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school construction bonds under Executive Order Number Ninety (2009) issued by the Governor of the Commonwealth of Virginia on September 4, 2009; and WHEREAS, qualified school construction bonds are taxable bonds designed to provide no- or very-low-cost financing for qualified public school projects by granting to the bondholders an annual credit against the bondholders' federal income tax liability (including alternative minimum tax liability), which credit is intended to compensate the bondholders in lieu of interest. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PORTSMOUTH, VIRGINIA: 1. Authorization of Local School Bond and Use of Proceeds. The Council hereby determines that it is advisable to contract a debt and issue and sell its general obligation school bond in a principal amount not to exceed $19,000,000 (the "Local School Bond") for the purpose of financing the capital project for school purposes as described in Exhibit A and the issuance costs of the Local School Bond. The Council hereby authorizes the issuance and sale of the Local School Bond in the form and upon the terms established pursuant to this Ordinance and the Bond Sale Agreement. 2. Sale of the Local School Bond. It is determined to be in the best interest of the City to accept the offer of VPSA to purchase from the City, and to sell to VPSA, the Local School Bond at a price, determined by VPSA to be fair and accepted by the Mayor and the City Manager, or either of them. Given the VPSA Purchase Price Objective and market conditions, it may become necessary to sell the Local School Bond in a principal amount greater than the Proceeds Requested. If the limitation on the maximum principal amount on the Local School Bond set forth in Section 1 of this Ordinance restricts VPSA's ability to generate the Proceeds Requested, the Local School Bond may be sold for a purchase price of not lower than 95% of the Proceeds Requested. The Mayor, the City Manager, or either of them and such other officer or officers of the City as either may designate are hereby authorized and directed to enter into a Bond Sale Agreement with VPSA providing for the sale of the Local School Bond to VPSA. The agreement shall be in substantially the form submitted to the Council at this meeting, which form is hereby approved (the "Bond Sale Agreement"). 3. Details of the Local School Bond. The Local School Bond shall be dated the date of its issuance and delivery; shall be designated "General Obligation School Bond, Series 2009"; and shall mature on September 1 in the years (each a "Principal Payment Date") and in the amounts (the "Principal Installments") determined by the City Manager, subject to the provisions of Section 4 of this Ordinance. If and as necessary to conform the terms of the Local School Bond to the terms of the VPSA Bonds, the Local School Bond may bear interest at a supplemental coupon rate(s) determined by the City Manager following the pricing ofthe VPSA Bonds, provided that no supplemental coupon rate shall exceed 2% per year. 4. Principal Installments. The Principal Installments shall be determined by the City Manager at the direction of VPSA based on the final term to maturity of the VPSA Bonds, requirements imposed on VPSA by the nationally-recognized rating agencies and the final 2