Resolution authorizing the issuance of General Obligation Refunding Bonds, Series 2006, of The Metropolitan Government of Nashville and Davidson County, Tennessee, in an original principal amount not exceeding $65,000,000 for the purpose of refunding a portion of the Metropolitan Government’s General Obligation Public Improvement Bonds, Series 1996; and authorizing the execution and delivery of an interest rate swap agreement in connections therewith.

WHEREAS, The Metropolitan Government of Nashville and Davidson County (Tennessee) (the “Metropolitan Government”) has heretofore issued its General Obligation Public Improvement Bonds, Series 1996, dated June 15, 1996, in the original principal amount of $74,880,000 (the “1996 Bonds”); and

WHEREAS, the Metropolitan County Council (the “Council”) has determined it is in the best interests of the Metropolitan Government to refund the 1996 Bonds maturing on or after May 15, 2008 (the “Refunded Bonds”) not earlier than 90 days prior to the May 15, 2006 redemption date of such Refunded Bonds at a redemption price equal to 101% of the principal amount thereof plus accrued interest to the date of redemption; and

WHEREAS, the Metropolitan Government has submitted a plan of refunding regarding the Refunded Bonds to the State Director of Local Finance, and he has delivered to the Metropolitan Government his report thereon, as required by Section 9-21-903 of the Tennessee Code Annotated (“T.C.A.”); and

WHEREAS, the State Director of Local Finance has delivered his report, a copy of which (along with the request for the report) is attached hereto as Exhibit A, finding that the interest rate swap agreement and confirmations thereunder to be entered into in connection with the refunding of the Refunded Bonds as contemplated herein are in compliance with the guidelines, rules or regulations adopted or promulgated by the State Funding Board, as set forth in Section 9-21-130 of the T.C.A., as required by Section 9-21-907(c) of the T.C.A.; and

WHEREAS, the Council finds it is advantageous and necessary for the Metropolitan Government to refund the Refunded Bonds in order to achieve debt service savings.

NOW, THEREFORE, BE IT RESOLVED BY THE METROPOLITAN COUNTY COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY (TENNESSEE), that:

1. There are hereby authorized to be issued and sold not exceeding $65,000,000 principal amount of bonds to be designated “General Obligation Refunding Bonds, Series 2006” (hereinafter referred to as the “Bonds”). The Bonds shall be issued in fully registered form without coupons.

The Bonds shall be issued in the denomination of Five Thousand Dollars ($5,000) each, and integral multiples thereof or such higher denomination as deemed necessary for marketing the Bonds as variable rate obligations. The Bonds shall be dated such date and be subject to redemption and bear interest at such rate or rates not to exceed the maximum rate permitted by law from such date; payable at such times and on such dates and subject to redemption at such times as determined by subsequent proceedings of the Council prior to the issuance of such Bonds.

2. The Bonds and the provisions for registration to be endorsed thereon shall be in substantially the following form:

(Form of Bond)
UNITED STATES OF AMERICA
STATE OF TENNESSEE
THE METROPOLITAN GOVERNMENT OF NASHVILLE AND
DAVIDSON COUNTY (TENNESSEE)
GENERAL OBLIGATION REFUNDING BOND
SERIES 2006

No. _____                                                                                                                                          $__________
                                      MaturityDate                                                      Originally Dated                       CUSIP
Principal Sum:
Registered Owner:
KNOW ALL MEN BY THESE PRESENTS, that The Metropolitan Government of Nashville and Davidson County (Tennessee), hereby acknowledges itself indebted and for value received will pay the registered owner named above, or registered assigns (herein, the “Holder”) on the maturity date specified above upon presentation and surrender hereof, the principal sum as specified above together with interest thereon which shall accrue from [__________, 2006], until payment of said principal sum has been made or duly provided, at such rate or rates applicable to the Bonds.

Principal is payable in lawful money of the United States of America upon presentation and surrender of this Bond when due to the Metropolitan Government at the principal office of the Metropolitan Trustee or an agent appointed by the Metropolitan Government, as Paying Agent. [Interest on this Bond is payable by check or draft mailed to the person whose name appears as registered owner hereof on the registration books maintained by or on behalf of the Metropolitan Government on the 15th day of the month immediately preceding the interest payment date.]

[redemption provisions, if applicable]
[variable rate provisions, if applicable]

This Bond is one of the General Obligation Refunding Bonds, Series 2006 of the Metropolitan Government aggregating in original principal amount of $__________ issued under the Constitution and statutes of the State of Tennessee, including Sections 9-21-901 through 9-21-916 of the Tennessee Code Annotated and pursuant to a resolution adopted on April 20, 2004 by the Metropolitan County Council of the Metropolitan Government (the “Bond Resolution”), for the purpose of refunding the Metropolitan Government’s outstanding General Obligation Public Improvement Bonds, Series 1996, dated June 15, 1996 and maturing on or after May 15, 2008.

The series of bonds of which this Bond is a part are issuable as fully registered bonds without coupons. Subject to certain limitations and upon payment of any tax or other governmental charges, if any, such registered bonds without coupons may be exchanged at the offices of the Metropolitan Trustee, as Registrar, or if the Metropolitan Government has appointed an agent as Registrar, at the principal corporate trust office of such Registrar, for a like aggregate principal amount of registered bonds without coupons of other authorized principal sums and of the same series, interest rate and maturity.

The Metropolitan Government and any Paying Agent and Registrar may treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment hereof and for all other purposes and shall not be affected by any notice to the contrary, whether this Bond be overdue or not.

By purchase and acceptance of a Bond, the beneficial owner agrees that the Metropolitan Government shall have no responsibility or liability for the action or inaction of The Depository Trust Company or any of its participants, nominees or successors as depository in connection with the Bonds.

THE FULL FAITH AND CREDIT AND UNLIMITED TAXING POWER OF THE METROPOLITAN GOVERNMENT ARE HEREBY PLEDGED TO THE PUNCTUAL PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THIS BOND, AND THERE SHALL BE ANNUALLY LEVIED, ON ALL PROPERTY SUBJECT TO TAXATION BY THE METROPOLITAN GOVERNMENT, A TAX SUFFICIENT TO PAY THE INTEREST ON AND PRINCIPAL OF THIS BOND AS THE SAME SHALL BECOME DUE.

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

This Bond shall not be valid or become obligatory for any purpose until this Bond shall have been authenticated by the execution by the Metropolitan Trustee or other Paying Agent, as authenticating agent, of the Certificate of Authentication endorsed hereon.

IN WITNESS WHEREOF, the Metropolitan Government has caused this Bond to be signed by its Metropolitan 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 (TENNESSEE)

By: ________________________________
Metropolitan Mayor

(SEAL)

ATTESTED:

______________________________
Metropolitan Clerk

APPROVED AS TO FORM
AND LEGALITY:

______________________________
Director of Law

Dated: _________________________

Certificate of Authentication

This Bond is one of the Bonds described
in the within mentioned Bond Resolution

________________________________
as Paying Agent

By: _____________________________
Title:

[FORM OF ASSIGNMENT]

FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto ___________________________________________________ the within bond and does
(Name, Address and Taxpayer Identification No. of Assignee)
hereby irrevocably constitute and appoint __________________________________ to transfer the said bond on the books kept for registration thereof with full power of substitution in the premises.
Dated: ___________________________                                       Signatures:

______________________________
______________________________

______________________________

Signature Guarantee:

_________________________________

NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever.

(End of Bond Form)

3. The principal of, premium, if any, and interest on the Bonds shall be payable from ad valorem taxes to be levied for such purpose on all taxable property in the General Services District without limit as to time, rate, or amount. The Bonds shall be direct general obligations of the Metropolitan Government, and the full faith and credit of the Metropolitan Government, together with the taxing power of the Metropolitan Government as to all taxable property in the General Services District, are hereby irrevocably pledged. The principal of and the premium, if any, and interest on, said Bonds may be paid from the debt service fund of the General Services District for debt service attributable to projects in the General Services District refinanced by the Bonds, from the debt service fund of the Urban Services District for debt service attributable to projects in the Urban Services District refinanced by the Bonds, and from the school debt service fund for debt service attributable to school projects refinanced by the Bonds.

For the purpose of providing for the payment of the principal of, and the premium, if any, and interest on, the Bonds, there shall be levied in each year in which such Bonds shall be outstanding a direct tax on all taxable property in the General Services District and Urban Services District, fully sufficient to pay all such principal, premium, if any, and interest falling due prior to the time of collection of the next succeeding tax levy; provided, however, taxes so levied in the General Services District shall be levied in an amount sufficient to pay that portion of such principal, premium and interest attributable to school projects and projects in the General Services District refinanced by the Bonds and the taxes so levied in the Urban Services District shall be levied in an amount sufficient to pay that portion of such principal, premium and interest attributable to refinanced projects in the Urban Services District; provided, further, however, that the Metropolitan Government shall be unconditionally and irrevocably obligated to levy and collect ad valorem taxes without limit as to rate or amount on all taxable property in the General Services District to the full extent necessary to pay all principal, premium and interest on the Bonds, and the full faith and credit of Metropolitan Government shall be pledged to the payment thereof. Said tax shall be assessed, collected, and paid at the time, and in the same manner, as the other taxes of the Metropolitan Government, shall be in addition to all other taxes, and shall be without limitation as to time, rate, or amount. Principal, premium, if any, and interest, on any of the Bonds, falling due at any time when there shall be insufficient funds on hand from such tax levy for the payment thereof shall be paid from current funds of the Metropolitan Government, but reimbursement therefor may be made from the taxes herein provided when the same shall have been collected.

4. The Bonds shall be executed by the manual or facsimile signature of the Metropolitan Mayor, and approved as to form and legality by the Director of Law; and the seal of the Metropolitan Government shall be affixed thereto or reproduced thereon and attested by the Metropolitan Clerk, either manually or with her facsimile signature. In the event any one or more of the officers, who shall have signed or sealed any of the Bonds, shall cease to be such officer before the Bonds so signed and sealed have been actually sold and delivered, such Bonds may nevertheless be sold and delivered as provided herein and may be issued as if the person who signed and sealed such Bond has not ceased to hold such office. Any of the Bonds may be signed and sealed on behalf of the Metropolitan Government by such person as shall hold the proper office at the actual time of execution of such Bonds, although, as of the date of such Bonds, such person may not have held such office or have been so authorized.

5. The Metropolitan Government covenants as follows, with respect to the Bonds which, when initially issued, are the subject of an opinion of Bond Counsel to the effect that interest thereon is excluded from gross income for Federal income tax purposes pursuant to the Internal Revenue Code of 1986 (the “Code”), or any successor thereto:

A. The Metropolitan Government shall comply with each requirement of the Code necessary to maintain the exclusion of interest on the Bonds from gross income for Federal income tax purposes. In furtherance of the covenant contained in the preceding sentence, the Metropolitan Government agrees to comply with the provisions of the Tax Certificate (the “Tax Certificate”) executed by the Metropolitan Government on the date of initial issuance and delivery of the Bonds, as such Tax Certificate may be amended from time to time, as a source of guidance for achieving compliance with the Code.

B. The Metropolitan Government shall make any and all payments required to be made to the United States Department of the Treasury in connection with the Bonds pursuant to Section 148(f) of the Code from amounts on deposit in the funds and accounts established in connection with the Bonds.

C. Notwithstanding any other provisions of this Resolution to the contrary, so long as necessary in order to maintain the exclusion from gross income of interest on the Bonds for Federal income tax purposes, the covenants contained in this Section shall survive the payment of the Bonds and the interest thereon, including any payment or defeasance thereof.

D. The Metropolitan Government shall not use or permit the use of any of the proceeds of the Bonds, or any other funds of the Metropolitan Government, directly or indirectly, to acquire any securities, obligations or other investment property, and shall not take or permit to be taken any other action or actions, which would cause any Bond to be an “arbitrage bond” as defined in Section 148 of the Code.

6. CUSIP identification numbers shall be imprinted on the Bonds but shall not be deemed to be a part of the Bonds or a part of the contract evidenced thereby and no liability shall hereafter attach to the Metropolitan Government or any of the officers or agents thereof because of or on account of said CUSIP identification numbers.

7. The Bonds shall be registered in the name of Cede & Co. (“Cede”), as nominee of The Depository Trust Company (“DTC”). Payment of interest for the Bonds shall be made in same-day funds to the account of Cede on or before the applicable interest payment date for the Bonds at the address indicated for Cede in the registry books of the Metropolitan Trustee. Beneficial owners of the Bonds will not receive physical delivery of bond certificates nor will they have a right to receive a certificate during the period that the Bonds are immobilized in the custody of DTC. Purchases of Bonds by the public shall be made through brokers and dealers (who must be or act through “Participants” in DTC) in principal amounts of $5,000 or multiples thereof, in the case of the Serial Bonds and accreted value at maturity of $5,000 or integral multiples in the case of Capital Appreciation Bonds.

Bond certificates or replacement bonds (the “Replacement Bonds”) shall be issued directly to owners of the Bonds of each series other than DTC, or its nominee, in the event that (a) DTC determines not to continue to act as securities depository for the Bonds; (b) the Metropolitan Government has advised DTC of its determination that DTC is incapable of discharging its duties as a securities depository of immobilized securities; or (c) the Metropolitan Government has determined that it is in the best interest of the Metropolitan Government or that interests of the beneficial owners of the Bonds might be adversely affected if the book-entry system of transfer is continued. Upon occurrence of an event described in (a) or (b) above, the Metropolitan Government shall attempt to locate another qualified securities depository to replace DTC. If the Metropolitan Government has made the determination in (c) above or fails to locate another qualified security depository to replace DTC upon the occurrence of an event described in (a) or (b) above, the Metropolitan Government shall have executed, authenticated and delivered the Replacement Bonds, in certificate form to the beneficial owners of the Bonds or their nominees. Definitive Replacement Bonds shall be issued only upon surrender to the Metropolitan Government, the Metropolitan Trustee or the Registrar approved by the Metropolitan Government of the Bonds of each maturity by DTC, accompanied by registration instructions for the definitive Replacement Bonds for such maturity from DTC. The Metropolitan Government shall not be liable for any delay in the delivery of such instructions and conclusively may rely on and shall be protected in relying on such instructions of DTC. Interest on the Replacement Bonds shall be payable by check or draft mailed to each registered owner of such Replacement Bond at the address of such owner as it appears in the registry books of the Metropolitan Trustee. Principal of and redemption premium, if any, on such Replacement Bonds shall be payable, when due, upon presentation and surrender thereof to the Metropolitan Government or an agent of the Metropolitan Government to be designated in the Replacement Bonds. Replacement Bonds will be transferable only by presentation and surrender to the Metropolitan Government, the Metropolitan Trustee or the Registrar approved by the Metropolitan Government together with an assignment duly executed by the owner of the Replacement Bonds or by his representative in form satisfactory to the Metropolitan Trustee or the Registrar appointed by the Metropolitan Government and containing information required by the Metropolitan Government in order to effect such transfer. As long as Cede is the registered owner of the Bonds, as the nominee for DTC, principal and interest shall be payable to Cede, as nominee of DTC, which will, in turn, remit such principal and interest to DTC Participants for subsequent disbursements to the beneficial owners of the Bonds. The Metropolitan Trustee is hereby appointed to act as Registrar and Paying Agent with respect to the Bonds delivered to DTC and its successors or, in the case of Replacement Bonds (as defined herein), directly to the owners of the Bonds.

Notwithstanding any other provision of this Resolution to the contrary, as long as any Bond is registered in the name of Cede, as nominee of DTC, all payments with respect to the principal or redemption price of, and interest on, such Bond and all notices with respect to such Bond shall be made and given, respectively, to DTC.

8. The Director of Finance of the Metropolitan Government is hereby authorized to execute and deliver an interest rate swap agreement or “swaption” between the Metropolitan Government and a qualified interest rate swap provider (the long-term, unsecured and unsubordinated obligations of which (or the guarantor of which) are rated in the “A” category by a nationally recognized rating agency) relating to the Bonds (the “Agreement”), which Agreement and related confirmations: (i) shall not exceed, at any time, $65,000,000 in aggregate notional principal amount outstanding; (ii) shall not have a term, from date of execution of the related confirmation, in excess of the final maturity of the Bonds; (iii) shall not require the Metropolitan Government to make payments, which may vary from time to time thereunder, at a rate or rates exceeding the maximum interest rate permitted by law; (iv) shall not require the Metropolitan Government to make payments at a rate in excess of the rate on the Refunded Bonds (where the Metropolitan Government is the fixed rate payor); (v) may provide to the Counterparty an option to put the Metropolitan Government into a floating to fixed interest rate swap, which will commence on the call date of the Refunded Bonds, upon a notice of at least 45 days to the Metropolitan Government; and (vi) shall be in substantially the form attached hereto as Exhibit B, together with such changes as may be approved by the Director of Finance, provided that such changes are consistent with the terms of this Resolution.

9. If any one or more of the covenants, agreements or provisions herein contained shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements and provisions hereof or of the Bonds issued hereunder.

10. All actions taken to date by the officials of the Metropolitan Government with respect to obtaining the report of the State Director finding that the interest rate swap agreement and confirmations thereunder to be entered into in connection with the refunding of the Refunded Bonds as contemplated herein are in compliance with the guidelines, rules or regulations adopted or promulgated by the State Funding Board, as set forth in Section 9-21-130 of the T.C.A., be and they are hereby ratified, confirmed and approved.

11. The appropriate officials of the Metropolitan Government are hereby authorized to execute and deliver all papers, certificates, receipts, opinions and other documents they may deem necessary or desirable, and to take all steps they may deem necessary or desirable to effect the transactions contemplated by this Resolution.

12. All resolutions in conflict or inconsistent herewith are hereby repealed insofar as any conflict or inconsistency exists.

13. This Resolution shall take effect from and after its adoption, the welfare of the Metropolitan Government requiring it.

Sponsored by: Brenda Gilmore

Exhibit A - Request for and Report of State Director of Local Finance Regarding Interest Rate Hedging Agreement (On file in Metropolitan Clerk's Office)

Exhibit B - Form of Interest Rate Swap Agreement and Related Confirmations (On file in Metropolitan Clerk's Office)

LEGISLATIVE HISTORY
Referred:	Budget & Finance Committee
Introduced:	April 20, 2004
Substitute Introduced:	April 20, 2004
Adopted:	April 20, 2004
Approved:	April 21, 2004
By: