Ord 2013-023/Electric System Revenue Bonds in an amount not to exceed $19,500,000

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City covenants to take any action necessary to assure, or refrain from any action which would adversely affect, the treatment of the Tax - Exempt Tax - Exempt Bonds as obligations described in section 103 of the Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the City covenants as follows: (1) to take any action to assure that no more than ten percent (10 %) of the proceeds of the Tax - Exempt Bonds or the projects financed therewith (less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of the Code or, if more than ten percent (10 %) of the proceeds or the projects financed therewith are so used, such amounts, whether or not received by the City, with respect to such private business use, do not, under the terms of this First Supplement or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than ten percent (10 %) of the debt service on the Tax - Exempt Bonds, in contravention of section 141(b)(2) of the Code; (2) to take any action to assure that in the event that the "private business use" described in subsection (1) hereof exceeds five percent (5 %) of the proceeds of the Tax - Exempt Bonds or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of five percent (5 %) is used for a "private business use" which 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 which is greater than the lesser of $5,000,000, or five percent (5 %) of the proceeds of the Tax - Exempt Bonds (less amounts 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 141(c) of the Code; (4) to refrain from taking any action which would otherwise result in the Tax - Exempt Bonds being treated as "private activity Tax - Exempt Bonds" within the meaning of section 141(b) of the Code; (5) to refrain from taking any action that would result in the Tax - Exempt Bonds being "federally guaranteed" within the meaning of section 149(b) of the Code; (6) to refrain from using any portion of the proceeds of the Tax - Exempt Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Tax - Exempt Bonds, other than investment property acquired with -- (A) proceeds of the Tax - Exempt Bonds invested for a reasonable temporary period of three (3) years or less until such proceeds are needed for the purpose for which the Tax - Exempt Bonds are issued, SanMARCOS \ElectricUtilSysRevBonds \2013: lstSuppOrdinance 16