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