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<br />City's sanitary sewer system is available for the payment of the debt charges on the Bonds, and is
<br />appropriated for that purpose, the amount of the tax shall be reduced by the amount of the income so
<br />available and appropriated.
<br />Section 8. Federal Tax Considerations. The City covenants that it will use, and will
<br />restrict the use and investment of, the proceeds of the Bonds in such manner and to such extent as
<br />may be necessary so that (a) the Bonds will not (i) constitute private activity bonds, arbitrage bonds or
<br />hedge bonds under Sections 141, 148 or 149 of the Code or (ii) be treated other than as bonds to
<br />which Section 103 of the Code applies, and (b) the interest thereon will not be an item of tax
<br />preference under Section 57 of the Code.
<br />The City further covenants that (a) it will take or cause to be taken such actions that
<br />may be required of it for the interest on the Bonds to be and to remain excluded from gross income for
<br />federal income tax purposes, and (b) it will not take or authorize to be taken any actions that would
<br />adversely affect that exclusion, and (c) it, or persons acting for it, will, among other acts of
<br />compliance, (i) apply the proceeds of the Bonds to the governmental purpose of the borrowing, (ii)
<br />restrict the yield on investment property acquired with those proceeds, (iii) make timely and adequate
<br />payments to the federal government, (iv) maintain books and records and make calculations and
<br />reports, and (v) refrain from certain uses of those proceeds, and, as applicable, of properiy financed
<br />with such proceeds, all in such manner and to the extent necessary to assure such exclusion of that
<br />interest under the Code.
<br />The City represents that the Outstanding Series A Notes and the Outstanding Series B Notes
<br />are treated as "qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the Code. The City
<br />hereby covenants that the City will redeem the Outstanding Series A Notes and the Outstanding
<br />Series B Notes from proceeds of, and within 90 days after issuance of, the Bonds, and represents that
<br />all other conditions are met for treating the Bonds as "qualified tax-exempt obligations" and as not to
<br />be taken into account under subparagraph (D) of Section 265(b)(3) of the Code, without necessity for
<br />further designation, by reason of subparagraph (D)(ii) of Section 265(b)(3) of the Code. Further, the
<br />City represents and covenants that, during any time or in any manner as might affect the status of the
<br />Bonds as "qualified tax-exempt ohligations", it has not formed or participated in the formation of, nor
<br />benefited from or avai.led itself of, any entity in order to avoid the purposes of subparagraph (C) or (D)
<br />of Section 265(b)(3) of the Code, and will not form, participate in the formation of, or benefit from or
<br />avail itself of, any such entity. This City further represents that the Bonds are not being issued as part
<br />of a direct or indirect composite issue that combines issues or lots of tax-exernpt obligations of
<br />different issuers.
<br />The Director of Finance, as the fiscal officer, or any other officer of the City having
<br />responsibility for issuance of the Bonds is hereby authorized (a) to make or effect any election,
<br />selection, designation, choice, consent, approval, or waiver on behalf of the City with respect to the
<br />Bonds as the City is permitted or required to make or give under the federal income tax laws,
<br />including, without limitation, any of the elections available under Section 148 of ttze Code, for the
<br />purpose of assuring, enhancing or protecting favorable tax treatment or status of the Bonds or interest
<br />thereon or assisting compliance with requirements for that purpose, reducing the burden or expense
<br />of such compliance, reducing the rebate amount or payments or penalties, or making payments of
<br />special amounts in lieu of making computations to determine, or paying, excess earnings as rebate, or
<br />obviating those amounts or payments, as determined by that officer, which action shall be in writing
<br />and signed by the officer, (b) to take any and all other actions, make or obtain calculations, make
<br />payments, and make or give reports, covenants and certifications of and an behalf of the City, as may
<br />be appropriate to assure the exclusion of interest from gross income and the intended tax status of the
<br />Bonds, and (c) to give one or more appropriate certificates of the City, for inclusion in the transcript
<br />of proceedings for the Bonds, setting forth the reasonable expectations of the City regazding the
<br />amount and use of a11 the proceeds of the Bonds, the facts, circumstances and estimates on which they
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