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HomeMy WebLinkAbout07071986 (2)76 REGULAR MEETING OF THE HARNETT COUNTY BOARD OF COMMISSIONERS MEETING OF JULY 7, 1986 RECONVENED JULY 9, 1986 RECONVENED RESOLUTION RE: FINANCING $ CONST. OF LAW ENFORCE. CENTER The Harnett County Board of Commissioners reconvened in regular session on Wednesday, July 9, 1986, in the Commissioners Room, County Office Building, Lillington, North Carolina, with the following members present: Lloyd G. Stewart, Bill Shaw, and Chairman Jesse Alphin presiding. Commissioner Rudy Collins was absent. Others present were Bob Jones, Attorney, Dallas Pope, Interim County Manager; Vanessa W. Young, Clerk to the Board; and Hollie J. Wade, Recording Secretary. Chairman Jesse Alphin reconvened the regular meeting at 12:31 p.m. Attorney Bob Jones presented to the Board for their consideration a resolution con- cerning the constructing and financing of the Law Enforcement Center for Harnett County. A lengthy discussion of this resolution and documents followed Mr, Jones' presentation. During which the commissioners questioned if there would be a penalty if the County elected to pay off the installment purchase early? Attorney Jones contacted Prudential -Bache and they agreed to a prepayment provision with the penalty (or premium according to terminology used by Prudential- Bache) to be as follows: Year Amount 1987 -1990 1991 -1995 1996 -1997 No Prepayment Option Outstanding Principal Plus 1% Outstanding Principal An agreement to this effect is to be executed by the County and Prudential -Bache at the closing on July 10, 1986. Following a discussion, Commissioner Shaw moved for the adoption of the following resolution concerning the financing and construction of the Harnett County Law Enforcement Center; Commissioner Stewart seconded the motion and it carried with a unanimous vote. RESOLUTION WHEREAS, the County of Harnett by Resolution adopted on the 25th day of June, 1986 has approved the construction of a Law Enforcement Center at the construction cost of $2,665,000.00 in accordance with the bid of Davidson and Jones Construction Company; and WHEREAS, Davidson and Jones Development Company has contracted with Davidson and Jones Construction Company for the construction of said Law Enforcement Center in accordance with the bid of Davidson and Jones Construction Company and in accord- ance with the plans and specifications of Williams and Associates Architects, employ- ed by the County for the purpose of designing and planning said Law Enforcement Cen- ter; and WHEREAS, the Harnett County Board of Commissioners by Resolution adopted on July 2, 1986 approved the financing of the said Law Enforcement Center in accordance with said Resolution by installment purchase in accordance with the provisions of N.C. Gen. Stat. 160A -20 with an initial payment of $450,000.00 upon acceptance by and conveyance to County; and WHEREAS, the Harnett County Board of Commissioners has determined that it is to the best interest of the County that the ten acre tract of land acquired by the County by Deed dated March 14, 1984 and recorded in Book 765, Pages 532 -533, Harnett County Registry, be conveyed to Davidson and Jones Development Company under author- ity of the General Assembly of North Carolina, Session1985, Chapter 16, House Bill 208 for the cash sum of $50,000.00 in order that said Law Enforcement Center may be constructed thereon and purchased by the County; and WHEREAS, by Resolution adopted July 2, 1986 the Harnett County Board of Commis- sioners approved the total purchase price in an amount not to exceed the sum of $2,906,865.00 plus the amount of interest required to be paid by Davidson and Jones Development Company to NCNB National Bank of North Carolina for the construction financing costs which said interest charged by NCNB National Bank of North Carolina will be its prime rate with an average cap not to exceed twelve percnet (12 %) per annum; and WHEREAS, for the purpose of constructing and financing said Law Enforcement Center it is necessary that the County of Harnett convey said ten acre tract to Davidson and Jones Development Company by Warranty Deed and to enter into a Sale Agreement and an Installment Purchase Agreement with Davidson and Jones Development Company. NOW, THEREFORE, BE IT RESOLVED BY THE HARNETT COUNTY BOARD OF COBMISSIONERS: 1. That the sale of the ten acre tract by the County of Harnett to Davidson and Jones Development Company in accordnace with the Sale Agreement for the sum of $50,000,00 is herewith determined to be in the best interest of the County and is herewith approved and adopted. 2. That the Warranty Deed from the County to Davidson and Jones Development Company and the Sale Agreement and the Installment Purchase Agreement between the County and Davidson and Jones Development Company in accordance with the forms 77 attached hereto are approved and adopted. 3. That the Chairman of the Harnett County Board of Commissioners and the Clerk to the Board be authorized to execute on behalf of the County of Harnett the said Warranty Deed to Davidson and Jones Developement Company and the Sale Agreement and the Installment Purchase Agreement between the said County of Harnett and Davidson and Jones Development Company. Duly adopted this the 9th day of July, 1986, upon motion made by Commissioner Bill Shaw, seconded by Commissioner Lloyd Stewart and passed upon the following vote: AYES 3 NOES 0 ABSENT 1 ABSTAINED 0 HARNETT COUNTY BOARD OF COMMISSIONERS s /Jesse Alphin Chairman ATTEST: s /Vanessa W. Young Clerk WARRANTY DEED PREPARED BY: Robert H. Jones, BRYAN, JONES, JOHNSON $ SNOW, Attorneys, P. 0. Box 970, Lillington, NC 27546 NORTH CAROLINA HARNETT COUNTY WARRANTY DEED THIS DEED, made and entered into this 10th day of July, 1986, by HARNETT COUNTY, a body politic and corporate organized and existing under the laws of the State of North Carolina, Grnator, to DAVIDSON AND JONES DEVELOPMENT COMPANY, 1203 Front Street, Raleigh, North Carolina 27609, a corporation organized and existing under the laws of North Carolina, Grantee; W I T N E S S E T H: THAT WHEREAS, pursuant to a Resolution adopted by the Board of Commissioners of Harnett County on July 9, 1986, and under authority given Harnett County by the General Assembly of North Carolina, Session 1985, Chapter 16, House Bill 208, Harnett County was authorized to convey the lands hereinafter described to the Grantee upon th payment of the purchase price of Fifty Thousand ($50,000.00) Dollars, which sum has been fully paid; NOW, THEREFORE, Grantor, in consideration of Fifty Thousand ($50,000.00) to it paid by Grantee, the receipt of which is hereby acknowledged, has bargained and sold, and by these presents, does grant, bargain, sell and convey unto Grantee, its succes- sors and assigns, in fee simple, that certain tract or parcel of land lying and being in the Lillington Township, Harnett County, North Carolina, and more particularly described as follows: Lying and being in the Town of Lillington and BEGINNING at an iron stake, which said iron stake is located North 10 deg. 27 min. 15 sec. East 200 ft. from the intersection of the eastern margin of Edwards Street and the northern margin of SR 2016 and runs thence with the eastern margin of Edwards Street; North 10 deg. 27 min. 15 sec. East 536.15 ft. to a set monument corner; thence South 79 deg. 32 min. 45 sec. East 820.37 ft. to a set monument corner; a line with Baker Nail Company; thence South 10 deg. 27 min. 15 sec. West 524.26 ft. to a set monument corner; thence North 80 deg. 22 min. 20 sec. West 820.4 ft. to the point of BEGINNING and containing 10 acres, more or less. The above described property was acquired by Harnett County by Deed dated March 14, 1984 and recorded in Book 765, Pages 532 -533, Harnett County Registry. TO HAVE AND TO HOLD the aforesaid tract or parcel of land and all privileges and appurtenances thereto belonging to the Grantee, in fee simple. Harnett County convenants with Grantee, its successors and assigns, that Harnett County is seized of the premises in fee simple, has the right to convey the same in fee simple, that title is marketable and free and clear from all encumbrances, and that Grantor will warrant and defend the title against the lawful claims of all person whomsoever, IN TESTIMONY WHEREOF, County has caused this instrument to be signed in its name by the Chairman of the Harnett County Board of Commissioners and attested by the Clerk to said Board, and sealed with the common seal of said County all under authority granted by the Harnett County Board of Commissioners the day and year first above written. HARNETT COUNTY 78 SALE AGREEMENT NORTH CAROLINA RE: LAW ENFORCE. HARNETT COUNTY CENTER SALE AGREEMENT THIS CONTRACT, made and entered into this 10th day of July 1986, by and between HARNETT COUNTY, a body politic and corporate organized and existing under the laws of the State of North Carolina; party of the first part (hereinafter called '!County "); and DAVIDSON AND JONES DEVELOPMENT COMPANY, a corporation - organized and existing under the laws of North Carolina with its principal office in Raleigh, North Carolina party of the second part (hereinafter called "Buyer "); W I T N E S S E T H That subject to the terms and conditions hereinafter set out and under authority given:.County pursuant to a Resolution adopted by the Harnett County Board of Commis - sioners on the 9th day of July, 1986 and by authority of the General Assembly of North Carolina, Session 1985, Chapter 16, House Bill 208, entitled "AN ACT TO AUTHOR- IZE HARNETT COUNTY TO DISPOSE OF PROPERTY BY PRIVATE SALE IN CONNECTION WITH A LEASE - PURCHASE ARRANGEMENT FOR CONSTRUCTION OF A LAW ENFORCEMENT CENTER ",County has con- tracted to sell to Buyer, and Buyer has contracted to purchase from County a certain tract of land situate in the County of Harnett and State of North Carolins, in Lill - ington Township and in the Town of Lillington, and more particularly described and bounded as set forth in Exhibit A attached herto. The terms and conditions above referred to are as follows! 1. The agree purchase price is fifty thousand t$50,000) dollars. 2. The purchase price shall be paid in cash immediately upon the execution and delivery: of a general warranty deed from County to Buyer on the date hereof. 3. That Buyer shall, in accordnace with that Installment Purchase Agreement dated. July 10, 1986 entered into between County and Buyer this date, construct on said premises herein agreed to be conveyed and in accordance with the plans and specifications provided by County as therein referred to and in accordance with the contract bid of Davidson and Jones Construction Company, construct upon said premises such improvements as provided therein and upon completion of construction and equip - ing of said improvements and upon acceptance thereof by County as provided in said Installment Purchase agreement Buyer, shall reconvey said property to County by spe cial warranty deed'upon payment by County of`the sum of four hundred fifty thousand (450,000.00) dollars in cash upon the delivery of said deed and the execution. and delivery by County to Buyer of a note for the balance of said purchase price, which said purchase price is to be as determined in accordance with said Installment Purchase Agreement, which said note will be secured by a Purchase Money Deed of Trust with Buyer as beneficiary in an amount and with payments as provided in said Install- ment Loan Agreement; all in accordance with and under the authority given County by the laws and constitution of North Carolina, expecially North Carolina General Statute 160A -20. IN TESTIMONY WHEREOF, County has caused this Sale Agreement, to be signed in its name by the Chairman of the Harnett County Board of Commissioners nad attested by the Clerk to said Board, and sealed with the common seal of said County all under author- ity granted bythe Harnett County Board of Commissioners, and Davidson' and Jones Dev- lopment Company has caused this Sale Agreement to be signed in its corporate name by its Presidnet and attested by the Secretary of said corporation all under authority granted by the corporation on the day and year set forth above in duplicate originals HARNETT COUNTY BOARD OF COMMISSIONERS DAVIDSON AND JONES DEVELOPMENT COMPANY EXHIBIT A Lying and being in the Town of Lillington and BEGINNING at an iron stake, which said iron stake is located North 10 deg. 27 min. 15 sec. East 200 ft. form the intersee tion of the eastern margin of Edwards Street and the northern margin of SR 2016 and runs thence with the eastern margin of Edwards Street, -North 10 deg. 27 min. 1S sec. East 536.15 ft. to a set monument corner; thence South 79 deg :32 min. 45 sec. East 820.37 ft. to a set monument corner, a line with Baker Nail Company; thence South 10 deg. 27 min. 15 sec. West 524.26 ft. to a set monument corner; thence North 80 deg 22 min. 20 sec, West 820.4 ft. to the point of BEGINNING and containing 10 acres, more or less. The above described property was acquired by Harnett County by Deed dated March 14, 1984 and recor -ed in Book 765, Pages'532-533, Harnett County Registry. 1 1 1 79 1 INSTALLMENT PURCHASE AGREEMENT Between DAVIDSON AND JONES DEVELOPMENT COMPANY, AS SELLER AND HARNETT COUNTY, NORTH CAROLINA, As Buyer Dated as of July 10, 1986 THIS INSTALLMENT PURCHASE AGREEMENT, dated as of July 10, 1986, by and between Davidson and Jones Development Company, a corporation duly organized and existing under the laws of the state of North Carolina as seller (Seller), whose address is 1203 Front Street, Raleigh, North Carolina 27609, and Harnett County, North Carolina, a public corporation and political subdivision of the state of North Carolina as buyer (Buyer) whose address is Harnett County Courthouse, Lillington, North Carolina 27546; W I T N E S S E T H WHEREAS, Buyer is authorized by law to establish, acquire, erect, repair, maintain and operate local confinment facilities and other facilities necessary for law enforcement purposes; and WHEREAS, Buyer is authorized by law to purchase real and personal property needed to carry out its governmental purposes by entering into installment purchase agreements; and WHEREAS, Buyer has determined that it is necessary and desirable to acquire the land, buildings and equipment described in the attached Exhibit A (the "Project ") in order to provide local confinement and law enforcement facilities needed to carry out its law enforcement responsibilities, all pursuant t this Agreement; and WHEREAS, Seller is willing to construct and sell the Project to Buyer pursuant to this Agreement; NOW THEREFORE, in the joint and mutual exercise of their powers, and in consideration of the mutua covenants herein contained, the parties hereto recite and agree as follows: ARTICLE I DEFINITIONS AND EXHIBITS Section 1.1. Definitions. Unless the context otherwise requires, the terms defined in this Sectio shall, for all purposes of this Agreement, have the meanings herein specified. Agreement: This Installment Purchase Agreement, and any duly authorized and executed amendment hereto. Bank: NCNB National Bank of North Carolina, in Raleigh, North Carolina. Building: The building to be designed, acquired, constructed and installed on the Land in accord- ance with the Plans and Specifications and this Agreement, which is generally described in the attached Exhibit A, and any other improvements constructed on the Land pursuant to this Agreement. Buyer Representative: The Chairman of Buyer's Board of Commissioners or any Person authorized by law to act on his behalf under or with respect to this Agreement, as evidenced by a certificate con- ferring such authority executed by the Chairman and given to Seller or a Seller Representative. Certificate of Buyer: A certificate in the form attached hereto as Exhibit D executed by the officer of Buyer named therein. Code: The United States Internal Revenue Code of 1954, as now or hereafter amended, and the regula tions and revenue rulings and procedures issued pursuant thereto from time to time. Completion and Acceptance Certificate: A certificate in the form attached hereto as Exhibit C executed by the Project Architect, Contractor, Seller and Buyer, stating that (a) the Building has been completed substantially in accordnace with the Plans and Specifications and this Agreement and (b) the Equipment has been delivered and installed, and that the Project has been accepted by Buyer. Completion Date: The date upon which the Project is completed in accordnace with this Agreement and available for occupancy and use by Buyer, as evidenced by the execution of the Completion and Acceptance Certificate by Seller, the Contractor and the Project Architect and the delivery thereof to Buyer at its administrative offices. Contractor: Davidson and Jones Construction Company of Raleigh, North Carolina. Construction Contract: The Construction Contract dated July 10, 1986, by and between Seller and the Contractor, whereby the Contractor has agreed to construct, install and furnish the Building and the Equipment on the Lnad in accordnace with the Plans and Specifications, and any duly authorized amendment or change order thereto approved in writing by Buyer. Costs or Project Costs: The sum of the following: (1) $50,000 which is the cost of the Land; (2) $2,665,000 which is the contract price of the Building to be constructed and the Equipment to be furnished by Seller; (3) $76,150 which is Seller's allowance for all of its costs and the Bank's costs incurred for legal counsel, title insurance, appraisal fee, development fee, filing fees and other items in connection with its construction loan not otherwise enumerated herein; (4) $101,100 which is the amount Buyer has agreed to include in the Project Cost as compensation to Prudential -Bache for providing permenent financing for the Project and for payment o legal fees and expenses; (5) the amount of any change orders executed by Seller and Buyer with respect to the Project which increase or decrease the cost of the Building or the Equipment; and (6) Seller's Project Interest Cost as reported by Seller pursuant to Section 3.4. r 80 Deed: of:Trust: The purchase money deed of trust to be given by Buyer to Seller on the Completion Date. Equipment: The equipment to be installed in the Building and sold by Seller to Buyer pursuant to this Agreement, which is described on the attached Exhibit A. Fiscal Year: Each twelve month fiscal period of Buyer commencing on July 1 of any year and ending on June 30 of the following year. Independent Counsel: An attorney duly admitted to the practice of law before the highest court of the State who is not a full -time employee of Seller, Buyer or an assignee thereof. Installment Payment: Any payment due from Buyer to Seller under Section 6.1 of this Agreement. Interest: The portion of any Installment Payment designated as interest in the attached Exhibit B. Interest Rate Determination Agreement: The Interest Rate Determination Agreement dated July 10, 1986 between Buyer and Kenny Information Systems, 55 Broad Street, New York, New York 10004, a copy of hwich is attached hereto as Exhibit F. Land: The real property described in the attached Exhibit A upon which the Building is to be built. Net Proceeds: Any insurance proceeds or condemnation award paid with respect to the Project, remaining after payment therefrom of all expenses incurred in the col- lection thereof. Notice of Completion Date: A written notice to be provided to Buyer by Seller, specifying the date upon which the Project is expected to be completed and available for occupancy and use by Buyer, and upon which the Completion and Acceptance Certifi- cate executed by Seller and the Project Architect will be presented to Buyer. Payment Date: The date upon which any Installment Payment is due and payable as provided in the attached Exhibit B. Permitted Encumbrances: As of any particular time: (i) liens for taxes and assessemnts not then delinquent, or which Buyer may, pursuant to provisions of Arti- cle Vii hereof, permit to remain unpaid, (ii) this Agreement, (iii) the Deed of Trust, or (iv) Seller's interest in the Equipment. Nothing herein shall affect or limit Seller's right to grant a mortgage of its interest in the Project to the Bank. Plans and 'Specifications: Architectural and engineering drawings and specifica- tions describing the Building prepared by the Project Architect and approved by Buyer, and any changes therein similarly approved. Prepayment Price: As of any Payment Date, the amount so designated and set fort opposite such date in the attached Exhibit B. Principal: The portion of any Installment Payment designated as principal in th attached Exhibit B. Project: The Land, the Building and the Equipment, Project Architect: Williams and Associates, Architects /Engineers, in Matthews, North Carolina, which has been designated and employed by Buyer to design and super- vise the aquisition, construction and installation of the Building, and any successo thereto appointed by Buyer. Project Interest Cost: The sum of $26,650, which is an amount equal to one per- cent (1.00%) of the amount of the construction loan commitment obtained by Seller from the Bank with respect to the Project, plus a sum equal to the interest paid or accrued on disbursements made by the Bank pursuant to said loan commitment to pay Project Costs, computed form the date of each such disbursement to the Completion Date. Predential- Bache: Prudential -Bache Securities Inc., a Delaware corporation, located at 100 Gold Street, New York, New York 10292. Sale Agreement: The Sale Agreement dated July 10, 1986, by and between Buyer as seller and Seller as buyer, whereby the Buyer has agreed to sell the Lnad to Seller and Seller has agreed to purchase the Land from Buyer. Seller Representative: The President or any Vice Presidnet of Seller or any other person authorized to act on behalf of Seller under or with respect to this Agreement, as evidenced by a certificate conferring such authority executed by the Presidnet or any Vice Presidnet of Seller, given to Buyer or a Buyer Representative. Buyer may require such further evidence of authority of a Seller Representative (other than Seller's President) to act on behalf of Seller as it shall deem reason- ably necessary to evidnece such authority. State: The State of North Carolina. 81 State and Federal Law Or Laws: The Constitution and laws of the State, and any ordinance, rule or regulation of any agency or political subdivision of the State; and any law of the United States, and any rule or regulation of any federal agency. Term of the Agreement or Agreement Term: The period during which this Agreement remains in effect as specified in Section 5.1. Section 1.2. Exhibits. The Following Exhibits are attached to and by reference made a part of this Agreement: Exhibit A: A description of the Land, the Building and the equipment being purchased by Buyer from Seller pursuant to this Agreement. Exhibit B: The schedule of Installment Payments to be paid by Buyer to Seller, to be completed as provided in Sections 3.5 and 6.2, and when completed will show the date and amount of each Installment Payment, the amount thereof comprising Principal and Interest and, as of each Payment Date, the price at which Buyer may exercise its option to prepay the Installment Payments with respect to the Project in accordance with Article X. Exhibit C: A Form of Completion and Acceptance Certificate to be executed by the Project Archi- tect, Contra -tor, Buyer and Seller, evidencing that the Building has been completed substantially in accordnace with the Plans and Specifications and this Agreement, that the Equipment has been furnished and installed, and that the Project has been accepted by Buyer. Exhibit D: A form of Certificate of Buyer certifying various facts concerning the Agreement, the Project and related matters. Exhibit E: A form of opinion of counsel to Buyer relating to the organization, nature and powers of Buyer; the validity, execution and delivery of this Agreement and the Deed of Trust; the absence of litigation; and related matters. Exhibit F: A copy of the Interest Rate Determination Agreement. ARTICLE II REPRESENTATIONS, CONVENANTS AND WARRANTIES 2.1. Representations, Covenants and Warranties of Buyer. Buyer represents, covenants and war- rants as follows: (a) Buyer is a duly formed and validly existing public corporation and political subdivision of the State, governed by the Constitution and laws of the State. (b) The Constitution and the laws of the State authorize Buyer to establish, acquire, con- struct, operate and maintain the Project; to enter into this Agreement and the transactions con- templated hereby and thereby, and to carry out its obligations under this Agreement. (c) The officers of Buyer executing this Agreement have been duly authorized to execute and deliver this Agreement under the terms and provisions of a resolution of Buyer's governing body or by other appropriate official action. (d) Buyer has complied with all open meeting laws, all public bidding laws and all other State and Federal Laws applicable to this Agreement and the acquisition of the Project by Buyer. (e) Except as provided under the terms of this Agreement, Buyer will not transfer, lease, assign, mortgage or encumber the Project. (f) Buyer will use the Project during the Agreement Term only to perform the essential gov- ernmental functions relating to law enforcement. (g) Upon the completion of the Project, evidneced by the occurrence of the Completion Date, Buyer will furnish to Seller an opinion of Buyer's counsel substantially in the form of the attached Exhibit E. (h) Buyer will not take or permit any of its officers to take any action with respect to the Agreement or the Project which would cause the Interest to become subject to federal income taxation under the Code, and Buyer will take all actions necessary to comply with all provisions of the Code which are applicable to the Agreement or the Project, compliance with which is neces- sary to insure that the Interest is not subject to taxation under the Code; provided that nothing herein shall require Buyer to take any action which it is not empowered to take under the laws of the State, Section 2.2. Representations, Covenants and Warranties of Seller, Seller represents, covenants and warrants as follows: (a) Seller is a corporation duly organized, existing and in good standing under the laws of the state of North Carolina; has full and complete power to enter into this Agreement and to enter into and carry out the transactions contemplated hereby and thereby, and to carry out its obliga- tions under this Agreeemnt; is possessed of full power to own and hold real and personal property, and to lease the same; and has duly authorized the execution and delivery of this Agreement. 82 (b) Neither the execution and delivery of this Agreement, nor the fulfillment of or compli- ance with the terms and conditions thereof, nor the consummation of the transactions contemplated hereby and thereby, conflicts with or results in a breach of -the terms, conditions or provisions of any restriction or any agreement or instrument to which Seller is now a party or by which Sel- ler or its property is bound, or constitutes a.default under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrance whatsoever upon'any of the property or assets of Seller, or upon the Project, except Permitted Encumbrances. (c) Upon exercise by Buyer of its option to prepay the Installment Payments and actual pay- ment of the applicable Prepayment Price with respect to the Project pursuant to Article X hereof, Seller will deliver to Buyer all documents which are or may be necessary to hest all of Seller's interest in and to the.Project in Buyer, and will release all liens and encumbrances created under this Agreement and the Deed of Trust with respect to the Project, as provided in Article X. ARTICLE III CONSTRUCTION OF PROJECT Section 3.1. Sale, Acquisition and Construction of ;Project; Payment of Cost. Seller shall pur- chase the Land from Buyer pursuant to the Sale Agreement; shall construct the Building and acquire and install the Equipment in, on or. about the Building; and shall advance money for the payment of, or otherwise provide for the payment of, the Cost of the Project. Section 3.2. Construction Contract. For the purpose of meeting its obligations under Section`3.1, Seller shall enter into the- Construction Contract in the form approved by Buyer. Seller shall not enter into any amendment or change order to the Cosntruction Contract unless approved in writing by Buyer. Section 3,3. Payments To Contractor. Seller shall not authorize or make payment to the Contract- or of any amounts due under the Construction Contract without the written approval of a Seller Repre- sentative or the Project Architect, Section 3.4. Completion; Change Orders, Seller shall complete the Building and install the Equipment in accordance with the Construction Contract on or before June 30, 1987, provided that if Seller fails to complete the Building and install the Equipment by said date but does so within ninety days thereafter, such failure to complete shall not constitute a breach of this Agreement or constitute cause for termination of this Agreement by Buyer. Seller shall not authorize any change orders which will extend the Completion Date for the Project beyond said date, or will make any substantial alteratio in teh construction of the Building or installation of the Equipment, without the written approval of Buyer. Seller's obligation to complete the Building and install the Equipment shall be subject to the force majeure limitation provision of Section 12,1 hereof; provided that in no event shall the Completio Date be extended beyond December 31, 1987. Section 3.5. Notice of Completion Date. Not less than 45 days prior to the anticipated comple- tion of the Project in accordance with the Plans and Specifications and this Agreement, and the antici- pated availability of the Project for "occupancy and use by Buyer, Seller shall.give Buyer, the Project Architect, Prudential- Bache and Kenny Information Systems notice of the following: (1) the expected Completion Date; and (2) the Cost of the Project and Seller's Project Interest Cost, computed by Seller as provided in Section -1;1.- Thereafter Seller shall.give Buyer notice of any change in the Completion Date and the Cost of the Project as previously noticed, as soon as such change is known. It is agreed that for purposes of computing the amount of the Installment Payments to be inserted in Exhibit B, Seller's computation of the Project Interest Cost shall be final. However, upon request by Buyer, Selle shall provide to Buyer verification of the Project Interest Cost. If the Project Interest Cost as verified is less than the amount included in the notice, Seller shall pay to Buyer upon demand, an amount equal to the difference between the Project Interest Cost included in the notice and the Project Interest Cost as so verified, If the Project Interest Cost as verified is more than the amount included in the notice, Buyer shall pay to Seller upon demend,- an amount equal to the difference.. Section 3.6. Completion and Execution of Exhibits and Other Documents. On the Completion Date, upon receipt of a Completion Certificate executed by Seller, the Contractor and the Project Architect, Buyer shall complete, execute and deliver to Seller, or cause to be completed, executed and delivered to Seller, five copies of each of the forms attached hereto as Exhibits B, C, D and E. On the Completion Date Seller shall convey good and marketable fee title to the Land and Building and good title to the Equipment to Buyer, by executing and delivering to Buyer a special warranty deed, a bill of sale and other documents as are customary to evidence the conveyance and the effect thereof; provided that title insurance shall not be required; and Buyer shall execute in favor of Seller, and shall deliver to Seller, a Deed of Trust with respect to the Project, in form satisfactory to Seller. The Deed of Trust is given -to secure the full and timely performance by Buyer of all of its obligations under this Agreement from and after the Completion Date, Section 3.7. Seller Liability, Seller assumes liability for all risks of loss until the Comple- tion Date. Until the Completion Date Seller shall maintain, or require to be maintained, in force during the entire construction period of the Project, builder's risk, liability, workmen's compensation and other insurance required by law or customarily maintained with respect to like construction. 1 1 83 ARTICLE IV AGREEMENT TO SELL Section 4.1. Sale. Seller agrees to sell the Project to Buyer, and Buyer hereby agrees to purchase the Project from Seller, upon the terms and conditions set forth in this Agreement. Section 4.2. Possession and Enjoyment. Seller hereby covenants with respect to the Project, to provide Buyer during the Term of this Agreement with quiet use and enjoyment of the Project, and Buyer shall during such Agreement Term peaceably and quietly have and hold and enjoy the Project, without suit, trouble or hindrance from Seller, except as expressly set forth in this Agreement. Seller will, at the request of Buyer and at Buyer's cost, join in any legal action in which Buyer asserts its right to such possession and enjoyment to the extent Seller may lawfully do so. Seller shall have the right to enter in and upon the Project as provided in Section 4.3. Section 4.3. Seller Access to Project. Buyer agrees that Seller and any Seller Representative shall have the right at all reasonable times to enter upon and to examine and inspect the Project. Buyer further agrees that Seller and any Seller Representative shall have such rights of access to the Project as may be reasonably necessary to cause the proper maintenance of the Project in the event of ffailure by Buyer to perform its obligations hereunder, or to carry out Seller's obligations and exercise Seller's rights under Article XII, or to determine whether Buyer is in compliance with this Agreement. ARTICLE V TERM OF AGREEMENT Section 5.1. Term of Agreement. This Agreement shall be and remain in effect with respect to the Project for an Agreement Term commencing on the date hereof and continuing until terminated as provided in Section 5.2. Section 5.2. Termination of Agreement Term. The Term of this Agreement will terminate upon the occurrence of the first of the following events: (a) the exercise by Buyer of its option to prepay the Installment Payments and actual payment of the applicable Prepayment Price with respect to the Project pursuant to Article X; (b) a default by Buyer and Seller's election to terminate this Agreement pursuant to Article XII; or (c) the payment by Buyer of all Installment Payments required to be paid by Buyer hereunder. ARTICLE VI INSTALLMENT PAYMENTS Section 6.1. Installment Payments. Buyer shall pay Installment Paymetns with respect to the Project, at the times and in the amounts determined in accordance with Section 6.2, such times and amounts to be set forth in Exhibit B. The Installment Payments shall be payable to Seller at its address specified herein, or at such other address as Seller may designate by written notice to Buyer, in lawful money of the United States of America. Section 6.2. Calculation of Installment Payments. The Installment Payments to be included in Exhibit B shall be computed as provided in this Section and Section 3.5, and when so computed shall be inserted in Exhibit B which shall then be approved and signed by a Buyer Representative and a Seller Representative. The Project Cost, less the sum of $450,000 which shall be paid by Buyer to Seller on the Completion Date as a down payment and the interest rates determined as provided below shall be used as the basis for computing the Installment Payments. The first Installment Payment shall be due on the first June 30 or December 30 following the Completion Date and shall comprise only Interest computed on the Project Cost at the average of all of said interest rates from the Completion Date to the Payment Date; the next 20 Installment Payments shall be due on the 30th day of such months thereafter occurring and shall comprise Principal and Interest computed from the first Payment Date for a ten year period in a manner resulting as nearly as possible in equal annual payment of Principal and Interest, provided that Principal shall come due in integral mutliples of $5,000. The interest rates to be used in computing the installment payments so provided in this Section shall be those determined by Kenny Information Systems in accordance with the Interest Rate Determina- tion Agreement. Section 6.3. Nature of Obligation. This Agreement shall not constitute a general obligation of Buyer, and Buyer's full faith and credit and taxing powers are not pledged for the payment of the Installment Payments due hereunder. In the event Buyer defaults on its obligation to pay Installment Payments due hereunder, Seller's sole remedy shall be to foreclose on the Deed of Trust given by Buyer to Seller under Section 3.6, and Seller shall have no right to a deficiency judgment against Buyer. Section 6.4. Source of Payment. All Installment Paymetns required to be paid by Buyer pursuant to this Agreement shall be paid from moneys duly budgeted, appropriated, obligated, and otherwise pro- vided and made available therefore by Buyer. Buyer shall lawfully budget for, appropriate, provide an otherwise obtain and make available moneys sufficient to pay when due all Installment Payments which will become due and owing during the Term of this Agreement; subject however to the provisions of Section 6.3. 84 Section 6.5. Interest Component. A portion of each Installment Payment is paid as an represents the payment of Interest. Exhibit B, after its completion pursuant to Section 6.2, will set forth the Interest component of each Installment Payment. Section 6.6. Installment Payments to be Unconditional. The obligation of the Buyer to make Installment Payments due with respect to the Project or any other payments required hereunder shall be absolute and unconditional in all events. Notwithstanding any dispute between Buyer and Seller or any other person, Buyer shall make all Installment Payments and other payments required hereunder when due and shall not withhold any Installment Payment or other payment pending final resolution of such dispute nor shall Buyer assert any right of set -off or counterclaim against its obligation to make such Installment Payments or other payments required under this Agreement. Buyer's obligation to make Installment Payments or other payments during the Agreement Term shall not be abated through accident or unforeseen circumstances However, nothing herein shall be construed to release Seller from the perfomrance of its obligations hereunder; and if Seller should fail to perform any such obligation, Buyer may institute such legal action against Seller as Buyer may deem necessary to compel the performance of such obligation or to recover damages therefor. Notwithstanding the fore- going, all obligations of the Buyer under this Section shall be subject to the limitations and provi- sions of Section 6.3. ARTICLE VII MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS Section 7.1. Maintenance and Modification of Project by Buyer. From and after the Completion Date Buyer shall, at its own expense, maintain, preserve and keep the Project in good repair, working order and condition, and shall from time to time make all repairs, replacements and improvements necessary to keep the. Project in such condition. Seller shall have no responsibility for any of these repairs, replacements or improvements. In addition, Buyer shall, at its own expense, have the right to remodel the Project or to make additions, modifications and improvements thereto. Such additions, modifications and improvements shall not in any way damage the Project nor cause it to be used for purposes other than those authorized under the provisions of State and Federal Law; and the Project, upon completion of any additions, modifications and improvements made pursuant to this Section, shall be of a value not less than the value of the Project immediately prior to the making of such additions modifications and improvements. Any property for which a substitution or replacement is made pursuant to this Section may be disposed of by Buyer in such manner and on such terms as are determined by Buyer. Buyer will not permit any mechanic's or other lien to be established or remain against the Project for labor or materials furnished in connection with any remodeling, additions, modifications, improvements, repairs, renewals or replacements made by Buyer pursuant to this Section; provided that if any such lien is established and Buyer shall first notify Seller of Buyer's intention to do so, Buyer may in good faith contest any lien filed or established against the Project, and in shuch event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless Seller shall notify Buyer that, in the opinion of Independent Counsel, by nonpayment of any such item the interest of Seller in the Project will be materially endangered or the Project or any part thereof will be subject to loss or forfeiture, in which event Buyer shall promptly pay and cause to be satisfied and discharged all such unpaid items or provide Seller with full security against any such loss or forfeiture, in form satisfactory to Seller. Seller will cooperate fully with Buyer in any such contest, upon the request and at the expense of Buyer. Section 7.2. Taxes, Other Governmental Charges and Utility Charges. From and after the Comple- tion Date Buyer shall also pay when due all gas, water, steam, electricity, heat, power, telephone, and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Project. From and after the Completion Date Buyer shall also pay all property and excise taxes and governmental charges of any kind whatsoever which may at any time be lawfully assessed or levied against or with respect to the Project or any part thereof or the Installment Payments, and which become due during the Term of this Agreement with respect thereto; and all special assessments and charges lawfully made by any governmental body for public improvements that may be secured by a lien on the Project; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, Buyer shall be obligated to pay only such installments as are required to be paid during the Term of this Agreement as and when the same become due. Buyer shall not be required to pay any federal, state or local income, inheritance, estate, - succession, transfer, gift, franchise, gross receipts, profit, excess profit, capital stock, corporate, or other similar tax payable by Seller, its successors or assigns, unless such tax is made in lieu of or as a substitute for any real estate or other tax upon property, Buyer may, at Buyer's expense and in Buyer's name, in good faith contest any such taxes, assess- ments, utility and other charges and, in the event of any such contest, may permit the taxes, assess- ments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless Seller shall notify Buyer that, in the opinion of Independent Counsel, by nonpayment of any such items the interest of Seller in the Project will be materially endangered or the Project or any part thereof will be subject to loss or forfeiture, in which event Buyer shall promptly pay such taxes, assessments or charges or provide Seller with full security against any loss which may result from nonpayment, in form satisfactory to Seller, Section 7.3. Liability Insurance. From and after the Completion Date, subject to availability, Buyer shall procure and maintain continuously in effect with respect to the Project, insurance against liability for injuries to or death of any person or damage to or loss of property arising out of or in any way relating to the maintenance, use or operation of the Project or any part thereof, and will cause all contractors to maintain similar insurance against all similar liabilities on their part The Net Proceeds of all such insurance shall be applied toward extenguishment or satisfaction of the liability with respect to which the insurance proceeds may be paid. Any risk described herein which is not covered by insurance shall be self- insured by Buyer to the maximum extent permitted by law. 85 1 1 Section 7,4. Buyer's Negligence. From and after the Completion Date Buyer assumes all risks and liabilities, whether or not covered by insurance, for loss or damage to the Project and for injury to or death of any person or damage to any property, whether such injury or death be with respect to agents or employees of Buyer or of third parties, and whether such property damage be to Buyer's pro- perty of others, which is proximately caused by the negligent conduct or willful misconduct of Buyer, its officers, employees and agents. Buyer hereby assumes responsibility for and agrees to reimburse Seller for all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expense (including reasonable attorney's fees) of whatsoever kind and nature, imposed on, incurred by or assert ed against Seller that in any way relate to or arise out of a claim, suit or porceeding based in whole or in part upon the negligent conduct of Buyer, its officers, employees and agents, to the maximum extent permitted by law; provided that Buyer shall not be required to make reimbursement of such items to the extent, if any, it is determined that they are the result of Seller's negligence or wilful misconduct. Section 7.5. Property Insurance. From and after the Completion Date Buyer shall have and assume the risk of loss with respect to the Project, and subject to availability shall procure and maintain continuously in effect during the Term of this Agreement with respect to the Project, other than Land and building foundations, all -risk insurance, subject only to the standard exclusions contained in the policy, in such amount as will be at least sufficient so that a claim may be made for the full replace- ment cost of any part thereof damaged or destroyed and to pay the applicable Prepayment Price. All policies (or endorsements or riders) evidencing insurance required in this Section shall be carried in the names of Buyer and Seller as their respective interests may appear. The Net Proceeds of Insurance required by this Section shall be applied as provided in Section 8.2. Section 7.6. Worker's Compensation Insurance. If required by State law, Buyer shall carry Work- er's Compensation Insurance throughout the Term of the Agreement covering all Buyer's employees on, in, near or about the Project, and upon request, shall furnish to Seller certificates evidencing such coverage. Section 7.7. Other Insurance and Requirements for All Insurance. All insurance required by Article III or this Article may be carried under a separate policy or a rider or endorsement; shall be taken out and maintained with responsible insurance companies organized under the laws of one of the states of the United States and qualified to do business in the State; shall contain a provision that the insurer shall not cancel or revise coverage thereunder without giving written notice to both partie at least ten (10) days (or 30 days if available) before the cancellation or revision becomes effective; and shall name Buyer and Seller as insured parties. Buyer shall deposit with Seller policies evidenc- ing any such insurance procured by it, or a certificate or certificates of the respective insurers stating that such insurance is in full force and effect. Before the expiration of any such policy, the party obligated under the terms of this Agreement to maintain such insurance shall furnish to the other party evidence that the policy has been renewed or replaced by another policy conforming to the provisions of this Article, unless such insurnace is no longer obtainable in which event such party shall notify the other party of this fact. Subsequent to the Completion Date, any risk described herein which is not covered by insurance shall be self- insured by Buyer to the maximum extnet permitted by law. Section 7.8. Liens. Buyer shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Project, other than the respective rights of Seller and Buyer as herein provided and Permitted Encumbrances. Except as expressly provided in this Article, Buyer shall promptly, at its own expense, take such action as may be necessary duly to discharge or remove any such mortgage, pledge, lien, charge, encum- brance or claim if the same shall arise at any time. Buyer shall reimburse Seller for any expense incurred by it in order to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim. ARTICLE III DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS Section 8.1. Damage, Destruction and Condemnation. If (i) the Project or any portion thereof is destroyed or is damaged by fire or other casualty or (ii) title to or the temporary use of the Project or any part thereof, or the interest of Buyer or Seller in the Project or any part thereof, shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental athority, Buyer shall have the rights specified in this Section with respect to the Net Proceeds of any insurance or condemnation award and shall apply such Net Proceeds to the prompt repair, restoration, modification or improvement of the Project by Buyer, but Buyer shall be obligated to continue to pay the Installment Payments due with respect to the Project, or Buyer shall pay the applicable Prepayment Price as set forth in Exhibit B. Section 8.2. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement of the Project, Buyer shall either: (i) complete the work and pay any cost in excess of the amount of the Net Proceeds, and Buyer agrees that if by reason of any such insufficiency of the Net Proceeds, Buyer shall make any payments pur- suant to the provisions of this Section 8.2, Buyer shall not be entitled to any reimbursement therefor from Seller nor shall Buyer be entitled to any diminution of the Installment Payments due with respect to the Project; or (ii) if available, exercise its option to purchase the Project in accordance with Article X, in which event the Net Proceeds shall be used toward this purpose. Section 8.3. Cooperation of Seller. Seller shall cooperate fully with Buyer at the expense of Buyer in filing any proof of loss with respect to any insurance policy covering the casualties des- cribed in Section 8.1 hereof and in the prosecution or defense of any prospective or pending condem- nation proceeding with respect to the Project or any part thereof and will, to the extent it may 86 lawfully do so, permit Buyer to litigate in any proceeding resulting therefrom -in the name of and on behalf of Seller. In no event will Seller voluntarily settle, or consent to the settlement of; any proceeding arising out of any insurance claim or any prospective or pending condemnation proceeding with respect to the Project or any part thereof without the written consent of Buyer. ARTICLE IX BUYER'S EQUIPMENT; WARRANTIES Section 9.1. Installation of Buyer's Equipment. Buyer may at any time and from time to time after the Completion Date, in its sole discretion and at its own expense, install items of movable machinery and equipment in or upon the Project, which items shall be identified by tags or other symbols affixed thereto as property of Buyer not included in the Project. All such items so idnetified shall remain the sole property of Buyer, in which Seller shall have no interest, and may be modified or removed by Buyer at any time provided that Buyer shall repair and restore any and all damage to the Project resulting from the installation, modification or removal of any such items. Nothing in this Agreement shall prevent Buyer from purchasing items to be installed pursuant to this Section under a conditional sale or lease with option to purchase contract, or subject to a vendor's lien or security interest or agreement, as security for the unpaid portion of the purchase-price thereof, provided that no such lien or security interest shall attach to any part of the Project. Section 9.2. Contractors' Warranties. Seller hereby assigns to Buyer for and during the Term of this Agreement, all of its interest in all Contractor's, subcontractors' and materials and equipment vendors' warranties and guarantees, express or implied, issued on or applicable to the Project, and Seller hereby authorizes Buyer to obtain the customary services furnished in connection with such war- ranties and guarantees at Buyer's expense. Buyer shall have the right to enforce all such warranties and guarantees directly against the Contractor and any such subcontractor or vendor. Section 9.3. Patent Infringement. Seller hereby assigns to Buyer for and during the Term of this Agreement all of its interest in patent indemnity protection provided by the Contractor or any subcon- tractor with respect to the Project or any portion thereof, Such assignment of patent indemnity protec- tion by Seller to Buyer shall constitute the entire liability of Seller for any patent infringement by the Project or any portion htereof furnished pursuant to this Agreement. Section 9.4. Disclaimer of Warranties. SELLER MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN OR FITNESS FOR THE USE OF THE PROJECT COMTEMPLATED BY THE BUYER. ARTICLE X PREPAYMENT AND DEFEASANCE Section 10.1. When Available. Buyer shall have the option to prepay the Installment Payments due with respect to the Project on any Payment Date for the then applicable Prepayment Price set forth in Exhibit B, but only if Buyer is not in default under this Agreement, and only in the manner provided in this Article. Section 10.2. Exercise of Option. Buyer shall give notice to Seller of its intention to exercise its option not less than thirty (30) days prior to the Payment Date on which the option is to be exer- cised, and shall deposit with Seller on the date of exercise an amount equal to all Installment Payments and any other amounts then due or past due and the applicable Prepayment Price as shown in Exhibit B, less any Net Proceeds to be applied to the amount to be so paid in accordance with Section`8.2. The closing shall be on the Payment Date on which the option is to be exercised at the office of Seller. Section 10.3. Release -of Seller's - Interest. Upon exercise by Buyer of its option, Buyer shall have no further "obligations under this Agreement and Seller and its officers shall take all actions necessary to authorize, execute and deliver to Buyer any and all documents necessary to vest in Buyer, all of Seller's right, title and interest in and to the Project, free and clear of all liens, leasehold interests and encumbrances, including, if necessary, a release of any and all liens or interests created under the provision of this Agreement and the Deed of Trust. Section 10.4. Defeasance. Buyer shall have the option to provide for the payment of the Install- ment Payments by the deposit with an escrow agent of cash or securities for which the full faith and credit of the United States are pledged for the payment of principal and interest or which are guaran- teed as to payment of principal and interest by an agency of the Untied States, in an amount sufficient (together with interest earnings thereon) to provide for payment of said Installment Payments to their respective due dates. Upon exercise by Buyer of this option, Seller shall release its interest in the Project as provided in Section 10.3. ARTICLE XI ±ASSIGNMENT, SUBLEASING, MORTGAGING' AND SELLING Section 11,1. Assignment by Seller. Seller shall not assign its obligations under this Agreement, and no purported assignment thereof shall be effective. From and after the Completion Date all of Seller's rights, title and /or interest in and to this Agreement, the Installment Payments and other amounts due hereunder and the Project may be assigned and reassigned in whole Or in part to one or more assignees or subassignees by Seller at any time, without the consent of Buyer; provided that no such assignment shall be effective as against Buyer unless and until the assignor shall have filed with Buyer a copy or written notice thereof idnetifying the assignee. Buyer shall pay all Installment Pay- ments due hereunder to ar at the direction of Seller or the assignee named in the most recent assign- ment or notice of assignment filed with Buyer. During the Agreement Term Buyer shall keep a complete and accurate record of all such assignments. The foregoing is a systme of registration with respect to this Agreement, established pursuant to the 87 1 1 State's Registered Public Obligations Act. Section 11.2. Assignment and Subleasing by Buyer. This Agreement may not be assigned or sub- leased by Buyer without the written consent of Seller. Section 11.3. Restriction on Mortgage or Sale of Project by Buyer. Buyer will not mortgage, sell assign, transfer or convey the Project orany portion thereof during the Term ofttis Agreement without the written consent of Seller. ARTICLE XII EVENTS OF DEFAULT AND REMEDIES Section 12.1. Events of Default Defined. The following shall be "events of default" under this Agreement and the terms "events of default" and "default" shall mean, whenever they are used in this Agreeemnt, with respect to the Project, any one or more of the following events: (i) Failure by Buyer to pay any Installment Payment or other payment required to be paid hereunder at the time specified herein and the continuation of said failure for a period of three (3) days after telephonic or telegraphic notice given by Seller that the payment referred to in such notice has not been received, such telephonic or telegraphic notice to be subsequently confirmed in writing, or after written notice. (ii) Failure by Buyer or Seller to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in clause (i) of this section, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to Buyer or Seller by the other, unless Buyer or Seller shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the parties agree that they will not unreasonably withhold their consent to an extension of such time of corrective action is instituted by the other party within the applicable period and diligently pursued until the default is corrected. (iii) The filing by Buyer or Seller of a voluntary petition in bankruptcy, or failure by Buyer or Seller promptly to lift any execution, garnishment or attachment of such consequence as would impair the ability of Buyer to carry out its obligations with respect to the Project, or adjudication of Buyer or Seller as a bankrupt, or assignment by Buyer or Seller for the benefit of creditors, or the entry by Buyer or Seller into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to Buyer or Seller in any proceedings instituted under the provisions of the Federal Bankruptcy Statute, as amended, or under any similar acts which may hereafter be enacted. The provisions of htis Section 12.1 and Section 12.2 are subject to the following limitation: if by reason of force majeure Seller or Buyer is unable in whole or in part to carry out its obligations under this Agreement with respect to the Project, other than the obligation of Buyer to pay Installment Payments with - respect - thereto which shall be paid when due notwithstanding the provisions of this paragraph, Seller or Buyer shall not be deemed in default during the continuance of such inability or during any other delays which are a direct consequence of the force majeure inability, and the time for completion of the Project by Seller shall be extended to cover such delays. The term "force majeure" as used herein shall mean, without limitation, the following: acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States of America or any of its departments, agencies or officials, or any civil or military authority; insurrections; riots; landslides; earthquakes; fires; storms; droughts; floods; explosions; breakage or accidnet to machinery, transmission pipes or canals; or any other cause or event not reasonably within the control of Seller or Buyer and not resulting from its negligence. Seller and Buyer agree, however, to remedy with all reasonable dispatch the cause or causes preventing them from carrying out their obligation under this Agreement; provided that the settlement of strikes, lockouts and other industrial disturbnaces shall be entirely within the discre- tion of Seller or Buyer and they shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in their judgment unfavorable to them. Section 12.2. Remedies on Default. Whenever any event of default by Buyer referred to in Sectio 12,1, clauses (i) to (iii) hereof shall have happened and be continuing with respect to the Project, Seller shall have the right, at its option and without any furhter demend or notice, to take one or any combination of the following remedial steps: (i) With respect to events of default referred to in Section 12.1, clause (i) only, take such action at law or in equity as may appear necessary or desirable to collect the Installment Payments or other amounts coming due hereunder during the occupancy of the Project by Buyer; or (ii) With respect to events of default referred to in Seciton 12.1, clauses (i) to (iii), take such actions as may be necessary under State law to foreclose the Deed of Trust given Buyer pursuant to Section 2.6, and any security interest in the Equipment given by Buyer prusuant to Section 13.2; or (iii) With respect to events of default referred to in Section 12.1, clauses (ii) through (iii) take whatever action at law or in equity may appear necessary or desirable to enforce specific performance and observance of any obligation, agreement or covenant of Buyer under this Agreement. In no event shall Seller be entitled to a deficiency judgment against Buyer for any shortfall between the amount realized by taking such remedies and any Installment Payments to come due hereunder after Buyer has returned possession of the Project to Seller in accordance with Section 12.3. In the event of a default by Seller hereunder Buyer shall have all remedies commonly available under North Carolina 88 law, provided that after the Completion Date if Seller has assigned its right to receive the Install- ment Payments to a third party, Buyer shall not have the right to terminate this Agreement on account; of such default, but instead shall be limited to -the rights of specific enforcement or money damages, or both. Section 12.3. Return of Project. Upon the expiration or termination of this Agreement prior to the payment of all Installment Payments in accordance with Exhibit B, Buyer shall - deliver possession of the Project to Seller in the condition, repair, appearance and working order- required -in Section7:1. Section 12.4. Delay; Notice. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be contrued to be a waiver thereof; but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle any party to exercise any remedy reserved to it in this Agreement it shall not be necessary" to give any notice, other than such notice as may be required in this Agreement, Seciton 12.5. Remedies Exclusive;' Waivers.! The remedies herein conferred upon or reserved to the parties to this Agreement are intended to be exclusive, but no delay Or' omission to exercise any right or power accruing upon.any default shall impair any such right or power or shall -be construed to be a waiver thereof; but any such right and power maybe exercised from time to time and as often as may be deemed expedient. Section 12.6. No Additional Waiver Implied by :One Waiver. In the event any - agreement contained in this Agreement 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. Section 12.7. - Late Charges. Whenever any event of default referred :to in Section 12,1, clause ( ) hereof shall have happened and be continuing with respect -to the Project, Seller shall have the right, at its option and without any furhter demand or notice, to require a -late payment charge equal to twelve percnet (12 %) per-annum of the delinquent Installment Payment, and Buyer shall be obligated to pay the same immediately upon receipt of Seller's written invoice therefor; proyided,'however, that this Section 12.7 shall not b applicable if or to the extent that the application thereof would affect the validity of any portion of this Agreement. ARTICLE XIII TITLE Section 13.1. Title. Prior to the Completion Date, legal title to the Project and any and all repairs, replacements, substitutions and modification§ to it shall be in Seller. From and after the Completion Date, legal title to the Project and -,any and all repairs, repalcements, substitutions and modifications to it shall be in Buyer, subject to Seller's rights under the Deed of Trust described in Section 3.6 and the security interest described in Section 13;2. Upon termination of this Agreement for either of the reasons specified in Section 5.2, Clauses (a) and (c), Seller's interest in the Project under the Deed of Trust and this Agreement shall terminate, and Seller shall execute and deliv- er to Buyer such documents as Buyer may request to evidnece the termination of Seller's interest in the Project. Section 13.2. Security Interest. From and after the Completion Date Seller shall have and retain a security interest under the Uniform Commercial Code in the Equipment, the proceeds thereof and all repairs, replacements, substitutions and modifications thereto or therof, in order to secure Buyer's payment of all Installment Payments due during the Term of-this Agreement and the performance of all other obligations - herein to be performed by Buyer. Buyer will join with- Seller in excuting such - financing statements or other documents and will perform such acts as Seller may request to establish and maintain a valid security interest in the Equipment. If requested by Seller; Buyer shall conspi- cuously mark the Equipment with appropriate lettering, labels -or -tags,- and maintain such markings during the Term of this. Agreement, so as clearly to disclose Seller's security interest in the Equipmen In addition, on the Completion Date Buyer will execute and deliver to Seller the Deed of Trust. Section 13,3.' Personal Property. All portions of the Equipment, except those which are incorpor- ated by Seller in the construciton and become part of the Building, shall at all times be and remain personal property notwithstanding that after the Compaletion Date the Equipment may become in any manner affixed or attached to or embedded in or permanently rested upon real property or any building thereon or attached in any mannaer to what is permanent by means of cement, plaster, neils, bolts, screws or otherwise. ARTICLE XIV ADMINISTRATIVE PROVISIONS Section 14.1. Notices. All notices, certificates or other communications hereunder shall be suffi- ciently given and shall be deemed given on the earlier of (i) delivery or,(ii) five days following deposited in the United States mail in certified or registered from with postage fully prepaid to,the addresses shown in the first paragraph hereof; Seller and Buyer, by -notice given hereunder, may desig- nate different addresses to which subsequent notices, certificates or other communications will be sent. Section 14.2. Binding - Effect. This Agreement shall inure to-the benefit of and shall be binding upon Seller and Buyer and their respective successorsrand assigns. Section 14.3. Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jursidiction, such holding shall not invalidate or render unenforceable any other provision hereof;- Section 14.4. Amendments; .Changes and Modifications. This Agreement may be amended or any of its terms modified only by written amendment authorized and executed by Buyer and Seller; provided that 89 no such amendment other than change orders affecting work on the Building or the Equipment shall be effective without the consent of any person or entity to whom the rights of Seller to receive Install- ment Payments due hereunder has been assigned. Section 14.5. Further Assurances and Corrective Instruments. Seller and Buyer agree that they will, if necessary, execute, acknowledge and deliver, or cause to be executed, acknowledged and deliv- ered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project hereby sold or intended so to be or for carrying out the expressed intention of this Agreement. Section 14.6. Execution in Counterparts. This Agreeemnt may be simultaneously executed in three counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 14.7. Applicable Law; Enforcement. This Agreement and the Deed of Trust shall be govern- ed by and construed in accordnace with the laws of the State, and shall be enforceable only in State or federal courts located in the State. Section 14.8. Seller and Buyer Representatives. Whenever under the provisions of this Agreement the approval of Seller or Buyer is required, or Seller or Buyer is required to take some action at the request of the other, such approval of such request shall be fiven for Seller by a Seller Representa- tive and for Buyer by a Buyer Representative, and any party hereto shall be authorized to rely upon any such approval or request. Section 14.9. Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intet of any provisions or Sections of this Agreement. IN WITNESS WHEREOF, Seller has caused this Agreement to be executed in its corporate name by its duly authorized officer, and Buyer has caused this Agreement to be executed in its name by its duly authorized officer, as of the date first above written. DAVIDSON AND JONES DEVELOPMENT COMPANY, Seller HARNETT COUNTY, NORTH CAROLINA, Buyer EXHIBIT A DESCRIPTION OF LAND, BUILDING AND EQUIPMENT The legal description of the Lnad is as follows: The Building is des -ribed generally as follows: The Equipment is described as follows: EXHIBIT B INSTALLMENT PAYMENT SCHEDULE The Project Cost on which this schedule of Installment Payments is based is $ , and the average annual rate of interest on which this schedule is based %. Payment Payment Total Number Date Payment 1 Completion Date 2 through 42 * Amount due after payment of Installment Payment due on same date. The above date and amounts of Installment Payments are hereby approved. Principal Interest Component Component -0- Prepayment Price* N.A. EXHIBIT C COMPLETION AND ACCEPTANCE CERTIFICATE The undersigned, being a duly appointed Buyer Representative, a duly appointed Seller Representa- tive, the Contractor and the Project Architect, respectively, under the Installment Purchase Agreement dated as of July 10, 1986, by and between Davidson and Jones Development Company (Seller), and Harnett County, North Carolina (Buyer), hereby certify on behalf of Seller and Buyer with respect to the Project to be acquired, constructed and installed under said Agreement, that said Project has been acquired, constructed and installed pursuant to and in accordance with said Agreement and the Plans and Specifications and has been accepted and is now available for occupancy and use by Buyer. Dated , 198 HARNETT COUNTY, NORTH CAROLINA DAVIDSON AND JONES DEVELOPMENT COMPANY DAVIDSON AND JONES CONSTRUCTION COMPANY WILLIAMS AND ASSOCIATES, ARCHITECTS /ENGINEERS 90 EXHIBIT D CERTIFICATE OF BUYER I, the undersigned, hereby certify that I am the duly qualified and acting of Harnett County (Buyer); and, with respect to .the Installment Purchase Agreement, dated as of July 10, 1986 (the Agreeemnt), by and between Buyer adn Davidson and Jones Development Company (Seller), that: 1. Seller and Buyer have computed the Installment Payments provided for in Exhibit B to the Agreement as provided in Section 6.2 of the Agreement and have completed and approved Exhibit B to the Agreement. 2. Buyer has sufficient moneys available to pay all such Installment Payments coming due during the current Fiscal Year (as that term is defined in the Agreement) of Buyer, such moneys have been properly budgeted and appropriated for this purpose in accordance with State of North Carolina (the State) law, and such moneys will be applied in payment of all Installment Payments due and payable during such current Fiscal Year. 3. Buyer has obtained from a reputable insurance company qualified to do business in the State such policies of insurance as are required by the Agreement. A certificate or'certi£icates evidencing such insurance is /are attached hereto. 4. There is no litigation, action, suit or proceeding pending or before any court, administrative agency, arbitrator or governmental body, that challenges the organization or existence of Buyer; the authority of its officers; the proper authorization, approval and execution of the Agreement and other documents contemplated thereby; the appropriation of moneys to make such Installment Payments under the Agreement for Buyer's current Fiscal Year; or the ability of Buyer otherwise to perform its obligations under the Agreeeent and the other documents and the.transactions contemplated thereby. 5. Buyer is (exempt from) (subject to)* sales and /or use taxes with respect to the Project and the Installment Payments. * Strike inapplicable term 6. During the Term of the Agreement the Project will be used by Buyer to perform essential govern- mental functions relating to law enforcement. Dated , 198 (Buyer) (Seller) (Underwriter) HARNETT COUNTY, NORTH CAROLINA (Attach insurance certificates) EXHIBIT E OPINION OF COUNSEL Re: Installment Purchase Agreement dated as of July 10, 1986, by and between Davidson and Jones Development Company (Seller) and Harnett County, North Carolina (Buyer) Gentlemen: We have acted as counsel to Buyer with respect to the Installment Purchase Agreement described above (the Agreement) and various related agreements and documents, inlcuding a Sale Agreement dated July 10, 1986 between Buyer and Seller, and a Warrnaty Deed executed by Buyer to Seller; and in this capacity we have reviewed duplicate originals of such agreements and documents. We also have examined various ohter documents, including a form of Deed of Trust to be dated as of the date of its execution (the Deed of Trust), to be executed by Buyer to Seller, a Uniform Commercial Code Financing Statement (UCC -1) executed by Buyer as debtor and Seller as secured party, evidencing Seller's interest in the Equipment (as defined in the Agreement), and Exhibits B, C and D to the Agreement as completed and executed by Buyer. Based upon the examination of these and such other documents and records of Buyer as we deem rele- vant, it is our opinion that: 1, Buyer is a public corporation and political subdivision of the State of North Carolina (the State), duly organized, existing and operating under the Constitution and laws of the State. 2. Buyer is authorized and has power under State law to enter into the Installment Purchase Agree- ment and the Sale Agreement, and to_ execute and deliver the Warranty Deed; the Deed of Trust, and the Financing Statement, all described above and to carry out its obligations thereunder and the Transac"-` tions contemplated thereby. 91 3. The Agreement, the Sale Agreement, the Warranty Deed and the other documents described above have been duly authorized and approved, by and on behalf of Buyer; the Installment Purchase Agreement, the Sale Agreement and the Warranty Deed have been duly executed and delivered by Buyer and, assuming due authorization, execution and delivery by the other parties thereto, are valid and binding contracts of Buyer enforceable in accordance with their terms, except to the extent such enforceability is limite by State and Federal laws affecting remedies and by bankruptcy, reorganiaztion or other laws of general application relating to or affecting the enforcement of creditors' rights. 4. The authorization, approval and execution of the Installment Sale Agreement, the Sale Agreemen and the Warranty Deed and all other proceedings of Buyer relating to the transactions contemplated thereby have been performed in accordance with all applicable laws, rules and regulations of the State. 5. The execution of the Installment Sale Agreement and the appropriation of moneys to pay the Installment Payments coming due thereunder, does not and will not result in the violation of any consti- tutional, statutory or other limitation relating to the manner, form or amount of indebtedness which may be incurred by Buyer. 6. There is no litigation, action, suit or proceeding threatened or pending before any court, administrative agency, arbitrator or governmental body, that challenges the organization or existence of Buyer; the authority of its officers; the proper authorization, approval and execution of the Installment Sale Agreement, the Sale Agreement, the Warranty Deed or the Deed of Trust and the other documents described above; or the ability of Buyer otherwise to perform its obligations under the Installment Sale Agreement, the Sale Agreement, the Warranty Deed and the Deed of Trust and the trans- actions contemplated thereby. Dated , 1986 Very truly yours, EXHIBIT F Mr. Albert F. Barnes Vice President Kenny Information Systems 55 Broad Street New York, New York 10004 Re: Interest Rate Determination Agreement, Harnett County, North Carolina Dear Mr. Barnes: The Board of Commissioners of Harnett County, North Carolina would like to employ Kenny Informatio Systems to establish an interest rate scale for an Installment Purchase Agreement dated as of July 10, 1986 (the Agreement), between Davidson and Jones Development Company as Seller and the County as Buyer. The proposed form of the Agreement is enclosed. Under the Agreement the Seller will agree to acquire, construct, furnish and install a Project which is expected to be completed between April 1 and June 30, 1987. Upon completion the Project Cost will be finally determined, and certain install- ment payments to be made by the Buyer are to be computed, based upon such cost and the interest rate scale to be provided by you. Prior to the Completion Date the Seller is required to give notice to Buyer and you of the expected Project Cost and Completion Date. I refer you to Section 3.5 and 6.2 Of the Agreement. After receipt of such notice, three business days in advance of the Completion Date specified in the notice, we wish to have you compute and furnish to us and Prudential -Bache Securities Inc. of New York, an interest rate scale for the Agreement, together with an explanation of the method of computation. We also wish to have you compute and furnish to us and Prudnetial -Bache a preliminary, representative interest rate scale for the Agreement, together with an explanation of the method of computation on July 7, 1986. We understand that the interest rate scale will comprise an interest rate for each of the Install- ment Payments due under the Agreement which include principal, the dates of such payments being expecte to be each June 30 and December 30, commencing December 30, 1987 and ending on June 30, 1997. We fur- ther understand and expect that the scale will be based upon interest rates applicable to obligations of similar quality and average maturity and market conditions and trends in effect at the time. For this service we understand that you will charge us a fee of $3,000 payable upon your accept- ance of this offer of employment as specified in the following paragraph. If you agree to perform this service for the County, please execute and return to us the duplicate of this letter which is enclosed in the space provided below. Very truly yours, Chairman, Board of Commissioners Kenny Information Systmes hereby agrees to perform the services described in this letter for Harnett County, North Carolina, Albert F. Barnes Vice President 92 ADJOURNMENT There being no further business, the Harnett County Board of Commissioners meeting duly adjourned at 1:29 p.m. airman C00,i a. fi t Secretary °)/Th Etkev...ezy Clerk 1