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2021-531-E-Housing-CASA-Affordable Housing Bond – Perry Place Rental Development
Revised 06/21 ORANGE COUNTY—DEPARTMENT USE ONLY ______________________________________________________________________________ Party/Vendor Name: CASA Party/Vendor Contact Person: Jess Brandes Contact Phone: 919-307-3429 Party/Vendor Address: PO Box 12545 City Raleigh State: NC Zip: 27605 Department: Housing Amount: $1,373,366 Purpose: Affordable Housing Bond – Perry Place Rental Development Budget Code(s): 61370035- 889111-30003 and 61370035-889112-30003 Vendor # 61068 (N/A if new vendor) Vendor is a BOCC consultant? Yes No Contract Type: (Check one) New Renewal Amendment Effective Date 9/28/21 Approved by Board Yes No Agenda Date: 6/2/17 --- For Section XIV. c. contracts only, Approved by Board in Current FY Budget Yes No This agreement is approved as to technical form and content and I as Department Director affirmatively state work on this project has not been initiated prior to execution of the agreement: Department Director’s Signature ________________________________________ Date: ________ Agreements for emergency services or repair are not subject to the above affirmation. If services related to this agreement have already begun or been completed please briefly describe the nature of the emergency condition that was addressed: Information Technologies (Applicable only to hardware/software purchases or related services) This agreement has been reviewed and is approved as to information technology content and specifications: Office of the Chief Information Officer___________________________________ Date: ________ Risk Management This agreement is approved for sufficiency of insurance standards, specifications, and requirements: Office of the Risk Management Officer___________________________________ Date: _________ Financial Services This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act: Office of the Chief Financial Officer ____________________________________ Date: _________ Legal Services This agreement is approved as to legal form and sufficiency: Office of the County Attorney __________________________________________Date: ________ Clerk to the Board Received for record retention: All Docusign contracts must be copied to the Clerk upon completion: occlerkdocs@orangecountync.gov The following signature block is for hard copies only and is not required for Docusign contracts: Office of the Clerk to the Board __________________________________________Date:_________ DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 9/28/2021 9/28/2021 9/29/2021 9/29/2021 BT:834055v4 NORTH CAROLINA ORANGE COUNTY This is an AGREEMENT among ORANGE COUNTY, a political subdivision of the State of North Carolina, (hereinafter referred to as the “County” or “Orange County”), CASA, a North Carolina non-profit corporation, (hereinafter referred to as “Sponsor”) and Merritt Mill Apartments LLC, a North Carolina limited liability company, (hereinafter referred to as “Merritt Mill” or “Owner”). The effective date of this agreement is September 28, 2021. WITNESSTH WHEREAS, Sponsor submitted applications for funding to the County to assist in the construction of a 48-unit affordable apartment development in Carrboro and Chapel Hill, North Carolina, to be known as Perry Place (the “Project”), which applications are incorporated by reference into this Agreement and are on file in the office of the Orange County Department of Housing and Community Development; and WHEREAS, the County awarded Sponsor the total sum of $1,373,366.00 in FY 2016 Affordable Housing Bond Program funds (referred to also as “Project Funds”) in the form of a loan to Sponsor to assist in the construction of the Project; and WHEREAS, the Sponsor is the managing member of Merritt Mill and Merritt Mill will develop, own and operate the Project, and WHEREAS, the Sponsor wishes to assign the allocation of Project Funds to Merritt Mill so that Merritt Mill can develop, own and operate the Project, and Sponsor has agreed that throughout the term of the Agreement that Sponsor, along with Merritt Mill, will be responsible to the County for Merritt Mill’s performance of the terms of the Agreement; and WHEREAS, because Sponsor has agreed to be, along with Merritt Mill, responsible to the County for Merritt Mill’s performance of the terms of the Agreement the County has agreed to assign the Project Funds allocated to Sponsor in the form of a Loan (the “Loan”) to Merritt Mill to develop, own and operate the Project; and WHEREAS, the Project Funds, along with other funds, will be used to finance the construction of the Project, a new forty-eight (48) unit affordable housing development owned by Merritt Mill and serving low income families earning less than 60% of the area median income and which will remain affordable for low income families throughout the term of the ninety-nine (99) year period of affordability. The Project will be located on Merritt Mill Road in Carrboro and Chapel Hill, North Carolina. The Project dwelling units are to be constructed on the property more particularly described in Exhibit A, Property Legal Description attached hereto and made a part of this Agreement (hereinafter referred to as “the Property”). NOW, THEREFORE, in consideration of the mutual covenants, promises, and representations contained herein, it is agreed between the parties hereto as follows: DEVELOPMENT AGREEMENT DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 2 I. USE OF FUNDS/SUBSIDY TYPE A. The County, Sponsor and Owner hereby agree and acknowledge that the Project Funds were awarded to Sponsor and that Sponsor is hereby assigning the right to such Project Funds to the Owner. The County, on behalf of the Sponsor, is loaning such funds to Owner in accordance with the terms of this Agreement. B. The Sponsor and Owner shall be responsible for and ensure that Owner performs the projects or tasks related to its allocation of Project funds as provided in Exhibit B, Scope of Work, and within the Proposed Project Budget outlined in Exhibit C. Exhibits B and C are hereby made a part of this Agreement and are incorporated by reference, as it now reads or as it may be modified by the parties. Sponsor and Owner agree that all Loan funds made available to the Owner shall be expended solely on the Project. C. The Owner may not request disbursement of funds under this Agreement until after the property has been conveyed to Owner, a title insurance policy with the County as a named insured purchased and the funds are needed for payment of eligible costs. The amount of each request must be limited to eligible costs as determined by the Orange County staff. D. Said funds shall be disbursed by check made payable to the Owner. Sponsor consents to the disbursement of funds directly from the County to Owner. E. The Project Funds will be provided in the form of a deferred and forgivable loan, as provided below. II. AMOUNT OF BOND FUNDS/LOAN TERMS The County shall make available to the Sponsor a loan of One Million Three Hundred Seventy Three Thousand Three Hundred Sixty-Six Dollars ($1,373,366) at an interest rate of zero percent (0%) pursuant to this Agreement. The investment will be secured by a forty (40) year Deed of Trust and Security Agreement from Owner to a trustee for the benefit of the County (the “Deed of Trust”) and a Promissory Note by Sponsor in favor of the County (“Note”, and collectively with this Agreement, the Deed of Trust and the Declaration, as defined below, the “Loan Documents”), forgivable at the end of 40 years. The County acknowledges and agrees that Sponsor shall loan the Project Funds to the Owner to be used for the purposes specified in this Agreement. LIEN POSITION; HYPOTHETCATION 1. At the time of the Loan closing the Loan will be subordinate to documents securing the following existing liens: (a) a construction loan to Owner from Wells Fargo Bank, National Association (the “Construction Loan”); (b) a grant to Sponsor from the Town of Chapel Hill; and (c) a loan to Sponsor from the Town of Carrboro. At the time of the conversion of the Project to its permanent phase, the Construction Loan will be paid off and the Loan will be subordinated to a permanent loan from Centrant Community Capital, Inc. (the “Permanent Loan”). DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 3 2. The County agrees to enter into a subordination agreement, subordinating the lien, operation and effect of the Loan Documents to the lien, operation and effect of the documents evidencing and securing the Permanent Loan. 3. The Deed of Trust shall be given by Owner to secure the indebtedness of Sponsor. Owner will derive a material and direct benefit from the loan evidenced by the Note, and in accordance therewith, Owner agrees that such interest and benefit are sufficient consideration to support the Deed of Trust executed by Owner. Owner expressly acknowledges that it has conveyed and granted to the trustee identified in the Deed of Trust and such trustee’s successors and assigns, in trust, with power of sale the property more particularly described therein. Owner further acknowledges that all terms and conditions of the Deed of Trust are incorporated herein by reference and that Owner is bound by all of the terms and conditions set forth in the Deed of Trust. In the event of a default by Sponsor under the Note, Owner expressly acknowledges, covenants, and agrees that the County shall have all rights and remedies pursuant to the Deed of Trust for default. Owner expressly agrees that, upon such default, the County may elect to enforce any rights and remedies which it may have under the Deed of Trust. The foregoing provisions are set forth and made by Owner as an inducement to the County to enter into the Loan. III. TIMELINESS Owner shall complete the Project by December 31, 2022. However, in the event of any alterations or addition or circumstances beyond the control of the Owner, which in the opinion of the Director of the County’s Department of Housing and Community Development Department will require additional time for completion of the Project, then in that case, the time of completion may be extended by the County Manager in writing for a period of time not to exceed six (6) months , if feasible. Any further allowable extension will require the approval of the Orange County Board of County Commissioners. IV. DURATION OF THE AGREEMENT This Agreement will remain in effect for the Period of Affordability as provided in Section V, Affordability Requirements, the term of which is ninety-nine (99) years from proper recording of the Loan Documents in the Orange County Registry. V. AFFORDABILITY REQUIREMENTS A. Owner agrees to lease the Project dwelling units located at its Perry Place development to households whose income does not exceed 60% of the HUD area median income by family size, with priority given to homeless and/or disabled households, throughout the 99 year Period of Affordability. The area median income by family size is determined by the U.S. Department of Housing and Urban Development (“HUD”) and amended from time to time. Residential leases shall not exceed one year in term. DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 4 B. Each of the Project dwelling units must remain affordable during the “Period of Affordability”, which is ninety-nine (99) years. Owner retains full responsibility for compliance with the affordability requirements for the Project dwelling units, unless affordability restrictions are terminated due to the sale of the Property to a non-qualified buyer, in which event the Resale Provisions of this Agreement pertain. Owner shall assure compliance with affordability of each of the Project dwelling units by having recorded that certain Declaration of Restrictive Covenants made by Owner, dated on or about the date hereof, the form of which is attached hereto as Exhibit D (hereinafter, “the Declaration”) on the Property. This Declaration shall constitute and remain a first lien on the Property during the Period of Affordability. The Period of Affordability starts from the date of recording of the Declaration and continues for a period of ninety-nine years thereafter. C. Owner agrees to the affordability requirements as provided herein and the Resale Provisions provided below and in Section 4B of the Declaration. D. It is further the responsibility of Owner to rerecord the Declaration periodically and no less often than one day less than every 30 years from the date hereof for the purpose of renewing the rights of first refusal in the Property or portion thereof including any leasehold interest in the Property or portion thereof. Orange County retains the right to periodically and every 30 years after the first recording of the Declaration to register, with the Register of Deeds of Orange County, a notice of preservation of the restrictive covenants on the Property as provided in North Carolina General Statute § 47B-4 or any comparable preservation law in effect at the time of the recording of the notice of preservation. It is the intent of this Section of this Agreement that the 99-year duration of the Declaration be accomplished and that any future owner of the Property, Owner, and Orange County will do what is necessary to ensure the same is not extinguished by N.C. Gen. Stat. § 41-29 or any comparable law purporting to extinguish, by the passage of time, preemptive rights in the Property and by the Real Property Marketable Title Act or any comparable law purporting to extinguish, by the passage of time, non possessory interests in real property. Owner and the County agree to do what each must do to accomplish the 99-year duration of the Declaration. E. Resale Provisions Owner shall assure compliance with affordability of each of the Project dwelling units through the Declaration. The Declaration shall include at least the following elements in its resale provisions: a. If Owner no longer uses the Property as rental property or is unable to continue ownership, then the Owner must sell, transfer, or otherwise dispose of its interest in the Property only to an agency with similar interest in affordable housing and serve families with incomes not exceeding 60% of the HUD area median household income by family size at the time of the transfer. The non-profit fund, foundation, or corporation of like purposes must have established its tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 5 b. However, if the Property is sold, transferred, or otherwise disposed of other than to an agency with similar interest in affordable housing during the period of affordability, the Right of First Refusal provision in the County’s Long-Term Housing Affordability Policy must be followed and the net sales proceeds (sales price less: (1) selling cost, (2) the unpaid principal amount of the original first mortgage and (3) the unpaid principal amount of the initial County contribution and any other initial government contribution secured by a deferred payment promissory note and deed of trust) or “equity” will be divided 50/50 by the seller of the Property and the County. c. The resale provision shall remain in effect for the full affordability period – 99 years. F. Any proceeds from the recapture of funds under this provision will be used to facilitate the acquisition, construction, and rehabilitation of housing for the purposes of promoting affordable housing. VI. OWNER PERFORMANCE UNDER THIS AGREEMENT A. Owner agrees to lease the Project dwelling units to households whose income does not exceed 60% of the HUD area median income by family size, as determined by HUD and amended from time to time, with priority given to homeless and/or disable households. Monthly rents must not exceed the HUD Published Fair Market Rents in effect at the time of occupancy. Residential leases shall not exceed one year in term. B. Owner shall acquire the Property and construct the Project dwelling units. The Project dwelling units shall be occupied no later than six months after Project completion. In the event Owner is unable to complete its obligations to acquire, construct, and occupy the Project dwelling units within this time or by the extensions approved by the County under the terms of this Agreement, Owner will be required to repay the full amount of the County’s outstanding loan as provided in the County Loan Documents. C. Owner shall ensure the Project dwelling units meet the Section 8 Housing Quality Standards (HSQ) prior to leasing. All construction and repair work must be completed in accordance with applicable building and zoning ordinances and N.C. Housing Finance Agency Energy Standards. D. Owner is responsible for verifying the income of prospective tenants and maintaining eligibility data. Owner shall maintain tenant files as part of its Books and Records as required and for the period of time required in Section VIII. C.3 of this Agreement. Owner must provide the County an initial occupancy report verifying the income eligibility of all tenants at the time of initial lease -up. Owner must furnish the County with an annual report of the Project dwelling units by July DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 6 31 of each year thereafter certifying that all tenants earn less than 60% of the HUD area median income by family size. E. Each Project dwelling unit must have a value that does not exceed 100% of its appraised value. An independent, qualified appraiser must conduct the appraisal. F. Owner must submit an annual rental operations budget to the County each year at least sixty days prior to the July 1 beginning date for the fiscal year. G. Owner agrees and authorizes the County to conduct on-site reviews, examine client and contractor records, client applications and to conduct any other procedures or practices to assure compliance with these provisions. H. Owner agrees to not violate any State or Federal laws, rules or regulations regarding a direct or indirect illegal interest on the part of any employee or elected official of the Owner in the Project or payments made pursuant to this Agreement. I. Owner shall adopt the audit requirements of the Office of Management and Budget (hereinafter "OMB") Circular A-110, "Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations," and Circular A- 122, "Cost Principles for Nonprofit Organizations," and OMB Circular A-133, "Audits of Institutions of Higher Education and Other Non -Profit Institutions." Owner shall submit to the County copy of said audit report. Owner shall permit the authorized representatives of the County, HUD and the Comptroller General of the United States to inspect and audit all data and reports of the Owner relating to its performance under the Agreement. J. County shall provide, upon request, copies of all laws, regulations and orders cited in this Agreement. K. Owner certifies by executing this Agreement that Owner has not been identified, and has not utilized the services of any agent or subcontractor identified, on the list created by the State Treasurer pursuant to G.S. 147-86.58. By executing this Agreement Provider certifies that Provider has not been identified, and has not utilized the services of any agent or subcontractor identified, on the list created by the State Treasurer pursuant to G.S. 147-86.81. By executing this Agreement Provider affirms Provider is and shall remain in compliance with Article 2 of Chapter 64 of the North Carolina General Statutes. L. Owner hereby assures and certifies that it will comply with the regulations, policies, guidelines and requirements with respect to the acceptance and use of Project Funds in accordance with the policies of the County. Also, Owner certifies with respect to the Project that the Project will be conducted and administered in compliance with: 1. Title VIII of the Civil Rights Act of 1968 (Pub. L. 90-208, 42 U.S.C. Sec 2000d at seq.), as amended; and that the Owner will administer all programs and DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 7 activities related to housing and community development in a manner to affirmatively further fair housing; 2. Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112), as amended, and implementing regulations when published in effect; 3. The Age Discrimination Act of 1975 (Pub. L. 94135), as amended, and implementing regulations when published for effect; 4. The Fair Housing Act (42 U.S.C. 3601-20); 5. Lead Based Requirements at 24 CFR Part 35 VII. ADMINISTRATION AND REPORTING REQUIREMENTS A. Owner shall submit to the County a quarterly Progress Report no later than the fifth day of the months of January, April; July; October until the activity has been reported completed. B. After completion, Owner is responsible for verifying the income of prospective tenants and maintaining eligibility data. Owner shall maintain tenant files as part of its Books and Records as required and for the period of time required in Section VIII. C.3 of this Agreement. Owner must provide the County an initial occupanc y report verifying the income eligibility of all tenants at the time of initial lease-up. Owner must furnish the County with an annual report of the Project dwelling units by July 31 of each year thereafter certifying that all tenants earn less than 60% of the HUD area median income by family size. VIII. MISCELLANEOUS PROVISIONS A. Termination of Agreement. The full benefit of the Project will be realized only after the completion of the affordability periods for all Project dwelling units. It is the County's intention that the full public benefit of the Project shall be completed under the auspices of the Owner for the assisted units as follows: 1. In the event that the Owner is unable to proceed with any aspect of the Project in a timely manner; and County and the Owner determines that a reasonable extension(s) for completion will not remedy the situation, then Owner will retain responsibility for requirements for any dwelling units assisted and County will make no further payments to the Owner. 2. Subject to the rights of any senior lender, in the event that the Owner, prior to the contract completion date, is unable to continue to function due to, but, not limited to, dissolution or insolvency of the organization, its filing a petition for bankruptcy or similar proceedings, or is adjudged bankrupt or fails to comply or perform with provisions of this agreement, then the Owner must sell, transfer, or otherwise dispose of its interest in the Property only to the County or an agency with similar interest in affordable housing DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 8 and serve families with incomes not exceeding 80% of the area median household income by family size, as determined by HUD at the time of the transfer. B. Default, Remedies. This Agreement may be terminated by a non-defaulting party upon an event of default hereunder, after written notice thereof and thirty (30) days grace period in which the defaulting party may act to cure. As used herein, the term "an event of default" shall mean and refer to a failure or act of omission by either party with respect to any undertaking, obligation, covenant or condition as set forth in this Agreement. With respect to any event of default, the non-defaulting party may exercise any right available to it at law or in equity with respect to such default. C. Books and Records. The Owner shall maintain records of its grant requirements under this contract for a period of not less than five (5) full fiscal years following the contract completion date. 1. The Owner shall ensure access to records and financial statements, as necessary, to provide effective monitoring and evaluation of project performance. Additionally, the Owner shall submit a copy of its annual audit to the County. 2. Upon reasonable advance notice, County or its authorized representatives may from time to time inspect, audit, and make copies of any of Owner’s records that relate to this contract. If any audit by County discloses that payments to the Owner were in excess of the amount to which the Owner was entitled under this contract, Owner shall promptly pay to County the amount of such excess. If the excess is greater than 1% of the contract amount, Owner shall also reimburse County its reasonable costs incurred in performing the audit. 3. The Owner shall maintain files of all tenants, regardless of length of occupancy, residing in assisted units. Documentation shall verify eligibility for federal assisted housing at the point of initial tenancy and every subsequent year thereafter for the period of affordability. Information maintained shall include: tenant income level; name of family members; ethnic data; family type - e.g. female head of household; disability status; and monthly rent. 4. The Owner shall maintain records verifying the affordability of the dwelling units. D. Notices. Any notice shall be in writing and shall be given by depositing the same in the United States mail, post-paid and registered or certified, and addressed to the party to be notified, with return-receipt requested, or by delivering the same in person to an officer or principal of such party. Notice deposited in the mail in the manner here in above described shall be effective upon mailing. For purposes of Notice, the addresses of the parties shall, unless changed as hereinafter provided, be as follows: DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 9 To the County Orange County c/o Housing, Human Rights and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director To the Owner: Merritt Mill Apartments LLC 604 West Jones Street Raleigh, NC 27603 To the Sponsor: CASA 604 West Jones Street Raleigh, NC 27603 Any of the parties may change the person or address to which any future Notice shall be given as herein provided E. No Assignment. No transfer or assignment of the interest of the Sponsor or Owner in this Agreement shall occur without the prior written consent of the County; neither may the Sponsor or Owner assign this Agreement without the prior written consent of County. F. Conflict of Interest. The Owner agrees to abide by the provisions of 24 CFR 570.611 with respect to conflicts of interest, and covenants that it presently has no financial interest and shall acquire any financial interest, direct or indirect, that would conflict in any manner or degree with the performance of services required under this Agreement. The Owner further covenants that in performance of this Agreement no person having such a financial interest shall be employed or retained by the Owner hereunder. These conflicts of interest provisions apply to any person who is an employee, agent, consultant, or elected official or appointed official of the County, or any designated public agencies or subrecipients that are receiving funds under the County HOME Investment Partnership Program. G. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. H. Indemnification. To the extent legally possible, Owner shall indemnify and hold County, its officers, agents, and employees, harmless from and against any and all claims, actions, liabilities, costs, including attorney fees and other costs of defense, arising out of or in any way related to any act or failure to act by Owner, its employees, agents, officers, and contractors in connection with this contract. In the event any such action or claim is brought against County, Owner shall, upon County's tender, defend the same at Owner’s sole cost and expense, promptly DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 10 satisfy any judgment adverse to County or to County and Owner jointly, and reimburse the County for any loss, cost, damage, or expense, including attorney fees suffered or incurred by the County. I. Subcontracting. The Owner shall not subcontract work under this Agreement, in whole or in part, without the County's prior written approval. The Owner shall require any approved subcontractor to agree, as to the portion subcontracted, to comply with all applicable federal, state, and local laws, rules, ordinances, and regulations at all times and in the performance of the work and to comply with all applicable obligations of Owner specified in this contract. Notwithstanding County's approval of a subcontractor, Owner shall remain obligated for full performance of this contract and County shall incur no obligation to any subcontractor. The Owner shall indemnify, defend, and hold County harmless from all claims of its contractors. J. No Joint Venture or Agency. The County, Owner each agree and acknowledge that nothing contained herein or otherwise, including, without limitation, any act of the County, Owner under this Agreement, shall be deemed or construed to create any relationship of joint venture, partnership or agency between the parties. K. Effect of Waiver or Forbearance. No failure by the County to insist upon the strict performance of any term or condition of this Agreement, or to exercise any right or remedy upon the breach by Owner of any of its obligations, agreements, or covenants hereunder, shall be a waiver of such affected term or condition or of such breach; nor shall any forbearance by the County to seek a remedy for any breach by Owner be a waiver by the County of its rights and remedies with respect to that or any other breach. L. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of North Carolina. Any litigation arising out of this Agreement shall be brought in courts sitting in North Carolina, with venue in Orange County. M. Severability. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by the fact that for any reason any other provision may be invalid or unenforceable in whole or in part. If any provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be or become invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. The County and Owner agree to substitute for such invalid or unenforceable provision of this Agreement, or the application thereof determined to be invalid or unenforceable, such other provision as most closely approximates, in a lawful manner, such invalid, illegal or unenforceable provision. If the County and Owner cannot agree, they shall apply to a court of competent jurisdiction to substitute such provision as the court deems reasonable and judicially valid, legal DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 11 and enforceable. Such provision determined by the court shall automatically be deemed part of this Agreement ab initio. N. Equal Opportunity. The Owner shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, political affiliation or belief, age, handicap, or familial status in the implementation of the Project. O. Headings. Headings are for convenience only and shall not be used to interpret or construe its provision. P. Gender; Singular and Plural. As used herein, the neuter gender includes the feminine and masculine. The masculine includes the feminine and neuter, and the feminine includes the masculine and neuter and each includes a corporation, partnership or other legal entity when the context so requires. The singular number includes the plural and vice versa, whenever the context so requires. Q. Recording. The parties hereto agree that upon notice to the other and at its own cost and expense, a party may record this Agreement in the Office of Register of Deeds for Orange County. R. Compliance with Laws. To the extent applicable, each party hereto agrees to comply with all laws, ordinances and regulations affecting the Property from and after the date hereof. Without limiting the generality of the foregoing, Owner shall comply with all federal, state and local laws, regulations and ordinances applicable to the expenditure of funds provided by the County, to purchase and develop the Property. S. Publicity; Signage. The Owner agrees to provide such publicity with respect to the County's participation in the development of the Property as the County shall reasonably require. Any signage at the Property shall acknowledge the County's role and contribution. T. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute on and the same instrument. U. No Third Party Rights. The parties hereto covenant and agree that nothing contained in this Agreement or any act by the County, Owner shall be deemed or construed by the parties or any third party to create any relationship of third party beneficiary, including third party principal or agent, or to create any right, claim or cause of action against the County, Owner or any of their respective officers, agents or employees by any third party. V. Performance of Government Functions. Notwithstanding anything in this Agreement which may be to the contrary, nothing contained in this Agreement shall in any way stop, limit or impair the County from exercising or performing any regulatory, policing or governmental powers or functions with respect to the DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 12 Property including, without limitation, inspection of the Property in the performance of such functions. W. Duration of Agreement. This Agreement shall be effective on the date of execution and shall remain in effect during the period of affordability required by the Act under 24 CFR Part 92. X. Signatures. This Agreement together with any amendments or modifications may be executed electronically. All electronic signatures affixed hereto evidence the intent of the Parties to comply with Article 11A and Article 40 of North Carolina General Statute Chapter 66. [SIGNATURE PAGE TO FOLLOW] DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A BT:834055v4 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have set their hands and seals on the day and year first above written. MERRITT MILL APARTMENTS, LLC By: CASA, a North Carolina nonprofit corporation, Managing Member By: _______________________________ Name: _____________________________ Title: ______________________________ CASA By: ________________________________ Name: ______________________________ Title:________________________________ ORANGE COUNTY, NORTH CAROLINA By: __________________________________ Bonnie Hammersley, County Manager This document has been preaudited in accordance with the N.C. Local Government and Fiscal Control Act. ____________________________ Gary Donaldson, Finance Director Approved as to form and legality ____________________________ Anne Marie Tosco, Staff Attorney DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A Mary Jean Seyda CEO Mary Jean Seyda CEO BT:834055v4 Exhibit A Property Legal Description New Lot 1 BEGINNING at an Existing Iron Pipe in the northern right-of-way of Merritt Mill Road (Highway Map Book 1, Page 176), said iron pipe having NC Grid Coordinates of N=783,021.94’, E=1,979,304.66’, the POINT AND PLACE OF BEGINNING; and continuing from said iron pipe along said Merritt Mill Road South 80˚ 54' 43" West 123.19 feet to an Existing Iron Pipe in the right of way of said Merritt Mill Road; thence South 81°47'44" West a distance of 132.37 feet to a point, said point being the Southeast corner of Roscoe B. Farrow II (PIN# 9778839033 / Deed Book 6587, Page 356); thence along the line of Roscoe B. Farrow II, Roberts Street (a 50’ wide Public R/W), and the heirs of Ruthena Sanford (PIN# 9778839117 / Estate File 19-E-525) North 08°57'20" West a distance of 364.55 feet passing an Iron Pipe Set at 5.00 feet, to an Existing Iron Rod on the Southern line of PS NC III LP (PIN# 9778839403 / Deed Book 5704, Page 234); thence with the line of PS NC III LP the following four (4) calls: South 82°58'49" East a distance of 134.78 feet to an Existing Iron Pipe; thence South 82°58'49" East a distance of 150.29 feet to an Existing Iron Pipe; thence South 82˚ 58' 49" East 50.05 feet to an Existing Iron Pipe; thence North 02˚ 50' 00" West 34.56 feet to an Existing Iron Pipe on the Northwest corner of Chapel Hill Board of Education (PIN# 9778936524 / Deed Book 222, Page 352); thence with the line of Chapel Hill Board of Education South 54˚ 40' 01" East 145.77 feet to an Existing Iron Pipe on the Northwest corner of Terry Carver (PIN#9778934164 / Deed Book 5269, Page 274); thence with the line of Terry Carver the following two (2) calls: South 21˚ 20' 46" East 95.62 feet to an Existing Iron Pipe; thence South 21˚20' 46" East 82.93 feet to an Existing Iron Rod on the northern R/W of Merritt Mill Road; thence along the northern R/W of Merritt Mill Road the following two (2) calls: South 71˚ 19' 10" West 188.87 feet to an Existing Iron Pipe; thence South 80˚ 54’ 43" West 26.81 feet to the POINT AND PLACE OF BEGINNING, containing 132,495 square feet, or 3.04 acres more or less as shown on that plat of survey prepared by Ballentine Associates, P.A. dated July 9, 2021 and recorded in Plat Book 123, Page 168-170 of the Orange County Registry. DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A BT:834055v4 EXHIBIT B Scope of Work Services to be provided are in accordance with the Orange County RFP # 5228 and responsive proposals from CASA for Merritt Mill East and Merritt Mill West projects, acknowledging applicable changes presented to and approved by the Orange County Board of Co unty Commissioners on April 6, 2021 (Agenda Item 8 -g). Funds will be used to construct forty-eight (48) units at Merritt Mill Apartment’s development in Orange County, for rent to households earning up to 60% of the HUD area median income by family size, with priority given to homeless and/or disabled households. All construction will be completed in compliance with applicable state and local building codes and ordinance. DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A BT:834055v4 EXHTBTT C PROJECT BUDGET Proposed Uses of Funds Rental Unit Construction $1,373,366 Total Uses of Funds $1,373,366 Sources of Funds Orange County FY 16 Affordable Housing Bond Funds $1,373,366.00 Total Sources of Funds $1,373,366.00 Owner may not request disbursement of funds under this Agreement until the funds are needed for payment of eligible costs. The amount of each request must be limited to eligible costs as determined by the County’s Housing and Community Development Department (“HCD”). Funds may be shifted between line items of the Project without the prior approval of the County only to the extent of “Minor Adjustments,” defined as actions which do not result in a change in the Project and so long as such Minor Adjustments do not exceed Ten Percent (10%) of the line item total from which the funds are being removed ro to which the funds are being added, there is no increase to the Total Renovation Cost specified in the above budget, and there are only minor changes to the Plans and Specifications. DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 1 EXHIBIT D DECLARATION OF RESTRICTIVE COVENANTS (See Attached.) DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 2 Prepared by and return to: Orange County Attorney’s Office: P.O. Box 8181; Hillsborough, NC 27278 PIN Nos.: 9778-93-3103, 9778-93-4008, 9778-93-0153, 9778-93-1183 DECLARATION OF RESTRICTIVE COVENANTS THIS DECLARATION OF RESTRICTIVE COVENANTS (“Declaration”), dated ________________, by Merritt Mill Apartments, LLC, a North Carolina limited liability company, for itself and its successors and assigns (“Owner”), is given as a condition precedent to the award of funds. RECITALS: WHEREAS, CASA, a North Carolina non-profit corporation (“CASA” or “Sponsor”), submitted applications for funding to Orange County, North Carolina (the “County” or “Orange County”), to assist in the construction of a 48-unit affordable apartment development in Carrboro and Chapel Hill, North Carolina, to be known as Perry Place (the “Project”), which applications are incorporated by reference into this Declaration and are on file in the office of the Orange County Department of Housing and Community Development; and WHEREAS, the County awarded Sponsor the total sum of $1,373,366.00 in FY 2016 Affordable Housing Bon Program funds (referred to also as “Project Funds”) in the form of a loan to Sponsor to assist in the construction of the Project; and WHEREAS, the Sponsor is the managing member of Merritt Mill and Merritt Mill will develop, own and operate the Project; and WHEREAS, the Sponsor wishes to assign the allocation of Project Funds to Merritt Mill so that it can develop, own and operate the Project and has agreed that throughout the term of the Agreement that Sponsor, along with Merritt Mill, will be responsible to the County for Merritt Mill’s performance of the terms of the Agreement; and WHEREAS, because Sponsor has agreed to be, along with Merritt Mill, responsible to the County for Merritt Mill’s performance of the terms of the Agreement the County has agreed to DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 3 assign the Project Funds allocated to Sponsor in the form of a loan (the “Loan”) to Merritt Mill to develop, own and operate the Project; and WHEREAS, the Project Funds, along with other funds, will be used to finance the construction of the Project, a new forty-eight (48) unit affordable housing development owned by Merritt Mill and serving low income families earning less than 60% of the area median income and which will remain affordable for low income families throughout the term of the ninety nine (99) year period of affordability. The Project will be located on Merritt Mill Road in Carrboro and Chapel Hill, North Carolina. The Project dwelling units are to be constructed on the property more particularly described in Exhibit A, Property Legal Description attached hereto and made a part of this Agreement (hereinafter referred to as “the Property”); and WHEREAS, Owner as a condition precedent to the awarding of funds, shall execute, deliver and record this Declaration in the Office of the Register of Deeds of Orange County in order to create certain covenants pertaining to the Property and running with the land for the purpose of enforcement of the affordability requirements and agreeing to the terms of the Development Agreement dated September 28, 2021 which is incorporated by reference herein, among the County, CASA, and Merritt Mill Apartments, LLC. A copy of the Development Agreement (hereinafter, “DEVELOPMENT AGREEMENT”) is on file with the Office of the Clerk to the Orange County Board of County Commissioners. NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth and of other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Owner intends, declares, and covenants that the regulatory and restrictive covenants set forth herein governing the use, occupancy, and transfer of the Property shall be and are covenants pertaining to the Property and running with the land for the term stated herein and are binding upon all subsequent owners of the Property and for such term, except as specifically provided herein, and are not merely personal covenants of Owner. SECTION 1 REPRESENTATIONS, COVENANTS AND WARRANTIES OF OWNER Owner hereby represents, covenants and warrants as follows: A. It is contemplated that the Property and the Project will be used, during the ninety-nine (99) years after Project Completion (defined as the Property acquired, constructed, and occupied by a low-income family earning up to 60% of HUD area median income). B. In the event Owner sells, transfers or exchanges the Property or any portion of the Property, the following shall pertain: 1. Subject to the requirements of the DEVELOPMENT AGREEMENT, Owner may sell, transfer, or exchange the Property to a non-profit fund, foundation, or corporation of like purpose which is organized and operated exclusively for charitable and educational purposes and which has established its tax exempt status under Section 501 (c)(3) of the Internal Revenue Code, or to Orange County; provided, however, Owner shall obtain the written agreement, in form satisfactory to Orange County, of any buyer or successor or other person acquiring the Property or any interest therein, that such acquisition is subject to the requirements of this Declaration and to the requirements of the DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 4 DEVELOPMENT AGREEMENT. Owner agrees that Orange County may void any sale, transfer, or exchange of the Property or any portion of the Property if the buyer or successor or other person fails to assume in writing the requirements of this Declaration and the requirements of the DEVELOPMENT AGREEMENT. 2. Any assignment, sale, transfer, conveyance or other disposition of the Property or any part of the Property other than as described in subparagraph 1 above, whether voluntary or involuntary or by operation of law shall be subject to the provisions of SECTION 4 of this Declaration. C. Owner will, at the time of execution, delivery and recording of this Declaration, have good and marketable title to the Property, free and clear of any lien or encumbrance (except encumbrances created pursuant to this Declaration or other permitted encumbrances). D. Owner warrants that it has not and will not execute any other declaration with provisions contradictory to, or in opposition to, the provisions hereo f, and that in any event, the requirements of this Declaration are paramount and controlling as to the rights and obligations herein set forth and supersede any other requirements in conflict herewith. SECTION 2 TERM OF DECLARATION This Declaration and the Terms of Affordability, specified herein, apply to the Property immediately upon recordation and Owner shall comply with all restrictive covenants herein. This declaration shall terminate ninety-nine (99) years after Project Completion, unless Orange County Long Term Housing Affordability Policy affordability restrictions are terminated due to the sale of the Property to a non-qualified buyer as provided herein and Orange County agrees to the termination of the Declaration. SECTION 3 RECORDING AND FILING; COVENANTS TO RUN WITH THE LAND A. Upon execution of this Declaration by Owner, Owner shall cause this declaration and all amendments hereto to be recorded and filed in the Office of the Register of Deeds of Orange County. B. Owner intends, declares and covenants, on behalf of itself and all future Owners of the Project during the term of this Declaration, that this Declaration and the covenants and restrictions set forth in this Declaration regulating and restricting the use, occupancy and transfer of the Property (1) shall be and are covenants running with the land, encumbering the Property for the term of this Declaration, binding upon Owner's successors in title and all subsequent Owners of the Property; (2) are not merely personal covenants of Owner; and (3) shall bind Owner (and the benefits shall inure to Orange County and any past, present or prospective owner of the Property) and its respective successors and assigns during the term of this Declaration. Owner hereby agrees that any and all requirements or privileges of estate are intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure that these restrictions run with the Property. For the term of this Declaration, each and every contract, deed or other instrument hereafter executed conveying DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 5 the Property or portion thereof shall expressly provide that such conveyance is subject to this Declaration, provided, however, the covenants contained herein shall survive and be effective regardless of whether such contracts, deed, or other instrument hereafter executed conveying the Property or portion thereof provides that such conveyance is subject to this Declaration. It is further the responsibility of Owner to rerecord the Declaration of Restrictive Covenants periodically and no less often than one day less than every 30 years from the date hereof for the purpose of renewing the rights of first refusal in the Property or portion thereof including any leasehold interest in the Property or portion thereof. Orange County retains the right to, periodically and every 30 years after the first recording of th is Declaration on the Property to register, with the Register of Deeds of Orange County, a notice of preservation of the Restrictive Covenants on the Property as provided in North Carolina General Statute § 47B-4 or any comparable preservation law in effect at the time of the recording of the notice of preservation. It is the intent of this Section that the ninety- nine (99) year duration of this Declaration be accomplished and that any future owner of the Property, Owner, and Orange County will do what is necessary to ensure that the same is not extinguished by N.C. Gen. Stat. § 41-29 or any comparable law purporting to extinguish, by the passage of time, preemptive rights in the Property and by the Real Property Marketable Title Act or any comparable law purporting to extinguish, by the passage of time, non-possessory interests in real property. Any future owner, Owner and Orange County agree to do what each must do to accomplish the ninety-nine (99) year duration of this Declaration. SECTION 4 ENFORCEMENT OF AFFORDABLE HOUSING REQUIREMENTS A. Rights of Refusal 1. Grant and Effect. Orange County is granted a right of first refusal to purchase the Property as described in this Section. Any assignment, sale, transfer, conveyance, or other disposition of the Property or any part thereof whether voluntarily or involuntarily or by operation of law (“Transfer”) shall not be effective unless and until the below- described procedure is followed. 2. Right of First Refusal. If Owner contemplates a Transfer during the term of this Declaration to other than an agency with similar interest in affordable housing serving families with incomes not exceeding 60% of the area median household income by family size, as determined by the U.S. Department of Housing and Urban Development at the time of the transfer, the non-profit fund, foundation, or corporation of like purposes must have established its tax-exempt status under Section 501(c)(3) of the Internal Revenue Code, Owner shall send to Orange County, at the address noted in the Notice section of this Declaration, not less than 90 days prior to the contemplated closing date of the Transfer, a “Notice of Intent to Sell.” This Notice of Int ent to Sell shall be accompanied by a copy of a completed, fully executed bona fide offer to purchase the Property on the then current North Carolina Bar Association “Offer to Purchase and Contract” form. If Orange County elects to exercise its said right of refusal, it shall notify the Owner of its election to purchase within 30 days of its receipt of the notice and shall purchase the Property or portion thereof within 90 days of the receipt of the “Notice of Intent to Sell.” The right of first refusal granted to the County DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 6 pursuant to this Section 4 shall be in force commencing immediately. 3. Sales After Failure to Exercise Rights of Refusal. If Orange County does not advise the Owner in a timely fashion of its intent to purchase the Property, then the Own er shall be free to transfer the property in accordance with this Section of the Declaration. 4. Assignability. Orange County may assign its right of first refusal without Owner’s consent. B. Resale Provisions 1. If the Owner no longer uses the Property as affordable rental property, then Owner must sell, transfer, or otherwise dispose of its interest in the Property only to an agency with similar interest in affordable housing and to serve families with incomes not exceeding 60% of the area median household income by family size, as determined by the U.S. Department of Housing and Urban Development at the time of the transfer. The non- profit fund, foundation, or corporation of like purposes must have established its tax- exempt status under Section 501 (c)(3) of the Internal Revenue Code. 2. However, if the property is not sold, transferred, or otherwise disposed of to an agency with similar interest in affordable housing during the term of affordability, the net sales proceeds (sales price less: (1) selling cost, and (2) the unpaid principal amount of the initial Orange County contribution and any other initial government contribution secured by a deferred payment promissory note and deed of trust) or “equity” will be divided 50/50 by the seller of the Property and Orange County. If the initial County contribution does not have to be repaid because the sale occurs more than forty years after the County contribution is made, then the seller of the Property and the County will divide the entire equity realized from the sale. 3. In the event that Net Sales Proceeds are insufficient to repay the County Bond Funds, including principal plus interest, the amount to be recaptured shall be any funds remaining after payment of all liens senior to the County’s lien and closing costs. In no event shall the borrower be required to use funds other than net proceeds to repay the Bond Funds. 4. The resale provisions shall remain in effect for the full affordability period – 99 years. C. Owner covenants that it will not knowingly take or permit any action that would result in a violation of the Orange County Long Term Affordability Policy requirements. Orange County, together with Owner, may execute and record any amendment or modification of this Declaration and such amendment or modification shall be binding on third parties granted rights under this Declaration. D. Owner acknowledges that the primary purpose for requiring compliance by Owner with DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 7 restrictions provided in this Declaration is to assure compliance with the affordability requirements of Orange County, AND BY REASON THEREOF, OWNER IN CONSIDERATION FOR RECEIVING AFFORDABLE HOUSING BOND PROGRAM FUNDS FOR THE PROPERTY HEREBY AGREES AND CONSENTS THAT ORANGE COUNTY SHALL BE ENTITLED, FOR ANY BREACH OF THE PROVISIONS HEREIN, AND IN ADDITION TO ALL OTHER REMEDIES PROVIDED BY LAW OR IN EQUITY, TO ENFORCE BY SPECIFIC PERFORMANCE OWNER’S OBLIGATIONS UNDER THIS DECLARATION IN A STATE COURT OF COMPETENT JURISDICTION, WITH VENUE IN ORANGE COUNTY. Owner hereby further specifically acknowledges that the beneficiaries of Owner's obligations hereunder cannot be adequately compensated by monetary damages in the event of any default hereunder. E. This Declaration may be enforced by Orange County or its designee in the event Owner fails to satisfy any of the requirements of this Declaration by proceedings at law or in equity against any person or persons violating or attempting to violate any covenant. If legal costs are incurred by Orange County, such legal costs, including attorney fees and court costs (including costs of appeal), are the responsibility of, and may be recovered from the Owner. SECTION 6 MISCELLANEOUS A. Severability. The invalidity of any clause, part, or provision of this Declaration shall not affect the validity of the remaining portions thereof. B. Notices. Any notice shall be in writing and shall be given by depositing the same in the United States mail, post-paid and registered or certified, and addressed to the party to be notified, with return-receipt requested, or by delivering the same in person to an officer or principal of such party. Notice deposited in the mail in the manner hereinabove described shall be effective upon mailing. For purposes of notice, the addresses of the parties shall, unless changed as hereinafter provided, be as follows: i. To the County: Orange County c/o Housing and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To Owner: Merritt Mill Apartments, LLC PO Box 124545 Raleigh, NC 27605 ATTN: C. Governing Law. This Declaration shall be governed by the laws of the State of North DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 8 Carolina and, where applicable, the laws of the United States of America. [SEPARATE SIGNATURE PAGE FOLLOWS.] DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 9 IN WITNESS WHEREOF, the Owner has caused this Declaration to be signed by its duly authorized representative, on the day and year first above written. Merritt Mill Apartments LLC, a North Carolina limited liability company By: CASA, a North Carolina limited liability company, Managing Member By: _______________________________ Mary Jean Seyda, Chief Executive Officer NORTH CAROLINA ORANGE COUNTY I, _________________________, Notary Public in and for the above named County and State, do hereby certify that on this day personally appeared before me Mary Jean Seyda with whom I am personally acquainted, who, being by me duly sworn, says that she is the Chief Executive Officer of CASA, a North Carolina nonprofit corporation, the Managing Member of Merritt Mill Apartments LLC, a North Carolina limited liability company, and that by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by its Managing Member Witness my hand and notarial seal, this the _________day of _______________20__. _________________________________ _______________________, Notary Public My commission expires: ___________________ DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A 10 EXHIBIT A Legal Description New Lot 1 BEGINNING at an Existing Iron Pipe in the northern right-of-way of Merritt Mill Road (Highway Map Book 1, Page 176), said iron pipe having NC Grid Coordinates of N=783,021.94’, E=1,979,304.66’, the POINT AND PLACE OF BEGINNING; and continuing from said iron pipe along said Merritt Mill Road South 80˚ 54' 43" West 123.19 feet to an Existing Iron Pipe in the right of way of said Merritt Mill Road; thence South 81°47'44" West a distance of 132.37 feet to a point, said point being the Southeast corner of Roscoe B. Farrow II (PIN# 9778839033 / Deed Book 6587, Page 356); thence along the line of Roscoe B. Farrow II, Roberts Street (a 50’ wide Public R/W), and the heirs of Ruthena Sanford (PIN# 9778839117 / Estate File 19-E-525) North 08°57'20" West a distance of 364.55 feet passing an Iron Pipe Set at 5.00 feet, to an Existing Iron Rod on the Southern line of PS NC III LP (PIN# 9778839403 / Deed Book 5704, Page 234); thence with the line of PS NC III LP the following four (4) calls: South 82°58'49" East a distance of 134.78 feet to an Existing Iron Pipe; thence South 82°58'49" East a distance of 150.29 feet to an Existing Iron Pipe; thence South 82˚ 58' 49" East 50.05 feet to an Existing Iron Pipe; thence North 02˚ 50' 00" West 34.56 feet to an Existing Iron Pipe on the Northwest corner of Chapel Hill Board of Education (PIN# 9778936524 / Deed Book 222, Page 352); thence with the line of Chapel Hill Board of Education South 54˚ 40' 01" East 145.77 feet to an Existing Iron Pipe on the Northwest corner of Terry Carver (PIN#9778934164 / Deed Book 5269, Page 274); thence with the line of Terry Carver the following two (2) calls: South 21˚ 20' 46" East 95.62 feet to an Existing Iron Pipe; thence South 21˚20' 46" East 82.93 feet to an Existing Iron Rod on the northern R/W of Merritt Mill Road; thence along the northern R/W of Merritt Mill Road the following two (2) calls: South 71˚ 19' 10" West 188.87 feet to an Existing Iron Pipe; thence South 80˚ 54’ 43" West 26.81 feet to the POINT AND PLACE OF BEGINNING, containing 132,495 square feet, or 3.04 acres more or less as shown on that plat of survey prepared by Ballentine Associates, P.A. dated July 9, 2021 and recorded in Plat Book 123, Page 168-170 of the Orange County Registry. DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A DATE (MM/DD/YYYY) AGENCY PHONE (A/C, No, Ext): COMPANY E-MAIL ADDRESS: FAX (A/C, No): CODE:SUB CODE: AGENCY CUSTOMER ID #: INSURED LOAN NUMBER POLICY NUMBER EFFECTIVE DATE EXPIRATION DATE THIS REPLACES PRIOR EVIDENCE DATED: LOCATION/DESCRIPTION COVERAGE/PERILS/FORMS AMOUNT OF INSURANCE DEDUCTIBLE NAME AND ADDRESS AUTHORIZED REPRESENTATIVE CONTINUED UNTIL TERMINATED IF CHECKED ADDITIONAL INSURED LENDER'S LOSS PAYABLE MORTGAGEE LOAN # LOSS PAYEE THIS EVIDENCE OF PROPERTY INSURANCE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE ADDITIONAL INTEREST NAMED BELOW. THIS EVIDENCE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS EVIDENCE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE ADDITIONAL INTEREST. SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. PROPERTY INFORMATION COVERAGE INFORMATION REMARKS (Including Special Conditions) CANCELLATION ADDITIONAL INTEREST ACORD 27 (2016/03) 1 of © 1993-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS EVIDENCE OF PROPERTY INSURANCE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. PERILS INSURED BASIC BROAD SPECIAL ACORDTM EVIDENCE OF PROPERTY INSURANCE 20CASA 09/28/2021 McGriff Insurance Services Post Office Box 13941 Durham, NC 27709 919 281-4500 507553 8887468761 tgroberts@mcgriff.com Hanover Insurance Company Box 85612 Richmond, VA 23285 Merritt Mill Apartments, LLC PO Box 12545 Raleigh, NC 27605-2545 IH6H735467 09/30/21 11/17/22 Location #1 800 S. Merritt Mill Road Chapel Hill, NC 27516 Building #1 24 Two BR Apartment Units Location #1 800 S. Merritt Mill Road Chapel Hill, NC 27516 Building #2 24 One BR Apartment Units/Community Center BUILDERS RISK COVERAGE INFORMATION Job Specific Completed Value: Loc.# Bldg.# 1 1 9,000,000 ****** Supplemental Names ****** Type: Insured Multiple Names Merritt Mill Apartments, LLC (See Attached Remarks) Orange County 300 West Tryon Street P.O. Box 8181 Hillsborough, NC 27278 2 S 1103207 TGR DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A SAGITTA 27.4 (03/16) of REMARKS (Continued from page 1.) ****** Description of Operations ****** Re: 800 S. Merritt Mill Road, Chapel Hill, NC 27510 Replacement Cost Coverage Windstorm/Hail is included with no sublimit $10,000 deductible Building Ordinance or Law Demolition and Increased Cost of Construction covered up to building limit - $9Mil/Demolition and Increased Cost of Construction - $1Mil Off Site Materials Storage - $100,000 Property in Transit - $100,000 Loss of Materials and Equipment at Jobsite Up to building limit - $9Mil Boiler and Machinery/Equipment Breakdown - $9Mil Property Damage Limit Terrorism is include no sublimit 2 2 S 1103207 TGR DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A INSR ADDL SUBR LTR INSR WVD DATE (MM/DD/YYYY) PRODUCER CONTACT NAME: FAXPHONE (A/C, No):(A/C, No, Ext): E-MAIL ADDRESS: INSURER A : INSURED INSURER B : INSURER C : INSURER D : INSURER E : INSURER F : POLICY NUMBER POLICY EFF POLICY EXPTYPE OF INSURANCE LIMITS(MM/DD/YYYY)(MM/DD/YYYY) COMMERCIAL GENERAL LIABILITY AUTOMOBILE LIABILITY UMBRELLA LIAB EXCESS LIAB WORKERS COMPENSATION AND EMPLOYERS' LIABILITY DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) AUTHORIZED REPRESENTATIVE INSURER(S) AFFORDING COVERAGE NAIC # Y / N N / A (Mandatory in NH) ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? EACH OCCURRENCE $ DAMAGE TO RENTED $PREMISES (Ea occurrence)CLAIMS-MADE OCCUR MED EXP (Any one person)$ PERSONAL & ADV INJURY $ GENERAL AGGREGATE $GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS - COMP/OP AGG $ $ PRO- OTHER: LOCJECT COMBINED SINGLE LIMIT $(Ea accident) BODILY INJURY (Per person)$ANY AUTO OWNED SCHEDULED BODILY INJURY (Per accident)$AUTOS ONLY AUTOS AUTOS ONLY HIRED PROPERTY DAMAGE $AUTOS ONLY (Per accident) $ OCCUR EACH OCCURRENCE $ CLAIMS-MADE AGGREGATE $ DED RETENTION $$ PER OTH- STATUTE ER E.L. EACH ACCIDENT $ E.L. DISEASE - EA EMPLOYEE $ If yes, describe under E.L. DISEASE - POLICY LIMIT $DESCRIPTION OF OPERATIONS below POLICY NON-OWNED SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer any rights to the certificate holder in lieu of such endorsement(s). COVERAGES CERTIFICATE NUMBER:REVISION NUMBER: CERTIFICATE HOLDER CANCELLATION © 1988-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORDACORD 25 (2016/03) ACORDTM CERTIFICATE OF LIABILITY INSURANCE Philadelphia Indemnity Insurance Co. Allied Eastern Indemnity Company 9/28/2021 McGriff Insurance Services Post Office Box 13941 Durham, NC 27709 919 281-4500 Terrie Roberts 919 281-4500 888 746-8761 NCCertificateTeam@mcgriff.com Merritt Mill Apartments, LLC PO Box 12545 Raleigh, NC 27605-2545 18058 11242 A X X PHPK2211729 12/02/2020 12/02/2021 1,000,000 1,000,000 20,000 1,000,000 2,000,000 2,000,000 A X X X PHPK2211729 12/02/2020 12/02/2021 1,000,000 A X X X 10000 PHUB748168 12/02/2020 12/02/2021 4,000,000 4,000,000 B Y 030000533777 01/01/2021 01/01/2022 X 500,000 500,000 500,000 ** Workers Comp Information ** Other States Coverage Proprietors/Partners/Executive Officers/Members Excluded: Stewart Witzeman, Vice Chair Tim Morgan, Chair (See Attached Descriptions) Orange County 300 West Tryon Street PO Box 8181 Hillsborough, NC 27278 1 of 2 #S28758183/M28720083 20CASAClient#: 507553 TGR 1 of 2 #S28758183/M28720083 DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A SAGITTA 25.3 (2016/03) DESCRIPTIONS (Continued from Page 1) Eugene Nicholas, Secretary Sylvia Jurgensen, Treasurer 800 S Merritt Mill Road Chapel Hill , NC, 27516 Orange County is named as Additional Insured as required by a written agreement. 2 of 2 #S28758183/M28720083 DocuSign Envelope ID: C902EFF9-56ED-450F-9212-1E71966C673A