HomeMy WebLinkAboutOTHER-2021-022 Trust Agreement Attachment 4
s*h draft of May 4
TRUST AGREEMENT
by and between
Orange County, North Carolina
and
The Bank of New York Mellon Trust
Company, N.A., as Trustee
Relating to the execution and delivery of
Limited Obligation Bonds, Series 2021A
and
Taxable Limited Obligation Refunding Bonds
Series 2021B
Dated as of June 1, 2021
THIS AGREEMENT (this "Agreement") is dated as of June 1, 2021, is between
ORANGE COUNTY, NORTH CAROLINA, a North Carolina political subdivision (the
"County"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a
national banking association having an office in Jacksonville, Florida, as trustee (the
"Trustee"), and relates to the issuance of [$45,000,000] aggregate amount Limited
Obligation Bonds (the "2021 Bonds").
Introduction
The County is issuing bonds pursuant to this Agreement to provide funds to
be used, together with other available funds, on a project (the "Project") (a) to
acquire, construct, and equip various public facilities, assets and improvements, (b)
to refinance existing County obligations, and (c) to pay financing costs, all as
described in Exhibit A. In accordance with the County's authority under Section
160A-20 of the North Carolina General Statutes, the, the County will secure its
obligations under this Agreement and the Bonds by a security interest in the
Pledged Facilities and the Pledged Sites (each as defined in Exhibit B).
This Agreement provides for the issuance of the bonds, the County's
obligation to pay the bonds, the security for the bonds, the County's obligation to
care for the collateral and other related matters.
Unless the context clearly requires otherwise, capitalized terms used in this
Agreement and not otherwise defined have the meanings set forth in Exhibit B.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained in this Agreement, the parties agree as follows:
ARTICLE I
THEBONDS
Section 1.01. Provision for 2021 Bonds; Advance. (a) The County will
issue, and the Trustee will authenticate and deliver, 2021 Bonds in an aggregate
principal amount of [$45,000,000], consisting of two separate series as follows:
2
* $ Limited Obligation Bonds, Series 2021A (the "Series A
Bonds"); and
* $ Taxable Limited Obligation Refunding Bonds, Series 2021B
(the "Series B Bonds").
(b) The County is receiving a total of $_ (the "Amount
Advanced") from the sale of the 2021 Bonds. The County will use the Amount
Advanced as provided in this Agreement to pay Project Costs.
Section 1.02. Bonds Constitute Installment Contracts. Each of the
Bonds, together with the County's corresponding obligations under this Agreement
and the Deed of Trust, constitutes a separate "installment contract" within the
meaning of Section 160A-20 between the County and the owner of that Bond. The
County's payment obligations, and its other obligations under this Agreement and
with respect to the Bonds, are secured by the lien on the Mortgaged Property
created under the Deed of Trust and by the other security provided for in this
Agreement. The security for each Bond ranks on parity with the security for every
other Bond.
Section 1.03. Form and Details; Payments. The Series A Bonds will be
numbered RA-1 upward for identification, will be designated "Limited Obligation
Bonds, Series 2021A," and will be in substantially the form of Exhibit B, with any
changes as this Agreement permits or requires. The Series B Bonds will be
numbered RB-1 upward for identification, will be designated "Taxable Limited
Obligation Refunding Bonds, Series 2021B," and will be in substantially the same
form as the Series A Bonds. The 2021 Bonds are payable as to interest semiannually
until payment on each Payment Date at the following rates (calculated based on a
360-day year consisting of twelve 30-day months), and are payable as to principal
on December 1 in the following years and amounts:
Series A Bonds
Maturity Date Principal
(December 1) Amount ($1 Rate °
[To come.]
3
Series B Bonds
Maturity Date Principal
(December 1) Amount ($1 Rate °
[To come.]
Exhibit D shows a schedule of payments due on the 2021 Bonds for each
Payment Date. Upon any redemption of any 2021 Bonds, the County will recalculate
the schedule of payments to reflect the redemption and will then deliver a substitute
Exhibit D to the Trustee reflecting the recalculated payment schedule. The Trustee
has no responsibility to confirm any recalculated payment schedule.
Section 1.04. Redemption Dates and Prices. The Bonds are subject to
redemption as described in Section 2.01.
Section 1.05. Delivery of 2021 Bonds. The Trustee will authenticate
and deliver the 2021 Bonds when the County has filed with or delivered to the
Trustee all the following items:
(a) Original executed counterparts of this Agreement and the Deed of Trust
(b) Certified copies of County Board resolutions approving substantially
final forms of this Agreement and the Deed of Trust, authorizing their execution and
delivery, and approving the issuance of the 2021 Bonds
(c) Executed 2021 Bonds in the aggregate principal amounts, bearing
interest at the rates, and payable as to principal and interest at the times and in the
amounts as are provided in this Agreement
4
(d) A County Certificate directing the Trustee to authenticate and then
deliver the 2021 Bonds to the person or persons named therein upon payment to
the Trustee of a specified sum, and directing the Trustee as to the application of the
Amount Advanced
(e) An Opinion of Bond Counsel to the effect that the issuance of the 2021
Bonds has been duly authorized by all necessary authorities
(f) Evidence that the LGC has approved the issuance of the 2021 Bonds
Section 1.06. Additional Bonds. The County may provide for
Additional Bonds to be issued under this Agreement to provide funds (a) to expand
or improve the Pledged Facilities, (b) to construct further improvements to the
Pledged Sites, (c) to refund any Outstanding Bonds, (d) to pay financing costs or
establish reserves in connection with the issuance of Additional Bonds, (e) for any
other purpose that may be allowed by law from time to time, including the
acquisition and construction of additional public facilities, whether or not any such
facility is related to the Pledged Facilities or the Pledged Sites, or (f) for any
combination of these purposes.
The Trustee will authenticate and deliver Additional Bonds when the County
has filed with or delivered to it all the following items:
(i) Certified copies of County Board resolutions approving the terms and
conditions under which the Additional Bonds are to be issued and authorizing the
execution of amendments or supplements to the Deed of Trust (if necessary) and
this Agreement providing for the issuance of the Additional Bonds
(ii) Evidence that the LGC has approved the issuance of the Bonds and the
related transactions (if that approval is then required by law)
(iii) An executed copy of an amendment or supplement to this Agreement
providing for the issuance of the Additional Bonds, which must set forth the
payment and redemption terms of the Additional Bonds, together with other
appropriate terms
(iv) An executed copy of an appropriate amendment or supplement to the
Deed of Trust, if necessary to extend the security of the Deed of Trust to the
5
County's obligations (A) under the Trust Agreement as amended or supplemented
or (B) with respect to the Additional Bonds
(v) A County Certificate directing the Trustee to authenticate and then
deliver the Additional Bonds to the person or persons named therein upon payment
to the Trustee of a specified sum, and directing the Trustee as to the application of
proceeds from the sale of the Additional Bonds
(vi) An Opinion of Bond Counsel to the effect (A) that the issuance of the
Additional Bonds is permitted under the terms of this Agreement and has been duly
authorized, and (B) that the issuance of the Additional Bonds in itself will have no
adverse effect on the exemption from Federal income tax with respect to any
Outstanding Bonds with respect to which any such interest is intended to be exempt
(vii) Evidence of the issuance or proposed issuance of one or more lender's
title insurance policies (or an appropriate endorsement to an existing policy) in
favor of the Trustee and including any amendment or supplement to the Deed of
Trust referenced in (iv) above as an insured instrument, if necessary to increase the
aggregate face amount of insurance to equal to the total amount of Outstanding
Bonds plus the principal amount of the Additional Bonds then to be issued
The Trustee is not required to authenticate and deliver any Additional Bonds
if any Event of Default under this Agreement is continuing.
Simultaneously with the delivery of the Additional Bonds, the proceeds
(including any accrued interest) of the Additional Bonds will be applied as provided
in the certificate described in (v) above.
After the execution and delivery of any Additional Bonds, they will be "Bonds"
under this Agreement and subject to all its terms and conditions, except as may be
provided in the supplement to this Agreement provided for in (iii) above.
ARTICLE II
REDEMPTION
Section 2.01. Redemption Dates and Prices. The 2021 Bonds are subject
to redemption only as provided in this Section.
6
(a) Optional Redemption - The 2021 Bonds maturing on or after December
1, 2032, are subject to redemption at the County's option, in whole or in part on any
date on or after December 1, 2031, upon payment of the principal amount to be
redeemed plus interest accrued to the redemption date, without any prepayment
penalty or premium.
(b) Mandatory Sinking Fund Redemption -- The 2021 Bonds maturing on
are required to be redeemed in part prior to maturity pursuant
to the terms of the sinking fund requirements of Section 2.05 at a redemption price
equal to the principal amount to be redeemed plus interest accrued to the
redemption date, without any prepayment penalty or premium.
The supplement to this Agreement providing for the issuance of any
Additional Bonds will set out the terms and conditions for their redemption.
Section 2.02. Selection of 2021 Bonds for Redemption.
(a) If less than all the 2021 Bonds are to be redeemed pursuant to the
provisions of subsection 2.01(a), they will be redeemed among maturities in any
manner the County chooses. The County is not required to redeem Series A Bonds in
preference to Series B Bonds, or vice versa, or to redeem Bonds ratably among
Series.
(b) If less than all of the 2021 Bonds of any maturity are to be redeemed,
the Trustee must select the 2021 Bonds to be redeemed by lot; provided, however,
that so long as a book-entry system with DTC is used for determining beneficial
ownership of 2021 Bonds, if less than all of the 2021 Bonds within a maturity are to
be redeemed, the parties agree that DTC may determine which of the 2021 Bonds
within the maturity are to be redeemed in accordance with DTC's then-current rules
and procedures.
(c) In any case, (i) the portion of any 2021 Bond to be redeemed must be
in the principal amount of $5,000 or some integral multiple thereof, and (ii) in
selecting 2021 Bonds for redemption, each 2021 Bond will be considered as
representing that number of 2021 Bonds which is obtained by dividing the principal
amount of that 2021 Bond by $5,000. If a portion of a 2021 Bond is called for
redemption, the County will prepare, and the Trustee will deliver, a new 2021 Bond
of the same series in principal amount equal to the unpaid portion to the registered
owner upon the surrender of the 2021 Bond.
Section 2.03. Redemption Notices. (a) The Trustee, at the County's
direction, upon being satisfactorily indemnified with respect to expenses, and with
at least two Business Days' notice, will send notice of redemption no less than 30
nor more than 60 days prior to the redemption date, as follows:
(i) With respect to any 2021 Bonds being called for redemption for which
DTC or its nominee is the registered owner, to DTC, in whatever manner may be
provided for under DTC's standard operating rules as then in effect (and if the
Trustee is unable to determine those rules, by registered or certified mail, return
receipt requested);
(ii) With respect to any 2021 Bonds for which no book-entry-only system
of registration is in effect, to each of the registered owners of those 2021 Bonds at
their addresses as shown on the Trustee's registration books, by registered or
certified mail; and
(iii) In any case, both (A) to the MSRB for posting on the EMMA System and
(B) to the LGC.
Notwithstanding anything to the contrary in this Agreement, the County
acknowledges and agrees that the Trustee is not acting as the disclosure or
dissemination agent for purposes of Rule 15c2-12 in connection with any notice to
be posted with the MSRB via the EMMA System.
Failure to give any notice specified in (i) or (ii), as applicable, or any defect in
that notice, will not affect the validity of any proceedings for the redemption of any
2021 Bonds with respect to which no failure has occurred. Failure to give any notice
specified in (iii), or any defect in that notice, will not affect the validity of any
proceedings for the redemption of any 2021 Bonds with respect to which the notice
specified in (i) or (ii) is correctly given. Any notice mailed as provided in this
Agreement will conclusively be presumed to have been given regardless of whether
received by any Owner.
(b) Any redemption notice, except a notice given in respect of a mandatory
sinking fund redemption, may state that the redemption to be effected is
conditioned upon --
g
(i) the Trustee's receipt on or prior to the redemption date of moneys
sufficient to pay the principal of and premium, if any, and interest on
the 2021 Bonds to be prepaid; or
(ii) any other condition not unacceptable to the Trustee.
If a notice contains a condition and the Trustee either (A) does not receive
moneys sufficient to pay the principal of and premium, if any, and interest on the
2021 Bonds on or prior to the redemption date, or (B) the stated condition is not
fulfilled, as evidenced to the Trustee by a County Certificate,
in either case on or prior to the redemption date,
then redemption will not be made, and the Trustee must, within a reasonable
time, give notice the same way the redemption notice was given that the moneys
were not so received (or condition was not fulfilled) and the redemption was not
made.
(c) Each redemption notice must specify (i) the complete designation of
the 2021 Bonds to be redeemed, (ii) the CUSIP numbers of the 2021 Bonds to be
redeemed, (iii) the dated dates, maturity dates and interest rates of the 2021 Bonds
to be redeemed, (iv) the date fixed for redemption, (v) any conditions to the
redemption, as contemplated by subsection (b) above, (vi) the principal amount of
2021 Bonds or portions of Bonds to be redeemed, (vii) the applicable redemption
price, (viii) the address of the place or places of payment, (ix) the Trustee's name
and telephone number, and the name of a contact person, (x) that interest accrued
to the date fixed for redemption will be paid as specified in the notice, and (xi) that
on and after the established redemption date interest on 2021 Bonds which have
been redeemed will cease to accrue. The Trustee must also include in any
redemption notice any additional information provided by the County for use in the
notice.
Section 2.04. 2021 Bonds Payable on Redemption Date; Interest Ceases
To Accrue. If on or before the date fixed for redemption funds are deposited with
the Trustee to pay the principal of and interest accrued to the redemption date on
2021 Bonds called for redemption, the 2021 Bonds (or portions of 2021 Bonds)
called for redemption cease to accrue interest from and after the redemption date.
Thereafter, those 2021 Bonds (a) are no longer entitled to the benefits provided by
this Agreement and (b) are not deemed to be Outstanding under this Agreement.
9
Section 2.05. Mandatory Sinking Fund Redemption. (a) The Trustee, from
amounts received from or on behalf of the County, will redeem 2021 Bonds
maturing on December 1, 20 , on December 1 in years and amounts upon
payment of 100% of the principal amount thereof plus interest accrued to the
redemption date, as follows:
Year Amount ($1
[To come.]
*Final maturity
(b) In addition, [provisions for a second term bond if necessary]
The Trustee shall take all appropriate action to withdraw funds from the Principal
Account and make timely payment to the Owners of the Term Bonds subject to
sinking fund redemption.
(b) Notwithstanding the foregoing, on or before the 70th day next
preceding any sinking fund payment date, the County may do either of the following:
(i) deliver to the Trustee for cancellation Term Bonds required to be
redeemed on that sinking fund payment date in any aggregate principal amount
desired; or
(ii) instruct the Trustee to apply a credit against the County's sinking fund
payment obligation for any Term Bonds that previously have been redeemed (other
than through the operation of the sinking fund requirements) and canceled by the
Trustee but not previously applied as a credit against any sinking fund payment
obligation.
The Trustee will credit against the County's sinking fund payment obligation on
each sinking fund payment date the amount of 2021 Bonds so purchased, delivered
or previously redeemed as described in paragraphs (i) or (ii) above.
10
(c) Within seven days of receipt of the funds, Term Bonds or instruction to
apply a credit (as described in subsection (b) above), any amounts remaining in the
Principal Account in excess of the amount required to fulfill the remaining required
principal and sinking fund redemption obligations on the next sinking fund payment
date will, as specified in a County Certificate, either be (i) transferred to the Interest
Account or (ii) used to redeem 2021 Bonds as soon as practicable. In the absence of
any written direction from the County, the Trustee will deposit those amounts to the
Interest Account.
ARTICLE III
FUNDS AND ACCOUNTS
Section 3.01. Creation and Use of Project Fund. The Trustee will
establish a special fund designated as the "Orange County 2021 Project Fund." The
Trustee will keep this Fund separate and apart from all other funds and moneys
held by it, and the Trustee will hold and administer this Fund as provided in this
Agreement. Moneys in the Project Fund will be expended only as described in
Sections 3.02 and 3.03. The Trustee is not required to disburse any moneys from the
Project Fund during the continuation of any Event of Default.
Section 3.02. Deposits to Project Fund; Payment of Project Costs.
(a) The Trustee will deposit into the Project Fund the amount specified in
the certificate referenced in Section 1.05(d) and all other amounts paid to it for
deposit in the Project Fund. This certificate may also direct the Trustee as to the
further application of amounts in the Project Fund without any requirement for
additional direction or requisition.
(b) In addition, the Trustee will disburse moneys in the Project Fund from
time to time, either to pay Project Costs directly to the County or the person
indicated in the requisition to pay Project Costs or to reimburse the County for
previous expenditures on Project Costs, upon the Trustee's receipt of a requisition
substantially in the form of Exhibit E. The County need not submit any additional
information other than the requisition. The Trustee may rely conclusively on
requisitions as authorization for payments, and the Trustee has no duty or
responsibility to verify any matters in the requisitions.
II
(c) Unless otherwise directed by the County, the Trustee will disburse
moneys from the Project Fund that are due to the County by wire transfer to any
bank account in the United States as a County Certificate may designate from time to
time.Any electronic notice to the Trustee is subject to the provisions of Section 9.02.
Section 3.03. Transfer of Unexpended Proceeds. Upon the first to
occur of (a) July 1, 2024, or (b) receipt of a County Certificate stating that there are
no more 2021 Project Costs to be paid from the 2021 Proceeds Fund, the Trustee
will withdraw all remaining moneys in the 2021 Proceeds Fund and deposit those
moneys in the Payment Fund. The Trustee will then apply those moneys to Bond
payments as directed by a County Representative. In the absence of any direction
from the County, the Trustee will deposit those moneys in the Interest Account and
use them to pay interest on the 2021 Bonds as the same becomes due.
Section 3.04. Other Funds and Accounts. The Trustee will establish
the following special funds and accounts, must keep the same separate and apart
from all other funds and moneys held by it, and must hold and administer the same
as provided in this Agreement:
(a) Orange County 2021 Bond Payment Fund, and therein an Interest
Account, a Principal Account and a Redemption Account; and
(b) Orange County 2021 Net Proceeds Fund.
Any amendment or supplement to this Agreement providing for the issuance
of Additional Bonds may create additional funds or accounts related to those Bonds.
Section 3.05. Payment Fund. (a) The Trustee must deposit in the proper
account in the Payment Fund all amounts paid to it for deposit in the Payment Fund,
including all amounts paid to it by the County for payments on the Bonds.
(b) The County will make payments to the Trustee sufficient in times and
amounts to allow the Trustee to make full and timely payment of all Bond Payments
as the same become due. The County will make the payments to the Trustee not
later than the 25th day of the month preceding a Payment Date. The County will
make the payments in lawful money of the United States, by wire transfer or other
transfer of immediately available funds to any account in the United States as the
Trustee may designate to the County from time to time.
12
(c) Not less than 15 days prior to each Payment Date, the Trustee must
determine the amounts on deposit and available to make the payments due on that
Payment Date with respect to the 2021 Bonds, whether in (i) the Interest Account or
the Principal Account of the Payment Fund, or (ii) any special trust fund established
pursuant to Section 11.01. The Trustee must notify the County of the available
amounts not less than 10 days prior to the applicable Payment Date. The County's
obligation to make payments with respect to any Payment Date is reduced by the
available amounts the Trustee determines.
(d) The Trustee must pay the principal of the 2021 Bonds from the
Principal Account and the interest on the 2021 Bonds from the Interest Account, as
the same become due. On or before each Payment Date, the Trustee must first
determine if it has on hand amounts sufficient to pay the principal and interest
coming due on the Bonds on the Payment Date. Then, the Trustee must set aside an
amount sufficient to pay the interest on the Bonds becoming due and payable on
that Payment Date, and then an amount sufficient to pay the principal on the Bonds
becoming due and payable on that Payment Date. The Trustee must then transfer on
the Payment Date the amounts due to DTC as registered owner of the Bonds.
(e) If the amount on deposit in the Principal Account or the Interest
Account is insufficient for its purposes two Business Days before any Payment Date,
the Trustee must notify the County of the amount of the insufficiency. The Trustee
must then transfer the required amounts to those Accounts from any amounts as
may be available in the Redemption Account.
If the amount on deposit in the Interest Account on any Payment Date
exceeds the amount payable on account of interest on the Bonds on that date, the
Trustee must, as directed by a County Certificate, retain the excess in the Interest
Account or transfer the excess to the Principal Account to be credited against
subsequent required deposits to the Principal Account. In the absence of any
direction from the County, the Trustee will retain the excess in the Interest Account.
If the amount on deposit in the Principal Account on any December 1 exceeds
the amount required on that date to pay principal of Bonds coming due on that date
(whether by reason of maturity or mandatory redemption), then the Trustee must,
as directed by a County Certificate, retain the excess in the Principal Account or
transfer the excess to the Interest Account to be credited against subsequent
required deposits to the Interest Account. In the absence of any direction from the
County, the Trustee will transfer the excess to the Interest Account.
13
(f) The Trustee must deposit in the Redemption Account of the Payment
Fund all amounts paid to it for deposit in that Account, and must use those amounts
within 12 months of their deposit to pay Bonds called for redemption on their
redemption dates.
(g) The Trustee must apply Net Proceeds deposited in the Redemption
Account pursuant to Section 5.16 to the redemption of Bonds pursuant to Section
2.01(a) as directed by a County Representative.
The Trustee must transfer any amounts not so used within 12 months of their
deposit in the Redemption Account to the Interest Account for use on the next
Payment Date to pay interest on the Bonds, and pending that use or in the absence
of direction must invest those funds in Legal Investments having a yield not in
excess of the Restricted Yield.
Subject to retaining moneys necessary to pay Bonds that have been called for
redemption but not yet presented for payment, the Trustee must use amounts in the
Redemption Account as directed by a County Certificate to make transfers to the
Interest Account or the Principal Account to the extent the balances in those
Accounts may be insufficient.
Section 3.06. Net Proceeds Fund. The Trustee must deposit in the Net
Proceeds Fund (a) Net Proceeds as provided in Section 5.16 and (b) any other
amounts paid to it for deposit in that fund. The County must direct the investment
and reinvestment of all amounts on deposit in the Net Proceeds Fund only in Legal
Investments having a yield not in excess of the Restricted Yield, to the extent those
amounts are on deposit on any date following the later of(i) the third anniversary of
the Closing Date or (ii) 30 days from the payment of those Net Proceeds to the
County or the Trustee. The Trustee must disburse Net Proceeds for replacement or
repair as provided in Section 5.16.
ARTICLE IV
SECURITY; APPROPRIATIONS; LIMITED OBLIGATION
Section 4.01. Payments on the Bonds; Additional Payments. (a)
The County will make full and timely payment of all Bond Payments and Additional
Payments due from the County under this Agreement, subject to the limitations of
14
Section 160A-20 and the terms of this Agreement, and in particular the terms of
Section 4.02 and Section 4.05.
(b) The County must pay all Additional Payments on a timely basis directly
to the person or entity to which the Additional Payments are owed in lawful money
of the United States. If the County fails to pay any Additional Payment when due, the
Trustee may (but is under no obligation to) pay the Additional Payment for the
County's account. The County agrees to reimburse the Trustee for any Additional
Payment made by the Trustee, together with interest on the amount paid at the
annual rate of 4.00%.
(c) The County is not entitled to any abatement or reduction of the Bond
Payments or Additional Payments for any reason, including, but not limited to, any
defense, recoupment, setoff, counterclaim, or any claim arising out of or related to
the Pledged Sites or the Pledged Facilities. The County assumes and bears the entire
risk of loss and damage to the Pledged Sites and the Pledged Facilities from any
cause whatsoever. The parties intend that the County must make all payments
provided for in this Agreement, unless the County's obligation to make the
payments has been terminated as provided in this Agreement.
Section 4.02. Appropriations. (a) The County will cause the
officer who prepares the draft County budget initially submitted for County Board
consideration to include in the initial proposal each year the amount of all Bond
Payments and estimated Additional Payments coming due during the Fiscal Year to
which the budget applies. Notwithstanding that the initial proposed budget includes
an appropriation for these payments, the County Board may determine not to
include the appropriation (in whole or in part) in the final County budget for any
Fiscal Year, or may amend an adopted budget to reduce or delete an approved
appropriation.
(b) (i) If for any Fiscal Year the County adopts an annual budget that
does not appropriate (for that purpose) an amount equal to the Bond Payments and
estimated Additional Payments coming due during that Fiscal Year, then the County
will send notice of this failure to the Trustee and the LGC within ten days after the
adoption of that budget.
(ii) If for any Fiscal Year the County has not adopted an annual budget that
appropriates (for that purpose) an amount equal to the Bond Payments and
estimated Additional Payments coming due during that Fiscal Year within 15 days
15
after the beginning of any Fiscal Year, then the County will send notice of this failure
to the Trustee and the LGC within an additional ten days.
(iii) If at any time the County amends the annual budget to reduce the
amounts appropriated for Bond Payments and Additional Payments below the
amounts expected to be required for the remainder of that Fiscal Year, then the
County will send notice of this amendment to the Trustee and the LGC within ten
days after the amendment.
(iv) The County must also post a copy of any notice sent to the LGC under
this Section with respect to the Bonds on the EMMA System as an event described in
Section 6.03(c)(2).
Section 4.03. Deed of Trust. Coincidentally with the
execution and delivery of this Agreement, the County is executing and delivering the
Deed of Trust. The Deed of Trust secures the County's obligations to each of the
Owners, on parity with one another.
Section 4.04. Money in funds and accounts. The County grants
a security interest, to the Trustee for the benefit of the Owners, in all the funds and
accounts held under this Agreement to secure the County's obligations under the
Bonds and otherwise under this Agreement. This security interest secures the
County's obligations to each of the Owners, on parity with one another.
Section 4.05. Limited obligation. The Bonds are payable solely from
the amounts paid by the County to the Trustee for the Bond Payments, as, when and
if received by the Trustee, except to the extent payable from the proceeds of the
Bonds, income from investments, Net Proceeds and other funds and property
pledged as provided in this Agreement, which funds are pledged as provided in this
Agreement to secure payment of the Bonds.
Notwithstanding any other provision of this Agreement, the parties intend
that this transaction comply with the provisions of Section 160A-20. No deficiency
judgment may be entered against the County in violation of Section 160A-20.
No provision of this Agreement should be interpreted as creating a pledge of
the County's faith and credit within the meaning of any constitutional debt
limitation. No provision of this Agreement should be construed or interpreted as an
illegal delegation of governmental powers or as an improper donation or lending of
16
the County's credit within the meaning of the North Carolina constitution. The
County's taxing power is not and may not be pledged directly or indirectly or
contingently to secure any moneys due under this Agreement.
No provision of this Agreement should be interpreted as pledging or creating
a lien on any class or source of the County's moneys (other than Net Proceeds and
the funds and accounts established pursuant to this Agreement as may be provided
in this Agreement). No provision of this Agreement restricts the County's future
issuance of any of its bonds or other obligations payable from any class or source of
the County's moneys (except to the extent this Agreement, the Deed of Trust and the
2021 Bonds restrict the incurrence of additional obligations secured by the
Mortgaged Property).
To the extent of any conflict between this Section and any other provision of
this Agreement, this Section takes priority.
ARTICLE V
CONSTRUCTION, MAINTENANCE AND OTHER
PROVISIONS RELATED TO THE PLEDGED FACILITIES
Section 5.01. Construction Contracts; Changes. (a) The County
will comply with the provisions of the North Carolina General Statutes and enter
into the Construction Contracts. The County will cause the construction of the
Pledged Facilities to be carried on continuously in accordance with the Construction
Contracts and all applicable State and local laws and regulations.
(b) The County will provide for the Pledged Facilities to be constructed on
the Pledged Sites and will insure (i) that no portion of the Pledged Facilities
encroaches upon nor overhangs any easement or right-of-way, (ii) that the Pledged
Facilities will be wholly within any applicable building restriction lines, however
established, and (iii) that the Pledged Facilities will not violate applicable use or
other restrictions, whether imposed by law or rule or by prior conveyances.
(c) The County may approve changes to the Construction Contracts in its
discretion except that the County may not approve any changes that (i) increase
total estimated Project Costs above the amounts previously identified and
designated for the payment of those costs, or (ii) result in the use of the Mortgaged
17
Property for purposes substantially different from the use intended as of the Closing
Date.
Section 5.02. Contractors' Performance and Payment Bonds. The
County shall require each contractor entering into a Construction Contract to
furnish a performance bond and a separate labor and material payment bond as
required by State law. The County shall provide copies of all bonds to the Trustee at
the Trustee's request.
Section 5.03. Cooperation. The Trustee and the County will cooperate
fully with each other in filing any claim or proof of loss with respect to any bond or
insurance policy described in this Agreement.
Section 5.04. Care and Use. The County must use the Pledged Sites
and the Pledged Facilities in a careful and proper manner. The County must keep the
Mortgaged Property in good condition, repair, appearance and working order for
the purposes intended.
Section 5.05. Utilities. The County must pay all charges for utility
services furnished to or used on or in connection with the Pledged Sites and the
Pledged Facilities.
Section 5.06. Risk of Loss. The County bears all risk of loss to and
condemnation of the Pledged Facilities and the Pledged Sites. Upon loss, damage or
condemnation of the Mortgaged Property, the County must proceed as provided in
Sections 5.15 and 5.16.
Section 5.07. Trustee's Performance of County's Responsibilities.
The Trustee may (but is not required to) undertake any payment or performance
required of the County for the insurance, maintenance or preservation of the
Mortgaged Property that is not timely paid or performed by the County. The County
must then reimburse the Trustee for any payments and for any associated costs and
expenses, legal or otherwise, together with interest at annual rate of 4.00%, all as
Additional Payments under this Agreement.
Section 5.08. Compliance with Requirements. The County must
promptly and faithfully comply with all requirements of governmental authorities
relating to the use or condition of the Mortgaged Property, the violation of which
would adversely affect the use, value or condition of the Mortgaged Property,
18
whether or not any requirement necessitates structural changes or improvements
or interferes with the use or enjoyment of the Mortgaged Property (or be diligently
and in good faith contesting such requirements). Unless required by applicable law
or unless the Trustee has otherwise agreed in writing, the County must not use the
Mortgaged Property for any purposes other than that for which the same were
intended as of the Closing Date. In no event may the County use the Mortgaged
Property or any part thereof, nor allow the same to be used for, any unlawful
purpose or in violation of any certificate of occupancy or other permit or certificate,
or any law, ordinance or regulation.
Section 5.09. Use and Operation. (a) The County represents
that the acquisition and construction of the improvements to the Pledged Facilities
will be useful to the County in carrying out its required public functions. The County
has an immediate need for the Pledged Facilities, and the County expects to use the
Pledged Facilities throughout the Contract Term.
(b) The County will be solely responsible for the operation of the Pledged
Facilities and will not contract with any other person or entity for that operation.
The Pledged Facilities will not be used in any private business or put to any private
business use, except for such minor and occasional uses as may be consistent with
their use as local government facilities and that will not cause the County to be in
violation of its covenant as set forth in Section 6.01(k). The County will use and
operate the Financed Facilities for their intended public purposes, and for no other
purpose unless required by law.
(b) Notwithstanding the provisions of subsections (a) and (b), the parties
acknowledge that the County intends to lease a portion of the Pledged Facilities that
constitute public school facilities (the "School Facilities") to the School Board, or may
otherwise provide for the School Board's use and operation of those School
Facilities. In addition, the County and the School Board may agree that the School
Board will assume some of the County's responsibilities under this Agreement,
including obligations with respect to maintaining primary casualty insurance on the
School Facilities. Notwithstanding any other provision of this Agreement to the
contrary, the parties agree that any such lease or other arrangements between the
County and the School Board will not violate any provision of this Agreement. No
such lease or other arrangement, however, will in any way reduce the County's
responsibilities with respect to the School Facilities under this Agreement.
19
In this Agreement, the "School Board" is The Board of Education for the
Chapel Hill - Carrboro City Schools.
Section S.10. Modification of Pledged Facilities; Installation of
Equipment and Machinery. The County has the right to repair, maintain and
remodel the Pledged Facilities or make substitutions, additions, modifications and
improvements to the Pledged Facilities, at its own cost and expense; provided,
however, that any substitutions, additions, modifications and improvements must
not in any way damage the Pledged Facilities or result in the use of the Pledged
Facilities for purposes substantially different from those initially proposed; and
provided further that the Pledged Facilities, as improved or altered, upon
completion of these substitutions, additions, modifications and improvements, will
be of a value not materially less than the value of the Pledged Facilities immediately
prior to making those substitutions, additions, modifications and improvements.
The County may also, from time to time in its sole discretion and at its own
expense, install machinery, equipment and other tangible property in or on the
Pledged Facilities. All that property will remain the County's sole property in which
neither the Trustee nor any Bondholder will have any interest; provided, however,
that any property which becomes permanently affixed to the Pledged Facilities will
be subject to this Agreement and the lien and security interest arising under the
Deed of Trust if the Trustee determines that the Pledged Facilities would be
damaged or impaired by the removal of that machinery, equipment or other
tangible property.
Section S.11. Property Damage Insurance. (a) The County must, at its
own expense, acquire, carry and maintain broad form extended coverage property
damage insurance with respect to the Pledged Facilities in an amount equal to the
replacement cost. This insurance must include standard mortgagee coverage in
favor of the Trustee.
(b) (i) The County must maintain the insurance required by this Section
with generally recognized responsible insurers and may carry reasonable
deductible or risk-retention amounts. The County must provide copies of all policies
to the Trustee upon request.
(ii) In the alternative, the County may maintain the insurance required by
subsection (a) above (A) by one or more blanket or umbrella insurance policies or
20
(B) by means of an adequate self-insurance fund or risk-retention program, or by
participation in a group risk pool or similar program.
(iii) If the County obtains blanket or umbrella coverage, the County must
provide to the Trustee, upon the Trustee's request, a certificate or certificates of the
respective insurers evidencing the coverage and, with respect to property
insurance, stating the amount of coverage provided with respect to the Pledged
Facilities (or any covered portion thereof). The County must provide to the Trustee
such evidence as to the sufficiency of any such alternative program as the Trustee
may reasonably request.
(c) Before the County adjusts or settles any property damage loss greater
than $1,000,000 with respect to the Pledged Facilities, whether or not covered by
insurance, the County must first notify the Trustee of the planned adjustment or
settlement and the County's planned use of insurance proceeds.
(d) The Trustee is not responsible for the sufficiency or adequacy of any
required insurance. The Trustee shall have no liability in accepting payment on
account of any insurance or with respect to any adjustment, compromise or
settlement of any loss agreed to by the County.
Section 5.12. Right of Entry and Inspection. The Trustee and its
representatives and agents have the right to enter upon the Pledged Sites and
inspect the Pledged Facilities at any time while any Bonds are Outstanding.
No right of inspection or approval granted in this Section imposes upon any
party any duty or obligation whatsoever to undertake any inspection or to make any
approval. No inspection or approval by any party imposes upon any party any duty
or obligation whatsoever to identify or correct any defects in the Pledged Facilities
or to notify any person with respect thereto. No inspection constitutes a warranty
(either express or implied) by the Trustee as to the quality or fitness of any
improvement. Any such inspection is solely for the benefit of the Trustee and the
Bondholders, and not for the County's benefit.
Section 5.13. Title. Title to the Pledged Sites and the Pledged Facilities
and all additions, repairs, replacements or modifications thereto will always be in
the County, subject to the lien of the Deed of Trust and to the other Permitted
Encumbrances.
21
Section 5.14. Taxes and Encumbrances. (a) If the Mortgaged Property
(or any portion) is, for any reason, deemed subject to taxation, assessments or other
lawful governmental charges the County will, during the Contract Term, pay (as
Additional Payments) the amount of all those taxes, assessments and governmental
charges. With respect to special assessments or other charges which may be
lawfully paid in installments over a period of years, the County is obligated under
this Agreement only to provide for the installments that are required to be paid
during the Contract Term. The County must not allow any liens for taxes,
assessments or governmental charges with respect to the Mortgaged Property (or
any portion) to become delinquent, including any taxes levied upon the Trustee's
interest in the Mortgaged Property, or on any rentals or other revenues derived
from the Mortgaged Property.
(b) The County will not directly or indirectly create, incur, assume or suffer
to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect
to the Mortgaged Property (or any portion), except Permitted Encumbrances. The
County will promptly, at its own expense, take such action as may be appropriate to
discharge any such mortgage, pledge, lien, charge, encumbrance or claim.
(c) The County may, at its own expense and in its own name, in good faith
contest any taxes or other charges and encumbrances described in this section. In
the event of a contest, the County may permit the charges to remain unpaid during
the period of the contest and any appeal. If, however, the Trustee notifies the County
that, in the opinion of independent counsel selected by the Trustee, the security
afforded pursuant to this Agreement or the Deed of Trust will be materially
endangered by nonpayment of any items, then the County must promptly pay those
items (but the payment will not in itself constitute a waiver of the right to continue
to contest the charges).
Section 5.15. Damage, Destruction or Condemnation. The County
must promptly notify the Trustee if (a) the Mortgaged Property or any portion
thereof is destroyed or damaged by fire or other casualty, (b) any governmental
authority takes, or notifies the County of any intent to take, title to, or the temporary
or permanent use of the Mortgaged Property or any portion thereof, or the estate of
the County or the Trustee in the Pledged Facilities, the Pledged Sites or any portion
thereof, under the power of eminent domain, (c) a material defect in the
construction of the Pledged Facilities becomes apparent, or (d) title to or the use of
all or any portion of the Mortgaged Property is lost by reason of a defect in title.
22
Each notice must describe generally the nature and extent of the damage,
destruction or taking. The County must provide any additional information
concerning the matter as the Trustee may reasonably request.
The County must file its claims under insurance coverages and claims for
awards or payments in the nature of condemnation awards resulting from any
damage, destruction or taking. The County must prosecute all its claims for awards
or payments in good faith and with due diligence. Any Net Proceeds received by the
County because of those claims will be used as provided in Section 5.16.
Section 5.16. Deposit and Use of Net Proceeds.
(a) If the amount of Net Proceeds received by the County from any single
event or any single series of related events is less than $1,000,000, then the County
has no obligation to account to the Trustee or any other person or entity with
respect to the use of such Net Proceeds. The County, however, acknowledges that its
use of funds may be constrained by the requirements of the Code and the County's
covenants and representations in Section 6.01(k).
(b) If the amount of Net Proceeds received by the County from any single
event or any single series of related events is at least $1,000,000, the County must
cause the Net Proceeds to be paid to the Trustee for deposit and application as
provided in this Section.
(c) The County may elect to proceed under either part (i), (ii) or (iii) of this
subsection with respect to Net Proceeds deposited with the Trustee pursuant to
subsection (b). The County must notify the Trustee of its election within 60 days
after the date of the deposit.
(i) The County may direct the Trustee to deposit the Net Proceeds into the
Redemption Account in the Bond Fund and use the Net Proceeds, together with any
other available funds the County may provide in its discretion, to redeem or defease
the Bonds in whole (but not in part), pursuant to Section 2.01 and Article XI, as
appropriate, and as directed in a County Certificate.
(ii) If the County determines that the Net Proceeds, together with any
other available funds the County may provide in its discretion, will be sufficient to
repair or restore that portion of the Pledged Facilities regarding which the Net
Proceeds arose, then the County may direct the deposit of the Net Proceeds to the
23
Net Proceeds Fund and then may apply those proceeds to repair or restoration. The
County must act with due diligence and in a commercially reasonable manner to
provide for the repair and restoration.
The Trustee will disburse Net Proceeds for the payment of such costs upon
receipt of requisitions provided by the County and substantially in the form of
Exhibit E. The Trustee may rely conclusively on requisitions as authorization for
payments, and the Trustee has no duty or responsibility to verify any matters in the
requisitions. The Trustee must not honor any requisition if an Event of Default is
continuing.
The County will not be entitled to any reimbursement of any funds paid
pursuant to this subsection, nor will the County be entitled to any postponement or
diminution of its obligation to make Bond Payments because of any contribution.
Any repair or replacement paid for in whole or in part out of Net Proceeds will be
the County's property and will be part of the Mortgaged Property.
(iii) If the County determines that the Net Proceeds and other funds will not
be sufficient for the purposes described in (i) or (ii), then the County must direct the
Trustee to deposit the Net Proceeds into the Redemption Account in the Bond Fund
and use the Net Proceeds to prepay or defease the Bonds in whole or in part
pursuant to Section 2.01 and Article XI and as directed by a County Representative.
(d) Nothing in this Section creates an option in the County or any other
party to provide for the early payment of Bonds not provided for in Article II.
ARTICLE VI
COUNTY'S WARRANTIES, REPRESENTATIONS AND COVENANTS
Section 6.01. In General. The County makes the following statements of
fact, with the intent and understanding that the Trustee and the Bondholders will
rely on these statements in deciding to enter into this Agreement and to purchase
and hold Bonds.
(a) The County is a duly organized and validly existing political subdivision
of the State. The County has all powers necessary to enter into the transactions
contemplated by this Agreement and the Deed of Trust and to carry out its
obligations under this Agreement.
24
(b) The County has duly and validly authorized, issued, executed and
delivered this Agreement, the 2021 Bonds and the Deed of Trust. Assuming due
authorization, execution and delivery by the other parties, this Agreement, the 2021
Bonds and the Deed of Trust constitute valid, legal and binding obligations of the
County, enforceable (in the case of the Deed of Trust, by the Deed of Trust Trustee
and the Trustee) in accordance with their respective terms, subject to bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors' rights
generally and applicable principles of equity.
(c) The County requires no further approval or consent from any
governmental authority with respect to the County's entering into or performing
under this Agreement or the Deed of Trust.
(d) There is no action, suit or proceeding at law or in equity before or by
any court, public board or body pending or, to the best of the County's knowledge,
threatened, against or affecting the County (or any official thereof in an official
capacity) (i) challenging the validity or enforceability of the Trust Agreement or the
2021 Bonds, or seeking to restrain or enjoin the issuance or delivery of the Bonds,
or (ii) challenging (A) the County's organization or existence, (B) the County's
issuance of the Bonds, or (C) the title to office of any County Board member or other
County officer, or (iii) that otherwise would be likely (if decided adversely to the
County) to have a material adverse effect on the County's ability to provide for
timely payment of the Bonds.
(e) The County's performance of its obligations under the Bonds, this
Agreement and the Deed of Trust, and compliance with their respective provisions,
under the contemplated circumstances, does not and will not in any material respect
constitute on the County's part a breach of or default under, or result in the creation
of any material lien or other encumbrance on any County property (except as
contemplated in such instruments) pursuant to, any agreement or other instrument
to which the County is a party, or any existing law, regulation, court order or
consent decree to which the County is subject.
(f) No County representation, covenant or warranty in this Agreement is
false or misleading in any material respect.
25
(g) The County is vested with fee simple title to the Pledged Sites. There
are no liens or encumbrances on the Pledged Facilities or the Pledged Sites other
than the existing encumbrances, as shown on Exhibit C to the Deed of Trust.
(h) The County Board resolutions relating to the County's execution and
delivery of this Agreement, the 2021 Bonds, the Deed of Trust and the transactions
contemplated by those instruments have been duly adopted, are in full force and
effect, and have not been in any respect modified, revoked or rescinded.
(i) The County believes funds will be available to satisfy all its obligations
under this Agreement.
(j) The Pledged Facilities have been designed and will be constructed to
comply with all applicable subdivision, building and zoning ordinances and
regulations, and all applicable federal and State standards and requirements
relating to the Pledged Facilities.
(k) The County will not take or permit, or omit to take or cause to be taken,
any action that would cause the Series A Bonds to be "arbitrage bonds" or "private
activity bonds" within the meaning of the Code. If the County does take or permit, or
take or cause to be taken, any such action, or omit to take or cause to be taken, the
County must take (or cause to be taken) all lawful actions within its power
reasonably necessary to rescind or correct such actions or omissions promptly upon
having knowledge of the effect of such actions.
Section 6.02. County's Undertakings as to Environmental Matters.
The County makes the following statements of fact, with the intent and
understanding that the Trustee and the Bondholders will rely on these statements in
deciding to enter into this Agreement and to purchase and own Bonds.
(a) The County has no knowledge (i) that any industrial use has been made
of the Mortgaged Property, (ii) that the Mortgaged Property has been used for the
storage, treatment or disposal of chemicals or any Hazardous Materials, (iii) that
any manufacturing, landfilling or chemical production has occurred on the
Mortgaged Property, or (iv) that there is any asbestos or other contaminant on, in or
under the Mortgaged Property.
(b) To the County's knowledge, the Mortgaged Property complies with all
federal, State and local environmental laws and regulations. The County will keep
26
the Mortgaged Property, and the activities at the Mortgaged Property, in compliance
with all environmental laws, rules, and regulations. The County will, in a timely
manner, take all lawful action necessary to maintain compliance or to remedy any
lack of compliance.
(c) The County will use and maintain Hazardous Materials on the
Mortgaged Property only for the routine maintenance and operation of the
Mortgaged Property. The County will maintain these Hazardous Materials only in
appropriate quantities for these purposes, and will use them only in substantial
compliance with label instructions and all State and federal environmental laws,
rules and regulations. The County will not use the Mortgaged Property (A) for the
manufacture, transport, process, storage, treatment or disposal of any Hazardous
Materials or (B) for any industrial, manufacturing or landfilling use or for any
chemical production.
(d) The County will promptly send to the Trustee, upon the Trustee's
request, copies of any citations, orders, notices or other material governmental or
other communication received with respect to any Hazardous Materials.
For the purposes of this Section, "Hazardous Materials" means any chemicals,
materials, substances, wastes or other substances that are classified and regulated
by any by federal, State or local laws as hazardous or toxic substances that exist on
or affect the Mortgaged Property.
Section 6.03. County's Undertaking for Continuing Disclosure. The
County undertakes, for the benefit of the beneficial owners of the Bonds, to provide
the following items and information to the MSRB:
(a) by not later than seven months from the end of each of the County's
Fiscal Years, beginning with the Fiscal Year that ends June 30, 2021, audited County
financial statements for such fiscal year, if available, prepared in accordance with
Section 159-34 of the General Statutes of North Carolina, as it may be amended from
time to time, or any successor statute, or, if such audited financial statements are
not available by seven months from the end of any fiscal year, unaudited County
financial statements for such fiscal year, to be replaced subsequently by audited
County financial statements to be delivered within 15 days after such audited
financial statements become available for distribution;
27
(b) by not later than seven months from the end of each of the County's
Fiscal Years, beginning with the Fiscal Year that ends June 30, 2021, the financial
and statistical data as of a date not earlier than the end of the preceding fiscal year
(which data will be prepared at least annually, will specify the date as to which such
information was prepared and will be delivered with any subsequent material
events notices specified in subparagraph (c) below) for the type of information
included in Appendix A to the final Official Statement relating to the 2021 Bonds
under the captions (excluding any information on
overlapping or underlying debt) to the extent such items are not included in the
audited financial statements referred to in (a) above;
(c) in a timely manner, not in excess of ten business days after the
occurrence of the event, notice of any of the following events with respect to the
2021 Bonds:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults, if material;
(3) unscheduled draws on debt service reserves reflecting financial
difficulties;
(4) unscheduled draws on any credit enhancements reflecting financial
difficulties;
(5) substitution of credit or liquidity providers, or their failure to perform;
(6) adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701-TEB) or other material notices or determinations with respect to the tax
status of the 2021 Bonds, or other material events affecting the tax status of the
2021 Bonds;
(7) modifications to rights of the beneficial owners of the 2021 Bonds, if
material;
(8) calls for redemption of 2021 Bonds (other than calls pursuant to
sinking fund redemption), if material, and tender offers;
28
(9) defeasances;
(10) release, substitution or sale of any property securing repayment of the
2021 Bonds, if material;
(11) rating changes;
(12) bankruptcy, insolvency, receivership or similar proceedings related to
the County, the Trustee or any other person or entity that may at any time become
legally obligated to make Bond Payments (collectively, the "Obligated Persons");
(13) The consummation of a merger, consolidation, or acquisition involving
an Obligated Person or the sale of all or substantially all of the assets of the
Obligated Person, other than in the ordinary course of business, the entry into a
definitive agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if material;
(14) Appointment of a successor or additional trustee or the change of name
of a trustee, if material;
(15) Incurrence of a financial obligation (as defined below) of the County, if
material, or agreement to covenants, events of default, remedies, priority rights, or
other similar terms of a financial obligation of the County, any of which affect
Bondholders, if material; and
(16) Default, event of acceleration, termination event, modification of terms
or other similar events under the terms of a financial obligation of the County, any of
which reflect financial difficulties; and
(d) in a timely manner, not in excess of ten Business Days after the
occurrence of the failure, notice of a failure of the County to provide required annual
financial information described in (a) or (b) above on or before the date specified.
"Financial obligation" means (a) a debt obligation, (b) a derivative instrument
entered into in connection with, or pledged as security or a source of payment for,
an existing or planned debt obligation, or (c) a guarantee of an obligation described
in either clause (a) or (b). The term "financial obligation" shall not include municipal
securities as to which a final official statement has been provided to the MSRB
29
consistent with Rule 15c2-12 of the Securities and Exchange Commission
promulgated under the Securities Exchange Act of 1934, as amended.
As used above, the "final Official Statement" means the Official Statement
dated June , 2021, that the County has approved and authorized for use in
connection with the offering and sale of the 2021 Bonds.
For the purposes of the events identified in subparagraph (c)(12) above, the
event is considered to occur when any of the following occurs: the appointment of a
receiver, fiscal agent or similar officer for an Obligated Person in a proceeding under
the U.S. Bankruptcy Code or in any other proceeding under state or federal law in
which a court or governmental authority has assumed jurisdiction over
substantially all of the assets or business of the Obligated Person, or if such
jurisdiction has been assumed by leaving the existing governing body and officials
or officers in possession but subject to the supervision and orders of a court or
governmental authority, or the entry of an order confirming a plan of
reorganization, arrangement or liquidation by a court or governmental authority
having supervision or jurisdiction over substantially all of the assets or business of
the Obligated Person.
If the County fails to comply with the undertaking described above, the
Trustee may take action to protect and enforce the rights of all the beneficial owners
of the 2021 Bonds with respect to such undertaking, including an action for specific
performance; provided, however, that failure to comply with such undertaking will
not be an Event of Default and will not result in any acceleration of payment of the
2021 Bonds. All actions will be instituted, had and maintained in the manner
provided in this paragraph for the benefit of all beneficial owners of the 2021 Bonds.
The County must provide the documents and other information referred to
above to the MSRB in an electronic format as prescribed by the MSRB and
accompanied by identifying information as prescribed by the MSRB.
The County may discharge its undertaking as set forth in this Section by
providing such information in any manner that the United States Securities and
Exchange Commission subsequently authorizes in lieu of the manner described
above.
30
The County reserves the right to modify from time to time the information to
be provided, or the presentation of the information to be provided, to the extent
necessary or appropriate in the County's judgment, provided that:
(A) any such modification may only be made in connection with a change
in circumstances that arises from a change in legal requirements, change in law, or
change in the identity, nature, or status of the County;
(B) the information to be provided, as modified, would have complied with
the requirements of Rule 15c2-12 as of the date of the final Official Statement, after
taking into account any amendments or interpretations of Rule 15c2-12, as well as
any changes in circumstances; and
(C) any such modification does not materially impair the interests of the
beneficial owners, as determined by the Trustee, by Bond Counsel, or by the
approving vote of the Majority Owners pursuant to the terms of this Agreement, as
it may be amended from time to time, at the time of the amendment.
Any annual financial information containing modified operating data or
financial information will explain, in narrative form, the reasons for the modification
and the impact of the change in the type of operating data or financial information
being provided.
The provisions of this Section will terminate upon payment, or provision
having been made for payment, in a manner consistent with Rule 15c2-12, in full of
the principal of and interest on all the Bonds.
ARTICLE VII
INDEMNIFICATION
To the extent permitted by law, the County will indemnify, protect and save
(a) the LGC and its members and employees, and
(b) the Trustee and its officers, directors, agents and employees,
in all cases harmless from all liability and losses, including expenses and legal fees,
expenses and costs, arising out of, connected with, or resulting directly or indirectly
31
(A) from the condition or use of the Mortgaged Property or the
transactions contemplated by this Agreement; or
(B) as a result of any warranty or representation made by the County in
Section 6.02 being false or untrue in any material respect, or any requirement under
any law or regulation which requires the elimination or removal of any hazardous
materials, substances, wastes or other environmentally regulated substances by the
Trustee, the County or any transferee or assignee of the County or the Trustee.
The County has no obligation to indemnify any indemnified party for the gross
negligence or intentional misconduct of the indemnified party or any of its employees
or representatives. The County's obligation to provide indemnification under this
Article continues even after the payment in full of all the County's obligations under
this Agreement. The County's obligation extends to any Trustee even after the
removal or resignation of that Trustee. The parties intend that the LGC is a third-
party beneficiary of the County's obligations under this Article VII.
ARTICLE VIII
DISCLAIMER OF WARRANTIES
The County acknowledges that the Trustee has not designed the Pledged
Facilities, that the Trustee has not supplied any plans or specifications with respect
thereto and that the Trustee
(a) is not a manufacturer of, nor a dealer in, any of the component parts of
the Financed Facilities or similar facilities,
(b) has not made any recommendation, given any advice nor taken any
other action with respect to (i) the choice of any supplier, vendor or designer of, or
any other contractor with respect to, the Financed Facilities or any component part
thereof or any property or rights relating thereto, or (ii) any action taken or to be
taken with respect to the Financed Facilities or any component part thereof or any
property or rights relating thereto at any stage of the construction thereof,
(c) has not at any time had physical possession of the Financed Facilities, the
sites on which those facilities are or will be established, or any component part
32
thereof or made any inspection thereof or any property or rights relating thereto,
and
(d) has not made any warranty or other representation, express or implied,
that the Financed Facilities or any component part thereof or any property or rights
relating thereto (i) will not result in or cause injury or damage to persons or
property, (ii) has been or will be properly designed or will accomplish the results
which the County intends therefor, or (iii) is safe in any manner or respect.
THE TRUSTEE MAKES NO EXPRESS OR IMPLIED WARRANTY OR
REPRESENTATION OF ANY KIND WHATSOEVER WITH RESPECT TO THE
FINANCED FACILITIES OR ANY COMPONENT PART THEREOF, INCLUDING BUT
NOT LIMITED TO ANY WARRANTY OR REPRESENTATION WITH RESPECT TO THE
MERCHANTABILITY OR THE FITNESS OR SUITABILITY THEREOF FOR ANY
PURPOSE, and further including the design or condition thereof; the safety,
workmanship, quality or capacity thereof; compliance thereof with the
requirements of any law, rule, specification or contract pertaining thereto; any
latent defect; the ability of the Financed Facilities to perform any function; or any
other characteristic of the Financed Facilities. The County bears all risks relating to
the Financed Facilities or the transactions contemplated by this Agreement or by the
Deed of Trust, and the County waives the benefits of all implied warranties and
representations of the Trustee.
The provisions of this Article continue in effect even if the Contract Term has
expired, and continue to apply with respect to any particular Trustee even after the
removal or resignation of that Trustee.
ARTICLE IX
THE TRUSTEE
Section 9.01. Rights and Duties. (a) If an Event of Default is continuing, the
Trustee must exercise its rights and powers and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of that person's own affairs.
(b) Except during the continuation of an Event of Default:
33
(i) the Trustee need perform only those duties that are specifically set
forth in this Agreement and no other, and no implied covenants or obligations shall
be read into this Agreement against the Trustee;
(ii) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions expressed,
upon certificates, opinions or other writings furnished to the Trustee and
conforming to the requirements of this Agreement which the Trustee actually and in
good faith believes to be genuine and to have been signed or presented by the
proper person.
(c) The Trustee is not relieved from liability for its own negligent action,
its own grossly negligent failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of subsection (a) above;
(ii) the Trustee will not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it pursuant to
Section 10.05; and
(iii) the Trustee will not be liable with respect to any information contained
in any offering documents (except to the extent of information about the Trustee
provided by the Trustee specifically for inclusion in that offering document). The
Trustee has no responsibility for compliance with any state or federal securities
laws in connection with the Bonds.
(d) Every provision of this Agreement that in any way relates to the
Trustee is subject to all the provisions of this Section 9.01.
(e) Not later than August 1 of each year, the Trustee will notify the LGC
and the County of the principal amount of Bonds Outstanding as of the preceding
June 30, with a breakdown of Bonds by series.
(f) No provision of this Agreement requires the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, unless it receives
indemnity satisfactory to it against any loss, liability or expense, except that the
Trustee may not require indemnity as a condition to declaring the principal and
34
interest with respect to the Bonds to be due immediately under Section 10.02. No
permissive right of the Trustee should be construed as a duty.
(g) The Trustee is not liable for interest on any cash held by it except as
the Trustee may agree with the County in writing.
(h) If a Default is continuing and is known to the Trustee, then the Trustee
must notify the Owners and the LGC within 15 days after the Default becomes
known to the Trustee. The Trustee, however, will only be deemed to have
knowledge of (i) defaults in payment as described in Sections 10.01(a) and (b) and
(ii) defaults with respect to which the Trustee has received written notice,
describing the default, from any interested party.
(i) The Trustee may consult with counsel and is not liable for any action it
takes or omits to take in good faith in reliance on advice from counsel as to legal
matters, including but not limited to interpretation of this Agreement.
(j) Notwithstanding anything in this Agreement to the contrary, the
Trustee and its agents have the right to require additional evidence, certificates or
opinions of counsel as to legal matters as the Trustee may deem appropriate to
establish the County's right to the withdrawal of any funds held under this
Agreement or to require the Trustee's taking of any other action under this
Agreement.
(k) The Trustee must keep complete and accurate records of all moneys
received and disbursed by it under this Agreement. These records must be available
for inspection by the County and any Owner, or any of their agents, at any time
during regular business hours upon reasonable prior notice to the Trustee.
(1) In any judicial proceeding to which the County is a party and which in
the Trustee's opinion has a substantial bearing on the interests of Owners, the
Trustee may intervene on the Owners' behalf, and must do so if requested in writing
by the Majority Owners, provided that the Trustee has received the indemnity
provided for in subsection (f) above.
(m) The Trustee may act through agents or co-trustees.
35
(n) The Trustee has no duty to inspect or oversee the construction or
completion of any property to be acquired, constructed or improved using Bond
proceeds.
(o) The Trustee shall not be responsible or liable for any failure or delay in
the performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control, including,
without limitation, acts of God; falling space debris; earthquakes; fire; flood;
hurricanes or other storms; wars; terrorism; similar military disturbances;
sabotage; epidemic; pandemic; riots; interruptions, loss or malfunctions of utilities,
computer (hardware or software) or communications services, in all cases not
specific to the Trustee; accidents; acts of civil or military authority or governmental
action; it being understood that the Trustee shall in all cases use commercially
reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as reasonably practicable under the
circumstances.
(p) The Trustee may rely on, and need only rely on, notices and
instructions provided by the County in the form of a County Certificate.
(q) The Trustee shall not be responsible or liable for the environmental
condition or any contamination of any property which secures the Bonds or is
owned or leased by the County or for any diminution in value of any such property
as a result of any contamination of the property by any hazardous substance,
hazardous material, pollutant or contaminant. The Trustee shall not be liable for
any claims by or on behalf of the County or any other person or entity arising from
contamination of the property by any hazardous substance, hazardous material,
pollutant or contaminant, and shall have no duty or obligation to assess the
environmental condition of any such property or with respect to compliance of any
such property under state or federal laws pertaining to the transport, storage,
treatment or disposal of, hazardous substances, hazardous materials, pollutants, or
contaminants or regulations, permits or licenses issued under such laws.
Section 9.02. Communication with the Trustee. The Trustee may
accept and act upon instructions, including funds transfer instructions
("Instructions") given pursuant to this Agreement and delivered using Electronic
Means. If the County elects to give the Trustee Instructions using Electronic Means
and the Trustee in its discretion elects to act upon those Instructions, the
Trustee's understanding of the Instructions controls.
36
The County understands and agrees that the Trustee cannot determine the
identity of the actual sender of Instructions and that the Trustee may conclusively
presume that Instructions that purport to have been sent by a County
Representative have in fact been sent by that County Representative. The County is
responsible for ensuring that only County Representatives transmit Instructions
to the Trustee, and the County is solely responsible to safeguard the use and
confidentiality of applicable user and authorization codes, passwords and
authentication keys. The Trustee is not liable for any losses, costs or expenses
arising directly or indirectly from the Trustee's reliance upon and compliance with
Instructions that purport to have been sent by a County Representative,
notwithstanding that an Instruction may conflict with or be inconsistent with
another Instruction received after the Trustee's action.
The County agrees: (a) to assume all risks arising out of the use of Electronic
Means to submit Instructions to the Trustee, including without limitation the risk
of the Trustee's acting on unauthorized Instructions that purport to be sent by an
County Representative, and the risk of interception and misuse by third parties;
(b) that it is fully informed of the protections and risks associated with the various
methods of transmitting Instructions to the Trustee and that there may be more
secure methods of transmitting Instructions than the method(s) selected by the
County; (c) that the security procedures (if any) to be followed in connection with
its transmission of Instructions provide to it a commercially reasonable degree of
protection in light of its particular needs and circumstances; and (d) to notify the
Trustee immediately upon learning of any compromise or unauthorized use of
the security procedures.
In this Agreement, "Electronic Means" means electronic mail, facsimile
transmission or similar methods. Voice communication and delivery of signed paper
documents are not "Electronic Means."
Section 9.03. Trustee's Individual Rights. The Trustee in its individual or
any other capacity may become the Owner or pledgee of Bonds and may otherwise
deal with the County or its affiliates with the same rights it would have if it were not
Trustee.
Section 9.04. Disclaimer. The Trustee makes no representation as to the
validity or adequacy of this Agreement or the Bonds, and the Trustee is not
accountable for the County's use of the proceeds of the Bonds.
37
Section 9.05. Eligibility. The County must maintain a trustee for this
Agreement. No corporation may be appointed or serve as Trustee unless (a) it is
approved by the LGC for service as Trustee under this Agreement, (b) it is a
corporation organized and doing business under the laws of the United States or any
state or the District of Columbia, is authorized under such laws and the laws of the
State to exercise corporate trust powers, and is subject to supervision or
examination by the United States, any state or the District of Columbia, and (c) it has
a combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition.
Section 9.06. Resignation; Removal; Replacement. The Trustee may
resign at any time by delivering notice of its resignation to the County at least 30
days prior to the effective date of the resignation. The County may remove the
Trustee at any time by delivering notice of the removal to the removed Trustee at
least 30 days prior to the effective date of the removal, but the County may remove
the Trustee only if no Event of Default is continuing at the time the County sends the
notice. The Majority Owners may remove the Trustee at any time by delivering
notice of the removal to the County and the removed Trustee at least 30 days prior
to the effective date of the removal and may at the same time (or at any time during
the 30-day notice period) appoint a new Trustee by notice to the County and the
removed Trustee.
If the Trustee resigns or is removed or if a vacancy otherwise exists in the
office of Trustee for any reason, the County must promptly appoint a successor
Trustee (except when that right is exercised by the Majority Owners as described in
the preceding paragraph).
A successor Trustee must deliver a written acceptance of its appointment to
the retiring Trustee and to the County. Immediately upon receipt of the acceptance,
the retiring Trustee must transfer all property held by it as trustee to the successor
Trustee; only then will the resignation or removal of the retiring Trustee become
effective. The successor Trustee has all the rights, powers and duties of the Trustee
under this Agreement.
If the Trustee fails to meet the requirements of Section 9.05, any Owner may
petition any court for the removal of the Trustee and the appointment of a successor
Trustee.
38
If a successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, then the retiring Trustee, the County or the Majority
Owners may petition any court for the appointment of a successor Trustee.
Section 9.07. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its assets (or, in the
case of a bank or trust company, its corporate trust assets) to another corporation,
then the resulting, surviving or transferee corporation without any further act will
be the successor Trustee.
Section 9.08. Consent to Jurisdiction and Venue. The Trustee consents to
jurisdiction in the State of North Carolina and venue in Orange County for any
lawsuit arising from the Trust Agreement or the Bonds, or from the related
transactions contemplated by the Trust Agreement or the Bonds.
ARTICLE X
DEFAULTS: REMEDIES
Section 10.01. Events of Default. An "Event of Default" is any of the
following:
(a) Default in the payment of the principal of any Bond when the same
becomes due and payable, whether at the stated maturity of the Bond or upon
proceedings for mandatory (but not optional) redemption.
(b) Default in the payment of any interest on any Bond when the same
becomes due and payable.
(c) The occurrence of an Event of Nonappropriation.
(d) The County breaches or fails to perform or observe any term, condition
or covenant of this Agreement, the Bonds or the Deed of Trust on its part to be
observed or performed, other than as referred to in the preceding subsections,
including payment of any Additional Payment, for a period of 90 days after written
notice specifying the failure and requesting that it be remedied has been given to the
County by any person or entity, unless the Trustee agrees in writing to an extension
of the 90-day period prior to its expiration; provided, however, that if the failure
stated in the notice cannot reasonably be corrected within the notice period and the
39
County institutes corrective action within the notice period, no Event of Default will
be deemed to have occurred so long as the County diligently pursues remedial
action.
(e) Any warranty, representation or statement made by the County in this
Agreement, the Bonds or in the Deed of Trust is found to be incorrect or misleading
in any material respect as of the Closing Date.
(f) Any lien, charge or encumbrance (other than Permitted
Encumbrances) prior to or affecting the validity of the Deed of Trust is found to
exist, or proceedings are instituted to enforce any lien, charge or encumbrance
against the Mortgaged Property and such lien, charge or encumbrance would be
prior to the lien of the Deed of Trust.
Section 10.02. Acceleration. If any Event of Default is continuing, then (a)
the Trustee, by notice to the County, or (b) the Majority Owners, by notice to the
County and the Trustee, may declare the principal of and accrued interest with
respect to the Bonds to be due and payable immediately, and such principal and
interest will thereupon become and be immediately due and payable. The Trustee
must immediately give notice of any acceleration to all Owners. The Trustee may
rescind an acceleration and its consequences if all existing Events of Default have
been cured or waived, if the rescission would not conflict with any judgment or
decree.
Section 10.03. Other Remedies. If an Event of Default is continuing, the
Trustee may pursue any remedy at law or in equity to collect the principal or
interest with respect to the Bonds or to enforce the performance of any provision of
this Agreement, the Bonds, or the Deed of Trust, including by foreclosure on the
Mortgaged Property.
The Trustee may maintain a proceeding even if it does not possess any of the
Bonds or does not produce any of them in the proceeding. A delay or omission by
the Trustee or any Owner in exercising any right or remedy accruing upon an Event
of Default does not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other remedy.
All available remedies are cumulative.
Section 10.04. Waiver of Past Defaults. The Majority Owners, by notice to
the Trustee, may waive an existing Event of Default and its consequences. When an
40
Event of Default is waived, it is cured and stops continuing, but no waiver extends to
any subsequent or other Event of Default or impairs any right consequent to it.
Section 10.05. Majority's Control. The Majority Owners, upon satisfactory
indemnification of the Trustee, may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on it. The Trustee, however, may refuse to follow any direction
that it reasonably believes conflicts with law or this Agreement or, subject to Section
9.01, that the Trustee determines is unduly prejudicial to the rights of other Owners
or would involve the Trustee in personal liability.
Section 10.06. Limitation on Suits. An Owner may not pursue any remedy
with respect to this Agreement or the Bonds (except as provided in Section 10.07)
unless (a) the Owner gives the Trustee notice stating that an Event of Default is
continuing, (b) the Majority Owners make a written request to the Trustee to pursue
the remedy, (c) that Owner or Owners offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense, and (d) the Trustee does not
comply with the request within 60 days after receipt of the request and the offer of
indemnity.
An Owner may not use this Agreement to prejudice the rights of another
Owner or to obtain a preference or priority over the other Owners.
Section 10.07. Rights To Receive Payment. This Agreement preserves the
right of any Owner to receive payment of principal, premium, if any, and interest on
a Bond, on or after the due dates expressed in the Bond, or to sue for the
enforcement of any such payment on or after such dates. These rights of an Owner
may not be impaired or affected without that Owner's consent.
Section 10.08. Collection Suit by Trustee. If an Event of Default occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the County for the whole amount remaining unpaid.
Section 10.09. Trustee May File Proofs of Claim. (a) The Trustee may file
proofs of claim and other papers or documents as may be necessary or advisable to
have the claims of the Trustee and the Owners allowed in any judicial proceedings
relative to the County, its creditors or its property. Unless prohibited by law or
applicable regulations, may vote on behalf of the Owners in any election of a trustee
in bankruptcy or other person performing similar functions.
41
(b) If the Trustee incurs expenses or renders services in any proceedings
resulting from any Default or Event of Default, the parties intend that the expenses
incurred and compensation for services rendered will constitute expenses of
administration under the United States Bankruptcy Code or any similar state or
federal law.
Section 10.10. Priorities. If the Trustee collects any money pursuant to this
Article, it must deposit that money in a special account in the Payment Fund and pay
out that money in the following order:
(a) If the principal of all Bonds has not become or will not be declared due
and payable, all the moneys in the Payment Fund will be applied as follows and in
the following order:
First, Costs and Expenses: to the payment of the costs and expenses of the
Trustee and of the Owners in declaring the Event of Default and pursuing remedies
under this Agreement, including reasonable compensation to its or their agents,
attorneys and counsel.
Second, Interest: to the payment to the persons entitled thereto of all
installments of interest then due in the order of the maturity of the installments,
beginning with the earliest unpaid installment. If the amount available is not
sufficient to pay in full any installment or installments coming due on the same date,
then to the payment thereof ratably, according to the amounts due thereon, to the
persons entitled thereto, without any discrimination or preference.
Third, Principal: to the payment to the persons entitled thereto of the unpaid
principal on any Bonds which have become due, whether at maturity or by call for
redemption, in the order of their due dates, beginning with the earliest unpaid
installment, with interest on the overdue principal at a rate equal to the rate paid on
the Bonds. If the amount available is not sufficient to pay in full all the amounts due
on the Bonds on any date, together with the required interest, then to the payment
thereof ratably, according to the amounts of principal due on that date to the
persons entitled thereto, without any discrimination or preference.
(b) If the principal of all Bonds has become or has been declared due and
payable, all the money will be applied (i) first to pay the fees and expenses as
described in subsection (a), and then (ii) to pay the principal and interest then due
42
on the Bonds, without preference or priority of principal or interest, 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, in each of these cases to the persons entitled thereto without any
discrimination or privilege.
The Trustee may fix the date for any payment to Owners under this Section.
Section 10.11. Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Agreement or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable legal fees, against any
party, having due regard to the merits and good faith of the claims or defenses made
by the party. This Section does not apply to a suit by the Trustee or any authorized
suit by any Owner.
ARTICLE XI
DISCHARGE OF TRUST AGREEMENT
Section 11.01. Bonds Deemed Paid; Discharge of Trust Agreement.
Any Bond will be deemed paid for all purposes of this Agreement when (a) payment
of the principal, premium, if any, and interest on that Bond to the due date of those
amounts (whether at maturity, upon redemption or otherwise) either (i) has been
made in accordance with the terms of the Bonds or (ii) has been provided for by
irrevocably depositing with the Trustee or other fiduciary in escrow (A) cash
sufficient to make the payments or (B) Federal Securities maturing as to principal
and interest in such amounts and at such times as will ensure, without
reinvestment, the availability of sufficient moneys to make those payments and
which are not subject to redemption or purchase prior to maturity at the option of
anyone other than the holder, and (b) all compensation and expenses of the Trustee
have been paid or provided for to the Trustee's satisfaction.
The sufficiency of the deposit referenced above must be evidenced or verified
by a certificate or other writing, in form and substance satisfactory to the Trustee, of
a person or entity experienced in making these calculations as the County may
select.
43
When a Bond is deemed paid as a result of a deposit as provided under (ii)
above, it is no longer secured by or entitled to the benefits of this Agreement, and all
rights to payment of those Bonds are limited to payment from the moneys or
Federal Securities that have been deposited. Those Bonds, however, may still be
transferred, exchanged, registered or replaced as provided in Article XIV, and still
represent installment contracts and obligations of the County payable from that
special fund.
Notwithstanding the foregoing, the County may make no deposit under clause
(a)(ii) above until the County has furnished the Trustee an Opinion of Bond Counsel
to the effect that the deposit of cash or Federal Securities will not cause the Bonds to
become "arbitrage bonds" within the meaning of the Code if the interest on those
Bonds is intended to be not included in gross income for federal income tax
purposes. Also, if a Bond is to be prepaid prior to maturity, notice of redemption of
the Bond must be given in accordance with this Agreement or any supplement or
amendment for the deposit to be deemed a payment of that Bond. If the Bond,
however, is not to be paid or prepaid within the next 60 days following the deposit
date, the County must give the Trustee, in form satisfactory to the Trustee,
irrevocable written instructions as follows:
(A) to provide notice to the Bondholders, as soon as practicable, that the
County has made the deposit required by (a)(ii) above and that the Bond is deemed
to be paid under this Article, and further stating the maturity or redemption date
upon which moneys are to be available for the payment of the principal with respect
to the Bond, and
(B) to give notice of redemption not less than 30 nor more than 60 days prior
to the redemption date for that Bond as provided in this Agreement or any
supplement or amendment.
When all Outstanding Bonds are deemed paid under this Section, the Trustee
must, upon the County's request, acknowledge the discharge of the lien of this
Agreement and repay any excess amounts remaining on deposit in the Funds
established under this Agreement to the County.
The County agrees that no deposit must be made or accepted, and no use
made of any deposit, that would cause any Bonds to be treated as "arbitrage bonds"
within the meaning of the Code if the interest on that Bond is intended to be not
included in gross income for federal income tax purposes.
44
Section 11.02. Application of Trust Money. The Trustee must hold in
trust money or Federal Securities deposited with it pursuant to Section 11.01 and
must apply the deposited money and the money paid with respect to the Federal
Securities in accordance with this Agreement only to the payment of principal,
interest and any applicable redemption premium with respect to the affected Bonds.
ARTICLE XII
INVESTMENT OF MONEYS IN FUNDS
Section 12.01. Investments Authorized.
(a) Subject to the further provisions of this Article XII, the Trustee must
invest and reinvest moneys held by it under this Agreement upon the County's
written direction in Investment Obligations that are Legal Investments. All
investments, if registrable, must be registered in the name of the Trustee or its
assignee for the benefit of the Owners and held by the Trustee. If the County does
not provide the Trustee with written direction as to any investment or reinvestment
of moneys held under this Agreement, the Trustee will invest or reinvest those
moneys in the North Carolina Capital Management Trust (or its successor).
(b) The Trustee may purchase or sell, to itself or to any affiliate, as
principal or agent, any investments of funds held under this Agreement. The Trustee
may act as purchaser or agent in the making or disposing of any investment, may
make any investment through its bond or investment department or those of its
affiliates, and may charge its ordinary and customary fees for those transactions.
(c) The Trustee is not responsible or liable for any loss suffered in
connection with any investment of funds made in accordance with this Section. The
Trustee may conclusively rely on the County's investment directions as to both the
suitability and legality of any investment made at the County's direction, and
therefore the Trustee has no obligation or responsibility with respect to whether
any particular investment is a Legal Investment or an Investment Obligation within
the meaning of this Agreement.
(d) The County must direct the investment and reinvestment of all moneys
in Investment Obligations having maturities not extending beyond the date on
45
which the County estimates those moneys are to be needed for their intended
purposes. Investments will be considered as maturing on the date on which they are
redeemable without penalty at the holder's option or the date on which the Trustee
may require their repurchase without penalty pursuant to a repurchase agreement.
Section 12.02. Held in Trust. The moneys and investments held by the
Trustee under this Agreement are irrevocably held in trust for the benefit of the
Owners, and those moneys, and any income or interest earned thereon, must be
expended only as provided in this Agreement. To the extent permitted by law, those
moneys and investments will not be subject to levy or attachment or lien by or for
the benefit of any creditor of the Trustee or the County, other than the Owners.
Section 12.03. Investments Part of Fund. Any income, profit or loss on
the investment of moneys held by the Trustee under this Agreement must be
credited to the respective fund to which those moneys are credited, except as
otherwise provided in this Agreement.
Section 12.04. Accounting. The Trustee must furnish to the County, not
less frequently than monthly, an accounting of all investments made by the Trustee
in all funds and accounts held by the Trustee. These accountings may be supplied in
the form of the Trustee's customary statements. The Trustee must keep accurate
records of all funds administered by it and of all Bonds paid and discharged.
Although the County recognizes that it may obtain a broker confirmation or written
statement containing comparable information at no additional cost, the County
agrees that the Trustee is not required to issue broker confirmations of investments
for any month for which the Trustee delivers a monthly statement.
Section 12.05. Valuation. To determine the amount on deposit in any
Fund or Account held under this Agreement, the Trustee must value any investment
credited to a Fund or Account at its market value. The Trustee must make these
valuations annually as of each June 30, beginning June 30, 2021, and at such
additional times as this Agreement may require or as the County may request. The
County may not make more than one request in a calendar month.
Section 12.06. Disposition. The Trustee must sell, or present for
redemption, and reduce to cash any investment in a Fund or Account whenever the
cash balance in the Fund or Account is insufficient for its purposes.
46
Section 12.07. Commingling of Moneys in Funds. The Trustee must
separately account for all Funds and Accounts held by it under this Agreement. With
the County's approval, however, the Trustee may commingle for investment
purposes any funds held under this Agreement with any other funds.
Section 12.08. Information Concerning Investments. The Trustee
must establish and maintain written records regarding investments made under
this Article XII and must supply the information to the County at its request. The
Trustee's records must show for each investment obligation information as to: (a)
purchase date; (b) purchase price; (c) any accrued interest paid; (d) face amount;
(e) coupon rate; (f) periodicity of interest payments; (g) disposition price; (h) any
accrued interest received; and (i) disposition date.
Section 12.09. Restricted Yield Investments. The County may direct
the investment of any funds held under this Agreement without regard to yield,
despite any provision in this Agreement directing investment with regard to the
Restricted Yield, but only if the County provides the Trustee with an Opinion of
Bond Counsel, in form and substance reasonably acceptable to the Trustee, to the
effect that such an investment would not adversely affect any exclusion from gross
income that would otherwise be applicable to interest payments on the Bonds.
ARTICLE XIII
AMENDMENTS OF AND SUPPLEMENTS TO
TRUST AGREEMENT, BONDS OR DEED OF TRUST
Section 13.01. Without Owners' Consent. The County and the Trustee may
amend or supplement this Agreement, any Bonds or the Deed of Trust without
notice to or consent of any Owner for any of the following purposes, or for any
combination of the following purposes:
(a) to cure any ambiguity, inconsistency or formal defect or omission
(b) to grant to the Trustee for the benefit of the Owners additional rights,
remedies, powers or authority
47
(c) to subject to this Agreement additional collateral or to add other
agreements of the County, including the addition of real estate or other collateral to
be subject to the lien of this Agreement or the Deed of Trust
(d) to permit the qualification of this Agreement under any federal or state
statute, whenever enacted, and, in that connection, to add to this Agreement or any
other supplemental trust agreement any other terms, conditions and provisions as
may be permitted or required by the federal or state statute
(e) to provide for the issuance of Additional Bonds as otherwise permitted
by this Agreement
(f) to provide for Bonds to be issued or exchanged for Bonds in any other
form or format at that time permitted by law
(g) to evidence the succession of a new Trustee, or to provide for the
appointment and operation of a Bond registrar separate from the Trustee
(h) to make any other change that does not materially adversely affect the
rights of any Owner
The Trustee may conclusively rely on a County Certificate to the effect that a
proffered amendment or supplement is within the scope of this Section 13.01.
At least five Business Days prior to its execution and delivery of any
supplemental agreement or instrument for any of the purposes described in this
Section, the Trustee shall provide for a notice of the proposed agreement or
instrument to be mailed first-class, postage prepaid, to the LGC and to all Owners of
Bonds at the addresses shown in the register maintained pursuant to Section 14.05.
The notice must briefly set forth the nature of the proposed agreement or
instrument, or include a copy, and state that copies of the proposed agreement or
instrument are available to all Owners of Bonds upon written request to the County
or the Trustee at addresses stated in the notice.
The County must pay the expenses of any mailing and copies required under
this Section. A failure on the Trustee's part to mail the notice required by this
Section will not affect the validity of any supplemental agreement or instrument.
48
Section 13.02. With Owners' Consent. (a) If Section 13.01 does not permit
an amendment of or supplement to this Agreement, any Bonds or the Deed of Trust
without any consent of Owners, the County and the Trustee may enter into that
amendment or supplement only with the consent of the Majority Owners.
(b) Without the consent of each Owner affected, however, no amendment
or supplement to this Agreement, the Deed of Trust or any Bonds may (i) extend the
maturity of the principal or interest on any Bond; (ii) reduce the principal amount
of, or rate of interest on, any Bond; (iii) effect a privilege or priority of any Bond or
Bonds over any other Bond or Bonds; (iv) reduce the percentage of the principal
amount of the Bonds required for consent to any amendment or supplement, (v)
intentionally impair any exclusion of interest on the Bonds from the federal gross
income of the Owner of any Bond to which that interest was intended to be entitled;
(vi) change any redemption terms of those Bonds; (vii) create a lien ranking prior to
or on a parity with the lien of this Agreement on the property pledged under this
Agreement (except with respect to a parity pledge for the benefit of the Owners of
Additional Bonds); or (viii) deprive any Owner of the lien created by this Agreement
on any property.
In addition, if moneys or Federal Securities have been deposited or set aside
with the Trustee pursuant to Article XI for the payment of Bonds and those Bonds
have not in fact been paid in full, the parties may make no amendment to the
provisions of that Article without the consent of each Owner affected.
Section 13.03. Procedure for Amendment with Owners' Consent.
(a) If a proposed amendment requires the consent of Owners, the Trustee
must establish a record date, and Owners as of that record date will be the Owners
with the right to consent to the proposed amendment or supplement. This record
date must be a date not less than five nor more than 45 Business Days after the date
the Trustee receives notice or direction from the County to solicit consents.
(b) The Trustee shall provide for there to be mailed to the LGC and to all
Owners of Bonds a copy of the proposed supplement or amendment, together with a
request to the Owners for their consent. The Trustee shall send this notice by first-
class mail, postage prepaid, to the Owners of Bonds at the addresses shown in the
register maintained pursuant to Section 14.05, but failure to send or receive copies
of the supplement or amendment and request does not affect the validity of the
supplement or amendment when assented to as provided in this Section. The
49
request mailed by the Trustee must also designate a date not more than 180 nor less
than 30 days following the mailing date, as designated by the County, by which
consent must be returned to be effective. The County must pay the expenses of any
mailing and copies required under this Section.
(c) The proposed supplement or amendment will not become effective
unless and until there are filed with the Trustee the written consent of the Owners
(as of the record date) of not less than a majority in aggregate principal amount of
the Bonds Outstanding as of the established record date (exclusive of Bonds
disregarded from the calculation as provided in Section 13.04) and the Trustee has
mailed the notices required by Section 13.09. Each consent will be effective only if
accompanied by proof of ownership of the Bonds for which the consent is given as
provided in Section 13.05 and given within the time designated as provided in
subsection (b) above.
Section 13.04. Bonds Excluded from Calculation. Bonds owned or held by
or for the account of the County or by any person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, the County (except
any Bonds held in any pension or retirement fund), are not deemed Outstanding for
any action or any calculation of Outstanding Bonds provided for in this Agreement.
Similarly, Owners of those Bonds are not entitled to take any action provided for in
this Agreement. If, however, all Outstanding Bonds are owned by the County or
other Owners described in this paragraph, then none of the Outstanding Bonds are
excluded from calculation under this paragraph.
For purposes of this Section, the Trustee may assume that no Bonds are
excluded from any calculation of Outstanding Bonds provided for in this Agreement
except for Bonds (i) that are registered in the County's name or (ii) for which the
Trustee has received written notice that the Bonds are owned or held by or for the
account of the County or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the County.
The County and the Trustee intend, however, that the County's ownership or
holding of Bonds will not, by itself, give rise to an extinguishment of the Bonds or of
any obligation arising under this Agreement.
The Trustee may (but is not required to) provide for each Owner, before an
Owner's consent is deemed effective, to certify or otherwise provide evidence to
50
establish whether the Bonds as to which the consent is given are excluded as
provided in this Section.
Section 13.05. Owners' Consents. Any consent or other instrument required
to be signed by Owners may be in any number of concurrent documents and may be
signed by an Owner or by the Owner's agent appointed in writing. Proof of the
execution of the instrument, or of the instrument appointing an agent, and of the
ownership of Bonds, if made in the following manner, will be conclusive for any
purposes of this Agreement regarding any action taken by the Trustee.
(a) The fact and date of a person's signing an instrument may be proved by
the certificate of any officer in any jurisdiction who by law has power to take
acknowledgments within that jurisdiction that the person signing the writing
acknowledged before the officer the execution of the writing, or by an affidavit of
any witness to the signing.
(b) The fact of ownership of Bonds, the amount or amounts, numbers and
other identification of such Bonds and the date of holding will be proved by the
registration books kept pursuant to this Agreement.
Section 13.06. Effect of Consents. After an amendment or supplement
becomes effective, it binds every Owner. Any consent is binding upon and
irrevocable by the Owner of the Bond giving the consent and on any subsequent
Owner (whether or not any subsequent Owner has notice of the consent), unless the
consent is revoked in writing by the Owner giving the consent, or a subsequent
Owner of the same Bonds, by filing a revocation with the Trustee prior to the time
when the Trustee has mailed the notice provided for in Section 13.09.
Section 13.07. Trustee's Execution of Amendments and Supplements.
The Trustee must execute and deliver any amendment or supplement to the Trust
Agreement or the Bonds authorized by this Article if the amendment or supplement
does not adversely affect the rights, duties, liabilities or immunities of the Trustee,
as the Trustee may determine in its reasonable discretion. If the amendment or
supplement has such an adverse effect, the Trustee may, but need not, execute and
deliver it. In determining to execute and deliver an amendment or supplement, the
Trustee is entitled to receive and may conclusively rely on an Opinion of Counsel to
the effect (a) that the amendment or supplement is authorized by this Agreement
and (b) that upon execution it will be valid and binding upon the party or parties
executing it in accordance with its terms.
51
Section 13.08. LGC's Consent Required. No amendment or supplement to
this Agreement, the Deed of Trust or the Bonds will become effective unless the LGC
delivers to the County and the Trustee its prior written consent to the amendment
or supplement.
Section 13.09. Notice of Amendments and Supplements. The Trustee
must cause notice of the execution of any supplement or amendment to this
Agreement or the Bonds to be mailed to the Owners. The notice will, at the Trustee's
option, either (a) briefly state the nature of the amendment or supplement and that
copies of it are on file with the Trustee for inspection by Owners, or (b) enclose a
copy of the amendment or supplement. The County must pay the expenses of any
mailing and copies required under this Section. Any failure on the Trustee's part to
mail the notice required by this Section will not affect the validity of any
supplemental agreement.
Section 13.10. Notation on or Exchange of Bonds. If an amendment or
supplement changes the terms of a Bond, the Trustee may require the Owner of that
Bond to deliver it to the Trustee. The Trustee may place an appropriate notation on
the Bond about the changed terms and return it to the Owner. Alternatively, if the
Trustee and the County agree, in exchange for the Bond the County will execute, and
the Trustee will authenticate and deliver, a new Bond that reflects the changed
terms.
ARTICLE XIV
PROVISIONS FOR THE FORM,
REGISTRATION AND EXCHANGE OF BONDS
Section 14.01. Form and Details of Bonds. Each Series of Bonds will be
dated the date of the initial delivery of those Bonds to their initial purchaser. The
Bonds will be issuable only as fully registered Bonds in a minimum denomination of
$5,000 and integral multiples of $5,000 above the minimum. Each Bond will be
payable as to interest (a) from its date, if that Bond is authenticated prior to the
Record Date preceding its first Payment Date, (b) from the succeeding Payment
Date, if that Bond is authenticated between a Record Date and the succeeding
Payment Date, or (c) otherwise from the Payment Date that is, or immediately
precedes, the date on which that Bond is authenticated; provided, however, that if at
the time of authentication of a Bond any payment of interest on that Bond is in
52
default, then that Bond is payable as to interest from the date to which interest has
been paid. Principal, interest and any redemption premium for all Bonds are
payable in lawful money of the United States of America.
Section 14.02. Book-Entry-Only Form. (a) All Bonds will be issued by
means of a book-entry system, with one certificate for each maturity of each series
of Bonds immobilized at DTC and not available for distribution to the public. Bonds
registered in the name of DTC or its nominee may be held in custody by the Trustee
in lieu of immobilization at DTC if permitted under DTC's rules and procedures.
The parties agree that transfer of beneficial ownership interests in the Bonds
in the principal amounts of $5,000 and integral multiples of $5,000 above the
minimum will be effected on the records of DTC and its participants pursuant to
rules and procedures established by DTC and its participants. Principal, interest and
any redemption premium on the Bonds are payable to DTC or its nominee as
registered owner of the Bonds. The parties agree that transfer of principal, interest
and any redemption premium to DTC participants will be DTC's responsibility, and
that transfer of principal, interest and any redemption premium on the Bonds to
beneficial owners of the Bonds by DTC participants will be the responsibility of
those participants and other nominees of beneficial owners. Neither the Trustee nor
the County will be responsible or liable for transfer of payments beyond DTC or for
maintaining, supervising or reviewing the records maintained by DTC, its
participants, or persons acting through those participants.
(b) If (i) DTC determines not to continue to act as securities depository for
the Bonds or (ii) the County directs, the County and the Trustee will arrange to
discontinue the book-entry system with DTC. If the County designates an alternate
qualified securities depository to replace DTC, that depository will replace DTC and
all references to DTC in this Agreement will be deemed references to the alternate
depository. If the County does not designate another depository to replace DTC, the
County must deliver fully registered Bonds as replacements for Bonds in book-entry
form for the Trustee's authentication and delivery.
(c) In connection with any delivery of certificated Bonds, the County or the
Owner shall provide, or cause to be provided, to the Trustee all information
necessary to allow the Trustee to comply with any applicate tax reporting
obligations, including without limitation any cost basis reporting obligations under
Section 6045 of the Internal Revenue Code. The Trustee may rely on the information
53
provided to it, and the Trustee has no responsibility to verify or ensure the accuracy
of the information provided.
Section 14.03. Execution. The Bonds must be signed on the County's
behalf by the manual or facsimile signature of the presiding officer of the County
Board or the County Manager, and the County's seal must be impressed or
imprinted on the Bonds by facsimile or otherwise and attested by the manual or
facsimile signature of the County Clerk or any Deputy or Assistant Clerk. If any
County officer whose signature is on a Bond no longer holds that office at the time
the Trustee authenticates the Bond, that Bond is nevertheless valid. If a person
signing a Bond is the proper officer on the actual date of execution, the Bond is valid
even if that person is not the proper officer on the nominal date of action.
Section 14.04. Authentication. Each Bond must bear a certificate of
authentication from the Trustee. No Bond will be valid until the Trustee has duly
executed the certificate of authentication and inserted the authentication date on
that Bond. The Trustee must authenticate each Bond with the signature of an
authorized representative or employee, but it is not necessary for the same person
to authenticate all the Bonds. Only Bonds authenticated as provided in this Section
are entitled to any right or benefit under this Agreement.
Section 14.05. Registration and Exchange of Bonds; Persons Treated
as Owners. The Trustee will establish and maintain a register as to the ownership
of Bonds. An Owner may exchange and transfer Bonds only through the register.
Upon surrender for transfer to the Trustee of any Bond, duly endorsed for transfer
or accompanied by an assignment duly executed by the Owner or the Owner's duly
authorized attorney, the Trustee will authenticate a new Bond or Bonds in an equal
total principal amount and registered in the name of the transferee.
Bonds may be exchanged for an equal total principal amount of Bonds of
different but authorized denominations. The Trustee must authenticate and deliver
Bonds that the Owner making the exchange is entitled to receive, bearing numbers
not then Outstanding.
The Trustee is not required to exchange or register the transfer of any Bond
after the giving of notice calling such Bond for redemption. If it does, the Trustee
must deliver to the transferee any applicable redemption notice when it effects a
transfer or exchange of any Bond after the mailing of notice calling the Bond or any
portion of the Bond for redemption.
54
The Owner is the absolute owner of the Bond for all purposes, and payment of
principal and interest will be made only to or upon the written order of the Owner
or the Owner's legal representative, except that payments will be made to the
persons shown as the owners as of the applicable Record Date.
The Trustee must require the payment by an Owner requesting exchange or
transfer of any tax or other governmental charge required to be paid in respect of
the exchange or transfer but must not impose any other charge.
Section 14.06. Mutilated, Lost, Stolen or Destroyed Bonds.
(a) If any Outstanding Bond is damaged, mutilated, lost, stolen or
destroyed, the County must execute, and the Trustee must authenticate and deliver,
a replacement Bond, of the same tenor as the damaged, mutilated, lost, stolen or
destroyed Bond, in the manner provided below.
(b) (i) The Owner must apply to the Trustee for exchange and
substitution of damaged, mutilated, lost, stolen or destroyed Bonds. In every case,
the applicant for a replacement Bond must furnish to the County and the Trustee
such security or indemnity as each may reasonably require. In every case of loss,
theft or destruction of a Bond, the applicant must also furnish to the County and the
Trustee evidence to their reasonable satisfaction of the loss, theft or destruction. In
the case of damage or mutilation of a Bond, the applicant must surrender the
damaged or mutilated Bond.
(ii) Notwithstanding the foregoing, if any such Bond has matured, and no
default is then continuing in the payment of the principal or interest on that Bond,
the County may authorize the payment of the same (without surrender thereof
except in the case of a damaged or mutilated Bond) instead of issuing a substitute
Bond, provided security or indemnity is furnished as provided above in the case of a
lost, stolen or destroyed Bond.
(d) The requirements for indemnity in this Section are in addition to any
requirements imposed by law, including any requirements of General Statutes
Section 159-137.
(d) The Trustee shall charge the Owner of such Bond with all expenses in
connection with the issuance of any substitute Bond. Every substitute Bond issued
55
pursuant to the provisions of this Section because any Bond is lost, stolen or
destroyed, whether or not the lost, stolen or destroyed Bond may be found at any
time, or may be enforceable by anyone, is entitled to all the benefits of this
Agreement equally and proportionally with all other Bonds duly issued under this
Agreement.
Section 14.07. Cancellation. Whenever a Bond is delivered to the
Trustee for cancellation (upon payment, redemption or otherwise) or for transfer,
exchange or replacement, the Trustee must promptly destroy the Bond and deliver a
written certificate of that destruction to the County.
Section 14.08. Temporary Bonds. Prior to the preparation of Bonds in
definitive form the County may execute, and the Trustee must then authenticate and
deliver, temporary Bonds in any denominations as the County may determine, but
otherwise in substantially the form set out in this Agreement. The County must
promptly prepare, execute and deliver to the Trustee, before the first Payment Date
for those Bonds, permanent Bonds in definitive form, and thereupon, upon
surrender of Bonds in temporary form, the Trustee will authenticate and deliver in
exchange therefor Bonds in definitive form of the same maturity and having an
equal aggregate principal amount. Until exchanged for Bonds in definitive form,
Bonds in temporary form are entitled to the lien and benefit of this Agreement.
Section 14.09. Non-Presentment of Bonds. (a) If any Bond is not
presented for payment when the principal of that Bond becomes due (whether at
maturity, upon acceleration or call for redemption or otherwise), all liability to the
Owner for the payment of that Bond will be completely discharged if funds sufficient
to pay the Bond and the premium, if any, and interest due on that Bond are held by
the Trustee for that Owner's benefit. It is then the Trustee's duty to hold these funds
subject to subsection (b) below, without liability for interest, for the benefit of the
Owner. The Owner will thereafter be restricted exclusively to those funds for any
claim of whatever nature under this Agreement with respect to that Bond.
(b) Notwithstanding any provision of this Agreement to the contrary, the
Trustee must dispose of moneys held by it for the payment of principal, premium, or
interest on Bonds left unclaimed for five years after the date the principal on those
Bonds becomes due in accordance with N.C. Gen. Stat. Sec. 11613-51 or any successor
provision. After the disposition, the Owners of those Bonds are thereafter entitled to
look only to their remedies under N.C. Gen. Stat. Chapter 116B or any successor
56
provision. The Trustee and the County have no further responsibility with respect to
that money or for that payment.
Section 14.10. Supplemental Agreements May Vary Terms. Any
supplement or amendment to this Agreement may, by its express terms only, vary
any of the terms and provisions of this Article with respect to any Series of Bonds.
ARTICLE XV
ADDITIONAL PROVISIONS
Section 15.01. Notices.
(a) Any communication provided for in this Agreement must be in English
and must be in writing, and "writing" includes facsimile transmission and electronic
mail.
(b) For the purposes of this Agreement, any communication sent by
facsimile transmission or electronic mail will be deemed to have been given on the
date the communication is similarly acknowledged by a County Representative (in
the case of the County) or other authorized representative (in the case of any other
party). No such communication will be deemed given or effective without such an
acknowledgment. Any such electronic communication to the Trustee is subject to
the provisions of Section 9.02.
(c) Any other communication under this Deed of Trust will be deemed
given on the delivery date shown on a United States Postal Service certified mail
receipt, or a delivery receipt (or similar evidence) from a national commercial
package delivery service, if addressed as follows:
(i) if to the County, to Orange County Manager, Re: Notice under 2021
LOBS Deed of Trust, Post Office Box 8181, Hillsborough, NC 27278
(ii) if to the Trustee, to The Bank of New York Mellon Trust Company, N.A.,
Re: Notice for 2021 Financing for Orange County (NC), 4655 Salisbury Rd., STE 300,
Jacksonville, FL 32256
57
(iii) if to the LGC, to North Carolina Local Government Commission,
Attention: Secretary, Re: Re: Notice for 2021 Orange County LOBS Financing, 3200
Atlantic Avenue, Longleaf Building, Raleigh NC 27604
(e) Any addressee may designate additional or different addresses for
communications by notice given under this Section to each of the others.
(f) Whenever this Agreement requires the giving of a notice, the person
entitled to receive the notice may waive the notice, in writing. The giving or receipt
of the notice will then not be a condition to the validity of any action taken in
reliance upon the waiver.
Section 15.02. Limitation of Rights. Nothing expressed or implied in this
Agreement or the Bonds gives any person other than the Trustee, the County and
the Owners any right, remedy or claim under or with respect to this Agreement.
Section 15.03. Severability. If any provision of this Agreement is
determined to be unenforceable, that does not affect any other provision of this
Agreement.
Section 15.04. Non-Business Days. If a Payment Date is not a Business Day,
then payment may be made on the next Business Day, and no interest will accrue for
the intervening period. When any other action is provided in this Agreement to be
done on a day or within a time period named, and the day or the last day of the
period is not a Business Day, the action may be done on the next ensuing Business
Day.
Section 15.05. Governing Law; Forum. The parties intend that North
Carolina law will govern this Agreement, the Bonds, and all matters of their
interpretation. To the extent permitted by law, the parties agree that any action
brought with respect to this Agreement must be brought in the North Carolina
General Court of Justice in Orange County, North Carolina.
Section 15.06. Limitation on Liability of Officers and Agents. No officer,
agent or employee of the County, the Trustee or the LGC is subject to any personal
liability or accountability by reason of that officer's execution of this Agreement, the
Bonds or any other documents related to the transactions contemplated by this
Agreement. These officers or agents are deemed to execute such documents in their
official capacities only, and not in their individual capacities. This Section does not
58
relieve any person from the performance of any official duty provided by law or by
this Agreement.
Section 15.07. Binding Effect. This Agreement is binding upon, inures to the
benefit of and is enforceable by the parties and their respective successors and
assigns.
Section 15.08. Waiver of Notice. Whenever in this Agreement the giving of
notice is required, the giving of such notice may be waived in writing by the person
entitled to receive such notice, and the giving or receipt of such notice will not be a
condition precedent to the validity of any action taken in reliance upon such waiver.
Section 15.09. Counterparts. This Agreement may be signed in several
counterparts, including separate counterparts. Each will be an original, but all of
them together constitute the same instrument.
Section 15.10. Definitions; Rules of Interpretation. Unless the context
clearly requires otherwise, capitalized terms used in this Agreement and not
otherwise defined have the meanings set forth in Exhibit B, and this Agreement will
be interpreted in accordance with the rules set forth in Exhibit B.
[The remainder of this page has been left blank intentionally.]
59
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed, sealed and delivered in their corporate names by their duly authorized
representatives, all as of December 1, 2021.
ORANGE COUNTY,
ATTEST: NORTH CAROLINA
By:
Laura Jensen Bonnie B. Hammersley
Clerk, Board of Commissioners County Manager
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
By: —
Printed name:
Title:
Exhibits:
A Project description
B Definitions; Rules of Interpretation
C Form of the Bonds
D Schedule of principal and interest payments
E Form of requisition
[Trust Agreement dated as of December 1, 2021]
60
Exhibit A - Project Description
Component Expected amount ($)
New money projects (see detail below)
Loan refinancings (see detail below)
Financing Costs
TOTAL
New money projects with estimated amounts
Component Estimated Cost
Court Street Annex Renovations $ 188,600
Criminal Justice Resource Department Expansion/Renovation $ 205,779
Accessibility&Security Improvements $ 194,643
Government Services Annex Stormwater& Renovations $ 375,000
HVAC Projects $ 714,203
Major Plumbing Repairs $ 195,343
Justice Facility Improvements $ 43,221
Parking Lot Improvements $ 57,280
Roofing&Building Fagade Improvements $ 1,130,353
Whitted Building Stormwater&Renovations $ 942,372
Link Center Remediation $ 282,377
IT Fiber Connectivity $ 302,532
ITGC Initiatives& IT Infrastructure $ 372,097
Solid Waste—Improvements&Vehicle Replacement $ 319,952
61
Emergency Services Vehicle Replacements $ 801,802
Sheriff vehicle replacements $ 107,104
Communication System Improvements $ 150,000
Blackwood Farm Park Construction $ 2,935,000
Parks—Renovations& Easements $ 420,486
Sportsplex—Maintenance& Repairs $ 698,304
Land Banking—Affordable Housing $ 628,313
Orange County Schools—Recurring Capital Projects $ 1,200,300
Orange County Schools—Maintenance& Improvements $ 651,586
Chapel Hill-Carrboro Schools—Recurring Capital Projects $ 1,799,700
Chapel Hill-Carrboro Schools—IT Infrastructure $ 1,519,261
Chapel Hill-CarrboroSchools—Supplemental Deferred Maintenance $ 631,740
Chapel Hill-Carrboro Schools—Various Maintenance& Improvements $ 1,808,454
Total Project Costs $ 18,675,802
Loan refinancings - County obligations that may be refinanced
Component Estimated Cost
2014 IPC Bank of America $ 3,600,000
2014 NC DEQ Loan $ 760,000
Series 2012 Limited Obligation Bonds $ 3,805,000
2017 IFC (Sterling) $ 9,895,000
Total Loan Amounts Refinanced $ 18,060,000
62
The amounts stated above are estimates only. The County may use any portion of
the Amount Advanced for any of the Financed Facilities or any of the Project Costs,
subject to the County's obligation to undertake and complete those components of
the project related to the Pledged Facilities and the limitation on the use of funds
only for Project Costs.
Components of the Project related to the Mortgaged Property include the
following projects shown in the table above:
• Whitted Center improvements
• Blackwood Farm Park improvements
63
Exhibit B -- Definitions: Rules of Interpretation
Definitions. For all purposes of this Agreement, unless the context requires
otherwise, the following terms have the following meanings.
"2021 Bonds" means the [$45,000,000] original aggregate principal amount
Limited Obligation Bonds, Series 2021, issued pursuant to this Agreement. The
Series A Bonds and the Series B Bonds together constitute all the 2021 Bonds.
"Additional Bonds" means any Bonds delivered pursuant to Section 1.06.
"Additional Payments" means the Trustee's reasonable and customary fees
and expenses, any of the Trustee's expenses (including legal fees, costs and
expenses) in prosecuting or defending any action or proceeding in connection with
this Agreement, or any other amounts payable by the County as a result of its
covenants under this Agreement, the Bonds or the Deed of Trust (together with
interest that may accrue on any of the above if the County fails to pay the same, as
set forth in this Agreement or in the Deed of Trust).
"Amount Advanced" has the meaning assigned in Section 1.01.
"Bond Counsel" means any attorney or firm of attorneys nationally
recognized on the subject of municipal obligations as the County may select from
time to time.
"Bond Payments" means all the amounts due for payment of principal,
interest and redemption premium (as applicable) on Bonds.
"Bondholder," means the person in whose name a Bond is registered on the
registration books maintained by the Trustee.
"Bonds" means, together, the 2021 Bonds and all Additional Bonds.
"Business Day" means any day (a) other than a day on which banks in New
York, New York, or the city to which notices to the Trustee under this Agreement are
to be sent, are required or authorized to close, and (b) on which the New York Stock
Exchange is not closed.
64
"Closing Date" means the date on which this Agreement is first executed and
delivered by the parties and the 2021 Bonds are delivered to their initial purchaser,
which the parties expect to be on or about June , 2021.
"Code" means the Internal Revenue Code of 1986, as amended, including
regulations, rulings and revenue procedures promulgated thereunder or under the
Internal Revenue Code of 1954, as amended, as applicable to the Bonds.
"Construction Contract" means any agreement between the County and any
other person or entity related to any part of the construction of the Pledged
Facilities, including contracts for site preparation and related work.
"Contract Payments" means all Bond Payments and Additional Payments.
"Contract Term" means the time beginning with the Closing Date and
continuing until no Bonds are Outstanding under this Agreement.
"County" means Orange County, North Carolina, or its successors.
"County Board" means the County's governing board as from time to time
constituted.
"County Certificate" means any written document (in whatever form,
however designated) executed and delivered by a County Representative.
"County Representative" means the County Manager, the County's statutory
finance officer, or any other person or persons at the time designated, by a written
certificate furnished to the Trustee that (a) is signed on the County's behalf by the
County Manager or the presiding officer of the County Board to act on the County's
behalf (or to perform any specified act) under this Agreement, and (b) contains the
specimen signature of the designated person.
"Deed of Trust" means the Deed of Trust and Security Agreement dated as of
June 1, 2021, from the County to a deed of trust trustee for the Trustee's benefit, as
it may be duly amended or supplemented.
"Deed of Trust Trustee" means the person or entity serving in that capacity
from time to time under the Deed of Trust.
65
"Default" means an event or condition that, with notice or the passage of time
or both, would become an Event of Default.
"DTC" means The Depository Trust Company, New York, New York, or its
successors as the securities depository maintaining a book-entry system for
recording beneficial ownership interests in the Bonds
"EMMA System" means the "EMMA" continuing disclosure system maintained
by the MSRB, or any successor to its functions.
"Event of Default" has the meaning set forth in Section 10.01.
"Event of Nonappropriation" means a failure or refusal by the County Board
to include funds for Contract Payments in the County's budget for any Fiscal Year, or
any reduction or elimination of an appropriation for Contract Payments, all as
further described in Section 4.02.
"Federal Securities" means, to the extent the same are Legal Investments, (a)
direct obligations of the United States of America for which its full faith and credit
are pledged, or (b) securities or obligations evidencing direct ownership interests in
specified portions (principal or interest) of obligations described in (a), and
expressly includes obligations stripped by the United States Treasury itself.
"Financed Facilities" means any facilities, equipment or other assets or
undertakings paid for or refinanced in whole or in part from the proceeds of Bonds,
including the Pledged Facilities but also including those assets and undertakings
paid for from the proceeds of loans refinanced through the issuance of the existing
County obligations referenced in Exhibit A.
"Financing Costs" means all professional and administrative costs related to
the authorization, execution and delivery of Bonds, including printing and
publication costs and legal, accounting, advisory and other fees and expenses.
Financing Costs are a subset of Project Costs.
"Fiscal Year" means the County's fiscal year beginning July 1, or such other
fiscal year as the County may later lawfully establish, and also includes the period
between the Closing Date and June 30, 2021.
66
"Independent Counsel" means an attorney duly admitted to the practice of
law in the State as the County may select from time to time.
"Interest Account" means the account of that name in the Payment Fund
established in Section 3.04.
"Legal Investments" means all investments as are legal investments for the
County's funds, as determined at the time of investment, and "Investment
Obligations" means the securities purchased as Legal Investments and held under
this Agreement.
%GC" means the North Carolina Local Government Commission, or any
successor to its functions.
"Majority Owners" means, as of any date, the Owners of at least a majority in
principal amount of the Bonds then Outstanding.
"Mortgaged Property" has the meaning assigned to that term in the Deed of
Trust, and generally includes the Pledged Facilities and the Pledged Sites.
"MSRB" means the Municipal Securities Rulemaking Board, or any successor
to its functions.
"Net Proceeds" means all payments and proceeds derived from (a) claims
made on account of insurance coverages required under this Agreement, (b) any
exercise of condemnation or eminent domain authority related to all or any portion
of the Mortgaged Property, (c) proceeds of title insurance related to the Mortgaged
Property, or (d) any sale of the Pledged Facilities, as well as all judgments,
settlements or other payments in lieu of any of the foregoing, but in any case
reduced by the sum of all amounts (including legal fees, costs and expenses)
expended by the County or the Trustee (i) to collect those gross proceeds or (ii) to
remedy the event giving rise to the proceeds, all of which amounts will be paid or
reimbursed from the gross proceeds.
"Net Proceeds Fund" means the Orange County 2021 Net Proceeds Fund
established in Section 3.04.
"Opinion of Counsel" or "Opinion of Bond Counsel" means a written opinion
of Independent Counsel or Bond Counsel, as appropriate.
67
"Outstanding," when used with reference to Bonds, or "Bonds Outstanding,"
means all Bonds which have been authenticated and delivered by the Trustee under
this Agreement and not yet paid, except the following:
(a) Bonds canceled or purchased by or delivered to the Trustee for
cancellation;
(b) Bonds that have become due (at maturity or on redemption,
acceleration or otherwise) and for the payment, including interest accrued to the
due date, of which the Trustee holds sufficient moneys;
(c) Bonds deemed paid in accordance with Article XI; and
(d) Bonds in lieu of which others have been authenticated under Section
14.05 (relating to registration and exchange of Bonds) or Section 14.06 (relating to
mutilated, lost, stolen, destroyed or undelivered Bonds).
"Owner," when used with reference to a Bond, means the person in whose
name that Bond is registered on the registration books maintained by the Trustee.
"Payment Date" means, with respect to the 2021 Bonds, each June 1 and
December 1 beginning December 1, 2 02 1, and with respect to any Additional Bonds
means the dates specified for principal and interest payments with respect to those
Additional Bonds.
"Payment Fund" means the Orange County 2021 Bond Payment Fund
established in Section 3.04.
"Permitted Encumbrances" means, as of any particular time, (a) the
encumbrances shown on Exhibit C to the Deed of Trust, (b) liens for taxes and
assessments not then delinquent, or liens which may remain unpaid pursuant to
Section 5.14, (c) the Deed of Trust, (d) any lien or encumbrance made by its terms
expressly subordinate to the lien of the Deed of Trust, and (e) easements and rights-
of-way granted by the County pursuant to Section 1-6 of the Deed of Trust.
"Pledged Facilities" has the meaning ascribed to that term in the Deed of
Trust, and generally includes the County's Whitted Building, its Blackwood Farm
Park,
68
"Pledged Sites" has the meaning ascribed to that term in the Deed of Trust,
and generally includes the real property upon which the Pledged Facilities are
located (or are to be constructed) and associated property.
"Redemption Account" means the account of that name in the Payment Fund
established in Section 3.04.
"Principal Account" means the account of that name in the Payment Fund
established in Section 3.04.
"Project" has the meaning ascribed to that term in the recitals to this
Agreement.
"Project Costs" means all costs of carrying-out of the Project, including the
costs of the design, planning, constructing, acquiring, installing, equipping of
improvements to the Pledged Facilities, all as determine d in accordance with
generally accepted accounting principles and that will not adversely affect the
exclusion from gross income for federal income tax purposes of interest on Bonds to
which it is intended that interest will be entitled. "Project Costs" include (a) sums
required to reimburse the County or its agents for advances made for any costs
otherwise described in this definition, (b) interest during the period of acquisition
and construction of improvements and for up to six months thereafter, and (c) all
Financing Costs and Refinancing Costs.
"Project Fund" means the Orange County 2021 Project Fund established in
Section 3.01.
"Record Date" means the end of the calendar day on the 15th day of the
month (whether or not a Business Day) preceding a Payment Date.
"Refinancing Costs" means all costs related to the payment in full of the
County obligations to pay principal and interest under the County obligations
described in Exhibit A. Refinancing Costs are a subset of Project Costs.
"Restricted Yield" means an annual "yield," within the meaning of Treas. Regs.
Secs. 1.103-13(c), -13(d), 1.148-9T(a), not in excess of an annual "yield" equal to
69
"Rule 15c2-12" means Rule 15c2-12 promulgated by the United States
Securities Exchange Commission under the Securities Act of 1934.
Section 160A-20" means Section 160A-20 of the North Carolina General
Statutes.
"State" means the State of North Carolina.
"Term Bonds" means the 2021 Bonds maturing in the years , which
are subject to sinking fund redemption as provided in Section 2.01(b) and 2.05.
"Trust Agreement" or "Agreement" means this Agreement, as it may be duly
amended or supplemented.
"Trustee" means the bank or trust company from time to time serving as
trustee under this Agreement, whether the original or a successor Trustee.
Rules of Interpretation. Unless the context otherwise requires,
(a) An accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles, and any accounting
term should be understood to include any successor term or other new term with a
substantially equivalent function.
(b) Unless otherwise indicated, references to Articles, Sections and
Exhibits are to the Articles, Sections and Exhibits of this Agreement.
(c) Words importing the singular will include the plural and vice versa,
and words importing the masculine gender will include the feminine and neuter
genders as well, and vice versa.
(d) The headings on sections and articles are solely for convenience of
reference. They do not constitute a part of this Agreement nor should they affect its
meanings, construction or effect.
(e) Words importing the redemption or calling for redemption of Bonds
should not be deemed to refer to or connote the payment of Bonds at their stated
maturity.
70
(f) Reference to any statute or regulation should be understood to include
any successor provision.
(g) All references to the payment of Bonds are references to payment of
principal of and premium, if any, and interest with respect to the Bonds.
(h) The use of the term "including" should in all cases be understood to
mean "including, without limitation."
(i) For any interest rate for which a basis of calculation is not specified,
that interest should be calculated on the basis of a 360-day year consisting of twelve
30-day months.
71
Exhibit C - Form of Series A Bond
REGISTERED Number R-X REGISTERED
ORANGE COUNTY, NORTH CAROLINA
Limited Obligation Bond, Series 2021
INTEREST RATE MATURITY DATE DATED DATE CUSIP
% December 1, June , 2021 684566 XXX
REGISTERED OWNER: *****CEDE & CO.*****
PRINCIPAL AMOUNT: **** THOUSAND DOLLARS****
****($ 000)***
ORANGE COUNTY, NORTH CAROLINA (the "County"), for value received,
promises to pay, but solely from the sources and in the manner provided, to the
registered owner hereof, or registered assigns or legal representative, the principal
amount stated above on the maturity date stated above, and to pay interest on this
Bond semiannually on each June 1 and December 1, beginning December 1, 2021, at
the annual rate stated above.
Interest is payable (a) from the Dated Date stated above, if this Bond is
authenticated prior to December 1, 2021, or (b) otherwise from the June 1 or
December 1 that is, or immediately precedes, the date on which this Bond is
authenticated (unless payment of interest on this Bond is in default, in which case
this Bond will bear interest from the date to which interest has been paid). Principal
and interest are payable in lawful money of the United States of America.
72
This Bond is one of an issue of [$23,000,000] Limited Obligation Bonds, Series
2021A (the "Bonds"), of like date and tenor, except as to number, denomination,
rate of interest, privilege of redemption and maturity. The Bonds are issued under,
and are equally and ratably secured by, a Trust Agreement dated as of June 1, 2021
(the "Trust Agreement"), between the County and The Bank of New York Mellon
Trust Company, N.A., as trustee (the "Trustee").
This Bond constitutes an installment contract within the meaning of Section
160A-20 of the North Carolina General Statutes, as the same may be in effect from
time to time ("Section 160A-20"), between the County and the owner (from time to
time) of this Bond. The Bonds are payable solely from funds appropriated on an
annual basis by the County's governing Board of Commissioners, and other funds
available for the purpose of payment pursuant to the Trust Agreement, such as
certain net insurance and condemnation awards and the proceeds of remedial
action, which revenues and other moneys have been pledged as described in the
Trust Agreement to secure payment of the Bonds. Neither the County's faith and
credit nor its taxing power is pledged to the payment of any amounts due under the
Bonds. As provided for under Section 160A-20, no deficiency judgment may be
rendered against the County in any action for breach of a contractual obligation
under the Bonds or the Trust Agreement.
To further secure its obligations under the Trust Agreement, the County has
granted, for the benefit of the Trustee on behalf of the owners of the Bonds, a
security interest in certain public facilities, including the underlying real property,
and certain other property pursuant to the Trust Agreement and a Deed of Trust
and Security Agreement dated as of June 1, 2021.
Reference is made to the Trust Agreement, the Deed of Trust referenced
above and all amendments and supplements for the provisions, among others, with
respect to the nature and extent of the security, the rights, duties and obligations of
the County and the Trustee, the rights of the Owners of the Bonds and the terms
upon which the Bonds are executed, delivered and secured, to all of which
provisions the owner of this Bond, by the acceptance of this Bond, agrees.
The County's $ Taxable Limited Obligation Refunding Bonds,
Series 2021B, are secured by a parity interest in the property securing the Bonds.
Additional Bonds secured by a parity interest in the property securing the Bonds
may be issued under the terms and conditions set forth in the Trust Agreement.
73
The Bonds are issued by means of a book-entry system, with one certificate
for each maturity immobilized at The Depository Trust Company, New York, New
York ("DTC"), and not available for distribution to the public. Transfer of beneficial
ownership interests in the Bonds in the principal amount of $5,000 or any integral
multiple thereof will be effected on the records of DTC and its participants pursuant
to rules and procedures established by DTC and its participants. Principal and
interest on the Bonds are payable to DTC or its nominee as registered owner of the
Bonds. Neither the Trustee nor the County is responsible or liable for the transfer of
ownership or payments or for maintaining, supervising or reviewing the records
maintained by DTC, its participants or persons acting through such participants.
If (a) DTC determines not to continue to act as securities depository for the
Bonds or (b) the County so elects, the County and the Trustee will discontinue the
book-entry system with DTC. If the County does not identify another qualified
securities depository to replace DTC, the County will prepare and execute, and the
Trustee will authenticate and deliver in exchange, replacement Bonds in the form of
fully registered Bonds.
The Bonds may not be redeemed prior to maturity except as provided in this
Bond and in the Trust Agreement.
The Bonds maturing on or December 1, 2032, are subject to redemption at
the County's option in whole or in part on any date on or after December 1, 2031,
upon payment of the principal amount to be prepaid plus interest accrued to the
redemption date, without premium. If less than all the Bonds are to be redeemed
pursuant to this provision, they will be redeemed among maturities in any manner
the County chooses.
The Trustee will redeem Bonds maturing on December 1, 20 upon
payment of 100% of the principal amount thereof plus interest accrued to the
redemption date, on December 1 in years and amounts as follows:
Year Amount ($1
[To come.]
74
*Final maturity
In addition, [second term bond, to come.]
The amount of Bonds to be redeemed on any sinking fund payment date may
be reduced in accordance with the provisions of the Trust Agreement.
If less than all the Bonds of any maturity are called for redemption, the
Trustee will select the Bonds to be redeemed by lot; provided, however, that so long
as a book-entry system with DTC is used for recording beneficial ownership of
Bonds, if less than all of the Bonds within a maturity are to be redeemed, DTC and its
participants will determine which of the Bonds within any such maturity are to be
redeemed.
In any case, (1) the portion of any Bond to be prepaid will be in the principal
amount of $5,000 or some integral multiple thereof, and (2) in selecting Bonds for
redemption, each Bond will be considered as representing that number of Bonds
which is obtained by dividing the principal amount of that Bond by $5,000. If a
portion of a Bond is called for redemption, a new Bond in principal amount equal to
the unpaid portion will be issued to the registered owner upon the surrender of the
Bond.
The Trustee will send notice of redemption to DTC or its nominee as the
Owner of the Bonds as provided in the Trust Agreement. The Trustee will send the
notice not more than 60 days nor less than 30 days prior to the date fixed for
redemption. Neither the Trustee nor the County is responsible for sending notices of
redemption to anyone other than DTC or its nominee, so long as all the Bonds to be
redeemed are held in a book-entry-only form with DTC.
If on or before the date fixed for redemption funds have been deposited with
the Trustee to pay the principal and interest accrued to the redemption date with
respect to the Bonds called for redemption, the Bonds or portions thereof thus
called for redemption will cease to accrue interest from and after the redemption
date, will no longer be entitled to the benefits provided by the Trust Agreement, and
will not be deemed to be Outstanding under the Trust Agreement.
The Owner of this Bond has no right to enforce the provisions of the Trust
Agreement or to institute action to enforce the covenants therein, or to take any
action with respect to any event of default thereunder, or to institute, appear in or
75
defend any suit or other proceeding with respect thereto, except as provided in the
Trust Agreement. Changes to or supplements of the Trust Agreement may be made
to the extent and in the circumstances permitted by the Trust Agreement.
Ownership of this Bond will be registered on the Bond register (as provided
for in the Trust Agreement) to be kept for that purpose by the Trustee, which will
act as Bond registrar for the Bonds. This Bond may be exchanged, and its transfer
may be effected, only by the Owner hereof in person or by attorney duly authorized
in writing at the designated office of the Trustee, but only in the manner, subject to
the limitations and upon payment of the charges provided in the Trust Agreement,
and upon surrender and cancellation of this Bond. Upon exchange or registration of
such transfer a new registered Bond or Bonds of the same maturity and interest rate
and of authorized denomination or denominations for the same aggregate principal
amount will be issued in exchange therefor.
The County and the Trustee may deem and treat the person in whose name
this Bond will be registered on the Bond register as the absolute owner of this Bond
for the purpose of receiving payment of or on account of principal of and interest
due on this Bond and for all other purposes, and neither the County nor the Trustee
will be affected by any notice to the contrary, except that interest payments will be
made to the persons shown as Owners on the Trustee's registration books on the
Record Date, which is the end of the calendar day on the 15th day of the month
(whether or not a business day) preceding each Payment Date.
All acts, conditions and things required by the Constitution and laws of the
State of North Carolina to happen, exist or be performed precedent to and in the
execution and delivery of this Bond have happened, exist and have been performed.
This Bond and the issue of which it is a part are issued with the intent that
North Carolina law will govern this Bond and all matters of its interpretation.
This Bond will not be entitled to any benefit under the Trust Agreement or be
valid or obligatory for any purpose until the Trustee has executed the Certificate of
Authentication appearing on this Bond.
[The remainder of this page has been left blank intentionally.]
76
IN WITNESS WHEREOF, the County has caused this instrument to be signed,
sealed and delivered by duly County Representatives, as of the day and year first
above written.
(SEAL)
ORANGE COUNTY,
ATTEST: NORTH CAROLINA
By: _
Laura Jensen Bonnie B. Hammersley
Clerk, Board of Commissioners County Manager
[Orange County, North Carolina
$ Limited Obligation Bonds, Series 2021A]
77
This Bond has been approved under the
provisions of Section 160A-20 and Article
8, Chapter 159 of the General Statutes of
North Carolina.
Sharon G. Edmundson
Secretary, North Carolina
Local Government Commission
By
[Sharon G. Edmundson
or Designated Assistant]
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds referred to in the Trust Agreement dated as of
December 1, 2021 (the "Trust Agreement"), between Orange County, North
Carolina, and The Bank of New York Mellon Trust Company, N.A., as trustee (the
"Trustee").
Date of Authentication:
The Bank of New York Mellon Trust
Company, N.A., as Trustee
By:
Authorized Representative
[Orange County, North Carolina
$ Limited Obligation Bonds, Series 2021A]
78
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(Please print or type transferee's name and address, including zip code)
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF TRANSFEREE:
the within bond and all rights thereunder, hereby irrevocably constituting and
appointing , Attorney, to transfer said certificate on the
books kept for the registration thereof, with full power of substitution in the
premises.
Dated:
Signature Guaranteed:
(Signature of Owner)
NOTICE: The signature above must
NOTICE: Signature(s) must be correspond with the name the Owner as
guaranteed by a participant in the it appears on the front of this certificate
Securities Transfer Agent Medallion in every particular without alteration or
Program ("STAMP") or similar program enlargement or any change whatsoever.
79
EXHIBIT D - Schedule of Payments on 2021 Bonds
Principal is payable in the amounts and on the dates as shown below, subject
to redemption of Bonds as provided in this Agreement. Interest is payable on the
dates shown below.
Each portion of the Amount Advanced will bear interest from the Closing Date
until paid. Interest is calculated at the rates shown in Section 1.03. The schedule
below shows the expected interest payment amounts. The County's obligation on
each Payment Date is the amount shown above as the "total payment" for that date,
subject to adjustment as provided in Section 3.05(c).
Payment 2021A 2021 2021B 2021B Total
Date Principal Interest Principal Interest Payment ($)
[To come.]
80
Exhibit E - Form of Requisition
[Date]
The Bank of New York Mellon Trust Company, N.A., as Trustee
Attention: Corporate Trust
Regarding: Requisition under 2021
Trust Agreement for Orange County, North Carolina
To the Trustee:
Pursuant to the terms and conditions of the above-referenced Trust
Agreement, the County authorizes and requests the disbursement of funds from the
"Orange County 2021 Project Fund" (the "Project Fund") established under that
Trust Agreement for the costs described below. Capitalized terms used in this
requisition and not otherwise defined have the meanings ascribed in the Trust
Agreement.
This is requisition number from the Project Fund.
Total Amount for
Disbursement
Payee
Payee's address or wiring
instructions
The County makes this requisition pursuant to the following representations:
1. The County has appropriated in its current fiscal year funds sufficient to pay
the Bond Payments and estimated Additional Payments due in the current
fiscal year.
2. The purpose of this disbursement is for payment of Project Costs as provided
for in the Trust Agreement.
81
3. The requested disbursement has not been subject to any previous requisition.
4. No notice of any lien, right to lien or attachment upon, or claim affecting the
right to receive payment of, any of the moneys payable herein to any of the
persons, firms or corporations named herein has been received, or if any
notice of any such lien, attachment or claim has been received, such lien,
attachment or claim has been released or discharged or will be released or
discharged upon payment of this requisition.
S. This requisition contains no items representing payment on account of any
percentage entitled to be retained on the date of this requisition.
6. No Event of Default is continuing, and no event or condition is existing which,
with notice or lapse of time or both, would become an Event of Default.
7. The County has insurance in place that complies with the insurance
requirements of the Trust Agreement.
8. No portion of the amounts set forth in this requisition represents amounts
paid or payable as North Carolina state sales taxes.
ORANGE COUNTY,
NORTH CAROLINA
By: [Exhihit Form Only-Do Not Sign]
Title:
County Representative
82