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12 months of 30 days each. Accrued but unpaid interest will be added to the principal balance of each Tax Increment Note semi-annually on February 1 and August 1 of each year. (d) All Tax Increment Notes shall be issued on a parity basis. The City will make payments on account of each Tax Increment Note on February 1 and August 1 of each year after each receipt of Tax Increment. The amount of Tax Increment available to pay each Tax Increment Note shall equal the Tax Increment, less the amount of Tax Increment applied to pay obligations senior in right to payment to such Note as provided in Section 4.1 O. The Tax Increment applied to payment of the Tax Increment Notes will first pay accrued but unpaid interest thereon and then reduce the outstanding principal balance. (e) The source of payment of the principal and interest on Tax Increment Notes shall be-'limited to Tax Increment. The Tax Increment Notes shall not be a general obligation of the City, the State or any political subdivision. (f) Subject to Section 4.8(b) and (c), the City will issue any Tax Increment Note issued on the Reconciliation Date on a tax exempt basis if (i) the City approves issuance of the Tax Increment Note on a tax-exempt basis, (ii) the City receives an opinion from Bond Counsel that, upon the issuance of such obligation, interest on such Tax Increment Note will not be includable in gross income for federal income tax purposes, (iii) the Parties agree on an adjustment to the interest rate set forth in subparagraph (c) above to reflect the Note's tax-exempt status, and (iv) the Redeveloper shall pay costs of issuance, underwriter's discount, debt service reserves, capitalized interest and other items which reduce Note proceeds available to the Project. (g) If, on the Reconciliation Date, the Redeveloper Return on the Project is found to exceed that permitted by Section 4.4, the principal amount of one or more outstanding Tax Increment Notes (in the order in which they were issued) shall be reduced in the amount of the excess tax increment financing assistance provided by the City. Section 4.7. Tax Increment Bonds. (a) The City agrees to issue one or more series of Tax Increment Bonds in the fourth quarter of each year with respect to Minimum Improvements completed by December 31 of the prior year, on such terms and conditions as are then availab1e in the public marketplace, but in an amount not to exceed that amount: (1) required to refund and replace outstanding Tax Increment Notes and to pay Eligible Project Costs which have been certified by the City pursuant to Section 4.3 and have not already been, and are not expected to be, reimbursed or paid with other Project Revenues, and (2) which will not cause the Redeveloper Return to exceed (i) twelve and one- half percent (12.5%). The City will issue Tax Increment Bonds on a tax exempt basis if the City receives an opinion from Bond Counsel that, upon the issuance of such obligations, interest on such Tax Increment Bonds will not be includable in gross income for federal income tax purposes. 20