JAMBOREE HOUSING CORPORATION (2)

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and oversight rights in connection with any insurance claims or condemnation proceedings related to the Property and any decision regarding the use of insurance proceeds after a casualty loss or condemnation awards and Subordinating Party shall have no right to object to any such action or approval taken by Bank and shall consent thereto and be bound thereby. Subordinating Party shall execute such documents as Bank may require from time to time in order to assure compliance with the provisions of this Paragraph 8(a). (b) Receipt and Application of Proceeds from Bonds. With respect to all labor and material bonds and/or completion bonds that are issued from time to time to assure payment and completion of the Improvements and which name Bank and Subordinating Party (or any other party) as dual obligees, all proceeds that may become available from time to time under such bonds shall be held by Bank and disbursed by Bank and Subordinating Party shall have no right to hold or disburse any of such proceeds. Subordinating Party shall execute such documents as Bank may require from time to time in order to assure compliance with the provisions of this Paragraph 8(b). 9. NOTICES. Any notice, demand or request required or permitted to be delivered hereunder shall be deemed to have been duly and properly given at the time of such delivery if personally delivered (which shall include (i) delivery by means of professional overnight courier service which confirms receipt in writing and (ii) transmission by telecopier or telefacsimile machine capable of confirming transmission and receipt), or if mailed, forty-eight (48) hours after deposit in United States registered or certified mail, postage prepaid, return receipt requested, addressed to Subordinating Party or Bank, as the case may be, at their addresses set forth above. 10. ENTIRE AGREEMENT. This Agreement shall be the whole and only agreement with respect to the subordination of the effect of Subordinating Party's Security Documents to the lien or charge of the Deed of Trust and all disbursements and advances made thereunder, and shall supersede and cancel any prior agreements as to such subordination, including without limitation any provisions contained in Subordinating Party's Security Documents that provide for the subordination of the effect thereof to one or more deeds of trust. 11. SUBORDINATING PARTY'S REPRESENTATIONS WARRANTIES COVENANTS CONSENTS, APPROVALS AND ACKNOWLEDGEMENTS. Subordinating Party hereby warrants, represents, declares, agrees and acknowledges as follows: (a) For purposes of this Agreement, Subordinating Party acknowledges that Subordinating Party has been provided the opportunity to review the Loan Documents before executing this Agreement; (b) Bank, in making disbursements pursuant to the Loan Agreement, is under no obligation or duty to insure, nor has Bank represented that it will insure, the proper application of such proceeds by the person(s) to whom Bank disburses such proceeds, and any application or use of such proceeds for purposes other than as provided in any such agreement shall not defeat or render invalid, in whole or in part, the subordination provided for in this Agreement; (c) Bank has not made any warranty or representation of any kind or nature whatsoever to Subordinating Party with respect to (i) the application of the proceeds of the Loan being made by Bank to Borrower upon the security of the Deed of Trust, (ii) the value of the Property, the Improvements to be constructed thereon pursuant to the Loan Agreement, or the marketability or value thereof upon completion of such construction, or (iii) the ability of Borrower to honor its covenants and agreements with Bank or Subordinating Party; (d) Bank's release of any security for the Loan, including, without limitation, the reconveyance of any portion(s) of the Project from the lien of the Deed of Trust shall not constitute a waiver or relinquishment of Subordinating Party's unconditional subordination of the liens or charges of Subordinating Party's Security Documents against the Project to the lien or charge of the Deed of Trust; -5- 4821-4251-8639v.4 0096250-000012