HomeMy WebLinkAbout2024-01-18-AGENDA-SpecialRick Elumbaugh, Mayor
Denise Johnston, Clerk
Timothy Meitzen, Attorney
A
HISTORIC
TREASURE
S' OLDES'C
AGENDA
CITY OF BATESVILLE
CITY COUNCIL
500 EAST MAIN
BATESVILLE, AR 72501
SPECIAL MEETING
January 18, 2023
12:15 P.M.
COUNCILMEMBER
Brittany Bennett
Scott Fredricks
Julie Hinkle
Paige Hubbard
Fred Krug
Douglas Matthews
Chris Poole
Landon Reeves
****************************************************************************************************
1. CALL TO ORDER
2. ROLL CALL BY CITY CLERK
3. APPROVAL OF AGENDA
4. NEW BUSINESS
A) Consider a resolution authorizing the donation of property to the
Arkansas State Highway Commission
B) Consider an ordinance authorizing the issuance of Sales and Use Tax
Refunding and Improvement bonds for the purpose of financing and
refinancing all or a portion of the cost of Capital Improvements
5. COMMENTS FROM THE MAYOR
6. ADJOURNMENT
Batesville- My Hometown... Make it Yours!
RESOLUTION #
A RESOLUTION AUTHORIZING THE DONATION OF PROPERTY TO THE
ARKANSAS STATE HIGHWAY COMMISSION
WHEREAS, that the Arkansas Department of Transportation is in the process of widening
Highway 69 from its intersection with 394 through Moorefield; and
WHEREAS, that said widening necessitates that the city deed certain property to the State
Highway Department; and
WHEREAS, the City of Batesville finds that this project will help with economic growth in
Batesville and Moorefield; and
WHEREAS, that said property is not being used by the city, and therefore the city may
lawfully donate the property to the Arkansas State Highway Commission per Arkansas Code
Annotated § 14-54-302.
NOW, THEREFORE BE IT RESOLVED, BY THE CITY COUNCIL OF THE
CITY OF BATESVILLE, ARKANSAS
SECTION 1: That the City of Batesville hereby authorizes the Mayor to enter into the
Agreement for Donation of Real Estate For Highway Purposes which is attached hereto and
incorporated herein by reference.
PASSED AND APPROVED this _`h day of January, 2024.
Rick Elumbaugh, Mayor
ATTEST:
Denise Johnston, City Clerk
JOB NAME: Hwy. 394 — Moorefield (S) Hwy. 69 JOB NO. 050420
TRACT NO. 16
AGREEMENT FOR DONATION
REAL ESTATE FOR HIGHWAY PURPOSES
Grantor: City of Batesville
Address: 500 E. Main Street #100, Batesville, AR 72501
Grantee: Arkansas State Highway Commission
IN CONSIDERATION of the benefits that will inure to the Grantor(s) and the public, the
undersigned does hereby agree, without any remuneration or monetary consideration, to donate
to the Arkansas State Highway Commission, Grantee, and unto it successors and assigns, upon
the terms and conditions hereinafter set forth, the following lands situated in the County of
Clark, State of Arkansas, to -wit:
LEGAL DESCRIPTION
In Accordance with Public Law 91-646 as Amended by Public Law 100-17, Title III,
Section 301, et seq. of the Uniform Relocation Assistance and Real Property Acquisition Policies
Act, the Grantor/s is/are entitled to receive an appraisal to establish the value of the lands
donated as well as just compensation for such donation. Grantor/s does/do hereby waive receipt
of the authorized appraisal of the (lands) donated and do hereby waive all of her/his/their right/s
to any compensation or monetary remuneration for the property described herein.
Part of the Northeast Quarter of the Southwest Quarter of Section 13, Township 13 North, Range
6 West, Independence County, Arkansas being more particularly described as follows:
COMMENCING at a computed corner being used as Center Quarter Corner of said Section 134
thence South 01 °41'07" West, along the East line of the Northeast Quarter of the Southwest
Quarter of said Section 13 a distance of 162.65 feet to a point on the South right of way line of
Arkansas State Highway 69 (Harrison Street) as established by AHTD Job 5659 and the POINT
OF BEGINNING; thence continue South 01 °41'07" West, a distance of 11.06 feet to a point on
the South right of way line of Arkansas State Highway 69 (Harrison Street) as established by
ARDOT Job 050420; thence South 65'56' 17" West, along said South right of way line a distance
of l 15.85 feet to a point; thence North 12°06'20" East, a distance of 14.93 feet to a point on the
South right of way line of Arkansas State Highway 69 (Harrison Street) as established by AHTD
Job 5659; thence North 82°08'16" East, along said South right of way line a distance of 18.12
feet to a point; thence North 65°50'25" East, along said South right of way line a distance of
48.36 feet to a point; thence North 62°21'36" East, along said South right of way line a distance
of 46.18 feet to the POINT OF BEGINNING and containing 0.02 acres (928 sq. ft.) more or less
as shown on plans prepared by the ARDOT referenced as Job 050420.
DWB 05/25/22
® Uncontrolled Access
❑ Partially Controlled Access — Access break from Station to Station
❑ Fully Controlled Access
❑ Fully Controlled Access with a frontage road
❑ Maintenance Agreement
PREAUDITED AND ACCEPTED: Property Manager to Negotiator
By Date
Closing costs will not accrue to the Grantor(s) as the Grantee's Attorney will prepare the
necessary documents for closing and the Grantee will pay the cost of recording all instruments
conveying title to the Arkansas State Highway Commission.
WITNESS my/our hands/s on this_L&day of , 20a4.
Signature Signature
Signature Signature
ACKNOWLEDGMENT
STATE OF ARKANSAS
COUNTY OFf\.C,
BE IT REMEMBERED, that on this day before the undersigned, a Notary Public, within
and for e County and State aforesaid, duly commissioned and acting, appeared in
person t.L 0 j, to me well known as the Grantor(s) in
the foregoing instrument, and stdied that he/she/they had executed the same for the consideration
and purposes therein mentioned and set forth.
WITNESS my hand and seal as such Notary Public this 9* day of ,
20,;I
Lvn iv\
MY COMMISSION EXPIRES: -30 cia)31)'NOTARY P0131,1C
DENISE M JOHNSTON
NOTARY PUBLIC -STATE OF ARKANSAS
INDEPENDENCE COUNTY
My Commission Expires 03/01/2032
Commission # 12387082
ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE ISSUANCE OF
SALES AND USE TAX REFUNDING AND IMPROVEMENT
BONDS FOR THE PURPOSE OF FINANCING AND
REFINANCING ALL OR A PORTION OF THE COST OF
CAPITAL IMPROVEMENTS; PLEDGING SALES AND USE
TAXES AGGREGATING 1 % TO PAY THE PRINCIPAL OF
AND INTEREST ON THE BONDS; PRESCRIBING OTHER
MATTERS RELATING THERETO; AND DECLARING AN
EMERGENCY.
WHEREAS, there was submitted to the qualified electors of the City of Batesville,
Arkansas (the "City") at a special election held August 8, 2023, the questions of issuing, under
Amendment No. 62 to the Constitution of the State of Arkansas (the "State") and under Title 14,
Chapter 164, Subchapter 3 of the Arkansas Code of 1987 Annotated (the "Authorizing
Legislation"), (a) capital improvement bonds in one or more series in the maximum aggregate
principal amount of $12,820,000 for the purpose of refunding the City's outstanding Sales and Use
Tax Bonds, Series 2012 (the "Refunding"); and (b) capital improvement bonds in one or more
series in the maximum aggregate principal amount of $25,985,000 for the purpose of financing all
or a portion of the costs of park and recreational facilities and improvements and any necessary
land acquisition, demolition, furnishings, equipment and parking, lighting, landscaping, street,
drainage and utility improvements related thereto (collectively, the "Improvements"); and
WHEREAS, a majority of the electors voting on the questions approved the
issuance of such bonds; and
WHEREAS, the City Council has determined to proceed with the Refunding and
to issue capital improvement bonds designated as "City of Batesville, Arkansas Sales and Use Tax
Bonds, Taxable Refunding Series 2024A" (the "Series 2024A Bonds") in the aggregate principal
amount of $ ; and
WHEREAS, the City Council has determined to proceed with the Improvements
and to issue capital improvement bonds designated as "City of Batesville, Arkansas Sales and Use
Tax Bonds, Improvement Series 2024B" (the "Series 2024B Bonds") in the aggregate principal
amount of $ ; and
WHEREAS, the City has made arrangements for the sale of (a) the Series 2024A
Bonds to Crews & Associates, Inc. (the "Purchaser"), at a price of $ (principal amount
$ of net original issue and less $ of underwriter's
discount) (the "2024A Purchase Price") and (b) the Series 2024B Bonds to the Purchaser, at a price
of $ (principal amount $ of net original issue and less
$ of underwriter's discount) (the "2024B Purchase Price"), pursuant to a Bond
Purchase Agreement between the Purchaser and the City (the "Purchase Agreement"), which has
been presented to and is before this meeting; and
WHEREAS, the Preliminary Official Statement, dated January 9, 2024, offering
the Series 2024A and the Series 2024B Bonds (collectively, the "bonds") for sale (the "Preliminary
Official Statement"), has been presented to and is before this meeting; and
WHEREAS, the Continuing Disclosure Agreement between the City and The
Citizens Bank, Batesville, Arkansas (the "Disclosure Agreement"), providing for the disclosure
obligations of the City with respect to the bonds, has been presented to and is before this meeting;
and
WHEREAS, payment of the scheduled principal of and interest on the bonds when
due is guaranteed by Build America Mutual Assurance Company, or any successor thereto or
assignee thereof (the "Insurer"), pursuant to a municipal bond insurance policy or policies
(collectively, the "Insurance Policy"), as set forth in the Insurance Policy;
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of
Batesville, Arkansas:
Section 1. The Refunding and the Improvements shall be accomplished, and
the Mayor and City Clerk are hereby authorized to take all action necessary in connection therewith
and to execute all required contracts and documents. The City's Sales and Use Tax Bonds, Series
2012 (the "Bonds Refunded") will be redeemed on the date the bonds are issued at a price of par
plus accrued interest.
Section 2. The offer of the Purchaser for the purchase of (a) the Series 2024A
Bonds from the City at the 2024A Purchase Price and (b) the Series 2024B Bonds from the City
at the 2024B Purchase Price, subject to the terms and provisions hereafter in this Ordinance set
forth in detail, is hereby accepted and the Purchase Agreement, in substantially the form submitted
to this meeting, is approved and the bonds are hereby sold to the Purchaser. The Mayor is hereby
authorized and directed to execute and deliver the Purchase Agreement on behalf of the City and
to take all action required on the part of the City to fulfill its obligations under the Purchase
Agreement.
Section 3. The Preliminary Official Statement is hereby approved and the
previous use of the Preliminary Official Statement by the Purchaser in connection with the sale of
the bonds is hereby in all respects approved and confirmed, and the Mayor is hereby authorized
and directed, for and on behalf of the City, to execute the Preliminary Official Statement and the
final Official Statement in the name of the City for use in connection with the sale of such bonds
as set forth in the Purchase Agreement.
Section 4. Under the authority of the Constitution and laws of the State,
including particularly Amendment No. 62 to the Constitution of the State and the Authorizing
Legislation, (a) the Series 2024A Bonds are hereby authorized and ordered issued in the total
principal amount of $ for the purpose of financing all or a portion of the costs of
2
accomplishing the Refunding, paying expenses incidental thereto and expenses of issuing and
insuring the Series 2024A Bonds and partially funding a debt service reserve and (b) the Series
2024B Bonds are hereby authorized and ordered issued in the total principal amount of $
for the purpose of financing all or a portion of costs of the Improvements, paying expenses
incidental thereto and expenses of issuing and insuring the Series 2024B Bonds and partially
funding a debt service reserve.
The bonds shall bear interest at the rates and shall mature on February 1 in the
amounts and in the years as follows:
SERIES 2024A BONDS
Year Principal
(February 1) Amount Interest Rate
SERIES 2024B BONDS
Year Principal
(February 1) Amount Interest Rate
The bonds shall be issuable only as fully registered bonds without coupons in the
denomination of $5,000 or any integral multiple thereof. Unless the City shall otherwise direct,
the bonds shall be numbered from 1 upward in order of issuance. Each bond shall have a CUSIP
number but the failure of a CUSIP number to appear on any bond shall not affect its validity.
The bonds shall be registered initially in the name of Cede & Co., as nominee for
The Depository Trust Company ("DTC"), which shall be considered to be the registered owner of
the bonds for all purposes under this Ordinance, including, without limitation, payment by the City
of principal of, redemption price, premium, if any, and interest on the bonds, and receipt of notices
and exercise of rights of registered owners. There shall be one certificated, typewritten bond for
each stated maturity date of each series which shall be immobilized in the custody of or on behalf
of DTC with the beneficial owners having no right to receive the bonds in the form of physical
securities or certificates. DTC and its participants shall be responsible for maintenance of records
of the ownership of beneficial interests in the bonds by book -entry on the system maintained and
operated by DTC and its participants, and transfers of ownership of beneficial interests shall be
3
made only by DTC and its participants, by book -entry, -the City having no responsibility therefor.
DTC is expected to maintain records of the positions of participants in the bonds, and the
participants and persons acting through participants are expected to maintain records of the
purchasers of beneficial interests in the bonds. The bonds as such shall not be transferable or
exchangeable, except for transfer to another securities depository or to another nominee of a
securities depository, without further action by the City.
If any securities depository determines not to continue to act as a securities
depository for the bonds for use in a book -entry system, the City may establish a securities
depository/book-entry system relationship with another securities depository. If the City does not
or is unable to do so, or upon request of the beneficial owners of all outstanding bonds, the City
and the Trustee (hereinafter identified), after the Trustee has made provision for notification of the
beneficial owners by the then securities depository, shall permit withdrawal of the bonds from the
securities depository, and authenticate and deliver bond certificates in fully registered form (in
denominations of $5,000 or integral multiples thereof) to the assigns of the securities depository
or its nominee, all at the cost and expense (including costs of printing definitive bonds) of the City,
if the City fails to maintain a securities depository/book-entry system, or of the beneficial owners,
if they request termination of the system.
Prior to issuance of the bonds, the City shall have executed and delivered to DTC
a written agreement (the "Representation Letter") setting forth (or incorporating therein by
reference) certain undertakings and responsibilities of the City with respect to the bonds so long
as the bonds or a portion thereof are registered in the name of Cede & Co. (or a substitute nominee)
and held by DTC. Notwithstanding such execution and delivery of the Representation Letter, the
terms thereof shall not in any way limit the provisions of this Section or in any other way impose
upon the City any obligation whatsoever with respect to persons having interests in the bonds other
than the registered owners, as shown on the registration books kept by the Trustee. The Trustee
shall take all action necessary for all representations of the City in the Representation Letter with
respect to the Trustee to at all times be complied with.
The authorized officers of the Trustee and the City shall do or perform such acts
and execute all such certificates, documents and other instruments as they or any of them deem
necessary or advisable to facilitate the efficient use of a securities depository for all or any portion
of the bonds; provided that neither the Trustee nor the City may assume any obligations to such
securities depository or beneficial owners of bonds that are inconsistent with their obligations to
any registered owner under this Ordinance.
Each bond shall be dated as of its date of delivery to the Purchaser. Interest on the
bonds shall be payable on August 1, 2024 and semiannually thereafter on February 1 and August
1 of each year. Payment of each installment of interest shall be made by the Trustee to the person
in whose name the bond is registered on the registration books of the City maintained by The
Citizens Bank, Batesville, Arkansas, as Trustee and Paying Agent (the "Trustee"), at the close of
business on the fifteenth day of the month (whether or not a business day) next preceding each
interest payment date (the "Record Date"), irrespective of any transfer or exchange of any such
bond subsequent to such Record Date and prior to such interest payment date, by check or draft to
2
such owner at his address on such registration books. Principal of the bonds shall be payable at
the corporate trust office of the Trustee.
Each bond shall bear interest from the 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 prior to the first interest payment
date, in which event it shall bear interest from its dated 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 at the time of authentication thereof interest is
in default thereon, in which event it shall bear interest from the date to which interest has been
paid.
Only such bonds as shall have endorsed thereon a Certificate of Authentication
substantially in the form set forth in Section 6 hereof (the "Certificate") duly executed by the
Trustee shall be entitled to any right or benefit under this Ordinance. No bond shall be valid and
obligatory for any purpose unless and until the Certificate shall have been duly executed by the
Trustee, and the Certificate of the Trustee upon any such bond shall be conclusive evidence that
such bond has been authenticated and delivered under this Ordinance. The Certificate on any bond
shall be deemed to have been executed if signed by an authorized officer of the Trustee, but it shall
not be necessary that the same officer sign the Certificate on all of the bonds.
In case any bond shall become mutilated or be destroyed or lost, the City shall, if
not then prohibited by law, cause to be executed and the Trustee may authenticate and deliver a
new bond of like date, maturity and tenor in exchange and substitution for and upon cancellation
of such mutilated bond, or in lieu of and in substitution for such bond destroyed or lost, upon the
owner paying the reasonable expenses and charges of the City and Trustee in connection therewith,
and, in the case of a bond destroyed or lost, his filing with the Trustee evidence satisfactory to it
that such bond was destroyed or lost, and of his ownership thereof, and furnishing the City and
Trustee with indemnity satisfactory to them. The Trustee is hereby authorized to authenticate any
such new bond. In the event any such bond shall have matured, instead of issuing a new bond, the
City may pay the same without the surrender thereof. Upon the issuance of a new bond under this
Section, the City may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
The City shall cause books to be maintained for the registration and for the transfer
of the bonds as provided herein and in the bonds. The Trustee shall act as the bond registrar. Each
bond is transferable by the registered owner thereof or by his attorney duly authorized in writing
at the principal office of the Trustee. Upon such transfer a new fully registered bond or bonds of
the same maturity and series, of authorized denomination or denominations, for the same aggregate
principal amount will be issued to the transferee in exchange therefor.
Bonds may be exchanged at the principal corporate trust office of the Trustee for
an equal aggregate principal amount of bonds of any other authorized denomination or
denominations. The City shall execute and the Trustee shall authenticate and deliver bonds which
the registered owner making the exchange is entitled to receive.
5
No charge shall be made to any owner of any bond for the privilege of transfer or
exchange, but any owner of any bond requesting any such transfer or exchange shall pay any tax
or other governmental charge required to be paid with respect thereto. Except as otherwise
provided in the immediately preceding sentence, the cost of preparing each new bond upon each
exchange or transfer and any other expenses of the City or the Trustee incurred in connection
therewith shall be paid by the City. Neither the Trustee nor the City shall be required to transfer
or exchange any bonds selected for redemption in whole or in part.
The person in whose name any bond shall be registered shall be deemed and
regarded as the absolute owner thereof for all purposes, and payment of or on account of the
principal or premium, if any, or interest on any bond shall be made only to or upon the order of
the registered owner thereof or his legal representative, but such registration may be changed as
hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such bond to the extent of the sum or sums so paid.
In any case where the date of maturity of interest on or principal of the bonds or the
date fixed for redemption of any bonds shall be a Saturday or Sunday or shall be in the State 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.
Section 5. The bonds shall be executed on behalf of the City by the manual or
facsimile signatures of the Mayor and City Clerk and shall have impressed or imprinted thereon
the seal of the City.
Section 6. The bonds and the Certificate shall be in substantially the following
form and the Mayor and City Clerk are hereby expressly authorized and directed to make all
recitals contained therein:
(Form of Series 2024A Bond)
REGISTERED REGISTERED
No. $
UNITED STATES OF AMERICA
STATE OF ARKANSAS
COUNTY OF INDEPENDENCE
CITY OF BATESVILLE
SALES AND USE TAX BOND
TAXABLE REFUNDING SERIES 2024A
Interest Rate: % Maturity Date: February 1,
Dated Date: February 23, 2024
Registered Owner: Cede & Co.
Principal Amount:
CUSIP No.:
KNOW ALL MEN BY THESE PRESENTS:
Dollars
That the City of Batesville, County of Independence, State of Arkansas (the "City"),
for value received, hereby promises to pay to the Registered Owner shown above upon the
presentation and surrender hereof at the principal corporate trust office of The Citizens Bank,
Batesville, Arkansas, or its successor or successors, as Trustee and Paying Agent (the "Trustee"),
on the Maturity Date shown above, the Principal Amount shown above, in such coin or currency
of the United States of America as at the time of payment shall be legal tender for the payment of
public and private debts and to pay by check or draft to the Registered Owner shown above interest
thereon, in like coin or currency from the interest commencement date described below at the
Interest Rate per annum shown above, payable on August 1, 2024 and on each February 1 and
August 1 thereafter, until payment of such Principal Amount or, if this bond or a portion hereof
shall be duly called for redemption, until the date fixed for redemption, and to pay interest on
overdue principal and interest (to the extent legally enforceable) at the rate borne by this bond.
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 Trustee at the close of business
on the fifteenth day of the month (whether or not a 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.
Unless this bond is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Trustee 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 shall bear interest from the 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.
7
This bond is one of an issue of City of Batesville, Arkansas Sales and Use Tax
Bonds, Taxable Refunding Series 2024A, aggregating Million Hundred
Thousand Dollars ($ ) in aggregate principal amount (the "Series 2024A Bonds"),
and is issued for the purpose of financing all or a portion of the costs of refunding the City's Sales
and Use Tax Bonds, Series 2012, paying necessary expenses incidental thereto, paying expenses
of authorizing, issuing and insuring the Series 2024A Bonds and partially funding a debt service
reserve. The City is also issuing its Sales and Use Tax Bonds, Improvement Series 2024B (the
"Series 2024B Bonds") and the Series 2024A Bonds and the Series 2024B Bonds (collectively, the
"bonds") are equally and ratably secured.
The bonds are issued pursuant to and in full compliance with the Constitution and
laws of the State of Arkansas (the "State"), particularly Amendment No. 62 to the Constitution of
the State and Title 14, Chapter 164, Subchapter 3 of the Arkansas Code of 1987 Annotated (the
"Authorizing Legislation"), and pursuant to Ordinance No. of the City duly adopted on
January 18, 2024 (the "Authorizing Ordinance"), and an election duly held at which the majority
of the legal voters of the City voting on the questions approved the issuance of the bonds.
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, the Trustee and the registered owners of
the bonds. The bonds are special obligations of the City, payable from (a) a 0.5% sales and use
tax levied by the City under the authority of Title 26, Chapter 75, Subchapter 2 of the Arkansas
Code of 1987 Annotated and Ordinance No. 2011-12-05 adopted on December 27, 2011, as
amended by Ordinance No. 2023-05-02 adopted on May 23, 2023 (the "Bond Tax") and (b) a 0.5%
sales and use tax levied by the City under the authority of Title 26, Chapter 75, Subchapter 2 of
the Arkansas Code of 1987 Annotated and Ordinance No. 2011-12-03 adopted on December 27,
2011 (the "Permanent Tax"), and the City hereby pledges the collections of the Bond Tax and the
Permanent Tax for the payment of this bond.
The Series 2024A Bonds are subject to extraordinary, optional and mandatory
sinking fund redemption prior to maturity as follows:
(1) The Series 2024A Bonds shall be redeemed by the City from Surplus Bond
Tax Receipts (defined below), at least annually, and from proceeds of the Series 2024A Bonds not
needed for the purposes intended, in whole at any time or in part on any interest payment date, at
a redemption price equal to the principal amount being redeemed plus accrued interest to the
redemption date, in inverse order of maturity (and by lot within a maturity in such manner as the
Trustee may determine).
In the case of any defeasance of the Series 2024A Bonds, redemption of defeased
Series 2024A Bonds shall be scheduled on the basis of the mandatory redemption requirements
and assuming collections of the Bond Tax in an amount equal to receipts for the most recent
twelve-month period.
(2) The Series 2024A Bonds are subject to redemption at the option of the
City, from funds from any source, on and after February 1, 2031, in whole or in part at any time,
at a redemption price equal to the principal amount being redeemed plus accrued interest to the
redemption date. If fewer than all of the Series 2024A Bonds shall be called for redemption, the
8
particular maturities to be redeemed shall be selected by the City in its discretion. If fewer than
all of the Series 2024A Bonds of any one maturity shall be called for redemption, the particular
Series 2024A Bonds or portion thereof to be redeemed from such maturity shall be selected by lot
by the Trustee.
(3) To the extent not previously redeemed, the Series 2024A Bonds maturing
on February 1 in the years are subject to mandatory sinking fund
redemption by lot in such manner as the Trustee shall determine, on February 1 in the years and in
the amounts set forth below, at a redemption price equal to the principal amount being redeemed
plus accrued interest to the date of redemption:
Series 2024A Bonds Maturing February 1,
Principal
Year Amount
Series 2024A Bonds Maturing February 1,
Principal
Year Amount
Series 2024A Bonds Maturing February 1,
Principal
Year Amount
In case any outstanding bond is in a denomination greater than $5,000, each $5,000
of face value of such bond shall be treated as a separate bond of the denomination of $5,000.
The City has covenanted in the Authorizing Ordinance that Surplus Bond Tax
Receipts, being collections of the Bond Tax in excess of the amount necessary to (a) ensure the
prompt payment of the principal of, interest on and Trustee's fees and expenses and other
administrative charges in connection with the bonds as the same become due, (b) pay any arbitrage
rebate payments due under Section 148(f) of the Internal Revenue Code of 1986, as amended, (c)
Z
maintain the debt service reserve in the required amount and (d) pay any amounts due with respect
to the municipal bond insurance policy issued in connection with the bonds, must be used from
time to time on each interest payment date, but in any event not less often than annually, as and to
the extent available to redeem outstanding bonds prior to maturity. The debt service reserve shall
be used as part of the Surplus Bond Tax Receipts for the purpose of making the final principal and
interest payment on the bonds, whether at maturity or at redemption prior to maturity. Surplus
Bond Tax Receipts shall be used to redeem the Series 2024A Bonds in full before any Series
2024B Bonds are redeemed from Surplus Bond Tax Receipts.
Notice of redemption identifying the bonds or portions thereof (which shall be
$5,000 or a multiple thereof) to be redeemed and the date they shall be presented for payment shall
be given by the Trustee, not less than 30 nor more than 60 days prior to the date fixed for
redemption, by sending a copy of the redemption notice by first class mail, postage prepaid, or
other acceptable standard means of delivery, including facsimile or electronic communication, to
all registered owners of bonds to be redeemed. Failure to send 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 in proper
and timely fashion. All such bonds or portions thereof thus called for redemption and for the
retirement of which funds are duly provided in accordance with the Authorizing Ordinance prior
to the date fixed for redemption will cease to bear interest on such redemption date.
This bond is transferable by the Registered Owner shown above in person or by his
attorney -in -fact duly authorized in writing at the principal corporate trust office of the Trustee, but
only in the manner, subject to the limitations and upon payment of the charges provided in the
Authorizing Ordinance, and upon surrender and cancellation of this bond. Upon such transfer a
new fully registered bond or bonds of the same maturity and series, of authorized denomination or
denominations, for the same aggregate principal amount, will be issued to the transferee in
exchange therefor. This bond is issued with the intent that the laws of the State shall govern its
construction.
The City and the Trustee may deem and treat the Registered Owner shown above
as the absolute owner hereof for the purpose of receiving payment of or on account of principal
hereof and interest due hereon and for all other purposes, and neither the City nor the Trustee shall
be affected by any notice to the contrary.
The bonds are issuable only as fully registered bonds in the denomination of $5,000,
and any integral multiple thereof. Subject to the limitations and upon payment of the charges
provided in the Authorizing Ordinance, fully registered bonds may be exchanged for a like
aggregate principal amount of fully registered bonds of the same maturity and series of other
authorized denominations.
This bond shall not be valid until it shall have been authenticated by the Certificate
hereon duly signed by the Trustee.
10
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required to exist, happen and be performed, under the Constitution and laws
of the State, particularly Amendment No. 62 to the Constitution of the State and the Authorizing
Legislation, precedent to and in the issuance of this bond have existed, have happened and have
been performed in due time, form 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 taxes sufficient to pay the bonds and interest thereon have been duly levied in
accordance with the Authorizing Legislation and made payable until all of the bonds and interest
thereon have been fully paid and discharged.
IN. WITNESS WHEREOF, the City of Batesville, Arkansas has caused this bond
to be executed by its Mayor and City Clerk and its corporate seal to be impressed or imprinted on
this bond, all as of the Dated Date shown above.
ATTEST:
(SEAL)
CITY OF BATESVILLE, ARKANSAS
City Clerk
Mayor
[A Statement of Insurance provided by the
Insurer shall be placed on the Series 2024A Bond]
(Form of Trustee's Certificate)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This bond is one of the Series 2024A Bonds issued under the provisions of the
within mentioned Authorizing Ordinance.
Date of Authentication: , 2024
THE CITIZENS BANK
Batesville, Arkansas
TRUSTEE
Authorized Signature
11
(Form of Assignment)
ASSIGNMENT
FOR VALUE RECEIVED, ("Transferor"), hereby sells,
assigns and transfers unto , the within bond and all rights thereunder, and hereby
irrevocably constitutes and appoints as attorney to transfer the within bond on
the books kept for registration thereof with full power of substitution in the premises.
DATE:
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.
(Form of Series 2024B Bond)
REGISTERED REGISTERED
No. $
UNITED STATES OF AMERICA
STATE OF ARKANSAS
COUNTY OF INDEPENDENCE
CITY OF BATESVILLE
SALES AND USE TAX BOND
IMPROVEMENT SERIES 2024B
Interest Rate: % Maturity Date: February 1,
Dated Date: February 23, 2024
Registered Owner: Cede & Co.
Principal Amount: Dollars
CUSIP No.:
KNOW ALL MEN BY THESE PRESENTS:
That the City of Batesville, County of Independence, State of Arkansas (the "City"),
for value received, hereby promises to pay to the Registered Owner shown above upon the
presentation and surrender hereof at the principal corporate trust office of The Citizens Bank,
Batesville, Arkansas, or its successor or successors, as Trustee and Paying Agent (the "Trustee"),
on the Maturity Date shown above, the Principal Amount shown above, in such coin or currency
12
of the United States of America as at the time of payment shall be legal tender for the payment of
public and private debts and to pay by check or draft to the Registered Owner shown above interest
thereon, in like coin or currency from the interest commencement date described below at the
Interest Rate per annum shown above, payable on August 1, 2024 and on each February 1 and
August 1 thereafter, until payment of such Principal Amount or, if this bond or a portion hereof
shall be duly called for redemption, until the date fixed for redemption, and to pay interest on
overdue principal and interest (to the extent legally enforceable) at the rate borne by this bond.
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 Trustee at the close of business
on the fifteenth day of the month (whether or not a 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.
Unless this bond is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Trustee 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 shall bear interest from the 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.
This bond is one of an issue of City of Batesville, Arkansas Sales and Use Tax
Bonds, Improvement Series 2024B, aggregating Million Hundred
Thousand Dollars ($ ) in aggregate principal amount (the "Series 2024B Bonds"), and
is issued for the purpose of financing all or a portion of the costs of park and recreational facilities
and improvements, paying necessary expenses incidental thereto, paying expenses of authorizing,
issuing and insuring the Series 2024B Bonds and partially funding a debt service reserve. The
City is also issuing its Sales and Use Tax Bonds, Taxable Refunding Series 2024A (the "Series
2024A Bonds") and the Series 2024A Bonds and the Series 2024B Bonds (collectively, the
"bonds") are equally and ratably secured.
The bonds are issued pursuant to and in full compliance with the Constitution and
laws of the State of Arkansas (the "State"), particularly Amendment No. 62 to the Constitution of
the State and Title 14, Chapter 164, Subchapter 3 of the Arkansas Code of 1987 Annotated (the
"Authorizing Legislation"), and pursuant to Ordinance No. of the City duly adopted on
January 18, 2024 (the "Authorizing Ordinance"), and an election duly held at which the majority
13
of the legal voters of the City voting on the questions approved the issuance of the bonds.
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, the Trustee and the registered owners of
the bonds. The bonds are special obligations of the City, payable from (a) a 0.5% sales and use
tax levied by the City under the authority of Title 26, Chapter 75, Subchapter 2 of the Arkansas
Code of 1987 Annotated and Ordinance No. 2011-12-05 adopted on December 27, 2011, as
amended by Ordinance No. 2023-05-02 adopted on May 23, 2023 (the "Bond Tax") and (b) a 0.5%
sales and use tax levied by the City under the authority of Title 26, Chapter 75, Subchapter 2 of
the Arkansas Code of 1987 Annotated and Ordinance No. 2011-12-03 adopted on December 27,
2011 (the "Permanent Tax"), and the City hereby pledges the collections of the Bond Tax and the
Permanent Tax for the payment of this bond.
The Series 2024B Bonds are subject to extraordinary, optional and mandatory
sinking fund redemption prior to maturity as follows:
(1) The Series 2024B Bonds shall be redeemed by the City from Surplus Bond
Tax Receipts (defined below), at least annually, and from proceeds of the Series 2024B Bonds not
needed for the purposes intended, in whole at any time or in part on any interest payment date, at
a redemption price equal to the principal amount being redeemed plus accrued interest to the
redemption date, in inverse order of maturity (and by lot within a maturity in such manner as the
Trustee may determine).
In the case of any defeasance of the Series 2024B Bonds, redemption of defeased
Series 2024B Bonds shall be scheduled on the basis of the mandatory redemption requirements
and assuming collections of the Bond Tax in an amount equal to receipts for the most recent
twelve-month period.
(2) The Series 2024B Bonds are subject to redemption at the option of the
City, from funds from any source, on and after February 1, 2031, in whole or in part at any time,
at a redemption price equal to the principal amount being redeemed plus accrued interest to the
redemption date. If fewer than all of the Series 2024B Bonds shall be called for redemption, the
particular maturities to be redeemed shall be selected by the City in its discretion. If fewer than
all of the Series 2024B Bonds of any one maturity shall be called for redemption, the particular
Series 2024B Bonds or portion thereof to be redeemed from such maturity shall be selected by lot
by the Trustee.
(3) To the extent not previously redeemed, the Series 2024B Bonds maturing
on February 1 in the years are subject to mandatory sinking fund
redemption by lot in such manner as the Trustee shall determine, on February 1 in the years and in
the amounts set forth below, at a redemption price equal to the principal amount being redeemed
plus accrued interest to the date of redemption:
14
Series 2024B Bonds Maturing February 1,
Principal
Year Amount
Series 2024B Bonds Maturing February 1,
Principal
Year Amount
Series 2024B Bonds Maturing February 1,
Principal
Year Amount
In case any outstanding bond is in a denomination greater than $5,000, each $5,000
of face value of such bond shall be treated as a separate bond of the denomination of $5,000.
The City has covenanted in the Authorizing Ordinance that Surplus Bond Tax
Receipts, being collections of the Bond Tax in excess of the amount necessary to (a) ensure the
prompt payment of the principal of, interest on and Trustee's fees and expenses and other
administrative charges in connection with the bonds as the same become due, (b) pay any arbitrage
rebate payments due under Section 148(f) of the Internal Revenue Code of 1986, as amended, (c)
maintain the debt service reserve in the required amount and (d) pay any amounts due with respect
to the municipal bond insurance policy issued in connection with the bonds, must be used from
time to time on each interest payment date, but in any event not less often than annually, as and to
the extent available to redeem outstanding bonds prior to maturity. The debt service reserve shall
be used as part of the Surplus Bond Tax Receipts for the purpose of making the final principal and
interest payment on the bonds, whether at maturity or at redemption prior to maturity. Surplus
Bond Tax Receipts shall be used to redeem the Series 2024A Bonds in full before any Series
2024B Bonds are redeemed from Surplus Bond Tax Receipts.
W
Notice of redemption identifying the bonds or portions thereof (which shall be
$5,000 or a multiple thereof) to be redeemed and the date they shall be presented for payment shall
be given by. the Trustee, not less than 30 nor more than 60 days prior to the date fixed for
redemption, by sending a copy of the redemption notice by first class mail, postage prepaid, or
other acceptable standard means of delivery, including facsimile or electronic communication, to
all registered owners of bonds to be redeemed. Failure to send 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 in proper
and timely fashion. All such bonds or portions thereof thus called for redemption and for the
retirement of which funds are duly provided in accordance with the Authorizing Ordinance prior
to the date fixed for redemption will cease to bear interest on such redemption date.
This bond is transferable by the Registered Owner shown above in person or by his
attorney -in -fact duly authorized in writing at the principal corporate trust office of the Trustee, but
only in the manner, subject to the limitations and upon payment of the charges provided in the
Authorizing Ordinance, and upon surrender and cancellation of this bond. Upon such transfer a
new fully registered bond or bonds of the same maturity and series, of authorized denomination or
denominations, for the same aggregate principal amount, will be issued to the transferee in
exchange therefor. This bond is issued with the intent that the laws of the State shall govern its
construction.
The City and the Trustee may deem and treat the Registered Owner shown above
as the absolute owner hereof for the purpose of receiving payment of or on account of principal
hereof and interest due hereon and for all other purposes, and neither the City nor the Trustee shall
be affected by any notice to the contrary.
The bonds are issuable only as fully registered bonds in the denomination of $5,000,
and any integral multiple thereof. Subject to the limitations and upon payment of the charges
provided in the Authorizing Ordinance, fully registered bonds may be exchanged for a like
aggregate principal amount of fully registered bonds of the same maturity and series of other
authorized denominations.
This bond shall not be valid until it shall have been authenticated by the Certificate
hereon duly signed by the Trustee.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts,
conditions and things required to exist, happen and be performed, under the Constitution and laws
of the State, particularly Amendment No. 62 to the Constitution of the State and the Authorizing
Legislation, precedent to and in the issuance of this bond have existed, have happened and have
been performed in due time, form 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 taxes sufficient to pay the bonds and interest thereon have been duly levied in
accordance with the Authorizing Legislation and made payable until all of the bonds and interest
thereon have been fully paid and discharged.
16
IN WITNESS WHEREOF, the City of Batesville, Arkansas has caused this bond
to be executed by its Mayor and City Clerk and its corporate seal to be impressed or imprinted on
this bond, all as of the Dated Date shown above.
ATTEST:
(SEAL)
CITY OF BATESVILLE, ARKANSAS
LM
City Clerk
Mayor
[A Statement of Insurance provided by the
Insurer shall be placed on the Series 2024B Bond]
(Form of Trustee's Certificate)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This bond is one of the Series 2024B Bonds issued under the provisions of the
within mentioned Authorizing Ordinance.
Date of Authentication: , 2024
THE CITIZENS BANK
Batesville, Arkansas
TRUSTEE
Authorized Signature
(Form of Assignment)
ASSIGNMENT
FOR VALUE RECEIVED, ("Transferor"), hereby sells,
assigns and transfers unto , the within bond and all rights thereunder, and hereby
irrevocably constitutes and appoints as attorney to transfer the within bond on
the books kept for registration thereof with full power of substitution in the premises.
DATE:
Transferor
17
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 7. The City hereby expressly pledges all of the revenues derived by the
City from (a) a 0.5% sales and use tax levied by the City under the authority of Title 26, Chapter
75, Subchapter 2 of the Arkansas Code of 1987 Annotated and Ordinance No. 2011-12-05 adopted
on December 27, 2011, as amended by Ordinance No. 2023-05-02 adopted on May 23, 2023 (the
"Bond Tax") and (b) a 0.5% sales and use tax levied by the City under the authority of Title 26,
Chapter 75, Subchapter 2 of the Arkansas Code of 1987 Annotated and Ordinance No. 2011-12-
03 adopted on December 27, 2011 (the "Permanent Tax") to the payment of the principal of and
interest on the bonds when due at maturity or at redemption prior to maturity, to the payment of
the fees and expenses of the Trustee and other administrative charges, to the maintenance of the
debt service reserve at its required level, to the payment of any amounts due the Insurer with
respect to the Insurance Policy and to the payment of any arbitrage rebate due the United States
under Section 148(f) of the Internal Revenue Code of 1986, as amended (the "Code"). Collections
of the Bond Tax are hereby appropriated and shall be used solely to pay the scheduled principal of
and interest on the bonds, redeem bonds prior to maturity, pay Trustee's fees and expenses and
other administrative charges, pay any amounts due the Insurer with respect to the Insurance Policy,
maintain the debt service reserve at its required level and pay any arbitrage rebate due under
Section 148(f) of the Code (collectively, "Bond Payments"). Collections of the Permanent Tax
shall be used first, if necessary, to make Bond Payments and second, for park and recreational
purposes, for public safety purposes and for street purposes (collectively, the "Permanent Tax
Uses"). The City covenants that the Bond Tax and the Permanent Tax (collectively, the "Taxes")
shall never be repealed or reduced while any of the bonds are outstanding. The City further
covenants to use due diligence in collecting the Taxes. Nothing herein shall prohibit the City from
increasing the Taxes from time to time, to the extent permitted by law, and no part of the revenues
derived from any such increase shall become part of the revenues pledged hereunder.
Section 8. (a) The City hereby designates The Citizens Bank, Batesville,
Arkansas as the bank which shall receive collections of the Taxes (the "Pledged Revenues") from
the State Treasurer, and the City covenants to file a written designation thereof with the State
Treasurer prior to the issuance of the bonds. The Trustee shall deposit all Pledged Revenues as
and when received into a special fund of the City in the Trustee which is hereby created and
designated "Sales and Use Tax Revenue Fund, Series 2024" (the "Revenue Fund"). There is
created in the Revenue Fund the following accounts: Bond Account; and Permanent Account. The
Pledged Revenues received by the Trustee shall be deposited as follows: Pledged Revenues
derived from the Bond Tax shall be deposited into the Bond Account and Pledged Revenues
derived from the Permanent Tax shall be deposited into the Permanent Account.
(b) Moneys in the Bond Account in the Revenue Fund shall be applied first
each month, in the following order of priority:
18
(1) 1 /6 of the interest on the bonds next due — Debt Service
Account in the Bond Fund (hereinafter identified); and
(2) 1/12 of the principal of the bonds next due at maturity or
upon mandatory sinking fund redemption — Debt Service Account in the Bond
Fund; and
(3) the Trustee's and Insurer's fees and expenses and other
administrative charges next due — Expense Account in the Bond Fund; and
(4) the amount which may be necessary to increase the Debt
Service Reserve Account to the required level — Debt Service Reserve Account in
the Bond Fund; and
(5) the amount necessary to pay any arbitrage rebate due under
Section 148(f) of the Code — Expense Account in the Bond Fund; and
(6) balance — Redemption Account in the Bond Fund.
The deposits made into the Debt Service Account in the Bond Fund shall be reduced
in order to take into account as a credit (a) interest earning, (b) transfers from the Debt Service
Reserve Account in the Bond Fund and (c) transfers of moneys held in connection with the Bonds
Refunded. Monthly deposits into the Debt Service Account in the Bond Fund shall be adjusted as
necessary so that there are sufficient funds to make the payments due on the bonds through
February 1, 2025.
(c) Moneys in the Permanent Account in the Revenue Fund shall be applied by
the Trustee within five (5) days of receipt by the Trustee in the following order of priority:
(1) in the event moneys in the Bond Account are insufficient to
make the deposits required by clauses (1) through (5) of (b) above, moneys in the
Permanent Account shall be used for such purpose in the order of priority listed
above; and
(2) the balance shall be transferred to the City for Permanent
Tax Uses.
Section 9. (a) There is hereby created a special fund of the City in the Trustee
which is designated "Sales and Use Tax Bond Fund, Series 2024" (the "Bond Fund"), for the
purpose of providing funds for the payment of principal of and interest on the bonds as they
become due at maturity or at redemption prior to maturity, the Trustee's fees and expenses and
other administrative charges, any amounts due the Insurer with respect to the Insurance Policy and
any arbitrage rebate due the United States under Section 148(f) of the Code. There shall be
established in the Bond Fund the following accounts into which moneys shall be deposited: (i)
Debt Service Account; (ii) Redemption Account; and (iii) Expense Account. Moneys in the
following Bond Fund accounts shall be used on each interest payment date (or in the case of
19
payments to the Insurer with respect to the Insurance Policy, on any date due) in the following
order of priority as and when necessary:
(1) to pay the interest on the bonds then due - Debt Service Account;
and
(2) to pay the principal of the bonds then due at maturity or upon
mandatory sinking fund redemption - Debt Service Account; and
(3) to pay the Trustee's and Insurer's fees and expenses and other
administrative charges then due - Expense Account; and
(4) to redeem bonds prior to maturity - Redemption Account.
In addition, moneys in the Expense Account in the Bond Fund shall be used to pay,
when due, any arbitrage rebate under Section 148(f) of the Code.
There shall be established and maintained in the Bond Fund a Debt Service Reserve
Account in an amount equal to one-half of the maximum annual debt service requirement on the
bonds (based on a year ending February 1) (the "required level"). Moneys in the Debt Service
Reserve Account shall be used to make the payments described in clauses (1) and (2) of (a) above
if moneys in the Debt Service Account in the Bond Fund are not otherwise sufficient for that
purpose. Moneys in the Debt Service Reserve Account over and above the required level shall be
immediately transferred from the Debt Service Reserve Account into the Debt Service Account in
the Bond Fund. Moneys in the Debt Service Reserve Account shall be used to make the final
payment of principal of and interest on the bonds, whether at maturity or at redemption prior to
maturity.
The prior written consent of the Insurer is a condition precedent to the deposit of
any credit instrument provided in lieu of a cash deposit into the Debt Service Reserve Account, if
any (other than a municipal bond debt service reserve insurance policy issued by the Insurer).
Amounts on deposit in the Debt Service Reserve Account shall be applied solely to the payment
of debt service due on the bonds.
The Bond Fund (excluding those moneys in the Debt Service Reserve Account)
shall, except as provided in this Section, be depleted once a year except for a carryover amount
not to exceed the greater of (i) one year's earnings on the Bond Fund or (ii) 1/12 of the annual debt
service on the bonds. Any moneys in the Bond Fund shall, except as provided in this Section, be
spent for one of the above purposes within a thirteen -month period beginning on the date of
deposit, and any amount received from investment of money held in the Bond Fund will be spent
within a one-year period beginning on the date of receipt.
(b) When the moneys in the Bond Fund shall be and remain sufficient to pay
(1) the principal of all the bonds then outstanding, (2) interest on the bonds until the next interest
payment date, (3) the Trustee's fees and expenses and other administrative charges, (4) any
amounts due the Insurer with respect to the Insurance Policy and (5) all arbitrage rebate payments
20
due the United States under Section 148(f) of the Code, there shall be no obligation to make any
further payments into the Bond Fund and any Pledged Revenues remaining in the Bond Fund after
payment of any arbitrage rebate due and after the principal of, premium, if any and interest on the
bonds have been paid may be used by the City for any lawful purpose.
(c) All moneys in the Bond Fund shall be used solely for the purpose of paying
the principal of and interest on the bonds, Trustee's fees and expenses and other administrative
charges, any amounts due the Insurer with respect to the Insurance Policy and any arbitrage rebate
under Section 148(f) of the Code, as the same become due.
(d) The Trustee is authorized and directed to withdraw moneys from the Bond
Fund from time to time as necessary for paying principal of and interest on the bonds when due at
maturity or at redemption prior to maturity and for making other authorized Bond Fund
expenditures.
(e) The bonds shall be specifically secured by a pledge of the Pledged
Revenues, which pledge in favor of the bonds is hereby irrevocably made according to the terms
of this Ordinance, and the City, and the officers and employees of the City, shall execute, perform
and carry out the terms thereof in strict conformity with the provisions of this Ordinance.
(f) Anything herein to the contrary notwithstanding, moneys in the Redemption
Account derived from deposits made pursuant to clause (6) of Section 8(b) hereof and interest
earnings thereon (1) shall be used from time to time to make up shortfalls in the Debt Service
Account or shortfalls in collections of the Bond Tax, rather than redeeming bonds prior to maturity,
and (2) shall not be used to redeem bonds more often than annually (rather than on each interest
payment date) if the Trustee reasonably determines that such amounts available for redemption
may be needed to make scheduled debt service payments.
Section 10. Any bond shall be deemed to be paid within the meaning of this
Ordinance when payment of the principal of and interest on such bond (whether at maturity or
upon redemption as provided herein, or otherwise), either (i) shall have been made or caused to be
made in accordance with the terms thereof, or (ii) shall have been provided for by irrevocably
depositing with the Trustee, in trust and irrevocably set aside exclusively for such payment (1)
cash fully insured by the Federal Deposit Insurance Corporation ("FDIC") and/or fully
collateralized with direct obligations of the United States of America ("Defeasance Securities")
sufficient to make such payment and/or (2) Defeasance Securities (provided that such deposit will
not affect the tax-exempt status of the interest on any of the Series 2024B Bonds or cause any of
the Series 2024B Bonds to be classified as "arbitrage bonds" within the meaning of Section 148 of
the Code) maturing as to principal and interest in such amounts and at such times as will provide
sufficient moneys to make such payment, and all necessary and proper fees, compensation and
expenses of the Trustee with respect to which such deposit is made shall have been paid or the
payment thereof provided for to the satisfaction of the Trustee.
In case of any defeasance of the bonds, redemption of defeased bonds shall be
scheduled on the basis of the mandatory redemption requirements and assuming annual collections
of the Bond Tax in an amount equal to receipts for the most recent twelve-month period.
21
On the payment of any bonds within the meaning of this Ordinance, the Trustee
shall hold in trust, for the benefit of the owners of such bonds, all such moneys and/or Defeasance
Securities.
When all the bonds shall have been paid within the meaning of this Ordinance, if
the Trustee has been paid its fees and expenses, if all arbitrage rebate payments due the United
States under Section 148(f) of the Code have been paid or provided for to the satisfaction of the
Trustee and if there are no amounts due the Insurer with respect to the Insurance Policy, the Trustee
shall take all appropriate action to cause (i) the pledge and lien of this Ordinance to be discharged
and cancelled and (ii) all moneys held by it pursuant to this Ordinance and which are not required
for the payment of such bonds to be paid over or delivered to or at the direction of the City.
At least three business days prior to any defeasance with respect to the bonds, the
City shall, unless waived by the Insurer, deliver to the Insurer draft copies of an escrow agreement,
an opinion of bond counsel regarding the validity and enforceability of the escrow agreement and
the defeasance of the bonds and a verification report (a "Verification Report") prepared by a
nationally recognized independent financial analyst or firm of certified public accountants
regarding the sufficiency of the escrow fund. Such opinion shall be addressed to the Insurer and
shall be in form and substance satisfactory to the Insurer. Such Verification Report shall be in the
form and substance satisfactory to the Insurer and, unless waived by the Insurer, shall either be
addressed to the Insurer or shall include a statement to the effect that such Verification Report may
be relied upon by the Insurer. In addition, the escrow agreement shall provide that:
(1) Any substitution of securities following the execution and delivery of the
escrow agreement shall require the delivery of a Verification Report, an opinion of bond counsel
that such substitution will not adversely affect the exclusion from gross income of the holders of
the Series 2024B Bonds of the interest on the Series 2024B Bonds for federal income tax purposes
and the prior written consent of the Insurer, which consent will not be unreasonably withheld.
(2) The City will not exercise any prior optional redemption of bonds secured
by the escrow agreement or any other redemption other than mandatory sinking fund redemptions
unless (i) the right to make any such redemption has been expressly reserved in the escrow
agreement and such reservation has been disclosed in detail in the official statement for the
refunding bonds, and (ii) as a condition to any such redemption there shall be provided to the
Insurer a Verification Report as to the sufficiency of escrow receipts without reinvestment to meet
the escrow requirements remaining following any such redemption.
(3) The City shall not amend the escrow agreement or enter into a forward
purchase agreement or other agreement with respect to rights in the escrow without the prior
written consent of the Insurer.
Section 11. The City covenants that it will not issue any additional bonds, or
incur any additional obligation, secured by a lien on or pledge of the Pledged Revenues except as
hereinafter provided. The City reserves the right to issue additional bonds secured by a lien on or
pledge of the receipts of the Permanent Tax on a subordinate basis to the pledge securing the bonds.
22
Section 12. The bonds shall be callable for payment prior to maturity in
accordance with the terms set out in the face of the bond form set forth in Section 6 of this
Ordinance (the "Bond Form"). The City hereby covenants to use bond proceeds not necessary for
the purposes intended to redeem bonds as set forth in the Bond Form. The City further covenants
to use Surplus Bond Tax Receipts (as defined in the Bond Form) to redeem bonds prior to maturity.
Surplus Bond Tax Receipts shall be used to redeem the Series 2024A Bonds in full before any
Series 2024B Bonds are redeemed from Surplus Bond Tax Receipts.
Section 13. It is hereby covenanted and agreed by the City with the owners of
the bonds that the City will faithfully and punctually perform all duties with reference to the Taxes
and the bonds required by the Constitution and laws of the State and by this Ordinance, including
the collection of the Taxes, as herein specified and covenanted and the applying of the Pledged
Revenues as herein provided.
Section 14. The Trustee will keep or cause to be kept proper books of accounts
and records in which complete and correct entries shall be made of all transactions relating to the
Pledged Revenues and such books shall be available for inspection by the City, the Purchaser and
the owner of any of the bonds at reasonable times and under reasonable circumstances. The
Trustee shall furnish a report to the City on a monthly basis of all receipts and disbursements of
the Pledged Revenues received by the Trustee, which monthly report shall commence one month
following the first month in which the Pledged Revenues are received by the Trustee.
Section 15. (a) Subject to the provisions of subparagraph (g) below, if there be
any default in the payment of the principal of and interest on any of the bonds, or if the City
defaults in the performance of any covenant contained in this Ordinance, the Trustee may, and
shall, upon the written request of (1) the Insurer or (2) with the consent of the Insurer, the owners
of not less than 10% in principal amount of the bonds then outstanding, by proper suit compel the
performance of the duties of the officials of the City under the Constitution and laws of the State
and under this Ordinance, and to take any action or obtain any proper relief in law or equity
available under the Constitution and laws of the State.
(b) No owner of any bond shall have any right to institute any suit, action,
mandamus or other proceeding in equity or in law for the protection or enforcement of any right
under this Ordinance or under the Constitution and laws of the State unless (1) such owner or the
Trustee shall have given written notice of such default to the Insurer and (2) such owner previously
shall have given to the Trustee written notice of the default on account of which such suit, action
or proceeding is to be taken, and unless the owners of not less than 10% in principal amount of the
bonds then outstanding shall have made written request of the Trustee after the right to exercise
such powers or right of action, as the case may be, shall have accrued, and shall have afforded the
Trustee a reasonable opportunity either to proceed to exercise the powers herein granted or granted
by the Constitution and laws of the State, or to institute such action, suit or proceeding in its name,
and unless, also, there shall have been offered to the Trustee reasonable security and indemnity
against the cost, expense and liabilities to be incurred therein or thereby and the Trustee shall have
refused or neglected to comply with such request within a reasonable time, and such notification,
request and offer of indemnity are hereby declared in every such case, at the option of the Trustee,
to be conditions precedent to the execution of the powers and trust of this Ordinance or to any
23
other remedy hereunder. It is understood and intended that no one or more owners of the bonds
shall have any right in any manner whatever 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 herein
provided, that all proceedings at law or in equity shall be instituted, had and maintained in the
manner herein provided and for the benefit of all owners of the outstanding bonds, and that any
individual rights of action or other right given to one or more of such owners by law are restricted
by this Ordinance to the rights and remedies herein provided.
(c) All rights of action under this Ordinance or under any of the bonds,
enforceable by the Trustee, may be enforced by it without the possession of any of the bonds, and
any such suit, action or proceeding instituted by the Trustee shall be brought in its name and for
the benefit of all the owners of the bonds, subject to the provisions of this Ordinance.
(d) No remedy herein conferred upon or reserved to the Trustee, the Insurer or
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.
(e) No delay or omission of the Trustee, the Insurer or any owners of the bonds
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 such default or an acquiescence therein, and every power
and remedy given by this Ordinance to the Trustee, to the Insurer and to the owners of the bonds,
respectively, may be exercised from time to time and as often as may be deemed expedient.
(f) Subject to the provisions of subparagraph (g) below, the Trustee may, and
upon the written request of the owners of not less than a majority of the owners in principal amount
of the bonds then outstanding shall, waive any default which shall have been remedied before the
entry of final judgment or decree in any suit, action or proceeding instituted under the provisions
of this Ordinance or before the completion of the enforcement of any other remedy, but no such
waiver shall extend to or affect any other existing or any subsequent default or defaults or impair
any rights or remedies consequent thereon.
(g) Notwithstanding the above, upon the occurrence and continuance of a
default, the Insurer shall be deemed to be the sole holder of the bonds for all purposes under this
Ordinance, including, without limitation, for purposes of exercising remedies and approving
amendments.
Section 16. (a) When the Series 2024A Bonds have been executed and sealed
as herein provided, they shall be delivered to the Trustee, which shall authenticate them and deliver
them to or at the direction of the Purchaser upon payment of the 2024A Purchase Price. Unless
paid by the Purchaser as part of the 2024A Purchase Price, the amount necessary to pay the portion
of the premium for the Insurance Policy for the Series 2024A Bonds shall be paid to the Insurer.
The amount necessary to fund a portion of the Debt Service Reserve Account shall be deposited
into the Debt Service Reserve Account in the Bond Fund. The amount that is sufficient, along
with other available moneys, to accomplish the Refunding shall be deposited with the trustee for
the Bonds Refunded. The balance of the 2014A Purchase Price shall be deposited into a special
24
account of the City created with the Trustee and designated "2024A Cost of Issuance Fund" (the
"2024A Cost of Issuance Fund").
(b) When the Series 2024B Bonds have been executed and sealed as herein
provided, they shall be delivered to the Trustee, which shall authenticate them and deliver them to
or at the direction of the Purchaser upon payment of the 2024B Purchase Price. Unless paid by
the Purchaser as part of the 2024B Purchase Price, the amount necessary to pay the portion of the
premium for the Insurance Policy for the Series 2024B Bonds shall be paid to the Insurer. The
amount necessary to fund a portion of the Debt Service Reserve Account shall be deposited into
the Debt Service Reserve Account in the Bond Fund. The amount necessary to pay the expenses
of issuing the Series 2024B Bonds as set forth in the delivery instructions to the Trustee signed by
the Mayor and City Clerk (the "Delivery Instructions") shall be deposited into a special account of
the City created with the Trustee and designated "2024B Cost of Issuance Fund" (the "2024B Cost
of Issuance Fund").
The balance of the 2024B Purchase Price shall be deposited in a special account of
the City hereby created with the Trustee and designated the "2024B Construction Fund" (the
"Construction Fund"). The moneys in the Construction Fund shall be used for accomplishing the
Improvements, paying expenses incidental thereto and paying the expenses of issuing the Series
2024B Bonds. Moneys in the Construction Fund shall also be used to pay the principal of and
interest on the Series 2024B Bonds when due if moneys in the Bond Fund are not sufficient for
that purpose. Disbursements shall be made from the Construction Fund on the basis of requisitions
which shall specify: the name of the person, firm or corporation to whom payment is to be made;
the amount of the payment; the purpose of the payment and that the payment is a proper charge on
the Construction Fund. Each requisition must be signed by the Mayor and the City Clerk. The
Trustee shall keep accurate records of all payments made on the basis of requisitions.
When the Improvements have been completed and all required expenses paid and
expenditures made from the Construction Fund for and in connection with the accomplishment of
the Improvements and the financing thereof, this fact shall, if there are any moneys in the
Construction Fund, be evidenced by a certificate signed by the Mayor, which certificate shall state,
among other things, the date of the completion and that all obligations payable from the
Construction Fund have been discharged. A copy of the certificate shall be filed with the Trustee,
and upon receipt thereof the Trustee shall transfer any remaining balance into the Redemption
Account in the Bond Fund. Proceeds of the Series 2024B Bonds deposited into the Redemption
Account shall only be used to redeem Series 2024B Bonds.
Section 17. (a) Moneys held for the credit of the Construction Fund, the 2024A
Cost of Issuance Fund and the 2024B Cost of Issuance Fund may be invested and reinvested at the
direction of the City, and in the Trustee's discretion in the absence of any direct instructions from
the City, in Permitted Investments (as hereinafter defined) or other investments permitted by State
law, which shall mature, or which shall be subject to redemption by the holder thereof, at the option
of such holder, not later than the date or dates when such money will be required for the purposes
intended.
25
(b) Moneys held for the credit of the Debt Service Reserve Account in the Bond
Fund shall be invested and reinvested at the direction of the City, and in the Trustee's discretion in
the absence of any direct instructions from the City, in Permitted Investments, all of which shall
mature, or which shall be subject to redemption by the holder thereof, at the option of such holder,
not later than seven (7) years after the date of investment or the final maturity date of the
outstanding bonds, whichever is earlier.
(c) Moneys held for the credit of the Bond Fund (other than the Debt Service
Reserve Account) and the Revenue Fund shall be invested and reinvested at the direction of the
City, and in the Trustee's discretion in the absence of any direct instructions from the City, in
Permitted Investments, which shall mature, or which shall be subject to redemption by the holder
thereof, at the option of such holder, not later than the date or dates when the moneys will be
required for payment of the principal of and interest on the bonds when due.
(d) Obligations so purchased as an investment of moneys in any fund shall be
deemed at all times to be a part of such fund and the interest accruing thereon and any profit
realized from such investments shall be credited to such fund, and any loss resulting from such
investment shall be charged to such fund.
(e) "Permitted Investments" are defined as (1) direct or fully guaranteed
obligations of the United States of America ("Government Securities"), (2) direct obligations of
an agency, instrumentality or government -sponsored enterprise created by an act of the United
States Congress and authorized to issue securities or evidences of indebtedness, regardless of
whether the securities or evidences of indebtedness are guaranteed for repayment by the United
States Government, (3) certificates of deposit or demand deposits of banks, including the Trustee,
which are insured by the FDIC or, if in excess of insurance coverage, collateralized by Government
Securities or other securities authorized by State law to secure public funds or (4) money market
funds invested exclusively in Government Securities and the obligations described in (2) above.
(f) All investments and deposits in the Bond Fund and the Revenue Fund shall
have a par value (or market value when less than par), exclusive of accrued interest at all times at
least equal to the amount of money credited to such funds and shall be made in such a manner that
the money required to be expended from any fund will be available at the proper time or times.
(g) Investments of moneys in all funds shall be valued in terms of current
market value as of the last day of each year, except that direct obligations of the United States
(State and Local Government Series) in book -entry form shall be continuously valued at par or
face principal amount.
Section 18. In the event the office of Mayor, City Clerk or City Treasurer shall
be abolished or any two or more of such offices shall be merged or consolidated or in the event
the duties of a particular office shall be transferred to another office or offices, 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 officers succeeding to the
principal functions thereof, or by the office or officer upon whom such powers, obligations and
duties shall be imposed by law.
Section 19. The Citizens Bank, Batesville, Arkansas is hereby appointed to act
as Trustee and Paying Agent pursuant to this Ordinance. The Trustee shall be responsible for the
exercise of good faith and reasonable prudence in the execution of its trusts. The recitals in this
Ordinance and in the bonds are the recitals of the City and not of the Trustee. The Trustee shall
not be required to take any action as Trustee unless it shall have been requested to do so in writing
by (1) the Insurer or (2) the owners of not less than 10% in principal amount of bonds then
outstanding and shall have been offered reasonable security and indemnity against the costs,
expenses and liabilities to ge incurred therein or thereby. The Trustee may resign by giving 60
days' notice in writing to the City, the Insurer and the owners of the bonds. The Insurer, the
majority in principal amount of the owners of the outstanding bonds or the City, so long as the
City is not in default under this Ordinance, at any time, with or without cause, may remove the
Trustee. In the event of a vacancy in the office of Trustee, the City shall forthwith designate a new
Trustee by a written instrument filed in the office of the City Clerk. The new Trustee shall be a
bank or a trust company duly authorized to exercise trust powers and subject to examination by
federal or state authority, having a reported capital and surplus of not less than $5,000,000. The
Trustee and any successor Trustee shall file a written acceptance and agreement to execute the
trusts 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 the Insurer and a
copy thereof shall be placed in the bond transcript. Any successor Trustee shall have all the powers
herein granted to the original Trustee. The Trustee's resignation shall take effect upon the
acceptance of the trusts by the successor Trustee. Notwithstanding the above, no removal,
resignation or termination of the Trustee shall take effect until a successor Trustee, acceptable to
the Insurer, shall be qualified and appointed. The Insurer shall receive prior written notice of any
name change of the Trustee or the resignation or removal of the Trustee.
Any trustee must be (i) a national banking association that is supervised by the
Office of the Comptroller of the Currency and has at least $250 million of assets, (ii) a state -
chartered commercial bank that is a member of the Federal Reserve System and has at least $1
billion of assets or (iii) otherwise approved by the Insurer in writing.
Section 20. (a) The terms of this Ordinance shall constitute a contract between
the City and the owners of the bonds and no variation or change in the undertaking herein set forth
shall be made while any of the bonds are outstanding, except as hereinafter set forth in subsections
(b) and (c).
(b) The Trustee may consent to any variation or change in this Ordinance that
the Trustee determines is not to the material prejudice of the owners of the bonds or in order to
cure any ambiguity, formal defect or omission in this Ordinance or any amendment hereto, with
the prior written consent of the Insurer but without the consent of the owners of the bonds.
27
(c) The Insurer and the owners of not less than 75% in aggregate principal
amount of the bonds then outstanding shall have the right, from time to time, anything contained
in this Ordinance to the contrary notwithstanding, to consent to and approve 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 in this Ordinance or in any supplemental ordinance; provided, however, that
nothing contained in this Section shall permit or be construed as permitting (1) an extension of the
maturity of the principal of or the interest on any bond, or (2) a reduction in the principal amount
of any bond or the rate of interest thereon, or (3) the creation of a pledge of the Pledged Revenues
other than a pledge created or permitted by this Ordinance, or (4) a privilege or priority of any
bond or bonds over any other bond or bonds, or (5) a reduction in the aggregate principal amount
of the bonds required for consent to such supplemental ordinance.
(d) The City shall send copies of any amendments or supplements to this
Ordinance to the Insurer and any rating agency which has assigned a rating to the bonds. Any
amendments or supplements to this Ordinance shall require the prior written consent of the Insurer
with the exception of amendments or supplements: (i) to cure any ambiguity or formal defect or
omissions or to correct any inconsistent provisions in this Ordinance or in any supplement hereto,
or (ii) to grant or confer upon the holders of the bonds any additional rights, remedies, powers,
authority or security that may lawfully be granted or conferred upon the holders of the bonds, or
(iii) to add to the conditions, limitations and restrictions on the issuance of bonds or other
obligations under the provisions of this Ordinance other conditions, limitations and restrictions
hereafter to be observed, or (iv) to add to the covenants and agreements of the City in this
Ordinance other covenants and agreements thereafter to be observed by the City or to surrender
any right or power therein reserved to or conferred upon the City. Notwithstanding the above, any
amendment or supplement to this Ordinance that adversely affects the rights or interests of the
Insurer shall be subject to the prior written consent of the Insurer.
Section 21. (a) The City covenants that it shall not take any action or suffer or
permit any action to be taken or condition to exist which causes or may cause the interest payable
on the Series 2024B Bonds to be included in gross income for federal income tax purposes.
Without limiting the generality of the foregoing, the City covenants that the proceeds of the sale
of the Series 2024B Bonds and the Pledged Revenues will not be used directly or indirectly in such
manner as to cause the Series 2024B Bonds to be treated as "arbitrage bonds" within the meaning
of Section 148 of the Code.
(b) The City represents that it has not used or permitted the use of, and
covenants that it will not use or permit the use of the Improvements or the proceeds of the Series
2024B Bonds, in such manner as to cause the Series 2024B Bonds to be "private activity bonds"
within the meaning of Section 141 of the Code. In this regard, the City covenants that (i) it will
not use (directly or indirectly) the proceeds of the Series 2024B Bonds to make or finance loans to
any person, and (ii) that while the Series 2024B Bonds are outstanding the Improvements will only
be used by state or local governmental entities or persons on a basis as members of the general
public.
28
(c) The City covenants that it will not reimburse itself from proceeds of the
Series 2024B Bonds for any costs paid prior to the date the Series 2024B Bonds are issued except
in compliance with United States Treasury Regulation § 1.150-2 (the "Regulation"). This
Ordinance shall be considered an "official intent" for purposes of the Regulation.
(d) The City will retain all documents and records pertaining to the Series
2024B Bonds and the Improvements for the life of the Series 2024B Bonds plus an additional three
years.
(e) The City shall pay any arbitrage rebate due the United States Treasury under
Section 148 of the Code from moneys in the Bond Fund. The costs of calculating the arbitrage
rebate due and the arbitrage rebate amount shall be considered administrative costs payable from
moneys in the Bond Fund.
Section 22. The City covenants that it will take no action which would cause the
Series 2024B 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 Series 2024B Bonds which
contains the information required by Section 149(e) of the Code.
Section 23. All references in this Ordinance to the Insurer shall cease when the
bonds have been paid in full or defeased as provided herein and there are no amounts due the
Insurer in connection with the Insurance Policy.
Section 24. (a) The City will provide the Insurer with all notices and other
information it is obligated to provide under the Disclosure Agreement and to the holders of the
bonds or the Trustee under this Ordinance.
The notice address of the Insurer is: Build America Mutual Assurance Company,
200 Liberty Street, 27th Floor, New York, NY 10281, Attention: Surveillance, Re: Policy No.
, Telephone: (212) 235-2500, Telecopier: (212) 962-1710, Email:
notices@buildamerica.com. In each case in which notice or other communication refers to an event
of default or a claim on the Insurance Policy, then a copy of such notice or other communication
shall also be sent to the attention of the General Counsel at the same address and at
claims@buildamerica.com or at Telecopier: (212) 962-1524 and shall be marked to indicate
"URGENT MATERIAL ENCLOSED."
(b) In the event that principal and/or interest due on the bonds shall be paid by
the Insurer pursuant to the Insurance Policy, the bonds shall remain outstanding for all purposes,
not be defeased or otherwise satisfied and not be considered paid by the City, the assignment and
pledge granted hereby and all covenants, agreements and other obligations of the City to the
registered owners shall continue to exist and shall run to the benefit of the Insurer, and the Insurer
shall be subrogated to the rights of such registered owners.
29
In the event that on the second business day prior to any payment date on the bonds,
the Trustee has not received sufficient moneys to pay all principal of and interest on the bonds due
on such payment date, the Trustee shall immediately notify the Insurer or its designee on the same
business day by telephone or electronic mail, of the amount of the deficiency. If any deficiency is
made up in whole or in part prior to or on the payment date, the Trustee shall so notify the Insurer
or its designee.
In addition, if the Trustee has notice that any holder of the bonds has been required
to disgorge payments of principal of or interest on the bonds pursuant to a final, non -appealable
order by a court of competent jurisdiction that such payment constitutes an avoidable preference
to such holder within the meaning of any applicable bankruptcy law, then the Trustee shall notify
the Insurer or its designee of such fact by telephone or electronic mail, or by overnight or other
delivery service as to which a delivery receipt is signed by a person authorized to accept delivery
on behalf of the Insurer.
The Trustee shall irrevocably be designated, appointed, directed and authorized to
act as attorney -in -fact for holders of the bonds as follows:
(i) If there is a deficiency in amounts required to pay interest and/or principal
on the bonds, the Trustee shall (1) execute and deliver to the Insurer, in form satisfactory to the
Insurer, an instrument appointing the Insurer as agent and attorney -in -fact for such holders of the
bonds in any legal proceeding related to the payment and assignment to the Insurer of the claims
for interest on the bonds, (2) receive as designee of the respective holders (and not as paying agent)
in accordance with the tenor of the Insurance Policy payment from the Insurer with respect to the
claims for interest so assigned, (3) segregate all such payments in a separate account (the "BAM
Policy Payment Account") to only be used to make scheduled payments of principal of and interest
on the bonds, and (4) disburse the same to such respective holders; and
(ii) If there is a deficiency in amounts required to pay principal of the bonds,
the Trustee shall (1) execute and deliver to the Insurer, in form satisfactory to the Insurer, an
instrument appointing the Insurer as agent and attorney -in -fact for such holder of the bonds in any
legal proceeding related to the payment of such principal and an assignment to the Insurer of the
bonds surrendered to the Insurer, (2) receive as designee of the respective holders (and not as
paying agent) in accordance with the tenor of the Insurance Policy payment therefore from the
Insurer, (3) segregate all such payments in the BAM Policy Payment Account to only be used to
make scheduled payments of principal of and interest on the bonds and (4) disburse the same to
such holders.
The Trustee shall designate any portion of payment of principal on bonds paid by
the Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other
advancement of maturity, on its books as a reduction in the principal amount of bonds registered
to the then current holder, whether DTC or its nominee or otherwise, and shall issue a replacement
bond to the Insurer, registered in the name directed by the Insurer, in a principal amount equal to
the amount of principal so paid (without regard to authorized denominations); provided that the
Trustee's failure to so designate any payment or issue any replacement bond shall have no effect
30
on the amount of principal or interest payable by the City on any bond or the subrogation or
assignment rights of the Insurer.
Payments with respect to claims for interest on and principal of bonds disbursed by
the Trustee from proceeds of the Insurance Policy shall not be considered to discharge the
obligation of the City with respect to such bonds, and the Insurer shall become the owner of such
unpaid bonds and claims for the interest in accordance with the tenor of the assignment made to it
under the provisions of the preceding paragraphs or otherwise. This Ordinance shall not be
discharged or terminated unless all amounts due or to become due to the Insurer have been paid in
full or duly provided for.
Irrespective of whether any such assignment is executed and delivered, the City and
the Trustee agree for the benefit of the Insurer that:
(i) To the extent the Insurer makes payments directly or indirectly (e.g., by
paying through the Trustee), on account of principal of or interest on the bonds, the Insurer will be
subrogated to the rights of such holders to receive the amount of such principal and interest from
the City with interest on bond principal (but not bond interest), as provided and solely from the
sources stated in this Ordinance and the bonds; and
(ii) The Insurer will be paid the amount of such principal and interest, with
interest on bond principal (but not bond interest), as provided herein and in the bonds, but only
from the sources and in the manner provided herein and therein for the payment of principal of
and interest on the bonds to holders, and the Insurer will be treated as the owner of such rights to
the amount of such principal and interest.
(c) The City agrees unconditionally that it will pay or reimburse the Insurer on
demand any and all reasonable charges, fees, costs, losses, liabilities and expenses that the Insurer
may pay or incur, including, but not limited to, fees and expenses of the Insurer's agents, attorneys,
accountants, consultants, appraisers and auditors and reasonable costs of investigations, in
connection with the administration (including waivers and consents, if any), enforcement, defense,
exercise or preservation of any rights and remedies in respect of this Ordinance ("Administrative
Costs"). For purposes of the foregoing, costs and expenses shall include a reasonable allocation
of compensation and overhead attributable to the time of employees of the Insurer spent in
connection with the actions described in the preceding sentence.
Notwithstanding anything herein to the contrary, the City agrees to pay to the
Insurer (i) a sum equal to the total of all amounts paid by the Insurer under the Insurance Policy
and (ii) interest on bond principal (but not bond interest) from the date paid by the Insurer under
the Insurance Policy until payment thereof in full by the City, payable to the Insurer at the stated
interest rate for each such bond (collectively, the "Bond Insurer Reimbursement Amounts")
compounded semi-annually. The City hereby covenants and agrees that the Bond Insurer
Reimbursement Amounts are payable from and secured by a lien on and pledge of the Pledged
Revenues and other collateral pledged to the bonds on a parity with debt service due on the bonds.
31
(d) The rights granted to the Insurer under this Ordinance to request, consent to
or direct any action are rights granted to the Insurer in consideration of its issuance of the Insurance
Policy. Any exercise by the Insurer of such rights is merely an exercise of the Insurer's contractual
rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the holders
of the bonds and such action does not evidence any position of the Insurer, affirmative or negative,
as to whether the consent of the holders of the bonds or any other person is required in addition to
the consent of the Insurer.
(e) The Insurer shall be entitled to pay principal or interest on the bonds that
shall become Due for Payment but shall be unpaid by reason of Nonpayment by the City (as such
terms are defined in the Insurance Policy) in accordance with this Ordinance, whether or not the
Insurer has received a claim upon the Insurance Policy.
(f) Any amendment, supplement, modification to, or waiver of, this Ordinance
that requires the consent of holders of the bonds or adversely affects the rights or interests of the
Insurer shall be subject to the prior written consent of the Insurer.
(g) Any reorganization or liquidation plan with respect to the City must be
acceptable to the Insurer. The Trustee and each owner of the bonds hereby appoint the Insurer as
their agent and attorney -in -fact with respect to the bonds and agree that the Insurer may at any
time during the continuation of any proceeding by or against the City under the United States
Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or
similar law (an "Insolvency Proceeding") direct all matters relating to such Insolvency Proceeding,
including without limitation, (i) all matters relating to any claim or enforcement proceeding in
connection with an Insolvency Proceeding (a "Claim"), (ii) the direction of any appeal of any order
relating to any Claim, (iii) the posting of any surety, supersedeas or performance bond pending
any such appeal, and (iv) the right to vote to accept or reject any plan of adjustment. In addition,
the Trustee and each owner of the bonds delegate and assign to the Insurer, to the fullest extent
permitted by law, the rights of the Trustee and each owner of the bonds with respect to the bonds
in the conduct of any Insolvency Proceeding, including, without limitation, all rights of any party
to an adversary proceeding or action with respect to any court order issued in connection with any
Insolvency Proceeding.
(h) Anything in this Ordinance to the contrary notwithstanding, upon the
occurrence and continuance of a default, the Insurer shall be entitled to control and direct the
enforcement of all rights and remedies granted to the holders of the bonds or the Trustee for the
benefit of the holders of the bonds under this Ordinance. No default may be waived without the
Insurer's written consent.
(i) If an Insurer Default (as defined below) shall occur and be continuing, then,
notwithstanding anything herein to the contrary, (1) if at any time prior to or following an Insurer
Default, the Insurer has made payment under the Insurance Policy, to the extent of such payment
the Insurer shall be treated like any other holder of the bonds for all purposes, including giving of
consents, and (2) if the Insurer has not made any payment under the Insurance Policy, the Insurer
shall have no further consent rights until the particular Insurer Default is no longer continuing or
the Insurer makes a payment under the Insurance Policy, in which event, the foregoing clause (1)
32
shall control. For purposes of this paragraph, "Insurer Default" means: (A) the Insurer has failed
to make any payment under the Insurance Policy when due and owing in accordance with its terms;
or (B) the Insurer shall (i) voluntarily commence any.proceeding or file any petition seeking relief
under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy,
insolvency or similar law, (ii) consent to the institution of or fail to controvert in a timely and
appropriate manner, any such proceeding or the filing of any such petition, (iii) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator or similar official for such party
or for a substantial part of its property, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment for the benefit of
creditors, or (vi) take action for the purpose of effecting any of the foregoing; or (C) any state or
federal agency or instrumentality shall order the suspension of payments on the Insurance Policy
or shall obtain an order or grant approval for the rehabilitation, liquidation, conservation or
dissolution of the Insurer (including without limitation under the New York Insurance Law).
0) The Insurer is recognized as and shall be deemed to be a third parry
beneficiary of this Ordinance and may enforce the provisions of this Ordinance.
(k) No grace period shall be permitted for payment defaults on the bonds. No
grace period for a covenant default shall exceed 30 days without the prior written consent of the
Insurer.
Section 25. 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 is authorized and directed to
take all action required on the part of the City to fulfill the City's obligations under the Disclosure
Agreement. Any legal fees and other administrative costs incurred by the City in connection with
making the annual report pursuant to the Disclosure Agreement (except audit fees) shall be
considered administrative charges that may be payable from moneys in the Bond Fund.
Section 26. The Mayor is hereby authorized and directed to work with Friday,
Eldredge & Clark, LLP, as bond counsel, to review and revise, as needed, its written procedures,
to monitor compliance with federal tax requirements with respect to tax-exempt obligations of the
City.
Section 27. All moneys in the bond fund and debt service reserve being
maintained in connection with the Bonds Refunded shall (a) be used to accomplish the Refunding
or (b) be deposited into the Bond Fund, all in accordance with the Delivery Instructions.
Section 28. 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 29. All ordinances and resolutions and parts thereof in conflict herewith
are hereby repealed to the extent of such conflict.
33
Section 30. It is hereby ascertained and declared that the Improvements are
immediately needed for the preservation of the public peace, health and safety and to remove
existing hazards thereto. The 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.
PASSED: January 18, 2024.
ATTEST:
City Clerk
(SEAL)
APPROVED:
Mayor
34
CERTIFICATE
The undersigned, City Clerk of the City of Batesville, Arkansas (the "City"), hereby
certifies that the foregoing pages are a true and correct copy of Ordinance No. , passed at
a special session of the City Council of the City, held at the regular meeting place of the City
Council at 12:15 p.m. on the 18th day of January, 2024, and that the Ordinance is of record in
Ordinance Record Book now in my possession.
(SEAL)
GIVEN under my hand and seal this 18th day of January, 2024.
City Clerk
35