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-9- <br /> (u) The Lessee represents, warrants, and covenants that no portion of the <br />Equipment constitutes a part of the Clean Water Project, nor has any Equipment been <br />financed with proceeds of the Project Finance Agreement. No consent, approval or other <br />determination is required by the Lessee from the California State Water Resources <br />Control Board, pursuant to the Project Finance Agreement or otherwise, in order to enter <br />into this Agreement or to acquire and install the Equipment or to grant Lessor a first <br />priority and exclusive security interest therein. <br />(v) (A) Private Activity Bond Limitation. Lessee will assure that the <br />proceeds of the Agreement are not so used as to cause the obligations of Lessee under <br />the Agreement to satisfy the private business tests of section 141(b) of the C ode or the <br />private loan financing test of section 141(c) of the Code. <br /> (B) Federal Guarantee Prohibition. Lessee will not take any action or <br />permit or suffer any action to be taken if the result of such action would be to <br />cause any of the obligations of Lessee under the Agreement to be “federally <br />guaranteed” within the meaning of section 149(b) of the Code. <br /> (C) Rebate Requirement. Lessee will take any and all actions necessary <br />to assure compliance with section 148(f) of the Code, relating to the rebate of <br />excess investment earnings, if any, to the federal government, to the extent that <br />such section is applicable to the Agreement. <br /> (D) No Arbitrage. Lessee will not take, or permit or suffer to be taken, <br />any action with respect to the proceeds of the Agreement which, if such action <br />had been reasonably expected to have been taken, or had been deliberately and <br />intentionally taken, on the date of delivery of the Agreement would have caused <br />any of the obligations of Lessee under the Agreement to be “arbitrage bonds” <br />within the meaning of section 148 of the Code. <br /> (E) Maintenance of Tax-Exemption. Lessee will take all actions <br />necessary to assure the exclusion of interest with respect to the Agreement from <br />the gross income of the owner of the Agreement to the same extent as such <br />interest is permitted to be excluded from gross income under the Code as in effect <br />on the date of delivery of the Agreement. <br /> (F) Record Retention. Lessee will retain its records of all accounting <br />and monitoring it carries out with respect to the Agreement for at least 3 years <br />after the Agreement matures or is prepaid (whichever is earlier); provided, that if <br />Lessee’s Rental Payments under the Agreement are prepaid and refunded, Lessee <br />will retain its records of accounting and monitoring at least 3 years after the <br />earlier of the maturity or prepayment of the obligations that refunded the <br />Agreement. <br />288