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3 <br />assign the Project Funds allocated to Sponsor in the form of a loan (the “Loan”) to Merritt Mill to <br />develop, own and operate the Project; and <br /> <br />WHEREAS, the Project Funds, along with other funds, will be used to finance the <br />construction of the Project, a new forty-eight (48) unit affordable housing development owned by <br />Merritt Mill and serving low income families earning less than 60% of the area median income and <br />which will remain affordable for low income families throughout the term of the ninety nine (99) <br />year period of affordability. The Project will be located on Merritt Mill Road in Carrboro and <br />Chapel Hill, North Carolina. The Project dwelling units are to be constructed on the property more <br />particularly described in Exhibit A, Property Legal Description attached hereto and made a part of <br />this Agreement (hereinafter referred to as “the Property”); and <br /> <br />WHEREAS, Owner as a condition precedent to the awarding of funds, shall execute, <br />deliver and record this Declaration in the Office of the Register of Deeds of Orange County in order <br />to create certain covenants pertaining to the Property and running with the land for the purpose of <br />enforcement of the affordability requirements and agreeing to the terms of the Development <br />Agreement dated September 28, 2021 which is incorporated by reference herein, among the <br />County, CASA, and Merritt Mill Apartments, LLC. A copy of the Development Agreement <br />(hereinafter, “DEVELOPMENT AGREEMENT”) is on file with the Office of the Clerk to the <br />Orange County Board of County Commissioners. <br /> <br /> NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth <br />and of other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, <br />Owner intends, declares, and covenants that the regulatory and restrictive covenants set forth herein <br />governing the use, occupancy, and transfer of the Property shall be and are covenants pertaining to <br />the Property and running with the land for the term stated herein and are binding upon all <br />subsequent owners of the Property and for such term, except as specifically provided herein, and <br />are not merely personal covenants of Owner. <br /> <br />SECTION 1 REPRESENTATIONS, COVENANTS AND WARRANTIES OF OWNER <br /> <br />Owner hereby represents, covenants and warrants as follows: <br /> <br />A. It is contemplated that the Property and the Project will be used, during the ninety-nine (99) <br />years after Project Completion (defined as the Property acquired, constructed, and occupied <br />by a low-income family earning up to 60% of HUD area median income). <br />B. In the event Owner sells, transfers or exchanges the Property or any portion of the Property, <br />the following shall pertain: <br />1. Subject to the requirements of the DEVELOPMENT AGREEMENT, Owner may sell, <br />transfer, or exchange the Property to a non-profit fund, foundation, or corporation of <br />like purpose which is organized and operated exclusively for charitable and educational <br />purposes and which has established its tax exempt status under Section 501 (c)(3) of the <br />Internal Revenue Code, or to Orange County; provided, however, Owner shall obtain <br />the written agreement, in form satisfactory to Orange County, of any buyer or successor <br />or other person acquiring the Property or any interest therein, that such acquisition is <br />subject to the requirements of this Declaration and to the requirements of the <br />DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A