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Guaranty. The Developer agrees that possession of this Agreement by the City shall be conclusive evidence of this Guaranty. Section 4.3 Reimbursement: Guaranty Note. The City shall reimburse the Developer for the amounts paid under the Guaranty pursuant to Section 4.2 through the issuance of the City's Guaranty Note in substantially the form attached to this Agreement as Exhibit F, subject to the following conditions: (1) The Guaranty Note shall be dated, issued and delivered when the Developer makes the first payment to the City pursuant to the Guaranty. The principal amount of the Guaranty Note as originally issued shall be indicated on the Principal Ledger attached to the Guaranty Note. (2) The principal amount of the Guaranty Note shall be increased as the Developer makes each payment to the City required under the Guaranty. The amount of the increase in the principal amount of the Guaranty Note shall be indicated by the City on the Principal Ledger attached to the Note. (3) The unpaid principal amount of the Guaranty Note shall bear simple, non- compounding interest from its date of issuance, at 4.00% per annum. Interest shall be computed on the basis of a 360 day year consisting of twelve (12) 30 -day months. (4) The principal amount of the Note and the interest thereon shall be payable solely from the Pledged Tax Increments. (5) On each Guaranty Note Payment Date and subject to the provisions of the Guaranty Note, the City shall pay, against the principal and interest outstanding on the Guaranty Note, Pledged Tax Increments received by the City during the preceding 12 months. All such payments shall be applied first to accrued interest and then to reduce the principal of the Guaranty Note. (6) The Guaranty Note shall be a special and limited obligation of the City and not a general obligation of the City, and only Pledged Tax Increments shall be used to pay the principal and interest on the Guaranty Note. If, on any Guaranty Note Payment Date, the Pledged Tax Increments for the payment of the accrued and unpaid interest on the Guaranty Note are insufficient for such purposes, the difference shall be carried forward, without interest accruing thereon, and shall be paid if and to the extent that on a future Guaranty Note Payment Date there are Pledged Tax Increments in excess of the amounts needed to pay the accrued interest then due on the Guaranty Note. (7) The City's obligation to make payments on the Guaranty Note on any Guaranty Note Payment Date or any date thereafter shall be conditioned upon the requirement that upon the requirement that there shall not at that time be an Event of Default that has occurred and is continuing under this Agreement. (8) The Guaranty Note shall be governed by and payable pursuant to the additional terms thereof, as set forth in Exhibit F. In the event of any conflict between the terms of the Note and the terms of this Section 4.3, the terms of the Guaranty Note shall govern. The 2139197v6 Dooit 2561638 \9 16