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<br />2 | Page <br /> <br /> <br />Security: The Bonds will constitute general obligations of the City for <br />which its full faith, credit and taxing powers are pledged for <br />repayment without limitation as to rate or amount. <br /> <br />Interest Rate: The Bonds will bear interest at a fixed rate of 1.83%* (the <br />“Fixed Rate”) <br /> <br /> The rate assumes tax-exempt, bank qualified status of the <br />Bonds. Terms, conditions, and pricing are subject to change if it <br />is determined that the Bonds are ineligible for tax-exempt or <br />bank qualified treatment. <br /> <br /> *Please note that this is an indicative rate only, as of July 28, <br />2017 market close. The Bank Cost of Funds will adjust based on <br />movements in the LIBOR swap market while the Spread to <br />Bank Cost of Funds may increase or decrease to neutralize the <br />Bank’s return based on movements in the LIBOR swap market. <br />The actual Fixed Rate shall be determined on the Rate Set Date. <br /> <br /> The Fixed Rate is subject to adjustment upon a) the occurrence <br />of an event of taxability as a result of Issuer’s acts and/or <br />omissions and/or b) a reduction in the maximum federal <br />corporate tax rate – see “Margin Rate Factor” below. <br /> <br />Rate Set Date: The Fixed Rate will be set 2-3 business days prior to the Closing <br />Date. <br /> <br />Tax Treatment: Interest on the Bonds shall be excludable from gross income for <br />federal income tax purposes. The Issuer shall take all steps <br />necessary to maintain such tax exempt status for the Bonds. The <br />Bank shall be provided an opinion of tax counsel satisfactory to <br />the Bank which concludes that interest on the Bonds is <br />excludable from gross income for federal income tax purposes. <br /> <br />Other Fees: Usual and customary for this type of financing, including <br />amendment fees, and attorney’s fees. <br /> <br />Bond Counsel At cost <br />Bank Counsel At cost, estimated $6,500 <br /> <br />Margin Rate Factor: The Fixed Rate will be subject to adjustment by a Margin Rate <br />Factor. The Margin Rate Factor means the greater of (i) 1.0, and <br />(ii) the product of (a) one minus the Maximum Federal <br />Corporate Tax Rate multiplied by (b) 1.53846. The effective date <br />of any change in the Margin Rate Factor shall be the effective <br />date of the decrease or increase (as applicable) in the Maximum <br />Federal Corporate Tax Rate resulting in such change. <br /> <br />