SOUTHAMPTON COUNTY, VIRGINIA AGENDA. Industrial Development Authority. Called Meeting May 9, :00 p.m. Southampton County Office Center

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1 Industrial Development Authority SOUTHAMPTON COUNTY, VIRGINIA Called Meeting May 9, :00 p.m. Southampton County Office Center BOARD MEMBERS A. Meredith Felts, Jr., Chairman, A. Ashburn Cutchin, III, Vice-Chairman, Jerusalem Ernest C. Claud, Jr., Capron Eppa J. Gray, Jr., Franklin William F. Grizzard, Jr., Newsoms Ben S. Lee, Drewryville Leon W. Bolton, Boykins- Branchville AGENDA Call to Order... Vice Chairman Cutchin 1. Approval of Minutes... February 25, Consideration of a Real Estate Option Agreement 3. Adjourn Attachment: Option Agreement and Site Plan

2 INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF SOUTHAMPTON, VIRGINIA Called Meeting May 9, APPROVAL OF MINUTES Attached for your consideration, please find a copy of the latest meeting minutes for the Industrial Development Authority held on February 25, MOTION REQUIRED: A motion is required to approve the attached minutes.

3 At a meeting of the Industrial Development Authority of the County of Southampton, Virginia on Thursday, February 25, 2016 at 4:30 p.m. in the Board of Supervisors Room located at Administration Center Drive, Courtland, Virginia. DIRECTORS PRESENT: OTHERS PRESENT: A. Meredith Felts, Jr., Chairman A. Ashburn Cutchin, III, Vice Chairman E. Beale Carter, Jr. Ernest C. Claud, Jr. Eppa J. Gray, Jr. Ben S. Lee Leon W. Bolton Michael W. Johnson, Secretary Richard E. Railey, Jr., General Counsel Lynette Lowe, Deputy County Administrator/CFO Doug Gebhardt, Davenport Public Finance Mr. Michael Johnson, Secretary, called the meeting to order and reminded the Board that they typically elected officers at their first meeting each calendar year. He then opened the floor for nominations. On motion of Director Gray, seconded by Director Carter, A. Meredith Felts, Jr. was unanimously re-elected Chairman. Chairman Felts then opened the floor for nominations for Vice-Chairman and Secretary, respectively. On motion of Director Claud, seconded by Director Lee, A. Ashburn Cutchin, III was unanimously re-elected Vice Chairman. On motion of Director Gray, seconded by Director Cutchin, Mr. Michael W. Johnson was unanimously re-elected Secretary. Chairman Felts then called upon Mr. Doug Gebhardt, the County s Financial Advisor with Davenport & Company Public Finance to provide an overview of a refunding proposal for the Authority s 2006A bonds. Mr. Gebhardt explained that the 2006A bonds were originally issued for $21.3 million dollars back in 2006 to fund two capital projects: a) development of the Turner Tract Industrial Park and b) construction of Riverdale Elementary School. The current amount outstanding on the bonds is slightly less than $15.9 million and the interest rates range from 4% to 5%. The bonds have a final maturity date of April 1, 2028, with a call date of April 1, Mr. Gebhardt went on to explain that tax exempt interest rates were near all-time lows, but based on volatility, it was unclear how long rates would remain at their current levels. At the request of the Board of Supervisors, Davenport & Company had recently issued a Request for Proposals (RFP) and distributed it to local, regional and national banking institutions to see what opportunities there might be to reduce the county s annual debt service by refunding the 2006A bonds. In response to the RFP, four (4) proposals were received. Mr. Gebhardt shared a brief summary of all four proposals and noted that the most meritorious proposal was received from Regions Bank, locking in a 2.19% rate for 12 years. The new bond was prepayable anytime with a 1% penalty. Based upon the terms offered by Regions Bank, the County may achieve gross savings of $2,357,479 over the next 12 years. This equates to a 13.01% savings on a net present value basis, well above the 3% rate typically used to identify reasonable refunding opportunities. In its simplest terms, the county s annual debt service (principal + interest) will be approximately $196,000 less each year for the next 12 years if Region s proposal is accepted. Mr. Johnson then advised the Authority that the Southampton County School Board and the Southampton County Board of Supervisors had both already adopted resolutions requesting the Authority to issue the refunding bonds and execute such documents as may be necessary to consummate the transaction including the First Amendment to the Financing Lease, the First Amendment to the Lease and the First Amendment to the Deed of Trust, copies of which were provided to each Director.

4 Mr. Johnson then provided a resolution which had been prepared by the County s bond counsel, McGuire Woods, for the Board s consideration. Following a brief discussion, Director Gray moved to approve the following resolution: RESOLUTION OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF SOUTHAMPTON COUNTY, VIRGINIA AUTHORIZING THE ISSUANCE OF ITS REVENUE REFUNDING BOND WHEREAS, the Industrial Development Authority of Southampton County, Virginia (the "Authority"), pursuant to the Industrial Development and Revenue Bond Act (the "Act") under which it is created, is authorized to exercise all the powers set forth in the Act, which include, among other things, the power to make loans to, among others, a county in furtherance of the Act, to finance or refinance and lease facilities for use by, among others, a county, to issue its revenue refunding bonds, notes and other obligations from time to time for such purposes and to pledge all or any part of its revenues and receipts derived from payments received by the Authority in connection with its loans or from the leasing by the Authority of such facilities or from any source, as security for the payment of principal of and interest on any such obligations; and WHEREAS, the Authority has determined that it is advisable to refund the outstanding principal amount of the Authority s $21,300,000 Public Facility Lease Revenue Bond (Southampton County, Virginia Public Facilities Project), Series 2006A (the "2006A Bonds"); and WHEREAS, the Authority issued the 2006A Bonds on November 15, 2006 to provide funds for financing the costs of the construction, improvement and equipping of the new Riverdale Elementary School (the "Elementary School Project"), which is owned by the School Board of Southampton County (the "School Board"), and the financing of certain public infrastructure improvements and road improvements at the Turner Tract Industrial Park; and WHEREAS, the Authority proposes to undertake the refunding of the outstanding principal amount of the 2006A Bonds through the issuance by the Authority of its revenue refunding bond (the "Bond") and the sale of the Bond to evidence a loan from Regions Capital Advantage, Inc. (the "Lender"), which was approved by the County Board of Supervisors of the County (the "County Board") at its meeting on February 22, 2016; and WHEREAS, the Bond will be payable from rental payments and other payments provided to the Authority pursuant to an amendment to the Financing Lease (the "First Amendment to the Financing Lease") among the Authority, as lessor, and the School Board and the County, collectively as co-lessees; and WHEREAS, the payment obligations under the First Amendment to the Financing Lease are subject to appropriation by the County Board from time to time of sufficient moneys for such purposes; and WHEREAS, the School Board will lease the Elementary School Project to the Authority pursuant to an amendment to the Lease (the "First Amendment to the Lease") and the Authority will secure the Bond with a leasehold mortgage and lease the Elementary School Project back to the School Board pursuant to the First Amendment to the Financing Lease; and WHEREAS, the amendments to the documents associated with the 2006A Bonds includes the following: (i) First Amendment to the Financing Lease; (ii) First Amendment to the Lease; (iii) First Amendment to the Leasehold Deed of Trust from the Authority to the individual trustees named therein, as trustees; (iv) First Amendment to the Assignment of Rents and Leases, and (v) First Supplemental Indenture of Trust, as applicable; and WHEREAS, all the documents listed above are referred to in this Resolution as the "Basic Documents"; NOW, THEREFORE, BE IT RESOLVED BY THE INDUSTRIAL DEVELOPMENT AUTHORITY OF SOUTHAMPTON COUNTY, VIRGINIA:

5 1. Findings. It is hereby found and determined that the Authority s issuance of the Bond and the entering into the Basic Documents to refund the 2006A Bonds for the purposes of reducing the payments payable by the County pursuant to the original Financing Lease dated as of November 1, 2006, as amended by the First Amendment to the Financing Lease, will serve a function which is necessary and essential to the proper, efficient and economic operation of the County and thereby will protect and promote the safety, health, welfare, convenience and prosperity of the inhabitants of the County. 2. Issuance of Bond. The issuance of the Bond is hereby authorized for the purposes of refunding the outstanding principal amount of the 2006A Bonds and financing the costs of issuing the Bond. The Bond shall be dated the date of its issuance and delivery and shall, except as otherwise agreed to by the Lender and the Authority, be issued and sold to the Lender on the terms and conditions set forth in the term sheet from the Lender dated February 16, 2016 (the "Term Sheet"), which Term Sheet is approved, and may contain such additional terms as may be approved by the Chairman of the Board of Directors of the Authority (the "Chairman"), with such approval to be evidenced by the execution and delivery of the First Amendment to the Financing Lease. 3. Authorization of Basic Documents. The Bond and the Basic Documents are approved with such changes, insertions or omissions as may be approved by the Chairman, whose approval shall be evidenced conclusively by the execution and delivery of the Basic Documents to which the Authority is a party. Forms of the First Amendment to the Financing Lease, the First Amendment to the Lease and the First Amendment to the Deed of Trust are on file with the Authority. The execution and delivery of and performance by the Authority of its obligations under the Bond and the Basic Documents to which it is a party are authorized. 4. Execution of the Basic Documents. The Chairman is authorized to execute on behalf of the Authority the Basic Documents to which the Authority is a party. Such officers or their designees are authorized to execute and deliver on behalf of the Authority such instruments, reimbursement agreements, documents or certificates, and to do and perform such things and acts and to take such further action, as they shall deem necessary or appropriate to carry out the transactions authorized by this Resolution or contemplated by the Basic Documents; and all of the foregoing, previously done or performed by such officers or agents of the Authority, are in all respects approved, ratified and confirmed. 5. Costs and Expenses. All costs and expenses in connection with the undertaking of the refinancing of the 2006A Bonds and the issuance of the Bond, including the Authority s fees and expenses and the fees and expenses of bond counsel and counsel for the Authority and the School Board, shall be paid from the proceeds of the Bond, or other legally available funds of the County. If for any reason the Bond is not issued, it is understood that all such expenses shall be paid by the County from its legally available funds and that the Authority shall have no responsibility therefor. 6. Nature of Obligations. The Authority shall not be obligated to make any payments under the Bond or the Basic Documents except from payments made by or on behalf of the County under the First Amendment to the Financing Lease and the County s obligation to make payments pursuant to the Basic Documents is subject to annual appropriation by the County Board. The County Administrator will submit for each fiscal year a request to the County Board for an appropriation to the Authority for an amount equal to the rental payments coming due under the First Amendment to the Financing Lease for the next fiscal year. The County's obligations to make payments to the Authority shall be subject to and dependent upon annual appropriations being made from time to time by the County Board for such purpose. If at any time during any fiscal year of the County throughout the term of the First Amendment to the Financing Lease, the amount appropriated in the County's annual budget in any such fiscal year is insufficient to pay when due the payments required under the Basic Documents, the County Administrator, or such other officer who may be charged with the responsibility for preparing the County's annual budget, to submit to the County Board at the next scheduled meeting, or as promptly as practicable but in any event within 45 days, a request for a supplemental appropriation sufficient to cover the deficit. Nothing in this Resolution, the Bond or the Basic Documents shall constitute a pledge of the full faith and credit of the County beyond the constitutionally permitted annual appropriations.

6 7. Tax Certificate. The Chairman is hereby authorized and directed to execute and deliver on behalf of the Authority a tax compliance certificate or agreement or other similar document (the "Tax Compliance Agreement"). The Tax Compliance Agreement shall contain such covenants as may be necessary regarding applicable regulations relating to the exclusion from gross income of interest on the Bond in accordance with the requirements of the Internal Revenue Code of 1986, as amended (the "Tax Code"), and the applicable regulations. The Authority covenants that it shall comply with the provisions of the Tax Compliance Agreement and the Tax Code so that the interest on the Bond is excludable from gross income under the Tax Code. 8. Further Actions. The Chairman is hereby authorized and directed to take further action as each deems necessary or appropriate regarding the issuance of the Bond and the refunding of the 2006A Bonds. All actions taken by officers and agent of the Authority in connection with the issuance of the Bond is hereby ratified and confirmed. The officers and agents of the Authority are hereby authorized and directed to take such further actions as each deems necessary regarding the issuance of the Bond and all actions taken by such officers and agent in connection with the issuance of the Bond is hereby ratified and confirmed. 9. Exercise of Discretion and Authorizations. Any authorization of an officer of the Authority under this Resolution entitles such officer to exercise his or her discretion in taking action on behalf of the Authority, unless expressly provided otherwise. The authorizations granted in this Resolution to the Chairman may be carried out by the Vice Chairman, in the absence or unavailability of the Chairman. The authorizations granted in this Resolution to the Secretary may be carried out by any Interim, Acting or Assistant Secretary, in the absence or unavailability of the Secretary. When one or more officer is authorized to take an action hereunder, it shall be sufficient for one such officer to act on behalf of the Authority. If any officer authorized under this Resolution designates another officer of the Authority to act on such primary officer's benefit, such designee shall have the power and authority granted by this Resolution to the primary officer. 10. Effective Date. This Resolution shall take effect immediately. The motion was seconded by Director Cutchin and approved unanimously. Director Cutchin inquired about the possibility of industry tours for projects that the IDA had been recently involved with, primarily, Enviva Pellets and Hampton Farms Peanut Butter Plant. Mr. Johnson indicated that he d seek to arrange that in the next month or so. There was also brief discussion about what role the IDA might play in any future financing for Courthouse improvements or a new Courthouse. Mr. Johnson indicated that it was a little early to speculate how that project might be financed, but the IDA could very well be called upon to assist. There being no further business, the meeting was adjourned at 4:55 p.m. A. Meredith Felts, Jr., Chairman Michael W. Johnson, Secretary

7 INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF SOUTHAMPTON, VIRGINIA Called Meeting May 9, CONSIDERATION OF REAL ESTATE OPTION AGREEMENT PRTI, based in Franklinton, NC, was founded in 2013 to take a new, technology-focused approach to the global problem of waste tires. They partner with nationally-recognized tire manufacturers to provide paid tire disposal services and generate additional revenue by selling the industrial commodities produced as part of their demanufacturing process. Whole tires are loaded into their processing chamber and broken down into useful commodities through an electronically managed process. The resulting products (oil, syngas, carbon and steel) are sold as commodities or converted into power. In the first few months of operation, PRTI s Franklinton plant processed more than 15,000,000 pounds of waste rubber. During the next five years, they are seeking to expand across the USA and beyond. The Southampton County project will be their second in the U.S. In July 2017, the Board of Supervisors approved a conditional use permit allowing construction and operation of a rubber depolymerization facility, (a/k/a demanufacturing of tires), at the Turner Tract Industrial Park pursuant to Section (42) of the Southampton County Code. PRTI is now interested in moving forward with an option on the real estate. This option has been reviewed by the Board of Supervisors and their general counsel and they have stated no objections. A copy of the option agreement and a sketch illustrating the approximate site boundaries is attached. The purchaser (PRTI) proposes to pay $10,000 for the option for a period of 90 days. If they decide not to close on the property the option purchase price is nonrefundable. If they decide to move forward, the sale price is $10,000 per acre for acres of property. MOTION REQUIRED: A motion is required to authorize the Vice Chairman to execute the attached option agreement.

8 OPTION AGREEMENT FOR THE PURCHASE OF REAL ESTATE THIS OPTION AGREEMENT FOR THE PURCHASE OF REAL PROPERTY (hereinafter Agreement ) is entered on this 9th day of May, 2018, by and between THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF SOUTHAMPTON, VIRGINIA, located at Administration Center Drive, Courtland, Virginia (hereinafter referred to as "Owner"), and PRTI VA-One, LLC, with an office located at 2105 US 1 Highway, Franklinton, North Carolina (hereinafter referred to as "Purchaser"). W I T N E S S E T H WHEREAS, Owner is owner of a (+/- 1) acre parcel of real property, Southampton County Tax Map Parcel located at the intersection of Rose Valley Road and Enviva Way in Southampton County, State of Virginia, more particularly described on attached Exhibit A (hereinafter referred to as the "Property"); WHEREAS, Owner is holding said Property as investment property; WHEREAS, Purchaser desires to obtain an option to purchase the Property within a certain period of time (hereinafter Option ), in order to protect Purchaser s potential investment of time and money; WHEREAS, Owner is willing to give Purchaser said Option in return for the financial consideration as set forth in this Agreement (the Option Price will be paid toward the purchase price at closing); WHEREAS, the parties desire to reduce their agreement to writing. NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties stipulate and agree as follows: Page 1 of 5

9 AGREEMENT 1. Property. Owner represents and warrants that it is the beneficial and rightful owner of the Property, with good and marketable title free and clear of all security interests, mortgages, liens, pledges, charges, claims, or encumbrances of any kind or character. 2. Granting and Exercising of Option. Owner grants Purchaser an irrevocable Option to Purchase the Property on the terms and conditions set forth in this Agreement. Purchaser may exercise this Option unilaterally at any time during the term it is offered. Purchaser shall exercise this Option by delivering written notice to Owner s address, as set forth above, with standard U.S. postmarked mail service its desire to exercise this Option to Purchase. Within three (3) business days of exercising this Option, the Purchaser will deliver to the Owner, for review and approval, a Purchase and Sale Agreement for the Property. 3. Option Price. The Purchaser shall pay TEN THOUSAND DOLLARS ($10,000.00) (hereinafter Option Price ) for the Option to purchase the Property. This Option Price shall be non-refundable and payable upon the execution of this Agreement. In the event the Option is exercised, the Option price will be applied towards the purchase price at Closing. 4. Option Term. The term of this Agreement, and the term during which Owner grants this Option to Purchaser, is for the period of NINETY (90) days from the date of execution of this Agreement. 5. Purchase Price. If Purchaser exercises this Option, the price Purchaser shall pay for the Property shall be TEN THOUSAND DOLLARS ($10,000.00) per acre (hereinafter referred to as "Purchase Price ). 6. Liens against Property. Owner and Purchaser hereby agree that there shall be no liens placed upon the Property, by either Owner or Purchaser, during the term of this Agreement and the Property Page 2 of 5

10 transferred to Purchaser upon the exercise of this Option shall be delivered free of all liens and/or encumbrances of any kind. Additionally, Purchaser shall indemnify and hold harmless the Owner against and from any and all liens, mechanics or otherwise that may be place upon this Property related either directly or indirectly to Purchaser s actions, or its agents or assigns. 7. Access. Purchaser shall have the right to enter the Property to conduct studies at its own risk and shall be responsible for the acts and omission of and injuries to its agents, employees, representatives and consultants. Purchaser agrees to indemnify, defend and hold harmless Owner from all claims and liabilities asserted against Owner and all costs incurred by Owner, as a result of any such entry by Purchaser, its agents, employees or representatives, which indemnity shall survive the termination of this Agreement. If any study disturbs the Property and the Purchaser does not elect to exercise the Option, for any reason, Purchaser shall restore the Property to the same condition as existed prior to any such study. 8. Option Assignable. Purchaser may assign this Option on or before the Closing to the Parent Company, PRTI, Inc. (Parent Company) or a subsidiary or joint venture in which either the Parent Company or the Purchaser is the majority shareholder. If the Purchaser elects to make an assignment, Purchaser will provide Owner its intent to do so in writing prior to any assignment. 9. Miscellaneous a. Entire Agreement. This Agreement embodies the entire agreement between the parties and cannot be varied except by the written agreement of the parties. b. Survival. All promises, representations and warranties intended to extend beyond the closing date shall survive the Closing. c. Notices. Any notice required or permitted to be delivered hereunder shall be deemed to be delivered (a) when delivered, if personally delivered or by an overnight or other courier service, or (b) whether or not actually received, when deposited in the United States mail, postage prepaid, certified mail, return receipt requested, addressed to Owner or Purchaser, as the case may be, addressed as follows: Page 3 of 5

11 OWNER: INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF SOUTHAMPTON, VIRGINIA Administration Center Drive Courtland, Virginia PURCHASER: PRTI VA-One, LLC US 1 Highway Franklinton, NC Such addresses may be changed from time to time by either party by providing written notice in the manner set forth above. A. Successors and Assigns. All of the terms and conditions of this Agreement are hereby made binding on the successors and permitted assigns of both parties hereto. B. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, and venue for any disputes shall be in Southampton County. C. Attorneys' Fees. In the event that a legal action is brought to enforce the terms of this Agreement, the prevailing party shall be entitled to collect its costs of court, including reasonable attorneys fees. D. Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect and not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement, provided that both parties may still effectively realize the complete benefit of the transaction contemplated hereby. E. Amendments. No modification or amendment of this Agreement shall be effective unless made in writing and executed by both Owner and Purchaser. In the event any approval or consent is required pursuant to any provision of this Agreement, such approval or consent shall be deemed given only if it is in writing, executed b the party whose approval or consent is required. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. SIGNATURES ON FOLLOWING PAGE Page 4 of 5

12 OWNER: INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF SOUTHAMPTON, VIRGINIA By: Its: PURCHASER: PRTI VA-One, LLC. By: Its: Page 5 of 5

13 HAMPTON FARMS BIRDSONG SPSA LEE M. WHITE FRANKLIN DISPOSAL & RECYCLING PRTI AC. ENVIVA

14 Proposed Road R/W Proposed waterline extension Proposed sewerline extension Existing sewerline Approximate parcel boundaries 10.0 Ac. +/- 7.5 Ac. +/ Ac. +/- 5.5 Ac. +/-