07 - Issuance & Sale of City of Paris GO Bonds, Series 2018

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Section 9. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE BONDS, (a) Covenants, The Issuer covenants to take any action necessary to assure, or refrain frorn any action that would adversely affect, the treatment of the Bonds as obligations described in section 103 of the Code, the interest on which is not includable in the "'gross inconle" of the holder for purposes of federal incorne taxation. In furtherance thereof, the Issuer covenants as follows: (1) to take any action to assure that no more than 10 percent of the proceeds of the Bonds (less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in section 14 1 (b)(6) of the Code or, if more than 10 percent of the proceeds or the Project are so used, such amounts, whether or not received by the Issuer, with respect to such private business use, do not, Linder the terms of this Ordinance or any underlying arrangement, directly or indirectly, Secure or provide for the payll-lelit of more than 10 percent of the debt service on the Bonds, in contravention of section 1,41(1)0) of the Code; (2) to take any action to assure that in tile event that the "private business use" described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the projects financed therewith (less amounts deposited into a reserve find, if any) then the amount in excess of 5 percent is used for a "private business use" that is "'related" and not "disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental use; (3) to take any action to assure that no amount that is, greater than the lesser of $5,000,000, or 5 percent of the proceeds of the Bonds (less arnounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section 1.41(c) of the Code; (4) to refrain from taking any action that would otherwise result in. the Bonds being treated as "private activity bonds "' within the meaning of section 141(b) of the Code; (5) to refrain from taking any action that would result in the Bonds being "'federally guaranteed" within the rileaning of section 149(b) of the Code; (6) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) that produces a materially higher yield over the term of the Bonds, other than investment property acquired with B (A) proceeds ofthe Bonds invested for a reasonable temporary period of 3 years or less or, in the case of a refunding bond, for a period of 9O days or less until such proceeds are needed for the purpose for which the bonds are issued, (B) arnounts invested in a bona fide debt service fund, within the meaning of section 1.145-1(b) of the Treasury Regulations, and 14