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4 r <br /> Revised July 7, 1997 <br /> Disbursement Agreement for Lakeland Hills <br /> City of Centerville, Minnesota <br /> THIS AGREEMENT is made and entered into this day of , 1997, by and between <br /> Royal Oaks Realty, a Minnesota Corporation (hereinafter referred to as "Developer ") and the City <br /> of Centerville, a Minnesota Municipal Corporation (hereinafter referred to as "City "). <br /> WHEREAS, the Developer is the owner of real property described in Exhibit A attached hereto, <br /> also known as Lakeland Hills (hereinafter referred to as "Subdivision "); and <br /> WHEREAS, the Developer and the City anticipate entering into a Development Agreement at the <br /> time of final plat approval concerning the construction of certain improvements to the Subdivision <br /> as described in the proposed Development Agreement (which improvements are hereinafter <br /> referred to as "Developer Improvements "); and <br /> WHEREAS, on the day of , 1997, the Developer and the Lender made and entered <br /> into a Loan Agreement wherein the Lender agreed to loan the sum of $ to the <br /> Developer for the purpose of constructing the Developer Improvements and other related <br /> development costs; and <br /> WHEREAS, on the _ day of , 1997, the Developer, as maker, executed and <br /> delivered to the Lender, as payee, a promissory note in the sum of $ with interest <br /> thereon, payable as described herein, and said note was secured by a Mortgage executed and <br /> delivered by Developer, as Mortgagor, to Lender, as Mortgagee, encumbering the Subdivision; <br /> and <br /> WHEREAS, the parties desire to establish procedures concerning the disbursement of funds under <br /> the Loan Agreement. <br /> NOW THEREFORE, in consideration of the mutual covenants herein and other good and valuable <br /> consideration, the receipt and adequacy of which is hereby acknowledged, the parties agree as <br /> follows: <br /> 1. SECURITY. The City hereby accepts this Disbursement Agreement as Security for the <br /> construction of the Developer Improvements under the Development Agreement. The liability <br /> of the Lender to the City under this Disbursement Agreement shall automatically be reduced to <br /> the extent of advances made by the Lender under the Loan Agreement for the Developer <br /> Improvements, provided that said advances are approved in writing by the City. In the event of <br /> improper disbursement, the Developer shall be liable to the City for any damages arising from any <br /> improper disbursement up to and including the amount of such improper disbursement. <br /> 2. CERTIFICATION BY ENGINEER. The City Engineer shall certify in writing to the <br /> Developer, the Lender and the City the progress of construction of the Developer Improvements <br /> at the conclusion of each stage of construction. Such certification shall set forth the quality of <br /> workmanship, the stage of construction according to the plans and specifications, the dollar <br /> 260/083- 2010.feb Page 1 <br />