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The City covenants that it will restrict the use of the proceeds of the Notes in such
<br />manner and to such extent, if any, as may be necessary so that the Notes will not constitute
<br />arbitrage bonds under Section 148 of the Internal Revenue Code of 1986, as amended (the
<br />"Code"). The Fiscal Officer, as the fiscal officer, or any other officer of the City having
<br />responsibility for the issuance of the Notes shall give an appropriate certificate of the City, for
<br />inclusion in the transcript of proceedings for the Notes, setting forth the reasonable expectations
<br />of the City regarding the amount and use of all the proceeds of the Notes, the facts,
<br />circumstances, and estimates on which they are based, and other facts and cimumstances relevant
<br />to the tax treatment of interest on the Notes.
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<br /> The City covenants that it (a) will take or cause to be taken such actions which
<br /> may be required of it for the interest on the Notes to be and remain excluded from gross income
<br />· for federal income tax purposes, and (b) will not take or permit to be taken any actions which
<br /> would adversely affect that exclusion, and that it, or persons acting for it, will, among other acts
<br /> of compliance, (i) apply the proceeds of the Notes to the governmental purpose of the borrowing,
<br /> (ii) restrict the yield on investment property acquired with those proceeds, (iii)make timely
<br /> rebate payments to the federal government, (iv)maintain books and records and make
<br /> calculations and reports, and (v) refrain from certain uses of proceeds, all in such manner and to
<br /> the extent necessary to assure such exclusion of that interest under the Code. The Fiscal Officer
<br /> and other appropriate officers are hereby authorized and directed to take any and all actions,
<br /> make calculations and rebate payments, and make or give reports and certifications as may be
<br /> appropriate to assure such exclusion of that interest.
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<br /> Section7. The Fiscal Officer ts authorized and directed to execute a
<br />continuing disclosure certificate (the "Disclosure Certificate") setting forth the City's
<br />undertaking to provide annual reports and notices of certain events dated the date of delivery' of
<br />the Notes and delivered to the original purchaser of the Notes for the benefit of the holders of the
<br />Notes (the "Noteholders") and to assist the original purchaser in complying with S.E.C.
<br />Rule 15c2-12(b)(5). The City hereby covenants and agrees that it will comply with and carry out
<br />all of the prbvisions of the Disclosure Certificate. Failure of the City to comply with the
<br />Disclosure Certificate shall not be considered an event of default; however, any Noteholder may
<br />take such actions as may be necessary and appropriate to cause the City to comply with its
<br />obligations under this Section.
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<br /> Section 8. The Notes shall be the full general obligations of the City of
<br />Lakewood and the full faith and credit of said City are hereby pledged for the prompt payment of
<br />the same. The par value to be received from the sale of the bonds anticipated by the Notes and
<br />any excess funds resulting from the issuance of the Notes shall, to the extent necessary, be used
<br />only for the retirement of the Notes at maturity, together with the interest thereon, and is hereby
<br />pledged for such purpose.
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<br /> Section 9. During the year or years while the Notes run, there shall be levied on
<br />all the taxable property in the City of Lakewood, in addition to all other taxes, a direct tax
<br />annually not less than that which would have been levied if bonds had been issued without the
<br />prior issue of the Notes. Said tax shall be and is hereby ordered computed, certified, levied and
<br />extended upon the tax duplicate and collected by the same officers, in the same manner and at
<br />the same time that taxes for general purposes of each of said years are certified, extended and
<br />collected. Said tax shall be placed before and in preference to all items and for the full amount
<br />thereof. The funds derived from said tax levies hereby required shall be placed in a separate and
<br />distinct fund which, together with the interest collected on the same shall be irrevocably pledged
<br />£c~r tho p~_xrmont of the principal of and interest on the Note~ or tho hcmHe in ~ntir. ir~t{r~, c~f,xrhioh
<br />they are issued, when and as the same falls due; provided, however, that in e~ch year to the
<br />extent that revenues are available from other sources for the payment of the Notes and bonds and
<br />are appropriated for such purpose, the amount of such direct tax upon all of the taxable property
<br />in the City shall be reduced by the amount of such revenues so available and appropriated.
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<br /> Section I 0. It is hereby determined and recited that all acts, conditions and things
<br />necessary to be done precedent to and in the issuing of the Notes in order m make them legal,
<br />valid and binding obligations of the City of Lakewood, will have been done and performed in
<br />regular and due form as required by taw; and that no limitation of indebtedness or taxation, either
<br />statutory or constitutional, will have been exceeded in the issuance of said Notes.
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