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ORDINANCE 5903
113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Ordinance: 5903 File Number: 2016-0413 LIBRARY IMPROVEMENT BONDS: Doc ID: 017122970005 Type: REL Kind: ORDINANCE Recorded: 10/24/2016 at 08:49:55 AM Fee Amt: $35.00 Page 1 of 5 Washington County, AR _ Kyle Sylvester Circuit Clerk File2016_00031291 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF THE CITY'S PUBLIC LIBRARY IMPROVEMENT BONDS FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF CAPITAL IMPROVEMENTS TO THE FAYETTEVILLE PUBLIC LIBRARY; 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, in compliance with the provisions of Amendment 30 to the Constitution of the State of Arkansas, as amended by Amendment 72 to the Constitution of the State of Arkansas (as amended, "Amendment 30"), and the Local Government Library Bond Act of 1993, codified as Arkansas Code Annotated (1998 Repl. & 2016 Supp.) Sections 14-142-201 et seq. (as from time to time amended, the "Act"), petitions were delivered to the City requesting the submission of questions to the qualified electors of the City on the levying of certain ad valorem taxes and the issuance of bonds secured thereby to finance a portion of the costs of acquiring, constructing and equipping various capital improvements to the Fayetteville Public Library, including, but not limited to, new buildings, parking decks, additions, annexes and other expansions and renovations (collectively, the "Project"); and WHEREAS, in compliance with the provisions of Amendment 30 and the Act and pursuant to the provisions of Ordinance No. 5876 of the City, adopted and approved on May 17, 2016 (the "Election Ordinance"), there was submitted to the qualified electors of the City a question regarding the levy of one and two -tenths (1.2) mill city tax on real and personal property within the City (the "Tax") to be pledged to an issue or issues of capital improvement bonds not to exceed $26,500,000 in aggregate principal amount for the purpose of financing the Project; and WHEREAS, at a special election held August 9, 2016, a majority of the qualified electors of the City voting on the question approved the levy of the Tax and the issuance of the capital improvement bonds; and Ordinance: 5903 File Number: 2016-0413 WHEREAS, as authorized under the provisions of Amendment 30 and the Act and as approved by the qualified electors of the City, the City has now determined to issue and sell its Library Improvement Bonds in aggregate principal amount not to exceed $26,500,000 (the "Bonds"), in order to provide for the funding of the Project; and WHEREAS, the City has made arrangements for the sale of the Bonds to Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), pursuant to the terms of a Bond Purchase Agreement between the City and the Underwriter (the "Bond Purchase Agreement") in substantially the form presented to and before this meeting; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 30 and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Library Improvement Bonds" (the "Bonds"). The Bonds shall be issued in one or more series in aggregate principal amount not to exceed Twenty -Six Million Five Hundred Thousand Dollars ($26,500,000) and shall mature not later than December 1, 2047, in the principal amounts and bearing 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 Bonds shall not be general obligations of the City, but shall be special obligations secured by and payable solely from proceeds of the Tax, the Special Tax Collections and other moneys, funds and amounts more specifically identified in the Trust Indenture (each as defined below). The proceeds of the Bonds will be utilized to finance the costs of the Project, to establish a debt service reserve for the Bonds or to purchase a surety bond or debt service reserve insurance policy for reserve purposes, if deemed economically beneficial, to pay a premium for bond insurance, if deemed economically beneficial, and to pay printing, underwriting, legal and other expenses incidental to the issuance of the Bonds. The Mayor, City Clerk and the City's Chief Financial Officer are hereby authorized to take all action necessary to accomplish the acquisition, construction and equipping of the Project. The Bonds shall be issued in the form and denominations, shall be dated, shall be numbered, shall mature, shall be subject to redemption prior to maturity, and shall contain such other terms, covenants and conditions, all as set forth in the Trust Indenture submitted to this meeting. The Mayor is hereby authorized and directed to execute and deliver the Bonds in one or more series, each series to be in substantially the form thereof contained in the Trust Indenture submitted to this meeting, and the City Clerk is hereby authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby authorized to confer with the Trustee, 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 2. In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, there are hereby pledged all of the receipts of the one and two -tenths (1.2) mill city tax on real and personal property within the City, together with all penalties and interest payable Ordinance: 5903 File Number: 2016-0413 with respect thereto (the "Tax"), approved by the electors of the City, as well as the City's allocable portion of the one-half of one percent (0.5%) statewide sales and use tax implemented pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79") which is intended to offset any decreases in collections of the Tax resulting from the homestead exemption implemented pursuant to Amendment 79 (the "Special Tax Collections"). The City Council covenants to levy the Tax in 2016 for collection in 2017, and to levy the Tax in subsequent years as provided under the laws of the State of Arkansas until such time as the Bonds are no longer outstanding or sufficient funds are on deposit with the Trustee to redeem the Bonds in full. The City covenants and agrees that all receipts from the Tax and the Special Tax Collections will be deposited and will be used solely as provided in the Trust Indenture (as defined below). In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, together with fees and costs incidental thereto, there are hereby appropriated out of the proceeds of the Tax and the Special Tax Collections the sums necessary to pay the same. 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 a Trust Indenture (the "Trust Indenture"), by and between the City and Simmons Bank, Pine Bluff, Arkansas, as trustee (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 the Tax receipts and the terms of the Bonds. The Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Trust Indenture in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Trust Indenture, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Trust Indenture in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 4. There is hereby authorized and approved a Preliminary Official Statement of the City, including the cover page and appendices attached thereto, relating to the Bonds. The Preliminary Official Statement is hereby "deemed final" by the City within the meaning of U.S. Securities and Exchange Commission Rule 15c2-12. The distribution of the Preliminary Official Statement is hereby approved. The Preliminary Official Statement, as amended to conform to the terms of the Bond Purchase Agreement, including Exhibit A thereto, and with such other changes and amendments as are mutually agreed to by the City and the Underwriter, is herein referred to as the "Official Statement," and the Mayor is hereby authorized to execute the Official Statement for and on behalf of the City. The Official Statement is hereby approved in substantially the form of the Preliminary Official Statement submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Official Statement in substantially the form of the Preliminary Official Statement submitted to this meeting, with such changes as shall be approved by such persons, the Mayor's execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Preliminary Official Statement is on file with the City Clerk and is available for inspection by any interested person.) 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 Ordinance: 5903 File Number.' 2016-0413 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 Tax 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. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider funding a debt service reserve be funded in conjunction with the issuance of the Bonds. Alternatively, the Underwriter has proposed that the City consider the purchase of a surety bond or a debt service reserve insurance policy with a portion of the proceeds of the Bonds. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a surety bond or a debt service reserve insurance policy with respect to the Bonds. Section 8. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider the purchase of a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of the principal of and interest on the Bonds when due. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a bond insurance policy with respect to the Bonds. Section 9. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things necessary to effect the issuance, sale, execution and delivery of the Bonds and to effect the execution and delivery of the Trust Indenture, the Bond Purchase Agreement, the Official Statement, the Continuing Disclosure Agreement and a Tax Regulatory Agreement relating to the tax exemption of interest on the Bonds, and to perform all of the obligations of the City under and pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on behalf of the City, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of such authority or to evidence the exercise thereof. Section 10. Kutak Rock LLP, Little Rock, Arkansas, is hereby appointed to act as Bond Counsel on behalf Ordinance: 5903 File Number.- 2016-0413 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 make reimbursement from the proceeds of the Bonds for preliminary costs of the Project and related expenses advanced by or on behalf of 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. Section 13. All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. T rr `�•.���,Q-�;.t.. �op �q Sri PASSED and APPROVED on 9/20/2016 ri 9 l'i A�'¢�"`� Attest: ii �' •. C] �" Sondra E. Smith, City Clerk T •e surer Washington County, AR I certify this instrument was filed on 1 0/24/2016 08:49:55 AM and recorded in Real Estate File Number 20 01 e/�31291 Kyle SylwestCirc 't Clerk by ._: City of Fayetteville, Arkansas 113 West Mountain Street - -- Fayetteville, AR 72701 -,.. N (479) 575-8323 l 'Id Text File File Number: 2016-0413 Agenda Date: 9/20/2016 Version: 1 Status: Passed In Control: City Council Meeting File Type: Ordinance Agenda Number: D. 1 LIBRARY IMPROVEMENT BONDS: AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF THE CITY'S PUBLIC LIBRARY IMPROVEMENT BONDS FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF CAPITAL IMPROVEMENTS TO THE FAYETTEVILLE PUBLIC LIBRARY; 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, in compliance with the provisions of Amendment 30 to the Constitution of the State of Arkansas, as amended by Amendment 72 to the Constitution of the State of Arkansas (as amended, "Amendment 30"), and the Local Government Library Bond Act of 1993, codified as Arkansas Code Annotated (1998 Repl. & 2016 Supp.) Sections 14-142-201 et seq. (as from time to time amended, the "Act"), petitions were delivered to the City requesting the submission of questions to the qualified electors of the City on the levying of certain ad valorem taxes and the issuance of bonds secured thereby to finance a portion of the costs of acquiring, constructing and equipping various capital improvements to the Fayetteville Public Library, including, but not limited to, new buildings, parking decks, additions, annexes and other expansions and renovations (collectively, the "Project"); and WHEREAS, in compliance with the provisions of Amendment 30 and the Act and pursuant to the provisions of Ordinance No. 5876 of the City, adopted and approved on May 17, 2016 (the "Election Ordinance"), there was submitted to the qualified electors of the City a question regarding the levy of one and two -tenths (1.2) mill city tax on real and personal property within the City (the "Tax") to be pledged to an issue or issues of capital improvement bonds not to exceed $26,500,000 in aggregate principal amount for the purpose of financing the Project; and WHEREAS, at a special election held August 9, 2016, a majority of the qualified electors of the City voting on the question approved the levy of the Tax and the issuance of the capital improvement bonds; and WHEREAS, as authorized under the provisions of Amendment 30 and the Act and as approved by the qualified electors of the City, the City has now determined to issue and sell its Library Improvement Bonds in aggregate principal amount not to exceed $26,500,000 (the "Bonds"), in order to provide for City of Fayetteville, Arkansas Page 1 Printed on 912112016 File Number.' 2016-0413 the funding of the Project; and WHEREAS, the City has made arrangements for the sale of the Bonds to Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), pursuant to the terms of a Bond Purchase Agreement between the City and the Underwriter (the "Bond Purchase Agreement") in substantially the form presented to and before this meeting; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 30 and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Library Improvement Bonds" (the "Bonds"). The Bonds shall be issued in one or more series in aggregate principal amount not to exceed Twenty -Six Million Five Hundred Thousand Dollars ($26,500,000) and shall mature not later than December 1, 2047, in the principal amounts and bearing 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 Bonds shall not be general obligations of the City, but shall be special obligations secured by and payable solely from proceeds of the Tax, the Special Tax Collections and other moneys, funds and amounts more specifically identified in the Trust Indenture (each as defined below). The proceeds of the Bonds will be utilized to finance the costs of the Project, to establish a debt service reserve for the Bonds or to purchase a surety bond or debt service reserve insurance policy for reserve purposes, if deemed economically beneficial, to pay a premium for bond insurance, if deemed economically beneficial, and to pay printing, underwriting, legal and other expenses incidental to the issuance of the Bonds. The Mayor, City Clerk and the City's Chief Financial Officer are hereby authorized to take all action necessary to accomplish the acquisition, construction and equipping of the Project. The Bonds shall be issued in the form and denominations, shall be dated, shall be numbered, shall mature, shall be subject to redemption prior to maturity, and shall contain such other terms, covenants and conditions, all as set forth in the Trust Indenture submitted to this meeting. The Mayor is hereby authorized and directed to execute and deliver the Bonds in one or more series, each series to be in substantially the form thereof contained in the Trust Indenture submitted to this meeting, and the City Clerk is hereby authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby authorized to confer with the Trustee, 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 2. In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, there are hereby pledged all of the receipts of the one and two -tenths (1.2) mill city tax on real and personal property within the City, together with all penalties and interest payable with respect thereto (the "Tax"), approved by the electors of the City, as well as the City's allocable portion of the one-half of one percent (0.5%) statewide sales and use tax implemented City of Fayetteville, Arkansas Page 2 Printed on 9/21/2016 File Number: 2016-0413 pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79") which is intended to offset any decreases in collections of the Tax resulting from the homestead exemption implemented pursuant to Amendment 79 (the "Special Tax Collections"). The City Council covenants to levy the Tax in 2016 for collection in 2017, and to levy the Tax in subsequent years as provided under the laws of the State of Arkansas until such time as the Bonds are no longer outstanding or sufficient funds are on deposit with the Trustee to redeem the Bonds in full. The City covenants and agrees that all receipts from the Tax and the Special Tax Collections will be deposited and will be used solely as provided in the Trust Indenture (as defined below). In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, together with fees and costs incidental thereto, there are hereby appropriated out of the proceeds of the Tax and the Special Tax Collections the sums necessary to pay the same. 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 a Trust Indenture (the "Trust Indenture"), by and between the City and Simmons Bank, Pine Bluff, Arkansas, as trustee (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 the Tax receipts and the terms of the Bonds. The Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Trust Indenture in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Trust Indenture, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Trust Indenture in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 4. There is hereby authorized and approved a Preliminary Official Statement of the City, including the cover page and appendices attached thereto, relating to the Bonds. The Preliminary Official Statement is hereby "deemed final" by the City within the meaning of U.S. Securities and Exchange Commission Rule 15c2-12. The distribution of the Preliminary Official Statement is hereby approved. The Preliminary Official Statement, as amended to conform to the terms of the Bond Purchase Agreement, including Exhibit A thereto, and with such other changes and amendments as are mutually agreed to by the City and the Underwriter, is herein referred to as the "Official Statement," and the Mayor is hereby authorized to execute the Official Statement for and on behalf of the City. The Official Statement is hereby approved in substantially the form of the Preliminary Official Statement submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Official Statement in substantially the form of the Preliminary Official Statement submitted to this meeting, with such changes as shall be approved by such persons, the Mayor's execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Preliminary Official Statement is on file with the City Clerk and is available for inspection by any interested person.) Section 5. In order to prescribe the terms and conditions upon which the Bonds are to be sold to the City of Fayetteville, Arkansas Page 3 Printed on 9/21/2016 File Number: 2016-0413 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 Tax 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. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider funding a debt service reserve be funded in conjunction with the issuance of the Bonds. Alternatively, the Underwriter has proposed that the City consider the purchase of a surety bond or a debt service reserve insurance policy with a portion of the proceeds of the Bonds. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a surety bond or a debt service reserve insurance policy with respect to the Bonds. Section 8. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider the purchase of a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of the principal of and interest on the Bonds when due. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a bond insurance policy with respect to the Bonds. Section 9. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things necessary to effect the issuance, sale, execution and delivery of the Bonds and to effect the execution and delivery of the Trust Indenture, the Bond Purchase Agreement, the Official Statement, the 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 City of Fayetteville, Arkansas Page 4 Printed on 912112016 File Number.' 2016-0413 thereto. The Mayor and the City Clerk are further authorized and directed, for and on behalf of the City, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of such authority or to evidence the exercise thereof. Section 10. 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 make reimbursement from the proceeds of the Bonds for preliminary costs of the Project and related expenses advanced by or on behalf of 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. Section 13. All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. City of Fayetteville, Arkansas Page 5 Printed on 912112016 Paul A. Becker Submitted By City of Fayetteville Staff Review Form 2016-0413 Legistar File ID 9/20/2016 City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item 9/2/2016 Chief Financial Officer / Finance & Internal Services Department Submitted Date Division / Department Action Recommendation: Approval of a Bond Ordinance Authorizing the Issuance and Sale of the City's Public Library Improvement Bonds for the Purpose of Financing a Portion of the Cost of Capital Improvements to the Fayetteville Public Library. Budget Impact: Account Number Fund Project Number Project Title Budgeted Item? NA Current Budget $ - Funds Obligated $ - Current Balance - Does item have a cost? No Item Cost�� Budget Adjustment Attached? No Budget Adjustment Remaining Budget Previous Ordinance or Resolution # Original Contract Number: Approval Date: Comments: CITY OF Al T1 ay ARKANSAS TO: Mayor Jordan THRU: Don Marr, Chief of Staff FROM: Paul A. Becker. Chief Financial Officer DATE: September 2, 2016 STAFF MEMO SUBJECT: Approval of a Bond Ordinance Authorizing the Issuance and Sale of the City's Public Library Improvement Bonds for the Purpose of Financing a Portion of the Cost of Capital Improvements to the Fayetteville Public Library. RECOMMENDATION: The Staff recommends approval of issuance and sale of the Fayetteville Public Library Improvement Bonds. BACKGROUND: At the request of citizen petitions delivered to the City, the City Council passed Ordinance Number 5876 which authorized a ballot question to be submitted to the voter regarding the approval of a levy in the amount of 1.2 mill of property taxes to provide for the principal and interest payments of a bond issue for the purposes of financing a portion of the cost of capital improvements at the Fayetteville Public Library. At the special election held on August 9, 2016, that question was approved by the voter. The City and City Public Library is now requesting a move forward with the funding plan for these important capital improvements. This Ordinance will authorize the actual issuance of these bonds to provide funds for the project described above. It is anticipated that the actual issuance of these bonds will be in 2017. This ordinance will authorize the City administration and Fayetteville Public Library to begin the financial planning and to prepare financial documents for this upcoming bond issue and subsequent improvement project. BUDGET/STAFF IMPACT: A special property tax as authorized by the voters will provide for the repayment of these bonds. Attachments: None. Mailing Address: 113 W. Mountain Street www_fayetteville-ar.gov Fayetteville, AR 72701 NORTHWEST ARKAKsAS Democrat On& AFFIDAVIT OF PUBLICATION I, Cathy Wiles, do solemnly swear that I am the Legal Clerk of the Northwest Arkansas Democrat- Gazette, printed and published in Washington and Benton County, Arkansas, and of bona fide circulation, that from my own personal knowledge and reference to the files of said publication, the advertisement of: CITY OF FAYETTEVILLE Ordinance 5903 Was inserted in the Regular Editions on SEPT. 29, 2016 Publication Cost: $848.90 &—U� �C� Cathy Wiles Subscribed and sworn to before me This day of_90 , 2016. ''� f' IlWary Public a — 1 My Commission Expires: t(�% �, ,p,NE Dq Ass . NOTARY' -.� PUBLIC ,,,#12401379 ; it P• A�cS',5,���•e; 1012A,�oti• �� GTON Co����. ,,JJ11111000� t-U — - f_1D Ordinance: 5903 File Number: 2016-0413 LIBRARY IMPROVEMENT BONDS: AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF THE CITY'S PUBLIC LIBRARY IMPROVEMENT BONDS FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF CAPITAL IMPROVEMENTS TO THE FAYETTEVILLE PUBLIC LIBRARY; 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, in compliance with the provisions of Amendment 30 to the Constitution of the State of Arkansas, as amended by Amendment 72 to the Constitution of the State of Arkansas (as amended, "Amendment 30"), and the Local Government Library Bond Act of 1993, codified as Arkansas Code Annotated (1998 Repl. & 2016 Supp.) Sections 14-142- 201 et seq. (as from time to time amended, the "Act"), petitions were delivered to the City requesting the submission of questions to the qualified electors of the City on the levying of certain ad valorem taxes and the issuance of bonds secured thereby to finance a portion of the costs of acquiring, constructing and equipping various capital improvements to the Fayetteville Public Library, including, but not limited to, new buildings, parking decks, additions, annexes and other expansions and renovations (collectively, the "Project"); and WHEREAS, in compliance with the provisions of Amendment 30 and the Act and pursuant to the provisions of Ordinance No. 5876 of the City, adopted and approved on May 17, 2016 (the "Election Ordinance"), there was submitted to the qualified electors of the City a question regarding the levy of one and two -tenths (1.2) mill city tax on real and personal property within the City (the "Tax") to be pledged to an issue or issues of capital improvement bonds not to exceed $26,500,000 in aggregate principal amount for the purpose of financing the Project; and WHEREAS, at a special election held August 9, 2016, a majority of the qualified electors of the City voting on the question approved the levy of the Tax and the issuance of the capital improvement bonds; and WHEREAS, as authorized under the provisions of Amendment 30 and the Act and as approved by the qualified electors of the City, the City has now determined to issue and sell its Library Improvement Bonds in aggregate principal amount not to exceed $26,500,000 (the "Bonds"), in order to provide for the funding of the Project; and WHEREAS, the City has made arrangements for the sale of the Bonds to Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), pursuant to the terms of a Bond Purchase Agreement between the City and the Underwriter (the "Bond Purchase Agreement") in substantially the form presented to and before this meeting; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 30 and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Library Improvement Bonds" (the "Bonds"). The Bonds shall be issued in one or more series in aggregate principal amount not to exceed Twenty -Six Million Five Hundred Thousand Dollars ($26,500,000) and shall mature not later than December 1, 2047, in the principal amounts and bearing 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 Bonds shall not be general obligations of the City, but shall be special obligations secured by and payable solely from proceeds of the Tax, the Special Tax Collections and other moneys, funds and amounts more specifically identified in the Trust Indenture (each as defined below). The proceeds of the Bonds will be utilized to finance the costs of the Project, to establish a debt service reserve for the Bonds or to purchase a surety bond or debt service reserve insurance policy for reserve purposes, if deemed economically beneficial, to pay a premium for bond insurance, if deemed economically beneficial, and to pay printing, underwriting, legal and other expenses incidental to the issuance of the Bonds. The Mayor, City Clerk and the City's Chief Financial Officer are hereby authorized to take all action necessary to accomplish the acquisition, construction and equipping of the Project. The Bonds shall be issued in the form 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 li set forth in the Trust Indenture submitted to this meeting. The Mayor is hereby authorized and directed to execute and deliver the Bonds in one or more series, each series to be in substantially the form thereof contained in the Trust Indenture submitted to this meeting, and the City Clerk is hereby authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby authorized to confer with the Trustee, 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 2. In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, there are hereby pledged all of the receipts of the one and two -tenths (1.2) mill city tax on real and personal property within the City, together with all penalties and interest payable with respect thereto (the "Tax"), approved by the electors of the City, as well as the City's allocable portion of the one-half of one percent (0.5%) statewide sales and use tax implemented pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79") which is intended to offset any decreases in collections of the Tax resulting from the homestead exemption implemented pursuant to Amendment 79 (the "Special Tax Collections"). The City Council covenants to levy the Tar in 2016 for collection in 2017, and to levy the Tax in subsequent years as provided under the laws of the State of Arkansas until such time as the Bonds are no longer outstanding or sufficient funds are on deposit with the Trustee to redeem the Bonds in full. The City covenants and agrees that all receipts from the Tax and the Special Tax Collections will be deposited and will be used solely as provided in the Trust Indenture (as defined below). In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, together with fees and costs incidental thereto, there are hereby appropriated out of the proceeds of the Tax and the Special Tax Collections the sums necessary to pay the same. 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 a Trust Indenture (the "Trust Indenture"), by and between the City and Simmons Bank, Pine Bluff, Arkansas, as trustee (the "Trustee"), and the City Clerk is hereby authorized and directed to execute and acknowledge the Trust Indenture and to affix the seat 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 the Tax receipts and the terms of the Bonds. The Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Trust Indenture in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Trust Indenture, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy ofthe 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 terns 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 terns 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 Tax 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. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider funding a debt service reserve be funded in conjunction with the issuance of the Bonds. Alternatively, the Underwriter has proposed that the City consider the purchase of a surety bond or a debt service reserve insurance policy with a portion of the proceeds of the Bonds. If deetned economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a surety bond or a debt service reserve insurance policy with respect to the Bonds. Section 8. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider the purchase of a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of the principal of and interest on the Bonds when due. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a bond insurance policy with respect to the Bonds. Section 9. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things necessary to effect the issuance, sale, execution and delivery of the Bonds and to effect the execution and delivery of the Trust Indenture, the Bond Purchase Agreement, the Official Statement, the Continuing Disclosure Agreement and a Tax Regulatory Agreement relating to the tax exemption of interest on the Bonds, and to perform all of the obligations of the City under and pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on behalf of the City, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of such authority or to evidence the exercise thereof. Section 10. 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 make reimbursement from the proceeds of the Bonds for preliminary costs of the Project and related expenses advanced by or on behalf of 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. Section 13, All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. PASSED and APPROVED on 9/20/2016 Approved: Lioneld Jordan, Mayor Attest Sondra E. Smith, City Clerk Treasurer 73867173 Sept. 30,2016 $26,500,000 CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BONDS SERIES 2017 TRANSCRIPT OF PROCEEDINGS Dated as of July 19, 2017 Prepared By: KUTAK ROCK LLP 124 West Capitol, Suite 2000 Little Rock, Arkansas 72201 4811-4400-26351 $26,500,000 CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BONDS SERIES 2017 CLOSING INDEX Proceedings and Certificates Related to Election Certificate of City of Fayetteville, Arkansas (the "City") as to Election Matters Exhibit A - Ordinance No. 5876 adopted May 17, 2016, calling a special election on the levying (i) of an additional one and one-half (1.5) mill city-wide property tax for operation and maintenance and (ii) a one and two -tenths (1.2) mill city-wide property tax to secure library improvement bonds 2 Exhibit B - Minutes of City Council meeting held May 17, 2016, reciting adoption of Ordinance No. 5876 3 Exhibit C - Proof of Publication of Ordinance No. 5876 in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on June 29, 2006 4 Exhibit D — Mayor's Proclamation of Election Results and Proof of Publication in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on September 2, 2016 Certificate of Washington County Board of Election Commissioners Ascertaining and Declaring Results of Special Election held August 9, 2016 6 Proceedings and Certificates Related to Bond Issuance Closing Certificate and Request of the City 7 Exhibit A - Ordinance No. 5903 adopted September 20, 2016, authorizing issuance of the Bonds and pledging receipts of a one and two -tenths (1.2) mill city-wide property tax 8 Exhibit B - Minutes of City Council meeting held September 20, 2016, reciting adoption of Ordinance No. 5903 9 4811-4400-2635.1 TAB Exhibit C - Proof of Publication of Ordinance No. 5903 in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on September 29, 2016 10 Exhibit D — Schedule of Bond Issuance Costs to be Paid at Closing 11 Form 8038-G and Proof of Mailing to Internal Revenue Service 12 Principal Documents Trust Indenture dated as of July 1, 2017, by and between the City and Simmons Bank, as trustee (the "Trustee") 13 Tax Regulatory Agreement dated July 19, 2017, by and between the City and the Trustee 14 Continuing Disclosure Agreement dated July 19, 2017, by and between the City and the Trustee 15 Copies of Bonds 16 Bond Purchase Agreement dated June 13, 2017, by and between the City and Stephens Inc., as underwriter (the "Underwriter") 17 Preliminary Official Statement 18 Official Statement 19 Opinions Approving Opinion of Bond Counsel 20 Supplemental Opinion of Bond Counsel 21 Opinion of City Attorney 22 Miscellaneous Direction to Washington County Treasurer 23 Trustee's Certificate 24 Underwriter's Certificate 25 Underwriter's Receipt 26 Trustee's Receipt and Certificate as to Application of Funds 27 2 4811-4400-2635.1 DTC Blanket Letter of Representations Standard & Poor's Rating Letter Form of Requisition TAB 28 29 30 4811-4400-2635.1 Transcripts delivered to: City of Fayetteville, Attn: Mr. Paul Becker (1 copy); Attn: Ms. Sondra Smith (I CD) Simmons Bank, Attn: Ms. Glenda Dean (1 original and 1CD) Stephens Inc., Attn: Mr, Bo Bittle (1 copy) Fayetteville City Attorney, Attn: Kit Williams, Esq. (I copy) Kutak Rock LLP (I original) 4 4811-4400-2635.1 CERTIFICATE OF CITY AS TO ELECTION MATTERS The undersigned Mayor and City Clerk of the City of Fayetteville, Arkansas, a duly organized municipality and political subdivision of the State of Arkansas (the "City"), do hereby certify and covenant as follows: 1. The undersigned are the duly elected, qualified and acting Mayor and City Clerk of the City, and as such officials have in their possession or have access to the official books and corporate records of the City. This Certificate is executed and delivered in connection with the issuance of the City's $26,500,000 Library Improvement Bonds, Series 2017 (the "Series 2017 Bonds"). 2. Attached hereto as Exhibit A is a true, complete, and correct copy of Ordinance No. 5876 (the "Election Ordinance"), duly adopted by City Council of the City, at a regular meeting, open to the public, held May 17, 2016, pursuant to which there was submitted to the qualified electors of the City (i) the question of raising by one and one-half (1.5) mills the then existing one (1.0) mill city tax on real and personal property within the City to be used for maintenance and operation of the Fayetteville Public Library (the "O&M Tax") and (ii) the question of levying a one and two -tenths (1.2) mill city tax on real and personal property within the City to be pledged to an issue or issues of bonds not to exceed $26,500,000 in aggregate principal amount to finance capital improvements to the Fayetteville Public Library, all under the authority of Amendment 30 to the Constitution of the State of Arkansas and Arkansas Code Annotated (1998 Repl. & Supp. 2016) Sections 14-142-201 et seq. (the "Act"). The Election Ordinance was considered by the City Council only after the filing of petitions with the City requesting such an election on each of the questions (the "Petitions"). The City Clerk determined that each of the Petitions contained the signatures of at least one hundred (100) taxpaying electors as required by Amendment 30 and the Act. Attached hereto as Exhibit B is a true, complete and correct copy of the minutes of a duly called regular meeting of the City Council, open to the public, held May 17, 2016, reciting the adoption of the Election Ordinance, as said minutes appear in the official records of the City; at the meeting a quorum was present and acted throughout; the Election Ordinance is in full force and effect and has not been altered, amended, or repealed as of the date hereof. No petition or petitions to refer the Election Ordinance to the people under Amendment No.7 to the Constitution of the State of Arkansas has been filed as of the date hereof and the City Council has not referred the Election Ordinance to the people for adoption or rejection. Attached hereto as Exhibit C is a true, complete, and correct copy of a publisher's affidavit showing publication of the Election Ordinance in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on May 31, 2016. 3. The meeting of the City Council referred to in paragraph 2 hereof was open to the public in compliance with the provisions of Section 25-19-106 of the Arkansas Code Annotated, as amended and supplemented. 4. The City has not adopted any by-laws or rules of procedure relating to the conduct of its meetings. 4825-5427-1819.1 5. Regular meetings of the City Council are held on the first and third Tuesdays of each month. 6. In the City the time for filing a referendum petition is fixed at 31 days after the publication of local measures passed by the City Council of the City. 7. Attached hereto as Exhibit D is a true, complete and correct copy of a Mayor's Proclamation of Election Results declaring the results of the Special Election and a true, complete, and correct copy of a publisher's affidavit showing publication of the Proclamation in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on September 2, 20 t 6. IN WITNESS WHEREOF, the undersigned have hereunto set their hands this 19th day of July, 2017. CITY OF FAYETTEVILLE, ARKANSAS .0 FAYETTEVILLE :' �— �y • 9� ��� Lio eld an, ayor l-ANS 1;,,' Gri O N�► By: Sondra Smith, City Clerk 2 4825-5427-1819.1 �7 113 West Mountain Street Fayetteville, AR 72701 n� (479) 575-8323 Ordinance: 5876 File Number: 2016-0235 SPECIAL ELECTION FOR FAYETTEVILLE PUBLIC LIBRARY: e AN ORDINANCE CALLING AND SETTING A DATE FOR A SPECIAL ELECTION ON THE QUESTIONS OF (1) THE RAISING BY ONE AND ONE-HALF (1.5) MILLS THE CURRENT ONE (1.0) MILL CITY TAX ON REAL AND PERSONAL PROPERTY SUPPORTING THE MAINTENANCE AND OPERATION OF FAYETTEVILLE PUBLIC LIBRARY, AND (2) THE IMPOSITION OF A ONE AND TWO -TENTHS (1.2) MILL CITY TAX ON REAL AND PERSONAL PROPERTY TO BE PLEDGED TO AN ISSUE OR ISSUES OF BONDS NOT TO EXCEED $26,500,000 IN PRINCIPAL AMOUNT TO FINANCE CAPITAL IMPROVEMENTS TO FAYETTEVILLE PUBLIC LIBRARY; PRESCRIBING OTHER MATTERS PERTAINING THERETO; AND DECLARING AN EMERGENCY WHEREAS, under the authority of Amendment 30 to the Constitution of the State of Arkansas, there have been submitted to the Mayor (i) a petition asking that the question of an increase by L5 mills of the current 1.0 mill City tax on real and personal property supporting maintenance and operation of Fayetteville Public Library be submitted to the electors of the City, and (ii) a petition asking that the question of the imposition of a L2 mill City tax on real and personal property to secure up to $26,500,000 in principal amount of bonds to finance capital improvements to Fayetteville Public Library be submitted to the electors of the City; and WHEREAS, the City Clerk has ascertained that the signatures of at least one hundred (100) taxpaying electors of the City are present on each petition; and WHEREAS, the purpose of this Ordinance is to call a special election on the questions described above in accordance with the provisions of Amendment 30 and Arkansas Code Annotated Sections7-11-201 et seq.; NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Fayetteville, Arkansas: Section 1, That there be, and there is hereby called, a special election to be held on Tuesday, August 9, 2016, at which election there shall be submitted to the qualified electors of the City the questions of (i) the increase by 1.5 mills of the current 1.0 mill City tax on real and personal Page 1 Printed on 5118116 File Number: 2016-0235 Ordinance: 5876 property supporting maintenance and operation of Fayetteville Public Library, and (ii) the imposition of a 1.2 mill City tax on real and personal property to secure up to $26,500,000 in principal amount of bonds to finance capital improvements to Fayetteville Public Library including, but not limited to, construction of new buildings, parking decks, additions, annexes and other expansion and renovation projects. Section 2. That the questions shall be placed on the ballot for the special election in substantially the following forms: Question One: Pursuant to Amendment 30 to the Constitution of the State of Arkansas, there is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the increase by 1.5 mills of the current 1.0 mill City tax on real and personal property supporting maintenance and operation of Fayetteville Public Library. Vote on the question by placing an "X" in one of the squares following the question, either for or against: FOR raising by one and one-half (1.5) mills the current one (1.0) mill city tax on real and personal property to be used for maintenance and operation of Fayetteville Public Library, a public city library AGAINST raising by one and one-half (1.5) mills the current one (1.0) mill city tax on real and personal property to be used for maintenance and operation of Fayetteville Public Library, a public city library. Question Two: Pursuant to Amendment 30 to the Constitution of the State of Arkansas, there is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the imposition of a 1.2 mill City tax on real and personal property to secure up to $26,500,000 in principal amount of bonds to finance capital improvements to Fayetteville Public Library. Unless the increase by 1.5 mills of the City tax on real and personal property to be used for maintenance and operation of Fayetteville Public Library (Question 1 above) is also approved by the electors of the City, the 1.2 mill City tax on real and personal property to be pledged to capital improvement bonds will not be imposed and the bonds will not be issued by the City. Vote on the question by placing an "X" in one of the squares following the question, either for or against: FOR a one and two -tenths (1.2) mill city tax on real and personal property within the city to be pledged to an issue or issues of bonds not to exceed $26,500,000 in aggregate principal amount, to finance capital improvements to Fayetteville Public Library, a public city library, and to authorize the issuance of the bonds on such terms and conditions as shall be approved by the city. AGAINST a one and two -tenths (1.2) mill city tax on real and personal property within the city to be pledged to an issue or issues of bonds not to exceed $26,500,000 in aggregate principal amount, to finance capital improvements to Fayetteville Public Library, a public city library, and to authorize the Page 2 Printed on 5118116 File Number.' 20f6-0235 Ordinances 5876 issuance of the bonds on such terms and conditions as shall be approved by the city. Section 3. That the election shall be held and conducted and the vote canvassed and the results declared under the law and in the manner now provided for Arkansas municipal elections unless otherwise provided in Amendment 30, and only qualified voters of the City shall have the right to vote at the election. Section 4. That a copy of this Ordinance shall be given to the Washington County Clerk and the Washington County Board of Election Commissioners not later than June 7, 2016, so that the necessary election officials and supplies may be provided. Section 5. That the results of the special election shall be proclaimed by the Mayor, and his proclamation shall be published one time in a newspaper of general circulation within the City. The proclamation shall advise that the results as proclaimed shall be conclusive unless attacked in the Circuit Court of Washington County within thirty (30) days after the date of publication of the proclamation. Section 6. That the Mayor and the City Clerk, for and on behalf of the City, be, and they hereby are authorized and directed to do any and all things necessary to call and hold the special election as herein provided. Section 7. That all ordinances and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. Section 8. Emergency Clause. This millage election was long delayed by litigation against Washington Regional Medical Center and the City of Fayetteville contesting clear title of the property to be sold to the Fayetteville Public Library for possible use if Question 2 is approved by the voters. The Arkansas Court of Appeals unanimously affirmed Washington Regional's quiet title action on April 27, 2016, allowing this special election to proceed. In order to hold the special election on the preferred date of August 9, 2016, this ordinance needs to go into effect without delay. It is hereby ascertained and declared that there is a critical need to obtain additional sources of revenue to maintain and operate Fayetteville Public Library and to finance needed capital improvements thereto, all in order to promote and protect the health, safety and welfare of the inhabitants of the City. It is, therefore, declared that an emergency exists and this Ordinance being necessary for the immediate preservation of public peace, health and safety shall be in force and effect immediately from and after its passage. �W11111111, PASSED and APPROVED on 5/17/2016 �,�, ;• 60YC� �a iAYClIEVIllll.z)� Attest: j l/011111111W Sondra E. Smith, City Clerk Treasurer Page 3 Printed on 5118116 Alderman Adella Gray Ward 1 Position I Alderman Sarah Marsh Ward 1 Position 2 Alderman Mark Kinion Ward 2 Position 1 Alderman Matthew Petty Ward 2 Position 2 Mayor Lioneld Jordan City Attorney Kit Williams City Clerk Sondra E. Smith City of Fayetteville Arkansas City Council Meeting May 17, 2016 City Council Meeting Minutes May 17, 2016 Page 1 of 21 Alderman Justin Tennant Ward 3 Position 1 Alderman Martin W. Schoppmeyer, Jr Ward 3 Position 2 Alderman John La Tour Ward 4 Position 1 Alderman Alan T. Long Ward 4 Position 2 A meeting of the Fayetteville City Council was held on May 17, 2016 at 5:30 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 Adella Gray, Sarah Marsh, Mark Kinion, Matthew Petty, Justin Tennant, John La Tour, Alan Long, Mayor Lioneld Jordan, City Attorney Kit Williams, City Clerk Sondra Smith, Staff, Press, and Audience. Alderman Martin Schoppmeyer was absent. Pledge of Allegiance Mayor's Announcements, Proclamations and Recognitions: None City Council Meeting Presentations, Reports, and Discussion Items: None Agenda Additions: None Consent: Approval of the May 3, 2016 City Council Meeting Minutes, Approved 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www,fayetteville•ar.gov City Council Meeting Minutes May 17, 2016 Page 2 of 21 Microsoft Corporation Enterprise Agreement Renewal: A resolution to authorize a three year renewal of the Enterprise Agreement with Microsoft Corporation, through its authorized reseller SHI International Corporation, for software products in the amount of $137,200.00 per year plus applicable taxes, and to approve a contingency in the amount of $13,700,00 per year for additional software licenses as needed. Resolution 96-16 as recorded in the office of the City Clerk Animal Services Donation Revenue: A resolution to approve a budget adjustment in the amount of $81,602.00 representing donation revenue to Animal Services for the first quarter of 2016. Resolution 97-16 as recorded in the office of the City Clerk Alliance Pump & Mechanical, Inc.: A resolution to approve a change order to the contract with Alliance Pump & Mechanical, Inc. in the amount of $43,521.00 plus applicable taxes for additional repair services required to rebuild seven (7) gearboxes at the Noland Wastewater Treatment Plant. Resolution 98-16 as recorded in the office of the City Clerk Bid ff16-30 Central Laundry Equipment, Inc.: A resolution to award Bid 416-30 and authorize the purchase of four commercial washer extractors and five drying units from Central Laundry Equipment, Inc. of Ward, Arkansas in the amount of $65,130.00 plus applicable taxes for use by the Fire Department. Resolution 99-16 as recorded in the office of the City Clerk Braden Neighborhood Park: A resolution to approve a budget adjustment in the amount of $3,723.00 recognizing parkland dedication fees from the Northeast Quadrant to be used for a portion of improvements to and expansion of the playground at Braden Neighborhood Park. Resolution 100-16 as recorded in the office of the City Clerk Arkansas Department of Parks and Tourism's Outdoor Recreation Grant: A resolution to authorize acceptance of a 50150 matching grant from the Arkansas Department of Parks and Tourism's Outdoor Recreation Grant Program in the amount of $150,000.00 for the construction of playground and parking improvements at Wilson Park, and to approve a budget adjustment. Resolution 101-16 as recorded in the office of the City Clerk Parks and Recreation Department Donation Revenue: A resolution to approve a budget adjustment in the amount of $29,387.00 representing donation revenue to the Parks and Recreation Department. Resolution 102-16 as recorded in the office of the City Clerk 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 3 of 21 Recreational Trails Grant Application -Trail Replacement: A resolution to express the willingness of the City of Fayetteville to utilize Federal -Aid Recreational Trails funds and authorize application for a 20% local match grant through the Arkansas Recreational Trails Program in an amount up to $56,000.00 for the replacement of a section of the Razorback Regional Greenway from Maple Street to Frisco Avenue. Resolution 103-16 as recorded in the office of the City Clerk Transportation Alternatives Program - Mud Creek Trail Lighting: A resolution to express the willingness of the City of Fayetteville to utilize Federal -Aid Transportation Alternatives Program funds and authorize application for a 20% local match grant through the Arkansas Transportation Alternatives Program in an amount up to $500,000.00 for the installation of trail lighting along the Razorback Regional Greenway and the Mud Creek Trail from the Fulbright Expressway to Old Missouri Road. Resolution 104-16 as recorded in the office of the City Clerk Levi Storage Center, LLC Purchase for Cato Springs Trail: A resolution to approve the purchase of 1.5 acres of property for construction of the Cato Springs Trail from Levi Storage Center, LLC in the amount of $31,296,00, and to approve a project contingency in the amount of $3,129.60. Resolution 105-16 as recorded in the office of the City Clerk Home Team, LLC: A resolution to accept the donation of 1.5 acres of property from home team, LLC with the restriction that no development shall occur on the property for at least fifty (50) years. Resolution 106-16 as recorded in the office of the City Clerk Fayetteville Active Transportation Plan Map Amendments: A resolution to approve amendments to the Fayetteville Active Transportation Plan Map to add a connector trail between the Harnestring Creek Trail and the Shiloh Trail, to remove a paved trail from the Kessler Mountain Ridge, and to add a loop trail around the Regional Park. Resolution 107-16 as recorded in the office of the City Clerk Alderman Gray moved to accept the Consent Agenda as read. Alderman Marsh seconded the motion. Upon roll call the motion passed 7-0. Alderman Schoppmeyer was absent. Unfinished Business: Amend §72.58 Off -Street Parking Facilities; Rules and Rates: An ordinance to amend §72.58 Off -Street Parking Facilities; Rules and Rates (M) to limit the Mayor's authority to assign any city owned paid parking lots or on -street paid parking spaces within the Entertainment District or 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 4 of 21 the closure of city streets for the use of a permitted special event to not more than two (2) days per year without express approval of the City Council. This ordinance was left on the first reading at the February 16, 2016 City Council meeting. At the March 1, 2016 City Council meeting, this ordinance was left on the second reading and tabled to April 5, 2016 The ordinance was left on the second reading at the April 5, 2016 City Council meeting and tabled until the May 17, 2016 City Council meeting. City Attorney Kit Williams: The Ordinance Review Committee met and considered this a couple different times. We have some suggested changes, but they aren't prepared properly in the ordinance form yet. There is a request from the Ordinance Review Committee to postpone decision on this until June 21, 2016. Alderman Tennant: We want to make sure we have it in the right form. Alderman Tennant moved to table the ordinance to the June 21, 2016 City Council meeting. Alderman Long seconded the motion. Upon roll call the motion to table passed 7-0. Alderman Schoppmeyer was absent. This ordinance was tabled to the June 21, 2016 City Council meeting. VAC 16-5354 (1137 W. MLK Blvd./Arena VilIage): An ordinance to approve VAC 16-5354 submitted by Steve Fowler for property located at 1137 West Martin Luther King Boulevard to vacate portions of a utility easement. This ordinance was left on the first reading at the May 3, 2016 City Council meeting. Alderman Long 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 Schoppmeyer was absent. City Attorney Kit Williams read the ordinance. Jeremy Pate, Director of Development Services gave a brief description of the ordinance. Staff and the Planning Commission recommend approval. Alderman Kinion: I requested further information from Planning on this because I was concerned about the location. My concerns about where it was located and how it would impact the velocity of the runoff in this area, were answered. I would be happy to support this. Alderman Kinion moved to suspend the rules and go to the third and final reading. Alderman Marsh seconded the motion. Upon roll call the motion passed 7-0. Alderman Schoppmeyer was absent. City Attorney Kit Williams read the ordinance. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 5 of 21 Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed 7-0. Alderman Schoppmeyer was absent. Ordinance 5872 as recorded in the office of the City Clerk Amend Chapter 116: Door to Door Solicitation: An ordinance to Amend Chapter 116: Door to Door Solicitation of the Fayetteville Code by repealing §116.01, enacting a replacement §116.01 and by amending the definition of solicitor in § 116.02 (a) (4). This ordinance was left on the first reading at the May 3, 2016 City Council Meeting, Alderman Long 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 Schoppmeyer was absent. City Attorney Kit Williams read the ordinance. City Attorney Kit Williams: This was amended at the last meeting. I think it is in good form and I have heard no comments in my office about this. Alderman Tennant moved to suspend the rules and go to the third and final reading. Alderman Long seconded the motion. Upon roll call the motion passed 7-0. Alderman Schoppmeyer 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 Schoppmeyer was absent. Ordinance 5873 as recorded in the office of the City Clerk New Business: Falling Waters Appeal: An ordinance to rezone that property described in Rezoning Petition RZN 16-5385 for approximately 35.31 acres on Dead Horse Mountain Road from R-A, Residential Agriculture to RSF-2, Residential Single Family, 2 units per acre subject to a Bill of Assurance limiting development to 51 homes. City Attorney Kit Williams read the ordinance. City Attorney Kit Williams: Subsequent to drafting this ordinance, the Bill of Assurance was submitted that not only limited the number of homes to 51, but also restricting all of the construction traffic to Dead Horse Mountain Road. That's what the Bill of Assurance now says and this is what you will be considering. I will amend the title and the ordinance to say that. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 6 of 21 Mayor Jordan: The traffic won't be going through the neighborhood? City Attorney Kit Williams: The construction traffic will be limited to Dead Horse Mountain Road. When the other road is completed, then there will be traffic in both directions from the neighborhood to the north of this and possibly to Cherry Hills Drive. There won't be any traffic until there is a later development and that road is extended. Jeremy Pate, Director of Development Services gave a brief description of the ordinance. The Planning Commission voted 7-2 against the rezoning. Staff does not recommend approval. Robert Rhoads, Attorney Representing Buffington Homes: The biggest difference between this project from what you saw as a PZD and what you saw a year ago is the Bill of Assurance item specifically indicating that all of the construction traffic will go out Dead Horse Mountain Road. The reason this is significant is because most of the people that spoke against this project a year ago, it was primarily due to the construction traffic going through their neighborhoods. The developers at the time couldn't just snap their fingers and make that change on that particular project the way it was configured. It was a development in a different part of this overall property that they own. Developers heard what the people and City Council members had to say about traffic not going through the subdivision. This is a large change. I hope it will go a long way in receiving your support for this project. The Buffington people have met with neighbors, sent out a letter, and they are willing to meet with whoever wants to meet with them to discuss plans for the project. If the Buffington people develop this with what they currently have, it will be 17 versus the 51. They are still going to do the same infrastructure. The argument was made as to why we should allow this because the city will have to maintain the infrastructure. You are still going to have to maintain the infrastructure, but instead of having 51 homes that provides a tax basis to go towards the infrastructure, you are only going to have 17. Adjacent property is currently zoned and built out with twice as much density in some cases as what we are asking for. This property is compatible with what you have done before and what you are continuing to do on Huntsville Road. We do not consider this to be sprawl. There is a spreadsheet that is signed by one of the owners and it lays out the dollar amounts. I'm not talking about the price of the property. The purchase price of the property is not included in that spreadsheet. That is the amount of money that was used by the developers once they got their PZD granted at 2 per acre versus now at 1.4 per acre. As a result of that they purchased the property, put up substantial money, and a lot of other cost. That went into their desire to develop this piece of property through the PZD. They didn't develop it because of the recession. It was then changed from the PZD in a broad scale rezoning of all expired PZD's by your city staff and City Council to the R-A. I ask you to consider that they have made substantial steps while they had the right to develop it with the 2 homes per acre. When a landowner takes the steps of over a million dollars, it would be considered by the courts of Arkansas as substantial steps, then they still have rights greater than the R-A in this particular case. We are asking you to let us develop this as it currently sits before you with the Bill of Assurance. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 7 of 21 Alderman Tennant: The construction traffic was my main hang up before. What communication will the developer be giving to the different contractors coming in and out stating they must use Dead Horse Mountain Road? Robert Rhoads: No contractors will go through the neighborhood. They will have front end meetings with all the people involved. They can do emails with all the contractors involved. It is very normal to have construction entrance and exit signs put up. If there any other suggestions, they will consider those as well. Alderman Tennant: I talked to some contractors. They said if they are told what they are supposed to do, they adhere to that. Clay Carlton, Owner gave a brief presentation of the overall layout of the concept plats. He stated it was his intent to maintain a green tree built along the backside of the lots. He believes by not disturbing the trees it will help with runoff and erosion. He believes they are compatible with the surrounding neighborhoods. He stated that they like to build to the market. Alderman La Tour: Thank you for being sensitive to market needs and building for people who like infill and for people who like larger lots. You are meeting the desires of the people. Mayor Jordan: You have spent a million dollars? Robert Rhoads: Actually, more than that. Clay Carlton: We will never get out of this project ahead. It has been a long eleven years. Mayor Jordan: I'm trying to be sure that it is on record that you have spent a million dollars. Clay Carlton: We have spent a lot more than that. Alderman Gray: I believe the spreadsheet said $3.5 million. Is that correct? Clay Carlton stated that was correct. He spoke about all the cost involved to date. Alderman Gray: What year did you buy the property? Clay Carlton: In 2006. Alderman Gray: This $3.5 million is what you all have spent during the last 10 years? Clay Carlton: Plus the cost of the land. Alderman Gray: What was the cost of the land? Clay Carlton: $3 A million. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 8 of 21 Alderman Gray: $3.4 million in addition to the $3.5 million is what you all have invested? Clay Carlton: Yes and a little more. Alderman Gray: This is the reason why I hope that our City Council will consider allowing these developers to move forward with this project. City Attorney Kit Williams: I told the Planning Commission that the Unified Development Code must be construed in favor of the property owner and not in the favor of the city. I have said that for many years. In my research I noticed in one of the cases an issue that I had not been aware of. It is called the, Substantial Use Test. It has to do with a landowner getting a vested interest in the ability to develop their property. The case was out of West Helena and had to do with the building of a mobile home park. The Supreme Court has said that when someone makes a substantial investment into a project and it is in good faith, because it was legal when that individual was starting to do that, then they get a vested interest in being able to finish at least a portion of the project. This is very similar at what we are looking at here. I didn't realize it was that many millions that had been invested. It was expensive for them to bring the water underneath the White River. That was done in order to serve the PZD which had been approved. The ordinance allowed them to do the PZD and they were trying to do the infrastructure that was needed for the PZD. Then we went into the great recession and nobody was buying real estate. They couldn't go forward, but had to keep paying interest cost every year. This is a decision for the City Council to decide if they made a substantial investment to entitle them to at least some development of their property. When you look at the possible development of this property, R-A is very unlikely to be economically possible because you have to build a long street for very few lots. It is the same infrastructure for 51 lots. The City Council needs to consider if they made a substantial investment, was it done in good faith, and was it done during the time they had the right to do it. It was done in good faith. They do have some vested interest in this case. This particular proposal seems fairly reasonable. Alderman Marsh: How long before our PZD's expire? Jeremy Pate: Under our previous Planned Zoning District ordinance, the applicant set their own expiration date. The Council reviews the proposal and either approved or rejected it. Alderman Marsh: Do we know what the original term of this PZD was? Jeremy Pate: It was several years. It was to be built out over phases. I don't recall the exact dates. Alderman Marsh: We allowed the developer to set their own timeline for development and they were not able to fulfill their commitment within that time period based on changes in the market. It seems like it was the market preventing this development and not the city. City Attorney Kit Williams: You are absolutely correct. It is the market that prevented the development. The problem we run into and it is a very unusual situation that I haven't seen before. We changed the PZD ordinance. The PZD was a zoning decision that didn't last forever. It's 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 9 of 21 questionable in my mind why we ever did that. Every other zoning decision is permanent until it is rezoned. These expired and then a developer couldn't do anything. The reason there was a time limit is because at that point there was a combination of not only zoning, but development. Developments usually do have expiration times. If this had been a zoning decision that allowed them to build their development, they would have had to come back later and do another large scale development or preliminary plat, but they would still have the zoning. It's only because for that period of time we combined the two which we later discovered was not the right way to do it. We have changed that now and PZD's will be permanent, but they don't provide any development rights. Alderman Marsh: It seems like the applicant did have the opportunity to have a zoning change instead of filing for the initial PZD. They filed for the PZD and set their own terms as to when they could complete the development. They weren't able to meet those terms due to changes in the market. The city is just sticking with their agreement. Alderman Long: On the spreadsheet was a city required water pressure study that cost some money. Was that a requirement by the city? Jeremy Pate: I don't know the answer without doing some research. City Attorney Kit Williams: I imagine that was tied to the reason that they eventually had to go and drill underneath the White River in order to get the water over there. There were several developers that got together and paid to get the water line over. Alderman La Tour: History gives us a good perspective of what is going on, but I don't think history should govern our decision tonight. We have developers with close to $8 million invested. It is unconscionable to make them maintain that investment and not allow them to go forward with their investment. I believe what they are proposing is a very modest development. I'm strongly in support of it. Jay Ray, 2050 South Cherry Hills Drive stated Dead Horse Mountain Road floods about five to six times a year. He voiced his concerns about flooding in the area. He spoke in opposition of the ordinance. Jim Lilly, 1863 South Cherry Hills Drive stated his concerns about flooding on Dead Horse Mountain Road. He voiced his concerns about the construction traffic and safety. He spoke in opposition of the ordinance. Kasey Weathers, 2080 South Pumpkin Ridge Drive stated he opposed it the first time, but agrees that the subdivision as platted the second time around is the better of the two evils. He voiced his concerns about flooding and traffic. Helen Carlton, spouse to Clay Carlton. She stated when the real estate market crashed in 2008 it put a stop to all the hard work and dreams of the community. She stated they tread water to stay afloat and do the right thing, instead of leaving a graveyard of half developed land like so many 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 10 of 21 other developers did back then. She stated they worked hard and did the right thing to continue to pay the bank. She asked for City Council's support of the project. Larry Altman, 2059 South Cherry Hills Drive stated he would like to know why the developer had not built any homes since others had been built in the last ten years. He believes City Plan 2030 provides a great vision for the future of Fayetteville and wants city leaders to follow the plan. Karen Mathes, 3848 Spyglass Hill Drive stated her concerns about the West Fork of the White River being an impaired waterway. She believes that the development will have an impact on the river. Jeane Stutzman, 3970 Spyglass Hill Drive stated she is not opposed to the owners developing as it is currently zoned, but doesn't believes the additional houses are in the best interest of the neighborhood. She voiced her concerns about traffic. Wanda Altman, 2059 South Cherry Hills Drive stated she doesn't believe the case in West Helena is the same as what is occurring with this development. She stated other homes have been built for years in that area. She stated the land should be protected under the City Plan 2030. Diane Watters, 2032 Pumpkin Ridge Drive stated there had been a lot of discussion about money invested, but she wanted to know what price is put on environment, beauty, and animals. She spoke in opposition of the ordinance. Pierce Osborne, 540 Crest Drive stated that no one wants a project built beside them. He doesn't believe it is right that the city approved the project at one point and have now changed the rules. He spoke in favor of the ordinance. Alderman Gray: I agree with Mr. Osborne. We have changed the rules in the middle of the game. I hope we think really hard about not allowing these developers to develop. We know that hill is going to be developed and this plan that they have brought forward is a reasonable plan. Maybe you prefer to have one house per 2 acres. If it is not financially feasible, we can't ask developers to do that. I hope you will think very hard about what we are saying to developers who want to develop in Fayetteville. We can't ask these men who have this money invested to let that beautiful hill sit there so we can all enjoy it. The city bought Kessler Mountain, but we can't buy every mountain around town. Alderman Marsh: I can't support this plan. The developers are making a good faith effort to try to do better in order to recoup their investment. As a person who did lose a lot in the recession, I have a lot of empathy for them. However, we have a commitment to our city with the 2030 City Plan. This development is very contrary to the principles that are in that plan. Our Planning Commission and staff have both recommended denial of this request and they did so with very good reason. We have not resolved the flooding concerns. This sets a dangerous precedent to future development in this area. Alderman Petty: My main concern is the cost of the infrastructure and I appreciate Mr. Rhoads remarks about mitigating some of those by building more homes. I am sensitive to staff s 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 11 of 21 comments that they made to the Planning Commission that this is on the edge of town and the first step to stopping development on the edge and making things more compact is to stop letting more development happen on the edge. I think there are meaningful improvements that have been made since last time. It does give me pause, even though I would normally default without thinking about it too hard voting against this. I am concerned about the water quality issues. It would make it easier for me to vote yes if there was a commitment in writing to low impact development water quality treatment. Mayor Jordan: That is a good point. The City Attorney wrote a memo that said, "The very unusual circumstance of the Falling Waters PZD approval coupled with the costs to bore under the White River to bring water/sewer to the development could trigger vested interests in development rights for the property. Refusing to allow any economically feasible development on any of the Falling Waters' forested hillside property might be found to be an unconstitutional deprivation of preexisting use rights." Those are good points you need to remember as well. Alderman Gray moved to suspend the rules and go to the second reading. Alderman La Tour seconded the motion. Upon roll call the motion failed 5-2. Alderman La Tour, Long, Gray, Marsh and Tennant voting yes. Alderman Kinion and Petty voting no. Alderman Schoppmeyer was absent. This ordinance was left on the First Reading U.S. Geological Survey Joint Funding Agreement: An ordinance to waive the requirements of formal competitive bidding and authorize a Joint Funding Agreement with the U.S. Geological Survey for stream gauge operation and maintenance and water quality sampling and monitoring at various locations in the City of Fayetteville for 2016 with the amount paid by the city not to exceed $61,721.00, City Attorney Kit Williams read the ordinance. Chris Brown, City Engineer gave a brief description of the ordinance. Alderman Kinion: This has gone before the Water & Sewer Committee. We support this and bring it forward. We are talking about water quality. We are trying to establish good base lines as we move forward with our arguments in front of the ADEQ regarding the sediment and pollution load and the activity that may establish standards as we move forward. It's very important we get this data that we can use to justify our arguments. City Attorney Kit Williams stated he wanted to amend the wording of the ordinance due to newspaper publication cost. He proposed the ordinance to say, "attached to the Engineering Divisions agenda item." A discussion followed about the Attorney General's opinion of ordinances and exhibits being published to the newspaper. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 12 of 21 Alderman Kinion moved to amend the ordinance to say, attached to the Engineering Divisions agenda item. Alderman Marsh seconded the motion. Upon roll call the amendment passed 7-0. Alderman Schoppmeyer was absent. Alderman Petty: Mud Creek is one of the most polluted creeks in the state. It is because there is so much pavement around it. In the first hour during a rain event, the water entering Mud Creek is more polluted than sewage. We are going to have to take active steps to repair Mud Creek. I hope we come to some consensus in future budget discussions about this and pursue some extra grant opportunities. Alderman Kinion moved to suspend the rules and go to the second reading. Alderman Petty seconded the motion. Upon roll call the motion passed 7-0. Alderman Schoppmeyer was absent. City Attorney Kit Williams read the ordinance. Alderman Marsh moved to suspend the rules and go to the third and final reading. Alderman Kinion seconded the motion. Upon roll call the motion passed 7-0. Alderman Schoppmeyer 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 Schoppmeyer was absent. Ordinance 5874 as recorded in the office of the City Clerk Amend §92.31 Dangerous Animals and Enact §92.07 Inhumane Traps Prohibited: An ordinance to amend §92.31 Dangerous Animals to provide the Animal Services Division with additional options to declare an animal dangerous and allow the rehoming of a dangerous animal with the approval of the Animal Services Superintendent, and to enact a new §92.07 Inhumane Traps Prohibited. City Attorney Kit Williams read the ordinance. Justine Lentz, Animal Services Superintendent gave a brief description of the ordinance. Alderman Kinion: This has been to the Animal Services Advisory Committee and they wanted to bring it forward to City Council. Alderman La Tour: When talking about wild animals and not using inhumane treatment, would that include poisonous snakes? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 13 of 21 Justine Lentz: If you thought your life was in danger, I don't think anybody is going to write you a ticket for killing a snake. There are professional wildlife trappers that make their business in Northwest Arkansas that we can refer to people. Alderman Kinion moved to suspend the rules and go to the second reading. Alderman Long seconded the motion. Upon roll call the motion passed.7-0. Alderman Schoppmeyer was absent. City Attorney Kit Williams read the ordinance. Alderman Long moved to suspend the rules and go to the third and final reading. Alderman Tennant seconded the motion. Upon roll call the motion passed 7-0. Alderman Schoppmeyer 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 Schoppmeyer was absent. Ordinance 5875 as recorded in the office of the City Clerk Special Election for Fayetteville Public Library: An ordinance calling and setting a date for a special election on the questions of (1) the raising by one and one-half (1.5) mills the current one (1.0) mill city tax on real and personal property supporting the maintenance and operation of Fayetteville Public Library, and (2) the imposition of a one and two -tenths (1.2) mill city tax on real and personal property to be pledged to an issue or issues of bonds not to exceed $26,500,000 in principal amount to finance capital improvements to Fayetteville Public Library; prescribing other matters pertaining thereto; and declaring an emergency. City Attorney Kit Williams read the ordinance. Paul Becher, Chief Financial Officer gave a brief description of the ordinance. David Johnson, Executive Director for the Fayetteville Public Library: In 2015 we averaged 184 people an hour coming to the library. They are utilizing a full range of resources. We are no longer just a traditional library in the consumer mode where you come and check out materials. When you look at future population growth, our library is central to our quality of life. In order to continue to provide that quality to people, we need to grow in anticipation of the people that will be coming. Alderman La Tour: How do we arrive at the August 9, 2016 date? David Johnson explained that in order to have the money for 2017, the August 9, 2016 date would be needed for the special election. Alderman La Tour: If we had the election on November 8, 2016 it would be too late? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 14 of 21 David Johnson: Yes. The money would not be available for the 2017 budget year. Alderman La Tour: Could you amend your budgeting year and get it in there? David Johnson: We have already cut $1.5 million out of our budget over the past four years. We are running as lean as we can. We need those funds as quickly as we can have them. Alderman La Tour: You cut things that were non -essential services for the public? David Johnson: Yes. The hours of operation we held sacred. Over two years we have taken about $70,000 out of our book budget, we have taken money out of our facilities and maintenance, and taken funds out of our programming. Our staff went without a raise when city employees got a raise in 2015. We have done everything we can to cut and generate revenue wherever possible. Alderman La Tour: I applaud your efforts. The Court of Appeals unanimously affirmed the city's position in the lawsuit. Have any of the parties appealed to the State Supreme Court? City Attorney Kit Williams: The Stone heirs have lost all the way through this. We have had seven judges unanimously say that what the city and Washington Regional did was correct and the proper result. They asked for review to the Arkansas Supreme Court. We replied to that, as has Washington Regional. We do not believe there is any merit in their appeal. The Arkansas Supreme Court has yet to make a final decision on that review. Alderman La Tour: The millage that we are asking the voters to increase to finance the bond is to build buildings on land that we aren't sure we can acquire. David Johnson: We have an option for expansion on the Blair footprint. Our concern is disruption of operations. We have a plan if the city hospital property doesn't come our way. We still can expand and accommodate our needs. Alderman La Tour: My main problem with this proposal on August 9, 2016 is that I view it as voter suppression. Special elections have low voter turnout. If we had this at the general election we would have a much higher turnout. I would like to see this moved to a general election date. I don't like tax increases. City Attorney Kit Williams: There might be Council members that don't like this date. This election was not called by the Library Board of Trustees. It was called by the citizens of Fayetteville pursuant to Amendment 30. The citizens of Fayetteville are the ultimate deciders and they requested August 9, 2016 to be the special election. It is the duty of the City Council once the City Clerk has said that the petitions are sufficient and accurate to call the special election as requested by citizens. It is beyond our power to question the citizens who have lawfully petitioned for this special election for the millage increase on August 9, 2016. Alderman Long: If the library had to build on the existing footprint, would the budget look the same? 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www,fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 15 of 21 David Johnson: Yes. The $26 million that we are asking for, we will make all considerations to get it done within that budget. Anything in excess would be raised privately. We are looking at raising $23 million from private donations. Alderman Long: Do we have to do an emergency clause? City Attorney Kit Williams explained in order to make the August 9, 2016 election date, the ordinance should be in full force so that the County Clerk and Election Commission can begin the process of printing the ballots. Alderman Long: Are we compelled to administratively pass an emergency clause? City Attorney Kit Williams: The problem with not approving it is that you would not be following the dictates of the petitioners who sought a special election of August 9, 2016. If the County Clerk and Election Commission weren't able to get the ballots printed in time, then we would be frustrating the petitioners. This is why I agreed to do an emergency clause. It would be improper not to do that so we can get the election held as requested. Alderman Long: We have to vote yes to an emergency clause? City Attorney Kit Williams: My opinion is that if you do not vote in favor of the emergency clause to make this effective immediately, you could be found to be frustrating the expressed desires of the petitioners who petitioned for the election. Gordon Wilbourn, Kutak Rock: It's not just for the convenience of the Election Commission and the County Clerk. It is mandated state law that you have to present them with the ordinance at least 60 days before the election. Without the emergency clause, the August 6, 2016 date doesn't work, which is written into the ordinance. Alderman Long: Thank you. I understand the emergency clause and the bond process. I wanted to be more certain for my constituents. Alderman La Tour: Maybe we should pass a tax and maybe the citizens want to vote for a tax. I would rather see it done on a general election date where we wouldn't incur the extra cost and have much more participation instead of deferring to a petition signed by 100 people. I would like to examine the petition. I presume I will find a lot of library friends on that petition. I doubt that is a cross section of our city. David Johnson: In terms of cost to the city of holding the election, the library has anonymous donors paying for the election. We will not be asking the city to pay for this election. Alderman La Tour: Could we have the names of those anonymous donors? City Attorney Kit Williams: The City Clerk has already checked all the signatures and she would be happy to give you copies of the petitions. It is the people of Arkansas that passed Amendment 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 16 of 21 3 0 that empowered 100 tax paying electors of the city to make that petition for the special election. They did not give the power to the City Council to change the will of the 100 tax paying electors. Alderman La Tour: I agree we can't change their date and what they have proposed, but we can vote it up or down. We the City Council for the city budget raised our taxes in 2015. Looks like these 100 people are fixing to raise our taxes in 2016. We have another group of folks probably coming back later this year or next year wanting to raise taxes again. I'm concerned we are balancing these budgets on the backs of our working people. City Attorney Kit Williams: We are required to do this by the constitution. You must do your duty to enact the ordinance that properly calls the election as requested by the petition. We all took an oath to follow the constitution of the State of Arkansas and obey its laws. Pat Besom, 15 North West Avenue doesn't believe there should be a special election. She stated that with the election being in the summer, it will bring a smaller percentage of the population expressing their views. A discussion followed about anonymous donors. Kyle Smith, 2801 West Dove stated that Fayetteville has had two record setting turnout special elections in the last two years. He doesn't believe there should be concern about the City of Fayetteville's ability to stand up for itself on the issue. Alderman Marsh moved to suspend the rules and go to the second reading. Alderman Gray seconded the motion. Upon roll call the motion passed 6-1. Alderman Long, Gray, Marsh, Kinion, Petty and Tennant voting yes. Alderman La Tour voting no. Alderman Schoppmeyer was absent. City Attorney Kit Williams read the ordinance. City Attorney Kit Williams: To prevent the filing of numerous petitions by 100 citizens seeking all kinds of millage, you better be a library, or fire and police pension fund because those are the ones that got the constitutional amendments passed. Alderman La Tour expressed his dissatisfaction with all three readings being read at one City Council meeting. Alderman Gray moved to suspend the rules and go to the third and final reading. Alderman Marsh seconded the motion. Upon roll call the motion passed 6-1. Alderman Long, Gray, Marsh, Kinion, Petty and Tennant voting yes. Alderman La Tour voting no. Alderman Schoppmeyer was absent. City Attorney Kit Williams read the ordinance. Alderman Marsh: We absolutely have to support our library. It is one of the most important institutions in our city. It is an impressive facility and ranks as one of the top in the nation. We 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 17 of 21 should hang on to that ranking for economic development and recruitment purposes. The library is there to serve everyone. Alderman La Tour: The library is important. I'm not saying I don't want a library. Having a special election in August is not a meaningful way to let citizens participate. Alderman Petty stated that in Fayetteville there has been a historically good turnout for special elections. He stated he would uphold the oath he took when he assumed the office of Alderman. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed 6-1. Alderman Long, Gray, Marsh, Kinion, Petty and Tennant voting yes. Alderman La Tour voting no. Alderman Schoppmeyer was absent. Alderman Long: Can we table this? I'm not prepared to vote for the emergency clause tonight. Looking at the numbers it may not pass. City Attorney Kit Williams: The emergency clause requires six alderman votes. The Mayor is not allowed to vote for the emergency clause. I believe it would be a dangerous thing to do with the need to have the ordinance to the County Clerk and Election Commission as quickly as possible. I don't know if there would be any possible bond ramifications if the emergency clause was not passed. I've never seen an emergency clause which is part of the ordinance, not at least voted on, on the night it was read and approved. Gordon Wilbourn: I have been to a lot of City Council meetings and I have never seen it tabled. One of the provisions directs the City Clerk to make it available to the Election Commission. If the ordinance is not effective; I don't know if the City Clerk can do that. If that's not done by June 7, 2016 then you can't make the August election date. City Attorney Kit Williams: Our next meeting is June 7, 2016. It would make it hard for the City Clerk to get the ordinance to the County Clerk and the Election Commission after they have already closed for the day. When dealing with bonds it is better to have a clean operation and not try to do something that has never been done before. It could risk an attack with $26 million at stake. That would be attractive to attorneys that like to sue. All of the major losses the city has suffered in the 1980's that we paid off in the 1990's, which included about $7 to $10 million in attorney fees, were on bond issues. My advice is that the emergency clause should be enacted tonight in order to avoid that kind of issue. Alderman Long: I have had so many people contact me and ask why this is an emergency. I'm still getting feedback from them and that is why I am not prepared to vote for an emergency clause tonight. Alderman La Tour: I asked Maylon Rice in our Agenda Session as to what exactly was the emergency. His answer to me was that we have to keep up with other libraries. I think of an emergency as someone going out of business or dying. To keep up with other libraries doesn't sound like an emergency to me. I want this to be on the general election. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 18 of 21 Alderman Petty: I want to make an appeal to Alderman Long. We are going to have several Alderman absent at the next meeting, which will make passing an emergency clause at that meeting impossible. We all get questions from our constituents that can be challenging to answer. In this case we have an answer that is iron clad. The Arkansas Constitution binds us to put this to a vote. We are confusing the issue of the emergency clause with the issue that needs to be decided in August. Alderman Long: I haven't gotten a real yes or no if we are required to vote for an emergency clause. I want this to go to the election. City Attorney Kit Williams gave a brief description of Amendment 30 and stated that an emergency clause should be passed. Alderman La Tour stated a bond issue can be passed anytime. He doesn't believe the ordinance is an emergency. Mayor Jordan: Kit, I have the authority to call a special meeting? City Attorney Kit Williams: Yes. If we have a special meeting it still requires the emergency clause to be passed or you are not complying with your duties under the constitution to refer this to the vote of the people. Alderman Long: Kit answered the question I was interested in and I am prepared to vote. Alderman Marsh moved to approve an Emergency Clause. Alderman Gray seconded the motion. Upon roll call the motion passed 6-1. Alderman Long, Gray, Marsh, Kinion, Petty and Tennant voting yes. Alderman La Tour voting no. Alderman Schoppmeyer was absent. Ordinance 5876 as recorded in the office of the City Clerk Economic Development Strategic Plan: A resolution to approve and adopt the Fayetteville First Economic Development Strategic Plan. Jeremy Pate, Director of Development Services gave a brief description of the resolution. Don Marr, Chief of Staff, Thank you to Dale and his team for the work they have done and the thousands of citizens that participated in the process. This is a five year plan. Dale will highlight items that we have significant amount of strategic priorities and action items to accomplish over that time period. We are extremely pleased with the plan they put together. Dale Boyette, Boyette Strategic Advisors thanked City Council for their participation in the plan. He believes it is a very realistic plan that can be implemented over the next five years. He presented a power point presentation on the Fayetteville First Economic Development Strategic Plan. Alderman Gray: Could you please discuss the tax climate. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 19 of 21 Dale Boyette: Arkansas is not a low tax state anymore. Arkansas is ranked 37th out of 50 states as the worst business tax climate. It surfaces as an issue across the board. The Tax Foundation report is what business and industry look at. It is an issue. Alderman Petty: If we think of our Economic Development approach as being a portfolio of strategies, the traditional way of doing things was to try and recruit big companies. If we are trying to arrange a diverse portfolio of strategies with recruiting or developing our own, how do we balance that and choose where we allocate our resources? Dale Boyette: This is a five year plan and the Fayetteville First plan hits on all of those things. Certainly, not ignoring manufacturing and your legacy manufactures, but having'them as a focus. It addresses the other sectors that are important to Fayetteville in moving forward. There are certain types of retail that Fayetteville needs to compete for and needs to attract. It is important to the people who live here and your overall economic development success. There are a lot of things already going on in the area of entrepreneurship and innovation in the private sector. It has to be supported and be a focus. As far as knowing where to put the resources, there will be an implementation plan associated with this document. There will have to be resources assigned to it. There will have to be further discussion among different parties to determine what the resources focus should be. As far as knowing exactly what percentage of them should be spent when, that is going to fluctuate over the next five years. What you do in 2016 may need to be adjusted in 2020. You have to look at this short term, but think about five years rather than the next six months. Jeff Amerine, Startup Junkie Consulting: This area is great and we attract the best and brightest from many different countries and states. If we give them a compelling reason to stay and create new enterprise and to build small business, we will go from being the third best place in the country to have small business and startup to being number one. When trying to prioritize resources and what to put money on, supporting our small businesses, our startups, our innovators and talent is where to put the emphasis. Two out of every three new jobs comes from small business and startups. I encourage you to take this great work that the Boyette group did and keep Fayetteville moving forward. Dale Boyette made a correction from an earlier statement. He stated Arkansas is 38thworst on the Tax Foundation report, not 37th. Alderman Gray: We are listed as number one on the best affordable city to live in. Talk to me about that. Dale Boyette: I need to look at the criteria for what determines the ranking. There all kinds of empirical data that are looked at for each of those surveys. I have not looked at that one to understand the data. It really doesn't make sense when you talk about the business cost and the tax cost and at the same it is the most affordable. The real issue is that the Tax Foundation ranks Arkansas 3 8t' and that is something companies looks at. Alderman Marsh: Please talk more about the retail sector. We need more clarification on the differentiation between the big box national retailers as opposed to more of an experiential retail. Consumer habits are changing. People are going online to do a lot of their shopping. What they 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 20 of 21 are looking for in a shopping experience is the pedestrian oriented experience of certain types of shopping centers. Dale Boyette: Those types of retail businesses require places to establish their business. There are places in Fayetteville to establish those types of businesses. When you look at Fayetteville as an outsider and you compare on the benchmarking side, you look at what you think might be missing. You then do a retail gap analysis and you see that retail specialty shops in some areas are missing. You would think there's an opportunity for a real significant art supply store in the art district off of Martin Luther King. An art supply store would create opportunity for artist to walk to that store, keep taxes here, create jobs, and provide a service to the artist entrepreneur. There is some opportunity on those types of businesses that aren't big box. There is opportunity for neighborhood type stores that are national chains. You have to look at redevelopment opportunities for the retail space for those types of boutique companies. Don Marr, Chief of Staff stated that decisions need to be made off of data and not from emotions. He spoke about the average income in the area. He spoke about continuing to support the legacy businesses and help them grow. He stated to continually improve the perception of being business friendly is needed. He believes the ability to train and develop people is important. Mayor Jordan thanked everyone for their work on the Economic Development Strategic Plan. He spoke about Fayetteville's rankings as fastest growing city in Arkansas, third best place in the United States to live in, first in most affordable city to live in, third best in the United States for startup businesses outside of the Silicon Valley, and best in Arkansas for environmental protection. He stated that the city is averaging two new businesses a day. He has a great deal of pride in the City of Fayetteville and considers all blessed to live here. Alderman Petty moved to approve the resolution. Alderman Marsh seconded the motion. Upon roll call the resolution passed 7-0. Alderman Schoppmeyer was absent. Resolution 108-16 as recorded in the office of the City Clerk Announcements: Don Marr, Chief of Staff went over a list of road construction projects in the City of Fayetteville. May 20, 2016 is National Bike to Work Day. Alderman Long: There will not be a Ward 4 meeting this month due to it falling on a holiday. June will be our next meeting. City Council Agenda Session Presentations: None 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www,fayetteville-ar.gov City Council Meeting Minutes May 17, 2016 Page 21 of 21 City Council Tour: None _ 9:20 p.m. J Mayor Sondra E. Smith, City Clerk Treasurer 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov NORTHWEST A.RKANsAs Democit f0an& Ct ROX I607. rAYET T E'vI':.LE. AR, 717011. 479.4"2.17,00 - F Y, 479-6951118 , 'M,`,.." WAG . 01' AFFIDAVIT OF PUBLICATION I, Karen Caler, do solemnly swear that I am the Legal Clerk of the Northwest Arkansas Democrat- Gazette, printed and published in Washington and Benton County, Arkansas, and of bona fide circulation, that from my own personal knowledge and reference to the files of said publication, the advertisement of: i CITY OF FAYETTEVILLE Ord. 5876 Was inserted in the Regular Editions on: May 26, 2016 Publication Cost: $426.40 i Karen Cale, Subscribed and sworn to before me This 31 day of q111'r2016. (��VV'J Notary Public My Commission Expires: CATHY WILES Arl(ansas • Benton County Notary Public - Commay 12397118 My Commission Expires Feb 20, 2024 **NOTE** Please do not pay from Affidavit Invoice will be sent. RECEIVED JUN 01 2016 CITY OF FAYETTEVILLE CITY CLERK'S OFFICE Ordinance:5876 File Number: 2016-0235 SPECIAL ELECTION FOR FAYETTEVILLE PUBLIC LIBRARY: AN ORDINANCE CALLING AND SETTING A DATE FOR A SPECIAL ELECTION ON THE QUESTIONS OF (1) THE RAISING BY ONE AND ONE- HALF (1.5) MILLS THE CURRENT ONE (1.0) MILL CITY TAX ON REAL AND PERSONAL PROPERTY SUPPORTING THE MAINTENANCE AND OPERATION OF FAYETTEVILLE PUBLIC LIBRARY, AND (2) THE IMPOSITION OF A ONE AND TWO -TENTHS (1.2) MILL CITY TAX ON REAL AND PERSONAL PROPERTY TO BE PLEDGED TO AN ISSUE OR ISSUES OF BONDS NOT TO EXCEED $26,500,000 IN PRINCIPAL AMOUNT TO FINANCE CAPITAL IMPROVEMENTS TO FAYETTEVILLE PUBLIC LIBRARY; PRESCRIBING OTHER MATTERS PERTAINING THERETO; AND DECLARING AN EMERGENCY WHEREAS, under the authority of Amendment 30 to the Constitution of the State of Arkansas, there have been submitted to the Mayor (i) a petition asking that the question of an increase by 1.5 mills of the current 1.0 mill City tax on real and personal property supporting maintenance and operation of Fayetteville Public Library be submitted to the electors of the City, and (ii) a petition asking that the question of the imposition of a 1.2 mill City tax on real and personal property to secure up to $26,500,000 in principal amount of bonds to finance capital improvements to Fayetteville Public Library be submitted to the electors of the City; and WHEREAS, the City Clerk has ascertained that the signatures of at least one hundred (100) taxpaying electors of the City are present on each petition; and WHEREAS, the purpose of this Ordinance is to call a special election on the questions described above in accordance with the provisions of Amendment 30 and Arkansas Code Annotated Sections 7-11-201 et seq.; NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Fayetteville, Arkansas: Section 1. That there be, and there is hereby called, a special election to be held on Tuesday, August 9, 2016, at which election there shall be submitted to the qualified electors of the City the questions of (i) the increase by 1.5 mills of the current 1.0 mill City tax on real and personal property supporting maintenance and operation of Fayetteville Public Library, and (ii) the imposition of a 1.2 mill City tax on real and personal property to secure up to $26,500,000 in principal amount of bonds to finance capital improvements to Fayetteville Public Library including, but not limited to, construction of new buildings, parking decks, additions, annexes and other expansion and renovation projects. Section 2. That the questions shall be placed on the ballot for the special election in substantially the following forms: Question One: Pursuant to Amendment 30 to the Constitution of the State of Arkansas, there is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the increase by 1.5 mills of the current 1.0 mill City tax on real and personal property supporting maintenance and operation of Fayetteville Public Library. Vote on the question by placing an "X" in one of the squares following the question, either for or against: FOR raising by one and one-half (1,5) mills the current one (1,0) mill city tax on real and personal property to be used for maintenance and operation of Fayetteville Public Library, a public city library AGAINST raising by one and one- half (1.5) mills the current one (1.0) mill city tax on real and personal property to be used for maintenance and operation of Fayetteville Public Library, a public city library. Question Two: Pursuant to Amendment 30 to the Constitution of the State of Arkansas, there is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the imposition of a 1.2 mill City tax on real and personal property to secure up to $26,500,000 in principal amount of bonds to finance capital improvements to Fayetteville Public Library. Unless the increase by 1.5 mills of the City tax on real and personal property to be used for maintenance and operation of Fayetteville Public Library (Question 1 above) is also approved by the electors of the City, the 1.2 mill City tax on real and personal property to be pledged to capital improvement bonds will not be imposed and the bonds will not be issued by the City. Vote on the question by placing an "X" in one of the squares following the question, either for or against: FOR a one and two -tenths (1.2) mill city tax on real and personal property within the city to be pledged to an issue or issues of bonds not to exceed $26,500,000 in aggregate principal amount, to finance capital improvements to Fayetteville Public Library, a public city library, and to authorize the issuance ofthe bonds on such terms and conditions as shall be approved by the city. AGAINST a one and two -tenths (1.2) mill city tax on real and personal property within the city to be pledged to an issue or issues of bonds not to exceed $26,500,000 in aggregate principal amount, to finance capital improvements to Fayetteville Public Library, a public city library, and to authorize the issuance of the bonds on such terms and conditions as shall be approved by the city. Section 3. That the election shall be held and conducted and the vote canvassed and the results declared under the law and in the manner now provided for Arkansas municipal elections unless otherwise provided in Amendment 30, and only qualified voters of the City shall have the right to vote at the election. Section 4. That a copy of this Ordinance shall be given to the Washington County Clerk and the Washington County Board of Election Commissioners not later than June 7, 2016, so that the necessary election officials and supplies may be provided. Section 5. That the results of the special election shall be proclaimed by the Mayor, and his proclamation shall be published one time in a newspaper of general circulation within the City. The proclamation shall advise that the results as proclaimed shall be conclusive unless attacked in the Circuit Court of Washington County within thirty (30) days after the date of publication of the proclamation. Section 6. That the Mayor and the City Clerk, for and on behalf of the City, be, and they hereby are authorized and directed to do any and all things necessary to call and hold the special election as herein provided. Section 7. That all ordinances and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. Section 8. Emergency Clause. This millage election was long delayed by litigation against Washington Regional Medical Center and the City of Fayetteville contesting clear title of the property to be sold to the Fayetteville Public Library for possible use if Question 2 is approved by the voters. The Arkansas Court of Appeals unanimously affirmed Washington Regional's quiet title action on April 27, 2016, allowing this special election to proceed. In order to hold the special election on the preferred date of August 9, 2016, this ordinance needs to go into effect without delay. It is hereby ascertained and declared that there is a critical need to obtain additional sources of revenue to maintain and operate Fayetteville Public Library and to finance needed capital improvements thereto, all in order to promote and protect the health, safety and welfare of the inhabitants of the City. It is, therefore, declared that an emergency exists and this Ordinance being necessary for the immediate preservation of public peace, health and safety shall be in force and effect immediately from and after its passage. PASSED and APPROVED on 5/17/2016 Approved: Lioneld Jordan, Mayor Attest: Sondra E. Smith, City Clerk Treasurer 73708711 May 26, 2016 RECEIVED JUN 0 12016 CI TY CLERK'S OFFICE RECEIVED NORTHWIEST AR.KANSAS SEP o'� 2016 CITY OF FAYETTEVILLE /.*j�"' Azeu� CITY CLERK'S OFFICE Democrat iE?C! �FAYETTEVil..l..l . AR 72702 • 47 )-441-1 00 < 1=AX: 479-695-1118 • VtlWW NWAI:)iF ;:;i>f1 AFFIDAVIT OF PUBLICATION I, Cathy Wiles, do solemnly swear that I am the Legal Clerk of the Northwest Arkansas Democrat -Gazette, printed and published in Washington County and Benton County, Arkansas, and of bona fide circulation, that from my own personal knowledge and reference to the files of said publication, the advertisement of: CITY OF FAYETTEVILLE Public Notice — Library Special Election Was inserted in the Regular Edition on: August 29, 2016 Publication Charges: $ 245.70 Cathy Wiles 1- Subscribed and sworn to before me ,his 2 day of <eej , 20l6. ON I ary Public My Commission Expires: CQI 0011 r r r�'� DAV641 NpTARY "'�: PUBLIG ti %TON ``*NOTE** Mease do not pay from Affidavit. Invoice will be sent. PUBLIC NOTICE CITY OF FAYETTEVILLE, ARKANSAS PROCLAMATION DECLARING THE RESULTS OF ELECTION OFFICE OF THE MAYOR OF THE CITY OF FAYETTEVILLE, ARKANSAS TO THE PEOPLE OF THE CITY OF FAYETTEVILLE, ARKANSAS, GREETINGS: WHEREAS, a Special Election was held on August 9, 2016 regarding the vote to: Question One. Increase by 1.5 mills of the current 1.0 mill City tax on real and personal property supporting maintenance and operation of Fayetteville Public Library. Question Two. Impose a 1.2 mill City tax on real and personal property to secure up to $26,500,000 in principal amount of bonds to finance capital improvements to Fayetteville Public Library. Unless the increase by 1.5 mills of the City tax on real and personal property to be used for maintenance and operation of Fayetteville Public Library (Question 1 above) is also approved by the electors of the City, the 1.2 mill City tax on real and personal property to be pledged to capital improvement bonds will not be imposed and the bonds will not be issued by the City. NOW, THEREFORE, I, Lioneld Jordan, Mayor of the City of Fayetteville, Arkansas by virtue of the authority vested in me by law, do hereby proclaim the following to be thy -results.: of tl e August 9, 2016 Special Election: Question One.': 3,617 FOR raising by one arid: -one-half (1.5) mills the current one (1.0) mill city tax on real and personal propeyty� to be used for maintenance and operation of Fayetteville Public Library, a public city library. 2,550 AGAINST raising by one and one-half (1.5) mills the current one (1.0) mill city tax on real and personal property to be used for maintenance and operation of Fayetteville Public Library, a public city library. Question Two. 3,439 FOR a one and two -tenths (1.2) mill city tax on real and personal property within the city to be pledged to an issue or issues of bonds not to exceed $26,500,000 in aggregate principal amount, to finance capital improvements to Fayetteville Public Library, a public city library, and to authorize the issuance of the bonds on such terms and conditions as shall be approved by the city. 2,726 AGAINST a one and two -tenths (1.2) mill city tax on real and personal property within the city to be pledged to an issue or issues of bonds not to exceed $26,500,000 in aggregate principal amount, to finance capital improvements to Fayetteville Public Library, a public city library, and to authorize the issuance of the bonds on such terms and conditions as shall be approved by the city. These results as proclaimed by the Mayor shall be conclusive unless attacked in the Circuit Court of Washington County within thirty days. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of my office to be affixed this -25-i-4day of August, 2016. Signed: Attest: C By: D ORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer �`�� • \T Y 0/1 ,sG� FAYETTEVILLE ��L kANSP `` WASHINGTON COUNTY ELECTION COMMISSION CERTIFICATE OF ELECTION CITY OF FAYETTEVILLE SPECIAL ELECTION AUGUST 9, 2016 2016 AUG 19 PF! 2; 11 STATE OF ARKANSAS ; COUNTY OF WASHINGTON + +t- L ti i. t> 11�:; 8,;T1: Ct.r..l?.,t We, the undersigned members of the Board of Election Commissioners of Washington County, Arkansas, do hereby certify the following Washington County results in the August 9, 2016 special election on the question of: Question One: Pursuant to Amendment 30 to the Constitution of the State of Arkansas, there is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the increase by 1.5 mills of the current 1.0 mill City tax on real and personal property supporting maintenance and operation of Fayetteville Public Library. FOR raising by one and one-half (1.5) mills the current one (1.0) mill city tax on real and personal property to be used for maintenance and operation of Fayetteville Public Library, a public city library ...................................... AGAINST raising by one and one-half (1,5) mills the current one (1.0) mill city tax on real and personal property to be used for maintenance and operation of Fayetteville Public Library, a public city library .................. ................... Question One (Vote for ) 1 FOR . 3,617 58.65 AGAINST . 2,550 41.35 Question Two: Pursuant to Amendment 30 to the Constitution of the State of Arkansas, there is submitted to the qualified electors of the City of Fayetteville, Arkansas, the question of the imposition of a 1.2 mill City tax on real and personal property to secure up to $26,500,000 in principal amount of bonds to finance capital improvements to Fayetteville Public Library. Unless the increase by 1.5 mills of the City tax on real and personal property to be used for maintenance and operation of Fayetteville Public Library (Question I above) is also approved by the electors of the City, the 1,2 mill City tax on real and personal property to be pledged to capital improvement bonds will not be imposed and the bonds will not be issued by the City. FOR a one and two -tenths (1.2) mill city tax on real and personal property within the city to be pledged to an issue or issues of bonds not to exceed $26,500,000 in aggregate principal amount, to finance capital improvements to Fayetteville Public Library, a public city library, and to authorize the issuance of the bonds on such terms and conditions as shalt be approved by the city ......................... AGAINST a one and two -tenths (1.2) mill city tax on real and personal property within the city to be pledged to an issue or issues of bonds not to exceed $26,500,000 in aggregate principal amount, to finance capital improvements to Fayetteville Public Library, a public city library, and to authorize the issuance of the bonds on such terms and conditions as shall be approved by the city ........ Question Two (Vote for ) 1 FOR . 3,439 55.78 AGAINST . 2,726 44.22 Returns of the votes for the City of Fayetteville Special Election in Washington County, Arkansas have been delivered by us to the Washington County Clerk, We further certify that the polls were open from 7:30 A. M, until 7:30 P.M,, that only the duly appointed election officials made due returns of the votes cast, and that we have canvassed the votes as required by law, IN TESTIMONY WHEREOF, we have hereunto set our hands this the 19th day of August, 2016, Washington County Election Commission Bill Ackerman, Chairma Renee Oelschlaeger, Co isssiio--n--eerr Max Deitchler, Commissioner CLOSING CERTIFICATE AND REQUEST OF THE CITY The undersigned Mayor and City Clerk of the City of Fayetteville, Arkansas, a duly organized municipality and political subdivision of the State of Arkansas (the "City"), do hereby certify, represent, covenant and request as follows: 1. The undersigned are the duly elected, qualified, and acting Mayor and City Clerk of the City, and as such officials have in their possession or have access to the official books and corporate records of the City. This Certificate is executed and delivered in connection with the issuance of the City's $26,500,000 Library Improvement Bonds, Series 2017 (the "Bonds"). 2. Attached hereto as Exhibit A is a true, complete, and correct copy of Ordinance No. 5903 (the "Bond Ordinance"), duly adopted by a majority of the City Council at a duly called regular meeting of the City Council, open to the public, held September 20, 2016. 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 B is a true, complete and correct copy of the minutes of a meeting of the City Council held September 20, 2016, 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 C is a true, complete, and correct copy of a publisher's affidavit showing publication of the Bond Ordinance in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on September 29, 2016. No authority or proceeding in connection with the issuance, sale and delivery of the Bonds has been repealed, revoked or rescinded. 3. The following described instruments, as executed and delivered by the Mayor and/or City Cleric, are in substantially the same form and text as the copies of such instruments which were before and approved by the City Council at the September 20, 2016 meeting referred to in paragraph 2 above, with such changes not inconsistent with the Bond Ordinance as have been approved by the officials executing the same. Document Date Other Party or Parties Trust Indenture As of July 1, 2017 Simmons Bank, as Trustee (the "Trustee") Tax Regulatory Agreement July 19, 2017 Trustee 4827-8895-6235.1 Continuing Disclosure July 19, 2017 Simmons Bank, as dissemination Agreement agent Bond Purchase Agreement June 13, 2017 Stephens Inc. (the "Underwriter") Official Statement June 13, 2017 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 opposite their respective names. The undersigned, or their successors in office, are the authorized representatives of the City for all purposes of the Bond Ordinance and the City Documents. Title Name Mayor Lioneld Jordan City Clerk Sondra Smith 5. The undersigned Mayor of the City did manually execute each of the City Documents and the undersigned City Clerk of the City did manually attest the Trust Indenture. The undersigned Mayor of the City did manually execute and the undersigned City Cleric did manually attest $26,500,000 aggregate principal amount of Library Improvement Bonds, Series 2017, said series of bonds being initially issued in the form of fourteen fully registered bonds numbered from R17-1 upwards, initially dated as of July 19, 2017 (the "Bonds"). 6. The City has duly authorized, executed and delivered the Bonds and each of the City Documents by all necessary action and, as of the date hereof, the Bonds and each of the City Documents are in full force and effect and each constitutes the valid, binding and enforceable obligation of the City, except to the extent their enforceability may be limited by bankruptcy, insolvency or other similar laws affecting creditors' rights generally, or by the availability of equitable remedies, and the City is entitled to the benefits of the same. 7. Any certificate signed by any official of the City (including this certificate) delivered to the Trustee or the Underwriter shall be deemed a representation and warranty by the City to the Trustee or the Underwriter as to the statements made therein (and herein). 8. The seal affixed to this certificate is the legally adopted, proper and only official seal of the City, and has been duly affixed to the Bonds. 9. The meeting of the City Council of the City referred to in paragraph 2 hereof was open to the public in compliance with the provisions of Section 25-19-106 of the Arkansas Code Annotated (2015 Supp.), as amended and supplemented. 2 4827-8895-6235.1 10. The present officials of the City and their respective terms are as follows: Name Office Term Expires Lioneld Jordan Mayor 12/31/20 Kit Williams City Attorney 12/31/18 Sondra Smith City Clerk 12/31/20 Sarah Bunch Alderman 12/31/20 Adella Gray Alderman 12/31/18 Mark Kinion Alderman 12/31/18 John La Tour Alderman 12/31/18 Alan Long Alderman 12/31/20 Sarah Marsh Alderman 12/31/20 Matthew Petty Alderman 12/31/20 Justin Tennant Alderman 12/31/18 11. The Authorized Representative of the City for all purposes of the Trust Indenture is Lioneld Jordan, Mayor, whose signature appears on page 6. Until further written notice to you, any instrument authorized by the Trust Indenture to be signed by an Authorized Representative of the City is to be honored if it contains the manual signature of this individual. 12. The City has not and will not engage in any activity which might result in the income of the Bonds becoming taxable to it or any interest on the Bonds becoming taxable to the recipients thereof under the Federal income tax laws. This covenant is made to all owners of the Bonds, their successors and assigns, as a further inducement for the purchase of the Bonds. 13. All of the conditions, covenants and agreements required in the Trust Indenture to be satisfied or performed by the City at or prior to the issuance and sale of the Bonds have been complied with, satisfied or performed in the manner and with the effect contemplated in the Bond Purchase Agreement and the Trust Indenture. The representations and warranties of the City contained in the Bond Purchase Agreement and the Trust Indenture are true and correct in all material respects on and as of the date of this Certificate as if made on the date of this Certificate. 14. The information contained in the Official Statement relating to the City, its organization, properties, operations and financial condition, and the description of the Bonds, the Trust Indenture, Ordinance No. 5876 of the City adopted May 17, 2016 (the "Election Ordinance"), the Bond Ordinance, the one and two -tenths (1.2) mill city tax on each dollar of assessed valuation of the real and personal property within the City (the "Library Tax"), levied pursuant to the Election Ordinance and pledged pursuant to the Bond Ordinance, is true and correct in all material respects. To the best of the knowledge of the undersigned, as of its issue date, the Official Statement does not contain any untrue or incorrect statement of a material fact and does not omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading in any material respect. 15. There are hereby delivered to the Trustee fourteen (14) typewritten Bonds in the aggregate principal amount of $26,500,000, to be registered in the name of Cede & Co. The 4827-8895-6235.1 Trustee is hereby requested to authenticate the Bonds and to receipt for and upon the order of the Underwriter on behalf of the City, deliver the Bonds to The Depository Trust Company, New York, New York, after authentication and upon payment of the purchase price therefor of $27,003,647.40. The Trustee is hereby directed to deposit the Bond proceeds as follows: (i) Deposit $98,647.40 into the Costs of Issuance Fund and immediately pay those Costs of Issuance with respect to the Bonds set forth in Exhibit D hereto; and (ii) Deposit the remaining balance, in the amount of $26,905,000.00 into the Project Fund. 16. The City is a city of the first class pursuant to Title 14, Subtitle 3, and Chapter 43 of the Arkansas Code Annotated. The City is operating under the mayor -council form of government pursuant to Title 14. 17. The City has not adopted any by-laws or rules of procedure relating to the conduct of its City Council meetings. 18. There is no action, suit, proceeding, inquiry or investigation involving the City before or by any court or public board or body pending or, to the knowledge of the undersigned, threatened wherein an unfavorable decision, ruling or finding would: (i) affect the creation, organization, existence or powers of the City or the titles of its officials to their respective offices, (ii) enjoin or restrain the issuance, sale or delivery of any of the Bonds or the City Documents, the levy or collection of the Library Tax, or the pledge of the receipts thereof, or the accomplishment of the Project (as defined in the Trust Indenture), (iii) in any way question or affect any of the rights, powers, duties or obligations of the City with respect to the Library Tax, (iv) in any way question or affect any authority for the issuance, authorization, execution, authentication, sale or delivery of the Bonds or the validity or enforceability of the Bonds, the City Documents, the Library Tax, the Election Ordinance, the Bond Ordinance, or the assignment by the City of any of the moneys, instruments or other rights pledged under the Trust Indenture, or (v) in any way question or affect the Official Statement or the transactions contemplated thereby, or any other agreement or instrument to which the City is a party and relating to the Bonds. 19. The City will apply a portion of the proceeds from the sale of the Bonds to finance city library improvements, as provided in the Trust Indenture. The Library Tax authorized under the Act (as defined in the Trust Indenture) have been levied within the City pursuant to the Election Ordinance. The collection of the Library Tax commenced on January 1, 2017. Receipts of the Library Tax are not presently pledged or hypothecated in any manner or for any purpose other than for the payment of the Bonds as provided in the Trust Indenture. 20. In the City, the time for filing a referendum petition is fixed at 31 days after the publication of the measure upon which the referendum is sought. 21. The adoption of the Election Ordinance and the Bond Ordinance, the execution and delivery of the City Documents, the authorization, execution and delivery of the Bonds, and compliance with the provisions thereof under the circumstances contemplated thereby does not and will not in any material respect conflict with, or constitute on the part of the City a breach or 4 4827-8895-6235.1 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. 22. The City's employer tax identification number is 71-6018462. 23. The Bonds, the Trust 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. 24. Since December 31, 2016, there has not been any material adverse 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. 25. None of the proceedings of the City taken preliminary to the issuance of the Bonds, including the levy of the Library Tax, have been in any manner repealed, amended or changed. 26. The City has complied in all respects with the provisions of the Act and has full legal right, power and authority to levy the Library Tax and to issue the Bonds for the purposes stated in the Act and to enter into the Bond Purchase Agreement, to adopt the Authorizing Ordinance and the Election 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 Bond Purchase Agreement, the Authorizing Ordinance, the Election Ordinance, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement. 27. To the best knowledge of the undersigned, no event affecting the City, the Library Tax or the Special Tax Collections (as defined in the Bond Purchase Agreement) 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. [REMAINDER OF PAGE INTENTIONALLY BLANK] 5 4827-8895-6235.1 28. 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. 2017. IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of July 19, ��ERk•IrTR CITY OF FA TTEVI ARKANSAS �U. r :FAYETTE �= ��• LLE• = B 9�kA NSPG'. �� Lio Jo an, M or By: XJ-fJi Sondra Smith, City Clerk 6 4827-8895-6235.1 ,-F A � M °5.4'ans�s 113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Ordinance: 5903 File Number: 2016-0413 LIBRARY IMPROVEMENT BONDS: Doc ID: 017122970005 Type: REL Kind: ORDINANCE Recorded: 10/24/2016 at 08:49:55 AM Fee Amt: $35.00 Page i of 5 Washington County, AR Kyle 5vlvester Circuit Clerk File2016-00031291 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF THE CITY'S PUBLIC LIBRARY IMPROVEMENT BONDS FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF CAPITAL IMPROVEMENTS TO THE FAYETTEVILLE PUBLIC LIBRARY; 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, in compliance with the provisions of Amendment 30 to the Constitution of the State of Arkansas, as amended by Amendment 72 to the Constitution of the State of Arkansas (as amended, "Amendment 30"), and the Local Government Library Bond Act of 1993, codified as Arkansas Code Annotated (1998 Repl. & 2016 Supp.) Sections 14-142-201 et seq. (as from time to time amended, the "Act"), petitions were delivered to the City requesting the submission of questions to the qualified electors of the City on the levying of certain ad valorem taxes and the issuance of bonds secured thereby to finance a portion of the costs of acquiring, constructing and equipping various capital improvements to the Fayetteville Public Library, including, but not limited to, new buildings, parking decks, additions, annexes and other expansions and renovations (collectively, the "Project"); and WHEREAS, in compliance' with the provisions of Amendment 30 and the Act and pursuant to the provisions of Ordinance No. 5876 of the City, adopted and approved on May 17, 2016 (the "Election Ordinance"), there was submitted to the qualified electors of the City a question regarding the levy of one and two -tenths (1.2) mill city tax on real and personal property within the City (the "Tax") to be pledged to an issue or issues of capital improvement bonds not to exceed $26,500,000 in aggregate principal amount for the purpose of financing the Project; and WHEREAS, at a special election held August 9, 2016, a majority of the qualified electors of the City voting on the question approved the levy of the Tax and the issuance of the capital improvement bonds; and Ordinance: 5903 File Number., 2016-0413 WHEREAS, as authorized under the provisions of Amendment 30 and the Act and as approved by the qualified electors of the City, the City has now determined to issue and sell its Library Improvement Bonds in aggregate principal amount not to exceed $26,500,000 (the "Bonds"), in order to provide for the funding of the Project; and WHEREAS, the City has made arrangements for the sale of the Bonds to Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), pursuant to the terms of a Bond Purchase Agreement between the City and the Underwriter (the `Bond Purchase Agreement") in substantially the form presented to and before this meeting; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 30 and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Library Improvement Bonds" (the "Bonds"). The Bonds shall be issued in one or more series in aggregate principal amount not to exceed Twenty -Six Million Five Hundred Thousand Dollars ($26,500,000) and shall mature not later than December 1, 2047, in the principal amounts and bearing 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 Bonds shall not be general obligations of the City, but shall be special obligations secured by and payable solely from proceeds of the Tax, the Special Tax Collections and other moneys, funds and amounts more specifically identified in the Trust Indenture (each as defined below). The proceeds of the Bonds will be utilized to finance the costs of the Project, to establish a debt service reserve for the Bonds or to purchase a surety bond or debt service reserve insurance policy for reserve purposes, if deemed economically beneficial, to pay a premium for bond insurance, if deemed economically beneficial, and to pay printing, underwriting, legal and other expenses incidental to the issuance of the Bonds. The Mayor, City Clerk and the City's Chief Financial Officer are hereby authorized to take all action necessary to accomplish the acquisition, construction and equipping of the Project. The Bonds shall be issued in the form and denominations, shall be dated, shall be numbered, shall mature, shall be subject to redemption prior to maturity, and shall contain such other terms, covenants and conditions, all as set forth in the Trust Indenture submitted to this meeting. The Mayor is hereby authorized and directed to execute and deliver the Bonds in one or more series, each series to be in substantially the form thereof contained in the Trust Indenture submitted to this meeting, and the City Clerk is hereby authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby authorized to confer with the Trustee, 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 2. In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, there are hereby pledged all of the receipts of the one and two -tenths (1.2) mill city tax on real and personal property within the City, together with all penalties and interest payable Ordinance: 5903 File Number., 2016-0413 with respect thereto (the "Tax"), approved by the electors of the City, as well as the City's allocable portion of the one-half of one percent (0.5%) statewide sales and use tax implemented pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79") which is intended to offset any decreases in collections of the Tax resulting from the homestead exemption implemented pursuant to Amendment 79 (the "Special Tax Collections"). The City Council covenants to levy the Tax in 2016 for collection in 2017, and to levy the Tax in subsequent years as provided under the laws of the State of Arkansas until such time as the Bonds are no longer outstanding or sufficient funds are on deposit with the Trustee to redeem the Bonds in full. The City covenants and agrees that all receipts from the Tax and the Special Tax Collections will be deposited and will be used solely as provided in the Trust Indenture (as defined below). In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, together with fees and costs incidental thereto, there are hereby appropriated out of the proceeds of the Tax and the Special Tax Collections the sums necessary to pay the same. 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 a Trust Indenture (the "Trust Indenture"), by and between the City and Simmons Bank, Pine Bluff, Arkansas, as trustee (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 the Tax receipts and the terms of the Bonds. The Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Trust Indenture in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Trust Indenture, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Trust Indenture in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 4. There is hereby authorized and approved a Preliminary Official Statement of the City, including the cover page and appendices attached thereto, relating to the Bonds. The Preliminary Official Statement is hereby "deemed final" by the City within the meaning of U.S. Securities and Exchange Commission Rule 15c2-12. The distribution of the Preliminary Official Statement is hereby approved. The Preliminary Official Statement, as amended to conform to the terms of the Bond Purchase Agreement, including Exhibit A thereto, and with such other changes and amendments as are mutually agreed to by the City and the Underwriter, is herein referred to as the "Official Statement," and the Mayor is hereby authorized to execute the Official Statement for and on behalf of the City. The Official Statement is hereby approved in substantially the form of the Preliminary Official Statement submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Official Statement in substantially the form of the Preliminary Official Statement submitted to this meeting, with such changes as shall be approved by such persons, the Mayor's execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Preliminary Official Statement is on file with the City Clerk and is available for inspection by any interested person.) 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 Ordinance: 5903 File Number- 2016-0413 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 Tax 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. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider funding a debt service reserve be funded in conjunction with the issuance of the Bonds. Alternatively, the Underwriter has proposed that the City consider the purchase of a surety bond or a debt service reserve insurance policy with a portion of the proceeds of the Bonds. if deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a surety bond or a debt service reserve insurance policy with respect to the Bonds. Section 8. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider the purchase of a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of the principal of and interest on the Bonds when due. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a bond insurance policy with respect to the Bonds. Section 9. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things necessary to effect the issuance, sale, execution and delivery of the Bonds and to effect the execution and delivery of the Trust Indenture, the Bond Purchase Agreement, the Official Statement, the Continuing Disclosure Agreement and a Tax Regulatory Agreement relating to the tax exemption of interest on the Bonds, and to perform all of the obligations of the City under and pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on behalf of the City, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of such authority or to evidence the exercise thereof. Section 10. Kutak Rock LLP, Little Rock, Arkansas, is hereby appointed to act as Bond Counsel on behalf Ordinance: 5903 File Number.' 2016-0413 of the City in connection with the issuance and sale of the Bonds. Section 11. The adoption of this Ordinance is reimbursement from the proceeds of the Bonds expenses advanced by or on behalf of the City. intended as the City's "official intent" to make for preliminary costs of the Project and related 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.fT R�����J���i� PASSED and APPROVED on 9/20/2016 X. Attest: %9s gRKANS�.oJ�s e� .IIIS ; i Sondra E. Smith, City Clerk The surer Washington County, AR I certify this instrument was filed on 10/24/2016 08:49:55 AM and recorded in Real Estate File Number 20 0031291 Kyle SyIves t - Circ Oft Clerk by City of Fayetteville, Arkansas 113 West Mountain Street Y A: Fayetteville, AR 72701 (479) 575-8323 Text File File Number: 2016-0413 Agenda Date: 9/20/2016 Version: 1 Status: Passed In Control: City Council Meeting File Type: Ordinance Agenda Number: D. 1 LIBRARY IMPROVEMENT BONDS: AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF THE CITY'S PUBLIC LIBRARY IMPROVEMENT BONDS FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF CAPITAL IMPROVEMENTS TO THE FAYETTEVILLE PUBLIC LIBRARY; 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, in compliance with the provisions of Amendment 30 to the Constitution of the State of Arkansas, as amended by Amendment 72 to the Constitution of the State of Arkansas (as amended, "Amendment 30"), and the Local Government Library Bond Act of 1993, codified as Arkansas Code Annotated (1998 Repl. & 2016 Supp.) Sections 14-142-201 et seq. (as from time to time amended, the "Act"), petitions were delivered to the City requesting the submission of questions to the qualified electors of the City on the levying of certain ad valorem taxes and the issuance of bonds secured thereby to finance a portion of the costs of acquiring, constructing and equipping various capital improvements to the Fayetteville Public Library, including, but not limited to, new buildings, parking decks, additions, annexes and other expansions and renovations (collectively, the "Project"); and WHEREAS, in compliance with the provisions of Amendment 30 and the Act and pursuant to the provisions of Ordinance No. 5876 of the City, adopted and approved on May 17, 2016 (the "Election Ordinance"), there was submitted to the qualified electors of the City a question regarding the levy of one and two -tenths (1.2) mill city tax on real and personal property within the City (the "Tax") to be pledged to an issue or issues of capital improvement bonds not to exceed $26,500,000 in aggregate principal amount for the purpose of financing the Project; and WHEREAS, at a special election held August 9, 2016, a majority of the qualified electors of the City voting on the question approved the levy of the Tax and the issuance of the capital improvement bonds; and WHEREAS, as authorized under the provisions of Amendment 30 and the Act and as approved by the qualified electors of the City, the City has now determined to issue and sell its Library Improvement Bonds in aggregate principal amount not to exceed $26,500,000 (the "Bonds"), in order to provide for City of Fayetteville, Arkansas Page 1 Printed on 912112016 File Number., 2016-0413 the funding of the Project; and WHEREAS, the City has made arrangements for the sale of the Bonds to Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), pursuant to the terms of a Bond Purchase Agreement between the City and the Underwriter (the "Bond Purchase Agreement") in substantially the form presented to and before this meeting; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 30 and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Library Improvement Bonds" (the "Bonds"). The Bonds shall be issued in one or more series in aggregate principal amount not to exceed Twenty -Six Million Five Hundred Thousand Dollars ($26,500,000) and shall mature not later than December 1, 2047, in the principal amounts and bearing 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 Bonds shall not be general obligations of the City, but shall be special obligations secured by and payable solely from proceeds of the Tax, the Special Tax Collections and other moneys, funds and amounts more specifically identified in the Trust Indenture (each as defined below). The proceeds of the Bonds will be utilized to finance the costs of the Project, to establish a debt service reserve for the Bonds or to purchase a surety bond or debt service reserve insurance policy for reserve purposes, if deemed economically beneficial, to pay a premium for bond insurance, if deemed economically beneficial, and to pay printing, underwriting, legal and other expenses incidental to the issuance of the Bonds. The Mayor, City Clerk and the City's Chief Financial Officer are hereby authorized to take all action necessary to accomplish the acquisition, construction and equipping of the Project. The Bonds shall be issued in the form and denominations, shall be dated, shall be numbered, shall mature, shall be subject to redemption prior to maturity, and shall contain such other terms, covenants and conditions, all as set forth in the Trust Indenture submitted to this meeting. The Mayor is hereby authorized and directed to execute and deliver the Bonds in one or more series, each series to be in substantially the form thereof contained in the Trust Indenture submitted to this meeting, and the City Clerk is hereby authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby authorized to confer with the Trustee, 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 2. In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, there are hereby pledged all of the receipts of the one and two -tenths (1.2) mill city tax on real and personal property within the City, together with all penalties and interest payable with respect thereto (the "Tax"), approved by the electors of the City, as well as the City's allocable portion of the one-half of one percent (0.5%) statewide sales and use tax implemented City of Fayetteville, Arkansas Page 2 Printed on 912112016 File Number., 2016-0413 pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79") which is intended to offset any decreases in collections of the Tax resulting from the homestead exemption implemented pursuant to Amendment 79 (the "Special Tax Collections"). The City Council covenants to levy the Tax in 2016 for collection in 2017, and to levy the Tax in subsequent years as provided under the laws of the State of Arkansas until such time as the Bonds are no longer outstanding or sufficient funds are on deposit with the Trustee to redeem the Bonds in full. The City covenants and agrees that all receipts from the Tax and the Special Tax Collections will be deposited and will be used solely as provided in the Trust Indenture (as defined below). In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, together with fees and costs incidental thereto, there are hereby appropriated out of the proceeds of the Tax and the Special Tax Collections the sums necessary to pay the same. 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 a Trust Indenture (the "Trust Indenture"), by and between the City and Simmons Bank, Pine Bluff, Arkansas, as trustee (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 the Tax receipts and the terms of the Bonds. The Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Trust Indenture in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Trust Indenture, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Trust Indenture in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section 4. There is hereby authorized and approved a Preliminary Official Statement of the City, including the cover page and appendices attached thereto, relating to the Bonds. The Preliminary Official Statement is hereby "deemed final" by the City within the meaning of U.S. Securities and Exchange Commission Rule 15c2-12. The distribution of the Preliminary Official Statement is hereby approved. The Preliminary Official Statement, as amended to conform to the terms of the Bond Purchase Agreement, including Exhibit A thereto, and with such other changes and amendments as are mutually agreed to by the City and the Underwriter, is herein referred to as the "Official Statement," and the Mayor is hereby authorized to execute the Official Statement for and on behalf of the City. The Official Statement is hereby approved in substantially the form of the Preliminary Official Statement submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Official Statement in substantially the form of the Preliminary Official Statement submitted to this meeting, with such changes as shall be approved by such persons, the Mayor's execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Preliminary Official Statement is on file with the City Clerk and is available for inspection by any interested person.) Section 5. In order to prescribe the terms and conditions upon which the Bonds are to be sold to the City of Fayetteville, Arkansas Page 3 Printed on 912112016 File Number 2016-0413 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 Tax 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. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider funding a debt service reserve be funded in conjunction with the issuance of the Bonds. Alternatively, the Underwriter has proposed that the City consider the purchase of a surety bond or a debt service reserve insurance policy with a portion of the proceeds of the Bonds. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a surety bond or a debt service reserve insurance policy with respect to the Bonds. Section 8. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider the purchase of a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of the principal of and interest on the Bonds when due. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a bond insurance policy with respect to the Bonds. Section 9. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things necessary to effect the issuance, sale, execution and delivery of the Bonds and to effect the execution and delivery of the Trust Indenture, the Bond Purchase Agreement, the Official Statement, the 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 City of Fayetteville, Arkansas Page 4 Printed on 91211201 f> File Number., 2016-0413 thereto. The Mayor and the City Clerk are further authorized and directed, for and on behalf of the City, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of such authority or to evidence the exercise thereof. Section 10. 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 make reimbursement from the proceeds of the Bonds for preliminary costs of the Project and related expenses advanced by or on behalf of 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. Section 13. All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. City of Fayetteville, Arkansas Page 5 Printed on 9/21/2016 City of Fayetteville Staff Review Form 2016-0413 Legistar File ID 9/20/2016 City Council Meeting Date -Agenda Item Only N/A for Non -Agenda Item Paul A. Becker 9/2/2016 Chief Financial Officer/ Finance & Internal Services Department Submitted By Submitted Date Division / Department Action Recommendation: Approval of a Bond Ordinance Authorizing the Issuance and Sale of the City's Public Library Improvement Bonds for the Purpose of Financing a Portion of the Cost of Capital Improvements to the Fayetteville Public Library. Budget Impact: Account Number Project Number Fund Project Title Budgeted Item? NA Current Budget Funds Obligated Current Balance Does item have a cost? No Item Cost Budget Adjustment Attached? No Budget Adjustment Remaining Budget i V20140710 Previous Ordinance or Resolution # Original Contract Number: Comments: Approval Date: CITY OF 'Fay le ARKANSAS TO: Mayor Jordan THRU: Don Marr, Chief of Staff FROM: Paul A. Becker, Chief Financial Officer DATE: September 2, 2016 STAFF MEMO SUBJECT: Approval of a Bond Ordinance Authorizing the Issuance and Sale of the City's Public Library Improvement Bonds for the Purpose of Financing a Portion of the Cost of Capital Improvements to the Fayetteville Public Library. RECOMMENDATION: The Staff recommends approval of issuance and sale of the Fayetteville Public Library Improvement Bonds. BACKGROUND: At the request of citizen petitions delivered to the City, the City Council passed Ordinance Number 5876 which authorized a ballot question to be submitted to the voter regarding the approval of a levy in the amount of 1.2 mill of property taxes to provide for the principal and interest payments of a bond issue for the purposes of financing a portion of the cost of capital improvements at the Fayetteville Public Library. At the special election held on August 9, 2016, that question was approved by the voter. The City and City Public Library is now requesting a move forward with the funding plan for these important capital improvements. This Ordinance will authorize the actual issuance of these bonds to provide funds for the project described above. It is anticipated that the actual issuance of these bonds will be in 2017. This ordinance will authorize the City administration and Fayetteville Public Library to begin the financial planning and to prepare financial documents for this upcoming bond issue and subsequent improvement project. BUDGETISTAFF IMPACT: A special property tax as authorized by the voters will provide for the repayment of these bonds. Attachments: None. Mailing Address: 1.13 W. Mountain Street www.fayetteviile-ar.gov Fayetteville, AR 72701 •1 1 a t Democrat aze& AFFIDAVIT OF PUBLICATION 1, Cathy Wiles, do solemnly swear that I am the Legal Clerk of the Northwest Arkansas Democrat- Gazette, printed and published in Washington and Benton County, Arkansas, and of bona fide circulation, that from my own personal knowledge and reference to the files of said publication, the advertisement of: CITY OF FAYETTEVILLE Ordinance 5903 Was inserted in the Regular Editions on: SEPT. 29, 2016 Publication Cost: $848.90 &7t� �L� Cathy Wiles Subscribed and sworn to before me This , day of. , 2016. INWary Public a — 1 My Commission Expires: l qQttlw, 0 01111111Jl/I NOTARY%�'�'• ;4 PUBLIC •p ,#12401379 G l_0N CONt11 1`�:f`v�lcJ ox, CLERKS ��� CE Ordinance: 5903 File Number: 2016-0413 LIBRARY IMPROVEMENT AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF THE CITY'S PUBLIC LIBRARY IMPROVEMENT BONDS FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF CAPITAL IMPROVEMENTS TO THE FAYETTEVILLE PUBLIC LIBRARY; 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, in compliance with the provisions of Amendment 30 to the Constitution of the State of Arkansas, as amended by Amendment 72 to the Constitution of the State of Arkansas (as amended, Amendment 30"), and the Local Government Library Bond Act of 1993, codified as Arkansas Code Annotated (1998 Repl. & 2016 Supp,) Sections 14-142- 201 et seq. (as from time to time amended, the "Act"), petitions were delivered to the City requesting the submission of questions to the qualified electors ofthe City on the levying of certain ad valorem taxes and the issuance of bonds secured thereby to finance a portion of the costs of acquiring, constructing and equipping various capital improvements to the Fayetteville Public Library, including, but not limited to, new buildings, parking decks, additions, annexes and other expansions and renovations (collectively, the "Project"); and WHEREAS, in compliance with the provisions of Amendment 30 and the Act and pursuant to the provisions of Ordinance No. 5876 of the City, adopted and approved on May 17, 2016 (the "Election Ordinance"), there was submitted to the qualified electors of the City a question regarding the levy of one and two -tenths (1.2) mill city tax on real and personal property within the City (the "Tax") to be pledged to an issue or issues of capital improvement bonds not to exceed $26,500,000 in aggregate principal amount for the purpose of financing the Project; and WHEREAS, at a special election held August 9, 2016, a majority of the qualified electors of the City voting on the question approved the levy of the Tax and the issuance of the capital improvement bonds; and WHEREAS, as authorized under the provisions of Amendment 30 and the Act and as approved by the qualified electors of the City, the City has now determined to issue and sell its Library Improvement Bonds in aggregate principal amount not to exceed $26,500,000 (the "Bonds"), in order to provide for the funding of the Project; and WHEREAS, the City has made arrangements for the sale of the Bonds to Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), pursuant to the terms of a Bond Purchase Agreement between the City and the Underwriter (the "Bond Purchase Agreement") in substantially the form presented to and before this meeting; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 30 and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Library Improvement Bonds" (the "Bonds"). The Bonds shall be issued in one or more series in aggregate principal amount not to exceed Twenty -Six Million Five Hundred Thousand Dollars ($26,500,000) and shall mature not later than December 1, 2047, in the principal amounts and bearing 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 Bonds shall not be general obligations of the City, but shall be special obligations secured by and payable solely from proceeds of the Tax, the Special Tax Collections and other moneys, funds and amounts more specifically identified in the Trust Indenture (each as defined below). The proceeds of the Bonds will be utilized to finance the costs of the Project, to establish a debt service reserve for the Bonds or to purchase a surety bond or debt service reserve insurance policy for reserve purposes, if deemed economically beneficial, to pay a premium for bond insurance, if deemed economically beneficial, and to pay printing, anderwriting, legal and other expenses incidental to the issuance of the Bonds. The Mayor, City Clerk and the City's Chief Financial Officer are hereby authorized to take all action necessary to accomplish the acquisition, construction and equipping of the The Bonds shall be issued in the form and denominations, shall be dated, shall be numbered, shall mature, shall be subject to redemption prior to maturity, and shall contain such other terms, covenants and conditions, all as set forth in the Trust Indenture submitted to this meeting. The Mayor is hereby authorized and directed to execute and deliver the Bonds in one or more series, each series to be in substantially the form thereof contained in the Trust Indenture submitted to this meeting, and the City Clerk is hereby authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby authorized to confer with the Trustee, 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 2. In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, there are hereby pledged all of the receipts of the one and two -tenths (1.2) mill city tax on real and personal property within the City, together with all penalties and interest payable with respect thereto (the "Tax"), approved by the electors of the City, as well as the City's allocable portion of the one-half of one percent (0.5%) statewide sales and use tax implemented pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79") which is intended to offset any decreases in collections of the Tax resulting from the homestead exemption implemented pursuant to Amendment 79 (the "Special Tax Collections"). The City Council covenants to levy the Tar in 2016 for collection in 2017, and to levy the Tax in subsequent years as provided under the laws of the State of Arkansas until such time as the Bonds are no longer outstanding or sufficient finds are on deposit with the Trustee to redeem the Bonds in full. The City covenants and agrees that all receipts from the Tax and the Special Tax Collections will be deposited and will be used solely as provided in the Trust Indenture (as defined below). In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, together with fees and costs incidental thereto, there are hereby appropriated out of the proceeds of the Tax and the Special Tax Collections the sums necessary to pay the same. 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 a Trust Indenture (tire "Trust Indenture"); by and between the City and Simmons Bank, Pine Bluff, Arkansas, as trustee (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 the Tax receipts and the tents 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 150-12. The distribution of the Preliminary Official Statement is hereby approved. The Preliminary Official Statement, as amended to conform to the terns 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 terns 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 Tax 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. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider funding a debt service reserve be funded in conjunction with the issuance of the Bonds. Alternatively, the Underwriter has proposed that the City consider the purchase of a surety bond or a debt service reserve insurance policy with a portion of the proceeds of the Bonds. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do anv and all things necessary to accomplish the delivery of a surety bond or a debt service reserve insurance policy with respect to the Bonds. Section 8. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider the purchase of a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of the principal of and interest on the Bonds when due. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a bond insurance policy with respect to the Bonds. Section 9. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things necessary to effect the issuance, sale, execution and delivery of the Bonds and to effect the execution and delivery of the Trust Indenture, the Bond Purchase Agreement, the Official Statement, the 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, forand on behalf of the City, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of such authority or to evidence the exercise thereof. Section 10. 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 make reimbursement from the proceeds of the Bonds for preliminary costs of the Project and related expenses advanced by or on behalf of 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. Section 13. All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. PASSED and APPROVED on 9/20/2016 Approved: Lioneld Jordan, Mayor Attest: Sondra E. Smith, City Clerk Treasurer 73867173 Sept. 30,2016 Alderman Adella Gray Ward l Position I Alderman Sarah Marsh Ward I Position 2 Alderman Mark Kinion Ward 2 Position 1 Alderman Matthew Petty Ward 2 Position 2 Mayor Lioneld Jordan City Attorney Kit Williams City Clerk Sondra E. Smith City of Fayetteville Arkansas City Council Meeting September 20, 2016 City Council Meeting Minutes September 20, 2016 Page 1 of 13 Alderman Justin Tennant Ward 3 Position 1 Alderman Martin W. Schoppmeyer, Jr. Ward 3 Position 2 Alderman John La Tour Ward 4 Position 1 Alderman Alan T. Long Ward 4 Position 2 A meeting of the Fayetteville City Council was held on September 20, 2016 at 5:30 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 Sarah Marsh, Mark Kinion, Matthew Petty, Justin Tennant, Martin Schoppmeyer, John La Tour, Alan Long, Mayor Lioneld Jordan, City Attorney Kit Williams, City Clerk Sondra Smith, Staff, Press, and Audience. Alderman Adella Gray was absent. Pledge of Allegiance Mayor's Announcements, Proclamations .and Recognitions: None City Council Meeting Presentations, Reports, and Discussion Items: Nominating Committee Report Alderman Kinion presented the Nominating Committee report and recommended the appointments as submitted. He stated there was an incredible talent pool of applicants interviewed. He thanked everyone who applied. A copy of the report is attached. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 20, 2016 Page 2 of 13 Alderman Kinion moved to approve the Nominating Committee report. Alderman Marsh seconded the motion. Upon roll call the motion passed 6-1. Alderman La Tour voting no. Alderman Gray was absent. Agenda Additions: None Consent: Approval of the September 6, 2016 City Council Meeting Minutes. Approved Bid No.16-51 Multi -Craft Contractors, Inc.: A resolution to award Bid No. 16-51 and authorize a contract with MultirCraft Contractors, Inc. for plumbing services on an on -call basis for a period of one year with an automatic option to renew for four additional years. Resolution 163-16 as recorded in the office of the City Clerk Bid No. 16-52 Aracrebs II, LLC d/b/a Elite Building Solutions: A resolution to award Bid No. 16-52 and authorize a contract with Aracrebs II, LLC d/b/a Elite Building Solutions for HVAC services on an on -call basis for a period of one year with an automatic option to renew for four additional years. Resolution 164-16 as recorded in the office of the City Clerk WEX Bank: A resolution to approve a contract with WEX Bank, pursuant to a National Joint Powers Alliance cooperative purchasing agreement, to enable the city to participate in a fuel card program. Resolution 165-16 as recorded in the office of the City Clerk 2016-2017 Selective Traffic Enforcement Program Grant: A resolution to authorize acceptance of a 2016-2017 Selective Traffic Enforcement Program grant in the amount of $116,000.00, and to approve a budget adjustment. Resolution 166-16 as recorded in the office of the City Clerk Fayetteville Public Schools Joint Lease Agreement: A resolution to approve a joint lease agreement with the Fayetteville School District for portions of Jefferson Elementary School, Holcomb Elementary School and Lake Fayetteville. Resolution 167-16 as recorded in the office of the City Clerk 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 20, 2016 Page 3 of 13 GameTime c/o Cunningham Recreation: A resolution to approve the purchase of playground equipment from GameTime c/o Cunningham Recreation for the Ellen Smith Head Start Center located at 2052 South Garland Avenue in the amount of $32,061.63, including the cost of installation, pursuant to a U.S. Communities National Cooperative Purchasing Program contract. Resolution 168-16 as recorded in the office of the City Clerk TriMark Strategic Equipment and Supply Corporation: A resolution to authorize the purchase of kitchen equipment for the Fayetteville Senior Center from TriMark Strategic Equipment and Supply Corporation in an amount not to exceed $95,000.00, pursuant to a National Joint Powers Alliance cooperative purchasing agreement, contingent upon approval by the U.S. Department of Housing and Urban Development. Resolution 169-16 as recorded in the office of the City Clerk Bid No. 16-49 Goodwin & Goodwin, Inc.: A resolution to award Bid No. 16-49 and authorize a contract with Goodwin & Goodwin, Inc. in the amount of $3,286,735.00 for the water and sewer relocations associated with Arkansas Highway and Transportation Department project BB0414 - Porter Road -Highway 112/71B Widening and Interchange Improvements, to approve a project contingency in the amount of $328,673.50, and to approve a budget adjustment. Resolution 170 -16 as recorded in the office of the City Clerk Garver, LLC Amendment No. 2: A resolution to approve Amendment No. 2 to the contract with Garver, LLC in the amount of $196,800.00 to add construction phase services for the water and sewer relocations associated with Arkansas Highway and Transportation Department project BB0414 - Porter Road -Highway 112/71B Widening and Interchange Improvements, and to approve a budget adjustment. Resolution 171-16 as recorded in the office of the City Clerk Alderman Marsh moved to accept the Consent Agenda as read. Alderman Long seconded the motion. Upon roll call the motion passed 6-0. Alderman La Tour abstained. Alderman Gray was absent. Unfinished Business: RZN 16-5442 (2514 W. Lori Rd./Razorback Golf Course): An ordinance to rezone that property described in rezoning petition RZN 16-5442 for approximately 99.10 acres located at 2514 West Lori road from R-A, Residential Agricultural; RSF-1, Residential Single Family, one unit per acre and RSF-4, Residential Single Family, 4 units per acre to NC, Neighborhood Conservation; R-A, Residential Agricultural and NS, Neighborhood Services. At the July 19, 2016 City Council meeting this ordinance was left on the first reading. At the August 2, 2016 City Council meeting this ordinance was left on the first reading and tabled indefinitely. At the September 6, 2016 City Council meeting this ordinance was left on the first reading and tabled to the September 20, 2016 City Council meeting. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 20, 2016 Page 4 of 13 City Attorney Kit Williams: At the last meeting the item was removed from the table and we were provided a Bill of Assurance. I drafted a new ordinance reflecting the Bill of Assurance and attached it as an exhibit to the ordinance. Rather than reading the old ordinance without the Bill of Assurance, I ask that the City Council amend the current ordinance to the one I supplied to you on September 7, 2016. Alderman Marsh moved to amend the ordinance to reflect the attachment of a Bill of Assurance. Alderman La Tour seconded the motion. Upon roll call the motion passed 7-0. Alderman Gray was absent. City. Attorney Kit Williams read the entire amended ordinance. Therefore, no motion was made to suspend the rules and go to the Second Reading. Jeremy Pate, Director of Development Services gave a brief description of the ordinance. City Attorney Kit Williams: At Agenda Session, Alderman Gray requested this to be left on the Second Reading. This afternoon we heard from the applicant that he was not going to be able to attend the meeting. There are some questions I would like to ask him to make sure I understand what his Bill of Assurance is intended to mean. I don't think we should go to the third and final reading without him being here to be able to answer those questions. Alderman Marsh: I have some concerns about the lack of clarity in the Bill of Assurance. If the landowner does intend to limit this to just 400 single family homes, I suggest he say that those zones will be limited to single family homes with the maximum number of 400. As it is written now it would limit us to 400 single family homes, but an unlimited number of multi -family homes. City Attorney Kit Williams: I agree it is a vague Bill of Assurance. It would be helpful to have the drafter here so he can tell us clearly what the intent is. Alderman Marsh: After seeing the ambiguities in the Terminella land agreement, we need to be careful on these so we don't run into that same situation again. Alderman La Tour: I understand if we need to wait for questions to be answered for more clarity in any agreement we enter into as a city. I am hoping this isn't just another delay technique. This has been in the works for about a year and a half. We need to move this project to completion appropriately. Alderman Long: We will be able to discuss this next Monday night at the Ward 4 meeting. It will be good to hold it until the next Council meeting. This ordinance was left on the Second Reading RZN 16-5500 (335 E. 7th St./Niederman) Appeal: An ordinance to rezone that property described in rezoning petition RZN 16-5500 for approximately 0.23 acres located at 335 East 7th 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 20, 2016 Page 5 of 13 Street from NC, Neighborhood Conservation to DG, Downtown General. At the September 6, 2016 City Council meeting this ordinance was left on the first reading. City Attorney Kit Williams: During the interim from last meeting to this meeting, the applicant has submitted a Bill of Assurance. I have redrafted the ordinance to reflect the Bill of Assurance and provided a copy to you all. I ask that the ordinance be amended to reflect a Bill of Assurance has been offered. Alderman Petty: The applicant is a business partner of mine on some other projects, but I am not involved with this project. I will be recusing from the discussion. Alderman Long moved to amend the ordinance to reflect the attachment of a Bill of Assurance. Alderman Marsh seconded the motion. Upon roll call the motion passed 6-0. Alderman Petty recused. Alderman Gray was absent. City Attorney Kit Williams read the amended ordinance. Alderman Marsh moved to suspend the rules and go to the second reading. Alderman La Tour seconded the motion. Upon roll call the motion passed 6-0. Alderman Petty recused. Alderman Gray was absent. City Attorney Kit Williams read the ordinance. Jeremy Pate, Director of Development Services gave a brief description of the ordinance and the Bill of Assurance. Mayor Jordan: Is staff good with the Bill of Assurance? Jeremy Pate: Yes, sir. Zara Niederman, Applicant stated he spoke with Jeremy Pate and Quin Thompson in the Planning Department and came to a reasonable agreement. Alderman Marsh: I like what the developer has proposed. He has limited it to what it was previously designed to handle, but made some accommodations to deliver some accessory dwelling units on non -owner occupied lots. This is going to give us appropriate infill in that area as well as provide some affordable housing options. I support this. Alderman Marsh moved to suspend the rules and go to the third and final reading. Alderman Kinion seconded the motion. Upon roll call the motion passed 6-0. Alderman Petty recused. Alderman Gray was absent. City Attorney Kit Williams read the ordinance. Alderman Tennant: This is a creative thing this developer is doing in an area that will benefit from it greatly. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteviIle-ar.gov City Council Meeting Minutes September 20, 2016 Page 6 of 13 Alderman Kinion: I endorse the way this was handled, We didn't have an appropriate category to meet the needs of the developer to fit in the neighborhood with the appropriate infill, size and scale. Thank you to the developer for willing to work with our staff to come up with a creative solution. This will move us forward in looking at a new zoning category. Alderman La Tour: I am supporting this rezoning because I support development and growth in our city. I don't think the correct criteria is what I prefer or don't prefer. What is important is that we grow our city within the regulations we have established for that growth. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed 6-0. Alderman Petty recused. Alderman Gray was absent. Ordinance 5902 as Recorded in the office of the City Clerk Public Hearing: Condemnation and Possession for Water and Sewer Relocations: A resolution to authorize the City Attorney to seek condemnation and possession of certain lands owned by Drake St Property, LLC, 1155 properties, RPM1 properties - Fayetteville, LLC a/k/a RPM1 Properties, LLC, and Nelms, LLLP for the water and sewer relocations associated with Arkansas Highway and Transportation Department project BB0414 - Interstate 49 and Highway 112 Interchange, and to approve a budget adjustment. Mayor Jordan opened the Public Hearing. City Attorney Kit Williams: We have been able to settle with Nelms, LLLP for a very small easement we needed on the north side of the road, so we do not need to seek condemnation there. We are continuing to seek condemnation for the south side of the road over fairly long easements because we need to obtain legal possession of this easement. We need to move our water and sewer lines out of the way of the Highway Department who are about to begin the multi -million dollar improvement to that intersection. They are on a short time frame and asked us to move quickly. I. have been in contact with the owner and his attorney. They realize why we are doing this and we are going to continue negotiating in the future with them. I don't anticipate a trial, but in order to get possession legally, we have to seek this condemnation. I ask you to amend the current resolution. Alderman Marsh moved to amend the ordinance by removing Nelms, LLLP from the condemnation. Alderman Long seconded the motion. Upon roll call the motion passed 7-0. Alderman Gray was absent. There was no public comment. Mayor Jordan closed the Public Hearing. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 20, 2016 Page 7 of 13 Alderman Marsh moved to approve the resolution. Alderman Petty seconded the motion. Upon roll call the resolution passed 7-0. Alderman Gray was absent. Resolution 172-16 as recorded in the office of the City Clerk New Business: Library Improvement Bonds: An ordinance authorizing the issuance and sale of the City's Public Library Improvement Bonds for the purpose of financing a portion of the costs of Capital Improvements to the Fayetteville Public Library; 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 read the ordinance. Paul Becker, Chief Financial Officer gave a brief description of the ordinance. Alderman La Tour: At the beginning of this project, there was a cloud hanging over the old City Hospital property. There was a lawsuit. There was a question as to whether or not ownership would revert back to the family or if the city library could buy it. Has that been ruled on? Paul Becker, Chief Financial Officer: That has not been ruled on and Kit has been carefully following that. We should have a ruling by the end of the year. We have every reason to believe the heir contention will be turned down, but we don't know that for sure. Improvements will be made to the library whether it is on that property or other property. This would pay for the bond issue for those improvements. The architecture work will start once we know for sure where the location will be. Alderman La Tour: We are going to sell the bonds now, raise the $26 million, and we aren't sure we have the property yet to build on. The director of the library assures me they will spend the $26 million whether we have the property to build on or not, right? Paul Becker, Chief Financial Officer: That is not exactly what I said. This authorizes the issuance of the bond. The issuance of the bond we expect to be early next year. By that point we will have a ruling by the court. We won't issue the bonds until we know where the location is going to be and at that point move ahead with the project. We won't issue the bonds until that has been cleared up. The architectural plans would be contingent on precisely where it is. This authorizes the issuance of the bonds. It doesn't issue the bonds at this point. Alderman La Tour: The voters approved this. Do you remember what the vote count was? Paul Becker, Chief Financial Officer: I do not have that off the top of my head. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 20, 2016 Page 8 of 13 Alderman La Tour: I think it was around 3,000 people of the 20,000 registered voters in Fayetteville. Alderman Marsh moved to suspend the rules and go to the second reading. Alderman Petty seconded the motion. Upon roll call the motion passed 6-1. Alderman La Tour voting no. Alderman Gray was absent. City Attorney Kit Williams read the ordinance. Alderman Marsh moved to suspend the rules and go to the third and final reading. Alderman Petty seconded the motion. Upon roll call the motion passed 6-1. Alderman La Tour voting no. Alderman Gray was absent. City Attorney Kit Williams read the ordinance. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed 6-1. Alderman La Tour voting no. Alderman Gray was absent. Ordinance 5903 as Recorded in the office of the City Clerk 2016 Millage Levy: An ordinance levying a tax on the real and personal property within the City of Fayetteville, Arkansas, for the year 2016 fixing the rate thereof at 2.3 mills for General Fund Operations, 0.4 mills for the Firemen's Pension and Relief Fund, 0.4 mills for the Policemen's Pension and Relief Fund, 2.5 mills for Fayetteville Public Library Operations, and 1.2 mills for the Fayetteville Public Library expansion; and certifying the same to the County Clerk of Washington County, Arkansas. City Attorney Kit Williams read the ordinance. Paul Becker, Chief Financial Officer gave a brief description of the ordinance. Alderman Marsh moved to suspend the rules and go to the second reading. Alderman Petty seconded the motion. Upon roll call the motion passed 6-1. Alderman La Tour voting no. Alderman Gray was absent. City Attorney Kit Williams read the ordinance. Alderman Marsh moved to suspend the rules and go to the third and final reading. Alderman Petty seconded the motion. Upon roll call the motion passed 6-1. Alderman La Tour voting no. Alderman Gray was absent. City Attorney Kit Williams read the ordinance. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed 6-1. Alderman La Tour voting no. Alderman Gray was absent. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www,fayetteville-ar.gov City Council Meeting Minutes September 20, 2016 Page 9 of 13 Ordinance 5904 as Recorded in the office of the City Clerk RZN 16-5521 (SE of South St. & S. College Ave./Fayetteville Rentals): An ordinance to rezone that property described in rezoning petition RZN 16-5521 for approximately 0.67 acres located Southeast of South Street and South College Avenue from NC, Neighborhood Conservation to RSF-18, Residential Single Family, 18 units per acre. City Attorney Kit Williams read the ordinance. Jeremy Pate, Director of Development Services gave a brief description of the ordinance. The Planning Commission voted 7-0 in favor of the rezoning. Staff is in favor of the request. Alderman Petty: I am recusing because I brought the application forward. Alderman Marsh: I have received no public comment on this proposed rezoning. It seems to be consistent with the viewpoints I'm hearing from the neighborhood. Alderman Marsh moved to suspend the rules and go to the second reading. Alderman Long seconded the motion. Upon roll call the motion passed 6-0. Alderman Petty recused. Alderman Gray was absent. City Attorney Kit Williams read the ordinance. Alderman Tennant moved to suspend the rules and go to the third and final reading. Alderman Marsh seconded the motion. Upon roll call the motion passed 6-0. Alderman Petty recused. Alderman Gray was absent. City Attorney Kit Williams read the ordinance. Mayor Jordan asked shall the ordinance pass. Upon roll call the ordinance passed 6-0. Alderman Petty recused. Alderman Gray was absent. Ordinance 5905 as Recorded in the office of the City Clerk RZN 16-5535 (East End of Borick Dr./City Fire Training Center): An ordinance to rezone that property described in rezoning petition RZN 16-5535 for approximately 14.20 acres located at the east end of Borick Drive from I-2, General Industrial and R-A, Residential Agricultural to P-1, Institutional. City Attorney Kit Williams read the ordinance. Jeremy Pate, Director of Development Services gave a brief description of the ordinance. The Planning Commission voted 8-0 in favor. Staff recommends approval. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 20, 2016 Page 10 of 13 David Dayringer, Fire Chief. This is the training grounds you all designated for us to use last year. It has two different types of zoning right now. We would like to have one zoning so we can build a pad to put the training simulator on. I believe it is the appropriate zoning of the property for the way we are going to be using it. Alderman Long moved to suspend the rules and go to the second reading. Alderman Marsh seconded the motion. Upon roll call the motion passed 7-0. Alderman Gray was absent. City Attorney Kit Williams read the ordinance. Alderman Marsh moved to suspend the rules and go to the third and final reading. Alderman Long seconded the motion. Upon roll call the motion passed 7-0. Alderman Gray 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 Gray was absent. Ordinance 5906 as Recorded in the office of the City Clerk VAC 16-5536 (S. End of Marks Mill Ln./Summit PIace S/D): An ordinance to approve VAC 16-5536 submitted by Mike Baumann for property located at the south end of Marks Mill Lane to vacate portions of a utility, drainage and access easement. City Attorney Kit Williams read the ordinance. Jeremy Pate, Director of Development Services gave a brief description of the ordinance. The Planning Commission voted 8-0 in favor of the request. Staff supports the request. Alderman Long moved to suspend the rules and go to the second reading. Alderman Marsh seconded the motion. Upon roll call the motion passed 7-0. Alderman Gray was absent. City Attorney Kit Williams read the ordinance. Alderman Long moved to suspend the rules and go to the third and final reading. Alderman Marsh seconded the motion. Upon roll call the motion passed 7-0. Alderman Gray 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 Gray was absent. Ordinance 5907 as Recorded in the office of the City Clerk 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 20, 2016 Page 11 of 13 ADM 16-5538 (2180 W. Moore Ln./Springwoods C-PZD Modification): An ordinance to amend the Springwoods Commercial Planned Zoning District to allow single family dwellings as a use by right on tracts 2, 3, and 4 of lot 2. City Attorney Kit Williams read the ordinance. Jeremy Pate, Director of Development Services gave a brief description of the ordinance. The Planning Commission voted 8-0 in favor. Staff is recommending approval. City Attorney Kit Williams: I would like to ask the applicant a question. I'm sure you have read the requirements that were included in Exhibit C to the Planning Department's agenda memo. Are you in agreement with these new requirements that have been added? Applicant: Yes, sir. Alderman Long moved to suspend the rules and go to the second reading. Alderman La Tour seconded the motion. Upon roll call the motion passed 7-0. Alderman Gray was absent. City Attorney Kit Williams read the ordinance. Alderman Long moved to suspend the rules and go to the third and final reading. Alderman Marsh seconded the motion. Upon roll call the motion passed 7-0. Alderman Gray 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 Gray was absent. Ordinance 5908 as Recorded in the office of the City Clerk Arkansas State Highway and Transportation Commission Cost -Share Agreement: A resolution to approve a cost -share agreement with the Arkansas State Highway and Transportation Commission to add a pedestrian and bicycle shared use path to the Wedington Drive bridge over Interstate 49 with the city's portion of the cost not to exceed $415,000.00. Chris Brown, City Engineer gave a brief description of the resolution. Alderman La Tour: Ward 4 thanks you and I would like to thank the state too. We are excited about the changes coming. Alderman Long: Thank you to Chris and the rest of the staff. You have worked hard on this as well as the Transportation Committee. Thank you Alderman Petty for your work. It will be a very important connection. People are excited to see this happen. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov City Council Meeting Minutes September 20, 2016 Page 12 of 13 Alderman Tennant: I don't think there is a way to overstate the importance of pedestrian access from one side to the other. The commercial development that could be built would benefit greatly if there was a way to those commercial developments other than getting in traffic and sitting at stoplights. I appreciate this and it will be very good for the area. Alderman Petty: I read some emails that went back and forth between city staff and the Highway Department. I was impressed with the way the issue was handled. I don't think anything differently could have been done about this situation. I'll support it because it is a need. I'm disappointed with the way our state agency has handled it. If the agency is relying on the guidance set by the American Association of State Highway and Transportation Officials, I want to remind them that at the very beginning of those guidance documents there's a section on how they are able to do things that are different than the tables and diagrams would suggest. When you have 20,000 people who live west of the interstate whether out of necessity or preference and would like to walk or ride their bike, they deserve a safe way to do that. I don't think there is anybody who studies this issue anywhere that thinks the side path we are proposing and asking for is less safe than the Highway Department's proposal for bike lanes. I want to appeal to their better nature and ask them to please use their engineering judgment and do what is right for the people of Fayetteville and for the people of the State of Arkansas. As a taxpayer I expect them to be more judicious with our tax dollars. Mayor Jordan: My job is to make sure that people stay safe in the city. Putting an overpass in and striping off a line where bicyclist can practically clean a mirror on a car as they go by, I didn't feel was safe. We have spent a lot of time negotiating and this is the best I can do. One way or the other we need to put the side path in to keep everyone safe. Alderman Long moved to approve the resolution. Alderman Tennant seconded the motion. Upon roll call the resolution passed 7-0. Alderman Gray was absent. Resolution173-16 as recorded in the office of the City Clerk Announcements: Jeremy Pate: Bikes, Blues & Barbeque starts on Wednesday, September 21, 2016 and goes through the rest of the week. Be aware of a lot of visitors in our town and be safe. Alderman Long: There will be a Ward 4 meeting on September 26, 2016 at 6:00 p.m. in Room 111 at City Hall. We will be discussing the Razorback Golf Course and the Mt. Comfort Road rezonings. Susan Norton, Communications & Marketing Director: Fayetteville congratulates Miss America, Savvy Shields. Thank you to Alderman Tennant for hooking us up with the parade organizers. Save the date for the parade welcoming Savvy on October 22, 2016. It will begin at 4:00 p.m. at Central United Methodist and conclude at the Greek Theatre. 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www,fayetteville-ar.gov City Council Meeting Minutes September 20, 2016 Page 13 of 13 Our second of four Fall Bulky Waste Cleanups will be on October 1, 2016. Details are on the city website. The Business License renewal project that began September 1, 2016 continues until October 31, 2016. Information is on the city website. September 24, 2016 will be the Yvonne Richardson Community Center annual fundraiser from 6:00 p.m. to 10:00 p.m. The theme is `Tailgating With The Andersons' at Mike Anderson's home. It is $75.00 a ticket. On the city website will be information about free parking for the Bikes, Blues & Barbeque event. Please be safe and allow extra time to plan your route. City Council Agenda Session Presentations: Agenda Session Presentation - 2017 General Fund Budget Discussion City Council Tour: None Adjournment: 7:05 p.m. Li el Jorda yor Sondra E. Smith, City Clerk Treasurer 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 www.fayetteville-ar.gov NORTHWEST AuAmAS Democrat � (fan& AFFIDAVIT OF PUBLICATION I, Cathy Wiles, do solemnly swear that I am the Legal Clerk of the Northwest Arkansas Democrat- Gazette, printed and published in Washington and Benton County, Arkansas, and of bona fide circulation, that from my own personal knowledge and reference to the files of said publication, the advertisement of: CITY OF FAYETTEVILLE Ordinance 5903 Was inserted in the Regular Editions on: SEPT. 29, 2016 Publication Cost: $848.90 69t� �C� - Cathy Wiles Subscribed and sworn to before me This A day ofSh*,1 2016. '1 . NWary Public I 1 My Commission Expires: �\\11111I11j� 'NOTARY' .p�l�, PUBLIC �,#12401379a c>✓ i'��a,1012A��� .C, `ON1 C&3���`� Ordinance: 5903 File Number: 2016-0413 LIBRARY IMPROVEMENT BONDS: AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF THE CITY'S PUBLIC LIBRARY IMPROVEMENT BONDS FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF CAPITAL IMPROVEMENTS TO THE FAYETTEVILLE PUBLIC LIBRARY; 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, in compliance with the provisions of Amendment 30 to the Constitution of the State of Arkansas, as amended by Amendment 72 to the Constitution of the State of Arkansas (as amended, "Amendment 30"), and the Local Government Library Bond Act of 1993, codified as Arkansas Code Annotated (1998 Repl. & 2016 Supp.) Sections 14-142- 201 et seq. (as from time to time amended, the "Act"), petitions were delivered to the City requesting the submission or questions to the qualified electors of the City on the levying of certain ad valorem taxes and the issuance of bonds secured thereby to finance a portion of the costs of acquiring, constructing and equipping various capital improvements to the Fayetteville Public Library, including, but not limited to, new buildings, parking decks, additions, annexes and other expansions and renovations (collectively, the "Project"); and WHEREAS, in compliance with the provisions of Amendment 30 and the Act and pursuant to the provisions of Ordinance No. 5876 of the City, adopted and approved on May 17, 2016 (the "Election Ordinance"), there was submitted to the qualified electors of the City a question regarding the levy of one and two -tenths (1.2) mill city tax on real and personal property within the City (the "Tax") to be pledged to an issue or issues of capital improvement bonds not to exceed $26,500,000 in aggregate principal amount for the purpose of financing the Project; and WHEREAS, at a special election held August 9, 2016, a majority of the qualified electors of due City voting on the question approved the levy of the Tax and the issuance of the capital improvement bonds; and WHEREAS, as authorized under the provisions of Amendment 30 and the Act and as approved by the qualified electors of the City, the City has now determined to issue and sell its Library Improvement Bonds in aggregate principal amount not to exceed $26,500,000 (the "Bonds"), in order to provide for the funding of the Project; and WHEREAS, the City has made arrangements for the sale of the Bonds to Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), pursuant to the terms of a Bond Purchase Agreement between the City and the Underwriter (the "Bond Purchase Agreement") in substantially the form presented to and before this meeting; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 30 and the Act, there is hereby authorized the issuance of bonds of the City to be designated as "Library Improvement Bonds" (the "Bonds"). The Bonds shall be issued in one or more series in aggregate principal amount not to exceed Twenty -Six Million Five Hundred Thousand Dollars ($26,500,000) and shall mature not later than December 1, 2047, in the principal amounts and bearing 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 Bonds shall not be general obligations of the City, but shall be special obligations secured by and payable solely from proceeds of the Tax, the Special Tax Collections and other moneys, finds and amounts more specifically identified in the Trust Indenture (each as defined below). The proceeds of the Bonds will be utilized to finance the costs of the Project, to establish a debt service reserve for the Bonds or to purchase a surety bond or debt service reserve insurance policy for reserve purposes, if deemed economically beneficial, to pay a premium for bond insurance, if deemed economically beneficial, and to pay printing, underwriting, legal and other expenses incidental to the issuance of the Bonds. The Mayor, City Clerk and the City's Chief Financial Officer are hereby authorized to take all action necessary to accomplish the acquisition, construction and equipping of the Project. The Bonds shall be issued in the form and denominations, shall be dated, shall be numbered, shall mature, shall be subject to redemption prior to maturity, and shall contain such other terms, covenants and conditions, all as set forth in the Trust Indenture submitted to this meeting. The Mayor is hereby authorized and directed to execute and deliver the Bonds in one or more series, each series to be in substantially the form thereof contained in the Trust Indenture submitted to this meeting, and the City Clerk is hereby authorized and directed to execute and deliver the Bonds and to affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby authorized to confer with the Trustee, 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 2. In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, there are hereby pledged all of the receipts of the one and two -tenths (1.2) mill city tax on real and personal property within the City, together with all penalties and interest payable with respect thereto (the "Tax"), approved by the electors of the City, as well as the City's allocable portion of the one-half of one percent (0.5%) statewide sales and use tax implemented pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79") which is intended to offset any decreases in collections of the Tax resulting from the homestead exemption implemented pursuant to Amendment 79 (the "Special Tax Collections"). The City Council covenants to levy the Tax in 2016 for collection in 2017, and to levy the Tax in subsequent years as provided under the laws of the State of Arkansas until such time as the Bonds are no longer outstanding or sufficient funds are on deposit with the Trustee to redeem the Bonds in full. The City covenants and agrees that all receipts from the Tax and the Special Tax Collections will be deposited and will be used solely as provided in the Trust Indenture (as defined below). In order to pay the principal of and interest on the Bonds as they mature or are called for redemption prior to maturity, together with fees and costs incidental thereto, there are hereby appropriated out of the proceeds of the Tax and the Special Tax Collections the sums necessary to pay the same. 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 a Trust Indenture (tine "Trust Indenture"), by and between the City and Simmons Bank, Pine Bluff, Arkansas, as trustee (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 the Tax receipts and the terms of the Bonds. The Mayor is hereby authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete the Trust Indenture in substantially the form submitted to this meeting, with such changes as shall be approved by such persons executing the Trust Indenture, their execution to constitute conclusive evidence of such approval. (Advice is given that a copy of the Trust Indenture in substantially the form authorized to be executed is on file with the City Clerk and is available for inspection by any interested person.) Section A, 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 terns of line 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, tine 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 Tax 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 (tine "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. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider funding a debt service reserve be funded in conjunction with the issuance of the Bonds. Alternatively, the Underwriter has proposed that the City consider the purchase of a surety bond or a debt service reserve insurance policy with a portion of the proceeds of the Bonds. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a surety bond or a debt service reserve insurance policy with respect to the Bonds. Section 8. In order to secure lower interest rates on the Bonds, the Underwriter has proposed that the City consider the purchase of a policy of bond insurance with a portion of the proceeds of the Bonds, which policy would guarantee the payment of the principal of and interest on the Bonds when due. If deemed economically advantageous by the Mayor, upon the advice of the Underwriter, the Mayor is hereby authorized to execute an insurance commitment and to do any and all things necessary to accomplish the delivery of a bond insurance policy with respect to the Bonds. Section 9. The Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and all things necessary to effect the issuance, sale, execution and delivery of the Bonds and to effect the execution and delivery of the Trust Indenture, the Bond Purchase Agreement, the Official Statement, the Continuing Disclosure Agreement and a Tax Regulatory Agreement relating to the tax exemption of interest on the Bonds, and to perform all of tile, obligations of the City under and pursuant thereto. The Mayor and the City Clerk are finrther authorized and directed, for and on behalf of the City, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of such authority or to evidence the exercise thereof. Section 10. 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 make reimbursement from the proceeds of the Bonds for preliminary costs of the Project and related expenses advanced by or on behalf of 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. Section 13. All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. PASSED and APPROVED on 9/20/2016 Approved: Lioneld Jordan, Mayor Attest: Sondra E. Smith, City Clerk Treasurer 73867173 Sept. 30,2016 EXHIBIT D COSTS OF ISSUANCE Bond Counsel Fee and Expenses (estimated through closing and transcript preparation) Kutak Rock LLP 124 West Capitol Avenue, Suite 2000 Little Rock, AR 72201 $60,000.00 Rating Fee Standard & Poor's Corporation 2542 Collection Center Drive Chicago, IL 60693 Trustee Acceptance Fee Simmons First Trust Company, N.A. 501 Main Street Pine Bluff, AR 71601 Reimbursement for Ordinance Publication Expenses City of Fayetteville 113 West Mountain Fayetteville, AR 72701 Attn: Finance Director Underwriting Expenses Stephens Inc. 3425 North Futrall Drive, Suite 201 Fayetteville, AR 72703 Total: 24,000.00 3,500.00 1,521.00 5,594.10 94 615.10 D-1 4827-8895-6235.1 KUTAK ROCK LLP LITTLE ROCK, ARKANSAS Telephone 501-975-3000 Facsimile 501-975-3001 Federal ID 47-0597598 July 19, 2017 Mr. Paul Becker City of Fayetteville 113 West Mountain Fayetteville, AR 72701 $26,500,000 CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BONDS SERIES 2017 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 as Bond Counsel to the City of Fayetteville, Arkansas in connection with the issuance of the captioned Series 2017 Bonds. Total for Fees and Expenses: Invoice No. 2324941 Matter No. 1123 401-2 8 $60,000.00 4828-1333-9467.1 S&P Global Ratings 0201 MR. PAUL BECKER CITY OF FAYETTEVILLE 113 W. MOUNTAIN FAYETTEVILLE AR 72701 Standard & Poor's Financial Services. LLC Federal I.D.: 26-3740348 Description of Services 101011 ANALYTICAL SERVICES RENDERED IN CONNECTION WITH: US$25.690,000 City of Fayetteville. Arkansas. Library Improvement Bonds. Series 2017. dated: Date of delivery, due: February 01. 2047 TOLD Pj a-1 UJAA, FOR INQUIRIES PLEASE CONTACT: KIRAN CHAVALI COLLECTIONSUSRATINGS@SPGLOBAL.COH PHONE: 1-800-767-1896 EXT #6 FAX: 1-212-438-5178 RECEIVE® JUN 1 2 2017 CITY OF FAYETTEVILLE MAYOR'S OFFICE For inquiries contact the client services representative fisted on this invoice. Do not return it or direct any inquiries about the invoice to credit ratings analysts. S&P Global Ratings maintains a separation of commercial and analytical activities. Please note that our credit ratings analysts are not permitted to communicate, negotiate, arrange or collect credit rating fees. Please reference invoice or statement number on all checks and wive transfers This Invoice Due and Payable As Of: 05/30/17 Invoice No.: 11330651 Customer No.: 1000102865 Invoice Date: 05/30/17 Tax Exempt No.: Page No.. 1 Print Date: 05/30117 Amount $24.000.00 INVOICE TOTAL $24.000.00 USD Make Checks Payable o: To insure Proper Credit, DETACH HERE ♦ and RETURN THIS PORTION With Your Remittance S&P Global Standard & Poor's Financial Smices. LLC Invoice No.: 11330651 Ratings Federal LD.: 26-3740348 Customer No.: 1000102865 Invoice Date: 05130/17 0201 Billed To: MR. PAUL BECKER CITY OF FAYETTEVILLE 113 W. MOUNTAIN FAYETTEVILLE AR 72701 Wire Transfer To: Please include invoice # Bank of America S&P Global Ratings Account # 12334-02500 ABA # 0260-0959-3 Or E-mail: cashappsCaspglobal.com 10001028650 11330651 02400000 1 700 10 07 0517 7 Remit To: S&P GLOBAL RATINGS 2542 COLLECTION CENTER DRIVE CHICAGO, IL 60693 TOTAL AMOUNT DUE: $24.000.00 USD AMOUNT ENCLOSED- $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds Series 2017 Clearing: CUSIP Service Breau DTC I-Preo Misc. (Postage, Federal Express, Ticket Charges) Day Loan Tota I Wire Instructions: Bank of America ABA:026009593 Credit: Stephens Inc. A/C #: 000089203828 FFC: Fayetteville, Arkansas (362083) Attn: Michele Casavechia x2297 Stephens Jackson T. Stephens, 1923-2005 Chairman Emeritus in Perpetuity $723.00 860.00 2,267.99 1,029.00 714.11 $5,594.10 Stephens Inc 111 Center Street 501-377-2000 (t) www.stephens.com Little Rock, AR 72201 501-377-2666 (f) 800-643-9691 Form 8038-G Information Return for Tax -Exempt Governmental Obligations (Rev. September2011) ► 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. ■UffH Renortina Authoritv If Amended Return. check here ► f—) 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 Gordon M. Wilbourn, Kutak Rock LLP, bond counsel 501-975.3000 4 Number and street (or P.O. box if mail is not delivered to street address) Room/suite 5 Report number (For IRS Use Only) 113 West Mountain Street 3 6 City, town, or post office, state, and ZIP code 7 Date of issue Fayetteville, AR 72701 07-19.17 8 Name of issue 9 CUSIP number Library Improvement Bonds, Series 2017 31266W AP8 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 �9.72 Tll Tvne 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 ► library 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 2-7,268,6471 00 • . Description of Obligations. Complete for the entire issue for which this form is being filed. (a) Final maturity date (b) Issue price (c) Stated redemption price at maturity (d) Weighted average maturity (e) Yield 21 1-1-47 27,268,647 26,500,000 17.344 years 3.10.3 % Limm Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . 22 0 23 27,268,647 23 Issue price of entire issue (enter amount from line 21, column (b)) . . . . . 24 Proceeds used for bond issuance costs (including underwriters' discount) . . 24 359,615 25 Proceeds used for credit enhancement . . . . . . . . . . . . 25 0 26 Proceeds allocated to reasonably required reserve or replacement fund . 26 0 27 Proceeds used to currently refund prior issues . . . . . . . . . 27 0 28 Proceeds used to advance refund prior issues . . . . . . . . . 28 0 29 Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . . 29 359,615 30 26,909,032 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . ► years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . ► years 33 Enter the last date on which the refunded bonds will be called (MM/DD/YYYY) . . . . . . ► 34 Enter the date(s) the refunded bonds were issued ► (MM/DD/YYYY) 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 Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35 0 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC) (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 36a 0 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 Ol- 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)(1)(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 ► 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 . . . . . . . . ► ❑✓ 44 If the issuer has established written procedures to monitor the requirements of section 148, check box . . . . . ► ❑✓ 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 ► Under pan aitie of perjury, Dare that I have ex mined this return and accompanying schedules and statements, and to the best of my knowledge Signature and belief, th a%true, correc , nd complete. I rther declare that I consent to the IRS's disclosure of the issuer's return information, as necessary to and proce t ' eturn, to th on hat I have a orized above. Consent ' ,/�---� +-� I — �- 1') ' Lioneld Jordan, Mayor igna re of issu autho ' ed representative Date Type or print name and title Paid Print/Type prepare tzm Prep er's signature Date Check ❑ if PTIN Preparer Gordon M. Wilbourn �_ self-employed P01079125 Use Only Firm's name ► Kutak Rock LLP Firm's EIN ► 47-0597598 Firm's address ► 124 W. Capitol, Suite 2bQ0, Li tle Rock, AR 72201 Phone no. 501-975.3000 Form 8038-G (Rev. 9-2011) ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to: 0. �4 � I.I�S�v l wt , ul� �I ���I I����I�II� I��II IIIIIIfIIllllll Ilf 9590 9402 1731 6074 8699 85 2. Article Number (Transfer from service label) 7016 0910 0000 2527 9953 PS Form 3811, July 2015 PSN:7530-02-000-9053 A. Signature ® Agent X ❑ Addressee B. Received by (Printed Name) C. Date of Delivery Is delivery address different from item 1? 0 Yes If YES, enter delivery address below. ® No & J1IL 2 3. erVice Type ❑Priority Mail Expresso ❑ dull Signature Adult Signature Restricted Delivery Certified Mail® ❑ Re istered MaiIT^' ❑ glstered Mal Restricted elivery ❑ Certified Mail Restricted Delivery Return Receipt for ❑ Collection Merchandise n Delivery ❑ Si nature Confirmation' ❑ Collect on Delivery Restricted Delivery/ Insured Mail ❑ Signature Confirmation Restricted Delivery Insured Mail Restricted Delivery i —(over$500) m I_n Domestic Er fU Certified MailFee Lr) ' 3 ru $ t. Ext Services & Fees (checkbox, adr Q Eg Return Receipt (hardcopy) $ Q ❑ Return Receipt (electronic) 6 Q ❑ Certified Mail Restricted Delivery $ Q ❑Adult Signature Required $ Q ❑Adult Signature Restricted Delivery$ r-q Postage 1T $ Q Total Postage and Fees . LI $ r-q Q _ S e pr Box No, Domestic Return Receipt 'n $0H l Postmark Here ����� o CITY OF FAYETTEVILLE, ARKANSAS, Issuer to SIMMONS BANK, Trustee TRUST INDENTURE Dated as of July 1, 2017 Providing for: $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds Series 2017 Prepared by: Kutak Rock LLP 124 West Capitol Avenue, Suite 2000 Little Rock, Arkansas 72201 EXECUTION COPY 4827-1462-7128.3 TABLE OF CONTENTS Page (This Table of Contents is not part of the Trust Indenture and is only for convenience of reference.) Parties............................................................................................................................................ I Recitals.......................................................................................................................................... l GrantingClauses...........................................................................................................................2 ARTICLE I DEFINITIONS Section101. Definitions...............................................................................................................3 Section102. Use of Words..........................................................................................................10 ARTICLE II THE BONDS Section 201. Security for Bonds.................................................................................................. I 1 Section 202. Authorized Amount................................................................................................ I I Section 203. Details of Bonds......................................................................................................12 Section204. Form of Bonds........................................................................................................12 Section205. Payment...................................................................................................................12 Section206. Execution................................................................................................................13 Section 207. Authentication.........................................................................................................13 Section 208. Delivery of Bonds...................................................................................................13 Section 209. Mutilated, Destroyed or Lost Bonds.......................................................................14 Section 210. Registration and Transfer of Bonds........................................................................15 Section211. Cancellation............................................................................................................16 Section 212. Additional Bonds....................................................................................................16 Section 213. Superior Obligations Prohibited.............................................................................16 Section 214. Temporary Bonds....................................................................................................17 Section 215. Book -Entry Bonds; Securities Depository..............................................................17 ARTICLE III REDEMPTION OF BONDS BEFORE MATURITY Section 301. Redemption of Bonds............................................................................................18 Section302. Notice.....................................................................................................................20 Section 303. Selection of Bonds to be Redeemed......................................................................20 Section 304. Surrender of Bonds Upon Redemption..................................................................21 Section 305. Redemption in Part................................................................................................21 4827-1462-7128.3 ARTICLE IV GENERAL COVENANTS AND REPRESENTATIONS Section 401. Payment of Principal, Premium and Interest..........................................................21 Section 402. Performance of Covenants.....................................................................................22 Section 403. Instruments of Further Assurance..........................................................................22 Section 404. Recordation and Filing...........................................................................................22 Section 405. Inspection of Books...............................................................................................22 Section406. Tax Covenants.......................................................................................................22 Section 407. Trustee's and Paying Agent's Fees and Expenses.................................................23 Section 408. Construction of Project; Certification of Completion Date...................................23 Section 409. Encumbrances........................................................................................................23 Section 410. Continuing Disclosure...........................................................................................23 Section411. [Reserved]..............................................................................................................23 Section 412. Pledge of Tax Receipts..........................................................................................23 ARTICLE V REVENUES AND FUNDS Section 501. Creation of Funds...................................................................................................24 Section502. Project Fund...........................................................................................................24 Section503. Revenue Fund........................................................................................................25 Section504. Bond Fund..............................................................................................................27 Section 505. Cost of Issuance Fund............................................................................................27 Section 506, Redemption Fund...................................................................................................27 Section507. Rebate Fund...........................................................................................................28 Section508. [Reserved]..............................................................................................................29 Section 509. Cessation of Fund Deposits...................................................................................29 Section 510. Separate Accounts Authorized...............................................................................29 ARTICLE VI INVESTMENTS Section 601. Investment of Moneys............................................................................................29 Section 602. Investment Earnings...............................................................................................29 Section 603. Valuation of Funds.................................................................................................30 Section 604. Responsibility of Trustee.......................................................................................30 ARTICLE VII DISCHARGE OF LIEN Section 701. Discharge of Lien...................................................................................................30 Section 702, Bonds Deemed Paid...............................................................................................30 Section 703. Non -Presentment of Bonds....................................................................................31 ii 4827-1462-7128.3 ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS Section 801. Events of Default...................................................................................................31 Section 802. Acceleration...........................................................................................................32 Section 803. Other Remedies; Rights of Bondholders...............................................................32 Section 804. Right of Bondholders to Direct Proceedings.........................................................33 Section 805. Appointment of Receiver.......................................................................................33 Section806. Waiver....................................................................................................................33 Section 807. Application of Moneys...........................................................................................33 Section 808. Remedies Vested in Trustee...................................................................................34 Section 809. Rights and Remedies of Bondholders....................................................................34 Section 810. Termination of Proceedings...................................................................................35 Section 811. Waivers of Events of Default.................................................................................35 ARTICLE IX TRUSTEE AND PAYING AGENT Section 901. Acceptance of Trusts..............................................................................................36 Section 902. Fees, Charges and Expenses of Trustee and Paying Agent....................................38 Section 903. Additional Duties of Trustee..................................................................................38 Section 904. Notice to Bondholders of Default..........................................................................39 Section 905. Intervention by Trustee..........................................................................................39 Section 906. Merger or Consolidation of Trustee.......................................................................39 Section 907. Resignation by Trustee...........................................................................................39 Section 908. Removal of Trustee................................................................................................40 Section 909. Appointment of Successor Trustee........................................................................40 Section 910. Concerning Any Successor Trustee.......................................................................40 Section 911. Reliance Upon Instruments....................................................................................40 Section 912. Appointment of Co-Trustee...................................................................................40 Section 913. Designation and Succession of Paying Agent........................................................41 ARTICLE X SUPPLEMENTAL INDENTURES Section 1001. Supplemental Indentures Not Requiring Consent of Bondholders ......................41 Section 1002. Supplemental Indentures Requiring Consent of Bondholders .............................42 Section 1003. Effect of Supplemental Indentures.......................................................................43 ARTICLE XI [RESERVED] 4827-1462-7128.3 ARTICLE XII MISCELLANEOUS Section 1201. Consents, etc. of Bondholders.............................................................................43 Section1202. Notices.................................................................................................................44 Section 1203. Limitation of Rights.............................................................................................44 Section1204. Severability..........................................................................................................44 Section 1205. Applicable Provisions of Law..............................................................................45 Section 1206. Counterparts.........................................................................................................45 Section 1207. Successors and Assigns........................................................................................45 Section1208. Captions...............................................................................................................45 Section 1209. Photocopies and Reproductions...........................................................................45 Section 1210. Bonds Owned by City..........................................................................................45 Signatures..................................................................................................................................... 46 Exhibit A Form of Series 2017 Bond................................................................................. A-1 Exhibit B Form of Coverage Certificate............................................................................. B-1 Exhibit C Form of Requisition............................................................................................ C-1 1V 4827-1462-7128.3 TRUST INDENTURE THIS TRUST INDENTURE, made and entered into as of July 1, 2017, by and between the CITY OF FAYETTEVILLE, ARKANSAS, a city of the first class organized under and existing by virtue of the laws of the State of Arkansas (the "City"), as party of the first part, and SIMMONS BANK, a state banking corporation organized under and existing by virtue of the laws of the State of Arkansas, and having its principal corporate trust office in Pine Bluff, Arkansas (the "Trustee"), as party of the second part; WITNESSETH: WHEREAS, the City is authorized and empowered under the provisions of Amendment 30 to the Constitution of the State of Arkansas, as amended by Amendment 72 to the Constitution of the State of Arkansas (as amended, "Amendment 30"), the Local Government Library Bond Act of 1993, codified as Arkansas Code Annotated (1998 Repl. & 2015 Supp.) §§14-142-201 et seq. (as from time to time amended, the "Act"), and Ordinance No. 5903 duly adopted by the City Council of the City on September 20, 2016 (the "Authorizing Ordinance"), to issue its bonds for the purpose of financing capital improvements to the Fayetteville Public Library; and WHEREAS, in compliance with the provisions of Amendment 30 and the Act, and pursuant to the provisions of Ordinance No. 5876, duly adopted by the City Council of the City on May 17, 2016, there was submitted to the qualified electors of the City a question regarding the levy of a one and two -tenths (1.2) mill city tax on each dollar of assessed valuation of the real and personal property within the City (the "Library Tax"), to be pledged to an issue or issues of capital improvement bonds not to exceed $26,500,000 in aggregate principal amount for the purpose of financing a portion of the cost of certain capital improvements to the Fayetteville Public Library (the "Project," as more particularly defined herein); and WHEREAS, at a special election held August 9, 2016, a majority of the qualified electors of the City voting on the aforementioned question approved the levy of the Library Tax and the issuance of capital improvement bonds to be secured thereby; and WHEREAS, pursuant to Amendment 30, the Act and the Authorizing Ordinance, the City has now determined to issue its Library Improvement Bonds, Series 2017 (the "Series 2017 Bonds"), in the aggregate principal amount of $26,500,000 for the purpose of (i) financing the costs of acquiring, constructing and equipping the Project, and (ii) paying the costs of issuance of the Series 2017 Bonds; and WHEREAS, the Series 2017 Bonds and the Trustee's Certificate of Authentication to be endorsed thereon are to be in substantially the forms set forth in Exhibit A hereto, with necessary and appropriate variations, omissions and insertions as permitted or required by this Indenture; and 4827-1462-7128.3 WHEREAS, the execution and delivery of this Indenture and the issuance of the Series 2017 Bonds have been in all respects duly and validly authorized by the Authorizing Ordinance; and WHEREAS, all things necessary to make the Series 2017 Bonds, when authenticated by the Trustee and issued as in this Indenture provided, the valid, binding and legal obligations of the City according to the import thereof, and to constitute this Indenture a valid obligation of the City and a valid pledge of the receipts of the Library Tax, together with all penalties and interest payable with respect thereto, and the pro rata portion of the receipts of a one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 to the Constitution of the State of Arkansas (the "Special Tax Collections") to the payment of the principal of and premium, if any, and interest on the Series 2017 Bonds, as specified in and in accordance with the provisions of the Act and the provisions hereof, have been done and performed, and the creation, execution and delivery of this Indenture and the creation, execution, issuance and delivery of the Series 2017 Bonds, subject to the terms hereof, have in all respects been duly authorized; NOW, THEREFORE, KNOW ALL PERSONS BY THESE PRESENTS, THIS INDENTURE WITNESSETH: That the City, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the Series 2017 Bonds by the holders and owners thereof, and the sum of Ten Dollars ($10.00), lawful money of the United States of America, to it duly paid by the Trustee, at or before the execution and delivery of these presents, and for other good and valuable consideration, the receipt of which is hereby acknowledged, and in order to secure the payment of the principal of and premium, if any, and interest on the Series 2017 Bonds and all Additional Bonds (hereinafter defined), if any, according to their tenor and effect and to secure the performance and observance by the City of all the covenants expressed or implied herein and in the Series 2017 Bonds and Additional Bonds (collectively, the "Bonds"), subject to all of the provisions hereof, does hereby grant, bargain, sell, convey, mortgage, assign, transfer and pledge unto the Trustee, and unto its successor or successors in trust, and to them and their assigns forever, for the security of the performance of the obligations of the City hereinafter set forth, the following: 1. The proceeds of the Library Tax and the Special Tax Collections (collectively, the "Tax Receipts"), but subject to the provisions of this Indenture pertaining thereto, including the depositing of such Tax Receipts into the Revenue Fund, Bond Fund and Redemption Fund, and the application of the moneys in the Revenue Fund, Bond Fund and Redemption Fund as provided for hereinafter. 2. The Bond Fund, Redemption Fund, Project Fund and all other funds held by the Trustee pursuant to the Indenture except the Rebate Fund, and all moneys and investments in the pledged 2 4827-1462-7128.3 funds but subject to the provisions of this Indenture pertaining thereto, including the making of disbursements therefrom. 3. Any and all other moneys, rights and interests of every kind and nature which are from time to time hereafter conveyed, pledged, assigned or transferred by delivery or by writing or transfer of any kind, as and for additional security hereunder, by the City or by any other person, firm or corporation, to the Trustee, which is hereby authorized to receive any and all such property at any time and at all times and to hold and apply the same subject to the terms hereof. TO HAVE AND TO HOLD all the same (the "Trust Estate") with all privileges and appurtenances hereby conveyed and assigned, or agreed or intended so to be, to the Trustee and its successors in said trusts and to them and their assigns forever; IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit, security and protection of all owners of the said Bonds issued under and secured by this Indenture without privilege, priority or distinction as to lien or otherwise of any of said Bonds over any of the other Bonds; provided, however, that if the City, its successors or assigns, shall well and truly pay, or cause to be paid, the principal of, premium, if any, and interest due on the Bonds, at the times and in the manner provided in the Bonds according to the true intent and meaning thereof, and shall make the payments as required under this Indenture or shall provide, as permitted hereby, for the payment thereof by depositing with or causing to be deposited with the Trustee the entire amount due or to become due thereon, and shall well and truly keep, perform and observe all of the covenants and conditions pursuant to the terms of this Indenture to be kept, performed and observed by it, and shall pay to the Trustee all sums of money due or to become due to it in accordance with the terms and provisions hereof, then upon such final payments or deposits this Indenture and the lien and rights hereby granted shall cease, determine and be void; otherwise, this Indenture to be and remain in full force and effect. THIS INDENTURE FURTHER WITNESSETH that, and it is expressly declared that, all Bonds issued and secured hereunder are to be issued, authenticated and delivered and all said revenues and income hereby pledged are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the City has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the holders from time to time of the Bonds or any part thereof, as follows, that is to say: ARTICLE I DEFINITIONS Section 101. Definitions. In addition to the words and terms elsewhere defined in this Indenture, the following words and terms as used in this Indenture shall have the following meanings: "Account" means an Account established by Article V of this Indenture. 3 4827-1462-7128.3 "Act" means the Local Government Library Bond Act of 1993, codified as Arkansas Code Annotated (1998 Repl. & 2015 Supp.) §§14-142-201 et seq., as from time to time amended. "Additional Bonds" means Bonds in addition to the Series 2017 Bonds which are issued under the provisions of Section 212 of this Indenture. "Additional Facilities" means land, buildings, structures, machinery, furniture, fixtures, equipment and all related or necessary tangible property constituting improvements which are permitted to be financed under the provisions of Amendment 30 and the Act. "Amendment 30" means Amendment 30 to the Constitution of the State of Arkansas, as amended by Amendment 72 to the Constitution of the State of Arkansas. "Amendment 79" means Amendment 79 to the Constitution of the State of Arkansas. "Annual Debt Service" means, with respect to all or any particular amount of Bonds, the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the amount of such payment which is provided from the proceeds of the sale of Bonds or from sources other than Tax Receipts. "Authorized Representative" means either the Mayor or the Finance Director of the City and such additional persons as from time to time may be designated to act on behalf of the City by a Certificate furnished to the Trustee containing the specimen signature thereof and executed on behalf of the City by its Mayor. "Authorizing Ordinance" means Ordinance No. 5903, adopted by the City on September 20, 2016, which authorized the issuance of the Series 2017 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 designated by the City and acceptable to the Trustee. "Bond Fund" means the fund by that name created and established in Section 501 of this Indenture. "Bonds" means the Series 2017 Bonds and all Additional Bonds, if any, authenticated and delivered under this Indenture. "Book -Entry System" means the book -entry system maintained by the Securities Depository and described in Section 215 of this Indenture. 4 4827-1462-7128.3 "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 (or the date upon which all expenditures have been made with respect to the portion of a Project being financed with proceeds of Bonds) or the date upon which damaged Project facilities are replaced in normal and continuous operation. "Continuing Disclosure Agreement" means, collectively, each Continuing Disclosure Agreement between the City and the Trustee, dated the date of issuance and delivery of a series of Bonds, as originally executed and as amended from time to time in accordance with the terms thereof. "Cost of Issuance Fund" means the fund by that name created and established in Section 501 of this Indenture. "Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, including, but not limited to, underwriting discounts, fees and expenses, election expenses, publication expenses, expenses of printing, reproducing, filing and recording documents, initial fees and charges of the Trustee and Paying Agent, fees and expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement for the Bonds, costs of execution, transportation and safekeeping of the Bonds, and other costs, charges and fees incurred in connection with the foregoing. "Debt Service" means, with respect to all or any particular amount of Bonds for any Payment Period, the amount required to pay the sum of the interest on such Bonds payable during the Payment Period and the principal of, and any other amount required to effect any mandatory redemption of, such Bonds, if any, during the Payment Period. "Event of Default" means any event of default specified in Section 801 hereof. "Finance Director" means the City's Chief Financial Officer. 5 4827-1462-7128.3 "Fiscal Year" means the 12-month period used, at any time, by the City for accounting purposes, which may be the calendar year. "Fund" means a fund confirmed or established by Article V of this Indenture. "Government Securities" means (i) direct obligations of the United States of America, (ii) obligations on which the full and timely payment of principal and interest is fully and unconditionally guaranteed by the United States of America (including any such securities issued or held in book -entry form on the books of the Department of Treasury of the United States of America), and (iii) evidences of direct ownership or proportionate or individual interest in future interest or principal payments on specified direct obligations of, or obligations on which the full and timely payment of principal and interest is fully and unconditionally guaranteed by, the United States of America, which obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian in form and substance satisfactory to the Trustee. "Holder" or "Bondholder" or "Owner of the Bonds" means the registered owner of any "Indenture" means this Trust Indenture dated as of July 1, 2017, between the City and the Trustee, together with all indentures supplemental hereto. "Interest Payment Date" means any date on which interest is payable on the Bonds. "Investment Obligations" means, if and to the extent the same are at the time legal for investment of funds held under this Indenture: (a) Cash deposits, certificates of deposits or money market deposits (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with Government Obligations); (b) Government Securities; (c) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America: U.S. Export -Import Bank (Eximbank); Rural Economic Community Development Administration; Federal Financing Bank; General Services Administration; U.S. Maritime Administration; U.S. Department of Housing and Urban Development (PHAs); Small Business Administration; Government National Mortgage Association (GNMA); Federal Housing Administration; and Farm Credit System Financial Assistance Corporation. (d) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: (i) Senior debt obligations rated in the highest long-term rating category by at least two nationally recognized rating agencies issued by the 6 4827-1462-7128.3 Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC); and (ii) Senior debt obligations of the Federal Home Loan Bank System; (e) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which either (i) have a rating on their short- term certificates of deposit on the date of purchase in the highest short-term rating category of at least two nationally recognized rating agencies, (ii) are insured at all times by the Federal Deposit Insurance Corporation, or (iii) are collateralized with direct obligations of the United States of America at 102% valued daily. All such certificates must mature no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (f) Commercial paper which is rated at the time of purchase in the highest short-term rating category of at least two nationally recognized rating agencies and which matures no more than 270 days after the date of purchase; (g) Investments in (i) money market funds subject to SEC Rule 2a-7 and rated in the highest short-term rating category of at least one of S&P and Moody's and (ii) public sector investment pools operated pursuant to SEC Rule 2a-7 in which the City's deposit shall not exceed 5% of the aggregate pool balance at any time and such pool is rated in one of the two highest short-term rating categories of at least one of S&P and Moody's; (h) Pre -refunded municipal obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (i) Which are rated, based on an irrevocable escrow account or fund (the "Escrow"), in the highest long-term rating category of at least two nationally recognized rating agencies; or (ii) (I) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or direct obligations of the United States of America, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (II) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this 7 4827-1462-7128.3 paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; (i) General obligations of states with a short-term rating in one of the two highest rating categories and a long-term rating in one of the two highest rating categories of at least two nationally recognized rating agencies. In the event such obligations are variable rate obligations, the interest rate on such obligations must be reset not less frequently than annually; and 0) Any cash sweep account maintained by the Trustee and consisting of investments described in clauses (a) through (i). "Library Tax" means the one and two -tenths (1.2) mill per dollar City tax levied on the assessed value of all taxable property within the City approved by the voters at the August 9, 2016 special election, together with all penalties and interest payable with respect thereto. "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. "Original Purchaser" means the first purchaser(s) of a series of Bonds from the City. "Outstanding" means, as of any date of computation, Bonds theretofore or thereupon being delivered under this Indenture, except: (a) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or prior to such date for cancellation; (b) Bonds deemed to be paid in accordance with Article VII of this Indenture; and (c) Bonds in lieu of or in exchange or substitution for which other Bonds shall have been authenticated and delivered pursuant to this Indenture. "Participants" means those financial institutions for whom the Securities Depository effects book -entry transfers and pledges of securities deposited with the Securities Depository in the Book -Entry System, as such listing of Participants exists at the time of such reference. "Payment Period" means a period from, but not including, a Principal Payment Date up to, and including, the next succeeding Principal Payment Date. "Person" means any natural person, firm, association, corporation, limited liability company, partnership, joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Principal Payment Date" means any date on which principal is payable on the Bonds, whether at maturity, by operation of the mandatory sinking fund, or otherwise. 8 4827-1462-7128.3 "Project" means the costs of acquiring, constructing and equipping an expansion to the Fayetteville Public Library, and any Additional Facilities that may be acquired, constructed or equipped in the future with the proceeds of Bonds issued hereunder. "Project Costs" means, to the extent permitted by Amendment 30 and the Act or other applicable laws, with respect to a Project, all costs of planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation, including obtaining governmental approvals, certificates, permits and licenses with respect thereto, heretofore or hereafter paid or incurred by or on behalf of the City and which shall include, but shall not be limited to: (a) interest accruing in whole or in part on the Bonds prior to and during construction of a Project, including all amounts required by this Indenture to be paid from the proceeds of the Bonds into the Bond Fund; (b) preliminary investigation and development costs, engineering fees, contractors' fees, labor costs, the cost of materials, equipment, utility services and supplies, costs of obtaining permits, licenses and approvals, costs of real property, insurance premiums, legal and financing fees and costs, administrative and general costs, and all other costs properly allocable to the acquisition, construction and equipping of a Project and placing the same in operation; (c) all costs relating to injury and damage claims arising out of the acquisition, construction or equipping of a Project; (d) all other costs incurred in connection with, and properly allocable to, the acquisition, construction and equipping of a Project; and (e) amounts to pay or reimburse the City or any City fund for expenses incident and properly allocable to such planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation of a Project. "Project Fund" means the fund by that name created and established in Section 501 of this Indenture. "Qualified Engineer" means a consulting engineer or firm of consulting engineers, whether or not in the regular employ of the City. "Rebate Fund" means the fund by that name created and established in Section 501 of this Indenture. "Record Date" means the close of business on the 15th day of the calendar month next preceding each Interest Payment Date on the Bonds or, if such day shall not be a business day, the immediately preceding business day. 9 4827-1462-7128.3 "Redemption Fund" means the fund by that name created and established in Section 501 of this Indenture. "Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized Representative and including, without limitation, the specific information required in Section 502 hereof. "Revenue Fund" means the fund by that name established in Section 501 of this Indenture. "S&P" means Standard & Poor's Financial Services, LLC. "Securities Depository" means The Depository Trust Company, a limited -purpose trust company organized under the laws of the State of New York, or its nominee, and it successors and assigns, or any other depository institution appointed by the City to act as depository for the Bonds in connection with the Book -Entry -Only System. "Series 2017 Bonds" means the $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017, dated as of their date of delivery, issued under and secured by this Indenture. "Special Tax Collections" means the pro rata portion of the one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 which is allocable to the Library Tax. "State" means the State of Arkansas. "Supplemental Indenture" means any indenture supplemental to or amendatory of this Indenture, adopted by the City in accordance with Article X hereof. "Tax Receipts" means, collectively, all receipts derived by the City from the levy of the Library Tax or the Special Tax Collections. "Tax Regulatory Agreement" means with respect to any series of Bonds issued under this Indenture, that Tax Regulatory Agreement of the City relating to maintenance of the excludability of interest on such Bonds from gross income for federal income tax purposes, delivered in connection with the issuance of such series of Bonds. "Trustee" and Paying Agent" means the trustee and paying agent for the time being, whether original or successor, with the same institution to always occupy both positions, and with the original Trustee and Paying Agent being Simmons Bank, Pine Bluff, Arkansas. "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 10 4827-1462-7128.3 shall otherwise indicate, the words "Bond," "owner," "holder," and "person" shall include the plural, as well as the singular number. ARTICLE II THE BONDS Section 201. Security for Bonds. (a) The Bonds are special and limited obligations of the City payable as to principal, premium, if any, and interest solely out of the Trust Estate. The Trust Estate is hereby pledged, appropriated and assigned to the payment of the principal of, premium, if any, and interest on the Bonds, all in accordance with their terms and the provisions of this Indenture. The Bonds do not constitute an indebtedness for which the faith and credit of the State of Arkansas or the City is pledged within the meaning of any Constitutional or statutory limitation. The Bonds shall never constitute an obligation of or a charge against the general credit or general taxing powers of the City. (b) The pledge, charge, lien, trusts and assignments made herein with respect to the Trust Estate shall be valid and binding, and shall be deemed continuously perfected from the time of issuance of the Series 2017 Bonds, and the Trust Estate shall thereupon be immediately subject to the pledge, charge, lien, trust and assignment created hereby upon receipt thereof by or for the City or by the Trustee and Paying Agent hereunder, without any physical delivery, segregation thereof or further act, and such pledge, charge, lien, trust and assignment shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the City, irrespective of whether such parties have notice thereof. The City shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Trust Estate and rights of the Bondholders under this Indenture against all claims and demands of all persons whomsoever. (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. (d) So long as any Bonds are Outstanding under the provisions of this Indenture, all Tax Receipts shall be deemed to be necessary to accomplish the purposes of the City and shall be subject to the covenants and agreements set forth in this Indenture, and no such Tax Receipts shall ever be used or deposited otherwise except as herein expressly permitted. (e) The City covenants, as permitted by the Act, that while any of the Bonds are Outstanding, the levy and collection of the Library Tax shall not be reduced or discontinued, and the City will use due diligence in causing the annual levy and collection of the Library Tax. The City further covenants to promptly enforce its rights against any person who does not pay such taxes when due or who challenges the authority of the City to levy the Library Tax. Section 202. Authorized Amount. There is hereby authorized the issuance of bonds of the City to be designated "Library Improvement Bonds, Series 2017" in the principal amount of Twenty -Six Million Five Hundred Thousand Dollars ($26,500,000) (the "Series 2017 Bonds"). No Bonds may be issued under the provisions of this Indenture except in accordance with this 11 4827-1462-7128.3 Article II. The total principal amount of Bonds that may be issued hereunder is limited to the extent described in Section 212 hereof, except as provided in Section 209 and except for refunding bonds issued under the provisions of Section 212. Section 203. Details of Bonds. (a) The Series 2017 Bonds (i) shall be designated "City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017," (ii) shall be in the aggregate principal amount of $26,500,000, (iii) shall be dated as of the date of their delivery, (iv) shall bear interest from such date at the rates hereinafter provided until paid, payable semiannually on January 1 and July 1 of each year, commencing January 1, 2018, (v) shall be issued in denominations of $5,000 each, or any integral multiple thereof, (vi) shall be numbered from R17-1 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 January 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 2017 Bonds: Year (January 1 Principal Amount Interest Rate 2018 $ 560,000 3.000% 2019 530,000 3.000% 2020 545,000 3.000% 2021 565,000 3.000% 2022 580,000 3.000% 2023 600,000 3.000% 2024 615,000 3.000% 2025 635,000 3.000% 2026 655,000 3.000% 2027 675,000 3.000% 2032 3,800,000 4.000% 2037 4,635,000 4.000% 2042 5,570,000 3.375% 2047 6,535,000 3.050% Section 204. Form of Bonds. (a) The Series 2017 Bonds shall be initially issued as fully registered Bonds, without coupons, in the form of fourteen typewritten bond certificates (one for each maturity) to be delivered to the Securities Depository. Each such certificate shall be initially registered in the name of the nominee of the Securities Depository, and no Beneficial Owner will receive a certificate representing his interest in the Series 2017 Bonds, except upon the occurrence of the events described in Section 215 hereof. Beneficial Owners shall be deemed to have waived any right to receive a bond certificate except under the circumstances described in Section 215. The Series 2017 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 12 4827-1462-7128.3 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. Authentication. Only such Bonds as shall have endorsed thereon a certificate of authentication substantially in the form set forth in Exhibit A attached hereto duly executed by the Trustee shall be entitled to any right or benefit under this Indenture. No Bond shall be valid and obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Trustee, and such certificate of the Trustee upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Indenture. The Trustee's certificate of authentication on any Bond shall be deemed to have been executed if signed by an authorized officer of the Trustee, but it shall not be necessary that the same officer sign the certificate of authentication on all of the Bonds issued hereunder. Section 208. Delivery of Bonds. The City shall execute and deliver to the Trustee and the Trustee shall authenticate the Bonds of any series and deliver said Bonds to the Securities Depository as may be directed in this Section 208, in Section 212 hereof or in any Supplemental Indenture. (a) Prior to the delivery or original issuance by the Trustee of any authenticated Bonds of any series, there shall be delivered to the Trustee: (1) An original executed counterpart of this Indenture or, in the case of Additional Bonds, a Supplemental Indenture by and between the City and the Trustee setting forth the details concerning such Additional Bonds; (2) Original executed counterparts of the Continuing Disclosure Agreement and the Tax Regulatory Agreement applicable to such series of Bonds; (3) A Certificate directing the Trustee to authenticate the Bonds and containing instructions as to the delivery of the Bonds upon payment to the Trustee, for the account of the City, of a sum specified in such Certificate; 13 4827-1462-7128.3 (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, the Certificate of the Finance Director referenced in Section 212 hereof, (8) 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 2017 Bonds and any Additional Bonds theretofore issued will not be adversely affected by the issuance of the Additional Bonds then being issued; and (9) Such further documents and certificates as may be required by the Original Purchaser of such series of Bonds. (b) Simultaneously with the delivery of the Series 2017 Bonds, the Trustee shall apply the proceeds thereof as follows: (1) An amount equal to $98,647.40 shall be deposited in the Cost of Issuance Fund for payment of Costs of Issuance as directed by a Certificate of the City; and (2) The balance of said proceeds ($26,905,000.00) shall be deposited in the Project Fund for payment of Project Costs pursuant to the written direction of the City as provided in Section 502. Section 209. Mutilated, Destroyed or Lost Bonds. In case any Bond issued hereunder shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be executed and the Trustee may authenticate and deliver a new Bond of like series, date, number, maturity and tenor in exchange and substitution for and upon cancellation of such mutilated Bond, or in lieu of and in substitution for such Bond destroyed or lost, upon the Bondholder's paying the reasonable expenses and charges of the City and the Trustee in connection therewith, and, in the case of a Bond destroyed or lost, filing by the Bondholder with the Trustee evidence satisfactory to the Trustee that such Bonds were destroyed or lost, and of the Bondholder's ownership thereof, and furnishing the City and Trustee with indemnity satisfactory to them. The Trustee is hereby authorized to authenticate any such new Bond. In the event any such Bonds shall have matured, instead of issuing a new Bond, the City may pay the same without the surrender thereof. Upon the issuance of a new Bond under this Section 209, the City may require the payment of a sum sufficient to cover any tax or other governmental charge that 14 4827-1462-7128.3 may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Section 210. Registration and Transfer of Bonds. The City hereby constitutes and appoints the Trustee as Bond Registrar of the City, and as Bond Registrar the Trustee shall keep books for the registration and for the transfer of the Bonds as provided in this Indenture at the principal corporate trust office of the Trustee. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and payment of or on account of the principal of and interest on any such Bond shall be made only to or upon the order of the registered owner thereof, or the owner's legal representative, and neither the City, the Trustee nor the Bond Registrar shall be affected by any notice to the contrary, but such registration may be changed as herein provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. Bonds may be transferred on the books of registration kept by the Trustee by the registered owner in person or by the owner's duly authorized attorney, upon surrender thereof, together with a written instrument of transfer duly executed by the registered owner or the owner's duly authorized attorney. Upon surrender for transfer of any Bond at the principal corporate office of the Trustee, the City shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds of the same series and in the same aggregate principal amount and of any authorized denomination or denominations. Bonds may be exchanged at the principal corporate trust office of the Trustee for an equal aggregate principal amount of Bonds of any other authorized denomination or denominations of the same series with corresponding maturities. The City shall execute and the Trustee shall authenticate and deliver Bonds which the Bondholder making the exchange is entitled to receive, bearing numbers not contemporaneously then Outstanding. The execution by the City of any Bond of any denomination shall constitute full and due authorization of such denomination and the Trustee shall thereby be authorized to authenticate and deliver such Bond. Such transfers of registration or exchanges of Bonds shall be without charge to the Owners of such Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Owner of the Bond requesting such transfer or exchange as a condition precedent to the exercise of such privilege. 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 15 4827-1462-7128.3 the rights of Bondholders hereunder, and the rights of the Beneficial Owners of such Bonds held by the Securities Depository or its nominee. shall be limited to those established by law and agreements between such Beneficial Owners and the Securities Depository and its Participants. Requests, consents and directions from, and votes of, the Securities Depository or its nominee as representative shall not be deemed inconsistent if they are made with respect to different Participants or Beneficial Owners. Section 211. Cancellation. All Bonds surrendered for payment, redemption, transfer or exchange, if surrendered to the Trustee, shall be promptly cancelled by it, and, if surrendered to any person other than the Trustee, shall be delivered to the Trustee and, if not already cancelled, shall be promptly cancelled by it. The City may at any time deliver to the Trustee for cancellation any Bonds previously authenticated and delivered hereunder, which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Trustee. All cancelled Bonds held by the Trustee shall be disposed of as directed by the City. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the City of any Bonds, the Trustee may, upon the written request of the City, in lieu of such cancellation and delivery, destroy such Bonds in the presence of any officer of the City (but only if the City shall so require), and deliver a certificate of such destruction to the City. Section 212. Additional Bonds. The City may issue from time to time one or more series of Additional Bonds for the purpose of (i) financing Project Costs in connection with the acquisition, construction and/or equipping of a Project, (ii) refunding the Series 2017 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 2017 Bonds and any other series of Additional Bonds theretofore issued and then Outstanding, except insofar as any terms or conditions of redemption or purchase established under this Indenture may afford additional benefit or security for the Bonds of any particular series and except for the security afforded by any municipal bond insurance obtained with respect to a particular series of Bonds. Before any Additional Bonds are authenticated, there shall be delivered to the Trustee the items required for the issuance of Bonds by Section 208 hereof, plus a Certificate of the Finance Director of the City (in the form attached as Exhibit B hereto) certifying that, based upon necessary investigation, the Tax Receipts deposited into the Revenue Fund during the most recent twelve (12) months were not less than (i) 120% of the maximum Annual Debt Service requirement on all then Outstanding Bonds, plus the Additional Bonds then proposed to be issued. 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. The aggregate principal amount of all Bonds issued hereunder shall not exceed $26,500,000. Section 213. Superior Obligations Prohibited. Except to the extent permitted in Section 212 hereof for the issuance of Additional Bonds, from and after the issuance of any of the Bonds and for so long as any of the Bonds are Outstanding, the City shall not create or permit the creation of any indebtedness, or issue any bonds, notes, warrants, certificates or other obligations or evidences of indebtedness payable in any manner from the Tax Receipts or otherwise from the Trust Estate which (i) will in any way be superior to or rank on a parity with the Bonds, or (ii) will in any way be secured by a lien and charge on the Tax Receipts or on the moneys deposited in or to be deposited in the Revenue Fund, prior to or equal with the lien, 16 4827-1462-7128.3 pledge and charge created herein for the security of the Bonds, or (iii) will be payable prior to or equal with the payments to be made from the Tax Receipts or the Revenue Fund into the Bond Fund, or from said Bond Fund for the payment of the Bonds. Nothing in Section 213 shall be construed as prohibiting or restricting the issuance of bonds payable from Tax Receipts so long as use of the Tax Receipts in favor of bonds issued pursuant to this Section 213 shall be made expressly subject and subordinate to the pledge and use of Tax Receipts to pay principal of and premium, if any, and interest on the Bonds and to make all required deposits into all funds held by the Trustee pursuant to the Indenture. Section 214. Temporary Bonds. Until Bonds in definitive form are ready for delivery, the City may execute, and upon the request of the City, the Trustee shall authenticate and deliver, subject to the provisions, limitations and conditions set forth herein, one or more Bonds in temporary form, whether printed, typewritten, lithographed or otherwise produced, substantially in the form of the definitive Bonds, with appropriate omissions, variations and insertions, and in authorized denominations. Until exchanged for Bonds in definitive form, such Bond in temporary form shall be entitled to the lien and benefit of this Indenture. Upon the presentation and surrender of any Bond or Bonds in temporary form, the City shall, without unreasonable delay, prepare, execute and deliver to the Trustee and the Trustee shall authenticate and deliver, in exchange therefor, a Bond or Bonds in definitive form. Such exchange shall be made by the Trustee without making any charge therefor to the Owner of such Bond in temporary form. Section 215. Book -Entry Bonds; Securities Depository. The Bonds shall initially be registered to Cede & Co., the nominee for The Depository Trust Company, New York, New York (the "Securities Depository"), and no Beneficial Owner will receive certificates representing their respective interests in the Bonds, except in the event the Trustee issues replacement bonds as provided in this Section 215. It is anticipated that during the term of the Bonds, the Securities Depository will make book -entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Trustee authenticates and delivers replacement bonds to the Beneficial Owners as described in the following paragraph. If the City or the Trustee determines (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 17 4827-1462-7128.3 or the Trustee may select a successor securities depository in accordance with the following paragraph to effect book -entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of replacement bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Trustee, to the extent applicable with respect to such replacement bonds. If the Securities Depository resigns and the City, the Trustee or Bondholders are unable to locate a qualified successor of the Securities Depository in accordance with the following paragraph, then the Trustee shall authenticate and cause delivery of replacement bonds to Bondholders, as provided herein. The Trustee may rely conclusively on information from the Securities Depository and its Participants as to the names and addresses of the Beneficial Owners of the Bonds. The cost of printing, registration, authentication, and delivery of replacement bonds shall be paid for by the City. In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities and Exchange Act of 1934, as amended, the City may appoint a successor Securities Depository provided the Trustee receives written evidence satisfactory to the Trustee with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Trustee upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of Bonds to the successor Securities Depository in appropriate denominations and form as provided herein. ARTICLE III REDEMPTION OF BONDS BEFORE MATURITY Section 301. Redemption of Bonds. The Bonds shall be subject to redemption prior to maturity as follows: (a) The Series 2017 Bonds are subject to redemption at the election of the City, on and after January 1, 2027, in whole or in part (in any order of maturities directed by the City, and by lot within a maturity) at any time, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. (b) The applicable series of Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from Project Fund moneys in excess of the amount needed to complete the applicable Project or portion thereof being financed with the proceeds of such series of Bonds, which moneys shall be transferred to the Redemption Fund pursuant to Section 502 hereof. (c) The Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption 18 4827-1462-7128.3 price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from surplus Tax Receipts (being amounts over and above the amount necessary to pay (i) current requirements of principal of and interest on the Bonds and Trustee and Paying Agent fees and expenses and (ii) amounts due on the next succeeding Interest Payment Date or Principal Payment Date), which moneys shall be transferred to the Redemption Fund pursuant to Section 503 hereof. (d) The Series 2017 Bonds maturing on January 1, 2032, are subject to mandatory sinking fund redemption prior to maturity in part, on January 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 $700,000 2029 730,000 2030 760,000 2031 790,000 2032 (maturity) 820,000 (e) The Series 2017 Bonds maturing on January 1, 2037, are subject to mandatory sinking fund redemption prior to maturity in part, on January 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 $ 855,000 2034 890,000 2035 925,000 2036 965,000 2037 (maturity) 1,000,000 (f) The Series 2017 Bonds maturing on January 1, 2042, are subject to mandatory sinking fund redemption prior to maturity in part, on January 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 2038 $1,040,000 2039 1,075,000 2040 1,115,000 2041 1,150,000 2042 (maturity) 1,190,000 (g) The Series 2017 Bonds maturing on January 1, 2047, are subject to mandatory sinking fund redemption prior to maturity in part, on January 1 in the years and amounts set forth 19 4827-1462-7128.3 below at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption, without premium: Year Principal Amount 2043 $1,230,000 2044 1,265,000 2045 1,305,000 2046 1,345,000 2047 (maturity) 1,390,000 (h) Additional Bonds may also be made subject to optional, extraordinary and mandatory sinking fund redemption, in whole or in part, in such manner, at such times and at such prices as may be provided in the Supplemental Indenture providing for their issuance. At its option, to be exercised on or before the 45t" day next preceding any mandatory sinking fund redemption date for any Series 2017 Bonds, the City may deliver to the Trustee for cancellation Series 2017 Bonds of the appropriate maturity, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2017 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 2017 Bonds so to be redeemed shall be accordingly reduced. Section 302. Notice. Notice of the call for any redemption (other than mandatory sinking fund redemption), identifying the Bonds or portions thereof being called and the date on which they shall be presented for payment, shall be mailed by the Trustee by first class mail (or, so long as the Securities Depository or its nominee is the sole registered owner of the Bonds, by any other means acceptable to the Securities Depository, including facsimile) to the registered owner of each such Bond addressed to such registered owner at his registered address and placed in the mails not less than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption; provided, however, that failure to give such notice by mailing, or any defect therein, shall not affect the validity of any proceeding for the redemption of any Bond with respect to which no such failure or defect has occurred. Any notice mailed as provided in this Section 302 shall be conclusively presumed to have been duly given, whether or not the registered owner receives the notice. Section 303. Selection of Bonds to be Redeemed. If less than all of the Bonds of like series, maturity, interest rate and otherwise identical payment terms shall be called for redemption, the particular Bonds or portions of Bonds to be redeemed shall be selected by lot by the Trustee in such manner as the Trustee in its discretion may deem fair and appropriate; provided, however, that the portion of any Bond of a denomination of larger than the minimum denomination may be redeemed in the principal amount of such minimum denomination or a multiple thereof, and that for purposes of selection and redemption, any such Bond of a denomination larger than the minimum denomination shall be considered to be that number of 20 4827-1462-7128.3 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. ARTICLE IV GENERAL COVENANTS AND REPRESENTATIONS Section 401. Payment of Principal, Premium and Interest. The City covenants that it will promptly pay or cause to be paid the principal of and premium, if any, and interest on every Bond issued under this Indenture at the place, on the dates and in the manner provided herein and in the Bonds according to the true intent and meaning thereof. The principal, premium, if any, and interest (except interest paid from the proceeds from the sale of the Bonds and accrued interest) are payable solely from the Trust Estate which is hereby specifically pledged to the payment thereof in the manner and to the extent herein specified, and nothing in the Bonds or this Indenture should be considered as assigning or pledging any funds or assets of the City other than the Trust Estate. Anything in this Indenture to the contrary notwithstanding, it is understood that whenever the City makes any covenants involving financial commitments it pledges no funds or assets other than the Trust Estate in the manner and to the extent herein specified, but nothing herein shall be construed as prohibiting the City from using any other funds or assets. The City covenants that the Library Tax will not be repealed, and the rate of the Library Tax will not be reduced, for so long as there are any Outstanding Bonds. It is further covenanted that all 21 4827-1462-7128.3 necessary action will be taken, from time to time, to collect the Library Tax in the full amount due and to apply Tax Receipts in the manner provided in this Indenture. Section 402. Performance of Covenants. The City covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Indenture, in any and every Bond executed, authenticated and delivered hereunder, and in all ordinances pertaining hereto. The City covenants that it is duly authorized under the Constitution and laws of the State of Arkansas, including particularly and without limitation, Amendment 30 and the Act, to issue the Bonds authorized hereby and to execute this Indenture and to make the pledge of the Tax Receipts and to make the covenants in the manner and to the extent herein set forth, that all action on its part for the issuance of the Bonds and the execution and delivery of this Indenture has been duly and effectively taken, and that the Bonds in the hands of the Holders and owners thereof are and will be valid and enforceable obligations of the City according to the import thereof. Section 403. Instruments of Further Assurance. At the request of the Trustee, the City shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, ordinances, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, pledging, assigning and confirming of all and singular the Tax Receipts and all other moneys hereby pledged or assigned, or intended so to be, or which the City may become bound to pledge or assign. Section 404. Recordation and Filing. To the extent necessary, the City covenants that it will cause this Indenture, such security agreements, financing statements, and all supplements thereto and other instruments as may be required from time to time to be kept, to be recorded and filed in such manner and in such places as may be required by law in order to fully preserve and protect the security of the owners of the Bonds and the rights of Trustee hereunder, and to perfect the security interest created by this Indenture. Section 405. Inspection of Books. The City shall keep proper books of record and account (separate from all other records and accounts) in which complete and correct entries shall be made of its transactions relating to the Project and the Funds and Accounts established by this Indenture. Section 406. Tax Covenants. The City covenants that it will not use or permit the use of any Bond proceeds or any other funds of the City, directly or indirectly, in any manner, and will not take or permit to be taken any other action or actions which would adversely effect the exclusion of interest on any Bond from gross income for federal income tax purposes. Without limiting the generality of the foregoing, the City further covenants that no part of the proceeds of the Bonds shall at any time be used, directly or indirectly, to acquire securities or obligations the acquisition of which would cause any of the Bonds to be an "arbitrage bond" as defined in Sections 148(a) and (b) of the Code. The City agrees that so long as any of the Bonds remain Outstanding, it will comply with the provisions of each applicable Tax Regulatory Agreement. 22 4827-1462-7128.3 Section 407. Trustee's and Paying Agent's Fees and Expenses. Subject to the provisions of Section 902 hereof, the City hereby agrees and covenants to make payments for the fees, expenses and charges of the Trustee and Paying Agent, if any, as authorized and provided by this Indenture. The City is to make payments on statements rendered by the Trustee and Paying Agent either (i) directly to the Trustee and Paying Agent or (ii) pursuant to Section 503(b) hereof. Section 408. Construction of Project; Certification of Completion Date. The City hereby covenants to use its best efforts to acquire, construct and equip each Project (or portion thereof) being financed with proceeds of the Bonds with all reasonable dispatch and to use its best efforts to cause the acquisition, construction and equipping of such Project (or portion thereof) to be completed as soon as may be practicable, but in any case within a period not to exceed three years after the issuance of the applicable series of Bonds, delays caused by force majeure only excepted, but if for any reason such acquisition, construction and equipping is not completed within said period, there shall be no diminution or postponement of payments required hereunder to be made by the City. Promptly after each such Completion Date, the City shall submit to the Trustee the certificate of a Qualified Engineer which shall specify the Completion Date and shall state that acquisition, construction and equipping of such Project (or portion thereof) being financed with a particular series of Bond proceeds has been completed and the Project Costs have been paid, except for any Project Costs which have been incurred but are not then due and payable, or the liability for the payment of which is being contested or disputed by the City, and for the payment of which the Trustee is directed to retain specified amounts of moneys in the Project Fund. Notwithstanding the foregoing, such certificate may state that it is given without prejudice to any rights against third parties which exist at the date thereof or which may subsequently come into being. Section 409. Encumbrances. The City covenants that it will not create or suffer to be created any lien or charge upon the Trust Estate, except in accordance with the provisions of this Indenture. Section 410. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of each Continuing Disclosure Agreement. Notwithstanding any other provision of this Indenture to the contrary, failure of the City or the Trustee to comply with the provisions of a Continuing Disclosure Agreement shall not be considered an Event of Default hereunder; however, the Trustee may (and at the request of the Original Purchaser of a series of Bonds or the owners of at least 25% in aggregate Outstanding principal amount of such series of Bonds, shall) or any Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City or the Trustee, as the case may be, to comply with its obligations under this Section 410. Section 411. [Reserved]. Section 412. Pledge of Tax Receipts. (a) This Indenture creates a valid and binding pledge and assignment of and security interest in the Tax Receipts in favor of the Trustee as 23 4827-1462-7128.3 security for payment of the Bonds, enforceable by the Trustee in accordance with the terms hereof. (b) Under the laws of the State of Arkansas, such pledge, assignment and security interest is and shall be prior to any judicial lien hereafter imposed on the Tax Receipts to enforce a judgment against the City on a simple contract. Under the laws of the State of Arkansas, including, particularly, Arkansas Code Annotated (2001 Repl.) Section 4-9-109(d)(14), it is not necesssary to file a Uniform Commercial Code financing statement in order to perfect a security interest in the Tax Receipts. (c) The City has not heretofore made a pledge of, granted a lien on or security interest in, or made an assignment or sale of the Tax Receipts that ranks on a parity with or prior to the pledge, assignment and security interest granted hereby. The City shall not hereafter make or suffer to exist any pledge or assignment of, lien on, or security interest in the Tax Receipts that ranks prior to or on a parity with the pledge, assignment and security interest granted hereby, or file any financing statement describing any such pledge, assignment, lien or security interest, except as expressly permitted hereby. ARTICLE V REVENUES AND FUNDS Section 501. Creation of Funds. (a) There are hereby created and established with the Trustee the following Funds: (i) Revenue Fund; (ii) Project Fund; (iii) Bond Fund; (iv) Cost of Issuance Fund; (v) Redemption Fund; and (vi) Rebate Fund. (b) All such 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 maintain the Project Fund to the credit of which there shall be deposited a portion of the proceeds of the Series 2017 Bonds as provided in Section 208(b) hereof and the proceeds of Additional Bonds as directed in a Supplemental Indenture. (b) Moneys credited to the Project Fund shall be expended only as set forth in this Section 502. 24 4827-1462-7128.3 (c) Amounts in the Project Fund shall be expended and applied for the payment of Project Costs attributable to the related Project. Disbursements shall be made from the Project Fund on the basis of consecutively numbered Requisitions in the form attached hereto as Exhibit C signed by an Authorized Representative. Requisitions may be submitted to the Trustee by certified mail, first class mail or facsimile transmission. If the Trustee deems that a Requisition submitted by the City is sufficient pursuant to this Section 502, the amount 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 any Project or portion thereof being financed with a particular series of Bonds, the City shall deliver to the Trustee its Certificate stating that such Project or applicable portion thereof is complete and the Trustee shall transfer the remaining moneys in the Project Fund relating to such series of Bonds (save and except moneys needed to satisfy unpaid Project Costs) to the Redemption Fund for application to the retirement of Bonds by redemption or purchase, as provided by Section 301(b) and Section 506 hereof. (e) Upon the occurrence and continuance of an Event of Default or the occurrence and continuance of an event which with notice or lapse of time or both would constitute an Event of Default, amounts on deposit in the 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 with the Trustee to the credit of the Revenue Fund, as and when received, all Tax Receipts. For the purposes of financial 25 4827-1462-7128.3 reporting by the City with respect to the Library Tax and Special Tax Collections, "receipts" and "revenues" shall have the same meaning. (b) On or before the fifteenth day of each month, commencing August 15, 2017, 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 (except that with respect to deposits required with respect to a series of Bonds prior to the first Interest Payment Date for such series of Bonds, the required monthly transfers shall be equal to a fraction, the numerator of which shall be 1 and the denominator of which shall be the number of transfers to be made prior to such Interest Payment Date); SECOND: For deposit to the Bond Fund, an amount equal to one -twelfth (1/12) of the next scheduled principal maturity of Outstanding Bonds (including mandatory sinking fund redemptions) (except that with respect to deposits required with respect to a series of Bonds prior to the first Principal Payment Date for such series of Bonds, the required monthly transfers shall be equal to a fraction, the numerator of which shall be 1 and the denominator of which shall be the number of transfers to be made prior to such Principal Payment Date); THIRD: For deposit to the Rebate Fund, an amount sufficient to satisfy the City's obligations under Section 507 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 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. (d) On each November 15, moneys remaining in the Revenue Fund following the required transfers set forth in (b) above in excess of (i) amounts scheduled to be transferred to the Bond Fund on the following December 15, (ii) Debt Service due on the Bonds on the next succeeding July 1, and (iii) current amounts due for the payment of Trustee and Paying Agent fees and expenses and the payment of any Rebate Amount, shall be transferred to the Redemption Fund and utilized to redeem Bonds as provided in Section 301(c) hereof. (e) Amounts remaining in the Revenue Fund following payment of all Outstanding Bonds in full shall be transferred to the General Fund of the City and shall be utilized for the maintenance and operation of the Fayetteville Public Library. 26 4827-1462-7128.3 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 208, 503, 505, 506 and 508 of this Indenture and all other moneys received for said Fund. (b) Moneys credited to the Bond Fund shall be expended only as set forth in this Section 504. (c) G) 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 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 Payment Date or Principal Payment Date or redemption date, the Trustee shall, three days prior to such date, notify the City of such deficiency, and if by one day prior to such date such deficiency has not been cured, transfer an amount equal to the deficiency into the Bond Fund from the Redemption Fund. (d) All payments made pursuant to this Section 504 shall be made in immediately available funds. Section 505. Cost of Issuance Fund. There shall be deposited to the credit of the Cost of Issuance Fund all moneys received for said Fund pursuant to Section 208 hereof. The Trustee shall pay those Costs of Issuance as directed by the City pursuant to a Certificate delivered on a Closing Date. After all Costs of Issuance have been paid (and in any event not later than September 1, 2017 with respect to the Series 2017 Bonds), any remaining moneys in the Cost of Issuance Fund shall be transferred to the Bond Fund. The Cost of Issuance Fund is not pledged to the payment of the Bonds. Section 506. Redemption Fund. (a) There shall be deposited to the credit of the Redemption Fund all moneys required to be transferred thereto to effect an optional redemption of the Bonds pursuant to Section 301(a) hereof and all moneys transferred thereto pursuant to Section 502 and Section 503 of this Indenture. (b) Moneys credited to the Redemption Fund shall be expended only as set forth in this Section 506. 27 4827-1462-7128.3 (c) Moneys in the Redemption Fund shall be transferred to the Bond Fund at such times as may be necessary to effectuate, on the first available date, redemptions of Bonds required by Section 301(a), (b) and (c) of this Indenture. (d) The amounts accumulated in the Redemption Fund, if so directed by the City by means of a Certificate delivered to the Trustee, shall be applied by the Trustee to the purchase of Bonds of the maturities which would otherwise be redeemed pursuant to Section 301(a), (b) and (c) and this Section 506 but for the provisions of this subsection (d), at prices directed by the City not exceeding the applicable redemption prices of the Bonds which would be redeemed but for the operation of this sentence. Interest accrued on the Bonds so purchased shall be paid from moneys credited to the Bond Fund. Section 507. 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 507, by Section 406, and by each Tax Regulatory Agreement (which are incorporated herein by reference). (b) As provided in Section 503(b) hereof, there shall be deposited in the Rebate Fund the amount of all income or gain on moneys deposited in any of the Funds established by this Indenture which is required to be rebated to the United States and is designated for deposit therein, as calculated by the City to be owing to the United States pursuant to the Tax Regulatory Agreement, which shall be delivered by the City concurrently with the issuance of a series of Bonds. (c) The Trustee, upon receipt of written instructions from the Mayor or Finance Director of the City, shall pay to the United States out of amounts in the Rebate Fund such amounts as are required pursuant to each Tax Regulatory Agreement. (d) Any moneys remaining in the Rebate Fund after payment to the United States, within sixty (60) days after the date on which the last Bond is redeemed, of one hundred percent (100%) of the rebate amount as described in Section 148(f)(2) of the Code, shall be transferred to the Revenue Fund. (e) The Trustee, as instructed by Certificate of the City, shall invest all amounts held in the Rebate Fund in Investment Obligations, subject to the restrictions set forth in the applicable Tax Regulatory Agreement. Money shall not be transferred from the Rebate Fund except as provided in subsection (c). (f) Notwithstanding any other provision of this Indenture, the obligation to remit the Rebate Amount to the United States and to comply with all other requirements of this 28 4827-1462-7128.3 Section 507, Section 406 and each Tax Regulatory Agreement shall survive the defeasance or payment in full of the Bonds. Section 508. [Reserved]. Section 509. Cessation of Fund Deposits. When the moneys in the Bond Fund and the Redemption Fund shall be and remain sufficient to pay in full the principal and interest on all Bonds then Outstanding in accordance with Article VII of this Indenture, together with the required fees and expenses to be paid or reimbursed to the Trustee and Paying Agent, the City shall have no further obligation to make payments into said Funds. Section 510. Separate Accounts Authorized. A Supplemental Indenture authorizing the issuance of Additional Bonds may provide for the creation of separate Accounts within the Bond Fund, Redemption Fund, Project Fund, Cost of Issuance Fund and Rebate Fund for such series of Bonds and such other Accounts as the City may direct; provided, that the creation of such separate Accounts shall be solely for the ease of administration and shall in no event affect the equal and ratable security of the Bonds of each series. If any Supplemental Indenture authorizing the issuance of Additional Bonds provides for the establishment of separate Accounts for a series of Bonds, then such Supplemental Indenture shall require that the Tax Receipts received by the City shall be deposited pursuant to written direction of the City into each of the Accounts within the Bond Fund for each series of Bonds on the basis of the installments of principal, premium, if any, and interest due on each series of Bonds and the amounts required to be deposited in the Accounts within the Bond Fund during the applicable period, to the end that the Bonds of each series shall be equally and ratably secured by the Tax Receipts. Any Supplemental Indenture authorizing the issuance of Additional Bonds shall provide that any proceeds of such series of Bonds and investment earnings thereon remaining after some specified date, or after the construction of all facilities to be financed with the proceeds of such series of Bonds, shall be applied to the redemption of such series of Bonds. ARTICLE VI INVESTMENTS Section 601. Investment of Moneys. At the direction of the City or absent such direction, the Trustee shall invest moneys in Funds or Accounts held by the Trustee in Investment Obligations with maturity or redemption dates consistent with the times at which said moneys will be required for the purposes provided in this Indenture. Moneys in separate Funds or Accounts may be commingled for the purpose of investment. Section 602. Investment Earnings. Subject to the provisions of the Tax Regulatory Agreement and Article V hereof, Investment Obligations purchased with moneys held in or attributable to any Fund or Account held by the Trustee under the provisions of this Indenture shall be deemed at all times to be a part of such Fund or Account and the income or interest earned, profits realized or losses suffered by a Fund or Account due to the investment thereof 29 4827-1462-7128.3 shall be retained in, credited or charged, as the case may be, to such Fund or Account unless otherwise provided pursuant to this Indenture. Section 603. Valuation of Funds. Investments in any Fund or Account shall be evaluated monthly by the Trustee. The Trustee shall report the determined value of each Fund and Account to the City. For the purpose of determining the amount in any Fund or Account, the Trustee shall value all Investment Obligations credited to such Fund or Account at the fair market value thereof. The Trustee shall determine the fair market value based on accepted industry standards and from accepted industry providers. As to certificates of deposit and bankers' acceptances, fair market value shall mean the face amount thereof, plus accrued interest thereon, and as to any other investment not specified above, fair market value is the value thereof as established by prior agreement between the City and the Trustee. The Trustee shall sell or present for redemption any Investment Obligations as necessary in order to provide money for the purpose of making any payment required hereunder, and the Trustee shall not be liable for any loss resulting from any such sale. Section 604. Responsibility of Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of moneys made by it at the direction of the City. ARTICLE VII DISCHARGE OF LIEN Section 701. Discharge of Lien. If the City shall pay or cause to be paid to the owners of the Bonds the principal, premium, if any, and interest to become due thereon at the times and in the manner stipulated therein, and if the City shall keep, perform and observe all and singular the covenants and promises in the Bonds and in this Indenture expressed as to be kept, performed and observed by it on its part, then these presents and the estate and rights hereby granted shall cease, determine and be void, and thereupon the Trustee shall cancel and discharge the lien of this Indenture, and execute and deliver to the City such instruments in writing as shall be requisite to satisfy the lien hereof, and reconvey to the City the estate hereby conveyed, and assign and deliver to the City any property at the time subject to the lien of this Indenture which may then be in its possession, except moneys or Government Securities held by it for the payment of the principal of and premium, if any, and interest on the Bonds. Section 702. Bonds Deemed Paid. Any Bond shall be deemed to be paid within the meaning of this Article VII when payment of the principal of and premium, if any, and interest on such Bond (whether at maturity or upon redemption as provided in this Indenture, or otherwise), either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for by irrevocably depositing with the Trustee, in trust and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such payment or (2) Government Securities (provided that such deposit will not affect the tax-exempt status of the interest on any of the Bonds or cause any of the Bonds to be classified as "arbitrage bonds" within the meaning of Section 148(a) of the Code, as reflected in an opinion of Bond Counsel delivered to the Trustee), maturing as to principal and interest in such amount and at 9M 4827-1462-7128.3 such times as will provide sufficient moneys to make such payment, and all necessary and proper fees, compensation and expenses of the Trustee and any Paying Agent pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of the Trustee and any said Paying Agent. Section 703. Non -Presentment of Bonds. In the event any Bonds shall not be presented for payment when the principal thereof becomes due, either at maturity or otherwise, or at the date fixed for redemption thereof, if there shall have been deposited with the Trustee for that purpose, or left in trust if previously so deposited, funds sufficient to pay the principal thereof, and premium, if any, together with all interest unpaid and due thereon, to the due date thereof, for the benefit of the Holder thereof, all liability of the City to the Holder thereof for the payment of the principal thereof, premium if any, and interest thereon, shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Trustee to hold such fund or funds, without liability for interest thereon, for the benefit of the Holder of such Bonds, who shall thereafter be restricted exclusively to such fund or funds, for any claim of whatever nature on his part under this Indenture or on, or with respect to, the Bonds. ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS Section 801. Events of Default. Each of the following events shall constitute and is referred to in this Indenture as an "Event of Default": (a) Default in the due and punctual payment of any interest on any Bond; (b) Default in the due and punctual payment of the principal of or premium, if any, on any Bond, whether at the stated maturity thereof, or upon proceedings for redemption thereof, or upon the maturity thereof by declaration; (c) Default in the payment of any other amount required to be paid under this Indenture or the performance or observance of any other of the covenants, agreements or conditions contained in this Indenture, or in the Bonds issued hereunder, and continuance thereof for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied shall have been given to the City by the Trustee, which may give such notice in its discretion and shall give such notice at the written request of Bondholders of not less than 51 % in aggregate principal amount of 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; 31 4827-1462-7128.3 (d) The filing of a petition in bankruptcy by or against the City under the United States Bankruptcy Code or the commencement of a proceeding by or against the City under any other law concerning insolvency, reorganization or bankruptcy; and (e) If the State has limited or altered the rights of the City pursuant to the Act, as in force on the date of this Indenture, to fulfill the terms of any agreements made with the Trustee or the Bondholders or in any way impaired the rights and remedies of the Trustee or the Bondholders while any Bonds are Outstanding. The term "default" as used in clauses (a), (b) and (c) above shall mean default by the City in the performance or observance of any of the covenants, agreements or conditions on its part contained in this Indenture or in the Bonds Outstanding hereunder, exclusive of any period of grace required to constitute a default an "Event of Default" as hereinabove provided. Section 802. Acceleration. Upon the occurrence of an Event of Default, the Trustee may, and upon the written request of the Holders of not less than 51 % in aggregate principal amount of Bonds Outstanding hereunder shall, by notice in writing delivered to the City, declare the principal of all Bonds then Outstanding, together with the interest accrued thereon, immediately due and payable, and such principal and interest shall thereupon become and be immediately due and payable. Section 803. Other Remedies; Rights of Bondholders. Upon the occurrence of an Event of Default, the Trustee may, as an alternative, pursue any available remedy by suit at law or in equity, including, without limitation, mandamus to enforce the payment of the principal of and premium, if any, and interest on the Bonds then Outstanding hereunder. If an Event of Default shall have occurred, and if it shall have been requested so to do by the Holders of not less than 51 % in aggregate principal amount of Bonds Outstanding hereunder and if it shall have been indemnified as provided in Section 901(1) hereof, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred upon it by this Section 803 as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Bondholders. No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to the Bondholders) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or acquiescence therein; and every such right and power may be exercised from time to time and as often as may be deemed expedient. No waiver of any default or Event of Default hereunder, whether by the Trustee or by the Bondholders, shall extend to or shall affect any subsequent default or Event of Default or shall impair any rights or remedies consequent thereon. 32 4827-1462-7128.3 Section 804. Right of Bondholders to Direct Proceedings. Anything in this Indenture to the contrary notwithstanding, the Holders of not less than 51 % in aggregate principal amount of Bonds Outstanding hereunder shall have the right, at any time, by an instrument or instruments in writing executed and delivered to the Trustee, to direct the method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of this Indenture, or for the appointment of a receiver or any other proceeding hereunder; provided that such direction shall not be otherwise than in accordance with the provisions of law and of this Indenture. Section 805. Appointment of Receiver. Upon the occurrence of an Event of Default, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Bondholders under this Indenture, the Trustee shall be entitled to the appointment of a receiver or receivers of the Trust Estate and of the tolls, rents, revenues, issues, earnings, income, products and profits thereof, including, without limitation, the Tax Receipts, pending such proceedings with such powers as the court making such appointment shall confer. Section 806. Waiver. In case of an Event of Default on its part, as aforesaid, to the extent that such rights may then lawfully be waived, neither the City nor anyone claiming through the City or under the City shall or will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption laws now or thereafter in force, in order to prevent or hinder the enforcement of this Indenture, but the City, for itself and all who may claim through or under it, hereby waives, to the extent that it lawfully may do so, the benefit of all such laws and all right of appraisement and redemption to which it may be entitled under the laws of the State. Section 807. Application of Moneys. Available moneys remaining after discharge of costs, charges and liens prior to this Indenture shall be applied by the Trustee as follows: (a) Unless the principal of all the Bonds shall have become or shall have been declared due and payable, all such moneys shall be applied: First: To the payment to the Persons entitled thereto of all installments of interest then due, in the order of the maturity of the installments of such interest, and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or privilege; Second: To the payment to the Persons entitled thereto of the unpaid principal of any of the Bonds which shall have become due (other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of this Indenture), in the order of their due dates, with interest on such Bonds from the respective dates upon which they become due, and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then to the payment ratably, according to the amount of principal due on such date, to the Persons entitled thereto without any 33 4827-1462-7128.3 discrimination or privilege of any Bond over any other Bond and without preference or priority of principal over interest or of interest over principal; and Third: To the payment of the interest on and the principal of the Bonds, and to the redemption of Bonds, all in accordance with the provisions of Article V of this Indenture. (b) If the principal of all the Bonds shall have become due or shall have been declared due and payable, all such moneys shall be applied first to the payment of the interest then due and unpaid upon the Bonds, and then to the payment of the principal then due and unpaid upon the Bonds, in each case without preference or priority of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the Persons entitled thereto. (c) If the principal of all the Bonds shall have been declared due and payable, and if such declaration shall thereafter have been rescinded and annulled under the provisions of this Article VIII then, subject to the provisions of paragraph (b) of this Section 807, in the event that the principal of all the Bonds shall later become due or be declared due and payable, the moneys shall be applied in accordance with the provisions of paragraph (a) of this Section 807. Whenever moneys are to be applied by the Trustee pursuant to the provisions of this Section 807, such moneys shall be applied by it at such times, and from time to time, as it shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an Interest Payment Date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such dates shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date and shall not be required to make payment to the Holder of any Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Section 808. Remedies Vested in Trustee. All rights of action (including the right to file proof of claim) under this Indenture or under any of the Bonds may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or other proceeding relating thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its name as Trustee, without the necessity of joining as plaintiffs or defendants any Bondholders hereby secured, and any recovery of judgment shall be for the equal benefit of the Holders of all Outstanding Bonds. Section 809. Rights and Remedies of Bondholders. No Bondholder shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of this Indenture or for the execution of any trust hereof or for the appointment of a receiver or any other remedy hereunder, unless a default has occurred of which the Trustee has been notified as provided in subsection (g) of Section 901, or of which by said subsection it is deemed to have 34 4827-1462-7128.3 notice, nor unless such default shall have become an Event of Default and the Holders of not less than 51 % in aggregate principal amount of Bonds Outstanding hereunder shall have made written request to the Trustee and shall have offered it reasonable opportunity either to proceed to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name, nor unless also they have offered to the Trustee indemnity as provided in subsection (1) of Section 901, nor unless the Trustee shall thereafter fail or refuse to exercise the powers hereinbefore granted, or to institute such action, suit or proceeding in its own name; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers and trusts of this Indenture, and to any action or cause of action for the enforcement of this Indenture or for the appointment of a receiver or for any other remedy hereunder; it being understood and intended that no one or more Holders of the Bonds shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of this Indenture by action of the Holder or Holders or to enforce any right hereunder except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, held and maintained in the manner herein provided for the equal benefit of the Holders of all Bonds Outstanding hereunder. Nothing in this Indenture contained shall, however, affect or impair the right of any Bondholders to enforce the payment of the principal of and premium, if any, and interest on any Bonds at and after the maturity thereof, or the obligation of the City to pay the principal of and premium, if any, and interest on each of the Bonds issued hereunder to the respective Holders thereof at the time and place in said Bonds expressed. Section 810. Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the City and the Trustee shall be restored to their former positions and rights hereunder with respect to the property herein conveyed, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken, except to the extent the Trustee is legally bound by such adverse determination. Section 811. Waivers of Events of Default. The Trustee may, and upon the written request of the Holders of not less than 51 % in principal amount of all Bonds Outstanding hereunder shall, waive any Event of Default hereunder and its consequences and rescind any declaration of maturity of principal; provided, however, there shall not be waived any Event of Default described in clause (a) or (b) of the first paragraph of Section 801 hereof, unless prior to such waiver or rescission all arrears of principal (due otherwise than by declaration) and interest, and all expenses of the Trustee and Paying Agent, shall have been paid or provided for. In case of any such waiver or rescission the City, Trustee and the Bondholders shall be restored to their former positions and rights hereunder respectively, but no such waiver or rescission shall extend to any subsequent or other default, or impair any right subsequent thereon. 35 4827-1462-7128.3 ARTICLE IX TRUSTEE AND PAYING AGENT Section 901. Acceptance of Trusts. The Trustee hereby accepts the trusts imposed upon it by this Indenture and agrees to perform said trusts, but only upon and subject to the following expressed terms and conditions: (a) The Trustee may execute any of the trusts or powers hereof and perform any duties required of it by or through attorneys, agents, receivers or employees, and shall be entitled to advice of counsel concerning all matters of trusts hereof and its duties hereunder, and may in all cases pay reasonable compensation to all such attorneys, agents, receivers and employees as may reasonably be employed in connection with the trusts hereof. Reimbursement of such compensation paid by the Trustee is subject to the provisions of Section 902 hereof. The Trustee may act upon the opinion or advice of any attorney, surveyor, engineer or accountant selected by it in the exercise of reasonable care, or, if selected or retained by the City prior to the occurrence of a default of which the Trustee has been notified as provided in subsection (g) of this Section 901, or of which by said subsection the Trustee is deemed to have notice, approved by the Trustee in the exercise of such care. The Trustee shall not be responsible for any loss or damage resulting from an action or nonaction in accordance with any such opinion or advice. (b) The Trustee shall not be responsible for any recital herein, or in the Bonds (except in respect to the certificate of authentication of the Trustee endorsed on such Bonds), or for the validity of the execution by the City of this Indenture or of any Supplemental Indentures or instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby, or for the value of the title of the property herein conveyed or otherwise as to the maintenance of the security hereof, except that in the event the Trustee enters into possession of a part or all of the property herein conveyed pursuant to any provision of this Indenture, it shall use due diligence in preserving such property; and the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenants, conditions and agreements aforesaid as to the condition of the property herein conveyed. (c) The Trustee may become the owner of Bonds secured hereby with the same rights which it would have if not Trustee. (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 36 4827-1462-7128.3 a Certificate of the City signed by its Authorized Representative and attested by the City Clerk as sufficient evidence of the facts therein contained and, prior to the occurrence of a default of which it has been notified as provided in subsection (g) of this Section 901, or of which by that subsection it is deemed to have notice, shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction, or action is necessary or expedient, but may at its discretion, at the reasonable expense of the City, in every case secure such further evidence as it may think necessary or advisable but shall in no case be bound to secure the same. The Trustee may accept a certificate of the City Clerk of the City under its seal to the effect that a resolution or ordinance in the form therein set forth has been adopted by the City as conclusive evidence that such resolution or ordinance has been duly adopted, and is in full force and effect. (f) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty of the Trustee, and the Trustee shall be answerable only for its own gross negligence or willful misconduct. (g) The Trustee shall not be required to take notice or be deemed to have notice of any default hereunder (except for defaults under clause (a) or (b) of the first paragraph of Section 801 hereof as to which the Trustee shall be deemed to have notice) unless the Trustee shall be specifically notified in writing of such default by the City or by the Holders of at least 10% in aggregate principal amount of Bonds Outstanding hereunder, and all notices or other instruments required by this Indenture to be delivered to the Trustee must, in order to be effective, be delivered to the principal corporate trust office of the Trustee, and in the absence of such notice so delivered, the Trustee may conclusively assume there is no such default except as aforesaid. (h) [Reserved]. (i) At any and all reasonable times the Trustee, and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right fully to inspect any and all of the property herein conveyed, including all books, papers and records of the City pertaining to the Tax Receipts and the Bonds, and to take such memoranda from and in regard thereto as may be desired. 0) The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises. (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. 37 4827-1462-7128.3 (1) Before taking such action hereunder, the Trustee may require that it be furnished an indemnity bond satisfactory to it for the reimbursement to it of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from the gross negligence or willful misconduct of the Trustee, by reason of any action so taken by the Trustee. Section 902. Fees, Charges and Expenses of Trustee and Paying Agent. (a) Subject to subsection (b) of this Section 902, the City shall, from moneys lawfully available therefor, pay to the Trustee and Paying Agent reasonable compensation for all services performed hereunder and also all reasonable expenses, charges and other disbursements and those of their attorneys, agents and employees incurred in and about the administration and execution of the trusts hereby created and the performance of the powers and duties hereunder and, to the extent permitted by law and from moneys lawfully available therefor, shall indemnify and save the Trustee harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder. With respect to the Series 2017 Bonds, the Trustee's initial authentication fee shall be $3,500.00 and the annual administration fee of the Trustee shall be $3,000.00; provided, however, that during any period in which amounts are on deposit in the Project Fund, the annual administration fee of the Trustee shall be $3,500.00. If the City shall fail to make any payment required by this subsection (a), the Trustee may make such payment from any moneys in its possession under the provisions of this Indenture and shall be entitled to a preference therefor over any of the Bonds Outstanding hereunder. The City shall not be required to indemnify the Trustee against any liabilities which the Trustee may incur as a result of negligent or wrongful acts or omissions of the Trustee. (b) The City shall pay to the Trustee compensation for its services as described in Section 902(a), provided that such compensation, together with all expenses, charges and other disbursements of the Trustee and its attorneys, agents and employees and all reimbursements to the Trustee for all costs and other disbursements as described in Section 901(a) hereof shall not exceed $9,500 annually (not including the initial authentication fee) without the prior written approval of the City, which approval shall not be unreasonably withheld. If the Trustee wishes to consult with or retain counsel for any purpose hereunder whose anticipated fees, together with all other compensation, disbursements and reimbursements of the Trustee and its attorneys, agents and employees to be paid by the City hereunder, shall exceed $10,000 annually, then such counsel shall have to be acceptable to the City and such fees shall have to be approved by the City as described above. Section 903. Additional Duties of Trustee. (a) In addition to the other duties of the Trustee described in this Indenture, it shall be the duty of the Trustee, on or before the tenth day of each month after the month in which the Series 2017 Bonds are delivered, to file with the City a statement setting forth in respect of the preceding calendar month: (i) the amount withdrawn or transferred by it and the amount deposited with it on account of each Fund and Account held by it under the provisions of this Indenture; (ii) the amount on deposit with it at the end of such month to the credit of each such Fund and Account; 38 4827-1462-7128.3 (iii) a brief description of all obligations held by it as an investment of moneys in each such Fund and Account; (iv) the amount applied to the purchase or redemption of Bonds under the provisions of this Indenture and a description of the Bonds or portions of Bonds so purchased or redeemed; and (v) any other information that the City may reasonably request, including, but not limited to, submittal of monthly statements of activity relating to the Bonds. Such information shall also be provided at the direction of the City to one additional designated entity. All records and files pertaining to each such Fund and Account in the custody of the Trustee hereunder shall be open at all reasonable times to the inspection of the City and its agents and representatives, and the City may make copies thereof. (b) The Trustee additionally shall be responsible for the preparation and timely distribution of any and all forms and reports required by law to all Bondholders, the State and the Internal Revenue Service in connection with the payment to the Bondholders of interest on the Bonds. Section 904. Notice to Bondholders of Default. If a default occurs of which the Trustee is pursuant to the provisions of Section 901(g) deemed to have or is given notice, the Trustee shall promptly make demand upon the City and give notice to each owner of Bonds then Outstanding. Section 905. Intervention by Trustee. In any judicial proceeding to which the City is a party and which in the opinion of the Trustee and its counsel has a substantial bearing on the interests of Holders of Bonds issued hereunder, the Trustee may intervene on behalf of Bondholders and shall do so if requested in writing by the Holders of at least 51% of the aggregate principal amount of Bonds Outstanding hereunder. The rights and obligations of the Trustee under this Section 905 are subject to the approval of the court having jurisdiction in the premises. Section 906. Merger or Consolidation of Trustee. Any bank or trust company to which the Trustee may be merged, or with which it may be consolidated, or to which it may sell or transfer its trust business and assets as a whole or substantially as a whole, or any bank or trust company resulting from any such sale, merger, consolidation or transfer to which it is a party, ipso facto, shall be and become successor trustee hereunder and vested with all of the title to the whole property or Trust Estate and all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed, or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that such successor trustee shall have capital and surplus of at least $40 million. Section 907. Resignation by Trustee. The Trustee and any successor trustee may at any time resign from the trusts hereby created by giving written notice to the City and the Bondholders, and such resignation shall take effect upon the appointment of a successor trustee 39 4827-1462-7128.3 by the Bondholders or by the City. Such notice may be served personally or sent by registered mail (to the City) or first class mail (to the Bondholders). Section 908. Removal of Trustee. The Trustee may be removed at any time by an instrument or concurrent instruments in writing delivered to the Trustee and to the City, and signed by the Holders of not less than 51 % in aggregate principal amount of Bonds Outstanding hereunder. Section 909. Appointment of Successor Trustee. In case the Trustee hereunder shall resign or be removed, or be dissolved, or shall be in course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in case it shall be taken under the control of any public officer or officers, or of a receiver appointed by the court, a successor may be appointed by the Holders of not less than 51 % in aggregate principal amount of Bonds Outstanding hereunder, by an instrument or concurrent instruments in writing signed by such Holders, or by their attorneys in fact, duly authorized; provided, nevertheless, that in case of such vacancy the City by an instrument executed and signed by its Mayor and attested by its City Clerk under its seal, shall appoint a temporary trustee to fill such vacancy until a successor trustee shall be appointed by the Bondholders in the manner above provided. Any such temporary trustee appointed by the City shall immediately and without further act be superseded by the trustee appointed by such Bondholders. Every such temporary trustee and every such successor trustee shall be a trust company or bank in good standing, having capital and surplus of not less than $40 million. Section 910. Concerning Any Successor Trustee. Every successor or temporary trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the City an instrument in writing accepting such appointment hereunder, and thereupon such successor or temporary trustee, without any further act or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessor; but such predecessor shall, nevertheless, on the written request of the City or of its successor trustee, execute and deliver an instrument transferring to such successor all the estate, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor trustee shall deliver all securities, moneys and any other property held by it as trustee hereunder to its successor. Should any instrument in writing from the City be required by any successor trustee for more fully and certainly vesting in such successor the estates, rights, powers and duties hereby vested or intended to be vested in the predecessor trustee, any and all such instruments in writing shall, on request, be executed, acknowledged, and delivered by the City. Section 911. Reliance Upon Instruments. The resolutions, opinions, certificates and other instruments provided for in this Indenture may be accepted and relied upon by the Trustee as conclusive evidence of the facts and conclusions stated therein and shall be full warrant, protection and authority to the Trustee for its actions taken hereunder. Section 912. Appointment of Co -Trustee. The City and the Trustee shall have power to appoint, and upon the request of the Trustee the City shall for such purpose join with the Trustee in the execution of all instruments necessary or proper to appoint, another corporation or one or more Persons approved by the Trustee, either to act as co -trustee or co -trustees jointly 40 4827-1462-7128.3 with the Trustee of all or any of the property subject to the lien hereof, with such powers as may be provided in the instrument of appointment and to vest in such corporation or Person or Persons as such co -trustee any property, title, right or power deemed necessary or desirable. In the event that the City shall not have joined in such appointment within fifteen (15) days after the receipt by it of a request so to do, the Trustee alone shall have the power to make such appointment. Should any deed, conveyance or instrument in writing from the City be required by the co -trustee so appointed for more fully and certainly vesting in and confirming to such co - trustee such properties, rights, powers, trusts, duties and obligations, any and all such deeds, conveyances and instruments in writing shall, on request, be executed, acknowledged and delivered by the City. Every such co -trustee shall, to the extent permitted by law, be appointed subject to the following provisions and conditions, namely: (a) The Bonds shall be authenticated and delivered, and all powers, duties, obligations and rights conferred upon the Trustee in respect of the custody of all money and securities pledged or deposited hereunder, shall be exercised solely by the Trustee; and (b) The Trustee, at any time by an instrument in writing, may remove any such separate Trustee or co -trustee. Every instrument, other than this Indenture, appointing any such co -trustee shall refer to this Indenture and the conditions of this Article IX expressed, and upon the acceptance in writing by such co -trustee, the co -trustee shall be vested with the estate or property specified in such instrument, jointly with the Trustee (except insofar as local law makes it necessary for any separate trustee to act alone), subject to all the trusts, conditions and provisions of this Indenture. Any such co -trustee may at any time, by an instrument in writing, constitute the Trustee as the co -trustee's agent or attorney -in -fact with full power and authority, to the extent authorized by law, to do all acts and things and exercise all discretion authorized or permitted by the co -trustee, for and on behalf of the co -trustee and in the co -trustee's name. In case any co -trustee shall die, become incapable of acting, resign or be removed, all the estate, properties, rights, powers, trusts, duties and obligations of said co -trustee shall vest in and be exercised by the Trustee until the appointment of a new trustee or a successor to such co -trustee. Section 913. Designation and Succession of Paying Agent. The Trustee and any successor Trustee shall also be the Paying Agent for the Bonds. The Paying Agent shall enjoy the same protective provisions in the performance of its duties hereunder as are specified in Section 901 hereof with respect to the Trustee insofar as such provisions may be applicable. ARTICLE X SUPPLEMENTAL INDENTURES Section 1001. Supplemental Indentures Not Requiring Consent of Bondholders. The City and the Trustee may, from time to time and at any time, without the consent of or notice to the Bondholders, enter into Supplemental Indentures as follows: 41 4827-1462-7128.3 (a) to cure any formal defect, omission, inconsistency or ambiguity in this Indenture; (b) to grant to or confer or impose upon the Trustee for the benefit of the Bondholders any additional rights, remedies, powers, authority, security, liabilities or duties which may lawfully be granted, conferred or imposed and which are not contrary to or inconsistent with this Indenture as theretofore in effect, provided that no such additional liabilities or duties shall be imposed upon the Trustee without its consent; (c) to add to the covenants and agreements of, and limitations and restrictions upon, the City in this Indenture other covenants, agreements, limitations and restrictions to be observed by the City which are not contrary to or inconsistent with this Indenture as theretofore in effect; (d) to confirm, as further assurance, any pledge under, and the subjection to any claim, lien or pledge created or to be created by, this Indenture, of the Trust Estate or of any other moneys, securities or funds; (e) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time amended; (f) to authorize the issuance and sale of one or more series of Additional Bonds; (g) to make such additions, deletions or modifications as may be necessary to assure compliance with Section 148(f) of the Code relating to required rebate to the United States or otherwise as may be necessary to assure exemption from federal income taxation of interest on the Bonds; or (h) to modify, alter, amend or supplement this Indenture in any other respect which is not materially adverse to the Bondholders and which does not involve a change described in clause (a), (b), (c), (d), (e) or (f) of Section 1002 hereof and which, in the judgment of the Trustee, is not to the prejudice of the Trustee. Section 1002. Supplemental Indentures Requiring Consent of Bondholders. Subject to the terms and provisions contained in this Section 1002, and not otherwise, the Holders of not less than 2/3 in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in this Indenture to the contrary notwithstanding, to consent to and approve the execution by the City and the Trustee of such indenture or indentures supplemental hereto as shall be deemed necessary and desirable by the City for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in this Indenture or in any Supplemental Indenture; provided, however, that nothing herein contained shall permit or be construed as permitting (a) an extension of the maturity (or mandatory redemption date) of the principal of or the interest on any Bond issued hereunder, or (b) a reduction in the principal amount of or redemption premium or rate of interest on any Bond issued hereunder, or (c) the creation of any lien on the Trust Estate or any part 42 4827-1462-7128.3 thereof, except as hereinbefore expressly permitted, or (d) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture, or (f) the deprivation of the Holder of any Bond then Outstanding of the lien hereby created on the Trust Estate. Nothing herein contained, however, shall be construed as making necessary the approval of Bondholders of the execution of any Supplemental Indenture as provided in Section 1001. If, at any time the City shall request the Trustee to enter into any Supplemental Indenture for any of the purposes of this Section, the Trustee shall, at the expense of the City, cause notice of the proposed execution of such Supplemental Indenture to be mailed by first class mail to each registered owner of the Bonds. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the principal office of the Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such Supplemental Indenture when consented to and approved as provided in this Section 1002. If the Holders of not less than 2/3 in aggregate principal amount of the Bobnds Outstanding at the time of the execution of any such Supplemental Indenture shall have consented to and approved the execution thereof as herein provided, no Holder of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from executing the same or from taking any action pursuant to the provisions thereof. Section 1003. Effect of Supplemental Indentures. Upon the execution of any Supplemental Indenture entered into pursuant to Section 1001 or 1002 hereof, this Indenture shall be deemed to be modified and amended in accordance therewith. ARTICLE XI [RESERVED] 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 43 4827-1462-7128.3 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 Bank 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 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. 44 4827-1462-7128.3 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 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. 45 4827-1462-7128.3 IN WITNESS WHEREOF, the City has caused these presents to be signed in its name and behalf by its Mayor and its corporate seal to be hereunto affixed and attested by its City Clerk, and, to evidence its acceptance of the trust hereby created, the Trustee has caused these presents to be signed in its behalf by its duly authorized officers and its corporate seal to be hereto affixed. ATTEST: City Clerk `�11n1+n 1 , �,1,,/� (S K... RFgs�.�. _ .'GAS Y of •.C,�� FAYETTEVILLE: Z'. q CO • �: '%; s'• AKA NSP • J ��• .�*;N ; j ON 1` ATTEST: By: '). giNce Pre ident & Trust Officer (S j 6 8"��v/y�yy p�4Y0�� 19w CITY OF FAIYETTEVILLE. ARKANSAS SIMMONS BANK, as Trustee By Z. '. " A,, , , Title: Vice President & Corporate Trust Officer [SIGNATURE PAGE TO TRUST INDENTURE] 4827-1462-7128.3 EXHIBIT A TO TRUST INDENTURE Form of Series 2017 Bond Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17- UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 REGISTERED Interest Rate: % Maturity Date: January 1, 20 Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. Principal Amount: KNOW ALL MEN BY THESE PRESENTS: CUSIP: 31266W 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 January 1 and July 1 of each year, commencing on the January 1 or July 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 Bank, 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 A-1 4827-1462-7128.3 date shall fall (the "Record Date"). At any time thereafter, payment of interest hereon shall be made by check or draft of the Trustee to the Registered Owner as of the applicable Record Date, at the owner's address as it appears on the bond registration books of the City kept by the Trustee. This bond, designated "Library Improvement Bond, Series 2017", is one of a series of bonds aggregating Twenty Six Million Five Hundred Thousand Dollars ($26,500,000) in principal amount (the "Series 2017 Bonds"). The Series 2017 Bonds are being issued for the purpose of (i) financing a portion of the costs of acquisition, construction and equipping of capital improvements to the Fayetteville Public Library (the "Project'), and (ii) paying the costs of issuance of the Series 2017 Bonds, The Series 2017 Bonds are issued under and are secured by and entitled to the protection of a Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City and the Trustee, which Indenture is available for inspection at the principal corporate trust office of the Trustee. Reference is hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the City, the Trustee and the owners of the Series 2017 Bonds, and the terms upon which the Series 2017 Bonds are issued and secured. The Series 2017 Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas, including particularly, the Local Government Library Bond Act, codified as Arkansas Code Annotated (1998 Repl. & 2015 Supp.) §§14-142- 201 et seq. (as from time to time amended, the "Act"), and Ordinance No. 5903 of the City adopted September 20, 2016, which ordinance authorized the execution and delivery of the Indenture. In order to secure the repayment of the Series 2017 Bonds, the City has, in accordance with the Act, pledged all receipts from (i) a one and two -tenths (1.20) mill city tax on real and personal property within the City, together with all penalties and interest with respect thereto (the "Library Tax"), approved by the electors of the City and (ii) the City's allocable portion of the one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79") which is intended to offset any decreases in the Library Tax resulting from the homestead exemption implemented pursuant to Amendment 79 (the "Special Tax Collections"). The Indenture provides that the City may hereafter issue Additional Bonds under certain terms and conditions contained in the Indenture and, if issued or incurred, such Additional Bonds will rank on a parity of security with the Series 2017 Bonds and be equally and ratably secured by and entitled to the protection of the Indenture. The aggregate principal amount of all Bonds issued under the Indenture is limited to $26,500,000. The Series 2017 Bonds are not general obligations of the City, but are special obligations secured by an irrevocable pledge of and lien on the receipts from the Library Tax and the Special Tax Collections (collectively, the "Tax Receipts"), as more particularly described in the A-2 4827-1462-7128.3 Indenture. In no event shall the Series 2017 Bonds constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation. The holder of this Series 2017 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 2017 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 2017 Bonds are subject to redemption at the election of the City, on and after January 1, 2027, in whole or in part (in any order of maturities directed by the City, and by lot within a maturity) at any time, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. The Series 2017 Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from Project Fund moneys in excess of the amount needed to complete the Project or portion thereof being financed with the proceeds of the Series 2017 Bonds. The Series 2017 Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from surplus Tax Receipts (being amounts over and above the amount necessary to pay (i) current requirements of principal of and interest on the Bonds and Trustee and Paying Agent fees and expenses and (ii) amounts due on the next succeeding Interest Payment Date or Principal Payment Date). The Series 2017 Bonds maturing on January 1, 2032, are subject to mandatory sinking fund redemption prior to maturity in part, on January 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 $700,000 2029 $730,000 2030 $760,000 2031 $790,000 2032 (maturity) $820,000 A-3 4827-1462-7128.3 The Series 2017 Bonds maturing on January 1, 2037, are subject to mandatory sinking fund redemption prior to maturity in part, on January 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 2033 2034 2035 2036 2037 (maturity) Principal Amount $ 855,000 $ 890,000 $ 925,000 $ 965,000 $1,000,000 The Series 2017 Bonds maturing on January 1, 2042, are subject to mandatory sinking fund redemption prior to maturity in part, on January 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 2038 2039 2040 2041 2042 (maturity) Principal Amount $1,040,000 $1,075,000 $1,115,000 $1,150,000 $1,190,000 The Series 2017 Bonds maturing on January 1, 2047, are subject to mandatory sinking fund redemption prior to maturity in part, on January 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 2043 2044 2045 2046 2047 (maturity) Principal Amount $1,230,000 $1,265,000 $1,305,000 $1,345,000 $1,390,000 At its option, to be exercised on or before the 45th day next preceding any mandatory sinking fund redemption date for any Series 2017 Bonds, the City may deliver to the Trustee for cancellation Series 2017 Bonds of the appropriate maturity, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2017 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 2017 Bonds so to be redeemed shall be accordingly reduced. 4827-1462-7128.3 Notwithstanding the foregoing, so long as DTC or its nominee is the sole registered owner of the Series 2017.Bonds, the particular Series 2017 Bonds or portions thereof to be redeemed in part within a maturity shall be selected by lot by DTC in such manner as DTC shall determine. In selecting Series 2017 Bonds for redemption prior to maturity, in the case any outstanding Series 2017 Bond is in a denomination greater than $5,000, each $5,000 of face value of such Series 2017 Bond shall be treated as a separate Series 2017 Bond of the denomination of $5,000. In the event any of the Series 2017 Bonds or portions thereof (which shall be $5,000 or any integral multiple thereof) are called for redemption, notice thereof shall be given by the Trustee by first class mail to the registered owner of each such Series 2017 Bond addressed to such registered owner at his registered address and placed in the mails not less than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption; provided, however, that failure to give such notice by mailing, or any defect therein, shall not affect the validity of the proceedings for the redemption of any Series 2017 Bond with respect to which no such failure or defect has occurred. Each notice shall identify the Series 2017 Bonds or portions thereof being called, and the date on which they shall be presented for payment. After the date specified in such call notice, the Series 2017 Bond or Bonds so called for redemption will cease to bear interest provided funds sufficient for their redemption have been deposited with the Trustee, and, except for the purpose of payment, shall no longer be protected by the Indenture and shall not be deemed to be outstanding under the provisions of the Indenture. This Series 2017 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 2017 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 2017 Bonds may be exchanged for a like aggregate principal amount of Series 2017 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 2017 Bonds or for any claim based thereon or upon any obligation, covenant or agreement contained in the Series 2017 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 2017 Bonds. This Series 2017 Bond is issued with the intent that the laws of the State of Arkansas will govern its construction. A-5 4827-1462-7128.3 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 2017 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 2017 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 2017 Bonds as the same become due and payable will be sufficient in amount for that purpose. This Series 2017 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 2017 Bond to be executed by its Mayor and City Clerk, thereunto duly authorized (by their manual or facsimile signatures), and its corporate seal to be affixed or imprinted hereon, all as of the date hereof shown above. ATTEST: By: City Clerk (S E A L) CITY OF FAYETTEVILLE, ARKANSAS IN Mayor (Form of Trustee's Certificate) TRUSTEE'S CERTIFICATE OF AUTHENTICATION This bond is one of the Series 2017 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 2017 Bonds. SIMMONS BANK, as Trustee Authorized Signature A-6 4827-1462-7128.3 (Form of Assignment) ASSIGNMENT FOR VALUE RECEIVED, , hereby sells, assigns, and transfers unto , the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints as attorney to transfer the within Bond on the books kept for registration thereof with full power of substitution in the premises. DATE: 20 . Transferor GUARANTEED BY: NOTICE: Signature(s) must be guaranteed by an institution satisfactory to the Trustee or other transfer agent. A-7 4827-1462-7128.3 EXHIBIT B TO TRUST INDENTURE COVERAGE CERTIFICATE City of Fayetteville, Arkansas Library Tax Improvement Bonds Series 2017 Date: TO: Simmons Bank, as Trustee This certificate is provided pursuant to the provisions of Section 212 of the Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City of Fayetteville, Arkansas (the "City") and you, as trustee, in connection with the proposed issuance of Additional Bonds. In connection with such issuance, the undersigned certifies as follows: (a) Tax Receipts deposited into Revenue Fund for preceding twelve (12) months: $ (b) Maximum Annual Debt Service on all Outstanding Bonds, plus the proposed Additional Bonds: $ (c) (a) divided by (b) = % (which is greater than 120%) The undersigned hereby certifies that he is authorized to deliver this Certificate on behalf of the City. No Event of Default exists under the Indenture and, to the knowledge of the undersigned, no event has occurred and continues which with notice or lapse of time or both would constitute an Event of Default under the Indenture. All capitalized terms not otherwise defined herein shall have the meanings set forth in the Indenture. CITY OF FAYETTEVILLE, ARKANSAS Finance Director B-1 4827-1462-7128.3 EXHIBIT C TO TRUST INDENTURE FORM OF REQUISITION City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017 Date: Requisition No.: Project Name: TO: Simmons Bank, as Trustee Pursuant to the provisions of Section 502 of the Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City of Fayetteville, Arkansas (the "City") and you, as trustee, you are authorized to make the following described payment from the Project Fund [as a reimbursement to the City for payments previously made to the Payee named below] [directly to the Payee named below] : Name and Address of Payee: Amount of Payment: $ General Classification of the Expenditures: The undersigned hereby certifies that he is authorized to deliver this Requisition on behalf of the City. The amount requested hereunder has not been the basis for any previous Requisition by the City and is justly due and owing to the person(s) named herein as a proper payment or reimbursement of a Project Cost. No Event of Default exists under the Indenture and, to the knowledge of the undersigned, no event has occurred and continues which with notice or lapse of time or both would constitute an Event of Default under the Indenture. CITY OF FAYETTEVILLE, ARKANSAS By: Authorized Representative C-1 4827-1462-7128.3 TAX REGULATORY AGREEMENT between CITY OF FAYETTEVILLE, ARKANSAS and SIMMONS BANK as Trustee Dated as of July 19, 2017 Relating to: $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds Series 2017 Prepared by: Kutak Rock LLP 124 West Capitol Avenue Suite 2000 Little Rock, Arkansas 72201 EXECUTION COPY 4834-2701-4731.1 TAX REGULATORY AGREEMENT THIS TAX REGULATORY AGREEMENT (this "Tax Regulatory Agreement) is made and dated as of July 19, 2017, 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 BANK, a banking corporation organized and existing under the laws of the State of Arkansas, not in its individual capacity but solely in its capacity as the trustee (the "Trustee") named under that certain Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the Issuer and the Trustee. WITNESSETH: WHEREAS, pursuant to the Constitution and laws of the State of Arkansas, including particularly Amendment 30 and Arkansas Code Annotated §§ 14-142-201 et seq. (as from time to time amended, the "Authorizing Legislation"), the Issuer has authorized the issuance of $26,500,000 principal amount of its Library Improvement Bonds, Series 2017 (the "Bonds"), pursuant to the Indenture and Ordinance No. 5903, adopted and approved on September 20, 2016 (the "Authorizing Ordinance"), for the purposes of providing funds (i) to acquire, construct and equip improvements (the "Project") to the Fayetteville Public Library (the "Library"), and (ii) to pay the costs of issuance of the Bonds; and WHEREAS, the Issuer has determined that the issuance, sale and delivery of the Bonds is necessary in order to provide a portion of the financing for 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 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: 4834-2701-4731.1 ARTICLE I DEFINITIONS Section 1.1. Definitions. The following words and phrases shall have the following meanings. Any capitalized word or term used herein but not defined herein shall have the same meaning given in the Indenture. "Adjusted Fair Market Value" of an investment means the Fair Market Value plus the sum of all adjustments, if any, made to the issue price of such investment under Section 1272 of the Code, since the date the investment became a Nonpurpose Obligation. "Arbitrage Rebate Consultant" means an accounting firm or a firm of attorneys or another person or firm with knowledge of or experience in advising bond trustees with respect to the provisions of Section 148(f) of the Code. "Bond Counsel" means Kutak Rock LLP or an attorney or firm of attorneys recognized as having expertise in matters relating to the issuance of tax-exempt obligations reasonably acceptable to the Trustee. "Bonds" means the Issuer's $26,500,000 original principal amount of Library Improvement Bonds, Series 2017. "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 Bonds and ends January 1, 2018. "Code" means the Internal Revenue Code of 1986, as amended, and the Regulations thereunder. "Computation Period" means each period from the date of issue through the date on which a determination of the Rebate Amount is made. "Costs of -Issuance" means all costs incurred in connection with the borrowing. Examples of costs of issuance include (but are not limited to): (a) underwriter's spread (whether realized directly or derived through purchase of the Bonds at a discount below the price at which a substantial number of Bonds are sold to the public); (b) counsel fees (including bond counsel, underwriter's counsel, issuer's counsel, trustee's counsel and any other specialized counsel fees incurred in connection with the borrowing); (c) financial advisor fees (including the Issuer's financial advisor) incurred in connection with the borrowing; (d) rating agency fees; (e) trustee fees incurred in connection with the borrowing; 2 4834-2701-4731.1 (f) paying agent and certifying and authenticating agent fees related to issuance of the Bonds; (g) accountant fees related to issuance of the Bonds; (h) printing costs (for the Bonds and of preliminary and final offering materials); and (i) costs incurred in connection with the required public approval process (e.g., publication costs for public notices generally and costs of any public hearing or voter referendum or election expense). "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 Bonds; (e) Any amounts held in a pledged fund or reserve fund for the 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 capital improvements to the Library to be financed with proceeds of the 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 September 20, 2016 shall not be deemed to be Qualified Project Costs (except for costs under the de minimis and preliminary expenditure exceptions set forth in Section 1.150-2 of the U.S. Treasury Regulations), (ii) Costs of Issuance shall not be deemed to be Qualified Project Costs, and (iii) interest prior to the Completion Date (as defined in the Indenture) of the Project, letter of credit fees, and municipal bond insurance premiums which represent a transfer of credit risk must be allocated between Qualified Project Costs and other costs and expenses to be paid with Bond proceeds. "Rebate Amount" means, with respect to the Bonds, the amount computed as described in Section 4.13 hereof. 3 4834-2701-4731.1 "Regulation " or "Regulations " means the temporary, proposed or final Income Tax Regulations promulgated by the Department of the Treasury and applicable to the Bonds. "State " means the State of Arkansas. "Tax Regulatory Agreement" means this Tax Regulatory Agreement. "Trustee " means Simmons Bank, a banking corporation organized and existing under the laws of the State of Arkansas, or any successor trustee under the Indenture. "Underwriter" means Stephens Inc. "Yield" means, with respect to the Bonds, yield computed under Section 1.148-4 of the Regulations, and with respect to an investment, yield computed under Section 1.148-5 of the Regulations. Section 1.2. Reliance on Issuer Information. Bond Counsel and the Trustee shall be permitted to rely upon the contents of this Tax Regulatory Agreement and any certification, document or instructions provided pursuant to this Tax Regulatory Agreement and shall not be responsible or liable in any way for the accuracy of their contents or the failure of the Issuer to deliver any required information. 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 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 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 Bonds that the proceeds of the Bonds will be used to finance or reimburse a portion of the costs of the acquisition, construction and equipping of the Project (except those limited proceeds which are used to pay Costs of Issuance) and that all of the Project financed with proceeds of the Bonds will be, or will continue to 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 Bonds or any other funds of the Issuer, directly or indirectly, in any manner, and will not take or permit to be taken any other action, including use of the Project, that would cause interest on the Bonds to be included in the gross income of the owners thereof for federal income tax purposes. The Issuer will not use, or permit the use of, any portion of the Project in a manner that would cause the Bonds to be deemed "private activity bonds" within the meaning of Section 141 of the Code. 4 4834-2701-4731.1 In particular, except for contracts involving no more than five percent (5%) of the square footage of the Project facilities, the Issuer will not enter into any management agreement with any person which is not an "exempt person" for the operation or use of the Project facilities unless such agreement is a "qualified management or service agreement" (within the meaning of Treasury Regulation Section 1.141-3(b)(4)(i) and Revenue Procedure 2017-13, as amended or superseded from time to time). The Bonds have a weighted average maturity of 17.344 years, being less than one hundred twenty percent (120%) of the weighted average expected life of the Project. 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 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 Bonds are outstanding unless, in the written opinion of Bond Counsel, such change will not result in the inclusion of interest on the 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 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 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 Bonds and the application of the proceeds derived therefrom. The Issuer hereby represents, for the benefit of Bond Counsel and the owners of the Bonds, that it has reviewed the Internal Revenue Code Form 8038-G (Information Return for Tax -Exempt Governmental Obligations) prepared by Bond Counsel and that the information contained therein is true, complete and correct to the best knowledge of the Issuer as of the date of issuance of the 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 Bonds to be "federally guaranteed" within the meaning of § 149(b) of the Code. Section 2.7. Bonds Not Hedge Bonds. The Issuer represents that it reasonably expects to expend at least 85 percent of the "spendable proceeds" of the Bonds for the specific purposes for which the Bonds are issued within three years of the date hereof and not more than 50 percent 5 4834-2701-4731.1 of the proceeds of the Bonds will be invested in Nonpurpose Obligations having substantially guaranteed Yields for four years or more. Section 2.8. Reimbursement. The Issuer acknowledges its understanding that if any proceeds of the Bonds are used to reimburse the Issuer for costs relating to the Project that were paid prior to the date of issuance of the Bonds, such costs shall be deemed Qualified Project Costs eligible for requisition from the Project Fund by the Issuer only if the reimbursement is valid under § 1.150-2 of the Regulations. The Issuer further acknowledges its understanding that, in general, a reimbursement is valid only if (A) such costs were paid no sooner than sixty (60) days prior to September 20, 2016, the date the Issuer adopted an ordinance expressing its official intent to issue tax-exempt bonds to finance the Project, and (B) Bond proceeds are allocated to reimburse such costs within eighteen (18) months after the later of the date such expenditures were made or the date the Project is placed in service, but in no event later than three (3) years after the original expenditure was paid. Series 2.9. No Replacement. No portion of the amounts received from the sale of the Bonds will be used as a substitute for other funds which were otherwise to be used as a source of financing for the Project, and which will be used to acquire, directly or indirectly, investment obligations producing a Yield in excess of the Yield on the Bonds. Section 2.10. No Abusive Arbitrage Device. The Issuer represents that the 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. The Issuer will not use or permit the use of any proceeds of the Bonds or any other funds of the Issuer, directly or indirectly, to acquire any securities or obligations, and shall not use or permit the use of any amounts received by the Issuer or the Trustee in any manner, and shall not take or permit to be taken any other action or actions, which would cause any of the Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of the Code. Section 2.11. Single Issue. The Issuer represents that the 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 Bonds, (2) are being sold pursuant to the same plan of financing as the 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 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 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 6 4834-2701-4731.1 notwithstanding the defeasance of the Bonds and the discharge of the Indenture, until the final maturity date of all Bonds Outstanding and payment of such Bonds. ARTICLE III COVENANTS OF THE TRUSTEE Section 3.1. Covenants of the Trustee. The Trustee covenants to the Issuer that it will comply with all applicable provisions of this Tax Regulatory Agreement and any written letter or opinion of Bond Counsel which sets forth any action necessary by the Trustee to preserve interest on the 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 Bonds and the discharge of the Indenture, until the final maturity date of all Bonds Outstanding and payment of such Bonds. The Trustee shall keep records of the expenditure of Gross Proceeds of the 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 Bond proceeds and other moneys in order to support the Issuer's conclusion that the 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 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 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 Bonds. The Issuer is issuing and delivering the Bonds simultaneously with the execution of this Tax Regulatory Agreement, pursuant to the Authorizing Legislation, the Indenture and the Authorizing Ordinance. The Bonds are being issued for the purposes of providing a portion of the funds needed for (i) the acquisition, construction and equipping of capital improvements to the Library, and related improvements comprising the Project, and (ii) paying Costs of Issuance of the Bonds. The proceeds of the Bonds to be used to acquire, construct and equip the Project, together with other available 7 4834-2701-4731.1 moneys and investment earnings on such moneys and proceeds, do not exceed the amount necessary to provide for such purposes. Section 4.4. Funds and Accounts. The following funds and accounts have been established with the Trustee pursuant to the Indenture in connection with the Bonds: Project Fund; Revenue Fund; Bond Fund; Redemption Fund; Costs of Issuance Fund; and Rebate Fund. Section 4.5. Source and Disbursement of Bond Proceeds. The Bonds will be sold to the public at a purchase price equal to $27,268,647.40 (representing the $26,500,000.00 par amount of the Bonds plus an original offering premium of $768,647.40). The Underwriter will retain an underwriting discount of $265,000.00. Accordingly, the net amount of proceeds of the Bonds to be received by the Issuer shall be $27,003,647.40, which amount shall be deposited and expended as follows: (i) $26,905,000.00 will be deposited into the Project Fund and will be used to pay Qualified Project Costs with respect to the Project; and (ii) the remaining $98,647.40 of the proceeds will be deposited into the Cost of Issuance Fund and used to pay Costs of Issuance of the Bonds. Section 4.6. Costs of Issuance Fund. The Indenture creates the Costs of Issuance Fund which will be initially funded with $98,647.40 of Bond proceeds. Moneys in the Cost of Issuance Fund will be used to pay Costs of Issuance associated with the Bonds. Proceeds of the Bonds deposited in the Costs of Issuance Fund shall be spent within a one-year period beginning on the date of issuance of the Bonds and may be invested until expended in Nonpurpose Obligations that bear a Yield that is materially higher than the Yield on the 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, Bond Fund and Redemption Fund. The Indenture creates the Revenue Fund, the Bond Fund and the Redemption 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 Bonds as due. Moneys will be transferred from the Revenue Fund to the Redemption Fund as described in the Indenture to provide for the payment prior to maturity of the principal of the Bonds. Moneys deposited in the Revenue Fund, the Bond Fund and the Redemption Fund will be spent within a 13-month period beginning on the date of the original deposit in the Revenue Fund, and any amount received from investment of moneys held in the Revenue Fund, the Bond Fund or the Redemption Fund will be spent within a one-year period beginning on the date of receipt. The 8 4834-2701-4731.1 Revenue Fund, the Bond Fund and the Redemption Fund will be completely depleted at least once a year. Accordingly, the Revenue Fund, the Bond Fund and the Redemption Fund constitute "bona fide debt service funds" for the Bonds. Amounts in the Revenue Fund, Bond Fund and Redemption Fund may be invested until expended in Nonpurpose Obligations that bear a Yield that is materially higher than the Yield on the 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. [Reserved] . Section 4.9. Project Fund. The Indenture creates the Project Fund which will be initially funded with $26,905,000.00 of Bond proceeds. Moneys in the Project Fund will be used to pay costs associated with the acquisition, construction and equipping of the improvements comprising the Project. The Issuer has incurred, or will incur within six (6) months of the date of issuance of the 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 July 19, 2020. 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 Bonds. Until July 19 2020, the Net Sale Proceeds of the 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 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 Bonds. (a) The Underwriter has certified (i) that the initial offering price of the Bonds, as set forth in Section 4.5 of this Tax Regulatory Agreement, represents the maximum initial offering price at which a substantial amount of each maturity of the Bonds were offered for sale and sold to purchasers (exclusive of bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) through a bona fide offering, (ii) that such initial offering prices were established by a bona fide bid without regard to any amounts which would increase the Yield on any maturity of the 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 Bonds constitutes a true and correct summary thereof. (b) The Yield on the Bonds has been calculated by the Underwriter to be not less than 3.1027043%. 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 Bonds, the Issuer hereby represents, certifies and warrants as follows: 9 4834-2701-4731.1 (a) Other than Revenue Fund, the Bond Fund, the Redemption Fund, the Project Fund and the Costs of Issuance Fund created under the Indenture, there has not been created or established and the Issuer does not expect that there will be created or established, any sinking fund, pledged fund or similar fund, including, without limitation, any arrangement under which money, securities or obligations are pledged directly or indirectly to secure the Bonds or any contract securing the Bonds or any arrangement providing for compensating balances to be maintained by the Issuer with any holder of the 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. (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 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 10 4834-2701-4731.1 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 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 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 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 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 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 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 Bonds, together with any income attributable to such excess. The Cost of Issuance Fund, the Project Fund, the Revenue Fund, the Bond Fund, the Redemption Fund 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 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. 11 4834-2701-4731.1 (b) (i) Any funds remaining in the Rebate Fund after redemption and payment of all the 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 Tax Regulatory Agreement. (c) On or before 30 days following the end of the fifth Bond Year, upon the Issuer's written direction, an amount shall be deposited to the Rebate Fund by the Trustee from deposits made by the Issuer, if and to the extent required, so that the balance of the Rebate Fund shall equal the aggregate Rebate Amount required as of the end of such fifth Bond Year. (d) In order to meet the Issuer's obligations in complying with the rebate requirement of Section 148(f) of the Code, the Trustee and the Issuer agree and covenant to take the following actions: (i) For each investment of amounts held with respect to the Bonds (other than investments in obligations described in Section 103(a) of the Code, including amounts so treated) in the (I) Costs of Issuance Fund, (II) Project Fund, (III) Revenue Fund, (IV) Bond Fund, (V) Redemption Fund, 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. 12 4834-2701-4731.1 (ii) Any Arbitrage Rebate Consultant shall determine the amount of earnings received on all investments described in paragraph (i) above, other than investments in obligations described in Section 103(a) of the Code (including amounts so treated) which are not defined by the Code as "investment property" or amounts in the Revenue Fund, Bond Fund and Redemption Fund if the earnings on the Revenue Fund, Bond Fund and Redemption Fund do not, in the aggregate, exceed $100,000 for any Bond Year, during the Computation Periods ending with the following determination dates: (I) the last day of the first Bond Year and each succeeding last day of each Bond Year; (II) the maturity date of the Bonds; and (III) if all outstanding Bonds are redeemed prior to the maturity date of the Bonds, the date on which all Bonds are redeemed. In addition, where Nonpurpose Obligations are retained by the Trustee after retirement of the Bonds, any unrealized gains or losses as of the date of retirement of the Bonds must be taken into account in calculating the earnings on such Nonpurpose Obligations with each such obligation treated as sold for its Fair Market Value. In calculating the earnings described above, earnings received in a Bond Year shall include amounts which would be treated as income under Section 1272 of the Code regarding the accrual of original issue discount. In addition, earnings received in any Bond Year within the Computation Period shall include the gain or loss on the sale of any investment determined by subtracting the Adjusted Fair Market Value of the investment from the disposition price of the investment. For purposes of assisting the Issuer or an Arbitrage Rebate Consultant engaged by or on behalf of the Issuer in making such determinations, the Trustee shall provide to the Issuer or Arbitrage Rebate Consultant all information requested by the Issuer or Arbitrage Rebate Consultant in the possession of the Trustee. (iii) For each Computation Period specified in paragraph (ii) above, the Issuer or an Arbitrage Rebate Consultant engaged by the Issuer shall determine the amount of earnings on all investments held in the Rebate Fund during the Computation Period. In calculating the earnings, earnings within the Computation Period shall include amounts which would be treated as income under Section 1272 of the Code regarding the accrual of original issue discount. In addition, earnings in any Bond Year within the Computation Period shall include the gain or loss on the sale of any investment determined by subtracting the Adjusted Fair Market Value of the investment from the disposition price of the investment. (iv) For each Computation Period specified in paragraph (ii) above, the Issuer or an Arbitrage Rebate Consultant engaged by the Issuer shall calculate the Rebate Amount by any appropriate method described in the Code and Regulations applicable or which become applicable to the 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 13 4834-2701-4731.1 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 Bonds are paid or redeemed, 100% of the Rebate Amount as of the end of the final Computation Period less all previous payments made to the United States. (b) Each payment of Rebate Amount shall be mailed by the Trustee to the Internal Revenue Service Center, Ogden, Utah 84201. Each payment shall be accompanied by a copy of the Form 8038-T and the statement summarizing the determination of the Rebate Amount. (c) If during any Computation Period, the aggregate amount earned on Nonpurpose Obligations in which the Gross Proceeds of the 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 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 14 4834-2701-4731.1 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 Bonds through the date that is six years after the last 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 Bonds from the gross income of the recipients for purposes of federal income taxation. 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 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 15 4834-2701-4731.1 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.] 10 4834-2701-4731.1 IN WITNESS WHEREOF, the Issuer and the Trustee have caused this Tax Regulatory Agreement to be executed in their respective names and by their proper officers thereunto duly authorized, all as of the day and year first written above. SIMMONS BANK, as Trustee l By: Title: Vice P esident and orate Trust Officer [SIGNATURE PAGE TO TAX REGULATORY AGREEMENT] 17 4834-2701-4731.1 EXHIBIT A TO TAX REGULATORY AGREEMENT UNDERWRITER'S CERTIFICATE The undersigned officer of Stephens Inc., the Underwriter (defined below) for the $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017 (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) Structuring and Marketin . Stephens Inc. has served as 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) Sale of the Bonds. As of the date of this Certificate, for each Maturity of the Bonds, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed on Schedule A hereto. (3) Defined Terms. "Issuer" means the City of Fayetteville, Arkansas. "Maturity" means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. "Public" means any person (including an individual, trust, estate, partnership, association, company or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this Certificate generally means any two or more persons who have greater than 50% common ownership, directly or indirectly. "Underwriter" means (i) any person that agrees pursuant to a written contract with the Issuer (or the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). A-4 4834-2701-4731.1 (4) The Yield on the Bonds, as stated in Section 4.10(b) of the Tax Regulatory Agreement, calculated in accordance with the Regulations, including in particular Section 1.148(b)(3)(ii)(B) of the Regulations, is not less than 3.1027043%. 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. (5) The Bonds have a weighted average maturity, as stated in Section 2.2 of the Tax Regulatory Agreement, of 17.344 years. (6) To the best knowledge of the undersigned, the representations of the Issuer contained in the Tax Regulatory Agreement are true and correct. The representations set forth in this Certificate are limited to factual matters only. Nothing in this Certificate represents the interpretation of Stephens Inc. of any laws, including specifically Sections 103 and 148 of the Internal Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Regulatory Agreement and with respect to compliance with the federal income tax rules affecting the Bonds, and by Kutak Rock LLP, Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income of the recipients thereof for purposes of federal income taxation, the preparation of Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. IN WITNESS WHEREOF, the undersigned has set his hand as of the date set forth below. Dated: July 19, 2017 STEPHENS INC. By: _ Title: A-2 4834-2701-4731.1 SCHEDULE A Pricing and Balance Report at Sale Date $26,500,000 City of Fayetteville, AR Library Improvement General Obligation Bonds Series 2017 Pricing Report ADD'L TAKEDOWN MATURITY AMOUNT COUPON PRICE ( Pts ) 01/01/2018 560M 3.00% 0.90 3/8 (Approx. $ Price 100,940) 01/01/2019 530M 3.00% 1.10 3/8 (Approx. $ Price 102.725) 01/01/2020 545M 3.00% 1.25 1/2 (Approx. $ Price 104,209) 01/01/2021 565M 3.00% 1.40 1/2 (Approx. $ Price 105.370) 01/01/2022 580M 3.00% 1.55 3/4 (Approx. $ Price 106,211) 01/01/2023 600M 3.00% 1.70 3/4 (Approx. $ Price 106.738) 01/01/2024 615M 3.00% 1.90 3/4 (Approx. $ Price 106.647) 01/01/2025 635M 3.00% 2.10 3/4 (Approx. $ Price 106.176) 01/01/2026 655M 3.00% 2.30 3/4 (Approx. $ Price 105.347) 01/01/2027 675M 3.00% 2.45 3/4 (Approx. $ Price 104.613) 01/01/2032 3,800M 4.00% 3.03 3/4 (Approx. $ Price PTC 01/01/2027 107.917) 12.529 Avg Life 01/01/2037 4,635M 4.00% 3.33 3/4 (Approx. $ Price PTC 01/01/2027 105.392) 17.529 Avg Life CUSIP 31266WAAI 31266WAB9 31266WAC7 31266WAD5 31266WAE3 31266WAFO 31266WAG8 31266WAH6 31266WAJ2 31266WAK9 31266WAL7 31266WAM5 01/01/2042 5,570M 3.375% 3.46 1.00 31266WAN3 (Approx. $ Price 98.603) 19.189 Avg Life 01/01/2047 6,535M 3.05% 3.05 1/2 31266WAP8 8.119 Avg Life ---------------------•------------------ CALL FEATURES: Optional call in 01/01/2027 @ 100.00 A-3 4834-2701-4731.1 Balance Report Ma#urity Type CusIp No. bf Bonds Allotments . Balance, 01/01/2018 Bond :31266WAA1 560 560 0 01/01/2019 Bond _31266WAB9 530 -- 530 0 01/01/2020 Bond ;31266WAC7 545 545 0 01/01/2021 Bond ;31266WAD5 565 565 0 01 /01 /2022 Bond ; 31266WAE3 580 580 0 01/01/2023 Bond 31266WAFO 600 490 110 01/01/2024 Bond 31266WAG8 615 460 155 01/01/2025 Bond 31266WAH6 635 635 i 0 01/01/2026 Bond ` 31266WA,J2 ; 655 300 355 01/01/2027 Bond 31266WAK9 675 275 400 ... ._..... 01/01/2032 Bond 31266WAL7; ... 3,800 . ..... 3,800 .. _ . _ ....__. 0 01/01/2037 Bond 31266WAM5; 4,635 4,075 _ ...... _ 1 560 01/01/2042 Bond ;31266WAN3° 5,570 5,570 0 01/01/2047 Bond 31266WAP8' 6,535 6 535 0 Grand Totals 24;920.. *Hold for five business days or when 10% of the Bonds are sold to purchasers at or below the initial offering price, whichever is earlier. The above information accurately reflects the "issue price" and the "actual sales" of the Bonds on the Date of Sale. App r o,, Date: A-4 4834-2701-4731.1 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 Bank, an Arkansas banking corporation, as dissemination agent (the "Dissemination Agent"), in connection with the issuance of $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017 (the "Bonds"). The Bonds are being issued pursuant to the terms and provisions of Ordinance No. 5903 duly approved by the City Council of the City on September 20, 2016, and pursuant to the terms and provisions of a Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City and Simmons Bank, an Arkansas banking corporation, 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: 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. 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 comprehensive annual financial report 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 Bank, acting in its capacity as 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. 4821-2965-3304.2 "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. "Fiscal Year" shall mean the 12-month period used, at any time, by the City for accounting purposes, which may be the calendar year. "Library Tax" shall mean the one and two -tenths (1.2) mill per dollar City tax levied on the assessed value of all taxable property within the City approved by the voters at the August 9, 2016 special election. "Listed Event" means the occurrence of any of the events with respect to the Bonds set forth in Exhibit IL "Listed Events Disclosure " means dissemination of a notice of a Listed 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 Listed 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. "Special Tax Collections" shall mean the pro rata portion of the one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 to the Constitution of the State which is allocable to the Library Tax. "State " means the State of Arkansas. "Tax Receipts" shall mean, collectively, all receipts derived by the City from the levy of the Library Tax or the Special Tax Collections. "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 31266W AP8. The final Official Statement relating to the Bonds is dated June 13, 2017 (the "Final Official Statement"). 2 4821-2965-3304.2 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 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. Listed 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, Listed Events Disclosure to the MSRB in Prescribed Form. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Bonds need not be given under this Disclosure Agreement any earlier than the notice (if any) of such redemption is given to the owners of the Bonds pursuant to the Indenture. The City is required to deliver or cause delivery of such Listed 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 substantially the form set forth in Exhibit III hereto or in the form prescribed by the MSRB 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. 3 4821-2965-3304.2 Section S. 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 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 Listed 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 Listed 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 Listed 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 0 4821-2965-3304.2 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 Listed Events Disclosure, including the content of such disclosure, the names of the entities with whom such disclosure was filed and the date of filing such disclosure. Section 14. Past Compliance. The City is a party to prior undertakings pursuant to the Rule. Except as set forth in the Official Statement for the Bonds under the caption "SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT," the City has, to the best of its knowledge, for the past five years, been in compliance in all material respects with the provisions in such undertakings requiring the filing of certain financial information and financial statements and certain listed events with the MSRB. The City has implemented procedures to assure verifiable future compliance with its continuing disclosure obligations. 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. 4821-2965-3304.2 Section 17. Governing Law. This Disclosure Agreement shall be governed by and construed in accordance with the laws of the State, provided that to the extent this Disclosure Agreement addresses matters of federal securities laws, including the Rule, this Disclosure Agreement shall be construed in accordance with such federal securities laws and official interpretations thereof. Dated: July 19, 2017 SIMMO NK, as Dissemination Agent B Title: Vice resident and torporate Trust Officer 0 4821-2965-3304.2 EXHIBIT I ANNUAL FINANCIAL INFORMATION AND TIMING AND AUDITED FINANCIAL STATEMENTS "Annual Financial Information" means Tax Receipts for the latest Fiscal Year and for the four previous Fiscal Years, if available. 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. I-1 4821-2965-3304.2 EXHIBIT II EVENTS WITH RESPECT TO THE BONDS FOR WHICH LISTED EVENTS DISCLOSURE IS REQUIRED l . Principal and interest payment delinquencies 2. Nonpayment -related defaults, if material 3. Unscheduled draws on debt service reserves reflecting financial difficulties 4. Unscheduled draws on credit enhancements reflecting financial difficulties 5. Substitution of credit or liquidity providers, or their failure to perform 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security 7. Modifications to rights of security holders, if material 8. Bond calls, if material, and tender offers 9. Defeasances 10. Release, substitution or sale of property securing repayment of the securities, if material 11. Rating changes 12. Bankruptcy, insolvency, receivership or similar event of the City* 13. The consummation of a merger, consolidation or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material * This event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. II-1 4821-2965-3304.2 EXHIBIT III NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Fayetteville, Arkansas Name of Bond Issue: City of Fayetteville, Library Improvement Bonds, Series 2017 Date of Issuance: July 19, 2017 NOTICE IS HEREBY GIVEN that an Annual Report with respect to the above -named Bonds has not been provided as required by the Continuing Disclosure Agreement between the Issuer and the undersigned dated July 19, 2017. Dated: SIMMONS BANK, as Dissemination Agent Authorized Officer 4821-2965-3304.2 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-1 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 3.000% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $560,000 Maturity Date: January 1, 2018 CUSIP: 31266W AA1 Principal Amount: FIVE HUNDRED SIXTY THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July 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 Bank, 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. COO FY1 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-2 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 3.000% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $530,000 Maturity Date: January 1, 2019 CUSIP: 31266W AB9 Principal Amount: FIVE HUNDRED THIRTY THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July 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 Bank, 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. Unless this certificate is presented by an authorized. representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-3 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 3.000% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $545,000 Maturity Date: January 1, 2020 CUSIP: 31266W AC7 Principal Amount: FIVE HUNDRED FORTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July 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 Bank, 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. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-4 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 3.000% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $565,000 Maturity Date: January 1, 2021 CUSIP: 31266W AD5 Principal Amount: FIVE HUNDRED SIXTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July I 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 Bank, 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. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-5 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 3.000% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $580,000 Maturity Date: January 1, 2022 CUSIP: 31266W AE3 Principal Amount: FIVE HUNDRED EIGHTY THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July 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 Bank, 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. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-6 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 3.000% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $600,000 Maturity Date: January 1, 2023 Principal Amount: SIX HUNDRED THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: CUSIP: 31266W AFO 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 January 1 and July 1 of each year, commencing on the January 1 or July 1 next succeeding the date of this bond shown above, except as the provisions hereinafter set forthwith 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 Bank, 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. COPY Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-7 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 3.000% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $615,000 Maturity Date: January 1, 2024 CUSIP: 31266W AG8 Principal Amount: SIX HUNDRED FIFTEEN THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July 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 Bank, 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. COPY Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co, or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-8 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 3.000% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $635,000 Maturity Date: January 1, 2025 CUSIP: 31266W AH6 Principal Amount: SIX HUNDRED THIRTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July 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 Bank, 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. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-9 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 3.000% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $655,000 Maturity Date: January 1, 2026 CUSIP: 31266W AJ2 Principal Amount: SIX HUNDRED FIFTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July 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 Bank, 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. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co, or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-10 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 3.000% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $675,000 Maturity Date: January 1, 2027 CUSIP: 31266W AK9 Principal Amount: SIX HUNDRED SEVENTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July 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 Bank, 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. COPY Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-11 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 4.000% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $3,800,000 Maturity Date: January 1, 2032 CUSIP: 31266W AL7 Principal Amount: THREE MILLION EIGHT HUNDRED THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July 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 Bank, 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. COPY Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-12 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 4.000% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $4,635,000 Maturity Date: January 1, 2037 CUSIP: 31266W AM5 Principal Amount: FOUR MILLION SIX HUNDRED THIRTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July 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 Bank, 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. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co,, has an interest herein. REGISTERED No. R17-13 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 3.375% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $5,570,000 Maturity Date: January 1, 2042 CUSIP: 31266W AN3 Principal Amount: FIVE MILLION FIVE HUNDRED SEVENTY THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July 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 Bank, 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. COPY Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by the authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein. REGISTERED No. R17-14 UNITED STATES OF AMERICA STATE OF ARKANSAS CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BOND SERIES 2017 Interest Rate: 3.050% Date of Bond: July 19, 2017 Registered Owner: CEDE & CO. REGISTERED $6,535,000 Maturity Date: January 1, 2047 CUSIP: 31266W AP8 Principal Amount: SIX MILLION FIVE HUNDRED THIRTY-FIVE THOUSAND DOLLARS KNOW ALL MEN BY THESE PRESENTS: That the City of Fayetteville, Arkansas, a municipality and political subdivision organized and existing by virtue of the laws of the State of Arkansas (the "City"), for value received, promises to pay to the Registered Owner shown above, or registered assigns, on the Maturity Date shown above, but solely from the source and in the manner hereinafter set forth, the Principal Amount shown above, and in like manner to pay interest on said amount from the date hereof until payment of such Principal Amount has been made or duly provided for, at the Interest Rate per annum shown above, such interest to be payable semiannually on January 1 and July 1 of each year, commencing on the January 1 or July l 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 Bank, 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. This bond, designated "Library Improvement Bond, Series 2017", is one of a series of bonds aggregating Twenty Six Million Five Hundred Thousand Dollars ($26,500,000) in principal amount (the "Series 2017 Bonds"). The Series 2017 Bonds are being issued for the purpose of (i) financing a portion of the costs of acquisition, construction and equipping of capital improvements to the Fayetteville Public Library (the "Project'), and (ii) paying the costs of issuance of the Series 2017 Bonds. The Series 2017 Bonds are. issued under and are secured by and entitled to the protection of a Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City and the Trustee, which Indenture is available for inspection at the principal corporate trust office of the Trustee. Reference is.hereby made to the Indenture and to all ind6ntures supplemental thereto for the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the City, the Trustee and the owners of the Series 2017 Bonds, and the terms upon which the Series 2017 Bonds are issued and secured. The Series 2017 Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas, including particularly, the Local Government Library Bond Act, codified as Arkansas Code Annotated (1998 Repl. & 2015 Supp.) §§14-142-201 et seq. (as from time to time amended, the "Act"), and Ordinance No. 5903 of the City adopted September 20, 2016, which ordinance authorized the execution and delivery of the Indenture. In order to secure the repayment of the Series 2017 Bonds, the City has, in accordance with the Act, pledged all receipts from (i) a one and two -tenths (1.20) mill city tax on real and personal property within the City, together with all penalties and interest with respect thereto (the "Library Tax"), approved by the electors of the City and (ii) the City's allocable portion of the one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79") which is intended to offset any decreases in the Library Tax resulting from the homestead exemption implemented pursuant to Amendment 79 (the "Special Tax Collections"). The Indenture provides that the City may hereafter issue Additional Bonds under certain terms and conditions contained in the Indenture and, if issued or incurred, such Additional Bonds will rank on a parity of security with the Series 2017 Bonds and be equally and ratably secured by and entitled to the protection of the Indenture. The aggregate principal amount of all Bonds issued under the Indenture is limited to $26,500,000. The Series 2017 Bonds are not general obligations of the City, but are special obligaticns secured by an irrevocable pledge of and lien on the receipts from the Library Tax and the Special Tax Collections (collectively, the "Tax Receipts"), as more particularly described in the hndenture. In no event shall the Series 2017 Bonds constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation. The holder of this Series 2017 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 2 COPY Series 2017 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 2017 Bonds are subject to redemption at the election of the City, on and after January 1, 2027, in whole or in part (in any order of maturities directed by the City, and by lot within a maturity) at any time, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. The Series 2017 Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from Project Fund moneys in excess of the amount needed to complete the Project or portion thereof being financed with the proceeds of the Series 2017 Bonds. The Series 2017 Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from surplus Tax Receipts (being amounts over and above the amount necessary to pay (i) current requirements of principal of and interest on the Bonds and Trustee and Paying Agent fees and expenses and (ii) amounts due on the next succeeding Interest Payment Date or Principal Payment Date). The Series 2017 Bonds maturing on January 1, 2032, are subject to mandatory sinking fund redemption prior to maturity in part, on January 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 2028 2029 2030 2031 2032 (maturity) Principal Amount $700,000 $730,000 $760,000 $790,000 $820,000 The Series 2017 Bonds maturing on January 1, 2037, are subject to mandatory sinking fund redemption prior to maturity in part, on January 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 2033 2034 2035 2036 2037 (maturity) Principal Amount $ 855,000 $ 890,000 $ 925,000 $ 965,000 $1,000,000 3 �Op�7 The Series 2017 Bonds maturing on January 1, 2042, are subject to mandatory sinking fund redemption prior to maturity in part, on January 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. 2038 2039 2040 2041 2042 (maturity) Principal Amount $1,040,000 $1,075,000 $1,115,000 $1,150,000 $1,190,000 The Series 2017 Bonds maturing on January 1, 2047, are subject to mandatory sinking fund redemption prior to maturity in part, on January 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 2043 2044 2045 2046 2047 (maturity) Principal Amount $1,230,000 $1,265,000 $1,305,000 $1,345,000 $1,390,000 At its option, to be exercised on or before the 45th day next preceding any mandatory sinking fund redemption date for any Series 2017 Bonds, the City may deliver to the Trustee for cancellation Series 2017 Bonds of the appropriate maturity, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2017 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 2017 Bonds so to be redeemed shall be accordingly reduced. Notwithstanding the foregoing, so long as DTC or its nominee is the sole registered owner of the Series 2017 Bonds, the particular Series 2017 Bonds or portions thereof to be redeemed in part within a maturity shall be selected by lot by DTC in such manner as LTC shall determine. In selecting Series 2017 Bonds for redemption prior to maturity, in the case any outstanding Series 2017 Bond is in a denomination greater than $5,000, each $5,000 of fa^e value of such Series 2017 Bor.4, shall be treated as a separate Series 2017 Bond of the denomination of $5,000. I'i the went any of the Series 2017 Bends or portions. thereof (which shall be $5,000 or any multiple therecf) are called for redemption, notice thereof shall be given by the Trustee by first class mail to the registered owner of each such Series 2017 Bcnd addressed to such registered owner at his registered address and placed hi 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 11 COpY by mailing, or any defect therein, shall not affect the validity of the proceedings for the redemption of any Series 2017 Bond with respect to which no such failure or defect has occurred. Each notice shall identify the Series 2017 Bonds or portions thereof being called, and the date on which they shall be presented for payment. After the date specified in such call notice, the Series 2017 Bond or Bonds so called for redemption will cease to bear interest provided funds sufficient for their redemption have been deposited with the Trustee, and, except for the purpose of payment, shall no longer be protected by the Indenture and shall not be deemed to be outstanding under the provisions of the Indenture. This Series 2017 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 2017 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 2017 Bonds may be exchanged for a like aggregate principal amount of Series 2017 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 2017 Bonds or for any claim based thereon or upon any obligation, covenant or agreement contained in the Series 2017 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 2017 Bonds. This Series 2017 Bond is issued with the intent that the laws of the State of Arkansas will govern its construction. 5 COPY 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 2017 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 2017 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 2017 Bonds as the same become due and payable will be sufficient in amount for that purpose. This Series 2017 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 2017 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 OFF . YETTEV'iLLE, ARKANSAS By: av� �- ayor ATTEST: „ �� �f,,,., K pQ i�i / ����.•' CITY ;�__ r r.A City Clerk ' ` TTEVj� I £; FrI �= (SEAL) (Form of Trustee's CTerl M'a"ie) TRUSTEE'S CERTIFICATE OF AUTHENTICATION This bond is one of the Series 2017 Bonds of the issue described in and issued under the prc-e,;sions of the within mentioned Indenture. Attached rereto is the complete text of the opinic--. of KPjak, '_%-C-,h LLP, a signed original of ch is on file wi`_h the undersigned, d _vered and dctcd th, d2t-; cf ch:, original deli�lery of and Yayrr_cnt for the s-ies 2017 Eonds. I'IMT� .,!OINS BANK, a:, Trustee f B y: Authori ed. Signature 6 (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. 7 BOND PURCHASE AGREEMENT June 13, 2017 City of Fayetteville City Administration Building 113 West Mountain Fayetteville, Arkansas 72701 $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017 Ladies and Gentlemen: On the basis of the representations, warranties and agreements and upon the terms and conditions contained herein, the undersigned, Stephens Inc. (the "Underwriter"), hereby offers to enter into this Bond Purchase Agreement (this `Bond Purchase Agreement") with the City of Fayetteville, Arkansas (the "City") which, upon your acceptance of this offer, will be binding upon you and upon the Underwriter. Terns 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 June 13, 2017. 1. General. Upon the terns and conditions and in reliance upon the respective representations, warranties and covenants herein, the Underwriter hereby agrees to purchase from the City, and the City hereby agrees to sell to the Underwriter, all (but not less than all) of $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017 (the "Bonds"), at the purchase price (the "Purchase Price") of $27,003,647.40 (equal to the par amount of the Bonds plus a net reoffering premium of $768,647.40 and less underwriter's discount of $265,000). 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 30 to the Arkansas Constitution and Arkansas Code Annotated (1998 Repl. & Supp. 2015) §§14-142-201 et seq. (the "Act"). The Bonds will constitute special and limited obligations of the City, secured solely by and payable solely from (1) a pledge of and lien on the receipts from (A) a one and two -tenths (1.2) mill City tax on real and personal property within the City authorized under the Act and levied within the City pursuant to Ordinance No. 5876 of the City Council of the City which was adopted on May 17, 2016 (the "Election Ordinance"), which levy was approved by the voters of the City at a special election held August 9, 2016, together with all penalties and interest payable 4827-8553-7592.4 with respect thereto (the "Library Tax), and (B) the City's allocable portion of the one-half of one percent (0.5%) statewide sales and use tax implemented pursuant to Amendment 79 to the Arkansas Constitution intended to offset homestead exemption decreases to the Library Tax (the "Special Tax Collections"), and (2) moneys or investments on deposit in the Revenue Fund, Bond Fund and Redemption Fund established by a Trust hldenture dated as of July 1, 2017 (the "Indenture"), by and between the City and Simmons Bank, Pine Bluff, Arkansas, as trustee (the "Trustee"), all as more particularly described in the Indenture. The Bonds shall be issued and secured pursuant to Ordinance No. 5903 of the City Council of the City which was adopted on September 20, 2016 (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 a portion of the costs of the Project (as defined in the Indenture), and (ii) to pay the costs of issuance of the Bonds. The City will undertake, pursuant to a Continuing Disclosure Agreement to be dated as of the date of delivery of the Bonds (the "Continuing Disclosure Agreement"), to provide certain annual financial and operating information and notices of the occurrence of certain events, if material, as required by Section (b)(5)(i) of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (the "Rule"). A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement (each hereinafter defined). Although certain of its past filings of annual financial and operating information were not been made on or before the dates required by the City's continuing disclosure undertakings, as described in the Official Statement (hereinafter defined), the City represents that all such filings have now been made through the EMMA system of the Municipal Securities Rulemaking Board and that it has undertaken steps to ensure future compliance with its continuing disclosure undertakings. In order to ensure compliance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the City will enter into a Tax Regulatory Agreement dated as of the date of delivery of the Bonds (the "Tax Regulatory Agreement"). 2. Bona Fide Public Offering. The Underwriter agrees to make a bona fide public offering of all of the Bonds at the offering prices set forth on the inside cover of the final Official Statement described below. 3. Delivery of Official Statement. (a) The City has previously provided the Underwriter with copies of its Preliminary Official Statement, including the cover page and the appendices thereto, dated June 5, 2017, relating to the Bonds (the "Preliminary Official Statement"). As of its date, the Preliminary Official Statement is "deemed final" by the City for purposes of SEC Rule 15c2-12(b)(1). The Preliminary Official Statement, as amended to conform to the terms of this Bond Purchase Agreement, including Exhibit A hereto, and with such other changes and amendments as are mutually agreed to by the City and the Underwriter, is herein referred to as the "Official Statement." 2 4827-8553-7592.4 (b) The City agrees to deliver to the Underwriter, at such address as the Underwriter shall specify, as many copies of the final Official Statement dated June 20, 2017, relating to the Bonds as the Underwriter shall reasonably request as necessary to comply with paragraph (b)(4) of the Rule (as defined above) and with Rule G-32 and all other applicable rules of the Municipal Securities Rulemaking Board. The City agrees to deliver such final Official Statement within seven (7) business days after the execution hereof. (c) The City hereby authorizes and approves the Preliminary Official Statement and the final Official Statement, consents to their distribution and use by the Underwriter and authorizes the execution of the final Official Statement by a duly authorized officer of the City. The City ratifies and confirns 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 tern is defined in the Rule, remains obligated to deliver final Official Statements pursuant to paragraph (b)(4) of the Rule. 4. City's Representations and Warranties. The City represents and warrants to the Underwriter that: (a) The City is a duly organized and existing political subdivision under the Constitution and laws of the State of Arkansas (the "State"). The City is authorized by the provisions of the Act to issue the Bonds for the purpose of financing a portion of the costs of acquiring, constructing and equipping the Project. (b) The City has the full legal right, power and authority (i) to adopt the Election Ordinance levying the Library Tax, (ii) to adopt the Authorizing Ordinance authorizing the issuance of and sale of the Bonds, (iii) to enter into this Bond Purchase Agreement, the hldenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement, (iv) to levy the Library Tax, (v) to issue, sell and deliver the Bonds to the Underwriter as provided herein, (vi) to pledge irrevocably the receipts of the Library Tax and the Special Tax Collections (collectively, the "Tax Receipts") to the payment of the principal of, premium, if any, and interest on the Bonds, and (vii) to carry out and consummate all other transactions contemplated by each of the aforesaid documents, and the City has complied with all provisions of applicable law, including the Act, in all matters relating to such transactions. (c) The City has duly authorized (i) the execution and delivery of the Bonds and the execution, delivery and due performance of this Bond Purchase Agreement, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement, (ii) the distribution and use of the Preliminary Official Statement and the execution, delivery and distribution of the final Official Statement, and (iii) the taking of any and all such actions as may be required on the part of the City to carry out, give effect to and consummate the transactions contemplated by such instruments. All consents or approvals necessary to be obtained by the City in connection with the foregoing have 3 4827-8553-7592.4 been received, and the consents or approvals so received remain still in full force and effect. (d) The Election Ordinance and the Authorizing Ordinance have been duly adopted by City Council of the City, are each in full force and effect and each constitutes the legal, valid and binding act of the City; and this Bond Purchase Agreement, the Indenture, the Continuing Disclosure Agreement and the Tax 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 confonnity with the laws of the State of Arkansas, including the Act, and will be entitled to the benefit and security of the Authorizing Ordinance and the Indenture. (f) The City has duly approved and authorized the distribution and use of the Preliminary Official Statement and the execution, delivery and distribution of the Official Statement. (g) The information contained in the Preliminary Official Statement is, and as of the Closing Date such information in the final Official Statement will be, true and correct in all material respects, and the Preliminary Official Statement does not and the final Official Statement will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (h) If, at any time prior to the earlier of (i) receipt of notice from the Underwriter pursuant to Section 3(d) hereof that Official Statements are no longer required to be delivered under the Rule or (ii) 25 days after the Closing Date, any event occurs as a result of which the Official Statement, as then amended or supplemented, might include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the City shall promptly notify the Underwriter in writing of such event. Any information supplied by the City for inclusion in any amendments or supplements to the Official Statement will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under- which they were made, not misleading. Upon the request of the Underwriter therefor, the City shall prepare and deliver to the Underwriter, at the City's expense, as many copies of an amendment or supplement to the Official Statement which will correct any untrue statement or omission therein as the Underwriter may reasonably request. 4 4827-8553-7592.4 (i) Neither the adoption of the Authorizing Ordinance or the Election 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 or thereof will conflict with, or constitute on the part of the City a violation of, or a breach of or default under, (i) any statute, indenture, mortgage, commitment, note or other agreement or instrument to which the City is a party or by which it is bound, (ii) any provision of the Constitution of the State of Arkansas, or (iii) any existing law, rule, regulation, ordinance, judgment, order or decree to which the City (or the members of its City Council or any of its officers in their respective capacities as such) is subject. All consents, approvals, authorizations and orders of governmental or regulatory authorities, if any, which are required for the City's execution and delivery of, consummation of the transactions contemplated by, and compliance with the provisions of this Bond Purchase Agreement, the Authorizing Ordinance, the Election Ordinance, the Bonds, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement have been obtained. (j) Except as is specifically disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending or, to the best knowledge of the City, threatened, which in any way questions the powers of the City referred to in subparagraph 4(b) above, or the validity of any proceeding taken by the City in connection with the issuance of the Bonds or the levy of the Library Tax, 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 Election 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. (in) The collection history with respect to the City's previously levied property taxes set forth in the Preliminary Official Statement under the caption entitled "PROPERTY TAX RECEIPTS" 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 5 4827-8553-7592.4 in a manner other than as provided in the Indenture, or which would cause the interest on the Bonds to be includable in gross income for federal income tax purposes. 5. City's Covenants. The City covenants with the Underwriter as follows: (a) The City will cooperate with the Underwriter in qualifying the Bonds for offer and sale under the securities or Blue Sky laws of such jurisdictions of the United States as the Underwriter may request; provided, however, that the City shall not be required to consent to suit or to service of process in any jurisdiction. The City consents to the use by the Underwriter in the course of its compliance with the securities or Blue Sky laws of the various jurisdictions of the documents relating to the Bonds, subject to the right of the City to withdraw such consent for cause by written notice to the Underwriter. (b) Prior to the earlier of (i) receipt of notice from the Underwriter pursuant to Section 3(d) hereof that final Official Statements are no longer required under the Rule or (ii) 25 days after the Closing Date, the City shall provide the Underwriter with such infonnation regarding the City, the Tax Receipts, and the current financial condition and ongoing operations of the City, all as the Underwriter may reasonably request. 6. Closing. At 10:00 a.m. Fayetteville time on July 19, 2017, 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 Bank, 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 of the Bonds by making a wire transfer of federal funds payable to the order of the Trustee for the account of the City. The Bonds shall be delivered to The Depository Trust Company in New York, New York, and the activities relating to the final execution and delivery of the Authorizing Ordinance, the Election Ordinance, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement and the other documents related to the Bonds and the payment for the Bonds and the delivery of the certificates, opinions and other instruments as described in Section 8 of this Bond Purchase Agreement shall occur in the offices of Kutak Rock LLP, 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 6 4827-8553-7592.4 recommended favorably, legislation introduced previous to the date hereof, which legislation, if enacted in its form as introduced or as amended, would have the purpose or effect of imposing federal income taxation upon revenues or other income of the general character to be derived by the City or by any similar body under the Authorizing Ordinance or the Indenture or similar documents or upon interest received on obligations of the general character of the Bonds or the Bonds, or of causing interest on obligations of the general character of the Bonds, or the Bonds, to be includable in gross income for purposes of federal income taxation, and such legislation, in the Underwriter's opinion, materially adversely affects the market price of the Bonds; or (ii) a tentative decision with respect to legislation shall be reached by a committee of the House of Representatives or the Senate of the Congress of the United States, or legislation shall be favorably reported or re -reported by such a committee or be introduced, by amendment or otherwise, in or be passed by the House of Representatives or the Senate, or recommended to the Congress of the United States for passage by the President of the United States, or be enacted or a decision by a federal court of the United States or the United States Tax Court shall have been rendered, or a ruling, release, order, regulation or official statement by or on behalf of the United States Treasury Department, the Internal Revenue Service or other governmental agency shall have been made or proposed to be made having the purpose or effect, or any other action or event shall have occurred which has the purpose or effect, directly or indirectly, of adversely affecting the federal income tax consequences of owning the Bonds or of any of the transactions contemplated in connection herewith, including causing interest on the Bonds to be included in gross income for purposes of federal income taxation, or imposing federal income taxation upon revenues or other income of the general character to be derived by the City or by any similar body under the Authorizing Ordinance or the Indenture or similar documents or upon interest received on obligations of the general character of the Bonds, or the Bonds which, in the opinion of the Underwriter, materially adversely affects the market price of or market for the Bonds; or (iii) legislation shall have been enacted, or actively considered for enactment with an effective date prior to the Closing, or a decision by a court of the United States shall have been rendered, the effect of which is that the Bonds, including any underlying obligations, or the Indenture, as the case may be, is not exempt from the registration, qualification or other requirements of the Securities Exchange Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or (iv) a stop order, ruling, regulation or official statement by the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall have been issued or made or any other event occurs, the effect of which is that the issuance, offering or sale of the Bonds, including any underlying obligations, or the execution and delivery of the Indenture as contemplated hereby or by the Official Statement, is or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or 7 4827-8553-7592.4 (v) any event shall have occurred or any information shall have become known to the Underwriter which causes the Underwriter to reasonably believe that the Official Statement as then amended or supplemented includes an untrue statement of a material fact, or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (vi) there shall have occurred any outbreak of hostilities or any national or international calamity or crisis, including a financial crisis, the effect of which on the financial markets of the United States is such as, in the reasonable judgment of the Underwriter, would materially adversely affect the market for or market price of the Bonds; or (vii) there shall be in force a general suspension of trading on the New York Stock Exchange, the effect of which on the financial markets of the United States is such as, in the reasonable judgment of the Underwriter, would materially adversely affect the market for or market price of the Bonds; or (viii) a general banking moratorium shall have been declared by federal, New York or State authorities; or (ix) any proceeding shall be pending or threatened by the Securities and Exchange Commission against the City; or (x) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any goven7unental 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 form approved by the City in the Indenture with only such changes therein as the Underwriter and the City shall mutually agree upon, which shall in all instances be as described in the final Official Statement; (b) At the time of Closing, (i) the Official Statement, this Bond Purchase Agreement, the Indenture, the Authorizing Ordinance, the Election Ordinance, the Continuing Disclosure Agreement and the Tax Regulatory Agreement shall be in full 8 4827-8553-7592.4 force and effect and shall not have been amended, modified or supplemented from the date hereof, except as may have been agreed to in writing by the Underwriter, (ii) the proceeds of the sale of the Bonds and other funds shall be deposited and applied as described in the Indenture, (iii) no default or event of default under the Indenture shall have occurred and be continuing, and (iv) no material adverse change affecting the City, the Library Tax or the Special Tax Collections 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 C 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 D hereto; (3) The Official Statement executed by a duly authorized officer of the City; (4) Certified copies of the Authorizing Ordinance and the Election Ordinance and all other ordinances and resolutions of the City relating to the Bonds and the Library Tax; (5) Certified copies of the Notice of Election and Mayor's Proclamation of Election Results, together with proofs of publication thereof, (6) Photocopies of the Bonds as executed and delivered; (7) A letter from Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc., to the effect that the Bonds have been assigned a rating of no less than "A" (stable outlook), which rating shall be in effect as of the Closing Date; (8) A certificate, in form and substance satisfactory to the Underwriter, of any duly authorized officer or official of the City satisfactory to the Underwriter, dated as of the Closing Date, to the effect that: (i) each of the City's representations, warranties and covenants contained herein are true and correct as of the Closing Date; (ii) the City has duly adopted the Authorizing Ordinance and the Election Ordinance by all action necessary under the Act and the laws and Constitution of the State of Arkansas, and has duly authorized the 9 4827-8553-7592.4 execution, delivery and due performance of the Bonds, the hldenture, the Continuing Disclosure Agreement, the Tax Regulatory Agreement, the Official Statement and this Bond Purchase Agreement; (iii) no litigation is pending, or to the knowledge of the officer or official of the City signing the certificate after due investigation and inquiry, threatened, to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity of the Bonds, the Library Tax, the Special Tax Collections, the Official Statement, the Authorizing Ordinance, the Election Ordinance, the hldenture, 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 foi7n or in substantially the form approved for such execution by appropriate proceedings of the City; (v) since December 31, 2016, there has not been any material adverse 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) neither the Authorizing Ordinance nor the Election Ordinance have been amended, modified or repealed as of the Closing Date, and the Authorizing Ordinance and the Election Ordinance remain 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, including the levy of the Library Tax, have been in any manner repealed, amended or changed; (viii) the City has complied in all respects with the provisions of the Act and has full legal right, power and authority to levy the Library Tax and to issue the Bonds for the purposes stated in the Act and to enter into this Bond Purchase Agreement, to adopt the Authorizing Ordinance and the Election Ordinance, to issue, sell and deliver the Bonds as provided in this Bond Purchase Agreement, and to carry out and consummate all other transactions contemplated by this Bond Purchase Agreement, the Authorizing Ordinance, the Election Ordinance, the 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; and (x) to the best knowledge of the officer or official of the City signing the certificate, no event affecting the City, the Library Tax or the Special Tax Collections 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; (9) 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 municipal corporation and city of the first class, organized under the laws of the State of Arkansas, with full power and authority to adopt the Authorizing Ordinance and Election Ordinance, to levy the Library Tax, and to execute and deliver the Bonds, the Indenture, the Continuing Disclosure Agreement, the Tax Regulatory 10 4827-8553-7592.4 Agreement and this Bond Purchase Agreement; (ii) the City has duly approved the Preliminary Official Statement and the Official Statement; (ill) the Authorizing Ordinance and the Election Ordinance have been duly adopted by the City by all action necessary under the Act and the laws and Constitution of the State of Arkansas, and each remains in full force and effect; (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 terns; (v) the information in the Official Statement under the captions "THE PROJECT," "THE CITY," "THE PUBLIC LIBRARY BOARD OF TRUSTEES" and "LEGAL MATTERS" (apart from financial or statistical data contained or incorporated therein, as to which no view need be expressed) is fair, accurate and complete and does not omit any matter which, in such counsel's opinion, for the purposes for which the Official Statement is to be used, should be included or referred to therein; (vi) excepting those matters discussed in the Official Statement, there is no action, suit or proceeding at law or in equity before or by any court, public board or body, pending or threatened, against or affecting the City, challenging the validity of the transactions contemplated by the Official Statement or the validity of the Bonds, the Library Tax, the Authorizing Ordinance, the Election 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 Election 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; (10) Evidence that Federal Form 8038-G has been executed by the City and is ready for filing with the Internal Revenue Service. 11 4827-8553-7592.4 (11) 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 (12) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter and Bond Counsel may reasonably request to evidence compliance by the City with legal requirements, the truth and accuracy, as of the time of Closing, of the representations of the City herein contained and the due performance or satisfaction by the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied. If the City shall be unable to satisfy the conditions to the obligations of the Underwriter contained in this Bond Purchase Agreement, or if the obligation of the Underwriter to purchase and accept delivery of the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter nor the City shall be under further obligation hereunder; except that the respective obligations to pay expenses, as provided in Section 12 hereof, shall continue in full force and effect. 9. Conditions to Obligations of the City. The obligations of the City hereunder are subject to the performance by the Underwriter of its obligations hereunder. 10. Survival. All representations, warranties and agreements of the City shall remain operative and in full force and effect, regardless of any investigations made by or on behalf of the Underwriter, and shall survive the Closing. The obligations of the City under Sections 11 or 12 hereof shall survive any termination of this Bond Purchase Agreement by the Underwriter pursuant to the terms hereof. 11. Indemnification. The City, to the extent permitted by law, agrees to indemnify and hold harmless the Underwriter, each member, officer, director, partner or employee of the Underwriter and each person who controls the Underwriter within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended (collectively called the "Indemnified Parties"), against any and all losses, claims, damages, liabilities or expenses (including any legal or other expenses incurred by an hndemnifed Party in connection with investigating any claims against an Indemnified Party and defending any actions) whatsoever caused by any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact contained in the Official Statement or caused by any omission or alleged omission from the Official Statement of any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading insofar as such losses, claims, damages, liabilities or expenses are caused by any such untrue or misleading statement or omission or alleged untrue or misleading statement or omission in the information contained in the Official Statement; provided, however, that the City shall not be liable to an Indemnified Party in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made in any of such documents in reliance upon and in confornity with written information furnished to the City by the Underwriter specifically for use therein. 12 4827-8553-7592.4 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 pennitted by law. 12. Payment of Expenses. The City will pay or cause to be paid all reasonable expenses incident to the performance of its obligations under this Bond Purchase Agreement, including, but not limited to, expenses of mailing or delivery of the Bonds, legal publication costs, costs for obtaining CUSIP numbers on the Bonds, fees payable to The Depository Trust Company relating to the Bonds, Federal Funds charges, costs of printing the Bonds, the Preliminary and final Official Statements, any amendment or supplement to the Preliminary or final Official Statement and this Bond Purchase Agreement, fees and disbursements of Bond Counsel, accountants' fees and expenses, any fees charged by investment rating agencies for the rating of the Bonds, bond insurance premiums, if any, fees of the Trustee and any paying agent fees, and any fees and disbursements in connection with the qualification of the Bonds for sale under the securities or "Blue Sky" laws of the various jurisdictions and the preparation of "Blue Sky" memoranda. In the event this Bond Purchase Agreement shall terminate because of the default of the Underwriter, the City will, nevertheless, pay, or cause to be paid, all of the expenses specified above. The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds, and all other expenses incurred by it in connection with the public offering and distribution of the Bonds, including the fees and expenses of any counsel retained by the Underwriter. If the City defaults under this Bond Purchase Agreement, the Underwriter may bring whatever legal action it may have against the City to recover damages, if any, incurred by the Underwriter. 13. Establishment of Issue Price. (a) The Underwriter agrees to assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at Closing an "issue price" or similar certificate, together with supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. (b) The City will treat the first price at which 10% of each maturity of the Bonds (the "10% test") is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% 13 4827-8553-7592.4 test). At or promptly after the execution of this Bond Purchase Agreement, the Underwriter shall report to the City the price or prices at which it has sold to the public each maturity of the Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the City the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the Bonds of that maturity or until all the Bonds of that maturity have been sold to the public. (c) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Bond Purchase Agreement at the offering price or prices (the "initial offering price"), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set forth therein. (d) The Underwriter confirms that any selling group agreement and any retail distribution agreement relating to the initial sales of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker -dealer that is a party to such retail distribution agreement, as applicable, to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the Underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public, and (b) comply with the hold -the -offering -price rule, if applicable, in each case if and for so long as directed by the Underwriter. The City acknowledges that, in making the representation set forth in this subsection, the Underwriter will rely (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the hold -the - offering -price rule, if applicable, as set forth in the selling group agreement and the related pricing wiles, and (ii) in the event that a retail distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker -dealer that is a party to such agreement to comply with the hold -flee -offering -price rule, if applicable, as set forth in the retail distribution agreement and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of the selling group, or of any broker -dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold -the -offering -price rule as applicable to the Bonds. (e) The Underwriter acknowledges that any sale of the Bonds to any person that is a related party to the Underwriter shall not constitute sales to the public for purposes of this Section 13. Further, for purposes of this Section 13: (i) "public" means any person other than an underwriter or a related party; (ii) "underwriter" means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with aperson described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a 14 4827-8553-7592.4 selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public); (iii) a purchaser of any of the Bonds is a "related party" to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (1) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of the other), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profits interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one party of the other); and (iv) "sale date" means the date of execution of this Bond Purchase Agreement by all parties. 14. Notices. Any notice or other- communication to be given to the City under this Bond Purchase Agreement may be given by delivering the same in writing to the Mayor at the address set forth above, and any notice or other communication to be given to the Underwriter under this Bond Purchase Agreement may be given by delivering the same in writing to Stephens Inc., 3425 North Futrall, Suite 201, Fayetteville, AR 72703, Attention: Mr. Bo Bittle. 15. Non assign ability. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriter (including any successor or assign of the Underwriter), and no other person, including any purchaser of the Bonds, shall acquire or have any right hereunder or by virtue hereof. 16. Applicable Law. This Bond Purchase Agreement shall be governed by and construed in accordance with the laws of the State of Arkansas. 17. 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. 15 4827-8553-7592.4 Very truly yours, STEPHENS INC. By: T) A6��. dy, - " Authori ed Representative Accepted and agreed to as of the date first above written: CITY OF FAETTEVILLE, ARKANSAS �1-1"7 ram 16 4827-8553-7592.4 EXHIBIT A MATURITY SCHEDULE (January 1) Principal Interest Maturity Amount Rate Yield Price 2018 $560,000 3.000% 0.900% 100.940% 2019 530,000 3.000 1.100 102.725 2020 545,000 3.000 1.250 104.209 2021 565,000 3.000 1.400 105.370 2022 580,000 3.000 1.550 106.211 2023 600,000 3.000 1.700 106.738 2024 615,000 3.000 1.900 106.647 2025 635,000 3.000 2.100 106.176 2026 655,000 3.000 2.300 105.347 2027 675,000 3.000 2.450 104.613 $3,800,000 4.000% Tei7n Bonds due January 1, 2032 Yield: 3.030% Price: 107.917%(,) $4,635,000 4.000% Tenn Bonds due January 1, 2037 Yield: 3.330% Price: 105.392%') $5,570,000 3.375% Term Bonds due January 1, 2042 Yield: 3.460% Price: 98.603.% $6,535,000 3.050% Term Bonds due January 1, 2047 Yield: 3.050% Price: 100.000% All maturities are "General Rule Maturities" as defined in Exhibit B. Priced to expected call date of January 1, 2027. A-1 4827-8553-7592.4 EXHIBIT B FORM OF ISSUE PRICE CERTIFICATE $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds Series 2017 The undersigned, on behalf of Stephens Inc., as underwriter of the above -captioned bonds (the `Bonds"), hereby certifies as set forth below with respect to the sale and issuance of the Bonds. 1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule 1. 2. Initial Offering Price of the Hold -the -Offering -Price Maturities. (a) Stephens Inc. offered the Hold -the -Offering -Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule 1 (the "hlitial Offering Prices") on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule 2. (b) As set forth in the Bond Purchase Agreement, Stephens Inc. has agreed in writing that, (i) for each Maturity of the Hold -the -Offering -Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the "hold -the - offering -price rule"), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker -dealer who is a party to the retail distribution agreement, to comply with the hold -the -offering -price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold -the -Offering -Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period. Defined Terms. (a) General Rule Maturities means those Maturities of the Bonds listed in Schedule 1 hereto as the "General Rule Maturities." (b) Hold -the -Offering -Price Maturities means those Maturities of the Bonds listed in Schedule 1 hereto as the "Hold -the -Offering -Price Maturities." (c) Holding Period means, with respect to a Hold -the -Offering -Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date (June 13, 2017), or (ii) the date on which Stephens Inc. has sold at least 10% B-1 4827-8553-7592.4 of such Hold -the -Offering -Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold -the -Offering -Price Maturity. (d) Issuer means the City of Fayetteville, Arkansas. (e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The ten-rn "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is June 13, 2017. (h) Underwriters means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (1) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the interpretation of Stephens Inc. of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Regulatory Agreement and with respect to compliance with the federal income tax rules affecting the Bonds, and by Kutak Rock LLP, Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. STEPHENS INC. By: Authorized Representative Dated: July_, 2017 B-2 4827-8553-7592.4 SCHEDULEI SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING PRICES OF THE HOLD -THE -OFFERING -PRICE MATURITIES (To be attached) 4827-8553-7592.4 SCHEDULE2 PRICING WIRE OR EQUIVALENT COMMUNICATION (To be attached) 4827-8553-7592.4 EXHIBIT C PROPOSED FORM OF BOND COUNSEL APPROVING OPINION Upon delivery of the Bonds in definitive forn, Kutak Rock LLP, Little Rock, Arkansas, proposes to deliver its approving opinion in substantially the following forn: July , 2017 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons Bank, as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $26,500,000 City of Fayetteville, Arkansas Library Tax Improvement Bonds Series 2017 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 $26,500,000 Library Tax Improvement Bonds, Series 2017 (the `Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 30 and Arkansas Code Annotated (1998 Repl. & Supp. 2015) § § 14-142-201 et seq. (as from time to time amended, the "Act"), pursuant to Ordinance No. 5903 of the City, duly adopted and approved on September 20, 2016 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City and Simmons Bank, as trustee (the "Trustee"). Reference is hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with respect to the conditions for the issuance of parity indebtedness by the City, the nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance and Ordinance No. 5876 of the City, duly adopted and approved on May 17, 2016 (the "Election Ordinance"), and to enter into and perform its obligations under the Indenture, the valid adoption C-1 4827-8553-7592.4 of the Election Ordinance and the Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Election Ordinance, the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 30 and the Act, the City is empowered to adopt the Election Ordinance and the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its tei7ns. 4. The Bonds have been duly authorized, executed and delivered by the City and are valid and binding limited obligations of the City payable from and secured by a valid lien on and pledge of the Trust Estate (as defined in the Indenture), including receipts of the Library Tax and the Special Tax Collections (each as defined in the Indenture), in the manner and to the extent provided in the Indenture. The City is duly authorized to pledge such Trust Estate, and no further action on the part of the City or any other party is required to perfect the same or the interest of the owners of the Bonds therein. 5. The Library Tax has been validly levied in accordance with the Constitution and laws of the State of Arkansas, including Amendment 30 and the Act, and may be validly pledged to secure the Bonds. 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 imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. The opinions set forth in the preceding sentence assume the accuracy of certain representations and compliance by the City with covenants designed to satisfy the requirements of the hlternal Revenue Code of 1986, as amended, that must be met subsequent to the issuance of the Bonds in order that the interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The City has C-2 4827-8553-7592.4 covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 7. The interest on the Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. 8. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is not required to be qualified under the Trust hldenture Act of 1939, as amended, in comlection 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, C-3 4827-8553-7592.4 EXHIBIT D PROPOSED FORM OF BOND COUNSEL SUPPLEMENTAL OPINION July _, 2017 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons Bank, as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $26,500,000 City of Fayetteville, Arkansas Library Tax Improvement Bonds Series 2017 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 comlection with this opinion we have also examined: (a) An executed counterpart of the Bond Purchase Agreement dated June 13, 2017 (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 July 19, 2017 (the "Disclosure Agreement"), by and between the City and Simmons Bank, as dissemination agent (the "Dissemination Agent"); (c) An executed counterpart of the Tax Regulatory Agreement dated July 19, 2017 (the "Tax Regulatory Agreement"), by and between the City and the Simmons Bank, as trustee (the "Trustee"); and (d) The Official Statement dated June 13, 2017, with respect to the Bonds (the "Official Statement"). D-1 4827-8553-7592.4 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 Dissemination Agent, the Disclosure Agreement constitutes the valid and binding agreement of the City enforceable in accordance with its terns. 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 terns. 4. To the best of our knowledge, there is no litigation or other proceeding pending or threatened in any court, agency or other administrative body (either State or Federal) which could have a material adverse effect on (a) the financial condition of the City, (b) the ability of the City to perfoin its obligations under the Authorizing Ordinance, the Indenture, the Bond Purchase Agreement, the Continuing Disclosure Agreement or the Tax Regulatory Agreement (collectively, the "Related Documents"), (c) the security for the Bonds, or (d) the transactions contemplated by the Related Documents. 5. Nothing has come to our attention which would cause us to believe that, as of the date hereof, the Official Statement (excluding financial and statistical data and inforination which is contained or incorporated in the Official Statement, as to which no view is expressed) contains any untrue statement of a material fact or omits to state any 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. The enforceability of the respective obligations of the parties to the documents and other items described above, and the availability of certain rights and remedies provided for therein, may be limited by bankruptcy, receivership, insolvency, reorganization, moratorium, marshalling or other similar statutes or rules of law affecting creditors' rights and remedies, to general principles of equity and to the discretion of any court in granting any relief or issuing any order, whether the proceeding is considered a proceeding at law or equity. In particular, the right to indemnification under any of the documents or other items described above may be limited by federal of state securities laws or by the public policy underlying such laws. This opinion is being rendered to you solely for your use and benefit and may not be relied upon in any manner, nor used, by any other person. Very truly yours, D-2 4827-8553-7592.4 PRELIMINARY OFFICIAL STATEMENT DATED JUNE 5, 2017 NEW ISSUE *RATING: S&P: "A" (stable outlook) 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 representation and continuing compliance with certain covenants, 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. Under existing law, Bond Counsel is of the opinion that the Bonds and the interest thereon are exempt from all state, county and municipal taxes in the State of Arkansas. See the caption "TAXMATTERS" herein. $25,690,000* * CITY OF FAYETTEVILLE, ARKANSAS LIBRARY EUPROVEMENT BONDS SERIES 2017 Dated: Date of Delivery Due: January 1, as shown on inside cover The Library Improvement Bonds, Series 2017 (the `Bonds"), are being issued by the City of Fayetteville, Arkansas (the "City") pursuant to Amendment 30 to the Constitution of the State of Arkansas and the Local Government Library Bond Act of 1993 for the purpose of (i) paying a portion of the costs of certain capital improvements to the Fayetteville Public Library (the "Project"), and (ii) paying certain expenses in connection with the issuance of the Series 2017 Bonds. See the captions "ESTIMATED SOURCES AND USES OF FUNDS" and "THE PROJECT" herein. The Series 2017 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 2017 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2017 Bonds. Individual purchases of the Series 2017 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers (`Beneficial Owners") of Series 2017 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. The Series 2017 Bonds shall bear interest from their dated date, payable on January 1 and July 1 of each year, commencing January 1, 2018. All such interest payments shall be payable to the persons in whose name such Series 2017 Bonds are registered on the bond registration books maintained by the Simmons Bank, Pine Bluff, Arkansas, as trustee and paying agent (the "Trustee"), as of the fifteenth day of the calendar month next preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2017 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 2017 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 July 1, 2017 (the "Indenture"), between the City and the Trustee, the payment of the principal of, premium, if any, and interest on the Series 2017 Bonds is secured by a pledge of the receipts from (i) a one and two -tenths (1.20) mill city tax on real and personal property within the City, together with all penalties and interest with respect thereto (the "Library Tax"), and (ii) the City's allocable portion of a one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79"), which is intended to offset decreases in the Library Tax resulting from homestead exemptions implemented pursuant to Amendment 79 (the "Special Tax Collections"). Receipts derived by the City from the Library Tax and the Special Tax Collections are collectively referred to hereinafter as the "Tax Receipts." See the captions "SECURITY FOR THE BONDS" and "PROPERTY TAX RECEIPTS" herein. Assuming satisfaction of certain coverage tests, the City has reserved the right to issue additional bonds to be secured on a parity basis with the Series 2017 Bonds. See the caption "THE SERIES 2017 BONDS —Additional Bonds" herein. The Series 2017 Bonds are subject to optional and mandatory redemption prior to maturity as more fully described herein under the caption "THE SERIES 2017 BONDS -Redemption." The Series 2017 Bonds are special limited tax obligations of the City secured by and payable solely from receipts of the Library Tax and the Special Tax Collections. The Series 2017 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 2017 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 2017 Bonds, except as described herein with respect to the Tax Receipts. The Series 2017 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 2017 Bonds will be available for delivery in New York, New York, on or about July 19, 2017. Stephens Inc. The date of this Official Statement is June _ 2017. * See the caption "RATING" herein. ** Preliminary; subject to change. MATURITY SCHEDULE* Maturity Principal Interest Janua 1 Amount Rate Yield CUSIP** 2018 $335,000 % % 2019 515,000 2020 530,000 2021 545,000 2022 560,000 2023 580,000 2024 595,000 2025 615,000 2026 630,000 2027 650,000 $3,655,000 % Term Bond due January 1, 2032 Yield: % CUSIP: $4,475,000 _% Term Bond due January 1, 2037 Yield: % CUSIP: $5,440,000 % Term Bond due January 1, 2042 Yield: % CUSIP: $6,565,000 _% Term Bond due January 1, 2047 Yield: % CUSIP: * Preliminary; subject to change. ** CUSIP© is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, operated by S&P Capital IQ, a business unit of Standard & Poor's Financial Services LLC. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services Bureau. CUSIP numbers have been assigned by an independent company not affiliated with the City and are included solely for the convenience of the registered owners of the Series 2017 Bonds. The City and the Underwriter are not responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Series 2017 Bonds by the City or by the Underwriter. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Series 2017 Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Series 2017 Bonds. CITY OF FAYETTEVILLE, ARKANSAS Issuer City Council Lioneld Jordan, Mayor Sarah Bunch Adella Gray Mark Kinion John La Tour Alan Long Sarah Marsh Matthew Petty Justin Tennant Don Marr, Chief of Staff Paul Becker, Finance Director Sondra Smith, City Clerk Kit Williams, City Attorney Fayetteville Public Library Board of Trustees Hershey Garner, President Janine Parry, Vice President Maylon Rice, Secretary Bryn Bagwell Suzanne Clark Bret Park Rob Qualls David Johnson, Executive Director SIMMONS BANK Pine Bluff, Arkansas Trustee and Paying Agent KUTAK ROCK LLP Little Rock, Arkansas Bond Counsel STEPHENS INC. Fayetteville, Arkansas Underwriter No dealer, broker, salesman or other person has been authorized by the City or by Stephens Inc. (the "Underwriter") to give any information or to make any representations, other than those contained herein; and, if given or made, such other information or representations must not be relied upon as having been authorized by either of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of any Series 2017 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 2017 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 2017 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 2017 Bonds............................................................................................................................................... 2 Securityfor the Bonds................................................................................................................................................ 5 Book -Entry Only System........................................................................................................................................... 6 TheProject................................................................................................................................................................. 8 Estimated Sources and Uses of Funds........................................................................................................................ 8 Estimated Debt Service Requirements....................................................................................................................... 9 Estimated Debt Service Coverage.............................................................................................................................. 9 TheCity......................................................................................................................................................................10 The Public Library Board of Trustees........................................................................................................................12 CityDebt Structure.....................................................................................................................................................12 PropertyTax Receipts................................................................................................................................................13 Definitions of Certain Terrns......................................................................................................................................15 Summaryof the Indenture..........................................................................................................................................19 Summary of the Continuing Disclosure Agreement...................................................................................................23 Summary of Arkansas Ad Valorem Tax Procedures..................................................................................................26 Underwriting..............................................................................................................................................................31 TaxMatters................................................................................................................................................................32 Rating.........................................................................................................................................................................33 LegalMatters..............................................................................................................................................................33 Miscellaneous............................................................................................................................................................. 33 Accuracy and Completeness of Official Statement....................................................................................................34 APPENDIX A — Form of Bond Counsel Opinion......................................................................................................A-1 APPENDIX B — Information Regarding Access to City's 2015 Comprehensive Annual Financial Report ..............B-1 OFFICIAL STATEMENT $25,690,000* CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BONDS SERIES 2017 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 of Library Improvement Bonds, Series 2017, in the principal amount of $25,690,000* (the "Series 2017 Bonds"), by the City of Fayetteville, Arkansas (the "City"). The City is a city of the first class organized and existing under the laws of the State of Arkansas (the "State"). The City is authorized under the laws of the State, including particularly Amendment 30 to the Constitution of the State, as amended by Amendment 72 to the Constitution of the State (as amended, "Amendment 30"), and the Local Government Library Bond Act of 1993, Arkansas Code Annotated (1998 Repl. & 2015 Supp.) §§14-142-201 et seq. (as from time to time amended, the "Act"), to issue and sell its bonds for the purpose of financing improvements to the Fayetteville Public Library. The Series 2017 Bonds are to be issued by the City pursuant to Amendment 30, the Act and Ordinance No. 5903, adopted and approved by the City Council on September 20, 2016 (the "Authorizing Ordinance"), for the purpose of (i) paying a portion of the costs of financing the acquisition, construction and equipping of capital improvements to the Fayetteville Public Library (the "Project"), and (ii) paying certain expenses in connection with the issuance of the Series 2017 Bonds. See the captions "ESTIMATED SOURCES AND USES OF FUNDS" and "THE PROJECT" herein. The issuance of the Series 2017 Bonds and the levy of the Library Tax (defined below) were approved by a majority of the qualified electors of the City at a special election held August 9, 2016. The Series 2017 Bonds are not general obligations of the City, but are special limited tax obligations payable solely from and secured by a pledge of the receipts from (i) a one and two -tenths (1.20) mill city ad valorem tax levied pursuant to Amendment 30 on real and personal property within the City, together with all penalties and interest with respect thereto (the "Library Tax"), and (ii) the City's allocable portion of a one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79"), which is intended to offset decreases in the Library Tax resulting from homestead exemptions implemented pursuant to Amendment 79 (the "Special Tax Collections"). The City has levied the Library Tax at the rate of one and two -tenths (1.20) mill (.0012) for collection in 2017 and continuously in each year thereafter. The City has covenanted that the Library Tax will be levied and collected annually and that it and the Special Tax Collections will be pledged as security for the Series 2017 Bonds until all of the outstanding Series 2017 Bonds, together with interest thereon and related costs and fees have been paid in full. Receipts derived by the City from the Library Tax and the Special Tax Collections are collectively referred to hereinafter as the "Tax Receipts." See the captions "SECURITY FOR THE BONDS," "PROPERTY TAX RECEIPTS" and "SUMMARY OF THE INDENTURE" herein. The Series 2017 Bonds are special limited tax obligations of the City secured by and payable solely from receipts of the Library Tax and the Special Tax Collections. The Series 2017 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 2017 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 2017 Bonds, except as described herein with respect to the Tax Receipts. Preliminary; subject to change. Additional Bonds may be issued on a parity of security with the Series 2017 Bonds under certain circumstances set forth in the Indenture (hereinafter defined). The Series 2017 Bonds and any such Additional Bonds are herein collectively referred to as the "Bonds." Seethe caption "THE SERIES 2017 BONDS -Additional Bonds" and "- Superior Obligations Prohibited" herein. The Series 2017 Bonds are subject to optional and mandatory redemption as provided under the caption "THE SERIES 2017 Bonds —Redemption" herein. Pursuant to the provisions of a Continuing Disclosure Agreement dated as of the date of delivery of the Series 2017 Bonds, by and between the City and Simmons Bank, as dissemination agent (the "Continuing Disclosure Agreement"), the City has undertaken certain obligations with respect to providing ongoing disclosure of certain financial and operating data concerning the City and the Tax Receipts and of the occurrence of certain specified 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 2017 Bonds, the Tax Receipts, the Continuing Disclosure Agreement, and the Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City and Simmons Bank, Pine Bluff, Arkansas, as trustee and paying agent (the "Trustee"), pursuant to which the Series 2017 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 2017 Bonds are qualified in their entirety by reference to the definitive form thereof and the information with respect thereto included in the Indenture. Copies of the Continuing Disclosure Agreement, the Indenture, and the form of Series 2017 Bond included therein are available from the City by writing to the attention of the City Clerk, City of Fayetteville, City Administration Building, 113 West Mountain, Fayetteville, Arkansas 72701, and, during the initial offering period only, from the Underwriter, Stephens Inc., 3425 North Futrall, Suite 201, Fayetteville, Arkansas 72703. Tax Receipt data has been provided by the City from the audited records of the City and certain demographic information has been obtained from other sources which are believed to be reliable. THE SERIES 2017 BONDS Description. The Series 2017 Bonds will be initially dated as their date of delivery, and will bear interest payable semiannually on January 1 and July 1 of each year, commencing January 1, 2018, at the rates set forth on the inside cover page hereof. The Series 2017 Bonds will mature on January 1 in the years and in the principal amounts set forth on the inside cover page hereof The Series 2017 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 2017 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2017 Bonds. Individual purchases of the Series 2017 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers (`Beneficial Owners") of Series 2017 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. All interest payments on the Series 2017 Bonds shall be payable to the persons in whose name such Series 2017 Bonds are registered on the bond registration books maintained by the Trustee, as of the fifteenth day of the calendar month next preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2017 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 2017 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 2017 Bonds, disbursement of such payments to DTC Participants is the responsibility of DTC, and the disbursement of such payments to Beneficial Owners is the responsibility of DTC Participants or Indirect Participants, as more fully described herein. Redemption. (1) The Series 2017 Bonds are subject to redemption prior to maturity at the election of the City, on and after January 1, 2027, in whole or in part (in any order of maturities directed by the City, and by lot within a maturity) at any time, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. (2) The Series 2017 Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from moneys on deposit in the Project Fund in excess of the amount needed to complete the Project. 2 (3) The Series 2017 Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Principal Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from surplus Tax Receipts (being amounts over and above the amount necessary to pay (i) current requirements of principal of and interest on the Series 2017 Bonds and Trustee and Paying Agent fees and expenses and (ii) amounts due on the next succeeding Interest Payment Date). (4) The Series 2017 Bonds maturing on January 1, 2032, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on January 1 in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount* 2028 $675,000 2029 700,000 2030 730,000 2031 760,000 2032 (maturity) 790,000 (5) The Series 2017 Bonds maturing on January 1, 2037, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on January 1 in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount* 2033 $825,000 2034 860,000 2035 895,000 2036 930,000 2037 (maturity) 965,000 (6) The Series 2017 Bonds maturing on January 1, 2042, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on January 1 in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount* 2038 $1,005,000 2039 1,045,000 2040 1,085,000 2041 1,130,000 2042 (maturity) 1,175,000 (7) The Series 2017 Bonds maturing on January 1, 2047, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on January 1 in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount* 2043 $1,220,000 2044 1,265,000 2045 1,310,000 2046 1,360,000 2047 (maturity) 1,410,000 * Preliminary; subject to change. At its option, to be exercised on or before the 451 day next preceding any mandatory sinking fund redemption date for any Series 2017 Bonds maturing January 1, 2032, January 1, 2037, January 1, 2042 and January 1, 2047 (the "Series 2017 Term Bonds"), the City may deliver to the Trustee for cancellation Series 2017 Term Bonds, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2017 Term Bond, or portion thereof, so delivered or previously redeemed (otherwise than through mandatory sinking fund redemption) and canceled by the Trustee shall be credited by the Trustee at 100% of the principal amount thereof on the obligation of the City on such mandatory sinking fund redemption date, and any excess over such amount shall be credited on future mandatory sinking fund redemption obligations with respect to the Series 2017 Term Bonds in chronological order, and the principal amount of such Series 2017 Term Bonds so to be redeemed shall be accordingly reduced. Partial Redemption of a Series 2017 Bond. If less than all of the Series 2017 Bonds of a maturity are called for redemption, the particular Series 2017 Bonds or portions of Series 2017 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 2017 Bonds, the procedures established by DTC shall control with respect to the selection of the particular Series 2017 Bonds to be redeemed. Notice of Redemption. Notice of the call for any redemption (other than mandatory sinking fund redemption), identifying the Series 2017 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 2017 Bonds, by any other means acceptable to DTC, including facsimile) to the registered owner of each such Series 2017 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 2017 Bond with respect to which no such failure or defect has occurred. Any notice mailed as provided above shall be conclusively presumed to have been duly given, whether or not the registered owner receives the notice. Additional Bonds. The City may issue from time to time one or more series of Additional Bonds for the purpose of (i) financing Project costs in connection with the acquisition, construction and/or equipping of a Project, (ii) refunding the Series 2017 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 2017 Bonds and any other series of Additional Bonds theretofore issued and then Outstanding, except insofar as any terms or conditions of redemption or purchase established under the Indenture may afford additional benefit or security for the Bonds of any particular series and except for the security afforded by any municipal bond insurance obtained with respect to any particular series of Bonds. Before any Additional Bonds are authenticated, there shall be delivered to the Trustee the items required for the issuance of Bonds by the Indenture, plus a Certificate of the Finance Director of the City certifying that, based upon necessary investigation, the Tax Receipts deposited into the Revenue Fund during the most recent twelve (12) months were not less than 120% of the maximum Annual Debt Service on all then Outstanding Bonds, plus the Additional Bonds then proposed to be issued. Notwithstanding the foregoing, no Additional Bonds shall be issued unless there is no default at the time of issuance under the Indenture and the aggregate principal amount of all Bonds issued shall not exceed $26,500,000. Superior Obligations Prohibited. Except to the extent as provided above with respect to the issuance of Additional Bonds, so long as Bonds are Outstanding under the Indenture, the City has covenanted not to create or permit the creation of any indebtedness, or to issue any bonds, notes, warrants, certificates or other obligations or evidences of indebtedness payable in any manner from the Tax Receipts or otherwise from the Trust Estate which (i) will in any way be superior to or rank on a parity with the Bonds, or (ii) will in any way be secured by a lien and charge on the Tax Receipts or on the moneys deposited in or to be deposited in the Revenue Fund, prior to or equal with the lien, pledge and charge created in the Indenture for the security of the Bonds, or (iii) will be payable prior to or equal with the payments to be made from the Tax Receipts or the Revenue Fund into the Bond Fund, or from said Bond Fund for the payment of the Bonds. The City is not prohibited or restricted from issuing bonds payable from Tax Receipts so long as use of the Tax Receipts in favor of said bonds shall be made expressly subject and subordinate to the pledge and use of Tax Receipts to pay principal of and premium, if any, and interest on the Bonds and to make all required deposits into all funds held by the Trustee pursuant to the Indenture. Transfer or Exchange. The Bonds may be transferred on the books of registration kept by the Trustee by the registered owner in person or by the owner's duly authorized attorney, upon surrender thereof, together with a written instrument of transfer duly executed by the registered owner or the owner's duly authorized attorney. Upon surrender for transfer of any Bond at the principal corporate office of the Trustee, the City shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds of the same series and in the same aggregate principal amount and of any authorized denomination or denominations. Transfers of registration or exchanges of Bonds shall be without charge to the Holders of such Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Holder of the Bond requesting such transfer or exchange as a condition precedent to the exercise of such privilege. The Trustee shall not be required to transfer or exchange any Bond during the period from and including a Record Date to the next succeeding interest payment date of such Bond nor to transfer or exchange any Bond after the mailing of notice calling such Bond for redemption has been made, and prior to such redemption. So long as DTC or its nominee is the sole registered owner of the Series 2017 Bonds, transfers of beneficial interests in the Series 2017 Bonds shall be in accordance with the rules and procedures of DTC and its direct and indirect participants. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. SECURITY FOR THE BONDS Tax Receipts. The Series 2017 Bonds are not general obligations of the City, but are special limited tax obligations payable solely from and secured by a pledge of the receipts from (i) a one and two -tenths (1.20) mill city ad valorem tax levied pursuant to Amendment 30 on real and personal property within the City, together with all penalties and interest with respect thereto (the "Library Tax"), and (ii) the City's allocable portion of a one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79"), which is intended to offset decreases in the Library Tax resulting from homestead exemptions implemented pursuant to Amendment 79 (the "Special Tax Collections"). Receipts of the Library Tax and the Special Tax Collections are referred to collectively herein as the "Tax Receipts." The Series 2017 Bonds are not secured by any lien on or security interest in any physical property. The Library Tax will be a continuing annual levy until sufficient collections have been received to retire all of the Series 2017 Bonds, plus Trustee and Paying Agent fees and expenses. Pursuant to the provisions of Amendment 30 and the Act, the levy of the Library Tax and the issuance of the Series 2017 Bonds were approved by the electors of the City at a special election held on August 9, 2016. The electors of the State of Arkansas approved Amendment 79 to the Arkansas Constitution at the November 2000 General Election. Amendment 79, which was effective on January 1, 2001, provides for annual credit against ad valorem taxes imposed on a homestead. As directed by Amendment 79, the Arkansas General Assembly has instituted a statewide sales and use tax at the rate of one-half of one percent (0.5%) for the purpose of assuring that millage levied to pay bonded indebtedness will provide a level of income sufficient to meet current debt service and other expense requirements. The City's share of said sales and use tax receipts relating to the Library Tax is defined herein as the "Special Tax Collections." See the caption "SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES —Amendment 79" herein. Arkansas ad valorem taxes are levied by various taxing authorities, assessed against real and personal property by county assessors, and collected by county collectors and remitted to the respective taxing authorities. See the caption "PROPERTY TAX RECEIPTS — Collection of Taxes" herein. All Tax Receipts will be deposited as received by the City or the Trustee into a special fund held by the Trustee (the "Revenue Fund"). All moneys held for the credit of the Revenue Fund shall be continuously invested in Investment Obligations (as defined in the Indenture). Until retirement of the Series 2017 Bonds, the Tax Receipts cannot be used for any purpose other than the payments of debt service on the Series 2017 Bonds, payment of arbitrage rebate, and the payment of Trustee and Paying Agent fees and expenses. Upon retirement of the Series 2017 Bonds, any surplus Library Tax collections which may have accumulated shall be transferred to the general fund of the City and shall be used for the maintenance and operation of the Fayetteville Public Library. The City will levy the Library Tax at the rate of one and two -tenths (1.20) mill (.0012) for collection in 2017 and continuously in each year thereafter. See the caption "PROPERTY TAX RECEIPTS - Coverage" herein for an estimate of future collections of the Library Tax based on historical collections of existing ad valorem taxes of the City. The Series 2017 Bonds are special limited tax obligations of the City secured by and payable solely from receipts of the Library Tax and the Special Tax Collections. The Series 2017 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 2017 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 2017 Bonds, except as described herein with respect to the Tax Receipts. BOOK -ENTRY ONLY SYSTEM The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Series 2017 Bonds. The Series 2017 Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered security will be issued for each maturity of the Series 2017 Bonds, in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC (or any successor securities depository) or its nominee will be considered by the City and the Trustee to be the owner or holder of the Series 2017 Bonds for all purposes under the Indenture. Owners of any book entry interests in the Series 2017 Bonds described below, will not receive or have the right to receive physical delivery of the Series 2017 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 2017 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 securities 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 3.6 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 between 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, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Series 2017 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2017 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2017 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. Beneficial Owners are, however, 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 2017 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 the Series 2017 Bonds, except in the event that use of the Book -Entry System for the Series 2017 Bonds is discontinued. To facilitate subsequent transfers, all Series 2017 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 2017 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2017 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2017 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 6 time. Redemption notices shall be sent to DTC. If less than all of the Series 2017 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 any other DTC nominee) will consent or vote with respect to the Series 2017 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the Record Date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2017 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 2017 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 2017 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 2017 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 2017 Bonds made to DTC or its nominee as the registered owner of the Series 2017 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 2017 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. [REMAINDER OF PAGE INTENTIONALLY BLANK] THE PROJECT In response to overwhelming community use of the Library's existing Blair Library facility and the continued growth in population of the City and surrounding region, the Fayetteville Public Library Board of Trustees commissioned a 2030 Master Plan (the "Master Plan") prepared by Meyer Scherer & Rockcastle, LTD, an architecture and interior design firm based in Minneapolis, Minnesota. The Master Plan identified space needs for the Library through 2030 and recommended a LEED-certified expansion (the "Expansion") to the existing Library facility. See the caption "THE PUBLIC LIBRARY BOARD OF TRUSTEES" herein for a description of the existing Library facility. It is anticipated that the Expansion will contain approximately 80,000 square feet and will include a youth services department twice the size of existing space dedicated for such purpose, a multi -purpose auditorium with a 700-800 person seating capacity, new teen service space, digital and robotics maker space, a new genealogy, state and local history research center, and a small business center, as well as additional space for traditional print and media materials. The Expansion will be constructed on owned property immediately adjacent to the existing Library facility and will be connected thereto. The City is currently coordinating with the Fayetteville Public Library Board of Trustees to solicit statements of qualifications from qualified architectural firms to provide design, construction observation and ancillary services necessary to construct the LEED-certified Expansion. It is anticipated that an architectural firm will be selected on or about July 25, 2017, and a contractor engaged in the third quarter of 2017. Current plans call for the commencement of construction of the Expansion in the second quarter of 2018, with completion of the Expansion expected in the second quarter of 2022. The preliminary estimate of the total cost of acquiring, constructing and equipping the Expansion is approximately $50 million. Approximately $25,225,000 of such amount will be paid from Series 2017 Bond proceeds. See the caption "ESTIMATED SOURCES AND USES OF FUNDS" herein. The remaining costs of the Expansion are expected to be funded by private donations. A capital campaign for such purpose is scheduled to begin in the Fall of 2017. ESTIMATED SOURCES AND USES OF FUNDS The proceeds of the Series 2017 Bonds are expected to be used as follows: Sources of Funds(') Series 2017 Bond Par Amount $25,960,000 Net Reoffering Premium[Discount] Total Sources: $ Uses of FundsM Deposit to Project Fund $25,225,000 Costs of Issuance and Underwriter's Discount 513,800 Contingency Total Uses: $_ Preliminary; subject to change. [REMAINDER OF PAGE INTENTIONALLY BLANK] ESTIMATED DEBT SERVICE REQUIREMENTS As of the date of closing, the Series 2017 Bonds will constitute the only debt obligations secured by the Tax Receipts. The following table sets forth estimates of the amounts required to pay scheduled principal of and interest on the Series 2017 Bonds during each Bond Year: Bond Series 2017 Series 2017 Total Debt Year(') Principal Interest(2) Service 2018 $ 335,000 $ 637,539 $ 972,539 2019 515,000 930,582 1,445,582 2020 530,000 915,131 1,445,131 2021 545,000 899,231 1,444,231 2022 560,000 882,881 1,442,881 2023 580,000 866,082 1,446,082 2024 595,000 848,681 1,443,681 2025 615,000 830,831 1,445,831 2026 630,000 812,381 1,442,381 2027 650,000 793,481 1,443,481 2028 675,000 773,981 1,448,981 2029 700,000 746,981 1,446,981 2030 730,000 718,981 1,448,981 2031 760,000 689,781 1,449,781 2032 790,000 659,381 1,449,381 2033 825,000 627,781 1,452,781 2034 860,000 594,781 1,454,781 2035 895,000 560,381 1,455,381 2036 930,000 524,581 1,454,581 2037 965,000 487,381 1,452,381 2038 1,005,000 448,781 1,453,781 2039 1,045,000 409,838 1,454,838 2040 1,085,000 369,344 1,454,344 2041 1,130,000 327,300 1,457,300 2042 1.175,000 283,513 1,458,513 2043 1,220,000 237,982 1,457,982 2044 1,265,000 193,756 1,45 8,756 2045 1,310,000 147,900 1,457, 900 2046 1,3 60,000 100,413 1,460,413 2047 1,410,000 51,113 1,461,113 Totals: 25.690,000 IL370, 770 43:060.770 (1) The twelve-month period ending Januaryl. (2) Preliminary; subject to change. Assuming for purposes of this Preliminary Official Statement, an average coupon rate on the Series 2017 Bonds of 3.752% per annum. ESTIMATED DEBT SERVICE COVERAGE The following table shows estimated maximum annual debt service coverage with respect to the Series 2017 Bonds utilizing the debt service due during the Bond Year ended January 1, 2047. Projected Tax Receipts(') $1,748,839 Maximum Annual Debt Service Requirement on the Series 2017 Bonds(2) $1,461,113 Maximum Annual Debt Service Coverage 1.20X (1) See the caption "PROPERTY TAX RECEIPTS" herein. (2) Preliminary; subject to change. THE COVERAGE NUMBER SET FORTH ABOVE IS BASED ON THE CITY'S 2017 PROPERTY ASSESSMENT OF $1,489,540,392 CERTIFIED BY THE WASHINGTON COUNTY ASSESSOR ON MARCH 24, 2017 AND THE FIVE-YEAR AVERAGE COLLECTION HISTORY OF THE CITY'S EXISTING LIBRARY TAX. ACTUAL COLLECTIONS OF TAX RECEIPTS WILL DEPEND ON NUMEROUS FACTORS, AND THERE CAN BE NO ASSURANCE THAT FUTURE TAX RECEIPTS AVAILABLE TO PAY DEBT SERVICE ON THE SERIES 2017 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 third largest city in the State. The City is located in the Metropolitan Statistical Area of Fayetteville/Springdale/Rogers (the "MSA" ), which includes all of Washington and Benton Counties in the northwest corner of the State and is approximately 185 miles northwest of Little Rock, Arkansas, 125 miles east of Tulsa, Oklahoma, and 210 miles south of Kansas City, Missouri. The City is served by U.S. Interstate 49, U.S. Highways 62 and 71, and State Highways 16, 45, 112, 156, 180 and 265. The Burlington Northern Railroad has several lines running through the City, and a general aviation airport with a 6,006-foot runway is available for limited commuter travel. The Northwest Arkansas Regional Airport is located approximately 40 minutes from downtown Fayetteville and provides daily flights to numerous venues. Government. The City currently operates under the Mayor -Council form of government pursuant to which a mayor, city attorney, city clerk and eight aldermen are elected, two from each of the City's four wards. The mayor, city attorney and city clerk are full-time positions elected to four-year terms. Aldermen also serve four-year terms. The City's elected officials and the dates on which their respective terms expire are as follows: Name Office Term Expires Lioneld Jordan Mayor 12/31/20 Kit Williams City Attorney 12/31/18 Sondra Smith City Clerk 12/31/20 Sarah Bunch Alderman 12/31/20 Adella Gray Alderman 12/31/18 Mark Kinion Alderman 12/31/18 John La Tour Alderman 12/31/18 Alan Long Alderman 12/31/20 Sarah Marsh Alderman 12/31/20 Matthew Petty Alderman 12/31/20 Justin Tennant Alderman 12/31/18 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 2003 $25,387 25,434 2004 27,420 26,846 2005 33,655 27,915 2006 35,914 29,479 2007 38,119 31,180 10 2008 $39,934 $32,434 2009 37,100 31,629 2010 37,629 31,991 2011 42,317 33,961 2012 48,371 36,291 2013 47,363 36,529 2014 51,809 37,782 2015 52,509 39,107 Source: Discover Arkansas, USA.gov Building permits issued by the CityG) are shown below for the years indicated: 2012 2013 2014 2015 2016 Residential Building 394 379 467 380 553 Permits Commercial Building 18 24 25 27 35 Permits Value of All Building Permits $251,041,427 $157,970,433 $220,477,214 $187,189,614 $275,432,651 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 2008 3.8% 5.2% 2009 6.1 % 7.4% 2010 6.5% 7.9% 2011 6.2% 8.0% 2012 5.6% 7.4% 2013 4.9% 6.8% 2014 4.0% 5.6% 2015 3.2% 4.3% 2016 2.7% 3.9% Employment and Industry. The principal campus of the University of Arkansas is located in the City and had total enrollment for the spring semester of 2017 of approximately 25,300. On the Fayetteville campus, the University employs approximately 8,900 faculty, administrative, secretarial, clerical and maintenance personnel in both full-time and part-time positions, making the University the largest employer in the City. Other major employers in the City, their products or services and approximate number of employees are set forth below: Employer Product or Service Employees Washington Regional Med Center Hospital 2,625 Washington Co. Government Government 1,410 Veteran's Admin. Medical Ctr. Hospital 1,390 Fayetteville School District Education 1,360 City of Fayetteville Government 766 Tyson Mexican Original Food Products 683 Wal-Mart #9149 Optical Lab 659 Wal-Mart #359 Retail 520 Wal-Mart #144 Retail 500 Source: City of Fayetteville 11 THE PUBLIC LIBRARY BOARD OF TRUSTEES The Fayetteville Public Library Board of Library Trustees (the "Board") is entrusted with providing leadership in performing the mission of the Fayetteville Public Library (the "Library"), to serve as a liaison between the Library and the City, and to ensure that the Library meets the informational, educational and recreational needs of the community. The Board is responsible for Library funds, maintenance and construction, policies and planning, and the appointment of the Library's Executive Director. The Board is to be composed of five to seven members from the public at large appointed by the Mayor and confirmed by the City Council. The present members of the Board are as follows: Member Term Expires Hershey Garner, President April 1, 2019 Janine Parry, Vice President April 1, 2018 Maylon Rice, Secretary April 1, 2020 Bryn Bagwell April 1, 2022 Suzanne Clark April 1, 2018 Bret Park April 1, 2022 Rob Qualls April 1, 2021 The Executive Director of the Library is David Johnson. Mr. Johnson has served in such position since February 2012. The City's current two-story, 88,000 square foot Blair Library is located at 401 West Mountain in the City. Opened in 2004, the Blair Library was voted the 2005 Library of the Year by the Library Journal, was awarded a LEED Silver -NC rating by the U.S. Green Building Council and was the first registered building of its kind in the State. Sustainable design elements are incorporated throughout the facility, including a cistern that recycles rainwater, a reflective green roof, shaded windows, LED parking lights and waterless urinals. The Library was chosen from a pool of 515 applicants for one of nine Library Innovation Grants bestowed by the International City/County Managers Association (ICMA) in association with the Bill and Melinda Gates Foundation. The grant was utilized to fund the installation of a solar panel test-bed on the Library roof that to date has produced 87,000 kWh of energy and has offset more than 100,000 pounds of co2 emissions. The Library is open seven days (64 hours) a week and provides 24-hour online access. The existing facility houses approximately 300,000 volumes, a children's library, a teen library and a cafe and provides meeting and study space for over 200 adults, 125 computer workstations, audio visual items, electronic resources and an attached parking deck. The Library has over 90,000 registered cardholders who borrowed nearly 1.2 million items in 2016. In 2015, there were approximately 619,000 visits to the Library (an average of 185 per hour). In 2016, 72,149 people attended 1,546 programs at the Library, including the Library's summer reading program, the largest in the State. An expansion to the existing Library facility will be financed in part with the proceeds of the Series 2017 Bonds. See the captions "THE PROJECT" and "ESTIMATED SOURCES AND USES OF FUNDS" herein. CITY DEBT STRUCTURE The information set forth below was obtained from the City and is believed to be accurate. General Obligation Debt. The City currently has no short-term or long-term general obligation debt outstanding. Tax -Supported Debt. The City currently has outstanding various debt issues which are not general obligations of the City, but which are secured by and payable from specific sales and use taxes and property tax increments. Revenue Debt. The City currently has outstanding debt issues secured by water and sewer system revenues and parking revenues. Reference is made to the City's 2015 Comprehensive Annual Financial Report (which may be accessed as described in Appendix B attached hereto) for a detailed description of the City's outstanding debt obligations. 12 PROPERTY TAX RECEIPTS Computation of Dollar Value of Tax Receipts. The most recent county -wide required reassessment of taxable property was completed in Washington County in 2015. For purposes of Amendment 59 to the Arkansas Constitution, the year in which the reassessment is completed is known as the "Base Year." For a general discussion of the reassessment requirement and its effect on assessed value and tax rates, see the caption "SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES" herein. The Library Tax pledged to the payment of the Series 2017 Bonds is levied at the rate of one and two - tenths (1.20) mills. For purposes of the coverage computation set forth below, it has been assumed that revenues from the collection of the Library Tax will remain constant for so long as any of the Series 2017 Bonds remain outstanding. In connection with this assumption, it is assumed that Special Tax Collections will equal the decrease in collections of the Library Tax resulting from the Homestead Exemption (as described under the caption "SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES — Homestead Exemption" herein). However, if the assessed valuation of taxable property in the City increases or decreases for any reason, the dollar amount of the Library Tax actually levied will increase or decrease proportionally. Assessed Valuation. 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 Utility Property Total 2009 $1,067,947,653 $191,973,349 $38,742,232 $1,298,663,234 2010 1,025,933,870 188,130,198 39,604,447 1,253,668,515 2011 1,046,174,941 199,900,209 42,689,391 1,288,764,541 2012 1,063,617,013 203,289,225 47,200,100 1,314,106,338 2013 1,084,550,127 216,005,532 44,189,124 1,344,744,783 2014 1,115,992,871 226,841,704 48,130,959 1,390,965,534 2015 1,171,158,618 232,141,573 51,742,571 1,455,042,762 2016 1,181,599,558 252,341,147 55,599,687 1,489,540,392 Source: Washington County Tax Assessor's Office. The assessed value represents 20% of the appraised value of property. No single taxpayer accounted for more than 1.15% of the City's 2016 total assessed valuation. Collection of Taxes. Historic collections of an existing 1.0 mill ad valorem tax for the benefit of the Library are shown in the following table: Percentage of Total Year Tax Levy Tax Collections Collections to Tax Levy 2012 $1,288,765 $1,279,913 99.31% 2013 1,314,106 1,294,454 98.50% 2014 1,344,745 1,316,986 97.94% 2015 1,390,966 1,350,331 97.08% 2016 1,455,043 1,402,544 96.39% Coverage. Based on the five-year average collection rate of 97.84%, collections of the 1.2 mill Library Tax levied on taxable property within the City, as supplemented by the Special Tax Collections, will provide coverage in excess of annual principal and interest requirements for the Series 2017 Bonds as shown below. The figures set forth below are estimates only, and there can be no assurance that the collection amount and rate will equal the estimated amounts below. Estimated Library Tax Revenue at 100% Collection(') $1,787,448 Most recent 5 years Average Total Collection RateP 97.84% Estimated Available Tax Revenue $1,748,839 Maximum Annual Debt Service (2047) (3) $1,461,113 Coverage Ratio 1.20X (1) Based on Certified 2017 Washington County property assessment of $1,489,540,392; 100% Collection less County Treasurer's Commission (2%) and Homestead Exemption plus Special Tax Collections. (2) See the subcaption "— Collection of Taxes" above. (3) Preliminary; subject to change. See the caption `ESTIMATED DEBT SERVICE REQUIREMENTS" herein. 13 Projected Mandatory Redemptions. The table under the caption "ESTIMATED DEBT SERVICE REQUIREMENTS' herein does not reflect possible mandatory redemptions from surplus Tax Receipts. Surplus Tax Receipts are collections of the Library Tax and the Special Tax Collections in excess of the amounts needed to pay scheduled debt service on the Series 2017 Bonds as due, Trustee's and Paying Agent fees and expenses, arbitrage rebate, and debt service amounts due on the next succeeding Interest Payment Date. Surplus Tax Receipts will be used to redeem the Series 2017 Bonds on each January 1. Based on a collection rate of 97.84% and an annual tax levy of $1,787,448, the estnnated available tax revenue will be approximately $1,749,000 per year. If such an estimate is correct and there is no increase or decrease in such collections or the collection rate and scheduled debt service on the Series 2017 Bonds is as shown under the caption "ESTIMATED DEBT SERVICE REQUIREMENTS" herein, the Series 2017 Bonds would be redeemed prior to maturity as shown below. There can be no assurance that these estimates will be realized and that the projected redemptions will occur in the amounts set forth below. Year Principal Due Projected Redemptions Total 2018 $ 335,000 $ 315,000 $ 650,000 2019 515,000 330,000 845,000 2020 530,000 340,000 870,000 2021 545,000 355,000 900,000 2022 560,000 370,000 930,000 2023 580,000 380,000 960,000 2024 595,000 395,000 990,000 2025 615,000 410,000 1,025,000 2026 630,000 430,000 11060,000 2027 650,000 445,000 1,095,000 2028 675,000 455,000 1,130,000 2029 700,000 480,000 1,180,000 2030 730,000 495,000 1225,000 2031 760,000 510,000 1:270,000 2032 790,000 530,000 11320,000 2033 825,000 550,000 1,375,000 2034 860,000 570,000 1430,000 2035 895,000 590,000 1:485,000 2036 930,000 620,000 1,550,000 2037 965,000 640,000 1605,000 2038 1,005,000 670,000 1:675,000 2039 1,045,000 75,000 1,120,000 Totals: $15.735.000 $9 95 $25.690.000 [REMAINDER OF PAGE INTENTIONALLY BLANK] 14 DEFINITIONS OF CERTAIN TERMS The following are definitions of certain terms used in this Official Statement: "Act" means the Local Government Library Bond Act of 1993, codified as Arkansas Code Annotated (1998 Repl. & 2015 Supp.) Sections 14-142-201 et seq., as from time to time amended. "Additional Bonds" means Bonds in addition to the Series 2017 Bonds which are issued under the provisions of Section 212 of the Indenture. "Additional Facilities" means land, buildings, structures, machinery, furniture, fixtures, equipment and all related or necessary tangible property constituting improvements which are permitted to be financed under the provisions of Amendment 30 and the Act. "Amendment 30" means Amendment 30 to the Constitution of the State of Arkansas, as amended by Amendment 72 to the Constitution of the State of Arkansas. "Amendment 79" means Amendment 79 to the Constitution of the State of Arkansas. "Annual Debt Service" means, with respect to all or any particular amount of Bonds, the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the amount of such payment which is provided from the proceeds of the sale of Bonds or from sources other than Tax Receipts. "Authorized Representative" means either the Mayor or the Finance Director of the City and such additional persons as from time to time may be designated to act on behalf of the City by a Certificate furnished to the Trustee containing the specimen signature thereof and executed on behalf of the City by its Mayor. "Authorizing Ordinance" means Ordinance No. 903, adopted by the City on September 20, 2016, which authorized the issuance of the Series 2017 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. "Board" means the Fayetteville Public Library Board of Trustees, or any successor thereto. "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. "Bond Year" means the twelve-month period beginning on January 2 of each year and ending on January 1 of the following year. "Bonds" mean the Series 2017 Bonds and all Additional Bonds, if any, authenticated and delivered under the Indenture. "Book -Entry System" means the book -entry system maintained by the Securities Depository, and described in the Indenture. "Certificate" means a document signed by an Authorized Representative of the City attesting to or acknowledging the circumstances or other matters therein stated. "City" means the City of Fayetteville, Arkansas, a municipality and political subdivision under the laws of the State of Arkansas. "City Clerk" means the person holding the office and performing the duties of the City Clerk of the City. "Closing Date" means, with respect to any series of Bonds, the date upon which there is an exchange of such series of Bonds for the proceeds representing the purchase price for such series of Bonds by the Original Purchaser or Purchasers thereof. "Code" means the Internal Revenue Code of 1986, as from time to time amended, and applicable regulations issued or proposed thereunder. "Continuing Disclosure Agreement" means, collectively, each Continuing Disclosure Agreement between the City and the Trustee, dated the date of issuance and delivery of a series of Bonds, as originally executed and as amended from time to time in accordance with the terms thereof. 15 "Cost of Issuance Fund" means the fund by that name created and established in the Indenture. "Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, including, but not limited to, underwriting discounts, fees and expenses, election expenses, publication expenses, expenses of printing, reproducing, filing and recording documents, initial fees and charges of the Trustee and any Paying Agent, fees and expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement for the Bonds, costs of execution, transportation and safekeeping of the Bonds, and other costs, charges and fees incurred in connection with the foregoing. "Debt Service" means, with respect to all or any particular amount of Bonds for any Payment Period, the amount required to pay the sum of the interest on such Bonds payable during the Payment Period and the principal of, and any other amount required to effect any mandatory redemption of, such Bonds, if any, during the Payment Period. "Election Ordinance" means Ordinance No. 5876, adopted by the City on May 17, 2016, which called a special election on August 9, 2016, on the levy of the Library Tax and the issuance of the Series 2017 Bonds. "Event of Default" means any event of default specified in Section 801 of the Indenture. "Finance Director" means the City's Chief Financial Officer. "Fiscal Year" means the 12-month period used, at any time, by the City for accounting purposes, which may be the calendar year. "Fund" means a fund confirmed or established by the Indenture. "Government Securities" means (i) direct obligations of the United States of America, (ii) obligations on which the full and timely payment of principal and interest is fully and unconditionally guaranteed by the United States of America (including any such securities issued or held in book -entry form on the books of the Department of Treasury of the United States of America), and (iii) evidences of direct ownership or proportionate or individual interest in future interest or principal payments on specified direct obligations of, or obligations on which the full and timely payment of principal and interest is fully and unconditionally guaranteed by, the United States of America, which obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian in form and substance satisfactory to the Trustee. "Holder" or `Bondholder" or "Owner of the Bonds" means the registered owner of any Bond. "Indenture" means the Trust Indenture dated as of July 1, 2017, between the City and the Trustee, pursuant to which the Bonds are issued, and any amendments and supplements thereto. "Interest Payment Date" means any date on which interest is payable on the Bonds. "Investment Obligations" means, if and to the extent the same are at the time legal for investment of funds held under the Indenture: (a) Cash deposits, certificates of deposits or money market deposits (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with Goverrunent Obligations); (b) Government Securities; (c) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America: U.S. Export -Import Bank (Eximbank); Rural Economic Community Development Administration; Federal Financing Bank; General Services Administration; U.S. Maritime Administration; U.S. Department of Housing and Urban Development (PHAs); Small Business Administration; Government National Mortgage Association (GNMA); Federal Housing Administration; and Farm Credit System Financial Assistance Corporation. (d) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: (i) Senior debt obligations rated in the highest long-term rating category by at least two nationally recognized rating agencies issued by the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC); and (ii) Senior debt obligations of the Federal Home Loan Bank System; (e) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which either (i) have a rating on their short-term certificates of deposit on the 16 date of purchase in the highest short-term rating category of at least two nationally recognized rating agencies, (ii) are insured at all times by the Federal Deposit Insurance Corporation, or (iii) are collateralized with direct obligations of the United States of America at 102% valued daily. All such certificates must mature no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (f) Commercial paper which is rated at the time of purchase in the highest short-term rating category of at least two nationally recognized rating agencies and which matures no more than 270 days after the date of purchase; (g) Investments in (i) money market funds subject to SEC Rule 2a-7 and rated in the highest short-term rating category of at least one of S&P and Moody's and (ii) public sector investment pools operated pursuant to SEC Rule 2a-7 in which the City's deposit shall not exceed 5% of the aggregate pool balance at any time and such pool is rated in one of the two highest short-term rating categories of at least one of S&P and Moody's; (h) Pre -refunded municipal obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (i) Which are rated, based on an irrevocable escrow account or fund (the `Escrow"), in the highest long-term rating category of at least two nationally recognized rating agencies; or (ii) (1) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or direct obligations of the United States of America, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (II) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; (i) General obligations of states with a short-term rating in one of the two highest rating categories and a long-term rating in one of the two highest rating categories of at least two nationally recognized rating agencies. In the event such obligations are variable rate obligations, the interest rate on such obligations must be reset not less frequently than annually; and 0) Any cash sweep account maintained by the Trustee and consisting of investments described in clauses (a) through (i). "Library Tax" means the one and two -tenths (1.20) mill per dollar City tax levied on the assessed value of all taxable property within the City approved by the voters at the August 9, 2016 special election, together with all penalties and interest payable with respect thereto. "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. "Original Purchaser" means the first purchaser(s) of a series of Bonds from the City. "Outstanding" or "outstanding" means, as of any date of computation, Bonds theretofore or thereupon being delivered under the Indenture, except: (a) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or prior to such date for cancellation; (b) Bonds deemed to be paid in accordance with Article VII of the Indenture; and (c) Bonds in lieu of or in exchange or substitution for which other Bonds shall have been authenticated and delivered pursuant to the Indenture. "Participants" means those financial institutions for 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. 17 "Payment Period" means a period from, but not including, a Principal Payment Date up to, and including, the next succeeding Principal Payment Date. "Person" means any natural person, firm, association, corporation, limited liability company, partnership, joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Principal Payment Date" means any date on which principal is payable on the Bonds, whether at maturity, by operation of the mandatory sinking fund, or otherwise. "Project" means the costs of acquiring, constructing and equipping capital improvements to the Fayetteville Public Library, as more particularly described under the caption "THE PROJECT" herein, and any Additional Facilities that may be acquired, constructed and equipped in the future with the proceeds of Bonds. "Project Costs" means, to the extent permitted by Amendment 30 and the Act or other applicable laws, with respect to a Project, all costs of planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation, including obtaining governmental approvals, certificates, permits and licenses with respect thereto, heretofore or hereafter paid or incurred by or on behalf of the City and which shall include, but shall not be limited to: (a) interest accruing in whole or in part on the Bonds prior to and during construction of a Project, including all amounts required by this Indenture to be paid from the proceeds of the Bonds into the Bond Fund; (b) preliminary investigation and development costs, engineering fees, contractors' fees, labor costs, the cost of materials, equipment, utility services and supplies, costs of obtaining permits, licenses and approvals, costs of real property, insurance premiums, legal and financing fees and costs, administrative and general costs, and all other costs properly allocable to the acquisition, construction and equipping of a Project and placing the same in operation; (c) all costs relating to injury and damage claims arising out of the acquisition, construction or equipping of a Project; (d) all other costs incurred in connection with, and properly allocable to, the acquisition, construction and equipping of a Project; and (e) amounts to pay or reimburse the City or any City fund for expenses incident and properly allocable to such planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation of a Project. "Project Fund" means the fund by that name created and established in Section 501 of this Indenture. "Rebate Fund" means the fund by that name created and established in the Indenture. "Record Date" means the close of business on the fifteenth day of the calendar month next preceding each Interest Payment Date on the Bonds or, if such day shall not be a business day, the immediately preceding business day. "Redemption Fund" means the fund by that name established in the Indenture. "Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized Representative and including, without limitation, the specific information required by the Indenture. "Revenue Fund" means the fund by that name established in the Indenture. "S&P" means Standard & Poor's Financial Services, LLC. "Securities Depository" means The Depository Trust Company, a limited -purpose trust company organized under the laws of the State of New York, or its nominee, and its successors and assigns, or any other depository institution appointed by the City to act as depository for the Bonds in connection with the Book -Entry System. "Series 2017 Bonds" means the City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017, dated as of their date of delivery, issued under and secured by the Indenture in the aggregate principal amount of $25,690,000*. "Special Tax Collections" means the pro rata portion of the one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 which is allocable to the Library Tax. Preliminary; subject to change. 18 "State" means the State of Arkansas. "Supplemental Indenture" means any indenture supplemental to or amendatory of the Indenture. "Tax Receipts" means receipts derived by the City from the levy of the Library Tax or the Special Tax Collections. "Tax Regulatory Agreement" means with respect to any series of Bonds, that Tax Regulatory Agreement of the City relating to maintenance of the excludability of interest on such Bonds from gross income for federal income tax purposes, delivered in connection with the issuance of such series of Bonds. "Trustee" and "Paying Agent" means the trustee and paying agent for the time being, whether original or successor, with the same institution to always occupy both positions, and with the original Trustee and Paying Agent being Simmons Bank, Pine 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 City Clerk, for a full statement thereof. Funds. The Tax Receipts are pledged by the Indenture to the payment of the principal of and interest on the Bonds. The following Funds are established by the Indenture with the Trustee in connection with the Bonds: Revenue Fund Bond Fund Redemption Fund Project Fund Cost of Issuance Fund Rebate Fund Application of Tax Receipts. The application of Tax Receipts is as follows: (a) Revenue Fund. All Tax Receipts shall, as and when received, be deposited into the Revenue Fund. Moneys at any time on deposit in the Revenue Fund are to be applied, as needed, on a monthly basis to provide for the payment of Debt Service on the Bonds, to the payment of any arbitrage rebate due under Section 148(f) of the Code, and to the payment of fees and expenses of the Trustee and any Paying Agent, at the times and in the amounts set forth as follows: (b) Bond Fund. On or before the fifteenth day of each month, commencing August 15, 2017, 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 (ii) into the Bond Fund, an amount equal to 1/12 of the principal on the Bonds (including mandatory sinking fund redemptions) due on the next Principal Payment Date (except for the period from August 15, 2017 through December 15, 2017, such deposits shall be equal to 1/6 of the principal due on the Series 2017 Bonds on January 1, 2018). Moneys in the Bond Fund shall be used solely for the purpose of paying Annual Debt Service on the Bonds, as provided in the Indenture. The Trustee shall withdraw from the Bond Fund, on the date of any principal or interest payment, an amount equal to such payment for the sole purpose of paying the same. If Tax Receipts in the Revenue Fund are insufficient to make the required monthly payment into the Bond Fund, the amount of any such deficiency in the payment made shall be added to the amount otherwise required to be paid into the Bond Fund in the next succeeding month. When the moneys held in the Bond Fund and the Redemption Fund shall be and remain sufficient to pay in full the principal of and interest on all Bonds then Outstanding in accordance with the Indenture, together with the required fees and expenses to be paid or reimbursed to the Trustee and Paying Agent, the City shall have no further obligation to make payments into such Funds. 19 (c) Redemption Fund. There shall be deposited to the credit of the Redemption Fund all moneys necessary to effect an optional redemption of the Bonds and all remaining moneys transferred from the Project Fund upon completion of a Project. In addition, on each December 15, moneys remaining in the Revenue Fund following the required transfers to the Bond Fund described above and following the payment of Trustee and Paying Agent fees and expenses and any Rebate Amount then due, in excess of Debt Service due on the Bonds on the next July 1, shall be transferred to the Redemption Funds and shall be utilized to redeem Bonds prior to maturity on the following January 1. Moneys in the Redemption Fund shall be transferred to the Bond Fund at such times as may be necessary to effectuate redemptions of the Bonds on the first available redemption date. See the caption "THE SERIES 2017 BONDS —Redemption" herein. (d) Cost of Issuance Fund. A portion of the proceeds of the Series 2017 Bonds shall be deposited to the credit of the Cost of Issuance Fund. The Trustee shall pay those Costs of Issuance as directed by the City pursuant to a Certificate delivered on a Closing Date. After all Costs of Issuance have been paid with respect to a series of Bonds, any remaining moneys in the Cost of Issuance Fund shall be transferred to the Bond Fund. (e) Project Fund. A portion of the proceeds of the Series 2017 Bonds shall be deposited to the Project Fund. Amounts in the Project Fund shall be expended and applied for the payment of Project Costs attributable to the Project. Disbursements shall be made from the Project Fund on the basis of Requisitions in the fonn specified in the Indenture. Within ninety (90) days following completion of a Project or portion thereof being financed by the Bonds, the City shall deliver to the Trustee its Certificate stating that such project or applicable portion thereof is complete, and the Trustee shall transfer the remaining moneys in the Project Fund (save and except moneys needed to satisfy unpaid Project Costs) to the Redemption Fund for application to the retirement of Bonds by redemption or purchase as provided in the Indenture. M 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 Rebate 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 tune deposited in the Rebate Fund shall be held by the Trustee in trust, and neither the City nor the Owner of any Bond shall have any rights in or claim to such money. Any amounts remaining in the Rebate Fund after payment in full of the rebate amount owing to the United States, within sixty (60) days after the date on which the last Bond is redeemed, shall be transferred to the Revenue Fund. Investment of Funds. At the direction of the City or absent such direction, the Trustee shall invest moneys in Funds held by the Trustee in Investment Obligations with maturity or redemption dates consistent with the times at which said moneys will be required for the purposes provided in the Indenture. Moneys in separate Funds may be commingled for the purpose of investment. Investment 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. Investments in any Fund shall be evaluated monthly by the Trustee. For the purpose of determining the amount in any Fund, the City and the Trustee shall value all Investment Obligations credited to such Fund at fair market value. The Trustee shall determine the fair market value based on accepted industry standards and from accepted industry providers. The fair market value of certificates of deposit and bankers' acceptances shall be equal to the face amount thereof plus accrued interest thereon. The fair market value of any Investment Obligation that cannot be determined in the manner provided above shall be established pursuant to the prior agreement of the City and the Trustee. The Trustee shall sell or present for redemption any Investment Obligations as necessary in order to provide money for the purpose of making any payment required under the Indenture, and the Trustee shall not be liable for any loss resulting from any such sale. Responsibility of Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of moneys made by it at the direction of the City. Instruments of Further Assurance. At the request of the Trustee, the City shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, ordinances, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, pledging, assigning and confirming of all and singular the Tax Receipts and all other moneys pledged or assigned by the Indenture, or intended so to be, or which the City may become bound to pledge or assign. M 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 affect the exclusion of interest on any Bond from gross income for federal income tax purposes. No part of the proceeds of the Bonds shall at any time be used, directly or indirectly, to acquire securities or obligations the acquisition of which would cause any of such Bonds to be an "arbitrage bond" as defined in Sections 148(a) and (b) of the Code. The City agrees that so long as any of the Bonds remain Outstanding, it will comply with the provisions of each applicable Tax Regulatory Agreement. Defeasance. Any Bond shall be deemed to be paid within the meaning of the Indenture when payment of the principal of and premium, if any, and interest on such Bond (whether at maturity or upon redemption as provided in the Indenture, or otherwise), either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for by irrevocably depositing with the Trustee, in trust and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such payment or (2) Government Securities (provided that such deposit will not affect the tax-exempt status of the interest on any of the Bonds or cause any of the Bonds to be classified as "arbitrage bonds" within the meaning of Section 148(a) of the Code, as reflected in an opinion of Bond Counsel delivered to the Trustee), maturing as to principal and interest in such amounts and at such times as will provide sufficient moneys to make such payment, and all necessary and proper fees, compensation and expenses of the Trustee and any Paying Agent pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of the Trustee and any said Paying Agent. Events of Default. Each of the following events shall constitute and is referred to in the Indenture as an "Event of Default": (a) Default in the due and punctual payment of any interest on any Bond; (b) Default in the due and punctual payment of the principal of or premium, if any, on any Bond, whether at the stated maturity thereof, or upon proceedings for redemption thereof, or upon the maturity thereof by declaration; (c) Default in the payment of any other amount required to be paid under the Indenture or the performance or observance of any other of the covenants, agreements or conditions contained in the Indenture, or in the Bonds issued under the Indenture, and continuance thereof for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied, shall have been given to the City by the Trustee, which may give such notice in its discretion and shall give such notice at the written request of Holders of not less than fifty-one percent (51%) in aggregate principal amount of the Bonds then Outstanding, unless the Trustee, or the Trustee and Holders of an aggregate principal amount of Bonds not less than the aggregate principal amount of Bonds the Holders of which requested such notice, as the case may be, shall agree in writing to an extension of such period prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the Trustee will not unreasonably withhold its consent to an extension of such thne 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 terin "default" as used in clauses (a), (b) and (c) above shall mean default by the City in the perfonnance 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 shall, upon the written request of the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding, 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. 21 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: (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; 22 (e) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time amended; (f) to authorize the issuance and sale of one or more series of Additional Bonds; (g) to make such additions, deletions or modifications as may be necessary to assure compliance with Section 148(f) of the Code relating to required rebate to the United States or otherwise as may be necessary to assure exemption from federal income taxation of interest on the Bonds; or (h) to modify, alter, amend or supplement the Indenture in any other respect which is not materially adverse to the Bondholders and which does not involve a change described in clause (a), (b), (c), (d), (e) or (f) below and which, in the judgment of the Trustee, is not to the prejudice of the Trustee. Supplemental Indentures Requiring Consent of Bondholders. Subject to the terms and provisions contained above and in this paragraph, and not otherwise, the Holders of not less than 2/3 in aggregate principal amount of the Bonds then Outstanding shall be required, from time to time, anything contained in the Indenture to the contrary notwithstanding, to consent to and approve the execution by the City and the Trustee of such indenture or indentures supplemental to the Indenture as shall be deemed necessary and desirable by the City for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in the Indenture or in any Supplemental Indenture; provided, however, that nothing contained in the Indenture shall permit or be construed as permitting (a) an extension of the maturity (or mandatory redemption date) of the principal of or the interest on any Bond issued thereunder, or (b) a reduction in the principal amount of or redemption premium or rate of interest on any Bond issued thereunder, or (c) the creation of any lien on the Trust Estate or any part thereof, except as expressly permitted in the Indenture, or (d) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture, or (f) depriving the Holder of any Bond then Outstanding of the lien created on the Trust Estate. If, at any time the City shall request the Trustee to enter into any Supplemental Indenture for any of the purposes described above, the Trustee shall, at the expense of the City, cause notice of the proposed execution of such Supplemental Indenture to be mailed by first class mail to each registered owner of the Bonds. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the principal office of the Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such Supplemental Indenture when consented to and approved as provided above. If Holders of not less than 2/3 in aggregate principal amount of the Bonds Outstanding at the time of the execution of any such Supplemental Indenture shall have consented to and approved the execution thereof, no Holder of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from executing the same or from taking any action pursuant to the provisions thereof. SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT The City has entered into an undertaking in the form of the Continuing Disclosure Agreement for the benefit of the Beneficial Owners of the Series 2017 Bonds to cause certain financial information to be sent to certain information repositories annually and to cause notice to be sent to such information repositories of certain specified events, pursuant to the requirements of Section (b)(5)(i) of Rule 15c2-12 of the Securities Exchange Act of 1934, as amended (the "Rule"). The City is a party to multiple continuing disclosure agreements for various bond issues of the City secured by different repayment sources. During the past five years, the City has identified certain instances in which filings were not made as required by such agreements. A listing of such instances, which may not be inclusive, is set forth below. With respect to the City's continuing disclosure obligations relating to certain series of bonds secured by sales and use tax receipts, one notice of mandatory redemption from excess sales tax receipts was not posted on the Municipal Securities Rulemaking Board's Electronic Municipal Markets Access (EMMA) system. With respect to the City's continuing disclosure obligations relating to a series of bonds secured by receipts of a special hotel, motel and restaurant gross receipts tax (which bonds have now been refunded), the City's audited financial statements and supplemental financial data for fiscal year 2011 were not posted on a timely basis (posted 7/30/14). 23 With respect to the City's continuing disclosure obligations for certain bonds secured by water and sewer revenues, audited financial statements and supplemental operating and financial data for fiscal years 2011 and 2012 were not posted on a timely basis for all relevant bond CUSIP numbers. Said audited financial statements and supplemental operating and financial data were timely posted for one issue of the City's water and sewer revenue bonds. A ratings upgrade with respect to one series of water and sewer revenue bonds (no longer outstanding) was not posted. Supplemental financial data for fiscal years 2011 was timely filed but incomplete (remedied 6/27/13) for an issue of the City's tax increment finance bonds. With respect to all of the aforementioned bond issues and an issue of certain bonds secured by the City's parking revenues, the City's audited financial statements and the required supplemental operating and financial data for fiscal year 2015 were not posted on a timely basis. Unaudited financial statements and supplemental operating and financial data for such fiscal year were timely provided to the various bond trustees but were not posted to the ENEMA system until 6/30/16 (two days late). As required by the Rule, upon their availability, the audited financial statements were subsequently posted on 9/30/16. Labeling inaccuracies exist with respect to several of the City's EMMA filings. The City makes no representation as to the materiality of the continuing disclosure delinquencies and omissions described above. The City has undertaken steps to ensure future compliance with its continuing disclosure obligations. The Continuing Disclosure Agreement contains the following covenants and provisions: (a) The City covenants that it will disseminate, or will cause the Dissemination Agent to disseminate, the Annual Financial Information and the Audited Financial Statements (in the form and by the dates set forth in Exhibit I to the Continuing Disclosure Agreement) by delivering such Annual Financial Information to the MSRB within 180 days of the completion of the City's fiscal year. Audited Financial Statements, if available, shall be filed with the MSRB at the same time as the Annual Financial Information. If not then available, unaudited financial statements shall be included with the MSRB filing, and Audited Financial Statements shall be provided to the MSRB within ten (10) business days after availability thereof. The City is required to deliver or cause delivery of such information in Prescribed Form and by such time so that such entity receives the information by the dates specified. (b) If any part of the Annual Financial Information can no longer be generated because the operations to which it is related have been materially changed or discontinued, the City will disseminate or cause dissemination of a statement to such effect as part of its Annual Financial Information for the year in which such event first occurs. (c) If any amendment is made to the Continuing Disclosure Agreement, the Annual Financial Information for the year in which such amendment is made (or in any notice or supplement provided to the MSRB) shall contain a narrative description of the reasons for such amendment and its impact on the type of information being provided. (d) The City covenants to disseminate or cause dissemination in a timely manner, not in excess of ten (10) business days after the occurrence of the event, of Listed Events Disclosure to the MSRB in Prescribed Form. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Series 2017 Bonds or defeasance of any Series 2017 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 2017 Bonds pursuant to the Indenture. The City is required to deliver or cause delivery of such Listed 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 2017 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 2017 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 24 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 perfonnance. (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 2017 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 2017 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 2017 Bonds holding a majority of the aggregate principal amount of the Series 2017 Bonds (excluding Series 2017 Bonds held by or on behalf of the City or its affiliates) pursuant to the terms of the Indenture at the time of the amendment; or (iv) the amendment or waiver is otherwise permitted by the Rule. (i) The following terms used under this caption shall have the meanings set forth below: "Annual Financial Information" means the Tax Receipts for the latest fiscal year and for the four previous fiscal years, if available. "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 comprehensive annual financial report 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 2017 Bonds (including persons holding Series 2017 Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2017 Bonds for federal income tax purposes. "Commission" means the U.S. Securities and Exchange Commission. "Dissemination Agent" shall mean Simmons Bank, Pine Bluff, Arkansas, acting in its capacity as a dissemination agent under the Continuing Disclosure Agreement, or any successor dissemination agent designated in writing by the City and which has filed with the Trustee a written acceptance of such designation. 7 "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. "Listed Event" means the occurrence of any of the following events with respect to the Series 2017 Bonds: (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; 25 (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; and (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material. "Listed Events Disclosure" means dissemination of a notice of a Listed 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 2017 Bonds. "Prescribed Form" means, with regard to the filing of Annual Financial Information, Audited Financial Statements and notices of Material Events with the MSRB at www.emma.msrb.org (or such other address or addresses as the MSRB may from time to time specify), such electronic format, accompanied by such identifying information, as shall have been prescribed by the MSRB and which shall be in effect on the date of filing of such information. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission ("SEC") under the Exchange Act, as the same may be amended from time to time. "State" means the State of Arkansas. "Undertaking" means the obligation of the City pursuant to subsections (a) and (d) above. SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES The following is a summary of the principal provisions of the Arkansas Constitution and statutes relating to the assessment and collection of real and personal property taxes in the State of Arkansas. Taxable Property. In general, the Arkansas Constitution subjects all real estate property situated in the State to ad valorem taxation except the following: (1) public property used exclusively for public purposes; (2) churches used as such; (3) cemeteries used exclusively as such; (4) school buildings and apparatus; (5) libraries and grounds used exclusively for school purposes; (6) buildings, grounds and materials used exclusively for public charity; and (7) items of household furniture and furnishings, clothing, appliances and other personal property used within the home, if not held for sale, rental or other commercial or professional use. The Arkansas General Assembly may exempt one or more classes of intangible personal property from taxation, tax intangible property at a lower rate, or provide for taxation of intangible personal property on a basis other than ad valorem. Under statutes presently in force, intangible personal property is not subject to ad valorem taxation. Amendment 89 also authorizes the General Assembly to exempt from taxation the first $20,000 of value of a homestead of a taxpayer 65 years of age or older. The Arkansas Constitution provides exemptions from ad valorem taxation, with limitations, for textile mills and new manufacturing establishments. Tangible personal property in transit through the State is not subject to ad valorem taxation. This exemption has been interpreted to include raw materials shipped to Arkansas for inclusion in tangible personal property manufactured, processed or refined in Arkansas for shipment outside the State. 26 Assessment. Each Arkansas county has a county assessor, elected for a two-year term of office. Every year between the first Monday in January and July 1, the assessor is required to assess the value of all real and personal property located in the county and has the authority to list, value and assess all tangible personal property subject to ad valorem taxation located in the county. Under certain circumstances, a professional appraiser or appraisers may be employed for the purpose of assessing all or any portion of the property located in the county. It is the duty of the assessor to determine and to keep current a correct and pertinent description of each tract of real property in the county and to place a value on each such tract, including any improvements thereon. The assessor must then file with the county clerk, by July 31, an assessment report of all tangible personal property within the county and, by the third Monday of August, of all real property within the county. The assessor must also, by the third Monday of August of each year, report to the Arkansas Public Service Commission (the "PSC") the total assessment of real and tangible personal property in the county and the kind, character, number and value of property assessed for taxation in the county. The owner of every vehicle subject to registration in the State must assess the vehicle with the county tax assessor. County tax assessors and collectors are required to forward information identifying vehicles which have been assessed within the time frame required by law and vehicles for which the owners have paid personal property taxes within the tune frame required by law to the Arkansas Department of Finance and Administration. Any property owner may appeal an assessment made by the assessor to the county equalization board, which has the authority to increase or decrease such assessment. From a decision by the board, a property owner or the assessor may appeal to the county court. Upon complaint made to the Assessment Coordination Division (the "ACD") of the PSC by the county judge, county assessor or county equalization board, or upon the ACD's own investigation and motion, and a summary hearing, the ACD may, in its discretion, order a reassessment of all or any part of the taxable property in any county, to be made by the county assessor or by a person or persons to be recommended by the county judge and appointed by the ACD. Property owned by public utilities and common carriers and "used and/or held for use in the operation of the company ..." is assessed for tax purposes by the Tax Division of the PSC. Arkansas Code Annotated § 26-26- 1605 provides that the Tax Division "shall assess the property at its true and full market or actual value" and that all utility property of a company, whether located within or without the State of Arkansas, is to be valued as a unit. Annually, the company is required to file a report with the Tax Division. The Tax Division reviews these reports, along with other reports (such as reports to shareholders, the Federal Communications Commission, the Federal Energy Regulatory Commission and the Interstate Commerce Commission), to determine the value of the property. Valuation is currently made on the basis of a formula, as set forth in Arkansas Code Annotated § 26-26-1607, with consideration given to (i) original cost less depreciation, replacement cost less depreciation or reconstruction cost less depreciation; (ii) market value of capital stock and funded debt; and (iii) capitalization of income. As provided in Arkansas Code Annotated § 26-26-1611, once the value of a company's property as a unit is determined, the Tax Division removes the value allocable to out-of-state property and assigns the remainder among Arkansas taxing units on the basis of value within each jurisdiction. The Tax Division certifies the assessment to the county assessor who enters the assessment as certified on the county assessment roll. County officials have no authority to change such assessment. Reassessment. All other property is assessed by the elected assessor of each Arkansas county (or other official or officials designated by law). This includes both real and tangible personal property. Amendment 79 to the Arkansas Constitution requires each county to appraise all market value real estate normally assessed by the county assessor at its full and fair value at a minimum of once every five (5) years. Amendment 79 requires the county assessor (or other official or officials designated by law), after each county -wide reappraisal, to compare the assessed value of each parcel of real property reappraised or reassessed to the prior year's assessed value. If the assessed value of the parcel increased, then the assessed value of that parcel must be adjusted as provided below. (a) Subject to subsection (c) below, if the parcel is not the homestead and principal place of residence ("homestead") of a taxpayer, then any increase in the assessed value in the first year after reappraisal cannot be greater than 10% (or 5% if the parcel is the taxpayer's homestead) of the assessed value for the previous year. For each year thereafter, the assessed value shall increase by an additional 10% (or 5% if the parcel is the taxpayer's homestead) of the assessed value for the year preceding the first assessment resulting from reappraisal; however, the increase cannot exceed the assessed value determined by the reappraisal prior to adjustment under Amendment No. 79. For property owned by public utilities 27 and common carriers, any annual increase in the assessed value cannot exceed more than 10% of the assessed value for the previous year. The provisions of this subsection (a) do not apply to newly discovered real property, new construction or substantial improvements to real property. (b) If a homestead is purchased or constructed on or after January 1, 2001 by a disabled person or by a person over age 65, then that parcel will be assessed based on the lower of the assessed value as of the date of purchase (or construction) or a later assessed value. If a person is disabled or is at least 65 years of age and owns a homestead on January 1, 2001, then the homestead will be assessed based on the lower of the assessed value on January 1, 2001 or a later assessed value. When a person becomes disabled or reaches age 65 on or after January 1, 2001, that person's homestead should thereafter be assessed based on the lower of the assessed value on the person's 65th birthday, on the date the person becomes disabled or a later assessed value. This subsection (b) does not apply to substantial improvements to real property. For real property subject to subsection (c) below, the applicable date in this subsection (b), in lieu of January 1, 2001, is January 1 of the year following the completion of the adjustments to assessed value required in subsection (c). (c) If, however, there has been no county -wide reappraisal and resulting assessed value of property between January 1, 1986 and December 1, 2000, then real property in that county is adjusted differently. In that case, the assessor (or other official or officials designated by law) compares the assessed value of each parcel to the assessed value of the parcel for the previous year. If the assessed value of the parcel increases, then the assessed value of the parcel for the year in which the parcel is reappraised or reassessed is adjusted by adding one-third (1/3) of the increase to the assessed value for the year prior to appraisal or reassessment. An additional one-third (1/3) of the increase is added in each of the next two (2) years. The adjustment contemplated by this subsection (c) does not apply to the property of public utilities or common carriers. No adjustment will be made for newly discovered real property, new construction or substantial improvements to real property. Washington County completed its most recent reassessment in 2015. Based on current growth rates, Washington County is required to conduct a county -wide reappraisal at least once every five years. Valuation. Residential property used solely as the principal place of residence by the owner is assessed according to its value as a residence; agricultural land, pasture land and timber land is assessed according to the productivity of its soil; and residential and commercial land that is vacant is assessed according to the value of its typical use. All other taxable property is assessed according to its current market value, and the Arkansas General Assembly may establish the methods and procedures for valuation of such property, as long as they are equal and uniform throughout the State. Assessed value is an amount equal to 20 percent of market value, and the levied millage is applied against the assessed value to determine the tax owed. Millage Rollback. Amendment 59 to the Arkansas Constitution, as implemented by Act 848 of 1981, as amended (the "Amendment 59 Implementation Act"), directed the Arkansas General Assembly to limit the effects of any comprehensive county -wide reassessment by providing for adjustment or rollback of millage rates in certain circumstances. The Amendment 59 Implementation Act provides that the computation of millage rollbacks is to be made separately for each tax source or millage levy (in the case of school districts this requires separate computations for operation and maintenance millage and debt service millage), with the new tax rate for each millage levy to be rounded up to the nearest 1/10 mill. In the case of debt service millage, the tax rate as so adjusted will continue as the continuing annual tax rate until retirement of the bonds to which the tax is pledged. The adjusted rate for operation and maintenance millage is subject to change at each annual school election in accordance with law. The term "base year" means the year in which a county -wide reassessment is completed and adjusted millage rates first extended for collection in the following year. When a county -wide reappraisal of property for ad valorem tax purposes is conducted over a period of two or more years, the taxes are not assessed on the basis of the reappraised value of the property until all tax property in the county has been reappraised, and the adjustment or rollback of millage is applicable in the year of completion. Rollback procedures differ for (a) real property, (b) personal property, and (c) all property of public utilities and regulated carriers. Real Property. If county -wide reassessment results in an increase in value of taxable property in any taxing unit (county, municipality, school district or community college district) in the base year of ten percent (10%) or 28 more over the previous year, then a millage rollback occurs. The millage rollback is designed to assure that taxpayers, as a group, in each taxing unit will pay taxes no greater than ten percent (10%) above the taxes paid during the previous year to such taxing unit. Millage rates applicable to real property are rolled back only one time following any comprehensive, county -wide reassessment. Personal Property. A separate millage rate is applied to reassessed personal property in order to produce revenues equal to the revenues received from personal property taxes in the base year. As the assessed value of taxable personal property increases, the separate personal property millage rate is reduced annually in order to maintain revenues equal to those for the base year. The tax rate for personal property will increase (at least to the level in effect before the rollback), however, in the event the personal property assessment declines so that a tax rate increase would be necessary to produce revenues equivalent to the base year revenues from personal property. When the revenues from personal property taxes computed on the basis of the current (real property) millage rates equal or exceed revenues from personal property taxes for the base year, the current millage rates applicable to real property will also apply to taxable personal property. The Arkansas Supreme Court has held that a voted increase in the tax rate is not applicable to personal property prior to equalization. Property of Public Utility and Regulated Carriers. During the first five years in which taxes are levied on taxable real and personal property or public utilities and regulated carriers as reassessed, the taxes paid equal the greater of (a) the amount of taxes paid on such property in the base year (less adjustments for property disposed of or reductions in the assessed valuation of such property) and (b) the amount of taxes due on such property at millage rates levied in the current year. If in any of the sixth through tenth years after the base year the base year taxes of a public utility or regulated carrier exceed the current year taxes, then the amount of the taxes are decreased in each year by twenty percent (20%) of the difference until, in the tenth year and thereafter, the taxpayer pays taxes calculated with current millage rates only. If in any of the first ten years after the base year the current year taxes equal or exceed the base year taxes, the public utility or regulated carrier thereafter pays the current year taxes. In implementation of Amendment 59, the Amendment 59 Implementation Act provides that if the provisions in the Amendment and the Act relating to the taxing of public utilities and regulated carriers, or any class thereof, are held to be contrary to the Constitution or statutes of the United. States or of the State of Arkansas, all utilities and all classes of carriers shall receive the same treatment provided or required under the court order for a particular type of carrier or utility "if deemed necessary to promote equity between similar utilities or class of carriers." Certain regulated carriers (railroads) have successfully challenged Amendment 59, as applied to them, as contrary to federal statutes. The effect of this challenge by the railroads on utilities and on other classes of carriers cannot be predicted at this time. Bond Protection. As directed by Amendment 59, the Amendment 59 Implementation Act provides that any millage rates rolled back or adjusted pursuant to the Amendment 59 Implementation Act shall be rolled back or adjusted only to a level which will produce at least a level of income sufficient to meet the current requirements of all principal, interest, paying agent fees, reserves and other requirements of the bond indenture. Amendment 78. Amendment 78 to the Arkansas Constitution, approved at the 2000 General Election and effective January 1, 2001, authorized cities and counties to form redevelopment districts for the purpose of financing redevelopment projects. The ad valorem taxes levied by any taxing unit (including municipalities) on property in a redevelopment district may be divided so that all or part of the ad valorem taxes levied against any increase in the assessed value of property in the area after approval of the redevelopment plan for the district shall be used to pay any indebtedness incurred for the redevelopment project. Debt service millage approved by voters prior to January 1, 2001, is excluded from this provision. The creation of redevelopment districts which encompass property in the City may have an adverse effect on the amount of future increases in property taxes collected by the City. Amendment 79. Amendment 79 to the Arkansas Constitution, approved at the 2000 General Election and effective January 1, 2001, generally limits increases in the assessed value of taxable real property and requires that such increases be effected over time. The extent of the limitation depends upon whether the property is a taxpayer's homestead used as the taxpayer's principal place of residence. General Adjustments. With respect to the first assessment following a county -wide reappraisal, Amendment 79 limits any increase in the assessed value of the non -homestead real property to ten percent (10%) of the previous year's assessed value. For each year thereafter, the assessed value of such property will be increased by an additional ten percent (10%) of the assessed value for the year preceding the first assessment following reappraisal, but shall not exceed the assessed value determined by reappraisal. If the property is a taxpayer's 29 homestead, any increase in the assessed value following reappraisal is limited to five percent (5%) of the previous year's assessed value. For each year thereafter, the assessed value of such property will increase by an additional five percent (5%) of the assessed value for the year prior to the first assessment following reappraisal (not to exceed the value determined by reappraisal). The adjustment described above will not apply to newly discovered real property, new construction or substantial improvements to real property. Property of Public Utilities and Regulated Carriers. Under Amendment 79, any annual increase in the value of utility and carrier real property is limited to ten percent (10%) of the assessed value for the previous year. Special Provisions for Those 65 or Over and Disabled Persons. Amendment 79 allows persons who reach 65 years of age or who become disabled on or after January 1, 2001 to pay ad valorem taxes based on lower assessed values of homestead property (but not substantial improvements to such property) after reaching 65 or after becoming disabled. Homestead Exemption. Amendment 79 provides for an annual state credit against ad valorem property tax on a homestead in an amount not less than $350 (but not below zero). The General Assembly implemented this 11V1111�J LVau "J 111F"vl1 YY llh 111V pusJag,, Vl Alib 1544 Vf- 1, vv... li prov.- that, iflliV 1Ve VY�lth the aJJI+JJlllellt year 2000 and thereafter, the amount of real property taxes assessed on the homestead of each property owner is reduced by up to $350. Property owners have until October 31 in each year to certify that their property is subject to this homestead exemption, notwithstanding that taxes are due and payable by October 15. Property Tax Relief Trust Fund. Following the passage of Amendment 79, the Arkansas General Assembly increased the state sales and use tax from 4.625% to 5.125%. The proceeds of this one half of one percent (0.5%) increase are paid into the State's Property Tax Relief Trust Fund ("PTRTF"). Act 1544 of 2001, implementing the homestead exemption, also provided for annual distributions to each county treasurer from the PTRTF in accordance with the county's proportionate share of the total statewide property tax reduction for that calendar year resulting from the $350 homestead exemption. County treasurers, in turn, are required to distribute these payments to the taxing entities in the county in proportion to each taxing entity's millage rate. In addition to the proportionate distribution described in the preceding paragraph, for each of the State's fiscal years 2013 and 2014, an additional $2 million was appropriated to be payable from the PTRTF to cities, provided such amounts were remaining in the PTRF after the proportional distributions made pursuant to Act 1544 of 2001. Accordingly, the City is not able to predict the amount, if any, it will receive in any year from the PTRTF. According to the State Treasurer's Office, the amounts paid out of PTRTF in 2008 through 2016, are as follows: Assessor's Municipal County Fiscal Regular Property Property Property Tax Property Tax Fayetteville Year Tax Relief Tax Relief Relief Relief Total Portion 2008 $ 219,554,981.45 $1,020,491.24 $ 4,000,000.00 $ 4,000,000.00 $ 228,575,472,69 $ 153,489.62 2009 215,266,557.77 1,032,834.60 4,000,000.00 4,000,000.00 224,299,392.37 152,507.91 2010 202,574,865.12 827,839.83 4,000,000.00 4,000,000.00 211,402,704.95 152,507.91 2011 212,905,106,14 659,779.38 4,000,000.00 4,000,000.00 221,564,885.52 152,507.91 2012 218,017,102.97 485,669.36 4,000,000.00 4,000,000.00 226,502,772.33 156,607.00 2013 220,827,337.65 371,937.95 4,000,000.00 4,000,000.00 229,199,275.60 156,590.51 2014 231,595,367.20 335,607.89 2,000,000.00 2,000,000.00 235,930,975.09 78,295.25 2015 238,220,926.36 369,806.86 2,000,000.00 2,000,000.00 242,590,733.22 78,179.99 2016 247,948,710.39 475,159.46 2,000,000.00 2,000,000.00 252,423,869.85 78,036.18 Total $2,006,910,955.05 $5,579,126.57 $30,000,000.00 $30,000,000.00 $2,072,490,081.62 $1,158,722.28 Bond Protection. Amendment 79 requires the Arkansas General Assembly to provide procedures for adjusting ad valorem tax rates in such a way that will not interfere with the payment of bonded indebtedness secured by such taxes or millage. Millage rates for real, personal and public utility and regulated carrier property shall be equal unless adjustment of personal property rates is necessary to pay bonded indebtedness in accordance with an indenture agreement. Other. Amendment 79 directs the Arkansas General Assembly to prescribe the method for reassessing real property and to establish the frequency of reassessment, which should occur at least once every five years. Millage rollback will not be affected except to the extent that the adjustments under Amendment 79 are made prior to rollback. Collection. The sheriff of each county serves as collector of property taxes (except as to certain counties, for which the legislature has separated the offices of the sheriff and tax collector). The City is located in Washington 30 County, which has a separate tax collector. All taxes levied are collected in the calendar year immediately following the year in which levied, except that personal property taxes levied on motor vehicles owned by individuals are collected in the calendar year in which levied. Property taxes are payable at any time from March 1 through October 15 of each year and are payable in installments at the option of the taxpayer. Delinquent Taxes. All taxes unpaid after October 15 of any year are considered to be delinquent, and delinquent taxpayers are subject to a penalty of ten percent (10%) of the taxes due. It is the duty of the tax collector to diligently collect all delinquent personal property taxes, and in the performance of these duties the collector is empowered to distrain and sell at public auction personal property for the purpose of enforcing collection of personal property taxes and to garnish the wages or other money owed to the delinquent taxpayer. If real property taxes remain unpaid for two years following the date the taxes were due, the land is certified to the Commissioner of State Lands for collection or sale. In the absence of any bid in an amount at least equal to the assessed value of the land, the Commissioner may negotiate a sale. Real property may be redeemed by the taxpayer at a price equal to the taxes due, ten percent (10%) interest for each year of delinquency, a ten percent (10%) penalty for each year of delinquency, and costs. The right of redemption must be exercised within 30 days after real property is sold. Remittance of Tax Collections. The county tax collector is required by law to pay over to the county treasurer, by the fifth day of each month, all funds in the collectors hands belonging to the county or to any municipality or school district located in the county. Upon a certificate of the county clerk, which shall be issued on or before the thirtieth day of each month, the county treasurer is required to transfer to the various taxing bodies, ninety percent (90%) of all funds received by the county treasurer from the county collector. Upon final settlement, adjustments are made and the balance is distributed upon order of the county court approving the final settlement. Because of administrative difficulties, it is generally assumed that no substantial portion of annual tax collections is available to the taxing bodies until December of each year. Miscellaneous. If the assessed value of all classes of taxable property located in the City remains at the same level, without increase or decrease, and the total tax rates applicable to all taxable property in the City remain constant, the annual revenues derived from taxable property will be the same in each year. This would be true of annual revenues available for debt service on the Series 2017 Bonds, as well as other annual revenues of the City (subject in the case of such other revenues to adjustments in the tax rate). In recent years, initiatives which would reduce or abolish property taxes collected pursuant to the Arkansas Constitution have been approved for submission to the voters of Arkansas; however, to date, no initiatives have been approved for submission to the voters at the next general election. UNDERWRITING Under a bond purchase agreement entered into by and between the City and Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), the Series 2017 Bonds are being purchased at a purchase price of $ (representing the stated principal amount of the Series 2017 Bonds less an underwriting discount of $ The bond purchase agreement provides that the Underwriter will purchase all of the Series 2017 Bonds if any are purchased. The obligation of the Underwriter to accept delivery of the Series 2017 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 2017 Bonds or any proceedings in connection with the issuance thereof, and the absence of material adverse changes in the financial condition of the City. Mark C. Doramus, Chief Financial Officer of the Underwriter, serves on the Board of Directors of the Trustee. The Underwriter intends to offer the Series 2017 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 2017 Bonds to the public, and may offer the Series 2017 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 2017 Bonds, including certain liabilities under federal securities laws. 31 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 2017 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 Code that must be met subsequent to the issuance of the Series 2017 Bonds. Failure to comply with such requirements could cause interest on the Series 2017 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2017 Bonds. The City has covenanted to comply with such requirements. Notwithstanding Bond Counsel's opinion that interest on the Series 2017 Bonds is not a specific preference item for purposes of the federal alternative minimum tax, such interest will be included in adjusted current earnings of certain corporations, and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of such corporation's adjusted current earnings over their alternative minimum taxable income (determined without regard to such adjustment and prior to reduction for certain net operating losses). Bond Counsel has expressed no opinion regarding other federal tax consequences arising with respect to the Series 2017 Bonds. The accrual or receipt of interest on the Series 2017 Bonds may otherwise affect the federal income tax liability of the owners of the Series 2017 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 2017 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 2017 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 2017 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 2017 Bonds from gross income for federal income tax purposes or any other federal tax consequence of purchasing, holding or selling tax-exempt obligations. State Taxes. Bond Counsel is of the opinion that, under existing law, the interest on the Series 2017 Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. Changes in Federal and State Tax Law. From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the Series 2017 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 2017 Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular lawsuit will be resolved, or whether the Series 2017 Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2017 Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial authorities as of the date of issuance and delivery of the Series 2017 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. 32 RATING S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC ("S&P"), has assigned a rating of "A" (stable outlook) to the Series 2017 Bonds. Such rating reflects only the view of S&P at the time such rating was given, and the City makes no representation as to the appropriateness of such rating. An explanation as to the significance of the above rating may be obtained only from S&P. The City has furnished S&P certain information and materials relating to the Series 2017 Bonds and the City, some of which have not been included in this Official Statement. Generally, rating agencies base their ratings on such information and materials and investigations, studies and assumptions furnished to and obtained and made by the rating agencies. There is no assurance that a particular rating will be maintained for any given period of time or that it may not be lowered, raised or withdrawn entirely by S&P if, in its judgment, circumstances so warrant. Neither the City nor the Underwriters have undertaken any responsibility to oppose any such revision or withdrawal. Any downward change in or withdrawal of a rating may have an adverse effect on the market price and marketability of the Series 2017 Bonds. No application has been made to any Rating Agency other than S&P for a rating on the Series 2017 Bonds. LEGAL MATTERS Legal Opinions. Legal matters incident to the authorization and issuance of the Series 2017 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 2017 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 2017 Bonds or questioning or affecting the legality of the Series 2017 Bonds or the proceedings and authority under which the Series 2017 Bonds are to be issued, or questioning the right of the City to issue the Series 2017 Bonds or to levy the Library Tax or pledge the Tax Receipts. MISCELLANEOUS Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or owners of any of the Series 2017 Bonds. [REMAINDER OF PAGE INTENTIONALLY BLANK] 33 ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT The information contained in this Official Statement has been taken from sources considered to be reliable, but is not guaranteed. To the best of the knowledge of the City, this Official Statement does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated herein, or necessary to make the statements herein, in light of the circumstances under which they were made, not misleading. The execution and delivery of this Official Statement has been duly authorized by the City of Fayetteville, Arkansas. CITY OF FAYETTEVILLE, ARKANSAS Mayor 34 APPENDIX A Form of Bond Counsel Opinion Kutak Rock LLP, Bond Counsel, will render an opinion with respect to the Series 2017 Bonds, dated the date of issuance and delivery thereof, in substantially the following form: July _, 2017 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons Bank, as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $25,690,000* City of Fayetteville, Arkansas Library Improvement Bonds Series 2017 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 $25,690,000* Library Improvement Bonds, Series 2017 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 30 and Arkansas Code Annotated (1998 Repl. & Supp. 2015) §§14- 142-201 et seq. (as from time to time amended, the "Act"), pursuant to Ordinance No. 5903 of the City, duly adopted and approved on September 20, 2016 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City and Simmons Bank, as trustee (the "Trustee"). Reference is hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with respect to the conditions for the issuance of parity indebtedness by the City, the nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance and Ordinance No.5876 of the City, duly adopted and approved on May 17, 2016 (the "Election Ordinance"), and to enter into and perform its obligations under the Indenture, the valid adoption of the Election Ordinance and the Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Election Ordinance, the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. * Preliminary; subject to change. A-1 Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 30 and the Act, the City is empowered to adopt the Election Ordinance and the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and constitutes 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 are valid and binding limited obligations of the City payable from and secured by a valid lien on and pledge of the Trust Estate (as defined in the Indenture), including receipts of the Library Tax and the Special Tax Collections (each as defined in the Indenture), in the manner and to the extent described in the Indenture. The City is duly authorized to pledge such Trust Estate, and no further action on the part of the City or any other parry is required to perfect the same or the interest of the owners of the Bonds therein. 5. The Library Tax has been validly levied in accordance with the Constitution and laws of the State of Arkansas, including Amendment 30 and the Act, and may be validly pledged to secure the Bonds. 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 imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax unposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. The opinions set forth in the preceding sentence assume 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 in order that the interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. The interest on the Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. 8. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended, in connection with the offer and sale of the Bonds. It is to be understood that the rights of the registered owners of the Bonds and the enforceability of the Bonds, the Authorizing Ordinance and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Very truly yours, A-2 APPENDIX B Information Regarding Access to the City of Fayetteville 2015 Comprehensive Annual Financial Report The City's 2015 CAFR can be accessed at: www.fayetteville-ar.gov/ArchiveCenter/ViewFile/Item/1663 HIM OFFICIAL STATEMENT NEW ISSUE BOOK -ENTRY ONLY *RATING: S&P: "A" (stable outlook) In the opinion of Kutak Rock LLP, Bond Counsel, tinder existing laws, regulations, rulings and judicial decisions and assuming the accuracy of certain representation and continuing compliance with certain covenants, interest on the Bonds is excluded frrom gross income for federal intone tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax. Under existing law, Bond Counsel is of the opinion that the Bonds and the interest thereon are exemptfr�om all state, county and municipal taxes in the State of Arkansas. Seethe caption "TAXMA7TERS" herein. $26,500,000 CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BONDS SERIES 2017 Dated: Date of Delivery Due: January 1, as shown on inside cover The Library Improvement Bonds, Series 2017 (the `Bonds"), are being issued by the City of Fayetteville, Arkansas (the "City") pursuant to Amendment 30 to the Constitution of the State of Arkansas and the Local Government Library Bond Act of 1993 for the purpose of (i) paying a portion of the costs of certain capital improvements to the Fayetteville Public Library (the "Project"), and (ii) paying certain expenses in connection with the issuance of the Series 2017 Bonds. See the captions "SOURCES AND USES OF FUNDS" and "THE PROJECT" herein. The Series 2017 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 2017 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2017 Bonds. Individual purchases of the Series 2017 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers ("Beneficial Owners") of Series 2017 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. The Series 2017 Bonds shall bear interest from their dated date, payable on January 1 and July 1 of each year, commencing January 1, 2018. All such interest payments shall be payable to the persons in whose name such Series 2017 Bonds are registered on the bond registration books maintained by the Simmons Bank, Pine Bluff, Arkansas, as trustee and paying agent (the "Trustee" ), as of the fifteenth day of the calendar month next preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2017 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 2017 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 July 1, 2017 (the "Indenture"), between the City and the Trustee, the payment of the principal of, premium, if any, and interest on the Series 2017 Bonds is secured by a pledge of the receipts from (i) a one and two -tenths (1.20) mill city tax on real and personal property within the City, together with all penalties and interest with respect thereto (the "Library Tax! ), and (ii) the City's allocable portion of a one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79"), which is intended to offset decreases in the Library Tax resulting from homestead exemptions implemented pursuant to Amendment 79 (the "Special Tax Collections"). Receipts derived by the City from the Library Tax and the Special Tax Collections are collectively referred to hereinafter as the "Tax Receipts." See the captions "SECURITY FOR THE BONDS" and "PROPERTY TAX RECEIPTS" herein. Assuming satisfaction of certain coverage tests, the City has reserved the right to issue additional bonds to be secured on a panty basis with the Series 2017 Bonds. Seethe caption "THE SERIES 2017 BONDS —Additional Bonds" herein. The Series 2017 Bonds are subject to optional and mandatory redemption prior to maturity as more fully described herein under the caption "THE SERIES 2017 BONDS - Redemption." The Series 2017 Bonds are special limited tax obligations of the City secured by and payable solely from receipts of the Library Tax and the Special Tax Collections. The Series 2017 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 2017 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 2017 Bonds, except as described herein with respect to the Tax Receipts. The Series 2017 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 2017 Bonds will be available for delivery in New York, New York, on or about July 19, 2017. Stephens Inc. The date of this Official Statement is June 13, 2017. * See the caption "RATING" herein. MATURITY SCHEDULE Maturity Principal Interest Janua 1 Amount Rate Yield CUSIP** 2018 $560,000 3.000% 0.900% 31266W AA 2019 530,000 3.000% 1.100% 31266W AB9 2020 545,000 3.000% 1.250% 31266W AC7 2021 565,000 3.000% 1.400% 31266W AD5 2022 580,000 3.000% 1.550% 31266W AE3 2023 600,000 3.000% 1.700% 31266W AFO 2024 615,000 3.000% 1.900% 31266W AG8 2025 635,000 3.000% 2.100% 31266W AH6 2026 655,000 3.000% 2.300% 31266W AJ2 2027 675,000 3.000% 2.450% 31266W AK9 $3,800,000 4.000% Tenn Bond due January 1, 2032 Yield: 3.030%* CUSIP: 31266W AL7 $4,635,000 4.000% Tenn Bond due January 1, 2037 Yield: 3.330%* CUSIP: 31266W AM5 $5,570,000 3.375% Tenn Bond due January 1, 2042 Yield: 3.460% CUSIP: 31266W AN3 $6,535,000 3.050% Term Bond due January 1, 2047 Yield: 3.050% CUSIP: 31266W AP8 * Priced to expected call date of January 1, 2027 ** CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, operated by S&P Capital IQ, a business unit of Standard & Poor's Financial Services LLC. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services Bureau. CUSIP numbers have been assigned by an independent company not affiliated with the City and are included solely for the convenience of the registered owners of the Series 2017 Bonds. The City and the Underwriter are not responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Series 2017 Bonds by the City or by the Underwriter. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Series 2017 Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Series 2017 Bonds. CITY OF FAYETTEVILLE, ARKANSAS Issuer City Council Lioneld Jordan, Mayor Sarah Bunch Adella Gray Mark Kinion John La Tour Alan Long Sarah Marsh Matthew Petty Justin Tennant Don Marr, Chief of Staff Paul Becker, Finance Director Sondra Smith, City Clerk Kit Williams, City Attorney Fayetteville Public Library Board of Trustees Hershey Garner, President Janine Parry, Vice President Maylon Rice, Secretary Bryn Bagwell Suzanne Clark Bret Park Rob Qualls David Johnson, Executive Director SIMMONS BANK Pine Bluff, Arkansas Trustee and Paying Agent KUTAK ROCK LLP Little Rock, Arkansas Bond Counsel STEPHENS INC. Fayetteville, Arkansas Underwriter No dealer, broker, salesman or other person has been authorized by the City or by Stephens Inc. (the "Underwriter") to give any information or to make any representations, other than those contained herein; and, if given or made, such other information or representations must not be relied upon as having been authorized by either of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of any Series 2017 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 2017 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 2017 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 2017 Bonds............................................................................................................................................... 2 Securityfor the Bonds................................................................................................................................................ 5 Book -Entry Only System........................................................................................................................................... 6 TheProject................................................................................................................................................................. 8 Sourcesand Uses of Funds......................................................................................................................................... 8 DebtService Requirements........................................................................................................................................ 9 Estimated Debt Service Coverage.............................................................................................................................. 9 TheCity......................................................................................................................................................................10 The Public Library Board of Trustees........................................................................................................................12 CityDebt Structure.....................................................................................................................................................12 PropertyTax Receipts................................................................................................................................................13 Defmitionsof Certain Terms......................................................................................................................................15 Summaryof the Indenture..........................................................................................................................................19 Summary of the Continuing Disclosure Agreement...................................................................................................23 Summary of Arkansas Ad Valorem Tax Procedures..................................................................................................26 Underwriting..............................................................................................................................................................31 TaxMatters................................................................................................................................................................32 Rating.........................................................................................................................................................................33 LegalMatters..............................................................................................................................................................33 Miscellaneous.............................................................................................................................................................34 Accuracy and Completeness of Official Statement....................................................................................................35 APPENDIX A — Form of Bond Counsel Opinion......................................................................................................A-1 APPENDIX B — Information Regarding Access to City's 2015 Comprehensive Annual Financial Report ..............B-1 OFFICIAL STATEMENT $26,500,000 CITY OF FAYETTEVILLE, ARKANSAS LIBRARY IMPROVEMENT BONDS SERIES 2017 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 of Library Improvement Bonds, Series 2017, in the principal amount of $26,500,000 (the "Series 2017 Bonds"), by the City of Fayetteville, Arkansas (the "City"). The City is a city of the first class organized and existing under the laws of the State of Arkansas (the "State"). The City is authorized under the laws of the State, including particularly Amendment 30 to the Constitution of the State, as amended by Amendment 72 to the Constitution of the State (as amended, "Amendment 30"), and the Local Government Library Bond Act of 1993, Arkansas Code Annotated (1998 Repl. & 2015 Supp.) §§14-142-201 et seq. (as from time to time amended, the "Act"), to issue and sell its bonds for the purpose of financing improvements to the Fayetteville Public Library. The Series 2017 Bonds are to be issued by the City pursuant to Amendment 30, the Act and Ordinance No. 5903, adopted and approved by the City Council on September 20, 2016 (the "Authorizing Ordinance"), for the purpose of (i) paying a portion of the costs of financing the acquisition, construction and equipping of capital improvements to the Fayetteville Public Library (the "Project"), and (ii) paying certain expenses in connection with the issuance of the Series 2017 Bonds. See the captions "SOURCES AND USES OF FUNDS" and "THE PROJECT" herein. The issuance of the Series 2017 Bonds and the levy of the Library Tax (defined below) were approved by a majority of the qualified electors of the City at a special election held August 9, 2016. The Series 2017 Bonds are not general obligations of the City, but are special limited tax obligations payable solely from and secured by a pledge of the receipts from (i) a one and two -tenths (1.20) mill city ad valorem tax levied pursuant to Amendment 30 on real and personal property within the City, together with all penalties and interest with respect thereto (the "Library Tax"), and (ii) the City's allocable portion of a one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79"), which is intended to offset decreases in the Library Tax resulting from homestead exemptions implemented pursuant to Amendment 79 (the "Special Tax Collections"). The City has levied the Library Tax at the rate of one and two -tenths (1.20) mill (.0012) for collection in 2017 and continuously in each year thereafter. The City has covenanted that the Library Tax will be levied and collected annually and that it and the Special Tax Collections will be pledged as security for the Series 2017 Bonds until all of the outstanding Series 2017 Bonds, together with interest thereon and related costs and fees have been paid in full. Receipts derived by the City from the Library Tax and the Special Tax Collections are collectively referred to hereinafter as the "Tax Receipts." See the captions "SECURITY FOR THE BONDS," "PROPERTY TAX RECEIPTS" and "SUMMARY OF THE INDENTURE" herein. The Series 2017 Bonds are special limited tax obligations of the City secured by and payable solely from receipts of the Library Tax and the Special Tax Collections. The Series 2017 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 2017 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 2017 Bonds, except as described herein with respect to the Tax Receipts. Additional Bonds may be issued on a parity of security with the Series 2017 Bonds under certain circumstances set forth in the Indenture (hereinafter defined). The Series 2017 Bonds and any such Additional Bonds are herein collectively referred to as the "Bonds." Seethe caption "THE SERIES 2017 BONDS -Additional Bonds" and "- Superior Obligations Prohibited" herein. The Series 2017 Bonds are subject to optional and mandatory redemption as provided under the caption "THE SERIES 2017 Bonds —Redemption" herein. Pursuant to the provisions of a Continuing Disclosure Agreement dated as of the date of delivery of the Series 2017 Bonds, by and between the City and Simmons Bank, as dissemination agent (the "Continuing Disclosure Agreement"), the City has undertaken certain obligations with respect to providing ongoing disclosure of certain financial and operating data concerning the City and the Tax Receipts and of the occurrence of certain specified 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 2017 Bonds, the Tax Receipts, the Continuing Disclosure Agreement, and the Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City and Simmons Bank, Pine Bluff, Arkansas, as trustee and paying agent (the "Trustee"), pursuant to which the Series 2017 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 2017 Bonds are qualified in their entirety by reference to the definitive form thereof and the information with respect thereto included in the Indenture. Copies of the Continuing Disclosure Agreement, the Indenture, and the form of Series 2017 Bond included therein are available from the City by writing to the attention of the City Clerk, City of Fayetteville, City Administration Building, 113 West Mountain, Fayetteville, Arkansas 72701, and, during the initial offering period only, from the Underwriter, Stephens Inc., 3425 North Futrall, Suite 201, Fayetteville, Arkansas 72703. Tax Receipt data has been provided by the City from the audited records of the City and certain demographic information has been obtained from other sources which are believed to be reliable. THE SERIES 2017 BONDS Description. The Series 2017 Bonds will be initially dated as their date of delivery, and will bear interest payable semiannually on January 1 and July 1 of each year, commencing January 1, 2018, at the rates set forth on the inside cover page hereof. The Series 2017 Bonds will mature on January 1 in the years and in the principal amounts set forth on the inside cover page hereof. The Series 2017 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 2017 Bonds will be made so long as Cede & Co. is the registered owner of the Series 2017 Bonds. Individual purchases of the Series 2017 Bonds will be made only in book -entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers ("Beneficial Owners") of Series 2017 Bonds will not receive physical delivery of bond certificates. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. All interest payments on the Series 2017 Bonds shall be payable to the persons in whose name such Series 2017 Bonds are registered on the bond registration books maintained by the Trustee, as of the fifteenth day of the calendar month next preceding the calendar month in which the applicable interest payment date falls. Principal of and premium, if any, on the Series 2017 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 2017 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 2017 Bonds, disbursement of such payments to DTC Participants is the responsibility of DTC, and the disbursement of such payments to Beneficial Owners is the responsibility of DTC Participants or Indirect Participants, as more fully described herein. Redemption. (1) The Series 2017 Bonds are subject to redemption prior to maturity at the election of the City, on and after January 1, 2027, in whole or in part (in any order of maturities directed by the City, and by lot within a maturity) at any time, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. (2) The Series 2017 Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Interest Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from moneys on deposit in the Project Fund in excess of the amount needed to complete the Project. (3) The Series 2017 Bonds shall be redeemed prior to maturity, in whole or in part (in inverse order of maturities and by lot within a maturity), on any Principal Payment Date, at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption, from surplus Tax Receipts (being amounts over and above the amount necessary to pay (i) current requirements of principal of and interest on the Series 2017 Bonds and Trustee and Paying Agent fees and expenses and (ii) amounts due on the next succeeding Interest Payment Date). (4) The Series 2017 Bonds maturing on January 1, 2032, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on January 1 in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount 2028 $700,000 2029 730,000 2030 760,000 2031 790,000 2032 (maturity) 820,000 (5) The Series 2017 Bonds maturing on January 1, 2037, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may detennine, on January 1 in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount 2033 $855,000 2034 890,000 2035 925,000 2036 965,000 2037 (maturity) 1,000,000 (6) The Series 2017 Bonds maturing on January 1, 2042, are subject to mandatory sinking fund redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on January 1 in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount 2038 $1,040,000 2039 1,075,000 2040 1,115,000 2041 1,150,000 2042 (maturity) 1,190,000 (7) The Series 2017 Bonds maturing on January 1, 2047, are subject to mandatory sinking fiord redemption prior to maturity in part, selected by lot by the Trustee in such manner as it may determine, on January 1 in the years and amounts set forth below at a redemption price equal to 100% of the principal amount being redeemed, plus accrued interest to the date of redemption. Year Principal Amount 2043 $1,230,000 2044 1,265,000 2045 1,305,000 2046 1,345,000 2047 (maturity) 1,390,000 At its option, to be exercised on or before the 451 day next preceding any mandatory sinking fund redemption date for any Series 2017 Bonds maturing January 1, 2032, January 1, 2037, January 1, 2042 and January 1, 2047 (the "Series 2017 Term Bonds"), the City may deliver to the Trustee for cancellation Series 2017 Term Bonds, or portions thereof ($5,000 or any integral multiple thereof), in any aggregate principal amount desired. Each such Series 2017 Term Bond, or portion thereof, so delivered or previously redeemed (otherwise than through mandatory sinking fund redemption) and canceled by the Trustee shall be credited by the Trustee at 100% of the principal amount thereof on the obligation of the City on such mandatory sinking fund redemption date, and any excess over such amount shall be credited on future mandatory sinking fund redemption obligations with respect to the Series 2017 Term Bonds in chronological order, and the principal amount of such Series 2017 Term Bonds so to be redeemed shall be accordingly reduced. Partial Redemption of a Series 2017 Bond. If less than all of the Series 2017 Bonds of a maturity are called for redemption, the particular Series 2017 Bonds or portions of Series 2017 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 2017 Bonds, the procedures established by DTC shall control with respect to the selection of the particular Series 2017 Bonds to be redeemed. Notice of Redemption. Notice of the call for any redemption (other than mandatory sinking fund redemption), identifying the Series 2017 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 2017 Bonds, by any other means acceptable to DTC, including facsimile) to the registered owner of each such Series 2017 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 2017 Bond with respect to which no such failure or defect has occurred. Any notice mailed as provided above shall be conclusively presumed to have been duly given, whether or not the registered owner receives the notice. Additional Bonds. The City may issue from time to time one or more series of Additional Bonds for the purpose of (i) financing Project costs in connection with the acquisition, construction and/or equipping of a Project, (ii) refunding the Series 2017 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 2017 Bonds and any other series of Additional Bonds theretofore issued and then Outstanding, except insofar as any terms or conditions of redemption or purchase established under the Indenture may afford additional benefit or security for the Bonds of any particular series and except for the security afforded by any municipal bond insurance obtained with respect to any particular series of Bonds. Before any Additional Bonds are authenticated, there shall be delivered to the Trustee the items required for the issuance of Bonds by the Indenture, plus a Certificate of the Finance Director of the City certifying that, based upon necessary investigation, the Tax Receipts deposited into the Revenue Fund during the most recent twelve (12) months were not less than 120% of the maximum Annual Debt Service on all then Outstanding Bonds, plus the Additional Bonds then proposed to be issued. Notwithstanding the foregoing, no Additional Bonds shall be issued unless there is no default at the time of issuance under the Indenture and the aggregate principal amount of all Bonds issued shall not exceed $26,500,000. ,Superior Obligations Prohibited. Except to the extent as provided above with respect to the issuance of Additional Bonds, so long as Bonds are Outstanding under the Indenture, the City has covenanted not to create or permit the creation of any indebtedness, or to issue any bonds, notes, warrants, certificates or other obligations or evidences of indebtedness payable in any manner from the Tax Receipts or otherwise from the Trust Estate which (i) will in any way be superior to or rank on a parity with the Bonds, or (ii) will in any way be secured by a lien and charge on the Tax Receipts or on the moneys deposited in or to be deposited in the Revenue Fund, prior to or equal with the lien, pledge and charge created in the Indenture for the security of the Bonds, or (iii) will be payable prior to or equal with the payments to be made from the Tax Receipts or the Revenue Fund into the Bond Fund, or from said Bond Fund for the payment of the Bonds. The City is not prohibited or restricted from issuing bonds payable from Tax Receipts so long as use of the Tax Receipts in favor of said bonds shall be made expressly subject and subordinate to the pledge and use of Tax Receipts to pay principal of and premium, if any, and interest on the Bonds and to make all required deposits into all funds held by the Trustee pursuant to the Indenture. Transfer or Exchange. The Bonds may be transferred on the books of registration kept by the Trustee by the registered owner in person or by the owner's duly authorized attorney, upon surrender thereof, together with a written instrument of transfer duly executed by the registered owner or the owner's duly authorized attorney. Upon surrender for transfer of any Bond at the principal corporate office of the Trustee, the City shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds of the same series and in the same aggregate principal amount and of any authorized denomination or denominations. Transfers of registration or exchanges of Bonds shall be without charge to the Holders of such Bonds, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Holder of the Bond requesting such transfer or exchange as a condition precedent to the exercise of such privilege. 4 The Trustee shall not be required to transfer or exchange any Bond during the period from and including a Record Date to the next succeeding interest payment date of such Bond nor to transfer or exchange any Bond after the mailing of notice calling such Bond for redemption has been made, and prior to such redemption. So long as DTC or its nominee is the sole registered owner of the Series 2017 Bonds, transfers of beneficial interests in the Series 2017 Bonds shall be in accordance with the rules and procedures of DTC and its direct and indirect participants. See the caption "BOOK -ENTRY ONLY SYSTEM" herein. SECURITY FOR THE BONDS Tax Receipts. The Series 2017 Bonds are not general obligations of the City, but are special limited tax obligations payable solely from and secured by a pledge of the receipts from (i) a one and two -tenths (1.20) mill city ad valorem tax levied pursuant to Amendment 30 on real and personal property within the City, together with all penalties and interest with respect thereto (the "Library Tax"), and (ii) the City's allocable portion of a one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 to the Constitution of the State of Arkansas ("Amendment 79"), which is intended to offset decreases in the Library Tax resulting from homestead exemptions implemented pursuant to Amendment 79 (the "Special Tax Collections"). Receipts of the Library Tax and the Special Tax Collections are referred to collectively herein as the "Tax Receipts." The Series 2017 Bonds are not secured by any lien on or security interest in any physical property. The Library Tax will be a continuing annual levy until sufficient collections have been received to retire all of the Series 2017 Bonds, plus Trustee and Paying Agent fees and expenses. Pursuant to the provisions of Amendment 30 and the Act, the levy of the Library Tax and the issuance of the Series 2017 Bonds were approved by the electors of the City at a special election held on August 9, 2016. The electors of the State of Arkansas approved Amendment 79 to the Arkansas Constitution at the November 2000 General Election. Amendment 79, which was effective on January 1, 2001, provides for annual credit against ad valorem taxes imposed on a homestead. As directed by Amendment 79, the Arkansas General Assembly has instituted a statewide sales and use tax at the rate of one-half of one percent (0.5%) for the purpose of assuring that millage levied to pay bonded indebtedness will provide a level of income sufficient to meet current debt service and other expense requirements. The City's share of said sales and use tax receipts relating to the Library Tax is defined herein as the "Special Tax Collections." See the caption "SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES —Amendment 79" herein. Arkansas ad valorem taxes are levied by various taxing authorities, assessed against real and personal property by county assessors, and collected by county collectors and remitted to the respective taxing authorities. See the caption "PROPERTY TAX RECEIPTS — Collection of Taxes" herein. All Tax Receipts will be deposited as received by the City or the Trustee into a special fund held by the Trustee (the "Revenue Fund"). All moneys held for the credit of the Revenue Fund shall be continuously invested in Investment Obligations (as defined in the Indenture). Until retirement of the Series 2017 Bonds, the Tax Receipts cannot be used for any purpose other than the payments of debt service on the Series 2017 Bonds, payment of arbitrage rebate, and the payment of Trustee and Paying Agent fees and expenses. Upon retirement of the Series 2017 Bonds, any surplus Library Tax collections which may have accumulated shall be transferred to the general fund of the City and shall be used for the maintenance and operation of the Fayetteville Public Library. The City will levy the Library Tax at the rate of one and two -tenths (1.20) mill (.0012) for collection in 2017 and continuously in each year thereafter. See the caption "PROPERTY TAX RECEIPTS - Coverage" herein for an estimate of future collections of the Library Tax based on historical collections of existing ad valorem taxes of the City. The Series 2017 Bonds are special limited tax obligations of the City secured by and payable solely from receipts of the Library Tax and the Special Tax Collections. The Series 2017 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 2017 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 2017 Bonds, except as described herein with respect to the Tax Receipts. BOOK -ENTRY ONLY SYSTEM The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Series 2017 Bonds. The Series 2017 Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered security will be issued for each maturity of the Series 2017 Bonds, in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC (or any successor securities depository) or its nominee will be considered by the City and the Trustee to be the owner or holder of the Series 2017 Bonds for all purposes under the Indenture. Owners of any book entry interests in the Series 2017 Bonds described below, will not receive or have the right to receive physical delivery of the Series 2017 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 2017 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 securities 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 3.6 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 between 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, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Series 2017 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2017 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2017 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. Beneficial Owners are, however, 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 2017 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 the Series 2017 Bonds, except in the event that use of the Book -Entry System for the Series 2017 Bonds is discontinued. To facilitate subsequent transfers, all Series 2017 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 2017 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2017 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2017 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 2017 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 any other DTC nominee) will consent or vote with respect to the Series 2017 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the Record Date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2017 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 2017 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 2017 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 2017 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 2017 Bonds made to DTC or its nominee as the registered owner of the Series 2017 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 2017 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. [REMAINDER OF PAGE INTENTIONALLY BLANK] THE PROJECT In response to overwhelming community use of the Library's existing Blair Library facility and the continued growth in population of the City and surrounding region, the Fayetteville Public Library Board of Trustees commissioned a 2030 Master Plan (the "Master Plan") prepared by Meyer Scherer & Rockcastle, LTD, an architecture and interior design firm based in Minneapolis, Minnesota. The Master Plan identified space needs for the Library through 2030 and recommended a LEED-certified expansion (the "Expansion") to the existing Library facility. See the caption "THE PUBLIC LIBRARY BOARD OF TRUSTEES" herein for a description of the existing Library facility. It is anticipated that the Expansion will contain approximately 80,000 square feet and will include a youth services department twice the size of existing space dedicated for such purpose, a multi -purpose auditorium with a 700-800 person seating capacity, new teen service space, digital and robotics maker space, a new genealogy, state and local history research center, and a small business center, as well as additional space for traditional print and media materials. The Expansion will be constructed on owned property immediately adjacent to the existing Library facility and will be connected thereto. The City is currently coordinating with the Fayetteville Public Library Board of Trustees to solicit statements of qualifications from qualified architectural firms to provide design, construction observation and ancillary services necessary to construct the LEED-certified Expansion. It is anticipated that an architectural firm will be selected on or about July 25, 2017, and a contractor engaged in the third quarter of 2017. Current plans call for the commencement of construction of the Expansion in the second quarter of 2018, with completion of the Expansion expected in the second quarter of 2022. The preliminary estimate of the total cost of acquiring, constructing and equipping the Expansion is approximately $50 million. Approximately $26,905,000 of such amount will be paid from Series 2017 Bond proceeds. See the caption "SOURCES AND USES OF FUNDS" herein. The remaining costs of the Expansion are expected to be funded by private donations. A capital campaign for such purpose is scheduled to begin in the Fall of 2017. SOURCES AND USES OF FUNDS The proceeds of the Series 2017 Bonds will be used as follows: Sources of Funds Series 2017 Bond Par Amount $26,500,000 Net Reoffering Premium 768,647 Total Sources: 27.268,647 Uses of Funds Deposit to Project Fund $26,905,000 Costs of Issuance and Underwriter's Discount 359,615 Contingency 4,032 Total Uses: 27,268, 447 [REMAINDER OF PAGE INTENTIONALLY BLANK] DEBT SERVICE REQUIREMENTS As of the date of closing, the Series 2017 Bonds will constitute the only debt obligations secured by the Tax Receipts. The following table sets forth the amounts required to pay scheduled principal of and interest on the Series 2017 Bonds during each Bond Year: Bond Series 2017 Series 2017 Total Debt Year(') Principal(2) Interest Service 2018 $ 560,000 $ 406,577 $ 966,577 2019 530,000 886,705 1,416,705 2020 545,000 870,805 1,415,805 2021 565,000 854,455 1,419,455 2022 580,000 837,505 1,417,505 2023 600,000 820,105 1,420,105 2024 615,000 802,105 1,417,105 2025 635,000 783,655 1,418,655 2026 655,000 764,605 1,419,605 2027 675,000 744,955 1,419,955 2028 700,000 724,705 1,424,705 2029 730,000 696,705 1,426,705 2030 760,000 667,505 1,427,505 2031 790,000 637,105 1,427,105 2032 820,000 605,505 1,425,505 2033 855,000 572,705 1,427,705 2034 890,000 538,505 1,428,505 2035 925,000 502,905 1,427,905 2036 965,000 465,905 1,430,905 2037 1,000,000 427,305 1,427,305 2038 1,040,000 387,305 1,427,305 2039 1,075,000 352,205 1,427,205 2040 1,115,000 315,924 1,430,924 2041 1,150,000 278,293 1,428,293 2042 1,190,000 239,480 1,429,480 2043 1,230,000 199,317 1,429,317 2044 1,265,000 161,803 1,426, 803 2045 1,3 05,000 123,220 1,428,220 2046 1,345,000 83,417 1,428,417 2047 1,390,000 42,395 1,432,395 Totals: 26.500.000 15.793.681 42.293.681 (1) The twelve-month period ending Januaryl. (2) Including mandatory sinking fund redemptions. ESTIMATED DEBT SERVICE COVERAGE The following table shows estimated maximum annual debt service coverage with respect to the Series 2017 Bonds utilizing the debt service due during the Bond Year ended January 1, 2047. Projected Tax Receipts(') $1,748,839 Maximum Annual Debt Service Requirement on the Series 2017 Bonds $1,432,395 Maximum Annual Debt Service Coverage 1.22X (1) See the caption "PROPERTY TAX RECEIPTS" herein. THE COVERAGE NUMBER SET FORTH ABOVE IS BASED ON THE CITY'S 2017 PROPERTY ASSESSMENT OF $1,489,540,392 CERTIFIED BY THE WASHINGTON COUNTY ASSESSOR ON MARCH 24, 2017 AND THE FIVE-YEAR AVERAGE COLLECTION HISTORY OF THE CITY'S EXISTING LIBRARY TAX. ACTUAL COLLECTIONS OF TAX RECEIPTS WILL DEPEND ON NUMEROUS FACTORS, AND THERE CAN BE NO ASSURANCE THAT FUTURE TAX RECEIPTS AVAILABLE TO PAY DEBT SERVICE ON THE SERIES 2017 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 third largest city in the State. The City is located in the Metropolitan Statistical Area of Fayetteville/Springdale/Rogers (the "MSA'), which includes all of Washington and Benton Counties in the northwest corner of the State and is approximately 185 miles northwest of Little Rock, Arkansas, 125 miles east of Tulsa, Oklahoma, and 210 miles south of Kansas City, Missouri. The City is served by U.S. Interstate 49, U.S. Highways 62 and 71, and State Highways 16, 45, 112, 156, 180 and 265. The Burlington Northern Railroad has several lines running through the City, and a general aviation airport with a 6,006-foot runway is available for limited commuter travel. The Northwest Arkansas Regional Airport is located approximately 40 minutes from downtown Fayetteville and provides daily flights to numerous venues. Government. The City currently operates under the Mayor -Council form of government pursuant to which a mayor, city attorney, city clerk and eight aldermen are elected, two from each of the City's four wards. The mayor, city attorney and city clerk are full-time positions elected to four-year terms. Aldermen also serve four-year terms. The City's elected officials and the dates on which their respective terms expire are as follows: Name Office Term Expires Lioneld Jordan Mayor 12/31/20 Kit Williams City Attorney 12/31/18 Sondra Smith City Clerk 12/31/20 Sarah Bunch Alderman 12/31/20 Adella Gray Alderman 12/31/18 Mark Kinion Alderman 12/31/18 John La Tour Alderman 12/31/18 Alan Long Alderman 12/31/20 Sarah Marsh Alderman 12/31/20 Matthew Petty Alderman 12/31/20 Justin Tennant Alderman 12/31/18 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 2003 $25,387 25,434 2004 27,420 26,846 2005 33,655 27,915 2006 35,914 29,479 2007 38,119 31,180 10 2008 $39,934 $32,434 2009 37,100 31,629 2010 37,629 31,991 2011 42,317 33,961 2012 48,371 36,291 2013 47,363 36,529 2014 51,809 37,782 2015 52,509 39,107 Source: Discover Arkansas, USA.gov Building permits issued by the City�l> are shown below for the years indicated: 2012 2013 2014 2015 2016 Residential Building 394 379 467 380 553 Permits Commercial Building 18 24 25 27 35 Permits Value of All Building Permits $251,041,427 $157,970,433 $220,477,214 $187,189,614 $275,432,651 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 2008 3.8% 5.2% 2009 6.1 % 7.4% 2010 6.5% 7.9% 2011 6.2% 8.0% 2012 5.6% 7.4% 2013 4.9% 6.8% 2014 4.0% 5.6% 2015 3.2% 4.3% 2016 2.7% 3.9% Employment and Industry. The principal campus of the University of Arkansas is located in the City and had total enrollment for the spring semester of 2017 of approximately 25,300. On the Fayetteville campus, the University employs approximately 8,900 faculty, administrative, secretarial, clerical and maintenance personnel in both full-time and part-time positions, making the University the largest employer in the City. Other major employers in the City, their products or services and approximate number of employees are set forth below: Employer Product or Service Employees Washington Regional Med Center Hospital 2,625 Washington Co. Government Government 1,410 Veteran's Admin. Medical Ctr. Hospital 1,390 Fayetteville School District Education 1,360 City of Fayetteville Government 766 Tyson Mexican Original Food Products 683 Wal-Mart #9149 Optical Lab 659 Wal-Mart #359 Retail 520 Wal-Mart #144 Retail 500 Source: City of Fayetteville 11 THE PUBLIC LIBRARY BOARD OF TRUSTEES The Fayetteville Public Library Board of Library Trustees (the "Board") is entrusted with providing leadership in performing the mission of the Fayetteville Public Library (the "Library"), to serve as a liaison between the Library and the City, and to ensure that the Library meets the informational, educational and recreational needs of the community. The Board is responsible for Library funds, maintenance and construction, policies and planning, and the appointment of the Library's Executive Director. The Board is to be composed of five to seven members from the public at large appointed by the Mayor and confirmed by the City Council. The present members of the Board are as follows: Member Term Expires Hershey Garner, President April 1, 2019 Janine Parry, Vice President April 1, 2018 Maylon Rice, Secretary April 1, 2020 Bryn Bagwell April 1, 2022 Suzanne Clark April 1, 2018 Bret Park April 1, 2022 Rob Qualls April 1, 2021 The Executive Director of the Library is David Johnson. Mr. Johnson has served in such position since February 2012. The City's current two-story, 88,000 square foot Blair Library is located at 401 West Mountain in the City. Opened in 2004, the Blair Library was voted the 2005 Library of the Year by the Library Journal, was awarded a LEED Silver -NC rating by the U.S. Green Building Council and was the first registered building of its kind in the State. Sustainable design elements are incorporated throughout the facility, including a cistern that recycles rainwater, a reflective green roof, shaded windows, LED parking lights and waterless urinals. The Library was chosen from a pool of 515 applicants for one of nine Library Innovation Grants bestowed by the International City/County Managers Association (ICMA) in association with the Bill and Melinda Gates Foundation. The grant was utilized to fund the installation of a solar panel test-bed on the Library roof that to date has produced 87,000 kWh of energy and has offset more than 100,000 pounds of cot emissions. The Library is open seven days (64 hours) a week and provides 24-hour online access. The existing facility houses approximately 300,000 volumes, a children's library, a teen library and a cafe and provides meeting and study space for over 200 adults, 125 computer workstations, audio visual items, electronic resources and an attached parking deck. The Library has over 90,000 registered cardholders who borrowed nearly 1.2 million items in 2016. In 2015, there were approximately 619,000 visits to the Library (an average of 185 per hour). In 2016, 72,149 people attended 1,546 programs at the Library, including the Library's summer reading program, the largest in the State. An expansion to the existing Library facility will be financed in part with the proceeds of the Series 2017 Bonds. See the captions "THE PROJECT" and "SOURCES AND USES OF FUNDS" herein. CITY DEBT STRUCTURE The information set forth below was obtained from the City and is believed to be accurate. General Obligation Debt. The City currently has no short-term or long-term general obligation debt outstanding. Tax -Supported Debt. The City currently has outstanding various debt issues which are not general obligations of the City, but which are secured by and payable from specific sales and use taxes and property tax increments. Revenue Debt. The City currently has outstanding debt issues secured by water and sewer system revenues and parking revenues. Reference is made to the City's 2015 Comprehensive Annual Financial Report (which may be accessed as described in Appendix B attached hereto) for a detailed description of the City's outstanding debt obligations. 12 PROPERTY TAX RECEIPTS Computation of Dollar Value of Tax Receipts. The most recent county -wide required reassessment of taxable property was completed in Washington County in 2015. For purposes of Amendment 59 to the Arkansas Constitution, the year in which the reassessment is completed is known as the "Base Year." For a general discussion of the reassessment requirement and its effect on assessed value and tax rates, see the caption "SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES" herein. The Library Tax pledged to the payment of the Series 2017 Bonds is levied at the rate of one and two - tenths (1.20) mills. For purposes of the coverage computation set forth below, it has been assumed that revenues from the collection of the Library Tax will remain constant for so long as any of the Series 2017 Bonds remain outstanding. In connection with this assumption, it is assumed that Special Tax Collections will equal the decrease in collections of the Library Tax resulting from the Homestead Exemption (as described under the caption "SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES — Homestead Exemption" herein). However, if the assessed valuation of taxable property in the City increases or decreases for any reason, the dollar amount of the Library Tax actually levied will increase or decrease proportionally. Assessed Valuation. 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 Utility Property Total 2009 $1,067,947,653 $191,973,349 $38,742,232 $1,298,663,234 2010 1,025,933,870 188,130,198 39,604,447 1,253,668,515 2011 1,046,174,941 199,900,209 42,689,391 1,288,764,541 2012 1,063,617,013 203,289,225 47,200,100 1,314,106,338 2013 1,084,550,127 216,005,532 44,189,124 1,344,744,783 2014 1,115,992,871 226,841,704 48,130,959 1,390,965,534 2015 1,171,158,618 232,141,573 51,742,571 1,455,042,762 2016 1,181,599,558 252,341,147 55,599,687 1,489,540,392 Source: Washington County Tax Assessor's Office. The assessed value represents 20% of the appraised value of property. No single taxpayer accounted for more than 1.15%0 of the City's 2016 total assessed valuation. Collection of Taxes. Historic collections of an existing 1.0 mill ad valorem tax for the benefit of the Library are shown in the following table: Percentage of Total Year Tax Levy Tax Collections Collections to Tax Levy 2012 $1,288,765 $1,279,913 99.31% 2013 1,314,106 1,294,454 98.50% 2014 1,344,745 1,316,986 97.94% 2015 1,390,966 1,350,331 97.08% 2016 1,455,043 1,402,544 96.39% Coverage. Based on the five-year average collection rate of 97.84%, collections of the 1.2 mill Library Tax levied on taxable property within the City, as supplemented by the Special Tax Collections, will provide coverage in excess of annual principal and interest requirements for the Series 2017 Bonds as shown below. The figures set forth below are estimates only, and there can be no assurance that the collection amount and rate will equal the estimated amounts below. Estimated Library Tax Revenue at 100% Collection(') $1,787,448 Most recent 5 years Average Total Collection Rate(2) 97.84% Estimated Available Tax Revenue $1,748,839 Maximum Annual Debt Service (2047) (3) $1,432,395 Coverage Ratio 1.22X (1) Based on Certified 2017 Washington County property assessment of $1,489,540,392; 100% Collection less County Treasurer's Commission (2%) and Homestead Exemption plus Special Tax Collections. (2) See the subcaption "— Collection of Taxes" above. (3) See the caption "DEBT SERVICE REQUIREMENTS" herein. 13 Projected Mandatory Redemptions. The table under the caption "DEBT SERVICE REQUIREMENTS' herein does not reflect possible mandatory redemptions from surplus Tax Receipts. Surplus Tax Receipts are collections of the Library Tax and the Special Tax Collections in excess of the amounts needed to pay scheduled debt service on the Series 2017 Bonds as due, Trustee's and Paying Agent fees and expenses, arbitrage rebate, and debt service amounts due on the next succeeding Interest Payment Date. Surplus Tax Receipts will be used to redeem the Series 2017 Bonds on each January 1. Based on a collection rate of 97.84% and an annual tax levy of $1,787,448, the estimated available tax revenue will be approximately $1,749,000 per year. If such an estimate is correct and there is no increase or decrease in such collections or the collection rate and scheduled debt service on the Series 2017 Bonds is as shown under the caption "DEBT SERVICE REQUIREMENTS" herein, the Series 2017 Bonds would be redeemed prior to maturity as shown below. There can be no assurance that these estimates will be realized and that the projected redemptions will occur in the amounts set forth below. Year Principal Due Projected Redemptions Total 2018 $ 560,000 $ 340,000 $ 900,000 2019 530,000 355,000 885,000 2020 545,000 370,000 915,000 2021 565,000 375,000 940,000 2022 580,000 390,000 970,000 2023 600,000 400,000 1,000,000 2024 615,000 415,000 1,030,000 2025 635,000 430,000 1,065,000 2026 655,000 440,000 1,095,000 2027 675,000 450,000 1,125,000 2028 700,000 465,000 1,165,000 2029 730,000 480,000 1,210,000 2030 760,000 495,000 1,255,000 2031 790,000 510,000 1,300,000 2032 820,000 530,000 1,350,000 2033 855,000 540,000 1,395,000 2034 890,000 565,000 11455,000 2035 925,000 580,000 1,505,000 2036 965,000 605,000 1,570,000 2037 1,000,000 625,000 1625,000 2038 1,040,000 645,000 1:685,000 2039 1,060,000 1,060,000 Totals: $16.495,000 $10,005.000 $26.500,000 [REMAINDER OF PAGE INTENTIONALLY BLANK] 14 DEFINITIONS OF CERTAIN TERMS The following are definitions of certain terms used in this Official Statement: "Act" means the Local Government Library Bond Act of 1993, codified as Arkansas Code Annotated (1998 Repl. & 2015 Supp.) Sections 14-142-201 et seq., as from time to time amended. "Additional Bonds" means Bonds in addition to the Series 2017 Bonds which are issued under the provisions of Section 212 of the Indenture. "Additional Facilities" means land, buildings, structures, machinery, furniture, fixtures, equipment and all related or necessary tangible property constituting improvements which are permitted to be financed under the provisions of Amendment 30 and the Act. "Amendment 30" means Amendment 30 to the Constitution of the State of Arkansas, as amended by Amendment 72 to the Constitution of the State of Arkansas. "Amendment 79" means Amendment 79 to the Constitution of the State of Arkansas. "Annual Debt Service" means, with respect to all or any particular amount of Bonds, the Debt Service for any particular Fiscal Year required to be paid or set aside during such Fiscal Year, less the amount of such payment which is provided from the proceeds of the sale of Bonds or from sources other than Tax Receipts. "Authorized Representative" means either the Mayor or the Finance Director of the City and such additional persons as from time to time may be designated to act on behalf of the City by a Certificate furnished to the Trustee containing the specimen signature thereof and executed on behalf of the City by its Mayor. "Authorizing Ordinance" means Ordinance No. 903, adopted by the City on September 20, 2016, which authorized the issuance of the Series 2017 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. "Board" means the Fayetteville Public Library Board of Trustees, or any successor thereto. "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. "Bond Year" means the twelve-month period beginning on January 2 of each year and ending on January 1 of the following year. "Bonds" mean the Series 2017 Bonds and all Additional Bonds, if any, authenticated and delivered under the Indenture. "Book -Entry System" means the book -entry system maintained by the Securities Depository and described in the Indenture. "Certificate" means a document signed by an Authorized Representative of the City attesting to or acknowledging the circumstances or other matters therein stated. "City" means the City of Fayetteville, Arkansas, a municipality and political subdivision under the laws of the State of Arkansas. "City Clerk" means the person holding the office and performing the duties of the City Clerk of the City. "Closing Date" means, with respect to any series of Bonds, the date upon which there is an exchange of such series of Bonds for the proceeds representing the purchase price for such series of Bonds by the Original Purchaser or Purchasers thereof. "Code" means the Internal Revenue Code of 1986, as from time to time amended, and applicable regulations issued or proposed thereunder. "Continuing Disclosure Agreement" means, collectively, each Continuing Disclosure Agreement between the City and the Trustee, dated the date of issuance and delivery of a series of Bonds, as originally executed and as amended from time to time in accordance with the terms thereof. 15 "Cost of Issuance Fund" means the fund by that name created and established in the Indenture. "Costs of Issuance" means all items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, including, but not limited to, underwriting discounts, fees and expenses, election expenses, publication expenses, expenses of printing, reproducing, filing and recording documents, initial fees and charges of the Trustee and any Paying Agent, fees and expenses for legal, accounting and other professional services, rating fees, costs of securing any credit enhancement for the Bonds, costs of execution, transportation and safekeeping of the Bonds, and other costs, charges and fees incurred in connection with the foregoing. "Debt Service" means, with respect to all or any particular amount of Bonds for any Payment Period, the amount required to pay the sum of the interest on such Bonds payable during the Payment Period and the principal of, and any other amount required to effect any mandatory redemption of, such Bonds, if any, during the Payment Period. "Election Ordinance" means Ordinance No. 5876, adopted by the City on May 17, 2016, which called a special election on August 9, 2016, on the levy of the Library Tax and the issuance of the Series 2017 Bonds. "Event of Default" means any event of default specified in Section 801 of the Indenture. "Finance Director" means the City's Chief Financial Officer. "Fiscal Year" means the 12-month period used, at any time, by the City for accounting purposes, which may be the calendar year. "Fund" means a fund confirmed or established by the Indenture. "Government Securities" means (i) direct obligations of the United States of America, (ii) obligations on which the full and timely payment of principal and interest is fully and unconditionally guaranteed by the United States of America (including any such securities issued or held in book -entry form on the books of the Department of Treasury of the United States of America), and (iii) evidences of direct ownership or proportionate or individual interest in future interest or principal payments on specified direct obligations of, or obligations on which the full and timely payment of principal and interest is fully and unconditionally guaranteed by, the United States of America, which obligations are held by a bank or trust company organized and existing under the laws of the United States of America or any state thereof in the capacity of custodian in form and substance satisfactory to the Trustee. "Holder" or `Bondholder" or "Owner of the Bonds" means the registered owner of any Bond. "Indenture" means the Trust Indenture dated as of July 1, 2017, between the City and the Trustee, pursuant to which the Bonds are issued, and any amendments and supplements thereto. "Interest Payment Date" means any date on which interest is payable on the Bonds. "Investment Obligations" means, if and to the extent the same are at the time legal for investment of funds held under the Indenture: (a) Cash deposits, certificates of deposits or money market deposits (insured at all tirnes by the Federal Deposit Insurance Corporation or otherwise collateralized with Govermment Obligations); (b) Government Securities; (c) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America: U.S. Export -Import Bank (Eximbank); Rural Economic Community Development Administration; Federal Financing Bank; General Services Administration; U.S. Maritime Administration; U.S. Department of Housing and Urban Development (PHAs); Small Business Administration; Government National Mortgage Association (GNMA); Federal Housing Administration; and Farm Credit System Financial Assistance Corporation. (d) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: (i) Senior debt obligations rated in the highest long-term rating category by at least two nationally recognized rating agencies issued by the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC); and (ii) Senior debt obligations of the Federal Home Loan Bank System; (e) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which either (i) have a rating on their short-term certificates of deposit on the 16 date of purchase in the highest short-term rating category of at least two nationally recognized rating agencies, (ii) are insured at all tines by the Federal Deposit Insurance Corporation, or (iii) are collateralized with direct obligations of the United States of America at 102% valued daily. All such certificates must mature no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (f) Commercial paper which is rated at the time of purchase in the highest short-term rating category of at least two nationally recognized rating agencies and which matures no more than 270 days after the date of purchase; (g) Investments in (i) money market funds subject to SEC Rule 2a-7 and rated in the highest short-term rating category of at least one of S&P and Moody's and (ii) public sector investment pools operated pursuant to SEC Rule 2a-7 in which the City's deposit shall not exceed 5% of the aggregate pool balance at any time and such pool is rated in one of the two highest short-terin rating categories of at least one of S&P and Moody's; (h) Pre -refunded municipal obligations deemed as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (i) Which are rated, based on an irrevocable escrow account or fund (the "Escrow"), in the highest long-term rating category of at least two nationally recognized rating agencies; or (ii) (I) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or direct obligations of the United States of America, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (11) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; (i) General obligations of states with a short-term rating in one of the two highest rating categories and a long-term rating in one of the two highest rating categories of at least two nationally recognized rating agencies. In the event such obligations are variable rate obligations, the interest rate on such obligations must be reset not less frequently than annually; and 0) Any cash sweep account maintained by the Trustee and consisting of investments described in clauses (a) through (i). "Library Tax" means the one and two -tenths (1.20) mill per dollar City tax levied on the assessed value of all taxable property within the City approved by the voters at the August 9, 2016 special election, together with all penalties and interest payable with respect thereto. "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. "Original Purchaser" means the first purchaser(s) of a series of Bonds from the City. "Outstanding" or "outstanding" means, as of any date of computation, Bonds theretofore or thereupon being delivered under the Indenture, except: (a) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or prior to such date for cancellation; (b) Bonds deemed to be paid in accordance with Article VII of the Indenture; and (c) Bonds in lieu of or in exchange or substitution for which other Bonds shall have been authenticated and delivered pursuant to the Indenture. "Participants" means those financial institutions for 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. 17 "Payment Period" means a period from, but not including, a Principal Payment Date up to, and including, the next succeeding Principal Payment Date. "Person" means any natural person, firm, association, corporation, limited liability company, partnership, joint stock company, joint venture, trust, unincorporated organization or firm, or a government or any agency or political subdivision thereof or other public body. "Principal Payment Date" means any date on which principal is payable on the Bonds, whether at maturity, by operation of the mandatory sinking fund, or otherwise. "Project" means the costs of acquiring, constructing and equipping capital improvements to the Fayetteville Public Library, as more particularly described under the caption "THE PROJECT" herein, and any Additional Facilities that may be acquired, constructed and equipped in the future with the proceeds of Bonds. "Project Costs" means, to the extent permitted by Amendment 30 and the Act or other applicable laws, with respect to a Project, all costs of planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation, including obtaining governmental approvals, certificates, permits and licenses with respect thereto, heretofore or hereafter paid or incurred by or on behalf of the City and which shall include, but shall not be limited to: (a) interest accruing in whole or in part on the Bonds prior to and during construction of a Project, including all amounts required by this Indenture to be paid from the proceeds of the Bonds into the Bond Fund; (b) preliminary investigation and development costs, engineering fees, contractors' fees, labor costs, the cost of materials, equipment, utility services and supplies, costs of obtaining permits, licenses and approvals, costs of real property, insurance premiums, legal and financing fees and costs, administrative and general costs, and all other costs properly allocable to the acquisition, construction and equipping of a Project and placing the same in operation; (c) all costs relating to injury and damage claims arising out of the acquisition, construction or equipping of a Project; (d) all other costs incurred in connection with, and properly allocable to, the acquisition, construction and equipping of a Project; and (e) amounts to pay or reimburse the City or any City fund for expenses incident and properly allocable to such planning, designing, purchasing, acquiring, constructing, improving, enlarging, extending, repairing, financing and placing in operation of a Project. "Project Fund" means the fund by that name created and established in Section 501 of this Indenture. "Rebate Fund" means the fund by that name created and established in the Indenture. "Record Date" means the close of business on the fifteenth day of the calendar month next preceding each Interest Payment Date on the Bonds or, if such day shall not be a business day, the immediately preceding business day. "Redemption Fund" means the fund by that name established in the Indenture. "Requisition" means a written requisition of the City, consecutively numbered, signed by an Authorized Representative and including, without limitation, the specific information required by the Indenture. "Revenue Fund" means the fund by that name established in the Indenture. "S&P" means Standard & Poor's Financial Services, LLC. "Securities Depository" means The Depository Trust Company, a limited -purpose trust company organized under the laws of the State of New York, or its nominee, and its successors and assigns, or any other depository institution appointed by the City to act as depository for the Bonds in connection with the Book -Entry System. "Series 2017 Bonds" means the City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017, dated as of their date of delivery, issued under and secured by the Indenture in the aggregate principal amount of $26,500,000 "Special Tax Collections" means the pro rata portion of the one-half of one percent (0.5%) statewide sales and use tax levied pursuant to Amendment 79 which is allocable to the Library Tax. 18 "State" means the State of Arkansas. "Supplemental Indenture" means any indenture supplemental to or amendatory of the Indenture. "Tax Receipts" means receipts derived by the City from the levy of the Library Tax or the Special Tax Collections. "Tax Regulatory Agreement" means with respect to any series of Bonds, that Tax Regulatory Agreement of the City relating to maintenance of the excludability of interest on such Bonds from gross income for federal income tax purposes, delivered in connection with the issuance of such series of Bonds. "Trustee" and "Paying Agent" means the trustee and paying agent for the time being, whether original or successor, with the same institution to always occupy both positions, and with the original Trustee and Paying Agent being Simmons Bank, Pine 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 City Clerk, for a full statement thereof. Funds. The Tax Receipts are pledged by the Indenture to the payment of the principal of and interest on the Bonds. The following Funds are established by the Indenture with the Trustee in connection with the Bonds: Revenue Fund Bond Fund Redemption Fund Project Fund Cost of Issuance Fund Rebate Fund Application of Tax Receipts. The application of Tax Receipts is as follows: (a) Revenue Fund. All Tax Receipts shall, as and when received, be deposited into the Revenue Fund. Moneys at any time on deposit in the Revenue Fund are to be applied, as needed, on a monthly basis to provide for the payment of Debt Service on the Bonds, to the payment of any arbitrage rebate due under Section 148(f) of the Code, and to the payment of fees and expenses of the Trustee and any Paying Agent, at the times and in the amounts set forth as follows: (b) Bond Fund. On or before the fifteenth day of each month, commencing August 15, 2017, 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 (ii) into the Bond Fund, an amount equal to 1/12 of the principal on the Bonds (including mandatory sinking fund redemptions) due on the next Principal Payment Date (except for the period from August 15, 2017 through December 15, 2017, such deposits shall be equal to 115 of the principal and interest due on the Series 2017 Bonds on January 1, 2018). Moneys in the Bond Fund shall be used solely for the purpose of paying Annual Debt Service on the Bonds, as provided in the Indenture. The Trustee shall withdraw from the Bond Fund, on the date of any principal or interest payment, an amount equal to such payment for the sole purpose of paying the same. If Tax Receipts in the Revenue Fund are insufficient to make the required monthly payment into the Bond Fund, the amount of any such deficiency in the payment made shall be added to the amount otherwise required to be paid into the Bond Fund in the next succeeding month. . When the moneys held in the Bond Fund and the Redemption Fund shall be and remain sufficient to pay in full the principal of and interest on all Bonds then Outstanding in accordance with the Indenture, together with the required fees and expenses to be paid or reimbursed to the Trustee and Paying Agent, the City shall have no further obligation to make payments into such Funds. (c) Redemption Fund. There shall be deposited to the credit of the Redemption Fund all moneys necessary to effect an optional redemption of the Bonds and all remaining moneys transferred from the Project Fund 19 upon completion of a Project. In addition, on each December 15, moneys remaining in the Revenue Fund following the required transfers to the Bond Fund described above and following the payment of Trustee and Paying Agent fees and expenses and any Rebate Amount then due, in excess of Debt Service due on the Bonds on the next July 1, shall be transferred to the Redemption Funds and shall be utilized to redeem Bonds prior to maturity on the following January 1. Moneys in the Redemption Fund shall be transferred to the Bond Fund at such times as may be necessary to effectuate redemptions of the Bonds on the first available redemption date. See the caption "THE SERIES 2017 BONDS — Redemption" herein. (d) Cost of Issuance Fund. A portion of the proceeds of the Series 2017 Bonds shall be deposited to the credit of the Cost of Issuance Fund. The Trustee shall pay those Costs of Issuance as directed by the City pursuant to a Certificate delivered on a Closing Date. After all Costs of Issuance have been paid with respect to a series of Bonds, any remaining moneys in the Cost of Issuance Fund shall be transferred to the Bond Fund. (e) Project Fund. A portion of the proceeds of the Series 2017 Bonds shall be deposited to the Project Fund. Amounts in the Project Fund shall be expended and applied for the payment of Project Costs attributable to the Project. Disbursements shall be made from the Project Fund on the basis of Requisitions in the form specified in the Indenture. Within ninety (90) days following completion of a Project or portion thereof being financed by the Bonds, the City shall deliver to the Trustee its Certificate stating that such project or applicable portion thereof is complete, and the Trustee shall transfer the remaining moneys in the Project Fund (save and except moneys needed to satisfy unpaid Project Costs) to the Redemption Fund for application to the retirement of Bonds by redemption or purchase as provided in the Indenture. (f) 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 Rebate 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. 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 Obligations with maturity or redemption dates consistent with the times at which said moneys will be required for the purposes provided in the Indenture. Moneys in separate Funds may be commingled for the purpose of investment. Investment 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. Investments in any Fund shall be evaluated monthly by the Trustee. For the purpose of determining the amount in any Fund, the City and the Trustee shall value all Investment Obligations credited to such Fund at fair market value. The Trustee shall determine the fair market value based on accepted industry standards and from accepted industry providers. The fair market value of certificates of deposit and bankers' acceptances shall be equal to the face amount thereof plus accrued interest thereon. The fair market value of any Investment Obligation that cannot be determined in the manner provided above shall be established pursuant to the prior agreement of the City and the Trustee. The Trustee shall sell or present for redemption any Investment Obligations as necessary in order to provide money for the purpose of making any payment required under the Indenture, and the Trustee shall not be liable for any loss resulting from any such sale. Responsibility of Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of moneys made by it at the direction of the City. Instruments of Further Assurance. At the request of the Trustee, the City shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, ordinances, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable for the better assuring, conveying, granting, pledging, assigning and confirming of all and singular the Tax Receipts and all other moneys pledged or assigned by the Indenture, or intended so to be, or which the City may become bound to pledge or assign. Tax Covenants. The City shall not use or permit the use of any Bond proceeds or any other funds of the City, directly or indirectly, in any manner, and will not take or permit to be taken any other action or actions which 20 would adversely affect 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 deemed in Sections 148(a) and (b) of the Code. The City agrees that so long as any of the Bonds remain Outstanding, it will comply with the provisions of each applicable Tax Regulatory Agreement. Defeasance. Any Bond shall be deemed to be paid within the meaning of the Indenture when payment of the principal of and premium, if any, and interest on such Bond (whether at maturity or upon redemption as provided in the Indenture, or otherwise), either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for by irrevocably depositing with the Trustee, in trust and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such payment or (2) Government Securities (provided that such deposit will not affect the tax-exempt status of the interest on any of the Bonds or cause any of the Bonds to be classified as "arbitrage bonds" within the meaning of Section 148(a) of the Code, as reflected in an opinion of Bond Counsel delivered to the Trustee), maturing as to principal and interest in such amounts and at such times as will provide sufficient moneys to make such payment, and all necessary and proper fees, compensation and expenses of the Trustee and any Paying Agent pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of the Trustee and any said Paying Agent. Events of Default. Each of the following events shall constitute and is referred to in the Indenture as an "Event of Default": (a) Default in the due and punctual payment of any interest on any Bond; (b) Default in the due and punctual payment of the principal of or premium, if any, on any Bond, whether at the stated maturity thereof, or upon proceedings for redemption thereof, or upon the maturity thereof by declaration; (c) Default in the payment of any other amount required to be paid under the Indenture or the performance or observance of any other of the covenants, agreements or conditions contained in the Indenture, or in the Bonds issued under the Indenture, and continuance thereof for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied, shall have been given to the City by the Trustee, which may give such notice in its discretion and shall give such notice at the written request of Holders of not less than fifty-one percent (51%) in aggregate principal amount of the Bonds then Outstanding, unless the Trustee, or the Trustee and Holders of an aggregate principal amount of Bonds not less than the aggregate principal amount of Bonds the Holders of which requested such notice, as the case may be, shall agree in writing to an extension of such period prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the Trustee will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the City within such period and is being diligently pursued; (d) The filing of a petition in bankruptcy by or against the City under the United States Bankruptcy Code or the commencement of a proceeding by or against the City under any other law concerning insolvency, reorganization or bankruptcy; and (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 shall, upon the written request of the Holders of not less than 51% in aggregate principal amount of Bonds Outstanding, 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. 21 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: (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; 22 (g) to make such additions, deletions or modifications as may be necessary to assure compliance with Section 148(f) of the Code relating to required rebate to the United States or otherwise as may be necessary to assure exemption from federal income taxation of interest on the Bonds; or (h) to modify, alter, amend or supplement the Indenture in any other respect which is not materially adverse to the Bondholders and which does not involve a change described in clause (a), (b), (c), (d), (e) or (f) below and which, in the judgment of the Trustee, is not to the prejudice of the Trustee. Supplemental Indentures Requiring Consent of Bondholders. Subject to the terms and provisions contained above and in this paragraph, and not otherwise, the Holders of not less than 2/3 in aggregate principal amount of the Bonds then Outstanding shall be required, from time to time, anything contained in the Indenture to the contrary notwithstanding, to consent to and approve the execution by the City and the Trustee of such indenture or indentures supplemental to the Indenture as shall be deemed necessary and desirable by the City for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in the Indenture or in any Supplemental Indenture; provided, however, that nothing contained in the Indenture shall permit or be construed as permitting (a) an extension of the maturity (or mandatory redemption date) of the principal of or the interest on any Bond issued thereunder, or (b) a reduction in the principal amount of or redemption premium or rate of interest on any Bond issued thereunder, or (c) the creation of any lien on the Trust Estate or any part thereof, except as expressly permitted in the Indenture, or (d) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture, or (f) depriving the Holder of any Bond then Outstanding of the lien created on the Trust Estate. If, at any time the City shall request the Trustee to enter into any Supplemental Indenture for any of the purposes described above, the Trustee shall, at the expense of the City, cause notice of the proposed execution of such Supplemental Indenture to be mailed by first class mail to each registered owner of the Bonds. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the principal office of the Trustee for inspection by Bondholders. The Trustee shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail such notice, and any such failure shall not affect the validity of such Supplemental Indenture when consented to and approved as provided above. If Holders of not less than 2/3 in aggregate principal amount of the Bonds Outstanding at the time of the execution of any such Supplemental Indenture shall have consented to and approved the execution thereof, no Holder of any Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from executing the same or from taking any action pursuant to the provisions thereof. SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT The City has entered into an undertaking in the form of the Continuing Disclosure Agreement for the benefit of the Beneficial Owners of the Series 2017 Bonds to cause certain financial information to be sent to certain information repositories annually and to cause notice to be sent to such information repositories of certain specified events, pursuant to the requirements of Section (b)(5)(i) of Rule 15c2-12 of the Securities Exchange Act of 1934, as amended (the "Rule"). The City is a party to multiple continuing disclosure agreements for various bond issues of the City secured by different repayment sources. During the past five years, the City has identified certain instances in which filings were not made as required by such agreements. A listing of such instances, which may not be inclusive, is set forth below. With respect to the City's continuing disclosure obligations relating to certain series of bonds secured by sales and use tax receipts, one notice of mandatory redemption from excess sales tax receipts was not posted on the Municipal Securities Rulemaking Board's Electronic Municipal Markets Access (EMMA) system. With respect to the City's continuing disclosure obligations relating to a series of bonds secured by receipts of a special hotel, motel and restaurant gross receipts tax (which bonds have now been refunded), the City's audited financial statements and supplemental financial data for fiscal year 2011 were not posted on a timely basis (posted 7/30/14). With respect to the City's continuing disclosure obligations for certain bonds secured by water and sewer revenues, audited financial statements and supplemental operating and financial data for fiscal years 2011 and 2012 were not posted on a timely basis for all relevant bond CUSIP numbers. Said audited financial statements and supplemental operating and financial data were timely posted for one issue of the City's water and sewer revenue 23 bonds. A ratings upgrade with respect to one series of water and sewer revenue bonds (no longer outstanding) was not posted. Supplemental financial data for fiscal years 2011 was timely filed but incomplete (remedied 6/27/13) for an issue of the City's tax increment finance bonds. With respect to all of the aforementioned bond issues and an issue of certain bonds secured by the City's parking revenues, the City's audited financial statements and the required supplemental operating and financial data for fiscal year 2015 were not posted on a timely basis. Unaudited financial statements and supplemental operating and financial data for such fiscal year were timely provided to the various bond trustees but were not posted to the EMMA system until 6/30/16 (two days late). As required by the Rule, upon their availability, the audited financial statements were subsequently posted on 9/30/16. Labeling inaccuracies exist with respect to several of the City's EMMA filings. The City makes no representation as to the materiality of the continuing disclosure delinquencies and omissions described above. The City has undertaken steps to ensure future compliance with its continuing disclosure obligations. The Continuing Disclosure Agreement contains the following covenants and provisions: (a) The City covenants that it will disseminate, or will cause the Dissemination Agent to disseminate, the Annual Financial Information and the Audited Financial Statements (in the form and by the dates set forth in Exhibit I to the Continuing Disclosure Agreement) by delivering such Annual Financial Information to the MSRB within 180 days of the completion of the City's fiscal year. Audited Financial Statements, if available, shall be filed with the MSRB at the same time as the Annual Financial Information. If not then available, unaudited financial statements shall be included with the MSRB filing, and Audited Financial Statements shall be provided to the MSRB within ten (10) business days after availability thereof. The City is required to deliver or cause delivery of such information in Prescribed Form and by such time so that such entity receives the information by the dates specified. (b) If any part of the Annual Financial Information can no longer be generated because the operations to which it is related have been materially changed or discontinued, the City will disseminate or cause dissemination of a statement to such effect as part of its Annual Financial Information for the year in which such event first occurs. (c) If any amendment is made to the Continuing Disclosure Agreement, the Annual Financial Information for the year in which such amendment is made (or in any notice or supplement provided to the MSRB) shall contain a narrative description of the reasons for such amendment and its impact on the type of information being provided. (d) The City covenants to disseminate or cause dissemination in a timely manner, not in excess of ten (10) business days after the occurrence of the event, of Listed Events Disclosure to the MSRB in Prescribed Form. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any Series 2017 Bonds or defeasance of any Series 2017 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 2017 Bonds pursuant to the Indenture. The City is required to deliver or cause delivery of such Listed 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. M 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 2017 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 2017 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. 24 (g) The Undertaking of the City pursuant to the Continuing Disclosure Agreement shall be tenninated hereunder when the City shall no longer have any legal liability for any obligation on or relating to the repayment of the Series 2017 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 2017 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 2017 Bonds holding a majority of the aggregate principal amount of the Series 2017 Bonds (excluding Series 2017 Bonds held by or on behalf of the City or its affiliates) pursuant to the terms of the Indenture at the time of the amendment; or (iv) the amendment or waiver is otherwise permitted by the Rule. (i) The following terms used under this caption shall have the meanings set forth below: "Annual Financial Information" means the Tax Receipts for the latest fiscal year and for the four previous fiscal years, if available. "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 comprehensive annual financial report 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 2017 Bonds (including persons holding Series 2017 Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2017 Bonds for federal income tax purposes. "Commission" means the U.S. Securities and Exchange Commission. "Dissemination Agent" shall mean Simmons Bank, Pine Bluff, Arkansas, acting in its capacity as a dissemination agent under the Continuing Disclosure Agreement, or any successor dissemination agent designated in writing by the City and which has filed with the Trustee a written acceptance of such designation. MSRB. "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. "Listed Event" means the occurrence of any of the following events with respect to the Series 2017 Bonds: (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; 25 (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; and (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material. "Listed Events Disclosure" means dissemination of a notice of a Listed 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 2017 Bonds. "Prescribed Form " means, with regard to the filing of Annual Financial Information, Audited Financial Statements and notices of Material Events with the MSRB at www.emma.msrb.org (or such other address or addresses as the MSRB may from time to time specify), such electronic format, accompanied by such identifying information, as shall have been prescribed by the MSRB and which shall be in effect on the date of filing of such information. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission ("SEC") under the Exchange Act, as the same may be amended from time to time. "State " means the State of Arkansas. "Undertaking" means the obligation of the City pursuant to subsections (a) and (d) above. SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES The following is a summary of the principal provisions of the Arkansas Constitution and statutes relating to the assessment and collection of real and personal property taxes in the State of Arkansas. Taxable Property. In general, the Arkansas Constitution subjects all real estate property situated in the State to ad valorem taxation except the following: (1) public property used exclusively for public purposes; (2) churches used as such; (3) cemeteries used exclusively as such; (4) school buildings and apparatus; (5) libraries and grounds used exclusively for school purposes; (6) buildings, grounds and materials used exclusively for public charity; and (7) items of household furniture and furnishings, clothing, appliances and other personal property used within the home, if not held for sale, rental or other commercial or professional use. The Arkansas General Assembly may exempt one or more classes of intangible personal property from taxation, tax intangible property at a lower rate, or provide for taxation of intangible personal property on a basis other than ad valorem. Under statutes presently in force, intangible personal property is not subject to ad valorem taxation. Amendment 89 also authorizes the General Assembly to exempt from taxation the first $20,000 of value of a homestead of a taxpayer 65 years of age or older. The Arkansas Constitution provides exemptions from ad valorem taxation, with limitations, for textile mills and new manufacturing establishments. Tangible personal property in transit through the State is not subject to ad valorem taxation. This exemption has been interpreted to include raw materials shipped to Arkansas for inclusion in tangible personal property manufactured, processed or refined in Arkansas for shipment outside the State. Assessment. Each Arkansas county has a county assessor, elected for a two-year term of office. Every year between the first Monday in January and July 1, the assessor is required to assess the value of all real and personal property located in the county and has the authority to list, value and assess all tangible personal property subject to ad valorem taxation located in the county. Under certain circumstances, a professional appraiser or appraisers may be employed for the purpose of assessing all or any portion of the property located in the county. 26 It is the duty of the assessor to determine and to keep current a correct and pertinent description of each tract of real property in the county and to place a value on each such tract, including any improvements thereon. The assessor must then file with the county clerk, by July 31, an assessment report of all tangible personal property within the county and, by the third Monday of August, of all real property within the county. The assessor must also, by the third Monday of August of each year, report to the Arkansas Public Service Commission (the "PSC") the total assessment of real and tangible personal property in the county and the kind, character, number and value of property assessed for taxation in the county. The owner of every vehicle subject to registration in the State must assess the vehicle with the county tax assessor. County tax assessors and collectors are required to forward information identifying vehicles which have been assessed within the time frame required by law and vehicles for which the owners have paid personal property taxes within the time frame required by law to the Arkansas Department of Finance and Administration. Any property owner may appeal an assessment made by the assessor to the county equalization board, which has the authority to increase or decrease such assessment. From a decision by the board, a property owner or the assessor may appeal to the county court. Upon complaint made to the Assessment Coordination Division (the "ACD") of the PSC by the county judge, county assessor or county equalization board, or upon the ACD's own investigation and motion, and a summary hearing, the ACD may, in its discretion, order a reassessment of all or any part of the taxable property in any county, to be made by the county assessor or by a person or persons to be recommended by the county judge and appointed by the ACD. Property owned by public utilities and common carriers and "used and/or held for use in the operation of the company ..." is assessed for tax purposes by the Tax Division of the PSC. Arkansas Code Annotated § 26-26- 1605 provides that the Tax Division "shall assess the property at its true and full market or actual value" and that all utility property of a company, whether located within or without the State of Arkansas, is to be valued as a unit. Annually, the company is required to file a report with the Tax Division. The Tax Division reviews these reports, along with other reports (such as reports to shareholders, the Federal Connnunications Commission, the Federal Energy Regulatory Commission and the Interstate Commerce Commission), to determine the value of the property. Valuation is currently made on the basis of a formula, as set forth in Arkansas Code Annotated § 26-26-1607, with consideration given to (i) original cost less depreciation, replacement cost less depreciation or reconstruction cost less depreciation; (ii) market value of capital stock and funded debt; and (iii) capitalization of income. As provided in Arkansas Code Annotated § 26-26-1611, once the value of a company's property as a unit is determined, the Tax Division removes the value allocable to out-of-state property and assigns the remainder among Arkansas taxing units on the basis of value within each jurisdiction. The Tax Division certifies the assessment to the county assessor who enters the assessment as certified on the county assessment roll. County officials have no authority to change such assessment. Reassessment. All other property is assessed by the elected assessor of each Arkansas county (or other official or officials designated by law). This includes both real and tangible personal property. Amendment 79 to the Arkansas Constitution requires each county to appraise all market value real estate normally assessed by the county assessor at its full and fair value at a minimum of once every five (5) years. Amendment 79 requires the county assessor (or other official or officials designated by law), after each county -wide reappraisal, to compare the assessed value of each parcel of real property reappraised or reassessed to the prior year's assessed value. If the assessed value of the parcel increased, then the assessed value of that parcel must be adjusted as provided below. (a) Subject to subsection (c) below, if the parcel is not the homestead and principal place of residence ("homestead") of a taxpayer, then any increase in the assessed value in the first year after reappraisal cannot be greater than 10% (or 5% if the parcel is the taxpayer's homestead) of the assessed value for the previous year. For each year thereafter, the assessed value shall increase by an additional 10% (or 5% if the parcel is the taxpayer's homestead) of the assessed value for the year preceding the first assessment resulting from reappraisal; however, the increase cannot exceed the assessed value determined by the reappraisal prior to adjustment under Amendment No. 79. For property owned by public utilities and common carriers, any annual increase in the assessed value cannot exceed more than 10% of the assessed value for the previous year. The provisions of this subsection (a) do not apply to newly discovered real property, new construction or substantial improvements to real property. (b) If a homestead is purchased or constructed on or after January 1, 2001 by a disabled person or by a person over age 65, then that parcel will be assessed based on the lower of the assessed value as of 27 the date of purchase (or construction) or a later assessed value. If a person is disabled or is at least 65 years of age and owns a homestead on January 1, 2001, then the homestead will be assessed based on the lower of the assessed value on January 1, 2001 or a later assessed value. When a person becomes disabled or reaches age 65 on or after January 1, 2001, that person's homestead should thereafter be assessed based on the lower of the assessed value on the person's 65th birthday, on the date the person becomes disabled or a later assessed value. This subsection (b) does not apply to substantial improvements to real property. For real property subject to subsection (c) below, the applicable date in this subsection (b), in lieu of January 1, 2001, is January 1 of the year following the completion of the adjustments to assessed value required in subsection (c). (c) If, however, there has been no county -wide reappraisal and resulting assessed value of property between January 1, 1986 and December 1, 2000, then real property in that county is adjusted differently. In that case, the assessor (or other official or officials designated by law) compares the assessed value of each parcel to the assessed value of the parcel for the previous year. If the assessed value of the parcel increases, then the assessed value of the parcel for the year in which the parcel is reappraised or reassessed is adjusted by adding one-third (1/3) of the increase to the assessed value for the year prior to appraisal or reassessment. An additional one-third (1/3) of the increase is added in each of the next two (2) years. The adjustment contemplated by this subsection (c) does not apply to the property of public utilities or common carriers. No adjustment will be made for newly discovered real property, new construction or substantial i nprovements to real property. Washington County completed its most recent reassessment in 2015. Based on current growth rates, Washington County is required to conduct a county -wide reappraisal at least once every five years. Valuation. Residential property used solely as the principal place of residence by the owner is assessed according to its value as a residence; agricultural land, pasture land and timber land is assessed according to the productivity of its soil; and residential and commercial land that is vacant is assessed according to the value of its typical use. All other taxable property is assessed according to its current market value, and the Arkansas General Assembly may establish the methods and procedures for valuation of such property, as long as they are equal and uniform throughout the State. Assessed value is an amount equal to 20 percent of market value, and the levied millage is applied against the assessed value to determine the tax owed. Millage Rollback. Amendment 59 to the Arkansas Constitution, as implemented by Act 848 of 1981, as amended (the "Amendment 59 Implementation Act"), directed the Arkansas General Assembly to lnnit the effects of any comprehensive county -wide reassessment by providing for adjustment or rollback of millage rates in certain circumstances. The Amendment 59 Implementation Act provides that the computation of millage rollbacks is to be made separately for each tax source or millage levy (in the case of school districts this requires separate computations for operation and maintenance millage and debt service millage), with the new tax rate for each millage levy to be rounded up to the nearest 1/10 mill. In the case of debt service millage, the tax rate as so adjusted will continue as the continuing annual tax rate until retirement of the bonds to which the tax is pledged. The adjusted rate for operation and maintenance millage is subject to change at each annual school election in accordance with law. The term "base year" means the year in which a county -wide reassessment is completed and adjusted millage rates first extended for collection in the following year. When a county -wide reappraisal of property for ad valorem tax purposes is conducted over a period of two or more years, the taxes are not assessed on the basis of the reappraised value of the property until all tax property in the county has been reappraised, and the adjustment or rollback of millage is applicable in the year of completion. Rollback procedures differ for (a) real property, (b) personal property, and (c) all property of public utilities and regulated carriers. Real Property. If county -wide reassessment results in an increase in value of taxable property in any taxing unit (county, municipality, school district or community college district) in the base year of ten percent (10%) or more over the previous year, then a millage rollback occurs. The millage rollback is designed to assure that taxpayers, as a group, in each taxing unit will pay taxes no greater than ten percent (10%) above the taxes paid during the previous year to such taxing unit. Millage rates applicable to real property are rolled back only one tune following any comprehensive, county -wide reassessment. 28 Personal Property. A separate millage rate is applied to reassessed personal property in order to produce revenues equal to the revenues received from personal property taxes in the base year. As the assessed value of taxable personal property increases, the separate personal property millage rate is reduced annually in order to maintain revenues equal to those for the base year. The tax rate for personal property will increase (at least to the level in effect before the rollback), however, in the event the personal property assessment declines so that a tax rate increase would be necessary to produce revenues equivalent to the base year revenues from personal property. When the revenues from personal property taxes computed on the basis of the current (real property) millage rates equal or exceed revenues from personal property taxes for the base year, the current millage rates applicable to real property will also apply to taxable personal property. The Arkansas Supreme Court has held that a voted increase in the tax rate is not applicable to personal property prior to equalization. Property of Public Utility and Regulated Carriers. During the first five years in which taxes are levied on taxable real and personal property or public utilities and regulated carriers as reassessed, the taxes paid equal the greater of (a) the amount of taxes paid on such property in the base year (less adjustments for property disposed of or reductions in the assessed valuation of such property) and (b) the amount of taxes due on such property at millage rates levied in the current year. If in any of the sixth through tenth years after the base year the base year taxes of a public utility or regulated carrier exceed the current year taxes, then the amount of the taxes are decreased in each year by twenty percent (20%) of the difference until, in the tenth year and thereafter, the taxpayer pays taxes calculated with current millage rates only. If in any of the first ten years after the base year the current year taxes equal or exceed the base year taxes, the public utility or regulated carrier thereafter pays the current year taxes. In implementation of Amendment 59, the Amendment 59 Implementation Act provides that if the provisions in the Amendment and the Act relating to the taxing of public utilities and regulated carriers, or any class thereof, are held to be contrary to the Constitution or statutes of the United States or of the State of Arkansas, all utilities and all classes of carriers shall receive the same treatment provided or required under the court order for a particular type of carrier or utility "if deemed necessary to promote equity between similar utilities or class of carriers." Certain regulated carriers (railroads) have successfully challenged Amendment 59, as applied to them, as contrary to federal statutes. The effect of this challenge by the railroads on utilities and on other classes of carriers cannot be predicted at this time. Bond Protection. As directed by Amendment 59, the Amendment 59 Implementation Act provides that any millage rates rolled back or adjusted pursuant to the Amendment 59 Implementation Act shall be rolled back or adjusted only to a level which will produce at least a level of income sufficient to meet the current requirements of all principal, interest, paying agent fees, reserves and other requirements of the bond indenture. Amendment 78. Amendment 78 to the Arkansas Constitution, approved at the 2000 General Election and effective January 1, 2001, authorized cities and counties to form redevelopment districts for the purpose of financing redevelopment projects. The ad valorem taxes levied by any taxing unit (including municipalities) on property in a redevelopment district may be divided so that all or part of the ad valorem taxes levied against any increase in the assessed value of property in the area after approval of the redevelopment plan for the district shall be used to pay any indebtedness incurred for the redevelopment project. Debt service millage approved by voters prior to January 1, 2001, is excluded from this provision. The creation of redevelopment districts which encompass property in the City may have an adverse effect on the amount of future increases in property taxes collected by the City. Amendment 79. Amendment 79 to the Arkansas Constitution, approved at the 2000 General Election and effective January 1, 2001, generally limits increases in the assessed value of taxable real property and requires that such increases be effected over time. The extent of the limitation depends upon whether the property is a taxpayer's homestead used as the taxpayer's principal place of residence. General Adjustments. With respect to the first assessment following a county -wide reappraisal, Amendment 79 limits any increase in the assessed value of the non -homestead real property to ten percent (10%) of the previous year's assessed value. For each year thereafter, the assessed value of such property will be increased by an additional ten percent (10%) of the assessed value for the year preceding the first assessment following reappraisal, but shall not exceed the assessed value determined by reappraisal. If the property is a taxpayer's homestead, any increase in the assessed value following reappraisal is limited to five percent (5%) of the previous year's assessed value. For each year thereafter, the assessed value of such property will increase by an additional five percent (5%) of the assessed value for the year prior to the first assessment following reappraisal (not to exceed the value determined by reappraisal). 29 The adjustment described above will not apply to newly discovered real property, new construction or substantial improvements to real property. Property of Public Utilities and Regulated Carriers. Under Amendment 79, any annual increase in the value of utility and carrier real property is limited to ten percent (10%) of the assessed value for the previous year. Special Provisions for Those 65 or Over and Disabled Persons. Amendment 79 allows persons who reach 65 years of age or who become disabled on or after January 1, 2001 to pay ad valorem taxes based on lower assessed values of homestead property (but not substantial improvements to such property) after reaching 65 or after becoming disabled. Homestead Exemption. Amendment 79 provides for an annual state credit against ad valorem property tax on a homestead in an amount not less than $350 (but not below zero). The General Assembly implemented this homestead exemption with the passage of Act 1544 of 2001, which provides that, effective with the assessment year 2000 and thereafter, the amount of real property taxes assessed on the homestead of each property owner is reduced by up to $350. Property owners have until October 31 in each year to certify that their property is subject to this homestead exemption, notwithstanding that taxes are due and payable by October 15. Property Tax Relief Trust Fund. Following the passage of Amendment 79, the Arkansas General Assembly increased the state sales and use tax from 4.625% to 5.125%. The proceeds of this one half of one percent (0.5%) increase are paid into the State's Property Tax Relief Trust Fund ("PTRTF"). Act 1544 of 2001, implementing the homestead exemption, also provided for annual distributions to each county treasurer from the PTRTF in accordance with the county's proportionate share of the total statewide property tax reduction for that calendar year resulting from the $350 homestead exemption. County treasurers, in turn, are required to distribute these payments to the taxing entities in the county in proportion to each taxing entity's millage rate. In addition to the proportionate distribution described in the preceding paragraph, for each of the State's fiscal years 2013 and 2014, an additional $2 million was appropriated to be payable from the PTRTF to cities, provided such amounts were remaining in the PTRF after the proportional distributions made pursuant to Act 1544 of 2001. Accordingly, the City is not able to predict the amount, if any, it will receive in any year from the PTRTF. According to the State Treasurer's Office, the amounts paid out of PTRTF in 2008 through 2016, are as follows: Assessor's Municipal County Fiscal Regular Property Property Property Tax Property Tax Fayetteville Year Tax Relief Tax Relief Relief Relief Total Portion 2008 $ 219,554,981.45 $1,020,491.24 $ 4,000,000.00 $ 4,000,000.00 $ 228,575,472.69 $ 153,489.62 2009 215,266,557.77 1,032,834.60 4,000,000.00 4,000,000.00 224,299,392.37 152,507.91 2010 202,574,865.12 827,839.83 4,000,000.00 4,000,000.00 211,402,704.95 152,507.91 2011 212,905,106,14 659,779.38 4,000,000.00 4,000,000.00 221,564,885.52 152,507.91 2012 218,017,102.97 485,669.36 4,000,000.00 4,000,000.00 226,502,772.33 156,607.00 2013 220,827,337.65 371,937.95 4,000,000.00 4,000,000.00 229,199,275.60 156,590.51 2014 231,595,367.20 335,607.89 2,000,000.00 2,000,000.00 235,930,975.09 78,295.25 2015 238,220,926.36 369,806.86 2,000,000.00 2,000,000.00 242,590,733.22 78,179.99 2016 247,948,710.39 475,159.46 2,000,000.00 2,000,000.00 252,423,869.85 78,036.18 Total $2,006,910,955.05 $5,579,126.57 $30,000,000.00 $30,000,000.00 $2,072,490,081.62 $1,158,722.28 Bond Protection. Amendment 79 requires the Arkansas General Assembly to provide procedures for adjusting ad valorem tax rates in such a way that will not interfere with the payment of bonded indebtedness secured by such taxes or millage. Millage rates for real, personal and public utility and regulated carrier property shall be equal unless adjustment of personal property rates is necessary to pay bonded indebtedness in accordance with an indenture agreement. Other. Amendment 79 directs the Arkansas General Assembly to prescribe the method for reassessing real property and to establish the frequency of reassessment, which should occur at least once every five years. Millage rollback will not be affected except to the extent that the adjustments under Amendment 79 are made prior to rollback. Collection. The sheriff of each county serves as collector of property taxes (except as to certain counties, for which the legislature has separated the offices of the sheriff and tax collector). The City is located in Washington County, which has a separate tax collector. All taxes levied are collected in the calendar year immediately following the year in which levied, except that personal property taxes levied on motor vehicles owned by individuals are collected in the calendar year in which levied. 30 Property taxes are payable at any time from March 1 through October 15 of each year and are payable in installments at the option of the taxpayer. Delinquent Taxes. All taxes unpaid after October 15 of any year are considered to be delinquent, and delinquent taxpayers are subject to a penalty of ten percent (10%) of the taxes due. It is the duty of the tax collector to diligently collect all delinquent personal property taxes, and in the performance of these duties the collector is empowered to distrain and sell at public auction personal property for the purpose of enforcing collection of personal property taxes and to garnish the wages or other money owed to the delinquent taxpayer. . If real property taxes remain unpaid for two years following the date the taxes were due, the land is certified to the Commissioner of State Lands for collection or sale. In the absence of any bid in an amount at least equal to the assessed value of the land, the Commissioner may.negotiate a sale. Real property may be redeemed by the taxpayer at a price equal to the taxes due, ten percent (10%) interest for each year of delinquency, a ten percent (10%) penalty for each year of delinquency, and costs. The right of redemption must be exercised within 30 days after real property is sold. Remittance of Tax Collections. The county tax collector is required by law to pay over to the county treasurer, by the fifth day of each month, all funds in the collector's hands belonging to the county or to any municipality or school district located in the county. Upon a certificate of the county clerk, which shall be issued on or before the thirtieth day of each month, the county treasurer is required to transfer to the various taxing bodies, ninety percent (90%) of all funds received by the county treasurer from the county collector. Upon final settlement, adjustments are made and the balance is distributed upon order of the county court approving the final settlement. Because of administrative difficulties, it is generally assumed that no substantial portion of annual tax collections is available to the taxing bodies until December of each year. Miscellaneous. If the assessed value of all classes of taxable property located in the City remains at the same level, without increase or decrease, and the total tax rates applicable to all taxable property in the City remain constant, the annual revenues derived from taxable property will be the same in each year. This would be true of annual revenues available for debt service on the Series 2017 Bonds, as well as other annual revenues of the City (subject in the case of such other revenues to adjustments in the tax rate). In recent years, initiatives which would reduce or abolish property taxes collected pursuant to the Arkansas Constitution have been approved for submission to the voters of Arkansas; however, to date, no initiatives have been approved for submission to the voters at the next general election. UNDERWRITING Under a bond purchase agreement entered into by and between the City and Stephens Inc., Fayetteville, Arkansas (the "Underwriter"), the Series 2017 Bonds are being purchased at a purchase price of $27,003,647.40 (representing the stated principal amount of the Series 2017 Bonds plus a net reoffering premium of $768,647.40 and less an underwriting discount of $265,000.00). The bond purchase agreement provides that the Underwriter will purchase all of the Series 2017 Bonds if any are purchased. The obligation of the Underwriter to accept delivery of the Series 2017 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 2017 Bonds or any proceedings in connection with the issuance thereof, and the absence of material adverse changes in the financial condition of the City. Mark C. Doramus, Chief Financial Officer of the Underwriter, serves on the Board of Directors of the Trustee. The Underwriter intends to offer the Series 2017 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 2017 Bonds to the public, and may offer the Series 2017 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 2017 Bonds, including certain liabilities under federal securities laws. 31 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 2017 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 Code that must be met subsequent to the issuance of the Series 2017 Bonds. Failure to comply with such requirements could cause interest on the Series 2017 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2017 Bonds. The City has covenanted to comply with such requirements. Notwithstanding Bond Counsel's opinion that interest on the Series 2017 Bonds is not a specific preference item for purposes of the federal alternative minimum tax, such interest will be included in adjusted current earnings of certain corporations, and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of such corporation's adjusted current earnings over their alternative minimum taxable income (determined without regard to such adjustment and prior to reduction for certain net operating losses). Original Issue Discount. The Series 2017 Bonds maturing January 1, 2042 (the "Discount Bonds") are being sold at an original issue discount. The difference between the initial public offering prices of such Discount Bonds and their stated amounts to be paid at maturity constitutes original issue discount treated in the same manner for federal income tax purposes as interest, as described above. The amount of original issue discount which is treated as having accrued with respect to a Discount Bond is added to the cost basis of the owner in determining, for federal income tax purposes, gain or loss upon disposition of such Discount Bond (including its sale, redemption or payment at maturity). Amounts received upon disposition of such Discount Bond which are attributable to accrued original issue discount will be treated as tax-exempt interest, rather than as taxable gain, for federal income tax purposes. Original issue discount is treated as compounding semiannually, at a rate determined by reference to the yield to maturity of each individual Discount Bond, on days which are determined by reference to the maturity date of such Discount Bond. The amount treated as original issue discount on such Discount Bond for a particular semiannual accrual period is equal to the product of (i) the yield to maturity for such Discount Bond (determined by compounding at the close of each accrual period) and (ii) the amount which would have been the tax basis of such Discount Bond at the beginning of any particular accrual period if held by the original purchaser, less the amount of any interest payable for such Discount Bond during the accrual period. The tax basis is determined by adding to the initial public offering price on such Discount Bond the sum of the amounts which have been treated as original issue discount for such purposes during all prior periods. If such Discount Bond is sold between semiannual compounding dates, original issue discount which would have been accrued for that semiannual compounding period for federal income tax purposes is to be apportioned in equal amounts among the days in such compounding period. Owners of Discount Bonds should consult their tax advisors with respect to the determination and treatment of original issue discount accrued as of any date and with respect to the state and local tax consequences of owning a Discount Bond. Original Issue Premium. The Series 2017 Bonds maturing January 1, 2018 through January 1, 2037, inclusive, and January 1, 2047 (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 2017 Bonds. 32 The accrual or receipt of interest on the Series 2017 Bonds may otherwise affect the federal income tax liability of the owners of the Series 2017 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 2017 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 2017 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 2017 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 2017 Bonds from gross income for federal income tax purposes or any other federal tax consequence of purchasing, holding or selling tax-exempt obligations. State Taxes. Bond Counsel is of the opinion that, under existing law, the interest on the Series 2017 Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. Changes in Federal and State Tax Law. From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the Series 2017 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 2017 Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular lawsuit will be resolved, or whether the Series 2017 Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2017 Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial authorities as of the date of issuance and delivery of the Series 2017 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. RATING S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC ("S&P"), has assigned a rating of "A" (stable outlook) to the Series 2017 Bonds. Such rating reflects only the view of S&P at the time such rating was given, and the City makes no representation as to the appropriateness of such rating. An explanation as to the significance of the above rating may be obtained only from S&P. The City has furnished S&P certain information and materials relating to the Series 2017 Bonds and the City, some of which have not been included in this Official Statement. Generally, rating agencies base their ratings on such information and materials and investigations, studies and assumptions furnished to and obtained and made by the rating agencies. There is no assurance that a particular rating will be maintained for any given period of time or that it may not be lowered, raised or withdrawn entirely by S&P if, in its judgment, circumstances so warrant. Neither the City nor the Underwriters have undertaken any responsibility to oppose any such revision or withdrawal. Any downward change in or withdrawal of a rating may have an adverse effect on the market price and marketability of the Series 2017 Bonds. No application has been made to any Rating Agency other than S&P for a rating on the Series 2017 Bonds. LEGAL MATTERS Legal Opinions. Legal matters incident to the authorization and issuance of the Series 2017 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 2017 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 2017 Bonds or questioning or affecting the legality of the Series 2017 Bonds or the proceedings and authority under 33 which the Series 2017 Bonds are to be issued, or questioning the right of the City to issue the Series 2017 Bonds or to levy the Library Tax or pledge the Tax Receipts. MISCELLANEOUS Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or owners of any of the Series 2017 Bonds. [REMAINDER OF PAGE INTENTIONALLY BLANK] 34 ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT The information contained in this Official Statement has been taken from sources considered to be reliable, but is not guaranteed. To the best of the knowledge of the City, this Official Statement does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated herein, or necessary to make the statements herein, in light of the circumstances under which they were made, not misleading. The execution and delivery of this Official Statement has been duly authorized by the City of Fayetteville, Arkansas. 35 [PAGE INTENTIONALLY BLANK] APPENDIX A Form of Bond Counsel Opinion Kutak Rock LLP, Bond Counsel, will render an opinion with respect to the Series 2017 Bonds, dated the date of issuance and delivery thereof, in substantially the following form: July _, 2017 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons Bank, as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds Series 2017 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 $26,500,000 Library Improvement Bonds, Series 2017 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 30 and Arkansas Code Annotated (1998 Repl. & Supp. 2015) §§14- 142-201 et seq. (as from time to time amended, the "Act"), pursuant to Ordinance No. #5903 of the City, duly adopted and approved on September 20, 2016 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City and Simmons Bank, as trustee (the "Trustee"). Reference is hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with respect to the conditions for the issuance of parity indebtedness by the City, the nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance and Ordinance No. 5876 of the City, duly adopted and approved on May 17, 2016 (the "Election Ordinance"), and to enter into and perform its obligations under the Indenture, the valid adoption of the Election Ordinance and the Authorizing Ordinance, and the due authorization, execution and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Election Ordinance, the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. A-1 Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 30 and the Act, the City is empowered to adopt the Election Ordinance and the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and constitutes 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 are valid and binding limited obligations of the City payable from and secured by a valid lien on and pledge of the Trust Estate (as defined in the Indenture), including receipts of the Library Tax and the Special Tax Collections (each as defined in the Indenture), in the manner and to the extent described in the Indenture. The City is duly authorized to pledge such Trust Estate, and no further action on the part of the City or any other party is required to perfect the same or the interest of the owners of the Bonds therein. 5. The Library Tax has been validly levied in accordance with the Constitution and laws of the State of Arkansas, including Amendment 30 and the Act, and may be validly pledged to secure the Bonds. 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 imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. The opinions set forth in the preceding sentence assume 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 in order that the interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 7. The interest on the Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. 8. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended, in connection with the offer and sale of the Bonds. It is to be understood that the rights of the registered owners of the Bonds and the enforceability of the Bonds, the Authorizing Ordinance and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Very truly yours, A-2 APPENDIX B Information Regarding Access to the City of Fayetteville 2015 Comprehensive Annual Financial Report The City's 2015 CAFR can be accessed at: www.fayetteville-ar.gov/ArchiveCenter/ViewFile/Item/1663 U-M KUTAK ROCK LLP ATLANTA CHICAGO DENVER SUITE 2000 124 WEST CAPITOL AVENUE IRVINE KANSAS CITY KANSA NORTHWEST ARKANSAS OFFICE LITTLE ROCK, ARKANSAS 72201-3706 LOS ANGELES MINNEAPOLIS SUITE 200 501-975-3000 OKLAHOMA CITY 234 EAST MILLSAP ROAD FACSIMILE 501-975-3001 OMAHA FAYETTEVILLE, ARKANSAS 72703-4099 PHILADELPHIA 479-973-4200 www.kutakrock.com RICHMOND ROGERS SCOTTSDALE July 19, 2017 SPOKANE WASHINGTON, D.C. WICHITA City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons Bank, as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas $26,500,000 City of Fayetteville, Arkansas Library Tax Improvement Bonds Series 2017 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 $26,500,000 Library Tax Improvement Bonds, Series 2017 (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and laws of the State of Arkansas, including, particularly, Amendment 30 and Arkansas Code Annotated (1998 Repl. & Supp. 2015) § § 14-142-201 et seq. (as from time to time amended, the "Act"), pursuant to Ordinance No. 5903 of the City, duly adopted and approved on September 20, 2016 (the "Authorizing Ordinance"), and pursuant to a Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City and Simmons Bank, as trustee (the "Trustee"). Reference is hereby made to the Indenture and to all indentures supplemental thereto for the provisions, among others, with respect to the conditions for the issuance of parity indebtedness by the City, the nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Trustee and the holders of the Bonds, and the terms upon which the Bonds are issued and secured. Reference is made to an opinion of even date herewith of Kit Williams, Esq., City Attorney, a copy of which is on file with the Trustee, with respect, among other matters, to the status and valid existence of the City, the power of the City to adopt the Authorizing Ordinance and Ordinance No. 5876 of the City, duly adopted and approved on May 17, 2016 (the "Election Ordinance"), and to enter into and perform its obligations under the Indenture, the valid adoption of the Election Ordinance and the Authorizing Ordinance, and the due authorization, execution 4813-4939-4251.1 KUTAK ROCK LLP Approving Opinion July 19, 2017 Page 2 and delivery of the Indenture by the City, and with respect to the Indenture being enforceable upon the City. We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the representations of the City contained in the Election Ordinance, the Authorizing Ordinance and the Indenture and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The City is duly created and validly existing as a municipal corporation of the State of Arkansas. Pursuant to the Constitution and laws of the State of Arkansas, including, particularly, Amendment 30 and the Act, the City is empowered to adopt the Election Ordinance and the Authorizing Ordinance, to execute and deliver the Indenture, to perform the agreements on its part contained therein, and to issue the Bonds. 2. The Authorizing Ordinance has been duly adopted by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 3. The Indenture has been duly authorized, executed and delivered by the City and constitutes a valid and binding obligation of the City enforceable upon the City in accordance with its terms. 4. The Bonds have been duly authorized, executed and delivered by the City and are valid and binding limited obligations of the City payable from and secured by a valid lien on and pledge of the Trust Estate (as defined in the Indenture), including receipts of the Library Tax and the Special Tax Collections (each as defined in the Indenture), in the manner and to the extent provided in the Indenture. The City is duly authorized to pledge such Trust Estate, and no further action on the part of the City or any other party is required to perfect the same or the interest of the owners of the Bonds therein. 5. The Library Tax has been validly levied in accordance with the Constitution and laws of the State of Arkansas, including Amendment 30 and the Act, and may be validly pledged to secure the Bonds. 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 imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for purposes of such alternative minimum tax. The opinions set forth in the preceding sentence assume 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 4813-4939-4251.1 KUTAK ROCK LLP Approving Opinion July 19, 2017 Page 3 subsequent to the issuance of the Bonds in order that the interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 7. The interest on the Bonds is exempt from all state, county and municipal taxes in the State of Arkansas. 8. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended, in connection with the offer and sale of the Bonds. It is to be understood that the rights of the registered owners of the Bonds and the enforceability of the Bonds, the Authorizing Ordinance and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Very truly yours, 4*%t C-L-P 4813-4939-4251.1 NORTHWEST ARKANSAS OFFICE SUITE 200 234 EAST MILLSAP ROAD FAYETTEVILLE, ARKANSAS 72703-4099 479-973-4200 City of Fayetteville, Arkansas Fayetteville, Arkansas Simmons Bank, as Trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas Ladies and Gentlemen: KUTAK ROCK LLP SUITE 2000 124 WEST CAPITOL AVENUE LITTLE ROCK, ARKANSAS 72201-3706 501-975-3000 FACSIMILE 501-975-3001 www.kutakrock.com July 19, 2017 $26,500,000 City of Fayetteville, Arkansas Library Tax Improvement Bonds Series 2017 ATLANTA CHICAGO DENVER IRVINE KANSAS CITY LOS ANGELES MINNEAPOLIS OKLAHOMA CITY OMAHA PHILADELPHIA RICHMOND ROGERS SCOTTSDALE SPOKANE WASHINGTON, D.C. WICHITA 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 June 13, 2017 (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 July 19, 2017 (the "Disclosure Agreement"), by and between the City and Simmons Bank, as dissemination agent (the "Dissemination Agent"); (c) An executed counterpart of the Tax Regulatory Agreement dated July 19, 2017 (the "Tax Regulatory Agreement"), by and between the City and the Simmons Bank, as trustee (the "Trustee"); and 4827-7604-7435.1 KUTAK ROCK LLP Supplemental Opinion July 19, 2017 Page 2 (d) The Official Statement dated June 13, 2017, with respect to the Bonds (the "Official Statement"). 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 Dissemination 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. To the best of our knowledge, there is no litigation or other proceeding pending or threatened in any court, agency or other administrative body (either State or Federal) which could have a material adverse effect on (a) the financial condition of the City, (b) the ability of the City to perform its obligations under the Authorizing Ordinance, the Indenture, the Bond Purchase Agreement, the Continuing Disclosure Agreement or the Tax Regulatory Agreement (collectively, the "Related Documents"), (c) the security for the Bonds, or (d) the transactions contemplated by the Related Documents. 5. Nothing has come to our attention which would cause us to believe that, as of the date hereof, the Official Statement (excluding financial and statistical data and information which is contained or incorporated in the Official Statement, as to which no view is expressed) contains any untrue statement of a material fact or omits to state any 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. The enforceability of the respective obligations of the parties to the documents and other items described above, and the availability of certain rights and remedies provided for therein, may be limited by bankruptcy, receivership, insolvency, reorganization, moratorium, marshalling or other similar statutes or rules of law affecting creditors' rights and remedies, to general principles of equity and to the discretion of any court in granting any relief or issuing any order, whether the proceeding is considered a proceeding at law or equity. In particular, the right to indemnification under any of the documents or other items described above may be limited by federal of state securities laws or by the public policy underlying such laws. 4827-7604-7435.1 KUTAK ROCK LLP Supplemental Opinion July 19, 2017 Page 3 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, 1 4M zlL �?v" 4827-7604-7435.1 KIT WILLIAMS FAYETTEVILLE CITY ATTORNEY Blake E. Pennington Assistant City Attorney Rhonda Lynch Paralegal Phone 479.575.8313 cityattorney@fayetteville-ar.gov July 19, 2017 Simmons Bank, as trustee Pine Bluff, Arkansas Stephens Inc. Fayetteville, Arkansas Kutak Rock LLP Little Rock, Arkansas 113 W. Mountain Street, Suite 302 Fayetteville, AR 72701-6083 Re: $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017 Ladies and Gentlemen: I am City Attorney for the City of Fayetteville, Arkansas (the "City') and have acted in that capacity in connection with the issuance and sale by the City of its $26,500,000 Library Improvement Bonds, Series 2017 (the "Bonds"), which Bonds are being sold pursuant to the terms of a Bond Purchase Agreement dated June 13, 2017 (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 Ordinance No. 5876 adopted by the City Council on May 17, 2016 (the "Election Ordinance"), Ordinance No. 5903 adopted by the City Council on September 20, 2016 (the "Bond Ordinance"), the Trust Indenture dated as of July 1, 2017, (the "Indenture"), by and between the City and Simmons Bank, as trustee (the "Trustee"), the Tax Regulatory Agreement dated July 19, 2017 (the "Tax Regulatory Agreement"), by and between the City and the Trustee, the Continuing Disclosure Agreement dated July 19, 2017 (the "Disclosure Agreement"), by and between the City and Simmons Bank, as dissemination agent (the "Dissemination Agent"), the Preliminary Official Statement dated June 5, 2017 (the "Preliminary Official Statement"), and the Official Statement dated June 13, 2017 (the "Official Statement") relating to the offering of the Bonds, and closing certificates of the City. Based on such review and such other considerations of law and fact as I believe to be relevant, I am of the opinion that: 1. The City is a duly organized and validly existing municipal corporation and City of the First Class, organized under the laws of the State of Arkansas, with full power and authority to adopt the Election Ordinance and the Bond Ordinance, to levy the Library Tax, 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 Election Ordinance and the Bond Ordinance have been duly adopted by the City by all action necessary under the Act and the laws and Constitution of the State of Arkansas, and each remains in full force and effect. 4. The Indenture, the 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 City enforceable in accordance with their terms. 6. The information in the Official Statement under the captions "THE PROJECT," "THE CITY," "THE PUBLIC LIBRARY BOARD OF TRUSTEES" 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. 7. 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 Library Tax, the Election Ordinance, the Bond 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 7. S. The adoption of the Election Ordinance and the Bond 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 2 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. 9. Based upon the examinations which I have made as Fayetteville City Attorney, nothing has come to my attention which would lead me to believe that the Official Statement (except for financial and statistical data contained or incorporated in the Official Statement, as to which no view is expressed) contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. I hereby consent to the references made to me in the Official Statement. Sincerely, KIT WILLIAMS Fayetteville City Attorney 3 DIRECTION TO WASHINGTON COUNTY TREASURER 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 direct and request the following: Until further written direction to you from the City, please remit all receipts relating to the 1.2 mill city-wide ad valorem tax levied to secure library improvement bonds pursuant to Ordinance No. 5904 of the City adopted September 20, 2016, to Simmons Bank, 501 S. Main Street, Pine Bluff, AR 71601, Attn: Glenda Dean. Alternatively, said receipts can be wired as follows: ABA# 082900432, Account # 10118174, Attn: LuJuana Jones, FFC: Fay Lib. This Certificate is executed and delivered in connection with the issuance of the City's $26,500,000 Library Improvement Bonds, Series 2017 (the "Bonds"). IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of July 19, 2017. DER K CITY OFF NETT LE, ARKANSAS .G F YE�fV/C( f;7U= �' y: Lio ��— o an, Mayor �0iiir 6 By:L - Sondra Smith, City Clerk 4825-3323-9883.1 TRUSTEE'S CERTIFICATE Simmons Bank, Pine Bluff, Arkansas, as trustee for $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017 (the "Bonds"), hereby certifies that: 1. Pursuant to the provisions of a Trust Indenture dated as of July 1, 2017 (the "Trust Indenture") each by and between the City of Fayetteville, Arkansas (the "City") and Simmons Bank, arrangements have been made for Simmons Bank to serve as trustee and paying agent (the "Trustee") with respect to the Bonds. The Trustee hereby accepts such appointment. 2. Pursuant to the provisions of the Trust Indenture and directions from the City, Glenda L. Dean, Vice President, has duly authenticated the initial Bonds in the aggregate principal amount of $26,500,000, being in the form of fourteen (14) typewritten registered bonds, numbered R17-1 through R17-14, inclusive. 3. Each person who, on behalf of the Trustee, authenticated the initial Bonds or executed the Trust Indenture, the Tax Regulatory Agreement dated as of July 19, 2017, or the Continuing Disclosure Agreement dated as of July 9, 2017, 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 M=7� Glenda L. Dean Vice President Roy Ferrell Senior Vice President 5. The Trustee is an Arkansas banking corporation duly organized, validly existing and in good standing under the laws of the State of Arkansas. The Trustee has all requisite power and authority to carry out its obligations as Trustee under the Trust Indenture. IN WITNESS WHEREOF, SIMMONS BANK has caused this certificate to be executed in its corporate name by an officer thereunto duly authorized. Dated: July 19, 2017 SIMMONS BANK Pine Bluff, Arkansas By: . QIZ-/— Name jZ—,C- Title: pjwveofnlf�V7sianl 4838-7986-8491.1 UNDERWRITER'S CERTIFICATE The undersigned officer of Stephens Inc., the Underwriter (defined below) for the $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017 (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) Structuring and Marketing. Stephens Inc. has served as 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) Sale of the Bonds. As of the date of this Certificate, for each Maturity of the Bonds, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed on Schedule A hereto. (3) Defined Terms. "Issuer" " means the City of Fayetteville, Arkansas. "Maturity" means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. "Public" means any person (including an individual, trust, estate, partnership, association, company or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this Certificate generally means any two or more persons who have greater than 50% common ownership, directly or indirectly. "Underwriter" means (i) any person that agrees pursuant to a written contract with the Issuer (or the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). (4) The Yield on the Bonds, as stated in Section 4.10(b) of the Tax Regulatory Agreement, calculated in accordance with the Regulations, including in particular Section 1.148(b)(3)(ii)(B) of the Regulations, is not less than 3.1027043%. For purposes of 4824-2916-8459.1 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. (5) The Bonds have a weighted average maturity, as stated in Section 2.2 of the Tax Regulatory Agreement, of 17.344 years. (6) To the best knowledge of the undersigned, the representations of the Issuer contained in the Tax Regulatory Agreement are true and correct. The representations set forth in this Certificate are limited to factual matters only. Nothing in this Certificate represents the interpretation of Stephens Inc. of any laws, including specifically Sections 103 and 148 of the Internal Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Regulatory Agreement and with respect to compliance with the federal income tax rules affecting the Bonds, and by Kutak Rock LLP, Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income of the recipients thereof for purposes of federal income taxation, the preparation of Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. IN WITNESS WHEREOF, the undersigned has set his hand as of the date set forth below. Dated: July 19, 2017 STEPHENS INC. By: Title: 2 4824-2916-8459.1 SCHEDULE A Pricing and Balance Report at Sale Date $26,500,000 City of Fayetteville, AR Library Improvement General Obligation Bonds Series 2017 Pricing Report ADW L TAKEDOWN MATURITY AMOUNT COUPON PRICE ( Pts ) 01/01/2018 560M 3.00% 0.90 3/8 (Approx. $ Price 100,940) 01/01/2019 530M 3.00% 1.10 3/8 (Approx. $ Price 102.725) 01/01/2020 545M 3.00% 1.25 1/2 (Approx. $ Price 104,209) 01/01/2021 565M 3.00% 1.40 112 (Approx. $ Price 105.370) 01/01./2022 580M 3.00% 1.55 3/4 (Approx. $ Price 106.211) 01/01/2023 600M 3.00% 1.70 3/4 (Approx. $ Price 106.738) 01/01/2024 615M 3.00% 1.90 3/4 (Approx. $ Price 106,647) 01/01/2025 635M 3.00% 2.10 3/4 (Approx. $ Price 106.176) 01/01/2026 655M 3.00% 2.30 3/4 (Approx. $ Price 105,347) 01/01/2027 675M 3.00% 2,45 3/4 (Approx. $ Price 104.613) 01/01/2032 3,800M 4.00% 3.03 3/4 (Approx. $ Price PTC 01/01/2027 107.917) 12.529 Avg Life 01/01/2037 4,635M 4.00% 3.33 3/4 (Approx. $ Price PTC 01/01/2027 105,392) 17.529 Avg Life CUSIP 31266WAA1. 31266WAB9 31266WAC7 31266WAD5 31266WAE3 31266WAFO 31266WAGB 31266WAH6 31266WAJ2 31.2.66WAK9 31266WAL7 31266WAM5 01/01./2042 5,570M 3.3750 3.46 1,00 31266WAN3 (Approx. $ Prise 98.603) 19.189 Avg Life 01/01/2047 6,535M 3.05% 3.05 1/2 31266WAP8 8.119 Avg Life CALL FEATURES; Optional call in 01/01/202*1 @ 100.00 3 4824-2916-8459.1 Balance Report Maturity Type.. . Cusip .. No. of Bonds Allotments. Baland - 01/01/2018 Bond '31266WAA1 560 560 0 01/01/2019 Bond 31266WAB9 530 530 0 01/01/2020 Bond 31266WAC7 545 545 0 01/01/2021 Bond 31266WAD5 565 565 0 01/01/2022 Bond .31266WAE3 580 580 0 01/01/2023 Bond .31266WAFO 600 490 110 01/01/2024 Bond 31266WAG8 615 460 1 155 01/01/2025 Bond 31266WAH6 635 635 0 01/01/2026 Bond 31266WAJ2' 655 300 355 01/01/2027 Bond 31266WAK9 675 275 400 01/01/2032 Bond 31266WAL7. 3,800 3,800 0 01/01/2037 Bond <31266WAM5 4,635 4,075 560 01/01/2042 Bond 31266WAN3 5,570 5,570 0 01/01/2047 Bond :31266WAP8' 6,535 6,535 0 Grand Totals 24920 *Hold for five business days or when 10% of the Bonds are sold to purchasers at or below the initial offering price, whichever is earlier. The above information accurately reflects the "issue price" and the "actual sales" of the Bonds on the Date of Sale. Appro� Date: 4824-2916-8459.1 M UNDERWRITER'S RECEIPT The undersigned, on behalf of Stephens Inc., as purchaser (the "Purchaser") of $26,500,000 City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017 (the "Bonds"), hereby acknowledges receipt of each and all of the Bonds, said Bonds being in the form of fourteen (14) typewritten fully registered bonds in the name of Cede & Co., as nominee of The Depository Trust Company, in authorized denominations, bearing interest and containing such other terms and provisions as set forth in that certain Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City of Fayetteville, Arkansas (the "City") and Simmons Bank, 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 June 13, 2017, 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: July 19, 2017 STEPHENS INC. By: Title: 4834-7754-2987.1 TRUSTEE'S RECEIPT AND CERTIFICATE AS TO APPLICATION OF FUNDS The undersigned, Simmons Bank, as trustee (the "Trustee") under a Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between City of Fayetteville, Arkansas (the "City") and the Trustee, with respect to the City's $26,500,000 Library Improvement Bonds, Series 2017 (the "Bonds"), hereby certifies that: 1. The Trustee has received this date, on behalf of the City, from Stephens Inc. (the "Underwriter"), $27,003,647.40, that being the agreed purchase price of the Bonds, pursuant to the Bond Purchase Agreement dated June 13, 2017, between the City and the Underwriter. 2. The total proceeds of the sale of the Bonds (i.e., $27,003,647.40) have been deposited or will be applied, in accordance with the written directions of the City, as follows: (i) $98,647.40 shall be deposited in the Costs of Issuance Fund for payment of Costs of Issuance as directed by a Certificate of the City; and (ii) The balance of said proceeds, in the amount of $26,905,000.00, shall be deposited in the Project Fund. Dated: July 19, 2017. SIMMONS BANK, as Trustee By:tlz zj��azj Title: Vice resident & arparate Trust Officer 4812-2900-2827.1 05/18/1999 10:47 5015758273 CITY OFFAYETTEVILLE PAGE 02 11-12-98 02:2N FROM DTC HERWRITING PO-' c� Blanket lvsuer. Letter of Representations Cro be C=p)a�, by i3suM City of Fayetteville, AR [Namd of lmuel NcZi2� 12, 1998 IDM) - went UUaervniting Department — Eligibility The Depoza=y Trust COMPAMY 55 Water Shvct; wth F1wr New Yark, NY 10041- 0099 Ladies and Gendcn= This ktter sub forth our understanding with respect to all Imies (the 'Securities') that Issuer shall MT2el he mmia eligible for &-pcsit b> The Depository Trust Company (-DTC-). To induce MC to accept the Securities as eEgA for deposit at DTC, =d to 2a in =camjw= with D=s Ruks with rtspect ta the Securities, Lwmr repr== to DTC that I== will c=ply v&h the mquir=eats stated i m DMs Operalkmal Arzaagonx-nts, as they may be anm=cW Om tbne tn time. Notes 5&6"c A =nbd= itatemenu that DTC beBavvu =, t�,- mat bcd of e&C book. -ewntrl czfmmuMm &Safh� 6rmo OM, ,and certain mutes. THE DEPOSITORY TRUST COMPANY Very tr* yo=, MMM-WAMMIUM"N Faye teville, AR 72707 (57r- (seft) 501-575-8330 (Pbona SCH"r D ULE A SA-NUIE OFFEUNG DOCUMEN T "NG'JAGL DESCRIBING ROOK-ENMY-ON-LY ISSITriNCE ( pared by i]TC,--b"-2a-ted m.ota-i�] may be gTlirable a,,Iy to cen4ain'.Ssnes) I. Tba D "7 Tr= C7ulpany (-DTC-), N-z, YA. NY, will act os secrrritiss dtPwsi— Sar the Securities (the -5`eMitie5'), The SCMAtiea will be Lz, i as firnrreg4;t8red sea�rities r"g reM in the rrr uae of Cede c'c Co. (OTC's parcrershtp nominee), Chne f `TuSe=7tY cerfs$cate will be issued fi7r (eUl issue ofj the Sea=:ties, (each) in the aggrega2e prrndpal amannt of anon issue, and uM be dcpoRited witb DTC. [If, however, ibe aggreVe prindual amount of jany) issue exceeds UM wan cert3$cate will be ?tnicd 5►ith respect to r S200 miiliem of PtinC;;nal apt end an add tos cer a will be Lssved with m9ect to any: Wring pri=i 4 amc=t of such issue.] 2, DTC is a �d-ptupcme ausz 00=Tamy c-:Zzaio,-�d under the New York Bajm ng Jaw, 1-baalcng won- withim the mc=dug of the New Yozk Banking Law, a member of the Federal ?,Mervt S' a Clft3�ng - within the me=ino of the New York Un3farm C=mercW Code, and a - -Stacy- registered prasuaat to tl2e pmvisiaw of Scciicn I7A of the Securities Fxchm�t Ad of IgU. DTC hcl& sectuib s that'n part cVzats (-?artic'P=tsI deposit with DTC. DM alm c� the settleznemt amcmLg ?mar s of reeslxf6es transactions, such as trauslrrs and pledges, in dcpatited securities tbrouo electronic computerized book -entry cbanges in Partldpanti' accounts, thereby eliuifnating the need for physics! movement of securities certiiicatrs Direct Pcipaut3 include securftles bmkars and dealers, .,�. banla, tstut companies, clearing cotporaisons, and ctitaEu ether arg+nizations. DTC is vwaod by s number of its Direct Participants and by the New York Stock the Amerxsn Stock Eahange, Inc, cad the National boa c f Seoiy%es Demers, Inc. Accm to tba DTC rystam t: 460 available to othe7a such as aetauttte: bro3oes: sud dealers, ] , and U-4st =UP='ea that c3ear throw or maintain a custodial reictionAT with a Dwod Pit �°T �� �%` (�� �'), The Rules appli�le to DTC and its Pests s and Emhazrge c �. Pwrliaxa of Securities under the DTC syst= must be nub by or tlumugh Direct Psrtic tc, which Wip receive a credit for the 5ec=ities on DTC'e re or(31. The ownership nntmr of each actual p =Lzszr of each S=U ty ("$eaeBcisl Owned') is in turn to be recorded on the Direct =,a PArdc,'P=tx' recarb. Bme£icw 0-nen will not receive WVnen can rmation from DTC of their Puchus. but Bencficsel owmen are Opected to receive written oonfirmh.s pm,4di deans of the transtiCUM as well as pariocie sraieme= of their 60kIbW, faun the D4vct ar Indirect Parbcipamt through whicb the BenacW Owner entered into the tz=mcdca. Tr=sfms of Sccur}ttes are tb be acwmp6hed by ezzt7= made on the books of the Beac$ctal Ow�rs, $eae�C3a1 � �S � behalf of Ownars wr1) Wt r=c ve certtacatea raprewmt ng their awnorship intnreets In Sec vibes' =Cpt M the event tluu u-&e of the book -entry systt;m i'o7 the Sxutfties is disaantinued 4- TO �t n faze all Searritle3 depomted by Pests with DTC =r regisbej d in tlee name of DT`C3 partnershfP r xe, Cede & Co. The deposit of Securities with DTC and their �n in the name of Cede & Ca, effort no ehange is bene$dal ownership. DTC hen no of the ac v 4 Reae6cW Owners of tare Socmit , iDTUT reawag reflect only the identity of the Direct partdpamts to whose accot t such Secuaties are credte'CL whichor Beac$rsal Owncra. The P y may eat be rice behalf of thou s Tama r respoasihle far keeping axouat of t?lcir boldiv on mp-m- 5. Conveyance of notices and other communicadans by DTC to direct Park ;cane, by DL�et Part=dpartts to lndirect Pamcip=ts, and by Direct Parbc9rants and ln&tct Partidpanb to Beneficial Owners will be governed by arrangements among them, subtect to any s:atutOD. or reg-Lxlatory :=gLuienrents as ,: ay be 1n teC'. &Om lime to tn-w. j$. Redempdm a t ces shall be aer:t to Cxae & Co. if Less tb= all of t ;c Securities µ;tin an issae are being redeerrmd. DTC's practice is to determine by lot the amount of the interest of each Direct Pardctpant in =h Issue to be redeemed ] 7. Neither DTC nar Cede & Co. will consent or vate with respect to Se =tins. Under its usual psacsdrres, DTC asks an Omznb s Psary to the Issues- as soon as posshle after the record date. The 0m11113cu Proxy znigas Cede & Co.s cca=ttag or vadng rigs is to ex= Direct Pwtkipautz to why fcc=m the Sec Mines art credited an the reocsd cute (k1e atY.fied in a listing attached w the Cmm'bus Prnzy), S. Pnndpel and tatenst payments on tit Se coritias wlII be made t4 DTC. DTC"s practice is to credit D-Ixl Purticlj�' accmmts on payable date in acoord== with then- r�cd-m holdings s}sowtt on cds DTC's zborunless DTC has reAwn to haw -re that it will not raceme payment on pa)o b a date. Paysaests by Pat� to Beme$cial Owner will be ga erred by warding fuss s ens =d cau=mazy practinss, as is the case with securitks hdd for the a= arts of cu =e= in bearer form ar ; eostmed in 'street name," and will be the respaas&l$y a sttcb Partfdpsmt and not of DTC, t3 c- h.g=t, or the Issuas; subject to any statutory or regulatozy requiztemeats as may be in effect from time to time. Payn`= cd Principe] and lntraEst to DTC is the = Y of the Issuer cT the Agm disbunment of snzh payments to Duvet Putidp=h shall be the respous Wity of DTC, and disbtaaar►ent of n=h payments to the BeuedcW Owners shall be the saspOWNiity ed Direct and Indirect: Pat'ticioants. (9. A Benc6c:W Owner shall give notice to elect to have its Sectuities pursed CT t=6=ncL through ts Pwtic--� to the (T=d=/Rcmaricattngj Aga at, and shZ effect de)y of such Sa-.� by --.n SWS the Daect P=ticipaut to transfer the Participant's Lnteieat is the Secusftics, an DTM zeoartls, to the gl Agt tt: The reTArsment for physical dehveiy of Sexwizfes m omacctzn with 2 demand for pcut1ase or a msadatcuy pmchasc will be deemed sati� wben the o htP rigbts m tbz Seams are zx=df Trod by Dh,.,t Puts oa DTCs re=&] I40. DTC may disaonthwe p� Its servk= es securities &pos" with respect to the Securer at =y ti= by V/mg ruble notice to the 1=uer or t3ze Agent. Under such cu=utances, in t3 c event that a swxessOr Secvritiet depo4toTy is not obtained.. Socunty ceztt&ates are rsq=,ed to be printed and dehvereci. 11. The L—ax may decsda to disooaQtinue use of the system of book e q =asfe:s droagh DTC (or a svccc=r soatdties &-Pwittny), In Thar eve Sv=ity cwtlHc2t= will be priaiui and slivered.. M The mom in this section csonmraing DTC and DTC's book enty system has been obtained from souTc= that the Issuer belieyes to be reh1lee, but the issuer tzt� no responsibility for the aoct a . 500 North Akard Street Lincoln Plaza, Suite 3200 Dallas, TX 75201 tel(214)871.1400 reference no.: 1484131 May 26, 2017 City of Fayetteville 113 W. Mountain Fayetteville, AR 72701 Attention: Mr. Paul Becker, Finance & Internal Services Director Re: VS$25,690,000 City of Fayetteville, Arkansas, Library Improvement Bonds, Series 2017, dated: Date of delivery, due: February 01, 2047 Dear Mr. Becker: Pursuant to your request for an S&P Global Ratings rating on the above -referenced obligations, S&P Global Ratings has assigned a rating of "A". S&P Global Ratings views the outlook for this rating as stable. A copy of the rationale supporting the rating is enclosed. This letter constitutes S&P Global Ratings' permission for you to disseminate the above -assigned ratings to interested parties in accordance with applicable laws and regulations. However, permission for such dissemination (other than to professional advisors bound by appropriate confidentiality arrangements) will become effective only after we have released the rating on standardandpoors.com. Any dissemination on any Website by you or your agents shall include the full analysis for the rating, including any updates, where applicable. To maintain the rating, S&P Global Ratings must receive all relevant financial and other information, including notice of material changes to financial and other information provided to us and in relevant documents, as soon as such information is available. Relevant financial and other information includes, but is not limited to, information about direct bank loans and debt and debt - like instruments issued to, or entered into with, financial institutions, insurance companies and/or other entities, whether or not disclosure of such information would be required under S.E.C. Rule 15c2-12. 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No person is intended as a third party beneficiary of any credit rating engagement or of a credit rating when issued. PF Ratings U.S. (4/28/16) S&P Globat Ratings Ratings0irecto Fayetteville, Arkansas; Miscellaneous Tax Primary Credit Analyst: Stephen Doyle, Dallas (1) 214-765-5886; stephen.doyle@spglobal.com Secondary Contact: Jennifer K Garza (Mann), Dallas (1) 214-871-1422; jennifer.garza@spglobal.com Rationale Outlook WWW.STANDARDANDPOORS.COM/RATINGSDIRECT MAY 26, 2017 1 1857660 1 302395558 US$25.69 mil library imp bnds ser 2017 due 02/01/2047 Long Term Rating A/Stable New Rationale S&P Global Ratings assigned its 'A' long-term rating to Fayetteville, Ark.'s series 2017 limited -tax general obligation library construction bonds. The outlook is stable. The rating reflects our opinion of the city's: • Growing property tax base which has demonstrated overall stability within the past 10 years; • Projected adequate maximum annual debt service (MADS) coverage of 1.20x for 2017; and • Bond provisions that include an additional bonds test of 1.20x and a closed flow of funds with mandatory redemption feature. The bonds constitute limited tax obligations of the city and are secured by revenue from a limited 1.2-mill ad valorem tax pledged on all taxable property within the city (library tax), along with the city's allocable portion of the 0.5% statewide sales and use tax (special tax) received by the city from the state of Arkansas under Amendment 79 to the Arkansas Constitution. The library tax is currently levied at the approved 1.2 mills and will expire once all outstanding bonds are paid in full. We rate this issue under our special tax criteria given the limited nature of the pledged security and the governing bond covenants. Officials plan to use bond proceeds to expand and remodel the city's public library. Fayetteville has a population estimate of 84,088, and is located in northwest Arkansas, approximately 185 miles from Little Rock. It is the seat of Washington County and is the third largest city in the state. The city is part of the Fayetteville -Springdale -Rogers metropolitan statistical area (MSA), which provides residents with access to employment opportunities throughout the region. We consider the city's per capita effective buying income to be good at 94% of the national level. The city's market value per capita is roughly $88,000, which we consider very strong. The local economy continues to expand with both residential and commercial development currently underway. Additionally, with the expansion of an interstate in the area, development is expected to continue if not pick up in pace. Building permits have also continued to steadily increase in recent years, indicating healthy tax base growth for the city. The presence of the University of Arkansas provides additional stability to the local economy. Retail sales per capita is strong, in our opinion, at 116% of the national level and reflects the city's role as the principle city within the MSA. The city does not officially report its leading taxpayers but indicates that there is no concentration with the leading taxpayers, which consist of essential home goods stores, retail outlets, and some multifamily housing facilities. All property not assessed by the Tax Division of the Arkansas Public Services Commission is assessed by each county's elected assessor. Pursuant to Amendment 79, each county must appraise all market value real estate at its full WWW.STANDARDANDPOORS.COM/RATINGSDIRECT MAY 26, 2017 2 1857660 1302395558 Summary: Fayetteville, Arkansas; Miscellaneous Tax and fair market value at least once every five years. Increases in assessed value (AV) following a reappraisal are limited to 5% on residential property and 10% on commercial property. AV growth for the city has remained fairly stable over the past decade, averaging 3% growth annually and increasing by over 30% during this period. As of fiscal 2017, total assessed value is $1.49 billion. Based on an average collection rate of 97.846% and 0% AV growth, collection of the pledged revenues will provide 1.20x MADS coverage, which we consider adequate. The ongoing commercial and residential developments will likely increase pledged revenues and thus MADS coverage. For fiscal 2017, projected collections of $1.75 million provide coverage of 1.20x MADS of $1.46 million, which occurs in 2047. However, the mandatory redemption feature is expected to redeem a portion of this final 2047 payment beginning in 2018, which will reduce MADS almost immediately. With fairly level annual debt service costs though, MADS coverage will remain fairly similar from year to year, assuming no growth in pledged revenues. With the tax base growing by an average of 3% annually over the past decade, we expect pledged revenues to increase each year, improving MADS coverage. We believe MADS coverage will remain adequate during the outlook horizon. We consider the bond provisions to be adequate. The bonds are subject to mandatory early redemption, which requires any surplus pledged revenue not used for the current year's debt service to be used to redeem the bonds' outstanding maturities, starting with the longest dated maturity. The bonds have a final maturity date in 2047; however, assuming no growth in pledged revenues, management projects the early redemption feature will likely allow the city to pay off the bonds by 2033. Future parity debt, if authorized and approved by voters in addition to the current $26.5 authorization, may be issued as long as pledged revenues, utilizing the pledged revenue collections from the previous 12 months, provide at least 120% of MADS including the additional new money debt service. Outlook The stable outlook reflects S&P Global Ratings' opinion that Fayetteville's property tax base will likely remain stable, resulting in stable or improving pledged revenues. In addition, we expect officials will likely pay off the bonds early, due to the mandatory prepayment feature. Therefore, we do not expect to change the rating within the two-year outlook period. Upside scenario If MAIDS coverage improves to levels commensurate with a higher rating while the local economy continues to expand and diversify, assuming all other rating factors remain stable or improve, we could raise the rating. Downside scenario If MADS coverage worsens, as a result of tax base declines or additional debt issuance, to a level no longer commensurate with the current rating level, we could lower the rating. Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is WWW.STANDARDANDPOORS.COM/RATINGSDIRECT MAY 26, 2017 3 1857660 ] 302395558 Summary: Fayetteville, Arkansas; Miscellaneous Tax available to subscribers of RatingsDirect at www.globalcreditportal.com. 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WWW.STANDARDANDPOORS.COM/RATINGSDIRECT MAY 26, 2017 5 1857660 1 302395558 FORM OF REQUISITION City of Fayetteville, Arkansas Library Improvement Bonds, Series 2017 Date: Requisition No.: Project Name: _ TO: Simmons Bank, as Trustee Pursuant to the provisions of Section 502 of the Trust Indenture dated as of July 1, 2017 (the "Indenture"), by and between the City of Fayetteville, Arkansas (the "City") and you, as trustee, you are authorized to make the following described payment from the Project Fund [as a reimbursement to the City for payments previously made to the Payee named below] [directly to the Payee named below]: Name and Address of Payee: Amount of Payment: $ General Classification of the Expenditures: The undersigned hereby certifies that he is authorized to deliver this Requisition on behalf of the City. The amount requested hereunder has not been the basis for any previous Requisition by the City and is justly due and owing to the person(s) named herein as a proper payment or reimbursement of a Project Cost. No Event of Default exists under the Indenture and, to the knowledge of the undersigned, no event has occurred and continues which with notice or lapse of time or both would constitute an Event of Default under the Indenture. CITY OF FAYETTEVILLE, ARKANSAS Authorized Representative 4846-8373-4859.1