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I <br />I <br />I <br /> <br />I <br />I <br />I <br />I <br />I <br />! <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />3-5. Preservation of Tax Exemi3t Status of the Note. <br /> <br /> (1) In order to preserve the tax exempt status ~9f <br />the Note, the City covenants that it shall take such actiOns as <br />are required and within their reasonable control to prevent the <br />interest on the Note from becoming taxable for federal income <br />tax purposes for the owners thereof (other than any owner who <br />is a "substantial user" or "related person thereto" within the <br />meaning of Section 103(b) of the Code) including but not <br />limited to taking all actions required of it under Section <br />103(c)(6) of the Code. To this. end, the City shall: <br /> <br /> (A) cause the Borrower to maintain records <br />identifying all "gross proceeds" attributable to the Note, the <br />yield at which such gross proceeds are invested, any arbitrage <br />profit derived therefrom, and any earnings derived from the <br />investment of such arbitrage profit; <br /> <br /> (B) make and maintain on fule all annual <br />determinations of the amount, if any, of excess arbitrage <br />required to be rebated to the United States; <br /> <br /> (C) rebate to the United States at least once every <br />five years the ~nount, if any, which is required to be rebated <br />to the United States, including the last installment which <br />shall be made no later than 30 days after the day on which the <br />Note is paid in full; <br /> <br /> (D) not invest "gross proceeds" in any acquired <br />nonpurpose obligations so as to deflect arbitrage otherwise <br />payable to the United States as a "prohibited payment" to a <br />third party; <br /> <br /> (E) refrain from investing any "gross proceeds" <br />'allocable to the Note in acquired nonpurpose obligations at a <br />yield in excess of the yield on the Note to the extent such <br />gross proceeds exceed in any calendar year more than 150% of <br />the debt service requirements for the Note in that calendar <br />year; and <br /> <br /> (F) retain on file all records of the annual <br />determination of the rebate amount until six (6) years after <br />the retirement of the Note; <br /> <br /> (2) The City hereby represents and covenants that <br />any fees received by it in connection with the issuance of the <br />Note shall be spent as quickly as practicable and until spent <br />shall not De invested in acquired nonpurpose obligations the <br />yield on which exceeds the yield on the Note. <br /> <br />12 <br /> <br /> <br />