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OCT 2 21980 60®K 45 PAGE 10 <br />LETTER OF INTENT RE BOND ANTICIPATION NOTES FOR SOUTH COUNTY WATER <br />SYSTEM IMPROVEMENTS <br />ATTORNEY COLLINS REPORTED THAT HE HAS DISCUSSED THE LETTER <br />OF INTENT FROM SMITH BARNEY, HARRIS UPHAM & CO. WITH OUR BOND COUNSEL, <br />WHOSE OPINION IT IS THAT THE BOND ANTICIPATION NOTES DO NOT REQUIRE <br />THE SERVICES OF A TRUSTEE; SMITH BARNEY IS PUSHING FOR A TRUSTEE. <br />ATTORNEY COLLINS FELT WE SHOULD RELY ON THE BOND COUNSEL FOR THE <br />COUNTY, AND HE RECOMMENDED THAT THE BOARD APPROVE THE CONCEPT OF THE <br />LETTER OF INTENT SUBJECT TO AMENDMENT, <br />INTERGOVERNMENTAL COORDINATOR THOMAS CONCURRED AND FURTHER <br />NOTED THAT SUCH A TRUSTEE WOULD JUST BE AN ADDED EXPENSE TO THE COUNTY. <br />ATTORNEY COLLINS CONTINUED THAT THE FIRST PARAGRAPH UNDER <br />ITEM 4 OF THE LETTER OF INTENT STATES THAT ANY FORMAL OFFER TO PUR- <br />CHASE BANS WILL BE ACCEPTED OR REJECTED BY THE COUNTY ON THE SAME DAY <br />THE OFFER IS SUBMITTED WHILE THE FOLLOWING PARAGRAPH STATES THAT THE <br />COUNTY IS UNDER NO OBLIGATION TO ACCEPT ANY PROPOSAL TO PURCHASE THE <br />BANS, AND IF NO AGREEMENT IS REACHED AFTER TEN DAYS, THE UNDERWRITER <br />MAY TERMINATE THIS AGREEMENT. HE FELT THIS IS INCONSISTENT AND SUG- <br />GESTED THAT THERE SHOULD BE SOME WORDING CHANGE TO RECTIFY THIS. THE <br />ATTORNEY THEN NOTED THAT ITEM 5 STATES THAT ALL COSTS OF ISSUANCE, <br />INCLUDING ATTORNEY `S FEES, UNDERWRITER'S OUT-OF-POCKET EXPENSES, ETC., <br />ARE TO BE PAID BY THE COUNTY OUT OF BAN PROCEEDS. HE STATED THAT HE <br />ALWAYS HAD BEEN UNDER THE IMPRESSION THAT THE ATTORNEY FOR THE UNDER- <br />WRITER AND CERTAIN COSTS OF THE UNDERWRITER CAME OUT OF THE UNDER- <br />WRITER'S FEES, AND HE WOULD LIKE TO VERIFY THAT POINT TO SEE WHETHER <br />THIS IS CUSTOMARY OR REASONABLE. <br />ATTORNEY COLLINS NOTED THAT THIS SITUATION IS A LITTLE <br />DIFFERENT THAN WE HAVE SEEN IN THE PAST; HOUGH & CO. DID NOT HIRE <br />AN ATTORNEY TO REPRESENT THEM, AND SMITH BARNEY IS REPRESENTED. HE <br />CONTINUED THAT THE TIMETABLE IS TO TRY TO MOVE AHEAD TO CONSUMMATE <br />SOMETHING BY THE FIRST WEEK IN NOVEMBER, AND IF THE BOARD WOULD APPROVE <br />A LETTER OF INTENT SATISFACTORY TO THE CHAIRMAN, FINANCE OFFICER AND <br />10 <br />