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• TAX INCREMENT PLEDGE AGREEMENT This Tax Increment Pledge Agreement(the"Agreement")is dated as of November 1,2000; is by and between the City of Elk River, Minnesota (the "City"), and the Elk River Economic Development Authority (the "EDA"); and provides as follows: WHEREAS, the City Council has adopted or is expected to adopt a certain resolution(the "Bond Resolution") awarding the sale of the City's $510,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2000D, dated November 1, 2000 (the "Bonds"), to provide refinancing for certain public redevelopment costs respecting Tax Increment Financing District Nos. 6 and 7, respectively; and WHEREAS, to provide funds sufficient for the timely payment of the debt service on the Bonds, it is necessary for the EDA and the City to enter into this Agreement; and WHEREAS,each capitalized term which is used but not otherwise defined in this Agreement shall have the meaning given to that term in the Bond Resolution: NOW,THEREFORE,in consideration of the covenants and agreements hereof between the City and the EDA,and pursuant to Minnesota Statutes, Section 469.178, Subdivision 2,the City and • the EDA hereby agree as follows: 1. In order to pay the principal of and interest on the Bonds, when due, the EDA hereby pledges to the City,for deposit in the Debt Service Account established by the Bond Resolution for the payment of the Bonds,and the EDA shall pay to the City,Available Tax Increments(hereinafter defined);provided that the amounts thereof payable hereunder shall not in any year exceed amounts necessary, together with other funds available for such purposes in said Debt Service Account, to pay the principal of and interest on the Bonds,when due. As used in this Agreement, "Available Tax Increments" means tax increments that are derived from Tax Increment Financing District Nos. 6 and 7 within Development District No. 1 which are available for such purposes pursuant to applicable law; provided that the foregoing pledges and descriptions of Available Tax Increments are further made subject and junior in lien to all unpaid pledges or other outstanding commitments heretofore made for such tax increments. In discharging its obligations under this Agreement, the EDA expressly reserves the rights(1)to pledge or otherwise dedicate the Available Tax Increments to purposes other than the discharge of the obligations described above upon a finding by the EDA that the estimated Available Tax Increments then remaining will be sufficient from year to year for such purposes, and(2)to satisfy its obligations hereunder from year to year from such eligible tax increment districts or other revenues, or combinations thereof, if any, as the EDA may deem in its discretion to be appropriate,desirable or necessary,as may be permitted by law. It is understood and agreed hereunder that the increments from Tax Increment Financing District No.6 are pledged only to the payment of the 1989B Refunding Bonds and that the increments from Tax Increment Financing District No. 7 are pledged only to the payment of the 1990A Refunding Bonds. • 1218143.1