, Arkansas, or any successor thereto. "Completion Date" means the date upon which a Project is first ready for normal continuous operation or the date upon which damaged Project facilities are replaced in normal and continuous operation. "Continuing Disclosure Agreement" means, collectively, each Continuing Disclosure Agreement between the City and the Trustee, dated the date of issuance and delivery of a series of Bonds, as originally executed and as amended from time to time in accordance with the terms thereof. "Cost of Issuance Fund" means the fund by that name created and established in the Indenture. "Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, including, but not limited to, underwriting discounts, fees and expenses, election expenses, publication expenses, expenses of printing, reproducing, filing and recording documents, initial fees and charges of the Trustee and any Paying Agent, fees and expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement for the Bonds, costs of execution, transportation and safekeeping of the Bonds, and other costs, charges and fees incurred in connection with the foregoing. "Debt Service" means, with respect to all or any particular amount of Bonds for any Payment Period, the amount required to pay the sum of the interest on such Bonds payable during the Payment Period and the principal of, and any other amount required to effect any mandatory redemption of, such Bonds, if any, during the Payment Period. "Debt Service Reserve Fund" means the fund by that name created and established in the Indenture. "Election Ordinance" means Ordinance No. 5605, adopted by the City on August 6, 2013, which called a special election on November 12, 2013, on the issuance of the Series 2014 Bonds. "Event of Default" means any event of default specified in Section 801 of the Indenture. "Fiscal Year" means the 12 -month period used, at any time, by the City for accounting purposes, which may be the calendar year. "Fund" means a fund confirmed or established by the Indenture. "Government Securities" means (i) direct obligations of the United States of America, (ii) obligations on which the full and timely payment of principal and interest is fully and unconditionally guaranteed by the United States of America (including any such securities issued or held in book -entry form on the books of the Department of Treasury of the United States of America), and (iii) evidences of direct ownership or proportionate or individual interest in future interest or principal payments on specified direct obligations of, or obligations on which the full and timely payment of principal and interest is fully and unconditionally guaranteed by, the United States of America, which obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian in form and substance satisfactory to the Trustee. "Holder" or `Bondholder" or "Owner of the Bonds" means the registered owner of any Bond. "Indenture" means the Trust Indenture dated as of November 1, 2014, between the City and the Trustee, pursuant to which the Bonds are issued, and any amendments and supplements thereto. "Interest Payment Date" means any date on which interest is payable on the Bonds. "Investment Obligations" means, if and to the extent the same are at the time legal for investment of funds held under this Indenture: 16 (a) Cash deposits, certificates of deposits or money market deposits (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with Government Obligations); (b) Government Securities; (c) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America: U.S. Export -Import Bank (Eximbank); Rural Economic Community Development Administration; Federal Financing Bank; General Services Administration; U.S. Maritime Administration; U.S. Department of Housing and Urban Development (PHAs); Small Business Administration; Government National Mortgage Association (GNMA); Federal Housing Administration; and Farm Credit System Financial Assistance Corporation. (d) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: (i) Senior debt obligations rated in the highest long-term rating category by at least two nationally recognized rating agencies issued by the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC); and (ii) Senior debt obligations of the Federal Home Loan Bank System; (e) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which either (i) have a rating on their short-term certificates of deposit on the date of purchase in the highest short-term rating category of at least two nationally recognized rating agencies, (ii) are insured at all times by the Federal Deposit Insurance Corporation, or (iii) are collateralized with direct obligations of the United States of America at 102% valued daily. All such certificates must mature no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (f) Commercial paper which is rated at the time of purchase in the highest short-term rating category of at least two nationally recognized rating agencies and which matures no more than 270 days after the date of purchase; (g) Investments in (i) money market funds subject to SEC Rule 2a-7 and rated in the highest short-term rating category of at least one of S&P and Moody's and (ii) public sector investment pools operated pursuant to SEC Rule 2a-7 in which the City's deposit shall not exceed 5% of the aggregate pool balance at any time and such pool is rated in one of the two highest short-term rating categories of at least one of S&P and Moody's; (h) Pre -refunded municipal obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (i) Which are rated, based on an irrevocable escrow account or fund (the "Escrow"), in the highest long-term rating category of at least two nationally recognized rating agencies; or (ii) (I) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or direct obligations of the United States of America, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (II) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; (i) General obligations of states with a short-term rating in one of the two highest rating categories and a long-term rating in one of the two highest rating categories of at least two nationally recognized rating agencies. In the event such obligations are variable rate obligations, the interest rate on such obligations must be reset not less frequently than annually; and 17 0) Any cash sweep account maintained by the Trustee and consisting of investments described in clauses (a) through (i). "Mayor" means the person holding the office and performing the duties of the Mayor of the City. "Moody's" means Moody's Investors Service. "Original Purchaser" means the first purchaser(s) of a series of Bonds from the City. "Outstanding" means, as of any date of computation, Bonds theretofore or thereupon being delivered under the Indenture, except: (a) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or prior to such date for cancellation; (b) Bonds deemed to be paid in accordance with Article VII of the Indenture; and (c) Bonds in lieu of or in exchange or substitution for which other Bonds shall have been authenticated and delivered pursuant to the Indenture; provided, however, that in the event that the principal and/or interest due on the Series 2014 Bonds shall be paid by BAM pursuant to the Policy, said Series 2014 Bonds shall be deemed to remain Outstanding for all purposes. "Park Project" means the acquisition, construction and equipping of a regional park, financed in part with the proceeds of the Series 2014 Bonds. "Participants" means those financial institutions for whom the Securities Depository effects book -entry transfers and pledges of securities deposited with the Securities Depository in the Book -Entry System, as such listing of Participants exists at the time of such reference. "Payment Period" means a period from, but not including, a Principal Payment Date up to, and including, the next succeeding Principal Payment Date. "Person" means any natural person, firm, association, corporation, limited liability company, partnership, joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Policy" means the municipal bond insurance policy issued by BAM insuring the payment when due of the principal of and interest on the Series 2014 Bonds as provided therein. "Principal Payment Date" means any date on which principal is payable on the Bonds, whether at maturity, by operation of the mandatory sinking fund, or otherwise. "Projects" means the Walton Arts Center Project, the Park Project and any Additional Facilities that may be acquired, constructed and equipped in the future with the proceeds of Bonds. "Project Costs" means, to the extent permitted by the Act or other applicable laws, with respect to a Project, all costs of planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation, including obtaining governmental approvals, certificates, permits and licenses with respect thereto, heretofore or hereafter paid or incurred by or on behalf of the City and which shall include, but shall not be limited to: (a) interest accruing in whole or in part on the Bonds prior to and during construction of a Project, including all amounts required by this Indenture to be paid from the proceeds of the Bonds into the Bond Fund; (b) preliminary investigation and development costs, engineering fees, contractors' fees, labor costs, the cost of materials, equipment, utility services and supplies, costs of obtaining permits, licenses and approvals, costs of real property, insurance premiums, legal and financing fees and costs, administrative and general costs, and all other costs properly allocable to the acquisition, construction and equipping of a Project and placing the same in operation; (c) all costs relating to injury and damage claims arising out of the acquisition, construction or equipping of a Project; (d) all other costs incurred in connection with, and properly allocable to, the acquisition, construction and equipping of a Project and on (e) amounts to pay or reimburse the City or any City fund for expenses of the City incident and properly allocable to such planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation of a Project. "Projects Fund" means the fund by that name created and established in Section 501 of this Indenture. "Qualified Engineer" means a consulting engineer or firm of consulting engineers, whether or not in the regular employ of the City. "Rebate Fund" means the fund by that name created and established in the Indenture. "Record Date" means the close of business on the fifteenth day of the calendar month next preceding each Interest Payment Date on the Bonds or, if such day shall not be a business day, the immediately preceding business day. "Redemption Fund" means the fund by that name established in the Indenture. "Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized Representative and including, without limitation, the specific information required by the Indenture. "Reserve Policy" means the debt service reserve insurance policy issued by BAM guaranteeing certain payments into the Debt Service Reserve Fund with respect to the Series 2014 Bonds as provided therein and subject to the limitations set forth therein. "Reserve Requirement" means, at any particular time, an amount equal to the least of (a) l0% of the face amount of each series of Outstanding Bonds, (b) the maximum Annual Debt Service on each series of Outstanding Bonds, or (c) 1.25 times the average Annual Debt Service on each series of Outstanding Bonds. "Revenue Fund" means the fund by that name confirmed and continued in the Indenture. "S&P" means Standard & Poor's Ratings Services, a Division of the McGraw-Hill Companies, Inc. "Securities Depository" means The Depository Trust Company, a limited -purpose trust company organized under the laws of the State of New York, or its nominee, and its successors and assigns, or any other depository institution appointed by the City to act as depository for the Bonds in connection with the Book -Entry System. "Series 2003 Bonds" means the $6,335,000 City of Fayetteville, Arkansas Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003, dated July 1, 2003, of which $650,000 remains Outstanding. "Series 2014 Bonds" means the City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014, dated November 1, 2014, issued under and secured by the Indenture in the aggregate principal amount of $10,980,000. "State" means the State of Arkansas. "Supplemental Indenture" means any indenture supplemental to or amendatory of the Indenture. "Tax" means the one percent (1%) tax (the "Tax") originally levied in 1977 upon (i) the gross receipts and gross proceeds derived from renting, leasing or otherwise furnishing hotel or motel accommodations for profit within the boundaries of the City, and (ii) the portion of gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delis, drive-in restaurants, carry -out restaurants, concession stands, convenience stores, grocery store -restaurants and similar businesses from the sale of prepared food and beverages for on -premises and off - premises consumption. "Tax Receipts" means receipts derived by the City from the levy of the Tax. "Tax Regulatory Agreement" means with respect to any series of Bonds, that Tax Regulatory Agreement of the City relating to maintenance of the excludability of interest on such Bonds from gross income for federal income tax purposes, delivered in connection with the issuance of such series of Bonds. "Trustee" and "Paying Agent" means the trustee and paying agent for the time being, whether original or successor, with the same institution to always occupy both positions, and with the original Trustee and Paying Agent being Simmons First Trust Company, N.A., Pine Bluff, Arkansas. "Trust Estate" means the property described in the granting clauses of the Indenture. "Walton Arts Center Project" means the expansion and renovation of the Walton Arts Center, financed in part with the proceeds of the Series 2014 Bonds. 19 SUMMARY OF THE INDENTURE The following statements are brief summaries of certain provisions of the Indenture. The statements do not purport to be complete, and reference is made to the Indenture, copies of which are available for examination at the offices of the City Clerk, for a full statement thereof. Funds and Accounts. The Tax Receipts are pledged by the Indenture to the payment of the principal of and interest on the Bonds. The Indenture confirms and continues the Revenue Fund referenced in the trust indenture securing the Series 2003 Bonds. In addition, the following Funds and Accounts are established with the Trustee in connection with the Bonds: Funds and Accounts Bond Fund, and a Principal Account and an Interest Account therein Debt Service Reserve Fund Redemption Fund Projects Fund, and a Park Account and a Walton Arts Center Account therein Cost of Issuance Fund Rebate Fund Application of Tax Receipts. The application of Tax Receipts is as follows (a) Revenue Fund. All Tax Receipts shall, as and when received, be deposited into the Revenue Fund. The Revenue Fund is maintained by the City as a segregated fund. Moneys at any time on deposit in the Revenue Fund are to be applied, as needed, on a monthly basis to provide for the payment of Debt Service on the Bonds, to the maintenance of the Debt Service Reserve Fund, to the payment of any arbitrage rebate due under Section 148(f) of the Code, and to the payment of fees and expenses of the Trustee and any Paying Agent, at the times and in the amounts set forth as follows: (b) Bond Fund. On or before the fifteenth day of each month, commencing December 15, 2014, there shall be transferred from the Revenue Fund (i) into the Interest Account of the Bond Fund, an amount equal to 1/6 of the interest on the Bonds due on the next Interest Payment Date, and (ii) into the Principal Account of the Bond Fund, an amount equal to 1/12 of the principal on the Bonds due on the next Principal Payment Date. Moneys in the Bond Fund shall be used solely for the purpose of paying Annual Debt Service on the Bonds, as provided in the Indenture. The Trustee shall withdraw from the Bond Fund, on the date of any principal or interest payment, an amount equal to such payment for the sole purpose of paying the same. If Tax Receipts in the Revenue Fund are insufficient to make the required monthly payment into the Bond Fund, the amount of any such deficiency in the payment made shall be added to the amount otherwise required to be paid into the Bond Fund in the next succeeding month. When the moneys held in the Bond Fund, the Debt Service Reserve Fund and the Redemption Fund shall be and remain sufficient to pay in full the principal of and interest on all Bonds then Outstanding in accordance with the Indenture, together with the required fees and expenses to be paid or reimbursed to the Trustee and Paying Agent, the City shall have no further obligation to make payments into such Funds. (c) Debt Service Reserve Fund. See the caption "SECURITY FOR THE BONDS — Debt Service Reserve" herein. (d) Redemption Fund. There shall be deposited to the credit of the Redemption Fund all moneys necessary to effect an optional redemption of the Bonds and all remaining moneys transferred from the Projects Fund upon completion of a Project. Moneys in the Redemption Fund shall be transferred to the Principal Account of the Bond Fund at such times as may be necessary to effectuate redemptions of the Bonds on the first available redemption date. See the caption "THE SERIES 2014 BONDS — Redemption" herein. (e) Cost of Issuance Fund. A portion of the proceeds of the Series 2014 Bonds shall be deposited to the credit of the Cost of Issuance Fund. The Trustee shall pay those Costs of Issuance as directed by the City pursuant to a Certificate delivered on a Closing Date. After all Costs of Issuance have been paid with respect to a series of Bonds, any remaining moneys in the Cost of Issuance Fund shall be transferred to the Interest Account of the Bond Fund. 20 M Projects Fund. A portion of the proceeds of the Series 2014 Bonds shall be deposited to the Park Account and the Walton Arts Center Account of the Projects Fund. Amounts in the Accounts of the Projects Fund shall be expended and applied for the payment of Project Costs attributable to the related Project. Disbursements shall be made from the Projects Fund on the basis of Requisitions in the form specified in the Indenture. Within ninety (90) days following completion of a Project or portion thereof being financed by the Bonds, the City shall deliver to the Trustee its Certificate stating that such project or applicable portion thereof is complete, and the Trustee shall transfer the remaining moneys in the applicable Account of the Projects Fund (save and except moneys needed to satisfy unpaid Project Costs) to the Redemption Fund for application to the retirement of Bonds by redemption or purchase as provided in the Indenture. (g) Rebate Fund. The Trustee shall establish and maintain, separate and apart from any other Funds and Accounts established and maintained under the Indenture, the Rebate Fund, which Fund is not pledged to the payment of any Bonds. Subject to transfer to the United States in payment of any arbitrage rebate due under Section 148(f) of the Code, all moneys at any time deposited in the Rebate Fund shall be held by the Trustee in trust, and neither the City nor the Owner of any Bond shall have any rights in or claim to such money. Any amounts remaining in the Rebate Fund after payment in full of the rebate amount owing to the United States, within sixty (60) days after the date on which the last Bond is redeemed, shall be transferred to the Revenue Fund. Any moneys remaining in the Revenue Fund following the required transfers described above may be used for any lawful purpose as determined by the Commission. Investment of Funds. At the direction of the City or absent such direction, the Trustee shall invest moneys in Funds or Accounts held by the Trustee in Investment Obligations with maturity or redemption dates consistent with the times at which said moneys will be required for the purposes provided in the Indenture; provided, however, the stated maturity dates of Investment Obligations of Debt Service Reserve Fund moneys shall not exceed five years from the date of investment therein. Moneys in separate Funds or Accounts may be commingled for the purpose of investment. Obligations purchased as an investment of moneys in any Fund or Account created by the Indenture shall be deemed at all times to be a part of such Fund or Account, and any income or loss due to an investment thereof shall be charged to the respective Fund or Account for which the investment was made except as otherwise provided in the Indenture. Valuation of Funds and Accounts. Investments in any Fund or Account shall be evaluated monthly by the Trustee. For the purpose of determining the amount in any Fund or Account, the City and the Trustee shall value all Investment Obligations credited to such Fund or Account at fair market value. The Trustee shall determine the fair market value based on accepted industry standards and from accepted industry providers. The fair market value of certificates of deposit and bankers' acceptances shall be equal to the face amount thereof plus accrued interest thereon. The fair market value of any Investment Obligation that cannot be determined in the manner provided above shall be established pursuant to the prior agreement of the City and the Trustee. The Trustee shall sell or present for redemption any Investment Obligations as necessary in order to provide money for the purpose of making any payment required under the Indenture, and the Trustee shall not be liable for any loss resulting from any such sale. Responsibility of Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of moneys made by it at the direction of the City. Instruments of Further Assurance. At the request of the Trustee, the City shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, ordinances, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, pledging, assigning and confirming of all and singular the Tax Receipts and all other moneys pledged or assigned by the Indenture, or intended so to be, or which the City may become bound to pledge or assign. Tax Covenants. The City shall not use or permit the use of any Bond proceeds or any other funds of the City, directly or indirectly, in any manner, and will not take or permit to be taken any other action or actions which would adversely effect the exclusion of interest on any Bond from gross income for federal income tax purposes. No part of the proceeds of the Bonds shall at any time be used, directly or indirectly, to acquire securities or obligations the acquisition of which would cause any of such Bonds to be an "arbitrage bond" as defined in Sections 148(a) and (b) of the Code. The City agrees that so long as any of the Bonds remain Outstanding, it will comply with the provisions of each applicable Tax Regulatory Agreement. 21 Defeasance. Any Bond shall be deemed to be paid within the meaning of the Indenture when payment of the principal of and premium, if any, and interest on such Bond (whether at maturity or upon redemption as provided in the Indenture, or otherwise), either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for by irrevocably depositing with the Trustee, in trust and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such payment or (2) Government Securities (provided that such deposit will not affect the tax-exempt status of the interest on any of the Bonds or cause any of the Bonds to be classified as "arbitrage bonds" within the meaning of Section 148(a) of the Code, as reflected in an opinion of Bond Counsel delivered to the Trustee), maturing as to principal and interest in such amounts and at such times as will provide sufficient moneys to make such payment, and all necessary and proper fees, compensation and expenses of the Trustee and any Paying Agent pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of the Trustee and any said Paying Agent. Events of Default. Each of the following events shall constitute and is referred to in the Indenture as an "Event of Default": (a) Default in the due and punctual payment of any interest on any Bond; (b) Default in the due and punctual payment of the principal of or premium, if any, on any Bond, whether at the stated maturity thereof, or upon proceedings for redemption thereof, or upon the maturity thereof by declaration; (c) Default in the payment of any other amount required to be paid under the Indenture or the performance or observance of any other of the covenants, agreements or conditions contained in the Indenture, or in the Bonds issued under the Indenture, and continuance thereof for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied, shall have been given to the City by the Trustee, which may give such notice in its discretion and shall give such notice at the written request of Holders of not less than fifty-one percent (51%) in aggregate principal amount of the Bonds then Outstanding, unless the Trustee, or the Trustee and Holders of an aggregate principal amount of Bonds not less than the aggregate principal amount of Bonds the Holders of which requested such notice, as the case may be, shall agree in writing to an extension of such period prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the Trustee will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the City within such period and is being diligently pursued; (d) The filing of a petition in bankruptcy by or against the City under the United States Bankruptcy Code or the commencement of a proceeding by or against the City under any other law concerning insolvency, reorganization or bankruptcy; and (e) If the State has limited or altered the rights of the City pursuant to the Act, as in force on the date of the Indenture, to fulfill the terms of any agreements made with the Trustee or the Bondholders or in any way impaired the rights and remedies of the Trustee or the Bondholders while any Bonds are Outstanding. The term "default" as used in clauses (a), (b) and (c) above shall mean default by the City in the performance or observance of any of the covenants, agreements or conditions on its part contained in the Indenture, or in the Bonds Outstanding thereunder, exclusive of any period of grace required to constitute a default an "Event of Default" as described above. Acceleration. Upon the occurrence of an Event of Default, the Trustee may, with consent of BAM, and shall, upon the written request of BAM or of the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding with the consent of BAM, by notice in writing delivered to the City, declare the principal of all Bonds then Outstanding, together with any premium and the interest accrued thereon, immediately due and payable, and such principal and interest shall thereupon become and be immediately due and payable. Other Remedies; Rights of Bondholders. Upon the occurrence of an Event of Default, the Trustee may, as an alternative, pursue any available remedy by suit at law or in equity, including, without limitation, mandamus to enforce the payment of the principal of and premium, if any, and interest on the Bonds then Outstanding. If an Event of Default shall have occurred, and if it shall have been requested so to do by the Holders of 51% in aggregate principal amount of Bonds Outstanding and if it shall have been indemnified as provided in the Indenture, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred upon it by the Indenture as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Bondholders. 22 No remedy by the terms of the Indenture conferred upon or reserved to the Trustee (or to the Bondholders) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given under the Indenture or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or acquiescence therein; and every such right and power may be exercised from time to time and as often as may be deemed expedient. No waiver of any default or Event of Default under the Indenture, whether by the Trustee or by the Bondholders, shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. Rights and Remedies of Bondholders. No Holder of any Bond shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of the Indenture or for the execution of any trust thereof or for the appointment of a receiver or any other remedy thereunder, unless a default has occurred of which the Trustee has been notified as provided in the Indenture, or of which by the Indenture it is deemed to have notice, nor unless such default shall have become an Event of Default and the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding shall have made written request to the Trustee and shall have offered it reasonable opportunity either to proceed to exercise the powers granted or to institute such action, suit, or proceeding in its own name, nor unless also they have offered to the Trustee indemnity as provided in the Indenture nor unless the Trustee shall thereafter fail or refuse to exercise the powers granted, or to institute such action, suit, or proceeding in its own name; and such notification, request and offer of indemnity are declared in every such case at the option of the Trustee to be conditions precedent to the execution of the powers and trusts of the Indenture, and to any action or cause of action for the enforcement of the Indenture or for the appointment of a receiver or for any other remedy thereunder; it being understood and intended that no one or more Holders of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of the Indenture by action of the Holder or Holders or to enforce any right under the Indenture except in the manner therein provided, and that all proceedings at law or in equity shall be instituted, held and maintained in the manner therein provided for the equal benefit of the Holders of all Bonds Outstanding thereunder. Nothing in the Indenture contained shall, however, affect or impair the right of any Bondholders to enforce the payment of the principal of and premium, if any, and interest on any Bonds at and after the maturity thereof, or the obligation of the City to pay the principal of and premium, if any, and interest on each of the Bonds issued under the Indenture to the respective Holders thereof at the time and place in said Bonds expressed. Consent of BAM Upon Event of Default. Anything in the Indenture to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default, BAM shall be entitled to control and direct the enforcement of all rights and remedies granted to the Bondholders or to the Trustee for the benefit of the Bondholders under the Indenture, including, without limitation: (i) the right to accelerate the principal of the Series 2014 Bonds, and (ii) the right to annul any declaration of acceleration, and BAM shall also be entitled to approve all waivers of Events of Default. Supplemental Indentures Not Requiring Consent of Bondholders. The City and the Trustee may, from time to time and at any time, without the consent of or notice to the Bondholders, enter into Supplemental Indentures as follows: (a) to cure any formal defect, omission, inconsistency or ambiguity in the Indenture (b) to grant to or confer or impose upon the Trustee for the benefit of the Bondholders any additional rights, remedies, powers, authority, security, liabilities or duties which may lawfully be granted, conferred or imposed and which are not contrary to or inconsistent with the Indenture as theretofore in effect, provided that no such additional liabilities or duties shall be imposed upon the Trustee without its consent; (c) to add to the covenants and agreements of, and limitations and restrictions upon, the City in the Indenture other covenants, agreements, limitations and restrictions to be observed by the City which are not contrary to or inconsistent with the Indenture as theretofore in effect; (d) to confirm, as further assurance, any pledge under, and the subjection to any claim, lien or pledge created or to be created by, the Indenture, of the Trust Estate or of any other moneys, securities or funds; (e) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time amended; (f) to authorize the issuance and sale of one or more series of Additional Bonds; 23 (g) to make such additions, deletions or modifications as may be necessary to assure compliance with Section 148(f) of the Code relating to required rebate to the United States or otherwise as may be necessary to assure exemption from federal income taxation of interest on the Bonds; or (h) to modify, alter, amend or supplement the Indenture in any other respect which is not materially adverse to the Bondholders and which does not involve a change described in clause (a), (b), (c), (d), (e) or (f) below and which, in the judgment of the Trustee, is not to the prejudice of the Trustee. Supplemental Indentures Requiring Consent of Bondholders. Subject to the terms and provisions contained above and in this paragraph, and not otherwise, BAM and the Holders of not less than 2/3 in aggregate principal amount of the Bonds then Outstanding shall be required, from time to time, anything contained in the Indenture to the contrary notwithstanding, to consent to and approve the execution by the City and the Trustee of such indenture or indentures supplemental to the Indenture as shall be deemed necessary and desirable by the City for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in the Indenture or in any Supplemental Indenture; provided, however, that nothing contained in the Indenture shall permit or be construed as permitting (a) an extension of the maturity (or mandatory redemption date) of the principal of or the interest on any Bond issued thereunder, or (b) a reduction in the principal amount of or redemption premium or rate of interest on any Bond issued thereunder, or (c) the creation of any lien on the Trust Estate or any part thereof, except as expressly permitted in the Indenture, or (d) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture, or (f) depriving the Holder of any Bond then Outstanding of the lien created on the Trust Estate. If, at any time the City shall request the Trustee to enter into any Supplemental Indenture for any of the purposes described above, the Trustee shall, at the expense of the City, cause notice of the proposed execution of such Supplemental Indenture to be mailed by first class mail to each registered owner of the Bonds. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the principal office of the Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such Supplemental Indenture when consented to and approved as provided above. If BAM and the Holders of not less than 2/3 in aggregate principal amount of the Bonds Outstanding at the time of the execution of any such Supplemental Indenture shall have consented to and approved the execution thereof, no Holder of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from executing the same or from taking any action pursuant to the provisions thereof. SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT The City has entered into an undertaking in the form of the Continuing Disclosure Agreement for the benefit of the Beneficial Owners of the Series 2014 Bonds to cause certain financial information to be sent to certain information repositories annually and to cause notice to be sent to such information repositories of certain specified events, pursuant to the requirements of Section (b)(5)(i) of Rule 15c2-12 of the Securities Exchange Act of 1934, as amended (the "Rule"). The City is a party to multiple continuing disclosure agreements for various bond issues of the City secured by different repayment sources. Except as set forth below, the City has, to the best of its knowledge for the past five years, been in compliance in all material respects with the provisions in such agreements to which it is a party requiring that it file certain financial information and financial statements and certain listed events with the MSRB through its EMMA system. With respect to the City's continuing disclosure obligations relating to the Series 2003 Bonds being refunded with a portion of the proceeds of the Series 2014 Bonds, the City's audited financial statements and supplemental financial data for fiscal years 2009, 2010 and 2011 were not posted on a timely basis (posted 7/30/14). Ratings changes with respect to the insurer of the Series 2003 Bonds were not posted. With respect to the City's continuing disclosure obligations for certain bonds secured by water and sewer revenues which are no longer outstanding, audited financial statements and supplemental operating and financial data for fiscal years 2009, 2010 and 2011 were not posted on a timely basis. Said audited financial statements and supplemental operating and financial data were timely posted on EMMA for one issue of the City's water and sewer revenue bonds. A ratings upgrade with respect to one series of water and sewer revenue bonds (no longer outstanding) was not posted. 24 Supplemental financial data for fiscal years 2009, 2010 and 2011 was timely filed but incomplete (remedied 6/27/13) for an issue of the City's tax increment finance bonds. With respect to an issue of the City's general obligation bonds which are no longer outstanding, the City's audited financial statements for fiscal year 2009 were not timely posted on EMMA. The City makes no representation as to the materiality of the continuing disclosure delinquencies and omissions described above. The City has undertaken steps to ensure future compliance with its continuing disclosure obligations. The Continuing Disclosure Agreement contains the following covenants and provisions: (a) The City covenants that it will disseminate, or will cause the Dissemination Agent to disseminate, the Annual Financial Information and the Audited Financial Statements (in the form and by the dates set forth in Exhibit I to the Continuing Disclosure Agreement) by delivering such Annual Financial Information to the MSRB within 180 days of the completion of the City's fiscal year. Audited Financial Statements, if available, shall be filed with the MSRB at the same time as the Annual Financial Information. If not then available, unaudited financial statements shall be included with the MSRB filing, and Audited Financial Statements shall be provided to the MSRB within ten (10) business days after availability thereof. The City is required to deliver or cause delivery of such information in Prescribed Form and by such time so that such entity receives the information by the dates specified. (b) If any part of the Annual Financial Information can no longer be generated because the operations to which it is related have been materially changed or discontinued, the City will disseminate or cause dissemination of a statement to such effect as part of its Annual Financial Information for the year in which such event first occurs. (c) If any amendment is made to the Continuing Disclosure Agreement, the Annual Financial Information for the year in which such amendment is made (or in any notice or supplement provided to the MSRB) shall contain a narrative description of the reasons for such amendment and its impact on the type of information being provided. (d) The City covenants to disseminate or cause dissemination in a timely manner, not in excess of ten (10) business days after the occurrence of the event, of Material Events Disclosure to the MSRB in Prescribed Form. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Series 2014 Bonds or defeasance of any Series 2014 Bonds need not be given under the Continuing Disclosure Agreement any earlier than the notice (if any) of such redemption or defeasance is given to the owners of the Series 2014 Bonds pursuant to the Indenture. The City is required to deliver or cause delivery of such Material Events Disclosure in the same manner as provided for Annual Financial Information and Audited Financial Statements. (e) The City shall give notice in a timely manner or shall cause such notice to be given by the Dissemination Agent, not in excess of ten (10) business days after the occurrence of the event, to the MSRB in Prescribed Form of any failure to provide Annual Financial Information Disclosure when the same is due. (f) The Continuing Disclosure Agreement has been executed in order to assist the Participating Underwriter in complying with the Rule; however, the Continuing Disclosure Agreement shall inure solely to the benefit of the City, the Dissemination Agent, if any, the Trustee and the Beneficial Owners of the Series 2014 Bonds, and shall create no rights in any other person or entity. In the event of a failure of the City to comply with any provision of the Continuing Disclosure Agreement, the Beneficial Owner of any Series 2014 Bond may seek specific performance by court order to cause the City to comply with its obligations under the Continuing Disclosure Agreement. A default under the Continuing Disclosure Agreement shall not be deemed an Event of Default under the Indenture or any other agreement, and the sole remedy under the Continuing Disclosure Agreement in the event of any failure of the City or the Dissemination Agent to comply with the Continuing Disclosure Agreement shall be an action to compel performance. (g) The Undertaking of the City pursuant to the Continuing Disclosure Agreement shall be terminated hereunder when the City shall no longer have any legal liability for any obligation on or relating to the repayment of the Series 2014 Bonds. The City shall give notice to the MSRB, or shall cause the Dissemination Agent to give such notice, in a timely manner and in Prescribed Form in such event. (h) The City and the Dissemination Agent may amend the Continuing Disclosure Agreement, and any provision of the Continuing Disclosure Agreement may be waived, if (i) the amendment or waiver is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the City or type of business conducted; (ii) the Continuing Disclosure Agreement, 25 as amended, or the provision, as waived, would have complied with the requirements of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; (iii) the amendment or waiver does not materially impair the interests of the Beneficial Owners of the Series 2014 Bonds, as determined either by parties unaffiliated with the City (such as the Trustee) or by an approving vote of the Beneficial Owners of the Series 2014 Bonds holding a majority of the aggregate principal amount of the Series 2014 Bonds (excluding Series 2014 Bonds held by or on behalf of the City or its affiliates) pursuant to the terms of the Indenture at the time of the amendment; or (iv) the amendment or waiver is otherwise permitted by the Rule. (i) The following terms used under this caption shall have the meanings set forth below: "Annual Financial Information" means the Tax Receipts for the latest fiscal year and for the four previous fiscal years. "Annual Financial Information Disclosure" means the dissemination of disclosure concerning Annual Financial Information and the dissemination of the Audited Financial Statements as set forth in subsection (a) above. "Audited Financial Statements" means the audited consolidated financial statements of the City, prepared pursuant to generally accepted accounting standards and as described in Exhibit I to the Continuing Disclosure Agreement. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2014 Bonds (including persons holding Series 2014 Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2014 Bonds for federal income tax purposes. "Commission" means the U.S. Securities and Exchange Commission. "Dissemination Agent" shall mean Simmons First Trust Company, N.A., Pine Bluff, Arkansas, acting in its capacity as a dissemination agent under the Continuing Disclosure Agreement, or any successor dissemination agent designated in writing by the City and which has filed with the Trustee a written acceptance of such designation. MSRB. I.no T11R "EMMA" means the Electronic Municipal Market Access facility for municipal securities disclosure of the "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Material Event" means the occurrence of any of the following events with respect to the Series 2014 (1) Principal and interest payment delinquencies; (2) Nonpayment -related defaults, if material; (3) Unscheduled draws on debt service reserves reflecting financial difficulties; (4) Unscheduled draws on credit enhancements reflecting financial difficulties; (5) Substitution of credit or liquidity providers, or their failure to perform; (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; (7) Modifications to rights of security holders, if material; (8) Bond calls, if material, and tender offers; (9) Defeasances; (10) Release, substitution or sale of property securing repayment of the securities, if material; (11) Rating changes; (12) Bankruptcy, insolvency, receivership or similar event of the City; (13) The consummation of a merger, consolidation or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry 26 into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material. "Material Events Disclosure" means dissemination of a notice of a Material Event as set forth in subsection (d) above. "MSRB" shall mean the Municipal Securities Rulemaking Board established in accordance with the provisions of Section 1513(b)(1) of the 1934 Act. "Participating Underwriter" means each broker, dealer or municipal securities dealer acting as an underwriter in any primary offering of the Series 2014 Bonds. "Prescribed Forte" means, with regard to the filing of Annual Financial Information, Audited Financial Statements and notices of Material Events with the MSRB at www.emma.msrb.org (or such other address or addresses as the MSRB may from time to time specify), such electronic format, accompanied by such identifying information, as shall have been prescribed by the MSRB and which shall be in effect on the date of filing of such information. "Rule" shall mean Rule 15c2 -12(b)(5) adopted by the Securities and Exchange Commission ("SEC') under the Exchange Act, as the same may be amended from time to time. "State" means the State of Arkansas. "Undertaking" means the obligation of the City pursuant to subsections (a) and (d) above. UNDERWRITING Under a bond purchase agreement entered into by and between the City and Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), the Series 2014 Bonds are being purchased at a purchase price of $11,532,990.60 (representing the stated principal amount of the Series 2014 Bonds plus a net reoffering premium of $662,790.60 and less an underwriting discount of $109,800.00) plus accrued interest from November 1, 2014 to the date of delivery of the Series 2014 Bonds. The bond purchase agreement provides that the Underwriter will purchase all of the Series 2014 Bonds if any are purchased. The obligation of the Underwriter to accept delivery of the Series 2014 Bonds is subject to various conditions contained in the bond purchase agreement, including the absence of pending or threatened litigation questioning the validity of the Series 2014 Bonds or any proceedings in connection with the issuance thereof, and the absence of material adverse changes in the financial condition of the City. The Underwriter intends to offer the Series 2014 Bonds to the public initially at the offering prices as set forth on the inside cover page of this Official Statement, which offering prices (or bond yields establishing such offering prices) may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the Series 2014 Bonds to the public, and may offer the Series 2014 Bonds to such dealers and other underwriters at a price below the public offering price. The City has agreed to indemnify the Underwriter against certain civil liabilities in connection with the offering and sale of the Series 2014 Bonds, including certain liabilities under federal securities laws. TAX MATTERS Federal Income Taxes. In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Series 2014 Bonds is excludable from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinion described in the preceding sentence assumes the accuracy of certain representations and compliance by the City with covenants designed to satisfy the requirements of the Code that must be met subsequent to the issuance of the Series 2014 Bonds. Failure to comply with such requirements could cause interest on the Series 2014 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2014 Bonds. The City has covenanted to comply with such requirements. 27 Notwithstanding Bond Counsel's opinion that interest on the Series 2014 Bonds is not a specific preference item for purposes of the federal alternative minimum tax, such interest will be included in adjusted current earnings of certain corporations, and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of such corporation's adjusted current earnings over their alternative minimum taxable income (determined without regard to such adjustment and prior to reduction for certain net operating losses). Original Issue Discount. The Series 2014 Bonds maturing November 1, 2039 (the "Discount Bonds") are being sold at an original issue discount. The difference between the initial public offering prices of such Discount Bonds and their stated amounts to be paid at maturity constitutes original issue discount treated in the same manner for federal income tax purposes as interest, as described above. The amount of original issue discount which is treated as having accrued with respect to a Discount Bond is added to the cost basis of the owner in determining, for federal income tax purposes, gain or loss upon disposition of such Discount Bond (including its sale, redemption or payment at maturity). Amounts received upon disposition of such Discount Bond which are attributable to accrued original issue discount will be treated as tax-exempt interest, rather than as taxable gain, for federal income tax purposes. Original issue discount is treated as compounding semiannually, at a rate determined by reference to the yield to maturity of each individual Discount Bond, on days which are determined by reference to the maturity date of such Discount Bond. The amount treated as original issue discount on such Discount Bond for a particular semiannual accrual period is equal to the product of (i) the yield to maturity for such Discount Bond (determined by compounding at the close of each accrual period) and (ii) the amount which would have been the tax basis of such Discount Bond at the beginning of any particular accrual period if held by the original purchaser, less the amount of any interest payable for such Discount Bond during the accrual period. The tax basis is determined by adding to the initial public offering price on such Discount Bond the sum of the amounts which have been treated as original issue discount for such purposes during all prior periods. If such Discount Bond is sold between semiannual compounding dates, original issue discount which would have been accrued for that semiannual compounding period for federal income tax purposes is to be apportioned in equal amounts among the days in such compounding period. Owners of Discount Bonds should consult their tax advisors with respect to the determination and treatment of original issue discount accrued as of any date and with respect to the state and local tax consequences of owning a Discount Bond. Original Issue Premium. The Series 2014 Bonds maturing November 1, 2015 through 2025, and on November 1, 2029 and 2034 (the "Premium Bonds") are being sold at a premium. An amount equal to the excess of the issue price of a Premium Bond over its stated redemption price at maturity constitutes premium on such Premium Bond. An initial purchaser of a Premium Bond must amortize any premium over such Premium Bond's term using constant yield principles, based on the purchaser's yield to maturity (or, in the case of Premium Bonds callable prior to their maturity, by amortizing the premium to the call date, based on the purchaser's yield to the call date and giving effect to the call premium). As premium is amortized, the amount of the amortization offsets a corresponding amount of interest for the period and the purchaser's basis in such Premium Bond is reduced by a corresponding amount resulting in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Premium Bond prior to its maturity. Even though the purchaser's basis may be reduced, no federal income tax deduction is allowed. Purchasers of the Premium Bonds should consult their tax advisors with respect to the determination and treatment of premium for federal income tax purposes and with respect to the state and local tax consequences of owning a Premium Bond. Bond Counsel has expressed no opinion regarding other federal tax consequences arising with respect to the Series 2014 Bonds. The accrual or receipt of interest on the Series 2014 Bonds may otherwise affect the federal income tax liability of the owners, of the Series 2014 Bonds. The extent of these other tax consequences will depend upon such owner's particular tax status and other items of income or deduction. Bond Counsel has expressed no opinion regarding any such consequences. Purchasers of the Series 2014 Bonds, particularly purchasers that are corporations (including S corporations and foreign corporations operating branches in the United States), property or casualty insurance companies, banks, thrifts or other financial institutions, certain recipients of Social Security or Railroad Retirement benefits, taxpayers otherwise entitled to claim the earned income credit, or taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, should consult their tax advisors as to the tax consequences of purchasing or owning the Series 2014 Bonds. 28 Backup Withholding. As a result of the enactment of the Tax Increase Prevention and Reconciliation Act of 2005, interest on tax-exempt obligations such as the Series 2014 Bonds is subject to information reporting in a manner similar to interest paid on taxable obligations. Backup withholding may be imposed on payments made after March 31, 2007 to any bondholder who fails to provide certain required information, including an accurate taxpayer identification number, to any person required to collect such information pursuant to Section 6049 of the Code. The new reporting requirement does not in and of itself affect or alter the excludability of interest on the Series 2014 Bonds from gross income for federal income tax purposes or any other federal tax consequence of purchasing, holding or selling tax-exempt obligations. Changes in Federal and State Tax Law. From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the Series 2014 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the Series 2014 Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular lawsuit will be resolved, or whether the Series 2014 Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2014 Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial authorities as of the date of issuance and delivery of the Series 2014 Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation. State Taxes. Bond Counsel is of the opinion that, under existing law, the interest on the Series 2014 Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. RATINGS Standard & Poor's Rating Services, a Standard & Poor's Financial Services LLC business ("S&P"), is expected to assign a rating of "AA" (stable outlook) to the Series 2014 Bonds based on the delivery of the Policy by BAM and has assigned an underlying rating of "A+" (stable outlook) to the Series 2014 Bonds. Such ratings reflect only the view of S&P at the time such ratings were given. An explanation of the significance of the ratings may be obtained only from Standard & Poor's Rating Services, 25 Broadway, New York, New York 10004, telephone (212) 208-1723. There can be no assurance that any rating will continue for any given period of time or that ratings will not be revised downward or withdrawn entirely. In the Continuing Disclosure Agreement, the City has agreed to give notice of certain material events, including the revision or withdrawal of any rating on the Series 2014 Bonds. Neither the City nor the Underwriter have undertaken any responsibility subsequent to the issuance of the Series 2014 Bonds to assure the maintenance of the ratings or to oppose any revision or withdrawal of the ratings. No application has been made to any rating agency other than S&P for a rating on the Series 2014 Bonds. LEGAL MATTERS Legal Opinions. Legal matters incident to the authorization and issuance of the Series 2014 Bonds are subject to the unqualified approving opinion of Kutak Rock LLP, Little Rock, Arkansas, Bond Counsel, a copy of whose approving opinion will be delivered with the Series 2014 Bonds and a form of which is attached hereto as Appendix A. Certain legal matters will be passed upon for the City by its counsel, Kit Williams, Esq., City Attorney. Litigation. There is no litigation pending seeking to restrain or enjoin the issuance or delivery of the Series 2014 Bonds or questioning or affecting the legality of the Series 2014 Bonds or the proceedings and authority under which the Series 2014 Bonds are to be issued, or questioning the right of the City to issue the Series 2014 Bonds or to levy the Tax or pledge the Tax Receipts. EKY] MISCELLANEOUS Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or owners of any of the Series 2014 Bonds. ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT The information contained in this Official Statement has been taken from sources considered to be reliable, but is not guaranteed. To the best of the knowledge of the City, this Official Statement does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated herein, or necessary to make the statements herein, in light of the circumstances under which they were made, not misleading. [REMAINDER OF PAGE INTENTIONALLY BLANK] 30 The execution and delivery of this Official Statement has been duly authorized by the City of Fayetteville, Arkansas. XCITYOAY VILLE,ANSAS rdan Mayor 31 APPENDIX A Proposed Form of Bond Counsel Opinion Kutak Rock LLP, Bond Counsel, will render an opinion with respect to the Series 2014 Bonds, dated the date of issuance and delivery thereof, in substantially the following form: City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas November_, 2014 $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance and sale by the City of Fayetteville, Arkansas (the "City"), a political subdivision of the State of Arkansas, of its $10,980,000 Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, the Advertising and Promotion Commission Act, Arkansas Code Annotated (2008 Repl. & 2013 Supp.) §§26-75-601 et seq. (as from time to time amended, the "Act"), pursuant to Ordinance No. 5713 of the City, duly adopted and approved on September 16, 2014 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of November 1, 2014 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., as trustee (the "Trustee"). Reference is hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with respect to the conditions for the issuance of parity indebtedness by the City, the nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the Holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Levying Ordinance, the Election Ordinance and the Authorizing Ordinance and to enter into and perform its obligations under the Indenture, the valid adoption of the Levying Ordinance, the Election Ordinance and the Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Election Ordinance, the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. A-1 Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, the Act, the City is empowered to adopt the Election Ordinance and the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 4. The Bonds have been validly authorized, executed, issued and delivered by the City and represent valid and binding special obligations of the City. The principal of, premium, if any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and pledge by the City to the Trustee of the Tax Receipts (as defined in the Indenture). 5. The Tax Receipts have been duly and validly assigned and pledged to the Trustee under the Indenture, and the Indenture creates, as security for the Bonds, a valid security interest in the Tax Receipts. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated (2001 Repl.) Section 4-9-109(d)(14), the pledge, assignment and security interest in the Tax Receipts securing the Bonds is and shall be prior to any judicial lien hereafter imposed on the Tax Receipts to enforce a judgment against the City on a simple contract, and it is not necessary to file a Uniform Commercial Code financing statement in order to perfect a security interest in the Tax Receipts. 6. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. The opinions set forth in the preceding sentence are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied prior to or subsequent to the issuance of the Bonds in order that the interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. The interest on the Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. 8. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended, in connection with the offer and sale of the Bonds. It is to be understood that the rights of the registered owners of the Bonds and the enforceability of the Bonds, the Authorizing Ordinance and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Very truly yours, A-2 APPENDIX B SPECIMEN MUNICIPAL BOND INSURANCE POLICY 's # BAH ISSUER: [NAME OF ISSUER] MEMBER: [NAME OF MEMBER] BONDS: $ in aggregate principal amount of [NAME OF TRANSACTION] [and maturing on] MUNICIPAL BOND INSURANCE POLICY Policy No: Effective Date: Risk Prem Member Surplus C Total lnsU: BUILD AMERICA MUTUAL ASSURANCE COMPANY ("BAM,"),,,for consideration nipich 6d, hereby UNCONDITIONALLY AND IRREVOCABLY agrees w pay to the trustee (rbc "frosYee") or paying agctni(t](e Paging Ag`' (") fo ibc Bonds named above (as set forth in the documentation providing for the issuance and securing of the Bonds), for the`fiegeGt'of[he;Qxmcrs or. at the election of DAM, directly to each Owner, subject only to the terms of this Policy (which includes each ejfdorsemenl lieroto), thnf#portion of the principal of mrd interest on the Bonds that shall become Due for Payment but shall be unpaid by reason o(Nuupgymcm by ihcissuer. On the later ofihc day on which such principal and intend becumesQue for Pairmcnl or (he first Business Day following the Business Day on which DAM shall have received Notice ofNonpaymentt, BAIvi'will dismasijtbut without duplication in the ease of duplicate claims for the same Nonpayment) to or far the benefit of each Owner of fluff Donds, the face inn"oui f%f principal of and interest on the Bonds that is then Due for. Payment but is then unpaid by reason of Nonpayment 0 the Issuer, but ady up"an receipt by DAM, in a rout reasonably satisfactory to it, of (a) evidence of the Owner's right to receive payment of mai principal or idbiresl then Due for Payment and (b) evidence, including any appropriate instruments ofassignnien(, that all of the Owner��, rt htstvihh respect to pay`icto of such principal or interest that is Due for Payment shall thereupon vast in DAM. A Notice of Nonpayment will Isi, &fined reeerve�d�on„,a given Business Day if it is received prior to 1:00 p.m. (Nos York time) on such Business Day; otherwise, it will hHe Bhe deemed received on the s`iaess Day. If any Notice of Nonpayment received by DAM is incomplete, it shall be deemed not to have been mccivid by DAM Ibr purposes of the preceding sentence.. and DAM shall promptly so advise the Trustee, Paying Agent or Owner. as appropriate, any tifw[ibm niaj+submrt Eu amended Notice of Nonpayment. Upon disbursement under this Policy in respect of Bond and to the extent of such pay mem B shall beeo4 the owner of such Bond, any appurtenant coupon to such Bond and right to receipt of payment of principal of or mtemst•,on suchttd and slafil be fully subrogated to the rights of the Outer, including the Owner's right to receive payments under such bond Y`a};nmf by BAM.rither,f the Trustee or Paying Agent for die benclit of the Owners, or directly to the Owners, on account of any Nonpayment shall dts„e6arge (he ov�illgelion of DAM under this Policy with respect to said Nonpayment. Except to the e2tenlexpre$sly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Do};, i'Saps ane day, other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer ,,Fl i l Agent (af tefined herein) are authorized or required by law or excendve order to remain closed 'Duc for Payment' means (a) when referring to the principal ofa➢9nd, payable on the slated maturity date thereof or the date on which the same shall have been duly called for mmtdamryeniking Cwt- Rdemplion-and docs not refer to any earlier dale on which payment is due by reason of call for redemption (other than by an mdatorystnlCirigtund redimptiun), acceleration or other advancement of maturity (unless DAM shall deal, in its sole discretion, to pay such principal due -spoon such acceleration together with any accrued interest to the date of acceleration) and (b) when referring to interest on a Bond. payable on the stated datefor payment of interest "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or* fi` there is no Trustee, to the Paying Agent for payment in fall of all principal and interest that is Due for Payment on such Bond .Nonpayment" lull also include, in respect of a Bond, any payment made to an Owner by or on behalf of the Issuer of principal or interest that is Due for Payment, which payment has been recovered from such Owner pursuant to the United States Bankruptcy Code in accordance with a final, nonappeilable order or court having competcntjurisdietion. "Notice" means delivery to DAM of notice of claim and certificate, by certified mail, email or telecopy as set forth on the attached Schedule or other acceptable electronic delivery, in a form satisfactory to DAM. from and signed by an Owner, the Trustee or the Paying Agent, which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount (d) payment instructions and (a) the date such claimed amount becomes or became Due for Payment. "Owmer' means, in respect of a Bond, the person or entity who, at the lime of Nonpayment, is entitled under the terms of such Bond to payment thereof except that "Owncr'shall not include the Issuer, the Memberor any other person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds. I BAM may appoint a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this Policy by giving written notice to the Trustee, the Paying Agent, the Member and the Issuer specifying the name and notice address oflhe Insurer's Fiscal Agent. From and alterthe date of receipt of such notice by the Trustee, the Paying Agent, the Member or the Issuer (a) copies of all notices required to be delivered to BAM pursuant to this Policy shall be simullaneously delivered to the Insurer's Fiscal Agent and to BAM and ghall not be deemed received until received by both and (b) all payments required to be made by BAM under this Policy may be made directly by BAM or by the Insurer's Fiscal Agent on behalf of BAM. The Insurer's Fiscal Agent is the agent of BAM only, and the Insurer's Fiscal Agent shall in no event be liable to the Trustee. Paving Agent or any Owner for any act of the Insurer's Fiscal Agent or any failure of BAM to deposit or cause to be deposited sufficient funds to make payments due under this Policy. To the fullest extent permitted by applicable Ian. BAM agrees not to assert, and hereby waives, only for the benefit of each Owner. all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of Emu l)t,,00ber acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to BAM to avoid paymcn6otiis obligations under this Policy in accordance with the express provisions of this Policy. This Policy may not be canceled or revoked. - This Policy sets forth in full die undertaking of BAM and shall not be modified altered or affected by any m7tFxragrcemen(aoinshumenl, including any modification or amendment tsreto. Except to the extent expressly modified by an endorsement hcmto, mT prtntiispec[ of this Poli is nonrefundable for an reason whatsoever, including payment, or provision KA made for a'ment, oF�tfic Bonds prior to maturity. Policy Y gPY P g P} P Y THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUNIS SPECIHFD'IN.AR11 I -E l6 OFTHE NEW YORK INSURANCE LAW. THIS POLICY IS ISSUED WITHOUT CONTINGENT MUTUAL liIABILITY FOR ASSESSMENT. In witness whereof. BUILD AMERICA MUTUAL ASSURANCE COMPANY has caused this Polity to be- executed on its behalf by its Authorized Officer. 1NY Notices (Unless Otherwise Specified by BAM) Email: clafmsaa==.buildamerica.co Address: I World Financial Center, 27th Boor 200 Liberty Street New York. New York 10281 Telecopy: 212-962-1524 (attention: Claims) IM NORTHWEST ARKANSAS OFFICE SUITE 400 234 EAST MILLSAP ROAD FAYETTEVILLE, ARKANSAS 72703-4099 479-973-4200 GORDON M. WILBOURN gordon.wilboum@kutakrock.com (501)975-3101 City of Fayetteville, Arkansas Fayetteville, Arkansas KUTAK ROCK LLP ATLANTA CHICAGO SUITE 2000 DENVER 124 WEST CAPITOL AVENUE FAYETTEVILLE IRVINE LITTLE ROCK, AR 72201-3706 KANSAS CITY LITTLE ROCK 501-975-3000 LOS ANGELES FACSIMILE 501-975-3001 MINNEAPOLIS OKLAHOMA CITY W Ww.kutakrook.00. OMAHA PHILADELPHIA RICHMOND SCOTTSDALE WASHINGTON WICHITA November 19, 2014 Simmons First Trust Company, N.A., as trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance and sale by the City of Fayetteville, Arkansas (the "City"), a political subdivision of the State of Arkansas, of its $10,980,000 Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, the Advertising and Promotion Commission Act, Arkansas Code Annotated (2008 Repl. & 2013 Repl.) §§26-75-601 et seq. (as from time to time amended, the "Act"), pursuant to Ordinance No. 5713 of the City, duly adopted and approved on September 16, 2014 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of November 1, 2014 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., as trustee (the "Trustee"). Reference is hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with respect to the conditions for the issuance of parity indebtedness by the City, the nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the 4821-9176-8864.1 KUTAK ROCK LLP Approving Opinion November 19, 2014 Page 2 status and valid existence of the City, the power of the City to adopt the Levying Ordinance, the Election Ordinance and the Authorizing Ordinance and to enter into and perform its obligations under the Indenture, the valid adoption of the Levying Ordinance, the Election Ordinance and the Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Election Ordinance, the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, the Act, the City is empowered to adopt the Election Ordinance and the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 4. The Bonds have been duly authorized, executed, issued and delivered by the City and represent valid and binding special obligations of the City. The principal of, premium, if any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and pledge by the City to the Trustee of, the Tax Receipts (as defined in the Indenture). 5. The Tax Receipts have been duly and validly assigned and pledged to the Trustee under the Indenture, and the Indenture creates, as security for the Bonds, a valid security interest in the Tax Receipts. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated (2001 Repl.) Section 4-9-109(d)(14), the pledge, assignment and security interest in the Tax Receipts securing the Bonds is and shall be prior to any judicial lien hereafter imposed on the Tax Receipts to enforce a judgment against the City on a simple contract, and it is not necessary to file a Uniform Commercial Code financing statement in order to perfect a security interest in the Tax Receipts. 6. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum 4821-9176-8864.1 KUTAK ROCK LLP Approving Opinion November 19, 2014 Page 3 tax imposed on individuals and corporations; it should be noted, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. The opinions set forth in the preceding sentence are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied prior to or subsequent to the issuance of the Bonds in order that the interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 7. The interest on the Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. 8. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended, in connection with the offer and sale of the Bonds. It is to be understood that the rights of the registered owners of the Bonds and the enforceability of the Bonds, the Authorizing Ordinance and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Very truly yours, 4821-9176-8864.1 NORTHWEST ARKANSAS OFFICE SUITE 400 234 EAST MILLSAP ROAD FAYETTEVILLE. ARKANSAS 72703-4099 479-973-4200 GORDON M. WILBOURN gordon.wilbourn@kutakrock.com (501 ) 975-3101 City of Fayetteville, Arkansas Fayetteville, Arkansas KUTAK ROCK LLP ATLANTA CHICAGO SUITE 2000 DENVER 124 WEST CAPITOL AVENUE FAYETTEVILLE IRVINE LITTLE ROCK, AR 72201-3706 KANSAS CITY LITTLE ROCK 501-975-3000 LOS ANGELES FACSIMILE 501-975-3001 MINNEAPOLIS OKLAHOMA CITY www.kutakrack.com OMAHA PHILADELPHIA RICHMOND SCOTTSDALE WASHINGTON WICHITA November 19, 2014 Simmons First Trust Company, N.A., as trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 Ladies and Gentlemen: This opinion supplements our bond approving opinion, dated the date hereof, relating to the above -captioned bonds (the "Bonds"). Except as otherwise defined herein, the terms used herein shall have the meanings prescribed for them in said opinion. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion.. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. In addition to the documents specifically mentioned in the approving opinion, in connection with this opinion we have also examined: (a) An executed counterpart of the Bond Purchase Agreement dated October 28, 2014 (the "Bond Purchase Agreement'), by and between the City and Stephens Inc., as underwriter (the "Underwriter"); 4833-6637-0592.1 KUTAK ROCK LLP Supplemental Opinion November 19, 2014 Page 2 (b) An executed counterpart of the Escrow Deposit Agreement dated November 19, 2014 (the "Escrow Agreement'), by and between the City and the BOKF, NA, as escrow trustee (the "Escrow Trustee"); (c) An executed counterpart of the Continuing Disclosure Agreement dated November 19, 2014 (the "Disclosure Agreement'), by and between the City and Simmons First Trust Company, N.A., as dissemination agent (the "Dissemination Agent'); (d) An executed counterpart of the Tax Regulatory Agreement dated November 19, 2014 (the "Tax Regulatory Agreement'), by and between the City and the Trustee; (e) An executed Debt Service Reserve Agreement dated November 19, 2014 (the "Reserve Agreement'), by and between the City and Build America Mutual Assurance Company ("BAM"); and (f) Portions of the Official Statement dated October 28, 2014, with respect to the Bonds (the "Official Statement'), captioned "INTRODUCTORY STATEMENT," "THE SERIES 2014 BONDS," "SECURITY FOR THE BONDS," "SOURCES AND USES OF FUNDS," "DEFINITIONS OF CERTAIN TERMS," "SUMMARY OF THE INDENTURE," "SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT," "TAX MATTERS," and "APPENDIX A — Form of Opinion of Bond Counsel' (the "Relevant Captions") insofar as they relate to this opinion. Based on our examination, we are of the opinion, as of the date hereof and under existing law, as follows: 1. The Bond Purchase Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Underwriter, the Bond Purchase Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 2. The Escrow Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Escrow Trustee, the Escrow Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 3. The Disclosure Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Trustee, the Disclosure Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 4833-6637-0592.1 KUTAK ROCK LLP Supplemental Opinion November 19, 2014 Page 3 4. The Tax Regulatory Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Trustee, the Tax Regulatory Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 5. The Reserve Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by BAM, the Reserve Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 6. The statements contained in the Official Statement under the Relevant Captions, insofar as such statements purport to summarize certain provisions of the Bonds, the Indenture and the Continuing Disclosure Agreement, or conclusions of law and legal opinions, are true, accurate and correct summaries thereof in all material respects and do not omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The enforceability of the respective obligations of the parties to the documents and other items described above, and the availability of certain rights and remedies provided for therein, may be limited by bankruptcy, receivership, insolvency, reorganization, moratorium, marshalling or other similar statutes or rules of law affecting creditors' rights and remedies, to general principles of equity and to the discretion of any court in granting any relief or issuing any order, whether the proceeding is considered a proceeding at law or equity. In particular, the right to indemnification under any of the documents or other items described above may be limited by federal or state securities laws or by the public policy underlying such laws. This opinion is being rendered to you solely for your use and benefit and may not be relied upon in any manner, nor used, by any other person. Very truly yours, 4833-6637-0592.1 NORTHWEST ARKANSAS OFFICE SUITE 400 234 EAST MILLSAP ROAD FAYETTEVILLE. ARKANSAS 72703-4099 479-973-4200 City of Fayetteville, Arkansas Fayetteville, Arkansas BOKF, NA, as Trustee Tulsa, Oklahoma Stephens Inc. Fayetteville, Arkansas Ambac Assurance Corporation New York, New York KUTAK ROCK LLP ATLANTA CHICAGO SUITE 2000 DENVER 124 WEST CAPITOL AVENUE PAYETTEVD.LE IRVINE LITTLE ROCK, AR 72201-3706 KANSAS CITY LITTLE ROCK 501-975-3000 LOS ANGELES FACSIMILE 501-975-3001 MINNEAPOLIS OKLAHOMA CITY www.kutakrock.com OMAHA PHILADELPHIA RICHMOND SCOTTSDALE November 19, 2014 WASHINGTON WICHITA $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 Ladies and Gentlemen: We have acted as Bond Counsel in connection with the issuance by the City of Fayetteville, Arkansas (the "City") of its $10,980,000 aggregate principal amount of Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Series 2014 Bonds"), and have delivered on this date our approving opinion with respect thereto. All capitalized terms not otherwise defined herein shall have the meanings assigned thereto in such approving opinion. A portion of the proceeds of the Series 2014 Bonds will be deposited with BOKF, NA, Tulsa, Oklahoma, as escrow trustee (the "Escrow Trustee"), under an Escrow Deposit Agreement dated November 19, 2014 (the "Escrow Agreement"), between the City and the Escrow Trustee, for the purpose of defeasing the City's previously issued $6,335,000 aggregate original principal amount of Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"). The Series 2003 Bonds were issued by the City pursuant to a Trust Indenture dated as of July 1, 2003 (the "2003 Indenture"), between the City and Bank of Oklahoma, N.A. (predecessor to BOKF, NA), Tulsa, Oklahoma, as trustee. This opinion is being delivered in connection with the defeasance of the Series 2003 Bonds pursuant to Section 701 of the 2003 Indenture. 4834-0169-8848.1 KUTAK ROCK LLP Defeasance Opinion November 19, 2014 Page 2 In connection with this opinion, we have examined (i) the Escrow Agreement, (ii) the 2003 Indenture, and (iii) the approving opinion of Kutak Rock LLP dated July 10, 2003 (the "2003 Bond Counsel Opinion"). For purposes of this opinion, we have also reviewed originals, certified or otherwise identified to our satisfaction, of (a) a certificate of the Escrow Trustee with respect to receipt of proceeds of the Series 2014 Bonds and the receipt of moneys transferred from the bond fund for the Series 2003 Bonds, all of which moneys were deposited with the Escrow Trustee pursuant to the terms of the Escrow Agreement, and (b) such other documents, opinions, certificates and other items as we have deemed relevant and necessary in rendering this opinion. It is our opinion, under existing law, that: 1. The issuance of the Series 2014 Bonds and the deposit of a portion of the proceeds thereof with the Escrow Trustee pursuant to the Escrow Agreement to defease the Series 2003 Bonds will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Series 2003 Bonds or the Series 2014 Bonds and will not cause the Series 2003 Bonds or the Series 2014 Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended. For the purposes of this opinion, we have assumed the correctness of the 2003 Bond Counsel Opinion and the continuing exclusion from gross income for federal income tax purposes of the interest on the Series 2003 Bonds. 2. The requirements of Section 702 of the 2003 Indenture as to the discharge of the lien thereof on the Tax Receipts have been satisfied, and the lien of the 2003 Indenture against the Tax Receipts has been discharged. Very truly yours, I4Kkku-(' 4834-0169-8848.1 Build America Mutual Assurance Company New York, New York $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 Ladies and Gentlemen: We have acted as bond counsel and delivered as of the date hereof an approving opinion of Bond Counsel with respect to the above captioned bonds (the "Opinion"), dated the date of this letter. Per your request, this letter will confirm that you are entitled to rely on the Opinion as though it was specifically addressed to you. Very truly yours, KaVLRdLL0 4818-0556-5728.1 KUTAK ROCK LLP ATLANTA CHICAGO SUITE 2000 DENVER FAVETTEVILLE 124 WEST CAPITOL AVENUE IRVINE NORTHWEST ARKANSAS OFFICE LITTLE ROCK, AR 72201-3706 KANSAS CITY LITTLE ROCK SUITE 400 501-975-3000 LOS ANGELES 234 EAST MILLSAP ROAD FACSIMILE 501-975-3001 MINNEAPOLIS FAYETTEVILLE. ARKANSAS 72703-4099 OKLAHOMA CITY 47e-913-4200 www.kutakrock.com OMAHA PHILADELPHIA RICHMOND SCOTTSDALE November 19 2014 WASHINGTON WICHITA Build America Mutual Assurance Company New York, New York $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 Ladies and Gentlemen: We have acted as bond counsel and delivered as of the date hereof an approving opinion of Bond Counsel with respect to the above captioned bonds (the "Opinion"), dated the date of this letter. Per your request, this letter will confirm that you are entitled to rely on the Opinion as though it was specifically addressed to you. Very truly yours, KaVLRdLL0 4818-0556-5728.1 BIake E. Pennington Assistant City Attorney Patti T. Mulford Paralegal Phone 479.575.8313 cityattorneyCa)fayetteville-ar.gov KIT WILLIAMS FAYETTEVILLE CITY ATTORNEY November 19, 2014 Simmons First Trust Company, N.A., as trustee 501 Main Street Pine Bluff, AR 71601 Stephens Inc. 111 Center Street Little Rock, AR 72201 Build America Assurance Company 1 World Financial Center, 27th Floor 200 Liberty Street New York, NY 10281 Kutak Rock LLP 124 West Capitol Avenue Suite 2000 Little Rock, AR 72201 Re: $10,980,000 City of Fayetteville, Arkansas Restaurant Gross Receipts Tax and Tourism Improvement and Refunding Bonds, Series 2014 Ladies and Gentlemen: 113 W Mountain Street, Suite 302 Fayetteville, AR 72701-6083 Hotel, Motel and Revenue Capital I am the City Attorney for the City of Fayetteville, Arkansas and have acted in that capacity in connection with the issuance and sale by the City of its $10,980,000 Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Bonds"), which Bonds are being sold pursuant to the terms of a Bond Purchase Agreement dated October 28, 2014, by and between Stephens Inc. and the City. The terms defined in the Bond Purchase Agreement are used in this opinion with the meanings assigned to them in the Bond Purchase Agreement. In this connection, I have reviewed certain documents with respect to the Bonds, and have examined such records, certificates and other documents as I have considered necessary or appropriate for the purposes of this opinion, including (i) Ordinance No. 2310 adopted by the City Council on March 1, 1977, and subsequent amending ordinances thereto (as amended, the "Levying Ordinance"), (ii) Ordinance No. 5605 adopted by the City Council on August 6, 2013 (the "Election Ordinance'), (iii) Ordinance No. 5713 adopted by the City Council on September 16, 2014 (the "Authorizing Ordinance"), (iv) the Trust Indenture dated as of November 1, 2014 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., as trustee (the "Trustee"), (v) the Tax Regulatory Agreement dated November 19, 2014, by and between the City and the Trustee, (vi) the Continuing Disclosure Agreement dated November 19, 2014 (the "Disclosure Agreement"), by and between the City and Simmons First Trust Company, N.A., as dissemination agent (the "Dissemination Agent"), (vii) the Escrow Deposit Agreement dated November 19, 2014 (the "Escrow Agreement"), by and between the City and BOKF, NA, as escrow trustee (the "Escrow Trustee"), (viii) the Debt Service Reserve Agreement dated November 19, 2014 (the "Reserve Agreement"), by and between the City and Build America Mutual Assurance Company ("BAM"), (ix) the Preliminary Official Statement dated October 20, 2014, and (ix) the Official Statement dated October 28, 2014, relating to the offering of the Bonds, and closing certificates of the City. Based on such review and such other considerations of law and fact as I believe to be relevant, I am of the opinion that: 1. The City is a duly organized and validly existing municipal corporation and City of the First Class, organized under the laws of the State of Arkansas, with full power and authority to adopt the Levying Ordinance, the Election Ordinance and the Authorizing Ordinance, to levy the Tax, to pledge the Tax Receipts, and to execute and deliver the Bonds, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement, the Tax Regulatory Agreement, the Reserve Agreement and the Bond Purchase Agreement. 2. The City has duly approved the Preliminary Official Statement and the Official Statement. 3. The Levying Ordinance, the Election Ordinance and the Authorizing Ordinance have been duly adopted by the City by all action necessary under the Act and the laws and Constitution of the State of Arkansas, and each remains in full force and effect. 4. The Indenture, the Escrow Agreement, the Continuing Disclosure Agreement, the Tax Regulatory Agreement, the Reserve Agreement and the Bond Purchase Agreement have been duly authorized, approved, executed and delivered by the City and, subject to the extent that the enforceability of the rights and remedies set forth therein may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally, constitute valid and binding agreements of the City enforceable in accordance with their terms. 5. The information in the Official Statement under the captions "THE PROJECTS," "THE REFUNDING PROGRAM," "THE CITY," "THE COMMISSION" and "LEGAL MATTERS" (apart from financial or statistical data contained or incorporated therein, as to which no view is expressed) is fair, accurate and complete and does not omit any matter which, in my opinion, for the purposes for which the Official Statement is to be used, should be included or referred to therein. 6. There is no action, suit or proceeding at law or in equity before or by any court, public board or body, pending or threatened, against or affecting the City, challenging the validity of the transactions contemplated by the Official Statement or the validity of the Bonds, the Tax, the Levying Ordinance, the Election Ordiannce, the Authorizing Ordinance, the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement, the Tax Regulatory Agreement, the Reserve Agreement or the Bond Purchase Agreement and, to the best of such counsel's knowledge, there is no investigation, pending or threatened, and no threatened action, suit or proceeding involving any of the matters hereinabove mentioned in this paragraph 6. 7. The adoption of the Levying Ordinance, the Election Ordinance and the Authorizing Ordinance and the execution and delivery of the Indenture, the Escrow Agreement, the Continuing Disclosure Agreement, the Tax Regulatory Agreement, the Reserve Agreement and the Bond Purchase Agreement, and compliance with the provisions thereof, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or any existing law, regulation, court order or consent decree to which the City is subject. 8. Based upon the examinations which I have made as Fayetteville City Attorney, nothing has come to my attention which would lead me to believe that the Official Statement (except for financial and statistical data contained or incorporated in the Official Statement, as to which no view is expressed) contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. I hereby consent to the references made to me in the Official Statement. Sincerely, HIT WILLIAMS Fayetteville City Attorney 3 CERTIFICATE OF COMMISSION I, Ching Mong, Chairman of the City of Fayetteville, Arkansas Advertising and Promotion Commission (the "Commission"), do hereby certify: 1. That I officially signed the Consent and Agreement to the Trust Indenture dated as of November 1, 2014, by and between the City of Fayetteville, Arkansas and Simmons First Trust Company, N.A., as Trustee. 2. That I am now and was the duly chosen, qualified and acting Chairman of the Commission when all of the proceedings were had relating to the City of Fayetteville, Arkansas Hotel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvements and Refunding Bonds, Series 2014 (the "Bonds"), and when the Bonds were issued. 3. That Ching Mong, Bobby Ferrell, Matt Behrend, Matthew Perry, Tim Freeman, and Hannah Withers are now and were the duly chosen, qualified, and acting members of the Commission when all of the proceedings were had relating to the Bonds and when the Bonds were issued. 4. That appearing in the transcript of proceedings with respect to the issuance of the Bonds is a true, complete, and correct copy of a Resolution (the "Resolution") duly adopted by a majority of the Commission present at a duly called meeting held Z 11 1 2013. The Resolution is in full force and effect and has not been altered, amended,,dr repealed. 5. That no action, suit, proceeding, inquiry or investigation is pending or, to the knowledge of the undersigned, threatened, in any court or other tribunal of competent jurisdiction, State or Federal, or, to the knowledge of the undersigned, is there any basis therefore, in any way (i) restraining or enjoining the issuance, sale, or delivery of any of the Bonds, or (ii) questioning or affecting the validity or enforceability of the Bonds, the City's Hotel and Restaurant Gross Receipts Tax (the "Tax") or the Trust Indenture, or (iii) questioning or affecting the validity of the Resolution or any of the proceedings for the authorization, execution, authentication, sale or delivery of the Bonds or the assignment by the Commission of any of the moneys, instruments, or other rights pledged under the Trust Indenture, or (v) questioning or affecting the power and authority of the Commission to adopt the Resolution or approve the Trust Indenture. 6. That, pursuant to the Resolution, the Commission has agreed to the pledge of the Tax in the manner and as provided under the terms of the Ordinance No. 5713 of the City adopted on September 16, 2014 (the "Bonds Ordinance"), and in Trust Indenture and to perform its duties, as contemplated in the Bond Ordinance and Trust Indenture, in the collection and expenditure of the Tax. Dated: November,, 2014 4827-1500-8800.1 City of Fayetteville, Arkansas Advertising and Promotion Commission TRUSTEE'S CERTIFICATE Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee for $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Bonds"), hereby certifies that: 1. Pursuant to the provisions of a Trust Indenture dated as of November 1, 2014 (the "Trust Indenture"), by and between the City of Fayetteville, Arkansas (the "City") and Simmons First Trust Company, N.A., arrangements have been made for Simmons First Trust Company, N.A. to serve as trustee and paying agent (the "Trustee") with respect to the Bonds. The Trustee hereby accepts such appointment. 2. Pursuant to the provisions of the Trust Indenture and directions from the City, Glenda L. Dean, Vice President, has duly authenticated the initial Bonds in the aggregate principal amount of $10,980,000, being in the form of fourteen (14) typewritten registered bonds, numbered R14-1 through R14-14, inclusive. 3. Each person who, on behalf of the Trustee, authenticated the initial Bonds or executed the Trust Indenture, the Tax Regulatory Agreement dated as of November 19, 2014, or the Continuing Disclosure Agreement dated as of November 19, 2014, with respect to the Bonds was at the date thereof and is now duly elected, appointed or authorized, qualified and acting as an officer or authorized signatory of the Trustee and is duly authorized to perform such acts at the respective times of such acts, and the signatures of such persons appearing on such documents are their genuine signatures. 4. The following are names, titles and specimen signatures of each of the above- mentioned officers of the Trustee: Name Office Slawture Glenda L. Dean Vice President , Roy Ferrell Vice PresidentQ 5. The Trustee is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America. The Trustee has all requisite power and authority to carry out its obligations as Trustee under the Trust Indenture. IN WITNESS WHEREOF, SIMMONS FIRST TRUST COMPANY, N.A., has caused this certificate to be executed in its corporate name by an officer thereunto duly authorized. Dated: November 19, 2014 SIMMONS FIRST TRUST COMPANY, N.A. Pine Bluff, Arkansas By:�/a�� Nar Joe Clement Title: President 4819-3473-7440.1 ESCROW TRUSTEE'S CERTIFICATE BOKF, NA, Tulsa, Oklahoma, as escrow trustee for $650,000 aggregate outstanding principal amount of City of Fayetteville, Arkansas Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds'), hereby certifies that: 1. Pursuant to the provisions of an Escrow Deposit Agreement dated November 19, 2014 (the "Escrow Agreement"), by and between the City of Fayetteville, Arkansas (the "City") and BOKF, NA, as escrow trustee (the "Escrow Trustee"), arrangements have been made for the deposit of moneys with the Escrow Trustee sufficient in amount to refund the Series 2003 Bonds as provided in the Escrow Agreement. 2. Each person who, on behalf of the Escrow Trustee, executed the Escrow Agreement is now duly elected, appointed or authorized, qualified and acting as an officer or authorized signatory of the Escrow Trustee and was duly authorized to perform such acts at the respective times of such acts, and the signatures of such persons appearing on such document are their genuine signatures. 3. The following are names, titles and specimen signatures of each of the above- mentioned officers of the Escrow Trustee: Name Office Signature Cynthia Wilkinson Senior Vice President and Trust Officer Y/, 4. The Escrow Trustee is a national banking associate duly organized, validly existing and in good standing under the laws of the United States of America. The Escrow Trustee has all requisite power and authority to carry out its obligations as Escrow Trustee under the Escrow Agreement. IN WITNESS WHEREOF, BOKF, NA, has caused this certificate to be executed in its corporate name by an officer thereunto duly authorized. Dated: November 19, 2014. BOKF, NA Tulsa, Oklahoma (�By:- e: Jud oster Title: Vice President 4844-4869-8400.1 UNDERWRITER'S CERTIFICATE The undersigned officer of Stephens Inc., the Underwriter (defined below) for the $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Series 2014 Bonds"), hereby makes the certifications set forth below in connection with the execution and delivery of the Series 2014 Bonds. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Tax Regulatory Agreement to which this certificate is attached as an exhibit. (1) Stephens Inc. has served as underwriter (the "Underwriter") and has been involved in the structuring and marketing of the Series 2014 Bonds, including particularly, the establishment of the issue size, the computation of Yield and weighted average maturity, and other factors relating to compliance with Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated thereunder. (2) Based upon our records and other information available to us which we have no reason to believe is not correct: (a) All of the Series 2014 Bonds have been the subject of a bona fide initial offering to the public (excluding of bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at the public offering prices or yields indicated on the inside cover of the Issuer's Official Statement dated October 28, 2014 (the "Official Statement"); (b) At the time the Underwriter agreed to purchase the Series 2014 Bonds, based upon the prevailing market conditions, the Underwriter had no reason to believe that any of the Series 2014 Bonds would be initially sold to the public (excluding of bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at greater prices, or yields less, than those indicated on the inside cover of the Official Statement; and (c) As of the date of the Bond Purchase Agreement entered into by and between the Issuer and the Underwriter with respect to the Series 2014 Bonds, the first prices at which the Underwriter reasonably expected to sell 10% of each maturity of the Series 2014 Bonds to the public (excluding of bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) were the respective prices shown on the cover of the Official Statement, or in the case of obligations sold on a yield basis, at the respective yields shown on the cover of the Official Statement. (3) The Yield on the Series 2014 Bonds is 3.2553654%. For purposes of calculating the Yield on the Series 2014 Bonds, the Series 2014 Bonds sold at substantial premiums have been treated as called on their earliest call date resulting in the lowest Yield. 4822-0114-6144.1 (4) The establishment of the Debt Service Reserve Fund is reasonably required to obtain the issuance of the Series 2014 Bonds at an economic interest rate for the Issuer, and is, in the judgment of the undersigned, established at a funding level comparable to that found for obligations similar to the Series 2014 Bonds issued within the past year. (5) To the best knowledge of the undersigned, the representations of the Issuer contained in the Tax Regulatory Agreement are true and correct. The undersigned understands that this certificate shall form a part of the basis for the opinion, dated the date hereof, of Kutak Rock LLP, to the effect that interest with respect to the Series 2014 is excluded from the gross income of the recipient thereof for purposes of federal income taxation under existing laws, regulations, rulings and judicial decisions. IN WITNESS WHEREOF, the undersigned has set his hand as of the date set forth below. Dated: November 19, 2014 STEPHENS INC. By:IA-%4— Title: 5 R I r, , 'v.. V l « ley<> 4822-0114-6144.1 TRUSTEE'S RECEIPT AND CERTIFICATE AS TO APPLICATION OF FUNDS The undersigned, Simmons First Trust Company, N.A., as trustee (the "Trustee") under a Trust Indenture dated as of November 1, 2014 (the "Indenture"), by and between the City of Fayetteville, Arkansas (the "City") and the Trustee, with respect to the City's $10,980,000 Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Bonds"), hereby certifies that: 1. The Trustee has received this date on behalf of the City, from Stephens Inc. (the "Purchaser"), $11,525,530.68, that being the agreed purchase price of the Bonds pursuant to the Bond Purchase Agreement dated October 28, 2014, between the City and the Purchaser, plus accrued interest of $20,270.63, and less $27,730.55 paid by the Purchaser to Build America Mutual Assurance Company on behalf of the City for the Policy and the Reserve Policy (each as defined in the Indenture). 2. The proceeds of the sale of the Bonds have been deposited or will be applied by the Trustee, in accordance with the written directions of the City, as follows: (a) $20,270.63, representing the accrued interest on the Bonds, has been deposited in the Interest Account of the Bond Fund created by the Indenture; (b) $599,100.06 has been transferred to the Escrow Fund established under an Escrow Deposit Agreement dated November 19, 2014 (the "Escrow Agreement"), by and between the City and Bank of Oklahoma, N.A., as escrow trustee (the "Escrow Trustee"), to be held and invested as provided in the Escrow Agreement for the purpose of redeeming the City's Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003; (c) $82,500.00 has been deposited into the Cost of Issuance Fund to pay costs of issuance of the Bonds, including specifically those costs of issuance set forth in Exhibit G to the City's Closing Certificate; (d) $7,181,004.09 has been deposited in the Walton Arts Center Account of the Projects Fund created by the Indenture; and (e) The remaining balance (viz., the sum of $3,642,655.90) has been deposited in the Park Account of the Projects Fund created by the Indenture. Dated: November 19, 2014 SIMMONS FIRST TRUST COMPANY, N.A., as Trustee BY2:�G2�:t?�( Title: 'Vice president & Corporate trust Officer 4810-9600-7712.2 ESCROW TRUSTEE'S RECEIPT The undersigned, BOKF, NA, as escrow trustee (the "Escrow Trustee") under the provisions of an Escrow Deposit Agreement dated November 19, 2014 (the "Escrow Agreement"), by and between the City of Fayetteville, Arkansas (the "City") and the undersigned, hereby certifies that: The Escrow Trustee has received this date for deposit in the Escrow Fund established under the Escrow Agreement, the following sums: (1) $599,100.06 of proceeds of the City's Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Series 2014 Bonds"); and (2) $56,091.82 from the Bond Fund established for the City's Hotel and Restaurant Gross Receipts Tax Refunding Bonds, Series 2003 (the "Series 2003 Bonds"). Dated: November 19, 2014 BOKF, NA, as Escrow Trustee By: Title: Se or Vice President and Trust Officer 4829-725"000.1 UNDERWRITER'S RECEIPT The undersigned, on behalf of Stephens Inc., as purchaser (the "Purchaser") of $10,980,000 City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Revenue Bonds, Series 2014 (the "Bonds"), hereby acknowledges receipt of each and all of the Bonds, said Bonds being in the form of fourteen (14) typewritten fully registered bonds in the name of Cede & Co., as nominee of The Depository Trust Company, in the authorized denomination, bearing interest and containing such other terms and provisions as set forth in that certain Trust Indenture dated as of November 1, 2014, by and between the City of Fayetteville, Arkansas (the "City") and Simmons First Trust Company, N.A., as trustee (the "Trustee"). The Bonds have been checked, inspected and approved by the Purchaser. The Purchaser further acknowledges the receipt of, or waives the requirement for, each opinion, document and certificate contemplated by the Bond Purchase Agreement dated October 28, 2014, between the City and the Purchaser, and acknowledges that each such opinion, document and certificate, to the extent received, is satisfactory to the Purchaser as to form and substance. Dated: November 19, 2014 STEPHENS INC. BY: �� Title: r cr I' 4843-1546-3712.1 i DTC UNDERWRITING Blanket Issuer Letter of Representations [to be Comple;Qd by Issuer] City of Fayetteville, AR [Nero. of Isom] November 12 1998 nxe Attention: Underwriting Department — Eligibility 55 The Deposibory Water 50th Floust or y New YorXNY 10041-0099 jsf_ .. .,. This Letter sets forth our understanding with respect to all issues (the "Securities) that Issuer shall request be made eligible for deposit.by The Depository Trust Company (-RTC"). To induce DTC to accept the Securities as elfgibte for deposit at DTC, and to act m accordance with DTCs Rules with respect to the Securities, Issuer represents to DTC that Issuer will comply with the requirements stated m DTCs Operational Arreogemeats, as they may be armended from time to time. Nott Sebb"t A oouhrns itatemeata that DTC bali&.w &==a tdy dacr$e DTC, the method of book- eatytamafen cfaeoi ddw asdbm &roe , >nd carnia relaeed mmmm THE DEPOSUORYTTRUST COMPANY Very tnrlyyours, �Gmwgne - - IaUMV0`i: Crype-fAe rine eTsm 113 W MountaiSt (saeat�J Fayetteville, AR 72701 (qty) knee) ILT) 501-575-8330 SANIPI.E OFFERING DOMMNT I.AIVGUAGE DESCRIBING BOOK -ENTRY -ON -a ISSUANCE (Prepared by DTC—bracketed material may be applicable only to certain issues) I. The Depository Tnis•. Company ('DTC"). New York, NX will act as securities depository for the securities (the 'Securities-). The Securities will be Weed as fully segismred securities registered it the name of Cede & Co. (DTC's partnership nominee). One fulh reoste ed Security certificate win be issued for [each issue off the Securities, [east:] in the aggregate principal amount of such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of [any] issue exceeds 9200 minion, one eerttficate will be issued with respect to each 9200 million of principal amount and an additi nal certificate will be issued with Testiest to any remaining principal amount of such issue.] 2. DTC is a limited-papose trust company otgmized under the New York Banlcag Law. a "buiiong organization' within the meaning of the New York Banking Law, a member of the Federal Reserve System, it -clearing corpo� within the meninna of the New York Uniform Commercial Code, and a 'cleating agency' registered pursuant to the provisions of Section 17A of the Securities Exch a Act of 1934. DTC holds securities that its partldpants ('Participants") deposit with L7I'C. DTC also &&hz rs the settlement among Paridpaats of xauribes transactions, such as transfers and pledges, in deposited seemilties through eleetrctme computerized book -entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities oertificates. Direct Participants include aecurities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a numbs of Its Direct Participants and by the New York Stock Exchange. lx the American Stock Excbanga. Inc., and the National Association of Securities Dealers, Inc. Accor to the DTC system is also available to others such m securities brobess and dealers, banks, and trust antopesea that clear through or maim a custodial relawndup with a Dir«s Partiopant, ether directly or indirec* ('1r direct Partidpe»is'). The Rules applicable to IYPC and its Participants are on like with the Semtfties and Exchange Cornmission. 3. Purchases of Securities under the DTC system must be made by or through Dirax Partcpants, which will reserve a swift for the S=orties on DTC's remrds. The ownership iairrest of each actual gachaser of exch Security ('Beneficial Owner") is in turn to be retarded on the Dirac and Indirect Participants' retards. Beneficial Owners will not receive written osn9rmation from DTC of their purchase, but Bene&W Owner are eipected to receive written confirmations pruviding detail of the transaction, as well as periodic smtemems of their bddings, from the Direct or Indirect Par&ipart through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be acrosnplished by eatnes made an the boola of Participants acting on beh*U of Beneficial Owners. Beneficial OwnerS wM not reeve certificates representing 6= awnesslsip interests in Secritles, except in the event that use of the book -entry system for the Securtues is discantimred. 4. To facilitate arbsequent inztsnas, all Securities dapoated by rusbapants with DTC are registered in the frame cf DTL.'s partnership nominee, Cede & Co. The deposit of Sacurid% with DTC and thea registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no karowdedge of the antral Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accosmts such Securities are credited, which may or may not be the Beneficial Owners. The Participants will ren= responsible for keg account of their holdings on behalf of their arstomem :i-1': : — _::K r:.:Y DTC UNDERWRITI" I, t S. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficsl Owmers will be governed by arrangements among them, subiect to any statutory or ree laicry requirements as may be in effect from time to time. 18. Aedemptioa notices sbaA be sent to Cede & Co. 1f less than all of the Securities whin an rime are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in snub issue to be hedeerned.] 7. Neither DTC nor Cede &t Co. will consent or vote with resvect to Securities. Tinder its usual procedures, DTC mails an Omnibus Prmry to the Issuer as soon as possible after the record date. The Omndbw P=y assigns Cede &c Co.'s coasentmg or voting rights to those Direct Participants to whose aarnrnts the Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Principal and interest payments on the Secraities win be trade to DTC. DTC's practice is to credit Direct Partie;pacts' accounts on payable date in actuate with their restective holdings shown on DTC's records unless DTC bas reason to believe that it will not reeve payment on payable date. Paymaas by Participants to Beneficial Owners will be governed by standing instrtactions and customary practioes, as is the cast with securities beld for the ==mts of customers in bearer form or meted in 'street name,' and will be the responsibility of such Psrtidpant and not of DTC, the Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of prbcipal and interest to DTC is the respcarsihility of the Issuer or the Agect, disbursement of such payments to Direct Partiapams shall be the resporrA&ty of DTC. and disbursement of hush payments to the Beuef cisl Owners shall be the respoavflvlityof Direct 2nd Indirect Paftkfpaats. 19. A BezeEdal Owner sba]l give notice to elect to have its Swuities pushased or tendered, 8uougb its Participant, to the [TendevTzmarketaig1 Agent, and shat effect delivery of such Secarihes by earthing the Direct Pmticip mt to transfer the Participant's interest in the Securities, on DTCs retards, to the ['I'endevaenwicetmg] Agent: The requirement for physical delivery of Securities m convection with a demand for purchase or a mandatcry pardam will be deemed sabAed when the axnersbip rights in the Securities are transferred by Direct Perticfpemb on DTC's records.] 10. DTC may discouSnne providing its hawk= as saccuities depository with rwppec3 to the Securities at any tare by giving reasonable notice to the Issuer or the Agent. Under such c rcumstan.y s, in the event that a succevsar securities depository is not obtained, Security certificates are required to be printed and de hvred- 11. The isaer may dedde to discontinue use of the system of book -entry transfers ehrough DTC (or a successor securities depository). In that event Security certificates will be printed and delivered. Li. The information m this sectiou concerning DTC and DTC's book -entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the atcruuythered. � i L" 1 1' 1 1• McGRAW HILL FINANCIAL October 8, 2014 City of Fayetteville 113 W. Mountain Fayetteville, AR 72701 Attention: Mr. Paul Becker, Finance & Internal Services Director 500 North Akard Street Lincoln Plaza, Suite 3200 Dallas, TX 75201 tel(214)871-1400 reference no.: 1363124 Re: US$10,995,000 City of Fayetteville, Arkansas, Hotel, Motel, & Restaurant Cross Receipts Tax & Tourism Revenue Capital Improvement & Refunding Bonds, Series 2014, dated: November 1, 2014, due: November 1, 2024 Dear Mr. Becker: Pursuant to your request for a Standard & Poor's Ratings Services ("Ratings Services") rating on the above -referenced obligations, Ratings Services has assigned a rating of "A+". Standard & Poor's views the outlook for this rating as stable. A copy of the rationale supporting the rating is enclosed. This letter constitutes Ratings Services' permission for you to disseminate the above -assigned ratings to interested parties in accordance with applicable laws and regulations. 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No person is intended as a third party beneficiary of any credit rating engagement or of a credit rating when issued. PF Ratings U.S. (02/16/13) STANDARD&DOOR`S RATINGS SERVICES WGRAW HILL FINANCIAL , Summary: Fayetteville, Arkansas; Miscellaneous Tax Primary Credit Analyst: Omar M Tabani, Dallas (1) 214-871-1472; omactabani@standardandpoors.com Secondary Contact: Jennifer K Garza (Mann), Dallas (1) 214-871-1422;jennifer.garza@standardandpoors.com Table Of Contents ............................................................................................................. Rationale Outlook Related Criteria And Research WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 10, 2014 1 1363795 1302367398 Summary: Fayetteville, Arkansas; Miscellaneous Tax Credit Profile US$10.995 mil Hotel; Motel, & Restaurant Gross Receipts Tax & Tourism Rev ser 2014 dtd 11/01/2014 due 11/01/2024 Long Term Rating A+/Stable New Rationale Standard & Poor's Ratings Services assigned its 'A+' rating to Fayetteville, Ark.'s series 2014 hotel, motel, and restaurant gross receipts tax and tourism bonds. The outlook is stable. The bonds were approved the city's electorate at a November 2013 election. Security for the bonds is provided by a 1% tax levied by the city on gross receipts from motel and hotel stays, in addition to gross receipts from restaurants and other establishments that sell prepared food. Bond proceeds will be used primarily to fund costs associated with the renovation and expansion of the Walton Arts Center, a regional park facility, and the refunding of the city's outstanding series 2003, which were previously secured by the aforementioned 1% tax. Liquidity for debt service is provided by a debt service reserve fund. The rating reflects our opinion of: • The city's participation in the Fayetteville -Springdale -Rogers Metropolitan Statistical Area (MSA) with The University of Arkansas serving as a stabilizing economic presence; • Growing pledged revenues, with fiscal 2013 revenue providing 3.82x coverage of the projected maximum annual debt service (MADS) payment; • 1.40x MADS additional bonds test, which also requires that voter approval be sought in order to issue additional parity debt; and • The inherent volatility associated with hospitality and lodging -related taxes during an economic downturn. Fayetteville, with an estimated population of 79,000, is the largest of four anchor cities in the Northwest Arkansas MSA, which contains a total population that is estimated to be approaching 500,000. The local economic base has experienced healthy commercial and residential growth over the past decade, with the city and MSA's population increasing by 27% and 49%, respectively, between the 2000 and 2010 U.S. census. City officials estimate that the population could grow by roughly 2.5% to 3% annually over the next few years. The University of Arkansas is located in Fayetteville and serves as the stabilizing economic presence. Enrollment at the university exceeds 26,000 students, and it employs over 4,300. In addition, Wal-Mart, Tyson Foods, and J.B. Hunt Transport Services are headquartered in the MSA. Reinforcing the local economy's depth and diversity, per capita retail sales in Fayetteville equate to 138% of the national level. Per capita income levels are adequate but below average at 82% of the national level; this is likely due to the city's large student population. The MSA's unemployment rate was 5.3% as of July 2014. City officials estimate that Fayetteville collects roughly 90% of pledged revenue for debt service from food establishments and 10% from hotels and motels. Pledged revenue has demonstrated resilience despite the national WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 10, 2014 2 1343795 1302307398 Summary: Fayetteville, Arkansas; Miscellaneous Tax economic downturn. Including minor declines in fiscal 2007, 2009, and 2013, revenues have increased by an aggregate 69% over the past decade to $2.62 million in fiscal 2013, which provided 3.82x pro forma MADS coverage on the series 2014 bonds scheduled to occur in 2021. Debt service payments on the series 2014 bonds are relatively level, ranging between $674,000and $687,000 annually through final maturity in 2039. Going forward, officials are projecting 3.5% to 5% annual pledged revenue growth over the next few years. Much of the hotel, motel, and food sales within the city are driven by The University of Arkansas. The university continues to expand, with current projections indicating that enrollment could grow by roughly 1,000 to 1,500 students annually over the next few years. After this issuance, the 1% gross receipts tax will secure only the series 2014 bonds. Liquidity for debt service will be provided by a debt service reserve that will be funded at the lesser of: 10% of the bonds' outstanding principal amount, MADS, or 1.25x average annual debt service on all outstanding parity debt. The city may elect to satisfy the reserve requirement with a surety. Bond provisions prohibit the issuance of additional parity debt unless pledged revenue from the previous year provides at least 1.40x MADS coverage on existing and proposed bonds. In addition, voters would have to approve any additional new money debt that would be secured by the 1% tax. The city collects the 1% tax and remits it to the trustee monthly for debt service. Any excess revenue not necessary for debt service is used for marketing and advertising costs for the city's advertising and promotion commission. Outlook The stable outlook reflects Standard & Poor's opinion that Fayetteville's deep and diverse economy will likely allow for relative stability or growth of the pledged revenue stream, which is reinforced by the presence of the University of Arkansas. The outlook also reflects our expectation that management will likely maintain debt service coverage due to its limited plans to issue additional parity debt. While we do not expect it to occur within the two-year outlook period, we could lower the rating if Fayetteville were to experience a dilution of DSC through either pledged revenue deterioration or additional bonding. While there are no plans to issue additional debt, we do not anticipate raising the rating given the legal ability to dilute coverage to 1.40x MADS, contingent upon voter approval. Related Criteria And Research Related Criteria USPF Criteria: Special Tax Bonds, June 13, 2007 Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 10, 2014 3 1363795 1302307398 Copyright © 2019 Standard & Poor's Financial Services LLC, a part of McGraw Hill Financial. All rights reserved. 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W W W.STANDARDANDPOORS.COM/RATINGSDIRECT OCTOBER 30, 2014 4 1353755 1302307398 STANDARD & POOR`S RATINGS SERVICES McGRAW HILL FINANCIAL October 28, 2014 Build America Mutual Assurance Company World Financial Center- 27th FL. 200 Liberty Street New York, NY 10281 Attention: Ms. Laura Levenstein, Chief Risk Officer 55 Water Street, 38th Floor New York, NY 10041.0003 to[ 212 438.2074 reference no.: 40438370 Re: $10,980,000 City of Fayetteville, Arkansas, Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014, dated: November 1, 2014, due: November 1, 2015-2025, 2029, 2034, 2039, (POLICY #2014B0584) Dear Ms. Levenstein: Standard & Poor's Ratings Services ("Ratings Services") has reviewed the rating on the above - referenced obligations. After such review, we have changed the rating from "A+" to "AA" on the above obligations. The rating on the above obligations is based on the policy provided by your company. We may adjust the underlying rating and the capital charge as a result of changes in the financial position of the issuer or performance of the collateral, or of amendments to the documents governing the issue, as applicable. With respect to the latter, please notify us of any changes or amendments over the term of the debt. The credit ratings and other views of Ratings Services are statements of opinion and not statements of fact. Credit ratings and other views of Ratings Services are not recommendations to purchase, hold, or sell any securities and do not comment on market price, marketability, investor preference or suitability of any security. While Ratings Services bases its credit ratings and other views on information provided by issuers and their agents and advisors, and other information from sources it believes to be reliable, Ratings Services does not perform an audit, and undertakes no duty of due diligence or independent verification, of any information it receives. 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PF Ratings U.S. (02/16/13) BAM ISSUER: City of Fayetteville, Arkansas MEMBER: City of Fayetteville, Arkansas MUNICIPAL BOND INSURANCE POLICY BONDS: $10,980,000 in aggregate principal amount of Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 Policy No: 2014BO584 Effective Date: November 19, 2014 Risk Premium: $8,061.29 Member Surplus Contribution: $8,061.30 Total Insurance Payment: $16,122.59 BUILD AMERICA MUTUAL ASSURANCE COMPANY ("BAM"), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee") or paying agent (the "Paying Agent") for the Bonds named above (as set forth in the documentation providing for the issuance and securing of the Bonds), for the benefit of the Owners or, at the election of BAM, directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer. On the later of the day on which such principal and interest becomes Due for Payment or the first Business Day following the Business Day on which BAM shall have received Notice of Nonpayment, BAM will disburse (but without duplication in the case of duplicate claims for the same Nonpayment) to or for the benefit of each Owner of the Bonds, the face amount of principal of and interest on the Bonds that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by BAM, in a form reasonably satisfactory to it, of (a) evidence of the Owner's right to receive payment of such principal or interest then Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the Owner's rights with respect to payment of such principal or interest that is Due for Payment shall thereupon vest in BAM. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by BAM is incomplete, it shall be deemed not to have been received by BAM for purposes of the preceding sentence, and BAM shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, any of whom may submit an amended Notice of Nonpayment. Upon disbursement under this Policy in respect of a Bond and to the extent of such payment, BAM shall become the owner of such Bond, any appurtenant coupon to such Bond and right to receipt of payment of principal of or interest on such Bond and shall be fully subrogated to the rights of the Owner, including the Owner's right to receive payments under such Bond. Payment by BAM either to the Trustee or Paying Agent for the benefit of the Owners, or directly to the Owners, on account of any Nonpayment shall discharge the obligation of BAM under this Policy with respect to said Nonpayment. Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's Fiscal Agent (as defined herein) are authorized or required by law or executive order to remain closed. "Due for Payment" means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity (unless BAM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration) and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment made to an Owner by or on behalf of the Issuer of principal or interest that is Due for Payment, which payment has been recovered from such Owner pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction. "Notice" means delivery to BAM of a notice of claim and certificate, by certified mail, email or telecopy as set forth on the attached Schedule or other acceptable electronic delivery, in a form satisfactory to BAM, from and signed by an Owner, the Trustee or the Paying Agent, which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount, (d) payment instructions and (e) the date such claimed amount becomes or became Due for Payment. "Owner" means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that "Owner" shall not include the Issuer, the Member or any other person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds. BAM may appoint a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this Policy by giving written notice to the Trustee, the Paying Agent, the Member and the Issuer specifying the name and notice address of the Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trustee, the Paying Agent, the Member or the Issuer (a) copies of all notices required to be delivered to BAM pursuant to this Policy shall be simultaneously delivered to the Insurer's Fiscal Agent and to BAM and shall not be deemed received until received by both and (b) all payments required to be made by BAM under this Policy may be made directly by BAM or by the Insurer's Fiscal Agent on behalf of BAM. The Insurer's Fiscal Agent is the agent of BAM only, and the Insurer's Fiscal Agent shall in no event be liable to the Trustee, Paying Agent or any Owner for any act of the Insurer's Fiscal Agent or any failure of BAM to deposit or cause to be deposited sufficient funds to make payments due under this Policy. To the fullest extent permitted by applicable law, BAM agrees not to assert, and hereby waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to BAM to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy. This Policy may not be canceled or revoked. This Policy sets forth in full the undertaking of BAM and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, any premium paid in respect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW. THIS POLICY IS ISSUED WITHOUT CONTINGENT MUTUAL LIABILITY FOR ASSESSMENT. IN WITNESS WHEREOF, BUILD AMERICA MUTUAL ASSURANCE COMPANY has caused this Policy to be executed on its behalf by its Authorized Officer, 111� r — MR Un PANY Schedule A Notices (Unless Otherwise Specified by BANI) Email: claims@buildamerica.com Address: 200 Liberty Street, 27th floor New York, New York 10281 Telecopy: 212-962-1524 (attention: Claims) ♦ BAM ISSUER: City of Fayetteville, Arkansas MEMBER: City of Fayetteville, Arkansas BONDS: $10,980,000 in aggregate principal amount of Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 Maximum Policy Limit: $703,512.50 MUNICIPAL BOND DEBT SERVICE RESERVE INSURANCE POLICY Policy No: 2014RO584 Effective Date: November 19, 2014 Risk Premium: $9,953.84 Member Surplus Contribution: $1,654.12 Total Insurance Payment: $11,607.96 BUILD AMERICA MUTUAL ASSURANCE COMPANY ("BAM"), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee") or paying agent (the "Paying Agent") for the Bonds named above under the Security Documents, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer. BAM will make payment as provided in this Policy to the Trustee or Paying Agent on the later of (i) the Business Day on which such principal and interest becomes Due for Payment and (ii) the first Business Day following the Business Day on which BAM shall have received a completed Notice of Nonpayment in a form reasonably satisfactory to it. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by BAM is incomplete, it shall be deemed not to have been received by BAM for purposes of this paragraph, and BAM shall promptly so advise the Trustee or Paying Agent who may submit an amended Notice of Nonpayment. Payment by BAM to the Trustee or Paying Agent for the benefit of the Owners shall, to the extent thereof, discharge the obligation of BAM under this Policy. Upon such payment, BAM shall become entitled to reimbursement of the amount so paid (together with interest and expenses) pursuant to the Security Documents and Debt Service Reserve Agreement, if any. The amount available under this Policy for payment shall not exceed the Policy Limit. The amount available at any particular time to be paid to the Trustee or Paying Agent under the terms of this Policy shall automatically be reduced by and to the extent of any payment under this Policy. However, after such payment, the amount available under this Policy shall be reinstated in full or in part, but only up to the Policy Limit, to the extent of the reimbursement of such payment (after taking into account the payment of interest and expenses) to BAM by or on behalf of the Issuer. Within three (3) Business Days of such reimbursement, BAM shall provide the Trustee or the Paying Agent with Notice of Reinstatement, in the form of Exhibit A attached hereto, and such reinstatement shall be effective as of the date BAM gives such notice. Payment under this Policy shall not be available with respect to (a) any Nonpayment that occurs prior to the Effective Date or after the end of the Term of this Policy or (b) Bonds that are not outstanding under the Security Documents. If the amount payable under this Policy is also payable under another BAM issued policy insuring the Bonds, payment first shall be made under this Policy to the extent of the amount available under this Policy up to the Policy Limit. In no event shall BAM incur duplicate liability for the same amounts owing with respect to the Bonds that are covered under this Policy and any other BAM issued insurance policy. Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's Fiscal Agent (as hereinafter defined) are authorized or required by law or executive order to remain closed. "Debt Service Reserve Agreement" means the Debt Service Reserve Agreement, if any, dated as of the effective date hereof, in respect of this Policy, as the same may be amended or supplemented from time to time. "Due for Payment" means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity (unless BAM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration) and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment made to an Owner by or on behalf of the Issuer of principal or interest that is Due for Payment, which payment has been recovered from such Owner pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction. "Notice" means delivery to BAM of a notice of claim and certificate, by certified mail, email or telecopy as set forth on the attached Schedule or other acceptable electronic delivery, in a form satisfactory to BAM, from and signed by the Trustee or the Paying Agent, which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount, (d) payment instructions and (e) the date such claimed amount becomes or became Due for Payment. "Owner" means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that "Owner" shall not include the Issuer, the Member or any person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds. "Policy Limit" means the dollar amount of the debt service reserve fund required to be maintained for the Bonds by the Security Documents from time to time (the "Reserve Account Requirement"), or the portion of the Reserve Account Requirement for the Bonds provided by this Policy as specified in the Security Documents or Debt Service Reserve Agreement, if any, but in no event shall the Policy Limit exceed the Maximum Policy Limit set forth above. The Policy Limit shall automatically and irrevocably be reduced from time to time by the amount of or, if this Policy is only providing a portion of the Reserve Account Requirement, in the same proportion as, each reduction in the Reserve Account Requirement, as provided in the Security Documents or Debt Service Reserve Agreement. "Security Documents" means any resolution, ordinance, trust agreement, trust indenture, loan agreement and/or lease agreement and any additional or supplemental document executed in connection with the Bonds. "Term" means the period from and including the Effective Date until the earlier of (i) the maturity date for the Bonds and (ii) the date on which the Bonds are no longer outstanding under the Security Documents. BAM may appoint a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this Policy by giving written notice to the Trustee and the Paying Agent specifying the name and notice address of the Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trustee and the Paying Agent, (a) copies of all notices required to be delivered to BAM pursuant to this Policy shall be simultaneously delivered to the Insurer's Fiscal Agent and to BAM and shall not be deemed received until received by both and (b) all payments required to be made by BAM under this Policy may be made directly by BAM or by the Insurer's Fiscal Agent on behalf of BAM. The Insurer's Fiscal Agent is the agent of BAM only, and the Insurer's Fiscal Agent shall in no event be liable to the Trustee, Paying Agent or any Owner for any act of the Insurer's Fiscal Agent or any failure of BAM to deposit or cause to be deposited sufficient funds to make payments due under this Policy. To the fullest extent permitted by applicable law, BAM agrees not to assert, and hereby waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to BAM to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy. This Policy may not be canceled or revoked. This Policy is being issued under and pursuant to and shall be construed under and governed by the laws of the State of New York, without regard to conflict of law provisions. This Policy sets forth in full the undertaking of BAM and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, any premium paid in respect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW. THIS POLICY IS ISSUED WITHOUT CONTINGENT MUTUAL LIABILITY FOR ASSESSMENT. In witness whereof, BUILD AMERICA MUTUAL ASSURANCE COMPANY has caused this Policy to be executed on its behalf by its AuthorizaA nfF,— BUIL COB go Schedule Notices (Unless Otherwise Specified by BAM) Email: claims(@buildamerica.com Address: 200 Liberty Street, 27" floor New York, New York 10281 Telecopy: 212-962-1524 (attention: Claims) EXHIBIT A NOTICE OF REINSTATEMENT [DATE] [TRUSTEE][PAYING AGENT] [INSERT ADDRESS] Reference is made to the Municipal Bond Debt Service Reserve Insurance Policy, Policy No. (the "Policy"), issued by Build America Mutual Assurance Company ("BAM"). The terms which are capitalized herein and not otherwise defined shall have the meanings specified in the Policy. BAM hereby delivers notice that it is in receipt of payment from the [Issuer], or on its behalf, pursuant to the Security Documents or Debt Service Reserve Agreement, if any, and, as of the date hereof, the Policy Limit is $ 'subject to reduction as the Reserve Account Requirement for the Bonds is reduced in accordance with the terms set forth in the Security Documents. BUILD AMERICA MUTUAL ASSURANCE COMPANY 0 Name: Title: ♦ BAM ISSUER: City of Fayetteville, Arkansas MEMBER: City of Fayetteville, Arkansas BONDS: $10,980,000 in aggregate principal amount of Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 Maximum Policy Limit: $703,512.50 MUNICIPAL BOND DEBT SERVICE RESERVE INSURANCE POLICY Policy No: 2014RO584 Effective Date: November 19, 2014 Risk Premium: $9,953.84 Member Surplus Contribution: $1,654.12 Total Insurance Payment: $11,607.96 BUILD AMERICA MUTUAL ASSURANCE COMPANY ("BAM"), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee") or paying agent (the "Paying Agent") for the Bonds named above under the Security Documents, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer. BAM will make payment as provided in this Policy to the Trustee or Paying Agent on the later of (i) the Business Day on which such principal and interest becomes Due for Payment and (ii) the first Business Day following the Business Day on which BAM shall have received a completed Notice of Nonpayment in a form reasonably satisfactory to it. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by BAM is incomplete, it shall be deemed not to have been received by BAM for purposes of this paragraph, and BAM shall promptly so advise the Trustee or Paying Agent who may submit an amended Notice of Nonpayment. Payment by BAM to the Trustee or Paying Agent for the benefit of the Owners shall, to the extent thereof, discharge the obligation of BAM under this Policy. Upon such payment, BAM shall become entitled to reimbursement of the amount so paid (together with interest and expenses) pursuant to the Security Documents and Debt Service Reserve Agreement, if any. The amount available under this Policy for payment shall not exceed the Policy Limit. The amount available at any particular time to be paid to the Trustee or Paying Agent under the terms of this Policy shall automatically be reduced by and to the extent of any payment under this Policy. However, after such payment, the amount available under this Policy shall be reinstated in full or in part, but only up to the Policy Limit, to the extent of the reimbursement of such payment (after taking into account the payment of interest and expenses) to BAM by or on behalf of the Issuer. Within three (3) Business Days of such reimbursement, BAM shall provide the Trustee or the Paying Agent with Notice of Reinstatement, in the form of Exhibit A attached hereto, and such reinstatement shall be effective as of the date BAM gives such notice. Payment under this Policy shall not be available with respect to (a) any Nonpayment that occurs prior to the Effective Date or after the end of the Term of this Policy or (b) Bonds that are not outstanding under the Security Documents. If the amount payable under this Policy is also payable under another BAM issued policy insuring the Bonds, payment first shall be made under this Policy to the extent of the amount available under this Policy up to the Policy Limit. In no event shall BAM incur duplicate liability for the same amounts owing with respect to the Bonds that are covered under this Policy and any other BAM issued insurance policy. Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's Fiscal Agent (as hereinafter defined) are authorized or required by law or executive order to remain closed. "Debt Service Reserve Agreement" means the Debt Service Reserve Agreement, if any, dated as of the effective date hereof, in respect of this Policy, as the same may be amended or supplemented from time to time. "Due for Payment" means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity (unless BAM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration) and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment made to an Owner by or on behalf of the Issuer of principal or interest that is Due for Payment, which payment has been recovered from such Owner pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction. "Notice" means delivery to BAM of a notice of claim and certificate, by certified mail, email or telecopy as set forth on the attached Schedule or other acceptable electronic delivery, in a form satisfactory to BAM, from and signed by the Trustee or the Paying Agent, which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount, (d) payment instructions and (e) the date such claimed amount becomes or became Due for Payment. "Owner" means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that "Owner" shall not include the Issuer, the Member or any person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds. "Policy Limit" means the dollar amount of the debt service reserve fund required to be maintained for the Bonds by the Security Documents from time to time (the "Reserve Account Requirement"), or the portion of the Reserve Account Requirement for the Bonds provided by this Policy as specified in the Security Documents or Debt Service Reserve Agreement, if any, but in no event shall the Policy Limit exceed the Maximum Policy Limit set forth above. The Policy Limit shall automatically and irrevocably be reduced from time to time by the amount of or, if this Policy is only providing a portion of the Reserve Account Requirement, in the same proportion as, each reduction in the Reserve Account Requirement, as provided in the Security Documents or Debt Service Reserve Agreement. "Security Documents" means any resolution, ordinance, trust agreement, trust indenture, loan agreement and/or lease agreement and any additional or supplemental document executed in connection with the Bonds. "Term" means the period from and including the Effective Date until the earlier of (i) the maturity date for the Bonds and (ii) the date on which the Bonds are no longer outstanding under the Security Documents. BAM may appoint a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this Policy by giving written notice to the Trustee and the Paying Agent specifying the name and notice address of the Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trustee and the Paying Agent, (a) copies of all notices required to be delivered to BAM pursuant to this Policy shall be simultaneously delivered to the Insurer's Fiscal Agent and to BAM and shall not be deemed received until received by both and (b) all payments required to be made by BAM under this Policy may be made directly by BAM or by the Insurer's Fiscal Agent on behalf of BAM. The Insurer's Fiscal Agent is the agent of BAM only, and the Insurer's Fiscal Agent shall in no event be liable to the Trustee, Paying Agent or any Owner for any act of the Insurer's Fiscal Agent or any failure of BAM to deposit or cause to be deposited sufficient funds to make payments due under this Policy. To the fullest extent permitted by applicable law, BAM agrees not to assert, and hereby waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to BAM to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy. This Policy may not be canceled or revoked. This Policy is being issued under and pursuant to and shall be construed under and governed by the laws of the State of New York, without regard to conflict of law provisions. This Policy sets forth in full the undertaking of BAM and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, any premium paid in respect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW. THIS POLICY IS ISSUED WITHOUT CONTINGENT MUTUAL LIABILITY FOR ASSESSMENT. In witness whereof, BUILD AMERICA MUTUAL ASSURANCE COMPANY has caused this Policy to be executed on its behalf by its AuthorizaA nfF,— BUIL COB go Schedule Notices (Unless Otherwise Specified by BAM) Email: claims(@buildamerica.com Address: 200 Liberty Street, 27" floor New York, New York 10281 Telecopy: 212-962-1524 (attention: Claims) EXHIBIT A NOTICE OF REINSTATEMENT [DATE] [TRUSTEE][PAYING AGENT] [INSERT ADDRESS] Reference is made to the Municipal Bond Debt Service Reserve Insurance Policy, Policy No. (the "Policy"), issued by Build America Mutual Assurance Company ("BAM"). The terms which are capitalized herein and not otherwise defined shall have the meanings specified in the Policy. BAM hereby delivers notice that it is in receipt of payment from the [Issuer], or on its behalf, pursuant to the Security Documents or Debt Service Reserve Agreement, if any, and, as of the date hereof, the Policy Limit is $ 'subject to reduction as the Reserve Account Requirement for the Bonds is reduced in accordance with the terms set forth in the Security Documents. BUILD AMERICA MUTUAL ASSURANCE COMPANY 0 Name: Title: BAM DISCLOSURE, NO DEFAULT AND TAX CERTIFICATE OF BUILD AMERICA MUTUAL ASSURANCE COMPANY BAM Policy No.: 2014BO584 BONDS: $10,980,000 in aggregate principal amount of City of Fayetteville, Arkansas Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 Date of the Official Statement: October 28, 2014 The undersigned hereby certifies on behalf of BUILD AMERICA MUTUAL ASSURANCE COMPANY ('BAM"), in connection with the issuance by BAM of its Policy referenced above (the "Policy") in respect of the Bonds referenced above (the "Bonds") that: (i) The information set forth under the caption "BOND INSURANCE -BUILD AMERICA MUTUAL ASSURANCE COMPANY" in the official statement referenced above, relating to the Bonds (the "Official Statement") is true and correct, (ii) BAM is not currently in default nor has BAM ever been in default under any policy or obligation guaranteeing the payment of principal of or interest on an obligation; (iii) The Policy is an unconditional and recourse obligation of BAM (enforceable by or on behalf of the holders of the Bonds) to pay the scheduled principal of and interest on the Bonds when due in the event of Nonpayment by the Issuer (as set forth in the Policy); (iv) The insurance payment (inclusive of the sum of the Risk Premium and the Member Surplus Contribution) (the "Insurance Payment's is a charge for the transfer of credit risk and was determined in arm's length negotiations and is required to be paid to BAM as a condition to the issuance of the Policy; (v) BAM will, for federal income tax purposes, treat the Insurance Payment as solely in consideration for the insurance risk it assumes in the Policy and not as consideration for an investment in BAM or its assets; (vi) No portion of such Insurance Payment represents an indirect payment of costs of issuance, including rating agency fees, other than fees paid by BAM to maintain its rating, which, together with all other overhead expenses of RAM, are taken into account in the formulation of its rate structure, or for the provision of additional services by BAM, nor the direct or indirect payment for a cost, risk or other element that is not customarily borne by insurers of tax-exempt bonds (in transactions in which the guarantor has no involvement other than as a guarantor); (vii) BAM is not providing any services in connection with the Bonds other than providing the Policy, and except for the Insurance Payment, BAM will not use any portion of the Bond proceeds; (viii) Except for payments under the Policy in the case of Nonpayment by the Issuer, there is no obligation to pay any amount of principal or interest on the Bonds by BAM, unless BAM has issued a debt service reserve insurance policy with respect to the Bonds; (ix) BAM does not expect that a claim will be made on the Policy; and (x) Neither the Issuer nor any other Obligor is entitled to a refund of the Insurance Payment for the Policy in the event a Bond is retired before the final maturity date. BAM makes no representation as to the nature of the interest to be paid on the Bonds or the treatment of the Policy under Section 1.148-4(0 of the Income Tax Regulations. Dated: November 19, 2014 4PANY � i• BA Primary Market Disclosure Certificate City of Fayetteville, Arkansas, Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 (the "Insured Bonds") For the benefit of City of Fayetteville, Arkansas (the "Issuer"), and acknowledging that the Issuer will be relying on the contents hereof in addressing certain tax and disclosure items and for other matters, Build America Mutual Assurance Company ("Build America") makes the following representations and warranties as of the date hereof: 1. Neither Build America nor any affiliate of Build America has purchased, or has committed to purchase, any of the Insured Bonds, whether at the initial offering or otherwise; 2. Neither Build America nor any affiliate of Build America has entered into any agreement or understanding regarding the purchase or sale of the Insured Bonds, except for the insurance policies that Build America has provided regarding payments due under the Insured Bonds and the documentation associated with said insurance policies. For the purposes of this certificate, "affiliate of Build America" means a person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, Build America. November 19, 2014 Buil i�� BAM November 19, 2014 City of Fayetteville 113 W Mountain Fayetteville, AR 72701 Stephens Inc. 3425 N. Futrall Drive, Suite 201 Fayetteville, AR 72703 City of Fayetteville P.O. Box 7009 (71611) 501 Main Street Pine Bluff, AR 71601 RE: Bond Insurance Policy: Municipal Bond Insurance Policy No. 2014B0584 DSR Policy: Debt Service Reserve Policy No. 2014R0584 Member: City of Fayetteville, Arkansas Bonds: Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds, Series 2014 Date of the Official Statement: October 28, 2014 Ladies and Gentlemen: I am Counsel of Build America Mutual Assurance Company, a New York mutual insurance company ("BAM"). You have requested my opinion in such capacity as to the matters set forth below in connection with the issuance by BAM of its above -referenced Bond Insurance Policy and DSR Policy (collectively, the "Policies"). In that regard, and for purposes of this opinion, I have examined such corporate records, documents and proceedings as I have deemed necessary and appropriate. Based upon the foregoing, I am of the opinion that: BAM is a mutual insurance company duly organized and validly existing under the laws of the State of New York and authorized to transact financial guaranty insurance business therein. 2. The Policies have been duly authorized, executed and delivered by BAM. 3. Each of the Policies constitutes the valid and binding obligation of BAM, enforceable in accordance with its terms, subject, as to the enforcement of remedies, to bankruptcy, insolvency, reorganization, rehabilitation, moratorium and other similar laws affecting the enforceability of creditors' rights generally applicable in the event of the bankruptcy or insolvency of BAM and to the application of general principles of equity. 4. The issuance of the Policies qualifies the Member as a member of BAM until the Bonds are no longer outstanding. As a member of BAK the Member is entitled to certain rights and privileges as provided in BAM's charter and by-laws and as may otherwise be provided under New York law. The Policies are non -assessable and create no contingent mutual liability. In addition, please be advised that I have reviewed the description of the Bond Insurance Policy under the caption `BOND INSURANCE" in the Official Statement related to the above - referenced Bonds. There has not come to my attention any information which would cause me to believe that the description of the Bond Insurance Policy, as of the date of the Official Statement or as of the date of this opinion, contains any untrue statement of a material fact or omits to state a material fact necessary to the make the statements therein, in the light of the circumstances under which they were made, not misleading. Please be advised that except as described above, I express no opinion with respect to any information contained in, or omitted, from the Official Statement. I am a member of the Bar of the State of New York, and do not express any opinion as to any law other than the laws of the State of New York. This letter and the legal opinions herein are intended for the information solely of the addresses hereof and solely for the purposes of the transactions described in the Official Statement and are not to be relied upon by any other person or entity (including, without limitation, any person or entity that acquires bonds from an addressee of this letter.) I do not undertake to advise you of matters that may come to my attention subsequent to the date hereof that may affect the conclusions expressed herein. V DEBT SERVICE RESERVE AGREEMENT DEBT SERVICE RESERVE AGREEMENT dated November 19, 2014 (the "Agreement"), by and between City of Fayetteville, Arkansas (the "Obligor") and BUILD AMERICA MUTUAL ASSURANCE COMPANY ("BAM"); In consideration of the issuance by BAM of its Municipal Bond Debt Service Reserve Insurance Policy No. 2014RO584 (the "Reserve Policy") with respect to the Obligor's Hotel, Motel and Restaurant Gross Receipts Tax and Tourism Revenue Capital Improvement and Refunding Bonds Series 2014 (the "Insured Obligations") issued under the Trust Indenture dated as of November 1, 2014 between the Obligor and Simmons First Trust Company, N.A., as trustee (the "Trustee") (the "Authorizing Document"), and the payment to BAM of the insurance premium for the Reserve Policy, the Obligor and BAM hereby covenant and agree as follows: 1. The Obligor shall repay BAM any draws under the Reserve Policy and pay all Administrative Expenses (as defined below) incurred by BAM. Interest shall accrue and be payable on such draws and expenses from the date of payment by BAM at the Late Payment Rate. "Late Payment Rate" means the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in the City of New York, as its prime or base lending rate ("Prime Rate") (any change in such Prime Rate to be effective on the date such change is announced by JPMorgan Chase Bank) plus 3%, and (ii) the then applicable highest rate of interest on the Insured Obligations and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. In the event JPMorgan Chase Bank ceases to announce its Prime Rate, the Prime Rate shall be the prime or base -lending rate of such national bank as BAM shall designate. 2. Repayment of draws and payment of Administrative Expenses and the interest accrued thereon at the Late Payment Rate (collectively, "Policy Costs") shall commence in the first month following each draw and each such monthly payment shall be in an amount at least equal to 1/12th of the aggregate of Policy Costs related to such draw. Amounts in respect of Policy Costs paid to BAM shall be credited first to interest due, then to the expenses due and then to principal due. 3. As and to the extent that payments are made to BAM on account of principal due, the coverage under the Reserve Policy will be reinstated by a like amount, subject to the terms of the Reserve Policy. 4. All cash and investments in the debt service reserve fund or account securing the Insured Obligations (the "Reserve Fund") shall be transferred to the debt service fund for payment of debt service on the Insured Obligations before any drawing may be made on the Reserve Policy or on any alternative credit instrument. 4825-5903-3120.1 Payment of any Policy Costs shall be made prior to replenishment of any such cash amounts. Draws on all alternative credit instruments (including the Reserve Policy) on which there is available coverage shall be made on a pro rata basis (calculated by reference to available coverage under each such alternative credit instrument) after applying available cash and investments in the Reserve Fund. Payment of Policy Costs and reimbursement of amounts with respect to alternative credit instruments shall be made on a pro -rata basis prior to replenishment of any cash drawn from the Reserve Fund. For the avoidance of doubt, "available coverage" means the coverage then available for disbursement pursuant to the terms of the applicable alternative credit instrument without regard to the legal or financial ability or willingness of the provider of such instrument to honor a claim or draw thereon or the failure of such provider to honor any such claim or draw. 5. Draws on the Reserve Policy may only be used to make payments on the Insured Obligations (and for the avoidance of doubt, not any other obligations of the Obligor, whether issued on parity with the Insured Obligations, or otherwise). 6. If the Obligor shall fail to pay any Policy Costs in accordance with the requirements of the Authorizing Document and this Agreement, BAM shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided under the Authorizing Document, other than (i) acceleration of the maturity of the Insured Obligations or (ii) remedies which would adversely affect owners of the Insured Obligations. 7. The Authorizing Document shall not be discharged until all Policy Costs owing to BAM shall have been paid in full. The Obligor's obligation to pay such amounts shall expressly survive payment in full of the Insured Obligations. 8. In order to secure the Obligor's payment obligations with respect to the Policy Costs, there is hereby granted and perfected in favor of BAM a security interest (subordinate only to that of the owners of the Insured Obligations) in all revenues and collateral pledged as security for the Insured Obligations. 9. Policy Costs due and owing shall be included in debt service requirements for purposes of calculation of the additional bonds test and the rate covenant in the Authorizing Document. 10. The Trustee shall ascertain the necessity for a claim upon the Reserve Policy in accordance with the provisions of paragraph 4 hereof and shall provide notice to BAM in accordance with the terms of the Reserve Policy at least five business days prior to each date upon which interest or principal is due on the Insured Obligations. Where deposits are required to be made by the Obligor with the Trustee to the debt service fund for the Insured Obligations more often than semi- annually, the Trustee shall give notice to BAM of any failure of the Obligor to 4825-5903-3120.1 make timely payment in full of such deposits within two business days of the date due. 11. The Obligor agrees unconditionally that it will pay or reimburse BAM on demand any and all reasonable charges, fees, costs, losses, liabilities and expenses that BAM may pay or incur, including, but not limited to, fees and expenses of BAM's agents, attorneys, accountants, consultants, appraisers and auditors and reasonable costs of investigations, in connection with the administration (including waivers and consents, if any), enforcement, defense, exercise or preservation of any rights and remedies in respect of this Agreement, the Authorizing Document and any other document executed in connection with the Insured Obligations ("Administrative Expenses"). For purposes of the foregoing, costs and expenses shall include a reasonable allocation of compensation and overhead attributable to the time of employees of BAM spent in connection with the actions described in the preceding sentence. The Obligor agrees that failure to pay any Administrative Costs on a timely basis will result in the accrual of interest on the unpaid amount at the Late Payment Rate, compounded semi- annually, from the date that payment is first due to BAM until the date BAM is paid in full. 12. The obligation of the Obligor to pay all amounts due under this Agreement shall be an absolute and unconditional obligation of the Obligor and will be paid or performed strictly in accordance with this Agreement. 13. So long as a default or event of default has occurred and is continuing under this Agreement, the Authorizing Document or any other document executed in connection with the Insured Obligations, the Obligor shall not be eligible for a dividend or any other economic benefit under BAM's organizational documents. 14. Notices to BAM shall be sent to the following address (or such other address as BAM may designate in writing): Build America Mutual Assurance Company, 200 Liberty Street, 27th Floor, New York, NY 10281, Attention: Surveillance, Re: Policy No. 2014R0584, Telephone: (212) 235-2500, Telecopier: (212) 235- 1542, Email: noticesnae buildamerica.com; with a copy of such notice or other communication sent to the attention of the General Counsel at the same address and at claims@buildamerica.com or at Telecopier: (212) 235-5214. 15. If any one or more of the agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such agreements, provisions or terms shall be deemed severable from the remaining agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement. In the event of any conflict in the terms of this Agreement and the Authorizing Document, the terms of this Agreement shall control. 4825-5903-3120.1 16. All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Authorizing Document. 17. This Agreement may be executed in counterparts, each of which alone and all of which together shall be deemed one original Agreement. 18. This Agreement and the rights and obligations of the parties to the Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York. IN WITNESS WHEREOF, each of the parties hereto has duly executed and delivered this Agreement as of the date first above written. ;CITY4F.TTEVILLE, ARKANSAS BUILD AMERICA MUTUAL ASSURANCE COMPANY 0 4825-5903-3120.1 Title: 16. All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Authorizing Document. 17. This Agreement may be executed in counterparts, each of which alone and all of which together shall be deemed one original Agreement. 18. This Agreement and the rights and obligations of the parties to the Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York. IN WITNESS WHEREOF, each of the parties hereto has duly executed and delivered this Agreement as of the date first above written. CITY OF FAYETTEVILLE, ARKANSAS 0 Title: Mayor 4825-5903-3120.1