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. e (3) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10% of the proceeds of the Bonds; (g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings); (h) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90% of the "Excess Earnings", within the meaning of section 148(1) of the Code and to pay to the United States of America, not later than 60 days after the Bonds have been paid in full, 100% of the amount then required to be paid as a result of Excess Earnings under section 148(1) of the Code; and (i) to maintain such records as will enable the City to fulfill its responsibilities under this section and section 148 of the Code and to retain such records for at least six years following the final payment of principal and interest on the Bonds. It is the understanding of the City that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify, or expand provisions of the Code, as applicable to the Bonds, the City will not be required to comply with any covenant contained herein to the extent that such modification or expansion, in the opinion of nationally-recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Bonds, the City agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. SECTION 20. DESIGNATION AS QUALIFIED TAX-ExEMPT BoNDS. The City hereby designates the Bonds as "qualified tax-exempt bonds" as defined in section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). In furtherance of such designation, the City represents, covenants, and warrants the following: (a) during the calendar year in which tile Bonds are issued, the City (including any subordinate entities) has not designated nor will designate bonds, which when aggregated with the Bonds, will result in more than $10,000,000 of "qualified tax-exempt bonds" being issued; (b) the City reasonably anticipates that the amount of tax-exempt obligations issued during the calendar year in which the Bonds are issued by the City (or any subordinate entities) will not exceed $10,000,000; and (c) the City will take such action or refrain from such action as necessary in order that the Bonds will not be considered "private activity bonds" within the meaning of section 141 of the Code. SECl10N 21. SAIB OF BoNDS. Public advertisement for the sale of the Bonds and bids to purchase the Bonds having been received pursuant thereto, it is hereby found and declared that the bid submitted by Prudential-Bache Securities is the best bid received; and the sale of the Bonds 25