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5.03. Taa Covenant. The City covenants and agrees • with the holders from time to time of the Notes 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 on the Notes to become subject to taxation under the Internal Revenue Code of 1986, as amended (the Code), and the Treasury Regulations promulgated thereunder (the Regulations), and covenants to take any and all actions within its powers to ensure that the interest on the Notes will not become subject to tazation under the Code and the Regulations. 5.04 Exemption from Rebate Recuirement. For purposes of complying with the requirements of Section 148(f)(4)(C) of the Code relating to the exemption of certain small governmental units from the rebate requirements of the Code, the City represents that: (i) the City is a governmental unit with general tazing powers; (ii) the Notes are not "private activity bonds" as defined in Section 141 of the Code (Private Activity Bonds); (iii) ninety-five percent of the net proceeds of the Notes are to be used for the local governmental purposes of the City; and • (iv) the aggregate face amount of all tax-exempt bonds (other than Private Activity Bonds) issued by the City in 1990 is not reasonably expected to exceed $5,000,000. Section 5.05. Interest Disallowance. The City hereby designates the Bonds as "qualified tax-exempt obligations" for purpose of Section 265(b) of the Code relating to the disallowance of interest ezpenses for financial institutions. The City represents that in calendar year 1990 it does not reasonably expect to issue tax-exempt obligations which are not private activity bonds (not treating qualified 501(c)(3) bonds under Section 145 of the Code as private activity bonds for purposes of this representation) in an amount in ezcess of $10,000,000. 5.06. arbitrage Certification. The Mayor and City Clerk, being the officers of the City charged with the responsibility for issuing the Notes pursuant to this resolution, are authorized and directed to ezecute and deliver to the Purchaser a certificate in accordance with the provisions of Section 148 of the Code, and Sections 1.103-13, • -13-