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DEBT SUBORDINATION AGREEMENT <br />RECITALS <br />PNC <br />THIS DEBT SUBORDINATION AGREEMENT (this "Agreement ") is entered into as of <br />the day of , 2012, by and among PNC BANK, NATIONAL <br />ASSOCIATION, a national banking association (the "Bank "), F &C RAMSEY <br />APARTMENTS, LLC, an Indiana limited liability company (the "Borrower "), F &C RAMSEY <br />MEMBER, LLC, an Indiana limited liability company (the "Mezzanine Borrower "), THE <br />HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF <br />RAMSEY, MINNESOTA, a public body politic and corporate under the laws of the State of <br />Minnesota (the "Creditor "), and the CITY OF RAMSEY, MINNESOTA, a home rule charter <br />city organized and existing under the constitution and laws of the State of Minnesota (the <br />"City "). <br />A. Bank has established or is establishing certain credit facilities with Borrower as <br />evidenced by certain documents, instruments and agreements entered into between Bank and <br />Borrower from time to time (collectively, the "Loan Documents "), including without limitation a <br />certain construction loan in the maximum principal amount of Twenty Million Four Hundred <br />Seventy -Five Thousand and 00 /100 Dollars ($20,475,000.00) (collectively, the "Loans ") <br />pursuant to a certain Loan Agreement by and between Borrower and Bank dated <br />2012 (the "Loan Agreement "). <br />B. The Loans are secured in part by a first priority mortgage lien on approximately <br />four (4) acres of real property located on U.S. Highway 10 in Ramsey, Anoka County, <br />Minnesota, as more particularly described in Exhibit A attached hereto and made a part hereof, <br />together with the improvements now or hereafter erected thereon (the "Real Estate "), which has <br />been transferred by Creditor to Borrower concurrently herewith pursuant to the terms of a <br />Purchase Agreement dated of even date with the Loan Agreement executed by and among <br />Creditor, the City and F & C Ramsey, LLC ( "Ramsey "), under which all rights and obligations <br />of Ramsey have been assigned to Borrower (the "Purchase Agreement "). <br />C. The Loans are further secured in part by certain guaranties (the "Bank <br />Guaranties ") executed by David M. Flaherty and Flaherty & Collins Construction, Inc. (together, <br />the "Guarantors "). <br />1616593v10 (4982- 95337) <br />1 <br />