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<br />title to the Property and/or the Project to any person, firm or <br />corporation other than the Developer and, except as provided in <br />said Agreement, whether such transfer of title be voluntary, <br />involuntary, or by operation of law. <br /> <br />d. All payments on this Note shall be, applied <br />first to the interest due on the Note, if applicable, and then to <br />the principal due on the Note. <br /> <br />e. In the event the Developer shall fail to pay <br />the payments when due, or otherwise breach the terms of this Note, <br />and if such failure be subsisting ten (10) days for monetary <br />breaches hereof, or thirty (30) days for other breaches hereof, <br />after written notice given in accordance with the Agreement, the <br />unpaid principal amount of this Note, together with accrued <br />interest and late charges, shall become due and payable, at the <br />option of the Agency, without further notice to the undersigned. <br />Failure of the Agency to exercise such option shall not constitute <br />a waiver of such default. <br /> <br />f. In the event that no advances are made under <br />this Note, and providing that the Developer provides the Agency <br />with a release of its obligations under the Agreement and/or this <br />Note to make any such advances, the Agency shall return the <br />original of this Note to the Developer upon written demand by the <br />Developer to do so. The Agency shall have the right to approve the <br />terms of such a release, with approval shall not be unreasonably <br />withheld. <br /> <br />g. The advance of the proceeds of this Note is <br />subject to the provisions of the Agreement, and the principal <br />amount to be repaid hereunder shall not exceed the actual principal <br />amount advanced by the Agency. <br /> <br />7. Subordinate Note. The indebtedness evidenced by <br />this Note is and shall be subordinate in right of payment to the <br />prior payment in full of any indebtedness owed by Developer in <br />accordance with the Public Assistance (as defined in the Agreement) <br />and any construction financing necessary for the development and <br />construction of the Project under the terms of documents executed <br />by the Developer and reasonably approved by the Agency. The <br />mortgage or deed of trust securing this Note is and shall be <br />subject and subordinate in all respects to the liens, terms, <br />covenants and conditions of any deed of trust or mortgage securing <br />the interests under the Public Assistance and the construction <br />financing and the Agency agrees to execute subordination agreements <br />if requested or required by such other lenders. <br /> <br />C - 3 <br /> <br />REDW\0006\DOC\001-7 <br />3/29/05 3:15 /rove <br />