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-2- Utility Bonds authorized for issuance under the Authorizing Ordinance are authorized but unissued as of the date hereof; and WHEREAS, Section 2 of the Authorizing Ordinance authorizes the City to issue and sell general obligation public utility bond anticipation notes of the City in an aggregate principal amount equal to the principal amount of the Bonds authorized for issuance thereunder, the sale of any such general obligation public utility bond anticipation notes and the form and other details thereof to be approved, ratified and confirmed by the Council; and WHEREAS, the City has determined to issue and sell $9,900,000 principal amount of the general obligation public utility bond anticipation notes authorized for issuance by the Authorizing Ordinance in anticipation of the issuance of the Bonds authorized for issuance thereunder and has requested the Council to approve the sale of such general obligation public utility bond anticipation notes and the form and other details thereof; NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF PORTSMOUTH, VIRGINIA: A.. In accordance with and pursuant ro Section 2 of the Authorizing Ordinance, the Council hereby accepts the proposal of Crestar Securities Corporation to purchase and approves the sale to Crestar Securities Corporation of $9,900,000 principal amount of City of Portsmouth, Virginia, General Obligation Public Utility Bond Anticipation Notes (the "Notes") at a purchase price equal to the principal amount of the Notes. The Notes shall be dated August 12, 1998, shall mature on August 15, 1999, shall be subject to redemption at the option of the City prior to their stated maturity on or after March 1, 1999, in whole at any time. at a redemption price equal to the principal amount thereof and shall bear interest payable at maturity at the rate of three and seventy-eight hundredths per cenmm (3.78%) per annum, such interest to be calculated on the basis of a 365-day year and the actual number of days between the date of the Notes and the stated maturity date thereof. The Notes shall be numbered from No. R-1 upwards in order of issuance, shall be of the denomination of $1,000,000 each or any integral multiple thereof (except that one Note may be issued in the denomination of $900,000) and shall be in fully registered form. The form of the Notes attached m this resolution as Exhibit A is hereby approved, ratified and confirmed by the Council. B.. The City covenants that it shall comply with the provisions of Sections 103 and 141-150 of the Internal Revenue Code of 1986, and the Treasury Regulations promulgated or proposed to be promulgated thereunder, applicable to the Notes, throughout the term of the Notes.