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such payment or benefit will not cause interest on the Bonds to become includable in gross income for federal income tax purposes. 10. Minor Portion. Proceeds of the Bonds will not be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except during temporary periods described in Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable Treasury Regulations (the "Regulations"). Except for monies invested during a temporary period, not more than five percent (5%) of the proceeds of the Bonds or $100,000, whichever is less and exclusive of amounts, if any, in a reasonably required reserve or replacement funds and amounts, if any, invested for a reasonable temporary period will be used to acquire higher yielding investments. The "Minor Portion" for the Bonds is $33,961.36. 11. Three Year Temporary Period. The net sale proceeds and investment proceeds of the Bonds are intended to be used for a capital project and qualify for a three year temporary period because the City reasonably expects to satisfy the expenditure test, time test and due diligence test described below: (a) Expenditure 'test. At least eighty-five percent (85%) of the net sale proceeds of the Bonds will be expended for costs of the Assessable Improvements within three years of the date of this certificate. (b) Time Test. The City has entered into a contract or contracts for the Assessable Improvements or will enter into such contract or contracts within six months of the date of the Bonds, and the City has incurred a binding obligation to expend an amount equal to at least five percent (5%) of the sale proceeds of the Bonds, net of costs of issuance. (c) Due Diligence Test. Work on the Assessable Improvements and allocation of proceeds to expenditures will proceed with due diligence. 12. Temporary Period — Debt Service Account. Monies contributed to or deposited in the debt service fund for the Bonds, which is a bona fide debt service fund used to pay principal of, redemption premium (if any), and interest on the Bonds, will: (a) be withdrawn or paid from such fund within 13 months (or 12 months in the case of investment earnings on such fund) after receipt thereof; or (b) be accumulated in such fund in an amount not to exceed the lesser of one year's earnings on the fund or one -twelfth of annual debt service; and (c) be scheduled for the payment of highest practical amount of debt service in each year before the first date that the Bonds are subject to redemption and applied to redemption of the Bonds on the first call date. 13. Rebate Exception. The aggregate face amount of all tax-exempt obligations excluding private activity bonds, issued by the City during the calendar year 2018 is not expected to exceed $5,000,000 and it is expected that no rebate to the United States will be required under the Code. 14. Status as Private Activity Bonds or Arbitrage Bonds. The City will take no action that will cause any of the Bonds to be deemed to be a "private activity bond" within the meaning of Section 141 of the Code and applicable Regulations. The City will take no action that will cause any of 527553v1 GAF GE190-14 4