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%0 <br /> (3) The Trustee shall pay such costs of issuance of the <br /> Series 2001 Bonds as shall be specified in the letter of delivery <br /> instructions . <br /> Section 14 . (a) The City covenants that it shall not <br /> take any action or suffer or permit any action to be taken or <br /> condition to exist which causes or may cause the interest payable <br /> on the Bonds to be subject to federal income taxation. Without <br /> limiting the generality of the foregoing, the City represents and <br /> covenants that the proceeds of the Bonds and System Revenues will <br /> not be used directly or indirectly in such manner as to cause the <br /> Bonds to be treated as "arbitrage bonds" within the meaning of <br /> Section 148 of the Internal Revenue Code of 1986, as amended (the <br /> "Code" ) . The City covenants to pay to the United States Treasury <br /> any arbitrage rebate due under Section 148 of the Code at the times <br /> required by Section 148 of the Code, if any be required. <br /> The City expects that all the proceeds of the Series 2001 <br /> Bonds will be applied to discharge the 1995 Bonds and to pay <br /> expenses of issuing the Series 2001 Bonds . The City further <br /> expects that the only moneys available to pay debt service on the <br /> Series 2001 Bonds will be those moneys which are deposited into the <br /> Bond Fund. <br /> (b) The City shall assure that (1) not in excess of ten <br /> percent (10%) of the Net Proceeds of the Series 2001 Bonds is used <br /> for Private Business Use if, in addition, the payment of more than <br /> ten percent (10%) of the principal or ten percent (10%) of the <br /> interest due on the Series 2001 Bonds during the term thereof is, <br /> under the terms of the Series 2001 Bonds or any underlying <br /> arrangement, directly or indirectly secured by any interest in <br /> property used or to be used for a Private Business Use or in <br /> payments in respect of property used or to be used for a Private <br /> Business Use or is to be derived from payments, whether or not to <br /> the City, in respect of property or borrowed moneys used or to be <br /> used for a Private Business Use; and (ii) that, in the event that <br /> both (A) in excess of five percent (5%) of the Net Proceeds of the <br /> Series 2001 Bonds are used for a Private Business Use, and (B) an <br /> amount in excess of five percent (5%) of the principal or five <br /> percent (5%) of the interest due on the Series 2001 Bonds during <br /> the term thereof is, under the terms of the Series 2001 Bonds or <br /> any underlying arrangement , directly or indirectly, secured by any <br /> interest in property used or to be used for a Private Business Use <br /> or in payments in respect of property used or to be used for a <br /> Private Business Use or is to be derived from payments, whether or <br /> not to the City, in respect of property or borrowed money used or <br /> to be used for a Private Business Use, the excess over such five <br /> percent (5%) of Net Proceeds of the Series 2001 Bonds used for a <br /> Private Business Use shall be used for a Private Business Use <br /> related to the governmental use of the System. <br /> 16 <br />