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Bank Qualification <br />We understand the City (in combination with any subordinate taxing jurisdictions or debt issued <br />debt during this calendar year. Therefore, the Bonds will be <br />obligations pursuant to Federal Tax Law. <br />Arbitrage Compliance <br />Refunding Fund. All tax-exempt bond issues are subject to federal rebate requirements which <br />require all arbitrage earned to be rebated to the U.S. Treasury. A rebate exemption the City <br />down the entirety of the proceeds for refunding the Refunded Bonds within 6 months of issuance. <br />Debt Service Fund. The City must maintain a bona fide debt service fund for the Bonds or be <br />subject to yield restriction in the debt service fund. A bona fide debt service fund involves an <br />equal matching of revenues to debt service expense with a balance forward permitted equal to <br />the greater of the investment earnings in the fund during that year or 1/12 of the debt service of <br />that year. <br />The City should become familiar with the various Arbitrage Compliance requirements for this <br />bond issue. The Resolution for the Bonds prepared by Bond Counsel explains the requirements <br />in greater detail. <br /> <br />Continuing Disclosure <br />Type: Limited <br />Dissemination Agent: Northland Securities <br />The requirements for continuing disclosure are governed by SEC Rule 15c2-12. The primary <br />requirements of Rule 15c2-12 actually fall on underwriters. The Rule sets forth due diligence <br />cipal securities. Part of this requirement is <br />obtaining commitment from the issuer to provide continuing disclosure. The document <br />describing the continuing disclosure commitmen <br />Official Statement that will be prepared to offer the Bonds to investors. <br />The City has less than $10,000,000 of outstanding <br />disclosure. Historically, limited disclosure only required that certain information be provided <br />upon request. The 2010 amendments to the Rule added the provision that issuers must annually <br />provide financial information and operating data which is customarily prepared by the issuer <br />and is publicly available. Issuer <br />forth in the Rule, including, but not limited to, bond rating changes, call notices, and the issuance <br />, or bank placements) must be reported within <br />ten days of occurrence. Northland currently serves as dissemination agent for the City. We assist <br />with getting your annual report filed in compliance with limited continuing disclosure <br />regulations. <br /> <br /> <br /> <br /> <br />Northland Securities, Inc. Page 6 <br /> <br />