Agenda Packet October 6 2014PERSON COUNTY
BOARD OF COUNTY COMMISSIONERS
MEETING AGENDA
304 South Morgan Street, Room 215
Roxboro, NC 27573-5245
336-597-1720
Fax 336-599-1609
October 6, 2014
7:00 pm
CALL TO ORDER…………………………………………………. Chairman Clayton
INVOCATION
PLEDGE OF ALLEGIANCE
DISCUSSION/ADJUSTMENT/APPROVAL OF AGENDA
RECOGNITION
NC Association of County Commissioners awards
Person County Super Member designation ……………………………. Bob Carruth
RECESSED PUBLIC HEARING:
ITEM #1
A Financial Grant Incentive in the amount of
$30,000 disbursed to Roxboro Development
Group over 3-years for an Economic Project for Public
Improvements benefiting the Uptown area and
Hall’s Agribusiness …………………………………….. Heidi York & Stuart Gilbert
INFORMAL COMMENTS
The Person County Board of Commissioners established a 10 minute
segment which is open for informal comments and/or questions from citizens
of this county on issues, other than those issues for which a public hearing
has been scheduled. The time will be divided equally among those wishing to
comment. It is requested that any person who wishes to address the Board,
register with the Clerk to the Board prior to the meeting.
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ITEM #2
DISCUSSION/ADJUSTMENT/APPROVAL OF CONSENT AGENDA
A. Approval of Minutes of September 22, 2014
B. Budget Amendment 6
C. Budget Amendment 7
D. Budget Amendment 8
E. CDBG Quarterly Reporting for the months of July, August and September
2014
UNFINISHED BUSINESS:
NEW BUSINESS:
ITEM #3
Request from Woodsdale Volunteer Fire Department to
Operate a Second Station with the Intent of Reducing the
ISO Rating in its Unprotected Area ……………………………………George Woody
ITEM #4
Resolution Approving an Installment Financing Contract, a
Deed of Trust and Other Documents and Approving and
Authorizing Certain Actions in Connection with Financing a
Portion of the Cost of Various Projects - Person County
Recycling Center and Various Re-Roofing Projects ……………… Amy Wehrenberg
CHAIRMAN’S REPORT
MANAGER’S REPORT
COMMISSIONER REPORTS/COMMENTS
CLOSED SESSION
Note: All Items on the Agenda are for Discussion and Action as deemed
appropriate by the Board.
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AGENDA ABSTRACT
Meeting date: October 6, 2014
Agenda Title: Recessed Public Hearing: A Financial Incentive in the amount of $30,000
disbursed to Roxboro Development Group over 3- years for an Economic Project for
Public Improvements benefitting the Uptown area and Hall’s Agribusiness
Summary of Information: This Public Hearing was initially scheduled to be held on
September 8, 2014 but was recessed until this meeting, October 6th. This hearing was
recessed as the incentive agreements were being developed and worked out between
partners. The County is limited by General Statutes in its ability to fund incentives for
“downtown area improvements.” Rather, the county can contribute to this economic
development project by contracting with the City of Roxboro, rather than Roxboro
Development Group, to assist in a specific and limited public improvement. Therefore,
the Public Hearing will be brought back to the Board at a future meeting for discussion of
economic incentives with an agreement that reflects the County funding this project
through the City of Roxboro to increase the accountability of economic incentives.
Recommended Action: Cancel this public hearing in its entirety. Upon the
development of an incentive agreement, a new public hearing will be scheduled and
properly advertised.
Submitted By: Heidi York, County Manager and Stuart Gilbert, Economic Development
Director
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PUBLIC HEARING NOTICE
The Person County Board of Commissioners will hold a Public Hearing on Monday, September 8,
2014 at 7:00 pm in the Board of Commissioners’ meeting room, Room 215, Person County Office
Building, 304 S. Morgan Street, Roxboro, NC 27573.
The Board will consider the appropriation of county general funds to be made available to the
Roxboro Development Group in compliance with applicable law, to assist in public bathrooms,
public street lighting and public sidewalks at Hall’s Agribusiness. The project will include
development of 13,000 sq. ft. of new development space and over 55 new jobs in the Uptown
Roxboro Area. Such assistance shall include, but not limited to:
1. A financial grant incentive over a 3 year period of time at a total cost of $30,000 or
$10,000 per fiscal year with the disbursement of the first payment of $10,000 to be
released after the construction of the new uptown development project. The project will
be adjacent to Merritt Commons and support future community wide events located in the
Uptown Roxboro Area. This grant will be disbursed to the Roxboro Development Group
and the Roxboro Development Group will oversee the release of county public
improvement funds over a 3 year period based on new capital investment of over $1.2
million and up to 55 new jobs over 5 years.
The consideration provided for public improvements that will benefit residents that shop in
Uptown Roxboro referenced in Item 1 above includes a verifiable commitment to (i) specified
levels of capital investment and new employment within the County and (ii) and no financial grant
requiring to be repaid to the County in connection with said project based on the completion of
the project and the fact that the project owner will pay property taxes and be reimbursed over a 3
year period for the public improvements they developed that will be a public benefit to the Uptown
area and citizens doing business in Uptown and a private benefit to the Hall’s Agribusiness new
developed space.
The public benefits to be derived from this economic development project are increases in the
property tax base, employment opportunities, tax revenues, over $80,000 dollars of new public
improvements in the Uptown Roxboro Area in the form of new public restrooms, new public street
lighting and new public sidewalks and business prospects in the County.
On September 8, 2014, a motion was made by Commissioner Puryear and carried 5-0 to open
the duly advertised public hearing for a Financial Grant Incentive in the amount of $30,000
disbursed to Roxboro Development Group over 3-years for an economic project for Public
Improvements benefiting the Uptown area and Hall’s Agribusiness.
Economic Development Director, Stuart Gilbert advised the Board that the project for a Financial
Grant Incentive in the amount of $30,000 disbursed to Roxboro Development Group over 3-years
for an economic project for Public Improvements benefiting the Uptown area and Hall’s
Agribusiness was not yet ready for public comments and therefore requested the Board to
continue the public hearing to the Board’s meeting scheduled for October 6, 2014 at 7:00 pm.
A motion was made by Commissioner Newell and carried 5-0 to recess the public hearing for a
Financial Grant Incentive in the amount of $30,000 disbursed to Roxboro Development Group
over 3-years for an economic project for Public Improvements benefiting the Uptown area and
Hall’s Agribusiness until October 6, 2014 at 7:00 pm.
Brenda B. Reaves, NCCCC, CMC
Clerk to the Board
Person County Board of Commissioners
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September 22, 2014
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PERSON COUNTY BOARD OF COMMISSIONERS SEPTEMBER 22, 2014
MEMBERS PRESENT OTHERS PRESENT
Jimmy B. Clayton Heidi York, County Manager
Kyle W. Puryear C. Ronald Aycock, County Attorney
B. Ray Jeffers Brenda B. Reaves, Clerk to the Board
Frances P. Blalock
David Newell, Sr.
The Board of Commissioners for the County of Person, North Carolina, met in
regular session on Monday, September 22, 2014 at 9:00 am in the Commissioners’
meeting room in the Person County Office Building.
Chairman Clayton called the meeting to order, led invocation and asked Vice
Chairman Jeffers to lead the Pledge of Allegiance.
DISCUSSION/ADJUSTMENT/APPROVAL OF AGENDA:
A motion was made by Commissioner Blalock and carried 5-0 to approve the
agenda.
PUBLIC HEARING:
WHETHER THE BOARD OF COMMISSIONERS FOR THE COUNTY OF
PERSON, NC SHOULD APPROVE A PROPOSED INSTALLMENT FINANCING
AGREEMENT TO FINANCE A PORTION OF THE COSTS OF VARIOUS
PROJECTS AND WHETHER SAID COUNTY SHOULD ACQUIRE CERTAIN
SCHOOL PROPERTY INCLUDED IN SUCH PROJECTS RELATED TO THE
FINANCING OF PERSON COUNTY’S RECYCLING CENTER ACQUISITION
AND IMPROVEMENTS, AND EARL BRADSHER PRESCHOOL AND KIRBY
CIVIC AUDITORIUM RE-ROOFING CONSTRUCTION:
A motion was made by Commissioner Puryear and carried 5-0 to open the duly
advertised Public Hearing related to whether the Board of Commissioners for the County
of Person, NC should approve a proposed installment financing agreement to finance a
portion of the costs of various projects and whether said County should acquire certain
school property included in such projects related to the financing of Person County’s
Recycling Center acquisition and improvements, and Earl Bradsher Preschool and Kirby
Civic Auditorium Re-roofing construction.
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September 22, 2014
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Finance Director, Amy Wehrenberg stated the purpose of the Public Hearing set
for September 22, 2014 was to consider whether the Board of Commissioners for Person
County should approve a proposed installment financing agreement and certain related
documents to provide funds in an amount not exceeding $2.5M for the acquisition and
improvements of the Person County Recycling Center and the replacement of roofing for
Earl Bradsher Preschool and the Kirby Civic Auditorium. Ms. Wehrenberg stated
another purpose of the Public Hearing was to consider whether the County should acquire
from the Person County Board of Education an interest in the site of Earl Bradsher
Preschool and the improvements thereon in connection with the financing. Ms.
Wehrenberg noted the County would secure repayment of the financing by granting a
security interest in such property and certain related property. Ms. Wehrenberg
confirmed that Notice of the Public Hearing was published in The Courier Times not less
than 10 days before the date of the Public Hearing.
Ms. Wehrenberg explained the current plan of the County is to finance a portion
of the cost of this Project for $2.36M, with the remaining cost to be sourced from
available funds set aside as contingency that were initially approved for this purpose.
Ms. Wehrenberg provided the latest budget summary of revenues and
expenditures associated with the project for the Board’s review. Ms. Wehrenberg
informed the Board of two changes since the Project was established and a Capital
Project Ordinance was adopted. The first change related to the roofing construction bids
coming in approximately $53K higher for the Recycling Building’s roof than was
anticipated. Ms. Wehrenberg noted the General Services Director actually received one
bid that was lower from a less experienced governmental bidding vendor, but due to
some missing documents, the bid had to be rejected.
Ms. Wehrenberg stated the second change discovered was that a survey was not
on file for Earl Bradsher Preschool that is required by the bank since it is the property
being pledged as collateral. Ms. Wehrenberg stated the cost of the survey that had to be
added to the Earl Bradsher re-roofing project was $5,855. Ms. Wehrenberg stated both
changes caused the need to revise the project estimates that are covered by the $2.36M
financing being proposed. Ms. Wehrenberg also included the transfer of contingency
funds for $30K that was approved for the Project in the CIP Fund noting these changes
will be included in a budget amendment for the Board’s meeting on October 6, 2014, the
same meeting that final financing documents will be presented to the Board should the
Board decide to move forward after the close of the Public Hearing. Ms. Wehrenberg
asked if any Board members had any questions about the summary of costs.
Commissioner Newell asked Ms. Wehrenberg what the amount of difference was
between the lowest accepted bid and the rejected bid on the roofing construction bids.
Ms. Wehrenberg deferred the question to the General Services Director, Ray Foushee.
Mr. Foushee stated the difference was approximately $30,000.
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September 22, 2014
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Commissioner Newell asked Ms. Wehrenberg if the Board could approve the
installment financing of various projects and acquisition of certain school property
contingent upon a rebid for the roofing construction bids. Ms. Wehrenberg stated if the
Board ordered a rebid for the roofing construction bids, the financing closing would be
delayed by three months.
Ms. Wehrenberg told the Board that an increase in taxes to fund the repayment of
the debt is not anticipated, and the County's current debt structure has been determined to
be sound and sufficient to support this additional debt that is the subject of this Public
Hearing.
Ms. Wehrenberg stated the County received bids on August 29, 2014 from the
banking lenders in response to the County’s request for proposals on the $2.36M
proposed installment financing agreement noting the proposal requested a fixed tax-
exempt and bank-qualified interest rate-financing for the principal amount stated with a
desired term of 15 years.
Ms. Wehrenberg referenced the bid sheet that was included in the Board’s agenda
packet that summarizes the bids noting there were many variables on which to base the
comparison; the primary factor was the offered interest rate. Ms. Wehrenberg explained
that BB&T’s proposal was more favorable in the 2.8% interest rate proposed versus the
3.07% interest rate offered by SunTrust. Other factors in the bid proposals that were
considered included the prepayment penalty provisions, legal fees, and other required
special conditions. Ms. Wehrenberg said that from both responses, BB&T's proposal
appears to be the most appropriate of the proposals received by the County to meet its
needs and recommended the Board award BB&T as the lending institution for the
proposed financing agreement.
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September 22, 2014
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September 22, 2014
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There were no individuals appearing before the Board of Commissioners to speak
in favor of or in opposition to the proposed installment financing agreement to finance a
portion of the costs of various projects and whether said County should acquire certain
school property included in such projects related to the financing of Person County’s
Recycling Center acquisition and improvements, and Earl Bradsher Preschool and Kirby
Civic Auditorium Re-roofing construction.
A motion was made by Vice Chairman Jeffers and carried 5-0 to close the Public
Hearing related to whether the Board of Commissioners for the County of Person, NC
should approve a proposed installment financing agreement to finance a portion of the
costs of various projects and whether said County should acquire certain school property
included in such projects related to the financing of Person County’s Recycling Center
acquisition and improvements, and Earl Bradsher Preschool and Kirby Civic Auditorium
Re-roofing construction.
CONSIDERATION TO GRANT OR DENY REQUEST OF WHETHER THE
BOARD OF COMMISSIONERS FOR THE COUNTY OF PERSON, NC SHOULD
APPROVE A PROPOSED INSTALLMENT FINANCING AGREEMENT TO
FINANCE A PORTION OF THE COSTS OF VARIOUS PROJECTS AND
WHETHER SAID COUNTY SHOULD ACQUIRE CERTAIN SCHOOL
PROPERTY INCLUDED IN SUCH PROJECTS RELATED TO THE
FINANCING OF PERSON COUNTY’S RECYCLING CENTER ACQUISITION
AND IMPROVEMENTS, AND EARL BRADSHER PRESCHOOL AND KIRBY
CIVIC AUDITORIUM RE-ROOFING CONSTRUCTION AND APPROVAL OF
LENDER FOR FINANCING OF RECYCLING CENTER AND VARIOUS RE-
ROOFING PROJECTS:
Commissioner Puryear respectively requested Board permission to recuse himself
from the vote for Board action related to the proposed financing agreement to finance a
portion of the costs of various projects and whether said County should acquire certain
school property included in such projects related to the financing of Person County’s
Recycling Center acquisition and improvements, and Earl Bradsher Preschool and Kirby
Civic Auditorium Re-roofing construction and the approval of the lender for such
financing due to the recommended lender is his employer.
A motion was made by Vice Chairman Jeffers and carried 4-0 to recuse
Commissioner Puryear from the vote for Board action related to the proposed financing
agreement to finance a portion of the costs of various projects and whether said County
should acquire certain school property included in such projects related to the financing
of Person County’s Recycling Center acquisition and improvements, and Earl Bradsher
Preschool and Kirby Civic Auditorium Re-roofing construction and the approval of the
lender for such financing.
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September 22, 2014
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Chairman Clayton requested consideration for a motion to (a) proceed with the
proposed financing of a portion of the cost of the described project (the “Project”) and
approve on a preliminary basis the proposal of BB&T (the “Proposal”) to finance a
portion of the cost of the Project in an amount not to exceed $2.5M substantially as
presented, (b) to authorize the Chairman of the Board of Commissioners and the County
Manager and the Finance Director of the County to negotiate further with BB&T the
terms of the Proposal as they consider to be necessary or advisable and to execute and
deliver the Proposal to BB&T at such time as they determine to be appropriate and (c) to
acquire the fee or any lesser interest in the real and personal property included in the
Project, including specifically the site of Earl Bradsher Preschool and the improvements
thereon, for use by the Person County Schools in order to proceed with such plan by the
County and the Board of Education to finance a portion of the cost of the Project.
A motion was made by Commissioner Blalock and carried 3-1 to (a) proceed
with the proposed financing of a portion of the cost of the described project (the
“Project”) and approve on a preliminary basis the proposal of BB&T (the “Proposal”) to
finance a portion of the cost of the Project in an amount not to exceed $2.5M
substantially as presented, (b) to authorize the Chairman of the Board of Commissioners
and the County Manager and the Finance Director of the County to negotiate further with
BB&T the terms of the Proposal as they consider to be necessary or advisable and to
execute and deliver the Proposal to BB&T at such time as they determine to be
appropriate and (c) to acquire the fee or any lesser interest in the real and personal
property included in the Project, including specifically the site of Earl Bradsher Preschool
and the improvements thereon, for use by the Person County Schools in order to proceed
with such plan by the County and the Board of Education to finance a portion of the cost
of the Project. Commissioner Newell cast the lone dissenting vote.
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September 22, 2014
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INFORMAL COMMENTS:
The following individuals appeared before the Board to make informal comments:
Ms. Benita Purcell, Person County Group Homes, Inc. staff member and Chair of
the Cardinal Innovation Consumer and Family Advisory Council made the Board aware
of an upcoming Town Hall meeting scheduled for October 1, 2014 at Roxboro City Hall
to address mental health needs/services in rural communities and across the state. Ms.
Purcell invited the Board members as local policy makers to attend. Ms. Purcell stated
Mr. Dave Richard, Deputy Director of NC Division of Health and Human Services will
be the guest speaker.
Ms. Susan Naylor of 481 Valhalla Drive, Timberlake asked the Board to
commission funding for a Senior Center facility noting the great need for a dedicated
space to have exercise classes. Ms. Naylor explained that the Auditorium has been and
will continue to be unavailable at many of the times she holds her exercise class causing
the participants to have to make a choice in programming.
Mr. Ryan Wilson of 471 Parham Road, Roxboro and staff of Wilson Ambulance
Service & Support (WASS) stated his intention to make the Board aware of a private
ambulance service transporting residents which is not allowed according to the provisions
of the County’s Ambulance Franchise Ordinance. Mr. Wilson noted a discussion with
the County Attorney prior to the meeting let him know the County is aware and is in
process of checking into it. The Board allowed County Attorney, Ron Aycock to respond
to Mr. Wilson’s comments. Mr. Aycock stated the Emergency Services Director is
currently investigating if any violations have taken place through his review of the
Ordinance.
Mr. Tim Chandler of 116 Cheryl Circle, Roxboro acknowledged and praised the
County’s Home, Health and Hospice agency noting all staffs were wonderful and very
helpful to his dad.
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September 22, 2014
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DISCUSSION/ADJUSTMENT/APPROVAL OF CONSENT AGENDA:
A motion was made by Vice Chairman Jeffers and carried 5-0 to approve the
Consent Agenda with the following items:
A. Approval of Minutes of September 8, 2014
B. Budget Amendment #4
C. Budget Amendment #5 and Carry Forward Commitments detail
D. Tax Adjustments for August2014
a. August 2014 Tax Releases, and
b. August 2014 NC Vehicle Tax System pending refunds
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September 22, 2014
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NEW BUSINESS:
VETERAN’S PARK UPDATE:
Mr. Richard Vining, President of the Person Veterans Council gave the Board an
update on the Person County Veteran’s Park. Mr. Vining gave the Board a brochure
depicting the Veteran’s Park project to be located at 316 S. Morgan Street, Roxboro. The
brochure outlined the Person Veterans Council’s vision, membership, short term and long
term objectives. Mr. Vining noted a correction related to donations, informing the group
that any donations should be made to the American Legion.
Mr. Vining noted a sign has been erected on the lot announcing the future site of
the park. Mr. Vining stated the Person Veterans Council has completed a preliminary
construction schedule for the park. Mr. Vining told the Board that phase one of the
Veterans’ Park construction will begin in October 2014 and will include concrete work
for all sidewalks of the park and the footings for the brick walls. Mr. Vining said the
park fundraising efforts are underway for phase two noting that phase one of the project
is totally funded. Mr. Vining described phase two as purchasing and placement of items
such as the brick walls through donated labor, flag poles, service branch seals, donor
stones and informational stones.
Mr. Vining stated the intent that any existing landscaping will not be disturbed.
Mr. Vining informed the Board that the Person Veterans Council would like to
schedule a ribbon cutting and/or groundbreaking ceremony in early October and would
like governmental representation. The commemorative target date for opening the park is
Memorial Day 2015.
Commissioner Newell asked Mr. Vining if all the necessary permits have been
obtained. Mr. Vining stated the conditional use permit was granted by unanimous vote
by the City of Roxboro Board of Adjustment and the only other permit required will be
through the County Inspections Department once the footings have been dug.
Mr. Vining thanked the Board for their continued support and making Person
County a vet friendly county.
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September 22, 2014
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REVISED AUDIT CONTRACT WITH WINSTON, WILLIAMS, CREECH AND
EVANS FOR MEDICAID PROGRAM COMPLIANCE:
Finance Director, Amy Wehrenberg requested Board action to approve a revision
to Person County’s current audit contract to cover the additional tasks related to
evaluation of the intake function of the Medicaid program recently requested by the
Office of State Auditor. Ms. Wehrenberg stated a letter from Beth Wood, State Auditor
to all county district auditors was received requesting completion of the additional tasks
to assist the state in obtaining an understanding of the internal controls and eligibility
determinations under the Medicaid program.
Ms. Wehrenberg noted the information collected by the auditors on the Medicaid
compliance will come mainly from the Health Department and the Department of Social
Services. Ms. Wehrenberg further noted an increase required to the County’s current
audit contract is $1,500. Ms. Wehrenberg recommended that this expenditure be sourced
from undesignated contingency funds (leaving a remaining balance of $36,000 for future
unanticipated costs).
A motion was made by Commissioner Blalock and carried 5-0 to approve the
revised audit contract with Winston, Williams, Creech and Evans and to fund the $1,500
from the undesignated contingency budget as presented.
CHAIRMAN’S REPORT:
Chairman Clayton acknowledged Ms. Margaret Jay’s effort to find Person County
money through the State Treasurer’s Department website.
MANAGER’S REPORT:
County Manager, Heidi York reported the following:
• PCBIC will be meeting on Tuesday, September 23, 2014 related to the Site
Certification Process, and
• State Highway Patrol and county staff will visit the Woodland School site related
to the tower project on Wednesday, September 24, 2014.
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September 22, 2014
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COMMISSIONER REPORT/COMMENTS:
Commissioner Newell asked if the Sansbury gym would be available for the
Senior Center to use for its exercise class. Ms. Naylor, who had spoken during public
comments, stated the gym is available and she had a meeting with the Director of
Recreation, Arts & Parks, John Hill to set up the dates to use the gym.
Commissioner Blalock reported the following:
a) A Mountain to the Coast Bicycle Tour which begins in Sparta on September 27,
2014 and continue through Mt. Airy, Reidsville, Oxford, Roanoke Rapids,
Edenton, Manteo and Hatteras. Commissioner Blalock noted this tourism event
has over 1,000 riders participating that will be stopping on their way in the
parking lots at Antioch Baptist Church and Mt. Harmony Baptist Church for rest
stops on September 30, 2014. Commissioner Blalock suggested a request be
made for the next bicycle tour to include Roxboro.
b) The project Re-Entry program co-founder and coordinator, Rebecca Sauter has
been invited to the next Re-Entry meeting scheduled for October 14, 2014.
Commissioner Blalock encouraged everyone to look at Rebecca Sauter’s
YouTube video.
Commissioner Puryear reported his attendance at a grand opening event for a
new, local business called The Bullpen located at the site of the former Outer Limits.
Vice Chairman Jeffers expressed a concern directly to Commissioner Puryear
related to utilizing county resources and the County Manager’s time to help the Larry
Yarborough campaign through his request for budget information from 2007 to present
noting that information is available on the county website and further noting the exact
chart provided by the County Manager was forwarded to Larry Yarborough.
Commissioner Puryear stated any email related to the county is a public record and if it is
requested, he will forward such. Commissioner Puryear said that Vice Chairman Jeffers
had used public facilities for his campaign.
Chairman Clayton stated in his capacity as Chairman, he will limit any such
campaign discussion at the Board meetings so not to be perceived as a forum to campaign
in support or against any political candidate.
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September 22, 2014
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CLOSED SESSION #1
A motion was made by Vice Chairman Jeffers and carried 5-0 to enter Closed
Session per General Statute 143-318.11(a)(5) to consider the acquisition or lease of real
property at 9:39 am with the following individuals permitted to attend: County Manager,
Heidi York, Clerk to the Board, Brenda Reaves, County Attorney, Ron Aycock, Assistant
County Manager, Sybil Tate, and General Services Director, Ray Foushee.
A motion was made by Commissioner Blalock and carried 5-0 to return to open
session at 9:47 am.
ADJOURNMENT:
A motion was made by Vice Chairman Jeffers and carried 5-0 to adjourn the
meeting at 9:48 am.
_____________________________ ______________________________
Brenda B. Reaves Jimmy B. Clayton
Clerk to the Board Chairman
(Draft Board minutes are subject to Board approval).
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10/6/2014
Dept./Acct No.Department Name Amount
Incr / (Decr)
EXPENDITURES Capital Improvement Project Fund
County (1,372,881)
Schools (837,434)
PCC (181,929)
Transfer to Other Funds (249,209)
REVENUES Capital Improvement Project Fund
Interest Earnings 800
Transfer from Other Funds (2,387,708)
Fund Balance Appropriated (254,545)
Explanation:
Closing out CIP projects that were complete at June 30, 2014.
BUDGET AMENDMENT
Budget Amendment #617
10/6/2014
Dept./Acct No.Department Name Amount
Incr / (Decr)
EXPENDITURES PCRC & Roofing Capital Project Fund
County 47,050
Schools 5,855
Contingency 30,000
REVENUES PCRC & Roofing Capital Project Fund
Debt Financing Proceeds 52,905
Transfer from Other Funds 30,000
Explanation:
Revising PCRC & Roofing Capital Project Fund to reflect the final revenue and
expenditure estimates, as well as the transfer of approved contingency funds
from the CIP Fund.
BUDGET AMENDMENT
Budget Amendment #718
10/6/2014
Dept./Acct No.Department Name Amount
Incr / (Decr)
EXPENDITURES General Fund
Public Safety 25,805
Interfund Transfers 3,750
REVENUES General Fund
Intergovernmental 11,250
Interfund Transfers 3,750
Other Revenues 6,005
Fund Balance Appropriation 8,550
Explanation:
BUDGET AMENDMENT
Receipt of 2014 Governor's Crime Commission Block Grant ($11,250), requiring
a local match ($3,750) which is to be sourced from fund balance appropriation
in the Law Enforcement Restricted Fund; receipt of insurance proceeds to
assist in the replacement of the mobile unit at EMS ($10,805); and termination
of the Duke lease for the Human Services Building (-$4,800) requiring an
appropriation of fund balance in the Health fund ($4,800).
Budget Amendment #819
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AGENDA ABSTRACT
Meeting date: October 6, 2014
Agenda Title: Request from Woodsdale Volunteer Fire Department to Operate a Second
Station with the Intent of Reducing the ISO Rating in its Unprotected Area
Summary of Information: The Woodsdale Volunteer Fire Department is working to
secure and operate a second volunteer fire station. This station is located at 9379 Boston
Road and will provide better assistance to the unprotected area of their district. The goal
is for the unprotected area to receive a reduction in their ISO insurance ratings from a 10
down to a 9E. This will provide some savings to homeowners through their insurance
policies. As part of the process required by the State Fire Marshal, a letter from the
Board Chairman and County Manager authorizing this second station is required.
Chief George Woody will provide a map of the Woodsdale Fire District and explain this
process of acquiring their second station.
Recommended Action: Receive the request and direct the County Manager and the
Board Chairman to send the letter to the Office of the State Fire Marshal as needed.
Submitted By: George Woody, Chief of Woodsdale Volunteer Fire Department
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AGENDA ABSTRACT
Meeting date:
October 6, 2014
Agenda Title:
Resolution Approving an Installment Financing Contract, a Deed of Trust and Other
Documents and Approving and Authorizing Certain Actions in Connection with
Financing a Portion of the Cost of Various Projects - Person County Recycling Center
and Various Re-Roofing Projects
Summary of Information:
Finance Director requests action on:
“RESOLUTION APPROVING AN INSTALLMENT FINANCING
CONTRACT, A DEED OF TRUST AND OTHER DOCUMENTS AND
APPROVING AND AUTHORIZING CERTAIN ACTIONS IN
CONNECTION WITH FINANCING A PORTION OF THE COST OF
VARIOUS PROJECTS.”
This Resolution is set forth by sections in the following:
Preamble
The approval of documents associated with the plan to finance a portion of
costs of the Project through an Installment Financing Contract, including the
conveyance of Earl Bradsher Preschool to the County as collateral.
Section 1: States that the County and Board of Education have agreed to finance a portion of
the cost of a project consisting of the re-roofing of Earl Bradsher Preschool which each has
found it necessary and desirable to provide improved educational facilities for the citizens of
Person County and that the County has also determined to finance a portion of the cost of a
project consisting of the acquisition and improvement of the Person County Recycling Center
and the re-roofing of the Kirby Civic Auditorium (collectively, the “Project”).
Section 2: States that the County has determined to finance a portion of the cost of the Project
in an amount not exceeding $2,360,000 as a tax-exempt and bank-qualified installment
financing pursuant to G.S. Section 160A-20.
Section 3: Lists the financing documents that were included in the agenda packets for review,
including (a) the Installment Financing Contract between the County and BB&T, the lending
institution, that sets up the arrangement for the advancement of funds to the County to be
repaid in installments until the debt is paid; (b) the Deed of Trust which provides for the
pledge of Earl Bradsher Preschool as security for the County's obligation to repay the debt; (c)
an Administrative Agreement between the County and the Board of Education which
authorizes the conveyance of Earl Bradsher Preschool to the County and its lease by the
County back to the Board of Education; and (d) the Lease between the County and Board of
Education to lease Earl Bradsher Preschool to the Board of Education for the duration of the
loan as part of the financing plan.
24
1. The Board confirms that the Project and its use are essential and will permit the
County to carry out public functions.
2. The Board finds and determines that it is in the best interest of the County to enter
into these financing documents in order to accomplish the financing of a portion of
the cost of the Project.
3. The Board approves the financing documents and authorizes certain County officers
to represent the County in the execution and delivery of final financing documents to
the appropriate parties with any changes that are deemed necessary and appropriate,
provided that the final Installment Payment take place no later than December 31,
2029 and the amount borrowed does not exceed $2,360,000.
4. The Board approves prior actions of certain officers of the County in connection
with the financing.
5. The Board authorizes County officers and employees to take other actions as needed
to complete the financing.
6. The County covenants to comply with the requirements of the Internal Revenue
Code as applicable to the financing to maintain the tax-exempt status of the interest
to be paid with respect to the loan.
7. The County covenants not to issue more than $10,000,000 of tax-exempt obligations
in 2014 and designates its obligation to repay the loan as bank-qualified.
8. Any invalid provision of the resolution will not affect the remainder of the
resolution.
9. All prior actions of the Board in conflict with the resolution are repealed.
10. The resolution is effective upon its passage by the Board
Recommended Action:
To approve the resolution as presented.
Submitted By:
Amy Wehrenberg, Finance Director
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5639890v2 14038.00022
A regular meeting of the Board of Commissioners for the County of Person, North
Carolina, was held in the Commissioners’ Meeting Room in the Person County Office Building,
in Roxboro, North Carolina, on October 6, 2014, at 7:00 P.M.
Present: Chairman Jimmy B. Clayton, presiding, and Vice Chairman B. Ray Jeffers and
Commissioners Kyle W. Puryear, Frances P. Blalock and David Newell, Sr.
Absent: None.
* * * * *
Chairman Clayton introduced the following resolution, a copy of which had been
provided to each Commissioner and which was read by its title:
RESOLUTION APPROVING AN INSTALLMENT FINANCING CONTRACT,
A DEED OF TRUST AND OTHER DOCUMENTS AND APPROVING AND
AUTHORIZING CERTAIN ACTIONS IN CONNECTION WITH FINANCING
A PORTION OF THE COST OF VARIOUS PROJECTS.
WHEREAS, the County of Person, North Carolina (the “County”), is a validly existing
political subdivision of the State of North Carolina (the “State”), under and by virtue of the
Constitution and laws of the State; and
WHEREAS, the County has the power, pursuant to Section 160A-20 of the General
Statutes of North Carolina, as amended, to (a) finance the purchase of real and personal property
by installment agreements that create in the property purchased a security interest to secure
payment of the purchase price to the entity advancing moneys for such transaction and
(b) finance the construction of fixtures or improvements on real property by agreements that
create in such fixtures or improvements and in the real property on which such fixtures or
improvements are located a security interest to secure repayment of moneys advanced or made
available for such construction; and
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5639890v2 14038.00022
2
WHEREAS, the County and The Person County Board of Education, a body corporate
which has general control and supervision of all matters pertaining to the non-charter public
schools in the Person County Schools, its respective school administrative unit (the “Board of
Education”), have determined to cooperate in a plan to finance a portion of the cost of a project
which each has found to be necessary and desirable to provide for improved public school
facilities and improved public education in such school administrative unit; and
WHEREAS, such project consists of the repair or replacement of the roof on Earl
Bradsher Preschool (the “School Project”); and
WHEREAS, the County has also determined to finance a portion of the cost of a project
consisting of the repair or replacement of the roof on the Kirby Civic Auditorium and the
acquisition and improvement of a building and related property to house the Person County
Recycling Center (collectively, the “County Project” and, together with the School Project, the
“Project”); and
WHEREAS, the Board of Commissioners for the County (the “Board”) has determined to
proceed with the financing pursuant to said Section 160A-20 of a portion of the cost of the
Project in an amount not to exceed $2,360,000 (the “Amount Advanced”), and it is necessary to
approve an installment financing contract, a deed of trust and other documents and approve and
authorize certain actions in connection therewith; and
WHEREAS, there have been presented for consideration by the Board copies of the
following documents relating to such matter:
(a) a draft of an Installment Financing Contract, between the County and Branch
Banking and Trust Company (the “Installment Financing Contract”), under which Branch
Banking and Trust Company (the “Bank”) would advance the Amount Advanced to finance a
27
5639890v2 14038.00022
3
portion of the cost of the Project and the County would be obligated to make Installment
Payments (as defined therein) to repay the Amount Advanced and to make certain other
payments, among other requirements, such obligations being subject to termination by the
County under certain circumstances as provided therein;
(b) a draft of a Deed of Trust and Security Agreement (the “Deed of Trust”) which
the County would execute and deliver to a trustee for the benefit of the Bank and which would
encumber the site of Earl Bradsher Preschool and the improvements on such site and certain
related property, subject to certain exceptions, as security for the County’s obligation to repay
the Amount Advanced and any other funds advanced to it pursuant to the Installment Financing
Contract;
(c) a draft of an Agreement Concerning School Roof Improvements (the
“Administrative Agreement”) between the Board of Education and the County, under which the
Board of Education would convey to the County the site of Earl Bradsher Preschool and the
improvements thereon by a General Warranty Deed and undertake certain responsibilities with
respect to the School Project as described therein; and
(d) a draft of a Lease (the “Lease”) between the County, as lessor, and the Board of
Education, as lessee, which provides for the lease by the County to the Board of Education of the
site of Earl Bradsher Preschool and the improvements thereon as a part of such plan to finance a
portion of the cost of the Project;
NOW, THEREFORE, BE IT RESOLVED by the Board as follows:
Section 1. The Board hereby confirms that the Project and its use are essential for the
improved administration of County government and improved public education in the County
28
5639890v2 14038.00022
4
and the Project will permit the County to carry out public functions that it is authorized by law to
perform.
Section 2. The Board hereby finds and determines that it is in the best interest of the
County to enter into the Installment Financing Contract, the Deed of Trust, the Administrative
Agreement and the Lease in order to effectuate the financing of a portion of the cost of the
Project as described above.
Section 3. The form and content of the Installment Financing Contract, the Deed of
Trust, the Administrative Agreement and the Lease, each of which will be a valid, legal and
binding obligation of the County in accordance with its terms, are hereby approved in all respects
and the Chairman of the Board, the County Manager of the County, the Finance Director of the
County, the County Attorney of the County and the Clerk to the Board are hereby authorized and
directed to execute and deliver the Installment Financing Contract, the Deed of Trust, the
Administrative Agreement and the Lease, as may be applicable, in substantially the forms
presented to the Board, together with such additions, changes, modifications and deletions as
they, with the advice of counsel, may deem necessary and appropriate, and such execution and
delivery shall be conclusive evidence of the approval and authorization thereof by the Board and
the County; provided, however, that the due date of the final Installment Payment is not later
than December 31, 2029 and that the Amount Advanced does not exceed $2,360,000.
Section 4. The Board hereby approves, ratifies and confirms the actions of the
County Manager, the Finance Director and the County Attorney of the County in connection
with this matter.
Section 5. The officers and employees of the County are authorized and directed
(without limitation except as may be expressly set forth herein) to take such other actions and to
29
5639890v2 14038.00022
5
execute and deliver such other documents, certificates, undertakings, agreements or other
instruments as they, with the advice of counsel, may deem necessary or appropriate to effectuate
the transactions contemplated by the Installment Financing Contract, the Deed of Trust, the
Administrative Agreement and the Lease.
Section 6. The County covenants that, to the extent permitted by the Constitution and
laws of the State of North Carolina, it will comply with the requirements of the Internal Revenue
Code of 1986, as amended (the “Code”), as applicable to the Installment Financing Contract
except to the extent that the County obtains an opinion of nationally-recognized bond counsel to
the effect that noncompliance would not result in the interest components of the Installment
Payments being includable in the gross income of the recipient thereof under Section 103 of the
Code, as more specifically provided in the Installment Financing Contract.
Section 7. The County hereby finds, declares and represents that (a) it reasonably expects
that it, all entities subordinate to the County and all entities that issue obligations on behalf of the
County (all within the meaning of Section 265(b)(3)(E) of the Code) will not issue in the
aggregate more than $10,000,000 of tax-exempt obligations (not counting private-activity bonds
and certain refunding bonds as provided in Section 265(b)(3)(C)(ii) of the Code) during the
current calendar year and (b) no entity has been or will be formed or availed of to avoid the
limits described above. In addition, the County hereby designates its obligations to make
Installment Payments under the Installment Financing Contract as a “qualified tax-exempt
obligation” for the purposes of Section 265(b)(3) of the Code.
Section 8. If any section, phrase or provision of this resolution is for any reason
declared to be invalid, such declaration shall not affect the validity of the remainder of the
sections, phrases or provisions of this resolution.
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5639890v2 14038.00022
6
Section 9. All motions, orders, resolutions, ordinances and parts thereof in conflict
herewith are hereby repealed.
Section 10. This resolution shall take effect immediately upon its passage.
Upon motion duly made, the foregoing resolution was passed by the following vote:
Ayes: Commissioners ____________________________________________________
_____________________________________________________________________________.
Noes: _________________________________________________________________.
* * * * *
I, Brenda B. Reaves, Clerk to the Board of Commissioners for the County of Person,
North Carolina, DO HEREBY CERTIFY that the foregoing is a true copy of so much of the
proceedings of said Board at a regular meeting held on October 6, 2014 as relates in any way to
the matters described therein.
I HEREBY FURTHER CERTIFY that notice of said meeting was duly given in
accordance with G.S. §143-318.12.
WITNESS my hand and the corporate seal of said County, this ____ day of October
2014.
__________________________________________
Brenda B. Reaves
Clerk to the Board of Commissioners
31
5581627v1 14038.00022
INSTALLMENT FINANCING CONTRACT
BETWEEN
BRANCH BANKING AND TRUST COMPANY
AND
COUNTY OF PERSON, NORTH CAROLINA
DATED OCTOBER 16, 2014
INSTALLMENT FINANCING CONTRACT
32
5581627v1 14038.00022
INSTALLMENT FINANCING CONTRACT
TABLE OF CONTENTS
Page
-i-
ARTICLE I
DEFINITIONS
Section 1.1 Definitions........................................................................................................ 2
ARTICLE II
AMOUNT ADVANCED
Section 2.1 Advance of Amount Advanced ........................................................................ 6
ARTICLE III
INSTALLMENT PAYMENTS; ADDITIONAL PAYMENTS
Section 3.1 Amounts and Times of Installment Payments and Additional Payments ........ 7
Section 3.2 Late Payments .................................................................................................. 7
Section 3.3 Interest Rate and Payment Adjustment ............................................................ 7
Section 3.4 Place of Payments ............................................................................................ 7
Section 3.5 No Abatement .................................................................................................. 8
Section 3.6 Prepayment of Amount Advanced ................................................................... 8
ARTICLE IV
PROJECT FUND
Section 4.1 Project Fund ..................................................................................................... 8
Section 4.2 Deposit or Investment ...................................................................................... 8
Section 4.3 Disbursement ................................................................................................... 9
Section 4.4 Termination ...................................................................................................... 9
Section 4.5 Reliance of Bank on Documents.................................................................... 10
Section 4.6 Indemnification of Bank ................................................................................ 10
Section 4.7 Fees ................................................................................................................ 10
ARTICLE V
ACQUISITION, CONSTRUCTION AND INSTALLATION OF THE PROJECT
Section 5.1 Acquisition, Construction and Installation of the Project .............................. 10
Section 5.2 Right of Entry and Inspection ........................................................................ 11
Section 5.3 Completion of the Project .............................................................................. 11
Section 5.4 Payment and Performance Bonds .................................................................. 11
Section 5.5 Contractor’s General Public Liability and Property Damage Insurance ....... 12
Section 5.6 Contractor’s Builder’s Risk Insurance ........................................................... 12
Section 5.7 Contractor’s Worker’s Compensation Insurance ........................................... 13
33
5581627v1 14038.00022
TABLE OF CONTENTS
(continued)
Page
ii
Section 5.8 Filing With the Bank ...................................................................................... 13
ARTICLE VI
RESPONSIBILITIES OF THE COUNTY
Section 6.1 Care and Use .................................................................................................. 13
Section 6.2 Inspection ....................................................................................................... 14
Section 6.3 Utilities ........................................................................................................... 14
Section 6.4 Taxes .............................................................................................................. 15
Section 6.5 Title Insurance ............................................................................................... 15
Section 6.6 Insurance ........................................................................................................ 15
Section 6.7 Rating and Insurance...................................................................................... 16
Section 6.8 Risk of Loss ................................................................................................... 16
Section 6.9 Performance by the Bank of the County’s Responsibilities .......................... 17
Section 6.10 Financial Statements ...................................................................................... 17
Section 6.11 Leasing by County or Board of Education .................................................... 17
ARTICLE VII
TITLE; LIENS; PERSONAL PROPERTY
Section 7.1 Title ................................................................................................................ 18
Section 7.2 Liens ............................................................................................................... 18
Section 7.3 Personal Property ........................................................................................... 18
ARTICLE VIII
DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS
Section 8.1 Damage, Destruction or Condemnation ......................................................... 18
Section 8.2 Use of Net Proceeds to Repair or Replace the Mortgaged Property.............. 19
Section 8.3 Cooperation of Bank ...................................................................................... 19
ARTICLE IX
REPRESENTATIONS OF THE COUNTY AND BANK
Section 9.1 Representations, Covenants and Warranties of the County ........................... 20
Section 9.2 Representations, Covenants and Warranties of the Bank .............................. 21
ARTICLE X
TAX COVENANTS
Section 10.1 Tax Covenants ............................................................................................... 21
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TABLE OF CONTENTS
(continued)
Page
iii
ARTICLE XI
INDEMNIFICATION
Section 11.1 Indemnification .............................................................................................. 22
ARTICLE XII
DISCLAIMER OF WARRANTIES
Section 12.1 No Representations by the Bank .................................................................... 23
Section 12.2 Disclaimer by the Bank .................................................................................. 23
ARTICLE XIII
DEFAULT AND REMEDIES
Section 13.1 Definition of Event of Default ....................................................................... 23
Section 13.2 Remedies on Default ...................................................................................... 24
Section 13.3 Further Remedies ........................................................................................... 25
Section 13.4 Right of Board of Education .......................................................................... 25
ARTICLE XIV
ASSIGNMENT
Section 14.1 Assignment by the County ............................................................................. 25
Section 14.2 Assignment by the Bank ................................................................................ 25
ARTICLE XV
LIMITED OBLIGATION OF THE COUNTY
Section 15.1 Limited Obligation of the County .................................................................. 26
ARTICLE XVI
MISCELLANEOUS
Section 16.1 Waiver ............................................................................................................ 27
Section 16.2 Severability .................................................................................................... 27
Section 16.3 Governing Law .............................................................................................. 27
Section 16.4 Notices ........................................................................................................... 27
Section 16.5 Section Headings ........................................................................................... 28
Section 16.6 Entire Contract ............................................................................................... 28
Section 16.7 Binding Effect ................................................................................................ 28
Section 16.8 Time ............................................................................................................... 28
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TABLE OF CONTENTS
(continued)
Page
iv
Section 16.9 If Payment or Performance Date Not a Business Day ................................... 28
Section 16.10 Covenants of County not Covenants of Officials Individually ...................... 28
Section 16.11 Execution in Counterparts.............................................................................. 28
Section 16.12 Proposal Letter ............................................................................................... 28
Payment Schedule ..........................................................................................................................31
Exhibit A - Description of the Project ............................................................................... A-1
Exhibit B - Description of the Real Property .....................................................................B-1
Exhibit C - Project Fund Requisition .................................................................................C-1
36
5581627v1 14038.00022
This instrument has been pre-audited
in the manner required by
The Local Government Budget and
Fiscal Control Act.
____________________________
Amy Wehrenberg
Finance Director
INSTALLMENT FINANCING CONTRACT
This INSTALLMENT FINANCING CONTRACT, dated October 16, 2014 (this
“Contract”), is between BRANCH BANKING AND TRUST COMPANY a North Carolina
state-chartered bank (the “Bank”), and the COUNTY OF PERSON, NORTH CAROLINA, a
body corporate and politic and a political subdivision of the State of North Carolina (the
“County”), under the Constitution and laws of the State of North Carolina (the “State”).
PREAMBLE
WHEREAS, the County has the power, pursuant to Section 160A-20 of the General
Statutes of North Carolina, as amended, to (i) finance the purchase of real and personal property
by installment contracts that create in the property purchased a security interest to secure
payment of the purchase price to the entity advancing moneys for such transaction and
(ii) finance the construction of fixtures or improvements on real property by contracts that create
in such fixtures or improvements and in the real property on which such fixtures or
improvements are located a security interest to secure repayment of moneys advanced or made
available for such construction;
WHEREAS, the County and The Person County Board of Education, a body corporate
which has general control and supervision of all matters pertaining to the public schools in the
Person County Schools, its respective school administrative unit, (the “Board of Education”),
have determined to cooperate in a plan to finance a portion of the cost of a project which each
has found to be necessary and desirable to provide for improved public school facilities and
improved public education in such school administrative unit;
WHEREAS, such project consists of the repair or replacement of the roof on Earl
Bradsher Preschool, as more particularly described in Exhibit A hereto (the “School Project”);
WHEREAS, the County has also determined to finance a portion of the cost of a project
consisting of the repair or replacement of the roof on the Kirby Civic Auditorium and the
acquisition and improvement of a building and related property to house the Person County
Recycling Center, as more particularly described in Exhibit A hereto (collectively, the “County
Project” and, together with the School Project, the “Project);
WHEREAS, as a part of such plan, the County and the Board of Education have entered
into an Administrative Agreement (as hereinafter defined) and a Lease (as hereinafter defined)
pursuant to which the Board of Education has conveyed to the County and the County has leased
37
5581627v1 14038.00022
2
to the Board of Education the site of Earl Bradsher Preschool together with the improvements
thereon;
WHEREAS, in order to finance a portion of the cost of the Project the Board of
Commissioners for the County (the “Board of Commissioners”) has determined that it is in the
best interests of the County to enter into this Contract with the Bank under which the Bank will
advance funds for such purpose and the County will make Installment Payments and Additional
Payments (as each such term is hereinafter defined) in consideration thereof;
WHEREAS, the Bank desires to advance funds pursuant to this Contract to enable the
County to finance a portion of the cost of the Project;
WHEREAS, the obligation of the County to make Installment Payments and Additional
Payments under this Contract shall constitute a limited obligation of the County, payable solely
from then currently budgeted appropriations of the County, and shall not constitute a direct or
indirect pledge of the faith and credit or taxing power of the County within the meaning of the
Constitution of the State;
WHEREAS, in order to secure the obligations of the County under this Contract, the
County has entered into a Deed of Trust (as hereinafter defined) with the deed of trust trustee
named therein for the benefit of the Bank creating a lien on all of the right, title and interest of
the County in and to the Mortgaged Property (as hereinafter defined);
WHEREAS, no deficiency judgment may be rendered against the County in any action
for breach of a contractual obligation under this Contract, and the taxing power of the County is
not and may not be pledged in any way directly, indirectly or contingently to secure any moneys
due under this Contract;
WHEREAS, the execution, delivery and performance of this Contract have been
authorized, approved and directed by the Board of Commissioners by a resolution passed by the
Board of Commissioners on October 6, 2014; and
WHEREAS, the execution, delivery and performance of this Contract by the Bank have
been authorized, approved and directed by all necessary and appropriate action of the Bank;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants in this Contract contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The following terms have the meanings specified below
unless the context clearly requires otherwise:
“Additional Payments” means the reasonable and customary expenses and fees of the
Bank related to the transactions contemplated by this Contract, any expenses (including
attorneys’ fees) of the Bank in prosecuting or defending any action or proceeding in connection
38
5581627v1 14038.00022
3
with this Contract and any taxes or any other expenses, including, but not limited to, license and
permit fees, state and local income, sales and use or ownership taxes, property taxes and other
expenses in connection with the maintenance of the Mortgaged Property that the Bank is
expressly required to pay as a result of this Contract (together with interest that may accrue
thereon in the event that the County shall fail to pay the same, as set forth in this Contract).
“Administrative Agreement” means the Agreement Concerning School Roof
Improvements, dated October 16, 2014, between the County and the Board of Education.
“Amount Advanced” means the aggregate principal amount of $2,360,000 advanced by
the Bank on the date hereof to enable the County to finance a portion of the Cost of the Project.
“Bank” means Branch Banking and Trust Company or its successors and assigns.
“Bank Representative” means any vice president of the Bank or such other person or
persons at the time designated to act on behalf of the Bank for purposes of performing any act on
behalf of the Bank under this Contract by a written certificate furnished to the County and the
Board of Education containing the specimen signatures of such person or persons and signed on
behalf of the Bank by any vice president.
“Board of Commissioners” means the duly elected governing Board of Commissioners
for the County or any successor to its functions.
“Board of Education” means The Person County Board of Education or any successor to
its functions.
“Business Day” means a day on which banks in the State are not by law required or
authorized to remain closed.
“Closing Date” means the date on which this Contract is executed and delivered in
consideration of the deposit of the Amount Advanced into the Project Fund as provided herein.
“Code” means the Internal Revenue Code of 1986, as amended, including any temporary,
proposed or final Treasury Regulations promulgated thereunder.
“Completion Date” means the date on which completion of the acquisition, construction
and installation of the Project occurs, as evidenced by the certificate provided for in Section 5.3.
“Construction Contracts” means the contracts between the County or the Board of
Education and the contractors selected and hired by the County or the Board of Education
relating to the acquisition, construction and installation of the Project.
“Cost of the Project” shall be deemed to include payment of or reimbursement for the
following items:
(a) obligations incurred or assumed in connection with the acquisition,
construction and installation of the Project;
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5581627v1 14038.00022
4
(b) the cost of the acquisition, construction and installation of the Project,
including, without limitation, the cost of architectural and engineering services, the
Bank’s fees and expenses (including the fees and expenses of its counsel) incurred in
connection with the advance of the Amount Advanced to the County, fees and expenses
of the Local Government Commission of North Carolina, if any, other legal and fiscal
agency fees and expenses, taxes, inspection costs, the cost of permit fees and any filing
and recording costs relating to the Project, but excluding any related State sales or use tax
for which the County or the Board of Education will be entitled to a refund; and
(c) all other costs which are considered to be a part of the cost of the
acquisition, construction and installation of the Project in accordance with generally
accepted accounting principles, including sums required to reimburse the County or the
Board of Education for advances made by the County that are properly chargeable to the
acquisition, construction and installation of the Project.
“County” means the County of Person, North Carolina or any successor to its functions.
“County Project” means, collectively, the repair or replacement of the roof on the Kirby
Civic Center and the acquisition and improvement of a building and related property to house the
Person County Recycling Center, as more particularly described in Exhibit A hereto.
“County Representative” means (i) the Chairman of the Board of Commissioners, Clerk
to the Board of Commissioners, County Manager of the County, Finance Director of the County
or such other person or persons at the time designated to act on behalf of the County for the
purpose of performing any act under this Contract by a written certificate furnished to the Bank
and the Board of Education containing the specimen signatures of such person or persons and
signed on behalf of the County by the County Manager of the County, or (ii) if any or all of the
County’s rights and obligations are assigned under this Contract, the person or persons at the
time designated to act on behalf of the County and the assignee by a written certificate similarly
furnished and of the same tenor.
“Deed of Trust” means the Deed of Trust and Security Agreement, made October 16,
2014, from the County to F. Louis Loyd, III, as trustee, for the benefit of the Bank, as
beneficiary.
“Deed of Trust Trustee” means F. Louis Loyd, III, as trustee named in the Deed of Trust,
and any successor trustee thereto.
“Engineer” means any engineer, engineering consultant or architect, or firm thereof, hired
by or employed by the County or the Board of Education, licensed in the State and experienced
in the work for which retained.
“Event of Default” means one or more events of default as defined in Section 13.1.
“Installment Payment Dates” means the dates on which Installment Payments are due and
payable as set forth in the Payment Schedule attached hereto.
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5581627v1 14038.00022
5
“Installment Payments” means those payments to be made by the County to the Bank as
described in Article III and in the Payment Schedule attached hereto.
“Interest Rate” means 2.80% per annum calculated on the basis of a 360-day year of
twelve 30-day months.
“Lease” means the Lease, dated October 16, 2014, between the County, as lessor, and the
Board of Education, as lessee, pursuant to which the County has leased to the Board of
Education the site of Earl Bradsher Preschool together with the improvements thereon.
“Mortgaged Property” means the Real Property and all existing improvements located on
the Real Property as of the date hereof, the School Project to be acquired, constructed and
installed thereon, all other additions, alterations, enlargements, extensions, improvements and
fixtures made a part of the Real Property or the improvements thereon and all appurtenances of
any nature whatsoever, less all data processing or telecommunications equipment, all mobile or
modular classrooms, if any, all other property excluded from the lien or security interest of the
Bank under this Contract and all property released pursuant to this Contract or the Deed of Trust.
“Net Proceeds,” when used with respect to any proceeds of insurance policies, payment
bonds, performance bonds, condemnation awards or moneys received as a consequence of
default under a construction contract or otherwise made available by reason of any occurrence
described in Section 5.4 or 8.1, means the amount remaining after deducting from the gross
proceeds thereof all expenses (including, without limitation, attorneys’ fees and costs) incurred
in the collection of such proceeds.
“Payment Schedule” means the document entitled “Payment Schedule” attached hereto
and incorporated herein by reference which sets forth the Installment Payments to be made by
the County hereunder, as the same may be revised from time to time in accordance with this
Contract.
“Permitted Encumbrances” means
(1) easements, exceptions or reservations (i) for the purpose of pipelines,
telephone lines, cable television lines, telegraph lines, power lines and substations, roads,
streets, alleys, highways, parking, railroad purposes, drainage and sewerage purposes,
dikes, canals, laterals, ditches, transportation of oil, gas or other materials, removal of oil,
gas or other materials, and other like purposes, or (ii) for the joint or common use of real
property, facilities and equipment, which exist on the Closing Date or arise under the
provisions of Section 3.9 of the Deed of Trust and which, in the case of either (i) or (ii),
in the aggregate do not materially interfere with or impair the operation of the Mortgaged
Property for the purposes for which it is or may reasonably be expected to be used;
(2) the rights of the Bank under this Contract;
(3) the lien of the Deed of Trust and any other liens and encumbrances listed
in Exhibit B thereto;
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5581627v1 14038.00022
6
(4) the Lease and any sublease by the Board of Education in conformity with
the provisions of Section 6.11, all of which are expressly subordinate to the lien of the
Deed of Trust;
(5) any materialmen’s liens incurred in the ordinary course of business and
not remaining undischarged for more than sixty (60) days from the date thereof; and
(6) any other liens, encumbrances, charges and restrictions on the Real
Property described in Schedule B - Section II (excluding exception _____) of the
commitment of _______________ Title Insurance Company to issue the Title Policy
provided by the County under Section 6.5, which commitment is numbered __________,
or approved in writing by the Bank.
“Plans and Specifications” means the plans and specifications prepared by one or more
Engineers hired or employed by the County or the Board of Education relating to the acquisition,
construction and installation of the Project.
“Prime Rate” means the interest rate so denominated and set by Branch Banking & Trust
Company of North Carolina (whether or not such Bank, or any affiliate thereof, is at any time the
beneficiary under this Agreement) as its “Prime Rate,” as in effect from time to time.
“Project” means, collectively, the County Project and the School Project.
“Project Fund” means the separate fund created under Section 4.1 for the purpose of
disbursing the Amount Advanced and interest earnings thereon and any other funds deposited
therein.
“Rate Adjustment Event” means any action by the Internal Revenue Service (including
the delivery of a deficiency notice) or any other federal court or administrative body determining
that the interest components of the Installment Payments, or any portion thereof, are includable
in any beneficiary’s gross income for federal income tax purposes as a result of any
misrepresentation by the County or as a result of any action the County takes or fails to take.
“Real Property” means the site of Earl Bradsher Preschool, described in Exhibit B hereto
and incorporated herein by reference, as the same may be amended from time to time in
accordance with the provisions of the Deed of Trust.
“School Project” means the repair or replacement of the roof on Earl Bradsher Preschool,
as more particularly described in Exhibit A hereto.
“State” means the State of North Carolina.
“Title Policy” means the policy of title insurance issued by _____________ Title
Insurance Company pursuant to Section 6.5.
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ARTICLE II
AMOUNT ADVANCED
Section 2.1 Advance of Amount Advanced. The Bank hereby makes an advance to
the County of the Amount Advanced, and the County hereby accepts from the Bank the Amount
Advanced to be applied in accordance with the terms and conditions of this Contract. The
proceeds of the Amount Advanced will be used to acquire, construct and install the Project as
provided in this Contract.
ARTICLE III
INSTALLMENT PAYMENTS; ADDITIONAL PAYMENTS
Section 3.1 Amounts and Times of Installment Payments and Additional Payments.
(a) The County shall repay the Amount Advanced in installments, together with
interest thereon at the Interest Rate, as provided in this Contract and the Payment Schedule.
Each installment shall be deemed an Installment Payment and shall be paid in the amounts and at
the time set forth in the Payment Schedule, except as otherwise provided in this Contract. Each
amount received by the Bank as an Installment Payment shall be deemed to be applied first to the
payment of the interest component and then to the payment of the principal component of such
Installment Payment.
(b) The County shall pay Additional Payments on a timely basis directly to each
person or entity to which any Additional Payments are owed.
Section 3.2 Late Payments. If the County fails to pay any Additional Payment or any
Installment Payment more than five (5) business days after the due date, then interest on the
principal component of any unpaid Installment Payment shall continue to accrue at the Interest
Rate and, to the extent permitted by law, the County shall pay additional interest on the unpaid
amount at an annual rate equal to the Prime Rate from the original due date.
Section 3.3 Interest Rate and Payment Adjustment.
(a) Upon any Rate Adjustment Event, (i) the unpaid principal portion of the Amount
Advanced shall continue to be payable on dates and in amounts as set forth in the Payment
Schedule, but (ii) the interest components of the Installment Payments shall be recalculated, at an
interest rate equal to an annualized interest rate equal to the Prime Rate plus 2% (200 basis
points), from the date (retroactively, if need by) determined pursuant to the Rate Adjustment
Event to be the date interest became includable in any beneficiary’s gross income for federal
income tax purposes.
(b) The County shall pay interest at such adjusted rate (subject to credit for interest
previously paid) to each affected beneficiary, notwithstanding the fact that any particular
beneficiary may not be a beneficiary under this Contract on the date of a Rate Adjustment Event.
The County shall additionally pay to each affected beneficiary any interest, penalties or other
charges assessed against or payable by such beneficiary and attributable to a Rate Adjustment
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Event notwithstanding the prior repayment of the entire Amount Advanced or any transfer to
another beneficiary.
Section 3.4 Place of Payments. All payments required to be made to the Bank under
this Contract shall be made to the Bank at the address set forth in the Payment Schedule in
immediately available funds or as may be otherwise directed in writing by the Bank.
Section 3.5 No Abatement. There will be no abatement or reduction of the Installment
Payments or Additional Payments by the County for any reason, including but not limited to, any
failure by the County to appropriate funds to the payment of the Installment Payments or
Additional Payments, any defense, recoupment, setoff, counterclaim or any claim (real or
imaginary) arising out of or related to the acquisition, construction and installation of the Project.
The County assumes and shall bear the entire risk of loss and damage to the Project from any
cause whatsoever, it being the intention of the parties hereto that the Installment Payments shall
be made in all events unless the obligation to make the Installment Payments is terminated as
otherwise provided in this Contract.
Section 3.6 Prepayment of Amount Advanced. The County shall have the option to
prepay or provide for the prepayment of the outstanding principal components of the Installment
Payments in whole but not in part on any Installment Payment Date at a prepayment price equal
to one hundred one percent (101%) of such principal components, plus accrued interest thereon
to the date of such prepayment, upon not less than thirty (30) days prior written notice of such
prepayment to the Bank.
ARTICLE IV
PROJECT FUND
Section 4.1 Project Fund. The Bank has caused the Amount Advanced to be deposited
in the Project Fund, a separate fund hereby created and established with the Bank and designated
as the “County of Person 2014 Project Fund,” to be held in trust and applied by the Bank in
accordance with the provisions of this Article IV. Until all amounts deposited to the credit of the
Project Fund are applied to pay a part of the Cost of the Project, such amounts are hereby
pledged by the County to the Bank as security for the performance by the County of its
obligation to repay the Amount Advanced when due and its other payment obligations
hereunder.
Section 4.2 Deposit or Investment. Moneys deposited in the Project Fund shall be
held in a public funds money rate savings account offered by the Bank that complies with the
requirements of Section 159-30 of the General Statutes of North Carolina, as amended. If such
account ceases to exist while the moneys are deposited therein, then the Bank shall deposit or
invest such moneys as shall be determined by the Bank upon consultation with the County. In
addition, the County may at any time direct the Bank to deposit or invest such moneys in the
following classes of deposits or securities to the extent permitted by law: (a) The North Carolina
Capital Management Trust, (b) obligations of the United States, (c) obligations of agencies of the
United States fully guaranteed both as to principal and interest by the United States and
(d) commercial paper, certificates of deposit and bankers’ acceptances of BB&T Corporation and
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its bank subsidiaries, or of other banks and corporations so long as the rating on any such
obligation is at least equal to the rating on similar obligations of BB&T Corporation (or its bank
subsidiaries, in the case of certificates of deposit and bankers’ acceptances) at the time of such
deposit or investment. The County will pay all associated costs related to the making of any
such alternative investment, including the Bank’s reasonable fees and expenses of making such
investment (including any standard fees associated with opening and maintaining an account
appropriate to such alternative investment). If necessary in connection with any such direction
by the County, the County and the Bank will make reasonable efforts to establish additional
operating arrangements, which may include amending this Contract, to effectuate such direction
by the County. Earnings on moneys deposited or invested in the Project Fund shall be retained
in the Project Fund pending their disbursement in accordance with this Article IV.
Section 4.3 Disbursement. Unless the Project Fund is earlier terminated in accordance
with the provisions of Section 4.4, moneys in the Project Fund shall be disbursed by the Bank in
payment of a part of the Cost of the Project upon receipt by the Bank of a requisition from the
County, substantially in the form set forth in Exhibit C attached hereto, signed by a County
Representative, together with the documents or other items required thereunder.
The County shall deliver each requisition to the Bank. The Bank shall undertake such
review of the matters referred to in such requisition as it shall deem appropriate, and, if it is
satisfied as to such matters, it shall then within three (3) Business Days disburse funds from the
Project Fund to the County to pay the obligations described in such requisition or to reimburse
the County for the payment of such obligations.
The Bank may conclusively rely upon all requisitions received as conditions of payment
from the Project Fund. In addition, the Bank may request such additional information as it may
reasonably request to evidence the propriety of any requested payment from the Project Fund.
If moneys in the Project Fund are insufficient to pay the Cost of the Project, the County
shall provide or cause the Board of Education to provide any balance of the funds needed to
complete the Project. Any moneys remaining in the Project Fund after completion of the Project
in accordance with Section 5.3 shall be used (a) as necessary, first, to pay the interest component
of any scheduled Installment Payment which has become due and payable if, in the opinion of
nationally recognized bond counsel, it is permissible to do so, second, to pay the principal
component of any scheduled Installment Payment which has become due and payable and, third,
to pay the outstanding principal components of the remaining Installment Payments coming due
thereafter in the order of their due dates or (b) at the option of the County, to pay for such other
capital facilities as the County may determine, provided that such use is authorized by law, that
the County has obtained the consent of the Bank as to such use, which consent shall not be
unreasonably withheld, and that, in the opinion of nationally recognized bond counsel, it is
permissible to do so. Any moneys remaining in the Project Fund on termination thereof before
completion of the Project shall be credited against future principal components of Installment
Payments coming due in the order of their due dates.
Notwithstanding any other provision of this Contract, the Bank will not be obligated to
honor any requisition for disbursement of funds after thirty (30) days from the Closing Date until
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the County provides the Bank with a policy of title insurance that meet the requirements of
Section 6.5.
Section 4.4 Termination. The Project Fund shall be terminated at the earliest of (a) the
final distribution of all moneys in the Project Fund, (b) the receipt by the County of written
notice of an Event of Default given by the Bank or (c) the termination of this Contract.
Section 4.5 Reliance of Bank on Documents. The Bank may act in reliance on any
writing or instrument or signature which it, in good faith, believes to be genuine and may assume
the validity and accuracy of any statement or assertion contained in such a writing or instrument.
The Bank is not liable in any manner for the sufficiency or correctness as to form, manner and
execution, or validity of any instrument nor as to the identity, authority, or right of any person
executing the same; and its duties under this Article are limited to the receipt of such moneys,
instruments or other documents received by it as the Bank and the deposit or investment and
disposition of the same in accordance herewith.
Section 4.6 Indemnification of Bank. Unless the Bank is guilty of negligence with
regard to its duties under this Article, the County agrees to indemnify the Bank and hold it
harmless as provided in Section 11.1. In connection therewith, the Bank shall be entitled to hold
all moneys deposited with it under this Contract, except for moneys expressly set aside to pay the
Installment Payments, for indemnification for reasonable attorneys’ fees, court costs, any suit,
interpleader or otherwise, or any other expenses, fees or charges of any character or nature,
including but not limited to those which may be incurred by the Bank by reason of disputes
arising between the County and the Bank as to the correct interpretation of this Contract and
instructions given to the Bank under this Contract, or otherwise, until and unless such fees, costs,
expenses or charges are fully paid.
Section 4.7 Fees. The County will pay to the Bank a fee of $5,900, which includes the
expenses incurred by the Bank in connection with the advance of the Amount Advanced under
this Contract, the fees of its counsel and any other expenses of the Bank except as hereinafter
provided. If the County at any time directs the Bank to deposit or to invest the moneys in the
Project Fund differently than the initial deposit of such moneys pursuant to Section 4.2, then the
County shall pay to the Bank any standard set-up, administration and transaction fees relating to
such change in deposit or investment.
ARTICLE V
ACQUISITION, CONSTRUCTION AND INSTALLATION OF THE PROJECT
Section 5.1 Acquisition, Construction and Installation of the Project. The County
shall comply or cause the Board of Education to comply with the provisions of Article 8 of
Chapter 143 of the General Statutes of North Carolina, as amended, and enter into or cause the
Board of Education to enter into the Construction Contracts relating to the Project. The County
shall cause the acquisition, construction and installation of the Project to be carried on
expeditiously in accordance with the Plans and Specifications, all applicable statutes and
ordinances and all other applicable requirements of all regularly constituted authorities having
jurisdiction over the same. The County shall insure that the Project will not violate any
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applicable use or other restrictions contained in prior conveyances or applicable protective
covenants or restrictions. The County shall promptly cause to be corrected any defect in the
Project or any departure from the Plans and Specifications, unless it obtains the approval of the
Bank otherwise, which approval shall not be unreasonably denied.
The County may make, or cause to be made, such changes in the Project as it deems
necessary or appropriate to cause the Project to be completed for a cost within the funds
available therefor; provided, however, that no change may be made in the Project which would
result in its use for purposes other than governmental facilities or public school facilities. In
addition, no change may be made unless the related costs are capital costs under applicable
federal income tax principles and, if a change would be material as to the scope of the Project,
(i) the County has first notified the Local Government Commission of North Carolina and the
Bank of such change, (ii) in the opinion of the County Manager or his designee, such change will
not have an adverse effect on the appraised value of the Mortgaged Property and (iii) in the
opinion of nationally recognized bond counsel, it is permissible to make such change.
Furthermore, if a change would increase the cost of the Project by more than $100,000, then the
County must inform the Bank of the source of the funds that are to be used to pay for such
change before it may make such change or cause it to be made. In the event of a change in the
Project which would render materially inaccurate the description in Exhibit A attached hereto,
the County shall provide, or cause to be provided, to the Bank a revised Exhibit A for attachment
hereto which reflects accurately the Project as changed.
Section 5.2 Right of Entry and Inspection. The Bank and its representatives and
agents shall have the right to enter on and inspect the real property upon which the Project is to
be located and the improvements thereto and thereon from time to time, during the acquisition,
construction or installation of the Project, to the extent that the County or the Board of Education
has such right, and the County shall cause any contractor or subcontractor to cooperate with the
Bank and its representatives and agents during such inspections. No right of inspection or
approval contained in this Contract imposes on the Bank any duty or obligation whatsoever to
undertake any inspection or to give any approval, except as provided in Section 5.1.
Section 5.3 Completion of the Project. The County shall use its best efforts to cause
the acquisition, construction and installation of the Project to be completed within 18 months,
unforeseeable delays beyond the reasonable control of the County or the Board of Education
only excepted. Upon completion of the acquisition, construction and installation of the Project,
the County Representative shall deliver to the Bank (a) certificates of the County and the Board
of Education stating collectively the fact and date of such completion and that all of the Cost of
the Project has been determined and paid (or that all of such Cost has been paid less specified
claims which are subject to dispute and for which a retention in the Project Fund is to be
maintained in the full amount of such claims until such dispute is resolved) and (b) a certificate
of a duly authorized officer or agent of the architects, engineers or supervising contractors
selected and hired by the County or the Board of Education in connection with the acquisition,
construction and installation of the Project stating the fact and date of such completion. If the
accounting of the Project Fund by the Bank shows that moneys in the Project Fund will remain
unexpended for the Cost of the Project, the unexpended funds in the Project Fund shall be
applied in accordance with Section 4.3.
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Section 5.4 Payment and Performance Bonds. Each contractor entering into a
Construction Contract relating to the School Project shall be required to furnish a performance
bond and a separate labor and material payment bond as required by North Carolina General
Statutes, Article 3, Chapter 44A, each of which shall name the Bank as an obligee in addition to
the County or the Board of Education and copies of which shall be provided to the Bank. In lieu
of furnishing a performance bond and a separate labor and material payment bond, each
contractor may furnish collateral in the amount of its Construction Contract securing the County
or the Board of Education, as may be applicable, and the Bank pursuant to North Carolina
General Statutes, Article 8, Chapter 143 (Section 143-129), evidence of which shall be provided
to the Bank.
In the event of any material default by a contractor under any Construction Contract
relating to the School Project, or in the event of a material breach of warranty with respect to any
materials, workmanship or performance, the County shall promptly proceed, or cause the Board
of Education to proceed promptly, either separately or in conjunction with others, to pursue
diligently its remedies against such contractor and/or against each surety of any bond securing
the performance of such Construction Contract. The Net Proceeds of any amounts recovered by
way of damages, refunds, adjustments or otherwise in connection with the foregoing, after
reimbursement to the County or the Board of Education of any amounts theretofore paid by the
County or the Board of Education and not previously reimbursed to the County or the Board of
Education for correcting or remedying the default or breach of warranty which gave rise to the
proceedings against such contractor or surety, shall be applied as provided in Section 8.2. To the
extent that the Net Proceeds of any payment bond or collateral required by this Section are not
applied directly to pay the Cost of the Project, they shall likewise be applied as provided in
Section 8.2.
Section 5.5 Contractor’s General Public Liability and Property Damage Insurance.
Each contractor entering into a Construction Contract relating to the School Project shall be
required to procure and maintain at its own expense during the duration of such Construction
Contract standard form (a) comprehensive general public liability and property damage
insurance in the amount of at least $2,000,000 and (b) comprehensive automobile liability
insurance on owned, hired and non-owned vehicles in the amount of at least $2,000,000. Such
policies shall include the County or the Board of Education, as may be applicable, and the Bank
as additional named insureds or loss payees. A certificate evidencing such coverage or, if such
insurance is provided by a private carrier, a completed certificate of insurance, in form
acceptable to the County or the Board of Education and the Bank, shall be provided to the
County or the Board of Education and the Bank with respect to each contractor entering into a
Construction Contract. Such insurance shall provide protection from all claims for bodily injury,
including death, property damage and contractual liability, products/completed operations, broad
form property damage and XCU (explosion, collapse and underground property damage), where
applicable.
Section 5.6 Contractor’s Builder’s Risk Insurance. Except as hereinafter provided,
each contractor entering into a Construction Contract relating to the School Project shall be
required to procure and maintain at its own expense property insurance (builder’s risk) with
respect to the work for which it is responsible under such Construction Contract at the full and
insurable value thereof. Such insurance will include the County or the Board of Education, as
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may be applicable, as an additional named insured or loss payee and include a lender’s loss
payable endorsement in favor of the Bank, and shall insure against “all risk” subject to standard
policy conditions and exclusions. Each such contractor shall also purchase and maintain similar
property insurance for portions of such work stored off the site of the School Project or in transit
when such portions of such work are to be included in an application for payment. Each such
contractor shall be responsible for the payment of any deductible amounts associated with such
insurance. A certificate evidencing such coverage or, if such insurance is provided by a private
carrier, a completed certificate of insurance, in form acceptable to the County or Board of
Education and the Bank, shall be provided to the County or Board of Education and the Bank
with respect to each contractor entering into a Construction Contract relating to the School
Project.
The County may provide, or cause to be provided, insurance that is substantially similar
to the insurance required by this Section in lieu of requiring a contractor to provide the insurance
required by this Section.
Section 5.7 Contractor’s Worker’s Compensation Insurance. Each contractor entering
into a Construction Contract relating to the School Project shall be required to procure and
maintain at its own expense worker’s compensation insurance during the term of such
Construction Contract, covering its employees working thereunder. A certificate evidencing
such coverage or, if such insurance is provided by a private carrier, a completed certificate of
insurance, in form acceptable to the County or Board of Education and the Bank, shall be
provided to the County or Board of Education and the Bank with respect to each contractor
entering into a Construction Contract relating to the School Project. Each such Construction
Contract shall also provide that each subcontractor of any contractor who is a party to such
Construction Contract shall be required to furnish similar worker’s compensation insurance.
Section 5.8 Filing With the Bank. The County shall cause copies of all performance
bonds and insurance contracts or approved certificates thereof, as required under sections 5.4,
5.5, 5.6 and 5.7 to be delivered to the Bank within thirty (30) days after a request therefor by the
Bank and in such form as to evidence compliance with the provisions of such sections.
ARTICLE VI
RESPONSIBILITIES OF THE COUNTY
Section 6.1 Care and Use. The County shall cause the Mortgaged Property to be used
in a careful and proper manner, in compliance with all applicable laws and regulations, and, at its
sole cost and expense, shall service, repair and maintain the Mortgaged Property, or cause the
Mortgaged Property to be serviced, repaired and maintained, so as to keep the Mortgaged
Property in good condition, repair, appearance and working order for the purposes intended,
ordinary wear and tear excepted, and shall replace or restore, or cause to be replaced or restored,
any part of the Mortgaged Property as may from time to time become worn out, unfit for use,
destroyed or damaged. Any and all repairs or replacements of the Mortgaged Property shall
constitute accessions to the Mortgaged Property and shall be subject to all the terms and
conditions of this Contract and included in the term “Mortgaged Property” as used in this
Contract.
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In any instance where the County or the Board of Education determines that any fixture
constituting a part of the Mortgaged Property has become inadequate, obsolete, worn-out,
unsuitable, undesirable or unnecessary, the County or the Board of Education may remove such
fixture and sell, trade-in, exchange or otherwise dispose of it without any responsibility or
accountability to the Bank therefor, provided that the County shall either:
(a) substitute or cause to be substituted (by direct payment of the costs thereof or by
designating as a fixture constituting a part of the Mortgaged Property other equipment,
machinery or other personal property) and install as a fixture other equipment, machinery or
other personal property having equal or greater value and utility (but not necessarily serving the
same function) in the operation of the Mortgaged Property or
(b) not make any such substitution and installation, provided that (i) the appraised
value of the remaining Mortgaged Property will not be less than the aggregate outstanding
principal components of the Installment Payments and (ii) upon the request of the Bank, which
request may be made from time to time, the County will provide or cause to be provided to the
Bank reasonable evidence of the appraised value of the Mortgaged Property at the time of such
request.
The County may also, upon the loss of or damage to any portion of any fixture
constituting a part of the Mortgaged Property that is to be protected against by insurance required
or permitted by Section 6.6 and in lieu of making any claim upon such insurance, substitute and
install or cause to be substituted and installed as a fixture other equipment, machinery or other
personal property having equal or greater value and utility (but not necessarily serving the same
function) in the operation of the Mortgaged Property for such lost or damaged fixture. In any
instance in which the County so elects to substitute or cause to be substituted any fixture for any
damaged fixture, the County or the Board of Education may remove the damaged fixture from
the Mortgaged Property and dispose of it without any further responsibility or accountability to
the Bank therefor.
All substituted equipment, machinery or other personal property installed as a fixture
pursuant to this Section, except for any data processing or telecommunications equipment and
any mobile or modular classrooms, shall be free of all liens and encumbrances (other than
Permitted Encumbrances) and shall become a part of the Mortgaged Property. The Bank will
cooperate with the County and the Board of Education in implementing the County’s rights to
dispose of fixtures pursuant to this Section and will execute any and all conveyances, releases or
other documents necessary or appropriate in connection therewith and with the release of fixtures
from the lien of the Deed of Trust or any other documents evidencing a security interest therein
in favor of the Bank.
The parties acknowledge that the Board of Education shall have the right, in its sole
discretion and at its own expense, to acquire, construct and install real property improvements or
items of equipment or other personal property other than the School Project in or upon any
portion of the Leased Property (as defined in the Lease) that do not materially impair the
effective use or materially decrease the value of the Leased Property, as provided in Section 7.2
of the Lease.
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Section 6.2 Inspection. The Bank has the right on reasonable prior notice to the
County or the Board of Education, as may be applicable, to enter upon the Mortgaged Property
to inspect the Mortgaged Property and observe its use during normal business hours.
Section 6.3 Utilities. The County shall pay, or cause to be paid, all charges for gas,
water, steam, electricity, light, heat or power, telephone or other utility service furnished to or
used on or in connection with the Mortgaged Property. There shall be no abatement of any
portion of the Installment Payments on account of interruption of any such services.
Section 6.4 Taxes. The County shall pay, or cause to be paid, when due any and all
taxes relating to the Mortgaged Property and the County’s obligations under this Contract
including, but not limited to, all license or registration fees, gross receipts tax, sales and use tax,
if applicable, license fees, documentary stamp taxes, rental taxes, assessments, charges, ad
valorem taxes, excise taxes, and all other taxes, licenses and charges imposed on the ownership,
possession or use of the Mortgaged Property by any governmental body or agency, together with
any interest and penalties.
Section 6.5 Title Insurance. The County agrees to obtain, at its own cost and expense,
an American Land Title Association policy of title insurance, in form satisfactory to the Bank,
effective as of the date of execution and delivery of this Contract, in an amount not less than the
Amount Advanced, naming the Bank as insured mortgagee. Such policy shall insure the fee title
of the County to the Real Property, subject only to Permitted Encumbrances, and shall be issued
by a title insurance company qualified to do business in the State of North Carolina and
acceptable to the Bank. On or before the Closing Date, the County shall provide the Bank with a
copy of the commitment of the issuer of such policy to issue such policy and, within thirty (30)
days after the Closing Date, the County shall provide the Bank with a copy of such policy.
Section 6.6 Insurance. The County shall maintain, or cause to be maintained, except
as hereinafter provided, insurance with respect to its property and business against such
casualties and contingencies in amounts not less than is customary in similar activities and
similarly situated. Without limiting the foregoing, the County shall maintain, or cause to be
maintained, except as hereinafter provided, the following insurance:
(a) Insurance against loss and/or damage to the Mortgaged Property under a policy or
policies covering such risks as are ordinarily insured against for similar property. Such
insurance (which may be builder’s risk insurance in whole or in part until the completion of the
Project) shall be in an amount not less than the lesser of (i) the full replacement cost of the
Mortgaged Property or (ii) the outstanding principal components of the Installment Payments,
but any such policy may have a deductible amount of not more than $50,000. No such policy of
insurance shall be so written that the proceeds thereof will produce less than the minimum
coverage required by the preceding sentence, by reason of co-insurance provisions or otherwise,
without the prior written consent thereto by the Bank. The term “full replacement cost” shall
mean the actual replacement cost of the Mortgaged Property, without deduction for physical
depreciation, and shall be determined once every three years by an insurance consultant, in any
case, selected and paid for by the County or the Board of Education. Each such policy shall
contain a replacement cost endorsement.
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(b) Comprehensive general liability insurance protecting the County, the Board of
Education and the Bank as their interests may appear, against liability for injuries to persons
and/or property, occurring on, in or about the Mortgaged Property, in the minimum amount of
$2,000,000 liability to any one person for property damage, $2,000,000 liability for personal
injury for any one occurrence and an aggregate annual liability limit of not less than $2,000,000,
with a deductible amount of not more than $50,000.
(c) Workers’ compensation insurance respecting all employees of the Board of
Education working at the Mortgaged Property in such amount as is customarily carried by like
organizations engaged in like activities of comparable size and liability exposure; provided that
the Board of Education may be self-insured with respect to all or any part of its liability for
workers’ compensation.
Each policy of insurance obtained pursuant to this Section shall (i) be issued by a
generally recognized and responsible insurance company qualified under the laws of the State or
the United States of America to assume the risks covered by such policy, (ii) name the County,
the Board of Education and the Bank as insureds or loss payees, as their respective interests may
appear, except that policies described in paragraph (a) shall contain standard mortgagee clauses
naming the Bank as mortgagee; and (iii) unless unavailable from the insurer, provide that such
policy shall not be cancelled or modified in any way adverse to any insured or loss payee without
at least thirty (30) days’ prior written notice to each insured or loss payee named therein. The
County or the Board of Education, as may be applicable, shall have the right to receive the
proceeds from any insurance maintained pursuant to this Section, subject, however, to the
provisions of this Article VI and Article VIII.
All such policies shall be deposited with the Bank, provided that in lieu of such policies
there may be deposited with the Bank a certificate or certificates of the respective insurers or
other evidence satisfactory to the Bank to the effect that the insurance required by this Section is
in full force and effect. Prior to the expiration of any such policy, the County shall furnish to the
Bank evidence satisfactory to the latter that the policy has been renewed or replaced or is no
longer required by this Contract.
In lieu of separate policies the County may maintain or cause the Board of Education to
maintain blanket or umbrella policies or participate in or cause the Board of Education to
participate in group risk financing programs, risk pools, purchasing groups, captive insurance
companies or state and federal programs if such policies or other insurance alternatives provide
the same coverage as required by this Section with protection against each risk not reducible by
claims for other risks to amounts less than that specified in this Section and the County deposits
with the Bank a certificate or certificates of the respective insurers evidencing such coverage and
stating, as required, the amount of coverage with respect to the Mortgaged Property or any part
thereof.
Section 6.7 Rating and Insurance. The Bank reserves the right to have this transaction
rated and/or insured by a qualified rating agency and/or insurer at the Bank’s sole cost at any
time during the Contract. The County agrees to cooperate with the Bank and the agency/insurer
in providing any requested financial or non-financial information that may be material to
obtaining the rating/insurance.
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Section 6.8 Risk of Loss. The County shall bear all risk of loss or damage to and
condemnation of the Project. In the event of loss or damage to or condemnation of the Project
resulting in Net Proceeds of any insurance policies or condemnation awards, such Net Proceeds
shall be applied in accordance with the provisions of Section 8.2.
Section 6.9 Performance by the Bank of the County’s Responsibilities. Any
performance required of the County or any payments other than Installment Payments required
to be made by the County may, if not timely performed or paid, be performed or paid by the
Bank, and, in that event, the Bank shall be immediately reimbursed by the County for such
payments or other performance by the Bank with interest thereon at the Prime Rate.
Section 6.10 Financial Statements. The County shall send to the Bank (i) a copy of the
County’s audited financial statements for each fiscal year within thirty (30) days of the County’s
acceptance of such statements, but in any event within one hundred eighty (180) days of the
completion of such fiscal year and (ii) a copy of the County’s annual budget promptly after
adoption, as well as any amendments to the budget that affect the appropriation for Installment
Payments.
The County shall furnish to the Bank, at such reasonable times as the Bank shall request,
all other financial information (including, without limitation, the County’s annual budget as
submitted or approved) as the Bank may reasonably request. The County shall permit the Bank
or its agents and representatives to inspect the County’s books and records and make extracts
therefrom.
The County represents and warrants to and covenants with the Bank that all financial
statements which have been or may be delivered to the Bank reflect or will reflect fairly and
accurately the County’s financial condition and that, except as the County may notify the Bank
otherwise, there has been and will be no material adverse change in the County’s financial
condition as reflected in the financial statements since the respective dates thereof.
Section 6.11 Leasing by County or Board of Education. The County has entered into
the Lease with the Board of Education. In addition, the Board of Education, with the written
consent of the County, may sublease any portion of the Mortgaged Property leased to it pursuant
to the Lease, subject to all of the following conditions:
(a) The County shall not be relieved of any of its obligations under this Contract.
(b) The County shall, within thirty (30) days after the execution of any sublease,
furnish or cause to be furnished to the Bank a true and complete copy of such sublease.
(c) No sublease shall cause the interest components of the Installment Payments to be
includable in gross income for purposes of federal income taxation.
(d) Any sublease shall be subject to the provisions of this Contract and the Deed of
Trust and subordinate to the lien of the Deed of Trust.
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The Board of Education may also grant licenses for the temporary use of the Leased
Property or make the Leased Property available for community use in accordance with the laws
of the State.
ARTICLE VII
TITLE; LIENS; PERSONAL PROPERTY
Section 7.1 Title. Title to the Mortgaged Property shall be in the County from and
after the date of execution and delivery of this Contract so long as the County shall not be in
default hereunder or this Contract shall not have been terminated pursuant to the provisions of
Article XIII hereof, subject to the Permitted Encumbrances, and shall vest permanently in the
County upon the payment in full of the Amount Advanced plus accrued interest thereon and all
other payments due hereunder, free and clear of any lien or security interest of the Bank under
this Contract. Simultaneously with the execution and delivery of this Contract, the County shall
deliver to the Bank the Deed of Trust in form satisfactory to the Bank. Upon payment in full of
all of the County’s obligations hereunder, including the Amount Advanced, interest accrued
thereon and all other payments due hereunder, the Bank, at the County’s request, shall release
and cancel the Deed of Trust.
Section 7.2 Liens. The County shall not, directly or indirectly, create, incur, assume
or suffer to exist any mortgage, pledge, lien, security interest, charge, encumbrance or claim on
or with respect to the Mortgaged Property or any interest therein (except for Permitted
Encumbrances) without the prior written consent of the Bank. The County shall promptly, at its
own expense, take such action as may be necessary to duly discharge any such mortgage, pledge,
lien, security interest, charge, encumbrance or claim if the same shall arise at any time. The
County shall reimburse the Bank for any expense incurred by it (including reasonable attorneys’
fees and reasonable expenses), after prior notice to the County, in order to discharge or remove
any such mortgage, pledge, lien, security interest, charge, encumbrance or claim.
Section 7.3 Personal Property. The County or the Board of Education at any time and
from time to time, in its sole discretion and at its own expense, may install or permit to be
installed items of equipment or other personal property in or upon any portion of the Mortgaged
Property and may remove or replace such items and property if they do not constitute fixtures.
All such items that constitute fixtures, except for any data processing or telecommunications
equipment and any mobile or modular classrooms, shall become a part of the Mortgaged
Property. All such items constituting data processing or telecommunications equipment or
mobile or modular classrooms or that are not deemed to be fixtures shall remain the sole personal
property of the County or the Board of Education, as may be applicable, in which the Bank shall
not have any interest, and may be modified or removed by the County or the Board of Education
at any time, provided that the County shall repair and restore, or cause to be repaired and
restored, any and all damage to the Mortgaged Property resulting from the installation,
modification or removal of any such items.
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ARTICLE VIII
DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS
Section 8.1 Damage, Destruction or Condemnation. If, during the term hereof, (i) the
Project or any portion thereof is destroyed or is damaged by fire or other casualty, (ii) title to or
the temporary or permanent use of the Project or any portion thereof or the estate of the County,
the Board of Education, the Bank or its assignee in the Project or any portion thereof is taken
under the power of eminent domain by any governmental authority other than the County or
(iii) a material defect in the acquisition, construction and installation of the Project becomes
apparent, then the County shall continue to be obligated to pay the amounts specified in Section
3.1 at the respective times required regardless of whether the documentation provided for in
Section 5.3 has been delivered.
If any part of the Mortgaged Property is destroyed or damaged by fire or other casualty,
then the County will promptly cause the Mortgaged Property to be restored to the equivalent of
its condition immediately prior to such casualty, and, if any part of the Mortgaged Property or its
use is damaged or restricted by any exercise of the power of eminent domain, then the County
will promptly cause the Mortgaged Property to be restored, repaired or modified in a manner
satisfactory to the Bank.
Section 8.2 Use of Net Proceeds to Repair or Replace the Mortgaged Property.
Except as hereinafter provided, the Bank and the County shall cause the Net Proceeds of any
insurance policies, payment bonds, performance bonds, condemnation awards or moneys
received as a consequence of default under a Construction Contract or otherwise made available
by reason of any occurrence described in Section 5.4 or 8.1 relating to the Mortgaged Property to
be deposited in the Project Fund, if received before the Completion Date, or, if received
thereafter, to be deposited in a separate fund held by the Bank. All Net Proceeds so deposited
shall be applied by the Bank to the prompt repair, restoration, modification, improvement or
replacement of the Mortgaged Property on receipt of requisitions from the County, substantially
similar in form to the form in Exhibit C attached hereto, signed by a County Representative,
together with the documents or other items required thereunder. If such Net Proceeds arising
from any single event, or any single substantially related sequence of events, are not more than
$50,000, then the Board of Education shall retain such Net Proceeds and apply them to the
prompt repair, restoration, modification, improvement or replacement of the Mortgaged Property
and thereafter shall promptly report to the County and the Bank regarding the use of such Net
Proceeds. Any repair, restoration, modification, improvement or replacement of the Mortgaged
Property paid for in whole or in part out of such Net Proceeds shall be the property of the
County, subject to the Deed of Trust, and shall be included as part of the Mortgaged Property
under this Contract.
The County shall cause the Net Proceeds of any insurance policies, payment bonds,
performance bonds, condemnation awards or moneys received as a consequence of default under
a Construction Contract or otherwise made available by reason of any occurrence described in
Section 5.4 or 8.1 relating to any portion of the Project other than the Mortgaged Property to be
used to pay for the capital costs of such governmental facilities as the County may determine,
provided that, in the opinion of nationally recognized bond counsel, it is permissible to do so.
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Section 8.3 Cooperation of Bank. The Bank shall cooperate fully with the County and
the Board of Education in filing any proof of loss with respect to any insurance policy covering
the events described in Section 8.1. In no event shall the Bank or the County voluntarily settle,
or consent to the settlement of, any proceeding arising out of any insurance claim with respect to
the Mortgaged Property without the written consent of the other.
ARTICLE IX
REPRESENTATIONS OF THE COUNTY AND BANK
Section 9.1 Representations, Covenants and Warranties of the County. The County
represents, covenants and warrants to the Bank as follows:
(a) The County is a body politic and corporate and a political subdivision organized
and existing under the Constitution and laws of the State.
(b) The Constitution and laws of the State authorize the County to (i) execute and
deliver this Contract, the Deed of Trust, the Lease and the Administrative Agreement, (ii) enter
into the transactions contemplated hereby and thereby and (iii) carry out its obligations
hereunder or thereunder.
(c) The County has duly authorized the execution and delivery of this Contract, the
Deed of Trust, the Lease and the Administrative Agreement in accordance with the Constitution
and laws of the State.
(d) Neither the execution and delivery of this Contract, the Deed of Trust, the Lease
or the Administrative Agreement, nor the fulfillment of or compliance with the terms and
conditions hereof or thereof, nor the consummation of the transactions contemplated hereby or
thereby, conflicts with or results in a breach of the terms, conditions or provisions or any charter
provision or restriction or any agreement or instrument to which the County is now a party or by
which the County is bound, or constitutes a default under any of the foregoing.
(e) Other than building permits or other procedural requirements which are a
prerequisite to the construction of the Project, no approval or consent is required from any
governmental authority with respect to the entering into or performance by the County of this
Contract, the Deed of Trust, the Lease, the Administrative Agreement or any other documents
related hereto or thereto and the transactions contemplated hereby and thereby, or if such
approval is required, it has been duly obtained.
(f) There is no action, suit, proceeding or investigation at law or in equity before or
by any court, public board or body pending or threatened against or affecting the County
challenging the validity or enforceability of this Contract, the Deed of Trust, the Lease, the
Administrative Agreement or any other documents relating hereto or thereto and the performance
of the County’s obligations hereunder and thereunder.
(g) The Project is essential for the improved administration of County government
and improved public education in the County and the Project will permit the County to carry out
public functions that it is authorized by law to perform.
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(h) The County Manager or Finance Director of the County shall include the
Installment Payments and reasonably estimated Additional Payments coming due in each fiscal
year in the corresponding annual budget request and exercise due diligence to have the Board of
Commissioners include funds for the payment thereof in the corresponding final budget of the
County. Any deletion of such funds from the County’s final budget shall be made only pursuant
to an express resolution of the Board of Commissioners which explains the reason for such
action. Subject to applicable law, the actions required of the County and its officers and of the
Board of Commissioners pursuant to this paragraph shall be deemed to be and shall be construed
to impose ministerial duties and it shall be the duty of each and every public official of the
County to take such action and do such things as are required by law in the performance of the
official duty of such official to enable the County to carry out and perform the actions required
pursuant to this paragraph and its other agreements in this Contract. Nothing contained in this
paragraph obligates the County to appropriate the moneys so budgeted or is to be construed to
conflict with the provisions of Article XV.
If within fifteen (15) days after the beginning of any fiscal year the County has not
appropriated funds for the payment of the Installment Payments and reasonably estimated
Additional Payments coming due in such fiscal year in the annual budget for such fiscal year or
if at any time the County amends an annual budget to reduce such funds, then the County shall
send a notice to such effect to the Bank and to the Local Government Commission of North
Carolina to the attention of its Secretary at 325 North Salisbury Street, Raleigh, North Carolina
27603-1385.
(i) There has not been any material change in the County’s financial condition since
the date of the last annual financial statement of the County provided to the Bank.
(j) The County acknowledges that the Bank has not acted as a financial advisor to the
County with respect to this Contract. The County has not relied on the Bank for any financial
advice.
Section 9.2 Representations, Covenants and Warranties of the Bank. The Bank
represents, covenants and warrants to the County as follows:
(a) The Bank is a North Carolina state-chartered bank duly organized, existing and in
good standing under and by virtue of the laws of the State and has the power and authority to
enter into this Contract.
(b) Neither the execution and delivery of this Contract nor the fulfillment of or
compliance with the terms and conditions hereof or thereof, nor the consummation of the
transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms,
conditions or provisions of the organizational documents of the Bank or any restriction or any
agreement or instrument to which the Bank is now a party or by which the Bank is bound.
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ARTICLE X
TAX COVENANTS
Section 10.1 Tax Covenants. The County covenants that, to the extent permitted by
law, it will not take any action, or fail to take any action, if any such action or failure to take
action would adversely affect the exclusion from gross income for federal income tax purposes
of the interest components of the Installment Payments under Section 103 of the Code. The
County will not directly or indirectly use or permit the use of any proceeds of the Project Fund or
any other funds of the County, or take or omit to take any other action, that would cause the
obligation of the County to make Installment Payments created by this Contract to be an
“arbitrage bond” within the meaning of Section 148(a) of the Code. To that end, the County has
executed the Tax Certificate, dated as of the Closing Date (the “Tax Certificate”), and will
comply with all requirements of Section 148 of the Code to the extent applicable. The County
further covenants that this Contract is not a “private activity bond” as defined in Section 141 of
the Code.
The County will maintain books on which will be recorded (i) the Bank or (ii) any
assignee of the Installment Payments due under this Contract as the registered owner of the
Installment Payments.
Without limiting the generality of the foregoing, the County agrees that there shall be
paid from time to time all amounts required to be rebated to the United States of America
pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury
Regulations as may be applicable to the obligation of the County to make Installment Payments
created by this Contract from time to time. This covenant shall survive the termination of this
Contract.
Notwithstanding any provision of this Article, if the County shall provide to the Bank an
opinion of nationally recognized bond counsel to the effect that any action required under this
Section or the Tax Certificate is no longer required, or to the effect that some further action is
required, to maintain the exclusion from gross income of the interest components of the
Installment Payments pursuant to Section 103 of the Code, the County and the Bank may rely
conclusively on such opinion in complying with the provisions of this Article.
ARTICLE XI
INDEMNIFICATION
Section 11.1 Indemnification. To the fullest extent permitted by law and subject to the
provisions of Section 160A-20 of the North Carolina General Statutes, as amended, the County
hereby agrees to indemnify, protect and save the Local Government Commission of North
Carolina, the Bank and the Deed of Trust Trustee and their respective officers, employees,
directors, members and agents (collectively the “Indemnitees”) harmless from all liabilities,
obligations, losses, claims, damages, actions, suits, proceedings, costs and expenses, including
reasonable attorneys’ fees, that (i) arise in tort, in contract, under 42 U.S. Code §1983 or under
the public bidding laws of the State or (ii) arise out of, are connected with, or result, directly or
indirectly, from the Project or any portion thereof, including, without limitation, the
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manufacture, selection, acquisition, delivery, possession, condition, construction, improvement,
environmental or other condition, lease, use, operation or return of the Project or any portion
thereof, or the transactions contemplated by this Contract; provided, however, that the right to
indemnification shall not apply to losses arising from (i) any action taken by any other
Indemnitee and (ii) the exercise of the right of the County not to appropriate moneys for the
payment of Installment Payments. The indemnification arising under this Article shall continue
in full force and effect notwithstanding the payment in full of all obligations under this Contract,
subject only to the remedies allowable under Section 160A-20 of the North Carolina General
Statutes, as amended.
ARTICLE XII
DISCLAIMER OF WARRANTIES
Section 12.1 No Representations by the Bank. The County acknowledges and agrees
that it or the Board of Education has selected or will select the Real Property and the components
of the Project, the vendors of any equipment acquired and the Engineers and contractors for the
acquisition, construction and installation of the Project based on its own judgment and disclaims
any reliance on any statements or representations by the Bank with respect thereto.
Section 12.2 Disclaimer by the Bank. THE BANK MAKES NO WARRANTIES OR
REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO THE CONDITION,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROJECT
OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE
PROJECT.
ARTICLE XIII
DEFAULT AND REMEDIES
Section 13.1 Definition of Event of Default. The County shall be deemed to be in
default under this Contract upon the happening of any of the following events of default (each,
an “Event of Default”):
(a) The County fails to make any Installment Payment or pay any other amount
hereunder when due.
(b) (i) The County fails to budget and appropriate moneys sufficient to pay all
Installment Payments and the reasonably estimated Additional Payments coming due in any
fiscal year of the County; or (ii) the County deletes from its duly adopted budget any
appropriation for the purposes specified in clause (i) above.
(c) The County fails to perform or observe any term, condition or covenant of this
Contract on its part to be observed or performed, other than as referred to in subparagraph (a) or
(b) above, or of the Deed of Trust on its part to be observed or performed, or breaches any
warranty by the County herein contained, other than as referred to in subparagraph (e) of this
Section, for a period of thirty (30) days after written notice specifying such failure or breach and
requesting that it be remedied has been given to the County by the Bank; provided, however, that
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if such failure or breach cannot with due diligence be cured within such thirty (30)-day period
and the County has promptly commenced and diligently worked to cure such failure or breach
within such thirty (30)-day period, the County will have an additional period of ninety (90) days
to cure such failure or breach and, further, that if such failure or breach cannot with due diligence
be cured within such ninety (90)-day period and the County has diligently continued to work to
cure such failure or breach within such ninety (90)-day period, then, upon consultation with the
Bank as to such matter, the County will have an additional reasonable period of time to cure such
failure or breach as long as the County diligently continues to work to cure such failure or
breach.
(d) Any bankruptcy, insolvency or reorganization proceedings or similar litigation is
instituted by the County, or a receiver, custodian or similar officer is appointed for the County or
any of its property, and such proceedings or appointments are not vacated or fully stayed within
ninety (90) days after the institution or occurrence thereof.
(e) Any warranty, representation or statement made by the County in this Contract,
the Deed of Trust or any other document executed or delivered in connection herewith or
therewith is found to be incorrect or misleading in any material respect on the date made.
(f) An attachment, levy or execution of a security interest or lien is levied on or
against any portion of the Mortgaged Property.
Section 13.2 Remedies on Default. On the occurrence of any Event of Default, the
Bank may exercise any one or more of the following remedies as the Bank, in its sole discretion,
shall elect:
(a) Declare the outstanding principal components of the Installment Payments plus
the interest component of the next due Installment Payment accrued to the date of such
declaration to be immediately due and payable without notice to or demand on the County.
(b) Proceed by appropriate court action to enforce performance by the County of the
applicable covenants of this Contract or to recover for the breach thereof (other than a failure to
pay Installment Payments or any other payment hereunder).
(c) Subject to the provisions of Article XV, exercise all the rights and remedies of a
secured party or creditor under the general laws of the State with respect to the enforcement of
the security interest granted under the Deed of Trust including, without limitation, to the extent
permitted by law, reenter and take possession of the Mortgaged Property without any court order
or other process of law and without liability for entering the premises and sell, lease, sublease or
make other disposition of the same in a commercially reasonable manner for the account of the
County, and apply the proceeds of any such sale, lease, sublease or other disposition, after
deducting all costs and expenses, including court costs and attorneys’ fees, incurred with the
recovery, repair, storage, sale, lease, sublease or other disposition of the Mortgaged Property,
toward the obligations due under this Contract and, thereafter, pay any remaining proceeds to the
County.
(d) Enforce its security interest or direct the Deed of Trust Trustee to institute
foreclosure proceedings under the Deed of Trust and sell the Mortgaged Property.
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NOTWITHSTANDING ANY OTHER PROVISIONS IN THIS CONTRACT, IT IS
THE INTENT OF THE PARTIES HERETO TO COMPLY WITH SECTION 160A-20 OF THE
GENERAL STATUTES OF NORTH CAROLINA, AS AMENDED. NO DEFICIENCY
JUDGMENT MAY BE ENTERED AGAINST THE COUNTY IN FAVOR OF THE BANK IN
VIOLATION OF SECTION 160A-20 OF THE GENERAL STATUTES OF NORTH
CAROLINA, AS AMENDED, INCLUDING, WITHOUT LIMITATION, ANY DEFICIENCY
JUDGMENT FOR AMOUNTS THAT MAY BE OWED UNDER THIS CONTRACT WHEN
THE SALE OF ALL OR ANY PORTION OF THE MORTGAGED PROPERTY IS
INSUFFICIENT TO PRODUCE ENOUGH MONEY TO PAY IN FULL ALL
OUTSTANDING OBLIGATIONS UNDER THIS CONTRACT.
Section 13.3 Further Remedies. Subject to the provisions of Article XV, this Contract
shall remain in full force and effect and the County shall be and remain liable for the full
performance of all its obligations under this Contract. All remedies of the Bank are cumulative
and may be exercised concurrently or separately. The exercise of any one remedy shall not be
deemed an election of such remedy or preclude the exercise of any other remedy.
Section 13.4 Right of Board of Education. The Bank acknowledges that the Board of
Education has the right (but no obligation) to pay any amounts due hereunder on behalf of the
County or to perform any other covenants of the County hereunder relating to the School Project,
provided that any such right or the exercise thereof on the part of the Board of Education will not
extend the time for payment or other performance set forth herein.
ARTICLE XIV
ASSIGNMENT
Section 14.1 Assignment by the County. Except as provided in the Deed of Trust, the
County will not sell, assign, lease, sublease, pledge or otherwise encumber or suffer a lien or
encumbrance on or against any interest in this Contract or the Mortgaged Property (except for
the Permitted Encumbrances) without the prior written consent of the Bank.
Section 14.2 Assignment by the Bank. The Bank may, at any time and from time to
time, assign to any bank, insurance company or similar financial institution or to any other entity
or any trust created to hold a pool of obligations approved by the Local Government
Commission of North Carolina all or any part of its interest in the Mortgaged Property or this
Contract, including, without limitation, the Bank’s rights to receive the Installment Payments and
any Additional Payments due and to become due hereunder. Reassignment by any assignee may
also only be to a bank, insurance company or similar financial institution or to any other entity or
any trust created to hold a pool of obligations approved by the Local Government Commission
of North Carolina. The County agrees that this Contract may become part of a pool of
obligations at the Bank’s or its assignee’s option. The Bank or its assignees may assign or
reassign either the entire pool or any partial interest herein. Notwithstanding the foregoing, no
assignment or reassignment of the Bank’s interest in the Mortgaged Property or this Contract
shall be effective unless and until the County shall receive a duplicate original counterpart of the
document by which such assignment or reassignment is made disclosing the name and address of
each assignee. The County covenants and agrees with the Bank and each subsequent assignee of
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the Bank to maintain for the full term of this Contract a written record of each such assignment
or reassignment. The County hereby appoints the Bank as its agent for the purpose of
maintaining any written record in connection with an assignment under this Section, and the
Bank hereby accepts such appointment. The County agrees to execute any document reasonably
required by the Bank in connection with any assignment. Notwithstanding any assignment by
the Bank of its interest in this Contract, the County shall not be obligated to provide any financial
or other information to any assignee of the Bank except as set forth in Section 6.10.
After the giving of notice described above to the County, the County shall thereafter
make all payments in accordance with the notice to the assignee named therein and shall, if so
requested, acknowledge such assignment in writing, but such acknowledgement shall in no way
be deemed to make the assignment effective.
The Bank covenants that any disclosure document circulated by it or an assignee in
connection with the sale of the Bank’s rights in this Contract will contain a statement to the
effect that the County has not reviewed and is not responsible for the disclosure document. The
Bank covenants to defend, indemnify and hold harmless the County and its officers, employees
and agents against any and all losses, claims, damages or liabilities, joint or several, including
fees and expenses incurred in connection therewith, to which such indemnified party may
become subject on account of any statement included in a disclosure document, or failure to
include a statement in a disclosure document, unless the County shall have expressly approved
the use of such disclosure document.
ARTICLE XV
LIMITED OBLIGATION OF THE COUNTY
Section 15.1 Limited Obligation of the County. NO PROVISION OF THIS
CONTRACT SHALL BE CONSTRUED OR INTERPRETED AS CREATING A PLEDGE OF
THE FAITH AND CREDIT OF THE COUNTY WITHIN THE MEANING OF ANY
CONSTITUTIONAL DEBT LIMITATION. NO PROVISION OF THIS CONTRACT SHALL
BE CONSTRUED OR INTERPRETED AS CREATING A DELEGATION OF
GOVERNMENTAL POWERS NOR AS A DONATION BY OR A LENDING OF THE
CREDIT OF THE COUNTY WITHIN THE MEANING OF THE CONSTITUTION OF THE
STATE. THIS CONTRACT SHALL NOT DIRECTLY OR INDIRECTLY OR
CONTINGENTLY OBLIGATE THE COUNTY TO MAKE ANY PAYMENTS BEYOND
THOSE APPROPRIATED IN THE SOLE DISCRETION OF THE COUNTY FOR ANY
FISCAL YEAR IN WHICH THIS CONTRACT IS IN EFFECT; PROVIDED, HOWEVER,
THAT ANY FAILURE OR REFUSAL BY THE COUNTY TO APPROPRIATE FUNDS
WHICH RESULTS IN THE FAILURE BY THE COUNTY TO MAKE ANY PAYMENT
COMING DUE UNDER THIS CONTRACT WILL IN NO WAY OBVIATE THE
OCCURRENCE OF THE EVENT OF DEFAULT RESULTING FROM SUCH
NONPAYMENT. NO DEFICIENCY JUDGMENT MAY BE RENDERED AGAINST THE
COUNTY IN ANY ACTION FOR BREACH OF A CONTRACTUAL OBLIGATION UNDER
THIS CONTRACT, AND THE TAXING POWER OF THE COUNTY IS NOT AND MAY
NOT BE PLEDGED DIRECTLY OR INDIRECTLY OR CONTINGENTLY TO SECURE
ANY MONEYS DUE UNDER THIS CONTRACT. NO PROVISION OF THIS CONTRACT
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SHALL BE CONSTRUED TO PLEDGE OR TO CREATE A LIEN ON ANY CLASS OR
SOURCE OF THE COUNTY’S MONEYS, NOR SHALL ANY PROVISION OF THIS
CONTRACT RESTRICT THE FUTURE ISSUANCE OF ANY OF THE COUNTY’S BONDS
OR OBLIGATIONS PAYABLE FROM ANY CLASS OR SOURCE OF THE COUNTY’S
MONEYS. TO THE EXTENT OF ANY CONFLICT BETWEEN THIS ARTICLE AND ANY
OTHER PROVISION OF THIS CONTRACT, THIS ARTICLE SHALL TAKE PRIORITY.
ARTICLE XVI
MISCELLANEOUS
Section 16.1 Waiver. No covenant or condition of this Contract can be waived except
by the written consent of the Bank. Any failure of the Bank to require strict performance by the
County or any waiver by the Bank of any terms, covenants or contracts in this Contract shall not
be construed as a waiver of any other breach of the same or any other term, covenant or contract
in this Contract.
Section 16.2 Severability. If any portion of this Contract is determined to be invalid
under any applicable law, such provision shall be deemed void and the remainder of this
Contract shall continue in full force and effect.
Section 16.3 Governing Law. This Contract shall be construed and governed in
accordance with the laws of the State.
Section 16.4 Notices. Except as provided otherwise in this Contract, any and all
notices, requests, demands and other communications given under or in connection with this
Contract are effective only if in writing and either personally delivered or mailed by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
If to the County:
County of Person, North Carolina
304 South Morgan Street, Room 219
Roxboro, North Carolina 27573-5245
Attention: Finance Director
with a copy to:
County of Person, North Carolina
304 South Morgan Street, Room 212
Roxboro, North Carolina 27573-5245
Attention: County Manager
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28
If to the Bank:
Branch Banking and Trust Company
BB&T Governmental Finance
Attention: Account Administration/Municipal
Re: Person County Agreement Notice
5130 Parkway Plaza Boulevard
Building 9
Charlotte, North Carolina 28217
The County and the Bank may, by written notice to the other, designate any further or
different addresses to which subsequent notices, requests, demands and other communications
shall be sent.
Section 16.5 Section Headings. All section headings contained in this Contract are for
convenience of reference only and are not intended to define or limit the scope of any provision
of this Contract.
Section 16.6 Entire Contract. This Contract, together with the schedules and exhibits
hereto, constitutes the entire agreement between the parties and this Contract shall not be
modified, amended, altered or changed except as the County and the Bank may subsequently
agree in writing.
Section 16.7 Binding Effect. Subject to the specific provisions of this Contract, this
Contract is binding on and inures to the benefit of the parties and their respective successors and
assigns (including expressly any successor of the Bank).
Section 16.8 Time. Time is of the essence of this Contract and each and all of its
provisions.
Section 16.9 If Payment or Performance Date Not a Business Day. If the date for
making payment, or the last date for performance of any act or the exercising of any right, as
provided in this Contract, is not a Business Day, such payment may be made or act performed or
right exercised on the next succeeding Business Day, with the same force and effect as if done on
the nominal date provided in this Contract, and no interest shall accrue for the period after such
nominal date.
Section 16.10 Covenants of County not Covenants of Officials Individually. No
covenant, stipulation, obligation or agreement contained in this Contract shall be deemed to be a
covenant, stipulation, obligation or agreement of any present or future member, agent or
employee of the Board of Commissioners or the County in his individual capacity, and neither
the members of the Board of Commissioners nor any other officer of the Board of
Commissioners or the County shall be subject to any personal liability or accountability by
reason of the execution and delivery of this Contract. No member of the Board of
Commissioners or any agent or employee of the County shall incur any personal liability in
acting or proceeding or in not acting or not proceeding, in good faith, reasonably and in
accordance with the terms of this Contract.
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Section 16.11 Execution in Counterparts. This Contract may be executed in any number
of counterparts, each of which shall be an original and all of which shall constitute but one and
the same instrument.
Section 16.12 Proposal Letter. The terms of this Contract shall supersede the terms of
the proposal letter from the Bank to the County dated August 29, 2014 and any amendments
thereof or supplements thereto, as accepted by the County on September 22, 2014. To the extent
of any conflict between this Contract and such proposal letter, this Contract will take priority.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed by
their duly authorized officers as of the day and year first above written.
COUNTY OF PERSON, NORTH CAROLINA
[SEAL] By: ____________________________________
Jimmy B. Clayton
Chairman of the Board of Commissioners
for the County
ATTEST:
_____________________________
Brenda B. Reaves
Clerk to the Board of Commissioners
for the County
[Signatures Continued on the Following Page]
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30
[Counterpart Signature Page to the Installment Financing Contract,
dated October 16, 2014, between Branch Banking and Trust Company
and the County of Person, North Carolina]
BRANCH BANKING AND TRUST COMPANY
By: ____________________________________
Alison W. Peeler
Senior Vice President
[Signatures Continued on the Following Page]
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31
[Counterpart Signature Page to the Installment Financing Contract,
dated October 16, 2014, between Branch Banking and Trust Company
and the County of Person, North Carolina]
THIS CONTRACT HAS BEEN APPROVED UNDER
THE PROVISIONS OF SECTION 159-152 OF THE
GENERAL STATUTES OF NORTH CAROLINA, AS AMENDED
By: ___________________________________
T. Vance Holloman
Secretary of the Local Government
Commission of North Carolina
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32
PAYMENT SCHEDULE
Installment
Payment Date
Total
Installment
Payment
Interest
Component
Principal
Component
6/1/2015 $ 141,484.48 $ 41,484.48 $ 100,000.00
12/1/2015 231,640.00 31,640.00 200,000.00
6/1/2016 228,840.00 28,840.00 200,000.00
12/1/2016 106,040.00 26,040.00 80,000.00
6/1/2017 104,920.00 24,920.00 80,000.00
12/1/2017 123,800.00 23,800.00 100,000.00
6/1/2018 122,400.00 22,400.00 100,000.00
12/1/2018 71,000.00 21,000.00 50,000.00
6/1/2019 70,300.00 20,300.00 50,000.00
12/1/2019 69,600.00 19,600.00 50,000.00
6/1/2020 68,900.00 18,900.00 50,000.00
12/1/2020 68,200.00 18,200.00 50,000.00
6/1/2021 67,500.00 17,500.00 50,000.00
12/1/2021 216,800.00 16,800.00 200,000.00
6/1/2022 214,000.00 14,000.00 200,000.00
12/1/2022 111,200.00 11,200.00 100,000.00
6/1/2023 109,800.00 9,800.00 100,000.00
12/1/2023 58,400.00 8,400.00 50,000.00
6/1/2024 57,700.00 7,700.00 50,000.00
12/1/2024 57,000.00 7,000.00 50,000.00
6/1/2025 56,300.00 6,300.00 50,000.00
12/1/2025 55,600.00 5,600.00 50,000.00
6/1/2026 54,900.00 4,900.00 50,000.00
12/1/2026 54,200.00 4,200.00 50,000.00
6/1/2027 53,500.00 3,500.00 50,000.00
12/1/2027 52,800.00 2,800.00 50,000.00
6/1/2028 52,100.00 2,100.00 50,000.00
12/1/2028 51,400.00 1,400.00 50,000.00
6/1/2029 50,700.00 700.00 50,000.00
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33
Unless otherwise instructed by the Bank, the County shall wire funds in amounts equal to
the Installment Payments to:
Branch Banking and Trust Company
BB&T Governmental Finance
223 West Nash Street
Wilson, NC 27893-3801
ABA # 053101121
Account # ______________
Each wire ticket is to include:
Customer Name: County of Person, North Carolina
Customer Contract Number: _______________
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A-1
EXHIBIT A
DESCRIPTION OF THE PROJECT
The Project consists of the County Project and the School Project.
The County Project consists of the repair or replacement of the roof on the Kirby Civic
Center, located at ________________________________________, and the acquisition and
improvement of a building and related property to house the Person County Recycling Center,
located at ___________________________.
The School Project consists of the repair or replacement of the roof on Earl Bradsher
Preschool, located at _____________________________.
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B-1
EXHIBIT B
DESCRIPTION OF THE REAL PROPERTY
The Real Property consists of a tract or parcel of land described as follows:
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C-1
EXHIBIT C
PROJECT FUND REQUISITION
[To be Prepared on County’s Letterhead for Submission]
[Date] _________________
Ms. Trina Britt
Project Specialist
BB&T Government Finance
tmbritt@bbandt.com
direct dial: 704-954-1873
fax: 704-954-1799
E-mail requisitions to: GFProjectfunds@bbandt.com
RE: Request for disbursement of funds from the Project Fund related to an Installation
Financing Contract (BB&T Contract No. _______________) with Person County,
North Carolina, dated October 16, 2014
Dear Ms. Britt:
Pursuant to the terms and conditions of the Installment Financing Contract, dated
September 20, 2012, between the County of Person, North Carolina (the “County”) and Branch
Banking and Trust Company (the “Contract”), the County hereby requests the disbursement of
funds to the County from the Project Fund established under the Contract for the costs described
below, each of which is a Cost of the Project. Terms used herein but not defined herein shall
have the meanings given to such terms in the Contract.
This is requisition number _____ for funds from the Project Fund.
Amount:
Vendor:
Vendor Address:
Vendor Federal Tax Number:
Applicable Vendor Invoices:
Project Description: Repair or replacement of roofs at the Kirby Civic Center and Earl
Bradsher Preschool and acquisition and improvement of a building and related property to house
the Person County Recycling Center, as more particularly described in Exhibit A to the Contract.
Location of Facilities: The Project is located on three sites as described in Exhibit A to
the Contract.
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C-2
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
Installment Payments and estimated Additional Payments due in the current fiscal year.
2. The purpose of this request for disbursement is for partial payment of the costs of
the Project provided for under the Contract.
3. The requested disbursement has not been subject to any previous requisition.
4. No notice of any lien, right to lien or attachment upon, or claim affecting the right
to receive payment of, any of the moneys payable herein to any of the persons, firms or
corporations named herein has been received or, if any notice of any such lien, attachment or
claim has been received, such lien, attachment or claim has been released or discharged or will
be released or discharged upon payment of this requisition.
5. To the best of my knowledge, no Event of Default is continuing under the
Contract, and no event or condition is existing which, with notice or lapse of time or both, would
become an Event of Default.
6. The County has in place insurance on the Project that complies with the insurance
provisions of the Contract.
7. Each amount requested for payment in this requisition either (a) represents
reimbursement to the County for a Cost of the Project previously paid, or (b) will be used by the
County within three Business Days of the receipt of funds from the Bank to make the payments
to the third parties described in this requisition.
Attached is evidence that the amounts shown in this requisition are properly payable at
this time, such as bills, receipts, invoices, architects’ payment certifications or other appropriate
documents.
COUNTY OF PERSON, NORTH CAROLINA
By:
Printed name:
Title:
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DEED OF TRUST AND SECURITY AGREEMENT
Prepared by: Return to:
Gundars Aperans, Esq. F. Louis Loyd, III
Robinson, Bradshaw & Hinson, P.A. Senior Vice President
101 North Tryon Street, Suite 1900 Branch Banking and Trust Company
Charlotte, North Carolina 28246 5130 Parkway Plaza Boulevard
Building 9
Charlotte, North Carolina 28217
STATE OF NORTH CAROLINA
COUNTY OF PERSON
(COLLATERAL IS OR INCLUDES FIXTURES)
This DEED OF TRUST AND SECURITY AGREEMENT, made and entered into this
16th day of October 2014 (this “Deed of Trust”), from the COUNTY OF PERSON, NORTH
CAROLINA, a body corporate and politic and a political subdivision of the State of North
Carolina, whose address is 304 South Morgan Street, Room 219, Roxboro, North Carolina
27573-5245, Attention: Finance Director and whose organization number is 56 - 6000321, as
grantor (the “Grantor”), to F. Louis Loyd, III, whose address is 5130 Parkway Plaza Boulevard,
Building 9, Charlotte, North Carolina 28217, as trustee (the “Trustee”), for the benefit of
BRANCH BANKING AND TRUST COMPANY, a North Carolina state-chartered bank, duly
organized and existing under the laws of the State of North Carolina, whose address is BB&T
Governmental Finance, Attention: Account Administration/Municipal, Re: Person County
Agreement Notice, 5130 Parkway Plaza Boulevard, Building 9, Charlotte, North Carolina 28217
(the “Bank” and, together with its successors and assigns, the “Beneficiary”);
W I T N E S S E T H:
WHEREAS, the Grantor and the Bank have entered into an Installment Financing
Contract dated as of even date herewith (the “Installment Financing Contract”), pursuant to
which (i) the Bank has agreed to advance certain moneys to enable the Grantor to finance a
portion of the cost of the Project (as defined in the Installment Financing Contract) and (ii) the
Grantor has agreed to make the Installment Payments and Additional Payments (as each such
term is defined in the Installment Financing Contract) to the Bank;
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2
WHEREAS, this Deed of Trust has been executed and delivered to secure (i) the
obligations of the Grantor to make the Installment Payments and Additional Payments and
(ii) the performance of all of the other liabilities and obligations, whether now existing or
hereafter arising, of the Grantor to the Bank under the Installment Financing Contract (all such
obligations and liabilities described in (i) or (ii) above being hereinafter collectively called the
“Indebtedness”); and
WHEREAS, the Grantor desires to secure (i) the payment of the Indebtedness and any
renewals, modifications or extensions thereof, in whole or in part, and (ii) the additional
payments hereinafter agreed to be made by or on behalf of the Grantor, by a conveyance of the
lands and security interests hereinafter described;
NOW, THEREFORE, in consideration of the above preambles and for the purposes
aforesaid, and in further consideration of the sum of Ten Dollars ($10.00) paid to the Grantor by
the Trustee and other valuable consideration, receipt of which is hereby acknowledged, the
Grantor has given, granted, bargained, sold and conveyed, and by these presents does give, grant,
bargain, sell and convey, unto the Trustee, its heirs, successors and assigns, the following
property (collectively the “Premises”):
(a) The real property lying and being in the County of Person, North Carolina
and described below in the legal description attached as Exhibit A hereto (collectively the
“Real Property”):
SEE EXHIBIT A ATTACHED HERETO FOR THE REAL
PROPERTY DESCRIPTION, WHICH EXHIBIT A IS
SPECIFICALLY INCORPORATED HEREIN BY REFERENCE.
(b) All buildings, structures, additions and other improvements of every
nature whatsoever now or hereafter situated on or about the Real Property (collectively
the “Improvements”).
(c) All gas and electric fixtures, radiators, heaters, engines and machinery,
boilers, ranges, elevators and motors, plumbing and heating fixtures, carpeting and other
floor coverings, fire extinguishers and any other safety equipment required by
governmental regulation or law, washers, dryers, water heaters, mirrors, mantels, air
conditioning apparatus, refrigerating plants, refrigerators, cooking apparatus and
appurtenances, window screens, awnings and storm sashes and other machinery,
equipment or other tangible personal property, which are or shall be so attached to the
Improvements, including all extensions, additions, improvements, betterments, renewals,
replacements and substitutions, or proceeds from a permitted sale of any of the foregoing,
as to be deemed to be fixtures under North Carolina law (collectively the “Fixtures”) and
accessions to the Real Property and a part of the Premises as between the parties hereto
and all persons claiming by, through or under them, and which shall be deemed to be a
portion of the security for the Indebtedness. The location of the collateral described in
this paragraph is also the location of the Real Property, and the record owner of the Real
Property is the Grantor.
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3
(d) All easements, rights-of-way, strips and gores of land, vaults, streets,
ways, alleys, passages, sewer rights, waters, water courses, water rights and powers,
minerals, flowers, shrubs, crops, trees, timber and other emblements now or hereafter
located on the Real Property or under or above the same or any part or parcel thereof, and
all estates, rights, titles, interests, privileges, liberties, tenements, hereditaments and
appurtenances, reversion and reversions, remainder and remainders, whatsoever, in any
way belonging, relating or appertaining to the Premises or any part thereof, or which
hereafter shall in any way belong, relate or be appurtenant thereto, whether now owned or
hereafter acquired by the Grantor.
(e) All leases affecting the Premises or any part thereof and all income, rents
and issues of the Premises and the Improvements now or hereafter located thereon from
time to time accruing (including without limitation all payments under leases or
tenancies, proceeds of insurance, condemnation payments, tenant security deposits
whether held by the Grantor or in a trust account, and escrow funds), and all the estate,
right, title, interest, property, possession, claim and demand whatsoever at law, as well as
in equity, of the Grantor of, in and to the same; reserving only the right to the Grantor to
collect and apply the same so long as the Grantor is not in Default hereunder.
SUBJECT, HOWEVER, to such of the Permitted Encumbrances (as defined in
Exhibit B hereto and specifically incorporated herein by reference) as are superior to the security
created by this Deed of Trust and excluding all data processing or telecommunications
equipment, all mobile or modular classrooms, all other property excluded from the lien or
security interest of the Bank under the Installment Financing Contract and all property released
pursuant to the provisions of the Installment Financing Contract or this Deed of Trust.
TO HAVE AND TO HOLD, the Premises unto the Trustee, its heirs, successors and
assigns, in fee simple forever, upon the trusts, terms and conditions and for the uses and purposes
hereinafter set out;
And the Grantor covenants with the Trustee that the Grantor is lawfully seized of the
Premises in fee simple and has the right to convey the same in fee simple; that, except for
Permitted Encumbrances, the same are free and clear of all encumbrances, and that the Grantor
will warrant and defend the title to the same against the claims of all persons whomsoever arising
by, under or through the Grantor.
THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST that, if the Grantor
shall pay the Indebtedness in accordance with the terms of the Installment Financing Contract,
together with interest thereon, and any renewals or extensions thereof in whole or in part, and
shall comply with all the covenants, terms and conditions of this Deed of Trust, then this
conveyance shall be null and void and may be cancelled of record at the request of the Grantor.
THIS DEED OF TRUST secures an obligation incurred for the construction of an
improvement on the real property covered hereby and as such constitutes a “construction
mortgage” under Section 25-9-334 of the General Statutes of North Carolina.
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4
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, the Grantor hereby
further covenants and agrees as follows:
ARTICLE I
Section 1.1 Payment of Indebtedness. The Grantor will pay the Indebtedness and all
other sums now or hereafter secured hereby promptly as the same shall become due as provided
in the Installment Financing Contract and as permitted by law.
Section 1.2 Taxes, Liens and Other Charges.
(a) The Grantor will pay, or cause to be paid, before the same become delinquent, all
taxes, liens, assessments and charges of every character including all utility charges, whether
public or private, already levied or assessed or that may hereafter be levied or assessed upon or
against the Premises; and will furnish the Beneficiary, on or before the final date whereon the
same can be paid without penalty, evidence of the due and punctual payment of all such taxes,
liens, assessments and charges. Nothing contained herein shall require the payment or discharge
of any such tax, lien, assessment or charge by the Grantor for so long as the Grantor shall in
good faith and at its own expense contest the same or the validity thereof by appropriate legal
proceedings provided that such proceedings shall prevent (i) the collection thereof or other
realization thereof and the sale or forfeiture of the Premises or any part thereof to satisfy the
same or (ii) the enforcement thereof, against the Grantor, the Trustee, the Beneficiary and the
Premises and so long as the Grantor first deposits with the Beneficiary in escrow such sums or
other security as the Beneficiary may reasonably require to assure Beneficiary of the availability
of sufficient monies to pay such tax, lien, assessment or charge if and when the same is finally
determined to be due.
(b) The Grantor will not suffer any mechanic’s, materialman’s, laborer’s, statutory or
other lien to be created and to remain outstanding upon all or any part of the Premises. The
Grantor shall be entitled to discharge such liens by bonds or to contest any such liens pursuant to
the same procedure as the Grantor is entitled to contest taxes in the preceding subsection 1.2(a).
Section 1.3 Insurance. The Grantor shall obtain and maintain, or cause to be obtained
and maintained, during the term of this Deed of Trust the insurance coverage specified in the
Installment Financing Contract.
The net proceeds from any related insurance policy or policies shall be applied as
provided in the Installment Financing Contract. The Beneficiary shall not be held responsible
for any failure to collect any insurance proceeds due under the terms of any policy regardless of
the cause of such failure if it has complied with Section 8.3 of the Installment Financing
Contract.
In the event of the foreclosure of this Deed of Trust or any other transfer of title to the
Premises in extinguishment of the Indebtedness secured hereby, all right, title and interest of the
Grantor or the Board of Education (as defined in the Installment Financing Contract) in and to all
insurance policies then in force shall pass to the purchaser or Beneficiary, as appropriate.
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5
Section 1.4 Condemnation. Any award for the taking of, or damage to, all or any
part of the Premises or any interest therein upon the lawful exercise of the power of eminent
domain shall be payable and applied as provided in the Installment Financing Contract. The
Grantor shall give immediate notice to the Bank of the institution of any action or proceeding to
condemn any part of the Premises or any interest therein of which the Grantor receives notice.
Section 1.5 Care of Premises.
(a) The Grantor will keep or cause the Board of Education to keep the buildings,
parking areas, roads and walkways, recreational facilities, landscaping and all other
Improvements of any kind now or hereafter erected on the Real Property or any part thereof in
good condition and repair (ordinary wear and tear excepted), will not commit or suffer any
waste, and will not do or suffer to be done anything which will increase the risk of fire or other
hazard to the Premises or any part thereof.
(b) Except in the ordinary course of its business or as provided in Section 6.1 of the
Installment Financing Contract, the Grantor will not remove, demolish or alter or permit to be
removed, demolished or altered the structural character of any Improvement located on the Real
Property or any Fixture without the prior written consent of the Beneficiary.
(c) If the Premises or any part thereof is damaged by fire or any other cause, the
Grantor will give immediate notice thereof to the Beneficiary and the Trustee.
(d) Upon reasonable prior notice to the Grantor or the Board of Education, as may be
applicable, the Beneficiary or its representative is hereby authorized to enter upon and inspect
the Premises at any time during normal business hours. The Beneficiary agrees that any
confidential information about the Grantor or the Board of Education obtained in the exercise of
its rights under this subsection shall, except as otherwise required by law or regulation applicable
to the Beneficiary, be maintained in a confidential manner and shall be used by the Beneficiary
only for the protection of its rights and interests hereunder.
(e) The Grantor will comply promptly or cause the Board of Education to comply
promptly with all present and future laws, ordinances, rules and regulations of any governmental
authority (including, but not limited to, all environmental and ecological laws and regulations)
affecting the Premises or any part thereof.
Section 1.6 Leases Affecting Premises. The Beneficiary hereby approves the Lease
(as defined in the Installment Financing Contract), and the Board of Education may sublease any
portion of the Premises as provided in the Installment Financing Contract.
Section 1.7 Security Agreement and Financing Statement. With respect to the
Fixtures, this Deed of Trust is hereby made and declared to be a security agreement in favor of
the Beneficiary encumbering each and every item of such property included herein as a part of
the Premises, and the Grantor hereby grants a security interest to the Beneficiary in and to all of
such Fixtures. Upon request by the Beneficiary, at any time and from time to time, a financing
statement or statements reciting this Deed of Trust to be a security agreement affecting all of
such property shall be executed by the Grantor and the Beneficiary and filed in accordance with
the provisions of the Uniform Commercial Code as enacted in the State of North Carolina
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6
applicable to the perfection of security interests by filing financing statements thereunder. The
remedies for any violation of the covenants, terms and conditions of the security agreement
contained in this Deed of Trust shall be (i) as prescribed herein or (ii) as prescribed by general
law, at the Beneficiary’s sole election.
This Deed of Trust shall constitute a financing statement filed as a fixture filing in
accordance with Section 25-0-502 of the North Carolina General Statutes (or any amendment
thereto). For these purposes, the Grantor is the “debtor,” the Beneficiary is the “secured party”
and the Fixtures are the “collateral.”
Section 1.8 Further Assurances. At any time, and from time to time, upon request
by the Beneficiary, the Grantor will make, execute and deliver or cause to be made, executed and
delivered, to the Beneficiary and/or the Trustee and, where appropriate, cause to be recorded
and/or filed and from time to time thereafter to be re-recorded and/or refiled at such time and in
such offices and places as shall be deemed desirable by the Beneficiary, any and all such other
and further deeds of trust, security agreements, financing statements, continuation statements,
instruments of further assurance, certificates and other documents as may, in the opinion of the
Beneficiary, be necessary or desirable in order to effectuate, complete, or perfect, to continue and
preserve or to give notice of (a) the obligations of the Grantor under the Installment Financing
Contract or this Deed of Trust and (b) the lien of this Deed of Trust as a first and prior lien,
subject to Permitted Encumbrances, upon and security title in and to all of the Premises, whether
now owned or hereafter acquired by the Grantor. Upon any failure by the Grantor so to do, the
Beneficiary may make, execute, record, file, re-record and/or refile any and all such deeds of
trust, security agreements, financing statements, continuation statements, instruments,
certificates, and documents for and in the name of the Grantor and the Grantor hereby
irrevocably appoints the Beneficiary as its agent and attorney-in-fact to do so.
Section 1.9 Expenses. The Grantor will pay or reimburse the Beneficiary and the
Trustee, upon demand therefor, for all reasonable attorneys’ fees, costs and expenses actually
incurred by the Beneficiary and the Trustee in any suit, action, legal proceeding or dispute of any
kind in which the Beneficiary and/or the Trustee is made a party or appears as party plaintiff or
defendant, affecting the Indebtedness secured hereby, this Deed of Trust or the interest created
herein, or the Premises, including, but not limited to, the exercise of the power of sale contained
in this Deed of Trust, any condemnation action involving the Premises or any action to protect
the security hereof, but excepting therefrom any negligence or willful misconduct by the
Beneficiary or any breach of this Deed of Trust by the Beneficiary; and all such amounts paid by
the Beneficiary shall be added to the Indebtedness.
Section 1.10 Estoppel Affidavits. The Grantor upon ten (10) days’ prior written
notice, shall furnish the Beneficiary a written statement, duly acknowledged, setting forth the
unpaid principal of, and interest on, the Indebtedness and whether or not any offsets or defenses
exist against the payment of such principal and interest.
Section 1.11 Subrogation. The Beneficiary shall be subrogated to the claims and liens
of all parties whose claims or liens are discharged or paid with the proceeds of the Indebtedness.
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Section 1.12 Books, Records, Accounts and Annual Reports. The Grantor will keep
and maintain or will cause to be kept and maintained proper and accurate books, records and
accounts relating to the Premises. The Beneficiary shall have the right from time to time at all
times during normal business hours to examine such books, records and accounts at the office of
the Grantor or such other person or entity maintaining such books, records and accounts and to
make copies or extracts thereof as the Beneficiary shall desire.
Section 1.13 Limit of Validity. If from any circumstances whatsoever fulfillment of
any obligation pursuant to any provision of this Deed of Trust or the Installment Financing
Contract, at the time performance of such obligation shall be due, shall involve transcending the
limit of validity presently prescribed by any applicable usury statute or any other applicable law,
with regard to obligations of like character and amount, then ipso facto the obligation to be
fulfilled shall be reduced to the limit of such validity, so that in no event shall any exaction be
possible under this Deed of Trust or the Installment Financing Contract that is in excess of the
current limit of such validity, but such obligation shall be fulfilled to the limit of such validity.
Section 1.14 Changes in Ownership. The Grantor hereby acknowledges to the
Beneficiary that (a) the identity and expertise of the Grantor were and continue to be material
circumstances upon which the Beneficiary has relied in connection with, and which constitute
valuable consideration to the Beneficiary for, the extending to the Grantor of the Indebtedness
and (b) any change in such identity or expertise could materially impair or jeopardize the
security for the payment of the Indebtedness granted to the Beneficiary by this Deed of Trust.
The Grantor therefore covenants and agrees with the Beneficiary, as part of the consideration for
the extending to the Grantor of the Indebtedness, that the entire Indebtedness shall, at the option
of the Beneficiary, become immediately due and payable, should the Grantor further encumber,
pledge, convey, transfer or assign any or all of its interest in the Premises or any portion thereof
without the prior written consent of the Beneficiary or except as otherwise permitted herein or in
the Installment Financing Contract.
Section 1.15 Use and Management of the Premises. The Grantor shall not alter or
change the use of the Premises or abandon the Premises without the prior written consent of the
Beneficiary or except as otherwise permitted herein or in the Installment Financing Contract.
Section 1.16 Acquisition of Collateral. The Grantor shall not acquire any portion of
the personal property, if any, covered by this Deed of Trust, subject to any security interest,
conditional sales contract, title retention arrangement or other charge or lien taking precedence
over the security title and lien of this Deed of Trust without the prior written consent of the
Beneficiary.
Section 1.17 Hazardous Material.
(a) The Grantor represents, warrants and agrees that, except as previously disclosed
to the Bank in writing: (i) the Grantor has not used or installed any Hazardous Material (as
hereinafter defined) in violation of applicable Environmental Laws (as hereinafter defined) on,
from or in the Premises and, to the best of the Grantor’s actual knowledge, no other person has
used or installed any Hazardous Material on, from or in the Premises; (ii) to the best of the
Grantor’s actual knowledge, no other person has violated any applicable Environmental Laws
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relating to or affecting the Premises; (iii) to the best of the Grantor’s actual knowledge, the
Premises are presently in compliance with all applicable Environmental Laws, and there are no
facts or circumstances presently existing upon or under the Premises, or relating to the Premises,
which may violate any applicable Environmental Laws, and there is not now pending or
threatened any action, suit, investigation or proceeding against the Grantor or the Premises (or
against any other party relating to the Premises) seeking to enforce any right or remedy against
the Grantor or the Premises under any of the Environmental Laws; (iv) the Premises shall be kept
free of Hazardous Materials to the extent required by applicable Environmental Laws, and shall
not be used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer,
produce, or process Hazardous Materials, except as a necessary incident to the normal operation
and maintenance of the Premises by the Board of Education as public school facilities and in
connection with acquisition, construction and installation of the Project (as defined in the
Installment Financing Contract) and any additional Improvements on the Real Property; (v) the
Grantor shall not cause or permit the installation of Hazardous Materials in, on, over or under the
Premises or a Release (as hereinafter defined) of Hazardous Materials unto or from the Premises
or suffer the presence of Hazardous Materials in, on, over or under the Premises in violation of
applicable Environmental Laws; (vi) the Grantor shall comply or cause the Board of Education
to comply with Environmental Laws applicable to the Premises, all at no cost or expense to the
Beneficiary or the Trustee; (vii) the Grantor or the Board of Education has obtained and the
Grantor will at all times continue to obtain and/or maintain or cause the Board of Education to
continue to obtain and/or maintain all licenses, permits and/or other governmental or regulatory
actions necessary for the Premises to comply with applicable Environmental Laws (the
“Permits”) and the Grantor will be and at all times remain or cause the Board of Education to be
and at all times remain in full compliance with the terms and provisions of the Permits; (viii) to
the best of the Grantor’s actual knowledge, there has been no Release of any Hazardous
Materials on or from the Premises in violation of applicable Environmental Laws, whether or not
such Release emanated from the Premises or any contiguous real estate, which has not been
abated and any resulting violation of applicable Environmental Laws abated; (ix) the Grantor
shall immediately give or cause the Board of Education to give the Beneficiary oral and written
notice in the event that the Grantor receives any notice from any governmental agency, entity, or
any other party with regard to Hazardous Materials on, from or affecting the Premises and the
Grantor shall conduct and complete or cause the Board of Education to conduct and complete all
investigations, studies, sampling, and testing, and all remedial, removal, and other actions
necessary to clean up and remove all Hazardous Materials on, from or affecting the Premises in
accordance with all applicable Environmental Laws.
(b) To the extent permitted by law and subject to the provisions of Section 160A-20
of the General Statutes of North Carolina, as amended (“G.S. § 160A-20”), the Grantor hereby
agrees to indemnify the Beneficiary and the Trustee and hold the Beneficiary and the Trustee
harmless from and against any and all liens, demands, defenses, suits, proceedings,
disbursements, liabilities, losses, litigation, damages, judgments, obligations, penalties, injuries,
costs, expenses (including, without limitation, reasonable attorneys’ and experts’ fees) and
claims of any and every kind whatsoever paid, incurred, suffered by, or asserted against the
Beneficiary, the Trustee and/or the Premises for, with respect to, or as a direct or indirect result
of: (i) the presence of Hazardous Materials in, on or under the Premises, or the escape, seepage,
leakage, spillage, discharge, emission or Release on or from the Premises of any Hazardous
Materials regardless of whether or not caused by or within the control of the Grantor; (ii) the
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violation of any Environmental Laws applicable to the Premises or the Grantor, whether or not
caused by or within the control of the Grantor; (iii) the failure by the Grantor to comply fully
with the terms and provisions of this Section; (iv) the violation of any of the Environmental
Laws in connection with any other property owned by the Grantor, which violation gives or may
give rise to any rights whatsoever in any party with respect to the Premises by virtue of any of
the Environmental Laws, whether or not such violation is caused by or within the control of the
Grantor; or (v) any warranty or representation made by the Grantor in subsection (a) of this
Section being false or untrue in any material respect.
(c) In the event the Beneficiary has a reasonable basis to suspect that the Grantor has
violated any of the covenants, warranties, or representations contained in this Section, or that the
Premises are not in compliance with the applicable Environmental Laws for any reason, the
Grantor shall take such steps as the Beneficiary reasonably requires by notice to the Grantor in
order to confirm or deny such occurrences, including, without limitation, the preparation of
environmental studies, surveys or reports. In the event that the Grantor fails to take such action,
the Beneficiary may take such action as the Beneficiary reasonably believes necessary to protect
its interest, and the cost and expenses of all such actions taken by the Beneficiary, including,
without limitation, the Beneficiary’s reasonable attorneys’ fees, shall be added to the
Indebtedness.
(d) For purposes of this Deed of Trust: (i) ”Hazardous Material” or “Hazardous
Materials” means and includes, without limitation, (a) solid or hazardous waste, as defined in the
Resource Conservation and Recovery Act of 1980, or in any applicable state or local law or
regulation, (b) hazardous substances, as defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (“CERCLA”), or in any applicable state or local law or
regulation, (c) gasoline, or any other petroleum product or by-product, (d) toxic substances, as
defined in the Toxic Substances Control Act of 1976, or in any applicable state or local law or
regulation or (e) insecticides, fungicides, or rodenticides, as defined in the Federal Insecticide,
Fungicide, and Rodenticide Act of 1975, or in any applicable state or local law or regulation, as
each such Act, statute or regulation may be amended from time to time; (ii) ”Release” shall have
the meaning given such term in the Environmental Laws, including, without limitation, Section
101(22) of CERCLA; and (iii) ”Environmental Law” or “Environmental Laws” shall mean any
“Super Fund” or “Super Lien” law, or any other federal, state or local statute, law, ordinance or
code, regulating, relating to or imposing liability or standards of conduct concerning any
Hazardous Materials as may now or at any time hereafter be legally in effect, including, without
limitation, the following, as same may be amended or replaced from time to time, and all
regulations promulgated and officially adopted thereunder or in connection therewith: the Super
Fund Amendments and Reauthorization Act of 1986 (“SARA”); CERCLA; The Clean Air Act
(“CAA”); the Clean Water Act (“CWA”); The Toxic Substance Control Act (“TSCA”); the Solid
Waste Disposal Act (“SWDA”), as amended by the Resource Conservation and Recovery Act
(“RCRA”); the Hazardous Waste Management System; and the Occupational Safety and Health
Act of 1970 (“OSHA”). The obligations and liabilities of the Grantor under this Section which
arise out of events or actions occurring prior to the satisfaction of this Deed of Trust shall survive
the exercise of the power of sale under or foreclosure of this Deed of Trust, the delivery of a
deed in lieu of foreclosure of this Deed of Trust, the cancellation or release of record of this
Deed of Trust, and/or the payment in full of the Indebtedness.
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(e) The parties expressly agree that an event under the provisions of this Section
which may be deemed to be a default under this Deed of Trust shall not be a default until the
Grantor has received notice of such event. Further, in terms of compliance with future
governmental laws, regulations or rulings applicable to environmental conditions, the Grantor
shall be permitted to afford itself of any defense or other protection against the application or
enforcement of any such law, regulation or ruling.
ARTICLE II
Section 2.1 Events of Default. The terms “Default”, “Event of Default” or “Events of
Default”, wherever used in this Deed of Trust, shall mean any one or more of the following
events:
(a) Failure by the Grantor to pay when due, any Installment Payment as required by
the Installment Financing Contract or by this Deed of Trust.
(b) Failure by the Grantor to duly observe or perform after notice and lapse of any
applicable grace period any other term, covenant, condition or agreement of this Deed of Trust.
(c) Any warranty of the Grantor contained in this Deed of Trust proves to be untrue
or misleading in any material respect.
(d) The occurrence of any “Event of Default” under the Installment Financing
Contract.
Section 2.2 Acceleration upon Default, Additional Remedies. In the event an Event
of Default shall have occurred and is continuing, the Beneficiary may declare all Indebtedness to
be due and payable and the same shall thereupon become due and payable without any
presentment, demand, protest or notice of any kind. Thereafter, the Beneficiary may take any
one or more of the following actions:
(a) Either in person or by agent, with or without bringing any action or proceeding, or
by a receiver appointed by a court as hereinafter provided and without regard to the adequacy of
its security, enter upon and take possession of the Premises, or any part thereof, in its own name
or in the name of the Trustee, and do any acts which it deems necessary or desirable to preserve
the value, marketability or rentability of the Premises, or part thereof or interest therein, increase
the income therefrom or protect the security hereof, and, with or without taking possession of the
Premises, sue for or otherwise collect the rents and issues thereof, including those rents and
issues past due and unpaid, and apply the same, less costs and expenses of operation and
collection including attorney’s fees, upon any Indebtedness, all in such order as the Beneficiary
may determine. The entering upon and taking possession of the Premises, the collection of such
rents and issues and the application thereof as aforesaid, shall not cure or waive any Event of
Default or notice of Event of Default hereunder or invalidate any act done in response to such
Default or pursuant to such notice of Default and notwithstanding the continuance in possession
of the Premises or the collection, receipt and application of rents and issues, the Trustee or the
Beneficiary shall be entitled to exercise every right provided for in any instrument securing or
relating to the Indebtedness or by law upon occurrence of any Event of Default, including the
right to exercise the power of sale.
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(b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a
receiver as hereinafter provided, specially enforce any of the covenants hereof, or cause the
Trustee to foreclose this Deed of Trust by power of sale.
(c) Exercise any or all of the remedies available to a secured party under any
applicable laws.
Notwithstanding any provision to the contrary in this Deed of Trust, no deficiency
judgment may be rendered against the Grantor in any action to collect any of the Indebtedness
secured by this Deed of Trust in violation of G.S. § 160A-20, including, without limitation, any
deficiency judgment for amounts that may be owed under the Installment Financing Contract or
this Deed of Trust when the sale of all or any portion of the Premises is insufficient to produce
enough money to pay in full all remaining Indebtedness under the Installment Financing
Contract or this Deed of Trust, and the taxing power of the Grantor is not and may not be
pledged directly or indirectly or contingently to secure any moneys due or secured under this
Deed of Trust.
Section 2.3 Foreclosure by Power of Sale. Should the Beneficiary elect to foreclose
by exercise of the power of sale herein contained, the Beneficiary shall notify the Trustee and
shall deposit with the Trustee this Deed of Trust and such receipts and evidence of expenditures
made and secured hereby as the Trustee may require.
Upon application of the Beneficiary, it shall be lawful for and the duty of the Trustee, and
the Trustee is hereby authorized and empowered, to expose to sale and to sell the Premises at
public auction for cash, after having first complied with all applicable requirements of laws of
the State of North Carolina with respect to the exercise of powers of sale contained in deeds of
trust, and upon such sale the Trustee shall convey title to the purchaser in fee simple. After
retaining from the proceeds of such sale just compensation for the Trustee’s services and all
expenses incurred by the Trustee, including the Trustee’s commission not exceeding one percent
(1%) of the bid and reasonable attorneys’ fees for legal services actually performed, the Trustee
shall apply the residue of the proceeds first to the payment of all sums expended by the
Beneficiary under the terms of this Deed of Trust; second, to the payment of the Indebtedness
secured hereby; and the balance, if any, shall be paid to the Grantor. The Grantor agrees that in
the event of sale hereunder, the Beneficiary shall have the right to bid thereat. The Trustee may
require the successful bidder at any sale to deposit immediately with the Trustee cash or certified
check in an amount not to exceed twenty-five percent (25%) of the bid, provided notice of such
requirement is contained in the advertisement of the sale. The bid may be rejected if the deposit
is not immediately made and thereupon the next highest bidder may be declared to be the
purchaser. Such deposit shall be refunded in case a resale is had; otherwise, it shall be applied to
the purchase price.
Section 2.4 Performance by the Beneficiary on Defaults by the Grantor. If the
Grantor shall default in the payment, performance or observance of any term, covenant or
condition of this Deed of Trust, the Beneficiary may, at its option, pay, perform or observe the
same, and all payments made or costs or expenses incurred by the Beneficiary in connection
therewith shall be secured hereby and shall be, without demand, immediately repaid by the
Grantor to the Beneficiary with interest thereon at the rate provided in the Installment Financing
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Contract. The Beneficiary shall be the sole judge of the necessity for any such actions and of the
amounts to be paid but no such action shall be taken unreasonably. The Beneficiary is hereby
empowered to enter and to authorize others to enter upon the Premises or any part thereof for the
purpose of performing or observing any such defaulted term, covenant or condition without
thereby becoming liable to the Grantor or any person in possession holding under the Grantor.
Section 2.5 Receiver. If an Event of Default shall have occurred and is continuing
and such Event of Default as to Events of Default occurring under subsections (b), (c) and (d) of
Section 2.1 continues uncured for a period of thirty (30) days or more after notice of such Event
of Default is given by the Beneficiary to the Grantor, the Beneficiary, upon application to a court
of competent jurisdiction, shall be entitled as a matter of strict right without notice and without
regard to the adequacy or value of any security for the Indebtedness secured hereby or the
solvency of any party bound for its payment, to the appointment of a receiver or receivers to take
possession of and to operate the Premises and to collect and apply the rents and issues thereof.
The Grantor hereby irrevocably consents to such appointment, provided the Grantor receives
notice of any application therefor. Any such receiver or receivers shall have all of the rights and
powers permitted under the laws of the State of North Carolina and all the powers and duties of
the Beneficiary in case of entry as provided in subsection (a) of Section 2.2, and shall continue as
such and exercise all such powers until the date of confirmation of sale of the Premises unless
such receivership is sooner terminated. Subject to the provisions of Section 2.2, the Grantor will
pay to the Beneficiary upon demand all reasonable expenses, including receiver’s fees, attorneys’
fees, costs and agent’s compensation, incurred pursuant to the provisions of this Section; and all
such expenses shall be secured by this Deed of Trust.
Section 2.6 Waiver of Appraisement, Valuation, Stay, Extension and Redemption
Laws. The Grantor agrees, to the full extent permitted by law, that in case of a Default
hereunder, neither the Grantor nor anyone claiming through or under it shall or will set up, claim
or seek to take advantage of any appraisement, valuation, stay, extension, homestead, exemption
or redemption laws now or hereafter in force, in order to prevent or hinder the enforcement or
foreclosure of this Deed of Trust, or the absolute sale of the Premises, or the final and absolute
putting into possession thereof, immediately after such sale, of the purchasers thereat, and the
Grantor, for itself and all who may at any time claim through or under it, hereby waives to the
full extent that it may lawfully so do, the benefit of all such laws, and any and all right to have
the assets comprised in the security intended to be created hereby marshalled upon any
foreclosure of the lien hereof.
Section 2.7 Leases. The Beneficiary and the Trustee, or either of them, at their option
and to the extent permitted by law, are authorized to foreclose this Deed of Trust subject to the
rights of any tenants of the Premises, and the failure to make any such tenants parties to any such
foreclosure proceedings and to foreclose their rights will not be, nor be asserted to be by the
Grantor, a defense to any proceedings instituted by the Beneficiary and the Trustee to collect the
sums secured hereby.
Section 2.8 Discontinuance of Proceedings and Restoration of the Parties. In case
the Beneficiary and the Trustee, or either of them, shall have proceeded to enforce any right,
power or remedy under this Deed of Trust by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been
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determined adversely to the Beneficiary and the Trustee, or either of them, then and in every
such case the Grantor and the Beneficiary and the Trustee, and each of them, shall be restored to
their former positions and rights hereunder, and all rights, powers and remedies of the
Beneficiary and the Trustee, and each of them, shall continue as if no such proceeding had been
taken.
Section 2.9 Remedies Not Exclusive. Subject to Article XV of the Installment
Financing Contract and Section 2.2 of this Deed of Trust, the Trustee and the Beneficiary, and
each of them, shall be entitled to enforce payment and performance of any Indebtedness or
obligations secured hereby and to exercise all rights and powers under this Deed of Trust or any
other agreement securing or relating to the Indebtedness secured hereby or any laws now or
hereafter in force, notwithstanding some of the Indebtedness and obligations secured hereby may
now or hereafter be otherwise secured, whether by mortgage, deed of trust, pledge, lien,
assignment or otherwise. Neither the acceptance of this Deed of Trust nor its enforcement,
whether by court action or pursuant to the power of sale or other powers herein contained, shall
prejudice or in any manner affect the Trustee’s or the Beneficiary’s right to realize upon or
enforce any other security now or hereafter held by the Trustee or the Beneficiary, it being
agreed that the Trustee and the Beneficiary, and each of them, shall be entitled to enforce this
Deed of Trust and any other security now or hereafter held by the Beneficiary or the Trustee in
such order and manner as they or either of them may in their absolute discretion determine. No
remedy herein conferred upon or reserved to the Trustee or the Beneficiary is intended to be
exclusive of any other remedy herein or by law provided or preclusive of any other remedy
herein or by law provided or permitted, but each shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in equity or by statute.
Every lawful power or remedy given by any instrument securing or relating to the Indebtedness
secured hereby to the Trustee or the Beneficiary or to which either of them may be otherwise
entitled, may be exercised, concurrently or independently, from time to time and as often as may
be deemed expedient by the Trustee or the Beneficiary and either of them may pursue
inconsistent remedies.
Section 2.10 Waiver. No delay or omission of the Beneficiary or the Trustee to
exercise any right, power or remedy accruing upon any Default shall exhaust or impair any such
right, power or remedy or shall be construed to be a waiver of any such Default, or acquiescence
therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary and
the Trustee, and each of them, may be exercised from time to time and as often as may be
deemed expedient by the Beneficiary and the Trustee, and each of them. No consent or waiver,
expressed or implied, by the Beneficiary to or of any breach or Default by the Grantor in the
performance of the obligations thereof hereunder shall be deemed or construed to be a consent or
waiver to or of any other breach or Default in the performance of the same or any other
obligations of the Grantor hereunder. Failure on the part of the Beneficiary to complain of any
act or failure to act or to declare an Event of Default, irrespective of how long such failure
continues, shall not constitute a waiver by the Beneficiary of its rights hereunder or impair any
rights, powers or remedies consequent on any breach or Default by the Grantor .
Section 2.11 Suits to Protect the Premises. The Beneficiary and the Trustee, and each
of them, shall have the power (a) to institute and maintain such suits and proceedings as they
may deem expedient to prevent any impairment of the Premises by any acts which may be
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unlawful or in violation of this Deed of Trust, with notice of commencement of such suits and
proceedings to be given to the Grantor, (b) to preserve or protect their interest in the Premises
and in the rents and issues arising therefrom, and (c) to restrain the enforcement of or compliance
with any legislation or other governmental enactment, rule or order that may be unconstitutional
or otherwise invalid, if the enforcement of or compliance with such enactment, rule or order
would impair the security hereunder or be prejudicial to the interest of the Beneficiary.
Section 2.12 The Beneficiary May File Proofs of Claim. In the case of any
receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other proceedings affecting the Grantor, its creditors or its property, the Beneficiary, to the extent
permitted by law, shall be entitled to file such proofs of claim and other documents as may be
necessary or advisable in order to have the claims of the Beneficiary allowed in such proceedings
for the entire amount due and payable by the Grantor under this Deed of Trust at the date of the
institution of such proceedings and for any additional amount which may become due and
payable by the Grantor hereunder after such date.
Section 2.13 Waiver of Rights. By execution of this Deed of Trust and to the extent
permitted by law, the Grantor expressly: acknowledges the right to accelerate the Indebtedness
and the power of sale given herein to the Trustee to sell the Premises by foreclosure under power
of sale upon default by the Grantor and without any notice other than such notice (if any) as is
specifically required to be given by law or under the provisions of this Deed of Trust; waives any
and all rights of the Grantor to appraisement, dower, curtsey and homestead rights to the extent
permitted by applicable law; acknowledges that the Grantor has read this Deed of Trust and any
and all questions regarding the legal effect of this Deed of Trust and its provisions have been
explained fully to the Grantor and the Grantor has consulted with counsel of its choice prior to
executing this Deed of Trust; and acknowledges that all waivers of the aforesaid rights of the
Grantor have been made knowingly, intentionally and willingly by the Grantor as part of a
bargained for transaction.
ARTICLE III
Section 3.1 Successors and Assigns. This Deed of Trust shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors, legal representatives,
successors and assigns. Whenever a reference is made in this Deed of Trust to the Grantor, the
Trustee or the Beneficiary such reference shall be deemed to include a reference to the heirs,
executors, legal representatives, successors and assigns of the Grantor, the Trustee or the
Beneficiary, respectively.
Section 3.2 Terminology. All personal pronouns used in this Deed of Trust, whether
used in the masculine, feminine or neuter gender, shall include all other genders; the singular
shall include the plural, and vice versa. Titles and articles in this Deed of Trust are for
convenience only and neither limit nor amplify the provisions of this Deed of Trust itself, and all
references herein to articles, sections or subsections shall refer to the corresponding articles,
sections or subsections of this Deed of Trust unless specific reference is made to articles,
sections or subsections of another document or instrument.
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Section 3.3 Severability. If any provision of this Deed of Trust or the application
thereof to any person or circumstance shall be invalid or unenforceable to any extent, the
remainder of this Deed of Trust and the application of such provision to other persons or
circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted
by law.
Section 3.4 Governing Law. This Deed of Trust shall be construed and governed
according to the laws of the State of North Carolina.
Section 3.5 Notices, Demands and Requests. All notices, demands or requests
provided for or permitted to be given pursuant to this Deed of Trust must be in writing and shall
be deemed to have been properly given if served or given by personal delivery or by being
deposited in the United States Mail, postage prepaid, registered or certified return receipt
requested, and addressed to the addresses as follows: (a) if to the County, County of Person,
North Carolina, 304 South Morgan Street, Room 219, Roxboro, North Carolina 27573-5245,
Attention: Finance Director, with a copy to County of Person, North Carolina, 304 South
Morgan Street, Room 212, Roxboro, North Carolina 27573-5245, Attention: County Manager,
(b) if to the Beneficiary, Branch Banking and Trust Company, BB&T Governmental Finance,
Attention: Account Administration/Municipal, Re: Person County Agreement Notice, 5130
Parkway Plaza Boulevard, Building 9, Charlotte, North Carolina 28217 and (c) if to the Deed of
Trust Trustee, F, Louis Lloyd, III, 5130 Parkway Plaza Boulevard, Building 9, Charlotte, North
Carolina 28217.
All notices, demands and requests shall be effective upon personal delivery or upon being
deposited in the United States Mail. However, the time period in which a response to any notice,
demand or request must be given, if any, shall commence to run from the date of receipt of the
notice, demand or request by the addressee thereof. Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice was given shall be deemed to
be receipt of the notice, demand or request sent. By giving at least thirty (30) days written notice
thereof, the Grantor, the Trustee or the Beneficiary shall have the right from time to time and at
any time during the term of this Deed of Trust to change their respective addresses and each shall
have the right to specify as its address any other address within the United States of America.
Section 3.6 Appointment of Successor to the Trustee. The Beneficiary shall at any
time have the irrevocable right to remove the Trustee herein named without notice or cause and
to appoint a successor thereto by an instrument in writing, duly acknowledged, in such form as to
entitle such written instrument to be recorded in the State of North Carolina, and in the event of
the death or resignation of the Trustee named herein, the Beneficiary shall have the right to
appoint a successor thereto by such written instrument, and any Trustee so appointed shall be
vested with the title to the Premises and shall possess all the powers, duties and obligations
herein conferred on the Trustee in the same manner and to the same extent as though such were
named herein as the Trustee .
Section 3.7 The Trustee’s Powers. At any time, or from time to time, without
liability therefor and without notice, upon written request of the Beneficiary and presentation of
this Deed of Trust, and without affecting the personal liability of any person for payment of the
Indebtedness secured hereby or the effect of this Deed of Trust upon the remainder of the
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Premises, the Trustee may (i) reconvey any part of the Premises, (ii) consent in writing to the
making of any map or plat thereof, (iii) join in granting any easement therein, or (iv) join in any
extension agreement or any agreement subordinating the lien or charge hereof.
Section 3.8 The Beneficiary’s Powers. Without affecting the liability of any other
person liable for the payment of any obligation herein mentioned, and without affecting the lien
or charge of this Deed of Trust upon any portion of the Premises not then or theretofore released
as security for the full amount of all unpaid obligations, the Beneficiary may, from time to time
and without notice (i) release any person so liable, (ii) extend the maturity or alter any of the
terms of any such obligation, (iii) grant other indulgences, (iv) cause to be released or
reconveyed at any time at the Beneficiary’s option, any parcel, portion or all of the Premises,
(iii) take or release any other or additional security for any obligation herein mentioned, or
(iv) make compositions or other arrangements with debtor in relation thereto. The provisions of
Section 45-45.1 of the General Statutes of North Carolina, as amended, or any similar statute
hereafter enacted in replacement or in substitution thereof shall be inapplicable to this Deed of
Trust.
Section 3.9 Release of Premises.
(a) If no Event of Default under this Deed of Trust shall have occurred and shall
continue to exist, the Grantor may at any time or times grant easements, licenses, rights of way
and other rights or privileges in the nature of easements with respect to any part of the Premises,
and the Grantor may release existing interests, easements, licenses, rights of way and other rights
or privileges with or without consideration, and the Beneficiary agrees that it shall execute and
deliver and will cause, request or direct the Deed of Trust Trustee to execute and deliver any
instrument necessary or appropriate to grant or release any such interest, easement, license, right
of way or other right or privilege but only upon receipt of (i) a copy of the instrument of grant or
release, (ii) a written application signed by the Grantor requesting such instrument and (iii) a
certificate executed by the Grantor and reasonably acceptable to the Beneficiary to the effect that
the grant or release (A) is not detrimental to the effective use of the Premises or the proper
conduct of the operations of the Board of Education at the Premises and (B) will not materially
impair the value of the security under this Deed of Trust in contravention of the provisions
hereof.
(b) Upon the Grantor exercising its rights to dispose of any Fixtures in accordance
with the provisions of Section 6.1 of the Installment Financing Contract, the Beneficiary and the
Trustee will execute all releases or other documents necessary to effectuate the release of the
respective Fixtures from the lien of this Deed of Trust.
Section 3.10 Acceptance by the Trustee. The Trustee accepts this Trust when this
Deed of Trust, duly executed and acknowledged, is made of public record as provided by law.
Section 3.11 Miscellaneous. The covenants, terms and conditions herein contained
shall bind, and the benefits and powers shall inure to the respective heirs, executors,
administrators, successors and assigns of the parties hereto. Whenever used herein, the singular
number shall include the plural, the plural the singular, and the term “Beneficiary” shall include
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17
any payee of the indebtedness hereby secured and any transferee or assignee thereof, whether by
operation of law or otherwise.
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18
IN WITNESS WHEREOF, the Grantor has caused this Deed of Trust to be executed
under seal the day and year first above written.
COUNTY OF PERSON, NORTH CAROLINA
By: ____________________________________
Jimmy B. Clayton
Chairman of the Board of Commissioners
for the County
[SEAL]
ATTEST:
_______________________________
Brenda B. Reaves
Clerk to the Board of Commissioners
for the County
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19
STATE OF NORTH CAROLINA )
)
COUNTY OF PERSON )
I, _________________________________, a Notary Public, certify that Jimmy B.
Clayton personally came before me this day and acknowledged that he is the Chairman of the
Board of Commissioners for the County of Person, North Carolina, and that, by authority duly
given and as the act of said County, the foregoing instrument was signed in its name by him,
sealed with its seal, and attested by Brenda B. Reaves, the Clerk to the Board of Commissioners
for said County.
WITNESS my hand and notarial seal, this _____ day of October 2014.
My commission expires: __________________________________________
Notary Public
____________________
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A-1
EXHIBIT A
REAL PROPERTY DESCRIPTION
The Real Property consists of a tract or parcel of land described as follows:
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B-1
EXHIBIT B
PERMITTED ENCUMBRANCES
Permitted encumbrances (the “Permitted Encumbrances”) are as follows:
(1) easements, exceptions or reservations (i) for the purpose of pipelines, telephone
lines, cable television lines, telegraph lines, power lines and substations, roads, streets, alleys,
highways, parking, railroad purposes, drainage and sewerage purposes, dikes, canals, laterals,
ditches, transportation of oil, gas or other materials, removal of oil, gas or other materials, and
other like purposes, or (ii) for the joint or common use of real property, facilities and equipment,
which exist on the Closing Date (as defined in the Installment Financing Contract) or arise under
the provisions of Section 3.9 of this Deed of Trust and which, in the case of either (i) or (ii), in
the aggregate do not materially interfere with or impair the operation of the Premises for the
purposes for which they are or may reasonably be expected to be used;
(2) the rights of the Bank under the Installment Financing Contract;
(3) the lien of this Deed of Trust;
(4) the Lease (as defined in the Installment Financing Contract) and any sublease by
the Board of Education in conformity with the provisions of Section 6.11 of the Installment
Financing Contract, all of which are expressly subordinate to the lien of this Deed of Trust;
(5) any materialmen’s liens incurred in the ordinary course of business and not
remaining undischarged for more than sixty (60) days from the date thereof; and
(6) any other liens, encumbrances, charges and restrictions on the Real Property
described in Schedule B – Section II (excluding exception ___) of the commitment of
_____________________________ Title Insurance Company to issue the title insurance policy
required pursuant to Section 6.5 of the Installment Financing Contract, which commitment is
numbered _______________, or approved in writing by the Bank.
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AGREEMENT CONCERNING
SCHOOL ROOF IMPROVEMENTS
by and between
THE PERSON COUNTY BOARD OF EDUCATION
and
PERSON COUNTY, NORTH CAROLINA
Dated October 16, 2014
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AGREEMENT CONCERNING
SCHOOL ROOF IMPROVEMENTS
THIS AGREEMENT, dated October 16, 2014, and entered into by and between The
Person County Board of Education, a body corporate which has general control and supervision
of all matters pertaining to the public schools in the Person County Schools, its respective school
administrative unit, and is duly organized and existing under the laws of the State of North
Carolina (the “Board of Education”), and the County of Person, North Carolina, a body corporate
and politic and a political subdivision of the State of North Carolina (the “County”),
W I T N E S S E T H:
WHEREAS, the County and the Board of Education have determined to cooperate in a
plan to finance a portion of the cost of a project which each has found to be necessary and
desirable to provide for improved public school facilities and improved public education in such
school administrative unit;
WHEREAS, such project consists of the repair or replacement of the roof of Earl
Bradsher Preschool, as more particularly described in the Installment Financing Contract
hereinafter defined (the “School Project”);
WHEREAS, the County has also determined to finance a portion of the cost of a project
consisting of the repair or replacement of the roof on the Kirby Civic Auditorium and the
acquisition and improvement of a building and related property to house the Person County
Recycling Center, as more particularly described in the Installment Financing Contract
(collectively, the “County Project” and, together with the School Project, the “Project”);
WHEREAS, as a part of such plan, the Board of Education is to convey the site of Earl
Bradsher Preschool and the improvements thereon (the “Property”) to the County and the County
is to lease the Property to the Board of Education;
WHEREAS, the Board of Education is authorized (a) to sell the Property to the County
for any price negotiated between them in connection with the School Project, (b) to lease the
Property from the County and (c) to enter into contracts for the acquisition, construction and
installation of the School Project;
WHEREAS, the County is authorized (a) to acquire the Property from the Board of
Education, (b) to lease the Property to the Board of Education and (c) to construct, improve or
otherwise make available property for use by the Person County Schools;
WHEREAS, the County is also authorized to finance a portion of the Cost of the Project,
as defined in the Installment Financing Contract, by contracts that create security interests in the
Property and the improvements thereon and certain related property to secure repayment of
moneys made available for such purpose;
WHEREAS, the Board of Education and the County are authorized to enter into
agreements in order to execute such plan, and this agreement (this “Agreement”) constitutes such
an agreement; and
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2
WHEREAS, all acts, conditions and things required by law to exist, to have happened
and to have been performed precedent to and in connection with the execution and entering into
of this Agreement do exist, have happened and have been performed in regular and due time,
form and manner as required by law, and the parties hereto are now duly authorized to execute
and enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements and
covenants contained herein and for other valuable consideration, the parties hereto do hereby
agree as follows:
Section 1. Sale of Property to County. The Board of Education will sell the Property
to the County for a price of $100 and will convey the Property to the County by means of a
General Warranty Deed substantially in the form thereof attached hereto as Exhibit A (the
“General Warranty Deed”).
Section 2. Lease of Property to Board of Education. Upon the conveyance of the
Property to the County by the Board of Education, the County will lease the Property to the
Board of Education for use by the Person County Schools pursuant to a Lease to be entered into
by the County and the Board of Education dated October 16, 2014 (the “Lease”).
Section 3. Acquisition, Construction, Installation and Financing of School Project.
The County (a) will acquire the Property from the Board of Education in accordance with
Section 1 above, (b) will lease the Property to the Board of Education in accordance with
Section 2 above and (c) together with the Board of Education will provide for the acquisition,
construction and installation of the School Project as hereinafter provided.
The County will also finance a part of the Cost of the Project pursuant to Section 160A-
20 of the General Statutes of North Carolina, as amended, by entering into an Installment
Financing Contract with Branch Banking and Trust Company (the “Bank”), dated October 16,
2014 (the “Installment Financing Contract”). The County will execute and deliver to a trustee
for the benefit of the Bank a Deed of Trust and Security Agreement, dated October 16, 2014 (the
“Deed of Trust”), which will encumber the Property and the improvements thereon and certain
related property to secure the County’s obligation to repay the amount advanced to it pursuant to
the Installment Financing Contract.
The Board of Education will be responsible for and enter into contracts for the work
constituting the School Project. In order to enable the Board of Education to carry out the
County’s obligations under the Installment Financing Contract with respect to the work for
which the Board of Education will be responsible under this Agreement, the County hereby
transfers its rights under the Installment Financing Contract regarding such obligations to the
Board of Education. The Board of Education will cause the School Project to be completed on
or before the date set forth in the construction documents and otherwise in accordance with the
construction documents and the Installment Financing Contract and any applicable requirements
of governmental authorities and law.
Section 4. Indemnification. To the extent permitted by law, the Board of Education
shall indemnify and save the County harmless against and from all claims by or on behalf of any
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3
person, firm, corporation or other legal entity arising from the acquisition, construction and
installation of the School Project; provided, however, that the Board of Education shall not be
obligated to pay the Installment Payments pursuant to the Installment Financing Contract or to
indemnify any party to the Installment Financing Contract for any third-party claims asserted
against any such party relating to the payment of such Installment Payments and that the right to
indemnification shall not apply to losses arising from any action taken by the County. The
Board of Education shall be notified promptly by the County of any action or proceeding brought
in connection with any such claims arising from the acquisition, construction and installation of
the School Project.
Section 5. Description of School Project; Additional Improvements. The Board of
Education shall have the right to make any changes in the description of the School Project or of
any component or components thereof; provided, however, that the Board of Education shall first
notify the County Manager of the County (the “County Manager”) or his designee of any change
that is expected to cost more than $50,000, and, further, that any increase in the cost of the
School Project resulting from any change shall, to the extent the increased cost exceeds the funds
in the Project Fund available therefore, be payable solely from other funds of the Board of
Education. In addition, any such change must be in accordance with Section 5.1 of the
Installment Financing Contract.
The Board of Education shall have the right, in its sole discretion and at its own expense,
to acquire, construct and install real property improvements or items of equipment or other
personal property other than the School Project in or upon any portion of the Leased Property (as
defined in the Lease) that do not materially impair the effective use or materially decrease the
value of the Leased Property, as provided in Section 7.2 of the Lease.
Section 6. Construction Conferences. The Board of Education hereby agrees that it
will, upon the request of the County Manager, provide to the County Manager or his designee
timely notice of all conferences with representatives of the architects, contractors and vendors
with respect to the School Project and that the County Manager or his designee shall have the
right to attend all such conferences.
Section 7. Compliance with Installment Financing Contract and Deed of Trust. The
Board of Education agrees that, except as otherwise provided in this Agreement or in the Lease,
it will, and the County specifically authorizes it to, faithfully discharge all duties imposed on the
County by the Installment Financing Contract and the Deed of Trust with respect to the
acquisition, construction and installation of the School Project and the operation, maintenance
and insuring of the Mortgaged Property (as defined in the Installment Financing Contract) and
the Premises (as defined in the Deed of Trust).
Section 8. Compliance with Requisition Procedure. The Board of Education agrees
that it will comply with the requisition procedure for the payment of each Cost of the Project
relating to the School Project as provided in the Installment Financing Contract.
Section 9. Disclaimers of the County. The Board of Education acknowledges and
agrees that the design of the School Project has not been made by the County, that the County
has not supplied any plans or specifications with respect thereto and that the County (a) is not a
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4
manufacturer of, or a dealer in, any of the component parts of the School Project or similar
projects, (b) has not made any recommendation, given any advice or 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 School Project 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 School Project 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 School Project or any component
part 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 School Project 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 constructed
or will accomplish the results which the Board of Education intends therefor, or (iii) is safe in
any manner or respect.
The County makes no express or implied warranty or representation of any kind
whatsoever with respect to the School Project or any component part thereof to the Board of
Education or any other circumstance whatsoever with respect thereto, including but not limited
to any warranty or representation with respect to the merchantability or the fitness or suitability
thereof for any purpose; 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 thereof to perform any function; that the
funds advanced by the Bank pursuant to the Installment Financing Contract will be sufficient
(together with any other available funds of the County or the Board of Education) to pay the cost
of the School Project; or any other characteristic of the School Project; it being agreed that all
risks relating to the School Project, the completion thereof or the transactions contemplated
hereby or by the Installment Financing Contract are to be borne by the Board of Education, and
the benefits of any and all implied warranties and representations of the County are hereby
waived by the Board of Education.
Section 10. Acknowledgment of Authority of Board of Education. The parties
acknowledge that this Agreement is not intended in any way to diminish the Board of
Education’s authority to select school sites, choose the building design, construct school
buildings and establish the school program for the Person County Schools.
Section 11. Amendments and Further Instruments. The County and the Board of
Education may, from time to time, with the written consent of the Bank, execute and deliver such
amendments to this Agreement and such further instruments as may be required or desired for
carrying out the expressed intention of this Agreement.
Section 12. Agreement to Survive Termination of Installment Financing Contract.
Notwithstanding anything to the contrary contained herein, the obligations undertaken by the
Board of Education hereunder shall survive the termination of the Installment Financing
Contract.
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5
IN WITNESS WHEREOF, the parties hereto have executed and attested this Agreement
by their officers thereunto duly authorized as of the day and year first written above.
THE PERSON COUNTY BOARD OF
EDUCATION
By: ____________________________________
Gordon Powell
Chairman of the Board of Education
[SEAL]
Attest:
_____________________________
Danny Holloman
Secretary of the Board of Education
This instrument has been pre-audited in the manner required by The School Budget and
Fiscal Control Act.
Kim McVey
Finance Officer of the Board of Education
[Signatures Continued on Following Page.]
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6
[Counterpart Signature Page to the Agreement Concerning School Roof Improvements, dated
October 16, 2014, between The Person County Board of Education and the County of Person,
North Carolina]
COUNTY OF PERSON, NORTH CAROLINA
By: ____________________________________
Jimmy B. Clayton
Chairman of the Board of Commissioners
for the County
[SEAL]
Attest:
_____________________________
Brenda B. Reaves
Clerk to the Board of
Commissioners for the County
This instrument has been pre-audited in the manner required by The Local Government
Budget and Fiscal Control Act.
Amy Wehrenberg
Finance Director of the County
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EXHIBIT A
GENERAL WARRANTY DEED
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LEASE
by and between
PERSON COUNTY, NORTH CAROLINA
AS LESSOR
and
THE PERSON COUNTY BOARD OF EDUCATION
AS LESSEE
Dated October 16, 2014
After recording, please return to:
C. Ronald Aycock, Esq.
County of Person, North Carolina
304 South Morgan Street
Roxboro, North Carolina 27573-5245
This document was prepared by:
Gundars Aperans, Esq.
Robinson, Bradshaw & Hinson, P.A.
101 North Tryon Street, Suite 1900
Charlotte, North Carolina 28246
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LEASE
THIS LEASE, dated October 16, 2014, and entered into by and between the County of
Person, North Carolina, a body corporate and politic and a political subdivision of the State of
North Carolina, as lessor (the “County”), and The Person County Board of Education, a body
corporate which has general control and supervision of all matters pertaining to the public
schools in the Person County Schools, its respective school administrative unit, and is duly
organized and existing under the laws of the State of North Carolina, as lessee (the “Board of
Education”),
W I T N E S S E T H:
WHEREAS, the County and the Board of Education have determined to cooperate in a
plan to finance a portion of the cost of a project which each has found to be necessary and
desirable to provide for improved public school facilities and improved public education in such
school administrative unit;
WHEREAS, such project consists of the repair or replacement of the roof of Earl
Bradsher Preschool, as more particularly described in the Installment Financing Contract
hereinafter defined (the “School Project”);
WHEREAS, the County has also determined to finance a portion of the cost of a project
consisting of the repair or replacement of the roof on the Kirby Civic Auditorium and the
acquisition and improvement of a building and related property to house the Person County
Recycling Center, as more particularly described in the Installment Financing Contract
(collectively, the “County Project” and, together with the School Project, the “Project”);
WHEREAS, as a part of such plan, the Board of Education has executed a General
Warranty Deed, made October 16, 2014, conveying the site of Earl Bradsher Preschool and the
improvements thereon to the County and the County is to lease such site and the improvements
thereon to the Board of Education (such site as more particularly described in Exhibit A hereto
and the improvements thereon being collectively called the “Leased Site”);
WHEREAS, as a part of such plan, the County has entered into an Installment Financing
Contract, dated October 16, 2014, between the County and Branch Banking and Trust Company
(the “Bank”), providing for the financing of a portion of the cost of the Project (the “Installment
Financing Contract”), a copy of which is attached hereto as Exhibit B;
WHEREAS, as a part of such plan, the County and the Board of Education have entered
into an Agreement Concerning School Roof Improvements, dated October 16, 2014, providing,
among other matters, for the lease of the Leased Site by the County to the Board of Education
and the acquisition, construction and installation of the School Project (the “Administrative
Agreement”); and
WHEREAS, as a part of such plan, the County proposes to lease the Leased Property,
consisting of the Leased Site and the School Project, to the Board of Education and the Board of
Education has determined to lease the Leased Property from the County;
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2
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; RULE OF CONSTRUCTION
All capitalized terms used in this Lease and not otherwise defined herein shall have the
meanings assigned to them in the Installment Financing Contract, unless the context clearly
requires otherwise. In addition, the following terms will have the meanings specified below,
unless the context clearly requires otherwise:
“Board of Education Representative” means any person at the time designated, by a
written certificate furnished to the County and signed on the Board of Education’s behalf by its
Chairman, to act on the Board of Education’s behalf for the purpose of performing any act under
this Lease.
“Closing Date” means the date on which the Installment Financing Contract takes effect.
“County Representative” means any person at the time designated, by a written certificate
furnished to the Board of Education and signed on the County’s behalf by the Chairman of its
Board of Commissioners, to act on the County’s behalf for the purpose of performing any act
under this Lease.
“Event of Default” means one or more events of default as defined in Section 12.1.
“Lease” means this Lease, as it may be duly amended.
“Lease Term” means the term of this Lease as determined pursuant to Article IV.
“Lease Year” means, initially, from the Closing Date through December 31, 2014, and,
thereafter, means the twelve-month period of each year commencing on January 1 and ending on
the next December 31.
“Leased Property” means the Leased Site and the School Project to be acquired,
constructed and installed thereon collectively.
All references to articles or sections are references to articles or sections of this Lease,
unless the context clearly indicates otherwise.
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3
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
The County and the Board of Education each represent, covenant and warrant for the
other’s benefit as follows:
(1) Neither the execution and delivery of this Lease, nor the fulfillment of or
compliance with its terms and conditions, nor the consummation of the transactions
contemplated hereby, results or will result in a breach of the terms, conditions and provisions of
any agreement or instrument to which either is now a party or by which either is bound, or
constitutes a default under any of the foregoing.
(2) To the knowledge of each party, there is no litigation or proceeding pending or
threatened against such party (or against any other person) affecting the rights of such party to
execute or deliver this Lease or to comply with its obligations under this Lease. Neither the
execution and delivery of this Lease by such party, nor compliance by such party with its
obligations under this Lease, requires the approval of any regulatory body or any other entity the
approval of which has not been obtained.
ARTICLE III
DEMISING CLAUSE
The County hereby leases the Leased Property to the Board of Education and the Board
of Education hereby leases the Leased Property from the County, in accordance with the
provisions of this Lease, to have and to hold for the Lease Term.
Notwithstanding anything in this Lease to the contrary, the Board of Education’s rights to
possession of the Leased Property, its rights to purchase the Leased Property pursuant to
Section 5.2, and all of its other rights under this Lease are subordinate to the rights of the Bank,
the beneficiary under the Deed of Trust and Security Agreement, dated October 16, 2014, from
the County to F. Louis Loyd, III, Trustee, and its successors and assigns, and relating to the
Leased Property (the “Deed of Trust”). Any judicial sale of, or foreclosure on, the Leased
Property pursuant to the Deed of Trust shall terminate all the Board of Education’s rights
hereunder with respect to the Leased Property.
ARTICLE IV
LEASE TERM
4.1 Commencement. The Lease Term shall commence on the Closing Date.
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4
4.2 Termination. The Lease Term shall terminate upon the earlier of either of the
following events:
(a) the termination of the Installment Financing Contract; or
(b) an Event of Default and termination by the County pursuant to Article XII.
Termination of the Lease Term shall terminate the County’s obligations under this Lease
and the Board of Education’s rights of possession under this Lease, but all other provisions of
this Lease, including those relating to the receipt and disbursement of funds, shall be continuing
until the Installment Financing Contract is discharged as provided therein.
ARTICLE V
QUIET ENJOYMENT; PURCHASE OPTION
5.1 Quiet Enjoyment. The County hereby covenants that the Board of Education
shall, during the Lease Term, peaceably and quietly have and hold and enjoy the Leased Property
without suit, trouble or hindrance from the County, except as expressly required or permitted by
this Lease. The County shall not interfere with the quiet use and enjoyment of the Leased
Property during the Lease Term. The County shall, at the Board of Education’s request and the
County’s cost, join and cooperate fully in any legal action in which the Board of Education
asserts its right to such possession and enjoyment, or which involves the imposition of any taxes
or other governmental charges on or in connection with the Leased Property. In addition, the
Board of Education may at its own expense join in any legal action affecting its possession and
enjoyment of the Leased Property, and shall be joined (to the extent legally possible, and at the
Board of Education’s expense) in any action affecting its liabilities hereunder.
The provisions of this Article shall be subject to rights to inspect the Leased Property
granted to parties under the Installment Financing Contract and to the right hereby reserved to
the County to inspect the Leased Property at any reasonable time.
Notwithstanding the foregoing, nothing contained in this Lease, the Administrative
Agreement, the Deed of Trust or any other arrangements entered into between the County and
the Board of Education in connection with the financing of the School Project shall be construed
to grant to the County any jurisdiction or supervision over the operation and use of the public
school system for the County and its facilities that would not exist in the absence of these
transactions. The County and the Board of Education hereby acknowledge and agree that the
transactions contemplated by the Lease, the Administrative Agreement, the Deed of Trust or any
other arrangements entered into between the County and the Board of Education are entered to
facilitate the financing by the County of a portion of the Cost of the Project. The County shall
have no rights over the public school system or its facilities on account of this Lease and the
other transactions contemplated hereby except as shall be necessary for the County to carry out
its obligations under the financing arrangements.
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5
5.2 Purchase Option.
(a) The Board of Education shall have the option (a) to purchase the Leased Property,
in part, from time to time, to the extent that it constitutes Premises released from the lien and
security interest of the Deed of Trust pursuant to Section 3.9 of the Deed of Trust, upon payment
to the County of a purchase option price of $100 and (b) to purchase the remainder or all of the
Leased Property at the end of the Lease Term upon payment by the County of all of the
Installment Payments and upon payment to the County of a purchase option price of $100. The
County shall promptly notify the Board of Education of the end of the Lease Term. The Board
of Education shall notify the County of its exercising of this option within ninety (90) days after
any such partial release of the Premises or after the end of the Lease Term, as may be applicable,
and within forty-five (45) days thereafter the County shall execute and deliver to the Board of
Education a quit-claim deed with a covenant against grantor’s acts, if applicable, together with
such other documents as are necessary to convey to the Board of Education good and marketable
title to the respective Leased Property, subject only to (a) Permitted Encumbrances and (b) any
encumbrance or imperfection caused by or attributable to the Board of Education.
(b) Upon request of the Board of Education, the County shall request the Bank to
release the Leased Property, or any part thereof, to the extent that it constitutes Premises, as
provided in Section 3.9 in the Deed of Trust. Any such request by the Board of Education shall
include a resolution duly adopted by the Board of Education stating the purpose for which such
release of the Leased Property is sought and giving an adequate legal description of the part of
the Leased Property to be released. The County shall use its best efforts to submit such a request
to the Bank within sixty (60) days of receiving such a request from the Board of Education.
ARTICLE VI
CONSIDERATION FOR LEASE
6.1 Use as Schools; Assumption of Obligations. In partial consideration for its
acquisition of rights to use the Leased Property during the Lease Term and its option to purchase
the Leased Property, the Board of Education hereby agrees to use the Leased Property for public
school purposes in fulfillment of its obligation, shared by the County, to provide for elementary
and secondary education in the County. In addition, in consideration of its rights under this
Lease, the Board of Education undertakes the obligations imposed on it hereunder, including
those imposed by Section 8.1.
6.2 Payments. In partial consideration for its acquisition of rights to use the Leased
Property during the Lease Term and its option to purchase the Leased Property, the Board of
Education hereby agrees to pay to the County annual rent in the amount of $1 payable in advance
on the Closing Date (receipt of which is hereby acknowledged) and on the first day of each
Lease Year thereafter. The County and the Board of Education acknowledge their understanding
that, although the County’s financing of a portion of the cost of the Leased Property and
providing of the Leased Property to the Board of Education for its use, is of substantial value to
the Board of Education, any payment by the Board of Education of a market value rent would
represent simply an accounting transaction, because the Board of Education’s funding for such
purpose would be primarily provided through the County.
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6
ARTICLE VII
ACQUISITION, CONSTRUCTION AND INSTALLATION OF SCHOOL PROJECT
AND ADDITIONAL IMPROVEMENTS
7.1 Acquisition, Construction and Installation of School Project. The County has
provided in the Administrative Agreement for the acquisition, construction and installation of the
School Project by the Board of Education. The Board of Education represents that it has
reviewed all provisions concerning the acquisition, construction and installation of the School
Project in the Installment Financing Contract and hereby approves such provisions. The Board
of Education shall take possession of the School Project upon completion thereof.
Title to the Leased Property shall be held by the County, subject only to Permitted
Encumbrances.
7.2 Additional Improvements. The Board of Education may at any time and from
time to time, in its sole discretion and at its own expense, acquire, construct and install real
property improvements and items of equipment or other personal property other than the School
Project in or upon any portion of the Leased Property that do not materially impair the effective
use or materially decrease the value of the Leased Property. The Board of Education shall repair
and restore any and all damage resulting from the acquisition, construction and installation of
any such improvements or property.
ARTICLE VIII
BOARD OF EDUCATION’S ASSUMPTION OF COUNTY’S OBLIGATIONS
8.1 Assumption of Obligations. The Board of Education hereby assumes all the
County’s obligations under the Installment Financing Contract regarding care, use and operation
of the Leased Property, payment of taxes, utilities and other governmental charges, maintenance
of insurance coverage, prevention of liens, and repair or replacement of the Leased Property. It
is expressly understood that the Board of Education shall not assume the County’s obligation
under the Installment Financing Contract to pay the Installment Payments and that the Board of
Education shall not indemnify the County or any other party to the Installment Financing
Contract for third-party claims asserted against any party to the Installment Financing Contract
relating to the payment of the Installment Payments or indemnify the County for losses arising
from any action of the County.
8.2 Transfer of Rights. In order to allow the Board of Education to carry out the
County’s obligations under the Installment Financing Contract to be assumed by the Board of
Education, the County hereby transfers its rights under the Installment Financing Contract
regarding such obligations to the Board of Education. Nothing in this Section, however, shall be
construed as in any way delegating to the Board of Education any of the County’s rights or
responsibilities to make decisions regarding the Board of Education’s capital and operating
budgets or otherwise covenanting that funds for such purposes will be appropriated or available.
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8.3 Board of Education’s General Covenant. The Board of Education further
undertakes not to take or omit to take any action the taking or omission of which would cause the
County to be in default in any manner under the Installment Financing Contract. If the Board of
Education shall take or omit to take any such action, then the Board of Education shall proceed
with all due diligence to take such action as may be necessary to cure such default.
8.4 County’s Cooperation. The County shall cooperate fully with the Board of
Education in filing any proof of loss or taking any other action under this Lease. Except as
hereinafter provided, neither the County nor the Board of Education shall voluntarily settle, or
consent to the settlement of, any proceeding arising out of any insurance claim with respect to
the Improvements without the other’s written consent. If the amount expected to be received
pursuant to any such settlement does not exceed $50,000, then the Board of Education may,
without the consent of the County, voluntarily settle, or consent to the settlement of, any
proceeding arising out of any related insurance claim, provided that the Board of Education
promptly notifies the County of such settlement after it has been reached.
8.5 Advances; Performance of Obligations. If the Board of Education shall fail to pay
any amount required to be paid by it under this Lease, or fails to take any other action required of
it under this Lease, then the County may (but shall be under no obligation to) pay such amount or
perform such other obligation. The Board of Education agrees to reimburse the County for any
such payment or for its costs incurred in connection with performing such other obligation.
ARTICLE IX
DISCLAIMER OF WARRANTIES; OTHER COVENANTS
9.1 Disclaimer of Warranties. THE COUNTY MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN,
CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR
FITNESS FOR A PARTICULAR USE OF THE LEASED PROPERTY OR ANY PART
THEREOF OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO
THE LEASED PROPERTY OR ANY PART THEREOF. In no event shall the County be liable
for any direct or indirect, incidental, special or consequential damage in connection with or
arising out of this Lease or the existence, furnishing, functioning or use by anyone of any item,
product or service provided for herein.
9.2 Further Assurances; Corrective Instruments. The Board of Education and the
County agree that they will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such supplements hereto and such further instruments as
may reasonably be required for correcting any inadequate or incorrect description of the Leased
Property hereby leased or intended so to be, or for otherwise carrying out the intention hereof.
9.3 Board of Education and County Representatives. Whenever under the provisions
hereof the approval of the Board of Education or the County is required to take some action at
the request of the other, unless otherwise provided, such approval or such request shall be given
for the Board of Education by the Board of Education Representative and for the County by the
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County Representative, and the Board of Education and the County shall be authorized to act on
any such approval or request of such representative of the other.
9.4 Compliance with Requirements. During the Lease Term, the Board of Education
and the County shall observe and comply promptly with all current and future orders of all courts
having jurisdiction over the Leased Property or any portion thereof (or be diligently and in good
faith contesting such orders), and all current and future requirements of all insurance companies’
written policies covering the Leased Property or any portion thereof.
ARTICLE X
TITLE TO LEASED PROPERTY; LIMITATIONS ON ENCUMBRANCES
10.1 Title to Leased Property. Except for personal property purchased by the Board of
Education at its own expense, title to the Leased Property and any and all additions and
modifications to or replacements of any portion of the Leased Property shall be held in the
County’s name, subject only to Permitted Encumbrances, until foreclosed upon as provided in
the Deed of Trust or conveyed as provided in this Lease, notwithstanding (a) the occurrence of
all or more events of default as defined in Section 13.1 of the Installment Financing Contract;
(b) the occurrence of any event of damage, destruction, condemnation or construction or title
defect; or (c) the violation by the County of any provision of this Lease.
The Board of Education shall have no right, title or interest in the Leased Property or any
additions and modifications to or replacements of any portion of the Leased Property, except as
expressly set forth in this Lease.
ARTICLE XI
SUBLEASING AND INDEMNIFICATION
11.1 Board of Education’s Subleasing. The Board of Education may not assign or
sublease the Leased Property, in whole or in part, except as provided in Section 6.11 of the
Installment Financing Contract.
11.2 Indemnification. Except as provided in Section 8.1, to the extent permitted by
law, the Board of Education shall and hereby agrees to indemnify and save the County harmless
against and from all claims by or on behalf of any person, firm, corporation or other legal entity
arising from the operation or management of the Leased Property by the Board of Education
during the Lease Term, including any claims arising from: (a) any condition of the Leased
Property, (b) any act of negligence of the Board of Education or of any of its agents, contractors
or employees or any violation of law by the Board of Education or breach of any covenant or
warranty by the Board of Education hereunder, or (c) the incurrence of any cost or expense in
connection with the acquisition, construction and installation of the School Project in excess of
the moneys available therefor in the Project Fund. The Board of Education shall be notified
promptly by the County of any action or proceeding brought in connection with any claims
arising out of circumstances described in (a), (b) or (c) above.
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ARTICLE XII
EVENTS OF DEFAULT
12.1 Events of Default. Each of the following shall be an “Event of Default” under
this Lease and the term “Default” shall mean, whenever it is used in this Lease, any one or more
of the following events:
(a) The Board of Education’s failure to make any payments hereunder when due.
(b) The Board of Education’s failure to observe and perform any covenant, condition
or agreement on its part to be observed or performed for a period of thirty (30) days after written
notice specifying such failure and requesting that it be remedied shall have been given to the
Board of Education by the County or by the Bank, unless the County and the Bank shall agree in
writing to an extension of such time prior to its expiration; provided, however, that if the failure
stated in such notice cannot be corrected within the applicable period, neither the County nor the
Bank shall unreasonably withhold its consent to an extension of such time if corrective action is
instituted by the Board of Education within the applicable period and diligently pursued until
such failure is corrected and, further, that if by reason of any event or occurrence constituting
force majeure the Board of Education is unable in whole or in part to carry out any of its
agreements contained herein (other than its obligations contained in Section 6.2 or 8.1), the
Board of Education shall not be deemed in default during the continuance of such event or
occurrence.
(c) The dissolution or liquidation of the Board of Education or the voluntary initiation
by the Board of Education of any proceeding under any federal or state law relating to
bankruptcy, insolvency, arrangement, reorganization, readjustment of debt or any other form of
debtor relief, or the initiation against the Board of Education of any such proceeding which shall
remain undismissed for sixty (60) days, or the entry by the Board of Education into an agreement
of composition with creditors or the Board of Education’s failure generally to pay its debts as
they become due.
12.2 Remedies on Default. Whenever any Event of Default shall have happened and
be continuing, the County may take one or any combination of the following remedial steps:
(a) Terminate this Lease, evict the Board of Education from the Leased Property or
any portion thereof and re-lease the Leased Property or any portion thereof.
(b) Have reasonable access to and inspect, examine and make copies of the Board of
Education’s books and records and accounts during the Board of Education’s regular business
hours, if reasonably necessary in the County’s opinion.
(c) Take whatever action at law or in equity may appear necessary or desirable,
including the appointment of a receiver, to collect the amounts then due, or to enforce
performance and observance of any obligation, agreement or covenant of the Board of Education
under this Lease.
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Any amount collected pursuant to action taken under this Section shall be applied in
accordance with the Installment Financing Contract.
12.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the
County is intended to be exclusive, and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder and every remedy now or hereafter existing at
law or in equity. No delay or omission to exercise any right or power accruing upon any default
shall impair any such right or power, and any such right and power may be exercised from time
to time as may be deemed expedient. In order to entitle the County to exercise any remedy
reserved in this Article XII, it shall not be necessary to give any notice, other than such notice as
may be required in this Article XII.
12.4 Waivers. If any agreement contained herein should be breached by either party
and thereafter waived by the other party, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other breach hereunder. The County, however,
shall have no right to waive any Event of Default without the Bank’s consent. A waiver of an
event of default under the Installment Financing Contract shall constitute a waiver of any
corresponding Event of Default under this Lease; provided that no such waiver shall extend to or
affect any subsequent or other Event of Default under this Lease or impair any right consequent
thereon.
12.5 Waiver of Appraisement, Valuation, Stay Extension and Redemption Laws. The
Board of Education and County agree, to the extent permitted by law, that in the case of a
termination of the Lease Term by reason of an Event of Default, neither the Board of Education
nor the County nor anyone claiming through or under either of them shall or will set up, claim or
seek to take advantage of any appraisement, valuation, stay, extension or redemption laws now
or hereafter in force in order to prevent or hinder the enforcement of the Installment Financing
Contract or of any remedy provided hereunder or thereunder; and the Board of Education and the
County, for themselves and all who may at any time claim through or under either of them, each
hereby waives, to the full extent that it may lawfully do so, the benefit of such laws.
ARTICLE XIII
MISCELLANEOUS
13.1 Notices. All notices, certificates or other communications hereunder shall be
sufficiently given if given by United States mail in certified form, postage prepaid, and shall be
deemed to have been received five (5) Business Days (as defined in the Installment Financing
Contract) after deposit in the United States mail in certified form, postage prepaid, as follows:
(a) If intended for the County, addressed to it at the following address:
County of Person, North Carolina
304 South Morgan Street, Room 219
Roxboro, North Carolina 27573-5245
Attention: Finance Director
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with a copy to:
County of Person, North Carolina
304 South Morgan Street, Room 212
Roxboro, North Carolina 27573-5245
Attention: County Manager
(b) If intended for the Board of Education, addressed to it at the following address:
The Person County Board of Education
304 South Morgan Street, Room 25
Roxboro, North Carolina 27573-5245
Attention: Superintendent
Copies of any notices, certificates or other communications to the County or the Board of
Education are to be sent also to:
Branch Banking and Trust Company
BB&T Governmental Finance
Attention: Account Administration/Municipal
Re: Person County Agreement Notice
5130 Parkway Plaza Boulevard
Building 9
Charlotte, North Carolina 28217
13.2 Binding Effect. This Lease shall be binding upon and inure to the benefit of the
Board of Education and the County, subject however to the limitations contained in Article XI.
13.3 Net Lease. This Lease shall be deemed and construed to be a “net lease,” and the
Board of Education shall pay absolutely net during the Lease Term all other payments required
hereunder, free of any deductions, and without abatement or setoff.
13.4 Payments Due on Holidays. If the date for making any payment or the last day
for performance of any act or the exercising of any right, as provided in this Lease, shall not be a
Business Day, such payment may be made or act performed or right exercised on the next
preceding day that is a Business Day with the same force and effect as if done on the nominal
date provided in this Lease.
13.5 Severability. In the event that any provision of this Lease, other than the
requirement of the County to provide quiet enjoyment of the Leased Property, shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provision hereof.
13.6 Execution in Counterparts. This Lease may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
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13.7 Applicable Law. This Lease shall be governed by and construed in accordance
with the laws of the State.
13.8 Captions. The captions or headings herein are for convenience only and in no
way define, limit or describe the scope or limit of any provisions or sections of this Lease.
13.9 Memorandum of Lease. At the request of either party, the County and the Board
of Education shall, on or before the Closing Date, execute a memorandum of this Lease legally
sufficient to comply with the laws of the State.
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IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed in
their corporate names by their duly authorized officers, all as of the day and year first above
written.
PERSON COUNTY, NORTH CAROLINA
By: ____________________________________
Jimmy B. Clayton
Chairman of the Board of Commissioners
for the County
[SEAL]
Attest:
_____________________________
Brenda B. Reaves
Clerk to the Board of Commissioners
for the County
This instrument has been pre-audited in the manner required by The Local Government
Budget and Fiscal Control Act.
Amy Wehrenberg
Finance Director of the County
[Signatures Continued on Following Page.]
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[Counterpart Signature Page to the Lease dated October 16, 2014
between the Person County Board of Education and
the County of Person, North Carolina]
THE PERSON COUNTY BOARD OF
EDUCATION
By: ____________________________________
Gordon Powell
Chairman of the Board of Education
[SEAL]
Attest
_____________________________
Danny Holloman
Secretary of the Board of Education
This installment has been pre-audited in the manner required by The School Budget and
Fiscal Control Act.
Kim McVey
Finance Officer of the Board of Education
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STATE OF NORTH CAROLINA )
)
COUNTY OF PERSON )
I, a Notary Public of the County and State aforesaid, certify that Brenda B. Reaves
personally came before me this day and acknowledged that she is the Clerk to the Board of
Commissioners for the County of Person, North Carolina and that by authority duly given and as
the act of said County, the foregoing instrument was signed in its name by the Chairman of said
Board of Commissioners and attested by her as the Clerk to said Board of Commissioners.
Witness my hand and official stamp or seal, this the ____ day of October 2014.
__________________________________________
NOTARY PUBLIC
My Commission Expires:
STATE OF NORTH CAROLINA )
)
COUNTY OF PERSON )
I, a Notary Public of the County and State aforesaid, certify that Danny Holloman
personally came before me this day and acknowledged that he is the Secretary of The Person
County Board of Education and that by authority duly given and as the act of said Board of
Education, the foregoing instrument was signed in its name by the Chairman of said Board of
Education and attested by him as the Secretary of said Board of Education.
Witness my hand and official stamp or seal, this the ____ day of October 2014.
__________________________________________
NOTARY PUBLIC
My Commission Expires:
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A-1
EXHIBIT A
DESCRIPTION OF THE LEASED SITE
The Leased Site consists of a tract or parcel of land described as follows:
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B-1
EXHIBIT B
Copy of Installment Financing Contract attached.
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