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reimbursed under the contracts must be reasonable in relation to the services performed, ,.-.., <br /> reflected in the contract, and acceptable to the Executive Administrator; <br /> 14. prior to closing, when any portion of the financial assistance is to be held in escrow or in <br /> trust, the City shall execute an escrow or trust agreement, approved as to form and <br /> substance by the Executive Administrator, and shall submit that executed agreement to <br /> the TWDB; <br /> 15. the Executive Administrator may require that the City execute a separate financing <br /> agreement in form and substance acceptable to the Executive Administrator; <br /> Conditions Related To Tax-Exempt Status <br /> 16. the City's bond counsel must prepare a written opinion that states that the interest on the <br /> Obligations is excludable from gross income or is exempt from federal income taxation. <br /> Bond counsel may rely on covenants and representations of the City when rendering this <br /> opinion; <br /> 17. the City's bond counsel opinion must also state that the Obligations are not "private <br /> activity bonds." Bond counsel may rely on covenants and representations of the City <br /> when rendering this opinion; <br /> 18. the Obligations must include a provision prohibiting the City from using the proceeds of <br /> this loan in a manner that would cause the Obligations to become"private activity bonds" <br /> within the meaning of§ 141 of the Internal Revenue Code of 1986, as amended (Code) <br /> and the Treasury Regulations promulgated thereunder(Regulations); <br /> 19. the Obligations must provide that no portion of the proceeds of the loan will be used, <br /> directly or indirectly, in a manner that would cause the Obligations to be "arbitrage <br /> bonds"within the meaning of§ 148(a) of the Code and Regulations, including to acquire <br /> or to replace funds which were used, directly or indirectly, to acquire Nonpurpose <br /> Investments (as defined in the Code and Regulations) which produce a yield materially <br /> higher than the yield on the TWDB's bonds that are issued to provide financing for the <br /> loan(Source Series Bonds), other than Nonpurpose Investments acquired with: <br /> a. proceeds of the TWDB's Source Series Bonds invested for a reasonable <br /> temporary period of up to three (3) years after the issue date of the Source Series <br /> Bonds until such proceeds are needed for the facilities to be financed; <br /> b. amounts invested in a bona fide debt service fund, within the meaning of§ 1.148- <br /> 1(b)of the Regulations; and <br /> c. amounts deposited in any reasonably required reserve or replacement fund to the <br /> extent such amounts do not exceed the least of maximum annual debt service on <br /> the Obligations, 125% of average annual debt service on the Obligations, or 10 <br /> 4 <br /> TWDB Commitment No.L1000601 <br /> Exhibit A,Page 5 of 10 <br />