HomeMy WebLinkAboutO-1990-1727
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ORDINANCE NO. 1727
ORDINANCE AU11IORIZING TIlE ISSUANCE OF $1,500,000 CI1Y OF
LA PORTE, TEXAS, GENERAL OBUGATION BONDS, SERIES 1990;
EXECUTION OF A PAYING AGENTIREGIS'IRAR AGREEMENT; AND ALL
OTHER MATfERS RELATED TIIERE1O, INCLUDING IMMEDIATE
EFFECTIVENESS
WHEREAS, at an election duly called and held in the City of La Porte, Texas (the "City")
on June 15, 1985 (the "Election"), ffiore than a majority of the duly qualified resident electors of
the City who participated in the election voted in favor of, among other things, the issuance of tax
supported bonds for various purposes, including those described below; and
WHEREAS, the City has heretofore issued "City of La Porte, Texas General Obligation
Bonds, Series 1985" in the original aggregate principal amount of $5,000,000 as the first installment
of bonds authorized at the Election for various purposes; and
WHEREAS, the City has heretofore issued "City of La Porte, Texas General Obligation
Bonds, Series 1989" in the original aggregate principal amount of $4,550,000 as the second
installment of bonds authorized at the Election for various purposes; and
WHEREAS, the City Council of the City deems it necessary and desirable to proceed with
the issuance of another installment of bonds authorized at the Election in the aggregate principal
amount of $1,500,000, for the purpose of constructing or purchasing a gymnasium, support facilities,
and related improvements in Little Cedar Bayou Park, leaving certain of said bonds authorized at
the Election to be issued in one or more installments at a later date or dates:
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
LA PORTE, TEXAS, THAT;
Section 1. BONDS AU1HORIZED. The preamble to this Ordinance is hereby made a
part hereof and pursuant to Article 701 et. seq., Vernon's Texas Civil Statutes, as amended, and
other applicable law, the City's bonds are hereby authorized in the principal amount of $1,500,000
to be designated as the "City of La Porte, Texas, General Obligation Bonds, Series 1990" for the
purpose of constructing or purchasing a gymnasium, support facilities, and related improvements
in Little Cedar Bayou Park.
Section 2. DATES, AND MA1URITIES, AND INTEREST RATES. The Bonds shall
be dated September 15, 1990, shall be in the denomination of $5,000 or any integral multiple
thereof, shall be numbered consecutively from R-1 upward, and shall mature on the maturity date,
in each of the years, and in the amounts, respectively, as set forth in the following schedule and
the Bonds shall bear interest at the following rates per annum:
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MATURITY DATE: MARCH 15
INTEREST INTEREST
YEAR AMOUNTS RATES YEAR AMOUNTS RATES
1992 $75,000 8.50% 2002 $75,000 7.00%
1993 75,000 8.50% 2003 75,000 7.00%
1994 75,000 8.50% 2004 75,000 7.00%
1995 75,000 8.50% 2005 75,000 7.00%
1996 75,000 8.50% 2006 75,000 7.25%
1997 75,000 8.50% 2007 75,000 7.25%
1998 75,000 8.50% 2008 75,000 7.25%
1999 75,000 8.50% 2009 75,000 7.25%
2000 75,000 8.00% 2010 75,000 7.25%
2001 75,000 7.00% 2011 75,000 7.25%
Interest shall be payable March 15, 1991, and semiannually thereafter on September 15 and
March 15. Said interest shall be payable to the registered owner of any such Bond in the man-
ner provided in the FORM OF BONDS set forth in this Ordinance.
Section 3. RIGHT OF PRIOR REDEMPTION. The City reserves the right to redeem the
Bonds maturing on or after March 15, 2002, in whole or in part in principal amounts of $5,000
or any integral multiple thereof, on March 15, 2001, or any date thereafter, at the par value
thereof plus accrued interest to the date fixed for redemption. If less than all of the Bonds are
to be redeemed by the City, the City shall determine the maturity or maturities and the amounts
thereof to be redeemed and shall direct the Paying AgentlRegistrar to call Bonds, or portions
thereof, within such maturity or maturities and in such principal amounts, for redemption.
Notice of any such redemption shall be given as described in the FORM OF BOND in
Section 5 hereof. If such notice of redemption is given, and if due provision for such payment is
made, the Bonds, or the portions thereof which are to be so redeemed, thereby automatically
shall be redeemed prior to their scheduled maturities, and shall not bear interest after the date
fIXed for their redemption, and shall not be regarded as being outstanding except for the right of
the registered owner to receive the redemption price plus accrued interest to the date fIXed for
redemption from the Paying Agent/Registrar out of the funds provided for such payment. The
Paying Agent/Registrar shall record in the Registration Books all such redemptions of principal of
the Bonds or any portion thereof. If a portion of any Bond shall be redeemed a substitute Bond
or Bonds having the same maturity date, bearing interest at the same rate, in any denomination
or denominations in any integral multiple of $5,000, at the written request of the registered owner,
and in an aggregate principal amount equal to the unreserved portion thereof, will be issued to the
registered owner upon the surrender thereof for cancellation, at the expense of the City all as
provided in this Ordinance.
Section 4. PAYING AGENT/REGISTRAR. (a) The City shall keep or cause to be kept
at the principal corporate trust office of the Paying Agent/Registrar herein named, or such other
bank, trust company, financial institution, or other entity duly qualified and legally authorized to
serve and perform duties of and services of Paying AgentlRegistrar, named in accordance with
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the provisions of (g) of this Section hereof (the "Paying AgentlRegistrartl), books or records of the
registration and transfer of the Bonds (the "Registration Books"), and the City hereby appoints the
Paying AgentlRegistrar as its registrar and transfer agent to keep such books or records and make
such transfers and registrations under such reasonable regulations as the City and Paying
AgentlRegistrar may prescribe; and the Paying AgentlRegistrar shall make such transfers and
registrations as herein provided. It shall be the duty of the Paying AgentlRegistrar to obtain from
the registered owner and record in the Registration Books the address of such registered owner
of each Bond to which payments with respect to the Bonds shall be mailed, as herein provided.
The City or its designee shall have the right to inspect the Registration Books during regular
business hours of the Paying AgentlRegistrar, but otherwise the Paying AgentlRegistrar shall keep
the Registration Books confidential and, unless otherwise required by law, shall not permit their
inspection by any other entity. Registration of each Bond may be transferred in the Registration
Books only upon presentation and surrender of such bond to the Paying AgentlRegistrar for
transfer of registration and cancellation, together with proper written instruments of assignment,
in form and with guarantee of signatures satisfactory to the Paying AgentlRegistrar, evidencing the
assignment of the bond, or any portion thereof in any integral multiple of $5,000, to the assignee
or assignees thereof, and the right of such assignee or assignees to have the bond or any such
portion thereof registered in the name of such assignee or assignees. Upon the assignment and
transfer of any Bond or any portion thereof, a new substitute bond or bonds shall be issued in
exchange therefor in the manner herein provided.
(b) The entity in whose name any Bond shall be registered in the Registration Books at
any time shall be treated as the absolute owner thereof for all purposes of this Ordinance, whether
or not such bond shall be overdue, and the City and the Paying AgentlRegistrar shall not be affect-
ed by any notice to the contrary unless otherwise required by law; and payment of, or on account
of, the principal of, premium, if any, and interest on any such bond shall be made only to such
registered owner. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such bond to the extent of the sum or sums so paid.
(c) The City hereby further appoints the Paying AgentlRegistrar to act as the paying agent
for paying the principal of and interest on the Bonds, and to act as its agent to exchange or
replace Bonds, all as provided in this Ordinance. The Paying AgentlRegistrar shall keep proper
records of all payments made by the City and the Paying AgentlRegistrar with respect to the
Bonds, and of all exchanges of such bonds, and all replacements of such bonds, as provided in this
Ordinance.
(d) Each Bond may be exchanged for fully registered bonds in the manner set forth herein.
Each bond issued and delivered pursuant to this Ordinance, to the extent of the unpaid or
unredeemed principal balance or principal amount thereof, may, upon surrender of such bond at
the principal corporate trust office of the Paying AgentlRegistrar, together with a written request
therefor duly executed by the registered owner or the assignee or assignees thereof, or its or their
duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the Pay-
ing AgentlRegistrar, at the option of the registered owner or such assignee or assignees, as
appropriate, be exchanged for fully registered bonds, without interest coupons, in the form
prescribed in the FORM OF BONDS set forth in this Ordinance, in the denomination of $5,000,
or any integral multiple of $5,000 (subject to the requirement hereinafter stated that each
substitute Bond shall have a single stated maturity date), as requested in writing by such registered
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owner or such assignee or assignees, in an aggregate principal amount equal to the unpaid or
unredeemed principal amount of any bond or bonds so surrendered, and payable to the appro-
priate registered owner, assignee, or assignees, as the case may be. If a portion of any Bond shall
be redeemed prior to its scheduled maturity as provided herein, a substitute bond or bonds having
the same maturity date, bearing interest at the same rate, in the denomination or denominations
of any integral multiple of $5,000 at the request of the registered owner, and in an aggregate
principal amount equal to the unredeemed portion thereof, will be issued to the registered owner
upon surrender thereof for cancellation. If any Bond or portion thereof is assigned and trans-
ferred, each bond issued in exchange therefor shall have the same principal maturity date and bear
interest at the same rate as the bond for which it is being exchanged. Each substitute bond shall
bear a letter and/or number to distinguish it from each other bond. The Paying AgentlRegistrar
shall exchange or replace Bonds as provided herein, and each fully registered bond delivered in
exchange for or replacement of any bond or portion thereof as permitted or required by any
provision of this Ordinance shall constitute one of the Bonds for all purposes of this Ordinance,
and may again be exchanged or replaced. It is specifically provided, however, that any bond
delivered in exchange for or replacement of another bond prior to the first scheduled interest pay-
ment date on the Bonds (as stated on the face thereof) shall be dated the same date as such bond,
but each substitute bond so delivered on or after such first scheduled interest payment date shall
be dated as of the interest payment date preceding the date on which such substitute bond is
delivered, unless such bond is delivered on an interest payment date, in which case it shall be
dated as of such date of delivery; provided, however, that if at the time of delivery of any
substitute bond the interest on the bond for which it is being exchanged has not been paid, then
such bond shall be dated as of the date to which such interest has been paid in full. On each
substitute bond issued in exchange for or replacement of any bond or bonds issued under this
Ordinance there shall be printed thereon a Paying AgentlRegistrar's Authentication Certificate, in
the form hereinafter set forth. An authorized representative of the Paying AgentlRegistrar shall,
before the delivery of any such bond, date such by dating the Authentication Certificate in the
manner set forth above, and manually sign such Certificate, and no such bond shall be deemed to
be issued or outstanding unless such Certificate is so executed. The Paying AgentlRegistrar
promptly shall cancel all Bonds surrendered for exchange or replacement. No additional
ordinances, orders, or resolutions need be passed or adopted by the City Council or any other body
or person so as to accomplish the foregoing exchange or replacement of any Bond or portion
thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of
the substitute bonds in the manner prescribed herein, and said bonds shall be of type composition
printed on paper with lithographed or steel engraved borders of customary weight and strength
pursuant to Article 717k-6, V.A T.C.S, and particularly Section 6 thereof, the duty of such
exchange or replacement of bonds as aforesaid is hereby imposed upon the Paying AgentlRegis-
trar, and upon the execution of the aforementioned Paying AgentlRegistrar's Authentication
Certificate, the exchanged or replaced Bond shall be valid, incontestable, and enforceable in the
same manner and with the same effect as the Bonds which originally were delivered pursuant to
this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public
Accounts. Neither the City nor the Paying AgentlRegistrar shall be required (1) to issue, transfer,
or exchange any Bond subject to redemption during a period beginning at the opening of business
15 days before the day of the first mailing of a notice of redemption of Bonds and ending at the
close of business on the day of such mailing or (2) to transfer or exchange any Bond after it is
selected for redemption, in whole or in part when such redemption is scheduled to occur within
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30 calendar days; provided, however, that such limitation shall not be applicable to an exchange
by the owner of the uncalled principal balance of a Bond.
(e) All Bonds issued in exchange or replacement of any other Bond or portion thereof,
(i) shall be issued in fully registered form, without interest coupons, with the principal of and
interest on such bonds to be payable only to the registered owners thereof, (ii) may be redeemed
prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may be exchanged
for other Bonds, (v) shall have the characteristics, (vi) shall be signed and sealed, and (vii) the
principal of and interest on the Bonds shall be payable, all as provided, and in the manner required
or indicated, in the FORM OF BONDS set forth in this Ordinance.
(f) The City shall pay all of the Paying Agent/Registrar's reasonable and customary fees
and charges for making transfers, conversions, and exchanges of the Bonds in accordance with an
agreement between the City and the Paying AgentlRegistrar, but the registered owner of any
Bond requesting such transfer shall pay any taxes or other governmental charges required to be
paid with respect thereto. In addition, the City hereby covenants with the registered owners of the
Bonds that it will pay the reasonable and standard or customary fees and charges of the Paying
AgentlRegistrar for its services with respect to the payment of the principal of and interest on the
Bonds, when due.
(g) The City covenants with the registered owners of the Bonds that at all times while the
Bonds are outstanding the City will provide a competent and legally qualified national or state
banking institution, which shall be a corporation organized and doing business under the laws of
the United States of America or of any state, authorized under such laws to exercise trust powers,
and subject to supervision or examination by federal or state authorities, or other entity duly
qualified and legally authorized to serve as and perform the duties and services of Paying
AgentlRegistrar, to act as and perform the services of Paying AgentlRegistrar for the Bonds under
this Ordinance, and that the Paying AgentlRegistrar will be one entity. The City reserves the right
to, and may, at its option, change the Paying Agent/Registrar upon not less than 60 days written
notice to the Paying AgentlRegistrar. In the event that the entity at any time acting as Paying
AgentlRegistrar (or its successor by merger, acquisition, or other method) should resign or
otherwise cease to act as such, the City covenants that promptly it will appoint a competent and
legally qualified entity whose qualifications substantially are similar to the previous Paying
AgentlRegistrar to act as Paying AgentlRegistrar under this Ordinance. Upon any change in the
Paying AgentlRegistrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the
Registration Books (or a copy thereof), along with all other pertinent books and records relating
to the Bonds, to the new Paying AgentlRegistrar designated and appointed by the City. Upon any
change in the Paying Agent/Registrar, the City promptly will cause a written notice thereof to be
sent by the new Paying Agent/Registrar to each registered owner of the Bonds, by United States
Mail, postage prepaid, which notice also shall give the address of the new Paying AgentlRegis-
trar. By accepting the position and performing as such, each Paying AgentlRegistrar shall be
deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance
shall be delivered to each Paying AgentlRegistrar.
Section 6. FORMS. The form of the Bonds, including the form of Paying
Agent/Registrar's Certificate, the form of Assignment, and the form of the Comptroller's Regis-
tration Certificate to accompany the Bonds on the initial delivery thereof, shall be, respectively,
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substantially as follows, with such appropriate variations, omissions, or insertions as are permitted
or required by this Ordinance:
FORM OF BONDS:
$
NO.
United States of America
State of Texas
CITY OF LA PORTE, TEXAS,
GENERAL OBLIGATION BOND, SERIES 1990
MATURITY DATE
INTEREST RATE
%
ORIGINAL ISSUE DATE CUSIP
September 15, 1990
ON THE MATURITY DATE, SPECIFIED ABOVE, TIlE CI1Y OF LA PORTE,
TEXAS (the "City"), hereby promises to pay to , or the registered assignee
hereof (either being hereinafter called the "registered owner") the principal amount of
and to pay interest thereon, from the original issue date of this Bond, specified above, to the date
of its scheduled maturity or the date of its redemption prior to scheduled maturity, at the rate of
interest per annum, specified above, with said interest being payable on March 15, 1991, and
semiannually on each September 15 and March 15 thereafter.
TIlE TERMS AND PROVISIONS of this Bond are continued on the reverse side hereof
and shall for all purposes have the same effect as though fully set forth at this place.
TIlE PRlNCIP AL OF AND INTERFSf ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the registered owner hereof upon presentation and surrender of this Bond at maturity
or upon the date fIXed for its redemption prior to maturity, at the principal corporate trust office
of FIRST CI1Y, TEXAS - HOUSTON, NA, HOUSTON, TEXAS, which is the "Paying
AgentIRegistrar" for this Bond. The payment of interest on this Bond shall be made by the Paying
AgentlRegistrar to the registered owner hereof as shown by the Registration Books kept by the
Paying AgentlRegistrar at the close of business on the Record Date by check drawn by the Paying
AgentlRegistrar on, and payable solely from, funds of the City required to be on deposit with the
Paying AgentlRegistrar for such purpose as hereinafter provided; and such check shall be sent by
the Paying Agent/Registrar by United States mail, postage prepaid, on each such interest payment
date, to the registered owner hereof at its address as it appears on the Registration Books kept
by the Paying Agent/Registrar, as hereinafter described. The record date ("Record Date") for the
interest payable on any interest payment date means the last business day of the month next
preceding a scheduled interest payment. In the event of a non-payment of interest on a scheduled
payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special
Record Date") will be established by the Paying Agent/Registrar, if and when funds for the
payment of such interest have been received from the City. Notice of the Special Record Date
and of the scheduled payment date of the past due interest (the "Special Payment Date", which
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shall be 15 calendar days after the Special Record Date) shall be sent at least five business days
prior to the Special Record Date by United States mail, first class, postage prepaid, to the address
of each registered owner of a Bond appearing on the books of the Paying AgentlRegistrar at the
close of business on the last business day next preceding the date of mailing of such notice. The
City covenants with the registered owner of this Bond that no later than each principal payment
date and interest payment date for this Bond it will make available to the Paying AgentlRegistrar
the amounts required to provide for the payment, in immediately available funds, of all principal
of and interest on the Bonds, when due, in the manner set forth in the ordinance authorizing the
issuance of the bonds adopted by the City Council of the City on September 27, 1990 (the
"Ordinance").
*IF TIlE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, a Sunday, a legal holiday, or a day on which banking institutions in the city where the
Paying AgentlRegistrar is located are authorized by law or executive order to close, then the date
for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal
holiday, or day on which banking institutions are authurized to close; and payment on such date
shall have the same force and effect as if made on the original date payment was due.
*TIllS BOND is one of a Series of bonds of like tenor and effect except as to
denomination, number, maturity, interest rate and right of prior redemption, issued in the aggregate
principal amount of $1,500,000 for the purpose of constructing or purchasing a gymnasium, support
facilities, and related improvements in Little Cedar Bayou Park.
*TIIE BONDS of this series scheduled to mature on and after March IS, 2002 may be
redeemed prior to their scheduled maturities, in whole, or in part in principal amounts of $5,000
or any integral multiple thereof, at the option of the City, on March 15, 2001, or on any interest
payment date thereafter, for the principal amount thereof plus accrued interest to the date fIXed
for redemption.
· AT LEAST 30 days prior to the date fIXed for any such redemption, a notice of such
redemption shall be published one time in a financial journal or publication of general circulation
in the United States of America carrying as a regular feature notices of municipal bonds called for
redemption. Such notice also shall be sent by the Paying AgentlRegistrar by United States mail,
first-class postage prepaid, at least 30 days prior to the date fixed for any such redemption, to the
registered owner of each Bond or portion thereof to be redeemed at its address as it appeared on
the Registration Books on the 45th day prior to such redemption date and to major securities
depositories, national bond rating agencies, and bond information services; provided, however, that
the failure to send, mail or receive such notice, or any defect therein or in the sending or mailing
thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any
Bond, and the publication of notice as described above shall be the only notice actually required
in connection with or as a prerequisite to the redemption of any Bonds. By the date fIXed for any
such redemption due provision shall be made by the City with the Paying AgentlRegistrar for the
payment of the required redemption price for this Bond or the portion hereof which is to be so
redeemed, plus accrued interest thereon to the date fIXed for redemption. H such notice of
redemption is given, and if due provision for such payment is made, all as provided above, this
Bond, or the portion thereof which is to be so redeemed, thereby automatically shall be redeemed
prior to its scheduled maturity, and shall not bear interest after the date fIXed for its redemption,
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and shall not be regarded as being outstanding except for the right of the registered owner to
receive the redemption price plus accrued interest to the date fIXed for redemption from the Paying
AgentlRegistrar out of the funds provided for such payment. The Paying AgentlRegistrar shall
record in the Registration Books all such redemptions of principal of this Bond or any portion
hereof. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same
maturity date, bearing interest at the same rate, in any denomination or denominations in any
integral multiple of $5,000, at the written request of the registered owner, and in aggregate
principal amount equal to the unredeemed portion thereof, will be issued to the registered owner
upon the surrender thereof for cancellation, at the expense of the City, all as provided in the
Ordinance.
* AlL BONDS OF TIllS SERIFS are issuable solely as fully registered bonds, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the
Ordinance, this Bond, or any unredeemed portion hereof, may, at the request of the registered
owner or the assignee or assignees hereof, be assigned, transferred, and exchanged for a like
aggregate principal amount of fully registered bonds, without interest coupons, payable to the
appropriate registered owner, assignee, or assignees, as the case may be, having the same maturity
date, and bearing interest at the same rate, in any denomination or denominations in any integral
multiple of $5,000 as requested in writing by the appropriate registered owner, assignee, or
assignees, as the case may be, upon surrender of this Bond to the Paying AgentlRegistrar for
cancellation, all in accordance with the form and procedures set forth in the Ordinance. Among
other requirements for such assignment and transfer, this Bond must be presented and surrendered
to the Paying AgentlRegistrar, together with proper instruments of assignment, in form and with
guarantee of signatures satisfactory to the Paying AgentlRegistrar, evidencing assignment of this
Bond or any portion or portions hereof in any integral multiple of $5,000 to the assignee or
assignees in whose name or names this Bond or any such portion or portions hereof is or are to
be transferred and registered. The form of Assignment printed or endorsed on this Bond may be
executed by the registered owner to evidence the assignment hereof, but such method is not
exclusive, and other instruments of assignment satisfactory to the Paying AgentlRegistrar may be
used to evidence the assignment of this Bond or any portion or portions hereof from time to time
by the registered owner. The City shall pay the Paying AgentlRegistrar's reasonable standard or
customary fees and charges for transferring, converting and exchanging any Bond or portion
thereof; provided, however, that any taxes or governmental charges required to be paid with respect
thereto shall be paid by the one requesting such transfer, conversion and exchange. In any
circumstance, neither the City nor the Paying AgentlRegistrar shall be required (1) to make any
transfer or exchange during a period beginning at the opening of business 15 days before the day
of the first mailing of a notice of redemption of bonds and ending at the close of business on the
day of such mailing or (2) to transfer or exchange any Bonds so selected for redemption when such
redemption is scheduled to occur within 30 calendar days; provided, however, such limitation shall
not be applicable to an exchange by the registered owner of the uncalled principal balance of a
Bond.
*IN TIlE EVENT any Paying AgentlRegistrar for the Bonds is changed by the City, resigns,
or otherwise ceases to act as such, the City has covenanted in the Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor, and promptly will cause written notice
thereof to be mailed to the registered owners of the Bonds.
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*BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Ordinance, agrees to be bound by such terms
and provisions, acknowledges that the Ordinance is duly recorded and available for inspection in
the official minutes and records of the City, and agrees that the terms and provisions of this Bond
and the Ordinance constitute a contract between each registered owner hereof and the City.
*TIIE BONDS ARE PAYABLE FROM the proceeds of an ad valorem tax levied upon
all taxable property within the City within the limitations prescribed by law. Reference is hereby
made to the Ordinance for a description of the covenants by which the Bonds are secured, the
respective rights thereunder of the registered owners of the Bonds and the City, and the terms
upon which the Bonds are, and are to be, authenticated and delivered.
IT IS HEREBY certified and covenanted that this Bond has been duly and validly
authorized, issued, and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Bond have been performed, existed, and been done in accordance with law; and that the issuance
of this Bond does not exceed any constitutional or statutory limitation.
IN TESTIMONY WHEREOF, the City Council has caused the seal of the City to be duly
impressed or placed in facsimile hereon, and this Bond to be signed with the imprinted facsimile
signature of the Mayor and countersigned by the facsimile signature of the City Secretary.
COUNTERSIGNED:
City Secretary, City of La Porte
Mayor, City of La Porte
(CITY SEAL)
FORM OF PAYING AGENTIREGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENTIREGISTRAR'S AUTIIENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Ordinance
described on the face of this Bond; and that this Bond has been issued in exchange for or
replacement of a bond, bonds, or a portion of a bond or bonds of an issue which originally was
approved by the Attorney General of the State of Texas and registered by the Comptroller of
Public Accounts of the State of Texas.
Dated
FIRST CITY, TEXAS - HOUSTON, N.A,
HOUSTON, TEXAS
Paying Agent/Registrar
By
Authorized Representative
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FORM OF STATEMENT OF INSURANCE
STATEMENT OF INSURANCE
Municipal Bond Guaranty Insurance Policy No. (the "Policy") with respect to
payments due for principal of and interest on this Bond has been issued by AMBAC Indemnity
Corporation ("AMBAC Indemnity"). The Policy has been delivered to the United States Trust
Company of New York, New York, New York, as the Insurance Trustee or any successor trustee.
The Policy is on file and available for inspection at the principal office of the Insurance Trustee
and a copy thereof may be secured from AMBAC Indemnity or the Insurance Trustee. All
payments required to be made under the Policy shall be made in accordance with the provisions
thereof. The owner of this Bond acknowledges and consents to the subrogation rights of AMBAC
Indemnity as more fully set forth in the Policy.
FORM OF ASSIGNMENT:
* ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
Please insert Social Security or Taxpayer
Identification Number of Transferee
/
/
(Please print or typewrite name and address, including zip code of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to register the transfer of the within Bond on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
NOTICE: The signature above must correspond
with the name of the Registered Owner as it
appears upon the front of this Bond in every
particular, without alteration or enlargement
or any change whatsoever.
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The following abbreviations, when used in the Assignment above or on the face of the
within Bond, shall be construed as though they were written out in full according to applicable
laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT -
Custodian
(Cust) (Minor)
under Uniform Gifts to Minors Act
(State)
Additional abbreviations may also be used though not in the list above.
"(FORM OF COMPTROLLER'S CERTIFICATE PRINTED ON OR ATTACHED TO
TIlE BONDS UPON INITIAL DELIVERY TIlEREOF)
OFFICE OF COMPTROLLER
REGISTER NO.
STATE OF TEXAS
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
(SEAL)
XXXXXXX
Comptroller of Public Accounts of
the State of Texas
NOlE TO PRINlER:
*~s to be on reverse side of bond
Section 6. DEFINITIONS. As used in this Ordinance in addition to other terms and
words defmed herein, the following terms shall have the meanings set forth below, unless the text
hereof specifically indicates otherwise:
(a) The term "AMBAC Indemnity" shall mean AMBAC Indemnity Corporation, a
Wisconsin domiciled stock insurance company.
(b) The terms "Bond" or "Bonds" shall mean one or more, as the case may be, of the
Bonds authorized to be issued by this Ordinance.
(c) The terms "City" and "Issuer" shall mean the City of La Porte, Texas, or where
appropriate the City Council thereof.
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(d) The term "City Council" shall mean the governing body of the City.
( e) The term "Interest and Sinking Fund" means the fund provided for in Section 8 hereof.
(f) The term "Municipal Bond Guaranty Insurance Policy" means the municipal bond
guaranty insurance policy issued by AMBAC Indemnity insuring the payment when due of the
principal and interest on the Bonds as provided therein.
(g) The term "Permitted Investments" means one or more of the following:
(1) direct obligations of (including obligations issued or held in book entry form
on the books of) the Department of Treasury of the United States of America;
(2) obligations of any of the following federal agencies which obligations represent
full faith and credit of the United States of America, including:
Export - Import Bank
Farmers Home Administration
U.S. Maritime Administration
Small Business Administration
Government National Mortgage Association (GNMA)
u.s. Department of Housing and Urban Development (PHA's)
Federal Housing Administration;
(3) bonds, notes or other evidences of indebtedness rated "AAA" by Standard &
Poor's Corporation and "Aaa" by Moody's Investor Services issued by the Federal National
Mortgage Association or the Federal Home Loan Mortgage Corporation with remaining
maturities not exceeding three years; or
(4) other forms of investments permitted by law and approved in writing by
AMBAC Indemnity.
(h) The term "Year" or "fIScal year" shall mean the regular fiscal year used by the City
which may be any 12 consecutive months period established by the City.
Section 7. PLEDGE AND LEVY OF TAXES. While the Bonds and any part of the
principal thereof or the interest thereon remain outstanding and unpaid, there is hereby levied and
there shall be annually assessed and collected in due time, form, and manner and at the same time
other City taxes are assessed, levied, and collected, in each year beginning with the current year,
a continuing direct annual ad valorem tax upon all taxable property in the City sufficient to pay
the current interest thereon and to create a sinking fund of not less than two percent of the
principal amount of the Bonds then outstanding or of not less than the amount required to pay
the principal payable out of said tax, whichever is greater, fun allowance being made for
delinquencies and costs of collection, and said taxes, when collected shall be applied to the
principal of and interest on the Bonds and for no other purpose.
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Section 8. INTEREST AND SINKING FUND. For the purpose of paying the principal
of and interest on the Bonds, as the same come due, there is hereby created and established on
the books of the City a separate fund entitled the "City of La Porte, Texas, General Obligation
Bonds, Series 1990 Interest and Sinking Fund" (the "Interest and Sinking Fund"), and all taxes
levied and collected pursuant to Section 7 hereof shall be deposited as collected into the Interest
and Sinking Fund.
Section 9. INVESTMENTS AND SECURITY FOR FUNDS. The City Council may place
money in any fund created by this Ordinance in Permitted Investments; provided, however, that
the City hereby covenants that the proceeds of the sale of the Bonds will be used as soon as
practicable for the purposes for which the Bonds are issued. Obligations purchased as an
investment of money in a fund shall be deemed to be a part of such fund. . Except as otherwise
provided by law and Section 16 hereof, amounts received from the investment of any money in any
fund created by this Ordinance may be placed into any fund of the City as determined by the City
Council. All funds created by this Ordinance shall be secured in the manner and to the fullest
extent required by law for the security of funds of the City.
Section 10. DESIGNATION AS QUALIFIED TAX-EXEMYf BONDS. The City hereby
designates the Bonds as "qualified tax-exempt bonds" as defined in section 265(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code"). In furtherance of such designation, the City
represents, covenants, and warrants the following: (a) during the calendar year in which the Bonds
are issued, the City (including any subordinate entities) has not designated nor will designate bonds,
which when aggregated with the Bonds, will result in more than $10,000,000 of "qualified tax-
exempt bonds" being issued; (b) the City reasonably anticipates that the amount of tax-exempt
obligations issued during the calendar year in which the Bonds are issued by the City (or any
subordinate entities) will not exceed $10,000,000; and (c) the City will take such action or refrain
from such action as necessary in order that the Bonds will not be considered "private activity bonds"
within the meaning of section 141 of the Code.
Section 11. AMENDMENT OF ORDINANCE. (a) The holders of the Bonds
aggregating in principal amount 51 % of the aggregate principal amount of then outstanding Bonds
shall have the right from time to time to approve any amendment to this Ordinance which may be
. deemed necessary or desirable by the City; provided, however, that without the consent of the
holders of all of the Bonds at the time outstanding, nothing herein contained shall permit or be
construed to permit the amendment of the terms and conditions in this Ordinance or in the Bonds
so as to:
(1) Make any change in the maturity of the outstanding Bonds;
(2) Reduce the rate of interest borne by any of the outstanding Bonds;
(3) Reduce the amount of the principal payable on the outstanding Bonds;
(4) Modify the terms of payment of principal of or interest on the outstanding Bonds
or impose any conditions with respect to such payment;
(5) Affect the rights of the holders of less than all of the Bonds then outstanding;
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(6) Change the minimum percentage of the principal amount of Bonds necessary for
consent to such amendment.
(b) If at any time the City shall desire to amend the Ordinance under this Section, the City
shall cause notice of the proposed amendment to be mailed to AMBAC Indemnity not less than
14 days before any action may be taken and published in a financial newspaper or journal published
in The City of New York, New York, once during each calendar week for at least two successive
calendar weeks. Such notice shall briefly set forth the nature of the proposed amendment and shall
state that a copy thereof is on file at the principal office of the Paying AgentlRegistrar for
inspection by all holders of Bonds. Such publication is not required, however, if notice in writing
is given to each holder of the Bonds.
(c) Whenever at any time not less than 30 days, and within one year, from the date of the
first publication of said notice or other service of written notice the City shall receive an instrument
or instruments executed by the holders of at least 51 % in aggregate principal amount of all Bonds
then outstanding, which instrument or instruments shall refer to the proposed amendment described
in said notice and which specifically consent to and approve such amendment in substantially the
form of the copy thereof on file with the Paying AgentlRegistrar, the City Council may pass the
amendatory ordinance in substantially the same form.
(d) Upon the passage of any amendatory ordinance pursuant to the provisions of this
Section, this Ordinance shall be deemed to be amended in accordance with such amendatory
ordinance, and the respective rights, duties and obligations under this Ordinance of the City and
all the holders of then outstanding Bonds shall thereafter be determined, exercised and enforced
hereunder, subject in all respects to such amendments.
(e) Any consent given by the holder of a Bond pursuant to the provisions of this Section
shall be irrevocable for a period of six months from the date of the first publication of the notice
or other service of written notice provided for in this Section, and shall be conclusive and binding
upon all future holders of the same Bond during such period. Such consent may be revoked at
any time after six months from the date of the first publication of such notice or other service of
written notice by the holder who gave such consent, or by a successor in title, by filing notice
thereof with the Paying AgentlRegistrar and the City, but such revocation shall not be effective
if the holders of 51% in aggregate principal amount of the then outstanding Bonds as in this
Section defined have, prior to the attempted revocation, consented to and approved the
amendment. AMBAC Indemnity's consent shall be required in addition to consent of the owners
of Bonds, when required, for the execution and delivery of any supplemental ordinance.
(f) For the purpose of this Section the fact of the holding of Bonds issued in registered
form without coupons and the amounts and numbers of such Bonds and the date of their holding
same shaQ be proved by the Registration Books of the Paying AgentlRegistrar. For purposes of
this Section, the holder of Parity Bond shall be the owner thereof as shown on such Registration
Books. The City may conclusively assume that such ownership continues until written notice to
the contrary is served upon the City.
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(g) The foregoing provisions of this Section notwithstanding, the City by action of the City
Council may amend this Ordinance without consent of the holders of any of the Bonds or of
AMBAC Indemnity (except as required by SEction 11 (b) of this Ordinance) for anyone or more
of the following purposes:
(1) To add to the covenants and agreements of the City in this Ordinance
contained, other covenants and agreements thereafter to be observed, grant additional rights
or remedies to bondholders, or to surrender, restrict, or limit any right or power herein
reserved to or conferred upon the City; or
(2) To make such provisions for the purpose of curing any ambiguity, or curing,
correcting, or supplementing any defective provision contained in this Ordinance, or in
regard to clarifying matters or questions arising under this Ordinance, as are necessary or
desirable and not contrary to or inconsistent with this Ordinance and which shall not
adversely affect the interests of the holders of the Bonds.
(h) 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.
Section 12. DAMAGED, MUITl.ATED, LOST, STOLEN OR DESTROYED BONDS.
(a) In the event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the Paying
AgentlRegistrar shall cause to be printed, executed, and delivered, a new bond of the same
principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed
Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Application for replacement of damaged, mutilated, lost, stolen, or destroyed Bonds
shall be made to the Paying AgentlRegistrar. In every case of loss, theft, or destruction of a Bond,
the applicant for a replacement bond shall furnish to the City and to the Paying AgentlRegistrar
such security or indemnity as may be required by them to save each of them harmless from any
loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Bond,
the applicant shall furnish to the City and to the Paying AgentlRegistrar evidence to their
satisfaction of the loss, theft, or destruction of such Bond, as the case may be. In every case of
damage or mutilation of a Bond, the applicant shall surrender to the Paying AgentlRegistrar for
cancellation the Bond so damaged or mutilated.
(c) Notwithstanding the foregoing provisions of this Section, in the event any such Bond
shall have matured, and no default has occurred which is then continuing in the payment of the
principal of, redemption premium, if any, or interest on the Bond, the City may authorize the
payment of the same (without surrender thereof expect in the case of a damaged or mutilated
Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished as above
provided in this Section.
(d) Prior to the issuance of any replacement bond, the Paying AgentlRegistrar shall charge
the owner of such Bond with all legal, printing, and other expenses in connection therewith.
Every replacement bond issued pursuant to the provisions of this Section by virtue of the fact thatuany Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the City whether
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or not the lost, stolen or destroyed Bond shall be found at any time, or be enforceable by anyone,
and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and
all other Bonds duly issued under this Ordinance.
(e) In accordance with Section 6 of Article 717k-6, V.A T.C.s., this Section of this
Ordinance shall constitute authority for the issuance of any such replacement bond without
necessity of further action by the governing body of the City or any other body or person, and the
duty of the replacement of such bonds is hereby authorized and imposed upon the Paying
AgentlRegistrar, and the Paying AgentlRegistrar shall authenticate and deliver such bonds in the
form and manner and with the effect, as provided in Section 5( d) of this Ordinance for Bonds
issued in exchange for other Bonds.
Section 13. DEFEASANCE OF TIm BONDS. (a) Any Bond and the interest thereon
shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Bonds") within the
meaning of this Ordinance, except to the extent provided in subsection (d) of this Section 13, when
payment of the principal of such Bond, plus interest thereon to the due date (whether such due
date be by reason of maturity, upon redemption, or otherwise) either (i) shall have been made or
caused to be made in accordance with the terms thereof (including the giving of any required
notice of redemption), or (ii) shall have been provided for on or before such due date by
irrevocably depositing with or making available to the Paying AgentlRegistrar for such payment (1)
lawful money of the United States of America sufficient to make such payment or (2) direct
obligations of the United States of America, including obligations the principal of and interest on
which are unconditionally guaranteed by the United States of America, which may be United States
Treasury obligations such as its State and Local Government Series, and which may be book entry
form (herein "Government Obligations") which mature as to principal and interest in such amounts
and at such time as will insure the availability, without reinvestment, of sufficient money to provide
for such payment, and when proper arrangements have been made by the City with the Paying
AgentlRegistrar for the payment of its services until all Defeased Bonds shall have become due and
payable. At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid,
such Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the
benefits of, the revenue herein levied and pledged as provided in this Ordinance, and such principal
and interest shall be payable solely from such money or Government Obligations.
(b) Any money so deposited with the Paying AgentlRegistrar may at the written direction
of the City also be invested as hereinbefore set forth, and all income from such Government
Obligations receiveu by the Paying AgentlRegistrar which is not required for the payment of the
Bonds and interest thereon, with respect to which such money has been so deposited, shall be
turned over to the City, or deposited as directed in writing by the City.
(c) Until all Defeased Bonds shall have become due and payable, the Paying
AgentlRegistrar shall perform the services of Paying AgentlRegistrar for such Defeased Bonds the
same as if they had not been defeased, and the City shall make proper arrangements to provide
and pay for such services as required by this Ordinance.
Section 14. TAX COVENANTS. The City covenants to take any action to assure, or
refrain from any action which would adversely affect, the treatment of the Bonds as obligations
described in section 103 of the Code, the interest on which is not includable in the "gross income"
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of the holder for purposes of federal income taxation. In furtherance thereof, the City covenants
as follows:
(a) to take any action to assure that no more than 10% of the proceeds of the
Bonds (less amounts deposited to a reserve fund, if any) are used for any "private business
use", as defined in section 141(b)(6) of the Code or, if more than 10% of the proceeds are
so used, that amounts, whether or not received by the City, with respect to such private
business use, do not, under the terms of this Ordinance or any underlying arrangement,
directly or indirectly, secure or provide for the payment of more than 10% of the debt
service on the Bonds, in contravention of section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use"
described in subsection (a) hereof exceeds 5% of the proceeds of the Bonds (less amounts
deposited into a reserve fund, if any) then the amount in excess of 5% is used for a
"private business use" which is "related" and not "disproportionate", within the meaning of
section 141(b)(3) of the Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser
of $5,000,000, or 5% of the proceeds of the Bonds (less amounts deposited into a reserve
fund, if any) is directly or indirectly used to finance loans to persons, other than state or
local governmental units, in contravention of section 141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(a) of the Code;
(e) to refrain from taking any action that would r~ult in the Bonds being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code) which produces a
materially higher yield over the term of the Bonds, other than investment property acquired
wi th --
(1) proceeds of the Bonds invested for a reasonable temporary period of
three years or less until such proceeds are needed for the purpose for which the
bonds are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning
of section 1.103-13(b)(12) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10% of the proceeds of the Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated
as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
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contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the
extent applicable, section 149(d) of the Code (relating to advance refundings);
(h) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal
to 90% of the "Excess Earnings", within the meaning of section 148(1) of the Code and to
pay to the United States of America, not later than 60 days after the Bonds have been paid
in full, 100% of the amount then required to be paid as a result of Excess Earnings under
section 148(1) of the Code; and
(i) to maintain such records as will enable the City to fulfill its responsibilities under
this section and section 148 of the Code and to retain such records for at least six years
following the final payment of principal and interest on the Bonds.
It is the understanding of the City that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the u.s. Department of
the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated
which modify, or expapd provisions of the Code, as applicable to the Bonds, the City will not be
required to comply with any covenant contained herein to the extent that such modification or
expansion, in the opinion of nationally-recognized bond counsel, will not adversely affect the
exemption from federal income taxation of interest on the Bonds under section 103 of the Code.
In the event that regulations or rulings are hereafter promulgated which impose additional
requirements which are applicable to the Bonds, the City agrees to comply with the additional
requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to
preserve the exemption from federal income taxation of interest on the Bonds under section 103
of the Code.
Section 15. SALE OF BONDS. Public advertisement for the sale of the Bonds and bids
to purchase the Bonds having been received pursuant thereto, it is hereby found and declared that
the bid submitted by Prudential-Bache Securities (the "Initial Purchaser") is the best bid received;
and the sale of the Bonds to the named best bidder, at a price equal to the principal amount of
the Bonds plus accrued interest thereon from the date thereof to the date of actual delivery,
subject to the unqualified approving opinion, as to the legality of the Bonds of the Attorney
General of the State of Texas, and the market opinion of McCall, Parkhurst & Horton, bond
attorneys, is hereby authorized, ratified, approved, and confirmed. When the Bonds have been
approved by the said Attorney General and registered by the Comptroller of Public Accounts of
the State of Texas, they shall be delivered to the purchasers upon receipt of the full purchase
price.
Section 16. PROCEEDS OF SALE. The proceeds of the Bonds, except the accrued
interest thereon, shall be deposited into a Construction Account to be established by the City for
the purposes for which the Bonds are issued, and the accrued interest shall be deposited to the
Interest and Sinking Fund. It is further provided, however, that any interest earnings on bond
proceeds which are required to be rebated to the United States of America pursuant to Section
14 hereof in order to prevent the Bonds from being arbitrage bonds shall be so rebated and not
considered as interest earnings for the purposes of this Ordinance.
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Section 17. PAYMENT PROCEDURE PURSUANT TO MUNICIPAL BOND
GUARAN1Y INSURANCE POUCY. As long as the Municipal Bond Guaranty Insurance Policy
shall be in full force and effect, the City and the Paying AgentlRegistrar agree to comply with the
following provisions:
(a) If payment of principal or interest due on the Bonds has not been made to the Paying
AgentlRegistrar or any owner of Bonds to whom such payment is due, the Paying AgentlRegistrar
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").
(b) The Paying AgentlRegistrar shall, after giving notice to AMBAC Indemnity as provided
in (a) 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 AgentlRegistrar, and
all records relating to the Funds and Accounts maintained under this Ordinance.
(c) The Paying AgentlRegistrar shall provide AMBAC Indemnity and the Insurance Trustee
with a list of registered owners of the 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 to (i) mail checks or drafts to the registered owners
of Bonds entitled to receive full or partial interest payments from AMBAC Indemnity and (ii) pay
principal upon Bonds surrendered to the Insurance Trustee by the registered owners of Bonds
entitled to receive full or partial principal payments from AMBAC Indemnity.
(d) The Paying AgentlRegistrar shall, at the time it provides notice to AMBAC Indemnity
pursuant to (a) above, notify registered owners of Bonds entitled to receive the payment of
principal or interest thereon from AMBAC Indemnity (i) as to the fact of such entitlement, (ii)
that AMBAC Indemnity will remit to them all or a part of the interest payments next coming due,
(iii) that should that 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 AgentlRegistrar, and (iv) 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 AgentlRegistrar, who shall note
on such Bonds the portion of the principal paid by the Paying AgentlRegistrar, 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,
through the Paying AgentlRegistrar, the payment due less any amount held by the Paying
AgentlRegistrar for payment of principal of or interest on Bonds and legally available therefor.
(e) In the event that the Paying AgentlRegistrar has notice that any payment of principal
of or interest on a Bond which has become due for payment and which is made to an owner of
a Bond by or on behalf of the City has been deemed a preferential transfer and theretofore
recovered from its registered owner pursuant the United States Bankruptcy Code by a trustee in
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bankruptcy in accordance with the final, nonappealable order of a court having competent
jurisdiction, the Paying AgentlRegistrar shall at the time AMBAC Indemnity is notified pursuant
to (a) above, notify all registered owners that in the event that any registered owner's payment is
so recovered, such registered owner will be entitled to payment from AMBAC Indemnity to the
extent of such recovery, and the Paying AgentlRegistrar 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 AgentlRegistrar and subsequently recovered from registered owners and the dates
on which such payme,nts were made.
(1) In addition to those rights granted AMBAC Indemnity under this Ordinance, AMBAC
Indemnity shall, upon remittance and transfer of Bonds or appropriate instruments of assignment,
become the owner thereof, and to evidence such ownership (i) in the case of claims for past due
interest, the Paying AgentlRegistrar shall note AMBAC Indemnity's rights as owner on the
registration books of the City maintained by the Paying AgentlRegistrar upon receipt from AMBAC
Indemnity of proof of the payment of interest thereon to the registered owners of the Bonds and
(ii) in the case of claims for past due principal, the Paying AgentlRegistrar shall note A\1BAC
Indemnity's rights as owner on the registration books of the City maintained by the Paying
AgentlRegistrar upon surrender of the Bonds by the registered owners thereof together with proof
of the payment of principal thereof.
Section 18. APPROVAL AND REGIS1RATION OF BONDS. The Mayor of the City
is hereby authorized to have control of the Bonds and all necessary records and proceedings
pertaining to the Bonds pending their delivery and their investigation, examination, and approval
by the Attorney General of the State of Texas, and their registration by the Comptroller of Public
Accounts of the State of Texas. Upon registration of the Bonds, said Comptroller of Public
Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Certificate. The Bonds thus registered shall remain in the custody of
the Mayor (or his designee) until delivered to the purchaser thereof.
Section 19. FURTIIER PROCEDURES. The Mayor, the City Secretary, and all other
officers, employees, and agents of the City, and each of them, shall be and they are hereby
expressly authorized, empowered, and directed form time to time and at any time to do and
perform all such acts and things and to execute, acknowledge, and deliver in the name and under
the corporate seal and on behalf of the City all such instruments, whether or not herein mentioned,
as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance.
The Official Statement, dated September 13, 1990, and other documents used in connection with
the sale of the Bonds are hereby approved and the Mayor of the City is hereby directed and
authorized to execute on behalf of the City, and the City Secretary is hereby authorized to attest,
the Official Statement and other sale documents.
Section 20. PAYING AGENTIREGISlRAR AGREEMENT. The Paying AgentlRegistrar
Agreement, dated September 15, 1990, between the City and First City, Texas - Houston, N.A,
Houston, Texas is hereby approved, and the Mayor is authorized to execute and the City Secretary
is authorized to attest same.
Section 21. SEVERABILlTY. The provisions of this Ordinance are severable; and in
case anyone or more of the provisions of this Ordinance or the application thereof to any person
20
.
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or circumstance should be held to be invalid, unconstitutional, or ineffective as to any person or
circums~~nce, the remainder of this Ordinance nevertheless shall be valid, and the application of
any such invalid provision to persons or circumstances other than those as to which it is held
invalid shall not be affected thereby.
Section 22. MISCELlANEOUS PROVISIONS. A Titles Not Restrictive. The titles
assigned to the various sections of this Ordinance are for convenience only and shall not be
considered restrictive of the subject matter of any section or of any part of this Ordinance.
B. Inconsistent Provisions. All ordinances, orders, and resolutions, or parts thereof, which
are in conflict or inconsistent with any provision of this Ordinance are hereby repealed and
declared to be inapplicable, and the provisions of this Ordinance shall be and remain controlling
as to the matters prescribed herein.
C. Severability. If any word, phrase, clause, paragraph, sentence, part, portion, or provision
of this Ordinance or the application thereof to any person or circulllstances shall be held to be
invalid, the remainder of this Ordinance shall nevertheless be valid and the City Council hereby
declares that this Ordinance would have been enacted without such invalid word, phrase, clause,
paragraph, sentence, part, portion, or provisions.
D. Governing Law. This Ordinance shall be construed and enforced in accordance with
the laws of the State of Texas.
E. Parties Interested Herein. Nothing in this Ordinance expressed or implied is intended
or shall be construed to confer upon, or to give to, any person or entity, other than the City, the
Initial Purchaser, AMBAC Indemnity, the Paying AgentlRegistrar, and the registered owners of
the Bonds, any right, remedy, or claim under or by reason of this Ordinance or any covenant,
condition, or stipulation hereof, and all covenants, conditions, stipulations, promises, and agreements
in this Ordinance contained by and on behalf of the City shall be for the sole and exclusive benefit
of the City, the Initial Purchaser, AMBAC Indemnity, the Paying AgentlRegistrar, and the owners
of the Bonds.
F. Consent of AMBAC Indemnity Upon Default. Anything in this Ordinance to the
contrary notwithstanding, upon the occurrence and continuation of a default in the punctual
performance of all covenants contain in this Ordinance, AMBAC Indemnity shall be entitled to
control and direct the enforcement of all rights and remedies granted to the owners of the Bonds
under this Ordinance, and AMBAC Indemnity shall also be entitled to approve all waivers of
events of default.
Section 23. IMMEDIATE EFFECf. This Ordinance shall take effect immediately upon
its adoption.
PASSED AND APPROVED this September 27, 1990.
\s\Cherie Black
City Secretary, City of La Porte, Texas
(CITY SEAL) .
\s\Norman Malone
Mayor, City of La Porte, Texas
21
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ORDINANCE NO.~
ORDINANCE AUTHORIZING THE ISSUANCE OF $1,500,000 CITY OF
LA PORTE, TEXAS, GENERAL OBliGATION BONDS, SERIES 1990;
EXECUTION OF A PAYING AGENTIREGISTRAR AGREEMENT; AND ALL
OTIlER MATTERS RELATED THERETO, INCLUDING IMMEDIATE
EFFECTIVENESS
DRAFT 9/11/90
WHEREAS, at an election duly called and held in the City of La Porte, Texas (the "City")
on June 15, 1985 (the "Election"), mure than a majority of the duly qualified resident electors of
the City who participated in the election voted in favor of, among other things, the issuance of tax
supported bonds for various purposes, including those described below; and
WHEREAS, the City has heretofore issued "City of La Porte, Texas General Obligation
Bonds, Series 1985" in the original aggregate principal amount of $5,000,000 as the first installment
of bonds authorized at the Election for various purposes; and
WHEREAS, the City has heretofore issued "City of La Porte, Texas General Obligation
Bonds, Series 1989" in the original aggregate principal amount of $4,550,000 as the second
installment of bonds authorized at the Election for various purposes; and
WHEREAS, the City Council of the City deems it necessary and desirable to proceed with
the issuance of another installment of bonds authorized at the Election in the aggregate principal
amount of $1,500,000, for the purpose of constructing or purchasing a gymnasium, support facilities,
and related improvements in Little Cedar Bayou Park, leaving certain of said bonds authorized at
the Election to be issued in one or more installments at a later date or dates:
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
LA PORTE, TEXAS, THAT;
Section 1. BONDS AUTHORIZED. The preamble to this Ordinance is hereby made a
part hereof and pursuant to Article 701 et. seq., Vernon's Texas Civil Statutes, as amended, and
other applicable law, the City's bonds are hereby authorized in the principal amount of $1,500,000
to be designated as the "City of La Porte, Texas, General Obligation Bonds, Series 1990" for the
purpose of constructing or purchasing a gymnasium, support facilities, and related improvements
in Little Cedar Bayou Park.
Section 2. DATES, AND MATURITIES, AND INTEREST RATES. The Bonds shall
be dated September 15, 1990, shall be in the denomination of $5,000 or any integral multiple
thereof, shall be numbered consecutively from R-l upward, and shall mature on the maturity date,
in each of the years, and in the amounts, respectively, as set forth in the following schedule and
the Bonds shall bear interest at the following rates per annum:
e e
MATURITY DATE: MARCH 15
INTEREST INTEREST
YEAR AMOUNTS RATES YEAR AMOUNTS RATES
1992 $75,000 % 2002 $75,000 %
1993 75,000 2003 75,000
1994 75,000 2004 75,000
1995 75,000 2005 75,000
1996 75,000 2006 75,000
1997 75,000 2007 75,000
1998 75,000 2008 75,000
1999 75,000 2009 75,000
2000 75,000 2010 75,000
2001 75,000 2011 75,000
Interest shall be payable March 15, 1991, and semiannually thereafter on September 15 and
March 15. Said interest shall be payable to the registered owner of any such Bond in the man-
ner provided in the FORM OF BONDS set forth in this Ordinance.
Section 3. RIGHT OF PRIOR REDEMPTION. The City reserves the right to redeem the
Bonds maturing on or after March 15, 2002, in whole or in part in principal amounts of $5,000
or any integral multiple thereof, on March 15, 2001, or any date thereafter, at the par value
thereof plus accrued interest to the date fIXed for redemption. If less than all of the Bonds are
to be redeemed by the City, the City shall determine the maturity or maturities and the amounts
thereof to be redeemed and shall direct the Paying AgentlRegistrar to call Bonds, or portions
thereof, within such maturity or maturities and in such principal amounts, for redemption.
Notice of any such redemption shall be given as described in the FORM OF BOND in
Section 5 hereof. If such notice of redemption is given, and if due provision for such payment is
made, the Bonds, or the portions thereof which are to be so redeemed, thereby automatically
shall be redeemed prior to their scheduled maturities, and shall not bear interest after the date
fixed for their redemption, and shall not be regarded as being outstanding except for the right of
the registered owner to receive the redemption price plus accrued interest to the date fIXed for
redemption from the Paying AgentlRegistrar out of the funds provided for such payment. The
Paying AgentlRegistrar shall record in the Registration Books all such redemptioHs of principal of
the Bonds or any portion thereof. If a portion of any Bond shall be redeemed a substitute Bond
or Bonds having the same maturity date, bearing interest at the same rate, in any denomination
or denominations in any integral multiple of $5,000, at the written request of the registered owner,
and in an aggregate principal amount equal to the unreserved portion thereof, will be issued to the
registered owner upon the surrender thereof for cancellation, at the expense of the City all as
provided in this Ordinance.
Section 4. PAYING AGENTIREGISTRAR (a) The City shall keep or cause to be kept
at the principal corporate trust offIce of the Paying AgentlRegistrar herein named, or such other
bank, trust company, financial institution, or other entity duly qualified and legally authorized to
serve and perform duties of and services of Paying AgentlRegistrar, named in accordance with
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the provisions of (g) of this Section hereof (the "Paying AgentlRegistrar"), books or records of the
registration and transfer of the Bonds (the "Registration Books"), and the City hereby appoints the
Paying AgentlRegistrar as its registrar and transfer agent to keep such books or records and make
such transfers and registrations under such reasonable regulations as the City and Paying
AgentlRegistrar may prescribe; and the Paying AgentlRegistrar shall make such transfers and
registrations as herein provided. It shall be the duty of the Paying AgentlRegistrar to obtain from
the registered owncr and record in the Registration Books the address of such registered owner
of each Bond to which payments with respect to the Bonds shall be mailed, as herein provided.
The City or its designee shall have the right to inspect the Registration Books during regular
business hours of the Paying AgentlRegistrar, but otherwise the Paying AgentlRegistrar shall keep
the Registration Books confidential and, unless otherwise required by law, shall not permit their
inspection by any other entity. Registration of each Bond may be transferred in the Registration
Books only upon presentation and surrender of such bond to the Paying AgentlRegistrar for
transfer of registration and cancellation, together with proper written instruments of assignment,
in form and with guarantee of signatures satisfactory to the Paying AgentlRegistrar, evidencing the
assignment of the bond, or any portion thereof in any integral multiple of $5,000, to the assignee
or assignees thereof, and the right of such assignee or assignees to have the bond or any such
portion thereof registered in the name of such assignee or assignees. Upon the assignment and
transfer of any Bond or any portion thereof, a new substitute bond or bonds shall be issued in
exchange therefor in the manner herein provided.
(b) The entity in whose name any Bond shall be registered in the Registration Books at
any time shall be treated as the absolute owner thereof for all purposes of this Ordinance, whether
or not such bond shall be overdue, and the City and the Paying AgentlRegistrar shall not be affect-
ed by any notice to the contrary unless otherwise required by law; and payment of, or on account
of, the principal of, premium, if any, and interest on any such bond shall be made only to such
registered owner. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such bond to the extent of the sum or sums so paid.
(c) The City hereby further appoints the Paying AgentlRegistrar to act as the paying agent
for paying the principal of and interest on the Bonds, and to act as its agent to exchange or
replace Bonds, all as provided in this Ordinance. The Paying AgentlRegistrar shall keep proper
records of all payments made by the City and th~ Paying AgentlRegistrar with respect to the
Bonds, and of all exchanges of such bonds, and all replacements of such bonds, as provided in this
Ordinance.
(d) Each Bond may be exchanged for fully registered bonds in the manner set forth herein.
Each bond issued and delivered pursuant to this Ordinance, to the extent of the unpaid or
unredeemed principal balance or principal amount thereof, may, upon surrender of such bond at
the principal corporate trust office of the Paying AgentlRegistrar, together with a written request
therefor duly executed by the registered owner or the assignee or assignees thereof, or its or their
duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the Pay-
ing AgentlRegistrar, at the option of the registered owner or such assignee or assignees, as
appropriate, be exchanged for fully registered bonds, without interest coupons, in the form
prescribed in thc FORM OF BONDS set forth in this Ordinance, in the denomination of $5,000,
or any integral multiple of $5,000 (subject to the requirement hereinafter stated that each
substitute Bond shall have a single stated maturity date), as requested in writing by such registered
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owner or such assignee or assignees, in an aggregate principal amount equal to the unpaid or
unredeemed principal amount of any bond or bonds so surrendered, and payable to the appro-
priate registered owner, assignee, or assignees, as the case may be. If a portion of any Bond shall
be redeemed prior to its scheduled maturity as provided herein, a substitute bond or bonds having
the same maturity date, bearing interest at the same rate, in the denomination or denominations
of any integral multiple of $5,000 at the request of the registered owner, and in an aggregate
principal amount equal to the unredeemed portion thereof, will be issued to the registered owner
upon surrender thereof for cancellation. If any Bond or portion thereof is assigned and trans-
ferred, each bond issued in exchange therefor shall have the same principal maturity date and bear
interest at the same rate as the bond for which it is being exchanged. Each substitute bond shall
bear a letter and/or number to distinguish it from each other bond. The Paying Agent/Registrar
shall exchange or replace Bonds as provided herein, and each fully registered bond delivered in
exchange for or replacement of any bond or portion thereof as permitted or required by any
provision of this Ordinance shall constitute one of the Bonds for all purposes of this Ordinance,
and may again be exchanged or replaced. It is specifically provided, however, that any bond
delivered in exchange for or replacemellt of another bond prior to the first scheduled interest pay-
ment date on the Bonds (as stated on the face thereof) shall be dated the same date as such bond,
but each substitute bond so delivered on or after such first scheduled interest payment date shall
be dated as of the interest payment date preceding the date on which such substitute bond is
delivered, unless such bond is delivered on an interest payment date, in which case it shall be
dated as of such date of delivery; provided, however, that if at the time of delivery of any
substitute bond the interest on the bond for which it is being exchanged has not been paid, then
such bond shall be dated as of the date to which such interest has been paid in full. On each
substitute bond issued in exchange for or replacement of any bond or bonds issued under this
Ordinance there shall be printed thereon a Paying AgentlRegistrar's Authentication Certificate, in
the form hereinafter set forth. An authorized representative of the Paying AgentlRegistrar shall,
before the delivery of any such bond, date such by dating the Authentication Certificate in the
manner set forth above, and manually sign such Certificate, and no such bond shall be deemed to
be issued or outstanding unless such Certificate is so executed. The Paying AgentlRegistrar
promptly shall cancel all Bonds surrendered for exchange or replacement. No additional
ordinances, orders, or resolutions need be passed or adopted by the City Council or any other body
or person so as to accomplish the foregoing exchange or replacement of any Bond or portion
thereof, and the Paying AgentlRegistrar shall provide for the printing, execution, and delivery of
the substitute bonds in the manner prescribed herein, and said bonds shall be of type composition
printed on paper with lithographed or steel engraved borders of customary weight and strength
pursuant to Article 717k-6, V.A T.C.S, and particularly Section 6 thereof, the duty of such
exchange or replacement of bonds as aforesaid is hereby imposed upon the Paying AgentlRegis-
trar, and upon the execution of the aforementioned Paying AgentlRegistrar's Authentication
Certificate, the exchanged or replaced Bond shall be valid, incontestable, and enforceable in the
same manner and with the same effect as the Bonds which originally were delivered pursuant to
this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public
Accounts. Neither the City nor the Paying AgentlRegistrar shall be required (1) to issue, transfer,
or exchange any Bond subject to redemption during a period beginning at the opening of business
15 days before the day of the first mailing of a notice of redemption of Bonds and ending at the
close of business on the day of such mailing or (2) to transfer or exchange any Bond after it is
selected for redemption, in whole or in part when such redemption is scheduled to occur within
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30 calendar days; provided, however, that such limitation shall not be applicable to an exchange
by the owner of the uncalled principal balance of a Bond.
(e) All Bonds issued in exchange or replacement of any other Bond or portion thereof,
(i) shall be issued in fully registered form, without interest coupons, with the principal of and
interest on such bonds to be payable only to the registered owners thereof, (ii) may be redeemed
prior to their scheduled maturities, (Hi) may be transferred and assigned, (iv) may be exchanged
for other Bonds, (v) shall have the characteristics, (vi) shall be signed and sealed, and (vii) the
principal of and interest on the Bonds shall be payable, all as provided, and in the manner required
or indicated, in the FORM OF BONDS set forth in this Ordinance.
(f) The City shall pay all of the Paying AgentlRegistrar's reasonable and customary fees
and charges for making transfers, conversions, and exchanges of the Bonds in accordance with an
agreement between the City and the Paying Agent/Registrar, but the registered owner of any
Bond requesting such transfer shall pay any taxes or other governmental charges required to be
paid with respect thereto. In addition, the City hereby covenants with the registered owners of the
Bonds that it will pay the reasonable and standard or customary fees and charges of the Paying
AgentlRegistrar for its services with respect to the payment of the principal of and interest on the
Bonds, when. due.
(g) The City covenants with the registered owners of the Bonds that at all times while the
Bonds are outstanding the City will provide a competent and legally qualified national or state
banking institution, which shall be a corporation organized and doing business under the laws of
the United States of America or of any state, authorized under such laws to exercise trust powers,
and subject to supervision or examination by federal or state authorities, or other entity duly
qualified and legally authorized to serve as and perform the duties and services of Paying
AgentlRegistrar, to act as and perform the services of Paying AgentlRegistrar for the Bonds under
this Ordinance, and that the Paying AgentlRegistrar will be one entity. The City reserves the right
to, and may, at its option, change the Paying AgentlRegistrar upon not less than 60 days written
notice to the Paying AgentlRegistrar. In the event that the entity at any time acting as Paying
AgentlRegistrar (or its successor by merger, acquisition, or other method) should resign or
otherwise cease to act as such, the City covenants that promptly it will appoint a competent and
legally qualified entity whose qualifications substantially are similar to the previous Paying
AgentlRegistrar to act as Paying AgentlRegistrar under this Ordinance. Upon any change in the
. Paying AgentlRegistrar, the previous Paying AgentlRegistrar promptly shall transfer and deliver the
Registration Books (or a copy thereof), along with all other pertinent books and records relating
to the Bonds, to the new Paying Agent/Registrar designated and appointed by the City. Upon any
change in the Paying AgentlRegistrar, the City promptly will cause a written notice thereof to be
sent by the new Paying AgentlRegistrar to each registered owner of the Bonds, by United States
Mail, postage prepaid, which notice also shall give the address of the new Paying AgentlRegis-
trar. By accepting the position and performing as such, each Paying AgentlRegistrar shall be
deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance
shall be delivered to each Paying AgentlRegistrar.
Section 6. FORMS. The form of the Bonds, including the form of Paying
AgentlRegistrar's Certificate, the form of Assignment, and the form of the Comptroller's Regis-
tration Certificate to accompany the Bonds on the "initial delivery thereof, shall be, respectively,
5
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substantially as follows, with such appropriate variations, omissions, or insertions as arc permitled
or required by this Ordinance:
FORM OF BONDS:
NO.
$
United States of America
State of Texas
CITY OF LA PORTE, TEXAS,
GENERAL OBLIGATION BOND, SERIES 1990
MATURITY DATE
INTEREST RATE
%
ORIGINAL ISSUE DATE CUSIP
September 15, 1990
ON TIlE MATURITY DATE, SPECIFIED ABOVE, THE CITY OF LA PORTE,
TEXAS (the "City"), hereby promises to pay to , or the registered assignee
hereof (either being hereinafter called the "registered owner") the principal amount of
and to pay interest thereon, from the original issue date of this Bond, specified above, to the date
of its scheduled maturity or the date of its redemption prior to scheduled maturity, at the rate of
interest per annum, specified above, with said interest being payable on March 15, 1991, and
semiannually on each September 15 and March 15 thereafter.
TIlE TERMS AND PROVISIONS of this Bond are continued on the reverse side hereof
and shall for all purposes have the same effect as though fully set forth at this place.
TIlE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the registered owner hereof upon presentation and surrender of this Bond at maturity
or upon the date fIXed for its redemption prior to maturity, at the principal corporate trust office
of FIRST CITY, TEXAS - HOUSTON, N.A, HOUSTON, TEXAS, which is the "Paying
AgentlRegistrar" for this Bond. The payment of interest on this Bond shall be made by the Paying
AgentlRegistrar to the registered owner hereof as shown by the Registration Books kept by the
Paying AgentlRegistrar at the close of business on the Record Date by check drawn by the Paying
AgentlRegistrar on, and payable solely from, funds of the City required to be on deposit with the
Paying AgentlRegistrar for such purpose as hereinafter provided; and such check shall be sent by
the Paying AgentlRegistrar by United States mail, postage prepaid, on each such interest payment
date, to the registered owner hereof at its address as it appears on the Registration Books kept
by the Paying AgentlRegistrar, as hereinafter described. The record date ("Record Date") for the
interest payable on any interest payment date means the last business day of the month next
preceding a scheduled interest payment. In the event of a non-payment of interest on a scheduled
payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special
Record Date") will be established by the Paying Agent/Registrar, if and when funds for the
payment of such interest have been received from the City. Notice of the Special Record Date
and of the scheduled payment date of the past due interest (the "Special Payment Date", which
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shall be 15 calendar days after the Special Record Date) shall be sent at least five business days
prior to the Special Record Date by United States mail, first class, postage prepaid, to the address
of each registered owner of a Bond appearing on the books of the Paying AgentlRegistrar at the
close of business on the last business day next preceding the date of mailing of such notice. The
City covenants with the registered owner of this Bond that no later than each principal payment
date and interest payment date for this Bond it will make available to the Paying AgentlRegistrar
the amounts required to provide for the payment, in immediately available funds, of all principal
of and interest on the Bonds, when due, in the manner set forth in the ordinance authorizing the
issuance of the bonds adopted by the City Council of the City on September 27, 1990 (the
"Ordinance").
*IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, a Sunday, a legal holiday, or a day on which banking institutions in the city where the
Paying AgentlRegistrar is located are authorized by law or executive order to close, then the date
for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal
holiday, or day on which banking institutions are authorized to close; and payment on such date
shall have the same force and effect as if made on the original date payment was due.
*nns BOND is one of a Series of bonds of like tenor and effect except as to
denomination, number, maturity, interest rate and right of prior redemption, issued in the aggregate
principal amount of $1,500,000 for the purpose of constructing or purchasing a gymnasium, support
facilities, and related improvements in Little Cedar Bayou Park.
*THE BONDS of this series scheduled to mature on and after March 15, 2002 may be
redeemed prior to their scheduled maturities, in whole, or in part in principal amounts of $5,000
or any integral multiple thereof, at the option of the City, on March IS, 2001, or on any interest
payment date thereafter, for the principal amount thereof plus accrued interest to the date fIXed
for redemption.
* AT LEAST 30 days prior to the date fIXed for any such redemption, a notice of such
redemption shall be published one time in a financial journal or publication of general circulation
in the United States of America carrying as a regular feature notices of municipal bonds called for
redemption. Such notice also shall be sent by the Paying AgentlRegistrar by United States mail,
first-class postage prepaid, at least 30 days prior to the date fIXed for any such redemption, to the
registered owner of each Bond or portion thereof to be redeemed at its address as it appeared on
the Registration Books on the 45th day prior to such redemption date and to major securities
depositories, national bond rating agencies, and bond information services; provided, however, that
the failure to send, mail or receive such notice, or any defect therein or in the sending or mailing
thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any
Bond, and the publication of notice as described above shall be the only notice actually required
in connection with or as a prerequisite to the redemption of any Bonds. By the date fIXed for any
such redemption due provision shall be made by the City with the Paying AgentlRegistrar for the
payment of the required redemption price for this Bond or the portion hereof which is to be so
redeemed, plus accrued interest thereon to the date fIXed for redemption. If such notice of
redemption is given, and if due provision for such payment is made, all as provided above, this
Bond, or the portion thereof which is to be so redeemed, thereby automatically shall be redeemed
prior to its scheduled maturity, and shall not bear interest after the date fIXed for its redemption,
7
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and shall not be regarded as being outstanding except for the right of the registered owner to
receive the redemption price plus accrued interest to the date fIXed for redemption from the Paying
AgentlRegistrar out of the funds provided for such payment. The Paying AgentlRegistrar shall
record in the Registration Books all such redemptions of principal of this Bond or any portion
hereof. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same
maturity date, bearing interest at the same rate, in any denomination or denominations in any
integral multiple of $5,000, at the written request of the registered owner, and in aggregate
principal amount equal to the unredeemed portion thereof, will be issued to the registered owner
upon the surrender thereof for cancellation, at the expense of the City, all as provided in the
Ordinance.
* AlL BONDS OF TIllS SERIES are issuable solely as fully registered bonds, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the
Ordinance, this Bond, or any unredeemed portion hereof, may, at the request of the registered
owner or the assignee or assignees hereof, be assigned, transferred, and exchanged for a like
aggregate principal amount of fully registered bonds, without interest coupons, payable to the
appropriate registered owner, assignee, or assignees, as the case may be, having the same maturity
date, and bearing interest at the same rate, in any denomination or denominations in any integral
multiple of $5,000 as requested in writing by the appropriate registered owner, assignee, or
assignees, as the case may be, upon surrender of this Bond to the Paying AgentlRegistrar for
cancellation, all in accordance with the form and procedures set forth in the Ordinance. Among
other requirements for such assignment and transfer, this Bond must be presented and surrendered
to the Paying AgentlRegistrar, together with proper instruments of assignment, in form and with
guarantee of signatures satisfactory to the Paying AgentlRegistrar, evidencing assignment of this
Bond or any portion or portions hereof in any integral multiple of $5,000 to the assignee or
assignees in whose name or names this Bond or any such portion or portions hereof is or are to
be transferred and registered. The form of Assignment printed or endorsed on this Bond may be
executed by the registered owner to evidence the assignment hereof, but such method is not
exclusive, and other instruments of assignment satisfactory to the Paying AgentlRegistrar may be
used to evidence the assignment of this Bond or any portion or portions hereof from time to time
by the registered owner. The City shall pay the Paying AgentlRegistrar's reasonable standard or
customary fees and charges for transferring, converting and exchanging any Bond or portion
thereof; provided, however, that any taxes or governmental charges required to be paid with respect
thereto shall be paid by the one requesting such transfer, conversion and exchange. In any
circumstance, neither the City nor the Paying AgentlRegistrar shall be required (1) to make any
transfer or exchange during a period beginning at the opening of business 15 days before the day
of the first mailing of a notice of redemption of bonds and ending at "the close of business on the
day of such mailing or (2) to transfer or exchange any Bonds so selected for redemption when such
redemption is scheduled to occur within 30 calendar days; provided, however, such limitation shall
not be applicable to an exchange by the registered owner of the uncalled principal balance of a
Bond.
*IN THE EVENT any Paying AgentlRegistrar for the Bonds is changed by the City, resigns,
or otherwise ceases to act as such, the City has covenanted in the Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor, and promptly wiU cause written notice
thereof to be mailed to the registered owners of the Bonds.
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*BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Ordinance, agrees to be bound by such terms
and provisions, acknowledges that the Ordinance is duly recorded and available for inspection in
the official minutes and records of the City, and agrees that the terms and provisions of this Bond
and the Ordinance constitute a contract between each registered owner hereof and the City.
*TIIE BONDS ARE PAYABLE FROM the proceeds of an ad valorem tax levied upon
all taxable property within the City within the limitations prescribed by law. Reference is hereby
made to the Ordinance for a description of the covenants by which the Bonds are secured, the
respective rights thereunder of the registered owners of the Bonds and the City, and the terms
upon which the Bonds are, and are to be, authenticated and delivered.
IT IS HEREBY certified and covenanted that this Bond has been duly and validly
authorized, issued, and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Bond have been performed, existed, and been done in accordance with law; and that the issuance
of this Bond does not exceed any constitutional or statutory limitation.
IN TESTIMONY WHEREOF, the City Council has caused the seal of the City to be duly
impressed or placed in facsimile hereon, and this Bond to be signed with the imprinted facsimile
signature of the Mayor and countersigned by the facsimile signature of the City Secretary.
COUNTERSIGNED:
City Secretary, City of La Porte
Mayor, City of La Porte
(CITY SEAL)
FORM OF PAYING AGENTIREGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENTIREGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Ordinance
described on the face of this Bond; and that this Bond has been issued in exchange for or
replacement of a bond, bonds, or a portion of a bond or bonds of an issue which origillally was
approved by the Attorney General of the State of Texas and registered by the Comptroller of
Public Accounts of the State of Texas.
FIRST CITY, TEXAS - HOUSTON, N.A,
HOUSTON, TEXAS
Paying AgentlRegistrar
Dated
By
Authorized Representative
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FORM OF STATEMENT OF INSURANCE
[TO COME]
FORM OF ASSIGNMENT:
* ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
Please insert Social Security or Taxpayer
Identification Number of Transferee
I
I
(Please print or typewrite name and address, including zip code of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to register the transfer of the within Bond on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
NOTICE: The signature above must correspond
with the name of the Registered Owner as it
appears upon the front of this Bond in every
particular, without alteration or enlargement
or any change whatsoever.
The following abbreviations, when used in the Assignment above or on the face of the
within Bond, shall be construed as though they were written out in full according to applicable
laws or regulations: .
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT-
Custodian
(Cust) (Minor)
under Uniform Gifts to Minors Act
(State)
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Additional abbreviations may also be used though not in the list above.
"(FORM OF COMPTROLLER'S CERTIFICATE PRINTED ON OR ATTACHED TO
THE BONDS UPON INITIAL DELIVERY THEREOF)
OFFICE OF COMPTROLLER
REGISTER NO.
STATE OF TEXAS
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
(SEAL)
NOTE TO PRINTER:
*'s to be on reverse side of bond
XXXXXXX
Comptroller of Public Accounts of
the State of Texas
Section 6. DEFIN1TIONS. As used in this Ordinance in addition to other terms and
words defined herein, the following terms shall have the meanings set forth below, unless the text
hereof specifically indicates otherwise:
(a) [Insurance definition]
(b) The terms "Bond" or "Bonds" shall mean one or more, as the case may be, of the
Bonds authorized to be issued by this Ordinance.
(c) The terms "City" and "Issuer" shall mean the City of La Porte, Texas, or where
appropriate the City Council thereof.
(d) The term "City Council" shall mean the governing body of the City.
(e) The term "Interest and Sinking Fund" means the fund provided for in Section 8 hereof.
(l) [The term "Municipal Bond Guaranty Insurance Policy" means the municipal bond
guaranty insurance policy issued by insuring the payment when due of
the principal and interest on the Bonds as provided therein. ]
(g) The term "Permitted Investments" means one or more of the following:
(1) direct obligations of (including obligations issued or held in book entry form
on the books of) the Department of Treasury of the United States of America;
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(2) obligations of any of thc following federal agencies which obligations represent
full faith and crcdit of the Unitcd States of America, including:
Export - Import Bank
Farmcrs Homc Administration
U.S. Maritime Administration
Small Business Administration
Government National Mortgage Association (GNMA)
U.S. Department of Housing and Urban Development (PHA's)
Fcderal Hou:;ing Administration;
(3) bonds, notes or other evidences of indebtedness rated "AAA" by Standard &
Poor's Corporation and "Aaa" by Moody's Investor Services issued by the Federal National
Mortgage Association or the Federal Home Loan Mortgage Corporation with remaining
maturities not exceeding three years; or
[(4) other forms of investments permitted by law and approved in writing by the
.]
(h) The term "Year" or "fiscal year" shall mean the regular fiscal year used by the City
which may be any 12 consecutive months period established by the City.
Section 7. PLEDGE AND LEVY OF TAXES. While the Bonds are any part of the
principal thereof or the interest thereon remain outstanding and unpaid, there is hereby levied and
there shall be annually assessed and collected in due time, form, and manner and at the same time
other City taxes are asscssed, levied, and collected, in each year beginning with the current year,
a continuing direct annual ad valorem tax upon all taxable property in the City sufficient to pay
the current interest thereon and to create a sinking fund of not less than two percent of the
principal amount of the Bonds then outstanding or of not less than the amount required to pay
the principal payable out of said tax, whichever is greater, full allowance being made for
delinquencies and costs of collection, and said taxes, when collected shall be applied to the
principal of and interest on the Bonds and for no other purpose.
Section 8. INIEREST AND SINKING FUND. For the purpose of paying the principal
of and interest on the Bonds, as the same come due, there is hereby created and established on
the books of the City a separate fund entitled the "City of La Porte, Texas, General Obligation
Bonds, Series 1990 Interest and Sinking Fund" (the "Interest and Sinking Fund"), and all taxes
levied and collected pursuant to Section 7 hereof shall be deposited as collected into the Interest
and Sinking Fund.
Section 9. INVF.STMENTS AND SECURITY FOR FUNDS. The City Council may place
money in any fund created by this Ordinance in Permitted Investments; provided, however, that
the City hereby covenants that the proceeds of the sale of the Bonds will be used as soon as
practicable for the purposes for which the Bonds are issued. Obligations purchased as an
investment of money in a fund shall be deemed to be a part of such fund. Except as otherwise
provided by law and Section 16 hereof, amounts received from the investment of any money in any
fund created by this Ordinance may be placed into any fund of the City as determined by the City
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Council. All funds crcated by this Ordinance shall be securcd in the manner and to the fullest
extent requircd by law for the security of funds of the City.
Section 10. DESIGNATION AS QUALIFIED TAX-EXEMYf BONDS. The City hereby
designates the Bonds as "qualified tax-exempt bonds" as defined in section 265(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code"). In furtherance of such designation, the City
represents, covenants, and warrants the following: (a) during the calendar year in which the Bonds
are issued, the City (including any subordinate entities) has not designated nor will designate bonds,
which when aggregated with the Bonds, will result in more than $10,000,000 of "qualified tax-
exempt bond~" being issued; (b) the City reasonably anticipates that the amount of tax-exempt
obligations issued during the calendar year in which the Bonds are issued by the City (or any
subordinate entities) will not exceed $10,000,000; and (c) .the City will take such action or refrain
from such action as necessary in order that the Bonds will not be considered "private activity bonds"
within the meaning of section 141 of the Code.
Section 11. AMENDMENT OF ORDINANCE. (a) The holders of the Bonds
aggregating in principal amount 51 % of the aggregate principal amount of then outstanding Bonds
shall have the right from time to time to approve any amendment to this Ordinance which may be
deemed necessary or desirable by the City; provided, however, that without the consent of the
holders of all of the Bonds at the time outstanding, nothing herein contained shall permit or be
construed to permit the amendment of the terms and conditions in this Ordinance or in the Bonds
so as to:
(1) Make any change in the maturity of the outstanding Bonds;
(2) Reduce the rate of interest borne by any of the outstanding Bonds;
(3) Reduce the amount of the principal payable on the outstanding Bonds;
(4) Modify the terms of payment of principal of or interest on the outstanding Bonds
or impose any conditions with respect to such payment;
(5) Affect the rights of the holders of less than all of the Bonds then outstanding;
(6) Change the minimum percentage of the principal amount of Bonds necessary for
consent to such amendment.
(b) if at any time the City shall desire to amend the Ordinance under this Section, the City
shall cause notice of the proposed amendment to be [mailed to not less than
14 days before any action may be taken and] published in a financial newspaper or journal
published in The City of New York, New York, once during each calendar week for at least two
successive calendar weeks. Such notice shall briefly set forth the nature of the proposed
amendment and shall state that a copy thereof is on file at the principal office of the Paying
AgentlRegistrar for inspection by all holders of Bonds. Such publication is not required, however,
if notice in writing is given to each holder of the Bonds.
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(c) Whenever at any time not less than 30 days, and within one year, from the date of the
first publication of said notice or other service of written notice the City shall receive an instrument
or instruments executed by the holders of at least 51 % in aggregate principal amount of all Bonds
then outstanding, which instrument or instruments shall refer to the proposed amendment described
in said notice and which specifically consent to and approve such amendment in substantially the
form of the copy thereof on file with the Paying AgentlRegistrar, the City Council may pass the
amendatory ordinance in substantially the same form.
(d) Upon the passage of any amendatory ordinance pursuant to the provisions of this
Section, this Ordinance shall be deemed to be amended in accordance with such amendatory
ordinance, and the respective rights, duties and obligations under this Ordinance of the City and
all the holders of then outstanding Bonds shall thereafter be determined, exercised and enforced
hereunder, subject in all respects to such amendments.
(e) Any consent given by the holder of a Parity Bond pursuant to the provisions of this
Section shall be irrevocable for a period of six months from the date of the first publication of the
notice provided for in this Section, and shall be conclusive and binding upon all future holders of
the same Parity Bond during such period. Such consent may be revoked at any time after six
months from the date of the first publication of such notice by the holder who gave such consent,
or by a successor in title, by filing notice thereof with the Paying Agent and the City, but such
revocation shall not be effective if the holders of 51 % in aggregate principal amount of the then
outstanding Bonds as in this Section defined have, prior to the attempted revocation, consented
to and approve the amendment. consent shall be required in addition to
consent of the owners of Bonds, when required, for the execution and delivery of any supplemental
ordinance.
(f) For the purpose of this Section the fact of the holding of Bonds issued in registered
form without coupons and the amounts and numbers of such Bonds and the date of their holding
same shall be proved by the Registration Books of the Paying AgentlRegistrar. For purposes of
this Section, the holder of a Parity Bond shall be the owner thereof as shown on such Registration
Books. The City may conclusively assume that such ownership continues until written notice to
the contrary is served upon the City.
(g) The foregoing provisions of this Section notwithstanding, the City by action of the City
Council may amend this Ordinance for anyone or more of the following purposes:
(1) To add to the covenants and agreements of the City in this Ordinance .
contained, other covenants and agreements thereafter to be observed, grant additional rights
or remedies to bondholders, or to surrender, restrict, or limit any right or power herein
reserved to or conferred upon the City;
(2) To make such provisions for the purpose of curing any ambiguity, or curing,
correcting, or supplementing any defective provision contained in this Ordinance, or in
regard to clarifying matters or questions arising under this Ordinance, as are necessary or
desirable and not contrary to or inconsistent with this Ordinance and which shall not
adversely affect the interests of the holders of the Bonds;
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(3) To modify any of the provIsions of this Ordinance in any other respect
whatever, provided that (i) such modification shall be, and be expressed to be, effective only
after all Bonds outstanding at the date of the adoption of such modification shall cease to
be outstanding, and (ii) such modification shall be specifically referred to in the text of all
Additional Bonds issued after the date of the adoption of such modification.
[(h) Any provision of this Ordinance expressly recognizing or granting rights in or to
may not be amended in any manner which affects the rights of
hereunder without the prior written consent of .j
rl(
Section 12. DAMAGED, MUTllATED, LOST, SfOLENfOR DESTROYED BONDS.
(a) In the event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the Paying
AgentlRegistrar shall cause to be printed, executed, and delivered, a new bond of the same
principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed
Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Application for replacement of damaged, mutilated, lost, stolen, or destroyed Bonds
shall be made to the Paying AgentlRegistrar. In every case of loss, theft, or destruction of a Bond,
the applicant for a replacement bond shall furnish to the City and to the Paying AgentlRegistrar
such security or indemnity as may be required by them to save each of them harmless from any
loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Bond,
the applicant shall furnish to the City and to the Paying AgentlRegistrar evidence to their
satisfaction of the loss, theft, or destruction of such Bond, as the case may be. In every case of
damage or mutilation of a Bond, the applicant shall surrender to the Paying AgentlRegistrar for
cancellation the Bond so damaged or mutilated.
(c) Notwithstanding the foregoing provisions of this Section, in the event any such Bond
shall have matured, and no default has occurred which is then continuing in the payment of the
principal of, redemption premium, if any, or interest on the Bond, the City may authorize the
payment of the same (without surrender thereof expect in the case of a damaged or mutilated
Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished as above
provided in this Section.
(d) Prior to the issuance of any replacement bond, the Paying AgentlRegistrar shall charge
the owner of such Bond with all legal, printing, and other expenses in connection therewith.
Every replacement bond issued pursuant to the provisions of this Section by virtue of the fact that
any Bond is lost, stolen, or destroyed shall constitute a contractual obligation" of the City whether
or not the lost, stolen or destroyed Bond shall be found at any time, or be enforceable by anyone,
and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and
all other Bonds duly issued under this Ordinance.
(e) In accordance with Section 6 of Article 717k-6, V.A T.C.S., this Section of this
Ordinance shall constitute authority for the issuance of any such replacement bond without
necessity of further action by the governing body of the City or any other body or person, and the
duty of the replacement of such bonds is hereby authorized and imposed upon the Paying
AgentlRegistrar, and the Paying AgentlRegistrar shall authenticate and deliver such bonds in the
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form and manner and with the effect, as provided in Section 5(d) of this Ordinance for Bonds
issued in exchange for other Bonds.
Section 13. DEFEASANCE OF mE BONDS. (a) Any Bond and the interest thereon
shall be deemed to be paid, retired, and no longer outstanding (a "DeCeased Bonds") within the
meaning of this Ordinance, except to the extent provided in subsection (d) of this Section 13, when
payment of the principal of such Bond, plus interest thereon to the due date (whether such due
date be by reason oC maturity, upon redemption, or otherwise) either (i) shall have been made or
caused to be made in accordance with the terms thereof (including the giving of any required
notice of redemption), or (ii) shall have been provided for on or before such due date by
irrevocably depositing with or making available to the Paying AgentlRegistrar for such payment (1)
lawful money of the United States of America sufficient to make such payment or (2) direct
obligations of the United States of America, including obligations the principal of and interest on
which are unconditionally guaranteed by the United States of America, which may be United States
Treasury obligations such as its State and Local Government Series, and which may be book entry
form (herein "Government Obligations") which mature as to principal and interest in such amount:;
'and at such time as will insure the availability, without reinvestment, of sufficient money to provide
for such payment, and when proper arrangements have been made by the City with the Paying
AgentlRegistrar for the payment of its services until all Defeased Bonds shall have become due and
payable. At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid,
such Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the
benefits of, the revenue herein levied and pledged as provided in this Ordinance, and such principal
and interest shall be payable solely from such money or Government Obligations.
(b) Any money so deposited with the Paying AgentlRegistrar may at the written direction
of the City also be invested as hereinbefore set forth, and all income from such Government
Obligations received by the Paying AgentlRegistrar which is not required for the payment of the
Bonds and interest thereon, with respect to which such money has been so deposited, shall be
turned over to the City, or deposited as directed in writing by the City.
(c) Until all Defeased Bonds shall have become due and payable, the Paying
AgentlRegistrar shall perform the services of Paying AgentlRegistrar for such Defeased Bonds the
same as if they had not been deCeased, and the City shall make proper arrangements to provide
and pay for such services as required by this Ordinance.
Section 14. TAX COVENANfS. The City covenants to take any action to assure, or
refrain from any action which would adversely affect, the treatment of the Bonds as obligations
described in section 103 of the Code, the interest on which is not includable in the "gross income"
of the holder for purposes of federal income taxation. In furtherance thereof, the City covenants
as follows:
(a) to take any action to assure that no more than 10% of the proceeds of the
Bonds (less amounts deposited to a reserve fund, if any) are used for any "private business
use", as defined in section 141(b)(6) of the Code or, if more than 10% of the proceeds are
so used, that amounts, whether or not received by the City, with respect to such private
business use, do not, under the terms of this Ordinance or any underlying arrangement,
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directly or indirectly, secure or provide for the payment of more than 10% of the debt
service on the Bonds, in contravention of section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use"
described in subsection (a) hereof exceeds 5% of the proceeds of the Bonds (less amounts
deposited into a reserve fund, if any) then the amount in excess of 5% is used for a
"private business use" which is "related" and not "disproportionate", within the meaning of
section 141(b)(3) of the Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser
of $5,000,000, or 5% of the proceeds of the Bonds (less amounts deposited into a reserve
fund, if any) is directly or indirectly used to finance loans to persons, other than state or
local governmental units, in contravention of section 141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(a) of the Code;
(e) to refrain from taking any action that would result in the Bonds being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(t) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code) which produces a
materially higher yield over the term of the Bonds, other than investment property acquired
with --
(1) proceeds of the Bonds invested for a reasonable temporary period of
three years or less until such proceeds are needed for the purpose for which the
bonds are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning
of section 1.103-13(b)(12) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10% of the proceeds of the Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated
as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the
extent applicable, section 149(d) of the Code (relating to advance refundings);
(h) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal
to 90% of the "Excess Earnings", within the meaning of section 148(t) of the Code and to
pay to the United States of America, not later than 60 days after the Bonds have been paid
in full, 100% of the amount then required to be paid as a result of Excess Earnings under
section 148(t) of the Code; and
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(i) to maintain such records as will enable the City to fulfill its responsibilities under
this section and section 148 of the Code and to retain such records for at least six years
following the final payment of principal and interest on the Bonds.
It is the understanding of the City that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the U.S. Department of
the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated
which modify, or expand provisions of the Code, as applicable to the Bonds, the City will not be
required to comply with any covenant contained herein to the extent that such modification or
expansion, in the opinion of nationally-recognized bond counsel, will not adversely affect the
exemption from federal income taxation of interest on the Bonds under section 103 of the Code.
In the event that regulations or rulings are hereafter promulgated which impose additional
requirements which are applicable to the Bonds, the City agrees to comply with the additional
requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to
preserve the exemption from federal income taxation of interest on the Bonds under section 103
of the Code.
Section 15. SALE OF BONDS. Public advertisement for the sale of the Bonds and bids
to purchase the Bonds having been received pursuant thereto, it is hereby found and declared that
the bid submitted by (the "Initial Purchaser") is the best bid received;
and the sale of the Bonds to the named best bidder, at a price equal to the principal amount of
the Bonds plus accrued interest thereon from the date thereof to the date of actual delivery, plus
a cash premium of $ , subject to the unqualified approving opinion, as to the legality of
the Bonds of the Attorney General of the State of Texas, and the market opinion of McCall,
Parkhurst & Horton, bond attorneys, is hereby authorized, ratified, approved, and confirmed.
When the Bonds have been approved by the said Attorney General and registered by the
Comptroller of Public Accounts of the State of Texas, they shall be delivered to the purchasers
upon receipt of the full purchase price.
Section 16. PROCEEDS OF SALE. The proceeds of the Bonds, except the accrued
interest thereon, shall be deposited into a Construction Account to be established by the City for
the purposes for which the Bonds are issued, and the accrued interest shall be deposited io the
Interest and Sinking Fund. It is further provided, however, that any interest earnings on bond
proceeds which are required to be rebated to the United States of America pursuant to Section
14 hereof in ~rder to prevent the Bonds from being arbitrage bonds shall be so rebated and not
considered as interest earnings for the purposes of this Ordinance.
Section 17. [Insurance Language].
Section 18. [Insurance Language].
Section 19. APPROVAL AND REGISTRATION OF BONDS. The Mayor of the City
is hereby authorized to have control of the Bonds and all necessary records and proceedings
pertaining to the Bonds pending their delivery and their investigation, examination, and approval
by the Attorney General of the State of Texas, and their registration by the Comptroller of Public
Accounts of the State of Texas. Upon registration of the Bonds, said Comptroller of Public
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Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Certificate. The Bonds thus registered shall remain in the custody of
the Mayor (or his designee) until delivered to the purchaser thereof.
Section 20. FURTI-IER PROCEDURES. The Mayor, the City Secretary, and all other
officers, employees, and agents of the City, and each of them, shall be and they are hereby
expressly authorized, empowered, and directed form time to time and at any time to do and
perform all such acts and things and to execute, acknowledge, and deliver in the name and under
the corporate seal and on behalf of the City all such instruments, whether or not herein mentioned,
as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance.
The Official Statement, dated , 1990, and other documents used in connection with the sale
of the Bonds are hereby approved and the Mayor of the City is hereby directed and authorized
to execute on behalf of the City, and the City Secretary is hereby authorized to attest, the Official
Statement and other sale documents.
Section 21. PAYING AGENTIREGISTRAR AGREEMENT. The Paying AgentlRegistrar
Agreement, dated September 15, 1990, between the City and First City, Texas - Houston, N.A,
Houston, Texas is hereby approved, and the Mayor is authorized to execute and the City Secretary
is authorized to attest same.
Section 22. SEVERABll..I1Y. The provisions of this Ordinance are severable; and in
case anyone or more of the provisions of this Ordinance or the application thereof to any person
or circumstance should be held to be invalid, unconstitutional, or ineffective as to any person or
circumstance, the remainder of this Ordinance nevertheless shall be valid, and the application of
any such invalid provision to persons or circumstances other than those as to which it is held
invalid shall not be affected thereby.
Section 23. MISCELLANEOUS PROVISIONS. A Titles Not Restrictive. The titles
assigned to the various sections of this Ordinance are for convenience only and shall not be
considered restrictive of the subject matter of any section or of any part of this Ordinance.
B. Inconsistent Provisions. All ordinances, orders, and resolutions, or parts thereof, which
are in conflict or inconsistent with any provision of this Ordinance are hereby repealed and
declared to be inapplicable, and the provisions of this Ordinance shall be and remain controlling
as to the matters prescribed herein.
C. Severability. If any word, phrase, clause, paragraph, sentence, part, portion, or provision
of this Ordinance or the application thereof to any person or circumstances shall be held to be
invalid, the remainder of this Ordinance shall nevertheless be valid and the City Council hereby
declares that this Ordinance would have been enacted without such invalid word, phrase, clause,
paragraph, sentence, part, portion, or provisions.
D. Governing Law. This Ordinance shall be construed and enforced in accordance with
the laws of the State of Texas.
E. Parties Interested Herein. Nothing in this Ordinance expressed or implied is intended
or shall be construed to confer upon, or to give to, any person or entity, other than the City, the
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Initial Purchaser, [Insurance Company], the Paying AgentlRegistrar, and the registered owners of
the Bonds, any right, remedy, or claim under or by reason of this Ordinance or any covenant,
condition, or stipulation hereof, and all covenants, conditions, stipulations, promises, and agreements
in this Ordinance contained by and on behalf of the City shall be for the sole and exclusive benefit
of the City, the Initial Purchaser, [Insurance Compauy], the Paying AgentlRegistrar, and the owners
of the Bonds.
Section 24. ORDINANCE A CONTRACT; AMENDMENTS. This Ordinance shall
constitute a contract with the owners, from time to time, of the Bonds, binding on the Issuer and
its successors and assigns, and shall not be amended or repealed by the Issuer as long as any Bond
remains outstanding except as permitted in this Section. The Issuer may, without the consent of
or notice to any owners, amend, change, or modify this Ordinance as may be required (i) by the
provisions hereof, (ii) in connection with the issuance of any additional bonds, (iii) for the purpose
of curing any ambiguity, inconsistency, or formal defect or omission herein, or (iv) in connection
with any other change which is not to the prejudice of the owners. The Issuer may, with the
written consent of the owners of a majority in aggregate principal amount of Bonds then
outstanding affected thereby, and the insurer of any Bonds amend, change, modify, or rescind any
provisions of this Ordinance; provided that without the consent of all of the owners affected, no
such amendment, change, modification, or rescission shall (i) extend the time or times of payment
of the principal of and interest on the Bonds, reduce the principal amount thereof to the rate of
interest thereon, or in any other way modify the terms of payment of the principal of or interest
on additional bonds on a parity with the lien of the Bonds, (ii) give any preference of any Bond
over any other Bond, (iii) extend any waiver of default to subsequent defaults, or (iv) reduce the
aggregate principal amount of Bonds required for consent to any such amendment, change,
modification, or rescission. Whenever the Issuer shall desire to make any amendment or addition
to or rescission of this Ordinance requiring consent of the owners, the Issuer shall cause notice of
the amendment, addition, or rescission to be given as described above for a notice of redemption.
Whenever at any time within one year after the date of the giving of such notice, the Issuer shall
receive an instrument or instruments in writing executed by the owners of a majority in aggregate
principal amount of the Bonds then outstanding affected by any such amendment, addition, or
rescission requiring the consent of owners of Bonds, which instrument or instruments shall refer
to the proposed amendment, addition, or rescission described in such notice and shall specifically
consent to and approve the adoption thereof in substantially the form of the copy thereof referred
to in such notice, thereupon, but not otherwise, the Issuer may adopt such amendment, addition,
or rescission in substantially such form, except as herein provided. No owner may thereafter object
to the adoption of such amendment, addition, or rescission, or to any of the provisions thereof,
and such amendment, addition, or rescission shall be fully effective for all purposes.
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Section 25. IM.MEDIATE EFFECf. This Ordinance shall take effect immediately upon
its adoption.
PASSED AND APPROVED this September 27, 1990.
\s\
Mayor, City of La Porte, Texas
\s\
City Secretary, City of
La Porte, Texas
(CITY SEAL)
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