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(iii) at least seventy-five percent (75%) of such Available Construction Proceeds are spent within the eighteen -month period beginning on the Issue Date; and (iv) at least one hundred percent (100%) of such Available Construction Proceeds are spent within the 2 -year period beginning on the Issue Date. For purposes of this paragraph (f), the term Available Construction Proceeds means the Net Proceeds of the Note, increased by earnings on the Net Proceeds and earnings on all of the foregoing earnings, and reduced by any amounts used to pay issuance costs (including Note insurance premiums). As set forth in Section 148(f)(4)(B)(iv)(III) of the Code, for purposes of the expenditure requirements set forth in this paragraph (f), one hundred percent (100%) of the Available Construction Proceeds of the Note shall be treated as expended for the governmental purposes of the issue within the 2 -year period beginning on the Issue Date if such requirement is met within the 3 -year period beginning on the Issue Date and such requirement would have been met within such 2 -year period but for a reasonable retainage (not exceeding five percent (5%) of the Net Proceeds of the Note). Any failure to satisfy the final spending requirement shall be disregarded if the Issuer exercises due diligence to complete the project financed and the amount of the failure does not exceed the lesser of three percent (3%) of the issue price of the issue or $250,000. For purposes of Section 148(f)(4)(C)(vii) of the Code, in the event the Issuer fails to meet the expenditure requirements referred to above, the Issuer may elect to pay, in lieu of the Rebatable Arbitrage otherwise required to be paid with respect to such Gross Proceeds, a penalty with respect to the close of each 6 -month period after the Issue Date equal to 1.5 percent of the amount of the Available Construction Proceeds of the Note which, as of the close of such period, are not spent as required by the expenditure provisions set forth above. The penalty referred to above shall cease to apply only after the Note (including any refunding Notes issued with respect thereto) are no longer outstanding. The Issuer makes no election in regard to the above- described penalty. In order to qualify for the exemption from the obligation to pay Rebatable Arbitrage to the United States pursuant to this paragraph (0, at least seventy-five percent (75%) of the Available Construction Proceeds of the Note must be used for construction expenditures (as defined in Section 1.148-7(g) of the Regulations) with respect to property which is owned by a governmental unit or an organization described in Section 501(c)(3) of the Code. If only a portion of an issue is to be used for construction expenditures, such portion and the other portion of such issue may, at the election of the Issuer, be treated as separate issues for purposes of this Section 3(0 (although the remaining portion may not be entitled to the benefits of Section 3(d) hereof). The Issuer does not elect to treat any portion of the Note as a separate issue for purposes of this section. A-8