HomeMy WebLinkAboutAgenda - 11-16-1993 - VIII-A (2) 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
Action Agenda
Item No i
ACTION AGENDA ITEM ABSTRACT
Meeting Date: November 16, 1993
SUBJECT: Swimming Pool Financing
DEPARTMENT County Manager PUBLIC HEARING YES NO X
ATTACHMENT(S) INFORMATION CONTACT
Resolution Rod Visser, ext 2300
Facilities/Services Agreement TELEPHONE NUMBER
Operating Memorandum Hillsborough 732-8181
Indenture of Trust Chapel Hill 968-4501
Deed of Trust Mebane 227-2031
Durham 688-7331
PURPOSE: To consider a resolution approving a Facilities/Services
Agreement, and related documents, between Orange County and the Orange
County Community Activity Corporation.
BACKGROUND: At the October 4, 1993 meeting, the Board of Commissioners
approved the County' s participation in a "63-20" financing arrangement
whereby the Orange County Community Activity Corporation (previously
known as the Triangle Youth Hockey Association) will issue bonds for
the construction of a swimming pool/ice rink facility to be located
at the Meadowlands. The facility will be owned and operated by the
Corporation. Under terms of the draft agreement approved by the Board,
the County will make an annual appropriation of $400,000 for ten years
to the Corporation. When all debt on the facility has been paid off by
the Corporation, within 15 years, title to the facility will pass to
Orange County.
If adopted by the Board of Commissioners, the attached resolution will
authorize the County Manager and/or his designees to carry out all
actions necessary to implement the facilities/services agreement and
related documents. The attached agreement, which will take effect on
December 1, 1993, is in substantially the form that was reviewed and
approved by the Board on October 4. Minor corrections and
clarifications have been made as a result of review by staff and
attorneys for all parties.
RECOMMENDATION: The Manager recommends that the Board approve the
resolution.
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RESOLUTION OF
THE COUNTY OF ORANGE, NORTH CAROLINA
APPROVING A FACILITIES/SERVICES AGREEMENT
AND RELATED MATTERS
WHEREAS, the County of Orange, North Carolina (the "County") is a validly existing political
subdivision of the State of North Carolina, existing as such under and by virtue of the Constitution,
statutes and laws of the State of North Carolina (the "State");
WHEREAS, the County has the power, pursuant to North Carolina General Statutes, to(i)provide
community activity facilities used, or to be used, for public purposes and (ii) enter into contracts with
respect to the provision of such facilities;
WHEREAS, pursuant to a certain Indenture of Trust dated as of December 1, 1993 (the
"Indenture"), between Orange County Community Activity Corporation (the "Corporation") and First
Union National Bank of North Carolina, as trustee (the "Trustee"), the Corporation will issue its
Community Activity Center Revenue Bonds, Series 1993A and Series 1993B(collectively, the "Bonds")
and apply the proceeds thereof to the acquisition, construction and equipping of a public ice hockey rink
and swimming pool to be located in the County (the "Project");
WHEREAS, the County has determined that it is in the best interest of the County that, instead of
building and operating its own swimming pool, the County contract with the Corporation pursuant to a
Facilities/Services Agreement dated as of December 1, 1993(the "Agreement")between the County and
the Corporation to provide a public swimming pool and management services through the operation of
the Project for the benefit of County residents and other persons visiting the County;
WHEREAS, the obligation of the County to make payments under the Agreement shall constitute
a valid, binding and legally enforceable contractual obligation of the County to the payment of which the
County is obligated to appropriate funds in each year thereof, and payable from the County's funds
and from the earnings and all income received by the County from whatever source derived unless the
use of such funds are restricted other than by action of the Board of Commissioners of the County or the
use thereof is otherwise restricted by law, and enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization,moratorium or other
laws relating to or affecting generally the enforcement of creditors' rights heretofore or hereafter enacted
or by equitable principles;
WHEREAS, there have been presented to the Board of Commissioners of the County(the "Board")
the following documents(collectively, the "Instruments"), copies of which are attached hereto, which the
County proposes to approve, enter into and deliver to effectuate the proposed purchase financing:
(1) the form of the Agreement; and
(2) the form of the Indenture; and
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WHEREAS, it appears that each of the Instruments is in appropriate form and is an appropriate
instrument for the purposes intended;
WHEREAS, the net sums to fall due under the Agreement will not exceed $400,000 in each year
for 10 years and can be included in the County's budget;
WHEREAS, it is reasonable to conclude that the payments under the Agreement are not excessive
for the stated purpose and no increase in the property tax rate will be required to raise funds to fall due
under the contract in each fiscal year during the term of the Agreement;
WHEREAS, the County Attorney is of the opinion that this transaction is authorized by law and
is a purpose for which public funds may be expended pursuant to the Constitution and laws of the State;
WHEREAS, the County's budget process and Annual Budget Ordinance are in compliance with
the Local Government Budget and Fiscal Control Act, and external auditors have determined that the
County has conformed with generally accepted accounting principles in preparing its Annual Budget
Ordinance;
WHEREAS, past audit reports of the County indicate that its debt management and contract
obligation payment policies have been carried out in strict compliance with the law, and the County has
not been censured by the North Carolina Local Government Commission(the "LGC"), external auditors,
or any other regulatory agencies in connection with such management;
WHEREAS, the County is not in default in meeting any of its debt service or contract obligations;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE
COUNTY OF ORANGE, NORTH CAROLINA, AS FOLLOWS;
Section 1. That all actions of the County in effectuating the Project are hereby approved,
ratified and authorized pursuant to and in accordance with the transactions contemplated by the
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Instruments.
Section 2. That the form and content of the Agreement are in all respects authorized, approved
and confirmed, and the County Manager or his designee and the County Clerk are authorized,empowered
and directed to execute and deliver the Agreement for and on behalf of the County, including necessary
counterparts, in substantially the form attached hereto, but with such changes, modifications, additions
or deletions therein as shall to them and the County Attorney seem necessary, desirable or appropriate,
their execution thereof to constitute conclusive evidence of their approval of any and all such changes,
modifications, additions or deletions, and that from and after the execution and delivery of the
Agreement, the County Manager and the County Clerk or their respective designees are hereby
authorized, empowered and directed to do all such acts and things and to execute all such documents as
may be necessary to carry out and comply with the provisions of the Agreement as executed.
Section 3. That the County acknowledges that its payments under the Agreement constitute a
valid, binding and legally enforceable contractual obligation of the County to the payment of which the
County is obligated to appropriate funds in each year thereof, and payable from the County's funds I'
and from the earnings and all income received by the County from whatever source derived unless the
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use of such funds are restricted other than by action of the Board of Commissioners of the County or the
use thereof is otherwise restricted by law, and enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting generally the enforcement of creditors'rights heretofore or hereafter enacted
or by equitable principles.
Section 4. That the County approves the issuance of the Bonds by the Corporation and agrees
to accept title to the Project, including the land on which it is located as described in the Deed of Trust
from the Corporation to the Deed of Trust trustee named therein, on the payment in full of the principal
of and interest on the Bonds and the discharge of the lien of the Indenture.
Section 5. That the County Manager is hereby designated as the County's representative to act
on behalf of the County in connection with the transactions contemplated by the Instruments, and the
County Manager is authorized and directed to proceed in accordance with the Instruments, and to seek
opinions on matters of law from the County Attorney,which the County Attorney is authorized to furnish
on behalf of the County, and opinions of law from such other attorneys for all documents contemplated
hereby as required by law. The County Manager is hereby authorized to designate one or more
employees of the County to take all actions which the County Manager is authorized to perform under
this Resolution, and the County Manager or his designees are in all respects authorized on behalf of the
County to supply all information pertaining to the County for use in the transactions contemplated by the
Instruments. The County Clerk and the County Manager are authorized to execute and deliver for and
on behalf of the County any and all additional certificates, documents, opinions or other papers and
perform all other acts as may be required by the Instruments or as they may deem necessary or
appropriate in order to implement and carry out the intent and purposes of this Resolution.
Section 6. That if any section,phrase or provision of this Resolution is for any reason declared
to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases or
provisions of this Resolution.
Section 7. That all motions, orders, resolutions, ordinances and parts thereof, in conflict
herewith are hereby repealed.
Section 8. That this Resolution shall become effective on the date of its adoption.
YEAS
NAYES
READ, APPROVED AND ADOPTED this 16th day of November, 1993.
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CERTIFICATE
I, Beverly Blythe, County Clerk of the County of Orange, North Carolina, do hereby certify that
the foregoing is a true and accurate copy of Resolution which was passed by the Board of Commissioners
of the County of Orange, North Carolina at its regular meeting held on the 16th day of November, 1993,
to become effective on the 16th day of November, 1993, and that said Resolution has been duly recorded
in the minutes of the County.
WITNESS my hand and official seal of said County, this day of 1993.
COUNTY OF ORANGE, NORTH CAROLINA
[SEAL}
Beverly Blythe
County Clerk
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PPAB DRAFT
U/09/93
THIS INSTRUMENT HAS BEEN POE-AUDITED
IN THE MANNER REQUIRED BY
THE LOCAL GOVERNMENT BUDGET'AND
FISCAL CONTROL ACT,
Finance Officer
NORTH CAROLINA CoMMUNrry ACTIVITY CENTER
ORANGE COUNTY FACILITIES/SERVICES AGREEMENT
THIS AGREEMENT(the "Agreement") made and entered into this day of December, 1993,
by and between ORANGE COUNTY COMMUNITY ACTIVITY CORPORATION (the "Corporation"), a
nonprofit corporation duly incorporated under the laws of the State of North Carolina, and the COUNTY
OF ORANGE, NORTH CAROLINA (the "County"), a body politic and corporate existing under North
Carolina law:
WITNESSETU:
WHEREAS, the Board of Commissioners of the County of Orange, North Carolina(the "Board")
has determined that there is a need for a public swimming pool accessible to all residents of the County;
and
WHEREAS, the Board has evaluated several options for providing a public swimming pool
accessible to all residents of the County; and
WHEREAS, the Board has appropriated an initial amount of funding for the construction of a
public swimming pool facility in the County's 1993-98 Capital Improvements Plan; and
WHEREAS, the Corporation is a nonprofit organization authorized to own, operate and manage
recreational activities in the County; and
WHEREAS, the Corporation has proposed the construction of a Community Activity Center
("CAC"), which would include an olympic-sized swimming pool (the "CAC Pool") and other facilities,
including an ice rink; and
WHEREAS, the Corporation proposes to finance construction of the CAC through a "63-20"
financing(the "Corporation Financing")in which the Corporation would issue its own corporate debt and
the County would not be liable for any payment of that debt; and
WHEREAS, due to economies of scale and other factors, the Corporation would be able to provide
and maintain the CAC Pool on a more efficient basis than the County could if the County were to build
and operate its own pool; and
WHEREAS, the County is authorized to make public expenditures for parks and recreation; and
WHEREAS, the County is authorized to contract with private entities for any public purpose; and
WHEREAS, the County is authorized to enter into continuing, multiple-year agreements and
contracts; and
WHEREAS, the County has determined that it is in the best interest of the County that, instead
of building and operating its own pool, the County contract with the Corporation to provide a public pool
and operational services through the operation of the CAC Pool for the benefit of Orange County
residents;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Corporation
and the County hereby agree as follows:
ARTICLE I
PURPOSE OF AGREEMENT; ESSENTIALITY
The purpose of this Agreement is to give the residents of Orange County access to a public
swimming pool by having the County compensate the Corporation for the costs associated with the use
and operation of the CAC Pool.
ARTICLE II
ENGAGEMENT
Section 2.01. Engagement of the Corporation. The County hereby engages and retains the
Corporation as an independent contractor to provide and operate the CAC.
Section 2.02. Scope of Engagement. The Corporation shall provide the CAC and furnish facility
and operational services as reasonably required for the efficient construction and operation of the CAC.
The Corporation agrees to build and operate the CAC similarly to the manner in which the County would
build and operate its own recreation facilities, as set forth in the Operating Memorandum attached hereto
as Exhibit A.
ARTICLE III
PAYMENT OBLIGATION
Section 3.01. Payment of Fee. For services to be rendered by the Corporation hereunder, the
County hereby agrees to pay an annual fee (the "Fee") of Four Hundred Thousand Dollars ($ 400,000).
The Fee will be paid in four quarterly installments of One Hundred Thousand Dollars ($100,000) each
quarter. The first quarterly installment payment of the Fee is due and payable on the first day the CAC
is open for use by general public(the "Opening Date"). The second quarterly payment will be due and
payable on the first day of the third subsequent month. Subsequent quarterly payments will be due and
payable on the first day of the first month of the quarter following the second payment through the term
of the Agreement, as set forth in Section 4.02. If the date for making payment as provided herein, is not
a business day, such payment may be made on the next succeeding business day, with the same force and
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effect as if done on the nominal date provided herein, and no interest shall accrue for the period after
such nominal date.
Section 3.02. Security for Payment of the Fee. The payment obligation under this Agreement
is a contractual obligation of the County, payable from the County's funds and from the earnings and all
income received by the County from whatever source derived, to the extent that County's Funds are
available for such purpose and are not pledged for the payment of any other obligation of the County and
subject only to the limitation set forth in N.C. GEN. STAT. § 153A-149(c).
Section 3.03. No Abatement of Fee. There will be no abatement or reduction of the Fee by the
County for any reason, including, but not limited to, any defense, recoupment, setoff, counterclaim, or
any claim arising out of or related to the Agreement, including the temporary closing of the CAC for no
more than three (3) consecutive months or the closing of the CAC for 90 days during a 12 consecutive
month period. Closing of the CAC for more than three(3)consecutive months or the closing of the CAC
for 90 days during a 12 consecutive month period will, however, effect a termination of the Agreement
unless otherwise mutually approved by the parties pursuant to Section 16.06 contained herein.
Section 3.04. Fee. The Fee shall cover payment for all services to be provided under this
Agreement by the Corporation, including but not limited to:
(i) all salaries, benefits, and other expenses incurred by the Corporation personnel
pursuant to this Agreement;
(ii) any Corporation overhead and profit; and
(iii) all other fees, charges, costs,and expenses associated with the Corporation's perfor-
mance of this Agreement.
ARTICLE IV
DURATION
Section 4.01. Effective Date. This Agreement shall be effective when approved by the respective
governing bodies of each party, executed in duplicate counterparts and delivered to the respective parties.
Section 4.02. Term of Agreement. This Agreement shall continue in full force and effect for ten
(10) years from the Opening Date, as herein defined in Section 3.01.
ARTICLE V
PERSONNEL
The Corporation shall employ a General Manager who shall serve at the sole expense of the
Corporation and shall provide the active management of the CAC. The Corporation retains the right and
responsibility to exercise full control and supervision over its employees and their terms and conditions
of employment except as otherwise provided herein. Without limiting the generality of the foregoing,
the Corporation shall be solely responsible for all matters relating to payment of its employees, including
the withholding and payment of employee taxes, insurance contributions, and the like. As between the
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Corporation and the County, the Corporation will be responsible for its own acts and omissions and those
of its employees and subcontractors to the extent provided by law.
ARTICLE VI
NATURE OF RELATIONSHIP
The Corporation and the County agree that in the performance of this Agreement, the Corporation
shall be acting as an independent contractor. Nothing herein shall constitute or be construed to be or
create a partnership, agency, joint venture or other similar relationship between the County and the
Corporation. The Corporation agrees that it will not represent to anyone that its relationship to the
County is other than that of independent contractor, and the County and the Corporation may so inform
any parties with whom they deal and may take any other reasonable steps to carry out the intent of this
section.
ARTICLE VII
PROHIBITED INTERESTS
No member of the Board of Commissions of the County, or officer, or employee of the County,
during his/her tenure or for one (1) year thereafter, shall have any personal interest, direct or indirect,
in this Agreement or the benefits thereof. No Corporation officer, employee, or agent associated with
this Agreement, and no Corporation officer, employee, or agent shall either solicit or accept gratuities,
favors, or anything of material monetary value from vendors, suppliers, or subcontractors for his or her
individual benefit.
ARTICLE VIII
OPERATING REVENUES
Until the debt obligations incurred by the Corporation pursuant to the Corporation Financing have
been discharged, all revenues derived in any manner from or in connection with the operation of the
CAC, whether from users or from any other sources whatsoever, shall be and remain from the initial
receipt thereof, the property of the Corporation.
ARTICLE IX
COVENANTS, REPRESENTATIONS, AND WARRANTIES
Section 9.01. Covenants, Representations, and Warranties of the County. The County hereby
covenants, represents, and warrants as follows:
(i) The County will maintain its existence, and, in the event of reorganization, this Agreement
will be binding upon any successors or assigns;
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(ii) The County will comply in all material respects with the terms and conditions of the laws
of North Carolina respecting budgeting and appropriations and will take whatever action is
necessary to assure the proper and continued receipt and expenditure of monies thereunder;
(iii) The County will execute and deliver all such further instruments and take all such further
action as may be required to carry out the purposes of this Agreement;
(iv) Neither the execution and delivery hereof, nor the fulfillment of or compliance with the
terms and conditions hereof, nor the consummation of the transactions contemplated hereby,
conflicts with or results in breach of the terms, conditions, and provisions of any restriction or
agreement or instrument to which the County is now a party or by which the County is bound,
or constitutes a default under any of the foregoing;
(v) No controversy, budget protest, or litigation is pending or threatened involving the
incorporation, organization, existence, or boundaries of the County, or the titles of its officers
to their respective positions, or the validity of the adopted budget, or the power and duty of the
County to provide and apply adequate ad valorem tax receipts and other general fund receipts in
accordance with its adopted budget for the current fiscal year; and further there is no action, suit,
proceeding, inquiry, or investigation at law or in equity or before or by any public board or body
pending or, to its knowledge, any basis therefor, wherein an unfavorable decision, ruling or
finding would adversely affect the transactions contemplated by this Agreement. The County will
immediately notify the Corporation if any such controversy or litigation is filed or threatened
during the term of this Agreement; and
(vi) As of the date of execution hereof the County is not currently in default in any material
respect on any other obligation.
Section 9.02. Covenants, Representations, and Warranties of the Corporation. The Corporation
represents, covenants, and warrants for the benefit of the County as follows:
(i) The Corporation is a nonprofit corporation duly created, existing, and in good standing under
the laws of North Carolina, is duly qualified to do business in North Carolina, has all necessary
powers to carry out its obligations and to enter into this Agreement, and has duly authorized the
execution and delivery of this Agreement;
(ii) Neither the execution and delivery hereof, nor the fulfillment of or compliance with the
terms and conditions hereof, nor the consummation of the transactions contemplated hereby,
conflicts with or results in breach of the terms, conditions, and provisions of any restriction or
agreement or instrument to which the Corporation is now a party or by which the Corporation
is bound, or constitutes a default under any of the foregoing;
(iii) To the knowledge of the Corporation, there is no litigation or proceeding pending or
threatened against the Corporation or any other person affecting the right of the Corporation to
execute or deliver this Agreement or to comply with its obligations under this Agreement.
Neither the execution and delivery of this Agreement by the Corporation, nor compliance by the
Corporation with its obligations under this Agreement, require the approval of any regulatory
body, any parent company, or any other entity, which approval has not been obtained;
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(iv) The Corporation agrees to obtain annually an audit of its financial statements from an
accounting firm acceptable to the County and to provide a copy of such audit to the County
promptly after receipt thereof;
(v) The Corporation will maintain its existence, and, in the event of reorganization, this
Agreement will be binding upon any successors or assigns; and
(vi) The Corporation will execute and deliver all such further instruments and take all such
further action as may be required to carry out the purposes of this Agreement.
ARTICLE X
OWNERSHIP OF PROPERTY; Ln rrrED OBLIGATION OF COUNTY
Section 10.01. Ownership of Property. All property of any type hereinafter acquired at the
Corporation expense for or in connection with the CAC, shall be acquired in the name of the Corporation
and become the property of the Corporation subject to the right of the County to a reversionary interest
therein when all debt obligations of the Corporation related to the CAC have been discharged.
Section 10.02. Limited Obligation of County. The County has agreed to accept the reversionary
interest referred to above for the sole purpose of complying with Internal Revenue Service Revenue
Procedure 82-26. The debt incurred by the Corporation pursuant to the Corporation Financing is the sole
responsibility of the Corporation. No debt of the County shall be created pursuant to the Corporation
Financing. No provision of this Agreement shall be construed or interpreted as creating a delegation of
governmental powers nor as a donation by or a lending of the credit of the County within the meaning
of the constitution of the State. This Agreement shall not directly or indirectly or contingently obligate
the County to make any payments beyond those appropriated pursuant to Section 3.01 of this Agreement.
To the extent of any conflict between this provision and any other provision of this Agreement or any
documentation related to the Corporation Financing, this provision shall take priority.
ARTICLE XI
INSURANCE
The Corporation shall procure and maintain, or cause to be procured and maintained, throughout
the term of this Agreement, all insurance as customarily maintained for such facilities. The types of
coverage and limits of liability obtained shall be subject to approval by the County.
ARTICLE XII
INDEMNIFICATION
To the extent permitted by law, and further, to the extent of insurance policies owned by the
County, the County shall indemnify, defend, and hold harmless the Corporation from and against any
and all claims or liabilities(including reasonable attorneys' fees) arising out of or in connection with this
Agreement where attributable to the acts or omissions performed by the County. The Corporation shall
indemnify, defend, and hold harmless the County from and against any and all claims or liabilities
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(including reasonable attorneys' fees) arising out of or in connection with this Agreement where
attributable to the acts or omissions performed by the Corporation.
ARTICLE XIII
PERFORMANCE OF GOVERNMENT FUNCTIONS
Nothing contained in this Agreement shall be deemed or construed so as to in any way estop,
limit, or impair the County from exercising or performing any regulatory, policing, legislative,
governmental, or other powers or functions pursuant to applicable law.
ARTICLE XIV
DEFAULTS AND REMEDIES
Section 14.01. Definition of Event of Default.
A. The County shall be deemed to be in default hereunder upon the happening of any of the
following events of default:
(i) The County fails to make payment of the Fee required under Section 3.01 when due;
(ii) The County fails to budget appropriate money sufficient to pay the Fee coming due in the
next ensuing fiscal year in the County's annual budget or in an interim or amended County
budget;
(iii) Any bankruptcy, insolvency, or reorganization proceeding or similar litigation as instituted
against the County, or a receiver, custodian, or similar officer is appointed for the County or any
of its property, and such proceeding or appointment shall not be vacated or fully stayed within
ninety (90) days after the institution or occurrence thereof; or
(iv) Any warranty, representation, or statement made by the County herein or in any other
document executed or delivered in connection herewith is found to be incorrect or misleading in
any material respect on the date made.
B. The Corporation shall be deemed to be in default hereunder upon the happening of any
of the following events of default:
(i) Any bankruptcy, insolvency, or reorganization proceeding or similar litigation is instituted
against the Corporation, or a receiver, custodian, or similar officer is appointed for the
Corporation or any of its property, and such proceeding or appointment shall not be vacated or
fully stated within ninety (90) days after the institution or occurrence thereof; or
(ii) the Corporation fails to operate the CAC for more than three (3) consecutive months.
Section 14.02. Remedies. Each party hereto will have all remedies available at law or in equity
to enforce any of the terms and provisions hereof, including, but not limited to, actions at law for
damages and equitable actions seeking rescission of this Agreement and/or injunctive relief(mandatory
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or prohibitory) to prevent the breach or threatened breach of any term or provision thereof or to enforce
the performance of all terms and conditions of this Agreement. All remedies are cumulative; the exercise
of any one or more of them will not in any way alter or diminish the rights of the exercising party to any
other remedy provided herein or at law or in equity.
Section 14.03. Attorneys'Fees. In the event of any breach or default by either party of any of
the terms and conditions of this Agreement, the non-defaulting party will be entitled to reimbursement
from the defaulting party of all of its costs and expenses in enforcing any of the terms and conditions of
this Agreement, including all reasonable and necessary attorneys' fees incurred thereby.
ARTICLE XV
NOTICES
Except as otherwise provided in this Agreement, all notices, certificates, requests, requisitions,
or other communications given pursuant to this Agreement must be in writing and will be sufficiently
given and will be deemed given when mailed by certified mail, postage prepaid, addressed as follows:
County: County Manager
Orange County Government Services Center
200 S. Cameron
Hillsborough, North Carolina 27278
The Corporation: Orange County Community Activity Corporation
, North Carolina
ARTICLE XVI
MISCELLANEOUS
Section 16.01. No Personal Liability. No member of the County Board of Commissioners or
officer or employee of the County and no member, director, officer, or employee or agent of the
Corporation will have any personal liability for acts taken in accordance with this Agreement.
Section 16.02. Amendment. This Agreement may not be modified or amended except by
subsequent written Agreement authorized by the governing bodies of each party and signed by authorized
representatives of both parties.
Section 16.03. Entire Agreement. This instrument, including the Exhibits attached hereto,
contains
the entire Agreement between the parties, and no statement, oral or written,made by either party
or agent of either party that is not contained in this written Agreement shall be valid or binding.
Section 16.04. Severability. If any of the provisions of this Agreement shall be held by a court
of competent jurisdiction to be unconstitutional or unenforceable, the decision of such court shall not
affect or impair any of the remaining provisions of this Agreement, and the ,
arties shall, to the extent
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they deem to be appropriate, take such actions as are necessary to correct any such unconstitutional or
unenforceable provision. It is hereby declared to be the intent of the parties to this Agreement that this
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Agreement would have been approved and executed had such an unconstitutional or unenforceable
provision been excluded therefrom.
Section 16.05. Cooperative Efforts. This Agreement shall be liberally construed in order to
promote a harmonious relationship between the parties with regard to the management and operation of
the CAC. The Corporation accepts the relationship of trust and confidence established between the
Corporation and the County by this Agreement. The Corporation covenants with the County to furnish
its best skill and judgment and to fully and effectively cooperate with the County to accomplish the
purposes and objectives of this Agreement. If a problem arises that this Agreement does not directly or
indirectly address, the Corporation and the County agree to work with one another to determine a
mutually satisfactory solution.
Section 16.06. Approvals. Notwithstanding anything herein which may be to the contrary, all
approvals or consents required or permitted pursuant to this Agreement shall be in writing in order to be
considered valid and binding.
Section 16.07. Successors and Assigns. This Agreement shall be binding upon the heirs,
personal representatives, successors, and assigns of the parties hereto; provided, however, this provision
shall not be deemed to authorize the assignment or other transfer of this Agreement which may only be
accomplished as expressly provided in this Agreement.
Section 16.08. Waiver. The failure of either party to insist upon a strict performance of any of
the terms or provisions of the Agreement, or to exercise any option, right, or remedy under the
Agreement, shall not be construed as a waiver or as a relinquishment for the future of such term,
provision, option, right, or remedy, but the same shall continue and remain in full force and effect. No
waiver by either party of any term or provision hereof shall be deemed to have been made unless
expressed in writing and signed by the party against whom the waiver is asserted.
Section 16.09. Covenant of Further Assurances. The Corporation and the County agree that
from and after the date of execution hereof, each will, upon the request of the other, execute and deliver
such other documents and instruments and take such other actions as may be reasonably required to carry
out the purpose and intent of this Agreement.
Section 16.10. Choice of Law. This Agreement shall be deemed made in North Carolina. This
Agreement shall be governed by and construed in accordance with the laws of the State of North
Carolina. All litigation arising out of this Agreement shall be brought in courts sitting in North Carolina,
with venue in Orange County.
Section 16.11. Force Majeure. In the event that the Corporation or the County is unable to
perform the obligations of this Agreement, by reason of an act of God, war, riot, strike, insurrection,
fire, explosion, injunction, inability to obtain fuel, government action, order or decree of any court,
casualty, or other cause beyond the control of the Corporation or the County, then the Corporation or
the County, as applicable, shall be excused from such failure to perform but shall recommence and
continue to perform promptly after removal or cessation of such cause of delay.
Section 16.12. Assignment. No assignment, delegation, transfer, or novation of this Agreement
or any part thereof shall be made unless approved by both the Corporation and the County.
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Section 16.13. Duplicate Originals. This Agreement shall be executed by the parties hereto in
duplicate originals, each of which, when executed, shall constitute one and the same Agreement and one
of which shall be retained by each party.
Section 16.14. Headings. The headings given to sections or paragraphs of this Agreement are
included for reference only, and shall not be construed to affect the meaning of this Agreement.
IN WITNESS WHEREOF, the County has caused this Agreement to be approved in open session,
and the resolution approving this Agreement is part of the minutes of the County, and the undersigned
officials of the County have been authorized to execute this Agreement. The Corporation, likewise, has
authorized the execution of this Agreement by proper resolutions and its officers are authorized to execute
this Agreement.
Executed as of this day of December, 1993.
COUNTY OF ORANGE, NORTH CAROLINA
[SEAL]
By:
Chairman, Board of Commissioners
Attest:
Clerk
[Signatures Continued on Following Page]
10
I Lc
[Counterpart Page of Facilities/Services Agreement]
ORANGE COUNTY COMMUNITY ACTIVITY
CORPORATION
[SEAL]
By:
President
Attest:
Secretary
mtm34243\cty.agr
11
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EXHIBIT A
OPERATING MEMORANDUM
COUNTY OF ORANGE, NORTH CAROLINA
and
ORANGE COUNTY COMMUNITY ACTIVITY CORPORATION
Contract Year: December 1, 1993 to November 30, 1994
Section 1. Introduction. In the Facilities/Services Agreement dated December , 1993 (the
"Agreement") between the County of Orange, North Carolina (the "County") and Orange County
Community Activity Corporation(the "Corporation"), the County and the Corporation have provided for
the acquisition, construction and equipping of a Community Activity Center (the "CAC") and the
operation thereof for a period of ten (10) years. This Operating Memorandum establishes the further
understandings of the County and the Corporation as to the CAC and its operation on completion of
construction thereof.
Section 2. Construction of the CAC. The Corporation is responsible for all aspects of the
acquisition, construction and equipping of the CAC. The CAC shall be built in accordance with
nationally recognized standards for similar facilities. The Corporation has entered into a construction
contract with [Name] dated as of the date hereof; the County is satisfied with the selection of[Name] to
perform in accordance with the terms of the construction contract. The County has reviewed the design
and specifications for the CAC and the architect's rendering with respect to the CAC and is satisfied with
the representations of the CAC in such documents. The County has the right to inspect all construction-
related documents on reasonable request therefor and to enter the site of the CAC during the hours that
it is open to construction personnel to inspect the construction of the CAC as it progresses
Section 3. Operation of the CAC. In connection with the operation of the CAC, the Corporation
will:
(a) retain or employ maintenance personnel who are trained and qualified to operate
and maintain equipment, chemicals and supplies; to perform scheduled maintenance and
to complete all periodic inspections associated with facilities such as the CAC;
(b) retain or employ an aquatics manager or pool operator (1) meeting all
specifications and qualifications required by national, state and local regulatory bodies
or organizations whose standards are recognized in the aquatic community; and (2)
experienced in operations of an aquatic center of the size and scope of the CAC and (3)
experienced in planning and implementing aquatics instructional classes, innovative
aquatic programs and the schedule of activities proposed each year by the County
Recreation and Parks Department;
(c) make the facilities and programs of the CAC available to the public without r'
discrimination among users and in compliance with all equal employment/affirmative
action requirements imposed under national, state or local law;
1�
(d) establish fees and charges for the use of the CAC competitive with similar
facilities located in the County, but with preferential fees and charges to residents of the
County for all pool uses and activities; and
(e) assist the County Recreation and Parks Department in providing special pool
activities at the CAC for its program participants.
(f) establish a schedule of pool hours, uses, and
activities that is satisfactory to the County —
changes to such schedule may be made from time to
time or in special circumstances through agreement
between the Corporation and the Orange County
Recreation & Parks Department.
The County and the Corporation acknowledge that a temporary closing under Section 3.03 of the
Agreement is intended to permit closure only for major repairs to the CAC.
Section 4. Operating Memorandum as Part of Agreement Between County and Corporation.
Although denominated as an Operating Memorandum, and subject to annual review, this document is a
part of the Agreement and is to be interpreted as if incorporated verbatim into the Agreement.
Section 5. Term. This Operating Memorandum shall be for the contract year ending
November 30, 1994, but shall renew annually unless the County and the Corporation agree to change the
provisions hereof.
COUNTY OF ORANGE, NORTH CAROLINA
[SEAL]
By:
Attest: County Manager
By:
Clerk
ORANGE COUNTY COMMUNITY ACTIVITY
CORPORATION
[SEAL]
By:
Attest: President
By:
Secretary
�9
PPAB Draft
10126/93
ORANGE COUNTY COMMUNITY ACTIVITY CORPORATION
AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Trustee
INDENTURE OF TRUST
Dated as of
December 1, 1993
This document was prepared by
Donald P. Ubell
Parker, Poe, Adams & Bernstein
2600 Charlotte Plaza
Charlotte, NC
(704) 372-9000
INDENTURE OF TRUST
TABLE OF CONTENTS
(This Table of Contents is not a part of this Indenture of Trust and is only for convenience of reference.)
Pate
PARTIES
1
PREAMBLES
1
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01. Definitions
Section 1.02. Interpretations 3
3
ARTICLE II
AUTHORIZATION, TERMS, EXECUTION
AND DELIVERY OF BONDS
Section 2.01. Authorized Amount of Bonds;Execution and Delivery 11
Section 2.02. Details of Bonds;Payment 11
Section 2.03. Interest Rate Provisions 11
Section 2.04. Execution of the Bonds 12
Section 2.05. Authentication
Section 2.06. Delivery of the Bonds 12
Section 2.07. Mutilated, Lost, Stolen, or Destroyed Bonds 12
13
Section 2.08. Registration of Bonds;Persons Treated as Owners;Transfer of Bonds
13
Section 2.09. Cancellation of Bonds
Section 2.10. Temporary Bonds 13
Section 2.11. Additional Bonds 13
13
ARTICLE III
CALL AND REDEMPTION AND PURCHASE OF BONDS PRIOR TO MATURITY 15
Section 3.01. Extraordinary Redemption 15
Section 3.02. Optional Redemption 15
Section 3.03. Mandatory Sinking Fund Redemption 15
Section 3.04. Call and Redemption;Notice of Redemption 15
Section 3.05. Redemption Deposit 16
Section 3.06. Partial Redemption of Bonds;Selection of Bonds for Redemption 16
Section 3.07. Effect of Redemption 16
Section 3.08. Purchase of Bonds 17
ARTICLE IV
CONSTRUCTION FUND
Section 4.01. Creation of Construction Fund 18
Section 4.02. Payments from Construction Fund 18
Section 4.03. Items of Costs
Section 4.04. Requisitions for Payment from Construction Fund 19
19
Section 4.05. Establishment of Completion Date
Section 4.06. Balance in Construction Fund 19
19
ARTICLE V
REVENUE FUND; BOND FUND,MAINTENANCE RESERVE FUND; REBATE FUND 21
Section 5.01 Revenue Fund
Section 5.02. Bond Fund 21
Section 5.03. Maintenance Reserve Fund 21
Section 5.04. Operating and Maintenance Fund 21
Section 5.05. Reserve Fund 22
22
ARTICLE VI
Deposit and Investment of Moneys in Funds and Accounts 23
ARTICLE VII
GENERAL COVENANTS
Section 7.01. Payment of Revenues and Principal and Interest, Pledge of Trust Estate; Limited Liability 24
Section 7.02. Complete the Project and any Improvements 24
Section 7.03. Use of Proceeds,Ownership,Management and Operation of Properties 24
Section 7.04. No Priority 24
Section 7.05. Punctual Payment 24
Section 7.06. Payment of Taxes and Other Charges 24
Section 7.07. Books and Accounts;Financial Statements 25
Section 7.08. Eminent Domain Proceeds 25
Section 7.09. Performance of Covenants by Corporation;Authority; Due Execution 25
Section 7.10. Recording and Filing; Instruments of Further Assurance 25
Section 7.11. Recording and Filing; Further Instruments 25
Section 7.12. No Disposition of Trust Estate 25
Section 7.13. Access to Books 26
Section 7.14. Covenants as to Corporate Existence,Maintenance of Project
and any Improvements,Insurance,Etc. 26
Section 7.15. Rate Covenant. 30
Section 7.16. Operating Budgets. 30
Section 7.17. Indemnification and Nonliability of the Trustee. 31
Section 7.18. Environmental Condition of Project and any Improvements;Indemnification. 31
ARTICLE VIII
Tax Covenants
33
ARTICLE IX
DEFAULTS AND REMEDIES 34
Section 9.01. Events of Default 34
Section 9.02. Remedies on Default 34
Section 9.03. Owners'Right to Direct Proceedings 35
Section 9.04. Rights and Remedies of Owners 35
Section 9.05. Trustee May Enforce Rights Without Bonds 36
Section 9.06. Delay or Omission No Waiver 36
Section 9.07. No Waiver of One Default to Affect Another 36
Section 9.08. • Discontinuance of Proceedings on Default; Position of Parties Restored 36
Section 9.09. Waivers of Events of Default 36
Section 9.10. Application of Moneys 37
11
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2.2
ARTICLE X
TRUSTEE;PAYING AGENT 39
Section 10.01. Acceptance of Trusts
Section 10.02. No Responsibility for Recitals 39
Section 10.03. Limitations on Liability 39
Section 10.04. Compensation,Expenses 39
pe xpenes and Advances 39
Section 10.05. Notice of Events of Default and other Events or Facts 40
Section 10.06. Action by Trustee 40
Section 10.07. Good-Faith Reliance
Section 10.08. Dealings in Bonds and with Corporation 40
Section 10.09. Construction of Indenture 40
Section 10.10. Resignation of Trustee 41
Section 10.11. Removal of Trustee 41
41
Section 10.12.
Appointment of Successor Trustee 41
Section 10.13. Qualifications of Successor Trustee 41
Section 10.14. Judicial Appointment of Successor Trustee 42
Section 10.15. Acceptance of Trusts by Successor Trustee 42
Section 10.16. Successor by Merger or Consolidation 42
Section 10.17. Standard of Care
Section 10.18. Intervention in Litigation of Corporation 42
Section 10.19. Reliance on Bond of Corporation 42
Section 10.20. Paying Agent 42
43
Section 10.21.
Qualifications of Paying Agent; Resignation; Removal 43
Section 10.22. Several Capacities 44
Section 10.23. Appointment of Co-Trustee 44
ARTICLE XI
Execution of Instruments by Owners and Proof of Ownership of Bonds 45
ARTICLE XII
Defeasance
46
ARTICLE XIII
SUPPLEMENTAL INDENTURES AND AMENDMENTS OF THE CONTRACT 47
Section 13.01. Supplemental Indentures Not Requiring Consent of Owners 47
Section 13.02. Supplemental Indentures Requiring Consent of Owners 47
Section 13.03. Execution of Supplemental Indenture 48
ARTICLE XIV
MISCELLANEOUS
Section 14.01. Covenants of Corporation 49
Section 14.02. Parties Interested Herein 49
Section 14.03. Titles,Headings,Captions,Etc 49
Section 14.04. Severability 49
Section 14.05. Governing Law 49
Section 14.06. Execution in Counterparts 49
Section 14.07. Notices
Section 14.08. Payments Due on Holidays 49
Section 14.09. Corporation,County and Trustee Representatives 50
50
EXHIBIT A FORM OF BOND
iii
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INDENTURE OF TRUST
THIS INDENTURE OF TRUST dated as of December 1, 1993 (together with any amendments
hereto made in accordance herewith, this "Indenture"), by and between ORANGE COUNTY COMMUNITY
ACTIVITY CORPORATION (the "Corporation"), a nonprofit corporation duly created and existing under
the laws of the State of North Carolina, and Fmsr UNION NATIONAL BANK OF NORTH CAROLINA, as
trustee(the"Trustee"),having an office and principal place of business in Charlotte, North Carolina, duly
organized and existing under the laws of the United States of America, being authorized to accept and
execute trusts of the character herein set out under and by virtue of the laws of the State of North
Carolina;
WITNESSETH:
WHEREAS, the Orange County Community Activity Corporation is a nonprofit, educational
organization owning, operating and managing community activities facilities in Orange County (the
"County");
WHEREAS, the Corporation has proposed the construction of a Community Activity Center
(the "CAC"), which would include an olympic-sized swimming pool (the "CAC Pool") and other
facilities, including an ice rink and the acquisition of the land on which the CAC will be located
(the "Site");
WHEREAS,due to economies of scale and other factors, the Corporation will be able to construct
and operate the CAC Pool on a more efficient basis than the County could if the County were to build
and operate its own pool;
WHEREAS, the County has determined that it is in the best interest of the County that, instead
of building and operating its own pool, the County enter into a Facilities/Management Services Contract
dated as of December 1, 1993 (the "Contract") with the Corporation to construct and operate the CAC
Pool for the benefit of County residents;
WHEREAS, the Corporation has determined to issue its bonds in two series (the "Bonds") for the
purpose of financing the cost of acquisition, construction and equipping of the CAC, and other costs as
described herein;
WHEREAS, in order to secure the payment of the principal of and interest on the Bonds, the
Corporation has granted a security interest in the Site pursuant to a Deed of Trust and Security
Agreement dated December_, 1993 (the "Deed of Trust");
WHEREAS, pursuant to this Indenture, the Corporation has pledged and assigned the Trust Estate
(as defined herein) to the Trustee;
WHEREAS, the Trustee has entered into this Indenture for the equal and proportionate benefit of
the owners of the Bonds, and will disburse moneys received by it in accordance with this Indenture; and
WHEREAS, all things necessary to make the Bonds, when executed and delivered by the
Corporation and executed and authenticated by the Trustee as in this Indenture provided, legal, valid and
binding obligations of the Corporation, and to constitute this Indenture a valid, binding and legal
instrument for the security of the Bonds in accordance with its terms, have been done and performed;
2'4
NOW, THEREFORE, THIS INDENTURE OF TRUST WlTNESSETH:
That the Corporation, in consideration of the premises and the mutual covenants herein contained
and for the benefit of the owners of the Bonds and the sum of$1.00 to it duly paid by the Trustee at or
before the execution of these presents,and for other good and valuable consideration,the receipt of which
is hereby acknowledged, in order to secure the payment of the principal of,premium, if any, and interest
on all Bonds at any time outstanding under this Indenture, according to their tenor and effect, and to
secure the performance and observance of all the covenants and conditions in the Bonds and herein
contained, and to declare the terms and conditions on and subject to which the Bonds are issued and
secured, has executed and delivered this Indenture and has granted,warranted,aliened,remised,released,
conveyed, assigned, pledged, set over and confirmed, and by these presents does grant, warrant, alien,
remise, release, convey, assign, sell, set over and confirm unto FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as the Trustee, and to its successors and assigns forever, all and singular the
following described property, franchises and income:
(a) All rights, title and interest of the Corporation in and to the CAC and all revenue
received pursuant to the operation of the CAC;
(b) All moneys and securities from time to time held by the Trustee under this
Indenture in any fund or account other than the Rebate Fund and any and all other personal
property of every name and nature from time to time hereafter by delivery or by writing of any
kind, pledged or hypothecated, as and for additional security hereunder, by the Corporation, or
by anyone on its behalf, in favor of the Trustee, which is hereby authorized to receive any and
all such property at any and all times and to hold and apply the same subject to the terms hereof;
(c) All rights, title and interest of the Corporation to the County's Payment
Obligations under the Contract; and
(d) The Deed of Trust.
TO HAVE AND TO HOLD the same with all privileges and appurtenances hereby conveyed and
assigned, or agreed or intended to be, to the Trustee and its successors in said trust and assigns forever;
IN TRUST, NEVERTHELESS, on the terms herein set forth for the equal and proportionate
benefit, security and protection of all owners of Bonds, without privilege,priority or distinction as to the
lien or otherwise of any of the Bonds over any other of the Bonds;
PROVIDED, HOWEVER, that if the Corporation pays or causes to be paid the principal of,
premium, if any, and interest due and payable on all Outstanding Bonds, pays or causes to be paid all
other sums payable by the Corporation, including all fees, expenses and other amounts payable to the
Trustee, and the Paying Agent, then, and in that case, the right, title and interest of the Trustee in and
to the Trust Estate will then cease, terminate and become void and this Indenture and the rights hereby
granted shall cease, determine and be void; otherwise this Indenture to be and remain in full force and
effect.
THIS INDENTURE FURTHER WITNESSETH and it is expressly declared, that all Bonds
executed, delivered and secured hereunder are to be executed, authenticated and delivered and all said
property, rights, interests, revenues and receipts hereby pledged, assigned and mortgaged are to be dealt
with and disposed of under, on and subject to the terms, conditions, stipulations,covenants, agreements,
• 2
•
trusts, uses and purposes as hereinafter expressed, and the Corporation has agreed and covenanted, and
does hereby agree and covenant, with the Trustee for the benefit of the Owners, as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01. Definitions. The terms defined in this Article I have the meanings provided
herein for all purposes of this Indenture, unless the context or use clearly requires otherwise. All
capitalized, undefined terms used herein have the meanings ascribed to them in the Contract.
"Act"means N.C.G.S. Chapter 55A,as amended, the North Carolina Nonprofit Corporation Act.
"Additional Bonds"means any additional obligations issued under Section 2.11.
"Authorized Denomination"means(1)$100,000 and integral multiples of$5,000 in excess thereof
or(ii) such lesser amount as may be necessary to effect a sinking fund redemption under Section 3.03.
"Average Annual Debt Service" means, as of'any calculation date the amount obtained by
computing the aggregate amount of annual debt service on the Bonds for the then current and all
succeeding Fiscal Years with respect to the Bonds Outstanding at such calculation date and dividing that
amount by the number of Fiscal Years to the last maturity of any Bonds Outstanding at such calculation
date.
"Bond Counsel" means any t firm of nationally recognized bond counsel familiar with the
transactions contemplated under this Indenture appointed by the Corporation and acceptable to the
Trustee.
"Bond Fund" means the trust fund by that name established pursuant to Section 5.02.
"Bond Payment Date"means any Interest Payment Date and any other date on which the principal
of or interest on the Bonds is to be paid to the Owners thereof, whether on redemption, at maturity or
on acceleration of maturity of the Bonds.
"Bonds"means the 1993A Bonds, the 1993B Bonds and any Additional Bonds.
"Business Day"means any day other than(i) a day on which banking institutions in New York,
New York or the cities in which the Trustee, the Paying Agent, or have their respective principal offices
are authorized to close or(ii) a day on which the New York Stock Exchange is closed.
"Closing Date"means the date of delivery of the 1993A Bonds and the 1993B Bonds to the initial
purchaser or purchasers thereof in accordance with this Indenture.
"Code" means the Internal Revenue Code of 1986, as amended. Each reference to a section of
the Code herein will be deemed to include the United States Treasury Regulations proposed or in effect
with respect thereto and applicable to the Bonds or the use of the proceeds thereof
"Completion Date"means the date of completion of the construction and equipping of the Project
as set forth in Section 4.05.
3
"Construction Fund"means the fund by that name created in Section 4.01.
"Contract" means the Facilities/Management Services Contract dated as of December 1, 1993,
among the Corporation and the County, and any amendments or supplements thereto.
"Contract Expiration Date"means the effective date of termination of the Contract by the County
pursuant to Article N of the Contract.
"Corporation Representative"means any of the following: (i) the President of the Corporation;
(ii)any Secretary-Treasurer of the Corporation;or(iii)any other person or persons at the time designated
to act on behalf of the Corporation for purposes of performing any act on behalf of the Corporation under
the Contract or this Indenture by a written certificate furnished to the County and the Trustee containing
the specimen signature of such person or persons and signed on behalf of the Corporation by the
President of the Corporation.
"Cost,"as applied to the Project or any Improvements, means the cost of acquisition,construction
and equipping of the Project and any Improvements and all obligations and expenses and all items of cost
which are set forth in Section 4.03.
"Costs of Issuance" means all fees, costs and expenses payable or reimbursable directly or
indirectly by the Corporation and related to the authorization, sale and delivery of the Bonds as specified
in a certificate of the Corporation delivered on the date the Bonds are issued.
"County"means the County of Orange, North Carolina.
"County Representative"means any of the following: (i)the County Manager of the County; (ii)
the Finance Director of the County; or (iii)any other person or persons at the time designated to act on
behalf of the County for purposes of performing any act on behalf of the County under the Contract by
a written certificate furnished to the Corporation and the Trustee containing the specimen signature of
such person or persons and signed on behalf of the County by the Chairman of the Board of
Commissioners of the County.
"Current Expenses"means the current expenses, paid or accrued, of operation, maintenance and
current repair of the Project and any Improvements, as calculated in accordance with Generally Accepted
Accounting Principles, and includes, without limiting the generality of the foregoing, insurance
premiums, any amount required to be rebated to the United States Government, amounts payable by the
Corporation under the Deed of Trust other than the principal of, premium, if any, and interest on the
Bonds, administrative expenses of the Corporation relating solely to the Project and any Improvements,
labor, executive compensation, the cost of materials and supplies used for current operations, taxes and
charges for the accumulation of appropriate reserves for current expenses not annually recurrent, but
which are such as may reasonably be expected to be incurred in accordance with sound accounting
practice. "Current Expenses" will not include (i) interest on the Bonds, (ii) any allowance for
depreciation or replacements of capital assets of the Project or any Improvements, or (iii) amortization
of financing costs.
"Deed of Trust"means the Deed of Trust and Security Agreement dated December_, 1993 from
the Corporation to the Deed of Trust trustee named therein.
"Default" and "Event of Default"mean any occurrence or event specified in Section 9.01.
4
a1
"Federal Securities"means (a) direct obligations of the United States of America for the payment
of which the full faith and credit of the United States of America is pledged; (b) obligations issued by
any agency controlled or supervised by and acting as an instrumentality of the United States of America,
the payment of the principal of and interest on which is fully guaranteed as full faith and credit
obligations of the United States of America (including any securities described in(a)or(b) issued or held
in the name of the Trustee in book entry form on the books of the Department of Treasury of the United
States of America), which obligations, in either case, are held in the name of the Trustee and are not
subject to redemption or purchase prior to maturity at the option of anyone other than the holder; (c) any
bonds or other obligations of any state of the United States of America or of any agency, instrumentality
or local governmental unit of any such state which are(i)not callable prior to maturity or(ii)as to which
irrevocable instructions have been given to the trustee or escrow agent of such bonds or other obligations
by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates
specified, and which are rated by Moody's, if the Bonds are rated by Moody's, and S&P, if the Bonds
are rated by S&P within the highest rating category and which are secured as to principal, redemption
premium, if any, and interest by a fund consisting only of cash or bonds or other obligations of the
character described in clause(a) hereof which fund may be applied only to the payment of such principal
of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date
or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as
appropriate; or(d)direct evidences of ownership of proportionate interests in future interest and principal
payments on specified obligations described in (a) held by a bank or trust company as custodian, under
which the owner of the investment is the real party in interest and has the right to proceed directly and
individually against the obligor on the underlying obligations described in (a), and which underlying
obligations are not available to satisfy any claim of the custodian or any person claiming through the
custodian or to whom the custodian may be obligated.
"Fiscal Year"means that period adopted, initially July 1 through June 30, by the Corporation as
its annual accounting period.
"Improvements" means any additional facilities or additions, extensions, improvements or
betterments to the Project, financed in whole or in part by the issuance of a Series of Additional Bonds,
which are secured by the Revenues.
"Indenture"means this Indenture of Trust dated as of December 1, 1993 between the Corporation
and the Trustee, as amended or supplemented from time to time.
"Interest Payment Date"means June 1 and December 1 of each year, beginning June 1, 1994.
"Mail"means mail, by first-class postage.
"Maintenance Reserve Fund" means the fund by that name created in Section 5.03.
"Maximum Annual Debt Service" means, as of any date of calculation the highest principal and
interest payment requirements with respect to all Bonds for any succeeding Fiscal Year excluding the
amount of interest on Bonds payable in such period from the proceeds of such Bonds deposited with the
Trustee for such purpose and excluding Bonds for which the Corporation has caused to be escrowed cash
or marketable securities for repayment. If any Bonds are subject to mandatory redemption prior to
maturity, the term of the amortization of such Bonds will be determined by the related sinking fund
schedule. If any Bonds are subject to tender for purchase at the option of the Owner before maturity,
the term of the amortization of the Bonds will be deemed to be the remaining years to maturity and
principal will be calculated on the basis of level debt service.
5
r;,
ag
"Moody's"means Moody's Investors Service,a corporation organized and existing under the laws
of the State of Delaware, its successors and their assigns, and, if such corporation for any reason no
longer performs the functions of a securities rating agency, "Moody's" will be deemed to refer to any
nationally recognized rating agency other than S & P designated by the Corporation.
"Net Revenues" means for any particular period the amount of the excess of Revenues over
Current Expenses during such period.
"1993A Bonds" means the $[AMOUNT] Community Activity Center Revenue Bonds, Series
1993A, issued pursuant to this Indenture.
"1993B Bonds" means the $[AMOUNT] Community Activity Center Revenue Bonds, Series
1993B, issued under this Indenture.
"Operating Budget"means the annual budget adopted by the Corporation concerning the operation
of the Project and any Improvements for the each Fiscal Year, as amended by the Corporation from time
to time, and as filed with the Trustee.
"Operating and Maintenance Fund" means the fund by that name created in Section 5.04.
"Opinion of Counsel"means an opinion in writing of legal counsel, who may be counsel to the
Trustee, the County or the Corporation.
"Outstanding"or "Bonds Outstanding"means all Bonds which have been executed and delivered,
except:
(a) Bonds canceled or which have been surrendered to the Trustee for cancellation;
(b) Bonds in lieu of which other Bonds have been authenticated under Section 2.07
or 2.08;
(c) Bonds which have been redeemed as provided in Article IV (including Bonds
redeemed on a partial payment as provided in Section 3.05); and
(d) Bonds which deemed to have been paid under Article XIII.
"Owner" means any person in whose name any Bond is registered on the books maintained by
the Trustee, as registrar.
"Paying Agent" means the Trustee or any other or additional paying agent designated pursuant
to Section 10.20.
"Payment Obligations" means the obligations of the County to pay any moneys due or to
become due as provided in the Contract.
"Permitted Investments"means (i) Federal Securities; (ii) obligations of the Federal Land Bank;
(iii)obligations of the Federal Home Loan Bank;(iv)obligations of the Federal Intermediate Credit Bank;
(v) obligations of the Central Bank for Cooperatives; (vi)certificates of deposit of national or state banks
located within the State which have deposits insured by the Federal Deposit Insurance Corporation
(including the certificates of deposit of any bank acting as a depository, custodian or trustee for any
6
•
proceeds of the Bonds); provided however, that the portion of such certificates of deposit in excess of
the amount insured by the Federal Deposit Insurance Corporation,if any,shall be secured by deposit with
the Federal Reserve Bank of Charlotte, North Carolina, or with any national or state bank located within
the State, of any of the obligations included in (i), (ii), (iii), (iv) or (v) above; (vii) any bonds or other
obligations of any state of the United States or of any agency, instrumentality or local governmental unit
of such state which are rated "A" or better by Moody's or S&P; (viii) shares of a tax exempt Money
Market Fund which is restricted by its terms to investment in obligations which are not subject to the
federal alternative minimum tax and which carry the highest short-term rating of Moody's or S&P; and
(ix) any other investments permitted by the law of the state for the investment of public funds which has
approved in writing and which meet the requirements for the highest rating category of Moody's, if the
Bonds are rated by Moody's or S&P.
"Person"or "person"means natural persons,firms, associations,corporations and public bodies.
"Project" means the Community Activity Center, which includes [DESCRIPTION ON PROJECT]
and the land on which it is built.
"Record Date" means the 15th calendar day (whether or not a Business Day) of the month
immediately preceding an Interest Payment Date.
"Registrar"means the financial institution serving as Paying Agent.
"Reserve Fund" means the fund created pursuant to Section 5.05.
"Reserve Requirement"means the lesser of(a) the Maximum Annual Debt Service on Outstanding
Bonds, (b) 125% of the Average Annual Debt Service on Outstanding Bonds or (c) $
"Revenues"means all receipts,revenues, income,gifts and other moneys received by or on behalf
of the Corporation from the ownership, operation or disposition of the Project or any Improvements and
all rights to receive the same whether in the form of accounts receivable, contract rights, chattel paper,
instruments, general intangibles or other rights and the proceeds thereof and of any insurance thereon or
condemnation or similar awards, whether now existing or hereafter coming into existence and whether
now owned or held or hereafter acquired by the Corporation and all amounts received or receivable from
the investment of deposit of moneys in any fund under the Indenture; provided, however, that there is
excluded from "Revenues" gifts, grants, bequests, donations and contributions heretofore or hereafter
made, designated at the time of making thereof by the donor or maker as being for certain specified
purposes inconsistent with the application thereof to the payment of amounts due under this Indenture and
any income derived therefrom to the extent required by such designation or restrictions.
"S&P"means Standard&Poor's Ratings Group, a corporation organized and existing under the
laws of the State of New York, its successors and their assigns, and, if such corporation for any reason
no longer performs the function of a securities rating agency, "S&P" will be deemed to refer to any
nationally recognized securities rating agency other than Moody's designated by the Corporation. F'
"Site" means [DESCRIBE].
"State"means the State of North Carolina.
I.;
"Trustee"means First Union National Bank of North Carolina, a banking corporation, organized
and existing pursuant to the laws of the United States, as trustee, and any successor trustee at the time
serving as such hereunder.
"Trustee Representative" means the person or persons at the time designated to act on behalf of
the Trustee for purposes of performing any act on behalf of the Trustee under the Indenture by a written
certificate furnished to the County and the Corporation containing the specimen signature of such person
or persons and signed on behalf of the Trustee by any duly authorized officer of the Trustee.
"Trust Estate" means all property and rights conveyed by the Corporation under the Granting
Clauses of this Indenture.
Section 1.02. Interpretations. For purposes of this Indenture:
(a) Successors. References to specific persons, positions or officers include those
who or which succeed to or perform their respective functions, duties or responsibilities.
(b) Laws. References to the Code, or to the laws or Constitution of the State, or
rules or regulations thereunder, or to a section, division, paragraph or other provision thereof,
include those laws and rules and regulations, and that section, division, paragraph or other
provision thereof as from time to time amended, modified, supplemented, revised or superseded,
provided that no such amendment, modification, supplementation, revision or supersession shall
be applied to alter the obligation to pay the principal,premium, if any, or interest due and owing
on the Bonds Outstanding in the amount and manner, at the times, and from the sources provided
in this Indenture.
(c) Singular/Plural. Unless the context otherwise indicates, words importing the
singular number include the plural number and words importing the plural number include the
singular number.
(d) Computations. Unless otherwise provided in this Indenture or the facts are then
otherwise, all computations required for the purposes of this Indenture shall be made on the
assumptions that: (i) all Payment Obligations shall be paid as and when the same become due;
and (ii) all credits required by this Indenture to be made to any fund or account shall be made
in the amounts and at the times required.
(e) Exclusion of Bonds Held by or for the County and the Corporation. In
determining whether the registered owners of the requisite principal amount of Bonds Outstanding
have given any request, demand, authorization, direction, notice, consent or waiver hereunder,
Bonds owned by the County and the Corporation shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected in relying upon
any such request,demand, authorization,direction,notice, consent or waiver, only Bonds which
the Trustee knows to be so owned shall be disregarded.
(f) Certificates and Opinions. Except as otherwise specifically provided in this
Indenture, each certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture includes an identification of any certificates or opinions relied on
in such certificate or opinion, and a statement: (i) that the person making the certificate or
opinion has read the covenant or condition and the definitions herein relating thereto; (ii) as to
the nature and scope of the examination or investigation upon which the statements or opinions
8
contained in the certificate or opinion are based; (iii) that in the opinion of such person, he or
she has made such examination and investigation as is necessary to enable him or her to express
an informed opinion as to whether the covenant or condition has been complied with; and (iv)
as to whether, in the opinion of such person, the condition or covenant has been complied with.
(g) Counsel Opinions. Any opinion of counsel may be qualified by reference to the
constitutional powers of the United States of America and the State, the police and sovereign
powers of the State,judicial discretion, and bankruptcy, insolvency, reorganization moratorium
and other laws affecting creditors' rights and similar matters.
(h) Consolidated Certifications, Opinions and Instruments. When several matters are
required to be certified by, or covered by an opinion of, any specified person, it is not necessary
that all such matters be certified by, or covered by the opinion of, only one such person, or that
they be so certified or covered by only one document, but one such person may certify or give
an opinion with respect to some matters and one or more other such persons as to other matters,
and any such person may certify or give an opinion as to such matters in one or several
documents. When any person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments under this Indenture,
such instruments may, but need not, be consolidated and form one instrument.
(i) Opinions and Certifications of the County and the Corporation. Any certificate
or opinion of an officer of the County or the Corporation may be based, insofar as it relates to
legal matters, on a certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or opinion is based
are erroneous. Any such certificate or opinion may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or officers of the
Corporation or the County stating that the information with respect to such factual matters is in
the possession of the County or the Corporation, unless such officer knows, or in the exercise
of reasonable care should know, that the certificate or opinion or representations with respect to
such factual matters are erroneous.
(j) References to Indenture. The terms "herein," "hereunder," "hereby," "hereto,"
"hereof" and any similar terms refer to this Indenture as a whole and not to any particular article,
section or,subdivision hereof; and the term "heretofore" means before the date of execution of
this Indenture, the term "now" means at the date of execution of this Indenture, and the term
"hereafter" means after the date of execution of this Indenture.
(k) Section and Article References. References in this Indenture to Section or Article
numbers, without added references to other documents, are to the indicated Sections or Articles
in this Indenture.
(1) Gender. Words of the masculine gender include correlative words of the
feminine and neuter genders.
(m) Captions. The captions or headings of this Indenture and the table of contents
appended to copies hereof are for convenience only and in no way define, limit or describe the
scope or intent of any provisions, articles or sections of this Indenture.
9
32.
(n) Consent. If one person becomes the registered owner of all of the Outstanding
Bonds and this Indenture requires the consent of the Trustee for a particular purpose, then the
consent of that person will be required in lieu of the consent of the Trustee for that purpose.
(o) Remedies. Nothing expressed or implied in this Indenture is intended or shall be
construed to confer on or to give any Person, other than the County, the Trustee, the Paying
Agent, the Corporation, and the Owners, any right, remedy or claim under or by reason of this
Indenture or any covenant, agreement, condition or stipulation hereof.
[End of Article I]
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33
ARTICLE II
AUTHORIZATION, TERMS, EXECUTION
AND DELIVERY OF BONDS
Section 2.01. Authorized Amount of Bonds;Execution and Delivery. No Bonds may be issued
under this Indenture except in accordance with this Article II. The aggregate principal amount of 1993A
Bonds that may be issued is $[AMOUNT OF 1993A BONDS], and the aggregate principal amount of the
1993B Bonds that may be issued is $[AMourrr OF 1993B BONDS].
In order to provide moneys for deposit in the funds and accounts created hereunder, the Bonds
shall be issued, sold and delivered hereunder.
The Bonds shall be delivered in fully registered form and in Authorized Denominations, in
substantially the form as provided in Exhibit A hereto. The Bonds will be lettered "R-," and will be
numbered separately from 1 consecutively upward. The 1993A Bonds shall mature'(subject to the right
to purchase and of prior redemption as hereinafter set forth) on December 1, 1995 through December 1,
[DATE OF MATURITY] as set forth in Section 2.03, and the 1993B Bonds shall mature on
December 1, 1995.
Section 2.02. Details of Bonds; Payment.
(a) The Bonds will initially all be dated the as of December 1, 1993, and Bonds
executed in exchange for or on the registration of transfer of Bonds will be dated as of the
Interest Payment Date preceding the day of authentication thereof, unless the date of such
authentication is an Interest Payment Date to which interest on the Bonds has been paid in full
or duly provided for in accordance with the terms of this Indenture, in which case they will be
dated as of such Interest Payment Date; except that if, as shown by the records of the Paying
Agent, interest on the Bonds is in default, Bonds executed and delivered in exchange for or upon
registration of transfer of Bonds will be dated as of the date to which interest on the Bonds has
been paid in full. If no interest has been paid on the Bonds, Bonds executed and delivered in
exchange for or upon the registration of transfer of Bonds will be dated as of December 1, 1993.
(b) Principal of and premium, if any, on the Bonds will be payable at the principal
office of the Paying Agent. Payment of the principal of and premium, if any, on the Bonds will
be made on the presentation and surrender of such Bonds as the same will become due and
payable. Payment of the interest on each Bond will be made by the Paying Agent on each
Interest Payment Date to the person appearing as the Owner thereof as of the close of business
on the Record Date preceding the Interest Payment Date, by check mailed to such Owner at his
address as it appears on the registration books maintained by the Registrar or at such other
address as is furnished in writing by such Owner to the Registrar.
Section 2.03. Interest Rate Provisions.
The Bonds shall bear interest(computed on the basis of a 360-day year of twelve 30-day months
and payable on each Interest Payment Date until the principal of the Bonds has been paid in full or duly
provided for The 1993A Bonds shall mature and bear interest as follows:
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3L
1993A BONDS
MATURITY MATURITY
DATE PRINCIPAL INTEREST DATE PRINCIPAL INTEREST
(DECEMBER 1) AMOUNT RATE iDCCEMBER 1) AMOUNT RATE
The 1993B Bonds shall bear interest at the rate of % per annum.
Section 2.04. Execution of the Bonds. The manual or facsimile signature of a duly authorized
officer of the Corporation shall appear on each Bond. Any Bond shall be deemed to have been executed
by a duly authorized officer of the Corporation if signed by a Corporation Representative, but it shall not
be necessary that the same officer sign all of the Bonds executed and delivered hereunder. In addition,
each Bond shall be authenticated by the manual or facsimile signature of an authorized officer of the
Paying Agent and shall have a facsimile of the corporation's seal and of the seal of the Paying Agent
affixed thereto. If any official of the Paying Agent or the Corporation whose signature appears on the
Bonds ceases to be such official before delivery of the Bonds, such signature is nevertheless valid and
sufficient for all purposes, the same as if he had remained in office until delivery.
Section 2.05. Authentication. No Bond is valid or obligatory for any purpose or entitled to
any security or benefit hereunder unless and until executed and authenticated in the manner prescribed
by Section 2.04, and such execution and authentication of any Bond are conclusive evidence that such
Bond has been properly executed and delivered hereunder.
Section 2.06. Delivery of the Bonds. On the execution and delivery of this Indenture, the
Paying Agent shall deliver the Bonds in the aggregate principal amount of$ . Before the
delivery by the Paying Agent of any of the Bonds, there shall be filed with the Trustee:
(a) An originally executed counterpart of the Contract; a certified copy of the
resolution adopted by the governing body of the County, approving the Contract; and a certified
copy of the resolution adopted by the Corporation, approving the Contract;
(b) An original executed counterpart of this Indenture;
(c) An original, executed Deed of Trust; and
(d) An original, executed opinion of Bond Counsel.
Section 2.07. Mutilated, Lost, Stolen, or Destroyed Bonds. If any Bond is mutilated, lost,
stolen, or destroyed, a new Bond may be executed on behalf of the Corporation, of like date,
denomination and series as that mutilated, lost, stolen,or destroyed; provided that the Paying Agent has
received indemnity from the owner of the Bond satisfactory to it and provided further, for any mutilated
Bond, that such mutilated Bond if first surrendered to the Paying Agent, and for any lost, stolen or
destroyed Bond, that there if first furnished to the Paying Agent evidence of such loss, theft, or
destruction satisfactory to the Paying Agent. If any such Bond has become subject to the redemption,
instead of delivering a duplicate Bond, the Paying Agent may pay the same without surrender thereof.
The Paying Agent may charge the Owner of the Bond with its reasonable fees and expenses in this
connection.
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•
Section 2.08. Registration of Bonds; Persons Treated as Owners; Transfer of Bonds. Books
for the registration of Bonds shall be kept by the Paying Agent which is hereby appointed the registrar.
On surrender for registration of transfer of a Bond at the principal corporate trust office of the Paying
Agent, duly endorsed for transfer or accompanied by an assignment duly executed by the Owner or its
attorney duly authorized in writing, the Paying Agent shall authenticate and deliver in the name of the
transferee or transferees a new fully registered Bond or Bonds of the same series.
All Bonds shall be exchangeable on the presentation and surrender thereof at the principal
corporate trust office of the Paying Agent for a Bond or Bonds in other Authorized Denominations of the
same series.
As to any Bond, the person in whose name the same is registered shall be deemed and regarding
as the absolute owner thereof for all purposes, and payment of either principal or interest on such Bond
shall be made only to or on the written order of the Owner thereof or its legal representative, but such
registration may be changed as hereinabove provided. All such payments shall be valid and effectual to
satisfy and discharge such Bond to the extent of the sum or sums paid.
The Paying Agent shall require the payment, by any Owner requesting registration of transfer or
exchange of Bonds, of any tax, fee or other governmental charge required to be paid with respect to such
registration of transfer or exchange. The Paying Agent is not required to register.the transfer of or
exchange any Bonds selected, called or being called for redemption in whole or in part.
Section 2.09. Cancellation of Bonds. Whenever any outstanding Bonds are delivered to the
Paying Agent for cancellation pursuant to this Indenture, on payment thereof or for or after replacement
pursuant to Section 2.07, such Bonds shall be promptly cancelled and burned or otherwise destroyed by
the Paying Agent, and counterparts of a certificate of destruction evidencing such burning or other
destruction shall be furnished by the Paying Agent to the Corporation.
Section 2.10. Temporary Bonds. Pending preparation of definitive Bonds, there may be
executed, and on request of the Corporation, the Paying Agent shall deliver, in lieu of definitive Bonds
and subject to the same limitations and conditions as such definitive Bonds, temporary typewritten,
printed, engraved or lithographed Bonds, in the form of registered Bonds without coupons in Authorized
Denominations, substantially in the form of Exhibit A and Exhibit B hereto, with such appropriate
omissions, insertions and variations as may be required with respect to such temporary Bonds.
If temporary Bonds are executed and delivered, the Corporation shall cause the definitive Bonds
to be prepared and to be executed and delivered, and the Paying Agent, on presentation to it at its
principal corporate trust office of any temporary Bonds, shall cancel such Bonds and authenticate and
deliver in exchange therefor at the place designated by the owner, without charge to the owner thereof,
a definitive Bond or Bonds of an equal aggregate principal amount. Until so exchanged, the temporary
Bonds shall in all respects be entitled to the same benefit and security of this Indenture as the definitive
Bonds to be issued and authenticated hereunder.
Section 2.11. Additional Bonds. If at any time the Corporation determines it desires to do so,
the Corporation may provide for the issuance of, and sale, a Series of Additional Bonds in such principal
amounts as it estimates will be needed for the purpose of(i)paying all or any portion of the Cost of
Improvements or(ii) refunding any or all of the Bonds outstanding. The issuance and sale of any series
of Additional Bonds shall be subject to the following conditions precedent:
• (a) The Corporation is in compliance with all covenants in this Indenture;
13
4
3Lc
(b) The Corporation executes a supplemental indenture setting forth the terms and
conditions for the Additional Bonds;
(c) The Trustee has received a certificate of the Corporation showing:
(i) For the current and each future Fiscal Year and Maximum Annual Debt
Service with respect to all Bonds then Outstanding and Additional Bonds reasonably
expected to be outstanding following the issuance of the Additional Bonds;
(ii) That (A) the Net Revenues for any twelve consecutive calendar months
out of the preceding eighteen calendar months are at least 1.20 times the average annual
Maximum Annual Debt Service for any Fiscal Year thereafter on account of the
outstanding Bonds and(B) the projected Net Revenues for the Fiscal Year following the
completion of any Improvements to be financed from the proceeds of such series of
Additional Bonds are at least 1.20 times the average annual Maximum Annual Debt
Service for any Fiscal Year thereafter on account of the then outstanding Bonds and the
Additional Bonds then to be issued.
(d) The Trustee has received an Opinion of Bond Counsel that concludes,in part,that
the Series of Additional Bonds are valid, legal-and binding obligations of the Corporation in
accordance with their terms and that the issuance of the series of Additional Bonds will not affect
the federal income tax status of interest on outstanding 1993A Bonds.
[End of Article II]
14
31
•
ARTICLE III
CALL AND REDEMPTION AND PURCHASE OF BONDS PRIOR TO MATURITY
Section 3.01. Extraordinary Redemption. If(1)the Project or any portion thereof is destroyed
or is damaged by fire or other casualty; (2) title to or the temporary or permanent use of the Project or
any portion thereof or the estate of the Corporation in the Project or any portion thereof is taken under
the power of eminent domain by any governmental authority; or (3) a material defect in construction of
the Project becomes apparent and all of the net proceeds of insurance or condemnation therefrom are not
applied to Improvements, the Bonds are subject to redemption at the option of the Board in whole or in
part on any date to the extent of the net proceeds not so applied. Bonds called for redemption under this
Section 3.01 shall be deemed at a redemption price of 100% of the principal amount of such Bonds to
be so redeemed plus accrued interest to the redemption date.
Section 3.02. Optional Redemption. The 1993B Bonds and the 1993A Bonds maturing on or
before December 1, , are not subject to call and redemption prior to maturity at the option of the
Corporation. The 1993A Bonds maturing after December 1, may be redeemed prior to their
maturities,at the option of the Corporation,from any funds that may be available for such purpose, either
in whole at any time after December 1, or in part on December 1, or on any Interest
payment Date thereafter. 1993A Bonds called for redemption under this Section 3.02 shall be redeemed
at a redemption price (expressed as percentages of the principal amount of such Series Bonds to be so
redeemed) set forth in the following table plus accrued interest to the redemption date:
PERIOD REDEMPTION
BOTH DATES INCLUSIVE) PRICE
December 1, 200_through November 30, 200
December 1, 200 through November 30, 200_
December 1, 200 and thereafter %
Section 3.03. Mandatory Sinking Fund Redemption. The 1993A Bonds are subject to
mandatory sinking fund redemption prior to maturity in part, with the 1993A Bonds to be redeemed being
selected by lot by the Paying Agent in such manner as the Paying Agent may determine, at the
redemption price of 100% of the principal amount thereof plus accrued interest to the date fixed for
redemption, without premium, in amounts and on the dates as follows:
REDEMPTION DATE PRINCIPAL REDEMPTION DATE PRINCIPAL
(DECEMBER 1) AMOUNT (DECEMBER 1) AMOUNT
*Maturity
The 1993B Bonds are subject to mandatory sinking fund redemption prior to maturity in part
with the 1993B Bonds to be redeemed being selected by lot by the Paying Agent in such manner as the
Paying Agent may determine, at the redemption price of 100% of the principal amount thereof plus
15
accrued interest to the date fixed for redemption, without premium, in the amount of $200,000 on
December 1, 1994.
Section 3.04. Call and Redemption;Notice of Redemption. The Corporation may by resolution
direct the call and optional redemption of Bonds by the Paying Agent in such amounts as there are funds
available for use in the Bond Fund and shall give notice to the Paying Agent of the redemption at least
60 days before the redemption date.
Notice of redemption prior to maturity shall be given by Mail not less than 30 nor more than 60
days before the date of redemption; (i) to the original purchaser(s) of the Bonds and (ii) to each Owner
at the address shown on the registration books of the Registrar. Neither the failure to mail the notice nor
any defect in any notices mailed shall affect the sufficiency of the proceedings for the redemption of any
Bonds as to which no such defect or failure occurred. The notice of redemption shall (a) state the
redemption date; (b)state the redemption price; (c)state the numbers of the Bonds to be redeemed unless
all of the outstanding Bonds are redeemed; (d)state, as to any Bonds redeemed in part only, the numbers
of the Bonds and the principal portion thereof to be redeemed; and (e) state that interest on the principal
portion of the Bonds designated for redemption shall cease to accrue from and after the redemption date
and that on the redemption date there shall become due and payable on each of such Bonds the
redemption price for each Bond.
The actual receipt by any Owner of notice of redemption is not a condition precedent to
redemption,and failure to receive notice does not affect the validity of the proceedings for the redemption
of the Bonds or the cessation of interest on the redemption date. Notice of redemption of Bonds shall
be given by the Paying Agent on behalf of the Corporation at the expense of the Corporation.
A certificate by the Paying Agent that notice of redemption has been given in accordance with
this Indenture is conclusive as against all parties, and no Owner whose Bond is called for redemption may
object to the redemption or the cessation of interest on the date of redemption by claiming or showing
that it failed to receive actual notice of call and redemption.
Section 3.05. Redemption Deposit. Before the mailing of notice as required above, the Paying
Agent shall set aside and hold in trust within the Bond Fund, money for the purpose of and sufficient to
redeem, at the premiums, if any,payable as provided in this Indenture,the Bonds designated in the notice
of redemption. The Paying Agent shall apply the balance (i) on or after the date of redemption, to the
payment of the Bonds to be redeemed upon presentation and surrender of the Bonds or (ii) to Bonds
called for redemption but purchased by the Paying Agent under Section 3.08, or(iii)to the principal of
or interest on Bonds not called for redemption to the extent the remaining amounts exceed the amounts
necessary for payment of the Bonds called for redemption and not surrendered.
Section 3.06. Partial Redemption of Bonds;Selection of Bonds for Redemption. On surrender
of any Bond redeemed in part only,the Corporation shall execute and the Paying Agent shall authenticate
and deliver to such Owner, at the expense of the Corporation, a new Bond or Bonds of Authorized
Denominations and of the same series equal in aggregate principal amount to the unredeemed portion of
the Bond surrendered and of the same interest rate and same maturity.
Whenever less than all of the outstanding Bonds maturing on any one date are called for
redemption at any one time, the Bonds to be redeemed shall be selected from the outstanding Bonds by
the Corporation and within maturity by lot as the Paying Agent may determine.
16
Section 3.07. Effect of Redemption. Notice of redemption having been duly given as provided
above, and moneys for payment of the principal of, premium, if any, and interest payable on redemption
of the Bonds being set aside as provided above,the Bonds, or parts thereof, called for redemption shall,
on the redemption date, become due and payable at the redemption price specified in the notice. Interest
on the Bonds, or parts thereof, as the case may be, called for redemption shall cease to accrue. The
Bonds, or parts thereof, redeemed shall cease to be entitled to any lien, benefit or security under this
Resolution,and Bondowners shall have no rights except to receive payment of the redemption price,and,
in the case of partial redemption of Bonds, also to receive a new Bond or Bonds for the unredeemed
balance as provided above.
Section 3.08. Purchase of Bonds. The Paying Agent, at the direction of and on behalf of the
Corporation, is hereby further authorized to purchase Bonds on the open market at any time at a price
not to exceed the principal amount of the Bonds and accrued interest, if any, to the date of purchase plus
brokerage fees, if any, from funds made available to the Paying Agent by the Corporation.
In lieu of redemption, the Paying Agent, at the direct of and on behalf of the Corporation, is
hereby authorized to purchase Bonds on the open market at any time before the redemption date at a price
not to exceed the principal amount of the Bonds plus the applicable premium and accrued interest, if any,
to the date of purchase, from funds available therefor in the Bond Fund, plus brokerage fees, if any, to
be paid by the Corporation.
[End of Article III]
• 17
y-o
ARTICLE IV
CONSTRUCTION FUND
Section 4.01. Creation of Construction Fund. The Trustee shall create and maintain a special
fund hereby designated "The CAC Construction Fund" (the "Construction Fund"), to the credit of which
there shall be deposited the proceeds of the Bonds(other than accrued interest)required to be so deposited
by Article VI and all other moneys received by the Corporation from any other source for financing the
Cost of the Project.
The moneys in the Construction Fund shall be held in trust and applied to the payment of the Cost
of the Project and, pending such application, shall be subject to a lien and charge in favor of the Owners
and shall be held for the future security of such Owners until paid out and transferred as herein provided.
Section 4.02. Payments from Construction Fund. Payment of the Cost of the Project shall be
made from the Construction Fund as herein provided. All payments from the Construction Fund shall
be subject to the provisions and restrictions set forth in this Section, and the Corporation covenants that
it will not cause or permit to be paid from the Construction Fund any sums except in accordance with
the provisions and restrictions set forth in this Section.
Section 4.03. Items of firsts. For the purpose of this Resolution,the Cost of the Project shall
embrace all costs of acquiring, constructing and equipping the Project and all other items of cost incident
to such acquisition, construction and equipping and the financing thereof and, without intending thereby
to limit or restrict any proper definition of such Cost under the Act or any other applicable law, shall
include:
(1) payment of the Corporation of such amounts, if any, as are necessary to
reimburse the Corporation in full for all advances and payments made by it or for its account,
with respect to the Project for expenditures in connection with the acquisition of any property
required for the Project,the preparation of the plans and specifications(including any preliminary
study or planning of the Project), or any aspect thereof and any reports or analyses concerning
the Project, and all real or personal property deemed necessary in connection with the Project,
or any one or more of said expenditures (including architectural, engineering and supervisory
services);
(2) the cost of acquiring by purchase, if such purchase shall be deemed expedient,
and the amount of any award of final judgment in any proceeding to acquire by condemnation
such land, property rights, rights of way, franchises, easements and other interests as may be
deemed necessary or convenient in connection with the construction and operation of the Project,
options and partial payments therein; the cost of filing, drawing or improving any lands so
acquired, and the amount of any damages incident to or consequent upon the construction and
operations of the Project; including the cost of the preparation of the plans and specifications
(including any preliminary study or planning of the Project,or any aspect thereof and any reports
or analyses concerning the Project, and all real or personal property deemed necessary in
connection with the Project, or any one or more of said expenditures (including architectural,
engineering and supervisory services);
(3) payment for labor, services, materials and supplies used or furnished in the
acquisition and construction of the Project, all as provided in the plans and specifications,
payment for the cost of the acquisition, construction and installation of facilities and equipment,
18
•
and all real and personal property deemed necessary in connection with the Project and payment
for the miscellaneous expenses incidental to any of the foregoing items;
(4) payment of any other costs and expenses relating to the (i) acquisition and
construction of the Project, including interest on the Bonds during construction of the Project,
(ii)all Costs of Issuance or(iii)administrations properly chargeable to the Project and the placing
of the Project in operation;
(5) the cost of any indemnity and surety bonds to secure deposits in the Construction
Fund, the fees and expenses of any depositary or depositaries of the Construction Fund during
construction,taxes or other municipal or governmental charges lawfully levied or assessed during
construction upon the Project or any property acquired therefor, and premiums on insurance, if
any, in connection with the Project, during construction; and
(6) interest on the Bonds before the Completion Date.
Section 4.04. Requisitions for Payment from Construction Fund. Payments from the
Construction Fund shall be made in accordance with the provisions of this Section. The Corporation shall
authorize payments from the Construction Fund upon requisition or invoice for such payment to be made,
the amount to be paid, the name of the person, firm or corporation to whom payment is due and the
purpose for which the obligation to be paid was incurred; provided, however, that no such authorization
shall be given unless and until the Corporation Representative shall have determined:
(1) that an obligation in the stated amount to be paid has been incurred, is presently
due and payable, is a proper Cost and has been previously paid;
(2) that, so far as he is aware, there has not been filed with or served on the
Corporation or any officer or agent thereof notice of any lien, right to lien or attachment upon,
or claim affecting the right to receive payment of, any of the moneys payable to any person, firm
or corporation to whom the amount is to be paid, which has not been released or will not be
released simultaneously with the payment of such obligation; and
(3) that in so far as any obligation mentioned in such requisition or invoice was
incurred for work, materials, supplies or equipment in connection with the Project, such work
was actually performed, or the materials, supplies or equipment attributable to such obligation
was actually delivered or installed at the site of the Project, or delivered for fabrication.
Section 4.05. Establishment of Completion Date. The Completion Date for the Project shall
be evidenced by a certificate signed by the Corporation Representative setting forth the Cost of the
Project and stating that, except for amounts not then due and payable or the liability for the payment of
which is being contested or disputed by the Corporation, the acquisition and construction of the Project
has been completed substantially in accordance with the plans and specifications therefor and the Cost
of the Project has been paid. Notwithstanding the foregoing, such certificate shall state that it is given
without prejudice to any rights against third parties which exist at the date of such certificate or which
may subsequently come into being.
Section 4.06. Balance in Construction Fund On the receipt by the Paying Agent of the
certificate evidencing the Completion Date accompanied by an Opinion of Counsel to the Corporation that
• there are no uncancelled mechanics', laborers', contractors' or materialmen's liens against the Project or
on file in any public office where the same should be filed in order to be valid liens against the Project,
•
19
42
and that the time within which such liens can be filed has expired, any balance remaining in the
Construction Fund (other than amounts retained to pay costs not then due and payable or for which the
liability for payment is in dispute)shall be transferred to the Paying Agent for deposit in the Bond Fund
and used for the payment of the interest on or the principal of the Bonds on the next succeeding date or
dates on which interest on or principal of the Bonds is due and payable,as the Corporation Representative
directs in writing.
[End of Article IV]
•
•
20
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ARTICLE V
REVENUE FUND; BOND FUND, MAINTENANCE RESERVE FUND; REBATE FUND
Section 5.01 Revenue Fund. The Corporation shall deposit or cause to be deposited in the
Revenue Fund all Revenues as they are received. Moneys deposited will be withdrawn by the Trustee
and applied as follows:
FIRST: As the cash portion of Revenues is received in each month, to the Operating and
Maintenance Fund (i) an amount such that the aggregate amount deposited therein each month
equals 1/12th of the Operating Expenses shown in the Operating Budget for the current Fiscal
Year plus (ii) all amounts due under (i) in preceding months that were not transferred because
of an insufficiency in the Revenues therefor;
SECOND: On or before the 15th day of each month, to the Paying Agent for deposit in
the Bond Fund, an amount (after taking into consideration transfers from the Construction Fund
for capitalized interest, if any, and earnings on amounts then on deposit in the Bond Fund), equal
to (i) 1/6th of the interest due on the Bonds on the next Interest Payment Date, (ii) all amounts
due as to interest on the Bonds on the 15th day of any preceding month or months which have
not otherwise been credited to the Bond, (iii) 1/12th of the principal coming due on the Bonds
on the next succeeding Bond Payment Date, and(iv) all amounts due as to principal on the Bonds
on the 15th day of any preceding month or months which have not otherwise been credited to the
Bond Fund;
THIRD: On or before the 15th day of each month, to the Reserve Fund, an amount equal
to the aggregate sum of all unreplenished withdrawals from the Reserve Fund to pay the principal
of or interest on the Bonds;
FOURTH: On or before the 15th day of each month, to the Maintenance Reserve Fund,
any amount remaining in the Revenue Fund after the transfers described in FIRST through
THIRD above.
Section 5.02. Bond Fund. There will be deposited in the Bond Fund any amounts required to
be deposited therein pursuant to this Indenture and any other amount available therefor and designated
by the Corporation to be deposited therein. The interest on the Bonds until maturity shall be paid by the
Paying Agent from the Bond Fund. At the maturity or redemption of any of the Bonds and after all
interest then due on the Bonds is paid the Bond Fund shall be applied to the payment of the principal,
and premium, if any, of the Bonds. If on any Interest Payment Date or Bond Payment Date there is a
deficiency in the Bond Fund, the amount of such deficiency will be made up from the following Funds
and in the order of priority set forth below: (i) Revenue Fund; (ii) Reserve Fund; (iii) Operating and
Maintenance Fund; and (iv) Maintenance Reserve Fund.
Section 5.03. Maintenance Reserve Fund. There will be deposited in the Maintenance Reserve
Fund any amounts required to be deposited therein pursuant to this Indenture and any other amount
available therefor and designated by the Corporation to be deposited therein. Moneys on deposit in the
Maintenance Reserve Fund shall be disbursed by the Corporation Representative (i) to pay the cost of
replacement, repair, reconstruction or restoration of the Project, (ii)to the extent that the Revenue Fund
is insufficient in any Bond Year,
to meet Y of
the obligations set t fo
rth in Section 5.01 or extent that the amount therein exceeds the amount required under Section 5.01 on the fifteenth)day of
each month, as a deposit to the Operating and Maintenance Fund or the Bond Fund.
21
Section 5.04. Operating and Maintenance Fund. There will be deposited in the Operating and
Maintenance Fund all amounts required to be deposited therein pursuant to this Indenture and any other
amounts available therefor and designated by the Corporation to be deposited therein. Amounts in the
Operating and Maintenance Fund will be(i) applied to the payment of Operating Expenses, as from time
to time requested by the Company in writing, consistent with the Operating Budget, and (ii) transferred
to the Debt Service Fund to make up any deficiency therein in accordance with the order of priorities
established in Section 5.02. In no event will the aggregate disbursements from the Operating and
Maintenance Fund in each Fiscal Year, excluding any amounts transferred to the Debt Service Fund as
provided in Section 5.02, exceed the amount provided therefor in the Operating Budget. If a payment
from the Operating and Maintenance Fund to the Bond Fund is required in accordance with the priorities
established in Section 5.02, the amount of such payment will be added to the amount otherwise required
to be paid to the Operating and Maintenance Fund.
Section 5.05. Reserve Fund. The Trustee shall deposit in the Reserve Fund all amounts required
to be deposited therein pursuant to this Indenture, any other amount available therefor and designated by
the Corporation to be deposited therein and any other amounts deposited with the Trustee for deposit in
the Reserve Fund. Trust Moneys deposited in the Reserve Fund shall be used and withdrawn by the
Trustee for the purpose of paying the last maturing principal of and the interest on the Bonds, whether
at the stated payment date or by redemption of the Bonds; provided, however, that whenever and to the
extent that moneys in the Bond Fund are insufficient for the purpose of paying principal of and interest
on the Bonds, whether or not at the redemption date therefor, moneys on deposit in the Reserve Fund
shall be withdrawn by the Trustee and used for such purposes in accordance with the order of priorities
set forth in Section 5.02. If at any time the amount on deposit in the Reserve Fund shall exceed the
Reserve Requirement, such excess shall be transferred to the Revenue Fund.
[End of Article V]
22
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ARTICLE VI
DEPOSIT AND INVESTMENT OF MONEYS IN FUNDS AND ACCOUNTS
From the proceeds of the Bonds, the Trustee shall(i) transfer the accrued interest, if any, to the
Paying Agent for deposit in the Bond Fund and (ii) deposit $[AMouNr] in the Reserve Fund and
$[AMouNT] in the Construction Fund. All moneys held in the Construction Fund, the Revenue Fund,
the Maintenance Reserve Fund and the Reserve Fund shall be invested from time to time by the Trustee
and in the Bond Fund by the Paying Agent as directed by the Corporation in Permitted Investments
subject to the following restrictions:
(a) Moneys in the Construction Fund shall be invested only in obligations which will
by their terms mature not later than the date the Corporation estimates the moneys represented
by the particular investment will be needed for withdrawal from the Construction Fund.
(b) Moneys in the Bond Fund shall be invested only in obligations which will by their
terms mature on such dates as to ensure that before the date of each interest and principal
payment, there will be in the Bond Fund from matured obligations and other moneys already in
the Bond Fund, cash equal to the interest and principal payable on such payment date.
Obligations purchased as an investment of moneys in any fund shall be deemed at all times to be
a part of such fund and the interest accruing thereon and any gain realized from an investment shall be
credited to such fund and any loss resulting from the authorized investment shall be charged to such fund
without liability to the Corporation or any officer thereof, to the Paying Agent or to the Trustee. The
Trustee or the Paying Agent, as the case may be, shall sell at the best price obtainable or present from
redemption any obligation purchased whenever it shall be necessary to do so in order to provide moneys
to meet any payment or transfer from a fund as required by this Indenture. Investments constituting a
part of all funds other than the Bond Fund shall be valued at the then estimated or appraised market value
of the investment or face amount thereof, whichever is lower. Investments constituting a part of the Bond
Fund shall be valued at the face amount thereof.
[End of Article VI]
• 23
ARTICLE VII
GENERAL COVENANTS
Section 7.01. Payment of Revenues and Principal and Interest, Pledge of Trust Estate;
Limited Liability. The Corporation covenants that it will promptly pay to the Trustee the Revenues and
to.the Owners the principal and interest represented by every Bond executed and delivered under this
Indenture at the place, on the dates and in the manner provided herein and in the Bonds, provided that
the principal, premium, if any, and interest are payable by the Corporation solely from the Trust Estate,
and nothing in the Bonds or this Indenture will be considered as assigning or pledging any other funds
or assets of the Corporation or the County other than the Trust Estate. The Trust Estate is hereby
pledged and assigned as security for the equal and ratable payment of the Bonds and will be used for no
other purpose than to pay the principal of, premium, if any, and interest on the Bonds, except as may
be otherwise expressly authorized in this Indenture or the Contract.
No recourse will be had for the payment of the principal or interest represented by any of the
Bonds or for any claim based thereon or on any obligation, representation, covenant, agreement or
warranty contained in this Indenture, against any past,present or future officer, employee or agent of the
Corporation, or any successor corporation, as such, either directly or through the Corporation or any
successor corporation, under any rule of law or equity, statute or constitution or by the enforcement of
any assessment or penalty or otherwise, and all such liability of any such officer, employee or agent as
such is hereby expressly waived and released as a condition of and in consideration of execution of this
Indenture and the execution and delivery of the Bonds.
Section 7.02. Complete the Project and any Improvements. The Corporation covenants and
agrees that it will cause to be diligently carried out and continued to completion in a sound and
economical manner, with all practicable dispatch, the construction of the Project and any Improvements
financed with the proceeds of Additional Bonds.
Section 7.03. Use of Proceeds, Ownership, Management and Operation of Properties. The
Corporation covenants and agrees that the proceeds of the sale of the Bonds will be deposited and used
as provided in this Indenture; that it has, or will have as to the Project or any Improvements, title in fee
simple to the Site; and that it will cause to be managed, maintained and operated all properties owned
by it comprising any part of the Project or any Improvements in a sound and businesslike manner and
that all necessary repairs, renewals and replacements thereto will be made.
Section 7.04. No Priority. The Corporation covenants and agrees that it will not issue any
obligations payable, either as to principal or interest, from the Net Revenues which have any lien on the
Revenues prior or superior to the lien established under this Indenture and it will not issue any obligations
payable as to principal or interest from the Net Revenues, which have any lien on the Revenues on a
parity with the Bonds except as authorized herein.
Section 7.05. Punctual Payment. The Corporation covenants and agrees that it will duly and
punctually pay or cause to be paid the principal of and interest on each of the Bonds on the date, at the
place and in the manner provided in the Bonds.
Section 7.06. Payment of Taxes and Other Charges. The Corporation covenants and agrees
that it will from time to time pay and discharge, or cause to be paid and discharged, all payments in lieu
of taxes, service charges, assessments or other governmental charges which may lawfully be imposed on
the Corporation or any portion of the Project or any Improvements, or on the Revenues from it, and will
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•
pay all lawful claims for labor, materials and supplies which if unpaid might become a lien or charge on
any of the properties, revenues or income or which might impair the security of the Bonds or the use of
Net Revenues or other legally available funds to pay the principal of the Bonds;provided, however, that
nothing in this covenant shall require the Corporation to make any such payment so long as the
Corporation in good faith shall contest the validity of the payment.
Section 7.07. Books and Accounts; Financial Statements. The Corporation covenants and
agrees that it will at all times keep, or cause to be kept, proper and current books and accounts (separate
from all other records and accounts) in which complete and accurate entries shall be made of all
transactions relating to the Project and any Improvements and the Revenues relating to the Project and
any Improvements. The Corporation(i) will prepare within 180 days after the close of each of its Fiscal
Years complete financial statements for the year, in reasonable detail covering the Revenues, (ii) will
furnish, as soon as it is available to the Corporation, an opinion of a nationally recognized firm of
independent certified public accountants appointed by the Corporation as to the financial statements, and
(iii) will furnish a copy of such statements and opinion to the Trustee and, on written request, to any
Bondowner.
Section 7.08. Eminent Domain Proceeds. The Corporation covenants and agrees that if all or
any part of the Project should be taken from it without its consent, by eminent domain proceedings or
other proceedings authorized by law, it shall either (i) deposit the net proceeds in the Bond Fund or
(ii) apply the net proceeds to Improvements.
Section 7.09. Performance of Covenants by Corporation; Authority; Due Execution. The
Corporation covenants that it will faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions contained in this Indenture, in any and every Bond executed,authenticated and
delivered hereunder and in all of its proceedings pertaining hereto. The Corporation covenants that it
is duly authorized under the constitution and laws of the State, including particularly the Act, to cause
the Bonds to be issued and delivered and to execute this Indenture. The Corporation further covenants
that all action on its part for the execution and delivery of this Indenture and the Bonds has been duly
and effectively taken, and that the Bonds in the hands of the Owners thereof are and will be valid and
enforceable according to the terms thereof and hereof.
Section 7.10. Recording and Filing; Instruments of Further Assurance. The Corporation
covenants that it will do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged
and delivered, such indentures supplemental hereto and such further acts, instruments and transfers as
may reasonably be required for the better assuring, transferring, pledging, assigning and confirming to
the Trustee all and singular the rights assigned hereby and the amounts pledged hereby to the payment
of the principal and premium, if any, and interest evidenced by the Bonds.
Section 7.11. Recording and Filing;Further Instruments. The Trustee will cause to be filed
all financing statements related to this Indenture and all supplements hereto, and such other documents
as may be, in the opinion of counsel acceptable to the Trustee, necessary to be kept and filed in such
manner and in such places as may be required by law in order to preserve and protect fully the security
of the Owners and the rights of the Trustee hereunder. The Corporation will, on the reasonable request
of the Trustee, execute and deliver such further instruments and take such further action as may be
reasonable and as may be required to effectuate the purposes of this Indenture.
Section 7.12. No Disposition of Trust Estate. Except as permitted by this Indenture, the
• Corporation will not sell, lease, pledge, assign or otherwise encumber or dispose of its interest in the
25
(6.
Trust Estate and will promptly pay or cause to be discharged, or make adequate provision in the judgment
of the Trustee to discharge, any lien or charge on any part thereof not permitted hereby.
Section 7.13. Access to Books. All books and documents in the possession of the Corporation
or the Trustee relating to the Project and any Improvements and the Trust Estate will at all reasonable
times be open to inspection by such accountants as the Corporation or the Trustee may from time to time
designate.
Section 7.14. Covenants as to Corporate Existence, Maintenance of Project and any
Improvements, Insurance, Etc. The Corporation hereby covenants to:
(a) preserve its corporate existence, and all its rights and licenses to the extent necessary
in the operation of its business and affairs and be qualified to do business in each jurisdiction
where the conduct of its business requires such qualification and where the failure to so qualify
would have a material adverse impact on its operation; provided, however, that nothing herein
contained shall be construed to obligate it to retain or preserve any of its rights or licenses no
longer used or, in the reasonable judgment of the Corporation,determined to be no longer useful
in the conduct of its business;
(b) at all times cause its business to be carried on and conducted in an efficient manner;
(c) prevent the use of the Project and any Improvements in an unrelated trade or
business as defined in Section 513(a) of the Code or by any nonexempt person, in either case in
such manner or to such extent as would result in interest on the 1993A Bonds becoming
includable in gross income for federal income tax purposes;
(d) conduct its affairs and carry on its business and operations in such manner as to
comply with any and all applicable laws of the United States of America and the several states
thereof and duly observe and conform to all valid orders, regulations or requirements of any
governmental authority material to the conduct of its business; provided, nevertheless, that
nothing herein contained shall require it to comply with, observe and conform to any such law,
order, regulation or requirement so long as the validity thereof shall be contested in good faith
by appropriate proceedings which shall operate during the pendency thereof to stay the
enforcement thereof and it will not subject the Trustee to the risk of any liability and it will save
the Trustee harmless against any losses as a result of such contest;
(e) pay or otherwise satisfy and discharge all of its obligations and indebtedness and all
demands and claims against it as and when the same become due and payable, other than any
thereof whose validity, amount or collectibility is being contested by it in good faith by
appropriate proceedings which shall operate during the pendency thereof to prevent the collection
of or other realization upon the item so contested and it will not subject the Trustee to the risk
of any liability and it will save the Trustee harmless against any losses as a result of such contest;
(t) at all times comply with all terms, covenants and provisions contained in any
mortgages or instruments securing any of its indebtedness and pay or cause to be paid, or to be
renewed, refunded or extended by it, all bonds, notes or other evidences of indebtedness secured
by any such mortgage or lien, as and when the same shall become due and payable;
(g) preserve its corporate existence,and all its rights and licenses to the extent necessary
in the operation of its business and affairs and be qualified to do business in each jurisdiction
26
4q
where its ownership of the Project and any Improvements or the conduct of its business requires
such qualification and where the failure to so qualify would have a material adverse impact on
its operation; provided, however, that nothing herein contained shall be construed to obligate it
to retain or preserve any of its rights or licenses no longer used or, in the reasonable judgment
of the Corporation, determined to be no longer useful in the conduct of its business;
(h) at all times cause the Project and any Improvements and each part thereof to be
maintained,preserved and kept in good condition,repair and working order,reasonable wear and
tear excepted, and all needful and proper repairs, renewals and replacements of any portion
thereof;provided,however, that nothing herein contained shall be construed(i) to prevent it from
ceasing to operate any portion of the Project and any Improvements if, in the reasonable
judgment of the Corporation, it is determined to be advisable not to operate the same for the time
being, or if it intends to sell or otherwise dispose of the same in accordance with the provisions
of this Indenture and within a reasonable time endeavors to effect such a sale or other disposition
or (ii) to obligate it to retain, preserve, repair, renew or replace any portion of the Project and
any Improvements, leases, rights, privileges or licenses no longer used or, in the reasonable
judgment of the Corporation, determined to be no longer useful in the conduct of its business;
the Project and any Improvements will at all reasonable times be subject to the inspection of the
Trustee or its representatives duly authorized in writing;
(i) comply with all present and future laws,ordinances,administrative rules,regulations
and court decisions, relating to the use or occupancy of the Project and any Improvements and
to conduct its affairs and carry on its business and operations in such manner as to comply with
any and all applicable laws of the State,the United States of America and the other states thereof
and duly observe and conform to all valid orders, regulations or requirements of any
governmental authority material to the conduct of its business and the operation of the Project and
any Improvements; provided, nevertheless, that nothing herein contained shall require it to
comply with, observe and conform to any such law, order, regulation or requirement so long as
the validity thereof shall be contested in good faith by appropriate proceedings which shall
operate during the pendency thereof to stay the enforcement thereof and the sale, forfeiture or
loss of the Project and any Improvements to satisfy the same and it will not subject the Trustee
to the risk of any liability and it will save the Trustee harmless against any losses as a result of
such contest;
(j), pay or otherwise satisfy and discharge all of its obligations and indebtedness and all
demands and claims against it as and when the same become due and payable, other than any
thereof whose validity, amount or collectibility is being contested by it in good faith by
appropriate proceedings which shall operate during the pendency thereof to prevent the collection
of or other realization upon the item so contested and the sale, forfeiture or loss of the Project
and any Improvements to satisfy the same and it will not subject the Trustee to the risk of any
liability and it will save the Trustee harmless against any losses as a result of such contest;
(k) at all times comply with all terms, covenants and provisions contained in any
mortgages or instruments evidencing any liens at any time existing upon the Project and any
Improvements or any part thereof or interests therein securing any of its indebtedness and pay
or cause to be paid, or to be renewed, refunded or extended by it, all bonds, notes or other
evidences of indebtedness secured by any such mortgage or lien, as and when the same shall
become due and payable;
(I) procure and maintain all necessary licenses and permits;
• 27
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(m) maintain, or cause to be maintained, insurance (which may include one or more
self-insurance programs)covering such risks and in such amounts as, in its judgment, is adequate
to protect it and the Project and any Improvements and its operations,which shall be not less than
the following:
(1) Insurance against loss and/or damage to the Project and any Improvements
covering such risks as are ordinarily and reasonably insured against by similar facilities,
including, without limiting the generality of the foregoing, fire, earth settlement, flood
(if applicable and available) and the risks covered under an "all risks" policy, including
Extended Coverage and Special Extended Coverage Endorsements and "Umbrella"
coverage, and against explosion of boilers, heating apparatus and other pressure vessels.
Such insurance, together with the blanket earnings and extra expense insurance below
mentioned, shall be in the amount required to pay the greater of(i) the principal of the
Bonds as they mature in the normal course of events without a default on such Bonds or
(ii) 100% of the replacement cost of the Project and any Improvements (and their
contents to the extent owned by the Corporation), and in any event, sufficient to prevent
the Corporation from becoming a co-insurer with respect to any loss, said coverage to
be endorsed with a Replacement Cost Endorsement( the amount to be reviewed annually
and increased if necessary so as to provide coverage at all times in an amount necessary
to restore the Project and any Improvements and such improvements and contents to the
condition existing just before destruction or damage);
(2) Blanket earnings and extra expense insurance, covering loss of revenues by
reason of the total or partial suspension of, or interruption in, the operation of the Project
and any Improvements caused by the damage to or destruction of any part of the Project
and any Improvements, with such exceptions as are customarily imposed by insurers
covering a period of suspension or interruption, and in such amount as will provide the
cash portion of Revenues equal to the Maximum Annual Debt Service on the Bonds
together with an amount, determined by the Manager, required to pay salaries of key
personnel of the Project and any Improvements and any other unavoidable costs during
any 12-month period of such suspension, interruption or destruction of the Project and
any Improvements or its operation;
(3) Comprehensive general liability insurance, protecting the Corporation and the
Manager, as their interests may appear, against liability for injuries to persons and/or
property, occurring on, in or about the Project and any Improvements in the minimum
amount of $1,000,000 combined bodily injury and property damage liability as
supplemented by general liability coverage under a $5,000,000 umbrella policy;
(4) Worker's compensation insurance respecting all employees of the Corporation
and all persons engaged in work at the Project and any Improvements in such amount as
is required by law;
On or before the date of issuance of the Bonds, the Corporation shall deliver, or shall cause to
be delivered, to the Trustee a certificate of an independent insurance consultant, in form and
substance reasonably satisfactory to the Trustee,that evidences the Corporation's compliance with
its insurance obligations set forth in this Section. The insurance required to be maintained
pursuant hereto shall be subject to a review and procurement of certificate of an independent
insurance consultant as aforesaid at least once every three years, commencing in the first year
after the date of the Indenture, unless the Trustee requires more frequent review and provision
28
of such certificate, and the Corporation agrees that it will follow any recommendations of the
independent insurance consultant, except to the extent that its Board of Directors determines that
such recommendations are not feasible, the reasons for such determination to be set forth in an
Officer's Certificate delivered to the Trustee which states the Corporation's concurrence with
such decision. Each insurance policy provided for in this Section shall contain a provision to the
. effect that the insurance company shall not cancel the policy or modify it materially and adversely
to the interest of the Trustee, without first giving written notice thereof to the Trustee at least 30
days in advance of such cancellation or modification. All insurance policies issued pursuant to
this Section shall be deposited with the Trustee.
All such insurance shall be evidenced by valid and enforceable policies in form and substance
approved by the independent insurance consultant and acceptable to the Trustee and shall be made payable
to the Trustee by means of a standard on-contributory mortgagee clause in favor of and in form
acceptable to the Trustee and approved by the independent insurance consultant, and in the case of
liability coverage, shall name the Trustee as additional insured. All renewal or replacement policies shall
be delivered to the Trustee not less than 30 days before the expiration date of the policy to be renewed
or replaced, accompanied, if requested by the Trustee, by evidence satisfactory to the Trustee that all
premiums payable with respect to such policies have been paid in full by the Corporation.
The agent and insurer through or by which the insurance required hereunder shall be authorized
to write such insurance in the State, have a licensed resident agent in the State and have, at all times a
general policyholder's rating of A or A+ in Best's latest rating guide. Such insurance shall not be
"blanketed" with any insurance carried on property other than the Project and any Improvements without
the consent of the Trustee.
The Trustee shall have the right and is hereby constituted and appointed the true and lawful
attorney in fact, irrevocable and coupled with an interest, of the Corporation, in the name and stead of
the Corporation, but in the uncontrolled discretion of said attorney, (A) to demand, adjust, sue for,
compromise and collect any amounts due under such insurance policies in the event of loss, and (B) to
give releases for any and all amounts received in settlement of losses under such policies; provided,
however, that unless and until an Event of Default hereunder shall have occurred and be continuing, the
Corporation reserves to itself the right to take any such action, without the consent or participation of the
Trustee therein, to the extent the same involves a casualty or other loss having a value of$100,000 or
less.
If the Trustee in any manner acquires title to the Project and any Improvements, it shall then
become the sole and absolute owner of all insurance policies held by or required hereunder to be
delivered to the Trustee, with the sole right to collect and retain all unearned premiums and dividends
thereon, and the Corporation shall only be entitled to a credit in the amount of the short rate cancellation
refund.
In the event of foreclosure of the Deed of Trust and the transfer of title to the Project and any
Improvements to a third-party purchaser, all right, title and interest of the Corporation in and to such
insurance policies or to any refund or return of premiums or dividends with respect thereto shall pass to
the Trustee, and the Trustee shall have the tight, being hereby irrevocably constituted and appointed the
true and lawful attorney in fact irrevocable of the Corporation (coupled with an interest and with full
power of substitution and revocation), to surrender up the policies of insurance covering the Project and
any Improvements and to collect any amounts due thereunder or, at its option, to transfer its right, title
and interest in and to said policies and the proceeds thereof to any purchaser of the Project and any
Improvements, without obligation to account therefor to any person claiming title to the Project and any
29
30(
Improvements; provided,however, that any amounts received by the Trustee under said policies by way
of refunds, dividends or otherwise, as aforesaid, shall be applied to the payment of the principal of and
interest on the Bonds, and any surplus shall be paid over as a surplus on foreclosure.
(n) promptly notify the Trustee of the commencement of any proceeding or
investigation by or before any governmental body and of any action or proceeding in any court
or before any arbitrator against, or in any way relating adversely to, the Corporation or the
Project and any Improvements which, if adversely determined, could singly or when aggregated
with all other such proceedings, investigations and actions if adversely determined, result in the
suspension or revocation of any material license or permit required for the ownership or operation
of the Project and any Improvements by the Corporation or have a material adverse effect on the
Revenues, financial position,results of operations,fund balances or prospects of the Corporation
or the Project and any Improvements.
Section 7.15. Rate Covenant.
(a) On or before the date hereof and before the commencement of each Fiscal Year, the
Corporation will fix, establish and maintain, or cause to be fixed, established and maintained,
such rates,rentals and charges for the provision of services in the Project and any Improvements,
and revise, or cause to be revised, the same prior to the commencement of each Fiscal Year, as
necessary, as will produce the cash portion of Revenues, other than net proceeds of insurance or
condemnation awards and other extraordinary items,at least equal in such Fiscal Year to the total
of (1) Operating Expenses and contractual obligations relating to the Project and any
Improvements which are not included in the definition of Operating Expenses budgeted for such
Fiscal Year plus(ii) 120% of the aggregate of the debt service to become due during such Fiscal
Year.
(b) The Corporation will,so long as Bonds are Outstanding,within 30 days after the end
of each Fiscal Year deliver to the Trustee an Officer's Certificate reflecting the Corporation's
compliance with the rate covenant.
(c) If the Corporation is unable to comply with the rate covenant, the Corporation will,
at least 90 days after the end of each Fiscal Year and with the approval of the Trustee cause a
consultant to submit a report to the Trustee showing for the next Fiscal Year the projected cash
portion of Revenues, other than net proceeds of insurance or condemnation awards and other
extraordinary items, debt service, Operating Expenses and contractual obligations relating to the
Project and any Improvements which are not included in the definition of Operating Expenses
budgeted for such Fiscal Year and setting forth the recommendation of the Consultant for the
revision of rates, rentals and charges, if necessary, in order to satisfy the covenant set forth in
paragraph(a). The Corporation shall,within 180 days after the date of submission to the Trustee
of the consultant's report described in the preceding sentence, cause a Consultant to submit a
followup report to the Trustee to determine the Corporation's compliance with the
recommendation of the consultant's initial report.
Section 7.16. Operating Budgets, The Corporation will adopt an Operating Budget covering
the fiscal operations of the Project and any Improvements for the Fiscal Year not later than the first day
of such Fiscal Year, and will file the same with the Trustee. The Operating Budget will set forth for such
Fiscal Year the estimated cash portion of Revenues, the principal of and interest on the Bonds due and
payable or estimated to become due and payable during such Fiscal Year and estimated Operating
Expenses, debt service on the Bonds in monthly allotments and itemized capital expenditures and the
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sources of payment therefor, all in reasonable detail and in any event separately stating Operating
Expenses and other payments constituting lease rentals or payments under each capital lease, installment
purchase contract or other indebtedness. The Corporation may at any time adopt and file with the Trustee
an amended Operating Budget. Copies of the Operating Budget as then amended and in effect will be
made available by the Trustee at normal business hours at the Trustee's principal corporate trust office
for inspection by any Owner. If the Corporation does not adopt an Operating Budget for a Fiscal Year
on or before the first day of such Fiscal Year, the Operating Budget for the preceding Fiscal Year(other
than with respect to capital expenditures and any new leases, installment purchase contracts and other
indebtedness of the Corporation for money borrowed other than obligations in respect of the Bonds and
obligations under which the obligee has no recourse to the Project and any Improvements or the
Revenues) will be deemed to have been adopted and be in effect for such Fiscal Year until the Operating
Budget for such Fiscal Year has been adopted as above provided.
Section 7.17. Indemnification and Nonliability of the Trustee. The Corporation covenants and
agrees, at its expense, to pay, and to indemnify and save the Trustee and its directors, officers,employees
and agents harmless from and against, any and all claims, damages, demands, expenses, liabilities and
taxes of any character or nature whatsoever, regardless of by whom imposed, and losses of every
conceivable kind, character and nature whatsoever, including, but not limited to, claims arising under
federal or state securities laws or otherwise arising in connection with the offer or sale of the Bonds, or
claims for loss or damage to any property or injury to or death of any person, asserted by or on behalf
of any person, and arising out of, resulting from or in any way connected with the Project and any
Improvements or the conditions, occupancy, use, possession, conduct or management of, or any work
done in or about the Project and any Improvements.
The Corporation also covenants and agrees, at its expense,to pay, and to indemnify and save the
Trustee and its directors,officers,employees and agents harmless, from and against,all costs,reasonable
counsel fees, expenses and liabilities incurred in any action or proceeding brought by reason of any such
claim or demand. In the event that any action or proceeding is brought against the Trustee or their
members, directors, officers, employees or agents by reason of any such claim or demand, the
Corporation, upon notice from the Trustee, covenants to resist and defend such action or proceeding on
demand of the Trustee or its directors, officers, employees or agents. Notwithstanding the foregoing,
neither the Trustee nor its directors, officers, employees and agents shall be indemnified against liability
for damage arising out of bodily injury to persons or damage to property caused by its own negligence
or willful and malicious acts or omissions or negligence or willful and malicious acts or omissions of its
own members, directors, officers, agents or employees.
The Corporation also covenants and agrees, at its expense, to pay, and to indemnify the Trustee
from and against all costs, expenses and charges, including reasonable counsel fees, incurred to enforce
any covenant or agreement of the Corporation contained in this Indenture.
Section 7.18. Environmental Condition of Project and any Improvements; Indemnification.
(a) The Corporation warrants and represents to the Trustee and the Owners, to the best
of the Corporation's knowledge, that: (i) the Project and any Improvements are now and at all
times hereafter will continue to be in full compliance with all federal, state and local
environmental laws and regulations, including, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), Public Law
No. 96-510, 94 Stat. 2767, 42 U.S.C. 9601 et seq, and the Superfund Amendments and
Reauthorization Act of 1986(SARA), Public Law No 99-499, 100 Stat. 1613, and (ii)(A) as of
the date hereof, there are no
hazardous substances (including without limitation, any materials
•
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containing asbestos, except, however, with respect to certain amounts of asbestos or asbestos
containing materials with respect to the Project and any Improvements only and as specifically
set forth in that certain Phase I Environmental Site Assessment prepared by [NAME OF FIRM]
and delivered to the Corporation on [DATE]) located on, in or under the Project and any
Improvements or used in connection therewith (except as may be necessary in connection with
any normal and customary use of the Project and any Improvements, which the Corporation
warrants will be stored,handled,used and disposed of properly)and(B) the Corporation has duly
disclosed to the Trustee in writing the existence, extent and nature of any such hazardous
materials, substances, wastes or other environmentally regulated substances, which the
Corporation is legally authorized and empowered to maintain on, in or under the Project and any
Improvements or use in connection therewith,and the Corporation has obtained and will maintain
all licenses, permits and approvals required with respect thereto, and is in full compliance with
all of the terms, conditions and requirements of such licenses, permits and approvals. The
Corporation further warrants and represents that it will promptly notify the Trustee of any change
in the nature or extent of any hazardous materials, substances or wastes maintained on, in or
under the Project and any Improvements or used in connection therewith, and will transmit to the
Trustee copies of any citations, orders, notices or other materials, substances, wastes or other
environmentally regulated substances affecting the Project and any Improvements.
(b) The Corporation shall indemnify and hold the Trustee and the Owners from and
against any and all damages, penalties, fines, claims, liens, suits, liabilities, costs (including
clean-up costs),judgments and expenses (including attorneys', consultants' or experts' fees and
expenses) of every kind and nature suffered by or asserted against the Trustee or the Owners as
a direct or indirect result of any warranty or representation made by the Corporation in
Section 6.3(a) being false or untrue in any material respect, whether or not the Corporation had
knowledge that such warranty or representation was false or untrue, or any requirement under
any law, regulation or ordinance, local, state or federal, which requires the elimination or
removal of any hazardous materials, substances, wastes or other environmentally regulated
substances by the Corporation, the Trustee or the Owners, or the breach by the Corporation of
any covenant contained in paragraph (a).
(c) This Section shall survive the termination of this Indenture.
[End of Article VII]
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ARTICLE VIII
TAX COVENANTS
The Corporation will not take or permit, or omit to take or cause to be taken, any action that
would adversely affect the exclusion from gross income for federal income tax purposes of the interest
evidenced by or paid on the 1993A Bonds and, if it should take or permit, or omit to take or cause to
be taken, any such action, the Corporation will take or cause to be taken all lawful actions within its
power necessary to rescind or correct such actions or omissions promptly on having knowledge thereof.
The Corporation acknowledges that the continued exclusion of interest evidenced by or paid on the Bonds
from an Owner's gross income for federal income tax purposes depends, in part, on compliance with the
arbitrage limitations imposed by Section 148 of the Code. The Corporation covenants herein that it will
comply with all the requirements of Section 148 of the Code, including the rebate requirements, and that
it will not permit at any time any of the proceeds of the 1993A Bonds or other funds under its control
be used, directly or indirectly, to acquire any asset or obligation, the acquisition of which would cause
the 1993A Bonds to be "arbitrage bonds" for purposes of Section 148 of the Code.
[End of Article VIII]
II
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ARTICLE IX
DEFAULTS AND REMEDIES
Section 9.01.Events of Default. If any of the following events occur it is hereby defined as and
shall be deemed an "Event of Default" under this Indenture:
(a) Default in the due and punctual payment of any installment of interest on any Bond
when the interest installment becomes due and payable;
(b) Default in the due and punctual payment to the principal and premium, if any, of
any Bond when the principal becomes due and payable, whether at maturity, by declaration or
otherwise;
(c) A failure by the Corporation to observe and perform any covenant, condition,
agreement or provisions(other than as described in subsections(a), (b), (d) or(e)of this Section)
contained in the Bonds or in this Indenture on the part of the Corporation to be observed or
performed, which failure continues for a period of 90 days after written notice, specifying such
failure and requesting that it be remedied, has-been given to the Corporation by the Trustee,
which may give such notice in its discretion and will give such notice at the written request of
Owners of not less than 50% of principal amount of the Bonds Outstanding,unless the Trustee,
or the Trustee and Owners of a principal amount of Bonds not less than the principal amount of
Bonds the Owners of which requested such notice, as the case may be, agrees in writing to an
extension of such period prior to its expiration; provided, however, that the Trustee, or the
Trustee and the Owners of such principal amount of Bonds, as the case may be, will be deemed
to have agreed to an extension of such period if corrective action is initiated by the Corporation
within such period and is being diligently pursued;
(d) Failure of the Corporation to transfer the cash portion of the Revenues to the Trustee
at the times such transfers are required under this Indenture; and
(e) Any bankruptcy, insolvency or reorganization proceedings or similar litigation is
instituted by or against the Corporation, or a receiver, custodian or similar officer is appointed
for the Corporation or any of its property, and such proceedings or appointments is not vacated
or fully stayed within 90 days after the institution or occurrence thereof; or
Section 9.02.Remedies on Default.
(a) On the occurrence and continuance of an Event of Default, the Trustee may, or if
required by a majority of the Owners of the Bonds, shall, declare the Bonds to be immediately
due and payable,whereupon they shall,without further action,become due and payable,anything
in this Indenture or in the Bonds to the contrary notwithstanding. In the event of such
acceleration, the Trustee shall immediately notify the Corporation.
(b) The provisions of the preceding paragraph are subject to the condition that if, after
the principal of any of the Bonds have been so declared to be due and payable, and before any
judgment or decree for the payment of the moneys due has been obtained or entered as
hereinafter provided,the defaulting party(the "Defaulting Party")shall cause to be deposited with
the Trustee a sum sufficient to pay all matured installments of the principal of and interest on all
Bonds which have become due otherwise than by reason of such declaration(with interest upon
such overdue installments of interest,at the rate per annum borne by the Bonds)and such amount
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as shall be sufficient to cover reasonable compensation and reimbursement of expenses payable
to the Trustee, and all Events of Default hereunder other than nonpayment of the principal of the
Bonds which has become due by said declaration has been remedied, then, in every such case,
such Event of Default shall be deemed waived and such declaration and its consequences
rescinded and annulled, and the Trustee shall promptly give written notice of such waiver,
rescission or annulment to the Corporation and the Paying Agent and shall give notice thereof
by Mail to all Owners; but no such waiver, rescission and annulment shall extend to or affect any
subsequent Event of Default or impair any right or remedy consequent thereon.
(c) On the occurrence and continuance of any Event of Default, then and in every such
case the Trustee in its discretion may, and on the written direction of Owners of not less than
majority in principal amount of the Bonds Outstanding and receipt of indemnity to its satisfaction,
shall, in its own name and as the trustee of an express trust:
(i)by mandamus, or other suit, action or proceeding at law or in equity, enforce all
rights of the Owners, and require the Defaulting Party to carry out any agreements with
or for the benefit of the Owners and to perform its or their duties under the Contract and
this Indenture, provided that any such remedy may be taken only to the extent permitted
under the applicable provisions of the Contract or this Indenture, as the case may be;
(ii)take whatever action at law or in equity may appear necessary or desirable to
enforce its rights against the Defaulting Party.
No right or remedy is intended to be exclusive of any other rights or remedies, but each and
every such right or remedy is cumulative and in addition to any other remedy given hereunder or now
or hereafter existing at law or in equity or by statute. If any Event of Default has occurred and if
requested by the Owners of a majority in aggregate principal amount of Bonds then Outstanding and
indemnified as provided in Section 9.04, the Trustee shall be obligated to exercise such one or more of
the rights and powers conferred by this Section as the Trustee,being advised by counsel, shall deem most
expedient in the interests of the Owners.
Section 9.03.Owners' Right to Direct Proceedings. Anything in this Indenture to the contrary
notwithstanding, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding
have the right, at any time, to the extent permitted by law, by an instrument or instruments in writing
executed and delivered to the Trustee, to direct the time, method and place of conducting all proceedings
to be taken in connection with the enforcement of the terms and conditions of this Indenture, or for the
appointment of a receiver, and any other proceedings hereunder; provided that such direction shall not
be otherwise than in accordance with the provisions hereof. The Trustee is not required to act on any
direction given to it pursuant to this Section until the indemnity described in Section 9.04 is furnished
to it by such Owners.
Section 9.04.Rights and Remedies of Owners. No Owner has any right to institute any suit,
action or proceeding in equity or at law for the enforcement of this Indenture or for the execution of any
trust hereof or for the appointment of a receiver or any other remedy hereunder, unless a default has
occurred of which the Trustee has been notified as provided in Section 9.01, or of which by said Section
it is deemed"to have notice, nor unless such default has become an Event of Default as defined in
Section 9.01 and the Owners of not less than a majority in aggregate principal amount of Bonds then
Outstanding have made written request to the Trustee and have offered reasonable opportunity either to
proceed to exercise the powers granted therein or to institute such action, suit or proceedings in its own
name, nor unless they have also offered to the Trustee indemnity as provided in this Section nor unless
the Trustee thereafter fails or refuses to exercise the powers hereinbefore granted, or to institute such
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action, suit or proceeding in its own name; and such notification, request and offer of indemnity are
hereby declared in every case at the option of the Trustee to be conditions precedent to the execution of
the powers and trusts of this Indenture, and to any action or cause of action for the enforcement of this
Indenture, or for the appointment of a receiver or for any other remedy hereunder; it being understood
and intended that neither nor any Owner has any right in any manner whatsoever to affect, disturb or
prejudice the lien of this Indenture by its or their action or to enforce any right hereunder except in the
manner herein provided and that all proceedings at law or in equity shall be instituted,had and maintained
in the manner herein provided and for the equal benefit of the Owners of all Bonds then Outstanding.
Nothing contained in this Indenture shall, however, affect or impair the right of any Owner to enforce
the payment of the principal of, premium, if any, and interest on any Bond at and after the maturity
thereof.
Section 9.05.Trustee May Enforce Rights Without Bonds. All rights of action and claims under
this Indenture or any of the Bonds outstanding hereunder may be enforced by the Trustee without the
possession of any of the Bonds or the production thereof in any trial or proceedings relative thereto; and
any suit or proceeding instituted by the Trustee shall be brought in its name as the Trustee, without the
necessity of joining as plaintiffs or defendants any Owners of the Bonds, and any recovery of judgment
shall be for the ratable benefit of the Owners of the Bonds and thereafter subject to the provisions of this
Indenture.
Section 9.06.Delay or Omission No Waiver. No delay or omission of the Trustee or of any
Owner to exercise any right or power accruing upon any default shall exhaust or impair any such right
or power or shall be construed to be a waiver of any such default, or acquiescence therein; and every
power and remedy given by this Indenture may be exercised from time to time and as often as may be
deemed expedient.
Section 9.07.No Waiver of One Default to Affect Another. No waiver of any default hereunder,
whether by the Trustee or the Owners, shall extend to or affect any subsequent or any other then existing
default or shall impair any rights or remedies consequent thereon.
Section 9.08.Discontinuance of Proceedings on Default; Position of Parties Restored. If the
Trustee has proceeded to enforce any right under this Indenture and such proceedings have been
discontinued or abandoned for any reason, or have been determined adversely to the Trustee, then and
in every such case the Corporation,the Trustee and the Owners shall be restored to their former positions
and rights hereunder with respect to the Trust Estate, and all rights, remedies and powers of the Trustee
shall continue as if no such proceedings had been taken .
Section 9.09.Waivers of Events of Default. The Trustee may in its discretion waive any Event
of Default hereunder and its consequences, and notwithstanding anything else to the contrary contained
in this Indenture shall do so on the written request of the Owners of a majority in aggregate principal
amount of all the Bonds then Outstanding;provided,however, that there shall not be waived without the
consent of the Owners of 100% of the Bonds then Outstanding as to which the Event of Default exists
(a) any Event of Default in the payment of the principal of or premium on any Outstanding Bonds at the
date of maturity specified therein or(b) any default in the payment when due of the interest on any such
Bonds, unless before such waiver or rescission, all arrears of interest and all arrears of payments of
principal and premium, if any, then due, as the case may be (both with interest on all overdue
installments at the rate borne by the Bonds), and all expenses of the Trustee in connection with such
default shall have been paid or provided for. In case of any such waiver, or in case any proceedings
taken by the Trustee on account of any such default have been discontinued or abandoned or determined
adversely to the Trustee, then and in every such case the Corporation, the Trustee and the Owners shall
36
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be restored to their former positions and rights hereunder respectively, but no such waiver or rescission
shall extend to any subsequent or other default, or impair any right consequent thereon.
Section 9.lOApplication of Moneys. All moneys received by the Trustee pursuant to any right
given or action taken under the provisions of this Article or held by the Trustee hereunder shall, after
payment of the costs and expenses of the proceedings resulting in the collection of such moneys and of
the expenses, liabilities and advances incurred or made by the Trustee, be deposited in the Bond Fund
and applied as follows:
(a) Unless the principal of all the Bonds has become or has been declared due and
payable, all such moneys shall be applied:
FIRST-To the payment to the persons entitled thereto of all installments of interest
then due on the Bonds, in the order of the maturity of the installments of such interest
beginning with the earliest such maturity and, if the amount available is not sufficient,
to pay in full any particular installment, then to the payment ratably, according to the
amounts due on such installment, to the persons entitled thereto, without any
discrimination or privilege; and
SECOND -To the payment to the persons entitled thereto of the unpaid principal of
and premium, if any, on any of the Bonds which have become due (other than Bonds
matured or called for redemption for the payment of which moneys are held pursuant to
the provisions of this Indenture), in the order of their due dates and beginning with the
earliest due date and, if the amount available is not sufficient to pay in full Bonds due on
any particular date, then to the payment ratably, according to the amount of principal due
on such date, to the persons entitled thereto without any discrimination or privilege; and
THIRD - The payment to the persons entitled thereto of all installments of interest
on overdue installments of interest and to the payment to the persons entitled thereto of
all installments of interest on overdue installments of principal and premium, if any, to
the extent permitted by law and if the amount available is not sufficient to pay in full any
particular installment, then to the payment ratably, according to the amounts due on such
particular installment, to the persons entitled thereto, without any discrimination or
privilege; and
FOURTH- To be held for the payment to the persons entitled thereto as the same
shall become due of the principal of, premium, if any, and interest on the Bonds which
may thereafter become due either at maturity or on call for redemption before maturity
and, if the amount available is not sufficient to pay in full Bonds due on any particular
date, together with interest and premium, if any, then due and owing thereon, payment
shall be made ratably according to the amount of interest,principal and premium, if any,
due on such date to the persons entitled thereto without any discrimination or privilege.
(b) If the principal of all the Bonds has become due or has been declared due and
payable, all such moneys shall be applied to the payment of the principal and interest then due
and unpaid on the Bonds, without preference or priority of principal over interest or of interest
over principal, or of any installment of interest over any other installment of interest, or of any
Bond over any other Bond, ratably, according to the amounts due, respectively, for principal and
interest, to the persons entitled thereto without any discrimination or privilege, with interest on
overdue installments of interest or principal.
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Whenever moneys are to be applied pursuant to the provisions of this Section, such moneys applied at such times, and from time to time, as the Trustee shall determine, ys shall
amount of such moneys available for application and the likelihood of e' wing due regard to the
available for such application in the future, additional moneys becoming
date (which shall be an Interest Payment Whenever the Trustee shall apply such funds, it.shall fix the
such(which shall
is be an yment Date unless it shall deem another date more suitable)on which
made and upon such date interest on the amounts of principal to be paid on such
dates shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of it of any such moneys and of the fixing of any such date, and shall not be required to f the deposit
to the Owner of any Bond until such Bond is presented to the Trustee for appropriate
cancellation if fully make payment
Y pad• P endorsement or for
Whenever the principal of, premium, if any,the provisions of this Section 9.10 and all expenses and interest on all of the Bonds have been paid
balance remaining in the Funds created hereunder shall, be paid to the Corpor� have been paid, any
[End of Article IX]
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ARTICLE X
TRUSTEE; PAYING AGENT
Section 10.01.Acceptance of Trusts. The Trustee hereby accepts and agrees to execute the trusts
hereby created, but only on the additional terms set forth in this Article, to all of which the respective
Owners of Bonds agree by their acceptance of delivery of any of the Bonds. The Trustee will not be
required to give any bond or surety in respect of the execution of the trusts and powers or otherwise in
respect of the premises herein.
Section 10.02.No Responsibility for Recitals. The recitals, statements and representations
contained in this Indenture or in the Bonds, save only the Paying Agent's authentication on the Bonds,
will be taken and construed as made by and on the part of the Corporation, and not by the Trustee, and
the Trustee does not assume, and will not have, any responsibility or obligation for the correctness of any
thereof.
Section 10.03.Limitations on Liability. The Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this Indenture. The Trustee may execute
any of the trusts or powers hereof and perform the duties required of it hereunder by or through
attorneys, agents, receivers or employees, and will be entitled to advice of counsel concerning all matters
of trust and its duties hereunder, and the Trustee will not be answerable for the default or misconduct of
any such attorney,agent or employee selected by it with reasonable care. Without limitation, the Trustee
will be entitled to the benefit of the foregoing sentence with respect to the delegation to the Paying Agent
of any or all of the Trustee duties hereunder, including its duties with respect to payment of principal of,
premium, if any, or interest on, or redemption or purchase of the Bonds,the authentication and delivery
of Bonds, and exchange and transfer thereof. The Trustee will not be answerable for the exercise of any
discretion or power under this Indenture or for anything whatsoever in connection with the trust created
hereby, except only for its own negligence or misconduct..
No provision of this Indenture will require 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.
Section 10;04.Compensation, Expenses and Advances. The Trustee and the Paying Agent are
entitled to reasonable compensation for their services rendered hereunder (not limited by any provision
of law in regard to the compensation of the trustee of an express trust) and to reimbursement for their
actual out-of-pocket expenses(including counsel fees) reasonably incurred in connection therewith except
as a result of their negligence or misconduct. If the Corporation fails to perform any of the covenants
or agreements contained in this Indenture, other than the covenants or agreements in respect of the
payment of the principal of and interest on the Bonds,the Trustee may, in its uncontrolled discretion and
without notice to the Owners of Bonds, at any time and from time to time, make advances to effect
performance of the same on behalf of the Corporation, but the Trustee will be under no obligation to do
so; and any and all such advances may bear interest at a rate per annum not exceeding the rate of interest
then in effect and as announced by the Trustee or any bank controlling, controlled by or in common
control with the Trustee as its prime lending rate for domestic commercial loans in the city in which the
principal office of the Trustee is located; but no such advance will operate to provide relief from any
default hereunder. If the Corporation has failed ed to make any payment to the Trustee hereunder and such
failure has resulted in an Event of Default hereunder, the Trustee and the Paying Agent each will have,
in addition to any other rights hereunder, a claim, before the claim of the Owners of Bonds, for the
payment of its compensation and the reimbursement of its expenses and any advances made by it, as
39
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provided in this Section, on the moneys and obligations in all Funds and Accounts created hereunder,
except for moneys or obligations deposited with or paid to the Trustee for the redemption or payment of
Bonds which are deemed to have been paid in accordance with Article XL
Section 10.05.Notice of Events of Default and other Events or Facts. The Trustee will not be
required to take notice, or be deemed to have notice or knowledge, of any default or Event of Default
under paragraph(c) of Section 9.01 or the existence or occurrence of any other event or fact(other than
an Event of Default described under Section 9.01, except paragraph(c) thereof), unless an officer, agent
or employee of the Trustee who has specifically been designated as being responsible for matters relating
to the Bonds has actual knowledge of such default, Event of Default, event or fact or the Trustee has been
specifically notified in writing of such default, Event of Default, event or fact by Owners of at least 50%
of principal amount of the Bonds Outstanding. The Trustee may,however, at any time, in its discretion,
require of the Corporation full information and advice as to the performance of any of the covenants,
conditions and agreements contained herein.
Section 10.05.Action by Trustee. Unless requested in writing to do so by Owners of at least a
majority in principal amount of the Bonds Outstanding or the Trustee will be under no obligation to take
any action in respect of any default or Event of Default hereunder or toward the execution or enforcement
of any of the trusts hereby created, or to institute, appear in or defend any suit or other proceeding in
connection therewith. Before taking any action hereunder, the Trustee, if in its opinion such action may
tend to involve it in expense or liability, may require that it be provided security and indemnity
satisfactory to it;but the foregoing provisions are intended only for the protection of the Trustee, and will
not affect any discretion or power given by any provisions of this Indenture to the Trustee to take action
in respect of any default or Event of Default without such notice or request from the Owners of Bonds,
or without such security or indemnity. Any action taken by the Trustee pursuant to this Indenture on the
request, authority or consent of any person who at the time of making such request or giving such
authority or consent is the Owner of any Bond, will be conclusive and binding on all future Owners of
the same Bond and upon Bonds issued in exchange therefor or in place thereof. Notwithstanding anything
contained elsewhere in this Indenture, the Trustee has the right,but is not required, to demand, in respect
of the authentication of any Bonds, the withdrawal of any cash, the release of any property, or any
reasonable action whatsoever within the purview of this Indenture, any showings, certificates, opinions,
appraisals or other information, or corporate action or evidence thereof, in addition to that required by
the terms hereof as a condition of such action by the Trustee deemed desirable for the purpose of
establishing the right of the Corporation to the authentication of any Bonds, the withdrawal of any cash,
the release of any property, or the taking of any other action by the Trustee.
Section 10.07 Good-Faith Reliance. The Trustee and the Paying Agent will be protected and will
incur no liability in acting or proceeding in good faith on any resolution, notice, telegram, telex or
facsimile transmission, request, consent, waiver, certificate, statement, affidavit, voucher, bond,
requisition or other paper or document which it in good faith believes to be genuine and to have been
passed or signed by the proper board, body or person or to have been prepared and furnished pursuant
to any of the provisions of this Indenture or on the written opinion of any attorney, engineer, accountant
or other expert believed by the Trustee and the Paying Agent, or as the case may be, to be qualified in
relation to the subject matter, and neither the Trustee nor the Paying Agent will be under any duty to
make any investigation or inquiry as to any statements contained or matters referred to in any such
instrument,but may accept and rely on the same as conclusive evidence of the truth and accuracy of such
statements.
Section 10.08.Dealings in Bonds and with Corporation. The Trustee will not be accountable
for the use of any of the Bonds. The Trustee and the Paying Agent each in its individual capacity, may
in good faith buy, sell, own, hold and deal in any of the Bonds, and may join in any action which any
40
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Owner may be entitled to take with like effect as if it did not act in any y capacity hereunder. The Trustee
and the Paying Agent, each in its individual capacity, either as principal or agent, may also engage in
or be interested in any financial or other transaction with the Corporation and may act as depositary,
trustee or agent for any committee or body of Owners of Bonds or other obligations of the Corporation
as freely as if it did not act in any capacity hereunder.
Section 10.09.Construction of Indenture. The Trustee shall construe any of the provisions of
this Indenture insofar as the same may appear to be ambiguous or inconsistent with any other provision
hereof, and any construction of any such provisions hereof by the Trustee in good faith will be binding
on the Owners of the Bonds and any other persons affected thereby.
Section 10.10.Resignation of Trustee. The Trustee may resign and be discharged of the trusts
created by this Indenture by executing an instrument in writing resigning such trusts and specifying the
date when such resignation will take effect, and filing the same with the Corporation, the County and the
Paying Agent not less than 45 days before the date specified in such instrument when such resignation
will take effect, and by giving notice of such resignation by Mail, not less than three weeks before such
resignation date, to all Owners of Bonds. Such resignation will take effect on the day specified in such
instrument and notice unless (i) no successor Trustee has been appointed as hereinafter provided and
accepted such appointment or (ii) previously a successor Trustee has been appointed as hereinafter
provided and accepted such appointment, in which event such resignation will take effect immediately
upon the appointment of such successor Trustee.
Section 10.11.Removal of Trustee. The Trustee may be removed at any time by the Corporation
or by the Owners of not less than a majority in principal amount of Bonds Outstanding by filing with the
Trustee so removed, and with the Corporation and the Paying Agent an instrument or instruments in
writing, appointing a successor, executed by the Corporation if the Trustee has been removed by the
Corporation, or executed by the Owners of not less than a majority in principal amount of Bonds
Outstanding if the Trustee has been removed by said Owners; provided that the Corporation may not
remove the Trustee if an Event of Default has occurred and is continuing hereunder and provided further
that no such removal will be effective until a successor Trustee has been appointed and until such
appointment has been accepted.
Section 10.12.Appointment of Successor Trustee. If the Trustee is removed, resigns or is
dissolved, or if its property or affairs are taken under the control of any state or federal court or
administrative body because of insolvency or bankruptcy, or for any other reason, then a vacancy will
forthwith and ipso facto exist in the office of Trustee and a successor may be appointed by filing with
the Corporation,the County and the Paying Agent an instrument in writing executed by Owners of Bonds
of not less than a majority in principal amount of Bonds Outstanding. Copies of such instrument will be
promptly delivered by the Corporation to the predecessor Trustee and to the Trustee so appointed.
Until a successor Trustee is appointed by the Owners of Bonds as authorized by this Section, the
Corporation, by an instrument authorized by resolution of the governing body of the Corporation, will
appoint a successor Trustee. After any appointment by the Corporation, it will cause notice of such
appointment to be given to the County,the Paying Agent, and by Mail to all Owners of Bonds. Any new
Trustee so appointed by the Corporation will immediately and without further act be superseded by a
Trustee appointed by the Owners of the Bonds in the manner above provided.
Section 10.13.Qualifications of Successor Trustee. Every successor Trustee(a) will be a bank
or trust company(other than)duly organized under the laws of the United States or any state or territory
thereof, subject to examination by such authorizing party, and authorized by law to perform all the duties
imposed upon it by this Indenture, (b)will(i)have a combined capital and surplus of at least$50,000,000
41
as set forth in its most recent published annual report of condition or (ii) be controlled directly or
indirectly through one or more subsidiaries by a bank holding company that has a combined capital and
surplus of at least$50,000,000 as set forth in its most recent published annual report of condition, have
at least$50,000,000 of trust assets under management and have a combined capital and surplus of at least
$2,000,000 as set forth in its most recent published report of condition, and (c) will be qualified under
the laws of the State to perform the duties of trustee.
Section 10.14.✓udicial Appointment of Successor Trustee. If the Trustee resigns and no
appointment of a successor Trustee is made pursuant to the foregoing provisions of this Article before
the date specified in the notice of resignation as the date when such resignation is to take effect, the
resigning Trustee may forthwith apply to a court of competent jurisdiction for the appointment of a
successor Trustee. If no appointment of a successor Trustee is made pursuant to the foregoing provisions
of this Article within six months after a vacancy has occurred in the office of the Trustee, any Owner
may apply to any court of competent jurisdiction to appoint a successor Trustee. Such court may then,
after such notice, if any, as it may deem proper and prescribe, appoint a successor Trustee.
Section 10.15.Acceptance of Trusts by Successor Trustee. Any successor Trustee appointed
hereunder must execute, acknowledge and deliver to the Corporation an instrument accepting such
appointment hereunder, and then such successor Trustee, without any further act, deed or conveyance,
will become duly vested with all the estates, property, rights, powers„ trusts, duties and obligations of
its predecessor in the trust hereunder, with like effect as if originally named Trustee herein. On request
of such Trustee, such predecessor Trustee and the Corporation must execute and deliver an instrument
transferring to such successor Trustee all the estates, property, rights, powers and trusts hereunder of
such predecessor Trustee and, subject to the provisions of Section 10.04, such predecessor Trustee will
pay over to the successor Trustee all moneys and other assets at the time held by it hereunder.
Section 10.16.Successor by Merger or Consolidation. Any corporation into which any Trustee
hereunder may be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which any.Trustee hereunder is a party or to which the
corporate trust business of the Trustee is transferred substantially as a whole and which otherwise
qualifies as a successor Trustee hereunder, will be the successor Trustee under this Indenture, without
the execution or filing of any paper or any further act on the part of the parties hereto, anything in this
Indenture to the contrary notwithstanding.
Section 10.17.Standard of Care. Notwithstanding any other provisions of this Article, the
Trustee will, during the existence of an Event of Default of which the Trustee has notice or is deemed
to have notice pursuant to Section 9.01, exercise such of the rights and powers vested in it by this
Indenture and use the same degree of skill and care in their exercise as a prudent person would use and
exercise under the circumstances in the conduct of the affairs of others.
Section 10.18.Intervention in Litigation of Corporation. In any judicial proceeding to which the
Corporation is a party and which in the opinion of the Trustee and its counsel has a substantial bearing
on the interests of the Owners of Bonds, the Trustee may and will, at the written request of the Owners
of Bonds of at least 25% in principal amount of the Bonds Outstanding, on receipt of indemnity
satisfactory to it, intervene in such litigation for and on behalf of the Owners of Bonds, if permitted by
the court having jurisdiction in the premises.
Section 10.19.Reliance on Bond of Corporation. As to the existence or non-existence of any
fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee will be
entitled to rely on a certificate signed on behalf of the Corporation by the President or Vice President of
the Corporation and attested by the Secretary or an Assistant Secretary of the Corporation as sufficient
42
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•
evidence of the facts therein contained and prior to the occurrence of a default of which the Trustee is
deemed to have knowledge as provided in Section 9.01, shall also be at liberty to accept a similar
certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may
at its discretion secure such further evidence reasonably deemed necessary or advisable, but shall in no
case be bound to secure the same. The Trustee may accept a certificate of the Secretary or an Assistant
Secretary of the Corporation under its seal to the effect that a resolution in the form therein set forth has
been adopted by the Corporation as conclusive evidence that such resolution has been duly adopted, and
is in full force and effect. The resolutions, orders, opinions, certificates and other instruments provided
for in this Indenture may be accepted by the Trustee as conclusive evidence of the facts and conclusions
stated therein and shall be full warrant, protection and authority to the Trustee for the withdrawal of cash
and the taking or omitting of any other action hereunder.
Section 10.20.Paying Agent. The Trustee may appoint a Paying Agent for the Bonds. Any
Paying Agent will designate to the Corporation, the County and the Trustee its Principal Office and
signify its acceptance of the duties and obligations imposed on it hereunder by a written instrument of
acceptance delivered to the Corporation under which such Paying Agent will agree, particularly:
(a) to hold all sums held by it for the payment of the Purchase Price of Bonds in trust
for the benefit of the Owners of Bonds until such sums are paid to such Owners of Bonds or
otherwise disposed of as herein provided;
(b) to hold all Bonds delivered to it hereunder in trust for the benefit of the respective
Owners of Bonds who have delivered such Bonds until moneys representing the Purchase Price
of such Bonds have been delivered to or for the account of or to the order of such Owners of
Bonds;
(c) to keep such books and records as are consistent with prudent industry practice and
to make such books and records available for inspection by the Corporation, the County, and the
Trustee at all reasonable times;
(d) on the request of the Trustee, to forthwith deliver to the Trustee all sums so held in
trust by the Paying Agent;
(e) to authenticate Bonds;
(f) to forward to the Trustee monthly a journal of transactions with respect to the Bonds
for the previous month; and
(g) notify the Trustee of all amounts of principal of, premium, if any, and interest on
the Bonds as and when the same become due and payable.
The Corporation will cooperate with the Trustee to cause the necessary arrangements to be made
and to be thereafter continued whereby funds derived from the sources specified herein will be made
available for the payment when due of the principal of, premium, if any, and interest on the Bonds.
Section 10.21.Qualifications of Paying Agent;Resignation;Removal. Any Paying Agent or any
successor Paying Agent appointed hereunder, other than the Trustee, will be a national banking
association duly organized under the laws of the United States of America, or a commercial bank or trust
company, having a combined capital stock, surplus and undivided profits of at least $50,000,000,
authorized by law to perform all the duties imposed on it by this Indenture and in all events will be
subject to the prior written approval of . The Paying Agent may at any time resign and be discharged
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of the duties and obligations created by this Indenture by giving at least 60 days' notice to the Trustee,
and . The Paying Agent may be removed at any time, at the direction of the Trustee or the Corporation
with the consent of or at the direction of by an instrument, signed by the Trustee and filed with the
Paying Agent and .
If the Paying Agent resigns or is removed, the Paying Agent will pay over, assign and deliver
any moneys held by it in such capacity to its successor or, if there be no successor, to the Trustee.
If the Trustee fails to appoint a Paying Agent hereunder, or if the Paying Agent resigns or is
removed or is dissolved, or if the property or affairs of the Paying Agent are taken under the control of
state or federal court or administrative body because of bankruptcy or insolvency, or for any other
reason, and the Trustee has not appointed its successor as Paying Agent, the Trustee will ipso facto be
deemed to be the Paying Agent for all purposes of this Indenture until the appointment by the Trustee
of the Paying Agent or successor Paying Agent, as the case may be and will during such period receive
additional compensation for performing the duties thereof.
Section 10.22.Several Capacities. Anything in this Indenture to the contrary notwithstanding,
the same entity may serve hereunder as the Trustee and the Paying Agent to the extent permitted by law.
Section 10.23.Appointment of Co-Trustee. It is the purpose of this Indenture that there will be
no violation of any law of any jurisdiction (including particularly the law of the State) denying or
restricting the right of banking corporations or associations to transact business as Trustee in such
jurisdiction. It is recognized that in case of litigation under this Indenture, and in particular in case of
the enforcement of either upon an Event of Default, or in case the Trustee deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein
granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action
which may be desirable or necessary in connection therewith, the Trustee may appoint an additional
individual or institution as a separate or Co-Trustee,in which event each and every remedy, power, right,
claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this
Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto will be
exercisable by and vest in such separate or Co-Trustee, but only to the extent necessary to enable such
separate or Co-Trustee to exercise such powers, rights and remedies, and every covenant and obligation
necessary to the exercise thereof by such separate or Co-Trustee will run to and be enforceable by either
of them.
Should any conveyance or instrument in writing from the Corporation be required by the separate
or Co-Trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to it
such properties, right, powers, trusts, duties and obligations, any and all such deeds, conveyances and
instruments in writing will, on request, be executed, acknowledged and delivered by the Corporation.
If any separate or Co-Trustee, or a successor to either, dies, becomes incapable of acting, resigns or is
removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate or
Co-Trustee, so far as permitted by law, will vest in and be exercised by the Trustee until the appointment
of a new Trustee or successor to such separate or Co-Trustee.
[End of Article X]
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ARTICLE XI
EXECUTION OF INSTRUMENTS BY OWNERS
AND PROOF OF OWNERSHIP OF BONDS
Any request, direction, consent or other instrument in writing required or permitted by this
Indenture to be signed or executed by Owners of Bonds or on their behalf by an attorney-in-fact may be
in any number of concurrent instruments of similar tenor and may be signed or executed by such Owners
in person or by an agent or attorney-in-fact appointed by an instrument in writing or as provided in the
Bonds. Proof of the execution of any such instrument and of the ownership of Bonds will be sufficient
for any purpose of this Indenture and will be conclusive in favor of the Trustee with regard to any action
taken by it under such instrument if made in the following manner:
(a) The fact and date of the execution by any person of any such instrument may be
proved by the certificate of any officer in any jurisdiction who, by the laws thereof, has power
to take acknowledgments within such jurisdiction, to the effect that the person signing such
instrument acknowledged before him the execution thereof, or by an affidavit of a witness to such
execution.
(b) The ownership of Bonds will be proved by the registration books kept under the
provisions of Section 2.08.
Nothing contained in this Article will be construed as limiting the Trustee to such proof, it being
intended that the Trustee may accept any other evidence of matters herein stated which it may deem
sufficient. Any request, consent of, or assignment by any Owner of Bonds will bind every future Owner
of the same Bond or any Bonds or Bonds issued in lieu thereof in respect of anything done by the Trustee
or the Corporation in pursuance of such request or consent.
[End of Article XI]
•
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ARTICLE XII
DEFEASANCE
If the Corporation pays or causes to be paid to the Owner of any Bond the principal of and
interest due and payable, and thereafter to become due and payable on such Bond,or any portion of such
Bond in any integral multiple of the Authorized Denomination thereof, such Bond or portion thereof will
cease to be entitled to any lien, benefit or security under this Indenture. If the Corporation pays or
causes to be paid the principal of and interest due and payable on all Outstanding Bonds, pays or causes
to be paid all other sums payable by the Corporation, including all fees, expenses and other amounts
payable to the Trustee, the Paying Agent, and then, and in that case, the right, title and interest of the
Trustee in and to the Trust Estate will thereupon cease, terminate and become void.
Any Bond will be deemed to be paid within the meaning of this Article and for all purposes of
this Indenture when(a)payment of the principal of such Bond plus interest thereon to the due date thereof
(whether such due date is by reason of maturity or upon redemption as provided herein) either (i) has
been made or caused to be made in accordance with the terms thereof, or (ii) has been provided for by
irrevocably depositing with the Trustee in trust and irrevocably set aside exclusively for such payment,
(1) moneys sufficient to make such payment and/or (2) non-callable Federal Securities maturing as to
principal and interest in such amount and at such time as will insure the availability of sufficient moneys
to make such payment, and(b)all necessary and proper fees, compensation and expenses of the Trustee,
the Paying Agent, and pertaining to the Bonds with respect to which such deposit is made have been paid
or the payment thereof provided for to the satisfaction of the Trustee. At such times as a Bond is deemed
to be paid hereunder, as aforesaid, such Bond will no longer be secured by or entitled to the benefits of
this Indenture, except for the purposes of any such payment from such moneys or Federal Securities.
Notwithstanding the foregoing paragraph, no deposit under clause (a)(ii) of the immediately
preceding paragraph will be deemed a payment of such Bonds as aforesaid until (a) proper notice of
redemption of such Bonds has been previously given in accordance with Section 3.04, or if said Bonds
are not to be redeemed within the next succeeding 35 days, until the Corporation has given the Trustee,
in form satisfactory to the Trustee, irrevocable instructions to notify, as soon as practicable, the Owners
of the Bonds that the deposit required by(a)(ii)above has been made with the Trustee and that said Bonds
are deemed to have been paid in accordance with this Article and stating the maturity or redemption date
on which moneys are to be available for the payment of the principal of said Bonds plus interest thereon
to the due date thereof, or (b) the maturity of such Bonds.
(End of Article XII)
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ARTICLE XIII
SUPPLEMENTAL INDENTURES AND AMENDMENTS OF THE CONTRACT
Section 13.01.Supplemental Indentures Not Requiring Consent of Owners. The Trustee and
the Corporation may, without the consent of, or notice to, the Owners, enter into such indentures or
agreements supplemental hereto for any one or more or all of the following purposes:
(a) To add to the covenants and agreements of the Corporation contained in this
Indenture other covenants and agreements to be thereafter observed by the Corporation; or
(b) To cure any ambiguity, or to cure, correct or supplement any defect or omission or
inconsistent provision contained in this Indenture, or to make any provisions with respect to
matters arising under this Indenture or for any other purpose if such provisions do not adversely
affect the interests of the Owners.
Section 13.02.Supplemental Indentures Requiring Consent of Owners. Exclusive of
supplemental indentures covered by Section 13.01, the written consent of the Owners of not less than a
majority in aggregate principal amount of the Bonds then Outstanding shall be required for the execution
by the Corporation and the Trustee of any indenture or indentures supplemental hereto; provided,
however, that without the consent of the Owners of all the Bonds at the time Outstanding nothing herein
contained shall permit, or be construed as permitting:
(a) A change in the terms of redemption or maturity of the principal amount of or the
interest on any outstanding Bond or a reduction in the principal amount of or premium payable
upon any redemption of any outstanding Bond or the rate of interest thereon:
(b) The deprivation of the Owner of any Bond then Outstanding of the lien created by
this Indenture (other than as originally permitted hereby);
(c) A privilege or priority of any Bond or Bonds over any other Bond or Bonds; or
(d) A reduction in the aggregate principal amount of the Bonds required for consent to
such supplemental indenture.
If at any time the Corporation shall request the Trustee to enter into such supplemental indenture
for any of the purposes of this Section, the Trustee shall, upon being satisfactorily indemnified with
respect to expenses, cause notice of the proposed execution of such supplemental indenture to be mailed
by mail to the Owners of the Bonds then Outstanding at the address shown on the registration books
maintained by the Trustee. Such notice shall briefly set forth the nature of the proposed supplemental
indenture and shall state that copies thereof are on file at the principal corporate trust office of the Trustee
for inspection by all owners. If, within 60 days following the giving of such notice, the Owners of not
less than a majority in aggregate principal amount of the Bonds then Outstanding at the time of the
execution of any such supplemental indenture shall have consented to and approved the execution thereof
as herein provided, no Owner shall have any right to object to any of the terms and provisions contained
therein, or in the operation thereof, or in any manner to question the propriety of the execution thereof,
or to enjoin or restrain the Trustee or the Corporation from executing the same or from taking any action
pursuant to the provisions thereof.
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Section 13.03.Etecution of Supplemental Indenture. The Trustee is authorized to join with the
Corporation in the execution of any such supplemental indenture and to make further agreements and
stipulations which may be contained therein, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects its rights, duties or immunities under this Indenture. Any
supplemental indenture executed in accordance with the provisions of this Article shall thereafter form
a part of this Indenture; and all the terms and conditions contained in any such supplemental indenture
as to any provision authorized to be contained therein shall be deemed to be part of this Indenture for any
and all purposes. In case of the execution and delivery of any supplemental indenture, express reference
may be made thereto in the text of the Bonds issued thereafter, if any, if deemed necessary or desirable
by the Trustee.
[End of Article XIV]
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•
ARTICLE XIV
MISCELLANEOUS
Section 14.01.Covenants of Corporation. The Corporation agrees that wherever in the Contract
it is stated that the Corporation will notify the Trustee, or whenever the Contract gives the Trustee some
right or privilege, that such part of the Contract shall be as if it were set forth in full in this Indenture.
The Corporation agrees that the Trustee as assignee of the Corporation under the Contract may enforce,
in its name or in the name of the Corporation, all rights of the Corporation and all obligations of the
County under the Contract, for and on behalf of the Owners, whether or not the Corporation is in default
under this Indenture.
Section 14.02.Parties Interested Herein. Nothing in this Indenture expressed or implied is
intended or shall be construed to confer on, or to give to any person other than the County, the
Corporation, the Trustee, and the Owners, any right, remedy or claim under or by reason of this
Indenture or any covenant, condition or stipulation hereof; and all the covenants, stipulations, promises
and agreements in this Indenture contained by and on behalf of the Corporation or the Trustee shall be
for the sole and exclusive benefit of the County, the Corporation, the Trustee, and the Owners.
Section 14.03.Tides, Headings, Captions, Etc. The titles,captions and headings of the articles,
sections and subdivisions of this Indenture have been inserted for convenience of reference only and shall
in no way modify or restrict any of the terms or provisions hereof.
Section 14.04.Severability. If any provision of this Indenture shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 14.05.Governing Law. This Indenture is governed and construed in accordance with the
laws of the State.
Section 14.06.Execution in Counterparts. This Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument.
Section 14.07.Notices. All notices, certificates or other communications shall be sufficiently
given and shall be deemed given when delivered or mailed by certified or registered mail, postage
prepaid, as follows: if to the County, to the
Attention: Finance Director; if to the Corporation, to
, North Carolina ,
Attention: President; if to the Trustee,
, Attention: Corporate Trust Department; if to
. Any party listed in this section may, by written notice, designate any further
or different addresses to which subsequent notices, certificates or other communications shall be sent.
Section 14.08.Payments Due on Holidays. If the date for making any payment or the last day
for performance of any act or the exercising of any right, as provided in this Indenture, is a Business
Day, such payment may be made or act performed or right exercised on the next succeeding day not a
Business Day with the same force and effect as if done on the nominal date provided in this Indenture.
49
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Section 14.09.Corporation, County and Trustee Representatives. Whenever under the provisions
hereof the approval of the Corporation, the County or the Trustee is required, or the County, the
Corporation or the Trustee is required to take some action at the request of the other, unless otherwise
provided, such approval or such request shall be given for the Corporation by an Corporation
Representative, for the County by the County's Representative, and for the Trustee by the Trustee
Representative, and the Corporation, the County and the Trustee are authorized to act on any such
approval or request.
IN WITNESS WHEREOF, the Corporation and the Trustee have caused this Indenture to be
executed in their respective corporate names and their respective corporate seals to be hereto affixed and
attested by their duly authorized officials or officers, all as of the date first above written.
ORANGE COUNTY COMMUNITY ACnvrrY
CORPORATION
[SEAL]
By:
President
ArrEsr:
By:
Secretary-Treasurer
[Signatures continued on following page]
•
50
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as Trustee
[SEAL]
•
ATTEST: By:
Vice President
- By:
Corporate Trust Officer
51
ORANGE COUNTY COMMUNITY ACTIVITY CORPORATION
Grantor
to
Trustee
for the benefit of
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
Beneficiary
DEED OF TRUST AND SECURITY AGREEMENT
Dated as of , 1993
Relating to
Community Activity Center Revenue Bonds, Series 1993A
and
$ Community Activity Center Revenue Bonds, Series 1993B
COLLATERAL IS OR INCLUDES FIXTURES
THIS DEED OF TRUST SECURES PRESENT AND FUTURE ADVANCES
Drawn by and mail to:
Parker, Poe, Adams & Bernstein
2600 Charlotte Plaza
Charlotte, North Carolina 28244
Attention: Donald P. Ubell
Charles B. Lee, Jr.
TABLE OF CONTENTS
Page
SECTION 1
Recitals and Conveyance 1
SECTION 2
Grantor' s Representations and Agreements . . . . 3
2 . 1 Title to Mortgaged Property 3
2 .2 Payment and Performance of Bonds, Additional Bonds,
Trust Agreement and Deed of Trust 3
2 .3 Performance of Grantor' s Obligations 3
2 .4 Further Instruments 3
2 . 5 Security Interest in Fixtures 4
2 . 6 Grantor and Lien Not Released 4
2 .7 Payment of Costs, Attorneys' Fees and Expenses 4
2 . 8 Amounts Secured 5
SECTION 3
Foreclosure . . . . . . . . . . . 5
3 . 1 Power of Sale 5
3 .2 Application of Proceeds 5
3 .3 Foreclosure Sale 6
SECTION 4
Additional Rights and Remedies of
Beneficiary and Deed of Trust Trustee 6
4 . 1 Rights upon Default 6
4 . 2 Additional Rights upon Default 6
4 .3 Construction of Deed of Trust 7
SECTION 5
Release of Mortgaged Property 7
SECTION 6
The Deed of Trust Trustee 7
SECTION 7
Miscellaneous 8
7.1 Limitation of Liability of Officers of Grantor 8
7 .2 Notices 8
7 .3 Amendments 9
7.4 Successors and Assigns 9
7. 5 Applicable Law 9
EXHIBIT A - Description of Real Property
EXHIBIT B - Permitted Exceptions to Title
1.
1L
STATE OF NORTH CAROLINA DEED OF TRUST AND
SECURITY AGREEMENT
COUNTY OF ORANGE COLLATERAL IS OR INCLUDES FIXTURES
THIS DEED OF TRUST AND SECURITY AGREEMENT (the "Deed of
TrUst") made and entered into as of 1993, by ORANGE COUNTY
COMMUNITY ACTIVITY CORPORATION, a North Carolina not-for-profit
corporation (the "Grantor" ) , and as trustee (the
"Deed of Trust Trustee") , for the benefit of FIRST UNION NATIONAL
BANK OF NORTH CAROLINA, a national banking association (the
"Beneficiary") ,
W I T N E S S E T H:
SECTION 1
Recitals and Conveyance
WHEREAS, Orange County (the "County") , a body politic and
corporate existing under North Carolina law has determined that it
is advisable and in the best interests of the County and its
residents to adopt a plan which provides for the acquisition,
construction and equipping of a public ice skating rink and a
swimming pool (collectively, the "Project") .
WHEREAS, due to economies of a scale and other factors, the
Grantor will be able to acquire, construct and operate the Project
on a more efficient basis than the County could if the County were
to build and operate the Project.
WHEREAS, the Grantor is obtaining funds for the financing of
the acquisition, construction and equipping of the Project through
(a) the issuance and sale of $ Community Activity Center
Revenue Bonds, Series 1993A of even date (the "1993A Bonds") and
(b) the issuance and sale of $ Community Activity Center
Revenue Bonds Series 1993B of even date (the "1993B Bonds" and,
collectively with the 1993A Bonds, the "Bonds") . The Bonds are
delivered under and secured by an Indenture of Trust, dated as of
even date (the "Trust Indenture") , between the Grantor and the
Beneficiary, as trustee.
WHEREAS, the Grantor and the County have entered that certain
Facilities/Management Services Contract (the "Contract") of even
date pursuant to which the County will pay certain sums to the
Grantor set forth therein in exchange for certain management
services and usage rights as set forth therein.
WHEREAS, as security for the Bonds the Grantor has assigned to
the Trustee its interest in all Management Fees under the Contract
and substantially all of its other rights under the Contract,
except for certain rights specifically reserved.
11
WHEREAS, it is further anticipated that Beneficiary will
obtain funds for the financing of the acquisition and construction
of subsequent phases of the Project through the sale of additional
bonds (all such additional bonds being referred to, collectively,
as the "Additional Bonds") .
•
WHEREAS, the Grantor desires to further secure its obligations
hereunder and under the Bonds and to provide a mechanism to secure
the Additional Bonds by this Deed of Trust (the "Deed of Trust" ) on
the Mortgaged Property as more fully described herein.
NOW, THEREFORE, in consideration of the premises and the
indebtedness herein recited and for the sum of Ten Dollars ($10 . 00)
paid to the Grantor by the Deed of Trust Trustee, the receipt of
which is hereby acknowledged, the Grantor has given, granted,
bargained, sold, and conveyed, and by these presents does give,
grant, bargain, sell and convey to the Deed of Trust Trustee, his
heirs, successors and assigns, in trust to secure the payment and
performance of the Obligations (as defined in Section 2 . 8) with
power of sale, all rights, title and interest of the Grantor now
owned or hereinafter acquired in and to the Mortgaged Property;
TO HAVE AND TO HOLD the Mortgaged Property, together with all
rents, issues and profits thereof and all privileges and
appurtenances thereunto belonging, to the Deed of Trust Trustee,
his heirs, successors or assigns upon the trust and for the uses
and purposes hereinafter set forth, subject to such exceptions and
limitations to title as qualify as Permitted Encumbrances (as
defined in Section 2 . 1) .
THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST, that if the
Grantor shall pay, or cause to be paid, to the Trustee an amount
sufficient to provide for the payment in full of the Obligations
in accordance with their respective terms and the terms of the
Trust Indenture, together with interest and prepayment premiums, if
any, with respect thereto, at the times and places thereto
specified for the payment of the same and shall comply with all the
covenants, terms and conditions of this Deed of Trust, the Bonds,
and the Trust Indenture, then this conveyance shall be null and
void and shall be canceled or released of record at the request and
at the cost of the Grantor.
BUT IF AN EVENT OF DEFAULT should occur under the Trust
Indenture or the Contract and the maturities of the Obligations are
accelerated as provided in the Trust Indenture, it shall be lawful
for, and upon the request of the Beneficiary it shall become the
duty of the Deed of Trust Trustee, to advertise and sell under this
Deed of Trust the Mortgaged Property in the manner hereinafter set
forth.
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SECTION 2
Grantor' s Representations and Agreements
2 . 1 Title to Mortgaged Property. The Grantor warrants that
Grahtor is seized of the Mortgaged Property and every part thereof
in fee simple and has the right to convey the same in fee clear of
all encumbrances, except for the Permitted Exceptions to Title
(collectively, the "Permitted Exceptions") encumbrances and matters
of title as are set forth in Exhibit B hereto; and that the Grantor
will forever warrant and defend the title to the Mortgaged Property
against the claims of all persons whomsoever, except for claims
arising under the aforesaid encumbrances .
2 .2 Payment and Performance of Bonds, the Additional Bonds,
Trust Indenture and Deed of Trust . The Grantor shall pay, or cause
to be paid, when due, the principal, prepayment premiums, if any,
and interest with respect to the Bonds and the Additional Bonds,
and all other sums required to be paid under this Deed of Trust and
the Trust Indenture from funds available to the Grantor pursuant to
such documents. The Grantor shall observe and perform all the
covenants, provisions, terms and conditions of the' Bonds, the
Additional Bonds, the Trust Indenture and this Deed of Trust, to be
observed and performed by the Grantor. All of the covenants,
terms, provisions and conditions of the Bonds, the Additional Bonds
and the Trust Indenture are incorporated by reference in this Deed
of Trust and made a part of the same as if fully set forth herein.
2 .3 Performance of Grantor' s Obligations. If at anytime the
Grantor should neglect, refuse or fail to perform any of its
obligations set forth in this Deed of Trust and the Beneficiary
performs or causes to be performed such obligations, all
expenditures incurred by the Beneficiary shall be part of the
Obligations and shall be secured by this Deed of Trust . All such
payments made by the Beneficiary shall constitute payments for the
protection and preservation of the Beneficiary' s security.
2 .4 Further Instruments. Upon demand, the Grantor shall
execute and deliver to the Beneficiary, and to any subsequent
beneficiary or successor hereunder, any further instrument or
instruments, including, but not limited to, deeds of trust,
security agreements, financing statements, assignments, notices of
extension, or renewal or substitution obligations necessary to
reaffirm, correct or perfect the security interest and lien of the
Deed of Trust Trustee and the Beneficiary to all or any part of the
Mortgaged Property intended to be given or conveyed hereunder
whether now given or conveyed or acquired and conveyed subsequent
to the date of this Deed of Trust.
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2 . 5 Security Interest in Fixtures. This Deed of Trust is
intended to be a security agreement pursuant to the North Carolina
Uniform Commercial Code for that portion of the Mortgaged Property
constituting fixtures under North Carolina law (the "Fixtures") .
The Grantor hereby grants to the Beneficiary and the Deed of Trust
Trustee a security interest in the Fixtures securing the
Obligations . The Grantor agrees to execute, deliver and file, or
cause to be filed, in such place or places as may be required by
law, financing statements (including any continuation statements
required by the North Carolina Uniform Commercial Code) in such
form as the Beneficiary may require to perfect the security
interest hereunder. Upon the occurrence of an Event of Default
under this Deed of Trust, the Beneficiary or Deed of Trust Trustee
shall be entitled to exercise all rights and remedies of a secured
party under the North Carolina Uniform Commercial Code and may
proceed as to the Fixtures in the same manner as provided herein
for the real property.
2 . 6 Grantor and Lien Not Released. The Grantor agrees that
its obligations to the Beneficiary will not be diminished, and the
responsibility and liability of the Grantor (or any successor
thereto) to the Beneficiary for the complete performance of each of
the Grantor's obligations hereunder or under the Bonds, the
Additional Bonds, the Trust Indenture, or any other documents
submitted by the Grantor to the Beneficiary in connection with the
obligations secured hereby shall not be released, regardless of any
(a) release by the Beneficiary of any of the Grantor' s successors
in title to all or any part of the Mortgaged Property from
liability on the Bonds, the Additional Bonds, or any other
liability of the Grantor to the Beneficiary, (b) extension of time
for payment of all or any part of the obligations hereby secured,
(c) release by the Beneficiary of any portion of the Mortgaged
Property from the lien and security title hereof, (d) subordination
of lien, (e) any forbearance to collect on the Bonds or other
liability of the Grantor to the Beneficiary, (f) waiver of any
right granted or remedy available to the Beneficiary or (g) action
or omission by the Beneficiary.
2 . 7 Payment of Costs, Attorneys' Fees and Exioenses. To the
extent permitted by law, the Grantor shall pay, or cause to be
paid, from funds available to the Grantor pursuant to this Deed of
Trust, and the Trust Indenture, any and all costs, reasonable
attorneys' fees and other expenses of whatever kind incurred by the
Beneficiary in connection with (a) obtaining possession of the
Mortgaged Property, (b) the protection and preservation of the
Mortgaged Property, (c) the collection of any sum or sums secured
hereby, (d) any litigation involving the Mortgaged Property, this
Deed of Trust, any benefit accruing by virtue of the provisions
hereof, or the rights of the Beneficiary, (e) the presentation of
any claim to be filed under any administrative law, (f) any
additional examination of the title to the Mortgaged Property that
may reasonably be required by the Beneficiary, or (g) taking any
steps whatsoever in enforcing this Deed of Trust, claiming any
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benefit accruing by virtue of the provisions hereof, or exercising
the rights of the Beneficiary hereunder. Nothing contained in this
paragraph 2 . 7 shall be construed to limit the Grantor' s obligation
to pay costs, attorneys' fees, and expenses as provided in the
Contract.
2 . 8 Amounts Secured; Obligations . This Deed of Trust secures
the Obligations, including without limitation all indebtedness
arising under or evidenced by the Bonds and the Additional Bonds,
whether now existing or hereafter existing or arising, and all
present and future other sums from time to time owing under the
Trust Indenture or this Deed of Trust (collectively, the
"Obligations") . The amount of the present disbursement secured
hereby is $ , and the maximum principal amount which may be
secured hereby at any one time is $ . The time period
within which such future disbursements are to be made is the period
between the date hereof and the date 15 years from the date hereof .
Disbursements secured hereby shall not be required to be evidenced
by a "written instrument or notation" as described in Section 45-
68 (2) of the North Carolina General Statutes.
SECTION' 3
Foreclosure
3 .1 Power of Sale. Upon the occurrence of any one or more of
the Events of Default under the Bonds, the Additional Bonds, the
Deed of Trust, or the Trust Indenture ("Events of Default") and if
the maturities of the Bonds or the Additional Bonds hereunder shall
have been accelerated as provided in the Trust Indenture, all of
the obligations hereby secured shall immediately become due and
payable, at the option of the Beneficiary, and, upon the direction
of the Beneficiary, the Deed of Trust Trustee shall sell all or any
part or parts of the Mortgaged Property at public auction for cash
after first having given such notice as to commencement of
foreclosure proceedings and having obtained such findings or leave
of court as may then be required by law and upon such sale and any
resale and - upon compliance with the law then relating to
foreclosure proceedings under power of sale to convey title to the
purchaser in as full and ample manner as the Deed of Trust Trustee
is empowered.
3 .2 Application of Proceeds. The Deed of Trust Trustee,
having retained one-half of one percent (0 .5%) of the gross
proceedings of such sale as a commission for his services and
having retained also all advertising and other expenses incurred by
him, including a reasonable attorneys' fee for legal services
actually performed, shall apply the net proceeds first to the
payment of any taxes or assessments that may be a lien against the
Mortgaged Property superior to this Deed of Trust, unless the Deed
of Trust Trustee advertised and sold the same subject to taxes or
assessments; then to the sums secured by this Deed of Trust in
accordance with the Trust Indenture; then the balance, if any, to
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the persons entitled thereto under the Trust Indenture unless
otherwise provided by law.
3 . 3 Foreclosure Sale. At such sale, the Beneficiary may bid
for and acquire all or any part or parts of the Mortgaged Property
and in lieu of paying cash therefor may make settlement for the
purchase price by crediting upon the sums due and payable under and
secured by this Deed of Trust, the net sales price, which shall be
the proceeds of sale after deducting therefrom the expenses, taxes
and assessments referred to above. At any sale, the Deed of Trust
Trustee shall require the successful bidder immediately to deposit
with the Deed of Trust Trustee cash or a certified check in the
amount equal to 10% of the first $1, 000 of the successful bid and
5% of any amount in excess thereof, and notice of such requirement
shall be included in the advertisement of the notice of such sale .
SECTION 4
Additional Rights and Remedies of
Beneficiary and Deed of Trust Trustee
4 . 1 Rights upon Default . Upon the occurrence of an Event of
Default, the Beneficiary and the Deed of Trust Trustee shall be
entitled to exercise all the rights and remedies provided in this
Deed of Trust or as otherwise provided by law or in equity,
including, without limiting the generality of the foregoing, the
right to have judicially appointed a receiver of the Mortgaged
Property, the right to judicial foreclosure and the right to enter
the Mortgaged Property and to operate, maintain, control and lease
the same. No remedy of the Beneficiary under this Deed of Trust is
intended to be exclusive of any remedy now or hereafter existing at
law or in equity, by statute, or under this Deed of Trust or the
Trust Indenture. No delay or omission of the Deed of Trust Trustee
or the Beneficiary to exercise any right or power accruing upon any
Event of Default shall impair such right or power or shall be
construed to be a waiver of any such Event of Default or
acquiescence therein. Every power or remedy given by this Deed of
Trust to the Deed of Trust Trustee or the Beneficiary may be
exercised from time to time as often as may be deemed expedient by
the Deed of Trust Trustee or the Beneficiary. The Grantor hereby
waives any and all rights to require marshalling of assets in
connection with the exercise of any remedies provided herein or as
permitted by law.
4 .2 Additional Rights upon Default . Upon the occurrence of
an Event of Default, the Grantor agrees that the Beneficiary has
the right to inspect the Mortgaged Property for the purpose of
determining whether the property either is contaminated by any
Hazardous Materials (as defined in the Trust Indenture) or is being
used or has been used for any activity directly or indirectly
involving any Hazardous Materials which could result in liability
to the trust created by this Deed of Trust or the Beneficiary. In
the event of the presence of any Hazardous Materials at the
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S 2_
Mortgaged Property in violation of any applicable environmental
laws, rules, regulations or orders, whether or not the same
originates or emanates from the Mortgaged Property, the Grantor
will comply with all of the requirements of all laws, rules,
regulations and others relating to the remediation thereof. If the
Grantor fails to do so, then the Beneficiary may at its election,
but without the obligation to do so, (i) give notices, (ii) cause
such work to be performed at the Mortgaged Property, or (iii) take
any and all other actions as the Beneficiary shall deem necessary
or advisable in order to abate, remove and clean up the Hazardous
Materials or otherwise cure the Grantor' s non-compliance.
Any amounts disbursed by the Beneficiary pursuant to
provisions of this paragraph 4 .2 shall be payable by the Grantor on
demand and shall be secured by this Deed of Trust .
4 .3 Construction of Deed of Trust . This Deed of Trust shall
be construed to impose and confer upon the Grantor, the Deed of
Trust Trustee and the Beneficiary all duties, rights and
obligations prescribed in Article 2A of Chapter 45 of the North
Carolina General Statutes as in effect on the date hereof .
SECTION 5
Release of Mortgaged Property
The Deed of Trust Trustee may release all or any part of the
Mortgaged Property from the lien and security interest of this Deed
of Trust only as provided in the Indenture.
SECTION 6
The Deed of Trust Trustee
6 . 1 The Deed of Trust Trustee shall be under no duty to take
any action hereunder except as expressly required, or to perform
any act that would involve him in expense or liability or to
institute or defend any suit in respect hereof, unless properly
indemnified to his satisfaction. All reasonable expenses, charges,
counsel fees and other disbursements incurred by the Deed of Trust
Trustee in and about the administration and execution of the trusts
hereby created and the performance of his duties and powers
hereunder shall be paid, or caused to be paid, by the Grantor on
demand, shall be secured by this Deed of Trust, and shall bear
interest at the rate of 10% per annum. The Beneficiary shall have
the right to remove the Deed of Trust Trustee herein named at any
time without notice or cause and to appoint his successor by an
instrument in writing, by duly recording such written instrument in
the Office of the Register of Deeds of Orange County, North
Carolina, and in the event of the death or resignation of the Deed
of Trust Trustee herein named, the Beneficiary shall have the right
to appoint his successor by recordation of such written instrument,
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S3
and any trustee so appointed shall be vested with the title to the
III
Mortgaged Property and shall possess all the powers, duties and
obligations herein conferred on the Deed of Trust Trustee in the
same manner and to the same extent as though he were named herein
as Deed of Trust Trustee.
SECTION 7
Miscellaneous
7 . 1 Limitation of Liability of Officers of Grantor. No
covenant, condition or agreement contained herein shall be deemed
to be a covenant, agreement or obligation of a present or future
commissioner, officer, employee or agent of the Grantor in his or
her individual capacity, and no officer thereof shall be liable
personally on the Bonds or any Additional Bonds or be subject to
any personal liability or accountability by reason of the execution
and delivery thereof or by virtue of the execution and delivery of
this Deed of Trust . No commissioner, officer, employee or agent of
the Grantor shall incur any personal liability with respect to any
other action or failure to act pursuant to this Deed of Trust,
provided such officer, employee or agent acts in good faith.
7.2 Notices. All notices, approvals, consents, requests and
other communications hereunder shall be in writing and given by
first-class mail, postage prepaid, or personal delivery to the
party entitled thereto, addressed (i) if to the Grantor, to
, North Carolina , Attention:
(ii) if to the Deed of Trust Trustee, to ,
, North Carolina , and (iii) if to the Beneficiary,
to ,
Charlotte , North Carolina , Attention :
Each party may by notice given
hereunder designate any further or different addresses to which
subsequent notices, approvals, consents, requests or other
communications shall be sent or persons to whose attention the same
shall be directed. Notice shall be deemed to have been received
upon the earlier of actual receipt or five Business Days (as
defined in the Trust Indenture) after deposit in the United States
mail, in certified form, postage prepaid, or, in the case of
personal delivery, upon delivery to the respective address set
forth above. All communications to be given hereunder may also be
given by telephone, telecopy or other electronic means and shall be
deemed to have been properly given at the time of the transmission
thereof if, and only if, such transmission shall be confirmed in
writing and sent as specified above.
7.3 Amendments. This Deed of Trust may be amended in any
respect, subject to compliance with the provisions of Article of
the Trust Indenture.
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7 .4 Successors and Assigns. This Deed of Trust shall be
binding upon the Grantor, and its successor and assigns and shall
inure to the benefit of, and be enforceable by the Deed of Trust
Trustee and the Beneficiary and their respective successors and
assigns.
7 . 5 Applicable Law. This Deed of Trust shall be governed by
and construed in accordance with the laws of the State of North
Carolina. Jurisdiction for the resolution of any conflict arising
from this Deed of Trust shall lie exclusively with the General
Court of Justice of the State of North Carolina, with venue in
Orange County, North Carolina.
IN WITNESS WHEREOF, the Grantor has caused this Deed of Trust
to be executed in its name and its seal to be affixed hereto by its
duly authorized officials at the order of its City Council and as
the act of the Grantor.
ATTEST: ORANGE COUNTY COMMUNITY ACTIVITY
CORPORATION
[SEAL]
By
President
Secretary
EXHIBIT A - Description of Real Property
EXHIBIT B - Permitted Exceptions to Title
9
STATE OF NORTH CAROLINA )
ss.
COUNTY OF
I, a Notary Public of the County and State aforesaid, certify
that , personally came before me on this day and
acknowledged that (s) he is of Triangle Youth
Hockey Association, a North Carolina not-for-profit corporation and
that by authority duly given and as the act of the corporation, the
foregoing instrument was signed in its name by its
President, sealed with its corporate seal and attested by
as its Secretary.
Witness my hand and official seal, this the day of
, 1993 .
Notary Public
(SEAL)
My Commission expires:
10
EXHIBIT A
TO DEED OF TRUST
AND SECURITY AGREEMENT
Description of Real Property
EXHIBIT B
TO DEED OF TRUST
AND SECURITY AGREEMENT
Permitted Exceptions to Title