HomeMy WebLinkAboutORD 2006-045 BOND ORDINANCE NO. 2006-45
relating to
$5,245,000
CITY OF GRAPEVINE, TEXAS
GENERAL OBLIGATION BONDS
SERIES 2006
Dated: July 15, 2006
Adopted: July 18, 2006
1142127v.1 GRA325/71011
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section 1.01. Definitions. 2
Section 1.02. Findings 3
Section 1.03. Table of Contents, Titles and Headings. 4
Section 1.04. Interpretation. 4
ARTICLE II
SECURITY FOR THE BONDS; INTEREST AND SINKING FUND
Section 2.01. Tax Levy. 4
Section 2.02. Interest and Sinking Fund. 5
ARTICLE III
AUTHORIZATION;GENERAL TERMS AND PROVISIONS REGARDING THE BONDS
Section 3.01. Authorization. 5
Section 3.02. Date, Denomination, Maturities and Interest. 5
Section 3.03. Medium, Method and Place of Payment. 6
Section 3.04. Execution and Registration of Bonds. 7
Section 3.05. Ownership. 8
Section 3.06. Registration, Transfer and Exchange. 8
Section 3.07. Cancellation 9
Section 3.08. Temporary Bonds. 9
Section 3.09. Replacement Bonds. 10
Section 3.10. Book-Entry-Only System. 11
Section 3.11. Successor Securities Depository;Transfer Outside Book-Entry Only System 12
Section 3.12. Payments to Cede&Co. 12
ARTICLE IV
REDEMPTION OF BONDS BEFORE MATURITY
Section 4.01. Limitation on Redemption. 12
Section 4.02. Optional Redemption. 13
Section 4.03. Partial Redemption. 13
Section 4.04. Notice of Redemption to Owners. 13
Section 4.05. Payment Upon Redemption. 14
Section 4.06. Effect of Redemption. 14
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ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01. Appointment of Initial Paying Agent/Registrar. 14
Section 5.02. Qualifications. 14
Section 5.03. Maintaining Paying Agent/Registrar. 15
Section 5.04. Termination. 15
Section 5.05. Notice of Change to Owners. 15
Section 5.06. Agreement to Perform Duties and Functions. 15
Section 5.07. Delivery of Records to Successor 15
ARTICLE VI
FORM OF THE BONDS
Section 6.01. Form Generally. 15
Section 6.02. Form of the Bonds. 16
Section 6.03. CUSIP Registration 21
Section 6.04. Legal Opinion. 21
Section 6.05. Statement of Insurance 21
ARTICLE VII
SALE AND DELIVERY OF BONDS, DEPOSIT OF PROCEEDS
Section 7.01. Sale of Bonds, Official Statement. 21
Section 7.02. Control and Delivery of Bonds 22
Section 7.03. Deposit of Proceeds. 23
Section 7.04. Security of Funds. 23
ARTICLE VIII
INVESTMENTS
Section 8.01. Investments 23
Section 8.02. Investment Income 24
ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01. Payment of the Bonds. 24
Section 9.02. Other Representations and Covenants. 24
Section 9.03. Provisions Concerning Federal Income Tax Exclusion. 24
Section 9.04. No Private Use or Payment and No Private Loan Financing. 25
Section 9.05. No Federal Guaranty 25
Section 9.06. Bonds are not Hedge Bonds. 25
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Section 9.07. No-Arbitrage Covenant 25
Section 9.08. Arbitrage Rebate. 26
Section 9.09. Information Reporting. 26
Section 9.10. Continuing Obligation. 26
ARTICLE X
DEFAULT AND REMEDIES
Section 10.01. Events of Default. 27
Section 10.02. Remedies for Default. 27
Section 10.03. Remedies Not Exclusive. 27
ARTICLE XI
DISCHARGE
Section 11.01. Discharge 28
ARTICLE XII
CONTINUING DISCLOSURE UNDERTAKING
Section 12.01. Annual Reports 28
Section 12.02. Material Event Notices 28
Section 12.03. Limitations, Disclaimers and Amendments. 29
Schedule I—Schedule of Refunded Bonds
Exhibit A- Description of Annual Disclosure of Financial Information A-1
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ORDINANCE NO. 2006-45
AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY
OF GRAPEVINE, TEXAS GENERAL OBLIGATION BONDS,
SERIES 2006, IN THE AGGREGATE PRINCIPAL AMOUNT
OF $5,245,000; AWARDING THE SALE OF SAID BONDS;
LEVYING A TAX IN PAYMENT THEREOF; PRESCRIBING
THE FORM OF SAID BONDS; APPROVING THE OFFICIAL
STATEMENT; AND ENACTING OTHER PROVISIONS
RELATING THERETO;
WHEREAS, the City intends to issue general obligation bonds to finance improvements
which the City Council determines to be necessary within the City;
WHEREAS, the bonds hereinafter authorized were duly and favorably voted, as required
by the Constitution and laws of the State of Texas, at an election held in the City of Grapevine,
Texas(the"City"), on Saturday, December 5, 1998;and
WHEREAS, at said election, the following are among the purposes and amounts of the
bonds which were authorized, reflecting any amount previously issued pursuant to each voted
authorization, the amount therefrom being issued pursuant to this Ordinance, and the balance that
remains unissued after the issuance of the bonds herein authorized,to wit:
Amount Amount Previously Amount Being Unissued
Purpose Voted Issued Issued Balance
Street Improvements $30,245,000 $24,997,314 $5,247,686* $-0-
*Includes$2,686 premium allocated to voted authorization with respect to the Bonds.
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 bonds 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 as required by law, and the public notice of
the time, place and purpose of said meeting was given as required by Chapter 551, Texas
Government Code, as amended;therefore
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE,
TEXAS:
1142127v.1 GRA3 2 517 1 01 1
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:
"Bond" means any of the Bonds.
"Bond Date" means the date designated as the date of the Bonds by Section 3.02(a) of
this Ordinance.
"Bonds" means the City's bonds authorized to be issued by Section 3.01 of this
Ordinance and designated as "City of Grapevine, Texas, General Obligation Bonds, Series
2006."
"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.
"City" means the City of Grapevine, Texas.
"Closing Date"means the date of the initial delivery of and payment for the Bonds.
"Code" means the Internal Revenue Code of 1986, as amended, including applicable
regulations,published rulings and court decisions.
"Designated Payment/Transfer Office" means (i) with respect to the initial Paying
Agent/Registrar named herein, its office in Dallas, 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.
"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.
"Event of Default" means any event of default as defined in Section 10.01 of this
Ordinance.
"Initial Bond" means the Initial Bond authorized by Section 3.04(d) of this Ordinance.
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"Interest and Sinking Fund" means the interest and sinking fund established by
Section 2.02 of this Ordinance.
"Interest Payment Date" means the date or dates on which interest on the Bonds is
scheduled to be paid until their respective dates of maturity or prior redemption, such dates being
February 15 and August 15, commencing February 15, 2007.
"MSRB"means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
"Owner" means the person who is the registered owner of a Bond or Bonds, as shown in
the Register.
"Paying Agent/Registrar" means initially JPMorgan Chase Bank, National Association,
or any successor thereto as provided in this Ordinance.
"Record Date" means the last Business Day of the month next preceding an Interest
Payment Date.
"Register"means the bond register specified in Section 3.06(a)of this Ordinance.
"Representations Letter" means the Blanket Letter of Representations previously
executed by the City and DTC and on file with DTC.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer or agency thereof, as and determined by the SEC or its staff to be a state information
depository within the meaning of the Rule from time to time.
"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, redemption premium, if any, or interest on the Bonds as the same come
due and payable or money set aside for the payment of Bonds duly called for redemption prior to
maturity.
Section 1.02. Findings.
The declarations, determinations and fmdings declared, made and found in the preamble
to this Ordinance are hereby adopted,restated and made a part of the operative provisions hereof
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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 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.
ARTICLE II
SECURITY FOR THE BONDS; INTEREST AND SINKING FUND
Section 2.01. Tax Levy.
(a) Pursuant to the authority granted by the Texas Constitution and the laws of
the State of Texas, there is hereby levied for the current year and for each succeeding
year hereafter while any of the Bonds 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 Bonds, being (i) the interest on the Bonds, and (ii) a sinking fund for
their redemption at maturity or a sinking fund of 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 Bonds
when and as due and payable in accordance with their terms and this Ordinance.
(d) To the extent the City has available funds which may be lawfully used to
pay debt service on the Bonds and such funds are on deposit in the Interest and Sinking
Fund in advance of the time when the City Council of the City is scheduled to set a tax
rate for any year, then such tax rate which would otherwise be required to be established
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pursuant to subsection(a) of this Section may be reduced to the extent and by the amount
of such funds in the Interest and Sinking Fund.
(e) 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 Bonds, there shall
be subtracted the amount of any Bonds that have been duly called for redemption and for
which money has been deposited with the Paying Agent/Registrar for such redemption.
Section 2.02. Interest and Sinking Fund.
(a) The City hereby establishes a special fund or account, to be designated the
"City of Grapevine, Texas General Obligation Bonds, Series 2006, Interest and Sinking
Fund," said fund to be maintained at an official depository bank of the City separate and
apart from all other funds and accounts of the City.
(b) Money on deposit in or required by this Ordinance to be deposited to the
Interest and Sinking Fund shall be used solely for the purpose of paying the interest on
and principal of the Bonds when and as due and payable in accordance with their terms
and this Ordinance.
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE BONDS
Section 3.01. Authorization.
The City's bonds to be designated "City of Grapevine, Texas General Obligation Bonds,
Series 2006," are hereby authorized to be issued and delivered in accordance with Tex. Const.
art. XI, Sec. 5, Chapter 1331 Texas Government Code, as amended, and Section 9.26 of the
City's Home-Rule Charter. The Bonds shall be issued in the aggregate principal amount of
$5,245,000, for the purpose of providing funds to (i) make the following permanent public
improvements, to wit: constructing, improving and widening streets and thoroughfares and
related utility relocation, drainage, landscaping, sidewalk and signalization improvements, and
acquiring land and interests in land therefore, and (ii)pay the costs of issuing the Bonds.
Section 3.02. Date, Denomination, Maturities and Interest.
(a) The Bonds shall be dated July 15, 2006. The Bonds 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, except the Initial Bond,
which shall be numbered T-1.
(b) The Bonds shall mature on February 15 in the years and in the principal
amounts set forth in the following schedule:
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Serial Bonds
Principal Interest Principal Interest
Year Amount Rate Year Amount Rate
2007 $140,000 2017 $260,000
2008 170,000 2018 270,000
2009 180,000 2019 285,000
2010 185,000 2020 300,000
2011 195,000 2021 315,000
2012 205,000 2022 330,000
2013 215,000 2023 345,000
2014 225,000 2024 360,000
2015 235,000 2025 380,000
2016 250,000 2026 400,000
(c) Interest shall accrue and be paid on each Bond respectively until its
maturity or prior redemption, from the later of the Bond Date or the most recent Interest
Payment Date to which interest has been paid or provided for at the rates per annum for
each respective maturity specified in the schedule contained in subsection (b) above.
Such interest shall be payable semiannually commencing on February 15, 2006, and on
each February 15 and August 15 thereafter until maturity or prior redemption. Interest on
the Bonds shall be calculated on the basis of a 360-day year composed of 12 months of
30 days each.
Section 3.03. Medium,Method and Place of Payment.
(a) The principal •A premium, if any, and interest on the Bonds shall be paid
in lawful money of the United States of America.
(b) Interest on the Bonds shall be payable to the Owners as shown in the
Register 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 Bond appearing on the Register at the close of business on
the last Business Day next preceding the date of mailing of such notice.
(c) Interest shall be paid by check, dated as of and mailed on the Interest
Payment Date, and sent by the Paying Agent/Registrar to each Owner, first class United
States mail, postage prepaid,to the address of each Owner as it appears in the Register, or
by such other customary banking arrangement acceptable to the Paying Agent/Registrar
and the Owner; provided, however,that the Owner shall bear all risk and expense of such
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other banking arrangement. At the option of an Owner of at least $1,000,000 principal
amount of the Bonds, 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 Bond shall be paid to the Owner on the due date
thereof (whether at the maturity date or the date of prior redemption thereof) upon
presentation and surrender of such Bond at the Designated Payment/Transfer Office of
the Paying Agent/Registrar.
(e) If the date for the payment of the principal of or interest on the Bonds
shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the
city where the Designated Payment/Transfer Office is located are required or authorized
by law or executive order to close, the date for such payment shall be the next succeeding
day which is not a Saturday, Sunday, legal holiday, or day on which banking institutions
are required or authorized to close, and payment on such 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.
(f) Unclaimed Payments shall be segregated in a special escrow account and
held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owners of
the Bonds to which the Unclaimed Payments pertain. Subject to Title 6 of the Texas
Property Code, any Unclaimed Payments remaining unclaimed by the Owners entitled
thereto for three years after the applicable payment or redemption date shall be applied to
the next payment or payments on the Bonds thereafter coming due and, to the extent any
such money remains after the retirement of all outstanding Bonds, shall be paid to the
City to be used for any lawful purpose. Thereafter, neither the City, the Paying
Agent/Registrar nor any other person shall be liable or responsible to any Owners of such
Bonds for any further payment of such unclaimed moneys or on account of any such
Bonds, subject to Title 6 of the Texas Property Code.
Section 3.04. Execution and Registration of Bonds.
(a) The Bonds shall be executed on behalf of the City by the Mayor and the
City Secretary, by their manual or facsimile signatures, and the official seal of the City
shall be impressed or placed in facsimile thereon. Such facsimile signatures on the
Bonds shall have the same effect as if each of the Bonds had been signed manually and in
person by each of said officers, and such facsimile seal on the Bonds shall have the same
effect as if the official seal of the City had been manually impressed upon each of the
Bonds.
(b) In the event that any officer of the City whose manual or facsimile
signature appears on the Bonds ceases to be such officer before the authentication of such
Bonds or before the delivery thereof; such manual or facsimile signature nevertheless
shall be valid and sufficient for all purposes as if such officer had remained in such
office.
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(c) Except as provided below, no Bond shall be valid or obligatory for any
purpose or be entitled to any security or benefit of this Ordinance unless and until there
appears thereon the Certificate of Paying Agent/Registrar substantially in the form
provided herein, duly authenticated by manual execution by an officer or duly authorized
signatory of the Paying Agent/Registrar. It shall not be required that the same officer or
authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying
Agent/Registrar on all of the Bonds. In lieu of the executed Certificate of Paying
Agent/Registrar described above, the Initial Bond delivered at the Closing Date shall
have attached thereto the Comptroller's Registration Certificate substantially in the form
provided herein, manually executed by the Comptroller of Public Accounts of the State of
Texas, or by his duly authorized agent, which Certificate shall be evidence that the Bond
has been duly approved by the Attorney General of the State of Texas and that it is a
valid and binding obligation of the City, and has been registered by the Comptroller of
Public Accounts of the State of Texas.
(d) On the Closing Date, one Initial Bond representing the entire principal
amount of all Bonds, payable in stated installments to the initial purchaser, or its
designee, executed manually or by facsimile by the Mayor and City Secretary of the City,
approved by the Attorney General, and registered and manually signed by the
Comptroller of Public Accounts, will be delivered to the initial purchaser or its designee.
Upon payment for the Initial Bond, the Paying Agent/Registrar shall cancel the Initial
Bond and deliver to DTC on behalf of the Purchaser one registered defmitive Bond for
each year of maturity of the Bonds in the aggregate principal amount of all Bonds for
such maturity, registered in the name of Cede&Co., as nominee of DTC.
Section 3.05. Ownership.
(a) The City, the Paying Agent/Registrar and any other person may treat the
person in whose name any Bond is registered as the absolute owner of such Bond for the
purpose of making and receiving payment of the principal thereof and redemption
premium, if any, thereon, for the further purpose of making and receiving payment of the
interest thereon, and for all other purposes (except interest will be paid to the person in
whose name such bond is registered on the Record Date or Special Record Date, as
applicable), whether or not such Bond is overdue, and neither the City nor the Paying
Agent/Registrar shall be bound by any notice or knowledge to the contrary.
(b) All payments made to the Owner of a Bond shall be valid and effectual
and shall discharge the liability of the City and the Paying Agent/Registrar upon such
Bond to the extent of the sums paid.
Section 3.06. Registration, Transfer and Exchange.
(a) So long as any Bonds 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 Bonds in
accordance with this Ordinance.
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(b) The ownership of a Bond may be transferred only upon the presentation
and surrender of the Bond at the Designated Payment/Transfer Office with such
endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar.
No transfer of any Bond shall be effective until entered in the Register.
(c) The Bonds shall be exchangeable upon the presentation and surrender
thereof at the Designated Payment/Transfer Office for a Bond or Bonds of the same
maturity and interest rate and in any denomination or denominations of any integral
multiple of$5,000 and in an aggregate principal amount equal to the unpaid principal
amount of the Bonds presented for exchange. The Paying Agent/Registrar is hereby
authorized to authenticate and deliver Bonds exchanged for other Bonds in accordance
with this Section.
(d) Each exchange Bond delivered by the Paying Agent/Registrar in
accordance with this Section shall constitute an original contractual obligation of the City
and shall be entitled to the benefits and security of this Ordinance to the same extent as
the Bond or Bonds in lieu of which such exchange Bond is delivered.
(e) No service charge shall be made to the Owner for the initial registration,
subsequent transfer, or exchange for a different denomination of any of the Bonds. The
Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover
any tax or other governmental charge that is authorized to be imposed in connection with
the registration,transfer or exchange of a Bond.
(f) Neither the City nor the Paying Agent/Registrar shall be required to issue,
transfer, or exchange any Bond called for redemption, in whole or in part, within 45
calendar days prior to the date fixed for redemption; provided, however, such limitation
shall not be applicable to an exchange by the Owner of the uncalled principal balance of a
Bond.
Section 3.07. Cancellation.
All Bonds paid or redeemed before scheduled maturity in accordance with this
Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are
authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper
records shall be made regarding such payment, redemption, exchange or replacement. The
Paying Agent/Registrar shall dispose of cancelled Bonds in accordance with the Securities
Exchange Act of 1934.
Section 3.08. Temporary Bonds.
(a) Following the delivery and registration of the Initial Bond and pending the
preparation of defmitive Bonds, the proper officers of the City may execute and, upon the
City's request, the Paying Agent/Registrar shall authenticate and deliver, one or more
temporary Bonds that are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any denomination, substantially of the tenor of the definitive Bonds in lieu
of which they are delivered, without coupons, and with such appropriate insertions,
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omissions, substitutions and other variations as the officers of the City executing such
temporary Bonds may determine, as evidenced by their signing of such temporary Bonds.
(b) Until exchanged for Bonds in definitive form, such Bonds in temporary
form shall be entitled to the benefit and security of this Ordinance.
(c) The City, without unreasonable delay, shall prepare, execute and deliver to
the Paying Agent/Registrar the Bonds in definitive form; thereupon, upon the
presentation and surrender of the Bonds in temporary form to the Paying Agent/Registrar,
the Paying Agent/Registrar shall cancel the Bonds in temporary form and shall
authenticate and deliver in exchange therefor Bonds of the same maturity and series, in
definitive form, in the authorized denomination, and in the same aggregate principal
amount, as the Bonds in temporary form surrendered. Such exchange shall be made
without the making of any charge therefor to any Owner.
Section 3.09. Replacement Bonds.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a
mutilated Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange
therefor a replacement Bond of like tenor and principal amount, bearing a number not
contemporaneously outstanding. The City or the Paying Agent/Registrar may require the
Owner of such Bond to pay a sum sufficient to cover any tax or other governmental
charge that is authorized to be imposed in connection therewith and any other expenses
connected therewith.
(b) In the event that any Bond is lost, apparently destroyed or wrongfully
taken, the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas
and in the absence of notice or knowledge that such Bond has been acquired by a bona
fide purchaser, shall authenticate and deliver a replacement Bond of like tenor and
principal amount, bearing a number not contemporaneously outstanding, provided that
the Owner first:
(i) furnishes to the Paying Agent/Registrar satisfactory evidence of his
or her ownership of and the circumstances of the loss, destruction or theft of such
Bond;
(ii) furnishes such security or indemnity as may be required by the
Paying Agent/Registrar to save it and the City harmless;
(iii) pays all expenses and charges in connection therewith, including,
but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar
and any tax or other governmental charge that is 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 Bond, a bona fide purchaser of
the original Bond in lieu of which such replacement Bond was issued presents for
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payment such original Bond, the City and the Paying Agent/Registrar shall be entitled to
recover such replacement Bond from the person to whom it was delivered or any person
taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the 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 Bond has become or is about to become due and payable, the Paying
Agent/Registrar, in its discretion, instead of issuing a replacement Bond, may pay such
Bond if it has become due and payable or may pay such Bond when it becomes due and
payable.
(e) Each replacement Bond delivered in accordance with this Section shall
constitute an original additional contractual obligation of the City and shall be entitled to
the benefits and security of this Ordinance to the same extent as the Bond or Bonds in
lieu of which such replacement Bond is delivered.
Section 3.10. Book-Entry-Only System.
(a) Notwithstanding any other provision hereof, upon initial issuance of the
Bonds, the Bonds shall be registered in the name of Cede & Co., as nominee of DTC.
The definitive Bonds shall be initially issued in the form of a single separate bond for
each of the maturities thereof.
(b) With respect to Bonds registered in the name of Cede & Co., as nominee
of DTC, the City and the Paying Agent/Registrar shall have no responsibility or
obligation to any DTC Participant or to any person on behalf of whom such a DTC
Participant holds an interest in the Bonds. Without limiting the immediately preceding
sentence, the City and the Paying Agent/Registrar shall have no responsibility or
obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any
DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to
any DTC Participant or any other person, other than an Owner, as shown on the Register,
of any notice with respect to the Bonds, including any notice of redemption, or (iii) the
payment to any DTC Participant or any other person, other than an Owner, as shown in
the Register of any amount with respect to principal of, premium, if any, or interest on
the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the
City and the Paying Agent/Registrar shall be entitled to treat and consider the person in
whose name each Bond is registered in the Register as the absolute owner of such Bond
for the purpose of payment of principal of, premium, if any, and interest on the Bonds,
for the purpose of giving notices of redemption and other matters with respect to such
Bond, for the purpose of registering transfer with respect to such Bond, and for all other
purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if
any, and interest on the Bonds only to or upon the order of the respective Owners as
shown in the Register, as provided in this Ordinance, or their respective attorneys duly
authorized in writing, and all such payments shall be valid and effective to fully satisfy
and discharge the City's obligations with respect to payment of, premium, if any, and
interest on the Bonds to the extent of the sum or sums so paid. No person other than an
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Owner, as shown in the Register, shall receive a certificate evidencing the obligation of
the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by
DTC to the Paying Agent/Registrar of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede & Co., the word "Cede & Co."
in this Ordinance shall refer to such new nominee of DTC.
(c) The Representations Letter previously executed and delivered by the City,
and applicable to the City's obligations delivered in book-entry-only form to DTC as
securities depository, is hereby ratified and approved for the Bonds.
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 Representations Letter of the City
to DTC, and that it is in the best interest of the beneficial owners of the Bonds that they be able
to obtain certificated Bonds, or in the event DTC discontinues the services described herein, the
City 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 of the appointment of such successor securities depository and transfer one or more
separate Bonds to such successor securities depository; or (ii) notify DTC and DTC Participants
of the availability through DTC of certificated Bonds and cause the Paying Agent/Registrar to
transfer one or more separate registered Bonds to DTC Participants having Bonds credited to
their DTC accounts. In such event,the Bonds shall no longer be restricted to being registered in
the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name
of the successor securities depository, or its nominee, or in whatever name or names Owners
transferring or exchanging Bonds shall designate, in accordance with the provisions of this
Ordinance.
Section 3.12. Payments to Cede&Co.
Notwithstanding any other provision of this Ordinance to the contrary, so long as any
Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect
to principal o1 premium, if any, and interest on such Bonds, and all notices with respect to such
Bonds, shall be made and given, respectively, in the manner provided in the Representations
Letter of the City to DTC.
ARTICLE IV
REDEMPTION OF BONDS BEFORE MATURITY
Section 4.01. Limitation on Redemption.
The Bonds shall be subject to redemption before scheduled maturity only as provided in
this Article IV.
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Section 4.02. Optional Redemption.
(a) The City reserves the option to redeem Bonds maturing on and after
February 15, 2017 in whole or any part, before their respective scheduled maturity dates,
on February 15, 2016 or on any date thereafter, such redemption date or dates to be fixed
by the City, at a price equal to the principal amount of the Bonds called for redemption
plus accrued interest to the date fixed for redemption.
(b) If less than all of the Bonds are to be redeemed pursuant to an optional
redemption, the City shall determine the maturity or maturities and the amounts thereof to
be redeemed and shall direct the Paying Agent/Registrar to call by lot the Bonds, or
portions thereof, within such maturity or maturities and in such principal amounts for
redemption.
(c) The City, at least 45 days before the redemption date, unless a shorter
period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying
Agent/Registrar of such redemption date and of the principal amount of Bonds to be
redeemed.
Section 4.03. Partial Redemption.
(a) A portion of a single Bond of a denomination greater than $5,000 may be
redeemed, but only in a principal amount equal to$5,000 or any integral multiple thereof
If such a Bond is to be partially redeemed, the Paying Agent/Registrar shall treat each
$5,000 portion of the Bond as though it were a single Bond for purposes of selection for
redemption.
(b) Upon surrender of any Bond for redemption in part, the Paying
Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate
and deliver an exchange Bond or Bonds in an aggregate principal amount equal to the
unredeemed portion of the Bond so surrendered, such exchange being without charge.
(c) The Paying Agent/Registrar shall promptly notify the City in writing of
the principal amount to be redeemed of any Bond as to which only a portion thereof is to
be redeemed.
Section 4.04. Notice of Redemption to Owners.
(a) The Paying Agent/Registrar shall give notice of any redemption of Bonds
by sending notice by first class United States mail, postage prepaid, not less than 30 days
before the date fixed for redemption, to the Owner of each Bond (or part thereof) to be
redeemed, at the address shown on the Register at the close of business on the Business
Day next preceding the date of mailing such notice.
(b) The notice shall state the redemption date, the redemption price, the place
at which the Bonds are to be surrendered for payment, and, if less than all the Bonds
outstanding are to be redeemed, an identification of the Bonds or portions thereof to be
redeemed.
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(c) Any notice given as provided in this Section shall be conclusively
presumed to have been duly given, whether or not the Owner receives such notice.
Section 4.05. Payment Upon Redemption.
(a) Before or on each redemption date, the City shall deposit with the Paying
Agent/Registrar money sufficient to pay all amounts due on the redemption date and the
Paying Agent/Registrar shall make provision for the payment of the Bonds to be
redeemed on such date by setting aside and holding in trust 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 Bonds being redeemed.
(b) Upon presentation and surrender of any Bond called for redemption at the
Designated Payment/Transfer Office on or after the date fixed for redemption,the Paying
Agent/Registrar shall pay the principal of, redemption premium, if any, and accrued
interest on such Bond to the date of redemption from the money set aside for such
purpose.
Section 4.06. Effect of Redemption.
(a) Notice of redemption having been given as provided in Section 4.04 of
this Ordinance, the Bonds or portions thereof called for redemption shall become due and
payable on the date fixed for redemption and, unless the City defaults in its obligation to
make provision for the payment of the principal thereof, redemption premium, if any, or
accrued interest thereon, such Bonds or portions thereof shall cease to bear interest from
and after the date fixed for redemption, whether or not such Bonds are presented and
surrendered for payment on such date.
(b) If the City shall fail to make provision for payment of all sums due on a
redemption date, then any Bond or portion thereof called for redemption shall continue to
bear interest at the rate stated on the Bond until due provision is made for the payment of
same by the City.
ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01. Appointment of Initial Paying Agent/Registrar.
JPMorgan Chase Bank, National Association, Dallas, Texas, is hereby appointed as the
initial Paying Agent/Registrar for the Bonds.
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 Bonds.
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Section 5.03. Maintaining Paying Agent/Registrar.
(a) At all times while any Bonds are outstanding, the City will maintain a
Paying Agent/Registrar that is qualified under Section 5.02 of this Ordinance. The
Mayor is hereby authorized and directed to execute an agreement (the "Paying
Agent/Registrar Agreement"), in the form presented at this meeting, 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 of the
City.
(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.
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 Bonds to the successor Paying Agent/Registrar.
ARTICLE VI
FORM OF THE BONDS
Section 6.01. Form Generally.
(a) The Bonds, including the Registration Certificate of the Comptroller of
Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and
the Assignment form to appear on each of the Bonds, (i) shall be substantially in the form
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set forth in this Article, with such appropriate insertions, omissions, substitutions, and
other variations as are permitted or required by this Ordinance, and (ii) may have such
letters, numbers, or other marks of identification (including identifying numbers and
letters of the Committee on Uniform Securities Identification Procedures of the American
Bankers Association) and such legends and endorsements (including any reproduction of
an opinion of counsel) thereon as, consistently herewith, may be determined by the City
or by the officers executing such Bonds, as evidenced by their execution thereof
(b) Any portion of the text of any Bonds may be set forth on the reverse side
thereof, with an appropriate reference thereto on the face of the Bonds.
(c) The definitive Bonds shall be typewritten, photocopied, printed,
lithographed, or engraved, and may be produced by any combination of these methods or
produced in any other similar manner, all as determined by the officers executing such
Bonds, as evidenced by their execution thereof
(d) The Initial Bond submitted to the Attorney General of the State of Texas
may be typewritten and photocopied or otherwise reproduced.
Section 6.02. Form of the Bonds.
The form of the Bond, including the form of the Registration Certificate of the
Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying
Agent/Registrar and the form of Assignment appearing on the Bonds, shall be substantially as
follows:
(a) Form of Bond.
REGISTERED REGISTERED
No. $
United States of America
State of Texas
County of Tarrant
CITY OF GRAPEVINE,TEXAS
GENERAL OBLIGATION BOND
SERIES 2006
INTEREST RATE: MATURITY DATE: BOND DATE: CUSIP NUMBER:
February 15, July 15, 2006
The City of Grapevine (the "City"), in the County of Tarrant, State of Texas, for value
received, hereby promises to pay to
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or registered assigns, on the Maturity Date specified above, the sum of
DOLLARS
unless this Bond shall have been sooner called for redemption and the payment of the principal
hereof shall have been paid or provided for, and to pay interest on such principal amount from
the later of the Bond Date specified above or the most recent interest payment date to which
interest has been paid or provided for until payment of such principal amount has been paid or
provided for, at the per annum rate of interest specified above, computed on the basis of a 360-
day year of twelve 30-day months, such interest to be paid semiannually on February 15 and
August 15 of each year, commencing February 15, 2007.
The principal of this Bond shall be payable without exchange or collection charges in
lawful money of the United States of America upon presentation and surrender of this Bond at
the designated office in Dallas, Texas (the "Designated Payment/Transfer Office"), of JPMorgan
Chase Bank, National Association, as initial Paying Agent/Registrar, or, with respect to a
successor paying agent/registrar, at the Designated Payment/Transfer Office of such successor.
Interest on this Bond is payable by check dated as of the interest payment date, and will be
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
arrangement acceptable to the Paying Agent/Registrar and the registered owner; provided,
however, such registered owner shall bear all risk and expense of such other banking
arrangement. At the option of the Owner of at least $1,000,000 principal amount of the Bonds,
interest may be paid by wire transfer to the bank account of such Owner on file with the Paying
Agent/Registrar. For the purpose of the payment of interest on this Bond, the registered owner
shall be the person in whose name this Bond is registered at the close of business on the "Record
Date," which shall be the last Business Day of the month next preceding such interest payment
date;provided, however, in the event of nonpayment of interest on a scheduled 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 date shall be
15 days after the Special Record Date) shall be sent at least five Business Days prior to the
Special Record Date by United States mail, first class, postage prepaid, to the address of each
Owner of a Bond 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.
If the date for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, legal holiday, or day on which banking institutions in the city where the Designated
Payment/Transfer Office is located are required or authorized by law or executive order to close,
the date for such payment shall be the next succeeding day which is not a Saturday, Sunday,
legal holiday, or day on which banking institutions are required or authorized to close, and
payment on such 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.
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This Bond is one of a series of fully registered bonds specified in the title hereof issued in
the aggregate principal amount of $5,245,000 (herein referred to as the `Bonds"), issued
pursuant to a certain ordinance of the City (the "Ordinance") for the purpose of providing funds
to make certain permanent public improvements within the City, and to pay the costs of issuing
the Bonds.
The City has reserved the option to redeem the Bonds maturing on or after February 15,
2017, in whole or in part, before their respective scheduled maturity dates, on February 15, 2016,
or on any date thereafter, at a price equal to the principal amount of the Bonds so called for
redemption plus accrued interest to the date fixed for redemption. If less than all of the Bonds
are to be redeemed, the City shall determine the maturity or maturities and the amounts thereof
to be redeemed and shall direct the Paying Agent/Registrar to call by lot or other customary
method that results in a random selection the Bonds, or portions thereof, within such maturity
and in such principal amounts, for redemption.
Notice of such redemption or redemptions shall be given by first class mail, postage
prepaid, not less than 30 days before the date fixed for redemption, to the registered owner of
each of the Bonds to be redeemed in whole or in part. Notice having been so given, the Bonds or
portions thereof designated for redemption shall become due and payable on the redemption date
specified in such notice; from and after such date, notwithstanding that any of the Bonds or
portions thereof so called for redemption shall not have been surrendered for payment, interest
on such Bonds or portions thereof shall cease to accrue.
As provided in the Ordinance, and subject to certain limitations therein set forth, this
Bond is transferable upon surrender of this Bond for transfer at the Designated Payment/Transfer
Office with such endorsement or other evidence of transfer as is acceptable to the Paying
Agent/Registrar;thereupon, one or more new fully registered Bonds of the same stated maturity,
of authorized denominations, bearing the same rate of interest, and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or
exchange any Bond called for redemption where such redemption is scheduled to occur within
45 calendar days of the date fixed for redemption; provided, however, such limitation shall not
be applicable to an exchange by the registered owner of the uncalled principal balance of a Bond.
The City, the Paying Agent/Registrar, and any other person may treat the person in whose
name this Bond is registered as the owner hereof for the purpose of receiving payment as herein
provided(except interest shall be paid to the person in whose name this Bond is registered on the
Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the
City nor the Paying Agent/Registrar shall be affected by notice to the contrary.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond and the
series of which it is a part is duly authorized by law;that all acts, conditions and things required
to be done precedent to and in the issuance of the Bonds have been properly done and performed
and have happened in regular and due time, form and manner, as required by law; and 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 Bonds, within the limit prescribed by law; that
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when so collected, such taxes shall be appropriated to such purpose; and that the total
indebtedness of the City, including the Bonds, does not exceed any constitutional or statutory
limitation.
IN WITNESS WHEREOF, the City has caused this Bond to be executed by the manual
or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile
signature of the City Secretary of the City, and the official seal of the City has been duly
impressed or placed in facsimile on this Bond.
City Secretary, City of Grapevine, Texas Mayor, City of Grapevine, Texas
[SEAL]
(b) Form of Comptroller's Registration Certificate. The following
Comptroller's Registration Certificate may be deleted from the definitive Certificates if
such certificate on the Initial Certificate is fully executed.
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS § REGISTER NO.
OF THE STATE OF TEXAS §
I hereby certify that there is on file and of record in my office a certificate of the Attorney
General of the State of Texas to the effect that this Certificate 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 Certificate 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]
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(c) Form of Certificate of Paying Agent/Registrar.
The following Certificate of Paying Agent/Registrar may be deleted from the Initial Bond
if the Comptroller's Registration Certificate appears thereon.
CERTIFICATE OF PAYING AGENT/REGISTRAR
The records of the Paying Agent/Registrar show that the Initial Bond of this series of
bonds was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas, and that this is one of the Bonds referred
to in the within-mentioned Ordinance.
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION,
as Paying Agent/Registrar
Dated: By:
Authorized Signatory
(d) Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
(print or typewrite name, address and Zip Code of transferee):
(Social Security or other identifying number: ) the within Bond and all
rights hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration hereof, with full power of
substitution in the premises.
Dated: NOTICE: The signature on this Assignment
must correspond with the name of the
Signature Guaranteed By: registered owner as it appears on the face of
the within Bond in every particular and must
be guaranteed in a manner acceptable to the
Paying Agent/Registrar.
Authorized Signatory
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(e) The Initial Bond shall be in the form set forth in paragraphs(a), (b) and (d)
of this Section, except for the following alterations:
(i) immediately under the name of the Certificate the headings
"INTEREST RATE" and "MATURITY DATE" shall both be completed with the
expression "As shown below" and the words "CUSIP NUMBER:" shall be
deleted;
(ii) in the first paragraph of the Bond, the words "on the maturity date
specified above" shall be deleted and the following will be inserted: "on
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 Rate
(Information to be inserted from schedule in Section 3.02 of this Ordinance)
(iii) the Initial Bond shall be numbered T-1.
Section 6.03. CUSIP Registration.
The City may secure identification numbers through the CUSIP Service Bureau Division
of Standard&Poor's Corporation,New York,New York, and may authorize the printing of such
numbers on the face of the Bonds. It is expressly provided, however, that the presence or
absence of CUSIP numbers on the Bonds shall be of no significance or effect as regards the
legality thereof and neither the City nor the attorneys approving said Bonds as to legality are to
be held responsible for CUSIP numbers incorrectly printed on the Bonds.
Section 6.04. Legal Opinion.
The approving legal opinion of Vinson & Elkins L.L.P., Bond Counsel, may be printed
on the reverse side of or attached to each Bond over the certification of the City Secretary of the
City, which may be executed in facsimile.
Section 6.05. Statement of Insurance.
A statement relating to a municipal bond insurance policy, if any, to be issued for the
Bonds may be printed on or attached to each Bond.
ARTICLE VII
SALE AND DELIVERY OF BONDS,DEPOSIT OF PROCEEDS
Section 7.01. Sale of Bonds, Official Statement.
(a) The Bonds, having been duly advertised for public sale and a bid or bids
received pursuant thereto, are hereby officially sold and awarded to
(the "Purchaser"), having submitted the bid which produced the lowest true interest cost
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to the City for a purchase price equal to % of the principal amount thereof, plus
interest accrued thereon to the date of initial delivery. The Bonds shall be initially
registered in the name of the Purchaser or its designee.
(b) The form and substance of the Preliminary Official Statement for the
Bonds dated July 7, 2006, as amended, and any addenda, supplement or amendment
thereto (the "Preliminary Official Statement"), and the final Official Statement (the
"Official Statement") presented to and considered at this meeting, are hereby in all
respects approved and adopted, and the Preliminary Official Statement is hereby deemed
final as of its date (except for the omission of pricing and related information) within the
meaning and for the purposes of paragraph (b)(1) of Rule 15c2-12 under the Securities
Exchange Act of 1934, as amended. The Mayor of the City is hereby authorized and
directed to execute the Official Statement and deliver appropriate numbers of 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 Purchaser, may be used by the Purchasers in the public offering of the Bonds and
the 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 for the Bonds in the preliminary public
offering of the Bonds by the Purchasers are hereby ratified, approved and confirmed.
(c) All officers of the City are authorized to execute such documents,
certificates and receipts, and to make such elections with respect to the tax-exempt status
of Bonds, as they may deem appropriate in order to consummate the delivery of the
Bonds in accordance with the provisions and terms of sale therefor. Further, in
connection with the submission of the record of proceedings for the Certificates to the
Attorney General of the State of Texas for examination and approval of such Certificates,
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 Certificates or
(ii) $9,500).
(d) The obligation of the Purchasers identified in subsection (a) of this
Section to accept delivery of the Bonds is subject to such purchaser being furnished with
the final, approving opinion of Vinson &Elkins L.L.P., bond counsel for the City, which
opinion shall be dated and delivered the Closing Date.
Section 7.02. Control and Delivery of Bonds.
(a) The Mayor of the City is hereby authorized to have control of the Initial
Bond and all necessary records and proceedings pertaining thereto pending investigation,
examination and approval of the Attorney General of the State of Texas, registration by
the Comptroller of Public Accounts of the State and registration with, and initial
exchange or transfer by, the Paying Agent/Registrar.
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(b) After registration by the Comptroller of Public Accounts, delivery of the
Bonds shall be made to the initial purchasers thereof under and subject to the general
supervision and direction of the Mayor, against receipt by the City of all amounts due to
the City under the terms of sale.
(c) In the event the Mayor or City Secretary is absent or otherwise unable to
execute any document or take any action authorized herein, the Mayor Pro Tem and the
Assistant City Secretary, respectively, shall be authorized to execute such documents and
take such actions, and the performance of such duties by the Mayor Pro 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.
Section 7.03. Deposit of Proceeds.
On the Closing Date, the City shall cause the proceeds from the sale of the Bonds to be
deposited as follows:
(a) All amounts received on the Closing Date as accrued interest on the Bonds
from the Bond Date to the Closing Date shall be deposited to the Interest and Sinking
Fund.
(b) The remaining balance of proceeds of the Bonds shall be deposited to a
special account of the City, such moneys to be dedicated and used solely for the purposes
specified in Section 3.01, including costs of issuance of the Bonds.
Section 7.04. Security of Funds.
All moneys on deposit in 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 the Interest and Sinking Fund created by this Ordinance, at the
option of the City, may be invested in such securities or obligations as permitted under
applicable law as in effect on the date of the investment.
(b) Any securities or obligations in which money in the Interest and Sinking
Fund 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 Interest and Sinking Fund.
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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 the investment of funds deposited
pursuant to Section 7.03(c) hereof shall be credited to the fund or account where
deposited until completion of the Projects; thereafter, to the extent such interest and
income are present, such interest and income shall be deposited to the Interest and
Sinking Fund.
(c) The investment and application of money in the Escrow Fund shall be in
accordance with the provisions of the Escrow Agreement.
ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01. Payment of the Bonds.
On or before each Interest Payment Date for the Bonds and while any of the Bonds 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, principal of, and redemption
premium, if any, on the Bonds as will accrue or mature on the applicable Interest Payment Date,
maturity date or date of prior redemption if any.
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 Bond;
the City will promptly pay or cause to be paid the principal of, redemption premium, if
any, and interest on each Bond on the dates and at the places and manner prescribed in
such Bond; 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 Bonds; all action on its part for the creation and issuance of the Bonds has been duly
and effectively taken; and the Bonds 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 Bonds shall be excludable from gross income for
purposes of federal income tax purposes pursuant to sections 103 and 141 through 150 of the
Code and the applicable Income Tax 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 Bonds to
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be includable in gross income, as defined in section 61 of the Code, for purposes of federal
income taxation. In particular, the City covenants and agrees to comply with each requirement
of this Article IX; provided, however, that the City shall not be required to comply with any
particular requirement 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 Bonds
or if the City has received a Counsel's Opinion to the effect that compliance with some other
requirement set forth in this Article IX will satisfy the applicable requirements of the Code and
the Regulations, in which case compliance with such other requirement specified in such
Counsel's Opinion shall constitute compliance with the corresponding requirement specified in
this Article IX.
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 Bonds are
delivered, that the proceeds of the Refunded Bonds have not been used and the proceeds of the
Bonds will not be used in a manner that would cause the Bonds to be "private activity bonds"
within the meaning of section 141 of the Code and the Regulations promulgated thereunder.
Moreover,the City covenants and agrees that it will make such use of the proceeds of the Bonds
and the Refunded Bonds, including interest or other investment income derived from Bond
proceeds, regulate the use of property fmanced, directly or indirectly, with such proceeds, and
take such other and further action as may be required so that the bonds will not be "private
activity bonds" within the meaning of section 141 of the Code and the Regulations promulgated
thereunder.
Section 9.05. No Federal Guaranty.
The City covenants and agrees not to take any action, or knowingly omit to take any
action or knowingly omit to take any action within its control, that, if taken or omitted,
respectively, would cause the Bonds to be "federally guaranteed" within the meaning of section
149(b) of the Code and the applicable Regulations thereunder, except as permitted by section
149(b)(3) of the Code and such Regulations.
Section 9.06. Bonds 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 Bonds to be "hedge bonds"
within the meaning of section 149(g)of the Code and the applicable Regulations thereunder.
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 Bonds are
delivered, the City will reasonably expect that the proceeds of the Bonds will not be used in a
manner that would cause the Bonds to be"arbitrage bonds"within the meaning of section 148(a)
of the Code and the applicable Regulations thereunder. Moreover, the City covenants and agrees
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that it will make such use of the proceeds of the Bonds including interest or other investment
income derived from Bond proceeds, regulate investments of proceeds of the Bonds, and take
such other and further action as may be required so that the Bonds will not be "arbitrage bonds"
within the meaning of section 148(a) of the Code and the applicable Regulations promulgated
thereunder.
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 Bonds (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 Bonds as may be
required to calculate the amount earned on the investment of the gross proceeds of the Bonds
separately from records of amounts on deposit in the funds and accounts of the City allocable to
other bond issue of the City or moneys which do not represent gross proceeds of any bonds of
the City, (ii) calculate at such times as are required by applicable Regulations,the amount earned
from the investment of the gross proceeds of the Bonds which is required to be rebated to the
federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery
of the Bonds or on such other dates as may be permitted under applicable Regulations, all
amounts required to be rebated to the federal government. Further, the City will not indirectly
pay any amount otherwise payable to the federal government pursuant to the foregoing
requirements to any person other than the federal government by entering into any investment
arrangement with respect to the gross proceeds of the Bonds that might result in a reduction in
the amount required to be paid to the federal government because such arrangement results in a
smaller profit or a larger loss than would have resulted if the arrangement had been at arm's
length and had the yield on the issue not been relevant to either party.
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 Bonds are issued, an information statement concerning the Bonds, all under
and in accordance with section 149(e) of the Code and the Regulations promulgated thereunder.
Section 9.10. Continuing Obligation.
Notwithstanding any other provision of this Ordinance, the City's obligations under the
covenants and provisions of this Article IX shall survive the defeasance and discharge of the
Bonds.
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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:
(i) the failure to make payment of the principal of redemption
premium, if any, or interest on any of the Bonds 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, which default materially and 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 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 Bonds 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 Bonds 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 Bonds
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.
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ARTICLE XI
DISCHARGE
Section 11.01. Discharge.
The Bonds may be defeased, refunded and discharged in any manner permitted by
applicable law.
ARTICLE XH
CONTINUING DISCLOSURE UNDERTAKING
Section 12.01. Annual Reports.
(a) The City shall provide annually to each NRMSIR and to any SID, 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 fmal 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. If the
audit of such financial statements is not complete within such period, then the City shall
provide notice that audited financial statements are not available and shall provide
unaudited financial statements for the applicable fiscal year to each NRMSIR and any
SID. The City shall provide audited financial statements for the applicable fiscal year to
each NRMSIR and to any SID. Thereafter, when and if audited fmancial statements
become available, the City shall provide such audited financial statements as required to
each NRMSIR and to any SID.
(b) If the City changes its fiscal year, it will notify each NRMSIR and any
SID of the change (and of the date of the new fiscal year end) prior to the next date by
which the City otherwise would be required to provide financial information and
operating data pursuant to this Section.
(c) The financial information and operating data to be provided pursuant to
this Section may be set forth in full in one or more documents or may be included by
specific reference to any document (including an official statement or other offering
document, if it is available from the MSRB) that theretofore has been provided to each
NRMSIR and any SID or filed with the SEC.
Section 12.02. Material Event Notices.
(a) The City shall notify any SID and either each NRMSIR or the MSRB, in a
timely manner, of any of the following events with respect to the Bonds, if such event is
material within the meaning of the federal securities laws:
(i) principal and interest payment delinquencies;
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(ii) nonpayment related defaults;
(iii) unscheduled draws on debt service reserves reflecting financial
difficulties;
(iv) unscheduled draws on credit enhancements reflecting financial
difficulties;
(v) substitution of credit or liquidity providers, or their failure to
perform;
(vi) adverse tax opinions or events affecting the tax exempt status of
the Bonds;
(vii) modifications to rights of Owners;
(viii) bond calls;
(ix) defeasance;
(x) release, substitution, or sale of property securing repayment of the
Bonds;and
(xi) rating changes.
(b) The City shall notify any SID and either each NRMSIR or the MSRB, in a
timely manner, of any failure by the City to provide financial information or operating
data in accordance with Section 12.01 of this Ordinance by the time required by such
Section.
Section 12.03.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 Bonds within the meaning of the Rule, except that the City in
any event will give notice of any deposit made in accordance with Article XI that causes
Bonds no longer to be outstanding.
(b) The provisions of this Article are for the sole benefit of the Owners and
beneficial owners of the Bonds, and nothing in this Article, express or implied, shall give
any benefit or any legal or equitable right, remedy, or claim hereunder to any other
person. The City undertakes to provide only the financial information, operating data,
financial statements, and notices which it has expressly agreed to provide pursuant to this
Article and does not hereby undertake to provide any other information that may be
relevant or material to a complete presentation of the City's financial results, condition,
or prospects or hereby undertake to update any information provided in accordance with
this Article or otherwise, except as expressly provided herein. The City does not make
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any representation or warranty concerning such information or its usefulness to a decision
to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER
OR BENEFICIAL OWNER OF ANY BOND 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.
(c) No default by the City in observing or performing its obligations under
this Article shall comprise a breach of or default under the Ordinance for purposes of any
other provisions of this Ordinance.
(d) Nothing in this Article is intended or shall act to disclaim, waive, or
otherwise limit the duties of the City under federal and state securities laws.
(e) The provisions of this Article may be amended by the City from time to
time to adapt to changed circumstances that arise from a change in legal requirements, a
change in law, or a change in the identity, nature, status, or type of operations of the City,
but only if(i) the provisions of this Article, as so amended, would have permitted an
underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance
with the Rule, taking into account any amendments or interpretations of the Rule to the
date of such amendment, as well as such changed circumstances, and (ii) either (A) the
Owners of a majority in aggregate principal amount (or any greater amount required by
any other provisions of this Ordinance that authorizes such an amendment) of the
outstanding Bonds consent to such amendment or(B) an entity or individual a person that
is unaffiliated with the City(such as nationally recognized bond counsel) determines that
such amendment will not materially impair the interests of the Owners and beneficial
owners of the Bonds. If the City so amends the provisions of this Article, it shall include
with any amended financial information or operating data next provided in accordance
with Section 12.01 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.
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APPROVED AND ADOPTED this July 18, 2006.
Mayor, City of Grapevine, Texas
ATTEST:
City S cretary, City of G e e, Texas
APPROVED AS TO FORM:
By:
City Attorney, City of Grapevine, Texas
Signature Page for Bond Ordinance
EXHIBIT A
DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION
The following information is referred to in Article XII of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Article are as specified (and included in the Appendix or other
headings of the Official Statement referred to)below:
1. The portions of the fmancial statements of the City appended to the Official
Statement as Appendix B, but for the most recently concluded fiscal year.
2. Statistical and financial data set forth in Tables numbered 1 through 6 and 8
through 15.
Accounting Principles
The accounting principles referred to in such Article are the accounting principles
described in the notes to the financial statements referred to in Paragraph 1 above.
A-1