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Summary of Development Agreement for the City Council In the Development Agreement the City represents and warrants that it has the power to execute the Development Agreement and to perform its obligations under the Development Agreement and that the contemplated development conforms with the City's Development Program for Development District No. 1 _ Under Article VI, the Development Agreement obligates the City to pay F & C Ramsey, LLC ("F & C") up to $2,500,000.00 of Tax Increments together with interest thereon at the rate of 6.25% per annum on a "pay as you go" basis pursuant to the TIF Note attached to the Development Agreement as Exhibit B; provided, however, the City is not obligated to issue the TIF Note until after F & C repays the approximately $6.825 loan ("Loan No. 2") the HRA makes to F & C when and as that loan is due. In the Development Agreement F & C represents and warrants to the City (and the HRA) that F & C would not undertake the Project and that the Project would not be economically feasible without the assistance provided in the Development Agreement. F & C agrees to purchase the Development Property pursuant to the terms of the Purchase Agreement. F & C agrees to submit construction plans for the Project (a 230 unit, four story apartment building) to the City for approval, although the City's approval rights for purposes of the Development Agreement are limited. The Developer must commence construction of the Project within sixty (60) days after the date the HRA and the Developer close on the Developer's purchase of the Development Property from the HRA pursuant to the Purchase Agreement, and Developer must substantially complete construction of the Project on or before the date two years after the Commencement Date, subject to delays resulting from force majeure. The Development Agreement obligates F & C to execute an Assessment Agreement that establishes a minimum value for the Project for purposes of real estate taxation. In Section 11.4 of the Development Agreement, Developer covenants and agrees that so long as the Development Agreement is in effect, Developer will lease not less than Fifty percent (50%) of the apartment units in the Project to tenants whose family income is equal to or less than one hundred and thirty percent (130%) of the median family income as established by the United States Department of Housing and Urban Development for Anoka County. In Section 12.1 of the Development Agreement the Developer agrees to defend the City, the HRA, their governing body, officers, agents and employees and to hold such parties harmless from and indemnify such parties against third party claims arising out of the actions or inactions of the Developer pursuant to the Development Agreement. If F & C defaults, the City may terminate the Development Agreement, cancel and terminate the TIF Note and exercise any other legal or equitable rights or remedies. All parties obligations under the Development Agreement are subject to each parties performance of its obligations under the Purchase Agreement and if the Purchase Agreement is terminated for any reason, the Development Agreement terminates. 3027624v4 09/22/11