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6 <br /> INSURANCE: Borrower will obtain and maintain such insurance <br /> as the Bank may reasonably require and also <br /> exhibit or deliver such policy to the Bank and <br /> provide appropriate loss payable clauses in the <br /> insurance policy in favor of the Bank. <br /> SECURITY: A second security interest in the land and building <br /> and improvements located at 501 & 503 West <br /> Franklin St., Chapel Hill, N.C. and as described in <br /> the Orange County Installment Financing Proposal <br /> dated June 14, 1996. <br /> CONDITIONS TO <br /> FIRST ADVANCE: Prior to advancing proceeds for this loan, the <br /> following precedent conditions shall have occurred: <br /> The Bank shall have received, duly executed, all <br /> promissory notes, loan agreements, deeds of trust, <br /> security agreements, financing statements, <br /> borrowing authorization documents and <br /> resolutions, and other documents necessary or <br /> advisable in connection with the loan, all of which <br /> shall be in form and substance satisfactory to <br /> Orange County, and to the Bank and its counsel. A <br /> complete legal description of the collateral will be <br /> sent to the Bank, if this commitment is accepted. It <br /> should also be noted that the Bank will not require <br /> a new survey, appraisal, or environmental report. <br /> Borrower shall provide to the Bank such opinions <br /> of legal counsel satisfactory to the Bank as the <br /> Bank may request, including but not limited to an <br /> opinion of legal counsel to the Borrower that the <br /> transaction is authorized under Section 160A-20 of <br /> the North Carolina General Statutes, that interest <br /> on the Note is excludable from the gross income of <br /> the Bank under state and federal law, and that the <br /> Note meets the requirements of a "qualified tax- <br /> exempt obligation" under Section 265(b)(3) of the <br /> Internal Revenue Code of 1986, as amended. <br /> Borrower shall provide to the Bank a copy of the <br /> estimates for the renovation of the subject property. <br />