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2.4 No Federal Guarantee. The City and the Authority will not directly or indirectly use or permit the use of any proceeds of the 1994 Bonds or any other funds of the City and the Authority or take or omit to take any action that would cause the 1994 Bonds to be obligations which are "federally guaranteed" within the meaning of Section 149(b) of the Code. In furtherance of this covenant, the City and the Authority will not allow the payment of the principal or interest with respect to the 1994 Bonds to be guaranteed (directly or indirectly) in whole or in part by the United States or any agency or instrumentality thereof. The City and the Authority also will not, except as provided in the next sentence, use 5 percent or more of the proceeds of the 1994 Bonds to make loans the payment of the principal or interest with respect to which are guaranteed in whole or in part by the United States or any agency or instrumentality thereof, nor will they invest 5 percent or more of the proceeds in federally insured deposits or accounts. The preceding sentence shall not apply to (i) temporary period investments of proceeds held in the Bona Fide Debt Service Funds (to the extent such Funds comply with Section 3.8 hereof), (ii) investments of proceeds held in the Reserve Account (to the extent such Account complies with the requirements of Section 3.10 hereof); or (iii) investments in obligations issued by the United States Treasury. 2.5 No Refunding. None of the proceeds of the 1994 Bonds will be used to pay debt service with respect to any obligations other than the 1994 Bonds. 2.6 Information Reporting. The City and the Authority shall file or cause to be filed an Internal Revenue Service Form 8038-G with respect to the 1994 Bonds no later than the fifteenth day of the second month following the calendar quarter in which the 1994 Bonds are executed and delivered. 2.7 No Pooling. None of the proceeds of the 1994 Bonds will be used to make loans to two or more ultimate borrowers. 2.8 No Hedge Bonds. The City and the Authority reasonably expect that more than 85 percent of the Spendable Proceeds of the 1994 Bonds will be expended for the governmental purpose of the 1994 Bonds within 3 years of the Closing Date. III. Arbitrage 3.1 Reasonable Expectations; Reliance on Others. This Article III states the reasonable expectations of the City and the Authority with respect to the amounts and uses of the proceeds of the 1994 Bonds and certain other funds. The expectations of the City and the Authority concerning certain uses of 1994 Bond proceeds and certain other moneys described herein and other matters are based in whole or in part upon representations of other parties as set forth in this Tax Certificate or exhibits hereto. Neither the City nor the Authority is aware of any facts or circumstances that would cause either the City or the Authority to question the accuracy or reasonableness of any representations made in this Tax Certificate, including exhibits attached to this Tax Certificate. 3.2 Offering Price. Based upon advice of the Underwriters (attached hereto as Exhibit A),the 1994 Bonds have been offered to the public (excluding any bondhouse, broker or other intermediary) at the prices or yields listed on Schedule Ito ExhibitA hereto and the initial offering prices are reasonable under customary standards in the applicable tax-exempt market. 3.3 Funds and Accounts. The following Funds and Accounts relating to the 1994 Bonds have been established: LA1-69477.4 7