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HomeMy WebLinkAbout2004 S Finance - BB&T Refinancing Installment Purchase Agreement ~~~~laa°~ f Eauinmentl INSTALLMENT FINANCING CONTRACT $287,178.00 between RBC CENTURA BANK as the Lender and County of Orange as the County Dated: November 12, 2004 TABLE OF CONTENTS SECTION 1. DEFINITIONS ........................................................................ ..................................2 SECTION 2. ADVANCE OF LOAN AMOUNT ........................................ ..................................2 SECTION 3. INSTALLMENT PAYMENTS AND OTHER PAYMENTS .................................3 SECTION 4. NATURE OF CONTRACT .................................................... ..................................4 SECTION 5. RESPONSIBILITIES AND COVENANTS OF THE COUN TY ............................4 SECTION 6. SECURITY INTEREST; LIENS ............................................ ..................................7 SECTION 7. INSURANCE AND UNFORESEEN LOSSES ...................... ..................................8 SECTION 8. WARRANTIES AND REPRESENTATIONS OF THE COUNTY ........................8 SECTION 9. INDEMNIFICATION ............................................................. ................................10 SECTION 10. DISCLAIMER OF WARRANTIES ..................................... ................................10 SECTION 11. DEFAULT AND REMEDIES .............................................. ................................10 SECTION 12. ASSIGNMENT ..................................................................... ................................12 SECTION 13. LIMITED OBLIGATION OF THE COUNTY .................... ................................13 SECTION 14. TAX-EXEMPT INTEREST ................................................. ................................14 SECTION 15. MISCELLANEOUS ............................................................. ................................15 (i) INSTALLMENT FINANCING CONTRACT EQUIPMENT THIS INSTALLMENT FINANCING CONTRACT, dated as of November 12, 2004 (the "Contract"), by and between RBC CENTURA BANK, a North Carolina banking corporation (the "Bank"); and COUNTY OF ORANGE, a body politic and corporate of the State of North Carolina (the "County "); WITNESSETH: WHEREAS, the County is a duly and validly created, organized and existing public body politic, duly created and existing 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 General Statutes of North Carolina, to enter into installment contracts to finance the purchase of personal property, including property to be affixed or attached to real estate as fixtures; and WHEREAS, the Bank desires to advance certain funds to enable the County to finance the purchase and installation of the Equipment (as hereinafter defined); and WHEREAS, the County desires to obtain such advance from the Bank and to purchase and install the Equipment pursuant to the terms and conditions hereinafter set forth; and WHEREAS, the obligation of the County to make Installment Payments (as hereinafter defined) and other payments required under Section 3 hereof shall constitute a limited obligation payable solely from currently budgeted appropriations of the County and shall not constitute a pledge of the faith and credit of the County within the meaning of any constitutional debt limitation or as otherwise prohibited by the North Carolina Constitution; and WHEREAS, no deficiency judgment may be rendered against the County in any action for breach of a contractual obligation under this Contract, 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 Contract; and WHEREAS, the Bank and the County each have duly authorized the execution and delivery of this Contract. NOW, THEREFORE, for and in consideration of the premises and of the covenants hereinafter contained, and other valuable consideration, the parties hereto agree as follows: SECTION 1. DEFINITIONS For purposes of this Contract, the following definitions will apply: 1.1. "Equipment" means all of the property described in Exhibit A attached hereto, including any Equipment to be affixed to or attached to real estate as fixtures. 1.2. "Escrow Deposit Agreement" means the Escrow Deposit Agreement dated as of November 12, 2004 by and between the County and the Bank pursuant to which the Bank agrees to hold the Escrow Funds on behalf of County and to advance such Escrow Funds in accordance with the terms thereof. 1.3. "Escrow Fund" means the funds deposited by the County with the Bank pursuant to the terms of the Escrow Deposit Agreement. 1.4. "Installment Payments" means those payments made by the County to the Bank as described in Section 3 of this Contract and in the Payment Schedule. 1.5. "Loan Amount" means the amount described in Exhibit B hereto which will be advanced by the Bank to enable the County to finance the purchase and construction, installation or repair of the Equipment, under the terms of this Contract. 1.6. "Net Proceeds," when used with respect to any proceeds from policies of insurance required hereunder or proceeds of any condemnation award arising out of the condemnation of all or any portion of the Equipment, means the amount remaining after deducting from the gross proceeds thereof all expenses (including, without limitation, attorneys' fees and costs) incurred in the collection of such proceeds. 1.7. "Payment Schedule" means the document labeled "Payment Schedule" attached hereto as Exhibit B and incorporated herein by reference, which describes the County's Installment Payments. 1.8. "Prime Rate" means the Bank's prime rate, which is one of the Bank's variable rate indices for credit extensions and is set by the Bank at its discretion based on the Bank's perception of market interest rate levels, trends and general economic conditions. It is not tied to any specific index published by any third party and is not represented by the Bank to be the lowest rate at which the Bank extends credit. SECTION 2. ADVANCE OF LOAN AMOUNT The Bank agrees to advance the Loan Amount to the County and the County agrees to borrow the Loan Amount from the Bank to be applied in accordance with the terms and conditions of this Contract. The proceeds of the Loan Amount shall be used to purchase and to install, construct or repair the Equipment. The advance by the Bank shall be made by the deposit by the Bank to the Escrow Fund of the Loan Amount. The Loan Amount may be invested pending disbursement, and shall be disbursed to acquire and to install, construct or repair the Equipment in accordance with the Escrow Deposit Agreement. The County shall pay any additional sums necessary to purchase and install, construct or repair the Equipment 2 and shall provide evidence of the payment of such additional sums to the Bank upon request. SECTION 3. INSTALLMENT PAYMENTS AND OTHER PAYMENTS 3.1. Amounts and Times of Installment Payments and Other Payments. Subject to the provisions of Section 13 hereof entitled "Limited Obligation of the County ," the County shall repay the Loan Amount in installments as provided in Exhibit B to this Contract. Each installment shall be deemed to be an Installment Payment and shall be paid in the amounts and at the times set forth in the Payment Schedule except as provided herein. Installment Payments shall be sufficient in the aggregate to repay the Loan Amount together with interest thereon at a per annum rate equal to the rate per annum described in Exhibit B hereto. A portion of each Installment Payment is interest. Interest on the Loan Amount as set forth on Exhibit B is based upon a 360-day year, with twelve (12) thirty (30) day months. The amortization schedule is based on all payments being received by the Bank on the scheduled due date. The Bank reserves the right to increase the initial payment to reflect any additional interest accruing prior to the end of the initial interest period. 3.2. Place of Payments. All payments required to be made to the Bank hereunder shall be made at the Bank's principal office or as maybe otherwise directed by the Bank or its assignee. 3.3. Late Charges. Should the County fail to pay any Installment Payment or any other sum required to be paid to the Bank within fifteen (15) days after the due date thereof, the County shall pay a late payment charge equal to four percent (4%) of the delinquent payment. 3.4. Abatement of Installment Pam. Subject to Section 13 hereof entitled "Limited Obligation of the County ," there shall be no abatement or reduction of the Installment Payments or other payments by the County for any reason, including but not limited to, any defense, recoupment, setoff, counterclaim, or any claim (real or contingent) arising out of or related to the Equipment. The County assumes and shall bear the entire risk of loss and damage to the Equipment from any cause whatsoever, it being the intention of the parties that the Installment Payments and other payments shall be made in all events unless the obligation to make such Installment Payments and other payments is terminated as otherwise provided herein. 3.5. Prepayment of Installment Payments. Prepayment of the Loan (except for excess proceeds from the Escrow Fund after completion of purchase of the Equipment) will be subject to a yield maintenance fee equal to the present value of the daily lost cash flow to the Bank based upon the difference between the interest rate under the Installment Financing Contract and the rate on a new loan of similar amount with the same remaining maturity to a similar borrower. The discount rate for calculating the present value will be the current rate offered by the Bank for a new loan of the similar amount with the same remaining maturity to a similar borrower, as determined by the Bank in its reasonable 3 discretion, which discretion shall be conclusive absent a showing of bad faith or manifest error. Any prepayment of the Installment Financing Contract will be subject to a minimum fee of one-half percent (.5%). SECTION 4. NATURE OF CONTRACT 'This Contract is an installment contract and security agreement pursuant to Section 160A-20 and Article 9 of Chapter 25 (the "Uniform Commercial Code - Secured Transactions") of the General Statutes of North Carolina. SECTION 5. RESPONSIBILITIES AND COVENANTS OF THE COUNTY 5.1. Care and Use. The County shall use the Equipment in a careful and proper manner, in compliance with all applicable laws and requisitions, and, at its sole cost and expense or at the cost or expense of a third party other than the Bank, shall service, repair and maintain the Equipment so as to keep the Equipment in good condition, repair, appearance and working order for the purposes intended, ordinary wear and tear excepted, and shall replace any part of the Equipment as may from time to time become worn out, lost, stolen, destroyed or damaged or is unfit for use. Any and all additions to or replacements of the Equipment and all parts thereof shall constitute accessions to the Equipment and shall be subject to all terms and conditions of this Contract and included in the term "Equipment" as used in this Contract. If requested by the Bank, the County shall enter into or cause to be entered into, and maintained in full force and effect during the term of this Contract, manufacturer's or supplier's standard maintenance contracts satisfactory to the Bank covering the Equipment and shall comply with all of its obligations thereunder. The County shall furnish evidence to the Bank upon Bank's request of such signed maintenance contracts at or prior to the date of this Contract and the payment of all charges and premiums therefor. 5.2. Inspection. The Bank shall have the right upon reasonable prior notice to the County to enter into and upon the premises where the Equipment is located to inspect the Equipment and observe its use during normal business hours. 5.3. Alterations. Without the prior written consent of the Bank, which consent shall not be unreasonably withheld, the County shall not make any alterations, modifications or attachments to the Equipment which cannot be removed without materially damaging the functional capabilities or economic value of the Equipment. 5.4. Utilities. The County shall pay, when due, all charges for utility services used in connection with the Equipment. There shall be no abatement of the Installment Payments on account of interruption of any such services. 5.5. Taxes. The County shall pay, when due, any and all taxes levied by any governmental body as a result of the County. 's ownership, possession, or use of the Equipment or as a direct or indirect result of the purchase of the Equipment by the County . 4 5.6. Risk of Loss. Subject to the provisions of Section 13 hereof entitled "Limited Obligation of the County ," the County shall bear all risk of loss to and condemnation of the Equipment. In the event of loss or damage to the Equipment, the County shall either (a) continue to make the Installment Payments due hereunder and repair or replace the Equipment or (b) prepay in full the principal components of the outstanding Installment Payments in accordance with Section 3.5 hereof. Said repair or replacement of the Equipment shall meet with the satisfaction of the Bank. 5.7. Performance by the Bank 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 Bank, and, in that event, the Bank shall be immediately reimbursed by the County for such payments and for any costs and expenses, legal or otherwise, associated with the payments or other performance by the Bank, with interest thereon at a per annum rate equal to the Prime Rate in effect on the last business day of the calendar month preceding the payment (but not exceeding the maximum rate, if any, permitted by applicable law). 5.8. Financial Statements. The County agrees that it will furnish the Bank current audited financial statements (as soon as practicable after the County 's acceptance thereof) and the County 's annual budget as submitted or approved, and permit the Bank or its agents and representatives 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 normal business routine of the County . County shall furnish to Bank current financial statements at such reasonable times as the Bank may request. The County represents and warrants to the Bank that all financial statements which have been delivered to the Bank in connection with this Contract fairly and accurately reflect the County 's financial condition and there has been no material adverse change in the County 's financial condition as reflected in the financial statements since the date thereof. 5.9. Other Responsibilities and Conditions. Simultaneously with the execution of this Contract and prior to the advancement of any funds hereunder by the Bank, the County shall cause to be provided to the Bank the following: (a) An Incumbency and Authorization Certificate in the form of Exhibit C attached hereto; (b) An Opinion Letter of counsel for the County in the form of Exhibit D attached hereto; (c) A certificate in the form of Exhibit E attached hereto or other proof of insurance on the Equipment satisfactory to the Bank; (d) Certified copies of the minutes of the County 's governing body evidencing the County authorizing entry into this Contract; (e) Properly completed UCC financing statements as required by Section 6.1 hereof sufficient in form and substance and filed in all necessary locations to perfect a first lien in the Equipment; (f) An Escrow Deposit Agreement in a form satisfactory to the Bank; and (g) Executed originals of any other documents and instruments required by Bank in connection with this Contract. 5.10. Special Tax Covenants. The County covenants that: (a) it will make no use of the monies advanced by the Bank (the "proceeds") which would cause this Contract to be an "arbitrage bond" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), or the Treasury Regulations promulgated thereunder; (b) so long as the Contract remains in effect, the County will comply with the requirements of the Code and the applicable Treasury Regulations promulgated thereunder and will not take or omit to take any action which will cause the interest paid or payable under this Contract to be includible in the gross income of the registered owner hereof; (c) the Equipment shall be used exclusively for essential governmental purposes of the County and no use shall be made of the proceeds or of the Equipment, directly or indirectly, which would cause this Contract to be a "private activity bond" within the meaning of Section 141 of the Code; (d) no part of the payment of principal or interest under this Contract is or shall be guaranteed, in whole or in part, by the United States or any agency or instrumentality thereof; (e) no portion of the proceeds shall be used, directly or indirectly, in making loans the payment of principal or interest with respect to which are to be guaranteed, in whole or in part, by the United States or any agency or any instrumentality thereof; and (f) the County shall not lease or otherwise make any of the Equipment available to any entity if such lease or other availability would cause the interest portion of the Installment Payments to be included in the gross income of the Bank under the Code for income tax purposes. The County shall furnish promptly all information necessary to permit the Bank to file on or before its due date IRS Form 8038-G. The County shall not take or omit to take any action that may cause a loss of the federal, state or local tax-exempt status of this Contract or the interest thereon. 5.11. Appropriations of Pa 1~. (a) The County reasonably believes that funds sufficient to make all Installment Payments during the Term of this Contract 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 Contract has stated its intent to make annual appropriations sufficient to make the Installment Payment and has recommended that future governing bodies continue to do so during the Term of this Contract. (b) The Manager shall include in the initial proposal for each of the County 's annual budgets the amount of all Installment Payments coming due during the fiscal year to which such budget is applicable. Notwithstanding that the Manager includes an 6 appropriation for Installment Payments in a proposed budget, the County may terminate all its obligations hereunder by not appropriating sufficient funds to make the scheduled Installment Payments. In the event the Governing Body determines not to appropriate in its budget an amount sufficient to pay all Installment 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 Bank. 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 Bank, 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. SECTION 6. SECURITY INTEREST; LIENS 6.1. Security Interest. The County hereby grants to the Bank a security interest in the Equipment and in any and all additions, accessions, repairs, replacements, substitutions, and modifications to the Equipment, and all proceeds of all the foregoing, including any insurance proceeds paid because of loss or damage to the Equipment to the extent necessary to secure the County 's payment obligations to the Bank under this Contract. The County shall cause to be filed, at the County 's expense, financing statements and other related documents that are necessary under Article 9 of Chapter 25 (the "Uniform Commercial Code -Secured Transactions") of the General Statutes of North Carolina to perfect a first lien security interest by filing and to maintain that first lien security interest in perfected form. If the Equipment is or includes one or more motor vehicles, the ownership of which is or are evidenced by a certificate of title(s), the County shall cause the Bank's lien to be properly shown on such title(s) as a first lien security interest. The Equipment is and shall throughout the term of this Contract be and remain personal property, regardless of whether the Equipment is now or may become in any manner affixed or attached to real estate or any building or fixtures on real estate. No portion of the Equipment maybe affixed or attached to real estate or any building or fixtures on real estate. If the Equipment is permanently located on any real estate, not owned in fee simple by the County , or if such real estate, is subject to any liens, the County shall obtain a waiver of any rights in and to the Equipment (including the rights of levy and distraint) from the person who gives the County permission to use the real property on which the Equipment is located and from any holder of liens on the real estate on which the Equipment is located. 6.2. Liens. The County shall not directly or indirectly create, incur, assume or suffer to exist any lien, charge, security interest, encumbrance or claim on or with respect 7 to the Equipment (except the security interest granted to the Bank). The County shall promptly, at its own expense, take such action as maybe necessary to duly discharge any such lien, security interest, charge, encumbrance or claim if the same shall arise at any time. The County shall reimburse the Bank for any expense incurred by it in order to discharge or remove any such lien, security interest, encumbrance or claim. SECTION 7. INSURANCE AND UNFORESEEN LOSSES 7.1. Insurance. The County shall obtain and maintain, at its expense, at all times until termination of this Contract a primary policy of insurance covering the Equipment and providing the insurance protection described in this Section. The County shall maintain at its own expense fire, casualty, public liability, property damage and theft insurance, and such other insurance in such amounts and with such deductibles, if permitted, as required by the Bank from time to time. The Equipment shall be insured in an amount at least equal to its replacement value. All such insurance shall be maintained with such insurance company or companies as shall be satisfactory to the Bank and shall provide that losses shall be payable to the Bank and the Bank shall be named as an additional insured with respect to all such insurance. The County shall deliver to the Bank the policies of insurance or duplicates thereof or other evidence satisfactory to the Bank of such insurance coverage. Each insurer shall agree by endorsement upon the policy or policies issued by it that (i) it will give thirty (30) days prior written notice to the Bank of the cancellation or material modification of such policy; and (ii) the coverage of the Bank shall not be terminated, reduced or affected in any manner regardless of any breach or violation by the County of any warranties, declarations and conditions of such insurance. The County agrees to cooperate fully in all accident insurance investigations, claims and litigation proceedings. The County shall cooperate fully with the Bank in filing any proof of loss with respect to any insurance policy described above. In no event shall the County voluntarily settle, or consent to the settlement of, any proceeding arising out of any insurance claim with respect to the Equipment without the written consent of the Bank. 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. 7.2. Condemnation. Any condemnation award paid as a result of the exercise of the power of eminent domain over the Equipment or any part thereof by any governmental body or any person or entity acting under governmental authority, which is not utilized by the County to repair or replace the Equipment to the satisfaction of the Bank shall be paid to the Bank in accordance with Sections 3.5 and 5.6 hereof. SECTION 8. WARRANTIES AND REPRESENTATIONS OF THE COUNTY The County warrants and represents to the Bank (all such representations and warranties being continuing) as follows: 8 (a) The County is a public body politic duly created and existing under the laws of the State of North Carolina as a political subdivision of the State of North Carolina, and has all powers necessary to enter into the transactions contemplated by this Contract and to carry out its obligations hereunder; (b) This Contract and all. other documents relating hereto, have been duly and validly authorized, approved, executed and delivered by the County and the performance by the County of its obligations under such documents has been approved and authorized under all laws, regulations and procedures applicable to the County , including, but not limited to, compliance with all applicable public meeting and bidding requirements, and the transactions contemplated by this Contract and all other documents relating hereto constitute a public purpose for which public funds may be expended pursuant to the Constitution and laws of the State of North Carolina, and, assuming due authorization, execution and delivery hereof by the Bank, constitute valid, legal and binding obligations of the County ,enforceable in accordance with their respective terms, except as enforcement thereof may be limited by general principles of equity or by bankruptcy, insolvency and other laws affecting the enforcement of creditors' rights generally and as those other laws may be further limited by the provisions of Section 160A-20 of the General Statutes of North Carolina, as amended; (c) No approval or consent is required from any governmental authority with respect to the entering into or performance by the County of this Contract and the transactions contemplated hereby, or, if any such approval is required, it has been duly obtained, [including any applicable approval of the LGC as evidenced by the Secretary's certificate hereon]; (d) There is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body pending or, to the best of the County 's knowledge, threatened, against or affecting the County challenging the validity or enforceability of this Contract or any other documents relating hereto, or the performance of the County 's obligations hereunder, and compliance with the provisions hereof, under the circumstances contemplated hereby, does not and will not in any material respect conflict with, constitute on the part of the County a breach of or default under, or result in the creation of a lien or other encumbrance on any property of the County (except as contemplated herein) pursuant to any agreement or other instrument to which the County is a party, or any existing law, regulation, court order or consent decree to which the County is subject; (e) There are no liens or encumbrances on the Equipment other than the lien created by this Contract; (f) A certified copy of minutes of the action by the Board of Commissioners of the County authorizing the County to perform this Contract and the transactions contemplated hereby. This action is in full force and effect, and has not been in any respect amended, modified, revoked or rescinded; 9 (g) The purchase of the Equipment is essential to the proper, efficient and economical operation of the County .and the delivery of its service and the Equipment will provide an essential use and permit the County to carry out public functions that it is authorized by law to perform; (h) The security interest granted by the County to the Bank in the Equipment shall have been duly perfected and shall constitute a first lien security interest in the Equipment; and SECTION 9. INDEMNIFICATION To the extent permitted by applicable law, the County hereby agrees to indemnify protect and save the Bank, the Escrow Agent and the members and employees of each of the foregoing harmless from all liability, obligations, losses, claims, damages, actions, suits, proceedings, costs and expenses, including attorneys fees, arising out of, connected with, or resulting- directly or indirectly from the Equipment, including without limitation, the possession, condition or use thereof. The indemnification arising under this section shall continue in full force and effect notwithstanding the payment in full of all obligations under this Contract. SECTION 10. DISCLAIMER OF WARRANTIES 10.1. No Representations by the Bank. The County acknowledges that it has inspected the Equipment and found the Equipment to be satisfactory and acknowledges and agrees that it has selected the Equipment based upon its own judgment and disclaims any reliance upon any statements or representations made by the Bank with respect thereto. 10.2. Disclaimer By the Bank. THE BANK MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO THE CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE EQUIPMENT OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE EQUIPMENT. SECTION 11. DEFAULT AND REMEDIES 11.1. Definition of Event of Default. The County shall be deemed to be in default hereunder upon the happening of any of the following events of default (each, an "Event of Default"): (a) The County shall fail to make any Installment Payment or fail to pay any other sum hereunder when due, in either case within ten (10) days after receipt of written notice of such failure; or (b) The County shall fail to perform or observe any term, condition or covenant of this Contract or shall breach any warranty by the County herein or therein contained; or 10 (c) Proceedings under any bankruptcy, insolvency, reorganization or similar litigation shall be instituted by or against the County , or a receiver, custodian or similar officer shall be appointed for the County or any of its property, and such proceedings or appointments shall not be vacated or fully stayed after the institution or occurrence thereof; or (d) Any warranty, representation or statement made by the County herein or in any other document executed or delivered in connection herewith is found to be incorrect or misleading in any material respect on the date made; or (e) An attachment, levy or execution of a security interest or lien is levied upon or against the Equipment. 11.2. Remedies on Default. Subject to Section 13 hereof entitled "Limited Obligation of the County , upon the occurrence of any Event of Default, the Bank may exercise any one or more of the following remedies as the Bank in its sole discretion shall elect: (a) Declare the entire principal amount of the Installment Payments and all accrued interest and other charges immediately due and payable without notice or demand to the County ; (b) Proceed by appropriate court action to enforce performance by the County of the applicable covenants of this Contract or to recover for the breach thereof; (c) Exercise all the rights and remedies of a secured party or creditor under the Uniform Commercial Code of the State of North Carolina and the general laws of the State of North Carolina with respect to the enforcement of the security interest granted or reserved hereunder, including, without limitation, to the extent permitted by law, take possession of any collateral without any court order or other process of law and without liability for entering the premises and sell, lease, sublease or make other disposition of the same in a commercially reasonable manner for the account of the County ,and apply the proceeds of any such sale, lease, sublease or other disposition, after deducting all costs and expenses, including court costs and attorneys' fees, incurred with the recovery, repair, storage and other sale, lease, sublease or other disposition costs, toward the balance due under this Contract and, thereafter, shall pay any remaining proceeds to the County ; (d) Terminate this Contract as to all or any part. of the Equipment and use, operate, lease or hold all or any part of the Equipment as the Bank in its sole discretion may decide; (e) Take possession of any proceeds of the Equipment, including Net Proceeds; or (f) Pursue any other remedy available at law or equity to the Bank. 11 11.3. Further Remedies. A termination hereunder shall occur only on notice by the Bank to the County and only with respect to such portion of the Equipment as the Bank specifically elects to terminate in such notice. Except as to those portions of the Equipment with respect to which there is a termination, this Contract shall remain in full force and effect and the County shall be and remain liable for the full performance of all of its obligations hereunder. All remedies of the Bank are cumulative and may be exercised concurrently or separately. The exercise of any one remedy shall not be deemed an election of such remedy or preclude the exercise of any other remedy. The County agrees to pay to the Bank all court costs and reasonable attorney fees incurred by Bank in enforcing the Bank's rights and remedies under this Contract. SECTION 12. ASSIGNMENT 12.1. Assignment by the County . The County agrees not to sell, assign, lease, sublease, pledge or otherwise encumber or suffer a lien or encumbrance upon or against any interest in this Contract or the Equipment (except for the lien and security interest of the Bank therein) without the Bank's prior written consent. 12.2. Assignment by the Bank. The Bank may, at any time and from time to time, assign all or any part of its interest in the Equipment and/or this Contract, including without limitation, the Bank's rights to receive the Installment Payments due and to become due hereunder. Any assignment made by the Bank or any subsequent assignee may be made only to a bank, insurance company, or similar financial institution. No such assignment shall grant or purport to grant any greater interest or rights than those held by the Bank pursuant to this Contract. The County agrees that this Agreement may become part of a pool of obligations at the Bank's or its assignee's option. The Bank or its assignees may assign or reassign all or any part of this Contract, including the assignment or reassignment of any partial interest through the use of certificate evidencing participation interests in this Contract. The Bank or its designees may assign or reassign either this entire contract or a partial interest herein. All assignments by the Bank shall be subject to the following rules and conditions: (a) The Bank shall send written notice of the assignment and its effective date to the County before it makes the assignment. Such notification shall be forwarded to the County at least 30 days before the effective date of the assignment. The notification shall include an executed copy of the assignment document and shall specify the assignee's name and address, and shall provide the County with instructions for making payments after the effective date of the assignment. The requirement of 30 days notice maybe waived in writing by the County . (b) The County shall not be obligated to make payments to anyone other than the Bank until the notification specified in part (a) of this Section is received by the County or until the effective date of the assignment, whichever is later. Should the County incorrectly make payments to the Bank after the conditions specified in the preceding sentence are met, the Bank shall return those payments to the County . 12 (c) When it receives the notification specified in part (a) of this section, the County shall send a written acknowledgement of the same to the Bank and shall record the assignment in the County 's "book entry system". (d) The Bank shall require each of its assignees (1) to conform to the notification requirements of this section in the event of further assignments, and (2) to require such conformity from that assign's assignees. (e) The County shall execute, at the Bank's request, a notice of assignment and other related documents that are reasonably necessary to protect the security interest in the Equipment or in this Contract and to maintain those security interests in perfected form. After the giving of notice described above to the County ,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 acknowledgement shall in no way be deemed necessary to make the assignment effective. SECTION 13. LIMITED OBLIGATION OF THE COUNTY NO PROVISION OF THIS CONTRACT 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 CONTRACT 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 CONTRACT 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 CONTRACT, 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 CONTRACT. The County may at the end of any fiscal year terminate its future Installment Payment obligations under this Contract if the County has not appropriated sufficient funds to make the next fiscal year's scheduled Installment Payments; however, during each fiscal year, the County shall exercise its best efforts to appropriate funds for Installment Payments due in the next fiscal year. If the County elects to terminate this Contract for such reason, it shall deliver the Equipment, at its own expense, to any location within the State of North 13 Carolina designated by the Bank. No provision of this Contract shall be construed to pledge or to create a lien on any class or source of the County 's moneys other than the Escrow Fund created pursuant to the Escrow Deposit Agreement referenced in Section 5.9(f). To the extent of any conflict between this Section and any other provision of this Contract, this Section shall take priority. SECTION 14. TAX-EXEMPT INTEREST 14.1. Intent of Parties. It is the intention of the parties hereto that the interest portion of the Installment Payments paid by the County to the Bank under this Contract shall be tax-exempt under Section 103 of the United States Internal Revenue Code. 14.2. Determination or Event of Taxability. If at any time there is a Determination of Taxability or Event of Taxability, as such terms are hereinafter defined, the principal portion of the indebtedness of the County to the Bank which is represented by the Installment Payments shall, from and after the Date of Taxability, as hereinafter defined, bear interest at the Prime Rate, as the Prime Rate fluctuates from time to time, plus one percent (1%) per annum (the "Alternative Rate of Interest") payable from the Date of Taxability to such time. In such event, the County also shall be required to pay to the Bank all amounts, if any, which may be necessary to reimburse the Bank for any interest, penalties or other charges assessed by the Internal Revenue Service and the Department of Revenue of the State of North Carolina against the Bank by reason of the Bank's failure to include the interest portion of the Installment Payments in its gross income for income tax purposes. Installment Payment amounts under this Contract shall be increased as a result of the increased interest rate and additional interest as a result of said rate increase on all previous payments shall be paid to the Bank upon demand thereof. The County shall pay to the Bank the above-mentioned Alternative Rate of Interest notwithstanding any transfer by the Bank or payment or prepayment by the County prior to the date such Determination of Taxability was made. An Event of Taxability shall mean any event, occurrence or situation, resulting from an action, or failure to act, by the County ,the effect of which is to cause the interest portion of the Installment Payments to be includible in the gross income of the Bank for federal income tax purposes. A Determination of Taxability shall mean a determination that the interest portion of the Installment Payments is included in gross income of the Bank for federal income tax purposes, which determination shall be deemed to have been made upon the occurrence of the first to occur of the following: (a) the date on which the Bank is advised in writing by the Commissioner or any District Director of the Internal Revenue Service that, as a consequence of an action, or failure to act, by the County ,the interest portion of the Installment Payments (hereinafter called "Interest") is included in the gross income of the Bank for federal income tax purposes; (b) the date on which the County receives notice from the Bank that the Bank has been advised (i) in writing that the Internal Revenue Service has issued a statutory notice of deficiency or similar notice to the Bank which asserts, in effect, that Interest received by the Bank is included in the gross income of the Bank for federal income tax purposes, as a result of an action, or failure to act, by the County , or (ii) by an opinion of counsel received by the Bank which concludes, in effect, that Interest is included in the gross income of the Bank for federal income tax purposes as a 14 result of an action, or failure to act, by the County ; (c) the day on which the County is advised in writing by the Commissioner or any District Director of the Internal Revenue Service that there has been issued a public or private ruling of the Internal Revenue Service that the Interest is included in the gross income of the Bank for federal income tax purposes as a result of an action, or failure to act, by the County ; or (d) the day on which the County is advised in writing by counsel to the Bank that a final determination, from which no further right of appeal exists, has been made by a court of competent jurisdiction in the United States of America in a proceeding with respect to which the County has been given written notice and an opportunity to participate and defend that the Interest is included in the gross income of the Bank for federal income tax purposes, as a result of an action, or failure to act, by the County . The Date of Taxability shall mean the first date upon which Interest is included in the gross income of the Bank for federal income tax purposes as a result of an Event of Taxability or a Determination of Taxability. 14.3. Duty to Notify the Bank. The County agrees to give prompt written notice to the Bank upon the County 's receipt of any oral or written notice or information from any source whatsoever to the effect that an Event of Taxability or a Determination of Taxability has occurred. SECTION 15. MISCELLANEOUS 15.1. Waiver.. No covenant or condition of this Contract can be waived except by the written consent of the Bank. Any failure of the Bank to require strict performance by the County or any waiver by the Bank of any terms, covenants or conditions herein shall not be construed as a waiver of any other breach of the same or any other term, covenant or condition herein. 15.2. Severability. In the event any portion of this Contract shall be determined to be invalid under any applicable law, such provision shall be deemed void and the remainder of this Contract shall continue in full force and effect. 15.3. Governing Law. This Contract- shall be construed, interpreted and enforced in accordance with the laws of the State of North Carolina. 15.4. Notices. Any and all notices, requests, demands, and other communications given under or in connection with this Contract shall be effective only if in writing and either personally delivered or mailed by registered or certified United States mail, postage prepaid, return receipt requested, addressed to the address of the recipient as described in this document, and shall be deemed to be received on the third day after the day it was deposited in the United States mail or on the day it was actually received, whichever is earlier. 15.5. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Contract. 15 15.6. Entire Contract. This Contract, together with the Exhibits and attachments hereto, constitutes the entire Contract between the parties and this Contract shall not be modified, amended, altered or changed except by written agreement signed by the parties. 15.7. Binding_ Effect. Subject to the specific provisions of this Contract, this Contract shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. 15.8. Time. Time is of the essence of this Contract and each and all of its provisions. 15.9. Execution in Counterparts. This Contract may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 16 IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed as of the day and year first above written. COUNTY OF ORANGE By: C y Title: (SEAL) Attest: ~ ~- Title: ~Q ~b ~~ ~~~~ [This instrument has been preaudited in the manner required by The Local Government Budget and Fiscal Control Act./® ~~'~~L~ County Finance Director] RBC CENTURA BANK By: Title: ~^ k.. ~T~~ 17 County's Address: County of Orange PO Box 8181 Hillsborough, NC 27278 Attn: Kenneth T. Chavious Bank's Address: RBC Centura Bank 3201 Beechleaf Court, Suite 700 Raleigh, North Carolina 27604 Attn: James M. Hansen 18 EXHIBIT A DESCRIPTION OF EQUIPMENT Installment Purchase Contract Date: November 12 , 2004 County : County of Orange Loan Amount: $287,178.00 Description and Department and Location of Equipment Serial Number Purpose or Function After Delivery • Two (2) Crane Carrier/LET 2-26 Trucks w/Labrie/Top Select 1000-42 bodies (VIN & Serial numbers will be determined) COUNTY OF ORANGE By: ~~ Title: T/ ~'.~..~ -' ~- "~./~c.~i Date: J"~i%, % ~-; ~~~ y 19 ~~~+~~ Jo'~~-~1~~~ Exhibit B-1 County of Orange Compound Period Annual Nominal Annual Rate 3.22% Event Start Date Amount Number Period End Date 1 Loan 12-Nov-04 287,178.00 1 2 Payment 12-Nov-05 63,074.34 4 Annual 11/12/2008 3 Payment 12-Oct-09 63,074.34 1 AMORTIZATION SCHEDULE -Normal A mortization, 36 0 Day Year # Date Payment Interest Principal Balance Loan 12-Nov-04 287,178.00 2004 Totals 0.00 0.00 0.00 1 12-Nov-05 63,074.34 9,247.13 53,827.21 233,350.79 2005 Totals 63,074.34 9,247.13 53,827.21 2 12-Nov-06 63,074.34 7,513.90 55,560.44 177,790.35 2006 Totals 63,074.34 7,513.90 55,560.44 3 12-Nov-07 63,074.34 5,724.85 57,349.49 120,440.86 2007 Totals 63,074.34 5,724.85 57,349.49 4 12-Nov-08 63,074.34 3,878.20 59,196.14 61,244.72 2008 Totals 63,074.34 3,878.20 59,196.14 5 12-Oct-09 63,074.34 1,829.62 61,244.72 0.00 2009 Totals 63,074.34 1,829.62 61,244.72 Grand Totals 315,371.70 28,193.70 287,178.00 ,, INCUMBENCY AND AUTHORIZATION CERTIFICATE In connection with the execution and delivery by the County of Orange (the "County ") of Installment Financing Contract dated November ,2004 with RBC Centura Bank, I, 11ti~.u. do hereby certify that I am the duly appointed ~~ b ti,~,~,c~.~f'the County of Orange ,apolitical subdivision and body corporate and politic existing under the laws of the State of North Carolina, and that I have custody of the official minutes and other pertinent records of that body. I further certify that: (1) As of the date of this certificate, the persons named below hold the positions listed opposite their names. (2) The persons named below were authorized by the governing body of County of Orange , in a regular meeting held on August 17, 2004 to execute and deliver on behalf of the County the aforesaid Installment Financing Contract to evidence the obligation of the County in connection with the purchase of personal property, including any fixtures (the "Equipment") and the creation of a security interest in the Equipment, together with all other documents and instruments required and contemplated by said Installment Financing Contract, and to carry out the terms of all of the foregoing, all under and pursuant to the provisions of Section 160A-20 of the General Statutes of North Carolina, as amended. Attached hereto is a true, complete and accurate copy of so much of the minutes of the August 17, 2004 Board of Commissioners meeting as relates to this transaction. Such action has not been amended, rescinded, terminated or otherwise revoked and is in full force and effect. (3) The persons named below were on the date or dates of the execution of the Contract, and are on the date hereof, the duly appointed and qualified incumbents of the offices of the County appearing at the left of their respective names and the signatures appearing at the right of their respective names are their genuine signatures. (4) The signatures set opposite the names and positions of the persons named below are such persons' true and authentic signatures. Name Kenneth T. Chavious Position Finance Director Signature (5) The Seal of the County is the same seal of which an impression appears below and on the Contract. (6) No litigation of any kind is now pending or, to the best of our information, knowledge and belief, threatened to restrain or enjoin the execution or delivery of the Contract, or in any manner questioning the proceedings and authority under which the Contract has been executed and delivered, or affecting the validity of such documents. (7) The County has obtained the proper authorization to execute and deliver the Contract and all related documents necessary to complete the transaction contemplated thereby. (8) The Contract has been duly authorized, executed and delivered by the County . Assuming the due authorization, execution and delivery of such agreement. by the Bank, such agreement constitutes a legal, valid and binding agreement of the County enforceable against the County in accordance with its terms. Such obligation does not constitute a pledge of the faith and credit of the State of North Carolina or of any county, city or other political subdivision of the Sate, including the County . The rights and enforceability of the obligations of the County under such agreement may be limited or otherwise affected by (a) bankruptcy, insolvency, reorganization, moratorium or other laws affecting the rights of creditors generally and (b) principles of equity, whether considered at law or in equity. There has been no material adverse change in the financial condition of the County since the date of the last annual financial statement of the County provided to the Bank. IN WITNESS WHEREOF, I have duly executed this certificate and have affixed to it the seal of County of Orange on this ~_ day of u-~~- 20~I Sl t/~~-- LAW OFFICES COLEMAN, GLEDHILL, HARGRAVE & PEEK A PROFESSIONAL CORPORATION 129 E. TRYON STREET P. O. DRAWER 1529 HILLSBOROUGH, NORTH CAROLINA 27278 919.732-2196 FAX 919-732-7997 www.cgandh.com OPINION OF COUNSEL OF COUNTY November 12, 2004 RBC Centura Bank 3201 Beechleaf Court, Suite 700 Raleigh, North Carolina 27604 SAMUEL E. COLEMAN GEOFFREY E. GLEDHILL DOUGLASHARGRAVE LE[GH ANN PEEK S. SEAN BORHANIAN MARKEE L. SQUIRE Re: Installment Financing Contract between the County of Orange ,North Carolina (the "County ") and RBC Centura Bank (the "Bank") We are acting as counsel to the County in connection with the authorization and delivery of the above-referenced Installment Financing Contract (the "Contract"). The County is entering the Contract to finance the acquisition by the County of certain equipment, including any fixtures described therein (the "Equipment"). The Contract is being entered into by the County pursuant to the provisions of Section 160A-20 of the General Statutes of North Carolina, as amended (the "Act"). This opinion is being rendered to the Bank in support of the obligation of County of Orange under the Contract and the documents related thereto. In connection with preparing this opinion, we have reviewed (a) the Constitution and laws of the State of North Carolina (the "State"), (b) certain proceedings taken by the governing body of the County , [including a resolution (the "Resolution") authorizing the filing of an application for approval of the Contract by the North Carolina Local Government Commission (the "LGC") if required,] (c) the form of the Contract, the Escrow Deposit Agreement dated November 12, 2004 between the County and RBC Centura Bank as Escrow Agent, and all other documents related thereto (collectively, the "Agreements"), and (d) such other information and documents as we have deemed appropriate. Based upon the foregoing, we are of the opinion, as of the date hereof and under existing law, that: The County is a body politic and corporate duly existing under the Constitution and laws of the State. The County has all necessary power and authority to (a) undertake the Project and (b) enter into and perform its obligations under the Agreements. 2. Action of the Board of Commissioners of the County was duly adopted. 3. Each of the Agreements has been duly authorized, executed and delivered by the County Assuming the due authorization, execution and delivery of any Agreement by the Bank, if required by the terms thereof, each such Agreement constitutes a legal, valid and binding agreement of the County enforceable against the County in accordance with its terms. Such obligation does not constitute a pledge of the faith and credit of the State of North Carolina or of any county, city or other political subdivision of the State, including the County . The rights and enforceability of the obligations of the County under the Contract may be limited or otherwise affected by (a) bankruptcy, insolvency, reorganization, moratorium or other laws affecting the rights of creditors generally and (b) principles of equity, whether considered at law or in equity. 4. The Project serves a public purpose for which public funds may be expended pursuant to the Constitution and laws of the State. 5. All necessary public hearings and the execution, delivery and performance of the Agreements by the County have been duly conducted and performed as required by applicable law. 6. To the best of my knowledge, all permits, consents, approvals or authorizations of all governmental entities and regulatory bodies, and all filings and notices required on the County 's part to have been obtained or completed in connection with the authorization, execution and delivery of the Agreements, the consummation of the transactions contemplated thereby and the acquisition of the Project, including all necessary approvals from the North Carolina Local Government Commission have been obtained pursuant to Section 160A-20 and Chapter 159, Article 8 of the North Carolina General Statutes, have been obtained and are in full effect, and I know of no reason why any future required permits, consents, approvals, authorizations or orders cannot be obtained as needed. 7. There is no litigation or any governmental administrative proceeding to which the County (or any official thereof in an official capacity) is a party that is pending or, to the best of my knowledge after reasonable investigation, threatened with respect to (a) the County 's organization or existence, (b) its authority to execute and deliver the Agreements or to comply with the terms thereof, (c) the validity or enforceability of any of the Agreements or the transactions contemplated thereby, (d) the title of the County officers who executed the Agreements, (e) any authority or proceedings relating to the County's execution or delivery of any of the Agreements, or (f) the undertaking of the transactions contemplated by the Agreements. The opinions expressed above are subject to the following qualifications and limitations: (a) The enforceability of the Contract will be subject to bankruptcy, insolvency and other laws affecting creditors rights generally. To the extent that remedies under the t • Contract require enforcement by a court of equity, the enforceability thereof maybe limited by such principles of equity as the court having jurisdiction may impose. (b) Pursuant to the Act, no deficiency judgment may be rendered against the County in the event of a breach by the County of its obligations under the Contract, including its obligation to pay the Installment Payments under the Contract, and the taxing power of the County is not pledged, and may not be pledged, to pay any obligation of the County under the Contract. (c) Under North Carolina law, the recovery of attorneys' fees is limited by and subject to the procedures and limitations set forth in Section 6-21.2 of the General Statutes of North Carolina, as amended. (d) We have assumed for purposes of all of our opinions contained herein that the Bank will exercise its rights under the Contract in good faith and in a commercially reasonable manner. This opinion is for the sole benefit of the Bank and any assignee of the Contract and may not be relied upon by any other person without our prior written consent. Very truly yours, COLEMAN, GLEDHILL, HARGRAVE & PEEK, P.C. G~~u¢ Isgaetters~rbcfmancingcounselopin.ltr t r • The County pledges to notify the Bank of a loss in whole or in part within ten (10) days of any loss and agrees to cooperate with the Bank in obtaining insurance proceeds or through indemnification for any losses. The County further certifies that the County takes full responsibility of notifying the insurance agency/company and maintaining continuous coverage on the collateral. COUNTY OF ORAN/GE~ Title: / °~'~-"'~G-- /~„«:_~.`-~, Date: ~r1. ~~ , ~~`~" lsg:orangecounry\Counry of orange287M NBQ IFC 11-01-04 with GEG revisionsclean.doc 2$