Common use of Tax Covenants and Representations Clause in Contracts

Tax Covenants and Representations. The City 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 exclusion from gross income for federal income taxation purposes of the interest portion of the obligation created by this Contract under Section 103 of the Code. The City will not directly or indirectly use or permit the use of any proceeds of any fund created under this Contract or any funds of the City, or take or omit to take any action that would cause the obligation created by this Contract to be an “arbitrage bond” within the meaning of Section 148(a) of the Code. The City will maintain books on which will be recorded (1) the Lender or (2) any assignee of the Installment Payments due under this Contract as the registered owner of such Installment Payments. To that end, the City has executed the Arbitrage and Tax Regulatory Certificate, dated August 19, 2015, and will comply with all requirements of Section 148 of the Code to the extent applicable. The City further covenants that this Contract is not a “private activity bond” as defined in Section 141 of the Code. Without limiting the generality of the foregoing, the City agrees that there shall be paid from time to time all amounts required to be rebated to the United States of America pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applicable to the obligation created by this Contract from time to time. This covenant shall survive the termination of this Contract. Notwithstanding any provision of this Article, if the City shall provide to the Lender an opinion of counsel to the effect that any action required under this Section or the Arbitrage and Tax Regulatory Certificate is no longer required, or to the effect that some further action is required, to maintain the exclusion from gross income of the interest on the obligation created by this Contract pursuant to Section 103 of the Code, the City and the Lender may rely conclusively on such opinion in complying with the provisions hereof. The City acknowledges that the Lender is providing the Purchase Price at the Interest Rate based on the premise that the interest component of the Installment Payments received under this Contract is exempt from federal and State taxation and based upon other State and federal laws in effect as of the date hereof. If, as a result of any action or failure to take any action by the City, the income received by the Lender shall be deemed to be taxable income to the Lender by any governmental agency, the Interest Rate and remaining interest component of the Installment Payments will be adjusted upward to provide for the payment of interest by the City at a taxable rate which will preserve the Lender’s after-tax economic yield with respect to the obligation created by this Contract. In such event, the City agrees, to the extent provided by law, to indemnify and hold harmless the Lender from any cost and expense incurred as a result of the loss of the tax-exempt status of the obligation created by this Contract, specifically including without limitation all administrative expenses arising in connection with the amendment of the Lender’s income tax returns. In addition, if any action or failure to take any action or failure to take any action by the City shall adversely affect the Lender’s after-tax economic yield with respect to the obligation created by this Contract, the Interest Rate and the Installment Payments shall be adjusted to produce an after-tax yield to the Lender equivalent to the Lender’s after-tax yield immediately prior to such action or inaction. [END OF ARTICLE IX]

Tax Covenants and Representations. The City 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 exclusion from gross income for federal income taxation purposes of the interest portion of the obligation Installment Payments with respect to the 2012B Bond created by this Second Contract Amendment under Section 103 of the Code. The City will not directly or indirectly use or permit the use of any proceeds of any fund the 2012B Bond Account of the Construction Fund created under this Contract the Indenture or any funds of the City, or take or omit to take any action that would cause the obligation with respect to the 2012B Bond created by this Second Contract Amendment to be an “arbitrage bond” within the meaning of Section 148(a) of the Code. The City will maintain books on which will be recorded (1) the Lender or (2) any assignee of the Installment Payments due under this Contract as the registered owner of such Installment Payments. To that end, the City has and the Corporation have executed the Arbitrage and Tax Regulatory Certificate, dated August 19, 2015, Agreement with respect to the 2012B Bond and will comply with all requirements of Section 148 of the Code to the extent applicable. The City further represents and covenants that the Installment Payments with respect to the 2012B Bond created by this Second Contract is Amendment are not and will not constitute a “private activity bond” as defined in Section 141 of the Code. Without limiting the generality of the foregoing, the City agrees that there shall be paid from time to time all amounts required to be rebated to the United States of America pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applicable to the obligation with respect to the 2012B Bond created by this Second Contract Amendment from time to time. This covenant shall survive the termination payment in full of all Installment Payments under this ContractSecond Contract Amendment. Notwithstanding any provision of this Article, if the City shall provide to the Lender Trustee an opinion of nationally recognized bond counsel to the effect that any action required under this Section or the Arbitrage and Tax Regulatory Certificate Agreement with respect to the 2012B Bond is no longer required, or to the effect that some further action is required, to maintain the exclusion from gross income of the interest on the obligation with respect to the 2012B Bond created by this Second Contract Amendment pursuant to Section 103 of the Code, the City City, the Corporation and the Lender Trustee may rely conclusively on such opinion in complying with the provisions hereof. The City acknowledges that the Lender is providing the Purchase Price at the Interest Rate based on the premise that the interest component of the Installment Payments received under this Contract is exempt from federal and State taxation and based upon other State and federal laws in effect as of the date hereof. If, as a result of any action or failure to take any action by the City, the income received by the Lender shall be deemed to be taxable income to the Lender by any governmental agency, the Interest Rate and remaining interest component of the Installment Payments will be adjusted upward to provide for the payment of interest by the City at a taxable rate which will preserve the Lender’s after-tax economic yield with respect to the obligation created by this Contract. In such event, the City agrees, to the extent provided by law, to indemnify and hold harmless the Lender from any cost and expense incurred as a result of the loss of the tax-exempt status of the obligation created by this Contract, specifically including without limitation all administrative expenses arising in connection with the amendment of the Lender’s income tax returns. In addition, if any action or failure to take any action or failure to take any action by the City shall adversely affect the Lender’s after-tax economic yield with respect to the obligation created by this Contract, the Interest Rate and the Installment Payments shall be adjusted to produce an after-tax yield to the Lender equivalent to the Lender’s after-tax yield immediately prior to such action or inaction. [END OF ARTICLE IX].

Tax Covenants and Representations. The City County 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 exclusion from gross income for federal income taxation purposes of the interest portion of the obligation Installment Payments created by this Contract under Section 103 of the Code. The City County will not directly or indirectly use or permit the use of any proceeds of any fund created under this Contract or any funds of the CityIndenture, or take or omit to take any action that would cause the obligation created by this Contract to be an “arbitrage bond” within the meaning of Section 148(a) of the Code. The City will maintain books on which will be recorded (1) the Lender or (2) any assignee of the Installment Payments due under this Contract as the registered owner of such Installment Payments. To that end, the City has County and the Corporation have executed the Arbitrage and Tax Regulatory Certificate, dated August 19, 2015, Agreement and will comply with all requirements of Section 148 of the Code to the extent applicable. The City County further represents and covenants that the Installment Payments created by this Contract is are not and will not constitute a “private activity bond” as defined in Section 141 of the Code. Without limiting the generality of the foregoing, the City County agrees that there shall be paid from time to time all amounts required to be rebated to the United States of America pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applicable to the obligation created by this Contract from time to time. This covenant shall survive the termination payment in full of all Installment Payments under this Contract. Notwithstanding any provision of this Article, (1) this Article shall not apply to the extent that the interest portion of the Installment Payments created under this Contract is not intended to be excludable from gross income for federal income tax purposes under Section 103 of the Code and (2) if the City County shall provide to the Lender Trustee an opinion of nationally recognized bond counsel to the effect that any action required under this Section or the Arbitrage and Tax Regulatory Certificate Agreement is no longer required, or to the effect that some further action is required, to maintain the exclusion from gross income of the interest on the obligation obligations created by this Contract pursuant to Section 103 of the Code, the City County, the Corporation and the Lender Trustee may rely conclusively on such opinion in complying with the provisions hereof. The City acknowledges that the Lender is providing the Purchase Price at the Interest Rate based on the premise that the interest component of the Installment Payments received under this Contract is exempt from federal and State taxation and based upon other State and federal laws in effect as of the date hereof. If, as a result of any action or failure to take any action by the City, the income received by the Lender shall be deemed to be taxable income to the Lender by any governmental agency, the Interest Rate and remaining interest component of the Installment Payments will be adjusted upward to provide for the payment of interest by the City at a taxable rate which will preserve the Lender’s after-tax economic yield with respect to the obligation created by this Contract. In such event, the City agrees, to the extent provided by law, to indemnify and hold harmless the Lender from any cost and expense incurred as a result of the loss of the tax-exempt status of the obligation created by this Contract, specifically including without limitation all administrative expenses arising in connection with the amendment of the Lender’s income tax returns. In addition, if any action or failure to take any action or failure to take any action by the City shall adversely affect the Lender’s after-tax economic yield with respect to the obligation created by this Contract, the Interest Rate and the Installment Payments shall be adjusted to produce an after-tax yield to the Lender equivalent to the Lender’s after-tax yield immediately prior to such action or inaction. [END OF ARTICLE IX]