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best efforts to comply with all statutory requirements. The City. will also provide the Developer an opportunity to review all documentation relative to the creation of the Tax. Increment District so that the Developer can make its own informed determination as to whether the Tax Increment District complies with applicable law. The City does not intend to warrant to Developer that the Tax Increment Districts comply with applicable law. In the event of a challenge to the validity of any Tax Increment District or any action that otherwise seeks to prevent or delay the Developer's proposed development, the Developer and the City will discuss their options and formulate a course of action. ARTICLE VII MORTGAGE FINANCING Section 7.1. Limitation Upon Encumbrance of Propertv. Prior to the completion of a Phase or Sub-Phase of the Minimum Improvements, as determined by the City, neither the Developer nor any successor in interest to the Parcel of the Development Property on which the Phase or Sub-Phase will be built, or any part thereof, shall engage in any financing or any other transaction creating any mortgage or other encumbrance or lien upon the Development Property, other than Permitted Encumbrances, whether by express agreement or operation of law, or suffer any encumbrance or lien to be made on or attach to the Development Property, other than Permitted Encumbrances, except: (a) for the purposes of obtaining funds only to the extent necessary for the acquisition of the Development Property and making the Minimum Improvements (including, but not limited to, labor and materials, equipment, professional fees, real estate taxes, construction interest, organization and other indirect costs of development, costs of constructing the Minimum Improvements, an allowance for contingencies, costs of issuance of any Note issued to fund construction or acquisition of the respective Phase or Sub-Phase, amounts required to fund any Note reserves relating to construction or acquisition of the Phase or Sub-Phase, and amounts required to fund any required escrow accounts); and (b) only upon the prior written approval of the City in accordance with Sections 7.1 and 7.2, which approval shall not be unreasonably withheld or delayed. Section 7.2. Approval of Mortgage. The City shall approve a Mortgage if: (a) the City first receives a copy of all mortgage documents; (b) the mortgage loan, together with other funds available to the Developer, will, in the reasonable judgment of the City, be sufficient to construct the subject Phase or Sub-Phase of the Minimum Improvements; and ( c) the City is not entitled under Section 9.2 to exercise any of the remedies set forth therein as a result of an Event of Default. Section 7.3. Modification for the Benefit of Mortgagees. (b) In order to facilitate the obtaining of financ~ for the construction of the Minimum Improvements, the City agrees 22