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in the Debt Service Reserve Fund will not exceed the Maximum Unrestricted Reserve <br /> Amount. <br /> 5.5. Minor Portion. In addition to other gross proceeds of an issue of Bonds that <br /> are not yield restricted, an amount of gross proceeds equal to the minor portion thereof is not yield <br /> restricted. Accordingly, an amount on deposit in the Project Fund equal to the minor portion <br /> ($100,000)will not be yield restricted. <br /> 5.6. Calculation of Yield on Nonpurpose Investments. <br /> (a) General Rule. For purposes of the foregoing, the yield on all <br /> nonpurpose investments will be calculated in accordance with Treas. Reg. §1.148-5. In <br /> general, the yield on an investment is the discount rate that, when used in computing the <br /> present value as of the date the investment is first allocated to an issue of all unconditionally <br /> payable receipts from the investment, produces an amount equal to the present value of all <br /> unconditionally payable payments for the investment. Such yield is computed under the <br /> economic accrual method, using the same compounding interval and financial conventions <br /> used to compute the yield on the issue. <br /> (b) Guaranteed Investment Contract. Gross proceeds may be invested in <br /> a guaranteed investment contract. For a guaranteed investment contract, a broker's <br /> commission or similar fee paid on behalf of either an issuer or the provider is treated as an <br /> administrative cost and,except in the case of an issue that satisfies section 148(f)(4)(D)(i)of <br /> the Code, is a qualified administrative cost to the extent that the present value of the <br /> commission,as of the date the contract is allocated to the issue,does not exceed the lesser of <br /> a reasonable amount within the meaning of paragraph Treas. Reg. § 1.148-5(e)(2)(i) or the <br /> present value of annual payments equal to .05 percent of the weighted average amount <br /> reasonably expected to be invested each year of the term of the contract. For this purpose, <br /> present value is computed using the taxable discount rate used by the parties to compute the <br /> commission or,if not readily ascertainable,the yield to the issuer on the investment contract <br /> or other reasonable taxable discount rate. Amounts in the Debt Service Reserve Fund may <br /> be invested in a guaranteed investment contract that complies with the foregoing. <br /> -11- <br />