HomeMy WebLinkAboutOrdinance No. 610 BOND ORDINANCE
$5,578,189.25
CITY OF THE COLONY, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 1989
Adopted: November 6, 1989
TABLE OF CONTENTS
Page
Recitals 1
ARTICLE I
Definitions and Other Preliminary Matters
Section 1.01. Definitions 1
Section 1.02. Findings 3
Section 1.03. Table of Contents, Titles
and Headings 4
Section 1.04. Interpretation 4
ARTICLE II
Security for the Bonds; Interest and Sinking Fund
Section 2.01. Tax Levy 4
Section 2.02. Interest and Sinking Fund 5
ARTICLE III
Authorization; General Terms and Provisions
Regarding the Bonds
Section 3.01. Authorization 5
Section 3.02. Date, Denomination,
Maturities, and Interest 6
Section 3.03. Medium, Method and Place
of Payment 7
Section 3.04. Execution and Registration
of Bonds 9
Section 3.05. Ownership 10
Section 3.06. Registration, Transfer and
Exchange 10
Section 3.07. Cancellation 11
Section 3.08. Temporary Bonds 12
Section 3.09. Replacement Bonds 12
ARTICLE IV
Redemption of Bonds Before Maturity
Section 4.01. Limitation on Redemption 14
Section 4.02. Optional Redemption 14
Section 4.03. Partial Redemption 14
Section 4.04. Notice of Redemption to Owners 15
Section 4.05. Payment Upon Redemption 15
Section 4.06. Effect of Redemption 16
Section 4.07. Limitation on Transfer 16
(i)
ARTICLE V
Paying Agent/Registrar
Section 5.01. Appointment of Initial Paying
Agent/Registrar 16
Section 5.02. Qualifications 16
Section 5.03. Maintaining Paying
Agent/Registrar 16
Section 5.04. Termination 17
Section 5.05. Notice of Change to Owners 17
Section 5.06. Agreement to Perform Duties
and Functions 17
Section 5.07. Delivery of Records to Successor 17
ARTICLE VI
Form of the Bonds
Section 6.01. Form Generally 17
Section 6.02. Form of the Current Interest
Bonds 18
Section 6.03. Form of the Capital
Appreciation Bonds 24
Section 6.04. CUSIP Registration 30
Section 6.05. Legal Opinion 30
Section 6.06. Table of Accreted Values 30
Section 6.07. Statement of Insurance 31
ARTICLE VII
Sale and Delivery of Bonds; Deposit of Proceeds
Section 7.01. Sale of Bonds, Official Statement 31
Section 7.02. Municipal Bond Insurance Policy 32
Section 7.03. Control and Delivery of Bonds 32
Section 7.04. Deposit of Proceeds 32
ARTICLE VIII
Investments; Purchase of Securities;
Approval of Escrow Agreement
Section 8.01. Investments 33
Section 8.02. Investment Income 33
Section 8.03. Purchase of Securities for
Escrow Fund 33
Section 8.04. Approval of Escrow Agreement 34
ARTICLE IX
Particular Representations and Covenants
Section 9.01. Payment of the Bonds 34
Section 9.02. Other Representations and
Covenants 34
(ii)
ARTICLE X
Default and Remedies
Section 10.01. Events of Default 35
Section 10.02. Remedies for Default 36
Section 10.03. Remedies Not Exclusive 36
ARTICLE XI
Discharge
Section 11.01. Discharge by Payment 37
Section 11.02. Discharge by Deposit 37
ARTICLE XII
Redemption of Refunded Bonds
Section 12.01 Redemption of Refunded Bonds 39
ARTICLE XIII
Municipal Bond Guaranty Insurance
Section 13.01. Municipal Bond Guaranty
Insurance 39
Section 13.02. Consent of AMBAC Indemnity 39
Section 13.03. Payment Pursuant to Municipal
Bond Guaranty Insurance Policy 40
EXECUTION 42
Schedule I Table of Accreted Values for
Capital Appreciation Bonds
(iii)
AN ORDINANCE PROVIDING FOR THE ISSUANCE OF
CITY OF THE COLONY, TEXAS GENERAL OBLIGATION
REFUNDING BONDS, SERIES 1989, IN THE
AGGREGATE PRINCIPAL AMOUNT OF $5,578,189.25;
CALLING FOR REDEMPTION PRIOR TO MATURITY
CERTAIN OUTSTANDING BONDS OF THE CITY; AND
ENACTING OTHER PROVISIONS RELATING THERETO
WHEREAS, pursuant to authority conferred on the City
Council of the City of The Colony, Texas (the "City Council"
and the "City," respectively) and proceedings duly had in the
time and manner prescribed by law, the City has previously
issued bonds payable from and secured by the levy of a direct
and continuing ad valorem tax against all taxable property
within the City; and
WHEREAS, to accomplish the public purposes and objectives
described below, and in consideration thereof, the City is by
this Ordinance providing for the refunding of its outstanding
General Obligation Bonds, Series 1985, maturing on February 15
in the years 1990 through 2006, both inclusive, aggregating
$4,725,000 in principal amount (the "Refunded Bonds"); and
WHEREAS, the City Council hereby finds, determines and
declares that the refunding of the Refunded Bonds is necessary
and required to restructure the debt of the City, thereby
resulting in a total debt service savings to the City; and
WHEREAS, the City Council has found and determined that
the Refunded Bonds should be refunded by the issuance of
refunding bonds (the "Bonds") pursuant to this Ordinance and in
accordance with the general laws of the State of Texas,
particularly TEX. REV. CIV. STAT. ANN. art. 717k, as amended;
and
WHEREAS, the meeting at which this Ordinance is
considered is open to the public as required by law, and the
public notice of the time, place and purpose of said meeting
was given as required by TEX. REV. CIV. STAT. ANN. art.
6252-17, as amended.
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF THE COLONY:
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=
"kMBAC Indemnity" means AMBAC Inde~mity Corporation, a
Wisconsin-domiciled stock insurance company.
"Bond" means any of the Bonds.
"Bond Date" means the date designated as the date of the
Bonds by Section 3.02 of this Ordinance.
"Bonds" means the City's refunding bonds authorized to be
issued by Section 3.01 of this Ordinance and designated as
"City of The Colony, Texas General Obligation Refunding Bonds,
Series 1989," in the aggregate principal amount of
$5,578,189.25.
"Capital Appreciation Bonds" means Bonds maturing on
February 15 in each of the years 2006 through 2010, both
inclusive, with respect to which interest is compounded
semiannually and is payable only at maturity, as provided in
Section 3.02 hereof.
"Closing Date" means the date of the initial delivery of
and payment for the Bonds.
"Code" means the Internal Revenue Code of 1986, as
amended, including applicable regulations, published rulings
and court decisions.
"Current Interest Bonds" means Bonds maturing on February
15 in each of the years 1990 through 2005, both inclusive, with
respect to which interest is payable semiannually on a current
basis, as provided in Section 3.02 hereof.
"Escrow Agent" means MTrust Corp, National Association,
Dallas, Texas.
"Escrow Agreement" means the escrow agreement, dated as
of October 15, 1989, by and between the City and the Escrow
Agent.
"Escrow Fund" means the fund established pursuant to the
Escrow Agreement to hold cash and securities for the payment of
principal of and interest on the Refunded Bonds.
"Event of Default" means any event of default as defined
in Section 10.01 of this Ordinance.
"Initial Bonds" means the Initial Current Interest Bond
and the Initial Capital Appreciation Bond authorized by Section
3.04(d) of this Ordinance.
"Interest and Sinking Fund" means the interest and
sinking fund established by Section 2.02 of this Ordinance.
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"Interest Payment Date" means the date or dates on which
interest on the principal of the Current Interest Bonds is
scheduled to be paid until their respective dates of maturity
or prior redemption, such dates being February 15 and August
15, commencing February 15, 1990.
"Maturity Amount" means the amount payable on the
respective Maturity Dates of the Capital Appreciation Bonds,
which amount represents the original principal amount of the
Capital Appreciation Bonds, plus interest accrued and
compounded thereon as set forth in Section 3.02 hereof.
"Maturity Date" means the date specified in Section 3.02
hereof on which the principal of the Current Interest Bonds and
the Maturity Amount of the Capital Appreciation Bonds is due
and payable.
"Municipal Bond Guaranty Insurance Policy" means the
municipal bond guaranty insurance policy issued by AMBAC
Indemnity insuring the payment when due of the principal of and
interest on the Bonds as provided therein.
"Owner" means the person who is the registered owner of a
Bond or Bonds, as shown in the Register.
"Paying Agent/Registrar" means initially MTrust Corp,
National Association, Dallas, Texas, or any successor thereto
as provided in this Ordinance.
"Purchaser" means the person, firm or entity initially
purchasing the Bonds from the City and which is designated in
Section 7.01 of this Ordinance.
"Record Date" means the last business day of the month
next preceding an Interest Payment Date.
"Register" means the Bond register required by Section
3.06(a) of this Ordinance.
"Special Payment Date" means the date that is fifteen
(15) days after the Special Record Date.
"Special Record Date" means the new record date for
interest payment established in the event of a nonpayment of
interest on a scheduled payment date, and for thirty (30) days
thereafter, as described in Section 3.03(f) of this Ordinance.
Section 1.02. Findings.
The declarations, determinations and findings declared,
made and found in the preamble to this Ordinance are hereby
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adopted, restated and made a part of the operative provisions
hereof.
Section 1.03. Table of Contents. Titles and Headinas.
The table of contents, titles and headings of the
Articles and Sections of this Ordinance have been inserted for
convenience of reference only and are not to be considered a
part hereof and shall not in any way modify or restrict any of
the terms or provisions hereof and shall never be considered or
given any effect in construing this Ordinance or any provision
hereof or in ascertaining intent, if any question of intent
should arise.
Section 1.04. Interpretation.
(a) Unless the context requires otherwise, words of
the masculine gender shall be construed to include correlative
words of the feminine and neuter genders and vice versa, and
words of the singular number shall be construed to include
correlative words of the plural number and vice versa.
(b) This Ordinance and all the terms and provisions
hereof shall be liberally construed to effectuate the purposes
set forth herein.
ARTICLE II
SECURITY FOR THE BONDS; INTEREST AND SINKING FUND
Section 2.01. Tax Lew.
(a) Pursuant to the authority granted by the
Constitution and laws of the State of Texas, there shall be
levied and there is hereby levied for the current year and for
each succeeding year hereafter while any of the Bonds or any
interest thereon is outstanding and unpaid, an ad valorem tax
on each one hundred dollars valuation of taxable property
within the City, at a rate sufficient, within the limit
prescribed by law, to pay the debt service requirements of the
Bonds, being (i) the interest on the Bonds, and (ii) a sinking
fund for their redemption at maturity or a sinking fund of 2%
per annum (whichever amount is greater), when due and payable,
full allowance being made for delinquencies and costs of
collection.
(b) The ad valorem tax thus levied shall be assessed
and collected each year against all property appearing on the
tax rolls of the City most recently approved in accordance with
law and the money thus collected shall be deposited as
collected to the Interest and Sinking Fund.
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(c) Said ad valorem tax, the collections therefrom,
and all amounts on deposit in or required hereby to be
deposited to the Interest and Sinking Fund are hereby 91edged
and committed irrevocably to the payment of the principal of
and interest on the Bonds when and as due and payable in
accordance with their terms and this Ordinance.
(d) If the lien and provisions of this Ordinance shall
be released in a manner permitted by Article XI hereof, then
the collection of such ad valorem tax may be suspended or
appropriately reduced, and further deposits to the Interest and
Sinking Fund may be suspended or appropriately reduced, as the
facts may permit. In determining the aggregate principal
amount of outstanding Bonds, there shall be subtracted the
amount of any Bonds that have been duly called for redemption
and for which money has been deposite~ with the Paying
Agent/Registrar for such redemption.
Section 2.02. Interest and Sinkina Fund.
(a) The City hereby establishes a special fund or
account, to be designated the "City of The Colony, Texas
General Obligation Refunding Bonds, Series 1989, Interest and
Sinking Fund," said fund to be maintained at an official
depository bank of the City separate and apart from all other
funds and accounts of the City.
(b) Money on deposit in or required by this Ordinance
to be deposited to the Interest and Sinking Fund shall be used
solely for the purpose of paying the interest on and principal
of the Bonds when and as due and payable in accordance with
their terms and this Ordinance.
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE BONDS
Section 3.01. Authorization.
The City's bonds to be designated "City of The Colony,
Texas General Obligation Refunding Bonds, Series 1989" are
hereby authorized to be issued and delivered in accordance with
the Constitution and laws of the State of Texas, including
particularly TEX. REV. CIV. STAT. ANN. art. 717k, as amended,
and Section 10.11 of the City's Home-Rule Charter. The Bonds
shall be issued in the aggregate principal amount of
$5,578,189.25 for the purpose of restructuring the City's debt,
thereby resulting in a total debt service savings to the City.
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Section 3.02. Date, Denomination. Maturities. and
Interest.
(a) The Current Interest Bonds shall be dated October
15, 1989. The Current Interest Bonds shall be in fully
registered form, without coupons, in the denomination of $5,000
or any integral multiple thereof and shall be numbered
separately from one upward, except the Initial Current Interest
Bond, which shall be numbered T-1.
(b) The Current Interest Bonds shall mature on
February 15 in the years and in the principal amounts and shall
bear interest at the per annum rates set forth in the following
schedulez
Principal Interest Principal Interest
YGar Amount R~te Year Amount Rate
1990 $220,000 5 90% 1998 $190,000 6.55%
1991 50,000 6 00% 1999 200 000 6 60%
1992 100,000 6 10% 2000 215 000 6 70%
1993 100,000 6 20% 2001 230 000 6 80%
1994 115,000 6 30% 2002 220 000 6 90%
1995 155,000 6 40% 2003 235 000 6 95%
1996 170,000 6 45% 2004 255.000 7 00%
1997 180,000 6 50% 2005 270.000 7 00%
(c) Interest shall accrue and be paid on each Current
Interest Bond respectively until its maturity, or earlier
redemption, from the later of the Bond Date or the most recent
Interest Payment Date to which interest has been paid or
provided for at the rate per annum for each respective maturity
specified in the schedule contained in subsection (b) above.
Such interest shall be payable semiannually on February 15 and
August 15 of each year, commencing February 15, 1990, computed
on the basis of a 360-day year of twelve 30-day months.
(d) The Capital Appreciation Bonds shall be dated
October 15, 1989. The Capital Appreciation Bonds shall be in
fully registered form, without coupons, in the Maturity Amounts
of $5,000 or any integral multiple thereof and shall be
numbered separately from CR-1 upward, except the Initial
Capital Appreciation Bond, which shall be numbered TCR-1.
(e) The Capital Appreciation Bonds shall be issued in
the original principal amounts and shall bear interest at the
stated per annum rates, calculated on the basis of a 360-day
year composed of twelve 30-day months (subject to rounding to
the Accreted Values thereof), and shall mature on February 15
in the years and in the respective Maturity Amounts set forth
in the following schedule:
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Original Stated
Principal Interest Maturity Compounding
Year Amount Rate Amount Rate
2006 6111,475.00 7.20% $350,000.00 7.20%
2007 293,782.50 7.20% 990,000.00 7.20%
2008 815,358.25 7.25% 2,975,000.00 7.25%
2009 752,318.00 7.30% 2,975,000.00 7.30%
2010 700,255.50 7.30% 2,975,000.00 7.30%
The term "Accreted Value," as used in this Ordinance with
respect to the Capital Appreciation Bonds, shall mean the
original principal amount of a Capital Appreciation Bond plus
the initial premium, if any, paid therefor, with interest
thereon compounded semiannually to February 15 or August 15, as
the case may be, next preceding the date of such calculation
(or, the date of calculation, if such calculation is made on
February 15 or August 15), at the compounding rate stated
therefor in the schedule above. For any day other than a
February 15 or August 15, the Accreted Value of a Capital
Appreciation Bond shall be determined by a straight-line
interpolation between the values for the applicable semiannual
compounding dates, based on 30-day months. Schedule I,
attached hereto, sets forth the Accreted Values of the Capital
Appreciation Bonds (per $5,000 of the Maturity Amount), as of
each February 15 and August 15.
(f) Interest shall accrue on each Capital Appreciation
Bond from the Closing Date and shall be compounded semiannually
on February 15 and August 15 each year, commencing February 15,
1990, until the Maturity Date therefor. The accrued interest
on each Capital Appreciation Bond shall be payable at maturity
as a portion of the Maturity Amount.
Section 3.03. Medium. Method and Place of Payment.
(a) The principal of and interest on the Current
Interest Bonds and the Maturity Amount of the Capital
Appreciation Bonds shall be paid in lawful money of the United
States of America.
(b) Interest on the Current Interest Bonds shall be
payable to the Owners as shown in the Register at the close of
business on the Record Date.
(c) Interest on each Current Interest Bond shall be
paid by check dated as of the Interest Payment Date, and sent
on or before the Interest Payment Date by first class United
States mail, postage prepaid, by the Paying Agent/Registrar to
each Owner at the address of each Owner as such appears in the
Register or by such other customary banking arrangements
acceptable to the Paying Agent/Registrar and the person to whom
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interest is to be paid; provided, however, that such person
shall bear all risk and expense of such other customary banking
arrangements.
(d) The principal of each Current Interest Bond and
the Maturity Amount of each Capital Appreciation Bond shall be
paid to the Owner thereof on the Maturity Date upon
presentation and surrender of such Bond at the principal
corporate trust office of the Paying Agent/Registrar.
(e) If the date for the payment of the principal of or
interest on the Current Interest Bonds or the Maturity Amount
of the Capital Appreciation Bonds shall be a Saturday, Sunday,
legal holiday, or day on which banking institutions in the city
where the Paying Agent/Registrar is located are required or
authorized by law or executive order to close, the date for
such payment shall be the next succeeding day which is not a
Saturday, Sunday, legal holiday, or day on which banking
institutions are required or authorized to close, and payment
on such date shall for all purposes be deemed to have been made
on the due date thereof as specified in this Section.
(f) In the event of a nonpayment of interest on a
scheduled payment date, and for thirty (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 fifteen (15) days after
the Special Record Date) shall be sent at least five business
days prior to the Special Record Date by United States mail,
first class, postage prepaid, to the address of each Owner of a
Bond appearing on the books of the Paying Agent/Registrar at
the close of business on the last business day next preceding
the date of mailing of such notice.
(g) Unclaimed payments of amounts due hereunder that
remain unclaimed by the Owners after the applicable payment or
redemption date shall be segregated in a special escrow account
and held in trust, uninvested by the Paying Agent/Registrar,
for the account of the Owners of the Bonds to which such
unclaimed payments pertain. Subject to any applicable escheat,
abandoned property, or similar law, payments remaining
unclaimed by the Owners entitled thereto for two years after
the applicable payment or redemption date shall be applied to
the next payment on the Bonds thereafter coming due; to the
extent any such moneys remain after the retirement of all
outstanding Bonds, such moneys shall be paid to the City to be
used for any lawful purpose. Thereafter, neither the City, the
Paying Agent/Registrar, nor any other person shall be liable or
responsible to any owners of such Bonds for any further payment
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of such unclaimed moneys or on account of any such Bonds,
subject to any applicable escheat, abandoned property, or
similar law.
Section 3.04. Execution and Reaistration of Bonds.
(a) The Bonds shall be executed on behalf of the City
by the Mayor and City Secretary of the City, by their manual or
facsimile signatures, and the official seal of the City shall
be impressed or placed in facsimile thereon. Such facsimile
signatures on the Bonds shall have the same effect as if each
of the Bonds had been signed manually and in person by each of
said officers, and such facsimile seal on the Bonds shall have
the same effect as if the official seal of the City had been
manually impressed upon each of the Bonds.
(b) In the event any officer of the City whose manual
or facsimile signature appears on the Bonds ceases to be such
officer before the authentication of such Bonds or before the
delivery thereof, such 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 Bond shall be valid
or obligatory for any purpose or be entitled to any security or
benefit of this Ordinance unless and until there appears
thereon the Certificate of Paying Agent/Registrar substantially
in the form provided herein, duly authenticated by manual
execution by an officer or duly authorized signatory of the
Paying Agent/Registrar. It shall not be required that the same
officer or authorized signatory of the Paying Agent/Registrar
sign the Certificate of Paying Agent/Registrar on all of the
Bonds. In lieu of the executed Certificate of Paying
Agent/Registrar described above, the Initial Bonds delivered at
the Closing Date shall have attached thereto the Comptroller's
Registration Certificate substantially in the form provided
herein, manually executed by the Comptroller of Public Accounts
of the State of Texas, orby his duly authorized agent, which
certificate shall be evidence that the Initial Bonds have been
duly approved by the Attorney General of the State of Texas and
that they are valid and binding obligations of the City, and
have been registered by the Comptroller of Public Accounts of
the State of Texas.
(d) On the Closing Date, two Initial Bonds, being (i)
a single Initial Current Interest Bond representing the entire
principal amount of the Current Interest Bonds, payable in
stated installments to the Purchaser or its designee, and (ii)
a single Initial Capital Appreciation Bond representing the
aggregate Maturity Amount of the Capital Appreciation Bonds,
payable in stated installments to the Purchaser, or its
designee, each such Initial Bond to be executed by manual or
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facsimile signature of the Mayor and City Secretary of the
City, approved by the Attorney General, and registered and
manually signed by the Comptroller of Public Accounts, will be
delivered to the Purchaser or its designee. Upon payment for
the Initial Bonds, the Paying Agent/Registrar shall cancel the
Initial Bonds and exchange therefor registered definitive Bonds
of like kind, in integral multiples of $5,000, each definitive
Bond having a single, specified maturity date, principal ~mount
(with respect to the Current Interest Bonds) or Maturity Amount
(with respect to the Capital Appreciation Bonds) and interest
rate, all in accordance with instructions received from the
Purchaser or its designee and this Ordinance. It shall be the
duty of the Purchaser or its designee to furnish to the Paying
Agent/Registrar, at least five (5) business days prior to the
Closing Date, written instructions on forms which the Purchaser
or its designee must request of and obtain from, and which
shall be provided by, the Paying Agent/Registrar, designating
the names in which such definitive Bonds are to be registered,
the addresses of the Owners, the respective maturity dates,
interest rates and denominations. If such written instructions
are not received within the specified time period, the
cancellation of the Initial Bond and delivery of definitive
Bonds in exchange therefor may be delayed until such
instructions are received.
Section 3.05. Ownership.
(a) The City, the Paying Agent/Registrar and any other
person may treat the person in whose name any Bond is
registered as the absolute owner of such Bond for the purpose
of making and receiving payment of the principal or Maturity
Amount thereof, as applicable, for the further purpose of
making and receiving payment of the interest thereon (subject
to the provisions herein that for the Current Interest Bonds
interest is to be paid to the person in whose name the Current
Interest Bond is registered on the Record Date), and for all
other purposes, whether or not such Bond is overdue, and
neither the City nor the Paying Agent/Registrar shall be bound
by any notice or knowledge to the contrary.
(b) Ail payments made to the Owner of a Bond shall be
valid and effectual and shall discharge the liability of the
City and the Paying Agent/Registrar upon such Bond to the
extent of the sums paid.
Section 3.06. Reaistration. Transfer and Exchanae.
(a) So long as any Bonds remain outstanding, the City
shall cause the Paying Agent/Registrar to keep at its principal
corporate trust office a Bond register in which, subject to
such reasonable regulations as it may prescribe, the Paying
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Agent/Registrar shall provide for the registration and transfer
of Bonds in accordance with this Ordinance.
(b) The ownership of a Bond may be transferred and
exchanged only upon the presentation and surrender of the Bond
to the Paying Agent/Registrar. A Bond may be assigned by the
execution of an assignment form on the Bond or by other
instrument of transfer and assignment acceptable to the Paying
Agent/Registrar. A new Bond or Bonds will be delivered by the
Paying Agent/Registrar, in lieu of the Bond being transferred
or exchanged, at the principal corporate office of the Paying
Agent/Registrar, or sent by United States mail, first class,
postage prepaid, to the new registered owner or his designee.
No transfer of any Bond shall be effective until entered in the
Register.
(c) The Bonds shall be exchangeable upon the
presentation and surrender thereof at the principal corporate
office of the Paying Agent/Registrar for a Bond or Bonds of the
same maturity and interest rate and in any denomination or
denominations of any integral multiple of $5,000 and in an
aggregate principal amount (with respect to the Current
Interest Bonds) or Maturity Amount (with respect to the Capital
Appreciation Bonds) equal to the unpaid principal amount or
Maturity Amount, as applicable, of the Bonds presented for
exchange. The Paying Agent/Registrar is hereby authorized to
authenticate and deliver Bonds exchanged for other Bonds in
accordance with this Section.
(d) Each exchange Bond delivered by the Paying
Agent/Registrar in accordance with this Section shall
constitute an original contractual obligation of the City and
shall be entitled to the benefits and security of this
Ordinance to the same extent as the Bond or Bonds in lieu of
which such exchange Bond is delivered.
(e) No service charge shall be made to the Owner for
the initial registration, any subsequent transfer, or exchange
for a different denomination of any of the Bonds. The Paying
Agent/Registrar, however, may require the Owner to pay a sum
sufficient to cover any tax or other governmental charge that
is authorized to be imposed in connection with the
registration, transfer or exchange of a Bond.
Section 3.07. Cancellation.
Ail Bonds paid or redeemed before scheduled maturity in
accordance with this Ordinance, and all Bonds in lieu of which
exchange Bonds or replacement Bonds are authenticated and
delivered in accordance with this Ordinance, shall be cancelled
upon the making of proper records regarding such payment,
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exchange or replacement. The Paying Agent/Registrar shall then
return such cancelled Bonds to the City.
Section 3.08. Tem o on s.
(a) Following the delivery and registration of the
Initial Bonds and pending the preparation of definitive Bonds,
the proper officers of the City may execute and, upon the
City's request, the Paying Agent/Registrar shall authenticate
and deliver, one or more temporary Bonds that are printed,
lithographed, typewritten, mimeographed or otherwise produced,
in any denomination, substantially of the tenor of the
definitive Bonds in lieu of which they are delivered, without
coupons, and with such appropriate insertions, omissions,
substitutions and other variatlons as the officers of the City
executing such temporary Bonds may determine, as evidenced by
their signing of such temporary Bonds.
(b) Until exchanged for Bonds in definitive form, such
Bonds in temporary form shall be entitled to the benefit and
security of this Ordinance.
(c) The City, without unreasonable delay, shall
prepare, execute and deliver to the Paying Agent/Registrar the
Bonds in definitive form; thereupon, upon the presentation and
surrender of the Bond or Bonds in temporary form to the Paying
Agent/Registrar, the Paying Agent/Registrar shall cancel the
Bonds in temporary form and authenticate and deliver in
exchange therefor a Bond or Bonds of the same maturity and
series, in definitive form, in the authorized denomination, and
in the same aggregate principal amount (with respect to the
Current Interest Bonds) or Maturity Amount (with respect to the
Capital Appreciation Bonds), as the Bond or Bonds in temporary
form surrendered. Such exchange shall be made without the
making of any charge therefor to any Owner.
Section 3.09. Replacement Bonds.
(a) Upon the presentation and surrender to the Paying
Agent/Registrar of a mutilated Bond, the Paying Agent/Registrar
shall authenticate and deliver in exchange therefor a
replacement Bond of like tenor and principal amount (with
respect to the Current Interest Bonds) or Maturity Amount (with
respect to the Capital Appreciation Bonds), bearing a number
not contemporaneously outstanding. The City or the Paying
Agent/Registrar may require the Owner of such Bond to pay a sum
sufficient to cover any tax or other governmental charge that
is authorized to be imposed in connection therewith and any
other expenses connected therewith.
(b) In the event that any Bond is lost, apparently
destroyed or wrongfully taken, the Paying Agent/Registrar,
pursuant to the applicable laws of the State of Texas and in
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07258
the absence of notice or knowledge that such Bond has been
acquired by a bona fide purchaser, shall authenticate and
deliver a replacement Bond of like tenor and principal amount
(with respect to the Current Interest Bonds) or Maturity Amount
(with respect to the Capital Appreciation Bonds), bearing a
number not contemporaneously outstanding, provided that the
Owner first complies with the following requirements~
(i) furnishes to the Paying Agent/Registrar
satisfactory evidence of his or her ownership of and the
circumstances of the loss, destruction or theft of such
Bond~
(ii) furnishes such security or indemnity as may
be required by the Paying Agent/Registrar to save it and
the City harmless~
(iii) pays all expenses and charges in connection
therewith, including, but not limited to, printing costs,
legal fees, fees of the Paying Agent/Registrar and any
tax or other governmental charge that is authorized to be
imposed~ and
(iv) satisfies any other reasonable requirements
imposed by the City and the Paying Agent/Registrar.
(c) After the delivery of such replacement Bond, if a
bona fide purchaser of the original Bond in lieu of which such
replacement Bond was issued presents for payment such original
Bond, the City and the Paying Agent/Registrar shall be entitled
to recover such replacement Bond from the person to whom it was
delivered or any person taking therefrom, except a bona fide
purchaser, and shall be entitled to recover upon the security
or indemnity provided therefor to the extent of any loss,
damage, cost or expense incurred by the City or the Paying
Agent/Registrar in connection therewith.
(d) In the event that any such mutilated, lost,
apparently destroyed or wrongfully taken Bond has become or is
about to become due and payable, the Paying Agent/Registrar, in
its discretion, instead of issuing a replacement Bond, may pay
such Bond if it has become due and payable or may pay such Bond
when it becomes due and payable.
(e) Each replacement Bond delivered in accordance with
this Section shall constitute an original additional
contractual obligation of the City and shall be entitled to the
benefits and security of this Ordinance to the same extent as
the Bond or Bonds in lieu of which such replacement Bond is
delivered.
--13--
0725B
ARTICLE IV
REDEMPTION OF BONDS BEFORE MATURITY
Section 4.01. Limitation on Redemption.
The Bonds shall be subject to redemption before their
scheduled maturity only as provided in this Article IV.
Section 4.02. Optional Redemption
(a) The City reserves the option to redeem Bonds
maturing on and after February 15, 2001, in whole or in part,
before their respective scheduled maturity dates, on February
15, 2000, or on any February 15 or August 15 thereafter, such
redemption date or dates to be fixed by the City, at a
redemption price equal to (i) in the case of Current Interest
Bonds, the principal amount thereof plus accrued interest to
the redemption date, and (ii) in the case of Capital
Appreciation Bonds, the Accreted Value thereof determined in
accordance with Schedule I attached to this Ordinance.
(b) The City, at least 45 days before the redemption
date, unless a shorter period shall be satisfactory to the
Paying Agent/Registrar, shall notify the Paying Agent/Registrar
of such redemption and of the principal amount of Bonds to be
redeemed.
Section 4.03. Partial Redemption.
(a) If less than all of the Bonds are to be redeemed,
the City shall determine the maturities and the amounts thereof
to be redeemed and shall direct the Paying Agent/Registrar to
call by lot the Bonds, or portions thereof, within such
maturities and in such principal amounts, for redemption.
(b) A portion of a single Current Interest Bond of a
denomination greater than $5,000 may be redeemed, but only in a
principal amount equal to $5,000 or any integral multiple
thereof. The Paying Agent/Registrar shall treat each $5,000
portion of such Current Interest Bond as though it were a
single Bond for purposes of selection for redemption.
(c) A portion of a single Capital Appreciation Bond of
a Maturity Amount greater than $5,000 may be redeemed, but only
in a Maturity Amount of $5,000 or any integral multiple
thereof. The Paying Agent/Registrar shall treat each $5,000
Maturity Amount of such Capital Appreciation Bond as though it
were a single Bond for purposes of selection for redemption.
(d) Upon surrender of any Bond for redemption in part,
the Paying Agent/Registrar, in accordance with Section 3.06 of
this Ordinance, shall authenticate and deliver an exchange Bond
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07258
or Bonds in an aggregate principal amount equal to the
unredeemed principal amount or Maturity Amount, as applicable
to the Bond so surrendered, such exchange being without charge.
(e) The Paying Agent/Registrar shall promptly notify
the City in writing of the principal amount or Maturity Amount,
as applicable, to be redeemed of any Bond as to which only a
portion thereof is to be redeemed.
Section 4.04. Notice of Redemption to Owners.
(a) The Paying Agent/Registrar shall give notice of
any redemption of Bonds by sending notice by first class United
States mail, postage prepaid, not less than 30 days or more
than 60 days before the date fixed for redemption, to the Owner
of each Bond or portion thereof to be redeemed, at the address
shown on the Register.
(b) The notice shall state the redemption date, the
redemption price, the place at which the Bonds are to be
surrendered for payment, and, if less than all the Bonds
outstanding are to be redeemed, an identification of the Bonds
or portions thereof to be redeemed.
(c) Any notice given as provided in this Section shall
be conclusively presumed to have been duly given, whether or
not the Owner receives such notice.
Section 4.05. Payment UPon Redemption.
(a) Before or on each redemption date, the City shall
deposit with the Paying Agent/Registrar money sufficient to pay
all amounts due on the redemption date, and the Paying
Agent/Registrar shall make provision for the payment of the
~onds to be redeemed on such date by setting aside and holding
in trust such amounts as are received by the Paying
Agent/Registrar from the City and shall use such funds solely
for the purpose of paying the principal of, redemption premium,
if any, accrued interest and Accreted Value, as applicable, on
the Bonds being redeemed.
(b) Upon presentation and surrender of any Bond called
for. redemption at the principal corporate trust office of the
Paying Agent/Registrar on or after the date fixed for
redemption, the Paying Agent/Registrar shall pay the principal
of, redemption premium, if any, and Accreted Value, as
applicable on such Bond to the date of redemption from the
money set aside for such purpose. Interest on any Current
Interest Bond called for redemption shall be paid to the Owner
in accordance with the provisions of Section 3.03 of this
Ordinance.
-15-
0725B
Section 4.06. Effect of Redemption.
(a) Notice of redemption having been given as provided
in Section 4.04 of this Ordinance, the Bonds Or portions
thereof called for redemption shall become due and payable on
the date fixed for redemption; thereafter, unless the City
defaults in its obligation to make provision for the payment of
the principal thereof, redemption premium, if any, accrued
interest thereon, or the Accreted Value, as applicable, such
Bonds or portions thereof shall cease to bear interest from the
date fixed for redemption, whether or not such Bonds are
presented and surrendered for payment on such date.
(b) If the City shall fail to make provision for the
payment of all sums due on a redemption date, then any Bond or
portion thereof called for redemption shall continue to bear or
accrue interest at the rate stated on the Bond until due
provision is made for the payment of same by the City.
Section 4.07. Limitation on Transfer.
Neither the City nor the Paying Agent/Registrar shall be
required to transfer or exchange any Bond called for redemption
within 30 days of the date fixed for redemption; provided,
however, that such limitation shall not apply to the uncalled
principal balance of a Bond called for redemption in part.
ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01. Appointment of Initial Pavin~
A~ent/Re~istrar.
MTrust Corp, National Association, Dallas, Texas, is
hereby appointed as the initial Paying Agent/Registrar for the
Bonds.
Section 5.02. Oualifications.
Each Paying Agent/Registrar shall be a commercial bank,
trust company organized under the laws of the State of Texas,
or other entity duly qualified and legally authorized to serve
as and perform the duties and services of paying agent and
registrar for the Bonds.
Section 5.03. Maintainin~ Pavin~ A~ent/Reqistrar.
(a) At all times while any Bonds are outstanding, the
City will maintain a Paying Agent/Registrar that is qualified
under Section 5.02 of this Ordinance. The Mayor of the City is
hereby authorized and directed to execute an agreement with the
-16-
Paying Agent/Registrar specifying the duties and
responsibilities of the City and the Paying Agent/Registrar.
The signature of the Mayor shall be attested by the City
Secretary of the City.
(b) If the Paying Agent/Registrar resigns or otherwise
ceases to serve as such, the City will promptly appoint a
replacement.
Section 5.04. ~.
The City, upon not less than 60 days notice, reserves the
right to terminate the appointment of any Paying
Agent/Registrar by delivering to the entity whose appointment
is to be terminated written notice of such termination.
Section 5.05. Notice of Chanoe to Owners.
Promptly upon each change in the entity serving as Paying
Agent/Registrar, the City will cause notice of the change to be
sent to each Owner by first class United States mail, postage
prepaid, at the address in the Register, stating the effective
date of the change and the name and mailing address of the
replacement Paying Agent/Registrar.
Section 5.06. Aoreement 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 the performance of the duties and functions
of Paying Agent/Registrar prescribed hereby.
Section 5.07. Delivery of Records to Successor.
If a Paying Agent/Registrar is replaced, such Paying
Agent/Registrar, promptly upon the appointment of the
successor, will deliver the Register (or a copy thereof) and
all other pertinent books and records relating to the Bonds to
the successor Paying Agent/Registrar.
ARTICLE VI
FORM OF THE BONDS
Section 6.01. Form Generally.
(a) The Bonds, including the Registration Certificate
of the Comptroller of Public Accounts of the State of Texas,
the Certificate of the Paying Agent/ Registrar, and the
Assignment form to appear on each of the Bonds (i) shall be
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07258
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 Bonds, as
evidenced by their execution thereof.
(b) Any portion of the text of any Bonds may be set
forth on the reverse side thereof, with an appropriate
reference thereto on the face of the Bonds.
(c) The definitive Bonds shall be printed,
lithographed, or engraved, and may be produced by any
combination of these methods or produced in any other similar
manner, all as determined by the officers executing such Bonds,
as evidenced by their execution thereof.
(d) The Initial Bonds submitted to the Attorney
General of the State of Texas may be typewritten and
photocopied or otherwise reproduced.
Section 6.02. Form of the Current Interest Bonds.
The form of the Current Interest Bonds, 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 Current Interest Bonds, shall be substantially
as follows:
(a) Form of Current Interest Bond.
REGISTERED REGISTERED
No. $.
United States of America
State of Texas
COUNTY OF DENTON
CITY OF THE COLONY, TEXAS
GENERAL OBLIGATION REFUNDING BOND
SERIES 1989
CURRENT INTEREST BOND
INTEREST RATE: MATURITY DATE: BOND DATE: CUSIP NUMBER:
October 15, 1989
-18-
The City of The Colony, Texas (the "City"), in the County
of Denton, State of Texas, for value received, hereby promises
to pay to
or registered assigns, on the Maturity Date specified above,
the sum of
DOLLARS
unless this Bond shall have been sooner called for redemption
and the payment of the principal hereof shall have been paid or
provided for, and to pay interest on such principal amount from
the later of the Bond Date specified above or the most recent
interest payment date to which interest has been paid or
provided for until payment of such principal amount has been
paid or provided for, at the per annum rate of interest
specified above, computed on the basis of a 360-day year of
twelve 30-day months, such interest to be paid semiannually on
February 15 and August 15 of each year, commencing February 15,
1990.
The principal of this Bond shall be payable without
exchange or collection charges in lawful money of the United
States of .America upon presentation and surrender of this Bond
at the principal corpor, ate trust office of the Paying
Agent/Registrar executing the registration certificate
appearing hereon. Interest on this Bond is payable by check
dated as of the interest payment date, mailed by the Paying
Agent/Registrar on or before such interest payment date 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
and the person to whom interest is to be paid; provided,
however, that such person shall bear all risk and expense of
such other customary banking arrangements. For the purpose of
the payment of interest on this Bond, the registered owner
shall be the person in whose name this Bond is registered at
the close of business on the "Record Date," which shall be the
last business day of the month next preceding such interest
payment date. In the event of a nonpayment of interest on a
scheduled payment date, and for 30 days the. reafter, 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 date shall be 15 days after the Special
Record Date) shall be sent at least five business days prior to
the Special Record Date by United States mail, first class,
-19-
OTZSB
postage prepaid, to the address of each owner of a Bond
appearing on the books of the Paying Agent/Registrar at the
close of business on the last business day next preceding the
date of mailing of such notice.
If the date for the payment of the principal of or
interest on this Bond shall be a Saturday, Sunday, legal
holiday, or day on which banking institutions in the city where
the Paying Agent/Registrar is located are required or
authorized by law or executive order to close, the date for
such payment shall be the next succeeding day which is not a
Saturday, Sunday, legal holiday, or day on which banking
institutions are required or authorized to close, and payment
on such date shall for all purposes be deemed to have been made
on the original date payment was due.
This Bond is one of a series of fully registered bonds
specified in the title hereof issued in the aggregate principal
amount of $5,578,189.25 (herein referred to as the "Bonds"),
issued pursuant to a certain ordinance of the City (the
"Ordinance") for the purpose of refunding certain outstanding
obligations of the City secured by a pledge of ad valorem taxes
on property located within the City. The Bonds are issued in
part (i) as "Current Interest Bonds," which total $2,905,000.00
in principal amount and pay accrued interest at stated
intervals to the registered owners, and (ii) as "Capital
Appreciation Bonds," which total $2,673,189.25 in original
principal amount and pay no accrued interest prior to their
stated maturities or earlier redemption. This Bond is a
Current Interest Bond payable as to principal and interest as
herein provided.
The City has reserved the option to redeem the Bonds
maturing on and after February 15, 2001, in whole or in part
before their respective scheduled maturity dates, on February
15, 2000, or on any February 15 or August 15 thereafter, at a
redemption price equal to (i) in the case of Current Interest
Bonds, the principal amount thereof plus accrued interest to
the date of redemption, and (ii) in the case of Capital
Appreciation Bonds, the "Accreted Value" thereof determined in
accordance with the Table of Accreted Values attached as
Schedule I to the Ordinance.
If less than all of the Bonds are to be redeemed, the
City shall determine the maturity or maturities and the amounts
thereof to be redeemed and shall direct the Paying
Agent/Registrar to call by lot the Bonds, or portions thereof,
within such maturity and in such principal amounts, for
redemption.
Notice of such redemption or redemptions shall be given
by first class mail, postage prepaid, not less than 30 days or
more than 60 days before the date fixed for redemption, to the
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0725~
registered owner of each of the Bonds to be redeemed in whole
or in part. Notice having been so given, the Bonds or portions
thereof designated for redemption shall become due and payable
on the redemption date specified in such notice, and from and
after such date, notwithstanding that any of the Bonds or
portions thereof so called for redemption shall not have been
surrendered for payment, interest on such Bonds or portions
thereof shall cease to accrue.
As provided in the Ordinance, and subject to certain
limitations therein set forth, this Bond is ~ransferable upon
surrender of this Bond for transfer at the principal corporate
office of the Paying Agent/Registrar with such endorsement or
other evidence of transfer as is acceptable to the Paying
Agent/Registrar~ thereupon, one or more new fully registered
Bonds of the same stated maturity, of authorized denominations,
bearing the same rate of interest, and for the same aggregate
principal amount will be issued to the designated transferee or
transferees.
Neither the City nor the Paying Agent/Registrar shall be
required to transfer or exchange any 'Bond called for redemption
within 30 days of the date fixed for redemption~ provided,
however, that such limitation shall not apply to the uncalled
principal balance of a Bond called for redemption in part.
The City, the Paying Agent/Registrar, and any other
person may treat the person in whose name this Bond is
registered as the owner hereof for the purpose of receiving
payment as herein provided (except interest shall be paid to
the person in whose name this Bond is registered on the "Record
Date") and for all other purposes, whether or not this Bond be
overdue, and neither the City nor the Paying Agent/Registrar
shall be affected by notice to the contrary.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of
this Bond and the series of which it is a part is duly
authorized by law; that all acts, conditions and things
required to be done precedent to and in the issuance of the
Bonds have been properly done and performed and have happened
in regular and due time, form and manner, as required by law;
that sufficient and proper provision for the levy and
collection of taxes has been made, within the limit prescribed
by law, which when collected shall be appropriated exclusively
to the timely payment of the principal of and interest on the
Bonds.
IN WITNESS WHEREOF, the City has caused this Bond to be
executed by the manual or facsimile signatures of the Mayor and
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07~5B
City Secretary of the City, and the official seal of the City
has been duly impressed or placed in facsimile on this Bond.
city of Th. .ayor, CitYT x2he Colony,
(b) Form of Comntroller's Reaistration Certificate.
The following Comptroller's Registration Certificate may be
deleted from the definitive Current Interest Bonds if such
certificate on the Initial Current Interest Bond is fully
executed.
OFFICE OF THE COMPTROLLER S
OF PUBLIC ACCOUNTS S REGISTER NO.
OF THE STATE OF TEXAS S
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 Bond has been examined by him as
required by law, that he finds that it has been issued in
conformity with the Constitution and laws of the State of
Texas, and that it is a valid and binding obligation of the
City of The Colony, Texas, and that this Bond has this day been
registered by me.
Witness my hand and seal of office at Austin,
Texas,
Comptroller of Public Accounts
[SEAL] of the State of Texas
(c) Form of Certificate of Pavino Aoent/Reaistrar.
The following Certificate of Paying Agent/Registrar may be
deleted from the Initial Current Interest Bond if the
Comptroller's Registration Certificate appears thereon.
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0725B
CERTIFICATE OF PAYING AGENT/REGISTRAR
The records of the Paying Agent/Registrar show that the
Initial Current Interest Bond of this series of bonds was
approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts of the State
of Texas and that this is one of the Bonds referred to in the
within-mentioned Ordinance.
MTRUST CORP, NATIONAL ASSOCIATION,
Dallas, Texas,
as Paying Agent/Registrar
Dated~ By~
Authorized Signatory
(d) Form of Assianment.
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 numbers .)
the within Bond and all rights hereunder and hereby irrevocably
constitutes and appoints
attorney to transfer the within Bond on the books kept for
registration hereof, with full power of substitution in the
premises.
Dated=
NOTICEs The signature on this
Assignment must correspond with
the name of the
Signature Guaranteed By: registered owner as it appears
on the face of the within Bond
in every particular and must be
guaranteed by an officer of a
federal or state bank or a
member of the National
Association of Securities
Dealers.
Authorized Signatory
-23-
(e) The Initial Current Interest Bond shall be in the
form set forth in paragraphs (a) through (d) of this Section,
except for the following alterations~
(i) immediately under the name of the Current
Interest Bond, the headings "INTEREST RATE" and "MATURITY
DATE" shall both be completed with the words "As shown
below";
(ii) in the first paragraph of the Current
Interest Bond, the words "on the Maturity Date specified
above," shall be deleted and the following will be
inserted= "on February 15 in each of the years, in the
principal installments, and bearing interest at the per
annum rates in accordance with the following schedule=
Principal Interest
Years ~ Rates
(Information to be inserted from
schedule in Section 3.02(b) of this Ordinance)
(iii) in the second paragraph of the Current
Interest Bond, 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 MTrust
Corp, National Association, Dallas, Texas."; and
(iv) the Initial Current Interest Bond shall be
numbered T-1.
Section 6.03. Form of the Capital Appreciation Bonds.
The form of the Capital Appreciation Bonds, 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 Capital Appreciation Bonds, shall be
substantially as follows~
07258
(a) Form of Capital Appreciation Bond.
REGISTERED REGISTERED
MATURITY AMOUNT
NO. CR - $
United States of America
State of Texas
COUNTY OF DENTON
CITY OF THE COLONY, TEXAS
GENERAL OBLIGATION REFUNDING BOND
SERIES 1989
CAPITAL APPRECIATION BOND
INTEREST CUSIP
RATE: MATURITY DATE: CLOSING DATE~ NUMBER:
December 12, 1989
The City of The Colony, Texas (the "City"), in the County
of Denton, State of Texas, for value received, hereby promises
to pay to
or registered assigns, on the Maturity Date specified above,
the Maturity Amount of this Bond, being the sum of
DOLLARS
unless this Bond has been called for prior redemption and the
payment of the redemption price has been paid or provided for,
without exchange or collection charges in lawful money of the
United States of America upon presentation and surrender of
this Bond at the principal corporate trust office of the Paying
Agent/Registrar executing the registration certificate
appearing hereon.
The Maturity Amount represents the total of the original
principal amount hereof and accrued and compounded interest
thereon to the Maturity Date. Interest accrues on the original
principal amount hereof from the Closing Date specified above,
and will compound semiannually on February 15 and August 15 in
each year, commencing February 15, 1990. The term "Accreted
Value," as used herein, means the original principal amount of
this Bond plus the initial premium, if any, paid herefor with
interest thereon compounded semiannually to the February 15 or
August 15 next preceding the date of such calculation (or, the
date of calculation, if such calculation is made on February 15
-25-
or August 15) at the compounding rate stated therefor in the
Table of Accreted Values printed on the reverse side of this
Bond. For any date other than a February 15 or August 15, the
Accreted Value of this Bond shall be determined by a
straight-line interpolation between the values for the
applicable semiannual compounding dates, based on 30-day months.
If the date for the payment of the Maturity Amount on
this Bond shall be a Saturday, Sunday, legal holiday, or day on
which banking institutions in the city where the Paying
Agent/Registrar is located are required or authorized by law or
executive order to close, the date for such payment shall be
the next succeeding day which is not a Saturday, Sunday, legal
holiday, or day on which banking institutions are required or
authorized to close, and payment on such date shall for all
purposes be deemed to have been made on the Maturity Date.
This Bond is one of a series of fully registered bonds
specified in the title hereof issued in the aggregate principal
amount of $5,578,189.25 (herein referred to as the "Bonds"),
issued pursuant to a certain ordinance of the City (the
"Ordinance") for the purpose of refunding certain outstanding
obligations of the City secured by a pledge of ad valorem taxes
on property located within the City. The Bonds are issued in
part (i) as "Current Interest Bonds," which total $2,905,000.00
in principal amount and pay accrued interest at stated
intervals to the registered owners, and (ii) as "Capital
Appreciation Bonds," which total $2,673,189.25 in original
principal amount and pay no accrued interest prior to their
stated maturities. This Bond is a Capital Appreciation Bond
payable as to principal and interest as herein provided.
The City has reserved the option to redeem the Bonds
maturing on and after February 15, 2001, in whole or in part
before their respective scheduled maturity dates, on February
15, 2000, or on any February 15 or August 15 thereafter, at a
redemption price equal to (i) in the case of Current Interest
Bonds, the principal amount thereof plus accrued interest to
the date of redemption, and (ii) in the case of Capital
Appreciation Bonds, the "Accreted Value" thereof determined in
accordance with the Table of Accreted Values printed on this
Bond.
If less than all of the bonds are to be redeemed, the
City shall determine the maturity or maturities and the amounts
thereof to be redeemed and shall direct the Paying
Agent/Registrar to call by lot the bonds, or portions thereof,
within such maturity and in such principal amounts, for
redemption.
Notice of such redemption or redemptions shall be given
by first class mail, postage prepaid, not less than 30 days or
more than 60 days before the date fixed for redemption, to the
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0725B
registered owner of each of the Bonds to be redeemed in whole
or in part. Notice having been so given, the Bonds or portions
thereof designated for redemption shall become due and payable
on the redemption date specified in such notice, and from and
after such date, notwithstanding that any of the Bonds or
portions thereof so called for redemption shall not have been
surrendered for payment, interest on such Bonds or portions
thereof shall cease to accrue.
As provided in the Ordinance, and subject to certain
limitations therein set forth, this Bond is transferable upon
surrender of this Bond for transfer at the principal corporate
office of the Paying Agent/Registrar with such endorsement or
other evidence of transfer as is acceptable to the Paying
Agent/Registrar~ thereupon, one or more new fully registered
Bonds of the same stated maturity, of authorized denominations,
bearing the same rate of interest, and for the same aggregate
Maturity Amount will be issued to the designated transferee or
transferees.
Neither the City nor the Paying Agent/Registrar shall be
required to transfer or exchange any Bond called for redemption
within 30 days of the date fixed for redemption~ provided,
however, that such limitation shall not apply to the uncalled
principal balance of a Bond called for redemption in part.
The City, the Paying Agent/Registrar, and any other
person may treat the person in whose name this Bond is
registered as the owner hereof for the purpose of receiving
payment as herein provided, and for all other purposes, whether
or not this Bond be overdue, and neither the City nor the
Paying Agent/Registrar shall be affected by notice to the
contrary.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of
this Bond and the series of which it is a part is duly
authorized by law~ that all acts, conditions and things
required to be done precedent to and in the issuance of the
Bonds have been properly done and performed and have happened
in regular and due time, form and manner, as required by law~
that sufficient and proper provision for the levy and
collection of taxes has been made, within the limit prescribed
by law, which when collected shall be appropriated exclusively
to the timely payment of the principal of and interest on the
Bonds.
IN WITNESS WHEREOF, the City has caused this Bond to be
executed by the manual or facsimile signatures of the Mayor and
City Secretary of the City, and the official seal of the City
has been duly impressed or placed in facsimile on this Bond.
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0725B
, City of The Mayor~ CltYT~xa~he Colony,
(b) Form of Comptroller's Reaistration Certifica%e.-
The following Comptroller's Registration Certificate may be
deleted from the definitive Capital Appreciation Bonds if such
certificate on the Initial Capital Appreciation Bond is fully
executed.
OFFICE OF THE COMPTROLLER S
OF PUBLIC ACCOUNTS S REGISTER NO.
OF THE STATE OF TEXAS S
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 Bond has been examined by him as
required by law, that he finds that it has been issued in
conformity with the Constitution and laws of the State of
Texas, and that it is a valid and binding obligation of the
City of The Colony, Texas, and that this Bond has this day been
registered by me.
Witness my hand and seal of office at Austin,
Texas,
Comptroller of Public
Accounts of the
[SEAL] State of Texas
(c) Form of. Certificate .of Pavina A~ent/Re~i~rar.
The following Certificate of Paying Agent/Registrar may be
deleted from the Initial Capital Appreciation Bond if the
Comptroller's Registration Certificate appears thereon.
CERTIFICATE OF PAYING AGENT/REGISTRAR
The records of the Paying Agent/Registrar show that the
Initial Capital Appreciation Bond of this series of bonds was
approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts of the State
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of Texas and that this is one of the Bonds referred to in the
within-mentioned Ordinance.
MTRUST CORP, NATIONAL ASSOCIATION
Dallas, Texas
as Paying Agent/Registrar
Dated: By~
Authorized Signatory
(d) Form of Assianment.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns, and transfers unto
(print or typewrite name, address and Zip Code of transferee)
(Social Security or other identifying number: )
the within Bond and all rights hereunder and hereby irrevocably
constitutes and appoints
attorney to transfer the within Bond on the books kept for
registration hereof, with full power of substitution in the
premises.
Dated:
NOTICEs The signature on this
Assignment must correspond with
the name of the registered
Signature Guaranteed By: owner as it appears on the face
of the within Bond 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
(e) The Initial Capital Appreciation Bond shall be in
the form set forth in paragraphs (a) through (d) of this
Section, except for the following alterations:
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0725B
(i) immediately under the name of the Capital
Appreciation Bond, the headings "INTEREST RATE" and
"MATURITY DATE" shall both be completed with the words
"As shown below";
(ii) in the first paragraph of the Capital
Appreciation Bond, the words "on the Maturity Date
specified above the Maturity Amount of this Bond," shall
be deleted and the following will be inserted~ "on
February 15 in each of the years and in the installments
of Maturity Amounts set forth in the following schedule:
Original
Maturity Principal Interest Maturity
Dates Amounts Rates Amounts"
(Information to be inserted from schedule in
Section 3.02(e) of this Ordinance)
(iii) in the first paragraph of the Capital
Appreciation Bond, 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 MTrust
Corp, National Association, Dallas, Texas."; and
(iv) the Initial Capital Appreciation Bond shall
be numbered TCR-1.
Section 6.04. CUSIP Reaistration.
The City may secure identification numbers through the
CUSIP Service Bureau Division of Standard & Poor's Corporation,
New York, New York, and may authorize the printing of such
numbers on the face of the Bonds. It is expressly provided,
however, that the presence or absence of CUSIP numbers on the
Bonds shall be of no significance or effect as regards the
legality thereof and neither the City nor bond counsel to the
City are to be held responsible for CUSIP numbers incorrectly
printed on the Bonds.
Section 6.05. ~~L~.
The approving legal opinion of Hutchison Boyle Brooks &
Fisher, A Professional Corporation, Bond Counsel, may be
printed on the reverse side of each definitive Bond over the
certification of the City Secretary, which may be executed in
facsimile.
Section 6.06. Table of Accreted Values.
The Accreted Values of the Capital Appreciation Bonds
contained on Schedule I to this Ordinance shall be printed on
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0725B
the reverse side of each Capital Appreciation Bond, or attached
to the Initial Capital Appreciation Bond, as applicable.
Section 6.07. Statement of Insurance.
A statement relating to the Municipal Bond Guaranty
Insurance Policy, which the City is authorized to purchase
pursuant to Section 7.02 of this Ordinance, in such form as is
approved by AMBAC Indemnity, may be printed on or attached to
each Bond.
ARTICLE VII
SALE AND DELIVERY OF BONDS; DEPOSIT OF PROCEEDS
Section 7.01. Sale of Bonds. Official Statement.
(a) The Bonds are hereby officially sold and awarded
to PaineWebber Incorporated and Bank One, Texas Capital Markets
(collectively, the "Purchaser") in accordance with the terms
and provisions of that certain Purchase Contract relating to
the Bonds between the City and the Purchaser and dated the date
of the passage of this Ordinance. The Mayor of the City is
hereby authorized and directed to execute and deliver, and the
City Secretary of the City is hereby authorized and directed to
attest, such Purchase Contract. It is hereby officially found,
determined and declared that the terms of this sale are the
most advantageous reasonably obtainable. The Bonds shall
initially be registered in the name of PaineWebber
Incorporated, or its designee.
(b) The form and substance of the Official Statement,
dated November 6, 1989, 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 by the City Council, and the Mayor and City
Secretary of the City are hereby authorized and directed to
execute the same and deliver appropriate numbers of executed
copies thereof to the Purchaser of the Bonds. The Official
Statement as thus approved, executed and delivered, with such
appropriate variations as shall be approved by the Mayor of the
City and the Purchaser of the Bonds, may be used by the
Purchaser in the public offering and sale thereof. The City
Secretary is hereby authorized and directed to include and
maintain a copy of the Official Statement and any addenda,
supplement or amendment thereto thus approved among the
permanent records of this meeting. The use and distribution of
the Preliminary Official Statement, dated October 25, 1989, and
the preliminary public offering of the Bonds by the Purchaser
is hereby ratified, approved and confirmed.
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O?ZSB
(c) Ail officers of the City are authorized to execute
such documents, certificates and receipts as they may deem
appropriate in order to consummate the delivery of the Bonds in
accordance with the Purchase Contract.
(d) The obligation of the Purchaser to accept delivery
of the Bonds is subject to the Purchaser being furnished with
the final, approving opinion of Hutchison Boyle Brooks &
Fisher, A Professional Corporation, Bond Counsel for the City,
which opinion shall be dated and delivered the Closing Date.
Section 7.02. Municipal Bond Insurance PolicY.
All officers of the City are authorized to do any and all
things and to execute and deliver any and all documents,
certificates or other instruments necessary or required for the
Municipal Bond Guaranty Insurance Policy, which the City is
hereby authorized and directed to purchase from AMBAC Indemnity.
Section 7.03. Control and Delivery of Bonds.
(a) The Mayor or, in his absence, the Mayor Pro Tem,
is hereby authorized to have control of the Initial Bonds 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 Bonds shall be made to the Purchaser
under and subject to the general supervision and direction of
the Mayor or, in his absence, the Mayor Pro Tem, against
receipt by the City of all amounts due to the City under the
terms of the sale.
Section 7.04. DePosit of
(a) All amounts received on the Closing Date as
accrued interest on the Current Interest Bonds from the Bond
Date to the Closing Date plus an amount equal to $3,420.24
received in connection with the sale of the Bonds shall be
deposited to the Interest and Sinking Fund.
(b) The sum of $5,376,600.00, shall be deposited to
the Escrow Fund, which sum shall be applied as provided in the
Escrow Agreement.
(c) The sum of $43,308.06 shall be paid .to AMBAC
Indemnity in payment of the premium for the Municipal Bond
Guaranty Insurance Policy.
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0725B
(d) The sum of $72,750.00 shall be deposited as
directed by the Mayor or Mayor Pro Tem and used to pay the-
costs and expenses pertaining to the issuance of the Bonds. To
the extent any of such sums is not used for such purposes, such
excess shall be deposited to the Interest and Sinking Fund.
(e) To the extent necessary to accomplish fully the
purposes of this Ordinance, the Mayor or Mayor Pro Tem is
authorized to reallocate the funds directed to be used for the
purposes specified above.
ARTICLE VIII
INVESTMENTS; PURCHASE OF SECURITIES,
APPROVAL OF ESCROW AGREEMENT
Section 8.01. Investments.
(a) Money in the Interest and Sinking Fund created by
this Ordinance, at the option of the City, may be invested in
such securities or obligations as permitted under applicable
law. Money in the Escrow Fund shall be invested and applied
solely in accordance with the provisions of the Escrow
Agreement.
(b) Any securities or obligations in which money in
the Interest and Sinking Fund is invested shall be kept and
held in trust for the benefit of the Owners and shall be sold
and the proceeds of sale shall be timely applied to the making
of all payments required to be made from the Interest and
Sinking Fund.
Section 8.02. Investment Income.
Income derived from investment of the Interest and
Sinking Fund shall be credited to such fund.
Section 8.03. Purchase of Securities for Escrow Fund.
The City Manager or Director of Finance of the City is
authorized to execute subscriptions for the purchase of such
United States Treasury Securities - State and Local Government
Series, as may be necessary for the Escrow Fund. In addition
to or in lieu of such securities, the City may use proceeds of
the sale of the Bonds to purchase for investment in the Escrow
Fund such obligations of the United States of America, or any
of its agencies, or such obligations fully guaranteed by the
United States of America, that will be appropriate open market
investments for the Escrow Fund.
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Section 8.04. ADDroval of Escrow Aareement.
The Escrow Agreement in substantially the form presented
at the meeting at which this Ordinance is adopted, and its
execution and delivery by the Mayor of the City, are hereby
authorized and approved. The signature of the Mayor shall be
attested by the City Secretary of the City.
ARTICLE IX
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 9.01. Payment of the Bonds.
On or before each Interest Payment Date for the Current
Interest Bonds and the Maturity Date for the Capital
Appreciation Bonds, there shall be made available to the Paying
Agent/Registrar, out of the Interest and Sinking Fund, money
sufficient to pay the interest on and principal of the Current
Interest Bonds as will accrue or mature on the applicable
Interest Payment Date, and to pay the Maturity Amount of the
Capital Appreciation Bonds on the applicable Maturity Date.
Section 9.02. Other Representations and Covenants.
(a) The City will faithfully perform at all times any
and all covenants, undertakings, stipulations, and provisions
contained in this Ordinance and in each Bond; the City will
promptly pay or cause to be paid the principal of and interest
on each Current Interest Bond and the Maturity Amount of each
Capital Appreciation Bond on the dates and at the places and
manner prescribed in such Bond; and the City will, at the times
and in the manner prescribed by this Ordinance, deposit or
cause to be deposited the amounts of money specified by this
Ordinance.
(b) The City is duly authorized under the laws of the
State of Texas to issue the Bonds; all action on its part for
the creation and issuance of the Bonds has been duly and
effectively taken; and the Bonds in the hands of the Owners
thereof are and will be valid and enforceable obligations of
the City in accordance with their terms.
(c) The City hereby represents that the proceeds of
the Bonds are needed at this time to refund the Refunded Bonds
and to pay the costs of issuing the Bonds; that it is not
reasonably expected that the proceeds of the Bonds or money
deposited in the Interest and Sinking Fund will be used or
invested in a manner that would cause the Bonds to be or become
"arbitrage bonds," within the meaning of Section 148 of the
Code; and that, except for the Interest and Sinking Fund, no
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0725B
other funds or accounts have been established or pledged to the
payment of the Bonds.
(d) The City will not take any action or fail to take
any action with respect to the investment of the proceeds of
the Bonds or any other funds of the City, including amounts
received from the investment of any of the foregoing, that,
based upon the facts, estimates, and circumstances known on the
Closing Date, would result in constituting the Bonds "arbitrage
bonds," within the meaning of such Section 148 of the Code, and
the City will not take any deliberate action motivated by
arbitrage that would have such result.
(e) Proper officers of the City charged with the
responsibility of issuing the Bonds are hereby directed to
make, execute and deliver certifications as to facts, estimates
and circumstances in existence as of the Closing Date and
stating whether there are any facts, estimates or circumstances
that would materially change the City's current expectations.
(f) The City will comply with the provisions of
Section 148(f) of the Code (relating to paying certain excess
earnings of investment of proceeds of the Bonds to the United
States) and the regulations promulgated thereunder.
{g) The Bonds are hereby designated "qualified tax
exempt obligations" for purposes of Section 265(b)(3) of the
Code. The Bonds are not "private activity bonds" as defined in
the Code and neither the City nor any of its subordinate
entities, if any, reasonably expect to issue in excess of
$10,000,000 aggregate amount of qualified tax exempt obliga-
tions during the calendar year in which the Bonds are issued,
and the City hereby covenants not to designate more than
$10,000,000 aggregate amount of qualified tax exempt obliga-
tions during this calendar year in which the Bonds are issued.
(h) The covenants and representations made or required
by this Section are for the benefit of the Owners and may be
relied upon by the Owners and Bond Counsel for the City.
ARTICLE X
DEFAULT AND REMEDIES
Section 10.01. Events of Default.
Each of the following occurrences or events for the
purpose of this Ordinance is hereby declared to be an Event of
Default=
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(i) the failure to make payment of the
principal of or interest on any of the Current Interest
Bonds or the Maturity Amount of the Capital Appreciation
Bonds when the same becomes due and payable; or
(ii) default in the performance or observance of
any other covenant, agreement or obligation of the City,
which default materially and adversely affects the rights
of the Owners, including, but not limited to, their
prospect or ability to be repaid in accordance with this
Ordinance, and the continuation thereof for a period of
60 days after notice of such default is given by any
Owner to the City.
Section 10.02. Remedies for Default.
(a) Upon the happening of any Event of Default, any
Owner or an authorized representative thereof, including, but
not limited to, a trustee or trustees therefor, may proceed
against the City for the purpose of protecting and enforcing
the rights of the Owners under this Ordinance, by mandamus or
other suit, action or special proceeding in equity or at law,
in any court of competent Jurisdiction, for any relief
permitted by law, including the specific performance of any
covenant or agreement contained herein, or thereby to enjoin
any act or thing that may be unlawful or in violation of any
right of the Owners hereunder or any combination of such
remedies.
(b) It is provided that all such proceedings shall be
instituted and maintained for the equal benefit of all Owners
of Bonds then outstanding.
Section 10.03. Remedies Not Exclusive.
(a) No remedy herein conferred or reserved is intended
to be exclusive of any other available remedy or remedies, but
each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or under the
Bonds or now or hereafter existing at law or in equity;
provided, however, that notwithstanding any other provision of
this Ordinance, the right to accelerate the debt evidencedby
the Bonds shall not be available as a remedy under this
Ordinance.
(b) The exercise of any remedy herein conferred or
reserved shall not be deemed a waiver of any other available
remedy.
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ARTICLE XI
DISCHARGE
Section 11.01. Discharge bv Payment.
When all Bonds have been paid in full as to principal and
as to interest (with respect to the Current Interest Bonds) and
as to Maturity Amount (with respect to the Capital Appreciation
Bonds), or when all Bonds have become due and payable, whether
at maturity or otherwise, and the City shall have provided for
the payment of the whole amount due or to become due on all
Bonds then outstanding, including all interest that has accrued
thereon or that may accrue to the date of maturity, and any
premium due or that may become due at maturity, by depositing
with the Paying Agent/Registrar, for payment of the principal
of the outstanding Current Interest Bonds and the interest
accrued thereon, and for payment of the Maturity Amount of the
Capital Appreciation Bonds, the entire amount due or to become
due thereon, 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 City 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. Discharae by Deposit.
(a) The City may discharge its obligation to pay the
principal of and interest on all or any portion of the Current
Interest Bonds, its obligation to pay the redemption price or
the Maturity Amount, as applicable, of all or a portion of the
Capital Appreciation Bonds, and its obligation to pay other
sums payable or to become payable under this Ordinance by the
City, including the compensation due or to become due the
Paying Agent/Registrar, by the following procedures~
(i) depositing or causing 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 and accrued
interest on such Current Interest Bonds to maturity or to
the date fixed for prior redemption of such Bonds, to pay
the redemption price or the Maturity Amount, as
applicable, of such Capital Appreciation Bonds, and to
pay such other amounts as may be reasonably estimated by
the Paying Agent/Registrar to become payable under this
Ordinance with respect to the Bonds being provided for,
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including the compensation due or to become due the
Paying Agent/Registrar; and
(ii) providing 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 any of the
Bonds to become includable in the gross income of the
Owners thereof.
(b) Subject to subsection (c) of this Section and upon
compliance with subsection (a) of this Section, the Bonds for
the payment of which provision is thus 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 as to such Bonds and shall execute and
deliver to the City such releases or other instruments as shall
be requisite to release the lien hereof.
(c) Before the discharge and release of any portion 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 Bonds would be entitled byway of principal
and interest to the date of such maturity (with respect
to the Current Interest Bonds) or redemption price or
Maturity Amount, as applicable (with respect to the
Capital Appreciation Bonds);
(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 payment and/or redemption of
the Bonds;
(iv) the sending of written notice by registered
or certified United States mail to the Owner of each
appropriate Bond then outstanding within 30 days
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0?258
following the date of such deposit that such moneys are
so available for such payment~ and
(v) the payment to the City, ~eriodically or
following final payment of the principal of and interest
on the appropriate Current Interest Bonds and the
redemption price or the Maturity Amount, as applicable,
of the appropriate Capital Appreciation Bonds, of any
moneys, interest earnings, profits or capital gains over
and above the amounts necessary for such purposes.
ARTICLE XII
REDEMPTION OF REFUNDED BONDS
Section 12.01. Redemption of Refunded Bonds. The
Refunded Bonds maturing on and after February 15, 1997,
aggregating $3,625,000 in principal amount, are hereby called
for redemption prior to their maturity on February 15, 1996.
The City Secretary is hereby directed to notify the paying
agent for such Refunded Bonds of such redemption date and of
the maturities and principal amount of the Refunded Bonds to be
redeemed, in accordance with the ordinance authorizing the
issuance of the Refunded Bonds. MTrust Corp, National
Association, Dallas, Texas, as paying agent for the Refunded
Bonds, is hereby authorized and directed to give notice of such
redemption pursuant to the provisions of the ordinance
authorizing the issuance thereof.
ARTICLE XIII
MUNICIPAL BOND GUARANTY INSURANCE
Section 13.01. Municipal Bond Guarant~ Insurance. In
the event and to the extent that the Bonds are insured by AMBAC
Indemnity Corporation, the City hereby makes the covenants and
representations set forth in this Article XIII. In the event
that the Bonds are not insured by AMBAC Indemnity Corporation,
such covenants and representations shall have no force and
effect.
Section 13.02. Consent of AMBAC Indemnity.
(a) Any provision of this Ordinance expressly
recognizing or granting rights in or to AMBAC Indemnity may not
be amended in any manner which affects the rights of AMBAC
Indemnity hereunder without the prior written consent of AMBAC
Indemnity.
(b) AMBAC Indemnity's consent shall be required in
addition to Bondholder consent, when required, for the
execution and delivery of any supplemental ordinance or any
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0725B
amendment, supplement or change to or modification of other
documents relating to the security for the Bonds.
(c) Anything in this Ordinance to the contrary
notwithstanding, upon the occurrence and continuance of an
event of default as defined herein, AMBAC Indemnity shall be
entitled to control and direct the enforcement of all rights
and remedies granted to the Bondholders or the Paying
Agent/Registrar for the benefit of the Bondholders.
Section 13.03. Payment Pursuant to Municipal Bond
Guaranty Insurance Poli¢¥.
(a) As long as the Municipal Bond Guaranty Insurance
Policy shall be in full force and effect, the City and the
Paying Agent/Registrar will comply with the following
provisions:
(i) If payment of principal or interest due on
the Bonds has not been made to the Paying
Agent/Registrar, the Paying Agent/Registrar or any
registered owner to whom such payment is due, shall so
notify AMBAC Indemnity by telephonic or telegraphic
notice, subsequently confirmed in writing, or written
notice by registered or certified mail. Such notice
shall specify the amount of the anticipated deficiency,
the Bonds to which such deficiency is applicable and
whether such Bonds will be deficient as to principal or
interest, or both. AMBAC Indemnity, on the later of the
date due for payment or within one business day after
receipt of notice of nonpayment, will deposit sufficient
moneys with United States Trust Company of New York, as
insurance trustee for AMBAC Indemnity or any successor
insurance trustee (the "Insurance Trustee").
(ii) the Paying Agent/Registrar shall, after
giving notice to AMBAC Indemnity as provided in (i)
above, make available to AMBAC Indemnity and, at AMBAC
Indemnity's direction, to the Insurance Trustee, the
registration books of the City maintained by the Paying
Agent/Registrar, and all records relating to the Funds
and Accounts maintained under this Ordinance.
(iii) The Paying Agent/Registrar shall provide
AMBAC Indemnity and the Insurance Trustee with a list of
registered owners of Bonds entitled to receive principal
or interest payments from AMBAC Indemnity under the terms
of the Municipal Bond Guaranty Insurance Policy, and
shall make arrangements with the Insurance Trustee (A) to
mail checks or drafts to the registered owners of Bonds
entitled to receive full or partial interest payments
from AMBAC Indemnity and (B) to pay principal upon Bonds
-40-
surrendered to the Insurance Trustee by the registered
owners of Bonds entitled to receive full or partial
principal payments from AMBAC Indemnity.
(iv) The Paying Agent/Registrar shall, at the
time it provides notice to AMBAC Indemnity pursuant to
(i) above, notify Owners of Bonds entitled to receive the
payment of principal or interest thereon from AMBAC
Indemnity (A) as to the fact of such entitlement, (B)
that AMBAC Indemnity will remit to them all or a part of
the interest payments next coming due, (C) that should
they be entitled to receive full payment of principal
from AMBAC Indemnity, they must present and surrender
their Bonds together with any appropriate instrument of
assignment for payment to the Insurance Trustee, and not
the Paying Agent/Registrar and (D) that should they be
entitled to receive partial payment of principal from
AMBAC Indemnity, they must present and surrender their
Bonds for payment thereon first to the Paying
Agent/Registrar, who shall note on such Bonds the portion
of the principal paid by the Paying Agent/Registrar, and
then, along with an appropriate instrument of assignment,
to the Insurance Trustee, which will then pay the unpaid
portion of principal. The Insurance Trustee shall
disburse to registered owners of Bonds or the Paying
Agent/Registrar, the payment due less any amount held by
the Paying Agent/Registrar for payment of principal of or
interest on Bonds and legally available therefor.
(v) In the event that the Paying
Agent/Registrar has notice that any payment of principal
of or interest on a Bond which has become due for payment
and which is made to a Bondholder by or on behalf of the
City has been deemed a preferential transfer and
theretofore recovered from its registered owner pursuant
to the United States Bankruptcy Code by a trustee in
bankruptcy in accordance with the final, nonappealable
order of a court having competent Jurisdiction, the
Paying Agent/Registrar shall, at the time AMBAC Indemnity
is notified pursuant to (i) above, notify all Owners that
in the event that any Owner's payment is so recovered,
such Owner will be entitled to payment from AMBAC
Indemnity to the extent of such recovery if sufficient
funds are not otherwise available, and the Paying
Agent/Registrar shall furnish to AMBAC Indemnity its
records evidencing the payments of principal of and
interest on the Bonds which have been made by the Paying
Agent/Registrar and subsequently recovered from Owners
and the dates on which such payments were made.
(vi) In addition to those rights granted AMBAC
Indemnity under this Ordinance, AMBAC Indemnity shall,
upon remittance and transfer of Bonds and coupons or
-41-
07258
appropriate instruments of assignment, become the Owner
thereof, and to evidence such ownership (A) in the case
of claims for past due interest, the Paying
Agent/Registrar shall note AMBAC Indemnity's rights as
owner on the registration books of the City maintained by
the Paying Agent/Registrar upon receipt from A/~BAC
Indemnity of proof of payment of interest thereon to the
registered owners of the Bonds and (B) in the case of
claims for past due principal, the Paying Agent/Registrar
shall note AMBAC Indemnity's rights as owner on the
registration books of the City maintained by the Trustee
or Paying Agent/Registrar upon surrender of the Bonds by
the registered Owners thereof together with proof of the
payment of principal thereof.
(b) In the event that the principal and/or interest
due on the Bonds shall be paid by AMBAC Indemnity pursuant to
the Municipal Bond Guaranty Insurance Policy, the Bonds shall
remain Outstanding for all purposes, not be defeased or
otherwise satisfied and not be considered paid by the City, and
all covenants, agreements and other obligations of the City to
the Owners shall continue to exist and shall run to the benefit
of AMBAC Indemnity, and AMBAC Indemnity shall be subrogated to
the rights of such Owners.
FINALLY PASSED, APPROVED AND EFFECTIVE this 6th day of
November, 1989.
Mayor,
City of The Colony, Texas
~.~i%'~"of'~he Colony, Texas
~AS TO FORM AND LEGALITY~
City Attorney,
City of The Colony, Texas
-42-
0725B
SCHEDULE I
TABLE OF ACCRETED VALUES FOR
CAPITAL APPRECIATION BONDS
YIELD 7.2000% 7.2000% 7.2500% 7.3000% 7.3000%
VALUE OF VALUE OF VALUE OF VALUE OF VALUE OF
02/15/2006 02/15/2007 02/15/2008 02/15/2009 02/15/2010
DATE MATURITY MATURITY MATURITY MATURITY MATURITY
12/12/89 1592.50 1,483.75 1,370.35 1,264.40 1,176.90
02/15/90 1612.34 1,502.24 1,387.54 1,280.37 1,191.78
08/15/90 i 670.39 1,556.32 1,437.84 I 327.11 1,235.28
02/15/91 i 730.52 1,612.34 1,489.96 i 375.55 1,280.37
08/15/91 I 792.82 1,670.39 1,543.97 i 425.75 i 327.11
02/15/92 i 857.36 1,730.52 1,599.94 I 477.79 i 375.55
08/15/92 I 924.23 1,792.82 1,657.94 i 531.73 I 425.75
02/15/93 1,993.50 1,857.36 1,718.04 i 587.64 I 477.79
08/15/93 2,065.27 I 924.23 1,780.32 i 645.59 i 531.73
02/15/94 2,139.62 I 993.50 1,844.86 I 705.65 i 587.64
08/15/94 2,216.64 2 065.27 1,911.73 1,767.91 i 645.59
02/15/95 2,296.44 2 139.62 1,981.03 1,832.44 i 705.65
08/15/95 2,379.11 2 216.64 2,052.85 1,899.32 i 767.91
02/15/96 2,464.76 2 296.44 2,127.26 1,968.65 i 832.44
08/15/96 2,553.49 2 379.11 2,204.38 2,040.50 1 899.32
02/15/97 2,645.42 2,464.76 2,284.28 2,114.98 i 968.65
08/15/97 2,740.65 2,553.49 2,367.09 2,192.18 2 040.50
02/15/98 2,839.32 2,645.42 2,452.90 2,272.19 2 114.98
08/15/98 2,941.53 2,740.65 2,541.81 2,355.13 2 192.18
02/15/99 3,047.43 2,839.:2 2,633.95 2,441.09 2 272.19
08/15/99 3,157.14 2,941.53 2,729.44 2,530.19 2,355.13
02/15/2000 3.270.79 3,047.43 2,828.38 2,622.54 2,441.09
08/15/2000 3.388.54 3,157.14 2,930.91 2,718.27 2,530.19
02/15/2001 3.510.53 3,270.79 3,037.15 2,817.48 2,622.54
08/15/2001 3 636.91 3,388.54 3,147.25 2,920.32 2,718.27
02/15/2002 3.767.84 3,510.53 3,261.34 3,026.91 2,817.48
08/15/2002 3 903.48 3,636.91 3,379.56 3,137.39 2,920.32
02/15/2003 4044.00 3,767.84 3,502.07 3,251.91 3,026.91
08/15/2003 4 189.59 3,903.48 3,629.02 3,370.60 3,137.39
02/15/2004 4 340.41 4,044.00 3,760.57 3,493.63 3,251.91
08/15/2004 4 496.67 4,189.59 3,896.89 3,621.15 3,370.60
02/15/2005 4 658.55 4,340.41 4,038.15 3,753.32 3,493.63
08/15/2005 4 826.25 4,496.67 4,184.54 3,890.32 3,621.15
02/15/2006 5 000.00 4,658.55 4,336.23 4,032.31 3,753.32
08/15/2006 4,826.25 4,493.41 4,179.49 3,890.32
02/15/2007 5,000.00 4,656.30 4,332.04 4,032.31
08/15/2007 4,825.09 4,490.16 4,179.49
02/15/2008 5,000.00 4,654.05 4,332.04
08/15/2008 4,823.93 4,490.16
02/15/2009 5,000.00 4,654.05
08/15/2009 4,823.93
02/15/2010 5,000.00