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HomeMy WebLinkAboutORD 2008-074 ORDINANCE NO. 2008-74 AUTHORIZING THE ISSUANCE OF $4,260,000 CITY OF GRAPEVINE, TEXAS TAX NOTES, SERIES 2008 Adopted: December 16, 2008 1500414v.4 GRA325/82001 TABLE OF CONTENTS Page " Parties 1 ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section 1.01. Definitions 1 Section 1.02. Other Definitions 3 Section 1.03. Findings 3 Section 1.04. Table of Contents,Titles and Headings 3 Section 1.05. Interpretation 3 ARTICLE II SECURITY FOR THE NOTES Section 2.01. Tax Levy for Payment of the Notes 3 ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE NOTES wow Section 3.01. Authorization 4 Section 3.02. Date, Denomination, Maturities,Numbers and Interest 4 Section 3.03. Medium, Method and Place of Payment 5 Section 3.04. Execution and Initial Registration 6 Section 3.05. Ownership 6 Section 3.06. Registration, Transfer and Exchange 7 Section 3.07. Cancellation and Authentication 7 Section 3.08. Temporary Notes 7 Section 3.09. Replacement Notes 8 ARTICLE IV REDEMPTION OF NOTES BEFORE MATURITY Section 4.01. Limitation on Redemption 9 Section 4.02. No Optional Redemption 9 Section 4.03. Mandatory Sinking Fund Redemption 9 Section 4.04. Partial Redemption 9 Section 4.05. Notice of Redemption to Owners 10 Section 4.06. Payment Upon Redemption 10 spar Section 4.07. Effect of Redemption 10 1500414v.4 GRA325/82001 ARTICLE V PAYING AGENT/REGISTRAR Section 5.01. Appointment of Initial Paying Agent/Registrar 11 Section 5.02. Qualifications 11 Section 5.03. Maintaining Paying Agent/Registrar 11 Section 5.04. Termination 11 Section 5.05. Notice of Change 11 Section 5.06. Agreement to Perform Duties and Functions 11 Section 5.07. Delivery of Records to Successor 11 ARTICLE VI FORM OF THE NOTES Section 6.01. Form Generally 12 Section 6.02. Form of Notes 12 Section 6.03. CUSIP Registration 18 Section 6.04. Legal Opinion 18 Section 6.05. Municipal Bond Insurance 18 ARTICLE VII SALE OF THE NOTES; CONTROL AND DELIVERY OF THE NOTES Section 7.01. Sale of Notes; Official Statement 19 Section 7.02. Control and Delivery of Notes 19 ARTICLE VIII CREATION OF FUNDS AND ACCOUNTS; DEPOSIT OF PROCEEDS; INVESTMENTS Section 8.01. Creation of Funds 20 Section 8.02. Interest and Sinking Fund 20 Section 8.03. Project Fund 20 Section 8.04. Security of Funds 20 Section 8.05. Deposit of Proceeds 20 Section 8.06. Investments 20 Section 8.07. Investment Income 21 ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01. Payment of the Notes 21 Section 9.02. Other Representations and Covenants 21 Section 9.03. Provisions Concerning Federal Income Tax Exclusion 21 ii 1500414v.4 GRA325/82001 POW Section 9.04. No Private Use or Payment and No Private Loan Financing 22 Section 9.05. No Federal Guaranty 22 Section 9.06. Notes are not Hedge Bonds 22 Section 9.07. No-Arbitrage Covenant 22 Section 9.08. Arbitrage Rebate 22 Section 9.09. Information Reporting 23 Section 9.10. Qualified Tax-Exempt Obligations 23 Section 9.11. Continuing Obligation 23 ARTICLE X DEFAULT AND REMEDIES Section 10.01. Events of Default 23 Section 10.02. Remedies for Default 24 Section 10.03. Remedies Not Exclusive 24 ARTICLE XI DISCHARGE Section 11.01. Discharge 24 IMO ARTICLE XII iamb EFFECTIVE IMMEDIATELY Section 12.01. Effectiveness 24 avnio 1500414v.4 GRA325/82001 ORDINANCE NO. 2008-74 AN ORDINANCE OF THE CITY OF GRAPEVINE, TEXAS, AUTHORIZING THE ISSUANCE AND SALE OF CITY OF GRAPEVINE, TEXAS, TAX NOTES, SERIES 2008, IN THE AGGREGATE PRINCIPAL AMOUNT OF $4,260,000; AWARDING THE SALE OF SAID NOTES; LEVYING A TAX IN PAYMENT THEREOF; PRESCRIBING THE FORM OF SAID NOTES; AND ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT 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, it is officially found, determined, and declared that the meeting at which this Ordinance has been adopted was open to the public and public notice of the time, place and subject matter of the public business to be considered and acted upon at said meeting, including this Ordinance, was given, all as required by the applicable provisions of Chapter 551, Texas Government Code, as amended;Now Therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE: 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: "Closing Date"means the date of the initial delivery of and payment for the Notes. 1500414v.4 GRA325/82001 "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations,published rulings and court decisions relating thereto. Payment/Transfer Office" means (i) with respect to the initial Paying Agent/Registrar named herein, its office in Fort Worth, Texas, or at such other location designated by the Paying Agent/Registrar and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the City and such successor. "Event of Default"means any Event of Default as defined in Section 10.01. "Initial Note"means the Note described in Section 3.04(d)and 6.02(d). "Interest and Sinking Fund" means the interest and sinking fund established by Section 8.01(a). "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 February 15, 2010. "Note"means any of the Notes. "Notes" means the City's notes entitled "City of Grapevine, Texas, Tax Notes, Series 2008" authorized to be issued by Section 3.01. "Ordinance"means 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 initially Compass Bank, or any successor thereto as provided in this Ordinance. "Paying Agent/Registrar Agreement" means the Paying Agent/Registrar Agreement between the City and the Paying Agent/Registrar relating to the Notes. "Project Fund"means the construction fund established by Section 8.01(a). "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). "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). wpm "Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the payment of the principal of or interest on Notes as the same become due and payable and -2- 1500414v.4 GRA325/82001 remaining unclaimed by the Owners of such Notes for 90 days after the applicable payment or redemption date. Section 1.02. Other Definitions. The terms "City Council" and "City" shall have the meaning assigned in the preamble to this Ordinance. Section 1.03. 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 1.04. 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 1.05. Interpretation. (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) Article and section references shall mean references to articles and sections of this Ordinance unless designated otherwise. (c) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein to sustain the validity of this Ordinance. ARTICLE II SECURITY FOR THE NOTES Section 2.01. Tax Levy for Payment of the Notes. (a) The City Council hereby declares and covenants that it will provide and levy a tax legally and fully sufficient for payment of the Notes, it having been determined that the existing and available taxing authority of the City for such purpose is adequate to permit a legally sufficient tax in consideration of all other outstanding obligations of the City. (b) In order to provide for the payment of the debt service requirements on the Notes, being (i) the interest on the Notes, and (ii) a sinking fund for their payment at maturity or a sinking fund of two percent per annum (whichever amount is the greater), there is hereby levied for the current year and each succeeding year thereafter, while the Notes or interest thereon remain 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 such debt service requirements, full allowance being made for delinquencies and costs of collection. -3- 1500414v.4 GRA325/82001 (c) The tax levied by this Section shall be assessed and collected each year and deposited into the Interest and Sinking Fund for the payment of the debt service requirements on the Notes, and the tax shall not be diverted to any other purpose. (d) 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. (e) If the liens and provisions of this Ordinance shall be discharged in a manner permitted by Article XI, 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. 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 2008," are hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State of Texas, particularly Chapter 1431, Texas Government Code, as amended, and Section 9.13 of the City's Home Rule Charter, in the wow aggregate principal amount of $4,260,000 for the public purpose of providing funds for (i)demolition of existing structures in the 600 Block of Main Street; (ii) design, engineering and construction of facilities for the City's Convention and Visitor's Bureau in the 600 Block of Main Street; and(iii)payment of the costs and expenses associated with issuing the Notes. Section 3.02. Date. Denomination. Maturities. Numbers and Interest. (a) The Notes shall be dated December 15, 2008, 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 and in the principal installments set forth in the following schedule: Term Notes Principal Interest Year Installment Rate 2015 $4,260,000 3.900% (c) Interest shall accrue and be paid on each Note, respectively, until the payment of the principal amount thereof shall have been paid or provided for, from the later of the Closing „M„ Date or the most recent Interest Payment Date to which interest has been paid or provided for at the rates per annum for each respective maturity specified in the schedule contained in -4- 1500414v.4 GRA325/82001 subsection (b) above. Such interest shall be payable semiannually on each February 15 and August 15 of each year, commencing on February 15, 2010, until maturity or prior redemption. Interest on the Notes shall be calculated on the basis of a 360-day year composed of twelve 30- day months. Section 3.03. Medium,Method and Place of Payment. (a) The principal of,premium, if any, and interest on the Notes shall be paid in lawful money of the United States of America as provided in this Section. (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, 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 at least 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 books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. (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, United States mail, first class 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. (d) The principal of each Note shall be paid to the person in whose name such Note is registered on the due date thereof(whether at the maturity date or the date of prior redemption thereof) upon presentation and surrender of such Note at the Designated Payment/Transfer Office. So long as the Purchaser is the Owner of record of the Notes,presentation and surrender of any Note is not required, and payment of such principal amount to the Owner may be by wire transfer. (e) 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 in which 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) Subject to any applicable escheat, unclaimed property, or similar law, including Title 6 of the Texas Property Code, Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment or redemption date shall be paid to the City and thereafter neither the City,the Paying Agent/Registrar, nor any other person shall be -5- 1500414v.4 GRA325/82001 wimp liable or responsible to any Owners of such Notes for any further payment of such unclaimed moneys or on account of any such Notes. Section 3.04. Execution and Initial Registration. (a) The Notes shall be executed on behalf of the City by the Mayor and City Secretary of the City, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the 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 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 ,g, 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, one Initial Note representing the entire principal amount of the Notes, payable in stated installments to the initial purchaser or its designee, executed by manual or facsimile signature of the Mayor and City Secretary of the City, approved by the Attorney General of Texas, and registered and manually signed by the Comptroller of Public Accounts of the State of Texas,will be delivered to the Purchaser or its designee. 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 and premium, if any, thereon, 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), 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 woo City and the Paying Agent/Registrar upon such Note to the extent of the sums paid. -6- 1500414v.4 GRA325/82001 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) The ownership of a Note may be transferred only upon the presentation and surrender of the Note at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Note shall be effective until entered in the Register. (c) The Notes shall be exchangeable upon the presentation and surrender thereof at the Designated Payment/Transfer Office of the Paying Agent/Registrar for a Note or Notes of the same maturity and interest rate and in any denomination or denominations of any integral multiple of$5,000 and in an aggregate principal amount equal to the unpaid principal amount of the Notes presented for exchange. The Paying Agent/Registrar is hereby authorized to authenticate and deliver Notes exchanged for other Notes in accordance with this Section. (d) Each exchange Note delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Note or Notes in lieu of which such exchange Note is delivered. (e) No service charge shall be made to the Owner for the initial registration, subsequent transfer, or exchange for any different denomination of any of the Notes. The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer or exchange of a Note. Section 3.07. Cancellation and Authentication. All Notes paid or redeemed before scheduled maturity 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 cancelled upon the making of proper records regarding such payment, redemption, exchange or replacement. The Paying Agent/Registrar shall dispose of the cancelled Notes in accordance with the Securities Exchange Act of 1934. 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. -7- 1500414v.4 GRA325/82001 (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 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 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 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, instead of issuing a replacement Note, may pay such Note. -8- I500414v.4 GRA325/82001 (e) Each replacement Note delivered in accordance with this Section shall constitute an original contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Note or Notes in lieu of which such replacement Note is delivered. ARTICLE IV REDEMPTION OF NOTES BEFORE MATURITY Section 4.01. Limitation on Redemption. The Notes shall be subject to redemption before 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. Section 4.03. Mandatory Sinking Fund Redemption. (a) The Notes are subject to mandatory sinking fund redemption and will be redeemed by the City, in part at a price equal to the principal amount thereof, without premium, plus accrued interest to the redemption date, out of moneys available for such purpose in the Interest and Sinking Fund, on February 15 in the years and in the principal amounts as set forth in the following schedule: Year Principal (February 15) Amount 2010 $370,000 2011 720,000 2012 750,000 2013 775,000 2014 805,000 2015 840,000* Maturity* (b) At least forty-five (45) days prior to each scheduled mandatory redemption date, the Paying Agent/Registrar shall select for redemption by lot, or by any other customary method that results in a random selection, a principal amount of Notes equal to the aggregate principal amount of such Notes to be redeemed, shall call such Notes for redemption on such scheduled mandatory redemption date, and shall give notice of such redemption, as provided in Section 4.05. (c) The principal amount of the Notes required to be redeemed on any redemption date pursuant to subparagraph (a) of this Section 4.03 shall be reduced, at the option of the City, by the principal amount of any Notes which, at least 45 days prior to the mandatory sinking fund redemption date shall have been acquired by the City at a price not exceeding the principal amount of such Notes plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation. Section 4.04. Partial Redemption. (a) A portion of a single Note of a denomination greater than $5,000 may be redeemed, but only in a principal amount equal to $5,000 or any -9- 1500414v.4 GRA325/82001 integral multiple thereof. If such a Note is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000 portion of the Note as though it were a single Note for purposes of selection for redemption. (b) Upon surrender of any Note for redemption in part,the Paying Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate and deliver an exchange Note or Notes in an aggregate principal amount equal to the unredeemed portion of the Note so surrendered, such exchange being without charge, notwithstanding any provision of Section 3.06 to the contrary. Section 4.05. Notice of Redemption to Owners. (a) The Paying Agent/Registrar shall give notice of any redemption of Notes by sending notice by first class United States mail, postage prepaid, not less than three (3) days before the date fixed for redemption, to the Owner of each Note(or part thereof) to be redeemed, at the address shown in 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 Notes are to be surrendered for payment, and, if less than all the Notes outstanding are to be redeemed, an identification of the Notes 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 4.06. Payment Upon Redemption. (a) Before or on each redemption date, the City shall deposit with the Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Agent/Registrar shall make provision for the payment of the Notes 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 Notes being redeemed. (b) Upon presentation and surrender of any Note called for redemption at the Designated Payment/Transfer Office on or after the date fixed for redemption, the Paying Agent/Registrar shall pay the principal of, redemption premium, if any, and accrued interest on such Note to the date of redemption from the money set aside for such purpose. Section 4.07. Effect of Redemption. (a) Notice of redemption having been given as provided in Section 4.05 of this Ordinance, the Notes 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 Notes or portions thereof shall cease to bear interest from and after the date fixed for redemption, whether or not such Notes 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 Note or portion thereof called for redemption shall continue to bear pimp interest at the rate stated on the Note until due provision is made for the payment of same by the City. W° -10- 1500414v.4 GRA325/82001 ARTICLE V PAYING AGENT/REGISTRAR Section 5.01. Appointment of Initial Paying Agent/Registrar. Compass Bank, 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. (a) 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. The signature of the Mayor shall be attested by the City Secretary. (b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement. Section 5.04. Termination. The City, upon not less than 60 days notice, reserves the right to terminate the appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be terminated written notice of such termination, provided, that such termination shall not be effective until a successor Paying Agent/Registrar has been appointed and has accepted the duties of Paying Agent/Registrar for the Notes. Section 5.05. Notice of Change. 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 and any bond insurer by first class United States mail,postage prepaid, at the address in the Register, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. Section 5.06. Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar, and executing the Paying Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed thereby. Section 5.07. Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent,promptly upon the appointment of the successor, will deliver the Register(or a copy thereof) and all other pertinent books and records relating to the Notes to the successor Paying Agent/Registrar. -11- 1500414v.4 GRA325/82001 ARTICLE VI FORM OF THE NOTES Section 6.01. Form Generally. (a) The Notes, including 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 Initial Note submitted to the Attorney General of Texas and definitive Notes, if any, shall be typed, printed, lithographed, photocopied 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. omm (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,the form of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Notes, shall be substantially as follows: mom -12- 1500414v.4 GRA325/82001 (a) [Form of Note] REGISTERED REGISTERED No. $ United States of America State of Texas CITY OF GRAPEVINE, TEXAS TAX NOTES, SERIES 2008 CLOSING INTEREST RATE MATURITY DATE DATE CUSIP NO 3.900% February 15, December 31, 2008 The City of Grapevine(the"City") in the Counties of Tarrant, Johnson and Ellis, State of Texas, for value received, hereby promises to pay to or registered assigns, on the Maturity Date specified above,the sum of DOLLARS unless this Note shall have been sooner called for redemption and the payment of the principal hereof shall have been paid or provision for such payment shall have been made, and to pay interest on the unpaid principal amount hereof from the later of the Closing Date specified above or the most recent interest payment date to which interest has been paid or provided for until such principal amount shall have been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing February 15, 2010. 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 office in Fort Worth, Texas (the "Designated Payment/Transfer Office"), of Compass Bank, as initial Paying Agent/Registrar, or, with respect to a successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor. So long as the Purchaser (as defined in the Ordinance), is the Owner of record of the Notes, presentation and surrender of any Note is not required, and payment of such principal amount to the Owner may be by wire transfer. 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 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 -13- 1500414v.4 GRA325/82001 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 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 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 in which 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. This Note is one of a series of fully registered notes specified in the title hereof issued in the aggregate principal amount of$4,260,000 (herein referred to as the "Notes") pursuant to a certain ordinance of the City Council of the City (the "Ordinance") for the public purpose of MEP providing funds for authorized public improvements for and within the City, and to pay the costs of issuance related to 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 as described and provided in the Ordinance. The Notes are subject to mandatory sinking fund redemption and will be redeemed by the City, in part at a price equal to the principal amount thereof, without premium, plus accrued interest to the redemption date, out of moneys available for such purpose in the Interest and Sinking Fund, on February 15 in the years and in the principal amounts as set forth in the following schedule: Year Principal (February 15) Amount 2010 $370,000 2011 720,000 2012 750,000 2013 775,000 2014 805,000 2015 840,000* Imms *Maturity -14- 1500414v.4 GRA325/82001 The Paying Agent/Registrar will select by lot or by any other customary method that results in a random selection the specific Notes (in authorized denomination) to be redeemed by mandatory redemption. The principal amount of Notes required to be redeemed on any redemption date pursuant to the foregoing mandatory sinking fund redemption provisions hereof shall be reduced, at the option of the City, by the principal amount of Notes which, at least 45 days prior to the mandatory sinking fund redemption date shall have been acquired by the City at a price not exceeding the principal amount of such Notes plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation. Notice of such redemption or redemptions shall be given by first class mail, postage prepaid, not less than three(3) days before the date fixed for redemption,to the registered owner of each of the Notes to be redeemed in whole or in part. Notice having been so given, the Notes or portions thereof designated for redemption shall become due and payable on the redemption date specified in such notice; and, from and after such date, notwithstanding that any of the Notes or portions thereof so called for redemption shall not have been surrendered for payment, interest on such Notes or portions thereof shall cease to accrue. 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 of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar; 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. Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any Note 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 Note. 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 "Record Date" or "Special Record Date," as applicable) and for all other purposes, whether or not this Note be overdue, and neither the City, nor the Paying Agent/Registrar nor any other person shall be affected by notice 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; and that the total indebtedness of the City, including the Notes, does not exceed any constitutional or statutory limitation. -15- 1500414v.4 GRA325/82001 IN WITNESS WHEREOF, this Note has been duly executed on behalf of the City,under its official seal, in accordance with law. City Secretary, City of Grapevine,Texas Mayor, City of Grapevine,Texas (b) [Form of Certificate of Paying Agent/Registrar] CERTIFICATE OF PAYING AGENT/REGISTRAR This is one of the Notes referred to in the within mentioned Ordinance. The series of Notes of which this Note is a part was originally issued as one Initial Note which was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. COMPASS BANK as Paying Agent/Registrar Dated: By: PWW Authorized Signatory moo -16- 1500414v.4 GRA325/82001 (c) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED,the undersigned hereby sells, assigns, and transfers unto(print or typewrite name, address and Zip Code of transferee): (Social Security or other identifying number: ) the within 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. Date: NOTICE: The signature on this Assignment must Signature Guaranteed By: 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 in a manner acceptable to the Paying Agent/Registrar. Authorized Signatory (d) Initial Note Insertions. (i) The Initial Note shall be in the form set forth in paragraph (a) of this Section, except that: (ii) 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. "deleted; (iii) in the first paragraph: the words "on the Maturity Date specified above" shall be deleted and the following will be inserted: "on February 15 in 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(b)of this Ordinance) (iv) the Initial Note shall be numbered T-1. -17- 1500414v.4 GRA325/82001 pis (e) The following Registration Certificate of Comptroller of Public Accounts shall appear on the Initial Note: REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NO. THE STATE OF TEXAS § I HEREBY CERTIFY THAT there is on file and of record in my office a certificate to the effect that the Attorney General of the State of Texas has approved this Note, and that this Note has been registered this day by me. WITNESS MY SIGNATURE AND SEAL OF OFFICE this Comptroller of Public Accounts of the State of Texas [SEAL] •"'* Section 6.03. CUSIP Registration. The City may secure identification numbers through the CUSIP Service Bureau Division of Standard& Poor's Corporation, New York, New York, and may authorize the printing of such numbers on the face of the Notes. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Notes shall be of no significance or effect as regards 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 opinion of Vinson& Elkins L.L.P., Note Counsel, may be printed on each Note over the certification of the City Secretary of the City, which may be executed in facsimile. 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. To the extent permitted by applicable law, the City will comply with all notice and other applicable requirements of the insurer in connection with the issuance of the Notes, as such requirements may be in effect and transmitted to the City with the insurer's commitment to issue such insurance. map -18- 1500414v.4 GRA325/82001 ARTICLE VII SALE OF THE NOTES; CONTROL AND DELIVERY OF THE NOTES Section 7.01. Sale of Notes: Official Statement. (a) The Notes are hereby officially sold and awarded to Compass Bank (the "Purchaser") for a purchase price equal to the principal amount thereof, in accordance with the terms of the Purchase Agreement relating to the Notes. The Purchase Agreement, substantially in the form presented as this meeting, is hereby approved, and the Mayor is hereby authorized and directed to execute the Purchase Agreement. It is officially found, determined and declared that the terms of such sale are the most advantageous reasonably obtainable by the City. The Notes shall initially be registered in the name of the Purchaser or its designee. (b) All officers and officials of the City are authorized to take such actions and to execute such documents, certificates and receipts, and to make such elections with respect to the tax-exempt status of the Notes, as they may deem necessary and appropriate in order to consummate the delivery of the Notes. 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). (c) The obligation of the Purchaser identified in subsection (a) of this Section to accept delivery of the Notes is subject to the Purchaser being furnished with the final, approving opinion of Vinson& Elkins L.L.P.,Note Counsel for the City, which opinion shall be dated as of and delivered on the Closing Date. Section 7.02. Control and Delivery of Notes. (a) The Mayor 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 Purchaser under and subject to the general supervision and direction of the Mayor, against receipt by the City of all amounts due to the City under the terms of sale. (c) In the event the Mayor or City Secretary is absent or otherwise unable to execute any document or take any action authorized herein, the Mayor Pro Tern and the Assistant City Secretary, respectively, shall be authorized to execute such documents and take such actions, and the performance of such duties by the Mayor Pro Tern and the Assistant City Secretary shall for the purposes of this Ordinance have the same force and effect as if such duties were performed by the Mayor and City Secretary, respectively. -19- 1500414v.4 GRA325/8200] pow ARTICLE VIII CREATION OF FUNDS AND ACCOUNTS; DEPOSIT OF PROCEEDS; INVESTMENTS Section 8.01. Creation of Funds. (a) The City hereby establishes the following special funds or accounts: (i) The City of Grapevine, Texas, Tax Notes, Series 2008, Interest and Sinking Fund; and (ii) The City of Grapevine,Texas,Tax Notes, Series 2008, Project Fund. (b) Each of said funds or accounts shall be maintained at an official depository of the City. Section 8.02. Interest and Sinking Fund. (a) The taxes levied under Section 2.01 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 MIMS 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 8.03. Project Fund. (a) Money on deposit in the Project Fund, including investment earnings thereof, shall be used for the purposes specified in Section 3.01 of this Ordinance. (b) All amounts remaining in the Project Fund after the accomplishment of the purposes for which the Notes are hereby issued, including investment earnings of the Project Fund, shall be deposited into the Interest and Sinking Fund. Section 8.04. 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. Section 8.05. Deposit of Proceeds. (a) All amounts received on the Closing Date shall be deposited to the Project Fund, such moneys to be dedicated and used for the purposes specified in Section 3.01. Section 8.06. Investments. (a) Money in the Interest and Sinking Fund and the Project own Fund, at the option of the City, may be invested in such securities or obligations as permitted under applicable law. -20- 1500414v.4 GRA325/82001 (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 8.07. Investment Income. Interest and income derived from investment of any fund created by this Ordinance shall be credited to such fund. ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01. Payment of the Notes. 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 the interest on and the principal of the Notes, as applicable, as will accrue or mature on each 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, interest on, and premium, if any, with respect to, 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. Section 9.03. Provisions Concerning Federal Income Tax Exclusion. 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 the 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 Sections 9.03 through 9.10 of this Article IX; provided, however, that the City shall not be required to comply with any particular requirement of Sections 9.03 through 9.10 of this Article IX if the City has received an opinion of nationally recognized bond counsel ("Counsel's Opinion") that such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Notes or if the City has received a Counsel's Opinion to the effect that compliance with some other requirement set forth in Sections 9.03 through 9.10 of this Article IX will satisfy the applicable requirements of the Code, in which case compliance with such other requirement specified in -21- 1500414v.4 GRA325/82001 such Counsel's Opinion shall constitute compliance with the corresponding requirement specified in Sections 9.03 through 9.10 of this Article IX. Ms Section 9.04. 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 Notes are delivered, 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. Section 9.05. No Federal Guaranty. 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 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. Section 9.06. 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. Section 9.07. No-Arbitrage Covenant. 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 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. Section 9.08. 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 bond issue of the City or moneys which do not represent gross proceeds of any bonds of the City, (ii) calculate at such times as are required by the Regulations, the amount earned from the investment of the gross proceeds of the Notes -22- 15004I4v.4 GRA325/82001 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. Section 9.09. 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. Section 9.10. Qualified Tax-Exempt Obligations. The City hereby designates the Notes 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 2008, including the Notes, which 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 its tax-exempt obligations which will be issued by the City during calendar year 2008, including the Notes, will not exceed $10,000,000. For purposes of this Section 9.10, the term "tax-exempt obligations" does not include "private activity bonds" within the meaning of section 141 of the Code, other than "qualified 501(c)(3) bonds" within the meaning of section 145 of the Code. In addition, for purposes of this Section 9.10, the City includes all governmental units which are aggregate with the City under section 265(b) of the Code. Section 9.11. Continuing Obligation. Notwithstanding any other provision of this Ordinance, the City's obligations under the covenants and provisions of Sections 9.03 through 9.10 of this Article IX shall survive the defeasance and discharge of the Notes. 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: (i) the failure to make payment of the principal of, redemption premium, if any, or interest on any of the Notes when the same becomes due and payable; or (ii) 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 -23- 1500414v.4 GRA325/82001 vim 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 City reserves the right to defease, discharge or refund the Notes in any manner permitted by applicable law. ARTICLE XII EFFECTIVE IMMEDIATELY Section 12.01. Effectiveness. Notwithstanding the provisions of Article III, Section 3.13(c) of the City Charter, this Ordinance shall become effective immediately upon its adoption at this meeting pursuant to Section 1201.028,Texas Government Code. OMR -24- 1500414v.4 GRA325/82001 APPROVED this 16th day of December 2008. --. .P2e9. -‹ ---. Mayor,City of Grapevine, Texas ATTEST: c=ftc-- City Secretary, City of C 1.evine,Texas APPROVED AS TO FORM AND LEGALITY: City Attorney, City of Grapevine, Texas Ordinance Authorizing Issuance of 2008 Tax Notes MINUTES AND CERTIFICATION PERTAINING TO PASSAGE OF AN ORDINANCE STATE OF TEXAS § CITY OF GRAPEVINE § On the 16th day of December, 2008, the City Council of the City of Grapevine, Texas, convened in a regular meeting at the regular meeting place thereof, the meeting being open to the public and notice of said meeting, giving the date, place and subject thereof, having been posted as prescribed by Chapter 551, Texas Government Code, as amended; and the roll was called of the duly constituted officers and members of the City Council, which officers and members are as follows: William D. Tate, Mayor Mike Lease ) C. Shane Wilbanks, Mayor Pro Tern Sharron Spencer ) Members of Chris Coy ) the Council Darlene Freed ) Roy Stewart ) and all of said persons were present except , thus constituting a quorum. Whereupon, among other business, a written Ordinance bearing the following caption was introduced: AN ORDINANCE OF THE CITY OF GRAPEVINE, TEXAS, AUTHORIZING THE ISSUANCE AND SALE OF CITY OF GRAPEVINE, TEXAS, TAX NOTES, SERIES 2008, IN THE AGGREGATE PRINCIPAL AMOUNT OF $4,260,000; AWARDING THE SALE OF SAID NOTES; LEVYING A TAX IN PAYMENT THEREOF; PRESCRIBING THE FORM OF SAID NOTES; AND ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT The Ordinance, a full, true and correct copy of which is attached hereto, was read and reviewed by the City Council. Thereupon, it was duly moved and seconded that the Ordinance be finally passed and adopted. The Presiding Officer put the motion to a vote of the members of the City Council, and the Ordinance was finally passed and adopted by the following vote: AYES: 17 NAYS: O ABSTENTIONS: 0 Dallas 1501453v.2 MINUTES APPROVED AND CERTIFIED TO BE TRUE AND CORRECT, and to correctly reflect the duly constituted officers and members of the City Council of said City, and the attached and following copy of said Ordinance is hereby certified to be a true and correct copy of an official copy thereof on file among the official records of the City, all on this the I(O+h day of December, 2008. City ,ecretary, City sh rapevine, Texas [SEAL] Signature Page for Minutes and Certification Pertaining to Passage of Ordinance