Bill No. 49-23 Revenue Bonds Authorizing the Acquisition & Construction of the Municipal Waterworks

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SECTION XXV. Tax Matters. This section only applies to any series of Bonds or BANs issued on a tax-exempt basis for federal income tax purposes. In order to preserve the exclusion of interest on the Bonds and BANs from gross income for federal income tax purposes and as an inducement to purchasers of the Bonds, the City represents, covenants and agrees that: a) No person or entity, other than the City or another state or local governmental unit, will use proceeds of the Bonds or BANs or property financed by the Bond or BAN proceeds other than as a member of the general public. No person or entity other than the City or another state or local governmental unit will own property financed by Bond or BAN proceeds or will have actual or beneficial use of such property pursuant to a lease, a management or incentive payment contract,an arrangement such as take-or-pay or output contract,or any other type of arrangement that differentiates that person's or entity's use of such property from the use by the public at large. b) No Bond or BAN proceeds will be loaned to any entity or person other than a state or local governmental unit. No Bond or BAN proceeds will be transferred, directly or indirectly, or deemed transferred to a non-governmental person in any manner that would in substance constitute a loan of the Bond or BAN proceeds. c) The City will not take any action or fail to take any action with respect to the Bonds or BANs that would result in the loss of the exclusion from gross income for federal income tax purposes of interest on the Bonds or BANs pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder as applicable to the Bonds or BANs, including, without limitation, the taking of such action as is necessary to rebate or cause to be rebated arbitrage profits on Bond or BAN proceeds or other monies treated as Bond or BAN proceeds to the federal government as provided in Section 148 of the Code, and will set aside such monies, which may be paid from investment income on funds and accounts notwithstanding anything else to the contrary herein, in trust for such purposes. d) The City will file an information report on Form 8038-G with the Internal Revenue Service as required by Section 149 of the Code with respect to each series of Bonds or BANs issued. e) The City will not make any investment or do any other act or thing during the period that any Bond or BAN is outstanding hereunder which would cause any Bond or BAN to be an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations thereunder as applicable to the Bonds or BANs. Notwithstanding any other provisions of this Ordinance, the foregoing covenants and authorizations(the"Tax Sections")which are designed to preserve the exclusion of interest on the Bonds or BANs from gross income under federal law(the"Tax Exemption")need not be complied with to the extent the City receives an opinion of nationally recognized bond counsel that compliance with such Tax Section is unnecessary to preserve the Tax Exemption. SECTION XXVI. Issuance of BANs. (a) The City, having satisfied all the statutory requirements for the issuance of its Bonds,may elect to issue its BAN or BANs pursuant to a Bond Anticipation Note Purchase Agreement("Bond Anticipation Note Agreement")to be entered into between the City and the purchaser of the BAN or BANs. The Common Council hereby authorizes 33 -