HomeMy WebLinkAboutAgenda - 03-02-2006-8bTASHLF draft of February 21, 2006
TRUST AGREEMENT
by and between
ORANGE COUNTY PUBLIC FACILITIES COMPANY
and
THE BANK OF NEW YORK, as Trustee
Dated as of April 1, 2006
Relating to the execution and delivery of
$24,000,000
Certificates of Participation
(Orange County Public Improvement Projects), Series 2006A
~3ss~~3
THIS TRUST AGREEMENT is dated as of April 1, 200G, is between
Orange COUNTY PUBLIC FACILITIES COMPANY, a North Carolina
nonprofit corporation {the "Company"}, and THE BANK OF NEW YORK, as
trustee (the "Trustee"), and relates to the execution and delivery of [$24,000,000]
Certificates of Participation (Orange County Public Improvement Projects}, Series
200GA (the "200GA Certificates").
RECITALS:
The Company and Orange County, North Carolina (the "County"), have
entered into an Installment Financing Contract also dated as of April 1, 2000 (the
"Financing Contract"). The Financing Contract provides for the Company's
advance to the County of funds to be used, together with other available funds, to
payT the costs of the acquisition, construction and impro~Tement of certain school
facilities and to provide far certain other public improvements and to pay financing
casts.
The County will make "Installment Payments" under the Financing Contract
in amounts sufficient to repay with interest the amount advanced under the
Financing Contract. The Installment Payments in tLU71 will be sufficient to pay the
components of principal and interest represented by the 200GA Certificates.
The Company is providing for the execution and delivery of the 200GA
Certificates to raise funds for the advance under the Financing Contract. The
200GA Certificates evidence proportionate and undivided interests in the
Installment Payments.
As security for the payment of the Certificates, the Company has agreed to
assign to the Trustee, without recourse against the Company, the specific security
described below.
Unless the context clearly requires otherwise, capitalized terms used in this
Trust Agreement and not otherwise defined will have the meanings set forth in
ExlzibitA.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained in this Trust Agreement, the parties agree as follows:
ARTICLE I
THE CERTIFICATES
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Section 1.01. Provision for 2006A Certificates. The Company will
prepare and execute, and the Trustee will authenticate and deliver, 2006A
Certificates in an aggregate principal amount of $24,000,000 e~ridencing
proportionate and undivided ownership interests in the Installment Payments.
Section 1.02. Farm and Details; Payments. The 2006A Certificates
~~-i11 be designated "Certificates of Participation {Orange County Public
Improvement Projects), Series 200GA," and uTill be in substantially the form of
Exhibit B, with such changes as this Trust Agreement permits or requires.
The 200GA Certificates will be dated the date of their initial delivery to the
initial purchaser thereof, will be issuable only as fiilly registered certificates in
denominations of $5,000 and multiples thereof, uTill be separatel~j numbered R-1
upward, twill be payable as to interest semiannually until payment on each
Certificate Payment Date at the following rates {calculated on the basis of a 3G0-
day year consisting of t~~•elve 30-day months}, and gill be payable as to principal
on April 1 in the follov~Ting years and amounts:
Date (April 1) Principal Amount ($) Rate °10
2007 1.00
2008 1.00
2009 1.00
2010 1.00
2011 1.00
2012 1.00
2013 1.00
2014 1.00
2015 1.00
2016 1.00
2017 1.00
2018 1.00
2021 1.00
2022 1.00
2.023 1.00
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2024 1.00
2.025 1.00
2026 1.00
Each 2006A Certificate will be pa~jable as to interest (a) from its date, if
such 2006A Certificate is authenticated prior to the Record Date preceding the first
Certificate Payment Date, (b) from the succeeding Certificate Payment Date, if
such 2000A Certificate is authenticated betv~Teen a Record Date and the succeeding
Certificate Payment Date, or {c) otherwise from the Certificate Payment Date that
is, or immediately precedes, the date on ~~Jluch such 2006A Certificate is
authenticated; provided, however, that if at the time of authentication of any
2006A Certificate payment of interest is in default, such 2006A Certificate will be
payable as to interest from the date to ~vluch interest has been paid.
Principal, premium, if any, and interest on all Certificates will be payable in
laujful money of the Uiuted States of America.
Section 1.03. Prepayment Dates and Prices. The Certificates are
subject to prepayment as described in Section 3.01.
Section 1.04. Delivery of 2006A Certificates. The Trustee will
authenticate and deli~Ter the 2006A Certificates when there ha~Te been filed with or
delivered to it the following:
(a) Original executed counterparts of this Trust Agreement, the Financing
Contract and the Deed of Trust.
(b) A certified copy of a resolution or resolutions of the County Board,
approving substantially final forms of the Financing Contract and the Deed of
Trust, authorizing their execution and delivery and approving the execution and
deliverer of the 2006A Certificates.
(c) Executed 2006A Certificates in the aggregate principal amounts,
bearing interest at such rates and payable as to principal and interest at such
times and in such amounts as are provided in this Trust Agreement.
(d) A request and authorization, signed by any Company officer and
by a County Representative, to the Trustee to authenticate and deliver the 2006A
Certificates to such person or persons named therein upon payment to the
Trustee with respect to the 2006A Certificates of a specified sum.
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(e) A certificate signed by a County Representative directing the
Trustee as to the application of proceeds from the sale of 2006A Certificates to
~Tarious funds and accounts established under this Trust Agreement.
Section 1.05. Additional Certificates. So long as the Financing
Contract remains in effect, the Company may provide for Additional Certificates to
be executed and delivered under this Trust Agreement to provide funds {a) to
complete the Financed Facilities, {b) to expand or improve the Financed Facilities,
(c) to refund any Outstanding Certificates, (d) to pay financing costs or establish
reserves in connection with the issuance of Additional Certificates, (e) for an5~~
other purpose that may be allowed by law from time to time, including the
acquisition and construction of additional public facilities, whether or not such
facilities are related to the Financed Facilities, or (f) for any combination of such
purposes.
The Trustee will authenticate and deliver the Additional Certificates when
there have been filed with or delivered to it the follov~Ting:
(i) Certified copies of resolutions of the County Board and the
Company's governing board approving the terms and conditions under which
the Additional Certificates are to be issued and authorizing the execution of an
amendment to the Financing Contract pro~jiding for payment of Contract
Payments as required by the issuance of the Additional Certificates.
{ll) An executed copy of the Financing Contract, as so amended, together
with evidence satisfactory to the Trustee that the LGC has approved such
amendment (if such approval is then required by la~v).
(iii} An executed copy of an amendment or supplement to this Trust
Agreement providing for the issuance of the Additional Certificates, which will
set forth the payment and prepayment terms of such Additional Certificates,
together with such other terms as may be appropriate.
(iv} An Opinion of Special Cou11se1 to the effect that the issuance of such
Additional Certificates is permitted under the terms of this Trust Agreement and
has been duly authorized, and that the issuance of such Additional Certificates
will not adversely affect the exclusion from federal gross income to which
interest components of Installment Payments are otherwise entitled.
(v) A certificate signed by a County Representative directing the Trustee
as to the application of the proceeds from the sale of the Additional Certificates.
(vi) The Ins~.~rer's consent to the issuance of the Additional Certificates.
93362v2 5
The Trustee will not authenticate and deliver any such Additional
Certificates if any default under this Trust Agreement or under the Financing
Contract is continuing.
Simultaneously with the delivery of the Additional Certificates, the proceeds
(including any accrued interest) of the Additional Certificates will be applied as
pro~Tided in the certificate described in (v) above.
Each of the Additional Certificates executed and delivered pursuant to this
Section will evidence an assignment of a proportionate and undivided ownership
interest in Installment Payments under the Financing Contract, as amended,
proportionately and ratably secured with the 2006A Certificates and all other
Additional Certificates, if any, executed and deli~Tered pursuant to this Section,
without preference, priority or distinction of any Certificates over any other. No
Additional Certificates will be so proportionately and ratably secured without.
compliance with the provisions of thus Section.
After the execution and delivery of any such Additional Certificates, such
will be "Certificates" under this Trust Agreement and subject to all of its terms and
conditions, except as may be provided in the supplement to this Trust Agreement
provided for in (iii) above.
ARTICLE II
ADDITIONAL PROVISIONS FOR THE FORM,
REGISTRATION AND EXCHANGE OF CERTIFICATES
Section 2.01. Book-Entry-Only Form. {a) The Certificates will be
issued by means of a book-entry system, with one certificate for each maturity
immobilized at DTC, and not available for distribution to the public. Transfer of
beneficial ownership interests in the Certificates in the principal amounts of $5,000
or any multiple thereof will be effected on the records of DTC and its participants
pursuant to rules and procedures established by DTC and its participants. Principal,
premium, if any, and interest with respect to the Certificates will be payable to
DTC or its nominee as registered owner of the Certificates. Transfer of principal,
premium, if any, and interest to DTC participants ~~Till be DTC's responsibilit~j, and
transfer of principal, premium, if any, and interest with respect to the Certificates
to beneficial owners of the Certificates by DTC participants will be the
responsibility of such participants and other nominees of beneficial owners.
Neither the Trustee, the Company nor the County will be responsible or liable for
such transfer of payments or for maintaining, supervising or revieuJing the records
maintained b~T DTC, its participants or persons acting through such participants.
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{b) If {i) DTC determines not to continue to act as securities depository
far the Certificates or {ii) a County Representative so directs, the Company will
arrange to discontinue the book-entry s~Tstem ~~jith DTC. If the County identifies an
alternate qualified securities depository to replace DTC, that depositary ti~Till
replace DTC and all references to DTC in this Trust Agreement will be deemed
references to such alternate depository. If the County fails to identify another
qualified SecurltleS depository to replace DTC, the Company will deliver fully-
registered certificates as replacements for Certificates in book-entry form. Such
certificates ~~Till be in such form as the Company, `~Tith the County's appro~Tal, may
hereafter authorize.
Section 2.02. Execution. The Certificates will be signed on the
Company's behalf by the manual or facsimile signature of its President or any Vice
President, and the Company's seal will be impressed or imprinted on the
Certificates by facsimile or otherwise and attested by the manual or facsimile
signature of the Company's Secretary or any Assistant Secretary. If any Company
officer whose signature is on a Certificate no longer holds that office at the time
the Tnistee authenticates such Certificate, such Certificate will nevertheless be
valid. If a person signing a Certificate is the proper officer on the actual date of
execution, the Certificate will be valid even if that person is not the proper officer
on the noYniY~al date of action.
Section 2.03. Authentication. The Certificates will bear a certificate of
authentication, substantially in the form set forth in Exhibit B, and no Certificate
will be valid until the Trustee has duly executed the certificate of authentication
and inserted the authentication date thereon. The Trustee will authenticate each
Certificate with the signature of an authorized officer or employee, but it will not
be necessary for the same person to authenticate all of the Certificates. Only such
authenticated Certificates will be entitled to any right or benefit under this Trust
Agreement, and such certificate on any Certificate issued under this Trust
Agreement will be conclusive evidence that the Certificate has been duly issued
and is secured by the pro~risions hereof.
Section 2.04. Registration and Exchange of Certificates; Persons
Treated as O~~ners. Certificates may be exchanged and transferred only on a
register which the Trustee will establish and maintain. Upon surrender for transfer
of any Certificate to the Trustee, duly endorsed for transfer or accompanied by an
assignment duly executed by the Owner or the Owner's duly authorized attorney,
the Trustee will authenticate a new Certificate or Certificates in an equal total
principal amount and registered in the name of the transferee; provided, however,
that the Trustee is not required to exchange or register the transfer of any
Certificate after the giving of notice calling such Certificate for prepayment.
J3862v2 7
Certificates may be exchanged for an equal total principal amount of
Certificates of different but authorized denominations. The Trustee will
authenticate and deli~Ter Certificates that the Owner making the exchange is
entitled to receive, bearing numbers not then Outstanding.
The Trustee will deliver to the transferee any applicable notice of
prepayment when it effects a transfer or exchange of any Certificate after the
mailing of notice calling the Certificate or any portion of the Certificate for
prepayment.
The Owner will be the absolute owner of the Certificate for all purposes, and
payment of principal, premium, if any, and interest v~Jill be made only to or upon
the written order of the Owner or the Owner's legal representative, except that
interest payments will be made to the person shown as the owner of the Certificate
as of the applicable Record Date.
The Trustee must require the payment by an Owner requesting exchange or
transfer of any tax or other governmental charge required to be paid in respect of
the exchange or transfer, but must not impose any other charge.
Section 2.05. Mutilated, Lost, Stolen or Destroyed Certificates.
(a) If any Outstanding Certificate is damaged, mutilated, lost, stolen or
destroyed, the Company will execute, and the Trustee Till authenticate and
deli~Ter, a replacement Certificate, of the same tenor as the damaged, mutilated,
lost, stolen or destroyed Certificate, in the manner provided below.
(b) Application for exchange and substitution of damaged, mutilated,
lost, stolen or destroyed Certificates must be made to the Trustee. In every case,
the applicant for a replacement Certificate must furnish to the Company, the
County and the Trustee such security or indermuty as each may require to save it
harmless. In every case of loss, theft or destruction of a Certificate, the applicant
must also furnish to the Company, the County and the Trustee evidence to their
satisfaction of the loss, theft or destruction of such Certificate. In the case of
damage or mutilation of a Certificate, the applicant will surrender the Certificate
so damaged or mutilated.
(c) Notu~•ithstanding the foregoing, if any such Certificate has matured,
and no default is then continuing in the payment of the principal or interest with
respect to such Certificate, the County may authorize the payment of the same
(~~rithout surrender thereof except in the case of a damaged or mutilated
Certificate} instead of issuing a substitute Certificate, provided security ar
~3 s6zti~z g
indemnity is furnished as provided above in the case of a lost, stolen or
destroyed Certificate.
(d) The Trustee will charge the O«uer of such Certificate ti~rith all
expenses in connection uTith the issuance of any substitute Certificate. Every
substitute Certificate issued pursuant to the provisions of this Section because
any Certificate is lost, stolen or destroyed, whether or not the lost, stolen or
destroyed Certificate may be found at any time, ar may be enforceable by
anyone, ~~Till be entitled to all the benefits of this Trust Agreement equally and
proportionally with any and all other Certificates duly executed and delivered
hereunder.
Section 2.06. Cancellation. Whenever a. Certificate is delivered to the
Trustee for cancellation (upon payment, prepayment or otherwise} or for transfer,
exchange ar replacement, the Trustee urill promptly destroy the Certificate and
deliver a written certificate of such destruction to the County.
Section 2.07. Temporary Certificates. Prior to the preparation of
Certificates in definitive farm the Company may execute, and the Trustee may
authenticate and deliver, temporary Certificates in such denominations as the
County may determine, but otherwise in substantially the form set forth in Exhibit.
B, with appropriate variations, omissions and insertions. The Company will
promptly prepare, execute and deliver to the Trustee before the first Certificate
Payment Date for such Certificates in definitive form and thereupon, upon
surrender of Certificates in temporary farm, the Trustee will authenticate and
deliver in exchange therefor Certificates in defintive farm of the same maturity
having an equal aggregate principal amount. Until exchanged for Certificates in
definitive form, Certificates in temporary form will be entitled to the lien and
benefit of this Trust Agreement.
Section 2.08. Non-Presentment of Certificates. (a) If any Certificate
is not presented for payment when the principal with respect to the same becomes
due (whether at maturity, upon acceleration or call for prepayment or otherv~~•ise},
all liability to the Owner thereof for the payment of such Certificate will be
completely discharged if funds sufficient to pa~J such Certificate and the premium,
if any, and interest due with respect thereto are held by the Trustee for such
Owner's benefit, and thereupon it will be the Trustee's duty to bald such funds
subject to subsection (b) belo~T, without liability for interest thereon, for the benefit
of such Owner, ti~rho will thereafter be restricted exclusively to such funds far any
claim of ~~rhatever nature under this Trust Agreement with respect to such
Certificate.
J3862v2 g
(b) Notwithstanding any provision of this Trust Agreement to the contrary,
the Trustee will dispose of moneys held by it for the payment of principal,
premium, if any, or interest with respect to Certificates left unclaimed for five
years after the date the principal with respect to the same becomes due in
accordance with N.C. Gen. Stat. Sec. 116B-51 or any successor provision. The
Owners of such Certificates will thereafter be entitled to look only to their
remedies under N.C. Gen. Stat. Chapter 116B or any successor provision, and all
liability of the County and the Trustee ujith respect to such moneys urill cease.
ARTICLE III
PREPAYMENT
Section 3.01. Prepayment Dates and Prices. The 2006A Certificates may
not be prepaid except as provided in tlus Section.
(a) 2006A Certificates maturing on or after April 1, 2017, are subject to
prepayment at the County's option on or after April 1, 2016, in whole at any time
or in part on any Certificate Payment Date, upon payment of the principal amount
to be prepaid plus interest accrued to the prepayment dates, without premium.
(b) 2006A Certificates maturing on April 1, 2026, are required to be
prepaid in part prior to maturity pursuant to the terms of the sinking fund
requirements of Section 3.05 at a prepayment price equal to the principal amount
to be prepaid plus interest accrued to the prepayment date, urithout premium.
(c) The 2006A Certificates are subject to prepayment u1 whole or in part.
on any Certificate Payment Date from Net Proceeds transferred to the Prepayment
Account pursuant to Section 4.OG at a prepayment price equal to the principal
amount to be prepaid plus interest accrued to the prepayment date, without
premium.
(d} The amendment or supplement to this Agreement providing for the
issuance of Additional Certificates, as provided iri Section 1.05{iii), v~Till provide
for the prepayment terms and conditions of an~j Additional Certificates.
Section 3.02. Selection of Certificates far Prepayment.
(a) If less than all of the Certificates are to be prepaid pursuant to
subsection 3.01(a) or 3.01(c}, they ujill be prepaid as among maturities in such
manner as the County maSj elect.
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(b) If less than all of the Certificates of any maturity are to be prepaid, the
Trustee will select the Certificates to be prepaid by lot; provided, however, that so
long as a book-entry system ujith DTC is used for determiiung beneficial
ownership of Certificates, if less than all of the Certificates within a maturity are to
be prepaid, DTC will determine which of the Certificates within any such maturity
are to be prepaid in accordance with DTC's own rules and procedures.
(c) In any case, (1 }the portion of any Certificate to be prepaid will be in
the principal amount of $5,000 or some multiple thereof,, and (2) in selecting
Certificates for prepayment, each Certificate will be considered as representing that
number of Certificates which is obtained by dividing the principal amount of such
Certificate by $5,000. If a portion of a Certificate will be called far prepayment, a
new Certificate in principal amount equal to the unpaid portion thereof will be
issued to the registered owner upon the surrender thereof.
Section 3.03. Prepayment Natives. (a) The Trustee, upon being
satisfactorily indemnified with respect to expenses, will send notice of prepayment
no less than 30 nor more than GO days prior to the prepayment date, by registered
or certified mail, return receipt requested, as follouTs:
(1) If DTC or its nominee is the registered owner of the Certificates, to DTC.
(2) If no book-entry-only system of registration is in effect, to each of the
registered owners of the Certificates at their addresses as shown on the Trustee's
registration books.
(3) In any case, to at least two national information services which
disseminate redemption and prepayment information, such as the following:
(A) Financial Information, Inv.'s
Daily Called Bond Service
30 Montgomery Street, 10th Floor
Jersey City, New Jersey 07302
Attention: Editor;
(B) Keruzy Information Service's
Called Bond Service
55 Broad Street, 28th Floor
New York, New York 10004;
(C) Moody's Municipal and Government
Called Bond Record
99 Church Street, $th Floor
93 362v2 11
New York, New York 10007
Attention: Municipal News Report; and
{D)Standard &. Poor's Called Bond Record
55 Water Street
New York, New York 10041.
(4) In any case, to the Insurer.
Failure to give any notice specified in (1) or (2), as applicable, or any defect
therein, will not affect the validity of any proceedings for the prepayment of any
Certificates ti~Jith respect to v~rlnich no such failure has occurred. Failure to give any
notice specified in {3} or {4), or any defect therein, will not affect the validity of
anyT proceedings for the prepayment of any Certificates with respect to which the
1lotlce specified in (1) or (2) is correctly gizTen. Any notice mailed as provided
herein will conclusively be presumed to have been given regardless of whether
actually received by any Owner.
(b) Any prepayment notice, except a prepayment notice in respect of a
sinking fund payment date, may state that the prepa~Tment to be effected is
conditioned upon the Trustee's receipt on or prior to the prepayment date of
moneys sufficient to pay the principal of and premium, if any, and interest on the
Certificates to be prepaid, and that if such moneys are not so received such notice
shall be of no force or effect and such Certificates shall not be required to be
prepaid. If such notice contains such a condition and the Trustee does not receive
moneys sufficient to pay the principal of and premium, if any, and interest on such
Certificates on or prior to the prepayment date, the prepayment u~•ill not be made
and the Trustee will, within a reasonable time thereafter, give notice, in a mariner
in ti~rhich the prepayment notice ~~jas given, that such moneys v~Tere not so received.
{c) Each prepayment notice must specify (1) the complete designation,
including Series, of the Certificates to be prepaid, {2} the certificate and CUSIP
numbers of the Certificates to be prepaid, (3) the dated dates and maturity dates
and the interest rates of the Certificates to be prepaid, (4) the date fixed for
prepayment, (5) the principal amount of Certificates or portions thereof to be
prepaid, (6) the applicable prepayment price, (7} the address of the place or places
of payment, (8) tlne Trustee's name and telephone number, and the name of a
contact person, (9) that payment of the principal amount and premium, if any, with
respect to such Certificates will be made upon presentation and surrender of the
Certificates to be prepaid to the Trustee, (10) that interest accrued to the date fixed
far prepayment will be paid as specified in such notice, and (l 1 } that on and after
the established prepayment date interest on Certificates which have been prepaid
will cease to accrue.
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In preparing such notices, the Trustee will take into account, to the extent
applicable, any regulatory statement of any Federal or state administrative body
ha~Ting jurisdiction over the tax-exempt securities industry, including, without
limitation, Release No. 34-23856 of the Securities and Exchange Commission or
any subsequent amending or superseding release.
Section 3.04. Certificates Payable on Prepayment Date; Interest Ceases
To Accrue. If on or before the date fixed for prepayment funds are deposited ~~Tith
the Trustee to pay the principal, premium, if any, and interest accrued to the
prepayment date with respect to the Certificates called for prepayment, the
Certificates or portions thereof thus called for prepayment will cease to accrue
interest from and after the prepayment date, will no longer be entitled to the
benefits pro~Tided by this Agreement and will not be deemed to be Outstanding
under this Agreement.
Section 3.05. Mandatory Sinking Fund Prepayment. The Trustee, from
amounts received from or on behalf of the County, will prepay 2006A Certificates
maturing on April 1, 2026, on April l in }Tears and amounts upon payment of 100%
of the principal amount thereof plus interest accrued to the prepayment date as
follows:
Year Amount
2024
2025
2026
Notwithstanding the foregoing, on or before the 70th day next preceding any
sinking field payment date, the County may do any or all of the follov~Ting:
{1) pay to the Trustee for deposit in the PrepayTment Account such amount
as the County may determine, accompanied by a certificate signed by a
County Representative directing the Trustee to apply such amount to the
purchase of Certificates required to the prepaid on such sinking fund
payment date; the Trustee must thereupon use all reasonable efforts to
expend the greatest portion of such funds as may be practicable iri the
purchase of such Certificates at a price not exceeding the principal amount
thereof plus accrued interest to the purchase date; or
(2) deliver to the Trustee for cancellation Term Certificates required to be
prepaid on such sinking fund payment date in any aggregate principal
amount desired, or
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(3) instruct the Tnistee to apply a credit against the County's sinking fund
payment obligation for any such Term Certificates that previously have been
prepaid (other than through the operation of the sinking fund requirements)
and canceled by the Trustee but not previously applied as a credit against
any sinking fund payment obligation.
The Trustee will credit against the County's sinking fiuzd payment obligation on
such sinking fund payment date the amount of such Certificates so purchased,
delivered or previously prepaid as described in paragraphs (1), (2) or (3} abo~Te.
Within seven days of receipt of such amount, Term Certificates or
instruction to apply a credit (as described in paragraphs (1), (2) and (~) above), any
amounts remaining in the Principal Account in excess of the amount required to
fulfill the remainng required sinking fund prepayment obligation on the next
sinking filed payment date will, as directed by a County Representative, either be
(A) transferred to the Interest Account or (B) used to prepay Certificates as soon as
practicable.
Any funds received by the Trustee pursuant to paragraph (1) above but not
expended as provided therein for the purchase of Certificates ujithin twenty days
after such 70th day ~.•ill be transferred to the Principal Account to the extent the
amounts in the Principal Account are insufficient to fulfill the required payment on
the next principal or sinking fund payment date. To the extent amounts in the
Principal Account are not so insufficient, the Trustee will, as directed by a County
Representative, either (A) transfer such fiends to the Interest Account or (B) use the
funds to prepay Certificates as soon as practicable.
ARTICLE IV
PROJECT FUND; OTHER FUNDS AND ACCOUNTS
Section 4.01. Creation and Use of Project Fund. The Trustee will
establish a special fund designated as the "Orange County 2006 Public
Improvement Projects Fund." The Trustee will keep such Fund separate and apart
from all other funds and moneys held by it, and will hold and administer such Fund
as pro~Tided in tlus Trust Agreement. Moneys in the Project Fund will be expended
only for Project Costs, except as provided in Section 4.03.
Section 4.02. Deposit of Moneys; Payment of Project Costs.
(a) The Trustee will deposit into the Project Fund the amount specified in
the certificate referenced in Section 1.04(e}, any amount to be deposited therein as
specified in the certificate referenced in Section 1.0~(~T), an}r amounts received as
93 362v2 14
refunds of State sales tax with respect to expenditures for Project Costs previously
paid far from Project Fund amounts and all other amounts paid to it far deposit in
the Project Fund.
(b) Subject to the limitations in paragraph (d) belouJ, the Trustee ujill
disburse moneys in the Project Fund from time to time, either to pay Project Costs
directly or to reimburse the County for previous expenditures for Project Costs,
upon receipt by the Trustee of a requisition substantially in the form of Exhibit C.
The Trustee may rely conclusively on such requisitions as authorization for such
payments and will have no duty or responsibility to verif~r any matters therein.
(c) Unless otherwise directed by the County, the Trustee will disburse
moneys from the Project Fund that are due to the County by wire transfer to such
bank account or accounts in the United States as the County may designate from
time to time by notice to the Trustee.
(d) The Trustee shall not, hov~Tever, be required to (but may in its
discretion} disburse any moneys from the Project Fund during the continuation of
anyT E~Tent of Default, except that the Trustee will make such disbursements if so
directed by the Insurer.
Section 4.03. Transfers of Unexpended Proceeds. Upon receipt of
the Completion Certificate, the Tnistee will withdraw all remaining moneys in the
Project Fund (other than any moneys to be retained therein pursuant to the
Completion Certificate) and deposit such moneys in the Payment Fund to be
applied to the payment of principal and interest ~~Tith respect to the 2006A
Certificates as directed by a County Representati~-~e.
Section 4.04. Other Funds and Accounts. The Trustee will establish
the following special funds and accounts, will keep the same separate and apart
from all other funds and moneys held by it, and will hold and administer the same
as provided herein:
(a) Orange County 2006 Public Improvement Projects Payment Fund,
and therein an Interest Account, a Principal Account and a Prepayment Account;
and
(b} Orange County 2006 Public Improvement Projects Net Proceeds
Fund.
Section 4.0~. Pa~~ment Fund. {a} The Trustee will deposit in the
Interest Account in the Payment Fund the amount specified in the certificate
J3862v2 15
referenced in Section 1.04{e), and will deposit in the proper account all other
amounts paid to it for deposit in the Payment Fund.
(b) The Trustee ~~~ill pay the principal and interest with respect to
Certificates from the Principal Account and the Interest Account, respectively, as
the same become due.
(c) The TrLtstee will determine whether any amounts are on deposit with
the Trustee that are to be credited against the amount of the County's Installment
Payments at the times and in the manner provided for in [Section 2.1(b)] of the
Financing Contract.
(d} On the second Business Day preceding each Certificate Payment
Date, the Trustee will first set aside an amount sufficient to pay the interest with
respect to the Certificates becoming due and pa}cable on such Certificate Payment
Date, and then an amount sufficient to pay the principal ~~•ith respect to the
Certificates becoming due and payable on such Payment Date, and v~Till transfer on
the Certificate Payment Date the amounts due to DTC as registered owner of the
Certificates.
(e} If the amount on deposit in the Principal Account or the Interest
Account is insufficient for the purposes thereof t~vo Business Days before any
Certificate Payment Date, the Trustee ~~rill notify the County of the amount of such
insufficiency and the Trustee will transfer to such Accounts such amounts as may
be necessary therefor from the Prepayment Account.
If the amount on deposit in the Interest Account on any Certificate Payment
Date exceeds the amount payable on account of interest on the Certificates on such
date, the Trustee will, as directed by a County Representative, retain such excess in
the Interest Account or transfer such excess to the Principal Account to be credited
against subsequent required deposits thereto.
If the amount on deposit in the Principal Account on any [September 1]
exceeds the amount required on such date to pay principal of Certificates coming
due on such date (whether by reason of maturity or mandatory redemption}, then
the Trustee will, as directed by a County Representati~Te, retain such excess in the
Principal Account or transfer such excess to the Interest Account to be credited
against subsequent required deposits thereto.
(f} The Trustee will deposit in the Prepayment Account of the Payment
Fund all amounts paid to it for deposit therein, and, except as provided in
subsection {g) below, will use such amounts within 12 months of their deposit
therein as directed by a County Representative (1) to pay Certificates called for
93 362v2 16
prepayment on their prepayment dates, or (2) to purchase, for cancellation;.
Certificates at or below their prepayment price on the next date on which such
Certificates maybe prepaid.
The Trustee u~•ill transfer any amounts not so used u~•ithin 12 months of their
deposit in the Prepayment Account to the Interest Account in the Payment Fund for
use on the next Certificate Payment Date to pay interest with respect to the
Certificates, and pending such use will invest such funds in Permitted Investments
ha~Ting a yield not in excess of the Restricted Yield.
Subject to retaining moneys necessary to pay Certificates that have been
called for prepayment but not yet presented for payment, the Trustee will use
amounts in the Prepayment Account as needed to make transfers to the Interest
Account or the Principal Account to the extent the balances therein may be
insufficient for the purposes thereof.
{g) The Trustee will hold amounts transferred to the Prepayment Account
from the Net Proceeds Fund pursuant to Section 4.OG(b} and apply such amounts to
the prepayment of Certificates pursuant to Section 3.01(c} as directed by a County
Representative.
Section 4.06. Net Proceeds Fund. (a) The Trustee will deposit Net
Proceeds in the Net Proceeds Fund as provided in [Section 6.2(c)] of the Financing
Contract. The Trustee will invest and reinvest all amounts on deposit in the Net
Proceeds Fund in Permitted Investments having a yield not in excess of the
Restricted Yield, to the extent such amounts are on deposit therein on any date
follouTing the later of (1 }the third anniversary of the Closing Date or (2} 30 days
from the payment of such Net Proceeds to the County or the Trustee, as applicable.
(b) The Trustee hill disburse Net Proceeds for replacement or repair as
pro~Tided in [Section G.3(c)] of the Financing Contract, or transfer such proceeds to
the Prepayment Account in the Payment Fund for application as provided in
Section 4.05(g), in either case as directed by a County Representative as provided
in [Section 6.3] of the Financing Contract. The Trustee shall not, however, be
required to (but may in its discretion} disburse an~J moneys from the Net Proceeds
Fund during the continuation of an Event or Default, except that the Trustee ~~Till
make such disbursements if so directed by the Insurer.
{c) If the County directs the Trustee to apply amounts on deposit in the
Net Proceeds Fund to the prepayment of Certificates pursuant to [Section 6.3(a} or
6.3(b}] of the Financing Contract, the Trustee will provide for such prepayment
pursuant to Section 3.01(c} at the earliest practicable date. Pending disbursement
for prepayment, the Trustee will hold such amounts in the Net Proceeds Fund and
93 862v2 17
invest such amounts only in Federal Securities having a maturity date not later than
the prepayment date.
(d) After all principal and interest ti~Tith respect to the Certificates has been
paid in full, and all the Trustee's fees and expenses hay-re been paid, or provision
has been made for the payment thereof satisfactory to the Tnistee, the Trustee will
pay any moneys remaining in the Net Proceeds Fund to the County.
ARTICLE V
SECURITY PROVISIONS
Section 5.01. Security Provisions.
(a) Assignment o, f Rights under Financing Contt°act. The Company
transfers and absolutely assigns to the Trustee, far the benefit of the Owners and
without recourse against the Company, all of the Company's rights under the
Financing Contract, including, without limitation, (i) the right to receive and
collect all of the Installment Payments, (ii} the right to take all actions and give all
consents under the Financing Contract, and (iii) the right to exercise such rights
and remedies conferred on the Company pursuant to the Financing Contract as
may be necessary or convenient (A) to enforce payment of the Contract Payments
and any other amounts required to be deposited in any Fund established under this
Trust Agreement, or (B} otherujise to protect the Owners' interests if the County
defaults under the Financing Contract. Any Installment Payments collected or
received by the Company ~~Till be deemed to be held and to have been collected or
received by the Company as the Trustee's agent, and if received by the Company at.
any time will be deposited by the Company with the Trustee within one Business
Day after the receipt thereof.
(b) A.s.si~~nment o, f Rights under Deed o, f Trust. The Company transfers
and absolutely assigns to the Trustee, for the benefit of the Owners and uJithout
recourse against the Company, all of the Company's rights as beneficiary under the
Deed of Trust.
(c) As.sigrcment of1l~Ione~s and ~nvest~nents. The Company absolutely
assigns to the Trustee, for the benefit of the Owners and without recourse against
the Company, all moneys and investments thereof held by the Trustee in the Funds
and Accounts under this Trust Agreement. The Trustee will hold all such moneys
in trust and will apply the same to the purposes specified herein and in the
Financing Contract.
The foregoing assignments are absolute and not for the purpose of security.
93 362v2 18
Notwithstanding the foregoing assignments, the Company will retain its
rights to notices, indemnification and payment of costs under the Financing
Contract and the Deed of Trust.
Section 5.02. Limited Obligation. Each Certificate will evidence a
proportionate and undivided ownership interest in Installment Payments. The
Certificates are payable solely from Installment Payments as, when and if the same
are recei~Ted by the Trustee, except to the extent payTable from the proceeds of the
Certificates, income from investments, and Net Proceeds as provided in this Trust.
Agreement and the Financing Contract, which Installment Payments and other
moneys have been pledged as provided herein to secure payment of the
Certificates.
ARTICLE VI
INVESTMENT OF MONEYS IN FUNDS
Section 6.01. In~~estments Authorized.
(a) Subject to the further provisions of this Article VI, the Trustee will
invest and reinvest moneys held by it hereunder, upon the written direction of a
County Representative, in Permitted Investments. Such investments, if registrable,
will be registered in the name of the Trustee or its assignee far the benefit of the
Owners and held by the Trustee. If the County does not provide the Trustee with
written direction as to any in~Testment or reinvestment provided for under this Trust
Agreement, the Trustee will invest or reins-rest such moneys in the North Carolina
Capital Management Trust (or its successor).
(b) The Trustee will invest and reinvest amounts on deposit from time to
time in the Project Fund only iri Permitted Investments having a yield not in excess
of the Restricted Yield to the extent any such amounts remain on deposit therein
(or remain on deposit in the Payment Fund after being transferred there pursuant to
Section 4.03) on any date following the later of (a} the third aruuversary of the
Closing Date or (b) 30 days from their deposit in the Project Fund.
(c) The Trustee may purchase or sell, to itself or to any affiliate, as
principal or agent, investments of funds held under this Trust Agreement. The
Trustee may act as purchaser or agent in the making or disposing of any
investment, and may make any investment through its bond or investment
department.
J3862v2 19
(d) The Trustee will not be responsible or liable for any loss suffered in
connection with any investment of funds made by it in accordance lvith this
Section.
(e} Moneys u~•ill be invested in Permitted Investments having maturities
not extending beyond the date on which the County estimates such moneys are to
be needed for their intended purposes. Investments will be considered as maturing
on the date on which they are redeemable without penalty at the holder's option or
the date on which the Trustee may require their repurchase without penalty
pursuant to a repurchase agreement.
Section 6.02. Held in Trust. The moneys and investments held by the
Trustee under this Trust Agreement are irrevocably held in trust for the benefit of
the O~~Tners, and such mone~rs, and an~j income or interest earned thereon, will be
expended only as provided in this Trust Agreement, and will not be subject to levy
or attachment or lien by or for the benefit of any creditor of the Company, the
Trustee or the County.
Section 6.03. Investments Part of Fund. Any income, profit or loss
on the investment of moneys held by the Trustee hereunder uTill be credited to the
respective fund to which such moneys are credited, except as otherwise provided
herein.
Section 6.04. Accounting. The Trustee will furnish to the County, not
less frequently than monthhT, an accounting of all investments made by the Tnistee
in all funds and accounts held by the Tnistee. Such accounting may be supplied in
the form of the Trustee's customary statements. The Trustee u~•ill keep accurate
records of all funds admiiustered by it and of all Certificates paid and discharged.
Section 6.05. Valuation. For the purpose of determining the amount on
deposit in any Fund or Account held under this Trust Agreement, the Trustee ~~Till
~Talue all Permitted Investments credited to such Fund or Account at the market
value thereof. Such valuations will be made at least every six months and at such
additional times as the County may request, but in no event more frequently than
monthly.
Section 6.06. Disposition. The Trustee will sell, or present for
redemption, and reduce to cash any Permitted Investment in a Fund or Account at.
the best price obtainable whenever the cash balance in such Fund or Account is
insufficient for the purposes thereof.
Section 6.07. Commingling of Moneys in Funds. The Trustee, at its
sole discretion and upon a County Representative's appro~Tal, may commingle any
J3362v2 20
of the funds held by it pursuant to this Trust Agreement with any other separate
fund or funds for investment purposes only; provided, however, that the Trustee
will separately account for all Funds or Accounts held by it under this Trust
Agreement.
Section 6.08. Tax Covenants. The County, the Company and the
Trustee covenant with the Owners that, notwithstanding any other provision of this
Trust Agreement, they ~~jill make no use or investment of the proceeds of the
Certificates v4-hich will cause the Certificates to be "arbitrage bonds" or "private
activity bonds" within the meaning of the Code.
Section 6.09. Information Concerning Investments. The Trustee ti~Jill
establish and maintain written records regarding investments made under this
Article VI, and ~~Till supply such information to the County at its request, including
information as to: {a) purchase date; (b) purchase price; (c) information
establishing that the purchase was at a fair market value as of the purchase date
{e.g., the published quoted bid by a dealer in such an investment on the purchase
date); (d) any accnied interest paid; (e) face amount; {f) coupon rate; {g)
periodicity of interest payments; (h) disposition price; (i) any accrued interest
received; and (j} disposition date.
Section 6.10. Restricted Yield Investments. The Trustee may invest
funds held hereunder without regard to yield despite any provision herein directing
investment with regard to the Restricted Yield provided that prior to making such
an investment, the Trustee receives an Opinion of Special Counsel that such an
investment will not adversely affect the exclusion from gross income that would
otherwise be applicable to interest components of Installment Payments.
ARTICLE VII
DISCHARGE OF TRUST AGREEMENT
Section 7.01. Certificates Deemed Paid; Discharge of Trust
Agreement. Any Certificate will be deemed paid for all purposes of this Trust
Agreement when (a) payment of the principal and interest with respect to such
Certificate to the due date of such principal and interest (whether at maturity, upon
prepayment or otherwise) either (i) has been made in accordance ~~Tith the terms of
the Certificates or {ii) has been provided for by irrevocably depositing with the
Trustee or other fiduciary in escrow (A) cash sufficient to make such payment or
{B) Federal Securities maturing as to principal and interest u1 such amounts and at
such times as will insLlre, without rein~restment, the availability of sufficient
moneys to make such payment (which will be evidenced or verified by a certificate
or other writing, in form and substance satisfactory to the Trustee, of a firm of
independent certified public accountants acceptable to the Trustee), and which are
93 362v2 21
not subject to redemption or purchase prior to maturity at the option of anyone
other than the holder, and (b) all compensation and expenses of the Trustee
pertaining to each Certificate in respect of which such deposit is made have been
paid or pro~Tided far to the Trustee's satisfaction. When a Certificate is deemed
paid, it will no longer be secured by or entitled to the benefits of this Trust
Agreement, and all rights to payment of such Certificates will be limited to
payment from moneys or Federal Securities under {a}(ii) above, and except that it
may be transferred, exchanged, registered or replaced as provided in Article II.
Notwithstanding the foregoing, no deposit Colder clause (a)(ii) above uJill be
made until the County has fi~rnished the Trustee an Opinion of Special Counsel to
the effect that the deposit of such cash or Federal Securities will not cause the
Certificates to become "arbitrage bonds" within the meaning of the Code. Also, if
the Certificate is to be prepaid prior to maturity, notice of prepayment of the
Certificate must be given in accordance ujith Article II for such deposit to be
deemed a payment of such Certificate. Alternatively, if the Certificate is not to be
paid or prepaid within the next 60 days, the County must give the Trustee, in form
satisfactory to the Trustee, irrevocable instnictions (A) to provide notice, as soon
as practicable, in accordance with Article II, that the deposit required by (a)(ii)
above has been made with the Trustee and that the Certificate is deemed to be paid
under this Article and stating the maturity or prepayment date upon which moneys
are to be available for the payment of the principal with respect to the Certificate,
and (B) to give notice of prepayment not less than 30 nor more than 60 days prior
to the prepayment date far such Certificate as provided in Section 3.03.
When all Outstanding Certificates are deemed paid under the foregoing
prop-risions of this SeGtlon, the Trustee Till upon request acknowledge the
discharge of the lien of this Trust Agreement and the Deed of Tnist and repay any
excess amounts remaining on deposit in the Funds established under this Trust
Agreement to the County; provided, however, that the obligations under Article II
in respect of the transfer, exchange, registration, discharge from registration and
replacement of Certificates will sur~~ive the discharge of the lien of this Trust
Agreement, and further provided that in the case of a deposit made under {a)(ii)
above, the Certificates v~Till continue to constitute proportionate and undivided
interests in Installment Payments arising under the Financing Contract.
No deposit will be made or accepted and no use made of any such deposit
that u~•ould cause any Certificates to be treated as "arbitrage bonds" within the
meaning of the Code.
Section 7.U2. Application of Trust Money. The Trustee gill hold in
trust money or Federal Securities deposited with it pursuant to Section 7.01 and
will apply the deposited money and the money paid with respect to the Federal
93862v2 22
SecL~rities in accordance with this Trust Agreement only to the payment of
principal, premium, if any, and interest lvith respect to the Certificates.
ARTICLE VIII
DEFAULTS; REMEDIES
Section 8.01. Events of Default. An "Event of Default" is any of the
follo~~ring:
(a) Default in the payment of the principal with respect to any Certificate
when the same becomes due and payable, whether at the stated maturity thereof or
upon proceedings for mandatory (but not optional) prepayment.
(b) Default in the payment of any installment of interest with respect to
any Certificate when the same becomes due and payable.
(c) The occurrence of any Event of Default as defined in the Financing
Contract.
Section 8.02. Acceleration. If any Event of Default occurs and is
continuing, then (a} the Trustee, with the Insurer's consent and by notice to the
County, or (b) the Majority Owners, ujith the Insurer's consent and by notice to the
County and the Trustee, may declare the principal of and accrued interest with
respect to the Certificates to be due and payable immediately, and such principal
and interest ~~Till thereupon become and be immediately due and payable. The
Trustee uTill immediately give notice of acceleration to the Owners and the Insurer.
The Trustee, with the Insurer's consent may, and upon the Insurer's direction will,
rescind an acceleration and its consequences if all existing Events of Default have
been cured or waived, if the rescission would not conflict with any judgment or
decree.
Section 8.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the principal or interest with respect to the Certificates or to
enforce the performance of any provision of tlus Trust Agreement, the Certificates,
the Financing Contract or the Deed of Trust.
The Trustee may maintain a proceeding even if it does not possess any of the
Certificates or does not produce any of them in the proceeding. A delay or
omission by the Trustee or an}r O~~rner in exercising any right or remed}r accruing
upon an Event of Default will not impair the right or remedy or constitute a waiver
J3862v2 ~3
of or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
Section 8.04. Waiver of Past Defaults. The Majority Owners, with the
Insurer's consent and by notice to the Trustee, may waive an existing Event of
Default and its consequences. When an Event of Default is ti~raived, it is cured and
stops continuing, but no such waiver will extend to any subsequent or other Event
of Default or impair any right consequent to it.
Section 8.05. Majority's Control. The Majority O~~ners may, upon
satisfactory indemnification of the Trustee, direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of exercising
any trust or pou~•er conferred on it. The Trustee, however, may refuse to follow any
direction that conflicts with law or tlus Trust Agreement or, subject to Section
9.01, that the Trustee determines is unduly prejudicial to the rights of other Owners
or would involve the Trustee in personal liability.
Section 8.06. Limitation on Suits. An Owner may not pursue any remedy
lvith respect to this Trust Agreement or the Certificates {except as provided in
Section $.07) unless {a) the O~~jner gi~Tes the Trustee notice stating that an Event of
Default is continuing, (b) the Majority Owners make a written request to the
Trustee to pursue the remedy, (c} such Owner or Owners offer to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or expense, and (d)
the Trustee does not comply u~•ith the request uTithin 60 days after receipt of the
request and the offer of indemnity.
An Owner may not use this Trust Agreement to prejudice the rights of
another Owner or to obtain a preference or priority over the other Owners.
Section 8.07. Rights Ta Receive Payment. The right of any Owner to
receive payment of principal, premium, if any, and interest ti~rith respect to a
Certificate, on or after the due dates expressed in the Certificate, or to bring suit for
the enforcement of any such payment on or after such dates, uTill not be impaired
or affected without such Owner's consent.
Section 8.08. Collection Suit by Trustee. If an Event of Default occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the County for the whole amount remaining unpaid.
Section 8.09. Trustee May File Proofs of Claim. (a) The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the O~~Jners allo~ved in anv
judicial proceedings relati~Je to the County, the Company, their creditors or their
93 362v2 ~4
property and, unless prohibited by law or applicable regulations, may vote on
behalf of the Owners in any election of a trustee in bankruptcy or other person
performing similar functions.
(b) If the Trustee incurs expenses or renders services in any proceedings
which result from an Event of Default, or from any event or occurrence which,
with the passage of time, v~Tould become an Event of Default, the expenses so
incurred and compensation far services so rendered are intended to constitute
expenses of admiiustration under the United States Bankruptcy Cade or equi~Talent
lau~•.
Section 8.10. Insurer's Control. Notwithstanding any provision of this
.Article VIII to the contrary, neither the Trustee nor the Owners may declare any
acceleration pursuant to Section 8.02, pursue any remedy, waive an}r E~Tent of
Default or otherujise control or direct any proceedings on default without the
Insurer's consent, except that an Owner shall in all cases have the rights provided
in Section 8.07. The Trustee must take any such action as the Insurer may direct.
Section 8.11. Priorities. If the Trustee collects any money pursuant to this
Article, it will deposit the same in a special account in the Payment Fund and pay
out such money in the fo1lo~Ting order:
(a) If the principal with respect to all Certificates has not become or will not
have been declared due and payable, all such moneys in the Payment Fund will be
applied:
First, Costs and Expenses: to the payment of the costs and expenses of the
Trustee and of the Owners in declaring such Event of Default, including reasonable
compensation to its or their agents, attorneys and counsel;
Second, Interest: to the payment to the persons entitled thereto of all
installments of interest then due in the order of the matL~rity of such installments,
and, if the amount available is not sufficient to pay u1 full any installment or
installments maturing on the same date, then to the payment thereof ratably,
according to the amounts due thereon, to the persons entitled thereto, without any
discrimination or preference; and
Third, Principal: to the payment to the persons entitled thereto of the unpaid
principal with respect to any Certificates which have become due, whether at
maturity or by call for prepayment, in the order of their due dates, with interest on
the overdue principal at a rate equal to the rate paid uTith respect to the Certificates,
and, if the amount available uJill not be sufficient to pay in full all of the amounts
due with respect to the Certificates on any date, together with such interest, then to
93862v2 25
the payment thereof ratably, according to the amounts of principal due on such
date to the persons entitled thereto, lvithout any discrimination or preference.
(b) If the principal with respect to all Certificates has become or been
declared due and payable, all such money will be applied (i} first to pay the
Trustee's fees and expenses, and then (ii) to the payment of principal and interest
then due with respect to the Certificates, without preference or priority of principal
or interest, or of any installment of interest over any other installment of interest,
or of any Certificate o~Ter any other Certificate, ratably according to the amounts
due respectively for principal and interest, to the persons entitled thereto without
any discrimination ar privilege.
(c) If the principal with respect to all Certificates has been declared due and
payable and if such declaration thereafter has been rescinded and aruzulled under
the provisions of Section 8.02, then, subject to the provisions of subsection (b}
above, if the principal with respect to all Certificates later becomes due and
payable or is declared due and payable, the money then remaining in and thereafter
accruing to the Payment Fund will be applied in accordance with the provisions of
subsection (a) above.
The Trustee may fix a payment date for any payment to the Owners under
this Section.
Section 8.12. Undertaking for Costs. In anSj suit for the enforcement of any
right or remedy under this Trust Agreement or in any suit against the Trustee for
anyT action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due regard
to the merits and good faith of the claims or defenses made by the party litigant.
Tlus Section does not apply to a suit by the Trustee or any authorized suit byj any
Owner or O~~jners.
ARTICLE IX
THE TRUSTEE
Section 9.01. Rights and Duties.
(a) If an Event of Default has occurred and is continuing, the Trustee
must exercise its rights and powers and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's o~vn affairs.
J3862v2 ~~
(b) Nat later than August 1 of each year, the Trustee will notify the LGC
of the principal amount of Certificates outstanding as of the preceding Tune 30.
(c} Except during the continuance of an E~rent of Default:
(i) the Trustee need perform only those duties that are specifically
set forth in this Trust Agreement and no other; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed, upon certificates or opinions furnislled to the Trustee
and conforming to the requirements of this Tnist Agreement which the
Trustee actually a11d in good faith believes to be genuine and to have been
signed or presented by the proper person. The Trustee, however, 111L1st
examine the certificates and opinions to determine whether they conform to
the requirements of this Trust Agreement.
(d) The Trustee may not be relieved from liability for its Dorn negligent
action, its own negligent failure to act or its own u.•illful misconduct, except that:
(i) this paragraph does not limit the effect of subsection (a} above;
(ii) the Trustee will not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 8.05; and
(iii} no provision of this Trust Agreement requires the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it has reasonable grounds for believing that repayment of
such fiends or adequate indemnity against such risk or liability is 11at
reasonably assured to it.
(e) Every provision of this Trust Agreement that in any way relates to the
Trustee is subject to all the provisions of this Sectian 9.01.
(f} The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss, liability or
expense, but the Trustee may not require indemnity as a condition to declaring the
principal and interest with respect to the Certificates to be due immediately under
Sectian 8.02. No permissive right of the Trustee shall be construed as a duty.
J3862v2 ~']
(g) The Trustee will not be liable for interest on any cash held by it except
as the Trustee may agree with the County.
(h) The Trustee ti~rill not be liable for any action it takes or omits to take in
good faith in reliance on advice from counsel as to legal matters.
(i) The Trustee may act through agents or co-trustees and will not be
responsible far the misconduct or negligence of any agent or co-trustee appointed
with due care.
(j) If an event occurs which with the giving of notice or lapse of time
would be an Event of Default, and if the event is continuing and if it is known to
the Trustee, the Trustee will so notify the Owners and the LGC uTithin 15 days
after such becomes known to the Trustee. Except in the case of a default in
payment on any Certificates, the Trustee may withhold such notice from Owners
(but not from the LGC) if and so long as it in good faith determines that
withholding the notice is in the interest of Owners.
(k) At any and all reasonable times, the Trustee and its agents will have
the right to inspect the Project Sites, the Financed Facilities and all books and
records of the Company or of the County related thereto. Notwithstanding anything
in this Tnist Agreement to the contrary, the Trustee and its agents will have the
right to require such additional evidence, certificates or Opinions of Counsel as the
Trustee may deem appropriate to establish the County's right to the withdrawal of
any funds held hereunder or to require the Trustee's taking of any other action
hereunder.
(1) The Trustee shall not be liable for any debts contracted or for
damages to persons or to property injured or damaged, or for salaries or
nonfulfillment of contracts, relating to the Financed Facilities.
(m) The Trustee shall have no duty to inspect or oversee the construction
or completion of the Financed Facilities.
(n) In any judicial proceeding to which the Company or the County is a
party and ~~rhich in the Trustee's opinion has a substantial bearing on the interests
of Owners, the Trustee may intervene on the Owners' behalf, and ~~Jill do so if
requested in ~Triting by the Owners of a majority in aggregate principal amount of
Certificates then Outstanding or the Insurer and the Trustee ti~rill have a lien
therefor on any and all funds any time held by it under this Tnist Agreement.
Section 9.02. Trustee's Individual Rights. The Trustee in its individual or
any other capacity may become the O~~Jner or pledgee of Certificates and may
J3362v2 28
otherwise deal with the Company or with the County or its affiliates with the same
rights it would have if it were not Trustee.
Section 9.03. Disclaimer. The Trustee makes na representation as to the
validity or adequacy of this Trust Agreement or the Certificates, and the Trustee
will not be accountable for the County's use of the proceeds from the Certificates.
Section 9.04. Eligibility. The Company will maintain a Trustee far this
Trust Agreement that is a corporation organized and doing business under the laws
of the United States or any state or the District of Columbia, is authorized under
such laws and the laws of the State to exercise corporate trust powers, is subject to
supervision or examination by the United States, any state or the District of
Columbia and has a combined capital and surplus of at least $100,000,000 as set
forth in its most recent published annual report of condition.
Section 9.05. Resignation; Removal; Replacement. The Trustee may
resign by notifying the County and the Insurer. The Majority owners, with the
Insurer's consent, may remove the Trustee by notifying the County and the
removed Trustee and may appoint a successor Trustee. The County, ujith the
Insurer's consent, may remove the Trustee by notifying the removed Trustee. The
Insurer may remove the Trustee at any time, by notifying the County and the
remo~Ted Trustee, for any breach of the trust established in tlus Agreement.
If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the County, will promptly appoint a successor Trustee
(except ujhen that right is exercised by the Majority OuTners as described in the
preceding paragraph). No corporation will be eligible for appointment as successor
Trustee unless such corporation {a) meets the requirements of Section 9.04 and {b)
either has previously been approved by the LGC for service as a corporate trustee
or obtains such appro~-~a1 from the LGC.
A successor Trustee ujill deliver a written acceptance of its appointment to
the retiring Tnistee and to the Count}~~. Immediately thereafter, the retiring Trustee
will transfer all property held by it as Trustee to the successor Trustee; the
resignation or removal of the retiring Trustee will then {but only then) become
effective, and the successor Trustee will have all the rights, powers and duties of
the Trustee under this Trust Agreement.
If the Trustee fails to comply with Section 9.04, the County or any Owner
may petition any court of competent j urisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
J3862v2 ~9
If a successor Trustee does not take office within GO days after the retiring
Trustee resigns or is removed, the retiring Trustee, the County, the Insurer or the
Majority Owners may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
Section 9.06. Successor Trustee by Merger. If the Trustee consolidates
~vitll, merges or con~jerts into, or transfers all or substantially all its assets (or, in
the case of a bank or trust company, its corporate trust assets) to another
corporation, the resulting, sur~Ti~Ting or transferee corporation ~~Tithout any further
act uTill be the successor Trustee.
Section 9.07. Acceptance of Financing Contract Terms. By its execution
of this Trust Agreement, the Trustee hereby signifies its acceptance of its
responsibilities under the Financing Contract, and agrees to be bound thereby.
ARTICLE X
AMENDMENTS OF AND SUPPLEMENTS TO TRUST AGREEMENT,
CERTIFICATES, FINANCING CONTRACT OR DEED OF TRUST
Section 10.01. Without Owners' Consent. (a) The Company and the
Trustee may amend or supplement this Trust Agreement or the Certificates without
notice to or consent of any Owner for the following purposes:
(i) to cure any ambiguit<<r, inconsistency or formal defect or omission;
(ii) to grant to the Trustee for the benefit of the Owners additional rights,
remedies, powers or authority;
{111} to subject to this Trust Agreement additional collateral or to add
other agreements of the Company or the County;
(iv) to modify this Trust Agreement or the Certificates to permit
qualification under the Trust Indenture Act of 1939 or any similar federal statute
at the time in effect, or to permit the qualification of the Certificates for sale
under the securities laws of the United States or of any state of the United
States;
(v) to provide for Certificates in certificated, registered form pursuant to
Section 2.01(b), or for the issuance of Additional Certificates;
(vi} to e~jidence the succession of a new Trustee; or
J3862v2 30
(Vll) to make any change that does not materially adversely affect the
rights of any Owner.
(b) The Company may enter into, and the Trustee may consent to, any
amendment of or supplement to the Financing Contract or the Deed of Trust,
without notice to or consent of any Owner, if the amendment or supplement is
required or permitted {i) by the provisions of the Financing Contract or this Trust
Agreement, (ii) to cure any ambiguity, inconsistency or formal defect or omission,
{111) m COnneCtloll with any authorized amendment of or supplement to this Trust
Agreement, or (iv} to make any change that does not materially adversely affect.
the rights of anyJ Ot~ner.
Section 10.02. With Owners' Consent. (a} If the preceding Section does
not permit an amendment of or supplement to this Trust Agreement or the
Certificates without any consent of Owners, the Company and the Trustee may
enter into such amendment or supplement only uJith the consent of the Majority
Owners and the Insurer.
(b) If the preceding Section does not permit an amendment of or
supplement to the Financing Contract or the Deed of Trust without any consent of
Owners, the Company may enter into, and the Trustee may consent to, such
amendment or supplement only v~Tit11 the consent of the Majority Owners and the
Insurer.
(c) Without the consent of each Owner affected, however, no amendment
or supplement to this Trust Agreement, the Certificates, the Financing Contract or
the Deed of Trust may (i} extend the maturity of the principal or interest ~Tith
respect to any Certificate, (ii) reduce the principal amount of, or rate of interest on,
any Certificate, (iii) effect a privilege or priority of any Certificate or Certificates
over any other Certificate or Certificates, {iv) reduce the percentage of the
principal amount of the Certificates required for consent to such amendment or
supplement, (v) impair the exclusion of interest on the Certificates from the federal
gross income of the Owner of any Certificate, (vi) eliminate ally mandatory
prepayment of the Certificates, extend the due date for any call for mandatory
prepayment, reduce the prepayment price or otheruTise change the prepayment
terms of such Certificates, (vii) create a lien ranking prior to or on a parity with the
lien of this Trust Agreement on the property pledged hereunder (except with
respect to a parity pledge for the benefit of the Owners of Additional Certificates),
or (viii) deprive any Owner of the lien created by this Trust Agreement on such
property.
In addition, if moneys or Federal Securities have been deposited or set aside
with the Trustee pursuant to Article VII for the payment of Certificates and those
93 362v2 31
Certificates have not in fact been actually been paid in full, no amendment to the
provisions of that Article may be made ujithout the consent of the Owner of each
Certificate affected.
Section 10.03. Procedure far Amendment with Owners' Written
Consent.
(a) If the consent of the 0~~,~ners is required pL~rsuant to Section 10.0? for
an amendment or supplement to this Trust Agreement, the Certificates or the
Financing Contract, the Trustee will establish a record date, and Owners as of such
date will be the Owners with the right to consent to such amendment or
supplement. Such record date v~Till be a date not later than five Business Days after
the date the Trustee receives direction from the Company to solicit such consents.
(b) The Trustee will send, by first class mail, a copy of such supplement
or amendment, together with a request to the Owners for their consent thereto, to
the Insurer and to each Owner at its address as set forth in the Certificate
registration books maintained pursuant to Section 2.04, but failure to receive
copies of such supplement or amendment and request so mailed ~jill not affect the
~Talidity of the supplement or amendment when assented to as provided in this
Section. The request mailed by the Trustee ujill also designate a date not more than
60 nor less than 30 days following the mailing date by which consent must be
returned to be effective.
(c) Such supplement or amendment tivill not become effective unless
there are filed with the Trustee the ~~~ritten consent of the Owners of not less than a
majority in aggregate principal amount of the Certificates then Outstanding
(exclusive of Certificates disqualified as provided in Section 10.04) and notices
have been mailed as hereinafter in this Section provided. Each such consent will be
effective o1~ly if accompaiued by proof of ownership of the Certificates for which
such consent is given, wThich proof ~~jill be such as is permitted by Section 10.10.
(d} If DTC is the registered owner of the Certificates, the Trustee will
take such actions as may be appropriate to solicit the consents provided for in this
Section from beneficial owners in accordance with DTC's rules and regulations, as
the same may be in effect from time to time.
Section 10.04. Disqualified Certificates. Certificates owned or held by or
for the account of the County or the Company or by any person directly or
indirectly controlling or controlled by, or under direct or indirect common control
with the County or the Company (except any Certificates held in any pension or
retirement fund) will not be deemed Outstanding for the purpose of any action or
J3862v2 ~~
any calculation of Outstanding Certificates provided for in this Trust Agreement,
and will not be entitled to take any action provided far in this Trust Agreement.
The Trustee may provide far each Owner, before his or her consent provided
for in this Article X will be deemed effective, to reveal if the Certificates as to
which such consent is given are disqualified.
Notwithstanding the foregoing provisions of this Section, it is the intent of
the Company, the County and the Trustee that the ownership or holding of
Certificates by the Company or the County will not, by itself, give rise to an
extinguishment of the Certificates or any obligation arising under this Trust
Agreement or the Financing Contract.
Section 10.05. Effect of Consents. After an amendment or supplement
becomes effective, it will bind every Owner. Any such consent will be binding
upon and irrevocable by the Owner of the Certificate giving such consent and on
any subsequent Owner {whether or not such subsequent Owner has notice thereof},
Lidless such consent is revoked in writing by the Owner giving such consent or a
subsequent Owner by filing such revocation with the Trustee prior to the date when
the notice provided for in Section 10.9 has been mailed.
Section 10.06. Notation on or Exchange of Certificates. If an amendment
or supplement changes the terms of a Certificate, the Trustee may require the
O~~ner of such Certificate to deliver it to the Trustee. The Trustee maSj place an
appropriate natation on the Certificate about the changed terms and return it to the
Owner. Alternatively, if the Trustee, the Companyr and the CoLiltyj so determine,
the Company, in exchange for the Certificate, will execute, and the Trustee uTill
authenticate and deliver, a new Certificate that reflects the changed terms.
Section 10.07. Trustee's Execution of Amendments and Supplements.
The Trustee will execute and deli~Ter anyr amendment or supplement to the Trust
Agreement or the Certificates authorized by this Article if the amendment or
supplement does not adversely affect the rights, duties, liabilities or immunities of
the Trustee. If the amendment or supplement has such an adverse effect, the
Trustee may, but need not, execute and deliver the same. In executing and
delivering an amendment or supplement, the Trustee will be entitled to recei~Te and
(subject to Section 9.01) will be fully protected 111 relying on an Opinion of
Counsel stating that such amendment or supplement is authorized by this Trust
Agreement.
Section 10.08. County's Consent Required. Na amendment or supplement
to this Trust Agreement, the Certificates, the Financing Contract or the Deed of
J3862v2 33
Trust will become effective unless the County delivers to the Trustee its prior
lvritten consent to the amendment or supplement.
Section 10.09. Insurer's Consent Required. No amendment or
supplement to this Agreement, the Certificates, the Contract or the Deed of Trust
(a) for which consent of the Owners is required, or (b) which affects an}J provision
expressly recognizing or granting rights in or to the Policy, shall become effective
unless the Insurer delivers to the Trustee its prior written consent to the amendment
or supplement.
Section 10.10. Notice to Owners and Insurer. The Trustee shall cause
notice of the execution of each supplement or amendment to this Agreement, the
Certificates or the Contract to be mailed to the Owners and to the Insurer. The
notice will, at the Trustee's option, either (a) briefly state the nature of the
amendment or supplement and that copies of it are on file urith the Trustee for
inspection by OuJners, or (b) enclose a copy of such amendment or supplement.
Section 10.11. Owners' Consents. Any consent or other instrument
required by this Trust Agreement to be signed by Owners may be in any number of
concurrent documents and may be signed by an Owner or by the Owner's agent
appointed in writing. Proof of the execution of such instrument or of the instrument
appointing an agent and of the ownership of Certificates, if made in the following
manner, will be conclusive for any purposes of this Trust Agreement ujith regard to
any action taken by the Trustee.
(a) The fact and date of a person's signing an instrument may be proved
by the certificate of any officer in any jurisdiction uTho by lour has power to take
acknowledgments within that jurisdiction that the person signng the writing
acknowledged before the officer the execution of the writing, or by an affidavit of
any witness to the signing.
(b} The fact of ownership of Certificates, the amount or amounts,
numbers and other identification of such Certificates and the date of holding will
be proved by the registration books kept pursuant to this Trust Agreement.
ARTICLE XI
INSURANCE ON CERTIFICATES
[To come.]
ARTICLE XII
93362v2 34
MISCELLANEOUS
Section 12.01. Notices.
(a) Any communication prop-Tided for in this Trust Agreement or the
Certificates must be in writing.
(b) Any communication under this Contract will be sufficiently given and
deemed given when deli~Tered by hand or on the date shown as the date of delivery
on a United States Postal Service return receipt, if addressed as follows:
(i) if to the County, to Orange County Manager, Attention: Notice under
2006A COPS Financing Trust Agreement, Post Office Box 8181, Hillsborough,
North Carolina 27278;
(11) if to the Company, to Orange County Public Facilities Company,
Attention: Notice under Trust Agreement for Orange County 2006A COPS
Financing, ;and
(iii} if to the Trustee, to The Bank of New York, Attention:
Corporate Trust Department, Regarding: Notice under 2006A Trust Agreement for
Orange County {North Carolina), 10161 Centurion Parkway, Jacksonville, FL
32256.
(iv} if to the InsL~rer, to . ;
(c) Any communication sent under this Agreement must also be sent to the
County, the Trustee and the Insurer, along with any other parties to which the
communication may be addressed.
(d) Alzy addressee may designate additional or different addresses for
communications by notice gi~~ren under this Section to each of the others.
Section 12.02. Limitation of Rights. Nothing expressed or implied in this
Trust Agreement or the Certificates gives any person other than the Trustee, the
Company, the Coulzty and the O`~~ners any right, remedy or claim ulzder or with
respect to this Trust Agreement.
Section 12.03. Severability. If any provision of this Trust Agreement is
determined to be unenforceable, that will not affect any other provision of this
Trust Agreement.
J3862v2 35
Section 12.04. Non-Business Days. If a Certificate Payment Date is not a
Business Day, then payment will be made on the next Business Day, and no
interest will accrue for the intervening period. When any other action is provided
in this Trust Agreement to be done on a day or within a time period named, and the
day or the last day of the period is not a Business Day, the action may be done on
the next ensuing Business Day.
Section 12.05. Governing La~v. The parties intend that North Carolina law
will govern tlus Trust Agreement. To the extent permitted by law, the parties agree
that any action brought with respect to this Tnist Agreement will be brought in the
North Carolina General Court of Justice in Orange County, North Carolina.
Section 12.06. Limitation on Liability of Officers and Agents. No officer,
agent or employee of the Company, the County or the LGC will be subject to any
personal liability or accountability by reason of lus execution of this Trust
Agreement., the Certificates or any other documents related to the transactions
contemplated hereby. Such officers or agents will be deemed to execute such
documents in their official capacities only, and not in their individual capacities.
This Section will not relieve an officer, agent or emplo~ree of the County or the
Company from the performance of any official duty pro~jided by lauT or tlus Trust
Agreement..
Section 12.07. Records. The Trustee will keep complete and accurate
records of all moneys received and disbursed by it under this Trust Agreement,
which will be available for inspection by the County, the Company and any
Owner, or any of their agents at any time during regular business hours upon
reasonable prior notice.
Section 12.08. Binding Effect. This Trust Agreement will be binding upon
and inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
Section 12.09. Waiver of Notice. Whenever in this Trust Agreement the
giving of notice is required, the giving of such notice may be waived in writing by
the person entitled to receive such notice and in any case the giving or receipt of
such notice ti~jill not be a condition precedent to the validity of any action taken in
reliance upon such uJaiver.
Section 12.10. References to Insurer. All references to the Insurer herein
shall be disregarded and deemed to have been deleted if the Insurer is then in
default with respect to its obligations under the Policy, is insolvent or is in
bankruptcy, or if the Policy has been declared in~jalid by any court of competent
jurisdiction.
93362v2 36
Section 12.11. Counterparts. This Trust Agreement may be signed in
several counterparts, including separate counterparts. Each ~~jill be an original, but
all of them together constitute the same instrument.
Section 12.12. Definitions; Rules of Construction. Unless the context
clearly requires otherwise, capitalized terms used in this Trust Agreement and not
othenuise defined ha~Te the meanings set forth in Exhibit A, and this Trust
Agreement will be interpreted in accordance with the rules of construction set forth
in Exhibit A.
jThe refnaindet~ of this page has been left binnk intentionully.J
J3862v2 37
IN WITNESS WHEREUF, the parties hereto have caused this Trust
Agreement to be executed in their corporate names by their duly authorized
officers, all as of the date first above u~itten.
ATTEST: (SEAL) ORANGE COUNTY
PUBLIC FACILITIES COMPANY
[Name]
Secretanr
[Name]
President
[TRUSTEE],
as Tnistee
By:
Printed name:
Authorized Officer
[Trust Agreement dated as of April 1, ?0~6]
J3862v2 3g
Exhibit A -- Definitions; Rules of Canstructian
Definitions. All capitalized terms used in this Trust Agreement and not
otherwise defined will have the meanings ascribed thereto in the Financing
Contract. In addition, for all purposes of this Trust Agreement, unless the context.
requires otherwise, the following terms will have the following meanings.
"2006A Certificates" means the [$24,000,000] Certificates of Participation
(Orange County Public Improvement Projects), Series 2006A, issued pursuant to
this Trust Agreement.
"Additional Certificates" means any Certificates delivered pursuant to
Section 1.05.
"Appropriate Consultant" has the meaning assigned in the Financing
Contract.
"Business Day" means any day (a) other than a day on which banks in New
York, Ne~v York, or the city of the Trustee's principal corporate trust office are
required or authorized to close and {b} on wluch the New Yark Stock Exchange is
not closed.
"Certificate Payment Date" means, with respect to the 2006A Certificates,
each April 1 and October 1 beginning October 1, 2006, and uTith respect to any
Additional Certificates means the dates specified for principal and interest
payments ~~Tith respect to such Additional Certificates.
"Certificates" means, together, the 2006A Certificates and all Additional
Certificates.
"Cade" means the Internal Revenue Code of 1986, as amended, including
regulations, rulings and revenue procedures promulgated thereunder or under the
Internal Revenue Code of 1954, as amended, as applicable to the Certificates.
Reference to any specific Code provision will be deemed to include any successor
provisions.
"Company Representative" means the Company's President or any other
person at the time designated to act on the Company's behalf in matters related to
this Trust Agreement (or for any specific matters) by a written instrument
furnished to the Trustee containing the specimen signature of such person and
signed on the Company's behalf by any of its officers (other than the person being
designated as a Company Representative).
J3862v2 39
"County" means Orange County, North Carolina, or its successors.
"Deed of Trust" means the Deed of Trust and Security Agreement dated as
of April 1, 2000, from the County to a deed of trust trustee for the Company's
benefit, as it may be duly amended or supplemented.
"DTC" means The Depository Trust Company, New York, New York, or its
successors as the securities depository maintaining abook-entry system for
recording beneficial otivnership interests in the Certificates
"Event of Default" has the meaning set forth in Section 8.01.
"Federal Securities" means, to the extent such are legal investments for the
County's funds at the time of purchase, (a} direct obligations of the Uiuted States of
America far which its full faith and credit are pledged, or (b) Securltles or
obligations evidencing direct o~~~ership interests in specified portions (principal or
interest) of obligations described in {a).
"Financing Contract" means the Installment Financing Contract dated as of
April 1, 2006, between the County and the Company, as it may be duly amended
or supplemented.
"Independent Counsel" has the meaning assigned in the Financing Contract.
"Insurer" means , or any successor.
"Interest Account" means the account of that name in the Payment Fund
established in Section 4.04.
"LGC" means the North Carolina Local Government Commission, or any
successor to its functions.
"Majority Owners" means, as of any date, the Owners of at least a majority
in principal amount of the Certificates then Outstanding.
"Net Proceeds" has the meaning assigned in the Financing Contract.
"Net Proceeds Fund" means the fund by that name established in Section
3.04
"Opinion of Counsel" or "Opinion of Special Counsel" means a u~~ritten
opinion of Independent Counsel or Special Counsel, as appropriate.
J3862v2 40
"Outstanding," when used with reference to Certificates, or "Certificates
Outstanding," means all Certificates which have been authenticated and delivered
by the Trustee under this Trust Agreement and not yet paid, except the following:
(a} CertlflcateS canceled or purchased by or delivered to the Trustee for
cancellation;
(b) Certificates that have become due {at maturity or on prepayment,
acceleration or otherwise} and for the payment, including interest accnied to the
due date, of which the Trustee holds sufficient moneys;
(c) Certificates deemed paid in accordance with Section 7.01; and
(d) Certificates in lieu of which others have been authenticated under
Section 2.04 {relating to registration and exchange of Certificates} or Section 2.05
(relating to mutilated, lost, stolen, destroyed or undelivered Certificates);
provided, however, that no Certificate will be deemed to be not Outstanding by any
reason of any payment uTith respect thereto by the Insurer.
"Owner," uThen used with reference to Certificates, means the person in
whose name such Certificate is registered on the registration books maintained by
the Tnistee.
"Payment Fund" means the fund by that name established in Section 4.04.
"Permitted Investments" means such investments as from time to time are
legal investments for the County's funds, as determined at the time of investment.
"Policy" means the financial guarant~J insurance policy issued by Insurer
insuring the payment when due of the principal of and interest ti~jith respect to the
2006A Certificates as provided therein.
"Prepayment Account" means the account of that name in the Payment Fund
established in Section 4.04.
"Principal Account" means the account of that name in the Payment Fund
established in Section 4.04.
"Project Fund" means the fund by that name established in Section 4.01.
"Record Date" means the close of business on the 15th day of the month
(ti~Jhether or not a Business Day} preceding a Certificate Payment Date.
93 362v2 41
"Restricted Yield" means a "yield," ujithin the meaning of Treas. Regs. Secs.
1.103-13(c}, -13(d), 1.148-9T(a), or any successor or other provision that may be
applicable, not in excess of a "yield" equal to %.
"Special Counsel" means such attorney or firm of attorneys nationally
recognized on the subject of mu~ucipal obligations as may be selected by the
County and approved by the Trustee {which approval will not be unreasonably
withheld).
"State" means the State of North Carolina.
"Term Certificates" means any Certificates (including the 2006A
Certificates maturing April 1, 2026) that are subject to mandatory redemption
pursuant to sinking field requirements.
"Trust Agreement" means this Trust Agreement, as it may be duly amended
or supplemented.
"Trustee" means the bank or trust company from time to time serving as
trustee under this Trust Agreement, uThether the original or a successor Trustee.
Rules of Construction. Unless the context otherwise requires,
(a) an accounting term not otherwise defined leas the meaning assigned to
it in accordance with generally accepted accounting principles;
(b) unless otherwise indicated, references to Articles, Sections and
Exhibits are to the Articles, Sections and Exhibits of this Trust Agreement;
(c) words importing the singular uJill include the plural and vice versa
and words importing the masculine gender will include the feminine and neuter
genders as urell.
(d) the headings and Table of Contents are solely for convenience of
reference and will not constitute a part of this Trust Agreement nor will they affect
its meanings, constn~ction or effect;
(e) words importing the prepayment or calling for prepayment of
Certificates will not be deemed to refer to or connote the payment of Certificates at
their stated maturity; and
J3862v2 42
{f) all references to the payment of Certificates are references to payment
of principal of and premium, if any, and interest uTith respect to the Certificates.
J3862v2 43
Exhibit B -Form of Certificate
REGISTERED
[Insurance Legend, if applicable]
Number R-X REGISTERED
CERTIFICATE OF PARTICIPATION
(Orange County Fublic Improvement Frojects), Series 2006A
in certain payments to be made
under an installment financing contract «~ith
ORANGE COUNTY, NORTH CAROLINA
INTEREST
RATE MATURITY
DATE DATED DATE CUSIP
April 1, [closing date]
REGISTERED OWNER: '~ ~"~'~'~ CEDE ~ CO. ~'~ ~"~'~
PRINCIPAL AMOUNT: ~ ~` ~` ~ THOUSAND DOLLARS ~ ~ ~`
~~~~~~ ,000)~~~
THIS CERTIFIES that the registered owner hereof, or registered assigns or
legal representative, is the owner of a proportionate and undivided interest in
certain payments to be made by Orange County, North Carolina (the "County"},
arising under an Installment Financing Contract dated as of April 1, 2006 (the
"Financing Contract"}, between the County and Orange County Public Facilities
Company (the "Company").
Principal is payable to such o~~•ner in the amount stated above on the
matL~rity date stated above, subject to prepayment as described belov~T, and interest
is payable on each April 1 and October 1, beginning October 1, 2006 (the
"Certificate Payment Dates"), at the ar~lual rate stated above (calculated on the
basis of a 360-day year consisting of twelve 30-day months).
Interest is payable {a} from the Dated Date shown above, if this Certificate is
authenticated prior to the Record Date, as defined below, preceding October 1,
2006, {b) from the succeeding Certificate Payment Date, if this Certificate is
J3862v2 44
authenticated between a Record Date and the succeeding Certificate Payment Date,
or (c} otherwise from the Certificate Payment Date that is, or immediately
precedes, the date on uThich this Certificate is authenticated (unless payment of
interest hereon is in default, in which case this Certificate will bear interest from
the date to which interest has been paid}. Principal and interest are payable in
lawful money of the United States of America.
This Certificate is one of an issue of the [$24,000,000] Certificates of
Participation (Orange County Public Improvement Projects), Series 2006A (the
"Certificates"}, of like date and tenor, except as to number, denomination, rate of
interest, privilege of prepayment and maturity. The Certificates are executed and
delivered under, and are equally and ratably secured by, a Trust Agreement dated
as of April 1, 2006 (the "Trust Agreement"), betu~•een the Company and The Bank
of Ne~~T York, as trustee (the "Trustee").
The Company is advancing funds under the Financing Contract to provide
funds to the County, together with other available funds, to pay the cost of
acquiring, constructing and improving certain school facilities, to provide for
certain other public improvements and to pay certain financing costs, as more fully
described in the Trust Agreement and the Financing Contract. The County ~vill
repay the amounts advanced by making Installment Payments, as defined in and
pursuant to the Financing Contract, ~vluch are designed to be sufficient in times
and amounts to provide for timely payment of the Certificates. To further secure
its obligations under the Financing Contract, the County has granted, for the
Company's benefit, a security interest in certain of the financed facilities, the
underlying real property and certain other property (the "Trust Property") pursuant
to the Financing Contract and a Deed of Trust and Security Agreement dated as of
April 1, 2006 (the "Deed of Trust"). The Company has assigned substantially all
of its rights under the Financing Contract and as beneficiary under the Deed of
Trust, including its right to receive Installment Payments, to the Trustee, without
recourse against the Compan}r, far the benefit of the o~~jners of the Certificates.
The Certificates are payable solely from amounts paid by the County
pursuant to the Financing Contract, except to the extent payable from the proceeds
of the Certificates, income from investments and certain net insurance and
condemnation ati~rards, which revenues and other moneyrs have been pledged as
described in the Trust Agreement and the Financing Contract to secure payment of
the Certificates. Neither the Certificates nor the County's obligation to make
payments under the Financing Contract constitutes a pledge of the County's
faith and credit within the meaning of any constitutional provision.
J3862v2 4~
Additional Certificates secured by a parity lien on the Trust Property, and
payable from the same sources of funds as the initial Certificates, may be issued
from time to time under the terms and conditions set forth in the Trust Agreement.
Reference is made to the Trust Agreement and all amendments and
supplements thereto for a description of the provisions, among others, with respect
to the nature and extent of the security, the rights, duties and obligations of the
Company and the Trustee, the rights of the Owners of the Certificates and the
terms upon which the Certificates are executed, delivered and secured, to all of
which provisions the owner of this Certificate, by the acceptance hereof, agrees.
Additional Certificates secL~red by an interest in the Trust Property on a parity with
the interest securing the Certificates may be issued under the terms and conditions
set forth in the Trust Agreement.
The Certificates are issued by means of a book-entry system, ujith one
certificate for each maturity immobilized at The Depository Trust Company, New
fork, New fork ("DTC "), and not available for distribution to the public. Transfer
of beneficial ownership interests in the Certificates in the principal amount of
$5,000 or any integral multiple thereof will be effected on the records of DTC and
its participants pursuant to rules and procedures established by DTC and its
participants. Principal and interest on the Certificates are payable to DTC or its
nominee as registered owner of the Certificates. Neither the Trustee, the Company
nor the County is responsible or liable for such transfer of ownership or payments
or for maintaining, supervising or revieuling the records maintained by DTC, its
participants or persons acting through such participants.
If (a} DTC determines not to continue to act as securities depository for the
Certificates or (b) a County Representative so elects, the Company and the Trustee
will discontinue the book-entry system ti~rith DTC. If the County fails to identify
another qualified securities depository to replace DTC, the Company) will prepare
and execute, and the Trustee will authenticate and deliver 111 exchange,
replacement Certificates in the form of fully-registered certificates.
The Certificates may not be prepaid prior to maturity except as provided in
this Certificate and in the Trust Agreement.
Certificates maturing on or after April 1, 2017, are subject to prepayment at
the County's option on or after April 1, 2016, in Thole at any time or in part on any
Certificate Payment Date, upon payment of the principal amount to be prepaid plus
interest accrued to the prepayment dates, without premium.
The Certificates are subject to prepayment in whole or in part on any
Certificate Payment Date from Net Proceeds, as defined in the Contract, credited
93 362v2 46
towards the prepayment of Installment Payments under the Contract as a result of
certain casualty and other losses to the Financed Facilities, as described in the
Contract, at a prepayment price equal to the principal amount to be prepaid plus
interest accrued to the prepayment date, without premium.
The Trustee will prepay Certificates maturing on April 1, 2026, on April 1 in
years and amounts upon payment of 100% of the principal amount thereof plus
interest accrued to the prepayment date as follows:
Year Amount
2024
2025
2026
The amount of Certificates to be prepaid on any sinking fund payment date
may be reduced in accordance ~~ith the provisions of the Trust Agreement.
If less than all of the Certificates are to be prepaid, they will be prepaid in
such manner as the County may elect. If less than all the Certificates of any
maturity are called for prepayment, the Trustee will select the Certificates to be
prepaid by lot; provided, hou~•ever, that so long as a book-entry system ~.•ith DTC is
used for recording beneficial ownerslup of Certificates, if less than all of the
Certificates within a maturity are to be prepaid, DTC and its participants will
determine which of the Certificates within any such maturity are to be prepaid.
In any case, (1) the portion of any Certificate to be prepaid will be in the
principal amount of $5,000 or some multiple thereof, and (2) u1 selecting
Certificates for prepayment, each Certificate will be considered as representing that
number of Certificates which is obtained by dividing the principal amount of such
Certificate by $5,000. If a portion of a Certificate u~•ill be called far prepayment, a
new Certificate in principal amount equal to the unpaid portion thereof will be
issued to the Owner upon the surrender thereof.
The Trustee will send notice of prepayment by registered or certified mail to
DTC or its nominee as the Owner of the Certificates. The Trustee will mail such
notice not more than 60 days nor less than 30 days prior to the date fixed far
prepayment. Neither the Trustee, the Company nar the County is responsible for
sending notices of prepayment to anyone other than DTC or its nominee.
If on or before the date fixed for prepayment funds will be deposited with
the Trustee to pay the principal, premium, if any, and interest accrued to the
prepayment date with respect to the Certificates called for prepayment, the
Certificates or portions thereof thus called for prepayment ~~-ill cease to accrue
93 362v2 47
interest from and after the prepayment date, will no longer be entitled to the
benefits provided by the Trust Agreement and uTill not be deemed to be
Outstanding under the Trust Agreement.
The Owner of this Certificate has no right to enforce the provisions of the
Trust Agreement or to institute action to enforce the covenants therein.; or to take
any action with respect to any event of default thereunder, or to institute, appear in
or defend any suit or other proceeding with respect thereto, except as provided in
the Trust Agreement. Changes to ar supplements of the Trust Agreement may be
made to the extent and in the circumstances permitted by the Trust Agreement.
The Certificates are issuable only as fully-registered Certificates without
coupons in denominations of $S,Q~O principal amount and any integral multiple
thereof. Ownerslup of tlus Certificate will be registered on the Certificate Register
(as defined in the Trust Agreement) to be kept far that purpose by the Trustee,
which u~•ill act as certificate registrar for the Certificates. This Certificate may be
exchanged, and its transfer may be effected, only by the Owner hereof in person or
by attorney duly authorized in writing at the aforesaid office of the Trustee, but
only in the manner, subject to the limitations and upon pa}jment of the charges
pro~Tided in the Trust Agreement, and upon surrender and cancellation of this
Certificate. Upon exchange or registration of such transfer a new registered
Certificate or Certificates of the same maturity and interest rate and of authorized
r
denomination or denominations for the same aggregate principal amount urill be
issued in exchange therefor.
The Company and the Trustee may deem and treat the person ui whose name
this Certificate u~•ill be registered on the Certificate Register as the absolute owner
hereof for the purpose of receivving payment of or on account of principal hereof
and interest due hereon and for all other pLUposes and neither the Company nor the
Trustee uTill be affected by any notice to the contrary, except that interest pad-~ments
will be made to the persons sho~'n as Ourners on the Trustee's registration books
on the 15th day (whether ar not a business day} {the "Record Date") preceding
each Certificate Payment Date.
All acts, conditions and things required by the Constitution and laws of the
State of North Carolina to happen, exist or be performed precedent to and in the
execution and delivery of this Certificate have happened, exist and ha~Je been
performed.
This Certificate will not be entitled to any benefit under the Trust Agreement
or be valid or obligatory for any purpose until the Trustee uTill have executed the
Certificate of Authentication appearing hereon.
J3862v2 4g
IN WITNESS WHEREOF, the Company has caused this Certificate to
signed by the facsimile signature of its President, to be countersigned by the
facsimile signature of its Secretary, a facsimile of its seal to be printed hereon and
this Certificate to be dated April 1, 2006.
COUNTERSIGNED : (SEAL)
Sample only - do not sign] Sample only - do not sigrrJ
Secretary President
Orange County Orange County
Public Facilities Company Public Facilities Company
CERTIFICATE OF AUTHENTICATION
This Certificate is one of the Certificates referred to in the within-mentioned
Trust Agreement.
Date of Authentication:
THE BANK OF NEW YORK,
as Trustee
By:
Authorized Officer
J3862v2 49
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please print or type transferee's name and address, including zip code)
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING hIZ_JIv~3ER OF TRANSFEREE:
the u~•ithin certificate and all rights thereunder, hereby irrevocably constituting and
appointing ,Attorney, to transfer said certificate
on the books kept for the registration thereof, ujith full power of substitution in the
premises.
Dated:
Signature Guaranteed:
(Signature of Owner}
NOTICE: Signatures} must be
guaranteed by a participant in the
Securities Transfer Agent Medallion
Program ("STAMP"} or similar
program
NOTICE: The signature above must
correspond with the name the Owner as
it appears on the front of this certificate
in every particular ~~Tithout alteration or
enlargement or any change
whatsoever.
J3862v2 $Q
Exhibit C -Form of Requisition
(To Be Prep~rred on County's Letterhead for SubfsaissionJ
[Date]
The Bank of New York, as Trustee
Attention: Corporate Trust Department
Regarding: Requisition under 2006
Trust Agreement for Orange County (North Carolina}
10161 Centurion Park~~jav
Jacksonirille, FL 32256
RE: Request by Orange County, North Carolina (the "County"), for disbursement
of funds from a Project Fund created under a Trust Agreement dated as of
April 1, 2006, between Orange County Public Facilities Company and The
Sank of New York, as trustee.
To the Trustee:
Pursuant to the terms and conditions of the above-referenced Trust
Agreement, the County authorizes and requests the disbursement of funds from the
Project Fund established under such Trust Agreement for the Project Costs
described below. Capitalized terms used in this requisition and not otherwise
defined have the meanings ascribed in the Trust Agreement.
This is requisition number from the Project Fund.
Amount
Payee
Payee's
address
Amount requested
Orange County makes this requisition pursuant to the following
representations:
J3862v2 51
1. The County has appropriated in its current fiscal year funds sufficient to pay
the Installment Payments and estimated Additional Payments due in the
current fiscal year.
2. The purpose of this disbursement is for partial payment on the project.
contemplated under the Trust Agreement.
3. The requested disbursement has not been subject to any previous requisition.
4. No notice of any lien, right to lien or attachment upon, or claim affecting the
right to receive payment of, any of the moneys payable herein to any of the
persons, firms or corporations named herein has been received, or if any
notice of any such lien, attachment or claim has been received, such lien,
attachment or claim has been released or discharged or will be released or
discharged upon payment of this requisition.
5. This requisition contains no items representing payment on account of any
percentage entitled to be retained on the date of this requisition.
6. No Event of Default is continuing, and no event or condition is existing
which, with notice or lapse of time or both, ~~•ould become an Event of
Default.
7. The County has insurance in place that complies with the insurance
requirements of the Financing Contract.
Attached is evidence that the amounts shown in this requisition are properly
payable at this time, such as bills, receipts, invoices, architects' payment
certifications or other appropriate documents.
ORANGE COUNTY,
NORTH CAROLINA
By: (E_xhibit Fo~r~x Onh~ - Do Not Si~nJ
Title:
J3862v2 52