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The Issuer shall not incur any liability in the event of any breach or violation of the Regulatory
Agreement by the Borrower, and the Borrower agrees to indemnify the Issuer from any claim or liability
for such breach pursuant to the Loan Agreement.
Tax-Exempt Status of the Bonds
It is the intention of the Issuer and the Borrower that interest on the Bonds shall be and remain
excludable from gross income for federal income taxation purposes, and to that end the covenants and
agreements of the Borrower described under this caption are for the benefit of the owners of the Bonds and
the Issuer.
The Borrower will not (1) use or permit the use of any of the funds provided by the Issuer under
the Loan Agreement 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.
In the event that at any time the Borrower is of the opinion or becomes otherwise aware that for
purposes described under this caption 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.
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.
The Borrower will 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.
The Borrower 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
the Loan Agreement and the Regulatory Agreement, and that in any event, the requirements of the Loan
Agreement and the Regulatory Agreement are paramount and controlling as to the rights and obligations
set forth in the Loan Agreement and supersede any other requirements in conflict with the Loan Agreement
and the Regulatory Agreement.
The Borrower will use due diligence to complete the renovation, rehabilitation, improvement,
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 by the Initial Mandatory Tender Date.
The Borrower will take such action or actions as necessary to ensure compliance with the Loan
Agreement.
* Preliminary; subject to change.
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