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2. The Incentive Compensation shall be two percent (2 %) of the total capital cost of the end use of the parcel or property sold or developed (the "Development('s) Capital Cost(s) "). The Development's Capital Cost shall be the total dollar amount of the following items a. -d.: Ramsey - 2011 DM Agreement a. The net land sale price paid to Owner plus; b. The proforma building value as presented by Landform, except that said value shall not exceed the then current Minnesota Department of Labor and Industry's Building Valuation Data by more than 25% plus; c. The Site improvement's costs plus; d. The development soft costs such as engineering, planning architecture, legal fees, any marketable title issues, realtor commissions, finance expenses and special inspections. In no event shall the development soft costs exceed 20% of the total of items a. through c. above. The total dollar amount of items a. -d. above is the Development's Capital Cost which is the basis for the Incentive Compensation. However, the parties agree that during the term of this Agreement, unique development scenarios may be presented which will require modification of the Incentive Compensation terms. With that understanding the parties agree to negotiate as necessary modified terms in relation to the Incentive Compensation. 3. The Incentive Compensation will be payable at the following stages of a specific development: a. For the first twelve (12) months of this Agreement and on a monthly basis, Landform shall receive monthly advances on future Incentive Compensation in the amount of $10,000/each. Such draws shall be reimbursed from the proceeds of the Incentive Compensation when earned, and shall be considered minimum compensation for this contract component. However, in the event this Agreement is terminated prior to March 31, 2011, Landform shall receive the said $10,000 monthly advance only for each full month this Agreement is in effect and a prorated amount for any partial month during which this Agreement is in effect. Monthly draws shall terminate once total compensation under this paragraph a. reaches $120,000 within the period of this Agreement. b. b. During the drafting of an HRA Contract, the HRA and Landform shall work to determine the proposed project costs and phasing schedule which shall be used to determine the Incentive Compensation. The Incentive Compensation, once calculated based on this criteria, shall be final on or before the execution of any HRA Contract. Any substantial or fundamental changes to the proposed project, phasing, or terms prior to closing will necessitate reconsideration of the Incentive Compensation. Minor changes will be considered incidental. 8