DEVELOPMENT AGREEMENT “THIS DEVELOPMENT AGREEMENT dated as of March DY, 2010 by and between ROOSEVELT ISLAND OPERATING CORPORATION (RIOC’), & body corporate and politic constituting a political subdivision of the State ‘of New York and a public benefit corporation having an office at 591 Main Street, Roosevelt Island, New vor 10044 and FRANKLIN D, ROOSEVELT FOUR FREEDOMS PARK LLC CFDR LLC"), a New York limited liability company having an address at 147 West 35" Street, Suite 601, New York, New York 10001 WITNE S SETH: WHEREAS, by agreement dated as of February 6, 2009, FDR LLC, a wholly owned subsidiary of Franklin & Bleanor Roosevelt Institute (the “institute’), was Conditionally designated to negotiate with RIOC for the right {o construt the Louis Kahn designed Franklin D. Roosevelt Four Freedoms Park (the “FDR Project’), to be located west re southernmost portion of Roosevelt Island (the “Project Site"), the general boundaries of which are shown on the attached Exhibits A-1, A-2 and A-3; WHEREAS, FDR LLC has been created for the sole purpose of constructing the FDR Project and has no obligations other than those relating thereto; WHEREAS, the EDR Project is to be constructed in up to three (3) phases, as described herein; and WHEREAS, the parties wish to set out their agreement regarding the development of the FDR Project, on the terms and conditions sot forth herein. NOW, THEREFORE, in consideration of Ten and 00/100 Dollars ($10.00) and other good and valuable consideration paid by FDR LLC to RIOC, and the agreements contained herein, the parties covenant and agree as follows: 1. Definitions. For purposes of this Agreement, the terms defined in this Article 1 shall have the following meaning: “Allocation Condit Agreement. fons” shall have the meaning set forth in Article 18 of this City’ shall mean The City of New York, aeting through its Department of Parks and Recreation, “City Allocation” shall have the meaning set forth in Article 18 of this Agreement. “Conditional Designation” shall mean the Conditional Designation Letter dated February 6, 2009 from RIOC to the Institute and FDR LLC with respect fo the FPR Project. sssuisatvironmental Assessment” shail mean the environmental assessment under the New York State Environmental Quality Review Act prepared by Langan Engineering and Environmental Services and dated August 22, 2008, as thereafter amended from time to time. “Bscrow Agreement” shall mean the Escrow Agreement of even date herewith between J.P. Morgan Chase Bank, N.A. and FDR LLC with respect to the escrow of the Private Funds. “Bserowed Funds” shall mean the Private Funds held in an escrow account (f/b/o of FDR LLC) pursuant to the terms of the Escrow Agreement, “Financial Requirements” shall have the meaning set forth in Article 3 of this Agreement, “gunding Agreement” shall have the meaning set forth in Article 18 of this ‘Agreement, a copy of which is attached to this Agreement as Exhibit F. “General Development Plan” shall mean the General Development Plan for Roosevelt Island set forth in Schedule 2 to the Master Lease, prepared by Philip Johnson and John Burgee and providing for the construction of Open Space Areas (as defined in the General Development Plan) on Roosevelt Island, as has been amended, and as may be hereafier amended from time to time, “Governmental Authority (Authorities)” shall mean the United States of America, the State of New York, New York City, and any agency, department, corporation, commission, board, bureau, instrumentality or political subdivision of any of the foregoing, now existing or hereafter created, having or exercising jurisdiction over the Project Site or any part thereof, “Interest Rate” shall mean the Prime Rate plus five percent (5%) per anmum, but in no event in excess of the maximum permissible interest rate then in effect in the State of New York. “Maintenance Plan” shall have the meaning set forth in Article 4 of Agreement, “Master Lease” shall mean the Agreement of Lease of Roosevelt Island by and among New York City, UDC, and UDC’s subsidiary, Welfare Island Development Corporation, also known as Roosevelt Island Development Corporation, dated December 23, 1969, 2s heretofore and hereafter amended, modified or supplemented, and as assigned fo RIOC on July 21, 1988. “Prime Rate” shall mean the rate announced from time to time by Citibank, N.A. or its successors at its principal office as its “base rate.” Any interest payable under this, ‘Agreement with reference to the Prime Rate shall be adjusted on a daily basis, based eosnseanupon the Prime Rate in effect at the time in question, and shall be calculated on the basis, of a 360-day year of twelve thirty-day months, “private Funds” shall mean all funds privately raised and/or obtained by FDR LLC or the Institute (f/b/o FDR LLC) for the construction of the FDR Project, “public Funds” shall mean the RIOC Allocation, together with the City Allocation, each as defined in Section 18 hereof, “Reimbursement Agreement” shall mean the Reimbursement Letter Agreement dated as of January 8, 2009 by and among RIOC, the Institute and FDR LLC regarding, FDR LLC’s obligation to reimburse and indemnify RIOC with respect to the FDR Project. “RIOC Allocation” shall have the meaning set forth in Article 18 of this Agreement. “RIOC Allocation Disbursement Conditions” shall have the meaning sct forth in Scetion 5(i) of this Agreement. “RIOC Consultant shall have the meaning set forth in Section 5(g) of this Agreement, “Stormwater Plan” shall mean the Stormwater Pollution Prevention Plan with respect to Block 1373, Lot 1, Roosevelt Island, New York, prepared for FDR LLC by Langan Enginecring and Environmental Services, Inc., dated November 19, 2009, as may be amended from time to time. “Pradesmen’” (or “tradesmen”) shall mean contractors and subcontractors of every tier supplying materials and/or services in connection with the Project. “UDC” shall mean New York State Urban Development Corporation (now known as the Empire State Development Corporation), its successors and assigns. “Unavoidable Delay” shall mean delays incurred due to (a) strikes, lockouts, work stoppages, slowdowns or other labor disputes, acts of God, unforesecably severe weather conditions, fire, earthquake, landslide, lightning, flood, inability to obtain labor or materials due to causes beyond the reasonable control of a party (a party's failure or refusal to make payments shall not be considered beyond such party’s control), laws, orders, actions or governmental restrictions of any governmental, quasi-governmental, judicial or military authority, enemy or terrorist action, embargoes, blockades, civil ‘commotion, fire, casualty or other similar causes beyond the reasonable control of such party (but not including such party’s insolvency or financial condition), (b) the failure of any utility company to provide and maintain utilities, sorvices, water, sewer lines or power transmission lines to the Project Site which are required for the construction of any Phase of the FDR Project, (c) any unforeseeable subsurface condition at the Project Site ‘ssaiseaWhich shall prevent or require a redesign or change in the construction of, or affect the completion schedule for, any Phase of the FDR Project, or (d) the failure of any constriction manager, tradesman or supplier to furnish labor, services, materials or equipment on the dates agreed to if such failure is caused by any of the reasons enumerated in clauses (a)-(c) above and the party is not reasonably able to obtain substitute labor, services, materials or equipment on the agreed-upon dates, in each case provided such patty shall have notified the other party not later than fourteen (14) days after such party knows or should have known of the occurrence of same and the effects of Which a prudent person in the position of the party asserting such delay could not have reasonably prevented, provided further, however, that if such notice is given later than fourteen (14) days after such party knows or should have known of the occurrence, then if such party subsequently gives such notice then such occurrence will nevertheless be deemed an Unavoidable Delay but only effective ftom and after the date such notice is actually given. 2, EDR Project. FDR LLC shall cause the FDR Project (o be constructed on the Project Site substantially in accordance with the description set forth in Exhibit B attached hereto (the “Project Description”). ‘The FDR Project will be constructed in three (3) separate, sequential phases, which are described in greater detail on Exhibit C attached hereto (each phase being referred to herein as a “Phase” and collectively as the “Phases”; references herein to “Phase One”, “Phase Two” or “Phase Three” shall correspond to the description of the Phases as shown on Exhibit C), Bach Phase shall be designed and constructed so as to be independent of the other Phases, so that the completion of each Phase will result in the eteation of new public space which can be used by the public, even if the following Phases are not constructed. ‘The Phases shall be constructed in sequential order, starting with Phase One. During the periods between construction of the Phases, FDR LLC will endeavor to keep as much of the Project Site open to the public as may be done practically and safely. 3. Financial Req ents. Prior to commencing construction on any Phase of the FDR Project, shail deliver to RIOC the following (which are collectively referred to in this Agreement as the “Pinancial Requirements”): (@) a statement signed by an officer of FDR LLC setting forth the projected date by which FDR LLC intends to commence construction of such Phase; (&) an estimate of the total development cost of such Phase prepared by each of FJ. Soiame Construction Company, Inc. (as FDR LLC’s construction manager, which construction manager has been previously approved by RIOC and retained by FDR LLC to manage such construction) dated no earlier than one (1) month prior to the anticipated commencement date of construction of the Phase in question, including both the hard and soft costs of construction and development of such Phase, which shall be broken down to show all costs. A contingency of not less than 10% of estimated costs shall be included in the estimated total development and construction costs. Costs for each Phase shall include a reasonable estimate of any post-construction restoration which may be required in other areas of the Project Site, Southpoint Park, or essnss1any other part of Roosevelt Island pursuant to the terms hereof which shall be necessary as a result of construction of the FDR Project (but taking into consideration other projects under construction or anticipated for construction), ‘The parties shall use reasonable efforis, acting in good faith, to agree in writing on the scope of post-construction restoration for each Phase, and the deadline for which such restoration is to be completed, provided, however, that (i) the failure of the parties to enter into such an agreement shall hot relieve FDR LLC of the obligation to perform post-construetion restoration as set forth in this Agreement, and (ii) nothing contained in such agreement shall relieve FDR LLC of its obligations under this Agreement to repair any damage resulting from the construction of the FDR Project, which damage is discovered after the execution of such agreement; and (c) pro forma statement or other evidence reasonably satisfactory to RIOC demonstrating that FDR LLC (f) has funds (consisting of the Escrowed Funds and the Public Funds which RIOC is holding or which have been committed in writing with respect to the FDR Project) available for development and construction of the Phase in question, in an amount equal to not less than the estimated cost provided in accordance with clause (b) above, and (ii) at all times will have sufficient Eserowed Funds to be able to pay on-going expenses for the Project in a timely manner. Private Funds sufficient to complete construction of the Phase in question shall be deposited into an escrow account (Gfo/o FDR LLC) and shall serve as the Eserowed Funds to be governed by the terms of the Bscrow Agreement. Notwithstanding the foregoing, so long as the Funding, ‘Agreement is in effect, at no time shall there be less than $500,000 of Eserowed Funds oon deposit in the escrow account (witich shall serve as the "Project Reserve” under the Funding Agreement), until such time as there has been Substantial Completion of Phase 1 (as defined in the Fanding Agreement), or the City otherwise consents {o a lesser amount, (FDR LLC shall not be obligated to eserow its administration and general overhead costs, ‘oxcept to the extent those costs have heen included in the construction budget attached hereto as Exhibit D.) Any excess Private Funds remaining after completion of Phase One of the FDR Project may be allocated to and used by FDR LLC for any subsequent Phase, 4, Maintenance Obligations. Prior to commencing construction on any Phase of the FDR Project, FDR LLC must provide RIOC with a maintenance plan and a long- term capital repair, maintenance and replacement budget, outlining in detail how the FDR Project, or those Phases of the FDR Project which are constructed, will be maintained in perpetuity, together with a binding agreement of a Governmental Authority (other than RIOC) or creditworthy non-governmental entity (o assume such maintenance responsibilities, at no cost to RIOC (the “Maintenance Plan”). The Maintenance Plan shall be subject to RIOC’s prior reasonable review and approval, including any endowments which may be required by the entity performing such maintenance. The Maintenance Plan shall not require the expenditure of any funds or the performance of any work by RIOC in order to maintain the FDR Project. 5. Construction Obligations.(@) Pre-Conditions to Commencement of Construction. In addition to the pre-construction requirements set forth in Articles 3 and 4 above, FDR LLC shall not commence construction on any Phase of the FDR Project until the following conditions have been satisfied: () FDR LLC shall have delivered to RIOC plans and specifications for the relevant Phase, which shall be subject to RIOC's prior approval, which shall not be unreasonably withheld. RIOC shall not unreasonably withhold consent to plans and specifications which are consistent with the plans and other written materials which were submitted to the RIOC’s board of directors prior to its vote on June 25, 2009. FDR LLC will reimburse RIOC for its out-of-pocket expenses in performing Such review. Each of the construction manager and major tradesmen with contracts in excess of $50,000 retained by FDR LIC in conncetion with the FDR Project shall be subject to the reasonable approval of RIOC. Each of the construction manager and tradesmen must satisfy all procurement and other requirements of RIOC, the City of New York (including, without limitation, the Funding Agreement) and any other Governmental Authority with respect to the retention of contractors, including, but not limited to, the Vendex system, RIOC approves of F.J. Sciame Construction Company, Inc, as FDR LLC's construction manager, so long as it otherwise satisfies the conditions set forth in the immediately preceding sentence. In addition to the plans and specifications, FDR LLC shall deliver a construction schedule prepared by its construction manager, showing the estimated length of time needed to complete the Phase in question. (ii) To the extent required, FDR LLC shall have delivered to RIOC copies of all final plans and specifications which have been stamped as approved by the New York City Buildings Department and/or Small Business Services, as applicable (which may only be the plans and specifications which were approved by RIOC). (ii) FDR LLC shall have obtained and paid for all required permits and authotizations of any Governmental Authority, copies of which shall be supplied to RIOC. (iv) FDR LLC shail have delivered to RIOC duplicate original policies or certificates thereof of worker's compensation insurance covering all persons employed in connection with such work, and builder’s all risk and comprehensive general public liability insurance which coverage shall be in such amounts and otherwise Ponsistent with the provision of Article 17 of this Agreement, This coverage shall remain in effect until such Phase of the Project has been completed, () EDR LLC shall have obtained, paid for, and submitted to RIOC payment and performance bonds from each of the construction manager and the tradesmen in the amount of one hundred percent (100%) of the final construction cost (in the aggregate) of the particular Phase, as certified to RIOC in the manner set forth in lAnticle 3 of this Agreement, which bonds shall also cover potential damage to public essussatfacilities. For any contracts which will be paid in whole or in part by the City Allocation, the bonds shall comply with the requirements of the Funding Agreement. (vi) FDR LLC shall have delivered the Financial Requirements ‘and Maintenance Plan, in form reasonably satisfactory to ROC. (vii) PDR LLC shall have collaterally assigned to RIOC all applicable construction contracts relating to the Project, including architectural and engineering contracts, using collateral assignments substantially in the form annexed herefo as Exhibit H. (viii) All contracts for Phase One shall contain a provision allowing FDR LLC to terminate the contract if the City declares a default under the Funding Agreement on the grounds that the contractor or consultant is not a “responsible party", as defined in the Funding Agreement. (©) Commencement and Proseeution. FDR LLC shall commence construction of the Phase in question no later than three (3) months after having satisfied the pre-construction conditions set forth in this Agreement for such Phase, subject to Unavoidable Delays, and construction of the Phase shall be prosecuted with all reasonable diligence and without interruption, subject to Unavoidable Delays, and completed in a good and workmanlike manner, in accordance with the plans and specifications approved by RIOC. (©) Completion, Subject to Unavoidable Delay, FDR LLC shall substantially complete each Phase within six (6) months of the completion date originally estimated by FDR LLC’s construction manager for such Phase, (@ — Consttuetion Conditions. FDR LLC agrees that, throughout the course of construction at the Project Site, FOR LLC shall: () maintain @ reasonably clean, securely enclosed and adequately lit Project Site, To the extent any portion of the Project Site which is not Under construction can be practically and safely used by the public during the construction of any Phase, or in between the construction of the various phases, such portions will be made available for public use; Gi) store all equipment and park all construction vehicles (other than vehicles of construction workers and employees at the Project Site who may park as designated in subparagraph (vii) below) within the Project Site; provided, however, FDR LLC may permit certain parties to park in other areas if permitted in writing by RIOC; (iii) refi and restore as soon as feasible any property which shall remain but which FDR LLC has excavated or otherwise disturbed; sssaisitt