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Blue - T - Management <br /> 16009 Oak Plaza <br /> Omaha, Nebraska 68130 <br /> 1-800-621-9199 <br /> 402-896-2618 <br /> QUESTIONS AND ANSWERS CONCERNING <br /> INITIAL STAGES OF OPENING A MUNICIPAL GOLF COURSE <br /> 1 . Why we are able to provide financing through d LIJ 0 <br /> .Lease/Purchase Agreement? LLJ <br /> '1986 Tax Laws changed to allow Lease Purchase financing C/) <br /> through the use of C.O.P. (Certificates of 4_ 0 <br /> Participation) . Z. <br /> r <br /> 2. How does this affect the bonding capacity of the <br /> community? <br /> It does not affect the bonding capacity, since we do not :'c'° <br /> use bonds but C.O.P. LJ <br /> 3. How does this affect the community in terms of debt? <br /> It does not go on the municipal ' s books as a debt, since <br /> it must annually appropriate funds to pick up a shortfall <br /> between the golf revenue stream and the Lease/Purchase <br /> payment. <br /> 4. What happens 4f the municipality fails to-appropriate <br /> funds for that year? <br /> The Lease/Purchase Agreement becomes null and void and we <br /> must continue to operate the golf course until our <br /> investors are paid. <br /> 5. What are the repercussions if the community fails to <br /> appropriate? <br /> It would have an effect on their credit as would any <br /> other obligation. <br /> 6. What can Blue T do to assist in preventing a <br /> Lease/Purchase contract to break? <br /> A. We can start and complete the project on time. <br /> B. We will capitalize the construction costs for 2 <br /> years, thereby allowing 6 months of play, after 1 -1 /2 <br /> years of construction time, to generate revenue <br /> before a Lease/Vurchase payment is due. <br /> '^ C. We will provide a surplus reserve equal to one annual <br /> payment which can be used in -the event of a <br /> shortfall. This can be used in the early years of <br /> maturation and will prevent the community from <br /> dipping into their operating budget. <br />