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Kurt Ulrich COR Apartments - Development Proposal and Terms of Development Agreement and Other Obligations December 14, 2010 Page 5 e. Limitations on Disbursement. The City is not required to disburse any proceeds to the Developer if they do not commence construction by June 30, 2011 (loan agreement terminates). The City will only pay out proceeds of the loan to the Developer after they have actually incurred the costs and submitted proof of payment. The Developer will not be reimbursed for eligible costs that are reimbursed by the $2 million PAYGO TIF Note or for costs that are not expended by December 31, 2011. 3. Miscellaneous. a. Payment of Administrative Expenses. Costs associated with the creation of TIF District #14, Spending Plan for TIF District 1 and 2, all agreements related to this development and the administrative fee paid to Landform, will be paid from TIF District #1 and #2. The HRA and Citv will set up an interfund loan for an amount not to exceed $500,000 from this TIF District and will repay itself from TIF generated from TIF District # 14, when such increment is available. The interfund loan will carry an interest rate of four (4) percent. b. Development Fees. Since the HRA currently owns the property, they are required to pay the various fees associated with platting the property. These fees are currently estimated to be approximately $2,443,200. The HRA will be setting up an interfund loan from TIF District 2 to pay for these fees. TIF District 2 will be repaid from TIF generated from various projects within the new TIF District. c. Assistance For Commercial Space. If after twelve (12) months from receiving the Certificate of Occupancy for the commercial space the Developer has not been able to lease all or a portion of the space to a third party, the HRA will provide assistance to the Developer. The HRA will provide the Developer up to $16 sq/ft annually, for up to a three year period, for space that has not been leased by a third party (up to $144,000 maximum). d. Contingency For Rail Stop. At any time on or before January 15, 2011, the City or Developer may terminate the development agreement by written notice if they are not comfortable that the City will secure a North Star Commuter Rail Stop and complete construction of the Rail Stop on or before July 1, 2012. e. Sale or Assignment. The Developer is precluded from selling its development rights to the project or the property, development agreement or TIF Note prior to issuance of a Certificate of Occupancy (CO) on the project. The Developer can only sell or transfer its rights upon written approval from the City, which approval can be granted, withheld or conditioned solely at the Citv's discretion. f. Events of Default. The following issues constitute an event of default: i. Developer's default in the performance of one or more of their obligations under the Purchase Agreement. ii. Failure of the Developer to construct the minimum improvements. iii. Developer default in the timely payment of any amounts due under the City Loan Agreement or the City Note.