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2. The Incentive Compensation shall be two percent (2.00%) of the total <br />capital cost of the end use of the parcel or property sold or developed <br />which is the Development'(s) Capital Cost(s) (the "DCC"). The DCC shall <br />be the total of the following items a. through e: <br />a. The net land sale price paid to Owner plus; <br />b. The proforma building value as presented by Landform net any <br />City of Ramsey of HRA building subsidy provided to developer, <br />except that said value shall not exceed the then current <br />Minnesota Department of Labor and Industry's Building <br />Valuation Data by more than 25% plus; <br />c. The site improvement costs net any City of Ramsey or HRA site <br />subsidy provided to developer ("Subsidy") plus; <br />d. The development soft costs such as engineering, planning <br />architecture, legal fees, any marketable title issues, realtor <br />commissions, finance expenses and special inspections net of <br />any Subsidy. In no event shall the development soft costs <br />exceed 20% of the total of items a. through c. above. <br />e. In all events, the total DCC shall be net of any Subsidy. <br />The DCC is the basis for the Incentive Compensation. However, the <br />parties agree that during the term of this Agreement, unique development <br />scenarios may be presented which will require modification of the <br />Incentive Compensation terms. With that understanding the parties agree <br />to negotiate as necessary modified terms in relation to the Incentive <br />Compensation. <br />3. The Incentive Compensation will be payable at the following stages of a <br />specific development: <br />a. On a monthly basis, Landform shall receive monthly advances on <br />future Incentive Compensation in the amount of $10,000/each. Such <br />draws shall be reimbursed from the proceeds of the Incentive <br />Compensation when earned, and shall be considered minimum <br />compensation for this contract component. However, in the event this <br />Agreement is terminated prior to March 31, 2011, Landform shall <br />receive the said $10,000 monthly advance only for each full month this <br />Agreement is in effect and a prorated amount for any partial month <br />during which this Agreement is in effect. Monthly draws shall <br />terminate once total compensation under this section reaches <br />$120,000. <br />Page 11 <br />