Loading...
HomeMy WebLinkAboutORD 1992-043 BOND ORDINANCE No. 9 2—4 3 $10,435,000 CIT'Y OF GRAPEVINE, TEXAS ' WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1992 Dated: August 1, 1992 Adopted: August 18, 1992 BAB-HBBF.066-2 ORDINANCE NO. 92-43 AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY OF � GRAPEVINE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1992, IN THE AGGREGATE PRINCIPAL AMOUNT OF$10,435,000; APPROVING A PURCHASE CONTRACT AND AN . ESCROW AGREEMENT IN CONNECTION THEREWITH; MAI�Il�TG PROVISIONS FOR T�IE PAYMENT AND SECURITY OF SUCH OBLIGATIONS;ENACTING OTHER PROVISIONS INCIDENTAND RELATED TF�RETO; AND DECLARING AN EMERGENCY WHEREAS, pursuant to the Constitution and laws of the State of Texas, specifically Article 717k, Vemon's Annotated Civil Statutes, as amended, the City of Grapevine, Texas (the "City") is authorized to issue its refunding bonds for the purpose of refunding one or more series of its previously issued and outstanding revenue bonds; and WHEREAS, pursuant to this Ordinance the City intends to refund certain of its previously issued and outstanding revenue bonds as described on Schedule I attached hereto and incorporated herein by reference for all purposes (collectively, the "Refunded Bonds"); and WHEREAS,the City Council hereby finds and determines that refunding the Refunded Bonds for the purpose of reducing the total debt service to be paid with respect to the City's revenue bonds payable &om the Net Revenues of the System is in the best interests of the citizens of the City; and WHEREAS,this City Council is now authorized and empowered to proceed with the issuance of said bonds; and � - 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 Article 6252-17, Vernon's Annotated Texas Civil Statutes, as amended. �°" NOW,THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS: �., BAB-HBBF.066-2 TABLE OF CONTENTS � Page Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE I DEFINITTONS, FINDINGS AND INTERPRETATION Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Section 1.02. Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Section 1.03. Table of Contents, Titles and Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Section 1.04. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 ARTTCLE II SECURITY FOR THE BONDS Section 2.01. Pledge of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 2.02. Rates and Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 2.03. Bonds as Special Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ARTICLE III AUT�IORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS �� fi Section 3.01. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 3.02. Date, Denomination, Maturities and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 3.03. Medium, Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 3.04. Execution and Registration of Series 1992 Bonds . . . . . . . . . . . . . . . . . . . . . . . 7 Section 3.05. Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 3.06. Registration, Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 3.07. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 3.08. Temporary Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 3.09. Replacement Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . � � . . � a e . � � 10 Section 3.10. Book-Entry Only System . . . . . . . . . . . . . . . . . . . . . . . . . . e . . . . . , � � u . 6 � _ � 11 Section 3.11. Successor Securities Depository; Transfer Outside Book-�nt�y�C)nl� S�s��� . . . 11 Section 3.12. Payments to Cede & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d . . . . o � . 11 ARTICLE IV REDEMPTION OF BONDS BEFORE MATURIT�' Section 4.01: Limitation on Redemption . . . . . . . . . . . . . . . . . . . . . . n � . � . o . � o � � 3 � u � . ., , �� , Section 4A2. Optional Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 4.03. Partial Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 4.04. Notice of Redemption to Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 4.05. Payment Upon Redemption . . . . . . . . . . . . . . . . . . . . . . . . o � o o a . . . . . . . . . . 13 �.,»,� BAB-HBBF.066-2 �1} Section 4.06. Effect of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 ARTICLE V PAYING AGENT/REGISTRAR Section S.Ol. 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 to Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 5.06. Agreement to Perform Duties and Functions . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 5.07. Delivery of Records to Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 ARTICLE VI FORM OF THE BONDS Section 6.01. Form Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Section 6.02. Form of the Series 1992 Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Section 6.03. CIJSIP Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Section 6.04. Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Section 6.05. Statement of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 ARTTCLE VII FUNDS AND ACCOUNTS Section 7.01. Special Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 �:.., . . . . . . . . . . . . . . . . . Section 7.02. Revenue Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Section 7.03. Interest and Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Section 7.04. Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Section 7.05. Deficiencies in Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Section 7.06. Excess Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Section 7.07. Security of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 7.08. Investment of Certain Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 ARTICLE VIII SALE AND DELIVERY OF SERIES 1992 BONDS; DEPOSTT OF PR�C���� Section 8.01. Sale of Series 1992 Bonds; Official Statement . . . . . . . . . . . . . o a . . � � � � .. � .. � a � Section 8.02. Control and Delivery of Series 1992 Bonds . . . . . . . . . . . . . . . . � � � � . a o � � . � . �� Section 8.03. Deposit of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . � � � a . . � � , � 24 ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01. Payment of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . � d . � . . . . . . . . . 25 BAB-HBBF.066-2 �ll� Section 9.02. Additional Parity Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Section 9.03. Maintenance and Operation; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Section 9.04. Records; Accounts; Accounting Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Section 9.05. Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Section 9.06. Bonds as Negotiable Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Section 9.07. No-Arbitrage; Rebate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Section 9.08. Further Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Section 9.09. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 ARTICLE X DEFAULT AND REMEDIES Section 10.01. Remedies in Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 ARTICLE XI EMERGENCY Section 11.01. Emergency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 ARTICLE XII ESCROW AGREEMENT; REDEMPTION OF REFUNDED BONDS Section 12.01. Approval of Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Section 12.02. Purchase of Securities for Escrow Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Section 12.03. Redemption of Refunded Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 � ARTICLE XIII FINANCIAL GUARANTY INSURANCE POLICY Section 13.01. Terms While Bonds Insured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Section 13.02. Notice to MBIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Section 13.03. Notice Regarding Amendments . . . . . . . . . . . . . . . . . . . . . � n . . . . . . . . . . . . 31 Section 13.04. Consent to Amendments . . . . . . . . . . . . . . . . . . . . . . . . . � � . e . . � . e o v . o . . 31 Section 13.05. Right to Consent In Event of Default . . . . . . . . . . . . . . . o , � _ � � � s � � � . . � . 31 Section 13.06. Approval of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . o o � o � o . � . . . 31 EXECtJ'TION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e . � � . � � � . � . � . _ � . 3� BAB-HBBF.066-2 �111� � ARTICLE I DEFINITIONS, FINDINGS AND INTERPRETATTON 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 Series 1992 Bonds and the Previously Issued Bonds in accordance with the terms and conditions prescnbed in Section 9.02 of this Ordinance. "Bond" or "Bonds" means the Previously Issued Bonds, the Series 1992 Bonds and any Additional Bonds at any time outstanding. "Bond Date" means the date designated as the date of the Series 1992 Bonds by Section 3.02(a) of this Ordinance. "Closing Date" means the date of the initial delivery of and payment for the Series 1992 Bonds. "DTC"shall mean The Depository Trust Company of New York, New York,or any successor securities depository. "DTC Participant" 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. "Escrow Agent" means Team Bank, Fort Worth, Texas. "Fscrow Agreement"means the escrow agreement,dated as of August 1, 1992,by and between the City and the Escrow Agent. "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings and court decisions. "Govemment Obligations" means direct obligations of the United States of America, the principal of and interest on which are unconditionally guaranteed by the United States of America, and which may be in book-entry form. "Initial Bond" means the initial Series 1992 Bond authorized by Section 3.04(d) of this Ordinance. "Interest and Sinking Fund" means the "City of Crrapevine, Texas, Waterworks and Sewer % System Revenue Bonds Interest and Sinking Fund," described in Article VII of this Ordinance. "Interest Payment Date" means the date or dates upon which interest on the Series 1992 Bonds is scheduled to be paid until their respective dates of maturity or prior redemption,such dates being March 1 and September 1 of each year, commencing March 1, 1993. �.,� BAS-HBBF.066-2 2 "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 payment of current expenses of maintenance and operation thereof, including all salaries, labor, materials, repairs and extensions necessary to render ef�icient 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 expense 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. "Ordinance" means this ordinance under which the Series 1992 Bonds are issued. "outstanding" when used in this Ordinance with respect to Series 1992 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 cancelled 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 inevocable 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 shaU have been 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 suthorizing 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 Series 1992 Bond or Series 1992 Bonds. "Paying Agent/Registrar" means initially Team Bank, 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 1, 1985, and the City's Waten�+orks and Sewer System Revenue Bonds, Series 1988, dated October 1, 1988. "Record Date"means the fifteenth day of the month next preceding an Interest Payment Date. BAB-HBBF.066•2 3 "Register" means the Register specified in Section 3.06(a) of this Ordinance. "Reserve Fund"means the"City of Grapevine,Texas,Waterworks and Sewer System Revenue Bonds Reserve Fund," described in Article VII of this Ordinance. � "Reserve Fund Requirement"means the amount which is equal to the average annual principal and interest requirements on the Bonds at any time outstanding. "Revenue Fund" means the "City of Grapevine, Texas, Waterworks and Sewer S�stem Revenue Fund," described in Article VII of this Ordinance. "Series 1992 Bond" means any of the Series 1992 Bonds. "Series 1992 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 Crrapevine, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 1992." "System" means the City's existing combined waterworks and sewer system, including all properties (real, personal 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 Series 1992 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. Findin s. (a) 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. (b) The Series 1992 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. Section 1.03. Table of Contents, Titles and Headin�s. 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 1.04. 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 BAB-HBBF.066-2 4 `" of t,he 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 �, et�f;ctuate the purposes set forth herein to sustain the validity of this Ordinance. � ARTICLE II SECURTTY FOR THE BONDS Section 2.01. Pledge of Securitv. 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 hereinafter provided are hereby irrevocably pledged to the payment of the Series 1992 Bonds and all lPreviously Issued Bonds and Additional Bonds,together with the interest thereon,required by this Orciinance, the ordinance authorizing the Previously Issued Bonds, and any future ordinances sut:horizing any Additional Bonds. It is hereby ordained that the payment of the Series 1992 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. Rates and Charges. ' The City covenants and agrees with the holders of the Bonds, as follows: (a) That it will at all times charge and collect for services rendered by the System rates sufl.icient to pay all operating, maintenance, replacement and improvement expenses, and any other - cos��s deductible in determining Net Revenues and to pay the interest on and the principal of the 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 suc)h indebtedness. Section 2.03. Bonds as Special Obligations. The Series 1992 Bonds are special obligations of the City payable solely from the Net Re��enues of the System, and the Owners thereof shall never have the right to demand payment the�reof out of any other funds raised or to be raised by taxation. ,M�,-_ BAB-HBBF.066-2 5 ARTICLE III AU'TFiORIZATION; GENERAI,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 Syst�m Revenue Refunding Bonds, Series 1992," are hereby authorized to be issued and delivered in ac:cordance with the Constitution and laws of the State of Texas,including particularly Article 717k, Vernon's Annotated Texas Civil Statutes, as amended. The Series 1992 Bonds shall be issued in the aggregate principal amount of$10,435,000, for the purpose of refunding the Refunded Bonds and for �paying the costs of issuing the Series 1992 Bonds. Section 3.02. Date. Denomination, Maturities and Interest. (a) The Series 1992 Bonds shall be dated August 1, 1992. The Series 1992 Bonds shall be in fully registered form, without coupons, in the denomination of�5,000 or any integral multiple theieof and shall be numbered separately from one upward, except the Initial Bond, which shall be nua�bered T-l. (b) The Series 1992 Bonds shall mature on September 1 in the years and in the principal amaunts set forth in the following schedule: Principal Interest Principal Interest �Years Amounts Rates Years Amounts Rate 1993 $ 205,000 2.75% 2002 $ 355,000 5.30% - 1994 180,000 3.75% 2003 375,000 5.40% 1995 185,000 4.00% 2004 400,000 5.50% 1996 895,000 4.30% 2005 420,000 5.60% 1997 935,000 4.50% 2006 445,000 5.75% 1998 980,000 4.80% 2007 470,000 5.75% 1999 1,300,000 5.00% 2008 500,000 5.75% 2000 1,355,000 5.10% 2009 530,000 6.00% 2001 340,000 5.20% 2010 565,000 6.00% (c) Interest shall accrue and be paid on each Series 1992 Bond respectively until its maturity or prior redemption, 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, 1993, cc�mputed 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 Series 1992 Bonds shal.l be paid in lawful money of the United States of America. BAB•HSBF.066-2 6 " (b) Interest on the Series 1992 Bonds shall be payable to the Owners as shown in the Re�ister on the Record Date. (c) Interest shall be paid by check, dated as of the Interest Payment Date, and sent fust class United States mail,postage prepaid,by the Paying Agent/Registrar to each Owner at the address of�ach 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, how►ever, that such person shall bear all risk and expenses of such customary banking arrangement� (d) The principal of each Series 1992 Bond shall be paid to the Owner thereof on the due dat�e, whether at the maturity date or the date of prior redemption thereof, upon presentation and sunrender of such Series 1992 Bond at the principal corporate trust office of the Paying Ag��nt/Registrar. (e) If the date for the payment of the principal of or interest on the Series 1992 Bonds shall be a Saturday, Sunday, legal holiday or day on which banking institutions in the city where the Pa3zng Agent/Registrar is located are required or authorized by law or executive order to close, then the date for such payment shall be the next 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 dat�e shall for all purposes be deemed to have been made on the due date thereof as specified in this Sec:tion. (� Unclaimed Payments shall be segregated in a special account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owner of the Series 1992 Bonds ` to ��vhich the Unclaimed Payments pertain. Subject to any applicable escheat, abandoned property or :►imilar law, Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment or redemption date shall be applied to the next payment or payments on the Series 1992 Bonds thereafter coming due and,to the extent any such money remains . afte;r the retirement of all outstanding Series 1992 Bonds,shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar nor any other person shall be liable or responsible to any holders of such Series 1992 Bonds for any further payment of such unc:laimed moneys or on account of any such Series 1992 Bonds, subject to any applicable escheat law or similar law. Section 3.04. Execution and Registration of Series 1992 Bonds. (a) The Series 1992 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 Series 1992 Bonds shall have the saaie effect as if each of the Series 1992 Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Series 1992 Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Series 1992 Bonds. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Series 1992 Bonds ceases to be such officer before the authentication of such Series 1992 _ . Bo�ids 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 Series 1992 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 BAB�HBBF.066-2 7 } 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 Ag��nt/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Ag�:nt/Registrar sign the Certificate of Paying Agent/Registrar on aIl of the Series 1992 Bonds. In _- • lieci of the executed Certificate of Paying Agent/Registrar described above,the Initial Bond delivered at the Closing Date shall have attached thereto the Comptroller's Registration Certificate au�stantially in the form provided herein, manually executed by the Comptroller of Public Accounts of�he State of Texas, or by his duly authorized agent, which certificate shall be evidence that the Initaal Bond has been duly approved by the Attorney General of the State of Texas and that it is a vali;d and binding obligation of the City, and has been registered by the Comptroller of Public Aca:ounts of the State of Texas. (d) On the Closing Date,one Initial Bond representing the entire principal amount of all Series 1992 Bonds,payable in stated installments to the Purchaser,or its designee,executed with the manual or facsimile signature of the Mayor and the City Secretary, approved by the Attorney General,and registered and manually signed by the Comptroller of Public Accounts,will be delivered to tbe Purchaser or its designee. Upon payment for the Initial Bond, the Paying Agent/Registrar shall cancel the Initial Bond and deliver to DTC on behalf of the Purchaser one registered definitive Bo:nd for each year of maturity of the Bonds, in the aggregate principal amount of all Bonds for such maturity, registered in the name of Cede & Co., as nominee of DTC. Section 3.05. Ownership. (a) The City, the Paying Agent/Registrar and any other person may treat the person in wh��se name any Series 1992 Bond is registered as the absolute owner of such Series 1992 Bond for the. purpose of making and receiving payment of the principal thereof and redemption premium, if . an}�, thereon, for the further purpose of making and receiving payment of the interest thereon, and for all other purposes, whether or not such Series 1992 Bond is overdue, and neither the City nor -. the. Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. (b) All payments made to the Owner of a Series 1992 Bond shall be valid and effectual anc! shall discharge the liability of the City and the Paying Agent/Registrar upon such Series 1992 Bond to the extent of the sums paid. Section 3.06. Registration. Transfer and Exchan�e. (a) So long as any Series 1992 Bond remains outstanding, the City shall cause the Paying Agent/Registrar to keep at its principal corporate trust office a register in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Series 1992 Bonds in accordance with this Ordinance. (b) The ovmership of a Series 1992 Bond may be transfened only upon the presentation anci surrender of the Series 1992 Bond at the principal corporate trust office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Series 1992 Bond shall be effective until entered in the Register. (c) The Series 1992 Bonds shall be exchangeable upon the presentation and surrender the;reof at the principal corporate trust office of the Paying Agent/Registrar for a Series 1992 Bond or Series 1992 Bonds of the same maturity and interest rate and in any denomination or �,..� de»ominations of any integral multiple of$5,000 and in an aggregate principal amount equal to the BAFt-HBBF.066-2 g " unp�aid principal amount of the Series 1992 Bonds presented for exchange. The Paying Age:nt/Registrar is hereby authorized to suthenticate and deliver Series 1992 Bonds exchanged for oth��r Series 1992 Bonds in accordance with this Section. -• - (d) Each exchange Series 1992 Bond delivered by the Paying Agent/Kegistrar in accc�rdance with this Section shall constitute an original contractual obligation of the City and ahall be�ntitled to the benefits and security of this Ordinance to the same extent as the Series 1992 Bond or;ieries 1992 Bonds in lieu of which such exchange Series 1992 Bond is delivered. (e) No service charge shall be made to the Owner for the initial registration and any sub;sequent transfer or exchange for a different denomination of any of the Series 1992 Bonds. The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any taa or oth�r govemmental charge that is authorized to be imposed in connection with the registration, traz�sfer or exchange of a Series 1992 Bond. (� Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any Series 1992 Bond called for redemption, in whole or in part,where such redemption is sc:heduled to occur within 45 calendar days after the transfer or exchange date;provided,however, sucli limitation of transfer shall not be applicable to an exchange by the Owner of the uncalled prir.�cipal balance of a Series 1992 Bond. Section 3.07. Cancellation. All Series 1992 Bonds paid or redeemed before scheduled maturity in accordance with this " Orclinance and all Series 1992 Bonds in lieu of which exchange Series 1992 Bonds or replacement Serries 1992 Bonds are authenticated and delivered in accordance with this Ordinance shall be can�;.elled and destroyed upon the making of proper records regarding such payment, redemption, exchange or replacement. The Paying Agent/Registrar shall then return such cancelled Series 1992 � Borids to the City or may, in accordance with law, destroy such cancelled Series 1992 Bonds and per,iodically furnish the City with certificates of destruction of such Series 1992 Bonds. Section 3.08. Temporary Bonds. (a) Following the delivery and registration of the Initial Bond and pending the preparation of ciefinitive Series 1992 Bonds, the proper officers of the City may execute and, upon the City's req�uest, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Series 1992 Bonds that are printed, lithographed,typewritten, mimeographed or otherwise produced,in any denomination, substantially of the tenor of the definitive Series 1992 Bonds in lieu of which they are delivered,without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers of the City executing such temporary Series 1992 Bonds may determine, as evidenced by their signing of such temporary Series 1992 Bonds. (b) Until exchanged for Series 1992 Bonds in definitive form, such Series 1992 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 Age;nt/Registrar, the Series 1992 Bonds in definitive form; thereupon, upon the presentation and sun�ender of the Series 1992 Bond or Series 1992 Bonds in temporary form to the Paying Age:nt/Registrar, the Paying Agent/Registrar shall cancel the Series 1992 Bonds in temporary form and authenticate and deliver in exchange therefor a Series 1992 Bond or Series 1992 Bonds of the BAB-HBBF.066-2 9 � sanae maturity and series, in definitive form, in the authorized denomination, and in the same ag�;regate principal amount, as the Series 1992 Bond or Series 1992 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 Seiies 1992 Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Series 1992 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 suc:h Series 1992 Bond to pay a sum sufficient to cover any tax or other governmental charge that is �uthorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Series 1992 Bond is lost, apparently destroyed or wrongfully tak:en, the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the abs,ence of notice or knowledge that such Series 1992 Bond has been acquired by a bona fide pu��chaser, shall authenticate and deliver a replacement Series 1992 Bond of like tenor and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner first cornplies 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 Series 1992 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 authorized 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 Series 1992 Bond, if a bona fide purchaser of the;original Series 1992 Bond in lieu of which such replacement Series 1992 Bond was issued presents for payment such original Series 1992 Bond, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Series 1992 Bond from the person to whom it was delivered or any pe�son taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Paying Agent/Registrar in connection therewith. (d) In the event that any such mutilated, lost, apparently destroyed or wron�fully taken Seiies 1992 Bond has become or is about to become due and payable, the Paying Agent/Registrar, in i.ts discretion, instead of issuing a replacement Series 1992 Bond, may pay such Series 1992 Bond if it has become due and payable, or may pay such Series 1992 Bond when it becomes due and payable. (e) Each replacement Series 1992 Bond delivered in accordance with this Section shall cor�stitute an original additional contractual obligation of the City and shall be entitled to the benefits �,. ,� BAE�.HBBF.066-2 10 and', security of this Ordinance to the same extent as the Series 1992 Bond or Series 1992 Bonds in lieu� of which such replacement Series 1992 Bond is delivered. Section 3.10. Book-Entry Onlv System. The Bonds shall initially be issued in book-entry-only � forra and shall be deposited with DTC,which is hereby appointed to act as the securities depository therefor, in accordance with the Letter of Representations. 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 limriting 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 DT'C Participant or any other person, other than an Owner, as shown on the Register, of any notice witla respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than an Owner, as shown in the Register of any amount with res��ect 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 abs�olute owner of such Bond for the purpose of payment of principal of, premium, if any, and inte:rest on Bonds, for the purpose of giving notices of redemption and other 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 inte:rest on the Bonds only to or upon the order of the respective Owners as shown in the Register, ; as provided in this Ordinance, and all such payments shall be valid and effective to fully satisfy and disc;harge the City's obligations with respect to payment of principal 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 Ag�:nt/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in ��lace 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. Section 3.11. Successor Securities Depository; Transfer Outside Book-Entry-Onlv System. In the event that the City determines that DTC is incapable of discharging its responsibilities described herein and in the Letter of Representation, the City shall (i) appoint a successor securities deF►ository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as :amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository; or (u) notify DTC and DTC Participants of the availability through DTC of certificated Bonds and cause the Paying Agent/Registrar to transfer one or more separate registered Bonds to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to ibeing 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 nar.nes Owners transferring or exchanging Bonds shall designate, in accordance with the provisions � of�:his 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, BAB•HBBF.066-2 11 s all F�ayments with respect to principal of, premium, if any, and interest on such Bonds, and all notices witr� respect to such Bonds shall be made and given, respectively, in the manner provided in the Let�:er of Representation. ARTICLE IV REDEMPTION OF BONDS BEFORE MATURTTY Section 4.01. Limitation on Redemption. The Series 1992 Bonds shall be subject to redemption before scheduled maturity only as prrnrided in this Article IV. Section 4.02. Optional Redemption. (a) The City reserves the option to redeem Series 1992 Bonds maturing on and after September 1, 2003, in whole or in part before their respective scheduled maturity dates, on September 1, 2002, 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 Series 1992 Bonds so called for redemption plus acciued 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 rede;mption date and of the principal amount of Series 1992 Bonds to be redeemed. Section 4.03. Partial Redemption. $ (a) If less than all of the Series 1992 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 Age:nt/Registrar to call by lot the Series 1992 Bonds, or portions thereof, within such maturity or maturities and in such principal amounts for redemption. (b) A portion of a single Series 1992 Bond of a denomination greater than 55,000 may be redeemed,but only in a principal amount equal to $5,000 or any integral multiple thereof. If such a Sc;ries 1992 Bond is to be partially redeemed, the Paying Agent/Registrar shall treat each 55,000 porition of a Series 1992 Bond as though it were a single bond for purposes of selection for redc;mption. (c) Upon surrender of any Series 1992 Bond for redemption in part, the Paying Age:nt/Registrar,in accordance with Section 3.06 of this Ordinance,shall authenticate and deliver an exchange Series 1992 Bond or Series 1992 Bonds in an aggregate principal amount equal to the unr�rdeemed portion of the Series 1992 Bond so sunendered, 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 � amc►unt to be redeemed of any Series 1992 Bond as to which only a portion thereof is to be red�;emed. ��..� BAB-HBBF.066•2 12 �_ Section 4.04. Notice of Redemption to Owners. (a) The Paying Agent/Registrar shall give notice of any redemption of Series 1992 Bonds by.�ending notice by first class United States mail, postage prepaid, not less than 30 days before the �. - dat�fixed for redemption, to the Owner of each Series 1992 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 Series 1992 Bonds are to be surrendered for payment, and, if less than all the Series 1992 Bonds outstanding are to be redeemed, an identification of the Series 1992 Bonds or portions thereof to be redeemed. (c) Any notice given as provided in this Section shall be conclusively presumed to have bee:n duly given, whether or not the Owner receives such notice. Section 4.05. Pa,yment Upon Redem�tion. (a) Before or on each redemption date, the City shall deposit with the Paying Agc;nt/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Age:nt/Registrar shall make provision for the payment of the Series 1992 Bonds to be redeemed on suclh date by setting aside and holding in trust an amount from the Interest and Sinking Fund or oth�erwise 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 Series 1992 Bonds being redeemed. (b) Upon presentation and sunender of any Series 1992 Bond called for redemption at the principal corporate trust of6ce of the Paying Agent/Registrar on or after the date fixed for red�emption, the Paying Agent/Registrar shall pay the principal of, redemption premium, if any, and _. acc,rued interest on such Series 1992 Bond to the date of redemption from the money set aside for suc;h purpose. Section 4.06. Effect of Redemption. (a) Notice of redemption having been given as provided in Section 4.04 of this Ordinance, the Series 1992 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, red�emption premium, if any,or accrued interest thereon,such Series 1992 Bonds or portions thereof sha:ll cease to bear interest from and after the date fixed for redemption,whether or not such Series 1992 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 Series 1992 Bond or portion thereof shall continue to bear interest at the rate stated on �he Series 1992 Bond until due provision is made for the payment of same. �.:._� BAB•HBBP.066-2 13 ARTTCLE V PAYING AGENT/REGISTRAR � Section 5.01. Anpointment of Initial Paving A eng t/Registrar. � Team Bank, Fort Worth,Texas, is hereby appointed as the initial Paying Agent/Registrar for the Series 1992 Bonds. Section 5.02. Qualifications. Each Paying Agent/Registrar shall be a commercial bank, a trust company organized under the lavv� 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 Series 1992 Bonds. Section 5.03. Maintaining Pa i�ng A en� t/Re 'sg� trar. (a) At all times while any Series 1992 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 sut:horized 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 othetwise 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 oE any Paying Agent/ Registrar by delivering to the entity whose appointment is to be terminated wri�tten notice of such termination. Section 5.05. Notice of Change to Owners. Promptly upon each change in the entity serving as Paying Agent/Registrar,the City will cause notice of the change to be sent to each Ovmer 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 1:he replacement Paying Agent/Registrar. Section 5.06. Agreement to Perform Duties and Functions. By accepting the appointment as P�iying Agent/Registrar, and executing the Paying Agc:nt/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. BAB-HBBF.066•2 14 Section 5.07. Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent, promptly upon the appointment of the successor, will deliver the Register (or a copy thereo� and all other pertinent books aad �- ° recc�rds relating to the Series 1992 Bonds to the successor Paying Agent/Registrar. ARTICLE VI FORM OF THE BONDS Section 6.01. Form Generailv. (a) The Series 1992 Bonds, including the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar and the Ass:ignment form to appear on each of the Series 1992 Bonds, (i) shall be substantially in the form set fforth in this Article with such appropriate insertions,omissions,substitutions and other variations as a�re 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 Sec�urities 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 Series 1992 Bonds, as evidenced by their execution thereof. (b) Any portion of the text of any Series 1992 Bonds may be set forth on the reverse side the��eof, with an appropriate reference thereto on the face of the Series 1992 Bonds. ' (c) The definitive Series 1992 Bonds, if any, shall be printed, lithographed or engraved, � and may be produced by any combination of these methods or produced in any other similar manner, all t�s determined by the officers executing such Series 1992 Bonds, as evidenced by their execution the�-eof. (d) The Initial Bond submitted to the Attorney General of the State of Texas may be typc;written and photocopied or otherwise reproduced. Section 6.02. Form of the Series 1992 Bonds. The form of the Series 1992 Bonds, including the form of the Registration Certificate of the Cornptroller 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 Series 1992 Bonds shall be sub;>tantially as follows: � 4 BAB•HBBF.066-2 1$ (a) Form of Series 1992 Bonds. RE�GISTERED REGISTERED � . Na S United States of America State of Texas COUNTTES OF TARRANT AND DALLAS CITY OF GRAPEVINE, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE BOND SERIES 1992 IN7CERFST RATE: MATURTTY DATE: BOND DATE: CUSIP NUMBER: August 1, 1992 The City of Grapevine (the "City"), in the County of Tarrant, State of Texas, for value reca�ived, hereby promises to pay to or �registered assigns, but solely from the sources and in the manner hereinafter provided, on the e 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 late;r of the Bond Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, 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, cor.nmencing March 1, 1993. 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 principal corporate trust office of the Paying Agent/Registrar executing the registration certi6cate appearing hei�eon. Interest on this Bond is payable by check dated as of the interest payment date, mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books ke��t by the Payin�Agent/Registrar, or by such other customary banking anangement 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 t:he 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. 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 Paying BAEI.HSBF.066-2 16 , Age,nt/Registrar is located are required or authorized by law or executive order to close,the date for suclh payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or day on wvhich banking institutions are required or authorized to close and payment on such date shall for all �urposes be deemed to have been made on the original date payment was due. . � , This Bond is one of the series of fully registered bonds speci6ed in its title issued in the aggregate principal amount of 510,435,000 (herein refened to as the"Bonds") issued pursuant to an ordinance adopted by the governing body of the City(the"Ordinance"),for the purpose of improving and. extending the City's combined waterworks and sewer system (the "S}+stem") and for paying the cos�s of issuing the Bonds. The Bonds constitute special obligations of the City and are payable solely from and equally sec�ured by a first lien on and pledge of the Net Revenues (as defined in the Ordinance) of the System. The City expressly reserves the right to issue additional revenue obligations in all things on a p:arity with the Bonds, payable solely from and equally secured by a first lien on and pledge of the Nett 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 relFiting thereto which are set out and contained in the Ordinance to which reference is hereby made for more complete and full particulars. The City has reserved the option to redeem the Bonds maturing on or after September 1, 20Ci3, in whole or in part,before their respective scheduled maturity dates,on September 1,2002,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, � - wit:hin such maturity and in such principal amounts, for redemption. 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 Bo;nds 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 speci�ed in ;�uch 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 principal corporate trust office of the Pa}�ing Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Pa�ing Agent/Registrar; thereupon, one or more new fully registered Bonds of the same stated maturiry,of authorized denominations, bearing the same rate of interest, and for the same aggregate pri�cipal 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 prc�vided (except interest shall be paid to the person in whose name this Bond is registered on the "R�:cord Date") 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. BAEt-HBBF.066-2 17 Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or exc�iange any Bond called for redemption where such redemption is scheduled to occur within 30 calendar days of the transfer or exchange date; provided, however, such limitation shall not be app;licable to an exchange by the registered owner of the uncalled principal balance of a Bond. � TT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond and the series of v�►hich it is a part is duly authorized by law; that all acts, conditions and things required to be done prec;edent 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 BoMds 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 inevocably pledging the Net Revenues of the System, as hereinabove recited. The owner hereof shall never have the right to demand payment of this Bond out of any funds rais�rd or to be raised by taxation. IN VVITNFSS WHEREOF, the City has caused this Bond to be executed in its name by the mairual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile sign�ature of the City Secretary, and the of6cial seal of the City has been duly impressed or placed in f,acsimile on this Bond. City Secretary, Mayor, City oF Grapevine, Texas City of Grapevine, Texas [SF;AL] (b) Form of Comptroller's Registration Certificate. The following Comptroller's Registration Certificate may be deleted from the definitive Series 19S�Z 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, payable from the revenues pledged to its payment by and in the ordinance authorizing same and that said bond has this day been registered by me. Witness my hand and seal of ofFce at Austin, Texas, BAE�.HBBF.066-2 Ig � Comptroller of Public Accounts of the State of Texas � m [S�-1 (c) Form of Certificate of Pa i�ng Agent/Re 'sg► trar. The following Certificate of Paying Agent/Registrar may be deleted &om 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 Put�lic Accounts of the State of Texas, and that this is one of the Bonds refened to in the within- me�ationed Ordinance. TEAM BANK, FORT WORTH, TEXAS, as Paying Agent/Registrar Da�ted: BY� .. Authorized Signatory (d) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED (the "Transferor"), the undersigned, hei'eby sells, assigns and transfers unto (print or typewrite name, address and zip code of transferee: (Scicial Security or Federal Employer ldentification No. ) the within bond anct all rights thereunder, and hereby irrevocably constitutes anrl appoints as attorney to transfer the within bond on the books kept for registration therefor, with full power of substitution in the premises. Date: NOTICE: The signature on this Assignment must correspond with the name of the registered owner as BAEI-HBBF.066-2 19 it appears on the face of the within Bond in every "� particular and must be guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers. � � Signature Guaranteed By: 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 Series 1992 Bond, the headings "INTERFST RATE" and "MATURITY DATE"shall both be completed with the words "As shown below"; (ii) in the first paragraph of the Series 1992 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: ,_ Principal Interest Years Installments Rates " (Information to be inserted from �. schedule in Section 3.02 of this Order) (iii) in the second paragraph of the Series 1992 Bond, the words "executing the registration certificate appearing hereon" shall be deleted and an additional sentence shall be added to the paragraph as follows: "'The initial Paying Agent/Registrar is Team Bank, Fort Worth, Texas."; and (iv) 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 nutnbers on the face of the Series 1992 Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Series 1992 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 inconectly printed on the Series 1992 Bonds. BAE�-HBBF.066-2 2� Section 6.04. Le a�pinion. The approving legal opinion of Hutchison Boyle Brooks&Fisher,a Professional Corporation, Bond Counsel, may be printed on the reverse side of each Series 1992 Bond over the certification �..._ of ihe 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 Series 1992 Bonds may be printed on or attached to each Series 1992 Bond. ARTICLE VII FUNDS AND ACCOUNTS Section 7.01. Special 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 following special funds shall be �rstablished and maintained in an official depository bank of the City so long as any of the Series 1992 Bonds, Previously Issued Bonds, or Additional Bonds are outstanding and unpaid, to-wit: (a) "City of Grapevine, Texas, Watervvorks and Sewer System Revenue Fund," herein - called the "Revenue Fund"; and (b) "City of Grapevine, Texas, Waterworks and Sewer System Revenue Bonds Interest and� Sinking Fund," herein called the "Interest and Sinking Fund"; and �... (c) "City of Grapevine, Texas, Waterworks and Sewer System Revenue Bonds Reserve Futid," herein called the "Reserve Fund." Section 7.02. Revenue Fund. All gross revenues of every nature received from the operation and ovmership of the System shall be deposited from day to day as collected into the Revenue Fund, and the reasonable,necessary, andl proper expenses of operation and maintenance of the System shall be paid &om 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 7.03. Interest and Sinking`Fund. There shall be deposited into the Interest and Sinking Fund the following: �. . (a) such amounts, in equal monthly installments, commencing November 1, 1992, and on the first day of each month thereafter, as will be sufficient to pay the interest scheduled to come due on the Series 1992 Bonds and the Previously Issued Bonds on the next Interest Payment Date, less BAB•HBBF.066-2 21 �. any amounts already on deposit therein for such purpose derived from the proceeds of the Series 1992 Bonds or from any other lawfully available source; and (b) such amounts, in equal monthly installments, commencing November 1, 1992, and on �` the fust day of each month thereafter, as will be sufficient to pay the next maturing principal of the Ser�es 1992 Bonds. The Interest and Sinking Fund shall be used to pay the principal of and interest on the Bonds as such principal matures and such interest becomes due. Section 7.04. Reserve Fund. So long as the funds on deposit in the Reserve Fund created for the beneFt of the Series 1992 Bonds, the Previously Issued Bonds, and all Additional Bonds are equal to the Reserve Fund Rec�uirement, no deposits need to be made to the credit of the Reserve Fund; but should the Rea�etve 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 Futid, 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 � inte:rest on the Bonds at any time there are not suf6cient funds on deposit in the Interest and Sinking Furid 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. By reason of the issuance of the Series 1992 Bonds,the Reserve Fund Requirement is hereby det�ermined to be $1,681,974.67. 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 inc��eased to accumulate in the Reserve Fund within 60 months from the date of the Series 1992 Bo�ids an amount equal to the Reserve Fund Requirement. Section 7.05. Deficiencies in Funds. If in any month the City shall fail to pay into any Fund described in this Ordinance the full am��unts required, amounts equivalent to such def ciencies shall be set apart and paid into said fund fro�n the first available and unallocated Net Revenues of the System for the following month or moaths,and such payments shall be in addition to the amounts othecwise required hereby to be paid into said fund during such month or months. To the extent necessary, the City shall increase the rat<:s and charges for setvices of the System to make up for any such deficiencies. Section 7.06. Fxcess 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,�dditional Bonds, may be used for any lawful purpose. BAB-HBBP.066-2 22 �; Section 7.07. 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 funda, � and moneys on deposit in such funds shall be used only for the purposes permitted by this Ordinance: Section 7.08. Investment of Certain Funds. Money in any fund established pursuant to this Ordinance may, at the option of the City, be plac:ed in time deposits or certificates of deposit secured by obligations of the type hereinafter des�;n'bed, 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 creciit 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 suclh governmental agencies as the Federal Land Banks, Federal Intermediate Credit Banks, Banks for Cooperatives, Federal Home Loan Banks, Govemment National Mortgage Association, United Sta�tes Postal Service, Farmers Home Administration, Federal Home Loan Mortgage Association, Sm�311 Business Administration, Federal Housing Association, or Participation Certificates in the Fecleral Assets Financing Trust;provided that all such deposits and investments shall be made in such mauner as will permit money required to be expended from a fund to be available at the proper time or 1:imes for the purposes thereof. Such investments shall be valued each year in terms of cunent ma��ket value as of the last day of the City's fiscal year. A11 interest and eamings derived from de�osits and investments in the Interest and Sinking Fund immediately shall be credited to, and any loss,es shall be debited to, the Interest and Sinking Fund. All interest and eamings derived from deFbsits and investments in the Reserve Fund immediately shall be credited to and deposited in the Re�renue Fund as the same are received. All such investments shall be sold promptly, when necessary, to prevent any default in connection with the Bonds. ARTICLE VIII SALE AND DELIVERY OF SERIES 1992 BONDS; DEPOSIT OF PROCEEDS Section 8.01. Sale of Series 1992 Bonds; Official Statement. (a) The Series 1992 Bonds are hereby officially sold and shall be delivered to Rauscher Pierce Refsnes, Inc. (the "Purchaser") in accordance with the terms and provisions of that certain Bond Purchase Agreement (the"Purchase Contract") relating to the Series 1992 Bonds between the City and the Purchaser and dated the date of the passage of this Ordinance. The Mayor of the City is�ereby authorized and directed to execute and deliver, and the City Secretary of the City is hereby authorized and directed to attest, such Purchase Contract. It is hereby officially found, determined anci declared that the terms of this sale are the most advantageous reasonably obtainable. The 1992 Bonds shall initially be registered in the name of the Purchaser, or its designee. (b) The form and substance of the Preliminary Official Statement, dated August 1, 1992, ° and any addenda, supplement or amendment thereto, and the final Official Statement (the "Official Sta�tement") presented to and considered at this meeting, are hereby in all respects approved and adopted and is hereby deemed final as of its date within the meaning and for the purposes of paragraph (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The ifP.............: BAI!-HSBF.066-2 23 Ma;yor and City Secretary of the City are hereby authorized and directed to execute the same and deliver appropriate numbers of executed copies thereof to the Purchaser of the 1992 Bonds. The Ot�icial Statement as thus approved,executed and delivered,with such appropriate variations as shall be �spproved by the Mayor of the City and the Purchaser of the 1992 Bonds, may be used by the .- Purchaser in the public offering and sale thereof. The City Secretary is hereby authorized and dir�cted to include and maintain a copy of the Official Statement and any addenda, supplement or amc;ndment thereto thus approved among the permanent records of this meeting. The use and distnbution of the Preliminary Official Statement, and the preliminary public offering of the 1992 Bonds by the Purchaser is hereby ratified, approved and confirmed. (c) All officers of the City are authorized to execute such documents, certificates and rer,�ipts as they may deem appropriate in order to consummate the delivery of the 1992 Bonds in aca�rdance with the Purchase Contract. (d) The obligation of the Purchaser to accept delivery of the 1992 Bonds is subject to the Pui�chaser being furnished with the final, approving opinion of Hutchison Boyle Brooks &Fisher, A Prc�fessional Corporation, Bond Counsel for the City,which opinion shall be dated and delivered on the Closing Date. Section 8.02. Control and Delivery of Series 1992 Bonds. (a) The Director of Finance of the City is hereby authorized to have control of the Initial Bo»d and all necessary records and proceedings pertaining thereto pending investigation,examination anCl 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 Ag��nt/Registrar. (b) After registration by the Comptroller of Public Accounts, delivery of the 1992 Bonds • shall be made to the initial Purchaser under and subject to the general supervision and direction of the Director of Finance of the City, against receipt by the City of all amounts due to the City under the terms of sale. Section 8.03. Deposit of Proceeds. (a) All amounts received on the Closing Date as accrued interest on the 1992 Bonds from the Bond Date to the Closing Date shall be deposited to the Interest and Sinking Fund. (b) 510,086,676.44 shall be deposited to the Escrow Fund and applied in accordance with tenms of the Escrow Agreement. (c) 5106,000 shall be applied to the payment of the premium for a policy of municipal borid insurance with respect to the Bonds. (d) The sum of$110,702.11 shall be deposited as directed by the City and used to pay the costs and expenses pertaining to the issuance of the Bonds. To the extent any of such sums are not use.d for such purposes, such excess shall be deposited to the Interest and Sinking Fund. (� To the extent necessary to accomplish fully the purposes of this Ordinance, the Dir.ector of Finance is authorized to reallocate the funds directed to be used for the purposes �-.;,. spe:cified above. BAFI-HBBF.066-2 24 ARTTCLE IX PARTTCULAR REPRESENTATIONS AND COVENANTS � Section 9.01. Payment of Bonds. On or before February 28, 1993, and semiannually on or before the last day of February and August thereafter while any of the Bonds are outstanding, the City shall make available to the paying ag�nt therefor, in funds which will be immediately available on the next succeeding business day,out of�he Interest and Sinking Fund and the Reserve Fund, if necessary, money sufficient to pay such int�:rest on and such principal of the Series 1992 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 shall destroy all paid Bonds and shall furnish the City with an appropriate cert'ificate of caticellation or destruction. Section 9.02. Additional Parity Bonds. The City reseives 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 Series 1992 Bonds and the; Previously Issued Bonds, and the Series 1992 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 - aul:horizing the issuance of all then outstanding Bonds; (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 de�aosit therein; (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 twi;,lve 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 avf;rage annual principal and interest requirements for all 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 should be charged to capital expenditur�.s; (d) The Additional Bonds are scheduled to mature only on March 1 or September 1, and thf; interest thereon is scheduled to be paid on March 1 and September 1; and (e) The ordinance authorizing the issuance of such installment or series of Additional Be�nds provides that the aggregate amount to be accumulated in the Reserve Fund shall be increased to an amount eyual to the average annual principal and interest requirements of all Bonds to be BA13-HBBF.066-2 25 outstanding after the issuance of said Additional Bonds. Such additional amount shall be so acciumulated within sixty months from the date of the Additional Bonds. Section 9.03. Maintenance and Operation; Insurance. �. While any of the 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 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 9.04. Records: Accounts; Accounting Reports. (a) The City shall keep proper books of records and accounts, separate from all other reca�rds and accounts of the City, in which complete and correct entries shall be made of all tra»sactions relating to the System, and shall have said books audited once each fiscal year by a Ce��tified Public Accountant. The City agrees to operate the System and keep its books of records an�l accounts pertaining thereto on the basis of its current fiscal year;provided,however,that the City Co�uncil 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 fumish, wit:hout cost, to any holder of any outstanding Bonds who may so request, a signed or certi�ied 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 rcwenues 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 BAIi-HBBF.066-2 26 (viii) The total annual billings of the System, and the average monthly bills per customer. (c) Any holder or holders of any Bonds shall have the right at all reasonable tunes to �F` � inspect the System and all records, accounts and data of the City relating thereto. Section 9.05. Discharee. (a) Any 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 tl'xis Section, certi6ed by an independent public accounting firm of national reputation to mature as t�� principal and interest in such amounts and at such times as will insure the availability,without rein.vestment, of sufficient money to make such payment, and all necessary and proper fees, compensation and e�enses of such paying agent pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of such pay.ing agent. At such times as a 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 Re��enues, 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 invcsted in Government Obligations maturing in the amounts and times as hereinbefore set forth,and all income from all Govemment Obligations in the hands of the paying agent pursuant to this Section which is not required for the payment of the Bonds, and interest thereon,with respect to which such �� momey has been deposited, shall be delivered to the City or deposited as directed by the City. (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 Bonds to be treated as "arbitrage bor.ids"within the meaning of Section 148 of the Code. (d) That, for the purpose of this Section, the term "Govemment Obligations"shall mean dirt:ct 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 boc�k-entry form. Section 9.06. Bonds as Ne,gotiable Instruments. Each of the Series 1992 Bonds shall be deemed and construed to be an"Investment Security" and, as such, a negotiable instrument, within the meaning of Article 8 of the Texas Uniform Commercial Code. - Section 9.07. No-Arbitrage; Rebate. (a) The City hereby represents that the proceeds of the Series 1992 Bonds are needed � as this time to provide for proceeds of the Series 1992 Bonds are needed at this time to provide for anF�-xssF.or,�-z 27 the refunded of the Refunded Bonds; that it is not reasonably eapected that the proceeds of the Seties 1992 Bonds or money deposited in the Interest and Sinking Fund and the Reserve Fund will be used or invested in a manner that would cause the Bonds to be or become "arbitrage bonds," wit:tun the meaning of Section 148 of the Code; and that, except for the Interest and Sinking Fund, §p Revenue Fund, and the Reserve Fund, no other funds or accounts have been established or pledged to the payment of the Series 1992 Bonds. (b) The City will not take any action or fail to take any action with respect to the inv�estment of the proceeds of the Series 1992 Bonds or any other funds of the City, including am�unts received from the investment of any of the foregoing, that, based upon the facts, estimates and circumstances lcnown on the Closing Date, would result in constituting the Series 1992 Bonds "arbitrage bonds,"within the meaning of such Section 148 of the Code, and the City will not take any deliberate action motivated by arbitrage that would have such result. (c) Proper officers of the City charged with the responsibility of issuing the Series 1992 Bo;nds are hereby directed to make, execute and deliver certifications as to facts, estimates and circ:umstances in existence as of the Closing Date and stating whether there are any facts, estimates or �circumstances that would materially change the City's current expectations. (d) The City will comply with the provisions of Section 148(fj of the Code and the ap��licable United States Treasury regulations promulgated thereunder relating to paying certain excess eamings of investment of proceeds of the Series 1992 Bonds to the United States of America. (e) The City will not take any action or fail to take any action which would result in the . Bo:nds being treated as "private activity bonds," within the meaning of section 141(a) of the Code. (� The City will not take any action or fail to take any action which would result in the Bonds being treated as "federally guaranteed," within the meaning of section 149(b) of the Code. (g) The covenants and representations made or required by this Section are for the beiiefit of the Owners and may be relied upon by the Owners and bond counsel for the City. Section 9.08. 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 Series 1992 Bonds and has lawfully exercised said power under the Constitution and laws of the State of Texas; that the Series 1992 Bonds, Previously Issued Bonds and Additional Bonds, when issued, shall be rat:ably secured under such pledge in such manner that one Bond shall have no preference over any oth�er Bond of said issues. (b) That other than for the payment of the Previously Issued Bonds and the Series 1992 Bonds, Net Revenues of the System are not in any manner now pledged to the payment of any debt or��bligation 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 Bonds. n (c) So long as any Series 1992 Bonds, Previously Issued Bonds or Additional Bonds or an3�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 BAE�-HBBF.066-2 28 prol�'bit the sale of such machinery or other properties or equipment which has become obsolete or - othr,iwise 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 � age�cies or iustrumentalities make use of the services and facilities of the System, payment of the reaxonable value thereof shall be made by the City out of funds from sources other than the reveaues and income of the System. (e) That it will comply with all of the terms and conditions of any and all franchises, penmits 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, eyuipment, operation and maintenance of the System. (� That it will not grant any franchise or permit the acquisition,construction or operation of a�ny competing facilities which might be used as a substitute for the System's facilities, and,to the extt;nt that it legally may, the City will prohibit any such competing facilities. Section 9.09. Amendments. (a) The City acknowledges that the covenants and obligations of the City herein contained are a material inducement to the purchase of the Series 1992 Bonds. This Ordinance shall constitute a a�ntract with the Ovmers of any Series 1992 Bond from tim�to time, shall be binding on the City, and. shall not be amended or repealed by the City so long as any Series 1992 Bond remains outstanding, except as permitted in this Section. (b) The City may, without the consent of or notice to any Owners of Series 1992 Bond, fro�n time to time and at any time, amend this Ordinance in any manner not detrimental to the � inte:rests of the Owners of any Series 1992 Bonds, including the curing of any ambiguity, inG�nsistency, or formal defect or omission herein. (c) In addition, the City may, with the written consent of Ovmers of Series 1992 Bonds ovv�iing a majority in aggregate principal amount of the Series 1992 Bonds then outstanding and affe;cted thereby, amend, add to or rescind any of the provisions of this Ordinance; provided that, wit;hout the consent of all Owners of outstanding Series 1992 Bonds, no such amendment, addition or :rescission shall (i) extend the time or times of payment of the principal of, premium, if any, and intt;rest on the Series 1992 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 pri��cipal of, premium, if any, or interest on the Series 1992 Bonds, (ii) give any preference to any Seiies 1992 Bond over any other Series 1992 Bond, or (iii) reduce the aggregate principal amount of;�eries 1992 Bonds required for consent to any such amendment, addition or rescission. ARTTCLE X DEFAULT AND REMEDIES � � Section 10.01. 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 BAEt-HBBF.066-2 29 madle to the Interest and Sinking Fund and Reserve Fund as required by this Ordinance or (u) �� def�iults in the observance or performance of any other of the covenants, conditions or obligations set 1Eorth in this Ordinance, the Owner of any 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 ofte.n as may be deemed expedient. The specific remedies herein provided shall be cumulative of all oth�;r e�sting 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 Series 1992 Bonds shall not be available as a remedy under this Ordinance. ARTICLE XI EMERGENCY Section 11.01. Emer�encv. The public importance of this Ordinance and the fact that it is to the best interest of the City to ��rovide 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 pub�lic peace, property, health and safety of the citizens of the City requiring that this Ordinance be pas;sed and take effect as an emergency measure, and it is accordingly ordained that this Ordinance aha:ll be in full force and effect from and after its passage in accordance with the Charter of the City. ARTTCLE XII ESCROW AGREEMENT; REDEMPTION OF REFUNDED BONDS Section 12.01. Approval of Escrow A�reement. The Escrow Agreement in substantially the form presented at the meeting at which this Orciinance is adopted, and its execution and delivery by the Mayor of the City, are hereby authorized andl approved. The signature of the Mayor shall be attested by the City Secretary. Section 12.02. Purchase of Securities for Escrow Fund. The Mayor and the Director of Finance are authorized to execute subscriptions for the purpose of such United States Treasury Securities - State and Local Govemment Series, as may be neressary for the Escrow Fund. In addition to or in lieu of such securities,the City may use proceeds of the sale of the Bonds to purchase for investment in the Escrow fund such obligations of the United States of America, or any of its agencies, or such obligations fully guaranteed by the United States of America, that will be appropriate open market investments for the Escrow Fund. BAB-HBBF.066-2 30 =w Section 12.03. Redemption of Refunded Bonds. (a) The Refunded Bonds described on Schedule I are hereby called for redemption prior to t6eir maturity on the respective dates and at the prices set forth in Schedule I. , (b) The City Secretary is hereby directed to notify the respective paying agents for the Refunded Bonds of such redemption in accordance with the respective ordinanc,es authorizing the issuance of the Refunded Bonds. The respective paying agents for the Refunded Bonds are hereby autl�orized and directed to give notice of such redemption to the owners thereof pursuant to such ordinances authorizing the issuance thereof. ARTICLE XIII FINANCIAL GUA►RANTY INSURANCE POLICY Section 13.01. Terms While Bonds Insured. So long as the financial guaranty insurance policy (th�;"Policy") issued by Municipal Bond Investors Assurance Corporation ("MBIA") is in effect with res��ect to the Series 1992 Bonds, the terms and provisions of this Article XIII shall apply thereto. Section 13.02. Notice to MBIA. A copy of any notice required to be given to any party hereunder shall be sent to MBIA. Section 13.03. Notice Regardin� Amendments. Written notice of any amendment to this Orciinance pursuant to Section 9.09(b) hereof shall be given to MBIA within ten (10) days of the effExtive date of such amendment. Section 13.04. Consent to Amendments. No amendment to this Ordinance pursuant to ° Section 9.04(c) hereof shall become effective without the written consent of MBIA Section 13.05. Right to Consent In Event of Default. In the event of default pursuant to Ser.tion 10.01(a) hereof, MBIA shall have the right to consent to any action taken or to be taken by the Owners, the Paying Agent/Registrar or any trustee or receiver with respect thereto. MBIA shall have the same rights as any trustee or the Owners to pursue any legal remedies with respect to any def ault. Section 13.06. Annroval of Acceleration. Any acceleration of principal payments,other than the right of the City to optionally redeem Series 1992 Bonds pursuant to Article IV hereof, must be apF�roved in advance by MBIA. �:. ,. BAB-H�BBF.066-2 31 FINALLY ADOPTED, APPROVED AND EFFECTIVE this 18th day of ��` August, 1992 . � William D. Tate Mayor ATTEST: L�ind Huf f City Secretary APPROVED AS TO FORM: �� John F. Boyle, Jr. �•.-� City Attorney ' �� ��:;� rrIINUTES AND CERTTFICATION PERTAINING TO PASSAGE OF AN ORDINANCE � ' TI�E STATE OF TEXAS § CO�UNITES OF TARRANT AND DALLAS § . �..� CIT'Y OF GRAPEVINE § On this the 18th day of September, 1992, the City Council of the City of Grapevine, Texas, conwened in Regular Session at the regular meeting place thereof, the meeting being open to the pubiic and notice of said meeting, giving the date, place and subject thereof, having been posted as pr�cribed by Article 6252-17, V.A.T.C.S., and the roll was called of the duly constituted officers and members of the City Council, which officers and members are as follows: William D. Tate Mayor Ted R. Ware Mayor Pro Tem C. Shane Wilbanks Councilmember Sharron Spencer Councilmember Will Wickman Councilmember Jerry Pittman Councilmember Gil Traverse Councilmember and all of said persons were present, except the following absentees: None thus constituting a quorum. Whereupon, among othe:r business, a written Ordinance bearing the following caption was intrc�d�aced: AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CTTY OF GRAPEVINE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE � REFUNDING BONDS, SERIES 1992, IN THE AGGREGATE PRINCIPAL AMOUNT OF$10,435,000;APPROVING A PURCHASE CONTRAGT AND AN ESCROW AGREEMENT IN CONNECTTON THEREWITH; MAKII�IG PROVISION FOR THE PAYMENT AND SECURITY OF SUCH OBLIGATIONS; ENACTING PROVISIONS INCIDENT AND RFLATED TO THE PURPOSES AND SUBJECT OF THIS ORDINANCE;AN`� DECLARING AN EMERGENCY The Ordinance, a full, true and correct copy of which is attached hereto, was read and reviE:wed by the City Council. Thereupon, it was duly moved and seconded that the ordinance b� �����r�d a� e������c3r mea�sure and that the charter rule prohibiting the passage of an ordinance d�fh�s�,��dla�o���a.�h it w��s introduced be suspended. The Presiding Officer put the motion to a��;�� cs���� �?��b�x� �� the ��ity Council, and the motion was carried by the following vote: AYES: Tate, Ware, Spencer, Wilbanks, Traverse, Pittman & Wickman NOES: None ABSTENTTONS: None BAB-}IBBF.082-2 Thereupon, it was duly moved and seconded that the Ordinance be £inally passed and � � adopted. The Presiding Officer put the motion to a vote of the members of the City Council, and the Ordinance was finally passed and adopted by the following vote: � °� AY�� Tate, Ware, Spencer, Wilbnks, Traverse, Pittman & Wickman NOES: None ABSTENTIONS: None The Presiding Officer then declared the Ordinance passed and approved,and signed the same in ttie presence of the City Council. I��Q�tUTES APPROVED AND CERTTFTED TO BE TRUE AND CORRECT, and to correctly reflect the duly constituted officers and members of the City Council of said City, and the atta�:hed and following copy of said Ordinance is hereby certified to be a true and correct copy of an offic:ial copy thereof on file among the official records of the City, all on this the 18th day of August, 199:�. Mayor, Ciry of Grapevine, Texas AT.'CEST: C�i� - � ,_:;: Q- City Secretary, City rapevine, Texas [SE.AL] BAS-HBBF.082-2 -2- SCHEDULEI Refunded Bonds ��, .. � The following series of City of Grapevine, Texas Waten�vorks and Sewer System Revenue Bonds(coUectively,the"Refunded Bonds") are to be refunded and redeemed in the amounts and on the dates set forth below, at a price equal to the par amount thereof, except as otherwise indicated, plus interest accrued to the redemption date: Maturities Principal Refunded Amount to Redemption eS�r'es �vears inclusivel Be Refunded Date 198:5 1996-2000�'� 54,235,000�'� 9-1-95 19&3 1999-2010 4,910,000 9-i-98 �l� 1996 $ 705,000 1997 770,000 1998 840,000 1999 920,000 2000 1,��� BAFt-HBBF.066-2