District Bonds. (a) The District may issue District Bonds to pay for Eligible Costs or reimburse the Developer for Eligible Costs and to apply the proceeds of the District Bonds as authorized under this Agreement. The District shall irrevocably pledge the District Pledged Revenue to the payment of such District Bonds. The Net Proceeds of such District Bonds will be subject to requisition by Developer to pay or reimburse Eligible Costs upon receipt of a requisition substantially in accordance with the requirements set forth in Exhibit C. (b) The Net Proceeds of such District Bonds available to pay Eligible Costs shall not exceed Twenty Eight Million, Eight Hundred Thousand Dollars ($28,800,000), subject to adjustment as provided in Section 4.7. The District Bonds shall be issued in an amount not exceeding: (i) $28,800,000 of Net Proceeds to pay Eligible Costs, subject to adjustment as provided in Section 4.7; (ii) Costs of Issuance not exceeding the following maximum percentages of the applicable series of District Bonds: for District Bonds up to Fifteen Million ($15,000,000), the maximum percentage shall be 4%; for District Bonds between Fifteen Million ($15,000,000) and Twenty Five Million ($25,000,000), the maximum percentage shall be 3.75%; and for District Bonds in excess of Twenty Five Million ($25,000,000), the maximum percentage shall be 3.5%; (iii) Town Costs in an amount not exceeding $ _ in total aggregate principal amount for all series of District Bonds, subject to adjustment as provided in Section 4.7; (iv) Pre-Financing Costs in an amount not exceeding Three Hundred Thousand ($300,000) in total aggregate principal amount for all series District Bonds, subject to adjustment as provided in Section 4.7; (v) Capitalized interest for not more than three years from the date of issuance of the applicable series of District Bonds; (vi) A Reasonably Required Reserve; and (vii) A supplemental reserve fund in an amount not exceeding the maximum annual principal and interest due on District Bonds, to the extent required by existing market conditions at the time of issuance of the applicable series of District Bonds. (c) Unless authorized/approved by the Town in writing, District Bonds shall be issued: (i) with a maturity no longer than twenty-five years from the date of issuance of the applicable series of District Bonds; (ii) as fixed rate bonds with an interest rate not exceeding the Index Rate on the date of issuance of such District Bonds plus 80 basis points; (iii) without the use of any interest rate swap, interest rate cap or collar, or any other derivative product; (iv) as bonds the interest on which is excluded from gross income for federal income tax purposes (“tax-exempt bonds”) unless the District’s bond counsel delivers an opinion to the Town Attorney that the District Bonds may not be issued as tax-exempt bonds under the laws in effect at the time of the proposed issuance of the District Bonds; and (v) to the extent that any District Bonds are sold or placed directly with an investor without being underwritten by an underwriter or investment banker, the District shall first obtain a written certification from an independent financial advisor, approved in writing by the Town Manager, that (1) the interest rate to be borne by such District Bonds does not exceed a reasonable current interest rate, using criteria deemed appropriate by such financial advisor and based upon an analysis of comparable securities; and (2) the structure of any such District Bonds, including without limitation maturities and early redemption provisions is reasonable considering the financial circumstances of the District. (d) Prior to the issuance of any District Bonds, the District shall provide the District Bonds Documents to the Town. The District Bond Documents shall be accompanied by a Plan of Finance. The Town shall be permitted to review the District Bond Documents to confirm compliance with this Agreement, the Service Plan and related documents. The Town will have thirty (30) days after receipt of such District Bond Documents by the Town Attorney and the Town's bond counsel to notify the District in writing if it objects to any provisions set forth in such District Bond Documents setting forth its specific objections. If the Town does not object in writing to the District Bond Documents within such thirty (30) day period, then the Town will be deemed to have consented to the form and substance of such District Bond Documents. If the Town objects in writing to any provisions of the District Bond Documents, the District Bonds shall not be issued until Town approves the District Bond Documents. (e) Unless the Town agrees otherwise in writing, the District Bond Documents shall provide that in each year the Pledged Revenues shall be used as follows: (i) first to pay the District Bond Requirements, (ii) second to pay any other administrative costs related to the District Bonds, including without limitation, payment of rebate consultants and analysts, the reasonable fees and expenses of the PIF Collection Agent, and any rating maintenance fees, and (iii) any remaining Pledged Revenues shall be used to redeem as much principal of the District Bonds as possible in inverse order of maturity or if the District Bonds are not then subject to redemption, shall be irrevocably set aside for redemption of the District Bonds on the earliest redemption date .
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