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BRIGGS AND MORGAN remit the amounts collected in violation of the terms of the Debt Subordination Agreement to PNC for application to the PNC debt. In general, the Debt Subordination Agreement is intended to ensure that if the project struggles or fails and there is not enough money to pay both PNC and the HRA that PNC is made whole before the HRA. In that respect, it does not significantly change the HRA's position. The HRA is and always has been a junior creditor in this transaction. The Debt Subordination Agreement does not impact the rights of the City and the HRA to enforce the Development Agreement as drafted and to terminate the TIF Note if the Developer does not perform under the Development Agreement. Likewise, the Debt Subordination Agreement does not impact the HRA's right to enforce the Membership Pledge Agreement, although, with or without the Debt Subordination Agreement, enforcement of the Membership Pledge Agreement is not a remedy is likely to result in direct cash recovery if the project is not performing. It could, however, give the HRA a redemption right which, if exercised, could allow the HRA to capture any value in excess of the PNC debt. The most significant impact of the Debt Subordination Agreement is to prevent the HRA from suing the guarantors if there is a default under the HRA Notes between the time PNC first advances loan proceeds and when PNC is paid off or elects to foreclose its mortgage. This eliminates one tool the HRA could use to put pressure on F &C and the Guarantors to address the defaults under the HRA Notes. It is important to remember, however, that, in the first instance, the HRA, as a junior creditor, is far more likely to seek to maximize their recover by negotiating with F &C and modifying the repayment terms than by moving to enforce the HRA's legal remedies, and, if those negotiations fail, two other tools, termination of the TIF Note and foreclosure of the Membership Pledge Agreement, remain available to the HRA. Another significant impact, which is more difficult to quantify, is the fact that, once PNC has advanced loan proceeds to F &C, any legal action by the HRA to enforce the Loan Agreement or the Guaranties in effect becomes a three party action and any disputes between the HRA and PNC regarding the meaning or effect of the Debt Subordination Agreement get added to the list of issues that may need to be resolved through litigation. That can certainly could have an impact on the time and money the HRA may have to spend to enforce its rights. 4509147v3 VII. CONCLUSIONS 6