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190052004005794 81/28/2884 83:44:49 PH • . Filed 8 Recorded in Official Records of CAROLYN STALEY PULASKI COUNTY CIRCUIT /COUNTY CLERK ORDINANCE NO. 19,005 Fees $77.88 AN ORDINANCE AUTHORIZING THE ISSUANCE OF LIMITED TAX GENERAL OBLIGATION CAPITAL IMPROVEMENT BONDS; PLEDGING TAX REVENUES SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS; PRESCRIBING OTHER MATTERS RELATING THERETO; AND DECLARING AN EMERGENCY. WHEREAS, by Ordinance No. 18,941 duly adopted by the Board of Directors on September 30, 2003 ( "Ordinance No. 18,941"), there was submitted to the qualified electors of the City of Little Rock, Arkansas (the "City ") , the questions of the issuance of capital improvement bonds in the following maximum amounts for the following purposes: $27,000,000 to finance street improvements, as more particularly described in Ordinance No. 18,941 (the "Street Improvements "); $4,515,000 to finance facilities for drainage improvements, as more particularly described in Ordinance No. 18,941 (the "Drainage Improvements "); $14,965,000 to finance park and recreational improvements, as more specifically described in Ordinance No. 18,941 (the "Park and Recreational Improvements "); $985,000 to finance police department improvements, as more specifically described in Ordinance No. 18,941 (the "Police Department Improvements "); $12,135,000 to finance fire department improvements, as more specifically described in Ordinance No. 18,941 (the "Fire Department Improvements "); $11,865,000 to finance police, fire and emergency communication improvements, as more specifically described in Ordinance No. 18,941 (the "Police, Fire and Emergency Communications Improvements "); $1,145,000 to finance Robinson and Statehouse Convention Centers Improvements, as more specifically described in Ordinance No. 18,941 (the "Robinson and Statehouse Convention Centers Improvements "); $1,215,000 to finance school area pedestrian safety improvements, as more specifically described in Ordinance No. 18,941 (the "School Area Pedestrian Safety Improvements "); and $1,360,000 to finance animal services improvements, as more specifically described in Ordinance No. 18,941 (the "Animal Services Improvements "); and WHEREAS, due notice of the election was given as required by law and the election was duly held on the 4th day of November, 2003, at which election the electors approved the issuance of capital improvement bonds for each of said purposes; and WHEREAS, the aggregate maximum amount of bonds approved was $75,185,000; and WHEREAS, the results of the election were announced by the Mayor by a Proclamation duly published as required by law in a newspaper of bona fide circulation in the City; and WHEREAS, the City has issued its Limited Tax General Obligation Refunding Bonds, Series 2001 (the 112001 Bonds ") of which $7,305,000 in principal amount are outstanding and unpaid and for which an ad valorem tax on taxable property located within the City at the rate of 3.3 mills on the dollar of the assessed valuation (the 112001 Bond Tax ") is being levied and pledged; and WHEREAS, pursuant to Ordinance No. 18,991, adopted November 18, 2003, the City has fixed, established and levied an ad valorem tax on taxable property located within the City at the rate of 3.3 mills on the dollar of assessed valuation (the "Special Tax ") which will, subject to rollback as provided in Amendment No. 59 to the Arkansas Constitution ( "Amendment No. 59 "), constitute a continuing annual tax to be collected in 2004 and each year thereafter so long as necessary to pay the principal of, interest on, and fees of the bond registrar and paying agent in connection with the bonds herein authorized; and WHEREAS, the Board of Directors has determined to proceed with the financing of the nine purposes approved at the election and to issue $70,635,000 in aggregate principal amount of bonds (the "Bonds ") , and has made arrangements for the sale of the Bonds to Crews & Associates, Inc., Morgan Keegan & Company, Inc. and Stephens Inc. (the "Underwriters "), at a price of $71,404,219.90 (principal amount less $512,103.75 of Underwriters' discount plus net original issue premium of $1,281,323.65) plus accrued interest (the "Purchase Price "), pursuant to a Bond Purchase Agreement between the Underwriters and the City (the "Bond Purchase K 0 0 Agreement ") , which has been exhibited to and is before the Board of Directors at the meeting at which this Ordinance is adopted; and WHEREAS, the Preliminary Official Statement dated December 5, 2003, offering the Bonds for sale (the "Preliminary Official Statement "), has been exhibited to and is before the Board of Directors at the meeting at which this Ordinance is adopted; and WHEREAS, the Continuing Disclosure Agreement (the "Disclosure Agreement "), providing for the ongoing disclosure obligations of the City with respect to the Bonds, has been exhibited to and is before the Board of Directors at the meeting at which this Ordinance is adopted; NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY OF LITTLE ROCK, ARKANSAS: Section 1. The Bonds are hereby sold to the Underwriters at the purchase price specified above. The Bond Purchase Agreement, in substantially the form submitted to this meeting, is approved and confirmed. The Mayor is hereby authorized and directed to execute and deliver the Bond Purchase Agreement for and on behalf of the City and to take all action required on the part of the City to fulfill its obligations under the Bond Purchase Agreement. Section 2. The Preliminary Official Statement is hereby approved and the previous use of the Preliminary Official Statement by the Underwriters in connection with the sale of the Bonds is in all respects authorized, approved and confirmed. The Mayor is hereby authorized and directed, for and on behalf of the City, to execute a final official statement and deliver the same to the Underwriters for use in connection with the sale of the Bonds as set forth in the Bond Purchase Agreement. Section 3. The Disclosure Agreement, in substantially the form submitted to this meeting, is approved, and the Mayor is hereby authorized and directed to execute and deliver the Disclosure Agreement for and on behalf of the City. The Mayor and other officials of the City are authorized and directed to take all action required on the part of the City to fulfill the City's obligations under the Disclosure Agreement. Section 4. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment No. 62 to the Constitution of the State of Arkansas, and Title 14, Chapter 164, Subchapter 3 of the Arkansas Code of 1987 Annotated, the Bonds are hereby authorized and ordered issued in the total principal amount of $70,635,000. The proceeds of the Bonds shall be used for the purposes specified in the recitals of this 0 0 Ordinance, to fund capitalized interest and to pay costs of issuing and insuring the Bonds. The principal amount of the Bonds is allocated among the purposes as follows: (a) $25,454,192.40 for the Street Improvements; (b) $4,217,626.09 for the Drainage Improvements; (c) $14,127,000.00 for the Park and Recreational Improvements; (d) $870,141.30 for the Police Department Improvements; (e) $11,439,798.91 for the Fire Department Improvements; (f) $11,183,875.00 for the Police, Fire and Emergency Communications Improvements; (g) $1,023,695.65 for the Robinson and Statehouse Convention Centers Improvements; (h) $1,090,235.87 for the School Area Pedestrian Safety Improvements; and (i) $1,228,434.78 for the Animal Services Improvements. The Bonds shall be dated January 15, 2004, and shall be designated "City of Little Rock, Arkansas Limited Tax General Obligation Capital Improvement Bonds, Series 2004." Interest shall be payable semiannually on April 1 and October 1 of each year commencing October 1, 2004. The Bonds shall be fully registered bonds in the denomination of $5,000 or an integral multiple thereof. Principal shall be payable to the registered owners thereof upon presentation at the corporate trust office of the paying agent. Payment of each installment of interest shall be made at the time and in the manner specified in the bond form in Section 5. The Bonds shall be numbered from R -1 upward in order of issuance and shall mature (or become subject to mandatory sinking fund redemption) on April 1 of each year and bear interest as follows: Maturity Date Principal Interest (April 1) Amount Rate 2005 $3,510,000 4.00% 2006 3,655,000 4.00 2007 3,805,000 4.00 2008 3,960,000 4.00 2009 4,120,000 4.00 2010 4,290,000 4.00 2011 4,465,000 4.00 2012 4,645,000 4.00 2013 4,830,000 3.75 2014 5,020,000 4.00 2015 5,225,000 4.00 2016 5,440,000 4.00 2017* 5,660,000 3.95 2018* 5,885,000 3.95 2019 6,125,000 3.95 *Mandatory sinking fund redemption date. 4 0 0 Payment of the scheduled principal of and interest on the Bonds, as due (by stated maturity or by scheduled mandatory redemption) is guaranteed by Financial Security Assurance, Inc. (the "Insurer ") pursuant to a municipal bond insurance policy (the "Insurance Policy "), as set forth in the Insurance Policy. Section 5. The Bonds shall be executed on behalf of the City by the Mayor and the City Clerk by their manual or facsimile signatures and the corporate seal of the City, or a facsimile thereof, shall be imprinted or reproduced on each bond. The Bonds shall be in substantially the following form: (Face of Bond) REGISTERED REGISTERED No. UNITED STATES OF AMERICA STATE OF ARKANSAS COUNTY OF PULASKI CITY OF LITTLE ROCK LIMITED TAX GENERAL OBLIGATION CAPITAL IMPROVEMENT BOND SERIES 2004 Dated Date: January Maturity Date: April Principal Amount: _ Registered Owner: 15, 2004 1, F.Were m Interest Rate: °s CUSIP: For value received, the City of Little Rock, County of Pulaski, State of Arkansas (the "City "), promises to pay to the registered owner shown above the Principal Amount shown above on the Maturity Date identified above and to pay interest (computed on the basis of a 360 -day year of twelve 30 -day months) on such Principal Amount from the interest commencement date specified below until paid at the Interest Rate per annum set forth above. Interest is payable on October 1, 2004, and on each April 1 and October 1 thereafter. Principal of this bond is payable to the registered owner, in lawful money of the United States of America, upon presentation when due at the corporate trust office of Regions Bank, the bond registrar and paying agent, in Little Rock, Arkansas. Payment of each installment of interest shall be made to the person in whose name this bond is registered on the registration books of the City maintained by the bond registrar at the end of the fifteenth day of the month (whether or not a 61 • 0. business day) next preceding each interest payment date (the "Record Date ") , irrespective of any transfer or exchange of this bond subsequent to such Record Date and prior to such interest payment date. Such interest payments shall be by check or draft drawn on the paying agent and mailed to such registered owner at the address appearing on such registration books. In any case where the date of maturity of interest on or principal of this bond or the date fixed for redemption of this bond shall be a Saturday or Sunday or shall be in the State of Arkansas a legal holiday or a day on which banking institutions are authorized by law to close, then payment of interest or principal need not be made on such date but may be made on the next succeeding business day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after the date of maturity or date fixed for redemption. This bond shall bear interest from the interest payment date next preceding the date on which it is authenticated unless it is authenticated on an interest payment date, in which event it shall bear interest from such date, or unless it is authenticated during the period from the Record Date to the next interest payment date, in which case it shall bear interest from such interest payment date, or unless it is authenticated prior to the first interest payment date, in which event it shall bear interest from the Dated Date shown above, or unless at the time of authentication hereof interest is in default hereon, in which event it shall bear interest from the date to which interest has been paid. Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ( "DTC"), to the bond registrar 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 an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is required 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. This bond is issued under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 62 to the Arkansas Constitution and Title 14, Chapter 164, Subchapter 3 of the Arkansas Code of 1987 Annotated. It shall not be valid unless the Certificate of Authentication shall have been signed by the bond registrar. N C This bond is one of designated "Limited Tax General Bonds, Series 2004" (the "Bonds ") of $70,635,000. 0 an issue of bonds of the City Obligation Capital Improvement in the aggregate principal amount The Bonds are limited tax general obligations of the City, payable from the proceeds of a continuing annual tax of 3.3 mills on the dollar of the assessed valuation of the taxable real and personal property in the City, subject to rollback as provided in Amendment No. 59 to the Arkansas Constitution (the "Special Tax ") , including penalties and interest payable with respect thereto and all payments received by the City from the State of Arkansas in lieu thereof under Amendment No. 79 to the Arkansas Constitution (the "Special Tax Collections "), levied by the Board of Directors under the authority of Amendment No. 62 to the Constitution of the State of Arkansas. The City hereby pledges the Special Tax Collections for the equal and ratable payment of the Bonds. The Special Tax shall be collected with the property taxes payable in 2004 and continuing annually thereafter until all of the Bonds and interest thereon have been paid in full or deemed paid in accordance with the provisions of Ordinance No. 19,005 (the "Authorizing Ordinance "). The Bonds are not secured by any lien on or security interest in any physical properties. The Bonds are issuable only in the form of fully registered bonds in denominations of $5,000 or an integral multiple thereof. The City, the bond registrar, and the paying agent may deem and treat the registered owner hereof as the absolute owner of this bond for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes, and shall not be affected by any notice to the contrary. In the event any Bond is mutilated, lost, or destroyed, the City shall, if not then prohibited by law, execute and the bond registrar shall authenticate and deliver to the registered owner a new Bond of like tenor and effect in substitution for the mutilated, lost, or destroyed Bond. The registered owner shall be required to surrender such mutilated Bond or to establish, to the satisfaction of the bond registrar, the fact of loss or destruction, to pay the charges of the bond registrar for authenticating the substitute Bond, and to indemnify the City and the bond registrar against loss resulting from issuance of the substitute Bond. This bond is transferable, in whole or in part, only upon delivery to the bond registrar of this bond, accompanied by a written instrument of transfer in substantially the form endorsed hereon, duly executed by the registered owner or his attorney -in- 7 0 0 fact or legal representative. Upon such transfer, the bond registrar shall enter the transfer of ownership in the registration books and shall authenticate and deliver in the name or names of the new registered owner or owners a new fully registered bond or bonds of authorized denominations of the same maturity and interest rate for the aggregate principal amount of the Bond transferred at the earliest practicable time. There shall be no charge to the transferor or transferee for any transfer, except an amount or amounts sufficient to reimburse the City and the bond registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer. The City and the bond registrar shall not be required to transfer any Bond which has been called for redemption in whole or in part. The Bonds are subject to extraordinary, optional and mandatory,sinking fund redemption prior to maturity as follows: (1) The Bonds shall be redeemed by the City from proceeds of the Bonds not needed for the intended purposes on any interest payment date, in whole or in part, in inverse order of maturity (and by lot within a maturity in such manner as the paying agent or securities depository may determine) at a redemption price equal to the principal amount being redeemed plus accrued interest to the redemption date. (2) The Bonds shall be redeemed from Surplus Tax Collections (hereinafter defined) on each April 1, in inverse order of maturity (and by lot within a maturity in such manner as the paying agent or securities depository may determine), in whole or in part, at a redemption price equal to the principal amount being redeemed plus accrued interest to the redemption date. Surplus Tax Collections are the Special Tax Collections remaining on February 20 of each year after the City makes provision for (a) payment of the interest on the Bonds due on the next two interest payment dates, (b) payment of the principal of the Bonds on the next April 1, (c) payment of fees of the bond registrar and paying agent when due and (d) payment of any arbitrage rebate due the United States. (3) The Bonds may be redeemed at the option of the City on and after April 1, 2014, from funds from any source, in whole at any time or in part on any interest payment date, in inverse order of maturity (and by lot within a maturity in such manner as the paying agent or securities depository may determine) at a redemption price equal to the principal amount being redeemed plus accrued interest to the redemption date. (4) To the extent not previously redeemed, the Bonds maturing April 1, 2019 are subject to mandatory sinking fund redemption by lot in such manner as the paying agent or securities depository may determine, on April 1 in the years and in the E] E 0 amounts set forth below, at a redemption price equal to the principal amount being redeemed plus accrued interest to the date of redemption: Bonds Maturing April 1, 2019 Year Principal Amounts 2017 2018 2019 (maturity) $5,660,000 5,885,000 6,125,000 The provisions for mandatory sinking fund redemption of the Bonds are subject to the provisions of the Authorizing Ordinance which permit the City to receive credit for Bonds previously redeemed or for Bonds acquired by the City and surrendered to the bond registrar. (5) Bonds of denominations greater than $5,000 may be redeemed partially in the amount of $5,000 or any integral multiple thereof. (6) Notice of redemption identifying the Bonds or portions thereof to be redeemed shall be given by the paying agent, not less than thirty nor more than sixty days prior to the date fixed for redemption, by mailing a copy of the redemption notice by first class mail, postage prepaid, to all registered owners of Bonds to be redeemed. Failure to mail an appropriate notice or any such notice to one or more registered owners of Bonds to be redeemed shall not affect the validity of the proceedings for redemption of other Bonds as to which notice of redemption is duly given and in proper and timely fashion. All such Bonds or portions thereof thus called for redemption shall cease to bear interest on and after the date fixed for redemption, provided funds for their redemption are on deposit with the paying agent at that time. With respect to notice of redemption of the Bonds, unless moneys sufficient to pay the principal of and interest on the Bonds to be redeemed shall have been received by the paying agent prior to the giving of such notice, such notice shall state that such redemption shall be conditional upon the receipt of such moneys by the paying agent on or prior to the date fixed for such redemption. If such moneys shall not have been so received, such notice shall be of no force and effect, the City shall not redeem such Bonds and the paying agent shall give notice, in the manner in which the notice of redemption was given, that such moneys were not so received. 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 this bond have existed, have happened and have been performed in due time, form N 0 0 and manner as required by law; that the indebtedness represented by this bond and the issue of which it forms a part does not exceed any constitutional or statutory limitation; and that a tax sufficient to pay the Bonds has been duly levied in accordance with Amendment No. 62 to the Constitution of the State of Arkansas and made payable annually until all of the Bonds and interest thereon have been fully paid and discharged. IN WITNESS WHEREOF, the City has caused this bond to be executed by its Mayor and City Clerk, thereunto duly authorized, and its corporate seal to be impressed hereon all as of the Dated Date shown above. u'.•GI . y.; ;t -OF -Y Gov.. X14 "''�•, s CITY OF LITTLE ROCK, ARKANSAS [A Statement of Insurance provided by the Insurer shall be placed on the Bonds.] CERTIFICATE OF AUTHENTICATION This bond is one of the bonds described in the within mentioned Ordinance and is one of the Limited Tax General Obligation Capital Improvement Bonds, Series 2004, of the City of Little Rock, Arkansas. Date of Authentication: REGIONS BANK Bond Registrar By: Authorized Officer (Form of Assignment) ASSIGNMENT FOR VALUE RECEIVED, ( "Transferor "), hereby sells, assigns and transfers unto , the within 10 LJ 0 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: Transferor GUARANTEED BY: NOTICE: Signature(s) must be guaranteed by a member of or participant in the Securities Transfer Agents Medallion Program (STAMP) , or in another signature guaranty program recognized by the Trustee. Section 6. For the prompt payment of the Bonds with interest, the City pledges collections of the Special Tax (levied at the rate of 3.3 mills, subject to rollback as provided in Amendment No. 59 to the Arkansas Constitution) that it receives, including penalties and interest payable with respect thereto and all payments received by the City from the State of Arkansas in lieu thereof under Amendment No. 79 to the Arkansas Constitution (the "Special Tax Collections ") . The City covenants and agrees that the Special Tax will be collected in the year 2004 and annually thereafter until all of the Bonds and interest thereon have been paid in full or provision made for such payment. Section 7. In order to pay the principal of and interest on the Bonds as they mature and are called for redemption prior to maturity, together with fees and costs incidental thereto, there are hereby appropriated out of the proceeds of the Special Tax Collections, the sums necessary to promptly pay the same in accordance with the following schedule of principal and interest requirements: 11 0 The City covenants and agrees that the Special Tax Collections shall be accounted for separately as a special fund on the books of the City which is hereby created and designated as the 112004 Capital Improvement Debt Service Fund" (the "Bond Fund ") . Moneys in the Bond Fund are to be held in trust for the purposes set forth herein. The City shall not issue any additional bonds payable from the Special Tax Collections. Section 8. The Bonds shall be registered in the name of Cede & Co., as nominee of The Depository Trust Company ( "DTC ") , and shall be held in the custody of DTC. The Mayor is authorized to execute and deliver a Letter of Representations with DTC on behalf of the City. All payments of principal of and interest on the Bonds and all notices with respect thereto, including notices of full or partial redemption, shall be made and given at the times and in the manner set out in the Letter of Representations. The terms and provisions of the Letter of Representations shall govern in the event of any inconsistency between the provisions of this Ordinance and the Letter of Representations. The Letter of Representations may be amended without Bondholder consent. All payments of principal of and interest on the Bonds and all notices with respect thereto, including notices of full or partial redemption, shall be made and given at the times and in the manner set out in the Letter of Representations. The book -entry registration system for the Bonds may be terminated and certificates delivered to and registered in the name of the beneficial owners, under either of the following circumstances: 12 Principal Due Interest Interest Year April 1 April 1 October 1 Total 2004 $1,994,304.00 $1,994,304.00 2005 $3,510,000 $1,402,245.00 1,332,045.00 6,244,290.00 2006 3,655,000 1,332,045.00 1,258,945.00 6,245,990.00 2007 3,805,000 1,258,945.00 1,182,845.00 6,246,790.00 2008 3,960,000 1,182,845.00 1,103,645.00 6,246,490.00 2009 4,120,000 1,103,645.00 1,021,245.00 6,244,890.00 2010 4,290,000 1,021,245.00 935,445.00 6,246,690.00 2011 4,465,000 935,445.00 846,145.00 6,246,590.00 2012 4,645,000 846,145.00 753,245.00 6,244,390.00 2013 4,830,000 753,245.00 662,682.50 6,245,927.50 2014 5,020,000 662,682.50 562,282.50 6,244,965.00 2015 5,225,000 562,282.50 457,782.50 6,245,065.00 2016 5,440,000 457,782.50 348,982.50 6,246,765.00 2017 5,660,000 348,982.50 237,197.50 6,246,180.00 2018 5,885,000 237,197.50 120,968.75 6,243,166.25 2019 6,125,000 120,968.75 6,245,968.75 The City covenants and agrees that the Special Tax Collections shall be accounted for separately as a special fund on the books of the City which is hereby created and designated as the 112004 Capital Improvement Debt Service Fund" (the "Bond Fund ") . Moneys in the Bond Fund are to be held in trust for the purposes set forth herein. The City shall not issue any additional bonds payable from the Special Tax Collections. Section 8. The Bonds shall be registered in the name of Cede & Co., as nominee of The Depository Trust Company ( "DTC ") , and shall be held in the custody of DTC. The Mayor is authorized to execute and deliver a Letter of Representations with DTC on behalf of the City. All payments of principal of and interest on the Bonds and all notices with respect thereto, including notices of full or partial redemption, shall be made and given at the times and in the manner set out in the Letter of Representations. The terms and provisions of the Letter of Representations shall govern in the event of any inconsistency between the provisions of this Ordinance and the Letter of Representations. The Letter of Representations may be amended without Bondholder consent. All payments of principal of and interest on the Bonds and all notices with respect thereto, including notices of full or partial redemption, shall be made and given at the times and in the manner set out in the Letter of Representations. The book -entry registration system for the Bonds may be terminated and certificates delivered to and registered in the name of the beneficial owners, under either of the following circumstances: 12 0 0 (a) DTC notifies the City that it is no longer willing or able to act as securities depository for the Bonds and a successor securities depository for the Bonds is not appointed by the City prior to the effective date of such discontinuation; or (b) The City determines that continuation of the book - entry system through DTC (or a successor securities depository) is not in the best interest of the City. "Securities depository" means a person that is registered as a clearing agency under section 17A of the Securities Exchange Act of 1934 or whose business is confined to the performance of the functions of a clearing agency with respect to exempted securities, as defined in section 3(a)(12) of such Act for the purposes of section 17A thereof. In the event a successor securities depository is appointed by the City, the Bonds will be registered in the name of such successor securities depository or its nominee. In the event certificates are required to be issued to beneficial owners, and the City shall be fully protected in relying upon a certificate of DTC or any DTC participant as to the identity of and the principal amount of Bonds held by such beneficial owners. The beneficial owners of Bonds will not receive physical delivery of certificates except as provided herein. For so long as there is a securities depository for the Bonds, all of such Bonds shall be registered in the name of the nominee of the securities depository, all transfers of beneficial ownership interests in such Bonds will be made by the nominee of the securities depository, and no investor or other party purchasing, selling, or otherwise transferring beneficial ownership of such Bonds is to receive, hold, or deliver any certificate. The City shall have no responsibility or liability for transfers of beneficial ownership interests in such Bonds. The City will recognize the securities depository or its nominee as the Bondholder for all purposes, including receipt of payments, notices, and voting; provided the City may recognize votes by or on behalf of beneficial owners as if such votes were made by Bondholders of a related portion of the Bonds when such votes are received in compliance with an omnibus proxy or other comparable evidence delivered to the City by the Bondholders. With respect to book entry bonds, the City shall be entitled to treat the person in whose name such Bond is registered as the absolute owner of such Bond for all purposes of this Ordinance, and the City shall not have any responsibility or obligation to any beneficial owner of such book entry bond. Without limiting the immediately preceding sentence, the City shall not 13 have any responsibility or obligation with respect to (a) the accuracy of the records of any securities depository or any other person with respect to any ownership interest in book entry bonds, (b) the delivery to any person, other than a Bondholder, of any notice with respect to book entry bonds, including any notice of redemption or refunding, (c) the selection of the particular Bonds or portions thereof to be redeemed or refunded in the event of a partial redemption or refunding of part of the Bonds outstanding, or (d) the payment to any person, other than a Bondholder, of any amount with respect to the principal of or interest on book entry bonds. Section 9. The Bonds shall be callable for payment prior to maturity in accordance with the terms set out in the bond form in Section 5 of this Ordinance. The securities depository shall select the Bonds for redemption within particular maturities according to its stated procedures. If there is no securities depository, the paying agent shall make the selection. The City covenants and agrees to redeem Bonds subject to mandatory sinking fund redemption in the amounts and on the dates set forth herein and in the Bonds. The City may acquire Bonds by purchase at a price not in excess of par plus accrued interest, inclusive of brokerage fees, and surrender to the bond registrar any Bonds so acquired, in exchange for which the City shall receive a credit under this Ordinance in an amount equal to the principal amount of the Bonds so acquired and surrendered, for and of the then next date for mandatory sinking fund redemption of Bonds of the same maturity. Section 10. The Finance Director and Treasurer of the City is hereby ordered and directed to place on deposit with the paying agent for the Bonds, at least one (1) business day before the maturity, redemption or interest payment date of any Bond, an amount from the funds herein appropriated in the Bond Fund, equal to the amount of such bond or interest, for the sole purpose of paying the same, together with the reasonable fees of the paying agent and bond registrar. This instruction to the Finance Director and Treasurer is irrevocable and may be enforced by mandamus. Section 11. The bond registrar shall immediately notify the City of each default in the payment of principal of or interest on any Bond and of any other default under this Ordinance of which the bond registrar has knowledge. Any default in the payment of the principal of or interest on any Bond, and any default in the performance of any other covenant herein which continues for 30 days after written notice thereof is given to the City by the bond registrar shall constitute an event of default hereunder. The bond registrar shall notify the registered owners of the Bonds of each event of default by first class mail. The owners of not less than 14 10% in principal amount of the Bonds then outstanding may by proper suit compel the performance of the duties of the officials of the City under the Constitution and laws of the State of Arkansas and under this Ordinance and protect and enforce the rights of the owners by instituting appropriate proceedings at law or in equity or by other action deemed necessary or desirable. If any default in the payment of principal or interest continues for 30 days the owners of not less than 50% in principal amount of the then outstanding Bonds may declare all outstanding Bonds immediately due and payable together with accrued interest thereon. No one or more owners of the Bonds shall have any right in any manner by his or their action to affect, disturb or prejudice the security of this Ordinance, or to enforce any right hereunder except in the manner provided herein. All proceedings at law or in equity shall be instituted, had and maintained in the manner provided herein and for the benefit of all owners of outstanding Bonds. Any individual rights of action are restricted by this Ordinance to the rights and remedies herein provided. Nothing shall, however, affect or impair the right of an owner.to enforce the payment of the principal of and interest on any Bond at and after the maturity thereof. No remedy herein conferred upon or reserved to the owners of the Bonds is intended to be exclusive of any other remedy or remedies herein provided, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or given by any law or by the Constitution of the State of Arkansas. No delay or omission of any owner of a Bond to exercise any right or power accrued upon any default shall impair any such right or power or be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy given to the owners of the Bonds may be exercised from time to time and as often as may be deemed expedient. The owners of not less than 50% in aggregate principal amount of the Bonds then outstanding shall have the right, during the continuance of an event of default, to direct the time, method and place of conducting any proceedings for any remedy of bondholders, and may waive any default which shall have been remedied before the entry of final judgment or decree in any suit, action or proceeding or before the completion of the enforcement of any other remedy. No such waiver shall extend to or affect any other existing or subsequent default or defaults or impair any rights or remedies consequent thereon. Section 12. (a) On February 20 of each year, commencing February 20, 2005, the City shall calculate the amount of Surplus 15 0 0 Tax Collections (as defined in Section 5 hereof) and, if such Surplus Tax Collections exist, shall notify the paying agent of that fact. Such notification shall be given in sufficient time to allow the paying agent to give notice of redemption of Bonds on the following April 1 from such Surplus Tax Collections. (b) On the business day prior to each interest payment date for the Bonds, the City shall transfer from the Bond Fund to the paying agent in immediately available funds: (1) the amount necessary for the payment of interest due on such interest payment date on all outstanding Bonds; (2) the amount necessary for the payment of the principal of the Bonds payable on such interest payment date at maturity or upon extraordinary or mandatory sinking fund redemption prior to maturity, if any; (3) the amount necessary for the payment of paying agent and bond registrar fees then due; (4) the amount necessary to make any arbitrage rebate payment due the United States under Section 148(f) of the Internal Revenue Code of 1986, as amended (the "Code "); and (5) the Surplus Tax Collections necessary for the mandatory redemption of Bonds on such interest payment date, if any. Section 13. Notwithstanding any provisions of this Ordinance, and subject to applicable unclaimed property laws, any money deposited with the paying agent in trust for the payment of principal of or interest on the Bonds remaining unclaimed for three years after the payment thereof shall be paid to the City, whereupon all liability of the paying agent with respect to such money shall cease, and the holders of the Bonds shall thereafter look solely to the City for payment of any amounts then due. All moneys held by the paying agent and subject to this Section shall be held uninvested and without liability for interest thereon. Section 14. Moneys in the Bond Fund shall be considered trust funds and shall, to the extent not insured, be secured in the manner required or permitted by State or other applicable law. Subject to the foregoing requirements as to security, the City may deposit such moneys with any depository which is authorized to receive and secure them as aforesaid and the deposits of which are insured by the Federal Deposit Insurance Corporation. All security for deposits shall be perfected in such manner as may be required or permitted under applicable law in order to grant to the City a perfected security interest in such deposits. 16 9 Section 15. In addition to any other covenants and agreements of the City contained in this Ordinance, the City further covenants and agrees with the Bondholders as follows: (a) The City will pay all principal of and interest on the Bonds or cause them to be paid, solely from the sources provided herein, on the dates, at the places, and in the manner provided in this Ordinance. (b) The City will use due diligence in causing the collection of the Special Tax. (c) At reasonable times and under reasonable regulations established by the bond registrar, the bond register may be inspected and copied by or delivered to the holders of 25% or more in principal amount of any of the Bonds then outstanding or a designated representative thereof. (d) The City will take, or require to be taken, all actions that may be required of the City for the interest on the Bonds to be and remain excludable from the gross income for federal income tax purposes and will not take or authorize to be taken any actions that would adversely affect that exclusion under the provisions of the Code. (e) The City will not make any investment or other use of the proceeds of the Bonds which would cause the Bonds to be "arbitrage bonds" as that term is defined in section 148(a) of the Code and any applicable Internal Revenue Service Regulations promulgated thereunder, and that it will comply with the requirements of the Code and such regulations throughout the term of the Bonds. (f) The City covenants that it will not use or permit the use of the improvements financed by the Bonds or the proceeds of the Bonds, in such manner as to cause the Bonds to be "private activity bonds" within the meaning of Section 141 of the Code. (g) The City covenants that it will not reimburse itself from Bond proceeds for any costs paid prior to the date the Bonds are issued except in compliance with United States Treasury Regulation No. 1.150 -2 (the "Regulation "). This Ordinance shall constitute an "official intent" for the purpose of the Regulation. (h) The City covenants that it will, in compliance with the requirements of Section 148(f) of the Code, pay with moneys in the Bond Fund or in the Issuance and Reserve Fund (as hereinafter defined) to the United States Government in accordance with the requirements of Section 148(f) of the Code, from time to time, an amount equal to the sum of (1) the excess of (A) the amount earned 17 0 0 on all Non - purpose Investments (as therein defined) attributable to the Bonds, other than investments attributable to such excess over (B) the amount which would have been earned if such Non - purpose Investments attributable to the Bonds were invested at a rate equal to the Yield (as defined in the Code) on the Bonds, plus (2) any income attributable to the excess described in (1) , subject to the exceptions set forth in Section 148 of the Code. The City further covenants that in order to assure compliance with its covenants herein, it will employ a qualified consultant to advise the City in making the determination required to comply with this subsection (h). Anything herein to the contrary notwithstanding this provision may be modified or rescinded if in the opinion of Bond Counsel such modification or rescission will not affect the tax - exempt status of the Bonds for federal income tax purposes. (i) The City covenants that it will take no action which would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. The City further covenants that it will submit to the Secretary of the Treasury of the United States, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Bonds are issued, a statement concerning the Bonds which contains the information required by Section 149(e) of the Code. Section 16. The bond registrar and paying agent for the Bonds shall each be responsible only for the exercise of good faith and reasonable prudence in the execution of its trust. The recitals in this Ordinance and in the face of the bonds are the recitals of the City and not of the bond registrar or paying agent. The bond registrar and paying agent shall be a corporation or banking association organized and doing business under the laws of the United States of America or of any state, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $25,000,000, and subject to supervision or examination by federal or state banking authority. If such corporation or banking association publishes reports of condition at least annually, pursuant to law or the requirements of any supervising or examining authority above referred to, then for purposes of this Section the combined capital and surplus of such corporation or banking association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the bond registrar and paying agent shall cease to be eligible in accordance with the provisions of this Section, such failure shall ipso facto be deemed a resignation. The bond registrar will maintain books for the registration and transfer of ownership of the Bonds. Except as otherwise provided herein and in the Bonds, (a) the principal of ES= 0 9 all Bonds, payable either at maturity or upon redemption prior to maturity, shall be paid upon surrender of the bond at the corporate trust office of the paying agent and (b) the interest shall be paid by check or draft drawn on the paying agent and mailed to each registered owner at the address shown on the registration books. The bond registrar and paying agent may resign by giving notice in writing to the City Clerk. Such resignation shall be effective upon the appointment of a successor bond registrar and paying agent by the City and acceptance of appointment by the successor. If the City fails to appoint a successor within 30 days of receiving notice of resignation, the bond registrar and paying agent may apply to a court of competent jurisdiction for appointment of a successor. The owners of a majority in aggregate principal amount of outstanding Bonds may at any time, with or without cause, remove the bond registrar and paying agent and appoint a successor. The City shall give notice in writing to the owners of outstanding bonds of any resignation, removal, or appointment of a successor bond registrar and paying agent. The bond registrar and paying agent shall each be entitled to reasonable compensation for its services hereunder. Section 17. The institution so designated in the bond form in Section 5 hereof shall be the original bond registrar and paying agent for the Bonds. The original bond registrar and paying agent and any successor shall file a written acceptance and agreement to execute the trust imposed upon it by this Ordinance, but only upon the terms and conditions set forth in this Ordinance, and subject to the provisions of this Ordinance, to all of which the respective owners of the Bonds agree. Such written acceptance shall be filed with the City Clerk and a copy therein shall be placed in the bond transcript. Any successor shall have all the powers herein granted to the original bond registrar and paying agent. Section 18. The Bonds herein authorized shall be delivered to the bond registrar, which shall authenticate and deliver them to or at the direction of the Underwriters, upon payment in Federal Reserve funds of the Purchase Price. The Purchase Price shall be disbursed to the City for use as follows: (a) There shall be credited to the Bond Fund the sum of $1,980,785.19 which will be used to pay interest on the Bonds due October 1, 2004. (b) The sum of $470,176.21 shall be credited to the Issuance and Reserve Fund (as hereinafter defined) for payment of 0 9 the expenses of issuing and insuring the Bonds. When all such expenses have been paid, this fact shall be evidenced by a certificate signed by the Mayor, which certificate shall state, among other things, that all costs of issuance have been paid. A copy of the certificate shall be filed with the Finance Director and Treasurer of the City, and upon receipt thereof, the Finance Director and Treasurer shall transfer any remaining balance of the Purchase Price credited to the Issuance and Reserve Fund to the Bond Fund to be used to redeem Bonds on the first available date. (c) Proceeds of the Bonds, in the amounts listed below, necessary to finance the Street Improvements, the Drainage Improvements, the Park and Recreational Improvements, the Police Department Improvements, the Fire Department Improvements, the Police, Fire and Emergency Communications Improvements, the School Area Pedestrian Safety Improvements, the Animal Services Improvements and the Robinson and Statehouse Convention Centers Improvements (collectively, the 112004 Capital Improvements ") shall be credited to ten separate funds hereby created and designated as follows (collectively, the "Improvement Funds "): (i) Street Improvement Fund - $24,865,000; (ii) Drainage Improvement Fund - $4,120,000; (iii) Park and Recreational Improvement Fund - $9,200,000; (iv) Police Department Improvement Fund - $850,000; (v) Fire Department Improvement Fund - $11,175,000; (vi) Police, Fire and Emergency Communications Improvement Fund - $10,925,000; (vii) Robinson and Statehouse Convention Centers Improvement Fund - $1,000,000; (viii) School Area Pedestrian Safety Improvement Fund - $1,065,000; (ix) Animal Services Improvement Fund - $1,200,000; and (x) Zoo Improvement Fund - $4,600,000. Moneys allocated to each fund shall be expended to accomplish the purpose for which the fund was created (e.g. moneys �d1] in the Street Improvement Fund will be used to accomplish the Street Improvements). Moneys in the Zoo Improvement Fund will be used to make renovations and improvements to the Little Rock Zoo, which are part of the Park and Recreational Improvements. (d) Earnings from investments on any of the Improvement Funds shall be deposited into a separate fund hereby created and designated 112004 Issuance and Reserve Fund" (the "Issuance and Reserve Fund "). Moneys credited to the Issuance and Reserve Fund shall be expended as follows: (i) up to $470,176.21 for expenses of issuing and insuring the Bonds and (ii) the remaining amount, and interest earnings on moneys in the Issuance and Reserve Fund, for any of the 2004 Capital Improvements, at such times and in such amounts as hereafter designated by the Board of Directors of the City. The Board of Directors will not be obligated to expend moneys in the Issuance and Reserve Fund representing interest earnings proportionately. (e) When all expenditures properly payable from any fund created by this Section 18 have been paid, that fund shall be closed and any balance credited to the Bond Fund. Section 19. All receipts from the 2001 Bond Tax not used for retirement of the 2001 Bonds, including penalties and interest payable with respect thereto and all payments received by the City from the State of Arkansas in lieu thereof under Amendment No. 79 to the Arkansas Constitution hereafter received, are appropriated for and shall be deposited into the Bond Fund and used to pay debt service on the Bonds. Section 20. Moneys in the funds created hereby shall be invested in Eligible Investments which shall mature, or be subject to repurchase, withdrawal without penalty, or redemption at the option of the holder, on or before the dates on which the amounts invested are reasonably expected to be needed for the purposes hereof. "Eligible Investments" means any of the securities that are at the time legal for investment of City funds pursuant to Resolution No. 10,609 of the City and Arkansas Code Annotated (2003 Supp.) § 14 -58 -309, as each may be amended from time to time. Earnings on moneys in the Bond Fund may be used by the City for any municipal purpose. Section 21. The terms of this Ordinance and the Bonds authorized hereunder constitute a contract between the City and the owners of the Bonds, and no variation or change in the undertakings herein set forth shall be made while any of the Bonds are outstanding, except as set forth in this Section. Subject to the 21 terms and provisions contained in this Section and not otherwise, the owners of not less than 75% in aggregate principal amount of the then outstanding Bonds shall have the right, from time to time, anything herein to the contrary notwithstanding, to consent to the adoption by the City of such ordinance supplemental hereto as shall be necessary or desirable for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained herein or in the Bonds; provided, however, there shall not be permitted (a) an extension of the maturity of the principal of or interest on any Bond, or (b) a reduction in the principal amount of any Bond or the rate of interest thereon, or (c) the creation of any additional pledge on the revenues pledged to the Bonds other than as authorized herein, as originally adopted, 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 such consent. The City may from time to time and at any time adopt an ordinance supplemental hereto, without the consent of or notice to any Bondholder, (i) to amend, modify, alter, or replace the Letter of Representations or other provisions relating to book entry bonds or (ii) to cure any ambiguity, defect or omission in this Ordinance or any amendment hereto. Section 22. When all of the Bonds shall have been paid or deemed paid, the pledge in favor of the Bonds shall be discharged and satisfied. A Bond shall be deemed paid when there shall have been deposited in trust with the bond registrar and paying agent, as escrow agent under an escrow deposit agreement requiring the escrow agent to apply the proceeds of the deposit to pay the principal of and interest on the Bond as due at maturity or upon redemption prior to maturity, moneys or Government Securities sufficient to pay when due the principal of and interest on the Bond. If the principal of the Bond is to become due by redemption prior to maturity, notice of such redemption must have been duly given or provided for. "Government Securities" shall mean direct or fully guaranteed obligations of the United States of America, noncallable, maturing on or prior to the maturity or redemption date of the Bond deemed paid. In determining the sufficiency of a deposit there shall be considered the principal amount of such Government Securities and interest to be earned thereon until their maturity. Section 23. The provisions of this Ordinance are separable and in the event that any section or part hereof shall be held to be invalid, such invalidity shall not affect the remainder of this Ordinance. Section 24. All ordinances and resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. 22 Section 25. It is hereby ascertained and declared that the improvements to be financed by the Bonds are immediately needed for the preservation of the public peace, health and safety and to remove existing hazards thereto. Such improvements cannot be accomplished without the issuance of the Bonds, which cannot be sold at the interest rates specified herein unless this Ordinance is immediately effective. Therefore, it is declared that an emergency exists and this Ordinance being necessary for the preservation of the public peace, health and safety shall be in force and take effect immediately upon and after its passage. ADOPTED: December 16, 2003. ATTEST: Na cy Woo , City Cle k Approved as to form: APPROVED: By m Dailey, Mayor 0U�ty Thomas M. Carpentertorney 23 CERTIFICATE The undersigned, City Clerk of the City of Little Rock, Arkansas (the "City ") , hereby certifies that the foregoing pages are a true and perfect copy of Ordinance No. 19,005, adopted at a regular session of the Board of Directors of the City, held at the regular meeting place in the City at 6:00 o'clock p.m., on the 16th day of December, 2003, and that the Ordinance is of record in Ordinance Record Book No. , Page , now in my possession. GIVEN under my hand and seal on this day of December, 2003. M NO 102 -� _- (SEAL) A4"­ G*.. 01 -OF- Y : ,E�O� ''.99KANSPS•`• 24