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certified, levied, extended and collected, and shall be placed before and in preference to all other
<br />items and for the full amount thereof. The proceeds of the tax levy shall be placed in the Bond
<br />Retirement Fund, which is irrevocably pledged for the payment of the debt charges on the Notes or
<br />the Bonds when and as the same fall due.
<br />Section 10. The City covenants that it will use, and will restrict the use and investment of,
<br />the proceeds of the Notes in such manner and to such extent as may be necessary so that (a) the
<br />Notes will not (i) constitute private activity bonds or arbitrage bonds under Sections 141 or 148 of
<br />the Internal Revenue Code of 1986, as amended (the Code) or (ii) be treated other than as bonds the
<br />interest on which is excluded from gross income under Section 103 of the Code, and (b) the interest
<br />on the Notes will not be an item of tax 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 may be
<br />required of it for the interest on the Notes to be and remain excluded from gross income for federal
<br />income tax purposes, (b) it will not take or authorize to be taken any actions that would adversely
<br />affect that exclusion, and (c) it, or persons acting for it, will, among other acts of compliance, (i)
<br />apply the proceeds of the Notes to the governmental purposes of the borrowing, (ii) restrict the yield
<br />on investment property, (iii) make timely and adequate payments to the federal government, (iv)
<br />maintain books and records and make calculations and reports, and (v) refrain from certain uses of
<br />those proceeds and, as applicable, of property financed with such proceeds, all in such manner and
<br />to the extent necessary to assure such exclusion of that interest under the Code.
<br />The City hereby represents that the Outstanding Note was designated (or treated) as a
<br />"qualified tax-exempt obligation" pursuant to Section 265(b)(3) of the Code. The City hereby
<br />covenants that it will redeem the Outstanding Note from proceeds of, and within 90 days after
<br />issuance of, the Notes, and represents that all other conditions are met for treating an amount of
<br />the Notes not in excess of the amount of the Outstanding Note as "qualified tax-exempt
<br />obligations" and as not to be taken into account under subparagraph (D) of Section 265(b)(3) of
<br />the Code, without necessity for further designation, by reason of subparagraph (D)(ii) of Section
<br />265(b)(3) of the Code. Any amount of the Notes in excess of the amount of the Outstanding
<br />Note, determined in accordance with Section 265(b)(3) of the Code (the Designated Amount), is
<br />hereby designated as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the
<br />Code. In that connection, the City hereby represents and covenants that it, together with all its
<br />subordinate entities or entities that issue obligations on its behalf, or on behalf of which it issues
<br />obligations, in or during the calendar year in which the Notes are issued, (i) have not issued and
<br />will not issue tax exempt obligations designated as "qualified tax exempt obligations" for purposes
<br />of Section 265(b)(3) of the Code (including the Designated Amount of the Notes, but excluding
<br />qualified 501(c)(3) bonds as defined in Section 145 of the Code so designated) in an aggregate
<br />amount in excess of $30,000,000, and (ii) have not issued, do not reasonably anticipate issuing, and
<br />will not issue, tax exempt obligations (including the Designated Amount of the Notes, but excluding
<br />obligations that are private activity bonds as defined in Section 141 of the Code and excluding
<br />refunding obligations that are not advance refunding obligations as defined in Section 149(d)(5) of
<br />the Code) in an aggregate amount exceeding $30,000,000, unless the City first obtains a written
<br />opinion of nationally recognized bond counsel that such designation or issuance, as applicable,
<br />will not adversely affect the status of the Notes as "qualified tax-exempt obligations". Further,
<br />the City represents and covenants that, during any time or in any manner as might affect the
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