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Page 2 of 3 <br /> Principal Payment: Principal repayment will occur with the issuance of tax increment bonds on <br /> or before Spring 2007. In no event shall the repayment date of any advance <br /> exceed the maturity date of the Loan. <br /> Draw Period <br /> Expiration: Six months prior to Loan Maturity. <br /> Prepayment: Prepayment may occur at any time. <br /> Security/ Recourse: Full recourse to the City's assets. <br /> Collateral: $837,500 (25% of the Loan amount). <br /> Loan Covenants: No Fannie Mae Foundation grants,loans or investments may be used by the <br /> City to repay or facilitate the repayment of the Loan. <br /> The City will make timely payments of principal and interest. <br /> The City will obey and comply with all laws, ordinances and regulations that <br /> may adversely affect its corporate existence or that may be ordered by a court <br /> or other governmental body. <br /> The City will pay all of its debt obligations in accordance with the terms set <br /> forth in those obligations. <br /> The City will notify Fannie Mae in writing of any event of default within <br /> three days after obtaining knowledge of the event. <br /> Within thirty days of the commencement of a lawsuit that may materially <br /> impact the City, the City will notify Fannie Mae in writing of the suit. <br /> The City will provide such information as Fannie Mae map request with <br /> reasonable promptness. <br /> The City will maintain proper books and records. <br /> The City will maintain a rating of Al from Moody's for its Long-Term <br /> General Obligation debt throughout the term of this Loan. If the General <br /> Obligation rating from Moody's is reduced to A2,then the interest rate on <br /> the Loan shall be increased by 25 basis points. If the General Obligation <br /> rating from Moody's is reduced to A3, the Loan shall become due and <br /> payable. <br /> Legal Fees: All legal fees to be paid by the City at closing. Legal fees shall be paid <br /> whether or not the Loan closes. <br /> • Origination Fee: 100 basis points of the Loan amount, due and payable at closing. <br /> "This term sheet is provided solely as a basis for discussion and is subject to change;it should <br /> not be construed as a binding commitment,but merely presented for review and consideration.— <br />