JAMBOREE HOUSING CORPORATION (2)

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executed by Borrower for the benefit of Bank, and encumbering the Property and all Improvements to be constructed thereon. The Loan Agreement, the Note, the Deed of Trust and all other documents evidencing, securing or pertaining to the Loan are sometimes hereinafter collectively referred to as the "Loan Documents". E. As a condition precedent to Bank's making the Loan, Bank requires that the Deed of Trust shall unconditionally be and remain at all times a lien or charge upon the Project which is prior and superior to the liens or charges of Subordinating Party's Security Documents (but not to Subordinating Party's Restrictions, other than Sections 3.5 and 18 thereof). NOW, THEREFORE, in consideration of Bank's making the Loan to Borrower, and in consideration of the mutual promises and agreements hereinafter contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce Bank to make the Loan to Borrower, the parties to this Agreement do hereby agree as follows: 1. SUBORDINATION OF SUBORDINATING PARTY'S SECURITY DOCUMENTS. The Deed of Trust, and any and all renewals or extensions thereof and all amendments and modifications hereafter made thereto, and any and all disbursements made by Bank to or for the account or benefit of Borrower the repayment of which is secured thereunder, shall unconditionally be and remain at all times a lien or charge against the Project that is prior and superior to the liens or charges of Subordinating Party's Security Documents (but not to Subordinating Party's Restrictions, other than Sections 3.5 and 18 thereof), to the same extent and purpose as though Subordinating Party's Security Documents had been executed and recorded subsequent to the recording of the Deed of Trust and the making of each disbursement or advance made by Bank to Borrower the repayment of which is secured by the Deed of Trust, regardless of whether Borrower, at the time of any such disbursement or advance, may have been in default under the Loan Agreement, the Deed of Trust, or any of the other the Loan Documents and regardless of whether Bank was obligated to make any such disbursement or advance. Notwithstanding the foregoing, Bank shall not amend or modify the terms of the Loan and/or the Loan Documents without the prior written consent of the Subordinating Party if such amendment or modification has the effect of: (i) increasing or decreasing the amount of the Loan, except in the case of sums advanced by Bank in exercising its rights and remedies under the Loan Documents or as otherwise provided in Paragraph 2 of this Agreement; (ii) increasing the annual interest rate(s), including the default rate, above the rate(s) described in the Note; (iii) modifying the maturity date to be sooner than the stated maturity date of the Note; or (iv) having a materially adverse affect on Subordinating Party. For the avoidance of doubt, Subordinating Party's Restrictions, except Sections 3.5 and 18 contained therein, shall at all times be prior and superior to the Deed of Trust. 2. ALL DISBURSEMENTS UNDER THE LOAN SECURED BY THE DEED OF TRUST. Notwithstanding anything to the contrary set forth in the Loan Agreement or any other agreement between Bank and Borrower with respect to the disbursement of all or any portions of the proceeds of the Loan, any and all disbursements made by Bank to or for the account or benefit of Borrower or the Project in connection with the following, whether or not Bank is obligated to make such disbursements pursuant to the Loan Documents: (a) any costs or expenses incurred in complying with any laws, rules, regulations, or statutes or any directives of any governmental agencies or authorities having or exercising jurisdiction over the Project; (b) any sums advanced to pay for the cost of completing the construction of the Project, Project cost overruns and/or to lease -up and stabilize the Project made by Bank; and (c) any sums advanced by Bank for the payment of real estate taxes or assessments or insurance premiums, or any other sums advanced or obligations incurred by Bank in connection with the protection or preservation of any security given to Bank with respect to the Loan, including, without limitation, interest thereon shall be deemed to be, and in all events shall be, secured by the Deed of Trust and, as so secured, and regardless of whether Borrower at the time of any such disbursements may have been in default under the Loan Documents and regardless of whether Bank was obligated to make any such disbursements, shall be and remain a lien or charge against the Project that is unconditionally prior and superior to the lien and effect of Subordinating Party's Security Documents. -2- 4821-4251-8639v.4 0096250-000012