Arbitrage and Rebate Clause Samples
The "Arbitrage and Rebate" clause defines how any financial gains resulting from price differences (arbitrage) or rebates received in the course of a transaction are to be handled between the parties. Typically, this clause specifies whether such benefits are to be retained by one party or shared, and may outline the process for disclosing and distributing these amounts. Its core function is to ensure transparency and fairness in the allocation of unexpected financial advantages, preventing disputes over unanticipated profits or cost savings.
Arbitrage and Rebate. (a) The Company acknowledges having read Section 5.09 of the Indenture and agrees to perform all duties imposed upon it by such Sections. Insofar as said Sections or any other sections of the Indenture expressly or implicitly impose duties and responsibilities on the Company, they are specifically incorporated herein by reference.
(b) Neither the Company nor the Issuer shall (i) take or omit to take any action, or approve, the making by the Company of any investment or use of any proceeds of the Bonds or any other moneys within their respective control (including without limitation the proceeds of any insurance or any condemnation award with respect to the Project), or the taking or omission of any other action, which would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code, or (ii) approve the use of any proceeds from the sale of the Bonds otherwise than in accordance with this Agreement or the Non-Arbitrage Certificate, barring any unforeseen circumstances, in which event, the Company and the Issuer shall use such proceeds with due diligence and shall otherwise comply with this Agreement. Without limiting the generality of the foregoing, the Company shall at its sole expense take all action required under Section 148 of the Code and Treasury Regulations thereunder to prevent loss of the exclusion of the interest on the Bonds from gross income of the owners thereof for Federal income tax purposes under such Section, including but not limited to paying on behalf of the Issuer the "rebatable arbitrage amount" to the United States of America in accordance with the requirements set forth in the related Treasury Regulations and complying with the requirements of Section 5.09 of the Indenture and this Section, including making the calculations and deposits required therein (with all such calculations to be supplied to the Issuer). The Company shall also comply with any similar requirements contained in any Treasury Regulations adopted in place of the existing Treasury Regulations and all other requirements of any such Treasury Regulations, to the extent applicable to the Bonds. The Company shall maintain or cause to be maintained records of any such rebate calculations for six (6) years after retirement of the Bonds.
(c) Nothing contained in this Agreement or in the Indenture shall be interpreted or construed to require the Issuer to pay the Rebate Amount, such obligations being the sole responsibility of the Company.
Arbitrage and Rebate. (Section 148)
Arbitrage and Rebate. The Borrower hereby covenants with, -------------------- and certifies to, and for the benefit of, the holders of the Bonds and the Issuer that so long as the Bonds remain Outstanding, moneys on deposit in any fund or account established, maintained or permitted to be established or maintained under the Indenture or under any of the Financing Documents in connection with the Bonds, whether or not such moneys were derived from the proceeds of the sale of the Bonds or from any other source, will not be used or invested in a manner which will cause the Bonds to be classified as "arbitrage bonds" within the meaning of Section 148(a) of the Code. The Borrower obligates itself to comply with the requirements of Section 148 of the Code and any regulations, whether temporary or final, promulgated thereunder or relating thereto, including but not limited to Temporary Treasury Regulation Sections 1.103-15AT and 1.148-l through 1.148-11 (such Section 148 and such regulations hereinafter referred to as the "Arbitrage Rules"). The Borrower agrees to cause to be prepared, by an independent certified public accountant or other expert in tax arbitrage matters reasonably acceptable to the Trustee, a statement or report as to the amount of "rebatable arbitrage" with respect to the Bonds, computed in accordance with the Arbitrage Rules (hereinafter, a "Rebate Statement") as of the end of the fifth and tenth years after the date of issuance of the Bonds (the "Issue Date") and to furnish the same to the Trustee not later than the fortieth (40th) day following each fifth anniversary of the Issue Date while any Bonds are Outstanding. If at the end of each such five year period, funds aggregating the Rebate Amount (hereinafter defined) do not exist in the Rebate Fund, then the Borrower shall pay to the Trustee for deposit into the Rebate Fund within forty (40) days after the end of such five year period the amount needed to be paid into the Rebate Fund to increase the funds therein to an amount equal to such Rebate Fund.
Arbitrage and Rebate. (a) The Company covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the Income Exclusion. The Company will take and will cause its members, managers, employees and agents to take all affirmative actions legally within its power necessary to ensure that the Bonds continue to be subject to the Income Exclusion (including, without limitation, the calculation of rebate required to preserve the Income Exclusion). The Company will comply with Sections 103 through 150 of the Code and further covenants not to directly or indirectly use or permit the use (including the making of any investment) of any Bond proceeds or any other funds of the Authority or the Company, or take or omit to take any action, that would cause the Bonds to be “arbitrage bonds” within the meaning of Section 148(a) of the Code.
(b) The Company hereby covenants that in connection with complying with the requirement for payment of the Rebatable Arbitrage to the United States with respect to the Bonds the Company will take the following actions:
(i) Six months after closing, the Company will provide a written certification to the Authority and the Trustee indicating whether the Company complied with the six month exception to the arbitrage rebate requirement set forth in Section 148(f)(4)(B) of the Code.
(ii) Unless the Company has complied with the six month exception, the Company will retain a Rebate Expert (defined below) on or within thirty (30) days before the Initial Rebate Computation Date (defined below) and on each Rebate Computation Date (defined below) thereafter, (A) to compute the Rebatable Arbitrage with respect to the Bonds for the period ending on Initial Rebate Computation Date, (B) to deliver an opinion to the Authority and Trustee, concerning its conclusions with respect to the amount (if any) of such Rebatable Arbitrage together with a written report providing a summary of the calculations relating thereto and (C) to deliver an opinion to the Authority and the Trustee that all of the gross proceeds of the Bonds (within the meaning of Section 148(f) of the Code), other than gross proceeds of the Bonds on deposit in a bona fide debt service fund (within the meaning of Section 148(f)(4) of the Code), have been expended on or prior to the Initial Rebate Computation Date. If a rebate exception applies to the proceeds of the Bonds, the Company will cause a Rebate Expert to deliver an opinion to ...
Arbitrage and Rebate. Fund Calculations 11