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F. Based on the feasibility and financial analysis, however, the projected cash flows <br />which the golf course is projected to generate will be insufficient to purchase the Golf <br />Course Property and to meet the debt service and operating costs; accordingly, the City <br />and Landowners have developed a method, described in this MOU, to enable the City to <br />purchase and develop the Golf Course Property, and to extend utilities to serve it. <br /> <br /> NOW, THEREFORE, in consideration of the mutual promises expressed herein, <br />the parties agree as follows: <br /> <br />Subject to this MOU, City shall acquire the Golf Course Property from <br />Landowners and Landowners shall retain ownership of the Residential Property <br />(which shall be subdivided into a total of 37 residential lots), as follows: <br /> <br />(a) <br /> <br />City shall permit the development of 37 single family residential lots, <br />including three lots for three existing and replacement homes, on the <br />Residential Property (which is being retained by Landowners at all points <br />in time). <br /> <br />(b) <br /> <br />City shall pay the Landowners six hundred and sixty-two thousand five <br />hundred dollars ($662,500) ("Payment"). Landowners may individually <br />elect to receive their share of the Payment as follows: <br /> <br />(i) Paid in cash following the close of escrow for the Golf Course <br />Property ~,,,~ .... ~,.,~ ,..,.,,, <br /> <br />(ii) Credited against designated improvements to specific Lots; <br /> <br />(iii) Credited against the Landowners' Pro Rata Share of Infrastructure (as <br />defined in Section 1 .(c), below); or <br /> <br />(iv) Any combination of the above Payment options. <br /> <br />At least fifteen days prior to close of escrow for the Golf Course Property, <br />individual Landowners shall provide the City written notice of his or her <br />election as to Payment. <br /> <br />(c) <br /> <br />The Landowners shall be obligated to pay for the pro rata share of design <br />and construction costs allocable to the Residential Property ("Pro Rata <br />Share of Infrastructure") which are the actual costs to extend the water, <br />sanitary sewer systems, utilities and roadway improvements needed to <br />serve the Lots from the utility companies' main lines, and the City's water <br />mains, sewer trunk lines and roadway on the Golf Course Property based <br />upon the formula approved by the City Council, excepting therefrom any <br /> <br />Page 2 of 8 <br /> <br /> <br />