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<br />promulgated thereunder, in effect at the time of such actions, and that it will take or cause its <br />officers, employees or agents to take, all affirmative action within its power that may be <br />necessary to ensure that such interest will not become subject to taxation under the Code and <br />applicable Treasury Regulations, as presently existing or as hereafter amended and made <br />applicable to the Bonds. <br /> <br />6.02. No Rebate Required. (a) The City will comply with requirements necessary <br />under the Code to establish and maintain the exclusion from gross income of the interest on the <br />Bonds under Section 103 of the Code, including without limitation requirements relating to <br />temporary periods for investments, limitations on amounts invested at a yield greater than the <br />yield on the Bonds, and the rebate of excess investment earnings to the United States, if the <br />Bonds (together with other obligations reasonably expected to be issued in calendar year 2006) <br />exceed the small-issuer exception amount of $5,000,000. <br /> <br />(b) For purposes of qualifying for the small-issuer exception to the federal arbitrage <br />rebate requirements, the City finds, determines and declares that the aggregate face amount of all <br />tax-exempt bonds (other than private activity bonds) issued by the City (and all subordinate <br />entities of the City) during the calendar year in which the Bonds are issued is not reasonably <br />expected to exceed $5,000,000, within the meaning of Section 148(f)(4)(D) ofthe Code. <br /> <br />6.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of <br />the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the <br />Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of <br />the Code. <br /> <br />6.04. Qualified Tax-Exempt Obligations. In order to qualify the Bonds as "qualified <br />tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the <br />following factual statements and representations: <br /> <br />(a) the Bonds are not "private activity bonds" as defined in Section 141 of the <br /> <br />Code; <br /> <br />(b) the City hereby designates the Bonds as "qualified tax-exempt <br />obligations" for purposes of Section 265(b)(3) of the Code; <br /> <br />(c) the reasonably anticipated amount of tax-exempt obligations (other than <br />any private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by <br />the City (and all subordinate entities of the City) during calendar year 2006 will not <br />exceed $10,000,000; and <br /> <br />(d) not more than $10,000,000 of obligations issued by the City during <br />calendar year 2006 have been designated for purposes of Section 265(b)(3) of the Code. <br /> <br />6.05. Procedural Requirements. The City will use its best efforts to comply with any <br />federal procedural requirements which may apply in order to effectuate the designations made by <br />this section. <br /> <br />294858v2 SJB CE155-26 <br /> <br />14 <br />