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6.01. Tax -Exempt Bonds. The City covenants and agrees. with the holders from time to time of the Bands that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest onthe Bonds to become subject to taxation under the Internal Revenue. Code of 1986; as amended (the "Code"); and the Treasury Regulations:promulgated. thereunder, in effect at: the time of such actions, and .that it will take. or cause its officers, employees or agents to take; all affirmative action within its power that may be necessary to ensure that such interest will not become subject.to taxation under the Code and applicable Treasury .Regulations, as presently existing. or .as. hereafter amended and made applicable to the Bonds. 6.02. No Rebate. Required. (a) The City will comply with requirements necessary under the Code to establish and inaintairi the exclusion. from gross 'income ❑fthe interest on the Bonds under Section. 1.03 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at. a yield. greater than the yield on the Bonds, :andthe rebate of excess. investment earnings to the United States, if the Bonds (together with other obligationsreasonably expected .to .be issued in calendar year201.8..) exceed the:small-issuer exception: amount of.$5,0p0,000. (b) For purposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements; the City finds, determines and declares that the aggregate face. amount of all. tax-exempt bonds (other than private activity bands) issued by the. City (and all subordinate. entities of the .City) during the calendar year in which the Bonds are issued and outstanding atone time is not reasonably expected to exceed .$5,000,000, all within the meaning of Section 148(t (4)(D) of the Code. 6.03. Not Private Activity Bonds. The City further covenants not. to. use the proceeds of the Bonds or the .2018 .Assessable Improvements financed by the Bonds or .to cause Or permit .them orany of them to be used,. in. such a manner as to. cause the Bonds to be "private activity bonds" Within the meaning of Sections 1.03 and 141 through 1'50 of the Code. 604, Qualified Tax -Exempt Obligations: In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3). of the Cade, the City makes the. following factual statements and. representations; (a.) the Bonds.are not "private activity bonds".as.defined in. Section 141 of the Code; (b) the. City designates the Bonds as "qualified tax_exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of .tax-exempt :.obligations (other than any private activity bonds that are not qualified 501(c)(3) bonds) which will .be issued by the City (and all subordinate, entities of the City) during calendar. year 2018 will not exceed $1.0,000,000; and` (d) not more than $10 000,000 of obligations issued by the City during calendar year 2018.:have .been designated for purposes. of Section 265(b)(3.) of the Code. 6,05, Procedural Requirements. The City will use itg best efforts to comply with ally federal procedural requirements which. may apply in. order to effectuate the designations made by this :section. 526486v 1 6AF or 190-14