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} 19 ifF Section 10.06. Other Representations and Covenants. (a) The City will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance and in each Bond; and the City will, at the times and in the marmer prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. (b) The City is duly authorized under the laws of the State of Texas to issue the Bonds; all action on its part for the creation and issuance of the Bonds has been duly and effectively taken; and the Bonds in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms. Section 10.07. Federal Tax Matters. (a) The City hereby represents that the proceeds of the Bonds are needed at this time to for the purposes specified in Section 3.01 hereof; that it is not reasonably expected that the proceeds of the Bonds or money deposited in the Interest and Sinking Fund "viII be used or invested in a marmer that would cause the Bonds to be or become "arbitrage bonds," within the meaning of Section 148 of the Code; and that, except for the Interest and Sinking Fund, no other funds or accounts have been established or pledged to the payment of the Bonds. (b) The City "..ill not take any action or fail to take any action with respect to the investment of the proceeds of the Bonds or any other funds of the City, including amounts received from the investment of any of the foregoing, if such action or inaction, based upon the facts, estimates, and circumstances knol,vn on the Closing Date, would result in constituting the Bonds "arbitrage bonds," within the meaning of Section 148 of the Code, and the City will not take any deliberate action motivated by arbitrage that would h~ve such result. (c) The City ",111 not take any action or fail to take any action I,vhich action, or inaction, would result in the Bonds being treated as "private activity bonds" \Yi.thin the meaning of Section 141(a) of the Code. (d) The City I,vill comply with the provisions of Section 148(f) of the Code (relating to paying certain excess earnings of investment proceeds of the Bonds to the United States) and the regulations promulgated thereunder. Tills covenant includes the maintenance of records regarding investments acquired I,vi.th the proceeds by or on behalf of the City adequate to calculate the City's rebate liability. (e) The City \Yi.ll not take any action or fail to take any action which action, or inaction, \vould result in the Bonds being treated as "federally guaranteed" I,vithin the meaning of Section l49(b) of the Code. (t) Proper officers of the City charged with the responsibility of issuing the Bonds are hereby directed to make, execute and deliver certifications as to facts, estimates and circumstances in existence as of the Closing Date and stating whether there are any facts, estimates or circumstances that would materially change the City's current expectations. (g) The covenants and representations made or required by this Section are for the benefit of the Ol,mers and may be reLied upon by the Omlers and Bond Counsel for the City. (h) The Bonds are hereby designated «qualified ta.x-exempt obligations" for the purposes of section 265(b)(3) of the Code. In this regard, neither the City nor any of its subordinate entities, if any, reasonably expect to issue in excess ofS10,000,000 aggregate amount of tax-exempt obligations [other than obligations not taken ""A.'<).(.UIWWSO.'"DOCS".O""NCE 28