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ORD NO 16-2012 ORDINANCE NO. 2o1 AN ORDINANCE AUTHORIZING THE ISSUANCE OF SALES AND USE TAX BONDS, SERIES 2012 FOR THE PURPOSE OF FINANCING THE COST OF CAPITAL IMPROVEMENTS; PLEDGING COLLECTIONS OF TWO 0.50% SALES AND USE TAXES TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS; PRESCRIBING OTHER MATTERS RELATING THERETO; AND DECLARING AN EMERGENCY. WHEREAS, there was submitted to the qualified electors of the City of Van Buren, Arkansas (the "City the questions of issuing, under Amendment No. 62 to the Constitution of the State of Arkansas (the "State and under Title 14, Chapter 164, Subchapter 3 of the Arkansas Code of 1987 Annotated (the "Authorizing Legislation capital improvement bonds, which are described as follows: (a) bonds in the maximum principal amount of $2,900,000 to finance all or a portion of the costs of firefighting facilities and apparatus, including particularly, without limitation, a new fire station, and any parking, equipment, furnishings and utility improvements therefor (the "Firefighting Improvements'); (b) bonds in the maximum principal amount of $4,400,000 to finance all or a portion of the costs of police facilities, including particularly, without limitation, a new police station and any land acquisition, parking, equipment, furnishings and utility improvements therefor (the "Police Improvements (c) bonds in the maximum principal amount of $1,750,000 to finance all or a portion of the costs of park and recreational facilities and any land acquisition, parking, equipment, lighting and utility improvements therefor (the "Park and Recreational Improvements and (d) bonds in the maximum principal amount of $2,650,000 to finance all or a portion of the costs of a facility to be used primarily as a senior center and associated safe shelter and any demolition, land acquisition, parking, equipment, furnishings and utility improvements therefor (the "Senior Center Improvements WHEREAS, at the special election held July 10, 2012, a majority of the electors voting on the questions approved the issuance of such bonds; and WHEREAS, the City Council of the City has determined to accomplish a portion of the Park and Recreational Improvements, Firefighting Improvements, Police Improvements and Senior Center Improvements and to issue the initial series of capital improvement bonds in the aggregate principal amount of $9,870,000 designated as "City of Van Buren, Arkansas Sales and Use Tax Bonds, Series 2012" (the "Series 2012 Bonds"); and WHEREAS, the City has made arrangements for the sale of the Series 2012 Bonds to Stephens Inc. (the "Purchaser at a price of $9,870,696.70 (principal amount plus net original issue premium of $126,539.20 and less underwriter's discount of $125,842.50), plus accrued interest (the "Purchase Price pursuant to a Bond Purchase Agreement between the Purchaser and the City (the "Agreement which has been presented to and is before this meeting; and WHEREAS, the Preliminary Official Statement, dated August 15, 2012, offering the Series 2012 Bonds for sale (the "Preliminary Official Statement has been presented to and is before this meeting; and WHEREAS, the Continuing Disclosure Agreement between the City and Citizens Bank Trust Co., Van Buren, Arkansas, as Dissemination Agent (the "Disclosure Agreement providing for the ongoing disclosure obligations of the City with respect to the Series 2012 Bonds, has been presented to and is before this meeting; and WHEREAS, the principal amount of the Series 2012 Bonds plus net original issue premium are allocated among purposes as hereinafter set forth in Section 22 hereof and $1,703,460.80 in maximum principal amount of capital improvement bonds approved at the July 10, 2012 special election for the Senior Center Improvements, the Firefighting improvements, the Police Improvements, and the Park and Recreational Improvements that are not being issued are hereinafter collectively referred to as "Additional Parity Bonds," and the Series 2012 Bonds and the Additional Parity Bonds are hereinafter referred to collectively as the "bonds NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Van Buren, Arkansas: Section 1. The offer of the Purchaser for the purchase of the Series 2012 Bonds from the City at the Purchase Price, for Series 2012 Bonds bearing interest at the rates per annum, maturing and otherwise subject to the terms and provisions hereafter in this Ordinance set forth in detail be, and is hereby accepted and the Agreement, in substantially the form submitted to this meeting, is approved and the Series 2012 Bonds are hereby sold to the Purchaser. The Mayor is hereby authorized and directed to execute and deliver the Agreement on behalf of the City and to take all action required on the part of the City to fulfill its obligations under the Agreement. Section 2. 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 Series 2012 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 as set forth in the Agreement. Section 3. 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 and City Clerk are each authorized and directed to take all action required on the part of the City to fulfill the City's obligations under the Disclosure Agreement. Any legal fees and other administrative costs incurred by the City in 1 connection with making the annual report pursuant to the Disclosure Agreement (except audit fees) shall be considered administrative charges that may be payable from moneys in the Bond Fund. Section 4. Under the authority of the Constitution and laws of the State, including particularly Amendment No. 62 to the Constitution of the State and the Authorizing Legislation, the Series 2012 Bonds are hereby authorized and ordered issued in the total principal amount of $9,870,000, the proceeds of the sale of which are necessary to provide a portion of the funds necessary for accomplishing the Senior Center Improvements, the Park and Recreational Improvements, the Firefighting Improvements and the Police Improvements (collectively, the "2012 Improvements paying expenses incidental thereto, funding a debt service reserve, and paying expenses of issuing the Series 2012 Bonds. The Series 2012 Bonds shall bear interest at the rates and shall mature on October 1 in the amounts and in the years as follows: Year (October 1) Amount Interest Rate 2013 $370,000 1.000% 2014 1,105,000 2.000 2015 1,130,000 2.000 2016 1,150,000 2.000 2017 1,175,000 2.000 2018 1,200,000 2.000 2019 1,220,000 2.100 2020 1,245,000 2.250 2021 1,275,000 2.300 The Series 2012 Bonds shall be issuable only as fully registered bonds without coupons in the denomination of $5,000 or any integral multiple thereof. Unless the City shall otherwise direct, the Series 2012 Bonds shall be numbered from 1 upward in order of issuance. Each Series 2012 Bond shall have a CUSIP number but the failure of a CUSIP number to appear on any Series 2012 Bond shall not affect its validity. Each Series 2012 Bond shall be dated as of October 1, 2012. Interest on the Series 2012 Bonds shall be payable on April 1, 2013, and semiannually thereafter on April 1 and October I of each year. Payment of each installment of interest shall be made to the person in whose name the Series 2012 Bond is registered on the registration books of the City maintained by Citizens Bank Trust Co., Van Buren, Arkansas, as Trustee and Paying Agent (the "Trustee at the close of business on the fifteenth day of the month (whether or not a business day) next preceding each interest payment date (the "Record Date irrespective of any transfer or exchange of any such bond subsequent to such Record Date and prior to such interest payment date, by check or draft mailed by the Trustee to such owner at his address on such registration books; provided, however, payment of interest shall be made by wire transfer if requested by a registered owner of the Series 2012 Bonds in the aggregate principal amount of $1,000,000 or more. Principal of the Series 2012 Bonds shall be payable at the principal corporate trust office of the Trustee. 3 Each Series 2012 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 October 1, 2012, 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 Series 2012 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 Series 2012 Bond shall be valid and obligatory for any purpose unless and until the Certificate shall have been duly executed by the Trustee, and the Certificate of the Trustee upon any such Series 2012 Bond shall be conclusive evidence that such bond has been authenticated and delivered under this Ordinance. The Certificate on any Series 2012 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 Series 2012 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, series, 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 to be maintained 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. Bonds may be exchanged at the principal corporate trust office of the Trustee for an equal aggregate principal amount of bonds of any other authorized denomination or denominations. The City shall execute and the Trustee shall authenticate and deliver bonds which the registered owner making the exchange is entitled to receive. The execution by the City of any bond of any denomination shall constitute full and due authorization of such denomination and the Trustee shall be thereby authorized to authenticate and deliver such bond. 4 No charge shall be made to any owner of any bond for the privilege of transfer or exchange, but any owner of any bond requesting any such transfer or exchange shall pay any tax or other governmental charge required to be paid with respect thereto. Except as otherwise provided in the immediately preceding sentence, the cost of preparing each new bond upon each exchange or transfer and any other expenses of the City or the Trustee incurred in connection therewith shall be paid by the City. Neither the Trustee nor the City shall be required to transfer or exchange any bonds selected for redemption in whole or in part. The person in whose name any bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal or premium, if any, or interest on any bond shall be made only to or upon the order of the registered owner thereof or his legal representative, but such registration may be changed as hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such bond to the extent of the sum or sums so paid. In any case where the date of maturity of interest on or principal of the bonds or the date fixed for redemption of any bonds shall be a Saturday or Sunday or shall be in the State a legal holiday or a day on which banking institutions are authorized by law to close, then payment of interest or principal need not be made on such date but may be made on the next succeeding business day with the same force and effect as if Blade 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 Series 2012 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 Series 2012 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 Series 2012 Bonds, and receipt of notices and exercise of rights of registered owners. There shall be one certificated, typewritten Series 2012 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 Series 2012 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 Series 2012 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 Series 2012 Bonds, and the participants and persons acting through participants are expected to maintain records of the purchasers of beneficial interests in the Series 2012 Bonds. The Series 2012 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 Series_2012 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 owners of all outstanding Series 2012 5 Bonds, the City and the Trustee, after the Trustee has made provision for notification of the beneficial owners by the then securities depository, shall permit withdrawal of the Series 2012 Bonds from the securities depository, and authenticate and deliver Series 2012 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 Series 2012 Bonds) of the City or of the beneficial owners of the Series 2012 Bonds. Prior to issuance of the Series 2012 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 Series 2012 Bonds so long as the Series 2012 Bonds or a portion thereof are registered in the name of Cede Co. (or a substitute nominee) and held by DTC. Notwithstanding such execution and delivery of the Representation Letter, the terms thereof shall not in any way limit the provisions of this Section or in any other way impose upon the City any obligation whatsoever with respect to persons having interests in the Series 2012 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 Series 2012 Bonds; provided that neither the Trustee nor the City may assume any obligations to such securities depository or beneficial owners of Series 2012 Bonds that are inconsistent with their obligations to any registered owner under this Ordinance. Section 6. 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 Series 2012 Bonds and the Trustee's Certificate shall be in substantially the following form and the Mayor and City Clerk are hereby expressly authorized and directed to make all recitals contained therein: 6 (Form of Series 2012 Bond) REGISTERED REGISTERED No. UNITED STATES OF AMERICA STATE OF ARKANSAS COUNTY OF CRAWFORD CITY OF VAN BUREN SALES AND USE TAX BOND SERIES 2012 Interest Rate: Maturity Date: October 1, Dated Date: October 1, 2012 CUSIP No.: Registered Owner: Cede Co. Principal Amount: KNOW ALL MEN BY THESE PRESENTS: That the City of Van Buren, County of Crawford, State of Arkansas (the "City for value received, hereby promises to pay to the Registered Owner shown above upon the presentation and surrender hereof at the principal corporate trust office of Citizens Bank Trust Co., Van Buren, Arkansas, or its successor or successors, as Trustee and Paying Agent (the "Trustee on the Maturity Date shown above, the Principal Amount shown above, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts and to pay by check or draft to the Registered Owner shown above interest thereon, in like coin or currency from the interest commencement date described below at the Interest Rate per annum shown above, payable on each April 1 and October 1 after the Dated Date shown above, until payment of such Principal Amount or, if this bond or a portion hereof shall be duly called for redemption, until the date fixed for redemption, and to pay interest on overdue principal and interest (to the extent legally enforceable) at the rate borne by this bond. Payment of each installment of interest shall be made to the person in whose name this bond is registered on the registration books of the City maintained by the Trustee at the close of business on the fifteenth day of the month (whether or not a business day) next preceding each interest payment date (the "Record Date irrespective of any transfer or exchange of this bond subsequent to such Record Date and prior to such interest payment date. Notwithstanding the above, payment of interest shall be made by wire transfer when requested by the Registered Owner hereof if it is the registered owner of bonds of this issue in the aggregate principal amount of $1,000,000 or more. Unless this bond is presented by an authorized representative of The Depository Trust Company, a New York corporation "DTC to the Trustee for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede Co. or to such other entity as is required by an authorized representative of 7 DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede Co., has an interest herein. This bond shall bear interest from the payment date next preceding the date on which it is authenticated unless it is authenticated on an interest payment date, in which event it shall bear interest from such date, or unless it is authenticated during the period from the Record Date to the next interest payment date, in which case it shall bear interest from such interest payment date, or unless it is authenticated prior to the first interest payment date, in which event it shall bear interest from the Dated Date shown above, or unless at the time of authentication hereof interest is in default hereon, in which event it shall bear interest from the date to which interest has been paid. This bond is one of an issue of City of Van Buren, Arkansas Sales and Use Tax Bonds, Series 2012, aggregating Nine Million Eight Hundred Seventy Thousand Dollars ($9,870,000) in aggregate principal amount (the `bonds and is issued for the purpose of financing the costs of accomplishing senior center improvements, park and recreational improvements, firefighting improvements and police improvements, paying necessary expenses incidental thereto, funding a debt service reserve, and paying expenses of authorizing and 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 particularly Amendment No. 62 to the Constitution of the State and Title 14, Chapter 164, Subchapter 3 of the Arkansas Code of 1987 Annotated (the "Authorizing Legislation and pursuant to Ordinance No. of the City duly adopted on August 27, 2012 (the "Authorizing Ordinance and an election duly held on July 10, 2012 at which the majority of the legal voters of the City voting on the questions approved the issuance of the bonds. Reference is hereby made to the Authorizing Ordinance for the details of the nature and extent of the security and of the rights and obligations of the City, the Trustee and the registered owners of the bonds. The bonds are special obligations of the City, payable from the collections that are received by the City (the "Pledged Revenues from a 0.50% sales and use tax (the `Bond Tax levied by the City under the Authorizing Legislation and Ordinance No. 8- 2012 of the City duly adopted on April 16, 2012, and a 0.50% sales and use tax levied by the City under Title 26, Chapter 75, Subchapter 2 of the Arkansas Code of 1987 Annotated and Ordinance No. 6 -2012 of the City duly adopted on April 16, 2012. The City hereby pledges the Pledged Revenues for the payment of this bond. The City has reserved the right in the Authorizing Ordinance to issue additional bonds under the Authorizing Ordinance on a parity of security with the bonds "Additional Parity Bonds The bonds are subject to extraordinary and optional redemption as follows: (1) The bonds shall be redeemed by the City from proceeds of the bonds not needed for the intended purposes and Surplus Bond Tax Collections (defined below), in whole at any time or in part on any interest payment date, at a redemption price equal to the principal amount being redeemed plus accrued interest to the redemption date. 8 The City has covenanted in the Authorizing Ordinance that "Surplus Bond Tax Collections being collections from the Bond Tax in excess of the amount necessary to (1) insure the prompt payment of the principal of, interest on and Trustee's and administrative fees and expenses in connection with the bonds and the Additional Parity Bonds as the same become due, (2) establish and maintain the Debt Service Reserve Account in the required amount, and (3) make any arbitrage rebate payment due the United States, must be used from time to time, at least annually, as and to the extent available, to redeem outstanding bonds prior to maturity. If there are no Additional Parity Bonds outstanding, the City shall apply 100% of the Surplus Bond Tax Collections to the redemption of the bonds. If there are Additional Parity Bonds outstanding, the City shall use 85% of the Surplus Bond Tax Collections to redeem the bonds and 15% of the Surplus Bond Tax Collections to redeem the Additional Parity Bonds. In the event of a redemption from Surplus Bond Tax Collections or from bond proceeds, the bonds shall be redeemed in inverse order of maturity and by lot within a maturity in such manner as the Trustee shall determine. In the case of any defeasance of the bonds, redemption of defeased bonds shall be scheduled on the basis of the mandatory redemption requirements and assuming annual Pledged Revenues in an amount equal to Pledged Revenues for a twelve -month period that ends not less than 30 and not more than 90 days prior to the defeasance. (2) The bonds are subject to redemption at the option of the City, from funds from any source, on and after April I, 2018, in whole at any time or in part on any interest payment date, at a redemption price equal to the principal amount being redeemed plus accrued interest to the redemption date. 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. 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 and the date they shall be presented for payment shall be given by the Trustee, not less than 30 nor more than 60 days prior to the date fixed for redemption, by mailing a copy of the redemption notice by first class mail, postage prepaid, or by other standard means, including facsimile transmission and electronic communication, 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. 9 This bond is transferable by the Registered Owner shown above in person or by his attorney -in -fact duly authorized in writing at the principal corporate trust office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Authorizing Ordinance, and upon surrender and cancellation of this bond. Upon such transfer a new fully registered bond or bonds of the same maturity, of authorized denomination or denominations, for the same aggregate principal amount, will be issued to the transferee in exchange therefor. This bond is issued with the intent that the laws of the State shall govern its construction. The City and the Trustee may deem and treat the Registered Owner shown above as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes, and neither the City nor the Trustee shall be affected by any notice to the contrary. The bonds are issuable only as fully registered bonds in the denomination of $5,000, and any integral multiple thereof. Subject to the limitations and upon payment of the charges provided in the Authorizing Ordinance, fully registered bonds may be exchanged for a like aggregate principal amount of fully registered bonds of the same maturity of other authorized denominations. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to exist, happen and be performed, under the Constitution and laws of the State, particularly Amendment No. 62 to the Constitution of the State and the Authorizing Legislation, precedent to and in the issuance of this bond have existed, have happened and have been performed in due time, form and manner as required by law; that the indebtedness represented by this bond and the issue of which it forms a part does not exceed any constitutional or statutory limitation; and that taxes sufficient to pay the bonds and interest thereon have been duly levied under the laws of the State and receipts derived therefrom are pledged to the payment of the bonds in accordance with the Authorizing Legislation. This bond shall not be valid until it shall have been authenticated by the Certificate hereon duly signed by the Trustee. THE BONDS ARE HEREBY DESIGNATED AS QUALIFIED TAX- EXEMPT OBLIGATIONS WITHIN THE MEANING OF SECTION 265(B) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. 10 IN WITNESS WHEREOF, the City of Van Buren, Arkansas has caused this bond to be executed by its Mayor and City Clerk and its corporate seal to be impressed or imprinted on this bond, all as of the Dated Date shown above. CITY OF VAN BUREN, ARKANSAS ATTEST: By Mayor City Clerk (SEAL) 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: CITIZENS BANK TRUST CO. Van Buren, Arkansas TRUSTEE By Authorized Signature (A Form of Assignment shall be attached to the bonds.) Section 7. The City hereby expressly pledges and appropriates all of the revenues derived by the City from (a) a 0.50% sales and use tax levied by the City under the authority of Title 26, Chapter 75, Subchapter 2 of the Arkansas Code of 1987 Annotated and Ordinance No. 6 -2012 adopted on April 16, 2012 (the "Multipurpose Tax and (b) a 0.50% sales and use tax levied by the City under the Authorizing Legislation and Ordinance No. 8 -2012 adopted on April 16, 2012 (the "Bond Tax to the payment of the principal of and interest on the bonds when due at maturity or at redemption prior to maturity and the fees and expenses of the Trustee and other administrative charges, and any arbitrage rebate due the United States under Section 1480 of the Internal Revenue Code of 1986, as amended (the "Code Collections of the Bond Tax are hereby appropriated and shall be used solely to pay the scheduled principal of and interest on the bonds, redeem bonds prior to maturity, and pay the fees and expenses of the Trustee and other administrative charges and any arbitrage rebate due. Collections of the Multipurpose Tax shall be used first, if necessary, to pay the scheduled principal of and interest on the bonds when due or upon mandatory sinking fund redemption and to pay the fees and expenses of the Trustee and other administrative charges and any arbitrage rebate due and second, (a) to pay obligations with respect to other bonds approved by the voters and issued from time to time by the City for capital improvements, (b) for fire, police or other emergency service proposes, (c) for park and 11 recreational purposes, (d) for economic development purposes and (c) for other purposes approved by the voters (the "Multipurpose Tax Uses The City covenants that the Bond Tax and the Multipurpose Tax (collectively, the "Taxes shall not be repealed or reduced while any of the bonds are outstanding. The City further covenants to use due diligence in collecting the Taxes. Nothing herein shall prohibit the City from increasing the Taxes from time to time, to the extent permitted by law, and no part of the revenues derived from any such increase shall become part of the revenues pledged hereunder. Section 8. (s) The City hereby designates Citizens Bank Trust Co., Van Buren, Arkansas as the bank which shall receive collections of the Taxes from the State Treasurer and the City covenants to file a written designation thereof with the State Treasurer prior to the issuance of the Series 2012 Bonds. The Trustee shall deposit all Pledged Revenues as and when received into a special fund of the City in the Trustee which is hereby created and designated "Sales and Use Tax Revenue Fund" (the "Revenue Fund There is created in the Revenue Fund the following accounts: Bond Account and Multipurpose Account. Pledged Revenues received by the Trustee shall be deposited as follows: Pledged Revenues derived from the Bond Tax shall be deposited into the Bond Account and Pledged Revenues derived from the Multipurpose Tax shall be deposited into the Multipurpose Account. (b) Moneys in the Bond Account shall be applied first each month in the following order of priority: (1) 1/6 of the interest on the bonds next due Debt Service Account in the Bond Fund (hereinafter identified); and (2) 1/12 of the principal of the bonds next due at maturity or upon mandatory sinking fund redemption Debt Service Account in the Bond Fund; and (3) the Trustee's fees and expenses and other administrative charges next due Expense Account in the Bond Fund; and (4) the amount which may be necessary to increase the Debt Service Reserve Account to the Required Level (as hereinafter defined) Debt Service Reserve Account in the Bond Fund; and (5) the amount necessary to pay any arbitrage rebate due under Section 148(0 of the Code Expense Account in the Bond Fund; and (6) balance the Redemption Account in the Bond Fund The deposits made into the Debt Service Account in the Bond Fund shall be reduced in order to take into account as a credit (1) interest earnings, (2) accrued interest deposited therein from bond proceeds and (3) transfers from the Debt Service Reserve Account. The deposits made into the Debt Service Account shall be increased as needed so that approximately level payments are made in order to make the first two debt service payments on each series of the bonds. 12 Moneys in the Multipurpose Account shall be applied by the Trustee within five (5) days of receipt by the Trustee in the following order of priority: (1) in the event moneys in the Bond Account are insufficient to make the deposits required by clauses (1) through (5) above, moneys in the Multipurpose Account shall be used for such purpose in the order of priority listed above; and (2) the balance shall be transferred to the City for Multipurpose Tax Uses. Section 9. (a) There is hereby created a special fund of the City in the Trustee which is designated "Sales and Use Tax Bond Fund" (the "Bond Fund for the purpose of providing funds for the payment of principal of and interest on the bonds as they become due at maturity or at redemption prior to maturity, the Trustee's fees and expenses and other administrative charges, and any arbitrage rebate due the United States under Section 148(0 of the Code. There shall be established in the Bond Fund the following accounts into which money from the Revenue Fund shall be deposited monthly: (i) Debt Service Account; (ii) Expense Account; and (iii) Redemption Account. Moneys in the following Bond Fund accounts shall be used on each interest payment date (or in the case of a rebate payment under clause (4) on any date due) in the following order of priority as and when necessary: (1) to pay the interest on the bonds then due Debt Service Account; and (2) to pay the principal of the bonds then due at maturity or upon mandatory sinking fund redemption Debt Service Account; and (3) to pay the Trustee's fees and expenses and other administrative charges then due Expense Account; and (4) to pay the amount which is payable as arbitrage rebate to the United States Treasury under Section 148(0 of the Code Expense Account; and (5) to redeem bonds prior to maturity according to the redemption provisions of the bonds Redemption Account. The Bond Fund (excluding those moneys in the Debt Service Reserve Account and the Redemption Account) shall, except as provided in this Section, be depleted once a year except for a carryover amount not to exceed the greater of (i) one year's earnings on the Bond Fund or (ii) 1/12 of the debt service on the ponds. Any moneys in the Bond Fund shall, except as provided in this Section, be spent for one of the above purposes within a thirteen -month period beginning on the date of deposit, and any amount received from investment of money held in the Bond Fund will be spent within a one -year period beginning on the date of receipt. (b) There shall be established and maintained in the Bond Fund a Debt Service Reserve Account in an amount equal to lesser of (i) the maximum annual debt service requirements on the bonds, (ii) 10% of the lesser of (A) the original proceeds of the bonds in the 13 event there is net original issue discount and (B) the principal amount of the bonds and (iii) 125% of the average annual debt service requirements on the bonds (the "Required Level The City shall fund the Debt Service Reserve Account at the times the bonds are issued. Moneys in the Debt Service Reserve Account shall be used to make principal and interest payments on the bonds when due if moneys in the Bond Fund are not otherwise sufficient for that purpose. Moneys in the Debt Service Reserve Account over and above the Required Level shall be immediately transferred from the Debt Service Reserve Account into the Redemption Account in the Bond Fund. The Trustee shall calculate the Required Level for the Debt Service Reserve Account each time the Trustee is determining whether to redeem the bonds from Surplus Bond Tax Collections (hereinafter defined) and shall use any surplus to redeem the bonds. (c) When the moneys in the Bond Fund, including the Debt Service Reserve Account and the Redemption Account, shall be and remain sufficient to pay (1) the principal of all the bonds then outstanding, (2) interest on the bonds until the next interest payment date, (3) the Trustee's fees and expenses and other administrative charges, and (4) any arbitrage rebate due to the United States under Section 148(0 of the Code, there shall be no obligation to make any further payments into the Bond Fund and any Pledged Revenues remaining in the Bond Fund after the principal of, premium, if any and interest on the bonds and the other obligations set forth herein have been paid may be used by the City for any lawful purpose. (d) All moneys in the Bond Fund shall be used solely for the purpose of paying the principal of and interest on the bonds, Trustee's fees and expenses and other administrative charges, and any arbitrage rebate due to the United States under Section 148(1) of the Code as the same become due. (e) There shall be deposited into the Redemption Account all transfers from the Bond Account in the Revenue Fund remaining after making the applications required by clauses (1) through (4) of subsection (a) above "Surplus Bond Tax Collections and bond proceeds transferred to the Redemption Account pursuant to Section 16 of this Ordinance. The City covenants that moneys in the Redemption Account shall be used on the next available interest payment date, or in the case of the redemption in full of the bonds, on the redemption date, for the purpose of redeeming bonds in accordance with clause (5) of subsection (a) above. (f) The Trustee is authorized and directed to withdraw moneys from the Bond Fund from time to time as necessary for paying principal of and interest on the bonds when due at maturity or at redemption prior to maturity and for making other authorized Bond Fund expenditures. (g) The bonds shall be specifically secured by a pledge of the Pledged Revenues, which pledge in favor of the bonds is hereby irrevocably made according to the terms of this Ordinance, and the City, and the officers and employees of the City, shall execute, perform and carry out the terms thereof in strict conformity with the provisions of this Ordinance. (h) Anything herein to the contrary notwithstanding, moneys in the Redemption Account and interest earnings thereon (1) shall be used from time to time to make up shortfalls in the Bond Fund, rather than redeeming bonds prior to maturity, and (2) shall not 14 be used to redeem bonds more often than annually (rather than on each interest payment date) if the Trustee reasonably determines that such amounts available for redemption may be needed to make scheduled debt service payments. Section 10. Any bond shall be deemed to be paid within the meaning of this Ordinance when payment of the principal of and interest on such bond (whether at maturity or upon redemption as provided herein, or otherwise), either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for by irrevocably depositing with the Trustee, in trust and irrevocably set aside exclusively for such payment (1) cash sufficient to make such payment and /or (2) non callable Government Securities (as defined in Section 17 hereof) (provided that such deposit will not cause any of the bonds to be classified as "arbitrage bonds" within the meaning of Section 148 of the Code), maturing as to principal and interest in such amounts and at such times as will provide sufficient moneys to make such payment, and all necessary and proper fees, compensation and expenses of the Trustee with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of the Trustee. 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 Government Securities. When all the bonds shall have been paid within the meaning of this Ordinance, if the Trustee has been paid its fees and expenses, and if any required arbitrage rebate payment has been made to the United States under Section 148(f) of the Code or provision made therefor, the Trustee shall take all appropriate action to cause (1) the pledge and lien of this Ordinance to be discharged and cancelled, and (ii) all moneys held by it pursuant to this Ordinance and which are not required for the payment of such bonds to be paid over or delivered to or at the direction of the City. Section 11. The City covenants that it will not issue any additional bonds, or incur any additional obligations, secured by a lien on or pledge of the Pledged Revenues prior to the lien and pledge in favor of the outstanding bonds. The City further covenants that it will not issue additional bonds, or incur additional obligations, secured by a lien on or pledge of the Pledged Revenues on a parity with the outstanding bonds, except as hereinafter authorized. Additional Parity Bonds may be issued so long as the City has received collections from the Taxes, or a 1% local sales and use tax levied by the City, for a 12 month period that ends not Tess than 30 and not more than 90 days prior to the date that the Additional Parity Bonds are authorized by the City Council of the City to be issued, in an amount equal to or in excess of 125% of the maximum annual debt service requirement for the Series 2012 Bonds, any outstanding Additional Parity Bonds and the Additional Parity Bonds proposed to be issued. Notwithstanding the above, nothing herein shall be construed to prohibit the City from refunding any bonds and pledging the Pledged Revenues to the refunding bonds on a parity with the non- refunded bonds and such refunding bonds shall be a part of the Additional Parity Bonds hereunder. 15 The City may issue additional bonds, or incur additional obligations, secured by a lien on or pledge of the Pledged Revenues that consist of collections of the Multipurpose Tax, expressly subordinate to the lien and pledge in favor of the bonds. Section 12. The Series 2012 Bonds shall be callable for payment prior to maturity in accordance with the terms set out in the face of the bond form set forth in Section 6 of this Ordinance. The City hereby covenants to use Series 2012 Bond proceeds not necessary for the purposes intended to redeem Series 2012 Bonds on the first available interest payment date. The City hereby covenants to use Surplus Bond Tax Collections to redeem the bonds in accordance with this Ordinance and the terms of the bonds. Section 13. It is hereby covenanted and agreed by the City with the owners of the bonds that the City will faithfully and punctually perform all duties with reference to the Taxes and the bonds required by the Constitution and laws of the State and by this Ordinance, including the collection of the Pledged Revenues, as herein specified and covenanted, and the applying of the Pledged Revenues as herein provided. Section 14. The Trustee will keep or cause to be kept proper books of accounts and records in which complete and correct entries shall be made of all transactions relating to the Pledged Revenues and such books shall be available for inspection by the City, the Purchaser, and the owner of any of the bonds at reasonable times and under reasonable circumstances. The Trustee shall furnish a report to the City on a monthly basis of all receipts and disbursements of the Pledged Revenues received by the Trustee, which monthly report shall commence one month following the first month in which the Pledged Revenues are received by the Trustee. Section 15. (a) If there be any default in the payment of the principal of and interest on any of the bonds, or if the City defaults in the performance of any covenant contained in this Ordinance, the Trustee may, and shall, upon the written request of the owners of not less than 25% in principal amount of the bonds then outstanding, by proper suit compel the performance of the duties of the officials of the City under the Constitution and laws of the State and under this Ordinance, and to take any action or obtain any proper relief in law or equity available under the Constitution and laws of the State. (b) No owner of any bond shall have any right to institute any suit, action, mandamus or other proceeding in equity or in law for the protection or enforcement of any right under this Ordinance or under the Constitution and laws of the State unless such owner previously shall have given to the Trustee written notice of the default on account of which such suit, action or proceeding is to be taken, and unless the owners of not Tess than 25% in principal amount of the bonds then outstanding shall have made written request of the Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers herein granted or granted by the Constitution and laws of the State, or to institute such action, suit or proceeding in its name, and unless, also, there shall have been offered to the Trustee reasonable security and indemnity against the cost, expense and liabilities to be incurred therein or thereby and the Trustee shall have refused or neglected to comply with such request within a reasonable time, and such notification, request and offer of indemnity are hereby declared in 16 every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers and trust of this Ordinance or to any other remedy hereunder. It is understood and intended that no one or more owners of the bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Ordinance, or to enforce any right hereunder except in the manner herein provided, that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all owners of the outstanding bonds, and that any individual rights of action or other right given to one or more of such owners by law are restricted by this Ordinance to the rights and remedies herein provided. (c) All rights of action under this Ordinance or under any of the bonds, enforceable by the Trustee, may be enforced by it without the possession of any of the bonds, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name and for the benefit of all the owners of the bonds, subject to the provisions of this Ordinance. (d) No remedy herein conferred upon or reserved to the Trustee or to the owners of the bonds is intended to be exclusive of any other remedy or remedies herein provided, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or given by any law or by the Constitution of the State. (e) No delay or omission of the Trustee or of any owners of the bonds to exercise any right or power accrued upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy given by this Ordinance to the Trustee and to the owners of the bonds, respectively, may be exercised from time to time and as often as may be deemed expedient. (t) The Trustee may, and upon the written request of the owners of not less than a majority of the owners in principal amount of the bonds then outstanding shall, waive any default which shall have been remedied before the entry of final judgment or decree in any suit, action or proceeding instituted under the provisions of this Ordinance or before the completion of the enforcement of any other remedy, but no such waiver shall extend to or affect any other existing or any subsequent default or defaults or impair any rights or remedies consequent thereon. Section 16. When the Series 2012 Bonds have been executed and sealed as herein provided, they shall be delivered to the Trustee, which shall authenticate them and deliver them to the Purchaser upon payment of the Purchase Price. The accrued interest shall be deposited in the Bond Fund. The expenses of issuing the Series 2012 Bonds as set forth in the delivery instructions to the Trustee signed by the Mayor and City Clerk (the "Delivery Instructions shall be paid from the Purchase Price. The amount necessary to be deposited into the Debt Service Reserve Account as set forth in the Delivery Instructions shall be deposited therein. The balance of the Purchase Price shall be deposited in four (4) special accounts of the City in the Trustee hereby created and designated "2012 Senior Center Improvement Fund "2012 Park and Recreational Improvement Fund "2012 Firefighting Improvement Fund" and the "2012 Police Improvement Fund Moneys initially credited to the 2012 Senior Center Improvement Fund, 2012 Park and Recreational Improvement Fund, 2012 Firefighting 17 Improvement Fund and 2012 Police Improvement Fund (collectively, the "2012 Construction Fund shall be allocated among the various funds comprising the 2012 Construction Fund in proportion to the principal amount of Series 2012 Bonds allocated for each purpose. The amounts credited to each fund comprising the 2012 Construction Fund shall be expended to accomplish the purpose for which the account was created. issuance costs and other expenses not specific to any one purpose shall be joint obligations to be paid from each fund comprising the 2012 Construction Fund in proportion to the initial moneys credited thereto. Disbursements shall be made from the 2012 Construction Fund on the basis of requisitions which shall specify: the name of the person, firm or corporation to whom payment is to be made; the amount of the payment; the purpose of the payment; the account from which the payment is to be made; and that the payment is a proper charge on that account. Each requisition must be signed by the Mayor and City Treasurer. The Trustee shall issue its check upon the applicable fund that is a part of the 2012 Construction Fund to the person, firm or corporation designated in the requisition. The Trustee shall keep records as to all payments made from the 2012 Construction Fund. Moneys in the 2012 Construction Fund shall also be used to pay the principal of and interest on the Series 2012 Bonds when due on a pro rata basis if moneys in the Bond Fund are not sufficient for that purpose. When all required expenses have been paid and expenditures made from the 2012 Construction Fund for and in connection with the accomplishment of the 2012 Improvements and the financing thereof, this fact shall, if moneys remain in the 2012 Construction Fund, be evidenced by a certificate signed by the Mayor, which certificate shall state, among other things, that all obligations payable from the 2012 Construction Fund have been discharged. A copy of the certificate shall be filed with the Trustee, and upon receipt thereof the Trustee shall transfer any remaining balance to the Bond Fund for purposes of redeeming the Series 2012 Bonds. Section 17. (a) Moneys held for the credit of the 2012 Construction Fund shall be invested and reinvested in Permitted Investments (hereinafter defined) or other investments permitted by Arkansas law which shall mature, or which shall be subject to redemption by the holder thereof, at the option of such holder, not later than the date or dates when such money will be required for the purposes intended. (b) Moneys held for the credit of the Debt Service Reserve Account 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 five years from the date of the investment or the final maturity date of the bonds that are outstanding on the date of the investment, whichever is earlier. (c) Moneys held for the credit of the Bond Fund (other than the Debt Service Reserve Account) and the Revenue Fund shall be invested and reinvested in Permitted Investments, which will mature, or which will be subject to redemption by the holder thereof at the option of the holder, not later than the date or dates on which the money shall be required for the payment of the principal of and interest on the bonds when due. 18 (d) Obligations purchased as an investment of any fund or account shalt be deemed at all times a part of such fund. Any profit or loss realized on investments of moneys in any fund shall be charged to said fund. (e) 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. (t) "Permitted Investments" are defined as (i) direct or fully guaranteed obligations of the United States of America "Government Securities (ii) direct obligations of an agency, instrumentality or government- sponsored enterprise created by an act of the United States Congress and authorized to issue securities or evidences of indebtedness, regardless of whether the securities or evidences of indebtedness are guaranteed for repayment by the United States Government, (iii) certificates of deposit or demand deposits of banks, including the Trustee, which are insured by Federal Deposit Insurance Corporation or, if in excess of insurance coverage, collateralized by Government Securities or other securities authorized by Arkansas law to secure public funds or (iv) money market funds invested exclusively in Government Securities and the obligations described in (ii) above. Section 18. Citizens Bank Trust Co., Van Buren, Arkansas is hereby appointed to act as Trustee and Paying Agent pursuant to this Ordinance. The Trustee shall be responsible for the exercise of good faith and reasonable prudence in the execution of its trusts. The recitals in this Ordinance and in the bonds are the recitals of the City and not of the Trustee. The Trustee shall not be required to take any action as Trustee unless it shall have been requested to do so in Writing by the owners of not less than 25% in principal amount of 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 by giving 60 days' notice in writing to the City Clerk and the owners of the bonds, and either the City, so long as it is not in default hereunder, or the majority in principal amount of the owners of the outstanding bonds 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 removal, the City shall forthwith designate a new Trustee by a written instrument filed in the office of the City Clerk. The new Trustee shall be a bank or a trust company 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 $50,000,000. The preceding criteria may be met by a parent corporation if the parent corporation has guaranteed the obligations of the successor trustee. The Trustee and any successor Trustee shall file a written acceptance and agreement to execute the trusts imposed upon it by this Ordinance, but only upon the terms and conditions set forth in this Ordinance and subject to the provisions of this Ordinance, to all of which the respective owners of the bonds agree. Such written acceptance shall be filed with the City Clerk and a copy thereof shall be placed in the bond transcript. Any successor Trustee shall have all the powers herein granted to the original Trustee. Notwithstanding the above, no removal, resignation or termination of the Trustee shall take effect until a successor shall be appointed. Section 19. (a) The terms of this Ordinance shall constitute a contract between the City and the owners of the bonds and no variation or change in the undertaking herein set 19 forth shall be made while any of the bonds are outstanding, except as hereinafter set forth in subsections (b) and (c). (b) The Trustee may consent to any variation or change in this Ordinance that the Trustee determines is not to the material prejudice of the owners of the bonds, in order to cure any ambiguity, defect or omission in this Ordinance or any amendment hereto or in connection with the issuance of the Additional Parity Bonds, without the consent of the owners of the bonds. (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 (1) an extension of the maturity of the principal of or the interest on any bond, or (2) a reduction in the principal amount of any bond or the rate of interest thereon, or (3) the creation of a pledge of the Pledged Revenues superior to the pledge created by this Ordinance, or (4) a privilege or priority of any bond or bonds over any other bond or bonds, or (5) a reduction in the aggregate principal amount of the bonds required for consent to such supplemental ordinance. Section 20. (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 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 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 being financed 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. (c) The City covenants that it will not reimburse itself from Series 2012 Bond proceeds for any costs paid prior to the date the Series 2012 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. (d) The City covenants that it will, in compliance with the requirements of Section 148(1) of the Code, pay with moneys in the Bond Fund to the United States Government in accordance with the requirements of Section 148(0 of the Code, from time to time, an amount equal to the sum of (1) the excess of (A) the amount earned on all Non purpose Investments (as therein defined) attributable to the Series 2012 Bonds, other than investments attributable to such excess over (B) the amount which would have been earned if such Non purpose Investments attributable to the Series 2012 Bonds were invested at a rate equal to the Yield (as defined in the 20 Code) on the Series 2012 Bonds, plus (2) any income attributable to the excess described in (1), subject to the exceptions set forth in Section 148 of the Code. The City further covenants that in order to assure compliance with its covenants herein, it will employ a qualified consultant to advise the City in making the determination required to comply with this subsection (d). Anything herein to the contrary notwithstanding this provision may be modified or rescinded if in the opinion of Bond Counsel such modification or rescission will not affect the tax- exempt status of the Series 2012 Bonds for federal income tax purposes. Section 21. 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. The City further covenants that it will submit to the Secretary of the Treasury of the United States, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Series 2012 Bonds are issued, a statement concerning the Series 2012 Bonds which contains the information required by Section I49(c) of the Code. Section 22. The principal amount of the Series 2012 Bonds plus net original issue premium ($9,996,539.20) are allocated as follows: (a) $2,264,173.41 for the Senior Center Improvements; (b) $1,495,208.85 for the Park and Recreational Improvements; (c) $3,759,382.26 for the Police Improvements; and (d) $2,477,774.68 for the Firefighting Improvements. Section 23. The provisions of this Ordinance are separable and in the event that any section or part hereof shall be held to be invalid, such invalidity shall not affect the remainder.of this Ordinance. Section 24. All ordinances and resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. Section 25. It is hereby ascertained and declared that the 2012 Improvements are immediately needed for the preservation of the public peace, health and safety and to remove existing hazards thereto. The 2012 Improvements cannot be accomplished without the issuance of the Series 2012 Bonds, which cannot be sold at the interest rates specified herein unless this Ordinance is immediately effective. Therefore, it is declared that an emergency exists and this Ordinance being necessary for the preservation of the public peace, health and safety shall be in force and take effect immediately upon and after its passage. PASSED: AttAS'f' a" 1 t 2012. J AP "O D: ATTEST: C u1 PttQ, City Clerk �(SEAL) 21 1 CERTIFICATE The undersigned, City Clerk of the City of Van Buren, Arkansas (the "City hereby certifies that the foregoing pages are a true and correct copy of Ordinance No. 16, -201,2 passed at a regular session of the City Council of the City, held at the regular meeting place of the Council, at 7:00 o'clock p.m. on the 27th day of August, 2012, and that the Ordinance is of record in Ordinance Record Book No. at Page now in my possession. riia- GIVEN under my hand and seal this day of August, 2012. 1 City Clerk (SEAL) L 22