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<br />Section 10. The City covenants that it wili use, and wi11 restrict the use and inveshnent
<br />of, the proceeds of the Notes in such manner and to such extent as may be necessary so that (a) the
<br />Notes wiil not (i) constitute private activity bonds, arbitrage bonds or hedge bonds under Section
<br />141, 148 or 149 of the Internal Revenue Code of 1986, as amended (the Code), or (ii) be treated
<br />other than as bonds to which Section 103(a) of the Code applies, and (b) the interest on the Notes
<br />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
<br />may be required of it for the interest on the Notes to be and remain excluded from gross income for
<br />federal income tax purposes, (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 Notes to the governmental purposes of the borrowing, (ii)
<br />restrict the yield on investment property, (iii) make timely and adequate payments to the federal
<br />government, (iv) maintain books and records and make calculations and reports, and (v) refrain
<br />from certain uses of those proceeds and, as applicable, of property financed with such proceeds, all
<br />in such manner and to the extent necessary to assure such exclusion of that interest under the Code.
<br />The Director of Finance, as the fiscal officer, or any other officer of the City having
<br />responsibility for issuance of the Notes 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 />Notes as the City is permitted or required to make or give under the federal income tax laws,
<br />including, without limitation thereto, any of the elections provided for in Section 148( fl(4)(C) of the
<br />Code or available under Section 148 of the Code, for the purpose of assuring, enhancing or
<br />protecting favorable tax treatrnent or status of the Notes or interest thereon or assisting compliance
<br />with requirements for that purpose, reducing the burden or expense of such compliance, reducing
<br />the rebate amount or payments of penalties, or making payments of special amounts in lieu of
<br />making computations to detemune, or paying, excess earnings as rebate, or obviating those amounts
<br />or payments, as determined by that officer, which action shall be in writing and signed by the
<br />officer, (b) to take any and all other actions, make or obtain calculations, make payments, and make
<br />or give reports, covenants and certifications of and on behalf of the City, as may be appropriate to
<br />assure the exclusion of interest from gross income and the intended tax status of the Notes, and (c)
<br />to give one or more appropriate certificates of the City, for inclusion in the transcript of proceedings
<br />for the Notes, setting forth the reasonable expectations of the City regazding the amount and use of
<br />all the proceeds of the Notes, the facts, circumstances and estimates on which they are based, and
<br />other facts and circumstances relevant to the tax treatrnent of the interest on and the tax status of the
<br />Notes.
<br />The City hereby represents that the Outstanding Notes were designated or aze treated as
<br />"qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the Code. The City hereby
<br />covenants that it will redeem the Outstanding Notes from proceeds of, and within 90 da.ys after
<br />issuance of, the Notes, and represents that all other conditions aze met for treating the Notes as
<br />"qualified tax-exempt obligations" and as not to be taken into account under subparagraph (D) of
<br />Section 265(b)(3) of the Code, without necessity for further designation, by reason of subparagraph
<br />(D)(ii) of Section 265(b)(3) of the Code. Further, the City represents and covenants that, during any
<br />time or in any manner as might affect the status of the Notes as "qualified tax-exempt obligations",
<br />it has not formed or participated in the formation of, or benefitted from or availed itself of, any
<br />entity in order to avoid the purposes of subpazagraph (C) or (D) of Section 265(b)(3) of the Code,
<br />and will not form, participate in the fortnation of, or benefit from or avail itself of, any such entity.
<br />The City further represents that the Notes are not being issued as part of a direct or indirect
<br />composite issue that combines issues or lots of tax-exempt obligations of different issuers.
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