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HomeMy WebLinkAbout2005 S Purchasing - Orange EnterprisesPrepared by and Return to: Geoffrey E. Gledhill, Attorney, Coleman, Gledhill, Hargrave & Peek, P.C. P.O. Drawer 1529, Hillsborough, NC 27278 STATE OF NORTH CAROLINA ORANGE COUNTY AGREEMENT /~ _ This AGREEMENT (this "Agreement"), dated as of ~ A ~~ a~ between ORANGE ENTERPRISES, INC., anon-stock, not-for-profit corporation with an office in Hillsborough, Orange County, North Carolina ("Orange Enterprises") and ORANGE COUNTY, NORTH CAROLINA, a body politic and corporate, a political subdivision of the State of North Carolina ("the County" or "County"). RECITALS: WHEREAS, the County has the power, pursuant to N.C. Gen. Stat. § 158-7.1(a) to make appropriations for aiding and encouraging the location of manufacturing enterprises and increasing the business prospects of the County and to fund these appropriations by the levy of property taxes and by the allocation of other revenues whose use is not otherwise restricted by law; and WHEREAS, Orange Enterprises is a Community Rehabilitation Program operating in the County whose mission it is to assist people who face employment barriers to achieve their vocational potential by offering services that assist these individuals in attaining the greatest level of vocational success which they are capable; and WHEREAS, persons served by Orange Enterprises include adults with developmental disabilities, students with developmental disabilities, adults and students with mental illnesses, learning and emotional disabilities, substance abuse disabilities, physical disabilities and individuals in the Work First Program; and WHEREAS, Orange Enterprises is operating its business on property provided by the County located on Valley Forge Road, Hillsborough, Orange County, North Carolina which property and its facilities has an estimated annual rental value of $58,000, which facility is made available to Orange Enterprises by Orange County at no cost to Orange Enterprises; and WHEREAS, the building located on Orange County-owned property within which Orange Enterprises operates has approximately 10,400 square feet of usable space, 6,000 of which is production space, approximately 2,000 of which is warehouse space and approximately 2,400 of which is administrative space; and WHEREAS, this building is used to its maximum capacity and there will be no opportunity for Orange Enterprises to expand its staff and persons with disabilities working in these facilities unless they were to be expanded; and WHEREAS, in addition to its approximately $58,000 annual contribution to Orange Enterprises in facility value, the County presently makes an annual appropriation to Orange Enterprises of $43,175 in operational support; and 2 WHEREAS, Orange Enterprises has been offered the opportunity to purchase improved property with a building and parking and other amenities located on Elizabeth Brady Road, Hillsborough, Orange County, North Carolina which building is 25,400 square feet in size and can be modified to provide 20,400 square feet of production/warehouse space and 5,000 square feet of administrative space thus more than tripling the production capacity and increasing significantly available parking spaces which would become necessary to accommodate increases in staff and persons with disabilities working in the facility; and WHEREAS, Orange Enterprises has the opportunity to purchase the new facilities, including approximately 10 acres of land, for the sum of $950,000; and WHEREAS, Orange Enterprises has been able to obtain a loan for the purchase of the property in an amount sufficient to do so conditioned upon the County's contribution of $825,000 toward the purchase price; and WHEREAS, financial projections prepared by Orange Enterprises indicate that Orange Enterprises will be able to maintain support and revenue in excess of expenses including the payment of the principal component of debt service provided the County contributes $825,000 towards the purchase of the building and provides the other financial support as outlined in this agreement; and WHEREAS, the additional production/warehouse space and administrative space will enable Orange Enterprises to increase materially the number of persons it can employ and the number of disabled persons that it can employ as well as enable Orange Enterprises to operate as an "affirmative enterprise," such that persons with disabilities can be employed at the same wages and have a benefit package that is the same as those who don't have disabilities; and 3 WHEREAS, on April 12, 2005 the County conducted a public hearing, following publication of notice of that public hearing at least 10 days before the hearing was held, for the purpose of receiving public comment on this proposed Agreement between the County and Orange Enterprises; and WHEREAS, at that public hearing information was provided by or on behalf of Orange Enterprises as follows: 1. Orange Enterprises projects that it will be able to maintain support and revenue in amounts in excess of expenses including the payment of the principal component of debt service; 2. Orange Enterprises projects the following with respect to total employees, County resident employees, number of disabled employees, new jobs for disabled employees and new jobs for non-disabled employees through the end of the County fiscal year ending July 1, 2010: Summary of Employment Projections 2004- 2005- 2006- 2007- 2008= 2009- 2005 2006 2007 2008 2009 2010 Employees 201 225 240 249 250 271 O.C. 157 166 181 193 199 203 Residents # of 149 164 172 178 183 188 Disabled Em to ees New Jobs 13 11 8 9 8 8 For Disabled New Jobs 3 9 7 6 9 9 for Non- Disabled Em to ees 4 3. All Orange Enterprises staff are paid at or above the living wage as determined by the County. All other employees are paid at commensurate wages (wages based on ability as compared to workers without disabilities); 4. Orange Enterprises will begin an "affirmative enterprise" wherein persons with disabilities are employed at the same wages and have a benefit package that is the same as those who don't have disabilities; 5. Orange Enterprises will purchase the property known as Building Lot # 2 located at 348 Elizabeth Brady Road, Hillsborough, Orange County, North Carolina for the sum of $950,000 and will invest approximately $300,000 for upfit and improvements to the building so that it can be used as Orange Enterprises' operation center and place of business; 6. Orange Enterprises presently contracts with National Industries for the Severely Handicapped (NISH), anon-profit organization specializing in federal contract bids, for jobs and anticipates contracting with the division of National Industries for the Severely Handicapped that develops products (for example, picture frames, air gauges for plane tires, first aid kits, belts for military uniforms, protective suits for use in war areas against chemical warfare and other products) that can be manufactured in the new Orange Enterprises facility resulting in the employment of County residents; and WHEREAS, the County, by resolution on this day, makes the determination that contributions that it will make as provided in this Agreement will aid and encourage the location of manufacturing enterprises and business prospects for residents of the County and particularly for disabled residents of the County the totality of which will have the effect of providing employment and improved quality of life for those served by Orange Enterprises and reducing 5 the cost to the citizens of the County, the State of North Carolina and the United States in any number of public assistance programs; and WHEREAS, the total increase in employment that will be provided by Orange Enterprises with the expanded facilities together with the availability to the County, for other public purposes, of the present Orange Enterprises facility owned by the County are singularly and together adequate consideration to Orange County for the payments made by the County under this Agreement. WITNESSETH: In consideration of the payment by the County to Orange Enterprises of the following building support and operational support, Orange Enterprises agrees to perform its obligations in accordance with the terms of this Agreement. If, however, there shall be any default in any of the covenants, terms or conditions contained in this Agreement or any other agreement made a part of this Agreement and such default is not cured within ninety (90) days after written notice, then and in any of such events, without further notice, the Premises, identified as 348 Elizabeth Brady Road, Building #2, Hillsborough, North Carolina, and generally more particularly described on Exhibit A hereto, shall revert to and become the sole property of the County. In the event of an uncured default and in response to the County demanding that it do so, Orange Enterprises agrees to convey the Premises by North Carolina warranty deed with such title exceptions as exist on the date of the recordation in the Office of the Orange County Register of Deeds of this Agreement, to Orange County, North Carolina. This requirement that Orange Enterprises convey the Premises to the County in the event of a default under this Agreement shall be one that is specifically enforceable by the courts of North Carolina. 6 2. The County shall provide the following building support and operational support to Orange Enterprises: Year Building Support Operational Support 2004-2005 $525,000 $43,175 2005-2006 $100,000 $73,175 2006-2007 $100,000 $73,175 2007-2008 $100,000 $73,175 2008-2009 0 $63,175 2009-2010 0 $53,175 3. Orange Enterprises shall purchase the Premises for the sum of $950,000 and make the necessary improvements to the Premises in the amount estimated to be $300,000 in order to improve and upfit the Premises to accomplish the other obligations of Orange Enterprises as contained in this Agreement. The Premises maybe subjected to a deed of trust in favor of a commercial lending institution in an amount not to exceed $715,000 BUT NO OTHER without the written consent of the County. 4. Orange Enterprises agrees to insure the Premises for its replacement value, pay all taxes, assessments, utilities and other charges on the property and keep the property at all times properly maintained as specifically provided in paragraph 7 of this Agreement. 5. Orange Enterprises makes the following additional representations as an inducement to and the basis for its undertakings and the County's agreement to provide the building support and operational support as provided herein. These representations are covenants 7 and the failure of Orange Enterprises to comply and remain in compliance with them constitutes an event of default under this agreement: (i) Orange Enterprises is a corporation duly incorporated under the laws of and is in good standing in the State of North Carolina, is authorized to do business in North Carolina and has the power to enter into this Agreement and by proper corporate action has been duly authorized to execute and deliver this Agreement; (ii) neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of compliance of the terms and conditions of this Agreement, conflict with or result in a breach of any of the terms, conditions or provisions of any corporate restriction or any agreement or instrument to which Orange Enterprises is now a party or by which it is bound, or constitute a default under any of the foregoing, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon the Premises, except as provided in this Agreement, under the terms of any instrument or agreement; (iii) Orange Enterprises agrees to operate the Premises in order to provide employment as follows: 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Employees 201 225 240 249 250 271 O.C. 157 166 181 193 199 203 Residents # of Disabled 149 164 172 178 183 188 Em to ees New Jobs 13 11 8 9 8 8 For Disabled New Jobs for 3 9 7 6 9 9 Non-Disabled Em to ees in order to serve adults with developmental disabilities, students with developmental disabilities, adults and students with mental illnesses, learning and emotional disabilities, substance abuse disabilities, physical disabilities and individuals in the Work First Program; (iv) Orange Enterprises will pay all of its staff a living wage as determined by Orange County from time to time and will pay or cause to be paid those persons it serves at a commensurate wage (a wage based on ability as compared to workers without disabilities); (v) Orange Enterprises agrees to operate as an "affirmative enterprise" such that persons with disabilities can be employed at the same wages and have a benefit package that is the same as those that don't have disabilities. 6. Orange Enterprises will convey to Orange County an assignable, perpetual Conservation Easement extinguishing all development rights in as much of the Premises as is located in the flood hazard area of the Eno River as determined by a survey of the Premises. Orange Enterprises agrees to grant no easements to the Premises other than the Conservation Easement described here and an access easement for ingress, regress, egress and for utility purposes to the owner of the adjoining property containing Building Number # 1 as shown on Exhibit A hereto without first obtaining the prior written consent of the County. 7. Orange Enterprises agrees that it will, at its own expense (i) keep the Premises in reasonably safe condition and (ii) keep the building and all other improvements forming a part of the Premises in good repair and in good operating condition, making from time to time all necessary repairs thereto (including external and structural repairs) and renewals and replacements thereof. Orange Enterprises may, also at its own expense, make from time to time any additions, modifications or improvements to the Premises it may deem desirable for its business purposes that do not adversely affect the structural integrity of any buildings or 9 structures located on the Premises or substantially reduce the value of the Premises; provided that all such additions, modifications and improvements to the Premises shall be located wholly within the boundary lines of the Premises. All such additions, modifications and improvements so made shall become a part of the Premises; provided that any item of personal property, machinery, equipment, furniture or fixture installed by Orange Enterprises for its business purposes which does not constitute a part of the Premises, maybe removed by Orange Enterprises at any time and from time to time; and provided further, that any damage to the Premises occasioned by such removal shall be repaired by Orange Enterprises at its own expense. Orange Enterprises will not permit any mechanics' lien, security interest or other encumbrance to remain against the Premises for labor or materials furnished in connection with any additions, modifications, improvements, repairs, renewals or replacements so made by it; provided, that if Orange Enterprises shall first notify the County of its intention so to do, Orange Enterprises may in good faith contest any mechanics' or other liens filed or established against the Premises, and in such event may permit the item so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless the County shall notify Orange Enterprises that, in the opinion of independent counsel, by nonpayment of any such items, title to the Premises will be materially endangered or the Premises or any part thereof will be subject to loss or forfeiture, in which event Orange Enterprises shall promptly pay and cause to be satisfied and discharge all such unpaid items. 8. Orange Enterprises releases the County from and covenants and agrees that the County shall not be liable for, and to indemnify and hold the County harmless against, any loss or damage to property or any injury to or death of any person occurring on or about or resulting from any defect in the Premises or improvements located on the premises provided, that this 10 indemnity shall not be effective for damages that result from negligence or intentional acts on the part of the County. To this end, Orange Enterprises will provide for and insure not only its own liability in respect of these matters but also the liability herein assumed. 9. The following shall be "events of default" under this Agreement and the terms "event of default" or "default" shall mean, whenever they are used in this Agreement, any one or more of the following events: (i) Failure by Orange Enterprises to observe and perform any covenant, condition or agreement on its part to be observed or performed which failure continues for a period of ninety (90) days after written notice, specifying such failure and requesting that it be remedied, given to Orange Enterprises by the County, unless the County shall agree in writing to an extension of such time prior to its expiration, or if the default be of a nature that it is not reasonably susceptible to being cured within ninety (90) days, the time to cure maybe extended by the County so long as Orange Enterprises is diligently attempting to cure such default. The County shall not unreasonably withhold agreement to extend the time period to cure. (ii) The dissolution or liquidation of Orange Enterprises or the filing by Orange Enterprises of a voluntary petition in bankruptcy, or failure by Orange Enterprises promptly to lift any execution, garnishment or attachment of such consequence as will impair its ability to carry on its operations at the Premises, or the commission by Orange Enterprises of any act of bankruptcy, or adjudication of Orange Enterprises as a bankrupt, or assignment by Orange Enterprises for the benefit of its creditors, or the entry by Orange Enterprises into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to Orange Enterprises in any proceeding for its reorganization instituted under the provisions of the Bankruptcy Act, as amended, or under any similar act which may hereafter 11 be enacted. The term "dissolution or liquidation of Orange Enterprises," as used in this subsection, shall not be construed to include the cessation of the corporate existence of Orange Enterprises resulting either from a merger or consolidation of Orange Enterprises into or with another corporation, provided the merged or consolidated entity continues to perform those covenants, conditions and terms of this Agreement required of Orange Enterprises. The foregoing provisions of this Paragraph are subject to the following limitations: If by reason of force majeure Orange Enterprises is unable in whole or in part to carry out its agreements on its part herein contained, Orange Enterprises shall not be deemed in default during the continuance of such inability. The term "force majeure" as used herein shall mean, without limitation, the following: Acts of God, acts of public enemies, orders of any kind of the government of the United States or of North Carolina or any of their departments, agencies, or officials, or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquake, fire, hurricanes, storms, floods, washouts, droughts, arrests, restraint of government and people, civil disturbances, explosions, breakage or accident to machinery, partial or entire failure of utilities, or any other cause or event not reasonably within the control of Orange Enterprises. Orange Enterprises agrees, however, to remedy with all reasonable dispatch the cause or causes preventing Orange Enterprises from carrying out its agreements. In the event Orange Enterprises should default under any of the provisions of this Agreement and the County should employ attorneys or incur other expenses for the enforcement of performance or observance of any obligation or agreement on the part of Orange Enterprises herein contained, Orange Enterprises agrees that it will, on demand therefor, pay to the County the reasonable fee of such attorneys and such other expenses so incurred by the County. 12 In the event any provision contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. 10. Orange Enterprises does hereby give and grant unto the County, its successors and assigns, the exclusive right and Option to purchase the Premises for a period of 99 years from the date this Agreement is signed by Orange Enterprises. The County shall have the right to extend this Option for an additiona199 years. PROVIDED, HOWEVER, the County may only exercise this Option in the event Orange Enterprises ceases, during the Option term or Option renewal term, to do business as a Community Rehabilitation Program creating employment opportunities for adults with developmental disabilities, students with developmental disabilities, adults and students with mental illnesses, learning and emotional disabilities, substance abuse disabilities, physical disabilities and individuals in the Work First Program or comparable federal or State program replacing the Work First Program during the Option term or Option renewal term. The term "Orange Enterprises ceases" as used in this subsection, shall not be construed to include the cessation of the corporate existence of Orange Enterprises resulting either from a merger or consolidation of Orange Enterprises into or with another corporation, provided the merged or consolidated entity continues to perform those covenants, conditions and terms of this Agreement required of Orange Enterprises. This Option shall be exercised by written notice personally delivered to the chief operating officer of Orange Enterprises or deposited in the United States mail or its successor, postage prepaid, registered or certified mail, return receipt requested, addressed to the chief operating officer of Orange Enterprises at the mailing address of the Property. 13 The purchase price for the Property, in the event this Option is exercised, shall be $950,000 and shall be paid at closing, in cash, certified funds or other collected funds acceptable to Orange Enterprises. The closing date shall be stated in the written notice exercising this Option and shall be a date no sooner than 60 days after the date of the written notice to Orange Enterprises. The other terms and conditions of this Option are those contained in N.C. Bar Association Form No. 2, OFFER TO PURCHASE AND CONTRACT ©6/99 Revised, a copy of which is Exhibit B hereto, not inconsistent with the terms and conditions herein. 11. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by registered mail, postage prepaid, addressed as follows: If to the County, at Orange County, North Carolina, Office of Purchasing and Central Services, Post Office Box 8181, Hillsborough, North Carolina 27278, Attention of Purchasing Director; if to Orange Enterprises, at ~~~ $ C` ~ Z~e3~, ~c., ~ ~ ~Rvc,,~~ ~~~ ~1'S~~ ~ u c~ ~'Gr ~~`~ ~ 0._ ~ a.~ ~~ ~ .The County and Orange Enterprises may by notice given hereunder, designate any further or different address to which subsequent notices, certificates or other communications shall be sent. 12. This Agreement shall inure to the benefit of and shall be binding upon the County, Orange Enterprises and their respective successors and assigns, subject, however, to the limitations contained herein. 13. In the event any provision of this Agreement shall beheld invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 14 14. Except as otherwise provided in this Agreement, it may not be effectively amended, changed, modified, altered or terminated without the written consent of the County and Orange Enterprises. 15. This Agreement maybe executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF the County and Orange Enterprises have caused this agreement to be executed in their respective corporate names and attested by their duly authorized officers, all as of the date first above written. ORANGE COUNTY, FORTH CAROLINA Moses Carey, Jr., Chair, Board of Commissioners ATTEST: By: Do a S. Baker, Cl k to the Board of Commissioners ORANGE ENTERPRISES, INC. BY~ V Presiden ATTEST: By: GZ2-~'~a~ Secretary 15 NORTH CAROLINA ORANGE COUNTY I, z/ 1~'~1, a Notary Public of the County and State aforesaid, certify that Donna $~' aker personally came before me this day and acknowledged that she is Clerk to the Board of Commissioners for Orange County, North Carolina and that by authority duly given and as the act of said County, the foregoing instrument was signed in its name by the Chair of said Board of Commissioners and attested by her as Clerk to said Board of Commissioners. ~l/~ _ Wi±ness my hand and official stamp or seal, this the ~ day of ~ , 2005. otary Public My commission expires: NORTH CAROLINA ORANGE COUNTY I ( ~~ ~ j'I,~ _, a Nota Public of the County and State aforesaid, certify tha P ersonally came before me this day and acknowledged th the/sh is r of Orange Enterprises, Inc. and acknowledged, on behalf of Orange Enterprises, Inc., the due execution of the foregoing instrument. _ Witness my hand and official stamp or seal, this the ~(z day of 2005. Not Public My commission expires: ~ ~, ~av~ "'~ T""'~ lsg:orangecounty\orange enterprises agmt.doc 16 in Hillsborough, ~lorth Carolina 27278 Exhibit A PC©OOSQfI .S'itg Piwn LINE BARING DISTANCE L I 5 31°le'~2"w 75.00' L 2 N !4"07'So'E 75.00' PRELIMINARY MAP ONLY \ NOT FOR RECORDING. \ ' SALES. OR CONVEYANCE. .~ M~ „~~1. n~ ~ / '~ ~ - - --S --/ cy !L.00vI '~% ~ ~ v, . 10.0001 AC. ° o 7 ' ~ ~ p ~ L (~ Xm? m N f ~ B`J J ~~~ p ~ ~~ O ~ ~ ~\ A ~' ~~7 ~~~ ° a-o <o \ ~-,\ ~ o as 0 ~- rn o - \~ /~~ o ~° _ //. ~.~ Analytical Consultants Data Presentation-32 OFFER TO PURCHASE AND CONTRACT Exhibit B as Buyer, hereby offers to purchase and , as Seller, upon acceptance of said offer, agrees to sell and convey, all of that plot, piece or parcel of land described below, together with all improvements located thereon and such fixtures and personal property as are listed below (collectively referred to as the "Property"), upon the following terms and conditions: 1. REAL PROPERTY: Located in the City of ,County of State of North Carolina, being known as and more panicularly described as: Street Address Zip Legal Description: (^All ^A portion of the property in Deed Reference: Book ,Page No. County.) NOTE: Prior to signing this Offer to Purchase and Contract, Buyer is advised to review Restrictive Covenants, if any, which may limit the use of the Property, and to read the Declaration of Restrictive Covenants, By-Laws, Articles of Incorporation, Rules and Regulations, and other governing documents of [he owners' association and/or the subdivision, if applicable. 2. FIXTURES: The following items, if any, are included in the purchase price free of liens: any built-in appliances, light fixtures, ceiling fans, attached Floor coverings, blinds, shades, drapery rods and curtain rods, brackets and all related hardware, window and door screens, storm windows, combination doors, awnings, antennas, satellite dishes and receivers, burglar/fire/smoke alarms, pool and spa equipment, solar energy systems, attached fireplace screens, gas logs, fireplace inserts, electric garage door openers with controls, outdoor plants and trees (other than in movable containers), basketball goals, storage sheds, mailboxes, wall and/or door mirrors, and any other items attached or affixed to the Property, EXCEPT the following items: 3. PERSONAL PROPERTY: The following personal property is included in the purchase price: 4. PURCHASE PRICE: The purchase price is $ and shall be paid as follows: (a) $ ,EARNEST MONEY DEPOSIT with this offer by ^cash ^personal check ^bank check ^certified check ^other: to be deposited and held in escrow by ("Escrow Agent"), until the sale is closed, at which time it will be credited to Buyer, or until this contract is otherwise terminated. In the event: (1) this offer is not accepted; or (2) any of the conditions hereto are not satisfied, then all eamest monies shall be returned to Buyer. In [he event of breach of this contract by Seller, upon Buyer's request, all earnest monies shall be returned to Buyer, but such return shall not affect any other remedies available [o Buyer for such breach. In the even[ this offer is accepted and Buyer breaches this contract, [hen all earnest monies shall be forfeited upon Seller's request, but receipt of such forfeited earnest monies shall not affect any other remedies available to Seller for such breach. NOTE: In the event of a dispute between Seller and Buyer over the return or forfeiture of eamest money held in escrow by a broker, the broker is required by state law to retain said eamest money in the broker's trust or escrow account until a written release from the parties consenting to its disposition has been obtained or until disbursement is ordered by a court of competent jurisdiction. (b) $ , ADDI'ITONAL EARNEST MONEY DEPOSIT to be paid to Escrow Agent no later than ,TIME BEING OF THE ESSENCE WITH REGARD TO SAID DATE. (c) $ , BY ASSUMPTION of the unpaid principal balance and all obligations of Seller on the existing loan(s) secured by a deed of tmst on the Propeny in accordance with the attached Loan Assumption Addendum. (d) $ , BY SELLER FINANCING in accordance with the attached Seller Financing Addendum. (e) $ ,BALANCE of the purchase price in cash at Closing. 5. CONDITIONS: (State N/A in each blank that is not a condition to this contract.) (a) Buyer must be able to obtain a ^ FHA ^ VA (attach FHA/VA Financing Addendum) ^ Conventional ^ Other: loan at a ^ Fixed Rate ^ Adjustable Rate in the principal amount of (plus any financed VA Funding Fee or FHA MIP) for a tetra of year(s), at an initial interest rate not to exceed _% per annum, with mortgage loan discount points not to exceed _% of [he loan amount. Buyer shall apply for said loan within -days of the Effective Date of this contract. Buyer shall use Buyer's best efforts to secure the lender's customary loan commitment letter on or before and to satisfy all tet~tts and conditions of the loan commitment letter by Closing. After the above letter date, Seller may request in writing from Buyer a copy of the loan commitment letter. If Buyer fails to provide Seller a copy of the loan commitment letter or a written waiver of this loan condition within f ive days of receipt of Seller's request, Seller may terminate this contract by written notice to Buyer a[ any time thereafter, provided Seller has not then received a copy of the letter or the waiver. Buyer shall be responsible for all costs with respect to any loan obtained by Buyer, except if Seller is to pay any of the Buyer's Closing costs (including loan discount points), those costs are as follows: (b) There must be no restriction, easement, zoning or other governmental regulation that would prevent the reasonable use oC OS ~e y for any and all uses permitted by governmental authorities at the time of/ ~ ~. (c) The Property must be in substantially the same or better condition at Closing as on the date of this offer, reasonable wear and tear excepted. (d) All deeds of trust, liens and other charges against the Property, not assumed by Buyer, must be paid and satisfied by Seller prior to or at Closing such [hat cancellation may be promptly obtained following Closing. Seller shall remain obligated to obtain any such cancellations following Closing. (e) Title must be delivered at Closing by GENERAL WARRANTY DEED unless otherwise stated herein, and must be fee simple marketable title, free of all encumbrances except: ad valorem [axes for the current year (prorated through the date of Closing); utility easements and unviolated restrictive covenants that do not materially affect the value of the Property; and such other encumbrances as may be assumed or specifically approved by Buyer. The Propeny must have legal access to a public right of way. 6. SPECIAL ASSESSMENTS: Seller warrants that there are no pending or confirmed governmental special assessments for sidewalk, paving, water, sewer, or other improvements on or adjoining the Property, and no pending or confirmed owners' association special assessments, except as follows: (Insert "None" or the identification of such assessments, if any.) Seller shall pay all owners' association assessments and all governmental assess- ments confirmed through the time of Closing, if any, and Buyer shall take title subject to all pending assessments, if any, unless otherwise agreed as follows: 7. PROBATIONS AND ADJUSTMENTS: Unless otherwise provided, [he fallowing items shall be prorated and either adjusted between [he panics or paid at Closing: (a) Ad valorem taxes on real property shall be prorated on a calendar year basis through the date of Closing; (b) Ad valorem taxes on personal property for the entire year shall be paid by the Seller unless the personal property is conveyed to the Buyer, in which case, the personal property taxes shall be prorated on a calendar year basis through the date of Closing. (c) All late listing penalties, if any, shall be paid by Seller. (d) Rents, if any, for the Property shall be prorated through the date of Closing. (c) Owners' association dues and other like charges shall be prorated through the date of Closing. Scllcr rcprcscnts that the regular owners' association dues, i(any, arc $ per f3. CLOSING EXPENSES: Seller shall pay for preparation of a deed and all other documents necessary to perform Seller's obligations under this agreement, and for excise tax (revenue stamps) required by law. Buyer shall pay for recording the deed and for preparation and recording of all instmments required to secure the balance of the purchase price unpaid al Closing. 9. FUEL: Buyer agrees to purchase from Seller the fuel, if any, situated in any tank on the Property a[ [he prevailing rate with the cost of measurement thereof, if any, being paid by Seller. 10. EVIDENCE OF TITLE: Seller agrees to use his best efforts to deliver to Buyer as soon as reasonably possible after the Effective Date of this contract, copies of all title information in possession of or available to Seller, including but not limited to: title insurance policies, attorney's opinions on title, surveys, covenants, deeds, notes and deeds of trust and easements relating to the Property. 11. LABOR AND MATERIAL: Seller shall furnish at Closing an affidavit and indemnification agreement in form satisfactory to Buyer showing that all labor and materials, if any, furnished to the Property within 120 days prior to the date of Closing have been paid for and agreeing to indemnify Buyer against all loss from any cause or claim arising therefrom. NC Bar Association Form No. 2, ©6199. Revised. Thls Standard Form has been approved Iolntly by the: Printed by Agreement with the NC Bar Association -- 1981 NORTH CAROLINA BAR ASSOCIATION - NC Bar Form No. 2 James Williams & Co., Inc. • Yadkinville, NC 27055-0127 NORTH CAROLINA ASSOCIATION OF REALTORS®, INC. -Standard Form No.2 12. PROPERTY DISCLOSURE AND INSPECTIONS: (a) Property Disclosure: ^ Buyer has received a signed copy of the N.C. Residential Property Disclosure Statement prior to the signing of this Offer to Purchase and Contract. ^ Buyer has NOT received a signed copy of the N.C. Residential Property Disclosure Statement prior to the signing of this Offer to Purchase and Contract and shall have the right to terminate or withdraw this contract without penalty prior to WHICHEVER OF THE FOLLOWING EVENTS OCCURS FIRST: (1) the end of the third calendar day following receipt of the Disclosure Statement; (2) the end of the third calendar day following the date the contract was made; or (3) Closing or occupancy by the Buyer in the case of a sale or exchange. ^ Exempt from N.C. Residential Property Disclosure Statement because (SEE GUIDELINES) ^ The Property is residential and was built prior to 1978 (Attach Lead-Based Paint or Lead-Based Paint Hazards Disclosure Addendum.) (b) Property Inspection: Unless otherwise stated herein , or as otherwise provided on an inspection addendum attached hereto, Buyer shall have the option of inspecting or, obtaining at Buyer's expense, inspections to determine the condition of the Property. Unless otherwise stated herein, it is a condition of this contract that: (i) the built-in appliances, electrical system, plumbing system, heating and cooling systems, roof coverings (including flashing and gutters), doors and windows, exterior surfaces, structural components (including foundations, columns, chimneys, floors, walls, ceilings and roofs), porches and decks, fireplaces and flues, crawl space and attic ventilation systems (if any), water and sewer systems (public and private), shall be performing the function for which intended and shall not be in need of immediate repair; (ii) there shall be no unusual drainage conditions or evidence of excessive moisture adversely affecting the structure(s); and (iii) there shall be no friable asbestos or existing environmental contamination. Any inspecti~sos~~~~ ~dpt~lgted and written notice of necessary repairs shall be given to Seller on or before 3 0 days be f oYe the ~ el er sha provide written notice to Buyer of Seller's response within 15 days of Buyer's notice. completed by Closine. (c) Wood-Destroying Insects: Unless otherwise stated herein, Buyer shall have the option of obtaining, at Buyer's expense, a report from a licensed pest control operator on a standard form in accordance with the regulations of the North Carolina Structural Pest Control Committee, stating that as to all structures except there was no visible evidence of"wood-destroying insects and containing no indication of visible damage therefrom. The report must be obtained in sufficient time so as to permit treatment, if any, and repairs, if any, to be completed prior to Closing. All treatment required shall be paid for by Seller and completed prior to Closing, unless otherwise agreed upon in writing by the parties. The Buyer is advised that the inspection report described in this p~E~h may not always reveal either structural dam pe or damage caused by_a}tents or organisms other than wood-destrovi~E insects. If new construction, Seller shall provide a standard warranty of termite soil treatment. (d) Repairs: Pursuant to any inspections in (b) and/or (c) above, if any repairs are necessary, Seller shall have the option of completing them or refusing [o complete them. If Seller elects not to complete the repairs, then Buyer shall have the option of accepting the Property in its present condition or terminating this contract, in which case all earnest monies shall be refunded. Unless otherwise stated herein, or as otherwise provided on an inspection addendum attached hereto, any items not covered by (b) (i), b (ii), b (iii) and (c) above are excluded from repair negotiations under this contract. (e) Acceptance: CI OSIN SHAI I CONSTITUTF ACCFPTANCE OF EACH OF THE SYSTEMS ITFMS AND CONDITIONS LISTED ABOVE IN ITS THFN FXISTING CONDITION UNf FSS PROVISION IS OTHFRWISF MADF IN WRITING 13. REASONABLE ACCESS: Seller will provide reasonable access to the Property (including working, existing utilities) through the earlier of Closing or possession by Buyer, to Buyer or Buyer's representatives for the purposes of appraisal, inspection, and/or evaluation. Buyer may conduct a walk-through inspection of the Property prior to Closing. 14. CLOSING: Closing shall be defined as the date and time of recording of the deed. All parties agree to execute any and all documents and papers necessary in connection with Closing and transfer of title on or before , at a place designated by Buyer. The deed is to be made to 15. POSSESSION: Unless otherwise provided herein, possession shall be delivered at Closing. In the event possession is NOT to be delivered at Closing: ^ a Buyer Possession Before Closing Agreement is attached. OR, ^ a Seller Possession After Closing Agreement is attached. 16. OTHER PROVISIONS AND CONDITIONS: (ITEMIZE ALL ADDENDA TO THIS CONTRACT AND ATTACH HERETO.) 17. RISK OF LOSS: The risk of loss or damage by fire or other casualty prior to Closing shall be upon Seller If the improvements on the Property are destroyed or materially damaged prior to Closing, Buyer may terminate this contract by written notice delivered to Seller or Seller's agent and all deposits shall be resumed to Buyer. In the event Buyer does NOT elect to terminate this contract, Buyer shall be entitled to receive, in addition to [he Property, any of the Seller's insurance proceeds payable on account of the damage or destnrction applicable to the Property being purchased. 18. ASSIGNMENTS: This contract may not be assigned without the written consent of all parties, but if assigned by agreement, then [his contract shall be binding on the assignee and his heirs and successors. 19. PARTIES: This contract shall be binding upon and shall inure to the benefit of [he parties i.e., Buyer and Seller and their heirs, successors and assigns. As used herein, words in the singular include the plural and the masculine includes the feminine and neuter genders, as appropriate. 20. SURVIVAL: If any provision herein contained which by its nature and effect is required to be observed, kept or performed after the Closing, it shall survive the Closing and remain binding upon and for the benefit of the parties hereto until fully observed, kept or performed. 21. ENTIRE AGREEMENT: This contract contains the entire agreement of the parties and there are no representations, inducements or other provisions other than those expressed herein. All changes, additions or deletions hereto must be in writing and signed by all parties. Nothing contained herein shall alter any agreement between a REALTOR or broker and Seller or Buyer as contained in any listing agreement, buyer agency agreement, or any other agency agreement between them. 22. NOTICE AND EXECUTION: Any notice or communication to be given to a party herein may be given to the party or to such party's agent. This offer shall become a binding contract (the "Effective Date") when signed by both Buyer and Seller and such signing is communicated to the offering party. This contract is executed under seal in signed multiple originals, all of which together constitute one and the same instmment, with a signed original being retained by each party and each REALTOR or broker hereto, and the parties adopt the word "SEAL" beside [heir signatures below. IF YOU DO NOT UNDERSTAND THIS OFFER TO PURCHASE AND CONTRACT OR FEEL THAT IT DOES NOT PROVIDE FOR YOUR LEGAL NEEDS, YOU SHOULD CONSULT A NORTH CAROLINA REAL ESTATE ATTORNEY BEFORE YOU SIGN IT. Buyer acknowledges having made an on-site personal examination of the Property prior to the making of this offer. Dale: Buyer (SEAL) Date: Buyer (SEAL) Date: Seller (SEAL) Date: Seller Escrow Agent acknowledges receipt of the earnest money and agrees to hold and disburse the same in accordance with the terms hereof. Date Firm: ^ Buyer's Agent ^ Seller's (sub)agent Selling Agent/Firm/Phone Acting as ^ Dual Agent ^ Seller's (sub)agent Listing Agent/Firm/Phone Acting as ^ Dual Agent Printed by: ,lames Williams 8 Co., Inc. ®6/99 NC BAR ASSOCIATION -Form No. 2 NC ASSOCIATION OF REALTORS®, INC. -Form No. 2