39-04 Muni Bldg. Improvement Bond $1,468,300

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any such costs may be paid from the same sources from which the principal of and interest on the Notes are paid, which monies are hereby appropriated for such purpose. Any accrued interest shaIl be paid intà the Bond Retirement Fund to be applied to the payment of the principal and interest of the Notes in the marmerprovided by law, The City covenants that it will restrict the use of the proceeds of the Notes in such manner and to such extent, if ariy, as may be necessary so that the Notes will not constitute arbitrage bonds under Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"). The Fiscal Officer, as the fiscal officer, or any other officer of the City having responsibility for the issuance of the Notes shall give an appropriate certificate of the City, for inclusion in the transcript of proceedings for the Notes, setting forth the reasonable expectations of the City regarding the amount and use of all the proceeds of the Notes, the facts, circumstances, and estimates on which they are based, and other facts and circumstances relevant to the tax treatment of interest on the Notes. The City covenants that it (a) will take or cause to be taken such actions which may be required of it for the interest on the Notes to be and remain excluded from gross income for federal income tax purposes, and (b) will not take or permit to be taken any actions which would adversely affect that exclusion. and that it, or persons acting for it, will, among other acts of compliance, (i) apply the proceeds of the Notes to the govennnental purpose of the borrowing, (ii) restrict the yield on investment property acquired with those proceeds, (iii) make timely rebate payments to the federal government, (iv) maintain books and records and make calculations and reports, and (v) refrain from certain uses of proceeds, all in such manner and to the extent necessary to assure such exclusion of that interest under the Code. The Fiscal Officer and other appropriate officers are hereby authorized and directed to take any and all actions, make calculations and rebate payments, and make or give reports and certifications as may be appropriate to assure such exclusion .of that interest. Section 7. The Fiscal Officer is authorized and directed to execute a continuing disclosure certificate (the "Disclosure Certificate") setting forth the City's undertaking to provide annual reports and notices of certain events dated the date of delivery of the Notes and delivered to the original purchaser of the Notes for the benefit of the holders of the Notes (the ''Noteholders'') and to assist the original purchaser in complying with S.RC. Rule 15c2:12(b)(5) The City bereby covenants and agrees that it will comply with and carry out all of the provisions of the Disclosure Certificate. Failure of the City to comply with the Disclosure Certificate shaIl not be considered an event of default; however, any Noteholder may take such actions as may be necessary and appropriate to cause the City to comply with its obligations under this Section. Section 8. The Notes shall be the full general obligations of the City of Lakewood and the full faith and credit of said City are hereby pledged for the prompt payment of the same. The par value to be received from the sale of the bonds anticipated by the Notes and any excess funds resulting from the issuance of the Notes shall, to the extent necessary, be used ouly for the retirement of the Notes at maturity, together with the interest thereon, and is hereby pledged for such purpose. Section 9. During the year or years while the Notes run, there shall be levied on all the taxable property in the City of Lakewood, in addition to all other taxes, a direct tax annually not less than that which would have been levied if bonds had been issued without the prior issue of the Notes. Said tax. shall be and is hereby ordered computed, certified, levied and extended upon the tax duplicate and coUected by the same officers, in the same manner and at the same time that taxes for general purposes of each of saìd years are certified; extended and collected. Said tax shall be placed before aud in prefereuce to all items and for the full amount thereof The funds derived fÌom said tax levies hereby required shall be placed in a separate and distinct fund wbich, together with the interest collected on the same shall be irrevocably pledged for the payment offi.1e principal of and interest on the Notes or the bonds in anticipation of which they are issued, when and as the same falls due; provided, however, that in each year to the extent that revenues are available from other sources for the payment of the Notes and bonds and are appropriated for such purpose, the amount of such direct taX upon all of the taxable property in the City shall be reduced by the amount of such revenues so available and appropriated. {KLF2563.DOC;I} 3