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HomeMy WebLinkAboutORD 1997-077 � 4 �,.�. ORDINANCE 97-77 AUTHORIZING THE ISSUANCE OF � . $7,370,000 . �"}�' CITY OF GRAPEVINE,TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 1997 Adopted: August 4, 1997 � 6.1�F:�FI N AMG RA32S81002\O R D_AUTH 07/I7N7:(10:08am) a, , TABLE OF CONTENTS Pa�e �� Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE I DEFINITIONS,FINDINGS AND INTERPRETATION Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Section 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 1.03. Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 1.04. Table of Contents,Titles and Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 1.05. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ARTICLE II SECURITY FOR THE BONDS Section 2.01. Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .'. . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 2.02. Bonds as Special Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ¢' ARTICLE III � � AUTHORIZATION;GENERAL TERMS AND PROVISIONS REGARDING THE BONDS Section 3.01. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 3.02. Date, Denomination, Maturities and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 3.03. Medium, Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Section 3.04. Execution and Registration of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 3.05. Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 3.06. Registration, Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 3.07. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 3.08. Temporary Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 3.09. Replacement Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Section 3.10. Book-Entry Only System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Section 3.11. Successor Securities Depository;Transfer Outside Book-Entry Only System . . . . 12 Section 3.12. Payments to Cede& Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 ARTICLE IV REDEMPTION OF BONDS BEFORE MATURITY �, Section 4.01. Limitation on Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 4.02. Optional Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 4.03. Partial Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 � Section 4.04. Notice of Redemption to Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 6.I\F:�FI N AMG RA325�81002\O R D_AU"f H o�m�vr.�to:os�m) �1� �. , Paee Section 4.05. Payment Upon Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 � Section 4.06. Effect of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 ARTICLE V PAYING AGENT/REGISTRAR Section 5.01. Appointment of Initial Paying Agent/Registrar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 5.02. Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 5.03. Maintaining Paying Agent/Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 5.04. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 5.05. Notice of Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 5.06. Agreement to Perform Duties and Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 5.07. Delivery of Records to Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 ARTICLE VI FORM OF THE BONDS Section 6.01. Form Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 6.02. Form ofthe Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 "�""'" Section 6.03. CUSIP Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Section 6.04. Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 ,,,�.� Section 6.05. Statement of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . :`. . . . . . . 21 ARTICLE VII SALE AND DELIVERY OF BONDS; DEPOSIT OF PROCEEDS Section 7.01. Sale of Bonds, Official Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Section 7.02. Control and Delivery of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Section 7.03. Deposit of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 ARTICLE VIII FUNDS AND ACCOUNTS Section 8.01. SpecialFunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Section 8.02. Revenue Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 8.03. Interest and Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 8.04. Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 8.05. Deficiencies in Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 8.06. Excess Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Section 8.07. Security of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Section 8.08. Investment of Certain Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 � 6.I�F:�FlNM1�GRA325\6t002\ORD AUTH o�it�Nr.po:os�m� - �11� � = Pase ARTICLE IX �� ADDITIONAL PARITY BONDS Section 9.01. Additional Parity Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 ARTICLE X REPRESENTATIONS AND COVENANTS Section 10.01. Payment of Bonds and Additional Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Section 10.02. Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Section 10.03. Maintenance and Operation; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Section 10.04. Records; Accounts; Accounting Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Section 10.05. Further Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Section 10.06. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Section 10.07. Federal Income T�Exclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 ARTICLE XI ' �,� DEFAULT AND REMEDIES Section 11.01. Remedies in Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 � . ARTICLE XII DISCHARGE Section 12.01. Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 ARTICLE XIII CONTINUING DISCLOSURE UNDERTAKING Section 13.01. Definitions of Continuing Disclosure Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Section 13.02. Annual Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Section 13.03. Material Event Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Section 13.04. Limitations, Disclaimers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 � � 6.1�:�F I NAMG RN 25�61002\O R D_AU7N 07/17N7:(�O:OSam) �111) ,�. , Pa�e ARTICLE XIV �.:,,� EMERGENCY Section 14.01. Emergency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 EXECUTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 EXHIBIT A: DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION �:�.� �.,� . � � 6.I�F:�FINAMGRA325�81002\ORD AUTH 0�/17N7:(IO:OBam) �1V) - w AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS, AUTHORIZING THE ISSUANCE AND SALE OF CITY OF GRAPEVINE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE „�;,, REFUNDING AND IMPROVEMENT BONDS, SERIES 1997, IN THE AGGREGATE PRINCIPAL AMOUNT OF $7,370,000; PROVIDING FOR THE SECURITY FOR AND PAYMENT OF SAID BONDS; APPROVING THE OFFICIAL STATEMENT; ENACTING OTHER PROVISIONS RELATING TI-ILRETO; DECLARING AN EMERGENCY AND PROVIDING nN EFFECTIVE DATE WHEREAS,the City of Grapevine,Texas(the"City"),has previously issued its waterworks and sewer system revenue bonds payable from and secured by a first and superior lien on and pledge of the net revenues of the City's combined waterworks and sewer system (the "System"); and WHEREAS, the City has previously entered into Contract No. DACW63-80-C-0027 between the United States of America and the City for Water Storage Space, dated as of January 26, 1981 (the "Water Storage Agreement"); WHEREAS,pursuant to the terms of the Water Storage Contract, the City is obligated to pay its allocable share of the costs to provide water storage capacity in Grapevine Lake, such obligation being in the original principal amount of$683,547.44(the"Refunded Obligation"), a portion of which .�. ,� is currently outstanding; WHEREAS, the City Council(the"City Council") hereby finds, determines and declares that �-� refunding the outstanding Refunded Obligation is in the best interests of the City and will result in a present value savings to the City; WHEREAS,in the ordinances authorizing such previously issued waterworks and sewer system revenue bonds, the City reserved the right and option to issue, under certain conditions, additional bonds on a parity as to lien and pledge with such bonds; and WHEREAS, the City Council of the City(the"City Council"),by resolution adopted on July 15, 1997, authorized the giving of notice of its intent to issue waterworks and sewer system revenue bonds, in an amount not to exceed $6,775,000, for the purpose of paying costs related to the construction, acquisition and installation of additional improvements and extensions to the City's waterworks and sewer system,including engineering and plumbing costs and to pay the costs incurred in connection with the issuance of bonds; and WHEREAS,official notice of the City's aforementioned intention to authorize the issuance of bonds was duly given in accordance with law by publication thereof in a newspaper of general circulation within the City on July 20, 1997, and on July 27, 1997, the first said date of publication being at least fourteen (14) days before the date designated for passage of this Ordinance; and ,�:;� WHEREAS,no petition has been filed with the City Secretary,any member of this City Council or any other officer of the City requesting a referendum election on the question of the issuance of said bonds; � 6.I�F':1FINANIGRA325�81002\ORD AUTH. 07/17N7:(10:O8am) m � WHFREAS, the City Council finds and determines that the bonds hereinafter authorized shall be issued pursuant to this Ordinance to provide funds to be used for: (i) paying costs related to the construction, acquisition and installation of additional improvements and extensions to the City's .�r:� waterworks and sewer system,including engineering and plumbing costs and to pay the costs incurred in connection with the issuance of bonds, (ii) refunding the Refunded Note, and (iii) paying the costs of issuing the Bonds, which the City Council hereby determines to be necessary and economically feasible, all in accordance with the Constitution and general laws of the State of Texas, particularly Article 717k and Articles lll 1 et seq.,Texas Civil Statutes Annotated, as amended; WHEREAS,the meeting at which this Ordinance is considered is open to the public as required by law, and the public notice of the time, place and purpose of said meeting was given as required by Chap. 551, Texas Government Code, as amended. NOW, THEREFORE,BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE,TEXAS: ARTICLE I DEFINITIONS,FINDINGS AND INTERPRETATION Section 1.01. Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise,in this Ordinance, the following terms shall have the meanings specified below: ��� "Additional Bonds"means the additional revenue bonds authorized to be issued on a parity with the Bonds and the Previously Issued Bonds in accordance with the terms and conditions prescribed in Section 9.01 of this Ordiriance. "Bond" means any of the Bonds. "Bond Date"means the date designated as the date of the Bonds by Section 3.02(a). "Bonds"means the City's waterworks and sewer system revenue bonds authorized to be issued by Section 3.01 of this Ordinance and designated as"City of Grapevine,Texas, Waterworks and Sewer System Revenue Refunding and Improvement Bonds,Series 1997." "City"means the City of Grapevine,Texas. "Closing Date"means the date of the initial delivery of and payment for the Bonds. "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings and court decisions. "DTC"shall mean The Depository Trust Company of New York, New York, or any successor securities depository. � "DTC ParticipanY' shall mean brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to � facilitate the clearance and settlement of securities transactions among DTC Participants. 6.I�F:�FiNAMGRA325�81002\ORD AUTH 07/17/97:(IO:OSam) -2- � _.p "Designated Payment/Transfer Office" means (i) with respect to the initial Paying Agent/Registrar named in this Ordinance, the Designated Payment/Transfer Office as designated in the Paying Agent/Registrar Agreement, or at such other location designated by the Paying Agent/Registrar, and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the Authority and such successor. "Fiscal Year" or"Year"means the fiscal year used by the City in connection with the operation of the System. "Fund" means any fund established pursuant to this Ordinance or any ordinance authorizing the issuance of the Previously Issued Bonds and any Additional Bonds. "Initial Bond" means the initial Bond authorized by Section 3.04(d) of this Ordinance. "Interest and Sinking Fund"means the "City of Grapevine, Texas, Waterworks and Sewer System Revenue Interest and Sinking Fund,"described in Section 8.03 of this Ordinance. "Interest Payment Date"means the date or dates upon which interest on the Bonds is scheduled to be paid until their respective dates of maturity or prior redemption, such dates being March and September 1 of each year, commencing March l, 1998. "Net Revenues" means all income, revenues, and receipts of every nature derived from and received by virtue of the operation of the System (including interest income and earnings received from '"""` the investment of moneys in the special funds created or confirmed by this Ordinance or ordinances authorizing the issuance of Additional Bonds) after deducting, paying, and making provision for the +r� payment of current expenses of maintenance and operation thereof, including all salaries, labor, materials,repairs and e�ctensions necessary to render efficient service;provided,however,that only such expenses for repairs and extensions as in the judgment of the City Council, reasonably and fairly exercised, are necessary to keep the System in operation and to render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair any obligations payable from the Net Revenues of the System,shall be deducted in determining "Net Revenues." Contractual payments for the purchase of water or the treatment of sewage shall be a maintenance and operating e�ense of the System to the extent provided in the contract therefor and as may be authorized by law. Depreciation shall never be considered as an expense of operation and maintenance. "Outstanding"when used in this Ordinance with respect to the Bonds, Previously Issued Bonds or Additional Bonds, as the case may be, means, as of the date of determination, all such bonds theretofore issued and delivered, except: (i) those bonds theretofore canceled by the paying agent/registrar or delivered to the paying agent/registrar for cancellation; (ii) those bonds for which payment has been duly provided by the City by the irrevocable deposit with the paying agent/registrar of money in the amount necessary to fully pay the principal of and interest thereon to maturity or redemption, as the case may be, provided that,if such bonds are to be redeemed,notice of redemption thereof shall have been � 6.1�F:�F 1NAMGRA325�81002\ORD_AUTH 07/17N7:(IO:OSam) -3- � . duly given pursuant to the ordinance authorizing such bonds or irrevocably provided to be given to the satisfaction of the paying agent/registrar, or waived; (iii) those bonds that have been mutilated,destroyed,lost,or stolen and replacement bonds have been registered and delivered in lieu thereof as provided in the ordinance authorizing such bonds; and (iv) those bonds for which the payment of the principal of and interest on has been duly provided by the City in accordance with the provisions of the ordinance authorizing such bonds by the deposit in trust of money or Government Obligations, or both. "Owner" means the person who is the registered owner of a Bond or Bonds, as shown in the Register,which shall be Cede&Co., as nominee for DTC,so long as the Bonds are in book-entry only form and held by DTC as securities depository in accordance with Section 3.10 hereof. "Parity Bond" or "Parity Bonds" means the Previously Issued Bonds, the Bonds and any Additional Bonds at any time outstanding. "Paying Agent/Registrar" means initially Bank One, Texas, N.A., Fort Worth, Texas, or any successor thereto as provided in this Ordinance. "Previously Issued Bonds"means the City's Waterworks and Sewer System Revenue Refunding �� and Improvement Bonds, Series 1985, dated September l, 1985, the City's Waterworks and Sewer System Revenue Bonds,Series 1988,dated October l, 1988, the City's Waterworks and Sewer System Revenue Refunding Bonds,Series 1992,dated August 1, 1992;the City's Waterworks and Sewer System � Revenue Bonds, Series 1995, dated July 15, 1995, and the City's Waterworks and Sewer System Revenue Bonds, Series 1996, dated October 1, 1996. "Prior Ordinances"means the ordinances that authorized the issuance of the Previously Issued Bonds. "Record Date"means the fifteenth day of the month next preceding an Interest Payment Date. "Refunded Obligations"means the outstanding obligation owed to the Government which is described in the preamble. "Register"means the Register specified in Section 3.06(a). "Representation Letter" means the Blanket Letter of Representations between the City and DTC. "Reserve Fund"means the"City of Grapevine,Texas,Waterworks and Sewer System Revenue Bonds Reserve Fund," described in Section 8.04 of this Ordinance. "Reserve Fund Requirement"means the amount which is equal to the average annual principal and interest requirements on the Parity Bonds at any time outstanding. � 6.I�E:�FINAMGRA325�61002\ORD AUTH 07/17N7:(10:08am) '4' � -� "Revenue Fund"means the"City of Grapevine,Texas,Watenvorks and Sewer System Revenue Fund," described in Section 8.02 of this Ordinance. "Special Record Date"means the Special Record Date as prescribed in Section 3.03(b). "System" means the City's e�sting combined waterworks and sewer system, including all properties (real, personnel or mixed and tangible or intangible) owned, operated and maintained by, and vested in, the City for the supply, treatment and distribution of treated water for domestic, commercial,industrial and other uses and the collection and treatment of water-carried waste,together with all future additions, extensions, replacements, and improvements thereto. "Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the payment of principal of or interest on the Bonds as the same come due and payable and remaining unclaimed by the Owners of such Bonds for 90 days after the applicable payment or redemption date. Section 1.02. Other Definitions. The terms"City"and"City Council"shall have the meanings assigned to them in the preamble of this Ordinance. Section 1.03. Findines. The declarations, determinations and findings declared, made and found in the preambles to this Ordinance are hereby adopted,restated and made a part of the operative provisions hereof. � � Section 1.04. Table of Contents. Titles and Headines. The table of contents, titles and headings of the Articles and Sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the '�'' terms or provisions hereof and shall never be considered or given any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. Section 1.05. Interpretation. (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein to sustain the validity of this Ordinance. (c) Article and section references shall mean references to articles and sections of this Ordinance unless otherwise designated. ARTICLE II SECURITY FOR THE BONDS Section 2.01. Pledee. (a) The Bonds are payable from and secured by a first lien on the Net Revenues of the System on a parity with the Previously Issued Bonds and any Additional Bonds. (b) The City hereby covenants and agrees that all of the Net Revenues of the System with � the exception of those in excess of the amounts required to establish and maintain the funds as 6.I�F:�FINAMGRA325�81002\ORD AUTH o�m�v�:�io:osam� -$- .�.-� hereinafter provided are hereby irrevocably pledged to the payment of the Bonds and all Previously Issued Bonds and Additional Bonds,together with the interest thereon, required by this Ordinance,the ordinances authorizing the Previously Issued Bonds, and any future ordinances authorizing any Additional Bonds. It is hereby ordained that the payment of the Bonds, the Previously Issued Bonds and the Additional Bonds, if any, and the interest thereon, shall constitute a first lien upon the Net Revenues of the System. Section 2.02. Bonds as Special Obligations. The Bonds are special obligations of the City payable solely from the Net Revenues of the System, and the Owners thereof shall never have the right to demand payment thereof out of any other funds raised or to be raised by taxation. ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS Section 3.01. Authorization. The City's bonds to be designated the"City of Grapevine,Texas, Waterworks and Sewer System Revenue Refunding and Improvement Bonds,Series 1997," are hereby authorized to be issued and delivered in accordance with the laws of the State of Texas, including particularly Article 1111, et seq., Texas Civil Statutes Annotated, as amended. The Bonds shall be issued in the aggregate principal amount of$7,370,000, for the purpose of paying costs related to (i) paying costs related to the construction, acquisition and installatidn of additional improvements and extensions to the City's waterworks and sewer system, including engineering and plumbing costs and �..�� to pay the costs incurred in connection with the issuance of bonds, (ii) refunding the Refunded Note, (ii) refunding the Refunded Obligation,and (iii) paying the costs of issuing the Bon s. �«� Section 3.02. Date Denomination. Maturities and Interest. (a) The Bonds shall be dated August 1, 1997,shall be in fully registered form,without coupons,in the denomination of$5,000 or any integral multiple thereof and shall be numbered separately from one upward or such other designation acceptable to the City and the Paying Agent/Registrar,except the Initial Bond,which shall be numbered T-1. (b) 'The Bonds shall mature on September 1 in the years and in the principal amounts set forth in the following schedule: Principal Interest Principal Interest Years Amounts Rates Years Amounts Rates 1999 $220,000 6.65% 2009 $390,000 4.75% 2000 230,000 6.65% 2010 415,000 4.85% 2001 245,000 6.65% 2011 440,000 5.00% 2002 260,000 6.65% 2012 465,000 5.00% 2003 275,000 6.65% 2013 495,000 5.00% 2004 290,000 6.65% 2014 525,000 5.125% 2005 310,000 6.65% 2015 555,000 5.125% �, 2006 330,000 4.65% 2016 585,000 5.125% 2007 345,000 4.65% 2017 625,000 5.125% 2008 370,000 4.70% � 6.1�F:�FINAN�GRA325�81002\ORD_AUTH -6- 07/17ry7:(lO:OSam) ,�ilA.� (c) Interest shall accrue and be paid on each Bond respectively until the principal of such Bond shall have been paid or provision for such payment shall have been made, from the later of the Bond Date or the most recent Interest Payment Date to which interest has been paid or provided for � at the rate per annum for each respective maturity specified in the schedule contained in subsection (b) above. Such interest shall be payable semiannually on March 1 and September 1 of each year, commencing March 1, 1998, computed on the basis of a 360-day year of twelve 30-day months. Section 3.03. Medium, Method and Place of Payment (a) The principal of, redemption premium, if any, and interest on the Bonds shall be paid in lawful money of the United States of America. (b) Interest on the Bonds shall be payable to the Owners as shown in the Register on the Record Date. In the event that interest on the Bonds is not paid on a scheduled Interest Payment Date and remains unpaid for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") shall be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the special payment date of the past due interest(which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of each Owner of a Bond appearing on the Register at the close of business on the last business day next preceding the date of mailing of such notice. (c) Interest shall be paid by check, dated as of the Interest Payment Date, and mailed on or before such Interest Payment Date,by first class United States mail,postage prepaid, by the Paying '� � Agent/Registrar to each Owner at the address of each Owner as such appears in the Register,or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the person to � whom interest is to be paid; provided,however,that such person shall bear all risk and e�cpenses of such customary banking arrangement. (d) The principal of each Bond shall be paid to the Owner thereof on the due date,whether at the maturity date or the date of prior redemption thereof, upon presentation and surrender of such Bond at the Designated Payment/Transfer Office. (e) If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, legal holiday or day on which banking institutions in the city where the Designated Payment/Transfer Office is located are required or authorized by law or executive order to close, then the date for such payment shall be the ne�ct succeeding day which is not a Saturday, Sunday, legal holiday or day on which banking institutions are required or authorized to close, and payment on such date shall for all purposes be deemed to have been made on the due date thereof as specified in this Section. (� Subject to any applicable escheat,unclaimed properiy or similar law, including without limitation Title 6, Texas Property Code, Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment or redemption date shall be deposited into the Interest and Sinking Fund and applied to the next payment on the Bonds thereafter coming due; �, to the extent any such moneys remain after the retirement of all outstanding Bonds, such moneys may be used by the City for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar, nor any other person shall be liable or responsible to any Owners of such Bonds for any further � 6.1�F:�FINAN�GRA325�SI002\ORD AU7N 07l17N7:(10:08am) "7' ;,„ .w payment of such unclaimed moneys or on account of any such Bonds,subject to any applicable escheat, unclaimed property or similar law, including without limitation Title 6,Texas Property Code. � Section 3.04. Execution and Re�istration of Bonds. (a) The Bonds shall be executed on behalf of the City by the Mayor and City Secretary, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Bonds ceases to be such officer before the authentication of such Bonds or before the delivery thereof, such facsimile signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. (c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on all of the Bonds. In lieu oP the executed Certificate of Paying Agent/Registrar described above, the Initial Bond delivered on the Closing Date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided herein, manually "�`"' executed by the Comptroller of Public Accounts of the State of Texas, or by his duly authorized agent, which certificate shall be evidence that the Initial Bond has been duly approved by the Attorney +�.�. General of the State of Texas and that it is a valid and binding obligation of the City, and has been registered by the Comptroller of Public Accounts of the State of Texas. (d) On the Closing Date, one Initial Bond representing the entire principal amount of all Bonds,payable in stated installments to the Purchaser,or its designee, executed by the Mayor and the City Secretary by their manual or facsimile signature,approved by the Attorney General,and registered and manually signed by the Comptroller of Public Accounts,will be delivered to the Purchaser or its designee. Upon payment for the Initial Bond, the Paying Agent/Registrar shall cancel the Initial Bond and deliver registered definitive Bonds, in accordance with Section 3.10 hereof. To the extent the Paying Agent/Registrar is eligible to participate in DTC's Fast System, as evidenced by agreement between the Paying Agent/Registrar and DTC, the Paying Agent/Registrar shall hold the definitive Bonds in safekeeping for DTC. Section 3.05. Ownershiv. (a) The City,the Paying Agent/Registrar and any other person may treat the person in whose name any Bond is registered as the absolute Owner of such Bond for the purpose of making and receiving payment of the principal thereof and redemption premium, if any, thereon, for the further purpose of making and receiving payment of the interest thereon, and for all other purposes, whether or not such Bond is overdue, and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. � A (b) All payments made to the Owner of a Bond shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the extent of the � sums paid. 6.I�F:�FINAMGRA325�81002\ORD AUTH 07/17N7:(10:08am) -8- � Section 3.06. Registration. Transfer and ExchanQe. (a) So long as any Bond remains outstanding, the City shall cause the Paying Agent/Registrar to keep at the Designated PaymentfI'ransfer Office a register in which,subject to such reasonable regulations as it may prescribe, ,r� the Paying Agent/Registrar shall provide for the registration and transfer of Bonds in accordance with this Ordinance. (b) The ownership of a Bond may be transferred only upon the presentation and surrender of the I3ond at the Designated Payment/Transfer Office with such indorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Bond shall be effective until entered in the Register. (c) The Bonds shall be exchangeable upon the presentation and surrender thereof at the principal corporate office of the Paying Agent/Registrar for a Bond or Bonds of the same maturity and interest rate and in any denomination or denominations of any integral multiple of$5,000 and in an aggregate principal amount equal to the unpaid principal amount of the Bonds presented for exchange. The Paying Agent/Registrar is hereby authorized to authenticate and deliver Bonds exchanged for other Bonds in accordance with this Section. (d) Each exchange Bond delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same e�ent as the Bond or Bonds in lieu of which such exchange Bond is delivered. �:_� (e) No service charge shall be made to the Owner for the initial registration and any subsequent transfer or exchange for a different denomination of any of the Bonds. ,The Paying '"�`�" Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer or exchange of a Bond. (� Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any Bond called for redemption,in whole or in part,where such redemption is scheduled to occur within 45 calendar days after the transfer or exchange date; provided, however,such limitation of transfer shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Bond. Section 3.07. Cancellation. All Bonds paid or redeemed before scheduled maturity in accordance with this Ordinance and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance with this Ordinance shall be canceled and destroyed upon the making of proper records regarding such payment, redemption, exchange or replacement. The Paying Agent/Registrar shall then return such cancelled Bonds to the City or may, in accordance with law,destroy such cancelled Bonds and periodically furnish the City with certificates of destruction of such Bonds. Section 3.08. Temporary Bonds. (a) Following the delivery and registration of the Initial �+ Bond and pending the preparation of definitive Bonds,the proper officers of the City may execute and, upon the City's request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Bonds that are printed, lithographed, typewritten,mimeographed or otherwise produced, �. in any denomination, substantially of the tenor of the definitive Bonds in lieu of which they are 6.I�F:�FiNAMGRA125�81002\ORD AUTN 07/I7N7:(IO:OSam) -9 � � delivered,without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers of the City executing such temporary Bonds may determine, as evidenced by their signing of such temporary Bonds. .�a�, (b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the benefit and security of this Ordinance. (c) The City,without unreasonable delay,shall prepare, execute and deliver to the Paying Agent/Registrar, the Bonds in definitive form;thereupon, upon the presentation and surrender of the Bond or Bonds in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall cancel the Bonds in temporary form and authenticate and deliver in exchange therefor a Bond or Bonds of the same maturity and series, in definitive form, in the authorized denomination, and in the same aggregate principal amount,as the Bond or Bonds in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. Section 3.09. Replacement Bonds. (a) Upon the presentation and surrender to the Paying Agent/ Registrar of a mutilated Bond, the Paying Agent/Registrar shall authenticate and de(iver in exchange therefor a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the Paying "� �� Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authenticate and deliver �� a replacement Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner first complies with the following requirements: (i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction or theft of such Bond; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar to save it and the City harmless; (iii) pays all expenses and charges in connection therewith,including,but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other governmental charge that is aufhorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the City and the Paying Agent/Registrar. (c) After the delivery of such replacement Bond, if a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Bond from the �, person to whom it was delivered or any person taking therefrom,except a bona fide purchaser,and shall be entitled to recover upon the security or indemnity provided therefor to the e�ent of any loss, damage,cost or expense incurred by the City or the Paying Agent/Registrar in connection therewith. � 6.1�F:�FINAMGRA325�81002\ORD_AUTH -1 O- 07/17N7:(10:08am) � .. (d) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is about to become due and payable,the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Bond, may pay such Bond if it has become due and payable, or may � pay such Bond when it becomes due and payable. (e) Each replacement Bond delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. Section 3.10. Book-En�On1�System. (a) The definitive Bonds shall be initially issued in the form of a separate single fully registered Bond for each of the maturities thereof with the ownership of each such Bond registered in the name of Cede& Co., as nominee of DTC,and except as provided in Section 3.11 hereof, all of the outstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC. (b) With respect to Bonds registered in the name of Cede& Co., as nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC,Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person,other than a Bondholder, as shown on the Register, of any notice with "�`�� respect to the Bonds,including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than a Bondholder,as shown in the Register of any amount with respect to .�,. principal of, premium, if any, or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute owner of such Bond for the purpose of payment of principal of, premium, if any, and interest on the Bonds, for the purpose of all matters with respect to such Bond,for the purpose of registering transfer with respect to such Bond,and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium,if any, and interest on the Bonds only to or upon the order of the respective Owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of,premium,if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Register,shall receive a Bond certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede&Co.,and subject to the provisions in this Ordinance with respect to interest checks or drafts being mailed to the registered Owner at the close of business on the Record Date,the word"Cede& Co." in this Ordinance shall refer to such new nominee of DTC. (c) The Representation Letter previously executed and delivered by the City,and applicable ,,,�,,, to the City's obligations delivered in book-entry-only form to DTC as securities depository for said obligations, is hereby ratified and approved for the Bonds. � 6.1�F:�F!NAMC,RA3 Z5�81002\O R D_AUTH 07I17N7:(lO:OSam) -11' ' e•a-� Section 3.11. Successor Securities Depository• Transfer Outside Book-Entry Onlv Svstem. In the event that the City or the Paying Agent/ Registrar determines that DTC is incapable of discharging its responsibilities described herein and in the Representation Letter, and that it is in the � best interest of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, or in the event DTC discontinues the services described herein,the Issuer or the Paying Agent/Registrar shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and E�change Act of 1934, as amended, notify DTC and DTC Participants of the appointment of stich succcssor securities depository and transfer one or more separate Bonds to stich successor securities depository or(ii)notify DTC and DTC Participants of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC accounts, as identified by DTC. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede&Co., as nominee of DTC,but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Bonds shall designate,in accordance with the provisions of this Ordinance. Section 3.12. Payments to Cede&Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium,if any, and interest on such Bonds, and all notices with respect to such Bonds, shall be made and given, respectively, in the manner provided in the representation letter of the City to DTC. ARTICLE IV �x� REDEMPTION OF BONDS BEFORE MATURITY �' Section 4.01. Limitation on Redemption. The Bonds shall be subject to redemption before scheduled maturity only as provided in this Article IV. Section 4.02. Optional Redemption. (a) The City reserves the option to redeem Bonds maturing on and after September l, 2008, in whole or in part in principal amounts of$5,000 or any integral multiple thereof before their respective scheduled maturity dates,on September l,2007, or on any date thereafter, such redemption date or dates to be fixed by the City, at a price equal to the principal amount of the Bonds so called for redemption plus accrued interest to the date fixed for redemption. (b) The City,at least 45 days before the redemption date, unless a shorter period shall be satisfactory to the Paying Agent/Registrar,shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Bonds to be redeemed. Section 4.03. Partial Redemption. (a) If less than all of the Bonds are to be redeemed pursuant to Section 4.02, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot the Bonds,or portions thereof, within such maturity or maturities and in such principal amounts for redemption; provided,however, so long as the Bonds are in book-entry-only form and held by DTC selection of Bonds to be redeemed ,� shall be in accordance with DTC Operational Arrangements as referenced in the Representation Letter. � 6.I�F:�FINAMGRA325\81002\ORD AUTH -12- 07/17N7:(10:08am) (b) A portion of a single Bond of a denomination greater than $5,000 may be redeemed, "'"�`� but only in a principal amount equal to$5,000 or any integral multiple thereof. If such a Bond is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000 portion of a Bond as though it were a single bond for purposes of selection for redemption. �.,� (c) Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate and deliver an exchange Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered, such exchange being without charge, notwithstanding any provision of Section 3.06 to the contrary. (d) The Paying Agent/Registrar shall promptly notify the City in writing of the principal amount to be redeemed of any Bond as to which only a portion thereof is to be redeemed. ' Section 4.04. Notice of Redemption to Owners. (a) The Paying Agent/Registrar shall give notice of any redemption of Bonds by sending notice by first class United States mail, postage prepaid, not less than 30 days before the date fixed for redemption,to the Owner of each Bond (or part thereo� to be redeemed, at the address shown in the Register. (b) The notice shall state the redemption date, the redemption price, the place at which the Bonds are to be surrendered for payment, and, if less than all the Bonds outstanding are to be redeemed, an identification of the Bonds or portions thereof to be redeemed. (c) Any notice given as provided in this Section shall be conclusively presumed to have been �, duly given,whether or not the Owner receives such notice. � Section 4.05. Payment Upon Redemption. (a) Before or on each redemption date, the City shall deposit with the Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Agent/Registrar shall make provision for the payment of the Bonds to be redeemed on such date by setting aside and holding in trust an amount from the Interest and Sinking Fund or otherwise received by the Paying Agent/Registrar from the City and shall use such funds solely for the purpose of paying the principal of, redemption premium, if any, and accrued interest on the Bonds being redeemed. (b) Upon presentation and surrender of any Bond called for redemption at the Designated Payment/Transfer Office on or after the date fixed for redemption, the Paying Agent/Registrar shall pay the principal of, redemption premium, if any, and accrued interest on such Bond to the date of redemption from the money set aside for such purpose. Section 4.06. Effect of Redem�tion. (a) Notice of redemption having been given as provided in Section 4.04 of this Ordinance, the Bonds or portions thereof called for redemption shall become due and payable on the date fixed for redemption and, unless the City defaults in the payment of the principal thereof, redemption premium, if any, or accrued interest thereon, such Bonds or portions thereof shall cease to bear interest from and after the date fixed for redemption,whether or not such Bonds are presented and surrendered for payment on such date. `""`"" (b) If the City shall fail to make provision for payment of all sums due on a redemption date, then any Bond or portion thereof shall continue to bear interest at the rate stated on the Bond � until due provision is made for the payment of same. 6.I�F:�FINAN�GRA325�81002\ORD_AUTf1 -��' 07lI7N7:(10:08am) .�W.�, ARTICLE V PAYING AGENT/REGISTRAR '�'"' Section 5.01. Apoointment of Initial Pa�ne Agent/Registrar. Bank One,Texas, N.A., Fort Worth, Texas, is hereby appointed as the initial Paying Agent/Registrar for the Bonds. Section 5.02. Oualifications. Each Paying Agent/Registrar shall be a commercial bank,a trust company organized under the laws of the State of Texas, or any other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Bonds. Section 5.03. Maintaining Pavin� A�ent/Re�istrar. (a) At all times while any Bonds are outstanding,the City will maintain a Paying Agent/Registrar that is qualified under Section 5.02 of this Ordinance. The Mayor is hereby authorized and directed to execute an agreement with the Paying Agent/Registrar specifying the duties and responsibilities of the City and the Paying Agent/Registrar. The signature of the Mayor shall be attested by the City Secretary. (b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement. Section 5.04. Termination. The City,upon not less than 60 days notice, reserves the right to terminate the appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be terminated written notice of such termination, provided, that such termination shall not be �„ effective until a successor Paying Agent/Registrar has been appointed and has accepted the duties of Paying Agent/Registrar for the Bonds. � Section 5.05. Notice of ChanEe. Promptly upon each change in the entiry serving as Paying Agent/ Registrar, the City will cause notice of the change to be sent to each Owner and the Bond Insurer by first class United States mail, postage prepaid, at the address in the Register, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. Section 5.06. Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar, and executing the Paying Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed thereby. Section 5.07. Delivere of Records to Successor. If a Paying Agent/Registrar is replaced,such Paying Agent/Registrar,promptly upon the appointment of the successor,will deliver the Register(or a copy thereo� and all other pertinent books and records relating to the Bonds to the successor Paying Agent/Registrar. ARTICLE VI FORM OF THE BONDS � ` Section 6.01. FQrm Generally. (a) The Bonds,including the Registration Certificate of the � Comptroller of Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar and 6.I�F:�FINAMGRA325�81002\ORD AUTH o�m�vr.��o:osam� - -14- � the Assignment form to appear on each of the Bonds, (i) shall be substantially in the form set forth in this Article with such appropriate insertions, omissions, substitutions and other variations as are permitted or required by this Ordinance, and (ii) may have such letters, numbers or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities �'`�' Identification Procedures of the American Bankers Association) and such legends and endorsements (including any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Bonds,as evidenced by their execution thereof. (b) Any portion of the text of any Bonds may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Bonds. (c) The definitive Bonds,if any,shall be typewritten,printed,lithographed or engraved,and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Bonds, as evidenced by their execution thereof. (d) The Initial Bond submitted to the Attorney General of the State of Texas may be typewritten and photocopied or otherwise reproduced. Section 6.02. Form of the Bonds. The form of the Bonds, including the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Bonds shall be substantially as follows: � 6.1�f:�F7NAMGRA32S81002\ORD_AUTH -1 S- 07/17N7:(10:08am) (a) Form of Bonds. REGISTERED REGISTERED �- » No. $ United States of America State of Texas CITY OF GRAPEVINE,TEXAS WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING AND IMPROVEMENT BOND SERIES 1997 INTEREST RATE: MATURITY DATE: BOND DATE: CUSIP NO. August 1, 1997 The City of Grapevine (the "City"), in the Counties of Tarrant, Dallas and Denton, State of Texas, for value received, hereby promises to pay to or registered assigns, but solely from the sources and in the manner hereinafter provided, on the �°� . Maturity Date specified above, the sum of ��, DOLLARS unless this Bond shall have been sooner called for redemption and the payment of the principal hereof shall have been paid or provided for, and to pay interest on such principal amount from the later of the Bond Date specified above or the most recent interest payment date to which interest has been paid or provided for until such principal amount shall have been paid or provision for such payment shall have been made,at the per annum rate of interest specified above,computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on March 1 and September 1 of each year, commencing March 1, 1998. The principal of this Bond shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Bond at the corporate office in Fort Worth, Texas, of Bank One, Texas, N.A., as Paying Agent/Registrar (the "Designated Payment/Transfer Office"), or, with respect to a successor paying agent/registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Bond is payable by check dated as of the interest payment date,mailed on or before such interest payment date,by first class United States mail, postage prepaid, by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar,or by such other customary banking arrangement acceptable to the Paying Agent/Registrar and the person to whom interest is to be paid; provided, however,that such person shall bear all risk and expenses of such customary banking arrangement. For '�"' the purpose of the payment of interest on this Bond,the registered owner shall be the person in whose name this Bond is registered at the close of business on the"Record Date,"which shall be the fifteenth day of the month next preceding such interest payment date. However,in the event that interest is not � 6.I�F:�FINAN�GRA325\81002\ORD_AUTH -16' 07/17N7:(�O:OSam) „,�.,:� paid on a scheduled payment date and remains unpaid for 30 days thereafter, a new record date for such interest payment (a"Special Record Date”)will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the � Special Record Date and of the special payment date of the past due interest (which date shall be 15 days after the Special Record Date)shall be sent at least five business days prior to the Special Record Date by United States mail, first dass, postage prepaid, to the address of each registered owner of a Bond appearing on the books of the Paying Agent/Registrar at the close of business on the last business day preceding the date of mailing of such notice. If the date for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, legal holiday or day on which banking institutions in the city where the Designated Payment/Transfer Office is located are required or authorized by law or executive order to close, the date for such payment shall be the ne�succeeding day which is not a Saturday, Sunday, legal holiday or day on which banking institutions are required or authorized to close and payment on such date shall for all purposes be deemed to have been made on the original date payment was due. This Bond is one of the series of fully registered bonds specified in its title issued in the aggregate principal amount of$7,370,000 (herein referred to as the "Bonds") issued pursuant to an ordinance adopted by the governing body of the City(the "Ordinance"), for the purpose of(i) paying costs related to the construction,acquisition and installation of additional improvements and extensions to the City's waterworks and sewer system, including engineering'and plumbing costs and to pay the costs incurred in connection with the issuance of bonds,(ii) refunding the Refunded Note (ii) refunding a certain outstanding obligation of the City, and (iii) for paying the costs of issuing the Bonds. � The Bonds, together with certain outstanding revenue bonds of the City (the "Outstanding � Parity Bonds"), constitute special obligations of the City and are payable solely from and equally secured by a first lien on and pledge of the Net Revenues (as defined in the Ordinance) of the City's combined waterworks and sewer system (the "System"). The City expressly reserves the right to issue additional revenue obligations in all things on a parity with the Bonds and the Outstanding Parity Bonds, payable solely from and equally secured by a first lien on and pledge of the Net Revenues of the System; provided,however,that any and all such additional obligations may be so issued only in accordance with and subject to the covenants,conditions, limitations and restrictions relating thereto which are set out and contained in the Ordinance to which reference is hereby made for more complete and full particulars. The owner hereof shall never have the right to demand payment of this Bond out of funds raised or to be raised by taxation. The City has reserved the option to redeem the Bonds maturing on or after September l,2008, in whole or in part,before their respective scheduled maturity dates, on September l, 2007, or on any date thereafter, at a price equal to the principal amount of the Bonds so called for redemption plus accrued interest to the date fixed for redemption. If less than all of the Bonds are to be redeemed, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct ,,,�„ the Paying Agent/Registrar to call by lot the Bonds, or portions thereof, within such maturity and in such principal amounts, for redemption. � 6.1�F:�FINAMGRA32S81002\ORD AUTH _17_ 07/17N7:(10:08am) �, -. Notice of such redemption or redemptions shall be given by first class mail, postage prepaid, not less than 30 days before the date fixed for redemption,to the registered owner of each of the Bonds to be redeemed in whole or in part. Notice having been so given, the Bonds or portions thereof designated for redemption shall become due and payable on the redemption date specified in such notice; and, from and after such date, notwithstanding that any of the Bonds or portions thereof so called for redemption shall not have been surrendered for payment,interest on such Bonds or portions thereof shall cease to accrue. As provided in the Ordinance, and subject to certain limitations therein set forth, this Bond is transferable upon surrender of this Bond for transfer at the Designated Payment/Transfer Office with such indorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar; thereupon, one or more new fully registered Bonds of the same stated maturity, of authorized denominations,bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. The City,the Paying Agent/Registrar and any other person may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except interest shall be paid to the person in whose name this Bond is registered on the"Record Date" or "Special Record Date," as applicable) and for all other purposes, whether or not this Bond be overdue, and neither the City, the Paying Agent/Registrar nor any other person shall be affected by notice to the contrary. � Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any Bond called for redemption where such redemption is scheduled to occur within 45 calendar days of the transfer or exchange date; provided, however, such limitation shall not be applicable to an "�' exchange by the registered owner of the uncalled principal balance of a Bond. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond and the series of which it is a part is duly authorized by law; that all acts, conditions and things required to be done precedent to and in the issuance of the Bonds to render the same lawful and valid have been properly done and have happened in regular and due time,form and manner as required by law; that the Bonds do not exceed any constitutional or statutory limitation; and that provision has been made for the payment of the principal of and interest on the Bonds by irrevocably pledging the Net Revenues of the System, as hereinabove recited. IN WITNESS WHEREOF the City has caused this Bond to be duly executed under its official seal. Mayor, City of Grapevine,Texas City Secretary, City of Grapevine,Texas � [SEAL] � 6.I�F:�FINAMGRA325�81002\ORD_AUTH -1 H- 07/I7N7:(10:08am) �. „ (b) Form of Comptroller's Registration Certificate. The following Comptroller's Registration Certificate may be deleted from the definitive Bonds �..� if such Certificate on the Initial Bond is fully executed. OFFICE OF THE COMPTROLLER§ OF PUBLIC ACCOUNTS § REGISTER NO. OF THE STATE OF TEXAS § I hereby certify that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this Bond has been examined by him as required by law, that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding special obligation of the City of Grapevine,Texas, and that this Bond has this day been registered by me. Witness my hand and seal of office at Austin,Texas, Comptroller of Public Accounts of the State of Texas � [SEAL] � (c) Form of Certificate of Pa,�ng Agent/Re is�; trar. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Bond if the Comptroller's Registration Certificate appears thereon. CERTIFICATE OF PAYING/AGENT/REGISTRAR The records of the Paying Agent/Registrar show that the Initial Bond of this series of Bonds was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas, and that this is one of the Bonds referred to in the within-mentioned Ordinance. BANK ONE,TEXAS, N.A., Fort Worth,Texas Dated: By: Authorized Signatory � 6.I�F:�F7NAMGRA325�81002\O R D_AUTH 07/I7N7:((0:08am) -19- (d) Form of Assignment. ASSIGNMENT �``�� FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (print or typewrite name, address and zip code of transferee): (Social Security or other identifying number: ) the within Bond and all rights hereunder and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration hereof,with full power of substitution in the premises. Dated: NOTICE: The signature on this Assignment Signature Guaranteed By: must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular and must be guaranteed in a manner acceptable to the Paying Agent/Registrar. Authorized Signatory *'�`� (e) The Initial Bond shall be in the form set forth in paragraphs (a) through (d) of this Section, except for the following alterations: � (i) immediately under the name of the Bond, the headings "INTEREST RATE" and "MATURITY DATE"shall both be completed with the words"As shown below"; (ii) in the first paragraph of the Bond, the words"on the Maturity Date specified above"shall be deleted and the following will be inserted:"on September 1 in each of the years, in principal installments, and bearing interest at the per annum rates in accordance with the following schedule: Years Princi,�al Installments Interest Rates (Information to be inseited from schedule in Section 3.02 of this Ordinance)" (iii) the Initial Bond shall be numbered T-1. Section 6.03. CUSIP Registration. The City may secure identification numbers through the CUSIP Service Bureau Division of Standard & Poor's Corporation, New York, New York, and may authorize the printing of such numbers on the face of the Bonds. It is expressly provided,however,that the presence or absence of CUSIP numbers on the Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor bond counsel to the City are to be held responsible for CUSIP numbers incorrectly printed on the Bonds. � 6.I�F:�FiNAMGRA325�81002\ORD_AUTH _20_ 07/17N7:(10:08am) Section 6.04. Legal Opinion. The approving legal opinion of Vinson & Elkins L.L.P., Bond � Counsel, may be printed on the reverse side of each Bond over the certification of the City Secretary of the City,which may be executed in facsimile. Section 6.05. Statement of Insurance. A statement relating to a municipal bond insurance policy, if any, to be issued for the Bonds may be printed on the reverse side of each Bond. ARTICLE VII SALE AND DELIVERY OF BONDS;DEPOSIT OF PROCEEDS Section 7.01. Sale of Bonds.Official Statement. (a) The Bonds are hereby officially sold and awarded to Legg Mason Wood Walker, Inc. (the"Purchaser")at a price equal to the principal amount thereof plus accrued interest. It is hereby officially found, determined and declared that the bid of said Purchaser is the best and lowest bid submitted for the Bonds. The Bonds shall initially be registered in the name of such Purchaser, or its designee. (b) The form and substance of the Official Statement for the Bonds and any addenda, supplement or amendment thereto (the "Official Statement") presented to and considered at this meeting, is hereby in all respects approved and adopted, and the Preliminary Official Statement is hereby confirmed as deemed final as of its date (except for the omission of pricing and related information)within the meaning and for the purposes of paragraph (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended, by the City Council. The City agrees to deliver ^"�" appropriate numbers of copies thereof to the Purchaser of the Bonds. The Official Statement as thus approved and delivered,with such appropriate variations as shall be approved by the Mayor and the �,,, Purchaser of the Bonds,may be used by the Purchaser in the public offering and sale thereof. The use and distribution of the Official Statement in the public offering of the Bonds by the Purchaser is hereby ratified, approved and confirmed. The City Secretary is hereby authorized and directed to include and maintain a copy of the Official Statement and any addenda, supplement or amendment thereto thus approved among the permanent records of this meeting. The use and distribution of the Preliminary Official Statement for the Bonds and the preliminary public offering of the Bonds by the Purchasers is hereby ratified, approved and confirmed. (c) All officers of the City are authorized to execute such documents, certificates and receipts, to make such elections pertaining to the tax-exempt status of the Bonds, and to take such actions as they may deem appropriate in order to consummate the delivery of the Bonds in accordance with the Purchase Contract. (d) The obligation of the Purchaser to accept delivery of the Bonds is subject to the Purchaser being furnished with the final, approving opinion of Vinson & Elkins L.L.P., Bond Counsel for the City, which opinion shall be dated and delivered the Closing Date. The Mayor is hereby authorized and directed to execute the engagement letter with Vinson & Elkins L.L.P., setting forth such firm's duties as Bond Counsel for the City in connection with the issuance of the Bonds, and such engagement letter and the terms thereof in the form presented at this meeting is hereby approved and accepted. Section 7.02. Control and Deliverv of Bonds. (a) The Mayor of the City is hereby authorized � to have control of the Initial Bond and all necessary records and proceedings pertaining thereto pending 6.I�F:�FINAMGRA325�81002\ORD_AUTH —21� 07/17/97:(10:08am) � investigation,examination and approval of the Attorney General of the State of Texas, registration by the Comptroller of Public Accounts of the State of Texas, and registration with, and initial exchange or transfer by, the Paying Agent/Registrar. ��� (b) After registration by the Comptroller of Public Accounts, delivery of the Bonds shall be made to the Purchaser under and subject to the general supervision and direction of the Mayor against receipt by the City of all amounts due to the City under the terms of sale. (c) In the event the Mayor or City Secretary is absent or otherwise unable to execute any document or take any action authorized herein, the Mayor Pro Tem and the Assistant City Secretary, respectively,shall be authorized to execute such documents and take such actions, and the performance of such duties by the Mayor Pro Tem and the Assistant City Secretary shall for the purposes of this Ordinance have the same force and effect as if such duties were performed by the Mayor and City Secretary, respectively. Section 7.03. Deposit of Proceeds. (a) All amounts received on the Closing Date as accrued interest on the Bonds from the Bond Date to the Closing Date and premium,if any,shall be deposited to the Interest and Sinking Fund. (b) The 6,775,000 shall be deposited to a special construction fund of the City as directed by an authorized officer of the City, such moneys, including the investment earnings thereof, to be dedicated and used solely for extensions and improvements to the System and paying the costs of � ,:. issuing the Bonds. (c) The remainder of the proceeds of the Bonds shall be paid to the Government to pay for �,� the Refunded Obligations and the accrued but unpaid interest thereon. (d) All amounts remaining in the construction fund after the completion of the project for which the Bonds were issued,including investment earnings of the construction fund,shall be deposited to the Interest and Sinking Fund, unless applicable law permits or authorizes all or any part of such funds to be used for other purposes. ARTICLE VIII FUNDS AND ACCOUNTS Section 8.01. S�ecial Funds. The City covenants and agrees that all revenues derived from the operation of the System shall be kept separate from other funds of the City. To that end, the establishment of the following special Funds is hereby confirmed and such Funds shall be maintained in an official depository bank of the City so long as any of the Parity Bonds are outstanding and unpaid, to-wit: (a) "City of Grapevine,Texas,Waterworks and Sewer System Revenue Fund,"herein called the "Revenue Fund"; (b) "City of Grapevine,Texas,Waterworks and Sewer System Revenue Bonds Interest and Sinking Fund," herein called the "Interest and Sinking Fund"; and � 6.t�F':�FINAMGRA325\81002\OR D_AUTH —22— 07/17N7:(10:08am) �.�_.� (c) "City of Grapevine, Texas, Waterworks and Sewer System Revenue Bonds Reserve Fund," herein called the "Reserve Fund." ��� Section 8.02. Revenue Fund. All gross revenues of every nature received from the operation and ownership of the System shall be deposited from day to day as collected into the Revenue Fund, and the reasonable, necessary, and proper expenses of operation and maintenance of the System shall be paid from the Revenue Fund. The revenues of the System not actually required to pay said expenses shall be deposited from the Revenue Fund into the other funds described in this Ordinance, in the manner and amounts hereinafter provided, and each of such funds shall have priority as to such deposits in the order in which they are treated in the following sections. Section 8.03. Interest and Sinking Fund. There shall be deposited into the Interest and Sinking Fund the following: (a) such amounts, in eyual monthly installments, commencing December l, 1997, and on the first day of each month thereafter, as will be sufficient to pay the interest scheduled to come due on the Bonds and the Previously Issued Bonds on the next Interest Payment Date, less any amounts already on deposit therein for such purpose derived from the proceeds of the Bonds or from any other lawfully available source; and (b) such amounts, in equal monthly installments, commencing December 1, 1997, and on the first day of each month thereafter, as will be sufficient to pay the next maturing principal of the Bonds. The Interest and Sinking Fund shall be used to pay the principal of and interest on the Parity � Bonds as such principal matures and such interest becomes due. Section 8.04. Reserve Fund. So long as the funds on deposit in the Reserve Fund created for the benefit of the Bonds, the Previously Issued Bonds, and all Additional Bonds are equal to the Reserve Fund Requirement,no deposits need to be made to the credit of the Reserve Fund; but should the Reserve Fund at any time contain less than the Reserve Fund Requirement, then, subject and subordinate to making the required deposits to the credit of the Interest and Sinking Fund, the City shall transfer from the Net Revenues in the Revenue Fund and deposit to the credit of the Reserve Fund, on the first day of each month, a sum equal to not less than 1/60th of the total amount then required to be maintained therein until the Reserve Fund is restored to the Reserve Fund Requirement. The money on deposit in the Reserve Fund may be used to pay the principal of and interest on the Bonds at any time there are not sufficient funds on deposit in the Interest and Sinking Fund for such purpose. The City may, at its option,withdraw all surplus in the Reserve Fund over the Reserve Fund Requirement and deposit the same in the Revenue Fund. In accordance with the procedures specified in the preceding paragraph,the City hereby directs that the deposits, if any, being made to the Reserve Fund be increased to accumulate in the Reserve Fund within 60 months from the date of the Bonds an amount equal to the Reserve Fund Requirement. Section 8.05. Deficiencies in Funds. If in any month the City shall fail to pay into any Fund described in this Ordinance the full amounts required, amounts equivalent to such deficiencies shall be set apart and paid into said fund from the first available and unallocated Net Revenues of the System � for the following month or months, and such payments shall be in addition to the amounts otherwise 6.I�F:�FINAMGRA325\B 1002\ORD_AUTH -23- 07/17ry7:(I0:08am) �„<.a, required hereby to be paid into said fund during such month or months. To the extent necessary, the City shall increase the rates and charges for services of the System to make up for any such deficiencies. �,,,,� Section 8.06. Excess Revenues. The Net Revenues of the System,in excess of those necessary to establish and maintain the funds as required by this Ordinance, or as hereafter may be required in connection with the issuance of Additional Bonds, may be used for any lawful purpose. Section 8.07. Security of Funds. All moneys on deposit in the funds referred to in this Article shall be secured in the manner and to the fullest extent required by the laws of the State of Texas for the security of public funds, and moneys on deposit in such funds shall be used only for the purposes permitted by this Ordinance. Section 8.08. Investment of Certain Funds. Money in any fiind established pursuant to this Ordinance may,at the option of the City,be placed in time deposits or certificates of deposit secured by obligations of the type hereinafter described,or may be invested,including investments held in book- entry form, in direct obligations of the United States of America,obligations guaranteed or insured by the United States of America,which,in the opinion of the Attorney General of the United States, are secured by its full faith and credit or represent its general obligations,or invested in indirect obligations of the United States of America,including,but not limited to,evidences of indebtedness issued, insured or guaranteed by such governmental agencies as the Federal Land Banks, Federal Intermediate Credit Banks, Banks for Cooperatives, Federal Home Loan Banks, 'Government National Mortgage Association, United States Postal Service, Farmers Home Administration, Federal Home Loan Mortgage Association,Small Business Administration, Federal Housing Association, or Participation '' Certificates in the Federal Assets Financing Trust; provided that all such deposits and investments are authorized under applicable law and shall be made in such manner as will permit money required to �,,: . be expended from a fund to be available at the proper time or times for the purposes thereof. Such investments shall be valued each year in terms of current market value as of the last day of the City's fiscal year. All interest and earnings derived from deposits and investments in the Interest and Sinking Fund immediately shall be credited to,and any losses shall be debited to,the Interest and Sinking Fund. All interest and earnings derived from deposits and investments in the Reserve Fund immediately shall be credited to and deposited in the Revenue Fund as the same are received. All such investments shall be sold promptly,when necessary, to prevent any default in connection with the Parity Bonds. ARTICLE IX ADDITIONAL PARITY BONDS Section 9.01. Additional Parity Bonds. The City reserves the right to issue additional parity revenue bonds, to be known as Additional Bonds,which when issued and delivered, shall be payable from and secured by a pledge of the Net Revenues of the System,in the same manner and to the same extent as the Bonds and the Previously Issued Bonds, and the Bonds, the Previously Issued Bonds and the Additional Bonds shall be in all respects on a parity. The Additional Bonds may be issued in one or more installments or series; provided, however, that no installment or series of Additional Bonds shall be issued unless: � (a) A certificate is executed by the Mayor and City Secretary to the effect that no default exists in connection with any of the covenants or requirements of the ordinance or ordinances � authorizing the issuance of all then Outstanding Bonds; 6.1�F:�FINAMGRA325�81002\ORD AUTH -24- 07/17N7:(10:08am) (b) A certificate is executed by the Mayor and City Secretary to the effect that the Interest � and Sinking Fund and the Reserve Fund each contains the amount then required to be on deposit therein; �F� (c) A certificate is executed by a Certified Public Accountant to the effect that, in his opinion, the Net Earnings of the System either for the last complete fiscal year of the City, or for any twelve consecutive calendar month period ending not more than ninety days prior to the passage of the ordinance authorizing the issuance of such Additional Bonds, were at least 1-1/4 times the average annual principal and interest requirements for all Parity Bonds to be outstanding after the issuance of the Additional Bonds; and the term "Net Earnings," as used in this subparagraph (c), shall mean the Net Revenues of the System, but excluding and not deducting any charges or disbursements which under standard accounting practice shou(d be charged to capital expenditures; (d) The Additional Bonds are scheduled to mature only on March 1 or September 1, and the interest thereon is scheduled to be paid on March 1 and September l; and (e) The ordinance authorizing the issuance of such installment or series of Additional Bonds provides that the aggregate amount to be accumulated in the Reserve Fund shall be increased to an amount equal to the average annual principal and interest requirements of all Bonds to be outstanding after the issuance of said Additional Bonds. Such additional amount shall be so accumulated within sixty months from the date of the Additional Bonds. ARTICLE X � REPRESENTATIONS AND COVENANTS � Section 10.01. Pa�nent of Bonds and Additional Bonds. On or before February 28, 1998, and semiannually on or before the last day of February and August thereafter while any of the Parity Bonds are outstanding, the City shall make available to the paying agent therefor, in funds which will be immediately available on the next succeeding business day, out of the Interest and Sinking Fund and the Reserve Fund,if necessary,money sufficient to pay such interest on and such principal of the Bonds as will accrue or mature or will become due by reason of redemption prior to maturity on each March 1 and September 1, respectively. The Paying Agent/Registrar shall dispose of all paid Parity Bonds pursuant to the Securities Exchange Act of 1934. Section 10.02. Rates. The City covenants and agrees with the holders of the Parity Bonds, as follows: � (a) That it will at all times charge and collect for services rendered by the System rates sufficient to pay all operating,maintenance, replacement and improvement expenses, and any other costs deductible in determining Net Revenues and to pay the interest on and the principal of the Parity Bonds, and to establish and maintain the funds as hereinafter provided; and (b) That,if the System should become legally liable for any other indebtedness,the City will � fix and maintain rates and collect charges for the services of the System sufficient to discharge such indebtedness. � 6.I�F:�FINAN�GRA325�81002\ORD_AUTH -25- 07/17N7:(t0:O8am) Section 10.03. Maintenance and Operation: Insurance. While any of the Parity Bonds are '�� ` outstanding, the City covenants and agrees to maintain the System in good condition and operate the same in an efficient manner and at reasonable expense and to maintain insurance on the System, for the benefit of the holder or holders of the Parity Bonds,of a kind and in an amount which usually would be carried by private companies engaged in a similar type of business. Nothing in this Ordinance shall be construed as requiring the City to expend any funds which are derived from sources other than the System, but nothing herein shall be construed as preventing the City from doing so. Section 10.04. Records:Accounts:Accounting Reoorts. (a) The City shall keep proper books of records and accounts, separate from all other records and accounts of the City, in which complete and correct entries shall be made of all transactions relating to the System, and shall have said books audited once each fiscal year by a Certified Public Accountant. The City agrees to operate the System and keep its books of records and accounts pertaining thereto on the basis of its current fiscal year; provided, however, that the City Council may change such fiscal year by ordinance duly passed, if such change is deemed necessary by the City Council. (b) Within ninety days after the close of each fiscal year hereafter, the City will furnish, without cost, to any holder of any outstanding Parity Bonds who may so request, a signed or certified copy of a report by a Certified Public Accountant,covering the next preceding fiscal year, showing the following information: (i) A detailed statement of all gross revenues of the System and all expenses of operation and maintenance thereof for such fiscal year; (ii) Balance sheet as of the end of such fiscal year; �� (iii) Accountant's comment regarding the manner in which the City has complied with the requirements of this Ordinance and his recommendation, if any, for any changes or improvements in the operation of the System; (iv) List of insurance policies in force at the end of such fiscal year, showing, as to each policy, the risk covered, the amount of the policy, the name of the insurer, and the expiration date; (v) The number of properties connected with the System, and the gross revenues of the System for such fiscal year; (vi) The number of unmetered customers of the System at the end of such fiscal year; (vii) The number of gallons of water through the master meter, the number of gallons of water billed, an estimate of the number of gallons of water used for flushing mains and for fires, and the number of unaccounted gallons of water; and � (viii) The total annual billings of the System, and the average monthly bills per customer. � 6.I�F:�FINAMGRA32S�8I002\ORD_AUIN -26- 07/i7N7:(10:08am) (c) Any holder or holders of any Parity Bonds shall have the right at all reasonable times to inspect the System and all records, accounts and data of the City relating thereto. Section 10.05. Further Covenants. The City hereby further covenants and agrees as follows: � (a) It has the lawful power to pledge the Net Revenues to the payment of the Bonds and has lawfully exercised said power under the Constitution and laws of the State of Texas;that the Bonds, Previously Issued Bonds and Additional Bonds,when issued,shall be ratably secured under such pledge in such manner that one Parity Bond shall have no preference over any other Parity Bond of said issues. (b) That other than for the payment of the Previously Issued Bonds and the Bonds, Net Revenues of the System are not in any manner now pledged to the payment of any debt or obligation of the City or of the System except for any debt or obligation which has a pledge of the Net Revenues subject and subordinate to the pledge of the Net Revenues associated with the Parity Bonds. (c) So long as any Bonds, Previously Issued Bonds or Additional Bonds or any interest thereon are outstanding, the City will not sell or encumber the physical properties of the System or any substantial part thereof; provided,however,this covenant shall not be construed to prohibit the sale of such machinety or other properties or equipment which has become obsolete or otherwise unsuited to the efficient operation of the System. (d) No free service of the System shall be allowed,and should the City or any of its agencies or instrumentalities make use of the services and facilities of the System, payment of the reasonable �"°'� value thereof shall be made by the City out of funds from sources other than the revenues and income of the System. �...� (e) That it will comply with all of the terms and conditions of any and all franchises,permits and authorizations applicable to or necessary with respect to the System, and which have been obtained from any governmental agency; and the City has or will obtain and keep in full force and effect all franchises, permits, authorizations and other requirements applicable to or necessary with respect to the acquisition, construction, equipment,operation and maintenance of the System. (� That it will not grant any franchise or permit the acquisition,construction or operation of any competing facilities which might be used as a substitute for the System's facilities, and, to the extent that it legally may, the City will prohibit any such competing facilities. (g) No impact fees assessed pursuant to Chapter 395, Texas Local Government Code, as amended, shall be used or expended in connection with an improvement or expansion of the System that is not identified in a capital improvements plan adopted in accordance with said Chapter. Section 10.06. Amendments. (a) The City acknowledges that the covenants and obligations of the City herein contained are a material inducement to the purchase of the Bonds. This Ordinance shall constitute a contract with the Owners of any Bond from time to time,shall be binding on the City, and shall not be amended or repealed by the City so long as any Bond remains outstanding, except as � permitted in this Section. (b) 'The City may,without the consent of or notice to any Owners of Bonds, from time to � time and at any time, amend this Ordinance in any manner not detrimental to the interests of the 6.I�F:�FINAMGRA325�8t002\ORD AUTH _27_ 07/17N7:(10:08am) � - Owners of any Bonds,including the curing of any ambiguity,inconsistency,or formal defect or omission herein. (c) In addition, the City may, with the written consent of Owners of Bonds owning a majority in aggregate principal amount of the Bonds then outstanding and affected thereby,amend,add to or rescind any of the provisions of this Ordinance; provided that,without the consent of all Owners of outstanding Bonds, no such amendment, addition or rescission shall (i) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor or the rate of interest thereon, or in any other way modify the terms of payment of the principal of,premium,if any, or interest on the Bonds, (ii) give any preference to any Bond over any other Bond,or(iii) reduce the aggregate principal amount of Bonds required for consent to any such amendment, addition or rescission. Section 10.07. Federal Income Tax Exclusion. (a) General. The City intends that the interest on the Bonds shall be excludable from gross income for federal income tax purposes pursuant to sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended(the"Code"), and the applicable Income T�Regulations(the"Regulations"). The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted, respectively, would cause the interest on the Bonds to be includable in gross income, as defined in section 61 of the Code,for federal income tax purposes. In particular,the City covenants and agrees to comply with each requirement of this Section 10.07;provided,however,that the City shall not be required to comply with any particular requirement of this Section 10.07 if the City has received an opinion of nationally recognized bond counsel ("Counsel's Opinion")that such noncompliance will not adversely affect the "`" ' exclusion from gross income for federal income tax purposes of interest on the Bonds or if the City has received a Counsel's Opinion to the effect that compliance with some other requirement set forth in �. y this Section 10.07 will satisfy the applicable requirements of the Code and the Regulations, in which case compliance with such other requirement specified in such Counsel's Opinion shall constitute compliance with the corresponding requirement specified in this Section 10.07. (b) No Private Use or Payment and No Private Loan Financine. The City shall certify, through an authorized officer, employee or agent that based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered, that the proceeds of the Refunded Note have not been used, and that proceeds of the Refunded Note and the Bonds will not be used,in a manner that would cause the Bonds to be "private activity bonds"within the meaning of section 141 of the Code and the Regulations promulgated thereunder. Moreover, the City covenants and agrees that it will make such use of the proceeds of the Refunded Note and the Bonds including interest or other investment income derived from Bond proceeds,regulate the use of property financed, directly or indirectly,with such proceeds, and take such other and further action as may be required so that the Bonds will not be "private activity bonds"within the meaning of section 141 of the Code and the Regulations promulgated thereunder. (c) No Federal Guarantee. The City covenants and agrees that it has not and will not to take any action, and has not knowingly omitted and will not knowingly omit to take any action within its control, that, if taken or omitted,respectively,would cause the Bonds to be"federally guaranteed" � within the meaning of section 149(b) of the Code and the applicable Regulations thereunder, except as permitted by section 149(b)(3) of the Code and such Regulations. �.+ 6.I�F:�FINAMGRA325�81002\ORD AUli1 _28_ 07/17i97:(lO:OSAm) ,� . (d) No Hed�e Bonds. The City covenants and agrees that it has not and will not to take any action, and has not knowingly omitted and will not knowingly omit to take any action,within its control, that, if taken or omitted, respectively,would cause the Bonds to be"hedge bonds"within the meaning �,,,,�, of section 149(g) of the Code and the applicable Regulations thereunder. (e) No Arbitra�e. The City shall certify, through an authorized officer, employee or agent that based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered,the City will reasonably expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be"arbitrage bonds"within the meaning of section 148(a) of the Code and the applicable Regulations promulgated thereunder. Moreover, the City covenants and agrees that it will make such use of the proceeds of the Bonds including interest or other investment income derived from Bond proceeds, regulate investments of proceeds of the Bonds, and take such other and further action as may be required so that the Bonds will not be"arbitrage bonds"within the meaning of section 148(a) of the Code and the applicable Regulations promulgated thereunder. (� Arbitr�e Rebate. If the City does not qualify for an exception to the requirements of Section 148(f� of the Code relating to the required rebate to the United States, the City will take all necessary steps to comply with the requirement that certain amounts earned by the City on the investment of the "gross proceeds" of the Bonds (within the meaning of section 148(�(6)(B) of the Code),be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Bonds as may be required to calculate the amount earned on the investment of the gross proceeds of the Bonds separately from records of amounts on deposit in the funds and accounts of the City allocable to other bond issue of the City or moneys which do not '� represent gross proceeds of any bonds of the City, (ii) calculate at such times as are required by applicable Regulations, the amount earned from the investment of the gross proceeds of the Bonds �_� which is required to be rebated to the federal government,and (iii) pay, not less often than every fifth anniversary date of the delivery of the Bonds or on such other dates as may be permitted under applicable Regulations,all amounts required to be rebated to the federal government. Further,the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at arm's length and had the yield on the issue not been relevant to either party. (g) Information Re�ortinQ. The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury,not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Bonds are issued, an information statement concerning the Bonds, all under and in accordance with section 149(e) of the Code and the applicable Regulations promulgated thereunder. (h) Continuing Obligation. Notwithstanding any other provision of this Ordinance, the City's obligations under the covenants and provisions of this Section 10.07 shall survive the defeasance and discharge of the Bonds. � 6.I�F:�F7NM7�GRA325�81002\ORD_AIItH -29- 0�/17N7:(10:O8am) �.: , ARTICLE XI DEFAULT AND REMEDIES Section 11.01. Remedies in Event of Default. (a) In addition to all the rights and remedies provided by the laws of the State of Texas, the City covenants and agrees particularly that in the event the City (i) defaults in payments to be made to the Interest and Sinking Fund and Reserve Fund as required by this Ordinance or (ii) defaults in the observance or performance of any other of the covenants, conditions or obligations set forth in this Ordinance, the Owner of any Parity Bond shall be entitled to a writ of mandamus issued by a court of proper jurisdiction compelling and requiring the City Council and other officers of the City to observe and perform any covenant, condition or obligation prescribed in this Ordinance. (b) No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power,or shall be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. The specific remedies herein provided shall be cumulative of all other existing remedies and the specification of such remedies shall not be deemed to be exclusive. Notwithstanding any other provision of this Ordinance,the right to accelerate the debt evidenced by the Bonds shall not be available as a remedy under this Ordinance. ARTICLE XII � DISCHARGE ,�.,;� Section 12.01. DischarEe. (a) Any Parity Bond shall be deemed to be paid, retired, and no longer outstanding within the meaning of this Ordinance when payment of the principal and interest thereon to its due date (whether such due date be by reason of maturity, redemption or otherwise) either(i)shall have been made or caused to be made in accordance with the terms thereof(including the giving of any required notice of redemption), or (ii) shall have been provided by irrevocably depositing with, or making available to, a paying agent therefor, in trust and irrevocably set aside exclusively for such payment, (A) money sufficient to make such payments, or (B) Government Obligations,as hereinafter defined in this Section, certified by an independent public accounting firm of national reputation to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money to make such payment, and all necessary and proper fees, compensation and expenses of such paying agent pertaining to the Parity Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of such paying agent. At such times as a Parity Bond shall be deemed to be paid hereunder, as aforesaid, it shall no longer be secured by or entitled to the benefit of this Ordinance or a lien on or pledge of the Net Revenues, and shall be entitled to payment solely from such money or Government Obligations. . (b) That money so deposited with a paying agent may, at the direction of the City, be invested in Government Obligations maturing in the amounts and times as hereinbefore set forth, and � all income from all Government Obligations in the hands of the paying agent pursuant to this Section which is not required for the payment of the Parity Bonds, and interest thereon,with respect to which such money has been deposited, shall be delivered to the City or deposited as directed by the City. � 6.11F:�F7NAMGRA3L5�81002\ORD_AUTH -30- 07/17N7:(10:08am) � (c) That the City covenants that no deposit will be made or accepted under subsection (a) and no use made of any such deposit which would cause the Parity Bonds to be treated as "arbitrage bonds"within the meaning of Section 148 of the Code. �;.� (d) That, for the purpose of this Section, the term "Government Obligations"shall mean direct obligations of the United States of America,including obligations, the principal and interest of which are unconditionally guaranteed by the United States of America,which may be United States Treasury obligations such as its State and Local Government Series, and which may be in book-entry form. ARTICLE XIII CONTINUING DISCLOSURE UNDERTAKING Section 13.01. Definitions of Continuing Disclosure Terms. As used in this Article, the following terms have the meanings assigned to such terms below: "MSRB"means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the�meaning of the Rule from time to time. � "Rule" means SEC Rule 15c2-12, as amended from time to time. � �. "SEC" means the United States Securities and Exchange Commission. ` "SID"means any person designated by the State of Texas or an authorized department,officer, or agency thereof as,and determined by the SEC or its staff to be,a state information depository within the meaning of the Rule from time to time. Section 13.02. Annual Re�orts. (a) The City shall provide annually to each NRMSIR and to any SID, within six (6) months after the end of each fiscal year ending in or after 1997, financial information and operating data with respect to the City of the general type included in the final Official Statement, being the information described in Exhibit A hereto. Any financial statements so to be provided shall be (i) prepared in accordance with the accounting principles described in E�thibit A hereto, and(ii) audited,if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within such period, then the City shall provide notice that audited financial statements are not available and shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID. Thereafter,when and if audited financial statements become available,the City shall provide such audited financial statements as required to each NRMSIR and to any SID. (b) If the City changes its fiscal year,it will notify each NRMSIR and any SID of the change �,,, (and of the date of the new fiscal year end)prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. � 6.I�F:�FiNAMGRA325�81002\ORD_AUTH _31_ 07l17N7:(10:08am) �t . (c) "I'he financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document(including an official statement or other offering document,if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. Section 13.03. Material Event Notices. (a) The City shall notify any SID and either each NRMSIR or the MSRB,in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: (i) principal and interest payment delinquencies (ii) nonpayment related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions or events affecting the tax exempt status of the Bonds; (vii) modifications to rights of Owners; "�"" (viii) bond calls; �r (ix) defeasance; � (x) release,substitution,or sale of property securing repayment of the Bonds; and (xi) rating changes. (b) The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner,of any failure by the City to provide financial information or operating data in accordance with Section 13.01 of this Ordinance by the time required by such Section. Section 13.04. Limitations. Disclaimers and Amendments. (a) The City shall be obligated to observe and perform the covenants specified in this Article for so long as, but only for so long as, the City remains an "obligated person"with respect to the Bonds within the meaning of the Rule, except that the City in any event will give notice of any deposit made in accordance with Article XII that causes Bonds no longer to be Outstanding. (b) The provisions of this Article are for the sole benefit of the Owners and beneficial owners of the Bonds,and nothing in this Article,express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide � only the financial information,operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, � condition,or prospects or hereby undertake to update any information provided in accordance with this 6.I�F:�FINMI�GRA325�81002\ORD_AUTH -32- 07/17N7:(t0:08am) �-� Article or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR BENEFICIALOWNER OF ANY BOND OR E1NY OTHER PERSON,IN CONTRACT OR TORT; FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE,BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. (c) No default by the City in observing or performing its obligations under this Article shall comprise a breach of or default under the Ordinance for purposes of any other provisions of this Ordinance. (d) Nothing in this Article is intended or shall act to disclaim,waive, or otherwise limit the duties of the City under federal and state securities laws. (e) The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if(1) the provisions of this Article,as so amended,would have permitted an underwriter to purchase or sell Bonds in the primary "'�Aw� offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment,as well as such changed circumstances, and � (2) either(a) the Owners of a majority in aggregate principal amount (or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or(b)a person that is unaffiliated with the City (such as nationally recognized bond counsel)determines that such amendment will not materially impair the interests of the Owners and beneficial owners of the Bonds. If the City so amends the provisions of this Article, it shall include with any amended financial information or operating data next provided in accordance with Section 13.02 an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. ARTICLE XIV EMERGENCY Section 14.01. Emergency. The public importance of this Ordinance and the fact that it is to the best interest of the City to provide funds for the construction of the improvements herein contemplated at the earliest possible date constitutes an emergency and creates a necessity for the immediate preservation of the public peace, property, health and safety of the citizens of the City requiring that this Ordinance be passed and take effect as an emergency measure, and it is accordingly ordained that this Ordinance shall be in full force and effect from and after its passage in accordance with the Charter of the City. � 6.I�F:�F[NAMGRA32SS 1002\ORD_AUTH '33' 07/17i97:(10:O8am) � FINALLY ADOPTED,APPROVED AND EFFECTIVE this Auqust 4, 1997 � Mayor, City of Grapevine,Texas ATTEST: City ecretary, City o apevine,Texas [SEAL] APPROV�I?AS TO FORM AND LEGALITY ��, .:, City Attorney, City of Grapevine,Texas �_� . � � �- EXHIBIT A DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION �,� The following information is referred to in Article XII of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or other headings of the Official Statement referred to) below: 1. The portions of the financial statements of the City appended to the Official Statement as Appendix I3, but for the most recently concluded fiscal ycar. 2. Statistical and financial data set forth under the caption "Selected Financial Information" and in Tables 1-11, inclusive. Accounting Principles The accounting principles referred to in such Section are the accounting principles described in the notes to the financial statements referred to in Paragraph 1 above. ,� .�, � . � 6.I�F:�FTNAN�GRA325�8 t002\ORD_AUTH A�1 07/17N7:(10:08am) �`"' CERTIPICATE FOR ORDINANCE '� I, the undersigned City Secretary of the City of Grapevine,Texas, hereby certify as follows: 1. The City Council of said City convened in Regular Session on August 4, 1997, at the location specified in the public notice of said meeting, and the roll was called of the duly constituted officers and members of said City Council, to-wit: William D.Tate, Mayor Ted R. Ware, Mayor Pro Tem C. Shane Wilbanks, Councilmember Sharron Spencer, Councilmember Clydcne Johnson, Councilmember Jerry L. Pittman, Councilmember Roy Stewart, Councilmember and all of said persons were present, except for the following: None ; thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written Ordinance entitled AN ORDINANCE OF THE CITI'COUNCIL OF THE CITY OF GRAPEVINE, TEXAS, AUTHORIZING THE ISSUANCE AND SALE OF CIT`Y OF GRAPEVINE,TEXAS,WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING AND .> r IMPROVEMENT BONDS, SERIES 1997, IN THE AGGREGATE PRINCIPAL AMOUNT OF $7,370,000; PROVIDING FOR THE SECURITY FOR AND PAYMENT OF SAID BONDS; APPROVING THE OFFICIAL STATEMENT; ENACTING OTHER PROVISIONS RELATING � THERETO;DECLARING AN EMERGENCY;AND PROVIDING AN EFFECTIVE DATE was duly introduced for consideration of said City Council. It was then duly moved and seconded that said Ordinance be passed; and, after due discussion, said motion, carrying with it the passage of said Ordinance, prevailed and carried by the following vote: AYES: 7 NOES: � ABSTENTIONS: 0 2. A true,full and correct copy of the aforesaid Ordinance passed at the meeting described in the above and foregoing paragraphs is attached to and follows this Certificate; said Ordinance has been duly recorded in the official minutes of said City Council; the above and foregoing paragraph is a true and correct excerpt from said minutes of said meeting pertaining to the passage of said Ordinance; the persons named in the above and foregoing paragraph, at the time of said meeting and the passage of said Ordinance,were the duly chosen, qualified and acting officers and inemUers of said City Council as indicated therein; each of said officers and members was duly and sufficiently notified officially and personally in advance, of the time, place and purpose of the aforesaid meeting and that said Ordinance would be introduced and considered for passage at said meeting, and each of said officers and members consented in advance to the holding of said meeting for such purpose; and said meeting was open to the public, and public notice of the time, place and purpose of said meeting was :�.� given, all as required by Texas Government Code, Section 551.041, as amended. � 6.1\F:U'INAMGRA325�81002UdISC DOC�CGR ORD. 07/28/97:(IO:OOam) SIGNED AND SEALED this %a ,t�;a,� _. City S cretary, City o rapevine,Texas r•rGR�'iP'F�t i k — +'t i O .'" �. .�.`� �s� . . ; �`_�� r�, � ��� [CITY��L. �h� �`� �� :i;r �� �� i ,��� _ ���� ��._... .�_...�-� �r+ 6.1�F:�fINAMGRA3LSB1002Vv1ISC_DOQCER ORD �1 O7RSN7:(t0:00am) . -G-