Common use of Tax-Exempt Status of the Bonds Clause in Contracts

Tax-Exempt Status of the Bonds. The Owner hereby represents, warrants and agrees for the benefit of the City and the owners of the Bonds from time to time that: (a) It will not take any action or omit to take any action with respect to the Bonds, the proceeds thereof or the Project if such action or omission (i) would cause the interest on the Bonds to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Code, except for interest on any Bond for any period during which it is held by a "substantial user" of the Project or a "related person" as such terms are used in Section 103(b)(13) of the 1954 Code. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the Bonds until the date on which all obligations of the Owner in fulfilling the above covenant under the Code and the 1954 Code have been met. (b) Throughout the Qualified Project Period at least 20% of completed dwelling units in the Project (15% of the dwelling units in the Project if it is or becomes a "targeted area" project as defined in Treasury Regulation Section 1.103-8(b)(8)(iii)) will be continuously occupied by Lower-Income Tenants. For the purpose of complying with this requirement, a unit occupied by an individual or family who at the commencement of the occupancy qualifies as a Lower-Income Tenant is treated as occupied by such an individual or family during their tenancy in such unit, even though they subsequently cease to be of low or moderate income. Moreover, if a unit is vacated by an individual or family who qualified as Lower-Income Tenants, such unit shall be treated as occupied by Lower-Income Tenants until reoccupied (other than for a temporary period of not more than 31 days) at which time the character of the unit shall be redetermined. The dwelling units required to be rented to, or held available for, occupancy by Lower-Income Tenants shall be distributed among the different types of dwelling units, by number of bedrooms, in approximately the same proportions as each type of dwelling unit is to the total number of dwelling units. (c) It will take such action or actions as may be necessary, in the opinion of Bond Counsel, including, without limitation, consenting to the amendment of this Agreement, the Indenture or the Regulatory Agreement to comply fully with all applicable rules, rulings, policies, procedures, regulations or other official statements promulgated, proposed or made by the Department of the Treasury or the Internal Revenue Service pertaining to obligations issued under Section 103(b)(4)(A) of the 1954 Code which are necessary in the opinion of Bond Counsel to maintain the exclusion from gross income for federal income tax purposes of interest on the Bonds. (d) It will execute and file of record appropriate amendments to the Regulatory Agreement and assure the recording of such document and take any other steps as are necessary, in the opinion of Bond Counsel, in order to insure that the requirements and restrictions of this Article II will be binding upon all owners of the Project. The Owner hereby covenants to include such requirements and restrictions in any documents transferring any interest in the Project to another to the end that such transferee has notice of, and is bound by such restrictions to the extent and for the period provided therein and to obtain the agreement from any transferee to so abide. (e) That the Owner shall not discriminate on the basis of race, color, religion, sex, age, national origin, handicap, marital or familial status in the lease, use, or occupancy of the Project or in connection with the employment or application for employment of persons for the operation and management of the Project. (f) That none of the dwelling units in the Project shall at any time be utilized on a transient basis, shall ever be leased or rented for a period of less than thirty days, and shall ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, hospital, sanitarium, nursing home, rest home, trailer court or park. (g) That the Project is located on a single tract of land or on two or more contiguous tracts of land, and that all of the buildings, structures and facilities which are part of the Project comprise a single geographically and functionally integrated project for residential rental property, as evidenced by the ownership, management, accounting and operation of the Project. (h) That the Owner intends to hold the Project for its own account, has no current plan to sell and has not entered into any agreement to sell any of the Project, and, until payment in full of all the Bonds, will not sell or contract to sell the Project without having first delivered to the Trustee an opinion of Bond Counsel to the effect that such sale will not affect the exclusion from gross income for federal or Colorado income tax purposes; provided that no such opinion shall be required in connection with a foreclosure sale or a transfer by deed in lieu of foreclosure or comparable conversion of the Project. (i) The average maturity of the Bonds does not exceed 120% of the average reasonably expected life of the facilities of the Project financed with the original net proceeds of the Prior Bonds. (j) The Bonds are not and shall not be "federally guaranteed" as defined in Section 149(b) of the Code.

Tax-Exempt Status of the Bonds. The Owner hereby representsIt is the intention of the Company and the Issuer that the interest on the Bonds be excludable from the gross income of the holders thereof for federal income tax purposes, warrants except for any Bond for any period that such Bond is owned by a person who is a “substantial user” of the proceeds or the Project or a “related person” within the meaning of Section 147(a) of the Code. To that end, the Company and agrees the Issuer (to the extent reasonably within the control of the Issuer) covenant with each other, and with the Trustee for the benefit of the City Bondholders, to refrain from any action which would adversely affect, and to take such action to assure, the owners treatment of the Bonds from time as obligations described in Section 103(a) of the Code, the interest on which is not includable in the “gross income” of the holder (other than the income of a “substantial user” of the Project or a “related person” within the meaning of Section 147(a) of the Code) for purposes of federal income taxation. The Issuer agrees to time thatsubmit, and the Company agrees to cause the Issuer to submit, such closing documents for the Bonds, in accordance with the rules of the Texas Bond Review Board, as may be necessary, and to take such action as reasonably required, to cause the Texas Bond Review Board to provide the certificate of allocation of state volume cap. Furthermore, the Company hereby covenants as follows: (a) It will not take any action or omit to take any action with respect to the Bonds, the proceeds thereof or the Project if such action or omission (i) would cause as is necessary to ensure that at least 95% of the interest on net proceeds of the Bonds will be used to lose its exclusion from gross income for federal income tax purposes under provide solid waste disposal facilities within the meaning of Section 103 142(a)(6) of the Code, except for interest on any Bond for any period during which it is held by a "substantial user" of the Project or a "related person" as such terms are used in Section 103(b)(13) of the 1954 Code. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the Bonds until the date on which all obligations of the Owner in fulfilling the above covenant under the Code and the 1954 Code have been met.; (b) Throughout the Qualified Project Period at least 20% of completed dwelling units to refrain from taking any action that would result in the Project (15% of the dwelling units in the Project if it is or becomes a "targeted area" project as defined in Treasury Regulation Section 1.103-8(b)(8)(iii)) will be continuously occupied by Lower-Income Tenants. For the purpose of complying with this requirement, a unit occupied by an individual or family who at the commencement of the occupancy qualifies as a Lower-Income Tenant is treated as occupied by such an individual or family during their tenancy in such unit, even though they subsequently cease to be of low or moderate income. Moreover, if a unit is vacated by an individual or family who qualified as Lower-Income Tenants, such unit shall be treated as occupied by Lower-Income Tenants until reoccupied (other than for a temporary period of not more than 31 days) at which time the character of the unit shall be redetermined. The dwelling units required to be rented to, or held available for, occupancy by Lower-Income Tenants shall be distributed among the different types of dwelling units, by number of bedrooms, in approximately the same proportions as each type of dwelling unit is to the total number of dwelling units. (c) It will take such action or actions as may be necessary, in the opinion of Bond Counsel, including, without limitation, consenting to the amendment of this Agreement, the Indenture or the Regulatory Agreement to comply fully with all applicable rules, rulings, policies, procedures, regulations or other official statements promulgated, proposed or made by the Department of the Treasury or the Internal Revenue Service pertaining to obligations issued under Section 103(b)(4)(A) of the 1954 Code which are necessary in the opinion of Bond Counsel to maintain the exclusion from gross income for federal income tax purposes of interest on the Bonds. (d) It will execute and file of record appropriate amendments to the Regulatory Agreement and assure the recording of such document and take any other steps as are necessary, in the opinion of Bond Counsel, in order to insure that the requirements and restrictions of this Article II will be binding upon all owners of the Project. The Owner hereby covenants to include such requirements and restrictions in any documents transferring any interest in the Project to another to the end that such transferee has notice of, and is bound by such restrictions to the extent and for the period provided therein and to obtain the agreement from any transferee to so abide. (e) That the Owner shall not discriminate on the basis of race, color, religion, sex, age, national origin, handicap, marital or familial status in the lease, use, or occupancy of the Project or in connection with the employment or application for employment of persons for the operation and management of the Project. (f) That none of the dwelling units in the Project shall at any time be utilized on a transient basis, shall ever be leased or rented for a period of less than thirty days, and shall ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, hospital, sanitarium, nursing home, rest home, trailer court or park. (g) That the Project is located on a single tract of land or on two or more contiguous tracts of land, and that all of the buildings, structures and facilities which are part of the Project comprise a single geographically and functionally integrated project for residential rental property, as evidenced by the ownership, management, accounting and operation of the Project. (h) That the Owner intends to hold the Project for its own account, has no current plan to sell and has not entered into any agreement to sell any of the Project, and, until payment in full of all the Bonds, will not sell or contract to sell the Project without having first delivered to the Trustee an opinion of Bond Counsel to the effect that such sale will not affect the exclusion from gross income for federal or Colorado income tax purposes; provided that no such opinion shall be required in connection with a foreclosure sale or a transfer by deed in lieu of foreclosure or comparable conversion of the Project. (i) The average maturity of the Bonds does not exceed 120% of the average reasonably expected life of the facilities of the Project financed with the original net proceeds of the Prior Bonds. (j) The Bonds are not and shall not be "being “federally guaranteed" as defined in ” within the meaning of Section 149(b) of the Code.; (c) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in Section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Bonds than the yield on the Bonds, other than investment property acquired with (i) proceeds of the Bonds invested for a period of three years or less until such proceeds are used for the purposes for which the Bonds were issued, (ii) amounts invested in a bona fide debt service fund, within the meaning of Section 1.148-1(b) of the Regulations, and (iii) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the proceeds of the Bonds and to the extent that at no time during any bond year will the aggregate amount so invested exceed 150 percent of debt service on the Bonds for such year; (d) to otherwise restrict the use or investment of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, to satisfy the requirements of Section 148 of the Code (relating to arbitrage) and Section 149(d) of the Code (relating to advance refundings); (e) to use no more than 2 percent of the proceeds received from the sale of the Bonds for the payment of Costs of Issuance (including underwriters’ discount, if any); (f) to use no portion of the proceeds of the Bonds to provide any airplane, sky-box or other private luxury box, health club facility, facility primarily used for gambling, or store the principal business of which is the sale of alcoholic beverages for consumption off premises; (g) to comply with the limitations imposed by Section 147(c) of the Code (relating to the limitation on the use of proceeds to acquire land) and Section 147(d) of the Code (relating to restrictions on the use of bond proceeds to acquire existing buildings, structures or other property); (h) to pay to the United States of America (to the extent not paid by the Trustee pursuant to the Indenture) at least once during each five-year period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the “Excess Earnings,” within the meaning of Section 148(f) of the Code and to pay to the United States of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under Section 148(f) of the Code, unless the Bonds qualify for the exception to rebate set forth in Section 148(f)(4)(B) of the Code or the Regulations thereunder; and

Tax-Exempt Status of the Bonds. The Owner hereby representsIt is the intention of the Company and the Issuer that the interest on the Bonds be excludable from the gross income of the holders thereof for federal income tax purposes, warrants except for any Bond for any period that such Bond is owned by a person who is a “substantial user” of the proceeds of the Project or a “related person” within the meaning of Section 147(a) of the Code. To that end, the Company and agrees the Issuer (to the extent reasonably within the control of the Issuer) covenant with each other, and with the Trustee for the benefit of the City Bondholders, to refrain from any action which would adversely affect, and to take such action to assure, the treatment of the Bonds as obligations described in Section 103(a) of the Code, the interest on which is not includable in the “gross income” of the holder (other than the income of a “substantial user” of the Project or a “related person” within the meaning of Section 147(a) of the Code) for purposes of federal income taxation. As more particularly set out in the Tax Regulatory Agreement and notwithstanding any other provision hereof, the Company hereby covenants as follows: (a) to take such action as is necessary to ensure that at least 95% of the net proceeds of the Bonds will be used to provide “solid waste disposal facilities” within the meaning of Section 142(a)(6) of the Code; (b) to refrain from taking any action that would result in the Bonds being “federally guaranteed” within the meaning of Section 149(b) of the Code; (c) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in Section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Bonds than the yield on the Bonds, other than investment property acquired with: (i) proceeds of the Bonds invested for a period of three years or less until such proceeds are used for the purposes for which the Bonds were issued; (ii) amounts invested in a bona fide debt service fund, within the meaning of Section 1.148-1(b) of the Regulations; and (iii) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10% of the proceeds of the Bonds and to the extent that at no time during any bond year will the aggregate amount so invested exceed 150% of debt service on the Bonds for such year; (d) to otherwise restrict the use or investment of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, to satisfy the requirements of Section 148 of the Code (relating to arbitrage) and Section 149(d) of the Code (relating to advance refundings); (e) to use no more than 2% of the proceeds received from the sale of the Bonds for the payment of Costs of Issuance (including underwriters’ discount, if any); (f) to use no portion of the proceeds of the Bonds to provide any airplane, skybox or other private luxury box, health club facility, facility primarily used for gambling or store the principal business of which is the sale of alcoholic beverages for consumption off premises; (g) to comply with the limitations imposed by Section 147(c) of the Code (relating to the limitation on the use of proceeds to acquire land) and Section 147(d) of the Code (relating to restrictions on the use of bond proceeds to acquire existing buildings, structures or other property); (h) to pay to the United States of America (to the extent not paid by the Trustee pursuant to the Indenture) at least once during each five-year period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90% of the “Excess Earnings,” within the meaning of Section 148(f) of the Code and to pay to the United States of America, not later than 60 days after the Bonds have been paid in full, 100% of the amount then required to be paid as a result of Excess Earnings under Section 148(f) of the Code, unless the Bonds qualify for the exception to rebate set forth in Section 148(f)(4)(B) of the Code or the Regulations thereunder; and (i) to provide to the Trustee, at such time as required by the Trustee, all information required by the Trustee with respect to Nonpurpose Investments (as defined in Section 148 of the Code) not held in any fund under the Indenture. For purposes of the foregoing (a) and (b), the term “proceeds” includes “disposition proceeds” as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the Bonds. It is the understanding of the Issuer and the Company that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the United States Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Bonds, the Issuer and the Company will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of Bond Counsel delivered to the Issuer, the Company and the Trustee, will not adversely affect the exclusion of interest on the Bonds from the gross income of the owners of the Bonds from time to time that: (a) It will not take any action or omit to take any action with respect to the Bonds, the proceeds thereof or the Project if such action or omission (i) would cause the interest on the Bonds to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Code, except for interest on any Bond for any period during . In the event that regulations or rulings are hereafter promulgated which it is held by a "substantial user" of the Project or a "related person" as such terms impose additional requirements which are used in Section 103(b)(13) of the 1954 Code. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the Bonds until the date on which all obligations of the Owner in fulfilling the above covenant under the Code and the 1954 Code have been met. (b) Throughout the Qualified Project Period at least 20% of completed dwelling units in the Project (15% of the dwelling units in the Project if it is or becomes a "targeted area" project as defined in Treasury Regulation Section 1.103-8(b)(8)(iii)) will be continuously occupied by Lower-Income Tenants. For the purpose of complying with this requirement, a unit occupied by an individual or family who at the commencement of the occupancy qualifies as a Lower-Income Tenant is treated as occupied by such an individual or family during their tenancy in such unit, even though they subsequently cease to be of low or moderate income. Moreover, if a unit is vacated by an individual or family who qualified as Lower-Income Tenants, such unit shall be treated as occupied by Lower-Income Tenants until reoccupied (other than for a temporary period of not more than 31 days) at which time the character of the unit shall be redetermined. The dwelling units required to be rented to, or held available for, occupancy by Lower-Income Tenants shall be distributed among the different types of dwelling units, by number of bedrooms, in approximately the same proportions as each type of dwelling unit is applicable to the total number of dwelling units. (c) It will take such action or actions as may be Bonds, the Company agrees to comply with the additional requirements to the extent necessary, in the opinion of Bond Counsel, including, without limitation, consenting Counsel delivered to the amendment of this AgreementIssuer, the Indenture or Company and the Regulatory Agreement Trustee, to comply fully with all applicable rules, rulings, policies, procedures, regulations or other official statements promulgated, proposed or made by preserve the Department exclusion of interest on the Bonds from the gross income of the Treasury or the Internal Revenue Service pertaining to obligations issued under Section 103(b)(4)(A) owners of the 1954 Code which are necessary in the opinion of Bond Counsel to maintain the exclusion from gross income Bonds for federal income tax purposes under Section 103 of interest the Code. In furtherance of such intention, the Issuer hereby authorizes and directs the Mayor or Finance Director to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the Issuer, which may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. (d) It will execute and file of record appropriate amendments to the Regulatory Agreement and assure the recording of such document and take any other steps as are necessary, in the opinion of Bond Counsel, in order to insure that the requirements and restrictions of this Article II will be binding upon all owners of the Project. The Owner hereby covenants to include such requirements and restrictions in any documents transferring any interest in the Project to another to the end that such transferee has notice of, and is bound by such restrictions to the extent and for the period provided therein and to obtain the agreement from any transferee to so abide. (e) That the Owner shall not discriminate on the basis of race, color, religion, sex, age, national origin, handicap, marital or familial status in the lease, use, or occupancy of the Project or in connection with the employment or application for employment of persons for the operation and management of the Project. (f) That none of the dwelling units in the Project shall at any time be utilized on a transient basis, shall ever be leased or rented for a period of less than thirty days, and shall ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, hospital, sanitarium, nursing home, rest home, trailer court or park. (g) That the Project is located on a single tract of land or on two or more contiguous tracts of land, and that all of the buildings, structures and facilities which are part of the Project comprise a single geographically and functionally integrated project for residential rental property, as evidenced by the ownership, management, accounting and operation of the Project. (h) That the Owner intends to hold the Project for its own account, has no current plan to sell and has not entered into any agreement to sell any of the Project, and, until payment in full of all the Bonds, will not sell or contract to sell the Project without having first delivered to the Trustee an opinion of Bond Counsel to the effect that such sale will not affect the exclusion from gross income for federal or Colorado income tax purposes; provided that no such opinion shall be required in connection with a foreclosure sale or a transfer by deed in lieu of foreclosure or comparable conversion of the Project. (i) The average maturity of the Bonds does not exceed 120% of the average reasonably expected life of the facilities of the Project financed with the original net proceeds of the Prior Bonds. (j) The Bonds are not and shall not be "federally guaranteed" as defined in Section 149(b) of the Code.

Tax-Exempt Status of the Bonds. The Owner hereby representsIt is the intention of the Company and the Issuer that the interest on the Bonds be excludable from the gross income of the holders thereof for federal income tax purposes, warrants except for any Bond for any period that such Bond is owned by a person who is a "substantial user" of the Projects or a "related person" within the meaning of Section 147(a) of the Code. To that end, the Company and agrees the Issuer (to the extent reasonably within the control of the Issuer) covenant with each other, and with the Trustee for the benefit of the City Bondholders, to refrain from any action which would adversely affect, and to take such action to assure, the treatment of the Bonds as obligations described in Section 103 (a) of the Code, the interest on which is not includable in the "gross income" of the holder (other than the income of a "substantial user" of the Projects or a "related person" within the meaning of Section 147(a) of the Code) for purposes of federal income taxation. Furthermore, the Company hereby covenants as follows: (a) to use all of the proceeds of the Bonds for the payment of principal on the Prior Bonds; (b) to refrain from taking any action that would result in the Bonds being "federally guaranteed" within the meaning of Section 149(b) of the Code; (c) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in Section 148(b)(2) of the Code) which produces a materially higher Yield over the term of the Bonds than the Yield on the Bonds, other than investment property acquired with -- (1) proceeds of the Bonds invested for a period of 90 days or less until such proceeds are needed for the purpose for which the Bonds are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of Section 1.103-13(b)(12) of the Regulations, and (3) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the proceeds of the Bonds and to the extent that at no time during any bond year will the aggregate amount so invested exceed 150 percent of debt service on the Bonds for such year; (d) to otherwise restrict the use or investment of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, to satisfy the requirements of Section 148 of the Code (relating to arbitrage); (e) to pay to the United State of America (to the extent not paid by the Trustee pursuant to the Indenture) at least once during each five-year period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the Excess Earnings, and to pay to the United States of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under Section 148(f) of the Code, unless the Bonds qualify for the exception to rebate set forth in Section 148(f)(4)(B) of the Code; (f) to remit immediately to the Trustee for deposit in the Rebate Fund any deficiency as required by Section 4.10 of the Indenture; and (g) to provide to the Trustee, at such time as required by the Trustee, all information required by the Trustee with respect to Nonpurpose Investments not held in any fund under the Indenture. The terms Nonpurpose Investments, Excess Earnings, and Yield shall have the meanings give to such terms in section 148 of the Code and the Regulations promulgated pursuant to such section. It is the understanding of the Issuer and the Company that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the United States Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Bonds, the Issuer and the Company will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of Bond Counsel delivered to the Issuer, the Company, and the Trustee, will not adversely affect the exclusion of interest on the Bonds from the gross income of the owners of the Bonds from time to time that: (a) It will not take any action or omit to take any action with respect to the Bonds, the proceeds thereof or the Project if such action or omission (i) would cause the interest on the Bonds to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Bonds, except for interest on any Bond for any period during which it is held by a "substantial user" of the Project or a "related person" as such terms are used in Section 103(b)(13) of the 1954 Code. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the Bonds until the date on which all obligations of the Owner in fulfilling the above covenant under the Code Company and the 1954 Code have been met. (b) Throughout Issuer agree to comply with the Qualified Project Period at least 20% of completed dwelling units in the Project (15% of the dwelling units in the Project if it is or becomes a "targeted area" project as defined in Treasury Regulation Section 1.103-8(b)(8)(iii)) will be continuously occupied by Lower-Income Tenants. For the purpose of complying with this requirement, a unit occupied by an individual or family who at the commencement of the occupancy qualifies as a Lower-Income Tenant is treated as occupied by such an individual or family during their tenancy in such unit, even though they subsequently cease to be of low or moderate income. Moreover, if a unit is vacated by an individual or family who qualified as Lower-Income Tenants, such unit shall be treated as occupied by Lower-Income Tenants until reoccupied (other than for a temporary period of not more than 31 days) at which time the character of the unit shall be redetermined. The dwelling units required to be rented to, or held available for, occupancy by Lower-Income Tenants shall be distributed among the different types of dwelling units, by number of bedrooms, in approximately the same proportions as each type of dwelling unit is additional requirements to the total number of dwelling units. (c) It will take such action or actions as may be extent necessary, in the opinion of Bond Counsel, including, without limitation, consenting Counsel delivered to the amendment of this AgreementIssuer, the Indenture or Company, and the Regulatory Agreement Trustee, to comply fully with all applicable rules, rulings, policies, procedures, regulations or other official statements promulgated, proposed or made by preserve the Department exclusion of interest on the Bonds from the gross income of the Treasury or the Internal Revenue Service pertaining to obligations issued under Section 103(b)(4)(A) owners of the 1954 Code which are necessary in the opinion of Bond Counsel to maintain the exclusion from gross income Bonds for federal income tax purposes under Section 103 of interest the Code. In furtherance of such intention, the Issuer hereby authorizes and directs its General Manager or its Director of Finance to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the Issuer, which may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. (d) It will execute and file of record appropriate amendments to the Regulatory Agreement and assure the recording of such document and take any other steps as are necessary, in the opinion of Bond Counsel, in order to insure that the requirements and restrictions of this Article II will be binding upon all owners of the Project. The Owner hereby covenants to include such requirements and restrictions in any documents transferring any interest in the Project to another to the end that such transferee has notice of, and is bound by such restrictions to the extent and for the period provided therein and to obtain the agreement from any transferee to so abide. (e) That the Owner shall not discriminate on the basis of race, color, religion, sex, age, national origin, handicap, marital or familial status in the lease, use, or occupancy of the Project or in connection with the employment or application for employment of persons for the operation and management of the Project. (f) That none of the dwelling units in the Project shall at any time be utilized on a transient basis, shall ever be leased or rented for a period of less than thirty days, and shall ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, hospital, sanitarium, nursing home, rest home, trailer court or park. (g) That the Project is located on a single tract of land or on two or more contiguous tracts of land, and that all of the buildings, structures and facilities which are part of the Project comprise a single geographically and functionally integrated project for residential rental property, as evidenced by the ownership, management, accounting and operation of the Project. (h) That the Owner intends to hold the Project for its own account, has no current plan to sell and has not entered into any agreement to sell any of the Project, and, until payment in full of all the Bonds, will not sell or contract to sell the Project without having first delivered to the Trustee an opinion of Bond Counsel to the effect that such sale will not affect the exclusion from gross income for federal or Colorado income tax purposes; provided that no such opinion shall be required in connection with a foreclosure sale or a transfer by deed in lieu of foreclosure or comparable conversion of the Project. (i) The average maturity of the Bonds does not exceed 120% of the average reasonably expected life of the facilities of the Project financed with the original net proceeds of the Prior Bonds. (j) The Bonds are not and shall not be "federally guaranteed" as defined in Section 149(b) of the Code.

Tax-Exempt Status of the Bonds. The Owner hereby representsIt is the intention of the Company and the Issuer that the interest on the Bonds be excludable from the gross income of the holders thereof for federal income tax purposes, warrants except for any Bond for any period that such Bond is owned by a person who is a "substantial user" of the Projects or a "related person" within the meaning of Section 103(b)(13) of the Internal Revenue Code of 1954 (the "1954 Code"). To that end, the Company and agrees the Issuer (to the extent reasonably within the control of the Issuer) covenant with each other, and with the Trustee for the benefit of the City Bondholders, to refrain from any action which would adversely affect, and to take such action to assure, the treatment of the Bonds as obligations described in Section 103 (a) of the Code, the interest on which is not includable in the "gross income" of the holder (other than the income of a "substantial user" of the Projects or a "related person" within the meaning of Section 103(b)(13) of the 1954 Code) for purposes of federal income taxation. Furthermore, the Company hereby covenants as follows: (a) to use all of the proceeds of the Bonds for the payment of principal on the Prior Bonds; (b) to refrain from using the facilities constituting the Project in a manner that would result in the Bonds not being "exempt facility bonds" within the meaning of Section 103(b)(4) of the 1954 Code. (c) to refrain from taking any action that would result in the Bonds being "federally guaranteed" within the meaning of Section 149(b) of the Code; (d) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in Section 148(b)(2) of the Code) which produces a materially higher Yield over the term of the Bonds than the Yield on the Bonds, other than investment property acquired with -- (1) proceeds of the Bonds invested for a period of 90 days or less until such proceeds are needed for the purpose for which the Bonds are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of Section 1.148-1 of the Regulations, and (3) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the proceeds of the Bonds and to the extent that at no time during any bond year will the aggregate amount so invested exceed 150 percent of debt service on the Bonds for such year; (e) to otherwise restrict the use or investment of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, to satisfy the requirements of Section 148 of the Code (relating to arbitrage); (f) to provide to the Trustee, at such time as required by the Trustee, all information required by the Trustee with respect to Nonpurpose Investments not held in any fund under the Indenture; and (g) to use no more than 2 percent of the gross proceeds of the Bonds for the payment of costs of issuance. The terms Nonpurpose Investments, Excess Earnings, and Yield shall have the meanings give to such terms in section 148 of the Code and the Regulations promulgated pursuant to such section. It is the understanding of the Issuer and the Company that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the United States Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Bonds, the Issuer and the Company will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of Bond Counsel delivered to the Issuer, the Company, and the Trustee, will not adversely affect the exclusion of interest on the Bonds from the gross income of the owners of the Bonds from time to time that: (a) It will not take any action or omit to take any action with respect to the Bonds, the proceeds thereof or the Project if such action or omission (i) would cause the interest on the Bonds to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Bonds, except for interest on any Bond for any period during which it is held by a "substantial user" of the Project or a "related person" as such terms are used in Section 103(b)(13) of the 1954 Code. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the Bonds until the date on which all obligations of the Owner in fulfilling the above covenant under the Code Company and the 1954 Code have been met. (b) Throughout Issuer agree to comply with the Qualified Project Period at least 20% of completed dwelling units in the Project (15% of the dwelling units in the Project if it is or becomes a "targeted area" project as defined in Treasury Regulation Section 1.103-8(b)(8)(iii)) will be continuously occupied by Lower-Income Tenants. For the purpose of complying with this requirement, a unit occupied by an individual or family who at the commencement of the occupancy qualifies as a Lower-Income Tenant is treated as occupied by such an individual or family during their tenancy in such unit, even though they subsequently cease to be of low or moderate income. Moreover, if a unit is vacated by an individual or family who qualified as Lower-Income Tenants, such unit shall be treated as occupied by Lower-Income Tenants until reoccupied (other than for a temporary period of not more than 31 days) at which time the character of the unit shall be redetermined. The dwelling units required to be rented to, or held available for, occupancy by Lower-Income Tenants shall be distributed among the different types of dwelling units, by number of bedrooms, in approximately the same proportions as each type of dwelling unit is additional requirements to the total number of dwelling units. (c) It will take such action or actions as may be extent necessary, in the opinion of Bond Counsel, including, without limitation, consenting Counsel delivered to the amendment of this AgreementIssuer, the Indenture or Company, and the Regulatory Agreement Trustee, to comply fully with all applicable rules, rulings, policies, procedures, regulations or other official statements promulgated, proposed or made by preserve the Department exclusion of interest on the Bonds from the gross income of the Treasury or the Internal Revenue Service pertaining to obligations issued under Section 103(b)(4)(A) owners of the 1954 Code which are necessary in the opinion of Bond Counsel to maintain the exclusion from gross income Bonds for federal income tax purposes under Section 103 of interest the Code. In furtherance of such intention, the Issuer hereby authorizes and directs its General Manager or its Director of Finance to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the Issuer, which may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. (d) It will execute and file of record appropriate amendments to the Regulatory Agreement and assure the recording of such document and take any other steps as are necessary, in the opinion of Bond Counsel, in order to insure that the requirements and restrictions of this Article II will be binding upon all owners of the Project. The Owner hereby covenants to include such requirements and restrictions in any documents transferring any interest in the Project to another to the end that such transferee has notice of, and is bound by such restrictions to the extent and for the period provided therein and to obtain the agreement from any transferee to so abide. (e) That the Owner shall not discriminate on the basis of race, color, religion, sex, age, national origin, handicap, marital or familial status in the lease, use, or occupancy of the Project or in connection with the employment or application for employment of persons for the operation and management of the Project. (f) That none of the dwelling units in the Project shall at any time be utilized on a transient basis, shall ever be leased or rented for a period of less than thirty days, and shall ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, hospital, sanitarium, nursing home, rest home, trailer court or park. (g) That the Project is located on a single tract of land or on two or more contiguous tracts of land, and that all of the buildings, structures and facilities which are part of the Project comprise a single geographically and functionally integrated project for residential rental property, as evidenced by the ownership, management, accounting and operation of the Project. (h) That the Owner intends to hold the Project for its own account, has no current plan to sell and has not entered into any agreement to sell any of the Project, and, until payment in full of all the Bonds, will not sell or contract to sell the Project without having first delivered to the Trustee an opinion of Bond Counsel to the effect that such sale will not affect the exclusion from gross income for federal or Colorado income tax purposes; provided that no such opinion shall be required in connection with a foreclosure sale or a transfer by deed in lieu of foreclosure or comparable conversion of the Project. (i) The average maturity of the Bonds does not exceed 120% of the average reasonably expected life of the facilities of the Project financed with the original net proceeds of the Prior Bonds. (j) The Bonds are not and shall not be "federally guaranteed" as defined in Section 149(b) of the Code.