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percent of the stated principal amount (or, in the case of a discount, the issue <br /> price) of the Obligations; <br /> 20. the Obligations must include a provision requiring the City take all necessary steps to <br /> comply with the requirement that certain amounts earned on the investment of gross <br /> proceeds of the Obligations be rebated to the federal government in order to satisfy the <br /> requirements of§ 148 of the Code. The Obligations must provide that the City will: <br /> a. account for all Gross Proceeds, as defined in the Code and Regulations, <br /> (including all receipts, expenditures and investments thereof) on its books of <br /> account separately and apart from all other funds (and receipts, expenditures and <br /> investments thereof) and retain all records of such accounting for at least six years <br /> after the final Computation Date. The City may, however, to the extent permitted <br /> by law, commingle Gross Proceeds of its loan with other money of the City, <br /> provided that the City separately accounts for each receipt and expenditure of <br /> such Gross Proceeds and the obligations acquired therewith; <br /> b. calculate the Rebate Amount, as defined in the Code and Regulations, with <br /> respect to its loan, not less frequently than each Computation Date, in accordance <br /> with rules set forth in § 148(f) of the Code, § 1.148-3 of the Regulations, and the <br /> rulings thereunder. The City shall maintain a copy of such calculations for at least <br /> six years after the final Computation Date; <br /> c. as additional consideration for the making of the loan, and in order to induce the <br /> making of the loan by measures designed to ensure the excludability of the <br /> interest on the TWDB's Source Series Bonds from the gross income of the <br /> owners thereof for federal income tax purposes, pay to the United States the <br /> amount described in paragraph (b) above within 30 days after each Computation <br /> Date; <br /> d. exercise reasonable diligence to assure that no errors are made in the calculations <br /> required by paragraph (b) and, if such error is made, to discover and promptly to <br /> correct such error within a reasonable amount of time thereafter, including <br /> payment to the United States of any interest and any penalty required by the <br /> Regulations; <br /> 21. the Obligations must include a provision prohibiting the City from taking any action that <br /> would cause the interest on the Obligations to be includable in gross income for federal <br /> income tax purposes; <br /> 22. the Obligations must provide that the City will not cause or permit the Obligations to be <br /> treated as "federally guaranteed" obligations within the meaning of§ 149(b) of the Code; <br /> 23. the transcript must include a No Arbitrage Certificate or similar Federal Tax Certificate <br /> setting forth the City's reasonable expectations regarding the use, expenditure and <br /> investment of the proceeds of the Obligations; <br /> 5 <br /> TWDB Commitment No.L1000601 <br /> Exhibit A,Page 6 of 10 <br />