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• (a) The Subsidy is being provided for the public purposes of developing redeveloping property containing substandard buildings and improvements. The Subsidy is necessary to offset the high costs associated with acquiring the Multifamily Development Property and preparing it for development. Absent the Subsidy, redevelopment of the Multifamily Development Property would not be economically feasible. (b) The Subsidy is being financed with tax increment generated from the City's Tax Increment Financing District No. 1-3, a redevelopment tax increment district. ARTICLE III Default Section 3.1. Defaults Defined. It shall be a default under this Agreement if the Multifamily Developer fails to comply with any term or provision of this Agreement, and fails to cure such failure within thirty (30) days after written notice to the Multifamily Developer of the default, but only if the default has not been cured within said thirty (30) days. Section 3.2. Remedies on Default. The parties agree that the Subsidy is a forgivable loan, repayable only if the Multifamily Developer fails to fulfill its obligations under section 2.3 • of this Agreement. Upon the occurrence of a failure to continue operations as required by Section 2.3 the Multifamily Developer shall repay to the City upon written demand from the City a "pro rata share" of the Subsidy and interest on the Subsidy at the implicit price deflator as defined in Minnesota Statutes, Section 275.50, subd. 2, accrued from the Benefit Date. The term "pro rata share" means sixty (60) less the number of months of operation (where any month in which the Improvements are in operation for at least fifteen (15) days constitutes a month of operation), commencing on the Benefit Date and ending with the date the Multifamily Developer ceases operation as reasonably determined by the City, divided by 60. Section 3.3. Costs of Enforcement. Whenever any default occurs under this Agreement and the City shall employ attorneys or incur other expenses for the collection of payments due or for the enforcement of performance or observance of any obligation or agreement on the part of the Multifamily Developer under this Agreement, the Multifamily Developer shall be liable to the City for the reasonable fees of such attorneys and such other expenses so incurred by the City. • 9