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7 516911v4 JAE MU205-47 ARTICLE III Property Acquisition; Public Development Costs Section 3.1. Status of the Development Property. The Developer has entered into the Real Estate Option Agreement with the City and the Authority to acquire the Tax-Forfeited Property. The Developer has entered into a purchase agreement to purchase the Additional Property. Section 3.2. Contingencies. The fulfillment of the obligations of each party hereunder is strictly contingent upon the conveyance by the Authority of the Tax-Forfeited Property to the Developer. In the event that the Tax-Forfeited Property is not acquired by the Authority and then conveyed to the Developer, this Agreement shall terminate without any further action required by any party hereto. Section 3.3. Environmental Conditions. (a) The Developer acknowledges that the Authority makes no representations or warranties as to the condition of the soils on the Development Property or the fitness of the Development Property for construction of the Minimum Improvements or any other purpose for which the Developer may make use of such property, and that the assistance provided to the Developer under this Agreement neither implies any responsibility by the Authority for any contamination of the Development Property or poor soil conditions nor imposes any obligation on such parties to participate in any cleanup of the Development Property or correction of any soil problems (other than the financing described in this Agreement). (b) Without limiting its obligations under Section 8.3 hereof, the Developer further agrees that it will indemnify, defend, and hold harmless the Authority and its governing body members, officers, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants existing on or in the Development Property, unless and to the extent that such hazardous wastes or pollutants are present as a result of the actions or omissions of the indemnitees. Nothing in this section will be construed to limit or affect any limitations on liability of the Authority under State or federal law, including without limitation Minnesota Statutes, Sections 466.04 and 604.02. Section 3.4. Acquisition of Tax-Forfeited Property. Pursuant to the terms of the Real Estate Option Agreement, the Authority will acquire the Tax-Forfeited Property with funds received from the Developer. If the Authority is not reimbursed by the Developer for all reasonable costs related to the acquisition of the Tax-Forfeited Property, the Authority will reimburse itself for any reimbursed costs from Available Tax Increment. Such unreimbursed costs will be paid prior to any payments made on the TIF Note. Section 3.5. [Reserved] Section 3.6. Issuance of Pay-As-You-Go TIF Note. (a) In order to make construction of the Minimum Improvements financially feasible, the Authority will reimburse the Developer for a portion of the Public Development Costs incurred by the Developer in the maximum amount of $546,000. To reimburse the Public Development Costs incurred by the Developer, the Authority will issue and the Developer will purchase the TIF Note in the principal amount of $546,000 in substantially the form set forth in EXHIBIT B attached hereto. The Authority and the Developer agree that the consideration from the Developer for the purchase of the TIF Note will