The URL can be used to link to this page

Home My WebLink AboutItem 06 - Public Property Finance Contractural ObligationsITEM # MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: BRUNO RUMBELOW, CITY MANAGER ,4� MEETING DATE: DECEMBER 4, 2012 SUBJECT: CONSIDER ORDINANCES PROVIDING FOR THE ISSUANCE OF APPROXIMATELY $8,060,000 CITY OF GRAPEVINE, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2012 AND PROVIDING FOR THE ISSUANCE OF $1,225,000 CITY OF GRAPEVINE, TEXAS, PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS, SERIES 2012 RECOMMENDATION: City Council to consider two ordinances providing for the issuance of General Obligation Refunding Bonds, Series 2012 and providing for the issuance of Public Property Finance Contractual Obligations, Series 2012. BACKGROUND: The bond ordinances allow for two separate debt issuances. The first is a General Obligation Refunding Bond, Series 2012, which will be used to refund a portion of the current outstanding debt. A total of approximately $8,060,000 in principal will be issued. The second is the issuance of Contractual Obligations in the amount of $1,225,000. The principal it be used for the acquisition of a fire truck. Staff recommends the sale and compliance of both debt issuances. ORDINANCE NO. AUTHORIZING THE ISSUANCE OF CITY OF GRAPEVINE, TEXAS PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS SERIES 2012 Adopted: December 4,2012 #4202522.1 i�lllpi �iu �mmulw f JLAfn- 9 •'' TABLE OF CONTENTS Page ARTICLE DEFINITIONS AND OTHER PRELIMINARY MATTERS Section1.01. Definitions .................................................................................. ..............................1 Section1.02. Findings ...................................................................................... ..............................3 Section 1.03. Table of Contents, Titles and Headings ..................................... ..............................3 Section 1.04. Interpretation .............................................................................. ..............................3 ARTICLE II SECURITY FOR THE CONTRACTUAL OBLIGATIONS Section2.01. Tax Levy .................................................................................... ..............................4 ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE CONTRACTUAL OBLIGATIONS Section 3.01. Authorization ................................................................................ Section 3.02. Date, Denomination, Maturities, Numbers and Interest ............ ..............................5 Section 3.03. Medium, Method and Place of Payment; Unclaimed Payments ..............................6 Optional Redemption ................................................................ .............................13 Section 3.04. Execution and Initial Registration ............................................. ..............................7 Partial Redemption .................................................................... .............................13 Section3.05. Ownership .................................................................................. ..............................7 Notice of Redemption to Owners ............................................. .............................14 Section 3.06. Registration, Transfer and Exchange ......................................... ..............................8 Payment Upon Redemption ...................................................... .............................14 Section 3.07. Cancellation and Authentication ................................................ ..............................9 Effect of Redemption ................................................................ .............................14 Section 3.08. Temporary Contractual Obligations ......................................... .............................10 Conditional Notice of Redemption ........................................... .............................15 Section 3.09. Replacement Contractual Obligations ...................................... .............................10 Section 3.10. Book -Entry -Only System .......................................................... .............................11 Section 3.11. Successor Securities Depository; Transfer Outside Book -Entry -Only System ..... 12 Section 3.12. Payments to Cede & Co ............................................................ .............................13 ARTICLE IV REDEMPTION OF CONTRACTUAL OBLIGATIONS BEFORE MATURITY Section 4.01. Limitation on Redemption ........................................................ .............................13 Section 4.02. Optional Redemption ................................................................ .............................13 Section 4.03. Partial Redemption .................................................................... .............................13 Section 4.04. Notice of Redemption to Owners ............................................. .............................14 Section 4.05. Payment Upon Redemption ...................................................... .............................14 Section 4.06. Effect of Redemption ................................................................ .............................14 Section 4.07. Conditional Notice of Redemption ........................................... .............................15 (i} #4202522.1 I mu, V�pN ARTICLE V PAYING AGENT/REGISTRAR Section 5.01. Appointment of Initial Paying Agent / Registrar ........................ Section5.02. Qualifications ............................................................................ .............................15 Section 5.03. Maintaining Paying Agent/Registrar ........................................ .............................15 Section5.04. Termination ............................................................................... .............................16 Section 5.05. Notice of Change to Owners ..................................................... .............................16 Section 5.06. Agreement to Perform Duties and Functions ............................ .............................16 Section 5.07. Delivery of Records to Successor ............................................. .............................16 ARTICLE VI FORM OF THE CONTRACTUAL OBLIGATIONS Section6.01. Form Generally ......................................................................... .............................16 Section 6.02. Form of Contractual Obligations .............................................. .............................17 Section 6.03. CUSIP Registration ................................................................... .............................22 Section6.04. Legal Opinion ........................................................................... .............................23 Section 6.05. Municipal Bond Insurance ........................................................ .............................23 ARTICLE VII CREATION OF FUNDS AND ACCOUNTS; INITIAL DEPOSITS AND APPLICATION OF MONEY Section 7.01. Creation of Funds ...................................................................... .............................23 Section 7.02. Initial Deposits .......................................................................... .............................23 Section 7.03. Interest and Sinking Fund ......................................................... .............................23 Section 7.04. Acquisition Fund ....................................................................... .............................24 Section 7.05. Excess Contractual Obligation Proceeds .................................. .............................24 Section 7.06. Security of Funds ...................................................................... .............................24 ARTICLE VIII INVESTMENTS Section 8.01. Investments ............................................................................... .............................24 Section 8.02. Investment Income .................................................................... .............................24 ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01. Payment of the Contractual Obligations ................................... .............................24 Section 9.02. Other Representations and Covenants ...................................... .............................25 Section 9.03. Federal Income Tax Exclusion ................................................. .............................25 #4202522.1 DRAFT ARTICLE X DEFAULT AND REMEDIES Section 10.01. Events of Default ...................................................................... .............................27 Section 10.02. Remedies for Default ................................................................ .............................28 Section 10.03. Remedies Not Exclusive ........................................................... .............................28 ARTICLE XI DISCHARGE Section11 . O 1. Discharge .................................................................................. .............................28 ARTICLE XII SALE AND DELIVERY OF THE CONTRACTUAL OBLIGATIONS; APPROVAL OF OFFICIAL STATEMENT; CONTROL AND DELIVERY OF CONTRACTUAL OBLIGATIONS Section 12.01. Sale of Contractual Obligations; Official Statement ................ .............................28 Section 12.02. Control and Delivery of Contractual Obligations ..................... .............................29 ARTICLE XIII CONTINUING DISCLOSURE UNDERTAKING Section 13.01. Annual Reports ......................................................................... .............................30 Section 13.02. Disclosure Event Notices .......................................................... .............................30 Section 13.03. Limitations, Disclaimers and Amendments .............................. .............................31 ARTICLE XIV AMENDMENTS; ATTORNEY GENERAL MODIFICATION Section14.01. Amendments ............................................................................. .............................33 ARTICLE XV MISCELLANEOUS MATTERS Section 15.01. Attorney General Modification ................................................. .............................33 Section 15.02. Partial Invalidity ........................................................................ .............................33 Section 15.03. No Personal Liability ................................................................ .............................33 #14202522.1 ARTICLE XVI EFFECTIVE IMMEDIATELY Section 16.01. Effectiveness ............................................................................. .............................34 EXHIBIT A - Description of Annual Disclosure of Financial Information (iv) #4202522. i DRAFIr ORDINANCE AN ORDINANCE PROVIDING FOR THE ISSUANCE OF $1,225,000 CITY OF GRAPEVINE, TEXAS, PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS, SERIES 2012; AWARDING THE SALE OF THE CONTRACTUAL OBLIGATIONS; LEVYING A TAX IN PAYMENT THEREOF; AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING AGENT /REGISTRAR AGREEMENT; APPROVING THE OFFICIAL STATEMENT; AND ENACTING PROVISIONS INCIDENT AND RELATING TO THE SUBJECT AND PURPOSES OF THIS ORDINANCE WHEREAS, the Public Property Finance Act, Texas Local Government Code, as amended, Subchapter A, Chapter 271 (the "Act "), authorizes cities to execute, perform, and make payments under contracts with any person for the use, acquisition or purchase of personal property as described in the Act; WHEREAS, the governing body (the "City Council ") of the City of Grapevine, Texas (the "City ") has found and determined that it is necessary, useful and appropriate for its public purposes to acquire or purchase a fire truck and fire equipment (the "Property "); WHEREAS, the Property will be used for authorized public purposes of the City, will be acquired in compliance with applicable laws relating to competitive bidding, and will not be attached or affixed to real property or any building thereon in any manner that would cause the Property to be considered real property or a fixture to real property under applicable state law, and shall remain personal property of a type and character authorized to be acquired by the City under the Act; WHEREAS, the City Council has found and deems it necessary, useful and appropriate for its public purposes to acquire the Property and to adopt this Ordinance and authorize the issuance of the Contractual Obligations herein authorized as permitted by the Act; WHEREAS, the meeting at which this Ordinance is considered is open to the public as required by law, and public notice of the time, place and purpose of said meeting was given as required by Chapter 551, Texas Government Code, as amended; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS: ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS 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: "Acquisition Fund" means the acquisition fund established by Section 7.01(b). #4202522.1 FI-T "Business Day" means a day that is not a Saturday, Sunday, legal holiday or other day on which banking institutions in the city where the Designated Payment/Transfer Office is located are required or authorized by law or executive order to close. "Charter" means the Home Rule Charter of the City, as amended. "Closing Date" means the date of the initial delivery of and payment for the Contractual Obligations. "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings and court decisions relating thereto. "Contractual Obligation" means any of the Contractual Obligations. "Contractual Obligations" means the City's contractual obligations entitled "City of Grapevine, Texas, Public Property Finance Contractual Obligations, Series 2012" authorized to be issued by Section 3.01 of this Ordinance. "Designated Payment/Transfer Office" means (i) with respect to the initial Paying Agent/Registrar named herein, its corporate trust office in Grapevine, Texas, and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the City and such successor. "DTC" means The Depository Trust Company of New York, New York, or any successor securities depository. "DTC Participant" means 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. "EMMA" means the Electronic Municipal Market Access System. "Event of Default" means any Event of Default as defined in Section 10.01 of this Ordinance. "Fiscal Year" means such fiscal year as shall be prescribed by the Charter and which under the existing Charter commences October 1 and ends September 30 of the following year. "Initial Contractual Obligation" means the Initial Contractual Obligation described in Section 3.04(d) and Section 6.02(d) of this Ordinance. "Interest and Sinking Fund" means the interest and sinking fund established by Section 7.01(a) of this Ordinance. "Interest Payment Date" means the date or dates upon which interest on the Contractual Obligations is scheduled to be paid until the maturity of the Contractual Obligations, such dates being February 15 and August 15 of each year, commencing on February 15, 2013. 2 #4202522.1 �51" )k 11 FT "MSRB" means the Municipal Securities Rulemaking Board. "Original Issue Date" means the date designated as such in Section 3.02(a) of this Ordinance. "Owner" means the person who is the registered owner of a Contractual Obligation or Contractual Obligations, as shown in the Register. "Paying Agent/Registrar" means The Bank of New York Mellon Trust Company, National Association, any successor thereto or any entity which is appointed as and assumes the duties of paying agent/registrar as provided in this Ordinance. "Property" means a fire truck and fire equipment. "Record Date" means the last Business Day of the month next preceding an Interest Payment Date. "Register" means the Register specified in Section 3.06(a) of this Ordinance. "Representation Letter" means the Blanket Letter of Representations between the City and DTC. "Rule" means SEC Rule 15c2 -12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "Special Payment Date" means the Special Payment Date prescribed by Section 3.03(b). "Special Record Date" means the Special Record Date prescribed by Section 3.03(b). "Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the payment of principal of or interest on the Contractual Obligations as the same come due and payable and remaining unclaimed by the Owners of such Contractual Obligations for 90 days after the applicable payment or redemption date. Section 1.02. Findings. The declarations, determinations and findings declared, made and found in the preamble to this Ordinance are hereby adopted, restated and made a part of the operative provisions hereof. Section 1.03. Table of Contents, Titles and Headings. 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 3 #4202522.1 IT genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. O This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of this Ordinance. (c) Article and section references shall mean references to articles and sections of this Ordinance unless designated otherwise. ARTICLE II SECURITY FOR THE CONTRACTUAL OBLIGATIONS Section 2.01. Tax Levy. (a) Pursuant to the authority granted by the Texas Constitution and the laws of the State of Texas, there shall be levied and there is hereby levied for the current year and for each succeeding year hereafter while any of the Contractual Obligations or any interest thereon is outstanding and unpaid, an ad valorem tax on each one hundred dollars valuation of taxable property within the City, at a rate sufficient, within the limit prescribed by law, to pay the debt service requirements of the Contractual Obligations, being (i) the interest on the Contractual Obligations, and (ii) a sinking fund for their redemption at maturity or a sinking fund of two percent (2 %) per annum (whichever amount is greater), when due and payable, full allowance being made for delinquencies and costs of collection. (b) The ad valorem tax thus levied shall be assessed and collected each year against all property appearing on the tax rolls of the City most recently approved in accordance with law and the money thus collected shall be deposited as collected to the Interest and Sinking Fund. (c) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and committed irrevocably to the payment of the principal of and interest on the Contractual Obligations when and as due and payable in accordance with their terms and this Ordinance. (d) If the lien and provisions of this Ordinance shall be released in a manner permitted by Article XI hereof, then the collection of such ad valorem tax may be suspended or appropriately reduced, as the facts may permit, and further deposits to the Interest and Sinking Fund may be suspended or appropriately reduced, as the facts may permit. In determining the aggregate principal amount of outstanding Contractual Obligations, there shall be subtracted the amount of any Contractual Obligations that have been duly called for redemption and for which money has been deposited with the Paying Agent/Registrar for such redemption. 4 #4202522.1 ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE CONTRACTUAL OBLIGATIONS Section 3.01. Authorization. The City's contractual obligations to be designated "City of Grapevine, Texas, Public Property Finance Contractual Obligations, Series 2012," are hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State of Texas, specifically Subchapter A, Chapter 271, Texas Local Government Code, as amended, and the Charter of the City. The Contractual Obligations shall be issued in the aggregate principal amount of $ ' for the public purpose of (i) paying all or a portion of the City's contractual obligations to be incurred in connection with the acquisition or purchase of the Property, including vendor implementation and installation, and (ii) paying costs related to the issuance of the Contractual Obligations, all as set forth in the preamble hereof, under and by virtue of the Act and pursuant to the Charter of the City. Section 3.02. Date, Denomination, Maturities, Numbers and Interest. (a) The Contractual Obligations shall be dated December 1, 2012 (the "Dated Date "), shall be in fully registered form, without coupons, in the denomination of $5,000 or any integral multiple thereof, and shall be numbered separately from one upward or such other designation acceptable to the City and the Paying Agent/Registrar, except the Initial Contractual Obligation, which shall be numbered T -1. (b) The Contractual Obligations shall mature on February 15 in the years, at the interest rates and in the principal amounts set forth in the following schedule (c) Interest on each Contractual Obligation shall accrue from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid or provided for at the per annum rates of interest specified in the schedule contained in subsection (b) above. Such interest shall be payable on each Interest Payment Date until the principal amount shall have been paid or provision for such payment shall have been made, and shall be computed on the basis of a 360 -day year of twelve 30 -day months. #4202522.1 Principal Interest Principal Interest Year Amount Rate Year Amount Rate 2013 $ 25,000 2021 $ 85,000 2014 70,000 2022 90,000 2015 75,000 2023 90,000 2016 75,000 2024 95,000 2017 80,000 2025 95,000 2018 80,000 2026 100,000 2019 80,000 2027 100,000 2020 85,000 (c) Interest on each Contractual Obligation shall accrue from the later of the Dated Date or the most recent Interest Payment Date to which interest has been paid or provided for at the per annum rates of interest specified in the schedule contained in subsection (b) above. Such interest shall be payable on each Interest Payment Date until the principal amount shall have been paid or provision for such payment shall have been made, and shall be computed on the basis of a 360 -day year of twelve 30 -day months. #4202522.1 AAF, Section 3.03. Medium Method and Place of Payment; Unclaimed Pa ents. (a) The principal of and interest on the Contractual Obligations shall be paid in lawful money of the United States of America. (b) Interest on the Contractual Obligations shall be payable to the Owners whose names appear in the Register at the close of business on the Record Date; provided, however, in the event of nonpayment of interest on a scheduled Interest Payment Date and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date ") shall be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the "Special Payment Date," which shall be 15 days after the Special Record Date) shall be sent at least five Business Days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Owner of a Contractual Obligation appearing on the Register at the close of business on the last Business Day next preceding the date of mailing of such notice. (c) Interest on the Contractual Obligations shall be paid by check (dated as of the Interest Payment Date) and sent by the Paying Agent/Registrar to the person entitled to such payment, first class United States mail, postage prepaid, to the address of such person as it appears in the Register or by such other customary banking arrangements 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 other customary banking arrangements. At the option of an Owner of at least $1,000,000 principal amount of the Contractual Obligations, interest may be paid by wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar. (d) The principal of each Contractual Obligation shall be paid to the person in whose name such Contractual Obligation is registered on the due date thereof upon presentation and surrender of such Contractual Obligation at the Designated Payment/Transfer Office. (e) If the date for the payment of the principal of or interest on any Contractual Obligations is a Saturday, Sunday, legal holiday, or a day on which banking institutions in the city where the Designated Payment/Transfer Office is located are 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 such banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. (f) 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 Contractual Obligations to which the Unclaimed Payments pertain. Subject to the provisions of Title 6, Texas Property Code, as amended, Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment date shall be applied to the next payment or payments on the Contractual Obligations thereafter coming due and, to the extent any such money remains after the retirement of all outstanding Contractual Obligations, 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 Owners of such 6 #4202522.1 ZIA Contractual Obligations for any further payment of such unclaimed moneys or on account of any such Contractual Obligations, subject to any applicable escheat law or similar law. Section 3.04. Execution and Initial Registration. (a) The Contractual Obligations shall be executed on behalf of the City by the Mayor and countersigned by the City Secretary and the City Manager, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Any facsimile signatures on the Contractual Obligations shall have the same effect as if each of the Contractual Obligations had been signed manually and in person by each of said officers, and such facsimile seal on the Contractual Obligations shall have the same effect as if the official seal of the City had been manually impressed upon each of the Contractual Obligations. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Contractual Obligations ceases to be such officer before the authentication of such Contractual Obligations or before the delivery thereof, such manual or 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 Contractual Obligation shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided in this Ordinance, duly authenticated by manual execution of the Paying Agent/Registrar. It shall not be required that the same authorized representative of the Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on all of the Contractual Obligations. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Contractual Obligation delivered on the Closing Date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided in this Ordinance, manually executed by the Comptroller of Public Accounts of the State of Texas or by his duly authorized agent, which certificate shall be evidence that the Initial Contractual Obligation has been duly approved by the Attorney General of the State of Texas and that it is a valid and binding obligation of the City, and has been registered by the Comptroller. (d) On the Closing Date, a single typewritten Contractual Obligation (the "Initial Contractual Obligation ") representing the entire principal amount of the Contractual Obligations, payable in stated installments to the Representative or its designee, executed by manual or facsimile signature of the Mayor and countersigned by the manual or facsimile signatures of the City Secretary and the City Manager, approved by the Attorney General, and registered and manually signed by the Comptroller of Public Accounts, will be delivered to the Representative or its designee. Upon payment for the Initial Contractual Obligation, the Paying Agent/Registrar shall cancel the Initial Contractual Obligation and deliver to DTC on behalf of the Representative registered definitive Contractual Obligations as described in Section 3.10(a). To the extent the Paying Agent/Registrar is eligible to participate in DTC's FAST System, as evidenced by agreement between the Paying Agent/Registrar and DTC, the Paying Agent/Registrar shall hold the definitive Contractual Obligations in safekeeping for DTC. Section 3.05. Ownership. (a) The City, the Paying Agent/Registrar and any other person may treat the person in whose name any Contractual Obligation is registered as the 7 #4202522,1 unix,l "i'a absolute owner of such Contractual Obligation for the purpose of making and receiving payment of the principal thereof, for the further purpose of making and receiving payment of the interest thereon (subject to the provisions herein that interest is to be paid to the person in whose name the Contractual Obligation is registered on the Record Date or on the Special Record Date, as applicable), and for all other purposes, whether or not such Contractual Obligation 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 person deemed to be the Owner of any Contractual Obligation in accordance with this Section shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Contractual Obligation to the extent of the sums paid. Section 3.06. Registration, Transfer and Exchange. (a) So long as any Contractual Obligations remain outstanding, the City shall cause the Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the "Register ") in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Contractual Obligations in accordance with this Ordinance. (b) Registration of any Contractual Obligation may be transferred in the Register only upon the presentation and surrender thereof at the Designated Payment/Transfer Office for transfer of registration and cancellation, together with proper written instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of the Contractual Obligations, or any portion thereof in any integral multiple of $5,000 for any one maturity, to the assignee or assignees thereof, and the right of such assignee or assignees thereof to have the Contractual Obligation or any portion thereof registered in the name of such assignee or assignees. No transfer of any Contractual Obligation shall be effective until entered in the Register. Upon assignment and transfer of any Contractual Obligation or portion thereof, a new Contractual Obligation or Contractual Obligations will be issued by the Paying Agent/Registrar in exchange for such transferred and assigned Contractual Obligation. To the extent possible, the Paying Agent/Registrar will issue such new Contractual Obligation or Contractual Obligations within not more than three (3) Business Days after receipt of the Contractual Obligation to be transferred in proper form and with proper instructions directing such transfer. (c) Any Contractual Obligation may be exchanged only upon the presentation and surrender thereof at the Designated Payment/Transfer Office, together with a written request therefor duly executed by the Owner or assignee or assignees thereof, or its or their duly authorized attorneys or representatives, with guarantees of signatures satisfactory to the Paying Agent/Registrar, for a Contractual Obligation or Contractual Obligations of the same maturity and interest rate and in any authorized denomination and in an aggregate principal amount equal to the unpaid principal amount of the Contractual Obligation presented for exchange. To the extent possible, a new Contractual Obligation or Contractual Obligations shall be delivered by the Paying Agent/Registrar to the Owner of the Contractual Obligation or Contractual Obligations within not more than three Business Days after receipt of the Contractual Obligation to be exchanged in proper form and with proper instructions directing such exchange. 8 #4202522.1 ' ; R �`T , i8 �W, t�� h 9`4 (d) Each Contractual Obligation issued in exchange for any Contractual Obligation or portion thereof assigned or transferred shall have the same principal maturity date and shall bear interest at the same rate as the Contractual Obligation for which it is being exchanged. Each substitute Contractual Obligation shall bear a letter and/or number to distinguish it from each other Contractual Obligation. The Paying Agent/Registrar shall exchange the Contractual Obligations as provided herein, and each substitute Contractual Obligation delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Contractual Obligation or Contractual Obligations in lieu of which such substitute Contractual Obligation or Contractual Obligations are delivered. (e) The City will pay the Paying Agent/Registrar's reasonable and customary charge for the initial registration or any subsequent transfer or exchange of Contractual Obligations, but the Paying Agent/Registrar will require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer or exchange of a Contractual Obligation. In addition, the City hereby covenants with the Owners of the Contractual Obligations that it will (i) pay the reasonable and standard or customary fees and charges of the Paying Agent /Registrar for its services with respect to the payment of the principal of and interest on the Contractual Obligations, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for serzces with respect to the transfer, registration and exchange of Contractual Obligations as provided herein. Section 3.07. Cancellation and Authentication. (a) All Contractual Obligations paid in accordance with this Ordinance, and all Contractual Obligations in lieu of which exchange Contractual Obligations or replacement Contractual Obligations are authenticated and delivered in accordance with this Ordinance, shall be canceled upon the making of proper records regarding such payment, exchange or replacement. Canceled Contractual Obligations shall be disposed of in accordance with the requirements of the Securities and Exchange Act of 1934 and the regulations promulgated thereunder. (b) Each substitute Contractual Obligation issued pursuant to the provisions of Sections 3.06 and 3.09 of this Ordinance, in exchange for or replacement of any Contractual Obligation or Contractual Obligations issued under this Ordinance shall have printed thereon a Paying Agent/Registrar's Certificate, in the form hereinafter set forth. An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Contractual Obligation, manually sign and date such Certificate, and no such Contractual Obligation shall be deemed to be issued or outstanding unless such Certificate is so executed. No additional ordinances, orders, or resolutions need be passed or adopted by the City Council or any other body or person so as to accomplish the foregoing exchange or replacement of any Contractual Obligation or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Contractual Obligations in the manner prescribed herein, and said Contractual Obligations shall be of customary type and composition and printed, typewritten, lithographed, mimeographed or otherwise produced. Pursuant to Chapter 1206, Texas Government Code, the duty of exchange or replacement of Contractual Obligations as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of the above Paying Agent/Registrar's Authentication Certificate, the exchanged or replaced Contractual Obligations shall be valid, incontestable, and enforceable in the same manner and 9 #4202522.1 DRAFT with the same effect as the Initial Contractual Obligation which was originally delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. (c) Contractual Obligations issued in exchange or replacement of any other Contractual Obligation or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Contractual Obligations to be payable only to the registered owners thereof, (ii) may be transferred and assigned, (iii) may be exchanged for other Contractual Obligations, (iv) shall have the characteristics, (v) shall be signed and sealed, and (vi) shall be payable as to principal and interest, all as provided, and in the manner required or indicated, in the Form of Contractual Obligation set forth in this Ordinance. Section 3.08. " Jemporary Contractual Obligations. (a) Following the delivery and registration of the Initial Contractual Obligation and pending the preparation of definitive Contractual Obligations, the proper officers of the City may execute and, upon the City's request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Contractual Obligations that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Contractual Obligations 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 Contractual Obligations may determine, as evidenced by their signing of such temporary Contractual Obligations. (b) Until exchanged for Contractual Obligations in definitive form, such Contractual Obligations in temporary form shall be entitled to the benefit and security of this Ordinance. (c) The City, without unreasonable delay, shall prepare, execute and deliver to the Paying Agent/Registrar the Contractual Obligations in definitive form; thereupon, upon the presentation and surrender of the Contractual Obligation or Contractual Obligations in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall cancel the Contractual Obligations in temporary form and authenticate and deliver in exchange therefor a Contractual Obligation or Contractual Obligations of the same maturity and series, in definitive form, in the authorized denomination, and in the same aggregate principal amount, as the Contractual Obligation or Contractual Obligations in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. Section 3.09. Replacement Contractual Obligations. (a) Upon the presentation and surrender to the Paying Agent/Registrar, at the Designated Payment/Transfer Office, of a mutilated Contractual Obligation, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Contractual Obligation of like tenor and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such Contractual Obligation to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. 10 #4202522.1 � �Jtk (b) In the event that any Contractual Obligation is lost, apparently destroyed or wrongfully taken, the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Contractual Obligation has been acquired by a bona fide purchaser, shall authenticate and deliver a replacement Contractual Obligation of like tenor and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner first: (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 Contractual Obligation; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar and the City to save them 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) If, after the delivery of such replacement Contractual Obligation, a bona fide purchaser of the original additional Contractual Obligation in lieu of which such replacement Contractual Obligation was issued presents for payment such original Contractual Obligation, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Contractual Obligation from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the 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 wrongfully taken Contractual Obligation has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, without the necessity of issuing a replacement Contractual Obligation, may pay such Contractual Obligation on the date on which such Contractual Obligation becomes due and payable. (e) Each replacement Contractual Obligation delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Contractual Obligation or Contractual Obligations in lieu of which such replacement Contractual Obligation is delivered. Section 3.10. Book - Entry -Only System. (a) The definitive Contractual Obligations shall be initially issued in the form of a separate single fully registered Contractual Obligation for each of the maturities thereof. Upon initial issuance, the ownership of each such Contractual Obligation shall be registered in the name of Cede & Co., as nominee of DTC, and except as provided in Section 3.11 hereof, all of the outstanding Contractual Obligations shall be registered in the name of Cede & Co., as nominee of DTC. 11 #14202522. l • (b) With respect to Contractual Obligations 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 Contractual Obligations, except as provided in this Ordinance. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Contractual Obligations, (ii) the delivery to any DTC Participant or any other person, other than an Owner, as shown on the Register, of any notice with respect to the Contractual Obligations, 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 respect to principal of or interest on the Contractual Obligations. 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 Contractual Obligation is registered in the Register as the absolute Owner of such Contractual Obligation for the purpose of payment of principal of and interest on the Contractual Obligations, for the purpose of giving notices of other matters with respect to such Contractual Obligation, for the purpose of registering transfer with respect to such Contractual Obligation, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and interest on the Contractual Obligations only to or upon the order of the respective Owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of principal and interest on the Contractual Obligations to the extent of the sum or sums so paid. No person other than an Owner, as shown in the register, shall receive a certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in this Ordinance with respect to interest checks or drafts being mailed to the registered Owner at the close of business on the Record Date, the word "Cede & Co." in this Ordinance shall refer to such new nominee of DTC. (c) The Representation Letter between the City and DTC applicable to the City's obligations delivered in book - entry -only form to DTC as securities depository for said obligations, is hereby affirmed with respect to the Contractual Obligations. Section 3.11. Successor Securities Depository; Transfer Outside Book - Entry -Only System. In the event that the City or the Paying Agent/Registrar determines that DTC is incapable of discharging its responsibilities described herein and in the Representation Letter, and that it is in the best interest of the beneficial owners of the Contractual Obligations that they be able to obtain certificated Contractual Obligations, or in the event DTC discontinues the services described herein, the City or the Paying Agent/Registrar shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants, as identified by DTC, of the appointment of such successor securities depository and transfer one or more separate Contractual Obligations to such successor securities depository or (ii) notify DTC and DTC Participants, as identified by DTC, of the availability through DTC of Contractual Obligations and transfer one or more separate Contractual Obligations to DTC Participants having Contractual Obligations credited to their DTC accounts, as identified by DTC. In such event, the 12 #4202522.1 P1��w M Contractual Obligations shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Contractual Obligations shall designate, in accordance with the provisions of this Ordinance. Section 3.12. Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Contractual Obligations are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of and interest on such Contractual Obligations, and all notices with respect to such Contractual Obligations, shall be made and given, respectively, in the manner provided in the Representation Letter. ARTICLE IV REDEMPTION OF CONTRACTUAL OBLIGATIONS BEFORE MATURITY Section 4.01. Limitation on Redemption. The Contractual Obligations shall be subject to redemption prior to their scheduled maturity only as provided in this Article IV. Section 4.02. Optional Redemption. (a) The City reserves the option to redeem Contractual Obligations maturing on and after February 15, 2023 in whole or any part, in principal amounts of $5,000 or any integral multiple thereof before their respective scheduled maturity dates, on February 15, 2022, or on any date thereafter, at a price equal to the principal amount of the Contractual Obligations called for redemption plus accrued interest to the date fixed for redemption. (b) The City, at least forty -five (45) days before the redemption date, unless a shorter period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Contractual Obligations to be redeemed. Section 4.03. Partial Redemption. (a) If less than all of the Contractual Obligations are to be redeemed pursuant to Section 4.02 hereof, 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 Contractual Obligations, or portions thereof, within such maturity or maturities and in such principal amounts for redemption. (b) A portion of a single Contractual Obligation of a denomination greater than $5,000 may be redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof. If such a Contractual Obligation is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000 portion of the Contractual Obligation as though it were a single Contractual Obligation for purposes of selection for redemption. (c) Upon surrender of any Contractual Obligation for redemption in part, the Paying Agent/Registrar, in accordance with Section 3.6 of this Ordinance, shall authenticate and deliver 13 #4202522.1 "w"I" a� #'p w f ��"R � xuoil wr. aF an exchange Contractual Obligation or Contractual Obligations in an aggregate principal amount equal to the unredeemed portion of the Contractual Obligation so surrendered, such exchange being without charge. (d) The Paying Agent/Registrar shall promptly notify the City in writing of the principal amount to be redeemed of any Contractual Obligation as to which only a portion thereof is to be redeemed. Section 4.04. Notice of Redemption to Owners. (a) The Paying Agent/Registrar shall give notice of any redemption of Contractual Obligations by sending notice by first class United States mail, postage prepaid, not less than thirty (30) days before the date fixed for redemption, to the Owner of each Contractual Obligation (or part thereof) to be redeemed, at the address shown on the Register at the close of business on the business day next preceding the date of mailing such notice. (b) The notice shall state the redemption date, the redemption price, the place at which the Contractual Obligations are to be surrendered for payment, and, if less than all the Contractual Obligations outstanding are to be redeemed and subject to Section 3.12 hereof, an identification of the Contractual Obligations or portions thereof to be redeemed. (c) Any notice given as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. Section 4.05. Payment Upon Redern tion. (a) Before or on each redemption date, the City shall deposit with the Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Agent/ Registrar shall make provision for the payment of the Contractual Obligations to be redeemed on such date by setting aside and holding in trust such amounts as are 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 Contractual Obligations being redeemed. (b) Upon presentation and surrender of any Contractual Obligation called for redemption at the Designated Payment/Transfer Office of the Paying Agent/Registrar on or after the date fixed for redemption, the Paying Agent/Registrar shall pay the principal of, redemption premium, if any, and accrued interest on such Contractual Obligation to the date of redemption from the money set aside for such purpose. Section 4.06. Effect of Redemption. (a) Notice of redemption having been given as provided in Section 4.05 of this Ordinance, and subject to any conditions or rights reserved by the City under Section 4.08, the Contractual Obligations or portions thereof called for redemption shall become due and payable on the date fixed for redemption and, unless the City defaults in its obligation to make provision for the payment of the principal thereof, redemption premium, if any, or accrued interest thereon, such Contractual Obligations or portions thereof shall cease to bear interest from and after the 1 #4202522.1 date fixed for redemption, whether or not such Contractual Obligations 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 Contractual Obligation or portion thereof called for redemption shall continue to bear interest at the rate stated on the Contractual Obligation until due provision is made for the payment of same by the City. Section 4.07. Conditional Notice of Redemption. (a) The City reserves the right to give notice of its election or direction to redeem Contractual Obligations conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date, or (ii) that the City retains the right to rescind such notice at any time on or prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected Owners. Any Contractual Obligations subject to conditional redemption and such redemption has been rescinded shall remain Outstanding and the rescission of such redemption shall not constitute an event of default. Further, in the case of a conditional redemption, the failure of the City to make moneys and or authorized securities available in part or in whole on or before the redemption date shall not constitute an event of default. ARTICLE V PAYING AGENT/REGISTRAR Section 5.01. A ointment of Initial Paymg Pay Agent/Registrar. The Bank of New York Mellon Trust Company, N.A., is hereby appointed as the initial Paying Agent/Registrar for the Contractual Obligations. Section 5.02. Qualifications. Each Paying Agent/Registrar shall be a commercial bank, a trust company organized under the laws of the State of Texas, or any other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Contractual Obligations. Section 5.03. Maintaining PgAng A ent/Re 'strar. At all times while any Contractual Obligations are outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 5.2 of this Ordinance. The Mayor is hereby authorized and directed to execute an agreement with the Paying Agent/Registrar 15 #4202522.1 i ha ✓ yJ { la �" hlu �Da is `I4w I.. specifying the duties and responsibilities of the City and the Paying Agent/Registrar in substantially the form presented to and hereby approved by the City Council. The signature of the Mayor shall be attested by the City Secretary of the City. The form of the Paying Agent/Registrar Agreement presented at this meeting is hereby approved with such changes as may be approved by bond counsel to the City. If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement. Section 5.04. Termination. The City, upon not less than sixty (60) days' notice, reserves the right to terminate the appointment of any Paying Agent/ Registrar by delivering to the entity whose appointment is to be terminated written notice of such termination. Section 5.05. Notice of Chan 2e 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 Owner by first class United States mail, postage prepaid, at the address in the Register, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. Section 5.06. Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar and executing the Paying Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed thereby. Section 5.07. Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent books and records relating to the Contractual Obligations to the successor Paying Agent/Registrar. ARTICLE VI FORM OF THE CONTRACTUAL OBLIGATIONS Section 6.01. Form Generally. (a) The Contractual Obligations, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and the Assignment form to appear on each of the Contractual Obligations, (i) shall be substantially in the form set forth in this Article, with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including 16 #4202522.1 any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Contractual Obligations, as evidenced by their execution thereof. (b) Any portion of the text of any Contractual Obligations may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Contractual Obligations. (c) The definitive Contractual Obligations shall be typewritten, printed, lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Contractual Obligations, as evidenced by their execution thereof. (d) The Initial Contractual Obligation submitted to the Attorney General of the State of Texas may be typewritten and photocopied or otherwise reproduced. Section 6.02. Form of Contractual Obligations. The form of Contractual Obligations, including the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Contractual Obligations, shall be generally as follows: (a) Form of Contractual Obligation. REGISTERED No. United States of America State of Texas REGISTERED CITY OF GRAPEVINE, TEXAS PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATION SERIES 2012 INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP NO.: % February 15, .,,,,,,,,,,,,,,,,,,,,,,,,„ December 1, 2012 The City of Grapevine (the "City "), in the County of Tarrant, State of Texas, for value received, hereby promises to pay to or registered assigns, on the Maturity Date specified above, the principal sum of DOLLARS 17 #4202522.1 �ullll Fu'; rn� q r and to pay interest on the unpaid principal amount hereof from the later of the Dated 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 interest rate per annum specified above, computed on the basis of a 360 -day year of twelve 30 -day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing February 15, 2013. The principal of this Contractual Obligation shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Contractual Obligation at the corporate trust office in Grapevine, Texas (the "Designated Payment/Transfer Office "), of The Bank of New York Mellon Trust Company, National Association, or, with respect to a successor Paying Agent/Registrar, at the designated payment/transfer office of such successor. Interest on this Contractual Obligation 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 kept by the Paying Agent/Registrar or by such other customary banking arrangements acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the person to whom interest is to be paid. For the purpose of the payment of interest on this Contractual Obligation, the registered owner shall be the person in whose name this Contractual Obligation is registered at the close of business on the "Record Date," which shall be the last Business Day of the month next preceding such Interest Payment Date; provided, however, that in the event of nonpayment of interest on a scheduled Interest Payment Date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date ") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the "Special Payment Date," which shall be 15 days after the Special Record Date) shall be sent at least five (5) Business Days prior to the Special Record Date by United. States mail, first class postage prepaid, to the address of each registered owner of a Contractual Obligation appearing on the books of the Paying Agent/Registrar at the close of business on the last Business Day preceding the date of mailing such notice. If a date for the payment of the principal of or interest on the Contractual Obligations is a Saturday, Sunday, legal holiday, or a day on which banking institutions in the city where the Designated Payment/Transfer Office is located are 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 such banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due and no additional interest shall be due by reason of nonpayment on the date on which such payment is otherwise stated to be due and payable. This Contractual Obligation is dated December 1, 2012, one of a series of fully registered contractual obligations dated December 1, 2012 specified in the title hereof issued in the aggregate principal amount of $ (herein referred to as the "Contractual Obligations "), issued pursuant to a certain Ordinance of the City Council of the City (the "Ordinance ") for the purpose of paying all or a portion of the City's contractual obligations to be incurred in connection with the acquisition or purchase of personal property for the City and to pay the costs incurred in connection with the issuance of the Contractual Obligations. 18 #4202522.1 r1!WtkA1 1 Ilia The Contractual Obligations and the interest thereon are payable from the levy of a direct and continuing ad valorem. tax, within the limit prescribed by law, against all taxable property in the City. The City has reserved the option to redeem the Contractual Obligations maturing on or after February 15, 2023, in whole or in part before their respective scheduled maturity dates, on February 15, 2022, or on any date thereafter, at a price equal to the principal amount of the Contractual Obligations so called for redemption plus accrued interest to the date fixed for redemption. If less than all of the Contractual Obligations 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 Contractual Obligations, or portions thereof, within 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 thirty (30) days before the date fixed for redemption, to the registered owner of each of the Contractual Obligations to be redeemed in whole or in part. Notice having been so given, the Contractual Obligations or portions thereof designated for redemption shall become due and payable on the redemption date specified in such notice; from and after such date, notwithstanding that any of the Contractual Obligations or portions thereof so called for redemption shall not have been surrendered for payment, interest on such Contractual Obligations or portions thereof shall cease to accrue. The City reserves the right to give notice of its election or direction to redeem Contractual Obligations conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date, or (ii) that the City retains the right to rescind such notice at any time on or prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected Owners. Any Contractual Obligations subject to conditional redemption and such redemption has been rescinded shall remain Outstanding and the rescission of such redemption shall not constitute an event of default. Further, in the case of a conditional redemption, the failure of the City to make moneys and or authorized securities available in part or in whole on or before the redemption date shall not constitute an event of default. As provided in the Ordinance, and subject to certain limitations therein set forth, this Contractual Obligation is transferable upon surrender of this Contractual Obligation for transfer at the Designated Payment/Transfer Office, with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar, and, thereupon, one or more new fully registered Contractual Obligations of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. 19 #4202522.1 Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any Contractual Obligation called for redemption where such redemption is scheduled to occur within forty -five (45) calendar days of the transfer or exchange date; provided, however, such limitation shall not be applicable to an exchange by the registered owner of the uncalled principal balance of a Contractual Obligation. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Contractual Obligation is registered as the owner hereof for the purpose of receiving payment as herein provided (except interest shall be paid to the person in whose name this Contractual Obligation is registered on the Record Date or Special Record Date, as applicable) and for all other purposes, whether or not this Contractual Obligation be overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice or knowledge to the contrary. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Contractual Obligation and the series of which it is a part is duly authorized by law; that all acts, conditions and things required to be done precedent to and in the issuance of the Contractual Obligations have been properly done and performed and have happened in regular and due time, form and manner, as required by law; that ad valorem taxes upon all taxable property in the City have been levied for and pledged to the payment of the debt service requirements of the Contractual Obligations within the limit prescribed by law; and that the total indebtedness of the City, including the Contractual Obligations, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City has caused this Contractual Obligation to be executed in its name by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary and the City Manager, and the official seal of the City has been duly impressed or placed in facsimile on this Contractual Obligation. City Secretary, City of Grapevine, Texas [SEAL] Mayor, City of Grapev=ine, Texas (b) Form of Certificate of Paving Agent/Registrar. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Contractual Obligation if the Comptroller's Registration Certificate is attached thereto. 20 #4202522. t CERTIFICATE OF PAYING AGENT /REGISTRAR It is hereby certified that this Contractual Obligation has been issued under the provisions of the Ordinance of the City; and that this Contractual Obligation has been issued in exchange for or replacement of a contractual obligation, contractual obligations or portion of a contractual obligation or contractual obligations of an issue which was originally approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated: (c) Form of Assignment. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Paying Agent/Registrar ASSIGNMENT Authorized Signatory FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or typewrite name, address and Zip Code of transferee): (Social Security or other identifying number: } the within Contractual Obligation and all rights hereunder and hereby irrevocably constitutes and appoints attorney to transfer the within Contractual Obligation on the books kept for registration hereof, with full power of substitution in the premises. Dated: Signature Guaranteed By: Authorized Signatory NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the within Contractual Obligation 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. (d) Initial Contractual Obligation Insertions. (i) The Initial Contractual Obligation shall be in the form set forth in paragraphs (a) and (c) of this Section, except that: 21 #4242522.1 (A) immediately under the name of the Contractual Obligation the headings "INTEREST RATE" and "MATURITY DATE" shall both be completed with the words "As shown below" and "CUSIP NO." shall be deleted; and (B) in the first paragraph of the Contractual Obligation the words "on the Maturity Date specified above" shall be deleted and the following will be inserted: "on February 15 in each of the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule: Years Principal Installments Interest Rates (Information to be inserted from schedule in Section 3.02 hereof); and (e) The following Registration Certificate of Comptroller of Public Accounts shall appear on the Initial Contractual Obligation in lieu of the Certificate of Paying Agent/Registrar. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS 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 Contractual Obligation 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 obligation of the City of Grapevine, Texas, and that this Contractual Obligation has this day been registered by me. Witness my hand and seal of office at Austin, Texas, Comptroller of Public Accounts of the State of Texas [SEAL] Section 6.03. CUSIP Registration. The City may secure identification numbers through the CUSIP Global Services, managed by Standard & Poor's Financial Services LLC on behalf of the American Bankers Association, and may authorize the printing of such numbers on the face of the Contractual Obligations. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Contractual Obligations shall be of no significance or effect in regard to the legality thereof and neither the City nor the attorneys approving said Contractual Obligations as to legality are to be held responsible for CUSIP numbers incorrectly printed on the Contractual Obligations. 22 #4202522.1 Section 6.04. Legal Opinion. The approving legal opinions of Bracewell & Giuliani LLP, Contractual Obligation Counsel, may be printed on the back of each Contractual Obligation over the certification of the City Secretary or any Assistant City Secretary, which may be executed in facsimile. Section 6.05. _Municipal Bond Insurance. If municipal bond guaranty insurance is obtained with respect to the Contractual Obligations, the Contractual Obligations, including the Initial Contractual Obligation, may bear an appropriate legend, as provided by the insurer. ARTICLE VII CREATION OF FUNDS AND ACCOUNTS; INITIAL DEPOSITS AND APPLICATION OF MONEY Section 7.01. Creation of Funds. The City hereby establishes the following funds: (a) the City of Grapevine, Texas, Public Property Finance Contractual Obligations, Series 2012, Interest and Sinking Fund (the "Interest and Sinking Fund "); and (b) the City of Grapevine, Texas, Public Property Finance Contractual Obligations, Series 2012, Acquisition Fund (the "Acquisition Fund "). Section 7.02. Initial Deposits. On the Closing Date, the City shall cause the proceeds from the sale of the Contractual Obligations to be deposited as follows: (a) first, an amount equal to all accrued interest on the Contractual Obligations from the Dated Date until the Closing Date shall be deposited to the credit of the Interest and Sinking Fund; (b) second, $ in proceeds of the Contractual Obligations shall be deposited to the Acquisition Fund to be used for the purposes set forth in Section 3.01(i) herein; and (c) The remaining balance received on the Closing Date shall be used to pay the costs of issuance of the Contractual Obligations. To the extent any amounts are not needed to pay costs of issuance, such excess shall be deposited to the interest and sinking fund. Section 7.03. Interest and Sinking Fund. (a) The taxes levied under Section 2.01 of this Ordinance shall be deposited to the credit of the Interest and Sinking Fund at such times and in such amounts as necessary for the timely payment of the principal of and interest on the Contractual Obligations. (b) If the amount of money in the Interest and Sinking Fund is at least equal to the aggregate principal amount of the outstanding Contractual Obligations plus the aggregate amount of interest due and that will become due and payable on such Contractual Obligations, no further deposits to that fund need be made. 23 #4202522.1 "�' r�ul (c) Money on deposit in the Interest and Sinking Fund shall be used to pay the principal of and interest on the Contractual Obligations as such become due and payable. Section 7.04. Acquisition Fund. Money on deposit in the Acquisition Fund, including investment earnings thereof, shall be used for the purposes specified in Section 3.01(1) of this Ordinance. Section 7.05. Excess Contractual Obligation. Proceeds. Upon completion of the purchase of personal property financed with the Contractual Obligations any amount (exclusive of that amount retained for the payment of costs of such personal property not then due and payable) that remains in the Acquisition Fund shall be transferred to the credit of the Interest and Sinking Fund. Section 7.06. Security of Funds. All moneys on deposit in the funds referred to in this Ordinance shall be secured in the manner and to the fullest extent required by the laws of the State of Texas for the security of public funds, and moneys on deposit in such funds shall be used only for the purposes permitted by this Ordinance. ARTICLE VIII INVESTMENTS Section 8.01. Investments. (a) Money in each fund created by this Ordinance, at the option of the City, may be invested in such securities or obligations as permitted under applicable law. (b) Any securities or obligations in which money is so invested shall be kept and held in trust for the benefit of the Owners and shall be sold and the proceeds of sale shall be timely applied to the making of all payments required to be made from the fund from which the investment was made. Section 8.02. Investment Income. (a) Interest and income derived from investment of the Interest and Sinking Fund shall be credited to such Fund. (b) Interest and income derived from investment of the Acquisition Fund shall be either deposited to the credit of the Interest and Sinking Fund or retained in the Acquisition Fund until the purchase of personal property authorized by this Ordinance is completed. ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01. Pament of the Contractual Obligations. On or before each Interest Payment Date and while any of the Contractual Obligations are outstanding and unpaid, there shall be made available to the Paying Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such interest on and principal of the Contractual Obligations as will accrue or mature on the applicable Interest Payment Date. 24 44202522.1 II Section 9.02. Other Representations and Covenants. (a) The City will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance and in each Contractual Obligation; the City will promptly pay or cause to be paid the principal of and interest on each Contractual Obligation on the dates and at the places and manner prescribed in such Contractual Obligation; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. (b) The City is duly authorized under the laws of the State of Texas to issue the Contractual Obligations; all action on its part for the creation and issuance of the Contractual Obligations has been duly and effectively taken; and the Contractual Obligations in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms. Section 9.03. Federal Income Tax Exclusion. (a) The City intends that the interest on the Contractual Obligations shall be excludable from gross income for purposes of federal income taxation pursuant to sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code "), and the applicable regulations promulgated thereunder (the "Regulations "). The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted, respectively, would cause the interest on the Contractual Obligations to be includable in gross income, as defined in section 61 of the Code, of the holders thereof for purposes of federal income taxation. In particular, the City covenants and agrees to comply with each requirement of this Section 9.03; provided, however, that the City shall not be required to comply with any particular requirement of this Section 9.03 if the City has received an opinion of nationally recognized Contractual Obligation counsel ( "Counsel's Opinion ") that such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Contractual Obligations or if the City has received a Counsel's Opinion to the effect that compliance with some other requirement set forth in this Section 9.03 will satisfy the applicable requirements of the Code, in which case compliance with such other requirement specified in such Counsel's Opinion shall constitute compliance with the corresponding requirement specified in this Section 9.03. (b) No Private Use or Payment and No Private Loan Financing. The City shall certify, through an authorized officer, employee or agent that based upon all facts and estimates known or reasonably expected to be in existence on the date the Contractual Obligations are delivered, that the proceeds of the Contractual Obligations will not be used in a manner that would cause the Contractual Obligations to be "private activity Contractual Obligations" within the meaning of section 141 of the Code and the Regulations. The City covenants and agrees that it will make such use of the proceeds of the Contractual Obligations including interest or other investment income derived from Contractual Obligation proceeds, regulate the use of property financed, directly or indirectly, with such proceeds, and take such other and further action as may be required so that the Contractual Obligations will not be "private activity Contractual Obligations" within the meaning of section 141 of the Code and the Regulations. (c) No Federal Guaranty. The City covenants and agrees that it has not and will not take any action, or knowingly omit to take any action within its control, that, if taken or omitted, respectively, would cause the Contractual Obligations to be "federally guaranteed" within the 25 #4202522.1 meaning of section 19(b) of the Code and the Regulations, except as permitted by section 149(b)(3) of the Code and the Regulations. (d) Contractual Obligations are not Hedge Contractual Obligations. The City covenants and agrees not to take any action, or knowingly omit to take any action, and has not knowingly omitted and will not knowingly omit to take any action, within its control, that, if taken or omitted, respectively, would cause the Contractual Obligations to be "hedge Contractual Obligations" within the meaning of section 149(g) of the Code and the Regulations. (e) No Arbitrate. The City shall certify, through an authorized officer, employee or agent that based upon all facts and estimates known or reasonably expected to be in existence on the date the Contractual Obligations are delivered, the City will reasonably expect that the proceeds of the Contractual Obligations will not be used in a manner that would cause the Contractual Obligations to be "arbitrage Contractual Obligations" within the meaning of section 148(a) of the Code and the Regulations. Moreover, the City covenants and agrees that it will make such use of the proceeds of the Contractual Obligations including interest or other investment income derived from Contractual Obligation proceeds, regulate investments of proceeds of the Contractual Obligations, and take such other and further action as may be required so that the Contractual Obligations will not be "arbitrage Contractual Obligations" within the meaning of section 148(a) of the Code and the Regulations. (f) Arbitrage Rebate. If the City does not qualify for an exception to the requirements of Section 148(f) of the Code, the City will take all necessary steps to comply with the requirement that certain amounts earned by the City on the investment of the "gross proceeds" of the Contractual Obligations (within the meaning of section 148(f)(6)(B) of the Code), be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Contractual Obligations as may be required to calculate the amount earned on the investment of the gross proceeds of the Contractual Obligations separately from records of amounts on deposit in the funds and accounts of the City allocable to other Contractual Obligation issues of the City or moneys which do not represent gross proceeds of any Contractual Obligations of the City, (ii) calculate at such times as are required by the Regulations, the amount earned from the investment of the gross proceeds of the Contractual Obligations which is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Contractual Obligations or on such other dates as may be permitted under the Regulations, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Contractual Obligations that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at arm's length and had the yield on the issue not been relevant to either party. (g) Information Reyorting. The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Contractual Obligations are issued, an information 26 #4202522.1 Ll ��1 statement concerning the Contractual Obligations, all under and in accordance with section 149(e) of the Code and the Regulations. (h) Record Retention. The City will retain all pertinent and material records relating to the use and expenditure of the proceeds of the Contractual Obligations until six years after the last Contractual Obligation is redeemed, or such shorter period as authorized by subsequent guidance issued by the Department of Treasury, if applicable. All records will be kept in a manner that ensures their complete access throughout the retention period. For this purpose, it is acceptable that such records are kept either as hardcopy books and records or in an electronic storage and retrieval system, provided that such electronic system includes reasonable controls and quality assurance programs that assure the ability of the City to retrieve and reproduce such books and records in the event of an examination of the Contractual Obligations by the Internal Revenue Service. (i) Qualified Tax - Exempt Obligations. The City hereby designates the Contractual Obligations as "qualified tax- exempt obligations" for purposes of section 265(b) of the Code. In connection therewith, the City represents (a) that the aggregate amount of tax - exempt obligations issued by the City during calendar year 2012, including the Contractual Obligations, that have been designated as "qualified tax - exempt obligations" under section 265(b)(3) of the Code does not exceed $10,000,000, and (b) that the reasonably anticipated amount of tax - exempt obligations that will be issued by the City during calendar year 2012, including the Contractual Obligations, will not exceed $10,000,000. For purposes of this Section 9.11, the term "tax - exempt obligation" does not include "private activity Contractual Obligations" within the meaning of section 141 of the Code, other than "qualified 501(c)(3) Contractual Obligations" within the meaning of section 145 of the Code. In addition, for purposes of this Section 9.11, the City includes all entities that are aggregated with the City under section 265(b) of the Code. 6) Registration. The Contractual Obligations will be issued in registered form. (k) Continuing Obli ag tion. Notwithstanding any other provision of this Ordinance, the City's obligations under the covenants and provisions of this Section 9.03 shall survive the defeasance and discharge of the Contractual Obligations. ARTICLE X DEFAULT AND REMEDIES Section 10.01. Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an "Event of Default," to -wit: (a) the failure to make payment of the principal of or interest on any of the Contractual Obligations when the same becomes due and payable; or (b) default in the performance or observance of any other covenant, agreement or obligation of the City, the failure to perform which materially, adversely affects the rights of the Owners, including but not limited to, their prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of 60 days after notice of such default is given by any Owner to the City. 27 #4202522.1 F�WU Section 10.02. Remedies for Default. (a) Upon the happening of any Event of Default, then and in every case any Owner or an authorized representative thereof, including but not limited to, a trustee or trustees therefor, may proceed against the City for the purpose of protecting and enforcing the rights of the Owners under this Ordinance, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the Owners hereunder or any combination of such remedies. (b) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Owners of Contractual Obligations then outstanding. Section 10.03. Remedies Not Exclusive. (a) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Contractual Obligations or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Contractual Obligations shall not be available as a remedy under this Ordinance. (b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. ARTICLE XI DISCHARGE Section 11.01. Discharge. The Contractual Obligations may be defeased, discharged or refunded in any manner permitted by applicable law. ARTICLE XII SALE AND DELIVERY OF THE CONTRACTUAL OBLIGATIONS; APPROVAL OF OFFICIAL STATEMENT; CONTROL AND DELIVERY OF CONTRACTUAL OBLIGATIONS Section 12.01. Sale of Contractual Obligations; Official Statement. (a) The Contractual Obligations, having been duly advertised and offered for sale at competitive bid, are hereby officially sold and awarded to (the "Purchaser ") for a purchase price equal to the principal amount thereof plus a cash premium of , being the bid which produced the lowest true interest cost to the City. The Initial Contractual Obligation shall be registered in the name of the Purchaser or its designee. (b) The form and substance of the Preliminary Official Statement, and any addenda, supplement or amendment thereto, 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 final Official Statement 28 #4202522,1 FT (the "Official Statement ") presented to and considered at this meeting is hereby in all respects approved and adopted and the Mayor and the 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. The Official Statement as thus approved, executed and delivered, with such appropriate variations as shall be approved by the Mayor of the City and the Purchasers, may be used by the Purchaser in the public offering and sale thereof. The City Secretary is hereby authorized and directed to include and maintain a copy of the Official Statement and any addenda, supplement or amendment thereto thus approved among the permanent records of this meeting. The use and distribution of the Preliminary Official Statement, and the preliminary public offering of the Contractual Obligations by the Purchaser, is hereby ratified, approved and confirmed. (c) All officers of the City are authorized to take such actions and execute such documents, certificates and receipts as they may deem necessary and appropriate in order to consummate the delivery of the Contractual Obligations in accordance with the terms of sale therefor including, without limitation, the Purchase Agreement. Further, in connection with the submission of the record of proceedings for the Contractual Obligations to the Attorney General of the State of Texas for examination and approval of such Contractual Obligations, the appropriate officer of the City is hereby authorized and directed to issue a check of the City payable to the Attorney General of the State of Texas as a nonrefundable examination fee in the amount required by Chapter 1202, Texas Government Code (such amount to be the lesser of (i) 1 /1 Oth of I% of the principal amount of the Contractual Obligations or (ii) $9,500). (d) The obligation of the Purchaser to accept delivery of the Contractual Obligations is subject to the Purchaser being furnished with the final, approving opinion of Bracewell & Giuliani LLP, bond counsel for the City, which opinion shall be dated as of and delivered on the Closing Date. Section 12.02. Control and Delivery of Contractual Obligations. (a) The City Manager is hereby authorized to have control of the Initial Contractual Obligation and all necessary records and proceedings pertaining thereto pending investigation, examination, and approval of the Attorney General of the State of Texas, registration by the Comptroller of Public Accounts of the State of Texas and registration with, and initial exchange or transfer by, the Paying Agent/Registrar. (b) After registration by the Comptroller of Public Accounts, delivery of the Contractual Obligations shall be made to the Representative thereof under and subject to the general supervision and direction of the City Manager, against receipt by the City of all amounts due to the City under the terms of sale. (c) In the event the Mayor, City Secretary or City Manager is absent or otherwise unable to execute any document or take any action authorized herein, the Mayor Pro Tem, any Assistant City Secretary and any Assistant City Manager, respectively, shall be authorized to execute such documents and take such actions, and the performance of such duties by the Mayor Pro Tem, the Assistant City Secretary and the Assistant City Manager shall for the purposes of 29 #4202522.1 I this Ordinance have the same force and effect as if such duties were performed by the Mayor, City Secretary and City Manager, respectively. ARTICLE XIII CONTINUING DISCLOSURE UNDERTAKING Section 13.01. Annual Reports. (a) The City shall provide annually to the MSRB within six (6) months after the end of each fiscal year, financial information and operating data with respect to the City of the general type included in the final Official Statement, being the information described in Exhibit A hereto. Any financial statements so to be provided shall be (i) prepared in accordance with the accounting principles described in Exhibit A hereto, and (ii) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided, and (iii) submitted through EMMA, in an electronic format and accompanied by identifying information, as prescribed by the MSRB. If the audit of such financial statements is not complete within such period, then the City shall provide notice that audited financial statements are not available and shall provide unaudited financial statements for the applicable fiscal year to the MSRB. The City shall provide audited financial statements for the applicable fiscal year to the MSRB when and if audited financial statements become available. (b) If the City changes its fiscal year, it will notify the MSRB of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. (c) The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to the MSRB or filed with the SEC. Section 13.02. Disclosure Event Notices. (a) The City shall notify the MSRB, in a timely manner not in excess of ten (10) Business Days after the occurrence of the event, of any of the following events with respect to the Contractual Obligations: (i) Principal and interest payment delinquencies; (ii) Non - payment related defaults, if material; (iii) Unscheduled draws on debt service reserves reflecting financial difficulties; (iv) Unscheduled draws on credit enhancements reflecting financial difficulties; (v) Substitution of credit or liquidity providers, or their failure to perform; 30 #4262522.1 I4rrrJ r rPp rr rrrY Iva � rmur (vi) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -TEB) or other material notices or determinations with respect to the tax status of the Contractual Obligations, or other material events affecting the tax status of the Contractual Obligations; (vii) Modifications to rights of holders of the Contractual Obligations, if material; (viii) Contractual Obligation calls, if material, and tender offers; (ix) Defeasances; (x) Release, substitution, or sale of property securing repayment of the Contractual Obligations, if material; (xi) Rating changes; (xii) .Bankruptcy, insolvency, receivership or similar event of the City;1 (xiii) The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (xiv) Appointment of a successor Paying Agent/Registrar or change in the name of the Paying Agent/Registrar, if material. (b) The City shall provide to the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner, notice of a failure by the City to provide required annual financial information and notices of material events in accordance with Sections 13.1 and 13.2. All documents provided to the MSRB pursuant to this section shall be accompanied by identifying information as prescribed by the MSRB. Section 13.03. Limitations, Disclaimers and Amendments. (a) The City shall be obligated to observe and perform the covenants specified in this Article for so long as, but only for so long as, the City remains an "obligated person" with respect to the Contractual Obligations within the meaning of the Rule, except that the City in any event will give notice of any deposit ' For the purposes of the event identified in (xii), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. 31 #4202522.1 P, D" �, " made in accordance with Article XI that causes Contractual Obligations no longer to be Outstanding. (b) The provisions of this Article are for the sole benefit of the Owners and beneficial owners of the Contractual Obligations, and nothing in this Article, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Article or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Contractual Obligations at any future date. (c) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY CONTRACTUAL OBLIGATION OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. (d) No default by the City in observing or performing its obligations under this Article shall constitute a breach of or default under the Ordinance for purposes of any other provisions of this Ordinance. (e) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. (f) The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell Contractual Obligations in the primary offering of the Contractual Obligations in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the Owners of a majority in aggregate principal amount (or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the Outstanding Contractual Obligations consent to such amendment or (b) an entity or individual person that is unaffiliated with the City (such as nationally recognized Contractual Obligation counsel) determines that such amendment will not materially impair the interests of the Owners and beneficial owners of the Contractual Obligations. If the City so amends the provisions of this Article, it shall include with any amended financial information or operating data next provided in accordance with Section 13.01 an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. 32 44202522.1 flu i s 4 �y �nG ARTICLE XIV AMENDMENTS; ATTORNEY GENERAL MODIFICATION Section 14.01. Amendments. This Ordinance shall constitute a contract with the Owners, be binding on the City, and shall not be amended or repealed by the City so long as any Contractual Obligation remains outstanding except as permitted in this Section. The City may, without consent of or notice to any Owners, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Owners, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the written consent of the Owners of the Contractual Obligations holding a majority in aggregate principal amount of the Contractual Obligations then outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Owners of outstanding Contractual Obligations, no such amendment, addition, or rescission shall (i) extend the time or times of payment of the principal of and interest on the Contractual Obligations, reduce the principal amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of or interest on the Contractual Obligations, (ii) give any preference to any Contractual Obligation over any other Contractual Obligation, or (iii) reduce the aggregate principal amount of Contractual Obligations required to be held by Owners for consent to any such amendment, addition, or rescission. ARTICLE XV MISCELLANEOUS MATTERS Section 15.01. Attorne y General Modification. In order to obtain the approval of the Contractual Obligations by the Attorney General of the State of Texas, any provision of this Ordinance may be modified, altered or amended after the date of its adoption if required by the Attorney General in connection with the Attorney General's examination as to the legality of the Contractual Obligations and approval thereof in accordance with the applicable law. Such changes, if any, shall be provided to the City Secretary and the City Secretary shall insert such changes into this Ordinance as if approved on the date hereof. Section 15.02. Partial Invalidity. If any section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of the Ordinance. Section 15.03. No Personal Liability. No recourse shall be had for payment of the principal of or interest on any Contractual Obligations or for any claim based thereon, or on this Ordinance, against any official or employee of the City or any person executing any Contractual Obligations. 33 #4202522.1 ARTICLE XVI EFFECTIVE IMMEDIATELY Section 16.01. Effectiveness. This Ordinance shall take effect immediately from and after its passage and publication in accordance with Section 1201.028 Texas Government Code, as amended. 34 #4202522.1 D PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 4th day of December, 2012, by a vote of ayes and nays at a regular meeting of the City Council of the City of Grapevine, Texas. ATTEST: City Secretary, City of Grapevine, Texas APPROVE AS TO FORM: City Attorney, City of Grapevine, Texas Mayor, City of Grapevine, Texas Signature Page to Ordinance Authorizing Issuance of Public Property Finance Contractual Obligations o o pa va EXHIBIT The following information is referred to in Article XIII of this Ordinance. i The financial information and operating data with respect to the City to be provided annually in accordance with Section 13.01 are as specified (and included in the Appendix or other headings of the Official Statement referred to) below: 1. The financial statements of the City, including but not limited to the portion thereof appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2. Statistical and financial data set forth in Tables 1 -6 and 5 -15, inclusive. Accounting Principles The accounting principles referred to in such Section 13.01 are the accounting principles described in the notes to the financial statements referred to in Paragraph 1 above.