1. MIDA Bond-Oak Grove School
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1. MIDA Bond-Oak Grove School
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<br />SECTION 7.10. CORPORATION'S ASSURANCE OF TAX EXEMPTION. The Corporation <br />represents that it understands that it is intended that interest on the Bonds not be included within the <br />gross income of the owners thereof for federal income tax purposes. In furtherance thereof, the <br />Corporation represents and covenants with the Issuer, the Lender and all Bondholders that it will take <br />all actions (and refrain from taking any actions) which are necessary in order for interest on the <br />Bonds to be excluded from gross income of the owners thereof for federal income taxation and, in <br />addition, comply with the applicable provisions of the Code as follows: <br /> <br />(a) the Corporation will fulfill all conditions specified in Section 145 ofthe Code; <br /> <br />(b) the Corporation will not use (or permit to be used) the Facilities or use or <br />invest (or permit to be used or invested) the proceeds ofthe Bonds or any other sums treated <br />as "bond proceeds" under Section 148 of the Code including "investment proceeds," <br />"invested sinking funds" and "replacement proceeds," in such a manner as to cause the <br />Bonds to be classified "arbitrage bonds" under Section 148(a) of the Code or "federally <br />guaranteed obligations" within the meaning of Section 149(b) of the Code; <br /> <br />(c) substantially all (95%) of the net proceeds of the Bonds will be used to pay <br />Qualified Project Costs; <br /> <br />(d) the Corporation will, at all times during the term of this Loan Agreement own <br />the Facilities as ownership is determined for federal income tax purposes and the <br />Corporation shall remain a nonprofit corporation described in Section 501 (c )(3) ofthe Code <br />and exempt from federal income taxes under Section 501(a) of the Code or any predecessor <br />or successor provisions of similar import heretofore or hereafter enacted; <br /> <br />(e) no more than three percent (3%) of the proceeds of the Bonds will be in the <br />aggregate be used to finance or refinance properties used or to be used in an unrelated trade <br />or business of the Corporation within the meaning of Section 513(a) of the Code or used <br />directly or indirectly in any trade or business carried on by an entity that is not an exempt <br />organization under Section 501(c)(3) of the Code or a governmental unit; <br /> <br />(j) no portion of the Bond proceeds will be used to provide any airplane, sky box, <br />or other private luxury box, any facility primarily used for gambling, or any store the <br />principal business of which is the sale of alcoholic beverages for consumption off premises, <br />all within the meaning of Section 147 ( e) of the Code; <br /> <br />(g) the average maturity of the Bonds does not exceed one hundred twenty <br />percent (120%) of the average reasonably expected economic life of the Project within the <br />meaning of Section 14 7(b) of the Code; <br /> <br />7-4 <br />
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