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207 ARTICLE III 208 209 UNDERTAKINGS BY DEVELOPER AND CITY 210 Section 3.1 Costs of the Project and Legal and Administrative Expenses. 211 (1) The costs of the Project shall be paid by the Developer. The City shall reimburse 212 the Developer for $,935,005 as may be adjusted in the last sentence of this subparagraph, the 213 "Reimbursement Amount") of the costs of constructing the Project actually incurred and paid by 214 the Developer, as further provided in Section 3.2 hereof The parties currently expect the 215 Developer to monetize the TIF Note by pledging it to the first-mortgage lender for the Project for 216 the purpose of increasing the principal amount of the first-mortgage loan. To the extent 217 necessary at the time of closing the construction loan, the Developer will defer a portion of its 218 developer fee to monetize any portion of the TIF Note not monetized by the first-mortgage 219 lender. If there are sufficient sources of funds such that it is not necessary for the Developer to 220 defer any of its developer fee at the time of closing the permanent loan, the Reimbursement 221 Amount will be reduced to the level needed to fully fund the Project but in no event below the 222 amount monetized by the first-mortgage lender. 223 (2) The Developer has deposited with the City the sum of $,5,000 to reimburse the 224 City for its actual out of pocket Legal and Administrative Expenses and any excess will be 225 returned to the Developer. The Legal and Administrative Expenses shall by paid by the City 226 from said Developer's deposit. If the City determines said deposit to be inadequate, the 227 Developer shall provide additional funds to be escrowed or to pay Legal and Administrative 228 expenses when due. 229 Section 3.2 Reimbursement.- TIF Note. The City shall pay the Reimbursement 230 Amount through the issuance of the City's TIF Note in substantially the form attached to this 231 Agreement as Exhibit B, subject to the following conditions.- 232 (1) The TIF Note shall be dated, issued and delivered when the Developer shall have 233 demonstrated in writing to the reasonable satisfaction of the City that the construction of the 234 Project has been completed and that the Developer has incurred and paid the costs of the 235 construction of the Project, as described in and limited by Section 3.1 and shall have submitted 236 paid invoices for the costs of construction of the Project in an amount not less than the 237 Reimbursement Amount. 238 (2) The unpaid principal amount of the TIF Note shall bear simple, non-compounding 239 interest from the date of issuance of the TIF Note,, at 4.25% per annum. Interest shall be 24O computed on the basis of a 360 day year consisting of twelve (12) 30-day months. 241 (3) The principal amount of the TIF Note and the interest thereon shall be payable 242 solely from the Tax Increments. 243 (4) The payment dates of the TIF Note shall be the Note Payment Dates. On each 244 Note Payment Date and subject to the provisions of the TIF Note, the City shall pay, against the 245 principal and interest outstanding on the TIF Note, the Tax Increments received by the City r0i 3873204v2