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19769ORDINANCE NO. 199769 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $185000,000 OF A SEWER REVENUE BOND, SERIES 2007B, BY THE CITY OF LITTLE ROCK, ARKANSAS FOR THE PURPOSE OF FINANCING THE COSTS OF CERTAIN SEWER COLLECTION SYSTEM IMPROVEMENTS; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE SERIES 2007B BOND; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF THE SERIES 2007B BOND; PRESCRIBING OTHER MATTERS RELATING THERETO; AND DECLARING AN EMERGENCY. WHEREAS, the City of Little Rock, Arkansas (the "City ") owns a sewer system (the "System "), which is operated and managed by the City's Sanitary Sewer Committee (the "Committee'); and WHEREAS, the Committee has determined that portions of the collection component of the system need to be rehabilitated and improved (the "Project ") in order to make the services of the System adequate for the needs of the City and its inhabitants; and WHEREAS, the Committee has caused Little Rock Wastewater to prepare a preliminary engineering report (the "Engineering Report") that contains general descriptions and estimated costs of various components of the Project, and a copy of the Engineering Report is on file in the office of the City Clerk and the Chief Executive Officer of the System where it may be inspected by any interested person; and WHEREAS, the City does not have available funds to pay the estimated costs of the Project, but can obtain the same through the issuance of its sewer revenue bond; and WHEREAS, the City (through the Committee) is making arrangements for the sale of its Sewer Revenue Bond, Series 2007B (the "2007B Bond "), in principal amount not to exceed $18,000,000, to the Arkansas Development Finance Authority, as purchaser (the "Bondholder'), at a price of par and bearing interest at the rate of 1.75% per annum, all pursuant to a Bond Purchase Agreement (the "Agreement ") among the City, the Bondholder and the Arkansas Natural Resources Commission (the "Commission "), which Agreement has been presented to and is before this meeting; and WHEREAS, the City will also be required to pay to the Arkansas Development Finance Authority, as servicer with respect to the 2007B Bond (the "Authority "), a financing fee equal to one percent (1.00 %) per annum of the outstanding principal amount of the 2007B Bond (the "Financing Fee "); and WHEREAS, the Bondholder proposes to pledge the 2007B Bond as collateral for the payment of a series of its wastewater system revolving loan fund revenue bonds (the "ADFA 4835-6881-1521.2 Bonds ") pursuant to its general bond resolution, as amended or supplemented from time to time, to the bank or trust company to be named as trustee thereunder (the "ADFA Trustee "); and WHEREAS, the City is authorized and empowered under the provisions of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the Constitution of the State of Arkansas ( "Amendment 65 ") and Title 14, Chapter 235, Subchapter 2 of the Arkansas Code of 1987 Annotated (the "Authorizing Legislation "), to issue and sell the 2007B Bond; and WHEREAS, pursuant to the authority of Amendment 65 and the Authorizing Legislation, the City has previously issued and has outstanding (i) its Sewer Revenue Bond, Series 1990 (the "1990 Bond ") authorized by Ordinance No. 15,966 adopted November 20, 1 990 (the "1990 Ordinance "), (ii) its Sewer Revenue Bond, Series 1991 (the "1 991 Bond ") authorized by Ordinance No. 16,030 adopted April 2, 1991 (the "1991 Ordinance "), (iii) its Sewer Revenue Bond, Series 1996 (the "1996 Bond ") authorized by Ordinance No. 17,097 adopted January 16, 1996 (the "1 996 Ordinance "), (iv) its Sewer Revenue Bond, Series 1999 (the "1999 Bond ") authorized by Ordinance No. 18,067 adopted July 20, 1 999 (the "1 999 Ordinance "), (v) its Sewer Refunding and Construction Revenue Bonds, Series 2001 (the "2001 Bonds ") authorized by Ordinance No. 18,557 adopted September 4, 2001 (the "2001 Ordinance "), (vi) its Sewer Revenue Bond, Series 2004A (the "2004A Bond ") authorized by Ordinance No. 19,006 adopted December 16, 2003 (the "2004A Ordinance "), (vii) its Sewer Revenue Bond, Series 2004B (the "2004B Bond ") authorized by Ordinance No. 19,007 adopted December 16, 2003 (the "2004B Ordinance "), (viii) its Sewer Revenue Bond, Series 2004C (the "2004C Bond ") authorized by Ordinance No. 19,229 adopted November 1, 2004 (the "2004C Ordinance "), (ix) its Sewer Refunding and Construction Revenue Bonds, Series 2005 (the "2005 Bonds ") authorized by Ordinance No. 19,307 adopted April 19, 2005 (the "2005 Ordinance "), and (x) its Sewer Construction Revenue Bonds, Series 2007A (the "2007A Bonds ") authorized by Ordinance No. 19,746 adopted May 15, 2007 (the 112007A Ordinance "); NOW, THEREFORE, BE IT ORDAINED by the Board of Directors of the City of Little Rock, Arkansas that: Section 1. The Project shall be accomplished and shall be a part of the System. The accomplishment of the Project shall be under the control and supervision of, and all details in connection therewith shall be handled by, the Committee, and the Committee shall make all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers. The Committee shall let all contracts pursuant to and in accordance with existing laws and shall require such performance bonds and insurance from the contractors as, in the judgment of the Committee, will fully insure completion of the Project in accordance with the plans and specifications therefor. Section 2. The sale to the Bondholder of the 2007B Bond in the maximum principal amount of $18,000,000 at a price of par, such 2007B Bond to bear interest at the rate of 1.75% per annum and to be subject to a Financing Fee of 1.00% per annum and otherwise to be subject to the terms and provisions hereafter in this Ordinance set forth in detail be, and is hereby approved and the 2007B Bond is hereby sold to the Bondholder. The Mayor is hereby authorized and directed to execute and deliver the Agreement on behalf of the City and to take 4835- 6881 - 1521.2 2 all action required on the part of the City to fulfill its obligations under the Agreement. The Agreement is hereby approved in substantially the form submitted to this meeting with such changes as may be approved by the Mayor, his execution to constitute complete evidence of such approval. Section 3. The Board of Directors hereby finds and declares that the period of usefulness of the Project will be more than twenty -five (25) years, which is longer than the term of the 2007B Bond. Section 4. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 65 and the Authorizing Legislation, the City of Little Rock, Arkansas Sewer Revenue Bond, Series 2007B (the "2007B Bond "), is hereby authorized and ordered issued in the total principal amount of not to exceed Eighteen Million Dollars ($18,000,000), the proceeds of the sale of which are necessary to provide sufficient funds for accomplishing the Project, paying expenses incidental thereto and expenses of issuing the 2007B Bond, and funding interest during construction. The 2007B Bond shall bear interest at the rate of one and three - quarters percent (1.75%) per annum and shall be subject to a Financing Fee of one percent (1.00 %) per annum based upon a 360 -day year of twelve consecutive 30 -day months compounded semiannually. The 2007B Bond shall be dated the date of its delivery to the Bondholder. Accrued interest and the Financing Fee only shall be payable on each April 15 and October 15, commencing October 15, 2007, to and including October 15, 2009. Principal, interest and the Financing Fee shall be payable on April 15, 2010, and on each April 15 and October 15 thereafter until the unpaid principal is paid in full as follows: Date April 15, 2010 October 15, 2010 April 15, 2011 October 15, 2011 April 15, 2012 October 15, 2012 April 15, 2013 October 15, 2013 April 15, 2014 October 15, 2014 April 15, 2015 October 15, 2015 Payment Amount Interest Servicing Fee Principal $ 588,048.00 $ 157,500.00 $ 90,000.00 $ 3401548.00 588,048.00 154,520.00 88,297.00 345,231.00 588,048.00 151,499.00 86,571.00 349,978.00 588,048.00 148,437.00 84,821.00 354,790.00 5881048.00 145,333.00 83,047.00 359,668.00 588,048.00 142,186.00 81,249.00 3641613.00 588,048.00 138,995.00 79,426.00 369,627.00 588,048.00 135,761.00 77,578.00 374,709.00 588,048.00 132,482.00 75,704.00 379,862.00 588,048.00 129,159.00 73,805.00 385,084.00 588,048.00 125,789.00 71,879.00 390,380.00 588,048.00 122,373.00 69,928.00 395,747.00 4835 -6881- 1521.2 3 Date Payment Amount Interest Servicing Fee Principal April 15, 2016 588,048.00 118,910.00 67,949.00 401,189.00 October 15, 2016 588,048.00 115,400.00 65,943.00 406,705.00 April 15, 2017 588,048.00 111,841.00 63,909.00 412,298.00 October 15, 2017 588,048.00 108,234.00 61,848.00 417,966.00 April 15, 2018 588,048.00 104,577.00 59,758.00 423,713.00 October 15, 2018 588,048.00 100,869.00 57,639.00 429,540.00 April 15, 2019 588,048.00 971)111.00 55,492.00 435,445.00 October 15, 2019 588,048.00 93,300.00 53,315.00 441,433.00 April 15, 2020 588,048.00 89,438.00 51,107.00 447,503.00 October 15, 2020 588,048.00 85,522.00 48,870.00 453,656.00 April 15, 2021 588,048.00 81,553.00 46,602.00 459,893.00 October 15, 2021 588,048.00 77,529.00 44,302.00 466,217.00 April 15, 2022 588,048.00 73,449.00 41,971.00 472,628.00 October 15, 2022 588,048.00 69,314.00 39,608.00 479,126.00 April 15, 2023 588,048.00 65,121.00 37,212.00 485,715.00 October 15, 2023 588,048.00 60,871.00 34,784.00 492,393.00 April 15, 2024 588,048.00 56,563.00 32,322.00 4995163.00 October 15, 2024 588,048.00 521195.00 29,826.00 506,027.00 April 15, 2025 588,048.00 47,768.00 27,296.00 512,984.00 October 15, 2025 588,048.00 43,279.00 24,731.00 520,038.00 April 15, 2026 588,048.00 38,729.00 22,131.00 527,188.00 October 15, 2026 588,048.00 34,116.00 19,495.00 5341)437.00 April 15, 2027 588,048.00 29,439.00 161823.00 541,786.00 October 15, 2027 588,048.00 24,699.00 14,114.00 549,235.00 April 15, 2028 588,048.00 19,893.00 11,367.00 556,788.00 October 15, 2028 588,048.00 15,021.00 8,583.00 564,444.00 April 15, 2029 5881048.00 10,082.00 5,761.00 572,205.00 October 15, 2029 588,023.00 5,075.00 2,900.00 580,048.00 4835 -6881- 1521.2 4 The 2007B Bond shall be issued in the form of a single typewritten bond, registered as to both principal and interest, payable to the Bondholder, or registered assigns, as set forth hereinafter in the bond form, and shall be numbered R07B -1. Payment of principal and interest shall be by check or draft mailed to the Bondholder at its address shown on the bond registration books of the City which shall be maintained by the City Clerk as Bond Registrar, without presentation or surrender of the 2007B Bond (except upon final payment), and such payments shall discharge the obligation of the City to the extent thereof. The City Clerk or her designee shall keep a payment record and make proper notations thereon of all payments of principal and interest. Payment of principal and interest shall be in any coin or currency of the United States of America which, as at the time of payment, shall be legal tender for the payment of debts due the United States of America. When the principal of and interest on the 2007B Bond has been fully paid, it shall be canceled and delivered to the City Clerk. Section 5. The 2007B Bond shall be executed on behalf of the City by its Mayor and City Clerk, and shall have impressed thereon the seal of the City. The 2007B Bond is not a general obligation of the City, but is a special obligation, the principal of and the interest on which, and the Financing Fee in connection therewith, are secured by a pledge of and are payable from net revenues derived from the operation of the System ( "Net Revenues "). The pledge of Net Revenues securing the 2007B Bond is subordinate to the pledge of Net Revenues securing the 1990 Bond, the 1991 Bond, the 1996 Bond, the 1999 Bond, the 2001 Bonds, the 2004A Bond, the 2004B Bond, the 2004C Bond, the 2005 Bonds and the 2007A Bonds (collectively, the "Prior Bonds "). The principal of and interest on the 2007B Bond shall not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restriction. Section 6. The 2007B Bond shall be in substantially the following form, and the Mayor and City Clerk are hereby authorized and directed to make all the recitals contained therein: Registered United States of America Registered No. R07B -1 $1890009000 State of Arkansas County of Pulaski City of Little Rock, Arkansas Sewer Revenue Bond Series 2007B Registered Owner: ARKANSAS DEVELOPMENT FINANCE AUTHORITY Principal Amount: EIGHTEEN MILLION DOLLARS (or the total principal amount outstanding as reflected by the Record of Payment of Advances attached hereto) Know All Men By These Presents: 4835 -6881 - 1521.2 5 That the City of Little Rock, Arkansas (the "City ") hereby acknowledges itself to owe, and for value received promises to pay to the order of the Arkansas Development Finance Authority, or registered assigns, but solely from the special fund provided therefor as hereinafter set forth, in lawful money of the United States of America, the Principal Amount shown above (or so much of the Principal Amount as should have been advanced as shown on the Record of Payment of Advances attached hereto), and to pay in like coin or currency interest thereon at the rate of 1.75% per annum from the date of each advance. A financing fee of 1.00% per annum (the "Financing Fee ") shall also be payable by the City to the Arkansas Development Finance Authority or its successor in the same manner and upon the same dates as interest hereon. Interest on the unpaid balance of the total principal amount outstanding and the Financing Fee shall be payable on October 15, 2007, April 15, 2008, October 15, 2008, April 15, 2009 and October 15, 2009. Principal, interest and the Financing Fee shall be payable on April 15, 2010, and on each April 15 and October 15 thereafter until the unpaid principal is paid in full as follows: [Here will be inserted the amortization schedule set forth in Section 4 of this Ordinance.] Payments of principal and interest due hereon shall be made, except for final payment, without presentation and surrender of this bond, directly to the Registered Owner at its address shown on the bond registration book of the City maintained by the City Clerk as Bond Registrar, and such payments shall fully discharge the obligation of the City to the extent of the payments so made. This bond is issued for the purpose of (i) providing financing for a portion of the costs of improving and rehabilitating collection components of the System (the "Project "), (ii) interest during construction, and (iii) paying costs of authorizing and issuing this bond, and is issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas, including particularly Amendment No. 65 to the Constitution of the State of Arkansas ( "Amendment 65 ") and Title 14, Chapter 235, Subchapter 2 of the Arkansas Code of 1987 Annotated (the "Authorizing Legislation "), and pursuant to Ordinance No. of the City, duly adopted and approved on the day of , 2007 (the "Authorizing Ordinance "). Reference is hereby made to the Authorizing Ordinance for the details of the nature and extent of the security and of the rights and obligations of the City and the Registered Owner of this bond. This bond may be assigned only upon the written approval of the Arkansas Natural Resources Commission (the "Commission "), and in order to effect such assignment, the assignor shall promptly notify the City Clerk by registered mail, and the assignee shall surrender this bond along with a written assignment and written approval of the Commission to the City Clerk for transfer on the registration records. Every assignee shall take this bond subject to all payments and prepayments of principal and interest (as reflected on the Payment Record maintained by the City Clerk or his or her designee) prior to such surrender for transfer. This bond may be prepaid at the option of the City from funds from any source, in whole but not in part, at any time on and after October 15, 2017, at a prepayment price equal to the 4835- 6881 - 1521.2 6 principal amount outstanding, plus accrued interest and the Financing Fee to the prepayment date. Notice of any prepayment shall be given to the registered owner of this bond at least 90 days prior to the prepayment date. Such notice shall be in writing mailed to the address of the registered owner of this bond at the address appearing on the bond registration records maintained by the City Clerk. This bond does not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation or provision, and the taxing power of the City is not pledged to the payment of the principal of or interest on this bond. This bond is not a general obligation of the City, but is a special limited obligation payable solely from the net revenues derived from the operation of the System. In this regard, the pledge of net System revenues is subordinate to the pledge of net System revenues securing (i) the City's Sewer Revenue Bonds, Series 1990, 1991, 1996, 1999, 2004A, 2004B and 2004C, (ii) the City's Sewer Refunding and Construction Revenue Bonds, Series 2001, (iii) the City's Sewer Refunding and Construction Revenue Bonds, Series 2005, and (iv) the City's Sewer Construction Revenue Bonds, Series 2007A, so long as any of such bonds are outstanding. Pursuant to the Authorizing Ordinances, a sufficient amount of net System revenues to pay principal and interest on this bond as due shall be set aside in a special fund created for that purpose identified as the "2007B ADFA Bond Fund." Reference is made to the Authorizing Ordinance for a detailed statement of the nature and extent of the security, and the rights and obligations of the City and registered owner of this bond. The City has fixed and has covenanted and agreed to maintain rates for the use of the System which shall be sufficient at all times to at least provide for the reasonable expenses of operation and maintenance of the System, to provide for the payment of the principal of and interest on all outstanding bonds to which System revenues are pledged as the same become due, to establish and maintain debt service reserves, and to provide a depreciation fund, all as set forth in the Authorizing Ordinance. This bond is issued with the intent that the laws of the State of Arkansas will govern its construction. No recourse shall be had for the payment of the principal of or premium, if any, or interest on this bond or for any claim based thereon or upon any obligation, covenant, or agreement contained in this bond or in the Authorizing Ordinance against any past, present or future director, officer or employee of the City, or any director, officer or employee of any successor of the City, as such, either directly or through the City or any successor of the City, under any rule of law or equity, statute, or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such director, officer or employee as such is hereby expressly waived and released as a condition of and consideration for the issuance of this bond. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by the Constitution and statutes of the State of Arkansas to exist, happen and be performed precedent to and in the issuance of this bond do exist, have happened and have been performed in due time, form and manner as required by law; that the indebtedness represented by 4835- 6881 - 1521.2 7 this bond does not exceed or violate any constitutional or statutory limitation of indebtedness; and that provision has been made for the payment of the principal of and interest on this bond, as provided in the Authorizing Ordinance. IN WITNESS WHEREOF, the City of Little Rock, Arkansas has caused this bond to be executed in its name by the manual signatures of its Mayor and City Clerk, thereunto duly authorize, and its corporate seal to be affixed hereto, all as of the day of , 2007. ATTEST: City Clerk CITY OF LITTLE ROCK, ARKANSAS C Mayor REGISTRATION CERTIFICATE Date of Registration I Name of Registered Owner Arkansas Development Finance Authority 4835- 6881 - 1521.2 8 Signature of City Clerk RECORD OF PAYMENT OF ADVANCES Date of Advance* Amount of Advance Total Principal Outstanding Signature of Vice President of Arkansas Development Finance Authority *The date of each advance shall be the interest commencement date from which the principal amount of such advance bears interest and from which the Financing Fee is calculated. Section 7. The City has heretofore fixed sewer rates by Ordinance No. 19,647 adopted on November 28, 2006. Reference is hereby made to such ordinance for the details thereof and other provisions pertaining thereto, which sewer rates are hereby confirmed and continued as provided therein. The City covenants and agrees that the rates established will produce gross revenues at least sufficient to pay monthly operation, maintenance and funded depreciation expenses of the System, to pay the principal of and the interest on all outstanding bonds to which System revenues are pledged (collectively, "System Bonds "), as the same become due, pay the Financing Fees as the same become due, and create and maintain any required debt service reserves ( "Required Payments "). The City covenants always to maintain rates (including increases as necessary) which will provide for the Required Payments. The rates in effect for sewer service at this time shall not be reduced without the prior written consent of the Commission and the Bondholder. None of the facilities or services afforded by the System shall be furnished without a charge being made therefor. In the event that the City or any department, agency or instrumentality thereof shall avail itself of the facilities and services afforded by the System, the reasonable value of the services or facilities so afforded shall be charged against the City or such department, agency or instrumentality and shall be paid for as the charges accrue. The revenues so received shall be deemed to be revenues derived from the operation of the System and shall be used and accounted for in the same manner as the other revenues derived from the operation of the System. 4835 - 6881 - 1521.2 9 Section 8. All of the terms and provisions of the 1990 Ordinance, the 1991 Ordinance, the 1996 Ordinance, the 1999 Ordinance, the 2001 Ordinance, the 2004A Ordinance, the 2004B Ordinance, the 2004C Ordinance, the 2005 Ordinance, and the 2007A Ordinance (the "Prior Bond Ordinances ") (including those incorporated therein by reference), as now in effect, except for those provisions clearly inapplicable hereto or in direct conflict herewith, including, without limitation, those terms and provisions pertaining to the collection, investment and handling of System revenues and funds, to the operation, maintenance and care of the System, and to depreciation of the System, are hereby made applicable hereto and are incorporated by reference as though fully set forth herein. The effect of the foregoing sentence shall be to continue the applicable provisions in full force and effect until the 2007A Bond is paid, or provision made therefor, even after payment of the Prior Bonds. Section 9. The City covenants that it will continuously operate the System as a revenue - producing undertaking and will not sell or lease the same, or any substantial portion thereof, without the prior written approval of the Bondholder and the Commission; provided, however, that nothing herein shall be construed to prohibit the City from making such dispositions of properties of the System and such replacements and substitutions for properties of the System as shall be necessary or incidental to the efficient operation of the System as a revenue - producing undertaking. Section 10. (a) After making the required payments into the Sewer Operation and Maintenance Fund being maintained in accordance with the 2001 Ordinance and into the bond funds for the Prior Bonds and any additional bonds having a priority on the pledge of Net Revenues over the pledge in favor of the 2007B Bond and after paying the financing and administrative fees in connection with the Prior Bonds, there shall be paid from the Sewer Fund being maintained in accordance with the 2001 Ordinance into an account of the City in a special fund to be created by the Bondholder (the "2007B ADFA Bond Fund ") for the purpose of paying the principal of and interest on the 2007B Bond the amounts specified in (b) below. (b) There shall be deposited from proceeds of the 2007B Bond or, at the direction of the Committee, from moneys in the Sewer Fund, into the 2007B ADFA Bond Fund on each April 15 and October 15 after the bond is issued and delivered until October 15, 20095 the interest due on the 2007B Bond on such dates. Commencing on the first business day of each month thereafter, there shall be deposited from moneys in the Sewer Fund into the 2007B ADFA Bond Fund an amount equal to 1/6 of the amount of interest on and principal of the 2007B Bond next due. (c) If Net Revenues are insufficient to make the required payment on or before the first business day of the following month into the 2007B ADFA Bond Fund, then the amount of any such deficiency in the payment made shall be added to the amount otherwise required to be paid into the 2007B ADFA Bond Fund on the first business day of the next month. (d) When the moneys held in the 2007B ADFA Bond Fund which represent payments by the City and interest earnings thereon or proceeds of investments therefrom (collectively, "City Funds ") shall be and remain sufficient to pay in full the principal of and interest on the 2007B Bond, the City shall not be obligated to make any further payments into the 2007B ADFA Bond Fund. 4835- 6881 - 1521.2 10 (e) All moneys in the 2007B ADFA Bond Fund representing City Funds shall be used solely for the purpose of paying the principal of and interest on the 2007B Bond and the City shall automatically receive a credit for the amount of such City Funds on hand in the 2007B ADFA Bond Fund and available for the payment of any principal and interest currently due on an interest or principal payment date irrespective of whether the Bondholder has applied or caused to be applied such funds on that date for such purpose. The City shall receive a credit for all earnings and income derived from the investment of the City Funds each April 15 and October 15 and such earnings and income shall be credited against the next six monthly payments. (f) The 2007B Bond shall be specifically secured by a pledge of all Net Revenues required to be placed into the 2007B ADFA Bond Fund. This pledge in favor of the 2007B Bond is hereby irrevocably made according to the terms of this Ordinance, and the City and its officers and employees shall execute, perform and carry out the terms thereof in strict conformity with the provisions of this Ordinance. Section 11. After making the payments into the 2007B ADFA Bond Fund required by Section 10 hereof, there shall be paid from the Sewer Fund the Financing Fee to the Authority. The Financing Fee shall be payable on each date interest on the 2007B Bond is due and shall be calculated on the same basis as interest on the 2007B Bond. The payment of the Financing Fee is expressly made subordinate to the payment of the principal of and interest on the 2007B Bond. Section 12. The City shall assure that (i) not in excess of 10% of the proceeds of the 2007B Bond is used for Private Business Use (as defined below) if, in addition, the payment of more than 10% of the principal or 10% of the interest due on the 2007B Bond during the term thereof is, under the terms of the 2007B Bond or any underlying arrangement, directly or indirectly secured by any interest in property used or to be used for a Private Business Use or in payments in respect of property used or to be used for a Private Business Use or is to be derived from payments, whether or not to the City, in respect of property or borrowed moneys used or to be used for a Private Business Use; and (ii) that, in the event that both (A) in excess of 5% of the proceeds of the 2007B Bond are used for a Private Business Use, and (B) an amount in excess of 5% of the principal or 5% of the interest due on the 2007B Bond during the term thereof is, under the terms of the 2007B Bond or any underlying arrangement, directly or indirectly, secured by any interest in property used or to be used for said Private Business Use or in payments in respect of property used or to be used for said Private Business Use or is to be derived from payments, whether or not to the City, in respect of property or borrowed money used or to be used for said Private Business Use, then said excess over said 5% of proceeds of the 2007B Bond used for a Private Business Use shall be used for a Private Business Use related to the governmental use of the Project. The City shall assure that not in excess of 5% of the proceeds of the Series 2007B Bond are used, directly or indirectly, to make or finance a loan to persons other than state or local governmental units. As used in this Section, "Private Business Use" means use directly or indirectly in a trade or business carried on by a natural person or in any activity carried on by a person other than a 4835 -6881 - 1521.2 11 natural person, excluding, however, use by a state or local governmental unit and use as a member of the general public. Section 13. Installments of principal and interest on the 2007B Bond shall be prepayable prior to maturity as provided in the form of the 2007B Bond set forth in Section 6 of this Ordinance. Section 14. As long as the 2007B Bond is outstanding, the City shall not issue or attempt to issue any bonds having or claimed to be entitled to a priority of lien on Net Revenues over the lien securing the 2007B Bond, including any and all future extensions, betterments and improvements to the System except as provided in this Section. The City may issue additional revenue bonds having a priority on or on a parity with the lien on Net Revenues in favor of the 2007B Bond to finance or pay the cost of constructing extensions, betterments and improvements to the System or to refund outstanding System Bonds, if there shall have been procured and filed with the City Clerk and the Bondholder a statement by a certified public accountant not in the regular employ of the City (the "Accountant') reciting the opinion that (i) the Net Revenues (Net Revenues being gross revenues less operation and maintenance expenses, but not including depreciation) for the fiscal year preceding the year in which such additional bonds are to be issued were not less than 110% of the average annual debt service requirements (including principal, interest and financing and administrative fees) on all outstanding System Bonds and the bonds then proposed to be issued plus the average annual Financing Fee or (ii) the Net Revenues for the fiscal year succeeding the year in which such additional bonds are to be issued are projected to be sufficient in amount, taking in consideration any enacted increase in Net Revenues, to be not less than of the average annual debt service requirements (including principal, interest and financing and administrative fees) on all outstanding System Bonds and the bonds then proposed to be issued plus the average annual Financing Fee. The additional bonds, the issuance of which is restricted and conditioned by this Section, shall not be deemed to mean bonds the security and source of payment of which are subordinate and subject to the priority of the 2007B Bond and such additional bonds may be issued without complying with the terms and conditions of this Section. Section 15. It is covenanted and agreed by the City with the Bondholder, the Authority and the Commission that it will faithfully and punctually perform all duties with reference to the System required by the Constitution and laws of the State of Arkansas and by this Ordinance, including, without limitation, the making and collecting of reasonable and sufficient rates lawfully established for services rendered by the System, segregating System revenues and applying them to the respective funds maintained pursuant to the Prior Bond Ordinances and this Ordinance . The City covenants and agrees that the Bondholder shall have the protection of all the provisions of the Authorizing Legislation, and that the City will diligently proceed to enforce those provisions to the end of the Bondholder realizing fully upon its security. If the City shall fail to proceed within thirty (30) days after written request shall have been filed by the Bondholder, the Bondholder may proceed to enforce all such provisions. 4835 - 6881 - 1521.2 12 If there be any default in the payment of the principal of or interest on the Series 2007B Bond, or if the City defaults in any 2007B ADFA Bond Fund requirement described in the Indenture or in the performance of any of the other covenants contained in this Ordinance, the Bondholder may, by proper suit, compel the performance of the duties of the officials of the City under the laws of the State of Arkansas. In the case of a default in the payment of the principal of and interest on the 2007B Bond, the Bondholder may apply in a proper action to a court of competent jurisdiction for the appointment of a receiver to administer the System on behalf of the City and the Bondholder with power to charge and collect (or by mandatory injunction otherwise to cause to be charged and collected) rates sufficient to provide for and to pay the 2007B Bond and interest outstanding and to apply System revenues in conformity with this Ordinance. When all defaults in principal and interest payments have been cured, the custody and operation of the System shall revert to the City. No remedy herein conferred upon or reserved to the Bondholder is intended to be exclusive of any other remedy or remedies herein provided or provided by law, and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or given by law. No delay or omission of the Bondholder to exercise any right or power accrued upon any default shall impair any such right or power or shall be construed to be a waiver of any default or an acquiescence therein; and every power and remedy given by this Ordinance to the Bondholder may be exercised from time to time and as often as may be deemed expedient. No waiver of any default shall extend to or affect any other existing or any subsequent default or defaults or impair any rights or remedies consequent thereon. Any costs of enforcement of the 2007B Bond or of any provision of this Ordinance, including reasonable attorney's fees, shall be paid by the City. The Authority may enforce all rights and exercise all remedies available to the Bondholder in the event the Financing Fee is not paid when due. Section 16. When the 2007B Bond has been executed by the Mayor and City Clerk and the seal of the City impressed thereon as herein provided, it shall be delivered to the Bondholder upon the payment of all or a portion of the purchase price in accordance with the Agreement. Sale proceeds in the amount necessary to make all or a portion of the semiannual interest and Financing Fee payments due on each April 15 and October 15 to and including October 15, 2009, shall be applied, unless otherwise directed by the Committee, to the payment of interest and Financing Fees on the 2007B Bond due on such dates. The balance of the sale proceeds shall be deposited, as and when received, in a special account of the City heretofore created and designated the "Little Rock Wastewater Utility Construction Fund" (the "Construction Fund "). The proceeds of the 2007B Bond in the Construction Fund shall be used for directly paying or reimbursing the City for, the costs of accomplishing the Project, expenses incidental thereto, and the expenses of issuing the 2007B Bond approved in accordance with the Agreement. Payments from the Construction Fund shall be by check or voucher signed by either the Chief Executive Officer or the Finance Director of the System, and drawn on the depository. Each such check or voucher shall briefly specify the purpose of the expenditure. Section 17. The terms and provisions of this Ordinance shall constitute a binding contract among the City, the Bondholder and the Commission, and no variation or change in the undertaking herein set forth shall be made while the 2007B Bond is outstanding unless consented to in writing by the Bondholder and the Commission. 4835- 6881 - 1521.2 13 Section 18. The City agrees that the Committee will keep proper records, books and accounts relating to the operation of the System, which shall be kept separate from all other records and accounts of the City, in which complete and correct entries shall be made of all transactions relating to the operation of the System in accordance with generally accepted government accounting standards. Such books shall be available for inspection by the Bondholder and the Commission, or the agent or the representative of either, at reasonable times and under reasonable circumstances. The City agrees to have these records audited by an Accountant selected by the Committee at least once each year. In the event the Committee fails or refuses to furnish or cause such reports to be furnished, the Bondholder may have the reports made, and the cost thereof shall be charged against the Sewer Operation and Maintenance Fund. Section 19. The City covenants and agrees that it will maintain the System in good condition and operate it in an efficient manner and at reasonable cost. While the 2007B Bond is outstanding, the City agrees that it will insure, and at all times keep insured, in the amount of the actual value thereof, in a responsible insurance company or companies selected by the Committee and authorized and qualified under the laws of the State of Arkansas to assume the risk thereof, all above - ground structures of the System against loss or damage thereto from fire, lightning, tornado, winds, riot, strike, civil commotion, malicious damage, explosion, and against loss or damage from any other causes customarily insured against in connection with similar facilities and undertakings as the System. In the event of loss, the proceeds of such insurance shall be applied solely toward the reconstruction, replacement or repair of the System, and in such event the City will, with reasonable promptness, cause to be commenced and completed the reconstruction, replacement and repair work. If such proceeds are more than sufficient for such purposes, the balance remaining shall be deposited to the credit of the Sewer Fund, and if such proceeds shall be insufficient for such purposes, the deficiency shall be supplied, first, from moneys in the Sewer Depreciation Fund maintained in accordance with the 2001 Ordinance, second, from moneys in the Sewer Operation and Maintenance Fund, and third, from available moneys in the Sewer Fund. Nothing herein shall be construed as requiring the City to expend any funds for reconstruction, replacement or repair of the System or for operation and maintenance of the System or for premiums on its insurance which are derived from sources other than insurance proceeds or System revenues, but nothing herein shall be construed as preventing the City from doing so. Section 20. The City agrees that the Bondholder may pledge the 2007B Bond as security for the payment of its wastewater system revolving loan fund revenue bonds (the "ADFA Bonds "), and the trustee or municipal bond insurer for the ADFA Bonds may exercise any rights or remedies available to the Bondholder under this Ordinance or the Agreement while the 2007B Bond is pledged and /or the ADFA Bonds are insured. In addition, the City agrees that while the 2007B Bond is pledged and /or the ADFA Bonds are insured, copies of all financial information relating to the System shall be furnished to the trustee and /or the municipal insurer for the ADFA Bonds. Section 21. In the event the offices of Mayor, City Clerk, Chief Executive Officer of the System, Finance Director of the System, Board of Directors, or Committee shall be abolished, or any two or more of such offices shall be merged or consolidated, or in the event the 4835- 6881- 1521.2 14 duties of a particular office shall be transferred to another office or officer, or in the event of a vacancy in any such office by reason of death, resignation, removal from office, or otherwise, or in the event any such officer shall become incapable of performing the duties of his office by reason of sickness, absence from the City, or otherwise, all powers conferred and all obligations and duties imposed upon such office or officer shall be performed by the office or officer succeeding to the principal function thereof, or by the office or officer upon whom such powers, obligations, and duties shall be imposed by law. Section 22. It is understood and agreed that the Committee, acting for and on behalf of the City, has custody of and control over the System, operates, maintains and repairs the System and collects and handles System revenues. Therefore, it is understood and agreed that even though there are some express references to the Committee, all references herein to the City shall, when appropriate in view of the authority and responsibility of the Committee, be construed to mean and include the Committee. So long as the Committee operates the System for the City, performance by the Committee of any right or obligation of the City hereunder shall be deemed performance by the City. The Committee presently consists of Patrick D Miller, Chairman, Charles G. Goss, Vice Chair, James R. Pender, Secretary, Dale J. Wintroath, Jr., and Andrew L. Harper, Jr. Section 23. 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 24. Reference in this Ordinance to "Bondholder" shall include the original Bondholder or any registered assign thereof. Section 25. All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. 4835- 6881 - 1521.2 15 Section 26. It is hereby ascertained and declared that the Project must be accomplished as soon as possible in order to make the System adequate for the needs of the City and its inhabitants, without which the life, health, safety and welfare thereof are jeopardized, and that the issuance of the 2007B Bond and the taking of the other action authorized by this Ordinance is necessary for the accomplishment thereof. It is, therefore, declared that an emergency exists and this Ordinance being necessary for the immediate preservation of the public peace, health and safety shall take effect and be in force from and after its passage. ADOPTED AND APPROVED THIS 19th DAY OF JUNE, 2007. Mark Stodola, Mayor ATTEST: n arc" Nat 4i S. Blocker, Assistant City Clerk T:L'•,,,��� For Nancy Wood, City Clerk (SEAL) i r r APPROVED AS TO FORM: Apteei,\ :e Tom Carpenter, City Attorne 4835- 6881 - 1521.2 16 CERTIFICATION STATE OF ARKANSAS } COUNTY OF PULASKI } CITY OF LITTLE ROCK } + T TLE s • �f'Ff�rdrrrrtitit11�1,`,`4 I, Nataki S. Blocker, Assistant City Clerk within and for the City aforesaid, do hereby certify that the foregoing is a true and correct copy of Ordinance No. 19,763 of the Ordinances of the City of Little Rock, Arkansas, entitled: "AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $18,000,000 OF A SEWER REVENUE BOND, SERIES 2007B, BY THE CITY OF LITTLE ROCK, ARKANSAS FOR THE PURPOSE OF FINANCING THE COSTS OF CERTAIN SEWER COLLECTION SYSTEM IMPROVEMENTS; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE SERIES 2007B BOND; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF THE SERIES 2007B BOND; PRESCRIBING OTHER MATTERS RELATING THERETO; AND DECLARING AN EMERGENCY" Passed by the Board of Directors of said City on June 19, 2007, as the same now appears of record in this office. IN WITNESS WHEREOF, I have hereunto set my hand and Seal of Office on this 20th day of June, 2007. �4�i a nt Cty Clerk City of Little Rock, Arkansas , �nnrrnrnn„Aym� �'�' G Ty r- - of - = -� V % o 0 A N _A 4835- 6881 -15212 17