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HomeMy WebLinkAboutO-723ORDINANCE NO. I �� AN ORDINANCE AUTHORIZING THE ISSUANCE AND MAKING SALE OF $1,430,000 PRINCIPAL AMOUNT OF GENERAL OBLIGATION WARRANTS OF THE CITY TO BE DATED JUNE 1, 1983 BE IT ORDAINED by the Mayor and City Council of the City of Fairhope, Alabama, as follows: Section 1. Definitions and Use of Phrases. (a) Definitions. The following words shall have the follow- ing respective meanings in this ordinance: "Callable Warrants" means those of the Warrants having stated maturities in 1994 and thereafter. "Called Warrants" means those of the Warrants which shall have been called for redemption prior to their maturities pursuant to the applicable provisions of Section 4. "City" means the City of Fairhope, a municipal corporation under the laws of Alabama, and includes any municipal corporation into or with which it may be merged or consolidated. "Council" means the governing body of the City as it may at any time be constituted. "Coupon Warrants" means all the Warrants issued in coupon form, i.e., all the Warrants provided for herein other than the Fully Registered Warrant. "Coupons" means those coupons issued in pursuance hereof and evidencing the interest on the applicable Coupon Warrants. "Financial Journal" means a journal printed in the English language, devoted primarily to news of financial matters, and customarily published in the locality specified not less often than five days during each calendar week. "Fully Registered Warrant" means the single Fully Registered Warrant authorized to be issued in Section 3 hereof. "Holder", when used in conjunction with Coupon Warrants or Coupons assigned in blank, means the person in whose name the Warrant is issued or, in the event it shall have been transferred thereon to a named payee then the said word means the person to whom it has been so transferred, or in the event it has been transferred in blank then the said word means the person who is in possession and the apparent owner of the said Coupon Warrant, and when used in conjunction with any of the Coupons the said word means the person who is in possession and the apparent owner of such Coupon. The term "Holder", when used in connection with the Fully Registered Warrant, means the person in whose name the Fully Registered Warrant is registered in the manner provided in Section 6 hereof. "Interest Payment Date" means any June 1 and December 1. "Newspaper" means a newspaper printed in the English lan- guage and customarily published in the locality specified not less often than five days during each calendar week. "Redemption Date" means the date fixed for redemption of Callable Warrants in a published notice of redemption made pursuant to the provisions of Section 4. "Redemption Price" means the price at which Callable War- rants called for redemption may be redeemed on the Redemption Date. "Series 1982 Warrants" means the City's General Obligation Warrants, Series 1982, dated June 1, 1982, originally issued, under the provisions of Ordinance No. 698 of the City adopted by the Council on June 10, 1982, and now outstanding in the aggregate principal amount of $1,000,000. "United States Securities" means securities that are direct obligations of the United States of America, or the principal of and the interest on which are fully guaranteed by the United States of America. "Warrant Fund" means the special fund created in Section 8. "Warrants" means those warrants issued under this Ordinance and authorized in Section 3. 111982 Note" means the City's $357,000 General Obligation Note dated May 23, 1983, which was issued, under the provisions of Resolution No. 79-83 of the City adopted by the Council on May 23, 1983, for the purpose of providing funds necessary to pay a portion of the costs of constructing the 1982 Street Project. 111982 Street Project" means those certain public street im- provements provided for in Improvement Ordinance No. 692 of the City initially adopted by the Council on February 22, 1982, and ratified and confirmed by the Council on April 12, 1982. (b) Use of Phrases. The following words and phrases, where used in this ordinance, shall be given the following respective interpretations: The definitions set forth in subsection (a) of this section shall be deemed applicable whether the words defined are herein used in the singular or plural. Wherever used in this ordinance, any noun or pronoun shall where applicable be deemed to include both singular and plural and to cover all genders. Reference in this ordinance to a section by number shall be to the section having that number in this ordinance. In order to identify readily the words and phrases herein used that are defined in this section, the first letter of each such word and of each word in such phrase is capitalized where herein used (other than when used in the Warrant, Coupon and assignment forms in Section 9). Section 2. Findings. The Council has ascertained and does hereby find and declare that the following facts are true and correct: (a) The Series 1982 Warrants evidence valid general obligations of the City for the payment of the principal of and interest on which the full faith and credit of the City have been irrevocably pledged, and the Council hereby ratifies and confirms the actions of the Mayor and City Clerk of the City in issuing the Series 1982 Warrants. The Council is of the opinion that it would be advantageous to the City and in the interest of its citizens to issue certain of the Warrants hereinafter authorized to be sold and issued for the purpose of redeeming the principal of the Series 1982 Warrants on Decem- ber 1, 1983 (on which date the Series 1982 Warrants will be called for redemption), paying the premium due upon said redemption and paying the accrued interest thereon to Decem- ber 1, 1983. (b) Pursuant to authorization contained in the City's Improvement Ordinance No. 692, the City is presently con- structing the 1982 Street Project and has issued the 1982 Note in order to provide a portion of the funds needed therefor. The 1982 Note constitutes a valid general obligation of the City for the payment of the principal of and interest on which the full faith and credit of the City have been irrevocably pledged, and the Council hereby ratifies and confirms the action of the Mayor and City Clerk of the City in issuing the 1982 Note. The Council is of the opinion that it would be advantageous to the City and in the interest of its citizens to issue certain of the Warrants hereinafter authorized to be sold and issued for the purpose of refunding the principal of the 1982 Note and paying the accrued interest thereon to the date of the delivery of the Warrants. Section 3. Authorization of the Warrants. Pursuant to the applicable provisions of the constitution and laws of the State of Alabama, including particularly Section 11-47-2 and 11-47-4, as amended, of the Code of Alabama of 1975, there are hereby authorized to be sold and issued by the City $1,430,000 aggregate principal amount of General Obligation Warrants. Those of the Coupon Warrants numbered 12 to 215, inclusive, shall be issued for the purpose of refunding the Series 1982 Warrants; those of the Coupon Warrants numbered 216 to 286, inclusive and $2,000 of that one of the Warrants numbered 11, shall be issued for the purpose of refunding the 1982 Note; and those of the Coupon Warrants numbered 1 to 10, inclusive, and $3,000 of that one of the Warrants numbered 11, shall be issued for the purpose of paying the expenses incurred by the Board in connection with the issuance of the Warrants. The Warrants shall be initially issued as one Fully Registered Warrant dated June 1, 1983, in the form prescribed in Section 9(a) hereof which shall be exchangeable by the Holder hereof for Coupon Warrants in accordance with Section 6 hereof. The Coupon Warrants shall be dated June 1, 1983, shall consist of 286 Coupon Warrants in the denomination of $5,000 each, and shall be numbered from 1 to 286, inclusive. The principal of the Warrants shall mature and become payable on June 1 as follows: Coupon Warrant Numbers Year of Aggregate Principal (both inclusive) Maturity Amount Maturing 1 to 7 1984 $ 35,000 8 to 15 1985 40,000 16 to 23 1986 40,000 24 to 36 1987 65,000 37 to 49 1988 65,000 50 to 62 1989 65,000 63 to 76 1990 70,000 77 to 90 1991 70,000 91 to 105 1992 75,000 106 to 121 1993 80,000 122 to 130 1994 45,000 131 to 139 1995 45,000 140 to 149 1996 50,000 150 to 159 1997 50,000 160 to 171 1998 60,000 172 to 184 1999 65,000 185 to 199 2000 75,000 200 to 214 2001 75,000 215 to 230 2002 80,000 231 to 248 2003 90,000 249 to 266 2004 90,000 267 to 286 2005 100,000 The Warrants shall bear interest from their date until their respective maturities at the following per annum rates: Year of Maturity Interest Rate 1984 5.75% 1985 6.00 1986 6.50 1987 7.00 1988 7.25 1989 7.50 1990 7.75 1991 8.00 1992 8.25 1993 8.50 1994 8.70 1995 8.80 1996 9.00 1997 9.10 1998 9.20 1999 9.25 2000 9.25 2001 9.25 2002 9.25 2003 9.25 2004 9.25 2005 9.25 The said interest shall be payable semiannually on June 1 and December 1 in each year until and at the respective maturities of the Warrants and (except with respect to the Fully Registered Warrant) shall be evidenced by Coupons attached to the Warrants. The Warrants and the Coupons shall bear interest at the rate of 10% per annum after their respective maturities and shall be payable in lawful money of the United States of America at the principal office of The Merchants National Bank of Mobile, Mobile, Alabama. Interest on the Fully Registered Warrant shall be remitted, by the bank at which the Warrants are payable, by check or draft payable in lawful money of the United States of America mailed to the then registered Holder thereof at the address shown on the registry books of the City with respect to the Warrants; provided, however, that the final payment of interest on this Warrant shall only be payable upon presentation of this Warrant at the bank at which the principal of this Warrant is payable. Section 4. Optional Redemption of Callable Warrants. Those of the Warrants having stated maturities in 1994 and thereafter shall be subject to redemption and payment by the City, at its option, on June 1, 1993, and on any Interest Payment Date thereafter, at a Redemption Price with respect to each Warrant redeemed, equal to the following percentages of its face value: If the Redemption Date is in 1993, 102%; If the Redemption Date is in 1994, 101%; If the Redemption Date is in 1995 or thereafter, 100%. Any such redemption may be made as a whole or in part of the Warrants that are at the time outstanding (and if in part it shall be accomplished in the inverse numerical order of those of the Warrants at the time outstand- ing). The foregoing provisions of this Section shall be applicable to each installment of principal of the Fully Registered Warrant, which shall be subject to such redemption and prepayment at the option of the City in the inverse order or their due dates and in multiples of $5,000. Any such redemption shall be effected in the following manner: (a) Manner of Redeeming Coupon Warrants. (1) The City shall by resolution adopted by the Council call for redemption on a stated Interest Payment Date when they are by their terms subject to redemption Callable Warrants bearing stated numbers. (2) The City shall cause to be published one time in a Newspaper published in Mobile, Alabama (or, if no such Newspaper is being published in the said City at the time provided for publication, then in a Financial Journal published in New York, New York) a notice stating the numbers of the Callable Warrants so called for redemp- tion, and stating that the Callable Warrants bearing such numbers will become due and payable on a specified date (which shall be the Redemption Date fixed by the Resolu- tion referred to in paragraph (1) of this subsection (a)) at the Redemption Price (which shall be specified in the said notice), and that all interest on the Called Warrants will cease after the Redemption Date. Such notice shall be published not less than thirty days prior to the Redemp- tion Date. (3) On or prior to the Redemption Date, the City shall notify the bank at which the Warrants are payable of the City's compliance with the requirements of para- graphs (1) and (2) of this subsection (a) and shall make available at the said bank the total Redemption Price of the Called Warrants. Upon compliance with the foregoing requirements on its part contained in this subsection (a), the Called Warrants shall become due and payable on the Redemption Date and at the Redemption Price, and interest thereon shall thereafter cease. Neither the City nor the bank at which the Warrants are payable shall be required to pay any Coupon maturing on the Redemption Date which is applicable to any Called Warrant unless the Called Warrant to which such Coupon is applicable is also presented for payment; provided, that, in the event any such bank should pay any such Coupon without payment of the applicable Called Warrant it shall not be liable to the Holder of such applicable Called Warrant or to the City or to anyone whomsoever; and provided, further, that the said bank shall pay such Coupon out of the moneys supplied to it by the City for that purpose if the Holder thereof shall present evidence satisfactory to the said bank that such Holder is the owner of the Coupon so presented and is not the owner of the Called Warrant to which such Coupon is applicable. (b) Manner of Prepaying Principal Installments of the Fully Registered Warrant. The provisions of the foregoing subsection a of this Section with respect to redemption of Coupon Warrants prior to their respective maturities shall apply, with the necessary changes in detail, to the prepayment of installments (or portions of installments in multiples of $5,000) of the principal of the Fully Registered Warrant; provided, however, that (1) Any notice of redemption or prepayment shall, in lieu of stating the numbers of the Warrants to be redeemed, state the year or years of the due date or dates of the installment or installments to be prepaid and in the event that less than one installment is to be so prepaid, the portion thereof (which must be a multiple of $5,000) to be so prepaid; (2) The said notice shall be forwarded to the Holder of the Fully Registered Warrant by United States Registered Mail forwarded to the Holder not less than thirty (30) days prior to the Redemption Date; and (3) The mailing of said notice may be waived by the Holder of the Fully Registered Warrant. (c) Redemption With Consent of Holder. Any War- rant may be redeemed and prepaid by the City, with the consent of the Holder and without the necessity of compliance with any of the provisions of either of subsections (a) or (b) of this section, on any Interest Payment Date prior to maturity, at and for a Redemption Price, with respect to each Warrant redeemed, equal to the principal amount thereof plus accrued interest thereon to the date of such redemption and prepay- ment. The provisions of the foregoing sentence shall apply, with the necessary changes in detail, to the redemption by the City, with the consent of the Holder of the Fully Registered Warrant, of any installment (or portion of any installment in multiples of $5,000) of the principal of the Fully Registered Warrant. Section 5. Execution of the Warrants. The Warrants shall be executed in behalf of the City by the Mayor, shall have affixed thereto the seal of the City, and shall be attested by the signature of the City Clerk; provided that in the case of Coupon Warrants, the signature of the Mayor and the seal of the City shall be reproduced thereon in facsimile rather than being manually placed thereon. The Coupons shall be executed by a facsimile of the signature of the Mayor and shall be attested with a facsimile of the signature of the City Clerk. The facsimiles of the signatures of the Mayor and the City Clerk provided in this section to be printed or otherwise reproduced shall be valid in all respects as if the Mayor had manually signed each of the Warrants and as if the Mayor and the City Clerk had manually signed each of the Coupons. The facsimile of the official seal of the City provided in this section to be printed or otherwise reproduced shall be valid in all respects as if the official seal of the City were manually impressed on each of the Warrants. The Warrants and the Coupons shall be registered by the City Treasurer in the records maintained by her as a claim against the City, which registration shall be made simultaneously with respect to all of the Warrants and the Coupons. The said officers are hereby directed so to execute, seal, attest and register the Warrants and the Coupons. Section 6. Transfer, Registration and Exchange Provisions. (a) Fully Registered Warrant; Registration and Transfer Thereof. The City Clerk shall be the registrar and transfer agent of the City and shall keep at the office of the City Clerk proper registry and transfer books in which the City Clerk will note the registration and transfer of the Fully Registered Warrant, all in the manner and to the extent hereinafter specified. The Fully Registered Warrant shall be transferable only on the transfer books of the City. No transfer of the Fully Registered Warrant shall be valid hereunder unless it is presented at the office of the City Clerk with written power to transfer signed by the registered owner thereof in person or by duly authorized attorney, properly stamped if required, in form and with guaranty of signature satisfactory to the registrar, with such registration noted thereon by the registrar. The person in whose name the Fully Registered Warrant is registered on the books of the City shall be the sole person to whom or on whose order payments on account of the principal thereof and the interest thereon may be made. The registrar shall not be required to transfer the Fully Registered Warrant during the period of ten days next preceding any June 1 or December 1; and in the event any installment of principal of the Fully Registered Warrant is duly called for such prepayment, the registrar shall not be required to transfer such Fully Registered Warrant during the period of thirty days next preceding the date fixed for such prepayment. (b) Transfer of Coupon Warrants. Each Coupon Warrant shall be nonnegotiable but shall be transferable by assignment. Each taker, owner, purchaser or Holder of any of the Coupon Warrants shall, by receiving or accepting the said Warrant or any of the Coupons, be deemed to have consented and agreed and shall be estopped to deny: (1) that title to the Coupons may be transferred by delivery without the necessity of a written assignment, and any person making such delivery shall be deemed to have transferred to the person to whom such delivery is made all of his equities or rights in the Coupons so delivered; (2) that any person in possession of any such Coupon, regardless of the manner in which he shall have acquired possession, is authorized to represent himself as the absolute owner thereof and has the power and authority to transfer absolute title thereto by delivery thereof to a bona fide purchaser for value (present or antecedent), without notice of prior defenses or equities or claims of ownership enforceable against his transferor or any person in the chain of title and before the maturity thereof; and (3) that whenever and so long as any Coupon Warrant may be assigned in blank by written assignment by the original payee thereof or by any subsequent assignee thereof in the chain of title to whom written assignment is made, the City and each bank at which the Warrants are payable may treat any person in possession of that Coupon Warrant regardless of how such possession may have been acquired and regardless of the genuineness or effectiveness of any assignment as the absolute owner hereof for all purposes, and payment to any such person shall discharge all obligations thereunder. (c) Exchange of Fully Registered Warrant for Coupon War- rants. Upon the request of the Holder of the Fully Registered Warrant, the City shall execute and deliver, upon surrender to the City of the Fully Registered Warrant and in exchange therfor, Coupon Warrants (in the form prescribed in Section 9(b) hereof) of like tenor, having stated maturities and aggregating the same principal amount as the then unpaid installments of principal of the Fully Registered Warrant so surrendered and being subject to redemption prior to their respective stated maturities on the respective date or dates and at the respective price or prices that are applicable to the corresponding principal installments of such Fully Registered Warrant. In the event of any such surrender of the Fully Registered Warrant pursuant to the provisions of this section, it shall be accompanied by written power to transfer signed by the Holder thereof in person or by duly authorized attorney, properly stamped if required, in form and with guaranty of signature satisfactory to the registrar. Each Coupon Warrant delivered upon any exchange effected pursuant to the provisions hereof shall be accompanied by such unmatured Coupons as shall be required in order to evidence interest at the applicable rate or rates of the Fully Registered Warrant exchanged therefor and by such matured Coupons as may be necessary to evidence any interest not paid or made available for payment on the Fully Registered Warrant surrendered in exchange for such Coupon Warrant, all to the end that no gain or loss in interest shall result from any such exchange. The registrar shall not be required so to exchange the Fully Registered Warrant for Coupon Warrants during the period of ten days next preceding any June 1 or December 1 and in the the event any installment of principal of the Fully Registered Warrant shall have been duly called for such prepayment, the registrar shall not be called for such prepayment, the registrar shall not be required so to exchange such Fully Registered Warrant for Coupon Warrants during the period of thirty days next preceding the date fixed for such prepayment. Section 7. General Obligation. The indebtedness evidenced and ordered paid by the Warrants is and shall be a general obligation of the City for payment of the principal of and the interest on which the full faith and credit of the City are hereby irrevocably pledged. Section 8. The Warrant Fund. There is hereby created a special fund of the City the full name of which shall be the "Fairhope 1983 General Obligation Warrant Fund" which is so created for the purpose of providing for payment of the Warrants and the Coupons and shall be maintained so long as any thereof remain unpaid. The City agrees that it will make or cause to be made the following payments into the Warrant Fund at the respective times hereunder stated: (a) There shall be paid into the Warrant Fund, contemporaneously with the issuance of the Warrants and out of the proceeds derived from the sale thereof, that portion of the said proceeds that may be referable to the accrued interest received by the City from such sale and to any premium received by the City; (b) On or before the 25th day of July, 1983, and on or before the 25th day of each successive month thereafter until and including the month of November, 1983, the City will pay or cause to be paid into the Warrant Fund the sum of (a) one -tenth (1/10) of the principal maturing with respect to the Warrants on June 1, 1984 plus (b) one -fifth (1/5) of the interest maturing with respect to the Warrants on December 1, 1983; provided that there shall be credited against the amounts required to be paid into the Warrant Fund pursuant to this subsection (b), the amount which the City is required to pay into the Warrant Fund pursuant to subsection (a) above; (c) On or before the 25th day of December, 1983, and on or before the 25th day of each successive month thereafter so long as any of the Warrants or the Coupons remain unpaid, the City will pay or cause to be paid into the Warrant Fund such amount as, when added to the amount then in the Warrant Fund that is not needed to pay any Warrants or Coupons theretofore matured but not then paid, will equal the sum of (a) one -twelfth (1/12) of the principal maturing with respect to the Warrants on the next ensuing June 1 plus (b) one- sixth (1/6) of the interest maturing with respect to the Warrants on the then next ensuing Interest Payment Date. The moneys required in this section to be paid into the Warrant Fund shall be used only for payment of the principal of and interest on the Warrants at the respective maturities of such principal and interest; provided that if at the final maturity of the Warrants, however the same may mature, there shall be in the Warrant Fund moneys in excess of the amount required to retire the Warrants and the Coupons then remaining unpaid, then all such excess shall thereupon be returned to the City and may be used by it for any lawful purpose. When the amount of money on deposit in the Warrant Fund equals or exceeds the aggregate of the principal and interest to their respective maturities on the Warrants at the time outstanding, no further payments need be made into the Warrant Fund except to make good the moneys paid therein which may become lost or which may not be immedi- ately available for withdrawal under the provisions of this section. Pending the application of the moneys on deposit in the Warrant Fund for the purpose for which such Fund is herein created, the City may cause any moneys on deposit therein to be invested in any investments in which the City is authorized by law to invest its funds. The Merchants National Bank of Mobile in Mobile, Alabama, is hereby designated as the depository for the Warrant Fund. In the event that the said bank (or any successor depository for the Warrant Fund that may hereafter be designated as herein provided) should at any time decline to act as such depository, or should resign as such depository, or should cease to be a member of the Federal Deposit Insurance Corporation (or any agency which may succeed to its duties), or should cease to be duly qualified and doing business within the State of Alabama, then the Council shall by resolution designate a successor to such depository; provided that any such successor depository shall be and remain a member of the Federal Deposit Insurance Corporation (or of any agency which may succeed to its duties) and shall be and remain duly qualified and doing business in the State of Alabama. The depository for the Warrant Fund shall at all times keep the moneys on deposit with it in the Warrant Fund continuously secured, for the benefit of the City and the Holders of the Warrants, either (1) by holding on deposit, as collateral security, United States Securities or other marketable securities eligible as security for the deposit of trust funds, having a market value (exclusive of accrued interest) not less than the amount of moneys on deposit in the Warrant Fund, or (2) if the furnishing of security in the manner provided in this paragraph is not permitted by the applicable law and regulations, then in such manner as may be required or permitted by the applicable state and federal laws and regulations respecting the security for, or granting a preference in the case of, the deposit of trust funds; provided that it shall not be necessary for the depository to secure any portion of the moneys on deposit in the Warrant Fund that is insured by the Federal Deposit Insurance Corporation or other agency of the United States of America that may succeed to its functions or that is invested in United States Securities. Section 9. Forms of the Warrants and the Coupons. The Warrants shall be in substantially the forms specified in this Section. (a) Form of Fully Registered Warrant. The Fully Regis- tered Warrant, the form thereof and the form of the Certificate of Registration shall be substantially as follows, with such insertions, omissions and other variations as may be necessary to conform to the provisions hereof. $1,430,000 (Form of Fully Registered Warrant) UNITED STATES OF AMERICA STATE OF ALABAMA CITY OF FAIRHOPE GENERAL OBLIGATION WARRANT $1,430,000 The City Treasurer of the City of Fairhope, a municipal corporation under the laws of Alabama (herein called "the City"), will pay to , or registered assigns, the aggregate principal sum of One Million Four Hundred Thirty Thousand Dollars in installments on June 1 in the following respective years and principal amounts: Year Amount 1984 $ 35,000 1985 40,000 1986 40,000 1987 65,000 1988 65,000 1989 65,000 1990 70,000 1991 70,000 1992 75,000 1993 80,000 1994 45,000 1995 45,000 1996 50,000 1997 50,000 1998 60,000 1999 65,000 2000 75,000 2001 75,000 2002 80,000 2003 90,000 2004 , 90,000 2005 100,000 with interest on the then unpaid principal balance hereof from the date hereof at the following per annum rates, payable on December 1, 1983, and thereafter semiannually on each June 1 and December 1 until the due date of the last maturing installment of principal hereof: 5.75% on the installment of principal maturing in 1984; 6.00% on the installment of principal maturing in 1985; 6.50% on the installment of principal maturing in 1986; 7.00% on the installment of principal maturing in 1987; 7.25% on the installment of principal maturing in 1988; 7.50% on the installment of principal maturing in 1989; 7.75% on the installment of principal maturing in 1990; 8.00% on the installment of principal maturing in 1991; 8.25% on the installment of principal maturing in 1992; 8.50% on the installment of principal maturing in 1993; 8.70% on the installment of principal maturing in 1994; 8.80% on the installment of principal maturing in 1995; 9.00% on the installment of principal maturing in 1996; 9.10% on the installment of principal maturing in 1997; 9.20% on the installment of principal maturing in 1998; and 9.25% on the installments of principal maturing in 1999 through 2005. The principal of this Warrant is payable in lawful money of the United States of America at the principal office of The Merchants National Bank of Mobile, Mobile, Alabama. Interest on this Warrant shall be remitted by the bank at which the principal of this Warrant is payable by check or draft mailed to the registered holder hereof at the address shown on the registration books of the City pertaining to this Warrant; provided, however, that the final payment of interest on this Warrant shall only be payable upon presentation of this Warrant at the bank at which the principal of this Warrant is payable. All installments of the principal of and the interest on this Warrant shall bear interest after their respective due dates until paid at the rate of 10% per annum. This Warrant evidences a duly authorized issue of warrants designated General Obligation Warrants aggregating $1,430,000 in principal amount (herein called "the Warrants"). This Warrant is issued pursuant to the applicable provisions of the constitution and laws of Alabama, including particularly Sections 11-47-2 and 11-81-4 of the Code of Alabama, 1975, and an ordinance of the City duly adopted by the governing body of the City. Each principal installment hereof having a stated maturity in 1994 or thereafter is subject to prepayment, prior to the stated maturity of such installment, at the option of the City, on June 1, 1993, and on any interest payment date thereafter, at the following respective redemption prices for each installment of principal redeemed (expressed in percentages of the principal amount thereof) plus accrued interest thereon to the date fixed for redemption: 102% if the date fixed for redemption is in 1993; 101% if the date fixed for redemption is in 1994; and 100% if the date fixed for redemption is in 1995 or thereafter; provided, that (i) if less than all then outstanding annual installments shall be so prepaid, then the said annual installments shall be prepaid in the inverse order of their maturities, (ii) each such installment may be so prepaid either in whole or in part of such installment and, if so prepaid in part, then in multiples of $5,000; and provided, further, that notice of such prepayment must be given by United States Registered Mail forwarded to the holder of this Warrant. By the execution of this Warrant, the City acknowledges that it is indebted to the payee hereof in the principal amount hereof. The indebtedness evidenced and ordered paid by this Warrant is a general obligation of the City for the payment of the principal of and interest on which the full faith and credit of the City have been irrevocably pledged. It is hereby certified and recited that the indebtedness evi- denced and ordered paid by this Warrant is lawfully due without condition, abatement or offset of any description; that this Warrant has been register- ed in the manner provided by law; that all conditions, actions and things required by the constitution and laws of the State of Alabama to exist, be performed or happen precedent to and in the issuance of this Warrant do exist, have been performed and have happened; and that the indebtedness evidenced and ordered paid by this Warrant, together with all other indebtedness of the City, was at the time the same was created and is now within every debt and other limit prescribed by the constitution and laws of the State of Alabama. This Warrant is transferable by the registered holder hereof, in person or by authorized attorney, only on the books of the City Clerk of the City, the registrar and transfer agent of the City, with the name of the transferee and new registered holder hereof noted hereon. The said registrar and transfer agent shall not be required either to transfer or to exchange this Warrant during the period of ten days next preceding any June 1 or December 1; and, in the event that any installment of principal hereof is duly called for such payment, the said registrar and transfer agent shall not be required either to transfer or exchange this fully registered warrant during the period of thirty days next preceding the date fixed for such prepayment. Provision is made in the ordinance authorizing the Warrants for the exchange of this Warrant for coupon warrants in the denomination of $5,000 each payable to a designated payee, or his assigns, in an aggregate principal amount equal to the then unpaid principal amount of this Warrant, all as requested by the holder surrendering this Warrant and upon the terms and conditions specified in said ordinance. IN WITNESS WHEREOF, the City has caused this Warrant to be executed in its name and behalf by its Mayor, has caused its corporate seal to be hereunto affixed, has caused this Warrant to be attested with the signature of its City Clerk, and has caused this Warrant to be dated June 1, 1983. Attest: Its City Clerk CITY OF FAIRHOPE By Its Mayor (Form of Registration) (No writing on this warrant except by registrar) Date of Registration Registered Owner Registrar (b) Form of Coupon Warrants and Coupons. The Warrants issued in coupon form and the coupons shall be in substantially the following forms, respectively, with such insertions, omissions and other variations as may be necessary to conform to the provisions hereof: IM UNITED STATES OF AMERICA STATE OF ALABAMA CITY OF FAIRHOPE GENERAL OBLIGATION WARRANT $5,000 The City Treasurer of the City of Fairhope (the "City"), a municipal corporation in the State of Alabama, is hereby ordered and directed to pay to , or assigns, the principal sum of FIVE THOUSAND DOLLARS on the 1st day of June, 19_, with interest thereon from the date hereof until the maturity hereof at the rate of % per annum, payable semiannually on June 1 and December 1 in each year upon surrender of the appropriate interest coupons hereto attached as the same respectively become due. This warrant and the interest coupons applicable hereto shall bear interest at the rate of 10% per annum after their respective maturities and shall be payable in lawful money of the United States of America at the principal office of The Merchants National Bank of Mobile, Mobile, Alabama. This warrant is one of an issue of warrants (the "Warrants") aggregating $1,430,000 in principal amount, numbered from 1 to 286, inclusive, issued pursuant to the applicable provisions of the constitution and laws of Alabama, including particularly Sections 11-47-2 and 11-81-4, as amended, of the Code of Alabama of 1975, and an ordinance duly adopted by the governing body of the City. Those of the Warrants having stated maturities in 1994 and thereafter are subject to redemption and payment prior to maturity, at the option of the City, as a whole or in part and if in part then in inverse numerical order of those of the Warrants at the time outstanding, on any interest payment date on or after June 1, 1993, at the following respective redemption prices for each Warrant redeemed (expressed in percentages of the principal amount thereof) plus accrued interest thereon to the date fixed for redemption: 102% if the date fixed for redemption is in 1993; 101% if the date fixed for redemption is in 1994; and 100% if the date fixed for redemption is in 1995 or thereafter. Prior notice of each such redemption must be given one time, at least thirty days before the date fixed for redemption, by publication in a newspaper published in Mobile, Alabama (or, in certain instances, in a financial journal published in New York, New York). By the execution of this Warrant the City acknowledges that it is indebted to the payee hereof in the principal amount hereof and that it will become indebted to the holders of the interest coupons attached hereto at the respective maturities thereof and in accordance with the terms thereof. The indebtedness evidenced and ordered paid by this Warrant is a general obligation of the City for the payment of the principal of and interest on which the full faith and credit of the City have been irrevocably pledged. It is hereby certified and recited that the indebtedness evi- denced and ordered paid by this Warrant is lawfully due without condition, abatement or offset of any description; that this Warrant has been regis- tered in the manner provided by law; that all conditions, actions and things required by the constitution and laws of the State of Alabama to exist, be performed or happen precedent to or in the issuance of this Warrant exist, have been performed and have happened; and that the indebtedness evi- denced and ordered paid by this Warrant, together with all other indebted- ness of the City, was at the time the same was created and is now within every debt and other limit prescribed by the constitution and laws of the State of Alabama. This Warrant is nonnegotiable but is transferable by assign- ment. Each taker, owner, purchaser or holder hereof, by receiving or accepting this Warrant or any interest coupons applicable hereto, shall consent and agree and shall be estopped to deny: (1) that title to the coupons hereunto appertaining may be transferred by delivery without the necessity of a written assignment, and any person making such delivery shall be deemed to have transferred to the person to whom such delivery is made all of his equities or rights in the coupons so delivered; (2) that any person in possession of any such coupon, regardless of the manner in which he shall have acquired possession, is authorized to represent himself as the absolute owner thereof and has the power and authority to transfer absolute title thereto by delivery thereof to a bona fide purchaser for value (present or antecedent) without notice of prior defenses or equities or claims of ownership enforceable against his transferor or any person in the chain of title and before the maturity thereof; and (3) that whenever and so long as this Warrant may be assigned in blank by written assignment by the original payee hereof or by any subsequent assignee hereof in the chain of title to whom written assignment is made, the City may treat any person in possession of this Warrant, regardless of how such possession may have been acquired and regardless of the genuineness or effectiveness of any assign- ment, as the absolute owner hereof for all purposes, and payment to any such person shall discharge all obligations hereunder. IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed hereon by printing or otherwise reproducing the same hereon in facsimile, has caused this Warrant to be executed by its Mayor by causing his signature to be printed or otherwise reproduced hereon in facsimile, has caused the said seal and the said execution to be attested by its City Clerk by manually subscribing her signature hereon, has caused the annexed interest coupons to be executed and attested with the signatures of the said officers printed or otherwise reproduced thereon in facsimile, and has caused this Warrant to be dated June 1, 1983. CITY OF FAIRHOPE By Its Mayor Attest: City Clerk (Form of Coupon) Coupon No. On the 1st day of , 19_, the City Treasurer of the City of Fairhope, in the State of Alabama, is ordered and directed to pay the bearer hereof the sum of Dollars in lawful money of the United States of America upon presentation and surrender of this coupon at the principal office of The Merchants National Bank of Mobile, Mobile, Alabama, being six months' interest then due on the General Obligation Warrant of the City of Fairhope, Alabama, dated June 1, 1983, and numbered Attest: City Clerk M CITY OF FAIRHOPE Its Mayor (Form of Assignment) For value received, this Warrant and the interest coupons applicable thereto and the indebtedness evidenced and ordered paid thereby are hereby transferred and assigned, without recourse or warranties, to Following the maturity of each of the Callable Warrants there shall be inserted the following: "(unless this warrant shall have been duly called for prior payment)," Following the maturity date of each Coupon due on and after December 1, 1993, there shall be inserted the following: "(unless the warrant to which this coupon is applicable shall have been duly called for prior payment)," Section 10. Provision for Payment at Par. The bank at which the Warrants and the Coupons shall at any time be payable, by acceptance of its duties as paying agent therefor, shall be construed to have agreed thereby with the Holders of the Warrants and the Coupons that it will make, out of the funds supplied to it for that purpose, all remittances of principal of and interest on the Warrants and the Coupons in bankable funds at par and without deduction for exchange, fees or expenses. The City agrees with the Holders of the Warrants and the Coupons that it will pay all charges for exchange, fees or expenses which may be made by the said bank in the making of remittances in bankable funds of the principal of and interest on any of the Warrants and the Coupons. Section 11. Call for Redemption of Series 1982 Warrants. The City hereby calls for redemption on December 1, 1983, all of the outstand- ing Series 1982 Warrants, numbered from 1 to 200, inclusive. Central Bank, N.A., in the City of Fairhope, Alabama, as the paying agent for the Series 1982 Warrants, is authorized and directed to effect the redemption, on December 1, 1983, of the Series 1983 Warrants, in the manner provided in Section 4 of Ordinance 698 of the City adopted by the Council on June 10, 1982 pursuant to which the Series 1982 Warrants were authorized to be issued. Section 12. Sale of the Warrants. The Warrants are hereby sold to The Frazer Lanier Company, Incorporated, for a purchase price equal to their face value ($1,430,000), plus accrued interest on the Warrants from their date to the date of delivery. The Warrants shall be made payable to Fralan & Co., the nominee of the said purchaser for that purpose, in accordance with directions given by the said purchaser, and shall be initially delivered in the form of the Fully Registered Warrant. The City Clerk is hereby authorized and directed to deliver the Fully Registered Warrant, to the said purchaser upon payment to the City of the said purchase price. Section 13. Use of Proceeds From Sale of the Warrants. The proceeds from the sale of the Warrants shall be applied as follows: la) That part of the said proceeds which represents accrued interest on the Warrants from June 1, 1983, to the date of payment therefor shall be deposited in the Warrant Fund and applied toward payment of the interest that will become payable on the Warrants on December 1, 1983; (b) The proceeds derived from the sale of those of the Warrants numbered 12 to 215, inclusive, shall be applied to the payment on December 1, 1983, of the principal of and the redemption premium on the Series 1982 Warrants, and pending the application of the said proceeds for such purpose shall be deposited in a special sinking fund of the City created for the payment of the Series 1982 Warrants; (c) The proceeds derived from the sale of those of the Warrants numbered 216 to 286, inclusive, and $2,000 of the proceeds derived from the sale of that one of the Warrants numbered 11, shall be applied to the payment of the principal of the 1982 Note; and (d) The proceeds derived from the sale of those of the Warrants numbered 1 to 10, inclusive, and $3,000 of the proceeds derived from the sale of that one of the Warrants numbered 11, shall be applied to the payment of the expenses incurred by the City in connection with the issuance of the Warrants. Section 14. Approval of Official Statement. The Council hereby approves and adopts that certain Official Statement respecting the Warrants, in substantially the form submitted to the Council, a copy of which, marked Exhibit II, is attached to the minutes of the meeting of the Board at which this ordinance is adopted. The said Exhibit II is hereby made a part of this ordinance in all respects as if set forth herein. In evidence of the approval by the Board of the said Official Statement in generally the form herein approved, the Mayor is hereby authorized and directed to manually sign the said Official Statement, with such changes therein and additions thereto as shall be necessary to conform to the provisions of this ordinance authorizing the Warrants, and such other changes and additions as the Mayor shall deem necessary or appropriate. Section 15. Provisions of Ordinance Severable. The various provisions of this ordinance are hereby declared to be severable. In the event any provisions hereof shall be held invalid by a court of competent jurisdiction such invalidity shall not affect any other portion of this ordinance. ADOPTED this 29th day of June, 1983. Mayor Attest: City Clerk