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HomeMy WebLinkAboutAgenda - 12-05-94 - VII-A 1 ORANGE COUNTY BOARD OF COMMISSIONERS Action Agenda Item No Vi--1F ACTION AGENDA ITEM ABSTRACT Meeting Date: December 5, 1994 SUBJECT: Elementary School Financing and Site Acquisition DEPARTMENT: Manager/Finance/Attorney PUBLIC HEARING YES X NO ATTACHMENT(S) : INFORMATION CONTACT Public Hearing Notice Rod Visser, ext 2300 Summary of Private Placement Proposals Geof Gledhill, 732-2196 NationsBank Financing Proposal Ken Chavious, ext 2450 Draft Financing Agreement TELEPHONE NUMBER Hillsborough 732-8181 Chapel Hill 968-4501 Mebane 227-2031 Durham 688-7331 PURPOSE: To conduct a public hearing on matters related to the financing of the new Chapel Hill-Carrboro City Schools (CHCCS) elementary. school, and to approve a financing agreement for the new school. BACKGROUND: At the September 20, 1994 meeting, the Board of Commissioners approved the financing of up to $10.6 million for the construction of the new CHCCS elementary school, which will be situated on a portion of the CHCCS owned property also occupied by the new McDougle Middle School. Subsequent discussion between School and County staffs resulted in a plan to seek financing of $9.6 million, with the balance of the project funding to come from sales tax and impact fee revenue already budgeted in the current Capital Improvement Plan. At the meeting on November 15, 1994, the Commissioners established December 5 as the date for a public hearing on the proposed financing agreement and on the acquisition by the County of the property upon which the elementary school will be built. County staff disseminated Requests for Proposals for financing the new school construction to interested lenders. Proposals were due to the County by November 18. County staff received and reviewed ten proposals for financing using Certificates of Participation (COPS) and five proposals for "private placement. " The COPs proposals included interest rates that ranged from the mid-high 6 percent range. Because of the higher interest rates and issuance costs associated with the COPs proposals, staff recommends that the Board not pursue COPs financing for the elementary school project. 2 The County received a number of very aggressive private placement bids, several with fixed rates for the life of the proposed loan. Staff recommends that the Board enter into a financing agreement with Nationsbank for a $9.6 million, 15 year, fixed rate loan at 5.71%. Nationsbank offered four options, described in detail in their attached proposal. The 15 year construction draw option will provide the County with the lowest total interest cost, just over $4 million. By way of comparison, this option would result in interest savings of almost $1 million over the best COPs proposal that the County received. The Nationsbank proposal will result in annual savings of more than $80, 000, compared to debt service funds that have been budgeted in the school CIP for the new elementary school project. The Local Government Commission will consider the County' s application for approval of the financing agreement at their meeting on Tuesday, December 6. Assuming that both the Board and the LGC approve the financing, CHCCS would award bids with construction to begin in January 1995. CHCCS has indicated that it is essential that construction begins in January to lead to completion of the new school in time for the 1996-97 school year. RECOMMENDATION: The Manager recommends that the Board of Commissioners conduct the public hearing, and approve the proposed financing agreement with Nationsbank, subject to review by the County Attorney and Bond Counsel. 3 NOTICE OF PUBLIC HEARING CONCERNING A P tOPOSED INSTALLMENT PAYMENT AGREEMENT OF THE COUNTY OF ORANGE, NORTH CAROLINA TO FINANCE A NEW ELEMENTARY SCHOOL FOR THE CHAPEL HILL CARRBORO CITY SCHOOLS AND THE ACQUISITION OF PROPERTY ! FOR SUCH FINANCING. NOTICE IS HEREBY GIVEN of a public hearing to be held at 7:30 P.M. on December 5, 1994, in the Old Orange County Courthouse in Hillsborough, North Carolina, for the purpose of considering whether the Board of Commissioners for the County of Orange, North Carolina should approve a proposed installment payment agreement andcerttain related documents under which the County would obtain financing of the acquisition, construction and equipping of a project consisting of a new elementary school for the Chapel Hill i Carrboro City Schools on a site adjacent to the site of McDougle Middle School, including parking areas, sidewalks and other appurtenant facilities, landscaping and other related site work. Under the proposed installment payment agreement and related documents the County Would secure the repayment by it of moneys advanced pursuant to such installment payment agreement by granting a security iikterest in such project and certain related property, including to site of such project. At such public hearing the Board of Commissioners will also consider whether the bounty should acquire the site of such project from the Chapel Hill - Carrboro City Schools to facilitate such finan' in � g• Beverly A. Blythe Clerk to the Board of Commissioners for the County of Orange, North Carolina • TOTAL P.08 SUMMARY OF FINANCING PROPOSALS NEW ELEMENTARY SCHOOL BB&T SOUTHERN NATIONAL FIRST UNION WACHOVIA NATIONSBANK Option A_ Variable Rate Offered two Options Option A. 20 yr fixed fully Syr. fixed 10yr var yr 1 5.27% 10 and 12 year 6.02% fixed rate funded and const draw Yrs 1-5 6.03% yr 2 5.60% 15 year financing term was 15 yrs total interest options. Yrs 6-15 68% of Bank Prime max of yr 3 5.81% requested annual payment $5,115, 112 10.5% min of 5.25%. total int cost yr 4 5.93% requirement exceeds debt service fully funded 5.75% based on 68% of current Prime yr 5 5.98% budget Option B. const draw 5.78% $5,106,764 yr 6 6.03% 10 yr fixed 5 year total interest cost yr 7 6.07% floating. ff- $6,678,724 Option B. yr 8 6.12% yrs.1-10 5.83% cd - $5,908,527 3yr and 4yr fixed yr 9 6.24% yrs,'10-15 62% of 8yr variable. yrl0 6.36 prime, floor 5.15 15 yr fixed fully yrs 1-3 5.87% yrs 11-15 77% of prime,ceiling ceding 9.95% funded and const draw yrs 4-7 6.39% of 9.59% floor of 5.01% total total interest cost options yrs 8-15 same as A interest costs est.,55,258,011 $5,288,419 total interest fully funded 5.64% cost$5,205,525 County pays all expenses except Option C. const draw 5.71% trust fees and bank counsel fees Const. Draw 10yr total interest cost Option C. fixed Syr float. ff- $4,753,736 lyr and 6yr fixed yrs 1-10 6.06% cd - 54,021,156 8yr variable. yrs 10-15 same as yr 1 5.25% B. total interest cost Closing costs paid by yrs 2-7 6.33% 55,487,2809. bank. yrs 8-15 same as A total interest All closing costs paid cost $5,207,759 by County. County pays all closing costs except bank originating fees bank escrow fees appraiser fees Tel 919 942-5183 5 NationsBank Fax 919 967.3881 Commercial Banking Group . 0, Box erci 570 Chapel Hill,NC 27514-0570 NationsBank • November 18, 1994 Mr. Ken Chavious Finance Officer Orange County Finance Office P.O. Box 8181 Hillsborough, NC 27278 Dear Mr. Chavious: NationsBank is pleased to have the opportunity to bid on Orange County's Proposed Installment Purchase Financing request. Enclosed please find our commitment letter and related attachments. The commitment letter presents four options featuring a 15 and a 20 year amortization, each with two funding choices. With the fully funded options,The Orange County will be able to draw the full loan aamount drawn a needed for funds can then be housed in an escrow account have construction. With the construction draw options, Orange County will have access to the loan on a monthly basis according provided by the County. We believe that matching the loan draws with the construction tim will instance, save Orange County a significant amount of interest 678 723.78 compares the total interest expense described described in Exhibit B of favorably with the total interest expense is si cant and is possible due to $5,908,527.08. This $770,19 ono savings outstanding principal amount. the fact that interest accrues Y Should Orange County choose a fully funded interest rate option, NationsBank would establish an escrow account for moons for this account.excess funds over the construction placed in a Public Investment Account, which First, the funds could p currently bears an interest rate of 2.42% with a yield of 2.45%. This option USA NV Official Sponsor Member FDIC 19941799E 6 would allow Orange County immediate access to the funds at any e Additionally, NationsBank will secure these deposits with U.S. Treasuries. The second option would be to invest the funds in Orange County's 14-day Time Open Account, which currently bears an interest rate of 5.93% Orange County would have access to the funds at any f 5. s notice. NationsBank could accommodate any withdrawal�s given 30 Orange County might have, that Account will also be secured by U.S. s notice. The Time Open Both the Public Investment and the Time Open interest rates are subject weekly. ubject to We have also attached an interest revenue chart the amount of interest you could earn by placing (Exhibit proceeds in escrow. It is evident from comparing this chart with the amortization schedules escrow. you would save more money by choosing a construction draw option han you would gain from putting excess funds into escrow. It should also be no Yo that since the escrow account interest rates are subject to change week Y funded financing. interest rate risk increases with fully g eeklynancing. Ken, we look forward to hearing from you soon. Please call questions you may have about our proposal. with any Yours truly, c9ite Denise Corey Chapel Hill City Executive Stephanie Leo 918-4203 Assistant Vice President 918-4204 NationsBank Tel 919 942-5183 Commercial Banking Group Fax 919 967-3881 7 P. O. Box 570 Chapel Hill,NC 27514-0570 • NationsBank November 18, 1994 Mr. Ken Chavious Finance Officer Orange County Finance Office P.O. Box 8181 Hillsborough, NC 27278 Dear Mr. Chavious: NationsBank of North Carolina, N.A. ("Bank") is pleased to provide a financing commitment to Orange County ("Borrower") pursuant to the Installment Financing Proposal dated November 4, 1994. Terms and conditions are as follows: BORROWER: Orange County, North Carolina. PURPOSE: To provide financing for the construction and improvements of an elementary school in Carrboro plus some equipment purchases. TYPE OF FACILITY: The Borrower will have the choice of the following facility options: 1) A term loan to be fully funded at closing; OR 2) A term loan to be drawn upon monthly according to the construction schedule provided by Orange County (attached). AMOUNT: Up to $9,600,000.00. INTEREST RATE: The Borrower will have the choice of the following interest rate options: 20 Year Amortization 1) Fully funded 5.75% (Exhibit A) 2) Construction Draw 5.78% (Exhibit B) USA f4, Official Sponsor 1994/1996 Member FDIC 8 15 Year Amortization 3) Fully funded 5.64% (Exhibit C) 4) Construction Draw 5.71% (Exhibit D) For any interest rate option, interest will be calculated on the basis of the 365/365 day method. TERMS: Equal payments of principal and interest shall be due semi- annually beginning on July 15, 1995. See attached amortization schedules for payment amounts. FEE: The Bank's standard fee of 1% will be waived. MATURITY: 20 Year Amortization 1) Fully Funded loan will mature January 15, 2015. 2) Construction Draw loan will mature on July 15, 2014. 15 Year Amortization 3) Fully Funded loan will mature January 15, 2010. 4) Construction Draw loan will mature on July 15, 2009. SECURITY: A first security interest in the land and improvements being financed and as described in the Orange County Installment Financing Proposal dated November 4, 1994.. CONDITIONS TO FIRST ADVANCE: Prior to making the first advance to the Borrower, the following precedent conditions shall have occurred: (A) The Bank shall have received, duly executed, all promissory notes, loan agreements, deeds of trust, security agreements, financing statements, borrowing authorization documents and resolutions, and other documents necessary or advisable in connection with the loan, all of which shall be in form and substance satisfactory to Orange County, and to the Bank and its counsel. A complete legal description of the collateral will be sent to the Bank by January 15, 1995, if this commitment is accepted. It should also be noted that the Bank will not require a new survey, appraisal, or environmental report to be obtained; however, the Bank would like copies of these items if they are available. 9 (B) The Bank shall have received the written opinion of Borrower's counsel as to the validity and enforceability of the loan documents and such other matters as the Bank may reasonably require. The Bank shall also have received the opinion of Borrower's counsel that all security interest in collateral constitutes a first priority lien. OTHER CONDITIONS: This financing commitment is made under provisions of North Carolina General Statute 160A-20, and is subject to approval by the Local Government Commission. This financing commitment is contingent upon Orange County's qualification as a small issuer pursuant to IRS Section 265 (b) 3. If Orange County should issue more than $10,000,000.00 in tax-exempt obligations during the calendar year 1995, the Bank will adjust its interest rate on this credit facility to the extent necessary to produce the same yield to the Bank using the 100% TEFRA Disallowance Rate as required if Orange County is classified as a "large issuer." The loan documents shall include a non-appropriation clause, and a "no deficiency judgment" provision. The facility will close by January 15, 1995, with the first draw funded on that date. _ Should Orange County choose the fully funded option, NationsBank will establish an Escrow Account which will house the advanced funds. The County may withdraw funds from the account as needed with each draw approved by NationsBank. The Bank will engage its counsel to prepare loan documents, including all documents required to perfect the Bank's real estate lien. All the Bank's legal expenses associated with closing this facility will be paid by the Bank > Although NationsBank is waiving the requirement for any environmental due diligence, Orange Count would be responsible for and` pay ,any expenses assessed due to environmentarntamination which is identified prior to or after closing of this credit facility. All requested addendum documents are attached to this commitment letter. If the above financing offer is acceptable to you, please acknowledge by having the appropriately authorized representative(s) of Orange County execute the enclosed copy of this letter and return it to the undersigned. The aforementioned interest rates are good through November 25, 1994. If this commitment is not accepted by that date, the interest rates contained herein are subject to change. 10 We appreciate having an opportunity to work with Orange County on this new project and hope you find our financing offer acceptable. If you have. any questions, please contact us. We will be glad to meet with both Orange County and the Local Government Commission, if necessary, to address any issues or terms of our offer. We look forward to hearing from you soon. SLsaerely, T enise Corey Stephanie Leo City Executive Assistant Vice President 919-918-4203 919-918-4204 The above financing commitment to Orange County, North Carolina is hereby accepted this day of , 1994. Orange County, North Carolina By: Title: • 11 .„ PB C+L / TRS G PEARCE, BRINKLEY, CEASE & LEE, P.A. THE ROBERTSiSTACY CROUP, P.A. Chapel Hill Carrboro New Elementary School August 4, '94 Project 995 / 141 • PBC+L/TRSG Total Project Budget Cash Flow Date Activity A/E Billings Construction" Total 6-Apr-94 Partial Architectural Schematics 18,720.00 N/A 18.720 00 12-May-94 Final Architectural Schematics 31,634.00 NA 31.634.00 13-Jun-94 Partial Design Development 30,128.80 • w., 30.128.80 3-Aug-94 Final Design Development 85,751.20 NA 85,751.20 6-Sep-94 Partial Construction Documents 77,253.33 WA 77,253,33 5-Oct-94 Partial Construction Documents 77,253.33 • N/A 77.253,33 3-Nov-94 Final Construction Documents , 77,253.34 WA 77,253.34 5-Dec-94 Bidding& Negotiation 28,970.00 WA ' 28.970.00 Subtotal 426,964,00 426,964.00 Jan-95 Construction - month 1 7,242,50 176,447.84 183,690.34 v Feb-95 Construction - month 2 7,242.50 352.939,47 360.181.97 Mar-95 ConsL'uction - month 3 7,242.50 488.189.99 495,432.49 / Apr-95 Construction -month 4 7,242.50 529.022.77 536.265 27 • May-95 Construction - month 5 7,242.50 618,288.12 625.530.62 Jun-95 Construction -month 6 7,242.50 618,288.12 625,530.62 Jul-95 Construction - month 7 7.242,50 656,931.13 664, 173.63 Aug-95 Construction - month 8 7,242.50 792,181.65 799,424.15 Sep-95 Construction- month 9 7.242.50 837,553.69 844,796.19 • Oct-95 Construction -month 10 7,242,50 837,308.96 844.551.46 Nov-95 Construction - month 11 7,242.50 669,812.13 677.054.63 Dec-95 Construction -month 12 7,242.50 515,240.10 522,482.60 Jan-96 Construction -month 13 7,242.50 489,478.09 496.720.59" Feb-96 Construction -month 14 7.242.50 399.311.08 406.553,58'' Mar-96 Construction -month 15 7,242.50 799,31 1.08 806.553.58 Apr-96 Construction - month 16 7,242.50 440,496.79 447.739.29 ' Subtotal 115,880.00 9,220,801.00 9.336,681.00 • Total 542,844.00 9.220.801.00 . 9,763,645.00 " Monies during construction include testing,permits.movable equipment and contingency Peleee.9ne.rley.Cease!s lee.P A. The!ahem/9acy Croup,0A. 4b0 Harre—c 4 Court.Seim 1CS 411 We9etlau 9outVue,witc G FAlc:gt.NC 27609 ;Weigh NC nor Win s7.97st t91a1g mtut F. w1 ot7V403S fAx t9191a11.t 533 TOTAL P.02 NOU 11 '94 11: 10 gig 4d1 innq PAGF.A2 EXHIBIT A AMORTIZATION SCHEDULE 12 Note:This amortization is an estimate only. Actual billing for interest expense will be calculated daily. OPTION ONE - FULLY FUNDED (20 YR) PRINCIPAL BAL RATE PAYMENT INTERBST k1INCIPAL Jul-95 $9,600,000.00 5.75% $406,969.00 $276,000 00' $130,96:,00 Jan-96 $9,469,031.00 5.75% $406,969.00 $272,234 64: $134,734 36: Jul-96 $9,334,296.64 5.75% $406,969.00 $268,361034 $1.38,607 97 Jan-97 $9,195,688.67 5.75% $406,969.00 $264,376 05' $142,592:95 Jul-97 $9,053,095.72 5.75% $406,969.00 $260,276 56 $146, 692;501 Jan-98 $8,906,403.22 5.75% $406,969.00 $256,059 09 1 $ 5Q909 91 Jul-98 $8,755,493.31 5.75% $406,969.00 Jan-99 $8,600,244.75 5.75% $406,969.00 $247,25704. $169,711;96 Jul-99 $8,440,532.78 5.75% $406,969.00 $242,. 65 32; $164)303 68` Jan-00 $8,276,229.10 5.75% $406,969.00 $237,94159 $169,022 4I Jul-00 $8,107,201.69 5.75% $406,969.00 $233,082 05 $9:73,886.95:' Jan-01 $7,933,314.74 5.75% $406,969.00 $228,082 80 $178,886 2G. Jul-01 $7,754,428.53 5.75% $406,969.00 $222,339 82. $184,029 18 Jan-02 $7,570,399.35 5.75% $406,96900 $217,648 98 $189,32]:02 : Jul-02 $7,381,079.34 5.75% $406,969.00 $212,206 03' $7:94,76297,' Jan-03 $7,186,316.37 5.75% $406,969,00 ;$206,606 60 $200,362 40 Jul-03 $6,985,953.96 5.75% $406,969.00 $200,$46 1.8: $206,122 82 Jan-04 $6,779,831.14 5.75% $406,969.00 $194,9201.5; $212,04885: Jul-04 $6,567,782.28 5.75% $406,96900 $188,823 74 $218,45,26: Jan-05 $6,349,637.02 5.75% $406,969.00 $182,5520 6 $224,416 94 Jul-05 $6,125,220.09 5.75% $406,96900 $1'76„x.00 09 $230,868,92 Jan-06 $5,894,351.17 5.75% $406,969.00 169,4612 60 $237,506:40 Jul-06 $5,656,844.76 5.75% $406,969.00 $162,834 29 $244,334,71 Jan-07 $5,412,510.05 5.75% $406,969.00 $155 609 66 $251 359:34 Jul-07 $5,161,150.71 5.75% $406,969.00 $148,38308 $258,58 92.,; Jan-08 $4,902,564.80 5.75% $406,969.00 $1,40,94874 $266,020 26 Jul-08 $4,636,544.53 5.75% $406,969.00 $133,300 66 $273,66&.3# Jan-09 $4,362,876.19 5.75% $406,969.00 $125,482 69 $281,536131`: Jul-09 $4,081,339.88 5.75% $406,969.00 1.1$44intRaillf289M0p$1111 Jan-10 $3,791,709.40 5.75% $406,969.00 $109,01.1: $297,357 35... Jul-10 $3,493,752.05 5.75% $406,969.00 $1.00;445 37 $3Q6,523,63 Jan-11 $3,187,228.42 5.75% $406,969.00 ..;: $91;fi32 82 $31.5,33§1.$, Jul-11 $2,871,892.24 5.75% $406,969.00 " ;$82t X66.90.:.,.,,,$324,402 ,0_, Jan-12 $2,547,490.14 5.75% $406,969.00 Op $'73,240 34 $333 728;86 Jul-12 $2,213,761.48 5.75% $406,969.00 $63,645 64 $$43,'323 36 .:::.;:.: Jan-13 $1,870,438.12 5.75% $406,969.00 $.53,775 1-0 $858,193 90;: Jul-13 $1,517,244.22 5.75% $406,969.00 $43,62077 $363,348 23 Jan-14 $1,153,895.99 5.75% $406,969.00 $33,17451. $ 73,794 49 Jul-14 $780,101.50 5.75% $406,969.00 ,.:$22427,92 $8$4,54.1;08:; ... .......................................................................... Jan-15 $395,560.42 5.75% $406,969.00 ; $ 1,372 36; $385,56:42 TOTAL PAYMENTS $6,678,723.78 $9,600,000.00 EXHIBIT B AMORTIZATION SCHEDULE 13 Note:This amortization ie an estimate only, Actual billing for interest ezpenae will be calculated daily. OPTION TWO DRAW(20 YR) PRINCIPAL BAL. DRAW RATE PAYMENT INTR3aS' PRTNCTI�AI Jan 95 $183,690.34 $183,690.34 5.78% Feb-95 $543,872.31 $360,181.97 5.78% Mar-95 •$1,039,304.80 $495,432.49 5.78% < Apr-95 $1,575,570.07 $536,265.27 5.78% May-95 $2,201,100.69 $625,530.62 5.78% Jun-95 $2,826,631.31 $625,530,62 5.78% Jul 95 $3,490,804.94 $664,173,63 5.78% $407,966 00 $5713036;;. $350835 64' Aug-95 $3,939,393.45 $799,424.15 5.78% Sep-95 $4,784,189.64 $844,796.19 5.78% Oct-95 $5,628,741.10 $844,551.46 5.78% Nov-95 $6,305,795.73 $677,054.63 5.78% ». Dec-95 $6,828,278.33 $522,482.60 5.78% Jan-96 $7,143,116.34 $496,720.59 5.78% $407,966 00 $22fi.083:42: $1$1,882:58: .. . ........................................:.........:.. ........: Feb-96 $7,549,669.92 $406,553.58 5.78% Mar-96 $8,356,223.50 $806,553.58 5.78% Apr-96 $9,067,281.78 $711,058.28 5.78% Jul-96 $9,067,281.78 5.78% $407,966 00 $25:130968 $1665632: Jan-97 $8,910,625.46 5.78% $407,966 00 X257;517 08: 1150{ 832 Jul-97 $8,760,176.54 5.78% $407,966 00 $23;169 10. 154}796 90 Jan-9S $5,605,379.64 5.78% $407,966.0 0 $248,695 47. $150,270 53' Jul-98 $8,446,109.11 5.78% $407,966 00 ; $244;092. 5 $163,473 45 Jan-99 $8,282,235.66 5.78% $407,966•00 $23935&fi $16a,S0 Jul 99 $8,113,626.27 5.78% $407,966 00 2$4.483 80 $.1'73,482:20;: Jan-00 $7,940,144.07 5.78% $407,966 00 $229 47 1& $17$,49 84; Jul-00 $7,761,648.24 5.78% $407,966 00 $224,311+63.. $]83x654 37 Jan 01 $7,577,993.8? 5.78% $407,966.0 0 $21�J,©Q4 II2. $1,80,901 8 ' Jul-01 $7,389,031.89 5.78% $407,966 00 $2185432: x:194,42298; Jan 02 $7,194,608.91 5.78% $407,966 00 $207924 0 $ 0,041811 Jul 02 $6,994,567.11 5.78% $407,966 00 : 't2O22,;14`2.93 $2O 182341 Jan-03 $6,788,744.10 5.78% $407,966 00 ,. n196,194?0 $ 11777130 Jul 03 $6,576,972.81 5.78% $407,966.00 : :::.$190 014,5] .8217,891.49, Jan-04 $6,359,081.32 5.78% $407,966 00 $18377745, $224,18855 Jul-04 $6,134,892.77 5.78°/a 407 966.00 <<s ?_ .,,:. $ :>;:::41:7A 98.40.:..::.3280;a,3:4m(1:. Jan-05 $5,904,225.17 6.78% $407,966.00 ' : t0,63211. 2x7+333:89:: Jul 05 $5,666,891.28 5.78% $407,966•00 $1 ,7? .1 ._ `144,13 4 Jan-06 0 n .-,422,698.44 7 5. 8/o $40?966.00 >'><> : :5�7�5��8 �«>< '25:1'�5�?Q2< 6 ° Jul-06 5 17 4 1 48 42 5.78/0 40?96fi.00 >?> ::,> ;;..<. .:,.>;>;.;;,;: >'>:?�:;»...;,;>;,.,,.;,._ .,.: $ , _ $ . .;:..�149,..45486;... :;$25�i8T II4,> Jan-07 $4,912,937.28 5.78% $407,966.00 :. $1 1983 89 $ 6 ,982 1 Jul 0? $4,646,955.17 5.78% $407,966 00 ::. .$184,297.00 $`278,66900 Jan 08 $4,373,286.17 5.78% $407,966 00 ... $j26,387 97 ; $281,..".x..78 03 Jul-08 $4,091,708.14 5.78% $407,966 00 81.18,250.8`7, $28?#x7156`3 Jan-09 $3,801,992.51 5.78% $407,966.00 :: $109,87759 $ $,Q8$ Jul 09 $3,503,904.09 5.78% $407,966 00 ..::::8101.,26283: .. .,.:8306,7[13,17,:: Jan-10 $3,197,200.92 5.78% $407,966 00 327393 1.. ...$33x5,56 .8 Jul-10 $2,881,634.03 5.78% $407,966 00 .__..; 83,2'1922;,;..:$324,6861& ............. .....:..:.:.:.:..::...........:..:.:::,..:...:......... Jan 11 $_7556,947.25 5.78% 407 966.00 <> < $`F3€1957&` > 324,07022 0 Jul-11 $2,222,877.03 5.78/0 407 966 00 :: _:;»:;,,;.;:. `..:_.: ' :>.:::::i.;«6;ii<; $ , �7?4,241,1.5..........X343;724�.5.: .............. ................................ ...................... Jan-12 $1,879,152.17 5.78% $407,966.00 $54,373? 0 $3 3,65850); Jul-12 $1,525,493.67 5.78% $407,966 00 $44;086 77.; _..,$363,879.23 ................:.......:.....:: ..-................................... Jan-13 $1,161,614.44 5.78% $407,966.0 0 $33;570 66 : 3' 4}395 24:: Jul 13 $787,219.09 5.78% $407,966 00 $22>750.€23:. $385,215 3T Jan-14 $402,003.73 5.78% $407,966 00 $11,.&17 91: $396,348:09: Jul-14 $5,655.63 5.78% $407,966 00 $:1fi8 45.' ;$5,155:63. TOTAL PAYMENTS $5,908,527.08 $9,600,000.00 14 EXHIBIT C AMORTIZATION SCHEDULE Note:This amortization is an estimate only. Actual billing for interest expense will be calculated daily. OPTION THREE - FULLY FUNDED (15 YR) PRINCIPAL BAL RA'Z'E PAYMENT INTEREST PRINCIPAL; Jul-95 $9,600,000.00 5.64% $478,458.00 $270,722 00 $227,738 00 Jan-96 $9,392,262.00 5.64% $478,458.00 ;$264,861 79 $213,596.11'.... Jul-96 $9,178,665.79 5.64% $478,458.00 ;$258838 38 $219,6192 Jan-97 $8,959,046.16 5.64% $478,458.00 $252,'6450 $225,81290`.' Jul-97 $8,733,233.27 5.64% $478,458.00 $246;277 8 $23 , 80 82' Jan-98 $8,501,052.44 5.64% $478,458.00 $239x:729 6:8 $238,728 32 Jul-98 $8,262,324.12 5.64% $478,458.00 $232,.997 54 $245,460 46 Jan-99 $8,016,863.66 5.64% $478,458.00 $226,075.56 $252,382.44 Jul-99 $7,764,481.22 5.64% $478,458.00 $218,958 37 $259,49 63 Jan-00 $7,504,981.59 5.64% $478,458.00 $211,640.48 $266,817 52 Jul-00 $7,238,164.07 5.64% $478,458.00 $204,116.23 $274;341 77 Jan-01 $6,963,822..30 5.64% $478,458.00 $196,379 79 $282,478 21 Jul-01 $6,681,744.08 5.64% $478,458.00 $188x425 8 $290,032 82; Jan-02 $6,391,711.27 5.64% $478,458.00 $1.80x246 26 $298,2.11 74 Jul-02 $6,093,499.53 5.64% $478,458.00 $171,836 69 $306,621.31 Jan-03 $5,786,878.21 5.64% $478,458.00 $163,189.97 $315,26&03 Jul-03 $5,471,610.18 5.64% $478,458.00 $154,299.41 $324,158.59 Jan-04 $5,147,451.58 5.64% $478,458.00 $145,158.13 $333,299.87 Jul-04 $4,814,151.72 5.64% $478,458.00 $1.35T75/J 08 $342,698 92 Jan-OS $4,471,452.80 5.64% $478,458.00 $126,094.97 $352,363.03 Jul-05 $4,119,089.77 5.64% $478,458.00 $116,158.33 $362,299.67 ......:. Jan-06 $3,756,790.10 5.64% $478,458.00 > $105,941 48 $8'7 ,516 5 Jul-06 $3,384,273.58 5.64% $478,458.00 $95,436.51 $383,021.49, Jan-07 $3,001,252.09 5.64% $478,458.00 ;<: $84x635.3 $393,822.69 Jul-07 $2,607,429.40 5.64% $478,458.00 :'>' $73,529.51 $404,928.49 Jan-08 $2,202,500.91 5.64% $478,458.00 $62,110.53 $416,$47 47 Jul-08 $1,786,153.44 5.64% $478,458.00 $50,369.53 $428,088.47 Jan-09 $1,358,064.96 5.64% $478,458.00 $38,297.43 $440,160.57 Jul-09 $917,904.40 5.64% $478,458.00 :': $288:4.90 $452,573.10;, Jan-10 $465,331.30 5.64% $478,458.00 ... $13,122 34 $465,331.30 TOTAL PAYMENTS $4,753,735.64 $9,600,000.00 • EXHIBIT D AMORTIZATION SCHEDULE 15 Note:This amortization is an estimate only. Actual billing for interest expense will be calculated daily. OPTION FOUR- DRAW (15 YR) PRINCIPAL BAL. DRAW RATE PAYMENT INTEREST. : PRINCIPAL Jan-95 $183,690.34 $183,690.34 5.71% Feb-95 $543,872.31 $360,181.97 5.71% Mar-95 $1,039,304.80 _$495,432.49 5.71% Apr 95 $1,575,570.07 $536,265.27 5.71% May-95 $2,201,100.69 $625,530.62 5.71% Jun-95 $2,826,631.31 $625,530.62 5.71% Jul-95 $3,490,804.94 $664,173.63 5.71% $480,650.00 :$56,438 47 .... .$4)4,21;1 53 Aug-95 $3,866,017.56 $799,424.15 5.71% Sep-95 $4,710,813.75 $844,796.19 5.71% Oct-95 $5,555,365.21 $844,551.46 5.71% Nov-95 $6,232,419:84 $677,054.63 5.71% Dec-95 $6,754,90244 $522,482.60 5.71% Jan-96 $7,251,623.03 $496,720.59 5.71% $480,650.00 $129,048 71 : $351,606 29 Feb-96 $7,306,570.32 $406,553.58 5.71% Mar-96 $8,113,123.90 $806,553.58 5.71% ; Apr-96 $8,824,182.18 $711,058.28 5.71% Jul-96 $8,824,182.18 5.71% $480,650.00 $241,325,615 . $239,324 35 Jan-97 $8,584,857.83 5.71% $480,65 0.00 $245,09769 $235,552 31 Jul-97 $8,349,305.52 5.71% $480,650.0023$3"72 6"l $242,2'1'7 33:' Jan-98 $8,107,028.19 5.71% $480,650.00 $231;455 65 $240,134 85 Jul-98 $7,857,833.85 5.71% $480,650.00 $224,341 16 $266,30$84:!. Jan-99 $7,601,525.00 5.71% $480,650.00 $217,023,54 $263,626 46 0 Jul-99 $7,337,898.54 5.71/o $480,650.00 $209,497 03 $`271,153 00 ° Jan-00 $7,066,745.55 5.71% $480,650.00 ° �20,L,�55 5�3 $�7$,8�4 41 Jul-00 $6,787,851.13 5.71% $480,650.00 . $133,703 15 $2$6,$56 85;; Jan-01 $6,500,994,28 5.71% $480,650.00 $185, O889 $295,044.61 Jul-01 $6,205,947.67 5.71% $480,650.00 ° $17717981 $303,470�.9'. Jan-02 $5,902,477.48 5.71% $480,650.00 $168,5157 ,,, ,_ ;$312,1342'1. Jul-02 $5,590,343.21 5.71% $480,650.00 ...$15$,6U4.$t $ 21,045 70. ....................:...-........................ ...............................: 0 Jan-03 $5,269,297.51 5.71/0 $480,650.00 , $150;438 44 _.$38,#2. 1 53 Jul-03 $4,939,085.95 5.71% $480,650.00 ...:.. 1:416>E19Q:. $338,68 10 . 0 - 4 4 44 5. 1/0 4 Jan-04 599 6.85 ? 80 650 $ , $ >::>:<:::;< X31,.�x4<:2],:;::;::>:::< 34,��33,5'f Jul-04 $4,250,111.06 5.71% $480,650.00 $12 ,34 #617 $350,30 33 0 Jan-05 5.71/0 $480,650.00 Ja 05 Jul-05 $3,521,234.12 5.71/0 $480,650.00104,63 2 $3$41, 1 77 0 Jan-06 41 1 1/0 4 06 3 1 15.36 5.? Ja 80 650.00 < >' ;;..,:. <: . `>>>» � ',«<>> `..>`. `. >.>: <• 0 Jul-06 $2,750,144.20 5.71/0 4 $$480,650.00 :.::.::::.::>�:: ���6<:»:>:::<:;>:«:> ::<�!2,1,33,3$:;: Jan-07 $2,348,010.82 5.71% $480,650.00 ?> $67,0a5,7 $418 14s29� Jul-07 $1,934,396.52 5.71% $480,650.00 :: ;:::$55,227,02.:.......: 425,422 93 Jan-08 $1,508,973.55 5.71% $480,650.00 <;„>: 48 0 1.1�J:;...... $437, 68 81 Jul-08 $1,071,404.74 5.71% $480,650.00 $ €);5 $ 61 $450,061 39 Jan-09 $621,343.35 5.71% $480,650.00 ° .. ..::.;$1"7,739.85 ! $462,91;065;; Jul-09 $158,432.70 • 5.71% $162,955.95 $4523 25 $158,432 70< TOTAL PAYMENTS $4,021,155.95 $9,600,000.00 16 EXHIBIT E INTEREST REVENUE Note:This schedule is an estimate only, Actual interest income will be calculated daily. TIME OPEN MONTHLY PUBLIC MONTHLY PRINCIPAL BAL. DRAW RATE EARNINGS RATE EARNINGS $9,600,000.00 Jan-95 $9,416,309.66 $183,690.34 5.93% $46,532.26 2.42% $18,989.56 Feb-95 $9,056,127.69 $360,181.97 5.93% $44,752.36 2.42% $18,263.19 Mar-95 $8,560,695.20 $495,432.49 5.93% $42,304.10 2.42% $17,264.07 Apr-95 $8,024,429.93 $536,265.27 5.93% $39,654.06 2.42% $16,182.60 May-95 $7,398,899.31 $625,530.62 5.93% _ $36,562.89 2.42% $14,921.11 Jun-95 $6,773,368.69 $625,530.62 5.93% $33,471.73 2.42% $13,659.63 Jul-95 $6,109,195.06 $664,173.63 5.93% $30,189.61 2.42% $12,320.21 Aug-95 $5,309,770.91 $799,424.15 5.93% $26,239.12 2.42% $10,708.04 Sep-95 $4,464,974.72 $844,796.19 5.93% $22,064.42 2.42% $9,004.37 Oct-95 $3,620,423.26 $844,551.46 5.93% $17,890.92 2.42% $7,301.19 Nov-95 $2,943,368.63 $677,054.63 5.93% $14,545.15 2.42% $5,935.79 Dec-95 $2,420,886.03 $522,482.60 5.93% $11,963.21 2.42% $4,882.12 Jan-96 $1,924,165.44 $496,720.59 5.93% $9,508.58 2.42% $3,880.40 Feb-96 $1,517,611.86 $406,553.58 5.93% $7,499.53 2.42% $3,060.52 Mar-96 $711,058.28 $806,553.58 5.93% $3,513.81 2.42% $1,433.97 Apr-96 $0.00 $711,058.28 5.93% $0.00 2.42% $0.00 TOTAL $386,691.77 $157,806.76 17 Orange County, North Carolina $9,600,000 1994-1995 Fiscal Year Installment Financing Additional Costs to Orange County Origination and Placement Fees: $0 Trustee Costs: $0 Underwriter's Counsel $5,000 (to be paid by bank) Appraisal: $0 Environmental Site Assessment: $0 The following documents are requested if available: - Appraisal - Environmental Site Assessment - Survey - Title Insurance with Bank shown as mortgagee 18 NationsBank Commitment to Orange County, North Carolina Our Commercial Lending Group in Chapel Hill is looking forward to extending our relationship with Orange County with this proposal. You now will be supported by a NationsBank relationship team of the following persons: Relationship Manager: Stephanie Leo Commercial Loan Officer Phone: 918-4204 Fax: 967-3881 City Executive: Denise Corey Chapel Hill City Executive Phone: 918-4203 Mailing Address: NationsBank of North Carolina, N.A. P.O. Box 570 Chapel Hill, NC 27514 Relationship Assistants: Chris Schutte Linda Dunn Karen Shields Phone: 918-4231, 4232, 4208 Senior Management: Howard Edwards Triangle Regional Executive Phone: 829-6602 19 Orange County, North Carolina $9,600,000 1994-1995 Fiscal Year Installment Financing History of Similar Financing County/Municipality: City of Graham Date of Financing: By November 30, 1993 Amount Financed: $2,000,000 Frequency of repayment: P&I semi annually Total project cost: $2,000,000 Contact at County/Municipality: Ray Fogleman 919-228-8362 Project: Police Dept. Building Term: 10 yrs. straight amount Underwriting Cost: $3,900 legal bill Percent financed: 100% The project qualifies as a tax-exempt obligation. County/Municipality: Town of Cary Date of Financing: October, 1993 Amount Financed: $3,615,000 Frequency of repayment: Annual P ; I monthly Total project cost: $9,037,500 Contact at County/Municipality: Karen Mills 919-469-4110 Project: Public Works/Utility Bldg. Term: 4 year amt. Underwriting Cost: $3,000 legal fees Percent financed: 40% The project qualifies as a tax-exempt obligation. County/Municipality: City of Greensboro Date of Financing: July, 1993 Amount Financed: $590,000 Frequency of repayment: Monthly P&I Total project cost: $590,000 Contact at County/Municipality: Sammy Vestal 919-373-2077 Project: Purchase golf carts Term: 59 months amt. Underwriting Cost: $2,000 legal fees Percent financed: 100% The project qualifies as a tax-exempt obligation. 20 Orange County, North Carolina $9,600,000 1994-1995 Fiscal Year Installment Financing History of Similar Financing County/Municipality: County of Alamance Date of Financing: June, 1993 Amount Financed: $590,000 Frequency of repayment: Monthly P&I Total project cost: $590,000 Contact at County/Municipality: Chuck Kitchen 919-228-1312 Project: Purchase computer system Term: 5 year amortization Underwriting Cost. 0 Percent financed: 100% The project qualifies as a tax-exempt obligation. County/Municipality: Town of Troutman Date of Financing: September 1993 Amount Financed: $1,500,000 Frequency of repayment: Monthly P&I Total project cost: $1,500,000 Contact at County/Municipality: Jim Troutman 704-528-7600 Project: Street repairs and improvements Term: 13 yr. amt., 2 yrs. interest only 7yrs. balloon Underwriting Cost: $4,500 legal expense Percent financed: 100% The project qualifies as a tax-exempt obligation. County/Municipality: Town of Franklin Date of Financing: May 1993 Amount Financed: $3,225,000 Frequency of repayment: Semi-annual P&I Total project cost: $3,500,000 Contact at County/Municipality: Ed Henson or City Manager 704-524-2516 Project: Sewer Plant Expansion Term: 10 year amortization Underwriting Cost: 0 Percent Financed: 92% The project qualifies as a tax-exempt obligation. 21 Orange County, North Carolina $9,600,000 1994-1995 Fiscal Year Installment Financing History of Similar Financing County/Municipality: City of Greensboro Date of Financing: November, 1992 Amount Financed: $4,753,000 Project: Purchase of law-enforcement facilities and acquisition of sanitation-related equipment. County/Municipality: City of Greensboro Date of Financing: January 1993 Amount Financed: $3,800,000 Project: Coliseum equipment and improvements. County/Municipality: City of Thomasville Date of Financing: June, 1993 Amount Financed: $330,132 Project: Refinance fire station loan County/Municipality: Town of Mooresville Date of Financing: July 1993 Amount Financed: $500,000 Project: Renovation of fire station County/Municipality: Town of Mooresville Date of Financing: July 1993 Amount Financed: $2,000,000 Project: Construction of community center County/Municipality: Town of Swansboro Date of Financing: September 1993 Amount Financed: $120,000 Project: Street repairs and improvements R i 1)..011'i r t'_..-' 22 INSTALLMENT PURCHASE CONTRACT THIS INSTALLMENT PURCHASE CONTRACT, dated as of the th day of January, 1995 (the "Contract") , between NationsBank of North Carolina, N.A. (the "Lender" and the "Escrow Depository") and the COUNTY OF ORANGE, NORTH CAROLINA, a political subdivision and body politic under the laws of the State of North Carolina (the "County") . WITNESSETH: WHEREAS, the County is a political subdivision and body politic 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 contracts to finance the acquisition of real property, or the construction of improvements thereon; and WHEREAS, the Lender desires to advance certain funds in an amount up to $9 , 600, 000.00, to enable the County to finance the construction of an elementary school in Carrboro, North Carolina (the "Improvements") and the County desires to obtain said advance from the Lender pursuant to the terms and conditions hereinafter set forth; and WHEREAS, there is expected to be a delay in the complete disbursement by the County of the funds (herein the "Financing Proceeds") advanced by Lender pursuant to this Contract, and the County has requested the Lender to set aside, in escrow, pursuant to the terms hereof, all or a portion of the proposed Financing Proceeds to be used for the purposes set forth herein; and WHEREAS, the obligation of the County to make Installment Payments (as hereinafter defined) 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; 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 hereunder; and WHEREAS, the Lender 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: 23 SECTION 1. DEFINITIONS For purposes of this Contract, in addition to any other terms defined herein, wherever used the following terms shall have the definitions set forth below: 1. 1 "Certificate as to Arbitrage" means the Certificate Regarding Qualification Under Certain Provisions of the Internal Revenue Code, in substantially the form of Exhibit A attached hereto and incorporated herein by reference, delivered by the County at the time of execution of this Contract . 1.2 "Deed of Trust" means the Deed of Trust, of even date herewith, from the County to a trustee for the benefit of the Lender, encumbering the Property as security for the County' s obligations to Lender for the repayment of the Financing Proceeds - advanced by Lender pursuant to this Contract . 1.3 "Installment Payments" means those payments made by the County to the Lender as described in Section 3 .1 of this Contract. 1.4 "Maturity Date" means 15, 20 1. 5 "Plans and Specifications" refers to the plans and specifications for the Improvements prepared by the County' s architect and/or engineer. 1. 6 "Property" means the County's land and all improvements now or hereafter constructed thereon, as more particularly described on Exhibit B attached hereto and herein incorporated by this reference. SECTION 2 . ADVANCE OF FINANCING PROCEEDS 2 . 1 Advances by Lender. Subject to the terms and conditions of this Contract, Lender hereby agrees to advance to the County an aggregate amount of up to NINE MILLION, SIX HUNDRED THOUSAND AND NO/100 DOLLARS ($9 , 600, 000. 00) , representing the above-referenced Financing Proceeds. The Financing Proceeds shall be used solely for the purpose of constructing the Improvements. Interest shall accrue on the total amount of the advanced Financing Proceeds outstanding from time to time at a fixed rate of °s, to be paid in accordance with the provisions of Section 3 below. 2 .2 Security Instrument. All advances made by Lender to or for the benefit of the County under this Contract will be secured by the Deed of Trust, which shall constitute a first priority lien on the Property and a first priority security interest in any and all fixtures, equipment, appliances, furniture, furnishings and 2 24 tangible personal property, if any, purchased through the use of the Financing Proceeds and used in connection with the operation of the Property. SECTION 3 . INSTALLMENT PAYMENTS 3 . 1 Amounts and Times of Installment Payments. The County shall repay the Financing Proceeds in equal semi-annual installments of principal and interest (herein the "Installment Payments" ) in an amount sufficient to fully amortize the repayment of same over a period of years, in the amount of $ each, with the first such Installment Payment being due and payable on July 15, 1995. If not sooner paid, all remaining principal and interest shall be due and payable by the County on the Maturity Date. Each installment shall be deemed to be an Installment Payment and such Installment Payments shall be sufficient in the aggregate to repay the Financing Proceeds together with interest thereon. 3 .2 Place of Payments. All payments required to be made to the Lender hereunder shall be made at the Lender' s principal office or as may be otherwise directed by the Lender 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 Lender within fifteen (15) days after the due date thereof, the County shall pay a late charge equal to four percent (4 ) of the delinquent Installment Payment. 3 .4 Abatement of Installment Payments. There will be no abatement or reduction of the Installment Payments by the County for any reason, including, but not limited to, any defense, recoupment, setoff, counterclaim, or any claim (real or imaginary) arising out of or related to any defects, damages, malfunctions, breakdowns or infirmities of or to the Property. The County assumes and shall bear the entire risk of loss and damage to the Property 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 provided herein. 3 .5 Prepayment of Installment Payments. If the County has performed all of the terms and conditions of this Contract, it shall have the option to prepay the principal component of the remaining Installment Payments, in full or in part, in such order of the due dates thereof as the County shall determine, at any time, at a prepayment price equal to 100 percent (1000) of the principal amount thereof, plus interest accrued thereon to the date of prepayment, upon thirty (30) days' prior written notice to the Lender. 3 25 3 . 6 Installment Payment Adjustment. The County acknowledges that the Lender is providing the Financing Proceeds at the rate set forth herein based on the premise that interest received under this Contract is exempt from taxation to the Lender and based on other state and federal laws in effect as of the date hereof. If, as a result of any action or failure to take any action by the County, the income received by the Lender shall be deemed to be taxable income to the Lender by any governmental agency (herein an "Event of Taxability") , then Lender shall have the option to either (i) declare the principal component of the remaining Installment Payments immediately due and payable or (ii) adjust the amount of the remaining Installment Payments to provide for the payment of interest by the County at a taxable rate which will preserve the Lender' s after-tax economic yield. In such event, the County agrees, to the extent permitted by law, to indemnify and hold harmless the Lender from any cost and expense incurred as a result of the loss of the tax-exempt status of the obligation created by this Contract, specifically including, without limitation, all administrative expenses arising in connection with the amendment of the Lender' s tax returns. The Lender' s after-tax yield prior to and after an Event of Taxability shall be as reasonably calculated by the firm of certified public accountants regularly employed by the Lender, and such calculations, in the absence of manifest error, shall be binding on the parties hereto. SECTION 4 . ESCROW FUND 4 .1 Creation of Escrow Fund. Following execution of this Contract , the principal amount of the Financing Proceeds will be deposited by the Lender with the Escrow Depository and this sum shall constitute the principal of the Escrow Fund and shall be held by the Escrow Depository in a separate fund designated as the "Escrow Fund" and applied in accordance with the provisions of this Section 4. 4.2 Investment. The Escrow Depository shall invest and reinvest the Escrow Fund in accordance with written instructions received from the County. The County shall be solely responsible for ascertaining that all proposed investments and reinvestments comply with federal, state and local laws, regulations and ordinances governing investment of escrowed funds held pursuant to a loan agreement similar in substance to the arrangement contemplated by this Contract and for providing appropriate notice to the Escrow Depository for the reinvestment of any maturing investment. Accordingly, the Escrow Depository shall not be responsible for any liability, cost, expense, loss or claim of any kind, directly or indirectly arising out of or related to investment or reinvestment of all or a portion of the Escrow Fund, and the County agrees, to the extent permitted by law, to release and indemnify and hold harmless the Escrow Depository from any such liability, cost, expense, loss or claim. 4 26 4.3 Withdrawals. (a) Withdrawals from Escrow Fund. So long as no Event of Default (as defined in Section 10 hereof) has occurred, the County may withdraw funds from the Escrow Fund by submitting advance request (s) , in form satisfactory to the Escrow Depository, setting forth the amount requested to be withdrawn from the Escrow Fund, accompanied by invoice (s) from the general contractor for the County for such amount and/or such other documentation of the costs of construction as the Escrow Depository or the Lender may reasonably require, including, without limitation, certificates as to the progress of construction, lien waivers, or affidavits of payment of any person entitled to assert any liens. The County will also cause the said general contractor to comply, to the fullest extent possible with respect to the construction contract, with the notice provisions of N.C.G.S. § 44A-23 . (b) Distribution of Interest. Interest earned on the Escrow Fund and not required for the purposes set forth above will be applied by the County, upon the termination or the final distribution of the Escrow Fund, to prepay the principal component of the remaining Installment Payments in such order of their due dates as the County shall determine; provided, however, that so long as the County is not then in default, the County shall have the right to withdraw any such interest earned on the Escrow Fund following the final distribution or termination thereof for any lawful purpose, upon its distribution or termination thereof for any lawful purpose, upon its delivery to Lender of an opinion of nationally recognized bond counsel that such withdrawal will not adversely affect the tax-exempt status of the interest component of the Installment Payments. 4 .4 Termination. The Escrow Fund shall be terminated at the earliest of (a) the final distribution of principal of the Escrow Fund, (b) the sending of written notice by the Lender of a claimed default by the County under this Contract, or (c) the termination of this Contract. SECTION 5 . RESPONSIBILITIES OF THE COUNTY 5 . 1 Care and Use. The County shall construct the Improvements in accordance with the Plans and Specifications and thereafter use the Property in compliance with all applicable laws and regulations, and, at its sole cost and expense, service, repair and maintain the Property so as to keep the Property in good condition, repair, appearance and working order for the purposes intended, ordinary wear and tear excepted, and shall replace any part of the Property 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 Improvements and all parts thereof shall constitute accessions to the Property and shall be 5 27 subject to all the terms and conditions of this Contract and included in the term "Property" as used in this Contract . 5 .2 Inspection. The Lender shall have the right upon reasonable prior notice to the County to enter into and upon and inspect the Property during normal business hours . 5 .3 Utilities . The County shall pay 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 Property. There shall be no abatement of the Installment Payments on account of interruption of any such services. 5.4 Taxes. The County agrees to pay when due any and all taxes relating to the Property and the County' s obligations hereunder, 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 Property by any governmental body or agency, together with any interest and penalties, other than taxes on or measured by the net income of the Lender.' 5 .5 Alterations. Without the prior written consent of the Lender, which consent shall not be unreasonably withheld, the County shall not make any alterations, modifications or attachments to the Property which cannot be removed without materially damaging the economic value of the Property. 5 . 6 Insurance. The County shall maintain at its sole cost and expense insurance on the Property, covering such risks and in such amounts and with such deductibles as are described in Exhibit C attached hereto and incorporated herein by reference, with such insurance companies as shall be satisfactory to the Lender. All insurance for loss or damage shall name the Lender as an additional insured and shall provide that losses, if any, shall be payable to the County and the Lender, as their interests may appear. Evidence or certificates of all required insurance shall be provided to the Lender. The County shall pay the premiums therefor and deliver to the Lender the policies of insurance or duplicates thereof or other evidence satisfactory to the Lender of such insurance coverage. Each insurer shall also agree by endorsement upon the policy or policies issued by it that (a) it will give thirty (30) days prior written notice to the Lender of cancellation, non-renewal or material modification of such policy, and (b) the coverage of the Lender shall not be terminated, reduced or affected in any manner, regardless of any breach or violation by the County of any warranties, declarations or conditions of such insurance policy or policies . The proceeds of such insurance, at the option of Lender, shall be applied (a) toward the replacement, restoration or repair 6 28 of the Property, or (b) toward the prepayment of the obligations of the County hereunder, including, but not limited to, the Installment Payments . The County shall make claim for, receive payment of, and execute all documents, checks or drafts received in payment of loss or damage under any such insurance policy. 5 . 7 Risk of Loss. The County shall bear all risk of loss to the Property, and in the event of loss or damage thereto, the County shall, at its option, either (a) continue to make the Installment Payments due hereunder and repair or replace the Property or (b) prepay in full the principal component of the remaining Installment Payments at a prepayment price equal to one hundred percent (1000) of the principal component of the remaining Installment Payments plus accrued interest thereon to the date of prepayment. 5 . 8 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 and for any costs and expenses, legal or otherwise, associated with the payments or other performance by the Lender, with interest thereon at a rate equal to eight percent (8°s) per annum. 5 .9 Financial Statements. The County agrees that it will furnish the Lender at such reasonable times as the Lender shall request current financial statements (including, without limitation, the County' s annual budget as submitted or approved) , and permit the Lender or its agents and representatives to inspect the County's books and records and make extracts therefrom. The County represents and warrants to the Lender that all financial statements which have been delivered to the Lender 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. 10 Reports. The County agrees that it will furnish to the Lender monthly, and at such other times as may be reasonably requested by Lender, a report from the County's architect with respect to the status of the construction of the Improvements (addressing the percentage of completion and compliance with the Plans and Specifications) , in form and content reasonably satisfactory to Lender. SECTION 6. PROPERTY 6.1 Title. The County has good and valid title to the Property, free and clear of any liens, claims or security interests of any party whatsoever. 7 29 6 .2 Availability of Utilities. All utility services necessary for the construction of the Improvements and the operation thereof for their intended purpose are presently available, or will be available when needed, through presently existing public or unencumbered private easements or rights-of-way (which would inure to the benefit of Lender or other purchaser of the Property in the event of the foreclosure of or sale under the power contained in the Deed of Trust) at the boundaries of the Property, including but not limited to, water supply, storm and sanitary sewer, electric and telephone facilities . 6 . 3 Security Agreement. To secure all obligations of the County hereunder, the County hereby grants to the Lender a security interest in any and all of the County' s right, title and interest in and to any materials, fixtures, machinery, equipment, and/or other items of personal property of the County which are purchased with the Financing Proceeds advanced by Lender pursuant to this Contract and incorporated, or to be incorporated, or used in connection with the operation of, the Property, and all additions, attachments, accessions, substitutions and replacements thereto, and any and all proceeds thereof, including without limitation, the proceeds of insurance thereon. The County agrees to execute and deliver all documents, instruments and financing statements necessary or appropriate to perfect or maintain the security interest granted hereby and to maintain the Lender' s security interest in the collateral described in this Section 6.3 . 6.4 Liens . The County shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, security interest, encumbrance or claim on or with respect to the Property, or any interest therein, except for the lien and security interest of the Lender therein. The County shall promptly, at its own expense, take such action as may be necessary to duly discharge any such mortgage, pledge, lien, security interest, charge, encumbrance or claim if the same shall arise at any time. The County shall reimburse the Lender for any expense incurred by it in order to discharge or remove any such mortgage, pledge, lien, security interest, charge, encumbrance or claim. SECTION 7. WARRANTIES AND REPRESENTATIONS OF THE COUNTY. The County warrants and represents to the Lender (all such representations and warranties being continuing) ` that: (a) The County is a duly organized and validly existing political subdivision or agency of the State of North Carolina within the meaning of Section 103 of the Internal Revenue Code of 1986, as amended (the "Code") and the related regulations and rulings and under the laws of the State of North Carolina, and has all powers necessary to enter into the transactions 8 30 contemplated by this Contract and to carry out its obligations hereunder; (b) This Contract and all other documents relating hereto and the performance of the County' s obligations hereunder and thereunder have been duly and validly authorized, executed and delivered by the County and approved under all laws, regulations and procedures applicable to the County, including, but not limited to, compliance with public bidding requirements, and, assuming due authorization, execution and delivery thereof by the other' parties thereto, constitute valid, legal and binding obligations of the County, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors' rights generally and such principles of equity as a court having jurisdiction may impose; (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, other than the approval of the Local Government Commission, and the transactions contemplated hereby or if any such approval is required it has been duly obtained; (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 and all other documents relating hereto and the performance of the County' s obligations hereunder and thereunder, 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 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) The obligation created by this Contract is not a "private activity bond" as defined in Section 141 of the Code; (f) The resolutions relating to the performance by the County of this Contract and the transactions contemplated hereby, substantially in the form of Exhibit D attached hereto, have been duly adopted, are in full force and effect, and have not been in any respect modified, revoked or rescinded. 9 31 SECTION 8. TAX COVENANTS AND REPRESENTATIONS The County covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest portion of the obligation created by this Contract under Section 103 of the Code. The County will not directly or indirectly use or permit the use of any funds of the County, or take or omit to take any action that would cause the obligation created by this Contract to be an "arbitrage bond" within the meaning of Section 148 (a) of the Code. To that end, the County has executed the Certificate as to Arbitrage and will comply with all requirements .of Section 148 of the Code to the extent applicable to the obligation created by this Contract. 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 obligation created by this Contract from time to time. This covenant shall survive the payment in full of all obligations under this Contract. Notwithstanding any provision of this Section, if the County shall provide to the Lender an opinion of nationally recognized bond counsel to the effect that any action required under this Section is no longer required, or to the effect that some further action is required, to maintain the exclusion from gross income of the interest on the obligation created by this Contract pursuant to Section 103 of the Code, the Lender may rely conclusively on such opinion in complying with the provisions hereof . SECTION 9 . INDEMNIFICATION To the extent permitted by law, the County hereby agrees to indemnify, protect and save the Lender 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 Property. 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 . DEFAULT AND REMEDIES • 10 . 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 pay any sum hereunder when due; or 10 32 (b) The County shall fail to perform or observe any other term, condition or covenant of this Contract on its part to be observed or performed, or shall breach any warranty by the County herein contained, other than as referred to in subsection (e) of this Section 10 . 1, for a period of ten (10) days after written notice, specifying such failure or breach and requesting that it be remedied, has been given to the County by the Lender, except that if such failure or breach can be remedied but not within such ten (10) day period and if the County has taken all action reasonably possible to remedy such failure or breach within such ten (10) day period, such failure or breach shall not become an Event of Default for so long as the County shall diligently proceed to remedy the same in accordance with and subject to any directions or limitations of time established by the Lender; or (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 is found to be incorrect or misleading in any material respect on the date made; or (e) Any lien, charge or other encumbrance is filed against the Property; or (f) Any insurance carrier cancels any insurance on the Property without the County' s first providing replacement coverage meeting the requirements of the Lender and Section 5 . 6 hereof; or (g) The Property or any part thereof is abused, illegally used, misused, destroyed or damaged beyond repair. (h) Construction of the Improvements shall cease and not be resumed within thirty (30) business days, except to the extent that said cessation is as the result of force majeure, or shall be abandoned; or (i) Any of the materials, fixtures, machinery, equipment, articles and/or personal property used in the construction of the Improvements or the appurtances thereto, or to be used in the operation thereof, or any work performed in connection with the construction of the Improvements, shall not substantially conform with the Plans and Specifications as approved by Lender and such nonconformity shall not be cured 11 33 or corrected within a period of thirty (30) days after notice thereof is received by the County from Lender, or, if such nonconformity cannot reasonably be cured within thirty (30) days, its shall not be an Event of Default if the County has commenced curing such nonconformity within said thirty day period and is, in the opinion of Lender, diligently prosecuting such cure to completion. 10 .2 Remedies on Default . Upon occurrence of any Event of Default, the Lender may exercise any one or more of the following remedies as the Lender in its sole discretion shall elect: (a) Declare the entire amount of the principal portion of the Installment Payments immediately due and payable without notice or demand to the County, together with accrued interest thereon; (b) Proceed by appropriate court action to enforce performance by the County of any covenant of this Contract with which it has failed to comply (other than a failure to pay Installment Payments or any other payments hereunder) or to recover for the breach thereof; (c) Institute foreclosure proceedings against the Property or exercise any other right provided to Lender under the Deed of Trust; (d) Terminate this Contract and use, operate, lease or hold the Property as the Lender in its sole discretion may decide; (e) Terminate the Escrow Fund in accordance with Section 4 .4 hereof and receive distribution of all amounts of principal and interest therein; thereafter, Lender is specifically authorized to use that portion of the Escrow Fund which has not previously been disbursed to the extent deemed necessary by Lender to complete construction of the Improvements in substantial accordance with the Plans and Specifications, and if such completion requires a larger sum than the remaining undisbursed portion of the Escrow Fund, to disburse such additional funds, all of which funds so disbursed by Lender shall be deemed to have been disbursed to the County (if acceptable under G.S. § 160A-20) and shall be evidenced by this Contract and secured by the Deed of Trust; or (f) To enter into possession of the Property and to perform or cause to be performed any and all work and labor necessary to complete the Improvements in substantial accordance with the Plans and Specifications, with such • 12 34 modifications thereto as Lender shall deem to be necessary or desirable. 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 may be entered against the County in favor of the Lender in violation of Section 160A-20, including, without limitation, any deficiency judgment for amounts that may be owed hereunder when the sale of all or any portion of the Property is insufficient to produce enough money to pay in full all remaining obligations under this Contract. 10 .3 Further Remedies. A termination hereunder shall occur only upon notice by the Lender to the County. All remedies of the Lender 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. SECTION 11. ASSIGNMENT 11. 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 Property (except for the lien and security interest of the Lender therein) without the Lender's prior written consent which shall not be unreasonably withheld. The County' s interest herein may not be assigned or transferred by operation of law. 11.2 Assignment By the Lender. The Lender may, at any time and from time to time, assign all or any part of its interest in the Property or this Contract, including without limitation, the Lender' s rights to receive the Installment Payments and any additional payments due and to become due hereunder. The County agrees that this Contract 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 either the entire pool or any partial interest herein. Notwithstanding the foregoing, no assignment or reassignment of the Lender' s interest in the Property or this Contract 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 covenants and agrees with the Lender and each subsequent assignee of the Lender to maintain for the full term of this Contract a written record of each such assignment or reassignment. 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 13 35 shall in no way be deemed necessary to make the assignment effective. 11.3 Escrow Fund Assignment by the Lender. The Lender may freely assign all or any part of its interest in the Escrow Fund established pursuant to Section 4 hereof in connection with a permitted assignment by the Lender of this Contract . SECTION 12 . 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 CONTRACT SHALL BE IN EFFECT. 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. 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, nor shall any provision of this Contract 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 Contract, this Section shall take priority. SECTION 13 . MISCELLANEOUS 13 . 1 Waiver. No covenant or condition of this Contract can be waived except by the written consent of the Lender. Any failure of the Lender to require strict performance by the County or any waiver by the Lender of any terms, covenants or agreements herein shall not be construed as a waiver of any other breach of the same or any other term, covenant or agreement herein. 13 .2 S verability. 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. 13 .3 Governing Law. This Contract shall be construed, interpreted and enforced in accordance with the laws of the State of North Carolina. 14 36 13 .4 NO ices. Any and all notices, requests, demands, and other c cations 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 mail, postage prepaid, return receipt requested, addressed an follows: If to the Lender, address to: Nationslank. of North Carolina, N.A. Commercial Loan Department P.O. Box Chapel Hill, NC Attention: Ms. Stephanie Leo Assistant Vice President If to the County, address to: County of orange, North Carolina P.O. Box 8181 Hillsborough, North Carolina 27278 Attention: Mr. Ken Chavious Finance Officer 13 .S $ectioqL 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. 13.6 moire Agreement. This Contract, together with the schedules hereto, constitutes the entire agreement between the parties and this Contract shall not be modified, amended, altered or changed except by written agreement signed by the parties. 13.7 $iOdina 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. 13.8 T . Time is of the essence of this Contract and each and all of its provisions. 13.9 Xxecutton in counters rra. 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. 15 37 IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed am of the day and year first above written. NATIONSBANR OF NORTH CAROLINA, N.A. By: Vice president COUNTY OF ORANGE, NORTH CAROLINA ATTEST: By: Char, Bo o Comniiss oners County Clerk [SEAL) This instrument has been pre-audited it the manner required by the Local Government Budget and Fiscal Control Act. Pf ance Officer Approved as to form: County Attorney 16 38 =BIHTT A CERTIFICATE REGARDING QUALIPICATION TENDER CERTAIN PROVISIONS OP TEE INTERNAL REVENUE CODE January , 1995 NationsDank of North Carolina, N.A. P.O. Box Chapel Hill, North Carolina RB; g_9`0;_OQO.00 Piaigrol g Facri_1 ty Dear Sirs: The County of Orange, a. political subdivision and body politic of the State of North Carolina (the "County") , is or will be the principal user of certain improvements to be constructed on real property owned by the County and financed with the proceeds of the credit facility described above (the "Facility") . This certificate is furnished to: (i) NationsBank of North Carolina, N.A. (the "Dank") , in its capacity as the lender pursuant to the Facility under that certain Installment Purchase Contract (the 'Contract") , dated as of January , 1995, by and between the County and the Bank, and (ii) _ , in their capacity as bond counsel in connection with the issuance of the Facility, for purposes of their opinion as to the exemption from Federal income tax of the interest portion oe payments due to the Bank pursuant to the Facility. This certificate is being executed by _.._..___ who is County Manager of the County and who 39 is authorized to execute this certificate in the name of and on behalf of the County. Based on the aforesaid examination and investigation, the undersigned does HEREBY CERTIFY as follows: 1. No proceeds of the Facility are to be used for any private business purposes, nor will the payment of principal or interest on the proceeds of the Facility be (i) secured by any interest in property used or to be used for a private business use or payments in respect of such property, or (ii) derived from payments in respect of property or borrowed money, used or to be used for a private business use. Further, no part of the proceeds of the Facility are to be used to make or finance loans to persons other than governmental units. 2 . The County is or will be the owner and the operator of the improvements the construction of which is financed by the Facility (the "Property" ) . There will be no other "principal user" (within the meaning of the Internal Revenue Code of 1986, as amended (the "Code") and the regulations promulgated thereunder] of the Property. 3 . The County hereby designates the Facility for purposes of paragraph (3) of Section 265 (b) of the Code and certifies that the Facility is not intended to constitute a private activity bond as defined in Section 141 of the Code. The County further certifies that it does not currently anticipate that it (and all subordinate entities thereof) will issue, in an aggregate principal amount, more than $10, 000, 000 . 00 of obligations the interest on which is 18 40 excludable (under Section 103 (a) of the Code) from gross income for federal income taxes (excluding, however, private activity bonds, as defined in Section 141 of the Code, other than qualified 501 (c) (3) bonds as defined in Section 145 of the Code) , including the Facility, during the calendar year 1995 . 4 . No portion of the proceeds are expected by the County to used, directly or indirectly, to (i) acquire "higher yielding investments" (within the meaning of Section 148 (b) of the Code) , or (ii) replace funds which were used, directly or indirectly, to acquire higher yielding investments. 5 . No portion of the payment of principal or interest under the Note is "federally guaranteed" within the meaning of Section 149 (b) of the Code. 6 . The County will timely file Form 8038-G, Information Return for Tax-Exempt Governmental Bond Issues, and any other filings or returns by the Internal Revenue Service. 7 . To the best knowledge, information and belief of the undersigned, there are no other facts, estimates or circumstances that would materially change the foregoing certification or your reliance thereon. COUNTY OF ORANGE By: County Manager Clerk [County Seal] 19 41 EXHIBIT B Legal Description of the Land 42 EXHIBIT C Insurance Requirements The County shall obtain such insurance or evidence of insurance as Lender may reasonably require, including, but not limited to, the following: 1 . Builder's Risk Insurance. Builder' s risk insurance with standard non-contributing mortgagee clauses and standard waiver of subrogation clauses, such insurance to 'be in such amounts and form and by such companies as shall be approved by Lender, certificates of which policies (together with , appropriate endorsements thereto, evidence of payment of premiums thereon and written agreement by the insurer or insurers therein to give Lender thirty (30) days' prior written notice of intention to cancel or modify) shall be promptly delivered to Lender, said insurance coverage to be kept in full force and effect at all times until the insurance described in the following subparagraphs is obtained. 2 . Hazard Insurance. Fire and extended coverage insurance, and such other hazard insurance as Lender may require with standard non-contributing mortgagee clauses and standard waiver of subrogation clauses, such insurance to be in such amounts and form and by such companies as shall be approved by Lender, the certificates or originals of which policies (together with appropriate endorsements thereto, evidence of payment of premiums thereon and written agreement by the insurer or insurers therein to give Lender thirty (30) days' prior written notice of intention to cancel or modify) shall be promptly delivered to Lender upon completion of construction of the Improvements and before any portion of the Property is occupied by the County or any tenant of the County or any other person or entity, with such insurance to be kept in full force and effect at all times thereafter until the repayment in full of the Financing Proceeds. 3 . Public Liability and Worker' s Compensation Insurance. A certificate from an insurance company indicating that the County and the general contractor employed by the County in connection with the construction of the Improvements are covered by public liability and worker' s compensation insurance to the satisfaction of Lender. 43 EXHIBIT D CERTIFICATE OF RESOLUTIONS I, , do hereby certify that I am the duly elected or appointed and acting County Clerk of the County of Orange, North Carolina, a political subdivision and body politic duly organized and existing under the laws of the State of North Carolina (the "County") , and that the following resolutions (the "Resolutions") have been presented to and duly adopted by the Board of Commissioners of the County (the "Governing Body") at a meeting , duly and regularly held and convened in accordance with applicable law on the th day of January, 1995, that at said meeting a quorum was present and acting at all times, and that the Resolutions are in full force and effect and have not been in any respect modified, revoked or rescinded: WHEREAS, the County desires to enter into an Installment Purchase Contract, dated as of January , 1995 (the "Contract") , between the County and NationsBank of North Carolina, N.A. (the "Lender") pursuant to a Commitment Letter, dated November 21, 1994 (the "Commitment Letter" ) from the Lender; and WHEREAS, the Contract provides for the Lender to advance certain funds (the "Loan Proceeds") , up to an aggregate amount of $9, 600, 000 (the "Financing Proceeds") to enable the County to construct the Improvements, as described in the Contract, on certain real property owned by the County and described on Exhibit B thereto (the "Property") ; and WHEREAS, the County has determined that the use of the Property is essential to its proper, efficient and economic operation; that it anticipates an ongoing need for the Property; that the Property will provide an essential use and permit the County to carry out public functions that it is authorized by law to perform; and that entering into the Contract is necessary and expedient for the County; and WHEREAS, the County has further determined that the Installment Payments and all other obligations of the County under the Contract are not excessive for their stated purposes; and WHEREAS, the County has determined that the Contract and the obligations of the County thereunder are preferable to, and more cost efficient than, a general obligation or revenue bond issue for the same purpose and that the construction costs of the Improvements exceed the amount that can be prudently raised from currently available appropriations, unappropriated fund balances and nonvoted bonds that could be issued by the County in the 44 current fiscal year pursuant to Article V, Section 4 of the Constitution of the State of North Carolina; and WHEREAS, the debt management policies of the County have been carried out in the strict compliance with law; NOW, THEREFORE, BE IT RESOLVED that the Contract and the Commitment Letter are hereby approved and that the action of the official or officials of the County in signing the Contract and the Commitment Letter on behalf of the County is hereby ratified, confirmed and approved; and BE IT FURTHER RESOLVED that the officers of the County,, jointly and severally, be, and are hereby, authorized, empowered and directed to negotiate the final form of the Contract, to sign on its behalf the Contract and any addenda, exhibits, schedules, deeds of trust, UCC financing statements or other instruments issued under the provisions of the Contract and any other instrument or document which may be necessary or expedient in connection with the fulfillment of the provisions of the Contract; and BE IT FURTHER RESOLVED that the foregoing Resolutions shall take effect immediately upon passage. I further certify that the individual (s) named below are the duly elected or appointed officers of the County holding the offices set forth opposite their respective names and titles are their true and authentic signatures and (ii) such officers have the authority on behalf of the County to enter into all documentation connected with the Contract. NAME TITLE SIGNATURE IN WITNESS WHEREOF, I have duly executed this certificate and affixed the seal of the County hereto, this day of January, 1995 . County Clerk (County Seal] The Board of Commissioners for the County of Orange, North Carolina, met in the Old Orange County Courthouse in Hillsborough, North Carolina at 7:30 P.M. on December 5, 1994. Present: Chairman Moses Carey, Jr. , presiding, and Commissioners William L. Crowther, Alice M. Gordon, Stephen H. Halkiotis and Don Willhoit Absent: NONE The Chairman of the Board of Commissioners announced that this was the hour, day and place fixed for the public hearing for the purpose of ( 1) considering whether the Board of Commissioners should approve a proposed installment payment agreement and certain related documents under which the County would obtain financing pursuant to G.S . § 160A-20, as amended, of the acquisition, construction and equipping of a project consisting of a new elementary school for the Chapel Hill - Carrboro City Schools, as more particularly described in the notice of such public hearing which was published in The News of Orange County and The Chapel Hill Herald on November 23, 1994, and under which the County would secure the repayment by it of moneys advanced pursuant to such installment payment agreement by granting a security interest in such project and certain related property, and (2) considering whether the County should acquire the site of such project from the Chapel Hill - Carrboro Board of Education to facilitate such financing. 1 The County Manager and the County Attorney then described the project as currently proposed and presented and described a draft of an Installment Purchase Agreement and related documents between NationsBank of North Carolina, N.A. and the County which the County had selected pursuant to a request for proposals and which constituted such proposed installment payment agreement. The County Manager and the County Attorney also then described the site of such project, as more particularly described in a November 17, 1994 resolution of the Chapel Hill - Carrboro Board of Education which was presented, and the need for the County to acquire such site from the Chapel Hill - Carrboro City Schools to facilitate such financing. The Chairman of the Board of Commissioners then announced that the Board of Commissioners would immediately hear anyone who might wish to be heard on such matters. No one appeared, either in person or by attorney, to be heard on such matter and no written statement relating to such matter had been received. 2 Thereupon, the Board of Commissioners determined to proceed with the proposed financing of such project and to approve such proposed Installment Purchase Agreement and related documents substantially in the form presented, subject to review and approval by the North Carolina Local Government Commission, the County Attorney and the County's Bond Counsel. The Board of Commissioners also then determined to acquire the site of such project from the Chapel Hill - Carrboro Board of Education to facilitate the financing and to accept a General Warranty Deed from the Chapel Hill - Carrboro Board of Education for the site. Thereupon, the Chairman of the Board of Commissioners announced that the public hearing was closed. I, Beverly A. Blythe, Clerk to the Board of Commissioners for the County of Orange, North Carolina, DO HEREBY CERTIFY that the foregoing has been carefully copied from the recorded minutes of the Board of Commissioners for said County at a meeting held on December 5, 1994, said record having been made in Minute Book No. 28 of the minutes of said Board beginning at page and ending at page , and is a true copy of so much of said proceedings of said Board as relates in any way the holding of a public hearing upon the matters described in said proceedings . I DO HEREBY FURTHER CERTIFY that a schedule of regular meetings of said Board, in the form attached hereto, has been on file in my office as of a date not less than seven days before the date of said meeting in accordance with G.S. § 143-318 . 12 . WITNESS my hand and the corporate seal of said County, this 6th day of December, 1994 . '� `` lerk to tfe Board of .mmissioners 3