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(a) It is the intention of the Issuer and the Borrower that interest on the Bond shall be and
remain excludable from gross income for federal income taxation purposes, and to that end the covenants
and agreements of the Borrower in this Section are for the benefit of the owners of the Bonds and the Issuer.
(b) The Borrower covenants and agrees that it will not (1) use or permit the use of any of the
funds provided by the Issuer hereunder or any other funds of the Borrower, directly or indirectly, in such
manner as would; (2) enter into, or allow any “related person” (as defined in Section 147(a)(2) of the Code)
to enter into, any arrangement, formal or informal, for the purchase of the Bonds that would; or (3) take or
omit to take any other action that would, in each case cause the Bonds to be “arbitrage bonds” within the
meaning of Section 148 of the Code.
(c) In the event that at any time the Borrower is of the opinion or becomes otherwise aware
that for purposes of this Section it is necessary to restrict or to limit the yield on the investment of any
money held under the Indenture or otherwise by the Trustee, the Borrower shall determine the limitations
and so instruct the Trustee in writing and cause the Trustee to comply with those limitations under the
Indenture.
(d) The Borrower will take such action or actions as may be necessary to fully comply with
the Tax Certificate and with Section 148 of the Code as applicable to the Bonds.
(e) The Borrower further agrees that it shall not discriminate on the basis of race, creed, color,
sex, sexual preference, source of income (e.g. AFDC, SSI), physical disability, national origin or marital
status in the lease, use or occupancy of the Project or in connection with the employment or application for
employment of persons for the operation and management of the Project, to the extent required by
applicable Commonwealth or federal law.
(f) The Borrower further warrants and covenants that it has not executed and will not execute
any other agreement, or any amendment or supplement to any other agreement, with provisions
contradictory to, or in opposition to, the provisions, of this Loan Agreement and of the Regulatory
Agreement, and that in any event, the requirements of this Loan Agreement and the Regulatory Agreement
are paramount and controlling as to the rights and obligations herein set forth and supersede any other
requirements in conflict herewith and therewith.
(g) The Borrower will use due diligence to complete the renovation, rehabilitation,
improvements, construction and equipping of all of the units comprising the Project and reasonably expects
to fully expend the entire [$24,000,000] in principal amount of the Loan before the Initial Mandatory Tender
Date.
(h) The Borrower will take such action or actions as necessary to ensure compliance with
Section 2.2(e), (g), (h), (i), (l), (o), (p), (q) and (r) hereof.
Section 5.10 Useful Life. The Borrower hereby represents and warrants that, within the
meaning of Section 147(b) of the Code, the average maturity of the Bonds does not exceed 120% of the
average reasonably expected economic life of the facilities being financed with the proceeds of the Bonds.
Section 5.11 Federal Guarantee Prohibition. The Borrower shall take no action, nor permit
nor suffer any action to be taken if the result of the same would be to cause the Bonds to be “federally
guaranteed” within the meaning of Section 149(b) of the Code.
Section 5.12 Prohibited Facilities. The Borrower represents and warrants that no portion of
the proceeds of the Loan shall be used to provide any airplane, skybox or other private luxury box, health
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