|
bonds under Sections 141 or 148 of the Code or (ii) be treated other than as bonds the interest on
<br /> which is excluded from gross income under Section 103 of the Code, and (ii) the interest on the
<br /> Bonds will not be an item of tax preference under Section 57 of the Code.
<br /> The City further covenants that (a) it will take or cause to be taken such actions that may
<br /> be required of it for the interest on the Bonds to be and to remain excluded from gross income for
<br /> federal income tax purposes, and (b) it will not take or authorize to be taken any actions that would
<br /> adversely affect that exclusion, and (c) it, or persons acting for it, will, among other acts of
<br /> compliance, (i) apply the proceeds of the Bonds to the governmental purpose of the borrowing, (ii)
<br /> restrict the yield on investment property acquired with those proceeds, (iii) make timely and
<br /> adequate payments to the federal government, (iv) maintain books and records and make
<br /> calculations and reports and (v) refrain from certain uses of those proceeds, and, as applicable, of
<br /> property financed with such proceeds, all in such manner and to the extent necessary to assure such
<br /> exclusion of that interest under the Code.
<br /> The City represents that the Outstanding Note was designated(or treated) as a"qualified
<br /> tax exempt obligation" pursuant to Section 265(b)(3) of the Code. The City hereby covenants that
<br /> the City will redeem the Outstanding Note from proceeds of, and within 90 days after issuance of,
<br /> the Bonds, and represents that all other conditions are met for treating an amount of the Bonds not
<br /> in excess of the amount of the Outstanding Note as "qualified tax exempt obligations" and as not to
<br /> be taken into account under subparagraph (D) of Section 265(b)(3) of the Code, without necessity
<br /> for further designation, by reason of subparagraph (D)(ii) of Section 265(b)(3) of the Code. Any
<br /> amount of the Bonds in excess of the amount of the Outstanding Note, determined in accordance
<br /> with Section 265(b)(3) of the Code (the Designated Amount), is hereby designated as "qualified tax
<br /> exempt obligations" for purposes of Section 265(b)(3) of the Code. In that connection, the City
<br /> hereby represents and covenants that the City, together with all of its subordinate entities or entities
<br /> that issue obligations on behalf of the City, or on behalf of which the City issues obligations, in or
<br /> during the calendar year in which the Bonds are issued, (i) have not issued and will not issue tax
<br /> exempt obligations designated as "qualified tax exempt obligations" for purposes of Section
<br /> 265(b)(3) of the Code (including the Designated Amount of the Bonds), in an aggregate amount in
<br /> excess of$10,000,000, and (ii) has not issued, does not reasonably anticipate issuing, and will not
<br /> issue, tax exempt obligations (including the Designated Amount of the Bonds, but excluding
<br /> obligations, other than qualified 501(c)(3) bonds as defined in Section 145 of the Code, that are
<br /> private activity bonds as defined in Section 141 of the Code and excluding refunding obligations
<br /> that are not advance refunding obligations as defined in Section 149(d)(5) of the Code) in an
<br /> aggregate amount exceeding $10,000,000, unless the City first obtains a written opinion of
<br /> nationally recognized bond counsel that such designation or issuance, as applicable, will not
<br /> adversely affect the status of the Bonds as "qualified tax exempt obligations". Further, the City
<br /> represents and covenants that, during any time or in any manner as might affect the status of the
<br /> Bonds as "qualified tax exempt obligations", the City has not formed or participated in the
<br /> formation of, or benefited from or availed itself of, any entity in order to avoid the purposes of
<br /> subparagraph (C) or (D) of Section 265(b)(3) of the Code, and will not form, participate in the
<br /> formation of, or benefit from or avail itself of, any such entity. The City further represents that the
<br /> Bonds are not being issued as part of a direct or indirect composite issue that combines issues or lots
<br /> of tax exempt obligations of different issuers.
<br /> - 16 -
<br />
|