PRILIMINARY OFFIC STATEMENT 11-15-2001 44.

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proceeds of the Series 2001 Tax-Exempt Bonds and other matters relating to the exclusion of the interest on the Series 2001 Tax-Exempt Bonds from gross income for purposes of federal and Minnesota income taxation. Certain sections of the Code impose continuing requirements that must be met after the issuance of the Series 2001 Tax-Exempt Bonds in order for interest thereon to be and remain not includable in gross income for purposes of federal and Minnesota income taxation. Noncompliance with such requirements may cause the interest on the Series 2001 Tax-Exempt Bonds to be includable in gross income for purposes of federal and Minnesota income taxation,either prospectively or retroactive to the date of issuance of the Series 2001 Tax-Exempt Bonds. These requirements include, but are not limited to (1)provisions that prescribe that the proceeds of the Series 2001 Tax-Exempt Bonds and certain other amounts are subject to yield and other investment restrictions and(2)provisions that require certain investment earnings to be rebated on a periodic basis to the Treasury Department of the United States. The Loan Agreement and the Indenture contain provisions (the "Tax Covenants"), including covenants of the City and the Borrower pursuant to which, in the opinion of Bond Counsel, such requirements can be satisfied. Assuming compliance with the Tax Covenants and on the basis of the certifications to be furnished at closing and existing law,Faegre&Benson LLP will render the legal opinion described in the preceding paragraph. If a Determination of Taxability occurs, the Series 2001 Bonds are subject to mandatory redemption. Related Federal and Minnesota Tax Considerations Interest on the Series 2001 Tax-Exempt Bonds may be includable in the income of a foreign corporation for purposes of the branch profits tax imposed by Section 884 of the Code. In the case of an insurance corporation subject to the tax imposed by Section 831 of the Code,the amount which otherwise would be taken into account as losses incurred under Section 832(b)(5)of the Code must be reduced by an amount equal to fifteen percent of the interest to be paid on the Series 2001 Tax-Exempt Bonds that is received or accrued during the taxable year. Section 86 of the Code requires recipients of certain social security and railroad retirement benefits to take into account interest on the Series 2001 Tax-Exempt Bonds in determining the taxability of such benefits. Passive investment income,including interest on the Series 2001 Tax-Exempt Bonds, may be subject to federal income taxation under Section 1375 of the Code for an S corporation that has Subchapter C earnings and profits at the close of the taxable year if greater than twenty-five percent of its gross receipts is passive investment income. Section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Series 2001 Tax-Exempt Bonds, and Minnesota law similarly denies a deduction of or such interest expense in the case of individuals,estates and trusts. Indebtedness may be allocated to the Series 2001 Tax-Exempt Bonds for this purpose even though not directly traceable to the purchase of the Series 2001 Tax-Exempt Bonds. Federal and Minnesota laws also restrict the deductibility of other expenses allocable to the Series 2001 Tax-Exempt Bonds. THE FOREGOING IS NOT INTENDED TO BE AN EXHAUSTIVE DISCUSSION