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<br /> <br />Subordination Agreement (City of Santa Ana) Form 6456 Page 11 <br />Fannie Mae 08-13 © 2013 Fannie Mae <br /> [Crossroads at Washington] <br />4870-7010-6914v.2 0017787-000542 <br />that if Senior Lender is entitled to and elects to apply such proceeds to payment of <br />the principal of, interest on and other amounts payable under the Senior Loan, any <br />proceeds remaining after the satisfaction in full of the principal of, interest on and <br />other amounts payable under the Senior Loan shall be paid to, and may be applied <br />by, Subordinate Lender in accordance with the applicable provisions of the <br />Subordinate Loan Documents, provided however, Senior Lender agrees to consult <br />with Subordinate Lender in determining the application of Casualty proceeds, <br />provided further however that in the event of any disagreement between Senior <br />Lender and Subordinate Lender over the application of Casualty proceeds, the <br />decision of Senior Lender, in accordance with the rights under its Senior Loan <br />Documents, shall prevail. <br />(c) Insurance. <br />Subordinate Lender agrees that all original policies of insurance required pursuant to the <br />Senior Security Instrument shall be held by Senior Lender. The preceding sentence shall not <br />preclude Subordinate Lender from requiring that it be named as a loss payee, as its interest may <br />appear, under all policies of property damage insurance maintained by Borrower with respect to <br />the Mortgaged Property, provided such action does not affect the priority of payment of the <br />proceeds of property damage insurance under the Senior Security Instrument, or that it be named <br />as an additional insured under all policies of liability insurance maintained by Borrower with <br />respect to the Mortgaged Property. <br />(d) No Modification of Subordinate Loan Documents or Unsubordinated City <br />Regulatory Agreements. <br />Borrower and Subordinate Lender each agree that, until the principal of, interest on and all <br />other amounts payable under the Senior Loan Documents have been paid in full, it will not, without <br />the prior written consent of Senior Lender in each instance, increase the amount of any Subordinate <br />Loan, increase the required payments due under any Subordinate Loan, decrease the term of any <br />Subordinate Loan, increase the interest rate on any Subordinate Loan, or otherwise amend any <br />Subordinate Loan terms or any Unsubordinated City Regulatory Agreement in a manner that <br />creates an adverse effect upon Senior Lender under the Senior Loan Documents. Any <br />unauthorized amendment of the Subordinate Loan Documents or any Unsubordinated City <br />Regulatory Agreement or assignment of Subordinate Lender’s interest in any Subordinate Loan <br />without Senior Lender’s consent shall be void ab initio and of no effect whatsoever and Subordinate <br />Lender agrees that it shall not transfer or assign any Subordinate Loan or any Subordinate Loan <br />Document without the prior written consent of the Senior Lender. <br />11. Conversion, Modification or Refinancing of Senior Loan. <br />Subordinate Lender consents to any agreement or arrangement in which Senior Lender <br />waives, postpones, extends, reduces or modifies any provisions of the Senior Loan Documents , <br />including any provision requiring the payment of money. Subordinate Lender further agrees that <br />its agreement to subordinate hereunder shall extend to the Senior Loan following the Conversion <br />Date and the purchase by Permanent Lender of the Senior Loan and any amendments or additional <br />EXHIBIT 7