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<br />e <br /> <br />21. Negative Covenant as to Use of Imorovements. The <br />City hereby covenants not to use the Improvements or to cause or <br />permit the Improvements to be used, or to enter into any deferred <br />payment arrangements for the cost of the Improvements, in such a <br />manner as to cause the Bonds to be "private activity bonds" <br />within the meaning of Sections 103 and 141 through 150 of the <br />Code. <br /> <br />22. Tax-Exempt Status of the Bonds; Rebate. The City <br />shall comply with requirements necessary under the Code to <br />establish and maintain the exclusion from gross income under <br />Section 103 of the Code of the interest on the Bonds, including <br />without limitation (1) requirements relating to temporary periods <br />for investments, (2) limitations on amounts invested at a yield <br />greater than the yield on the Bonds, and (3) the rebate of excess <br />investment earnings to the United States if and to the extent <br />that the Bonds do not qualify for available exceptions. In <br />calendar year 1994, the City does not expect to qualify for the <br />$5,000,000 "small issuer" exception to the federal arbitrage <br />rebate requirements. <br /> <br />23. Desiqnation of Qualified Tax-Exempt Obligations. <br />In order to qualify the Bonds as "qualified tax-exempt <br />obligations" within the meaning of Section 265(b) (3) of the Code, <br />the City hereby makes the following factual statements and <br />representations: <br /> <br />e <br /> <br />(a) the Bonds are issued after August 7, 1986; <br /> <br />(b) the Bonds are not "private activity bonds" as <br />defined in section 141 of the Code; <br /> <br />(c) the City hereby designates the Bonds as "qualified <br />tax-exempt obligations" for purposes of Section 265(b) (3) of <br />the Code; <br /> <br />(d) the reasonably anticipated amount of tax-exempt <br />obligations (other than private activity bonds, treating <br />qualified 501(c) (3) bonds as not being private activity <br />bonds) which will be issued by the City (and all entities <br />subordinate to, or treated as one issuer with, the City) <br />during calendar year 1994 will not exceed $10,000,000; and <br /> <br />(e) not more than $10,000,000 of obligations issued or <br />to be issued by the City during calendar year 1994 have been <br />designated for purposes of Section 265(b) (3) of the Code. <br /> <br />The City shall use its best efforts to comply with any federal <br />procedural requirements which may apply in order to effectuate <br />the designation made by this paragraph. <br /> <br />e <br /> <br />264002.1 <br /> <br />19 <br />