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

Tax Status of Tax-Exempt Bonds. The Borrower hereby covenants, represents and agrees as follows: (a) the Borrower has not knowingly taken and will not knowingly take or permit to be taken any action that would have the effect, directly or indirectly, of causing interest on any of the Tax-Exempt Bonds to be included in gross income for federal income tax purposes and, if it should take or permit to be taken any such action, the Borrower shall take all lawful actions that it can take to rescind such action promptly upon having knowledge thereof; (b) the Borrower will take such action or actions, including amending the Loan, the Note, and the Deed of Trust as may be reasonably necessary in the opinion of Bond Counsel, to comply fully with all applicable rules, rulings, policies, procedures, regulations or other official statements promulgated or proposed by the United States Department of the Treasury or the Internal Revenue Service under Section 145 of the Code which are applicable to the Bonds; (c) the Borrower will take no action or permit or suffer to be taken any action the result of which would cause the Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code; (d) no portion of the proceeds of the Bonds shall be used to provide any airplane, skybox or other private luxury box, facility primarily used for gambling, or store the principal business of which is the sale of alcoholic beverages for consumption off premises; (e) the Borrower is aware of the provisions of Section 150(b)(3) of the Code and covenants that any use of the Project by other than an organization described in Section 501(c)(3) of the Code or a governmental unit (as described in Section 145 of the Code) will not be such as to cause the Borrower to violate the covenant contained in Section 2.2(e) hereof; (f) the Borrower covenants and agrees that it will not use or permit the use of any of the funds provided by the Authority hereunder or any other funds of the Borrower, directly or indirectly, or direct the Trustee to invest any funds held by it hereunder or under the Indenture, in such manner as would, or enter into, or allow any “related person” (as defined in Section 147(a)(2) of the Code) to enter into, any arrangement, formal or informal, for the purchase of the Bonds that would, or take or omit to take any other action that would cause any Bond to be an “arbitrage bond” within the meaning of Section 148 of the Code or “federally guaranteed” within the meaning of Section 149(b) of the Code and applicable regulations promulgated from time to time thereunder; (g) in the event that at any time the Borrower is of the opinion or becomes otherwise aware that for purposes of this Section 6.4 or Section 7.13 of the Indenture it is necessary to restrict or to limit the yield on the investment of any moneys held by the Trustee under the Indenture, the Borrower shall determine the limitations and so instruct the Trustee in writing (with a copy to the Authority) and cause the Trustee to comply with those limitations under the Indenture; (h) the Borrower will take such action or actions as may be reasonably necessary in the opinion of Bond Counsel, or of which it otherwise becomes aware, to comply fully with Section 148 of the Code; (i) the Borrower will take such action or actions as necessary to ensure compliance with Sections 7.13 and 7.14 of the Indenture; and (j) the Borrower shall not, pursuant to an arrangement, formal or informal, purchase Bonds in an amount related to the amount of the Loan. The Authority covenants that it will not knowingly take or knowingly permit to be taken any action which will cause interest on the Tax-Exempt Bonds to become includable in gross income for federal income tax purposes; provided that none of the covenants and agreements herein contained shall require any of the Borrower, the Trustee or the Authority to enter an appearance or intervene in any administrative, legislative or judicial proceeding in connection with any changes in applicable laws, rules or regulations or in connection with any decisions of any court or administrative agency or other governmental body affecting the exclusion from gross income for federal income tax purposes of interest on the Tax-Exempt Bonds; and provided further that the Authority’s responsibility under this paragraph shall be limited to actions within its control and to only such actions as are permitted or required to be undertaken under the terms of the Indenture, this Agreement or the Regulatory Agreement.