HomeMy WebLinkAboutO-1333ORDINANCE NO. 1333
AN ORDINANCE TO PROVIDE FOR THE
ISSUANCE OF $7,900,000 PRINCIPAL AMOUNT
OF GENERAL OBLIGATION WARRANTS
OF THE CITY OF FAIRHOPE, ALABAMA
BE IT ORDAINED by the City Council of the CITY OF FAIRHOPE in the State of
Alabama as follows:
Section 1. Definitions and Use of Phrases.
(a) Definitions. The following words and phrases and others evidently
intended as the equivalent thereof shall, in the absence of clear implication herein
otherwise, be given the following respective interpretations as used herein:
"Authorized Denominations" means the sum of $5,000 or any integral multiple thereof.
"Bank" means Regions Bank, Mobile, Alabama, in its capacity as registrar, transfer
agent and paying agent with respect to the Warrants.
"Business Day" means a day that the Bank is open for business.
"Callable Warrants" means those of the Warrants having stated maturities in 2017 and
thereafter.
"City" means the municipal corporation of Fairhope in the State of Alabama and
includes its successors and assigns and any municipal corporation resulting from or
surviving any consolidation or merger to which it or its successors may be a party.
"City Clerk" means the city clerk of the City.
"Code" means the Internal Revenue Code of 1986, as amended.
"Council" means the governing body of the City as from time to time constituted.
"Eligible Certificate" means an interest -bearing certificate of deposit issued by the Bank
or any bank, savings and loan association or trust company organized under the laws of
the United States of America or any state thereof that is (to the extent not insured by the
Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance
Corporation) collaterally secured by a pledge of United States Securities (a) having at
any date of calculation a market value (taking account of any accrued interest thereon)
not less than the principal of and the accrued interest on the certificates of deposit
secured thereby,
Ordinance No. 1333
Page —2-
(b) deposited and pledged with any Federal Reserve Bank or with any bank or trust
company organized under the laws of the United States or any state thereof, and having
combined capital and surplus and undivided profits of not less than $15,000,000, and (c)
for which a receipt signed by the bank or trust company having custody of such
collateral securities and containing a sufficient description thereof has been furnished to
the Bank.
"Eligible Investments" means (a) United States Securities, (b) Eligible Certificates, (c)
bank deposits fully insured by the Federal Deposit Insurance Corporation, and (d)
interests in such investment trusts as may be permitted by the provisions of Section 1I-
81-21, as amended, of the Code of Alabama of 1975.
"Financial Guaranty Insurance PolicX" means such policy issued by XLCA insuring the
payment when due of the principal of and interest on the Warrants as provided therein.
"Fiscal Year" means a fiscal year of the City, being the period beginning on October 1
of each calendar year and ending on September 30 of the then next ensuing calendar
year.
"Holder" means the person in whose name a Warrant is registered on the registry books
of the Bank pertaining to the Warrants.
"Interest Payment Date" means each June 1 and December 1, commencing December 1,
2007.
"Mayor" means the mayor of the City.
"Overdue Interest" means interest due but not paid on the Interest Payment Date on
which such interest is required to be paid.
"Overdue Interest Payment Date" means the date fixed by the Bank, pursuant to the
provisions of Section 13 hereof, for the payment of Overdue Interest.
"Record Date" means each May 15 or November 15, as the case may be, next preceding
an Interest Payment Date.
"Redemption Date" means the date fixed for redemption of any of the Callable Warrants
in a Resolution adopted pursuant to the provisions of Section 4 hereof or the date on
which any of the Warrants is subject to mandatory redemption pursuant to the
provisions of Section 4 hereof.
"Redemption Price" means the price at which the Callable Warrants may be redeemed.
"Resolution" and "Ordinance" mean, respectively, a resolution or ordinance adopted by
the Council.
"Term Warrants Due 2032" means those of the Warrants having a stated maturity in
2032.
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Ordinance No. 1333
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"United States Securities" means any securities that are direct obligations of the United
States of America and any securities with respect to which payment of the principal
thereof and the interest thereon is unconditionally guaranteed by the said United States.
"Warrants," without other qualifying words, means the General Obligation Warrants
herein authorized.
"XLCA" means XL Capital Assurance Inc., a New York stock insurance company.
(b) Use of Words and Phrases. The following words and phrases, where used in this
Ordinance, shall be given the following and respective interpretations:
The words "herein," "hereby," "hereunder," "hereof," and other equivalent words refer
to this Ordinance as an entirety and not solely to the particular portion hereof in which
any such word is used.
The definitions set forth in Section 1(a) hereof shall be deemed applicable whether the
words defined are herein used in the singular or the plural.
Wherever used herein any pronoun or pronouns shall be deemed to include both
singular and plural and to cover all genders.
Section 2. Findings. The Council has ascertained and does hereby find and declare that
the following facts are true and correct:
(a) it is necessary, desirable and in the public interest that the City refund and pay
on a current basis its outstanding promissory note, issued to provide for municipal
library improvements in the principal amount of $1,500,000 and dated March 17, 2006,
payable to Regions Bank (the "Note");
(b) it is necessary-, desirable and in the public interest that this City borrow on a
permanent basis moneys necessary to reimburse the City in the amount of $1,200,000 as
a portion of the costs previously incurred by the City in repairing hurricane damage to
the City's municipal pier;
(c) it is necessary, desirable and in the public interest that the City acquire, provide
and construct various municipal improvements (consisting principally of improvements
to the City's museum, improvements and repairs to various City -owned public
buildings, and the acquisition and construction of a City recreation center, municipal
swimming pool and baseball and other athletic fields) expected to cost in the aggregate
not less than approximately $5,010,000; and
(d) it is necessary, desirable and in the public interest that the warrants hereinafter
authorized be issued for the purpose of providing moneys necessary for the refunding
and the said improvements and for paying the expenses of issuing the Warrants,
including the cost of the Financial Guaranty Insurance Policy.
Section 3. Authorization of the Warrants.
Ordinance No. 1333
Page —4-
(a) Principal Maturities and Interest Rates. Pursuant to the applicable provisions of
the constitution and laws of Alabama, including
particularly Section 11-47-2 of the
Code of Alabama of 1975, as amended, and for the purposes hereinabove stated, there
are hereby authorized to be issued by the
City $7,900,000 aggregate principal amount of
General Obligation Warrants of the City.
The Warrants shall
be issued as fully
registered warrants without coupons, shall
be dated June 1, 2007, shall mature and
become payable on June 1, as follows, and
in the amounts and shall bear interest at the
per annum rates of interest as follows:
Principal
Year of
Amount
Interest
Maturity
Maturing
Rate
2008
$ 180,000
4.00 %
2009
190,000
4.00
2010
195,000
4.00
2011
205,000
4.00
2012
210,000
4.00
2013
220,000
4.00
2014
230,000
5.00
2015
240,000
5.00
2016
255,000
5.00
2017
265,000
5.00
2018
280,000
4.125
2019
290,000
4.125
2020
300,000
4.25
2021
315,000
4.25
2022
330,000
4.30
2023
340,000
4.375
2024
360,000
4.375
2025
375,000
4.375
2026
390,000
4.50
2027
405,000
4.50
2032
2,325,000
4.50
The Warrants shall be initially issued in the Authorized Denominations and registered
in the names of the Holders as shall, pursuant to the provisions of Section 19 hereof, be
designated by the purchaser.
(b) Payment of Principal. The principal of and the premium, if any, on the Warrants
shall be payable at such corporate trust office as shall be so designated by the Bank for
such purpose upon presentation and surrender of the Warrants as the same become due
and payable. Except as provided in Section 13 hereof, interest on the Warrants shall be
payable by check or draft mailed by the Bank to the registered Holders of the Warrants
at the addresses shown on the registry books of the Bank pertaining to the Warrants as
of the close of business on the Record Date next preceding the Interest Payment Date.
Payment of such interest shall be deemed to have been timely made if such check or
draft is mailed by the Bank on the due date of such interest (or, if such due date is not a
Business Day, on the Business Day immediately following such due date).
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Ordinance No. 1333
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Notwithstanding the foregoing, the registered Holder of not less than $500,000 in
aggregate principal amount of the Warrants may make arrangements with the Bank for
the payment of the principal of and the interest and premium, if any, on such Warrants
by wire transfer. The Bank shall cause all payments of the principal of and the interest
and premium, if any, on the Warrants to be accompanied by CUSIP numbers with
appropriate dollar amounts for each CUSIP number.
(c)Computation of Interest and Method of Payment. The Warrants shall bear interest
from their date until their respective maturities at the per annum rates of interest set
forth above (computed on the basis of a 360-day year of twelve consecutive 30-day
months). Such interest shall be payable semiannually on each June 1 and December 1,
commencing December 1, 2007, until and at the maturity of the Warrants. Interest on
the Warrants shall be payable in lawful money of the United States of America by
check or draft mailed by the Bank to the lawful Holders of the Warrants at the address
shown on the registry books of the Bank pertaining to the Warrants. The Warrants shall
bear interest after their respective maturities until paid at the rate of 8% per annum.
(d) Book -Entry Only System. The Warrants shall be initially issued in book -entry
only form, registered in the name of Cede & Co., the nominee of the Depository Trust
company. The provisions of this Section 3(d) shall apply with respect to any Warrant
registered to CEDE & CO. or any other nominee of The Depository Trust Company
("DTC") while the Book -Entry Only System is in effect and shall, during the period of
their application, supersede any contrary provisions of this Ordinance.
(i) The Warrants shall be issued as one fully registered warrant
for each maturity in the total principal amount of such maturity. On
the date of the initial authentication and delivery of the Warrants, the
Warrants shall be registered in the name of CEDE & CO., as
nominee of DTC as the Owner of all the Warrants. With respect to
Warrants registered in the name of CEDE & CO., as nominee of
DTC, the County and the Bank shall have no responsibility or
obligation to any Participant (which means securities brokers and
dealers, banks, trust companies, clearing corporations and various
other entities, some of whom, or their representatives, own DTC) or
to any Beneficial Owner (which means, when used with reference to
the Book -Entry Only System, the person who is considered the
beneficial owner thereof pursuant to the arrangements for book entry
determination of ownership applicable to DTC) with respect to the
following: (1) the accuracy of the records of DTC, CEDE & CO. or
any participant with respect to any ownership interest in the
Warrants, (2) the delivery to any Participant, any Beneficial Owner
or any other person, other than DTC, of any notice with respect to the
Warrants, including any notice of redemption, or (3) the payment to
any Participant, or any Beneficial Owner or any other person, other
than DTC, of any amount with respect to the principal or purchase
price of or premium, if any, or interest on the Warrants. The Bank
shall pay all principal of and premium, if any, or interest on the
Warrants only to or upon the order of DTC, and all such payments
shall be valid and effective fully to satisfy and discharge the County's
obligations with respect to the principal of and premium, if any, and
interest on such Warrants to the extent of the sum so paid. No person
other than DTC shall receive a Warrant. Upon delivery by DTC to
5
the Bank of written notice to the effect that DTC has determined to
substitute a new nominee in place of CEDE & CO., the words
"CEDE & CO." in this Section 3(d) shall refer to such new nominee
of DTC.
(ii) Upon receipt by the Bank of written notice from DTC to the
effect that DTC is unable or unwilling to discharge its responsibilities
hereunder, the Bank shall issue, transfer and exchange Warrants as
requested by DTC in Authorized Denominations, and whenever DTC
requests the Bank to do so, the Bank will cooperate with DTC in
taking appropriate action after reasonable notice to arrange for a
substitute bond depository willing and able upon reasonable and
customary terms to maintain custody of the Warrants registered in
whatever name or names the Owners transferring or exchanging such
Warrants shall designate, in accordance with this Section 3(d).
(iii) In the event the City determines that it is in the best interests
of the Beneficial Owners that they be able to obtain Warrants
registered in the name of an Owner other than DTC, the County may
so notify DTC and the Bank, whereupon DTC will notify the
Participants, of the availability through DTC of such Warrants. In
such event, upon the return by DTC of all Warrants held by DTC in
the name of Cede & Co., the Bank shall issue, transfer and exchange
Warrants in Authorized Denominations as requested by DTC, and
whenever DTC requests the County and the Bank to do so, the Bank
and the County will cooperate with DTC in taking appropriate action
after reasonable notice to make available Warrants registered in
whatever name or names the Beneficial Owners transferring or
exchanging Warrants shall designate, in accordance with this Section
3 (d).
(iv) Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Warrant is registered in the name of CEDE
& CO., as nominee of DTC, all payments with respect to the
principal of and premium, if any, and interest on such Warrant and
all notices with respect to such Warrant shall be made and given,
respectively, to DTC as provided in their Letter of Representations.
(v) In the event that the Book -Entry Only System pursuant to this
Section 3(d) is discontinued, the Beneficial Owners shall be
registered on the Registry Books as the Owners of the Warrants.
Subsequent to the discontinuation of the Book -Entry Only System,
Warrants may be registered, transferred and exchanged in accordance
with the provisions of this Ordinance (other than this Section 3(d)).
Section 4. Redemption Provisions.
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Ordinance No. 1333
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(a) Optional. Those of the Warrants having stated maturities on June 1, 2017, and
thereafter shall be subject to redemption and prepayment prior to their respective
maturities, at the option of the City, as a whole or in part, (but if in part, those maturities
to be redeemed to be selected by the City at its discretion), on June 1, 2016, and on any
date thereafter, at and for a Redemption Price equal to the principal amount redeemed
plus accrued interest thereon to the Redemption Date. In the event that less than all the
principal of the Warrants of a single maturity is redeemed and prepaid, the Bank shall,
at random, determine that portion of the principal of the Warrants of such maturity to be
redeemed and prepaid.
(b) Mandatory. The Term Warrants Due 2032 shall be subject to redemption and
prepayment prior to their maturity on June 1 in each of the following years and in the
following principal amounts at and for a Redemption Price equal to the principal
amount thereof plus accrued interest thereon to the Redemption Date:
Principal
Amount
Years
to be
June 1
Redeemed
2028
$ 425,000
2029
445,000
2030
465,000
2031
485,000
2032
505,000 (maturity)
In the event that, pursuant to the provisions of Section 4(a) hereof, the City shall have
partially redeemed Term Warrants Due 2032 or shall have provided for a partial
redemption of Term Warrants Due 2032 in such a manner that, under the provisions of
Section 24 hereof, the Term Warrants Due 2032 for the redemption of which provision
is made are considered as fully paid, the City may, by written notice to the Bank, elect
to apply all or any part (but only in integral multiples of $5,000) of the principal amount
of such Term Warrants Due 2032 so redeemed or to be redeemed to the reduction of the
principal amount of Term Warrants Due 2032 required to be redeemed pursuant to the
provisions of this Section 4(b) on any June 1 coterminous with or subsequent to the date
such optional redemption actually occurs. Such notice shall be deemed effective only if
it is given prior to the giving of notice of redemption contrary to the provisions of such
notice pursuant to the provisions of Section 4(c).
(c) Manner. Any such redemption or prepayment of the Warrants shall be effected
in the following manner:
(i) Call. The City shall by Resolution call for redemption and
prepayment on a stated Interest Payment Date when they are by their
terms subject to redemption Warrants (or principal portions thereof) and
shall recite in said Resolution (i) that the City is not in default in the
payment of the principal of or interest on any of the Warrants or (ii) that
all of the Warrants then outstanding are to be retired on the Redemption
Date; provided, however, that it shall not be necessary for the City to
adopt a Resolution with respect to any mandatory redemption under the
provisions of paragraph (b) of this Section 4.
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Ordinance No. 1333
Page —8-
(ii) Notice. Not more than sixty (60) nor less than thirty (30) days
prior to the Redemption Date, the City shall give, or cause to be given,
written notice of such redemption and prepayment by United States
Registered Mail or United States Certified Mail to the Holders of each of
the Warrants the principal of which is, in whole or in part, to be
redeemed and prepaid, stating the following: that the Warrants (or
principal portions thereof) have been called for redemption and will
become due and payable at the Redemption Price, on a specified
Redemption Date and that all interest thereon will cease after the
Redemption Date. The Holders of any of the Warrants may waive the
requirements of this subsection with respect to the Warrants held by
them without affecting the validity of the call for redemption of any
other Warrants.
(Ili) Payment of Redemption Price. The City shall make available at
the Bank, on or prior to the Redemption Date, the total Redemption Price
of the Warrants (or portions thereof) that are to be prepaid and redeemed
on the Redemption Date.
Upon compliance with the foregoing requirements on its part contained in this
subsection, and if the City is not on the Redemption Date in default in the payment of
the principal of or interest on any of the Warrants, the Warrants (or principal portions
thereof) called for redemption shall become due and payable at the Redemption Price
on the Redemption Date specified in such notice, anything herein or in the Warrants to
the contrary notwithstanding, and the Holders thereof shall then and there surrender
them for redemption; provided, however, that in the event that less than all of the
outstanding principal of any Warrant is to be redeemed, the registered Holder thereof
shall surrender the Warrant that is to be prepaid in part to the Bank in exchange, without
expense to the Holder, for a new Warrant of like tenor except in a principal amount
equal to the unredeemed portion of the Warrant. All future interest on the Warrants (or
principal portions thereof) so called for redemption shall cease to accrue after the
Redemption Date. Out of the moneys so deposited with it, the Bank shall make
provision for payment of the Warrants (or principal portions thereof) so called for
redemption at the Redemption Price and on the Redemption Date.
Section 5. 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 6. Warrant Fund.
(a) Payments Therein and Use and Continuance Thereof. There is hereby created a
special fund to be designated the "City of Fairhope 2007 Warrant Fund," for the purpose
of providing for the payment of the principal of and interest on the Warrants, at the
respective maturities of said principal and interest, which special fund shall be
maintained until the principal of and interest on the Warrants have been paid in full.
Payments into the Warrant Fund shall be made as follows:
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Ordinance No. 1333
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(i) there shall be paid into the Warrant Fund, simultaneously with
the issuance of the Warrants and out of the proceeds derived from the
sale thereof, that portion of said proceeds which may be referable to the
accrued interest and any premium received by the City on any such sale;
and
(ii) on or before the 25th day of November, 2007, and on or before
the 25th day of each May and November thereafter until the principal of
and interest on the Warrants shall have been paid in full, the City will
pay into the Warrant Fund such amount as, when added to the amount
then in the Warrant Fund that is not needed to pay any principal or
interest theretofore matured but not then paid, will equal the sum of the
interest that will mature on the Warrants on the then next succeeding
Interest Payment Date, plus the principal, if any, that will mature (or will
be subject to mandatory redemption) on the Warrants on the then next
succeeding Interest Payment Date; provided, that there shall be credited
one time on the amount required by this paragraph (ii) to be paid into the
Warrant Fund an amount equal to the amount paid therein pursuant to the
provisions of paragraph (i) hereof. The City will make the payments
provided for in this paragraph (ii) out of all general revenues of the City
available therefor.
All moneys paid into the Warrant Fund shall be used only for payment of the principal
of and interest on the Warrants, upon or after the respective maturities of such principal
and interest or upon mandatory redemption; provided, that, if at the final maturity of the
Warrants, howsoever the same may mature, there shall be in the Warrant Fund moneys
in excess of the amount required to retire the Warrants, then any such excess shall
thereupon be returned to the City. 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 immediately available for withdrawal under the provisions of
this section.
(b) Depository for Warrant Fund. The City hereby designates Regions Bank,
Mobile, Alabama, as the depository for the Warrant Fund with respect to payment of
principal of and interest on the Warrants. The City reserves the right from time to time
to designate one or more banks (which may or may not include the Bank heretofore
herein designated, but shall be a commercial bank with trust powers) as a depository for
the Warrant Fund. In the event that any bank at any time designated as depository for
any portion of the Warrant Fund 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 any other
bank or banks at the time designated as depository or depositories for the same portion
of the Warrant Fund shall continue to serve as such depository or depositories without
designation by the City of any additional depository or depositories; but if at any time
the sole remaining depository for any portion of the Warrant Fund should resign, cease
to be a member of said Federal Deposit Insurance Corporation (or successor agency
thereto) 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;
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Ordinance No. 1333
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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.
(c) Trust Nature of and Security for the Warrant Fund. The Warrant Fund shall be
and at all times remain public funds impressed with a trust for the purpose for which the
Warrant Fund is herein created. Each depository for any part of 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 under regulations of the Board of Governors of the
Federal Reserve System, having a market value (exclusive of accrued
interest) not less than the amount of moneys on deposit in the Warrant
Fund, or
(ii) if the furnishing of security in the manner provided in the
foregoing clause (i) of this sentence is not permitted by the then
applicable law and regulations, then in such other 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 public funds; provided, however, that it shall not
be necessary for any such depository so to secure any portion of the
moneys on deposit in the Warrant Fund that may be insured by the
Federal Deposit Insurance Corporation (or by any agency of the United
States of America that may succeed to its functions) or any portion of the
said moneys that may be invested pursuant to the provisions of
subsection (d) of this section.
(d) Investment of Moneys in the Warrant Fund. So long as the City shall not be in
default hereunder it may, at any time and from time to time as it in its sole discretion
shall deem advisable, cause to be invested in Eligible Investments any or all of the
moneys in the Warrant Fund; provided, that, each such investment shall mature not later
than the Interest Payment Date next following the date such investment is made. In the
event of any such investment, the securities in which the investment is made shall
become a part of the Warrant Fund and shall be held by the depository for the moneys
so invested to the same extent as if they were moneys on deposit in the Warrant Fund.
The City may likewise at any time and from time to time cause any securities in which
any such investment shall be made to be sold or otherwise converted into cash,
whereupon the net proceeds derived from any such sale or conversion, after payment of
all necessary expenses incident to such sale or conversion, shall become a part of the
Warrant Fund. Each depository for the Warrant Fund shall be fully protected in making
investments, sales, and conversions of any such securities upon direction given to it in a
writing signed by the Mayor of the City and by the City Treasurer.
Section 7. Form of Warrants. The Warrants shall be in substantially the following
form:
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Ordinance No. 1333
Page —11-
(Form of Warrant)
Unless this Warrant is presented by an authorized representative of The Depository Trust Company, a
New York corporation ("DTC'), to the City or its agent for registration of transfer, exchange, or
payment, and any Warrant issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VAL UE OR OTHER WISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
No. R
UNITED STATES OF AMERICA
STATE OF ALABAMA
CITY OF FAIRHOPE
GENERAL OBLIGATION WARRANT
Interest Rate Maturity Date CUSIP N
304873
Subject to prior payment and other provisions as herein provided
The City Treasurer of the CITY OF FAIRHOPE, a municipal
corporation under the laws of Alabama ("the City"), will pay to
or registered assigns, the principal sum of
DOLLARS on the date specified above with interest thereon from the date hereof until
the maturity hereof at the per annum rate of interest specified above (computed on the
basis of a 360-day year of twelve consecutive 30-day months), payable on December 1,
2007, and semiannually thereafter on each June 1 and December 1 until the due date
hereof. The principal of and premium (if any) on this Warrant shall be payable only
upon presentation and surrender of this Warrant at the principal corporate trust office of
Regions Bank ("the Bank") in the City of Mobile, Alabama.
Interest on this Warrant shall be remitted by the Bank to the then registered holder
hereof at the address shown on the registry books of the Bank pertaining to the
Warrants. Principal and interest on this Warrant which becomes due on a day other
than a business day (meaning a day on which the Bank is open for business) shall be
due on the then next succeeding business day and no interest shall accrue in the interim.
Interest shall be deemed to have been timely paid if the check or draft therefor is mailed
on or before the due date of such interest. The ordinance hereinafter referred to
provides that all payments by the City or the Bank to the person in whose name a
Warrant is registered shall to the extent thereof fully discharge and satisfy all liability
for the same. Any transferee of this Warrant takes it subject to all payments of principal
and interest in fact made with respect hereto.
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Ordinance No. 1333
Page —12-
This Warrant is one of a duly authorized issue of Warrants designated General
Obligation Warrants and aggregating $7,900,000 in principal amount ("the Warrants").
This Warrant is issued pursuant to the applicable provisions of the constitution and laws
of Alabama, including particularly Section 11-47-2 of the Code of Alabama of 1975, as
amended, and an ordinance ("the Ordinance") of the City duly adopted by the governing
body of the City.
Those of the Warrants having stated maturities on June 1, 2017, and thereafter are
subject to redemption and prepayment prior to their respective maturities, at the option
of the City, as a whole or in part (but if in part, those maturities to be redeemed to be
selected by the City at its discretion), on June 1, 2016, and on any date thereafter, at and
for a redemption price equal to the principal amount redeemed plus accrued interest
thereon to the date fixed for redemption.
Those of the Warrants having a stated maturity in 2032 are also subject to scheduled
mandatory redemption on June 1, 2028, and on each June 1 thereafter until and
including June 1, 2031, in such amounts as are set forth in the Ordinance. In the event
that less than all the principal of the Warrants of a single maturity is to be prepaid and
redeemed, the Bank shall, by process of random selection, determine the principal
portion of the Warrants of such maturity to be redeemed and prepaid.
The Ordinance requires that written notice of the call for redemption of this Warrant (or
portion of the principal thereof) be forwarded by United States Registered or Certified
Mail to the registered owner of such Warrant, not less than thirty (30) nor more than
sixty (60) days prior to the date fixed for redemption. In the event that less than all the
outstanding principal of this Warrant is to be redeemed, the registered Holder hereof
shall surrender this Warrant to the Bank in exchange for a new Warrant of like tenor
herewith except in a principal amount equal to the unredeemed portion of this Warrant.
Upon the giving of notice of redemption in accordance with the provisions of the
Ordinance, the Warrants (or principal portions thereof) so called for redemption and
prepayment shall become due and payable on the date specified in such notice, anything
herein or in the Ordinance to the contrary notwithstanding, and the Holders thereof shall
then and there surrender them for prepayment, and all future interest on the Warrants
(or principal portions thereof) so called for prepayment shall cease to accrue after the
date specified in such notice, whether or not the Warrants are so presented.
By the execution of this Warrant, the City acknowledges that it is indebted to the payee
hereof in the principal amount hereof in accordance with the terms 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 evidenced and ordered paid by
this Warrant is lawfully due without condition, abatement or offset of any description;
that this Warrant has been registered 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 perfonned 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
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Page —13-
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.
The Warrants are issuable only as fully registered Warrants in the denomination of
$5,000 or any integral multiple thereof. Provision is made in the Ordinance for the
exchange of Warrants for a like aggregate principal amount of Warrants of the same
maturity and in authorized denomination, all upon the terms and subject to the
conditions set forth in the Ordinance.
This Warrant is transferable by the registered holder hereof, in person or by authorized
attorney, only on the books of the Bank (the registrar and transfer agent of the City) and
only upon surrender of this Warrant to the Bank for cancellation, and upon any such
transfer a new Warrant of like tenor hereof will be issued to the transferee in exchange
therefor, all as more particularly described in the Ordinance. Each holder, by receiving
or accepting this Warrant shall consent and agree and shall be estopped to deny that,
insofar as the City and the Bank are concerned, this Warrant may be transferred only in
accordance with the provisions of the Ordinance. The Bank shall not be required to
transfer or exchange this Warrant during the period of fifteen (15) days next preceding
any June 1 or December 1; and, in the event that this Warrant (or any principal portion
hereof) is duly called for redemption and prepayment, the Bank shall not be required to
register or transfer this Warrant during the period of sixty (60) days next preceding the
date fixed for such redemption and prepayment.
Execution by the Bank of its registration certificate hereon is essential to the validity
hereof.
WITNESS WHEREOF, the City has caused this Warrant to be executed with the
manual signature of its Mayor, has caused its corporate seal to be hereunto imprinted,
has caused this Warrant to be attested by the manual signature of its City Clerk, and has
caused this Warrant to be dated June 1, 2007.
Attest:
Geniece W. Johnson, Ci
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CITY OF FAIRHOPE
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