WASHINGTON SANTA ANA HOUSING PARTNERS, L.P

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2. The proposed lender of a Senior Loan (each a "Senior Lender") must be a state or federally chartered financial institution, a nonprofit corporation or a public entity that is not affiliated with Borrower; 3. Borrower demonstrates to the City's satisfaction that subordination of the City Deed of Trust and/or Affordability Restrictions on Transfer of Property is necessary to secure adequate acquisition; construction and/or permanent financing to ensure the viability of the Project, including the operation of the Project as affordable housing, as required by the Loan Documents. To satisfy this requirement, Borrower must provide to the City, in addition to any other information reasonably required by the City, evidence demonstrating that the proposed amount of the Senior Loan is necessary to provide adequate construction and/or permanent financing to ensure the viability of the Project, and adequate financing for the Project would not be available without the proposed subordination; 4. The subordination agreement(s) is structured to minimize the risk that the City Deed of Trust and/or Affordability Restrictions on Transfer of Property will be extinguished as a result of a foreclosure by the Senior Lender or other holder of the Senior Loan. To satisfy this requirement, the subordination agreement must provide the City with adequate rights to cure any defaults by Borrower, including: (i) providing the City or its successor with copies of any notices of default at the same time and in the same manner as provided to Borrower; and (ii) providing the City with a cure period of at least sixty (60) days to cure any default; 5. The subordination(s) of the City Loan is effective only during the original term of the Senior Loan and any extension of its term that is approved in writing by the City; 6. No subordination may limit the effect of the City Deed of Trust and/or the Affordability Restrictions on Transfer of Property before a foreclosure, nor require the consent of the Senior Lender prior to the City exercising any remedies available to the City under the Loan Documents; and 7. Upon a determination by the City Executive Director that the conditions in this Section have been satisfied, the Executive Director or his/her designee; will be authorized to execute the approved subordination agreement without the necessity of any further action or approval by the City Council. Execution of any subordination agreement will evidence and constitute the determination of the City that all requirements of this Section have been satisfied or waived. Notwithstanding anything to the contrary contained in the Loan Documents, with prior 30-days written notice to City, Borrower may refinance the Senior Loan with a non- profit, commercial, governmental or institutional lender without the prior consent of the City ("Refinanced Senior Indebtedness"), and the City hereby agrees to subordinate the lien of its Deed of Trust (but not the Affordability Restrictions on Transfer of Property) to the Refinanced Senior Indebtedness and the lien of any deed of trust or mortgage securing the Refinanced Senior Indebtedness, provided that the principal balance of the Refinanced 12. The Crossroads at Washington City NSP Loan Note