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Priority and Subordination Agreement 5 Teanaway Court
<br />deeds of trust, and other instruments to be recorded in connection with the Project, and to
<br />undertake certain covenants with respect to the subordination of the priority of their interests
<br />under recorded instruments in their favor to certain other instruments which may be put of
<br />record hereafter, as more particularly provided herein.
<br />AGREEMENT
<br />NOW, THEREFORE, in consideration of the mutual agreements and undertakings
<br />herein contained, the Parties agree as follows:
<br />1. DEFINITIONS. The following terms, when used in this Agreement (including, as
<br />appropriate, when used in the above recitals), shall have the following meanings:
<br />
<br />“Bankruptcy Proceeding” means any bankruptcy, reorganization, insolvency,
<br />composition, restructuring, dissolution, liquidation, receivership, assignment for the benefit of
<br />creditors, or custodianship action or proceeding under any federal or state law with respect to
<br />the Partnership, any guarantor of any of the Senior Indebtedness, any of their respective
<br />properties, or any of their respective partners, members, officers, directors, or shareholders.
<br /> “Casualty” means the occurrence of damage to or loss of any of the Property by fire
<br />or other casualty.
<br />“Condemnation” means any action or proceeding or notice relating to any proposed or
<br />actual condemnation or other taking, or conveyance in lieu thereof, of all or any part of the
<br />Property, whether direct or indirect.
<br />“Deeds of Trust” means, collectively, the Tax Exempt Bond Deed of Trust, the Taxable
<br />Deed of Trust, the Commerce Deed of Trust, the County Funds Sponsor Deed of Trust and the
<br />CPF Sponsor Deed of Trust.
<br />“Enforcement Action” means any of the following actions taken by or at the direction
<br />of a Subordinate Lender: the acceleration of all or any part of the Subordinate Indebtedness, the
<br />advertising of or commencement of any foreclosure or trustee’s sale proceedings with respect
<br />to all or a portion of the Property, the exercise of any power of sale, the acceptance of a deed
<br />or assignment in lieu of foreclosure or sale with respect to all or a portion of the Property, the
<br />collecting of Rents, the obtaining of or seeking of the appointment of a receiver for all or a
<br />portion of the Property, the seeking of default interest on the Subordinate Indebtedness, the
<br />taking of possession or control of any of all or a portion of the Property, the commencement of
<br />any suit or other legal, administrative, or arbitration proceeding based upon a Subordinate Note
<br />or any other of the Subordinate Loan Documents, the exercising of any banker’s lien or rights
<br />of set-off or recoupment with respect to the Subordinate Indebtedness, or the exercise of any
<br />other remedy under the Subordinate Loan Documents against the Partnership, any other party
<br />liable for any of the Subordinate Indebtedness or obligated under any of the Subordinate Loan
<br />Documents, or all or a portion of the Property, but does not include any actions against Sponsor
<br />with respect to any real property owned by Sponsor other than the Property, nor does it include
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