O-2005-2858 - Laserfiche WebLink

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necessary to prevent the Obligations from constituting "arbitrage bonds," the City will make such payments as are necessary to cause the yield on all yield-restricted nonpurpose investments allocable to the Obligations to be less than the yield that is materially higher than the yield on the Obligations. (f) The City will not take any action or knowingly omit to take any action which, if taken or omitted, would cause the Obligations to be treated as "federally guaranteed" obligations for purposes of Section 149(b) of the Code; (g) The City represents that not more than fifty percent (50%) of the proceeds of the Obligations will be invested in nonpurpose investments (as defined in Section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four years or more within the meaning of Section 149(g)(3)(A)(ii) of the Code, and the City reasonably expects that at least eighty-five percent (85%) of the spendable proceeds of the Obligations will be used to carry out the governmental purpose of the Obligations within the three-year period beginning on the respective dates of issue of the Obligations. (h) The City will take all necessary steps to comply with the requirement that certain amounts earned by the City on the investment of the gross proceeds of the Obligations, if any, be rebated to the federal government. Specifically, the City will (i) maintain records regarding the receipt, investment, and expenditure of the gross proceeds of the Obligations as may be required to calculate such excess arbitrage profits separately from records of amounts on deposit in the funds and accounts of the City allocable to other obligations of the City or moneys which do not represent gross proceeds of any obligations of the City and retain such records for at least six years after the day on which the last outstanding Obligation is discharged, (ii) account for all gross proceeds under a reasonable, consistently applied method of accounting, not employed as an artifice or device to avoid in whole or in part, the requirements of Section 148 of the Code, including any specified method of accounting required by applicable Regulations to be used for all or a portion of any gross proceeds, (iii) calculate, at such times as are required by applicable Regulations, the amount of excess arbitrage profits, if any, earned from the investment of the gross proceeds of the Obligations and (iv) timely pay, as required by applicable Regulations, all amounts required to be rebated to the federal government. In addition, the City will exercise reasonable diligence to assure that no errors are made in the calculations required by the preceding sentence and, if such an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter, including payment to the federal government of any delinquent amounts owed to it, interest thereon and any penalty . (i) The City will not directly or indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Obligations that might result in a reduction in the amount required to be paid to the federal government because such 14 HOU:2516661.4