O-1994-1994 - Laserfiche WebLink

Browse Search

Note, as such interest comes due and such p~~cipa1 matures, are hereby pledged . .vocably for such paym~ wi thin the limit prescribed by 1a SECTION 5. The City Council covenants to take any aotion or refrain from any action which would adversely affect the treatment of the Note as an obligation described in section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which 1s not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the City Council covenants as follows: ( a) to take any action to assure that in the event that the "private business use" of the Property (within the meaning of section l41(b) of the Code) exceeds 5' of the original principal amount of the Note, then the amount in excess of 5' is used for a "private business use" which is "related" and not "disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental use; (b) to refrain from taking any action which would otherwise result in the Note being treated as a "private . activity bond" within the meaning of section l41(b) of the Code; and ( c) to refrain from taking any action that would result in the Note being "federally guaranteed" wi thin the meaning of section 149(b) of the Code. It 1s 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 furtherance of such intention, the City hereby authorizes and directs the Mayor of the City to execute any documents, certificates, or reports required by the Code and to make such elections, on behalf of the City, which may be permitted by the Code as are consistent with the purpose for the issuance of the Note. In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Note, 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 Note 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 Note, 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 Note under section 103 of the Code. ~"'''''''''OP'V 6" . .i., . i ~Ii" . .~ _.,- I. . . i"" ~. ...:101 .. . .: . . ~ i;,; i' ,,::1: :\' r.