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2. The Issuer 'and the Company will enter into a lease (the "Lease") which shall provide for rentals by the Company sufficient to pay all princtpal, premiums, if any, and interest on the Bonds. ~le Company's performance of ~ts obligations, financial and otherwise, under the Lease shall be secured by a first mortgage lien on real property (subject to Permitted Encumbrances) and a security interest in the Project equipment for the benefit and protection of the bondholders The rents to be paid by the Company under the lease shall be pledged to the payment of the principal of, interest on and redemption premium, if any, applicable to the Bonds and will be assigned to the Trustee to secure the payme~t of the Bonds and the fees and expenses of the Trustee, pursuant to an Indenture of Mortgage and Deed of Trust (the "Indenture") to be entered into between the Issuer and the Trustee. The Lease shall provide that the County will give priority ~o applications of cinizens of Cabarrus County for admission to said nursing home over persons from other areas with the same needs. 3. Upon delivery of the Bonds and in the event of any inconsistency between the terms of this proposal and the terms of Lease and Indenture in the form in which it shall be finally approved by resolution of the Issuer, the provisions of the Lease and Indenture as so app£oved shall control. 4 Upon acceptance by the Company of this proposal, the Issuer shall keep open mhd outstanding this commitment and ifiducement to the Company for a reasonable time (not less than six months) so long as the Company shall be proceeding with appropriate efforts toward conclusion of any arrangements necessary to the Project and the issuance of the Bonds. 5. If for any reason the Bonds are not issued (sther than by reason of the fault of the Issuer): (a) The Company will pay to the Issuer the amount of all expenses which shall have been incurred by the Issuer in connection with the Project and which were authorized by the Company; (B) The Company will assume and be responsible for all contracts entered into by the Issuer at the request of the Company in connection with the Project; and (c) The Company will pay the out-of-pocket expenses of officials and representatives of the issuer and counsel for the Issuer incurred in connection with the Project and will pay bond counsel reasonable legal fees for legal services related to the Project or the financing thereof.