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against or delay in the Locality's exercise of its remedies under the Locality Loan Documents. The Locality shall not record a Notice of Default related to such initial notice during the period ninety (90) days after the date of such initial notice if such notice relates to a nonmonetary default or defaults under the Locality Loan Documents. During the term of such period MUFG shall have the right, but not the obligation, to cure any nonmonetary default under such initial notice. Notwithstanding the foregoing, if at any time following the date of the initial notice, there shall occur or be continuing a default in the payment of any amount due to the Locality under the Locality Loan Documents, the Locality shall have the right to, and in its sole discretion may, record a Notice of Default and proceed to foreclosure based upon any such nonpayment regardless of any extended cure period with respect to nonmonetary defaults. (c) MUFG has read, understands and approves the Locality Loan Documents and agrees to be bound thereby in the event of its foreclosure or acquisition of the Project. 2. Representations. MUFG hereby represents and warrants to the Locality that at the time of execution of this agreement, the Borrower is in substantial compliance with its obligations to MUFG under the terns of the MUFG Loan Documents, and MUFG has read and understands the Locality Loan Documents and agrees that in the event the Locality determines there is a conflict of terns between the Locality Loan Documents and the MUFG Loan Documents, the terms of the Locality Loan Documents shall prevail. 3. Attorney's Fees & Costs. If any party shall take any action to enforce or otherwise relating to this Agreement, the prevailing party or parties shall be entitled to recover reasonable attorney's fees and costs from the other party or parties. 4. Amendments. Amendments to this Agreement shall be in writing and signed by all the parties hereto. 5. Governing Law. This Agreement shall be construed in accordance with and be governed by the laws of California. 6. Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. 7. Severability. hi the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, it shall not invalidate or render unenforceable any other part of this Agreement. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. 2045/020587-0138 16400554.2