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8,5- 0063, 99 (c) Company has heretofore entered into binding contracts for acquisition of machinery and equipment and for acquisition, construction and improving of the Project, such contracts representing binding obligations to pay direct costs of acquiring, constructing, improv- ing and equipping the Project in an aggregate amount in excess of 2 -1/2% of total costs of the Project (in addition to design and acquisition costs already incurred). (d) Work on the Project has commenced and is expected to proceed with due diligence to completion. The Bond proceeds will be used to reimburse the Company for advances made in connection with acquisition and construction of the Project. (e) Accrued interest, if any, received upon the sale of the Series 1985 Bonds will be deposited in the Bond Fund and applied to the first interest due thereon, the remaining amount received from the sale of the Series 1985 Bonds will be deposited in the Construction Fund and used to pay Eligible Costs of the Project. (f) On the date hereof the Issuer has agreed to lease the Project to Company pursuant to this Agreement. It is not expected that the payments to be made by the Company to the Trustee for the account of the Issuer pursuant to this Agreement will exceed the amounts required timely to pay the principal, premium, if any (whether at maturity or by redemption), and interest on the Series 1985 Bonds; and it is not expected that the Company will prepay any of the amounts payable under this Agreement. (g) The adjusted yield on acquired nonpurpose obligations to be allocated to the proceeds of the Series 1985 Bonds (other than obligations held only during the three year period commencing the date the Series 1985 Bonds are issued or during construction of the Project, whichever time is less, and other than obligations acquired with less than a major portion of the proceeds of the Series 1985 Bonds) shall not exceed such adjusted yield as shall be permitted by Section 103(c) of the Internal Revenue Code and Section 1.103- 13(b)(5) of the Regulations promulgated there- under. on the basis of the foregoing, and the expectations, facts, estimates and circumstances in existence as of the date hereof, it is not expected that the proceeds of the Series 1985 Bonds will be used in any manner that would cause the Series 1985 -23- L L IM