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6.A. - Page 5 of 24 <br />SUBORDINATION AGREEMENT <br />THIS SUBORDINATION AGREEMENT (this "Agreement") is made and entered <br />into as of December , 2018 by and among (i) CITIBANK, N.A., a national banking <br />association ("Senior Lender"), (ii) CITY OF REDWOOD CITY, a municipal corporation <br />in the State of California (the "Subordinate Lender"), and (iii) KDF HALLMARK, L.P., a <br />California limited partnership ("Borrower"). <br />RECITALS: <br />A. Borrower has applied to Senior Lender for a loan in the maximum principal <br />amount of $3,000,000 (the "Senior Loan") for the recapitalization and/or operation of a project <br />located in the Redwood City, San Mateo County, California, known or to be known as the <br />Hallmark House Apartments (the "Property"). <br />B. The Senior Loan is evidenced by the Senior Note (as defined below), and will be <br />advanced to Borrower pursuant to the Loan Agreement (as defined herein) <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 Lender (as the same may from time to time be <br />extended, consolidated, substituted for, modified, increased, amended and supplemented, <br />"Senior Security Instrument"), which Senior Security Instrument encumbers the Property. <br />D. Pursuant to the Owner Participation Agreement (defined below) (i) <br />Subordinate Lender advanced to Borrower $500,000 from a grant of HOME Investment <br />Partnership funds ("HOME Funds") and (ii) the Redevelopment Agency of the City of <br />Redwood City ("Agency") loaned $150,000 from the Agency's Housing Set -Aside funds <br />("Agency Assistance" and collectively with the HOME Funds, the "Subordinate Loan"). <br />The Subordinate Lender, as housing successor to the Agency, has succeeded to the rights and <br />responsibilities of the Agency under the Owner Participation Agreement. The Subordinate <br />Loan was secured by placing a mortgage lien against the Property. <br />E. Citibank, N.A. (together with its successors and assigns, "Servicer"), wilI act as <br />the initial servicer of the Senior Loan. <br />As a condition to the making of the Senior Loan, Senior Lender requires that Junior Lender <br />execute and deliver this Agreement. <br />NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable <br />consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce the <br />making of the Senior Loan and to induce Senior Lender to consent to the Junior Loan and the <br />Junior Security Instrument, Junior Lender hereby agrees as follows: <br />REV: 12-06-18 VR <br />Page 2 of 21 <br />ATTY/AGR.2018.274/KDF Hallmark 11 <br />