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Home My WebLink AboutORD 2013-030ORDINANCE NO. 2013 -30 AUTHORIZING THE ISSUANCE OF $3,965,000 CITY OF GRAPEVINE, TEXAS TAX NOTES SERIES 2013 Adopted: June 27, 2013 #4318196.2 TABLE OF CONTENTS Page UNKOM DEFINITIONS AND OTHER PRELIMINARY MATTERS Section 1.01. Definitions ...... ................ 1 Section1.02. Findings ...................................................................................... ..............................3 Section 1.03. Table of Contents, Titles and Headings ..................................... ..............................3 Section1.04. Interpretation .............................................................................. ..............................3 ARTICLE II SECURITY FOR THE NOTES Section2.01. Tax Levy .................................................................................... ..............................4 ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE NOTES Section3.01. Authorization ............................................................................. ..............................4 Section 3.02. Date, Denomination, Maturities, Numbers and Interest ............ ..............................5 Section 3.03. Medium, Method and Place of Payment; Unclaimed Payments ..............................5 Section 3.04. Execution and Initial Registration ............................................. ..............................6 Section3.05. Ownership .................................................................................. ..............................7 Section 3.06. Registration, Transfer and Exchange ......................................... ..............................7 Section 3.07. Cancellation and Authentication ................................................ ..............................8 Section3.08. Temporary Notes ....................................................................... ..............................9 Section 3.09. Replacement Notes .................................................................... Section 3.10. ..............................9 Book - Entry -Only System .......................................................... .............................10 Section 3.11. Successor Securities Depository; Transfer Outside Book - Entry -Only System ..... I l Section 3.12. Payments to Cede & Co ............................................................ .............................12 ARTICLE IV REDEMPTION OF NOTES BEFORE MATURITY Section 4.01. Limitation on Redemption ........................................................ .............................12 Section 4.02. No Optional Redemption .......................................................... .............................12 (i) #4318196.2 ARTICLE V PAYING AGENT/REGISTRAR Section 5.01. Appointment of Initial Paying Agent/Registrar Section 5.02. Qualifications ........................................... ............................... Section 5.03. Maintaining Paying Agent /Registrar ....... ............................... Section 5.04. Termination........ Section 5.05. Notice of Change to Owners .................... ............................... Section 5.06. Agreement to Perform Duties and Functions .......................... Section 5.07. Delivery of Records to Successor ............ ............................... ARTICLE VI FORM OF THE NOTES .. .............................12 .. .............................12 .. .............................12 .. .............................13 .. .............................13 .. .............................13 .. .............................13 Section6.01. Form Generally ......................................................................... .............................13 Section6.02. Form of Notes ........................................................................... .............................14 Section 6.03. CUSIP Registration ................................................................... .............................18 Section6.04. Legal Opinion ........................................................................... .............................18 Section 6.05. Municipal Bond Insurance ........................................................ .............................19 ARTICLE VII CREATION OF FUNDS AND ACCOUNTS; INITIAL DEPOSITS AND APPLICATION OF MONEY Section7.01. Creation of Funds ...................................................................... .............................19 Section7.02. Initial Deposits .......................................................................... .............................19 Section 7.03. Interest and Sinking Fund ......................................................... .............................19 Section7.04. Project Fund .............................................................................. .............................19 Section 7.05. Excess Note Proceeds ............................................................... .............................19 Section7.06. Security of Funds ...................................................................... .............................20 ARTICLE VIII INVESTMENTS Section8.01. Investments ............................................................................... .............................20 Section 8.02. Investment Income .................................................................... .............................20 ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01. Payment of the Notes ................................................................ .............................20 Section 9.02. Other Representations and Covenants ...................................... .............................20 Section 9.03. Federal Income Tax Exclusion ................................................. .............................21 #4318196.2 DEFAULT AND REMEDIES Section 10.01. Events of Default ...................................................................... .............................23 Section 10.02. Remedies for Default ................................................................ .............................23 Section 10.03. Remedies Not Exclusive ........................................................... .............................23 DISCHARGE Section11.01. Discharge .................................................................................. .............................23 SALE AND DELIVERY OF THE NOTES; APPROVAL OF OFFICIAL STATEMENT; CONTROL AND DELIVERY OF NOTES Section 12.01. Sale of Notes; Official Statement ............................................. .............................24 Section 12.02. Control and Delivery of Notes .................................................. .............................25 ARTICLE XIII CONTINUING DISCLOSURE UNDERTAKING Section 13.01. Annual Reports ......................................................................... .............................25 Section 13.02. Disclosure Event Notices .......................................................... .............................26 Section 13.03. Limitations, Disclaimers and Amendments .............................. .............................27 ARTICLE XIV AMENDMENTS; ATTORNEY GENERAL MODIFICATION Section14.01. Amendments ............................................................................. .............................28 ARTICLE XV MISCELLANEOUS MATTERS Section 15.01. Changes to Ordinance ............................................................... .............................28 Section 15.02. Partial Invalidity ........................................................................ .............................29 Section 15.03. No Personal Liability ................................................................ .............................29 #4318196.2 ARTICLE XVI EFFECTIVE IMMEDIATELY Section16.01. Effectiveness .......................................................................................................... 29 EXHIBIT A - Description of Annual Disclosure of Financial Information (iv) #4318196.2 •'! •_, AN ORDINANCE PROVIDING FOR THE ISSUANCE OF $3,965,000 CITY OF GRAPEVINE, TEXAS, TAX NOTES, SERIES 2013; AWARDING THE SALE OF THE NOTES; 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, pursuant to Chapter 1431, Texas Government Code (the "Act "), the governing body of a municipality is authorized to issue the notes hereinafter authorized (the "Notes ") to pay contractual obligations incurred or to be incurred for the purposes set forth in Section 3.01 hereof; and WHEREAS, this governing body (the "City Council ") of the City of Grapevine, Texas (the "City ") hereby finds and determines that it is necessary and in the best interest of the City and its citizens to issue such Notes for the purposes herein described and that such Notes shall be payable from and secured by ad valorem taxes levied, within the limits prescribed by law, on all taxable property within the City; and WHEREAS, the Notes hereinafter authorized shall mature before the seventh anniversary of the date that the Attorney General of the State of Texas approves the Notes, as required by the Act; and WHEREAS, it is affirmatively found that this City Council is authorized to proceed with the issuance and sale of such Notes as authorized by the Constitution and laws of the State of Texas, particularly the Act; and WHEREAS, the City Council has found and determined that it is necessary and in the best interest of the City and its citizens that it authorize by this Ordinance the issuance and delivery of its Notes in a single series at this time; and 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 IN • •• �� 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: #4318196.2 "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 Notes. "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings and court decisions relating thereto. "Designated Payment /Transfer Office" means (i) with respect to the initial Paying Agent/Registrar named herein, its corporate trust office in Dallas, 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 Note" means the Initial Note 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 Notes is scheduled to be paid until the maturity of the Notes, such dates being February 15 and August 15 of each year, commencing on February 15, 2014. "MSRB" means the Municipal Securities Rulemaking Board. "Note" means any of the Notes. "Notes" means the City's notes entitled "City of Grapevine, Texas, Tax Notes, Series 2013" authorized to be issued by Section 3.01. 2 #4318196.2 "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 Note or Notes, 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. "Project Fund" means the construction fund established by Section 7.01(b). "Purchaser" means BOSC, Inc. "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 Notes as the same come due and payable and remaining unclaimed by the Owners of such Notes for 90 days after the applicable payment or redemption date. Section 1.02. Findinas. 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 #4318196.2 genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein 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 NOTES 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 Notes 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 Notes, being (i) the interest on the Notes, 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 Notes 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 Notes, there shall be subtracted the amount of any Notes that have been duly called for redemption and for which money has been deposited with the Paying Agent/Registrar for such redemption. ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE NOTES Section 3.01. Authorization. The City's notes to be designated "City of Grapevine, Texas, Tax Notes, Series 2013," are hereby authorized to be issued and delivered in accordance 4 #4318196.2 with the Constitution and laws of the State of Texas, particularly Chapter 1431, Texas Government Code, as amended, and the Charter of the City. The Notes shall be issued in the aggregate principal amount of $3,965,000 for the public purpose of (i) the acquisition of a public safety radio system, (ii) the acquisition of fire equipment and fire apparatus, (iii) the acquisition of public vehicles and equipment, (iv) the acquisition of equipment for the City's municipal golf course, and (v) paying costs related to the issuance of the Notes. Section 3.02. Date, Denomination, Maturities, Numbers and Interest. (a) The Notes shall be dated June 15, 2013 (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 Note, which shall be numbered T -1. (b) The Notes 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 Note 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, commencing on February 15, 2014, 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. Section 3.03. Medium, Method and Place of Payment; Unclaimed Payments. (a) The principal of and interest on the Notes shall be paid in lawful money of the United States of America. (b) Interest on the Notes 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 Note appearing on the Register at the close of business on the last Business Day next preceding the date of mailing of such notice. #4318196.2 Principal Interest Principal Interest Year Amount Rate Year Amount Rate 2014 $520,000 2.000% 2018 $580,000 2.000% 2015 545,000 2.000% 2019 590,000 2.250% 2016 555,000 2.000% 2020 605,000 2.500% 2017 570,000 2.000% (c) Interest on each Note 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, commencing on February 15, 2014, 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. Section 3.03. Medium, Method and Place of Payment; Unclaimed Payments. (a) The principal of and interest on the Notes shall be paid in lawful money of the United States of America. (b) Interest on the Notes 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 Note appearing on the Register at the close of business on the last Business Day next preceding the date of mailing of such notice. #4318196.2 (c) Interest on the Notes 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 Notes, 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 Note shall be paid to the person in whose name such Note is registered on the due date thereof upon presentation and surrender of such Note at the Designated Payment/Transfer Office. (e) If the date for the payment of the principal of or interest on any Notes 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 Notes 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 Notes thereafter coming due and, to the extent any such money remains after the retirement of all outstanding Notes, 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 Notes for any further payment of such unclaimed moneys or on account of any such Notes, subject to any applicable escheat law or similar law. Section 3.04. Execution and Initial Registration. (a) The Notes shall be executed on behalf of the City by the Mayor and countersigned by the City Secretary, 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 Notes shall have the same effect as if each of the Notes had been signed manually and in person by each of said officers, and such facsimile seal on the Notes shall have the same effect as if the official seal of the City had been manually impressed upon each of the Notes. (b) In the event that any officer of the City whose manual or facsimile signature appears on the Notes ceases to be such officer before the authentication of such Notes 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 Note 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 6 #4318196.2 1 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 Notes. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Note 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 Note 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 Note (the "Initial Note ") representing the entire principal amount of the Notes, 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, 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 Note, the Paying Agent/Registrar shall cancel the Initial Note and deliver to DTC on behalf of the Representative registered definitive Notes 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 Notes in safekeeping for DTC. i Section 3.05. Ownership. (a) The City, the Paying Agent/Registrar and any other person may treat the person in whose name any Note is registered as the absolute owner of such Note 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 Note is registered on the Record Date or on the Special Record Date, as applicable), and for all other purposes, whether or not such Note 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 Note 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 Note to the extent of the sums paid. Section 3.06. Registration, Transfer and Exchange. (a) So long as any Notes 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 Notes in accordance with this Ordinance. (b) Registration of any Note 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 Notes, 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 7 #4318196.2 Note or any portion thereof registered in the name of such assignee or assignees. No transfer of any Note shall be effective until entered in the Register. Upon assignment and transfer of any l Note or portion thereof, a new Note or Notes will be issued by the Paying Agent /Registrar in exchange for such transferred and assigned Note. To the extent possible, the Paying Agent /Registrar will issue such new Note or Notes within not more than three (3) Business Days after receipt of the Note to be transferred in proper form and with proper instructions directing such transfer. (c) Any Note 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 Note or Notes 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 Note presented for exchange. To the extent possible, a new Note or Notes shall be delivered by the Paying Agent /Registrar to the Owner of the Note or Notes within not more than three Business Days after receipt of the Note to be exchanged in proper form and with proper instructions directing such exchange. (d) Each Note issued in exchange for any Note or portion thereof assigned or transferred shall have the same principal maturity date and shall bear interest at the same rate as the Note for which it is being exchanged. Each substitute Note shall bear a letter and /or number to distinguish it from each other Note. The Paying Agent/Registrar shall exchange the Notes as provided herein, and each substitute Note delivered in accordance with this Section shall constitute an original additional Note of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Note or Notes in lieu of which such substitute Note or Notes 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 Notes, 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 Note. In addition, the City hereby covenants with the Owners of the Notes 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 Notes, when due, and (ii) pay the fees and charges of the Paying Agent /Registrar for services with respect to the transfer, registration and exchange of Notes as provided herein. Section 3.07. Cancellation and Authentication. (a) All Notes paid in accordance with this Ordinance, and all Notes in lieu of which exchange Notes or replacement Notes 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 Notes 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 Note issued pursuant to the provisions of Sections 3.06 and 3.09 of this Ordinance, in exchange for or replacement of any Note or Notes issued under this 8 #4318196.2 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 Note, manually sign and date such Certificate, and no such Note 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 Note or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Notes in the manner prescribed herein, and said Notes 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 Notes 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 Notes shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Initial Note which was originally delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. (c) Notes issued in exchange or replacement of any other Note or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Notes to be payable only to the registered owners thereof, (ii) may be transferred and assigned, (iii) may be exchanged for other Notes, (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 Note set forth in this Ordinance. Section 3.08. Temporary Notes. (a) Following the delivery and registration of the Initial Note and pending the preparation of definitive Notes, 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 Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Notes 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 Notes may determine, as evidenced by their signing of such temporary Notes. (b) Until exchanged for Notes in definitive form, such Notes 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 Notes in definitive form; thereupon, upon the presentation and surrender of the Note or Notes in temporary form to the Paying Agent /Registrar, the Paying Agent /Registrar shall cancel the Notes in temporary form and authenticate and deliver in exchange therefor a Note or Notes of the same maturity and series, in definitive form, in the authorized denomination, and in the same aggregate principal amount, as the Note or Notes in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. Section 3.09. Replacement Notes. (a) Upon the presentation and surrender to the Paying Agent/Registrar, at the Designated Payment /Transfer Office, of a mutilated Note, the 9 #4318196.2 Paying Agent /Registrar shall authenticate and deliver in exchange therefor a replacement Note 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 Note to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) In the event that any Note 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 Note has been acquired by a bona fide purchaser, shall authenticate and deliver a replacement Note 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 Note; (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 Note, a bona fide purchaser of the original additional Note in lieu of which such replacement Note was issued presents for payment such original Note, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Note 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 Note has become or is about to become due and payable, the Paying Agent /Registrar, in its discretion, without the necessity of issuing a replacement Note, may pay such Note on the date on which such Note becomes due and payable. (e) Each replacement Note delivered in accordance with this Section shall constitute an original additional Note of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Note or Notes in lieu of which such replacement Note is delivered. Section 3.10. Book - Entry- OnlySystem. (a) The definitive Notes shall be initially issued in the form of a separate single fully registered Note for each of the maturities thereof. Upon initial issuance, the ownership of each such Note 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 i Notes shall be registered in the name of Cede & Co., as nominee of DTC. 10 #4318196.2 (b) With respect to Notes 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 Notes, 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 Notes, (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 Notes, 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 Notes. 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 Note is registered in the Register as the absolute Owner of such Note for the purpose of payment of principal of and interest on the Notes, for the purpose of giving notices of other matters with respect to such Note, for the purpose of registering transfer with respect to such Note, and for all other purposes whatsoever. The Paying Agent /Registrar shall pay all principal of and interest on the Notes 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 Notes 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 i 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 Notes. 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 Notes that they be able to obtain certificated Notes, 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 Notes to such successor securities depository or (ii) notify DTC and DTC Participants, as identified by DTC, of the availability through DTC of Notes and transfer one or more separate Notes to DTC Participants having Notes credited to their DTC accounts, as identified by DTC. In such event, the Notes 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 11 #4318196.2 or names Owners transferring or exchanging Notes 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 Notes are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of and interest on such Notes, and all notices with respect to such Notes, shall be made and given, respectively, in the manner provided in the Representation Letter. ARTICLE IV REDEMPTION OF NOTES BEFORE MATURITY Section 4.01. Limitation on Redemption. The Notes shall be subject to redemption prior to their scheduled maturity only as provided in this Article IV. Section 4.02. No Optional Redemption. The Notes shall not be subject to optional redemption before their Scheduled Maturity. F . 40M PAYING AGENT /REGISTRAR Section 5.01. Appointment of Initial Paying g A ent /Re istrar. The Bank of New York Mellon Trust Company, N.A., is hereby appointed as the initial Paying Agent/Registrar for the Notes. 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 Notes. Section 5.03. Maintaining Paying Agent/Registrar. At all times while any Notes are outstanding, the City will maintain a Paying Agent /Registrar that is qualified under Section 5.02 of this Ordinance. The Mayor is hereby authorized and directed to execute an agreement with the Paying Agent/Registrar specifying the duties and responsibilities of the City and the Paying Agent/Registrar 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. 12 #4318196.2 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 Change to Owners. Promptly upon each change in the entity serving as Paying Agent /Registrar, the City will cause notice of the change to be sent to each 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 Notes to the successor Paying Agent /Registrar. ARTICLE VI Section 6.01. Form Generally. (a) The Notes, 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 Notes, (i) shall be substantially in the form set forth in this Article, with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including any reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Notes, as evidenced by their execution thereof. (b) Any portion of the text of any Notes may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Notes. (c) The definitive Notes 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 Notes, as evidenced by their execution thereof. 13 #4318196.2 (d) The Initial Note submitted to the Attorney General of the State of Texas may be typewritten and photocopied or otherwise reproduced. Section 6.02. Form of Notes. The form of Notes, 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 Notes, shall be generally as follows: (a) Form of Note. REGISTERED No. United States of America State of Texas REGISTERED CITY OF GRAPEVINE, TEXAS TAX NOTES SERIES 2013 INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP NO.: % February 15, June 15, 2013 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 11• 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, 2014. The principal of this Note shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Note at the corporate trust office in Dallas, 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 Note 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 14 #4318196.2 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 Note, the registered owner shall be the person in whose name this Note 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 Note 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 Notes 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 Note is one of a series of fully registered Notes specified in the title hereof issued in the aggregate principal amount of $3,965,000 (herein referred to as the "Notes "), issued pursuant to a certain Ordinance of the City Council of the City (the "Ordinance ") for the (i) the acquisition of a public safety radio system, (ii) the acquisition of fire equipment and fire apparatus, (iii) the acquisition of public vehicles and equipment, (iv) the acquisition of equipment for the City's municipal golf course, and (v) paying costs related to the issuance of the Notes. The Notes 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 Notes are not subject to optional redemption prior to stated maturity. As provided in the Ordinance, and subject to certain limitations therein set forth, this Note is transferable upon surrender of this Note 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 Notes of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Note 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 Note is registered on the i Record Date or Special Record Date, as applicable) and for all other purposes, whether or not 15 #4318196.2 this Note 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 Note 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 Notes 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 Notes within the limit prescribed by law; and that the total indebtedness of the City, including the Notes, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City has caused this Note 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 official seal of the City has been duly impressed or placed in facsimile on this Note. City Secretary, City of Grapevine, Texas [SEAL] 16 #4318196.2 Mayor, City of Grapevine, Texas (b) Form of Certificate of Paying Agent/Registrar. The following Certificate of Paying Agent /Registrar may be deleted from the Initial Note if the Comptroller's Registration Certificate is attached thereto. CERTIFICATE OF PAYING AGENT /REGISTRAR It is hereby certified that this Note has been issued under the provisions of the Ordinance of the City; and that this Note has been issued in exchange for or replacement of a Note, Notes or portion of a Note or Notes 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 Note and all rights hereunder and hereby irrevocably constitutes and appoints attorney to transfer the within Note 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 Note 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 Note Insertions. (i) The Initial Note shall be in the form set forth in paragraphs (a) and (c) of this Section, except that: 17 #4318296.2 A. immediately under the name of the Note 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 Note 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 Note 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 Note 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 Note 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 Notes. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Notes shall be of no significance or effect in regard to the legality thereof and neither the City nor the attorneys approving said Notes as to legality are to be held responsible for CUSIP numbers incorrectly printed on the Notes. Section 6.04. Legal Opinion. The approving legal opinions of Bracewell & Giuliani LLP, Note Counsel, may be printed on the back of each Note over the certification of the City Secretary or any Assistant City Secretary, which may be executed in facsimile. 18 #4318196.2 Section 6.05. Municipal Bond Insurance. If municipal bond guaranty insurance is obtained with respect to the Notes, the Notes, including the Initial Note, 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, Tax Notes, Series 2013, Interest and Sinking Fund (the "Interest and Sinking Fund "); and (b) the City of Grapevine, Texas, Tax Notes, Series 2013, Project Fund (the "Project Fund "). Section 7.02. Initial Deposits. On the Closing Date, the City shall cause the proceeds from the sale of the Notes to be deposited as follows: (a) an amount equal to all accrued interest on the Notes from the Dated Date until the Closing Date shall be deposited to the credit of the Interest and Sinking Fund; (b) $3,981,668.80 in proceeds of the Notes shall be deposited to the Project Fund to be used for the purposes set forth in Section 3.01(1) through (iv) herein; and (c) the remaining balance received on the Closing Date shall be used to pay the costs of issuance of the Notes. 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 Notes. (b) If the amount of money in the Interest and Sinking Fund is at least equal to the aggregate principal amount of the outstanding Notes plus the aggregate amount of interest due and that will become due and payable on such Notes, no further deposits to that fund need be made. (c) Money on deposit in the Interest and Sinking Fund shall be used to pay the principal of and interest on the Notes as such become due and payable. Section 7.04. Project Fund. Money on deposit in the Project Fund, including investment earnings thereof, shall be used for the purposes specified in Section 3.01(1) of this Ordinance. Section 7.05. Excess Note Proceeds. Upon completion of the acquisition of property financed with the Notes any amount (exclusive of that amount retained for the payment of costs 19 #4318196.2 of such personal property not then due and payable) that remains in the Project 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 Project Fund shall be either deposited to the credit of the Interest and Sinking Fund or retained in the Project Fund until the purchase of personal property authorized by this Ordinance is completed. ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01. Payment of the Notes. On or before each Interest Payment Date and while any of the Notes 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 Notes as will accrue or mature on the applicable Interest Payment Date. 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 Note; the City will promptly pay or cause to be paid the principal of and interest on each Note on the dates and at the places and manner prescribed in such Note; 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 Notes; all action on its part for the creation and issuance of the Notes has been duly and effectively taken; and the Notes in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms. 20 #4318196.2 Section 9.03. Federal Income Tax Exclusion. (a) The City intends that the interest on the Notes 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 Notes 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 Note 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 Notes 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 Financin. 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 Notes are delivered, that the proceeds of the Notes will not be used in a manner that would cause the Notes to be "private activity bonds" 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 Notes including interest or other investment income derived from Note 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 Notes will not be "private activity bonds" 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 Notes to be "federally guaranteed" within the meaning of section 149(b) of the Code and the Regulations, except as permitted by section 149(b)(3) of the Code and the Regulations. (d) Tax Notes are not Hedge Bonds. 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 Notes to be "hedge bonds" within the meaning of section 149(g) of the Code and the Regulations. (e) No Arbitrage. 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 Notes are delivered, the City will reasonably expect that the proceeds of the Notes will not be used in a manner that would cause the Notes to be "arbitrage bonds" 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 Notes including interest or other 21 #4318196.2 investment income derived from Note proceeds, regulate investments of proceeds of the Notes, and take such other and further action as may be required so that the Notes will not be "arbitrage bonds" 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 Notes (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 Notes as may be required to calculate the amount earned on the investment of the gross proceeds of the Notes separately from records of amounts on deposit in the funds and accounts of the City allocable to other Note issues of the City or moneys which do not represent gross proceeds of any Notes 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 Notes 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 Notes 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 Notes 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 Reporting. 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 Notes are issued, an information statement concerning the Notes, 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 Notes until six years after the last Note 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 Notes by the Internal Revenue Service. (i) Registration. The Notes will be issued in registered form. 0) Continuing_ Obligation. 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 Notes. 22 #4318196.2 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 Notes 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. 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 Notes 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 Notes 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 Notes 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 Notes may be defeased, discharged or refunded in any manner permitted by applicable law. 23 #4318196.2 ARTICLE XII SALE AND DELIVERY OF THE NOTES; APPROVAL OF OFFICIAL STATEMENT; CONTROL AND DELIVERY OF NOTES Section 12.01. Sale of Notes; Official Statement. (a) The Notes, having been duly advertised and offered for sale at competitive bid, are hereby officially sold and awarded to BOSC, Inc. (the "Purchaser ") for a purchase price equal to the principal amount thereof, plus a cash premium in the amount of $56,668.80, and plus interest accrued to the Closing Date, being the bid which produced the lowest true interest cost to the City. The Initial Note 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 (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 Notes 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 Notes 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 Notes to the Attorney General of the State of Texas for examination and approval of such Notes, 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 /10th of 1% of the principal amount of the Notes or (ii) $9,500). (d) The obligation of the Purchaser to accept delivery of the Notes 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. 24 #4318196.2 Section 12.02. Control and Delivery of Notes. (a) The City Manager is hereby authorized to have control of the Initial Note 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 Notes 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 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 25 #4318196.2 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 Notes: (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; (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 Notes, or other material events affecting the tax status of the Notes; (vii) Modifications to rights of holders of the Notes, if material; (viii) Note calls, if material, and tender offers; (ix) Defeasances; (x) Release, substitution, or sale of property securing repayment of the Notes, if material; (xi) Rating changes; (xii) Bankruptcy, insolvency, receivership or similar event of the City;1 1 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. 26 #4318196.2 (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 13.01 and 13.02. 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 Notes within the meaning of the Rule, except that the City in any event will give notice of any deposit made in accordance with Article XI that causes Notes no longer to be Outstanding. (b) The provisions of this Article are for the sole benefit of the Owners and beneficial owners of the Notes, 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 Notes at any future date. (c) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY NOTE 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. 27 #4318196.2 (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 Notes in the primary offering of the Notes 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 Notes consent to such amendment or (b) an entity or individual person that is unaffiliated with the City (such as nationally recognized Note counsel) determines that such amendment will not materially impair the interests of the Owners and beneficial owners of the Notes. 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. 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 Note 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 Notes holding a majority in aggregate principal amount of the Notes then outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Owners of outstanding Notes, no such amendment, addition, or rescission shall (i) extend the time or times of payment of the principal of and interest on the Notes, 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 Notes, (ii) give any preference to any Note over any other Note, or (iii) reduce the aggregate principal amount of Notes required to be held by Owners for consent to any such amendment, addition, or rescission. ARTICLE XV MISCELLANEOUS MATTERS Section 15.01. Changes to Ordinance. The Mayor, City Manager, or Administrative Services Director, in consultation with Bond Counsel, are hereby authorized to make changes to the terms of this Ordinance if necessary or desirable to carry out the purposes hereof or in connection with the approval of the issuance of the Notes by the Attorney General of Texas. 28 #4318196.2 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 t 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 Notes or for any claim based thereon, or on this Ordinance, against any official or employee of the City or any person executing any Notes. 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. 29 #4318196.2 PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 27th day of June, 2013, by a vote of 6 ayes and 0 nays at a special meeting of the City Council of the City of Grapevine TPxnc 9 W&MW <2*ko�6w� City e retary, City of Grapevine, Texas i�\* (1 City Attorney, City of Grapevine, Texas Mayor, City of Grapevine, Signature Page to Ordinance Authorizing Issuance of City of Grapevine, Texas, Tax Notes Series 2013 EXHIBIT A II IESCRIPTION OF ANNUAL DISCLOSURE OF • The following information is referred to in Article XIII of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with 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 13, but for the most recently concluded fiscal year. 2. Statistical and financial data set forth in Tables 1 -6 and 8 -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. Exhibit A -1 #4318196.2