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

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(c) The Development Property is zoned for purposes which include the Development as proposed (NOT COMPLETE). The city has issued all necessary residential planned unit development(RPUD)approval(NOT COMPLETE),and plat approval of Orono Woods Addition (NOT COMPLETE). (d) The City has duly taken such steps as it is required to take to approve the TIF District (NOT COMPLETE)and TIF Plan pursuant to and in accordance with the TIF Act and the City covenants to discharge such future obligation. The City acknowledges that,as a housing TIF District,the TIF District is subject to specific requirements and limitation under the TIF Act, including the requirements that: 1. The increment be expended in accordance with the TIF Plan (Section 469.176, Subdivision 4)and solely to finance the cost of"housing projects", as defined in Section 469.174, Subdivision 11, which may include the cost of public improvements directly related to the housing projects and allocated administrative expenses (469.176, Subdivision 4d) 2. The income limitations under Section 469.1761,the violation of which may limit the TIF District's duration to that of an economic development district (Section 469.1761, Subdivision 4), and (3) the disqualification of a project if the fair market value of its improvements which are constructed for uses other than low and moderate income housing exceeds 20% of the total fair market value of the planned improvements in the development plan or agreement (Section 469.174, Subdivision 11). Compliance with some of these restrictions is within the control of the City and compliance with some of these restrictions is within the control of the Developer and/or Owner. 3. The City of Orono acknowledges that the"deferred improvement costs"shall be in addition to the requirements of the"TIF Act"by an additional 20 years. Such costs as identified in Section shall be deferred and no payment shall be made to the City of Orono by the Owner if the conditions the housing remain in ownership of the"non-profit operator"and the housing be limited to senior rental units for persons aged 62 and older. At such time that said requirements are no longer met,the deferred improvement costs plus interest accrued at the annual rate of 5% compounded annually shall be repaid immediately to the City of Orono. (e) The City covenants not to take any actions,including without limitation any approval of the expenditure by the City of increment from the TIF District not applied toward payment of the TIF Note, which would violate the TIF Act, invalidate the TIF District in whole or in part or adversely affect the tax increment payment obligations to the Developer under this Agreement or the TIF Note. Nothing in this subsection shall diminish the Developer's obligations under this Agreement or create any liability of the City respecting an Event of Default. The City shall promptly give the Developer written notice and copy of any lawsuit or similar proceeding,or any threat Page 9 of 14