STATE OF TENNESSEE
COUNTY OF HAMBLEN
CORPORATION OF MORRISTOWN
FEBRUARY 1, 2005

The City Council for the City of Morristown, Hamblen County, Tennessee, met in regular session at the regular meeting place of the Council in the Morristown City Center at 4:00 p.m., Tuesday, February 1, 2005 with Honorable Mayor Gary R. Johnson presiding and the following named Councilmembers present: Claude Jinks, Frank McGuffin, William Rooney, Kay Senter, William Thompson and Rick Trent.

Councilmember Thompson made a motion to approve the January 18, 2005 minutes as circulated; Councilmember Jinks seconded the motion and upon roll call, all voted 'aye'.

A public hearing was held on the following captioned Ordinance No. 3203. Councilmember Thompson made a motion to adopt Ordinance No. 3203 on second and final reading; Councilmember McGuffin seconded the motion. Upon roll call, Councilmembers McGuffin, Thompson, Trent and Mayor Johnson voted 'aye'; Councilmembers Jinks, Rooney and Senter voted 'no'.

Ordinance No. 3203
Entitled an Ordinance to amend the Municipal Code of the City of Morristown, Tennessee, Appendix B. {Rezoning of property at 708 Forest Drive from Single Family Residential (R-1) to Office, Medical and Professional Restricted (OMP-R).}

A public hearing was held on the following captioned Ordinance No. 3204. Councilmember Jinks made a motion to adopt Ordinance No. 3204 on second and final reading; Councilmember Senter seconded the motion. Upon roll call, all voted 'aye'.

Ordinance No. 3204
Entitled an Ordinance to amend Section 14-2904 – General Provisions and Section 14-2906 – Permitted Signs by Zoning District, Chapter 29 (Zoning Ordinance) of Title 14 of the Morristown Municipal Code by deleting the sections in their entirety and substituting new sections therefor. {Amendment to the Sign Ordinance.}

Councilmember Thompson made a motion to award the Resident Inspection Services Contract for the Fish Hatchery Road Sanitary Sewer Extension to Hodge Engineering in an amount not to exceed $45,000. Councilmember Senter seconded the motion and upon roll call, all voted 'aye'.

Councilmember Thompson made a motion to award the Engineering Design Services Contract for the North Haun Road Sanitary Sewer Extension to J. R. Wauford & Company in the amount of $38,400. Councilmember Senter seconded the motion and upon roll call, all voted 'aye'.

Councilmember Rooney made a motion to award the Engineering Design Services Contract for the Pearce Drive Improvement and Extension Project to Wilbur Smith & Associates in the amount of $66,400. Councilmember Thompson seconded the motion and upon roll call, all voted 'aye'.

Councilmember Jinks made a motion to adopt the following Resolution No. 3-05; Councilmember Rooney seconded the motion and upon roll call, all voted 'aye'.

Resolution no. 3-05 A Resolution authorizing the selection of Morgan Keegan & Company, Inc. To act as underwriter in connection with one or more loans under one or more loan agreements between the City of Morristown, Tennessee and a Tennessee public building authority in an aggregate principal amount of not to exceed twenty three million dollars $23,000,000) and the preparation and presentation of documents to be executed and delivered relating to said borrowing; providing for the application of the proceeds of said borrowing and the payment of the municipality’s obligations in connection with said borrowing.

WHEREAS, municipalities in the State of Tennessee are authorized to finance and refinance certain public works projects by the issuance of bonds, notes or other obligations; and

WHEREAS, it is hereby determined by the City Council (the 'Governing Body') of the City of Morristown, Tennessee (the 'Municipality') to be in the best interest of the Municipality to finance the (i) acquisition of land for and the construction, improvement, renovation, equipping and/or repair of roads, bridges, streets, highways, sidewalks and related lighting, a public recreation and community center, a public auditorium, police and safety facilities, road department facilities, fire department facilities, parks and recreation department facilities, including, but not limited to public works department facilities and other public buildings, and the acquisition of related vehicles and equipment including, but not limited to, lighting, computers and other technological equipment (the 'G.O. Projects'); (ii) construction and equipping of extensions and improvements (the 'Water and Sewer Projects') to the water and sewer system (the 'Water and Sewer System') of the Municipality; (iii) the acquisition, construction, improvement, renovation, equipping and repair (the 'Cable Project') of a cable television and internet system in and for the Municipality (the 'Cable System'); (iv) acquisition of all property, real and personal, appurtenant to the G.O. Projects, the Water and Sewer Projects and the Cable Project (collectively, the 'Projects'); (v) payment of legal, fiscal, administrative, architectural and engineering costs incident to the Projects and incident to the indebtedness described herein; (vi) payment of capitalized interest during construction of the Projects and for up to six months thereafter; and (vii) payment of costs of issuance and sale of the Bonds (as defined below) and the Loan Agreement (as defined below); and

WHEREAS, it has been determined to be in the best interest of the Municipality to finance the Projects through a program known as the Tennessee Local Government Alternative Loan Program (TN-LOANSSM) underwritten by Morgan Keegan & Company, Inc. (the “Underwriter”), through the issuance by a Tennessee Public Building Authority (the 'Authority') established pursuant to the provisions of Tennessee Code Annotated Sections 12-10-101 et seq., as amended, (the 'Act') of its Local Government Public Improvement Bonds (the 'Bonds') in one or more series (each, a 'Series') in an aggregate principal amount of not to exceed $23,000,000 and the loan of the proceeds thereof of the Municipality pursuant to one or more loan agreements between the Authority and the Municipality (each a 'Loan Agreement'); and

WHEREAS, for the purposes of going forward with and financing the Projects, selecting Morgan Keegan & Company, Inc., Knoxville, Tennessee, as the original purchaser and underwriter (the 'Underwriter') in connection with said loan, authorizing the Underwriter to prepare, in conjunction with the Municipality’s bond counsel, the necessary documents in connection with the loan and the Bonds (collectively, the “Documents”) and asking that the Underwriter, in conjunction with the Municipality’s bond counsel, to prepare the Documents for presentation to the Governing Body, the Governing Body adopts this Resolution.

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Morristown, Tennessee, as follows:

Section 1. For the purpose of providing funds to finance the costs of the Projects and to pay costs incident thereto, the Governing Body hereby selects Morgan Keegan & Company, Inc., Knoxville, Tennessee, as the underwriter through a program known as the Tennessee Local Government Alternative Loan Program (TN-LOANSSM) underwritten by the Underwriter, through the issuance by the Authority established pursuant to the provisions of the Act of the Bonds in one or more Series in the aggregate principal amount of not to exceed $23,000,000 and the loan of the proceeds thereof to the Municipality pursuant to one or more Loan Agreements. The Underwriter is hereby authorized to proceed with the preparation of the Documents in connection with the loan, the Bonds and the Loan Agreement to be presented to the Governing Body for approval on terms not inconsistent with the terms hereof. The terms of the Bonds, including the amount, sale price, maximum rate of interest, maturities, terms of redemption and payment and all other covenants, terms and provisions relating to the Bonds shall be as set forth in a resolution adopted by the Governing Body.

Section 2. In connection with the foregoing, the Mayor and the City Administrator, or either of them, is authorized to take any and all actions appropriate to carry out the purposes and intent of this Resolution.

Section 3. This Resolution shall take effect from and after its adoption, the public welfare requiring it.

__________________________
Mayor

ATTEST:

___________________________
City Administrator/City Recorder

Without objection from City Council a resolution was added to the agenda relative to authorizing the issuance of $23,000,000 in bonds.

Councilmember Thompson made a motion to adopt the following Resolution No. 4-05; Councilmember Jinks seconded the motion and upon roll call, all voted 'aye'.

Resolution no. 4-05 A Resolution authorizing one or more loans under one or more loan agreements between the City of Morristown, Tennessee and a Tennessee public building authority in an aggregate principal amount of not to exceed twenty three million dollars ($23,000,000) and execution and delivery of one or more loan agreements and other documents relating to said borrowing; providing for the application of the proceeds of said borrowing and the payment of the municipality's obligations under the loan agreements; consenting to the assignment of the municipality's obligations under the loan agreements; and approving one or more swap agreements with respect to such loan agreements.

WHEREAS, municipalities in the State of Tennessee are authorized to finance and refinance certain public works projects by the issuance of bonds, notes or other obligations; and

WHEREAS, it is hereby determined by the City Council of the City of Morristown, Tennessee (the "Municipality") to be in the best interest of the Municipality to finance the (i) acquisition of land for and the construction, improvement, renovation, equipping and/or repair of roads, bridges, streets, highways, sidewalks and related lighting, a public recreation and community center, a public auditorium, police and safety facilities, road department facilities, fire department facilities, parks and recreation department facilities, including, but not limited to public works department facilities and other public buildings, and the acquisition of related vehicles and equipment including, but not limited to, lighting, computers and other technological equipment (the "G.O. Projects"); (ii) construction and equipping of extensions and improvements (the "Water and Sewer Projects") to the water and sewer system (the "Water and Sewer System") of the Municipality; (iii) the acquisition, construction, improvement, renovation, equipping and repair (the "Cable Project") of a cable television and internet system in and for the Municipality (the "Cable System"), (iv) acquisition of all property, real and personal, appurtenant to the G.O. Projects, the Water and Sewer Projects and the Cable Project (collectively, the "Projects"), (v) payment of legal, fiscal, administrative, architectural and engineering costs incident to the Projects and incident to the indebtedness described herein, (vi) payment of capitalized interest during construction of the Projects and for up to six months thereafter and (vii) payment of costs of issuance and sale of the Bonds (as defined below) and the Loan Agreement (as defined below); and

WHEREAS, it has been determined to be in the best interest of the Municipality to finance the Projects through a program known as the Tennessee Local Government Alternative Loan Program (TN-LOANSSM) underwritten by Morgan Keegan & Company, Inc. (the "Underwriter"), through the issuance by a Tennessee Public Building Authority (the "Authority") established pursuant to the provisions of Tennessee Code Annotated Sections 12-10-101 et seq., as amended, (the "Act") of its Local Government Public Improvement Bonds (the "Bonds") in one or more series (each, a "Series") in the aggregate principal amount of not to exceed $23,000,000 and the loan of the proceeds thereof to the Municipality pursuant to one or more loan agreements between the Authority and the Municipality (each a "Loan Agreement"); and

WHEREAS, an initial resolution authorizing the issuance of not to exceed $23,000,000 in general obligation indebtedness for the Projects was adopted on July 6, 2004, was published, together with a notice required by Section 12-10-115 and Section 9-21-206, Tennessee Code Annotated, as amended, as required by law and no legally sufficient protest was filed with the City Administrator/City Recorder with respect to the issuance of such indebtedness; and WHEREAS, the Municipality shall pledge a tax authorized by Section 12-10-115, Tennessee Code Annotated, as amended, to be levied annually to the repayment of the amounts due under each Loan Agreement authorized herein; and

WHEREAS, to provide for the financing of the Cable Project, repayment of amounts due under each Loan Agreement allocated to the Cable Project shall be additionally payable from and, to the extent permitted by applicable law, secured by, the revenues of the Cable System, subject only to the payment of reasonable and necessary costs of operating, maintaining, repairing and insuring the Cable System; and

WHEREAS to provide for the financing of the Water and Sewer Projects, each Loan Agreement, or applicable portion thereof, shall be additionally payable from, but not secured by, the revenues derived from the operation of the Water and Sewer System, subject to the payment of reasonable and necessary costs of operating, maintaining, repairing and insuring the Water and Sewer System and to a prior pledge of such revenues in favor of any obligations of the Municipality with a lien on such revenues; and

WHEREAS, the Bonds are to be secured by and contain such terms and provisions as are set forth in an Indenture of Trust, as supplemented (the "Indenture") entered into between the Authority and Regions Bank or such other trustee designated by the Authority; and

WHEREAS, in order to reduce its exposure to changes in interest rates, the Authority upon request of the Municipality, may enter into a Swap Agreement (as defined in this Resolution) with respect to all or a portion of the Bonds relating to the Loan Agreements authorized hereunder, resulting in payment of a fixed rate to a Swap Counterparty (as defined in the form of the Loan Agreement authorized hereunder) and a variable rate to be paid by the Swap Counterparty; and

WHEREAS, the Municipality and the Authority have submitted a request for a report of compliance with respect to the proposed Swap Agreements identified above to the State Director of Local Finance as required by the Guidelines and by Tennessee Code Annotated, Section 12-10-111 and Section 12-10-116, which report has been filed with the City Administrator/City Recorder and shall be included in the record of this meeting as Exhibit A attached hereto; and WHEREAS, the State Director has issued his report of compliance with respect to the proposed Swap Agreements in connection with the Bonds relating to the Loan Agreement authorized hereunder, which report has been filed with the City Administrator/City Recorder and shall be included in the record of this meeting as Exhibit B attached hereto; and

WHEREAS, there has been presented to this meeting the form of the Loan Agreement, which appears to be in appropriate form and is an appropriate instrument to be executed and delivered for the purposes intended and the form of the following documents: (1) International Swap Dealers Association, Inc. ("ISDA") Master Agreement; (2) Schedule to Master Agreement; (3) Confirmation for a rate swap transaction; (4) ISDA Credit Support Annex; (5) Financial Guaranty Insurance Policy for Swap Agreement; and (6) Financial Guaranty Insurance Policy for Swap Agreement (Counterparty Payment Policy); and WHEREAS, for the purposes of authorizing one or more loans from an Authority, the execution and delivery of one or more Loan Agreements by the Municipality, the pledging of the Municipality's full faith and credit for the payment of its obligations under each Loan Agreement, the pledging of the Net Revenues (as defined herein) of the Cable System to the Cable Project, approving the assignment of such pledge to secure each related Series of Bonds, and authorizing the execution of such documents and certificates as shall be necessary to consummate the sale and delivery of each Series of Bonds, and approving the terms and conditions of one or more Swap Agreements with respect to the Bonds authorized herein subject to compliance with the Guidelines and authorizing one or more Swap Agreements, the City Council of the Municipality adopts this Resolution.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Morristown, Tennessee, as follows:
Section 1. Approval of Loans. (a) For the purpose of providing funds to finance the costs of the Projects and to pay costs incident to the issuance and sale of each Series of Bonds and each related Loan Agreement, and make and receive the loans herein authorized, there is hereby authorized one or more loans from the Authority for the G. O. Projects and one or more loans for the Water and Sewer Projects in a principal amount not to exceed $5,000,000 and one or more loans for the Cable Project in a principal amount not to exceed $18,000,000.

(b) One or more Series of Bonds may be issued initially either as bonds bearing interest as an auction rate security ("ARS") or variable rate bonds with the interest rate established either (i) daily, weekly or short-term period (the 'Daily Rate', "Weekly Rate" and "Short-Term Period", respectively, as defined in the Loan Agreement) at the then market rate for obligations with similar credit quality, all as provided in the Indenture and each Loan Agreement, or (ii) at a Medium Term Rate (as defined in the Loan Agreement) if the Municipality or the Authority enters into an interest rate swap agreement or interest rate hedge agreement (a 'Swap Agreement') within 365 days of issuance of a related Series of Bonds with respect to all or a portion of a Loan Agreement or related Series of Bonds under which Swap Agreement a variable rate shall be paid by the Municipality and/or the Authority resulting in variable rate payments substantially similar to an interest rate established daily, weekly or short-term in the manner set forth in Section 6 herein or in any resolution subsequently adopted and as authorized by law, all as provided in the Indenture and the Loan Agreement. The Mayor and the City Administrator/City Recorder are authorized to enter into one or more Loan Agreements bearing interest at a variable rate of interest, including ARS, as they shall determine is in furtherance of the objectives of the Municipality. The Municipality shall make payments of interest in the amounts and on the dates as set forth in each Loan Agreement and the Indenture, at a rate or rates not in excess of the maximum rate of interest permitted by applicable law. Each Loan shall be payable as to principal over a period not to exceed thirty-five (35) years from the date of execution of each Loan Agreement. The final dates, original interest rate mode (as set forth above), and amortization of principal amounts of each Loan may be established by the Mayor and the City Administrator/City Recorder as shall be determined by the Mayor and the City Administrator/City Recorder to be in the best interests of the Municipality, in accordance with the terms of this resolution and each Loan Agreement, taking into consideration the present debt structure of the Municipality and projected funds available for payment of debt service.

Section 2. Interest Rate Conversion. At any time while any Loan remains outstanding, each Loan and the Series of Bonds issued in connection therewith, may, in whole or in part, to the extent permitted by applicable law, be converted from one Rate Period (as defined in the Loan Agreement) to the other interest Rate Periods permitted and as provided in each related Loan Agreement and in the Indenture (which conversion may include such put features relative to any Series of the Bonds as the Indenture may permit) at the direction of the Mayor and City Administrator/City Recorder and no further action shall be required by the City Council.

Section 3. Approval of Loan Agreements. The form, terms and provisions of each Loan Agreement which have been presented at this meeting are hereby approved and the Mayor and City Administrator/City Recorder are hereby authorized, empowered and directed to execute and deliver each Loan Agreement in the name and on behalf of the Municipality. Each Loan Agreement is to be in substantially the form now before this meeting and hereby approved, or with such changes therein as shall be approved by the Mayor and City Administrator/City Recorder, the execution thereof by the Mayor and City Administrator/City Recorder to constitute conclusive evidence of their approval of any and all changes or revisions therein. From and after the execution and delivery of each Loan Agreement, the Mayor and the City Administrator/City Recorder are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of each Loan Agreement as executed. To the extent any Loan Agreement can be designated as a "qualified tax-exempt obligation" pursuant to Section 265 of the Internal Revenue Code of 1986, as amended (the 'Code'), it shall be so designated in the Loan Agreement.

Section 4. Pledge. (a) Tax Pledge. The Municipality hereby covenants and agrees, through its governing body, to annually levy and collect a tax upon all taxable property within the Municipality, in addition to all other taxes authorized by law, sufficient to pay when due the annual amounts payable by the Municipality under each Loan Agreement as and when they become due and payable and to pay any expenses of maintaining and operating the Projects required to be paid by the Municipality under the terms of each Loan Agreement and, for such purposes, the Municipality hereby pledges such tax and the full faith and credit of the Municipality to such payments, provided, however, that the tax hereinabove described will not be required to be levied or, if levied, may be proportionately reduced to the extent of funds appropriated by the governing body of the Municipality to the payment of the amounts described above from other revenues of the Municipality. Such tax, to the extent levied, shall be assessed, levied, collected and paid in like manner as other taxes of the Municipality. Such tax shall not be included within any statutory or other limitation of rate or amount for the Municipality but shall be excluded therefrom and be in addition thereto and in excess thereof, notwithstanding and without regard to the prohibitions, restrictions or requirements of any other law, whether public or private. Any amounts payable under each Loan Agreement falling due at any time when there are insufficient funds from the tax levy on hand shall be paid from current funds of the Municipality and reimbursement therefore should be made out of the taxes hereby provided to be levied when the same shall have been collected.

(b) Payment of Water and Sewer System Revenues. Each Loan Agreement, or portion thereof, issued and delivered for the Water and Sewer Projects shall be additionally payable from, although not secured by, the revenues to be derived from the operation of the Water and Sewer System, subject to the payment of reasonable and necessary costs of operating, maintaining, repairing and insuring the Water and Sewer System and to any pledge of such revenues in favor of other obligations of the Municipality. No revenues derived from the Water and Sewer System shall be payable to any Loan Agreement or any allocable portion thereof for a General Obligation Project or for the Cable Project. (c) Net Revenue Pledge of Cable System Revenues. Repayment of amounts due under each Loan Agreement or portion thereof allocated to the Cable Project shall be additionally payable from, and to the extent permitted by applicable law, secured by, the Net Revenues (as herein defined) of the Cable System. No revenues derived from the Water and Sewer System shall be payable to any Loan Agreement or any allocable portion thereof for a G. O. Project or a Cable Project.

"Net Revenues" shall mean Revenues (as herein defined), excluding any profits or losses on the sale or other disposition, not in the ordinary course of business, of investments or fixed or capital assets, less Current Expenses (as herein defined). "Cable System" shall mean the complete cable television, video programming, video transmission, Internet access and other video transmission and distribution system of the Municipality, together with and including the Project, and all cable and video system properties of every nature hereafter owned by the Municipality, including all improvements and extensions made by the Municipality while any Loan Agreement remains outstanding, and including all real and personal property of every nature comprising part of or used or useful in connection with said Cable System, all administrative and operational support facilities, and including all appurtenances, contracts, leases, franchises and other intangibles. "Current Expenses" shall mean the reasonable and necessary costs of operating, maintaining, repairing and insuring the Cable System, including the cost of salaries, wages, cost of cable, video transmission, video programming, Internet access and other type services, material and supplies and insurance premiums, but shall exclude depreciation and interest expense.

"Revenues" shall mean all revenues, rentals, earnings and income of the Cable System from whatever source, including all revenues derived from the operation of the Cable System; proceeds from the sale of property; proceeds of insurance and condemnation awards and compensation for damages, to the extent not applied to the payment of the cost of repairs, replacements and improvements; and all amounts realized from the investment of funds of the Cable System, including money in any accounts and funds created by this resolution and resolutions authorizing any additional bonds, notes, loan agreement or other obligations (excluding any investment earnings from construction or improvement funds created for the deposit of bond proceeds pending use, to the extent such income is applied to the purposes for which the bonds were issued, and funds created to refund any outstanding bonds, notes, loan agreement or other obligations payable from revenues of the Cable System).

Additional bonds, notes, loan agreements and other obligations may be issued on a parity of lien with respect to the Net Revenues with any loan agreement authorized hereunder for extensions and improvements to the Cable System without regard to any other requirements.

Section 5. Approval of Bonds. For the purpose of providing funds to make each Loan to the Municipality, as provided herein and in each Loan Agreement, and to pay legal, fiscal, and administrative costs incident thereto including costs incident to the issuance and sale of each Series of Bonds related to a Loan Agreement, the issuance and sale of each Series of Bonds by the Authority in connection with a Loan Agreement is hereby approved and allocation of such Series of Bonds to the Municipality for purposes of Section 265 of the Code is hereby accepted.

Section 6. Approval of Swap Agreements. As authorized by the applicable provisions of the laws of the State of Tennessee, the guidelines of the Funding Board, and the report of the State Director of Local Finance attached hereto as Exhibit B, the Municipality hereby determines it to be in the best interests of the Municipality to reduce its exposure to changes in interest rates by authorizing and approving the execution and delivery by the Authority of one or more Swap Agreements in connection with all or any portion of any Series of Bonds related to a Loan Agreement authorized hereunder, in substantially the form of the International Swap Dealers Association, Inc. Swap Agreement, the form of which is presented to this meeting, with one or more financial institutions whose debt or claims-paying ability is rated, or is, collateralized, guaranteed or insured by an entity whose debt or claims-paying ability is rated "A" or better by Standard & Poor’s or Moody’s Investors Service (the "Swap Counterparty" or "Loan Swap Counterparty") in a notional amount which in the aggregate does not exceed the principal amount of such Series of Bonds declining in accordance with the amortization schedule for such Series of Bonds, having a term not longer than the final maturity of such Series of Bonds, providing for a fixed rate not to exceed six percent (6.00%) payable by the Municipality through the Authority in the case of a Swap Agreement and a variable rate payable by the Swap Counterparty based on (i) BMA Municipal Swap Index, (ii) the rate on the Series of Bonds to which the Swap Agreement relates (iii) the rate on the Series of Bonds to which the Swap Agreement relates, plus Additional Payments (as defined in the Indenture), (iv) LIBOR or a percentage thereof or (v) such other index or method to be approved by the Chairman or Vice-Chairman of the Authority.

In accordance with applicable provisions of the laws of the State of Tennessee, the guidelines of the Funding Board and the report of the State Director of Local Finance attached hereto as Exhibit B, the Mayor and the City Administrator/City Recorder on behalf of the Municipality are hereby authorized, empowered and directed hereunder to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of a Swap Agreement as it relates to any Series of Bonds issued in connection with such Loan Agreement. With respect to a Swap Agreement, the delivery of a certificate executed by the Mayor and the City Administrator/City Recorder, which may be the Confirmation of the Swap Agreement approving the terms and conditions of the Swap Agreement, shall constitute conclusive evidence of their approval of the final terms and conditions of the Swap Agreement and, to the extent permitted by applicable law, no further action shall be required by the City Council. Payments to be made under each Swap Agreement shall be made from payments required to be made under the Loan Agreement. Morgan Keegan & Company, Inc. and the Program Administrator are hereby authorized to negotiate the terms and conditions of each Swap Agreement in conformance with the terms of this Resolution, subject to confirmation by the Mayor and City Administrator/City Recorder, as set forth above.

Section 7. Disposition of Proceeds. An amount necessary to pay costs of issuance of each Loan Agreement and related Series of Bonds shall be deposited to the Cost of Issuance Fund of the Borrower held by the Trustee under the Indenture.

All remaining proceeds shall be held in the Loan Fund(s) of the Borrower and used for the Projects.

Section 8. Official Statement. The Mayor and the City Administrator/City Recorder, or either of them, working with the Underwriter and the Authority, are hereby authorized and directed to provide for the preparation and distribution, which may include electronic distribution, of a Preliminary Official Statement describing each Series of Bonds related to a Loan Agreement of the Municipality. After the Bonds have been sold, the Mayor and the City Administrator/City Recorder, or either of them, 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 Mayor and the City Administrator/City Recorder, or either of them, shall arrange for the delivery to the Underwriter of a reasonable number of copies of the Official Statement within seven business days after sale of a Series of Bonds for delivery, by the Underwriter, to each potential investor requesting a copy of the Official Statement and to each person to whom the Underwriter initially sells the Bonds. The Mayor and the City Administrator/City Recorder, or either of them, are authorized, on behalf of the Municipality, as to the information relating to the Municipality and the Series of Bonds related to the Municipality's Loan Agreement, 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 Municipality except for the omission in the Preliminary Official Statement of such pricing and other information.

Section 9. Continuing Disclosure. The Municipality 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 any Series of Bonds issued for a Loan Agreement of the Municipality. The Mayor and the City Administrator/City Recorder, or either of them, are authorized to execute an agreement for the benefit of and enforceable by the owners of such Series of Bonds specifying the details of the financial information and material event notices to be provided and its obligations relating thereto. Failure of the Municipality 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 Bonds to take such actions and to initiate such proceedings as shall be necessary and appropriate to cause the Municipality to comply with their undertaking as set forth herein and in said agreement, including the remedies of mandamus and specific performance.

Section 10. Consent to Assignment. The Municipality hereby consents to the assignment pursuant to the Indenture of all the Authority's right, title and interest under each Loan Agreement as security for the Series of Bonds to which such Loan Agreement relates. Section 11. Additional Authorizations. All acts and doings of the Mayor and the City Administrator/City Recorder and any other representative or officer of the Municipality which are in conformity with the purposes and intent of this Resolution and in furtherance of the issuance and sale of each Series of Bonds and the execution and delivery of each Loan Agreement and each Swap Agreement as set forth herein shall be and same hereby are in all respects, approved and confirmed.

Section 12. Multiple Borrowings. The Loans authorized in Section 1 hereof, the Loan Agreements authorized in Section 3 hereof and the Bonds approved in Section 5 hereof may be executed and delivered in combination with other Loans, Loan Agreements and Bonds hereafter authorized by the Municipality through the TN-LOANSSM Program.

Section 13. Separability. If any section, paragraph or provision of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Resolution. Section 14. Repeal of Conflicting Resolutions and Effective Date. All other resolutions and orders, or parts thereof, in conflict with the provisions of this Resolution, are, to the extent of such conflict, hereby repealed and this Resolution shall be in immediate effect from and after its adoption. Adopted and approved this 1st day of February 2005.

__________________________
Mayor

ATTEST:

___________________________
City Administrator/City Recorder
STATE OF TENNESSEE )
COUNTY OF HAMBLEN )

I, James H. Crumley, certify that I am the duly qualified and acting City Administrator/City Recorder of the City of Morristown, Tennessee, and as such official I further certify that attached hereto is a copy of excerpts from the minutes of a regular meeting of the governing body of the Municipality held on February 1, 2005 that these minutes were promptly and fully recorded and are open to public inspection; that I have compared said copy with the original minute record of said meeting in my official custody; and that said copy is a true, correct and complete transcript from said original minute record insofar as said original record relates to an amount not to exceed $23,000,000 in loan agreements of said Municipality. WITNESS my official signature and seal of said Municipality this 1st day of February 2005.

__________________________
City Administrator/City Recorder

(SEAL)

Councilmember Thompson made a motion to adopt the following captioned Ordinance No. 3206 on first reading and schedule a Public Hearing relative to final passage of said Ordinance for February 15, 2005. Councilmember Jinks seconded the motion and upon roll call, all voted “aye”.

Ordinance No. 3206
Entitled an Ordinance to Close and Vacate certain rights-of-way within the City of Morristown. {Closing the undeveloped right-of-way known as Kyle Street, off Gilbert Street.}

Councilmember Thompson made a motion to approve a Retirement Incentive for City Employees. Councilmember Senter seconded the motion and upon roll call, all voted “aye”. {Any City Employee who meets any of the following criteria will be considered eligible: 1) has worked at least 10 years for the City and is at least 60 years of age; 2) has worked at least 25 years for the City; or 3) is eligible to receive retirement benefits immediately after leaving the City’s employment under the Tennessee Consolidated Retirement System. Employees meeting the criteria and wishing to retire prior to June 30, 2005 will receive the following benefits: 1) lump sum payment on effective date of retirement equal to one half of the difference between one year of the retiree’s salary at the date of retirement and the beginning pay for their current pay grade; 2) Employee must retire on or before June 30, 2005 to receive benefits.}

CITY COUNCIL CONVENED AS THE BEER BOARD.

Councilmember Thompson made a motion to grant an Off-Premise Beer Permit to the Stop-N-Go Market, 1833 North Cumberland Street. Councilmember McGuffin seconded the motion and upon roll call, all voted 'aye'.

Mayor Johnson adjourned the February 1, 2005 City Council meeting.

_____________________________
Mayor
ATTEST:
____________________________
City Administrator