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AGREEMENT REGARDING PREPAYMENT 1. Recitals. 1.1 Recital One. PNC Bank, National Association, a national banking association (the "Bank"), F&C Ramsey Apartments, LLC, an Indiana limited liability company (the "Borrower"), F&C Ramsey Members, LLC, an Indiana limited liability company (the "Mezzanine Borrower"), the Housing and Redevelopment Authority in and for the City of Ramsey, Minnesota, a public body politic incorporated under the laws of the State of Minnesota (the "Creditor") and the City of Ramsey, Minnesota, a home rule charter city organized and existing under the constitution laws of the State of Minnesota (the "City") are parties to a Debt Subordination Agreement dated and entered into as of March 9, 2012 (the "Debt Subordination Agreement"). 1.2 Recital Two. Capitalized terms used in this Agreement and not otherwise defined herein have the meanings given to them in the Debt Subordination Agreement. 1.3 Recital Three. Under the terms of the Debt Subordination Agreement, Creditor has irrevocably subordinated and postponed the payment and time of payment of all of the "Subordinated Debt", as defined in the Debt Subordination Agreement and all claims and demands arising therefrom to the "Obligations", as defined in the Debt Subordination Agreement, and directed that the Obligations be paid in full before the Subordinated Debt. 1.4 Recital Four. Notwithstanding the other provisions of the Debt Subordination Agreement, Section 3 of the Debt Subordination Agreement allows Mezzanine Borrower to make certain pre -payments to Creditor. 1.5 Recital Five. Mezzanine Borrower desires to make a Five Hundred Thousand Dollars ($500,000.00) prepayment to Creditor of amounts due from Mezzanine Borrower to Creditor under that certain Note No. 2 - Promissory Note dated April 30, 2012 in the original Principal Amount of Six Million, Nine Hundred and Sixteen Thousand Dollars ($6,916,000.00) (the "Prepayment"). Mezzanine Borrower is making the Prepayment from the proceeds of Mezzanine Borrower's draw for "Developer Overhead" under the above referenced Note No. 2. 1.6 Recital Six. The Prepayment is not a permitted prepayment under Section 3 of the Debt Subordination Agreement, but Bank has agreed to allow Mezzanine Borrower to make the Prepayment to Creditor. 1.7 Recital Seven. Creditor has agreed to accept the Prepayment subject to the execution of this Agreement by Bank, Borrower, Mezzanine Borrower and Creditor to confirm Bank's and Borrower's consent to the Prepayment and to evidence Bank's waiver of Bank's rights under the Debt Subordination Agreement with respect to the Prepayment only, including, but not limited to, Bank's rights under Section 10 of the Debt Subordination Agreement. 1 4949453v1