2146ORDINANCE NO. ~_(p
AN ORDINANCE AUTHORIZING THE ISSUANCE AND
SALE OF CAPITAL IMPROVEMENT REVENUE BONDS,
SERIES 2006; 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 Council of the City of West Memphis,
Arkansas (the "City") has determined that the it is in the best
interest of the City to acquire, construct and renovate park and
recreational improvements, with related facilities (the
"Improvements"); and
WHEREAS, the City can accomplish all or a portion of the
Improvements by the issuance of Capital Improvement Revenue Bonds,
Series 2006 in the aggregate principal amount of $1,745,000 (the
"bonds"); and
WHEREAS, the City has made arrangements for the sale of
the bonds to Stephens Inc. (the "Purchaser") at a price of 99% of
par plus accrued interest (the "Purchase Price") pursuant to a Bond
Purchase Agreement (the "Purchase Agreement") which has been
presented to and is before this meeting; and
WHEREAS, the Continuing Disclosure Agreement between the
City and Bank of the Ozarks, Little Rock, Arkansas (the "Disclosure
Agreement"), providing for the ongoing disclosure obligations of
the City with respect to the bonds, has been presented to and is
before this meeting;
NOW, THEREFORE, BE IT ORDAINED by the City Council of
the City of West Memphis, Arkansas:
Section 1. The Improvements shall be accomplished. The
Mayor and City Clerk are hereby authorized to take, or cause to be
taken, all action necessary to accomplish the Improvements and to
execute all required contracts.
Section 2. The offer of the Purchaser for the purchase
of the bonds from the City at the Purchase Price is hereby
accepted, and the Purchase Agreement, in substantially the form
submitted at 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 be, and he 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 the bonds as set forth in the Purchase Agreement.
Section 4. Under the authority of the Constitution and
laws of the State of Arkansas (the "State"), including particularly
~,, Title 14, Chapter 164, Subchapter 4 of the Arkansas Code of 1987
Annotated, City of West Memphis, Arkansas Capital Improvement
Revenue Bonds, Series 2006 are hereby authorized and ordered issued
in the aggregate principal amount of $1,745,000 for the purpose of
financing all or a portion of the costs of accomplishing the
Improvements and paying necessary expenses of issuing the bonds.
The bonds shall mature on June 1 in the years and in the amounts
and shall bear interest as follows:
Year Principal Amount Interest Rate
2008* $130,000 3.75%
2010* 140,000 3.80
2012* 150,000 3.90
2014* 160,000 4.10
2016* 175,000 4.25
2018* 185,000 4.35
2019 100,000 4.40
2020 105,000 4.45
2021 110,000 4.50
2023* 235,000 4.55
2025* 255,000 4.60
* Term Bonds.
follows:
Principal of and interest on the bonds is payable as
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Date Principal Interest Total
12/1/2006 - $37,267.50 $ 37,267.50
6/1/2007 $ 65,000.00 37,267.50 102,267.50
12/1/2007 - 36,048.75 36,048.75
6/1/2008 65,000.00 36,048.75 101,048.75
12/1/2008 - 34,830.00 34,830.00
6/1/2009 70,000.00 34,830.00 104,830.00
12/1/2009 - 33,500.00 33,500.00
6/1/2010 70,000.00 33,500.00 103,500.00
12/1/2010 - 32,170.00 32,170.00
6/1/2011 75,000.00 32,170.00 107,170.00
12/1/2011 - 30,707.50 30,707.50
6/1/2012 75,000.00 30,707.50 105,707.50
12/1/2012 - 29,245.00 29,245.00
6/1/2013 80,000.00 29,245.00 109,245.00
12/1/2013 - 27,605.00 27,605.00
6/1/2014 80,000.00 27,605.00 107,605.00
12/1/2014 - 25,965.00 25,965.00
6/1/2015 85,000.00 25,965.00 110,965.00
12/1/2015 - 24,158.75 24,158.75
6/1/2016 90,000.00 24,158.75 114,158.75
12/1/2016 - 22,246.25 22,246.25
6/1/2017 90,000.00 22,246.25 112,246.25
12/1/2017 - 20,288.75 20,288.75
6/1/2018 95,000.00 20,288.75 115,288.75
12/1/2018 - 18,222.50 18,222.50
6/1/2019 100,000.00 18,222.50 118,222.50
12/1/2019 - 16,022.50 16,022.50
6/1/2020 105,000.00 16,022.50 121,022.50
12/1/2020 - 13,686.25 13,686.25
6/1/2021 110,000.00 13,686.25 123,686.25
12/1/2021 - 11,211.25 11,211.25
6/1/2022 115,000.00 11,211.25 126,211.25
12/1/2022 - 8,595.00 8,595.00
6/1/2023 120,000.00 8,595.00 128,595.00
12/1/2023 - 5,865.00 5,865.00
6/1/2024 125,000.00 5,865.00 130,865.00
12/1/2024 - 2,990.00 2,990.00
6/1/2025 130,000.00 2,990.00 132,990.00
The bonds shall be dated June 1, 2006 and 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.
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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 which
shall be immobilized in the custody 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 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 defined), 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
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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.
Interest on the bonds shall be payable on December 1,
2006, and semiannually thereafter on June 1 and December 1 of each
year. Payment of each installment of interest shall be made to the
person in whose name the bond is registered on the registration
books of the City maintained by Bank of the Ozarks, Little Rock,
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.
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 June 1, 2006, 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
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unless and until the Certificate shall have been duly executed by
the Trustee, and the Certificate 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, 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
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 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,
of authorized denomination or denominations, for the same aggregate
principal amount will be issued to the transferee in exchange
therefor.
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. The City shall not
be required to transfer or exchange any bonds selected for
redemption in whole or in part.
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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 of 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 (and
premium, if any) 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. The bonds, together with interest thereon, are secured
solely by the Pledged Revenues. The Pledged Revenues are hereby
pledged and mortgaged for the equal and ratable payment of the
bonds. This pledge in favor of the bonds is hereby irrevocably
made according to the terms of this Ordinance, and the City and its
officers and employees shall execute, perform and carry out the
terms thereof in strict conformity with the provisions of this
Ordinance.
The "Pledged Revenues" are a special revenue source and
are defined to mean all revenues received by the City from the
franchise fees charged to public utilities for the privilege of
using the streets, highways and other public places in the City,
pursuant to the authority contained in Title 14, Chapter 200,
Sections 101 through 112 of the Arkansas Code of 1987 Annotated or
successor statutes. The Pledged Revenues shall not be deemed to be
general revenues of the City and shall be deposited into a special
fund hereinafter created. The bonds and interest thereon shall not
constitute an indebtedness of the City within any constitutional or
statutory limitation. The bonds shall never give rise to a charge
against the City's general credit or taxing power and no funds
derived from the City's taxes are pledged to pay the bonds.
Nothing herein shall require the City to pay the principal of and
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interest on the bonds from sources other than the Pledged Revenues,
but nothing herein shall prohibit the City from doing so.
Section 6. The 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:
(Form of Bond)
UNITED STATES OF AMERICA
STATE OF ARKANSAS
COUNTY OF CRITTENDEN
CITY OF WEST MEMPHIS
CAPITAL IMPROVEMENT REVENUE BOND
SERIES 2006
Interest Rate:
Dated Date: June 1, 2006
Registered Owner: Cede & Co.
Principal Amount:
CUSIP No.:
Maturity Date: June 1,
Dollars
KNOW ALL MEN BY THESE PRESENTS:
That the City of West Memphis, Arkansas (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
corporate trust office of Bank of the Ozarks in Little Rock,
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 interest thereon, but solely from the source as
hereinafter provided and not otherwise, in like coin or currency
from the interest commencement date specified below at the Interest
Rate per annum shown above, payable December 1, 2006 and
semiannually thereafter on the first days of June and December 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
close of business on the fifteenth day of the month (whether or not
a business day) next preceding each interest payment date (the
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"Record Date"), irrespective of any transfer or exchange of this
bond subsequent to such Record Date and prior to such interest
payment date.
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 prior
to the first interest payment date, in which event it shall bear
interest from the Dated Date shown above, 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
hereof interest is in default hereon, in which event it shall bear
interest from the date to which interest has been paid.
Unless this certificate 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 requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.
This bond is one of an issue of City of West Memphis,
Arkansas Capital Improvement Revenue Bonds, Series 2006,
aggregating One Million Seven Hundred Forty-Five Thousand Dollars
($1,745,000) in principal amount (the "bonds"), and is issued for
the purpose of financing all or a portion of the costs to acquire,
construct and renovate park and recreational improvements, with
related facilities, and pay necessary expenses of issuing the
bonds.
The bonds are issued pursuant to and in full compliance
with the Constitution and laws of the State of Arkansas (the
"State"), including particularly Title 14, Chapter 164, Subchapter
4 of the Arkansas Code of 1987 Annotated, and pursuant to Ordinance
No. of the City, duly adopted on May 18, 2006 (the
"Authorizing Ordinance"), and do not constitute an indebtedness of
the City within any constitutional or statutory limitation. The
bonds are not general obligations of the City but are special
obligations secured solely by a pledge of revenues received by the
City that are derived from the payment of franchise fees by public
utilities for the privilege of using the streets, highways and
other public places in the City (the "Pledged Revenues") The
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Pledged Revenues shall be deemed to be a special source for the
payment of the bonds. The bonds shall never give rise to a charge
against the City's general credit or taxing power and no funds
derived from the City's taxes are pledged to pay the bonds. An
amount of Pledged Revenues sufficient to pay the principal of and
interest on the bonds has been duly pledged and set aside into the
2006 Park and Recreational Capital Improvement Revenue Bond Fund
identified in the Authorizing Ordinance. Reference is hereby made
to the Authorizing Ordinance for a detailed statement of the terms
and conditions upon which the bonds are issued, of the nature and
extent of the security for the bonds, and the rights and
obligations of the City, the Trustee and the registered owners of
the bonds. Nothing herein or in the Authorizing Ordinance shall
require the City to pay the principal of and interest on this bond
except from the Pledged Revenues, but nothing herein or in the
Authorizing Ordinance shall prevent the City from doing so.
The bonds shall be subject to extraordinary, optional and
mandatory sinking fund redemption as follows:
1. The bonds shall be redeemed from proceeds of the
bonds which are not needed for the purposes intended, in whole or
in part, on any interest payment date, in inverse order of maturity
(and by lot within a maturity in such manner as the Trustee shall
determine), at a price equal to the principal amount being redeemed
plus accrued interest to the redemption date.
2. The bonds are subject to redemption at the option of
the City, from funds from any source, in whole at any time or in
part on any interest payment date on and after December 1, 2011, at
a redemption price equal to the principal amount being redeemed
plus accrued interest to the redemption date. If fewer than all of
the bonds shall be called for redemption, the particular maturities
of the bonds to be redeemed shall be selected by the City in its
discretion. If fewer than all of the bonds of any one maturity
shall be called for redemption, the particular bonds or portion
thereof to be redeemed from such maturity shall be selected by lot
by the Trustee.
3. The bonds maturing on June 1 in the years 2008, 2010,
2012, 2014, 2016, 2018, 2023 and 2025 are subject to redemption
prior to maturity, at a price equal to the principal amount being
redeemed plus accrued interest to the date of redemption, as
selected by lot (determined by any method chosen by the Trustee),
as follows:
10
Year Principal Amount Year Principal Amount
2007 $65,000 2009
2008 (maturity) 65,000 2010 (maturity)
Year
Principal Amount Year
2011 $75,000 2013
2012 (maturity) 75,000 2014 (maturity)
Year
Principal Amount Year
2015 $85,000 2017
2016 (maturity) 90,000 2018 (maturity)
Year Principal Amount Year
2022 $115,000 2024
2023 (maturity) 120,000 2025 (maturity)
$70,000
70, 000
Principal Amount
$80,000
80,000
Principal Amount
$90,000
95,000
Principal Amount
$125,000
130,000
The obligation to redeem bonds prior to maturity is
subject to the right of the City to acquire bonds and surrender
such bonds to the Trustee, for credit at the par amount thereof.
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.
Notice of redemption identifying the 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 30 nor more
than 60 days prior to the date fixed for redemption, by mailing a
copy of the redemption notice by first class mail, postage prepaid,
to all registered owners of bonds to be redeemed. Failure to mail
an appropriate notice or any such notice to one or more registered
owners of bonds to be redeemed shall not affect the validity of the
proceedings for redemption of other bonds as to which notice of
redemption is duly given 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.
With respect to notice of redemption of the bonds at the
option of the City, unless moneys sufficient to pay the principal
of and premium, if any, and interest on the bonds to be redeemed
shall have been received by the Trustee prior to the giving of such
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notice, such notice shall state that redemption shall be
conditional upon the receipt of such moneys by the Trustee on or
prior to the date fixed for such redemption. If such moneys shall
not have been so received, such notice shall be of no force and
effect, the City shall not redeem such bonds and the Trustee shall
give notice, in the manner in which the notice of redemption was
given, that such moneys were not so received.
This bond 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 Ord?.nance, and upon surrender
and cancellation of this bond. Upon such transfer a new fully
registered bond or bonds of the same maturity, 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 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 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 of other aut~iorized 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 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 bonds as the same become due and
payable will be sufficient in amount for that purpose.
This bond shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the
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Authorizing Ordinance until the Certificate of Authentication
hereon shall have been signed by the Trustee.
THE CITY HAS DESIGNATED THIS BOND AS A "QUALIFIED
TAX-EXEMPT OBLIGATION" WITHIN THE MEANING OF SECTION 265 (b) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED.
IN WITNESS WHEREOF, the City of West Memphis, Arkansas
has caused this bond to be executed by its Mayor and City Clerk,
their signatures thereunto duly authorized and its corporate seal
to be impressed or imprinted on this bond, all as of the Dated Date
shown above.
ATTEST
City Clerk
(SEAL )
CITY OF WEST MEMPHIS, ARKANSAS
By
Mayor
(Form of Trustee's Certificate)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds issued under the provisions
of the within mentioned Authorizing Ordinance.
Date of Authentication:
BANK OF THE OZARKS
Little Rock, Arkansas
TRUSTEE
By
Authorized Signature
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(Form of Assignment)
FOR VALUE RECEIVED , __
hereby sells, assigns and transfers unto
within bond and all rights thereunder,
constitutes and appoints
ASSIGNMENT
("Transferor"),
the
and
hereby irrevocably
as attorney to
transfer the within bond on the books kept for registration thereof
with full power of substitution in the premises.
DATE:
GUARANTEED BY:
Transferor
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. (a) The City agrees continuously to charge
franchise fees to all public utilities occupying the streets,
highways and other public places under tirkansas Code Annotated ~§
14-200-101-112, or successor statutes, while the bonds are
outstanding.
(b) The franchise fees currently charged to public
utilities, are hereby ratified, confirmed and continued and such
fees shall never be reduced while the bonds are outstanding unless
the City receives an opinion of a certified public accountant not
in the regular employ of the City ("Accountant") to the effect that
Pledged Revenues for the preceding fiscal year, assuming such
reduction had been in effect for the entire year, would have
equaled not less than 130% of the maximum annual debt service on
all obligations of the City to which Pledged Revenues are pledged.
(c) The franchise fees currently collected from the
public utilities are sufficient to pay the principal of and
interest on the bonds when due and the City agrees that the
percentage rate of each franchise fee currently collected by the
City from public utilities will not be increased solely for the
purpose of providing funds to pay the principal of and interest on
the bonds when due.
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Section 8. The City Treasurer shall be the custodian of
all Pledged Revenues. All Pledged Revenues shall at all times be
accounted for separately and distinctly from other moneys of the
City and shall be used and applied only as provided herein. Upon
receipt by the City, the Pledged Revenues shall not be deposited
into the General Fund but shall be deposited into a special fund of
the City hereby created and designated as the "Franchise Fee Fund"
in such depository or depositories for the City as may be lawfully
designated by the City from time to time; provided that such
depository or depositories shall hold membership in the Federal
Deposit Insurance Corporation or any successor entity ("FDIC").
Section 9. There shall be transferred from the Franchise
Fee Fund into a special fund hereby created with the Trustee and
designated "2006 Park and Recreational Improvement Revenue Bond
Fund" (the "Bond Fund"), the sums in the amounts and at the times
described below for the purpose of providing funds for the payment
of the principal of and interest on the bonds, as due.
There shall be paid into the Bond Fund, on or before the
last business day of each month, a sum equal to one-sixth (1/6) of
the next installment of interest plus one-twelfth (1/12) of the
next installment of principal on all outstanding bonds due at
maturity; provided, however, that monthly payments shall be
increased as and to the extent necessary to provide sufficient
funds, by deposit of equal monthly amounts, to make the principal
and interest payments on the bonds. The City shall also pay into
the Bond Fund such additional sums as necessary to provide for the
Trustee's fees and expenses.
The City shall realize a credit against monthly deposits
into the Bond Fund to the extent of interest earnings or investment
gains on moneys in the Bond Fund or other deposits into the Bond
~. Fund.
~"` If Pledged Revenues are insufficient to make the required
payment by the last business day of the 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 by the last business day of the next month.
When the moneys held in the Bond Fund shall be and remain
sufficient to pay the principal of and interest on the bonds then
outstanding, there shall be no further obligation to make further
payments into the Bond Fund. All moneys in the Bond Fund shall be
used solely for the purpose of paying the principal of and interest
on the bonds and Trustee's fees, except as hereinafter set forth.
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The Trustee is hereby authorized and directed to withdraw
from the Bond Fund before the due date for the principal and/or
interest on any bond, at maturity or redemption prior to maturity,
the amount of such bond and interest due thereon for the sole
purpose of paying the same, together with the Trustee's fee. No
withdrawal of funds from the Bond Fund shall be made for any other
purpose except as otherwise authorized in this Ordinance.
Section 10. Any balance in the Franchise Fee Fund after
making the monthly deposits into the Bond Fund may be withdrawn
from the Franchise Fee Fund and used, at the option of the City,
for other lawful municipal purposes; provided, however, that if the
City receives Pledged Revenues only on a quarterly or annual basis,
there shall always remain in the Franchise Fee Fund an amount
sufficient to make the required payments into the Bond Fund until
the next Pledged Revenues are to be received.
Section 11. So long as any of the bonds are outstanding,
the City shall not issue or attempt to issue any bonds or
obligations claimed to be entitled to a priority of lien on the
Pledged Revenues over the lien securing the bonds. The City
reserves the right to issue additional bonds to finance or pay the
cost of constructing any additional capital improvements or to
refund bonds issued for such purpose, but the City shall not
authorize or issue any such additional bonds ranking on a parity
with the outstanding bonds unless and until there have been
procured and filed with the City Clerk and the Trustee a statement
by an Accountant reciting the opinion, based upon necessary
investigation, that the Pledged Revenues for the fiscal year
immediately preceding the fiscal year in which it is proposed to
issue such additional bonds were equal to not less than 1300 of the
average annual principal and interest requirements on all the then
outstanding obligations secured by Pledged Revenues and the
additional bonds then proposed to be issued. In making the
computation, the Accountant may treat any increase in franchise
fees enacted subsequent to the first day of such preceding year as
having been in effect throughout that year and may include in
Pledged Revenues for such year the amount that would have been
received had the increase been in effect throughout such year.
The additional bonds, the issuance of which is restricted
and conditioned by this Section, shall be understood to mean bonds
secured by Pledged Revenues ranking on a parity of security with
the bonds and not bonds secured by Pledged Revenues subordinate in
security to the bonds and such bonds may be issued without
complying with the terms and conditions hereof.
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The City covenants that it will comply with all covenants
and undertakings set forth in the ordinance or ordinances securing
such additional bonds.
Section 12. The bonds shall be subject to redemption
prior to maturity in accordance with the terms set out in the bond
form.
Section 13. The City shall cause proper books of
accounts and records to be kept (separate from all other records
and accounts) in which complete and correct entries shall be made
ice, of all transactions relating to the Pledged Revenues, and such
books shall be available for inspection by the Trustee and/or any
Bondholder at reasonable times and under reasonable circumstances.
The City agrees to have its financial statements audited by the
Joint Legislative Auditing Committee, Division of Legislative Audit
of the State of Arkansas, or, at the option of the City, an
Accountant, and a copy of the audit shall be delivered to the
Trustee and any Bondholder requesting the same in writing within 45
days after it is received by the City.
Section 14. 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) bank deposits or certificates of deposit fully insured
by the FDIC sufficient to make such payment and/or (2) direct or
fully guaranteed obligations of the Department of the Treasury of
the United States of America ("Investment Securities") (provided
that such deposit will not affect the tax exempt status of the
interest on any of the bonds or cause any of the bonds to be
classified as "arbitrage bonds" within the meaning of Section 148
of the Internal Revenue Code of 1986, as amended (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 pertaining to the bonds with respect to which such deposit
is made shall have been paid or the payment thereof provided for to
the satisfaction of the Trustee.
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 Investment Securities.
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When all the bonds shall have been paid within the
meaning of this Ordinance and if the Trustee has been paid its fees
and expenses, the Trustee shall take all appropriate action to
cause (i) the pledge and lien of this Ordinance to be discharged
and canceled, 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.
In determining the sufficiency of the deposit of Investment
Securities there shall be considered the principal amount of such
Investment Securities and interest to be earned thereon until the
maturity of such Investment Securities.
Section 15. 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 requirement or in the performance of any
of the other covenants contained in this Ordinance, the Trustee
may, and upon the written request of the registered owners of not
less than 10% in principal amount of the then outstanding bonds,
shall, by proper suit, compel the performance of the duties of the
officials of the City under the laws of Arkansas.
No 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 power or right unless 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
registered 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 power 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 granted to the Trustee, 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. Such notification,
request and offer of indemnity are, at the option of the Trustee,
conditions precedent to the execution of any remedy. No one or
more registered 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
thereunder except the manner herein described. All proceedings at
law or in equity shall be instituted, had and maintained in the
manner herein described and for the benefit of all registered
owners of the outstanding bonds.
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(c) 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 (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 or
pledge superior to the lien and pledge created by this Ordinance,
or (d) a privilege or priority of any bond or bonds over any other
bond or bonds, or (e) a reduction in the aggregate principal amount
of the bonds required for consent to such supplemental ordinance.
Section 17. When the bonds have been executed, they
shall be authenticated by the Trustee and the Trustee shall deliver
the bonds to or at the direction of the Purchaser upon payment of
the Purchase Price. The accrued interest shall be deposited into
the Bond Fund. Expenses of issuing the bonds as set forth in the
delivery instructions to the Trustee signed by the Mayor shall be
paid from the Purchase Price. The remainder of the Purchase Price
shall be remitted to the City for deposit into a special account in
the name of the City designated "2006 Park and Recreational
Improvement Fund" (the "Improvement Fund") in a depository or
depositories designated by the City that are members of FDIC. The
moneys in the Improvement 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
bonds. Disbursements shall be on the basis of checks 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 check must be
signed by the City Treasurer. The City shall be required to keep
accurate records of all payments made on the basis of checks.
When the Improvements have been completed and all
required expenses paid and expenditures made from the Improvement
Fund for and in connection with the accomplishment of the
Improvements and the financing thereof, this fact shall, if moneys
remain in the Improvement 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 Improvement Fund have been discharged. A copy of the
certificate shall be filed with the depository or depositories of
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the Improvement Fund, and a copy with the Trustee, and upon receipt
thereof the City shall transfer any remaining balance to the Bond
Fund for the purpose of redeeming bonds, provided that if such
amount does not exceed $5,000, it may be applied by the City for
any purpose.
Section 18. (a) Moneys held for the credit of the Bond
Fund shall be continuously invested and reinvested, in Permitted
Investments (as hereinafter defined), 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 the payment date for interest
or principal and interest on the bonds. 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 instructions
from the City.
(b) Moneys held for the credit of the Improvement Fund
and the Franchise Fee Fund shall be continuously invested and
reinvested in Permitted Investments or other investments as may,
from time to time, be permitted by 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 the
moneys held for the credit of the particular fund will be required
for purposes intended.
(c) 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.
(d) "Permitted Investments" are defined as (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) time deposits or
certificates of deposit of banks which are insured by the FDIC, or,
if in excess of insurance coverage, collateralized by Government
Securities or other securities authorized by law to secure public
funds.
Section 19. (a) The City covenants that it shall not
take any action or suffer or permit any action to be taken or
conditions to exist which causes or may cause the interest payable
on the 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 bonds and the
Pledged Revenues will not be used directly or indirectly in such
21
manner as to cause the 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 bonds, in such
manner as to cause the 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 bonds to make or finance loans to any person, and
(ii) that while the bonds are outstanding the Improvements will
only be used by state or local governmental entities or by persons
on a basis as members of the general public unless the City
receives an opinion from bond counsel to the effect that the
proposed use will not adversely affect the tax-exempt status of
interest on the bonds for federal income tax purposes.
Without limiting the generality of the foregoing, the
City covenants that it will not enter into any contract for the use
of any portion of the Improvements, other than contracts having a
term of not more than 50 days (including renewal options) which are
negotiated at arms-length, for compensation at fair value, except
upon the Trustee's having been provided with the opinion of counsel
of national recognition with respect to the exemption from federal
income tax of interest on state and local government obligations
that such contract will not affect adversely the exemption with
respect to the bonds authorized hereby.
(c) The bonds are hereby designated as "qualified
tax-exempt obligations" within the meaning of the Code. The City
represents that the aggregate principal amount of its qualified
tax-exempt obligations (excluding "private activity bonds" within
the meaning of Section 141 of the Code which are not "qualified
501(c)(3) bonds" within the meaning of Section 145 of the Code),
including those of its subordinate entities, issued in calendar
year 2006 are not expected to exceed $10,000,000.
The City further represents that (i) the aggregate
principal amount of its tax-exempt obligations (not including
"private activity bonds" within the meaning of Section 141 of the
Code), including those of its subordinate entities, to be issued in
calendar year 2006 is not reasonably expected to exceed $5,000,000,
and (ii) at least 95% of the proceeds of the bonds will be expended
for the Improvements.
(d) The City covenants that it will take no action which
would cause the bonds to be "federally guaranteed" within the
meaning of Section 149(b) of the Code. Nothing in this Section
22
No remedy conferred upon or reserved to the Trustee or to
the registered owners of the bonds is intended to be exclusive of
any other remedy or remedies, and every such remedy shall be
cumulative and shall be in addition to every other remedy given
under this Ordinance or by law.
The Trustee may, and upon the written request of the
registered owners of not less than 50% 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.
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 for the benefit of all the registered owners of such
bonds, subject to the provisions of this Ordinance.
No delay or omission of the Trustee or of any registered
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 and
to the registered owners of the bonds, respectively, may be
exercised from time to time and as often as may be deemed
expedient.
In any proceeding to enforce the provisions of this
Ordinance any plaintiff bondholder shall be entitled to recover
from the City all costs of such proceeding, including reasonable
Section 16. (a) The terms of this Ordinance shall
constitute a contract between the City and the registered owners of
the bonds and no variation or change in the undertaking herein set
forth shall be made while any of these bonds are outstanding,
except as hereinafter set forth in subsections (b) and (c).
attorneys' fees.
(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 to cure any
ambiguity, defect or omission in this Ordinance or any amendment
hereto without the consent of the owners of the outstanding bonds.
19
r
shall prohibit investments in bonds issued by the United States
Treasury.
(e) 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, a statement
required by Section 149(e) of the Code.
(f) The City covenants that it will not reimburse itself
from proceeds of the bonds for costs paid prior to the date the
bonds are issued except in compliance with United States Treasury
Regulation No. 1.150-2 (the "Regulation") This Ordinance shall
constitute an "official intent" for the purpose of the Regulation.
Section 20. (a) 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 registered owners of not less than 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 giving 60 days' notice in writing to the City Clerk and to
the registered owners of the bonds, and the majority in principal
amount of the registered owners of the outstanding bonds, or the
City, so long as it is not in default hereunder, at any time, with
or without cause, may remove the Trustee. In the event of a
vacancy in the office of Trustee, either by resignation or by
removal, the City shall forthwith designate a new Trustee by a
written instrument filed in the office of the City Clerk. The
original Trustee .and any successor Trustee shall file a written
acceptance and agreement to execute 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 registered owners 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.
(b) Every successor Trustee appointed pursuant to this
Section shall be a trust company or bank in good standing, 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 $10,000,000.
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(c) Any resignation by the Trustee shall not be
effective until the appointment of a successor Trustee under this
Section.
Section 21. Notwithstanding any provision of any
ordinance of the City authorizing a franchise fee that is part of
the Pledged Revenues, the franchise fees are deemed to be "fees"
and not "taxes."
Section 22. 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 on behalf of the City. The Mayor is
authorized and directed to take all action required on the part of
the City to fulfill its obligations under the Disclosure Agreement.
Section 23. The provisions of this Ordinance are hereby
declared to be severable and if any provision shall for any reason
be held illegal or invalid, such holding shall not affect the
validity of the remainder of this Ordinance.
Section 24. All ordinances and resolutions or parts
thereof, in conflict herewith are hereby repealed to the extent of
such conflict.
Section 25. It is hereby ascertained and declared
the I ments are immediately needed for the preser ' on of the
public peace, and safety and to remov xisting hazards
thereto. The Improveme nnot be a plished without the
issuance of the bonds, which cannot until this Ordinance is
effective. Therefore, it is ared that an envy exists and
this Ordinance, b necessary for the preservation o ublic
peace, and safety, shall be in force and take of
i ately upon and after its passage.
PASSED: May 18, 2006.
ATTEST:
' y Clerk
APPROVED:
Mayor
(SEAL)
24
CERTIFICATE
The undersigned, City Clerk of the City of West Memphis,
Arkansas (the "City"), hereby certifies that the foregoing pages
are a true and correct copy of Ordinance No. X14 adopted at a
regular session of the City Council of the City, held at the
regular meeting place of the City Council at t:30 p.m., on the 18"'
day of May, 2006, and that the Ordinance is of record in Ordinance
Record Book No. ~,DO(o of the City, .now in my possession.
GIVEN under my hand and seal this 18t'' day of May, 2006.
Clerk
(SEAL)
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