Ordinance 98-39 - Laserfiche WebLink

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enforceability of the 1998 Bond and the first perfected pledge of the Pledged Revenues therefor and the due adoption of this Ordinance (enforceability may be subject to standard bankruptcy exceptions and the like); and ( e) Deliver to the Bank a general certificate of the City in form satisfactory to the Bank and its counsel certifying, among other things, that the City is in compliance with the term of the Ordinance. SECTION 2.7 INTEREST RATE ADJUSTMENT. If the interest on the 1998 Bond while registered in the name of the Bank becomes includable in the gross income of the Bank for federal income tax purposes as determined in the manner set forth below (herein a "Determination of Taxability") the interest rate on the 1998 Bond shall be adjusted so that the 1998 Bond shall bear interest at the Prime Rate. A Determination of Taxability shall have deemed to occur when (i) the Bank has been advised in writing by the Internal Revenue Service that the interest payable on the 1998 Bond must be includable in the gross income of the Bank for federal income tax purposes or (ii) the entry by a court of a final judgment or order or the promulgation by the Internal Revenue Service of a final ruling or decision, in either such case to the effect that the interest on the 1998 Bond is includable for federal income tax purposes in the gross income of the Bank. A Determination of Taxability shall not include inclusion of interest on any 1998 Bond in the income of the Bank for purposes of any alternative minimum tax, environmental tax or branch profits tax or on account of the Bank being a "substantial user" or a "related person" within the meaning of Section 147(a) of the Code. In the case of (i) above, no Determination of Taxability shall be deemed to occur unless the City has been given timely written notice by the Bank of such determination by the Internal Revenue Service and afforded an opportunity to participate in and seek at its own expense, a final administrative determination or determination by a court of competent jurisdiction (from which no further right of appeal exists) as to the existence of such Determination of Taxability; provided that the City, at its own expense, delivers to the Bank an opinion of Bond Counsel to the effect that such appeal or action for judicial or administrative review is not without merit and there is a reasonable possibility that the judgment, order, ruling or decision from which such appeal or action for judicial or administrative review is taken will be reversed, vacated or otherwise set aside. In the event of a Determination of Taxability, the City covenants that it shall also pay any interest, additions to tax or penalties, resulting from the interest on the 1998 Bond being includable in the Bank's gross income for federal income tax purposes, and any arrears in interest resulting from such Determination of Taxability. Any such additional amounts (established to the satisfaction of the City) shall be payable by the City to the Bank on the next succeeding Payment Date or, if such amounts become payable after the Maturity Date of the 1998 Bond within 60 days of the date the City is notified by the Bank that such amounts are due. In addition to the foregoing provisions of this section, the interest rate on the 1998 Bond shall be adjusted automatically as of the effective date of any change in the Maximum Corporate Tax Rate (hereinafter defined) or in the Preference Reduction Rate (hereinafter defined), presently 20%, based upon the following calculations; provided, however, that if the 1998 Bond is not a Qualified Tax- Exempt Obligation within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), on the date of its original issuance and delivery, or if the 1998 Bond at any time subsequent to its original issuance and delivery no longer qualifies as a Qualified Tax-Exempt Obligation, then the Preference Reduction Rate shall be adjusted as of the date of original issuance and delivery of the 1998 Bond or as of such subsequent date, as the case may be. 10