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Robert M. Jessup Jr. <br />Kenneth T. Chavious <br />April 23,1999 <br />Page 2 <br />Burke a copy of the enclosed resolution and agreement, and a copy of the loan <br />commitment you receive from NationsBank. I would suggest that you send the <br />documents with a letter describing the transaction, letting leer know that the County <br />Commissioners are scheduled to approve the transaction on May 4 and stating that we <br />will contact her then about arrangements to complete the modification (you will see that <br />someone from the LGC will need to sign the modification agreement). Janice prefers to <br />get this information from County officials such as yourself, as opposed to bond lawyers <br />like me, but I can certainly make the contact with Janice if you would prefer. <br />If the County Commissioners approve the transaction on May 4, we could then <br />move directly to complete the modification as quickly as we could gather the necessary <br />signatures. NationsBank may or may not want a new Iegal opinion or tax opinion, an <br />updated title insurance policy or any other closing items. If NationsBank does in fact ask <br />for any such items, I would expect to work with Geof and divide the responsibility on the <br />same basis as we did for the Skills Center financing. <br />The IRS treats a substantial interest rate modification, such as we havc here, as the <br />termination of the original loan and the creation of a new loan. This is true even though <br />we do not treat the modification as a termination/creation for purposes of North Carolina <br />law. This IRS interpretation means (a) the County will have to file a new 8038 at the <br />time of the modification, and (b) the County will have to calculate (and, if necessary, pay) <br />its final rebate liability for the original loan within 60 days of the modification. <br />Allow me also to state in this letter my understanding of the terms we discussed <br />for my fees on this transaction. As we discussed, I will work for the County on the same <br />basis as upon which I worked on the Skills Center financing last year. Specifically, I will <br />charge the County for my work on an hourly basis at the rate of $125 per hour. My <br />hourly rate will absorb all expenses other than express delivery charges, operator-assisted <br />conference call charges, photocopy charges (at the rate of $0.10 per page} exceeding <br />$10.00 in any day, document filing fees and travel chazges in the unlikely event that <br />travel is required outside the six-county Triangle area. In all cases, travel time will be <br />charged the same as any other working time. By way of information, my fee on the Skills <br />Center financing was approximately $3,750, and I would certainly not expect the fce this <br />time to be any higher. <br />4 <br />