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HomeMy WebLinkAboutAgenda - 01-24-2006-8aORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: January 24, 2006 Action Agenda Item No. _8_g_ SUBJECT: Public Hearing on Financing the Acquisition of a Facility Located at 510 Meadowlands Drive, Hillsborough, and Adoption of Related Resolution DEPARTMENT: Finance PUBLIC HEARING: (Y/N) yes ATTACHMENT(S): Resolution Agreement for Purchase and Sale Draft Financing Agreement INFORMATION CONTACT: Ken Chavious, ext 2453 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To conduct a public hearing on matters related to financing the acquisition of the facility located at 510 Meadowlands Drive, Hillsborough, and to adopt the resolution that authorizes the financing. BACKGROUND: On December 13, 2005 to the Board approved the purchase of a facility located at 510 Meadowlands Drive, Hillsborough, currently occupied by Tweeter, Inc, The owner has agreed to the County's purchase of the building for a sum of $1,700,000 and the County's purchase of non-inventory equipment and furnishings in the building for a sum of $35,000. All but $50,000 of the total $1,735,000 will be owner-financed for a period of 10-years at an interest rate of 5%. In addition, the Board authorized the Finance Director to submit an application to the Local Government Commission (LGC) for approval of the financing. A preliminary application requesting approval of this proposed financing has been forwarded to the LGC. Prior to the LGC granting approval, the Board is required to conduct a public hearing on matters related to the financing proposal. The Board has established January 24, 2006 as the date for the hearing. In addition to the hearing, the Board is required to adopt a resolution in support of the County's application. The resolution in, in this case, also grants the necessary approval of the transaction as well as authorizes County staff to finalize the financing. The resolution has been prepared by Bond Counsel in compliance with the requirements of the LGC. FINANCIAL IMPACT: As mentioned above, the total purchase price is $1,735,000, with Fifty Thousand Dollars ($50,000) of the purchase price of the facility and the personal property to be paid to the owner at closing and the remaining $1,685,000 financed by the owner at 5% over a ten-year period. Projected annual debt service payments would be in the neighborhood of $250,000 and will fit within the parameters of the County's Debt Management Policy. RECOMMENDATION(S): The Manager recommends that the Board conduct the Public Hearing and adopt the resolution authorizing the financing. 0 Resolution providing final approval of terms and conditions For Meadowlands Building acquisition and financing WHEREAS- Orange County has previously determined in principle to finance the acquisition of a building located at 510 Meadowlands Drive, Hillsborough, and associated real and personal property (collectively, the "Meadowlands Building"). The County's plan for the project includes owner financing for the acquisition. The County's Board of Commissioners has been provided a draft of the proposed contract for the acquisition (the "Sales Contract"), which provides (a) for a purchase price of $1,735,000, (b) for $50,000 of the purchase price to be paid in cash at closing, and (c) for the remaining amount to be financed by the sellers for 10 years at an annual interest rate of 5%. The Sales Contract includes as an exhibit the form of the Financing Agreement and Deed of Trust (the "Financing Agreement") that the parties will enter into to memorialize the financing transaction and to provide for a lien on the property to secure the County's obligations to the sellers. The proposed financing would therefore be secured by a lien on the Meadowlands Building (including the associated land and any related fixtures) and the County's promise to repay the financing, but there would be no recourse against the County or its property (other than the pledged property) if there were a default on the financing. The County's plan requires the approval of the North Carolina Local Government Commission (the "LGC" ). Under LGC guidelines, this governing body must make certain findings of fact to support the County's application for the LGC's approval of the County's proposed financing arrangements for the project The County's undertaking of the financing was the subject of a public hearing held earlier today on January 24, 2006. NOW, THEREFORE, BE IT RESOLVED that the Board of Commissioners of Orange County, North Carolina, makes the following findings of fact: (a) The proposed project is necessary and appropriate for the County under all the circumstances. The County has long searched for a solution to its on-going need for bulky storage items and for records with long-term archival space. The Meadowlands Building will provide a solution to these problems, along with providing office space for several County departments with plentiful parking and room for expansion. (b) The proposed installment financing is preferable to a bond issue for the same purpose. The current owners of the Meadowlands Building desire to provide owner financing for the County's acquisition, and therefore an installment financing presents itself as the most appropriate financing vehicle. The County has long determined to combine voted and non- voted financings in its capital improvements program, (c) The estimated sums to fall due under the proposed financing contract are adequate and not excessive for the proposed purpose. Although the financing rate contemplated by the Contract may exceed financing rates otherwise available to the County, the advantageous purchase price offsets any detriment from the financing rate. In addition, the financing rate and owner financing are key business considerations for the seller in the negotiations for the County's acquisition of a most desirable building. (d) As confirmed to the Board at this meeting by the County's Finance Officer, (I) the County's debt management procedures and policies are sound and in compliance with law, and (ii) the County is not in default under any of its debt service obligations.. (e) Although the County expects that there will be from time to time tax increases associated with the County's overall capital investment program, any tax increase attributable to the current proposed financing will be minimal and appropriate under all the circumstances (f) The County Attorney is of the opinion that the proposed project is authorized by law and is a purpose for which public funds of the County may be expended pursuant to the Constitution and laws of North Carolina BE IT FURTHER RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. Determination To Proceed with Financing - The County confirms its plans to undertake and finance the acquisition of the Meadowlands Building. The County will carry out the plan with owner financing, and generally as described in the draft Sales Contract. The Board approves the Sales Contract and the Financing Agreement in the forms provided, and the Sales Contract and the Financing Agreement in final form must be in substantially the forms presented. 2. Direction To Execute Documents -- The Board authorizes and directs the Board's Chair, the County Manager and the County Finance Officer to act on the County's behalf and to execute and deliver all appropriate documents (the "Documents") for the proposed financing, including the Sales Contract and the Financing Agreement in their final forms. The execution and delivery of any Document by an authorized officer will be conclusive evidence of his approval of the final form of such Document. The Documents in final form, however, must be consistent with the financing plan described in this resolution. 3. Authorization to Finance Officer To Complete Closing - The Board authorizes and directs the Finance Officer to hold executed copies of all financing documents authorized or permitted by this resolution in escrow on the County's behalf until the conditions for their delivery have been completed to such officer's satisfaction, and thereupon to release the executed copies of such documents for delivery to the appropriate persons or organizations. 0 Without limiting the generality of the foregoing, the Board specifically authorizes the Finance Officer to approve changes to any Documents, agreements or, certifications previously signed by County officers or, employees, provided that such changes do not conflict with this resolution or substantially alter the intent from that expressed in the form originally signed. The Finance Officer's authorization of the release of any such document for delivery will constitute conclusive evidence of such officer's approval of any such changes. 4. Resolutions As To Tax Matters -- The County will not take or omit to take any action the taking or omission of which will cause its obligations to pay principal and interest under the Sales Contract (the "Obligations") to be "arbitrage bonds," within the meaning of Section 148 of the "Code" (as defined below), or "private activity bonds" within the meaning of Code Section 141, or otherwise cause interest components of the installment payments to be includable in gross income for federal income tax purposes. Without limiting the generality of the foregoing, the County will comply with any Code provision that may require the County at any time to pay to the United States any part of the earnings derived from the investment of the financing proceeds. In this resolution, "Code" means the United States Internal Revenue Code of 1986, as amended, and includes applicable Treasury regulations. 6. Miscellaneous Provisions -- All County officers and employees are authorized and directed to take all such further action as they may consider necessary or desirable in furtherance of the purposes of this resolution. All such prior actions of County officers and employees are ratified, approved and confirmed. Upon the absence, unavailability or refusal to act of the County Manager, the Board's Chair or the Finance Officer, any other of such officers may assume any responsibility or carry out any function assigned in this resolution.. All other Board proceedings, or parts thereof, in conflict with this resolution are repealed, to the extent of the conflict. This resolution takes effect immediately. I certify that the foregoing resolution was duly adopted at a meeting of the Board of Commissioners of Orange County, North Carolina, duly called and held on January 24, 2006, and that a quorum was present and acting throughout such meeting. Such resolution remains in full effect as of today. Dated this _ day of January, 2006. [SEAL] Donna S. Baker Clerk, Board of Commissioners Orange County, North Carolina 6 AGREEMENT FOR PURCHASE AND SALE THIS AGREEMENT FOR PURCHASE AND SALE ("Agreement") is made and entered into as of this _ day of 2006, by and between THE SHACHTMAN, LLC, 251 S. Elliott Road, Chapel Hill, NC 27514, a North Carolina limited liability company ("Seller") and the ORANGE COUNTY, NORTH CAROLINA, P.O Box 8181, Hillsborough, NC 27278, a body politic and corporate entity ("Buyer") RECITALS A Seller is the owner of that certain parcel of land located at 510 Meadowlands Drive, Hillsborough, North Carolina and particularly described on Exhibit A attached hereto and incorporated herein by reference, which parcel of land is referred to herein as the "Land." B Seller is or will be at the closing of the Property (as hereinafter defined), the owner of fixtures and tangible personal property located on the Land including that located in buildings that are on and a part of the Land. C Buyer desires to purchase from Seller and Seller desires to sell and convey to Buyer the Property in accordance with the terms and conditions of this agreement. NOW, THEREFORE, in consideration of the premises, the mutual promises and agreements hereinafter set forth, and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby aclmowledged, Seller and Buyer agree as follows: 1 DESCRIPTION OF THE LAND AND PROPERTY: Subject to the terms and conditions of this Agreement, Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller the following: a) All of the Land; b) All of Seller's right, title and interest in any and all rights, privileges and easements, if any, on, at or appurtenant to the Land, including, without limitation, all water, mineral and air rights, rights-of-way, roadways and roadbeds, utility facilities, reversions and any other rights, privileges, interest, easements or appurtenances used in connection with the beneficial use of the Land; C) All improvements, fixtures and tangible personal property owned by Seller, now or on the Closing, located on the land or used in connection with the operation of the land. All of the Land and other items of property described in Subsections (a), (b) and (c) above to be conveyed to Buyer are hereinafter collectively called the "Property." 2. PURCHASE PRICE: Subject to the terms and conditions of this Agreement, the total purchase price to be paid by Buyer to Seller for the Property is One Million Seven Hundred Thirty-five Thousand Dollars ($1,735,00000), One Million Seven Hundred Thousand Dollars ($1,700,000.00) for the Land and Thirty-five Thousand Dollars ($35,000 00) for the fixtures and tangible personal property. The Purchase Price will be paid by Buyer to Seller as follows: Fifty Thousand Dollars ($50,000.00) by bank check or wire transfer at Closing and One Million Six Hundred Eighty-five Thousand Dollars ($1,685,00000) according to the terms of the Financing Agreement and Deed of Trust, an unsigned copy of which is Exhibit B attached hereto and incorporated herein by reference RALEicnw5476s 6 I 3 CLOSING AND CLOSING DATE: The consummation of the sale by Seller and the purchase by Buyer of tine Property (tire "Closing") shall take place on or before April 1, 2006 at the offices of Coleman, Gledhill, Hargrave & Peek, P.C, 129 E Tryon Street, Hillsborough, North Carolina. At Closing, title to the Property shall be delivered to Buyer. In the event Buyer, despite diligent efforts, is unable by March 10, 2006, to satisfy one or more of the conditions for Closing set forth in Section 7(a)(v), relating to the I GC Approval (as hereinafter defined) and Section 7(a)(vii), relating to a regulatory moratorium, and Buyer reasonably believes that such condition or conditions may be satisfied by April 14, 2006, Buyer may extend the date for Closing through and including May 15, 2006, by giving a written notice to Seller on or before March 15, 2006 At Closing, title to the Property shall be delivered to Buyer. Buyer and Seller agree to work diligently in good faith to close as early as possible following the satisfaction of the financing and land use contingencies referred to in Sections 6(e), 7(a)(v) and 7(a)(vii) below. 4. DELIVERY OF DOCUMENTATION: Seller shall provide to Buyer as soon as reasonably possible, and in any event within twenty (20) days of execution by Buyer and Seller of this Agreement, copies of the following (the "Due Diligence Information"): a) A list of all fixtures and tangible personal property owned by Seller and which will be owned by Seller at Closing and used in connection with the present operation of the Property, together with the form of a bill of sale or other appropriate title instrument that will be used to transfer title to this property to Buyer, free of any and all liens or other encumbrance; b) A list of all contracts, leases, and commitments between Seller and third parties entered into in connection with the Seller's operation of the Property, including documents evidencing their termination, without recourse to Buyer, on or before Closing; c) Copies of such information as Buyer may reasonably request in connection with Buyer's obtaining of title insurance commitments or otherwise with respect to the Property. 5 ACTIONS PENDING CLOSING: a) Investigation Period: As of the date hereof through the date which is thirty (30) days after execution by Buyer and Seller of this Agreement ("Investigation Period") and nevertheless subject to the terms and conditions of this Agreement, Buyer and Buyer's authorized representatives shall be entitled to make such investigations and other inquiries, tests and evaluations regarding this Property (collectively, the "Investigations") as Buyer deems reasonably necessary If the results of such Investigations are unacceptable to Buyer, in Buyer's sole and absolute discretion, then Buyer shall have the right, exercised not later than die expiration of the Investigation Period, to terminate this Agreement by giving written notice thereof to Seller, in which event the parties hereto shall have no further rights, obligations or liabilities with respect to each other under this Agreement b) Access to Property: Seller shall give Buyer and its agents, engineers and other representatives, access to the Property from the date hereof through Closing, at reasonable times after reasonable notice to Seller, for the purpose of conducting inspections and examinations of the Property and of monitoring activities at the Property. Buyer shall also have the right to review and inspect all leases, contracts or other agreements related directly to the Property and shall be entitled to review such books and records of Seller as relate directly to the ownership of the Property Buyer assumes all responsibility for the acts of itself, its agents and representatives in exercising its rights under this paragraph and Buyer furthermore, to the extent permitted by law, indennnifies and agrees to defend and hold Seller harnfless from and against any and all claims, causes, suits, losses, damages, liabilities, expenses and costs (including reasonable attorney fees and expenses) arising out of or caused by Buyer's activities at, on or in connection with the Property c) Review and Status of Title: At least five (5) business days prior to the expiration of the Investigation Period, Buyer may obtain at Buyer's sole cost and expense, commitments for title insurance showing the condition of title of the Land (including, without limitation, any matters disclosed by Buyer's survey of the Land, should it elect to obtain one). At any time prior to the expiration of the Investigation Period, Buyer may elect RAL EIGI 1\454765 6 8 to provide written notice of Buyer's disapproval of any title matter as shown in the title commitment (those disapproved title matters as so identified by Buyer being hereinafter called the "Disapproved Exceptions"), whereupon Seller shall have thirty (30) days to cure or remove such Disapproved Exception, provided that Seller may elect to cure any Disapproved Exception that may be cured by the payment of money at Closing In the event Seller elects, in its sole discretion, not to cure a Disapproved Exception, then Buyer may either (i) terminate this Agreement by giving to Seller written notice of such election to teminate on or before ten (10) days from the date on which Buyer receives written notice that Seller has elected that it will not cure a Disapproved Exception without further claim or obligation of any kind to the Seller, or (ii) withdraw the Disapproved Exception and proceed to close without any abatement in the Purchase Price. If Buyer does not elect by written notice between (i) and (ii) of the immediately preceding sentence within ten (10) days of Buyer's receipt of Seller's written notice that it will not cure a Disapproved Exception, then Buyer shall be deemed to have elected (ii). 6 ADDITIONAL AGREEMENTS OF THE PARTIES: a) Risk of Loss - Insurance Policies: The risk of loss with respect to the Property prior to the Closing shall be on Seller. Unless otherwise agreed to by the parties, if the Property suffers a casualty damage prior to Closing that would cause the Seller to cease the conduct of its business on the Property as currently conducted for a continuous period of one (1) week or longer, Buyer shall have the right to terminate this Agreement by written notice to Seller. Between the date of this Agreement and the Closing, Seller shall keep all existing insurance policies applicable to the Property in full force and effect b) Eminent Domain: Notwithstanding anything to the contrary elsewhere in this Agreement, including, without limitation, the expiration of the Investigation Period, if, prior to the Closing, all or any part of the Property is taken by eminent domain or if condemnation proceedings are commenced, Buyer shall have the option, by written notice to Seller, to terminate this Agreement. If Buyer does not elect to terminate this Agreement, it shall remain in full force and effect, and Seller shall assign, transfer and set over to Buyer at the Closing all of Seller's right, title and interest in any awards that may be made for such taking, c) Seller's Covenant Against Waste and as to Operations: Consent and Monitoring as to Maintenance: Between the date of this Agreement and through and including the date of Closing, Seller agrees not to condmt waste upon the Property, or any portion thereof; and Seller warrants and covenants that the Property shall remain in a condition similar to that which it was as of the date of this Agreement, reasonable wear and tear excepted. d) Representation and Warranties of Seller: In addition to any other warranty or representation of Seller set forth in this Agreement, Seller hereby makes the following representations and warranties to Buyer: W The land is now zoned High Intensity Commercial, which zoning permits the use of the Property by Buyer for any governmental purpose To Seller's actual knowledge, there is no pending application for changes in the zoning affecting the Property or any action, suit, proceeding, appeal or other litigation which might affect such zoning. If Seller receives notice of any application for changes in the present zoning of the Property, Seiler shall immediately notify Buyer of same, (ii) To Seller's actual knowledge, the Property is free from any pending or proposed assessments, (iii) Seller has received no notice that there is a current violation of any applicable federal, state or local law, ordinance, regulation, order, rule or requirement affecting the Property. (iv) Seller has not received any notice from any city, county or other governmental authority of any taking of the Property, or any portion thereof, by eminent domain; and, to Seller's actual knowledge, no such taking of the Property, or any portion thereof, is threatened or contemplated RALEIGHW54765 6 9 (v) Neither the execution of this Agreement nor the consummation of the transaction contemplated hereby will conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any agreement or instrument to which Seller or any related party of Seller is a party or by which Seller or any related party of Seller is bound. (vi) No notice of violation or other written communication has been received by Seller from a governmental agency or any other entity or person alleging or suggesting an environmental law violation on the Property (vii) There is no condition or covenant imposed on the Property or contractual requirement of Seller that would prohibit the use of the Property for High Intensity Commercial uses as those uses are defined in the Hillsborough Zoning Ordinance at the time of the Closing and any such condition, covenant or contractual requirement must permit the use of the Property for any governmental purpose. For purposes of this Agreement, "to the best of Seller's knowledge" or "to Seller's actual knowledge" does not mean that Seller has an obligation to make an independent investigation prior to entering into this Agreement. e) Local Government Commission Approval Buyer and Seller acknowledge that the financing to conclude the purchase of the Property is subject to the approval of the North Carolina Local Government Commission (the "LGC Approval"). If such approval is not obtained by March 10, 2006, (or April 14, 2006, if the period for Closing is extended pursuant to Section 3), either Buyer or Seller may temunate this Agreement by written notice to the other. 0 Cooperation. The parties agree to cooperate in good faith in connection with the implementation of the provisions of this Agreement. The foregoing agreements, representations and warranties of Seller and Buyer shall be deemed reaffirmed as of the date of Closing, but, except as expressly set forth therein, shall not survive the Closing. 7. CLOSING AGREEMENTS: a) Conditions to Buyer's Obligations: Notwithstanding anything contained elsewhere herein to the contrary, Buyer's obligation to consummate the purchase of the Property is expressly contingent upon satisfaction of the following provisions (unless waived by Buyer): (f) Seller shall have complied with and otherwise performed each of the covenants and obligations of Seller as set forth in this Agreement; (ii) All representations and warranties of Seller as set forth in this Agreement shall be in all material respects true and correct as of the Closing Date; (iii) There shall have been no material adverse change to the title to the Property between the effective date of the title commitment delivered to Buyer and the date of Closing that is not cured by Seller on or before Closing, and there shall have been no material adverse change to the environmental condition of the Property that is not cured by Seller on or before Closing; (iv) The Buyer shall have received die LGC Approval and shall have secured financing for its put chase of the Property; (v) No material violation of law with respect to the Property or any portion of die Property shall exist as of the date of Closing; anrErGH\4sa7ss 4 la (vi) There shall be no regulatory moratorium which prevents Buyer from obtaining approvals necessary to authorize it to use the Property for any governmental purpose (b) Conditions to Seller's Obligations: Notwithstanding anything contained elsewhere herein to the contrary, Seller's obligations to consummate the sale of the Property is expressly contingent upon satisfaction of the following provisions (unless waived by Seiler): (i) Buyer shall have complied with and otherwise performed each of the covenants and obligations of Buyer as set forth in this Agreement; (ii) No order, injunction, litigation, or regulation shall be pending or existing prohibiting or preventing Seller from consummating the sale. (iii) Buyer shall have obtained all necessary authorization to pay the Purchase Price and otherwise perform its obligations as set forth in this Agreement. c) General Warranty Deed: (i) Buyer shall provide Seller at least ten (10) business days advance notice of the date of Closing. Seller shall prepare and deliver to Buyer the following at Closing: (a) A duly executed general warranty deed conveying good, fee simple and marketable title to the Land, free and clear of all liens and encumbrances except utility easements of record serving the property, the rights of way of public roads, taxes not yet due and payable and the matters and exceptions to which Buyer did not object in writing prior to the end of the Investigation Period and other matters and exceptions to title as may be waived by Buyer (b) A duly executed lien affidavit and indemnity holding Buyer and the title company harmless against unpaid mechanics' and materialmen's liens, (c) A certificate that Seller is not a foreign person. (d) A Bill of Sale containing full warranties of title without liens or encumbrances transferring personal property, including fixtures, to Buyer. (e) Such evidence of the due organization and authority of the Seller to enter into and consummate the transactions set forth herein as shall be required by any title company or reasonably required by Buyer (ii) At Closing Buyer shall pay the Purchase Price (in accordance with the terms of Section 2 above) and shall execute and deliver to Seller: (a) Such evidence as to the authority of Buyer to enter into and consummate the transactions set forth herein as shall be reasonably required by Seller. d) Closing Costs: Except as otherwise expressly set forth herein: (i) Seller shall pay all costs of Closing except Buyer's recording fees, Buyer's title insurance costs, any costs related to Buyer's financing and Buyer's due diligence expenses. Without limiting the foregoing, 2006 property taxes and documentary transfer tax stamps shall be the responsibility of Seller. (ii) Each party shall pay its own legal fees. RAL EIGIh1\454765 6 e) Property Association Proration: Property association fees for the year of Closing shall be prorated based on the number of actual days from the date of Closing through the end of the calendar year 8. DEFAULT AND REMEDIES: a) In die event Seller defaults under this Agreement or fails to perform any of the conditions or obligations of Seller hereunder or in the event any of the representations and warranties contained herein are not true and correct as of the date hereof and as of date of Closing, Buyer shall be entitled as its sole and exclusive remedy to either: W Enforce by an action in law or equity Seller's specific performance of Seller's obligations to convey the Property without abatement of the Purchase Price; or (ii) Elect to terminate this Agreement by giving written notice to Seller and the parties hereto shall then have no further rights, obligations or liabilities to each other hereunder. b) In the event Buyer defaults or fails to perform any of the covenants or conditions or obligations of Buyer hereunder, Seller, at its option, shall be entitled to enforce by an action at law or in equity Buyer's specific performance of Buyer's obligations arising out of this Agreement or to seek damages. c) In the event the Closing has not occurred on or before April 1, 2006 (or May 15, 2006, if the date for Closing is extended pursuant to Section 3), notwithstanding the diligent efforts of the parties and without breach by either party, either party may terminate this Agreement on written notice to the other and neither party shall have any liability to the other. 9 ALLOCATIONS: Both Buyer and Seller of the Property agree to cooperate to allocate the Purchase Price between categories of property to allow Seller and Buyer to have the information necessary to file IRS Form 8594, if necessary 10. OTHER PROVISIONS: a) Counterparts: This Agreement maybe executed in counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument b) Entire Agreement: This Agreement contains the entire agreement between the parties and supersedes all prior and contemporaneous understandings and agreements, whether oral or written, between the parties respecting the subject matter hereof. There are no representations, agreements, arrangements or understandings, oral or written, between or among the parties to this Agreement relating to the subject matter of this Agreement which are not fully expressed herein c) Construction: The provisions of this Agreement shall be constructed as to their fair meaning and not for or against any party based upon any attribution to such part as the source of the language in questions. Headings used in this Agreement are for convenience of reference only and shall not be used in construing this Agreement d) Applicable Law: This Agreement shall be governed by the laws of the State of North Carolina. e) Severability: If any terms, covenants, conditions and/or provisions of this Agreement, or the application thereof to any person or circumstance, shall to any extent be held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, covenants, conditions and/or provisions of this Agreement, or the application thereof to any person or circumstance, shall remain in full force and effect and shall in no way be affected, impaued and/or invalidated thereby; provided, however, that if the term, covenant, condition, or provision, or the application thereof, which is held to be unenforceable is so central to the terms of this Agreement RALErcrP454766 6 i A that such mmenforceability would frustrate the purpose of this Agreement, either party may by written notice to the other terminate this Agreement. f) Waiver of Covenants Conditions and Remedies: The waiver by one party of the performance of any covenant, condition or promise under this Agreement shall not invalidate this Agreement nor shall it be considered a waiver by it of any other covenant, condition or promise hereunder. The waiver by either or both parties of the time for performing any act under this Agreement shall not constitute a waiver of the time for performing any other act or an identical act required to be performed at a later date. g) Amendment: This Agreement may be amended at any time by the written agreement of Buyer and Seller. All amendments, changes, revisions and discharges of this Agreement, in whole or in part, and from time to time, shall be binding upon the parties, despite any lack of legal consideration, so long as the same shall be in writing and executed by the parties hereto. ]r) Relationship of the Parties: The parties agree that their relationship is that of seller and buyer and that nothing contained herein shall constitute either party the agent or legal representative of the other for any purpose whatsoever Further, this Agreement shall not be deemed to create any form of business organization between the parties hereto; neither party is granted any right or authority to assume or create any obligation or responsibility on behalf of the other party; and neither party shall, in any way whatsoever, be liable for the debts of the other, i) Assignment: Seller may not assign its rights under this Agreement to any other entity without the prior written consent of Buyer. Buyer may not assign its rights, obligations and liabilities hereunder, without prior written consent of Seller Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties to this Agreement. j) Further Acts: Each party agrees to perform any further acts and to execute, acknowledge and deliver any documents which may be reasonably necessary to carry out the provisions of this Agreement. k) Brokers: Buyer and Seller each represent and warrant to the other that they have not dealt with any brokers or finders in connection with the purchase and sale of the Property, other than Anthony & Company and Pickett-Sprouse, to which a commission will be paid by Seller if and when Closing occurs pursuant to a separate agreement; and, insofar as such party knows, no broker or other person is entitled to any commission or finder's fee in connection with the purchase and sale of the Property. Seller agrees to inderrtrrify, defend and hold harmless Buyer against any claim incurred by reason of any brokerage fee, commission or finder's fee which is payable or alleged to be payable to any broker or finder because of any agreement, act, omission or statement of Seller This indemnity shall survive the Closing. 1) Notice: All notices and demands which either party is required or desires to give to the other shall be given in writing by personal delivery, express courier service, certified mail, return receipt requested, or by telecopy followed by next-day delivery of a hard copy to the following address of each party: If to Buyer: Orange County 200 South Cameron Street P. O Box 8181 Hillsborough, North Carolina 27278 Attention: Pam Jones, Director of Purchasing & Central Services Telec opy: 919-644-3001 7 RALElcll44547656 G with copy to: Geoffrey E Gledhill Coleman, Gledhill, Hargrave & Peek, P.C 129 E Tryon Sueet P. O. Drawer 1529 Hillsborough, North Carolina 27278 Telecopy:919-7.32-7997 and to: Robert M. Jessup The Sanford Holshouser Law Firm, PLLC One Exchange Plaza 219 Fayetteville Street, Suite 1000 Raleigh, NC 27601 Telecopy:919-829-0272 If to Seller: The Shachtman, L L C 251 S. Elliott Road Chapel Hill, NC 27514 Attention: Dr. Richard Shachtman, Manager Telecopy: 919-969-8700 with copy to: All notices and demands so given shall be effective upon the delivery, mailing or sending of the same to the party to whom a notice or demand is given, if personally delivered or sent by telecopy, and within two (2) days or upon receipt, whichever is earlier, if sent by express courier service or certified mail, return receipt requested. m) Survival: Except as provided herein to the contrary, the warranties and representations contained in this Agreement shall not survive the Closing. n) Time is of the Essence. Time is of the essence as to the time for the giving of notices, for Closing, and as to all other obligations of Buyer and Seller hereunder. o) No Third-Party Beneficiary. The parties to this Agreement acknowledge and agree that the rights and obligations contained herein are for the sole and express benefit of Buyer and Seller and that nothing herein shall operate to create rights in or obligations to other persons or entities not party to this Agreement. (the next page is the signature page) aALErGrn454765e ?4 IN WITNESS WHEREOF, the parties have caused this Agreement for Purchase and Sale to be executed by duly authorized officers (who, by such signing, warrants his/her authority to do so) as of the date first written above BUYER: ORANGE COUNTY, NORTH CAROLINA By: Barry Jacobs, Chair Orange County Board of Commissioners Date: SELLER: THE SHACHTMAN, LLC By: Richard Shachtman, Manager By: Ann Shachtman, Manager Date: RAreicrn4547e56 16 EXHIBIT A Legal Description That certain tot or parcel of land situated in the Town of Hillsborough, Orange County, North Carolina and more particularly described as follows: BEGINNING at a point located in the eastern margin of the 60 foot wide right-of-way of Meadowlands Drive, said beginning point being further located South 12° 12'30" West 360.84 feet from a nail located at the intersection of the center line of Meadowlands Drive with the center line of the 60 foot wide right-of-way of N.C Highway 70; and running thence from said beginning point South 73° 36'46... East 407 39 feet to a point; thence South 04" 48' 02" West 329 70 feet to a point; thence North 67" 16' 01" West 494.62 feet to a point located in the aforesaid easterly margin of the right-of-way of Meadowlands Drive; thence with said easterly margin of the right-of-way of Meadowlands Drive in two calls as follow: (1) with the arc of a circular curve to the left having a radius of 525 02 feet (and a chord course and distance of North 23" 54' 22" East 134,12 feet), an arc distance of 134.49 feet to a point; thence (2) North 16° 34' 02" East 135.34 feet to the point or place of Beginning; containing 3 00 acres and being Lot A as shown on a survey entitled "Subdivision of Property surveyed for Meadowlands Associates" By Alois Callemyn Land Surveyors dated February 26, 1996 and recorded in Plat Book 75 at Page 146, in the Orange County Registry. A-1 RALEIG11\454765 6 I(o EXHIBIT B Financing Agreement Attached B-1 Isg:omngecountyNurchase and Sale Agreement--Shachunan. DOC l7 Return After Recording To: Geoffrey E. Gledhill, Esq. Orange County Attorney P.O. Drawer 1529 Hillsborough, NC 27278 This instrument has been pre-audited in the manner required by The Local Government Budget and Fiscal Control Act. Finance Officer Orange County, North Carolina FINANCING AGREEMENT AND DEED OF TRUST STATE OF NORTH CAROLINA ) COLLATERAL IS OR INCLUDES FIXTURES ORANGE COUNTY ) THIS FINANCING AGREEMENT AND DEED OF TRUST (this "Agreement") is dated as of February 1, 2006, and is granted by ORANGE COUNTY, NORTH CAROLINA, a political subdivision of the State of North Carolina (the "County"), to , a citizen and resident of County, North Carolina (the "Deed of Trust Trustee"), for the benefit of ("Sellers"). RECITALS: i finagreemttweeter 18 The County has the power, pursuant to Section 160A-20 of the North Carolina General Statutes, to enter into installment contracts to finance the purchase of real property, and to secure its obligations under such contracts by a security interest in the property acquired. The Sellers are separately conveying the Site and the Facility, as defined below, to the County. The County will pay $1,685,000 of the purchase price in installments over time pursuant to this Agreement. This Agreement provides for securing the County's payment obligations by creating certain security interests in favor of Sellers. This Agreement therefore secures current advances of $1,685,000. The current scheduled date for final repayment is on or about NOW, THEREFORE, (1) in consideration of the execution and delivery of this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged; (2) to secure the County's performance of all its covenants under this Agreement, including the repayment of amounts financed, together with interest on all such advances as provided in this Agreement or any amendments hereto, and all charges and expenses of collection (including court costs and reasonable attorneys' fees and expenses); and (3) to charge the Mortgaged Property, as defined below, with such payment and performance, the County hereby sells, grants and conveys to the Deed of Trust Trustee, heirs and assigns forever, in trust, with power of sale, the following (collectively, the "Mortgaged Property"): (a) (i) the property described in Exhibit A, and (ii) all real property hereafter acquired by the County in replacement of, or in substitution for, all or any part of any property described in this subparagraph, and in all cases together with all easements, rights, liberties, rights-of-way and appurtenances belonging to any such property (collectively, the "Site"); and (b) any improvements and fixtures now or hereafter attached or appurtenant to or used in or on those improvements or the Site, including (i) all renewals and replacements thereof and all additions thereto, (ii) all articles in substitution thereof, (iii) all building materials for construction or repair of such 2 finagreemttweeter 19 improvements upon their delivery to the Site, and (iv) all proceeds of all the foregoing in whatever form resulting from the loss or disposition of the foregoing, including all proceeds of and unearned premiums for any insurance policies covering the Site and such improvements, proceeds of title insurance and payments related to the exercise of condemnation or eminent domain authority, and all judgments or settlements in lieu of any of the foregoing (collectively, the "Facility"); TO HAVE AND TO HOLD the Mortgaged Property with all privileges and appurtenances thereunto belonging, to the Deed of Trust Trustee, heirs and assigns forever, upon the trusts, terms and conditions and for the purposes set out below, in fee simple in trust; SUBJECT, HOWEVER, to the encumbrances described in Exhibit B (the "Existing Encumbrances"); BUT THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST: if the Required Payments (as defined below) are paid in full in accordance with this Agreement, and the County shall comply with all of the terms, covenants and conditions of this Agreement, this conveyance shall be null and void and shall be canceled of record at the County's request and cost, and title shall revest as provided by law. BUT IF, HOWEVER, THERE SHALL OCCUR AN EVENT OF DEFAULT UNDER THIS AGREEMENT, then Sellers shall have the remedies provided for in this Agreement, including directing the Deed of Trust Trustee to sell the Mortgaged Property under power, of sale. THE COUNTY COVENANTS AND AGREES with the Deed of Trust Trustee and Sellers (and their respective heirs, successors and assigns), in consideration of the foregoing, as follows: ARTICLE I DEFINITIONS; INTERPRETATION Unless the context clearly requires otherwise, capitalized terms used in this Agreement and not otherwise defined shall have the following meanings: "Additional Payments" means any amounts (other than the Installment Payments) payable by the County (or paid by Sellers on the County's behalf) as a result of its 3 finagreemttweeter a© covenants under this Agreement (together with interest that may accrue on any of the above if the County shall fail to pay the same, as set forth in this Agreement). "Amount Financed" means the principal sum of $1,685,000, "Bond Counsel Opinion" means a written opinion (in form and substance acceptable to Sellers) of an attorney or firm of attorneys acceptable to Sellers. "Budget Officer" means the County officer from time to time charged with preparing the County's draft budget as initially submitted to the Governing Board for its consideration. "Business Day" means any day on which banks in the State are not by law authorized or required to remain closed. "Closing Date" means the date on which this Agreement is first executed and delivered by the parties. "Code" means the Internal Revenue Code of 1986, as amended, including regulations, rulings and revenue procedures promulgated thereunder or under the Internal Revenue Code of 1954, as amended, as applicable to the County's obligations under this Agreement and all proposed (including temporary) regulations which, if adopted in the form proposed, would apply to such obligations. Reference to any specific Code provision shall be deemed to include any successor provisions thereto. "County" means Orange County, North Carolina. "County Representative" means the County's Finance Officer or such other person or persons at the time designated, by a written certificate furnished to Sellers and signed on the County's behalf by the presiding officer of the County's Governing Board, to act on the County's behalf for any purpose (or any specified purpose) under this Agreement. "Event of Default" means one or more events of default as defined in Section 8.01. "Event of Nonappropriation" means any failure by the Governing Board to adopt, by the first day of any Fiscal Year, a budget for the County that includes an appropriation for Required Payments as contemplated by Section 3.05. "Existing Encumbrances" means the encumbrances described in Exhibit B. 4 finagreemttweeter At "Fiscal Year" means the County's fiscal year beginning July 1 or such other fiscal year as the County may later lawfully establish. "Governing Board" means the County's governing board as from time to time constituted. "Installment Payments" means the payments payable by the County pursuant to Section 3.01. "LGC" means the North Carolina Local Government Commission. "Mortgaged Property" means the Mortgaged Property, as defined above. "Payment Dates" means the dates indicated in Exhibit C. "Permitted Encumbrances" means, as of any particular time, (a) the Existing Encumbrances, (b) liens for taxes and assessments not then delinquent, (c) this Agreement, and (d) easements, rights-of-way and other such minor defects or restrictions as normally exist with respect to property of the same general character as the Mortgaged Property which will not impair the County's intended use of the Mortgaged Property. "Prime Rate" means the interest rate so denominated and set by Branch Banking & Trust Company of North Carolina (whether or not such Bank, or any affiliate thereof, is at any time the beneficiary under this Agreement) as its "Prime Rate," as in effect from time to time. "Required Payments" means Installment Payments and Additional Payments. "Section 160A-20" means Section 160A-20 of the North Carolina General Statutes, as amended, or any successor provision of law. "State" means the State of North Carolina. All references in this Agreement to designated "Sections" and other subdivisions are to the designated sections and other subdivisions of this Agreement. The words "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision unless the context indicates otherwise. Words importing the singular number shall include the plural number and vice versa. ARTICLE II 5 finagreemttweeter as SECURITY PROVIDED BY THIS AGREEMENT; LIMITED OBLIGATION 2.01. Security for Payment and Performance. This Agreement secures the County's payment, as and when the same shall become due and payable, of all Required Payments and the County's timely compliance with all terms, covenants and conditions of this Agreement. 2.02. County's Limited Obligation. (a) THE PARTIES INTEND THAT THIS TRANSACTION COMPLY WITH SECTION 160A-20, NO PROVISION OF THIS AGREEMENT SHALL BE CONSTRUED OR INTERPRETED AS CREATING A PLEDGE OF THE COUNTY'S FAITH AND CREDIT WITHIN THE MEANING OF ANY CONSTITUTIONAL DEBT LIMITATION, NO PROVISION OF THIS AGREEMENT SHALL BE CONSTRUED OR INTERPRETED AS A DELEGATION OF GOVERNMENTAL POWERS OR AS AN IMPROPER DONATION OR A LENDING OF THE COUNTY'S CREDIT WITHIN THE MEANING OF THE STATE CONSTITUTION. NO DEFICIENCY JUDGMENT MAY BE RENDERED AGAINST THE COUNTY IN VIOLATION OF SECTION 160A-20, No provision of this Agreement shall be construed to pledge or to create a lien on any class or source of the County's moneys (other than the funds held under this Agreement), nor shall any provision of this Agreement restrict the future issuance of any of the County's bonds or obligations payable from any class or source of the County's moneys (except to the extent this Agreement restricts the incurrence of additional obligations secured by the Mortgaged Property), To the extent of any conflict between this Section and any other provision of this Agreement, this Section shall take priority, (b) Nothing in this Section is intended to impair or prohibit foreclosure on this Agreement if the Required Payments are not paid when due or otherwise upon the occurrence of an Event of Default under this Agreement, and in any such event Sellers may request the Deed of Trust Trustee to foreclose on the Mortgaged Property as provided in this Agreement, ARTICLE III COUNTY'S PAYMENT OBLIGATION AND RELATED MATTERS 3.01. Installment Payments. The County shall repay the Amount Financed by making Installment Payments to Sellers in lawful money of the United States at the times and in the amounts set forth in Exhibit C, except as otherwise provided in this Agreement. As indicated in Exhibit C, the Installment Payments reflect the repayment of 6 frnagreemttweeter a? the Amount Financed and include designated interest components, with interest at the annual rate of 5.00%. 3.02. Additional Payments. The County shall pay all Additional Payments on a timely basis directly to the person or entity to which such Additional Payments are owed in lawful money of the United States. 3.03. Prepayment. The County may prepay the outstanding principal component of the Amount Financed, at its option on any scheduled Payment Date, in whole or in part, by paying (a) all Additional Payments then due and payable, (b) all interest accrued and unpaid to the prepayment date, and (c) 100% of the outstanding principal amount. 3.05. Appropriations. (a)The Budget Officer shall include in the initial proposal for each of the County's annual budgets the amount of all Installment Payments and estimated Additional Payments coming due during the Fiscal Year to which such budget applies. Notwithstanding that the Budget Officer includes such an appropriation for Required Payments in a proposed budget, the Governing Board may determine not to include such an appropriation in the County's final budget for such Fiscal Year. (b) The actions required of the County and its officers pursuant to this Section shall be deemed to be and shall be construed to be in fulfillment of ministerial duties, and it shall be the duty of each and every County official to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the County to carry out and perform the actions required pursuant to this Section and the remainder of this Agreement to be carried out and performed by the County. 3.06. No Abatement. There shall be no abatement or reduction of the Required Payments for any reason, including, but not limited to, any defense, recoupment, setoff, counterclaim, or any claim (real or imaginary) arising out of or related to the Site or of the Facility, except as expressly provided in this Agreement. The County assumes and shall bear the entire risk of completion, loss and damage to the Site and the Facility from any cause whatsoever. The Installment Payments shall be made in all events unless the County's obligation to make Installment Payments is terminated as otherwise provided in this Agreement. ARTICLE IV COUNTY'S COVENANTS, REPRESENTATIONS AND WARRANTIES 4.02. Indemnification. To the extent permitted by law, the County shall indemnify, protect and save the Deed of Trust Trustee, Sellers and the LGC's members 7 finagreemttweeter a4 and employees, harmless from all liability, obligations, losses, claims, damages, actions, suits, proceedings, costs and expenses, including attorneys' fees, arising out of, connected with, or resulting directly or indirectly from the Mortgaged Property or the transactions contemplated by this Agreement, including without limitation the possession, condition, construction or use of the Facility, The indemnification arising under this Section shall survive the Agreement's termination. 4.03. Covenant as to Tax Exemption. The County shall not take or permit, or omit to take or cause to be taken, any action that would adversely affect the exclusion from gross income for federal income tax purposes of the designated interest component of Installment Payments to which such components would otherwise be entitled and, if it should take or permit, or omit to take or cause to be taken, any such action, the County shall take or cause to be taken all lawful actions within its power necessary to rescind or correct such actions or omissions promptly upon having knowledge thereof. 4.07. No Breach of Law or Contract. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, (a) to the best of the County's knowledge, constitutes a violation of any provision of law governing the County or (b) results in a breach of the terms, conditions or provisions of any contract, agreement or instrument or order, rule or regulation to which the County is a party or by which the County is bound. 4.08. No Litigation. There is no litigation or any governmental administrative proceeding to which the County (or any official thereof in an official capacity) is a party that is pending or, to the best of the County's knowledge after reasonable investigation, threatened with respect to (a) the County's organization or existence, (b) its authority to execute and deliver this Agreement or, to comply with the terms of this Agreement, (c) the validity or enforceability of this Agreement or the transactions contemplated hereby, (d) the title to office of any Governing Board member or any other County officer, (e) any authority or proceedings relating to the County's execution or delivery of this Agreement, or (f) the undertaking of the transactions contemplated by this Agreement. 4.09. No Current Default or Violation. (a) The County is not in violation of any existing law, rule or regulation applicable to it, (b) the County is not in default under any contract, other, agreement, order, judgment, decree or other instrument or restriction of any kind to which the County is a party or by which it is bound or to which any of its assets are subject, including this Agreement, and (c) no event or condition has happened or existed, or is happening or existing, under the provisions of any such instrument, including this Agreement, which constitutes or which, with notice or lapse of time, or both, would constitute an event of default hereunder or thereunder. 8 finagreemttweeter a5 4.16. Taxes and Other Governmental Charges. The County shall pay, as Additional Payments, the full amount of all taxes, assessments and other governmental charges lawfully made by any governmental body during the term of this Agreement. With respect to special assessments or other governmental charges which may be lawfully paid in installments over a period of years, the County shall be obligated to provide for Additional Payments only for such installments as are required to be paid during the Agreement term. The County shall not allow any liens for taxes, assessments or governmental charges with respect to the Mortgaged Property or any portion thereof to become delinquent (including, without limitation, any taxes levied upon the Mortgaged Property or any portion thereof which, if not paid, will become a charge on any interest in the Mortgaged Property, including Sellers' interest, or the rentals and revenues derived therefrom or hereunder). 4.17. Property Damage Insurance. The County will, at its own expense, acquire, carry and maintain broad-form extended coverage property damage insurance with respect to the Facility in an amount equal to such Facility's estimated replacement cost. Such property damage insurance must include the Sellers as loss payees. 4.13. Sellers' Advances for Performance of County's Obligations. If the County fails to perform any of its obligations under this Agreement, Sellers are hereby authorized, but not obligated, to perform such obligation or cause it to be performed. All expenditures incurred by Sellers (including any advancement of funds for payment of taxes, insurance premiums or other costs of maintaining the Mortgaged Property, and any associated legal or other expenses), together with interest thereon at the Prime Rate, shall be secured as Additional Payments under this Agreement. The County promises to pay all such amounts to Sellers immediately upon demand. ARTICLE V CARE AND USE OF MORTGAGED PROPERTY 5.03. Maintenance and Repairs; Additions. (a) The County shall keep the Mortgaged Property in good order and repair (reasonable wear and tear excepted) and in good operating condition, shall not commit or permit any waste or any other thing to occur whereby the value or usefulness of the Mortgaged Property might be impaired, and shall make from time to time all necessary or appropriate repairs, replacements and renewals. (b) The County may, also at its own expense, make from time to time any additions, modifications or improvements to the Mortgaged Property that it may deem desirable for its governmental or proprietary purposes and that do not materially impair 9 finagreemttweeter ago the effective use, nor materially decrease the value or substantially alter the intended use, of the Mortgaged Property. The County shall do, or cause to be done, all such things as may be required by law in order, fully to protect the security of and all Sellers' rights under this Agreement. (c) Any and all additions to or replacements of the Facility and all parts thereof shall constitute accessions to the Facility and shall be subject to all the terms and conditions of this Agreement and included in the "Facility" for the purposes of this Agreement. (d) Notwithstanding the provisions of subsection (c.) above, however, the County may, from time to time in its sole discretion and at its own expense, install machinery, equipment and other tangible property in or on the Facility. All such property shall remain the County's sole property in which Sellers shall have no interest; provided, however, that any such property which becomes permanently affixed to the Facility shall be subject to the lien and security interest arising under this Agreement if Sellers shall reasonably determine that the Facility would be damaged or impaired by the removal of such machinery, equipment or, other tangible property. 5.05. Utilities. The County shall pay all charges for utility services furnished to or used on or in connection with the Site and the Facility. 5.06. Risk of Loss. The County shall bear all risk of loss to and condemnation of the Site and the Facility. 5.08. Title. Title to the Site and the Facility and any and all additions, repairs, replacements or modifications thereto shall at all times be in the County, subject to the lien of this Agreement. Upon the County's payment in full of all Required Payments, Sellers, at the County's expense and request, shall cancel this Agreement. 5.10. Damage and Destruction. The County shall promptly notify Sellers if (a) the Mortgaged Property or any portion thereof is stolen or is destroyed or damaged by fire or other casualty, (b) a material defect in the construction of the Facility shall become apparent, or (c) title to or the use of all or any portion of the Mortgaged Property shall be lost by reason of a defect in title. Each notice shall describe generally the nature and extent of such damage, destruction or taking. ARTICLE VI THE DEED OF TRUST TRUSTEE 10 finagreemttweeter Al 6.01. Deed of Trust Trustee's Liability. The Deed of Trust Trustee shall suffer no liability by virtue of acceptance of this trust except such as may be incurred as a result of the Deed of Trust Trustee's failure to account for the proceeds of any sale under this Agreement. 6.02. Substitute Trustees. If the Deed of Trust Trustee, or any successor, shall die, become incapable of acting or renounce trust, or if for any reason Sellers desires to replace the Deed of Trust Trustee, then Sellers shall have the unqualified right to appoint one or more substitute or successor Deed of Trust Trustees by instruments filed for registration in the office of the Register of Deeds where this Agreement is recorded. Any such removal or appointment may be made at any time without notice, without specifying any reason therefore and without any court approval. Any such appointee shall become vested with title to the Mortgaged Property and with all rights, powers and duties conferred upon the Deed of Trust Trustee by this Agreement in the same manner and to the same effect as though such Deed of Trust Trustee were named as the original Deed of Trust Trustee. ARTICLE VII DEFAULTS AND REMEDIES; FORECLOSURE 7.01. Events of Default. An "Event of Default" is any of the following: (a) The County's failing to make any Installment Payment when due. (b) The occurrence of an Event of Nonappropriation. (c) The County's breaching or failing to perform or observe any term, condition or covenant of this Agreement on its part to be observed or performed, other than as provided in subsections (a) or (b) above, including payment of any Additional Payment, for a period of 15 days after written notice specifying such failure and requesting that it be remedied shall have been given to the County by Sellers, unless Sellers shall agree in writing to an extension of such time prior to its expiration. 7.02. Remedies on Default. Upon the continuation of any Event of Default, Sellers may, without any further demand or notice, exercise any one or more of the following remedies: (a) Declare the unpaid principal components of the Installment Payments immediately due and payable; 11 finagreemttweeter 41A (D (b) Proceed by appropriate court action to enforce the County's performance of the applicable covenants of this Agreement or to recover for the breach thereof, (c) Avail itself of all available remedies under this Agreement, including foreclosure as provided in Section 7.03, and recovery of attorneys' fees and other expenses. Notwithstanding any other provision of this Agreement, County, the Deed of Trust Trustee and Sellers intend to comply with Section 160A-20, No deficiency judgment may be entered against the County in violation of Section 160A-20. 7.03. Foreclosure; Sale under Power of Sale. (aa) Right to foreclosure or sale. Upon the occurrence and continuation of an Event of Default, at Sellers' request, the Deed of Trust Trustee shall foreclose Mortgaged Property by judicial proceedings or, at Sellers' option, the Deed of Trust Trustee shall sell (and is hereby empowered to sell) all or any part of the Mortgaged Property (and if in part, any such sale shall in no way adversely affect the lien created hereby against the remainder) at public sale to the last and highest bidder for cash (free of any equity of redemption, homestead, dower, curtesy or other exemption, all of which the County expressly waives to the extent permitted by law) after compliance with applicable State laws relating to foreclosure sales under power of sale, The Deed of Trust Trustee shall, at Sellers' request, execute a proper deed or deeds to the successful purchaser at such sale. (b) Seller's bid. Sellers may bid and become the purchaser at any sale under this Agreement, and in lieu of paying cash therefore may make settlement for the purchase price by crediting against the Required Payments the proceeds of sale net of sale expenses, including the Deed of Trust Trustee's commission, and after payment of such taxes and assessments as may be a lien on the Mortgaged Property superior to the lien of this Agreement (unless the Mortgaged Property is sold subject to such liens and assessments, as provided by State law). (c) County's bid. The County may bid for all or any part of the Mortgaged Property at any foreclosure sale; provided, however, that the price bid by the County may not be less than an amount sufficient to provide for full payment of the Required Payments. (d) Successful bidder's deposit. At any such sale the Deed of Trust Trustee may, at its option, require any successful bidder (other than Sellers) immediately to deposit with the Deed of Trust Trustee cash or a certified check in an amount equal to all or any part of the successful bid, and notice of any such requirement need not be included in the advertisement of the notice of such sale, 12 finagreemttweeter aq (e) Application of sale proceeds. The proceeds of any foreclosure sale shall be applied in the manner, and in the order prescribed by State law, it being agreed that the expenses of any such sale shall include a commission to the Deed of Trust Trustee of five percent of the gross sales price for making such sale and for all services performed under this Agreement. Any proceeds of any such sale remaining after the payment of all Required Payments and the prior application thereof in accordance with State law shall be paid to the County. 7.05 Possession of Mortgaged Property. After a foreclosure sale, the County shall immediately lose the right to possess, use and enjoy the Mortgaged Property (but may remain in possession of the Mortgaged Property as a tenant at will of Sellers), and thereupon the County (a) shall pay monthly in advance to Sellers a fair and reasonable rental value for the use and occupation of the Mortgaged Property (in an amount Sellers shall determine in its reasonable ,judgment), and (b) upon Sellers' demand, shall deliver possession of the Mortgaged Property to Sellers or, at Sellers' direction, to the purchaser of the Mortgaged Property at any,judicial or foreclosure sale under this Agreement. 7.06. No Remedy Exclusive; Delay Not Waiver. All remedies under this Agreement are cumulative and may be exercised concurrently or separately. The exercise of any one remedy shall not be deemed an election of such remedy or preclude the exercise of any other remedy. If any Event of Default shall occur and thereafter be waived by the other parties, such waiver shall be limited to the particular breach so waived and shall not be deemed a waiver of any other breach under this Agreement. ARTICLE VIII MISCELLANEOUS 8.01. Notices. (a) Any communication required or permitted by this Agreement must be in writing. (b) Any communication under this Agreement shall be sufficiently given and deemed given when delivered by hand or five days after being mailed by first-class mail, postage prepaid, addressed as follows: (i) if to the County, to the attention o£ County Manager, Re: Notice under 2006 Financing Agreement for Meadowlands Building Acquisition, Post Office Box 8181, Hillsborough, NC 27278; (ii) if to the Deed of Trust Trustee, to ; or if to Sellers, to 13 finagreemttweeter 3n (c) Any communication to the Deed of Trust Trustee shall also be sent to Sellers. (d) Any addressee may designate additional or different addresses for communications by notice given under this Section to each of the others. 8.02. No Assignments by County. The County shall not sell or assign any interest in this Agreement. 8.03. Assignments by Sellers. Sellers may, at any time and from time to time, assign all or any part of their interest in this Agreement, including, without limitation, Sellers' rights to receive Required Payments. Any assignment made by Sellers or any subsequent assignee shall not purport to convey any greater interest or rights than those held by Sellers pursuant to this Agreement. The Sellers, however, represent and warrant that they are entering into this Agreement for their own account, with no present intention to sell or assign any portion of their interests in this Agreement. Any assignment by Sellers may be only to a bank, insurance company, or similar financial institution or any other entity approved by the LGC. Notwithstanding the foregoing, no assignment or reassignment of Sellers' interest in the Mortgaged Property or this Agreement shall be effective unless and until the County shall receive a duplicate original counterpart of the document by which such assignment or reassignment is made disclosing the name and address of each such assignee. 8.04. Amendments. No term or provision of this Agreement may be amended, modified or waived without the prior written consent of the County and Sellers. 8.05. No Marshalling. The County hereby waives any and all rights to require marshalling of assets in connection with the exercise of any remedies provided in this Agreement or as permitted by law. 8.06. Governing Law. The County, Sellers and the Deed of Trust Trustee intend that State law shall govern this Agreement. 8.07. Liability of Officers and Agents. No officer, agent or employee of the County shall be subject to any personal liability or accountability by reason of the execution of this Agreement or any other documents related to the transactions contemplated hereby. Such officers or agents shall be deemed to execute such documents in their, official capacities only, and not in their individual capacities. This Section shall 14 finagreemttweeter 31 not relieve an officer, agent or employee of the County from the performance of any official duty provided by law. 8.08. Covenants Running with the Land. All covenants contained in this Agreement shall run with the real estate encumbered by this Agreement. 8.09. Severability. If any provision of this Agreement shall be determined to be unenforceable, that shall not affect any other provision of this Agreement. 8.10. Non-Business Days. If the date for making any payment or the last day for performance of any act or the exercising of any right shall not be a Business Day, such payment shall be made or act performed or right exercised on or before the next preceding Business Day. 8.11. Entire Agreement. This Agreement constitutes the County's entire agreement with respect to the general subject matter covered hereby. 8.12. Binding Effect. Subject to the specific provisions of this Agreement, and in particular Section 9.03, this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties and their respective successors and assigns. [The remainder of this page has been left blank intentionally.] 15 finagreemttweeter 3A IN WITNESS WHEREOF, the County has caused this instrument to be executed as of the day and year first above written by duly authorized officers. (SEAL) ATTEST: ORANGE COUNTY, NORTH CAROLINA Donna S. Baker Barry Jacobs Clerk, Board of County Commissioners Chair, Board of County Commissioners STATE OF NORTH CAROLINA; ORANGE COUNTY I, a Notary Public of such County and State, certify that Barry Jacobs and Donna S. Baker personally came before me this day and acknowledged that they are the Chair and the Clerk, respectively, of the Board of Commissioners of Orange County, North Carolina, and that by authority duly given and as the act of the Orange County, North Carolina, the foregoing instrument was signed in the County's name by such Chair, sealed with its corporate seal and attested by such Clerk. WITNESS my hand and official stamp or seal, this _ day of February, 2006. [SEAL] My commission expires: Notary Public This contract has been approved under, the provisions of Article 8, Chapter 159 of the General Statutes of North Carolina. Timothy L. Romocki Acting Secretary, North Carolina Local Government Commission By [Timothy L. Romcki or Designated Assistant] (Financing Agreement and Deed of Trust firom Orange County, North Carolina, for the benefit of ] 16 finagreemttweeter 33 EXHIBIT A -- SITE DESCRIPTION EXHIBIT B -- EXISTING ENCUMBRANCES EXHIBIT C -- PAYMENT SCHEDULE The County will make payments to repay the Amount Financed over an amortization period of approximately ten (10) years. Payments are [annual] in arrears in variable amounts with a fixed principal component of $168,500. A portion of each payment is paid as and represents payment of interest at an annual interest rate of 5.00%. Payments are due beginning on and [annually] thereafter, with a final payment of all outstanding principal and accrued and unpaid interest due on all as set forth in the attached amortization schedule. 17 finagieemttweeter