Subject: 19478/Issue & Sale of Bonds-Sewer & Sewage, 1992 Date: Fri, 12 Jun 1992 11:26:00 -0500 RESOLUTION NO. 19478 A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF $20,000,000 CITY OF CHATTANOOGA, GENERAL OBLIGATION, SEWER AND SEWAGE FACILITIES BONDS, 1992 WHEREAS, pursuant to the provisions of Sections 9-21-101 to 9-21-1017 both inclusive, Tennessee Code Annotated (the "Act"), the City Council of the City of Chattanooga, Tennessee (the "Board") duly adopted an INITIAL RESOLUTION on May 5, 1992, numbered 19439 (the "Initial Resolution") authorizing in total the issuance and sale of $24,180,000.00 bonds of the City of Chattanooga (the "Bonds"), for the purpose of paying the cost of constructing sewers and sewage facilities, and all costs incidental thereto, including, but not limited to, the paving of streets, roads, avenues, alleys or highways where said sewers have been constructed in the City of Chattanooga (the "Project"). The Resolution provides that the Bonds and interest thereon shall be payable from taxes, and be binding obligations of the City of Chattanooga, Tennessee; WHEREAS, notice of the adoption of the Initial Resolution has been given by publication, as required by 9-21-206 of the Act; WHEREAS, the qualified electors of the City have not protested the issuance of the Bonds; WHEREAS, the Board desires at this time to sell $20,000,000 of Bonds part of the authorized issue of Bond of $24,180,000 for the purpose of financing part of the costs stipulated above, the Bonds to be sold if and when it is determined to be in the best financial interest of the City, the Bonds to be known and designated as "CITY OF CHATTANOOGA, GENERAL OBLIGATION SEWER AND SEWAGE FACILITIES BONDS, 1992"; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CHATTANOOGA, TENNESSEE: SECTION 1. That there be issued and sold Bonds of the City of Chattanooga, Tennessee (the "City"), in the amount of $20,000,000.00 to be known as "CITY OF CHATTANOOGA, GENERAL OBLIGATION, SEWER AND SEWAGE FACILITIES BONDS, 1992" ("The Bonds"). The Bonds shall be dated June 15, 1992, shall be issued in registered form in the denomination of $5,000.00 or any integral multiple thereof, and shall bear interest at a rate or rates not to exceed the rate or rates prescribed by law, said interest to be payable February 1, 1993, and semiannually on the first days of August 1 and February 1 of each year. Principal and redemption price, if any, of and interest on the Bonds shall be payable in accordance with Section 8 hereof. The Bonds shall mature on August 1 in each year, in the years and amounts as follows: Year Amount Year Amount 1993 $380,000 2006 $760,000 1994 395,000 2007 810,000 1995 415,000 2008 865,000 1996 435,000 2009 920,000 1997 455,000 2010 975,000 1998 480,000 2011 1,040,000 1999 505,000 2012 1,110,000 2000 535,000 2013 1,180,000 2001 565,000 2014 1,260,000 2002 600,000 2015 1,340,000 2003 635,000 2016 1,430,000 2004 675,000 2017 1,520,000 2005 715,000 The Bonds maturing on or after August 1, 2003 shall be subject to redemption prior to maturity on thirty (30) days' notice, at the option of the City as hereinafter provided, as a whole or in part (and by lot if less than all of a maturity is to be redeemed) at any time, in the inverse order of their maturity or in equal proportionate amounts, on or after August 1, 2002 at the following redemption prices plus accrued interest to the date of redemption: Redemption Dates Redemption Prices August 1, 2002 to July 31, 2003 102.0% August 1, 2003 to July 31, 2004 101.5 August 1, 2004 to July 31, 2005 101.0 August 1, 2005 to July 31, 2006 100.5 August 1, 2006 and thereafter 100.0 Notice of any call for redemption shall be given by mailing such notice, at least thirty (30) days prior to the date set for such redemption, to the registered owner of each Bond being so redeemed at his address, as shown on the registration books of the City (the "Registration Books") kept for that purpose at the office of the Fiscal Agent (as hereinafter defined). Notice of redemption having been given as aforesaid, the Bonds so called for redemption shall, on the date for redemption set forth in such call for redemption, become due and payable, together with the redemption price, if any, and interest to such redemption date, and interest shall cease to be paid thereon after such redemption date. SECTION 2. That the full faith and credit of the City is hereby irrevocably pledged to the payment of the principal and redemption price, if any, of and interest on the Bonds; and the City hereby covenants and agrees with the owners of the Bonds that in each fiscal year in which any of the Bonds shall be outstanding, there will be levied and collected at the same time and in the same manner as other ad valorem taxes in said City are levied and collected, such ad valorem taxes upon all taxable property within the city in an amount sufficient to pay the principal and redemption price, if any, of and interest on the Bonds as they respectively become due and mature, and also an amount sufficient to pay the principal and redemption price, if any, of and interest on all other general obligation bonds and notes, or general indebtedness of the City heretofore or hereafter issued as the same shall become due and mature, and also in amounts necessary for the current operation and all other municipal expenses of the City for such fiscal year. SECTION 3. That the Mayor be and is hereby authorized to receive proposals for the sale of the Bonds; and the City Council of the City of Chattanooga (the "Board") may make an award of same; SUBJECT, however, to the terms and provisions of Sections 9-21-101 to 9-21-1017, both inclusive, Tennessee Code Annotated (the "Act"); PROVIDED, that no award shall be made at a price less than par and accrued interest. SECTION 4. That the proceeds derived from the sale of the Bonds shall be used for the purpose of paying the costs of construction the Project (as defined in the Whereas Clauses hereof). The proceeds derived from the sale of the Bonds shall be kept in a separate account by the City Treasurer, and shall be disbursed only for the above purposes. SECTION 5. No Bond shall be secured by this resolution or entitled to the benefit hereof or shall be valid or obligatory for any purpose unless there shall be endorsed on such Bond a certificate of authentication by Chemical Bank, New York, New York, as fiscal agent, or any successor fiscal agent (the "Fiscal Agent") substantially in the form prescribed in this resolution, executed by the manual signature of a duly authorized officer of the Fiscal Agent; and such certificate on any Bond shall be conclusive evidence and the only competent evidence that such Bond has been duly authenticated and delivered under this resolution. SECTION 6. In the event any Bond is mutilated, lost, stolen or destroyed, the City shall execute and the Fiscal Agent shall authenticate a new Bond of like date, maturity and denomination to that mutilated, lost, stolen or destroyed Bond, provided that, in the case of any mutilated Bond such mutilated Bond shall first be surrendered to the City, and in the case of any lost, stolen or destroyed Bond, there first shall be furnished to the City and the Fiscal Agent evidence of such loss, theft or destruction satisfactory to the City and the Fiscal Agent, together with an indemnity satisfactory to them. In the event any such Bond shall have matured, instead of issuing a duplicate Bond, the City may pay the same without surrender thereof making such requirements as it deems fit for its protection, including a lost instrument bond. The City and the Fiscal Agent may charge the owner of such Bond with their reasonable fees and expenses for such service. SECTION 7. Upon the surrender to the Fiscal Agent of any mutilated Bond, or any Bond acquired, redeemed, or paid at maturity, the same shall forthwith be canceled. Bonds so canceled may at any time be destroyed by the Fiscal Agent, who all execute a certificate of destruction in duplicate by the signature of one of its authorized officers, describing the Bonds as destroyed, and one executed certificate shall be filed with the City and the other executed certificate shall be retained by the City. SECTION 8. The Bonds shall be payable, with respect to interest, principal and redemption price, if any, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. The principal and redemption price of the Bonds shall be payable at the principal corporate trust office of the Fiscal Agent. The interest on the Bonds shall be payable by the Fiscal Agent by check or draft made payable to the registered owner of the Bonds on each interest payment date and mailed to the address of such owner as it shall appear on the Registration Books as of the close of business on the 15th business day of the calendar month immediately preceding such interest payment date (the "Record Date"). SECTION 9. The city shall cause the Registration Books for the registration and for the transfer of the Bonds as provided in this resolution to be kept by the Fiscal Agent. The principal and redemption price, if any, of any Bond shall be payable only to or upon the order of the registered owner or his duly authorized legal representative. Upon surrender for transfer of any Bond at the principal corporate trust office of the fiscal Agent, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his attorney duly authorized in writing, the City shall execute, and the Fiscal Agent shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds of the same maturity or maturities and of authorized denomination of denominations, for a like aggregate principal amount. Bonds may be exchanged at the principal corporate trust office of the Fiscal Agent for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity. The city shall execute and the Fiscal Agent shall authenticate and deliver Bonds which the registered owner of any outstanding Bond or Bonds making the exchange is entitled to receive, tearing numbers not contemporaneously then outstanding. The execution by the City of any Bond or any authorized denomination shall constitute full and due authorization of such denomination, and the City shall thereby be authorized to authenticate and deliver such Bond. All Bonds surrendered in any such exchanges or transfers shall be canceled by the Fiscal Agent in the manner provided in Section 7 hereof. Neither the city nor the Fiscal Agent shall be required (a) to transfer or exchange Bonds for a period beginning with any Record Date and ending on any interest payment date for such Bonds or next preceding any selection of Bonds to be redeemed or thereafter until after the mailing of any notice of redemption; or (b) to transfer or exchange Bonds called for redemption. As to any Bond, the person in whose name the same shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of either principal and redemption price, if any, or interest on any Bond shall be made only to or upon the written order of the registered owner thereof or his legal representative, but such registration may be changed *as hereinabove provided. All such payment shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. There shall be no charge for any such exchange or transfer of Bonds, but the City or the Fiscal Agent may require payment of a sum sufficient to pay any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. SECTION 10. (a) The City covenants to maintain the exclusion of the interest on the Bonds from gross income for Federal income tax purposes pursuant to. Section 103(a) of the Internal Revenue Code of 1986, as amended (the "Code"). In furtherance of the covenant contained in the preceding sentence, the City agrees to comply with the provisions of the "Tax certificate as to Arbitrage and Instructions as to Compliance with Provisions of Section 103(a) of the Internal Revenue Code of 1986, as Amended" (the "Tax Certificate") executed by the City on the date of initial issuance and delivery of the Bonds, as such Tax Certificate may be amended from time to time, as a source of guidance for achieving compliance with the Code. (b) The city shall make any and all payments required to be made to the United States Department of the Treasury in connection with the Bonds pursuant to Section 148(f) of the Code. (c) Notwithstanding any other provision of this Authorizing Resolution to the contrary, so long as necessary in order to maintain the exclusion of interest on the Bonds from gross income for Federal income tax purposes" the covenants contained in this Section shall survive the payment of the Bonds, including any payment or defeasance thereof. (d) Notwithstanding any other provision of this Resolution to the contrary, (i) upon the City's failure to observe or refusal to comply with the above covenants, the holders of the Bonds, or any Trustee acting on their behalf, shall be entitled to the rights and remedies provided to Bondholders under this Resolution, other than the right (which is hereby abrogated solely in regard to any failure to observe, as refusal to comply with, the covenants of this Section 10) to declare the principal of all Bonds then outstanding, and the interest accrued thereon, to be due and payable; and (ii) neither the holders of bonds of any series other than the Bonds, nor any Trustee acting on their behalf, shall be entitled to exercise any right or remedy provided to Bondholders under the Resolution based upon the City's failure to observe, or refusal to comply with, the covenants contained in this Section 10. SECTION 11. That said Bonds and the Fiscal Agent's Certificate of Authentication shall be in substantially the following form: NO. UNITED STATES OF AMERICA $__________ STATE OF TENNESSEE CITY OF CHATTANOOGA CITY OF CHATTANOOGA, GENERAL OBLIGATION, SEWER AND SEWAGE FACILITIES BOND, 1992. Interest Rate Maturity Date Dated Date CUSIP % KNOW ALL MEN BY THESE PRESENTS, that the City of Chattanooga, Tennessee, a duly organized Municipal Corporation (the "City"), acknowledges itself to owe, and for value received, promises to pay to the registered owner above, or registered assigns on the Maturity Date hereof (or earlier as hereinafter referred to) upon the presentation and surrender hereof at the principal corporate trust office of Chemical Bank, New York, New York, as fiscal agent or any successor fiscal agent (herein called the "Fiscal Agent"), the principal sum of DOLLARS lawful money of the United States of America with interest on said principal sum payable February 1, 1993 and semi-annually thereafter on August 1 and February 1 in each year at the interest Rate per annum stated hereon from the Dated Date hereof, except as otherwise stated in the Resolution (as hereinafter defined), until payment of said principal sum shall be discharged. Interest when due shall be payable by the Fiscal Agent, by check or draft mailed to the registered owner hereof on each interest payment date at his address as shown on the registration books of the City which shall be kept for that purpose at the principal corporate trust office of the Fiscal Agent (the "Registration Books"), as of the close of business on the fifteenth day of the calendar month immediately preceding each such interest payment date. Principal and redemption price, if any, of and interest on this are payable in lawful money of the United States of America and for the prompt payment of this bond and the interest thereon the full faith, credit and resources of the City of Chattanooga, Tennessee, are hereby irrevocably pledged. This bond is one of a duly authorized issue of bonds of the City designated City of Chattanooga, General Obligation, Sewer and Sewage Facilities Bond, 1992, issued as fully registered bonds in any integral multiple of $5,000.00, in the aggregate principal amount of $20,000,000.00, issued by the City pursuant to and in accordance with the provisions of Sections 9-21-101 to 9-21-1017, both inclusive, Tennessee Code Annotated, and pursuant to an initial resolution duly passed by the City Council of said City on May 5, 1992, the "Initial Resolution"), for the purpose of paying the costs of constructing sewer and sewage facilities, and all costs incidental thereto, including, but not limited to, the paving of streets, roads, avenues, alleys or highways where said sewers have been constructed in the City. Reference is hereby made to the further provisions of this set forth on the reverse side hereof and such further provisions shall for all purposes have the same effect as if set forth on the front side hereof. It is further certified and recited that all acts, conditions and things required to be done precedent to and in the issuance of this bond have been done, have happened, and have been performed in regular and due form, time and manner as required by law, and that the total indebtedness of the City of Chattanooga, Tennessee, including this bond, does not exceed any statutory or constitutional limitation. It is further provided by Section 9-21-117, Tennessee Code Annotated, that neither the principal nor the interest on this shall be taxed by the State of Tennessee or by any County or Municipality thereof, except inheritance, transfer and estate taxes. IN TESTIMONY WHEREOF, the City of Chattanooga, Tennessee, has caused this to be executed by the manual or facsimile signature of the Mayor and the corporate seal of said City or a facsimile thereof, to be affixed hereto, or impressed, imprinted or otherwise reproduced hereon, attested by the City Finance Officer by his manual or facsimile signature, this the 15th day of June, 1992. CITY OF CHATTANOOGA, TENNESSEE ____________________________________ Mayor ATTEST: ________________________________ City Auditor 0C [FORM OF FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION ON ALL BONDS] This is one of the bonds executed and delivered pursuant to the within mentioned Resolution. ____________________________________ Fiscal Agent By:_________________________________ Authorized Officer Date:_______________________________ (Back of Bond) The City has covenanted that in each fiscal year while any of the bonds are outstanding, there will be levied and collected at the same time and in the same manner as other ad valorem taxes in said City are levied and collected, such ad valorem taxes upon all taxable property within the City of Chattanooga in an amount sufficient to pay the principal and redemption price, if any, of and interest on said bonds as they respectively become due and mature, and also an amount sufficient to pay the principal of and interest on all other bonds, notes, or general indebtedness of said City heretofore or hereafter issued as the same shall become due and mature and also in amounts necessary for current operation and all municipal expenses of said City for such fiscal year. The bonds maturing on or before August 1, 2002 shall not be subject to redemption prior to maturity. The bonds maturing on or before August 1, 2003, shall be subject to redemption prior to maturity on thirty (30) days' notice, at the option of the City of Chattanooga as hereinafter provided, as a whole or in part (and by lot if less than all of a maturity is to be redeemed), in the inverse order of their maturity or in equal proportionate amounts, on August 1, 2002, at any time thereafter at the following Redemption Prices plus accrued interest to the date of redemption: Redemption Redemption Dates Prices August 1, 2002 to July 31, 2003 102.0% August 1, 2003 to July 31, 2004 101.5 August 1, 2004 to July 31, 2005 101.0 August 1, 2005 to July 31, 2006 100.5 August 1, 2006 and thereafter 100.0 Notice of any call for redemption shall be given by mailing such notice, at least thirty (30) days prior to the date set for such redemption, to the registered owner of each being so redeemed at his address, as shown on the registration books of the City. Notice of redemption having been given as aforesaid, the Bonds so called for redemption shall, on the date for redemption set forth in such call for redemption, become due and payable, together with interest to such redemption date, and interest shall cease to be paid thereon after such redemption date. The city shall cause books for the registration and for the transfer of the bonds as provided in the Resolution to be kept by the Fiscal Agent. This is transferable by the registered owner hereof in person or by his attorney, duly authorized in writing, at the principal corporate trust office of the Fiscal Agent, but only in the manner, subject to the limitations and upon payment of the charges provided in the Resolution, and upon surrender and cancellation of this. Upon such transfer a new Bond or Bonds of the same maturity or maturities and of authorized denomination or denominations, for the same aggregate principal amount, will be issued to the transferee in exchange therefor. The City and the Fiscal Agent shall deem and treat the registered owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal, redemption price or interest due hereon and for all other purposes. This bond may be exchanged at the principal corporate trust office of the Fiscal Agent for a like aggregate principal amount of bonds of other authorized denominations of the same maturity. The City shall execute and the Fiscal Agent shall authenticate and deliver bonds which the registered owner of any outstanding or bonds making the exchange is entitled to receive, bearing numbers not contemporaneously then outstanding. There shall be no charge for any such exchange or transfer of bonds, but the City or the Fiscal Agent may require payment of a sum sufficient to pay any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. Neither the City nor the Fiscal Agent shall be required (a) to transfer or exchange bonds for a period beginning on any Record Date and ending on any interest payment date on such bonds or next preceding any selection of bonds to be redeemed or thereafter until after the mailing of any notice of redemption; or (b) to transfer or exchange bonds called for redemption. This bond shall not be entitled to any security, right or benefit under the Resolution or be valid or obligatory for any purpose, unless the certificate of authentication hereon has been duly executed by the Fiscal Agent. SECTION 12. The covenants and liens entered into, created or imposed pursuant to this resolution may be fully discharged and satisfied with respect to the bonds in any one or more of the following ways: (a) by paying the principal of and interest on the bonds when the same shall become due and payable; or (b) by depositing in an account as the city may hereafter create and establish by resolution moneys sufficient at the time of such deposit to pay the bonds, the interest thereon and the redemption premium, if any, as the same become due on said bonds on or prior to the redemption date or maturity date thereof; or (c) by depositing in such account as the City may hereafter create and establish by resolution moneys which when invested in Defeasance Obligations (as hereinafter defined), will provide moneys which shall be sufficient to pay the bonds, the interest thereon and the redemption premium, if any, as the same shall become due on said bonds on or prior to their redemption date or maturity date thereof. As used herein, Defeasance Obligation shall mean to the extent permitted by law; (i) Direct general obligations of, or obligations of the payment of principal and interest on which is unconditionally guaranteed by, the United States of America; (ii) Evidences of indebtedness issued by any of the following: Bank for Cooperatives; Federal Home Loan Banks, Federal Home Loan Mortgage Corporation (including Participation certificates); Federal Land Banks; Federal Financing Banks; or any other agency or instrumentality of the United States of America created by an act of Congress which is substantially similar to the foregoing in its legal relationship to the United States of America; (iii) Evidences of ownership of proportionate interests in future interest and principal payments on specified obligations described in (i) held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor on the underlying obligations described in (i), and which underlying obligations are not available to satisfy any claim of the custodian or any person claiming through the custodian or to whom the custodian may be obligated; and (iv) Debt obligations, whether or not interest thereon is exempt from federal income taxes, which, at the time of deposit, are rated by either Moody's or S&P in either of the two highest long-term debt rating categories of such rating agency, without regard to any refinement or gradation of such rating category by numerical modifier or otherwise; provided, that if any being provided for is then rated by Moody's or S&P, the obligations deposited must be rated by each rating agency having a rating in effect on such bonds in a rating category no lower than that in effect on such bonds; and (v) Obligations described in Section 103(a) of the Internal Revenue Code of 1986, as amended, provision for the payment of the principal of, premium, if any, and interest on which shall have been made by the irrevocable deposit with a bank or trust company acting as a trustee or escrow agent for holders of such obligations of securities described in clauses (i) or (ii) the maturing principal of and interest on which, when due and payable, will provide sufficient moneys to pay when due the principal of, premium, if any, and interest on such obligations, and which securities described in clauses (i) or (ii) are not available to satisfy any other claim, including any claim of the trustee or escrow agent or of any person claiming through the trustee or escrow agent or to whom the trustee or escrow agent may be obligated, including in the event of the insolvency of the trustee or escrow agent or proceedings arising out of such insolvency. Upon such payment or deposit in the amount and manner provided in this resolution, the bonds shall no longer be deemed outstanding for the purposes of this resolution and all liability of the City with respect to the bonds shall cease and be completely discharged and extinguished, and the holders thereof shall be entitled for payment solely out of the moneys or Defeasance Obligations so deposited. SECTION 13. That after the bonds have been awarded as herein provided, the Mayor is hereby authorized to execute the bonds on behalf of the City of Chattanooga with his manual or facsimile signature, and the City Finance Officer to countersign the same with his manual or facsimile signature, attesting, and to affix, imprint or otherwise reproduce the Seal of the City on the bonds, or a facsimile thereof. Thereupon, the Mayor or the City Auditor is hereby authorized to deliver the executed bonds to the approved purchaser upon the payment of the amount specified in the award and Mudge, Rose, Guthrie, Alexander & Ferdon shall deliver the opinion approving the validity of said Bonds. SECTION 14. That this Resolution take effect from and after its passage, the public welfare requiring it. PASSED: June 9, 1992 0C I, Carol O'Neal, Clerk of the City Council of the City of Chattanooga, Tennessee, and as such keeper of the records of the City Council of said City, do hereby certify that the foregoing is a true, compared and correct copy of Resolution No. 19478 , adopted by the City Council of the City of Chattanooga, Tennessee on June 9, 1992. WITNESS my hand and the Seal of the City of Chattanooga, Tennessee, this 10th day of June , 1992. ____________________________________ Clerk of the City Council of the City of Chattanooga, Tennessee