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§1.148-5(e)(3)(ii)(B). Under Treas.Reg. §1.148-5(e)(3)(i),qualified administrative <br /> costs, including underwriter's discount, are taken into account in determining the <br /> City's yield on the Loan Agreement (by increasing the payments thereon or <br /> decreasing the receipts for such payments).However,regardless of the timing of the <br /> actual payments by or on behalf of the Borrower for the Qualifying Costs,payment <br /> of the Qualifying Costs will be simply treated as reimbursements to payments of <br /> City costs without affecting the yield on the Loan Agreement,because the present <br /> value of those payments by the Borrower will not exceed the present value of the <br /> reasonable administrative costs payable by or on behalf of the City, using the <br /> yield on the applicable issue of Bonds as the discount rate. <br /> (d) Materially Higher Yield Compliance. The yield on a purpose <br /> investment equals the discount rate that,when used in computing the present value(as of <br /> the date the investment is first allocated to the issue) of all unconditionally payable <br /> receipts from the investment, produces an amount equal to the present value of all <br /> unconditionally payable payments for the investment. For the foregoing purposes, <br /> "payments"means amounts to be actually or constructively paid to acquire the investment <br /> (the sale proceeds of the applicable issue of Bonds), and"receipts" means amounts to be <br /> actually or constructively received from the investment, such as earnings and return of <br /> principal. <br /> Based on the foregoing, the yield on the Loan Agreement will not be <br /> materially higher than the yield on the Bonds. Under Treas.Reg. § 1.148-2(d)the definitions <br /> of"materially higher" with respect to the Loan Agreement is a yield that exceeds the yield <br /> on the Bonds by more than one and one-half percent(1 1/2%). <br /> IV. GROSS PROCEEDS AND FUNDS <br /> 4.1. Gross Proceeds, Generally. Gross proceeds of the Bonds will consist of <br /> sale proceeds, transferred proceeds, investment proceeds (collectively, "proceeds") and <br /> replacement proceeds. There will be no gross proceeds of the Bonds except for amounts in the <br /> funds or accounts described below. <br /> 4.2. Funds, Generally. The Indenture establishes the following funds or accounts <br /> with the Trustee: <br /> (a) the "Revenue Fund"; <br /> (b) the "Bond Fund," and therein a "Senior Debt Service Account" and a <br /> "Subordinate Debt Service Account"; <br /> (c) the "Optional Redemption Fund"; <br /> (d) the "Debt Service Reserve Fund"; <br /> -6- <br />