Third Supplemental Resolution authorizing the issuance of special limited obligation correctional facilities revenue refunding bonds, series 2001, in an amount not to exceed seventeen million dollars ($17,000,000); making provision for the issuance, sale and payment of said bonds; and establishing the terms thereof and the disposition of proceeds therefrom.

WHEREAS, the Metropolitan County Council (the "Metropolitan Council") of the Metropolitan Government of Nashville and Davidson County (the "Metropolitan Government") did on April 16, 1991 adopt Resolution No. R91-1663, entitled, "Resolution Authorizing Special Limited Obligation Revenue Bonds For Correctional Facilities And Providing For The Security of The Holders Thereof" (the "General Resolution"); and

WHEREAS, pursuant to Section 7.07 of the Charter of the Metropolitan Government (the "Charter"), Title 9, Chapter 21 of the Tennessee Code Annotated, as amended, Section 8.1 of the General Resolution, and Substitute Resolution No. 91-1664, adopted by the Metropolitan Council on April 16, 1991 (the "Series 1991 Resolution"), the Metropolitan Government has issued Special Limited Obligation Correctional Facilities Revenue Bonds, Series 1991, dated June 1, 1991, in the aggregate principal amount of $24,460,000; and

WHEREAS, it appears that the refunding of all the remaining outstanding Special Limited Obligation Correctional Facilities Bonds, Series 1991, maturing September 1, 2002 through September 1, 2007, inclusive, and September 1, 2011 (the "Series 1991 Bonds") will result in debt service savings; and

WHEREAS, the Metropolitan Government has heretofore determined that in order to provide the funds necessary to accomplish the refunding of the Series 1991 Bonds, it is necessary to issue refunding bonds of the Metropolitan Government; and

WHEREAS, it is the intention of the Metropolitan Government to adopt this resolution for the purpose of authorizing not to exceed $17,000,000 in aggregate principal amount of said refunding bonds, in book-entry only form, providing for the issuance, sale and payment of said bonds and establishing the terms thereof and the disposition of proceeds therefrom.

NOW, THEREFORE, BE IT RESOLVED BY THE METROPOLITAN COUNTY COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY, AS FOLLOWS:

ARTICLE I.
DEFINITIONS

Section 1.01 Definitions. Words and terms used herein that are defined in the General Resolution, the Series 1991 Resolution, and the preamble hereto shall have the meanings set forth therein, unless in conflict with a definition hereinafter set forth, in which case the definition hereinafter set forth shall control. The words and terms set forth below shall have the following meanings when used herein:

"Book-Entry Form" or "Book-Entry System" shall mean a form or system, as applicable, under which physical bond certificates in fully registered form are issued to a Depository or to its nominee as Registered Owner, with certificated Bonds being held by and

"immobilized" in the custody of such Depository, under which records maintained by persons, other than the Metropolitan Government or the Registrar, constitute the written record that identifies and records the transfer of the beneficial "book-entry" interest in those Bonds.

"Depository" shall mean any securities depository that is a clearing agency under federal laws operating and maintaining, with its participants or otherwise, a Book-Entry System, including, but not limited to, DTC.

"DTC" shall mean the Depository Trust Company, a limited purpose company organized under the laws of the State of New York, and its successors and assigns.

"DTC Participants" shall mean securities brokers and dealers, banks, trust companies and clearing corporations that have access to the DTC system.

"Letter of Representation" shall mean the Blanket Issuer Letter of Representation to DTC of the Metropolitan Government, dated April 27, 1995.

"Series 1991 Bonds" shall mean the Special Limited Obligation Correctional Facilities Revenue Bonds, Series 1991, of the Metropolitan Government, maturing September 1, 2002 through September 1, 2007, inclusive, and September 1, 2011.

"Series 2001 Bonds" shall mean not to exceed $17,000,000 in aggregate principal amount of Special Limited Obligation Correctional Facilities Revenue Refunding Bonds, Series 2001, of the Metropolitan Government authorized pursuant to the provisions hereof and of the General Resolution.

"Series 2001 Resolution" shall mean this Supplemental Resolution, as hereafter supplemented or amended.

ARTICLE II.
AUTHORIZATION OF SERIES 2001 BONDS

Section 2.01 Principal Amount, Designation and Form. Pursuant to the provisions of the General Resolution, a Series of Refunding Bonds of the Metropolitan Government entitled to the benefit, protection and security of such provisions is hereby authorized in an aggregate principal amount of not to exceed $17,000,000. Such Bonds shall be designated as, and shall be distinguished from the Bonds of all other Series by the title, "Special Limited Obligation Correctional Facilities Revenue Refunding Bonds, Series 2001." The Series 2001 Bonds will be issued only as fully registered, book-entry only Refunding Bonds in denominations of $5,000 or any integral multiple thereof.

Section 2.02 Purposes. The purposes for which the Series 2001 Bonds are being issued are (i) to refund the Series 1991 Bonds, or any portion thereof as shall be designated by the Director of Finance, and (ii) to pay the costs of issuance of the Series 2001 Bonds.

Section 2.03 Date, Maturities and Interest Rates of the Series 2001 Bonds. The Series 2001 Bonds shall be dated as of November 1, 2001, subject to the provisions of the General Resolution, or such other date as the Director of Finance shall determine, and shall mature on the dates and in the corresponding principal amounts and shall bear interest at the rates per annum determined by the Director of Finance in accordance with Section 6.01 of this Series 2001 Resolution. The Series 2001 Bonds shall bear interest from the date thereof at a rate not exceeding a true interest cost of six percent (6.00%) per annum, such interest being payable semi-annually on the first day of March and September of each year, commencing on March 1, 2002. The Bonds shall mature, subject to prior redemption as hereinafter provided, either serially or through mandatory redemption, commencing on the first day of September, 2002, and continuing on the first day of September of each year thereafter through and including September 1, 2011, the final maturity date, in such amounts as shall be established pursuant to Section 6.01 hereof.

Section 2.04 Book Entry System. The Series 2001 Bonds shall be issued and registered pursuant to a Book-Entry System as follows.

Except as otherwise provided in this subsection, the Series 2001 Bonds shall be registered in the name of Cede & Co., as nominee of DTC, which will act as securities depository for the Series 2001 Bonds. References in this Section to a Series 2001 Bond or the Series 2001 Bonds shall be construed to mean the Series 2001 Bond or the Series 2001 Bonds that are held under the Book-Entry System. One Series 2001 Bond for each maturity shall be issued to DTC and immobilized in its custody. A Book-Entry System shall be employed, evidencing ownership of the Series 2001 Bonds in authorized denominations, with transfers of beneficial ownership effected on the records of DTC and the DTC Participants pursuant to rules and procedures established by DTC.

Each DTC Participant shall be credited in the records of DTC with the amount of such DTC Participant's interest in the Series 2001 Bonds. Beneficial ownership interests in the Series 2001 Bonds may be purchased by or through DTC Participants. The holders of these beneficial ownership interests are hereinafter referred to as the "Beneficial Owners." The Beneficial Owners shall not receive the Series 2001 Bonds representing their beneficial ownership interests. The ownership interests of each Beneficial Owner shall be recorded through the records of the DTC Participant from which such Beneficial Owner purchased its Series 2001 Bonds. Transfers of ownership interests in the Series 2001 Bonds shall be accomplished by book entries made by DTC and, in turn, by DTC Participants acting on behalf of Beneficial Owners. SO LONG AS CEDE & CO., AS NOMINEE FOR DTC, IS THE REGISTERED OWNER OF THE SERIES 2001 BONDS, THE REGISTRAR SHALL TREAT CEDE & CO., AS THE ONLY HOLDER OF THE SERIES 2001 BONDS FOR ALL PURPOSES UNDER THIS INDENTURE, INCLUDING RECEIPT OF ALL PRINCIPAL OR PURCHASE PRICE OF, PREMIUM, IF ANY, AND INTEREST ON THE SERIES 2001 BONDS, RECEIPT OF NOTICES, VOTING AND REQUESTING OR DIRECTING THE TRUSTEE TO TAKE OR NOT TO TAKE, OR CONSENTING TO, CERTAIN ACTIONS UNDER THIS RESOLUTION.

Payments of principal, interest, and redemption premium, if any, with respect to the Series 2001 Bonds, so long as DTC is the only owner of the Series 2001 Bonds, shall be paid by the Paying Agent directly to DTC or its nominee, Cede & Co., as provided in the Letter of Representation. DTC shall remit such payments to DTC Participants, and such payments thereafter shall be paid by DTC Participants to the Beneficial Owners. Neither the Metropolitan Government nor the Paying Agent shall be responsible or liable for payment by DTC or DTC Participants, for sending transaction statements, or for maintaining, supervising or reviewing records maintained by DTC or DTC Participants.

In the event that (1) DTC determines not to continue to act as securities depository for the Series 2001 Bonds or (2) the Metropolitan Government determines that the continuation of the Book-Entry System of evidence and transfer of ownership of the Series 2001 Bonds would adversely affect its interests or the interests of the Beneficial Owners of the Series 2001 Bonds, the Metropolitan Government may discontinue the Book-Entry System with DTC. If the Metropolitan Government fails to identify another qualified securities depository to replace DTC, the Metropolitan Government shall cause the Registrar to authenticate and deliver replacement Series 2001 Bonds in the form of fully registered Series 2001 Bonds to each Beneficial Owner.

NEITHER THE METROPOLITAN GOVERNMENT, THE REGISTRAR, THE PAYING AGENT, NOR THE TRUSTEE SHALL HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO ANY DTC PARTICIPANT OR ANY BENEFICIAL OWNER WITH RESPECT TO (i) THE SERIES 2001 BONDS; (ii) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT; (III) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF AND INTEREST ON THE SERIES 2001 BONDS; (iv) THE DELIVERY OR TIMELINESS OF DELIVERY BY DTC OR ANY DTC PARTICIPANT OF ANY NOTICE DUE TO ANY BENEFICIAL OWNER THAT IS REQUIRED OR PERMITTED UNDER THE TERMS OF THIS RESOLUTION TO BE GIVEN TO BENEFICIAL OWNERS, (v) THE SELECTION OF BENEFICIAL OWNERS TO RECEIVE PAYMENTS IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE SERIES 2001 BONDS; OR (vi) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC, OR ITS NOMINEE, CEDE & CO., AS OWNER.

In the event that a Book-Entry System of evidence and transfer of ownership of the Series 2001 Bonds is discontinued pursuant to the provisions of this Section, the Series 2001 Bonds shall be delivered solely as fully registered Series 2001 Bonds without coupons in the authorized denominations, shall be lettered with the prefix letter identifying the Series of which such Series 2001 Bonds is a part, and numbered separately from R-1 upward, and shall be payable, executed, authenticated, registered, exchanged and canceled pursuant to the provisions hereof.

The Metropolitan Government shall not be limited to utilizing a Book-Entry System maintained by DTC but may enter into a custody agreement with any bank or trust company serving as custodian (which may be the Registrar serving in the capacity of custodian) to provide for a book-entry or similar method for the registration and registration of transfer of all or a portion of the Series 2001 Bonds.

SO LONG AS A BOOK-ENTRY SYSTEM OF EVIDENCE OF TRANSFER OF OWNERSHIP OF ALL THE SERIES 2001 BONDS IS MAINTAINED IN ACCORDANCE HEREWITH, THE PROVISIONS OF THIS RESOLUTION RELATING TO THE DELIVERY OF PHYSICAL SERIES 2001 BONDS CERTIFICATES SHALL BE DEEMED INAPPLICABLE OR BE OTHERWISE SO CONSTRUED AS TO GIVE FULL EFFECT TO SUCH BOOK-ENTRY SYSTEM. THE PROVISIONS OF THE LETTER OF REPRESENTATION SHALL SUPERSEDE THIS RESOLUTION IN THE EVENT OF A CONFLICT.

Section 2.05 Places of Payment; Exchange or Transfer.

(a) The principal and Redemption Price of and interest on the Series 2001 Bonds will be payable at the corporate trust office of First Union National Bank, Nashville, Tennessee, successor to Dominion Trust Company of Tennessee, as Trustee, Registrar, and Paying Agent. The Trustee shall make all interest payments with respect to the Series 2001 Bonds on each interest payment date directly to the registered owners as shown on the Bond registration records maintained by the Trustee as of the close of business on the day which is fifteen days preceding an interest payment date (the "Regular Record Date") by check or draft mailed to such owners at their addresses shown on said Bond registration records, without, except for final payment, the presentation or surrender of such registered Series 2001 Bonds, and all such payments shall discharge the obligations of the Metropolitan Government in respect of such Series 2001 Bonds to the extent of the payments so made. Payment of principal of and premium, if any, on the Series 2001 Bonds shall be made upon presentation and surrender of such Series 2001 Bonds to the Trustee as the same shall become due and payable. 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. In the event the Series 2001 Bonds are no longer registered in the name of DTC or its successor or assigns, if requested by the Owner of at least $1,000,000 in aggregate principal amount of the Series 2001 Bonds, payment of interest on such Series 2001 Bonds shall be paid by wire transfer to a bank within the continental United States or deposited to a designated account if such account is maintained with Trustee and written notice of any such election and designated account is given to the Trustee prior to the record date.

(b) Any interest on any Bond which is payable but is not punctually paid or duly provided for on any interest payment date (hereinafter "Defaulted Interest") shall forthwith cease to be payable to the registered owner on the relevant Regular Record Date; and, in lieu thereof, such Defaulted Interest shall be paid by the Metropolitan Government to the persons in whose names the Series 2001 Bonds are registered at the close of business on a date (the "Special Record Date") for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Metropolitan Government shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment, and at the same time the Metropolitan Government shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted Interest as in this Section provided. Thereupon, not less than ten (10) days after the receipt by the Trustee of the notice of the proposed payment, the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which Date shall be not more than fifteen (15) nor less than ten (10) days prior to the date of the proposed payment to the registered owners. The Trustee shall promptly notify the Metropolitan Government of such Special Record Date and, in the name and at the expense of the Metropolitan Government, not less than ten (10) days prior to such Special Record Date, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class postage prepaid, to each registered owner at the address thereof as it appears in the Bond registration records maintained by the Trustee as of the date of such notice. Nothing contained in this Section or in the Series 2001 Bonds shall impair any statutory or other rights in law or in equity of any registered owner arising as a result of the failure of the Metropolitan Government to punctually pay or duly provide for the payment of principal of, premium, if any, and interest on the Series 2001 Bonds when due.

Section 2.06 Qualification for DTC. The Trustee is hereby authorized to take such actions as may be necessary from time to time to qualify and maintain the Series 2001 Bonds for deposit with DTC, including but not limited to, wire transfers of interest and principal payments with respect to the Series 2001 Bonds, utilization of electronic book entry data received from DTC in place of actual delivery of Series 2001 Bonds and provision of notices with respect to Series 2001 Bonds registered by the DTC (or any of its designees identified to the Trustee) by overnight delivery, courier service, telegram, telecopy or other similar means of communication. No such arrangements with DTC may adversely affect the interest of any of the Owners of the Series 2001 Bonds, provided, however, that the Trustee shall not be liable with respect to any such arrangements it may make pursuant to this section.

Section 2.07 Authentication and Delivery. The Trustee is authorized to authenticate and deliver the Series 2001 Bonds to the purchaser thereof upon receipt by the Trustee of the items described in Sections 2.4 and 2.5 of the General Resolution.

Section 2.08 Redemption Prices and Terms.

(a) The Series 2001Bonds shall be redeemable pursuant to the provisions of Sections 2.08(b) and (c) hereof. The Metropolitan Government covenants that any and all such moneys received by it which are to be used to redeem Series 2001 Bonds shall be paid to the Trustee and, in such event, the Trustee shall use any and all such moneys to redeem Series 2001 Bonds when and as the Series 2001 Bonds shall in accordance with their terms be redeemable.

(b) The Series 2001 Bonds maturing September 1, 2002 through September 1, ____, are not subject to redemption prior to maturity. The Series 2001 Bonds maturing on or after September 1, _____, are subject to redemption by the Metropolitan Government on or after September 1, _____, in whole or in part at any time, from any moneys that may be available for such purpose, upon payment of the following redemption prices (expressed as a percentage of principal amount of Series 2001 Bonds to be redeemed) plus interest accrued to the redemption date:

If less than all the Series 2001 Bonds shall be called for redemption, the maturities to be redeemed shall be selected by the Metropolitan Council in its discretion. If less than all of the Series 2001 Bonds within a single maturity shall be called for redemption, the interests within the maturity to be redeemed shall be selected as follows:

(i) if the Series 2001 Bonds are being held under a Book-Entry System by DTC, or a successor Depository, the amount of the interest of each DTC Participant in the Series 2001 Bonds to be redeemed shall be determined by DTC, or such successor Depository, by lot or such other manner as DTC, or such successor Depository, shall determine; or

(ii) if the Series 2001 Bonds are not being held under a Book-Entry System by DTC, or a successor Depository, the Bonds within the maturity to be redeemed shall be selected by the Trustee by lot or such other random manner as the Trustee in its discretion shall determine.

(c) Pursuant to Section 6.01 hereof, the Metropolitan Mayor and the Director of Finance, or either of them, are authorized to sell the Series 2001 Bonds, or any maturities thereof, as term bonds with mandatory redemption requirements corresponding to the maturities established pursuant to the terms hereof. In the event any or all the Bonds are sold as term bonds, the Metropolitan Government shall redeem term bonds on redemption dates corresponding to the maturity dates set forth herein, in aggregate principal amounts equal to the maturity amounts established by the Director of Finance pursuant to Section 6.01 hereof for each redemption date at a price of par plus accrued interest thereon to the date of redemption. If the Series 2001 Bonds are being held in Book-Entry Form by DTC or other Depository, the interest of each Participant in the term bonds to be so redeemed shall be selected by DTC, or such Person as shall then be serving as the securities depository for the Series 2001 Bonds, using its procedures generally in use at that time. If DTC, or another securities depository is no longer serving as securities depository for the Series 2001 Bonds, the term bonds to be so redeemed shall be selected by the Trustee by lot or such other random manner as the Trustee in its discretion shall select.

At its option, to be exercised on or before the forty-fifth (45th) day next preceding any such redemption date, the Metropolitan Government may (i) deliver to the Trustee for cancellation Bonds to be redeemed, in any aggregate principal amount desired, and/or (ii) receive a credit in respect of its redemption obligation under this mandatory redemption provision for any Bonds of the maturity to be redeemed which prior to said date have been purchased or redeemed (otherwise than through the operation of this mandatory sinking fund redemption provision) and canceled by the Trustee and not theretofore applied as a credit against any redemption obligation under this mandatory sinking fund provision. Each Bond so delivered or previously purchased or redeemed shall be credited by the Trustee at 100% of the principal amount thereof on the obligation of the Metropolitan Government on such payment date and any excess shall be credited on future redemption obligations in chronological order, and the principal amount of Bonds to be redeemed by operation of this mandatory sinking fund provision shall be accordingly reduced. The Metropolitan Government shall on or before the forty-fifth (45th) day next preceding each payment date furnish the Trustee with its certificate indicating whether or not and to what extent the provisions of clauses (i) and (ii) of this subsection are to be availed of with respect to such payment and confirm that funds for the balance of the next succeeding prescribed payment will be paid on or before the next succeeding payment date.

ARTICLE III.
DISPOSITION OF SERIES 2001 BOND PROCEEDS; TRANSFER OF FUNDS

The proceeds of the sale of the Series 2001 Bonds shall be disbursed as set forth in this Article III.

Section 3.01 Application of Accrued Interest. An amount representing accrued interest on the Series 2001 Bonds from the dated date to the closing date shall be deposited to the Debt Service Fund pursuant to Section 4.1(1) of the General Resolution.

Section 3.02 Redemption Fund. An amount, which together with amounts on deposit in the Debt Service Reserve Fund that are no longer required to be held therein following the issuance of the Series 2001 Bonds, and investment earnings on all the foregoing, will be sufficient to pay the Redemption Price of and interest on the Series 1991 Bonds to their earliest optional redemption date shall be deposited to the Redemption Fund.

Section 3.03 Costs of Issuance. The remainder of the proceeds of the sale of the Series 2001 Bonds shall be deposited to the Construction Fund to be used exclusively to pay Costs of Issuance of the Series 2001 Bonds.

Section 3.04 Transfer of Funds. Upon authentication and delivery of the Series 2001 Bonds, the Trustee shall transfer from the Debt Service Reserve Fund to the Redemption Fund funds in an amount set forth in instructions from the Director of Finance delivered to the Trustee at closing, said amount being the amount which when deducted from the total amount in the Debt Service Reserve Fund immediately preceding delivery of the Series 2001 Bonds will result in the amount held in the Debt Service Reserve Fund immediately following delivery of the Series 2001 Bonds being equal to the Debt Service Reserve Requirement following the delivery of the Series 2001 Bonds.

ARTICLE IV.
APPOINTMENT OF TRUSTEE, PAYING AGENT AND REGISTRAR

Section 4.01 Appointment of Trustee, Paying Agent and Registrar. The Trustee for the Series 2001 Bonds will be First Union National Bank, Nashville, Tennessee, which will also act as Paying Agent and Registrar with respect to the Series 2001 Bonds.

ARTICLE V.
FORM AND EXECUTION OF SERIES 1991 BONDS

Section 5.01 Form of Series 2001 Bonds. Subject to the provisions of the General Resolution and this Series 2001 Resolution, the Series 2001 Bonds in registered form, shall be in substantially the form and tenor set forth in Exhibit A hereto, with such insertions or variations as to any redemption or amortization provisions and such other insertions or omissions, endorsements and variations as may be required or permitted by the General Resolution, this Series 2001 Resolution and any amendment thereto adopted prior to the issuance of the Series 2001 Bonds.

ARTICLE VI.
SALE OF SERIES 2001 BONDS

Section 6.01 Sale of the Series 2001 Bonds. The Series 2001 Bonds may be sold at competitive sale or negotiated sale, as the Director of Finance shall determine, at a price of not less than ninety-eight percent (98%) of par less any original issue discount on the Bonds, plus accrued interest. The Metropolitan Mayor and the Director of Finance, or either of them, in consultation with Public Financial Management, Inc., the Metropolitan Government's financial advisor (the "Financial Advisor"), are authorized to make such changes in the structuring of the terms and sale of the Series 2001 Bonds as they shall deem necessary to maximize the savings from the refunding of the Series 1991 Bonds. In this regard, they, or either of them, in consultation with the Financial Advisor, are authorized to cause to be sold an aggregate principal amount of the Bonds less than that authorized herein, cause fewer than all the Series 1991 Bonds to be refunded, sell any or all of the Series 2001 Bonds as term bonds with annual mandatory redemption requirements, change the dated date to a date other than November 1, 2001, and to adjust principal and interest payment dates and redemption dates of the Series 2001 Bonds. The form of the Series 2001 Bond set forth in Exhibit A attached hereto shall be conformed to reflect any changes, if any, as hereinbefore mentioned.

The Director of Finance is authorized to offer the Series 2001 Bonds for sale in multiple series at different times and make such changes in the series designation, maturity schedule, dated date, redemption provisions and other terms of the Series 2001 Bonds necessary to issue the Series 2001 Bonds in multiple series or as he shall otherwise determine.

If any of the Bonds are sold at competitive sale, the Metropolitan Clerk shall cause notice of such sale to be published in accordance with law. The sale may be by physical delivery of bids or by electronic bidding by means of an Internet bidding service as shall be determined by the Director of Finance.

The Metropolitan Mayor, the Director of Finance, and the Metropolitan Clerk, or any of them, are authorized to cause the Bonds to be authenticated and delivered by the Registration Agent to the purchaser thereof and to execute, publish, and deliver all certificates and documents, including the Official Statement, and closing certificates and documents, as they shall deem necessary in connection with the sale and delivery of the Bonds.

The Director of Finance shall cause, if advantageous to the Metropolitan Government, all or a portion of any emission of the Bonds to be insured by a bond insurance policy issued by a nationally recognized bond insurance company.

ARTICLE VII.
REDEMPTION OF SERIES 1991 BONDS; NOTICE OF REFUNDING

Section 7.01 Redemption. The Trustee is hereby authorized and directed to redeem the Series 1991 Bonds on March 1, 2002, by transferring the funds on deposit in the Redemption Fund to the Debt Service Fund and applying said funds to the payment of the Redemption Price thereof, plus interest accrued on the principal amount thereof since the last interest payment. The Trustee is authorized and directed to give notice of redemption of the Series 1991 Bonds as and when required by Section 6.5 of the General Resolution. The redemption notice shall be substantially in the form of the notice attached hereto and made a part hereof as Exhibit B.

Section 7.02 Notice of Refunding. If the Series 2001 Bonds are issued prior to the date on which a valid notice of redemption can be sent pursuant to Section 6.5 of the General Resolution, prior to the issuance of the Series 2001 Bonds, notice of the Metropolitan Government's intention to refund the Series 1991 Bonds shall be given by the Trustee to the registered owners of the Series 1991 Bonds, to be mailed by first-class mail, postage prepaid, to the registered holders thereof, as of the date of the notice, as shown on the bond registration records maintained by the Trustee. Such notice shall be in substantially the form provided in Exhibit C attached hereto and by this reference made a part hereof.

ARTICLE VIII.
MISCELLANEOUS

Section 8.01 Arbitrage. The Metropolitan Government recognizes that the purchasers and owners of the Series 2001 Bonds will have accepted them on, and paid therefor a price that reflects, the understanding that interest thereon is excludable from gross income for purposes of federal income taxation under laws in force on the date of delivery of the Series 2001 Bonds. In this connection, the Metropolitan Government agrees that it shall take no action which may cause the interest on any of said Series 2001 Bonds to be included in gross income for federal income taxation. It is the reasonable expectation of the Metropolitan Government that the proceeds of the Series 2001 Bonds will not be used in a manner which will cause the Series 2001 Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code, and to this end the said proceeds of the Series 2001 Bonds and other related funds established for the purposes herein set out shall be used and spent expeditiously for the purposes described herein. The Metropolitan Government further covenants and represents that in the event it shall be required by Section 148(f) of the Code to pay any investment proceeds of the Series 2001 Bonds 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 Series 2001 Bonds from becoming taxable. The Metropolitan County Mayor and the Director of Finance, or either of them, are authorized and directed to make such certifications in this regard in connection with the sale of the Series 2001 Bonds as either or both shall deem appropriate, and such certifications shall constitute a representation and certification of the Metropolitan Government.

Section 8.02 Official Statement. The Director of Finance is hereby authorized and directed to provide for the preparation and distribution, electronic or otherwise, of a Preliminary Official Statement describing the Series 2001 Bonds and any other bonds or notes which in the discretion of the Director of Finance are sold at the same time as the Bonds. After the Bonds have been sold, the Director of Finance shall make such completions, omissions, insertions and changes in the Preliminary Official Statement not inconsistent with this resolution as are necessary or desirable to complete it as a final Official Statement for purposes of Rule 15c2-12(e)(3) of the Securities and Exchange Commission. The Director of Finance shall arrange for the delivery of a reasonable number of copies of the Official Statement within seven business days after the Bonds have been sold to each potential investor requesting a copy of the Official Statement and to each initial Bond Purchaser.

The Director of Finance is authorized, on behalf of the Metropolitan Government, to deem the Preliminary Official Statement and the Official Statement in final form, each to be final as of its date within the meaning of Rule 15c2-12(b)(1), except for the omission in the Preliminary Official Statement of certain pricing and other information allowed to be omitted pursuant to such Rule 15c2-12(b)(1). The distribution of the Preliminary Official Statement and the Official Statement in final form shall be conclusive evidence that each has been deemed in final form as of its date by the Metropolitan Government except for the omission in the Preliminary Official Statement of such pricing and other information.

Section 8.03 Continuing Disclosure. The Metropolitan Government hereby covenants and agrees that it will provide annual financial information and material event notices if and as required by Rule 15c2-12 of the Securities Exchange Commission for the Series 2001 Bonds. The Metropolitan County Mayor is authorized to execute at the Closing of the sale of the Series 2001 Bonds, an agreement for the benefit of and enforceable by the owners of the Series 2001 Bonds specifying the details of the financial information and material event notices to be provide and its obligations relating thereto. Failure of the Metropolitan Government to comply with the undertaking herein described and to be detailed in said closing agreement, shall not be a default hereunder, but any such failure shall entitle the owner or owners of any of the Series 2001 Bonds to take such actions and to initiate such proceedings as shall be necessary and appropriate to cause the Metropolitan Government to comply with their undertaking as set forth herein and in said agreement, including the remedies of mandamus and specific performance.

Section 8.04 Conflicting Resolutions Repealed. All resolutions or parts thereof in conflict herewith are, to the extent of such conflict, hereby repealed.

Section 8.05 Effective Date. This Resolution shall take effect from and after its adoption, the welfare of the Metropolitan Government requiring it.

Sponsored by: Jim Shulman

EXHIBIT A
(Form of Series 2001 Bond)
REGISTERED REGISTERED
Number 1 $ _______

THE METROPOLITAN GOVERNMENT
OF NASHVILLE AND DAVIDSON COUNTY
SPECIAL LIMITED OBLIGATION CORRECTIONAL FACILITIES
REVENUE REFUNDING BOND
SERIES 2001

Interest Rate: Maturity Date: Date of Bond: CUSIP No.:
_____% ________, 20__ _______, 2001 _________

Registered Owner: CEDE & CO.

Principal Amount:

KNOW ALL MEN BY THESE PRESENTS: That The Metropolitan Government of Nashville and Davidson County (the "Metropolitan Government"), a lawfully organized and existing municipal corporation, for value received hereby promises to pay to the registered owner hereof, hereinabove named, or registered assigns, in the manner hereinafter provided, the principal amount hereinabove set forth on the maturity date hereinabove set forth, and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on said principal amount at the annual rate of interest hereinabove set forth from the date hereof until said maturity date or redemption date, said interest being payable on March 1, 2002 and semi-annually thereafter on the first day of March and September in each year until this Bond matures or is redeemed. Both principal hereof and interest hereon are payable in lawful money of the United States of America at the principal corporate trust office of First Union National Bank, Nashville, Tennessee, as trustee, registrar and paying agent (the "Trustee"). The Trustee shall make all interest payments with respect to this Bond on each interest payment date to the registered owner hereof shown on the Bond registration records maintained by the Trustee as of the close of business on the first day of each month in which an interest payment date occurs (the "Regular Record Date") by check or draft, or by wire transfer, as provided by the Bond Resolution, as such term is hereinafter defined, mailed to such owner at such owner's address shown on said Bond registration records, without, except for final payment, the presentation or surrender of this Bond, and all such payments shall discharge the obligations of the Metropolitan Government to the extent of the payments so made. Any such interest not so punctually paid or duly provided for on any interest payment date shall forthwith cease to be payable to the registered owner on the relevant Regular Record Date; and, in lieu thereof, such defaulted interest shall be payable to the person in whose name this Bond is registered at the close of business on the date (the "Special Record Date") for payment of such defaulted interest to be fixed by the Trustee, notice of which shall be given to the owners of the Bonds of the issue of which this Bond is one not less than ten (10) days prior to such Special Record Date. Payment of principal of this Bond shall be made when due upon presentation and surrender of this Bond to the Trustee.

Bonds of the issue of which this Bond is one maturing September 1, 2002 through September 1, 20__ are not subject to redemption prior to maturity. The Series 2001 Bonds maturing on or after September 1, 20__ are subject to redemption prior to maturity at the option of the Metropolitan Government on or after September 1, 20__ as a whole or in part at any time from any moneys that may be available for such purpose, upon payment of the following redemption prices (expressed as a percentage of principal amount of Series 2001 Bonds to be redeemed) plus interest accrued to the redemption date:

Redemption
Redemption Period Price

September 1, ____, through August 30, ____ %
September 1, ____, through August 30, ____ %
September 1, ____, and thereafter %

If less than all the Series 2001 Bonds shall be called for redemption, the maturities to be redeemed shall be designated by the Metropolitan Council in its discretion. If less than all the principal amount of the Bonds of a single maturity shall be called for redemption, the interests within the maturity to be redeemed shall be selected as follows:

(i) if the Bonds are being held under a Book-Entry System by DTC, or a successor Depository, the amount of the interest of each DTC Participant in the Bonds to be redeemed shall be determined by DTC, or such successor Depository, by lot or such other manner as DTC, or such successor Depository, shall determine; or
(ii) if the Bonds are not being held under a Book-Entry System by DTC, or a successor Depository, the Bonds within the maturity to be redeemed shall be selected by the Trustee by lot or such other random manner as the Trustee in its discretion shall determine.

Notice of call for redemption shall be given by the Trustee not less than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption by sending an appropriate notice to the registered owners of the Bonds to be redeemed by first-class mail, postage prepaid, at the addresses shown on the bond registration records of the Trustee as of the date of the notice; but neither failure to mail such notice nor any such defect in any such notice so mailed shall affect the sufficiency of the proceedings for the redemption of any of the Bonds for which proper notice was given. As long as DTC, or a successor Depository, is the registered owner of the Bonds, all redemption notices shall be mailed by the Trustee to DTC, or such successor Depository, as the registered owner of the Bonds, as and when above provided, and neither the Metropolitan Government nor the Trustee shall be responsible for mailing notices of redemption to DTC Participants or Beneficial Owners. Failure of DTC, or any successor Depository, to provide notice to any DTC Participant will not affect the validity of such redemption. From and after any redemption date, all Bonds called for redemption shall cease to bear interest if funds are available at the office of the Trustee for the payment thereof and if notice has been duly provided as set forth in the Bond Resolution, as hereafter defined.

This Bond is transferable by the registered owner hereof in person or by such owner's attorney duly authorized in writing at the principal corporate trust office of the Trustee set forth on the front side hereof, but only in the manner, subject to limitations and upon payment of the charges provided in the Resolution, as hereafter defined, and upon surrender and cancellation of this Bond. Upon such transfer a new Bond or Bonds of authorized denominations of the same maturity and interest rate for the same aggregate principal amount will be issued to the transferee in exchange therefor. The person in whose name this Bond is registered shall be deemed and regarded as the absolute owner thereof for all purposes and neither the Metropolitan Government nor the Trustee shall be affected by any notice to the contrary whether or not any payments due on the Bond shall be overdue. Bonds, upon surrender to the Trustee, may, at the option of the registered owner thereof, be exchanged for an equal aggregate principal amount of the Bonds of the same maturity in authorized denomination or denominations, upon the terms set forth in the Resolution. The Trustee shall not be required to transfer or exchange any Bond during the period commencing on a Regular Record Date or Special Record Date and ending on the corresponding interest payment date of such Bond, nor to transfer or exchange any Bond after the notice calling such Bond for redemption has been made, nor during a period following the receipt of instructions from the Metropolitan Government to call such Bond for redemption.

This Bond is one of a total authorized issue aggregating $___________ and issued by the Metropolitan Government for the purpose of providing funds to refund all the outstanding Special Limited Obligation Correctional Facilities Revenue Bonds, Series 1991, (the "Series 1991 Bonds") and pay the costs of issuance of the Series 2001 Bonds, as authorized by Resolution No. ________ of the Metropolitan County Council of the Metropolitan Government, adopted on _________, 2001 (the "Series 2001 Resolution"), and are issued pursuant to, and in full compliance with, the Constitution and the statutes of the State of Tennessee, including, but not limited to Title 9, Chapter 21 of the Tennessee Code Annotated, as amended, (the "Act"), Resolution No. 91-1663 duly adopted by the Metropolitan Government on April 16, 1991, as supplemented and amended (the "General Resolution") and the Charter of the Metropolitan Government (the "Charter"). Copies of the Series 2001 Resolution are on file at the office of the Metropolitan Clerk of the Metropolitan Government, and reference is hereby made to the Series 2001 Resolution, the Act, the General Resolution and the Charter for a description of the nature, manner, and description of the pledge securing the Bonds, the nature, manner, and extent of enforcement of such pledge, the rights and remedies of the registered owners of the Bonds with respect to such pledge, the terms and conditions upon which the Bonds are issued thereunder, and a statement of the rights, duties, immunities, and obligations of the Metropolitan Government. Such pledge and other obligations of the Metropolitan Government under the Series 2001 Resolution may be discharged at or prior to the maturity or redemption of the Series 2001 Bonds upon the making of provision for the payment thereof on the terms and conditions set forth in the Series 2001 Resolution.

This Bond is a special limited obligation of the Metropolitan Government, and (a) will not be a debt of the Metropolitan Government, nor a charge, lien or encumbrance, legal or equitable, upon any property of the Metropolitan Government or upon any income, receipts or revenues of the Metropolitan Government other than the property pledged under the General Resolution and (b) will not be deemed to constitute a full faith and credit general obligation of the Metropolitan Government for which there is a right to compel the exercise of the ad valorem taxing power of the Metropolitan Government, and no recourse shall be had for the payment of principal of or interest on the Series 2001 Bonds against the general funds of the Metropolitan Government. This Bond is payable solely from the Correctional Facilities Payments (as defined in the General Resolution) to be made by the State of Tennessee (the "State" under the Amended and Restated Grant Contract dated August 21, 1990, as amended, with the Metropolitan Government (the "Contract"), and certain Funds and Accounts established by the General Resolution. Under the Contract, the State has agreed to make the Correctional Facilities Payments; provided, however, that the obligation of the State to make such Correctional Facilities Payments is subject to and dependent upon appropriations being made annually by the State General Assembly for such payments, allotment by appropriate State officials, and to the Contract remaining in effect. The State is not liable on this Bond, and this Bond shall not constitute a moral or general obligation or a debt of the State within the meaning of any constitutional or statutory provision.

Neither the members of the Metropolitan Government nor any person executing Bonds of the Metropolitan Government shall be liable personally on said Bonds or be subject to any personal liability or accountability by reason of the issuance thereof.

This Bond and the income therefrom are exempt from all present state, county and municipal taxes in Tennessee except (a) inheritance, transfer and estate taxes, (b) Tennessee excise taxes on interest on the Bond during the period the Bond is held or beneficially owned by any organization or entity, other than a sole proprietorship or general partnership, doing business in the State of Tennessee, and (c) Tennessee franchise taxes by reason of the inclusion of the book value of the Bond in the Tennessee franchise tax base of any organization or entity, other than a sole proprietorship or general partnership, doing business in the State of Tennessee.

It is hereby certified, recited, and declared that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of this Bond exist, have happened and have been performed in due time, form and manner as required by law, and that the amount of this Bond, together with all other indebtedness of the Metropolitan Government, does not exceed any limitation prescribed by the constitution and statutes of the State of Tennessee.

All capitalized terms used, but not defined herein, shall have the meanings set forth in the Series 2001 Resolution.

IN WITNESS WHEREOF, the Metropolitan Government has caused this Bond to be signed by its Metropolitan County Mayor with his manual or facsimile signature, attested by its Metropolitan Clerk with her manual or facsimile signature, and approved as to form and legality by its Director of Law, with his manual or facsimile signature, under an imprint of the corporate seal of the Metropolitan Government or a facsimile thereof, all as of the day and date hereinabove set forth.

THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY

BY: ____________________________________
Metropolitan County Mayor
(SEAL)

ATTESTED:

______________________________
Metropolitan Clerk

APPROVED AS TO FORM
AND LEGALITY:

______________________________
Director of Law

Transferable and payable at the
principal corporate trust office of: _________________________________

Date of Registration: ______, 2001

This Bond is one of the issue of Bonds issued pursuant to the Resolution hereinabove described.

__________________________________
Trustee

By: _______________________________
Authorized Officer

FORM OF ASSIGNMENT

FOR VALUE RECEIVED, the undersigned sells, assigns, and transfers unto _______________________________________________________________, whose address is ____________________________________________________________________, (Please insert Social Security or Federal Tax Identification Number ______________) the within Bond of The Metropolitan Government of Nashville and Davidson County (Tennessee), and does hereby irrevocably constitute and appoint ____________________, attorney, to transfer the said Bond on the records kept for registration thereof with full power of substitution in the premises.

Dated: ____________

___________________________________
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever.

Signature guaranteed:

______________________________
NOTICE: Signature(s) must be
guaranteed by a member firm of
a Medallion Program acceptable
to the Trustee

EXHIBIT B

NOTICE OF REDEMPTION

The Metropolitan Government of Nashville and Davidson County
(Tennessee)
Special Limited Obligation Correctional Facilities Revenue Bonds, Series 1991
dated June 1, 1991

Maturity Date Rate CUSIP No.
September 1, 2002 6.70%
September 1, 2003 6.80
September 1, 2004 6.90
September 1, 2005 6.90
September 1, 2006 7.00
September 1, 2007 7.00
September 1, 2011 7.00

NOTICE IS HEREBY GIVEN that The Metropolitan Government of Nashville and Davidson County (Tennessee) (the "Metropolitan Government") has elected to and does hereby exercise its option to redeem on March 1, 2002, its outstanding Special Limited Obligation Correctional Facilities Revenue Bonds, Series 1991, dated June 1, 1991, maturing September 1, 2002 and thereafter as described above (the "Outstanding Bonds").

The owners of the Outstanding Bonds are hereby notified to present the same to the principal corporate trust office of First Union National Bank, Nashville, Tennessee, successor Trustee, Registrar and Paying Agent, to Dominion Trust Company of Tennessee, Nashville, Tennessee, where redemption shall be made at the price of 102% of par plus accrued interest to the redemption date. The redemption price will become due and payable on March 1, 2002 upon each such Outstanding Bond herein called for redemption and such Outstanding Bonds shall not bear interest beyond March 1, 2002.

Important Notice: In compliance with the Interest and Dividend Compliance Act of 1983 and broker reporting requirements, the redeeming institution is required to withhold 31% of the principal amount of your holdings redeemed unless they are provided with a W-9 Form certifying your social security number or federal employer tax identification number.

First Union National Bank, as
Trustee, Registrar and Paying Agent
Nashville, Tennessee

EXHIBIT C

METROPOLITAN GOVERNMENT OF
NASHVILLE AND DAVIDSON COUNTY

NOTICE OF INTENTION TO ISSUE REFUNDING BONDS

To the owners of the Special Limited Obligation Correctional Facilities Revenue Bonds, Series 1991, dated June 1, 1991, maturing September 1, 2002 through September 1, 2007, inclusive, and September 1, 2011] (the "Series 1991 Bonds") of the Metropolitan Government of Nashville and Davidson County, Tennessee (the "Metropolitan Government").

Notice is hereby given that the Metropolitan Government intends to refund the Series 1991 Bonds by the issuance of Special Limited Obligation Correctional Facilities Revenue Refunding Bonds, Series 2001 (the "Refunding Bonds") of the Metropolitan Government and deposit with __________________________, as Trustee, proceeds of the Refunding Bonds sufficient, together with other available funds of the Metropolitan Government and investment income therefrom, to provide for the payment of principal of and interest on the Series 1991 Bonds until redeemed. The Series 1991 Bonds will be redeemed on March 1, 2002 at a redemption price of 102% of par, plus accrued interest to the redemption date. The estimated date of delivery of the Refunding Bonds is __________, 2001.

METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY

By: ___________________________
Director of Finance

LEGISLATIVE HISTORY
Referred to:	Budget & Finance Committee
Introduced:	October 16, 2001
Adopted:	October 16, 2001
Approved:	October 17, 2001
By: