Corporate Resolution Authorizing Warrants by mqy11676

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									2008240.1

                                       ORDINANCE NO. O-25-08

                   Authorizing the Issuance of a General Obligation Line of Credit
                   Master Warrant in the Principal Amount of up to $7,000,000.00

        BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GADSDEN, ALABAMA
(herein called the “City”) as follows:

                             Section 1. Findings

        The Council has found and ascertained and does hereby declare as follows:

               (a)      It is necessary and desirable and in the public interest that the City procure a tax-
        exempt line of credit for the purpose of providing temporary funding to expand the Gadsden City
        High School, construct roads and install water and sewer facilities on Airport Road, and for
        general municipal purposes, including, but not limited to, those purposes permitted by
        Amendment No. 429 to the Constitution of Alabama of 1901 (the “Improvements”).

               (b)     Pursuant to Resolution No. R-154-08, adopted by the City Council on
        May 6, 2008, the City previously authorized the Mayor to enter into a tax-exempt line of credit
        with Wachovia Bank, N.A. (the “Bank”).

                 (c)     The City desires to provide herein for the issuance of a bank qualified tax-exempt
        general obligation warrant of the City (herein called the “Warrant”) in order to evidence the line
        of credit with the Bank.

                 (d)    It is necessary and desirable and in the public interest that the City borrow
        temporarily on the full faith and credit of the City the sum of up to $7,000,000.00 to pay the costs
        of the Improvements and to pay a portion of the costs of issuing the Warrant.

                             Section 2. Authorization of the Issuance of the Warrant

        (a)     Pursuant to the applicable provisions of the Constitution and laws of the State of
Alabama, including particularly Section 11-47-2 of the Code of Alabama of 1975, and for the purposes
described in Section 1 of this ordinance, there is hereby authorized to be borrowed from the Bank the
aggregate sum of up to $7,000,000.00, and, in evidence of the sum so borrowed, there is hereby
authorized to be issued by the City one General Obligation Line of Credit Master Warrant (herein called
the “Warrant”) of the City drawn on the Director of Finance in the principal amount of up to
$7,000,000.00.

         (b)      The Warrant shall be dated the date of its issuance and shall mature 364 days from
Closing, unless extended for an additional 364 days upon request by the City and approval by the Bank.
Interest payable monthly with principal payable 364 days from Closing, unless otherwise extended. The
interest rate shall be a variable rate equal to 67% of LIBOR Market Index Rate plus 21 basis points
calculated on an actual 360-day basis. The City will pay a 0.35% unused fee payable quarterly in arrears
for unused portions of the line of credit. The Warrant shall evidence a loan to the City in an amount equal
to the principal amount of $7,000,000.00, or so much thereof as may be advanced by the Bank thereunder,
and the Warrant shall be issued against payment of the principal amount of $7,000,000.00, or so much
thereof as may be advanced by the Bank thereunder, and shall be payable at the Bank’s office in Gadsden,
Alabama. For purposes of the Warrant, “LIBOR Market Index Rate” means as of any date of
determination, the offered rate for deposits in U.S. dollars for a one-month period which appears on the
Telerate Page 3750 at approximately 11:00 a.m. London, England time, on such date, or if such date is
not a date on which dealings in U.S. dollars are transacted in the London interbank market, then on the
next preceding day on which such dealings were transacted in such market.

         The City reserves and shall have the privilege of prepaying all or any part of the principal of the
Warrant at any time and from time to time, without penalty or premium and without any prior notice,
provided that, at the time of each such prepayment, the City pays the interest which shall have accrued, to
the date of such prepayment.

        (c)      The Warrant shall be a master warrant, and the proceeds of the loan evidenced thereby
will be advanced from time to time to the City by the Bank upon receipt of a written request by the City,
in substantially the form of Exhibit A hereto, signed by the Mayor of the City or the Director of Finance
of the City and attested by the City Clerk of the City.

       (d)     The Warrant has been designated by the City as a “qualified tax-exempt obligation” for
purposes of paragraph (3) of subsection (b) of Section 265 of the Internal Revenue Code of 1986, as
amended, for purposes of bank interest deduction eligibility.

                              Section 3. Execution of the Warrant

         The Warrant shall be executed by the Mayor. The City Clerk shall attest the same by affixing her
signature thereto and shall affix the corporate seal of the City thereto. The Warrant shall be registered in
the records maintained by the Director of Finance as a claim against the City. These officers are hereby
authorized and directed so to execute and attest the Warrant, affix the said seal thereto and make such
registration.

                              Section 4. General Obligation Pledge

        The indebtedness evidenced and ordered paid by the Warrant 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 5. Form of Warrant

        The Warrant shall be in substantially the form of Exhibit B hereto.

                              Section 6. Delivery of Warrant, Use of Proceeds Therefrom

         The Director of Finance is hereby authorized and directed to deliver the Warrant, which shall
have been executed, sealed, attested and registered as herein provided, to the Bank, at such time as she
shall determine is appropriate under the circumstances. The proceeds of the Warrant shall be used solely
for the purposes for which the Warrant is herein authorized to be issued.

                              Section 7. Sources of Payment

        The principal and interest on the Warrant shall be paid in the following order:

                 (1)     First, from the proceeds of a future issuance of general obligation warrants of the
        City;

                 (2)     Then, if necessary, from the General Fund of the City of Gadsden.


                                                  2
         ADOPTED by the City Council on May 27, 2008.




                                            __________________________________
                                            Ben Reed, President
[SEAL]

ATTEST:


Iva Nelson, City Clerk

                                            APPROVED on: ____________, 2008



                                            Sherman Guyton, Mayor




                                           3
                                              EXHIBIT A

                                        Loan Advance Request

TO:     Wachovia Bank, N.A., (branch located in Gadsden, Alabama)

RE:     General Obligation Line of Credit Master Warrant (Wachovia
        Bank 2008), issued by the City of Gadsden, pursuant to an
        ordinance adopted by the City on May 27, 2008 (the “Warrant
        Ordinance”)

       Capitalized terms not otherwise defined herein shall have the meanings assigned in the Warrant
Ordinance.

                                   Request for Payment by the City

        The City hereby requests payment under the Warrant of

                                 $_______________________________

                                                     to

Name of Payee:

Address of Payee:

Taxpayer ID of Payee:

        Such payment will be made for the following purpose(s):




                                 (Describe purpose in reasonable detail)

        The City hereby certifies that (i) the items for which payment is hereby requested are not items
for which any previous request for payment has been made and (ii) the purpose for which such payment is
to be made is one authorized to be paid under the Warrant Ordinance.

        Attached to this loan advance request is an invoice or invoices from the payee named (or, if the
City is requesting reimbursement, from the person to whom the City made payment) showing that the
amount requested to be paid is or was due and payable for the purpose stated in this loan advance request.

        DATED: _________________.

                                                CITY OF GADSDEN

                                                By:
                                                                Authorized City Representative
ATTEST:


                 City Clerk


                                               A-1
                                                EXHIBIT B

                                             Form of Warrant

                                  UNITED STATES OF AMERICA
                                      STATE OF ALABAMA
                                       CITY OF GADSDEN
                                     GENERAL OBLIGATION
                               LINE OF CREDIT MASTER WARRANT
                                     (WACHOVIA BANK 2008)


         The City of Gadsden, a municipal corporation under the laws of Alabama (the “City”), for value
received, hereby acknowledges itself indebted to Wachovia Bank, a national banking corporation (the
“Holder”), or its registered assigns noted hereon and on the registration records of the City maintained for
that purpose, in the principal amount of Seven Million Dollars ($7,000,000.00), or so much thereof as
may be advanced by the Holder hereunder, and hereby directs the Director of Finance of the City to pay at
the Gadsden, Alabama office of the Holder or at such other place as Holder may from time to time
designate in lawful money of the United States of America, the principal amount of Seven Million Dollars
($7,000,000.00), or so much thereof as may be advanced by the Holder hereunder, and to pay interest
from the date advanced until payment in full on the unpaid principal balance of the amount advanced
hereunder at a variable rate equal to the 67% of LIBOR Market Index Rate, as defined below, plus 21
basis points calculated on an actual 360-day basis. Such interest shall be payable in lawful money of the
United States of America at the place designated for principal payments, payable monthly from the date
hereof and upon payment in full. Interest will be computed on the basis of a 360-day year with 12 months
of 30 days each. Principal of this note shall be payable in full, if not sooner paid, on the first anniversary
of the date hereof. The City will pay a 0.35% unused fee payable quarterly in arrears for unused portions
of the line of credit. For purposes of the Warrant, “LIBOR Market Index Rate” means as of any date of
determination, the offered rate for deposits in U.S. dollars for a one-month period which appears on the
Telerate Page 3750 at approximately 11:00 a.m. London, England time, on such date, or if such date is
not a date on which dealings in U.S. dollars are transacted in the London interbank market, then on the
next preceding day on which such dealings were transacted in such market.

        This Warrant is a master warrant, and the proceeds of the loan evidenced hereby will be advanced
from time to time to the City by the Holder upon receipt of a written request by the City, in substantially
the form of Exhibit A to the Warrant Ordinance (as defined below), signed by the Mayor of the City or
the Director of Finance of the City and attested by the City Clerk of the City. It is contemplated that any
amounts advanced under this Warrant may be prepaid from time to time by the City and subsequently re-
advanced by the Holder, up to a maximum principal amount at any one time outstanding not exceeding
the face amount of this Warrant. By reason of prepayments hereon, there may be times when no
indebtedness is owing hereunder, and, notwithstanding any such occurrence, this Warrant shall remain
valid and shall be in full force and effect as to each subsequent principal advance made hereunder.

        Each principal advance and payment on this Warrant shall be reflected by notations made by the
Holder on its internal records (which may be kept on computer or otherwise), and the Holder is hereby
authorized to record on such records all such principal advances and payments. The aggregate unpaid
amount reflected by the Holder’s notations on its internal records (whether on computer or otherwise)
shall be deemed rebuttably presumptive evidence of the principal amount remaining outstanding and
unpaid on this Warrant. No failure of the Holder so to record any advance or payment shall limit or
otherwise affect the obligation of the City hereunder with respect to any advance, and no payment of
principal by the City shall be affected by the failure of the Holder so to record the same.


                                                B-1
        This Warrant is issued pursuant to the provisions of Section 11-47-2 of the Code of Alabama
1975, to evidence the indebtedness of the City for money loaned for the purpose of expanding Gadsden
High School and constructing roads and installing water and sewer facilities on Airport Road for general
municipal purposes, including, but not limited to, those purposes permitted by Amendment No. 429 to the
Constitution of Alabama of 1901. An ordinance authorizing the issuance of this Warrant was adopted by
the governing body of the City on May 27, 2008, at a meeting duly held and conducted (the “Warrant
Ordinance”).

         The indebtedness evidenced by this Warrant is a general obligation of the City, and the full faith
and credit of the City are hereby irrevocably pledged to the punctual payment of the principal hereof and
the interest hereon.

        The principal of this Warrant may be prepaid at any time without penalty upon payment of all
accrued interest then due hereon and the payment of such principal sum.

        It is hereby recited, certified and declared that all acts, conditions and things required by the
Constitution and laws of the State of Alabama to happen, exist and be performed precedent to and in the
execution, registration and issuance of this Warrant, and the adoption of the ordinance authorizing its
issuance, have happened, do exist and have been performed as so required, and that the principal amount
of this Warrant, together with all other indebtedness of the City, is within every debt and other limit
prescribed by the Constitution and laws of the State of Alabama.

         Neither any failure nor any delay on the part of the Holder in exercising any right, power or
privilege under this Warrant shall operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise or the exercise of any other right, power or privilege. No
modification, amendment or waiver of any provisions of this Warrant shall be effective unless in writing
and signed by a duly authorized officer of the Holder, and then the same shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand on the City in any case
shall entitle the City to any other or further notice or demand in the same, similar or other circumstances.

         Any provision of this Warrant that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating
the remaining provision hereof or affecting the validity or enforceability of such provision in any other
jurisdiction.

         All rights, powers and remedies of the Holder under this Warrant and now or hereafter existing at
law, in equity or otherwise shall be cumulative and may be exercised successively or concurrently.

         The Holder will receive an opinion of bond counsel that interest on the Warrant will be excluded
from gross income under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”).
The City will certify that the Warrant will be a “Qualified Tax-Exempt Obligation” under Section
265(b)(3)(B) of the Code for purposes of bank interest deduction eligibility. Should subsequent actions
by the City cause the interest on the Warrant to be included in the gross income of the Holder for federal
income tax purposes, the interest rate will be adjusted to that level necessary to ensure that the after-tax
yield on the Warrant is equal to the anticipated after-tax yield on the Warrant contemplated by the Holder
at the time of purchase. The City will pay to the Holder any resulting tax penalties.

      This Warrant shall be construed in accordance with and governed by the laws of the State of
Alabama.




                                                B-2
        IN WITNESS WHEREOF, the City has caused this Warrant to be executed in its name and on
its behalf by its Mayor and attested by its Clerk and its corporate seal to be impressed hereon, and has
caused this Warrant to be dated ______________________, 2008.



                                                CITY OF GADSDEN, ALABAMA

                                                By:
                                                                Sherman Guyton, Its Mayor
[SEAL]

ATTEST:


Iva Nelson, City Clerk



        It is hereby certified that this Warrant and the interest hereon have been registered by me as a
claim against the City of Gadsden, Alabama.



                                                By:
                                                      Lisa Rosser, Director of Finance of the City of
                                                      Gadsden, Alabama


                                        OWNERSHIP
                                 REGISTRATION CERTIFICATE


         The principal of and interest on this obligation will be paid only to the named Holder, or its
registered assigns as shown hereon and on the books of the City maintained for that purpose by its
undersigned registrar. (No writing hereon except by registrar.)

Registered Owner                               Signature of Finance Director

Wachovia Bank, N.A.




                                              B-3

								
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