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<br />Subordination Agreement
<br />4917-4736-5298
<br />SUBORDINATION AGREEMENT
<br />THIS SUBORDINATION AGREEMENT dated as of [June] 1, 2026 (as amended, modified,
<br />supplemented or assigned from time to time, this “Agreement”) by the CITY OF LITTLE CANADA,
<br />MINNESOTA, a Minnesota municipal corporation (together with its permitted successors and assigns,
<br />“Subordinate Lender”), and LC APARTMENTS, LP, a limited partnership duly organized and validly
<br />existing under the laws of the State of Minnesota (together with its permitted successors and assigns, the
<br />“Borrower”) in favor of U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national
<br />banking association duly organized and validly existing under the laws of the United States of America
<br />(together with its permitted successors and assigns, “Fiscal Agent”) and ALLIANZ LIFE INSURANCE
<br />COMPANY OF NORTH AMERICA, a Minnesota corporation (together with its permitted successors and
<br />assigns, “Funding Lender”; and together with the Fiscal Agent and their respective successors and assigns,
<br />the “Senior Lender”).
<br />W I T N E S S E T H:
<br />WHEREAS, the Borrower has applied to City of Little Canada, Minnesota, a municipal
<br />corporation, duly organized and validly existing under the laws of the State of Minnesota (in such capacity,
<br />the “Governmental Lender”) for a loan (the “Borrower Loan”), to finance the acquisition, construction
<br />and equipping of a multifamily apartment housing facility consisting of total of 106 units and related
<br />personal property and equipment, located in City of Little Canada, Minnesota on the land more particularly
<br />described in Exhibit A attached hereto and known as “Little Canada Senior Apartments” (the “Property”);
<br />all capitalized terms used herein and not otherwise defined shall have the meanings given to them in the
<br />Funding Loan Agreement (defined below);
<br />WHEREAS, the Borrower has requested the Governmental Lender to enter into that certain
<br />Funding Loan Agreement (the “Funding Loan Agreement”) between Governmental Lender, Funding
<br />Lender and Fiscal Agent dated as of even date herewith under which the Funding Lender will make a loan
<br />(the “Funding Loan”) to the Governmental Lender, the proceeds of which will be loaned to Borrower
<br />pursuant to a Borrower Loan Agreement dated as of even date herewith (as it may be supplemented or
<br />amended, the “Borrower Loan Agreement”) to finance the acquisition, construction, development,
<br />equipping and/or operation of the Property;
<br />WHEREAS, pursuant to the Borrower Loan Agreement, the Borrower agrees to make loan
<br />payments to the Governmental Lender in an amount which, when added to other funds available under the
<br />Funding Loan Agreement, will be sufficient to enable the Governmental Lender to repay the Funding Loan
<br />and to pay all costs and expenses related thereto when due;
<br />WHEREAS, to evidence its payment obligations under the Borrower Loan Agreement, the
<br />Borrower will execute and deliver to the Governmental Lender its promissory note dated the Closing Date
<br />in the original face amount of $[17,000,000] (the “Borrower Note”) and contemporaneously therewith,
<br />Borrower is executing that certain $[9,200,000] promissory note dated the Closing Date for the benefit of
<br />Funding Lender in order to additionally finance the construction of the Property (the “Direct Note”), both
<br />secured by, among other things, a first-priority mortgage lien on the Property granted pursuant to a
<br />Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing dated as of the date
<br />hereof (as amended, modified or supplemented from time to time, the “Senior Mortgage”, which, together
<br />with the Funding Loan Agreement, Borrower Loan Agreement, the Borrower Note, the Direct Note and all
<br />other agreements contemplated therein or evidencing or securing the Borrower’s obligations under the
<br />Borrower Loan Agreement are hereinafter collectively referred to as the “Senior Loan Documents” and
<br />the indebtedness evidenced and secured by the Senior Loan Documents is hereinafter collectively referred
<br />to as the “Senior Indebtedness”);
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