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Home My WebLink AboutORD 1997-121 ORDINANCE NO. 97-121 ORDINANCE AUTHORIZING THE ISSUANCE OF $1,900,000 CITY OF GRAPEVINE,TEXAS A EQUIPMENTACQUISITION NOTES SERIES 1997 �.. .;, Adopted: November 18, 1997 � � 6.1\F:\FINAN�GRA325�230 W\ORDINANC. 12/16/97:(5:37pm) TABLE OF CONTENTS " _. Pa�e �� Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 T�Levy for Payment of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 ARTICLE III AUTHORIZATION;GENERAL TERMS AND PROVISIONS � N REGARDING THE NOTES Section 3.01 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Section 3.02 Date, Denomination,Maturities, Numbers and Interest . . . . . . . . . . . . . . . . . . . . . . 5 Section 3.03 Medium, Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 3.04 Execution and Initial Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 3.05 Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Section 3.06 Registration,Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Section 3.07 Cancellation and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 3.08 Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 3.09 Replacement Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 3.10. Book-Entry Only System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Section 3.11. Successor Securities Depository; Transfer Outside Book-Entry Only System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Section 3.12. Payments to Cede& Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 ARTICLE IV REDEMPTION OF NOTES BEFORE MATURITY � Section 4.01 Limitation on Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 � 6.I\F:\FINAMG RA325�23000\ORDI NANC. 12/16/97:(5:37pm) �� Page ARTICLE V �'°�' PAYING AGENT/REGISTRAR Section 5.02 Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 5.03 Maintaining Paying Agent/Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 5.04 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 5.05 Notice of Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 5.06 Agreement to Perform Duties and Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 5.07 Delivery of Records to Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 ARTICLE VI FORM OF THE NOTES Section 6.01 Form Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 6.02 Form of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 6.03 CUSIP Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Section 6.04 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Section 6.05 Municipal Bond Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 ` ' ARTICLE VII �,, >� CREATION OF FUNDS AND ACCOUNTS;INITIAL DEPOSITS AND APPLICATION OF MONEY Section 7.01 Creation of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Section 7.02 Initial Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Section 7.03 Interest and Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Section 7.04 Acquisition Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 7.05 Excess Note Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 7.06 Security of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 ARTICLE VIII INVESTMENTS Section 8.01 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 8.02 InvestmentIncome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 ARTICLE IX �. PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01 Payment of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 � Section 9.02 Other Representations and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 6.I\F:\PI NAN�G RA325�23000\ORDI NAW C. 12/16/97:(5:37pm) �11� Pa�e Section 9.03 Federal Income Tax Exclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 �°�� ARTICLE X DEFAULT AND REMEDIES Section 10.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Section 10.02 Remedies for Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Section 10.03 Remedies Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 ARTICLE XI DISCHARGE Section 11.01 Discharge by Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Section 11.02 Discharge by Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 ARTICLE XII SALE AND DELIVERY OF THE NOTES; APPROVAL OF OFFICIAL STATEMENT, � CONTROLAND DELIVERY OF NOTES ,� , Section 12.01 Sale of Notes; Official Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Section 12.02 Control and Delivery of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 ARTICLE XIII CONTINUING DISCLOSURE UNDERTAKING Section 13.01 Definitions of Continuing Disclosure Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Section 13.02 Annual Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Section 13.03 Material Event Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Section 13.04 Limitations,Disclaimers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 ARTICLE XIV PROVISIONS RELATING TO BOND INSURANCE Section 14.01 Applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Section 14.02 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Section 14.03 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Section 14.04 Claims Upon the Insurance Policy and Payments by and to the Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Section 14.05 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 � 6.I�F:\FI NAMGRA325�23000\ORDINANC. IZ/16/97:(5:37pm) �111� Paee ARTICLE XV � ` MISCELLANEOUS MATTERS Section 15A1 Emergency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 EXECUTION PAGE SCHEDULE I - Personal Property to be Acquired EXHIBIT A-Description of Annual Disclosure of Financial Information �, , � r� 6.I�F:�FINAMGRA325�23000\ORDiNMIC. �1V� 12/16/97:(5:37pm) ORDINANCE NO. 97-1Z1 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAPEVINE,� � TEXAS, AUTHORIZING THE ISSUANCE AND SALE OF CITY OF GRAPEVINE,TEXAS, EQUIPMENT ACQUISITION NOTES,SERIES 1997, IN THE AGGREGATE PRINCIPAL AMOUNT OF$1,900,000; PRESCRIBING THE �` � FORM OF SAID NOTES;AWARDING THE SALE THEREOF;LEVYING A TAX IN PAYMENT THEREOF; APPROVING THE OFFICIAL STATEMENT; ENACTING OTHER PROVISIONS RELATING THERETO;DECLARING AN EMERGENCY;AND PROVIDING AN EFFECTIVE DATE WHEREAS, pursuant to TEX. REV. CIV. STAT. ANN. art. 717w (the "AcY'), the governing body of a municipality is authorized to issue the notes hereinafter authorized (herein called"Notes") to pay a contractual obligation incurred or to be incurred for the purpose of the purchase of materials, supplies,equipment,machinery,buildings,lands and rights-of-way for an issuer's authorized needs and purposes; and WHEREAS, this governing body (the "City Council") of the City of Gainesville, Texas (the "City")hereby finds and determines that it is necessary,useful and appropriate for its public purposes to acquire or purchase the various types of capital equipment described in Schedule I (the"Property"); and WHEREAS, the Property will be used for authorized public purposes of the City and will be acquired in compliance with applicable laws relating to competitive bidding;and � WHEREAS,the City Council finds it is in the best interest of the City and its citizens to adopt this Ordinance and issue such Notes for the purposes herein described and that such Notes shall be � � payable from and secured by ad valorem taxes,limited as to rate and amount, on all taxable property within the City; 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 meeting at which this Ordinance is considered is open to the public as required by law, and public notice of the time, place and purpose of said meeting was given as required by Chapter 551,Texas Government Code, as amended; NOW,THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE,TEXAS: ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section 1.01 Definitions. Unless otherwise expressly provided or unless the context clearly requires otherwise in this Ordinance, the following terms shall have the meanings specified below: � 6.I\F:\FTNAMGRA325�23000\ORDI NANC. 12/16/91:(5:37pm) "Acquisition Fund"means the acquisition fund established by Section 7.01(a)(ii). "Business Day"means a day that is not a Saturday,Sunday,legal holiday or other day on which ,��» banking institutions in the city where the Designated Payment/Transfer Office is located are required or authorized by law or executive order to close. "Charter"means the Home Rule Charter of the City, as amended. "Closing Date"means the date of the initial delivery of and payment for the Notes. "Code" means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings and court decisions relating thereto. "Designated Payment/Transfer Office" means (i) with respect to the initial Paying Agent/Registrar named herein,its corporate trust office in 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. "DTC"shall mean The Depository Trust Company of New York, New York, or any successor securities depository. "DTC Participant"shall mean brokers and dealers,banks,trust companies,clearing corporations � � and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants. �,. , "Event of Default"means any Event of Default as defined in Section 10.01 of this Ordinance. "Initial Note"means the Initial Note described in Section 3.04(d) and Section 6.02(d) of this Ordinance. "Interest and Sinking Fund" means the interest and sinking fund established by Section 7.01(a)(i). "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 August 15, 1998. "Note" means any of the Notes. "Notes" means the City's equipment acquisition notes entitled "City of Grapevine, Texas, Equipment Acquisition Notes,Series 1997"in the aggregate principal amount of$1,900,000 authorized to be issued by Section 3.01 of this Ordinance. "Original Issue Date"means the date designated as such in Section 3.02(a) of this Ordinance. "Owner" means the person who is the registered owner of a Note or Notes, as shown in the r..� Register. 6.I�F:�FINMI�GRA325�23IX10\ORDI NANC. 12/16/97:(5:37pm) -�- "Paying Agent/Registrar" means initially Bank One,Texas, N.A., Fort Worth, any successor �N thereto or any entity which is appointed as and assumes the duties of paying agent/registrar as provided in this Ordinance. ""�� "Paying Agent/Registrar Agreement"means that certain Paying Agent/Registrar Agreement by and between the City and the Paying Agent,dated as of November 15, 1997,pertaining to the Notes. "Property" means the property described on Schedule I hereto. "Purchaser"means the Purchaser described in Section 12.01. "Record Date"means the last Business Day of the month next preceding an Interest Payment Date. "Register"means the Register specified in Section 3.06(a) of this Ordinance. "Representation Letter" means the Blanket Letter of Representations between the City and DTC. "Special Payment Date"means the Special Payment Date prescribed by Section 3.03(b). "Special Record Date"means the Special Record Date prescribed by Section 3.03(b). � "Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the payment of principal of or interest on the Notes as the same come due and payable and remaining � unclaimed by the Owners of such Notes for 90 days after the applicable payment date. Section 1.02 Other Definitions. The terms"Act," "City Council" and"City"shall have the respective meanings assigned in the preamble to this Ordinance. Section 1.03 Findin�s. 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 Headin�s. The table of contents, titles and headings of the Articles and Sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. Section 1.05 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) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of this Ordinance. � 6.1\F:�FINAMGRA325�23IX10\ORDINANC. -�- 12/16/97:(5:37pm) (c) Article and section references shall mean references to articles and sections of this � ' Ordinance unless designated otherwise. �� ARTICLE II SECURITY FOR THE NOTES Section 2.01 Tax Levy for Payment of the Notes. (a) The City Council hereby declares and covenants that it will provide and levy a t�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 t�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, a tax within legal limitations on each$100 valuation of taxable property in the City that is sufficient to pay such debt service requirements,full allowance being made for delinquencies and costs of collection. (c) The tax levied by this Section shall be assessed and collected each year and applied to the payment of the debt service requirements on the Notes, and the tax shall not be diverted to any �,:.,m 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 hereof, then the collection of such ad valorem t�may be suspended or appropriately reduced, as the facts may permit, and further deposits to the Interest and Sinking Fund may be suspended or appropriately reduced, as the facts may permit. In determining the aggregate principal amount of outstanding Notes,there shall be subtracted the amount of any Notes for which money has been deposited in accordance with Article XI herein. ARTICLE III AUTHORIZATION;GENERAL TERMS AND PROVISIONS REGARDING THE NOTES Section 3.01 Authorization. The City's equipment acquisition notes to be designated"City of Grapevine,Texas,Equipment Acquisition Notes,Series 1997" (the "Notes"), are hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State of Texas,including �,,, particularly the Act,and the Charter of the City. The Notes shall be issued in the aggregate principal amount of $1,900,000 for the public purpose of paying all or a portion of the City's contractual obligations to be incurred in connection with the acquisition or purchase of personal property for the � 6.1\F:\F[NAMGRA325�23W0\ORDINANC. _4_ t2/16/97:(537pm) Ciry as described in Schedule I attached hereto, and for paying costs related to the issuance of the `� Y Notes, all as set forth in the preamble hereof. Section 3.02 Date Denomination.Maturities,Numbers and Interest. (a) The Notes shall �` have the Original Issue Date of November 15, 1997,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 August 15 in the years, at the interest rates and in the principal amounts as follows: Year Principal Interest Au ust 15 Amount Rate 1998 $460,000 5.00% 1999 460,000 5.00% 2000 480,000 4.15% 2001 500,000 4.00% (c) Interest on each Note shall accrue from the Original Issue Date or the most recent Interest Payment Date to which interest has been paid or provided for at the per annum rates of °� " interest specified in the schedule contained in subsection (b) above. Such interest shall be payable semiannually on February 15 and August 15 of each year until the principal amount shall have been «��, paid or provision for such payment shall have been made,commencing August 15, 1998, computed on the basis of a 360-day year of twelve 30-day months. Section 3.03 Medium Method and Place of Payment. (a) The principal of 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,in the event of nonpayment of interest on a scheduled Interest Payment Date and for 30 days thereafter, a new record date for such interest payment(a"Special Record Date")shall be established by the Paying Agent/Registrar,if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the"Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five Business Days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Owner of a Note appearing on the Register at the close of business on the last Business Day next preceding the date of mailing of such notice. (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 by 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. 6.1\F:\FINMI�GRA325�23000\ORDINANC. -S- 12/16/97:(5:37pm) (d) The principal of each Note shall be paid to the person in whose name such Note is '� " registered on the due date thereof upon presentation and surrender of such Note at the Designated Payment/Transfer Office. "`�' (e) If 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 required or authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday,or day on which such 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. (� Unclaimed Payments shall be segregated in a special account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owner of the Notes to which the Unclaimed Payments pertain. Subject to the provisions of Title 6,Texas Property Code, as amended, Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the applicable payment date shall be applied to the next payment or payments on the Notes thereafter coming due and, to the extent any such money remains after the retirement of all outstanding Notes, shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar nor any other person shall be liable or responsible to any Owners of such Notes for any further payment of such unclaimed moneys or on account of any such Notes, subject to any applicable escheat law or similar law. Section 3.04 Execution and Initial Registration. (a) The Notes shall be executed on behalf �"� " of the City by the Mayor and countersigned by the City Secretary, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. 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 (the Comptroller of Public Accounts")or by his duly authorized agent,which certificate shall be evidence that the Initial Note has � been duly approved by the Attorney General of the State of Texas and that it is a valid and binding obligation of the City, and has been registered by the Comptroller of Public Accounts. � 6.1\F:�FINAMGRA325�23000\ORDINANC. _C_ 12/16/97:(5:37pm) U (d) On the Closing Date, a single typewritten Note (the "Initial Note") representing the ` � entire principal amount of the Notes,payable in stated installments to the Purchaser or its designee, executed by manual or facsimile signature of the Mayor and countersigned by the manual or facsimile signatures of the City Secretary,approved by the Attorney General,and registered and manually signed '�'"� by the Comptroller of Public Accounts of the State of Texas,will be delivered to the Purchaser or its designee. Upon payment for the Initial Note,the Paying Agent/Registrar shall cancel the Initial Note and deliver to DTC on behalf of the Purchaser registered definitive Notes as described in Section 3.10(a). To the extent the Paying Agent/Registrar is eligible to participate in DTC's FAST System, as evidenced by agreement between the Paying Agent/Registrar and DTC, the Paying Agent/Registrar shall hold the definitive Notes in safekeeping for DTC. Section 3.05 Ownershin. (a) The City,the Paying Agent/Registrar and any other person may treat the person in whose name any Note is registered as the absolute owner of such Note for the purpose of making and receiving payment of the principal thereof,for the further purpose of making and receiving payment of the interest thereon(subject to the provisions herein that interest is to be paid to the person in whose name the Note is registered on the Record Date or on the Special Record Date, as applicable),and for all other purposes,whether or not such Note is overdue,and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. (b) All payments made to the person deemed to be the Owner of any Note in accordance with this Section shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Note to the extent of the sums paid. '" "� Section 3.06 Registration, Transfer and Exchan�e. (a) So long as any Note remains outstanding, the City shall cause the Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the "Register") in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Notes in accordance with this Ordinance. (b) Registration of any Note may be transferred in the Register only upon the presentation and surrender thereof at the Designated Payment/Transfer Office for transfer of registration and cancellation, together with proper written instruments of assignment,in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of the Notes, or any portion thereof in any integral multiple of$5,000 for any one maturity, to the assignee or assignees thereof, and the right of such assignee or assignees thereof to have the Note or any portion thereof registered in the name of such assignee or assignees. No transfer of any Note shall be effective until entered in the Register. Upon assignment and transfer of any Note or portion thereof, a new Note or Notes will be issued by the Paying Agent/Registrar in conversion and exchange for such transferred and assigned Note. To the extent possible the Paying Agent/Registrar will issue such new Note or Notes in not more than three Business Days after receipt of the Note to be transferred in proper form and with proper instructions directing such transfer. (c) Any Note may be converted and exchanged only upon the presentation and surrender thereof at the Designated Payment/Transfer Office, together with a written request therefor duly ,,,�,,, executed by the Owner or assignee or assignees thereof, or its or their duly authorized attorneys or representatives,with guarantees of signatures satisfactory to the Paying Agent/Registrar,for a Note or Notes of the same maturity and interest rate and in any authorized denomination and in an aggregate „�,,, principal amount equal to the unpaid principal amount of the Note presented for exchange. To the 6.I\F:\F[NAIV�G RA325�23IXri1\O RDI NAN C. 12/16/97:(5:37pm) -7- extent possible,a new Note or Notes shall be delivered by the Paying Agent/Registrar to the Owner of � Ty the Note or Notes in not more than three Business Days after receipt of the Note to be exchanged in proper form and with proper instructions directing such exchange. � '� (d) Each Note issued in exchange for any Note or portion thereof assigned, transferred or converted shall have the same principal maturity date and bear interest at the same rate as the Note for which it is being exchanged. Each substitute Note shall bear a letter and/or number to distinguish it from each other Note. The Paying Agent/Registrar shall convert and exchange the Notes as provided herein, and each substitute Note 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 Note or Notes in lieu of which such substitute Note is delivered. (e) The City will pay the Paying Agent/Registrar's reasonable and customary charge for the initial registration or any subsequent transfer, exchange or conversion of Notes, but the Paying Agent/Registrar will require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer, exchange or conversion of a Note. In addition,the City hereby covenants with the Owners of the Notes that it will (i) pay the reasonable and standard or customary fees and charges of the Paying Agent/Registrar for its services with respect to the payment of the principal of and interest on the Notes,when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with respect to the transfer, registration,conversion and exchange of Notes as provided herein. Section 3.07 Cancellation and Authentication. (a) All Notes paid in accordance with this ` `" Ordinance,and all Notes in lieu of which exchange Notes or replacement Notes are authenticated and delivered in accordance with this Ordinance, shall be canceled and destroyed upon the making of �N� proper records regarding such payment, exchange or replacement. The Paying Agent/Registrar shall periodically furnish the City with certificates of destruction of such Notes. (b) Each substitute Note issued pursuant to the provisions of Sections 3.06 and 3.09 of this Ordinance, in conversion of and exchange for or replacement of any Note or Notes issued under this Ordinance,shall have printed thereon a Paying Agent/Registrar's Certificate,in the form hereinafter set forth. An authorized representative of the Paying Agent/Registrar shall,before the delivery of any such Note,manually sign and date such Certificate, and no such Note shall be deemed to be issued or outstanding unless such Certificate is so executed. No additional ordinances, orders, or resolutions need be passed or adopted by the City Council or any other body or person so as to accomplish the foregoing conversion and exchange or replacement of any Note or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Notes in the manner prescribed herein, and said Notes shall be of customary type and composition and printed, typewritten,lithographed,mimeographed or otherwise produced. Pursuant to Article 717k-6,Vernon's Annotated Texas Civil Statutes, as amended, and particularly Section 6 thereof, the duty of conversion and exchange or replacement of Notes as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of the above Paying Agent/Registrar's Authentication Certificate, the converted and exchanged or replaced Notes shall be valid,incontestable, and enforceable in the same manner and with the same effect as the Initial Note which was originally delivered pursuant to this �, Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. (c) Notes issued in conversion and exchange or replacement of any other Note or portion �„ thereof, (i)shall be issued in fully registered form,without interest coupons,with the principal of and 6.I\F:�FINAIV�GRA325�23000\ORDI NANC. p 12/16/97:(537pm) -o- interest on such Notes to be payable only to the registered owners thereof; (ii)may be transferred and � � assigned, (iii)may be converted and exchanged for other Notes, (iv)shall have the characteristics, (v) shall be signed and sealed, and(vi)shall be payable as to principal of and interest, all as provided, and �;� in the manner required or indicated, in the Form of Note set forth in this Ordinance. Section 3.08 Temporary Notes. (a) Following the delivery and registration of the Initial Note and pending the preparation of definitive Notes,the proper officers of the City may execute and, upon the City's request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Notes in lieu of which they are delivered, without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers of the City executing such temporary Notes may determine,as evidenced by their signing of such temporary Notes. (b) Until exchanged for Notes in definitive form, such Notes in temporary form shall be entitled to the benefit and security of this Ordinance. (c) The City,without unreasonable delay,shall prepare, execute and deliver to the Paying Agent/Registrar the Notes in definitive form;thereupon, upon the presentation and surrender of the Note or Notes in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shall cancel the Notes in temporary form and authenticate and deliver in exchange therefor a Note or Notes of the same maturity and series, in definitive form, in the authorized denomination, and in the same aggregate principal amount,as the Note or Notes in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. � -• Section 3.09 Replacement Notes. (a) Upon the presentation and surrender to the Paying Agent/Registrar, at the Designated Payment/Transfer Office, of a mutilated Note, the 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 6.1�F:�FI NAN�GRAJ2S123000\ORDINANC. n 12/16/97:(5:37pm) -7- (iv) satisfies any other reasonable requirements imposed by the City and the � " Paying Agent/Registrar. (c) If, after the delivery of such replacement Note, a bona fide purchaser of the original additional Note in lieu of which such replacement Note was issued presents for payment such original Note,the City and the Paying Agent/Registrar shall be entitled to recover such replacement Note from the person to whom it was delivered or any person taking therefrom,except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Paying Agent/Registrar in connection therewith. (d) In the event that any such mutilated,lost,apparently destroyed or wrongfully taken Note has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Note,may pay such Note on the date on which such Note becomes due and payable. (e) Each replacement Note delivered in accordance with this Section shall constitute an original additional 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. Section 3.10. Book-Entr�Only System. (a) The definitive Notes shall be initially issued in the form of a separate single fully registered Note for each of the maturities thereof. Upon initial issuance,the ownership of each such Note shall be registered in the name of Cede&Co., as nominee " % of DTC,and except as provided in Section 3.11 hereof,all of the outstanding Notes shall be registered in the name of Cede & Co., as nominee of DTC. �..� (b) With respect to Notes registered in the name of Cede&Co., as nominee of DTC,the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Notes,except as provided in this Ordinance. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Notes, (ii) the delivery to any DTC Participant or any other person,other than an Owner, as shown on the Register,of any notice with respect to the Notes,or(iii)the payment to any DTC Participant or any other person, other than an Owner, as shown in the Register of any amount with respect to principal of or interest on the Notes. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Note is registered in the Register as the absolute Owner of such Note for the purpose of payment of principal of and interest on the Notes,for the purpose of giving notices of other matters with respect to such Note, for the purpose of registering transfer with respect to such Note, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and interest on the Notes only to or upon the order of the respective Owners, as shown in the Register as provided in this Ordinance,or their respective attorneys duly authorized in writing,and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of and interest ,.� on the Notes to the extent of the sum or sums so paid. No person other than an Owner, as shown in the register, shall receive a certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of ;,�,�,;, written notice to the effect that DTC has determined to substitute a new nominee in place of Cede& 6.1\F:�FINAN�GRA325123000\ORDINANC. -�0- 12/16/97:(5:37pm) Co., and subject to the provisions in this Ordinance with respect to interest checks or drafts being `4 mailed to the registered Owner at the close of business on the Record Date,the word"Cede&Co."in this Ordinance shall refer to such new nominee of DTC. '�""�` (c) The Representation Letter 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 for said obligations,is hereby ratified and approved for the Notes. Section 3.11. Successor Securities Depository Transfer Outside Book-Entrv On1y.,System. In the event that the City or the Paying Agent/Registrar determines that DTC is incapable of discharging its responsibilities described herein and in the Representation Letter, and that it is in the best interest of the beneficial owners of the Notes that they be able to obtain certificated Notes, or in the event DTC discontinues the services described herein,the City or the Paying Agent/Registrar shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended,notify DTC and DTC Participants, as identified by DTC, of the appointment of such successor securities depository and transfer one or more separate Notes to such successor securities depository or(ii)notify DTC and DTC Participants, as identified by DTC, of the availability through DTC of Notes and transfer one or more separate Notes to DTC Participants having Notes credited to their DTC accounts, as identified by DTC. In such event, the Notes shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Notes shall designate,in ,�. ., accordance with the provisions of this Ordinance. Section 3.12. Pa,yments to Cede&Co. Notwithstanding any other provision of this Ordinance �.,.� to the contrary, so long as any Notes are registered in the name of Cede& Co., as nominee of DTC, all payments with respect to principal of and interest on such Notes,and all notices with respect to such Notes,shall be made and given, respectively,in the manner provided in the Representation Letter. ARTICLE IV REDEMPTION OF NOTES BEFORE MATURITY Section 4.01 Limitation on Redemption. The Notes are not subject to optional redemption prior to scheduled maturity. ARTICLE V PAYING AGENT/REGISTRAR Section 5.01 Avnointment of Initial Paving Agent/Registrar. (a) The City hereby appoints Bank One, Texas, N.A., Fort Worth, Texas as its registrar and transfer agent to keep such books or records and make such transfers and registrations under such reasonable regulations as the City and the Paying Agent/Registrar may prescribe;and the Paying Agent/Registrar shall make such transfer and registrations as herein provided. It shall be the duty of the Paying Agent/Registrar to obtain from the Owners and record in the Register the address of such Owner of each Note to which payments with „�,, respect to the Notes shall be mailed, as provided herein. The City or its designee shall have the right 6.I�F:\FINAMGRA325�23000\ORDINANC. -1 1- 12/16/97:(5:37pm) to inspect the Register during regular business hours of the Paying Agent/Registrar,but otherwise the � Paying Agent/Registrar shall keep the Register confidential and,unless otherwise required by law,shall not permit their inspection by any other entity. "� �' (b) The City hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on the Notes. The Paying Agent/Registrar shall keep proper records of all payments made by the City and the Paying Agent/Registrar with respect to the Notes,and of all conversions, exchanges and replacements of such Notes, as provided in this Ordinance. (c) The execution and delivery of the Paying Agent/Registrar Agreement,specifying the duties and responsibilities of the City and the Paying Agent/Registrar is hereby approved with such changes as may be approved by the Mayor of the City,and the Mayor and City Secretary of the City are hereby authorized to execute such agreement. Section 5.02 Oualifications. 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 setvices 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. (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 Chanee. 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 and the mailing address of the Designated Payment/Transfer Office. Section 5.06 A,greement 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 Deliver�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 thereo� and all other pertinent books and records relating to the Notes to the successor Paying Agent/Registrar. � 6.1\F:\FINAN�GRA325�230D0\ORDINANC. -12- 12/16/97:(5:37pm) ARTICLE VI FORM OF THE NOTES �' � Section 6.01 Form Generallv. (a) The Notes,including the Registration Certificate of the Comptroller of Public Accounts of the State of Texas to accompany the Initial Note, 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 Notes (except for any temporary Notes and the Initial Note) shall be printed, lithographed,or engraved,and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Notes, as evidenced by their execution thereof. � � 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: (a) Form of Note. REGISTERED REGISTERED No. $ United States of America State of Texas COUNTIES OF TARRANT, DALLAS AND DENTON CITY OF GRAPEVINE,TEXAS EQUIPMENT ACQUISITION NOTE SERIES 1997 INTEREST RATE: MATURITY DATE: ORIGINAL ISSUE DATE: CUSIP NO.: November 15, 1997 � The City of Grapevine (the "City") in the Counties of Tarrant, Dallas and Denton, State of Texas,for value received,hereby promises to pay to �rr 6.I�F:\FINAMGRA325�23000\ORDINANC. -1�- 12116/97:(5:37pm) ,�.,., or registered assigns, on the Maturity Date specified above,the principal sum of � " DOLLARS and to pay interest on the unpaid principal amount hereof from the later of the Original Issue Date specified above or the most recent interest payment date to which interest has been paid or provided for until such principal amount has been paid or provided for, at the interest rate per annum specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 15 and August 15 of each year, commencing August 15, 1998. Reference is hereby made to the further provisions of this Note set forth on the reverse side hereof, and such further provisions shall for all purposes have the same effect as if set forth on the face hereof. * The principal of this Note shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Note at the corporate trust office in Fort Worth, Texas (the "Designated Payment/Transfer Office"), of the Paying Agent/Registrar executing the registration certificate appearing hereon, or,with respect to a successor Paying Agent/Registrar, at the designated payment/transfer office of such successor. Interest on this Note is payable by check dated as of the interest payment date,mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying � � Agent/Registrar or by such other customary banking arrangements acceptable to the Paying Agent/Registrar,requested by,and at the risk and expense of,the person to whom interest is to be paid. � � For the purpose of the payment of interest on this Note, the registered owner shall be the person in whose name this Note is registered at the close of business on the "Record Date,"which shall be the last Business Day of the month next preceding such interest payment date; provided, however, that in the event of nonpayment of interest on a scheduled interest payment date, and for 30 days thereafter, a new record date for such interest payment(a"Special Record Date")will be established by the Paying Agent/Registrar,if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the "Special Payment Date",which shall be 15 days after the Special Record Date)shall be sent at least five Business Days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each registered owner of a Note appearing on the books of the Paying Agent/Registrar at the close of business on the last Business Day preceding the date of mailing such notice. * If a date for the payment of the principal of or interest on the Notes is a Saturday,Sunday,legal holiday, or a day on which banking institutions in the city 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 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. ,�. * This Note is one of a series of fully registered limited tax notes specified in the title hereof issued in the aggregate principal amount of $1,900,000 (herein referred to as the "Notes"), issued pursuant to a certain Ordinance of the City Council of the City(the"Ordinance")for the purpose of �„ paying all or a portion of the City's contractual obligations to be incurred in connection with the 6.1\F:\F7NAMGRA325�230IX1\ORDINANC. -��- 12/l6/97:(5:37pm) acquisition or purchase of personal property for the City and to pay the costs incurred in connection � p with the issuance of the Notes. * The Notes and the interest thereon are payable from the levy of a direct and continuing ad ""rt' valorem tax,within the limit prescribed by law, against all t�able property in the City. * The Notes are not subject to optional redemption prior to scheduled maturity. * As provided in the Ordinance, and subject to certain limitations therein set forth, this Note is transferable upon surrender of this Note for transfer at the Designated Payment/Transfer Office,with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar, and, thereupon, one or more new fully registered Notes of the same stated maturity, of authorized denominations,bearing the same rate of interest,and for the same aggregate principal amount will be issued to the designated transferee or transferees. * The City,the Paying Agent/Registrar,and any other person may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment as herein provided (except interest shall be paid to the person in whose name this Note is registered on the 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 shall be affected by notice or knowledge to the contrary. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Note and the series of � � which it is a part is duly authorized by law; that all acts, conditions and things required to be done precedent to and in the issuance of the Notes have been properly done and performed and have � � happened in regular and due time, form and manner, as required by law; that sufficient and proper provision for the levy and collection of taxes has been made, which, when collected, shall be appropriated exclusively to the timely payment of the principal of and interest on the Notes; and that the total indebtedness of the City,including the Notes,does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City has caused this Note to be executed in its name by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly impressed or placed in facsimile on this Note. Mayor, City of Grapevine,Texas City Secretary, City of Grapevine,Texas [SEAL] � 6.1\F:\FIN.4N�GRA325�23000\ORDINANC. -�C- 12/16/97:(5:37pm) � (b) Form of Certificate of Payin�Agent/Registrar. 'The following Certificate of Paying "� � Agent/Registrar may be deleted from the Initial Note if the Comptroller's Registration Certificate is attached thereto. CERTIFICATE OF PAYING AGENT/REGISTRAR The records of the Paying Agent/Registrar show that the Initial Note of this series of Notes 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 Notes referred to in the within- mentioned Ordinance. BANK ONE,TEXAS, N.A., Fort Worth,Texas Dated: By: Authorized Signatory (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. Dated: NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of the Signature Guaranteed By: within Note in every particular and must be guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers. Authorized Signatory * Note to printer: Paragraphs preceded by an asterisk(*) are to be printed on the reverse side of the notes. (d) Initial Note Insertions. (i) The Initial Note shall be in the form set forth in paragraph �* (a) of this Section, except that: �r.r 6.1�F:�FINAMGRA325�23000�ORDINANC. -1 L- 12/16/97:(5:37pm) U (A) immediately under the name of the Note, the headings "INTEREST '� RATE"and"MATURITY DATE"shall both be completed with the words"As Shown Below"and"CUSIP No. "deleted; �� (B) in the first paragraph: the words"on the Maturity Date specified above"shall be deleted and the following will be inserted: "on August 15 in each of the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule: Principal Interest Year Installments Rate" (Information to be inserted from the schedule in Section 3.02 hereof.) (C) The second paragraph of the Note shall be deleted; (D) In the third paragraph of the Note,the words"executing the registration certificate appearing hereon," shall be deleted and an additional sentence shall be added to the paragraph as follows: "The initial Paying Agent/Registrar is Bank One, Texas, N.A., Fort Worth,Texas."; and "" � (E) the Initial Note shall be numbered T 1. �.,� (ii) The following Registration Certificate of Comptroller of Public Accounts shall appear on the Initial Note in lieu of the Certificate of Paying Agent/Registrar: REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS OF § REGISTER NO. THE STATE OF TEXAS § I hereby certify that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this Note has been examined by him as required by law, that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding general obligation of the City of Grapevine,Texas, and that this Note has this day been registered by me. WITNESS MY HAND AND SEAL OF OFFICE AT AUSTIN,TEXAS, „�, [SEAL] Comptroller of Public Accounts of the State of Texas � 6.1\F:\FINAMGRA325123000\ORDINMIC. _17_ 12/lb/97:(5:37pm) 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 Le�al Opinion. The approving legal opinion of Vinson&Elkins L.L.P., Bond Counsel, may be printed on the back of each Note over the certification of the City Secretary,which may be executed in facsimile. Section 6.05 Munici�al Bond Insurance. If municipal bond guaranty insurance is obtained with respect to the Notes, the Notes, including the Initial Note, may bear an appropriate legend, as provided by the insurer. ARTICLE VII CREATION OF FUNDS AND ACCOUNTS;INITIAL DEPOSITS AND APPLICATION OF MONEY Section 7.01 Creation of Funds. (a) The City hereby establishes the following funds: (i) the City of Grapevine, Texas, Equipment Acquisition Notes, Series '"�`"� 1997, Interest and Sinking Fund (the"Interest and Sinking Fund"); and ,�,�, (ii) the City of Grapevine, Texas, Equipment Acquisition Notes, Series 1997,Acquisition Fund (the `Acquisition Fund"). (b) The funds created by this Ordinance shall be maintained at an official depository of the City,which must be a member of the Federal Deposit Insurance Corporation. Section 7.02 Initial Deposits. On the Closing Date,the City shall cause the proceeds from the sale of the Notes to be deposited as follows: (i) first,an amount equal to all accrued interest and premium,if any,on the Notes from the Original Issue Date until the Closing Date shall be deposited to the credit of the Interest and Sinking Fund; and (ii) second, the remaining balance shall be deposited to the credit of the Acquisition Fund. Section 7.03 Interest and Sinkin� Fund. (a) The taxes levied under Section 2.01 of this Ordinance shall be deposited to the credit of the Interest and Sinking Fund at such times and in such amounts as necessary for the timely payment of the principal of and interest on the Notes. � (b) If the amount of money in the Interest and Sinking Fund is at least equal to the aggregate principal amount of the outstanding Notes plus the aggregate amount of interest due and that � will become due and payable on such Notes,no further deposits to that fund need be made. 6.I�F:\�NAN�GRA325�23IX)0\ORDINANC. -1 p- 12/16/97:(5:37pm) � (c) Money on deposit in the Interest and Sinking Fund shall be used to pay the principal � LL� of and interest on the Notes as such become due and payable. Section 7.04 Acquisition Fund. Money on deposit in the Acquisition Fund, including '� investment earnings thereof,shall be used for the purposes specified in Section 3.01 of this Ordinance. Section 7.05 Excess Note Proceeds. All amounts remaining in the Acquisition Fund after the accomplishment of the purpose for which the Notes are hereby issued, including investment earnings on the Acquisition Fund, shall be transferred to the credit of the Interest and Sinking Fund and segregated in a special escrow account to be used to pay principal of and interest on the Notes on the next ensuing Interest Payment Date. Section 7.06 Securitv of Funds. All moneys on deposit in the funds referred to in this Ordinance shall be secured in the manner and to the fullest extent required by the laws of the State of Texas for the security of public funds, and moneys on deposit in such funds shall be used only for the purposes permitted by this Ordinance. ARTICLE VIII INVESTMENTS Section 8.01 Investments. (a) Money in each fund created by this Ordinance, at the option `� ^ of the City, may be invested in such securities or obligations as permitted under applicable law. �. (b) Any securities or obligations in which money is so invested shall be kept and held in trust for the benefit of the Owners and shall be sold and the proceeds of sale shall be timely applied to the making of all payments required to be made from the fund from which the investment was made. (c) The money in an escrow account established under Section 7.05 of this Ordinance shall be invested in (i) tax-exempt obligations or (ii) securities or obligations that do not have a "higher yield,"within the meaning of Section 148(� of the Code, than the yield on the Notes. Section 8.02 Investment Income. (a) Interest and income derived from investment of the Interest and Sinking Fund shall be credited to such Fund. (b) Interest and income derived from investment of the Acquisition Fund shall be either deposited to the credit of the Interest and Sinking Fund or retained in the Acquisition Fund until the permanent improvements authorized by this Ordinance are completed. ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS � Section 9.01 Payment of the Notes. On or before each Interest Payment Date and while any of the Notes are outstanding and unpaid,there shall be made available to the Paying Agent/Registrar, � 6.1\F:\F[NAN�GRA325�230W\ORDINANC. -1 n- 12/16/97:(5:37pm) � out of the Interest and Sinking Fund,money sufficient to pay such interest on and principal of the Notes "� � as will accrue or mature on the applicable Interest Payment Date. Section 9.02 Other Re�resentations and Covenants. (a) The City will faithfully perform at �'"` all times any and all covenants,undertakings,stipulations, and provisions contained in this Ordinance and in each Note;the City will promptly pay or cause to be paid the principal of and interest on each Note on the dates and at the places and manner prescribed in such Note; and the City will, at the times and in the manner prescribed by this Ordinance,deposit or cause to be deposited the amounts of money specified by this Ordinance. (b) The City is duly authorized under the laws of the State of Texas to issue the Notes; all action on its part for the creation and issuance of the Notes has been duly and effectively taken; and the Notes in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms. Section 9.03 Federal Income Tax Exclusion. (a) The City intends that the interest on the Notes shall be excludable from gross income for federal income t�purposes pursuant to sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended(the"Code"),and the applica- ble Income Tax Regulations(the"Regulations"). The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted, respectively,would cause the interest on the Notes to be includable in gross income, as defined in section 61 of the Code, for federal income tax purposes. In particular, the City covenants and agrees to comply with each requirement of this Section 9.03;provided,however,that the City shall not be required to comply with `� ' any particular requirement of this Section 9.03 if the City has received an opinion of nationally recognized bond counsel ("Counsel's Opinion") that such noncompliance will not adversely affect the �«� exclusion from gross income for federal income tu�purposes of interest on the Notes or if the City has received a Counsel's Opinion to the effect that compliance with some other requirement set forth in this Section 9.03 will satisfy the applicable requirements of the Code 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 Section 9.03. (b) No Private Use or Payment and No Private Loan Financine. The City shall certify, through an authorized officer, employee or agent that based upon all facts and estimates known or reasonably expected to be in existence on the date the Notes are delivered, that the proceeds of the Notes will not be used in a manner that would cause the Notes to be"private activity bonds"within the meaning of section 141 of the Code and the Regulations promulgated thereunder. 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 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 Regula- tions promulgated thereunder. (c) No Federal Guarantee. 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 applicable Regulations thereunder, except as permitted by section 149(b)(3) of the Code and such Regulations. � 6.1\F:�F7NAIJ�GRA325�23000\ORDINANC. -20- 12l16/97:(537pm) (d) No Hed�e Bonds. The City covenants and agrees that it has not and will not 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 applicable Regulations thereunder. (e) No Arbitra�e. 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 e�ustence 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 applicable Regulations promulgated thereunder. 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 applicable Regulations promulgated thereunder. (� Arbitra�e Rebate. If the City does not qualify for an exception to the requirements of Section 148(� of the Code relating to the required rebate to the United States, 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(�(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 applicable Regulations, the amount earned from the investment of the gross proceeds of the Notes �.� which is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Notes or on such other dates as may be permitted under 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 Notes that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at arm's length and had the yield on the issue not been relevant to either party. (g) Information Re�ortine. 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 applicable Regulations promulgated thereunder. (h) Continuing Obligation. Notwithstanding any other provision of this Ordinance, the City's obligations under the covenants and provisions of this Section 9.03 shall survive the defeasance and discharge of the Notes. � � 6.1\F:\I'7NAN�GRA325�23IX10\ORDINANC. -�1 t- I2/16/97:(5:37pm) G 1 ARTICLE X DEFAULT AND REMEDIES �G.� 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 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 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 by Payment. When all Notes have been paid in full as to principal and as to interest or when all Notes have become due and payable,whether at maturiry or otherwise, and „� the City shall have provided for the payment of the whole amount due or to become due on all Notes then outstanding, including all interest that has accrued thereon or that may accrue to the date of maturity, by depositing with the Paying Agent/Registrar, for payment of the principal of such �,,, outstanding Notes and the interest accrued thereon,the entire amount due or to become due thereon, 6.1\F:\FINAN�GRA325�23000\ORDINANC. -22_ 12/16/97:(5:37pm) and the City shall also have paid or caused to be paid all sums payable under this Ordinance by the City, � � including the compensation due or to become due the Paying Agent/Registrar, then the Paying Agent/Registrar, upon receipt of a letter of instructions from the Ciry requesting the same, shall discharge and release the lien of this Ordinance and execute and deliver to the City such releases or other instruments as shall be requisite to release the lien hereof. Section 11.02 Discharge b,y Deposit. (a) The City may discharge its obligation to pay the principal of and interest on all or any portion of the Notes, and its obligation to pay other sums payable or to become payable under this Ordinance by the City,by complying with the following provisions: (i) the City shall deposit or cause to be deposited with the Paying Agent/Registrar an amount of money that, together with the interest earned on or capital gains or profits to be realized from the investment of such money, will be sufficient to pay the principal of Notes and accrued interest on such Notes to maturity, and to pay such other amounts as may be reasonably estimated by the Paying Agent/Registrar to become payable under this Ordinance,including the compensation due or to become due the Paying Agent/Registrar; (ii) the City shall establish or cause to be established a separate escrow account fund with the Paying Agent/Registrar for the deposit pursuant to subdivision (i) of this subsection (a); (iii) the City shall make provision for the investment of such moneys by the � ' Paying Agent/Registrar in direct obligations of the United States of America,including obligations the principal of and interest on which are unconditionally guaranteed by the -- -� United States of America,which may be in book entry form,maturing and/or bearing interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payments of such Notes; (iv) the Ciry shall make provision for the payment to the Owners at the date of maturity, of the full amount to which the Owners would be entitled by way of principal and interest to the date of such maturity; (v) the City shall make provision for the sending of written notice by first- class postage prepaid United States mail to the Owner of each Note then outstanding within 30 days following the date of such deposit that such moneys are so available for such payment; and (vi) the City shall provide the Paying Agent/Registrar with an opinion of nationally recognized bond counsel acceptable to the Paying Agent/Registrar to the effect that the deposit specified in subdivision(i) of this subsection (a)will not cause the interest on the Notes to become subject to federal income tu�ation. (b) Upon compliance with subsection(a) of this Section, the Notes for which provision is �+ so made shall no longer be regarded as outstanding and unpaid, and the Paying Agent/Registrar,upon receipt of a letter of instructions from the City requesting the same,shall discharge and release the lien of this Ordinance with respect to such Notes and execute and deliver to the City such releases or other wr�, instruments as shall be requisite to release the lien hereof. 6.1\F:\FINAMGRA325�23000\ORDINANC. -23- 12/16/97:(S:J7pm) (c) Following the final payment of the principal of and interest on the Notes, any moneys, '� " interest earnings,profits or capital gains over and above the amounts necessary for such purposes shall be paid to the City. �'"�' (d) Before the discharge and release of any partion of the lien of this Ordinance pursuant to this Section, the City shall make the following provisions with the Paying Agent/Registrar: (i) the establishment of a separate escrow account fund with the Paying Agent/Registrar for the deposit pursuant to subsection(a)(i) of this Section; (ii) the payment to the Owners at the date of maturity of the full amount to which the Owners of the appropriate Notes would be entitled by way of principal and interest to the date of such maturity; (iii) the investment of such moneys by the Paying Agent/Registrar in direct obligations of the United States of America,including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, and which may be in book entry form, maturing and/or bearing interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payments of such Notes; (iv) the sending of written notice by registered or certified United States mail to the Owner of each appropriate Note then outstanding within 30 days following '� " the date of such deposit that such moneys are so available for such payment; and �,.-.� (v) the payment to the City,periodically or following final payment of the principal of and interest on the appropriate Notes, of any moneys, interest earnings, profits or capital gains over and above the amounts necessary for such purposes. ARTICLE XII SALE AND DELIVERY OF THE NOTES; APPROVAL OF OFFICIAL STATEMENT; CONTROLAND DELIVERY OF NOTES Section 12.01 Sale of Notes:Official Statement. (a) 'I'he Notes are hereby officially sold and awarded to Penson Financial (the"Purchaser"), at a price equal to the principal amount thereof plus a premium of$17.80,plus accrued interest . It is hereby officially found,determined and declared that the bid of said Purchaser is the lowest bid submitted for the Notes. The Notes shall initially be registered in the name of the Purchaser or its designee. (b) The form and substance of the preliminary Official Statement for the Notes and any addenda,supplement or amendment thereto (the "Official Statement")presented to and considered at this meeting,are hereby in all respects approved and adopted, and the Official Statement is hereby deemed final as of its date within the meaning and for the purposes of paragraph(b)(1)of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The City agrees to deliver appropriate numbers of executed copies thereof to the Purchaser of the Notes. The Official Statement as thus �, approved and delivered,with such appropriate variations as shall be approved by the Mayor of the City 6.I\F:\FINAN�GRA325�23000\ORDINANC. -2,f- 121i6/97:(5:37pm) � and the Purchaser of the Notes,may be used by the Purchaser in the public offering and sale thereof. �� The City Secretary of the City 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 Official Statement in the public offering of the Notes by the Purchaser is hereby ratified, approved and confirmed. (c) All officers of the City are authorized to take such actions and to execute such documents, certificates and receipts as they may deem necessary and appropriate in order to consummate the delivery of the Notes in accordance with the terms of sale therefor. (d) The obligation of the Purchaser to accept delivery of the Notes is subject to the Purchaser being furnished with the final, approving opinion of Vinson&Elkins L.L.P.,Bond Counsel for the City,which opinions shall be dated as of and delivered on the Closing Date. Section 12.02 Control and Delivery of Notes. (a) The Mayor of the City 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 Initial Note 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. ARTICLE XIII ,�, . CONTINUING DISCLOSURE UNDERTAKING Section 13.01 Definitions of Continuing Disclosure Terms. As used in this Article, the following terms have the meanings assigned to such terms below: "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. "Rule"means SEC Rule 15c2-12, as amended from time to time. "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. Section 13.02 Annual Re�orts. (a) The City shall provide annually to each NRMSIR and to any SID, within six (6) months after the end of each fiscal year ending in or after 1997, financial � information and operating data with respect to the City of the general type included in the final Official 6.I\F:\FINAN�GRA325�230W\ORDINANC. -�5- 12/16/9T.(5:37pm) Statement, being the information described in E�ibit 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. Thereafter,when and if audited financial 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 ne}rt 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 13.03 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 Notes, if such event is material within the meaning of the federal securities laws: � , (i) principal and interest payment delinquencies (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 Notes; (vii) modifications to rights of Owners; (viii) bond calls; (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Notes; and (�) rating changes. w�wr 6.1\F:�F[NAMGRAl25�23000\ORDINANC. _2L_ 12/16/97:(5:37pm) lJ (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 13.02 of this Ordinance by the time required by such Section. �'"' Section 13.04 Limitations,Disclaimers and Amendments. (a) The City shall be obligated to observe and perform the covenants specified in this Article for so long as,but only for so long as, the City remains an "obligated person"with respect to the Notes within the meaning of the Rule, except that the City in any event will give notice of any deposit made in accordance with Article XI that causes Notes no longer to be Outstanding. (b) The provisions of this Article are for the sole benefit of the Owners and beneficial owners of the Notes,and nothing in this Article, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information,operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition,or prospects or hereby undertake to update any information provided in accordance with this Article or otherwise,except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Notes at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY NOTE OR ANY OTHER PERSON,IN CONTRACT OR TORT, '� " FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT �3� 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(1) the provisions of this Article,as so amended,would have permitted an underwriter to purchase or sell Notes in the primary offering of the Notes in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment,as well as such changed circumstances, and (2)either(a) the Owners of a majority in aggregate principal amount(or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the Outstanding �,,, Notes consent to such amendment or(b) 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 Notes. If the City so amends the provisions of this Article, it � shall include with any amended financial information or operating data next provided in accordance �.nF:�r�Nnr�cw�zszwa��oxDirrn�vc. -27- 12/16/97:(537pm) with Section 13.02 an explanation, in narrative form, of the reasons for the amendment and of the '""" impact of any change in the type of financial information or operating data so provided. ARTICLE XIV � PROVISIONS RELATING TO BOND INSURANCE Section 14.01 Apnlicabilitv. So long as the Bonds are insured by Financial Security Assurance Inc. (hereinafter defined as the "Insurer") the provisions of this Article XIV shall govern, notwithstanding anything to the contrary set forth in this Ordinance. Section 14.02 Definitions. (a) "Insurance Policy"shall be defined as follows:the insurance policy issued by the Insurer guaranteeing the scheduled payment of principal of and interest on the Bonds when due. (b) "Insurer" shall be defined as follows: Financial Security Assurance Inc., a New York stock insurance company,or any successor thereto or assignee thereof. Section 14.03 Consents. (a) The Insurer shall be deemed to be the sole holder of the Bonds insured by it for the purpose of exercising any voting right or privilege or giving any consent or direction or taking any other '� "�" action that the holders of the Bonds insured by it are entitled to take pursuant to the Ordinance. „�,,, (b) No waiver, modification, amendment or supplement to the Ordinance may become effective except upon obtaining the prior written consent of the Insurer. (c) Copies of any modification or amendment to the Ordinance shall be sent to Standard &Poor's Ratings Services and Moody's Investors Service,Inc.at least 10 days prior to the effective date thereof. (d) Amounts paid by the Insurer under the Insurance Policy shall not be deemed paid for purposes of the Ordinance and shall remain Outstanding and continue to be due and owing until paid by the Issuer in accordance with the Ordinance.The Insurer shall, to the extent it makes any payment of principal of or interest on the Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Insurance Policy.The Ordinance shall not be discharged unless all amounts due or to become due to the Insurer have been paid in full or duly provided for. Section 14.04 Claims Upon the Insurance Policv and Payments by and to the Insurer. If,on the business day prior to the related scheduled interest payment date or principal payment date (Payment Date) there is not on deposit with the Paying Agent, after making all transfers and deposits required under the Ordinance, moneys sufficient to pay the principal of and interest on the �,,, Bonds due on such Payment Date,the Paying Agent shall make a claim under the Insurance Policy and give notice to the Insurer and to its designated agent(if any) (the Insurer's Fiscal Agent) by telephone or telecopy of the amount of such deficiency,and the allocation of such deficiency between the amount � required to pay interest on the Bonds and the amount required to pay principal of the Bonds,confirmed 6.1\F:\Ff NAN�GRA325�23000\ORDINANC. _2 O_ I2/I6/97:(5:37pm) � in writing to the Insurer and the Insurer's Fiscal Agent by 12:00 noon, New York City time, on such ""�" Business Day by filling in the form of Notice of Claim and Certificate delivered with the Insurance Policy. �" In the event the claim to be made is for a mandatory sinking fund redemption installment,upon receipt of the moneys due,the Paying Agent shall authenticate and deliver to affected Bondholders who surrender their Bonds a new Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond surrendered.The Paying Agent shall designate any portion of payment of principal on Bonds paid by the Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity,on its books as a reduction in the principal amount of Bonds registered to the then current Bondholder, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Insurer, registered in the name of Financial Security Assurance Inc., in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Paying Agent's failure to so designate any payment or issue any replacement Bond shall have no effect on the amount of principal or interest payable by the Issuer on any Bond or the subrogation rights of the Insurer. The Paying Agent shall keep a complete and accurate record of all funds deposited by the Insurer into the Policy Payments Account and the allocation of such funds to payment of interest on and principal paid in respect of any Bond.'The Insurer shall have the right to inspect such records at reasonable times upon reasoriable notice to the Paying Agent. Upon payment of a claim under the Insurance Policy the Paying Agent shall establish a separate " `y special purpose trust account for the bene�it of Bondholders referred to herein as the Policy Payments Accounr and over which the Paying Agent shall have exclusive control and sole right of withdrawal.T'he �• Paying Agent shall receive any amount paid under the Insurance Policy in trust on behalf of Bondholders and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made.Such amounts shall be disbursed by the Paying Agent to Bondholders in the same manner as principal and interest payments are to be made with respect to the Bonds under the sections hereof regarding payment of Bonds.It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments. Funds held in the Policy Payments Account shall not be invested by the Paying Agent and may not be applied to satisfy any costs,expenses or liabilities of the Paying Agent. Any funds remaining in the Policy Payments Account following a Payment Date shall promptly be remitted to the Insurer. Section 14.05 Reports. The Insurer shall be provided with all reports, notices and correspondence to be delivered under the terms of the Ordinance. The notice address of the Insurer is: Financial Security Assurance Inc., 350 Park Avenue, New York,New York 10022-6022,Attention: Managing Director--Surveillance; Re: Policy No.Telephone: (212)826-0100;Telecopier. (212)339-3529.In each case in which notice or other communication refers to an Event of Default, then a copy of such notice or other communication shall also be sent to the „�„ attention of General Counsel and shall be marked to indicate URGENT MATERIAL ENCLOSED. � 6.11F:�FINMI�GRA325�23000\ORDINANC. -�n- t2/16/97:(5:37pm) � ,�..�. ARTICLE XV MISCELLANEOUS MATTERS wrrw Section 15.01 Emergencv. The public importance of this Ordinance and the fact that it is to the best interest of the City to provide funds for the construction of the improvements herein contemplated at the earliest possible date constitutes an emergency and creates a necessity for the immediate preservation of the public peace, property, health and safety of the citizens of the City requiring that this Ordinance be passed and take effect as an emergency measure, and it is accordingly ordained that this Ordinance shall be in full force and effect from and after its passage in accordance with the Charter of the City. ********** �- ,�, ,�.. � � 6.I�F:�FINAMGRA325�23000\ORDINANC. -3 0- 12/16/97:(5:37pm) � FINALLY ADOPT'ED,APPROVED AND EFFECTIVE this �'��'� :� � 1�97 � ��` � T � Mayor, City of Grapevine,Texas ATTEST c ` City Secretary, City of apevine,Texas �r.......�,�. �''GRAPFV�� ,.Q �..-- �� lr� ��`�t r i �ml �V � �'� �.'DxJ Z • c,� �� . ♦ ` �' ♦ �� ( � 7�/ � � „�.. , APPROVED AS TO F AND LEGALITY � �_ City Attorney, City f Grapevine, Texas �+ � �,.,:� SCHEDULE I Personal Property To Be Acquired � Vehicles and Trucks including,but not limited to: Pickup trucks Water trucks Flatbeds Dump trucks Backhoe Loader Gradall Sedans Utility trucks Dump trailer Small roller Van � � � � 6.I\F:�FI NAMGRA125�23000\ORDINANC. 12/16/97:(5:37pm) � EXHIBIT A DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION � The following information is referred to in Article XIII of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the Ciry to be provided annually in accordance with Section 13.02 are as specified(and included in the Append'u�or other headings of the Official Statement referred to)below: 1. The financial statements of the City, including but not limited to the portion thereof appended to the Official Statement as Appendix B,but for the most recently concluded fiscal year. 2. Statistical and financial data set forth in Tables 1 through 6 and 8 through 14,inclusive. Accounting Principles The accounting principles referred to in such Section 13.02 are the accounting principles "�� described in the notes to the financial statements referred to in Paragraph 1 above. � � � 6.I\F:\F7NAIV�GRA325�23000\ORDINANC. 12/16/97:(5:37pm)