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15. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Certificate, including without limitation (1) requirements relating to temporary periods for investments, (2) limitations on amounts invested at a yield greater than the yield on the Certificate, and (3) the rebate of excess investment earnings to the United States. For 2002, the City does not expect to qualify for the $5,000,000 small-issuer exception to arbitrage rebate. 16. The City is not designating the Certificate as a "qualified tax-exempt obligation" under Section 265(b)(3) of the Code. 17. When any obligation of the Certificate has been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this Resolution to the registered owner of the Certificate (with respect to the obligation thereof so defeased) shall, to the extent permitted by law, cease. The City may at any time discharge any or all of such obligation(s) with respect to the Certificate, subject to the provisions of law now or hereafter authorizing or regulating such action, by depositing irrevocably in escrow, with a suitable institution qualified by law as an escrow agent for this purpose, cash or securities which are backed by the full faith and credit of the United States of America, beating interest payable at such times and at such rates and maturing on such dates and in such amounts as shall be required and sufficient, subject to sale and/or reinvestment in like securities, to pay said obligation(s), which may include any interest payment on such Certificate and/or principal amount due thereon at a stated maturity (or if irrevocable provision shall have been made for permitted prior redemption of such principal amount, at such earlier redemption date). 18. With respect to the Equipment, the City has complied and will continue to comply with the "Reimbursement Regulations" provided in United States Treasury Regulations Section 1.150-2. In particular, except where the following may not be required by said Regulations (e.g., with respect to certain "preliminary expenditures"), to the extent that any of the proceeds of the Certificate will be used to reimburse the City for a cost of the Equipment theretofore paid and temporarily financed by the City out of other City funds, prior to the initial payment thereof (or within applicable time limits thereafter) the City has made or will have made a duly qualifying statement of its official intent to bond for such costs; otherwise, the proceeds of the Certificate are to be used for initial payment, and not for such reimbursement, of costs of the Equipment. 19. The Council hereby finds that the Certificate is exempt from continuing disclosure requirements of Rule 15c2-12 of the Securities and Exchange Commission because the Certificate is issued in the aggregate principal amount of less than $1,000,000. Consequently, the City is not covenanting to provide and will not provide annual financial information, notices of certain material events or any other disclosure or information which would otherwise be required by that Rule. Adopted by the Elk River City Council on June 10, 2002. 1413517vl 8