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• • <br />A. In General. <br />(a) No action will be taken, and there will be <br />no omission of an action, which act or omission will adversely <br />affect any exclusion from gross income for federal income <br />tax purposes of interest on the Bonds, and, in particular, <br />there will be compliance with those provisions of Section <br />103 and Section 141 through 150 of the Code that affect the <br />exclusion from gross income for federal income tax purposes <br />of the interest on the Bonds. <br />(b) The Authority will use the proceeds of the <br />Bonds in the manner described in this Resolution except to <br />the extent that any variation from such provisions that is <br />permitted by applicable law will not adversely affect the <br />exclusion from gross income for federal income tax purposes <br />of interest on the Bonds, and will not enter into any <br />contract (or other arrangement) for the sale of water from <br />its undivided interest in the Southeast Plant that will <br />adversely affect the exclusion from gross income for federal <br />income tax purposes of the interest on the Bonds. <br />(c) The Authority will not use or invest the <br />proceeds of the Bonds or any other amounts or any investment <br />earnings thereon in a manner that will result in the Bonds <br />becoming "arbitrage bonds", within the meaning of Section <br />148 of the Code. The Authority will not invest an amount of <br />the proceeds of the Bonds in the Reserve Fund or in any <br />reasonably required reserve or replacement fund if the <br />amount of proceeds so invested is, in the aggregate, in <br />excess of 10 percent of the proceeds of the Bonds, within <br />the meaning of Section 148(d)(2) of the Code. <br />(d) The Authority shall comply with the pro- <br />visions of Section 148 of the Code with respect to arbitrage <br />rebate as they apply to the Bonds. <br />(e) The Authority shall not invest any of the <br />proceeds of the Bonds in a manner that would be a prohibited <br />payment, within the meaning of Treas. Reg. ~ 1.103-15AT(d)(6), <br />so long as such regulation is applicable to the Bonds. <br />(f) The Authority shall not take, or omit to <br />take, any action if such action or omission would cause the <br />Bonds to be federally guaranteed, within the meaning of <br />Section 149(b) of the Code. <br />(g) The Authority will comply with the requirements <br />of Section 149(e)(2) of the Code, requiring information <br />022DESA0/024C04 -30- <br />