1994-03-14 Regular Meeting La Porte City Council

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e e (ii) Keep proper books of record and account in which full, true, and correct entries will be made of all dealings, activities, and transactions relating to the Funds created pursuant to this Ordinance, and all books, documents, and vouchers relating thereto shall at all reasonable times be made available for inspec- tion upon request from any Owner. (c) Covenants Re~ardin~ Tax Exemption of Interest on the Bonds. The Issuer covenants to take any action to maintain, or refrain from any action which would adversely affect, the treatment of the Bonds as obligations described in section 103 of the Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the Issuer specifically covenants as follows: (i) 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 use," as defined in section l4l(b)(6) of the Code or, if more than 10% of the proceeds are so used, that amounts, whether or not received by the Issuer with respect to such private business use, do not under the tenns of this Ordinance or any 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 l4l(b)(2) of the Code; (ii) To take any action to assure that in the event that the "private business use" described in subsection (i) hereof exceeds 5% of the proceeds 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 l4l(b)(3) of the Code, to the governmental use; (ill) To take any action to assure that no amount which is greater than the lesser of $5,000,000 or 5% of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is directly or indirectly used to fmance loans to persons, other than state or local governmental units, in contravention of section l41(c) of the Code; (iv) To refrain from taking any action which would otherwise result in the Bonds being treated as "private activity bonds" within the meaning of section l4l(b) of the Code; (v) To refrain from taking any action that would result in the Bonds being "federally guaranteed" within the meaning of section l49(b) of the Code; (vi) To refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defmed in section l48(b)(2) of the Code) which would produce a materially higher yield over the tenn of the Bonds, other than investment property acquired with -- (A) proceeds of the Bonds invested for a reasonable temporary period of three years or less, or in the case of a refunding a period of 30 days or less, until such proceeds are needed for the purpose for which the Bonds are issued, (B) amounts invested in a bona fide debt service fund, within the meaning of section 1.103- 13(b)(12) of the Treasury Regulations, and (C) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10% of the proceeds of the Bonds; (vii) To otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section l49(d) of the Code (relating to advance refundings);