Section 2. The Board represents and covenants that the Institution has not and
will not permit the proceeds of the Refunded Bonds to which the provisions of Section
103 of the Internal Revenue code of 1954, as amended (the "1954 Code"), apply to be
used in any manner that would result in (a) 25% or more of such proceeds being used in
a trade or business carried on by any person other than a governmental unit, as provided
in Section 103 of the 1954 Code, (b) 25% or more of such proceeds being used with
respect to any output facility within the meaning of Section 103 of the 1954 Code
considered as being used in a trade or business carried on by any person other than a
governmental unit, or (c) 25% or more of such proceeds being used directly or indirectly
to make or finance loans to persons other than a governmental unit, as provided in
Section 103(o) of the 1954 Code. The Institution need not comply with such covenants if
the Institution obtains the written approval of the State Treasurer and an opinion of
nationally recognized bond counsel acceptable to the Treasury Board that such covenants
need not be complied with to prevent the interest on the Refunded Bonds or the
Refunding Bonds from being includable in the gross income of the owners thereof for
federal income tax purposes.
