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City of St. Anthony, Minnesota ti October 24, 1995 the City and bondholders in the event 100% of the tax increment revenues are not received as scheduled. Column 8 shows annual increments from the City's tax increment income received from Chandler Place and Kenzie Terrace Housing and Redevelopment Tax Increment Districts which are currently available for the payment of debt service for this issue. Column 9 shows the net tax levy requirement. Column 10 shows the cumulative surplus. It is our understanding the City will have other funds at its disposal available to eliminate the need of a tax levy including rental proceeds from the school district annually. Continuing Disclosure The Securities and Exchange Commission has finalized amendments to its Rule 15c2-12 which prohibits broker-dealers from underwriting municipal securities of $1,000,000 or more unless the issuer has agreed in writing to provide annual disclosure of financial and operating information and to disclose material events when they occur. This Rule is effective for issues underwritten on and after July 3, 1995. The agreement with the underwriter and bondholders, or the "undertaking," as it is called in the Rule, must be incorporated in the bond resolution or a separate disclosure agreement and' in the final Official Statement. The undertaking obligates issuers to prepare and file with all nationally recognized municipal securities information repositories ("NRMSIRs") annual updated financial and operating information and the annual audited financial statements, with certain exceptions as described below and to disclose material events when they occur. There are currently five NRMSIRs. The Rules uses the information in the Official Statement as the benchmark for data to include in the continuing disclosure report so that information provided in the Official Statement must be revised annually. The Rule exempts the following securities from the requirements to provide annual financial information and material event notices: (i) securities with an aggregate amount of less than $1,000,000; and (ii) securities sold in denominations of $100,000 or more, if the securities are sold to 35 or fewer sophisticated investors, or have a maturity of nine months or less. The Rule provides for partial exemptions under the following circumstance: (iii) securities with a stated maturity of 18 months or less are exempt from the annual financial information requirement but not the material events notice requirement. (iv) securities for which neither the issuer nor any other party committed to support all or part of the payment of debt service, is committed to repay more than $10,000,000 of outstanding municipal securities, including the current offering, are required to make material events notice fillings, but may choose to be obligated for only limited continuing disclosure. The provision does not take effect until January 1, 1996. The City cannot exempt itself with any of the exemptions and therefore, must obligate itself for annual disclosure. Prior to the sale date for the bonds, Springsted Incorporated will be working with your bond counsel to draft an acceptable undertaking which will be adopted by the City Council in the resolution awarding the bonds and it will also be published in the Official Statement. Page 2