O-1991-1755 - Laserfiche WebLink

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. e when due of the principal of and Interest on the Bonds as provided therein (the "Munlcipnl Bond Guaranty Insurance Policy"), the Bonds shall remnin outstanding for all purposes, not be deCeased or otherwise satisfied, and not be considered paid by the City, and the assignment and pledge of the proceeds of pledged revenues and all covenants, agreements, and other obligations of the City to the registered owners shall continue to exist and shall run to the benefit of AMBAC Indemnity, and AMBAC Indemnity shall be subrogated to the rights of such registered owners. SECTION 20. TAX COVENANTS. The City covenants to take any action to assure, or refrain from any action which would adversely affect, the treatment of the Bonds as obligntions described in section 103 oC the Code, the interest on which is not includable In the "gross income" of the holder Cor purposes of federal income taxation. . In furtherance thereof, the City covenants as follows: (a) to take any action to assure that no more than 10% of the proceeds of the Bonds (less amounts deposited to a reserve fund, If any) are used for any "private business l;lse", as defined in section 141(b)(G) of the Code or, if more than 10\ of the proceeds are so used, that amounts, whether or not received by the City, with' respect to such private business use, do not, under the terms of this Ordinance or auy underlying arrangement. directly or indirectly, secure or provide for the payment of more than 10% of the debt service on the Bonds, in contravention of section 141(b)(2) of the Code;.. (b) to take any action" to assure that in the event that the "privat'e business use" described in subsection (a) hereof exceeds 5% of the proc(~eds of the Bonds (less amounts deposited into a reserve fund, if any) 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; (c) to take any action to assure that no amount which is grea tel' than the lesser of $5,000,000, or 5% oC the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code; (d) to refrain from taking any action which would otherwise result in the Bonds being treated as "private activity bonds" withIn the meaning of section 141(a) of the Code; (e) to refrain from taking any action that would result in the Bonds being "federally guaranteed" within the meaning of section 149(b) of the Code; (f) to refrain from using allY portion of the proceeds of the Bonds, directly or indirectly. to acquire or to replace Cunds 24