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(a) Amount Received from Sale of Bonds; No Aggregated Issues. The Bonds
<br /> were sold to Stone & Youngberg LLC (the "Underwriter"), at their face amount
<br /> ($27,725,000), less original issue discount of $95,619.60, less Underwriter's discount of
<br /> $185,757.50, for a total amount of $27,443,622.90. Of said amount, $469,122.86 will be
<br /> deposited in the Costs of Issuance Fund; $2,772,500.00 will be deposited in the Reserve
<br /> Account of the Bond Fund; $139,951.05 (which amount is allocable solely to the City of
<br /> Santa Ana and is herein referenced as the "Santa Ana Capitalized Interest") will be
<br /> deposited in the Interest Account of the Bond Fund; and the remaining $24,062,048.99
<br /> will be deposited in the Project Fund. All of said Funds and Accounts are held by the
<br /> Trustee. No tax-exempt debt has been sold within fifteen (15) days before or after the
<br /> date the Bonds were sold that will be paid from substantially the same source of funds
<br /> as the Bonds (excluding guarantees from unrelated parties).
<br /> (b) Costs of Issuance Fund. The proceeds of the Bonds deposited in the Costs of
<br /> Issuance Fund will be used for payment of legal fees, printing costs and other costs of
<br /> issuance of the Bonds and will be fully expended promptly upon receipt of invoices.
<br /> Amounts deposited in the Costs of Issuance Fund, if invested, will be invested without
<br /> yield restrictions. Interest earnings and gains resulting from said investment Will be
<br /> retained in the Costs of Issuance Fund and used for the purposes thereof. Amounts, if
<br /> any,remaining in the Costs of Issuance Fund on the earlier of March 1, 1997, or payment
<br /> of costs of issuance in full will be deposited in the Bond Fund and applied to the
<br /> payment of debt service on the Bonds.
<br /> (c) Establishment of Project Accounts. Of the proceeds of the Bonds deposited
<br /> hi the Project Fund, the following amounts will be transferred to the following Accounts
<br /> (together, the"Project Accounts")established for the following Members: (i) $1,000,000 to
<br /> the Brea Project Account; (ii) $3,000,000 to the Buena Park Project Account; (iii)
<br /> $4,369,584.82 to the Fullerton Project Account; (iv) $2,977,931.33 to the Garden Grove
<br /> Project Account; (v) $3,254,189.00 to the Orange Project Account; (vi) $5,676,282.00 to the
<br /> Santa Ana Project Account; (vii) $1,102,456.84 to the Seal Beach Project Account; (viii)
<br /> $325,000.00 to the Stanton Project Account; and (ix) $2,356,605.00 to the Tustin Project
<br /> Account.
<br /> (d) Use of Project Accounts; Reimbursement. Amounts in the Project Accounts
<br /> will be disbursed by the Trustee upon requests of the Members to pay costs of the
<br /> System Project, the Local System Components and the Capital Projects (together, the
<br /> "Projects"), respectively, except that a portion of the amount deposited in the Fullerton
<br /> Project Account will be applied on the date hereof for payment of the Prior Fullerton
<br /> Obligations, as referenced in subparagraph (g) below. No portion of the proceeds of the
<br /> Bonds will be used for reimbursement of expenditures paid by the Authority, the
<br /> County or any Member prior to the date hereof except for (i) expenditures paid for costs
<br /> of issuance of the Bonds, (ii) preliminary capital expenditures incurred before
<br /> commencement of acquisition or construction of the Projects that do not exceed twenty
<br /> percent (20%) of the portion of the issue price of the Bonds allocable to the Members (see
<br /> subparagraph (r) and (t) below), and (iii) capital expenditures that (A) were paid no
<br /> earlier than sixty (60) days before the date of the adoption by the a Member (as a conduit
<br /> borrower) of a declaration of intent to reimburse such expenditures from the proceeds of
<br /> obligations, and (B) are reimbursed no later than eighteen (18) months after the later of
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