Six Month Exception to Rebate. Notwithstanding anything in this Exhibit to the contrary, if all of the Gross Proceeds of the Lease (other than amounts on deposit in a bona fide debt service fund) have been expended for the purpose of the issue by no later than the day which is six months after the date of issue of the Lease, then the Rebate Amount shall be zero until such time as amounts are received, which amounts are held in a sinking fund or any other fund pledged to or expected to be used to pay debt service or such time as any other amounts are pledged as security for the Lease, and not expended on the payment of principal or interest on the Lease within 13 months of the date of their receipt. The six-month exception provided by the previous sentence shall apply in the event that Gross Proceeds of the Lease (other than amounts on deposit in a bona fide debt service fund) in an amount equal to the lesser of five percent of the proceeds of the Lease or $100,000 have not been expended by the date which is six months after the date the Lease are issued if all of such Gross Proceeds are expended within one year of the date the Lease are issued. The six-month exception provided by this paragraph is inapplicable if any reserve fund, sinking fund or pledged fund other than a debt service fund is maintained for the Lease, whether or not funded from proceeds of the Lease, except that if a reasonably required reserve or replacement fund (as described in Section 148(d) of the Code) has been established for the Lease and all of the Gross Proceeds of the Lease other than amounts in that reasonably required reserve and replacement fund and amounts deposited in a bona fide debt service fund for the Lease qualify for the six-month exception described in this Section B.10, then the Rebate Amount need only be calculated with respect to all amounts not required to be spent within six months, after such six-month period.
Six Month Exception to Rebate. An issue is treated as meeting the rebate requirement of Section 148 of the Code if the Gross Proceeds of the bond issue are allocated to expenditures for the governmental purposes of the issue within the six (6) month period beginning on the Date of Issue, and the rebate requirement is met with respect to amounts not required to be spent within six (6) months (excluding earnings on the Bona Fide Debt Service Fund). An additional six (6) months during which Gross Proceeds of the issue may remain unexpended is permitted, if the amount which remains unexpended does not exceed the lesser of $100,000 or five percent (5%) of the proceeds of the issue. For purposes of this exception, the term Gross Proceeds does not include amounts in the Bona Fide Debt Service Fund; amounts in a Reasonably Required Reserve or Replacement Fund; amounts that, as of the Date of Issue of the Agreement, are not reasonably expected to be Gross Proceeds but that become Gross Proceeds after the end of the six (6) month spending period; amounts representing Sale Proceeds or Investment Proceeds derived from payments under any purpose investment of the Agreement; and amounts representing repayments of grants financed by the Agreement. Moreover, expenditures for the governmental purpose of the Agreement include payments for interest on, but not principal of, the Agreement.
