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• Owners of the Discount Bonds should consult their tax advisors with respect to the determination and treatment of original issue discount accrued as of any date and with respect to the state and local tax consequences of owning a Discount Bond. As shown on the cover page of this Official Statement, certain of the Bonds are beim sold at a premium(collectively, the "Premium Bonds"). An amount equal to the excess of the issue price of a Premium Bond over its stated redemption price at maturity constitutes premium on such Premium Bond. An initial purchaser of a Premium Bond must amortize any premium over such Premium Bond's term using constant yield principles, based on the purchaser's yield to maturity (or, in the case of Premium Bonds callable prior to their maturity, by amortizing the premium to the call date, based on the purchaser's yield to the call date and giving effect to the call premium). As premium is amortized, the amount of the amortization offsets a corresponding amount of interest for the period and the purchaser's basis in such Premium Bond is reduced by a corresponding amount resulting in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Premium Bond prior to its maturity. Even though the purchaser's basis may be reduced, no federal income tax deduction is allowed. Purchasers of the Premium Bonds should consult their tax advisors with respect to the determination and treatment of premium for federal income tax purposes and with respect to the state and local tax consequences of owning a Premium Bond. In the further opinion of Bond Counsel, under existing law the interest on the Bonds is exempt from all Arkansas state,county and municipal taxes. Current or future legislative proposals, if enacted into law, may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation or otherwise prevent holders of the Bonds from realizing the full current benefit of the tax status of such interest. For example, both • the American Jobs Act of 2011, introduced by President Obama on September 12, 2011 (the "Jobs Act") and the federal budget for fiscal year 2013, proposed by President Obama on February 13, 2012 (the "2013 Proposed Budget") would, for tax years beginning on or after January 1, 2013, limit the exclusion from*Toss income of interest on obligations like the Bonds to some extent for taxpayers who are individuals and whose income is subject to higher marginal income tax rates. The introduction or enactment of any such legislative proposals may also affect the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any such pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion. It is not an event of default on the Bonds if the 2013 Proposed Budget, the Jobs Act or other legislation is enacted reducing or eliminating the exclusion of interest on state and local government bonds from gross income for federal or state income tax purposes. MISCELLANEOUS Underwritine. Under a Bond Purchase Agreement (the "Agreement") entered into by and between the City, as issuer, and Crews & Associates, Inc., as underwriter (the "Underwriter"), the Bonds are being purchased at a price of$ (principal amount less$ of Underwriter's discount and $ of net original issue _) plus accrued interest. The Agreement provides that the Un erwriter will purchase all of the Bonds if any are purchased. The obligation of the Underwriter to accept delivery of the Bonds is subject to various conditions contained in the Agreement, including the absence of pending or threatened litigation questioning the validity of the Bonds or any proceedings in connection with the issuance thereof, and the absence of material adverse changes in the financial or business condition of the City. The Underwriter intends to offer the Bonds to the public initially at the offering prices set forth • on the cover page of this Official Statement, which prices may subsequently change without any 26