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Section 11. Tax Covenants. <br /> A. No Arbitrage or Private Activity Bonds. The City shall comply with the <br /> requirements of this Section unless in the written opinion of Preston Gates & Ellis LLP or other <br /> nationally recognized bond counsel such compliance is not required in order to maintain the <br /> exemption of the interest on the Bonds from federal income taxes. <br /> The City hereby covenants that it will not make any use of the proceeds of sale of the <br /> Bonds or any other funds of the City that may be deemed to be proceeds of such Bonds pursuant <br /> to Section 148 of the Code and the applicable regulations thereunder that will cause the Bonds to <br /> be "arbitrage bonds" within the meaning of said section and said regulations. The City will <br /> comply with the requirements of Section 148 of the Code (or any successor provision thereof <br /> applicable to the Bonds) and the applicable regulations thereunder throughout the term of the <br /> Bonds. The City further covenants that it will not take any action or permit any action to be taken <br /> that would cause the Bonds to constitute "private activity bonds" under Section 141 of the Code. <br /> B. Arbitrage Rebate. <br /> (a) General Rule. The City will pay to the United States of America in <br /> accordance with the provisions of this section (i) rebate installment payments which, when added <br /> to the future value as of the Computation Date of all previous rebate payments made with respect <br /> to the Bonds, equal at least 90% of the Rebate Amount with respect to the Bonds, and (ii) a final <br /> rebate installment payment in an amount which, when added to the future value of all previous <br /> rebate payments made with respect to the Bonds, equals 100% of the Rebate Amount hereinafter <br /> defined. <br /> (b) Computation of Rebate Amount. As of any Computation Date, the <br /> Rebate Amount for the Bonds is the excess of the future value, as of such date, of all Receipts <br /> over the future value, as of such date, of all Payments. <br /> (c) Payment Procedure. <br /> (i) The first rebate installment payment will be made for a Computation Date that is <br /> no later than five years after the issue date of the Bonds. Subsequent rebate installment payments <br /> -27- FWWOBU.DOC 97/03/04 <br />