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SECTION ~ For and in consideration of the purchase and acceptance of the bonds authorized by this ordinance and to
facilitate their payment, with interest, the City agrees to the following terms:
(a) None of the facilities or services afforded by the System shall be furnished without a reasonable charge being made therefor.
In the event that the City or any department, agency, or instrumentality thereof shall avail itself of the facilities or services afforded by
the System, the reasonable value of the services and facilities so afforded shall be charged against the City or such department, agency,
or instrumentality, and shall be paid for as the charges therefor accrue. The revenues so received from the City shall be deemed to be
revenues derived from the operation of the System; provided, however, that nothing herein shall be construed as requiring the City or any
department, agency, or instrumentality thereof to avail itself of the facilities or services afforded by the System.
(b) The Ciry will maintain the System in good condition and operate the same in an efficient manner and at a reasonable cost.
~~ So long as any of the bonds ore outstanding, the City agrees to maintain fire, lightning and tornado insurance on the System in an
amount which normal) would be carried b a rivate cam an en a d in a similar
,, Y Y P P Y 9 9e type of business. These insurance policies are to be
taken with companies approved by the Trustee, are to Corry a clause making them payable to the Trustee as its interest may appear, are
~. to be kept continuously in force, and either the original policies of insurance shall be placed in the custody of the Trustee or the Trus-
tee shall be furnished evidence satisfactory to it that the policies hove been issued and carry the loss payable to the Trustee clause. In
the event of loss, the proceeds of such insurance are to be applied solely toward the reconstruction, replacement, or repair of the System. In
such event the City will, with reasonable promptness, cause to be commenced and completed the reconstruction, replacement and repairs.
Nothing herein shall be construed as requiring the City to expend any funds for premiums on its insurance on the System which are derived
from sources other than the operation of the System.
(c) The City Treasurer shall be the custodian of the revues derived from the System, and shall give bond as such custodian.
Such bond shall be in an amount not less than $ ~ DD D ~ and shall be approved by the Trustee.
(d) All revenues from the System shall be deposited in such depository or depositories as may be lawfully designated from time to
time, subject, however, to the giving of security by each such depository as now or as hereafter may be required, and provided each such
depository shall hold membership in the FederCl Deposit Insurance Corporation. Ali deposits shall be made in the name of the City and be
so designated as to indicate the particular fund to which the revenues belong. Payments from each fund set out in this ordinance shall be
made by check or voucher signed by two duly designated persons and drown on the depository in which the moneys in said fund shall have
been deposited, and each such check or voucher shall briefly specify the purpose of the expenditure.
(e) The bonds, together with interest thereon, are not general obligations of the City nor do they constitute an indebtedness of
the City within the meaning of any constitutional or statutory provision or limitation, but shall be payable solely out of the Bond Fund
and shall be a valid claim of the holders thereof only against said Fund, and the amount of the revenues pledged to said Fund, which Fund
is hereby pledged for the equal and ratable payment of the bonds issued by authority of this ordinance and shall be used for no other
purpose than to pay the principal and interest of the bonds as the same matur except as provided in this ordinance.
(f) The System shall be operated upon a fiscal year basis, beginning f each year and
ending and including the following
(g) It is covenanted and agreed by the City with the holder or holders of the bonds, or any of them, that it will faithfully and
punctually perform all duties with reference to the System required by the Constitution and statutes of the State of Arkansas, including the
making and collecting of reasonable and sufficient rates lawfully established for services rendered by the System and applying the revenues
therefrom to the respective funds herein created.
(h) So long as any of the bonds are outstanding, the City will not mortgage, pledge, or otherwise encumber the System or any
part thereof or any revenues therefrom, except as herein provided, and will not sell, lease, or otherwise dispose of any substantial portion
of the same. The obligations of the City set out in this ordinance, the pledge of revenues, and the City's agreement not to mortgage,
n,, pledge, or otherwise encumber the System, shall be made a matter of public record by having a certified copy of this ordinance recorded as
a mortgage in the office of the Circuit Clerk and ex-officio Recorder of-;,~ County, Arkansas.
(i) The City will keep proper books of records and accounts (separate from all other records and accounts) in which complete and
correct entries shall be made of any transactions relating to the System. The City agrees to have these records audited by an independent
certified public accountant at least once each year, and it shall furnish the Trustee a copy of this audit. In the event that the City fails
or refuses to make the audit, the Trustee may have the audit made, the cost thereof to be charged to the cost of operation.
(j) If there be any default in the payment of either the principal of or the interest on any of the bonds, the holder or holders of
any of the bonds may enforce any mortgage lien granted by statute and may by proper suit compel the performance of the duties of the
officials of the City, as set forth in the statutes authorizing the bonds. If there be default in the payment of the principal of or interest
on the bonds or if the City shall fail to keep any other obligation which it herein assumes, and such default shall continue for thirty
days thereafter, any court having jurisdiction in any proper action, which may be instituted either by the Trustee on behalf of ail the bond-
holders, or by the holder of a bond in default, may appoint a receiver to administer the System on behalf of the City, with power to charge
and collect rates sufficient to provide for the expenses of the receivership, the payment of the bonds and interest thereon, and for the
payment of the operating expenses, and to apply the income and revenues in conformity with said statutes and this ordinance providing for
the issuance of said bonds, but when all defaults are cured, the receivership shall be ended and the management and control of the System
restored to the City.
(k) The City further covenants and agrees that if default is made in the payment of any bond or coupon, or i.f the City fails to
meet any sinking fund requirements, the holder of such bond may declare that bond immediately due and payable and in default, and
either the Trustee on behalf of all the bondholders or any bondholder for himself may institute suit to enforce the pledge lien herein granted.
The failure to exercise this option upon any default shall not be a waiver of the right to exercise it upon any subsequent default.
(1) The bonds authorized hereby shall be callable for payment before maturity according to t~? rms set o t ~~}'};.~t a ~~,,o fort~hh 1
(m) The charges for paying bonds and interest coupons shall be ~/e of 1% on principal and'~~~-~~w`~~~k'ir;~~vide3,li,'~eOri~
minimum fee for any semi-annual payment shall be one dollar. No withdrawal from the Bond Fund shall be made for any purpose other
than the payment of bonds and interest, and the monthly deposits in the Bond Fund or with the Trustee shall be at the sole risk of the
City and shall not operate as a payment of the bonds or coupons until so applied.
(n) The City hereby agrees to make all payments on bonds and interest only through the designated paying agent. All bonds paid
or purchased, either at or before maturity, shalt be canceled when such payment or purchase is made, together with all unmatured cou-
pons appertaining thereto, shall be returned to the City, and shall not be reissued. All unpaid interest coupons maturing on or prior to
the date of such payment or purchase shall continue to be payable to the respective bearers thereof.
(o) It is hereby declared that the provisions of this ordinance are separable, and if any provision of this ordinance shall for any
reason be held illegal or invalid, it shall not affect the validity of the remainder of the ordinance.
(p) It is hereby declared that the provisions of this ordinance constitute a contract by and between the City and the holders of the
bonds and interest coupons issued by authority hereof; and after the bonds have been issued and paid for, the terms of said provisions shall
not be changed except with the written consent of the holders of all bonds and coupons then outstanding.
(q) Wherever reference is made in this ordinance to a Trustee, it shall refer to
r
The said Trustee shall be responsible only for wilful misconduct in the execution of this trust. The recitals of fact herein contained, and
~. contained in the bonds, except the recitals in the Trustee's Certificate, are statements of the City and shall not be construed os being
made by the Trustee. The Trustee shall not be required to effect insurance against fire or damage to mortgaged property, nor to advance
any money to pay insurance premiums, nor to pay any charges or special assessments against said property, nor to see that this pledge of
revenue is properly recorded and kept in force as a pledge, nor shall it be required to take notice or be deemed to have had notice of any
default of the City in the failure to perform any of the conditions of this ordinance, unless said Trustee. shall have been specifically noti-
fied in writing of said default; nor shall it be required to take any action hereunder until it shall have been indemnified to its satisfaction
by the holders of the bonds herein mentioned, or some of them, against loss or damage on account thereof. The Trustee is authorized in
its discretion to release any real or personal property no longer used in the operation of the System. The holder or holders of a majority
in value of the bonds at any time outstanding may at their option remove the Trustee and appoint a succes;or trustee by an instrument
duly. acknowledged and filed for record in the office of the Circuit Clerk and ex-officio Recorder of-~~-County.
The Trustee may resign at any time upon ten days' written notice to the City ~~. The successor trustee shall have
all the rights and powers of the originally appointed Trustee.
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