BC 1988 05 09 - Laserfiche WebLink

Home Browse Search

356 Subject to a 3% premium for years 6 and 7; Subject to a 2% premium for years 8 and 9; subject to a 1% premium for years 10 through 12. There is no prepayment premium thereafter. C. Same as B above. Determination of taxability - In the event that any court of competent jurisdiction or counsel acceptable to the Bank deter- mines that the interest on the Bond is includable in the gross income of the Bank for North Carolina income tax purposes for any reason, the interest rate on the loan from and after the date of the event giving rise to the loss of such exemption from taxation (the inclusion date) and for such period of time thereafter as the bank shall have held the loan subsequent to the inclusion date shall be renegotiated by the Issuer and the bank (the taxable rate). The borrower will be obligated for the payment of interest at the taxable rate (subject to credit for any interest accrued and paid subsequent to the inclusion date at the selected rate) for such period as the Bank shall have held the loan subsequent to the inclusion date, not withstanding the fact that the Bank may not be a holder of the loan on the date of the determination of taxability. The Bond document shall provide for the payment to the bank of all interest, penalties, and other additions to tax payable by the Bank, as a result of a determination of taxability. In addition, the interest from these Bonds will be exempt from all North Carolina Intangible taxes. Documentation - Ail documentation representing the issuance of the Bond shall be prepared or reviewed by counsel acceptable to the Bank and such documentation shall be in the form accessible to our legal counsel. At the closing of the Bond Issue there shall be delivered to the Bank, together with a duplicate original of each of the Bond documents, an executed counter part and opinion of counsel, addressed to the Bank, which shall provide, among other things, that the Bond has been duly authorized, executed and delivered, and the interest thereon is exempt from taxation in the North Carolina Revenue Tax Laws. e This documentation shall further include a Bond purchase agreement that shall contain covenants mutually agreed to by the Issuer and the Bank. Term of Commitment - The interest rate commitment made herein shall expire on May 9, 1988 unless accepted by the Issuer and further that the firm commitment will terminate if the Bond proceeds are not disbursed by July 7, 1988. Thereafter, neither the Bank nor the Issuer have any further obligation to the other unless the legal fees referred to above shall not have been paid, which fees shall be continuing obligations until paid. Fees - Ail legal fees incident to this transaction will be paid by the Issuer which shall include Bank counsel, legal fees and any other fees levied on the Bank by Bond Counsel. In addition, the Issuer will pay to the Bank an amount of $2 per thousand on the principal amount of the Bond. We appreciate the opportunity to provide a proposal on this important matter. Please indicate your acceptance of this commitment by signing in the space provided and returning the enclosed copy to my attention. Sincerely, /s/ Michael D. Owens Michael D. Owens Assistant Vice President Corporate Lending Officer ACCEPTED THIS 9TH DAY OF MAY, 1988. WATER AND SEWER DISTRICT OF CABARRUS COUNTY /s/ James W. Lentz (SEAL) Chairman, Board of Commissioners Water and Sewer District of Cabarrus County Please indicate Rate Option: B