05.02 - Tax Increment Financing Project - Lonesome Cottage

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ARTICLE III. UNDERTAKINGS BY DEVELOPER AND CITY Section 3.1 Project and Development Property and Payment of Costs (1) The parties agree that the acquisition of the Development Property is essential to the successful completion of the Project. The acquisition of the Development Property shall be financed, in part, by the City with the proceeds of the Tax Increment Note. (2) The Developer will purchase the Development Property from City pursuant to the Purchase Agreement. (3) The Developer will cause the Project to be installed in accordance with the terms of this Agreement, the Development Program, the Tax Increment Financing Plan and all applicable local, state and federal laws and regulations (including, but not limited to, environmental, zoning, energy conservation, building code and public health laws and regulations). (4) The Developer will use its best efforts to obtain, or cause to be obtained, in a timely manner, all required permits, licenses and approvals, including a conditional use permit for outside storage, and will meet, in a timely manner, all requirements of all applicable local, state, and federal laws and regulations which must be obtained or met before the Project may be lawfully constructed Section 3.2 Reimbursement: Tax Increment Note. The City shall its Tax Increment Note to reimburse the Developer for a portion of the cost of the Development Property in substantially the form attached to this Agreement as Exhibit B, subject to the following conditions: (1) The Tax Increment Note shall be dated, issued and delivered when the Developer shall have demonstrated in writing to the reasonable satisfaction of the City that the construction of the Project has been completed. (2) The unpaid principal amount of the Tax Increment Note shall bear simple, non- compounding interest from the date of issuance of the Tax Increment Note, at 6.00%per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30-day months. (3) The principal amount of the Tax Increment Note and the interest thereon shall be payable solely from the Tax Increments. (4) On each TIF Note Payment Date and subject to the provisions of the Tax Increment Note, the City shall pay, against the principal and interest outstanding on the Tax Increment Note, Tax Increments received by the City during the preceding 6 months. All such payments shall be applied first to accrued interest and then to reduce the principal of the Tax Increment Note. 2055837v2 7