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Mike Mornson - Northwest Quadrant Redevelopment September 17,2003 Page 7 redevelopment costs. The Incentive Fee will not be payable to the Redeveloper if he is in default under the Redevelopment Contract. k. Grants. The City and HRA will provide the Redeveloper with the $586,000 grant it received from the Metropolitan Council for the Asbestos Abatement at Apache Plaza. The City and HRA will use it's best efforts to obtain LCDA and Tax Base Revitalization grant funding and any other available funding from Metropolitan, Sate and Fedeml Sources. 1. Master Redeveloper Fee. The Master Redeveloper will be paid a $1 million fee for the Phase I development. The fee will be paid as follows: Rental Housing Sale: Commercial Sale: For Sale Housing Sale: $500,000 $300,000 $200,000 The Redeveloper will be paid at the time of the closing of the land sale to each project element. At the land sale closing, one-half of the fee will be paid to the Developer and one- half of the fee shall be deposited with the City/HRA, until the City/HRA has received $250,000 as security against defaults and for Phase II of the project. The City/HRA may use this $250,000 to fund public redevelopment costs on an interim basis until payable to the Redeveloper. No interest shall be paid by the City/HRA on this fee. If the Redeveloper defaults in any fashion of the Redevelopment contract, all Redeveloper Fee Hold Back shall be forfeited to the City/HRA. The Redeveloper shall be paid hack the Hold Back Fee upon the earlier to occur of the following: a City/HRA decision not to proceed with Phase II, a determination by the City/HRA to proceed with Phase II with a developer other than Redeveloper or as follows: $125,000 upon commencement of construction ofthe Phase IIA and $125,000 upon commencement of the Construction of Phase lIB by the Redeveloper. m. Default. In the event that the Redeveloper fails to commence an Element of the Project by the default dates set forth in the chart on page 2 of this memorandum, the City and HRA may terminate its obligations under the Redevelopment Contract as regards that Element of the Project. Upon any tennination, Tax Increment from portions of the Project, which have not been commenced, shall, at the election of the City and HRA, no longer be pledged and available to repayment of any "pay as you go" tax increment. As part of the underwriting process, the parties and the underwriters, shall establish the terms of any Tax Increment obligations to both recognize this provision and allow effective issuance of the debt. Tax Increment from completed and under construction Elements of the Project shall remain available for outstanding Tax Increment debt. A default shall not prevent refinancing with Tax Exempt Take-out Debt on completed Elements of the Project. n. Assignment. The Redeveloper may create and assign its development rights and the right to enter into the Redevelopment Contract to a single purpose entity to undertake the Project, without the consent of the City and HRA, provided Len Pratt and John Ordway continue to hold a majority voting interest in the new entity. The Redeveloper may thereafter assign portions of the rights and obligations under the Redevelopment Contract to the Commercial, Rental and For Sale Developers, with the consent of the City and HRA, which shall not be unreasonably withheld.