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011-01 BOARD OF SUPERVISORS A RESOLUTION AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $6,150,000 GENERAL OBLIGATION SCHOOL BONDS OF THE COUNTY OF FREDERICK, VIRGINIA TO BE SOLD TO THE VIRGINIA PUBLIC SCHOOL AUTHORITY AND PROVIDING FOR THE FORM AND DETAILS THEREOF WHEREAS, the Board of Supervisors (the "Board") of the County of Frederick, Virginia (the "County") has determined that it is necessary and expedient to borrow $6,150,000 and to issue its general obligation school bonds to finance certain capital projects for school purposes. WHEREAS, the County has held a public hearing, after due publication of notice, in accordance with Section 15.2-2606, Code of Virginia of 1950, as amended ("Virginia Code") on September 12,2001 on the issuance of school bonds in an amount not to exceed $6,150,000. WHEREAS, the School Board of the County of Frederick, Virginia ("School Board") has requested by resolution the Board to authorize the issuance of the Bonds (as defined below) and has consented to the issuance of the Bonds. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE COUNTY OF FREDERICK, VIRGINIA: 1. Authorization of Bonds and Use of Proceeds. The Board hereby determines that it is advisable to contract a debt and to issue and sell general obligation school bonds of the County in the aggregate principal amount not to exceed $6,150,000 (the "Bonds") for the purpose of financing certain capital projects for school purposes. The Board hereby authorizes the issuance and sale of the Bonds in the form and upon the terms established pursuant to this Resolution. 2. Sale ofthe Bonds. It is determined to be in the best interest ofthe County to accept the offer ofthe Virginia Public School Authority (the "VPSA") to purchase from the County, and to sell to the VPSA, the Bonds at a price determined by the VPSA and accepted by the Chairman of the Board or the County Adminisfrator, such price to be not less than 98% of par and not more than 103% of par (105% of par for bonds with a final maturity of 10 years or less), and upon the terms established pursuant to this Resolution. The County Administrator and the Chairman ofthe Board, or either of them, and such officer or officers of the County as either of them may designate, are hereby authorized and directed to enter into the Bond Sale Agreement with the VPSA providing for the sale of the Bonds to the VPSA in substantially the form on file with the County Administrator, which form is hereby approved ("Bond Sale Agreement"). 3. Details of the Bonds. The Bonds shall be issuable in fully registered form in denominations of $5,000 and whole multiples thereof; shall be dated the date of issuance and delivery of the Bonds; shall be designated "General Obligation School Bonds, Series 200IB"; shall bear interest from the date of delivery thereof payable semi-annually on each January 15 and July 15 (each an "Interest Payment Date"), beginning July 15,2002, at the rates established in accordance with paragraph 4 of this Resolution; and shall mature on July 15 in the years (each a "Principal Payment Date") and in the anlounts established in accordance with paragraph 4 of this Resolution. The Interest Payment Dates and the Principal Payment Dates are subject to change at the request of VPSA. 4. Principal Installments and Interest Rates. The County Administrator is hereby authorized and directed to accept the interest rates on the Bonds established by the VPSA, provided that each interest rate shall be ten one-hundredths of one percent (0.1 0%) over the interest rate to be paid by the VPSA for the corresponding principal payment date of the bonds to be issued by the VPSA (the "VPSA Bonds"), a portion of the proceeds of which will be used to purchase the Bonds, and provided further, that the true interest cost of the Bonds does not exceed seven percent (7%) per annum. The County Administrator is further authorized and directed to accept the aggregate principal amount of the Bonds and the amounts of principal of the Bonds coming due on each Principal Payment Date ("Principal Installments") established by the VPSA, including any changes in the Interest Payment Dates, the Principal Payment Dates and the Principal Installments which may be requested by VPSA provided that such aggregate principal amount shall not exceed the maximum amount set forth in paragraph one and the final maturity ofthe Bonds shall not be later than 21 years from their date. The execution and delivery of the Bonds as described in paragraph 8 hereof shall conclusively evidence such Interest Payment Dates, Principal Payment Dates, interest rates, principal amount and Principal Installments as having been so accepted as authorized by this Resolution. 5. Form of the Bonds. The Bonds shall be initially in the form of one or more temporary typewritten bonds substantially in the form attached hereto as Exhibit A. 6. Payment: Paying Agent and Bond Registrar. The following provisions shall apply to the Bonds: (a) For as long as the VPSA is the registered owner of the Bonds, all payments of principal of, premium, if any, and interest on the Bonds shall be made in immediately available funds to the VPSA at or before 11 :00 a.m. on the applicable Interest Payment Date, Principal Payment Date or date fixed for prepayment or redemption, or if such date is not a business day for Virginia banks or for the Commonwealth of Virginia, then at or before 11 :00 a.m. on the business day next preceding such Interest Payment Date, Principal Payment Date or date fixed for prepayment or redemption; (b) All overdue payments of principal and, to the extent permitted by law, interest shall bear interest at the applicable interest rate or rates on the Bonds; and (c) SunTrust Bank, Richmond, Virginia is designated as Bond Registrar and Paying Agent for the Bonds. 7. Pret>avment or Redemption. The Principal Installments ofthe Bonds held by the VPSA coming due on or before July 15, 2011, and the definitive Bonds for which the Bonds held by the VPSA may be exchanged that mature on or before July 15,2011 are not subject to prepayment or redemption prior to their stated maturities. The Principal Installments of the Bonds held by the VPSA coming due after July 15, 2011 and the definitive Bonds for which the Bonds held by the VPSA may be exchanged that mature after July 15, 201l are subject to prepayment or redemption at the option of the County prior to their stated maturities in whole or in part, on any date on or after July 15,2011 upon payment of the prepayment or redemption prices (expressed as percentages of Principal Installments to be prepaid or the principal amount of the Bonds to be redeemed) set forth below plus accrued interest to the date set for prepayment or redemption: Dates Prices July 15,2011 to July 14,2012, inclusive .............................. 102% July 15,2012 to July 14,2013, inclusive .............................. 101% July 15, 2013 and thereafter .................................................. 100% Provided, however, that the Bonds shall not be subject to prepayment or redemption prior to their stated maturities as described above without first obtaining the written consent of the registered owner of the Bonds. Notice of any such prepayment or redemption shall be given by the Bond Registrar to the registered owner by registered mail not more than ninety (90) and not less than sixty (60) days before the date fixed for prepayment or redemption. The County Administrator is authorized to approve such other redemption provisions, including changes to the redemption dates set forth above, as may be requested by the VPSA. 8. Execution ofthe Bonds. The Chairman or Vice Chairman and the Clerk or any Deputy Clerk ofthe Board are authorized and directed to execute and deliver the Bonds and to affix the seal of the County thereto. The manner of such execution may be by facsimile, provided that if both signatures are by facsimile, the Bonds shall not be valid until authenticated by the manual signature of the Paying Agent. 9. Pledge of Full Faith and Credit., For the prompt payment of the principal of, and the premium, if any, and the interest on the Bonds as the same shall become due, the full faith and credit of the County are hereby irrevocably pledged, and in each year while any of the Bonds shall be outstanding there shall be levied and collected in accordance with law an annual ad valorem tax upon all taxable property in the County subject to local taxation sufficient in amount to provide for the payment of the principal of, and the premium, if any, and the interest on the Bonds as such principal, premium, if any, and interest shall become due, which tax shall be without limitation as to rate or amount and in addition to all other taxes authorized to be levied in the County to the extent other funds ofthe County are not lawfully available and appropriated for such purpose. 10. Use of Proceeds Certificate: Non-Arbitra~e Certificate. The Chairman of the Board and the County Administrator, or either of them and such officer or officers ofthe County as either may designate are hereby authorized and directed to execute a Non-Arbitrage Certificate, if requested by bond counsel, and a Use of Proceeds Certificate setting forth the expected use and investment ofthe proceeds of the Bonds and containing such covenants as may be necessary in order to show compliance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable regulations relating to the exclusion from gross income of interest on the Bonds and on the VPSA Bonds. The Board covenants on behalf ofthe County that (i) the proceeds from the issuance and sale ofthe Bonds will be invested and expended as set forth in such Use of Proceeds Certificate and the County shall comply with the covenants and representations contained therein and (ii) the County shall comply with the provisions of the Code, except as provided above, so that interest on the Bonds and on the VPSA Bonds will remain excludable from gross income for Federal income tax purposes. 11. State Non-Arbitrage Program: Proceeds Agreement. The Board hereby determines that it is in the best interests ofthe County to authorize and direct the County Treasurer to participate in the State Non-Arbitrage Program in connection with the Bonds. The County Administrator and the Chairman of the Board, or either ofthem, and such officer or officers ofthe County as either ofthem may designate, are hereby authorized and directed to execute and deliver a Proceeds Agreement with respect to the deposit and investment of proceeds ofthe Bonds by and among the County, the other participants in the sale of the VPSA Bonds, the VPSA, the investment manager, and the depository substantially in the form on file with the County Administrator, which form is hereby approved. 12. Continuing Disclosure Agreement. The Chairman of the Board and the County Administrator, or either of them, and such officer or officers of the County as either of them may designate are hereby authorized and directed (i) to execute a Continuing Disclosure Agreement, as set forth in Appendix F to the Bond Sale Agreement, setting forth the reports and notices to be filed by the County and containing such covenants as may be necessary in order to show compliance with the provisions ofthe Securities and Exchange Commission Rule 15c2-12 and (ii) to make all filings required by Section 3 of the Bond Sale Agreement should the County be determined by the VPSA to be a MOP (as defined in the Continuing Disclosure Agreement). 13. Filing of Resolution. The appropriate officers or agents of the County are hereby authorized and directed to cause a certified copy of this Resolution to be filed with the Circuit Court of the County. 14. Further Actions. The County Administrator, the Chairman of the Board, and such other officers, employees and agents ofthe County as either ofthem may designate are hereby authorized to take such action as the County Administrator or the Chairman of the Board may consider necessary or desirable in connection with the issuance and sale of the Bonds and any such action previously taken is hereby ratified and confirmed. 15. Effective Date. This Resolution shall take effect immediately. The undersigned Clerk of the Board of Supervisors of the County of Frederick, Virginia, hereby certifies that the foregoing constitutes a true and correct extract from the minutes of a meeting of the Board of Supervisors held on September 12, 2001, and of the whole thereof so far as applicable to the mattefs referred to in such extract. I hereby further certify that such meeting was a regularly scheduled meeting and that, during the consideration of the foregoing resolution, a quorum was present. The front page of this Resolution accurately records (i) the members of the Board of Supervisors present at the meeting, (ii) the members who were absent from the meeting, and (iii) the vote of each member, including any abstentions. WITNESS MY HAND and the seal of the Board of Supervisors of the County of Frederick, Virginia, this 12th day of September, 2001. Clerk, ofthe (SEAL) BOARD RESOLUTION NO.:OII-Ol cc: Cheryl B. Shiffler, Finance Director C. William Orndoff, Jr., Treasurer