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Home My WebLink AboutOTHER-2021-024 Lease Modification Attachment 6 S*H draft of April 21 Prepared by and return after recording to: Robert M. Jessup Jr. Sam Smotherman Sanford Holshouser LLP 209 Lloyd St., Suite 350 Carrboro,NC 27510 STATE OF ) NORTH CAROLINA ) LEASE MODIFICATION ORANGE COUNTY ) Orange County PIN 9777-99-9032 THIS LEASE MODIFICATION is dated as of June 1, 2021, and is entered into by and between ORANGE COUNTY, NORTH CAROLINA, as lessor (the "County"), and THE BOARD OF EDUCATION FOR THE CHAPEL HILL — CARRBORO CITY SCHOOLS, as lessee (the "School Board"). This Modification modifies and amends the Lease dated as of January 1, 2014, and recorded at Book RIB 5743, Page 518, Orange County Registry(the "Original Lease"). The County is the record owner of the property subject to the Original Lease and this Modification, and that property is more particularly described in Exhibit A. WITNESSETH: The County and the School Board have previously agreed to cooperate in a plan to finance, construct and equip improvements to Culbreth Middle School ("Culbreth"). The County has asked the School Board to modify the Original Lease to extend its term, to facilitate a refinancing transaction contemplated by the County. In connection with its refinancing, the County is entering into a Trust Agreement dated as of June 1, 2021 (the "2021 Trust Agreement"). The County is similarly entering into a Deed of Trust and Security Agreement, also dated as of June 1, 2021 (the "Deed of Trust"), to secure the County's repayment obligations under the 2021 Trust Agreement. The School Board has agreed to subordinate its leasehold interest to the 2021 Deed of Trust. NOW THEREFORE, for and in consideration of the mutual promises contained in this Lease, the parties agree as follows: 1. Definition. The term "Modified Lease" means the Original Lease as modified by this Modification. All other capitalized terms used in this Modification and not otherwise defined have the meanings ascribed in the Original Lease. 2. Change to Lease Term. Section 4.2(c) of the Original Lease is hereby amended to read as follows, in order to extend the expected Lease Term. The expected end of the lease term under the Original Lease was 30 days after February 1, 2029. 4.2. Termination. The Lease Term terminates upon the earliest of the following: (a) Judicial sale of or foreclosure on the Leased Property under the 2021 Deed of Trust; (b) The occurrence of an Event of Default under the 2021 Trust Agreement or the Modified Lease and subsequent termination by the County pursuant to Section 11.1 of the Original Lease; or (c) The date that is 30 days after December 1, 2041, which is the scheduled date for the County's final payment on the 2021 Trust Agreement, except that the Lease Term ends immediately upon the termination of the 2021 Trust Agreement if the 2021 Trust Agreement is terminated following an event of default by the County under the 2021 Trust Agreement. Termination of the Lease Term terminates all the County's obligations under the Modified Lease, and terminates the School Board's rights of possession under the Modified Lease; but all other provisions of this Lease, including the receipt and disbursement of funds, shall continue until the Trust Agreement is discharged as provided therein. 3. Priority of 2021 Deed of Trust. Notwithstanding anything in the Modified Lease to the contrary, the School Board's rights to possession of the Leased Property and all its other rights under the Modified Lease are subordinate to the rights of the beneficiary under the 2021 Deed of Trust. Any judicial sale of, or foreclosure on, the Leased Property pursuant to the 2021 Deed of Trust terminates all the School Board's rights under the Modified Lease. 2 4. School Board's Assumption of Obligations; County's Transfer of Rights. Sections 7.1 and 7.2 of the Original Lease are hereby amended to read as follows. The purpose of these amendments is to conform the cross references to the proper references in the 2021 Trust Agreement. 7.1 Assumption of Obligations. (a) The School Board assumes the County's obligations under Trust Agreement Sections 5.04 (care and use), 5.05 (utilities), 5.08 (compliance with requirements), 5.09 (regarding use and operation), 5.11 (property damage insurance), 5.14 (payment of taxes and other governmental charges & prevention of liens), 5.16 (regarding notice of damage, repair or replacement from Net Proceeds), and 6.02 (compliance with environmental laws). The parties agree that the School Board may fulfill its requirements to maintain insurance through pooled risk and similar programs sponsored by or affiliated with the North Carolina School Boards Association, such as the North Carolina School Boards Association Insurance Trust. (b) Notwithstanding the foregoing, the County retains its rights under Article V of the Trust Agreement to direct the use of Net Proceeds. All payments of Net Proceeds are to be made to the County. 7.2. Transfer of Rights. In order to allow the School Board to carry out its obligations under Section 7.1, the County transfers its rights under Section 5.10 of the Trust Agreement (regarding maintenance, repairs and modifications of and to the Leased Property). Nothing in this Section, however, may be construed as in any way assigning or delegating to the School Board any of the County's rights or responsibilities to make decisions regarding the School Board's capital and operating budgets. 5. Confirmation of Remaining Lease Terms. Except as provided by this Agreement, the parties ratify, approve and confirm the terms of the Original Lease. [The remainder of this page has been left intentionally blank.] 3 IN WITNESS WHEREOF, the parties hereto have caused this Lease Modification to be executed in their corporate names by their duly authorized officers, all as of the date first above written. [SEAL] ORANGE COUNTY, ATTEST: NORTH CAROLINA By: Laura Jensen Bonnie B. Hammersley Clerk, Board of Commissioners County Manager [SEAL] THE BOARD OF EDUCATION FOR ATTEST: THE CHAPEL HILL — CARRBORO CITY SCHOOLS By: Dr. Nyah Hamlett Jillian La Serna Secretary Chair [Lease Modification dated as of June 1, 2021] 4 STATE OF NORTH CAROLINA; ORANGE COUNTY I, , a Notary Public of said State and County, do hereby certify that Bonnie B. Hammersley and Laura Jensen personally came before me this day and acknowledged that they are the County Manager and the Clerk to the Board of Commissioners, respectively, of Orange County, North Carolina, and that by authority duly given and as the act of such County, the foregoing instrument was signed in the County's name by such Manager, sealed with its corporate seal and attested by such Clerk. Witness my hand and official seal this day of June, 2021. Notary Public My commission expires: STATE OF NORTH CAROLINA; ORANGE COUNTY I, , a Notary Public of said State and County, do hereby certify that Jillian La Serna and Dr. Nyah Hamlett personally came before me this day and acknowledged that they are the Chair and the Secretary, respectively, of The Board of Education for the Chapel Hill — Carrboro City Schools, and that by authority duly given and as the act of such Board, the foregoing instrument was signed in the Board's name by such Chair, sealed with its corporate seal and attested by such Secretary. Witness my hand and official seal this day of June, 2021. Notary Public My commission expires: s EXHIBIT A — Site Description Tract 1 All that certain tract or parcel of land located in Chapel Hill, Orange County, North Carolina, which parcel of land is identified in the Orange County land records as PIN #9777-99-9032, and is more particularly described as being all of tract 1, containing 13.336 acres, more or less, and being the tract designated as "Bennett Heirs" on the plat recorded in plat book 214, page 741, of the Orange County Registry, to which plat reference is hereby made for a more particular description of the same. Tract 2• All that certain tract or parcel of land located in Chapel Hill, Orange County, North Carolina, which parcel of land is identified in the Orange County land records as PIN #9777-99-9032, and is more particularly described as being all of tract 2, containing 0.033 acres, more or less, a small triangular shaped parcel of land, and being the tract designated as "(H,D. Bennett Land)" on the plat recorded in plat book 214, page 743, of the Orange County Registry, to which plat reference is hereby made for a more particular description of the same. Tract 3 All that certain tract or parcel of land located in Chapel Hill, Orange County, North Carolina, which parcel of land is identified in the Orange County land records as PIN #9777-99-9032, and is more particularly described as being all of tract 3, containing 13.024 acres, more or less, and being the tract designated as "E.G. Merritt and Mrs. Alfred Brandon" on the plat recorded in plat book 215, page 128, of the Orange County Registry, to which plat reference is hereby made for a more particular description of the same. Tract 4• All that certain tract or parcel of land located in Chapel Hill, Orange County, North Carolina, which parcel of land is identified in the Orange County land records as PIN #9777-99-9032, and is more particularly described as being all of tract 4, containing 8.970 acres, more or less, and being the tract designated as "Cleveland Atwater" on the plat recorded in plat book 215, page 180, of the Orange County Registry, to which plat reference is hereby made for a more particular description of the same. 6