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- 3 - Section 10. The City covenants that it will restrict the use of the proceeds of the Notes in such manner and to such extent, if any, as may be necessary so that the Notes will not const:Ltute arbitrage bonds under Section 148 of the Internal Revenue Code. of: 1986, cis amended (the Code). `J'he Director of: Finance, as the fiscal officer, or any other officer of the City having responsibility for the issuance of the Notes shall gave an appropriate certif- icate of the City, for inclusion in the transcript of proceedings for the Notes, setting fort;h the reasonable expectations of the City regarding the amount and use of all the proceeds of the Notes, the facts, circumstances and estimates on which they are based, and other facts and circumstances relevant to the tax treatment of the interest on the Notes. The City covenants that it (a) will. take or cause to be taken such actions that may be required of i"t for the interest on the Notes to be and remain excluded from gross income for federal income tax purposes, and (b) will not. take or authorize to be taken any actions that would adversely affect that. exclusion, and that it, or persons acting for it, will, among other acts of compliance, (i) apply the proceeds of the Notes to the governmental purpose of the borrowing, (ii) restrict the yield on investment property acquired with those proceeds, (iii) make timely rebate payments to the federal government, (iv) maintain hocks and records and make calculations and reports, and (v) refrain from certain uses of those proceeds, all in such manner and to the extent. necessary to assure si.~ch exclusion of that interest under the Code. The Director of Finance and other appr-epr.-iate officers are authorized and directed to take any and all actions, make calculations and rebate payments, and make or give reports and certi.fica.ti.ons, as may be appropriate to assure such exr_iu,ion of that in.Lerest. The Notes are hereby designated as "qualified tax-exempt obligations" for purposes of. Section 'l65(b)(3) of the Code. In that. connection, the City represents and covenants that it, together with all its subordinate entities or entities which issue obligations on its behalf, or on behalf of which it issues obligations, in or during the calendar year in which the Notes are issued, (i) have not and will not issue tax-exempt obligations designated as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code, including the Notes, in an aggregate amount in excess of. $10,000,000, and (ii) have not issued, do not reasonably anticipate issuing, and will not issue, tax-exempt ob_ligati.ons (including the Notes, but excluding obligations, other than qualified 501(c)(3) bonds as defined in Section 145 of the Code, that are private activity bonds as defined in Section 141 of the Code and excluding .refunding obligations that are not advance refunding obligations as defined i.n Section 149(d)(5) of the Code) in an aggregate amount exceeding $10,000,000, unless the City first obtains a written opinion of nationally recognized bond counsel that such designation or issuance, as applicable, will not adversely affect the status of the Notes as "qualified tax-exempt obliga- tionU". Further, the City represents and covenants that, during any time or in any manner as might: affect. the treatment of the Notes as "qualified tax- exempt obligations", i.t has not formed or pa.rtic:.ipated .in the formation of, or benefited from or avail.ad it.sel.f ~~~f, any entity in order. to avoid the purposes of subparagraph (C) or (1)) of Sectic:~n "Lt~S(b)(3j of the Code, and. will not fcr.rm, participate in the formation of, or benefit from or avail itself of, any such entity. The City further represents that the Notes are not being issued as part of a direct or indirect composite issue that combines issues or lots of tax-exempt obligai;ions of different issuers.