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<br />purchase thereof are rated as to investment quality by a nationally recognized investment rating firm not less <br />than AAA or its equivalent, and (iii) noncallable obligations of a state or an agency or a county, municipality, <br />or other political subdivision of a state that have been refunded and that, on the date the governing body of <br />the Issuer adopts or approves the proceedings authorizing the financial arrangements are rated as to <br />investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. <br /> <br />(d) Until all Defeased Certificates of Obligation shall have become due and payable, the Paying <br />Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Certificates of <br />Obligation the same as if they had not been defeased, and the Issuer shall make proper arrangements to <br />provide and pay for such services as required by this Ordinance. <br /> <br />(e) In the event that the Issuer elects to defease less than all of the principal amount of Certificates <br />of Obligation of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of <br />Certificates of Obligation by such random method as it deems fair and appropriate. <br /> <br />Section 13. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES OF <br />OBLIGATION; BOND COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT <br />INSURANCE PROVISION, IF OBTAINED. The Mayor of the Issuer is hereby authorized to have control <br />of the Initial Certificate of Obligation issued hereunder and all necessary records and proceedings pertaining <br />to the Initial Certificate of Obligation pending its delivery and its investigation, examination, and approval by <br />the Attorney General of the State of Texas, and its registration by the Comptroller of Public Accounts of the <br />State of Texas. Upon registration of the Initial Certificate of Obligation said Comptroller of Public Accounts <br />(or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's <br />Registration Certificate on the Initial Certificate of Obligation, and the seal of said Comptroller shall be <br />impressed, or placed in facsimile, on the Initial Certificate of Obligation. The approving legal opinion of the <br />Issuer's bond counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the <br />Initial Certificate of Obligation or on any Certificates of Obligation issued and delivered in conversion of and <br />exchange or replacement of any Certificate of Obligation, but neither shall have any legal effect, and shall <br />be solely for the convenience and information of the registered owners of the Certificates of Obligation. In <br />addition, if bond insurance is obtained, the Certificates of Obligation may bear an appropriate legend as <br />provided by the insurer. <br /> <br />Section 14. COVENANTS REGARDING TAX EXEMPTION. The Issuer covenants to refrain <br />from taking any action which would adversely affect, and to take any required action to ensure, the treatment <br />of the Certificates of Obligation as obligations described in Section 103 of the Internal Revenue Code of 1986, <br />as amended (the "Code"), the interest on which is not inculpable in the "gross income" of the holder for <br />purposes of federal income taxation. In furtherance thereof, the Issuer covenants as follows: <br /> <br />(a) to take any action to assure that no more than 10 percent of the proceeds of the Certificates of <br />Obligation or the projects financed therewith (less amounts deposited to a reserve fund, if any) or the projects <br />financed therewith are used for any "private business use," as defined in Section 141 (b)( 6) of the Code or, <br />if more than 10 percent of the proceeds or the projects financed therewith are so used, such amounts, <br />whether or not received by the Issuer, with respect to such private business use, do not, under the terms of <br />this Ordinance, or any underlying arrangement, directly or indirectly, secure or provide for the payment of <br />more than 10 percent of the debt service on the Certificates of Obligation, in contravention of Section <br />141 (b )(2) of the Code; <br /> <br />22 <br />