NC0025453_Modification_Request_&_Sale_Agreement_20201015

Town of Clayton USPS CERTIFIED MAIL
PO Box 879
Clayton, NC 27528
9214 8901 9403 8322 5813 95
RECEIVED
OCT 15 2020
NCDEQ/DWRINPDES
MR MICHAEL E TEMPLETON P E
WASTEWATER PERMITTING SECTION
DIVISION OF WATER RESOURCES
DEPARTMENT OF ENVIRONMENTAL QUALITY
1617 MAIL SERVICE CTR
RALEIGH NC 27699-1617
Postage:$6.1000

TOWN OF CLAYTON
"SERVICE" OPERATIONS CENTER ..ENVIRONMENT
ELECTRIC SERVICE CARo! PUBLIC WORKS
[phone] a'r9 [phone]
VEHICLE MAINTENANCE � ° WATER RECLAMATION
[phone] xti [phone]
October 05, 2020
RECEIVED
OCT 15 2020
Mr. Michael E. Templeton, P.E.
Wastewater Permitting Section NCDEQ/DWR/NPDES
Division of Water Resources
Department of Environmental Quality
1617 Mail Service Center
Raleigh, NC 27699-1617
Subject: Modification to NPDES Permit
NPDES Permit No. NC0025453
Dear Mr. Templeton,
The Town has recently purchased 13,000 pounds of estuary allocation for total nitrogen from
International Paper New Bern Mill located in Vanceboro, NC (NPDES NC0003191). These allocated
pounds are located in the 100%transport zone and will be transferred the Little Creek WRF located
in Johnston County NC. The Little Creek WRF is located in the 50%transport zone and represent
26,000 pounds at the discharge location.
On 09/30/2020 International Paper was paid $ 6,500,000 by EBT. The sales price was paid through
General Obligation Bonds, approved by the LGC, and adopted by the Town Council.A copy of the
letter transferring ownership is attached.
The transfer of these credits should not create hot spots downstream of the discharge point.A
recently completed River Model demonstrated that water quality would be protected up to the 10
mgd requested;the Town was granted a Speculative Effluents Letter for Little Creek WRF dated
09/04/2020.
This purchased pounds will amend the mixed and reserve column totals located in section A.(6) (a)
to reflect the following:
Estuary(Ibs/yr)Total Mixed= 31,921 + 13,000=44,921#
Discharge (Ibs/yr)Total Mixed= 63,842 + 26,000=89,842#
Estuary(Ibs/yr)Total Reserved= 20,505+ 13,000=33,505#
Discharge (Ibs/yr)Total Reserved=41,010 + 26,000= 67,010#
653 Highway 42 West•P.O.Box 879•Clayton,North Carolina 27520•[phone]•Fax[phone]

The Town requests that this modification be part of the current Major Modification submitted to the
Municipal Permitting Group submitted on 09/09/2020 by Jacobs ch2m. As previously
communicated an additional $1030 would not be needed by this request option.
The Town of Clayton appreciates your efforts on this very important endeavor. Please do not hesitate
to call me directly at 919-553-1536 if you have any questions.
Regards,,, J
ames Warren
Town of Clayton, NC

International Paper New Bern Mill
INTERNATIONAL®PAPER 1785 Weyerhaeuser Rd.
Vanceboro, NC 28586
9/21/20
Mr. Michael E. Templeton, P.E.
Wastewater Permitting Section
Division of Water Resources
Department of Environmental Quality
1617 Mail Service Center
Raleigh, NC 27699-1617
Subject: Modification to NPDES Permit
NPDES Permit No. NC0003191
Nutrient Credits Transferred: 13,000 lbs Nitrogen
Dear Mr. Templeton,
The International Paper - New Bern Mill requests a modification to the current NPDES permit
NC0003191. The current NPDES permit covers discharges from the existing onsite wastewater
treatment system to the Neuse River, currently classified SC-Swamp NSW waters in the Neuse River
Basin.
The New Bern Mill has entered into a contract with the Town of Clayton to make 13,000 lbs/year of
the total nitrogen load currently allocated in NPDES permit NC0003191 available to the Town of
Clayton. Upon execution,this modification is a permanent transfer of total nitrogen load. The contract
has been submitted by the Director of Public Service of the Town of Clayton for your review. As of
September 30, 2020 International Paper has received full payment towards the nutrient credit
transfer.
The New Bern Mill requests the NPDES permit limit for total annual nitrogen load, currently set at
312,828 lbs/year, be reduced to 299,828 lbs/year.
A permit fee of$1,030 is included with this request as required for a major NPDES permit modification
fee schedule.
Should you have any questions or comments concerning this submittal, please contact Robin
Schroeder at 252-633-7447 or electronically at [e-mail]
Sincerely,
Adam Miklos
Mill Manager

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'7414E;i:V NCDEQ Division of Water Resources
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- i 27699
PS Form 3800 A
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S
ESTUARY NITROGEN ALLOCATION
PURCHASE AND SALE AGREEMENT
("Agreement")
Buyer: Town of Clayton Address:
PO Box 879Clayton, NC 27528-0879
Buyer Contact: Richard D.Cappola,Jr. Contact Info:
Public Services Director Email: [e-mail]
_ Tel.#:[phone] _
Seller: International Paper Company Address: 6400 Poplar Avenue
Memphis,TN 38197 _
Seller Contact: Patrick Wilson Contact Info:
International Paper Energy Sourcing Leader E-mail: [e-mail]
Phone#: [phone]
Effective Date: April 1,2020
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Product, North Carolina Estuary Nitrogen Allocation Credits(hereinafter the"Credits")as specifically identified in the table
Quantity,and below:
Price: Emission Quantity Credit Price
Type Facility Identifier Sold per Pound
Estuary New Bern Mill NPDES 13,000 $500
Nitrogen NC0003191 pounds
Allocation
Purchase and Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Credits identified above in the Quantity Sold
Sale: and at the Credit Price per Pound set forth above for a total purchase price of Six Million Five Hundred Thousand
dollars($6,500,000) (the"Total Purchase Price").
Buyer shall be responsible for taxes,filing fees, registration fees,and/or transfer fees applicable to the transfer of
the Credits,if any.
Upon the receipt by Seller of the full Total Purchase Price, ownership, title and any other rights and interests in
the Credits shall transfer from Seller to Buyer.
Transfer and Within three (3) business days after execution of this Agreement, Seller shall submit to Buyer an original of the
Payment Terms: required North Carolina Credit transfer forms.
Buyer shall pay the Total Purchase Price to Seller within seven (7)business days of final approval from the North
Carolina Department of Environmental Quality for the transfer of the Credits. All funds to be paid shall be
rendered in the form of immediately available funds (U.S. Dollars) by wire transfer or in such other form as
otherwise agreed to by the parties,in writing.
Seller's Banking Instructions are:
Bank:JP Morgan Chase Bank
ABA Routing No.:021000021
Account Name: International Paper Company
Account No.:0361046469
If Buyer fails to remit any amount payable by it when due,then interest on such unpaid portion shall accrue at a
rate equal to the prime interest rate in effect at the time as published in The Wall Street Journal plus two percent
(2%) from the date payment is due to the date of payment.
Buyer and Seller shall fully, timely and reasonably cooperate to obtain any and all required documentation,
approvals, and/or certificates which may be required to effectuate the transfer of the Credits to Buyer and to
comply with any and all other regulatory obligations relating to the recording and tracking of the transfer of the
Credits.
PPAB 5519821v2

Should the North Carolina Department of Environmental Quality not approve the transfer of the Credits from
Seller to Buyer,and thereafter the parties are unable to accomplish the transfer within the later of one hundred
twenty (120) business days of the first submitted request for transfer or July 31, 2020, due to the decision,
actions, or inactions of the North Carolina Department of Environmental Quality, then this Agreement will
become null and void. In such case,Seller shall return any monies paid and ownership of the Credits shall return
to the Seller and neither party shall have any further obligation or liability to the other party.
Additional Terms Mutual Representations and Warranties. Each party represents and warrants to the other party as of the date of
and Conditions: this Agreement,and as of the date of delivery of the Credits to be sold hereunder that(i)it has, and at all times
during the term of this Agreement will have,all necessary power and authority to execute,deliver, and perform
its obligations under this Agreement; (ii) the execution, delivery, and performance of this Agreement has been
duly authorized by all necessary action and does not violate any of the terms or conditions of its governing
documents,or any contract to which it is a party,or any law or other legal or regulatory determination applicable
to it; and (iii) there is no pending or (to its knowledge) threatened litigation, arbitration, or administrative
proceeding that materially adversely affects its ability to perform its obligations under this Agreement.
Representations and Warranties of Seller. Seller represents and warrants to Buyer that, with respect to the
Credits delivered to Buyer hereunder: (i) each Credits sold hereunder meets the specifications set forth in this
Agreement;(ii)Seller has good and legal ownership to the.Credits;and(iii)all right,title and interest in and to the
Credits are free and clear of any liens,taxes, claims,security interests,or other encumbrances,and upon receipt
of the Credits by Buyer, Buyer shall have all right, title, and interest in and to such Credits. SELLER EXPRESSLY
NEGATES ANY OTHER REPRESENTATION OR WARRANTY, WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO,ANY REPRESENTATION OR WARRANTY WITH RESPECT TO MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE AS RELATED TO THE CREDITS.
Event of Default. For purposes of this Agreement,a party shall be in default(each of the following,an"Event of
Default"): (i) if that party fails to make, when due, any payment required pursuant to this Agreement if such
failure is not remedied within five (5) business days of written notice from the other party; (ii) if that party
materially breaches any or all of its obligations under this Agreement and such breach is not cured within ten(10)
business days of written notice of such breach from the other party;(iii)if any representation or warranty made
by a party pursuant to this Agreement proves to have been misleading or false in any material respect when
made; or, before the conclusion of all actions required for the sale, delivery, and performance of obligations
under this Agreement, (iv) if a party makes an assignment or any general arrangement for the benefit of its
creditors; files a petition or otherwise commences, authorizes or acquiesces in the commencement of a
proceeding or cause under any bankruptcy or similar law for the protection of creditors; has a petition filed
against it; or otherwise becomes bankrupt or insolvent(however evidenced);(v) if a liquidator, receiver,trustee,
conservator or similar official is appointed with respect to a party or any substantial proportion of its property or
assets;(vi)if that party is generally unable,or admits in writing of its general inability,to pay its debts as they fall
due;or(vii)if that party repudiates any obligation under this Agreement.
Remedies upon Default. If an Event of Default occurs on the part of either party and is continuing, the non-
defaulting party may,at its sole option, upon five(5)business days'written notice and opportunity to cure to the
defaulting party,terminate this Agreement.
Failure to Deliver/Receive. Notwithstanding anything in this Agreement to the contrary,the remedies set forth in
this section are the exclusive monetary remedies of the performing party for the other party's failure to(i)take
delivery of all or any portion of the Credits specified hereunder, or(ii) deliver all or any portion of the Credits
specified herein,as applicable.
If Buyer fails to take delivery of all or any portion of the Quantity of Credits specified herein and such failure is
not excused under the terms of this Agreement(including,without limitation, due to a Change in Law [defined
below]),Buyer shall pay Seller,within five(5)business days of invoice receipt,an amount equal to the sum of the
Unit Price multiplied by the quantity for any Credits delivered to Buyer for which Seller has not been paid;plus(i)
reasonable actual,documented legal fees and costs incurred by Seller in enforcement and protection of its rights
under this Agreement;plus(ii)interest as described herein.
If Seller fails to deliver all or any portion of the Quantity of Credits to Buyer specified herein and such failure is
not excused under the terms of this Agreement, then Seller shall pay Buyer, within five (5) business days of
invoice receipt, an amount equal to$1000,plus reasonable actual,documented legal fees and costs incurred by
Buyer in enforcement and protection of its rights under this Agreement. In addition to monetary damages as
allowed by this Section, Buyer may sue for specific performance of this Agreement. The parties agree that an
PPAB 5519821v2

order of the court enforcing the consummation of the sale and delivery of the Credits is an appropriate remedy in
the event of a Seller Default.
Change of Law. Should any change in law governing the Credits occur prior to Buyer's receipt of transfer
documents evidencing that the Credits have been transferred to Buyer, and such change of law restricts or limits
the transferability of the Credits(i.e. not simply a clarification or modification of existing law which has little or
no effect on the ability of the parties hereto to effectuate this sale transaction or upon the nature and quality of
the Credits) (a "Change of Law"), then Buyer's sole recourse and remedy shall be to terminate this Agreement
upon written notice to Seller, and upon Buyer's exercising of said termination, Seller shall return any amounts
received from Buyer (if applicable) and Buyer shall cooperate to effect the return of the Credits to Seller (if
applicable), and thereafter no party shall have any further liability or obligation to any other party hereto. If a
Change of Law occurs after Buyer's receipt of documentation evidencing that the Credits have been transferred
to Buyer or Buyer's designee,then Buyer shall have no recourse or remedy against Seller.
Limitations of Liability. THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED HEREIN SATISFY THE
ESSENTIAL PURPOSES HEREOF. FOR BREACH OR DEFAULT ARISING FROM ANY PROVISION FOR WHICH AN
EXPRESS REMEDY IS PROVIDED HEREIN, SUCH REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND
EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED, INCLUDING
ANY INDEMNIFICATION OBLIGATIONS RELATING THERETO. IF NO REMEDY OR MEASURE OF DAMAGES IS
EXPRESSLY PROVIDED HEREIN, LIABILITY SHALL BE LIMITED TO DIRECT,ACTUAL DAMAGES ONLY. SUCH DIRECT,
ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT
LAW OR IN EQUITY ARE WAIVED. EXCEPT AS MAY BE INCLUDED IN AN EXPRESS REMEDY PROVIDED FOR HEREIN,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT,SPECIAL,CONSEQUENTIAL, PUNITIVE
OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, INCLUDING LOST PROFITS
(EXCEPT TO THE EXTENT THAT THE PAYMENTS REQUIRED TO BE MADE PURSUANT TO THIS AGREEMENT ARE
DEEMED TO BE SUCH DAMAGES) OR BUSINESS INTERRUPTION DAMAGES, WHETHER BASED ON STATUTE,
CONTRACT,TORT, UNDER ANY INDEMNITY OR OTHERWISE, WITHOUT REGARD TO CAUSE OR THE NEGLIGENCE
OF ANY PARTY, WHETHER SOLE, JOINT, ACTIVE OR PASSIVE, AND EACH PARTY HEREBY RELEASES THE OTHER
PARTY FROM ANY SUCH LIABILITY, EVEN IF DURING THE TERM HEREOF IT ADVISES THE OTHER OF THE
POSSIBILITY OF SUCH DAMAGES. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE
LIQUIDATED,THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE,
OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED
HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS AND ARE NOT A PENALTY.
Confidentiality. To the extent allowable by law, the parties agree to keep confidential the contents of this
Agreement and any information made available by one party to the other party with respect to this Agreement
(the"Confidential Information")except:(i)in respect of information that is or becomes generally available to the
public other than as a result of a disclosure by either party in violation of this Agreement; (ii) in respect of
information that was already known by either party on a non-confidential basis prior to the execution of this
Agreement;(iii)in respect of information that becomes available to either party on a non-confidential basis from
a source other than the other party where such source is not known by the receiving party to be subject to a
confidentiality obligation with respect to such information; (iv) to the extent required by any administrator or
regulatory agency in order to effectuate the transaction contemplated by this Agreement or to comply with
applicable law; (v)in respect of information that is independently derived and is not directly attributable to the
party with respect to which it relates;and(vi)to the professional advisors of each party,provided that each party
ensures that the matters disclosed are kept confidential. The parties acknowledge and agree that in the event of
a breach of this confidentiality provision monetary damages may be insufficient to make the non-disclosing party
whole; as such, the non-disclosing party shall be entitled to seek equitable relief, including injunctive relief and
specific performance,in addition to all other remedies available at law or in equity.Seller agrees that publication
of this Agreement, in its totality, as part of Town Council meeting agendas or in response to a public records
request pursuant to N.C.G.S.§132 is not a breach of this Agreement.
Notices. All notices,demands,and other communications hereunder shall be effective only if given in writing and
shall be deemed given (i) when delivered in person; (ii) when delivered by a reputable overnight carrier (with
confirmation of delivery);(iii)when transmitted by facsimile or e-mail(with confirmation of transmission);or(iv)
five (5) business days after being deposited in the United States mail, first-class, registered or certified, return
receipt requested,with postage paid. For purposes hereof,all notices,demands and other communications shall
be sent to the contacts and addresses above(or to such other address furnished in writing by one party to the
other party).
Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
PPAB 5519821 v2

successors and permitted assigns. Neither party may transfer or assign this Agreement, in whole or in part,
without the other parry's prior written consent, which consent shall not be unreasonably withheld. Upon any
transfer or assignment permitted by this Agreement, the assignor shall be released from its obligations
hereunder to the extent such obligations are assumed by the assignee.
Amendment. This Agreement may be amended at any time, but only by a written agreement signed by both
parties.
No Waiver. No delay or omission by a party in the exercise of any right under this Agreement shall be taken,
construed, or considered as a waiver or relinquishment thereof. If any of the terms and conditions herein are
breached and thereafter waived in writing by a party, such waiver is limited to the particular breach so waived
and is not deemed to waive any other breach hereunder.
Severability. If any provision or portion of this Agreement is found to be unenforceable,the remainder shall be
enforced as fully as possible and the unenforceable provision shall be deemed modified to the limited extent
required to permit its enforcement in a manner most closely representing the intention of the Parties as
expressed herein.
Complete Agreement. This Agreement represents the parties' final and mutual understanding concerning its
subject matter. It replaces and supersedes any prior agreements or understandings,whether written or oral.
Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of
North Carolina,excluding any choice of law or conflicts of law rules or principles that would result in application
of the laws of a different jurisdiction.
Dispute Resolution. Any dispute between the parties arising under or pertaining to this Agreement shall be
referred to representatives of the parties for informal dispute resolution discussions as soon as practicable. In
the event that the designated representatives do not reach a mutually acceptable resolution of the dispute
within thirty (30) days of such referral, the parties may agree to submit such dispute to mediation or other
dispute resolution process as may be agreed upon by the parties. If the dispute is not resolved within ninety(90)
days from the date of such submission for mediation or other dispute resolution process,either party may bring
an appropriate action at law or in equity in the courts of the State of North Carolina or the U.S. District Court
located in the State of North Carolina. Each party waives any objection which it may have at any time to the
laying of venue of any such proceedings brought in any such court,waives any claim that such proceedings have
been brought in an inconvenient forum and further waives the right to object,with respect to such proceedings,
that such court does not have any jurisdiction over such party. Nothing in this Agreement to the contrary shall,
or is intended to, prevent either party from bringing an action in equity to seek injunctive relief, if necessary, to
avoid irreparable harm. EACH PARTY WAIVES ITS RESPECTIVE RIGHT TO ANY JURY TRIAL WITH RESPECT TO ANY
LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT.
Counterparts. This Agreement may be executed in counterparts,each of which shall be deemed an original,and
all of which together shall be deemed to be one and the same instrument. Scanned and e-mailed copies of the
signed Agreement or other electronic transmission of any signed original document,will be the same as delivery
of any original document.
Further Assurances. Each party shall provide the other party any reasonably requested information or
documentation required to effect a transfer of Credits pursuant to the terms of this Agreement,will cooperate to
cause a transfer to occur,and will otherwise comply with any and all applicable procedures and requirements of
applicable law relating to the transfer.
PPAB 5519821v2

By signing below and in witness whereof,the parties agree to be bound by the terms and conditions contained in this
Agreement.
Buyer: TOWN OF CLAYTON Seller: INTERNATIONAL PAPER COMPANY
Signature: Title:Town Manager Signature: Title:
D .(7, tozc, Catketdre/Seel SVP G C F & I P Asia
Printed me: Ada indsay�-----'� Date: Printed Name: Date:
Catherine I Slater 04/01/2020
This instrument has been preaudited in the manner required by the Local Government Budget and Fiscal Control Act.
101,, // GAO'
obert McKie,Finance Director
PPAB 5519821v2
1