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- (3) the opinion of Bond Counsel as to the validity and <br />tax exempt status of the Note; <br />• (4) such other documents and opinions as Bond Counsel may <br />reasonably require for purposes of rendering its opinion <br />required in subsection (3) above or that the Lender may <br />reasonably require for the closing. <br />2-5. Disposition of Note Proceeds. <br />(1) There is hereby established with the Lender a <br />Construction Fund to be held by the Lender as a separate <br />account of the City as provided in the Construction Loan <br />Agreement. Upon delivery of the Note to Lender, the proceeds <br />of the Note shall be credited to the Construction Fund held by <br />the Lender on behalf of the City, at which time the entire <br />principal amount of the Note shall be deemed advanced, and the <br />Lender shall, on behalf of the City, disburse funds from the <br />Construction Fund for payment of Project Costs upon receipt of <br />such supporting documentation as the Lender may deem reasonabiy <br />necessary, including compliance with the provisions of the <br />Construction Loan Agreement. The Lender or Borrower shall <br />provide the City upon its request with a full accounting of all <br />funds disbursed for Project Costs. <br />(2) Any surplus in the Construction Fund shall be applied <br />towards the prepayment of the Note as provided in the <br />Construction Loan Agreement and shall not be invested to <br />produce a yield greater than the yield on the Note, as required <br />by Internal Revenue Service Revenue Procedure 79-5, Revenue <br />Procedure 81-22 and 26 CFR 601.201 (and any subsequent <br />amendments, modifications or replacements thereof); provided <br />that, if the Lender receives an opinion of Bond Counsel that <br />the exemption from federal income taxation of interest on the <br />Notes will not be jeopardized, the surplus funds may be <br />invested at a yield greater than the yield on the Note. <br />2-b. Registration of Transfer. <br />The City will cause to be kept at the office of the <br />Clerk-Administrator a Note Register in which, subject to such <br />reasonable regulations as it may prescribe, the City shall <br />provide for the registration of transfers of ownership of the <br />Note. The Note shall be initially registered in the name of• <br />the Lender and shall be transferable upon the Note Register oy <br />the Lender in person or by its agent duly authorized in <br />writing, upon surrender of the Note together with a written <br />'.• <br />16 <br />