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<br />and lawful monies of the United States of America.
<br />
<br />5. Application of Payments. All payments shall be applied (i) first, to costs, interest and fees
<br />owing hereunder, (ii) second, to the payment of principal.
<br />
<br />6. Security. This County Grant is being reloaned by Grantor to Teanaway Court Associates
<br />LLLP (“Partnership”) the fee simple owner of the Property of which Grantor is the manager of the
<br />managing general partner (“Loan”). The Loan is evidenced by a Promissory Note (Sponsor Loan –
<br />County Funds) payable by the Partnership to Grantor (the “Partnership Note”) and secured by a Deed of
<br />Trust (Sponsor Loan – County Funds),executed by the Partnership in favor of the Grantor and recorded
<br />against the Property in the Official Records of Kittitas County, which Deed of Trust shall only be
<br />subordinate to (i) a deed of trust securing the repayment of a senior loan pursuant to that certain Priority
<br />and Subordination Agreement dated of even date herewith and signed by the Grantor and County
<br />(“Priority Agreement”), (ii) covenants recorded against the Property as described in the Priority
<br />Agreement and, if applicable (ii) such other encumbrances reasonably approved by the County in writing.
<br />Grantor has assigned its interest in the Loan, the Partnership Note and the Deed of Trust to the County as
<br />security for its obligations hereunder and under the County Covenant and Contract.
<br />
<br />7. Acceleration and Other Remedies. If elected by County pursuant to the following
<br />sentence, the entire balance due under this County Note shall be paid to County upon the earlier of any of
<br />the following (each, a "Default"): (i) the uncured default of Grantor under the this County Note or the
<br />Contract, after the expiration of applicable notice and cure periods (ii) an uncured default under the
<br />Covenant, after the expiration of applicable notice and cure periods; or (iii) the sale, lease or other transfer
<br />or conveyance of all or any part of the Project, or any interest therein (individually or collectively a
<br />"Transfer"), without the prior written consent of County. Upon the occurrence and during the continuance
<br />of a Default, County may, at County's option, declare the outstanding principal amount of this County
<br />Note, together with the then accrued and unpaid interest thereon and other charges hereunder, due and
<br />payable immediately. All costs of collection, including, but not limited to, reasonable attorneys' fees and
<br />all expenses incurred in connection with enforcing this County Note, may be added to the principal
<br />hereunder, and shall accrue interest as provided herein. Any delay or omission on the part of County in
<br />exercising any right hereunder, under the Contract or the Covenant shall not operate as a waiver of such
<br />right, or of any other right. The acceptance of payment of any sum payable hereunder, or part thereof,
<br />after the due date of such payment shall not be a waiver of County's right to either require prompt
<br />payment when due of all other sums payable hereunder. In addition, upon any Default, the County Grant
<br />and all outstanding amounts due under this County Note shall accrue interest at the default rate of ten
<br />percent (10%) per annum (based on a 360-day year and charged on the basis of the actual number of days
<br />elapsed) ("Alternate Rate").
<br />
<br />8. Successors and Assigns. Whenever "County" is referred to in this Note, such reference
<br />shall be deemed to include County, and its successors and assigns, including, without limitation, any
<br />subsequent assignee or holder of this County Note. All covenants, provisions and agreements by or on
<br />behalf of Grantor, and on behalf of any makers, endorsers, guarantors and sureties hereof which are
<br />contained herein shall inure to the benefit of County's successors and assigns. County may, at its option,
<br />assign its right to receive payment under this County Note without necessity of obtaining the consent of
<br />Grantor. Whenever "Grantor" is referred to in this County Note, such reference shall be deemed to
<br />include HopeSource, a Washington nonprofit corporation, and its approved successors and assigns,
<br />including, without limitation, any approved subsequent assignee or obligor of this County Note, if such
<br />approval is given by the County in writing. In no event shall Grantor assign or transfer any portion of this
<br />Note without the prior express written consent of County.
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<br />9. Costs of Enforcement. Grantor agrees to pay upon demand all reasonable costs and
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