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<br />e <br /> <br />e <br /> <br />W"'""": - <br /> <br />princ iples, would appear as a 1 iabil i ty on its balance sheet or (c) <br /> <br />enter into an agree~ent with any party other than the Authority to take <br /> <br />or pay for Water, which bonds, notes, evidences of indebtedness, lease <br /> <br />or agreement is payable from the revenues derived from the City System <br /> <br />on a pari ty wi th, or superior in right of payment to, the operating <br /> <br />expenses of the City System. The City represents, covenants, and agrees <br /> <br />that the payments due to the Authority under this Contract are operating <br /> <br />expenses of the City System. <br /> <br />Section 10.08 (A) The City covenants and agrees with the <br /> <br />Authority for the benefit of the Authority, the other Participants, the <br /> <br />holders of the Bonds, and any other person interested in the exclusion <br /> <br />from gross income for federal income tax purposes of the interest on <br /> <br />(and orig inal issue discount, if any, wi th respect to) the Bonds as <br /> <br />follows: <br /> <br />(a) No action will be taken by the City, and there will be <br />no omission of any action by the City, which act or omission will <br />adversely affect any exclusion from gross income for federal income <br />tax purposes of interest on the Bonds,and, in particular, shall <br />comply with those provisions of Section 103 a~d Sections 141 through <br />150 of the Internal Revenue Code of 1986, as amended (the "Code"), <br />that affect the exclusion from gross income for federal income tax <br />purposes of the interest on the Bonds. <br /> <br />(b) The City will not <br />arrangemen t) for the sale of <br />pursuant to this Contract that <br />from gross income for federal <br />on the Bonds. <br /> <br />enter in to any contrac t (or other <br />Water acquired from the Authori ty <br />will adversely affect the exclusion <br />income tax purposes of the interest <br /> <br />(c) The City shall not take, or omit to take, any action if <br />such action or omission would cause the Bonds to be federally <br />guaranteed, within the meaning of Section l49(b) of the Code. <br /> <br />(B) The City represents and warrants that it is not now a <br /> <br />party to any contract whereby a person agrees to take or pay for Water <br /> <br />delivered by the Ci ty System. <br /> <br />The Ci ty further covenants and agrees <br /> <br />-33- <br />