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Priority and Subordination Agreement 4 Teanaway Court
<br />Partnership's obligation to repay the County Funds Sponsor Note is secured by
<br />a Deed of Trust (Sponsor Loan - County Funds) for the benefit of Sponsor, to
<br />be recorded in Kittitas County, Washington (the “County Funds Sponsor
<br />Deed of Trust”). All documents identified in this subparagraph, and any
<br />documents executed by the Partnership in connection therewith, as the same
<br />may be amended from time to time, subject to the restrictions set forth in
<br />Section 5(b) below, are collectively referred to as the “County Funds
<br />Sponsor Loan Documents”.
<br />c. Sponsor’s and General Partners’ Interest as Optionee. Pursuant to the
<br />Partnership’s First Amended and Restated Agreement of Limited Liability
<br />Limited Partnership (the “Partnership Agreement”), the Sponsor has an
<br />unrecorded right of first refusal and the Managing General Partner and the
<br />Administrative General Partner have an unrecorded option with respect to the
<br />Project (together with any other rights of Sponsor and/or the General Partners
<br />to acquire the limited partner’s interest, under the Partnership Agreement or
<br />otherwise, the “Option”). The Option is not recorded.
<br />G. County’s Interest. In connection with the Project, the County provided an award
<br />to the Sponsor in the amount of $750,000 (the “County Award”) pursuant to that certain
<br />Homeless Housing Program Grant Agreement, Contract HH-2021-001-HopeSource-CIP, dated
<br />July 15, 2021, as amended by that certain Amendment No. 1 dated November 21, 2023, that
<br />certain Amendment No. 2 dated November 5, 2024, that certain Amendment No. 3 dated June
<br />3, 2025, and that certain Amendment No. 4 dated April 21, 2026 (as amended, assigned,
<br />restated, supplemented or otherwise modified from time to time, the “County Agreement”).
<br />The County Award is evidenced by that certain Kittitas County Note made by the Sponsor in
<br />favor of the County (the “County Note”). In connection with the County Award, the Partnership
<br />also executed that certain Affordable Housing Covenant in favor of the County dated on or
<br />about the date hereof to be recorded in Kittitas County, Washington (as amended, assigned,
<br />restated, supplemented or otherwise modified from time to time, the “County Covenant”). As
<br />security for the Sponsor’s obligations under the County Note, the County, Partnership, and
<br />Sponsor have entered into that certain Collateral Assignment of Deed of Trust and Promissory
<br />Note, dated on or about the date hereof to be recorded in Kittitas County, Washington (as
<br />amended, assigned, restated, supplemented or otherwise modified from time to time, the
<br />“County Assignment”), whereby Sponsor has collaterally assigned the Sponsor’s interest in the
<br />County Funds Sponsor Loan Documents to the County. All documents identified in this
<br />paragraph, and any documents executed by the Partnership or Sponsor in connection therewith,
<br />as the same may be amended from time to time, subject to the restrictions set forth in Section
<br />5(b) below, are collectively referred to as the “County Loan Documents”, provided, however,
<br />for the avoidance of doubt, as it pertains to statements of priority or subordination in this
<br />Agreement, the County Covenant shall not be considered part of the “County Loan
<br />Documents”, the intent being that the County Covenant shall have fourth (4th) priority as
<br />provided below.
<br />The Parties desire to provide herein for the relative priority of the various covenants,
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