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1885 ORDINANCE NO. ID AN ORDINANCE PROVIDING FOR THE ISSUANCE OF MUNICIPAL AIRPORT REVENUE BONDS FOR THE PURPOSE OF FINANCING THE COST OF CONSTRUCTING IMPROVEMENTS TO THE CITY'S AIRPORT FACILITIES; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE BONDS; PRESCRIBING OTHER MATTERS RELATING THERETO; AND DECLARING AN EMERGENCY. WHEREAS, the City of West Memphis, Arkansas (the "City") operates its Municipal Airport (the "Airport"), and related properties and facilities, through its Airport Commission (called "Airport Commission" or "Commission"); and WHEREAS, the Airport Commission has determined that improvements must be constructed to the Airport at a total estimated cost of approximately $2,875,000, and has so reported to the City Council, describing the needed improvements (which consist of a new tertms nal and it ris p oposed toaf ancetthef costlbyethe (use "Improvemen ), of airport revenue bonds; and WHEREAS, the Airport Commission has requested and recommendea tthist time tairportl revenuehbonds for thee purpose sof and sell financing the Improvements; and WHEREAS, the City Council hereby finds and declares that it would be in the best interest of the City and its inhabitants for the Improvements to be accomplished and that Municipal Airport Revenue Bonds be issued as requested by the Airport Commission; and WHEREAS, the City has outstanding its Municipal Airport Refunding and Construction Revenue Bonds, Series 1991 (the "1991 Bonds"); and WHEREAS, the Series 1999 Bonds will be secured by pledges of Airport Revenues (defined herein) and Surplus Utility Revenues (defined herein), subject to the terms hereof; NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of West Memphis, Arkansas: Section 1. The Improvements shall be accomplished. The authority conferred by this Ordinance shall be carried out under the control and supervision of, and all details in connection therewith shall be handled by, the Airport Commission. Section 2. Under the authority of the Constitution and laws of the State of Arkansas, including particularly Arkansas Code of 1987 Annotated, Title 14, Chapter 164, Subchapter 4, and Title 14, Chapter 199, Subchapter 1, City of West Memphis, Arkansas Municipal Airport Revenue Bonds, Series 1999, are hereby authorized and ordered issued in the total principal amount of $2,875,000 for the purpose of financing the costs of accomplishing the Improvements, including costs incidental thereto, necessary reserves, interest accruing prior to the availability of Airport Revenues (defined hereinbelow) and costs of issuance of the Series 1999 Bonds (the "Series 1999 Bonds"). Section 3. The sale of the Series 1999 Bonds to Stephens f Inc. (the "Underwriter") pursuant to the terms and conditions set out in the Bond Purchase Agreement relating thereto, which has been submitted to and is before this meeting, at a price of $2,818,543.75 plus accrued interest for Series 1999 Bonds bearing interest, maturing and otherwise subject to the terms and provisions hereafter in this Ordinance set forth in detail be, and the same are hereby, approved and confirmed. The Bond Purchase Agreement is approved and the Mayor is authorized to execute and deliver it on behalf of the City. The Preliminary Official Statement is hereby approved and the previous use of the Preliminary Official Statement by the Underwriter in connection with the sale of the Series 1999 Bonds is hereby in all respects authorized, approved and confirmed, and the Mayor is hereby authorized, empowered and directed, for and on behalf of the City, to execute the Preliminary Official Statement and the final Official Statement to be delivered to the Underwriter for use in connection with the sale of the Series 1999 Bonds. Section 4. The Series 1999 Bonds shall be dated November 1, 1999, with interest payable semiannually on May 1 and November 1 of each year, commencing May 1, 2000, shall be numbered consecutively from 1 upward, in order of issuance, and shall be in the denomination of $5,000 or an integral multiple thereof. The Series 1999 Bonds shall mature (on May 1) and bear interest as follows: 2 t Year Principal Interest Rate (~) 2005* $255,000 4.70 2006 60,000 4.90 2007 160,000 5.00 2008 165,000 5.10 2009 175,000 5.15 2010 185,000 5.25 2011 195,000 5.35 2012 205,000 5.40 2013 215,000 5.45 2014 225,000 5.50 2015 240,000 5.60 2016 250,000 5.70 2017 265,000 5.80 2018 280,000 5.90 * Term Bond. Subject to mandatory redemption. The Series 1999 Bonds shall be fully registered (as to principal and interest), without coupons. Principal is payable at the principal office of Community First Trust Company, Hot Springs, Arkansas (the "Trustee" and "Paying Agent"). Payment of interest shall be by check or draft mailed to the registered owner at the address shown on the registration book of the City maintained by the Trustee. Section 5. The Series 1999 Bonds shall be executed on behalf of the City by the Mayor and City Clerk and shall have impressed thereon the seal of the City. The Series 1999 Bonds may be signed by the facsimile signature of the Mayor and the facsimile signature of the City Clerk. The Series 1999 Bonds, together with interest thereon, shall be payable solely from the Pledged Revenues, identified and described hereinbelow, which revenues are hereby pledged and mortgaged for the equal and ratable payment of the Bonds and shall be used for no other purpose than to pay the principal, premium, if any, interest and Trustee's and Paying Agent's fees on and in connection with the Bonds. The Series 1999 Bonds shall not constitute an indebtedness of the City within any constitutional or statutory limitation. The Series 1999 Bonds are secured, as to Surplus Utility Revenues, on a parity of pledge with the City's outstanding 1991 Bonds. The pledge of Airport Revenues is subordinate to that securing the 1991 Bonds. The City reserves the right to issue Additional (parity) Bonds, as set forth hereinbelow, and the term "Bonds" herein refers to the Series 1999 Bonds and any such additional Bonds. Only such Bonds as shall have endorsed thereon a Certificate of Authentication substantially in the form set forth 3 ~. in Section 6 hereof duly executed by the Trustee shall be entitled to any right or benefit under the Authorizing Ordinance. Any such certificate of the Trustee shall be conclusive evidence that such Bond has been authenticated and delivered. It shall not be necessary that the same officer of the Trustee sign the Certificate of Authentication on all the Bonds. If any Bond shall become mutilated or be destroyed or lost, the City shall cause to be executed and the Trustee may authenticate and deliver a new Bond of like date, number, maturity and tenor in exchange and substitution for and upon cancellation of such mutilated Bond, or in lieu of and in substitution for such Bond destroyed or lost, upon the owner's paying the reasonable expenses and charges of the City and Trustee in connection therewith, and any applicable taxes or other charges, and, in the case of a Bond destroyed or lost, its filing with the Trustee evidence satisfactory to it that such Series 1999 Bonds were destroyed or lost, and of its ownership thereof, and furnishing the City and Trustee with indemnity satisfactory to them. The Trustee is hereby authorized to authenticate any such new Series 1999 Bond. In the event any such Series 1999 Bond shall have matured, the City may pay the same without the surrender thereof. Each Series 1999 Bond shall bear a CUSIP number, but the absence of a CUSIP number shall not affect the validity of a Series 1999 Bond. Any Series 1999 Bond may, at the option of the owner thereof, be exchanged for a Series 1999 Bond or Bonds of any authorized denomination or denominations, of the same maturity, principal amount and interest rate as the Series 1999 Bond or Bonds surrendered. No charge shall be made to any owner of any Series 1999 Bond for the privilege of transfer or exchange, but any owner of any Series 1999 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 Series 1999 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. In any case in which the date of maturity of interest on or principal of the Series 1999 Bonds or the date fixed for redemption of any Bonds shall be a day which is not a business day (a "business day" being any day other than a Saturday or Sunday or a day which in the State of Arkansas is a legal holiday or a day on which banking institutions are authorized by law to close) payment of interest or principal (and premium, if any) need not be made on such date but may be made on the next succeeding day which is a business day with the same force and effect as if made on the date 4 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 6. The Series 1999 Bonds 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: REGISTERED No. (Form of Bond) UNITED STATES OF AMERICA STATE OF ARKANSAS COUNTY OF CRITTENDEN CITY OF WEST MEMPHIS MUNICIPAL AIRPORT IMPROVEMENT REVENUE BOND SERIES 1999 Interest Rate: Dated Date: November 1, 1999 Interest Commencement Date: Registered Owner: Principal Amount: KNOW ALL MEN BY THESE PRESENTS: That the City of West Memphis (the "City"), for value received, hereby promises to pay, but solely from the source as hereinafter provided and not otherwise, to the Registered Owner shown above, upon the presentation and surrender hereof at the principal corporate office of Community First Trust Company, Hot Springs, Arkansas, or its successor or successors, as Trustee and as Paying Agent (herein referred to as 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 interest thereon, but solely from the source as hereinafter provided and not otherwise, in like coin or currency, at the Interest Rate per annum shown above, payable semiannually on the 1st days of May and November of each year, until payment of such principal sum 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 Maturity Date: CUSIP No. REGISTERED 5 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. Interest is payable on the Series 1999 Bond from the interest payment date next preceding the date on which this Series 1999 Bond is authenticated unless this Series 1999 Bond is authenticated on an interest payment date, in which case it shall bear interest from such date, or unless this Series 1999 Bonds is authenticated prior to May 1, 2000, in which case it shall bear interest from the Dated Date, or unless this Series 1999 Bond is authenticated during the period from the Record Date (as somewhere defined) 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 of this Series 1999 Bonds interest is in default hereon, in which case it shall bear interest from the date to which interest has been paid. This Bond is one of an issue of City of West Memphis, Arkansas Municipal Airport Revenue Bonds, Series 1999, aggregating Two Million Eight Hundred Seventy-Five Thousand Dollars ($2,875,000), in principal amount (the "Series 1999 Bonds"), and is issued for the purpose of financing improvements to the City's Municipal Airport ("Airport"), paying costs incidental thereto, funding necessary reserves, providing for interest until Airport revenues are available and paying costs of issuance of the Series 1999 Bonds. The Series 1999 Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas, including particularly Title 14, Chapter 164, Subchapter 4 and Title 14, Chapter 199, Subchapter 1 of the Arkansas Code of 1987 Annotated and pursuant to an ordinance of the City, duly adopted and approved (the "Authorizing Ordinance"), and do not constitute an indebtedness 'of the City within any constitutional or statutory limitation. The Series 1999 Bonds are not general obligations of the City but are special obligations payable from the revenues derived from the operation of the Airport. An amount of Airport revenues sufficient to pay the principal of and interest on the Bonds has been duly pledged and set aside for that purpose. In addition, the Series 1999 Bonds are secured by a pledge of Surplus Utility Revenues, as defined and set forth in the Authorizing Ordinance. Reference is hereby made to the Authorizing Ordinance for a detailed statement of the terms and conditions upon which the Series 1999 Bonds are issued, of the nature and extent of the security for the Series 1999 Bonds, the conditions for the issuance of additional (parity) Bonds and the rights and obligations of the City, the Trustee and the holders of the Series 1999 Bonds. The City has outstanding certain Airport Refunding and Improvement Bonds, Series 1991 (the "1991 Bonds") The Series 1999 Bonds are secured, as to Surplus Utility Revenues, on a parity of 6 pledge with the City's outstanding 1991 Bonds. The pledge of Airport Revenues is subordinate to that securing the 1991 Bonds. (REFERENCE IS HEREBY MADE TO FURTHER PROVISIONS OF THIS BOND ON THE REVERSE SIDE HEREOF WHICH HAVE THE SAME EFFECT AS IF SET FORTH IN THIS PLACE.) IN WITNESS WHEREOF, the City of West Memphis, Arkansas has caused this Series 1999 Bond to be executed by its Mayor and City Clerk, their manual or facsimile signatures thereunto duly authorized, and its corporate seal to be impressed, lithographed or imprinted on this Series 1999 Bond. CITY OF WEST MEMPHIS, ARKANSAS ATTEST: By Mayor City Clerk (SEAL ) (Reverse Side of Bond) CITY OF WEST MEMPHIS, ARKANSAS MUNICIPAL AIRPORT IMPROVEMENT REVENUE BOND, SERIES 1999 The Series 1999 Bonds or portions thereof may be redeemed at the option of the City, in whole or in part, in integral multiples of $5,000, from funds from any source, in inverse order of maturity (and by lot within a maturity in such manner as the Trustee shall determine) in whole on any date and in part on any interest payment date on and after November 1, 2004, at a redemption price (equal to the principal amount being redeemed plus accrued interest to the redemption date. The Series 1999 Bonds maturing on May 1, 2005 are subject to mandatory redemption prior to maturity, selected by lot (determined by any method chosen by the Trustee), at a price equal to the principal amount being redeemed plus accrued interest to the date of redemption, on May 1 of each year as follows: Year 2001 2002 2003 2004 2005 (maturity) Principal Amount $45,000 50,000 50,000 55,000 55,000 7 The Series 1999 Bonds are subject to mandatory redemption prior to maturity, in part, in inverse order of maturity (and by lot within a maturity, in such manner as the Trustee shall determine) from proceeds of the Series 1999 Bonds not needed to accomplish the Improvements, at any time, at a price of par plus accrued interest to the date of redemption. Notice of redemption identifying the Series 1999 Bonds or portions thereof (which shall be $5,000 or a multiple thereof) to be redeemed shall be given by the Trustee, not less than thirty ( 3 0 ) nor more than s ixty ( 6 0 ) days prior to the date f fixed f or redemption, by mailing a copy of the redemption notice by first class mail, postage prepaid, to all registered owners of Series 1999 Bonds to be redeemed. Failure to mail an appropriate notice or any such notice to one or more registered owners of Series 1999 Bonds to be redeemed shall not affect the validity of the proceedings for redemption of other Series 1999 Bonds as to which notice of redemption is duly given in proper and timely fashion. All such Series 1999 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. The Series 1999 Bonds is transferable by the registered owner hereof 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 Series 1999 Bond. Upon such transfer a new fully registered Series 1999 Bond or Series 1999 Bonds of the same series and maturity, of authorized denomination or denominations, for the same aggregate principal amount, will be issued to the transferee in exchange therefor. This Series 1999 Bond is issued with the intent that the laws of the State of Arkansas shall govern its construction. The City has declared the Series 1999 Bonds to be "qualified tax-exempt obligations" within the meaning of Section 265 (b) of the Internal Revenue Code of 1986, as amended. The City and the Trustee may deem and treat the registered owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and premium, if any, hereon and interest due hereon and for all other purposes, and neither the City nor the Trustee nor any paying agent shall be affected by any notice to the contrary. The Series 1999 Bonds are issuable only as fully registered bonds in the denominations of $5,000 and any integral multiple thereof. Subject to the limitations and upon payment of the charges provided in the Authorizing Ordinance, Series 1999 8 Bonds may be exchanged for a like aggregate principal amount of Series 1999 Bonds of the same maturity of other authorized denominations. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of the Series 1999 Bonds do exist, have happened and have been performed in due time, form and manner as required by law; that the indebtedness represented by the Bonds, together with all obligations of the City, does not exceed any constitutional or statutory limitation; and that the above referred to revenues pledged to the payment of the principal of and premium, if any, and interest on the Series 1999 Bonds as the same become due and payable will be sufficient in amount for that purpose. This Series 1999 Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Authorizing Ordinance until the Certificate of Authentication hereon shall have been signed by the Trustee. (Form of Trustee's Certificate) TRUSTEE'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds designated Municipal Airport Revenue Bonds, Series 1999, in and issued under the provisions or the within mentioned Authorizing Ordinance. COMMUNITY FIRST TRUST COMPANY Hot Springs, Arkansas TRUSTEE By Authorized Signature Date of Authentication: (Form of Assignment) ASSIGNMENT FOR VALUE RECEIVED, hereby sells, assigns and transfers unto _ the within bond and all rights thereunder, constitutes and appoints to transfer the within bond on the books thereof with full power of substitution in ("Transferor"), and hereby irrevocably as attorney kept for registration the premises. 9 DATE: Transferor GUARANTEED BY: NOTICE: Signature(s) must be guaranteed by a financial institution acceptable to the Trustee. Section 7. The City covenants that, so long as any Bonds are outstanding under this Ordinance, it will cause the Airport to be operated as a revenue-producing undertaking, to the end that the Net Revenues of the Airport will always be at least equal to 120% of the aggregate maximum annual principal and interest requirements on all outstanding Bonds. Failure to achieve the Net Revenues set forth in this Section shall not constitute a default under this Ordinance, provided that the City continues to operate the Airport in the manner calculated to achieve maximum net revenues. The City shall report any such failure to the West Memphis Public Utility Commission within sixty (60) days following the close of the fiscal year in which such failure shall have occurred. As used in this Ordinance, "Airport Revenues" shall mean all revenues, income, gains, rents and other revenues derived from the operation of the Airport, and "Net Revenues" shall mean all Airport Revenues less the amounts required to pay the costs of operation, maintenance and repair, including all expense items properly attributable to the operation and maintenance of the Airport in accordance with generally accepted accounting principles, excluding depreciation, interest and amortization expenses. The 1991 .Bonds are issued and secured pursuant to Ordinance No. 1492, adopted October 3, 1991 (the "1991 Ordinance"). Certain provisions of the 1991 Ordinance are incorporated herein by reference, as set forth below. Section 8. All Airport Revenues shall be deposited in such depository or depositories as may be lawfully designated from time to time; subject, however, to the giving of security as now or hereafter may be required by law, and provided that such depository or depositories shall hold membership in the Federal Deposit Insurance Corporation ("FDIC") or any successor entity. All deposits shall be in the name of the City or the Airport Commission and shall be so designated as to indicate the particular fund to which the revenues belong. The Bond Fund (identified below) shall be held by the Trustee. Any deposit in excess of the amount insured by the FDIC shall be secured by direct or fully guaranteed obligations of the United States of America unless invested as herein authorized. 10 Section 9. (a) All Airport Revenues shall be deposited into the "Airport Revenue Fund" in a bank selected by the Airport Commission that is a member of the FDIC, as set forth in the 1991 Ordinance. Revenues in the Airport Revenue Fund are hereby pledged and shall be applied to the payment of the principal of and interest on the Bonds, to the maintenance of debt service reserves at required levels, to the payment of the reasonable and necessary expenses of operation and maintenance of the Airport, to the providing of the Depreciation Fund and otherwise as described herein. (b) There shall first be transferred from Airport Revenues in the Revenue Fund the amounts, and at the times, required by Section 10 of the 1991 Ordinance for deposit in the "Bond Fund" created pursuant to such Section 10 (the "1991 Bond Fund"). The Funds created pursuant to the 1991 Ordinance, and the handling of the moneys deposited therein as set forth in the 1991 Ordinance, are incorporated herein by reference. Section 10. (a) There shall next be transferred and paid from the Airport Revenue Fund into a special trust fund, held by the Trustee and hereby created and designated "Airport Revenue Bond Fund" (the "Bond Fund"), the sums in the amounts and at the times set forth in subsection (b) below. (b) There shall be paid into the Bond Fund until all outstanding Bonds, with interest thereon, have been paid in full or provision made for such payment, on the first business day of each month a sum equal to 1/6 of the next installment of interest and a sum equal to 1/12 of the installment of principal due during the then next twelve months (either at maturity or in accordance with any mandatory redemption provisions) of the Bonds (provided that the monthly amount with respect to interest not otherwise provided for which is payable prior to the first interest payment date shall be an amount equal to such payment divided by the number of full months between the date of issuance and such interest payment date) on all outstanding Bonds, plus an amount sufficient to provide for Trustee's and Paying Agent's fees, on all outstanding Bonds. If Additional Bonds are issued pursuant to the provisions of Section 14 hereof, payments into the Bond Fund shall be increased to provide for monthly amortization of such Additional Bonds. (c) There is hereby established and shall be maintained within the Bond Fund a "Debt Service Reserve," initially funded with Series 1999 Bond proceeds in an amount equal to the Required Level (defined below). If Additional Bonds are issued on a parity with the Series 1999 Bonds, the Debt Service Reserve must be increased upon the issuance of such Additional Bonds, so that the amount thereof is equal to the Required Level. The Debt Service Reserve shall be established and maintained at an amount equal to the least of (1) 10% of the proceeds of the Bonds (including a like amount with respect to any Additional Bonds) issued or (2) the 11 maximum annual debt service on all Bonds (including any Additional Bonds) outstanding or (3) 1.25 times the average annual debt service on all Bonds outstanding (the "Required Level"). If the Debt Service Reserve is ever reduced below the Required Level, the monthly payments into the Bond Fund shall be increased by depositing therein the first available Pledged Revenues (as defined in Section 14 below) after required deposits into the Bond Fund, until the Debt Service Reserve is restored to the Required Level. The Debt Service Reserve shall be valued by the Trustee, at market value, no less frequently than annually, and any surplus therein (in excess of the Required level) shall be promptly transferred to the Bond Fund. Any deficiency in the Debt Service Reserve on account of the value thereof shall be corrected by the deposit therein of monthly amounts equal to not less than the amounts sufficient to cure such deficiency in twelve equal deposits. (d) If Airport Revenues are insufficient to make the required payment on the first business day of any month into the Bond Fund, the amount of any such deficiency in the payment made shall be added to the amount otherwise required to be paid into the Bond Fund on the first business day of the next month. Any such deficiency shall be cured by the deposit of sufficient Surplus Utility Revenues on a parity of security and payment with the deposit into the 1991 Bonds Fund. If for any reason there shall be a deficiency in the payments made into the Bond Fund so that there are unavailable sufficient moneys therein to pay the principal of, interest on, and Trustee's and Paying Agent's fees in connection with the Bonds as the same become due, any sums then held in the Debt Service Reserve shall be used to the extent necessary to pay such principal, interest, and Trustee's and Paying Agent's fees. The Dsbt Service Reserve shall be used solely as herein provided, but the moneys therein may be invested as set forth below. (e) If a surplus shall exist in the Bond Fund over and above the amount required for making all principal and interest payments during the next succeeding twelve month period and in excess of the Required Level of the Debt Service Reserve, such surplus shall first be applied to reimburse the Utility System for any deposit to the Bond Fund (including the Debt Service Reserve) pursuant to Section 14 hereof. Any balance remaining thereafter shall be applied at the direction of the City to the payment of the principal of and interest on the Bonds that may be called for redemption prior to maturity or shall be deposited into the Airport Revenue Fund. Otherwise, moneys in the Bond Fund shall be used solely for the payment of principal, premium, if any, and interest on the Bonds and Trustee's and Paying Agent's fees. 12 The City shall withdraw from the Bond Fund on or before the due date of any Bond or interest payable therefrom, at maturity or redemption prior to maturity, and deposit with the Paying Agent, an amount equal to the amount of such Bond or interest payment for the sole purpose of paying the same, together with the Paying Agent's fee. Section 11. After the into the Bond Fund (and the 1991 from the Airport Revenue Fund Maintenance Fund the amounts and 11 of the 1991 Ordinance. required payments have been made Bond Fund), there shall be paid into the Airport Operation and at the times required by Section Section 12. After making the required payments into the Bond Fund (and the 1991 Bond Fund) and Operation and Maintenance Fund, there shall be paid from the Airport Revenue Fund into the Airport Depreciation Fund created pursuant to Section 12 of the 1991 Ordinance. Section 13. Any surplus in the Airport Revenue Fund, after making all disbursements required by the provisions of this Ordinance and making full provision for the funds herein provided, may be used, at the option of the City, for the redemption of Bonds; for constructing additions and improvements to the Airport; or for any lawful municipal purpose. Section 14. (a) The City owns and operates its water, sewer and electric utility facilities (these facilities being referred to herein as the "System" or "Utility System"). The Series 1999 Bonds are secured by a pledge of revenues derived from the operation of the Airport (the "Airport Revenues") and, in addition, by a pledge of "Surplus Utility Revenues," as defined below. The Series 1999 Bonds are secured, as to Surplus Utility Revenues, on a parity of pledge with the City's outstanding 1991 Bonds. The pledge of Airport Revenues is subordinate to that securing the 1991 Bonds. As used in this Ordinance, the term "Pledged Revenues" refers to and includes Airport Revenues and Surplus Utility Revenues. The Surplus Utility Revenues which are pledged to the Series 1999 Bonds are those defined in Arkansas Code of 1987 Annotated §14-199-101, being Utility System revenues remaining after adequate provision has been made for expenses of operation, maintenance and depreciation of the Utility System and all requirements (pertaining to the payment of principal, interest and fees in connection with bonds, and establishing and maintaining reserves) of ordinances securing bonds, heretofore or hereafter issued, to finance or refinance the cost of constructing, reconstructing, extending, improving or equipping the Utility System, including any other utility facilities owned by the City which are at the time declared by the City Council to be interrelated municipal activities and concerning which utility (meaning here all such interrelated activities, i.e., electric, sewer, water, gas, solid waste, or any combination thereof) system 13 revenue bonds are being issued, have been fully met and complied with. Such bonds (or other obligations), heretofore or hereafter issued, are referred to as "Utility Bonds." (b) In this regard, subject to compliance with its covenants hereinafter set forth in this Section, it is understood that this pledge of Surplus Utility Revenues shall not prohibit the City from issuing Utility Bonds, or expending Utility System revenues, for extensions and improvements to the Utility System (including any interrelated utility facilities as referred to in the preceding sentence) from time to time in the future. Any pledge made of Utility System revenues to the payment of Utility Bonds shall be superior to the pledge of Utility System revenues to Bonds secured, in whole or in part, by Surplus Utility Revenues; provided that such Utility Bonds shall be issued in compliance with the requirements for the issuance of parity bonds set forth in the Trust Indenture between the City and The First National Bank of Chicago, Chicago, Illinois dated as of August 15, 1996, securing the City's Public Utility System Revenue Bonds, 1996 Series A (the "Utility Indenture"), including Section 204 thereof (which requirements shall apply without regard to whether any of the Utility Bonds authorized thereby are at the time outstanding). However, the pledge of Surplus Utility Revenues herein made shall be superior and prior to any pledge of Utility System revenues hereafter made to any bonds or other obligations of the City, other than Utility Bonds, except that the City may issue Bonds secured by a pledge of Surplus Utility Revenues and ranking on a parity with the Series 1999 Bonds as to Surplus Utility Revenues if there shall have been procured and filed with the Trustee a statement by an independent certified public accountant not in the regular employ of the City reciting the opinion, based upon necessary investigation, that (1) Surplus Utility Revenues for the fiscal year in which it is proposed to issue such Additional Bonds equal not less than 140 of the maximum annual principal and interest requirements on the outstanding Bonds and the Additional Bonds proposed to be issued, or (2) Surplus Utility Revenues for the next ensuing fiscal year, as reflected by the written opinion of a duly qualified consulting engineer not in the regular employ of the City, equal not less than 140 of the maximum annual principal and interest requirements for the Bonds outstanding and the Additional Bonds proposed to be issued. For the purposes of the computation required by this paragraph, additional amounts may be added to the revenues of the completed fiscal year immediately preceding the issuance of Additional Bonds, as follows: If, prior to the issuance of the Additional Bonds and subsequent to the first day of the preceding fiscal year, the City shall have increased its rates or charges imposed for services of the Utility System there may be added to the revenues of such fiscal year the additional revenues which would have been received from the operation of the Utility System during such fiscal year had such increase been in effect throughout such fiscal year, as reflected by a certificate of a duly qualified consulting engineer not in the regular employ of the 14 City and approved by the Trustee. This pledge of Surplus Utility Revenues to and in favor of the Bonds shall extend and apply to all Utility System revenues, as above defined, but so long as the City is not in default with reference to any of its covenants and obligations pertaining to the Bonds, including, without limitation, those covenants set forth in Section 10 of this Ordinance pertaining to deposits in the Bond Fund, the entire amount of Surplus Utility Revenues not required during any year while the Bonds shall be outstanding for the payment of the principal of, interest on, and Trustee's and Paying Agent's fees in connection with the Bonds and maintaining required reserves at the required levels may be used by the City for any lawful purpose. The City covenants that it will comply with all requirements of the Utility Indenture so long as it may be in effect. (c) So long as any Bonds are outstanding under the provisions of this Ordinance, the City shall not issue or attempt to issue any Bonds claimed to be entitled to a priority of lien on the Airport Revenues over the lien securing the 1991 Bonds. The City reserves the right to issue Additional Bonds, to finance or refinance the cost of constructing any future extensions or improvements to the Airport, secured by a pledge of Airport Revenues ranking, with respect to Airport Revenues, on a parity with the Series 1999 Bonds, provided that there shall have been procured and filed with the Trustee a statement by an independent certified public account not in the regular employ of the City reciting the opinion, based upon necessary investigation, that Net Revenues of the Airport for the fiscal year immediately preceding the fiscal year in which it is proposed to issue such additional Bonds shall equal not less than 130 of the maximum annual principal and interest requirements on all the then outstanding Bonds secured by pledges of Airport Revenues (including the Series 1999 Bonds and any Additional (parity) Bonds) and the Additional Bonds then proposed to be issued. Bonds secured by a pledge of Airport Revenues pursuant to this subsection (c) may, at the option of the City, be additionally secured by a pledge of Surplus Utility Revenues pursuant to subsection (b) above . Section 15. The Series 1999 Bonds shall be subject to redemption prior to maturity in accordance with the terms set out in Section 6 thereof. Section 16. The City will keep proper books of accounts and records (separate from all other records and accounts) in which complete and correct entries shall be made of all transactions relating to the operation of the Airport and of the Utility System, and such books shall be available for inspection by the holder of 15 any of the Bonds at reasonable times and under reasonable circumstances. The City agrees to have these records audited by an independent certified public accountant at least once each year. A copy of each audit shall be delivered to the Trustee not later than 180 days after the end of each fiscal year and shall be made available to any bondholder making request therefor. In the event that the City fails or refuses to make the audit, the Trustee, or any holder of a Bond, may have the audit made, and the cost thereof shall be charged against the Operation and Maintenance Fund. Section 17. The City covenants that it will maintain the Airport in good condition and operate the same in an efficient manner and at reasonable cost. While any of the Bonds are outstanding, the City agrees that, to the extent that comparable protection is not otherwise provided to the satisfaction of the Trustee, it will insure and at all times keep insured, in the amount of the full insurable value thereof, in a responsible insurance company or companies authorized and qualified under the laws of the State of Arkansas to assume the risk thereof, properties of the Airport, to the extent that such properties would be covered by insurance by private companies engaged in similar types of businesses (but in any event in such amounts as will avoid co-insurance responsibilities), against loss or damage thereto from fire and other perils included in extended coverage insurance in effect in Arkansas. The insurance policies are to carry a clause making them payable to the Trustee as its interest may appear, and the satisfactory evidence of insurance is to be placed in the custody of the Trustee. In the event of loss, the proceeds of such insurance shall be applied solely toward the reconstruction, replacement or repair of the Airport, and in such event the City will, with reasonable promptness, cause to be commenced and completed the reconstruction, replacement and repair work. If such proceeds are more than sufficient for such purposes, the balance remaining shall be deposited to the credit of the Airport Revenue Fund, and if such proceeds shall be insufficient for such purposes the deficiency shall be supplied first from moneys in the Depreciation Fund and second from moneys in the Operation and Maintenance Fund and third from surplus moneys in the Airport Revenue Fund. Nothing shall be construed as requiring the City to expend any moneys for operation and maintenance of the Airport or for premiums on its insurance which are derived from sources other than Airport Revenues, but nothing shall be construed as preventing the City from doing so. Section 18. Bonds for the payment or redemption of which moneys or Government Securities, as defined in Section 22 hereof, which are not subject to call prior to maturity (except at the option of the holder thereof) shall have been deposited with the Paying Agent (whether upon or prior to the maturity or the redemption date of such Bonds) shall be deemed to be paid and discharged; provided, however, that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption 16 shall have been duly given or provided for. In determining the sufficiency of the deposit there shall be considered the principal amount of such Government Securities, the dates of maturity thereof and interest to be earned thereon until the maturity of such Government Securities. Section 19. The City covenants that so long as any Bonds are outstanding, that it will not mortgage, pledge or otherwise encumber the Airport, or any part thereof or any revenues derived from the operation thereof, except as herein specifically provided, and will not sell, lease or otherwise dispose of any substantial portion of the same. Nothing herein shall be construed to prohibit the City from disposing of worn out or obsolete Airport properties or from disposing of properties not being used and not useful in the operation of the System, provided that all revenues derived from the disposition of such properties shall be deposited in the Airport Revenue Fund. Section 20. (a) If there be any default in the payment of the principal of or interest on any of the Bonds, or if the City defaults in any Bond Fund requirements or in the performance of any of the other covenants contained and set forth in this Ordinance, the Trustee may, and upon the written request of the holders and registered owners of not less than ten percent (10%) in principal amount of the Bonds then outstanding shall, by proper suit compel the performance of the duties of the officials of the City under the laws of Arkansas. And in the case of a default in the payment of the principal of and interest on any of the Bonds, the Trustee may, and upon the written request of holders or registered owners of not less than ten percent (10~) in principal amount of the Bonds then outstanding shall, apply in a proper action to a court of competent jurisdiction for the appointment of a receiver to administer the Airport and the Utility System on behalf of the City and the holders and registered owners with power to charge and collect (or by mandatory injunction or otherwise to cause to be charged and collected) rates sufficient to pay any Bonds and interest outstanding and to apply the revenue in conformity with the laws of Arkansas and with this Ordinance. When all defaults in principal and interest payments have been cured, the custody and operation of the Airport and the Utility System shall revert to the City. (b) No holder or registered owner of any of the outstanding Bonds shall have any right to institute any suit, action, mandamus or other proceeding in equity or at law for the protection or enforcement of any right under this Ordinance or under the laws of Arkansas unless such holder or registered 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 holders and registered owners of not less than ten percent (10%) in principal amount of the Bonds shall have made written request of the Trustee after the right to exercise 17 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 laws of Arkansas, 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 costs, expenses 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 trusts of this Ordinance or to any other remedy hereunder. It is understood and intended that no one or more holders or registered owners of the Bonds hereby secured shall have any right in any manner whatever by his or their action to affect, any right hereunder except in the manner herein provided, that all maintained in the manner herein provided and for the benefit of all holders and registered owners of all outstanding Bonds and that any individual rights of action or other right given to one or more of such holders and registered 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 secured hereby, enforceable by the Trustee, may be enforced by it without the possession of any of the Bonds appertaining thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the holders and registered owners of such Bonds, subject to the provisions of this Ordinance. (d) No remedy herein conferred upon or reserved to the Trustee or to the holders 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 law. (e) No delay or omission of the Trustee or of any holders 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 and to the holders of the Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient. (f ) The Trustee may, and upon the written request of the holders of not less than fifty percent (50~) in principal amount of the Bonds then outstanding shall waiver 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 18 other remedy, but no such waiver shall extent to or affect any other existing or any subsequent default or defaults or impair any rights or remedies consequent thereon. (g) The cost of any proceedings brought to enforce the Bonds or any provision of this Ordinance, including reasonable attorney's fees, shall, be a debt of the City and shall be paid by the City as incurred and billed by the Trustee. Section 21. This Ordinance shall constitute a binding contract between the City and the holders of the outstanding Bonds, and the City will at all times strictly adhere to the terms and provisions hereof and will fully discharge all of its obligations hereunder. This Ordinance may be amended at any time for the purpose of clarifying its terms, removing ambiguities or enhancing the security for the Bonds. In addition, this Ordinance may be amended at any time for the purpose of clarifying its terms, removing ambiguities or enhancing the security for the Bonds. In addition, subject to the terms and provisions set forth below and not otherwise, the holders of not less than seventy-five percent (75~) in aggregate principal amount of the Bonds then outstanding shall have the right, from time to time, to consent to and approve the adoption by the City of such ordinance supplemental to this Ordinance 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 of this Ordinance or in any supplemental ordinance, except that there shall not be permitted (a) an extension of the maturity of the principal of or the interest on any Bond, or (b) a reduction in the principal amount of any Bond or the rate of interest thereon, or (c) the creation of a lien upon or a pledge of revenues other than as expressly authorized by this Ordinance as now adopted, or (d) the creation of a privilege of priority of any Bond or Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such supplemental ordinance. Section 22. (a) Moneys held for the credit of the Debt Service Reserve in the Bond Fund shall be invested and reinvested in (i) direct or fully guaranteed obligations of the United States of America (including any such securities issued or held in book- entry form on the books of the Department of the Treasury of the United States of America) ("Government Securities") or (ii) in time deposits or certificates of deposit of banks, including the Trustee, which are insured by the Federal Deposit Insurance Corporation (the "FDIC"), or, if in excess of insurance coverage, collateralized by Government Securities, or (iii) obligations issued by the Government National Mortgage Association or (iv) money market funds comprised exclusively of investments described in (i) or (iii) above (collectively, "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 19 five (5) years after the date of investment or the final maturity date of the outstanding Bonds, whichever is earlier. The Trustee shall so invest and reinvest pursuant to the direction of the City and in the Trustee's discretion in the absence of any direct instruction from the City. (b) Moneys held for the credit of the Bond Fund (other than the Debt Service Reserve) shall be invested and reinvested 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. The Trustee shall invest and reinvest pursuant to the direction of the City and in the Trustee's discretion in the absence of any direct instructions from the City. (c) Moneys held for the credit of the Construction Fund and all other Funds established hereunder may be invested and reinvested pursuant to the direction of 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 such money will be required for the purposes intended. (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. Section 23. When the Series 1999 Bonds have been executed and the seal of the City impressed as herein provided, they shall be delivered to the Trustee, and the Trustee shall authenticate them and deliver them to the Underwriter upon payment in case of the purchase price of $2,818,543.75 plus accrued interest from the Dated Date to the date of delivery ("total sale proceeds"). The Trustee shall disburse such funds as set forth in detail in a letter of delivery instructions and delivered to the Trustee as follows: (1) The Trustee shall deposit in the Bond Fund an amount sufficient to provide for early maturing interest on the Series 1999 Bonds. (2) The Trustee shall deposit an amount equal to the Required Level into the Debt Service Reserve. (3) The Trustee shall deposit the balance in a special account designated "1999 Airport Construction Fund" ("Construction Fund") in the Trustee. The moneys in the Construction Fund in excess of the amount insured by the FDIC shall be continuously secured by Government Securities (though any moneys invested as 20 hereafter authorized need not be so secured). The moneys in the Construction Fund shall be disbursed solely in payment of the costs of accomplishing the Improvements, paying necessary expenses incidental thereto and paying expenses of issuing the Series 1999 Bonds. Disbursements shall be on the basis of requisitions which shall contain at least the following information: the person to whom payment is being made; the amount of the payment; and the purpose by general classification of the payment. Each requisition must be signed by the Mayor and one person designated by the Commission and in the case of all items of expense over which the consulting engineer shall exercise supervision each requisition shall be accompanied by a certificate signed by the consulting engineer certifying approval thereof. The Trustee shall issue its check upon the Construction Fund payable to the person, firm or corporation designated in the requisition. The Trustee shall be required to keep accurate records as to all payments made. 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 be evidenced by a certificate signed by the Mayor and by the Chairman of the Commission, which certificate shall state, among other things, the date of the completion and that all obligations payable from the Construction Fund have been discharged. The certificate shall be filed with the Trustee and upon receipt thereof the Trustee shall transfer any remaining balance to the Bond Fund. Section 24. In the event the office of Mayor, City Clerk, City Treasurer, Municipal Airport Commission or City Council 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 shal l be transferred to another office or officer, or in the event of a vacancy in any such office by reason of death, resignation, removal from office or otherwise, or in the event any such officer shall become incapable of performing the duties of his office by reason of sickness, absence from the City or otherwise, all powers conferred and all obligations and duties imposed upon such office or officer shall be performed by the office or officer succeeding to the principal functions thereof, or by the office or officer upon whom such powers, obligations and duties shall be imposed by law. Section 25. It is understood and agreed that the Airport Commission, acting for and on behalf of the City, has custody of and control over the Airport, operates, maintains and repairs the Airport and collects and handles Airport Revenues. Therefore, it is understood and agreed that even though there are some express references to the Commission, all references herein to the City shall, when appropriate in view of the authority and responsibility of the Commission, be construed to mean and include the Commission. To this end, the Commission shall be obligated to perform all 21 covenants and obligations with reference to the System and System revenues, set forth herein, the performance of which are within its authority and jurisdiction. It is understood and intended that the bondholders have relied on, and are beneficiaries of, such commitments of the Commission. It is further understood and agreed that all or portions of the Airport is and may continue to be leased to one or more persons for operational purposes, including the maintenance and operation of facilities, the sales of supplies, and the accounting for and handling of revenues derived therefrom. The City agrees to notify the Trustee of any termination of any such operating lease or like arrangement, or of the abandonment thereof by any such operator, within thirty (30) days after such termination or abandonment. Section 26. The Trustee shall only be responsible for the exercise of good faith and reasonable prudence in the execution of its trust The recitals in this Ordinance and in the face of the Bonds are the recitals of the City and not of the 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 the holders of not less than ten percent (10~) in principal amount of the bonds then outstanding and shall have been offered reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby. The Trustee may resign at any time by sixty (60) days notice in writing to the City Clerk and the majority in principal amount of the holders of the Bonds then outstanding at any time, with or without cause, may remove the Trustee. No such resignation by the Trustee shall be effective until the successor Trustee has been chosen and has delivered written acceptance of its duties hereunder. In the event of a vacancy in the office of Trustee, either by resignation or by removal, the majority in principal amount of the holders of the Bonds then outstanding may appoint a new Trustee,,such appointment to be evidenced by a written instrument or instruments filed with the City Clerk. If the majority in principal amount of the holders of the Bonds then outstanding shall fail to fill a vacancy within thirty (30) days after the same shall occur, then the City shall forthwith designate a new Trustee by a written instrument filed in the office of the City Clerk. The former Trustee and any successor Trustee shall execute a written acceptance of the trust imposed upon it or them 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 holders of the Bonds agree. Such written acceptance shall be filed with the City Clerk 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. In the event of a change in the office of Trustee, the former Trustee which has resigned or been removed shall cease to be Paying Agent and the successor Trustee shall automatically become the Paying Agent. 22 Section 27. Anything herein to the contrary notwithstanding, all rights of any holder of any Bond to or with respect to any moneys or investments held in any fund hereunder shall terminate at the expiration of two years plus six months from the date of maturity of such Bond, whether by scheduled maturity or by call for redemption prior to maturity in accordance with the terms hereof. Section 28. (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 1999 Bonds to be subject to federal income taxation. Without limiting the generality of the foregoing, the City represents and covenants that the proceeds of the bonds and System revenues will not be used directly or indirectly in such manner as to cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"). (b) The City covenants that it will take no action which would cause the Series 1999 Bonds to be "federally guaranteed" within the meaning of Section 149 (b) of the Code; specifically, (A) the payment of any portion of principal or interest with respect to the Series 1999 Bonds will not be guaranteed (directly or indirectly) by the United States or any agency or instrumentality thereof and (B) not more than 5~ of the proceeds of the Series 1999 Bonds (exclusive of proceeds invested for an initial temporary period until needed for the purpose for which the Series 1999 Bonds were issued and proceeds deposited into the Bond Fund) will be invested (directly or indirectly) in federally insured deposits or accounts. Nothing in this Section shall prohibit investments in obligations issued by the United States Treasury. (c) The City 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, the statement required by Section 149(e) of the Code. (d) Acquisition and construction of the Improvements will commence subsequent to the date of adoption of this Ordinance and as of such date no on-site work had been commenced in connection with the construction of the Improvements and no off- site fabrication of any portion of the Improvements had been commenced; prior to such date no binding agreement in connection with the acquisition, construction or equipping of the Improvements has been entered into. (e) The average maturity of the Series 1999 Bonds (within the meaning of Section 147 (b) of the Code) will not exceed 120 of the average reasonably expected economic life of the Improvements (within the meaning of Section 147 (b) of the Code), 23 determined with respect to any facility as of the later of the date on which the Series 1999 Bonds are issued or the date on which the facility is placed in service. (f) So long as any of the Series 1999 Bonds are outstanding, the City will not enter into any lease, service contract, management contract or like arrangement with respect to or related to any of the Improvements, for a term in excess of thirty (30) days, without first obtaining and filing with the Trustee an opinion of counsel of national reputation with respect to the exemption of interest on state and local obligations from federal income tax to the effect that such arrangement will not cause interest on the Series 1999 Bonds to be subject to federal income tax. (g) The City is aware of no reason to expect that debt (including debt in the form of leases) the interest on which is exempt from federal income tax incurred and to be incurred by the City during the current calendar year will exceed in principal amount (1) $10,000,000 (exclusive of private activity bonds other than "qualified 501(c)(3) bonds" within the meaning of Section 265 of the Code), or (2) $5,0.00,000 (exclusive of "private activity bonds" within the meaning of Section 148(f)(4) of the Code) . Section 29. The City recognizes that the exclusion of interest paid on the Series 1999 Bonds from gross income for purposes of regular federal income taxation is dependent upon compliance with the provisions of Section 148 of the Code and regulations thereunder. The City shall, unless and until the City delivers to the Trustee an opinion of Bond Counsel as described in the last paragraph of this Section, make the determinations and take the actions hereinafter by this Section required and make such further or different determinations and take such further or different actions as are necessary, in the opinion of Bond Counsel, to comply with the requirements of Section 148 (f) of the Code and regulations issued or otherwise effective thereunder (the "Regulations"). The Trustee, on behalf of, and at the direction of the City, but only from funds provided by and on the basis of each Rebate Certificate (defined below) shall rebate to the United States, not later than sixty (60) days after the end of the Bond Year ending December 31, 2003, and not later than sixty (60) days after the end of each Bond Year thereafter, an amount which ensures that at least ninety percent (90~) of the Rebate Amount (as hereinafter defined) will, at the time of required payment, be paid to the United States, and within sixty (60) days after the payment or redemption of all principal of any series of the Bonds, an amount sufficient to pay the remaining unpaid balance of the Rebate 24 Amount, all in the manner and as required by Section 148 of the Code and the Regulations pertaining thereto. As used herein, "Rebate Amount" means the amount described in Section 148(f)(2) of the Code, computed in accordance with the provisions of the Code, computed in accordance with the provisions of Section 148 (f) (2) and the Regulations pertaining thereto now or hereafter promulgated, including until superseded, supplemented or amended by Regulations, Section 1.103-15AT, and 1.148-OT through 1.148-9T, as applicable. As used in this Section, "Bond Year" means the twelve-month period ending on December 31. As used in this Section, "Bond Counsel" means any lawyer or firm of lawyers of national reputation with respect to the obligations of public bodies and the exemption of interest thereon from federal income tax and acceptable to the Trustee. The City shall determine the Rebate Amount within thirty (30) days after the close of each Bond Year and upon payment or redemption of all principal of any series of the Bonds, and shall furnish the Trustee upon each determination (i) with a written request verifying such determination and with any supporting documentation required to calculate or evidence the Rebate Amount in accordance with the Code and applicable Regulations (the "Rebate Certificate") and (ii) with funds equal to the Rebate Amount. The City and the Trustee shall retain copies of each Rebate Certificate and records of such determinations until six years after final payment or redemption of all principal of the Bonds of the affected series. Upon receipt by the Trustee of the statement of the City that certain amounts previously paid hereunder are not subject to rebate and an opinion of Bond Counsel acceptable to the Trustee to the effect that failure to rebate such amounts will not cause interest on the Bonds to become includable in gross income of the Holders thereof for regular federal income tax purposes under the Code, Regulations and any then pending federal legislation, the Trustee shall transfer any such amounts to the City. The City shall verify at least annually from the date of delivery of the Bonds that (i) all requirements of this Section have been met on a continuing basis, (ii) adequate procedures have been established and are being complied with to ensure continuing compliance with the requirements of certificates executed and delivered by the City in this regard upon the issuance of the affected series of Bonds and (iii) if applicable, the proper amounts have been paid to the Trustee. The provisions of this Section shall remain in full force and effect notwithstanding the payment or defeasance of the Bonds hereunder. Notwithstanding the foregoing, in the event that the Trustee is furnished with an opinion of Bond Counsel acceptable to 25 the Trustee to the effect that it is not necessary under then existing Regulations or any then pending federal legislation to pay any portion of earnings on investments held hereunder or otherwise to the United States in order to assure the exclusion from gross income for regular federal income tax purposes of interest on the Bonds, the requirements set forth in the preceding portion of this Section (with respect to the portion of such earnings specified in such opinion) need not be complied with and shall no longer be effective and all amounts at the time held by the Trustee for the purposes set forth in this Section (to the extent covered by such opinion) shall be transferred as specified in such opinion. Each payment required to be paid to the United States shall be filed with the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255. Each payment shall be accompanied by a copy of the Form 8038 (or like form then required) originally filed with respect to the Bonds and a statement summarizing the determination of the amount to be paid to the United States. All references to sections of the Code and to Regulations thereunder include references to any successor section or sections which set forth substantive provisions supplanting or superseding those of the sections referred to. The Trustee will agree to modification or rescission of any provision of this Section in the event that there is delivered to the Trustee an opinion of Bond Counsel, acceptable to the Trustee, to the effect that such modification or rescission (a) is necessary to preserve the exemption of interest on the Bonds from regular federal income tax or (b) will not adversely affect such regular federal income tax exemption. Section 30. Nothing in this Ordinance expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the City, the Trustee, ~„ and the registered owners of the bonds, any right, remedy or claim under or by reason of this Ordinance or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Ordinance contained by and on behalf of the City shall be for the sole and exclusive benefit of the City, the Trustee, and the registered owners of the Bonds. Section 31. The provisions of this Ordinance are hereby declared to be separable and if any provision shall for any reason be held illegal or invalid, such holding shall not affect the validity of the remainder of the Ordinance. Section 32. This Ordinance shall not create any right of any kind and no right of any kind shall arise hereunder pursuant to it until the Series 1999 Bonds shall be issued and delivered. 26 Section 33. All ordinances and resolutions or parts thereof, in conflict herewith are hereby repealed to the extent of such conflict. Section 34. It is hereby ascertained and declared that the Improvements must be accomplished as soon as possible in order to make the Airport adequate for the needs of the City and its inhabitants, without which the li~i, health, safety and welfare thereof are jeopardized, that delay in the acquisition and construction of the Improvements results in economic loss and that the issuance of the Series 1999 Bonds and the taking of the other action authorized by this Ordinance is necessary for the accomplishment thereof. It is, therefore, declared that an emergency exists and this Ordinance being necessary for the immediate preservation of the public peace, health and safety shall take effect and be in force from and after its passage. PASSED: October 21, 1999. APPROVED: ATTEST: ®-- Mayor C1 (SEAL ) SPONSORED BY: i~ " DECEIVED CIiY CLERKS OFFICE DATE ~o -~ g- 9q q : ~S <Fn~ FROM 0 27 L CERTIFICATE 1 The undersigned, City Clerk of the City of Went Memphis, Arkansas, hereby certifies that the foregoing pages are a true and correct copy of Ordinance No. /885 adopted at a e,,~lar session of the Council of the City of West Memphis, Arkansas, held at the regular meeting place of the Council in the City at 1:30 p.m., on the 2181 day of October, 1999, and that said Ordinance is of record in Ordinance Record Book No. 199q Page now in my possession. GIVEN under my hand and seal this ~_ day of October, 1999. Ci y Cle (SEAL t 28