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061-05 INDUSTRIAL DEVELOPMENT AUTHORITY . COUNTY OF FREDERICK VIRGINIA , "- May 5, 2005 (540) 665-5666 Fax (540) 667-0370 Board of Supervisors County of Frederick, Virginia 107 North Kent Street Winchester, Virginia 22601 Industrial Development Authority ofthe County of Frederick, Virginia Proposed Financing for Westminster-Canterbury of Winchester, Inc. d/b/a Shenandoah Valley Westminster-Canterbury Westminster-Canterbury of Winchester, Inc., d/b/a Shenandoah Valley Westminster- Canterbury ("Corporation"), has requested that the Industrial Development Authority of the County of Frederick, Virginia ("Authority"), recommend approval to the Board of Supervisors of the County of Frederick, Virginia in connection with the issuance of revenue bonds, in one or more series, from time to time, by the Industrial Development Authority of the City of Winchester ("Winchester Authority") in an amount not to exceed $75,000,000 ("Bonds") to assist the Corporation with (1) the financing of an expansion project at the Corporation's residential and health care center (the "Facility") located at 300 Westminster-Canterbury Drive in Winchester, Virginia, and a portion of which is located in Frederick County, Virginia, including without limitation the acquisition, construction, equipping and/or renovation of (a) approximately 64 additional independent living apartments in a new residential building consisting of approximately 177,000 square feet, (b) a new vitality center including new fitness, pool and recreational area consisting of approximately 15,000 square feet, (c) existing dining, kitchen and fitness areas of the Facility and (d) other capital improvements at the Facility; (2) refunding the outstanding principal amount of the Winchester Authority's Residential Care Facility First Mortgage Revenue Bonds (Westminster-Canterbury of Winchester, Inc.), Series 1998 which were issued on April 28, 1998 for the purposes of (A) refunding the Winchester Authority's Replacement Bonds (Westminster-Canterbury of Winchester, Inc.), Series 1991, which were issued on September 11, 1991 to refund the Winchester Authority's Residential Care Facility First Mortgage Revenue Bonds (Westminster-Canterbury of Winchester, Inc.), Series 1985, which were issued on July 1, 1985 to finance the acquisition, construction and equipping of the Facility, (B) financing the construction and equipping of an approximately 47,000 square foot independent living apartment building at the Facility, and (C) financing the costs of renovations to the Facility's health center; (3) the funding of working capital and capitalized interest related to the expansion project and a debt service reserve fund for the bonds; and (4) the payment of a portion of the expenses incurred in connection with the issuance of the bonds. ("Project"). Because a portion of the Bonds will be used to finance part of the Project to be 107 North Kent Street, Winc.~ester, Virginia 22601-5000 located in the County of Frederick, Virginia, Section 15.2-4905 of the Code of Virginia of 1950, as amended ("Virginia Code"), requires concurrence by the Board of Supervisors of the County of Frederick, Virginia with the inducement resolution adopted by the Winchester Authority on May 5, 2005. The Authority has conducted a public hearing on the proposed financing of the Project and has recommended that you approve the issuance of the Bonds as required by Section l47(f) of the Internal Revenue Code of 1986, as amended, and Virginia Code Section 15.2-4906. Attached hereto is (1) a certificate evidencing the conduct of the public hearing and the action taken by the Authority, (2) the Fiscal Impact Statement required pursuant to Virginia Code Section 15.2-4907, and (3) the form of resolution suggested by counsel to evidence your approval. Secret dustrial Deve pment Authority of the County of Frederick, VirgInia -2- At a regular meeting of the Board of Supervisors of the County of Frederick, Virginia, held on the 11th day of May, 2005, the following members of the Board of Supervisors were recorded as present: PRESENT: Richard C. Shickle, Chairman; Gary W. Dove, Vice Chairman; Gene E. Fisher; Lynda J. Tyler; Bill M. Ewing; Barbara E. Van Osten; and Gina A. Forrester. On motion by Gary W. Dove , seconded by Gina A. Forrester the attached Resolution was adopted by a majority of the members of the Board of Supervisors by a roll call vote, the votes being recorded as follows: MEMBER VOTE Richard. C. Shickle Aye Gary W. Dove Aye Gene E. Fisher Aye Lynda J. Tyler Aye Bill M. Ewing Aye Barbara E. Van Osten Aye Gina A. Forrester Aye RESOLUTION APPROVING THE ISSUANCE OF BONDS BY THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF WINCHESTER FOR THE BENEFIT OF WESTMINSTER-CANTERBURY OF WINCHESTER, INC. d/b/a SHENANDOAH V ALLEY WESTMINSTER-CANTERBURY WHEREAS, the Industrial Development Authority of the County Frederick, Virginia ("Authority"), has been asked by Westminster-Canterbury of Winchester, Inc., d/b/a Shenandoah Valley Westminster-Canterbury ("Corporation") to approve the issuance of revenue bonds by the Industrial Development Authority of the City of Winchester, ("Winchester Authority"), in an amount not to exceed $75,000,000 ("Bonds"), in one or more series, from time to time, which will be used to (1) finance an expansion project at the Corporation's residential and health care center (the "Facility") located at 300 Westminster-Canterbury Drive in Winchester, Virginia, and a portion of which is located in Frederick County, Virginia, including without limitation the acquisition, construction, equipping and/or renovation of (a) approximately 64 additional independent living apartments in a new residential building consisting of approximately 177,000 square feet, (b) a new vitality center including new fitness, pool and recreational area consisting of approximately 15,000 square feet, (c) existing dining, kitchen and fitness areas of the Facility and (d) other capital improvements at the Facility; (2) refund the outstanding principal amount of the Winchester Authority's Residential Care Facility First Mortgage Revenue Bonds (Westminster-Canterbury of Winchester, Inc.), Series 1998 which were issued on April 28, 1998 for the purposes of (A) refunding the Winchester Authority's Replacement Bonds (Westminster- Canterbury of Winchester, Inc.), Series 1991, which were issued on September 11, 1991 to refund the Winchester Authority's Residential Care Facility First Mortgage Revenue Bonds (Westminster-Canterbury of Winchester, Inc.), Series 1985, which were issued on July 1, 1985 to finance the acquisition, construction and equipping of the Facility, (B) financing the construction and equipping of an approximately 47,000 square foot independent living apartment building at the Facility, and (C) financing the costs of renovations to the Facility's health center; (3) fund working capital and capitalized interest related to the expansion project and a debt service reserve fund for the bonds; and (4) pay a portion ofthe expenses incurred in connection with the issuance of the bonds (collectively, the "Project"), and has held a public hearing on May 5,2005; WHEREAS, Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), provides that the governmental unit having jurisdiction over the issuer of private activity bonds and over the area in which any facility financed with the proceeds of private activity bonds is located must approve the issuance of the bonds and Section 15.2-4906 of the Industrial Development and Revenue Bond Act, Chapter 49, Title 15.2, Code of Virginia of 1950, as amended ("Act") sets forth the procedure for such approval; WHEREAS, Section 15.2-4905 of the Act provides that if a locality has created an industrial development authority, no industrial development authority created by a second locality may finance a facility located in the first locality unless the governing body of such first locality concurs with the inducement resolution adopted by the second locality; WHEREAS, a portion of the Project is located in the County of Frederick, Virginia ("County") and the Board of Supervisors of the County of Frederick, Virginia ("Board") constitutes the highest elected governmental unit of the County; WHEREAS the Winchester Authority adopted an inducement resolution (the "Inducement Resolution") on May 5, 2005 and the Authority has recommended that the Board concur in the Inducement Resolution for the Winchester Authority to issue the Bonds in order to comply with Section l47(f) of the Code and Section 15.2-4906 of the Code of Virginia of 1950, as amended; WHEREAS, a copy of the Authority's resolution concurring in the issuance of the bonds to assist with the financing, and a copy of the Inducement Resolution, a certificate of the public hearing and a Fiscal Impact Statement have been filed with the Board; and WHEREAS, the Authority has recommended that the Board approve the issuance of the Bonds. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE COUNTY OF FREDERICK VIRGINIA: 1. The Board of Supervisors of the County of Frederick, Virginia concurs in the Inducement Resolution for the issuance of the Bonds by the Winchester Authority as required by Section l47(f) of the Code and Sections 15.2-4905 and 15.2-4906 of the Act to permit the Authority to assist in the financing. 2. The Board of Supervisors of the County of Frederick, Virginia approves the issuance of the Bonds by the Winchester Authority. Such approval does not constitute an endorsement to a prospective purchaser of the Bonds or the creditworthiness of the Corporation. 3. The approval of the issuance of the Bonds, as required by Section 147(f) of the Code does not constitute (a) an endorsement of the Bonds or the creditworthiness of the Corporation or the Project or (b) a representation by the Board that any permits and approvals, including site plan approval, zoning or rezoning, any special use permit, water and sewer connections, roads and building permits are or will be available with respect to the Project. The Bonds shall provide that neither the County nor the Authority shall be obligated to pay the Bonds or the interest thereon or other costs incident thereto and the Bonds shall not be payable out of any funds or properties other than specifically pledged thereto. 4. This resolution shall take effect immediately upon its adoption. -2- Adopted by the Board of Supervisors of the County of Frederick, Virginia this II th day of May, 2005. [SEAL] Board Resolution No.: 061-05 -3- FISCAL IMPACT STATEMENT FOR PROPOSED BOND FINANCING Date: May 5, 2005 To the Board of Supervisors ofthe County of Frederick, Virginia Applicant: Westminster-Canterbury of Winchester, Inc., d/b/a Shenandoah Valley Westminster-Canterbury Facility: Residential and Health Care Facility 1. Maximum amount of financing sought. $75,000,000 2. Estimated taxable value of the facility's real property to be constructed in the locality. N/A 3. Estimated real property tax per year using present tax rates. N/A 4. Estimated personal property tax per year using present tax rates. N/A 5. Estimated merchants' capital tax per year using present tax rates. N/A 6. (a) Estimated dollar value per year of goods that will be purchased from Virginia companies within the locality. $100,000 (b) Estimated dollar value per year of goods that will be purchased from non-Virginia companies within the locality . $2,213,000 (c) Estimated dollar value per year of services that will be purchased from Virginia companies within the locality. $75,000 (d) Estimated dollar value per year of services that will be purchased from non-Virginia companies within the locality. $578,000 7. Estimated number of regular employees on year round basis. 225 FTEs 8. Average annual salary per employee. $29,000 ,) '-,,\ ,~ ~~::- CERTIFICATE The undersigned Secretary of the Industrial Development Authority of the County of Frederick, Virginia ("Authority") certifies as follows: 1. A meeting of the Authority was duly called and held on May 5, 2005, at 10:00 o'clock a.m. in the Council Chambers of the Common Council of the City of Winchester, Virginia, Rouss City Hall, 15 North Cameron Street, Winchester, Virginia pursuant to proper notice given to each Director of the Authority before such meeting. The meeting was open to the public. The time of the meeting and the place at which the meeting was held provided a reasonable opportunity for persons of differing views to appear and be heard. 2. The Chairman announced the commencement of a public hearing on the application of Westminster-Canterbury of Winchester, Inc., d/b/a Shenandoah Valley Westminster-Canterbury and that a notice of the hearing was published once a week for two successive weeks in a newspaper having general circulation in the County of Frederick, Virginia ("Notice"), with the second publication appearing not less than seven days nor more than twenty- one days prior to the hearing date. A copy of the Notice has been filed with the minutes of the Authority and is attached as Exhibit A. 3. A summary of the statements made at the public hearing is attached as Exhibit B. 4. Attached as Exhibit C is a true, correct and complete copy of a resolution ("Resolution") adopted at such meeting of the Authority by a majority of the Directors present at such meeting. The Resolution constitutes all formal action taken by the Authority at such meeting relating to matters referred to in the Resolution. The Resolution has not been repealed, revoked, rescinded or amended and is in full force and effect on this date. \\FrN\240706.2 WITNESS my hand and the seal of the Authority, this 5th day of May, 2005. '"'-- uthority of the [SEAL] Exhibits: A - Copy of Certified Notice B - Summary of Statements C - Resolution -2- EXHIBIT A The Winchester Star ' Thursday, April 21, 2005 NOTICE OF JOINT PUBLIC HEARING BY INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF WINCHESTER AND THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OFFREDERICK,VIRGINIA, ON PROPOSED REVENUE BOND FINANCING BY INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF WINCHESTER Notice is hereby given that the Industrial Development Authority of the City of Winchester (the "Winchester Authority"), whose address is 2 North Cameron Street, Suite 100. Winchester, Virginia 22601, and c/o Michael L. Bryan, Esquire, Secretary, 9 Court Square, Winchester, Virginia 22601, and the Industrial Development Authority of the County of Frederick, Virginia (the "Frederick Authorify"), whose address is 1 07 North Kent Street, Winchester, Virginia 22601, will hold a joint public hearing on the application of Westminster-Canterbury cif Winchester, Inc., a Virginia non- stock, nonprofit corporation, d/b/a Shenandoah Valley Westminster- Canterbury (the "Corporation"), whose address is .300 Westminster- Canterbury Drive, Winchester, Virginia 22603, requesting the Winchester Authority to issue up to $75,000,000 of its revenue bonds, in one or more series from time to lime, to assist the Corporation in (1) financing an expansion project at the Corporation's residential and h.ealth care center (the "Facility") located at 300 Westminster-Canterbury Drive in Winchester, Virginia, and a portion of which is iocated in Frederick County, Virginia, including without limitation the acquisition, construction, equip- ping and/or renovation of (a) approximately 64 additional independent liv- ing apartments in a new residentiai buiiding consisting of approximately 177 ,000 square feet, (b) a new vitality center including new fitness, pool and recreational area consisting 01 approximately 15,000 square feet, (c) existing dining, kitchen and fitness areas of the Facility and (d) other cap- ital improvements at the Facility; (2) refunding the outstanding principal amount (jf the Winchester AiJthority's Residential Care Facility First Mortgage Revenue Bonds (Westminster-CanterbiJry 9f Winchester, Inc.), Series 1998 which were issued on April 28, 1998 for the purposes of (A) refunding the Winchester Authority's Replacement Bonds (Westminster- Canterbury of Winchester, Inc.), Series 1991, which were issued on September 11, 1991 to retund the Winchester Authority's Residential Care Facility First Mortgage Revenue Bonds (Westminster-Canterbury of Winchester, Inc.), Series 1985, which were issued on J\Jiy 1, 1985 to finance the acquisition, construction and equipping of the Facility, (B) financing the construction and equipping of an approximately 47,000 square foot independent living apartment building at the Facility, and (C) financing the costs of renovations to the Facility's health center; (3) fund- ing working capital and capitalized interest related to the expansion proj- ect and a debt service reserve tund for the bonds; and (4) paying a portion of the expenses incurred in connection with the issuance of the bonds. The issuance of revenue bonds as requested by the Corporation will not constitute a debt or pledge of the faith and credit of the Commonwealth of Virginia or the City of Winchester, Virginia, or the County of Frederick, Virginia, and neither the faith and credit nor the taxing power of the Commonwealth of Virginia or any political. subdivision thereof, inciuding the City of Winchester, Virginia, and the County of Frederick, Virginia, will be pledged to the paymerlt of such bonds. . The public hearing, which may be continued or adjourned, will be held at 10:00 o'clock a.m. on May 5, 2005 before the Winchester Authority and the Frederick Authority, in the Council Chambers of the Common Council of the City of Winchester, Virginia, Rouss City Hall, 15 North Cameron Street, Winchester, Virginia. Any person interested in the issuance of the bonds or the location or nature of the proposed project may appear at the hearing and present his or her views. Information regarding the Corporation's application is on file and is open tor inspection at the Winchester Authority's office at 2 North Cameron Street, Suite 100, Winchester, Virginia 22601 and at the office of Michael L Bryan, Esquire, Secretary, 9 Court Square, Win'chester, Virginia 22601 during business hours. Industrial Development Authority of the City of Winchester Industrial Development Authority of the County of Frederick, Virginia .--7 1.(t.1 .0 ~ . ; " .( /M'"I,k) ,?fIe ('iiLt.(., , N"<'V- , ~ \..,,' " THE WINCHESTER STAR, Thursdav. April 28,2005 NOTICE OF JOINT PUBLIC HEARING BY INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF WINCHESTER AND THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA, ON PROPOSED REVENUE BOND FINANCING BY INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF WINCHESTER Notice is hereby given that the Industrial DeVelopment Authority of the City of Winchester (the "Winchester Authority"), whose address is 2 North Cameron Street, Suite 1 00, Winchester, Virginia 22601, and c/o Michael L Bryan, Esquire, Secretary, 9 Court Square, Winchester, Virginia 22601, and the Industrial Development Authority of the County of Frederick, Virginia (the "Frederick Authority"), whose address is 107 North Kent Street, Winchester, Virginia 22601, will hold a joint public hearing on the application of Westminster-Canterbury of Winchester, Inc., a Virginia non- stock, nonprofit corporation, d/b/a Shenandoah Valley Westmlnster- Canterbury (the "Corporation"), whose "ddress is 300 Westminster- Canterbury Drive, Winchester, Virginia 22603, requesting the Winchester Authority to issue up \0 $75,000,000 of its revenue bonds, in one or more series from time to time, to assist the Corporation in' (1) financing an expansion project at the Corporation's residential and health care. center (the "Facility") located at 300 Westminster-Canterbury Drive in Winchester, Virginia, anp a portion of which is located in Frederick County, Virginia, Including without limitation the acquisition, construction, equip- ping and/or renovation of (a) approximately 64 additional independent liv- ing apartments in a new residential building consisting of approximately 177,000 square feet, (b} a new vitality center including new fitness, pool and recreatlonat area consisting of approximately 15,000 square feet, (e) existing dining, kitchen and fitness areas of the Facility and (d) other cap- ital improvements at the Facility; (2) refunding the outstanding principal amount of the Winchester Authority's Residential Care Facility First Mortgage Revenue Bonds (Westminster-Canterbury of Winchester, Inc.), Series 1998 which were issued on Aprii 28, 1998 for the purposes of (A) refunding the Winchester Authority's Replacement Bonds (Westmlnster- Canterbury of Winchester, Inc.), Series 1991, which were issued on September 11, 1991 to ref~nd the Winchester Authority's Residential Care Facility First Mortgage Revenue Bonds (Westminster-Canterbury of Winchester, Inc.\. Series 1985, which were issued on July 1, 1985 to finance the acquisition, construction and equipping ot the Facility, (B) financing the ,construction and equipping of an approximately 47,000 square foot Indfjpendent living apartment building at the Facility, and (C) financing the costs of renovations to the Facility's health center; (3) fund- ing working capital and capitalized interest related to the expansion proj- ect and a debt service reserve fund for the bonds; and (4) paying a portion of the expenses Incurred in connection with the issuance of the bonds. The issuance of revenue bonds as requested by the Corporation wili not consmute a debt or pledge of the faith and credit of the Commonwealth of Virginia or the City of Winchester, Virginia, or the County of Frederick, Virginia, and neither the faith and credit nor the taxing power of the Commonwealth of Virginia or any political subdivision thereof, including the City of Winchester, Virginia, and the Gounty "f Frederick, Virginia, will be pledged to the payment of suphb0l1ds. ' The public hearing, wl;\lch may be continued or adjourned, will be held at 10:00 o'Clock a.m. on M'ay S, ZOOS before theWi~chester Authority and the Frederick Authority, in theCqunel1 Chambers plJhe <;:ommon Council of the City of Winchester, Virgini(l,f\ouss City Hal1;JplNorth Cameron Street, Winchester, Virgirlia. An'lperson interested ifi,.t~elssuance of the bonds or the location or nature of the proposed proje<;t may appear at the hearing and present his or her views. lnforma'!ion regarding the Corporation's application is on file" and is open for inspecjion at the Winchester Authority's office at 2 North Cameron Street, Suite 100, Winchester, Virginia 22601 and at the office of Michael L- Bryan, Esquire, Secretary, 9 Court Square, Winchester, Virginia 22601 during business hours. Industrial Development Authority of the City of Winchester Industrial Development Authority of the County of Frederick, Virginia ,,-\-~q rn0(yllu ~~ EXHIBIT B TO CERTIFICATE Summary of Statements Representatives of Westminster-Canterbury of Winchester, Inc. and McGuireWoods LLP, bond counsel, appeared before the Authority to explain the proposed plan of financing. No one appeared in opposition to the proposed bond issue. EXHIBIT C RESOLUTION OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA RECOMMENDING APPROVAL BY THE BOARD OF SUPERVISORS OF THE COUNTY OF FREDERICK, VIRGINIA OF A PROPOSED ISSUE OF REVENUE BONDS BY THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF WINCHESTER IN AN AMOUNT NOT TO EXCEED $75,000,000 FOR THE BENEFIT OF WESTMINSTER-CANTERBURY OF WINCHESTER, INC. d/b/a SHENANDOAH VALLEY WESTMINSTER-CANTERBURY WHEREAS, Westminster-Canterbury of Winchester, Inc., d/b/a Shenandoah Valley Westminster-Canterbury ("Corporation") has requested that the Industrial Development Authority of the County of Frederick, Virginia ("Authority"), approve the issuance of up to $75,000,000 in revenue bonds, in one or more series, from time to time, by the Industrial Development Authority of the City of Winchester (the "Winchester Authority"), the proceeds of which will be used to (1) finance an expansion project at the Corporation's residential and health care center (the "Facility") located at 300 Westminster-Canterbury Drive in Winchester, Virginia, and a portion of which is located in Frederick County, Virginia, including without limitation the acquisition, construction, equipping and/or renovation of (a) approximately 64 additional independent living apartments in a new residential building consisting of approximately 177,000 square feet, (b) a new vitality center including new fitness, pool and recreational area consisting of approximately 15,000 square feet, (c) existing dining, kitchen and fitness areas of the Facility and (d) other capital improvements at the Facility; (2) refund the outstanding principal amount of the Winchester Authority's Residential Care Facility First Mortgage Revenue Bonds (Westminster-Canterbury of Winchester, Inc.), Series 1998 which were issued on April 28, 1998 for the purposes of (A) refunding the Winchester Authority's Replacement Bonds (Westminster-Canterbury of Winchester, Inc.), Series 1991, which were issued on September 11, 1991 to refund the Winchester Authority's Residential Care Facility First Mortgage Revenue Bonds (Westminster-Canterbury of Winchester, Inc.), Series 1985, which were issued on July 1, 1985 to finance the acquisition, construction and equipping of the Facility, (B) financing the construction and equipping of an approximately 47,000 square foot independent living apartment building at the Facility, and (C) financing the costs of renovations to the Facility's health center; (3) fund working capital and capitalized interest related to the expansion project and a debt service reserve fund for the bonds; and (4) pay a portion of the expenses incurred in connection with the issuance of the bonds ("Project"); WHEREAS, pursuant to Section 15.2-4905 of the Virginia Industrial Development and Revenue Bond Act, Chapter 49, Title 15.2 of the Code of Virginia of 1950, as amended (the "Act"), the Winchester Authority may issue its bonds with respect to facilities outside of the City of Winchester, Virginia if the goveming body of the locality where the facilities are or will be located concurs with the inducement resolution for such bonds adopted by the Winchester Authority; WHEREAS, the Authority has been asked to concur in the resolution adopted by the Winchester Authority on May 5, 2005 (the "Inducement Resolution"), a certified copy of which has been filed with the Authority, evidencing the Winchester Authority's preliminary intention to issue its revenue bonds to assist in the Project; WHEREAS, a public hearing has been held by the Authority regarding the Corporation's request, and the Authority desires to recommend (i) approval of the proposed bond issue to the Board of Supervisors of the County of Frederick, Virginia (the "Board"), and (ii) concurrence of the Board in the adoption of the Inducement Resolution, with respect to that portion of the Project located or to be located in the County, in accordance with the requirements of Section l47(f) of the Intemal Revenue Code of 1986, as amended and Section 15.2-4906 ofthe Act; WHEREAS, (a) no member of the Board of Directors of the Authority is an officer or employee of the County, (b) each member has, before entering upon his duties during his or her present term of office, taken and subscribed to the oath prescribed by Section 49-1 of the Code of Virginia of 1950, as amended and (c) at the time of their appointments and at all times thereafter, including the date hereof, all of the members of the Board of Directors of the Authority have satisfied the residency requirements of the Act; and WHEREAS, no member of the Board of Directors of the Authority has any personal interest or business interest in the Corporation, the bonds, or any of the transactions contemplated therein or has otherwise engaged in conduct prohibited under the Conflict of Interests Act, Chapter 3], Title 2.2 of the Code of Virginia of 1950, as amended in connection with this resolution or any other official action of the Authority in connection therewith. NOW, THEREFORE, BE IT RESOLVED BY THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA: I. The Authority concurs in the Inducement Resolution with respect to the Project and approves the proposed bond issue for the benefit of the Corporation, and the Authority recommends approval thereof and concurrence therewith by the Board of Supervisors of the County of Frederick, Virginia with respect to that portion of the Project located or to be located in the County of Frederick, Virginia. 2. All costs and expenses incurred by the Authority in connection with the Project, including but not limited to the fees and expenses of Authority counsel, shall be paid by the Corporation, together with other charges customarily payable to the Authority. If for any reason such bonds are not issued, it is understood that all such expenses shall be paid by the Corporation and that the Authority shall have no responsibility therefor. 3. The Authority hereby directs the Secretary of the Authority to deliver to the Board of Supervisors of the County of Frederick, Virginia a copy of this resolution, which constitutes the recommendation of the Authority that the Board of Supervisors of the County of Frederick, Virginia concur in the Inducement Resolution with respect to that portion of the Project located or to be located in the County of Frederick, Virginia. 4. This resolution shall take effect immediately upon its adoption. Adopted this 5th day of May, 2005. [SEAL] Secretary tn of Frederick -2-