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HRA Report - Subordination Agreement CITY OF HOPKINS HRA Report 2026-04 To: Honorable Chair and Board Members Mike Mornson, City Manager From: Revée Needham, Community Development Manager Date: June 2, 2026 Subject: Subordination Agreement for ACRE Credit Fund II JP LLC – Hallon II _____________________________________________________________________ RECOMMENDED ACTION MOTION TO approve the subordination agreement between ACRE Credit Fund JP LLC, TF Hopkins II LLC, and the Hopkins Housing and Redevelopment Authority in favor ACRE. OVERVIEW The Hopkins Housing and Redevelopment Authority (HRA) provided a $685,000 forgivable loan to Trilogy as part of the Hallon II project at Blake Road and Excelsior Boulevard, secured through a mortgage against the property. The HRA is currently subordinate to a Senior Loan. Trilogy is in the process of refinancing its construction loan with Acre Credit Fund II KP LLC (Acre Credit Fund). The HRA is asked to approve the attached subordination agreement, which is provided on a standard form. Executing this agreement will result in the HRA loan continuing to be subordinate to a Senior Loan, the difference being that now the Senior Loan is through ACRE Credit Fund. The City Attorney has reviewed the attached subordination agreement. It is reasonable to execute the attached form agreeing to subordinate the HRA’s mortgage to the ACRE Credit Fund mortgage because the City’s position will be maintained (second) behind the primary lender. The only difference is the entity holding the primary mortgage is now ACRE Credit Fund. The HRA’s loan also includes a provision where the HRA agrees to subordinate its mortgage to any senior debt. SUPPORTING INFORMATION •Subordination Agreement Planning & Economic Development ---------------------------- [Space Above This Line For Recording Data] ---------------------------- SUBORDINATION AGREEMENT (Conventional) This SUBORDINATION AGREEMENT (this “Agreement”) dated as of June [__], 2026, is executed by and among (i) ACRE CREDIT FUND II JP LLC, a Delaware limited liability company (“Senior Lender”), (ii) HOPKINS HOUSING AND REDEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of Minnesota (“Subordinate Lender”), and (iii) TF HOPKINS II, LLC, a Delaware limited liability company (“Borrower”). RECITALS: A. Pursuant to that certain Loan Agreement by and among Borrower, TF HOPKINS II, LLC, a Delaware limited liability company (“Co-Borrower”) and Senior Lender, dated as of June [__], 2026 (as may be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Senior Loan Agreement”), Senior Lender has agreed to make a loan to Borrower and Co-Borrower in the original aggregate principal amount of $[107,000,000.00] (the “Senior Loan”), as evidenced by the Promissory Note (as defined in the Senior Loan Agreement), dated as of June [__], 2026 (as amended, restated, replaced, supplemented or otherwise modified from time to time, singly and collectively, the “Senior Note”). B. In addition to the Senior Loan Agreement, the Senior Loan and the Senior Note are also secured in part by (I) that certain [Amended and Restated Mortgage, Assignment of Leases and Rents, Security Agreement, and Fixture Filing] (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Senior Security Instrument”), encumbering, among other things, the property described in the Senior Security Instrument as the “Mortgaged Property” and (II) that certain Pledge and Security Agreement (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Senior Pledge Agreement”) by TF Azalea QOZB, LLC, a Delaware limited liability company (“Azalea Pledgor”) and TF Hopkins Phase II Owner, LLC, a Delaware limited liability company (“Hopkins II Pledgor”; and together with Azalea Pledgor, individually and/or collectively as the context may require, “Pledgor”), encumbering Hopkins II Pledgor’s membership interests in Borrower. C. Borrower has requested Senior Lender to permit that certain subordinate loan in the amount of $685,000.00 (the “Subordinate Loan”) from Subordinate Lender to Borrower and to allow the Subordinate Loan to be secured by a mortgage lien against the Mortgaged Property. D.Senior Lender has agreed to permit the Subordinate Loan and to allow the subordinate mortgage lien against the Mortgaged Property subject to all of the conditions contained in this Agreement. AGREEMENTS: NOW, THEREFORE, in order to induce Senior Lender to permit the Subordinate Loan to Borrower and to allow a subordinate mortgage lien against the Mortgaged Property, and in consideration thereof, Senior Lender, Subordinate Lender and Borrower agree as follows: 1.Recitals. The recitals set forth above are incorporated herein by reference. 2.Definitions. In addition to the terms defined in the Recitals to this Agreement, for purposes of this Agreement the following terms have the respective meanings set forth below: “Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person or is a director or officer of such Person or of an Affiliate of such Person. “Bankruptcy Code” means Title 11, United States Code, as amended from time to time, any successor statute thereto, and any rules promulgated pursuant thereto. “Borrower” means the Person named as such in the first paragraph on page 1 of this Agreement, any successor or assign of Borrower, including without limitation, a receiver, trustee or debtor-in- possession and any other Person (other than Senior Lender, its successors, assigns and/or affiliates) who acquires title to the Mortgaged Property after the date of this Agreement. “Business Day” means any day other than (a) a Saturday, (b) a Sunday, (c) a day on which Senior Lender is not open for business, or (d) a day on which the Federal Reserve Bank of New York is not open for business. “Condemnation Action” means any action or proceeding, however characterized or named, relating to any condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect. “Control” (including with correlative meanings, the terms “Controlling,” “Controlled by” and “under common Control with”), as applied to any entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or operations of such entity, whether through the ownership of voting securities, ownership interests or by contract or otherwise. “Default Notice” means: (a) a copy of any written notice from Senior Lender to Borrower and Subordinate Lender stating that a Senior Loan Default has occurred under the Senior Loan Documents; or (b) a copy of the written notice from Subordinate Lender to Borrower and Senior Lender stating that a Subordinate Loan Default has occurred under the Subordinate Loan Documents. Each Default Notice shall specify the default upon which such Default Notice is based. “Enforcement Action” means the commencement of any remedies against Borrower including, without limitation, commencing any litigation or proceeding (including, without limitation, a foreclosure proceeding), the exercise of any statutory power of sale, the taking of a deed or assignment in lieu of foreclosure, conducting a UCC foreclosure, the obtaining of a receiver or the taking of any other enforcement action against, or the taking of possession or control of, or the exercise of any remedies with respect to, the Mortgaged Property or any portion thereof or the membership interests in Borrower, as applicable. “Person” means an individual, an estate, a trust, a corporation, a partnership, a limited liability company or any other organization or entity (whether governmental or private). “Proceeding” means a proceeding, whether voluntary or involuntary, for insolvency, liquidation, reorganization, dissolution, bankruptcy or other similar proceeding pursuant to the Bankruptcy Code or other applicable federal or state law with respect to Borrower, with respect to any of the Senior Loan or any portion thereof or with respect to any other obligations under the Senior Loan Documents. “Senior Lender” means the Person named as such in the first paragraph on Page 1 of this Agreement, its affiliates, successors and assigns, and any other Person who becomes the legal holder of the Senior Loan after the date of this Agreement. “Senior Loan Default” means the occurrence of an “Event of Default” as that term is defined in the Senior Loan Documents. “Senior Loan Documents” means the Senior Note, the Senior Security Instrument, the Senior Loan Agreement, the Senior Pledge Agreement and all other “Loan Documents” as that term is defined in the Senior Loan Agreement, as the same may be amended from time to time. “Subordinate Lender” means the Person named as such in the first paragraph on Page 1 of this Agreement, any successor or assign of Subordinate Lender, including without limitation, a receiver, trustee or debtor-in-possession and any other Person who becomes the legal holder of the Subordinate Note after the date of this Agreement. “Subordinate Loan Agreement” means the Loan Agreement dated as of [_______], 2026 by and between Borrower and Subordinate Lender, as the same may be amended from time to time in accordance with the terms hereof. “Subordinate Loan Default” means a default by Borrower in performing or observing any of the terms, covenants or conditions in the Subordinate Loan Documents to be performed or observed by it, which continues beyond any applicable period provided in the Subordinate Loan Documents for curing the default. “Subordinate Loan Documents” means the Subordinate Note, the Subordinate Mortgage, the Subordinate Loan Agreement and all other documents evidencing, securing or otherwise executed and delivered in connection with the Subordinate Loan, as the same may be amended from time to time in accordance with the terms hereof. “Subordinate Mortgage” means the Mortgage, dated as of March 30, 2023, by Borrower to Subordinate Lender, recorded on April 10, 2023, as Doc Num 6007135 in the Office of Registrar of Titles, Hennepin County, Minnesota (the “Public Records”), encumbering the Mortgaged Property as security for the Subordinate Loan, as the same may be amended from time to time in accordance with the terms hereof. “Subordinate Note” means the Promissory Note dated as of March 30, 2023, issued by Borrower to Subordinate Lender to evidence the Subordinate Loan, as the same may be amended from time to time in accordance with the terms hereof. 3.Permission to Place Mortgage Lien Against Mortgaged Property. Senior Lender agrees, notwithstanding the prohibition against inferior liens on the Mortgaged Property contained in the Senior Loan Documents and subject to the provisions of this Agreement, to permit the Subordinate Mortgage and other recordable Subordinate Loan Documents against the Mortgaged Property to secure Borrower’s obligation to repay the Subordinate Note and all other obligations, indebtedness and liabilities of Borrower to Subordinate Lender under and in connection with the Subordinate Loan. 4.Borrower’s and Subordinate Lender’s Representations and Warranties. Borrower and Subordinate Lender each makes the following representations and warranties to Senior Lender: (a)Subordinate Loan Documents. The Subordinate Loan is evidenced by the Subordinate Note and is secured by the Subordinate Mortgage, the Subordinate Loan Agreement and the Subordinate Loan Documents, and there are no other documents, agreements or instruments in effect between Borrower and Subordinate Lender or other parties amending, modifying or being in effect relative thereto. (b)Subordinate Mortgage. The seventh paragraph of the Subordinate Mortgage beginning with “If requested by Borrower in writing,” is deleted its entirety and replaced as follows: “If requested by Borrower in writing, the HRA will agree to subordinate this Agreement, the Note and the Mortgage to any Senior Debt. Without limiting the foregoing, HRA acknowledges and agrees that this Agreement, the Note and the Mortgage are subject to and subordinate in lien priority and payment and performance of principal and interest as well as all other expenses, charges and fees, including, without limitation, interest accruing after any default or petition in bankruptcy, and subordinated in all other respects, to the following: (i) that certain [Amended and Restated Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing], made by Borrower in favor of ACRE Credit Fund II JP LLC, a Delaware limited liability company (together with its successors and assigns), dated June [__], 2026, and recorded against the Property on _______ __________ as Document No. _______ in the Public Records (as may be amended from time to time, the “ACRE Mortgage”), and (ii) any and all obligations and indebtedness owed by Borrower to Senior Lender and secured by the ACRE Mortgage. In the event an Event of Default under the ACRE Mortgage occurs, Borrower shall provide notice to HRA of the Event of Default and all payments to HRA, if any, shall be deferred and the Borrower shall not be required to make any payment on this Agreement, the Note and the Mortgage until such Event of Default is cured or the Senior Debt is repaid in full. HRA agrees and covenants that it shall (simultaneously with the giving of notice to Borrower) provide Senior Lender with a copy of each written notice which HRA gives to Borrower advising Borrower of the occurrence of a default under any of this Agreement, the Note and the Mortgage. The rights and remedies of the payee and each subsequent holder of this Note under the Mortgage, Deed of Trust or Deed to Secure Debt (and any exhibits) securing this Note are subject to the restrictions and limitations set forth in the Subordination Agreement. Each subsequent holder of the Subordinate Note shall be deemed, by virtue of such holder’s acquisition of the Note, to have agreed to perform and observe all of the terms, covenants and conditions to be performed or observed by Subordinate Lender under the Subordination Agreement.” (c)Terms of the Subordinate Loan. The original principal amount of the Subordinate Note is $685,000.00, and the current unpaid balance of the Subordinate Note is $685,000.00. Interest on the Subordinate Note is payable monthly at the rate of zero percent (0%) per annum, which rate may not be increased without the prior written consent of Senior Lender. The principal and any interest due under the Subordinate Note shall, pursuant to the terms and conditions of the Subordinate Note, be forgiven in full on and as of March 30, 2033 (“Maturity”), which is the tenth (10th) anniversary of March 30, 2023. (d)Relationship of Borrower to Subordinate Lender and Senior Lender. Subordinate Lender is not an Affiliate of Borrower and is not in possession of any facts which would lead it to believe that Senior Lender is an Affiliate of Borrower. (e) Term. The term of the Subordinate Note does not end before the stated term of the Senior Note. (f)Subordinate Loan Documents. The executed Subordinate Loan Documents are the same as those submitted to Senior Lender prior to the date of this Agreement, and such instruments have not been amended, modified, assigned or superseded whatsoever. There are no past due payments under the Subordinate Note, nor does there exist any breach of, or event of default under, any of the terms and provisions of any of the Subordinate Loan Documents. (g)No Assignment. Subordinate Lender is the present holder of the Subordinate Note, has never assigned any interest (whether collateral or otherwise) in or to any of the Subordinate Loan Documents and is the legal and beneficial owner of the entire Subordinate Loan. 5.Deliveries. Borrower shall submit the following items to Senior Lender the later of (a) ten (10) Business Days after the date on which the proceeds of the Subordinate Loan are disbursed to Borrower, and (b) the effective date of the Senior Loan Documents: (a)Title Policy Endorsement. An endorsement to the policy of title insurance insuring the lien of the Senior Security Instrument which insures that (1) there are no liens or other encumbrances affecting the Mortgaged Property, other than “Permitted Encumbrances” (as defined in the Senior Security Instrument), the Subordinate Mortgage, and other Subordinate Loan Documents filed or recorded against the Mortgaged Property, (2) the lien of the Subordinate Mortgage is subordinate to the lien of the Senior Security Instrument, and (3) this Agreement has been recorded among the applicable land records. (b)Certification. A certification from Borrower and Subordinate Lender to Senior Lender that the Subordinate Loan Documents do not contain any changes from the Subordinate Loan Documents submitted to, and approved by, Senior Lender prior to the date of this Agreement. (c)Loan Documents. A complete set of the fully executed Subordinate Loan Documents, certified by Borrower to be true, correct and complete upon the later of (1) the execution and delivery of the Subordinate Loan Documents, and (2) the effective date of the Senior Loan Documents. 6.Terms of Subordination. (a)Agreement to Subordinate. Senior Lender and Subordinate Lender agree that (1) the indebtedness evidenced by the Subordinate Loan Documents is and shall be subordinated in right of payment, to the extent and in the manner provided in this Agreement, to the prior payment in full of the Indebtedness evidenced by the Senior Loan Documents, and (2) the liens, terms, covenants and conditions of the Subordinate Mortgage and the other Subordinate Loan Documents are and shall be subject to and subordinate in all respects to the liens, terms, covenants and conditions of the Senior Security Instrument and the other Senior Loan Documents and to all advances heretofore made or which may hereafter be made pursuant to the Senior Loan Documents (including but not limited to, all sums advanced for the purposes of (A) protecting or further securing the lien of the Senior Security Instrument and the other Senior Loan Documents, curing defaults by Borrower under the Senior Loan Documents or for any other purpose expressly permitted by the Senior Loan Documents, or (B)constructing, renovating, repairing, furnishing, fixturing or equipping the Mortgaged Property). (b)Subordination of Subrogation Rights. Subordinate Lender agrees that if, by reason of its payment of real estate taxes or other monetary obligations of Borrower, or by reason of its exercise of any other right or remedy under the Subordinate Loan Documents, it acquires by right of subrogation or otherwise a lien on the Mortgaged Property which (but for this subsection) would be senior to the lien of the Senior Security Instrument, then, in that event, such lien shall be subject and subordinate to the lien of the Senior Security Instrument. (c) Payments Before Senior Loan Default. Until Subordinate Lender receives a Default Notice (or otherwise acquires actual knowledge) of a Senior Loan Default, Subordinate Lender shall be entitled to retain for its own account all payments made under or pursuant to the Subordinate Loan Documents. (d)Payments After Senior Loan Default. Borrower agrees that, after it receives a Default Notice (or otherwise acquires actual knowledge) of a Senior Loan Default, it will not make any payments under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest, additional interest, late payment charges, default interest, attorneys’ fees, or any other sums secured by the Subordinate Loan Documents) without Senior Lender’s prior written consent. Subordinate Lender agrees that, after it receives a Default Notice (or otherwise acquires actual knowledge) of a Senior Loan Default, it will not accept any payments under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest, additional interest, late payment charges, default interest, attorneys’ fees, or any other sums secured by the Subordinate Loan Documents) without Senior Lender’s prior written consent. If Subordinate Lender receives written notice from Senior Lender that the Senior Loan Default which gave rise to Subordinate Lender’s obligation not to accept payments has been cured, waived, or otherwise suspended by Senior Lender, the restrictions on payment to Subordinate Lender in this Section 6 shall terminate, and Senior Lender shall have no right to any subsequent payments made to Subordinate Lender by Borrower prior to Subordinate Lender’s receipt of a new Default Notice from Senior Lender in accordance with the provisions of this Section 6(d). (e) Receipt of Payment Not Permitted Hereunder. If, after Subordinate Lender receives a Default Notice (or otherwise acquires actual knowledge) of a Senior Loan Default, Subordinate Lender receives any payments under the Subordinate Loan Documents, or if Subordinate Lender receives any other payment or distribution of any kind from Borrower or from any other Person in connection with the Subordinate Loan or the Subordinate Loan Documents which Subordinate Lender is not permitted by this Agreement to retain for its own account, Subordinate Lender agrees to notify (telephonically or via email, followed by written notice) Senior Lender of Subordinate Lender’s receipt of such amounts, and that such payment or other distribution will be received and held in trust for Senior Lender and unless Senior Lender otherwise notifies Subordinate Lender, will be promptly remitted, in kind, to Senior Lender, properly endorsed to Senior Lender, to be applied to the principal of, interest on and other amounts due under the Senior Loan Documents in such order and in such manner as Senior Lender shall determine in its sole and absolute discretion. Subordinate Lender hereby irrevocably designates, makes, constitutes and appoints Senior Lender (and all Persons designated by Senior Lender) as Subordinate Lender’s true and lawful attorney in fact in the Subordinate Lender’s name, place and stead, with full power of substitution, to (1) take any and all actions as are permitted in this Agreement, including the power to endorse the name of Subordinate Lender upon any checks representing payments referred to in this subsection, and (2) carry out any remedy provided for in this Agreement. The Subordinate Lender hereby acknowledges that the constitution and appointment of such attorney-in-fact is coupled with an interest and is irrevocable. (f)Notice of Payment from Other Persons. Subordinate Lender agrees to notify (telephonically or via email, followed by written notice) Senior Lender of Subordinate Lender’s receipt from any Person other than Borrower of a payment with respect to Borrower’s obligations under the Subordinate Loan Documents, promptly after Subordinate Lender obtains knowledge of such payment. 7.Default Under Subordinate Loan Documents. (a)Notice of Subordinate Loan Default and Cure Rights. Subordinate Lender agrees to deliver a Default Notice of each Subordinate Loan Default to Senior Lender within five (5) Business Days after the occurrence of the Subordinate Loan Default. Senior Lender shall have the right, but not the obligation, to cure any Subordinate Loan Default within the same time period for curing a default which is given to Borrower under the Subordinate Loan Documents, except that Senior Lender’s time period for cure shall begin on the date on which it receives notice of the Subordinate Loan Default. All amounts advanced or expended by Senior Lender to cure a Subordinate Loan Default shall be deemed to have been advanced by Senior Lender pursuant to, and shall be secured by, the Senior Loan Agreement, the Senior Security Instrument and any applicable Senior Loan Documents. (b)Certain Actions Regarding Subordinate Loan. Until ninety-one (91) days following the date that the Senior Loan is indefeasibly repaid in full and all obligations of Borrower under the Senior Loan Documents have been satisfied in full, Subordinate Lender (without the prior written consent of Senior Lender) shall not take any action against Borrower or the Mortgaged Property including, without limitation, taking any of the following actions: i.take action in response to a declared instance of a default under the Subordinate Loan Documents, accelerate all or any portion of the Subordinate Loan or exercise any of its remedies (including, without limitation, any Enforcement Action) under the Subordinate Mortgage; ii.commence any legal proceedings against Borrower or commence any Enforcement Action; iii.consent to any amendment or modification of the Subordinate Loan Documents, except for an extension of the maturity date of the Subordinate Loan; iv.Subordinate Lender shall not itself, nor shall it solicit any person or entity to, or direct or cause Borrower or any guarantor or any affiliate of any of Borrower, any guarantor or person that controls any of them (the “Borrower Group”) to: (i) commence any Proceeding; (ii) institute proceedings to have Borrower adjudicated a bankrupt or insolvent; (iii)consent to, or acquiesce to, the institution of bankruptcy or insolvency proceedings against Borrower; (iv) file a petition or consent to the filing of a petition seeking reorganization, arrangement, adjustment, winding-up, dissolution, composition, liquidation or other relief by or on behalf of Borrower; (v) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for Borrower, the Mortgaged Property (or any portion thereof) or any other collateral securing the Senior Loan (or any portion thereof); (vi) make an assignment for the benefit of any creditor of Borrower; (vii) seek to consolidate the Mortgaged Property or any other assets of Borrower with the assets of any member of the Borrower Group or any other person in any proceeding relating to bankruptcy, insolvency, reorganization or relief of debtors; or (viii) initiate, join in, acquiesce in, or file any petition or take any other action in furtherance of or that would result in any of the foregoing; or v.institute any judicial or administrative proceeding against Borrower or the Senior Lender which directly or indirectly would interfere with or delay the exercise by the Senior Lender of its rights and remedies in respect of the Mortgaged Property or any part thereof or under the Senior Loan Documents or this Agreement. Without limiting the generality of the foregoing, in the event of a bankruptcy or insolvency of Borrower, Subordinate Lender shall not object to or oppose any efforts by the Senior Lender to obtain relief from the automatic stay under Section 362 of the Bankruptcy Code or to seek to cause such entity’s bankruptcy estate to abandon the Mortgaged Property (or any portion thereof) that is subject to the Senior Security Instrument. (c) Effect of Foreclosure by Subordinate Lender. Subordinate Lender acknowledges that any conveyance or other transfer of title to the Mortgaged Property pursuant to a foreclosure of the Subordinate Mortgage (including a conveyance or other transfer of title pursuant to the exercise of a power of sale contained in the Subordinate Loan Documents), or any deed or assignment in lieu of foreclosure or similar arrangement, shall be subject to the transfer provisions of the Senior Loan Documents; and the Person (including Subordinate Lender) who acquires title to the Mortgaged Property pursuant to the foreclosure proceeding (or pursuant to the exercise of a power of sale contained in the Subordinate Loan Documents) shall not be deemed to be automatically approved by Senior Lender. (d)Cross Default. Borrower and Subordinate Lender agree that a Subordinate Loan Default shall constitute a Senior Loan Default under the Senior Loan Documents and Senior Lender shall have the right to exercise all rights or remedies under the Senior Loan Documents in the same manner as in the case of any other Senior Loan Default. 8.Default Under Senior Loan Documents. (a)Senior Loan Notices. Senior Lender shall deliver to Subordinate Lender a Default Notice within five (5) Business Days in each case where Senior Lender has given a Default Notice to Borrower. Failure of Senior Lender to send a Default Notice to Subordinate Lender shall not prevent the exercise of Senior Lender’s rights and remedies under the Senior Loan Documents, nor shall such failure constitute a default by Senior Lender under this Agreement. (b)Cross Default. Subordinate Lender agrees that, notwithstanding any contrary provision contained in the Subordinate Loan Documents, a Senior Loan Default shall not constitute a default under the Subordinate Loan Documents (if no other default has occurred under the Subordinate Loan Documents) until either (1) Senior Lender has accelerated the maturity of the Senior Loan, or (2) Senior Lender has taken affirmative action to exercise its rights under the Senior Loan Documents to collect rent, to appoint (or seek the appointment of) a receiver or to foreclose on (or to exercise a power of sale contained in) the Senior Loan Documents (it being expressly acknowledged and agreed that, notwithstanding anything to the contrary set forth in the Subordinate Loan Documents, Senior Lender shall have no obligation to pay Subordinate Lender any sums under the Subordinate Loan Documents upon Senior Lender’s exercise of remedies the Senior Loan Documents, including without limitation, foreclosure or deed-in-lieu of foreclosure, and solely Borrower shall be liable therefor). If at any time Borrower cures any Senior Loan Default to the satisfaction of Senior Lender, any default under the Subordinate Loan Documents arising from such Senior Loan Default shall be deemed cured and the Subordinate Loan shall be retroactively reinstated as if such Senior Loan Default had never occurred. 9.Conflict. Borrower and Subordinate Lender each agrees that, in the event of any conflict or inconsistency between the terms of the Subordinate Loan Documents and the terms of this Agreement, the terms of this Agreement shall control. Borrower acknowledges that the terms and provisions of this Agreement shall not, and shall not be deemed to: extend Borrower’s time to cure any Senior Loan Default or Subordinate Loan Default, as the case may be; give Borrower the right to notice of any Senior Loan Default or Subordinate Loan Default, as the case may be other than that, if any, provided, respectively under the Senior Loan Documents or the Subordinate Loan Documents; or create any other right or benefit for Borrower as against Senior Lender or Subordinate Lender. 10. Rights and Obligations of Subordinate Lender Under the Subordinate Loan Documents. Subject to each of the other terms of this Agreement, all of the following provisions shall supersede any provisions of the Subordinate Loan Documents covering the same subject matter: (a)Subordinate Loan Notices. Subordinate Lender shall deliver to Senior Lender a copy of each notice which it delivers to Borrower in connection with the Subordinate Loan simultaneously with the delivery of such notice to Borrower. (b)Protection of Security Interest. Subordinate Lender shall not, without the prior written consent of Senior Lender in each instance, (1) take any action which has the effect of increasing the indebtedness outstanding under, or secured by, the Subordinate Loan Documents, except that Subordinate Lender shall have the right to advance funds pursuant to the Subordinate Loan Documents for the purpose of paying real estate taxes and insurance premiums, making necessary repairs to the Mortgaged Property and curing other defaults by Borrower under the Subordinate Loan Documents, or (2) appear in, defend or bring any action to protect its interest in the Mortgaged Property. (c)Condemnation or Casualty. Following the occurrence of (1) a Condemnation Action, or (2) a fire or other casualty resulting in damage to all or a portion of the Mortgaged Property (collectively, a “Casualty”), at any time or times when the Senior Security Instrument remains a lien on the Mortgaged Property the following provisions shall apply: (A)Subordinate Lender hereby agrees that its rights (under the Subordinate Loan Documents or otherwise) to participate in any proceeding or action relating to a Condemnation Action or a Casualty, or to participate or join in any settlement of, or to adjust, any claims resulting from a Condemnation Action or a Casualty shall be and remain subject and subordinate in all respects to Senior Lender’s rights under the Senior Loan Documents, and Subordinate Lender shall be bound by any settlement or adjustment of a claim resulting from a Condemnation Action or a Casualty made by Senior Lender; (B)all proceeds received or to be received on account of a Condemnation Action or a Casualty, or both, shall be applied (either to payment of the costs and expenses of repair and restoration or to payment of the Senior Loan) in the manner determined by Senior Lender in its sole discretion; provided, however, that if Senior Lender elects to apply such proceeds to payment of the principal of, interest on and other amounts payable under the Senior Loan, any proceeds remaining after the satisfaction in full of the principal of, interest on and other amounts payable under the Senior Loan shall be paid to, and may be applied by, Subordinate Lender in accordance with the applicable provisions of the Subordinate Loan Documents; and (C)Subordinate Lender agrees to execute and deliver, at no expense to Senior Lender, all documents, instruments, agreements or further assurances required to effectuate the provisions of this subsection. (d)Insurance. Subordinate Lender agrees that all original policies of insurance required pursuant to the Senior Security Instrument shall be held by Senior Lender. The preceding sentence shall not preclude Subordinate Lender from requiring that it be named as a loss payee, as its interest may appear, under all policies of property damage insurance maintained by Borrower with respect to the Mortgaged Property, provided such action does not affect the priority of payment of the proceeds of property damage insurance under the Senior Security Instrument, or that it be named as an additional insured under all policies of liability insurance maintained by Borrower with respect to the Mortgaged Property. (e)Termination of Subordinate Mortgage. If, after the occurrence of a Senior Loan Default, Senior Lender acquires title to the Mortgaged Property pursuant to a foreclosure, or a deed in lieu of foreclosure, of (or the exercise of a power of sale contained in) the Senior Loan Documents, or Senior Lender acquires the membership interests in Borrower pursuant to a UCC foreclosure or assignment in lieu of foreclosure pursuant to the Senior Pledge Agreement, the lien of the Subordinate Mortgage and the other Subordinate Loan Documents shall automatically terminate upon Senior Lender’s acquisition of title or membership interests, as applicable, and Senior Lender shall not be liable to Subordinate Lender for any sums payable by Borrower to Subordinate Lender under the Subordinate Loan Documents. For the avoidance of doubt, any Enforcement Action by Lender pursuant to the Senior Loan Documents shall not constitute a transfer, sale, assignment, conveyance or any other transfer of the Mortgaged Property pursuant to Section 1 of the Subordinate Note that would trigger payment of the Subordinate Loan. (f)No Modification of Subordinate Loan Documents. Borrower and Subordinate Lender each agree that, until the principal of, interest on and all other amounts payable under the Senior Loan Documents have been paid in full, it will not, without the prior written consent of Senior Lender in each instance, (1) amend, modify, increase, extend, renew or replace the Subordinate Loan Documents or (2) assign any interest in the Subordinate Loan. Any amendment of the Subordinate Loan Documents or assignment of Subordinate Lender’s interest in the Subordinate Loan without Senior Lender’s consent shall be void ab initio and of no effect whatsoever. 11. Modification or Refinancing of Senior Loan Documents. Subordinate Lender consents to any agreement or arrangement in which Senior Lender waives, postpones, extends, reduces or modifies any provisions of the Senior Loan Documents, including any provision requiring the payment of money. Subordinate Lender further agrees that its agreement to subordinate hereunder shall extend to any new mortgage debt which is for the purpose of refinancing all or any part of the Senior Loan (including reasonable and necessary costs associated with the closing and/or the refinancing); and that all the terms and covenants of this Agreement shall inure to the benefit of any holder of any such refinanced debt; and that all references to the Senior Loan, the Senior Note, the Senior Loan Agreement, the Senior Security Instrument, the Senior Pledge Agreement, the Senior Loan Documents and Senior Lender shall mean, respectively, the refinance loan, the refinance note, the loan agreement, the mortgage securing the refinance note, all documents evidencing, securing or otherwise pertaining to the refinance note and the holder of the refinance note. 12.Default by Subordinate Lender. If Subordinate Lender defaults in performing or observing any of the terms, covenants or conditions to be performed or observed by Subordinate Lender under this Agreement, Senior Lender shall have the right to all available legal and equitable relief. In addition, Subordinate Lender agrees to indemnify and hold harmless Senior Lender from and against (a) all damage, loss and liability incurred by Senior Lender as a result of such default, and (b) all costs and expenses (including reasonable attorneys’ fees and disbursements) incident to the matters referred to in clause (a), whether or not litigation is commenced. 13.Reinstatement. i.This Agreement shall be applicable both before and after the commencement, whether voluntary or involuntary, of any Proceeding against Borrower or any other person and all references herein to Borrower shall be deemed to apply to Borrower as a debtor-in-possession and to any trustee in bankruptcy for the estate of Borrower. ii. In the event Senior Lender is required under any bankruptcy or other law to return to Borrower, the estate in bankruptcy thereof, any third party or any trustee, receiver or other similar representative of Borrower any payment or distribution of assets, whether in cash, property or securities, including without limitation any Mortgaged Property or any proceeds of the Mortgaged Property previously received by Senior Lender on account of the Senior Security Instrument (a “Reinstatement Distribution”), then to the maximum extent permitted by law, this Agreement and the subordination of the lien of the Subordinate Mortgage in such Mortgaged Property or proceeds shall be reinstated with respect to any such Reinstatement Distribution. Senior Lender shall not be required to contest its obligation to return such Reinstatement Distribution. iii. The provisions of this Agreement shall apply, notwithstanding the fact that the Senior Loan or any claim for any of the Senior Loan is subordinated, avoided or disallowed, in whole or in part, under Title 11 of the Bankruptcy Code or other applicable federal or state law. In the event of a Proceeding: (i) the Senior Loan shall include all interest accrued on the Senior Loan, in accordance with and at the rates specified in the applicable Senior Loan Documents, both for periods before and for periods after the commencement of any Proceeding, and all other amounts included in the Senior Loan, even if the claim for such interest is not allowed pursuant to applicable law, and any and all claims (if any) of Subordinate Lender with respect to any cash collateral (being proceeds, product, offspring, rents and profits of the Mortgaged Property constituting cash collateral under Section 363 of the Bankruptcy Code) related thereto hereby are, and shall be, subordinate in lien and payment to the claims of Senior Lender in such cash collateral; and (ii) Senior Loan shall include, without limitation, (y) any and all interest due and owing with respect to all or any portion of the Senior Loan accruing and calculated from and after the date of any Proceeding (in addition to accruals prior to such date) and (z) any and all costs and expenses (including, without limitation, attorneys’ costs, fees, expenses and disbursements) incurred by Senior Lender in connection with collecting or enforcing any of the foregoing. iv.In addition to, and without limiting any other provision of this Agreement, if a Proceeding shall have occurred or any event of default under the Senior Loan Documents shall have occurred and be continuing, Senior Lender shall be entitled to receive payment and performance in full of all amounts due or to become due to Senior Lender before Subordinate Lender is entitled to receive any payment under the Subordinate Mortgage on account of the Subordinate Loan. v.In any Proceeding, Subordinate Lender hereby agrees that Subordinate Lender shall not make any election, give any consent, file any motion, claim, obligation notice or application or take any other action in such Proceeding without the prior written consent of Senior Lender, Senior Lender will control the disposition of Subordinate Lender’s claims against Borrower and the Mortgaged Property in the event of a Proceeding. Subordinate Lender hereby appoints Senior Lender as its agent, and grants to Senior Lender an irrevocable power of attorney coupled with an interest, and its proxy, for the purpose of exercising any and all rights and taking any and all actions available to Subordinate Lender in connection with any case in any such Proceeding, including without limitation, the right to vote to accept or reject a plan, to file and/or prosecute a claim, to make any election under section 1111(b) of the Bankruptcy Code with respect to the Subordinate Mortgage and to file a motion to modify the automatic stay with respect to the Subordinate Mortgage. Subordinate Lender shall not challenge the validity or amount of any claim submitted in a Proceeding by Senior Lender. 14.Non-Approval of Subordinate Financing Terms. This Agreement does not constitute an approval by Senior Lender of the terms of the Subordinate Loan or limit any of Borrower’s rights to negotiate the terms of the Subordinate Loan Documents with Subordinate Lender. 15.Notices. (a)Process of Serving Notice. All notices under this Agreement shall be: (1)in writing and shall be: (A)delivered, in person; (B)mailed, postage prepaid, either by registered or certified delivery, return receipt requested; (C)sent by overnight courier; or (D)sent by electronic mail with originals to follow by overnight courier; (2)addressed to the intended recipient at the address(es) below the signature block, as applicable; and (3)deemed given on the earlier to occur of: (A)the date when the notice is received by the addressee; or (B)if the recipient refuses or rejects delivery, the date on which the notice is so refused or rejected, as conclusively established by the records of the United States Postal Service or any express courier service. (b)Change of Address. Any party to this Agreement may change the address to which notices intended for it are to be directed by means of notice given to the other parties identified in this Agreement. (c) Receipt of Notices. Senior Lender, Subordinate Lender or Borrower shall not refuse or reject delivery of any notice given in accordance with this Agreement. Each party is required to acknowledge, in writing, the receipt of any notice upon request by the other party. 16.General. (a)Assignment/Successors. This Agreement shall be binding upon and shall inure to the benefit of the respective legal successors, transferees and assigns of Borrower, Senior Lender and Subordinate Lender. Borrower shall not assign any of its rights and obligations under this Agreement without the prior written consent of Senior Lender. (b)No Partnership or Joint Venture. Senior Lender’s permission for the placement of the Subordinate Loan does not constitute Senior Lender as a joint venturer or partner of Subordinate Lender. Neither party hereto shall hold itself out as a partner, agent or Affiliate of the other party hereto. (c) Senior Lender’s Consent. Wherever Senior Lender’s consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by Senior Lender in its sole and absolute discretion. (d)Further Assurances. Upon the demand of Senior Lender from time to time, Subordinate Lender agrees to execute and deliver all additional instruments and/or documents required by Senior Lender in order to evidence that the Subordinate Mortgage is subordinate to the lien, covenants and conditions of the Senior Loan Documents, or to further evidence the intent of this Agreement. (e) Amendment. This Agreement shall not be amended except by written instrument signed by all parties hereto. (f)Governing Law. This Agreement shall be governed by the laws of the jurisdiction in which the Mortgaged Property is located without giving effect to any choice of law provisions thereof that would result in the application of the laws of another jurisdiction. Senior Lender, Subordinate Lender and Borrower agree that any controversy arising under or in relation to this Agreement shall be litigated exclusively in the jurisdiction in which the Mortgaged Property is located. The state and federal courts and authorities with jurisdiction in such locale shall have exclusive jurisdiction over all controversies that arise under or in relation to this Agreement. The parties hereto irrevocably consent to service, jurisdiction, and venue of such courts for any such litigation and waive any other venue to which any might be entitled by virtue of domicile, habitual residence or otherwise. (g)Severable Provisions. If any provision of this Agreement shall be invalid or unenforceable to any extent, then the other provisions of this Agreement, shall not be affected thereby and shall be enforced to the greatest extent permitted by law. (h)Term. The term of this Agreement shall commence on the date hereof and shall continue until the earliest to occur of the following events: (1) the indefeasible payment in full of the principal of, interest on and other amounts payable under the Senior Loan Documents; (2) the payment in full of the principal of, interest on and other amounts payable under the Subordinate Loan Documents, other than by reason of payments which Subordinate Lender is obligated to remit to Senior Lender pursuant to Section 6 of this Agreement; (3) the acquisition by Senior Lender of title to the Mortgaged Property pursuant to a foreclosure, or a deed in lieu of foreclosure, of (or the exercise of a power of sale contained in) the Senior Loan Documents; or (4) the acquisition by Subordinate Lender of title to the Mortgaged Property pursuant to a foreclosure, or a deed in lieu of foreclosure, of (or the exercise of a power of sale contained in), the Subordinate Loan Documents, but only if such acquisition of title does not violate any of the terms of this Agreement. (i)Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be considered an original for all purposes; provided, however, that all such counterparts shall constitute one and the same instrument. (j)Sale of the Senior Loan. Nothing in this Agreement shall limit Senior Lender’s (including any assignee or transferee of Senior Lender) right to sell or transfer the Senior Loan, or any interest in the Senior Loan. The Senior Loan or a partial interest in the Senior Loan (together with this Agreement and the other Loan Documents) may be sold one or more times without prior notice to Subordinate Lender or Borrower. (k) City of Hopkins Not Impacted. Nothing in this Agreement shall limit the City of Hopkins’ ability, as a separate and distinct legal entity from the Subordinate Lender, the Hopkins Housing and Redevelopment Authority, to take actions unrelated to the Subordinate Loan for which it has authority under applicable law, including those which may be specifically against or impact any of the parties to, or otherwise mentioned in, this Agreement. [Remainder of Page Intentionally Blank] IN WITNESS WHEREOF, Borrower, Senior Lender and Subordinate Lender have signed and delivered this Agreement under seal (where applicable) or have caused this Agreement to be signed and delivered under seal (where applicable) by a duly authorized representative. Where applicable law so provides, Borrower, Senior Lender and Subordinate Lender intend that this Agreement shall be deemed to be signed and delivered as a sealed instrument. [SIGNATURES BEGIN ON THE FOLLOWING PAGE] SENIOR LENDER: ACRE CREDIT FUND II JP LLC, a Delaware limited liability company By: Name: Title: Address: 670 Dekalb Ave. SE, #100 Atlanta, Georgia 30312 With a copy to: Dentons US LLP 1221 Avenue of the Americas New York, New York 10020 Attn: Jonathan Jacobs, Esq. ACKNOWLEDGMENT STATE OF ________________ ) COUNTY OF ________________ ) ss.: I, the undersigned, a notary public in and for said county in said state, hereby certify that ___________________, whose name as __________________ of ACRE Credit Fund II JP LLC, a Delaware limited liability company, is signed to the foregoing instrument, and who is known to me, acknowledged before me on this day that, being informed of the contents of said instrument, he/she as such ____________________ and with full authority, executed the same voluntarily for and as the act of said company. Given under my hand and official seal this ______ day of ________, 2026. ____________________________________ Notary Public My commission expires: _______________ [NOTARIAL SEAL] SUBORDINATE LENDER: HOPKINS HOUSING AND REDEVELOPMENT AGENCY, A public body corporate and politic under the laws of Minnesota By: Name: Brian Hunke Title: Mayor Pro Tempore Address: 1010 1st St S Hopkins, MN 55343 By: Name: Michael Mornson Title: Executive Director Address: 1010 1st St S Hopkins, MN 55343 ACKNOWLEDGMENT STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) On ________________, 2026, before me, ___________________________, Notary Public, personally appeared Brian Hunke and Michael Mornson, the Chair and Executive Director, respectively, of the Hopkins Housing and Redevelopment Authority, a public body corporate and politic under the laws of Minnesota, on behalf of said authority. BORROWER: TF HOPKINS II, LLC, a Delaware limited liability company By: Name: [Sonil S. Gehani Title: President and Chief Executive Officer] ACKNOWLEDGMENT STATE OF ILLINOIS ) ) ss. COUNTY OF COOK ) On ________________, 2026, before me, ___________________________, Notary Public, personally appeared [Sonil S. Gehani, President and Chief Executive Officer] of TF Hopkins II, LLC, a Delaware limited liability company, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of Illinois that the foregoing paragraph is true and correct. WITNESS my hand and official seal. __________________________________________ Notary Public My commission expires: ________________ [NOTARIAL SEAL]