AN ORDINANCE CREATING A JOINT INDUSTRIAL DEVELOPMENT AUTHORITY FOR THE COUNTY OF BEDFORD AND THE TOWN OF BEDFORD PURSUANT TO TITLE 15.2, CHAPTER 49 OF THE CODE OF VIRGINIA

BE IT ORDAINED, by the council of the Town of Bedford, Virginia and by the board of supervisors of the County of Bedford, Virginia:

Section 1. The council of the Town of Bedford and the board of supervisors of Bedford County hereby jointly create a Joint Industrial Authority for the Town of Bedford, Virginia, and the County of Bedford, Virginia, pursuant to the provisions of section 15.2-4916 of the Code of Virginia, 1950, as amended, and which shall be subject to the following provisions:

JOINT INDUSTRIAL DEVELOPMENT AUTHORITY OF THE TOWN OF BEDFORD, VIRGINIA AND THE COUNTY OF BEDFORD, VIRGINIA

RESOLUTION OF THE BEDFORD JOINT INDUSTRIAL DEVELOPMENT AUTHORITY

WHEREAS, the Bedford Joint Industrial Development Authority (the "authority"), pursuant to the Industrial Development and Revenue Bond Act (the "act") under which it is created, is authorized to exercise all the powers set forth in the act, which include, among other things, the power to acquire, improve, maintain, equip, own, lease and dispose of properties, to the end that the authority may be able to protect and promote tourism and economic development in the commonwealth, to issue revenue bonds, notes and other obligations for the purpose of carrying out any of its powers and to pledge the revenues and receipts from the leasing of such facilities, or from any other source, to the payment of such bonds, notes and other obligations;

WHEREAS, the authority is the owner of various parcels of real estate on which the project (as hereinafter defined) will be located;

WHEREAS, the authority intends to issue and sell its Public Facility Revenue Note, Series 2004A (the "Series 2004A Note"), and its Taxable Public Facility Revenue Note, Series 2004B (the "Series 2004B Note" and, together with the Series 2004A Note, the "notes"), and will use the proceeds thereof to construct, renovate and equip and existing building located in the Bedford Center for Business for purposes of leasing space therein to certain tenants (the "project");

WHEREAS, the authority agrees to repay the notes from the payments received from rentals paid by tenants of the property and from payments received from the Town of Bedford, Virginia, and the County of Bedford, Virginia, pursuant to support agreements executed by each;

WHEREAS, the authority desires to sell the notes to SunTrust Bank (the "bank"), and the bank has agreed to purchase the notes on mutually agreeable terms; and

WHEREAS, there have been presented to this meeting the forms of the following instruments which the authority proposes to execute or approve to carry out the issuance of the notes, copies of which instruments shall be filed with the records of the authority (collectively, the "financing documents"):

(a)

Note Purchase and Financing Agreement (the "note purchase agreement"), between the authority and the bank;

(b)

Forms of the notes attached as an exhibit to the note purchase agreement;

(c)

Form of the town support agreement between the town and the authority, pursuant to which the town agrees to consider appropriations as may be necessary to pay debt service due on the notes;

(d)

Form of county support agreement between the county and the authority, pursuant to which the county agrees to consider appropriations as may be necessary to pay debt service due on the notes;

(e)

Form of Deed of Trust (the "deed of trust"), pursuant to which the authority shall convey a security interest in the project;

(f)

Form of Assignment of Rents and Leases (the "assignment"), pursuant to which the authority has agreed to assign to the bank rents and leases to be generated from the project; and

(g)

Form of escrow agreement between the authority and SunTrust Bank, Richmond, Virginia, as escrow agent, pursuant to which the proceeds of the notes shall be deposited, invested and requisitioned.

BE IT RESOLVED BY THE BEDFORD JOINT INDUSTRIAL DEVELOPMENT
AUTHORITY:

1.

The authority hereby authorizes the issuance of the notes in the aggregate principal amount of $1,400,000.00 pursuant to the terms and conditions of the note purchase agreement. The Series 2004A Note is to be designated "Public Facility Revenue Note, Series 2004A," and shall be dated the date of its delivery. The Series 2004B Note is to be designated "Taxable Public Facility Revenue Note, Series 2004B," and shall be dated the date of its delivery. The notes shall be sold to the bank on terms that shall be satisfactory to the chairman or vice-chairman of the authority, either of whom may act, provided that: (a) the interest rate on the Series 2004A Note shall not exceed 4.19 percent per year and the interest rate on the Series 2004B Note shall not exceed 6.26 percent per year, and (b) the notes shall mature no later than 15 years after the date of their issuance. The chairman and vice-chairman of the authority, either of whom may act, are authorized to determine the final principal amount of each of the Series 2004A Note and the Series 2004B Note, provided that the aggregate sum of the notes does not exceed $1,400,000.00. The Notes shall be sold to the bank at a price not less than 100 percent of the aggregate principal amount thereof. Principal and interest shall be payable on dates and in amounts as determined by the chairman or vice-chairman of the authority, either of whom may act. The notes shall be subject to prepayment, at the option of the authority, in whole or in part at any time at a price equal to (x) 101 percent of the amount to be prepaid beginning five years after the date of issuance and (y) 100 percent of the amount to be prepaid beginning six years after the date of issuance, plus accrued and unpaid interest.

2.

The authority hereby agrees to grant a security interest in the property in accordance with the terms of the deed of trust and to assign to the bank the rents and leases to be derived from the project in accordance with the terms of the assignment.

3.

The chairman and the vice-chairman of the authority, either of whom may act are hereby authorized and directed to execute and deliver the financing documents, which shall be in substantially the forms presented to this meeting, which are hereby approved, with such completions, omissions, insertions and changes as the authority's counsel or the executing officer of the authority may approve, with execution constituting conclusive evidence of approval of any such completions, omissions, insertions and changes.

4.

The chairman and vice-chairman of the authority, either of whom may act, are hereby authorized and directed to execute the notes by manual or facsimile signature, the secretary and assistant secretary, either of whom may act, are hereby authorized and directed to affix the seal of the authority to or print a facsimile thereof on the notes and attest the same by manual or facsimile signature, and the officers of the authority are hereby authorized and directed to deliver the notes to the bank upon payment of the purchase price therefor.

5.

All costs and expenses in connection with the undertaking of the project and the issuance of the notes, including the authority's fees and expenses and the fees and expenses of the bank, bond counsel and counsel for the authority, shall be paid from the proceeds of the notes or other legally available funds.

6.

Any authorization herein to execute a document shall include authorization to deliver it to the other parties thereto and to record such document where appropriate.

7.

The officers of the authority are hereby authorized and directed to execute, deliver and file all certificates and documents and to take all such further action as they may consider necessary or desirable in connection with the issuance and sale of the Series 2004A Note, including without limitation: (a) execution and delivery of a certificate setting forth the expected use and investment of the proceeds of the Series 2004A Note to show that such expected use and investment will not violate the provisions of Section 148 of the Internal Revenue Code of 1986, as amended, and regulations thereunder, applicable to "arbitrage bonds," (b) making any elections that such officers deem desirable regarding any provision requiring rebate to the United States of "arbitrage profits" earned on investment of proceeds of the Series 2004A Note, (c) providing for the payment of any such rebate amount, and (d) filing Internal Revenue Service Form 8038-G, and to take all such further action as they may consider necessary or desirable in connection with the issuance and sale of the Series 2004A Note and the undertaking of the portion of the project financed by the proceeds thereof. The foregoing shall be subject to the advice, approval and direction of bond counsel.

8.

The authority designates the Series 2004A Note as a "qualified tax-exempt obligation" for the purpose of section 265(b)(3) of the Code. The authority represents and covenants as follows:

(a)

The authority will in no event designate more than $10,000,000.00 of obligations as qualified tax-exempt obligations in calendar year 2004, including the Series 2004A Note, for the purpose of such section 265(b)(3);

(b)

The authority, all its "subordinate entities," within the meaning of section 265(b)(3) of the Code, and all entities that issue tax-exempt obligations on behalf of the authority and its subordinate entities have together not issued more than $10,000,000.00 of tax-exempt obligations in calendar year 2004 (not including "private activity bonds," within the meaning of section 141 of the Code, other than "qualified 501(c)(3) bonds," within the meaning of section 145 of the Code), including the Series 2004A Note;

(c)

Barring circumstances unforeseen as of the date of delivery of the Series 2004A Note, the authority will not issue tax-exempt obligations itself or approve the issuance of tax-exempt obligations of any of such other entities if the issuance of such tax-exempt obligations would, when aggregated with all other tax-exempt obligations theretofore issued in calendar year 2004 by the authority and such other entities, result in the authority and such other entities having issued a total of more than $10,000,000.00 of tax-exempt obligations in calendar year 2004 (not including private activity bonds other than qualified 501(c)(3) bonds), including the Series 2004A Note; and

(d)

The authority has no reason to believe that the authority and such other entities will issue tax-exempt obligations in calendar year 2004 in an aggregate amount that will exceed such $10,000,000.00 limit;

provided, however, that if the authority receives an opinion of nationally recognized bond counsel that compliance with any covenant set forth in [subsection] (a) or (c) above is not required for the Series 2004A Note to be a qualified tax-exempt obligation, the authority need not comply with such covenant.

9.

The authority appoints Hunton & Williams LLP, Richmond, Virginia, to serve as bond counsel.

10.

All other acts of the officers of the authority that are in conformity with the purposes and intent of this resolution and in furtherance of the issuance and sale of the notes and the undertaking of the project are hereby approved and ratified.

11.

This resolution shall take effect immediately.

The authority shall be known as "Bedford Joint Economic Development Authority."

(Ord. No. 05-17, § 1, 8-23-2005)

The authority shall be created under the provisions of the Industrial Development and Revenue Bond Act found in title 15.2, chapter 49 of the Code of Virginia, 1950, as amended, and is created specifically pursuant to the provisions of section 15.2-4916 which provides for two or more municipalities to create jointly an authority and to determine what limitations should be placed upon such authority.

Except as limited by the terms hereof, the authority shall have all the powers granted to authorities under the provisions of title 15.2, chapter 49 of the Code of Virginia, 1950, as amended. The authority shall be charged with the specific duty of developing and operating an Industrial Park site on property within the Town of Bedford near Independence Boulevard and such additional park sites as may be designated by the town council and the board of supervisors under the terms of an agreement dated June 2, 1997 and entitled "Joint Economic and Growth Sharing Agreement." The authority also shall have the responsibility for promoting industrial and commercial development in certain areas of the Town of Bedford and of Bedford County which shall be designated from time to time by the governing bodies of the jurisdictions as "economic development areas." The Bedford Joint Economic Development Authority shall operate only in those economic development areas designated by the governing bodies, it being the intention that the separate Industrial Development Authorities of the two jurisdictions shall continue to operate in respect to other areas of the two jurisdictions.

The Bedford Joint Industrial Development Authority shall be governed by a board of directors composed of seven directors. The directors shall be residents of the Town of Bedford or of Bedford County. No director shall be an officer or employee of either jurisdiction.

The seven directors shall be appointed by the governing bodies of the two jurisdictions. Three members shall be appointed by the council of the Town of Bedford; three shall be appointed by the board of supervisors of Bedford County; and the seventh member shall be appointed by the council of the Town of Bedford for one term and by the board of supervisors of Bedford County for the next term, and the appointment of such seventh member shall continue to alternate between the two governing bodies. The seven directors shall be appointed initially for terms of one, two, three and four years; one being appointed by each governing body for a one year term; one being appointed by each governing body for two year terms; one being appointed by each governing body for three year terms; and the fourth alternating member being appointed by the town council for a four-year term; subsequent appointments shall be for terms of four years; except appointments to fill vacancies which shall be for the unexpired terms shall be by the governing body that made the appointment to the office which is being vacated. All terms of office shall be deemed to commence upon the date of the initial appointment to the authority, and thereafter, in accordance with the provisions of the immediately preceding sentence. If at the end of any term of office of any director a successor thereto shall not have been appointed, then the director whose term of office shall have expired shall continue to hold office until his successor shall be appointed and qualify.

Four members of the board of directors shall constitute a quorum of the board for the purpose of conducting its business and exercising its powers and for all other purposes, except that no facilities owned by the authority shall be leased or disposed of in any manner without a majority vote of the members of the board of directors.

The directors shall elect from the membership a chairman, a vice-chairman, and from their membership or not, as they desire, a secretary and a treasurer, or a secretary/treasurer. Such officers shall continue to hold such offices until their respective successors shall be elected.

The directors shall receive no salary or compensation unless approved by the governing bodies from time to time, but they shall be reimbursed for their traveling and other expenses incurred in the performance of their duties.

Each year the Bedford Joint Economic Development Authority shall be audited by an independent auditing service, and copies of the audit shall be furnished to both the town council and to the board of supervisors. The audit shall be presented to the town council and to the county board of supervisors within a period of 60 days after the close of the fiscal year or thereafter as is reasonably expedient.

The board of directors shall keep detailed minutes of its proceedings, which shall be open to public inspection at all times. It shall keep suitable records of its financial transactions, which shall be open for inspection by representatives of the town council and by representatives of the board of supervisors. Within 60 day of the close of each fiscal year, the board of directors shall submit to the town council and to the board of supervisors financial reports showing expenditures and revenues and a statement showing the financial condition of the authority at the end of the preceding fiscal year, a written opinion of the success of the authority approved by its board of directors, a list of tenants, purchasers or other persons occupying or using any of its facilities, and recommendations regarding future industrial and commercial projects.

If the town council and the board of supervisors are of the opinion that the purposes for which the authority was formed have been substantially complied with and that all obligations heretofore incurred by the authority have been fully paid, upon certification thereof by the members of the board of directors of the Bedford Joint Economic Development Authority, then the two governing bodies shall resolve that the authority should be dissolved, and the authority shall be dissolved pursuant to the provisions of section 15.2-4914, and the title to all funds and properties owned by the authority at the time of such dissolution shall vest equally in the Town of Bedford and in the County of Bedford.

Section 2. This ordinance creating a Bedford Joint Economic Development Authority shall become effective only upon adoption by both governing bodies, and such ordinance shall be in full force and effect from and after the date of passage by the second governing body.