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4. Fund and Accounts. The Certificates are payable from the Issuer's General Obligation Equipment Certificates of Indebtedness, Series 2004B Fund (the "Fund"), which Fund contains the following accounts: a Capital Account (for the acquisition of the Equipment), and a Debt Service Account (for payment of debt service on the Certificates). 5. Capital Account: Time Test; Due Diligence Test; Expenditure Test. (a) Costs of Acquisition and Issuance. The costs of acquiring the Equipment and issuing the Certificates will be paid from the Capital Account in the Fund. With respect to the Equipment, the Issuer reasonably expects to satisfy the time test, the due diligence test and the expenditure test as set forth below: (i) Time Test. Substantial binding contracts or commitments for acquiring the Equipment obligating the expenditure of not less than $ (5% of the Net Sale Proceeds of the Certificates) have heretofore been entered into or made or will be entered into or made within six months from the date hereof. "Net Sale Proceeds" is the issue price of the Certificates less the accrued interest and less any bond proceeds deposited in any reserve fund or account. All such contracts are, or will be, binding obligations of the Issuer. (ii) Due Diligence Test. The acquisition of the Equipment and the allocation of the Net Sale Proceeds of the Certificates to expenditures has proceeded and will continue to proceed with due diligence to completion. The Equipment is estimated to be purchased by ,200_. (iii) Expenditure Test. Any contract or commitment for the acquisition of the Equipment heretofore or hereafter executed has provided or will provide for the acquisition of the Equipment in less than three years from the date hereof; and proceeds of the Certificates in an amount equal to at least 85% of the Net Sale Proceeds of the Certificates will be spent in paying the cost of acquisition of the Equipment within three years from the date hereof. (b) Costs of Issuance, Transfer. The costs of issuing the Certificates will be incurred and paid within three years from the date hereof. Any moneys remaining in the Capital Account after acquisition of the Equipment and payment of the costs of issuing the Certificates will be transferred to the Debt Service Account unless transferred to the fund of any other purchase as authorized by law. (c) Investments. The Issuer shall not invest amounts in the Capital Account at a yield inaterially higher than the yield on the Certificates or in obligations exempt from federal income taxation under Section 103(a) of the Code if and to the extent moneys remain therein after the earlier of (i) acquisition of the Equipment is complete or, (ii) three years from the date hereof. 1714595vl 2