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and make interest payments on the Bonds when due as long as there are available funds in the Redemption <br />Fund, in the following order of priority: <br />(1) All matured interest payments shall be made before the principal of any Bonds is paid. <br />(2) Interest on Bonds of earlier maturity shall be paid before interest on ,Bonds of later maturity. <br />(3) Within a single maturity, interest on lower numbered Bonds shall be paid before interest on <br />higher numbered Bonds. <br />(4) The principal of Bonds shall be paid in the order in which the Bonds are presented for payment. <br />Any Bond which is presented but not paid shall be assigned a serial number according to the order of <br />presentment and shall be returned to the Bondowner. <br />When funds become available for the payment of any Bond which was not paid upon presentment, the <br />Treasurer shall notify the registered owner of such Bond by registered mail to present the Bond for payment. If <br />the Bond is not presented for payment within ten days after the mailing of the notice, interest shall cease to run <br />on the Bond. <br />If it appears to the Treasurer that there is a danger of an ultimate loss accruing to the Bondowners for <br />any reason, he or she is required pursuant to the 1915 Act to withhold payment on all matured Bonds and <br />interest on all Bonds and report the facts to the City Council so that the City Council may take proper action to <br />equitably protect all Bondowners. <br />Upon the receipt of such notification from the Treasurer, the City Council is required to fix a date for a <br />hearing upon such notice. At the hearing the City Council shall determine whether in its judgment there will <br />ultimately be insufficient money in the Redemption Fund to pay the principal of the unpaid Bonds and interest <br />thereon. <br />If the City Council determines that in its judgment there will not be an Ultimate Default, it shall direct <br />the Treasurer to pay matured Bonds and interest as long as there is available money in the Redemption Fund. <br />I£ the City Council determines that in its judgment there will ultimately be a shortage in the Redemption <br />Fund to pay the principal of the unpaid Bonds and interest thereon (an "Ultimate Default "), the City Council <br />shall direct the Treasurer to pay to the owners of all outstanding and unpaid Bonds such proportion thereof as <br />the amount of funds on hand in the Redemption Fund bears to the total amount of the unpaid principal of the <br />Bonds and interest which has accrued or will accrue thereon. Similar proportionate payments shall thereafter be <br />made periodically as moneys come into the Redemption Fund. <br />Upon the determination by the City Council that an Ultimate Default will occur, the Treasurer shall <br />notify all Bondowners to surrender their Bonds to the Treasurer for cancellation. Upon cancellation of the <br />Bonds, the Bondowner shall be credited with the principal amount of the Bond so canceled. The Treasurer shall <br />then pay by warrant the proportionate amount of principal and accrued interest due on the Bonds of each <br />Bondowner as may be available from time to time out of the money in the Redemption Fund. Interest shall cease <br />on principal payments made from the date of such payment, but interest shall continue to accrue on the unpaid <br />principal at the rate specified on the Bonds until payment thereof is made. No premiums shall be paid on <br />payments of principal on Bonds made in advance of the maturity date thereon. <br />If Bonds are not surrendered for registration and payment, the Treasurer shall give notice to the <br />Bondowner by registered mail, at the Bondowner's last address as shown on the registration books maintained <br />by the Fiscal Agent, of the amount available for payment. Interest on such amount shall cease as of ten days <br />from the date of mailing of such notice. <br />14 <br />55B -84 <br />