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Section 4.3(a). Based on these expectations, the Borrower Counsel has been advised that as of the
date hereof, the yield on the Loan Agreement is not expected to exceed the yield on the Bonds by
more than one and one-half percentage points. In determining payments and receipts on purpose
investment "qualified administrative costs" as described in Treasury Regulations Section 1.148-
5(e)(3) are taken into account. In the event that the Issuer receives additional amounts under the
Loan Agreement related to the issuance and carrying of the Bonds, it will consult with Bond
Counsel to ensure that such additional amounts will not adversely affect the exclusion of interest
on the Bonds from gross income for federal income tax purposes.
Section 4.4 Funds and Accounts.
(a) General. The following funds and accounts have been established by the
Indenture:
(i) the Project Fund,
(ii) the Costs of Issuance Fund;
(iii) the Bond Fund, and the Negative Arbitrage Account and
Remarketing Proceeds Account therein;
(iv) the Collateral Fund;
(v) the Expense Fund; and
(vi) the Rebate Fund.
(b) Project Fund.
(i) Sale Proceeds in the amount of $23,000,000 will be deposited in the
Project Fund and as the Trustee receives amounts from the Mortgage Lender or the Equity Bridge
Lender for deposit to the Collateral Fund, Sale Proceeds will be released from the Project Fund to
pay costs of the Project. Notwithstanding the direct use of such Sale Proceeds, the Issuer and the
Borrower will allocate the Sale Proceeds for federal tax purposes to the Project as described in
Exhibit B. The Sale Proceeds deposited in the Project Fund will be invested in Eligible
Investments. All investment earnings on deposit in the Project Fund shall be credited to the
Negative Arbitrage Account of the Bond Fund. As amounts are released from the Project Fund
portions of the Eligible Investments will be reallocated from the Project Fund to the Collateral
Fund pursuant to Section 4.04 of the Trust Indenture.
(ii) The Sale Proceeds may be deposited in the Project Fund at the
election of the Borrower and may be used to purchase State and Local Government Series
Securities ("SLGS") from the United States Department of the Treasury, Bureau of Public Debt
on or after the Issue Date, or elect for such funds to be invested in other Eligible Investments under
the Trust Indenture. SLGS subscription documents, if such investments are elected to be utilized
by the Borrower, will be attached hereto as Exhibit D. Earnings on the SLGS or other Eligible
Investments will be deposited into the Negative Arbitrage Account of the Bond Fund.
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