S Grant - Co Ext - Golden Leaf Grant for Piedmont Value Added Shared Use Food & Agricultural Processing center 01-22-2009-4p

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LAW OFFICES COLEMAN, GLEDHILL, HARGRAVE & PEEK A PROFESSIONAL CORPORATION 129 E. TRYON STREET' April 16, 2009 P. O. DRA~~ER 1529 HIILLLSBOROUGK, NORTH CAROLINA 27278 919-732.2(96 FAX 919-732.7997 www.cghp-law.com Mr. Noah Ranells Orange County Economic Development Post Office Box 8181 Hillsborough, North Carolina 27819 FROM TI3E DESK OE GT;OFFREY E. GLEDHILL E-MAIL: g~edhill@cghp-law.rnm RE: Golden Leaf Grant Agreement For The Piedmont Value-Added Shared~Use Agricultural Processing Center Dear Noah: The Board of County Commissioners (the "Board") "ratified" the earlier submitted grant application far the above referenced grant on August 19, 2008. The August 19, 2008 agenda item abstract for this action did not contain a copy of the actual grant application that had been submitted. The grant application did contain a certification signed by you stating that, " ...the funds granted by Golden LEAF will be used exclusively for charitable, scientific, educational or other tax-exempt public purposes, ..." The actual Grant Agreement, approved by the Board on January 22, 2009, subject to County Attorney review, similarly contains the following: "It agrees that it will use the funds from this grant only for charitable, educational, or scientific purposes within the meaning of Section 501(c}(3} of the Code, and that it will not use the funds from this grant in any way that would result in or give rise to private inurement or private benefit." The grant funds in the amount of $250,000.00 are subject to revocation (and repayment) under Section 18(h) of the Grant Agreement if the County " ...uses funds for some purpose not permitted by the Internal Revenue Code ..." Further, there are several provisions of the Grant Agreement that, in our view, needed clarification. I have been working with Edward P. (Ted) Lord, Vice President of Programs/Staff Attorney, Golden LEAF Foundation and with David Kyger, Smith Moore, outside counsel for the Golden LEAF Foundation, on the Internal Revenue Code requirements of the Grant Agreement and on points of clarification. That work has resulted in my receipt of the enclosed two letters from Mr. Lord which together address our concerns. I am not an income tax lawyer and do not have special expertise with the Internal Revenue Code, including Section 501(c)(3) of the Code. No one in our firm has this expertise. I am now persuaded, however, the Value-Added Shared-Use Agricultural Processing Center project is eligible for the Golden LEAF Foundation grant. Therefore, in express reliance on the information provided in the letters enclosed and on the conversations I had with Ted Lord and outside counsel for the Golden LEAF Foundation, I recommend the County accept the Golden LEAF Foundation Grant. The Grant Agreement can be executed by the appropriate County officials and delivered after execution to the Golden LEAF Foundation. Please be sure this letter and its enclosuxes are kept with the County's executed copy of the Grant Agreement.