HomeMy WebLinkAboutOctober_11_2004_special_meeting_minutesIREDELL COUNTY BOARD OF COMMISSIONERS
SPECIAL MEETING MINUTES
OCTOBER 11, 2004
The Iredell County Board of Commissioners met for a Special Meeting on Monday,
October 11, 2004, 2:00 p.m., in the Iredell County Government Center (South Wing Conference
Room), 200 South Center Street, Statesville, NC.
Present were:
Chairman Steve D. Johnson
Vice Chairman Godfrey Williams
Doug Madison
Marvin Norman
Sara Haire Tice
Staff present: County Manager Joel Mashburn, Finance Director Susan Blumenstein,
Support Services Director Jim Vernon, Social Services Director Don Wall, Income Maintenance
Administrator Lynn Deal, Social Work Program Administrator Lisa York, and Clerk to the
Board Jean Moore.
Guests: Social Services Board Chairman William Jones and Social Services Board
Member Bobbie Edmisten, along with media representatives also attended the meeting.
CALL TO ORDER by Chairman Johnson.
CONTINUED DISCUSSION REGARDING THE BIDS FOR THE NEW SOCIAL
SERVICES BUILDING: Support Services Director Vernon said that since the October 5 board
meeting, he along with the MBAJ architects, had met with the low bidders for the new social
services building in an effort to identify some cost reductions.
Vernon then described the following "value -engineered" items that could possibly be
deleted from the project.
General Construction:
Textured (different finish, scoring) concrete instead of brick pavers at
patio area.
Replace shaped GRG light cove in waiting area with plain gypsum
board/metal stud soffit light cove.
Replace translucent ceiling panels in the second floor elevator lobby and
main staircase with a flat ceiling of acoustical panel grid & tegular tile
Replace GRC cornice with brick.
Replace cast stone sills at the exterior with brick rowlock.
Provide vinyl wall covering without stain -resistant coating.
Use particle core wood door instead of structural composite lumber core
doors.
Use 3/4" thick epoxy resin window sills instead of specified 1" thick
epoxy resin window sills.
Delete drywall reveal trim at all locations shown on interior elevations
(waiting 1101, elevator lobby 1030, 2030, corridor 1000).
Plumbing:
Use schedule 40 solid core PVC pipe instead of cast iron pipe for
underground lines.
Mechanical:
Provide plenum rated cable for control wiring instead of placing wiring in
conduit in concealed spaces.
Provide finned tube boiler and approved stack instead of specified cast
iron boiler and stack.
Electrical:
Use different manufacturer's light fixtures instead of manufacturers
$ 3,150
4,300
2,160
36,500
5,280
6,000
2,700
1,662
7,776
$ 69,528
$ 3,000
$ 7,500
5 000
$ 12,500
specified.
Delete occupancy sensors.
Delete sound conduit.
Delete security conduit.
$ 8,000
20,000
3,500
1,500
$ 33,000
Total $118,028
In addition to the $118,028.00, Vernon said the $60,900.00 generator could be deleted
and purchased at another time. Additionally, he said $50,000 could be deducted from the
contingency line items, and another $50,000 could be deducted from FF&E. He said all of the
reductions ($278,928) could then be subtracted from the October 5 estimated building cost of
$6,950,000 giving a new total cost of $6,671,075. Vernon continued by saying the integrity of
the building would not be compromised by the cuts due to most of them being in the project for
aesthetic purposes.
Chairman Johnson said he agreed that the generator should be purchased separately.
OTION by Commissioner Madison to (1) accept the staffs recommendations
regarding the reductions in the contracts for the new social services building (2) authorize the
chairman of the board to sign the relevant contracts for the project and (3) authorize Finance
Director Blumenstein to amend the capital projects ordinance.
VOTING: Ayes — 5; Nays — 0.
SOCIAL SERVICES FINANCING DOCUMENTS: Blumenstein said the financing
documents would be revised to reflect the lower cost. She said the documents originally used a
"not to exceed" amount of $6,950,000.00; however, this would be changed to $6,671,075.00.
MOTION by Chairman Tice to approve the financing documents subject to any final
corrections by the bond counsel or the county attorney.
VOTING: Ayes —5; Nays — 0.
CLOSED SESSION: MOTION by Chairman Johnson at 2:45 p.m., to enter into closed
session pursuant to G.S. 143-318.11 (a) (6) — Personnel.
p.m.
VOTING: Ayes — 5; Nays — 0.
(RETURN TO OPEN SESSION AT 3:05 P.M.)
ADJOURNMENT: MOTION by Chairman Johnson to adjourn the meeting at 3:06
VOTING: Ayes — 5; Nays — 0.
Approval:
Clerk to the Board
Note: The amended capital projects ordinance for the new social services building as well as the
final financing documents are as follows:
2
Iredell County, North Carolina
Mrnnded Capital Project Ordnance
Deperttient of Social Services Facility
Section 1. Fields for this Captal Project Fund vdll be provided from the follckmng source:
Section 2. The fdlorung costs for the design and engineering of the lredeil County
Deianrrent of Social Services Facility shell be paid by this fund:
Basic NE Fees & Consultants
Professional Services -Other (Sivey, Gectecnidal, Radnbursibles
Data/ Con rr nicatiors/Secuity
Gereal Construdon
Punbing Contractor
kladia ical Contractor
aeWical Contractor
Contingency
ConstnuctJon Cosis-S�
Depnedable Assets (FF&E)
Financing & Mrrfn Costs (LGC Fee, Legal Fees, Title Ins, Bank Fees)
T2nsfer to Captal Reserve Fund
Transfer to Cererd Fund
Section 3. This Capital Prcjed Fund shall continue until the project is con pets.
$ 434,300 - $ 434,300
50,000 50,000
6,671,075 6,671,075
$ 484,300 6,671,075 $ 7,155,375
$ 343,500 1,800 $ 345,300
75,760 76,045
151,805
- 4,339,975
4,339,975
181,500
181,500
674,400
674,400
- 633,850
633,850
25,800 5,340
31,140
39,240 -
39,240
- 247,365
247,365
26,500
26,500
434,300
434,300
50,000
50,000
$ 484,300 $6,671,075 $ 7,155,375
Section 4. The County Manager is authorized to transfer handsfrom Contingency to other e)qoenditure line iters with a report to
thhe bid of oeanssioners at finer red mnoting.
Section 5. Payrnents frnn this Capital Project Fund shall be athonzed by the County Manager a his designee.
This Mended Project Ordinance being adopted October 11, 2005.
3
Hmrton & Williams LLP (MNKR)
Post Office Box 109
Raleigh, North Carolina 27602
DEED OF TRUST AND SECURITY AGREEMENT
THIS DEED OF TRUST CONSTITUTES A FIXTURE FILING
COUNTY OF IREDELL
THIS DEED OF TRUST AND SECURITY AGREEMENT (this "Deed of Trust") is made and
entered into as of October 28, 2004, by and between the County of Iredell, North Carolina, a
political subdivision existing under the Constitution and laws of the State of North Carolina (the
"County") and PRLAP, Inc., as Trustee (the "Trustee"), for the benefit of Bank of America, N.A.
(the `Beneficiary").
WITNESSETH:
WHEREAS, the County and the Beneficiary have entered into an Installment Financing
Agreement dated the date hereof (the "Agreement") to finance Implementation of the Project (as
such terms are defined in the Agreement);
WHEREAS, the County has agreed to pay to the Beneficiary a sum not exceeding $6,671,075 for
money advanced to the County by the Beneficiary (the "Advance"), as evidenced by, and
payable as provided in, the Agreement, in installments with interest payable as specified therein,
and to make certain Additional Payments (as defined in the Agreement) as more fully provided
therein, with the last Installment Payment (as defined in the Agreement) of principal and interest
being due and payable on or about October 31, 2019;
WHEREAS, the County desires to secure (i) the payment of the Installment Payments due under
the Agreement; (ii) the payment by the County of all Additional Payments required to be paid by
the County under the Agreement and the performance by the County of all additional covenants
of the County set forth in the Agreement; (iii) the payment by the County of any additional
payments required to be made to the Beneficiary in connection with additional advances made
under the Agreement; (iv) the payment of any and all other indebtedness which this Deed of
Trust by its terms secures; and (v) the performance of the covenants and agreements contained in
this Deed of Trust, the Agreement, and any amendments and supplements thereto;
WHEREAS, the County wishes to grant to the Beneficiary a first lien on, and security interest in,
the Trust Estate (hereinafter defined), including the real property described in Exhibit A,
attached hereto, pursuant to the terms of this Deed of Trust as security for the payment of the
amounts described above and the performance of the covenants described above, subject only to
Permitted Encumbrances (as described in Exhibit B hereto); and
WHEREAS, all capitalized terms used but not defined herein shall have the meanings assigned
to them in the Agreement.
NOW, THEREFORE, the County, subject to Permitted Encumbrances (as described in Exhibit
B hereto), as security for payment of the Installment Payments and the Additional Payments to
be made under the Agreement and for the performance by the County of all of its obligations
under the Agreement and this Deed of Trust, and in consideration of the sum of $10.00 paid to
the County by the Trustee, the receipt and sufficiency of which are hereby acknowledged, the
County hereby irrevocably grants and conveys to the Trustee and the Trustee's successors and
assigns, in trust, with power of sale, all of the following described land, real property interests,
buildings, improvements, fixtures, furniture and appliances and other personal property:
(a) All those tracts or parcels of land and other real property interests in the County of
Iredell, County, North Carolina, more particularly described in Exhibit A attached hereto and
made a part hereof (the "Land");
(b) All buildings and improvements of every kind and description now or hereafter erected or
placed on the aforesaid Land (the "Improvements") and all materials (stored on-site or off-site)
intended for construction, reconstruction, alteration and repair of such improvements now or
4
hereafter erected thereon, all of which materials shall be deemed to be included within the Land
hereby conveyed immediately upon the delivery thereof to the aforesaid Land, and all fixtures
now or hereafter owned by the County acquired with the proceeds of the Advance and attached
to or contained in or used in connection with the aforesaid Land and Improvements (the
"Fixtures");
TOGETHER WITH all proceeds of any of the foregoing Land, real property interests, buildings,
improvements, fixtures, including, without limitation, proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or liquidated claims, including, without limitation,
all awards and other payments as a result of or in lieu or in anticipation of the exercise of the
right of condemnation or eminent domain by any governmental authority ("Eminent Domain"),
all insurance proceeds and claims therefor as a result of damage to or destruction of all or any
part of any of the foregoing, and all proceeds of title insurance with respect to all or any part of
any of the foregoing (the Land, Improvements, Fixtures and proceeds thereof granted to the
Trustee pursuant to the foregoing provisions hereof being collectively referred to as the "Trust
Estate");
TO HAVE AND HOLD the same, together with all privileges, hereditament, easements and
appurtenances thereunto belonging, to the Trustee and the Trustee's successors and assigns to
secure the indebtedness upon this special trust: that should the indebtedness secured hereby be
paid according to the tenor and effect thereof when the same shall be due and payable and should
the County timely and fully discharge its obligations hereunder, then this conveyance shall be
null and void and will be canceled of record at the request of the County, and the Trust Estate
shall be reconveyed to the County or the title thereto shall be reinvested according to the
provisions of law;
All the Fixtures which comprise a part of the Land shall, as far as permitted by law, be deemed
to be affixed to the aforesaid Land and conveyed therewith.
❑X If this box is checked, the following paragraph applies:
This Deed of Trust secures an obligation incurred for the
construction of an improvement on the Land and as such
constitutes a "construction mortgage" under Section 25-9-334,
North Carolina General Statutes.
The County, the Trustee and the Beneficiary covenant, represent and agree as follows:
ARTICLE I
THE PROCEEDS
1.1 Amount Secured. This Deed of Trust secures all present and future loan disbursements
made by the Beneficiary to the County under the Agreement, and all other present and future
obligations from time to time owing to the Beneficiary by the County under the Agreement or
this Deed of Trust.
1.2 Use of Funds. The Advance is made pursuant to the Agreement for the purpose of
financing the Implementation of the Project. This Deed of Trust secures the obligations of the
County under the Agreement, and any extensions, renewals, modifications, replacements and
substitutions therefor, and all other obligations of the County set forth in this Deed of Trust.
1.3 Payment of Installment Payments. Payment of Installment Payments by the County will
be in accordance with the Agreement, with the last Installment Payment being due and payable
on or about October—, 2019 (as such date may be extended or modified).
1.4 Maintenance and Modification of the Trust Estate. Neither the Trustee nor the
Beneficiary shall be under any obligation to operate, maintain or repair the Trust Estate. The
County agrees it will at its own expense (i) keep the Trust Estate in as reasonably safe condition
as its operations shall permit, (ii) keep the Trust Estate in good repair and in good operating
condition, (iii) comply with all applicable governmental requirements imposed upon the Trust
Estate or in connection with its use, and (iv) make from time to time all necessary repairs thereto
and renewals and replacements thereof.
5
The County may, also at its own expense, make from time to time any additions, modifications
or improvements to the Trust Estate that it may deem desirable for its governmental or
proprietary purposes, provided that such additions, modifications or improvements do not
materially impair the effective use, nor materially decrease the value, of the Trust Estate. All
such additions, modifications and improvements so made by the County within the boundaries of
the Land shall become a part of the Trust Estate. The County will do, or cause to be done, all
such things as may be required by law in order fully to protect the security and all rights of the
Beneficiary under this Deed of Trust. The County shall not cause or permit the lien of this Deed
of Trust to be impaired in any way.
ARTICLE II
COUNTY'S COVENANTS, REPRESENTATIONS AND AGREEMENTS
2.1 Title to Land. The County represents and warrants that it is seized of the Land and
Improvements (and any fixtures) in fee (and has title to any appurtenant easements) and has the
right to convey the same, that title to such property is free and clear of all encumbrances except
for the matters shown on Exhibit B attached hereto (the "Permitted Encumbrances"), and that it
will warrant and defend the title to such property against the claims of all persons or parties
except for the Permitted Encumbrances.
2.2 Security Interest in Fixtures. The County, as Debtor, hereby grants Beneficiary, as
Secured Party, a security interest in the Fixtures. This Deed of Trust is intended as, and
constitutes, a security agreement pursuant to the North Carolina Uniform Commercial Code (the
"UCC") with respect to the Fixtures and the security interest therein. This Deed of Trust
constitutes a Financing Statement with respect to the Fixtures under the UCC. The Fixtures are
or will be located on the Land described on Exhibit A. The County is the record owner of the
Land. The name and address of the County, as Debtor, and the Beneficiary, as Secured Party,
are set forth in Section 4.5 hereof.
2.3 Payment of Advance. The County will punctually pay all amounts required to be paid
under the Agreement and all other sums secured hereby at the time and place and in the manner
specified in the Agreement or this Deed of Trust.
2.4 Insurance, Taxes and Fees. The County will pay prior to delinquency all taxes, general
and special assessments, insurance premiums, permit fees, inspection fees, license fees, water
and sewer charges, franchise fees and equipment rents against it or the Trust Estate (collectively,
the "Charges"), and the County, upon request of the Beneficiary, will submit to the Beneficiary
receipts evidencing said payments. The County may contest, in good faith and by appropriate
proceeding diligently pursued, the validity, applicability or amount of any of the Charges,
without being in default hereunder for withholding payment thereof during such contest, by
paying all amounts claimed to be due under protest if required or permitted.
2.5 Reimbursement. The County agrees that if it shall fail to pay prior to delinquency any
tax, assessment or charge levied or assessed against the Trust Estate or any utility charge,
whether public or private, or any insurance premium, or if it shall fail to procure the insurance
coverage and the delivery of the insurance certificates required hereunder, or if it shall fail to pay
any other charge or fee described in Sections 2.4 or 2.8 hereof, then the Beneficiary, at its option,
may pay or procure the same. The County will reimburse the Beneficiary upon demand for any
sums of money paid by the Beneficiary pursuant to this Section, together with interest on each
such payment at the rate of 12% per annum from the date of such advance to the date of
repayment. All sums so advanced shall attach to and become part of the debt secured hereby,
and the failure to make repayment on demand shall constitute a default hereunder, giving rise to
all of the remedies herein provided for an Event of Default.
2.6 Additional Documents. The County agrees to execute and deliver to the Beneficiary,
concurrently with the execution of this Deed of Trust and upon the request of the Beneficiary
from time to time hereafter, all financing statements and other documents reasonably required to
perfect and maintain the security interest created hereby. To the extent permitted by law, the
County hereby irrevocably (as long as the Advance remains unpaid) makes, constitutes and
appoints the Beneficiary as the true and lawful attorney of the County to sign the name of the
County (after the County has failed or refused to timely execute such documents upon request of
the Beneficiary) on any financing statement, continuation of financing statement or similar
document required to perfect or continue such security interests.
6
2.7 Sale or Encumbrance. The County will not sell, encumber or otherwise dispose of any of
the Trust Estate except as permitted by the Agreement or this Deed of Trust.
2.8 Fees and Expenses. The County will pay or reimburse the Beneficiary and the Trustee
for all reasonable attorneys' fees, costs and expenses incurred by the Beneficiary or the Trustee
in any action, legal proceeding or dispute of any kind which affects the Agreement, the interest
created herein, or the Trust Estate, including but not limited to, any foreclosure of this Deed of
Trust, any condemnation action involving the Land or any action to protect the security hereof.
Any such amounts paid by the Beneficiary shall be due and payable upon demand and shall be
secured hereby.
2.9 Compliance with Law. The County will do, or cause to be done, all such things as may
be required by law in order fully to protect the security and all rights of the Beneficiary under
this Deed of Trust. The County shall not cause or permit the lien of this Deed of Trust to be
impaired in any way.
2.10 Inspection. The County will permit the Beneficiary or its agents, at reasonable times
during business hours (unless an emergency exists), to enter and pass through or over the Land
for the purpose of inspecting the Trust Estate.
2.11 Releases and Waivers. The County agrees that no release by the Beneficiary of any
portion of the Trust Estate no subordination of lien, no waiver of any right granted or remedy
available to the Beneficiary and no action taken or not taken by the Beneficiary, shall in any way
diminish the County's obligation to the Beneficiary or have the effect of releasing the County, or
any successor to the County, from full responsibility to the Beneficiary for the complete
discharge of each and every one of the County's obligations hereunder or under the Agreement.
2.12 Grant of Easements. If no Event of Default (as defined below) under this Deed of Trust
shall have occurred and shall continue to exist, the County may at any time or times grant
easements, licenses, rights of way and other rights or privileges in the nature of easements with
respect to any part of the Trust Estate, and the County may release existing interests, easements,
licenses, rights of way and other rights or privileges with or without consideration, and the
Beneficiary agrees that it shall execute and deliver and will cause, request or direct the Trustee to
execute and deliver any instrument reasonably necessary or appropriate to grant or release any
such interests, easement, license, right of way or other right or privilege but only upon receipt of
(i) a copy of the instrument of grant or release, (ii) a written application signed by the County
requesting such instrument, and (iii) a certificate executed by an authorized representative of the
County that the grant or release (A) is not detrimental to the proper conduct of the operations of
the County at the Trust Estate, (B) will not impair the effective use of or interfere with the
operations of the County at the Trust Estate, and (C) will not substantially impair the security
under this Deed of Trust in contravention of the provisions hereof.
2.13 Release of Portion of Trust Estate. So long as any Installment Payments,
Additional Payments or other financial obligations secured by this Deed of Trust shall remain
unpaid, a parcel of or interest in Land constituting part of the Trust Estate shall be released from
the lien and security of this Deed of Trust upon request of the Grantor to the Trustee and the
Beneficiary only when and if the following requirements have been fulfilled:
(a) the portion of the Land to be released is Land upon which no building or necessary
parking is located;
(b) the Grantor shall have delivered to the Trustee and the Beneficiary a certified survey of
the portion of the Land to be released, a certified survey of the Land to remain as part of the
Trust Estate and a revised legal description of the Land that remains as part of the Trust Estate;
(c) the Grantor shall have delivered to the Trustee and the Beneficiary an architect's or
engineer's certificate satisfactory to the Beneficiary to the effect that the release of such portion
of the Land will not cause any damage to the structural soundness of the Improvements or impair
ingress to or egress therefrom or the use of the Improvements for their intended purposes;
(d) the Grantor shall have delivered to the Trustee and the Beneficiary evidence satisfactory
to them that such release does not violate any applicable land use restrictions;
(e) the market value of the Trust Estate remaining after the release of the Land proposed to
be released (as evidenced by an appraisal prepared as of a date not earlier than sixty (60) days
prior to the date of such proposed release by an appraiser acceptable to the Beneficiary) is not
less than 110% of the amount of the outstanding Advance; and
7
(f) the Grantor shall have delivered to the Trustee and the Beneficiary an opinion of counsel
experienced in the law relating to the taxation of the interest on state and local government
securities to the effect that the release of such portion of the Land will not cause the interest
component of the Installment Payments to be includable in gross income for purposes of federal
income taxation and will not have an adverse effect on the exemption of the interest component
of the Installment Payments from State of North Carolina income taxes.
Notwithstanding the foregoing, the Trustee shall release a parcel or interest of land constituting
part of the Trust Estate if directed to do so by the Beneficiary in writing even if the foregoing
conditions have not been met.
ARTICLE III
RIGHTS AND REMEDIES OF THE BENEFICIARY
3.1 Events of Default. The following events shall constitute an "Event of Default" under this
Deed of Trust:
(a) an Event of Default under the Agreement which is not cured within the applicable grace
period, if any; or
(b) failure by the County to observe and perform any warranty, covenant, condition or
agreement on the part of the County under this Deed of Trust for a period of thirty (30) days after
written notice specifying such failure and requesting that it be remedied is given to the County
by the Beneficiary unless the Beneficiary shall consent in writing to an extension of such time
prior to its expiration, such consent not to be unreasonably withheld by the Beneficiary; or
(c) any lien, charge or encumbrance prior to or affecting the validity of this Deed of Trust is
found to exist, other than Permitted Encumbrances, and such lien, charge or encumbrance is not
extinguished or subordinated to the Deed of Trust within a period of thirty (30) days after written
notice requesting that it be extinguished or subordinated is given to the County by the
Beneficiary, unless the Beneficiary shall consent in writing to an extension of such time prior to
its expiration, such consent not to be unreasonably withheld by the Beneficiary.
3.2 Acceleration of Obligations of the County. Upon the occurrence of an Event of Default,
all payments under the Agreement shall, at the option of the Beneficiary, become at once due and
payable regardless of the maturity date or other due date hereof. Neither the advance of funds by
the Beneficiary under any of the terms and provisions hereof nor the failure of the Beneficiary to
exercise promptly any right to declare the payment due under the Agreement due under any of
the foregoing conditions shall operate as a waiver of the Beneficiary's right to exercise such
option thereafter as to any past or current default, unless such Event of Default is waived in
writing by the Beneficiary.
3.3 Remedies of the Beneficiary upon an Event of Default.
(a) If the County's obligations have been accelerated under the Agreement as provided in
Section 3.2 hereof, the Beneficiary may foreclose the lien of this Deed of Trust pursuant to the
power of sale hereby granted or by judicial proceeding. The Trustee is hereby granted a power
of sale and may sell the Land or such part or parts thereof or interests therein as the Beneficiary
may select after first having given such notice of hearing as to commencement of foreclosure
proceedings and obtained such findings or leave of court as then may be required by law and
then having given such notice and advertised the time and place of such sale in such manner as
then may be provided by law, and upon such sale and any resale and upon compliance with the
law then relating to foreclosure proceedings, to convey title to the purchaser.
(b) The Trustee may proceed against the Fixtures as provided in and in accordance with the
applicable provisions of the Uniform Commercial Code as adopted by the State of North
Carolina.
(c) In the event of any sale hereunder, the Beneficiary shall have the right, to the extent
permitted by law, to bid at it and to become the purchaser and in lieu of paying cash therefor may
make settlement for the purchase price by crediting against the outstanding amount due, the
proceeds of the sale, net of sales expenses. The Trustee may require the successful bidder at any
sale to deposit immediately with the Trustee cash or a certified check in an amount not to exceed
five percent (5%) of his bid, provided notice of such requirement is contained in the
advertisement of the sale. The bid may be rejected if the deposit is not immediately made and
thereupon the next highest bidder may be declared to be the purchaser. Such deposit shall be
9
refunded in case a resale is had; otherwise it shall be applied to the purchase price. The sale of
the Trust Estate or any part thereof or any interest therein, whether pursuant to foreclosure,
power of sale or otherwise under this Deed of Trust, shall forever bar any claim with respect to
the Trust Estate by the County.
(d) To the extent permitted by law, the Trustee and the Beneficiary shall have the right to
enter upon the Land to such extent and as often as the Beneficiary or the Trustee, in their sole
discretion, deem necessary or desirable in order to cure any default by the County. To the extent
permitted by law, the Beneficiary and the Trustee may take possession of all or any part of the
Trust Estate and may hold, operate and manage the same, and from time to time make all needful
repairs and improvements as shall be deemed expedient by the Beneficiary or the Trustee.
(e) To the extent permitted by law, the Trustee may lease any part of the Trust Estate in the
name of and for the account of the County, and collect, receive and sequester the rent, revenues,
earnings, income, products and profits therefrom, and out of the same and from any moneys
received from any receiver or any part thereof pay, and set up proper reserves for the payment of,
all proper costs and expenses of so taking, holding and managing the same, including reasonable
compensation to the Beneficiary and the Trustee, its agents and counsel, and any charges of the
Beneficiary hereunder and any taxes and assessments and other charges prior to the lien of this
Deed of Trust which the Beneficiary or the Trustee may deem it proper to pay, and all expenses
of such repairs and improvements, and apply the remainder of the moneys so received in
accordance with the provisions hereof.
(f) To the extent permitted by law, the Beneficiary and the Trustee shall have the right after
an Event of Default to the appointment of a receiver to collect the rents and profits from the
Trust Estate without consideration of the value of the Trust Estate, and all amounts collected by
the receiver shall, after expenses of the receivership, be applied to the payment of the
indebtedness hereby secured. If such receiver should be appointed or if there should be a sale of
any part of the Trust Estate, as provided above, the County, or any person in possession of any
part of the Trust Estate, as tenant or otherwise, shall become a tenant at will of the receiver or of
the purchaser and may be removed by a writ of ejectment, summary ejectment or other lawful
remedy.
(g) The Beneficiary and the Trustee shall have the right to assign to any other person, for
lawful consideration, any rents, revenues, earnings, income, products and profits receivable
under this Deed of Trust, provided that the proceeds of any such assignment shall be applied as
provided in this Deed of Trust.
(h) Except as set forth in Section 3.9 hereof, the foregoing shall in no way be construed to
limit the powers of sale or to restrict the discretion the Trustee may have under North Carolina
law, including the provisions of Article 2A of Chapter 45 of the General Statutes of North
Carolina, as the same may be from time to time amended. Each legal, equitable or contractual
right, power or remedy of the Trustee now or hereafter provided herein or by statute or otherwise
shall be cumulative and concurrent and shall be in addition to every other right, power and
remedy, and the exercise or beginning of the exercise by the Trustee of any one or more of such
rights, powers and remedies shall not preclude the simultaneous or later exercise of any or all
such rights, powers and remedies.
In addition to, but not in limitation of any of the foregoing, upon the occurrence of an Event of
Default, the Beneficiary may exercise any or all of the rights and remedies afforded to the
Beneficiary by the provisions of the North Carolina Uniform Commercial Code or otherwise
afforded to the Beneficiary under this Deed of Trust, with all such rights and remedies being
cumulative and not alternative.
3.4 Application of Proceeds. The proceeds of (a) the operation and management of the Trust
Estate pursuant to Section 3.3 hereof, and (b) sale of the Trust Estate or any interest therein,
whether pursuant to foreclosure, power of sale or otherwise, and (c) any insurance policies or
Eminent Domain awards or other sums retained by the Trustee upon the occurrence of an Event
of Default, shall be applied as set forth in this Deed of Trust to pay:
First. The costs and expenses of sale, reasonable attorneys' fees, the
Beneficiary's and Trustee's fees, expenses and court costs, and any other
expenses or advances made or incurred in the protection of the rights of
the Beneficiary or in the pursuit of any remedies hereunder;
9
Second. All taxes and assessments then constituting a lien against the Trust
Estate other than those advertised and sold subject to;
Third. Any indebtedness secured by this Deed of Trust at the time due and
payable (whether by acceleration or otherwise), including all amounts of
principal and interest at the time due and payable with respect to the
Installment Payments; and
Fourth. The balance, if any, to the persons then entitled thereto.
3.5 Payment of Expenses. The County agrees to pay the costs and disbursements provided
by statute, and reasonable attorneys' fees and legal expenses which may be incurred by the
Beneficiary and the Trustee in enforcing Beneficiary's rights and remedies provided herein. In
the event of a consummated sale under the power of sale contained herein, the Trustee's
commission shall be equal to its actual costs and expenses, including compensation for its
services, not to exceed two percent (2%) of the highest bid at the sale.
3.6 Trustee's Fees. If a foreclosure proceeding is commenced by the Trustee but terminated
prior to its completion, the Trustee's fees will be reasonable but not more than one percent (1%)
of the outstanding Advance if the termination occurs prior to the first public auction sale and not
more than two percent (2%) of the outstanding Advance if the termination occurs after the first
public auction sale.
3.7 Waivers. No waiver of any Event of Default shall at any time thereafter be held to be a
waiver of any rights of the Beneficiary stated anywhere in this Deed of Trust or the Agreement,
nor shall any waiver of a prior Event of Default operate to waive any subsequent Event(s) of
Default.
3.8 Notice. Any required notice by the Beneficiary or the Trustee of sale or other disposition
or default, when mailed to the County at its address set forth herein, shall constitute reasonable
notice to the County.
3.9 No Deficiency Judgment. NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, PURSUANT TO SECTION 160A-20 OF THE GENERAL STATUTES OF
NORTH CAROLINA, NO DEFICIENCY JUDGMENT SHALL BE RENDERED AGAINST
THE COUNTY IN ANY ACTION FOR BREACH BY THE COUNTY OF ITS
OBLIGATIONS UNDER THE AGREEMENT; THE REMEDIES PROVIDED UNDER THIS
DEED OF TRUST, INCLUDING FORECLOSURE UNDER THIS DEED OF TRUST, BEING
THE SOLE REMEDY GRANTED HEREBY. THE TAXING POWER OF THE COUNTY IS
NOT AND MAY NOT BE PLEDGED IN ANY WAY, DIRECTLY OR INDIRECTLY, TO
SECURE THE PAYMENT OF ANY MONEYS DUE UNDER THE AGREEMENT,
INCLUDING THE INSTALLMENT PAYMENTS OR ADDITIONAL PAYMENTS UNDER
THE AGREEMENT, OR ANY OTHER INSTRUMENT CONTEMPLATED HEREBY OR
THEREBY.
ARTICLE IV
GENERAL CONDITIONS
4.1 No Assignment of Trust Estate. The County will make no assignment, by operation of
law or otherwise, nor convey or otherwise transfer, the Land or any interest therein or part
thereof or any other part of the Trust Estate (except as provided in Section 2.7 hereof) without
the prior written consent of the Trustee and the Beneficiary as hereinafter provided. Any
assignment, conveyance or transfer of the Land or any part thereof or any other part of the Trust
Estate without such prior written consent shall constitute a default hereunder, giving rise to all of
the remedies herein provided for an Event of Default.
4.2 The Deed of Trust Trustee. The Deed of Trust Trustee shall be under no duty to take any
action hereunder except as expressly required, or to perform any act which would involve him in
expense or liability or to institute or defend any suit in respect hereof, unless properly
indemnified to its satisfaction by the County or the Beneficiary. All reasonable expenses,
charges, counsel fees and other disbursements incurred by the Trustee in and about the
administration and execution of the trusts hereby created, and the performance of its duties and
powers hereunder, shall be secured by this Deed of Trust prior to the indebtedness represented by
10
the Advance, and shall bear interest equal to the prime interest rate of Beneficiary, as announced
from time to time.
4.3 Substitution of Trustee. If, for any reason, the Beneficiary shall elect to substitute for the
trustee herein named (or for any successor to said trustee), the Beneficiary shall have the right to
appoint such successor trustee(s) by duly acknowledged written instruments, and each successor
trustee immediately upon recordation of the instrument so appointing him shall become
successor in title to the Trust Estate for the uses and purposes of this Deed of Trust, with all the
powers, duties and obligations conferred on the Trustee in the same manner and to the same
effect as though he were named herein as the Trustee.
4.4 Terms. The singular used herein shall be deemed to include the plural; the masculine
deemed to include the feminine and neuter; and the named parties deemed to include their heirs,
successors and assigns. The term `Beneficiary" shall include any payee of the indebtedness
hereby secured or any transferee thereof whether by operation of law or otherwise.
4.5 Notices. Unless otherwise provided herein, all demands, notices, approvals, consents,
requests, opinions and other communications hereunder shall be in writing and shall be deemed
to have been given when delivered in person or mailed by first class registered or certified mail,
postage prepaid, addressed as follows:
If to the County:
If to the Beneficiary:
If to the Trustee:
County of Iredell
200 South Center Street
Statesville, North Carolina 28687
Attn: Director of Finance and Administration
Bank of America, N.A.
Middle Market Banking
NC7-166-09-03
3100 Tower Boulevard, Suite 910
Durham, North Carolina 27707
PRLAP, Inc.
Portfolio Admin.
1400 Best Plaza Drive
P. O. Box 26865
Richmond, Virginia 23227
The County, Beneficiary and the Trustee may, by notice given hereunder, designate any further
or different addresses to which subsequent demands, notices, approvals, consents, requests,
opinions or other communications shall be sent or persons to whose attention the same shall be
directed.
4.6 Severability of Provisions. Invalidation of any one or more of the provisions of
this Deed of Trust shall in no way affect any of the other provisions hereof, which shall remain
in full force and effect.
4.7 Headings. The captions and headings herein are inserted only as a matter of
convenience and for reference and in no way define, limit, or describe the scope of this Deed of
Trust nor the intent of any provision hereof.
IN WITNESS WHEREOF, the County has executed this Deed of Trust under seal as of
the above written date.
COUNTY OF IREDELL, NORTH CAROLINA
By:
Stephen D. Johnson
Attest: Chairman of the Board of Commissioners
MW
Jean C. Moore
Clerk to the Board of
Commissioners
EXHIBIT A
THE LAND
The property located in Statesville, Iredell County, North Carolina more fully described as
follows:
EXHIBIT B
PERMITTED ENCUMBRANCES
All matters shown on Schedule B to the title policy.
BANK OF AMERICA, N.A.
AS THE LENDER
and
COUNTY OF IREDELL, NORTH CAROLINA
as the County
INSTALLMENT FINANCING AGREEMENT
(2004 Department of Social Services Building)
Dated October 28, 2004
This instrument has been preaudited in the manner required by the Local Government Budget
and Fiscal Control Act.
Director of Finance and Administration
County of Iredell, North Carolina
12
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section1.1. Definitions...................................................................................................................3
ARTICLE II
REPRESENTATIONS AND COVENANTS
Section 2.1. Representations and Covenants by the County...........................................................5
Section 2.2. General Tax Covenants...............................................................................................7
Section 2.3. Interest Rate and Payment Adjustment.......................................................................7
ARTICLE III
IMPLEMENTATION OF THE PROJECT
Section 3.1. Purpose of Agreement ...........................................
Section 3.2. Agreement to Implement Project ..........................
Section 3.3. Payment of Project Costs ......................................
Section3.4. Title.......................................................................
Section 3.5. Construction of Project .........................................
Section 3.6. Disclaimers of the Lender .....................................
Section 3.7. Installation of County's Personal Property...........
ARTICLE IV
PAYMENTS; REPAYMENTS; MAINTENANCE; INSURANCE; TAXES
Section 4.1.
Financing of Project..................................................................................................I
1
Section4.2.
Term..........................................................................................................................1
l
Section4.3.
Payments...................................................................................................................I
l
Section4.4.
Prepayments..............................................................................................................12
No Additional Waiver Implied by One Waiver.....
Section 4.5.
Appropriations of Payments.....................................................................................12
Section4.6.
Insurance...................................................................................................................12
Section 4.7.
Expenses; Taxes........................................................................................................13
Section 4.8.
Proof of Payment of Taxes, Other Charges..............................................................13
Section 4.9.
No Encumbrances.....................................................................................................13
Section 4.10.
Performance by the Lender of the County's Responsibilities................................14
Section 4.11.
Financial Statements...............................................................................................14
Section 4.12.
Maintenance, Care and Use....................................................................................14
Section4.13.
Inspection................................................................................................................14
Section 4.14.
Limited Obligation of the County...........................................................................14
ARTICLE V
DAMAGE, DESTRUCTION OR CONDEMNATION
Section 5.1. Damage or Destruction.............................................................................................15
Section 5.2. Condemnation; Loss of Title....................................................................................15
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1.
Events of Default ...................................................
Section 6.2.
Remedies................................................................
Section 6.3.
No Deficiency Judgment ........................................
Section 6.4.
Reinstatement after Event of Default .....................
Section 6.5.
No Remedy Exclusive ............................................
Section 6.6.
No Additional Waiver Implied by One Waiver.....
Section 6.7.
Attorneys' Fees and Other Expenses .....................
ARTICLE VII
ASSIGNMENT
Section 7.1. Assignment by the Lender........................................................................................18
Section 7.2. Assignment by the County........................................................................................19
Section 8.1.
Section 8.2.
Section 8.3.
Section 8.4.
Section 8.5.
Section 8.6.
Section 8.7.
Section 8.8.
ARTICLE VIII
MISCELLANEOUS
Notices......................................................................................................
Severability...............................................................................................
Successors and Assigns.............................................................................
ApplicableLaw.........................................................................................
Indemnification.........................................................................................
Counterparts..............................................................................................
EntireAgreement......................................................................................
Consent.....................................................................................................
Exhibit A — Description of Project............................................................................................ A-1
Exhibit B — Schedule of Installment Payments........................................................................ B-1
THIS INSTALLMENT FINANCING AGREEMENT dated October 28, 2004, is entered into
between Bank of America, N.A., a national banking association, and the County of Iredell, North
Carolina, a political subdivision organized and existing under the Constitution and laws of the
State of North Carolina.
WITNESSETH:
WHEREAS, the County is a duly and validly created, organized and existing political
subdivision under and by virtue of the Constitution and laws of the State of North Carolina; and
WHEREAS, the County has the power, pursuant to Section 160A-20 of the North
Carolina General Statutes, to enter into installment contracts to finance the purchase of real or
personal property or the construction or renovation of fixtures or improvements on real property;
and
WHEREAS, the Lender desires to advance certain funds to enable the County to
undertake the Project, as hereinafter defined; and
WHEREAS, the County desires to obtain the advance from the Lender pursuant to the
terms and conditions hereinafter set forth; and
WHEREAS, the obligation of the County to make certain payments, as herein provided,
shall not constitute a pledge of the faith and credit of the County within the meaning of any
constitutional debt limitation; and
WHEREAS, the County has received approval of this Agreement and its plan of
financing from the North Carolina Local Government Commission; and
WHEREAS, the County has held a public hearing with respect to the contract providing
for the financing of the Project; and
WHEREAS, in order to further secure the obligations of the County hereunder, the
County has executed the Deed of Trust, as hereunder defined, to a trustee named therein, for the
benefit of the Lender; and
WHEREAS, no deficiency judgment may be rendered against the County in any action
for breach of a contractual obligation under this Agreement, and the taxing power of the County
is not and may not be pledged in any way, directly or indirectly or contingently, to secure any
moneys due under this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter
contained, the parties hereto do hereby agree as follows:
2
DEFINITIONS
Definitions. The terms defined in this Article shall, for all purposes of this Agreement, have the
meanings in this Article specified, unless the context clearly indicates some other meaning:
"Additional Payments" means payments (other than Installment Payments) required to be
paid by the County hereunder, including in particular payments under Section 4.7 hereof.
"Advance" means the amount not exceeding $6,671,075 to be advanced by the Lender to
enable the County to finance the Implementation of the Project pursuant to the terms of this
Agreement.
"Agreement" means this Installment Financing Agreement and any and all amendments
or supplements hereto.
"Basic Agreements" means this Agreement and the Deed of Trust.
"Business Day" means a day (a) on which the Lender in the City of Charlotte, North
Carolina is open for the purpose of conducting a commercial banking business and (b) on which
the New York Stock Exchange is open for trading.
"County" means the County of Iredell, North Carolina, a political subdivision organized
and existing under the laws of the State of North Carolina, acting by and through its Governing
Body.
"Code" means the Internal Revenue Code of 1986, as amended, as it applies to this
Agreement and final regulations and all proposed regulations which, if adopted in their present
form would be retroactive and apply to this Agreement. Reference herein to any specific
provision of the Code shall be deemed to include any successor provision thereto.
"Deed of Trust" means the Deed of Trust and Security Agreement dated as of the date
hereof from the County to the deed of trust trustee named therein securing its obligations
hereunder for the purchase and improvement of the property more particularly described in the
Deed of Trust and on Exhibit A thereto.
"Environmental Laws" means any federal, state or local law, rule, regulation, permit,
order or ordinance relating to the protection of the environment or human health or safety now or
hereafter in effect, including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended (42 U.S.C. Section 9601, et seq.) (together with
the regulations promulgated thereunder, "CERCLA'), the Resource Conservation and Recovery
Act, as amended (42 U.S.C. Section 6901, et seq.) (together with the regulations promulgated
thereunder, "RCRA" ), the Oil Pollution Act of 1990 (33 U.S.C. Section 2701, et seq.) (together
with the regulations promulgated thereunder, "OPA'), the Emergency Planning and Community
Right -to -Know Act, as amended (42 U.S.C. Section 11001, et seq.) (together with the regulations
promulgated thereunder, "Title IIF), the Clean Water Act, as amended (33 U.S.C. Section 1321,
et seq.) (together with the regulations promulgated thereunder, "CWA'), the Clean Air Act, as
amended (42 U.S.C. Section 7401, et seq.) (together with the regulations promulgated
thereunder, "CAA') and the Toxic Substances Control Act, as amended (15 U.S.C. Section 2601
et seq.) (together with the regulations promulgated thereunder, "TSCA'), and any state or local
similar laws and regulations and any so-called local, state or federal "superfund" or "superlien"
law.
"Event of Default" shall have the meaning set forth in Section 6.1 hereof
"Governing Body" means the governing body of the County.
"Hazardous Materials" means any flammable explosives, radioactive materials,
hazardous materials, hazardous wastes, hazardous or toxic substances, or related materials,
asbestos or any materials containing asbestos or petroleum, petroleum hydrocarbons, or any
other substance or material as defined by (or for purposes of) any federal, state or local
environmental law, ordinance, rule or regulation including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended
(42 U.S.C. sections 9601 et seq.), the Hazardous Materials Transportation Act, as amended (49
3
U.S.C. sections 1801 et seq.), the Resource Conservation and Recovery Act, as amended (42
U.S.C. sections 9601 et seq.), and the regulations adopted and publications promulgated pursuant
thereto. Hazardous Materials shall not include materials used by the County in connection with
its operation of any of its public works or water/sewer system, provided such materials are
properly handled and contained in accordance with applicable federal and state laws.
"Implement," "Implementing," "Implementation," or any other grammatical form
thereof, when used in connection with the Project, means design, acquire, renovate, construct,
install and equip, as the case may be.
"Installment Payments" means the payments payable by the County pursuant to
Section 4.3 during the Term.
"Lender" means Bank of America, N.A., a national banking association, and any
successor or assignee thereof.
"LGC" means the North Carolina Local Government Commission, a division of the
North Carolina Department of State Treasurer.
"Manager" means the officer of the County charged from time to time with preparing the
annual budget of the County.
"Moody's" means Moody's Investors Service, Inc. a New York corporation, its
successors and assigns.
"Net Proceeds" means the gross proceeds from any insurance recovery, condemnation or
eminent domain award or amounts recovered by the County under Section 3.5(g) hereof
remaining after payment of all expenses (including attorneys' fees) incurred in the collection of
such gross proceeds.
"Payment of Installment Payments" means payment in full of all Installment Payments
due and to become due to and including the final scheduled payment date.
"Permitted Encumbrances" means collectively those title exceptions listed on Exhibit B
to the Deed of Trust.
"Project," whether one or more, means the transaction or set of transactions more
particularly described on Exhibit A attached hereto and all substitutions therefor, replacements
thereof and additions thereto, and all reasonably necessary or convenient associated equipment
and other personal property or fixtures, such description as may be amended from time to time.
"Project Costs" shall be deemed to include payment of or reimbursement for the
following items:
(a) the actual cost of labor, materials, machinery and equipment as payable to
contractors, builders and materialmen in connection with the acquisition, construction,
renovation, installation and equipping of the Project;
(b) governmental charges levied or assessed during installation upon the Project or on
any property acquired therefor, and premiums on insurance in connection with the Project during
construction;
(c) fees and expenses of architects and engineers for estimates, surveys and other
preliminary investigations, preparation of plans, drawings and specifications and supervision of
construction, as well as for the performance of all other duties of architects and engineers in
relation to the construction of the Project;
(d) costs of issuance and expenses of administration, supervision and inspection
properly chargeable to the Project, legal expenses and fees, financing charges and all other items
not elsewhere specified in this section incident to the acquisition, construction, renovation,
installation and equipping of the Project;
(e) all other costs which are considered to be a part of the costs of the construction,
acquisition, installation and equipping of the Project, in accordance with generally accepted
4
accounting principles and which will not affect the exclusion from gross income for federal
income tax purposes of the designated interest component of Installment Payments payable by
the County hereunder, including sums required to reimburse the County for advances made by
the County that are properly chargeable to the acquisition, construction, installation and
equipping of the Project, including the interest component of Installment Payments prior to the
Completion Date of the Project.
"Rate Adjustment Event" means (1) any determination by the Internal Revenue Service,
any federal administrative agency or any court (a) that the County has taken an action, or failed
to take an action, with the result that the interest components of Installment Payments are
includable in gross income for federal income tax purposes, or (b) that the County's obligations
to pay Installment Payments are not "qualified tax-exempt obligations" within the meaning of
Code Section 265 as a result of (i) any action the County takes, or fails to take, or (ii) any
representation made by the County in this Agreement being a misrepresentation, or (2) (a) its
general obligation bond rating by S&P falls below A+ or (b) its general obligation bond rating by
Moody's falls below Al.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors and assigns.
"Site," whether singular or plural, means that certain parcel or those certain parcels of
land, together with all fixtures, improvements and appurtenances thereon now or hereafter
existing, as described in Exhibit A to the Deed of Trust.
"State" means the State of North Carolina.
"Term" means the duration of this Agreement and the period during which payments are
to be made hereunder, such Term now scheduled to terminate on the Termination Date, unless
such date is extended pursuant to Section 4.2.
"Termination Date" means October 31, 2019, unless such date is extended pursuant to
Section 4.2 hereof.
"Trustee" means the trustee named in the Deed of Trust.
Section 1.2. Rules of Construction. The following rules shall apply to the construction
of this Agreement unless the context otherwise requires:
(a) Words importing the singular number shall include the plural number and vice
versa.
(b) Words importing the prepayment or calling for prepayment of the County's
obligations hereunder shall not be deemed to refer to or connote the payment of the County's
obligations hereunder at their stated maturity or payment dates.
(c) Unless otherwise indicated, all references herein to particular Articles or Sections
are references to Articles or Sections of this Agreement.
(d) The headings and Table of Contents herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor shall they affect its meaning,
construction or effect.
REPRESENTATIONS AND COVENANTS
Representations and Covenants by the County. The County makes the following representations
and covenants:
the County is a duly and validly created, organized and existing political subdivision under and
by virtue of the Constitution and laws of the State of North Carolina;
the Implementation of the Project is essential in order to permit the County to carry out the
public functions that it is authorized by law to perform. The County anticipates an ongoing need
5
for the Project and the Project will serve functions which are essential to the proper, efficient and
economic operation of the County;
the County has full power and authority to enter into the Basic Agreements and all other
documents to which it is a party to perform the transactions contemplated thereby, to carry out its
obligations thereunder and, by proper action, has duly authorized, executed and delivered such
Basic Agreements and other documents;
the County is not in default in the payment of the principal of or interest on any of its
indebtedness for borrowed money and is not in default under any instrument under or subject to
which any indebtedness for borrowed money has been incurred, and, to the best of its
knowledge, no event has occurred and is continuing that with the lapse of time or the giving of
notice, or both, would constitute or result in an event of default thereunder;
the County is not in default under or in violation of, and the execution, delivery and compliance
by the County with the terms and conditions of the Basic Agreements, to the best of its
knowledge, will not conflict with or constitute or result in a default under or violation of, (1) any
existing law, rule or regulation applicable to the County, or (2) any indenture, mortgage, deed of
trust, lien, lease, contract, note, order, judgment, decree or other agreement, instrument or
restriction of any kind to which the County or any of its assets is subject, and no event has
occurred and is continuing that with the lapse of time or the giving of notice, or both, would
constitute or result in such a default or violation;
to the best of its knowledge, no further approval, consent or withholding of objection on the part
of any regulatory body or any official, Federal, state or local, is required in connection with the
execution or delivery of or compliance by the County with the terms and conditions of any
agreement with respect to the Project to which it is a party;
there are no liens or encumbrances encumbering any of the real or personal property which is
part of the Project other than the Deed of Trust and the Permitted Encumbrances (as defined in
the Deed of Trust);
there is no litigation at law or in equity or any proceeding before any governmental agency
involving the County pending or, to the knowledge of the County, threatened in which any
liability of the County is not adequately covered by insurance or in which any judgment or order
would have a material adverse effect upon the activities or assets of the County or that would
affect the Implementation of the Project, the validity of the Basic Agreements or the performance
of the County's obligations thereunder;
to the best of the County's knowledge, the Site is not now and has not ever been used to
generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce or process
Hazardous Materials and that no Hazardous Materials have ever been installed on such Site
except as otherwise disclosed in the Environmental Report dated April, 2002. The County
covenants that such Site shall be kept free of Hazardous Materials and shall not be used to
generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce or process
Hazardous Materials, except in connection with the normal construction, maintenance and
operation of the Project and in compliance with all Environmental Laws. The County shall not
cause or permit as a result of any intentional or unintentional act or omission on the part of the
County or any lessee, tenant, subtenant, licensee, guest, invitee, employee, agent or contractor,
the installation of Hazardous Materials in the Project or a release of Hazardous Materials onto
the Site or suffer the presence of Hazardous Materials on the Site, except in connection with the
normal construction, maintenance and operation of the Project and in compliance with all
Environmental Laws. The County shall comply with and ensure compliance by all sublessees,
tenants, subtenants, licensees, guests, invitees, employees, agents and contractors with all
applicable federal, state and local laws, ordinances, rules and regulations with respect to
Hazardous Materials and shall keep the Site free and clear of any liens imposed pursuant to such
laws, ordinances, rules and regulations. The County has not received any notice from any
governmental agency, entity or any other person who receives any notices from any
governmental agency, entity or any other person with regard to Hazardous Materials on, from or
affecting the Project. In the event the County does receive any such notices, the County shall
immediately notify the Lender. The County, at no expense to the Lender, shall conduct and
complete all investigations, studies, sampling and testing and all remedial, removal and other
actions necessary to comply with all applicable Environmental Laws; and
6
the County shall be responsible for any and all costs of the Project in excess of the Advance
General Tax Covenants. The County will not take any action, if any such action would adversely
affect the exclusion from gross income of the interest components of the Installment Payments
under Section 103 of the Code. The County further covenants to do and perform all acts and
things permitted by law and necessary to assure that the interest components of the Installment
Payments be and remain excluded from gross income of the Lender for federal income tax
purposes pursuant to Section 103 of the Code. The County will not directly or indirectly use or
permit the use of any moneys constituting an Installment Payment hereunder, or take or omit to
take any other action, that would cause the Agreement to be an "arbitrage bond" within the
meaning of Section 148(a) of the Code. The County further covenants that the Agreement is not
a "private activity bond" as defined in Section 141 of the Code.
Without limiting the generality of the foregoing, the County agrees that there shall be
paid from time to time all amounts required to be rebated to the United States of America
pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury
Regulations as may be applicable to the Agreement from time to time. This covenant shall
survive the payment in full of all obligations under this Agreement.
Notwithstanding any provision of this Section 2.2, if the County shall provide to the
Lender an opinion of counsel to the effect that any action required under this Section 2.2 is no
longer required, or to the effect that some further action is required, to maintain the exclusion
from gross income of the interest components of the Installment Payments under Section 103 of
the Code, the County and the Lender may rely conclusively on such opinion in complying with
the provisions hereof.
The County hereby represents that it reasonably expects that the County, together with all
subordinate entities thereof and any other entities which issue obligations on behalf of the
County, will not issue more than $10,000,000 of tax-exempt obligations (other than private
activity bonds, except for qualified 501(c)(3) bonds) during the calendar year in which this
Agreement is executed. The County hereby designates its obligations under this Agreement as
"qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code.
Interest Rate and Payment Adjustment. (a) Upon each Rate Adjustment Event, the schedule for
payment of Installment Payments shall change retroactively to the date of such Rate Adjustment
Event. From and after a Rate Adjustment Event, the annualized interest rate used to calculate the
schedule of Installment Payments shall change to such rate as the Lender may reasonably
determine shall be appropriate to provide the Lender with the same tax equivalent yield it
enjoyed prior to the Rate Adjustment Event, provided, however, that the annualized interest rate
increase resulting from an occurrence under clause (2) of the definition of Rate Adjustment
Event shall be .5%. The Advance shall be reamortized over the remaining originally -scheduled
repayment term, in substantially equal principal payments plus interest, at the new interest rate.
The Lender shall promptly prepare a substitute Exhibit B reflecting the new payment schedule
and deliver a copy of same to the County and the LGC.
(b) It is further expressly provided that the County shall additionally pay to the
Lender, any taxes, interest, penalties or other charges assessed against or payable by such
beneficiary and attributable to a Rate Adjustment Event, notwithstanding the repayment of the
entire Amount Advanced or any transfer or assignment by Lender of this Agreement.
IMPLEMENTATION OF THE PROJECT
Purpose of Agreement. The purpose of this Agreement is to provide for the financing of the
Implementation of the Project by the County.
Agreement to Implement Project. The County hereby agrees to Implement the Project, subject to
the terms and conditions of this Agreement. In order to effectuate the purposes of this
Agreement, the County shall make, execute, acknowledge and deliver, or cause to be made,
executed, acknowledged and delivered, all contracts, orders, receipts, writings and instructions,
in the name of the County or otherwise, with or to other persons, firms or corporations, and in
general do or cause to be done all such other things as may be requisite or proper in order to
Implement the Project and fulfill the obligations of the County under this Agreement. The
7
County has complied, or will comply, with all applicable public bidding requirements with
respect to the Project, including, without limitation, Article 8 of Chapter 143 of the General
Statutes of North Carolina.
Payment of Project Costs. The County shall pay all Project Costs.
Title. Title to the Site and any and all additions, repairs, replacements or modifications thereto
shall be in the County from and after the date of execution and delivery of this Agreement.
Simultaneously with the execution and delivery of this Agreement, the County shall deliver the
Deed of Trust in form satisfactory to the Lender. Upon payment in full of all of the County's
obligations hereunder, including all other payments due hereunder, the Lender shall cancel the
Deed of Trust and this Agreement will terminate.
Construction of Project. In the event Implementation of the Project shall include the
construction of improvements to or on a Site, the County shall comply with and agree to the
following:
Completion Date. The County agrees to use its best efforts to Implement the Project on or before
December 31, 2005 (the "Completion Date"). The County may make such changes in the
Project as it deems necessary or appropriate to cause the Project to be completed for a cost
within the Advance; provided, however, that no change may be made in the Project which would
result in its use for other than the intended purpose as described in Exhibit A. In the event of a
change in the Project which would render materially inaccurate the description in Exhibit A
hereto, the County shall provide to the Lender a revised Exhibit A for attachment hereto which
accurately reflects the Project, as so changed.
Construction. The County shall comply with the provisions of Article 8 of Chapter 143 of the
General Statutes of North Carolina and enter into one or more contracts with a contractor or
contractors relating to the construction and renovation of the Project (whether one or more, the
"Construction Contract". The County shall cause the construction to be carried on continuously
in accordance with the plans and specifications and with all applicable ordinances and statutes,
and in accordance with the requirements of all regularly constituted authorities having
jurisdiction over same. The County shall require that all work be done in a workman -like
manner and that only new materials be utilized. The County shall cause the Project to be
constructed entirely on the Site and shall ensure (i) that the Project does not encroach upon or
overhang any easement or right-of-way and (ii) that the Project, when erected, will be wholly
within any applicable building restriction lines, however established, and will not violate
applicable zoning, land use or other restrictions or applicable protective covenants. The County
shall cause all utility lines, septic systems and streets serving the Site to be completed in
accordance with health department standards and other applicable regulations of any
governmental agency having jurisdiction.
Right of Entry and Inspection. The Lender and its representatives and agents shall have the right
to enter upon the Site and inspect the Project and the improvements thereto during normal
business hours with reasonable notice, during and after construction, and the County will cause
any contractor or sub -contractor to cooperate with the Lender and its representatives and agents
during such inspections. The Lender shall have the right to review the plans and specifications
and other construction documents relating to the Project.
No right of inspection or approval contained herein shall be deemed to impose upon the
Lender any duty or obligation whatsoever to undertake any inspection or to make any approval.
No inspection made or approval given by the Lender shall be deemed to impose upon the Lender
any duty or obligation whatsoever to identify or correct any defects in the improvements or to
notify any person with respect thereto, and no liability shall be imposed upon the Lender and no
warranties (either express or implied) are made by the Lender as to the quality or fitness of any
improvement, any such inspection and approval being made solely for the benefit of the Lender.
Completion of Construction.
The County represents that, based upon (A) its examination of the Site, the Construction
Contract and the related plans and specifications, (B) estimated construction and equipment costs
provided by licensed architects and engineers, and (C) the anticipated configuration of the
Project, the Project can be constructed and equipped for a total price within the total amount of
9
funds expected to be available for such purposes. The County shall use its best efforts to cause
the construction of the Project to be completed by the Completion Date, unforeseeable delays
beyond the reasonable control of the County only excepted.
Prior to commencement of construction of the Project, the County shall deliver to the Lender (A)
environmental assessments conducted at the Site, and (B) a flood hazard certificate for the Site.
Upon completion of the Project, the County shall deliver to the Lender, (A) a certificate (the
"Completion Certificate") of the County stating the fact and date of such completion and stating
that all of the costs of construction have been determined and paid (or that all of such costs have
been paid less specified claims which are subject to dispute and for which a retention in the
escrow fund, if any, is to be maintained in the full amount of such claims until such dispute is
resolved), (B) a certificate of a duly authorized officer or agent of the architects, engineers or
supervising contractors selected and hired by the County in connection with the construction of
the Project stating the fact and date of such completion, and (C) proof of the insurance coverage
required by this Agreement.
Compliance with Laws and Regulations and Securingof f Regulatory Approvals. The County will
comply with all applicable laws, regulations and requirements of any governmental authority
having jurisdiction over the Project and has secured, or caused to be secured, all regulatory
approvals that are available at this time and necessary for the construction of the Project. The
County will secure, or cause to be secured, any additional regulatory approvals if required as
construction of the Project progresses.
Payment and Performance Bonds. Each contractor of the Project shall be required by the County
to furnish a performance bond and a separate labor and materials payment bond as required by
North Carolina General Statutes, Article 3, Chapter 44A, copies of which shall be provided to the
Lender.
In the event of any material default by a contractor, or in the event of a material breach of
warranty with respect to any materials, workmanship or performance, the County shall promptly
proceed, either separately or in conjunction with others, to pursue diligently its remedies against
such contractor and/or against each surety of any bond securing the performance of the contract
with such contractor. The Net Proceeds of any amounts recovered by way of damages, refunds,
adjustments or otherwise in connection with the foregoing, remaining after deduction of
expenses incurred in such recovery (including, without limitation, attorneys' fees and costs), and
after reimbursement to the County of any amounts theretofore paid by the County and not
previously reimbursed to the County for correcting or remedying the default or breach of
warranty or nonperformance which gave rise to the proceedings against such contractor shall be
applied toward prepayment of the Installment Payments. The Net Proceeds of any performance
or payment bond or insurance policy required by this paragraph shall likewise be applied toward
prepayment of the Installment Payments.
Contractor's General Public Liability and Property Damage Insurance. Each contractor shall be
required by the County to procure and maintain standard form comprehensive general public
liability and property damage insurance, at its own cost and expense, during the duration of such
contractor's contract, in the amount of at least $1,000,000 bodily injury and property damage
liability combined single limit each occurrence/annual aggregate. Such policies shall include the
County and the Lender as additional named insureds, and shall include a provision prohibiting
cancellation or termination without 30 days' prior notice by certified mail to the Lender. A
certificate evidencing such coverage shall be provided to the County or, if such insurance is
provided by a private carrier, a completed certificate of insurance, in form acceptable to the
County, shall be provided to the County with respect to each contractor engaged. Such insurance
shall provide protection from all claims for bodily injury, including death, property damage and
contractual liability, products/completed operations, broad form property damage and XCU
(explosion, collapse and underground property damage), where applicable.
Contractor's Builder's Risk Completed Value Insurance. The County will purchase and
maintain or cause each contractor to purchase and maintain property insurance (builder's risk) on
its portion of the Implementation of the Project (excluding contractor's tools and equipment) at
the full and insurable value thereof. This insurance (i) shall insure against "all risk" subject to
standard policy conditions and exclusions, (ii) shall include the County and the Lender as
additional insureds, and (iii) shall include a provision prohibiting cancellation or termination
9
without 30 days prior written notice by certified mail to the Lender. Each contractor shall
purchase and maintain similar property insurance for portions of the work stored off the Site or
in transit when such portions of the work are to be included in an application for payment. Each
contractor shall be responsible for the payment of any deductible amounts associated with this
insurance.
Contractor's Workers' Compensation Insurance. Each contractor shall be required to procure
and maintain, at its own cost and expense, worker's compensation insurance during the term of
its engagement, covering its employees working thereunder. Such insurance, if issued by a
private carrier, shall contain a provision prohibiting cancellation or termination without 30 days'
prior notice by certified mail to the County and the Lender. A certificate evidencing such
coverage shall be provided to the County and the Lender or, if such insurance is provided by a
private carrier, a completed certificate of insurance, in form acceptable to the County and the
Lender, shall be provided to the County and the Lender with respect to each contractor engaged.
Filin¢ with the Lender. The County shall cause copies of all performance bonds and insurance
contracts or approved certificates thereof to be delivered to the Lender in a timely manner and in
such form as to certify compliance with the provisions of the paragraphs referred to herein.
Disclaimers of the Lender. The County acknowledges and agrees that the designs for the
Project, if any, have not been made by the Lender, and the Lender has not supplied any plans or
specifications with respect thereto and that the Lender (a) is not a manufacturer of, nor a dealer
in, any of the component parts of the Project or similar projects; (b) has not made any
recommendation, given any advice nor taken any other action with respect to (i) the choice of
any supplier, vendor or designer of, or any other contractor with respect to, the Project or any
component part thereof or any property or rights relating thereto, or (ii) any action taken or to be
taken with respect to the Project or any component part thereof or any property or rights relating
thereto at any stage of the construction thereof, (c) has not at any time had physical possession of
the Project or any component part thereof or made any inspection thereof or any property or
rights relating thereto; and (d) has not made any warranty or other representation, express or
implied, that the Project or any component part thereof or any property or rights relating thereto
(i) will not result in or cause injury or damage to persons or property, (ii) has been or will be
properly designed, or will accomplish the result which the County intends therefor, or (iii) is safe
in any manner or respect.
THE LENDER MAKES NO EXPRESS OR IMPLIED WARRANTY OR
REPRESENTATION OF ANY KIND WHATSOEVER WITH RESPECT TO THE PROJECT
OR ANY COMPONENT PART THEREOF TO THE COUNTY OR IN REGARD TO ANY
OTHER CIRCUMSTANCE WHATSOEVER WITH RESPECT THERETO, INCLUDING
BUT NOT LIMITED TO ANY WARRANTY OR REPRESENTATION WITH RESPECT TO:
THE MERCHANTABILITY OR THE FITNESS OR SUITABILITY THEREOF FOR ANY
PURPOSE; THE DESIGN OR CONDITION THEREOF; THE SAFETY, WORKMANSHIP
OR QUALITY THEREOF; COMPLIANCE THEREOF WITH THE REQUIREMENTS OF
ANY LAW, RULE, SPECIFICATION OR CONTRACT PERTAINING THERETO; ANY
LATENT DEFECT; THE TITLE TO OR INTEREST OF THE LENDER THEREIN; THE
ABILITY THEREOF TO PERFORM ANY FUNCTION; THAT THE ADVANCE WILL BE
SUFFICIENT (TOGETHER WITH ANY OTHER AVAILABLE FUNDS OF THE COUNTY)
TO PAY THE COST OF IMPLEMENTING THE PROJECT; OR ANY OTHER
CHARACTERISTICS OF THE PROJECT, IT BEING AGREED THAT ALL RISKS
RELATING TO THE PROJECT, THE COMPLETION THEREOF OR THE TRANSACTIONS
CONTEMPLATED HEREBY ARE TO BE BORNE BY THE COUNTY, AND THE
BENEFITS OF ANY AND ALL IMPLIED WARRANTIES AND REPRESENTATIONS OF
THE LENDER ARE HEREBY WAIVED BY THE COUNTY.
Installation of County's Personal Property. The County may at any time and from time to time,
in its sole discretion and at its own expense, install or permit to be installed other items of
equipment or other personal property in or upon any portion of the Project and all such items
shall be deemed to be a part of the Project. Such property may be modified or removed by the
County at any time, provided that the County shall repair and restore any and all damage to the
Project resulting from the installation, modification or removal of any such items.
10
PAYMENTS; REPAYMENTS; MAINTENANCE; INSURANCE; TAXES
Financing of Project. The Lender hereby agrees to finance the Project for the County and the
County agrees to pay the Lender for such financing, upon the terms and conditions of this
Agreement. The Lender shall deliver the Advance to the County on the date hereof. The County
will deposit the Advance in a separate account of its General Fund with an account with the
Lender, and shall invest the Advance in investments that qualify under N.C.G.S. § 159-30.
Term. The Term shall commence on the date of delivery of this Agreement and shall terminate
upon the earlier of the following:
such date as all Installment Payments and Additional Payments shall be paid; and
such date as all proceeds derived from (i) a foreclosure sale of the Trust Estate under the Deed of
Trust and (ii) the exercise of the Lender's rights as a secured party under the North Carolina
Uniform Commercial Code have been applied by the Lender to the payment, in whole or in part,
of the Installment Payments and any Additional Payments.
Termination of this Agreement shall terminate all duties, obligations, liabilities and
responsibilities of the County under this Agreement (other than the obligation to indemnify the
Lender and the LGC pursuant to Section 9.5 hereof, and the obligation to rebate money to the
United States of America pursuant to Section 2.2 hereof).
Payments. (a) Subject to Section 4.5, the County shall pay to the Lender Installment Payments
in accordance with the schedule set forth on Exhibit B attached hereto and, by this reference,
incorporated herein as if fully set forth herein. The interest component of the Installment
Payment shall be calculated at the rate of 3.599%, calculated on the basis of actual days elapsed
over a 360 -day year. Such Installment Payments shall be denominated in components of
principal and interest, in the amounts, and at the times set forth in such Exhibit B. Each such
Installment Payment shall be paid in lawful money of the United States of America at the
Lender's office at the address specified in Section 9.1 hereof or as may be otherwise directed by
the Lender in writing. In the event the County fails to make any Installment Payment when due,
interest with respect to the principal component of such Installment Payment shall continue to
accrue until paid at the applicable rate per year as set forth on Exhibit B.
(b) The obligation of the County to make each Installment Payment as it becomes due
is a current obligation of the County and each Installment Payment is a current expense of the
County.
(c) Subject to Section 4.5 and Section 4.14 hereof, the obligation of the County to
make Installment Payments to the Lender and to perform and observe all other covenants,
conditions and agreements hereunder shall be absolute and unconditional, irrespective of any
defense or any rights of setoff, recoupment or counterclaim it might otherwise have against the
Lender. Subject to prepayment in full as provided herein and subject to Section 4.5 and Section
4.14 hereof, the County shall not suspend or discontinue any such payment or fail to observe and
perform any of its other covenants, conditions and agreements hereunder for any cause,
including without limitation any acts or circumstances that may constitute an eviction or
constructive eviction, failure of consideration, or failure of title to any part or all of the Project,
or commercial frustration of purpose, or any damage to or destruction or condemnation of all or
any part of the Project, or any change in the tax or other laws of the United States of America,
the State of North Carolina or any political subdivision of either, or any failure of a vendor or the
Lender to observe and perform any covenant, condition or agreement, whether express or
implied, or any duty, liability or obligation arising out of or in connection with this Agreement.
The County assumes and shall bear the entire risk of loss and damage to the Project from any
cause whatsoever, it being the intention of the parties that the Installment Payments shall be
made in all events unless the obligation to make such Installment Payments is terminated as
otherwise expressly provided herein. The County may, after giving to the Lender ten (10) days'
notice of its intention to do so, at its own expense and in its own name or, with the consent of the
Lender which consent shall not be unreasonably withheld, in the name of the Lender, prosecute
or defend any action or proceeding or take any other action involving third persons which the
County deems reasonably necessary in order to secure or protect any of its rights hereunder or
the rights of the Lender; and in such event the Lender shall cooperate fully with the County and
take all necessary action to effect the substitution of the County for the Lender in any such action
or proceeding if the County shall so request; provided, however, if such consent is refused for
any reason, the Lender shall assign, to the extent permitted by law, all of its rights, title and
interest in such cause of action or defense to the County and the Lender shall cooperate fully to
effectuate such assignment and take all necessary action to effect the substitution of the County
for the Lender in any such action or proceeding.
(d) Any Installment Payment due on a day not a Business Day shall be made on the
next Business Day with the same force and effect as if made on such day.
Prepayments. The County may elect by notice to the Lender, to prepay all or any portion of the
Advance or any date on which an Installment Payment is due; provided, however that any
prepayment shall be accompanied by a prepayment premium based upon the following schedule:
Prepayment Date
Premium
October 28, 2004 through October 27, 2007
5%
October 28, 2007 through October 27, 2010
4%
October 28, 2010 through October 27, 2013
3%
October 28, 2013 through October 27, 2016
2%
October 28, 2016 to maturity
I%
Notwithstanding the foregoing, any prepayment (i) made with proceeds of the Advance (up to
$100,000) remaining after delivery of the Completion Certificate described in Section 3.6(d) (so
long as such prepayment occurs on or before March 31, 2006), or (ii) pursuant to Section
5.4(b)(ii) or Section 5.5(b)(ii) shall be without premium.
Any such prepayment shall be applied against scheduled Installment Payments in inverse
order of maturity.
Appropriations of Payments. (a) The County reasonably believes that funds sufficient to make
all Installment Payments during the Term of this Agreement can be obtained. While recognizing
that it is not empowered to make any binding commitment to make Installment Payments or any
other payments beyond its current fiscal year, the Governing Body of the County in authorizing
the execution of this Agreement has stated its intent to make annual appropriations sufficient to
make the Installment Payments and Additional Payments and has recommended that future
governing bodies continue to do so during the Term of this Agreement.
(b) The Manager shall include in the initial proposal for each of the County's annual
budgets the amount of all Installment Payments and Additional Payments coming due during the
fiscal year to which such budget is applicable. Notwithstanding that the Manager includes an
appropriation for Installment Payments and Additional Payments in a proposed budget, the
County may terminate all its obligations hereunder by not appropriating sufficient funds to make
the scheduled Installment Payments and Additional Payments. In the event the Governing Body
determines not to appropriate in its budget an amount sufficient to pay all Installment Payments
and reasonably estimated Additional Payments coming due in the applicable fiscal year, the
Governing Body shall adopt a resolution specifically deleting such appropriation from the
proposed budget for that fiscal year. Such resolution shall state the reasons for such deletion,
shall be adopted by a vote identifying those voting for and against and abstaining from the
resolution, and shall be recorded in the minutes of the Governing Body. A copy of such
resolution shall be promptly sent to the Lender. Such failure to appropriate shall constitute an
Event of Default.
(c) If the amount equal to the Installment Payments which will be due during the next
fiscal year has not been appropriated by the County in its budget, the Manager shall deliver to
the Lender, within ten (10) days after the adoption of the County's budget for such fiscal year,
but not later than fifteen (15) days after the start of such fiscal year, a certificate from the
Finance Officer of the County stating that the County did not make such appropriation.
Insurance. Subject to Section 4.5 and Section 4.14 hereof, the County shall continuously
maintain, or cause to be maintained, the following insurance on the Project: (a) public liability
insurance against liability for bodily injury, including death resulting therefrom, and for damage
to property, including loss of use thereof, arising out of the use or ownership of the Project, with
a minimum liability limit of $1,000,000, (b) workers' compensation insurance with respect to
County employees at the Project, and (c) fire and other casualty insurance and extended coverage
12
against loss or damage to the Project in the amount of the full replacement cost of the Project.
The liability and casualty policies shall have deductible clauses not exceeding $200,000, shall
name the Lender as an additional insured as its interests may appear, shall be provided by a
commercial insurer satisfactory to the Lender, and must explicitly waive any co-insurance
penalty. Except as provided in Section 5.1(c), the County shall pay over to the Lender (and
hereby irrevocably assigns, transfers and sets over to the Lender) all right, title and interest of the
County in and to any Net Proceeds payable as to any damage or destruction to the Project during
the Term to be held by the Lender until applied in accordance with Section 5.1(b) or Section
5.2(b), as the case may be.
All such policies shall be deposited with the Lender, provided that in lieu of such policies
there may be deposited with the Lender a certificate or certificates of the respective insurers
attesting the fact that the insurance required by this Section is in full force and effect. Prior to
the expiration of any such policy, the County shall furnish the Lender evidence satisfactory to the
Lender that the policy has been renewed or replaced or is no longer required by this Agreement.
Unless a policy with such an undertaking is available only at a cost which the County, with the
approval of the Lender, determines to be unreasonable, each policy shall contain an undertaking
by the insurer that such policy shall not be modified adversely to the interests of the Lender or
canceled without at least 30 days' prior notice to the Lender.
In lieu of policies of insurance written by commercial insurance companies meeting the
requirements of this Section, the County may maintain a program of self-insurance or participate
in group risk financing programs, risk pools, risk retention groups, purchasing groups and
captive insurance companies, and in state or federal insurance programs.
The County acknowledges its responsibility for the payment of all deductible amounts in
respect of the insurance required by the provisions of this Section and covenants to maintain at
all times a sufficient amount of available funds for such purpose.
The Lender shall not be responsible for the sufficiency or adequacy of any insurance
herein required and shall be fully protected in accepting payment on account of such insurance or
any adjustment, compromise or settlement of any loss.
The Lender shall cooperate fully with the County at the County's expense in filing any
proof of loss with respect to any insurance policy maintained pursuant to this Section and in the
prosecution or defense of any prospective or pending condemnation proceeding with respect to
the Site or any portion thereof.
To the extent losses for any damage to the Project, however caused, are paid from the Net
Proceeds of any insurance required by this Section, no claim shall be made and no suit shall be
brought against the County by the Lender or the Trustee or anyone else claiming by, through or
under either of them for the recovery of such Net Proceeds.
Expenses; Taxes. Subject to Section 4.5 and Section 4.14 hereof, the County shall pay as
Additional Payments directly to the party so owed:
all of the expenses of maintenance of the Project, including, but not limited to all charges for gas,
water, steam, electricity, light, heat or power, telephone or other utility service furnished to or
used on or in connection with the Site; and
any and all taxes and assessments payable with respect to the Site and the Project, including, but
not limited to, all license or registration fees, gross receipts tax, sales and use tax, if applicable,
license fees, documentary stamp taxes, rental taxes, assessments, charges, ad valorem taxes,
excise taxes, and all other taxes, licenses and charges imposed on the ownership, possession or
use of the Site and the Project, together with any interest and penalties, other than taxes on or
measured by the net income of the Lender. There will be no abatement of Installment Payments
on account of interruption of any utility services.
Proof of Payment of Taxes, Other Charges. The County shall furnish the Lender, upon request
of the Lender, proof of payment of any taxes, utility charges, insurance premiums, or other
charges or payments required to be paid by the County under this Agreement.
No Encumbrances. Except as permitted by the Deed of Trust, the County shall not directly or
indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge,
13
encumbrance or claim on or with respect to the Project, or the rights of the County and the
Lender therein, except with the prior written consent of the Lender, such consent not to be
unreasonably withheld. Subject to Section 4.5 and Section 4.14 hereof, the County at its own
expense shall promptly and duly discharge any such mortgage, pledge, lien, charge,
encumbrance or claim not excepted above if the same shall arise at any time.
Performance by the Lender of the County's Responsibilities. Any performance required of the
County or any payments required to be made by the County may, if not timely performed or
paid, be performed or paid by the Lender, and, in that event, the Lender shall be immediately
reimbursed by the County for these payments or other performance by the Lender, with interest
thereon at the annual rate of 12%.
Financial Statements. The County shall furnish the Lender and its representatives and agents, (a)
copies of the County's annual audited financial statements, as soon as practicable after the
County's acceptance thereof, but in any event within 270 days of the end of its fiscal year, and
(b) at such reasonable times as the Lender shall request, current financial statements (including,
without limitation, the County's annual budget as submitted), and shall permit the Lender to
inspect the County's books and records and make extracts therefrom at its own expense during
regular business hours and in a manner which will not disrupt the County's normal business
routine. The County shall furnish to the Lender a copy of each annual budget as approved within
thirty (30) days following such approval.
Maintenance, Care and Use. Subject to Section 4.5, Section 5. 1, Section 5.2 and Section 4.14
hereof, the County shall not abandon the Project during the Term. The County shall use the
Project in a careful and proper manner, in compliance with all applicable laws and regulations,
and shall take no action to adversely affect the Project, and shall take all reasonable action to
preserve the Project in good condition, repair, appearance and working order for the purposes
intended, ordinary wear and tear expected, including, without limitation, at its sole cost and
expense, to service, repair and maintain the Project, and to replace any part of the Project as may
from time to time become worn out, lost, stolen, destroyed or damaged or unfit for use. Any and
all additions to or replacements of the Project and all parts thereof shall constitute accessions to
the Project and shall be subject to all the terms and conditions of this Agreement.
Inspection. The Lender shall have the right, upon reasonable prior notice to the County, to enter
into and upon the Site to inspect the Project or any part thereof.
Limited Obligation of the County. NO PROVISION OF THIS AGREEMENT SHALL BE
CONSTRUED OR INTERPRETED AS CREATING A PLEDGE OF THE FAITH AND
CREDIT OF THE COUNTY WITHIN THE MEANING OF ANY CONSTITUTIONAL DEBT
LIMITATION. NO PROVISION OF THIS AGREEMENT SHALL BE CONSTRUED OR
INTERPRETED AS CREATING A DELEGATION OF GOVERNMENTAL POWERS NOR
AS A DONATION BY OR A LENDING OF THE CREDIT OF THE COUNTY WITHIN THE
MEANING OF THE CONSTITUTION OF THE STATE OF NORTH CAROLINA. THIS
AGREEMENT SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY
OBLIGATE THE COUNTY TO MAKE ANY PAYMENTS BEYOND THOSE
APPROPRIATED IN THE SOLE DISCRETION OF THE COUNTY FOR ANY FISCAL
YEAR IN WHICH THIS AGREEMENT IS IN EFFECT; PROVIDED, HOWEVER, ANY
FAILURE OR REFUSAL BY THE COUNTY TO APPROPRIATE FUNDS, WHICH
RESULTS IN THE FAILURE BY THE COUNTY TO MAKE ANY PAYMENT COMING
DUE HEREUNDER WILL IN NO WAY OBVIATE THE OCCURRENCE OF THE EVENT
OF DEFAULT RESULTING FROM SUCH NONPAYMENT. NO DEFICIENCY
JUDGMENT MAY BE RENDERED AGAINST THE COUNTY IN ANY ACTION FOR
BREACH OF A CONTRACTUAL OBLIGATION UNDER THIS AGREEMENT, AND THE
TAXING POWER OF THE COUNTY IS NOT AND MAY NOT BE PLEDGED DIRECTLY
OR INDIRECTLY OR CONTINGENTLY TO SECURE ANY MONEYS DUE UNDER THIS
AGREEMENT. No provision of this Agreement shall be construed to pledge or to create a lien
on any class or source of the County's moneys, nor shall any provision of this Agreement restrict
the future issuance of any of the County's bonds or obligations payable from any class or source
of the County's moneys. To the extent of any conflict between this Section and any other
provision of this Agreement, this Section shall take priority.
DAMAGE, DESTRUCTION OR CONDEMNATION
14
Damage or Destruction. (a) The County shall notify the Lender immediately in the event (i) of
any damage to or destruction from fire or other casualty of any portion of the Project or (ii) that
title to or use of all or any portion of the Project shall be lost by reason of a defect in title thereto
or (iii) that a material defect in the construction of the Project becomes apparent, if the County
determines in good faith that such damage, destruction or loss will cost more than $50,000 to
repair, replace and restore.
(b) If any portion of the Project is damaged or destroyed or title is defective as
provided herein, to an extent that the County determines in good faith that the cost of repairing,
replacing and restoring such damage, destruction or title defection will exceed $50,000, then the
County shall deposit the Net Proceeds with the Lender for credit against the Advance and shall,
within 90 days after the date such damage or destruction occurs, elect one of the following two
options by giving notice of such election to the Lender, and the Lender shall disburse such Net
Proceeds in accordance with the option so elected:
Option A — Repair and Restoration. The County may elect to repair, reconstruct and restore that
portion of the Project so lost, damaged or destroyed. If the County elects this Option A, then the
County shall proceed forthwith to repair, reconstruct and restore the applicable portion of the
Project to substantially the same condition as had existed prior to the event causing such damage
or destruction, with such alterations and additions as the County may determine to be necessary
or desirable and as will not impair the capacity or character of the applicable portion of the
Project for the purposes for which it had been used prior to such damage or destruction or is
intended to be used. So long as no Event of Default has occurred and is continuing under this
Agreement, the Lender, upon receipt of a request made by the County, shall apply so much as
may be necessary of such Net Proceeds to payment of the cost of such repair, reconstruction and
restoration, either on completion thereof or as the work progresses. Any such request may
provide for Net Proceeds to be paid directly to third -party vendors or to be paid to the County for
reimbursement of costs incurred in such repair, replacement or restoration. If such Net Proceeds
are not sufficient to pay in full the cost of such repair, replacement and restoration, the County
shall, subject to Section 4.5, pay so much of the cost thereof as may be in excess of such Net
Proceeds. The County shall not by reason of the payment of such excess cost be entitled to any
(A) reimbursement from the Lender, or (B) abatement or diminution of the Installment
Payments.
Option B — Prepayment of Installment Pam. The County may elect to have the Net
Proceeds of insurance payable as a result of such loss, damage or destruction, together with other
monies provided by the County, applied to the prepayment of Installment Payments in
accordance with Section 4.4. Notwithstanding anything to the contrary, in the event that the
County elects to make partial prepayment under this Option B, the County shall first provide to
the Lender a certificate signed by the Manager to the effect that (i) the Project has been restored
to its condition prior to the damage, or (ii) such damage will not impair the County's use of the
Project for its intended purposes.
(c) If the County determines in good faith that such cost will not exceed $50,000, the
County shall (1) retain the Net Proceeds with respect to such damage or destruction, (2)
forthwith repair, reconstruct and restore the Project so damaged or destroyed to substantially the
same condition as it had existed prior to the event causing such damage or destruction, and (3)
apply Net Proceeds retained by it to the payment or reimbursement of the costs of such repair,
replacement and restoration. If such Net Proceeds are not sufficient to pay in full the cost of
such repair, replacement and restoration, the County shall, subject to Section 4.5, pay so much
thereof as is in excess of such Net Proceeds.
Condemnation; Loss of Title. (a) In the case of a taking of all or any part of the Project or any
right therein under the exercise of the power of eminent domain or any loss of all or any part of
the Project because of loss of title thereto, or the commencement of any proceedings or
negotiations which might result in such a taking or loss, the party upon whom notice of such
taking is served or with whom such proceedings or negotiations are commenced or who learns of
a loss of title shall give prompt notice to the other. Each such notice shall describe generally the
nature and extent of such condemnation, taking, loss, proceedings or negotiations. All
obligations of the County under this Agreement (except obligations to make Installment
Payments when due) shall terminate as to the portion of the Project as to which there is a loss of
title or which is condemned or taken when such loss of title is finally adjudicated or when title
thereto vests in the party condemning or taking the same, as the case may be (hereinafter referred
15
to as the "Takings Date"). The County shall pay over to the Lender (and hereby irrevocably
assigns, transfers and sets over to the Lender) all right, title and interest of the County in and to
any Net Proceeds payable as to any such loss of title, condemnation or taking during the Term.
(b) In the event of any such loss of title, condemnation or taking, the County shall
deliver the Net Proceeds from the condemnation proceeding to the Lender to credit against the
Advance, and, within 90 days after the Takings Date for such proceeding, elect either or both of
the following two options by giving notice of such election to the Lender, and the Lender shall
disburse the Net Proceeds in accordance with the option so elected:
Option A — Restoration. The County may elect to have the Net Proceeds as to such loss of title,
condemnation or taking used to restore the applicable portion of the Project as to which there has
been a loss of title, condemnation or taking to substantially its condition prior to such loss of
title, condemnation or taking. So long as no Event of Default has occurred and is continuing
under this Agreement, the Lender, upon receipt of a request made by the County, shall apply so
much as may be necessary of such Net Proceeds to payment of the cost of such restoration, either
on completion thereof or as the work progresses. If such Net Proceeds are not sufficient to pay
in full the cost of such restoration, the County shall, subject to Section 4.5, pay so much of the
cost thereof as may be in excess of such Net Proceeds. The County shall not, by reason of the
payment of such excess cost, be entitled to any (A) reimbursement from the Lender, or (B)
abatement or diminution of the Installment Payments.
Option B — Prepayment of Installment Payments. The County may elect to have the Net
Proceeds of insurance payable as a result of such loss, condemnation or taking together with
other monies provided by the County, applied to the prepayment of Installment Payments in
accordance with Section 4.4. Notwithstanding anything to the contrary, in the event that the
County elects to make partial prepayment under this Option B, the County shall first provide to
the Lender a certificate signed by the Manager to the effect that (i) the Project has been restored
to its condition prior to damage, or (ii) such damager will not impair the County's use of the
Project for its intended purposes.
(c) The Lender shall, at the expense of the County, cooperate fully with the County in
the contest of any prospective or pending condemnation proceedings or in any contest over title
with respect to the Project or any part thereof and shall, to the extent it may lawfully do so,
permit the County to litigate, at the expense of the County, in any such proceeding in the name
and on behalf of the Lender. In no event shall the Lender voluntarily settle, or consent to the
settlement of, any prospective or pending condemnation proceedings, or proceedings as to title,
with respect to the Project or any part thereof without the consent of the County.
EVENTS OF DEFAULT AND REMEDIES
Events of Default. (a) Subject to the provisions of subsection (b), the following shall be "Events
of Default" under this Agreement, and the terms "Event of Default" or "Default" shall mean,
whenever they are used in this Agreement, any one or more of the following events:
failure of the County to pay when due any Installment Payment required to be paid under Section
4.3, which failure shall continue for a period of 5 days after notice is given; or
failure of the County to pay when due any payment due under this Agreement, other than
payments required under Section 4.3, or to observe and perform any covenant, condition or
agreement on its part to be observed or performed hereunder or under the Deed of Trust, which
failure shall continue for a period of 30 days after notice is given, or in the case of any such
default that cannot with due diligence be cured within such 30 -day period, failure of the County
to proceed promptly to cure the same and thereafter prosecute the curing of such default with due
diligence; or
the County becomes insolvent or the subject of insolvency proceedings; or is unable, or admits in
writing its inability, to pay its debts as they mature; or makes a general assignment for the benefit
of creditors or to an agent authorized to liquidate any substantial amount of its property; or files a
petition or other pleading seeking reorganization, composition, readjustment or liquidation of
assets, or requesting similar relief; or applies to a court for the appointment of a receiver for it or
for the whole or any part of its property; or has a receiver or liquidator appointed for it or for the
16
whole or any part of its property (with or without the consent of the County) and such receiver is
not discharged within ninety (90) consecutive days after his appointment; or becomes the subject
of an "order for relief' within the meaning of the United States Bankruptcy Code; or files an
answer to a creditor's petition admitting the material allegations thereof for liquidation,
reorganization, readjustment or composition or to effect a plan or other arrangement with
creditors or fail to have such petition dismissed within sixty (60) consecutive days after the same
is filed against the County; or
the County adopts a budget for any fiscal year during the term of this Agreement which does not
include moneys sufficient to pay all Installment Payments and the reasonably estimated
Additional Payments coming due hereunder for that fiscal year; or amends a previously adopted
budget to defer the funds to make such payments; or
the County fails to provide the Lender with its annual audited financial statement within 270
days from the end of each fiscal year during the Term and such failure is not cured within thirty
(30) days notice of the same.
(b) The provisions of the foregoing subparagraph (a)(ii) are subject to the limitation
that if by reason of force majeure the County is unable in whole or in part to perform any of its
covenants, conditions or agreements hereunder other than in Section 2.2, Section 4.3, Section
4.6, Section 4.7, Section 4.9 and Section 4.10 hereof, the County shall not be deemed in default
during the continuance of such inability. The term "force majeure" as used herein shall include
without limitation acts of God; strikes, lockouts or other industrial disturbances; acts of public
enemies; orders of any kind of the government of the United States of America or the State of
North Carolina or any political subdivision thereof or any of their departments, agencies or
officials, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning;
earthquakes; fires; hurricanes; tornadoes; storms; floods; washouts; droughts; arrests; restraint of
government and people; civil disturbances; explosions; breakage or accident to machinery,
transmission pipes or canals; partial or entire failure of utilities; or any other cause or event not
reasonably within the control of the County. The County shall remedy with all reasonable
dispatch the cause or causes preventing the County from carrying out its covenants, conditions
and agreements, provided that the settlement of strikes, lockouts and other industrial disturbances
shall be entirely within the discretion of the County, and the County shall not be required to
make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands
of any opposing party when such course is in the judgment of the County not in its best interests.
Remedies. To the extent permitted by law, whenever any event of default shall have happened
and is continuing, the Lender may take any one or more of the following remedial steps, without
further demand or notice: (a) declare the whole unpaid principal balance of Installment
Payments due and thereafter to become at once due and payable; (b) exercise its rights as a
secured party under the Uniform Commercial Code of the State, and as a beneficiary under the
Deed of Trust, including taking possession of any part or all of the Project pursuant to the Deed
of Trust, with or without terminating this Agreement, excluding the County from possession, and
selling or leasing the Project for the account of the County; or (c) proceed by appropriate court
action to enforce performance by the County of the applicable covenants of this Agreement or to
recover for the breach thereof, provided, however, that nothing herein shall be deemed to allow
any judgment for a deficiency or waive any provision of N.C.G.S. Section 160A-20 or any
defense the County may otherwise have. In any of such cases, all rights acquired by the County
hereunder shall revert to and revest in the Lender without any act of re-entry, or any other act of
the Lender having to be performed and without the County having any right of return,
reclamation or compensation for moneys paid under this Agreement as absolutely, fully and
perfectly as if this Agreement and such payments had never been made; and in case of such
default all payments theretofore made on this Agreement are to be retained by and belong to the
Lender as the agreed and reasonable repayment of the financing for the Project up to the time of
such default. Any amounts received by the Lender pursuant to the foregoing provisions shall be
applied first to the payment of costs incurred by the Lender or Trustee in taking any remedial
steps pursuant to this Section, then to any unpaid interest and then to repayment of principal, and
upon payment in full of all amounts due, any excess shall be paid to the County.
No Deficiency Judi. Notwithstanding any other provisions herein, it is the intent of the
parties hereto to comply with North Carolina General Statutes Section 160A-20. No deficiency
judgment requiring the payment of money may be entered against the County in favor of the
Lender or any other person in violation of Section 160A-20 including, without limitation, any
17
deficiency judgment for amounts that may be owed hereunder when the sale of all or any portion
of the Project is insufficient to produce enough moneys to pay in full all remaining obligations
hereunder.
Reinstatement after Event of Default. Notwithstanding the exercise by the Lender of any remedy
granted by Section 6.2, unless the Lender shall have sold the Project or shall have entered into an
agreement providing for the leasing of the Project for a period of at least one year, if any
remedies shall have been taken pursuant to Section 6.2 and all overdue Installment Payments,
together with any interest accruing thereon, and all other sums then due and payable under this
Agreement shall have been paid, then the County's default under this Agreement shall be waived
without further action by the Lender. Upon such payment and waiver, this Agreement and the
Deed of Trust shall be fully reinstated, and the County shall be restored to the use, occupancy
and possession of the Project not later than 30 days after the date of reinstatement of this
Agreement.
No Remedy Exclusive. No remedy conferred by this Agreement upon or reserved to the Lender
is intended to be exclusive of any other available remedy or remedies, but every such remedy
shall be cumulative and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or
power accruing upon any default shall impair any such right or power or shall be construed to be
a waiver thereof or acquiescence therein, but any such right and power may be exercised from
time to time and as often as may be deemed expedient.
No Additional Waiver Implied by One Waiver. Failure by the Lender at any time to require
performance by the County of any provision hereof shall in no way affect the Lender's right
hereunder to enforce the same, nor shall any waiver by the Lender of any breach of any provision
hereof be held to be a waiver of any succeeding breach of any such provision, or a waiver of the
provision itself.
Attorneys' Fees and Other Expenses. To the extent permitted by law, the County shall on
demand pay to the Lender the reasonable fees of attorneys and other reasonable expenses
incurred by the Lender in the collection of appropriated, but unpaid, Installment Payments, or the
enforcement of any other obligation of the County, or its agents, upon an Event of Default,
including any Additional Payments made by the Lender; provided, however, nothing herein shall
be deemed a waiver of any provision of this Agreement prohibiting the recovery of any
deficiency judgment.
ASSIGNMENT
Assignment by the Lender. (a) The Lender may, at any time and from time to time, assign all or
any part of its interest in the Site, the Project or this Agreement, including, without limitation, the
Lender's rights to receive Installment Payments payable to the Lender hereunder. Any
assignment made by the Lender or any subsequent assignee shall not purport to convey any
greater interest or rights than those held by the Lender pursuant to this Agreement.
The County agrees that this Agreement may become part of a pool of obligations at the
Lender's or its assignee's option. The Lender or its assignees may assign or reassign all or any
part of this Agreement, including the assignment or reassignment of any partial interest through
the use of certificates evidencing participation interests in this Agreement without the consent of
the LGC, although the Lenders or any assignee shall give written notice to the LGC of any such
assignment. Any assignment by the Lender may be only to a bank, insurance company, or
similar financial institution or any other entity approved by the LGC. Notwithstanding the
foregoing, no assignment or reassignment of the Lender's interest in the Deed of Trust or this
Agreement shall be effective unless and until the County shall receive a duplicate original
counterpart of the document by which such assignment or reassignment is made disclosing the
name and address of each such assignee.
The County further agrees that the Lender's interest in this Agreement may be assigned
in whole or in part upon terms which provide in effect that the assignor or assignee will act as a
collection and paying agent for any holders of certificates of participation in this Agreement,
provided the County receives a copy of such agency contract and such collection and paying
18
agent covenants and agrees to maintain for the full remaining term of this Agreement a written
record of each assignment and reassignment of such certificates of participation.
(b) The County agrees to execute any document reasonably required in connection
with any assignment. Any assignor must provide notice of any assignment to the County and the
LGC, and the County shall keep a complete and accurate record of all assignments as required by
the Code. After the giving of any such notice, the County shall thereafter make all payments in
accordance with the notice to the assignee named therein and shall, if so requested, acknowledge
such assignment in writing, but such acknowledgment shall in no way be deemed necessary to
make the assignment effective.
(c) The Lender represents and warrants that it is familiar with federal and North
Carolina legislation, rules and regulations as to limitations upon the public distribution of
securities that have not been registered under the Securities Act of 1933, as amended, and that it
is making the Advance for its own account and has no present intention of making any sale or
other distribution of this Agreement in violation of such legislation, rules or regulations. The
Lender represents that it is familiar with the operations and financial condition of the County,
based upon information furnished to the Lender by the County, and has made such inquiries as it
deems appropriate in connection with the Advance.
Assignment by the County. Except pursuant to the Deed of Trust, the County shall not sell,
assign, lease, sublease, pledge or otherwise encumber or suffer a lien or encumbrance upon or
against its interests in the Project or in this Agreement, without securing the prior written consent
of the Lender. Except for normal repairs, maintenance, and replacements, the County shall not
remove any portion of the Project from its place of installation without securing the Lender's
prior written permission. The Lender shall not unreasonably withhold such permission in either
case.
MISCELLANEOUS
Notices. Unless otherwise provided herein, all demands, notices, approvals, consents, requests,
opinions and other communications hereunder shall be in writing and shall be deemed to have
been given when delivered in person or mailed by first class registered or certified mail, postage
prepaid, addressed as follows:
(a) if to the County: County of Iredell, North Carolina
200 South Center Street
Statesville, North Carolina 28687
Attn: Director of Finance and Administration
(b) if to the Lender: Bank of America, N.A.
Middle Market Banking
NC7-166-09-03
3100 Tower Boulevard, Suite 910
Durham, North Carolina 27707
Attention: Senior Vice President
The Lender and the County may, by notice given hereunder, designate any further or
different addresses to which subsequent demands, notices, approvals, consents, requests,
opinions or other communications shall be sent or persons to whose attention the same shall be
directed.
Severability. The provisions of this Agreement are intended to be severable. If any provision of
this Agreement shall be held invalid by any court of competent jurisdiction, such holding shall
not invalidate any other provision hereof.
Successors and Assigns. This Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
Applicable Law. This Agreement shall be governed by the laws of the State of North Carolina.
Indemnification. Without waiving any defense available to it and only to the extent permitted by
North Carolina law, the County shall hold the Lender and the LGC, and their respective officers,
19
employees, directors, members and agents, harmless from all liabilities, obligations, losses,
claims, damages, actions, suits, proceedings, costs, and expenses, including attorneys' fees, that
(a) arise in tort, in contract, under 42 U.S. Code § 1983 or under the North Carolina public
bidding laws relating to the Project, or (b) arise out of, are connected with, or result directly or
indirectly from the Project or any portion thereof, including without limitation the manufacture,
selection, acquisition, delivery, possession, construction, improvement, environmental or other
condition, lease, use, operation, of the Project or any portion thereof. Notwithstanding anything
to the contrary herein contained, the County shall have no indemnification responsibilities with
respect to the Lender's income tax obligations, if any or with respect to any intentional acts or
gross negligence of Lender while exercising control over the Project pursuant to the remedies of
the Lender in this Agreement or the Deed of Trust. The indemnification responsibilities created
by this Section shall continue in effect notwithstanding the termination of other portions of this
Agreement, shall survive and be enforceable after the termination of this Agreement, and shall be
terminated only by written agreement of the Lender, the LGC and the County; provided,
however, that nothing contained herein shall be deemed a waiver of the provisions of Section 6.3
hereof.
Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be an original, together shall constitute but one and the same Agreement.
Entire Agreement. The Basic Agreements express the entire understanding and all agreements
between the parties and may not be modified except in writing signed by the parties.
Consent. Whenever the Lender's consent is required under this Agreement, it shall not be
unreasonably withheld or delayed.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as
a document as of the date first above written.
[SEAL]
Attest:
Jean C. Moore, Clerk
Board of Commissioners
LENDER:
BANK OF AMERICA, N.A.
Name:
COUNTY:
COUNTY OF IREDELL, NORTH CAROLINA
IN
20
Stephen D. Johnson, Chairman
Board of Commissioners
Local Government Commission
Signature page for Installment Financing Agreement in the
amount of $6,671,075 by and between Bank of America, N.A. and
the County of Iredell, North Carolina dated October 28, 2004.
This Agreement has been approved by the Local Government Commission under the provisions of Article 8,
Chapter 159 of the General Statutes of North Carolina.
In
Janice T. Burke ,Secretary
Exhibit A
Description of Project
The construction of a new consolidated office building for the Iredell County Department of Social Services on
East Side Drive, Statesville, North Carolina, all of which will be located on the Site, as described on Exhibit A
to the Deed of Trust.
Exhibit B
Schedule of Installment Payments