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C. Contractors — The Developer shall select, retain and supervise the Contractor(s) responsible for the cgnstruction of the Improvements. The City reserves the right to require satisfactory proof of successful experience and adequate financial status of any such contractor. Where required by City ordinance, the contractor shall first obtain a license from the City. D. Pre -Construction Conference —Prior to the start of any construction, the Developer and the Developer's contractor shall meet with the responsible City official to review construction plans and schedules. E. Permits --Prior to tea of any construction, the Developer's contractor shall apply for and receive all necessary permits from the City and/or government agencies having jurisdiction. I 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 Improvements to maintain complete insurance coverage including Workmen's Compensation, Liability and Property Damage. 5. Performance Security. 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 or its general contractor will deposit with the City prior to issuance of site grading and building permits an irrevocable Letter of Credit (LOC) from a local (Twin Cities area) financial institution 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 Four (4) above. Further, if the required Improvements are not completed at least 30 days prior to the expiration of the LOC, the City may also draw on the LOC. If the security is drawn down, the draw shall be used to cure the default. The amount of the LOC shall be 150% of the estimated Improvements cost. The estimated Improvements cost is $165,915.00 per the City Engineer's estimate attached hereto as Exhibit A; therefore, the LOC amount shall be $248,873.00. As substantial elements of the Improvements are completed and approved by the City Engineer, the City will authorize reduction of the LOC in an amount equal to 150% of the cost estimate for that phase of the Improvements deemed completed, but in not case shall the LOC be reducedlto a point less than 10% of the original amount until all Improvements are complete and accepted by the City. The LOC t Page 3 of 7 r t Initials of Developer. Initials of City Clerk