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SUBORDINATION AND INTERCREDITOR AGREEMENT
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<br />THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (this
<br />"Agreement") dated as of November 1, 2016, is made by and between CITY OF SANTA
<br />ANA, a charter city and municipal corporation ("Junior Lender") and CITIBANK, N.A., a
<br />national banking association ("Senior Lender") and acknowledged by GUEST HOUSE LP, a
<br />California limited partnership ("Borrower"). The date of this Agreement as set forth above is
<br />for reference purposes only, and this Agreement will not be effective and binding until the
<br />Closing Date (as defined in the Borrower Loan Agreement).
<br />RECITALS:
<br />A. Borrower has applied to the California Public Finance Authority, a joint exercise
<br />of powers agency, organized and existing under the laws of the State of California
<br />("Governmental Lender"), for a loan (the "Senior Loan") for the acquisition, rehabilitation,
<br />development, equipping and/or operation of a 72 -unit multifamily residential project located in
<br />the City of Santa Ana, Orange County, California, known or to be known as The Guest House
<br />(the "Property"),
<br />B. The Senior Loan is evidenced by (i) that certain Multifamily Note (Fixed Rate),
<br />dated as of the Closing Date, in the maximum principal amount of $9,855,000 made by Borrower
<br />payable to the order of Governmental Lender (the "Fixed Rate Note"), (ii) that certain
<br />Multifamily Note (Variable Rate), dated as of the Closing Date, in the maximum principal
<br />amount of $5,145,000 made by Borrower payable to the order of Governmental Lender (the
<br />"Variable Rate Note" and together with the Fixed Rate Note, the "Note"), and (iii) that certain
<br />Borrower Loan Agreement, dated as of the date hereof, by and between Borrower and
<br />Governmental Lender (the "Borrower Loan Agreement').
<br />C. The Senior Loan is secured by, among other things, that certain Multifamily Deed
<br />of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated as of the date
<br />hereof, executed by Borrower for the benefit of Governmental Lender (as the same may from
<br />time to time be extended, consolidated, substituted for, modified, increased, amended and
<br />supplemented, "Senior Security Instrument'), which Senior Security Instrument recorded
<br />concurrently herewith in Orange County, California ("Official Records") encumbers the
<br />Property.
<br />D. Borrower requested that Senior Lender enter into that certain Funding Loan
<br />Agreement dated as of the date hereof, between Governmental Lender and Senior Lender,
<br />pursuant to which Senior Lender will make a loan to Governmental Lender (the "Funding
<br />Loan"), the proceeds of which will be used to make the Senior Loan to Borrower pursuant to the
<br />Borrower Loan Agreement.
<br />E. The Senior Note, the Senior Security Instrument and the Borrower Loan
<br />Agreement have each been assigned by Governmental Lender to Senior Lender to secure the
<br />Funding Loan. The Borrower and Senior Lender have entered into that certain Construction
<br />Subordination and I(Anrereditor Agreement (HOME) The Guest House
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