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• <br />• <br />• <br />City of Lino Lakes, Minnesota <br />September 18, 2006 <br />4. Amount of the Bonds <br />5. Authority for the Issues <br />6. Repayment Terms <br />7. Security and Source of Payment <br />(a) Security <br />(b) Source of Payment <br />(c) Payment Cycle <br />The Series 2006E Bonds - $3,025,000 <br />The Series 2006F Bonds - $1,745,000 <br />Included in the Terms of Proposal for both series of <br />Bonds is a provision that permits the City to increase or <br />reduce the principal amount of the Bonds in any of the <br />maturities. This allows for any necessary adjustments <br />that may be required based on final interest rates or <br />issuance costs. <br />The Bonds are being issued pursuant to Minnesota <br />Statutes, Chapter 475. In addition, the Series 2006F <br />Bonds are being issued pursuant to Minnesota Statutes, <br />Chapter 444. <br />The Series 2006E Bonds will mature annually <br />February 1, 2010 through 2018. <br />The Series 2006F Bonds will mature annually <br />February 1, 2008 through 2012. <br />Interest on both series of Bonds will be payable semi- <br />annually each February 1 and August 1, commencing <br />February 1, 2007 for the Series 2006E Bonds and <br />August 1, 2007 for the Series 2006F Bonds. <br />The Bonds will be general obligations of the City secured <br />by its full faith and credit and taxing power. <br />The Series 2006E Bonds will be repaid with ad valorem <br />tax levies. The Series 2006F Bonds will be repaid from <br />net revenues of the City's water utility. <br />With regard to the Series 2006E Bonds, each year's <br />collection of taxes will be used to make the August 1 <br />interest payment in the year of collection and the <br />February 1 principal and interest payment in the following <br />year. <br />With regard to the Series 2006F Bonds, net revenues of <br />the City's water utility will be available to make the debt <br />service payments as they come due. <br />- 5 8 - <br />Page 2 <br />