O-2005-2858 - Laserfiche WebLink

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(1) A portion of the proceeds shall be applied to pay expenses arising in connection with the issuance of the Obligations; and (2) The remaining proceeds shall be deposited into the Construction Fund created in Section 5.3 of this Ordinance and used for the purposes described in Section 3.I(a) hereof. Section 7.4: Tax Exemption. The City intends that the interest on the Obligations shall be excludable from gross income of the owners thereof for federal income tax purposes pursuant to Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended, (the "Code") and all applicable temporary, proposed and final regulations (the "Regulations") and procedures promulgated thereunder and applicable to the Obligations. For this purpose, the City covenants that it will monitor and control the receipt, investment, expenditure and use of all gross proceeds of the Obligations (including all property the acquisition, construction or improvement of which is to be financed directly or indirectly with the proceeds of the Obligations) and take or omit to take such other and further actions as may be required by Sections 103 and 141 through 150 of the Code and the Regulations to cause interest on the Obligations to be and remain excludable from the gross income, as defined in Section 61 of the Code, of the owners of the Obligations for federal income tax purposes. Without limiting the generality of the foregoing, the City shall comply with each of the following covenants: ( a) The City will use all of the proceeds of the Obligations (1) to provide funds for the purposes set forth in Section 3.1 of this Ordinance, which property will be owned and operated by the City, and (ii) to pay the costs of issuing the Obligations. The City will not use any portion of the proceeds of the Obligations to pay the principal of or interest or redemption premium on any other obligation of the City or a related person. (b) The City will not directly or indirectly take any action or omit to take any action, which action or omission would cause the Obligations to constitute "private activity bonds" within the meaning of Section 141 (a) of the Code. (c) Principal of and interest on the Obligations will be paid solely from ad valorem taxes collected by the City, investment earnings on such collections, and as available, proceeds of the Obligations. (d) Based upon all facts and estimates now known or reasonably expected to be in existence on the date the Obligations are delivered, the City reasonably expects that the proceeds of the Obligations will not be used in a manner that would cause the Obligations or any portion thereof to be an "arbitrage bond" within the meaning of Section 148 of the Code; (e) At all times while the Obligations are outstanding, the City will identify and properly account for all amounts constituting gross proceeds of the Obligations in accordance with the Regulations. The City will monitor the yield on the investments of the proceeds of the Obligations and, to the extent required by the Code and the Regulations, will restrict the yield on such investments to a yield which is not materially higher than the yield on the Obligations. To the extent 13 HOU:2516661.4