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HomeMy WebLinkAboutOrdinance 5457 ORDINANCE NO. 5457 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $6,500,000 OF PARKING REVENUE IMPROVEMENT BONDS BY THE CITY OF FAYETTEVILLE, ARKANSAS FOR THE PURPOSE OF FINANCING ALL OR A PORTION OF THE COSTS OF ACQUISITION, CONSTRUCTION AND EQUIPPING OF A PARKING DECK. FACILITY; AUTHORIZING THE EXECUTION AND DELIVERY OF A TRUST INDENTURE PURSUANT TO WHICH THE BONDS WILL BE ISSUED AND SECURED; AUTHORIZING THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT PURSUANT TO WHICH THE BONDS WILL BE OFFERED; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT; AND PRESCRIBING OTHER MATTERS RELATING THERETO. WHEREAS, the City of Fayetteville, Arkansas (the "City"), has determined that there is a need for increased parking capacity in the City's Entertainment District and desires to provide such capacity through the acquisition, construction and equipping of parking deck facilities and related roadway and other improvements, such facilities and improvements to be located within the Entertainment District Parking Zone (the"Project"); and WHEREAS, the City is authorized and empowered under the provisions of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution and Arkansas Code Annotated (1998 Repl. & 2011 Supp.) Sections 14-164-401 et seq. (as from time to time amended, the "Act"), to issue and sell its revenue bonds and to expend the proceeds thereof to finance the costs of"capital improvements" (as defined in the Act), such as those improvements comprising the Project; and WHEREAS, in accordance with the provisions of Amendment 65 and the Act, the City has determined to issue its Parking Revenue Improvement Bonds (the "Bonds") in the aggregate principal amount of not to exceed $6,500,000 for the purpose of(i) financing some or all of the costs of acquisition, construction and equipping of the Project, (ii) establishing a debt service reserve for the Bonds, and(iii)paying printing, underwriting, legal and other expenses incidental to the issuance of the Bonds; and WHEREAS, the Bonds will be secured by and payable from net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated by the Project and net revenues with respect to City management of parking facilities owned by third parties (the"Net Parking Revenues"); and WHEREAS, an open public hearing on the question of the issuance of the Bonds has been held before the City Council on November 1, 2011, following publication of notice thereof in the Northwest Arkansas Times on October 21, 2011; and WHEREAS, the City has determined to issue and secure the Bonds pursuant to a Trust Indenture (the "Trust Indenture"), by and between the City and Simmons First Trust Company, N.A., as trustee (the "Trustee"), a form of which has been presented to and is before this meeting; and WHEREAS, the City proposes to enter into a Bond Purchase Agreement (the "Bond Purchase Agreement") in substantially the form presented to and before this meeting, with Stephens Inc., Fayetteville, Arkansas (the"Underwriter"),providing for the sale of the Bonds. NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Fayetteville, Arkansas: Section 1: The City Council hereby finds and declares that the acquisition, construction and equipping of the Project is in the best interest of the City and its residents. Section 2: Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution of Arkansas and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Parking Revenue Improvement Bonds" (the "Bonds"). The Bonds shall be issued in the original aggregate principal amount of not to exceed Six Million Five Hundred Thousand Dollars ($6,500,000), shall mature not later than June 1, 2037, and shall bear interest at the rates specified in the Bond Purchase Agreement. The average yield on the Bonds as a whole shall not exceed 5.00% per annum. The proceeds of the Bonds will be utilized, along with other available moneys, to finance the costs of the Project, to establish a debt service reserve for the Bonds, and 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. The Bonds shall not be secured by general revenues of the City, but shall be payable from and secured by Net Parking Revenues. The Mayor is hereby authorized and directed to execute and deliver the Bonds 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, 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. 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 (the "Trust Indenture"), by and between the City and 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 Net Parking Revenues to the Bonds 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.) 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 a Bond Purchase Agreement on behalf of the City, to be dated as of the date of its execution (the "Bond Purchase Agreement"), by and between the City and the Underwriter, and 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. 3 (Advice is given that a copy of the Bond Purchase Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 6: In order to provide for continuing disclosure of certain financial and operating information with respect to the City and the Net Parking Revenues in compliance with the provisions of Rule 15c2-12 of the U. S. Securities and Exchange Commission, the Mayor is hereby authorized and directed to execute a Continuing Disclosure Agreement to be dated as of the date of its execution (the "Continuing Disclosure Agreement"), by and between the City and the Trustee, and the Mayor is hereby authorized and directed to cause the Continuing Disclosure Agreement to be executed by the Trustee. The Continuing Disclosure Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Continuing Disclosure Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Continuing Disclosure Agreement, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Continuing Disclosure Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 7: The various rates and amounts for the parking fees, rents, fines and charges generating the Net Parking Revenues previously enacted by the City Council are hereby ratified and confirmed. Section 8. 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 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 9: The Bonds are hereby designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The City hereby represents and covenants that the aggregate principal amount of its tax-exempt obligations (excluding "private activity bonds" within the meaning of Section 141 of the Code), including those of its subordinate entities, issued in calendar year 2011 will not exceed$10,000,000. Section 10: Kutak Rock LLP, Little Rock, Arkansas, is hereby appointed to act as Bond Counsel on behalf of the City in connection with the issuance and sale of the Bonds. Section 11: The adoption of this Ordinance is intended as the City's "official intent"to reimburse itself from the proceeds of the Bonds for preliminary costs of the Project and related expenses advanced by the City. 4 Section 12: 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 13: All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. PASSED and APPROVED this 15th day of November, 2011. APPROVED: ATTEST: B Dy: - 06pvlkou I ELD JO ;;'Mayor SONDRA E. SMITH, City ClerlJTreasurer .GAS Y IVa ®moo m FAYETTEVILLE� 5m `e 'O�ooCa���a 5 City of Fayetteville Staff Review Form City Council Agenda Items and Contracts, Leases or Agreements November 1,2011 City Council Meeting Date Agenda Items Only Paul A Becker Finance and Internal Services Finance and Internal Services Submitted By Division Department Action Required: This is a request to approve a bond ordinance authorizing the issuance of Parking Revenue Improvement Bonds, in a face amount not to exceed $6,500,000, the proceeds of which would be used to finance the construction of a parking facility in the Entertainment District. N/A $ - Cost of this request Category/Project Budget Program Category/Project Name Account Number Funds Used to Date Program/Project Category Name Project Number Remaining Balance Fund Name Budgeted Item Budget Adjustment Attached 1911k►ll Previous Ordinance or Resolution# Department Director Date Original Contract Date: Original Contract Number: City A orney Date 1af�d+ (D.,- &C� Finance and Internal Services Director Date Received in Cif)0-2 0-1 1 A 11 0 9• R C V D Clerk's Office .� C ief of S ff Date Received in / Mayor's Office f Ma or Date Comments: F� Revised January 15,2009 • a e evl e THE CITY OF FAYETTEVILLE,ARKANSAS DEPARTMENT CORRESPONDENCE ARKANSAS CITY COUNCIL AGENDA MEMO To: Mayor Jordan and Members of the Fayetteville City Council Thru: Don Marr, Chief of Staff From: Paul A Becker, Finance Director Date: October 13, 2011 Subject: Request Approval of a Bond Ordinance Authorizing the Issuance of Parking Revenue Bonds Recommendation: Staff recommends the approval of a Parking Revenue Bond Ordinance in an amount not to exceed a face value of$6,500,000.Sale of the bonds authorized will be repaid with net parking revenues which will be pledged for that purpose. The coverage for calculation for these bonds will be 1.25% average debt service required per year. In order to secure the bonds, it will be necessary for the City to covenant that fees, rents fines, and charges generating Net Parking Revenue, if and when necessary, from time to time, be increased in such a manner as to produce Net Parking Revenue sufficient to equal 1.25% of the annual debt service on bonds outstanding and any amount, if any, required to maintain the debt service reserve requirement. The initial coverage for the amount required is calculated to be 1.7% coverage which should be more than adequate for the near future. Issues• The need for additional parking in the Entertainment District has been recognized and discussed for many years. However, no revenue stream was available to the City to provide additional parking space or build a parking facility to accommodate the need for parking. Mayor Jordan brought forward the paid parking program, which the Council subsequently adopted, to address that need. Adoption of this ordinance will provide the necessary funding to proceed with the parking facility project. BUDGET IMPACT: Again, the sale of the bonds authorized by this resolution will provide the funding necessary to move forward with the project. The bond sale is expected to net approximately$5,500,000 for the project. The balance of the Amount generated will be needed to meet reserve requirements and pay issuance costs. ORDINANCE NO. AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $6,500,000 OF PARKING REVENUE IMPROVEMENT BONDS BY THE CITY OF FAYETTEVILLE, ARKANSAS FOR THE PURPOSE OF FINANCING ALL OR A PORTION OF THE COSTS OF ACQUISITION, CONSTRUCTION AND EQUIPPING OF A PARKING DECK FACILITY; AUTHORIZING THE EXECUTION AND DELIVERY OF A TRUST INDENTURE PURSUANT TO WHICH THE BONDS WILL BE ISSUED AND SECURED; AUTHORIZING THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT PURSUANT TO WHICH THE BONDS WILL BE OFFERED; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT; AND PRESCRIBING OTHER MATTERS RELATING THERETO. WHEREAS, the City of Fayetteville, Arkansas (the "City"), has determined that there is a need for increased parking capacity in the City's Entertainment District and desires to provide such capacity through the acquisition, construction and equipping of parking deck facilities and related roadway and other improvements, such facilities and improvements to be located within the Entertainment District Parking Zone(the"Project"); and WHEREAS, the City is authorized and empowered under the provisions of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution and Arkansas Code Annotated (1998 Repl. & 2011 Supp.) Sections 14-164-401 et seq. (as from time to time amended, the "Act"), to issue and sell its revenue bonds and to expend the proceeds thereof to finance the costs of"capital improvements" (as defined in the Act), such as those improvements comprising the Project; and WHEREAS, in accordance with the provisions of Amendment 65 and the Act, the City has determined to issue its Parking Revenue Improvement Bonds (the "Bonds") in the aggregate principal amount of not to exceed $6,500,000 for the purpose of(i) financing some or all of the costs of acquisition, construction and equipping of the Project, (ii) establishing a debt service reserve for the Bonds, and (iii)paying printing, underwriting, legal and other expenses incidental to the issuance of the Bonds; and WHEREAS, the Bonds will be secured by and payable from net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated by the Project and net revenues with respect to City management of parking facilities owned by third parties(the"Net Parking Revenues"); and WHEREAS, an open public hearing on the question of the issuance of the Bonds has been held before the City Council on November 1, 2011, following publication of notice thereof in the Northwest Arkansas Times on October 21, 2011; and 4841-9672-0651.3 WHEREAS, the City has determined to issue and secure the Bonds pursuant to a Trust Indenture (the "Trust Indenture"), by and between the City and Simmons First Trust Company, N.A., as trustee (the "Trustee"), a form of which has been presented to and is before this meeting; and WHEREAS, the City proposes to enter into a Bond Purchase Agreement (the "Bond Purchase Agreement") in substantially the form presented to and before this meeting, with Stephens Inc., Fayetteville, Arkansas (the"Underwriter"),providing for the sale of the Bonds. NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Fayetteville,Arkansas that: Section 1. The City Council hereby finds and declares that the acquisition, construction and equipping of the Project is in the best interest of the City and its residents. Section 2. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution of Arkansas and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Parking Revenue Improvement Bonds" (the "Bonds"). The Bonds shall be issued in the original aggregate principal amount of not to exceed Six Million Five Hundred Thousand Dollars ($6,500,000), shall mature not later than June 1, 2037, and shall bear interest at the rates specified in the Bond Purchase Agreement. The average yield on the Bonds as a whole shall not exceed 5.00% per annum. The proceeds of the Bonds will be utilized, along with other available moneys, to finance the costs of the Project, to establish a debt service reserve for the Bonds, and 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. The Bonds shall not be secured by general revenues of the City,but shall be payable from and secured by Net Parking Revenues. The Mayor is hereby authorized and directed to execute and deliver the Bonds 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, 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. 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(the"Trust Indenture"), by and between the City and 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 4841-9672-0651.3 2 thereof pertaining to the pledge of Net Parking Revenues to the Bonds 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.) 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 a Bond Purchase Agreement on behalf of the City, to be dated as of the date of its execution (the "Bond Purchase Agreement"), by and between the City and the Underwriter, and 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 continuing disclosure of certain financial and operating information with respect to the City and the Net Parking Revenues in compliance with the provisions of Rule 15c2-12 of the U. S. Securities and Exchange Commission, the Mayor is hereby authorized and directed to execute a Continuing Disclosure Agreement to be dated as of the date of its execution (the "Continuing Disclosure Agreement"), by and between the City and the Trustee, and the Mayor is hereby authorized and directed to cause the Continuing Disclosure 4841-9672-0651.3 3 Agreement to be executed by the Trustee. The Continuing Disclosure Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Continuing Disclosure Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Continuing Disclosure Agreement, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Continuing Disclosure Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 7. The various rates and amounts for the parking fees, rents, fines and charges generating the Net Parking Revenues previously enacted by the City Council are hereby ratified and confirmed. Section 8. 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 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 9. The Bonds are hereby designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The City hereby represents and covenants that the aggregate principal amount of its tax-exempt obligations (excluding"private activity bonds" within the meaning of Section 141 of the Code), including those of its subordinate entities, issued in calendar year 2011 will not exceed $10,000,000. Section 10. Kutak Rock LLP, Little Rock, Arkansas, is hereby appointed to act as Bond Counsel on behalf of the City in connection with the issuance and sale of the Bonds. Section 11. The adoption of this Ordinance is intended as the City's "official intent"to reimburse itself from the proceeds of the Bonds for preliminary costs of the Project and related expenses advanced by the City. Section 12. 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. 4841-9672-0651.3 4 Section 13. All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the,extent of such conflict. ADOPTED AND APPROVED THIS DAY OF , 2011. APPROVED: Mayor ATTEST: City Clerk (S E A L) 4841-9672-0651.3 5 BOND PURCHASE AGREEMENT December_, 2011 City of Fayetteville City Administration Building 113 West Mountain Fayetteville, Arkansas 72701 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2011 Ladies and Gentlemen: KUTAK ROCK LLP DRAFT 10/20/11 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 the date set forth above. 1. General. Upon the terms 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 $ City of Fayetteville, Arkansas Parking Revenue Improvement Bonds, Series 2011 (the "Bonds"), at a purchase price (the "Purchase Price") of $ (equal to the par amount of the Bonds [less] [plus] a net reoffering [discount] [premium] of $ and less underwriter's discount of $) plus accrued interest, if any, from December 1, 2011 to the Closing Date (hereinafter defined). The Bonds shall be issued by the City pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 to the Constitution and Arkansas Code Annotated (1998 Repl. & Supp. 2011) § § 14-164-401 et seq. (the "Local Government Revenue Bond 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 all net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities 4831-5568-3595.3 owned by third parties (the "Net Parking Revenues"), and (2) moneys or investments on deposit in the Revenue Fund, Bond Fund, Debt Service Reserve Fund and Project Fund established by a Trust Indenture dated as of December 1, 2011 (the "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 Bonds shall be issued and secured pursuant to an ordinance of the City adopted by the City Council on November _, 2011 (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 (i) to finance the acquisition, construction, extensions and equipping of the Project (as defined in the Indenture), (ii) to establish a Debt Service Reserve Fund for the purpose of securing the Bonds, and (iii) to pay the costs of issuance of the Bonds. The City will undertake, pursuant to a Continuing Disclosure Agreement to be dated as of the date of delivery of the Bonds (the "Continuing Disclosure Agreement"), to provide certain annual financial and operating information and notices of the occurrence of certain events, if material, as required by Section (b)(5)(i) of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (the "Rule"). A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement (each hereinafter defined). The City is not in default with respect to any of its obligations under previous undertakings pursuant to the Rule. In order to ensure compliance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the City will enter into a Tax Regulatory Agreement to be 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 appendices thereto, dated , 2011, 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 "Rule"). 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 addresses as the Underwriter shall specify, as many copies of the final Official Statement dated , 2011, relating to the Bonds as the Underwriter shall reasonably request as 4831-5568-3595.3 2 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. The City ratifies and confirms the use of the Preliminary Official Statement by the Underwriter prior to the date hereof in connection with the public offering of the Bonds. (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 Local Government Revenue Bond Act to issue the Bonds for the purpose of financing the Project. (b) The City has the full legal right, power and authority (i) to adopt the Authorizing Ordinance authorizing the issuance of and sale of the Bonds, (ii) to enter into this Bond Purchase Agreement, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement, (iii) to charge and collect the Parking Revenues, (iv) to issue, sell and deliver the Bonds to the Underwriter as provided herein, (v) to pledge irrevocably the Net Parking Revenues to the payment of the principal of, premium, if any, and interest on the Bonds, and (vi) 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 Local Government Revenue Bond Act, in all matters relating to such transactions. (c) The City has duly authorized (i) the execution and delivery of the Bonds and the execution, delivery and due performance of this Bond Purchase Agreement, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement, (ii) the distribution and use of the Preliminary Official Statement and the execution, delivery and distribution of the final Official Statement, and (iii) the taking of any and all such actions as may be required on the part of the City to carry out, give effect to and consummate the transactions contemplated by such instruments. All consents or approvals necessary to be obtained by the City in connection with the foregoing have been received, and the consents or approvals so received remain still in full force and effect. 4831-5568-3595.3 3 (d) The Authorizing Ordinance has been duly adopted by City Council of the City, is in full force and effect and constitutes the legal, valid and binding act of the City; and this Bond Purchase Agreement, the Indenture, 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 Continuing Disclosure Agreement and the Tax Regulatory Agreement are enforceable against the City in accordance with their respective terms, except as enforceability thereof may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally. (e) When delivered to or at the direction of the Underwriter, the Bonds will have been duly authorized, executed, authenticated, issued and delivered and will constitute legal, valid and binding obligations of the City in conformity with the laws of the State of Arkansas, including the Local Government Revenue Bond Act, and will be entitled to the benefit and security of the Authorizing Ordinance and the Indenture. (f) The City has duly approved and authorized the distribution and use of the Preliminary Official Statement and the execution, delivery and distribution of the Official Statement. (g) The information contained in the Preliminary Official Statement is, and as of the Closing Date such information in the final Official Statement will be, true and correct in all material respects, and the Preliminary Official Statement does not and the final Official Statement will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (h) If, at any time prior to the earlier of (i) receipt of notice from the Underwriter pursuant to Section 3(d) hereof that Official Statements are no longer required to be delivered under the Rule or (ii) 25 days after the Closing Date, any event occurs as a result of which the Official Statement, as then amended or supplemented, might include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the City shall promptly notify the Underwriter in writing of such event. Any information supplied by the City for inclusion in any amendments or supplements to the Official Statement will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Upon the request of the Underwriter therefor, the City shall prepare and deliver to the Underwriter, at the City's expense, as many copies of an amendment or supplement to the Official Statement which will correct any untrue statement or omission therein as the Underwriter may reasonably request. (i) Neither the adoption of the Authorizing Ordinance, the execution and delivery of this Bond Purchase Agreement, the Bonds, the Indenture, the Continuing Disclosure Agreement or the Tax Regulatory Agreement, nor the consummation of the transactions contemplated herein or therein or the compliance with the provisions hereof 4831-5568-3595.3 4 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 Bonds, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement have been obtained. 0) Except as is specifically disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending or, to the best knowledge of the City, threatened, which in any way questions the powers of the City referred to in subparagraph 4(b) above, or the validity of any proceeding taken by the City in connection with the issuance of the Bonds or the imposition or collection of the Parking Revenues, 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 Bonds, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement or this Bond Purchase Agreement or, to the knowledge of the City, which in any way questions the exclusion from gross income of the recipients thereof of the interest on the Bonds for federal income tax purposes or in any other way questions the status of the Bonds under federal or State of Arkansas tax laws or regulations. (k) Any certificate signed by any official of the City and delivered to the Underwriter shall be deemed a representation and warranty by the City to the Underwriter as to the truth of the statements therein contained. (1) The City has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon. (m) The history with respect to the Net Parking Revenues set forth in the Preliminary Official Statement under the caption entitled "SECURITY FOR THE SERIES 2011 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: 4831-5568-3595.3 5 (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, Net Parking Revenues, 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. Fayetteville, Arkansas time on December _, 2011, 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 Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"), together with the other documents hereinafter mentioned; and the Underwriter will accept such delivery and pay the Purchase Price by making a wire transfer of federal funds payable to the order of the Trustee for the account of the City. The Bonds shall be delivered to The Depository Trust Company in New York, New York, and the activities relating to the final execution and delivery of the Authorizing Ordinance, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement and the other documents relating 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, 234 East Millsap Road, Suite 400, Fayetteville, Arkansas ("Bond Counsel"), or at such other place as shall have been mutually agreed upon between the City and the Underwriter. The payment for the Bonds and simultaneous delivery of the Bonds to or at the direction of the Underwriter is herein referred to as the "Closing." 7. Underwriter's Right to Cancel. The Underwriter shall have the right to cancel its obligation to purchase the Bonds hereunder by notifying the City in writing or by telegram of its election to do so between the date hereof and the Closing, if at any time hereafter and prior to the Closing: (i) the House of Representatives or the Senate of the Congress of the United States, or a committee of either, shall have pending before it, or shall have passed or recommended favorably, legislation introduced previous to the date hereof, which legislation, if enacted in its form as introduced or as amended, would have the purpose or 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 4831-5568-3595.3 6 character of the Bonds or the Bonds, or of causing interest on obligations of the general character of the Bonds, or the Bonds, to be includable in gross income for purposes of federal income taxation, and such legislation, in the Underwriter's opinion, materially adversely affects the market price of the Bonds; or (ii) a tentative decision with respect to legislation shall be reached by a committee of the House of Representatives or the Senate of the Congress of the United States, or legislation shall be favorably reported or rereported by such a committee or be introduced, by amendment or otherwise, in or be passed by the House of Representatives or the Senate, or recommended to the Congress of the United States for passage by the President of the United States, or be enacted or a decision by a federal court of the United States or the United States Tax Court shall have been rendered, or a ruling, release, order, regulation or official statement by or on behalf of the United States Treasury Department, the Internal Revenue Service or other governmental agency shall have been made or proposed to be made having the purpose or effect, or any other action or event shall have occurred which has the purpose or effect, directly or indirectly, of adversely affecting the federal income tax consequences of owning the Bonds or of any of the transactions contemplated in connection herewith, including causing interest on the Bonds to be included in gross income for purposes of federal income taxation, or imposing federal income taxation upon revenues or other income of the general character to be derived by the City or by any similar body under the Authorizing Ordinance or the Indenture or similar documents or upon interest received on obligations of the general character of the Bonds, or the Bonds which, in the opinion of the Underwriter, materially adversely affects the market price of or market for the Bonds; or (iii) legislation shall have been enacted, or actively considered for enactment with an effective date prior to the Closing, or a decision by a court of the United States shall have been rendered, the effect of which is that the Bonds, including any underlying obligations, or the Indenture, as the case may be, is not exempt from the registration, qualification or other requirements of the Securities Exchange Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or (iv) a stop order, ruling, regulation or official statement by the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall have been issued or made or any other event occurs, the effect of which is that the issuance, offering or sale of the Bonds, including any underlying obligations, or the execution and delivery of the Indenture as contemplated hereby or by the Official Statement, is or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or (v) any event shall have occurred or any information shall have become known to the Underwriter which causes the Underwriter to reasonably believe that the Official Statement as then amended or supplemented includes an untrue statement of a material fact, 4831-5568-3595.3 7 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 force, with respect to the extension of credit by, or the charge to the net capital requirements of the Underwriter. 8. Conditions to Underwriter's Obligations. The obligation of the Underwriter to purchase the Bonds shall be subject (a) to the performance by the City of its obligations to be performed hereunder at and prior to the Closing, (b) to the accuracy of the representations and warranties of the City herein as of the date hereof and as of the time of the Closing, and (c) to the following conditions, including the delivery by the City of such documents as are enumerated herein in form and substance satisfactory to the Underwriter: (a) The Bonds shall have been duly authorized, executed and delivered in the forms approved by the City in the Indenture with only such changes therein as the Underwriter and the City shall mutually agree upon, which shall in all instances be as described in the final Official Statement; (b) At the time of Closing, (i) the Official Statement, this Bond Purchase Agreement, the Indenture, the Authorizing Ordinance, the Continuing Disclosure Agreement and the Tax Regulatory Agreement shall be in full force and effect and shall not have been amended, modified or supplemented from the date hereof, except as may have been agreed to in writing by the Underwriter, (ii) the proceeds of the sale of the Bonds and other funds shall be deposited and applied as described in the Indenture, (iii) 4831-5568-3595.3 8 no default or event of default under the Indenture shall have occurred and be continuing, and (iv) no material adverse change affecting the City or the Net Parking Revenues shall have occurred, nor shall any development involving a prospective and material adverse change in, or affecting the business, financial condition, results of operations, prospects or properties of the City have occurred; (c) Receipt of fully executed originals of the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement at or prior to the Closing; (d) At or prior to the Closing, the Underwriter shall receive the following documents in such number of counterparts as shall be mutually agreeable to the Underwriter and Bond Counsel: (1) A final approving opinion of Bond Counsel, dated the Closing Date, in substantially the form set forth in Exhibit B hereto; (2) A supplemental opinion of Bond Counsel, addressed to the City, the Trustee and the Underwriter and dated the Closing Date, in substantially the form set forth in Exhibit C hereto; (3) The Official Statement executed by a duly authorized officer of the City; (4) Certified copies of the Authorizing Ordinance and all other ordinances and resolutions of the City relating to the Bonds; (5) Photocopies of the Bonds as executed and delivered; (6) A certificate, in form and substance satisfactory to the Underwriter, of the Mayor of the City, 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 by all action necessary under the Local Government Revenue Bond Act and the laws and Constitution of the State of Arkansas, and has duly authorized the execution, delivery and due performance of the Bonds, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement, the Official Statement and this Bond Purchase Agreement; (iii) no litigation is pending, or to his knowledge 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 the collection or pledge of the Net Parking Revenues or the validity of the Bonds, the Official Statement, the Authorizing Ordinance, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement or this Bond Purchase Agreement; (iv) the Bonds, the Indenture, this Bond Purchase Agreement, the Continuing Disclosure Agreement and the Tax Regulatory Agreement, as executed and delivered by the City, are in the form or in substantially the form approved for such execution by appropriate proceedings of the City; (v) since December 31, 2010, there has not been any material adverse change in the financial condition or results of operations of the City whether or 4831-5568-3595.3 9 not arising in the ordinary course of business, other than as set forth in the Official Statement; (vi) the Authorizing Ordinance has not been amended, modified or repealed as of the Closing Date, and the Authorizing Ordinance remains in full force and effect; (vii) none of the proceedings of the City taken preliminary to the issuance of the Bonds, as certified in such certificate, have been in any manner repealed, amended or changed; (viii) the City has complied in all respects with the provisions of the Local Government Revenue Bond Act and has full legal right, power and authority to charge and collect the Parking Revenues and to issue the Bonds for the purposes stated in the Local Government Revenue Bond Act and to enter into this Bond Purchase Agreement, to adopt the Authorizing 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 Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement; (ix) 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; (x) to the best of his knowledge, no event affecting the City or the Net Parking Revenues 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; and (xi) the City is not then in default in the performance of any of the covenants, conditions, agreements or provisions contained in the Indenture; (7) An opinion of Kit Williams, Esq., City Attorney, dated the Closing Date and addressed to the Underwriter, Bond Counsel and the Trustee, to the effect that (i) the City is a duly organized and validly existing political subdivision and city of the first class, organized under the laws of the State of Arkansas, with full power and authority to adopt the Authorizing Ordinance, to charge and collect the Parking Revenues, and to execute and deliver the Bonds, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement; (ii) the City has duly approved the Preliminary Official Statement and the Official Statement; (iii) the Authorizing Ordinance has been duly adopted by the City by all action necessary under the Local Government Revenue Bond Act and the laws and Constitution of the State of Arkansas, and each remains in full force and effect; (iv) the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement have been duly authorized, approved, executed and delivered by the City and, subject to the extent that the enforceability of the rights and remedies set forth therein may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally, constitute valid and binding agreements of the City enforceable in accordance with their terms; (v) the information in the Official Statement under the captions "THE PROJECT," "THE CITY" and "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 4831-5568-3595.3 10 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 ordinances setting the fees, rents, fines and charges generating the Parking Revenues, the Authorizing Ordinance, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement or this Bond Purchase Agreement and, to the best of such counsel's knowledge, there is no investigation, pending or threatened, and no threatened action, suit or proceeding involving any of the matters hereinabove mentioned in this clause (vi); (vii) the adoption of the Authorizing Ordinance and the execution and delivery of the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement, and compliance with the provisions hereof and thereof, under the circumstances contemplated hereby and thereby, do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or any existing law, regulation, court order or consent decree to which the City is subject; and (viii) based upon the examinations which such counsel has made as counsel to the City, which shall be specified, nothing has come to such counsel's attention which would lead such counsel to believe that the Official Statement (except for the financial statements and other financial data included in the Official Statement, as to which no view need be expressed) contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (8) Evidence that Federal Form 8038-G has been executed by the City and is ready for filing with the Internal Revenue Service. (9) Evidence that, except as disclosed in the Official Statement, all necessary approvals, whether legal or administrative, have been obtained from applicable federal, state and local entities and agencies; and (10) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter and Bond Counsel may reasonably request to evidence compliance by the City with legal requirements, the truth and accuracy, as of the time of Closing, of the representations of the City herein contained and the due performance or satisfaction by the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied. If the City shall be unable to satisfy the conditions to the obligations of the Underwriter contained in this Bond Purchase Agreement, or if the obligation of the Underwriter to purchase and accept delivery of the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter 4831-5568-3595.3 11 nor the City shall be under further obligation hereunder; except that the respective obligations to pay expenses, as provided in Section 12 hereof, shall continue in full force and effect. 9. Conditions to Obligations of the City. The obligations of the City hereunder are subject to the performance by the Underwriter of its obligations hereunder. 10. Survival. All representations, warranties and agreements of the City shall remain operative and in full force and effect, regardless of any investigations made by or on behalf of the Underwriter, and shall survive the Closing. The obligations of the City under Sections 11 or 12 hereof shall survive any termination of this Bond Purchase Agreement by the Underwriter pursuant to the terms hereof. 11. Indemnification. The City, to the extent permitted by law, agrees to indemnify and hold harmless the Underwriter, each member, officer, director, partner or employee of the Underwriter and each person who controls the Underwriter within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended (collectively called the "Indemnified Parties"), against any and all losses, claims, damages, liabilities or expenses (including any legal or other expenses incurred by an Indemnified Party in connection with investigating any claims against an Indemnified Party and defending any actions) whatsoever caused by any untrue statement or misleading statement of a material fact contained in the Official Statement or caused by any 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 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 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, 4831-5568-3595.3 12 including, but not limited to, expenses of mailing or delivery of the Bonds, legal publication costs, charges 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 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 the Underwriter 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 72701, Attention: Mr. Dennis Hunt. 14. Nonassignability. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriter (including any successors or assigns 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. 4831-5568-3595.3 13 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:_ Title: Accepted and agreed to as of _.m. on the date first above written: CITY OF FAYETTEVILLE, ARKANSAS In Mayor 4831-5568-3595.3 14 EXHIBIT A MATURITY SCHEDULE City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2011 (December 1) Principal Maturity Amount 2012 $ 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Interest Rate Yield (with accrued interest on all Bonds from December 1, 2011) * Mandatory sinking fund redemption. Price 4831-5568-3595.3 A-1 EXHIBIT B PROPOSED FORM OF BOND COUNSEL APPROVING OPINION Upon delivery of the Bonds in definitive form, Kutak Rock LLP, Little Rock, Arkansas, proposes to deliver its approving opinion in substantially the following form: December , 2011 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2011 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 $ Parking Revenue Improvement Bonds, Series 2011 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and Arkansas Code Annotated (1998 Repl. & Supp. 2011) § § 14-164-401 et seq. (as from time to time amended, the "Local Government Revenue Bond Act"), pursuant to Ordinance No. of the City, duly adopted and approved on , 2011 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of December 1, 2011 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, 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 nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the Holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance and to enter into and perform its obligations under the Indenture, the valid adoption of the 4831-5568-3595.3 B-1 Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and the Local Government Revenue Bond Act, the City is empowered to adopt the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 4. The Bonds have been validly authorized, executed, issued and delivered by the City and represent valid and binding special obligations of the City. The principal, premium, if any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and pledge by the City to the Trustee of, the Net Parking Revenues (as defined in the Indenture). 5. The Net Parking Revenues 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 Net Parking Revenues. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated (2001 Repl. & 2011 Supp.) Section 4-9-109(d)(14), the pledge, assignment and security interest in the Net Parking Revenues securing the Bonds is and shall be prior to any judicial lien hereafter imposed on said Net Parking Revenues 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 said Net Parking Revenues. 6. Interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinion described in the preceding sentence assumes the accuracy of certain representations and compliance by the City with covenants designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended, that must be met subsequent to the issuance of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with such requirements. The Bonds are "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, and, in the case of certain financial institutions (within the meaning of Section 265(b)(5) of the Code), a 4831-5568-3595.3 B-2 deduction is allowed for eighty percent (80%) of that portion of such financial institution's interest expense allocable to interest on 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, 4831-5568-3595.3 B-3 EXHIBIT C PROPOSED FORM OF BOND COUNSEL SUPPLEMENTAL OPINION December , 2011 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2011 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 , 2011 (the "Bond Purchase Agreement"), by and between the City and Stephens Inc., as underwriter (the "Underwriter"); (b) An executed counterpart of the Continuing Disclosure Agreement dated , 2011 (the "Disclosure Agreement"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as dissemination agent (the "Agent"); 4831-5568-3595.3 C-1 (c) An executed counterpart of the Tax Regulatory Agreement dated December _, 2011 (the "Tax Regulatory Agreement"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"); and (d) Portions of the Official Statement dated December _, 2011, with respect to the Bonds (the "Official Statement"), captioned "INTRODUCTORY STATEMENT," "THE SERIES 2011 BONDS," "SECURITY FOR THE SERIES 2011 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 Disclosure Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Agent, the Disclosure Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 3. The Tax Regulatory Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Trustee, the Tax Regulatory Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 4. The statements contained in the Official Statement under the Relevant Captions, insofar as such statements purport to summarize certain provisions of the Bonds, the Indenture and the Continuing Disclosure Agreement, or conclusions of law and legal opinions, are true, accurate and correct summaries thereof in all material respects and do not omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The enforceability of the respective obligations of the parties to the documents and other items described above, and the availability of certain rights and remedies provided for therein, may be limited by bankruptcy, receivership, insolvency, reorganization, moratorium, marshalling or other similar statutes or rules of law affecting creditors' rights and remedies, to general principles of equity and to the discretion of any court in granting any relief or issuing any order, whether the proceeding is considered a proceeding at law or equity. In particular, the right to indemnification under any of the documents or other items described above may be limited by federal or state securities laws or by the public policy underlying such laws. 4831-5568-3595.3 C-2 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, 4831-5568-3595.3 C-3 KUTAK ROCK LLP DRAFT 10/20/11 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., a national banking association, as dissemination agent (the "Dissemination Agent"), in connection with the issuance of $ City of Fayetteville, Arkansas Parking Revenue Bonds, Series 2011 (the "Bonds"). The Bonds are being issued pursuant to a Trust Indenture dated as of December 1, 2011 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., a national banking association, 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 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, 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., 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. 4818-7643-4187.2 "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 II. "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 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 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 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 . The final Official Statement relating to the Bonds is dated , 2011 (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 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 City's fiscal year. 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 4818-7643-4187.2 2 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 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 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 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 4818-7643-4187.2 3 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 its 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 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. 4818-7643.4187.2 4 Section 14. Past Compliance. The City represents that it has complied with the requirements of each continuing disclosure undertaking entered into by it pursuant to the Rule in connection with previous financings to which the Rule was applicable. 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 obligation 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. 4818-7643-4187.2 5 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: December 1, 2011 CITY OF FAYETTEVILLE, ARKANSAS IN Mayor SIMMONS FIRST TRUST COMPANY, N.A., as Dissemination Agent By:_ Title: 4818-7643-4187.2 6 EXHIBIT I ANNUAL FINANCIAL INFORMATION AND TIMING AND AUDITED FINANCIAL STATEMENTS "Annual Financial Information" means financial information and operating data exclusive of Audited Financial Statements as set forth below of the type appearing or incorporated by reference under the caption "SECURITY FOR THE SERIES 2011 BONDS" in the Final Official Statement. 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 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. 4818-76434187.2 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. 4818-7643-4187.2 v� y PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER 2011 NEW ISSUE NOT RATED o BOOK -ENTRY ONLY In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings andjudicial decisions and assuming the L accuracy of certain representations and continuing compliance with certain covenants, interest on the Series 2011 Bonds is excludable from ngross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. Bond o Counsel is also of the opinion that the Series 2011 Bonds are "qualified tax-exempt obligations" under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Under existing law, Bond Counsel is of the opinion that the Series 2011 Bonds and the interest thereon are exempt from allstate, county and municipal taxes in the State of Arkansas. See the caption "TAX MATTERS" herein. E $>, CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BONDS SERIES 2011 �r Dated: December 1, 2011 Due: December 1, as shown on inside front cover 0 E = The Parking Revenue Improvement Bonds, Series 2011 (the "Series 2011 Bonds"), are being issued by the City of Fayetteville, Arkansas y (the "City") for the purpose of (i) financing all or a portion of the costs of acquiring, constructing and equipping parking deck facilities and related roadway and other improvements within the Ci s Entertainment District the "Project"),it funding a deposit to the debt service reserve s fund, and (iii) paying certain expenses in connection with the issuance of the Series 2011 Bonds. See the captions "ESTIMATED SOURCES ° AND USES OF FUNDS" and "THE PROJECT" herein. o The Series 2011 Bonds are issuable only as fully registered bonds and, when issued, will be registered in the name of Cede & Co., as y nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal, premium, if any, and interest payments on the Series 2011 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2011 Bonds. Individual purchases of the Series 2011 bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers Y (`Beneficial Owners") of Series 2011 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY ' SYSTEM" herein. •n � E° The Series 2011 Bonds shall bear interest from their dated date, payable on June 1 and December 1 of each year, commencing June 1, 2012. All such interest payments shall be payable to the persons in whose name such Series 2011 Bonds are registered on the bond o registration books maintained by Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"), as of the fifteenth day ° of the calendar month preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2011 Bonds shall be payable at the principal corporate trust office of the Trustee. So long as DTC or its nominee is the registered o owner of the Series 2011 Bonds, disbursement of such payments to DTC Participants is the responsibility of DTC, and the disbursement of ,o 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 December 1, 2011 (the "Indenture"), between the City and the Trustee, the payment of the y .E ti principal of, premium, if any, and interest on the Series 2011 Bonds is secured by a pledge of the net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other s y revenues charged and collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be 8 generated by the Project and net revenues with respect to City management of parking facilities owned by third parties (the "Net Parking Revenues"). See the caption "SECURITY FOR THE SERIES 2011 BONDS" herein. The Series 2011 Bonds are subject to optional and mandatory redemption prior to maturity as more fully described herein under the caption "THE SERIES 2011 BONDS - Redemption." E The Series 2011 Bonds are special obligations of the City secured solely by and payable from Net Parking Revenues. The Series s 2011 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or E restriction. The issuance of the Series 2011 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 2011 Bonds, except as described herein with respect to wv the Net Parking Revenues. The Series 2011 Bonds are offered when, as and if issued by the City and are subject to the final approving opinion of Kutak Rock LLP, 4; w . Little Rock, Arkansas, Bond Counsel. Certain matters will be passed upon for the City by its counsel, Kit Williams, Esq., City Attorney. It is P. expected that the Series 2011 Bonds will be available for delivery in New York, New York, on or about December 2011. � � U Stephens Inc. s :, 45 InvmtmentBmkm -�45 The date of this Official Statement is December 2011. Preliminary; subject to change •y � •o x0 MATURITY SCHEDULE* Maturity Principal Interest Maturity Principal Interest (December 1) Amount Rate Yield (December 1) Amount Rate Yield 2012 $ % % 2020 $ % % 2013 2021 2014 2022 2015 2023 2016 2024 2017 2025 2018 2026 2019 2027 $ % Term Bonds due December 1, 2031— Yield: % $ % Term Bonds due December 1, 2036 — Yield: % (Plus accrued interest) CITY OF FAYETTEVILLE, ARKANSAS Issuer City Council Lioneld Jordan, Mayor Rhonda Adams Brenda Boudreaux Bobby Ferrell Adella Gray Mark Kinion Sarah Lewis Matthew Petty Justin Tennant Paul Becker, Finance Director Sondra Smith, City Clerk Kit Williams, City Attorney 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 any 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 2011 Bonds in any jurisdiction in which such offer is not authorized, or in which the person making such offer, solicitation or sale is not qualified to do so, or to any person to whom it is unlawful to make such offer, solicitation or sale. The information and expressions of opinion contained herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. THE SERIES 2011 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE TRUST INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON CERTAIN EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION CONTAINED IN SUCH LAWS. CERTAIN INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED FROM THE CITY, THE DEPOSITORY TRUST COMPANY AND OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE. THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITER DOES NOT GUARANTY THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2011 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......................................................................................................................................... 1 TheSeries 2011 Bonds......................................................................................................................................... 2 Security for the Series 2011 Bonds...................................................................................................................... 4 Book -Entry Only System..................................................................................................................................... 6 TheProject........................................................................................................................................................... 7 Estimated Sources and Uses of Funds.................................................................................................................. 8 Estimated Debt Service Requirements................................................................................................................. 8 Estimated Debt Service Coverage........................................................................................................................ 9 TheCity................................................................................................................................................................ 9 Definitionsof Certain Terms................................................................................................................................ 12 Summaryof the Indenture.................................................................................................................................... 16 Summary of the Continuing Disclosure Agreement............................................................................................. 20 Underwriting........................................................................................................................................................23 TaxMatters.......................................................................................................................................................... 23 LegalMatters........................................................................................................................................................ 24 Miscellaneous.......................................................................................................................................................25 Accuracy and Completeness of Official Statement.............................................................................................. 25 APPENDIX A - Form of Bond Counsel Opinion................................................................................................ A-1 [THIS PAGE LEFT BLANK INTENTIONALLY] PRELIMINARY OFFICIAL STATEMENT �C CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BONDS SERIES 2011 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 by the City of Fayetteville, Arkansas (the "City") of its Parking Revenue Improvement Bonds, Series 2011, in the principal amount of $ ' (the "Series 2011 Bonds"). The City is a city of the first class organized and existing under the laws of the State of Arkansas (the "State"). The City is authorized under Amendment 65 to the Constitution of the State ("Amendment 65") and Arkansas Code Annotated (1998 Repl. & 2011 Supp.) §§14-164-401 et seq. (as from time to time amended, the "Act"), to issue and sell bonds for the purpose of financing "capital improvements," as defined in the Act. The Series 2011 Bonds are to be issued by the City pursuant to Amendment 65, the Act and Ordinance No. adopted and approved on , 2011 (the "Authorizing Ordinance"), for the purpose of (i) financing all or a portion of the costs of acquiring, constructing and equipping parking deck facilities and related roadway and other improvements within the City's Entertainment District (the "Project"), (ii) funding a deposit to the debt service reserve fund, and (iii) paying certain expenses in connection with the issuance of the Series 2011 Bonds. See the captions "ESTIMATED SOURCES AND USES OF FUNDS" and "THE PROJECT" herein. The Series 2011 Bonds are not general obligations of the City, but are special obligations secured solely by and payable from net revenues (after provision for Operation and Maintenance Expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities owned by third parties (the "Net Parking Revenues"). See the caption "SECURITY FOR THE SERIES 2011 BONDS" herein. The faith and credit of the City are not pledged to the payment of the Series 2011 Bonds, and the Series 2011 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 2011 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 2011 Bonds, except as described herein with respect to the Net Parking Revenues. Additional bonds may be issued by the City on a parity of security with the Series 2011 Bonds under certain circumstances set forth in the Indenture (hereinafter defined). See the caption "THE SERIES 2011 BONDS — Additional Bonds" herein. The Series 2011 Bonds and any Additional Bonds are herein collectively referred to as the "Bonds." Pursuant to the provisions of a Continuing Disclosure Agreement dated as of the date of delivery of the Series 2011 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 Net Parking Revenues 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 2011 Bonds, the Net Parking Revenues, the Continuing Disclosure Agreement, and the Trust Indenture dated as of December 1, 2011 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"), pursuant to which the Series 2011 Bonds are issued and secured. Such ' Preliminary, subject to change. 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 2011 Bonds are qualified in their entirety by reference to the definitive forms thereof and the information with respect thereto included in the Indenture. Copies of the Continuing Disclosure Agreement, the Indenture, and the form of Series 2011 Bond included therein, are available from the City by writing to the attention of the Finance Director, 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. Certain financial and operating 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 2011 BONDS Description. The Series 2011 Bonds will be initially dated as of December 1, 2011, and will bear interest payable semiannually on June 1 and December 1 of each year, commencing June 1, 2012, at the rates set forth on the inside cover page hereof. The Series 2011 Bonds will mature on December 1 in the years and in the principal amounts set forth on the inside cover page hereof. The Series 2011 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 2011 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2011 Bonds. Individual purchases of the Series 2011 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers (`Beneficial Owners") of Series 2011 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. All interest payments on the Series 2011 Bonds shall be payable to the persons in whose name such Series 2011 Bonds are registered on the bond registration books maintained by the Trustee, as of the fifteenth day of the calendar month preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2011 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 2011 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 2011 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. The Series 2011 Bonds are subject to redemption prior to maturity as follows: (i) The Series 2011 Bonds are subject to redemption prior to maturity, at the option of the City, on and after December 1, 2016, in whole or in part at any time and in any order of maturity directed by the City, from funds from any source, at a redemption price equal to 100% of the principal amount of the Series 2011 Bonds being redeemed, plus accrued interest to the date of redemption; (ii) The Series 2011 Bonds shall be redeemed prior to maturity, in whole or in part, on any interest payment date, in inverse order of maturity, at a redemption price equal to 100% of the principal amount of the Series 2011 Bonds being redeemed, plus accrued interest to the date of redemption, from unexpended proceeds of the Series 2011 Bonds (if such unexpended proceeds equal or exceed $100,000) in the Project Fund not needed for paying Project Costs; and (iii) The Series 2011 Bonds maturing on December 1, 20_, are subject to mandatory sinking fund redemption prior to maturity in part, on December 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* 20 $ 20 $ 20 $ 20 $ 20_ (maturity) $ *Preliminary, subject to change. At its option, to be exercised on or before the 45`h day next preceding any mandatory sinking fund redemption date for any Series 2011 Bonds maturing December 1, 20_ (the "20_ Term Bonds"), the City may deliver to the Trustee for cancellation 20_ Term Bonds, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such 20_ 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 20_ Term Bonds in chronological order, and the principal amount of such 20_ Term Bonds so to be redeemed shall be accordingly reduced. (iv) The Series 20_ Bonds maturing on December 1, 20_, are subject to mandatory sinking fund redemption prior to maturity in part, on December 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* 20 $ 20 $ 20 $ 20_ (maturity) $ *Preliminary, subject to change. At its option, to be exercised on or before the 45`h day next preceding any mandatory sinking fund redemption date for any Series 2011 Bonds maturing December 1, 20_ (the "20 Term Bonds"), the City may deliver to the Trustee for cancellation 20_ Term Bonds, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such 20_ 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 20_ Term Bonds in chronological order, and the principal amount of such 20_ Term Bonds so to be redeemed shall be accordingly reduced. Partial Redemption of a Series 2011 Bond. If less than all of the Series 2011 Bonds of a maturity are called for redemption, the particular Series 2011 Bonds or portions of Series 2011 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 2011 Bonds, the procedures established by DTC shall control with respect to the selection of the particular Series 2011 Bonds to be redeemed. Notice of Redemption. Notice of the call for any redemption, identifying the Series 2011 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 2011 Bonds, by any other means acceptable to DTC, including facsimile) to the registered owner of each such Series 2011 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 2011 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 or equipping of parking related "capital improvements" (as defined in the Act), (ii) refunding the Series 2011 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 2011 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. 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 (I) in the case of Additional Bonds to finance Project Costs, a statement by a Qualified Accountant reciting the opinion, based upon necessary investigation, that Net Parking Revenues for the Fiscal Year immediately preceding the Fiscal Year in which such Additional Bonds are to be issued were not less than (i) 125% of the average Annual Debt Service on all then outstanding Bonds and Subordinate Obligations 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, and (II) in the case of Additional Bonds to refund the Series 2011 Bonds or any series of Additional Bonds, a Certificate of the Mayor stating that, after taking into account the issuance of the Additional Bonds and the application of the proceeds thereof and other available funds to the refunding, the average Annual Debt Service on all outstanding Bonds and Subordinate Obligations will not be increased. If any changes have been made, and are in effect on the date of issuance of the Additional Bonds, in any parking fees, leases, rents, fines or charges imposed by the City which were not in effect during the entire preceding Fiscal Year, the Qualified Accountant may, if such changes resulted in increases in such fees, leases, rents, charges and fines, and shall, if such changes resulted in reductions in such fees, leases, rents, fines or charges, adjust the Parking Revenues for the preceding Fiscal Year to reflect any changes in such Parking Revenues which would have occurred if the changed fees, leases, rents, fines and charges had been in effect during the entire preceding Fiscal Year. Notwithstanding any of the foregoing, no Additional Bonds shall be issued unless there is no default existing at the time of issuance under the Indenture. Subordinate Obligations. Nothing in the Indenture shall prevent the City from authorizing and issuing bonds, notes, bond anticipation notes, warrants, certificates or other obligations or evidences of indebtedness, the payment of the principal of and premium, if any, and interest on which shall be made from Parking Revenues or from a special fund to be established and maintained from Parking Revenues, provided payments from Parking Revenues or from Parking Revenues into such special fund, and the lien and charge on such Parking Revenues, shall be made junior and subordinate to the lien, pledge and charge created in the Indenture for the security and payment of the Series 2011 Bonds and other payments under the Indenture. Notwithstanding anything herein to the contrary, no Subordinate Obligations shall be issued unless there is no default at the time of issuance under the Indenture. Transfer or Exchange. The Series 2011 Bonds may be transferred on the books of registration kept by the Trustee by the registered owner in person or by the owner's duly authorized attorney, upon surrender thereof, together with a written instrument of transfer duly executed by the registered owner or the owner's duly authorized attorney. Upon surrender for transfer of any Series 2011 Bond at the principal corporate office of the Trustee, the City shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Series 2011 Bond or Bonds in the same aggregate principal amount and of any authorized denomination or denominations. Transfers of registration or exchanges of Series 2011 Bonds shall be without charge to the Holders of such Series 2011 Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Holder of the Series 2011 Bond requesting such transfer or exchange as a condition precedent to the exercise of such privilege. The Trustee shall not be required to transfer or exchange any Series 2011 Bond during the period from and including a Record Date to the next succeeding interest payment date of such Series 2011 Bond nor to transfer or exchange any Series 2011 Bond after the mailing of notice calling such Series 2011 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 2011 Bonds, transfers of beneficial interests in the Series 2011 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 SERIES 2011 BONDS General. The Series 2011 Bonds are special obligations of the City secured solely by and payable from the Net Parking Revenues. In the Indenture, "Net Parking Revenues" are defined as Parking Revenues less Operation and Maintenance Expenses. "Parking Revenues" are all revenues attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities owned by third parties. "Operation and Maintenance Expenses" means all reasonable and necessary costs and expenses incurred in the operation, maintenance, repair and insuring of the City's parking meters, lots and other parking facilities which are properly accounted for such purposes under generally accepted accounting principles, 4 including debt service on debt incurred to acquire parking equipment prior to the date of the Indenture. Such term does not include Debt Service on the Bonds or Subordinate Obligations or depreciation expense. The fees, rents, fines and charges from which the Net Parking Revenues are derived have been imposed by the City pursuant to various ordinances adopted by the City Council. The Net Parking Revenues have been pledged to secure the payment of Debt Service on the Series 2011 Bonds pursuant to Ordinance No. , duly adopted by the City Council of the City on , 2011 (the "Authorizing Ordinance"). Set forth below is a table showing the City's Parking Revenues, Operation and Maintenance Expenses and Net Parking Revenues over the last five years. Year Parking Revenues(2) O&M Expenses Net Parking Revenues 2007 $ 466,565 $ 363,794 $ 102,771 2008 431,019 377,501 53,518 2009 405,896 389,856 16,040 2010 766,659 525,841 240,818 2011 (1) 1,043,585 523,127 520,458 (1) Through September 30, 2011. (2) Includes revenues received by the City for management of parking areas owned by third parties; $28,805 in 2007, $30,273 in 2008, $32,437 in 2009, $29,930 in 2010 and $37,782 in 2011 to date. [EXPLAIN CREATION OF THE ENTERTAINMENT PARKING DISTRICT AND ITS IMPACT] The Series 2011 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 2011 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 2011 Bonds, except as described herein with respect to the Net Parking Revenues. The City has covenanted that the fees, leases, rents, fines and charges generating the Parking Revenues will not be reduced from current levels while any of the Series 2011 Bonds are Outstanding unless there is obtained from a Qualified Accountant a certificate to the effect that Net Parking Revenues in the then current and immediately succeeding Fiscal Years, with the reduced fees, leases, rents, fines or charges, will be at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding Fiscal Years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. The City has further covenanted that the fees, leases, rents, fines and charges generating the Parking Revenues shall, if and when necessary, from time to time, be increased in such a manner as will produce Net Parking Revenues in the then current and immediately succeeding Fiscal Years at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding Fiscal Years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. Debt Service Reserve. From the proceeds of sale of the Series 2011 Bonds, there shall be deposited into the Debt Service Reserve Fund an amount sufficient to cause the amount on deposit therein to be equal to the least of (i) the maximum Annual Debt Service with respect to the Series 2011 Bonds, (ii) 125% of the average Annual Debt Service with respect to the Series 2011 Bonds, or (iii) 10% of the stated original principal amount of the Series 2011 Bonds (the "Reserve Requirement"). Amounts on deposit in the Debt Service Reserve Fund shall be used solely to pay the principal of and interest on the Series 2011 Bonds as due for which there are no available funds in the Bond Fund to make such payments. The Reserve Requirement may be satisfied by cash or by Investment Securities. If the amount in the Debt Service Reserve Fund is ever reduced below the Reserve Requirement, it shall be reimbursed to an amount equal to the Reserve Requirement through monthly payments, beginning not later than the last day of the month in which the Debt Service Reserve Fund was reduced below the Reserve Requirement, and continuing not later than the last day of each month thereafter until such reimbursement shall have been accomplished, from any funds in the Revenue Fund (after making the required deposits into the Bond Fund, as provided in the Indenture). If a surplus shall exist in the Debt Service Reserve Fund over and above the Reserve Requirement, such surplus shall be deposited into the Bond Fund. BOOK -ENTRY ONLY SYSTEM The Series 2011 Bonds will be issued only as one fully registered Series 2011 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 2011 Bonds. The fully registered Series 2011 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 2011 Bonds. Owners of any book entry interests in the Series 2011 Bonds (the "book entry interest owners") described below, will not receive or have the right to receive physical delivery of the Series 2011 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 2011 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 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book - entry transfers and pledges among Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, the National Securities Clearing Corporation and the Fixed Income Clearing Corporation, all of which are registered agencies. DTTC 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 2011 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2011 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2011 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 2011 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 2011 Bonds, except in the event that use of the Book -Entry System for the Series 2011 Bonds is discontinued. To facilitate subsequent transfers, all Series 2011 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 2011 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 2011 Bonds, DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2011 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 2011 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 2011 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 2011 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 2011 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 14AVE 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 2011 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 2011 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 2011 Bonds made to DTC or its nominee as the registered owner of the Series 2011 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 2011 Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, bond certificates are required to be printed and delivered. In addition, the City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered. THE PROJECT A portion of the proceeds of the Series 2011 Bonds will be used to accomplish the acquisition, construction and equipping of multi -level parking deck facilities and related roadway and other improvements (the "Project"). The Project improvements will be located within the City's Entertainment District Parking Zone and will have an estimated capacity of approximately 300 vehicle spaces. 7 ESTIMATED SOURCES AND USES OF FUNDS The proceeds of the Series 2011 Bonds are expected to be used as follows: Sources of Funds(i) Par Amount of Series 2011 Bonds $ Total Sources: $ Uses of Funds(l) Deposit to Project Fund $ Deposit to Debt Service Reserve Costs of Issuance and Underwriter's Discount Total Uses: $ Preliminary; subject to change. ESTIMATED DEBT SERVICE REQUIREMENTS As of the date of closing, the Series 2011 Bonds will constitute the only debt obligations secured by the Net Parking Revenues. The following table sets forth estimates of the amounts required to pay scheduled principal of and interest on the Series 2011 Bonds during each year: Total Debt Year Principal(') Interest(Z) Service 2012 $ $ $ 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Totals: $ k'J Includes mandatory sinking fund redemptions. (2) Preliminary; subject to change. Assuming for purposes of this Preliminary Official State, an average coupon rate on the Series 2011 Bonds of _% per annum. 8 ESTIMATED DEBT SERVICE COVERAGE The following table shows estimated maximum annual debt service coverage with respect to the Series 2011 Bonds utilizing the most recent twelve months of Net Parking Revenues. Historical Net Parking Revenues(') $593,989 Maximum Annual Debt Service Requirement on Series 2011 Bonds(2) $ Maximum Annual Debt Service Coverage X V) Net Parking Revenues for the twelve-month period from October 1, 2010 to September 30, 2011. (2) Preliminary; subject to change. See the caption "ESTIMATED DEBT SERVICE REQUIREMENTS" herein. THE COVERAGE NUMBERS SET FORTH ABOVE ARE BASED ON HISTORICAL NET PARKING REVENUES. ACTUAL RECEIPTS OF PARKING REVENUES AND THE LEVEL OF OPERATION AND MAINTENANCE EXPENSES WILL DEPEND ON NUMEROUS FACTORS, AND THERE CAN BE NO ASSURANCE THAT FUTURE NET PARKING REVENUES AVAILABLE TO PAY DEBT SERVICE ON THE SERIES 2011 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 540, U.S. Highways 62 and 71, and State Highways 16, 45, 112, 156, 180 and 265. The Burlington Northern Railroad has several lines running through the City, and a general aviation airport with a 6,006-foot runway is available for limited commuter travel. The Northwest Arkansas Regional Airport is located approximately 40 minutes from downtown Fayetteville and provides daily flights to numerous venues. Government. The City currently operates under the Mayor -Council form of government pursuant to which a mayor, city attorney, city clerk and eight aldermen are elected, two from each of the City's four wards. The mayor, city attorney and city clerk are full-time positions elected to four year terms. Aldermen also serve four year terms. The City's elected officials and the dates on which their respective terms expire are as follows: Name Office Term Expires Lioneld Jordan Mayor 12/31/12 Kit Williams City Attorney 12/31/14 Sondra Smith City Clerk 12/31/12 Rhonda Adams Alderman 12/31/14 Brenda Boudreaux Alderman 12/31/12 Bobby Ferrell Alderman 12/31/12 Adella Gray Alderman 12/31/14 Mark Kinion Alderman 12/31/14 Sarah Lewis Alderman 12/31/12 Matthew Petty Alderman 12/31/12 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: 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 Economic Data. Per capita personal income figures for the MSA and the State of Arkansas are as follows: State of Year MSA Arkansas 2000 $22,828 $22,577 2001 24,061 23,870 2002 24,658 24,273 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 n/a 31,946 Source: Discover Arkansas, Data Analysis. Retail sales figures for the MSA and the State are as follows: State of MSA as % of Year MSA Arkansas State of Arkansas 2000 $3,526,791,000 $28,488,033,000 12.38% 2001 3,806,422,000 29,652,693,000 12.84 2002 3,841,326,000 29,269,775,000 13.12 2003 3,968,812,000 29,920,716,000 13.26 2004 4,610,051,000 31,463,983,000 14.65 2005 5,287,158,000 34,290,412,000 15.42 2006 7,251,810,000 38,843,312,000 18.70 2007 8,250,140,000 43,504,752,000 18.96 2008 2009 2010 Source: 2007 Demographics USA. 10 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 2000 $432,951,171 $145,147,891 $578,099,062 2001 486,853,822 155,794,579 642,648,401 2002 530,235,135 158,778,031 689,013,166 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 Source: Washington County Tax Assessor's Office. The assessed value represents 20% of the appraised value of property. Building permits issued by the CityM are shown below for the years indicated: 2006 2007 2008 2009 2010 Residential Building 544 593 414 281 256 Permits Commercial Building 44 59 57 14 16 Permits Value of All Building Permits $198,754,023 $227,667,201 $127,477,937 $ 70,365,173 $ 79,103,682 (1) Does not include building activity of the University of Arkansas, school permits and additions/alterations to existing structures. 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 2000 2.9% 4.2% 2001 3.0 4.7 2002 3.3 5.3 2003 3.7 5.8 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 6.6 8.0 * August, 2011 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 2011 of approximately 23,199. On the Fayetteville campus, the University employs approximately 4,008 faculty, administrative, secretarial, clerical and maintenance personnel in both full-time and part-time positions, making the University the largest employer in the City. 11 Other major employers in the City, their products or services and approximate number of employees are set forth below: Employer Washington Regional Med Center Washington Co. Government Fayetteville School District Veteran's Admin. Medical Superior Industries City of Fayetteville Arvest Bank Ayrshire Source Gas/Arkansas Western Gas Source: 2010 City of Fayetteville CAFR. Product or Service Employees Hospital 2,000 Government 1,350 Education 1,300 Hospital 1,212 Transportation equipment 880 Government 756 Banking 275 Electronics 214 Utility 207 DEFINITIONS OF CERTAIN TERMS The following are definitions of certain terms used in this Official Statement: "Act" means the Local Government Capital Improvement Revenue Bond Act of 1985, codified as Arkansas Code Annotated (1998 Repl. & Supp. 2011) Sections 14-164-401 et seq., as from time to time amended. "Additional Bonds" means Bonds in addition to the Series 2011 Bonds which are issued under the provisions of Section 213 of the Indenture. "Amendment 65" means Amendment No. 65 to the Constitution of Arkansas, approved by the voters of the State on November 4, 1986. "Annual Debt Service" means, with respect to all or any particular amount of Bonds or Subordinate Obligations, as the case may be, the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the amount of such payment which is provided from the proceeds of the sale of the Bonds or Subordinate Revenues or from sources other than Net Parking Revenues. "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. adopted by the City Council on , 2011, which authorized the issuance of the Series 2011 Bonds pursuant to the Indenture. "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" means the Series 2011 Bonds and all Additional Bonds issued by the City pursuant to the Indenture. "Book -Entry System" means the book -entry system maintained by the Securities Depository and described in the Indenture. "Business Day" means any day other than (a) a Saturday or Sunday, (b) a day on which commercial banks in New York, New York, or the city in which the corporate trust office of the Trustee is located are authorized by law or executive order to close, or (c) a day on which the New York Stock Exchange or the Securities Depository are closed. 12 "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. "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. "Continuing Disclosure Agreement" means the Continuing Disclosure Agreement between the City and Simmons First Trust Company, N.A., as dissemination agent, dated the date of issuance and delivery of the Series 2011 Bonds, as originally executed and as amended from time to time in accordance with the terms thereof. "Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Series 2011 Bonds, including, but not limited to, underwriting discounts, fees and expenses, publication expenses, expenses of printing, reproducing, filing and recording documents, initial fees and charges of the Trustee and any Paying Agent, fees and expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement for the Series 2011 Bonds, costs of execution, transportation and safekeeping of the Series 2011 Bonds, and other costs, charges and fees incurred in connection with the foregoing. "Costs of Issuance Fund" means the fund by that name created and established in the Indenture. "Debt Service" means, with respect to all or any particular amount of Bonds or Subordinate Obligations, as the case may be, the total as of any particular date of computation and for any particular period of the scheduled amount of interest and amortization ,of principal payable on such Bonds or Subordinate Obligations, excluding amounts scheduled during such period which relate to principal which has been retired before the beginning of such period. "Debt Service Reserve Fund" means the fund by that name created and established in the Indenture. "Depository" means a national or state banking corporation or association (which may include the Trustee and any Paying Agent) which holds membership in the Federal Deposit Insurance Corporation. "Event of Default" means any event of default specified in Section 901 of the Indenture. "Fiscal Year" means the 12-month period used, at any time, by the City for accounting purposes, which may be the calendar year. "Fund" means a fund established by the Indenture. "Government Securities" means direct obligations of, or obligations fully guaranteed as to principal and interest by, the United States of America or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the United States of America (including obligations issued or held in book -entry form on the books of the U.S. Department of Treasury). "Holder" or "Bondholder" or "owner of the Bonds" means the registered owner of any Bond. "Indenture" means the Trust Indenture dated as of December 1, 2011, between the City and the Trustee, pursuant to which the Bonds are issued, and any amendments and supplements thereto. "Investment Securities" means, if and to the extent the same are at the time legal for investment of funds held under the Indenture: (a) Cash (insured at all times by the Federal Deposit Insurance Corporation); (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, including: (1) U.S. Export -Import Bank (Eximbank); 13 (2) Rural Economic Community Development Administration; (3) U.S. Maritime Administration; (4) Small Business Administration; (5) U.S. Department of Housing & Urban Development (PHAs); (6) Federal Housing Administration (FHA); and (7) Federal Financing Bank; (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: (1) Senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC); (2) Obligations of the Resolution Funding Corporation (REFCORP); and (3) Senior debt obligations of the Federal Home Loan Bank System; (e) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by the FDIC; (f) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "P-l" by Moody's and "A-l" or "A-1+" by S&P and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (g) Commercial paper which is rated at the time of purchase in the single highest classification, "P-1" by Moody's and "A-1+" by S&P and which matures not more than 270 calendar days after the date of purchase; (h) Investments in money market funds rated "AAAm" or "AAAm-G" or better by S&P; (i) 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 (1) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Moody's or S&P or any successors thereto; or (2) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or Government Securities, 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; and 0) Municipal Obligations rated "Aaa/AAA" or general obligations of States with a rating of "A2/A" or higher by both Moody's and S&P. "Mayor" means the person holding the office and performing the duties of the Mayor of the City. "Moody's" means Moody's Investors Service, Inc., and any successor thereto. "Net Parking Revenues" means Parking Revenues less Operation and Maintenance Expenses. 14 "Operation and Maintenance Expenses" means all reasonable and necessary costs and expenses incurred in the operation, maintenance, repair and insuring of the City's parking meters, lots and other parking facilities which are properly accounted for such purposes under generally accepted accounting principles, including debt service on debt incurred to acquire parking equipment prior to the date of the Indenture. Such term does not include Debt Service on the Bonds and Subordinate Obligations or depreciation expense. "Original Purchaser" means the first purchaser(s) of a series of Bonds from the City. "Outstanding" means, when used with reference to the Bonds, as of any particular date, the aggregate of all Bonds authenticated and 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 VIII 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. "Parking Revenues" means all revenues attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities owned by third parties. "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. "Paying Agent" means any bank or trust company named by the City as the place at which the principal of and premium, if any, and interest on the Bonds are payable. "Person" means any natural person, firm, association, corporation, limited liability company, partnership, joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Project" means the betterments and improvements to be financed with the proceeds of the Series 2011 Bonds. "Project Costs" means, to the extent permitted by the Act or other applicable laws, with respect to the 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) 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 the Project and placing the same in operation; (b) all costs relating to injury and damage claims arising out of the acquisition, construction or equipping of the Project; (c) all other costs incurred in connection with, and properly allocable to, the acquisition, construction and equipping of the Project; and (d) amounts to pay or reimburse the City or any City fund for expenses of the City incident and properly allocable to such planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation of the Project. "Project Fund" means the fund by that name created and established in the Indenture. "Qualified Accountant" means an independent certified public accountant or firm of independent certified public accountants not in the regular employ of the City. "Rebate Fund" means the fund by that name created and established in the Indenture. 15 "Record Date" means, with respect to any interest payment date on the Bonds, the fifteenth day of the calendar month next preceding the month in which such interest payment date occurs. "Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized Representative in the form of Exhibit B to the Indenture. "Reserve Requirement" means, with respect to each series of Bonds, an amount equal to the least of (i) the maximum Annual Debt Service with respect to such series of Bonds, (ii) (ii) 125% of the average Annual Debt Service with respect to such series of Bonds, or (iii) 10% of the stated original principal amount of such series of Bonds. For all purposes of the Indenture, the Reserve Requirement may be satisfied by cash or by Investment Securities. "Revenue Fund" means the fund by that name created and established in the Indenture. "S&P" means Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc., and any successor thereto. "Securities Depository" means The Depository Trust Company, New York, New York, or its nominee, and its successors and assigns, or any other depository institution appointed by the City or the Trustee to act as depository for the Bonds in connection with the Book -Entry System. "Series 2011 Bonds" means the City's Parking Revenue Improvement Bonds, Series 2011, issued under and secured by the Indenture in the original aggregate principal amount of $ * for the purpose of financing the Project. "State" means the State of Arkansas. "Subordinate Obligations" means debt obligations of the City secured by a pledge of the Net Parking Revenues that is subordinate to the lien thereon securing the payment of the Bonds, as permitted by the provisions of Section 215 of the Indenture. "Supplemental Indenture" means any indenture supplemental to or amendatory of the Indenture. "Tax Regulatory Agreement" means that Tax Regulatory Agreement of the City relating to maintenance of the excludability of interest on the Series 2011 Bonds from gross income for federal income tax purposes, delivered in connection with the issuance of the Series 2011 Bonds. "Trustee" means the banking corporation or association designated as Trustee in the Indenture, and its successor or successors as such Trustee. The original Trustee is Simmons First Trust Company, N.A., Pie Bluff, Arkansas. "Trust Estate" means the property described in the granting clauses of the Indenture. * Preliminary; subject to change. SUMMARY OF THE INDENTURE The following statements are brief summaries of certain provisions of the Indenture. The statements do not purport to be complete, and reference is made to the Indenture, copies of which are available for examination at the offices of the Finance Director of the City, for a full statement thereof. Funds and Accounts. Net Parking Revenues are pledged by the Indenture to the payment of the principal of and interest on the Series 2011 Bonds. The following Funds have been created and established in connection with the Series 2011 Bonds: Funds Revenue Fund Bond Fund Debt Service Reserve Fund Project Fund Cost of Issuance Fund Rebate Fund 16 The Revenue Fund shall be maintained by the City with the Depository of its choice. All other Funds shall be held by the Trustee, which shall hold and maintain said Funds in trust, for the use and benefit of the Bondholders and the City, but subject to the permitted applications contained in the Indenture. Application of Parking Revenues. The application of Parking Revenues is as follows: (a) Revenue Fund. All Parking Revenues shall, as and when received, be deposited into the Revenue Fund. So long as there is no Event of Default or the occurrence or continuance of an event which with notice or lapse of time or both would constitute an Event of Default, the City may utilize moneys in the Revenue Fund for the payment of Operation and Maintenance Expenses, and may utilize any surplus in the Revenue Fund (after the payment of Operation and Maintenance Expenses and after making the transfers required by subsections (b) through (d) below) for any valid governmental purpose under State law. All moneys at any time in the Revenue Fund shall be applied on a monthly basis to 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. No later than the last day of each month, commencing no later than [December 31, 2011], there shall be transferred from the Revenue Fund (i) into the Bond Fund, an amount equal to 1/6 of the interest on the Bonds due on the next interest payment date and an amount equal to 1/12 of the principal on the Bonds due on the next principal payment date (including mandatory sinking fund redemptions). Moneys in the Bond Fund shall be used solely for the purpose of paying Annual Debt Service on the Bonds or for redemption of 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 Parking Revenues 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 not later than last day of the next succeeding month. (c) Debt Service Reserve Fund. See the caption "SECURITY FOR THE SERIES 2011 BONDS — Debt Service Reserve" herein. (d) Rebate Fund. The Trustee shall establish and maintain, separate and apart from any other Funds 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. (e) Project Fund. A portion of the proceeds of the Series 2011 Bonds shall be deposited in the Project Fund. See the caption "ESTIMATED SOURCES AND USES OF FUNDS" herein. Amounts in the Project Fund shall be expended only for the payment of Project Costs upon the submission of Requisitions by the City to the Trustee. The Trustee shall only make payments from the Project Fund pursuant to and in accordance with Requisitions. Within ninety (90) days following completion of the Project, the City shall deliver to the Trustee its Certificate stating that the Project is complete and the Trustee shall transfer the remaining moneys in the Project Fund (save and except moneys needed to satisfy unpaid Project Costs) to the Bond Fund for application to the retirement of the Series 2011 Bonds by redemption or purchase. See the caption "THE SERIES 2011 BONDS — Redemption" herein. (f) Cost of Issuance Fund. A portion of the proceeds of the Series 2011 Bonds shall be deposited to the credit of the Cost of Issuance Fund. The Trustee shall pay those Costs of Issuance as directed by the City pursuant to a Certificate delivered on a Closing Date. After all Costs of Issuance have been paid with respect to the Series 2011 Bonds, any remaining moneys in the Cost of Issuance Fund shall be transferred to the Bond Fund. Investment of Funds. At the direction of the City or absent such direction, the Trustee shall invest moneys in Funds held by the Trustee in Investment Securities with maturity or redemption dates consistent with the times at which said moneys will be required for the purposes provided in the Indenture; provided, however, the stated maturities of Investment Securities in the Debt Service Reserve Fund shall not exceed five years from the date of investment thereof. Moneys in separate Funds may be commingled for the purpose of investment. The City may invest moneys held in the Revenue Fund in any investment obligations permitted by Arkansas law. 17 Obligations purchased as an investment of moneys in any Fund created by the Indenture shall be deemed at all times to be a part of such Fund, and any income or loss due to an investment thereof shall be charged to the respective Fund for which the investment was made except as otherwise provided in the Indenture. Valuation of Funds and Accounts. Investments in any Fund held by the Trustee shall be evaluated monthly and the determined value reported to the City. In determining the value of any Fund held by the Trustee under the Indenture, the Trustee shall credit Investment Securities at the fair market value thereof based on accepted industry standards and from accepted industry providers. The Trustee shall sell or present for redemption any Investment Securities as necessary in order to provide money for the purpose of making any payment required under the Indenture, and the Trustee shall not be liable for any loss resulting from any such sale. Responsibility of Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of moneys made by it at the direction of the City. Tax Covenants. The City shall not use or permit the use of any Series 2011 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 Series 2011 Bond from gross income for federal income tax purposes. No part of the proceeds of the Series 2011 Bonds shall at any time be used, directly or indirectly, to acquire securities or obligations the acquisition of which would cause any of such Series 2011 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 Series 2011 Bonds remain Outstanding, it will comply with the provisions of the Tax Regulatory Agreement. Defeasance. Any Series 2011 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 Series 2011 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 Series 2011 Bonds or cause any of the Series 2011 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 Series 2011 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 18 (e) If the State has limited or altered the rights of the City pursuant to the Act, as in force on the date of the Indenture, to fulfill the terms of any agreements made with the Trustee or the Bondholders or in any way impaired the rights and remedies of the Trustee or the Bondholders while any Bonds are Outstanding. The term "default" as used in clauses (a), (b) and (c) above shall mean default by the City in the performance or observance of any of the covenants, agreements or conditions on its part contained in the Indenture, or in the Bonds Outstanding thereunder, exclusive of any period of grace required to constitute a default an "Event of Default" as described above. Acceleration. Upon the occurrence of an Event of Default, the Trustee may, and upon the written request of the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding shall, by notice in writing delivered to the City, declare the principal of all Bonds then Outstanding, together with any premium and the interest 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. No remedy by the terms of the Indenture conferred upon or reserved to the Trustee (or to the Bondholders) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given under the Indenture or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or acquiescence therein; and every such right and power may be exercised from time to time and as often as may be deemed expedient. No waiver of any default or Event of Default under the Indenture, whether by the Trustee or by the Bondholders, shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. Rights and Remedies of Bondholders. No Holder of any Bond shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of the Indenture or for the execution of any trust thereof or for the appointment of a receiver or any other remedy thereunder, unless a default has occurred of which the Trustee has been notified as provided in the Indenture, or of which by the Indenture it is deemed to have notice, nor unless such default shall have become an Event of Default and the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding shall have made written request to the Trustee and shall have offered it reasonable opportunity either to proceed to exercise the powers granted or to institute such action, suit, or proceeding in its own name, nor unless also they have offered to the Trustee indemnity as provided in the Indenture nor unless the Trustee shall thereafter fail or refuse to exercise the powers granted, or to institute such action, suit, or proceeding in its own name; and such notification, request and offer of indemnity are declared in every such case at the option of the Trustee to be conditions precedent to the execution of the powers and trusts of the Indenture, and to any action or cause of action for the enforcement of the Indenture or for the appointment of a receiver or for any other remedy thereunder; it being understood and intended that no one or more Holders of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of the Indenture by action of the Holder or Holders or to enforce any right under the Indenture except in the manner therein provided, and that all proceedings at law or in equity shall be instituted, held and maintained in the manner therein provided for the equal benefit of the Holders of all Bonds Outstanding thereunder. Nothing in the Indenture contained shall, however, affect or impair the right of any Bondholders to enforce the payment of the principal of and premium, if any, and interest on any Bonds at and after the maturity thereof, or the obligation of the City to pay the principal of and premium, if any, and interest on each of the Bonds issued under the Indenture to the respective Holders thereof at the time and place in said Bonds expressed. Supplemental Indentures Not Requiring Consent of Bondholders. The City and the Trustee may, from time to time and at any time, without the consent of or notice to the Bondholders, enter into Supplemental Indentures as follows: T (a) to cure any formal defect, omission, inconsistency or ambiguity in the Indenture; (b) to grant to or confer or impose upon the Trustee for the benefit of the Bondholders any additional rights, remedies, powers, authority, security, liabilities or duties which may lawfully be granted, conferred or imposed and which are not contrary to or inconsistent with the Indenture as theretofore in effect, provided that no such additional liabilities or duties shall be imposed upon the Trustee without its consent; (c) to add to the covenants and agreements of, and limitations and restrictions upon, the City in the Indenture other covenants, agreements, limitations and restrictions to be observed by the City which are not contrary to or inconsistent with the Indenture as theretofore in effect; (d) to confirm, as further assurance, any pledge under, and the subjection to any claim, lien or pledge created or to be created by, the Indenture, of the Trust Estate or of any other moneys, securities or funds; (e) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time amended; (f) to authorize the issuance and sale of one or more series of Additional Bonds; (g) to make such additions, deletions or modifications as may be necessary to assure compliance with Section 148(f) of the Code relating to required rebate to the United States or otherwise as may be necessary to assure exemption from federal income taxation of interest on the Bonds; or (h) to modify, alter, amend or supplement the Indenture in any other respect which is not materially adverse to the Bondholders and which does not involve a change described in clause (a), (b), (c), (d), (e) or (f) above and which, in the judgment of the Trustee, is not to the prejudice of the Trustee. Supplemental Indentures Requiring Consent of Bondholders. Subject to the terms and provisions contained in this paragraph, and not otherwise, the Holders of not less than 2/3 in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in the Indenture to the contrary notwithstanding, to consent to and approve the execution by the City and the Trustee of such indenture or indentures supplemental to the Indenture as shall be deemed necessary and desirable by the City for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in the Indenture or in any Supplemental Indenture; provided, however, that nothing contained in the Indenture shall permit or be construed as permitting (a) an extension of the maturity (or mandatory redemption date) of the principal of or the interest on any Bond issued thereunder, or (b) a reduction in the principal amount of or redemption premium or rate of interest on any Bond issued thereunder, or (c) the creation of any lien on the Trust Estate or any part thereof, except as expressly permitted in the Indenture, or (d) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture, or (f) depriving the Holder of any Bond then Outstanding of the lien created on the Trust Estate. If, at any time the City shall request the Trustee to enter into any Supplemental Indenture for any of the purposes described above, the Trustee shall, at the expense of the City, cause notice of the proposed execution of such Supplemental Indenture to be mailed by first class mail to each registered owner of the Bonds. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the principal office of the Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such Supplemental Indenture when consented to and approved as provided above. If the Holders of not less than 2/3 in aggregate principal amount of the Bonds Outstanding at the time of the execution of any such Supplemental Indenture shall have consented to and approved the execution thereof, no Holder of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from executing the same or from taking any action pursuant to the provisions thereof. SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT The City has entered into an undertaking in the form of the Continuing Disclosure Agreement as required by the Indenture for the benefit of the Beneficial Owners of the Series 2011 Bonds to cause certain financial information to be sent to certain information repositories annually and to cause notice to be sent to such information repositories of certain specified events, pursuant to the requirements of Section (b)(5)(i) of Rule 15c2-12 of the Securities Exchange Act of 1934, as amended (the "Rule"). The City has not failed to comply with any previous undertaking pursuant to the Rule. 20 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 and the Audited Financial Statements to the MSRB within 180 days of the completion of the City's fiscal year. 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. (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 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, of Material Events Disclosure to the MSRB in Prescribed Form. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Series 2011 Bonds or defeasance of any Series 2011 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 2011 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 2011 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 2011 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 2011 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, 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 2011 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 2011 Bonds holding a majority of the aggregate principal amount of the Series 2011 Bonds (excluding Series 2011 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: 21 "Annual Financial Information" means financial information and operating data (exclusive of Audited Financial Statements) of the type appearing under the caption "SECURITY FOR THE SERIES 2011 BONDS" in the final Official Statement. "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 2011 Bonds (including persons holding Series 2011 Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2011 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., 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. 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 2011 (i) Principal and interest payment delinquencies; (ii) Nonpayment -related defaults, if material; (iii) Unscheduled draws on debt service reserves reflecting financial difficulties; (iv) Unscheduled draws on credit enhancements reflecting financial difficulties; (v) Substitution of credit or liquidity providers, or their failure to perform; (vi) 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; (vii) Modifications to rights of security holders, if material; (viii) Bond calls, if material, and tender offers; (ix) Defeasances; (x) Release, substitution or sale of property securing repayment of the securities, if material; (xi) Rating changes; (xii) Bankruptcy, insolvency, receivership or similar event of the City; (xiii) 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; and (xiv) 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. 22 "Participating Underwriter" means each broker, dealer or municipal securities dealer acting as an underwriter in any primary offering of the Series 2011 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 obligations 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. (the "Underwriter"), the Series 2011 Bonds are being purchased at a purchase price of $ (representing the stated principal amount of the Series 2011 Bonds less an underwriting discount of $_) plus accrued interest from December 1, 2011 to the date of delivery of the Series 2011 Bonds. The bond purchase agreement provides that the Underwriter will purchase all of the Series 2011 Bonds if any are purchased. The obligation of the Underwriter to accept delivery of the Series 2011 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 2011 Bonds or the Parking Revenues 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 2011 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 2011 Bonds to the public, and may offer the Series 2011 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 2011 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 2011 Bonds is excluded from the 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 2011 Bonds. Failure to comply with such requirements could cause interest on the Series 2011 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2011 Bonds. The City has covenanted to comply with such requirements. Notwithstanding Bond Counsel's opinion that interest on the Series 2011 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). Bank Qualification. The City has represented that it does not reasonably anticipate issuing greater than $10,000,000 of tax-exempt obligations in calendar year 2011 (excluding certain private activity and refunding bonds) and that it has designated the Series 2011 Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. Accordingly, Bond Counsel is of the opinion that in the case of certain banks, thrift institutions or other financial institutions owning the Series 2011 Bonds, a deduction is allowed for 80% of that portion of such institutions' interest expense allocable to interest on the Series 2011 Bonds. Bond Counsel has expressed no opinion with respect to any deduction for federal income tax purposes of interest incurred or continued by a holder of the Series 2011 Bonds or a related person to purchase or carry the Series 2011 Bonds 23 Bond Counsel has expressed no opinion regarding other federal tax consequences arising with respect to the Series 2011 Bonds. The accrual or receipt of interest on the Series 2011 Bonds may otherwise affect the federal income tax liability of the owners of the Series 2011 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 2011 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 2011 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 2011 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 2011 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 Tax Law. From time to time, there are legislative proposals in the Congress that, if enacted, could alter or amend the federal tax matters referred to above or adversely affect the market value of the Series 2011 Bonds. An example is the American Jobs Act of 2011, proposed by President Obama on September 12, 2011 and introduced in the United States Senate on September 13, 2011. If enacted as introduced, a provision of the American Jobs Act of 2011 would limit the amount of exclusions (including tax-exempt interest) and deductions available to certain high income taxpayers for taxable years after 2012, and as a result could affect the market price or marketability of the Series 2011 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 2011 Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Series 2011 Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2011 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 and regulatory authorities as of the date of issuance and delivery of the Series 2011 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 laws, regulations, rulings and judicial decisions, interest on the Series 2011 Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. LEGAL MATTERS Legal Opinions. Legal matters incident to the authorization and issuance of the Series 2011 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 2011 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 2011 Bonds or questioning or affecting the legality of the Series 2011 Bonds or the proceedings and authority under which the Series 2011 Bonds are to be issued, or questioning the right of the City to issue the Series 2011 Bonds. [There is no action, suit or proceeding known to be pending or threatened, restraining or enjoining the City in any way which could have a material adverse effect on Parking Revenues or the City's ability to pay debt service with respect to the Series 2011 Bonds.] 24 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 2011 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. 25 The execution and delivery of this Official Statement has been duly authorized by the City of Fayetteville, Arkansas. CITY OF FAYETTEVILLE, ARKANSAS R-A Mayor 26 APPENDIX A Proposed Form of Bond Counsel Opinion Upon delivery of the Series 2011 Bonds in definitive form, Kutak Rock LLP, Little Rock, Arkansas, proposes to deliver its approving opinion in substantially the following form: December , 2011 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2011 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 $ * Parking Revenue Improvement Bonds, Series 2011 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and Arkansas Code Annotated (1998 Repl. & Supp. 2011) §§14- 164-401 et seq. (as from time to time amended, the "Local Government Revenue Bond Act"), pursuant to Ordinance No. of the City, duly adopted and approved on , 2011 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of December 1, 2011 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, 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 nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the Holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance and to enter into and perform its obligations under the Indenture, the valid adoption of the Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. A-1 Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and the Local Government Revenue Bond Act, the City is empowered to adopt the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 4. The Bonds have been validly authorized, executed, issued and delivered by the City and represent valid and binding special obligations of the City. The principal, premium, if any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and pledge by the City to the Trustee of, the Net Parking Revenues (as defined in the Indenture). 5. The Net Parking Revenues 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 Net Parking Revenues. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated (2001 Repl. & 2011 Supp.) Section 4-9-109(d)(14), the pledge, assignment and security interest in the Net Parking Revenues securing the Bonds is and shall be prior to any judicial lien hereafter imposed on said Net Parking Revenues 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 said Net Parking Revenues. 6. Interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinion described in the preceding sentence assumes the accuracy of certain representations and compliance by the City with covenants designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended, that must be met subsequent to the issuance of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with such requirements. The Bonds are "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, and, in the case of certain financial institutions (within the meaning of Section 265(b)(5) of the Code), a deduction is allowed for eighty percent (80%) of that portion of such financial institution's interest expense allocable to interest on 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 CITY OF FAYETTEVILLE, ARKANSAS to SIMMONS FIRST TRUST COMPANY, N.A. as Trustee TRUST INDENTURE Dated as of December 1, 2011 Providing for: City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2011 Prepared by: Kutak Rock LLP 124 West Capitol Avenue, Suite 2000 Little Rock, Arkansas 72201 KUTAK ROCK LLP DRAFT 10/20/11 4828-9200-1547.3 TABLE OF CONTENTS (This Table of Contents is not a part of the Trust Indenture and is only for convenience of reference.) Page_No. Parties.............................................................................................................................................. l Recitals............................................................................................................................................1 GrantingClauses............................................................................................................................. 2 ARTICLE I DEFINITIONS Section101. Definitions........................................................................................................4 Section 102. Use of Words................................................................................................. 11 ARTICLE II THE BONDS Section 201. Security for the Bonds................................................................................... 11 Section 202. Authorized Amount of the Bonds.................................................................. 11 Section 203. Details of the Bonds....................................................................................... 11 Section204. Bond Form..................................................................................................... 12 Section205. Payment.......................................................................................................... 13 Section206. Execution....................................................................................................... 13 Section 207. Limited Obligation.........................................................................................13 Section 208. Authentication................................................................................................13 Section 209. Delivery of the Bonds....................................................................................13 Section 210. Mutilated, Destroyed or Lost Bonds.............................................................. 15 Section 211. Registration and Transfer of Bonds............................................................... 15 Section212. Cancellation...................................................................................................16 Section 213. Additional Bonds........................................................................................... 16 Section 214. Superior Obligations Prohibited.................................................................... 17 Section 215. Subordinate Obligations................................................................................. 17 Section 216. Temporary Bonds........................................................................................... 18 Section 217. Book -Entry Bonds; Securities Depository..................................................... 18 ARTICLE III REDEMPTION OF BONDS BEFORE MATURITY Section 301. Redemption of Bonds....................................................................................19 Section302. Notice............................................................................................................. 21 Section 303. Selection of Bonds to be Redeemed.............................................................. 21 Section 304. Surrender of Bonds Upon Redemption.......................................................... 21 Section 305. Redemption in Part ........................................................................................ 21 Section 306. Redemption of Additional Bonds.................................................................. 22 4828-9200-1547.3 1 ARTICLE IV GENERAL COVENANTS AND REPRESENTATIONS Section 401. Payment of Principal, Premium, if any, and Interest ..................................... 22 Section 402. Performance of Covenants............................................................................. 22 Section 403. Instruments of Further Assurance.................................................................. 22 Section 404. Recordation and Filing................................................................................... 23 Section 405. Inspection of Books....................................................................................... 23 Section 406. Tax Covenants............................................................................................... 23 Section 407. Parking Fee Rates and Charges...................................................................... 23 Section 408. [RESERVED]................................................................................................ 23 Section 409. Completion of Projects; Certification of Completion Dates .......................... 24 Section 410. Encumbrances................................................................................................ 24 Section 411. Parking Revenues to be Used as Provided in Indenture ................................ 24 Section 412. Continuing Disclosure................................................................................... 24 Section 413. Representations, Warranties and Covenants Regarding Trust Estate............ 25 ARTICLE V FUNDS AND DEPOSITS Section 501. Creation of Funds........................................................................................... 25 Section 502. Project Fund....................:.............................................................................. 26 Section503. Revenue Fund................................................................................................ 27 Section504. Bond Fund...................................................................................................... 28 Section 505. Cost of Issuance Fund.................................................................................... 28 Section506. Rebate Fund................................................................................................... 28 Section 507. Debt Service Reserve Fund............................................................................ 29 Section 508. Cessation of Fund Deposits........................................................................... 30 Section 509. Separate Accounts Authorized....................................................................... 30 ARTICLE VI [RESERVED] ARTICLE VII INVESTMENTS Section 701. Investment of Moneys.................................................................................... 30 Section 702. Investment Earnings....................................................................................... 30 Section 703. Valuation of Funds......................................................................................... 31 Section 704. Responsibility of Trustee............................................................................... 31 ARTICLE VIII DISCHARGE OF LIEN Section 801. Discharge of Lien........................................................................................... 31 Section 802. Bonds Deemed Paid....................................................................................... 31 Section 803. Non -Presentment of Bonds............................................................................ 32 ARTICLE IX DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS Section 901. Events of Default........................................................................................... 32 4828-9200-1547.3 ii 5ection902. Acceleration................................................................................................... 33 Section 903. Other Remedies; Rights of Bondholders....................................................... 33 Section 904. Right of Bondholders to Direct Proceedings ................................................. 34 Section 905. Appointment of Receiver............................................................................... 34 Section906. Waiver............................................................................................................ 34 Section 907. Application of Moneys.................................................................................. 34 Section 908. Remedies Vested in Trustee........................................................................... 35 Section 909. Rights and Remedies of Bondholders............................................................ 36 Section 910. Termination of Proceedings........................................................................... 36 Section 911. Waivers of Events of Default......................................................................... 36 ARTICLE X TRUSTEE AND PAYING AGENTS Section 1001. Acceptance of Trusts...................................................................................... 37 Section 1002. Fees, Charges and Expenses of Trustee and Paying Agents; Trustee's PriorLien....................................................................................................... 39 Section 1003. Additional Duties of Trustee.......................................................................... 40 Section 1004. Notice to Bondholders of Default.................................................................. 40 Section 1005. Intervention by Trustee.................................................................................. 40 Section 1006. Merger or Consolidation of Trustee............................................................... 40 Section 1007. Resignation by Trustee.................................................................................. 41 Section 1008. Removal of Trustee........................................................................................ 41 Section 1009. Appointment of Successor Trustee................................................................ 41 Section 1010. Concerning Any Successor Trustee............................................................... 41 Section 1011. Reliance Upon Instruments............................................................................ 42 Section 1012. Appointment of Co-Trustee........................................................................... 42 Section 1013. Designation and Succession of Paying Agents .............................................. 43 ARTICLE XI SUPPLEMENTAL INDENTURES Section 1101. Supplemental Indentures Not Requiring Consent of Bondholders ................ 43 Section 1102. Supplemental Indentures Requiring Consent of Bondholders ....................... 44 Section 1103. Effect of Supplemental Indentures................................................................. 45 ARTICLE XII MISCELLANEOUS Section 1201. Consents, etc. of Bondholders....................................................................... 45 Section1202. Notices........................................................................................................... 45 Section 1203. Limitation of Rights....................................................................................... 46 Section1204. Severability.................................................................................................... 46 Section 1205. Applicable Provisions of Law........................................................................ 46 Section 1206. Counterparts...................................................................................................46 Section 1207. Successors and Assigns.................................................................................. 46 Section1208. Captions......................................................................................................... 46 Section 1209. Photocopies and Reproductions..................................................................... 46 Section 1210. Bonds Owned by the City............................................................................. 46 4828-9200-1547.3 ill Signatures................................................................................................................................... 48 Acknowledgements.................................................................................................................... 49 Exhibit A Form of Series 2011 Bond........................................................................... A-1 Exhibit B Form of Requisition...................................................................................... B-1 4828-9200-1547.3 iv TRUST INDENTURE THIS TRUST INDENTURE dated as of December 1, 2011, by and between the CITY OF FAYETTEVILLE, ARKANSAS (the "City"), a city of the first class organized under and existing by virtue of the laws of the State of Arkansas, as party of the first part, and SIMMONS FIRST TRUST COMPANY, N.A., as trustee (the "Trustee"), 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, as party of the second part; WITNESSETH: WHEREAS, the City has determined that there is a need for a source of funds to finance all or a portion of the costs of acquiring, constructing and equipping parking deck facilities and related roadway and other improvements (collectively, the "2011 Project"), such facilities and improvements to be located in the City's Entertainment District Parking Zone; and WHEREAS, the City is authorized and empowered under the provisions of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution and Arkansas Code Annotated (1998 Repl. & Supp. 2011) Sections 14-164-401 et seq. (as from time to time amended, the "Act"), to issue and sell its revenue bonds for the purpose of financing "capital improvements" (as defined in the Act), such as those improvements comprising the 2011 Project; and WHEREAS, in order to secure funds necessary to finance some or all of the costs of the 2011 Project in accordance with the provisions of the Act, the City proposes to issue its Parking Revenue Improvement Bonds, Series 2011 (the "Series 2011 Bonds"), in the aggregate principal amount of $ , such Series 2011 Bonds to be payable from and secured by a pledge of all net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated with respect to the 2011 Project and net revenues with respect to the City management of parking facilities owned by third parties (the "Net Parking Revenues"); and WHEREAS, the City has further determined to enter into this Indenture to authorize the issuance of and to secure the Series 2011 Bonds by granting to the Trustee a pledge and assignment of the interests and other rights herein contained, and certain funds created hereby; and WHEREAS, the Series 2011 Bonds are to be dated, bear interest, mature and be subject to redemption as hereinafter in this Indenture set forth in detail; and WHEREAS, provision is made in this Indenture for the issuance of Additional Bonds (hereinafter defined) upon compliance with certain conditions set forth herein; and 4828-9200-1547.3 WHEREAS, the execution and delivery of this Indenture and the issuance of the Series 2011 Bonds have been in all respects duly and validly confirmed, authorized and approved by Ordinance No. adopted and approved by the City Council of the City on , 2011; and WHEREAS, all things necessary to make the Series 2011 Bonds, when authenticated by the Trustee and issued as in this Indenture provided, the valid, binding and legal obligations of the City according to the import thereof, and to constitute this Indenture a valid pledge of the Net Parking Revenues (hereinafter defined) to the payment of the principal of, premium, if any, and interest on the Series 2011 Bonds, as specified in and in accordance with the provisions hereof, have been done and performed, and the creation, execution and delivery of this Indenture and the creation, execution, issuance and delivery of the Series 2011 Bonds, subject to the terms hereof, have in all respects been duly authorized; NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, THIS INDENTURE WITNESSETH: That the City, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created, and of the purchase and acceptance of the Series 2011 Bonds by the holders and owners thereof, and the sum of Ten Dollars ($10.00), lawful money of the United States of America, to it duly paid by the Trustee, at or before the execution and delivery of these presents, and for other good and valuable consideration, the receipt of which is hereby acknowledged, and in order to secure the payment of the principal of, premium, if any, and interest on the Series 2011 Bonds and all Additional Bonds (hereinafter defined) according to their tenor and effect, and to secure the performance and observance by the City of all the covenants expressed or implied herein and in the Series 2011 Bonds and Additional Bonds (collectively, the "Bonds"), does hereby grant, bargain, sell, convey, mortgage, assign, transfer and pledge unto the Trustee, and unto its successor or successors in trust, and to them and their assigns forever, for the securing of the performance of the obligations of the City hereinafter set forth the following: 1. Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, the Net Parking Revenues (hereinafter defined), including particularly the moneys in and pledged to the Revenue Fund, Bond Fund, Debt Service Reserve Fund and Project Fund (each hereinafter defined) established by this Indenture, including the investment earnings thereon, if any; and Q All moneys, securities and obligations from time to time held by the Trustee under the terms of this Indenture (except for moneys, securities or obligations deposited with or paid to the Trustee for the redemption or payment of Bonds which are deemed to have been paid in accordance with Article VIII hereof), and any and all real and personal property, rights and interests of every kind and nature from time to time which have been, are hereby, or hereafter 4828-9200-1547.3 2 are, by delivery or by writing or transfer of any kind, conveyed, mortgaged, pledged, assigned or transferred, as and for additional security hereunder, by the City or by any other person, firm or corporation, or with the written consent of the City, to the Trustee, which is hereby authorized to receive any and all such properties, rights and interests at any time and at all times and to hold and apply the same subject to the terms hereof. TO HAVE AND TO HOLD all the same 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 the 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 or causing to be deposited with the Trustee the entire amount due or to become due thereon, and shall well and truly keep, perform and observe all of the covenants and conditions pursuant to the terms of this Indenture to be kept, and shall pay to the Trustee all sums of money due or to become due to it in accordance with the terms and provisions hereof, then upon such final payments or deposits this Indenture and the lien and rights hereby granted shall cease, determine and be void; otherwise, this Indenture is to be and remain in full force and effect. THIS INDENTURE FURTHER WITNESSETH that, and it is expressly declared that, all Bonds issued and secured hereunder are to be issued, authenticated and delivered and all revenues and income hereby pledged are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the City has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the respective owners from time to time of the Bonds or any part thereof, as follows, that is to say: [END OF RECITALS AND GRANTING CLAUSES] 4828-9200-1547.3 3 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: "Act" means the Local Government Capital Improvement Revenue Bond Act of 1985, codified as Arkansas Code Annotated (1998 Repl. & Supp. 2011) Sections 14-164-401 et seq., as from time to time amended. "Additional Bonds" mean Bonds in addition to the Series 2011 Bonds which are issued under the provisions of Section 213 of this Indenture. "Amendment 65" means Amendment No. 65 to the Constitution of the State of Arkansas, approved by the voters of the State on November 4, 1986. "Annual Debt Service" means, with respect to all or any particular amount of Bonds or Subordinate Obligations, as the case may be, the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the amount of such payment which is provided from the proceeds of the sale of Bonds or Subordinate Obligations or from sources other than Net Parking Revenues. "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. , adopted by the City Council on , 2011, which authorized the issuance of the Series 2011 Bonds pursuant to this Indenture. "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 Section 501 of this Indenture. 4828-9200-1547.3 4 "Bonds" mean the Series 2011 Bonds and all Additional Bonds issued by the City pursuant to this Indenture. "Book -Entry System" means the book -entry system maintained by the Securities Depository described in Section 217 of this Indenture. "Business Day" means any day other than (a) a Saturday or Sunday, (b) a day on which commercial banks in New York, New York, or the city in which the principal corporate trust office of the Trustee is located are authorized or required by law or executive order to close, or (c) a day on which the New York Stock Exchange or the Securities Depository is closed. "Certificate" means a document signed by an Authorized Representative of the City attesting to or acknowledging the circumstances or other matters therein stated. "City" means the City of Fayetteville, Arkansas, a municipality and political subdivision under the laws of the State of Arkansas. "City Clerk" means the person holding the office and performing the duties of the City Clerk of the City. "Closing Date" means, with respect to any series of Bonds, the date upon which there is an exchange of such series of Bonds for the proceeds representing the purchase price for such series of Bonds by the Original Purchaser or Purchasers thereof. "Code" means the Internal Revenue Code of 1986, as from time to time amended, and applicable regulations issued or proposed thereunder. "Completion Date" means the date upon which a Project is first ready for normal continuous operation, as certified by an Authorized Representative. "Continuing Disclosure Agreement" means, collectively, each Continuing Disclosure Agreement between the City and a dissemination agent, dated the date of issuance and delivery of a series of Bonds, as originally executed and as amended from time to time in accordance with the terms thereof. "Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, including, but not limited to, underwriting discounts, fees and expenses, publication expenses, expenses of printing, reproducing, filing and recording documents, initial fees and charges of the Trustee and any Paying Agent, fees and expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement for the Bonds, costs of execution, transportation and safekeeping of the Bonds, and other costs, charges and fees incurred in connection with the foregoing. "Costs of Issuance Fund" means the fund by that name created and established in Section 501 of this Indenture. 4828-9200-1547.3 5 "Debt Service" means, with respect to all or any particular amount of Bonds or Subordinate Obligations, as the case may be, the total as of any particular date of computation and for any particular period of the scheduled amount of interest and amortization of principal payable on such Bonds or Subordinate Obligations, excluding amounts scheduled during such period which relate to principal which has been retired before the beginning of such period. "Debt Service Reserve Fund" means the fund by that name created and established in Section 501 of this Indenture. "Depository" means a national or state banking corporation or association (which may include the Trustee and any Paying Agent) which holds membership in the Federal Deposit Insurance Corporation. "Event of Default" means any event of default specified in Section 901 hereof. "Fiscal Year" means the 12-month period used, at any time, by the City for accounting purposes, which may be the calendar year. "Fund" means a fund established by Article V of this Indenture. "Government Securities" means direct obligations of, or obligations fully guaranteed as to principal and interest by, the United States of America or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the United States of America (including obligations issued or held in book -entry form on the books of the U.S. Department of Treasury). "Holder" or "Bondholder" or "owner of the Bonds" means the registered owner of any 1017 "Indenture" means this Trust Indenture dated as of December 1, 2011, between the City and the Trustee, pursuant to which the Bonds are issued, and any amendments and supplements hereto. "Investment Securities" means, if and to the extent the same are at the time legal for investment of funds held under this Indenture: (a) Cash (insured at all times by the Federal Deposit Insurance Corporation); (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, including: (1) U.S. Export -Import Bank (Eximbank); (2) Rural Economic Community Development Administration; 4828-9200-1547.3 6 (3) U.S. Maritime Administration; (4) Small Business Administration; (5) U.S. Department of Housing & Urban Development (PHAs); (6) Federal Housing Administration (FHA); and (7) Federal Financing Bank; (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: (1) Senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC); and (2) Obligations of the Resolution Funding Corporation (REFCORP); (3) Senior debt obligations of the Federal Home Loan Bank System; (e) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by the FDIC; (f) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "P-l" by Moody's and "A-l" or "A-1+" by S&P and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (g) Commercial paper which is rated at the time of purchase in the single highest classification, "P-1" by Moody's and "A-1+" by S&P and which matures not more than 270 calendar days after the date of purchase; (h) Investments in money market funds rated "AAAm" or "AAAm-G" or better by S&P; (i) 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 (1) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Moody's or S&P or any successors thereto; or 4828-9200-1547.3 7 (2) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or Government Securities, 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; and 0) Municipal Obligations rated "Aaa/AAA" or general obligations of States with a rating of "A2/A" or higher by both Moody's and S&P. "Mayor" means the person holding the office and performing the duties of the Mayor of the City. "Moody's" means Moody's Investors Service, Inc., and any successor thereto. "Net Parking Revenues" means Parking Revenues less Operation and Maintenance Expenses. "Operation and Maintenance Expenses" means all reasonable and necessary costs and expenses incurred in the operation, maintenance, repair and insuring of the City's parking meters, lots and other parking facilities which are properly accounted for such purposes under generally accepted accounting principles, including debt service on debt incurred to acquire parking equipment prior to the date of this Indenture. Such term does not include Debt Service on the Bonds and Subordinate Obligations or depreciation expense. "Original Purchaser" means the first purchaser(s) of a series of Bonds from the City. "Outstanding" means, when used with reference to the Bonds, as of any particular date, the aggregate of all Bonds authenticated and 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 VIII 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. "Parking Revenues" means all revenues attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including revenues to be generated with respect to the 2011 Project and net revenues with respect to City management of parking facilities owned by third parties. 4828-9200-1547.3 8 "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. "Paying Agent" means any bank or trust company named by the City as the place at which the principal of and premium, if any, and interest on the Bonds are payable. "Person" means any natural person, firm, association, corporation, limited liability company, partnership, joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Project" means the 2011 Project and any other parking facility related "capital improvements" (as defined in the Act) financed with the proceeds of Additional Bonds. "2011 Project" means the particular betterments and improvements to be financed with the proceeds of the Series 2011 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) 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 the Project and placing the same in operation; (b) all costs relating to injury and damage claims arising out of the acquisition, construction or equipping of the Project; (c) all other costs incurred in connection with, and properly allocable to, the acquisition, construction and equipping of the Project; and (d) amounts to pay or reimburse the City or any City fund for expenses of the City incident and properly allocable to such planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation of the Project. "Project Fund" means the fund by that name created and established in Section 501 of this Indenture. "Qualified Accountant" means an independent certified public accountant or firm of independent certified public accountants not in the regular employ of the City. 4828-9200-1547.3 9 "Rebate Fund" means the fund by that name created and established in Section 501 of this Indenture. "Record Date" means with respect to any interest payment date of the Bonds, the fifteenth day of the calendar month next preceding the month in which such interest payment date falls. "Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized Representative in the form of Exhibit B to this Indenture. "Reserve Requirement" means, with respect to each series of Bonds, an amount equal to the least of (i) the maximum Annual Debt Service with respect to such series of Bonds, (ii) 125% of the average Annual Debt Service with respect to such series of Bonds, or (iii) 10% of the stated original principal amount of such series of Bonds. For all purposes of this Indenture, the Reserve Requirement may be satisfied by cash or by Investment Securities. "Revenue Fund" means the fund by that name created and established in Section 501 of this Indenture. "S&P" means Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc., and any successor thereto. "Securities Depository" means The Depository Trust Company, New York, New York, or its nominee, and its successors and assigns, or any other depository institution appointed by the City or the Trustee to act as depository for the Bonds in connection with the Book -Entry System. "Series 2011 Bonds" means the initial series of Bonds being issued under and secured by this Indenture in the aggregate principal amount of $ for the purpose of financing the 2011 Project. "State" means the State of Arkansas. "Subordinate Obligations" means debt obligations of the City secured by a pledge of the Net Parking Revenues that is subordinate to the lien thereon securing the payment of the Bonds, as permitted by the provisions of Section 215 of this Indenture. "Supplemental Indenture" means any indenture supplemental to or amendatory of this Indenture, adopted by the City in accordance with Article XI hereof. "Tax Regulatory Agreement" means with respect to any series of Bonds, that Tax Regulatory Agreement of the City relating to maintenance of the excludability of interest on such Bonds from gross income for federal income tax purposes, delivered in connection with the issuance of such series of Bonds. "Trustee" means the banking corporation or association designated as Trustee in the Indenture, and its successor or successors as such Trustee. The original Trustee is Simmons First Trust Company, N.A., Pine Bluff, Arkansas. 4828-9200-1547.3 10 "Trust Estate" means the property described in the granting clauses of this Indenture. Section 102. Use of Words. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, the words "Bond", "owner", "holder" and "person" shall include the plural, as well as the singular, number. ARTICLE II THE BONDS Section 201. Security for the Bonds. (a) The Bonds are special and limited obligations of the City payable as to principal, premium, if any, and interest solely out of the Trust Estate (including the Net Parking Revenues), which Trust Estate shall be, and the same hereby is, pledged, appropriated and assigned to such payment in accordance with the provisions of this Indenture. Such pledge, appropriation and assignment shall not prevent the application of such pledged moneys and revenues for the purposes and on the terms set forth in 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 taxing powers of the City. (b) The pledge, charge, lien, trusts and assignments made herein and hereby 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 2011 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 the Trustee or the Paying Agent hereunder, without any physical delivery, segregation thereof or further act, and such pledge, charge, lien, trust and assignment shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the City, irrespective of whether such parties have notice thereof. (c) 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. Section 202. Authorized Amount of the 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 is hereby expressly limited to $ , except as provided in Section 210 and Section 213 hereof. Section 203. Details of the Bonds. (a) The Series 2011 Bonds (i) shall be designated "City of Fayetteville, Arkansas Parking Revenue Improvement Bonds, Series 2011," (ii) shall be in the aggregate principal amount of $ , (iii) shall be dated as of December 1, 2011, (iv) shall bear interest from such date at the rates hereinafter provided until paid, payable semiannually on June 1 and December 1 of each year, commencing June 1, 2012, (v) shall be 4828-9200-1547.3 11 issued in denominations of $5,000 each, or any integral multiple thereof, (vi) shall be numbered from R11-1 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 December 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 2011 Bonds: Year (December 1) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Principal Amount $ Interest Rate Section 204. Bond Form. (a) The Series 2011 Bonds shall be initially issued as fully registered Bonds without coupons, in the form of 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 2011 Bonds, except upon the occurrence of the events described in Section 217 hereof. Beneficial Owners will be deemed to have waived any right to receive a bond certificate except under the circumstances described in Section 217. The Series 2011 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. 4828-9200-1547.3 12 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 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. Limited Obligation. The Bonds, together with interest thereon, are limited and special obligations of the City payable solely out of the Trust Estate, which shall be, and hereby is, pledged and charged to such payment in accordance with the provisions of this Indenture, and shall not constitute an indebtedness of the City within the meaning of any constitutional or statutory provision and shall never constitute an obligation of or a charge against the general credit of the City. The Bonds shall be secured by such pledge and charge and by a lien on the Trust Estate, all in accordance with and subject to the conditions and provisions of the Act and this Indenture. Section 208. 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 209. Delivery of the Bonds. The City shall execute and deliver to the Trustee and the Trustee shall authenticate the Bonds of any series and deliver said Bonds to the Securities Depository as may be directed in this Section 209, in Section 213 hereof or in any Supplemental Indenture. 4828-9200-1547.3 13 (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 of the City 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 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; (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 2011 Bonds and any Additional Bonds theretofore issued will not be adversely affected by the issuance of the Additional Bonds being issued; (8) In the case of any series of Additional Bonds, a statement of a Qualified Accountant or a Certificate of Mayor, as the case may be, satisfying the requirements of Section 213 hereof; and (9) Such further documents and certificates as may be required by the Original Purchaser or Purchasers of such series of Bonds. (b) Simultaneously with the delivery of the Series 2011 Bonds, the Trustee shall apply the proceeds thereof as follows: (1) The amount, if any, received as accrued interest on the Series 2011 Bonds shall be deposited in the Bond Fund; 4828-9200-1547.3 14 (2) $ , an amount equal to the Reserve Requirement with respect to the Series 2011 Bonds, shall be deposited in the Debt Service Reserve Fund; (3) An amount equal to $ shall be deposited in the Costs of Issuance Fund for payment of Costs of Issuance pursuant to the written direction of the City; and (4) The balance of said proceeds in the amount of $ shall be deposited in the Project Fund. Section 210. 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, number, maturity and tenor in exchange and substitution for and upon cancellation of such mutilated Bond, or in lieu of and in substitution for such Bond destroyed or lost, upon the Holder's paying the reasonable expenses and charges of the City and the Trustee in connection therewith, and, in the case of a Bond destroyed or lost, filing by the Holder with the Trustee evidence satisfactory to the Trustee that such Bonds were destroyed or lost, and of the Holder's ownership thereof, and furnishing the City and Trustee with indemnity satisfactory to them. The Trustee is hereby authorized to authenticate any such new Bond. In the event any such Bonds shall have matured, instead of issuing a new Bond, the City may pay the same without the surrender thereof. Upon the issuance of a new Bond under this Section 210, 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 211. 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. 4828-9200-1547.3 15 Bonds may be exchanged at the principal corporate trust office of the Trustee for an equal aggregate principal amount of Bonds of any other authorized denomination or denominations of the same series with corresponding maturities. The City shall execute and the Trustee shall authenticate and deliver Bonds which the Bondholder making the exchange is entitled to receive, bearing numbers not contemporaneously then outstanding. The execution by the City of any Bond of any denomination shall constitute full and due authorization of such denomination and the Trustee shall thereby be authorized to authenticate and deliver such Bond. Such transfers of registration or exchanges of Bonds shall be without charge to the Holders of such Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Holder of the Bond requesting such transfer or exchange as a condition precedent to the exercise of such privilege. 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 212. 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 213. 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 or equipping of parking related "capital improvements" (as defined in the Act), (ii) refunding the Series 2011 Bonds or any series of Additional Bonds, in whole or in 4828-9200-1547.3 16 part, or (iii) any combination thereof. Additional Bonds shall be secured equally and ratably with the Series 2011 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. Before any Additional Bonds are authenticated, there shall be delivered to the Trustee the items required for the issuance of Bonds by Section 209 hereof, plus (I) in the case of Additional Bonds to finance Project Costs, a statement by a Qualified Accountant reciting the opinion, based upon necessary investigation, that Net Parking Revenues for the Fiscal Year immediately preceding the Fiscal Year in which such Additional Bonds are to be issued were not less than (i) 125% of the average Annual Debt Service on all then outstanding Bonds and Subordinate Obligations plus the Additional Bonds then proposed to be issued, and (ii) the amount, if any, needed to make required deposits into the Debt Service Reserve Fund, and (II) in the case of Additional Bonds to refund the Series 2011 Bonds or any series of Additional Bonds, a Certificate of the Mayor stating that, after taking into account the issuance of the Additional Bonds and the application of the proceeds thereof and other available funds to the refunding, the average Annual Debt Service on all outstanding Bonds and Subordinate Obligations will not be increased. If any changes have been made, and are in effect on the date of issuance of the Additional Bonds, in any parking fees, leases, rents, fines or charges imposed by the City which were not in effect during the entire preceding Fiscal Year, the Qualified Accountant may, if such changes resulted in increases in such fees, leases, rents, fines and charges, and shall, if such changes resulted in reductions in such fees, leases, rents, fines or charges, adjust the Parking Revenues for the preceding Fiscal Year to reflect any changes in such Parking Revenues which would have occurred if the changed fees, leases, rents, fines and charges had been in effect during the entire preceding Fiscal Year. 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 214. Superior Obligations Prohibited. Except to the extent permitted in Section 213 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 Parking Revenues, Net Parking Revenues 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 Parking Revenues or Net Parking Revenues 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 Net Parking Revenues and from the Revenue Fund into the Bond Fund and Debt Service Reserve Fund or from said Bond Fund and Debt Service Reserve Fund for the payment of the Bonds. Section 215. Subordinate Obligation. Nothing in this Indenture shall prevent the City from authorizing and issuing bonds, notes, bond anticipation notes, warrants, certificates or other obligations or evidences of indebtedness, the payment of the principal of and premium, if any, 4828-9200-1547.3 17 and interest on which shall be made from Parking Revenues or from a special fund to be established and maintained from Parking Revenues, provided payments from Parking Revenues or from Parking Revenues into such special fund, and the lien and charge on such Parking Revenues, shall be made junior and subordinate to the lien, pledge and charge created herein for the security and payment of the Bonds and other payments under this Indenture. Notwithstanding anything herein to the contrary, no Subordinate Obligations shall be issued unless there is no default at the time of issuance under this Indenture. Section 216. 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 Holder of such Bond in temporary form. Section 217. 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 217. 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 (1)(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 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 4828-9200-1547.3 18 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. (a) The Series 2011 Bonds will be subject to redemption prior to maturity as follows: (1) The Series 2011 Bonds are subject to redemption prior to maturity, at the option of the City, on and after December 1, 2016, in whole or in part at any time and in any order of maturity directed by the City, from funds from any source, at a redemption price equal to one hundred percent (100%) of the principal amount of the Series 2011 Bonds being redeemed, plus accrued interest to the date of redemption. (2) The Series 2011 Bonds shall be redeemed prior to maturity, in whole or in part, on any interest payment date, in inverse order of maturity, at a redemption price equal to one hundred percent (100%) of the principal amount of the Series 2011 Bonds being redeemed, plus accrued interest to the date of redemption, from unexpended proceeds of the Series 2011 Bonds (if such unexpended proceeds equal or exceed $100,000) in the Project Fund not needed for paying Project Costs with respect to the 2011 Project and segregated for the purpose of redeeming the Series 2011 Bonds. 4828-9200-1547.3 19 (3) The Series 2011 Bonds maturing on December 1, 20_, are subject to mandatory sinking fund redemption prior to maturity in part, on December 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 20 $ 20 $ 20 $ 20 $ 20_ (maturity) $ (4) The Series 2011 Bonds maturing on December 1, 20_, are subject to mandatory sinking fund redemption prior to maturity in part, on December 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; and Year Principal Amount 20 $ 20 $ 20 $ 20 $ 20_ (maturity) $ (5) The Series 2011 Bonds maturing on December 1, 20_ are subject to mandatory sinking fund redemption prior to maturity in part, on December 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 20 $ 20 $ 20 $ 20_ (maturity) $ At its option, to be exercised on or before the 45t` day next preceding any mandatory sinking fund redemption date for any Series 2011 Bonds, the City may deliver to the Trustee for cancellation Series 2011 Bonds of the appropriate maturity, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2011 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, 4828-9200-1547.3 20 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 2011 Bonds so to be redeemed shall be accordingly reduced. Section 302. Notice. Notice of the call for any redemption, identifying the Bonds or portions thereof being called and the date on which they shall be presented for payment, shall be mailed by the Trustee by first class mail (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 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 4828-9200-1547.3 21 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. Section 306. Redemption of Additional Bonds. Additional Bonds may be made subject to optional, extraordinary and mandatory sinking fund redemption, in whole or in part, in such manner, at such times and at such prices as may be provided in the Supplemental Indenture providing for their issuance. ARTICLE IV GENERAL COVENANTS AND REPRESENTATIONS Section 401. Payment of Principal, Premium, if any, and Interest. The City covenants that it will promptly pay or cause to be paid the principal of and premium, if any, and interest on every Bond issued under this Indenture at the place, on the dates and in the manner provided herein and in the Bonds according to the true intent and meaning thereof. 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, as permitted by the Act, that while any of the Bonds are Outstanding, it will use due diligence in causing the collection of the Parking Revenues. 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 Net Parking Revenues and to make the covenants in the manner and to the extent herein set forth, that all action on its part for the issuance of the Bonds and the execution and delivery of this Indenture has been duly and effectively taken, and that the Bonds in the hands of the Holders and owners thereof are and will be valid and enforceable obligations of the City according to the import thereof. Section 403. Instruments of Further Assurance. The City covenants that it will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered such indenture or indentures supplemental hereto and such further acts, instruments and transfers 4828-9200-1547.3 22 as the Trustee may reasonably require for the better assuring, transferring, mortgaging, pledging, assigning and confirming unto the Trustee of the Trust Estate. 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. All books and documents in the possession of the City relating to the Parking Revenues shall at all reasonable times be open to inspection by such accountants or other agencies as the Trustee may from time to time designate and by any Qualified Accountant required pursuant to the provisions hereof. Section 406. Tax Covenants. The City shall not use or permit the use of any Bond proceeds or any other funds of the City, directly or indirectly, in any manner, and will not take or permit to be taken any other action or actions which would adversely effect the exclusion of interest on any Bond from gross income for federal income tax purposes. No part of the proceeds of the Bonds shall at any time be used, directly or indirectly, to acquire securities or obligations the acquisition of which would cause any of such Bonds to be an "arbitrage bond" as defined in Sections 148(a) and (b) of the Code. The City agrees that so long as any of the Bonds remain Outstanding, they will comply with the provisions of each applicable Tax Regulatory Agreement. Section 407. Parking Fee Rates and Charges. The fees, leases, rents, fines and charges imposed by the City and generating the Parking Revenues are ratified, confirmed and continued by the Authorizing Ordinance. The City covenants that the fees, leases, rents, fines and charges generating the Parking Revenues will not be reduced from current levels while any of the Bonds are Outstanding unless there is obtained from a Qualified Accountant a certificate to the effect that Net Parking Revenues in the then current and immediately succeeding Fiscal Years, with the reduced fees, leases, rents, fines or charges, will be at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding Fiscal Years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. The City further covenants that the fees, leases, rents, fines and charges generating the Parking Revenues shall, if and when necessary, from time to time, be increased in such a manner as will produce Net Parking Revenues in the then current and immediately succeeding Fiscal Years at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding Fiscal Years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. Section 408. [RESERVED]. 4828-9200-1547.3 23 Section 409. Completion of Projects; Certification of Completion Dates. The City covenants that in the case of the Series 2011 Bonds and each series of Additional Bonds issued to finance Project Costs in connection with the acquisition, construction or equipping of a Project, it will forthwith proceed to acquire, construct and equip the Project for which the Bonds of such series shall be issued, in accordance with applicable plans and specifications and in conformity with law and all requirements of all governmental authorities having jurisdiction thereover, and that it will complete the acquiring, constructing and equipping of such Project with all expedition practicable. Promptly after the Completion Date, the City shall submit to the Trustee the certificate of an Authorized Representative which shall specify the Completion Date and shall state that acquisition, construction and equipping of the Project have 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 specified accounts within the Project Fund. Notwithstanding the foregoing, such certificate may state that it is given without prejudice to any rights against third parties which exist at the date thereof or which may subsequently come into being. Section 410. 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 411. Parking Revenues to be Used as Provided in Indenture. The City covenants that no Parking Revenues will be used for any purpose other than as provided in this Indenture, and that no contract or contracts will be entered into or any action taken by which the rights of the Trustee or of the Bondholders might be impaired or diminished. The City further covenants that it will adopt such resolutions and such rules and regulations as may be necessary or appropriate to carry out the obligations of the City under the provisions of this Indenture and the Act. Section 412. 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 any dissemination agent 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 any dissemination agent, as the case may be, to comply with its obligations under this Section 412. For purposes of this Section 412 only, "Beneficial Owner" shall mean any Person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including Persons holding Bonds through nominees, depositories or other intermediaries) or (b) is treated as the owner of Bonds for federal income tax purposes. 4828-9200-1547.3 24 Section 413. Representations, Warranties and Covenants Regarding Trust Estate. (a) This Indenture creates a valid and binding pledge of and security interest in the Trust Estate in favor of the Trustee (on behalf of the Bondholders) as security for payment of the Series 2011 Bonds, enforceable by the Trustee and the Bondholders in accordance with the terms hereof. (b) Under the laws of the State of Arkansas, (1) such pledge and security interest, (2) and each pledge, assignment, lien or other security interest made to secure any prior obligations of the City which, by the terms hereof, ranks on a parity with or prior to the pledge and assignment granted hereby, is and shall be prior to any judicial lien hereafter imposed on the Trust Estate to enforce a judgment against the City on a simple contract. By the date of issue of the Series 2011 Bonds, the City will have filed all financing statements describing, and transferring such possession or control over, such Trust Estate (and for so long as any Series 2011 Bond is outstanding the City will file, continue and amend all such financing statements and transfer such possession and control) as may be necessary to establish and maintain such priority in each jurisdiction in which the City is organized or such Trust Estate may be located or that may otherwise be applicable pursuant to the Uniform Commercial Code as enacted in the State of Arkansas. (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 such Trust Estate that ranks on a parity with or prior to the pledge 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 Trust Estate that ranks prior to or on a parity with the pledge 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 FUNDS AND DEPOSITS Section 501. Creation of Funds. (a) There are hereby created and established the following Funds: (i) Project Fund; (ii) Revenue Fund; (iii) Bond Fund; (iv) Debt Service Reserve Fund; (v) Cost of Issuance Fund; and (vi) Rebate Fund. 4828-9200-1547.3 25 (b) The Revenue Fund shall be maintained by the City with the Depository of its choice. All other Funds shall be held by the Trustee, which shall hold and maintain said Funds in trust, for the use and benefit of the Bondholders and the City, but subject to the permitted applications expressed herein. Section 502. Project Fund. (a) The Trustee shall deposit a portion of the proceeds of the Series 2011 Bonds to the credit of the Project Fund in accordance with the written directions of the City given as provided in Section 209 of this Indenture. (b) Moneys credited to the Project Fund shall be expended only as set forth in this Section 502. (c) Amounts in the Project Fund shall be expended and applied for the payment of Project Costs. Disbursements shall be made from the Project Fund on the basis of consecutively numbered Requisitions in the form attached hereto as Exhibit B signed by an Authorized Representative. Requisitions may be submitted to the Trustee by certified mail, first class mail or facsimile transmission. If the Trustee deems that a Requisition submitted by the City is sufficient pursuant to this Section 502, the amount requested thereunder shall be disbursed in payment of the Project Costs set forth therein, or in reimbursement of such Project Costs, within two (2) Business Days of the date of receipt of such Requisition by the Trustee. Each Requisition shall specify: (i) the name of the person or party to whom payment is to be made and the purpose of the payment; (ii) the amount to be paid thereunder; (iii) that such amount has not been previously paid by the City and is justly due and owing to the person(s) named therein as a proper payment or reimbursement of a Project Cost; and (iv) that no Event of Default exists under the Indenture and that, to the knowledge of the Authorized Representative, no event has occurred and continues which with notice or lapse of time or both would constitute an Event of Default under the Indenture. (d) The Trustee shall keep full and complete records concerning and reflecting all disbursements from the Project Fund and shall file an accounting of said disbursements if and when requested by the City. The Trustee shall only make payments from the Project Fund pursuant to and in accordance with Requisitions. In making payments from the Project Fund, the Trustee may rely on any Requisitions delivered to it pursuant to this Section 502, and the Trustee shall be relieved of all liability relating to payments made in accordance with such Requisitions and any supporting certificate or certificates requested by the Trustee without physical inspection of the Project. Within ninety (90) days following completion of the Project being financed with a particular series of Bonds, the City shall deliver to the Trustee its Certificate stating that the applicable portion of the Project is complete and the Trustee shall transfer the remaining 4828-9200-1547.3 26 moneys in the Project Fund relating to such series of Bonds (save and except moneys needed to satisfy unpaid Project Costs) to the Bond Fund for application to the retirement of the corresponding series of Bonds by redemption or purchase, as provided by Section 301(a)(2) and Section 504 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 Project 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 to be held in a Depository selected by the City, as and when received, all Parking Revenues. (b) No later than the last day of each month, commencing no later than [December 31, 2011], there shall be transferred from the Revenue Fund, in the following order, the amounts set forth below: FIRST: For deposit to 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 and an amount equal to one -twelfth (1/12) of the next scheduled principal maturity of Outstanding Bonds (including mandatory sinking fund redemptions); SECOND: For deposit to the Debt Service Reserve Fund, an amount sufficient to cure any deficiency in the Debt Service Reserve Fund; THIRD: For deposit to the Rebate Fund, an amount sufficient to satisfy the City's obligations under Section 506 hereof; and FOURTH: 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 Bond Fund and the Debt Service Reserve Fund shall be reduced by investment earnings, if any, in said Funds and, with respect to required deposits to the Bond Fund only, by any accrued interest deposited to 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. So long as there is no 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, the City may utilize moneys in the Revenue Fund for the payment of Operation and Maintenance Expenses, and may utilize any surplus therein (after the payment of Operation and Maintenance Expenses and after making the transfers required in subsection (b) above) for any other valid governmental purpose under State law. 4828-9200-1547.3 27 Section 504. Bond Fund. (a) There shall be deposited to the credit of the Bond Fund all moneys required to be transferred thereto pursuant to Sections 209, 502, 503, 505 and 507 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 Bond Fund the amounts required for the payment of interest on the Bonds due on such date, and on each redemption date, the amounts required for the payment of accrued interest on the 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 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, one day prior to such date, transfer an amount equal to the deficiency into the Bond Fund from the Funds indicated in the following order: FIRST: the Revenue Fund; and SECOND: the Debt Service Reserve Fund (for payment of principal and interest on the Bonds 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 209 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 March 1, 2012 with respect to the Series 2011 Bonds), any remaining moneys in the Cost of Issuance Fund shall be transferred to the Bond Fund. Section 506. Rebate Fund. (a) The Trustee shall establish and maintain, separate and apart from any other Funds 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 4828-9200-1547.3 28 amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section 506, 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 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 applicable 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 an Authorized Representative, 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 Securities, 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 506, Section 406 and each Tax Regulatory Agreement shall survive the defeasance or payment in full of the Bonds. Section 507. Debt Service Reserve Fund. As provided in Section 209 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. Each account within the Debt Service Reserve Fund shall be maintained in an amount equal to the related Reserve Requirement. Amounts on deposit in an account within the Debt Service Reserve Fund shall be used solely to pay the principal of and interest on the corresponding series of Outstanding Bonds for which there are no available funds in the Bond Fund to make such payments, as the same become due at maturity (including mandatory sinking fund redemption). If an account of the Debt Service Reserve Fund, by virtue of any such payment, is reduced below the related 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 507, the amount on deposit in an account of 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 related series of Outstanding Bonds. If an excess shall exist in an account in the Debt Service Reserve Fund over and above the related Reserve Requirement, such excess shall be transferred to the Bond Fund. 4828-9200-1547.3 29 Section 508. Cessation of Fund Deposits. When the moneys in the Bond Fund and the Debt Service Reserve Fund shall be and remain sufficient to pay in full the principal and interest on all Bonds then Outstanding in accordance with Article VIII of this Indenture, together with the required fees and expenses to be paid or reimbursed to the Trustee and any Paying Agent, the City shall have no further obligation to make further payments into said Funds. Section 509. 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, Project 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 Net Parking Revenues 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 on each series of Bonds during the applicable period, to the end that the Bonds of each series shall be equally and ratably secured by the Net Parking Revenues. Any Supplemental Indenture authorizing the issuance of Additional Bonds may provide that any proceeds of such series of Bonds and investment earnings thereon remaining after some specified date, or after the construction of all facilities to be financed with the proceeds of such series of Bonds, shall be applied to the redemption of such series of Bonds. ARTICLE VI [RESERVED] ARTICLE VII INVESTMENTS Section 701. Investment of Moneys. At the direction of the City or absent such direction, the Trustee shall invest moneys in Funds held by the Trustee in Investment Securities with maturity or redemption dates consistent with the times at which said moneys will be required for the purposes provided in this Indenture; provided, however, the stated maturity dates of Investment Securities in the Debt Service Reserve Fund shall not exceed five years from the date of investment thereof. The City may invest moneys held in the Revenue Fund in any investment obligations permitted by Arkansas law. Moneys in separate Funds may be commingled for the purpose of investment. Section 702. Investment Earnings. Subject to the provisions of the Tax Regulatory Agreements and Article V hereof, Investment Securities purchased with moneys held in or 4828-9200-1547.3 30 attributable to any Fund held by the City or the Trustee under the provisions of this Indenture shall be deemed at all times to be a part of such Fund and the income or interest earned, profits realized or losses suffered by a Fund due to the investment thereof shall be retained in, credited or charged, as the case may be, to such Fund unless otherwise provided pursuant to this Indenture. Section 703. Valuation of Funds. Investments in any Fund shall be evaluated monthly by the Trustee. The Trustee shall report the determined value of each Fund to the City. For the purpose of determining the amount in any Fund, the Trustee shall value all Investment Obligations credited to such Fund 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 and the Trustee. The Trustee shall sell or present for redemption any Investment Securities as necessary in order to provide money for the purpose of making any payment required hereunder, and the Trustee shall not be liable for any loss resulting from any such sale. Section 704. 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 VIII DISCHARGE OF LIEN Section 801. Discharge of Lien. If the City shall pay or cause to be paid to the owners of the Bonds the principal, premium, if any, and interest to become due thereon at the times and in the manner stipulated therein, and if the City shall keep, perform and observe all and singular the covenants and promises in the Bonds and in this Indenture expressed as to be kept, performed and observed by it on its part, then these presents and the estate and rights hereby granted shall cease, determine and be void, and thereupon the Trustee shall cancel and discharge the lien of this Indenture, and execute and deliver to the City such instruments in writing as shall be requisite to satisfy the lien hereof, and reconvey to the City the estate hereby conveyed, and assign and deliver to the City any property at the time subject to the lien of this Indenture which may then be in its possession, except moneys or Government Securities held by it for the payment of the principal of and premium, if any, and interest on the Bonds. Section 802. Bonds Deemed Paid. Any Bond shall be deemed to be paid within the meaning of this Article VIII 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) cash sufficient to make such payment 4828-9200-1547.3 31 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. Government Securities used for the purpose of defeasing the Bonds must provide for the timely payment of principal and interest and cannot be callable or prepayable prior to maturity or earlier redemption of the defeased Bonds (excluding Government Securities that do not have a fixed par value and/or whose terms do not promise a fixed dollar amount at the maturity or call date). Section 803. 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 IX DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS Section 901. Events of Default. Each of the following events shall constitute and is referred to in this Indenture as an "Event of Default": (a) Default in the due and punctual payment of any interest on any Bond; (b) Default in the due and punctual payment of the principal of or premium, if any, on any Bond, whether at the stated maturity thereof, or upon proceedings for redemption thereof, or upon the maturity thereof by declaration; (c) Default in the payment of any other amount required to be paid under this Indenture or the performance or observance of any other of the covenants, agreements or conditions contained in this Indenture, or in the Bonds issued hereunder, and continuance thereof for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied shall have been given to the City by the Trustee, which 4828-9200-1547.3 32 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 902. 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 903. 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 5 1 % in aggregate principal amount of Bonds Outstanding hereunder and if it shall have been indemnified as provided in Section 1001 hereof, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred upon it by this Section 903 as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Bondholders. No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to the Bondholders) is intended to be exclusive of any other remedy, but each and every such 4828-9200-1547.3 33 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 904. 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 905. 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, including, without limitation, the Parking Revenues, pending such proceedings with such powers as the court making such appointment shall confer. Section 906. 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 waive, to the extent that they 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 907. Application of Moneys. Available moneys remaining after discharge of costs, charges and liens prior to this Indenture shall be applied by the Trustee as follows: (a) Unless the principal of all the Bonds shall have become or shall have been declared due and payable, all such moneys shall be applied: First: To the payment to the Persons entitled thereto of all installments of interest then due, in the order of the maturity of the installments of such interest, and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due 4828-9200-1547.3 34 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 Person 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 IX then, subject to the provisions of paragraph (b) of this Section 907, 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 907. Whenever moneys are to be applied by the Trustee pursuant to the provisions of this Section 907, such moneys shall be applied by it at such times, and from time to time, as it shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an interest payment date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such dates shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date and shall not be required to make payment to the Holder of any Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Section 908. 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 4828-9200-1547.3 35 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 909. 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 1001, 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 1001, 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 910. Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the City and the Trustee shall be restored to their former positions and rights hereunder with respect to the property herein conveyed, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken, except to the extent the Trustee is legally bound by such adverse determination. Section 911. 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 4828-9200-1547.3 36 Default described in clause (a) or (b) of the first paragraph of Section 901 hereof, unless prior to such waiver or rescission all arrears of principal (due otherwise than by declaration) and interest, and all expenses of the Trustee and Paying Agent, shall have been paid or provided for. In case of any such waiver or rescission the City, the Trustee and the Bondholders shall be restored to their former positions and rights hereunder respectively, but no such waiver or rescission shall extend to any subsequent or other default, or impair any right subsequent thereon. ARTICLE X TRUSTEE AND PAYING AGENTS Section 1001. 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 1002 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 1001, 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. 4828-9200-1547.3 37 (d) The Trustee shall be protected in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram or other paper or document believed by it, in the exercise of reasonable care, to be genuine and correct and to have been signed or sent by the proper person or persons. Any action taken by the Trustee pursuant to this Indenture upon the request or authority or consent of the owner of any Bond secured hereby, shall be conclusive and binding upon all future owners of the same Bond and upon Bonds issued in exchange therefor or in place thereof. (e) As to the existence or nonexistence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a Certificate of the City signed by its Mayor and attested by the City Clerk as sufficient evidence of the facts therein contained and, prior to the occurrence of a default of which it has been notified as provided in subsection (g) of this Section 1001, or of which by that subsection it is deemed to have notice, shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion, at the reasonable expense of the City, in every case secure such further evidence as it may think necessary or advisable but shall in no case be bound to secure the same. The Trustee may accept a Certificate of the City Clerk under its seal to the effect that a resolution in the form therein set forth has been adopted by the City as conclusive evidence that such resolution 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 901 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 Parking Revenues 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. 4828-9200-1547.3 38 (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 1002. Fees, Charges and Expenses of Trustee and Paying Agents; Trustee's Prior Lien. (a) Subject to subsection (b) of this Section 1002, 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 2011 Bonds, the Trustee's initial authentication fee shall be $2,500 and the annual administration fee of the Trustee shall be up to, but shall not exceed, $2,500. 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 1002(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 1002(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. 4828-9200-1547.3 39 Section 1003. 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 2011 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 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; (iii) a brief description of all obligations held by it as an investment of moneys in each such Fund; (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. All records and files pertaining to each such Fund 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 1004. Notice to Bondholders of Default. If a default occurs of which the Trustee is pursuant to the provisions of Section 1001(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 1005. 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 1005 are subject to the approval of the court having jurisdiction in the premises. Section 1006. Merger or Consolidation of Trustee. Any bank or trust company to which the Trustee may be merged, or with which it may be consolidated, or to which it may sell or transfer its trust business and assets as a whole or substantially as a whole, or any bank or trust company resulting from any such sale, merger, consolidation or transfer to which it is a party, ipso facto, shall be and become successor trustee hereunder and vested with all of the title to the 4828-9200-1547.3 40 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 $20 million. Section 1007. 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 1008. Removal of Trustee. (a) 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; provided, however, that such removal of the Trustee shall in no event take effect until a successor shall have been appointed and shall have accepted the duties of Trustee. (b) The Trustee may be removed at any time by the City upon adoption of a resolution providing for such removal and delivery of a copy thereof to the Trustee; provided, however, that such removal of the Trustee shall in no event take effect until a successor shall have been appointed and shall have accepted the duties of Trustee. Section 1009. 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 (except with respect to any removal of the Trustee by the City pursuant to Section 1008(b), in which case a successor shall be appointed by the City), 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 $20 million. Section 1010. 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, 4828-9200-1547.3 41 rights, powers and trusts of such predecessor hereunder; and every predecessor trustee shall deliver all securities, moneys and any other property held by it as trustee hereunder to its successor. Should any instrument in writing from the City be required by any successor trustee for more fully and certainly vesting in such successor the estates, rights, powers and duties hereby vested or intended to be vested in the predecessor trustee, any and all such instruments in writing shall, on request, be executed, acknowledged, and delivered by the City. Section 1011. 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 1012. Appointment of Co -Trustee. The City and the Trustee shall have power to appoint, and upon the request of the Trustee the City shall for such purpose join with the Trustee in the execution of all instruments necessary or proper to appoint, another corporation or one or more Persons approved by the Trustee, either to act as co -trustee or co -trustees jointly with the Trustee of all or any of the property subject to the lien hereof, with such powers as may be provided in the instrument of appointment and to vest in such corporation or Person or Persons as such co -trustee any property, title, right or power deemed necessary or desirable. In the event that the City shall not have joined in such appointment within fifteen (15) days after the receipt by it of a request so to do, the Trustee alone shall have the power to make such appointment. Should any deed, conveyance or instrument in writing from the City be required by the co -trustee so appointed for more fully and certainly vesting in and confirming to such co - trustee such properties, rights, powers, trusts, duties and obligations, any and all such deeds, conveyances and instruments in writing shall, on request, be executed, acknowledged and delivered by the City. Every such co -trustee shall, to the extent permitted by law, be appointed subject to the following provisions and conditions, namely: (1) The Bonds shall be authenticated and delivered, and all powers, duties, obligations and rights conferred upon the Trustee in respect of the custody of all money and securities pledged or deposited hereunder, shall be exercised solely by the Trustee; and (2) The Trustee, at any time by an instrument in writing, may remove any such separate Trustee or co -trustee. Every instrument, other than this Indenture, appointing any such co -trustee shall refer to this Indenture and the conditions of this Article X 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, 4828-9200-1547.3 42 trusts, duties and obligations of said co -trustee shall vest in and be exercised by the Trustee until the appointment of a new trustee or a successor to such co -trustee. Section 1013. Designation and Succession of Paying Agents. The Trustee and any other banks or trust companies designated as Paying Agent or Paying Agents in any Supplemental Indenture or in an instrument appointing a successor Trustee shall be the Paying Agent or Paying Agents for the Bonds. Any bank or trust company with which or into which any Paying Agent may be merged or consolidated, or to which the assets and business of such Paying Agent may be sold, shall be deemed the successor of such Paying Agent for the purposes of this Indenture. If the position of Paying Agent shall become vacant for any reason, the City shall, within thirty (30) days thereafter, appoint such bank or trust company as shall be specified by the City as such Paying Agent to fill such vacancy; provided, however, that, if the City shall fail to appoint such Paying Agent within said period, the Trustee shall make such appointment. The Paying Agents shall enjoy the same protective provisions in the performance of its duties hereunder as are specified in Section 1001 hereof with respect to the Trustee insofar as such provisions may be applicable. ARTICLE XI SUPPLEMENTAL INDENTURES Section 1101. 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; 4828-9200-1547.3 43 (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 1102 hereof and which, in the judgment of the Trustee, is not to the prejudice of the Trustee. Section 1102. Supplemental Indentures Requiring Consent of Bondholders. Subject to the terms and provisions contained in this Section, 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) deprive 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 1101 of this Article XI. 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 1102. 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 4828-9200-1547.3 44 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 1103. Effect of Supplemental Indentures. Upon the execution of any Supplemental Indenture entered into pursuant to Section 1101 or 1102 hereof, this Indenture shall be deemed to be modified and amended in accordance therewith. 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: 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 4828-9200-1547.3 45 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. 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 the City . In determining whether Bondholders of the requisite aggregate principal amount of the Bonds have concurred in any direction, consent or waiver under this Indenture, Bonds which are owned by the City shall be disregarded and 4828-9200-1547.3 46 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. 4828-9200-1547.3 47 IN WITNESS WHEREOF, the City has caused these presents to be signed in its name and behalf by its Mayor and to be 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. ATTEST: City Clerk ATTEST: By:_ Title: CITY OF FAYETTEVILLE, ARKANSAS Mayor SIMMONS FIRST TRUST COMPANY, N.A., as Trustee By:_ Title: 4828-9200-1547.3 48 ACKNOWLEDGMENT STATE OF ARKANSAS ) ) ss. COUNTY OF WASHINGTON ) Before me a Notary Public, duly commissioned, qualified and acting within and for the State and county aforesaid, appeared in person the within named Lioneld Jordan and Sondra Smith, Mayor and City Clerk, respectively, of the City of Fayetteville, Arkansas, to me personally known, who stated that they were duly authorized in their respective capacities to execute the foregoing instrument for and in the name of the City, and further stated and acknowledged that they had signed, executed and delivered the foregoing instrument for the consideration, uses and purposes therein mentioned and set forth. IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this day of December, 2011. My Commission expires: (SEAL) Notary Public [ACKNOWLEDGEMENT TO TRUST INDENTURE] 4828-9200-1547.3 49 ACKNOWLEDGMENT STATE OF ARKANSAS ) ) ss. COUNTY OF JEFFERSON ) Before me a Notary Public, duly commissioned, qualified and acting within and for the State and county aforesaid, appeared in person the within named and , the and the , respectively, of Simmons First Trust Company, N.A., to me personally known, who stated that they were duly authorized in their respective capacities to execute the foregoing instrument for and in the name of the trust company and further stated and acknowledged that they had signed, executed and delivered the foregoing instrument for the consideration, uses and purposes therein mentioned and set forth. IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this day of December, 2011. My Commission expires: (SEAL) Notary Public [ACKNOWLEDGEMENT TO TRUST INDENTURE] 4828-9200-1547.3 50 EXHIBIT A TO TRUST INDENTURE Form of Series 2011 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. O�. f E UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2011 Interest Rate: % Maturity Date: December 1, 20_ Date of Bond: December 1, 20_ Registered Owner: CEDE & CO. Principal Amount: KNOW ALL MEN BY THESE PRESENTS: CUSIP: 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, payment of interest hereon shall be made by check or draft of the Trustee to the Registered 4828-9200-1547.3 A-1 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 "City of Fayetteville, Arkansas Parking Revenue Improvement Bond, Series 2011," is a series of bonds in the aggregate original principal amount of $ (the "Series 2011 Bonds"), issued for the purpose of (i) financing costs of acquiring, constructing and equipping parking deck facilities and related roadway and other improvements (collectively, the "Project"), (ii) funding a debt service reserve, and (iii) paying expenses of issuing the Series 2011 Bonds. The Series 2011 Bonds are issued under and are secured and entitled to the protection given by a Trust Indenture dated as of December 1, 2011 (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. The Series 2011 Bonds are not general obligations of the City, but are limited and special obligations payable solely from and secured by a pledge of net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities owned by third parties (the "Net Parking Revenues"), as specified in, and in accordance with the provisions of, the Indenture. The Indenture provides that the City may hereafter issue Additional Bonds from time to time under certain terms and conditions contained in the Indenture and, if issued, such Additional Bonds will rank on a parity of security with the Series 2011 Bonds and be equally and ratably secured by and entitled to the protection of the Indenture. 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 registered owners of the Series 2011 Bonds, and the terms upon which the Series 2011 Bonds are issued and secured. The City has covenanted that the fees, leases, rents, fines and charges generating the Parking Revenues will not be reduced from current levels while any of the Series 2011 Bonds are Outstanding unless there is obtained from a Qualified Accountant a certificate to the effect that Net Parking Revenues in the then current and immediately succeeding fiscal years, with the reduced fees, leases, rents, fines or charges, will be at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding fiscal years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. The City has further covenanted that the fees, leases, rents, fines and charges generating the Parking Revenues shall, if and when necessary, from time to time, be increased in such a manner as will produce Net Parking Revenues in the then current and immediately succeeding fiscal years at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding fiscal years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. 4828-9200-1547.3 A-2 The Series 2011 Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution and Arkansas Code Annotated (1998 Repl. & 2011 Supp.) §§14-164-401 et seq. (the "Act"), and pursuant to Ordinance No. of the City adopted on , 2011. The Series 2011 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation and the Series 2011 Bonds shall never constitute an obligation or charge against the general credit or taxing powers of the City. The holder of this Series 2011 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 2011 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 2011 Bonds will be subject to redemption prior to maturity as follows: (a) The Series 2011 Bonds are subject to redemption prior to maturity, at the option of the City, on and after December 1, 2016, in whole or in part at any time and in any order of maturity directed by the City, from funds from any source, at a redemption price equal to one hundred percent (100%) of the principal amount of the Series 2011 Bonds being redeemed, plus accrued interest to the date of redemption. (b) The Series 2011 Bonds shall be redeemed prior to maturity, in whole or in part, on any interest payment date, in inverse order of maturity, at a redemption price equal to one hundred percent (100%) of the principal amount of the Series 2011 Bonds being redeemed, plus accrued interest to the date of redemption, from unexpended proceeds of the Series 2011 Bonds (if such unexpended proceeds equal or exceed $100,000) not needed for paying costs of the Project Costs. (c) The Series 2011 Bonds maturing on December 1, 20_, are subject to mandatory sinking fund redemption prior to maturity in part, on December 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 20 $ 20 $ 20 $ 20 $ 20_ (maturity) $ 4828-9200-1547.3 A-3 (d) The Series 2011 Bonds maturing on December 1, 20_, are subject to mandatory sinking fund redemption prior to maturity in part, on December 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; and Year Principal Amount 20 $ 20 $ 20 $ 20 $ 20_ (maturity) $ (e) The Series 2011 Bonds maturing on December 1, 20_, are subject to mandatory sinking fund redemption prior to maturity in part, on December 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 20 $ 20 $ 20 $ 20_ (maturity) $ At its option, to be exercised on or before the 45th day next preceding any mandatory sinking fund redemption date for any Series 2011 Bonds, the City may deliver to the Trustee for cancellation Series 2011 Bonds of the appropriate maturity, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2011 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 2011 Bonds so to be redeemed shall be accordingly reduced. This Series 2011 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 2011 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 2011 Bonds may be exchanged for a like aggregate principal amount of Series 2011 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 2011 Bonds or for any claim based thereon or upon any obligation, 4828-9200-1547.3 A-4 covenant or agreement contained in the Series 2011 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 2011 Bonds. [The Series 2011 Bonds have been designated by the City as "qualified tax-exempt obligations" within the meaning of Section 265(b) of the Internal Revenue Code of 1986, as amended.] This Series 2011 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 2011 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 2011 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 2011 Bonds as the same become due and payable will be sufficient in amount for that purpose. This Series 2011 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. 4828-9200-1547.3 A-5 IN WITNESS WHEREOF, the City of Fayetteville, Arkansas has caused this Series 2011 Bond to be executed by its Mayor and City Clerk, thereunto duly authorized (by their manual or facsimile signatures), and its corporate seal to be affixed or imprinted hereon, all as of the date hereof shown above. CITY OF FAYETTEVILLE, ARKANSAS In ATTEST: By: City Clerk (SEAL) Mayor 4828-9200-1547.3 A-6 (Form of Trustee's Certificate) TRUSTEE'S CERTIFICATE OF AUTHENTICATION This bond is one of the Series 2011 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 2011 Bonds. SIMMONS FIRST TRUST COMPANY, N.A., as Trustee 2-5 Authorized Signature 4828-9200-1547.3 A-7 (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 4828-9200-1547.3 A-8 EXHIBIT B TO TRUST INDENTURE REQUISITION City of Fayetteville, Arkansas Series 2011 Parking Revenue Improvement Bonds Date: Requisition No.: TO: Simmons First Trust Company, N.A., as Trustee Pursuant to the provisions of Section 502 of the Trust Indenture dated as of December 1, 2011 (the "Indenture"), by and between the City of Fayetteville, Arkansas (the "Issuer") and you, as trustee, you are authorized to make the following described payment directly to the Payee named below from the Project Fund: Name and Address of Payee: Amount of Payment: $ General Classification of the Expenditures: The undersigned hereby certifies that he is authorized to deliver this Requisition on behalf of the Issuer. The amount requested hereunder has not been the basis for any previous Requisition by the Issuer and is justly due and owing to the person(s) named herein as a proper payment or reimbursement of a Project Cost. 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 Authorized Representative 4828-9200-1547.3 B-1 #am� 4t,,d a4 Ae a� 6&ma mia 1 RE: City of Fayetteville Parking Garage Option One — SE Deck CROSSLAND CONSTRUCTION COMPANY, INC. 1800 S. 52"d Street, Suite 300 Rogers,Arkansas 72758 tel 479.464.7077 fax 479.464.7050 General Information • Site to be the southeast corner of the intersection of Spring Street and West Ave. • Cast -in -place structure utilizing post tensioning. • Deep foundation will be required. • Exterior skin to be architectural treatment such as brick • Approx. 290 spaces, 230 net gain (Spacing and layout could produce more spaces) Cost • Approx. $5,365,000, or $18,500 per space • Cost does not include any design fees • Cost does not include any rock excavation beyond what is reasonably expected for foundation work Site Information and Challenges • Small site, will need to use grassy area across Spring Street for construction lay down area • Inefficient size. To construct a six story deck on such a small site will cause the cost of each space to be greater than normal. • Presence of ground water in the area of the site • Presence of rock in area of the site will increase the cost of the foundation work • Time: In order to construct this structure safely with such limited access to, in, and around the site will cause the project schedule to be around 15 to 19 months. • Possible disruption of local utilities • May require the addition of a traffic signal at the intersection (not included in cost) • Would disrupt a relatively few amount of existing parking spaces • Would require coordination with adjacent property owners • Could require land acquisition of land from adjacent properties CROSSLAND. CONSTRUCTION COMPANY, is 1800 S. 52"d Street, Suite 300 Rogers,Arkansas 72758 Lei 479.4643077 fax 479.464.7050 Option Two — WAC Lot General Information • Excavate existing approx. 290 space surface lot at the south west corner of West Ave. and Dickson Streets to accommodate an additional approx. 260 subterranean spaces. • Structure will be cast in place foundation and basement walls with a precast concrete structure supporting new parking at or slightly above the level of the existing surface lot grade. New upper level will be approx. 305 spaces • Approx. 565 spaces, 275 net gain (Spacing and layout could produce more spaces) Cost Approximately 5,085,000, or $9,000 per space Cost does not include any design fees Cost does not include any rock excavation beyond what is reasonably expected for foundation work Site Information and Challenges Will require the disruption of major parking lot in the entertainment district • Knowledge of existing conditions via as -built drawing of existing parking lot makes fewer unknowns about the site and subsurface conditions. • Modification of existing Storm Sewer system will be required • Creates opportunity to construction a permanent/semi-permanent stage or performance platform. • Very efficient structure, creates additional parking at a much less than normal parking deck cost because of larger surface area of the site which makes constructing the required parking spaces possible without building a tall structure. • Structure can be designed so that additional levels (probably one or two) could be added in the future as need arises. • Not building a multi -level above grade structure eliminates the need for additional architectural finished on the exterior, which in turn lowers the cost. • Time: This project could be constructed in approx. 9 to 12 months e May require the addition of a traffic signal at the intersection (not included in cost) l� v'�J Otte , v I�Yeilwu-c `P14Ltp�' Dc ' Day of the week # of spaces sold (out of 293) Date of Event Time of Event Saturday 269 7/9/2011 8pm Friday 250 8/19/2011 8pm Saturday 227 8/20/2011 2pm Saturday 245 8/20/2011 8pm Monday 230 9/19/2011 7:30 PM Thursday 167 10/6/2011 7pm Sunday 163 10/9/2011 2pm Thursday 130 10/13/2011 7pm Sunday 196 10/23/2011 2pm Tuesday 230 10/25/2011 7pm Wednesday 244 10/26/2011 7pm Thursday 244 10/27/2011 7pm Friday 264 10/28/2011 8pm Saturday 248 10/29/2011 2pm Saturday 253 10/29/2011 8pm Sunday 256 10/30/2011 2pm Sunday 188 10/30/2011 7pm Tuesday 197 11/1/2011 7pm Saturday 93 11 /5/2011 8pm 280 210 140 70 0 Avg # of spaces in the WAG lot sold per event (out of 293) ,Sunday: .Tuesday Thursday Saturday Monday Wednesday Friday ■ Average nurnber of spaces fold per event NORTHWEST ARKANSAS DEMOCRAT-GAZE17E NORTHWESTARKANSAS THE MORNING NEWS OF SPRINGDALE THE MORNING NEWS OF ROGERS NFWTS_PM__E NORTHWEST ARKANSAS R TIMES LLC 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, Cathy Wiles, 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 5457 Was inserted in the Regular Editions on: November 24, 2011 Publication Charges: $ 440.98 covt'� JA , Wj Cathy Wiles Subscribed and swor to bef re me Thiso_�day of '2011. a t4- � �;, C�/� Notary Public My Commission Expires: �..__. SANDRA E. Sg21ACHERBAUER B@NTON COUNTY J1'A('YPUBLIC-ARKANSAS nfiy Commission Ev4WOAPM 15, 2017 Connissiw Nm 12=21 **NOTE** Please do not pay from Affidavit. Invoice will be sent. NOV 2 9 2011 CITY OF FAYETTEVILLE CITY CLERK'S OFFICE ORDINANCE NO. N57 AN „ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $6,500,000 OF t PARKING REVENUE IMPROVEMENT BONDS BY Y ,THE CITY OF FAYETTEVILLE, ARKANSAS FOR THE /J gsKgnsns `"-PURPOSE OF FINANCING ALL OR A PORTION OF THE• COSTS OF ACQUISITION, CONSTRUCTION AND EQUIPPING OF .A PARKING DECK FACILITY; AUTHORIZING THE EXECUTION WAND DELIVERY OF A TRUST INDENTURE PURSUANT TO WHICH THE BONDS WILL BE ISSUED AND SECURED; AUTHORIZING THE EXECUTION AND DELIVERY OF AN';OFFICIAL STATEMENT PURSUANT TO WHICH THE BONDS WILL BE OFFERED; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT ,PROVIDING FOR THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT; AND PRESCRIBING OTHER MATTERS RELATINGTHERETO. WHEREAS; the City of Fayefteville, Arkansas (the "City"), has determined that there is a need for increased parking capacity in the City's Entertainment District and desires to provide such n and equipping of parking deck facilities and capacity through the acquisition, constructio related roadway and other improvements, such facilities and improvements to be located within the Entertainment District Parking Zone (the "Project"); and WHEREAS, the City is authorized and empowered under the provisions of the Constitution and'laws of the State of Arkansas, including particularly Amendment 65 to the Constitution and Arkansas Code Annotated It 998 Repl. & 2011 Supp.) Sections 14-164-401 at seq. (as from time to time amended,, the "Act"), to issue and sell its revenue bonds and to expend the proceeds thereof to finance'the costs of "capital improvements" (as defined in the Act), such as those improvements comprising. the Project; and WHEREAS, in accordance with the provisions of Amendment 65 and the Act, the City has determined to issue its Parking Revenue Improvement Bonds (the "Bonds") in the aggregate principal amount of not to exceed $6,500,000 for the purpose of (i) financing some or all of the costs of acquisition, construction and equipping of the Project, (fl) establishing a debt service reserve for the Bonds, and (lit) paying printing, underwriting, legal and other expenses il hoidental to the issuance of the Bonds; and WHEREAS, the Bonds will be secured by and payable from net revenues (after provision forgperation and maintenance expenses, including previous debt for parking equipment) t4tbutable to parkingfees, meters, lotfees, leases, rents, fines, charges and other revenues collected by the it with respect to is and other parking facilities, and including net revenues to be generated by the Project and net revenues with respect to City management of parking facilities owned by third parties (the "Net Parking Revenues"); and ;:WH, EREAS, an open public hearing on the question of the Issuance of the Bonds has been held before the City Council on November 1, 2011, following publication of notice thereof in the Northwest Arkansas Times on October 21, 2011; and WHEREAS, the City has determined to issue and secure the Bonds pursuant to a Trust Indenture (the "Trust Indenture"), by and between the City and Simmons First Trust Company, N.A., as trustee (the "Trustee"), a form of which has been presented to and is before this meeting; and WHEREAS,, the City proposes to enter into a Bond Purchase Agreement (the "Bond Purchase. Agreement") in substantially the form presented to and before this meeting, with Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), providing for the sale of the 'Bonds. NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. The City Council hereby finds and declares that the acquisition, construction and equipping of the Project is in the best interest of the City and its residents. Section 2. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution of Arkansas and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Parking Revenue Improvement Bonds" {the "Bonds"). The Bonds shall be issued in the original aggregate principal amount of not to exceed Six Million Five Hundred Thousand Dollars ($6,500,000), "shall mature not later than June 1, 2037, and shall bear interest at the rates specified in the Bond Purchase Agreement. The average yield on the Bonds as a whole shall not exceed 5.00% per annum. The proceeds of the Bonds will be utilized, along with other available moneys, to finance the costs of the Project, to establish a debt service reserve for the Bonds, erid f0.pay printing, underwriting, legal and other expenses incidental to the issuance of the {flonds . The Bonds shall be issued in the forms and denominations, shall be dated, shall be Itium64red, shall mature, shall be subject to redemption prior to maturity, and shall contain Stich other terms, covenants and conditions, all as set forth in the Trust Indenture: The Bonds -t3hall:,00t be secured by general revenues of'the City, but shall be payable from and secured , %(y Net Parking Revenues. e Mayor is hereby authorized and directed to execute and deliver the Bonds in sub- FStanfrally the form thereof contained in the Trust Indenture.submitted to this meeting, and =e dy Clerk is hereby authorized and directed to execute and deliver the Bonds and to r•.Sffk e,seal of the City thereto, and the Mayor and City Clerk are hereby authorized and rspfed''to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor.' is hereby authorized to confer with the Trustee, the Underwriter, and Kutak Rock LLP, Little Rock, Arkansas ("Bond Counsel"), in order to complete the Bonds in substantially the form contained in the Trust Indenture submitted to this meeting, with such changes as shall be approved by such persons executing the Bonds, their execution to constitute conclusive evidgnce of such approval. 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 (the "Trust Indenture"), by and between the City and 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, z the provisions thereof pertaining to the pledge of Net Parking Revenues to the Bonds 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 torn submitted to this meeting, with such changes as shall be approved by such persons 1--Z ',,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` ;:nerson.l Section 4. There Is, herebyauthorized and approved a Preliminary Official Statement of the Ody, 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 Underwriter, is ,herein referred to as the "Official Statement," and the Mayor is hereby,autho- rized fo•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 0,1p Preliminary Official Statement submitted to this meeting, with such changes as shall ce,!approved by such persons, the Mayor's execution to constitute conclusive evidence of suchapproval. (Advice Is given that a copy of the PreliminaryOfficial Statement is on file with the City Clerk anti is available for inspection by any interested person.) >`3eCtien 5. In order to prescribe th' terms and conditions upon which the Bonds are to be sold to the Underwriter, the Mayor is hereby authorized and directed to execute a Bond Purchase Agreement on behalf of the City, to be dated as of the date of its execution (the "Bond Purchase Agreement"), by and between the City and the Underwriter; and 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 meet mg, 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 persott.) ;', Section 6. In order to provide for continuing disclosure of certain financial and operating information with respect to the City and the Net Parking Revenues in compliance with the provisions of Rule 1562 12 of the U. S: Securities and Exchange. Commission, the Mayor is hereby authorized and directed to execute a Continuing Disclosure Agreement to be dated as of the date of its execution (the "Continuing Disclosure Agreement', by and between the City and the Trustee, and the Mayoris'hereby authorized and directed 'to. cause the Continuing Disclosure Agreement to be executed by the Trustee. The Continuing Disclosure Agreement is hereby approved in substantially the.form submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel ' in order to complete the Continuing Disclosure Agreement in substantially the form submit- ted 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 suchlapproval.. _ (Advice 19 given that a copy of the Continuing Disclosure Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section' 7. The various rates and amounts for the parking fees, rents, fines and charges generating the Net Parking Revenues previously enacted by the City Council are hereby retitled and confirmed. Section 8., 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 do"`bf' lthe Bonds and to'effect.the execution and delivery of the Trust Indenture, the Bond PurchaseAgreement, the Official Statement, the Continuing Disclosure`Agreementard a Tau Regulatory Agreement relating to the tax exemption of Interest on the Bonds, and to perform all of the obligations of the C ty under and pursuant thereto.'The Mayor and the City _Ile k re 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. Si6wion'9. The Bonds'ans hereby designated as "qualified. tax-exempt obligations" within' the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as, amended (the "Code"). The City hereby represents and covenants that the aggregate principal amount of its tax-exempt obligations (excluding "private activity bonds" within the meaning of Section 141 of the Code), including; those of its subordinate entities, issued in calendar year 2011 will not exceed $10,000,000: Section 10. Kutak Rock LLP, Little Rock, Arkansas, is hereby appointed to act as Bond Counsel on benalf;of the City in connection with the issuance and sale of the Bonds. Section,l1. The adoption of this Ordinance is intended as the City's "official intent" to reim bursa'itself from the proceeds of the Bonds for preliminary costs of the Project and related expenses advanced by the City: Section 12. The provisions of this Ordinance are hereby declared to be severable, and if anysection, phrase or provisior,shiall for any reason be declared to be illegal or invalldr such' declaration shall not affect the validity of the'remainder of the sections, phrases or provisions of this Ordinance•; Section 13 All ordinances, resolutions and, parts thereof in conflict.herewlth are hereby repeala&6 the extent of such conflict. ' PASSED and APPROVED.this 15th day of November, 2011. APPROVED: ATTEST: SONDRA,E. SMITH, City Clerk/Treasurer .., .,w-+. .n...."emr«aa..".wv.n:..« , ..ro....,«.".arr�wr.."w.an•r ,:,.M... .. ... .v I V E CG NOV 2 9 2011 CITY OF FAYETTEVILLE CITY CLERK'S OFFICE KUTAK ROCK LLP DISTRIBUTION LIST $6,220,000 CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BONDS SERIES 2012 City of Fayetteville Mr. Paul Becker (1 bound) Ms. Sondra Smith (1 CD) City of Fayetteville 113 West Mountain Fayetteville, AR 72701 Simmons First Trust Company, N.A. Ms. Glenda Dean (1 bound and 1 CD) Simmons First Trust. Company 501 Main Pine Bluff, AR 71601 Stephens Inc. Fayetteville City Attorney Kutak Rock LLP Dennis Hunt (1 bound) Stephens Inc. Suite 201 3425 North Futrall Drive Fayetteville, AR 72703 Mr. Kit Williams (1 bound) City of Fayetteville 113 West Mountain Fayetteville, AR 72701 Mr. Gordon Wilboum (1 bound) Kutak Rock LLP 124 W. Capitol, Suite 2000 Little Rock, AR 72201 4849-5962-5491.1 $6,220,000 CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BONDS SERIES 2012 TRANSCRIPT OF PROCEEDINGS Dated as of December 1, 2012 Prepared By: KUTAK ROCK LLP 124 West Capitol, Suite 2000 Little Rock, Arkansas 72201 4847-0506-1394.1 $6,220,000 CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BONDS SERIES 2012 CLOSING INDEX TAB Proceedings and Certificates Related to Issuance Closing Certificate and Request of the City of Fayetteville, Arkansas (the "City") 1 Exhibit A — Proof of Publication of Notice of Public Hearing in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on October 21, 2011 2 Exhibit B — Minutes of City Council meeting held November 1, 2011, reciting holding of public hearing on issuance of parking revenue improvement bonds 3 Exhibit C - Ordinance No. 5457 adopted November 15, 2011, authorizing the issuance of parking revenue improvement bonds 4 Exhibit D - Minutes of City Council meeting held November 15, 2011, reciting adoption of Ordinance No. 5457 5 Exhibit E - Proof of Publication of Ordinance No. 5457 in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on November 24, 2011 6 Exhibit F - Costs of Issuance 7 Form 8038-G and Proof of Mailing to Internal Revenue Service 8 Principal Documents Bond Purchase Agreement dated December 11, 2012, by and between the City and Stephens Inc. (the "Underwriter") 9 4847-0506-1394.1 Trust Indenture dated as of December 1, 2012, by and between the City and Simmons First Trust Company, N.A.,as trustee (the "Trustee") Tax Regulatory Agreement dated December 19, 2012, by and between the City and the Trustee Copies of Bonds Preliminary Official Statement Official Statement Opinions Approving Opinion of Bond Counsel Supplemental Opinion of Bond Counsel Opinion of Counsel to the City Miscellaneous Continuing Disclosure Agreement Trustee's Certificate Certificate of Underwriter Trustee's Receipt and Certificate as to Application of Funds Underwriter's Receipt for Bonds DTC Blanket Letter of Representation Form of Requisition Transcripts delivered to: City of Fayetteville, Attn: Mr. Paul Becker (1 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) Fayetteville City Attorney, Attn: Kit Williams, Esq. (1 bound) Kutak Rock LLP (1 bound) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2 4847-0506-1394.1 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, 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 in connection with the issuance by the City of its $6,220,000 Parking Revenue Improvement Bonds, Series 2012 (the "Bonds"). 2. Attached hereto as Exhibit A is a publisher's affidavit showing publication of a Notice of Public Hearing on the issuance of the Bonds in the Northwest Arkansas edition of the Arkansas Democrat -Gazette, a newspaper published and having general circulation in the City, on October 21, 2011. Attached hereto as Exhibit B is a true, complete and correct copy of the minutes of a meeting of the City Council held November 1, 2011, reciting the holding of the public hearing on the issuance of the Bonds, 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 C is a true, complete and correct copy of Ordinance No. 5457 (the "Bond Ordinance"), duly adopted by a majority of the City Council at a duly called meeting of the City Council, open to the public, held November 15, 2011. The Bond Ordinance 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 November 15, 2011, 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 publisher's affidavit showing publication of the Bond Ordinance in the Northwest Arkansas edition of the Arkansas Democrat -Gazette, a newspaper published and having general circulation in the City, on November 24, 2011. 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 the 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 November 15, 2011 4842-3628-2386.1 meeting referred to in paragraph 2 above, with such changes not inconsistent with the Bond Ordinance as have been approved by the officers executing the same. Document Trust Indenture Date Other Party or Parties as of Simmons First Trust Company, December 1, 2012 N.A., as trustee (the "Trustee") Tax Regulatory Agreement December 19, 2012 Trustee Continuing Disclosure December 19, 2012 Simmons First Trust Company, Agreement N.A., as dissemination agent (the "Dissemination Agent") Bond Purchase Agreement December 11, 2012 Stephens Inc. (the "Underwriter") Official Statement December 11, 2012 None The Trust Indenture, the Tax Regulatory Agreement, the Continuing Disclosure Agreement, the Bond Purchase Agreement and the Official Statement 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 forth 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 the City Documents and the undersigned City Clerk of the City did manually attest the Indenture. The undersigned Mayor of the City did manually execute and the undersigned City Clerk of the City did manually attest $6,220,000 aggregate principal amount of the Bonds, issued in the form of fully registered typewritten bonds numbered from R12-1 through R12-17, inclusive, initially dated as of December 1, 2012. 6. The City has duly adopted the Bond Ordinance (and has duly pledged the Net Parking Revenues 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 Amendment 65 and Arkansas Code Annotated §§ 14-164-401 et seq. (collectively, the "Authorizing Legislation"). As of the date hereof, 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 2 4842-3628-2386.1 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 purposes 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 an officer of the City (including this certificate) and 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 seal affixed to this certificate is the legally adopted, proper and only official seal of the City, and an impression thereof has been placed on each of the Bonds. 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 Arkansas law. 10. The present officials of the City and their respective terms are as follows: Name Lioneld Jordan Kit Williams Sondra Smith Rhonda Adams Brenda Boudreaux Adella Gray Bobby Ferrell Mark Kinion Sarah Lewis Matthew Petty Justin Tennant Date of Expiration Office of Term Mayor 12/31/12 City Attorney 12/31/14 City Clerk 12/31/12 Alderman 12/31/14 Alderman 12/31/12 Alderman 12/31/14 Alderman 12/31/12 Alderman 12/31/14 Alderman 12/31/12 Alderman 12/31/12 Alderman 12/31/14 11. The City has not and will not engage in any activity which might result in the income of the City 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. 12. 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 of the Bonds have been complied with, satisfied or performed in the manner and with the effect contemplated in the Indenture and the Bond Purchase Agreement. Each of the City's representations, warranties and covenants contained in the Bond Purchase Agreement are true and correct as of the date of this certificate. 13. Since December 31, 2011, there has not been any material adverse change in the properties, financial position or results of operations of the City, whether or not arising from 3 4842-3628-2386.1 transactions in the ordinary course, other than such changes which are disclosed in the Official Statement, and since such date the City has not incurred any liability material to the City, except as disclosed in the Official Statement. The information in the Official Statement relating to the City and its organization, properties, operations and financial condition, and the description of the Bonds, the Bond Ordinance, and the Net Parking Revenues (as defined in the Bond Ordinance) are true and correct in all material respects and do not contain any untrue or incorrect statement of a material fact and do not omit to state a material fact necessary in order to make the statements contained in the Official Statement, 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 or the Net Parking Revenues 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. 14. There are hereby delivered to the Trustee seventeen (17) typewritten Bonds, one for each maturity, in the aggregate principal amount of $6,220,000 to be registered in the name of Cede & Co. The Trustee is hereby requested to authenticate the Bonds and to receipt for and deliver the Bonds upon the order of the Underwriter on behalf of the City after authentication and upon payment therefor of $6,088,148.55, plus accrued interest from December 1, 2012 to the date of delivery in the amount of $8,876.00, for a total purchase price of $6,097,024.55. The Trustee is hereby directed to disburse the Bond proceeds as follows: (i) Deposit the accrued interest on the Bonds in the amount of $8,876.00 into the Bond Fund; (ii) Deposit the sum of $190,316.25 into the Debt Service Reserve Fund; (iii) Deposit the sum of $40,000.00 into the Cost of Issuance Fund and immediately pay therefrom those costs of issuance of the Bonds set forth on Exhibit F hereto; and (iv) Deposit the balance of the Bond proceeds (viz. the sum of $5,857,832.30) into the Project Fund. 15. 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 mayor -council form of government pursuant to Title 14. 16. No action, suit, proceeding, inquiry or investigation is pending, or, to the knowledge of the undersigned, is there any basis therefor, in any way (i) restraining or enjoining the issuance, sale or delivery of any of the Bonds or the collection of any moneys or property pledged under the Bond Ordinance or the pledge thereof, or (ii) questioning or affecting the validity or enforceability of the Bonds, the Bond Ordinance or any of the City Documents, or (iii) questioning or affecting the validity of any of the proceedings for the authorization, execution, authentication, sale or delivery of the Bonds or the assignment by the City of any of the moneys, revenues, instruments or other rights pledged under the Bond Ordinance, or (iv) questioning or affecting the corporate existence or organization of the City or the title to 0 C Si yIIc%Y�:�►�ci:%�i I office of any of the officers or officials thereof or any powers of the City, or (v) questioning or affecting the power and authority of the City to issue the Bonds or adopt the Bond Ordinance. 17. The City will apply the proceeds from the sale of the Bonds to pay the costs of acquiring, constructing and equipping parking deck facilities and related roadway and other improvements within the City's Entertainment District, to fund a deposit to the Debt Service Reserve Fund, and to pay the costs of issuing the Bonds. The Net Parking Revenues (as defined in the Bond Ordinance) are not pledged or hypothecated in any manner or for any purpose other than for the payment of the Bonds, and except as otherwise provided in the Bond Ordinance, the Indenture and the Official Statement. 18. In the City, the time for filing a referendum petition is fixed at 30 days after the publication of the measure upon which the referendum is sought. 19. The adoption of 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. 20. The City's employer tax identification number is 71-6018462. 21. 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 WITNESS WHEREOF, the undersigned have hereunto set their hands as of December 19, 2012. CITY OF FAYETTEVILLE, ARKANSAS By: AQn-AO-, &C. Sondra Smith, City Clerk FAYETTEVILLE ♦,���! J 0 N 11 �`��� 5 4842-3628-2386.1 Atkansas Democrat Voazette STATEMENT OF LEGAL ADVERTISING KUTAK ROCK LLP 124 W CAPITOL 2000 LITTLE ROCK AR 72201 ATTN: DATE 10/21/11 ACCT #: L1124494 Gordon Wilbourn INVOICE #: 2697136 P.O. #. STATE OF ARKANSAS COUNTY OF PULASKI: ss. I, Elizabeth Myers do solemnly swear'that'I am the Legal Billing Clerk of the Arkansas Democrat. - Gazette, a daily newspaper printed and published in said County, State of Arkansas; that I was so related to -this publication at and during -,the publication of the annexed legal advertisement in the matter of: public hearing pending in the Court, in. said County, and at the dates of the several publications of said advertisement stated below, and that during said 7Mods and at said dates, said newspaper was nted and had a bona fide circulation in said County; that said newspaper had been regularly printed and published in said County, and had a bona fide circulation therein for the period of one month before the date of the first publication of said advertisement; and that said advertisement was published in the regular daily issues of said newspaper as stated below. DATE DAY LINAGE RATE DATE DAY LINAGE RATE 10/21 Fri 73 1,25 Subscribed a sworn m this day of 2 • Notary Public NOTARY �. PUBLIC Ir/ cool �hurr111111W\ REMIT TO: ARKANSAS DEMOCRAT -GAZETTE, INC. P.O. BOX 2221 LITTLE ROCK, AR 72203 BILLING QUESTIONS CALL 378-3812 AD COPY Mayor Lioneld Jordan City Attorney Kit Williams City Clerk Sondra Smith City of Fayetteville Arkansas City Council Meeting Minutes November 1, 2011 City Council Meeting Minutes November 1, 2011 Page I of 12 Aldermen Ward 1 Position 1 — Adella Gray Ward 1 Position 2 — Brenda Boudreaux Ward 2 Position I — Mark Kinion Ward 2 Position 2 — Matthew Petty Ward 3 Position I — Justin Tennant Ward 3 Position 2 — Robert Ferrell Ward 4 Position 1 — Rhonda Adams Ward 4 Position 2 — Sarah E. Lewis A meeting of the Fayetteville City Council was held on November 1, 2011 at 6:00 p.m. 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 Gray, Boudreaux, Kinion, Petty, Tennant, Ferrell, Adams, Mayor Jordan, City Attorney Kit Williams, City Clerk Sondra Smith, Staff, Press, and Audience. ABSENT: Alderman Lewis Pledge of Allegiance Mayor's Announcements, Proclamations and Recognitions: City Council Meeting Presentations, Reports and Discussion Items: Award Presentation — National Council for Public -Private Partnerships recognition of the City of Fayetteville, Ark., and CH2M HILL with a Public -Private Partnership Sustainability Awards — Richard Norment NCPPP representative Richard Norment, NCPPP Representative explained the process of selecting a recipient. He presented the award to Mayor Jordan on behalf of the City of Fayetteville and CH2M Hill. Mayor Jordan recognized and thanked Billy Ammons, Duyen Tran, and David Jurgens. He also thanked the City Council and citizens of Fayetteville for their hard work. Agenda Additions: None 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteviIle, org Telecommunications Device for the Deaf TDDrM (479) 521-1316 City Council Meeting Minutes November 1, 2011 Page 2 of 12 Consent: Approval of the October 18, 2011 City Council meeting minutes. Approved 2012 Chevrolet Colorado 4X4: A resolution approving a budget adjustment in the amount of $19,950.00 to fund the purchase of a 2012 Chevrolet Colorado 4X4 pickup truck by the Fleet Operations Division. Resolution 185-11 as recorded in the office of the City Clerk. Snow Plow and Spreader: A resolution approving a budget adjustment in the amount of $48,000.00 to fund the purchase of snow plow and spreader attachments for existing vehicles by the Fleet Operations Division. Resolution 186-11 as recorded in the office of the City Clerk. Mt. Sequoyah Center, Inc.: A resolution amending Resolution No. 140-11 and approving a participation and unsecured loan agreement with Mount Sequoyah Center, Inc. to perform energy retrofit services in the amount of $164,536.68 as part of the City of Fayetteville Community Revolving Loan Fund for Energy Efficiency. Resolution 187-11 as recorded in the office of the City Clerk. Bid #11-23 Schefers Roofing Company: A resolution approving an agreement in the amount of $43,536.00 with Schefers Roofing Company, pursuant to Bid #11-23, for the installation of roofing as part of the Mount Sequoyah Center, Inc. Community Revolving Loan Fund for Energy Efficiency Agreement, Resolution 188-11 as recorded in the office of the City Clerk. Bid #11-62 Wyatt Contracting, Inc.: A resolution awarding Bid #11-62 and approving a contract with Wyatt Contracting, Inc. in the amount of $59,530.00 for the construction of a Lake Sequoyah boat ramp and courtesy dock, approving a ten percent (10%) project contingency, and approving a budget adjustment. Resolution 189-11 as recorded in the office of the City Clerk. Fire Station No. 3: A resolution approving a settlement agreement between the City, Heckathorn Construction Company, Inc., Don Spann AIA Architect, and Batson Bravo Engineering related to mold remediation and repairs completed at Fire Station No. 3, and approving a budget adjustment in the amount of $12,170.00. Resolution 190-11 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 TDDrM (479) 521-1316 City Council Meeting Minutes November 1, 2011 Page 3 of 12 McGoodwin, Williams & Yates: A resolution approving a contract with McGoodwin, Williams & Yates in the amount of $105,000.00 for engineering and design of the Broyles Avenue recycling drop off and education facility, and approving a five percent (5%) contingency. Resolution 191-11 as recorded in the office of the City Clerk. Arkansas State Highway and Transportation Department: A resolution approving a budget adjustment in the amount of $596,957.75 recognizing.revenue from the Arkansas State Highway and Transportation Department for water and sewer relocations related to the widening of State Highway 265 (Crossover Road) between Mission Boulevard and Joyce Boulevard. Resolution 192-11 as recorded in the office of the City Clerk. Alderman Boudreaux moved to approve the Consent Agenda as read. Alderman Tennant seconded the motion. Upon roll call the motion passed 7-0. Alderman Lewis was absent. Public Hearing: Parking Revenue Improvement Bonds a discussion about the advisability of issuing parking revenue improvement bonds to finance the construction of an Entertainment District parking deck. Mayor Jordan opened the Public Hearing Paul Becker, Finance Director gave a brief description of the revenue bonds. The Pubic Hearing was conducted Dan Coody, a citizen expressed his concerns with the timing of the bonds and pointed out that it says "issued for 2011" in the ordinance. He questioned if you have that in the ordinance is it still okay to issue them in 2012. Gordon Wilburn with Kutak Rock: If they are sold next year that representation does not have to be made in an ordinance, you can do it in a closing certificate but we would have to revisit the issue at that point to see if you had that same intent in 2012 and you could make the certification at that point. That section is not necessary if you are not going to sell the bonds this year. Dan Coody stated one thing we don't want to do is issue bonds and then try to discover where we are going to place it, etc. All these things can add up to a huge amount of money that we are not prepared to spend. He expressed his concerns with the location and the cost. Alderman Ferrell: Are you suggesting that subterranean excavation and construction is cheaper than going another route? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDD/T TY (479) 521-1316 City Council Meeting Minutes November 1, 2011 Page 4 of 12 Dan Coody: I might suggest that but you might ask the Engineer. Mayor Jordan: What about the trees that we have in the existing parking lot? Dan Coody explained how the existing trees could be preserved. Rick Alexander, a citizen expressed his concerns with the affect this would have on the surrounding property. Terri Trotter with the Walton Arts Center spoke on the parking challenges in the Entertainment District and stated I appreciate you considering this and we look forward to what is in store. Alderman Kinion: My concern is when we are looking at the current parking situation, if we build on the current Walton Arts Center parking lot, the immediate impact is going to be pretty sizeable. Do you see that as an impact immediately on the programming and would it be expected that if it was an immediate impact on the programming and accessibility that it would follow in the long run? Terri Trotter: I am not sure that we have the information to answer that question, if it is determined that seems to be the best location, then we are certainly open to discussing how it would work. Alderman Boudreaux: Has the parking not improved quite a bit since we implemented the paid parking and we don't have the students filling up the main Walton Arts Center lot? Terri Trotter explained the current parking situation and stated before the show starts we have been filling the lot. Alderman Boudreaux: If we build it on the Spring Street location, is it a real complaint with people having to walk that far? Terri Trotter: Pdon't see it as being an issue from Spring Street. When you start talking about the Washington County deck there are issues there. As close to the Arts Center as it could be would be fantastic. Alderman Boudreaux: The issue with the shuttle ideas is that everyone wants to leave at the same time. Randall Russell with Crossland Construction Company spoke on the costs of constructing underground versus above ground. A discussion followed on the costs per space on this particular location. Alderman Ferrell: Did we gain any information from the actual excavation that took part for the Walton Arts Center? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDriTY (479) 521.1316 City Council Meeting Minutes November 1, 2011 Page 5 of 12 Randall Russell stated we do have access. I have reviewed the as built drawings of the existing lot. He continued to discuss his findings. Alderman Ferrell: How deep do you have to go to be able to tell where your bedrock is for piers if that is going to be involved? Randall Russell: In that area of town I have excavated a couple of spots and there is a layer of shell there that is thick and I am not sure it would bear a six story parking deck. It would probably classify as rock. Mayor Jordan clarified what the topic of discussion currently was. Alderman Adams: If we enter into a bond purchase agreement, is it possible to bail out and if so what are the consequences? Paul Becker explained that until we actually decide to sell the bonds they do not go into effect. He described the purchasing process. Deborah Coody, a citizen asked why wouldn't you take a loan out from the reserve funds rather than taking it out of the parking revenue. Paul Becker explained the reasoning behind taking the money from the parking revenue. Deborah Coody stated the location is an issue because if you can net more parking places in one spot over another then you have long term more revenue coming in. Mayor Jordan: I am not settled on a location one way or another which is an issue that we will discuss. Alderman Boudreaux: It is my understanding that this committee is going to have more meetings and the public is invited. They will come up with recommendations and at that point it would come to the Council. Mayor Jordan: The committee is an advisory committee but you all make the final call on this. Alderman Gray: One question I have received is are we absolutely sure that the best way for us to get the money is to sell the bonds. My question is if we vote tonight to authorize the selling of the bonds, if there seems to be a better way to get the money, at that time are we obligated to do the bonds? Have we explored other places to get the money? Paul Becker: There are no other sources for funding this other than a stream coming from parking. He spoke on the economic condition of our country today. Alderman Gray: I was just suggesting that we look some place else to get the money like a bank or something. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting Minutes November 1, 2011 Page 6 of 12 Paul Becker explained the process on getting a construction loan., Dennis Hunt with Stephens Inc. explained a bond offering. Alderman Adams: I think that we need to vote to authorize the issuance of these bonds. This seems to me to be a good idea. Steve Clark, President of the Chamber of Commerce thanked the Council for all that they have done thus far to address parking issues. He stated we ask you to adopt this and authorize the sale of these bonds. We also ask that you commit to, that once they are sold, that is all you will spend. Dennis Hunt stated we are trying to set a budget in place but if interest rates start sky rocketing it will have an implication and then you will need to decide if we are far enough along that yes we want to go ahead and issue these bonds and lock in our budget to the maximum extent possible. Mayor Jordan closed the Public Hearing Unfinished Business: None New Business: Parking Revenue Improvement Bonds: An ordinance authorizing the issuance and sale of not to exceed $6,500,000 of Parking Revenue Improvement Bonds by the City of Fayetteville, Arkansas for the purpose of financing all or a portion of the costs of acquisition, construction and equipping of a parking deck facility, authorizing the execution and delivery of a trust indenture pursuant to which the bonds will be issued and secured; authorizing the execution and delivery of an official statement pursuant to which the bonds will be offered; authorizing the execution and delivery of a bond purchase agreement providing for the sale of the bonds; authorizing the execution and delivery of a continuing disclosure agreement; and prescribing other matters relating thereto. City Attorney Kit Williams react the ordinance. Alderman Ferrell stated this is the only way that we will have a revenue source where it will not have to come out of another part of our fund because it will generate and pay for itself. I spoke with some business owners and they understood there was a parking problem now and they would support this provided there was a revenue stream to build something. He spoke in favor of the ordinance. Deborah Coody: asked does this mean that the bonds won't be sold until the City Council approves a location and a design? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDITTY (479) 521-1316 City Council Meeting Minutes November 1, 2011 Page 7 of 12 Paul Becker: This authorizes the Mayor and Administration to execute and sell the bonds. The Mayor said he intends to bring that to the Council before we move forward with the project. Mayor Jordan stated I am trying to set a budget for what we have to work with which is $5.5 million. The total authorization of this is basically giving us permission to do this and then we will decide when we activate those bonds. I really wanted to know if the Council is still in support of the bonds and authorizing the sale of the bonds when we get ready to do that. Deborah Coody: So what you are saying is that you are not going to have the location and the design hammered out before you sell the bonds? Mayor Jordan: I think that would be a correct statement. Deborah Coody: I think that is a mistake. Alderman Petty: I support the idea of a deck. I would prefer that those bonds are not issued until we have established at least a few conclusions from the public input process. I would request that we leave this on the first reading and have the Administration come forward with a plan for that public input process. Alderman Ferrell: Do you see this as being done in the next couple of readings because we are vulnerable to the market as far as the rates on the bonds. Alderman Petty: The only thing that keeps me from authorizing these tonight is I want that process to be outlined. Dan Coody encouraged the Council to take more time to look at other options. He explained various ideas to create a parking deck. Mayor Jordan: I am very open minded and by the figures you brought in that is very attractive to me so we should be good. Alderman Adams: Dan, have you been to some of the committee meetings yet? Dan Coody: No, not yet. Mayor Jordan: This is our third. Dan Coody: No, I haven't been to any of them. He continued to describe other parking decks he has seen and stated if we can't hide it with beauty then let's just hide it all together. A discussion followed on the cost of the projects. Paul Becker: If we go for a straight bank loan we have to pay it back in five years. We couldn't borrow near as much money as we could in a revenue bond. That is why the revenue bond is the best alternative. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDITTY (479) 521-1316 City Council Meeting Minutes November 1, 2011 Page 8 of 12 David Orr, resident of 1564 West Cedar Street pointed out the need for aesthetics in this project. He expressed his concerns with the height issue of a parking deck. Matthew Wright, a resident of Ward 4 asked if it doesn't work out whether its aesthetics or price then you just don't go forward with the bond or what happens? Paul Becker: That is correct, that is what is anticipated. Alderman Petty: How did we arrive to the figure of $6.5 million? Paul Becker explained the process of how that figure was reached. Dennis Hunt further explained the process. Alderman Petty: Are there any factors in the decision making process that would affect our capacity to borrow in your methodology? Dennis Hunt: We have not analyzed what the new deck would generate. There are a lot of variables that could influence the future in terms of the number of spaces that would actually be used. What we have looked at is your historic collections over the last twelve month period. Alderman Petty: We have to set a total price for this project but we don't have all the information to do so now. I want to make sure that the City has the capacity to borrow as much as we can and that is separate from actually using that money. Paul Becker: Your decision would be made and if you get to the point and you can't build what you want then you just scale back the project or you don't do the project. Alderman Petty: In the development of that public input process, I think it is really important that we determine what we are going to know from that process, before the bonds get issued so that we can avoid acquiring more debt before we are certain that we will be able to afford the project. Alderman Boudreaux: That becomes difficult if you don't bid out the projects. I don't know how fine tuned we can really get there. Mayor Jordan: I am basing it on the revenue that we have brought in and what we can afford to do. I am trying to keep it to where we can afford to bond what we are doing and pay for it. Alderman Petty: We can at least know what we are going to ask for in the bids before we go out and establish that process. Mayor Jordan: I leave a lot of this up to your wisdom too and we will bring you back whatever you want to look at. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDD/1TY (479) 521-1316 City Council Meeting Minutes November 1, 2011 Page 9 of 12 Don Marr, Chief of Staff stated the project design goes back to the initial discussion we had with the public in the first 16 meetings. Our bonding capacity doesn't change unless our revenue and interest rate changes. I don't think the capacity of what the revenue will generate will change regardless; the discussion is what will change what you do. Mayor Jordan: At the end of the day we have $5.5 million. Alderman Gray: I feel like the place we don't want to be, is going through the borings, looking at the ground, and design and deciding what we really want and then knowing that we can't do it for the money but we have already issued the bonds. Do we have the money to do those preliminary tests and designs? Paul Becker: You should have the money to be able to do the bonds locally. At that point we would know whether or not the project was feasible. Alderman Gray: That is what is important for us to know. Randall Russell: What you have to look at here is our net increase if you want to look at a comparable cost per space. He discussed the design phase and cost. Steve Clark stated the Chamber of Commerce would never support the increasing of the parking rates. He expressed his concerns regarding increases in the cost. GAlderman Ferrell: Any funds spent up front can be recaptured once it's bought or sold. Paul Becker: Right, that is in the bond document. Alderman Ferrell: On a public project like this can we accept funds from philanthropist if someone wanted to donate a large amount of money? Paul Becker: I certainly don't see why not. Left on the First Reading Parking Revenue Fund: An ordinance establishing a Parking Revenue Fund and restricting expenditures there from. City Attorney Kit Williams read the ordinance. Paul Becker gave a brief description of the ordinance. Alderman Petty moved to suspend the rules and go to the second reading. Alderman Gray seconded the motion. Upon roll call the motion passed 7-0. Alderman Lewis was absent. City Attorney Kit Williams read the ordinance. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting Minutes November 1, 2011 Page 10 of 12 Alderman Petty moved to suspend the rules and go to the third and final reading. Alderman Adams seconded the motion. Upon roll call the motion passed 7-0. Alderman Lewis was absent. City Attorney Kit Williams read the ordinance. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed 7-0. Alderman Lewis was absent. Ordinance 5455 as Recorded in the office of the City Clerk Sales Tax Capital Fund: An ordnance to enact §34.09 Sales Tax Capital Fund of the Code of Fayetteville. City Attorney Kit Williams read the ordinance. Paul Becker gave a brief description of the ordinance. Alderman Ferrell: Can you tell me where it touches on operations and maintenance and capital projects? Does it delineate them by name or is it a general fund? Paul Becker: It is a explanation lanation of funds and what it takes to create a fund. It doesn't g p touch on capital and capital projects. Alderman Ferrell moved to suspend the rules and go to the second reading. Alderman Tennant seconded the motion. Upon roll call the motion passed 7-0. Alderman Lewis was absent. City Attorney Kit Williams read the ordinance. Left on the Second Reading VAC 11-3944 (3670 N. Lalique LaneNPR Investments): An ordinance approving VAC 11- 3944 submitted by Bates and Associates for property located at 3670 Lalique Lane to vacate a utility easement, a total of 150.15 square feet. City Attorney Kit Williams read the ordinance. Jeremy Pate, Development Services Director gave a brief description of the ordinance. Alderman Ferrell moved to suspend the rules and go to the second reading. Alderman Gray seconded the motion. Upon roll call the motion passed 7-0. Alderman Lewis was absent. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting Minutes November 1, 2011 Page 11 of 12 City Attorney Kit Williams read the ordinance. Alderman Gray moved to suspend the rules and go to the third and final reading. Alderman Ferrell seconded the motion. Upon roll call the motion passed 7-0. Alderman Lewis was absent. City Attorney Kit Williams read the ordinance. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed 7-0. Alderman Lewis was absent. Ordinance 5456 as Recorded in the office of the City Clerk Amend Rules of Order and Procedure: A resolution to amend the Rules of Order and Procedure of the Fayetteville City Council to clarify the procedure of presenting agenda items during City Council meetings. City Attorney Kit Williams gave a brief description of the resolution. Lindsley Smith, Communications and Marketing Director gave a brief description of the resolution. Don Marr further explained the resolution and why certain procedures were modified. Lindsley Smith thanked Alderman Petty and the Council for their comments that helped to create this. Don Marr discussed the suggestions that were taken into consideration when creating the procedures. Alderman Ferrell thanked everyone involved in creating the resolution. Alderman Ferrell moved to approve the resolution. Alderman Petty seconded the motion. Upon roll call the resolution passed 7-0. Alderman Lewis was absent. Resolution 193-11 as recorded in the office of the City Clerk. AT&T U-verse Agreement: A resolution to approve a five year renewal of the AT&T U-verse Agreement. Lindsley Smith gave a brief description of the resolution. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDrrTY (479) 521-131 B City Council Meeting Minutes November 1, 2011 Page 12 of 12 Alderman Petty: I was wondering why there wasn't a timeline or date associated with the roll out of U-verse to the Cable Center. Cathy Foraker representing AT&T stated every year we look at a capital budget and decide where to invest those dollars where they can reach the most homes. The trouble we have with this particular area which encompasses the PEG Center is that you have so many businesses and this is truly a residential product. She stated we have asked them to relook at this area. I can't give you a firm date because I don't know what it is. Alderman Petty: So they don't have a roll out plan over the city for where they are going to put services? Cathy Foraker: No, it's done as the capital becomes available. Alderman Petty: Lindsley, do you see any advantage to making this expire at the same time as our agreement with Cox? City Attorney Kit Williams explained our current Franchise Agreement with Cox. He stated we agreed to continue an agreement with Cox on a month to month basis because in my opinion we cannot get any better terms than what we currently have. There is no ending date for the Cox Franchise Agreement. He explained the AT&T U-verse agreement and he stated this is the best agreement we can have at this time. Lindsley Smith stated I am looking to make sure that we don't go the way the other states have gone with state wide franchises. I don't think that would be good for Fayetteville. Alderman Boudreaux moved to approve the resolution. Alderman Gray seconded the motion.. Upon roll call the resolution passed 6-1. Alderman Petty voting no. Alderman Lewis was absent. Resolution 194-11 as recorded in the office of the City Clerk. Announcements: Meeting adjourned at 8:45 p.m. J dan, ayor Sondra E. Smith, City Clerk/Treasurer 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDfTTY (479) 521-1316 ORDINANCE NO.5457 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $6,500,000 OF PARKING REVENUE IMPROVEMENT BONDS BY THE CITY OF FAYETTEVILLE, ARKANSAS FOR THE PURPOSE OF FINANCING ALL OR A PORTION OF THE COSTS OF ACQUISITION, CONSTRUCTION AND EQUIPPING OF A PARKING DECK. FACILITY; AUTHORIZING THE EXECUTION AND DELIVERY OF A TRUST INDENTURE PURSUANT TO WHICH THE BONDS WILL BE ISSUED AND SECURED; AUTHORIZING THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT PURSUANT TO WHICH THE BONDS WILL BE OFFERED; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT; AND PRESCRIBING OTHER MATTERS RELATING THERETO. WHEREAS, the City of Fayetteville, Arkansas (the "City"), has determined that there is a need for increased parking capacity in the City's Entertainment District and desires to provide such capacity through the acquisition, construction and equipping of parking deck facilities and related roadway and other improvements, such facilities and improvements to be located within the Entertainment District Parking Zone (the "Project"); and WHEREAS, the City is authorized and empowered under the provisions of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution and Arkansas Code Annotated (1998 Repl. & 2011 Supp.) Sections 14-164-401 et seq. (as from time to time amended, the "Act"), to issue and sell its revenue bonds and to expend the proceeds thereof to finance the costs of "capital improvements" (as defined in the Act), such as those improvements comprising the Project; and WHEREAS, in accordance with the provisions of Amendment 65 and the Act, the City has determined to issue its Parking Revenue Improvement Bonds (the "Bonds") in the aggregate principal amount of not to exceed $6,500,000 for the purpose of (i) financing some or all of the costs of acquisition, construction and equipping of the Project, (ii) establishing a debt service reserve for the Bonds, and (iii) paying printing, underwriting, legal and other expenses incidental to the issuance of the Bonds; and WHEREAS, the Bonds will be secured by and payable from net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated by the Project and net revenues with respect to City management of parking facilities owned by third parties (the "Net Parking Revenues"); and WHEREAS, an open public hearing on the question of the issuance of the Bonds has been held before the City Council on November 1, 2011, following publication of notice thereof in the Northwest Arkansas Times on October 21, 2011; and WHEREAS, the City has determined to issue and secure the Bonds pursuant to a Trust Indenture (the "Trust Indenture"), by and between the City and Simmons First Trust Company, N.A., as trustee (the "Trustee"), a form of which has been presented to and is before this meeting; and WHEREAS, the City proposes to enter into a Bond Purchase Agreement (the "Bond Purchase Agreement") in substantially the form presented to and before this meeting, with Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), providing for the sale of the Bonds. NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Fayetteville, Arkansas: Section l: The City Council hereby finds and declares that the acquisition, construction and equipping of the Project is in the best interest of the City and its residents. Section 2: Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution of Arkansas and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Parking Revenue Improvement Bonds" (the "Bonds"). The Bonds shall be issued in the original aggregate principal amount of not to exceed Six Million Five Hundred Thousand Dollars ($6,500,000), shall mature not later than June 1, 2037, and shall bear interest at the rates specified in the Bond Purchase Agreement. The average yield on the Bonds as a whole shall not exceed 5.00% per annum. The proceeds of the Bonds will be utilized, along with other available moneys, to finance the costs of the Project, to establish a debt service reserve for the Bonds, and 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. The Bonds shall not be secured by general revenues of the City, but shall be payable from and secured by Net Parking Revenues. The Mayor is hereby authorized and directed to execute and deliver the Bonds 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, 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. 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 (the "Trust Indenture"), by and between the City and 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 Net Parking Revenues to the Bonds 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.) 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 a Bond Purchase Agreement on behalf of the City, to be dated as of the date of its execution (the "Bond Purchase Agreement"), by and between the City and the Underwriter, and 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 continuing disclosure of certain financial and operating information with respect to the City and the Net Parking Revenues in compliance with the provisions of Rule 15c2-12 of the U. S. Securities and Exchange Commission, the Mayor is hereby authorized and directed to execute a Continuing Disclosure Agreement to be dated as of the date of its execution (the "Continuing Disclosure Agreement"), by and between the City and the Trustee, and the Mayor is hereby authorized and directed to cause the Continuing Disclosure Agreement to be executed by the Trustee. The Continuing Disclosure Agreement is hereby approved in substantially the form submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order .to complete the Continuing Disclosure Agreement in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Continuing Disclosure Agreement, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Continuing Disclosure Agreement in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 7: The various rates and amounts for the parking fees, rents, fines and charges generating the Net Parking Revenues previously enacted by the City Council are hereby ratified and confirmed. Section 8. 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 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 9: The Bonds are hereby designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The City hereby represents and covenants that the aggregate principal amount of its tax-exempt obligations (excluding "private activity bonds" within the meaning of Section 141 of the Code), including those of its subordinate entities, issued in calendar year 2011 will not exceed $10,000,000. Section 10: Kutak Rock LLP, Little Rock, Arkansas, is hereby appointed to act as Bond Counsel on behalf of the City in connection with the issuance and sale of the Bonds. Section 11: The adoption of this Ordinance is intended as the City's "official intent" to reimburse itself from the proceeds of the Bonds for preliminary costs of the Project and related expenses advanced by the City. M Section 12: 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 13: All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. PASSED and APPROVED this 15t` day of November, 2011. APPROVED: ATTEST: �/'Y1tiL/ t;14LD JO i 1Vlayor SONDRA E. SMITH, City Clerk/Treasurer `���gnnnrrrrr�� ;, ° •moo =Us o o a FAYETTEVILLE d _ m 9 Mayor Lioneld Jordan City Attorney Kit Williams City Clerk Sondra Smith City of Fayetteville Arkansas City Council Meeting Minutes November 15, 2011 City Council Meeting Minutes November 15, 2011 Page I of 15 Aldermen Ward 1 Position 1 — Adella Gray Ward I Position 2 — Brenda Boudreaux Ward 2 Position 1 — Mark Kinion Ward 2 Position 2 — Matthew Petty Ward 3 Position I — Justin Tennant Ward 3 Position 2 — Robert Ferrell Ward 4 Position I — Rhonda Adams Ward 4 Position 2 — Sarah E. Lewis A meeting of the Fayetteville City Council was held on November 15, 2011 at 6:00 p.m. 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 Gray, Boudreaux, Kinion, Petty, Tennant, Ferrell, Adams, Lewis, Mayor Jordan, City Attorney Kit Williams, City Clerk Sondra Smith, Staff, Press, and CAudience. Pledge of Allegiance Mayor's Announcements, Proclamations and Recognitions: Don Marr, Chief of staff announced that the City of Fayetteville received a Digital Cities Award as the 7 h Top Digital City in the Nation from the Center for Digital Government and Digital Communities Program. City Council Meeting Presentations, Reports and Discussion Items: None Agenda Additions: None Mayor Jordan stated that Fayetteville Police Department Policies would be pulled from the Consent Agenda for discussion. Consent: 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayettevi Ile. o rg Telecommunications Device for the Deaf TDDITTY (479) 521-1316 (_ City Council Meeting Minutes November 15, 2011 Page 2 of 15 Approval of the November 1, 2011 City Council meeting minutes. Approved Bid #11-57 Diamond International: A resolution awarding Bid #11-57 and approving a contract with Diamond International of Lowell in the amount of $94,703.40 for the purchase of one (1) 2012 International 7300 diesel truck with belly plow and dump body for the use by the Transportation Division. Resolution 195-11 as recorded in the office of the City Clerk. Bid #11-61 Associated Fiberglass Enterprise: A resolution awarding Bid #11-61 and approving a contract with Associated Fiberglass Enterprise in the amount of $23,814.16 for the purchase of a 6,000 gallon alum storage tank for the Noland Wastewater Treatment Facility. Resolution 196-11 as recorded in the office of the City Clerk. 2011 Bulletproof Vest Partnership Program: A resolution authorizing acceptance of a fifty percent (50%) matching grant award from the 2011 Bulletproof Vest Partnership Program in the amount of $4,550.00 for the replacement of fifteen (15) body armor vests, and approving a budget adjustment. Resolution 197-11 as recorded in the office of the City Clerk. Fayetteville Police Department Policies: A resolution approving Fayetteville Police Department Policies 1.1.1 Law Enforcement Agency Role, 1.2.2 Warrantless Detention, Search and Seizure, and 1.2.4 Domestic Violence. This item was removed from the Consent Agenda for discussion. Prism Education Center: A resolution approving a lease with Prism Education Center for property located at 2190 South Razorback Road pursuant to the Community Development Block Grant Public Facility Lease Program. Resolution 199-11 as recorded in the office of the City Clerk. Wilson Park Bench Donation: A resolution to approve the donation of a public bench in Wilson Park and to thank Jimmy and Jeanie Hill for this donation. Resolution 200-11 as recorded in the office of the City Clerk. Alderman Boudreaux moved to approve the Consent Agenda as read with Fayetteville Police Department Policies removed for discussion. Alderman Kinion, seconded the motion. Upon roll call the motion passed unanimously. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville. o rg Telecommunications Device for the Deaf TDD/1TY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 3 of 15 Fayetteville Police Department Policies: A resolution approving Fayetteville Police Department Policies 1.1.1 Law Enforcement Agency Role, 1.2.2 Warrantless Detention, Search and Seizure, and 1.2.4 Domestic Violence. City Attorney Kit Williams gave a brief description of the resolution and pointed out that there should be two clauses added to the resolution. Police Chief Greg Tabor stated we have looked at this and we are 100% okay with the wording that has been added. Alderman Ferrell: How does a citizen know that it is a field interview? Police Chief Greg Tabor: Usually in that scenario it is very obvious that they are willing to talk to us. City Attorney Kit Williams pointed out Rule 2.2 on the back of the page that was handed out. Alderman Lewis: Is there something that can be added that says the person shall be notified that they are not required to answer the questions? City Attorney Kit Williams: I think that would make people nervous and make them think they are being investigated and suspected of a crime and I would not recommend it. Alderman Lewis: There are plenty of folks that are not aware that it is not required. Police Chief Greg Tabor: Some courts believe that everyone should know what their rights are. I agree with Kit that it could potentially interfere with investigations. City Attorney Kit Williams gave examples of ways this could hamper a police investigation. Alderman Ferrell: I think there may be a happy medium here. I think it would be appropriate if the officer says "do you mind if I ask you a few questions." City Attorney Kit Williams: I am sure that is what they do and I think that would be appropriate. What are we going to do if we say they must start that way and an officer does not say it properly and therefore it is thrown out? Alderman Ferrell: I think some people, when a law enforcement officer is around, it makes them very nervous. I think you could lessen the anxiety by saying "do you mind if I ask you a few questions." Alderman Lewis: And the voluntary nature of the interview shall be communicated or something like this. Alderman Adams: So the reason you are going through these policies is because you haven't considered them since 1999 right? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 4 of 15 Police Chief Greg Tabor: That and we are trying to achieve a CALEA certification. Alderman Adams: So are you looking at examples of what other policies look like? Police Chief Greg Tabor explained the process they use in creating and amending new policies. Alderman Adams: So this is close to what other cities and other CALEA agencies are doing? Police Chief Greg Tabor: That is correct. Alderman Petty thanked the Mayor, Attorney and Chief for making these amendments. He stated the responsibility to know about these policies and the rights that the citizens have rest with the citizens themselves. Alderman Petty moved to amend the policy by adding a second clause at the last sentence which shall read: and shall he immediately terminated if the citizen does not wish to speak and another clause under (3)(a) which shall read: The person shall not he detained and may leave at any time without answering questions. No stop or detention of a person or a driver of a vehicle is allowed. Alderman Boudreaux seconded the motion. Upon roll call the motion passed unanimously. Alderman Petty moved to approve the resolution. Alderman Boudreaux seconded the motion. Upon roll call the resolution passed unanimously. Resolution 19841 as recorded in the office of the City Clerk. Unfinished Business: Parking Revenue Improvement Bonds: An ordinance authorizing the issuance and sale of not to exceed $6,500,000 of Parking Revenue Improvement Bonds by the City of Fayetteville, Arkansas for the purpose of financing all or a portion of the costs of acquisition, construction and equipping of a parking deck facility, authorizing the execution and delivery of a trust indenture pursuant to which the bonds will be issued and secured; authorizing the execution and delivery of an official statement pursuant to which the bonds will be offered; authorizing the execution and delivery of a bond purchase agreement providing for the sale of the bonds; authorizing the execution and delivery of a continuing disclosure agreement; and prescribing other matters relating thereto. This ordinance was left on the First Reading at the November 1, 2011 City Council meeting. Alderman Petty 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. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 5 of 15 Paul Becker, Finance Director gave a brief explanation of the ordinance and the financial plans for this bond project. Alderman Petty: Is paying back any expenditures we make from the fund an action you would recommend us taking, because it seems like that would end up costing us more. Paul Becker explained how the funds would be reimbursed. David Jurgens, Utilities Director discussed the plan of executing this project. Alderman Lewis: Based on the RFQ you are looking at selecting consultants for site selection and design. David Jurgens: The selection process right now would be for the entire project which would be three phases. Alderman Lewis: What would be done in-house? David Jurgens explained who would be on the project team and their roles. Alderman Gray: Are we going to know the sites you are looking at before you start looking at them? David Jurgens: Yes Ma'am. He discussed sites that are currently being looked at. Alderman Petty: Would this come back to the Council at any other point and at what point would the bonds be issued? David Jurgens explained the timeline of the project. Alderman Petty: If we end up with the scenario where we have to take a public private partnership, to develop portions of the structure that may be retail or residential, would we be able to follow a similar process as the Garland Parking deck? David Jurgens stated I met with the University and the people responsible for the contracting of that project. I see no reason why we cannot use the exact same mechanisms for doing the work. Alderman Petty: In the RFQ are we asking that whatever firm is selected be prepared to present those considerations and the options that they give us? David Jurgens: Yes, those are some of the issues that have come forward and that would be part of the requirement to that in the contract. Alderman Petty asked Terry Trotter with the Walton Arts Center if they had done any customer satisfaction surveys with the event parking since it has been implemented? 1,13 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 6of15 Terry Trotter: We have and the results have been fantastic and very positive. Alderman Petty spoke on the city's current needs for a parking structure and discussed various ideas about the project. We need a parking structure in order to free up the existing surface parking lots that we have for future development. I think it is time to consider a parking structure. I think it is time to start. We need to be deliberate and not rush through this. We have to make sure that all the stake holders in the community are part of this. Alderman Ferrell stated Matthew spoke on the public/private partnership the University has. He stated I would not favor anything unless we leased it to them. When I visited with the business owners in the Entertainment District they were very much for putting something there to serve the business needs of the Entertainment District. Alderman Tennant stated we should vote on this tonight. I believe this is a necessary first step in this project. I think we need this. Alderman Lewis stated I will support this. She asked for clarification on what step this is. Paul Becker stated this gives the Mayor the authorization to issue the bonds. Alderman Lewis: So this is the initial step in moving towards this project. ( Paul Becker: Toward funding the project. Mayor Jordan clarified when you authorize me to issue the bonds I will make the decision when the bonds are issued. Alderman Lewis:. So we can't do that unless this group decides to allow you to do that. Mayor Jordan: That's correct. Alderman Lewis: It's important to think ahead in the design and the location and be aware that these things will be coming back to us. I am not supportive of an underground garage at this point because of the karst geology in this area. That is probably not a good idea. Alderman Adams stated I have a lot of confidence in this administration. Everything you have said you would do you have done. I think we have a good Council. I have a good sense of trust that we will move forward together and work hard together to get this right for the City. Alderman Gray stated I think it is time to move on with it and I will support this. Alderman Ferrell moved to suspend the rules and go to the third and final reading. Alderman Lewis 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 accessfayetteville. org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 7 of 15 Mayor Jordan: Every 30 days there will be a report from David on the progress of the project and we will start the selection committee for the architect. He thanked the Council for their hard work. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed unanimously. Ordinance 5457 as Recorded in the office of the City Clerk Sales Tax Capital Fund: An ordnance to enact §34.09 Sales Tax Capital Fund of the Code of Fayetteville. This ordinance was left on the Second Reading at the November 1, 2011 City Council meeting. Alderman Tennant moved to suspend the rules and go to the third and final reading. Alderman Ferrell seconded the motion. Upon roll call the motion passed unanimously. City Attorney Kit Williams read the ordinance. Paul Becker gave a brief description of the ordinance. Alderman Ferrell: It looks like the intent is to come under GASB to establish this account. We have other accounts that are not codified at this time correct? Paul Becker: Yes, that is correct. Alderman Ferrell: I understand for accounting that you want to do that but I hope that you will entertain an amendment to this. City Attorney Kit Williams read the amendment. Alderman Ferrell: The fast majority of our revenue is spent for personnel. When it comes down to making decisions it is probable that one might defer more capital projects. If you defer capital projects, in the long run it is not in the best interest of the citizens because it is going to cost more to complete those projects. Alderman Ferrell moved to amend 34.09 Section B of the ordinance to have an absolute minimum of 35%. Alderman Petty seconded the motion. Upon roll call the motion passed unanimously. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed unanimously. Ordinance 5458 as Recorded in the office of the City Clerk 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayettevi1le. org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 8 of 15 New Business: Amend Chapter 178 (ADM 11-3932 UDC Chapter 178 Outdoor Vendors): An ordinance to amend § 178.03 Sidewalk Vendors of the Unified Development Code to clarify cart requirements. City Attorney Kit Williams read the ordinance. Leif Olson, Long Range Planner gave a brief description of the ordinance. Alderman Adams: Have you received any feedback from the vendors that this will cost them money? Leif Olson: The vendors that are licensed now would not be affected. Alderman Boudreaux: I think this is a good thing. Alderman Boudreaux moved to suspend the rules and go to the second reading. Alderman Tennant seconded the motion. Upon roll call the motion passed 7-0. Alderman Ferrell was absent during the vote. City Attorney Kit Williams read the ordinance. City Attorney Kit Williams: The parts of the ordinance that do not apply to the licensing but to - require what carts must have should apply to all the carts. I think that we need to follow the Fire Departments advice and require the hoods if you are in an enclosed cart cooking grease. A discussion followed on the requirements that fall under health, safety and welfare. Alderman Boudreaux: How would you suggest we make this amendment? City Attorney Kit Williams: The legislative history of indicating that should be retroactive should be enough. If that is your intent I would like you to say so that way the Planning Department will realize how the law should be applied. Alderman Boudreaux: I certainly support that. Mayor Jordan: Does anyone disagree with that? Alderman Boudreaux: No. City Attorney Kit Williams: At the time of their license renewal these requirements should be met. Alderman Lewis: So no amendment is needed? City Attorney Kit Williams: No amendment is needed. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDnTY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 9 of 15 Alderman Ferrell: Does anyone have an idea of what it is going to cost for someone to comply with this? Leif Olson: I do not have an idea. I'm not aware that there are any mobile food vendors, that have been licensed, that are serving food that would meet the requirement for a hood vent at this time. Alderman Boudreaux 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 5459 as Recorded in the office of the City Clerk CH2M Hill Engineers, Inc. Amendment No. 2: A resolution approving contract Amendment No. 2 with CH2M Hill Engineers, Inc. in the amount of $6,656,934.00 for operation, maintenance, management and engineering services for city wastewater treatment facilities and systems, and approving a $70,000.00 contract contingency. David Jurgens gave a brief description of the resolution. Changes that we see for the coming year are both of our wastewater treatment permits have expired and are on hold from ADEQ and EPA pending the White River minerals evaluation and on the Illinois River phosphorus evaluation. Those are two unknowns we are facing this year. We are also bringing the bio solids on line for drying and selling. We are also going to start the Beaver Water District land application of their sludge. We are evaluating Lake Sequoyah to remove sediment from the lake. Alderman Ferrell: Is there was a chance we could get a grant for Lake Sequoyah? Has there been any progress on that? David Jurgens stated we have not found any specific grants yet. He explained the research they have conducted on pursuing grants. Alderman Ferrell: I hope we can do something there because it is a good recreation resource. David Jurgens: If you track aerial photos it's amazing. Alderman Lewis spoke on behalf of the Water and Sewer Committee and she thanked the team for helping to lead us to find these ideas. Alderman Boudreaux moved to approve the resolution. Alderman Gray seconded the motion. Upon roll call the resolution passed unanimously. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteviIle. org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 10 of 15 Resolution 201-11 as recorded in the office of the City Clerk. AT&T Arkansas Plexar Telephone Line Services: An ordinance waiving competitive bidding and approving a contract with AT&T Arkansas in the amount of $91,200.00 for Plexar Telephone line services. City Attorney Kit Williams read the ordinance. Don Marr gave a brief description of the ordinance. Alderman Ferrell: When is the whole thing expected to be complete? Don Marr gave an estimated timeline and discussed the process that would be used. Alderman Ferrell: I think it is a good idea that we look into this. Don Marr: I think there is tremendous savings that you are seeing. Alderman Gray moved to suspend the rules and go to the second reading. Alderman Lewis seconded the motion. Upon roll call the motion passed unanimously. City Attorney Kit Williams read the ordinance. Alderman Tennant 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. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed unanimously. Ordinance 5460 as Recorded in the office of the City Clerk AT&T Arkansas Managed Internet Services: An ordinance waiving competitive bidding and approving a contract with AT&T Arkansas in the amount of $22,548.00 for managed internet services. City Attorney Kit Williams read the ordinance. Don Marr stated this is exactly the same contract extension as previously described. Alderman Gray moved to suspend the rules and go to the second reading. Alderman Tennant seconded the motion. Upon roll call the motion passed unanimously. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 11 of 15 City Attorney Kit Williams read the ordinance. Alderman Tennant 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. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed unanimously. Ordinance 5461 as Recorded in the office of the City Clerk Ambulance Services Interlocal Agreement: A resolution approving an amendment to the Interlocal Agreement for Ambulance Services. Fire Chief David Dayringer gave a brief description of the resolution. Alderman Petty: Chief, you came from Tulsa previously. Did they have a similar arrangement in Tulsa? Fire Chief David Dayringer: Yes they do, it's a public utility model similar to this one. Alderman Petty: How does our agreement compare to the one in Tulsa? Are there efficiencies that we might be able to gain with operational changes? Fire Chief David Dayringer: The operational changes are looked at by the Washington County Regional Authority monthly. They are reviewed by administration from the Ambulance authority personnel. The agreement is similar to the agreement that is used in Tulsa. Alderman Petty: Has Central EMS been able to meet our goals for response times? Fire Chief David Dayringer: The goal is to respond within 6 minutes 90% of the time and their responses are in the low 80%. There are some additions that we are looking at for next years budget to add a unit that would improve the response times for the authority within Fayetteville. Alderman Petty: Would you say those response times are pretty typical? Fire Chief David Dayringer: I think they are standard response times. I meant to say 8 minutes and 59 seconds earlier for a typical response time. Alderman Petty: Why does the Fire Department respond to non fire emergencies when all that is needed is Central EMS? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteviIle, org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 12 of 15 Fire Chief David Dayringer: Since we are already at the Fire Station and have the training and tools to get there faster than the transport unit we are in a better position to arrive early. Alderman Ferrell: The multiple locations of the Fire Department gets them there quicker. Alderman Petty: Why do we need Central EMS if the Fire Department is trained and equipped to handle emergencies? Fire Chief David Dayringer stated one of the big reasons is the expense to provide that service. He discussed the value of having Central EMS. Alderman Boudreaux stated we have not done this interlocal agreement for very long. She also discussed the information that had previously been put together regarding the efficiency and need for Central EMS. City Attorney Kit Williams: The ambulance and paramedics have a lot more equipment than we have along with higher training than our firefighters. Don Marr addressed the concerns regarding the working relationship with the County Regional Authority and stated we have an excellent working relationship. Mayor Jordan: Becky, you all have done a wonderful job and we appreciate you. Alderman Ferrell moved to approve the resolution. Alderman Petty seconded the motion. Upon roll call the resolution passed unanimously. Resolution 202-I1 as recorded in the office of the City Clerk. Community Access Television, Inc.: A resolution to renew with slight modifications the second year of the contract with Community Access Television, Inc. in the amount of $93,000.00 to operate the Public Access Channel throughout 2012. Don Marr gave a brief description of the resolution. Alderman Petty: I was on the Selection Committee when we put this to bid and I think we made the right decision to hire Your Media again. Don Marr: We too are extremely pleased with the work that Anne Shelley and her leadership have provided to the Your Media and public access services. It is probably the best year that I can remember. Alderman Ferrell: This year has been a God send in the way it is being operated so thanks to everybody that has been involved in it. Alderman Lewis: I appreciate the work taking place as well so thank you. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayettevi Ile. 0 rg Telecommunications Device for the Deaf TDDlTTY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 13 of 15 Alderman Petty moved to approve the resolution. Alderman Boudreaux seconded the motion. Upon roll call the resolution passed unanimously. Resolution 203-11 as recorded in the office of the City Clerk. 2012 Annual Budget and Work Program: A resolution adopting the 2012 Annual Budget and Work Program. Paul Becker gave a brief description of the proposed budget. Alderman Ferrell: Is there any chance you will have the September Sales Tax Report by our meeting on Saturday? Paul Becker: I don't know if I will or not. It usually comes about the 21" of the month. Alderman Petty moved to table the resolution to the December 6, 2011 City Council meeting. Alderman Lewis seconded the motion. Upon roll call the motion passed unanimously. This resolution was tabled to the December 6, 2011 City Council Meeting. ADM 11-3782 Cottage House Development: An ordinance to enact § 164.22 Cottage Housing Development into the Unified Development Code, to amend § 162.01 to add (RR) Unit 44 Cottage Housing Development and to amend Chapter 161 Zoning District to authorize Cottage Housing Developments as a right in multi -family residential districts and as a conditional use in single family residential districts. City Attorney Kit Williams read the ordinance. Leif Olson gave a brief description and presentation on the proposed ordinance. He thanked Alderman Kinion and Ferrell for helping vet this process and for sponsoring the ordinance. Alderman Lewis: Will you be doing recycling at this project and if so will it be a collection type or will it enable individual collection bins? Leif Olson: We would want them to be serviced like you would service in a single family residential. They would get collection carts and recycling bins. We ran into some issues with bulky waste pickup and how that might work. We talked about if these are located in an area that is primarily served by our commercial Solid Waste dumpster trucks, then Solid Waste might want them to utilize that service just for the fact that it's more efficient. Alderman Lewis: Is there incentive with this similar to the other form based codes? Is there that kind of incentive to implement this built in? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville. org Telecommunications Device for the Deaf TDD/TTY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 14 of 15 City Attorney Kit Williams: There are substantial incentives to make this a much less expensive way to build single family housing. Alderman Boudreaux: There is no street down into this. Leif Olson: There wouldn't have to be, no. It's going to take some site planning with each one of these as they come through to make sure that that is a doable thing. Jeremy Pate: They are going to have to think about where they would take their cart or recycling bin. There would be much more design up front as opposed to just letting it happen on the back end. Alderman Boudreaux: The other issue I see is the water and sewer but all of that would be worked out. On the surface it sounds good but I wouldn't want to pass this tonight. Alderman Kinion: One way to look at this is a hybrid of a multi -unit situation but allowing an individual to be a homeowner. It is also going to allow diversity in areas of town that are already developed. Alderman Boudreaux: The only issue I am seeing is the separation of utilities. I just want to think about it a little more. Alderman Ferrell: When this ordinance passes do you see somebody moving towards that? Leif Olson: We have a number of people that have been looking at this. There is some interest in the development community out there. Alderman Boudreaux: This is currently in multi -family zoning and conditional use in single family. What about some of the new, zones? Leif Olson: If multi -family housing is permitted by right in those zoning districts then we proposed it to be by right. City Attorney Kit Williams: You can look at Exhibit "B" and it lists all the new zoning districts that allow residential and it tells you whether or not it's a use by right or a conditional use. Alderman Adams: You mentioned that a developer could submit a plan that you all might consider the social. Why would that be a part of your decision as to whether or not to grant it? Leif Olson: This ordinance would allow you up to 12 units so if you wanted to do more than 12 staff is going to look at the layout. At a certain point you may get so many of them that it functions more like an apartment complex where you don't know your neighbors. They are trying to create a social cohesion. Alderman Adams: You all determine whether or not it's social? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteville.org Telecommunications Device for the Deaf TDDITTY (479) 521-1316 City Council Meeting Minutes November 15, 2011 Page 15 of 15 Leif Olson: We would look at a variety of different things. City Attorney Kit Williams: There would be a lot of other things to look at to see if it would work. That decision would be made by the Planning Commission, Alderman Lewis: There is a lot of research out there that shows a tipping point beyond where you have the number of people that feel engaged. Alderman Adams: I am supportive of it and I love what. you have done but the word social, I want us to be careful with that. Alderman Kinion: As discussion progresses I want to keep it on track. This is going to allow individuals to have home ownership that may not otherwise have it. It will also allow infill in areas that otherwise may not be easily developed. Alderman Boudreaux moved to suspend the rules and go to the .second reading. Alderman Ferrell seconded the motion. Upon roll call the motion passed unanimously. City Attorney Kit Williams read the ordinance. This ordinance was left on the Second Reading Meeting adjourned at 8:20 p.m. C �Amilyu �, &A- o eld Jord ayor Sondra E. Smith, City Clerk/Treasurer 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 accessfayetteviIle. org Telecommunications Device for the Deaf TDDfFTY (479) 521-1316 . NORTHWEST ARKANSAS DEMOCRAT-GAZ.E17E NORTHWESTARKANSAS THE MORNING NEWS OF SPRINGDALE THE MORNING NEWS OF ROGERS NEWSPAPEJL%OLLC n L{ NORTHWEST ARKANSAS TIMES BENTON COUNTY DAILY RECORD 212 NORTH EASTAVENUE, FAYETTEVILLE. ARKANSAS 72701 1 P.O. BOX 1607, 72702 1 479-442.1700 1 WWW.NWANEWS.COM AFFIDAVIT OF PUBLICATION I, Cathy Wiles, 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 5457 Was inserted in the Regular Editions on: November 24, 2011 Publication Charges: $ 440.98 Cathy Wiles Subscribed and swor to bef re me This6�$kday of / "X(2011. Notary Public My Commission Expires: SANDRA E. SGHACHERBAUER BENTON 001LIKY Nr1AhY.USL1C•ARKANSAS m:, Commission "15. 2017 Commission Nm 19=21 **NOTE** 2 lease do not pay from Affidavit. Invoice will be sent. NOV 2 9 2011 CITY OF FAYETTEVILLE CITY CLERK'S OFFICE ORDINANCE NO.6W T ORDINANCE AUTHORIZING THE ISSUANCE RI 'SALE EV NOT IMPROVEMENT EXCEED 56,50Q0 S OF /%)/� i1F3KING REVENUE IMPROVEMENT BONDS BY t G Y ,'Lj+ G 9,. �oiYd Them {s. hereby a�iodzed a� approved aPreWnineryOfficlal Statement of the t�j,,E,CITY. OF FAYEfTEVILLE, ARKANSAS FOR THE 1 InclLng the ;over Me andappendlces•attachad thereto, relating to the Bonds. The %RROSE OF FMNCING ALL OR A PORTION OF �pKANSAS lahk>a,y Official Statement; ls.hereby "deemed final" by the City within the meaning of E ;COSTS OF ACQUISITION, CONSTRUCTION r $ecxaltles and Exchange Commission Rule 15c2.12,; The distribution of the Pretminary pND ,EQUIPPING OF .A PARKING DECK FACILITY; AUTHORIZING THE EXECUTION IC191>Stetement Is hereby approved, The Preliminary Olflduil StaterrneM,'es errner lied to AteD DEIVERY OF A TRUST INDENTURE PURSUANT TO WHICH THE BONDS WILLtorrri to the terms of the Bond Purchase Agreement, it uding Exlyblt A thereto, and BE ISSUED AND SECURED; AUTHORIZING THE' DCCCUTION AND DELIVERY OF t W S other oranges and amendments as era mutuagy agreed to by` -'the City anti.tha <?FFICIAL STATEMENT PURSUANT TO WHICH THE BONDS WILL BE OFFERED tis tJnd[,0VQr Is j erelh referred to as the "l)fficlel Statement; and the Mayor Is hereby autho- { yWT}1ORONO THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT w n.e>4ecute 1h6;Official Statement jot and.on behalf of the City. The;Officlel Statement Is PPOV DING FOFi THE SALE OF THE BONDS; AUTHORIZING THE EXECUTION AND �le+et?Y eappOQ, 'ed In sUbstenfi* the form of the.Pr4min* Official Statement submitted to ,DEL7UEFiY`OF A CONTINUING DISCLOSURE AGREEMENT; AND PRESCRIBING OTHER , ; thlerr)ee9ng 'and the'Mayor.is he a ,' authorized; to confer vMh the Trustee, the Underwriter YPIATfEAs RELATING THERETO, and Bond Counsel In Order .to comoblle'the Official Statement in substantially fie farm of WHQtEAS the C ty of Faye3tew7 e, Arkansas (the'Gty ), her determined that there b a need Preliminary Qfflclal Stetement subrrjJtted to this meeting; with such changes' as shall fprjhaeasad parting capacity h the Cly s Entertainment District and desires to provide such Proved by such persons, the Mayors execAon tO.constitute conclusive evidence of capacity through the acquisition, construction and equipping of perking deck facilities and S ctn ePProv3 ;r related roadway and other improvements, such facilities and Improvements to be located x( _,I Ioa Is given that a copy bf pr a Prell ninary:Official Statement ie on @le wit tlhe,Ciry Clerk Within the Entertainment District Perking Zone (the "Project"); and d is ayallebje for Igspectign by;$ny iriterasted person WHEREAS, the City Is authorized.and empowered under the provisions of the Constitution •6.,1n•orderto preserit3e "Aerhs and cpndNkuu upon w1VclYthe Bonds are to be.. and laws of the State of Arkansas, Including particularly Amendment 65 to the Constitution soil to the Underwriter, the Mayor is hereby 'auf fted and directed to execute a Bond :end Arkansas Code Annotated (1996 Repl. & 2011 Supp.) Sections 14-164-401 at seq. (as * Agreement on behalf of the City, to be dated as of the date of fts.exeoutloa (the from time to time amended,,VV'ActJ, to Issue and sell Its revenue bonds and to expend the Bond Purchase AgreemenYj, by and between the City and the Underwriter; end thaBOnd' proceeds thereof to ffnence`th9 costs of 'capital Improvements' (as defined in the Act), such Purchase Agreement is hereby approved in subst 3nteVy the form submitted to this meeting,, as, those improvements comprising the Project; and found tne,Mayor is hereby authhorzed to: cori(er'wtth the l7nderwriteF end Bond Counsel in order a;WHOEAS, in accordance with the provisions of Amendment 55 and the Act, the City has to ctirnplete the Bond Pu otiose Agree 7&tt In subatantluily the torte submitted to Ws meet. detelTnirlecl to issue Its Parkhig. Revenue Improvement Bonds (the 'Bonds' in the aggregate QW with such changes as shell be approved by such persons exewtlng the Bond purchase pjjn ai amount of not to exceed $8,500,000 for the pu pose of @ fnandrg some or a l of g Agre9rrn$pt their execution to con., a conclusive evidence of ouch approval, tF Q costs of acquisition, construction and equipping of the Project, (In establishing a debt (Advlce`Ts given that a Copy 6f. n& Bond Purchase:Agreement in substantially the form' `'service reserve for the Bonds, and (III) paying printing, underwriting, legal and other expenses c a., hohzed to be exPoutted is on_ple with the City Dark .and .2vaNe6le for Ins 00 ntal to the.issuance of the Bonita; and 1,ntereste'd Inspection by ' Vl(fiEREAS, the Bonds will be secured by and payable from net revenues (after provision TSeotion 0 in order tb gpdgla`tor continuing disclosure of certain financial and operating %t uk,@ pperation and maintenance expenses, including previous debt for parking equipment) xlnfgrtnetbrr with respect, to th'e'.City and the Net ParkinglRevertues'Mcomp with the ttnotutable to parking fees, leases; rents fines charges and other revenues co@ected by the : z provisons of Rule 1562 1 of the U. S. Securities and Exchange Commission, the Mayor is 6r 11 h with respect to its meters, lots and other parking facilities, and including net revenues to 3hereby authorized and directed to execute a'Continuin Disclosure was of the date of Its execuI the 'Continuing DIsdasure Agfeamenf to be dated generated by the Project and net revenues with respect to City management of parking , , f _ ( in9 Agreement) by and between r faclBtles owned by third parties (the 'Not Parking Revenues'); and € `and the Trustee erirf the Mayorls'hereby authorized..and dr :'- to cause the Xr-WFtERFA3, an open public hearing on the question of the Issuance of the Bonds has been Continuing Disclosure AgrserneM tobe: executed by the Trustee. The Continuing fllselosure . : heid'before the City Council on November 1, 2011, following publication of notice thereof in rjement Is hereby . oved in substantially the form ai;pmi(ted to :this meetilg;'and the the Northwest Arkansas Times on October 21, 2011; and ay- is'hanebY-authorized to confer witri the Trustee; -the Uriderwrfler and Bond CounSat. WHEREAS, the City has determined to Issue and secure the Bonds pursuant to a Trust In order to complete the Continuing Disclosure Agreement in substentlally the (orir subrttft :Indenture (the "Trust Indenture'), by and between the City and Simmons First Trust ted to:this meeting, with such changes ae'shall be approved by anal persdha' executing Company. N.A,, as trustee (the 'Trustee'), a form of which has been presented to and Is the ConlinUng Disclosure Agreement, their execution to bonstihRe conad" BM of of before this meeting; and such approval. WHEREAS, the City proposes to enter into a Bond Purchase Agreement (the "Bond It Advic;a is given that a copy of the Continuing Dlscoac a Agreement in s batantally: tine forth Purchase Agreement') in substantially the form presented to and before this meeting, ut or✓zecl to be gi Pouted Is on flue with the City Clark and is available for hspeotion by arty with Stephens Inc., Fayetteville, Arkansas (the 'Underwriter'), providing for the sale of the � NfIterestedon.) Pers. Bonds. t89otiorf'7. The various rates and argnnta for the Parking fees ran*. nos and charges NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF 9aLteratln9 the Net Parking Revenues previously enacted by the City Council are heriby FAYETTEVILLE, ARKANSAS: rC1 grip OonS ri ed.'. Seatfon 1. The City Council hereby finds and declares that the acquisition, construction and R46' onXB: The Mayor and City Qlerk, for and on behalf.of.the ty rrrafld dir ed tv do anx and all th Cm, are hereby authorized equ Aping of the Project is In the best interest of the G and Ira res dents. Ings necessary to effect the issuance, sale, execution and. �— Sutatlon 2. Under the authority of the Constitution and laws of the Sete of Arkansas Fd Nary tine Bonita'and to effect the execution and:deGvery of the Test Indenturefile f .. Including particularly Amendment 65 to the Constitution of Arkansas and the Act, there is BojldPurchaseAtjreement the QHicle�Statemer t the Corntinury f the nJst I reerrnent and I v hereby authorized the Issuance of bonds of the City to be designated as'Par 'Parking Revenue pp ; a fax k giifatory Agreement relating tq the. tax exenhptlon o. interest on the Bonds, and to ' improvement Bonds' {tile "Bonds"). The Bonds shall be Issued in. the original aggregate aPelforf�el.a<tha obligations of the City under and purauantltuereto. T}ne Mayor and the City rid amount of not to exceed Six Million Five Hundred Thousand Ddlars ($6,500,000) Clerk ltutherat tllorizad and directed, for acid on behelfof the C:to execute ail papers, O Pnt - Ns ro s shall mature not later than June 1, 2037, and shell bear Interest at the rates specified h the x documents, cer(iflcateS end othei instruments that may lie recxulred torthe carrying a errs, Bond Purchase Agreement. The average yield on the Bonds as a whole shall not exceed sUCh authority onto evlderxXe ":axerdse;tharaoi, 5.00% per annum. The proceeds of the Bonds will be uti zed, along with other available Seelld"n"B: The`Bbnds'a heretiydesl designated as 'qualified. q mpt obligations' withh" rflo{nays, to finance fie costs of the Project, to establish a debt service reserve for the Bonds , the meaning of Section 265(b)(3) of the internal Revenue Code of 1986, a9 emended (the y tad So pay printing, underwriting, legal and other expenses incidental to the lesuance of the ' Code. The City hereby represents and covenants that the aggregate prin�pal amount Of ass ncis-The Bonds shall be issued In the forms and denominations, shall be dated, shell be j itetax exempt obligations (excluding private activity bonds' within the meaning of 3ectlon Fv{ 1tf?umtlered, and mature, shall be subject to redemption prior to maturity, and shall contain -141 of the Code), Including those of Its subordinate entitles; Issued In calendar year got , e ,stuch of w-terms, covenants and conditions, all as set forth in the Trust Indenture. The Bonds � c Qt excaAd $10,000 tX10 ;. 6 e .k6biat be secured try general revenues of the Clty, but shall be payable from and secured Secti 10. Kutak Rock LLP tittle Rook Arkansas F8 ry j ry, Weby appointed to act as Bond. j� t Net:Park rig Revenues. Counsel dui bare f of the Ctty fn oonnectkan with the issuance and eu of the Bonds y)ayor Is hereby authorized and directed to execute and deliver the Bonds In sub SeetjonF11'lh a adoption of thlgOidinance is intended as'tlie City s 'Official Intent to'relm. starih ,N the forth thereof contained In the Trust Indenture.euhmkted to this meeting, and burrati ftWfrom the'prpceeds df the bonds forpreliminmy;costs of the Protect and relete{J fly Clerk Is hereby authorized and directed to execute and deliver the Bonds and to expenses advanced by C1tyi seal othe City thereto, and the Mayor and CityGerk are hereby authorized and v �a y4eCtion 12 The prowls ions of )hfa,Ordhence are hereby declared to be sevwabp� and Xs- 'to cause the Bonds to be accepted and authenticated by the Trustee. The May anyisection;, phrase or.provi otn }Yiejl for arty mason be dedered to bp' � le pr. d �ugylf 3 s heretiy authorized to confer with the Trustee, the Underwriter, and Kutak Rock LLP, Litre r 'dedamtionshefi not affectdlia validjtY of ttil;Fernelrxiar of the sections pt rpses ofpr Rock, Arkansas ("Bond Counsel°), in order to complete the Bonds in substantially the form of this Ordce 'contalned In the Trust Indenture submitted to this meeting, with such charges as shall be 'Section 13' All ordhwoos' resolutions and, Parts thereof In conflrot herewith areh� approved by such persons executing the Bonds, their execution to constitute conclusive i feP e� 6 the extent of arch conflict evkoce of such approval. F pASED and APPROVED thls 15th day pf November ir. Seoeon 3. To prescribe the terms and conditions upon which the Bonds are to be executed AP MOVED: A°fTEST authenticated, issued, accepted, held and secured, the Mayor is hereby authorized and S s drepted to execute and acknowledge the Trust indenture (the ?rust Indenture'), by and !(dNELO JORDAN; Mayor ,'BY: �ONDRA E SMITH Gly Claiufrearurer ��nl between the City and the Trustee, and the. City Clerk Is Hereby authorized and directed to r - execute and acknowledge the Trust Indenture; and to affix the seal of the Gty thereto, and ) `the'Mayor and the City Geri are hereby authorised and directed to cause the Trust indenture to be accepted, executed and acknowledged by the Trustee. The Trust Indenture is hereby approved in substantally the torm submitted to this meetng, Inducing, without Ilmftstlon e,.' pro ions thereof pertelning to the pledge of Net Parking Revenues to the Bonds and I _`the terms of the Bonds, The Mayor is hereby authortmd to confer with the Trustee, the NUnderw - er and Bond Cou nsel In order to complete the Trust Indenture In substantially the f Virtu . Sutxnitted to this meeting, with such changes as shall be approved by such persons• k A.executlng the Trust Indenture, their execution to constitute conclusive evidence of such j [F* `"approval be (Advice is given that a copy a the Trust Indenture il ble for Inspection the torn authorized to be executed is on f with the City Clerk and Is available for lnspecUon by any .interested'. RECEIVED Nov 2 9 2011 CITY OF FAYETTEVILLE CITY CLERK'S OFFICE EXHIBIT F COSTS OF ISSUANCE Bond Counsel Fee and Expenses Kutak Rock LLP 124 West Capitol Avenue, Suite 2000 Little Rock, AR 72201 Trustee Acceptance Fee Simmons First Trust Company, N.A. 501 Main Street Pine Bluff, AR 71601 Underwriting Expenses Stephens Inc. 111 Center Street P.O. Box 3507 Little Rock, AR 72201 $35,000.00 2,500.00 2,084.78 Total: 39 584.78 4842-3628-2386.1 F-1 KUTAK ROCK LLP LITTLE ROCK, ARKANSAS Telephone 501-975-3000 Facsimile 501-975-3001 Federal ID 47-0597598 December 19, 2012 City of Fayetteville, Arkansas Fayetteville, AR $6,220,000 CITY OF F'AYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BONDS SERIES 2012 Check Remit To: Kutak 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 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: Invoice No. 1810722 Matter No. 1123401-21 35 000.00 4838-1429-8642.1 Clearing: Stephens Jackson T. Stephens, 1923-2005 Chairman Emeritus in Perpetuity $612201000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 CUSIP Service Bureau DTC Misc. (Postage, Federal Express, Ticket Charges) Day Loan Total $ 722.00 520.00 670.00 172.78 $2,084.78 Stephens Inc. 111 Center street 501-377-2000 t Little Rock, AR 72201 501-377-2666 f 800-643-9691 www.stephens.com 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 K U TA K ROCK L L P 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.kutakrock.com OMAHA PHILADELPHIA RICHMOND SCOTTSDALE WASHINGTON December 19, 2012 WICHITA VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED Internal Revenue Service Center Ogden Utah 84201 7011 3500 0001 2965 6868 $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 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, lAk, ' r Go on M. Wilbourn js Enclosure 4828-2025-1410.1 Form 8038-G Information Return for Tax -Exempt Governmental Obligations (Rev. September 2011) ► Under Internal Revenue Code section 149(e) OMB No. 1545-0720 ►See separate instructions. Department of the Treasury Internal Revenue Service Caution: If the issue price is under $100,000, use Form 8038-GC. Reporting Authority If Amended Return, check here ► ❑ 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 mall Is not delivered to street address) Room/suite 5 Report number (For IRS Use Only) 113 West Mountain Street E=, 13 6 City, town, or post office, state, and ZIP code 7 Date of Issue Fayetteville, AR 72701 12-19-12 8 Name of issue 9 CUSIP number Parking Revenue Improvement Bonds, Series 2012 31266V AS4 10a Name and title of officer or other employee of the Issuer whom the IRS may call for more information (see 10b Telephone number of officer or other instructions) employee shown on 10a Gordon Wilbourn, Kutak Rock LLP (501) 975-3000 Type of Issue (enter the issue price). 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 ► Parking facilities 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 1 6,196,9991 00 _ z jJ 3 3 Yi i Description of Obligations. Complete for the entire issue for which this form is beingfiled. (a) Final maturity date (b) Issue price (c) Stated redemption price at maturity (d) Weighted average maturity (e) Yield 21 6-1-37 6,196,999 6,220,000 14.458 years 3.1490 % FOM Uses of Proceeds of Bond Issue (including underwriters' discount) 22 23 24 25 26 27 28 29 30 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . Issue price of entire issue (enter amount from line 21, column (b)) . . . . . Proceeds used for bond issuance costs (including underwriters' discount) . 24 148,850 Proceeds used for credit enhancement . . . . . . . . . . . . 25 Proceeds allocated to reasonably required reserve or replacement fund 26 190,316 Proceeds used to currently refund prior issues . . . . . . . 27 Proceeds used to advance refund prior issues . . . . . . . . . 28. Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) . . . 00 00 . 22 8,876 00 23 6,196,999 00 339,166 00 29 30 5,857,8331 00 FOM Description of Refunded Bonds. Complete this part only for refunding bonds. 31 32 33 34 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . Enter the last date on which the refunded bonds will be called (MM/DD/YYYY) . . . . . . Enter the date(s) the refunded bonds were issued ► (MM/DD/YYYY) ► years ► years ► For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773S Form 8038-G (Rev. 9-2011) Form 8038-G (Rev. 9-2011) Page 2 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35 0 00 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract 41 " g P 9 �r,.:»...,, (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 ► d 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 00, 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 . . . . . ► 0 45a 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 00- Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge Signature and belief, they re true, correct d complete. I further declare that I consent to the IRS's disclosure of the issuer's return information, as necessary to and process this r rn, to the per n tha I have a orized above. Consent Lioneld Jordan, Mayor Signature of issuer's hcriz representative Date Type or print name and title Paid Print/Type preparer's ame Pr arer's signat , Date Check ❑ if PTIN Preparer Gordon Wilbourne self-employed P01079125 Use Only Firm's name ► Kutak Rock LLP Firm's EIN ► 47-0597598 Firm's address ► 124 W. Capitol, Suite 2-00b, Little Rock, AR 72201 Phone no. (501) 975-3000 Form 8038-G (Rev. 9-2011) ro co _o I' Postage nJ Certified Fee d Return Receipt Fee C3 (Endorsement Required) iI Restricted Delivery Fee Q (Endorsement Required) E3 Lrl Total Postage & Fees M Sent To ri St P �n r- Street ,� t. N. l.I ` [� or PO Box No. --------------- -------� C' tate, ZI 4 :ir d w t SENDER: COMPLETE THIS SECTION COMPLETE THIS SECTION ON DELIVERY 006mplete items 1, 2, and 3, Also complete A. Signature item 4 if Restricted Delivery`Is desired. ❑ Agent X r ■ Print your name and address on the reverse ❑ Addressee B. Received by (Printed Name) 4""' C. bate of Delivery s0 that We Can return the card to you. ° ■ Attach this card to the back of the maiipiece, 4=1 or on the If space permits, D. Is deg38ry atld' d e tfirtt 1? ❑Yes if YES, enter del' ad ess taw: ❑ No 1. Article Addressed to: a, c v c-> t 3. Sery ce Type g Mai ❑ Ssil Urtlfled //❑ Registered °. ❑ Ret1wipt for Merchandise ❑ Insured Mall. ❑ C.O.D. 4. Restricted Delivery? (Extra Fee) ❑ Yes r 2. Article Number 7 (� �O (� (Transfer from service /abed PS Form.3811 i February 2004 Domerjc Return. Receipt 102595-02-M-1W BOND PURCHASE AGREEMENT December 11, 2012 City of Fayetteville City Administration Building 113 West Mountain Fayetteville, Arkansas 72701 $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 Ladies and Gentlemen: EXECUTION COPY On the basis of the representations, warranties and agreements and upon the terms and conditions contained herein, the undersigned, Stephens Inca (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 the date set forth above. 1. General. Upon the terms 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 $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds, Series 2012 (the "Bonds"), at a purchase price (the "Purchase Price") of $6,088,148.55 (equal to the par amount of the Bonds less a net reoffering discount of $23,001.45 and less underwriter's discount of $108,850.00) plus accrued interest, if any, from December 1, 2012 to the Closing Date (hereinafter defined). The Bonds shall be issued by the City pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 to the Constitution and Arkansas Code Annotated (1998 Repl. & Supp. 2011) §§14-164-401 et seq. (the "Local Government Revenue Bond 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 all net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities 4831-5568-3595.5 owned by third parties (the "Net Parking Revenues"), and (2) moneys or investments on deposit in the Revenue Fund, Bond Fund, Debt Service Reserve Fund and Project Fund established by a Trust Indenture dated as of December 1, 2012 (the "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 Bonds shall be issued and secured pursuant to an ordinance of the City adopted by the City Council on November 15, 2011 (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 (i) to finance the acquisition, construction, extensions and equipping of the Project (as defined in the Indenture), (ii) to establish a Debt Service Reserve Fund for the purpose of securing the Bonds, and (iii) to pay the costs of issuance of the Bonds. The City will undertake, pursuant to a Continuing Disclosure Agreement to be dated as of the date of delivery of the Bonds (the "Continuing Disclosure Agreement"), to provide certain annual financial and operating information and notices of the occurrence of certain events, if material, as required by Section (b)(5)(i) of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (the "Rule"). A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement (each hereinafter defined). The City is not in default with respect to any of its obligations under previous undertakings pursuant to the Rule. In order to ensure compliance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the City will enter into a Tax Regulatory Agreement to be 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 appendices thereto, dated December 5, 2012, 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 "Rule"). 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 addresses as the Underwriter shall specify, as many copies of the final Official Statement dated December 11, 2012, relating to the Bonds as the Underwriter shall reasonably request as necessary 4831-5568-3595.5 2 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. The City ratifies and confirms the use of the Preliminary Official Statement by the Underwriter prior to the date hereof in connection with the public offering of the Bonds. (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 Local Government Revenue Bond Act to issue the Bonds for the purpose of financing the Project. (b) The City has the full legal right, power and authority (i) to adopt the Authorizing Ordinance authorizing the issuance of and sale of the Bonds, (ii) to enter into this Bond Purchase Agreement, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement, (iii) to charge and collect the Parking Revenues, (iv) to issue, sell and deliver the Bonds to the Underwriter as provided herein, (v) to pledge irrevocably the Net Parking Revenues to the payment of the principal of, premium, if any, and interest on the Bonds, and (vi) 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 Local Government Revenue Bond Act, in all matters relating to such transactions. (c) The City has duly authorized (i) the execution and delivery of the Bonds and the execution, delivery and due performance of this Bond Purchase Agreement, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement, (ii) the distribution and use of the Preliminary Official Statement and the execution, delivery and distribution of the final Official Statement, and (iii) the taking of any and all such actions as may be required on the part of the City to carry out, give effect to and consummate the transactions contemplated by such instruments. All consents or approvals necessary to be obtained by the City in connection with the foregoing have been received, and the consents or approvals so received remain still in full force and effect. 4831-5568-3595.5 3 (d) The Authorizing Ordinance has been duly adopted by City Council of the City, is in full force and effect and constitutes the legal, valid and binding act of the City; and this Bond Purchase Agreement, the Indenture, 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 Continuing Disclosure Agreement and the Tax Regulatory Agreement are enforceable against the City in accordance with their respective terms, except as enforceability thereof may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally. (e) When delivered to or at the direction of the Underwriter, the Bonds will have been duly authorized, executed, authenticated, issued and delivered and will constitute legal, valid and binding obligations of the City in conformity with the laws of the State of Arkansas, including the Local Government Revenue Bond Act, and will be entitled to the benefit and security of the Authorizing Ordinance and the Indenture. (f) The City has duly approved and authorized the distribution and use of the Preliminary Official Statement and the execution, delivery and distribution of the Official Statement. (g) The information contained in the Preliminary Official Statement is, and as of the Closing Date such information in the final Official Statement will be, true and correct in all material respects, and the Preliminary Official Statement does not and the final Official Statement will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (h) If, at any time prior to the earlier of (i) receipt of notice from the Underwriter pursuant to Section 3(d) hereof that Official Statements are no longer required to be delivered under the Rule or (ii) 25 days after the Closing Date, any event occurs as a result of which the Official Statement, as then amended or supplemented, might include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the City shall promptly notify the Underwriter in writing of such event. Any information supplied by the City for inclusion in any amendments or supplements to the Official Statement will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Upon the request of the Underwriter therefor, the City shall prepare and deliver to the Underwriter, at the City's expense, as many copies of an amendment or supplement to the Official Statement which will correct any untrue statement or omission therein as the Underwriter may reasonably request. (i) Neither the adoption of the Authorizing Ordinance, the execution and delivery of this Bond Purchase Agreement, the Bonds, the Indenture, the Continuing Disclosure Agreement or the Tax Regulatory Agreement, nor the consummation of the transactions contemplated herein or therein or the compliance with the provisions hereof 4831-5568-3595.5 4 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 Bonds, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement have been obtained. 0) Except as is specifically disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending or, to the best knowledge of the City, threatened, which in any way questions the powers of the City referred to in subparagraph 4(b) above, or the validity of any proceeding taken by the City in connection with the issuance of the Bonds or the imposition or collection of the Parking Revenues, 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 Bonds, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement or this Bond Purchase Agreement or, to the knowledge of the City, which in any way questions the exclusion from gross income of the recipients thereof of the interest on the Bonds for federal income tax purposes or in any other way questions the status of the Bonds under federal or State of Arkansas tax laws or regulations. (k) Any certificate signed by any official of the City and delivered to the Underwriter shall be deemed a representation and warranty by the City to the Underwriter as to the truth of the statements therein contained. (1) The City has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon. (m) The history with respect to the Net Parking Revenues set forth in the Preliminary Official Statement under the caption entitled "SECURITY FOR THE SERIES 2012 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. 4831-5568-3595.5 5 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, Net Parking Revenues, 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. Fayetteville, Arkansas time on December 19, 2012, 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 Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"), together with the other documents hereinafter mentioned; and the Underwriter will accept such delivery and pay the Purchase Price by making a wire transfer of federal funds payable to the order of the Trustee for the account of the City. The Bonds shall be delivered to The Depository Trust Company in New York, New York, and the activities relating to the final execution and delivery of the Authorizing Ordinance, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement and the other documents relating 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, 234 East Millsap Road, Suite 400, Fayetteville, Arkansas ("Bond Counsel"), or at such other place as shall have been mutually agreed upon between the City and the Underwriter. The payment for the Bonds and simultaneous delivery of the Bonds to or at the direction of the Underwriter is herein referred to as the "Closing." 7. Underwriter's Right to Cancel. The Underwriter shall have the right to cancel its obligation to purchase the Bonds hereunder by notifying the City in writing or by telegram of its election to do so between the date hereof and the Closing, if at any time hereafter and prior to the Closing: (i) the House of Representatives or the Senate of the Congress of the United States, or a committee of either, shall have pending before it, or shall have passed or recommended favorably, legislation introduced previous to the date hereof, which legislation, if enacted in its form as introduced or as amended, would have the purpose or effect of imposing federal income taxation upon revenues or other income of the general 4831-5568-3595.5 6 character to be derived by the City or by any similar body under the Authorizing Ordinance or the Indenture or similar documents or upon interest received on obligations of the general character of the Bonds or the Bonds, or of causing interest on obligations of the general character of the Bonds, or the Bonds, to be includable in gross income for purposes of federal income taxation, and such legislation, in the Underwriter's opinion, materially adversely affects the market price of the Bonds; or (ii) a tentative decision with respect to legislation shall be reached by a committee of the House of Representatives or the Senate of the Congress of the United States, or legislation shall be favorably reported or rereported by such a committee or be introduced, by amendment or otherwise, in or be passed by the House of Representatives or the Senate, or recommended to the Congress of the United States for passage by the President of the United States, or be enacted or a decision by a federal court of the United States or the United States Tax Court shall have been rendered, or a ruling, release, order, regulation or official statement by or on behalf of the United States Treasury Department, the Internal Revenue Service or other governmental agency shall have been made or proposed to be made having the purpose or effect, or any other action or event shall have occurred which has the purpose or effect, directly or indirectly, of adversely affecting the federal income tax consequences of owning the Bonds or of any of the transactions contemplated in connection herewith, including causing interest on the Bonds to be included in gross income for purposes of federal income taxation, or imposing federal income taxation upon revenues or other income of the general character to be derived by the City or by any similar body under the Authorizing Ordinance or the Indenture or similar documents or upon interest received on obligations of the general character of the Bonds, or the Bonds which, in the opinion of the Underwriter, materially adversely affects the market price of or market for the Bonds; or (iii) legislation shall have been enacted, or actively considered for enactment with an effective date prior to the Closing, or a decision by a court of the United States shall have been rendered, the effect of which is that the Bonds, including any underlying obligations, or the Indenture, as the case may be, is not exempt from the registration, qualification or other requirements of the Securities Exchange Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or (iv) a stop order, ruling, regulation or official statement by the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall have been issued or made or any other event occurs, the effect of which is that the issuance, offering or sale of the Bonds, including any underlying obligations, or the execution and delivery of the Indenture as contemplated hereby or by the Official Statement, is or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or (v) any event shall have occurred or any information shall have become known to the Underwriter which causes the Underwriter to reasonably believe that the Official 4831-5568-3595.5 7 Statement as then amended or supplemented includes an untrue statement of a material fact, or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (vi) there shall have occurred any outbreak of hostilities or any national or international calamity or crisis, including a financial crisis, the effect of which on the financial markets of the United States is such as, in the reasonable judgment of the Underwriter, would materially adversely affect the market for or market price of the Bonds; or (vii) there shall be in force a general suspension of trading on the New York Stock Exchange, the effect of which on the financial markets of the United States is such as, in the reasonable judgment of the Underwriter, would materially adversely affect the market for or market price of the Bonds; or (viii) a general banking moratorium shall have been declared by federal, New York or State authorities; or (ix) any proceeding shall be pending or threatened by the Securities and Exchange Commission against the City; or (x) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; or (xi) the New York Stock Exchange or other national securities exchange, or any governmental authority, shall impose, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of the Underwriter. 8. Conditions to Underwriter's Obligations. The obligation of the Underwriter to purchase the Bonds shall be subject (a) to the performance by the City of its obligations to be performed hereunder at and prior to the Closing, (b) to the accuracy of the representations and warranties of the City herein as of the date hereof and as of the time of the Closing, and (c) to the following conditions, including the delivery by the City of such documents as are enumerated herein in form and substance satisfactory to the Underwriter: (a) The Bonds shall have been duly authorized, executed and delivered in the forms approved by the City in the Indenture with only such changes therein as the Underwriter and the City shall mutually agree upon, which shall in all instances be as described in the final Official Statement; (b) At the time of Closing, (i) the Official Statement, this Bond Purchase Agreement, the Indenture, the Authorizing Ordinance, the 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 4831-5568-3595.5 8 Bonds and other funds shall be deposited and applied as described in the Indenture, (iii) no default or event of default under the Indenture shall have occurred and be continuing, and (iv) no material adverse change affecting the City or the Net Parking Revenues shall have occurred, nor shall any development involving a prospective and material adverse change in, or affecting the business, financial condition, results of operations, prospects or properties of the City have occurred; (c) Receipt of fully executed originals of the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement at or prior to the Closing; (d) At or prior to the Closing, the Underwriter shall receive the following documents in such number of counterparts as shall be mutually agreeable to the Underwriter and Bond Counsel: (1) A final approving opinion of Bond Counsel, dated the Closing Date, in substantially the form set forth in Exhibit B hereto; (2) A supplemental opinion of Bond Counsel, addressed to the City, the Trustee and the Underwriter and dated the Closing Date, in substantially the form set forth in Exhibit C hereto; (3) The Official Statement executed by a duly authorized officer of the City; (4) Certified copies of the Authorizing Ordinance and all other ordinances and resolutions of the City relating to the Bonds; (5) Photocopies of the Bonds as executed and delivered; (6) A certificate, in form and substance satisfactory to the Underwriter, of the Mayor of the City, 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 by all action necessary under the Local Government Revenue Bond Act and the laws and Constitution of the State of Arkansas, and has duly authorized the execution, delivery and due performance of the Bonds, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement, the Official Statement and this Bond Purchase Agreement; (iii) no litigation is pending, or to his knowledge 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 the collection or pledge of the Net Parking Revenues or the validity of the Bonds, the Official Statement, the Authorizing Ordinance, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement or this Bond Purchase Agreement; (iv) the Bonds, the Indenture, this Bond Purchase Agreement, the Continuing Disclosure Agreement and the Tax Regulatory Agreement, as executed and delivered by the City, are in the form or in substantially the form approved for such execution by appropriate proceedings of the City; (v) since December 31, 2011, there has not been any material adverse 4831-5568-3595.5 9 change in the financial condition or results of operations of the City whether or not arising in the ordinary course of business, other than as set forth in the Official Statement; (vi) the Authorizing Ordinance has not been amended, modified or repealed as of the Closing Date, and the Authorizing Ordinance remains in full force and effect; (vii) none of the proceedings of the City taken preliminary to the issuance of the Bonds, as certified in such certificate, have been in any manner repealed, amended or changed; (viii) the City has complied in all respects with the provisions of the Local Government Revenue Bond Act and has full legal right, power and authority to charge and collect the Parking Revenues and to issue the Bonds for the purposes stated in the Local Government Revenue Bond Act and to enter into this Bond Purchase Agreement, to adopt the Authorizing 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 Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement; (ix) 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; (x) to the best of his knowledge, no event affecting the City or the Net Parking Revenues 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; and (xi) the City is not then in default in the performance of any of the covenants, conditions, agreements or provisions contained in the Indenture; (7) An opinion of Kit Williams, Esq., City Attorney, dated the Closing Date and addressed to the Underwriter, Bond Counsel and the Trustee, to the effect that (i) the City is a duly organized and validly existing political subdivision and city of the first class, organized under the laws of the State of Arkansas, with full power and authority to adopt the Authorizing Ordinance, to charge and collect the Parking Revenues, and to execute and deliver the Bonds, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement; (ii) the City has duly approved the Preliminary Official Statement and the Official Statement; (iii) the Authorizing Ordinance has been duly adopted by the City by all action necessary under the Local Government Revenue Bond Act and the laws and Constitution of the State of Arkansas, and each remains in full force and effect; (iv) the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement have been duly authorized, approved, executed and delivered by the City and, subject to the extent that the enforceability of the rights and remedies set forth therein may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally, constitute valid and binding agreements of the City enforceable in accordance with their terms; (v) the information in the Official Statement under the captions "THE PROJECT," "THE CITY" and "LEGAL MATTERS" (apart from financial or statistical data contained or incorporated therein, as to which no view need be expressed) is fair, accurate and 4831-5568-3595.5 10 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) 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 ordinances setting the fees, rents, fines and charges generating the Parking Revenues, the Authorizing Ordinance, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement or this Bond Purchase Agreement and, to the best of such counsel's knowledge, there is no investigation, pending or threatened, and no threatened action, suit or proceeding involving any of the matters hereinabove mentioned in this clause (vi); (vii) the adoption of the Authorizing Ordinance and the execution and delivery of the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement and this Bond Purchase Agreement, and compliance with the provisions hereof and thereof, under the circumstances contemplated hereby and thereby, do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or any existing law, regulation, court order or consent decree to which the City is subject; and (viii) based upon the examinations which such counsel has made as counsel to the City, which shall be specified, nothing has come to such counsel's attention which would lead such counsel to believe that the Official Statement (except for the financial statements and other financial data included in the Official Statement, as to which no view need be expressed) contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (8) Evidence that Federal Form 8038-G has been executed by the City and is ready for filing with the Internal Revenue Service. (9) Evidence that, except as disclosed in the Official Statement, all necessary approvals, whether legal or administrative, have been obtained from applicable federal, state and local entities and agencies; and (10) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter and Bond Counsel may reasonably request to evidence compliance by the City with legal requirements, the truth and accuracy, as of the time of Closing, of the representations of the City herein contained and the due performance or satisfaction by the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied. If the City shall be unable to satisfy the conditions to the obligations of the Underwriter contained in this Bond Purchase Agreement, or if the obligation of the Underwriter to purchase and accept delivery of the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter 4831-5568-3595.5 11 nor the City shall be under further obligation hereunder;, except that the respective obligations to pay expenses, as provided in Section 12 hereof, shall continue in full force and effect. 9. Conditions to Obligations of the City. The obligations of the City hereunder are subject to the performance by the Underwriter of its obligations hereunder. 10. Survival. All representations, warranties and agreements of the City shall remain operative and in full force and effect, regardless of any investigations made by or on behalf of the Underwriter, and shall survive the Closing. The obligations of the City under Sections 11 or 12 hereof shall survive any termination of this Bond Purchase Agreement by the Underwriter pursuant to the terms hereof. 11. Indemnification. The City, to the extent permitted by law, agrees to indemnify and hold harmless the Underwriter, each member, officer, director, partner or employee of the Underwriter and each person who controls the Underwriter within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended (collectively called the "Indemnified Parties"), against any and all losses, claims, damages, liabilities or expenses (including any legal or other expenses incurred by an Indemnified Party in connection with investigating any claims against an Indemnified Party and defending any actions) whatsoever caused by any untrue statement or misleading statement of a material fact contained in the Official Statement or caused by any 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 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 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, 4831-5568-3595.5 12 including, but not limited to, expenses of mailing or delivery of the Bonds, legal publication costs, charges 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 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 the Underwriter 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 72701, Attention: Mr. Dennis Hunt. 14. Nonassignability. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriter (including any successors or assigns 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. 4831-5568-3595.5 13 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: Title: Accepted and agreed to as of 12:00 p.m. on the date first above written: CITY OF FA ETTE E, ARKANSAS B .c ayor 4831-5568-3595.5 14 EXHIBIT A MATURITY SCHEDULE $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 (June 1) Principal Interest Maturity Amount Rate Yield Price 2013 $ 60,000 1.000% 0.600% 100.179% 2014 120,000 1.250% 0.800% 100.647% 2015 120,000 1.500% 1.000% 101.206% 2016 150,000 2.000% 1.200% 102.695% 2017 210,000 2.000% 1.450% 102.361% 2018 215,000 2.000% 1.550% 102.342% 2019 220,000 2.000% 1.800% 101.033%** 2020 225000 2.000% 2.000% 100.000% 2021 230:000 2.250% 2.250% 100.000% 2022 235,000 2.400% 2.400% 100.000% 2023 240,000 2.600% 2.600% 100.000% 2024 245,000 2.700% 2.700% 100.000% 2025 250,000 2.800% 2.800% 100.000% 2026 260,000 2.850% 2.850% 100.000% 2027 265,000 2.900% 2.900% 100.000% 2028* 275,000 3.100% 3.200% 98.559% 2029* 280,000 3.100% 3.200% 98.559% 2030* 290,000 3.100% 3.200% 98.559% 2031 * 300,000 3.100% 3.200% 98.559% 2032 310,000 3.100% 3.200% 98.559% 2033* 320,000 3.625% 3.700% 98.798% 2034* 330,000 3.625% 3.700% 98.798% 2035* 345,000 3.625% 3.700% 98.798% 2036* 355,000 3.625% 3.700% 98.798% 2037 370,000 3.625% 3.700% 98.798% (with accrued interest on all Bonds from December 1, 2012) * Mandatory sinking fund redemption. ** Priced to the first optional redemption date of June 1, 2018. A-1 4831-5568-3595.5 EXHIBIT B PROPOSED FORM OF BOND COUNSEL APPROVING OPINION Upon delivery of the Bonds in definitive form, Kutak Rock LLP, Little Rock, Arkansas, proposes to deliver its approving opinion in substantially the following form: December 52012 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 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 $6,220,000 Parking Revenue Improvement Bonds, Series 2012 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and Arkansas Code Annotated (1998 Repl. & Supp. 2011) § § 14-164-401 et seq. (as from time to time amended, the "Local Government Revenue Bond Act"), pursuant to Ordinance No. 5457 of the City, duly adopted and approved on November 15, 2011 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of December 1, 2012 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, 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 nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the Holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance and to enter into and perform its obligations under the Indenture, the valid adoption of the B-1 4831-5568-3595.5 Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and the Local Government Revenue Bond Act, the City is empowered to adopt the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 4. The Bonds have been validly authorized, executed, issued and delivered by the City and represent valid and binding special obligations of the City. The principal, premium, if any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and pledge by the City to the Trustee of, the Net Parking Revenues (as defined in the Indenture). 5. The Net Parking Revenues 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 Net Parking Revenues. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated (2001 Repl. & 2011 Supp.) Section 4-9-109(d)(14), the pledge, assignment and security interest in the Net Parking Revenues securing the Bonds is and shall be prior to any judicial lien hereafter imposed on said Net Parking Revenues 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 said Net Parking Revenues. 6. Interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinion described in the preceding sentence assumes the accuracy of certain representations and compliance by the City with covenants designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended, that must be met subsequent to the issuance of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with such requirements. The Bonds are "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, and, in the case of certain financial institutions (within the meaning of Section 265(b)(5) of the Code), a B-2 4831-5568-3595.5 deduction is allowed for eighty percent (80%) of that portion of such financial institution's interest expense allocable to interest on 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 4831-5568-3595.5 EXHIBIT C PROPOSED FORM OF BOND COUNSEL SUPPLEMENTAL OPINION December , 2012 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 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 December 11, 2012 (the "Bond Purchase Agreement"), by and between the City and Stephens Inc., as underwriter (the "Underwriter"); (b) An executed counterpart of the Continuing Disclosure Agreement dated December 19, 2012 (the "Disclosure Agreement"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as dissemination agent (the "Agent"); C-1 4831-5568-3595.5 (c) An executed counterpart of the Tax Regulatory Agreement dated December 19, 2012 (the "Tax Regulatory Agreement"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"); and (d) Portions of the Official Statement dated December 11, 2012, with respect to the Bonds (the "Official Statement"), captioned "INTRODUCTORY STATEMENT," "THE SERIES 2012 BONDS," "SECURITY FOR THE SERIES 2012 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 Disclosure Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Agent, the Disclosure Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 3. The Tax Regulatory Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Trustee, the Tax Regulatory Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 4. The statements contained in the Official Statement under the Relevant Captions, insofar as such statements purport to summarize certain provisions of the Bonds, the Indenture and the Continuing Disclosure Agreement, or conclusions of law and legal opinions, are true, accurate and correct summaries thereof in all material respects and do not omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The enforceability of the respective obligations of the parties to the documents and other items described above, and the availability of certain rights and remedies provided for therein, may be limited by bankruptcy, receivership, insolvency, reorganization, moratorium, marshalling or other similar statutes or rules of law affecting creditors' rights and remedies, to general principles of equity and to the discretion of any court in granting any relief or issuing any order, whether the proceeding is considered a proceeding at law or equity. In particular, the right to indemnification under any of the documents or other items described above may be limited by federal or state securities laws or by the public policy underlying such laws. C-2 4831-5568-3595.5 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 4831-5568-3595.5 CITY OF FAYETTEVILLE, ARKANSAS to SIMMONS FIRST TRUST COMPANY, N.A. as Trustee TRUST INDENTURE Dated as of December 1, 2012 Providing for: $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 Prepared by: Kutak Rock LLP 124 West Capitol Avenue, Suite 2000 Little Rock, Arkansas 72201 EXECUTION COPY 4828-9200-1547.5 TABLE OF CONTENTS (This Table of Contents is not a part of the Trust Indenture and is only for convenience of reference.) Pam Parties............................................................................................................................................. 1 Recitals........................................................................................................................................... 1 GrantingClauses............................................................................................................................. 2 ARTICLE I DEFINITIONS Section101. Definitions....................................................................................................... 4 Section 102. Use of Words................................................................................................. 11 ARTICLE II THE BONDS Section 201. Security for the Bonds....o.............................................................................. 11 Section 202. Authorized Amount of the Bonds.................................................................. 11 Section 203. Details of the Bonds....................................................................................... 11 Section204. Bond Form..................................................................................................... 12 Section205. Payment......................................................................................................... 12 Section206. Execution....................................................................................................... 13 Section 207. Limited Obligation......................................................................................... 13 Section 208. Authentication................................................................................................ 13 Section 209. Delivery of the Bonds.................................................................................... 13 Section 210. Mutilated, Destroyed or Lost Bonds.............................................................. 15 Section 211. Registration and Transfer of Bonds............................................................... 15 Section212. Cancellation................................................................................................... 16 Section 213. Additional Bonds........................................................................................... 16 Section 214. Superior Obligations Prohibited.................................................................... 17 Section 215. Subordinate Obligations................................................................................ 17 Section 216. Temporary Bonds.......................................................................................... 18 Section 217. Book -Entry Bonds; Securities Depository..................................................... 18 ARTICLE III REDEMPTION OF BONDS BEFORE MATURITY Section 301. Redemption of Bonds.................................................................................... 19 Section302. Notice............................................................................................................. 20 Section 303. Selection of Bonds to be Redeemed.............................................................. 21 Section 304. Surrender of Bonds Upon Redemption.......................................................... 21 Section 305. Redemption in Part ........................................................................................ 21 Section 306. Redemption of Additional Bonds.................................................................. 21 i 4828-9200-1547.5 ARTICLE IV GENERAL COVENANTS AND REPRESENTATIONS Section 401. Payment of Principal, Premium, if any, and Interest ..................................... 22 Section 402. Performance of Covenants............................................................................. 22 Section 403. Instruments of Further Assurance.................................................................. 22 Section 404. Recordation and Filing.................................................................................. 22 Section 405. Inspection of Books....................................................................................... 23 Section 406. Tax Covenants............................................................................................... 23 Section 407. Parking Fee Rates and Charges..................................................................... 23 Section 408. Bank Qualification......................................................................................... 23 Section 409. Completion of Projects; Certification of Completion Dates .......................... 23 Section410. Encumbrances................................................................................................ 24 Section 411. Parking Revenues to be Used as Provided in Indenture ................................ 24 Section 412. Continuing Disclosure................................................................................... 24 Section 413. Representations, Warranties and Covenants Regarding Trust Estate............ 24 ARTICLE V FUNDS AND DEPOSITS Section 501. Creation of Funds.......................................................................................... 25 Section 502. Project Fund................................................................................................... 26 Section 503. Revenue Fund................................................................................................ 27 Section504. Bond Fund..................................................................................................... 27 Section 505. Cost of Issuance Fund.................................................................................... 28 Section506. Rebate Fund................................................................................................... 28 Section 507. Debt Service Reserve Fund........................................................................... 29 Section 508. Cessation of Fund Deposits............................................................................ 29 Section 509. Separate Accounts Authorized...................................................................... 30 ARTICLE VI [RESERVED] ARTICLE VII INVESTMENTS Section 701. Investment of Moneys................................................................................... 30 Section 702. Investment Earnings...................................................................................... 30 Section 703. Valuation of Funds........................................................................................ 31 Section 704. Responsibility of Trustee............................................................................... 31 ARTICLE VIII DISCHARGE OF LIEN Section 801. Discharge of Lien.......................................................................................... 31 Section 802. Bonds Deemed Paid....................................................................................... 31 Section 803. Non -Presentment of Bonds............................................................................ 32 ARTICLE IX DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS Section 901. Events of Default........................................................................................... 32 ii 4828-9200-1547.5 Section 902. Acceleration................................................................................................... 33 Section 903. Other Remedies; Rights of Bondholders....................................................... 33 Section 904. Right of Bondholders to Direct Proceedings ................................................. 34 Section 905. Appointment of Receiver............................................................................... 34 Section906. Waiver............................................................................................................ 34 Section 907. Application of Moneys.................................................................................. 34 Section 908. Remedies Vested in Trustee.......................................................................... 35 Section 909. Rights and Remedies of Bondholders............................................................ 36 Section 910. Termination of Proceedings........................................................................... 36 Section 911. Waivers of Events of Default........................................................................ 36 ARTICLE X TRUSTEE AND PAYING AGENTS Section 1001. Acceptance of Trusts..................................................................................... 37 Section 1002. Fees, Charges and Expenses of Trustee and Paying Agents; Trustee's PriorLien....................................................................................................... 39 Section 1003. Additional Duties of Trustee......................................................................... 39 Section 1004. Notice to Bondholders of Default.................................................................. 40 Section 1005. Intervention by Trustee.................................................................................. 40 Section 1006. Merger or Consolidation of Trustee.............................................................. 40 Section 1007. Resignation by Trustee.................................................................................. 40 Section 1008. Removal of Trustee........................................................................................ 41 Section 1009. Appointment of Successor Trustee................................................................ 41 Section 1010. Concerning Any Successor Trustee............................................................... 41 Section 1011. Reliance Upon Instruments............................................................................ 42 Section 1012. Appointment of Co-Trustee........................................................................... 42 Section 1013. Designation and Succession of Paying Agents .............................................. 42 ARTICLE XI SUPPLEMENTAL INDENTURES Section 1101. Supplemental Indentures Not Requiring Consent of Bondholders ................ 43 Section 1102. Supplemental Indentures Requiring Consent of Bondholders ....................... 44 Section 1103. Effect of Supplemental Indentures................................................................ 44 ARTICLE XII MISCELLANEOUS Section 1201. Consents, etc. of Bondholders....................................................................... 45 Section1202. Notices........................................................................................................... 45 Section 1203. Limitation of Rights....................................................................................... 45 Section 1204. Severability....................................................................................................46 Section 1205. Applicable Provisions of Law....................................................................... 46 Section 1206. Counterparts...................................................................................................46 Section 1207. Successors and Assigns................................................................................. 46 Section1208. Captions......................................................................................................... 46 Section 1209. Photocopies and Reproductions..................................................................... 46 Section 1210. Bonds Owned by the City............................................................................. 46 iii 4828-9200-1547.5 Signatures.................................................................................................................................. 47 Acknowledgements.................................................................................................................... 48 Exhibit A Form of Series 2012 Bond........................................................................... A-1 Exhibit B Form of Requisition..................................................................................... B-1 iv 4828-9200-1547.5 TRUST INDENTURE THIS TRUST INDENTURE dated as of December 1, 2012, by and between the CITY OF FAYETTEVILLE, ARKANSAS (the "City"), a city of the first class organized under and existing by virtue of the laws of the State of Arkansas, as party of the first part, and SIMMONS FIRST TRUST COMPANY, N.A., as trustee (the "Trustee"), 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, as party of the second part; WITNESSETH: WHEREAS, the City has determined that there is a need for a source of funds to finance all or a portion of the costs of acquiring, constructing and equipping parking deck facilities and related roadway and other improvements (collectively, the "2012 Project"), such facilities and improvements to be located in the City's Entertainment District Parking Zone; and WHEREAS, the City is authorized .and empowered under the provisions of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution and Arkansas Code Annotated (1998 Repl. & Supp. 2011) Sections 14-164-401 et seq. (as from time to time amended, the "Act"), to issue and sell its revenue bonds for the purpose of financing "capital improvements" (as defined in the Act), such as those improvements comprising the 2012 Project; and WHEREAS, in order to secure funds necessary to finance some or all of the costs of the 2012 Project in accordance with the provisions of the Act, the City proposes to issue its Parking Revenue Improvement Bonds, Series 2012 (the "Series 2012 Bonds"), in the aggregate principal amount of $6,220,000, such Series 2012 Bonds to be payable from and secured by a pledge of all net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated with respect to the 2012 Project and net revenues with respect to the City management of parking facilities owned by third parties (the "Net Parking Revenues"); and WHEREAS, the City has further determined to enter into this Indenture to authorize the issuance of and to secure the Series 2012 Bonds by granting to the Trustee a pledge and assignment of the interests and other rights herein contained, and certain funds created hereby; and WHEREAS, the Series 2012 Bonds are to be dated, bear interest, mature and be subject to redemption as hereinafter in this Indenture set forth in detail; and WHEREAS, provision is made in this Indenture for the issuance of Additional Bonds (hereinafter defined) upon compliance with certain conditions set forth herein; and 4828-9200-1547.5 WHEREAS, the execution and delivery of this Indenture and the issuance of the Series 2012 Bonds have been in all respects duly and validly confirmed, authorized and approved by Ordinance No. 5457 adopted and approved by the City Council of the City on November 15, 2011; and WHEREAS, all things necessary to make the Series 2012 Bonds, when authenticated by the Trustee and issued as in this Indenture provided, the valid, binding and legal obligations of the City according to the import thereof, and to constitute this Indenture a valid pledge of the Net Parking Revenues (hereinafter defined) to the payment of the principal of, premium, if any, and interest on the Series 2012 Bonds, as specified in and in accordance with the provisions hereof, have been done and performed, and the creation, execution and delivery of this Indenture and the creation, execution, issuance and delivery of the Series 2012 Bonds, subject to the terms hereof, have in all respects been duly authorized; NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, THIS INDENTURE WITNESSETH: That the City, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created, and of the purchase and acceptance of the Series 2012 Bonds by the holders and owners thereof, and the sum of Ten Dollars ($10.00), lawful money of the United States of America, to it duly paid by the Trustee, at or before the execution and delivery of these presents, and for other good and valuable consideration, the receipt of which is hereby acknowledged, and in order to secure the payment of the principal of, premium, if any, and interest on the Series 2012 Bonds and all Additional Bonds (hereinafter defined) according to their tenor and effect, and to secure the performance and observance by the City of all the covenants expressed or implied herein and in the Series 2012 Bonds and Additional Bonds (collectively, the "Bonds"), does hereby grant, bargain, sell, convey, mortgage, assign, transfer and pledge unto the Trustee, and unto its successor or successors in trust, and to them and their assigns forever, for the securing of the performance of the obligations of the City hereinafter set forth the following: 1. Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, the Net Parking Revenues (hereinafter defined), including particularly the moneys in and pledged to the Revenue Fund, Bond Fund, Debt Service Reserve Fund and Project Fund (each hereinafter defined) established by this Indenture, including the investment earnings thereon, if any; and 2. All moneys, securities and obligations from time to time held by the Trustee under the terms of this Indenture (except for moneys, securities or obligations deposited with or paid to the Trustee for the redemption or payment of Bonds which are deemed to have been paid in accordance with Article VIII hereof), and any and all real and personal property, rights and interests of every kind and nature from time to time which have been, are hereby, or hereafter 2 4828-9200-1547.5 are, by delivery or by writing or transfer of any kind, conveyed, mortgaged, pledged, assigned or transferred, as and for additional security hereunder, by the City or by any other person, firm or corporation, or with the written consent of the City, to the Trustee, which is hereby authorized to receive any and all such properties, rights and interests at any time and at all times and to hold and apply the same subject to the terms hereof. TO HAVE AND TO HOLD all the same 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 the 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 or causing to be deposited with the Trustee the entire amount due or to become due thereon, and shall well and truly keep, perform and observe all of the covenants and conditions pursuant to the terms of this Indenture to be kept, and shall pay to the Trustee all sums of money due or to become due to it in accordance with the terms and provisions hereof, then upon such final payments or deposits this Indenture and the lien and rights hereby granted shall cease, determine and be void; otherwise, this Indenture is to be and remain in full force and effect. THIS INDENTURE FURTHER WITNESSETH that, and it is expressly declared that, all Bonds issued and secured hereunder are to be issued, authenticated and delivered and all revenues and income hereby pledged are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the City has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the respective owners from time to time of the Bonds or any part thereof, as follows, that is to say: [END OF RECITALS AND GRANTING CLAUSES] 3 4828-9200-1547.5 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: "Act" means the Local Government Capital Improvement Revenue Bond Act of 1985, codified as Arkansas Code Annotated (1998 Repl. & Supp. 2011) Sections 14-164-401 et seq., as from time to time amended. "Additional Bonds" mean Bonds in addition to the Series 2012 Bonds which are issued under the provisions of Section 213 of this Indenture. "Amendment 65" means Amendment No. 65 to the Constitution of the State of Arkansas, approved by the voters of the State on November 4, 1986. "Annual Debt Service" means, with respect to all or any particular amount of Bonds or Subordinate Obligations, as the case may be, the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the amount of such payment which is provided from the proceeds of the sale of Bonds or Subordinate Obligations or from sources other than Net Parking Revenues. "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. 5457, adopted by the City Council on November 15, 2011, which authorized the issuance of the Series 2012 Bonds pursuant to this Indenture. "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 Section 501 of this Indenture. 4 4828-9200-1547.5 "Bonds" mean the Series 2012 Bonds and all Additional Bonds issued by the City pursuant to this Indenture. "Book -Entry System" means the book -entry system maintained by the Securities Depository described in Section 217 of this Indenture. "Business Day" means any day other than (a) a Saturday or Sunday, (b) a day on which commercial banks in New York, New York, or the city in which the principal corporate trust office of the Trustee is located are authorized or required by law or executive order to close, or (c) a day on which the New York Stock Exchange or the Securities Depository is closed. "Certificate" means a document signed by an Authorized Representative of the City attesting to or acknowledging the circumstances or other matters therein stated. "City" means the City of Fayetteville, Arkansas, a municipality and political subdivision under the laws of the State of Arkansas. "City Clerk" means the person holding the office and performing the duties of the City Clerk of the City. "Closing Date" means, with respect to any series of Bonds, the date upon which there is an exchange of such series of Bonds for the proceeds representing the purchase price for such series of Bonds by the Original Purchaser or Purchasers thereof. "Code" means the Internal Revenue Code of 1986, as from time to time amended, and applicable regulations issued or proposed thereunder. "Completion Date" means the date upon which a Project is first ready for normal continuous operation, as certified by an Authorized Representative. "Continuing Disclosure Agreement" means, collectively, each Continuing Disclosure Agreement between the City and a dissemination agent, dated the date of issuance and delivery of a series of Bonds, as originally executed and as amended from time to time in accordance with the terms thereof. "Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, including, but not limited to, underwriting discounts, fees and expenses, publication expenses, expenses of printing, reproducing, filing and recording documents, initial fees and charges of the Trustee and any Paying Agent, fees and expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement for the Bonds, costs of execution, transportation and safekeeping of the Bonds, and other costs, charges and fees incurred in connection with the foregoing. "Costs of Issuance Fund" means the fund by that name created and established in Section 501 of this Indenture. 5 4828-9200-1547.5 "Debt Service" means, with respect to all or any particular amount of Bonds or Subordinate Obligations, as the case may be, the total as of any particular date of computation and for any particular period of the scheduled amount of interest and amortization of principal payable on such Bonds or Subordinate Obligations, excluding amounts scheduled during such period which relate to principal which has been retired before the beginning of such period. "Debt Service Reserve Fund" means the fund by that name created and established in Section 501 of this Indenture. "Depository" means a national or state banking corporation or association (which may include the Trustee and any Paying Agent) which holds membership in the Federal Deposit Insurance Corporation. "Event of Default" means any event of default specified in Section 901 hereof. "Fiscal Year" means the 12-month period used, at any time, by the City for accounting purposes, which may be the calendar year. "Fund" means a fund established by Article V of this Indenture. "Government Securities" means direct obligations of, or obligations fully guaranteed as to principal and interest by, the United States of America or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the United States of America (including obligations issued or held in book -entry form on the books of the U.S. Department of Treasury). "Holder" or "Bondholder" or "owner of the Bonds" means the registered owner of any IC•14 "Indenture" means this Trust Indenture dated as of December 1, 2012, between the City and the Trustee, pursuant to which the Bonds are issued, and any amendments and supplements hereto. "Investment Securities" means, if and to the extent the same are at the time legal for investment of funds held under this Indenture: (a) Cash (insured at all times by the Federal Deposit Insurance Corporation); (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, including: (1) U.S. Export -Import Bank (Eximbank); (2) Rural Economic Community Development Administration; 6 4828-9200-1547.5 (3) U.S. Maritime Administration; (4) Small Business Administration; (5) U.S. Department of Housing & Urban Development (PHAs); (6) Federal Housing Administration (FHA); and (7) Federal Financing Bank; (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: (1) Senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC); and (2) Obligations of the Resolution Funding Corporation (REFCORP); (3) Senior debt obligations of the Federal Home Loan Bank System; (e) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by the FDIC; (f) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "P-1" by Moody's and "A-1" or "A-1+" by S&P and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (g) Commercial paper which is rated at the time of purchase in the single highest classification, "P-1" by Moody's and "A-1+" by S&P and which matures not more than 270 calendar days after the date of purchase; (h) Investments in money market funds rated "AAAm" or "AAAm-G" or better by S&P; (i) 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 (1) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Moody's or S&P or any successors thereto; or 7 4828-9200-1547.5 (2) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or Government Securities, 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; and 0) Municipal Obligations rated "Aaa/AAA" or general obligations of States with a rating of "A2/A" or higher by both Moody's and S&P. "Mayor" means the person holding the office and performing the duties of the Mayor of the City. "Moody's" means Moody's Investors Service, Inc., and any successor thereto. "Net Parking Revenues" means Parking Revenues less Operation and Maintenance Expenses. "Operation and Maintenance Expenses" means all reasonable and necessary costs and expenses incurred in the operation, maintenance, repair and insuring of the City's parking meters, lots and other parking facilities which are properly accounted for such purposes under generally accepted accounting principles, including debt service on debt incurred to acquire parking equipment prior to the date of this Indenture. Such term does not include Debt Service on the Bonds and Subordinate Obligations or depreciation expense. "Original Purchaser" means the first purchaser(s) of a series of Bonds from the City. "Outstanding" means, when used with reference to the Bonds, as of any particular date, the aggregate of all Bonds authenticated and 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 VIII 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. "Parking Revenues" means all revenues attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including revenues to be generated with respect to the 2012 Project and net revenues with respect to City management of parking facilities owned by third parties. 4828-9200-1547.5 "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. "Paying Agent" means any bank or trust company named by the City as the place at which the principal of and premium, if any, and interest on the Bonds are payable. "Person" means any natural person, firm, association, corporation, limited liability company, partnership, joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Project" means the 2012 Project and any other parking facility related "capital improvements" (as defined in the Act) financed with the proceeds of Additional Bonds. "2012 Project" means the particular betterments and improvements to be financed with the proceeds of the Series 2012 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) 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 the Project and placing the same in operation; (b) all costs relating to injury and damage claims arising out of the acquisition, construction or equipping of the Project; (c) all other costs incurred in connection with, and properly allocable to, the acquisition, construction and equipping of the Project; and (d) amounts to pay or reimburse the City or any City fund for expenses of the City incident and properly allocable to such planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation of the Project. "Project Fund" means the fund by that name created and established in Section 501 of this Indenture. "Qualified Accountant" means an independent certified public accountant or firm of independent certified public accountants not in the regular employ of the City. 9 4828-9200-1547.5 "Rebate Fund" means the fund by that name created and established in Section 501 of this Indenture. "Record Date" means with respect to any interest payment date of the Bonds, the fifteenth day of the calendar month next preceding the month in which such interest payment date falls. "Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized Representative in the form of Exhibit B to this Indenture. "Reserve Requirement" means, with respect to each series of Bonds, an amount equal to 50% of the maximum Annual Debt Service with respect to such series of Bonds. For all purposes of this Indenture, the Reserve Requirement may be satisfied by cash or by Investment Securities. "Revenue Fund" means the fund by that name created and established in Section 501 of this Indenture. "S&P" means Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc., and any successor thereto. "Securities Depository" means The Depository Trust Company, New York, New York, or its nominee, and its successors and assigns, or any other depository institution appointed by the City or the Trustee to act as depository for the Bonds in connection with the Book -Entry System. "Series 2012 Bonds" means the initial series of Bonds being issued under and secured by this Indenture in the aggregate principal amount of $6,220,000 for the purpose of financing the 2012 Project. "State" means the State of Arkansas. "Subordinate Obligations" means debt obligations of the City secured by a pledge of the Net Parking Revenues that is subordinate to the lien thereon securing the payment of the Bonds, as permitted by the provisions of Section 215 of this Indenture. "Supplemental Indenture" means any indenture supplemental to or amendatory of this Indenture, adopted by the City in accordance with Article XI hereof. "Tax Regulatory Agreement" means with respect to any series of Bonds, that Tax Regulatory Agreement of the City relating to maintenance of the excludability of interest on such Bonds from gross income for federal income tax purposes, delivered in connection with the issuance of such series of Bonds. "Trustee" means the banking corporation or association designated as Trustee in the Indenture, and its successor or successors as such Trustee. The original Trustee is Simmons First Trust Company, N.A., Pine Bluff, Arkansas. 10 4828-9200-1547.5 "Trust Estate" means the property described in the granting clauses of this Indenture. Section 102. Use of Words. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, the words "Bond", "owner", "holder" and "person" shall include the plural, as well as the singular, number. ARTICLE II THE BONDS Section 201. Security for the Bonds. (a) The Bonds are special and limited obligations of the City payable as to principal, premium, if any, and interest solely out of the Trust Estate (including the Net Parking Revenues), which Trust Estate shall be, and the same hereby is, pledged, appropriated and assigned to such payment in accordance with the provisions of this Indenture. Such pledge, appropriation and assignment shall not prevent the application of such pledged moneys and revenues for the purposes and on the terms set forth in 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 taxing powers of the City. (b) The pledge, charge, lien, trusts and assignments made herein and hereby 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 2012 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 the Trustee or the Paying Agent hereunder, without any physical delivery, segregation thereof or further act, and such pledge, charge, lien, trust and assignment shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the City, irrespective of whether such parties have notice thereof. (c) 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. Section 202. Authorized Amount of the 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 is hereby expressly limited to $6,220,000, except as provided in Section 210 and Section 213 hereof. Section 203. Details of the Bonds. (a) The Series 2012 Bonds (i) shall be designated "City of Fayetteville, Arkansas Parking Revenue Improvement Bonds, Series 2012," (ii) shall be in the aggregate principal amount of $6,220,000, (iii) shall be dated as of December 1, 2012, (iv) shall bear interest from such date at the rates hereinafter provided until paid, payable semiannually on June 1 and December 1 of each year, commencing June 1, 2013, (v) shall be 11 4828-9200-1547.5 issued in denominations of $5,000 each, or any integral multiple thereof, (vi) shall be numbered from R12-1 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 June 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 2012 Bonds: Year June 1 Principal Amount Interest Rate 2013 $ 60,000 1.000% 2014 120,000 1.250% 2015 120,000 1.500% 2016 150,000 2.000% 2017 210,000 2.000% 2018 215,000 2.000% 2019 220,000 2.000% 2020 225,000 2.000% 2021 230,000 2.250% 2022 235,000 2.400% 2023 240.000 2.600% 2024 245,000 2.700% 2025 250,000 2.800% 2026 260,000 2.850% 2027 265,000 2.900% 2032 1,455,000 3.100% 2037 1,720,000 3.625% Section 204. Bond Form. (a) The Series 2012 Bonds shall be initially issued as fully registered Bonds without coupons, in the form of seventeen 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 2012 Bonds, except upon the occurrence of the events described in Section 217 hereof. Beneficial Owners will be deemed to have waived any right to receive a bond certificate except under the circumstances described in Section 217. The Series 2012 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 12 4828-9200-1547.5 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 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. Limited Obligation. The Bonds, together with interest thereon, are limited and special obligations of the City payable solely out of the Trust Estate, which shall be, and hereby is, pledged and charged to such payment in accordance with the provisions of this Indenture, and shall not constitute an indebtedness of the City within the meaning of any constitutional or statutory provision and shall never constitute an obligation of or a charge against the general credit of the City. The Bonds shall be secured by such pledge and charge and by a lien on the Trust Estate, all in accordance with and subject to the conditions and provisions of the Act and this Indenture. Section 208. 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 209. Delivery of the Bonds. The City shall execute and deliver to the Trustee and the Trustee shall authenticate the Bonds of any series and deliver said Bonds to the Securities Depository as may be directed in this Section 209, in Section 213 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; 13 4828-9200-1547.5 (2) Original executed counterparts of the Continuing Disclosure Agreement and the Tax Regulatory Agreement applicable to such series of Bonds; (3) A Certificate of the City 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 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; (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 2012 Bonds and any Additional Bonds theretofore issued will not be adversely affected by the issuance of the Additional Bonds being issued; (8) In the case of any series of Additional Bonds, a statement of a Qualified Accountant or a Certificate of Mayor, as the case may be, satisfying the requirements of Section 213 hereof; and (9) Such further documents and certificates as may be required by the Original Purchaser or Purchasers of such series of Bonds. (b) Simultaneously with the delivery of the Series 2012 Bonds, the Trustee shall apply the proceeds thereof as follows: (1) The amount, if any, received as accrued interest on the Series 2012 Bonds shall be deposited in the Bond Fund; (2) $190,316.25, an amount equal to the Reserve Requirement with respect to the Series 2012 Bonds, shall be deposited in the Debt Service Reserve Fund; (3) An amount equal to $40,000.00 shall be deposited in the Costs of Issuance Fund for payment of Costs of Issuance pursuant to the written direction of the City; and 14 4828-9200-1547.5 (4) The balance of said proceeds in the amount of $5,857,832.30 shall be deposited in the Project Fund. Section 210. 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, number, maturity and tenor in exchange and substitution for and upon cancellation of such mutilated Bond, or in lieu of and in substitution for such Bond destroyed or lost, upon the Holder's paying the reasonable expenses and charges of the City and the Trustee in connection therewith, and, in the case of a Bond destroyed or lost, filing by the Holder with the Trustee evidence satisfactory to the Trustee that such Bonds were destroyed or lost, and of the Holder's ownership thereof, and furnishing the City and Trustee with indemnity satisfactory to them. The Trustee is hereby authorized to authenticate any such new Bond. In the event any such Bonds shall have matured, instead of issuing a new Bond, the City may pay the same without the surrender thereof. Upon the issuance of a new Bond under this Section 210, 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 211. 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. 15 4828-9200-1547.5 Such transfers of registration or exchanges of Bonds shall be without charge to the Holders of such Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Holder of the Bond requesting such transfer or exchange as a condition precedent to the exercise of such privilege. 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 212. 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 213. 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 or equipping of parking related "capital improvements" (as defined in the Act), (ii) refunding the Series 2012 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 2012 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. Before any Additional Bonds are authenticated, there shall be delivered to the Trustee the items required for the issuance of Bonds by Section 209 hereof, plus (I) in the case of Additional Bonds to finance Project Costs, a statement by a Qualified Accountant reciting the opinion, based upon necessary investigation, that Net Parking Revenues for the Fiscal Year immediately 16 4828-9200-1547.5 preceding the Fiscal Year in which such Additional Bonds are to be issued were not less than (i) 125% of the maximum Annual Debt Service on all then outstanding Bonds and Subordinate Obligations plus the Additional Bonds then proposed to be issued, and (ii) the amount, if any, needed to make required deposits into the Debt Service Reserve Fund, and (II) in the case of Additional Bonds to refund the Series 2012 Bonds or any series of Additional Bonds, a Certificate of the Mayor stating that, after taking into account the issuance of the Additional Bonds and the application of the proceeds thereof and other available funds to the refunding, the average Annual Debt Service on all outstanding Bonds and Subordinate Obligations will not be increased. If any changes have been made, and are in effect on the date of issuance of the Additional Bonds, in any parking fees, leases, rents, fines or charges imposed by the City which were not in effect during the entire preceding Fiscal Year, the Qualified Accountant may, if such changes resulted in increases in such fees, leases, rents, fines and charges, and shall, if such changes resulted in reductions in such fees, leases, rents, fines or charges, adjust the Parking Revenues for the preceding Fiscal Year to reflect any changes in such Parking Revenues which would have occurred if the changed fees, leases, rents, fines and charges had been in effect during the entire preceding Fiscal Year. 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 214. Superior Obligations Prohibited. Except to the extent permitted in Section 213 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 Parking Revenues, Net Parking Revenues 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 Parking Revenues or Net Parking Revenues 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 Net Parking Revenues and from the Revenue Fund into the Bond Fund and Debt Service Reserve Fund or from said Bond Fund and Debt Service Reserve Fund for the payment of the Bonds. Section 215. Subordinate Obligation. Nothing in this Indenture shall prevent the City from authorizing and issuing bonds, notes, bond anticipation notes, warrants, certificates or other obligations or evidences of indebtedness, the payment of the principal of and premium, if any, and interest on which shall be made from Parking Revenues or from a special fund to be established and maintained from Parking Revenues, provided payments from Parking Revenues or from Parking Revenues into such special fund, and the lien and charge on such Parking Revenues, shall be made junior and subordinate to the lien, pledge and charge created herein for the security and payment of the Bonds and other payments under this Indenture. Notwithstanding anything herein to the contrary, no Subordinate Obligations shall be issued unless there is no default at the time of issuance under this Indenture. 17 4828-9200-1547.5 Section 216. 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 Holder of such Bond in temporary form. Section 217. 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 217. 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 (1)(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 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 18 4828-9200-1547.5 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. (a) The Series 2012 Bonds will be subject to redemption prior to maturity as follows: (1) The Series 2012 Bonds are subject to redemption prior to maturity, at the option of the City, on and after June 1, 2018, in whole or in part at any time and in any order of maturity directed by the City, from funds from any source, at a redemption price equal to one hundred percent (100%) of the principal amount of the Series 2012 Bonds being redeemed, plus accrued interest to the date of redemption. (2) The Series 2012 Bonds shall be redeemed prior to maturity, in whole or in part, on any interest payment date, in inverse order of maturity, at a redemption price equal to one hundred percent (100%) of the principal amount of the Series 2012 Bonds being redeemed, plus accrued interest to the date of redemption, from unexpended proceeds of the Series 2012 Bonds (if such unexpended proceeds equal or exceed $100,000) in the Project Fund not needed for paying Project Costs with respect to the 2012 Project and segregated for the purpose of redeeming the Series 2012 Bonds. (3) The Series 2012 Bonds maturing on June 1, 2032, are subject to mandatory sinking fund redemption prior to maturity in part, on June 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; 19 4828-9200-1547.5 Year Principal Amount 2028 $275,000 2029 $280,000 2030 $290,000 2031 $300,000 2032 (maturity) $310,000 (4) The Series 2012 Bonds maturing on June 1, 2037, are subject to mandatory sinking fund redemption prior to maturity in part, on June 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; and Year Principal Amount 2033 $320,000 2034 $330,000 2035 $345,000 2036 $355,000 2037 (maturity) $370,000 At its option, to be exercised on or before the 45`h day next preceding any mandatory sinking fund redemption date for any Series 2012 Bonds, the City may deliver to the Trustee for cancellation Series 2012 Bonds of the appropriate maturity, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2012 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 2012 Bonds so to be redeemed shall be accordingly reduced. Section 302. Notice. Notice of the call for any redemption, identifying the Bonds or portions thereof being called and the date on which they shall be presented for payment, shall be mailed by the Trustee by first class mail (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. 20 4828-9200-1547.5 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 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. Section 306. Redemption of Additional Bonds. Additional Bonds may be made subject to optional, extraordinary and mandatory sinking fund redemption, in whole or in part, in such manner, at such times and at such prices as may be provided in the Supplemental Indenture providing for their issuance. 21 4828-9200-1547.5 ARTICLE IV GENERAL COVENANTS AND REPRESENTATIONS Section 401. Payment of Principal, Premium, if any, and Interest. The City covenants that it will promptly pay or cause to be paid the principal of and premium, if any, and interest on every Bond issued under this Indenture at the place, on the dates and in the manner provided herein and in the Bonds according to the true intent and meaning thereof. 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, as permitted by the Act, that while any of the Bonds are Outstanding, it will use due diligence in causing the collection of the Parking Revenues. 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 Net Parking Revenues and to make the covenants in the manner and to the extent herein set forth, that all action on its part for the issuance of the Bonds and the execution and delivery of this Indenture has been duly and effectively taken, and that the Bonds in the hands of the Holders and owners thereof are and will be valid and enforceable obligations of the City according to the import thereof. Section 403. Instruments of Further Assurance. The City covenants that it will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered such indenture or indentures supplemental hereto and such further acts, instruments and transfers as the Trustee may reasonably require for the better assuring, transferring, mortgaging, pledging, assigning and confirming unto the Trustee of the Trust Estate. 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. 22 4828-9200-1547.5 Section 405. Inspection of Books. All books and documents in the possession of the City relating to the Parking Revenues shall at all reasonable times be open to inspection by such accountants or other agencies as the Trustee may from time to time designate and by any Qualified Accountant required pursuant to the provisions hereof. Section 406. Tax Covenants. The City shall not use or permit the use of any Bond proceeds or any other funds of the City, directly or indirectly, in any manner, and will not take or permit to be taken any other action or actions which would adversely effect the exclusion of interest on any Bond from gross income for federal income tax purposes. No part of the proceeds of the Bonds shall at any time be used, directly or indirectly, to acquire securities or obligations the acquisition of which would cause any of such Bonds to be an "arbitrage bond" as defined in Sections 148(a) and (b) of the Code. The City agrees that so long as any of the Bonds remain Outstanding, they will comply with the provisions of each applicable Tax Regulatory Agreement. Section 407. Parking Fee Rates and Charges. The fees, leases, rents, fines and charges imposed by the City and generating the Parking Revenues are ratified, confirmed and continued by: the Authorizing Ordinance. The City covenants that the fees, leases, rents, fines and charges generating the Parking Revenues will not be reduced from current levels while any of the Bonds are Outstanding unless there is obtained from a Qualified Accountant a certificate to the effect that Net Parking Revenues in the then current and immediately succeeding Fiscal Years, with the reduced fees, leases, rents, fines or charges, will be at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding Fiscal Years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. The City further covenants that the fees, leases, rents, fines and charges generating the Parking Revenues shall, if and when necessary, from time to time, be increased in such a manner as will produce Net Parking Revenues in the then current and immediately succeeding Fiscal Years at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding Fiscal Years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. Section 408. Bank Qualification. The City has designated the Series 2012 Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. The City represents and covenants that the aggregate principal amount of its tax-exempt obligations (excluding "private activity bonds" within the meaning of Section 141 of the Code), including those of its subordinate entities, issued in calendar year 2012 will not exceed $10,000,000. Section 409. Completion of Projects; Certification of Completion Dates. The City covenants that in the case of the Series 2012 Bonds and each series of Additional Bonds issued to finance Project Costs in connection with the acquisition, construction or equipping of a Project, it will forthwith proceed to acquire, construct and equip the Project for which the Bonds of such series shall be issued, in accordance with applicable plans and specifications and in conformity with law and all requirements of all governmental authorities having jurisdiction thereover, and that it will complete the acquiring, constructing and equipping of such Project 23 4828-9200-1547.5 C with all expedition practicable. Promptly after the Completion Date, the City shall submit to the Trustee the certificate of an Authorized Representative which shall specify the Completion Date and shall state that acquisition, construction and equipping of the Project have 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 specified accounts within the Project Fund. Notwithstanding the foregoing, such certificate may state that it is given without prejudice to any rights against third parties which exist at the date thereof or which may subsequently come into being. Section 410. 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 411. Parking Revenues to be Used as Provided in Indenture. The City covenants that no Parking Revenues will be used for any purpose other than as provided in this Indenture, and that no contract or contracts will be entered into or any action taken by which the rights of the Trustee or of the Bondholders might be impaired or diminished. The City further covenants that it will adopt such resolutions and such rules and regulations as may be necessary or appropriate to carry out the obligations of the City under the provisions of this Indenture and the Act. Section 412. 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 any dissemination agent 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 any dissemination agent, as the case may be, to comply with its obligations under this Section 412. For purposes of this Section 412 only, "Beneficial Owner" shall mean any Person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including Persons holding Bonds through nominees, depositories or other intermediaries) or (b) is treated as the owner of Bonds for federal income tax purposes. Section 413. Representations, Warranties and Covenants Regarding Trust Estate. (a) This Indenture creates a valid and binding pledge of and security interest in the Trust Estate in favor of the Trustee (on behalf of the Bondholders) as security for payment of the Series 2012 Bonds, enforceable by the Trustee and the Bondholders in accordance with the terms hereof. (b) Under the laws of the State of Arkansas, (1) such pledge and security interest, (2) and each pledge, assignment, lien or other security interest made to secure any prior obligations 24 4828-9200-1547.5 of the City which, by the terms hereof, ranks on a parity with or prior to the pledge and assignment granted hereby, is and shall be prior to any judicial lien hereafter imposed on the Trust Estate to enforce a judgment against the City on a simple contract. By the date of issue of the Series 2012 Bonds, the City will have filed all financing statements describing, and transferring such possession or control over, such Trust Estate (and for so long as any Series 2012 Bond is outstanding the City will file, continue and amend all such financing statements and transfer such possession and control) as may be necessary to establish and maintain such priority in each jurisdiction in which the City is organized or such Trust Estate may be located or that may otherwise be applicable pursuant to the Uniform Commercial Code as enacted in the State of Arkansas. (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 such Trust Estate that ranks on a parity with or prior to the pledge 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 Trust Estate that ranks prior to or on a parity with the pledge 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 FUNDS AND DEPOSITS Section 501. Creation of Funds. (a) There are hereby created and established the following Funds: (i) Project Fund; (ii) Revenue Fund; (iii) Bond Fund; (iv) Debt Service Reserve Fund; (v) Cost of Issuance Fund; and (vi) Rebate Fund. (b) The Revenue Fund shall be maintained by the City with the Depository of its choice. All other Funds shall be held by the Trustee, which shall hold and maintain said Funds in trust, for the use and benefit of the Bondholders and the City, but subject to the permitted applications expressed herein. Section 502. Project Fund. (a) The Trustee shall deposit a portion of the proceeds of the Series 2012 Bonds to the credit of the Project Fund in accordance with the written directions of the City given as provided in Section 209 of this Indenture. 25 4828-9200-1547.5 (b) Moneys credited to the Project Fund shall be expended only as set forth in this Section 502. (c) Amounts in the Project Fund shall be expended and applied for the payment of Project Costs. Disbursements shall be made from the Project Fund on the basis of consecutively numbered Requisitions in the form attached hereto as Exhibit B signed by an Authorized Representative. Requisitions may be submitted to the Trustee by certified mail, first class mail or facsimile transmission. If the Trustee deems that a Requisition submitted by the City is sufficient pursuant to this Section 502, the amount requested thereunder shall be disbursed in payment of the Project Costs set forth therein, or in reimbursement of such Project Costs, within two (2) Business Days of the date of receipt of such Requisition by the Trustee. Each Requisition shall specify: (i) the name of the person or party to whom payment is to be made and the purpose of the payment; (ii) the amount to be paid thereunder; (iii) that such amount has not been previously paid by the City and is justly due and owing to the person(s) named therein as a proper payment or reimbursement of a Project Cost; and (iv) that no Event of Default exists under the Indenture and that, to the knowledge of the Authorized Representative, no event has occurred and continues which with notice or lapse of time or both would constitute an Event of Default under the Indenture. (d) The Trustee shall keep full and complete records concerning and reflecting all disbursements from the Project Fund and shall file an accounting of said disbursements if and when requested by the City. The Trustee shall only make payments from the Project Fund pursuant to and in accordance with Requisitions. In making payments from the Project Fund, the Trustee may rely on any Requisitions delivered to it pursuant to this Section 502, and the Trustee shall be relieved of all liability relating to payments made in accordance with such Requisitions and any supporting certificate or certificates requested by the Trustee without physical inspection of the Project. Within ninety (90) days following completion of the Project being financed with a particular series of Bonds, the City shall deliver to the Trustee its Certificate stating that the applicable portion of the Project is complete and the Trustee shall transfer the remaining moneys in the Project Fund relating to such series of Bonds (save and except moneys needed to satisfy unpaid Project Costs) to the Bond Fund for application to the retirement of the corresponding series of Bonds by redemption or purchase, as provided by Section 301(a)(2) and Section 504 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 26 4828-9200-1547.5 of Default, amounts on deposit in the Project Fund shall not be disbursed but shall instead be applied to the payment of Debt Service or the redemption price of the Bonds. Section 503. Revenue Fund. (a) There shall be deposited to the credit of the Revenue Fund to be held in a Depository selected by the City, as and when received, all Parking Revenues. (b) No later than the last day of each month, commencing no later than December 31, 2012, there shall be transferred from the Revenue Fund, in the following order, the amounts set forth below: FIRST: For deposit to 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 and an amount equal to one -twelfth (1/12) of the next scheduled principal maturity of Outstanding Bonds (including mandatory sinking fund redemptions); SECOND: For deposit to the Debt Service Reserve Fund, an amount sufficient to cure any deficiency in the Debt Service Reserve Fund; THIRD: For deposit to the Rebate Fund, an amount sufficient to satisfy the City's obligations under Section 506 hereof; and FOURTH: 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 Bond Fund and the Debt Service Reserve Fund shall be reduced by investment earnings, if any, in said Funds and, with respect to required deposits to the Bond Fund only, by any accrued interest deposited to 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. So long as there is no 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, the City may utilize moneys in the Revenue Fund for the payment of Operation and Maintenance Expenses, and may utilize any surplus therein (after the payment of Operation and Maintenance Expenses and after making the transfers required in subsection (b) above) for any other valid governmental purpose under State law. Section 504. Bond Fund. (a) There shall be deposited to the credit of the Bond Fund all moneys required to be transferred thereto pursuant to Sections 209, 502, 503, 505 and 507 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 Bond Fund the amounts required for 27 4828-9200-1547.5 the payment of interest on the Bonds due on such date, and on each redemption date, the amounts required for the payment of accrued interest on the 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 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, one day prior to such date, transfer an amount equal to the deficiency into the Bond Fund from the Funds indicated in the following order: FIRST: the Revenue Fund; and SECOND: the Debt Service Reserve Fund (for payment of principal and interest on the Bonds 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 209 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 March 1, 2013 with respect to the Series 2012 Bonds), any remaining moneys in the Cost of Issuance Fund shall be transferred to the Bond Fund. Section 506. Rebate Fund. (a) The Trustee shall establish and maintain, separate and apart from any other Funds 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 506, 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 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 28 4828-9200-1547.5 pursuant to the applicable 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 an Authorized Representative, 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 Securities, 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 506, Section 406 and each Tax Regulatory Agreement shall survive the defeasance or payment in full of the Bonds. Section 507. Debt Service Reserve Fund. As provided in Section 209 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. Each account within the Debt Service Reserve Fund shall be maintained in an amount equal to the related Reserve Requirement. Amounts on deposit in an account within the Debt Service Reserve Fund shall be used solely to pay the principal of and interest on the corresponding series of Outstanding Bonds for which there are no available funds in the Bond Fund to make such payments, as the same become due at maturity (including mandatory sinking fund redemption). If an account of the Debt Service Reserve Fund, by virtue of any such payment, is reduced below the related 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 507, the amount on deposit in an account of 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 related series of Outstanding Bonds. If an excess shall exist in an account in the Debt Service Reserve Fund over and above the related Reserve Requirement, such excess shall be transferred to the Bond Fund. Section 508. Cessation of Fund Deposits. When the moneys in the Bond Fund and the Debt Service Reserve Fund shall be and remain sufficient to pay in full the principal and interest on all Bonds then Outstanding in accordance with Article VIII of this Indenture, together with the required fees and expenses to be paid or reimbursed to the Trustee and any Paying Agent, the City shall have no further obligation to make further payments into said Funds. 29 4828-9200-1547.5 Section 509. 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, Project 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 Net Parking Revenues 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 on each series of Bonds during the applicable period, to the end that the Bonds of each series shall be equally and ratably secured by the Net Parking Revenues. Any Supplemental Indenture authorizing the issuance of Additional Bonds may provide that any proceeds of such series of Bonds and investment earnings thereon remaining after some specified date, or after the construction of all facilities to be financed with the proceeds of such series of Bonds, shall be applied to the redemption of such series of Bonds. ARTICLE VI [RESERVED] ARTICLE VII INVESTMENTS Section 701. Investment of Moneys. At the direction of the City or absent such direction, the Trustee shall invest moneys in Funds held by the Trustee in Investment Securities with maturity or redemption dates consistent with the times at which said moneys will be required for the purposes provided in this Indenture; provided, however, the stated maturity dates of Investment Securities in the Debt Service Reserve Fund shall not exceed five years from the date of investment thereof. The City may invest moneys held in the Revenue Fund in any investment obligations permitted by Arkansas law. Moneys in separate Funds may be commingled for the purpose of investment. Section 702. Investment Earnings. Subject to the provisions of the Tax Regulatory Agreements and Article V hereof, Investment Securities purchased with moneys held in or attributable to any Fund held by the City or the Trustee under the provisions of this Indenture shall be deemed at all times to be a part of such Fund and the income or interest earned, profits realized or losses suffered by a Fund due to the investment thereof shall be retained in, credited or charged, as the case may be, to such Fund unless otherwise provided pursuant to this Indenture. 30 4828-9200-1547.5 Section 703. Valuation of Funds. Investments in any Fund shall be evaluated monthly by the Trustee. The Trustee shall report the determined value of each Fund to the City. For the purpose of determining the amount in any Fund, the Trustee shall value all Investment Obligations credited to such Fund 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 and the Trustee. The Trustee shall sell or present for redemption any Investment Securities as necessary in order to provide money for the purpose of making any payment required hereunder, and the Trustee shall not be liable for any loss resulting from any such sale. Section 704. 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 VIII DISCHARGE OF LIEN Section 801. Discharge of Lien. If the City shall pay or cause to be paid to the owners of the Bonds the principal, premium, if any, and interest to become due thereon at the times and in the manner stipulated therein, and if the City shall keep, perform and observe all and singular the covenants and promises in the Bonds and in this Indenture expressed as to be kept, performed and observed by it on its part, then these presents and the estate and rights hereby granted shall cease, determine and be void, and thereupon the Trustee shall cancel and discharge the lien of this Indenture, and execute and deliver to the City such instruments in writing as shall be requisite to satisfy the lien hereof, and reconvey to the City the estate hereby conveyed, and assign and deliver to the City any property at the time subject to the lien of this Indenture which may then be in its possession, except moneys or Government Securities held by it for the payment of the principal of and premium, if any, and interest on the Bonds. Section 802. Bonds Deemed Paid. Any Bond shall be deemed to be paid within the meaning of this Article VIII 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) cash 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 31 4828-9200-1547.5 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. Government Securities used for the purpose of defeasing the Bonds must provide for the timely payment of principal and interest and cannot be callable or prepayable prior to maturity or earlier redemption of the defeased Bonds (excluding Government Securities that do not have a fixed par value and/or whose terms do not promise a fixed dollar amount at the maturity or call date). Section 803. 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 IX DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS Section 901. Events of Default. Each of the following events shall constitute and is referred to in this Indenture as an "Event of Default": (a) Default in the due and punctual payment of any interest on any Bond; (b) Default in the due and punctual payment of the principal of or premium, if any, on any Bond, whether at the stated maturity thereof, or upon proceedings for redemption thereof, or upon the maturity thereof by declaration; (c) Default in the payment of any other amount required to be paid under this Indenture or the performance or observance of any other of the covenants, agreements or conditions contained in this Indenture, or in the Bonds issued hereunder, and continuance thereof for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied shall have been given to the City by the Trustee, which may give such notice in its discretion and shall give such notice at the written request of Bondholders of not less than 51% in aggregate principal amount of 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 32 4828-9200-1547.5 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 902. 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 903. 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 1001 hereof, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred upon it by this Section 903 as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Bondholders. No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to the Bondholders) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or acquiescence therein; and every such right and power may be exercised from time to time and as often as may be deemed expedient. 33 4828-9200-1547.5 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 904. 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 905. 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, including, without limitation, the Parking Revenues, pending such proceedings with such powers as the court making such appointment shall confer. Section 906. 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 waive, to the extent that they 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 907. Application of Moneys. Available moneys remaining after discharge of costs, charges and liens prior to this Indenture shall be applied by the Trustee as follows: (a) Unless the principal of all the Bonds shall have become or shall have been declared due and payable, all such moneys shall be applied: First: To the payment to the Persons entitled thereto of all installments of interest then due, in the order of the maturity of the installments of such interest, and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or privilege; Second: To the payment to the Persons entitled thereto of the unpaid principal of any of the Bonds which shall have become due (other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of this Indenture), in the order of their due dates, with interest on such 34 4828-9200-1547.5 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 Person 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 IX then, subject to the provisions of paragraph (b) of this Section 907, 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 907. Whenever moneys are to be applied by the Trustee pursuant to the provisions of this Section 907, such moneys shall be applied by it at such times, and from time to time, as it shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an interest payment date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such dates shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date and shall not be required to make payment to the Holder of any Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Section 908. 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. 35 4828-9200-1547.5 Section 909. 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 1001, 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 1001, 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 910. Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the City and the Trustee shall be restored to their former positions and rights hereunder with respect to the property herein conveyed, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken, except to the extent the Trustee is legally bound by such adverse determination. Section 911. 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 901 hereof, unless prior to such waiver or rescission all arrears of principal (due otherwise than by declaration) and interest, and all expenses of the Trustee and Paying Agent, shall have been paid or provided for. In case of any such waiver or rescission the City, the Trustee and the Bondholders shall be restored to their former positions and rights hereunder respectively, but no such waiver or rescission shall extend to any subsequent or other default, or impair any right subsequent thereon. 36 4828-9200-1547.5 ARTICLE X TRUSTEE AND PAYING AGENTS Section 1001. 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 1002 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 1001, 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. (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. 37 4828-9200-1547.5 (e) As to the existence or nonexistence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a Certificate of the City signed by its Mayor and attested by the City Clerk as sufficient evidence of the facts therein contained and, prior to the occurrence of a default of which it has been notified as provided in subsection (g) of this Section 1001, or of which by that subsection it is deemed to have notice, shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion, at the reasonable expense of the City, in every case secure such further evidence as it may think necessary or advisable but shall in no case be bound to secure the same. The Trustee may accept a Certificate of the City Clerk under its seal to the effect that a resolution in the form therein set forth has been adopted by the City as conclusive evidence that such resolution 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 901 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 Parking Revenues 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. (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 38 4828-9200-1547.5 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 1002. Fees, Charges and Expenses of Trustee and Paying Agents; Trustee's Prior Lien. (a) Subject to subsection (b) of this Section 1002, 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 2012 Bonds, the Trustee's initial authentication fee shall be $2,500 and the annual administration fee of the Trustee shall be up to, but shall not exceed, $2,500. 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 1002(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 1002(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. Section 1003. 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 2012 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 held by it under the provisions of this Indenture; 39 4828-9200-1547.5 (ii) the amount on deposit with it at the end of such month to the credit of each such Fund; (iii) a brief description of all obligations held by it as an investment of moneys in each such Fund; (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. All records and files pertaining to each such Fund 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 1004. Notice to Bondholders of Default. If a default occurs of which the Trustee is pursuant to the provisions of Section 1001(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 1005. 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 1005 are subject to the approval of the court having jurisdiction in the premises. Section 1006. Merger or Consolidation of Trustee. Any bank or trust company to which the Trustee may be merged, or with which it may be consolidated, or to which it may sell or transfer its trust business and assets as a whole or substantially as a whole, or any bank or trust company resulting from any such sale, merger, consolidation or transfer to which it is a party, ipso facto, shall be and become successor trustee hereunder and vested with all of the title to the whole property or Trust Estate and all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed, or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that such successor trustee shall have capital and surplus of at least $20 million. Section 1007. 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 40 4828-9200-1547.5 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 1008. Removal of Trustee. (a) 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; provided, however, that such removal of the Trustee shall in no event take effect until a successor shall have been appointed and shall have accepted the duties of Trustee. (b) The Trustee may be removed at any time by the City upon adoption of a resolution providing for such removal and delivery of a copy thereof to the Trustee; provided, however, that such removal of the Trustee shall in no event take effect until a successor shall have been appointed and shall have accepted the duties of Trustee. Section 1009. 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 (except with respect to any removal of the Trustee by the City pursuant to Section 1008(b), in which case a successor shall be appointed by the City), 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 $20 million. Section 1010. 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 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. 41 4828-9200-1547.5 Section 1011. 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 1012. 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 4n writing shall, on request, be executed, acknowledged and delivered by the City. Every such co -trustee shall, to the extent permitted by law, be appointed subject to the following provisions and conditions, namely: (1) The Bonds shall be authenticated and delivered, and all powers, duties, obligations and rights conferred upon the Trustee in respect of the custody of all money and securities pledged or deposited hereunder, shall be exercised solely by the Trustee; and (2) The Trustee, at any time by an instrument in writing, may remove any such separate Trustee or co -trustee. Every instrument, other than this Indenture, appointing any such co -trustee shall refer to this Indenture and the conditions of this Article X 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. Section 1013. Designation and Succession of Paying Agents. The Trustee and any other banks or trust companies designated as Paying Agent or Paying Agents in any Supplemental Indenture or in an instrument appointing a successor Trustee shall be the Paying Agent or Paying Agents for the Bonds. 42 4828-9200-1547.5 Any bank or trust company with which or into which any Paying Agent may be merged or consolidated, or to which the assets and business of such Paying Agent may be sold, shall be deemed the successor of such Paying Agent for the purposes of this Indenture. If the position of Paying Agent shall become vacant for any reason, the City shall, within thirty (30) days thereafter, appoint such bank or trust company as shall be specified by the City as such Paying Agent to fill such vacancy; provided, however, that, if the City shall fail to appoint such Paying Agent within said period, the Trustee shall make such appointment. The Paying Agents shall enjoy the same protective provisions in the performance of its duties hereunder as are specified in Section 1001 hereof with respect to the Trustee insofar as such provisions may be applicable. ARTICLE XI SUPPLEMENTAL INDENTURES Section 1101. 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 43 4828-9200-1547.5 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 1102 hereof and which, in the judgment of the Trustee, is not to the prejudice of the Trustee. Section 1102. Supplemental Indentures Requiring Consent of Bondholders. Subject to the terms and provisions contained in this Section, 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) deprive 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 1101 of this Article XI. 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 1102. 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 1103. Effect of Supplemental Indentures. Upon the execution of any Supplemental Indenture entered into pursuant to Section 1101 or 1102 hereof, this Indenture shall be deemed to be modified and amended in accordance therewith. 44 4828-9200-1547.5 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: 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 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 45 4828-9200-1547.5 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. 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 the City. In determining whether Bondholders of the requisite aggregate principal amount of the Bonds have concurred in any direction, consent or waiver under this Indenture, Bonds which are owned by the City shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Bonds which the Trustee knows are so owned shall be so disregarded. Bonds so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Bonds and that the pledgee is not the City. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. 46 4828-9200-1547.5 IN WITNESS WHEREOF, the City has caused these presents to be signed in its name and behalf by its Mayor and to be 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. CITY OF FAYETTEVILLE, ARKANSAS ATTEST: City Clerk SIMMONS FIRST TRUST COMPANY, N.A., as Trustee B Y tl- Tie: Assistant Vice President ATTEST: Title: V.P. & Trust Officer 47 4828-9200-1547.5 ACKNOWLEDGMENT STATE OF ARKANSAS ) ) ss. COUNTY OF WASHINGTON ) Before me a Notary Public, duly commissioned, qualified and acting within and for the State and county aforesaid, appeared in person the within named Lioneld Jordan and Sondra Smith, Mayor and City Clerk, respectively, of the City of Fayetteville, Arkansas, to me personally known, who stated that they were duly authorized in their respective capacities to execute the foregoing instrument for and in the name of the City, and further stated and acknowledged that they had signed, executed and delivered the foregoing instrument for the consideration, uses and purposes therein mentioned and set forth. IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this r� day of December, 2012. My Commission expires: #123Q•; Notary Public [ACKNOWLEDGEMENT TO TRUST INDENTURE] 48 4828-9200-1547.5 ACKNOWLEDGMENT STATE OF ARKANSAS ) ) ss. COUNTY OF JEFFERSON ) Before me a Notary Public, duly commissioned, qualified and actin wi,t^h,i,�n^ and for the State and county aforesaid, f�e ared in person 't�}epwithin named l-V ILJ�(J� 0&%nd the and the V �f , respectively, of Si ons First Trust Company, N.A., to me personally known, who stated that they were duly authorized in their respective capacities to execute the foregoing instrument for and in the name of the trust company and further stated and acknowledged that they had signed, executed and delivered the foregoing instrument for the consideration, uses and purposes therein mentioned and set forth. IN�TESTIMONY WHEREOF, I have hereunto set my hand and official seal this day of December, 2012. Notary Public My Commission expires: �1 f3 2c�I� (sA TA OFFICIAL SEAL, SHERI L. ALLEN NOTARY PUBLIC ARKANSAS JEFFERSON �OUNTY COMMISSION #12373967 MY COMMISSION EXP. 11-13-2019 [ACKNOWLEDGEMENT TO TRUST INDENTURE] 49 4828-9200-1547.5 EXHIBIT A TO TRUST INDENTURE Form of Series 2012 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. No. R12- $ UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: % Maturity Date: June 1, 20 Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: KNOW ALL MEN BY THESE PRESENTS: CUSIP: 31266V 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, payment of interest hereon shall be made by check or draft of the Trustee to the Registered A-1 4828-9200-1547.5 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 "City of Fayetteville, Arkansas Parking Revenue Improvement Bond, Series 2012," is a series of bonds in the aggregate original principal amount of $6,220,000 (the "Series 2012 Bonds"), issued for the purpose of (i) financing costs of acquiring, constructing and equipping parking deck facilities and related roadway and other improvements (collectively, the "Project"), (ii) funding a debt service reserve, and (iii) paying expenses of issuing the Series 2012 Bonds. The Series 2012 Bonds are issued under and are secured and entitled to the protection given by a Trust Indenture dated as of December 1, 2012 (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. The Series 2012 Bonds are not general obligations of the City, but are limited and special obligations payable solely from and secured by a pledge of net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities owned by third parties (the "Net Parking Revenues"), as specified in, and in accordance with the provisions of, the Indenture. The Indenture provides that the City may hereafter issue Additional Bonds from time to time under certain terms and conditions contained in the Indenture and, if issued, such Additional Bonds will rank on a parity of security with the Series 2012 Bonds and be equally and ratably secured by and entitled to the protection of the Indenture. 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 registered owners of the Series 2012 Bonds, and the terms upon which the Series 2012 Bonds are issued and secured. The City has covenanted that the fees, leases, rents, fines and charges generating the Parking Revenues will not be reduced from current levels while any of the Series 2012 Bonds are Outstanding unless there is obtained from a Qualified Accountant a certificate to the effect that Net Parking Revenues in the then current and immediately succeeding fiscal years, with the reduced fees, leases, rents, fines or charges, will be at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding fiscal years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. The City has further covenanted that the fees, leases, rents, fines and charges generating the Parking Revenues shall, if and when necessary, from time to time, be increased in such a manner as will produce Net Parking Revenues in the then current and immediately succeeding fiscal years at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding fiscal years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. A-2 4828-9200-1547.5 The Series 2012 Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution and Arkansas Code Annotated (1998 Repl. & 2011 Supp.) §§14-164-401 et seq. (the "Act"), and pursuant to Ordinance No. 5457 of the City adopted on November 15, 2012. The Series 2012 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation and the Series 2012 Bonds shall never constitute an obligation or charge against the general credit or taxing powers of the City. The holder of this Series 2012 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 2012 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 2012 Bonds will be subject to redemption prior to maturity as follows: (a) The Series 2012 Bonds are subject to redemption prior to maturity, at the option of the City, on and after June 1, 2018, in whole or in part at any time and in any order of maturity directed by the City, from funds from any source, at a redemption price equal to one hundred percent (100%) of the principal amount of the Series 2012 Bonds being redeemed, plus accrued interest to the date of redemption. (b) The Series 2012 Bonds shall be redeemed prior to maturity, in whole or in part, on any interest payment date, in inverse order of maturity, at a redemption price equal to one hundred percent (100%) of the principal amount of the Series 2012 Bonds being redeemed, plus accrued interest to the date of redemption, from unexpended proceeds of the Series 2012 Bonds (if such unexpended proceeds equal or exceed $100,000) not needed for paying costs of the Project Costs. (c) The Series 2012 Bonds maturing on June 1, 2032, are subject to mandatory sinking fund redemption prior to maturity in part, on June 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 2028 $275,000 2029 $280,000 2030 $290,000 2031 $300,000 2032 (maturity) $310,000 A-3 4828-9200-1547.5 (d) The Series 2012 Bonds maturing on June 1, 2037, are subject to mandatory sinking fund redemption prior to maturity in part, on June 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; and Year 2033 2034 2035 2036 2037 (maturity) Principal Amount $320,000 $330,000 $345,000 $355,000 $370,000 At its option, to be exercised on or before the 451h day next preceding any mandatory sinking fund redemption date for any Series 2012 Bonds, the City may deliver to the Trustee for cancellation Series 2012 Bonds of the appropriate maturity, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2012 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 2012 Bonds so to be redeemed shall be accordingly reduced. This Series 2012 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 2012 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 2012 Bonds may be exchanged for a like aggregate principal amount of Series 2012 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 2012 Bonds or for any claim based thereon or upon any obligation, covenant or agreement contained in the Series 2012 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 2012 Bonds. The Series 2012 Bonds have been designated by the City as "qualified tax-exempt obligations" within the meaning of Section 265(b) of the Internal Revenue Code of 1986, as amended. A-4 4828-9200-1547.5 This Series 2012 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 2012 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 2012 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 2012 Bonds as the same become due and payable will be sufficient in amount for that purpose. This Series 2012 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-5 4828-9200-1547.5 IN WITNESS WHEREOF, the City of Fayetteville, Arkansas has caused this Series 2012 Bond to be executed by its Mayor and City Clerk, thereunto duly authorized (by their manual or facsimile signatures), and its corporate seal to be affixed or imprinted hereon, all as of the date hereof shown above. CITY OF FAYETTEVILLE, ARKANSAS By: ATTEST: Mayor By: City Clerk (SEAL) A-6 4828-9200-1547.5 (Form of Trustee's Certificate) TRUSTEE'S CERTIFICATE OF AUTHENTICATION This bond is one of the Series 2012 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 2012 Bonds. SIMMONS FIRST TRUST COMPANY, N.A., as Trustee Authorized Signature A-7 4828-9200-1547.5 (Form of Assignment) ASSIGNMENT FOR VALUE RECEIVED, , hereby sells, assigns, and transfers unto , the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints as attorney to transfer the within Bond on the books kept for registration thereof with full power of substitution in the premises. DATE: , 20 . Transferor GUARANTEED BY: NOTICE: Signature(s) must be guaranteed by an institution satisfactory to the Trustee or other transfer agent 4828-9200-1547.5 EXHIBIT B TO TRUST INDENTURE REQUISITION City of Fayetteville, Arkansas Series 2012 Parking Revenue Improvement Bonds Date: Requisition No.: TO: Simmons First Trust Company, N.A., as Trustee Pursuant to the provisions of Section 502 of the Trust Indenture dated as of December 1, 2012 (the "Indenture"), by and between the City of Fayetteville, Arkansas (the "Issuer") and you, as trustee, you are authorized to make the following described payment directly to the Payee named below from the Project Fund: Name and Address of Payee: Amount of Payment: $ General Classification of the Expenditures: The undersigned hereby certifies that he is authorized to deliver this Requisition on behalf of the Issuer. The amount requested hereunder has not been the basis for any previous Requisition by the Issuer and is justly due and owing to the person(s) named herein as a proper payment or reimbursement of a Project Cost. No Event of Default exists under the Indenture and, to the knowledge of the undersigned, no event has occurred and continues which with notice or lapse of time or both would constitute an Event of Default under the Indenture. CITY OF FAYETTEVILLE, ARKANSAS By: Authorized Representative B-1 4828-9200-1547.5 TAX REGULATORY AGREEMENT between CITY OF FAYETTEVILLE, ARKANSAS and SIMMONS FIRST TRUST COMPANY, N.A., as Trustee Dated December 19, 2012 Relating to: $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 Prepared by: Kutak Rock LLP 124 West Capitol Avenue Suite 2000 Little Rock, Arkansas 72201 EXECUTION COPY 4847-3900-9042.2 TAX REGULATORY AGREEMENT THIS TAX REGULATORY AGREEMENT (this "Tax Regulatory Agreement) is made and dated December 19, 2012, 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 December 1, 2012, by and between the Issuer and the Trustee (the "Indenture"). WITNESSETH: WHEREAS, pursuant to the Constitution and laws of the State of Arkansas, including particularly Arkansas Code Annotated §§ 14-164-401 et seq. (collectively, the "Authorizing Legislation"), the Issuer has authorized the issuance of $6,220,000 principal amount of its Parking Revenue Improvement Bonds, Series 2012 (the "Series 2012 Bonds"), pursuant to the Indenture and Ordinance No. 5457, adopted and approved on November 15, 2011 (the "Authorizing Ordinance"), for the purposes of providing a portion of the funds needed (i) to finance all or a portion of the costs of acquisition, construction and equipping of parking deck facilities and related roadway and other improvements within the Issuer's Entertainment District (the "Project"), (ii) to fund a deposit to the Debt Service Reserve Fund (as defined herein), and (iii) to pay the costs of issuance of the Series 2012 Bonds; and WHEREAS, the Issuer has determined that the issuance, sale and delivery of the Series 2012 Bonds is necessary in order to provide the financing of the Project; 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 2012 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: 4847-3900-9042.2 ARTICLE I DEFINITIONS Section LL 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 2012 Bonds and ends June 1, 2013. "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) underwriters' spread (whether realized directly or derived through purchase of the Series 2012 Bonds at a discount below the price at which a substantial number of Series 2012 Bonds are sold to the public); (b) counsel fees (including bond counsel, underwriter's counsel, issuer's counsel, trustee 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 and escrow agent fees incurred in connection with the borrowing; (f) paying agent and certifying and authenticating agent fees related to issuance of the Series 2012 Bonds; 2 4847-3900-9042.2 (g) accountant fees related to issuance of the Series 2012 Bonds; (h) printing costs (for the Series 2012 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). "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 2012 Bonds; (e) Any amounts held in a pledged fund or reserve fund for the Series 2012 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. "Project" means the various facilities to be financed with proceeds of the Series 2012 Bonds. "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 November 15, 2011, 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 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 2012 Bond proceeds. "Rebate Amount" means, with respect to the Series 2012 Bonds, the amount computed as described in Section 4.13 hereof. 3 4847-3900-9042.2 "Regulation" or "Regulations" means the temporary, proposed or final Income Tax Regulations promulgated by the Department of the Treasury and applicable to the Series 2012 Bonds. 2012. "Series 2012 Bonds" means the Issuer's Parking Revenue Improvement Bonds, Series "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. "Yield" means, with respect to the Series 2012 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 Tan 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. 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 2012 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 2012 Bond Proceeds; Ownership of the Project. The Issuer hereby represents and warrants for the benefit of the Bond Counsel, the Trustee and holders of the Series 2012 Bonds that the proceeds of the Series 2012 Bonds will be used (i) to finance or reimburse all or a portion of the costs of the acquisition, construction and equipping of the Project, (ii) to fund a deposit to the Debt Service Reserve Fund (hereinafter defined), and (iii) to pay Costs of Issuance of the Series 2012 Bonds, and that all of the Project financed with proceeds of the Series 2012 Bonds will be owned and operated by the Issuer. The Issuer further represents and warrants that it will not use or permit the use of any of the proceeds of the Series 2012 Bonds or any other funds of the Issuer, directly or indirectly, in any manner, and will not 4 4847-3900-9042.2 take or permit to be taken any other action, including use of the Project, that would cause interest on the Series 2012 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 in a manner that would cause the Series 2012 Bonds to be deemed "private activity bonds" within the meaning of Section 141 of the Code. The Issuer represents that the current plans for the acquisition, construction and equipping of the Project, and its subsequent use, are as set forth on Exhibit B attached hereto. Section 2.3. Change in Use or Ownership of the Project. The Issuer represents that it intends to own and operate the Project at all times during the term of the Series 2012 Bonds. The Issuer does not know of any reason why the Project 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 the use, ownership or nature of any portion of the Project so long as any of the Series 2012 Bonds are outstanding unless, in the written opinion of Bond Counsel, such change will not result in the inclusion of interest on the Series 2012 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 portions of the Project as may be necessary or desirable due to normal wear, tear or obsolescence. The Issuer will monitor the use of the Project in order to assure that interest on the Series 2012 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 the change in use or purpose of the Project any remedial action is required under the Code or the Regulations. Section 2.4. Bonds in Registered Form. The Series 2012 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 2012 Bonds and the application of the proceeds derived therefrom. The Issuer hereby represents, for the benefit of Bond Counsel and the holders of the Series 2012 Bonds, that it has reviewed the Internal Revenue Form 8038-G 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 2012 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 2012 Bonds to be "federally guaranteed" within the meaning of § 149(b) of the Code. Section 2.7. Series 2012 Bonds Not Hedge Bonds. The Issuer represents that it reasonably expects to expend at least 85 percent of the "spendable proceeds" of the Series 2012 Bonds within three years of the date hereof and not more than 50 percent of the proceeds of the Series 2012 Bonds will be invested in Nonpurpose Obligations having substantially guaranteed yields for four years or more. 5 4847-3900-9042.2 Section 2.8. Reimbursement. The Issuer acknowledges its understanding that if any proceeds of the Series 2012 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 2012 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 November 15, 2011, the date the Issuer adopted the Authorizing Ordinance which expressed its official intent to issue tax-exempt bonds to finance the Project, and (B) Series 2012 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. Section 2.9. No Replacement. No portion of the amounts received from the sale of the Series 2012 Bonds will be used as a substitute for other funds which were otherwise to be used as a source of financing for the financing of 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 2012 Bonds. Section 2.10. No Abusive Arbitrage Device. The Issuer represents that the Series 2012 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 2012 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 2012 Bonds, (2) are being sold pursuant to the same plan of financing as the Series 2012 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 2012 Bonds. Section 2.12. [Reserved]. 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 2012 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 2012 Bonds and the discharge of the Indenture, until the final maturity date of all Series 2012 Bonds Outstanding and payment of such Series 2012 Bonds. ARTICLE III 6 4847-3900-9042.2 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 2012 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 2012 Bonds and the discharge of the Indenture, until the final maturity date of all Series 2012 Bonds Outstanding and payment of such Series 2012 Bonds. The Trustee shall keep records of the expenditure of Gross Proceeds of the Series 2012 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. 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 2012 Bond proceeds and other moneys in order to support the Issuer's conclusion that the Series 2012 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 2012 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 2012 Bonds, including (1) the Indenture, (2) this Tax Regulatory Agreement, and (3) 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 2012 Bonds. The Issuer is issuing and delivering the Series 2012 Bonds simultaneously with the execution of this Tax Regulatory Agreement, pursuant to the Authorizing Legislation, the Indenture and the Authorizing Ordinance. The Series 2012 Bonds are being issued for the purposes of providing a portion of the funds needed for (i) acquiring, constructing and equipping the Project, (ii) making a deposit to the Debt Service Reserve Fund, and (iii) paying Costs of Issuance of the Series 2012 Bonds. The proceeds of the Series 2012 Bonds to be used to acquire, construct and equip the Project, 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 have been established with the Trustee pursuant to the Indenture in connection with the Series 2012 Bonds: 7 4847-3900-9042.2 Project Fund; Revenue Fund; Bond Fund; Debt Service Reserve Fund; Costs of Issuance Fund; and Rebate Fund. Section 4.5. Source and Disbursement of Series 2012 Bond Proceeds. The Series 2012 Bonds will be sold to the public at a purchase price equal to $6,205,874.55 (representing the $6,220,000.00 par amount of the Series 2012 Bonds, less net original issue discount of $23,001.45 and plus $8,876.00 of accrued interest thereon). The Underwriter will retain an underwriting discount of $108,850.00. Accordingly, the net amount of proceeds of the Series 2012 Bonds to be received by the Issuer shall be $6,097,024.55, which amount shall be deposited and expended as follows: (i) $8,876.00, representing the accrued interest on the Series 2012 Bonds, will be deposited in the Bond Fund and will be utilized to make a portion of the first interest payment due on the Series 2012 Bonds on June 1, 2013; (ii) $190,316.25 of the proceeds will be deposited into the Debt Service Reserve Fund; (iii) $40,000.00 of the proceeds will be deposited into the Cost of Issuance Fund and used to pay Costs of Issuance of the Series 2012A Bonds; and (iv) the remaining $5,857,832.30 of proceeds will be deposited in the Project Fund and will be used to pay Qualified Project Costs relating to the Project. Section 4.6. Costs of Issuance Fund. The Indenture creates the Costs of Issuance Fund which will be initially funded with $40,000.00 of Series 2012 Bond proceeds. Moneys in the Cost of Issuance Fund will be used to pay Costs of Issuance associated with the Series 2012 Bonds. Proceeds of the Series 2012 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 2012 Bonds and may be invested until expended in Nonpurpose Obligations that bear a Yield that is materially higher than the Yield on the Series 2012 Bonds. The earnings on such investments will be subject to the rebate requirements described in Section 4.13 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 and Bond Fund. The Indenture creates the Revenue Fund and the Bond Fund. Moneys will be transferred to the Revenue Fund, 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 2012 Bonds as due. Moneys deposited in the Revenue 4847-3900-9042.2 Fund and the Bond Fund will be spent within a 13-month period beginning on the date of the original deposit in the Revenue Fund, and any amount received from investment of moneys held in the Revenue Fund or the Bond Fund will be spent within a one-year period beginning on the date of receipt. The Revenue Fund and the Bond Fund will be completely depleted at least once a year. Accordingly, the Revenue Fund and the Bond Fund constitute "bona fide debt service funds" for the Series 2012 Bonds. Amounts in the Revenue Fund and Bond Fund may be invested until expended in Nonpurpose Obligations that bear a Yield that is materially higher than the Yield on the Series 2012 Bonds. The earnings on such investments will be subject to the rebate requirements described in Section 4.13 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 securing the Series 2012 Bonds, which will be initially funded with $190,316.25 of proceeds of the Series 2012 Bonds. Moneys in the Debt Service Reserve Fund will be expended solely to pay principal of and interest on the Series 2012 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 50% of the maximum annual debt service on the Series 2012 Bonds. 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 2012 Bonds within the meaning of the Code and the Regulations. Amounts in the Debt Service Reserve Fund may invested until expended in Nonpurpose Obligations that bear a Yield that is materially higher than the Yield on the Series 2012 Bonds. The earnings on such investments will be subject to the rebate requirements described in Section 4.13 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 $5,857,832.30 of Series 2012 Bond proceeds. Moneys in the Project Fund will be used to pay costs associated with the acquisition, construction and equipping of the Project. The Issuer has incurred, or will incur within six (6) months of the date of issuance of the Series 2012 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 December 19, 2015. 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 2012 Bonds. Until December 19, 2015, the Net Sale Proceeds of the Series 2012 Bonds deposited in the Project Fund may be invested until expended in Nonpurpose Obligations that bear a Yield that is materially higher than the Yield on the Series 2012 Bonds. The earnings on such investments will be subject to the rebate requirements described in Section 4.13 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. Yield on the Series 2012 Bonds. (a) The Underwriter has certified (i) that the initial offering price of Series 2012 Bonds, as set forth in Section 4.5 of this Tax Regulatory 9 4847-3900-9042.2 Agreement, represents the maximum initial offering price at which a substantial amount of each maturity of the Series 2012 Bonds were offered for sale and sold to the 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 2012 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 2012 Bonds constitutes a true and correct summary thereof. (b) The Yield on the Series 2012 Bonds has been calculated by the Underwriter to be not less than 3.1490250%. 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 4.11. Arbitrage Representations. Pursuant to the issuance of the Series 2012 Bonds, the Issuer hereby represents, certifies and warrants as follows: (a) Other than the aforementioned funds and accounts 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 2012 Bonds or any contract securing the Series 2012 Bonds or any arrangement providing for compensating balances to be maintained by the Issuer with any holder of the Series 2012 Bonds. (b) All funds established pursuant to the Indenture will be invested pursuant to the Indenture and this Tax Regulatory Agreement. (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. 10 4847-3900-9042.2 (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 2012 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 2012 Bond proceeds, and (vi) any collateral security requirements of the investment contract are reasonable. Section 4.12. Arbitrage Compliance. The Issuer acknowledges that the continued exclusion of interest on the Series 2012 Bonds from gross income of the recipients for purposes of federal income taxation depends, in part, upon compliance with the arbitrage limitations imposed by Section 148 of the Code, including the rebate requirement described in Sections 4.13, 4.14 and 4.15 below. The Issuer hereby agrees and covenants that it shall not permit at any time or times any of the proceeds of the Series 2012 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 2012 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 4.13 through 4.15 below with respect to the investment of Gross Proceeds on deposit in the funds and accounts established under the Indenture and to direct the Trustee to make the required transfers and dispositions described in Sections 4.13, 4.14 and 4.15, below. The Issuer will monitor the investment of proceeds of the Series 2012 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 4.13. 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 11 4847-3900-9042.2 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 2012 Bonds, together with any income attributable to such excess. The Cost of Issuance Fund, the Revenue Fund, the Bond Fund, the Debt Service Reserve Fund, the Project 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 2012 Bonds to be held by the Trustee and used as provided in this Section 4.13. 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 2012 Bonds and the final payment to the United States of America described in Section 4.14 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 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 Tan 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 12 4847-3900-9042.2 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 2012 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) Revenue Fund, (III) Bond Fund, (IV) Debt Service Reserve Fund, (V) Project Fund, and (VI) 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 Bond Fund if the earnings on the Bond Fund do not 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 2012 Bonds; and (III) if all outstanding Series 2012 Bonds are redeemed prior to the maturity date of the Series 2012 Bonds, the date on which all Series 2012 Bonds are redeemed. In addition, where Nonpurpose Obligations are retained by the Trustee after retirement of the Series 2012 Bonds, any unrealized gains or losses as of the date of retirement of the Series 2012 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. 13 4847-3900-9042.2 (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 2012 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. Section 4.14. 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 2012 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. 14 4847-3900-9042.2 (c) If during any Computation Period, the aggregate amount earned on Nonpurpose Obligations in which the Gross Proceeds of the Series 2012 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 2012 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 4.14. Section 4.15. 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 4.14. (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 4.16. 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. 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 2012 Bonds through the date that is six years after the last Series 2012 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 2012 Bonds from the gross income of the recipients for purposes of federal income taxation. 15 4847-3900-9042.2 ARTICLE VII EVENTS OF DEFAULT; REMEDIES 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 2012 Bonds by pursuing any available remedy, including a suit at law or in equity. ARTICLE VIII PROTECTION OF TRUSTEE Section 8.L 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. (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.] 16 4847-3900-9042.2 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: tr Title: [SIGNATURE PAGE TO TAX REGULATORY AGREEMENT] 4847-3900-9042.1 EXHIBIT A TO TAX REGULATORY AGREEMENT UNDERWRITER'S CERTIFICATE The undersigned officer of Stephens Inc., the Underwriter (defined below) for the $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds, Series 2012 (the "Bonds"), hereby makes the certifications set forth below in connection with the execution and delivery of the Bonds. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Tan 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 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 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 cover of the Issuer's Official Statement dated December 11, 2012 (the "Official Statement"); (b) At the time the Underwriter agreed to purchase the Bonds, based upon the prevailing market conditions, the Underwriter had no reason to believe that any of the 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 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 Bonds, the first prices at which the Underwriter reasonably expected to sell 10% of each maturity of the 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 4847-3900-9042.2 (3) The Yield on the Bonds is 3.1490250%. For purposes of calculating the Yield on the Bonds, the 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 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 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 Bonds 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: December 19, 2012 STEPHENS INC. By: _ Title: A-2 4847-3900-9042.2 EXHIBIT B TO TAX REGULATORY AGREEMENT THE PROJECT It is currently anticipated that the Project will consist of the acquisition, construction and equipping of a multi -level parking deck facility of approximately 106,000 total square feet and containing approximately 250 parking spaces, together with related roadway and other improvements. It is expected that approximately 28 of said spaces will be reserved for use at no charge to employees of the Walton Arts Center, an Arkansas nonprofit corporation (the "Arts Center") and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The remainder of said parking spaces will be available for lease to members of the general public at rates to be established by the Issuer. The Project is expected to include liner buildings of approximately 19,000 square feet. It is presently anticipated that employees of the Issuer will occupy approximately 3,200 square feet of such space, with the remainder to be utilized by Arts Center employees. The Project facility may abut other non -governmental entities. No proceeds construction or equipping of such buildings. buildings to be constructed and occupied by private, of the Bonds will be utilized in the acquisition, 4823-2313.8323.1 B-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. No. R12-1 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 1.000% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: Sixty Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $60,000 Maturity Date: June 1, 2013 CUSIP: 31266V AA3 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 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. No. R12-2 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 1.250% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: One Hundred Twenty Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $120,000 Maturity Date: June 1, 2014 CUSIP: 31266V AB 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 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. No. R12-3 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 1.500% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: One Hundred Twenty Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $120,000 Maturity Date: June 1, 2015 CUSIP: 31266V AC9 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 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. No. R12-4 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 2.000% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: One Hundred Fifty Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $150,000 Maturity Date: June 1, 2016 CUSIP: 31266V AD7 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 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. No. R12-5 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 2.000% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: Two Hundred Ten Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $210,000 Maturity Date: June 1, 2017 CUSIP: 31266V AE5 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 - 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. No. R12-6 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 2.000% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: Two Hundred Fifteen Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $215,000 Maturity Date: June 1, 2018 CUSIP: 31266V AF2 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 az� 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. No. R12-7 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 2.000% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: Two Hundred Twenty Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $220,000 Maturity Date: June 1, 2019 CUSIP: 31266V AGO 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 L 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. No. R12-8 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 2.000% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: Two Hundred Twenty -Five Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $225,000 Maturity Date: June 1, 2020 CUSIP: 31266V AH8 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 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. No. R12-9 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 2.250% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: Two Hundred Thirty Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $230,000 Maturity Date: June 1, 2021 CUSIP: 31266V AJ4 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 F f 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. No. R12-10 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 2.400% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: Two Hundred Thirty -Five Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $235,000 Maturity Date: June 1, 2022 CUSIP: 31266V AK1 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 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. No. R12-11 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 2.600% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: Two Hundred Forty Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $240,000 Maturity Date: June 1, 2023 CUSIP: 31266V AL9 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 s 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. No. R12-12 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 2.700% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: Two Hundred Forty -Five Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $245,000 Maturity Date: June 1, 2024 CUSIP: 31266V AM7 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 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. No. R12-13 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 2.800% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: Two Hundred Fifty Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $250,000 Maturity Date: June 1, 2025 CUSIP: 31266V AN5 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 'rt pt- Lj 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. No. R12-14 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 2.850% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: Two Hundred Sixty Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $260,000 Maturity Date: June 1, 2026 CUSIP: 31266V APO 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 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. No. R12-15 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 2.900% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. Principal Amount: Two Hundred Sixty -Five Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: $265,000 Maturity Date: June 1, 2027 CUSIP: 31266V AQ8 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 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. No. R12-16 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 3.100% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. $1,455,000 Maturity Date: June 1, 2032 Principal Amount: One Million Four Hundred Fifty -Five Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: CUSIP: 31266V AR6 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 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. No. R12-17 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BOND, SERIES 2012 Interest Rate: 3.625% Date of Bond: December 1, 2012 Registered Owner: CEDE & CO. $1,720,000 Maturity Date: June 1, 2037 Principal Amount: One Million Seven Hundred Twenty Thousand Dollars KNOW ALL MEN BY THESE PRESENTS: CUSIP: 31266V AS4 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 June 1 and December 1 of each year, commencing on the June 1 or December 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, 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. 4811-9672-3474.1 This bond, designated "City of Fayetteville, Arkansas Parking Revenue Improvement Bond, Series 2012," is a series of bonds in the aggregate original principal amount of $6,220,000 (the "Series 2012 Bonds"), issued for the purpose of (i) financing costs of acquiring, constructing and equipping parking deck facilities and related roadway and other improvements (collectively, the "Project"), (ii) funding a debt service reserve, and (iii) paying expenses of issuing the Series 2012 Bonds. The Series 2012 Bonds are issued under and are secured and entitled to the protection given by a Trust Indenture dated as of December 1, 2012 (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. The Series 2012 Bonds are not general obligations of the City, but are limited and special obligations payable solely from and secured by a pledge of net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities owned by third parties (the "Net Parking Revenues"), as specified in, and in accordance with the provisions of, the Indenture. The Indenture provides that the City may hereafter issue Additional Bonds from time to time under certain terms and conditions contained in the Indenture and, if issued, such Additional Bonds will rank on a parity of security with the Series 2012 Bonds and be equally and ratably - secured by and entitled to the protection of the Indenture. 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 registered owners of the Series 2012 Bonds, and the terms upon which the Series 2012 Bonds are issued and secured. The City has covenanted that the fees, leases, rents, fines and charges generating the Parking Revenues will not be reduced from current levels while any of the Series 2012 Bonds are Outstanding unless there is obtained from a Qualified Accountant a certificate to the effect that Net Parking Revenues in the then current and immediately succeeding fiscal years, with the reduced fees, leases, rents, fines or charges, will be at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding fiscal years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. The City has further covenanted that the fees, leases, rents, fines and charges generating the Parking Revenues shall, if and when necessary, from time to time, be increased in such a manner as will produce Net Parking Revenues in the then current and immediately succeeding fiscal years at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding fiscal years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. The Series 2012 Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution and Arkansas Code Annotated (1998 Repl. & 2011 Supp.) §§14-164-401 et seq. 2 4811-9672-3474.1 (the "Act"), and pursuant to Ordinance No. 5457 of the City adopted on November 15, 2012. The Series 2012 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation and the Series 2012 Bonds shall never constitute an obligation or charge against the general credit or taxing powers of the City. The holder of this Series 2012 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 2012 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 2012 Bonds will be subject to redemption prior to maturity as follows: (a) The Series 2012 Bonds are subject to redemption prior to maturity, at the option of the City, on and after June 1, 2018, in whole or in part at any time and in any order of maturity directed by the City, from funds from any source, at a redemption price equal to one hundred percent (100%) of the principal amount of the Series 2012 Bonds being redeemed, plus accrued interest to the date of redemption. (b) The Series 2012 Bonds shall be redeemed prior to maturity, in whole or in part, on any interest payment date, in inverse order of maturity, at a redemption price equal to one hundred percent (100%) of the principal amount of the Series 2012 Bonds being redeemed, plus accrued interest to the date of redemption, from unexpended proceeds of the Series 2012 Bonds (if such unexpended proceeds equal or exceed $100,000) not needed for paying costs of the Project Costs. (c) The Series 2012 Bonds maturing on June 1, 2032, are subject to mandatory sinking fund redemption prior to maturity in part, on June 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 2028 $275,000 2029 $280,000 2030 $290,000 2031 $300,000 2032 (maturity) $310,000 (d) The Series 2012 Bonds maturing on June 1, 2037, are subject to mandatory sinking fund redemption prior to maturity in part, on June 1 in the years and 3 4811-9672-3474.1 amounts set forth below at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption, without premium; and Year 2033 2034 2035 2036 2037 (maturity) Principal Amount $320,000 $330,000 $345,000 $355,000 $370,000 At its option, to be exercised on or before the 451h day next preceding any mandatory sinking fund redemption date for any Series 2012 Bonds, the City may deliver to the Trustee for cancellation Series 2012 Bonds of the appropriate maturity, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2012 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 2012 Bonds so to be redeemed shall be accordingly reduced. This Series 2012 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 2012 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 2012 Bonds may be exchanged for a like aggregate principal amount of Series 2012 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 2012 Bonds or for any claim based thereon or upon any obligation, covenant or agreement contained in the Series 2012 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 2012 Bonds. The Series 2012 Bonds have been designated by the City as "qualified tax-exempt obligations" within the meaning of Section 265(b) of the Internal Revenue Code of 1986, as amended. This Series 2012 Bond is issued with the intent that the laws of the State of Arkansas will govern its construction. 4 4811-9672-3474.1 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 2012 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 2012 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 2012 Bonds as the same become due and payable will be sufficient in amount for that purpose. This Series 2012 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. IN WITNESS WHEREOF, the City of Fayetteville, Arkansas has caused this Series 2012 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: I: CITY OF FAYETTEVILLE, ARKANSAS FAYETTEVILLE: 7-0 y ,' � (Form of Trustee's Certificate) •-� • �'kANSP• J�'� 1 GTOS USTEE'S CERTIFICATE OF AUTHENTICATION 1,411111111W >� This bond is one of the Series 2012 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 2012 Bonds. SIMMONS FIRST TRUST COMPANY, N.A., as Trustee By• u ized Signature 4811-9672-3474.1 (Form of Assignment) ASSIGNMENT FOR VALUE RECEIVED, , hereby sells, assigns, and transfers unto , the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints as attorney to transfer the within Bond on the books kept for registration thereof with full power of substitution in the premises. DATE: 20 Transferor GUARANTEED BY: NOTICE: Signature(s) must be guaranteed by an institution satisfactory to the Trustee or other transfer agent 4811-9672-3474.1 PRELIMINARY OFFICIAL STATEMENT DATED DECEMBER 5, 2012 NEW ISSUE NOT RATED BOOK -ENTRY ONLY In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the accuracy of certain representations and continuing compliance with certain covenants, interest on the Series 2012 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. Bond Counsel is also of the opinion that the Series 2012 Bonds are "qualified tax-exempt obligations" under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Under existing law, Bond Counsel is of the opinion that the Series 2012 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. $6,220,000* CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BONDS SERIES 2012 Dated: December 1, 2012 Due: June 1, as shown on inside front cover The Parking Revenue Improvement Bonds, Series 2012 (the "Series 2012 Bonds"), are being issued by the City of Fayetteville, Arkansas (the "City") for the purpose of (i) financing all or a portion of the costs of acquiring, constructing and equipping parking deck facilities and related roadway and other improvements within the City's Entertainment District (the "Project"), (ii) funding a deposit to the debt service reserve fund, and (iii) paying certain expenses in connection with the issuance of the Series 2012 Bonds. See the captions "ESTIMATED SOURCES AND USES OF FUNDS" and "THE PROJECT" herein. The Series 2012 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 2012 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2012 Bonds. Individual purchases of the Series 2012 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers (`Beneficial Owners") of Series 2012 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. The Series 2012 Bonds shall bear interest from their dated date, payable on June 1 and December 1 of each year, commencing June 1, 2013. All such interest payments shall be payable to the persons in whose name such Series 2012 Bonds are registered on the bond registration books maintained by Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"), as of the fifteenth day of the calendar month preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2012 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 2012 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 December 1, 2012 (the "Indenture"), between the City and the Trustee, the payment of the principal of, premium, if any, and interest on the Series 2012 Bonds is secured by a pledge of the net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues charged and collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated by the Project and net revenues with respect to City management of parking facilities owned by third parties (the "Net Parking Revenues"). See the caption "SECURITY FOR THE SERIES 2012 BONDS" herein. The Series 2012 Bonds are subject to optional and mandatory redemption prior to maturity as more fully described herein under the caption "THE SERIES 2012 BONDS - Redemption." The Series 2012 Bonds are special obligations of the City secured solely by and payable from Net Parking Revenues. The Series 2012 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 2012 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 2012 Bonds, except as described herein with respect to the Net Parking Revenues. The Series 2012 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 2012 Bonds will be available for delivery in New York, New York, on or about December 19, 2012. Stephens Inc. ffivemmit ftkm The date of this Official Statement is December —, 2012. Preliminary; subject to change. MATURITY SCHEDULE* Maturity Principal Interest Maturity Principal June 1 Amount Rate Yield June 1 Amount 2013 $ 60,000 % % 2021 $230,000 2014 120,000 2022 235,000 2015 125,000 2023 240,000 2016 150,000 2024 245,000 2017 210,000 2025 250,000 2018 215,000 2026 260,000 2019 220,000 2027 265,000 2020 225,000 $1,460,000 _% Term Bonds due June 1, 2032 — Yield: % $1,710,000 _% Term Bonds due June 1, 2037 — Yield: % (Plus accrued interest) CITY OF FAYETTEVILLE, ARKANSAS Issuer City Council Lioneld Jordan, Mayor Rhonda Adams Brenda Boudreaux Bobby Ferrell Adella Gray Mark Kinion Sarah Lewis Matthew Petty Justin Tennant Paul Becker, Finance Director Sondra Smith, City Clerk Kit Williams, City Attorney 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 Interest Rate Yield 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 any 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 2012 Bonds in any jurisdiction in which such offer is not authorized, or in which the person making such offer, solicitation or sale is not qualified to do so, or to any person to whom it is unlawful to make such offer, solicitation or sale. The information and expressions of opinion contained herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. THE SERIES 2012 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE TRUST INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON CERTAIN EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION CONTAINED IN SUCH LAWS. CERTAIN INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED FROM THE CITY, THE DEPOSITORY TRUST COMPANY AND OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE. THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND -AS PART OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITER DOES NOT GUARANTY THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2012 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.......................................................................................................................................... 1 TheSeries 2012 Bonds.......................................................................................................................................... 2 Securityfor the Series 2012 Bonds....................................................................................................................... 4 Book -Entry Only System...................................................................................................................................... 6 TheProject............................................................................................................................................................ 7 Estimated Sources and Uses of Funds................................................................................................................... 8 Estimated Debt Service Requirements.................................................................................................................. 8 EstimatedDebt Service Coverage......................................................................................................................... 9 TheCity................................................................................................................................................................. 9 Definitionsof Certain Terms.................................................................................................................................12 Summaryof the Indenture.....................................................................................................................................16 Summary of the Continuing Disclosure Agreement .:............................................................................................20 Underwriting.........................................................................................................................................................23 TaxMatters...........................................................................................................................................................23 LegalMatters........................................................................................................................................................24 Miscellaneous........................................................................................................................................................25 Accuracy and Completeness of Official Statement...............................................................................................25 APPENDIX A - Form of Bond Counsel Opinion.................................................................................................A-1 [THIS PAGE LEFT BLANK INTENTIONALLY] OFFICIAL STATEMENT $6,220,000* CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BONDS SERIES 2012 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 Appendix hereto, is furnished in connection with the offering by the City of Fayetteville, Arkansas (the "City") of its Parking Revenue Improvement Bonds, Series 2012, in the principal amount of $6,220,000* (the "Series 2012 Bonds"). The City is a city of the first class organized and existing under the laws of the State of Arkansas (the "State"). The City is authorized under Amendment 65 to the Constitution of the State ("Amendment 65") and Arkansas Code Annotated (1998 Repl. & 2011 Supp.) §§14-164-401 et seq. (as from time to time amended, the "Act"), to issue and sell bonds for the purpose of financing "capital improvements," as defined in the Act. The Series 2012 Bonds are to be issued by the City pursuant to Amendment 65, the Act and Ordinance No. 5457, adopted and approved on November 15, 2011 (the "Authorizing Ordinance"), for the purpose of (i) financing all or a portion of the costs of acquiring, constructing and equipping parking deck facilities and related roadway and other improvements within the City's Entertainment District (the "Project"), (ii) funding a deposit to the debt service reserve fund, and-(iii)-paying certain expenses -in -connection with -the issuance of the Series-2012-Bonds.--See the - captions "ESTIMATED SOURCES AND USES OF FUNDS" and "THE PROJECT" herein. The Series 2012 Bonds are not general obligations of the City, but are special obligations secured solely by and payable from net revenues (after provision for Operation and Maintenance Expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities owned by third parties (the "Net Parking Revenues"). See the caption "SECURITY FOR THE SERIES 2012 BONDS" herein. The faith and credit of the City are not pledged to the payment of the Series 2012 Bonds, and the Series 2012 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 2012 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 2012 Bonds, except as described herein with respect to the Net Parking Revenues. Additional bonds may be issued by the City on a parity of security with the Series 2012 Bonds under certain circumstances set forth in the Indenture (hereinafter defined). See the caption "THE SERIES 2012 BONDS — Additional Bonds" herein. The Series 2012 Bonds and any Additional Bonds are herein collectively referred to as the "Bonds." Pursuant to the provisions of a Continuing Disclosure Agreement dated as of the date of delivery of the Series 2012 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 Net Parking Revenues 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 2012 Bonds, the Net Parking Revenues, the Continuing Disclosure Agreement, and the Trust Indenture dated as of December 1, 2012 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"), pursuant to which the Series 2012 Bonds are issued and secured. Such ' Preliminary, subject to change. 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 2012 Bonds are qualified in their entirety by reference to the definitive forms thereof and the information with respect thereto included in the Indenture. Copies of the Continuing Disclosure Agreement, the Indenture, and the form of Series 2012 Bond included therein, are available from the City by writing to the attention of the Finance Director, 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. Certain financial and operating 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 2012 BONDS Description. The Series 2012 Bonds will be initially dated as of December 1, 2012, and will bear interest payable semiannually on June 1 and December 1 of each year, commencing June 1, 2013, at the rates set forth on the inside cover page hereof. The Series 2012 Bonds will mature on June 1 in the years and in the principal amounts set forth on the inside cover page hereof. The Series 2012 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 2012 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2012 Bonds. Individual purchases of the Series 2012 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers (`Beneficial Owners") of Series 2012 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. All interest payments on the Series 2012 Bonds shall be payable to the persons in whose name such Series 2012 Bonds are registered on the bond registration books maintained by the Trustee, as of the fifteenth day of the calendar month preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2012 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 2012 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 2012 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. The Series 2012 Bonds are subject to redemption prior to maturity as follows: (i) The Series 2012 Bonds are subject to redemption prior to maturity, at the option of the City, on and after June 1, 2018, in whole or in part at any time and in any order of maturity directed by the City, from funds from any source, at a redemption price equal to 100% of the principal amount of the Series 2012 Bonds being redeemed, plus accrued interest to the date of redemption; (ii) The Series 2012 Bonds shall be redeemed prior to maturity, in whole or in part, on any interest payment date, in inverse order of maturity, at a redemption price equal to 100% of the principal amount of the Series 2012 Bonds being redeemed, plus accrued interest to the date of redemption, from unexpended proceeds of the Series 2012 Bonds (if such unexpended proceeds equal or exceed $100,000) in the Project Fund not needed for paying Project Costs; and (iii) The Series 2012 Bonds maturing on June 1, 2032, are subject to mandatory sinking fund redemption prior to maturity in part, on June 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* *Preliminary, subject to change. 2028 $275,000 2029 $285,000 2030 $290,000 2031 $300,000 2032 (maturity) $310,000 2 At its option, to be exercised on or before the 45d' day next preceding any mandatory sinking fund redemption date for any Series 2012 Bonds maturing June 1, 2032 (the "2032 Term Bonds"), the City may deliver to the Trustee for cancellation 2032 Term Bonds, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such 2032 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 2032 Term Bonds in chronological order, and the principal amount of such 2032 Term Bonds so to be redeemed shall be accordingly reduced. (iv) The Series 2012 Bonds maturing on June 1, 2037, are subject to mandatory sinking fund redemption prior to maturity in part, on June 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* 2033 $320,000 2034 $330,000 2035 $340,000 2036 $355,000 2037 (maturity) $365,000 *Preliminary, subject to change. At its option, to be exercised on or before the 45 h day next preceding any mandatory sinking fund redemption date for any Series 2012 Bonds maturing June 1, 2037 (the "2037 Term Bonds"), the City may deliver to the Trustee for cancellation 2037 Term Bonds, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such 2037 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 2037 Term Bonds in chronological order, and the principal amount of such 2037 Term Bonds so to be redeemed shall be accordingly reduced. Partial Redemption of a Series 2012 Bond. If less than all of the Series 2012 Bonds of a maturity are called for redemption, the particular Series 2012 Bonds or portions of Series 2012 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 2012 Bonds, the procedures established by DTC shall control with respect to the selection of the particular Series 2012 Bonds to be redeemed. Notice of Redemption. Notice of the call for any redemption, identifying the Series 2012 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 2012 Bonds, by any other means acceptable to DTC, including facsimile) to the registered owner of each such Series 2012 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 2012 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 or equipping of parking related "capital improvements" (as defined in the Act), (ii) refunding the Series 2012 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 2012 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. 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 (I) in the case of Additional Bonds to finance Project Costs, a statement by a Qualified Accountant reciting the opinion, based upon necessary investigation, that Net Parking Revenues for the Fiscal Year immediately preceding the Fiscal Year in which such Additional Bonds are to be issued were not less than (i) 125% of the maximum Annual Debt Service on all then outstanding Bonds and Subordinate Obligations 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, and (II) in the case of Additional Bonds to refund the Series 2012 Bonds or any series of Additional Bonds, a Certificate of the Mayor stating that, after taking into account the issuance of the Additional Bonds and the application of the proceeds thereof and other available funds to the refunding, the average Annual Debt Service on all outstanding Bonds and Subordinate Obligations will not be increased. If any changes have been made, and are in effect on the date of issuance of the Additional Bonds, in any parking fees, leases, rents, fines or charges imposed by the City which were not in effect during the entire preceding Fiscal Year, the Qualified Accountant may, if such changes resulted in increases in such fees, leases, rents, charges and fines, and shall, if such changes resulted in reductions in such fees, leases, rents, fines or charges, adjust the Parking Revenues for the preceding Fiscal Year to reflect any changes in such Parking Revenues which would have occurred if the changed fees, leases, rents, fines and charges had been in effect during the entire preceding Fiscal Year. Notwithstanding any of the foregoing, no Additional Bonds shall be issued unless there is no default existing at the time of issuance under the Indenture. Subordinate Obligations. Nothing in the Indenture shall prevent the City from authorizing and issuing bonds, notes, bond anticipation notes, warrants, certificates or other obligations or evidences of indebtedness, the payment of the principal of and premium, if any, and interest on which shall be made from Parking Revenues or from a special fund to be established and maintained from Parking Revenues, provided payments from Parking Revenues or from Parking Revenues into such special fund, and the lien and charge on such Parking Revenues, shall be made junior and subordinate to the lien, pledge and charge created in the Indenture for the security and payment of the Series 2012 Bonds and other payments under the Indenture. Notwithstanding anything herein to the contrary, no Subordinate Obligations shall be issued unless there is no default at the time of issuance under the Indenture. Transfer or Exchange. The Series 2012 Bonds may be transferred on the books of registration kept by the Trustee by the registered owner in person or by the owner's duly authorized attorney, upon surrender thereof, together with a written instrument of transfer duly executed by the registered owner or the owner's duly authorized attorney. Upon surrender for transfer of any Series 2012 Bond at the principal corporate office of the Trustee, the City shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Series 2012 Bond or Bonds in the same aggregate principal amount and of any authorized denomination or denominations. Transfers of registration or exchanges of Series 2012 Bonds shall be without charge to the Holders of such Series 2012 Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Holder of the Series 2012 Bond requesting such transfer or exchange as a condition precedent to the exercise of such privilege. The Trustee shall not be required to transfer or exchange any Series 2012 Bond during the period from and including a Record Date to the next succeeding interest payment date of such Series 2012 Bond nor to transfer or exchange any Series 2012 Bond after the mailing of notice calling such Series 2012 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 2012 Bonds, transfers of beneficial interests in the Series 2012 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 SERIES 2012 BONDS General. The Series 2012 Bonds are special obligations of the City secured solely by and payable from the Net Parking Revenues. In the Indenture, "Net Parking Revenues" are defined as Parking Revenues less Operation and Maintenance Expenses. "Parking Revenues" are all revenues attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities owned by third parties. "Operation and Maintenance Expenses" means all reasonable and necessary costs and expenses incurred in the operation, maintenance, repair and insuring of the City's parking meters, lots and other parking facilities which are properly accounted for such purposes under generally accepted accounting principles, including debt service on debt incurred to acquire parking equipment prior to the date of the Indenture. Such term does not include Debt Service on the Bonds or Subordinate Obligations or depreciation expense. 4 The fees, rents, fines and charges from which the Net Parking Revenues are derived have been imposed by the City pursuant to various ordinances adopted by the City Council. The Net Parking Revenues have been pledged to secure the payment of Debt Service on the Series 2012 Bonds pursuant to Ordinance No. 5457, duly adopted by the City Council of the City on November 15, 2011 (the "Authorizing Ordinance"). Set forth below is a table showing the City's Parking Revenues, Operation and Maintenance Expenses and Net Parking Revenues over the last six years. Year Parking Revenues(2) O&M Expenses Net Parking Revenues 2007 $ 466,565 $ 363,794 $ 102,771 2008 431,019 377,501 53,518 2009 405,896 389,856 16,040 2010 766,659 525,841 240,818 2011 1,347,857 766,935 580,922 2012 (') 1,277,135 613,652 663,483 (1) Through October 31, 2012. (2) Includes net revenues received by the City for management of parking areas owned by third parties; $6,616 in 2007, $12,914 in 2008, $15,032 in 2009, $14,521 in 2010, $20,303 in 2011 and $28,874 in 2012 to date. In 2010, a new parking program was implemented within the City's entertainment district. Various provisions of this program, including the capture of fees for on -street parking and enhanced parking rates and fines for violations, have resulted in increased annual collections of Parking Revenues as shown in the table above. The Series 2012 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 2012 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 2012 Bonds, except as described herein with respect to the Net Parking Revenues. The City has covenanted that the fees, leases, rents, fines and charges generating the Parking Revenues will not be reduced from current levels while any of the Series 2012 Bonds are Outstanding unless there is obtained from a Qualified Accountant a certificate to the effect that Net Parking Revenues in the then current and immediately succeeding Fiscal Years, with the reduced fees, leases, rents, fines or charges, will be at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding Fiscal Years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. The City has further covenanted that the fees, leases, rents, fines and charges generating the Parking Revenues shall, if and when necessary, from time to time, be increased in such a manner as will produce Net Parking Revenues in the then current and immediately succeeding Fiscal Years at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding Fiscal Years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. Debt Service Reserve. From the proceeds of sale of the Series 2012 Bonds, there shall be deposited into the Debt Service Reserve Fund an amount sufficient to cause the amount on deposit therein to be equal to the least of (i) the maximum Annual Debt Service with respect to the Series 2012 Bonds, (ii) 125% of the average Annual Debt Service with respect to the Series 2012 Bonds, or (iii) 10% of the stated original principal amount of the Series 2012 Bonds (the "Reserve Requirement"). Amounts on deposit in the Debt Service Reserve Fund shall be used solely to pay the principal of and interest on the Series 2012 Bonds as due for which there are no available funds in the Bond Fund to make such payments. The Reserve Requirement may be satisfied by cash or by Investment Securities. If the amount in the Debt Service Reserve Fund is ever reduced below the Reserve Requirement, it shall be reimbursed to an amount equal to the Reserve Requirement through monthly payments, beginning not later than the last day of the month in which the Debt Service Reserve Fund was reduced below the Reserve Requirement, and continuing not later than the last day of each month thereafter until such reimbursement shall have been accomplished, from any funds in the Revenue Fund (after making the required deposits into the Bond Fund, as provided in the Indenture). If a surplus shall exist in the Debt Service Reserve Fund over and above the Reserve Requirement, such surplus shall be deposited into the Bond Fund. BOOK -ENTRY ONLY SYSTEM The Series 2012 Bonds will be issued only as one fully registered Series 2012 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 2012 Bonds. The fully registered Series 2012 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 2012 Bonds. Owners of any book entry interests in the Series 2012 Bonds (the "book entry interest owners") described below, will not receive or have the right to receive physical delivery of the Series 2012 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 2012 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 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book - entry transfers and pledges among Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, the National Securities Clearing Corporation and the Fixed Income Clearing Corporation, all of which are registered agencies. DTTC 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 2012 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2012 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2012 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 2012 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 2012 Bonds, except in the event that use of the Book -Entry System for the Series 2012 Bonds is discontinued. To facilitate subsequent transfers, all Series 2012 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 2012 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 2012 Bonds, DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2012 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 2012 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 2012 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 2012 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 2012 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 2012 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 2012 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 2012 Bonds made to DTC or its nominee as the registered owner of the Series 2012 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 2012 Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, bond certificates are required to be printed and delivered. In addition, the City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered. THE PROJECT A portion of the proceeds of the Series 2012 Bonds will be used to accomplish the acquisition, construction and equipping of multi -level parking deck facilities and related roadway and other improvements (the "Project"). The Project improvements will be located within the City's Entertainment District Parking Zone and will have an estimated capacity of approximately 250 vehicle spaces. ESTIMATED SOURCES AND USES OF FUNDS The proceeds of the Series 2012 Bonds are expected to be used as follows: Sources of Funds(t) Par Amount of Series 2012 Bonds $6,220,000 Net Original Issue Discount Total Sources: $ Uses of Funds(l) Deposit to Project Fund $5,868,000 Deposit to Debt Service Reserve 191,269 Costs of Issuance and Underwriter's Discount 148,850 Contingency Total Uses: $ Preliminary; subject to change. ESTIMATED DEBT SERVICE REQUIREMENTS As of the date of closing, the Series 2012 Bonds will constitute the only debt obligations secured by the Net Parking Revenues. The following table sets forth estimates of the amounts required to pay scheduled principal of and interest on the Series 2012 Bonds during each year: Total Debt Year Principal(') Interest(2) Service 2013 $ 60,000 $ 176,225 $ 236,225 2014 120,000 175,025 295,025 2015 125,000 172,875 297,875 2016 150,000 170,125 320,125 2017 210,000 166,525. 376,525 2018 215,000 162,275 377,275 2019 220,000 157,925 377,925 2020 225,000 153,475 378,475 2021 230,000 148,638 378,638 2022 235,000 143,230 378,230 2023 240,000 137,260 377,260 2024 245,000 130,802 375,802 2025 250,000 124,058 374,058 2026 260,000 116,980 376,980 2027 265,000 109,564 374,564 2028 275,000 101,662 376,662 2029 285,000 93,263 378,263 2030 290,000 84,638 374,637 2031 300,000 75,788 375,788 2032 310,000 66,637 376,637 2033 320,000 56,188 376,188 2034 330,000 44,406 374,406 2035 340,000 32,262 372,262 2036 355,000 19,666 371,615 2037 365,000 6,614 374,666 Totals: $6.220,000 $2.826106 $9.046. 006 Includes mandatory sinking fund redemptions. �- (2) Preliminary; subject to change. Assuming for purposes of this Preliminary Official State, an average coupon rate on the Series 2012 Bonds of 3.122% per annum. ESTIMATED DEBT SERVICE COVERAGE The following table shows estimated maximum annual debt service coverage with respect to the Series 2012 Bonds utilizing the most recent twelve months of Net Parking Revenues. Historical Net Parking Revenues(t) $687,839 Maximum Annual Debt Service Requirement on Series 2012 Bonds(2) $378,638 Maximum Annual Debt Service Coverage 1.82 X (t) Net Parking Revenues for the twelve-month period from November 1, 2011 to October 31, 2012. (2) Preliminary; subject to change. See the caption "ESTIMATED DEBT SERVICE REQUIREMENTS" herein. THE COVERAGE NUMBERS SET FORTH ABOVE ARE BASED ON HISTORICAL NET PARKING REVENUES. ACTUAL RECEIPTS OF PARKING REVENUES AND THE LEVEL OF OPERATION AND MAINTENANCE EXPENSES WILL DEPEND ON NUMEROUS FACTORS, AND THERE CAN BE NO ASSURANCE THAT FUTURE NET PARKING REVENUES AVAILABLE TO PAY DEBT SERVICE ON THE SERIES 2012 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 540, U.S. Highways 62 and 71, and State Highways 16, 45, 112, 156, 180 and 265. The Burlington Northern Railroad has several lines running through the City, and a general aviation airport with a 6,006-foot runway is available for limited commuter travel. The Northwest Arkansas Regional Airport is located approximately 40 minutes from downtown Fayetteville and provides daily flights to numerous venues. Government. The City currently operates under the Mayor -Council form of government pursuant to which a mayor, city attorney, city clerk and eight aldermen are elected, two from each of the City's four wards. The mayor, city attorney and city clerk are full-time positions elected to four year terms. Aldermen also serve four year terms. The City's elected officials and the dates on which their respective terms expire are as follows: Name Office Term Expires Lioneld Jordan Mayor 12/31/16 Kit Williams City Attorney 12/31/14 Sondra Smith City Clerk 12/31/12 Rhonda Adams Alderman 12/31/14 Brenda Boudreaux Alderman 12/31/12 Bobby Ferrell Alderman 12/31/12 Adella Gray Alderman 12/31/14 Mark Kinion Alderman 12/31/14 Sarah Lewis Alderman 12/31/12 Matthew Petty Alderman 12/31/12 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: 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 Economic Data. Per capita personal income figures for the MSA and the State of Arkansas are as follows: State of Year MSA Arkansas 2000 $22,828 $22,577 2001 24,061 23,870 2002 24,658 24,273 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 n/a 33,740 Source: Discover Arkansas, Data Analysis. Retail sales figures for the MSA and the State are as follows: State of Year MSA Arkansas 2000 $3,526,791,000 $28,488,033,000 2001 3,806,422,000 29,652,693,000 2002 3,841,326,000 29,269,775,000 2003 3,968,812,000 29,920,716,000 2004 4,610,051,000 31,463,983,000 2005 5,287,158,000 34,290,412,000 2006 7,251,810,000 38,843,312,000 2007 8,250,140,000 43,504,752,000 2008 8,291,415,000 43,820,789,000 2009... 5,527,678,000 35,498,326,000 2010(') 6,133,564,000 35,247,629,000 2011(') 7,236,224,000 42,160,822,000 (1) Does not include McDonald County, Missouri. Source: Demographics USA for years through 2008; Neilson Consumer Buying Power for 2009-2011. 10 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 2000 $432,951,171 $145,147,891 $578,099,062 2001 486,853,822 155,794,579 642,648,401 2002 530,235,135 158,778,031 689,013,166 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 Source: Washington County Tax Assessor's Office. The assessed value represents 20% of the appraised value of property. Building permits issued by the City(t) are shown below for the years indicated: 2007 2008 2009 2010 2011 Residential Building Permits Commercial Building Permits Value of All Building Permits 593 414 281 256 273 59 57 14 16 19 $227,667,201 $127,477,937 $70,365,173 $ 79,103,682 $ 81,146,187 (1) Does not include building activity of the University of Arkansas, school permits and additions/alterations to existing structures. 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 2000 2.9% 4.2% 2001 3.0 4.7 2002 3.3 5.3 2003 3.7 5.8 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* 4.9 6.5 * September, 2012 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 2012 of approximately 24,500. On the Fayetteville campus, the University employs approximately 5,000 faculty, administrative, secretarial, clerical and maintenance personnel in both full-time and part-time positions, making the University the largest employer in the City. 11 Other major employers in the City, their products or services and approximate number of employees are set forth below: Employer Washington Regional Med Center Washington Co. Government Fayetteville School District Veteran's Admin. Medical Superior Industries Wal-Mart #9149 (optical lab) City of Fayetteville Tyson Mexican Original Wal-Mart #144 Source: 2011 City of Fayetteville CAFR Product or Service Employees Hospital 1,700 Government 1,525 Education 1,290 Hospital 1,200 Transportation equipment 880 Optical 760 Government 713 Food 602 Retail 507 DEFINITIONS OF CERTAIN TERMS The following are definitions of certain terms used in this Official Statement: "Act" means the Local Government Capital Improvement Revenue Bond Act of 1985, codified as Arkansas Code Annotated (1998 Repl. & Supp. 2011) Sections 14-164-401 et seq., as from time to time amended. "Additional Bonds" means Bonds in addition to the Series 2012 Bonds which are issued under the provisions of Section 213 of the Indenture. "Amendment 65" means Amendment No. 65 to the Constitution of Arkansas, approved by the voters of the State on November 4, 1986. "Annual Debt Service" means, with respect to all or any particular amount of Bonds or Subordinate Obligations, as the case may be, the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the amount of such payment which is provided from the proceeds of the sale of the Bonds or Subordinate Revenues or from sources other than Net Parking Revenues. "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. 5457 adopted by the City Council on November 15, 2011, which authorized the issuance of the Series 2012 Bonds pursuant to the Indenture. "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" means the Series 2012 Bonds and all Additional Bonds issued by the City pursuant to the Indenture. "Book -Entry System" means the book -entry system maintained by the Securities Depository and described in the Indenture. "Business Day" means any day other than (a) a Saturday or Sunday, (b) a day on which commercial banks in New York, New York, or the city in which the corporate trust office of the Trustee is located are authorized by law or executive order to close, or (c) a day on which the New York Stock Exchange or the Securities Depository - are closed. 12 "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. "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. "Continuing Disclosure Agreement" means the Continuing Disclosure Agreement between the City and Simmons First Trust Company, N.A., as dissemination agent, dated the date of issuance and delivery of the Series 2012 Bonds, as originally executed and as amended from time to time in accordance with the terms thereof. "Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Series 2012 Bonds, including, but not limited to, underwriting discounts, fees and expenses, publication expenses, expenses of printing, reproducing, filing and recording documents, initial fees and charges of the Trustee and any Paying Agent, fees and expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement for the Series 2012 Bonds, costs of execution, transportation and safekeeping of the Series 2012 Bonds, and other costs, charges and fees incurred in connection with the foregoing. "Costs of Issuance Fund" means the fund by that name created and established in the Indenture. "Debt Service" means, with respect to all or any particular amount of Bonds or Subordinate Obligations, as the case may be, the total as of any particular date of computation and for any particular period of the scheduled amount of interest and amortization of principal payable on such Bonds or Subordinate Obligations, excluding amounts scheduled during such period which relate to principal which has been retired before the beginning of such period. "Debt Service Reserve Fund" means the fund by that name created and established in the Indenture. "Depository" means a national or state banking corporation or association (which may include the Trustee and any Paying Agent) which holds membership in the Federal Deposit Insurance Corporation. "Event of Default" means any event of default specified in Section 901 of the Indenture. "Fiscal Year" means the 12-month period used, at any time, by the City for accounting purposes, which may be the calendar year. "Fund" means a fund established by the Indenture. "Government Securities" means direct obligations of, or obligations fully guaranteed as to principal and interest by, the United States of America or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the United States of America (including obligations issued or held in book -entry form on the books of the U.S. Department of Treasury). "Holder" or "Bondholder" or "owner of the Bonds" means the registered owner of any Bond. "Indenture" means the Trust Indenture dated as of December 1, 2012, between the City and the Trustee, pursuant to which the Bonds are issued, and any amendments and supplements thereto. "Investment Securities" means, if and to the extent the same are at the time legal for investment of funds held under the Indenture: (a) Cash (insured at all times by the Federal Deposit Insurance Corporation); (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, including: (1) U.S. Export -Import Bank (Eximbank); 13 (2) Rural Economic Community Development Administration; {� (3) U.S. Maritime Administration; (4) Small Business Administration; (5) U.S. Department of Housing & Urban Development (PHAs); (6) Federal Housing Administration (FHA); and (7) Federal Financing Bank; (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: (1) Senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC); (2) Obligations of the Resolution Funding Corporation (REFCORP); and (3) Senior debt obligations of the Federal Home Loan Bank System; (e) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by the FDIC; (f) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "P-1" by Moody's and "A-1" or "A-1+" by S&P and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (g) Commercial paper which is rated at the time of purchase in the single highest classification, "P-1" by Moody's and "A-1+" by S&P and which matures not more than 270 calendar days after the date of purchase; (h) Investments in money market funds rated "AAAm" or "AAAm-G" or better by S&P; (i) 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 (1) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Moody's or S&P or any successors thereto; or (2) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or Government Securities, 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; and 0) Municipal Obligations rated "Aaa/AAA" or general obligations of States with a rating of "AVA" or higher by both Moody's and S&P. "Mayor" means the person holding the office and performing the duties of the Mayor of the City. "Moody's" means Moody's Investors Service, Inc., and any successor thereto. "Net Parking Revenues" means Parking Revenues less Operation and Maintenance Expenses. 14 "Operation and Maintenance Expenses" means all reasonable and necessary costs and expenses incurred in the operation, maintenance, repair and insuring of the City's parking meters, lots and other parking facilities which are properly accounted for such purposes under generally accepted accounting principles, including debt service on debt incurred to acquire parking equipment prior to the date of the Indenture. Such term does not include Debt Service on the Bonds and Subordinate Obligations or depreciation expense. "Original Purchaser" means the first purchaser(s) of a series of Bonds from the City. "Outstanding" means, when used with reference to the Bonds, as of any particular date, the aggregate of all Bonds authenticated and 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 VIII 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. "Parking Revenues" means all revenues attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities owned by third parties. "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. "Paying Agent" means any bank or trust company named by the City as the place at which the principal of and premium, if any, and interest on the Bonds are payable. "Person" means any natural person, firm, association, corporation, limited liability company, partnership, joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Project" means the betterments and improvements to be financed with the proceeds of the Series 2012 Bonds. "Project Costs" means, to the extent permitted by the Act or other applicable laws, with respect to the 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) 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 the Project and placing the same in operation; (b) all costs relating to injury and damage claims arising out of the acquisition, construction or equipping of the Project; (c) all other costs incurred in connection with, and properly allocable to, the acquisition, construction and equipping of the Project; and (d) amounts to pay or reimburse the City or any City fund for expenses of the City incident and properly allocable to such planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation of the Project. "Project Fund" means the fund by that name created and established in the Indenture. "Qualified Accountant" means an independent certified public accountant or firm of independent certified public accountants not in the regular employ of the City. "Rebate Fund" means the fund by that name created and established in the Indenture. 15 "Record Date" means, with respect to any interest payment date on the Bonds, the fifteenth day of the calendar month next preceding the month in which such interest payment date occurs. "Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized Representative in the form of Exhibit B to the Indenture. "Reserve Requirement" means, with respect to each series of Bonds, an amount equal to the least of (i) the maximum Annual Debt Service with respect to such series of Bonds, (ii) (ii) 125% of the average Annual Debt Service with respect to such series of Bonds, or (iii) 10% of the stated original principal amount of such series of Bonds. For all purposes of the Indenture, the Reserve Requirement may be satisfied by cash or by Investment Securities. "Revenue Fund" means the fund by that name created and established in the Indenture. "S&P" means Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc., and any successor thereto. "Securities Depository" means The Depository Trust Company, New York, New York, or its nominee, and its successors and assigns, or any other depository institution appointed by the City or the Trustee to act as depository for the Bonds in connection with the Book -Entry System. "Series 2012 Bonds" means the City's Parking Revenue Improvement Bonds, Series 2012, issued under and secured by the Indenture in the original aggregate principal amount of $6,220,000* for the purpose of financing the Project. "State" means the State of Arkansas. "Subordinate Obligations" means debt obligations of the City secured by°a pledge of the Net Parking Revenues that is subordinate to the lien thereon securing the payment of the Bonds, as permitted by the provisions of Section 215 of the Indenture. "Supplemental Indenture" means any indenture supplemental to or amendatory of the Indenture. "Tax Regulatory Agreement" means that Tax Regulatory Agreement of the City relating to maintenance of the excludability of interest on the Series 2012 Bonds from gross income for federal income tax purposes, delivered in connection with the issuance of the Series 2012 Bonds. "Trustee" means the banking corporation or association designated as Trustee in the Indenture, and its successor or successors as such Trustee. The original Trustee is Simmons First Trust Company, N.A., Pie Bluff, Arkansas. "Trust Estate" means the property described in the granting clauses of the Indenture. * Preliminary; subject to change. SUMMARY OF THE INDENTURE The following statements are brief summaries of certain provisions of the Indenture. The statements do not purport to be complete, and reference is made to the Indenture, copies of which are available for examination at the offices of the Finance Director of the City, for a full statement thereof. Funds and Accounts. Net Parking Revenues are pledged by the Indenture to the payment of the principal of and interest on the Series 2012 Bonds. The following Funds have been created and established in connection with the Series 2012 Bonds: Funds Revenue Fund Bond Fund Debt Service Reserve Fund Project Fund Cost of Issuance Fund Rebate Fund 16 The Revenue Fund shall be maintained by the City with the Depository of its choice. All other Funds shall be held by the Trustee, which shall hold and maintain said Funds in trust, for the use and benefit of the Bondholders and the City, but subject to the permitted applications contained in the Indenture. Application of Parking Revenues. The application of Parking Revenues is as follows: (a) Revenue Fund. All Parking Revenues shall, as and when received, be deposited into the Revenue Fund. So long as there is no Event of Default or the occurrence or continuance of an event which with notice or lapse of time or both would constitute an Event of Default, the City may utilize moneys in the Revenue Fund for the payment of Operation and Maintenance Expenses, and may utilize any surplus in the Revenue Fund (after the payment of Operation and Maintenance Expenses and after making the transfers required by subsections (b) through (d) below) for any valid governmental purpose under State law. All moneys at any time in the Revenue Fund shall be applied on a monthly basis to 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. No later than the last day of each month, commencing no later than December 31, 2012, there shall be transferred from the Revenue Fund (i) into the Bond Fund, an amount equal to 1/6 of the interest on the Bonds due on the next interest payment date and an amount equal to 1/12 of the principal on the Bonds due on the next principal payment date (including mandatory sinking fund redemptions). Moneys in the Bond Fund shall be used solely for the purpose of paying Annual Debt Service on the Bonds or for redemption of 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 Parking Revenues 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 not later than last day of the next succeeding month. (c) Debt Service Reserve Fund. See the caption "SECURITY FOR THE SERIES 2012 BONDS — Debt Service Reserve" herein. (d) Rebate Fund. The Trustee shall establish and maintain, separate and apart from any other Funds 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. (e) Project Fund. A portion of the proceeds of the Series 2012 Bonds shall be deposited in the Project Fund. See the caption "ESTIMATED SOURCES AND USES OF FUNDS" herein. Amounts in the Project Fund shall be expended only for the payment of Project Costs upon the submission of Requisitions by the City to the Trustee. The Trustee shall only make payments from the Project Fund pursuant to and in accordance with Requisitions. Within ninety (90) days following completion of the Project, the City shall deliver to the Trustee its Certificate stating that the Project is complete and the Trustee shall transfer the remaining moneys in the Project Fund (save and except moneys needed to satisfy unpaid Project Costs) to the Bond Fund for application to the retirement of the Series 2012 Bonds by redemption or purchase. See the caption "THE SERIES 2012 BONDS — Redemption" herein. (f) Cost of Issuance Fund. A portion of the proceeds of the Series 2012 Bonds shall be deposited to the credit of the Cost of Issuance Fund. The Trustee shall pay those Costs of Issuance as directed by the City pursuant to a Certificate delivered on a Closing Date. After all Costs of Issuance have been paid with respect to the Series 2012 Bonds, any remaining moneys in the Cost of Issuance Fund shall be transferred to the Bond Fund. Investment of Funds. At the direction of the City or absent such direction, the Trustee shall invest moneys in Funds held by the Trustee in Investment Securities with maturity or redemption dates consistent with the times at which said moneys will be required for the purposes provided in the Indenture; provided, however, the stated maturities of Investment Securities in the Debt Service Reserve Fund shall not exceed five years from the date of investment thereof. Moneys in separate Funds may be commingled for the purpose of investment. The City may invest moneys held in the Revenue Fund in any investment obligations permitted by Arkansas law. 17 Obligations purchased as an investment of moneys in any Fund created by the Indenture shall be deemed at all times to be a part of such Fund, and any income or loss due to an investment thereof shall be charged to the respective Fund for which the investment was made except as otherwise provided in the Indenture. Valuation of Funds and Accounts. Investments in any Fund held by the Trustee shall be evaluated monthly and the determined value reported to the City. In determining the value of any Fund held by the Trustee under the Indenture, the Trustee shall credit Investment Securities at the fair market value thereof based on accepted industry standards and from accepted industry providers. The Trustee shall sell or present for redemption any Investment Securities as necessary in order to provide money for the purpose of making any payment required under the Indenture, and the Trustee shall not be liable for any loss resulting from any such sale. Responsibility of Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of moneys made by it at the direction of the City. Tax Covenants. The City shall not use or permit the use of any Series 2012 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 Series 2012 Bond from gross income for federal income tax purposes. No part of the proceeds of the Series 2012 Bonds shall at any time be used, directly or indirectly, to acquire securities or obligations the acquisition of which would cause any of such Series 2012 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 Series 2012 Bonds remain Outstanding, it will comply with the provisions of the Tax Regulatory Agreement. Defeasance. Any Series 2012 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 Series 2012 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 Series 2012 Bonds or cause any of the Series 2012 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 Series 2012 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 18 (e) If the State has limited or altered the rights of the City pursuant to the Act, as in force on the date of the Indenture, to fulfill the terms of any agreements made with the Trustee or the Bondholders or in any way impaired the rights and remedies of the Trustee or the Bondholders while any Bonds are Outstanding. The term "default' as used in clauses (a), (b) and (c) above shall mean default by the City in the performance or observance of any of the covenants, agreements or conditions on its part contained in the Indenture, or in the Bonds Outstanding thereunder, exclusive of any period of grace required to constitute a default an "Event of Default' as described above. Acceleration. Upon the occurrence of an Event of Default, the Trustee may, and upon the written request of the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding shall, by notice in writing delivered to the City, declare the principal of all Bonds then Outstanding, together with any premium and the interest 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. No remedy by the terms of the Indenture confelred upon or reserved to the Trustee (or to the Bondholders) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given under the Indenture or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or acquiescence therein; and every such right and power may be exercised from time to time and as often as may be deemed expedient. No waiver of any default or Event of Default under the Indenture, whether by the Trustee or by the Bondholders, shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. Rights and Remedies of Bondholders. No Holder of any Bond shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of the Indenture or for the execution of any trust thereof or for the appointment of a receiver or any other remedy thereunder, unless a default has occurred of which the Trustee has been notified as provided in the Indenture, or of which by the Indenture it is deemed to have notice, nor unless such default shall have become an Event of Default and the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding shall have made written request to the Trustee and shall have offered it reasonable opportunity either to proceed to exercise the powers granted or to institute such action, suit, or proceeding in its own name, nor unless also they have offered to the Trustee indemnity as provided in the Indenture nor unless the Trustee shall thereafter fail or refuse to exercise the powers granted, or to institute such action, suit, or proceeding in its own name; and such notification, request and offer of indemnity are declared in every such case at the option of the Trustee to be conditions precedent to the execution of the powers and trusts of the Indenture, and to any action or cause of action for the enforcement of the Indenture or for the appointment of a receiver or for any other remedy thereunder; it being understood and intended that no one or more Holders of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of the Indenture by action of the Holder or Holders or to enforce any right under the Indenture except in the manner therein provided, and that all proceedings at law or in equity shall be instituted, held and maintained in the manner therein provided for the equal benefit of the Holders of all Bonds Outstanding thereunder. Nothing in the Indenture contained shall, however, affect or impair the right of any Bondholders to enforce the payment of the principal of and premium, if any, and interest on any Bonds at and after the maturity thereof, or the obligation of the City to pay the principal of and premium, if any, and interest on each of the Bonds issued under the Indenture to the respective Holders thereof at the time and place in said Bonds expressed. Supplemental Indentures Not Requiring Consent of Bondholders. The City and the Trustee may, from time to time and at any time, without the consent of or notice to the Bondholders, enter into Supplemental Indentures as follows: 19 (a) to cure any formal defect, omission, inconsistency or ambiguity in the Indenture; (b) to grant to or confer or impose upon the Trustee for the benefit of the Bondholders any additional rights, remedies, powers, authority, security, liabilities or duties which may lawfully be granted, conferred or imposed and which are not contrary to or inconsistent with the Indenture as theretofore in effect, provided that no such additional liabilities or duties shall be imposed upon the Trustee without its consent; (c) to add to the covenants and agreements of, and limitations and restrictions upon, the City in the Indenture other covenants, agreements, limitations and restrictions to be observed by the City which are not contrary to or inconsistent with the Indenture as theretofore in effect; (d) to confirm, as further assurance, any pledge under, and the subjection to any claim, lien or pledge created or to be created by, the Indenture, of the Trust Estate or of any other moneys, securities or funds; (e) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time amended; (f) to authorize the issuance and sale of one or more series of Additional Bonds; (g) to make such additions, deletions or modifications as may be necessary to assure compliance with Section 148(f) of the Code relating to required rebate to the United States or otherwise as may be necessary to assure exemption from federal income taxation of interest on the Bonds; or (h) to modify, alter, amend or supplement the Indenture in any other respect which is not materially adverse to the Bondholders and which does not involve a change described in clause (a), (b), (c), (d), (e) or (f) above and which, in the judgment of the Trustee, is not to the prejudice of the Trustee. Supplemental Indentures Requiring Consent of Bondholders. Subject to the terms°and provisions contained in this paragraph, and not otherwise, the Holders of not less than 2/3 in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in the Indenture to the contrary notwithstanding, to consent to and approve the execution by the City and the Trustee of such indenture or indentures supplemental to the Indenture as shall be deemed necessary and desirable by the City for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in the Indenture or in any Supplemental Indenture; provided, however, that nothing contained in the Indenture shall permit or be construed as permitting (a) an extension of the maturity (or mandatory redemption date) of the principal of or the interest on any Bond issued thereunder, or (b) a reduction in the principal amount of or redemption premium or rate of interest on any Bond issued thereunder, or (c) the creation of any lien on the Trust Estate or any part thereof, except as expressly permitted in the Indenture, or (d) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture, or (f) depriving the Holder of any Bond then Outstanding of the lien created on the Trust Estate. If, at any time the City shall request the Trustee to enter into any Supplemental Indenture for any of the purposes described above, the Trustee shall, at the expense of the City, cause notice of the proposed execution of such Supplemental Indenture to be mailed by first class mail to each registered owner of the Bonds. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the principal office of the Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such Supplemental Indenture when consented to and approved as provided above. If the Holders of not less than 2/3 in aggregate principal amount of the Bonds Outstanding at the time of the execution of any such Supplemental Indenture shall have consented to and approved the execution thereof, no Holder of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from executing the same or from taking any action pursuant to the provisions thereof. SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT The City has entered into an undertaking in the form of the Continuing Disclosure Agreement as required by the Indenture for the benefit of the Beneficial Owners of the Series 2012 Bonds to cause certain financial information to be sent to certain information repositories annually and to cause notice to be sent to such information repositories of certain specified events, pursuant to the requirements of Section (b)(5)(i) of Rule 15c2-12 of the _ Securities Exchange Act of 1934, as amended (the "Rule"). The City has not failed to comply with any previous undertaking pursuant to the Rule. i 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 and the Audited Financial Statements to the MSRB within 180 days of the completion of the City's fiscal year. 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. (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 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, of Material Events Disclosure to the MSRB in Prescribed Form. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Series 2012 Bonds or defeasance of any Series 2012 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 2012 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 2012 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 2012 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 2012 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, 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 2012 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 2012 Bonds holding a majority of the aggregate principal amount of the Series 2012 Bonds (excluding Series 2012 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: 21 "Annual Financial Information" means financial information and operating data (exclusive of Audited Financial Statements) of the type appearing under the caption "SECURITY FOR THE SERIES 2012 BONDS" in the final Official Statement. "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 2012 Bonds (including persons holding Series 2012 Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2012 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., 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. 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 2012 (i) Principal and interest payment delinquencies; (ii) Nonpayment -related defaults, if material; (iii) Unscheduled draws on debt service reserves reflecting financial difficulties; (iv) Unscheduled draws on credit enhancements reflecting financial difficulties; (v) Substitution of credit or liquidity providers, or their failure to perform; (vi) 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; (vii) Modifications to rights of security holders, if material; (viii) Bond calls, if material, and tender offers; (ix) Defeasances; (x) Release, substitution or sale of property securing repayment of the securities, if material; (xi) Rating changes; (xii) Bankruptcy, insolvency, receivership or similar event of the City; (xiii) 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; and (xiv) 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. 22 "Participating Underwriter" means each broker, dealer or municipal securities dealer acting as an underwriter in any primary offering of the Series 2012 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 obligations 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. (the "Underwriter"), the Series 2012 Bonds are being purchased at a purchase price of $ (representing the stated principal amount of the Series 2012 Bonds less an underwriting discount of $ ) plus accrued interest from December 1, 2012 to the date of delivery of the Series 2012 Bonds. The bond purchase agreement provides that the Underwriter will purchase all of the Series 2012 Bonds if any are purchased. The obligation of the Underwriter to accept delivery of the Series 2012 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 2012 Bonds or the Parking Revenues 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 2012 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 2012 Bonds to the public, and may offer the Series 2012 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 2012 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 2012 Bonds is excluded from the 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 2012 Bonds. Failure to comply with such requirements could cause interest on the Series 2012 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2012 Bonds. The City has covenanted to comply with such requirements. Notwithstanding Bond Counsel's opinion that interest on the Series 2012 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). Bank Qualification. The City has represented that it does not reasonably anticipate issuing greater than $10,000,000 of tax-exempt obligations in calendar year 2012 (excluding certain private activity and refunding bonds) and that it has designated the Series 2012 Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. Accordingly, Bond Counsel is of the opinion that in the case of certain banks, thrift institutions or other financial institutions owning the Series 2012 Bonds, a deduction is allowed for 80% of that portion of such institutions' interest expense allocable to interest on the Series 2012 Bonds. Bond Counsel has expressed no opinion with respect to any deduction for federal income tax purposes of interest incurred or continued by a holder of the Series 2012 Bonds or a related person to purchase or carry the Series 2012 Bonds 23 Bond Counsel has expressed no opinion regarding other federal tax consequences arising with respect to the Series 2012 Bonds. The accrual or receipt of interest on the Series 2012 Bonds may otherwise affect the federal income tax liability of the owners of the Series 2012 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 2012 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 2012 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 2012 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 2012 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 Tax Law. From time to time, there are legislative proposals in the Congress that, if enacted, could alter or amend the federal tax matters referred to above or adversely affect the market value of the Series 2012 Bonds. An example is the American Jobs Act of 2011, proposed by President Obama on September 12, 2011 and introduced in the United States Senate on September 13, 2011. If enacted as introduced, a provision of the American Jobs Act of 2011 would limit the amount of exclusions (including tax-exempt interest) and deductions available to certain high income taxpayers for taxable years after 2012, and as a result could affect the market price or marketability of the Series 2012 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 2012 Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Series 2012 Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2012 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 and regulatory authorities as of the date of issuance and delivery of the Series 2012 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 laws, regulations, rulings and judicial decisions, interest on the Series 2012 Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. LEGAL MATTERS Legal Opinions. Legal matters incident to the authorization and issuance of the Series 2012 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 2012 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 2012 Bonds or questioning or affecting the legality of the Series 2012 Bonds or the proceedings and authority under which the Series 2012 Bonds are to be issued, or questioning the right of the City to issue the Series 2012 Bonds. There is no action, suit or proceeding known to be pending or threatened, restraining or enjoining the City in any way which could have a material adverse effect on Parking Revenues or the City's ability to pay debt service with respect to the Series 2012 Bonds. 24 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 2012 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. 25 The execution and delivery of this Official Statement has been duly authorized by the City of Fayetteville, Arkansas. CITY OF FAYETTEVILLE, ARKANSAS Mayor 26 APPENDIX A Proposed Form of Bond Counsel Opinion Upon delivery of the Series 2012 Bonds in definitive form, Kutak Rock LLP, Little Rock, Arkansas, proposes to deliver its approving opinion in substantially the following form: December , 2012 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $6,220,000* City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 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 $6,220,000* Parking Revenue Improvement Bonds, Series 2012 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and Arkansas Code Annotated (1998 Repl. & Supp. 2011) §§14- 164-401 et seq. (as from time to time amended, the "Local Government Revenue Bond Act'), pursuant to Ordinance No. 5457 of the City, duly adopted and approved on November 15, 2011 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of December 1, 2012 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, 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 nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the Holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance and to enter into and perform its obligations under the Indenture, the valid adoption of the Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. FEW Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and the Local Government Revenue Bond Act, the City is empowered to adopt the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 4. The Bonds have been validly authorized, executed, issued and delivered by the City and represent valid and binding special obligations of the City. The principal, premium, if any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and pledge by the City to the Trustee of, the Net Parking Revenues (as defined in the Indenture). 5. The Net Parking Revenues 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 Net Parking Revenues. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated (2001 Repl. & 2011 Supp.) Section 4-9-109(d)(14), the pledge, assignment and security interest in the Net Parking Revenues securing the Bonds is and shall be prior to any judicial lien hereafter imposed on said Net Parking Revenues 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 said Net Parking Revenues. 6. Interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinion described in the preceding sentence assumes the accuracy of certain representations and compliance by the City with covenants designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended (the "Code'), that must be met subsequent to the issuance of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with such requirements. The Bonds are "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, and, in the case of certain financial institutions (within the meaning of Section 265(b)(5) of the Code), a deduction is allowed for eighty percent (80%) of that portion of such financial institution's interest expense allocable to interest on 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, A-2 OFFICIAL STATEMENT NEW ISSUE BOOK -ENTRY ONLY NOT RATED In the opinion of Kutak Rock LLP, Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the accuracy of certain representations and continuing compliance with certain covenants, interest on the Series 2012 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. Bond Counsel is also of the opinion that the Series 2012 Bonds are "qualified tax-exempt obligations" under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Under existing law, Bond Counsel is of the opinion that the Series 2012 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. $6,220,000 CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BONDS SERIES 2012 Dated: December 1, 2012 Due: June 1, as shown on inside front cover The Parking Revenue Improvement Bonds, Series 2012 (the "Series 2012 Bonds"), are being issued by the City of Fayetteville, Arkansas (the "City") for the purpose of (i) financing all or a portion of the costs of acquiring, constructing and equipping parking deck facilities and related roadway and other improvements within the City's Entertainment District (the "Project"), (ii) funding a deposit to the debt service reserve fund, and (iii) paying certain expenses in connection with the issuance of the Series 2012 Bonds. See the captions "SOURCES AND USES OF FUNDS" and "THE PROJECT" herein. The Series 2012 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 2012 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2012 Bonds. Individual purchases of the Series 2012 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers (`Beneficial Owners") of Series 2012 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. The Series 2012 Bonds shall bear interest from their dated date, payable on June 1 and December 1 of each year, commencing June 1, 2013. All such interest payments shall be payable to the persons in whose name such Series 2012 Bonds are registered on the bond registration books maintained by Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"), as of the fifteenth day of the calendar month preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2012 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 2012 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 December 1, 2012 (the "Indenture"), between the City and the Trustee, the payment of the principal of, premium, if any, and interest on the Series 2012 Bonds is secured by a pledge of the net revenues (after provision for operation and maintenance expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues charged and collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated by the Project and net revenues with respect to City management of parking facilities owned by third parties (the "Net Parking Revenues"). See the caption "SECURITY FOR THE SERIES 2012 BONDS" herein. The Series 2012 Bonds are subject to optional and mandatory redemption prior to maturity as more fully described herein under the caption "THE SERIES 2012 BONDS - Redemption." The Series 2012 Bonds are special obligations of the City secured solely by and payable from Net Parking Revenues. The Series 2012 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 2012 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 2012 Bonds, except as described herein with respect to the Net Parking Revenues. The Series 2012 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 2012 Bonds will be available for delivery in New York, New York, on or about December 19, 2012. Stephens Inc. Investment Bwkas The date of this Official Statement is December 11, 2012. MATURITY SCHEDULE Maturity Principal Interest Maturity Principal June 1 Amount Rate Yield June 1 Amount 2013 $ 60,000 1.000% 0.600% 2021 $230,000 2014 120,000 1.250% 0.800% 2022 235,000 2015 120,000 1.500% 1.000% 2023 240,000 2016 150,000 2.000% 1.200% 2024 245,000 2017 210,000 2.000% 1.450% 2025 250,000 2018 215,000 2.000% 1.550% 2026 260,000 2019 220,000 2.000% 1.800% 2027 265,000 2020 225,000 2.000% 2.000% $1,455,000 3.100% Term Bonds due June 1, 2032 - Yield: 3.200% $1,720,000 3.625% Term Bonds due June 1, 2037 - Yield: 3.700% (Plus accrued interest) CITY OF FAYETTEVILLE, ARKANSAS Issuer City Council Lioneld Jordan, Mayor Rhonda Adams Brenda Boudreaux Bobby Ferrell Adella Gray Mark Kinion Sarah Lewis Matthew Petty Justin Tennant Paul Becker, Finance Director Sondra Smith, City Clerk Kit Williams, City Attorney 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 Interest Rate Yield 2.250% 2.250% 2.400% 2.400% 2.600% 2.600% 2.700% 2.700% 2.800% 2.800% 2.850% 2.850% 2.900% 2.900% 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 any 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 2012 Bonds in any jurisdiction in which such offer is not authorized, or in which the person making such offer, solicitation or sale is not qualified to do so, or to any person to whom it is unlawful to make such offer, solicitation or sale. The information and expressions of opinion contained herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. THE SERIES 2012 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE TRUST INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON CERTAIN EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION CONTAINED IN SUCH LAWS. CERTAIN INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED FROM THE CITY, THE DEPOSITORY TRUST COMPANY AND OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE. THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITER DOES NOT GUARANTY THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2012 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......................................................................................................................................... 1 TheSeries 2012 Bonds......................................................................................................................................... 2 Security for the Series 2012 Bonds...................................................................................................................... 4 Book -Entry Only System..................................................................................................................................... 6 TheProject........................................................................................................................................................... 7 Sourcesand Uses of Funds................................................................................................................................... 8 DebtService Requirements.................................................................................................................................. 8 Estimated Debt Service Coverage........................................................................................................................ 9 TheCity................................................................................................................................................................ 9 Definitionsof Certain Terms................................................................................................................................ 12 Summaryof the Indenture.................................................................................................................................... 16 Summary of the Continuing Disclosure Agreement............................................................................................. 20 Underwriting........................................................................................................................................................23 TaxMatters.......................................................................................................................................................... 23 LegalMatters........................................................................................................................................................ 25 Miscellaneous.......................................................................................................................................................25 Accuracy and Completeness of Official Statement.............................................................................................. 25 APPENDIX A - Form of Bond Counsel Opinion................................................................................................ A-1 [THIS PAGE LEFT BLANK INTENTIONALLY] OFFICIAL STATEMENT $6,220,000 CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BONDS SERIES 2012 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 Appendix hereto, is furnished in connection with the offering by the City of Fayetteville, Arkansas (the "City") of its Parking Revenue Improvement Bonds, Series 2012, in the principal amount of $6,220,000 (the "Series 2012 Bonds"). The City is a city of the first class organized and existing under the laws of the State of Arkansas (the "State"). The City is authorized under Amendment 65 to the Constitution of the State ("Amendment 65") and Arkansas Code Annotated (1998 Repl. & 2011 Supp.) §§14-164-401 et seq. (as from time to time amended, the "Act"), to issue and sell bonds for the purpose of financing "capital improvements," as defined in the Act. The Series 2012 Bonds are to be issued by the City pursuant to Amendment 65, the Act and Ordinance No. 5457, adopted and approved on November 15, 2011 (the "Authorizing Ordinance"), for the purpose of (i) financing all or a portion of the costs of acquiring, constructing and equipping parking deck facilities and related roadway and other improvements within the City's Entertainment District (the "Project"), (ii) funding a deposit to the debt service reserve fund, and (iii) paying certain expenses in connection with the issuance of the Series 2012 Bonds. See the captions "SOURCES AND USES OF FUNDS" and "THE PROJECT" herein. The Series 2012 Bonds are not general obligations of the City, but are special obligations secured solely by and payable from net revenues (after provision for Operation and Maintenance Expenses, including previous debt for parking equipment) attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including net revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities owned by third parties (the "Net Parking Revenues"). See the caption "SECURITY FOR THE SERIES 2012 BONDS" herein. The faith and credit of the City are not pledged to the payment of the Series 2012 Bonds, and the Series 2012 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 2012 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 2012 Bonds, except as described herein with respect to the Net Parking Revenues. Additional bonds may be issued by the City on a parity of security with the Series 2012 Bonds under certain circumstances set forth in the Indenture (hereinafter defined). See the caption "THE SERIES 2012 BONDS — Additional Bonds" herein. The Series 2012 Bonds and any Additional Bonds are herein collectively referred to as the "Bonds." Pursuant to the provisions of a Continuing Disclosure Agreement dated as of the date of delivery of the Series 2012 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 Net Parking Revenues 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 2012 Bonds, the Net Parking Revenues, the Continuing Disclosure Agreement, and the Trust Indenture dated as of December 1, 2012 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"), pursuant to which the Series 2012 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 2012 Bonds are qualified in their entirety by reference to the definitive forms thereof and the information with respect thereto included in the Indenture. Copies of the Continuing Disclosure Agreement, the Indenture, and the form of Series 2012 Bond included therein, are available from the City by writing to the attention of the Finance Director, 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. Certain financial and operating 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 2012 BONDS Description. The Series 2012 Bonds will be initially dated as of December 1, 2012, and will bear interest payable semiannually on June 1 and December 1 of each year, commencing June 1, 2013, at the rates set forth on the inside cover page hereof. The Series 2012 Bonds will mature on June 1 in the years and in the principal amounts set forth on the inside cover page hereof. The Series 2012 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 2012 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2012 Bonds. Individual purchases of the Series 2012 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers ("Beneficial Owners") of Series 2012 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. All interest payments on the Series 2012 Bonds shall be payable to the persons in whose name such Series 2012 Bonds are registered on the bond registration books maintained by the Trustee, as of the fifteenth day of the calendar month preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2012 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 2012 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 2012 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. The Series 2012 Bonds are subject to redemption prior to maturity as follows: (i) The Series 2012 Bonds are subject to redemption prior to maturity, at the option of the City, on and after June 1, 2018, in whole or in part at any time and in any order of maturity directed by the City, from funds from any source, at a redemption price equal to 100% of the principal amount of the Series 2012 Bonds being redeemed, plus accrued interest to the date of redemption; (ii) The Series 2012 Bonds shall be redeemed prior to maturity, in whole or in part, on any interest payment date, in inverse order of maturity, at a redemption price equal to 100% of the principal amount of the Series 2012 Bonds being redeemed, plus accrued interest to the date of redemption, from unexpended proceeds of the Series 2012 Bonds (if such unexpended proceeds equal or exceed $100,000) in the Project Fund not needed for paying Project Costs; and (iii) The Series 2012 Bonds maturing on June 1, 2032, are subject to mandatory sinking fund redemption prior to maturity in part, on June 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 2028 $275,000 2029 $280,000 2030 $290,000 2031 $300,000 2032 (maturity) $310,000 2 At its option, to be exercised on or before the 45 h day next preceding any mandatory sinking fund redemption date for any Series 2012 Bonds maturing June 1, 2032 (the "2032 Term Bonds"), the City may deliver to the Trustee for cancellation 2032 Term Bonds, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such 2032 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 2032 Term Bonds in chronological order, and the principal amount of such 2032 Term Bonds so to be redeemed shall be accordingly reduced. (iv) The Series 2012 Bonds maturing on June 1, 2037, are subject to mandatory sinking fund redemption prior to maturity in part, on June 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 2033 $320,000 2034 $330,000 2035 $345,000 2036 $355,000 2037 (maturity) $370,000 At its option, to be exercised on or before the 45"' day next preceding any mandatory sinking fund redemption date for any Series 2012 Bonds maturing June 1, 2037 (the "2037 Term Bonds"), the City may deliver to the Trustee for cancellation 2037 Term Bonds, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such 2037 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 2037 Term Bonds in chronological order, and the principal amount of such 2037 Term Bonds so to be redeemed shall be accordingly reduced. Partial Redemption of a Series 2012 Bond. If less than all of the Series 2012 Bonds of a maturity are called for redemption, the particular Series 2012 Bonds or portions of Series 2012 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 2012 Bonds, the procedures established by DTC. shall control with respect to the selection of the particular Series 2012 Bonds to be redeemed. Notice of Redemption. Notice of the call for any redemption, identifying the Series 2012 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 2012 Bonds, by any other means acceptable to DTC, including facsimile) to the registered owner of each such Series 2012 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 2012 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 or equipping of parking related "capital improvements" (as defined in the Act), (ii) refunding the Series 2012 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 2012 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. 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 (I) in the case of Additional Bonds to finance Project Costs, a statement by a Qualified Accountant reciting the opinion, based upon necessary investigation, that Net Parking Revenues for the Fiscal Year immediately preceding the Fiscal Year in which such Additional Bonds are to be issued were not less than (i) 125% of the maximum Annual Debt Service on all then outstanding Bonds and Subordinate Obligations 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, and (II) in the case of Additional Bonds to refund the Series 2012 Bonds or any series of Additional Bonds, a Certificate of the Mayor stating that, after taking into account the issuance of the Additional Bonds and the application of the proceeds thereof and other available funds to the refunding, the average Annual Debt Service on all outstanding Bonds and Subordinate Obligations will not be increased. If any changes have been made, and are in effect on the date of issuance of the Additional Bonds, in any parking fees, leases, rents, fines or charges imposed by the City which were not in effect during the entire preceding Fiscal Year, the Qualified Accountant may, if such changes resulted in increases in such fees, leases, rents, charges and fines, and shall, if such changes resulted in reductions in such fees, leases, rents, fines or charges, adjust the Parking Revenues for the preceding Fiscal Year to reflect any changes in such Parking Revenues which would have occurred if the changed fees, leases, rents, fines and charges had been in effect during the entire preceding Fiscal Year. Notwithstanding any of the foregoing, no Additional Bonds shall be issued unless there is no default existing at the time of issuance under the Indenture. Subordinate Obligations. Nothing in the Indenture shall prevent the City from authorizing and issuing bonds, notes, bond anticipation notes, warrants, certificates or other obligations or evidences of indebtedness, the payment of the principal of and premium, if any, and interest on which shall be made from Parking Revenues or from a special fund to be established and maintained from Parking Revenues, provided payments from Parking Revenues or from Parking Revenues into such special fund, and the lien and charge on such Parking Revenues, shall be made junior and subordinate to the lien, pledge and charge created in the Indenture for the security and payment of the Series 2012 Bonds and other payments under the Indenture. Notwithstanding anything herein to the contrary, no Subordinate Obligations shall be issued unless there is no default at the time of issuance under the Indenture. Transfer or Exchange. The Series 2012 Bonds may be transferred on the books of registration kept by the Trustee by the registered owner in`person or by the owner's duly authorized attorney, upon surrender thereof, together with a written instrument of transfer duly executed by the registered owner or the owner's duly authorized attorney. Upon surrender for transfer of any Series 2012 Bond at the principal corporate office of the Trustee, the City shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Series 2012 Bond or Bonds in the same aggregate principal amount and of any authorized denomination or denominations. Transfers of registration or exchanges of Series 2012 Bonds shall be without charge to the Holders of such Series 2012 Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Holder of the Series 2012 Bond requesting such transfer or exchange as a condition precedent to the exercise of such privilege. The Trustee shall not be required to transfer or exchange any Series 2012 Bond during the period from and including a Record Date to the next succeeding interest payment date of such Series 2012 Bond nor to transfer or exchange any Series 2012 Bond after the mailing of notice calling such Series 2012 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 2012 Bonds, transfers of beneficial interests in the Series 2012 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 SERIES 2012 BONDS General. The Series 2012 Bonds are special obligations of the City secured solely by and payable from the Net Parking Revenues. In the Indenture, "Net Parking Revenues" are defined as Parking Revenues less Operation and Maintenance Expenses. "Parking Revenues" are all revenues attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities owned by third parties. "Operation and Maintenance Expenses" means all reasonable and necessary costs and expenses incurred in the operation, maintenance, repair and insuring of the City's parking meters, lots and other parking facilities which are properly accounted for such purposes under generally accepted accounting principles, including debt service on debt incurred to acquire parking equipment prior to the date of the Indenture. Such term does not include Debt Service on the Bonds or Subordinate Obligations or depreciation expense. The fees, rents, fines and charges from which the Net Parking Revenues are derived have been imposed by the City pursuant to various ordinances adopted by the City Council. The Net Parking Revenues have been pledged 4 to secure the payment of Debt Service on the Series 2012 Bonds pursuant to Ordinance No. 5457, duly adopted by the City Council of the City on November 15, 2011 (the "Authorizing Ordinance"). Set forth below is a table showing the City's Parking Revenues, Operation and Maintenance Expenses and Net Parking Revenues over the last six years. Year Parking Revenues(2) O&M Expenses Net Parking Revenues 2007 $ 466,565 $ 363,794 $ 102,771 2008 431,019 377,501 53,518 2009 405,896 389,856 16,040 2010 766,659 525,841 240,818 2011 1,347,857 766,935 580,922 2012 1,277,135 613,652 663,483 (1) Through October 31, 2012. (2) Includes net revenues received by the City for management of parking areas owned by third parties; $6,616 in 2007, $12,914 in 2008, $15,032 in 2009, $14,521 in 2010, $20,303 in 2011 and $28,874 in 2012 to date. In 2010, a new parking program was implemented within the City's entertainment district. Various provisions of this program, including the capture of fees for on -street parking and enhanced parking rates and fines for violations, have resulted in increased annual collections of Parking Revenues as shown in the table above. The Series 2012 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 2012 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 2012 Bonds, except as described herein with respect to the Net Parking Revenues. The City has covenanted that the fees, leases, rents, fines and charges generating the Parking Revenues will not be reduced from current levels while any of the Series 2012 Bonds are Outstanding unless there is obtained from a Qualified Accountant a certificate to the effect that Net Parking Revenues in the then current and immediately succeeding Fiscal Years, with the reduced fees, leases, rents, fines or charges, will be at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding Fiscal Years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. The City has further covenanted that the fees, leases, rents, fines and charges generating the Parking Revenues shall, if and when necessary, from time to time, be increased in such a manner as will produce Net Parking Revenues in the then current and immediately succeeding Fiscal Years at least equal to (i) 125% of the Annual Debt Service on all Bonds and Subordinate Obligations for the then current and immediately succeeding Fiscal Years, and (ii) the amount, if any, needed to make required deposits to the Debt Service Reserve Fund. Debt Service Reserve. From the proceeds of sale of the Series 2012 Bonds, there shall be deposited into the Debt Service Reserve Fund an amount sufficient to cause the amount on deposit therein to be equal to 50% of the maximum Annual Debt Service with respect to the Series 2012 Bonds (the "Reserve Requirement"). Amounts on deposit in the Debt Service Reserve Fund shall be used solely to pay the principal of and interest on the Series 2012 Bonds as due for which there are no available funds in the Bond Fund to make such payments. The Reserve Requirement may be satisfied by cash or by Investment Securities. If the amount in the Debt Service Reserve Fund is ever reduced below the Reserve Requirement, it shall be reimbursed to an amount equal to the Reserve Requirement through monthly payments, beginning not later than the last day of the month in which the Debt Service Reserve Fund was reduced below the Reserve Requirement, and continuing not later than the last day of each month thereafter until such reimbursement shall have been accomplished, from any funds in the Revenue Fund (after making the required deposits into the Bond Fund, as provided in the Indenture). If a surplus shall exist in the Debt Service Reserve Fund over and above the Reserve Requirement, such surplus shall be deposited into the Bond Fund. BOOK -ENTRY ONLY SYSTEM The Series 2012 Bonds will be issued only as one fully registered Series 2012 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 2012 Bonds. The fully registered Series 2012 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 2012 Bonds. Owners of any book entry interests in the Series 2012 Bonds (the "book entry interest owners") described below, will not receive or have the right to receive physical delivery of the Series 2012 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 2012 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 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book - entry transfers and pledges among Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, the National Securities Clearing Corporation and the Fixed Income Clearing Corporation, all of which are registered agencies. DTTC 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 2012 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2012 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2012 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 2012 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 2012 Bonds, except in the event that use of the Book -Entry System for the Series 2012 Bonds is discontinued. To facilitate subsequent transfers, all Series 2012 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 2012 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 2012 Bonds, DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2012 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 2012 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 2012 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 2012 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 2012 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 2012 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 2012 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 2012 Bonds made to DTC or its nominee as the registered owner of the Series 2012 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 2012 Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, bond certificates are required to be printed and delivered. In addition, the City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered. THE PROJECT A portion of the proceeds of the Series 2012 Bonds will be used to accomplish the acquisition, construction and equipping of multi -level parking deck facilities and related roadway and other improvements (the "Project"). The Project improvements will be located within the City's Entertainment District Parking Zone and will have an estimated capacity of approximately 250 vehicle spaces. SOURCES AND USES OF FUNDS The proceeds of the Series 2012 Bonds are to be used as follows: Sources of Funds Par Amount of Series 2012 Bonds $6,220,000 Net Original Issue Discount (23,001) Total Sources: 6 196 999 Uses of Funds Deposit to Project Fund $5,857,833 Deposit to Debt Service Reserve Fund 190,316 Costs of Issuance and Underwriter's Discount 148,850 Total Uses: 6 196 999 DEBT SERVICE, REQUIREMENTS As of the date of closing, the Series 2012 Bonds will constitute the only debt obligations secured by the Net Parking Revenues. The following table sets forth the amounts required to pay scheduled principal of and interest on the Series 2012 Bonds during each year: Total Debt Year Principal(') Interest Service 2013 $ 60,000 $ 177,220 $ 237,220 2014 120,000 176,170 296,170 2015 120,000 174,520 294,520 2016 150,000 172,120 322,120 2017 210,000 168,520 378,520 2018 215,000 164,270 379,270 2019 220,000 159,920 379,920 2020 225,000 155,470 380,470 2021 230,000 150,633 380,633 2022 235,000 145,225 380,225 2023 240,000 139,285 379,285 2024 245,000 132,857 377,857 2025 250,000 126,050 376,050 2026 260,000 118,845 378,845 2027 265,000 111,298 376,298 2028 275,000 103,192 378,192 2029 280,000 94,590 374,590 2030 290,000 85,755 375,755 2031 300,000 76,610 376,610 2032 310,000 67,155 377,155 2033 320,000 56,550 376,550 2034 330,000 44,769 374,769 2035 345,000 32,534 377,534 2036 355,000 19,847 374,847 2037 370,000 6,706 376,706 Totals: 6 220 000 2 860 111 9 080 111 Includes mandatory sinking fund redemptions. ESTIMATED DEBT SERVICE COVERAGE The following table shows estimated maximum annual debt service coverage with respect to the Series 2012 Bonds utilizing the most recent twelve months of Net Parking Revenues. Historical Net Parking Revenues(l) $687,839 Maximum Annual Debt Service Requirement on Series 2012 Bonds(2) $380,633 Maximum Annual Debt Service Coverage 1.81 X ``' Net Parking Revenues for the twelve-month period from November 1, 2011 to October 31, 2012. (2) See the caption "DEBT SERVICE REQUIREMENTS" herein. THE COVERAGE NUMBERS SET FORTH ABOVE ARE BASED ON HISTORICAL NET PARKING REVENUES. ACTUAL RECEIPTS OF PARKING REVENUES AND THE LEVEL OF OPERATION AND MAINTENANCE EXPENSES WILL DEPEND ON NUMEROUS FACTORS, AND THERE CAN BE NO ASSURANCE THAT FUTURE NET PARKING REVENUES AVAILABLE TO PAY DEBT SERVICE ON THE SERIES 2012 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 540, U.S. Highways 62 and 71, and State Highways 16, 45, 112, 156, 180 and 265. The Burlington Northern Railroad has several lines running through the City, and a general aviation airport with a 6,006-foot runway is available for limited commuter travel. The Northwest Arkansas Regional Airport is located approximately 40 minutes from downtown Fayetteville and provides daily flights to numerous venues. Government. The City currently operates under the Mayor -Council form of government pursuant to which a mayor, city attorney, city clerk and eight aldermen are elected, two from each of the City's four wards. The mayor, city attorney and city clerk are full-time positions elected to four year terms. Aldermen also serve four year terms. The City's elected officials and the dates on which their respective terms expire are as follows: Name Office Term Expires Lioneld Jordan Mayor 12/31/16 Kit Williams City Attorney 12/31/14 Sondra Smith City Clerk 12/31/12 Rhonda Adams Alderman 12/31/14 Brenda Boudreaux Alderman 12/31/12 Bobby Ferrell Alderman 12/31/12 Adella Gray Alderman 12/31/14 Mark Kinion Alderman 12/31/14 Sarah Lewis Alderman 12/31/12 Matthew Petty Alderman 12/31/12 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: 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 Economic Data. Per capita personal income figures for the MSA and the State of Arkansas are as follows: State of Year MSA Arkansas 2000 $22,828 $22,577 2001 24,061 23,870 2002 24,658 24,273 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 n/a 33,740 Source: Discover Arkansas, Data Analysis. Retail sales figures for the MSA and the State are as follows: State of Year MSA Arkansas 2000 $3,526,791,000 $28,488,033,000 2001 3,806,422,000 29,652,693,000 2002 3,841,326,000 29,269,775,000 2003 3,968,812,000 29,920,716,000 2004 4,610,051,000 31,463,983,000 2005 5,287,158,000 34,290,412,000 2006 7,251,810,000 38,843,312,000 2007 8,250,140,000 43,504,752,000 2008 8,291,415,000 43,820,789,000 20091" 5,527,678,000 35,498,326,000 2010(i) 6,133,564,000 35,247,629,000 2011(') 7,236,224,000 42,160,822,000 (1) Does not include McDonald County, Missouri. Source: Demographics USA for years through 2008; Neilson Consumer Buying Power for 2009-2011. 10 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 2000 $432,951,171 $145,147,891 $578,099,062 2001 486,853,822 155,794,579 642,648,401 2002 530,235,135 158,778,031 689,013,166 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 Source: Washington County Tax Assessor's Office. The assessed value represents 20% of the appraised value of property. Building permits issued by: the City(i) are shown below for the years indicated: 2007 2008 2009 2010 2011 Residential Building 593 414 281 256 273 Permits Commercial Building 59 57 14 16 19 Permits Value of All Building Permits $227,667,201 $127,477,937 $70,365,173 $ 79,103,682 $ 81,146,187 (1) Does not include building activity of the University of Arkansas, school permits and additions/alterations to existing structures. 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 2000 2.9% 4.2% 2001 3.0 4.7 2002 3.3 5.3 2003 3.7 5.8 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* 4.9 6.5 * September, 2012 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 2012 of approximately 24,500. On the Fayetteville campus, the University employs approximately 5,000 faculty, administrative, secretarial, clerical and maintenance personnel in both full-time and part-time positions, making the University the largest employer in the City. 11 Other major employers in the City, their products or services and approximate number of employees are set forth below: Employer Washington Regional Med Center Washington Co. Government Fayetteville School District Veteran's Admin. Medical Superior Industries Wal-Mart #9149 (optical lab) City of Fayetteville Tyson Mexican Original Wal-Mart #144 Source: 2011 City of Fayetteville CAFR. Product or Service Employees Hospital 1,700 Government 1,525 Education 1,290 Hospital 1,200 Transportation equipment 880 Optical 760 Government 713 Food 602 Retail 507 DEFINITIONS OF CERTAIN TERMS The following are definitions of certain terms used in this Official Statement: "Act" means the Local Government Capital Improvement Revenue Bond Act of 1985, codified as Arkansas Code Annotated (1998 Repl. & Supp. 2011) Sections 14-164-401 et seq., as from time to time amended. "Additional Bonds" means Bonds in addition to the Series 2012 Bonds which are issued under the provisions of Section 213 of the Indenture. "Amendment 65" means Amendment No. 65 to the Constitution of Arkansas, approved by the voters of the State on November 4, 1986. "Annual Debt Service" means, with respect to all or any particular amount of Bonds or Subordinate Obligations, as the case may be, the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the amount of such payment which is provided from the proceeds of the sale of the Bonds or Subordinate Revenues or from sources other than Net Parking Revenues. "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. 5457 adopted by the City Council on November 15, 2011, which authorized the issuance of the Series 2012 Bonds pursuant to the Indenture. "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" means the Series 2012 Bonds and all Additional Bonds issued by the City pursuant to the Indenture. "Book -Entry System" means the book -entry system maintained by the Securities Depository and described in the Indenture. "Business Day" means any day other than (a) a Saturday or Sunday, (b) a day on which commercial banks in New York, New York, or the city in which the corporate trust office of the Trustee is located are authorized by law or executive order to close, or (c) a day on which the New York Stock Exchange or the Securities Depository are closed. 12 "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. "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. "Continuing Disclosure Agreement" means the Continuing Disclosure Agreement between the City and Simmons First Trust Company, N.A., as dissemination agent, dated the date of issuance and delivery of the Series 2012 Bonds, as originally executed and as amended from time to time in accordance with the terms thereof. "Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Series 2012 Bonds, including, but not limited to, underwriting discounts, fees and expenses, publication expenses, expenses of printing, reproducing, filing and recording documents, initial fees and charges of the Trustee and any Paying Agent, fees and expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement for the Series 2012 Bonds, costs of execution, transportation and safekeeping of the Series 2012 Bonds, and other costs, charges and fees incurred in connection with the foregoing. "Costs of Issuance Fund" means the fund by that name created and established in the Indenture. "Debt Service" means, with respect to all or any particular amount of Bonds or Subordinate Obligations, as the case may be, the total as of any particular date of computation and for any particular period of the scheduled amount of interest and amortization of principal payable on such Bonds or Subordinate Obligations, excluding amounts scheduled during such period which relate to principal which has been retired before the beginning of such period. "Debt Service Reserve Fund" means the fund by that name created and established in the Indenture. "Depository" means a national or state banking corporation or association (which may include the Trustee and any Paying Agent) which holds membership in the Federal Deposit Insurance Corporation. "Event of Default" means any event of default specified in Section 901 of the Indenture. "Fiscal Year" means the 12-month period used, at any time, by the City for accounting purposes, which may be the calendar year. "Fund" means a fund established by the Indenture. "Government Securities" means direct obligations of, or obligations fully guaranteed as to principal and interest by, the United States of America or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the United States of America (including obligations issued or held in book -entry form on the books of the U.S. Department of Treasury). "Holder" or "Bondholder" or "owner of the Bonds" means the registered owner of any Bond. "Indenture" means the Trust Indenture dated as of December 1, 2012, between the City and the Trustee, pursuant to which the Bonds are issued, and any amendments and supplements thereto. "Investment Securities" means, if and to the extent the same are at the time legal for investment of funds held under the Indenture: (a) Cash (insured at all times by the Federal Deposit Insurance Corporation); (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, including: (1) U.S. Export -Import Bank (Eximbank); 13 (2) Rural Economic Community Development Administration; (3) U.S. Maritime Administration; (4) Small Business Administration; (5) U.S. Department of Housing & Urban Development (PHAs); (6) Federal Housing Administration (FHA); and (7) Federal Financing Bank; (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: (1) Senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC); (2) Obligations of the Resolution Funding Corporation (REFCORP); and (3) Senior debt obligations of the Federal Home Loan Bank System; (e) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by the FDIC; (f) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "P-l" by Moody's and "A-l" or "A-1+" by S&P and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (g) Commercial paper which is rated at the time of purchase in the single highest classification, "P-1" by Moody's and "A-1+" by S&P and which matures not more than 270 calendar days after the date of purchase; (h) Investments in money market funds rated "AAAm" or "AAAm-G" or better by S&P; (i) 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 (1) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest rating category of Moody's or S&P or any successors thereto; or (2) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or Government Securities, 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; and (j) Municipal Obligations rated "Aaa/AAA" or general obligations of States with a rating of "A2/A" or higher by both Moody's and S&P. "Mayor" means the person holding the office and performing the duties of the Mayor of the City. "Moody's" means Moody's Investors Service, Inc., and any successor thereto. "Net Parking Revenues" means Parking Revenues less Operation and Maintenance Expenses. 14 "Operation and Maintenance Expenses" means all reasonable and necessary costs and expenses incurred in the operation, maintenance, repair and insuring of the City's parking meters, lots and other parking facilities which are properly accounted for such purposes under generally accepted accounting principles, including debt service on debt incurred to acquire parking equipment prior to the date of the Indenture. Such term does not include Debt Service on the Bonds and Subordinate Obligations or depreciation expense. "Original Purchaser" means the first purchaser(s) of a series of Bonds from the City. "Outstanding" means, when used with reference to the Bonds, as of any particular date, the aggregate of all Bonds authenticated and 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 VIII 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. "Parking Revenues" means all revenues attributable to parking fees, leases, rents, fines, charges and other revenues collected by the City with respect to its meters, lots and other parking facilities, and including revenues to be generated with respect to the Project and net revenues with respect to City management of parking facilities owned by third parties. "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. "Paying Agent" means any bank or trust company named by the City as the place at which the principal of and premium, if any, and interest on the Bonds are payable. "Person" means any natural person, firm, association, corporation, limited liability company, partnership, joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Project" means the betterments and improvements to be financed with the proceeds of the Series 2012 Bonds. "Project Costs" means, to the extent permitted by the Act or other applicable laws, with respect to the 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) 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 the Project and placing the same in operation; (b) all costs relating to injury and damage claims arising out of the acquisition, construction or equipping of the Project; (c) all other costs incurred in connection with, and properly allocable to, the acquisition, construction and equipping of the Project; and (d) amounts to pay or reimburse the City or any City fund for expenses of the City incident and properly allocable to such planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation of the Project. "Project Fund" means the fund by that name created and established in the Indenture. "Qualified Accountant" means an independent certified public accountant or firm of independent certified public accountants not in the regular employ of the City. "Rebate Fund" means the fund by that name created and established in the Indenture. 15 "Record Date" means, with respect to any interest payment date on the Bonds, the fifteenth day of the calendar month next preceding the month in which such interest payment date occurs. "Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized Representative in the form of Exhibit B to the Indenture. "Reserve Requirement" means, with respect to each series of Bonds, an amount equal to 50% of the maximum Annual Debt Service with respect to such series of Bonds. For all purposes of the Indenture, the Reserve Requirement may be satisfied by cash or by Investment Securities. "Revenue Fund" means the fund by that name created and established in the Indenture. "S&P" means Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc., and any successor thereto. "Securities Depository" means The Depository Trust Company, New York, New York, or its nominee, and its successors and assigns, or any other depository institution appointed by the City or the Trustee to act as depository for the Bonds in connection with the Book -Entry System. "Series 2012 Bonds" means the City's Parking Revenue Improvement Bonds, Series 2012, issued under and secured by the Indenture in the original aggregate principal amount of $6,220,000 for the purpose of financing the Project. "State" means the State of Arkansas. "Subordinate Obligations" means debt obligations of the City secured by a pledge of the Net Parking Revenues that is subordinate to the lien thereon securing the payment of the Bonds, as permitted by the provisions of Section 215 of the Indenture. "Supplemental Indenture" means any indenture supplemental to or amendatory of the Indenture. "Tax Regulatory Agreement" means that Tax Regulatory Agreement of the City relating to maintenance of the excludability of interest on the Series 2012 Bonds from gross income for federal income tax purposes, delivered in connection with the issuance of the Series 2012 Bonds. "Trustee" means the banking corporation or association designated as Trustee in the Indenture, and its successor or successors as such Trustee. The original Trustee is Simmons First Trust Company, N.A., Pie Bluff, Arkansas. "Trust Estate" means the property described in the granting clauses of the Indenture. SUMMARY OF THE INDENTURE The following statements are brief summaries of certain provisions of the Indenture. The statements do not purport to be complete, and reference is made to the Indenture, copies of which are available for examination at the offices of the Finance Director of the City, for a full statement thereof. Funds and Accounts. Net Parking Revenues are pledged by the Indenture to the payment of the principal of and interest on the Series 2012 Bonds. The following Funds have been created and established in connection with the Series 2012 Bonds: Funds Revenue Fund Bond Fund Debt Service Reserve Fund Project Fund Cost of Issuance Fund Rebate Fund The Revenue Fund shall be maintained by the City with the Depository of its choice. All other Funds shall be held by the Trustee, which shall hold and maintain said Funds in trust, for the use and benefit of the Bondholders and the City, but subject to the permitted applications contained in the Indenture. 16 Application of Parking Revenues. The application of Parking Revenues is as follows: (a) Revenue Fund. All Parking Revenues shall, as and when received, be deposited into the Revenue Fund. So long as there is no Event of Default or the occurrence or continuance of an event which with notice or lapse of time or both would constitute an Event of Default, the City may utilize moneys in the Revenue Fund for the payment of Operation and Maintenance Expenses, and may utilize any surplus in the Revenue Fund (after the payment of Operation and Maintenance Expenses and after making the transfers required by subsections (b) through (d) below) for any valid governmental purpose under State law. All moneys at any time in the Revenue Fund shall be applied on a monthly basis to 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. No later than the last day of each month, commencing no later than December 31, 2012, there shall be transferred from the Revenue Fund (i) into the Bond Fund, an amount equal to 1/6 of the interest on the Bonds due on the next interest payment date and an amount equal to 1/12 of the principal on the Bonds due on the next principal payment date (including mandatory sinking fund redemptions). Moneys in the Bond Fund shall be used solely for the purpose of paying Annual Debt Service on the Bonds or for redemption of 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 Parking Revenues 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 not later than last day of the next succeeding month. (c) Debt Service Reserve Fund. See the caption "SECURITY FOR THE SERIES 2012 BONDS — Debt Service Reserve" herein. (d) Rebate Fund. The Trustee shall establish and maintain, separate and apart from any other Funds 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. (e) Project Fund. A portion of the proceeds of the Series 2012 Bonds shall be deposited in the Project Fund. See the caption "SOURCES AND USES OF FUNDS" herein. Amounts in the Project Fund shall be expended only for the payment of Project Costs upon the submission of Requisitions by the City to the Trustee. The Trustee shall only make payments from the Project Fund pursuant to and in accordance with Requisitions. Within ninety (90) days following completion of the Project, the City shall deliver to the Trustee its Certificate stating that the Project is complete and the Trustee shall transfer the remaining moneys in the Project Fund (save and except moneys needed to satisfy unpaid Project Costs) to the Bond Fund for application to the retirement of the Series 2012 Bonds by redemption or purchase. See the caption "THE SERIES 2012 BONDS — Redemption" herein. (f) Cost of Issuance Fund. A portion of the proceeds of the Series 2012 Bonds shall be deposited to the credit of the Cost of Issuance Fund. The Trustee shall pay those Costs of Issuance as directed by the City pursuant to a Certificate delivered on a Closing Date. After all Costs of Issuance have been paid with respect to the Series 2012 Bonds, any remaining moneys in the Cost of Issuance Fund shall be transferred to the Bond Fund. Investment of Funds. At the direction of the City or absent such direction, the Trustee shall invest moneys in Funds held by the Trustee in Investment Securities with maturity or redemption dates consistent with the times at which said moneys will be required for the purposes provided in the Indenture; provided, however, the stated maturities of Investment Securities in the Debt Service Reserve Fund shall not exceed five years from the date of investment thereof. Moneys in separate Funds may be commingled for the purpose of investment. The City may invest moneys held in the Revenue Fund in any investment obligations permitted by Arkansas law. Obligations purchased as an investment of moneys in any Fund created by the Indenture shall be deemed at all times to be a part of such Fund, and any income or loss due to an investment thereof shall be charged to the respective Fund for which the investment was made except as otherwise provided in the Indenture. Valuation of Funds and Accounts. Investments in any Fund held by the Trustee shall be evaluated monthly and the determined value reported to the City. In determining the value of any Fund held by the Trustee under the 17 Indenture, the Trustee shall credit Investment Securities at the fair market value thereof based on accepted industry standards and from accepted industry providers. The Trustee shall sell or present for redemption any Investment Securities as necessary in order to provide money for the purpose of making any payment required under the Indenture, and the Trustee shall not be liable for any loss resulting from any such sale. Responsibility of Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of moneys made by it at the direction of the City. Tax Covenants. The City shall not use or permit the use of any Series 2012 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 Series 2012 Bond from gross income for federal income tax purposes. No part of the proceeds of the Series 2012 Bonds shall at any time be used, directly or indirectly, to acquire securities or obligations the acquisition of which would cause any of such Series 2012 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 Series 2012 Bonds remain Outstanding, it will comply with the provisions of the Tax Regulatory Agreement. Defeasance. Any Series 2012 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 Series 2012 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 Series 2012 Bonds or cause any of the Series 2012 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 Series 2012 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. 18 Acceleration. Upon the occurrence of an Event of Default, the Trustee may, and upon the written request of the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding shall, by notice in writing delivered to the City, declare the principal of all Bonds then Outstanding, together with any premium and the / interest 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. 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 pf any default or Event of Default under the Indenture, whether by the Trustee or by the Bondholders, shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. Rights and Remedies of Bondholders. No Holder of any Bond shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of the Indenture or for the execution of any trust thereof or for the appointment of a receiver or any other remedy thereunder, unless a default has occurred of which the Trustee has been notified as provided in the Indenture, or of which by the Indenture it is deemed to have notice, nor unless such default shall have become an Event of Default and the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding shall have made written request to the Trustee and shall have offered it reasonable opportunity either to proceed to exercise the powers granted or to institute such action, suit, or proceeding in its own name, nor unless also they have offered to the Trustee indemnity as provided in the Indenture nor unless the Trustee shall thereafter fail or refuse to exercise the powers granted, or to institute such action, suit, or proceeding in its own name; and such notification, request and offer of indemnity are declared in every such case at the option of the Trustee to be conditions precedent to the execution of the powers and trusts of the Indenture, and to any action or cause of action for the enforcement of the Indenture or for the appointment of a receiver or for any other remedy thereunder; it being understood and intended that no one or more Holders of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of the Indenture by action of the Holder or Holders or to enforce any right under the Indenture except in the manner therein provided, and that all proceedings at law or in equity shall be instituted, held and maintained in the manner therein provided for the equal benefit of the Holders of all Bonds Outstanding thereunder. Nothing in the Indenture contained shall, however, affect or impair the right of any Bondholders to enforce the payment of the principal of and premium, if any, and interest on any Bonds at and after the maturity thereof, or the obligation of the City to pay the principal of and premium, if any, and interest on each of the Bonds issued under the Indenture to the respective Holders thereof at the time and place in said Bonds expressed. Supplemental Indentures Not Requiring Consent of Bondholders. The City and the Trustee may, from time to time and at any time, without the consent of or notice to the Bondholders, enter into Supplemental Indentures as follows: (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; 19 (c) to add to the covenants and agreements of, and limitations and restrictions upon, the City in the Indenture other covenants, agreements, limitations and restrictions to be observed by the City which are not contrary to or inconsistent with the Indenture as theretofore in effect; (d) to confirm, as further assurance, any pledge under, and the subjection to any claim, lien or pledge created or to be created by, the Indenture, of the Trust Estate or of any other moneys, securities or funds; (e) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time amended; (f) to authorize the issuance and sale of one or more series of Additional Bonds; (g) to make such additions, deletions or modifications as may be necessary to assure compliance with Section 148(f) of the Code relating to required rebate to the United States or otherwise as may be necessary to assure exemption from federal income taxation of interest on the Bonds; or (h) to modify, alter, amend or supplement the Indenture in any other respect which is not materially adverse to the Bondholders and which does not involve a change described in clause (a), (b), (c), (d), (e) or (f) above and which, in the judgment of the Trustee, is not to the prejudice of the Trustee. Supplemental Indentures Requiring Consent of Bondholders. Subject to the terms and provisions contained in this paragraph, and not otherwise, the Holders of not less than 2/3 in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in the Indenture to the contrary notwithstanding, to consent to and approve the execution by the City and the Trustee of such indenture or indentures supplemental to the Indenture as shall be deemed necessary and desirable by the City for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in the Indenture or in any Supplemental Indenture; provided, however, that nothing contained in the Indenture shall permit or be construed as permitting (a) an extension of the maturity (or mandatory redemption date) of the principal of or the interest on any Bond issued thereunder, or (b) a reduction in the principal amount of or redemption premium or rate of interest on any Bond issued thereunder, or (c) the creation of any lien on the Trust Estate or any part thereof, except as expressly permitted in the Indenture, or (d) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture, or (f) depriving the Holder of any Bond then Outstanding of the lien created on the Trust Estate. If, at any time the City shall request the Trustee to enter into any Supplemental Indenture for any of the purposes described above, the Trustee shall, at the expense of the City, cause notice of the proposed execution of such Supplemental Indenture to be mailed by first class mail to each registered owner of the Bonds. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the principal office of the Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such Supplemental Indenture when consented to and approved as provided above. If the Holders of not less than 2/3 in aggregate principal amount of the Bonds Outstanding at the time of the execution of any such Supplemental Indenture shall have consented to and approved the execution thereof, no Holder of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from executing the same or from taking any action pursuant to the provisions thereof. SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT The City has entered into an undertaking in the form of the Continuing Disclosure Agreement as required by the Indenture for the benefit of the Beneficial Owners of the Series 2012 Bonds to cause certain financial information to be sent to certain information repositories annually and to cause notice to be sent to such information repositories of certain specified events, pursuant to the requirements of Section (b)(5)(i) of Rule 15c2-12 of the Securities Exchange Act of 1934, as amended (the "Rule"). The City has not failed to comply with any previous undertaking pursuant to the Rule. 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 and the Audited Financial Statements to the MSRB within 180 days of the completion of the City's fiscal year. The City is required 20 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. (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 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, of Material Events Disclosure to the MSRB in Prescribed Form. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Series 2012 Bonds or defeasance of any Series 2012 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 2012 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 2012 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 2012 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 2012 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, 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 2012 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 2012 Bonds holding a majority of the aggregate principal amount of the Series 2012 Bonds (excluding Series 2012 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 financial information and operating data (exclusive of Audited Financial Statements) of the type appearing in the table under the caption "SECURITY FOR THE SERIES 2012 BONDS" in the final Official Statement. "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. 21 "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 2012 Bonds (including persons holding Series 2012 Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2012 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., 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. "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 following events with respect to the Series 2012 Bonds: (i) Principal and interest payment delinquencies; (ii) Nonpayment -related defaults, if material; (iii) Unscheduled draws on debt service reserves reflecting financial difficulties; (iv) Unscheduled draws on credit enhancements reflecting financial difficulties; (v) Substitution of credit or liquidity providers, or their failure to perform; (vi) 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; (vii) Modifications to rights of security holders, if material; (viii) Bond calls, if material, and tender offers; (ix) Defeasances; (x) Release, substitution or sale of property securing repayment of the securities, if material; (xi) Rating changes; (xii) Bankruptcy, insolvency, receivership or similar event of the City; (xiii) 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; and (xiv) 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 2012 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 22 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 obligations 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. (the "Underwriter"), the Series 2012 Bonds are being purchased at a purchase price of $6,088,148.55 (representing the stated principal amount of the Series 2012 Bonds less net original issue discount of $23,001.45 and less an underwriting discount of $108,850.00) plus accrued interest from December 1, 2012 to the date of delivery of the Series 2012 Bonds. The bond purchase agreement provides that the Underwriter will purchase all of the Series 2012 Bonds if any are purchased. The obligation of the Underwriter to accept delivery of the Series 2012 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 2012 Bonds or the Parking Revenues 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 2012 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 2012 Bonds to the public, and may offer the Series 2012 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 2012 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 2012 Bonds is excluded from the 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 2012 Bonds. Failure to comply with such requirements could cause interest on the Series 2012 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2012 Bonds. The City has covenanted to comply with such requirements. Notwithstanding Bond Counsel's opinion that interest on the Series 2012 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). Bank Qualification. The City has represented that it does not reasonably anticipate issuing greater than $10,000,000 of tax-exempt obligations in calendar year 2012 (excluding certain private activity and refunding bonds) and that it has designated the Series 2012 Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. Accordingly, Bond Counsel is of the opinion that in the case of certain banks, thrift institutions or other financial institutions owning the Series 2012 Bonds, a deduction is allowed for 80% of that portion of such institutions' interest expense allocable to interest on the Series 2012 Bonds. Bond Counsel has expressed no opinion with respect to any deduction for federal income tax purposes of interest incurred or continued by a holder of the Series 2012 Bonds or a related person to purchase or carry the Series 2012 Bonds Original Issue Discount. The Series 2012 Bonds maturing June 1, 2032 and 2037 (collectively, 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. 23 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 2012 Bonds maturing June 1, 2013, 2014, 2015, 2016, 2017, 2018 and 2019 (collectively, 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 2012 Bonds. The accrual or receipt of interest on the Series 2012 Bonds may otherwise affect the federal income tax liability of the owners of the Series 2012 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 2012 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, and 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 2012 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 2012 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 2012 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 Tax Law. From time to time, there are legislative proposals in the Congress that, if enacted, could alter or amend the federal tax matters referred to above or adversely affect the market value of the Series 2012 Bonds. An example is the American Jobs Act of 2011, proposed by President Obama on September 12, 24 2011 and introduced in the United States Senate on September 13, 2011. If enacted as introduced, a provision of the American Jobs Act of 2011 would limit the amount of exclusions (including tax-exempt interest) and deductions available to certain high income taxpayers for taxable years after 2012, and as a result could affect the market price or marketability of the Series 2012 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 2012 Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Series 2012 Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2012 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 and regulatory authorities as of the date of issuance and delivery of the Series 2012 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 laws, regulations, rulings and judicial decisions, interest on the Series 2012 Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. LEGAL MATTERS Legal Opinions. Legal matters incident to the authorization and issuance of the Series 2012 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 2012 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 2012 Bonds or questioning or affecting the legality of the Series 2012 Bonds or the proceedings and authority under which the Series 2012 Bonds are to be issued, or questioning the right of the City to issue the Series 2012 Bonds. There is no action, suit or proceeding known to be pending or threatened, restraining or enjoining the City in any way which could have a material adverse effect on Parking Revenues or the City's ability to pay debt service with respect to the Series 2012 Bonds. 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 2012 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. 25 The execution and delivery of this Official Statement has been duly authorized by the City of Fayetteville, Arkansas. CITY O AYTTT LL , A NSAS Of By: /s/ Lioneld Jo n ayor 26 APPENDIX A Proposed Form of Bond Counsel Opinion Upon delivery of the Series 2012 Bonds in definitive form, Kutak Rock LLP, Little Rock, Arkansas, proposes to deliver its approving opinion in substantially the following form: December _, 2012 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 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 $6,220,000 Parking Revenue Improvement Bonds, Series 2012 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and Arkansas Code Annotated (1998 Repl. & Supp. 2011) §§14- 164-401 et seq. (as from time to time amended, the "Local Government Revenue Bond Act"), pursuant to Ordinance No. 5457 of the City, duly adopted and approved on November 15, 2011 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of December 1, 2012 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, 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 nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the Holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance and to enter into and perform its obligations under the Indenture, the valid adoption of the Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. A - 1 Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and the Local Government Revenue Bond Act, the City is empowered to adopt the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 4. The Bonds have been validly authorized, executed, issued and delivered by the City and represent valid and binding special obligations of the City. The principal, premium, if any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and pledge by the City to the Trustee of, the Net Parking Revenues (as defined in the Indenture). 5. The Net Parking Revenues 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 Net Parking Revenues. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated (2001 Repl. & 2011 Supp.) Section 4-9-109(d)(14), the pledge, assignment and security interest in the Net Parking Revenues securing the Bonds is and shall be prior to any judicial lien hereafter imposed on said Net Parking Revenues 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 said Net Parking Revenues. 6. Interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinion described in the preceding sentence assumes the accuracy of certain representations and compliance by the City with covenants designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended (the "Code'), that must be met subsequent to the issuance of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be included in gross income for federal income .tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with such requirements. The Bonds are "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, and, in the case of certain financial institutions (within the meaning of Section 265(b)(5) of the Code), a deduction is allowed for eighty percent (80%) of that portion of such financial institution's interest expense allocable to interest on 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, A-2 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 SUITE 2000 124 WEST CAPITOL AVENUE LITTLE ROCK, AR 72201 -3706 501-975-3000 FACSIMILE 501-975-3001 www.kutakrock.com December 19, 2012 Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 Ladies and Gentlemen: ATLANTA CHICAGO DENVER FAYETTEVILLE IRVINE KANSAS CITY LITTLE ROCK LOS ANGELES MINNEAPOLIS OKLAHOMA CITY OMAHA PHILADELPHIA RICHMOND SCOTTSDALE WASHINGTON WICHITA 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 $6,220,000 Parking Revenue Improvement Bonds, Series 2012 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and Arkansas Code Annotated (1998 Repl. & Supp, 2011) § § 14-164-401 et seq. (as from time to time amended, the "Local Government Revenue Bond Act"), pursuant to Ordinance No. 5457 of the City, duly adopted and approved on November 15, 2011 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of December 1, 2012 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, 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 nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the Holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance and to enter into and perform its obligations under the Indenture, the valid adoption of the 4817-6931-2786.1 KUTAK ROCK LLP Approving Opinion December 19, 2012 Page 2 Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and the Local Government Revenue Bond Act, the City is empowered to adopt the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 4. The Bonds have been validly authorized, executed, issued and delivered by the City and represent valid and binding special obligations of the City. The principal, premium, if any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and pledge by the City to the Trustee of, the Net Parking Revenues (as defined in the Indenture). 5. The Net Parking Revenues 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 Net Parking Revenues. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated .(2001 Repl. & 2011 Supp.) Section 4-9-109(d)(14), the pledge, assignment and security interest in the Net Parking Revenues securing the Bonds is and shall be prior to any judicial lien hereafter imposed on said Net Parking Revenues 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 said Net Parking Revenues. 6. Interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinion described in the preceding sentence assumes the accuracy of certain representations and compliance by the City with covenants designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended, that must be met subsequent to the issuance 4817-6931-2786.1 KUTAK ROCK LLP Approving Opinion December 19, 2012 Page 3 of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with such requirements. The Bonds are "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, and, in the case of certain financial institutions (within the meaning of Section 265(b)(5) of the Code), a deduction is allowed for eighty percent (80%) of that portion of such financial institution's interest expense allocable to interest on 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, yljz�< $M14 LL-f 4817-6931-2786.1 G, 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 K U TA K ROCK L L P ATLANTA CHICAGO SUITE 2000 DENVER 124 WEST CAPITOL AVENUE FAYETTEVILLE IRVINE LITTLE ROCK, AR 72201-3706 KANSAS CITY LITTLE ROCK 501-975-3000 LOSANGELES FACSIMILE 501-975-3001 MINNEAPOLIS OKLAHOMA CITY www.kutakrock.com OMAHA PHILADELPHIA RICHMOND SCOTTSDALE WASHINGTON WICHITA December 19, 2012 Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 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 December 11, 2012 (the "Bond Purchase Agreement"), by and between the City and Stephens Inc., as underwriter (the "Underwriter"); 4828-6002-8434.1 KUTAK ROCK LLP Supplemental Opinion December 19, 2012 Page 2 (b) An executed counterpart of the Continuing Disclosure Agreement dated December 19, 2012 (the "Disclosure Agreement"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as dissemination agent (the "Agent"); (c) An executed counterpart of the Tax Regulatory Agreement dated December 19, 2012 (the "Tax Regulatory Agreement"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"); and (d) Portions of the Official Statement dated December 11, 2012, with respect to the Bonds (the "Official Statement"), captioned "INTRODUCTORY STATEMENT," "THE SERIES 2012 BONDS," "SECURITY FOR THE SERIES 2012 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 Disclosure Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Agent, the Disclosure Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 3. The Tax Regulatory Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Trustee, the Tax Regulatory Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 4. The statements contained in the Official Statement under the Relevant Captions, insofar as such statements purport to summarize certain provisions of the Bonds, the Indenture and the Continuing Disclosure Agreement, or conclusions of law and legal opinions, are true, accurate and correct summaries thereof in all material respects and do not omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 4828-6002-8434.1 KUTAK ROCK LLP Supplemental Opinion December 19, 2012 Page 3 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, YQ tac ZC Vic L & 4828-6002-8434.1 KIT WILLIAMS FAYETTEVILLE CITY ATTORNEY JASON B. KELLEY • istant City Attorney fudy Housley layve V P 1 v Office Manager A R K A N s A S Phone (479) 575-8313 113 W. Mountain, Suite 302 FAX (479) 575-315 TDD (479) 521-1316 Fay etteville, AR 72701-6083 December 17, 2012 Simmons First Trust Company, N.A., as trustee Pine Bluff, Arkansas' Stephens Inca Fayetteville, Arkansas Kutak Rock LLP Little Rock, Arkansas Re: $6,220,000 City ' of Fayetteville, Arkansas Parking Revenue Improvement Bonds, Series 2012 Ladies and Gentlemen: I am the Fayetteville 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 $6,220,000 Parking Revenue Improvement Bonds, Series 2012 (the `Bonds"), which Bonds are being sold pursuant to the terms of a Bond -Purchase Agreement dated December 11, 2012 (the "Bond Purchase Agreement"), 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 OrdinanceNo. 5457 adopted by the City Council on November 15, 2011 (the "Authorizing Ordinance"), the Trust Indenture dated- as of December 1, ' 2012 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., as trustee (the "Trustee"), the Tax Regulatory Agreement dated December 19, 2012 (the "Tax Regulatory Agreement"), by and between the City and the Trustee, the Continuing Disclosure Agreement dated December 19, 2012 (the "Disclosure Agreement"), by and between the City and Simmons First Trust Company, N.A., as dissemination agent ;(the "Dissemination Agent"), -the Preliminary Official Statement dated December 5, 2012 (the "Preliminary Official Statement"), the Official Statement dated December 117 2012 (the "Official Statement") relating to the offering of the Bonds, and a closing certificate 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 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, to charge and collect the Parking Revenues,and'to execute and deliver the Bonds, the Indenture, the Tax Regulatory Agreement, the Disclosure Agreement and the Bond Purchase Agreement. 2. The City has duly approved the Preliminary Official Statement and the Official Statement. 3. The Authorizing Ordinance -has been duly adopted by the City by all action necessary under the Local Government Revenue Bond Act and the laws and Constitution of the State of Arkansas, and remains in full force and effect, 4. The Indenture, the Tax Regulatory Agreement, the Disclosure 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 Cityenforceable in accordance with their terms. 5. The information in the Official Statement under the captions "THE CITY," "THE PROJECT" 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. 2 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 ordinances setting the fees, rents, fines and charges generating the Parking Revenues, the Authorizing Ordinance, the Indenture, the Tax Regulatory Agreement, the Disclosure Agreement or the Bond Purchase Agreement and, to the best of my 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 Authorizing Ordinance and the execution and delivery of the Indenture, the Tax Regulatory Agreement, the Disclosure 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 attentionwhich` would lead me 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 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, IT WILLIAMS Fayetteville City Attorney cc: Mayor Jordan Sondra Smith, City Clerk 3 _ 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., a national banking association, as dissemination agent (the "Dissemination Agent"), in connection with the issuance of $6,220,000 City of Fayetteville, Arkansas Parking Revenue Bonds, Series 2012 (the "Bonds"). The Bonds are being issued pursuant to a Trust Indenture dated as of December 1, 2012 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., a national banking association, 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 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, 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., 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. 4818-7643-4187.4 "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 II. "Material Events Disclosure" means dissemination of a notice of a Material Event as set forth in Section 5. WSW' 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.emmd.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 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 31266V AS4. The final Official Statement relating to the Bonds is dated December 11, 2012 (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 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 City's fiscal year. 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 2 4818-7643-4187.4 _ 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 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 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 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 3 4818-7643-4187.4 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 its 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 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. 4 4818-7643-4187.4 Section 14. Past Compliance. The City represents that it has complied with the requirements of each continuing disclosure undertaking entered into by it pursuant to the Rule in connection with previous financings to which the Rule was applicable. 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 obligation 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. 4818-7643-4187.4 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: December 19, 2012 CITY OF FA TTEVILL KANSAS By ayor SIMMONS FIRST TRUST COMPANY, N.A., as Dissemination Agent B y: Title: 6 4818-7643-4187.4 EXHIBIT I ANNUAL FINANCIAL INFORMATION AND TIMING AND AUDITED FINANCIAL STATEMENTS "Annual Financial Information" means financial information and operating data exclusive of Audited Financial Statements as set forth below of the type appearing in the table under the caption "SECURITY FOR THE SERIES 2012 BONDS" in the Final Official Statement. 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 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. 4818-7643-4187.4 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. 4818-7643-4187.4 TRUSTEE'S CERTIFICATE Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee for $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds, Series 2012 (the "Bonds"), hereby certifies that: 1. Pursuant to the provisions of a Trust Indenture dated as of December 1, 2012 (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, Assistant Vice President, has duly authenticated the initial Bonds in the aggregate principal amount of $6,220,000, being in the form of seventeen (17) typewritten registered bonds, numbered R 12-1 through R 12-17, inclusive. 3. Each person who, on behalf of the Trustee, authenticated the initial Bonds or executed the Trust Indenture, the Tax Regulatory Agreement dated December 19, 2012, or the Continuing Disclosure Agreement dated December 19, 2012, 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 Glenda L. Dean Assistant Vice President Roy Ferrell Vice President 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: December 19, 2012 SIMMONS FIRST TRUST COMPANY, N.A. Pine Bluff, Arkansas By:— Nam _ -0C ent��/ Title: 4841-0219-5730.1 UNDERWRITER'S CERTIFICATE The undersigned officer of Stephens Inc., the Underwriter (defined below) for the $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds, Series 2012 (the "Bonds"), hereby makes the certifications set forth below in connection with the execution and delivery of the 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 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 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 cover of the Issuer's Official Statement dated December 11, 2012 (the "Official Statement"); (b) At the time the Underwriter agreed to purchase the Bonds, based upon the prevailing market conditions, the Underwriter had no reason to believe that any of the 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 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 Bonds, the first prices at which the Underwriter reasonably expected to sell 10% of each maturity of the 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 Bonds is 3.1490250%. For purposes of calculating the Yield on the Bonds, the 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 Bonds at an economic interest rate for the Issuer, 4836-5897-8322.1 and is, in the judgment of the undersigned, established at a funding level comparable to that found for obligations similar to the 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 Bonds 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: December 19, 2012 STEPHENS INC. By: Cate..- `i l 4---Q`' Title: 5" VI Cc ,''is 4'k4 2 4836-5897-8322.1 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 December 1, 2012, (the "Indenture"), by and between the City of Fayetteville, Arkansas (the "City") and the Trustee, with respect to the City's $6,220,000 Parking Revenue Improvement Bonds, Series 2012 (the "Bonds"), hereby certifies that: 1. The Trustee has received this date on behalf of the City, from Stephens Inc. (the "Purchaser"), $6,097,024.55, that being the agreed purchase price of the Bonds pursuant to the Bond Purchase Agreement dated December 11, 2012, between the City and the Purchaser. 2. The proceeds of the sale of the Bonds have been deposited or will be applied, in accordance with the written directions of the City, as follows: (a) $8,876.00, an amount equal to accrued interest on the Bonds, has been deposited into the Bond Fund created by the Indenture; (b) $190,316.25, an amount equal to the Reserve Requirement (as defined in the Indenture) with respect to the Bonds, has been deposited into the Debt Service Reserve Fund created by the Indenture; (c) $40,000.00 has been deposited by the Trustee into the Costs of Issuance Fund created by the Indenture to pay costs of issuance of the Bonds, including specifically those costs of issuance set forth in Exhibit F to the City's Closing Certificate and Request; and (d) The remaining $5,857,832.30 has been deposited by the Trustee into the Project Fund created by the Indenture. Dated: December 19, 2012 SIMMONS FIRST TRUST COMPANY, N.A., as Trustee B y: Title:j� 4843-0319-4642.1 UNDERWRITER'S RECEIPT The undersigned, on behalf of Stephens Inc., as purchaser (the "Purchaser") of $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds, Series 2012 (the "Bonds"), hereby acknowledges receipt of each and all of the Bonds, said Bonds being in the form of seventeen (17) 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 December 1, 2012, 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 December 11, 2012, 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: December 19, 2012 STEPHENS INC. By: .�.. �.. Title: S 4814-0060-5202.1 11 12-98 02 21?fit FROM DTC UMERRITIYG FDA MR Blanket Issuer Letter of Representations (ro be CoMpWtsd by kSWC City of Fayetteville, AR [No" of Imm] No�1�2 41998 Atten6n: Uudervriting DeparimeW — Eligibility Zte Depossito y Trwt company 55 Wages Stxret; 50th Fluor NewYcrrk, INY I0041.Om . Xadim and Geatlem= This kttxr sets forth our understanding with respect to afl issues (the 'Securities) tbst issuer shall request be made 4bk for deposit_by The Depository Tmst Compaq} ('DTC'). To induce DTIC to accept the Securities at Agible for deposit at DTC, and to ad is with D M Rules wi& resped to the Sectnirw% Issuer represents to DTC that I== will Comply v&h the uaemeab is DTC as be ammdcd fnnm ieq shed a Operational try nsry time to time. Note: SobedWe A crxaUlu' ttslemevu that DTC bebavw soctaste�r drscslbc DX, tine medsod Of C&Cfm book- tcrtida ]rhesci d"=ammmata. �Cmtmsd Lbt q , am3 THE DEPOSUORY TRUST COMPANY very tr*Ymw. FQP- M-6l 113 W. ts�S�� Fa etteville AR 72701 c (ce) tz�t 501-575-8330 tt�•xmax� SCREDUiE A, SkWU OFFEUNG DOCi MM"TT LANGUAGE DESCRIBING BOOK-E_NIBYONZY ISSUAINCE (Prepared by DTC.-bcackated matnial may be ale ont7 to eerta;.n �ssnesl I. The Depository Trost Company (-DTC'), New York Nx will ad 4s securitica depcssitx y for the wcur = (the -Securities'). The Semnities will be weed as Mu -z jwared seanities registered in the none of Cede dt Co. (DTC's parmership nominee). One ful"gistemd Security certi1caoe will be issued for (ewh issue 4 the Secu %es, [ewh] in the aggregate print* amarmt of avch issue, end wM be dcpmdred with DTC. (If, however, the aggregate priacq)aI amo=t of (any) issue esceeds SM miMon, cne cerdRcate -rill be issued with respect to ea6 &WO rnMion of principal amovt:t and an additiocal ontfficete will be isnma with rasped to any :wnaiuing principal amount of such tmsue. J ?. DTC is a )fanned-ptapose trust company otpniz d uacrt due New York Banldng Lew, a -bukmg or oa' wtthm the mc=iag of the New York Bmidng Law, a member of the Federal 33es m System a 'dewrmg corpeumb a" within the mewaing of the New York Ursiforrn Com=nercW Code, and a -clearing agency' registered pw=mt to the provisions of Serum 17A of the Smxritfes Fxriamp Ad of IM4. DTC halls secns4tles that ftt put 4ants (7participants-) deposit with DTC. DTC also iadiimiss the settlmaeot among Partidpa= of xcudtes t%msacdoo.% surd as tsartsftrs aria pledges, is dcpasitad 3ecvritiss thr000 elecxrossic ccmpured?zdd back -entry cbanges in Participants' aoacmu, thereby ebrofnatlug the need for physical movement of secrridw certificates. Direct Participants include aecurtfts brokers and dealers, banks, taut companies, clearing cc moons, and certain other arVaisxtiow. DTC is owned by a cumber of its Direct participants and by the New York Stock ExcbaW, L=, the Amwric= Stock Fvchange, Inc, and the Nadonal Assodaaion of SemuZes Dealers, Inc. Amem to the D'iC eystem is aiw sv i6l le to others such a* wcuurlries brokers and dealers, boak, md wur canrpensw that clear fa� or mafntaon a mmo" rcladiAnshsp wtdh a D=d Pit dther directly or indirm* (7adireet Participaatsr'). The Rules spplicebk to MC and ids Pudcipe is axe on file with the Sues and Fa=haagro C uaawim 3. Pw^chrasw of Sects ties under the DTC system must be made by or thmug� Direct Participants; which wW zocetve a czecht for the Sees ca DT'C's rrds. The vwnen* is rrest of eech actual purcltsst:r of each Security ("Beneficial OwnW) u in turn to be re+om&d on the Direct =d F`"ctpa, ' reoo:is. Bene icw Ownen will not receive w ten coafir .nova from DTC of their pus� bm Beneficial Own= are axtvd to ream" written conar=ntans p rv*hng demos of the = actbon, as well as periodte srasements of their hddings, frost the D vct or Indirect Puticipant 6mxxgb wbirh the BaneBcW Owner etmared into the transaction. Ttansfmss of'owaershlp initreats is the Securit et are to be accampli3hed by ezrios made oa the bola of Pan is act wg on behalf of Beaafkw Owaars. Beur$dal Ovw,aers will not recerea eer"cates resenting the ewaeraMp fntnreses In 5eclorMw' esregt M the event dser use of the book-enhy cyst= for the Securities is &Vcmtinued. 4_ To Effd subsequent ttmwfars, ell Securitim deported byPud #ants with DTC me: rcgstered is the name cf D'I'M parwership nominee, Cash to Co. The deposit of Securities wit}► DTC and their reglst� is the name of Cede & Co. effect no ehange in beneficial ownership. DTC has no k wwiOC* of the actual BeaaScW Owarss of the Sccurities, DT'C's records reflect only the idezlW of the Direct Participants to whose wmiats such Secuntars are cremated, which r=y or may not be the Beneficial OwDea. The )Fartidpastu will rermsdn responsible fat keeping account of their holdings on bcbelf of their c"bomera. S. Conveyance of notices and other cnmmunicati= by DTC to Direct Participants, by Di.-ect Partdpaatts to lndtre& Partiapwts, and by Direct Participants and Indb=t Paricdpants to Bene6ew Owners will be governed by arrangements among them, subject to any statutor? or re- -',dory requfrrsnents as may be in effect from tame to time. Ia Aedsmptim ncdces shaD be sent to Cede & Co. if loss than all of the Securities -min an ssw are being redearned. DTCY pmrticae u to determine by lot the amount of the interest of each Direct Partict?= is sch issue to be redea rx%Q - 7. Ne thcr DTC wr Cede & Co. will consent or vote witb respect to Securities. lioder its usual procs+rhrres, DTC malk an Om=bus Pmry to the 13mer as woe as posable after the teco, data The Omnibus Pr=y atsigm Cede & Co.'s maseatbag or vodig rights to hose Direct Pubdpavh to whom arcouuts the Secuaitiex tie credited or. the record date (icraafied in a listing attached to the Omnibus pm,Y). S. Pftclpal and tatrst payments cm the Securities win be made to DTC. DM pracbm is to cre tt Direct Pam' aeootmts an payable 4site in aeoordance with their resoeedve boldiags Jwwn an DTC-s record; unless DTC bas reason to boUave that it will not raoeiVe payment an payable &b-- by Partsdp=tx to BesaeficW Owners will be govmued by standing kmtructi= and cmv=nay pt ss is the ease with seauitks held for the aeon of cweomea in bearer form or registered in 4swW name,' and wiU be the respmsedfry of snxh Partidpomt and rat of DTC, the Agent, or the Issuer. subject to auy statutory or regulatory requirements as tansy be in effect from time to time. - Paymw=t ci principal and interest to DTC is the respaaabality of the L$uer or the Agent, dssbirtsetts :nt oa such prIments to Direct Putdp=h ah4 be the tespaariWity of DTC, and disbursement of nwh psyu>ents to the BetwBclal Owners sha11 be the reTws Mltty of Direct and In&rca Fvdc rsmts. (9. A BeaeSdal Ownrr siixR g1ve n dw to elect to bsye its Securities pruthased or tmdersd, dwmgh fts lWddpwt to the [TcnaevTcmarkeftSj Agaat, and shall effect dalive ry of such Sr.. by cumbg the Detect Partzcip a to transfer the Parficpanii; (merest in the Securities, = DTC-i records, to time g1 Agent Tbe mTnrBm t for pk=al &Ivuy of Scctaities in oo=Axt= with a &=and for ptuchase or a msndw=y pQsrhasc will be deemed satisftai when the o,� rigors is tbe Seaa2tes are traatd'rrred by Direct Pa rticiponts on DTC's moor&] 10. DTC may dlscoatzrzae Farlwatag Its Wrvicrs as sacnri dep0.mmy with =Spec# to tha SecurMM at any time by giving ramnahle notice to the Issuer or the Agienti Under such ci== tancc* is the eYent that a ra=essor secmeties depo4tory is not obtained, Socurity eeittficates are required to be printed and delhtred. 12-The Issuer rosy aecsda to diswatiuue use of the system of boob entry tra en through DTC (or a successor soandtim deposmary). In ti= rmut. Security cerdffeatm va be slated taut dadMned_ M The ia�in thin sectsca =t=eraing DTC and I)TCs book-.et� sysserr. has bem obtained frosa sources that the Issuer believes to be reliable, but the Issuer takers no respowiVllhy for the Zomna-Ly r REQUISITION City of Fayetteville, Arkansas Series 2012 Parking Revenue Improvement Bonds Date: Requisition No.: TO: Simmons First Trust Company, N.A., as Trustee Pursuant to the provisions of Section 502 of the Trust Indenture dated as of December 1, 2012 (the "Indenture"), by and between the City of Fayetteville, Arkansas (the "Issuer") and you, as trustee, you are authorized to make the following described payment directly to the Payee named below from the Project Fund: Name and Address of Payee: Amount of Payment: $ General Classification of the Expenditures: The undersigned hereby certifies that he is authorized to deliver this Requisition on behalf of the Issuer. The amount requested hereunder has not been the basis for any previous Requisition by the Issuer and is justly due and owing to the person(s) named herein as a proper payment or reimbursement of a Project Cost. 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 IN Authorized Representative 4810-9868-2898.1 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 KUTAK ROCK LLP SUITE 2000 124 WEST CAPITOL AVENUE LITTLE ROCK, AR 72201-3706 501-975-3000 FACSIMILE 501-975-3001 www.kutakrock.com April 9, 2013 CITY CI ERK) OFFIC13 $6,220,000 CITY OF FAYETTEVILLE, ARKANSAS PARKING REVENUE IMPROVEMENT BONDS SERIES 2012 TO THE ATTACHED DISTRIBUTION LIST: Ladies and Gentlemen: ATLANTA CHICAGO DENVER FAYETTEVILLE IRVINE KANSAS CITY LITTLE ROCK LOS ANGELES MINNEAPOLIS OKLAHOMA CITY OMAHA PHILADELPHIA RICHMOND SCOTTSDALE WASHINGTON WICHITA Enclosed is a copy of the final transcript with respect to the above -captioned matter. If you have any questions or require anything additional, please let me know. Sincerely, Zn M. Wilbourn js Enclosure 4849-5962-5491.1 NORTHWEST ARKANSAS OFFICE SUITE 400 234 EAST MILLSAP ROAD FAYETTEVILLE, ARKANSAS 12703-4009 ♦79-973-4200 GORDON M. WILBOURN g ordon,wi1 bo umQ kutakrOCk.wm (501)975-3101 City of Fayetteville, Arkansas Fayetteville, Arkansas QtNd5y57 KUTAK ROCK LLP ATLANTA CHIC AGO SUITE 2000 DENVER 124 WEST CAPITOL AVENUE FAYETT£VSLLEIRVINE LITTLE ROCK. AR 72201-3706 KANSAS CITY LITTLE ROCK 501-975-3000 LOS ANGELES FACSIMILE 501-975-3001 MINNEAPOLIS OKLAHOMA CITY www.kulakrock.CORI OMAHA PHILADELPHIA RICHMOND SCOTTSDALE WASHINGTON WICHITA December 19, 2012 Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 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 December l I , 2012 (the "Bond Purchase Agreement"), by and between the City and Stephens Inc., as underwriter (the "Underwriter"); 4828-5002-8434.1 KUTAK ROCK LLP Supplemental Opinion December 19, 2012 Page 2 (b) An executed counterpart of the Continuing Disclosure Agreement dated December 19, 2012 (the "Disclosure Agreement"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as dissemination agent (the "Agent"); (c) An executed counterpart of the Tax Regulatory Agreement dated December 19, 2012 (the "Tax Regulatory Agreement"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, as trustee (the "Trustee"), and (d) Portions of the Official Statement dated December 11, 2012, with respect to the Bonds (the "Official Statement"), captioned "INTRODUCTORY STATEMENT," "THE SERIES 2012 BONDS," "SECURITY FOR THE SERIES 2012 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 Disclosure Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Agent, the Disclosure Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 3. The Tax Regulatory Agreement has been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Trustee, the Tax Regulatory Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terms. 4. The statements contained in the Official Statement under the Relevant Captions, insofar as such statements purport to summarize certain provisions of the Bonds, the Indenture and the Continuing Disclosure Agreement, or conclusions of law and legal opinions, are true, accurate and correct summaries thereof in all material respects and do not omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 4828-6442-8434.1 KUTAK ROCK LLP Supplemental Opinion December 19, 2012 Page 3 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, NORTHWEST ARKANSAS OFFICE SUITE 400 234 EAST MILLSAP ROAD FAYETTEVILLE. ARKANSAS 727"-4000 470-073-4200 GORDON M. WILSOURN gordon.wliboum@kutakrock.com t5011 s7s-3t01 City of Fayetteville, Arkansas Fayetteville, Arkansas KUTAK ROCK LLP ATLANTA CHICAGO SUITE 2000 OENvER 124 WEST CAPITOL AVENUE PAYETTEVILLE IRVINE LITTLE ROCK. AR 72201-3700 KANSAS CITY LITTLE ROCK 501-875-3000 LOS ANGELES FACSIMILE 501-875-3001 MINNEAPOLIS OKLAHOMA CITY www.kutakrock.com OMANA PHILADELPHIA RICHMOND SCOTTSOALE WASHINGTON WICHITA December 19, 2012 Simmons First Trust Company, N.A., as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $6,220,000 City of Fayetteville, Arkansas Parking Revenue Improvement Bonds Series 2012 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 $6,220,000 Parking Revenue Improvement Bonds, Series 2012 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and Arkansas Code Annotated (1998 Repl. & Supp. 2011) §§14-164-401 et seq. (as from time to time amended, the "Local Government Revenue Bond Act"), pursuant to Ordinance No. 5457 of the City, duly adopted and approved on November 15, 2011 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of December 1, 2012 (the "Indenture"), by and between the City and Simmons First Trust Company, N.A., Pine Bluff, Arkansas, 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 nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the Holders -of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance and to enter into and perform its obligations under the Indenture, the valid adoption of the 4817-6931-2786.1 KUTAK ROCK LLP Approving Opinion December 19, 2012 Page 2 Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 65 and the Local Government Revenue Bond' Act, the City is empowered to adopt the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and is a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 4. The Bonds have been validly authorized, executed, issued and delivered by the City and represent valid and binding special obligations of the City. The principal, premium, if any, and interest on the Bonds shall be payable from, and shall be secured by an assignment and pledge by the City to the Trustee of, the Net Parking Revenues (as defined in the Indenture). 5. The Net Parking Revenues 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 Net Parking Revenues. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated (2001 Repl. & 2011 Supp.) Section 4-9-109(d)(14), the pledge, assignment and security interest in the Net Parking Revenues securing the Bonds is and shall be prior to any judicial lien hereafter imposed on said Net Parking Revenues 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 said Net Parking Revenues. 6. Interest on the Bonds is excluded from gross income for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. The opinion described in the preceding sentence assumes the accuracy of certain representations and compliance by the City with covenants designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended, that must be met subsequent to the issuance 4817-6931-2786.1 1:41br_'TAff= 0 :air Approving Opinion December 19, 2012 Page 3 of the Bonds. Failure to comply with such requirements could cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with such requirements. The Bonds are qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, and, in the case of certain financial institutions (within the meaning of Section 265(b)(5) of the Code), a deduction is allowed for eighty percent (80%) of that portion of such financial institution's interest expense allocable to interest on 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 thet 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, 4817-6431-2786.1