RESOLUTION OF THE CITY OF NORRIS, TENNESSEE, AUTHORIZING THE
ISSUANCE OF INTEREST BEARING SEWER SYSTEM REVENUE AND TAX CAPITAL OUTLAY NOTES, SERIES 2014, IN AN AMOUNT NOT TO EXCEED $218,000,
AND PROVIDING FOR THE PAYMENT OF SAID NOTES
WHEREAS, the City Council (the "Council"), of the City of Norris, Tennessee (the "Municipality"
or the "City"), has determined that it is necessary and desirable to authorize, issue, sell, and provide for the
payment of its interest bearing capital outlay notes to finance certain public works projects, consisting of the improvement,
extension, renovation, and expansion of the sewer system of the City, including but not limited to, capital sewer system improvements
and the acquisition of a vehicle for the sewer department, the acquisition of all other property real and personal appurtenant
thereto and connected with such work, and to pay all legal, fiscal, administrative, and engineering costs, incident thereto
(collectively, the "Project");
WHEREAS, the Municipality estimates that
the economic life of the Project is at least ten (10) years;
WHEREAS, the Municipality
finds and determines that the Project will promote or provide a traditional governmental activity or otherwise fulfill a public
in order to proceed as expeditiously as possible with such an essential Project, it is necessary that interest bearing capital
outlay notes be issued for the purpose of providing funds to finance the Project; and,
WHEREAS, the Municipality is authorized by the provisions of Title 9, Chapter 21, Tennessee Code Annotated,
as amended, to issue such notes for said purposes upon the approval of the Director of State and Local Finance (the "Director
of State and Local Finance"):
NOW, THEREFORE, BE IT RESOLVED by the City
Council of the City of Norris, Tennessee, as follows:
Section 1. Authority. The Notes herein authorized shall be issued pursuant to Title 9, Chapter 21,
Tennessee Code Annotated, as amended, and other applicable provisions of law.
Section 2. Definitions. Without limiting any other definitions of terms and words in other sections
of this Resolution, the following words and terms shall have the meanings indicated unless otherwise plainly apparent from
means Title 9, Chapter 21, Tennessee Code Annotated, as amended.
"Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations of the United
States Department of the Treasury promulgated thereunder, as in effect on the date of issuance of the Notes and as hereafter
amended, supplemented, or revised insofar as such amendments, supplements, or revisions shall pertain to or effect the Notes.
"Council" means the
City Council of the City of Norris, Tennessee.
"Current Expenses" means all expenses incurred by, or on behalf of the Municipality in connection with the
operation, maintenance, repair, insuring, and administration of the System, including, but not necessarily limited to, salaries,
wages, the cost of supplies, materials, utilities, and rental payments and the cost of audits, but shall specifically exclude
depreciation, amortization, interest on bonds, and expenditures for any capital improvements of the System, the useful life
of which is reasonably expected to exceed one year, determined in accordance with generally accepted accounting principles.
"Net Revenues" means
for any period, the excess of Revenues of the System over its Current Expenses during such period determined in accordance
with generally accepted accounting principles.
"Note" or "Notes" means the Sewer System Revenue and Tax Capital Outlay Notes, Series 2014,
of the Municipality, authorized by this Resolution of the Council.
"Prior Outstanding Obligations" means those certain outstanding obligations, if any, of the Municipality
with a prior lien on the Revenues of the System.
"Revenues" means all receipts, revenues, income, and other monies received by, or on behalf of, the Municipality
from, or for, the operation of the System and all rights to receive such receipts, revenues, income, and other monies, whether
in the form of accounts receivable, contract rights, or otherwise, and proceeds from insurance against loss of, or damage
to, the System, or from any sale or conveyance, in accordance with the terms hereof, of all or part of the System.
"System" means the complete sewer system
of the Municipality, together with, and including, the Project and all sewer system properties of every nature hereafter owned
by the Municipality, including all improvements and extensions made by the Municipality while the Notes remain outstanding,
and including all real and personal property of every nature comprising part of or used or useful in connection with the sewer
system and including all appurtenances, contracts, leases, franchises, and other intangibles.
Section 3. Authorization. For the purpose of providing
funds to finance the costs of the Project and costs incident to the financing thereof, there shall be issued pursuant to,
and in accordance with, the provisions of Title 9, Chapter 21, Tennessee Code Annotated, as amended, and other applicable
provisions of law, the interest bearing capital outlay notes of the Municipality, in the aggregate principal amount of not
to exceed $218,000, or such lesser amount as may be determined by the Mayor of the Municipality (the "Mayor") at
the time of sale (collectively, the "Notes", individually, the "Note").
Section 4. Terms of the Notes. The Notes shall be designated
"Sewer System Revenue and Tax Capital Outlay Notes, Series 2014". The Notes shall be issued in registered
form, without coupons, in minimum denominations of $5,000. The Notes shall be numbered from 1 upwards, shall be dated
the date of issuance and delivery, shall be sold at not less than the par amount thereof, shall bear interest at a rate or
rates not to exceed 4% per annum, such interest being payable at such times as agreed upon with the purchaser of such Notes,
but in no event less than semiannually each year commencing six months from the dated date or such date as shall be designated
by the Mayor (the "Interest Payment Date"), and shall mature not later than the end of the tenth fiscal year from
the date of issuance. Each year the Notes are outstanding the Municipality shall retire principal on the Notes in an
amount that is estimated to be at least equal to an amortization which reflects level debt service on the Notes. The
Notes shall contain such terms, conditions, and provisions other than as expressly provided or limited herein as may be agreed
upon by the Mayor of the Municipality and the purchaser of the Notes.
Interest on the Notes shall be payable by wire transfer or other electronic means or by check or other form of draft of the
"Note Registrar," as such term is hereinafter defined, deposited by the Note Registrar in the United States mail,
first class postage prepaid, in sealed envelopes, addressed to the owner of such Notes, as of the applicable Interest Payment
Date, at their respective addresses as shown on the registration books of the Municipality maintained by the Note Registrar
as of the close of business fifteen (15) calendar days preceding the next Interest Payment Date. All payments of the
principal of and interest on the Notes shall be made in any coin or currency of the United States of America which, on the
date of payment thereof, shall be legal tender for the payment of public and private debts.
Section 5. Redemption. The Notes shall have such
redemption provisions as may be determined at the time of the sale of the Notes by the Mayor and the purchaser of the Notes;
provided, however, that no redemption premium shall be great than 1%.
Section 6. Execution. The Notes shall be executed in the
name of the Municipality; shall bear the manual signature of the Mayor; shall be countersigned by the City Recorder of the
Municipality (the "City Recorder"), with his or her manual signature; and, shall have printed or impressed thereon
the official seal of the Municipality. In the event any officer whose signature appears on the Notes shall cease to
be such officer, such signature shall nevertheless be valid and sufficient for all purposes. The Notes shall be issued
in typed, printed, or photocopied form, or any combination thereof, substantially in the form attached hereto as Exhibit "A",
with such minor changes therein or such variations thereof as the Mayor may deem necessary or desirable, the blanks to be
appropriately completed by the Mayor prior to the issuance of the Notes.
Section 7. Registration, Negotiability, and Payment. (a)
The City Recorder of the Municipality is hereby appointed the note registrar and paying agent (the "Note Registrar"),
and as such shall establish and maintain suitable books (the "Registration Books"), for recording the registration,
conversion, and payment of the Notes, and shall also perform such other duties as may be required in connection with any of
the foregoing. The Note Registrar is hereby authorized to authenticate and deliver the Notes to the original purchaser
thereof, or as he or she may designate, upon receipt by the Municipality of the proceeds of the sale thereof and to authenticate
and deliver Notes in exchange for notes of the same principal amount delivered for transfer upon receipt of the Notes to be
transferred in proper form with proper documentation as herein described. The Notes shall not be valid for any purpose
unless authenticated by the Note Registrar by the manual signature of the Note Registrar on the certificate set forth in Exhibit
"A" hereto. The Notes shall be fully registered as to both principal and interest and shall be fully negotiable
upon proper endorsement by the registered owner thereof. No transfer of any Notes shall be valid unless such transfer
is noted upon the Registration Books and until such Note is surrendered, cancelled, and exchanged for a new Note which shall
be issued to the transferee, subject to all the conditions contained herein. Principal on the Notes shall be paid at
maturity upon presentation or surrender of the Notes at the principal office of the Note Registrar, and payment in such manner
shall forever discharge and release the obligation of the Municipality to the extent of the principal so paid.
(b) The Municipality
may from time to time at its discretion remove the Note Registrar and appoint a successor Note Registrar to whom all records,
documents, and instruments relating to its duties as Note Registrar shall be delivered. Any successor Note Registrar
shall be appointed by resolution of the Municipality, and shall be a trust company or bank having the powers of a trust company,
having, at the time of such appointment, a combined capital, surplus, and undivided profits aggregating at least Ten Million
Dollars ($10,000,000), and be willing and able to accept the office of Note Registrar on reasonable and customary terms, and
authorized by law to perform all duties imposed upon it by this Resolution.
(c) In the event that any amount payable on any Note as interest shall at any time
exceed the rate of interest lawfully chargeable thereon under applicable law, then any such excess shall, to the extent of
such excess, be applied against the principal of such Note as a prepayment thereof without penalty, and such excess shall
not be considered to be interest. All rates of interest specified herein shall be computed on the basis of a three hundred
sixty (360) day year composed of twelve (12) months of thirty (30) days each.
Section 8. Transfer of Notes. Each Note shall be transferable
only on the Registration Books maintained by the Note Registrar at the principal office of the Note Registrar, upon the surrender
for cancellation thereof at the principal office of the Note Registrar, together with an assignment of such Note duly executed
by the owner thereof or his, her or its attorney or legal representative, and upon payment of the charges hereinafter provided,
and subject to such other limitations and conditions as may be provided therein or herein. Upon the cancellation
of any such Note, the Note Registrar shall, in exchange for the surrendered Note or Notes, deliver in the name of the transferee
or transferees a new Note or Notes of authorized denominations, of the same aggregate principal amount, maturity, and rate
of interest as such surrendered Note or Notes, and the transferee or transferees shall take such new Note or Notes subject
to all of the conditions herein contained.
Section 9. Regulations with Respect to Transfers. In all
cases in which the privilege of transferring Notes is exercised, the Municipality shall execute, and the Note Registrar shall
deliver, Notes in accordance with the provisions of this Resolution. For every transfer of Notes, whether temporary
or definitive, the Municipality and the Note Registrar may make a charge, unless otherwise herein to the contrary expressly
provided, sufficient to pay for any tax, fee, or other governmental charge required to be paid with respect to such transfer,
all of which taxes, fees, and other governmental charges shall be paid to the Municipality by the person or entity requesting
such transfer as a condition precedent to the exercise of the privilege of making such transfer. Neither
the Municipality nor the Note Registrar shall be obligated to transfer any Note during the fifteen (15) calendar days next
preceding the maturity date of the Notes or any call for redemption.
Section 10. Mutilated, Lost, Stolen, or Destroyed Notes. In the event
any Note issued hereunder shall become mutilated, or be lost, stolen, or destroyed, such note shall, at the written request
of the registered owner, be cancelled on the Registration Books and a new Note shall be authenticated and delivered, corresponding
in all aspects but number to the mutilated, lost, stolen, or destroyed Note. Thereafter, should such mutilated, lost,
stolen, or destroyed Note or Notes come into possession of the registered owner, such Notes shall be returned to the Note
Registrar for destruction by the Note Registrar. If the principal on said mutilated, lost, stolen, or destroyed Note
shall be due within fifteen (15) calendar days of receipt of the written request of the registered owner for authentication
and delivery of a new Note, payment therefor shall be made as scheduled in lieu of issuing a new Note. In every case
the registered owner shall certify in writing as to the destruction, theft, or loss of such Note, and shall provide indemnification
satisfactory to the Municipality and to the Note Registrar, if required by the Municipality and the Note Registrar.
Any notice to the contrary notwithstanding, the Municipality
and all of the officials, employees, and agents thereof, including the Note Registrar, may deem and treat the registered owner
of the Notes as the absolute owner thereof for all purposes, including, but not limited to, payment of the principal thereof,
and the interest thereon, regardless of whether such payment shall then be overdue.
Section 11. Authentication. Only such of the Notes as shall have endorsed
thereon a certificate of authentication, substantially in the form set forth in Exhibit "A" hereto duly executed
by the Note Registrar shall be entitled to the rights, benefits, and security of this Resolution. No Note shall be valid
or obligatory for any purpose unless, and until, such certificate of authentication shall have been duly executed by the Note
Registrar. Such executed certificate of authentication by the Note Registrar upon any such Note shall be conclusive
evidence that such Note has been duly authenticated and delivered under the Resolution as of the date of authentication.
Source of Payment and Security. The Notes, including the principal thereof and the interest thereon, are payable
primarily from and secured by a pledge of the Net Revenues to be derived from the operation of the System, and are hereby
declared to be equally and ratably secured, subject to a prior pledge of such Net Revenues to Prior Outstanding Obligations,
by a pledge of such Net Revenues. In the event a deficiency in such Net Revenues, the Notes shall be payable from ad
valorem taxes to be levied for such purpose on all taxable property within the corporate limits of the Municipality
without limitation as to time, rate, or amount. Said Notes shall be a direct general obligation of the Municipality,
for which the punctual payment of the principal of and interest on the Notes the full faith and credit of the Municipality
is hereby irrevocably pledged.
13. Levy of Taxes. For the purpose of providing for the payment of the
principal of and interest on the Notes, there is hereby pledged for such payment the Net Revenues derived from the operation
of the System subject to the liens of the Prior Outstanding Obligations, in amounts not exceeding the amounts required to
make such payments as they come due. In the event of a deficiency in the Net Revenues there shall be levied in each
year in which such Notes shall be outstanding a direct tax on all taxable property in the Municipality, fully sufficient to
pay all such principal and interest falling due prior to the time of collection of the next succeeding tax levy. Said
tax shall be assessed, collected, and paid at the time, and in the same manner, as the other taxes of said Municipality, shall
be in addition to all other taxes, and shall be without limitation as to time, rate, or amount. The Council of the Municipality
is required by law and shall and does hereby pledge to levy such tax. Principal and interest, or any of the foregoing,
falling due at any time when there shall be insufficient funds on hand from such tax levy for the payment thereof shall be
paid from the general fund or other available funds of the Municipality, but reimbursement therefor may be made from the taxes
herein provided when the same shall have been collected. All such taxes levied and collected shall be deposited in a
debt service fund for the sewer system and used solely for the payment of principal and interest on the Notes as the same
shall become due.
Charges for Services Supplied by the System. While the Notes remain outstanding and unpaid, the Municipality
covenants and agrees that the charges for all services supplied through the medium of the System to the Municipality and its
residents and to all consumers shall be reasonable, just, and sufficient taking into account and consideration the cost and
value of the System and the cost of maintaining, operating, and insuring the System, and the proper and necessary allowances
for the depreciation thereof, and the amounts necessary for the payment of principal of, premium, if any, and interest on,
the Notes and other Prior Outstanding Obligations payable from such Revenues.
Section 15. Approval of Director of State and Local Finance. Anything
herein contained to the contrary notwithstanding, no Notes authorized under this Resolution shall be issued, sold, or delivered,
unless and until such Notes shall first have been duly approved by the Director of State and Local Finance as provided by
Section 9-21-601 et. seq., Tennessee Code Annotated, as amended. The Mayor, City Recorder, and City Attorney,
are hereby authorized to take or cause to be taken such steps as are necessary to obtain such approval. After the issuance
and sale of the Notes, and for each year that any of the Notes are outstanding, the Municipality shall submit its annual budget
to the Director of State and Local Finance for approval immediately upon the Municipality's adoption of the budget.
Sale of Notes. The Notes herein authorized are authorized to be sold by the Mayor by the informal bid process
at a price of not less than par, upon such terms and conditions as shall be agreed to by the Mayor and the purchaser of such
Disposition of Note Proceeds. The proceeds from the sale of the Notes shall be paid to the official of the Municipality
designated by law as the custodian of the funds thereof to be deposited in a special fund known as the "Sewer System
Revenue and Tax Capital Outlay Notes, Series 2014 Project Fund" (the "Project Fund"), which is hereby authorized
to be created, to be kept separate and apart from all other funds of the Municipality. The monies in the Project Fund
shall be disbursed solely to finance the Project and to pay the costs of issuance of the Notes. Monies in the Project
Fund may be invested and shall be secured in the manner prescribed by applicable statutes relative to the investment and securing
of public or trust funds. Any monies remaining in the Project Fund after completion of the Project shall be transferred
to the debt service fund and used to pay principal of and interest on the Notes.
18. Designation of Notes as Qualified Tax-Exempt Obligations. The Municipality
hereby designates the Notes as "qualified tax-exempt obligations" within the meaning and for the purpose of Section
265(b)(3) of the Internal Revenue Code of 1986, as amended. The Municipality reasonably anticipates that the amount
of tax-exempt obligations (other than obligations described in Section 265(b)(3)(C)(ii)) which will be issued during the calendar
year by the Municipality (i) any issuer with respect to which the Municipality is deemed to be an "on behalf of"
issuer, and (ii) all subordinate entities which are treated as one issuer under Section 265(b)(3)(E) of the Code, will not
exceed $10,000,000, and not more than $10,000,000 of obligations issued by the Municipality (together with those issued by
any other issuers that are treated as on issuer under such Section 265(b)(3)) during the 2014 calendar year will be designated
as "qualified tax-exempt obligations".
Section 19. Non-Arbitrage Certification. The Municipality certifies
and covenants with the owner of the Notes that so long as the principal of any Note remains unpaid, monies on deposit in any
fund or account in connection with the Notes, whether or not such monies were derived from the proceeds of the sale of the
Notes or from any other source, will not be used in a manner which will cause the Notes to be "arbitrage bonds"
within the meaning of Section 148 of the Code, and any lawful regulations promulgated thereunder, as the same presently exist,
or may from time to time hereafter be amended, supplemented or revised. The Municipality reserves the right, however,
to make any investment of such monies permitted by Tennessee law and this Resolution if, when and to the extent that said
Section 148 or regulations promulgated thereunder shall be repealed or relaxed or shall be held void by final decision of
a court of competent jurisdiction, but only if any investment made by virtue of such repeal, relaxation, or decision would
not, in the opinion of counsel of recognized competence in such matters, result in making the interest on the Notes subject
to inclusion in gross income of the owner thereof for federal income tax purposes.
The Municipality covenants that it shall comply with Section 148(f) of the Code, unless legally exempted therefrom and it
represents that in the event it shall be required by Section 148(f) of the Code to pay "Rebatable Arbitrage," as
defined in the regulations promulgated under the Code, to the United States Government, it will make such payments as and
when required by said Section 148(f) and will take such other actions as shall be necessary or permitted to prevent the interest
on the Notes from becoming subject to inclusion in federal gross income of the owner of the Notes for purposes of federal
Resolution a Contract. The provisions of this Resolution shall constitute a contract between the Municipality
and the owner of the Notes, and after the issuance of the Notes, no change, variation, or alteration of any kind in the provisions
of this Resolution shall be made in any manner, until such time as all installments of the principal of and interest on the
Notes shall have been paid in full or the consent of the registered owner of the Notes has been obtained; provided, however,
that the Municipality is hereby authorized to make such amendments to this Resolution as will not impair the rights or security
of the owner of the Notes.
21. No Action to be Taken Affecting Validity of the Notes. The Municipality
hereby covenants and agrees that it will not take any action, that would in any manner affect the validity of the Notes or
limit the rights and remedies of the owner from time to time of such Notes. The Municipality further covenants that
it will not take any action that will cause the interest on the Notes to be subject to inclusion in gross income of the owner
thereof for purposes of federal income taxation.
Section 22. Miscellaneous Acts. The Mayor, the City Recorder, and
all other appropriate officials of the Municipality are hereby authorized, empowered, and directed to do any and all such
acts and things, and to execute, acknowledge, and deliver all such documents, instruments, and certifications, specifically
including but not limited to, making arbitrage certifications and executing a note purchase agreement in connection with the
purchase of the Notes, in addition to those acts, things, documents, instruments, and certifications hereinbefore authorized
and approved, as may in their discretion, be necessary or desirable to implement or comply with the intent of this Resolution;
or any of the documents herein authorized and approved; or for the authorization, issuance, and delivery of the Notes.
Failure to Present Notes. Subject to the provisions of Section 3 hereof, in the event any Note shall not be presented
for payment when the principal becomes due at maturity and in the event monies sufficient to pay such Note shall be held by
the Note Registrar for the benefit of the owner thereof, all liability of the Municipality to such owner for the payment of
such Note shall forthwith cease, terminate, and be completely discharged. Thereupon, the Note Registrar shall hold such
monies, without liability for interest thereon, for the benefit of the owner of such Note who shall thereafter be restricted
exclusively to such monies for any claim under this Resolution or on, or with respect to, said Note, subject to escheat or
other similar law, and any applicable statute of limitation.
Section 24. Payments Due on Saturdays, Sundays, and Holidays. Whenever
the interest on or principal of any Note is due on a Saturday or Sunday or, at the place designated for payment, a legal holiday
or a day on which banking institutions are authorized by law to close, then the payment of the interest on or the principal
of such Note need not be made on such date but must be made on the next succeeding day not a Saturday, Sunday, or a legal
holiday or a day upon which banking institutions are authorized by law to close, with the same force and effect as if made
on the date of maturity; and no interest shall accrue for the period after such date.
Section 25. No Recourse Under Resolution or on Notes. All stipulations,
promises, agreements, and obligations of the Municipality contained in this Resolution shall be deemed to be the stipulations,
promises, agreements, and obligations of the Municipality and not of any officer, director, or employee of the Municipality
in his or her individual capacity, and no recourse shall be had for the payment of the principal of or interest on the Notes
or for any claim based thereon or under this Resolution against any officer, director, or employee of the Municipality or
against any official or individual executing the Notes.
Section 26. Severability. If any section, paragraph, or provision
of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such
section, paragraph, or provision shall not affect any of the remaining provisions hereof.
Section 27. Repeal of Conflicting Resolutions and Effective Date.
All resolutions and orders, or parts thereof, in conflict with the provisions of this Resolution, are, to the extent of such
conflict, hereby repealed, and this Resolution shall be in effect as of the date of its adoption the welfare of the Municipality
Approved and adopted
this 10th day of November, 2014.