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(viii) The principal allocable to the City of Stanton is $375,000 (being <br /> 1.35 percent of the total principal amount of the Bonds;and <br /> (ix) The principal allocable to the City of Tustin is $2,700,000 (being <br /> 9.74 percent of the total principal amount of the Bonds. <br /> (u) No Hedge Bonds. The Bonds d.o not constitute"hedge bonds" because(i) at <br /> least eighty-five percent(85%) of the Net Sale Proceeds allocable to each Member will be <br /> used to carry out the governmental purposes of the Bonds within three (3) years of the <br /> date hereof, and not more than fifty percent (50%) of the proceeds of the Bonds, if any, <br /> are invested in investments having a substantially guaranteed yield for four (4) or more <br /> years; and (ii) the Fullerton Prior Obligations were not hedge bonds.The Fullerton Prior <br /> Obligations were not hedge bonds because on the respective dates of issuance of the <br /> Fullerton Prior Obligations, the City of Fullerton reasonably expected that at least eight- <br /> five percent (85%) of the proceeds of the respective Fullerton Prior Obligations would be <br /> used to carry out the respective governmental purposes of the Fullerton Prior <br /> Obligations within three (3) years of the dates of issuance of the respective Fullerton <br /> Prior Obligations and not more than fifty percent (50%) of the proceeds of the respective <br /> Fullerton Prior Obligations, if any, was invested in investments having a substantially <br /> guaranteed yield for four (4) or more years. <br /> On the basis of the foregoing, it is not expected that the proceeds of the Bonds will be <br /> used in a manner that would cause the Bonds to be arbitrage bonds within the meaning of <br /> section 148 of the Code and applicable regulations. To the best of my knowledge, information <br /> and belief, the expectations herein expressed are reasonable and there are no facts or estimates, <br /> other than those expressed herein, that would materially affect the expectations herein <br /> expressed. <br /> IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of July, 1996. <br /> Rode•ick Coloma, <br /> Tre urer <br /> 8 <br />