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2 <br />I. USE OF FUNDS/SUBSIDY TYPE <br />A. The County, Sponsor and Owner hereby agree and acknowledge that the Project <br />Funds were awarded to Sponsor and that Sponsor is hereby assigning the right to <br />such Project Funds to the Owner. The County, on behalf of the Sponsor, is loaning <br />such funds to Owner in accordance with the terms of this Agreement. <br />B. The Sponsor and Owner shall be responsible for and ensure that Owner performs <br />the projects or tasks related to its allocation of Project funds as provided in Exhibit <br />B, Scope of Work, and within the Proposed Project Budget outlined in Exhibit C. <br />Exhibits B and C are hereby made a part of this Agreement and are incorporated by <br />reference, as it now reads or as it may be modified by the parties. Sponsor and <br />Owner agree that all Loan funds made available to the Owner shall be expended <br />solely on the Project. <br />C. The Owner may not request disbursement of funds under this Agreement until after <br />the property has been conveyed to Owner, a title insurance policy with the County <br />as a named insured purchased and the funds are needed for payment of eligible <br />costs. The amount of each request must be limited to eligible costs as determined <br />by the Orange County staff. <br />D. Said funds shall be disbursed by check made payable to the Owner. Sponsor <br />consents to the disbursement of funds directly from the County to Owner. <br />E. The Project Funds will be provided in the form of a deferred and forgivable loan, <br />as provided below. <br />II. AMOUNT OF BOND FUNDS/LOAN TERMS <br />The County shall make available to the Sponsor a loan of One Million Three Hundred Seventy <br />Three Thousand Three Hundred Sixty-Six Dollars ($1,373,366) at an interest rate of zero percent <br />(0%) pursuant to this Agreement. The investment will be secured by a forty (40) year Deed of <br />Trust and Security Agreement from Owner to a trustee for the benefit of the County (the “Deed of <br />Trust”) and a Promissory Note by Sponsor in favor of the County (“Note”, and collectively with <br />this Agreement, the Deed of Trust and the Declaration, as defined below, the “Loan Documents”), <br />forgivable at the end of 40 years. The County acknowledges and agrees that Sponsor shall loan <br />the Project Funds to the Owner to be used for the purposes specified in this Agreement. <br />LIEN POSITION; HYPOTHETCATION <br />1. At the time of the Loan closing the Loan will be subordinate to documents securing <br />the following existing liens: (a) a construction loan to Owner from Wells Fargo <br />Bank, National Association (the “Construction Loan”); (b) a grant to Sponsor from <br />the Town of Chapel Hill; and (c) a loan to Sponsor from the Town of Carrboro. At <br />the time of the conversion of the Project to its permanent phase, the Construction <br />Loan will be paid off and the Loan will be subordinated to a permanent loan from <br />Centrant Community Capital, Inc. (the “Permanent Loan”). <br />DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A