Subject: 20885/Combustion Property Purchase Date: Tue, 30 Jan 1996 10:43:53 -0500 RESOLUTION NO. 20885 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHATTANOOGA, TENNESSEE, AUTHORIZING THE ISSUANCE AND PAYMENT OF ONE NONINTEREST- BEARING CAPITAL OUTLAY NOTE NOT TO EXCEED THE AGGREGATE AMOUNT OF FOUR HUNDRED TWENTY THOUSAND NINE HUNDRED SIXTEEN AND 66/100 DOLLARS ($420,916.66). ______________________________ WHEREAS, the City Council of the City of Chattanooga, Tennessee, has determined that it is necessary and desirable to purchase certain real property and improvements thereon from Cumbustion Engineering, Inc. together with Hamilton County (the "Project") for the benefit of the citizens of the City of Chattanooga and Hamilton County; and WHEREAS, under the provisions of Parts I, IV and VI of Title 9, Chapter 21, Tennessee Code Annotated (the "Act"), local governments in Tennessee are authorized to finance the cost of this Project, or a portion thereof, through the issuance of noninterest-bearing capital outlay notes upon the approval of the State Director of Local Finance; and WHEREAS, the City Council finds that it is advantageous to the City of Chattanooga to authorize the issuance of one capital outlay note to finance a portion of the cost of the Project; NOW, THEREFORE, BE IT RESOLVED, by the City Council as follows: 0C SECTION 1. That, for the purpose of providing funds to finance a portion of the cost of the Project in and for the City of Chattanooga, the Mayor and City Finance Officer of the City of Chattanooga are hereby authorized in accordance with the terms of this resolution to execute one noninterest-bearing capital outlay note payable to Combustion Engineering, Inc. in the aggregate principal amount not to exceed Four Hundred Twenty Thousand Nine Hundred Sixteen and 66/100 Dollars ($420,916.66) (the "Note") upon approval of the State Director of Local Finance pursuant to the terms, provisions and conditions permitted by law. The Note shall be designated "City of Chattanooga Capital Outlay Note, Series 1996"; shall be numbered serially from one (1) upwards; shall be dated as of the date of issuance; shall be in denomination(s) as agreed upon with Combustion Engineering, Inc,; and shall bear interest at a rate of zero percent (0%) per annum, and in no event shall the rate exceed the legal limit provided by law. SECTION 2. That, the Note shall mature not later than two (2) years after the date of issuance and that the Note and any extension or renewal notes shall not exceed the reasonably expected economic life of the Project, which is hereby certified by the City Council to be at least fifteen (15) years. Provided, however, that each year the Note is outstanding, one-half (1/2), but in no event not less than one-ninth (1/9), of the original principal amount of the Note shall mature without renewal but subject to prior redemption. SECTION 3. That, the Note shall be subject to redemption at the option of the City of Chattanooga, in whole or in part, at any time, at the principal amount without a premium. SECTION 4. That, the Notes shall be the direct general obligation of the City of Chattanooga, for which the punctual payment of the principal and interest on the Note, the full faith and credit of the City of Chattanooga is irrevocably pledged and the City of Chattanooga hereby pledges its taxing power as to all taxable property in the City of Chattanooga for the purpose of providing funds for the payment of principal of the Note. The City Council of the City of Chattanooga hereby authorizes the levy and collection of a special tax on all taxable property of the City of Chattanooga over and above all other taxes authorized by the City of Chattanooga to create a sinking fund to retire the Note as it matures in an amount necessary for that purpose. SECTION 5. That, the Note shall be executed in the name of the City of Chattanooga, Tennessee, and bear the manual signature of the Mayor of the City of Chattanooga and the manual signature of the City Finance Officer with the City of Chattanooga's seal affixed thereon; and shall be payable at the office of the City Finance Officer of the City of Chattanooga or the paying agent duly appointed by the City of Chattanooga. SECTION 6. That, the Note will be issued in fully registered form and that at all times during which the Note remains outstanding and unpaid, the City of Chattanooga or its agent shall keep or cause to be kept at its office a note register for the registration, exchange or transfer of the Notes. The note register, if held by an agent of the City of Chattanooga, shall at all times be open for inspection by the City of Chattanooga or any duly authorized officer of the City of Chattanooga. The Note shall have the qualities and incidents of a negotiable instrument and shall be transferable only upon the note register kept by the City of Chattanooga or its agent, by the registered owner of the Note in person or by the registered owner's attorney duly authorized in writing, upon presentation and surrender to the City of Chattanooga or its agent together with a written instrument of transfer satisfactory to the City of Chattanooga duly executed by the registered owner or the registered owner's duly authorized attorney. Upon the transfer of the Note, the City of Chattanooga shall issue in the name of the transferee a new registered note of the same aggregate principal amount and maturity as the surrendered Note. The City of Chattanooga shall not be obligated to make any such Note transfer during the forty-five (45) days next preceding the date of redemption. SECTION 7. That, the Note shall be in substantially the form attached hereto and shall recite that the Note is issued pursuant to Title 9, Chapter 21, Tennessee Code Annotated. SECTION 8. That, the Note shall be issued only after the receipt of the written approval of the State Director of Local Finance for the sale of the Note. SECTION 9. That, the Note is hereby designated as qualified tax-exempt obligation for purpose of Section 265(b)(3) of the Internal Revenue Code of 1986. SECTION 10. That, after the issuance of the Note, and for each year that the Note is outstanding, the City of Chattanooga shall submit its annual budget to the State Director of Local Finance for approval immediately upon the City of Chattanooga's adoption of the budget. SECTION 11. That, if the Note shall remain unpaid at the end of two (2) years from the issue date, then the unpaid Note shall be renewed or extended as permitted by law, or retired from the funds of the City of Chattanooga or be converted into bonds pursuant to Chapter 11 of Title 9 of the Tennessee Code Annotated, or any other law, or be otherwise liquidated as approved by the State Director of Local Finance. SECTION 12. That, all orders or resolutions in conflict with this Resolution are hereby repealed insofar as such conflict exists and this Resolution shall become effective immediately upon its passage. ADOPTED: February 6, 1996 WSP.tlm