AGENDA REPORTS - Laserfiche WebLink

Name of Recipient Agreement No.: XX-XXX-550 Project No.: C-06-XXXX-XXX 4.16 No Other Replacement Proceeds. The Recipient will not use any of the Project Funds to replace or substitute other funds of the Recipient that were otherwise to be used to finance the Project or which are or will be used to acquire securities, obligations or other investment property reasonably expected to produce a yield that is materially higher than the yield on the Bonds. 4.17 No Sinking or Pledged Fund. Except as set forth in Section 4.18 below, the Recipient will not create or establish any sinking fund or pledged fund which will be used to pay Installment Payments on the Obligation within the meaning of Section 1.148-1(c) of the Treasury Regulations. If any sinking fund or pledged fund comes into being with respect to the Obligation before the Obligation has been fully retired which may be used to pay the Installment Payments, the Recipient will invest such sinking fund and pledged fund moneys at a yield that does not exceed the yield on the Bonds. 4.18 Reserve Amount. / The State Water Board requires that the Recipient maintain and fund a separate account in an amount equal to one(1) year of debt service with respect to.he Obligation (the"Reserve Amount") as set forth in Exhibit D. The Recipient represents that the Reserve Amount is and`will be available'to pay debt service with respect to the Obligation, if and when needed. The'Reserve Amount consists solely of revenues of the Recipient and does not include any"proceeds of any obligations'the interest on which-is excluded from gross income for federal income tax purposes or-investment earnings thereon. The aggregate of the Reserve Amount, up to an amount not exceeding the..lesser of(i)teo.percent of the aggregate principal amount of the Obligation, (ii) the maximum annual'debfsevice with respect to the Obligation, or(iii) 125 percent of the average annual debt service With\respectto the Obligation>will be treated as a reasonably required reserve fund. v� 4.19 Reimbursement Resolution. ‘`. \ The"reimbursement resolution" adopted by the Recipient is incorporated herein by reference, pursuant to Exhibit A \ 4.20 Reimbursement Expenditures, A portion of the Project Funds.mey be applied to reimburse the Recipient for Project costs paid before the date hereof;'so long as the Project'cost wasp not paid prior to sixty (60) days before the Recipient's adoption of a declaration of official intent to finance the Project, (ii) not paid more than eighteen (18) months prior to the date hereof or the date the financed facility was placed-in-service, whichever is later, and (iii) not paid more than three (3) years prior to the date hereof(collectively, "Reimbursement Expenditures"), unless such.cost.is attributable to a"preliminary expenditure." Preliminary expenditure for this purpose means architectural, engineering, surveying, soil testing and similar costs incurred prior to the commencement of construction or rehabilitation of the Project, but does not include land acquisition, site preparation and similar cost's incident to the commencement of acquisition, construction or rehabilitation of the Project. Preliminary expenditures may not exceed 20% of the costs of the Project financed with the Obligation. 4.21 Change in Use of the Project. The Recipient reasonably expects to use all Project Funds and the Project for the entire stated term to maturity of the Obligation. Absent an opinion of Nationally-Recognized Bond Counsel to the effect that such use of Project Funds will not adversely affect the exclusion from federal gross income of interest on the Bonds pursuant to Section 103 of the Code, the Recipient will use all Project Funds and the Project solely as set forth in the Agreement. 20