2A, Presbyterian Homes Tax Increment Financing Discussion

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3. Conveyance of Triangle Parcel. Developer must convey one parcel in the triangle south of Lake Johanna Blvd(the "Triangle Parcel")to the City, for$1.00. Site must be cleared and seeded. Closing is contingent on typical title and environmental reviews by the City. Closing must occur by June 30, 2012. 4. Tax Increment Assistance. City will reimburse qualified costs through issuance of a "pay as you go" note (the "TIF Note") in maximum principal amount of$1,115,000. Note will be paid with 90% [subject to discussion; see separate memo] of the tax increment from Minimum Improvements for 12 years (starting in 2014), with =- interest at 6.25%, accrued from delivery of the TIF Note. TIF Note will be issued and delivered when Developer has submitted evidence that it has spent$1,115,000 in qualified costs. Default under the Contract (or under the separate city Development Agreement) will allow the City to withhold tax increment payments under the TIF Note until default is cured. 5. Lookback. The Contract will include a mechanism for comparing projected costs with final actual costs, and potentially reducing the amount of the TIF Note if there are sufficient cost savings. 6. City Administrative Costs. Developer deposits $10,000 to pay City's out of pocket costs (legal, financial advisor, etc). Developer obligated to pay all such costs (even if more than $10,000) through approval and execution of the Contract. After that, City will pay ongoing administrative costs from its withheld share of tax increment. 7. Conduit Bond Financing. City will issue housing revenue bonds (so-called conduit bonds), in one or more series over time, to finance construction of the Minimum Improvements. Such bonds will be issued in accordance with the City's usual policies regarding conduit bonds (including issuer fees). 378995v2 SJB AR200-10 2