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(D) each Reimbursed Expenditures shall either: (1) have been paid by the County after the date that is 60 days prior to the date of the Official Intent Declaration; or (2) consist of "preliminary expenditures" as defined in Rebulations § 1.150-2(~(2), provided that the aggregate amount of such preliminary expenditures that will be included in the Reimbursed Expenditures will not exceed 20 percent of the aggregate issue price of the Certificates; or (3) to the extent not described in (1) or (2) above, will consist of expenditures in an aggregate amount that does not exceed the lesser of $100,000 or 5% of the Proceeds of the Certificates (the applicable limit in this case being $100,000). In light of the foregoing, upon the disbursement by the Trustee of the amount requested pursuant to the Reimbursement Requisition, the amount of Certificate Proceeds received by the County as a result of such Reimbursement Requisition shall be treated as eYpended for the governmental purpose of the Certificates on the date of such disbursement. SECTION 40~. TEMPORARY PER[OD. (A) EYPENDITURE OF NET SALE PROCEEDS. At least 85 percent (8J%) of the Net Sale Proceeds of the Certificates (that is, the Sale Proceeds of the Certificates less any reserve or replacement fund being funded out of Sale Proceeds) and Investment Proceeds of the Certificates are expected to be allocated to expenditures for the capital costs of the Courthouse Square Project no later than December 16, 2001, the date that is three years after the date of issuance of the Certificates. (B) BIND[NG COMMITMENT. The County has heretofore entered into contracts and other substantial binding obligations (within the meaning of Regulations § 1.148-2(e)(2)(i)(B)) to third parties for expenditures on the Courthouse Square Project in excess of $1,100,000.00, which is five percent (5%) of the Net Sale Proceeds (said Net Sale Proceeds and 5% thereof bein~ calculated as set forth on Exhibit A attached hereto). ~C~ DUE DILIGENCE. The design and site preparation of, and allocation of the Net Sale Proceeds to, the Courthouse Square Project has already commenced and construction thereof will proceed with due diligence to completion. (D~ TEMPORARY PERIOD. Accordingly, pursuant to Regulations § 1.148-2(e)(2)(i), the Net Sale Proceeds and the Investment Proceeds qualify for investment during a three-year temporary period that ends on December 16, 2001. Following the three year period that ends on GENERAL AIYD TAX CERTIFICATE PAGE 7