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<br />RESOLUTION OF THE CITY COUNCIL OF THE CITY OF <br />MARTINSVILLE, VIRGINIA DECLARING ITS INTENTION TO <br />REIMBURSE ITSELF FROM THE PROCEEDS OF ONE OR MORE <br />TAX-EXEMPT FINANCINGS FOR CERTAIN EXPENDITURES MADE <br />AND/OR TO BE MADE IN CONNECTION WITH THE ACQUISITION, <br />CONSTRUCTION AND EQUIPPING OF CITY OF MARTINSVILLE <br />SCHOOL PROJECT AND LANDFILL PROJECT CAPITAL <br />IMPROVEMENTS <br /> <br />WHEREAS, the City of Martinsville, Virginia (the "Issuer") is a political subdivision <br />organized and existing under the laws of the Commonwealth of Virginia; and <br /> <br />WHEREAS, the Issuer has paid, beginning no earlier than May 13, 2005 and will pay, on <br />and after the date hereof, certain expenditures (the "Expenditures") in connection with the <br />acquisition, construction and/or equipping of a City of Martinsville Patrick Henry Elementary <br />School capital project (the "School Project") and a City of Martinsville Landfill capital project <br />(the "Landfill Project"), as more fully described in Exhibit A attached hereto; and <br /> <br />WHEREAS, the City Council of the Issuer (the "Council") has determined that those <br />moneys previously advanced no more than 60 days prior to the date hereof and to be advanced <br />on and after the date hereof to pay the Expenditures are available only for a temporary period <br />and it is necessary to reimburse the Issuer for the Expenditures from the proceeds of one or more <br />issues of tax-exempt bonds (the "Notes and the Bonds"); <br /> <br />NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL AS FOLLOWS: <br /> <br />Section 1. The Council hereby declares the Issuer's intent to reimburse the Issuer with <br />the proceeds of the Notes and the Bonds for the Expenditures with respect to the Project made on <br />and after May 13, 2005, which date is no more than 60 days prior to the date hereof. The Issuer <br />reasonably expects on the date hereofthat it will reimburse the Expenditures with the proceeds <br />of the Notes and the Bonds. <br /> <br />Section 2. Each Expenditure was and will be either (a) of a type properly chargeable to <br />capital account under general federal income tax principles (determined in each case as of the <br />date of the Expenditures), (b) a cost of issuance with respect to the Notes and the Bonds, (c) a <br />nonrecurring item that is not customarily payable from current revenues, or (d) a grant to a party <br />that is not related to or an agent of the Issuer so long as such grant does not impose any <br />obligation or condition (directly or indirectly) to repay any amount to or for the benefit of the <br />Issuer. <br /> <br />Section 3. The maximum principal amount of the Notes expected to be issued for the <br />School Project is $2,500,000 and the maximum principal amount of the Bonds expected to be <br />issued for the Landfill Project is $2,500,000. <br /> <br />Section 4. The Issuer will make a reimbursement allocation, which is a written allocation <br />by the Issuer that evidences the Issuer's use of proceeds of the Notes and the Bonds to reimburse <br />