Rough Draft Agreement - PUD #2 - 4-30-2001

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E. Permits-Prior to the start of any construction,the Developer's Contractor shall apply for and receive all necessary permits from the City and/or government agencies having jurisdiction. F. Construction - The construction, installation and materials shall be in accordance with the plans and specifications approved by the City. G. Insurance - The Developer will cause each person who constructs and installs any Improvement to maintain complete insurance coverage including Workmen's Compensation, Liability and Property Damage. 12. Performance Deposit: For the purposes of assuring to the City that the Improvements will be completed according to the terms of this agreement, and that the Developer will pay all claims for work done and materials and supplies furnished,the Developer has deposited with the City at the time of the execution of this agreement an irrevocable letter of credit in a form satisfactory to the City providing that the City is able to draw upon such letter of credit in its sole discretion to complete the Improvements if the Developer fails to satisfactorily complete the work prior to the completion date specified in Section above. The amount of such deposit is $ per the schedule attached to this document as Exhibit D. The amount of such deposit shall not be reduced before substantial completion of the Improvements. The letter of credit shall expire no sooner than six months after the completion date specified in Section above. 13. Fees and Expenses: The Developer agrees to pay all City fees required per the current City Fee Schedule and further agrees to completely reimburse the City for all the variable additional expenses it incurs in regard to the review and approval of the Improvements including, but not limited to, direct City payroll and overhead, costs, and fees paid to consultants and other professionals. C. Financial Considerations 14. Basis for City Financial Assistance. Because the Senior Housing Building component of the Development meets certain housing goals established by the City of Orono in its Community Management Plan, the City Council has agreed to provide financial assistance to the Developer for the Senior Housing component, via Tax Increment Financing. Under the terms of this agreement and the laws of the State of Minnesota, certain costs to be incurred by the Developer are eligible for TIF reimbursement, and certain additional costs to be incurred by the City in direct relation to the Senior Housing Building component are eligible for TIF reimbursement. 15. City Intent for Senior Housing Building Component. It is the intent of the City of Orono that the Senior Housing Building be used for the purpose of senior housing for the longest practicable period of time,and during that time the building shall be owned and operated by a non-profit corporation. During the 20 year life of the TIF funding as described below,the Developer/Owner will be required to limit the rental price of 20% of the units, and all 62 Page 6 of 14