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8 <br /> PRIORITY AND SUBORDINATION AGREEMENT <br /> (Silver Lake Cottages) <br /> This PRIORITY AND SUBORDINATION AGREEMENT (this "Agreement") is <br /> dated as of , 2015, by and among the following parties (collectively, the <br /> "Parties"): HOUSING AUTHORITY OF THE CITY OF EVERETT, a public body corporate <br /> and politic of the State of Washington (the "Authority"); the STA 1'E OF WASHINGTON <br /> DEPARTMENT OF COMMERCE ("Commerce"); BANNER BANK (the "Bank"); <br /> SNOHOMISH COUNTY, a political subdivision of the State of Washington (the "County"), <br /> and THE CITY OF EVERETT, a municipal corporation organized and existing under the laws <br /> of the State of Washington (the "City"). Each of the Bank, Commerce, the City, and the <br /> County is referred to as a"Lender." <br /> RECITALS <br /> A. Authority's Interest as Owner of Property. On , 2015, the <br /> Authority acquired (the "Acquisition") the real property and improvements located•in <br /> Snohomish County, Washington, legally described on Exhibit A hereto (the "Property") from <br /> Silver Lake Cottages LLC, a Washington limited liability company ("Prior Owner"). The <br /> Authority owns and operates a multi-family residential housing project commonly known as <br /> Silver Lake Cottages(the-"Project")on the Property. <br /> B. Instruments Recorded Against the Property. Various parties previously <br /> provided loans, grants or other advances or contributions to Prior Owner to assist in the <br /> financing of the Project_(the "Existing Financing Obligations") and required Prior Owner • <br /> execute and record against the Property, certain instruments in the nature of covenants and <br /> agreements restricting the leasing,operation and/or management of the Property,and/or deeds <br /> of trust and other financing instruments securing the performance of certain monetary and <br /> other obligations (the "Existing Encumbrances"). In connection with the Acquisition, the <br /> Authority assumed Prior Owner's obligations under the Existing Financing Obligations and <br /> acquired the Property subject to the Existing Encumbrances. <br /> C. Bank's Interest. The Bank and the Authority have entered into a Loan <br /> Agreement dated _, 2015 (the "Bank Loan Agreement"), which sets forth the terms <br /> and conditions under which the proceeds of a $ loan have been and/or will be <br /> advanced to the Authority (the "Bank Loan"). The Bank Loan is evidenced by a Promissory <br /> Note dated _, 2015 (the "Bank Note"), made by the Authority to the Bank. <br /> Repayment of the Bank Note is secured by, among other security documents, a Deed of Trust, <br /> Assignment of Leases and Rents, Security Agreement and Fixture Filing in favor of <br /> , as trustee, and the Bank as beneficiary, recorded under Snohomish <br /> County recording number (the "Bank Deed of Trust"), encumbering the <br /> Property, and a UCC-1 Financing Statement, which shows the Authority as debtor, and the <br /> Bank as secured party, filed with the Department of Licensing, Uniform Commercial Code <br /> Division of the State of Washington (the "Bank Financing Statement"). The Bank Loan <br /> Silver Lake Cottages <br /> Priority and Subordination Agreement Page 1 <br /> 83 <br />