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REAFFIRMATION OF GUARANTY AND KEY PRINCIPAL OBLIGATIONS
<br />This REAFFIRMATION OF GUARANTY AND KEY PRINCIPAL
<br />OBLIGATIONS this "Reaffirmation"' , dated as of April —,, 2011 from G. TERRY
<br />MCNELLIS,, a resident of the State of Minnesota ("McNellis") and MICHAEL
<br />SWENSON,, a resident of the State of Minnesota ("Swenson", and together with
<br />McNellis collectively, "Guarantors"' or "Key Principals")I,, in favor of the CITY OF
<br />ROSEVILLE, MINNESOTA, a municipal corporation and political subdivision of the
<br />State of Minnesota ("Issuer"),, WELLS FARGO BANK, NATIONAL
<br />ASSOCIATION,, a national banking association, as Trustee ("Trustee"),, and
<br />MUNIMAE PORTFOLIO SERVICES, LLC, a Maryland limited liability company
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<br />("Servicing Agent"�). Capitalized terms not otherwise defined herein shall have the
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<br />meaning given such term in the Indenture (hereinafter defined).
<br />WHEREAS, pursuant to and in accordance with the Act and the Trust Indenture
<br />by and between the Issuer and the Trustee dated as of July 1, 2007 the "Trust
<br />Indenture"), the Issuer issued and sold its Multifamily Housing Revenue Bonds
<br />(Centennial Apartments Project), Series 2007 in the principal amount of $,12,000,000 the
<br />((Bonds"'), to fund a loan in the principal amount of the Bonds to Gardens East Limited
<br />Partnership, a Minnesota limited partnership the "Borrower"), to finance the acquisition,
<br />rehabilitation and equipping of an approximately 190-unit multifamily residential rental
<br />development located in the State of Minnesota and known as Centennial Gardens
<br />Apartments; and
<br />WHEREAS,, the Issuer loaned the proceeds of the Bonds to the Borrower
<br />pursuant to that certain Loan and Financing Agreement (the "Loan and Financing
<br />Agreement"), dated as of July 1, 2007, between the Issuer and the Borrower; and
<br />WHEREAS,, at the request of the Borrower, the Servicing Agent and the Sole
<br />Holder agreed to extend the Outside Conversion Date of the Bonds to August 1, 2011,
<br />provided the Borrower satisfies the following conditions (i), pays a nonrefundable
<br />monthly extension fee equal to $,10,000 per month in accordance with the requirements
<br />set forth in a First Supplemental Indenture (hereinafter defined),, (ii), pledges a security
<br />interest in the capital contribution from the Investor limited partner of the Borrower in an
<br />amount equal to $,50,000 as additional security for the Borrower's Obligations, and (iii),
<br />posts an irrevocable letter of credit in the amount of $,480,000 as additional security for
<br />the Borrower's Obligations.
<br />WHEREAS,, the Issuer,, the Trustee,, the Borrower,, the Key Principals, the
<br />Servicing Agent, and the Sole Holder are executing and delivering the following
<br />documents dated as of the date hereof for the purpose of incorporating the additional
<br />obligations of the Borrower as referenced above.- (1), First Supplemental Trust Indenture,
<br />dated as of the date hereof, by and between the Issuer and the Trustee,, with the consent of
<br />the Borrower,, the Sole Holder,, and the Servicing Agent (the "First Supplemental
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