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HomeMy WebLinkAboutAgenda 05-02-2019 - 6-a - Adoption of the Final Financing Resolution Authorizing the Issuance of $16,950,000 in Installment Purchase Financing for Various Capital Investment Plan Projects 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 2, 2019 Action Agenda Item No. 6-a SUBJECT: Adoption of the Final Financing Resolution Authorizing the Issuance of $16,950,000 in Installment Purchase Financing for Various Capital Investment Plan Projects DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: Attachment 1. Resolution Approving Gary Donaldson, (919) 245-2453 Financing Terms and Paul Laughton, (919) 245-2152 Documents for 2019 Robert Jessup, (919) 933-9891 Installment Financing Attachment 2. Deed of Trust Attachment 3. Trust Agreement Attachment 4. Bond Purchase Agreement Attachment 5. PowerPoint PURPOSE: To adopt the final financing resolution authorizing the issuance of approximately $16,950,000 in installment financing to finance capital investment projects and equipment for the fiscal year, and including amounts to pay transaction costs. BACKGROUND: At the March 19, 2019 meeting, the Board of County Commissioners received preliminary information of capital projects and equipment financing for the year. At that meeting, the Board made a preliminary determination to finance costs of these projects and equipment by the use of an installment financing, as authorized under Section 160A-20 of the North Carolina General Statutes. The financing will also include amounts to pay transaction costs. The Statutes require that the County conduct a public hearing on the proposed financing and refinancing contracts. The County conducted a public hearing at the March 19, 2019 meeting, and adopted the resolution supporting the application to the Local Government Commission (LGC) for approval of the financing. County staff has been in contact with the LGC staff, and staff expects no issues with receiving LGC approval. If the Board adopts the final financial resolution authorizing final approval to the financing at tonight's meeting, staff expects the LGC to approve the financing plan at the LGC's meeting on May 7, 2019. Under the current schedule, staff expects to set the final interest rates and other terms of the financing in April 2016, and to close on the financing the week of May 27th. It is requested that the Board approve a financing amount not to exceed $16,950,000 and a maximum interest rate of 4.00%. 2 The 55-page Draft Preliminary Official Statement is available upon request from the County's Finance and Administrative Services staff. FINANCIAL IMPACT: There will be a financial impact in proceeding with the financing. At current rates, preliminary estimates of maximum debt service applicable to the capital investment projects and equipment financing would require the highest debt service payment of $1.7 Million in FY 2021. A portion of this debt financing is related to projects where the debt service payments will be paid from Article 46 Sales Tax and Solid Waste Program Fees. RECOMMENDATION(S): The Manager recommends that the Board approve the resolution authorizing the steps to proceed with the financing of the stated capital projects and equipment. 3 RES-2019-026 Attachment 1 Resolution providing final approval of terms and documents for Spring 2019 installment financing WHEREAS- The Board of Commissioners has previously determined to carry out the acquisition and construction of various public improvements, as identified in the County's capital improvement plan, and in particular the projects shown on Exhibit A. The Board has made a tentative determination to carry out the financing by using an installment financing, as authorized under Section 160A-20 of the North Carolina General Statutes. This financing plan also includes the use of limited obligation bonds, which represent interests in the installment payments to be made by the County that can be sold to investors. The County staff has made available to the Board the draft documents listed on Exhibit B (the "Documents"), and a draft of an official statement designed to provide information about the County and the financing to prospective investors in the bonds. These items relate to the County's carrying out the financing plan. This resolution provides the County Board's final approval of the financing terms and the substantially final financing documents. BE IT THEREFORE RESOLVED by the Board of Commissioners of Orange County, North Carolina, as follows: 1. Determination to Proceed with Financing -- The Board confirms its decision to carry out the proposed installment financing as described above. Under the financing plan, the County will receive funds from the sale of the limited obligation bonds to carry out the projects. The County will repay the funds over time, with interest. The County will secure its repayment obligation by granting a mortgage-like interest in some or all of the following facilities: (a) the County's Government Services Annex at 208 S. Cameron St. in Hillsborough, along with the 4 County's Link Center and the District Attorney's office building; (b) the County's Emergency Operations Center on Meadowlands Drive in Hillsborough, (c) the County's Visitors Center on Franklin St. in Chapel Hill, and (d) the proposed site of the new Northern County Campus. 2. Approval of Documents; Direction to Execute Documents -- The Board approves the forms of the Documents submitted to this meeting. The Board authorizes the Chair and the County Manager, or either of them, to execute and deliver those Documents to which the County is a party. The Documents in their respective final forms must be in substantially the forms presented, with changes as the Chair or the County Manager may approve. The execution and delivery of any Document by an authorized County officer will be conclusive evidence of that officer's approval of any changes. The Documents in final form, however, must provide for the principal amount of limited obligation bonds to not exceed $16,950,000, an annual true interest cost of the financing not to exceed 4.00% and a financing term not to extend beyond December 31, 2039. The amount financed under the Documents may include amounts to pay financing expenses and other necessary and incidental costs. 3. Sale of Bonds; Approval of Official Statement - The Board appoints FTN Financial Capital Markets, as senior manager, and Robert W. Baird & Co. Incorporated, as co-manager, to underwrite a public offering of the proposed limited obligation bonds. The Board approves the draft official statement submitted to this meeting as the form of the preliminary official statement pursuant to which the underwriters will offer the bonds for sale. The preliminary official statement as distributed to prospective investors must be in substantially the form presented, with such changes as the Finance Officer may approve. The Board directs the Finance Officer, after the sale of the bonds, to complete and otherwise prepare the preliminary official statement as an official statement in final form. The Board authorizes the use of the preliminary official statement and the final official statement (collectively, the "Official Statement") by the underwriters in connection with the sale of the bonds. 5 The Board acknowledges that it is the County's responsibility, and ultimately the Board's responsibility, to ensure that the Official Statement in its final form neither contains an untrue statement of a material fact nor omits to state a material fact required to be included therein for the purpose for which such Official Statement is to be used or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 4. Officers to Complete Closing - The Board authorizes the County Manager, the Finance Officer and all other County officers and employees to take all proper steps to complete the financing in accordance with the terms of this resolution. The Board authorizes the County Manager to hold executed copies of all financing documents authorized by this resolution in escrow on the County's behalf until the conditions for their delivery have been completed to her satisfaction, and then to release the executed documents for delivery to the appropriate persons or organizations. Without limiting the generality of the previous paragraphs, the Board specifically authorizes the County Manager (a) to approve and enter into, on behalf of the County, any additional agreements appropriate to carry out the financing plan contemplated by this resolution, and (b) to approve changes to any documents previously signed by County officers or employees, provided that the changes do not substantially alter the intent from that expressed in the form originally signed. The County Manager's authorization of the release of any document for delivery will constitute conclusive evidence of her approval of any changes. In addition, the County Manager and the Finance Officer are authorized to take all appropriate steps for the efficient and convenient carrying out of the County's on- going responsibilities with respect to the financing. This authorization includes, without limitation, contracting with third parties for reports and calculations that may be required under the Documents, this resolution or otherwise with respect to the bonds. 5. Other Financing Participants - Sanford Holshouser LLP will serve as the County's bond counsel. Davenport & Company LLC will serve as the County's financial adviser. The Bank of New York Mellon Trust Company, N.A., will serve as 6 Trustee under the Supplemental Trust Agreement referenced in Exhibit B. 6. Miscellaneous Provisions - The Board authorizes all County officers and employees to take all further action as they may consider desirable to carry out the purposes of this resolution. In particular, the Board directs the Clerk to this Board to apply the County's seal to the final form Documents, and to attest to the application of the seal. The Board ratifies all prior actions of County officers and employees to this end. Upon the unavailability or refusal to act of the County Manager, the Chair or the Finance Officer, any other of those officers may assume any responsibility or carry out any function assigned in this resolution. In addition, the Vice Chair or any Deputy or Assistant Clerk may carry out or exercise any rights or responsibilities assigned in this resolution to the Chair or the Clerk. The Board repeals all other Board proceedings, or parts of proceedings, in conflict with this resolution, to the extent of the conflict. This resolution takes effect immediately. 7 Exhibit A - list of projects to be financed with estimated amounts Component Estimated Cost IT Infrastructure and Governance Council Initiatives $ 455,410 Sheriff- Body Cameras 300,000 Parks and Recreation Facility Renovations 100,000 Vehicle Replacements 689,328 Solid Waste System- Trucks 984,000 Communication Systems - Portable Radios 505,000 Emergency Services (Backup Center Equipment) 969,000 Facility Improvements (Accessibility/ Security/ HVAC) 70,000 Link Center Improvements 483,219 IT Broadband Connectivity 210,000 Land/ Easements (Conservation & Mountains to Sea Trail) 370,000 Schools Facilities Improvements 2,681,499 School Capital 3,000,000 Historic Rogers Road Neighborhood Community Center/ Infrastructure 1263225 Meadowlands Emergency Center Remediation 2,153,20� Government Services Annex Remediation 879,160 Battle Courtroom Remediation 217,000 District Attorney building Remediation 41,143 Solid waste system — High Rock Convenience Center Construction 571,000 Hillsborough EDD — utility projects 1,300,000 Total Projects $ 16,105,193 The County also expects to use financing proceeds to pay financing costs. 8 Exhibit B -- Draft Documents (a) A draft dated April 16, 2019, of a Supplemental Trust Agreement to be dated on or about May 1, 2019, between the County and The Bank of New York Mellon Trust Company, N.A. (the "Trustee"), providing for the advance of funds to the County, for the issuance of limited obligation bonds, for the County's obligation to repay the amounts advanced, and for the County's responsibilities for the use and care of the collateral (b) A draft dated April 16, 2019, of a Deed of Trust Supplement to be dated on or about May 1, 2019, from the County to a deed of trust trustee for the Trustee's benefit, providing for a security interest in property to secure the County's obligations under the Bonds and the other financing documents. (c) A draft of a Bond Purchase Agreement to be dated on or about May 15, 2019, providing for the underwriters' obligation to purchase the bonds. The final form of this Agreement will set out the final principal amount, principal payment schedule and interest rates for the bonds, and the other terms and conditions for the underwriters' obligation to purchase the bonds. 9 Attachment 2 s*h draft of 46116 Prepared by and return after recording to: Robert M. Jessup Jr. Sanford Holshouser LLP 209 Lloyd St., Suite 350 Carrboro, NC 27510 PINs 9874-15-3612 9864-39-2344, 9864-39-8253, 9864-39-7758 9874-80-2738 9788-15-1996 Brief description: Link Center Building at 200 S. Cameron St., Government Services Annex at 208 S. Cameron St. and District Attorney's office building at 144 E. Margaret Lane, all in Hillsborough Future North Campus Site off Highway 70 Emergency Operations Center on Meadowlands Drive in Hillsborough Visitors Center on Franklin St. in Chapel Hill (supplements RB 6486, Page 413) STATE OF NORTH CAROLINA ) The collateral is or includes fixtures. ORANGE COUNTY ) This instrument secures future advances. DEED OF TRUST SUPPLEMENT 10 THIS DEED OF TRUST SUPPLEMENT (this "Supplement") is dated as of May 1, 2019, and is granted by ORANGE COUNTY, NORTH CAROLINA, a political subdivision of the State of North Carolina (the "County"), to Amy K. Johnson, as trustee (the "Deed of Trust Trustee"), for the benefit of THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,AS TRUSTEE ("BNY-M"). RECITALS: The County is issuing its $ Limited Obligation Bonds, Series 2019 (the "2019 Bonds"), under a First Supplemental Trust Agreement dated as of May 1, 2019 (the "2019 Agreement"), between the County and BNY-M, as trustee. The County is issuing the 2019 Bonds to provide funds, to be used together with other available funds, to acquire, construct, equip and otherwise improve a variety of County facilities and assets, as well as to pay financing costs and other related costs. The 2019 Agreement supplements a Trust Agreement dated as of June 1, 2018 (the "2018 Agreement"), between the County and BNY-M, as trustee. Under the 2018 Agreement, the County issued its $7,S10,000 Limited Obligation Bonds, Series 2018 (the "2018 Bonds"), and secured its repayment obligation with respect to the 2018 Bonds by granting a security interest in the Mortgaged Property, as defined below. The parties have now agreed that the Mortgaged Property will also secure the County's repayment obligations with respect to the 2019 Bonds as provided in the 2019 Agreement. Accordingly, this Supplement supplements the Deed of Trust and Security Agreement granted by the County for the benefit of BNY-M dated as of June 1, 2018 (the "2018 Deed of Trust"), and recorded at RB 6486, Page 413, Orange County Registry. The Mortgaged Property includes the real property and facilities described in Exhibit A. The County is the record owner of that real property. The County executes and delivers this Supplement to secure current advances under the 2019 Agreement of$ _as well as outstanding advances under 2 11 the 2018 Agreement of approximately $ , and potential future advances up to a total maximum principal amount of $200,000,000, all as described and pursuant to the 2018 Deed of Trust. The time during which such future advances may be made is 30 years from June 1, 2018. The current scheduled date for final repayment of amounts secured under this Supplement and the 2019 Deed of Trust is NOW, THEREFORE, (1) in consideration of the execution and delivery of the 2019 Bonds and the 2019 Agreement as a supplement to the 2018 Agreement, and other good and valuable consideration, the receipt and sufficiency of which the County acknowledges, (2) to secure the County's performance of all its covenants under this Supplement, the 2018 Deed of Trust, the 2018 Agreement, the 2019 Agreement, the 2018 Bonds and the 2019 Bonds (together, the "Loan Documents"), and (3) to charge the Mortgaged Property, as defined below, with that payment and performance, the County sells, grants and conveys to the Deed of Trust Trustee, her successors and assigns forever, in trust, with power of sale, the "Mortgaged Property," as defined in the 2018 Deed of Trust, which includes the property described in Exhibit A. TO HAVE AND TO HOLD the Mortgaged Property with all privileges and appurtenances belonging thereunto, to the Deed of Trust Trustee, her successors and assigns forever, upon the trusts, terms and conditions and for the purposes set out below, in fee simple in trust; SUBJECT, HOWEVER, to the encumbrances described in Exhibit B; BUT THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST: if the County pays its "Obligations," as defined in Section 1-1 below, in full and in accordance with the Loan Documents, and the County complies with all the terms, covenants and conditions of the Loan Documents, this conveyance will be null and 3 12 void and will be canceled of record at the County's request and cost, and title will revert as provided by law; BUT IF, HOWEVER, THERE OCCURS AN EVENT OF DEFAULT UNDER THE LOAN DOCUMENTS, then BNY-M will have the remedies provided for in this Supplement and the 2018 Deed of Trust (together, the "Modified Deed of Trust"), including directing the Deed of Trust Trustee to sell the Mortgaged Property under power of sale. The County covenants with the Deed of Trust Trustee and BNY-M that the County is seized of and has the right to convey the Mortgaged Property in fee simple, that the Mortgaged Property is free and clear of all liens and encumbrances other than Permitted Encumbrances, as defined in the 2018 Agreement and the 2019 Agreement, that title to the Mortgaged Property is marketable, and that the County will forever warrant and defend title to the Mortgaged Property (subject to the Permitted Encumbrances) against the claims of all persons. THE COUNTY COVENANTS AND AGREES with the Deed of Trust Trustee and BNY-M (and their respective heirs, successors and assigns), in consideration of the foregoing, as follows: 1. Security Provided 1-1 Security for Payment and Performance. The Modified Deed of Trust secures the County's payment, as and when the same become due and payable, of all amounts payable by the County under the Loan Documents (the "Obligations") and the County's timely compliance with all terms, covenants and conditions of (a) the Loan Documents and (b) any Additional Bonds, as defined in and as may be executed and delivered pursuant to the 2018 Agreement. 1-2 Present and Future Advances. This Deed of Trust is executed to secure all the County's present and future obligations to the Trustee related to the Mortgaged Property as described in and pursuant to the 2018 Deed of Trust. The total amount, including present and future obligations, that may be secured by this Deed of Trust at any one time is $200,000,000. The period within which future obligations may be incurred is 30 years from June 1, 2018. 4 13 1-3 Waiver of Rights To Release. The County waives and surrenders its rights under Section 1-6(c) of the 2018 Deed of Trust to release buildings and related property without otherwise complying with the requirements of Section 1-6(b) of the 2018 Deed of Trust 1-4 2018 Deed of Trust Otherwise Confirmed. Except as provided by this Supplement, the County ratifies, approves and confirms the terms of the 2018 Deed of Trust. 1-5 County's Obligation Limited. Notwithstanding any other provision of the Loan Documents, the parties intend that this transaction will comply with North Carolina General Statutes Section 160A-20. No deficiency judgment may be entered against the County in violation of Section 160A-20. No provision of this Supplement should be construed or interpreted as creating a pledge of the County's faith and credit within the meaning of any constitutional debt limitation. No provision of this Supplement should be construed or interpreted as an illegal delegation of governmental powers, nor as an improper donation or lending of the County's credit within the meaning of the North Carolina constitution. The County's taxing power is not and may not be pledged, directly or indirectly contingently, to secure any moneys due under this Supplement. Nothing in this Section is intended to impair or prohibit foreclosure under the Modified Deed of Trust if the Obligations are not paid when due or otherwise upon the occurrence of an Event of Default under the Loan Documents. No provision of this Supplement restricts the County's future issuance of any of its bonds or other obligations payable from any class or source of the County's moneys (except to the extent the Loan Documents restrict the incurrence of additional obligations secured by the Mortgaged Property). To the extent of any conflict between this Section and any other provision of this Supplement, this Section takes priority. 2. Miscellaneous 2-1 Notices. s 14 (a) Any communication provided for in this Supplement must be in writing (not to include facsimile transmission or electronic mail). (b) Any communication under this Supplement will be deemed given on the delivery date shown on a United States Postal Service certified mail receipt, or a delivery receipt (or similar evidence) from a national commercial package delivery service, if addressed as follows: (i) if to the County, to Orange County Manager, Re: Notice under 2019 LOBS Deed of Trust, Post Office Box 8181, Hillsborough, NC 27278 (ii) if to the Deed of Trust Trustee, to Deed of Trust Trustee, c/o The Bank of New York Mellon Trust Company, N.A., Re: Notice for 2019 Financing for Orange County, 10161 Centurion Parkway North, Jacksonville, FL 32256 (iv) if to BNY-M, to The Bank of New York Mellon Trust Company, N.A., Re: Notice for 2019 Financing for Orange County, 10161 Centurion Parkway North, Jacksonville, FL 32256 (c) Any addressee may designate additional or different addresses for communications by notice given under this Section to each of the others. The County must send copies of any notices it sends to the Deed of Trust Trustee also to BNY-M. 2-2 Definitions. All capitalized terms used in this Supplement and not otherwise defined have the meanings ascribed to them otherwise in the Loan Documents. 2-3 Governing Law; Forum. The County, BNY-M and the Deed of Trust Trustee intend that North Carolina law will govern this Supplement and all matters of its interpretation. To the extent permitted by law, the County, BNY-M and the Deed of Trust Trustee agree that any action brought with respect to this Supplement must be brought in the North Carolina General Court of Justice in Orange County, North Carolina. 2-4 Limitation of Liability of Officers and Agents. No officer, agent or employee of the County, BNY-M or the Deed of Trust Trustee will be subject to any personal liability or accountability by reason of the execution of this Supplement or 6 15 any other documents related to the transactions contemplated by this Supplement. Those officers or agents are deemed to execute documents in their official capacities only, and not in their individual capacities. This Section does not relieve any officer, agent or employee from the performance of any official duty provided by law. 2-5 Covenants Run with the Land. All covenants contained in this Supplement run with the real estate encumbered by this Supplement. 2-6 Further Instruments. Upon the request of BNY-M or the Deed of Trust Trustee, the County will execute, acknowledge and deliver any further instruments reasonably necessary or desired by BNY-M or the Deed of Trust Trustee to carry out more effectively the purposes of this Supplement or any other document related to the transactions contemplated by this Supplement, and to subject to the liens and security interests of this Supplement all or any part of the Mortgaged Property intended to be given or conveyed, whether now given or conveyed or acquired and conveyed subsequent to the date of this Supplement. 2-7 Entire Agreement; Amendments. This Supplement, together with the other Loan Documents, constitutes the County's entire agreement with the Trustee and the Deed of Trust Trustee with respect to its general subject matter. This Supplement may not be changed except in accordance with the other Loan Documents. The consent of the Deed of Trust Trustee is not required for any changes. [The remainder of this page has been left blank intentionally.] 16 IN WITNESS WHEREOF, the County has caused this instrument to be signed, sealed and delivered by duly authorized officers, as of the day and year first above written. (SEAL) ATTEST: ORANGE COUNTY, NORTH CAROLINA By: Donna S. Baker Bonnie B. Hammersley Clerk, Board of Commissioners County Manager STATE OF NORTH CAROLINA; ORANGE COUNTY I, a Notary Public of such County and State, certify that Bonnie B. Hammersley and Donna S. Baker personally came before me this day and acknowledged that they are the County Manager and the Clerk of the Board of Commissioners, respectively, of Orange County, North Carolina, and that by authority duly given and as the act of such County, the foregoing instrument was signed in the County's name by such County Manager, sealed with its corporate seal and attested by such Clerk. WITNESS my hand and official stamp or seal, this day of May, 2019. [SEAL] Notary Public My commission expires: [Deed of Trust Supplement dated as of May 1, 2019 for the benefit of The Bank of New York Mellon Trust Company, N.A., as Trustee] 8 17 EXHIBIT A - Pledged Sites Description TRACT 1 [Government Service Annex -- Approximately 12,000-square foot building located at 208 S. Cameron St., Hillsborough] BEING that certain property containing 9.202 acres, more or less, adjacent to South Cameron Street as shown on a plat entitled "Recombination Survey Properties of Orange County" as prepared by Riley Surveying, P.A. dated June 5, 2007 and recorded June 7, 2007 in Plat Book 102, Page 36, Orange County Register of Deeds. PIN Number: 9874-15-3612 TRACT 2 [North Campus SiteL- PARCEL 1 BEING all of Lot 1 containing 10.40 acres, more or less, as shown on plat entitled "Leroy Hall Estate Partition" and recorded in Plat Book 94, Page 68, Orange County Registry. and being the same property as: Lot 1 as shown on plat entitled "Boundary & Physical Survey prepared for The County of Orange properties of Mary Copeland and Wayne & Betsy Tilley" by Riley Surveying, P.A., dated January 22, 2019 and recorded in Plat Book 118, Page 105, Orange County Registry. Address: 524 W. Hill Avenue N., Hillsborough, NC 27278 PIN: 9864-39-2344 PARCEL 2 BEING all of Lot 2 containing 8.90 acres, more or less, as shown on plat entitled "Leroy Hall Estate Partition" and recorded in Plat Book 94, Page 68, Orange County Registry. and being the same property as: Lot 2 as shown on plat entitled "Boundary & Physical Survey prepared for The County of Orange properties of Mary Copeland and Wayne & Betsy 9 18 Tilley" by Riley Surveying, P.A., dated January 22, 2019 and recorded in Plat Book 118, Page 105, Orange County Registry. Address: 520 Orange Heights LP, Hillsborough, NC 27278 PIN: 9864-39-8253 PARCEL 3 BEING all of Lot 4A containing 2.00 acres, more or less, as shown on plat entitled "Leroy Hall Estate Partition" and recorded in Plat Book 94, Page 68, Orange County Registry. and being the same property as: Lot 4A as shown on plat entitled "Boundary & Physical Survey prepared for The County of Orange properties of Mary Copeland and Wayne & Betsy Tilley" by Riley Surveying, P.A., dated January 22, 2019 and recorded in Plat Book 118, Page 105, Orange County Registry. Address: 1020 US 70 West, Hillsborough, NC 27278 PIN: 9864-39-7758 TRACT 3 [E-911 Center in the Meadowlands --_Approximately 22,000-square foot building located on Meadowlands Drive, Hillsborough) BEGINNING at a point located in the eastern margin of the 60 foot wide right-of-way of Meadowlands Drive, said beginning point being further located South 12' 12' 30" West 360.84 feet from a nail located at the intersection of the center line of Meadowlands Drive with the center line of the 60 foot wide right-of-way of N.C. Highway 70; and running thence from said beginning point South 73' 36' 46" East 407.39 feet to a point; thence South 04' 48' 02" West 329.70 feet to a point; thence North 67' 16' 01" West 494.62 feet to a point located in the aforesaid easterly margin of the right-of- way of Meadowlands Drive; thence with said easterly margin of the right-of- way of Meadowlands Drive in two calls as follow: (1) with the arc of a circular curve to the left having a radius of 525.05 feet (and a chord course and distance of North 23' 54' 22" East 134.12 feet), an arc distance of 134.49 feet to a point; thence (2) North 160 34' 02" East 135.34 feet to the point or place of BEGINNING; containing 3.00 acres and being Lot A as shown on a survey entitled "Subdivision of Property Surveyed for Meadowlands Associates" by Alois Callemyn Land Surveyors dated February 10 19 26, 1996 and recorded in Plat Book 75, Page 146, in the Orange County Registry. PIN Number: 9874-80-2738 TRACT 4 [Visitor's Center Building, Franklin Street-- Approximately 7,400- square foot building located at 501 W. Franklin St., Chapel Hill] BEING all of that 13,953 square foot, more or less, parcel labeled as PIN Number: 9788-15-1996 as shown on survey entitled "Physical Survey prepared for the County of Orange" dated as of July 8, 1996 and last revised on July 17, 1996 completed by Jose L. Torres, Registered Land Surveyor, L- 3771 and recorded in Plat Book 76, Page 103, Orange County Registry. PIN Number: 9788-15-1996 20 EXHIBIT B -- Existing Encumbrances As to Tract 1: 1. Subject to Matters shown on plats recorded in Plat Book 102, Page 34; Plat Book 102, Page 36; Plat Book 59, Page 179; and Plat Book 110, Page 91. 2. Conservation Easement to Orange County recorded in Book 4296, page 308. 3. Title to that portion of the Land lying below the mean high water mark of Eno River. 4. Riparian rights incident to the Land. S. Easement to the Town of Hillsborough recorded in Book 1030, Page 546. 6. Easement(s) to Duke Power Company recorded in Book 1146, Page 153. 7. Right of Way Agreement between Orange County and Duke Energy Carolinas, LLC recorded in Book 5905, Page 73. As to Tract 2: 1. Subject to matters shown on plat recorded in Plat Book 118, Page 105. 2. Subject to matters shown on plat recorded in Plat Book 94, Page 68 including a 30-foot joint driveway easement and septic easement located on the Land. 3. Rights of others for ingress and egress purposes in and to the use of easements located on the Land. 4. Commissioners' Second Revised Final Report recorded in Book 3446, Page 26 and Order of Confirmation recorded in Book 3446, Page 29. S. Title to that portion of the Land within the right-of-way of US Hwy 70 and West Hill Ave. 6. Easement(s) to Duke Power Company recorded in Book 114, Page 95. As to Tract 3: 1. Restrictions appearing of record in Book 654, Page 517 and amended in Book 1081 at Page 425, but this policy insures that a violation thereof will not cause a forfeiture or reversion of Title. 2. Subject to matters shown on plat recorded in Plat Book 75, Page 146. 3. Easement(s) to Town of Hillsborough recorded in Book 804, Page 444. 4. Easement(s) to Duke Power Company recorded I Book 676, Page 500. S. Easement(s) to Public Service Company of North Carolina recorded in Book 1083, Page 235. 6. Title to that portion of the Land within the right-of-way of Meadowland Drive. 7. Termination Agreement recorded in Book 4126, Page 346. 8. Town of Hillsborough Conditional Use Permit #2007-04 recorded in Book 4416, Page 496. 12 21 As to Tract 4: 1. Subject to matters shown on plats recorded in Plat Book 76, Page 103; Plat Book 16, Page 27; and Plat Book 49, Page 72. 2. Party Wall Agreement recorded in Book 194, Page 47. 3. Sewer Easement to Marjorie Patricia Perl recorded in Book 316, Page 636. 4. Encroachment Agreement between Orville B. Campbell and Chapel Hill Publishing Company, Inc. recorded in Book 705, page 72. 13 22 Attachment 3 s*h draft of April 16 First Supplemental Trust Agreement by and between Orange County, North Carolina and The Bank of New York Mellon Trust Company, N.A., as Trustee Relating to the issuance of Limited Obligation Bonds Series 2019 23 THIS FIRST SUPPLEMENTAL TRUST AGREEMENT is dated as of May 1, 2019 (this "Supplemental Agreement"), is between ORANGE COUNTY, NORTH CAROLINA, a political subdivision of the State of North Carolina (the "County"), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association having an office in Jacksonville, Florida, as trustee (the "Trustee"), and relates to the execution and delivery of $ Limited Obligation Bonds, Series 2019 (the "2019 Bonds"). RECITALS The County and the Trustee executed and delivered a Trust Agreement dated as of June 1, 2018 (the "2018 Agreement" and with this Supplemental Agreement the "Trust Agreement"). The 2018 Agreement provides for the issuance of a 2018 series of limited obligation bonds (the "2018 Bonds"), and allows for the issuance of additional series of limited obligation bonds. The 2018 Agreement provides that the parties will enter into a supplemental agreement for each issue of limited obligation bonds. The County and the Trustee are now entering into this Supplemental Agreement to supplement the 2018 Agreement and provide for the issuance of the 2019 Bonds as additional bonds under the Trust Agreement. The 2019 Bonds are issued and secured on a parity with the 2018 Bonds. The County is issuing the 2019 Bonds to provide funds to be used, together with other available funds, on a project (the "Project") to acquire, construct, equip and otherwise improve a variety of County facilities and assets, including those described in Exhibit A, and to pay financing costs and other related costs. Each of the 2019 Bonds represents an "installment contract" within the meaning of Section 160A-20 of the North Carolina General Statutes, between the County and the owner of that Bond. The Trustee serves under this Supplemental Agreement for and on behalf of the bondholders. Unless the context clearly requires otherwise, capitalized terms used in this Supplemental Agreement and not otherwise defined have the meanings set forth in Exhibit B or in the Trust Agreement. 1 24 NOW, THEREFORE, in consideration of the mutual covenants and contained in this Supplemental Agreement, the parties agree as follows: ARTICLE I THE 2019 BONDS Section 1.01. Provision for 2019 Bonds; Advance. (a) The County will issue, and the Trustee will authenticate and deliver, 2019 Bonds in an aggregate principal amount of$ (b) The County is being paid $ from the sale of the 2019 Bonds. The County acknowledges that the amount paid to it is equal to the face amount of the 2019 Bonds (i) reduced by the amount of a discount for the underwriting of the 2019 Bonds and (ii) increased by the net original issue premium in the offering of the 2019 Bonds. The County will use the amount advanced as provided in this Supplemental Agreement to pay 2019 Project Costs. Section 1.02. Bonds Constitute Installment Contracts. Each of the 2019 Bonds, together with the County's corresponding obligations under the Trust Agreement and the Modified Deed of Trust, constitutes a separate "installment contract" within the meaning of Section 160A-20 between the County and the owner of that Bond. The County's payment obligations, and its other obligations under this Agreement and with respect to the Bonds, are secured by the lien on the Mortgaged Property created under the Modified Deed of Trust and by the other security provided for in the Trust Agreement. Section 1.03. Agreement Supplements 2018 Agreement; 2019 Bonds Are Additional Bonds. This Supplemental Agreement is a "supplemental agreement" for the issuance of Additional Bonds as provided in the 2018 Agreement, and the 2019 Bonds are "Additional Bonds" as defined in the 2018 Agreement. Except as modified by this Supplemental Agreement, all terms of the 2018 Agreement remain in effect and apply with respect to the 2019 Bonds to the same extent as to the 2018 Bonds. Section 1.04. Form and Details; Payments. The 2019 Bonds will be designated "Limited Obligation Bonds, Series 2019," and will be in substantially the 2 25 form of Exhibit C, with any changes as the Trust Agreement permits or requires. The 2019 Bonds will be numbered R-1 upward for identification. The 2019 Bonds are payable as to interest semiannually until payment on each Payment Date at the following rates (calculated based on a 360-day year consisting of twelve 30-day months), and are payable as to principal on October 1 in the following years and amounts: Maturity Principal Annual Interest Date (October 1) Amount f$1 Rate 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 3 26 2035 2036 2037 2038 2039 Exhibit D shows a schedule of payments due on the 2019 Bonds with respect to each Payment Date. Upon any redemption of the 2019 Bonds, the County will recalculate the schedule of payments to reflect the redemption, and will then deliver a substitute Exhibit D to the Trustee reflecting the recalculated payment schedule. Section 1.05. Prepayment Dates and Prices. The 2019 Bonds are subject to prepayment as described in Section 2.01. Section 1.06. Delivery of 2019 Bonds. The Trustee will authenticate and deliver the 2019 Bonds when it has received the following items: a) Certified copies of County Board resolutions (i) approving the terms and conditions under which the 2019 Bonds are to be executed and delivered and (ii) authorizing the execution, delivery and issuance of the 2019 Bonds, this Supplemental Agreement, and the Deed of Trust Supplement b) Evidence satisfactory to the Trustee that the LGC has approved the issuance of the 2019 Bonds c) An executed copy of this Supplemental Agreement d) An executed copy of the Deed of Trust Supplement, which extends the benefit of the security provided to the Trustee under the 2018 Deed of Trust to secure the County's performance of its obligations under this Supplemental Agreement and 2019 Bonds, as contemplated by Section 1.06(iv) of the 2018 Agreement. 4 27 e) An Opinion of Bond Counsel to the effect that the execution and delivery of the 2019 Bonds as Additional Bonds is permitted under the terms of the 2018 Agreement and has been duly authorized f) A County Certificate directing the Trustee as to the application of the proceeds from the sale of the 2019 Bonds g) Evidence of the issuance or proposed issuance of one or more lender's title insurance policies (or an appropriate endorsement to an existing policy) in favor of the Trustee, in an aggregate face amount of insurance equal to the total amount of Outstanding Bonds plus the principal amount of the 2019 Bonds, and including the instrument referenced in (d) above as an insured instrument Section 1.07. Limited Obligation. The 2019 Bonds are limited obligations of the County, as provided and described in Section 4.05 of the 2018 Agreement. ARTICLE II REDEMPTION Section 2.01. Redemption Dates and Prices. The 2019 Bonds are subject to redemption only as provided in this Section. (a) Optional Redemption - The 2019 Bonds maturing on or after October 1, 20_, are subject to redemption at the County's option, in whole or in part on any date on or after October 1, 20_, upon payment of the principal amount to be redeemed plus interest accrued to the redemption date, without premium. (b) Mandatory Sinking Fund Redemption -- The 2019 Bonds maturing on October 1, 20_, are required to be redeemed in part prior to maturity pursuant to the terms of the sinking fund requirements of Section 2.05 at a redemption price equal to the principal amount to be redeemed plus interest accrued to the redemption date, without premium. Section 2.02. Selection of 2019 Bonds for Redemption. 5 28 (a) If less than all the 2019 Bonds are to be redeemed pursuant to subsection 2.01(a), they will be redeemed among maturities in any manner the County chooses. (b) If less than all of the 2019 Bonds of any maturity are to be redeemed, the Trustee must select the 2019 Bonds to be redeemed by lot; provided, however, that so long as a book-entry system with DTC is used for determining beneficial ownership of 2019 Bonds, if less than all of the 2019 Bonds within a maturity are to be redeemed, the parties agree that DTC may determine which of the 2019 Bonds within the maturity are to be redeemed in accordance with DTC's then-current rules and procedures. (c) In any case, (i) the portion of any 2019 Bond to be redeemed must be in the principal amount of $5,000 or some integral multiple thereof, and (ii) in selecting 2019 Bonds for redemption, each 2019 Bond will be considered as representing that number of 2019 Bonds which is obtained by dividing the principal amount of that 2019 Bond by $5,000. If a portion of a 2019 Bond is called for redemption, the County will prepare, and the Trustee will deliver a new 2019 Bond of the same series in principal amount equal to the unpaid portion to the registered owner upon the surrender of the 2019 Bond. Section 2.03. Redemption Notices. (a) The Trustee, at the County's direction, upon being satisfactorily indemnified with respect to expenses, and with at least two Business Days' notice, will send notice of redemption no less than 30 nor more than 60 days prior to the redemption date, as follows: (i) For any 2019 Bonds being called for redemption for which DTC or its nominee is the registered owner, to DTC, in whatever manner may be provided for under DTC's standard operating rules as then in effect (and if the Trustee is unable to determine those rules, by registered or certified mail, return receipt requested); (ii) For any 2019 Bonds for which no book-entry-only system of registration is in effect, to each of the registered owners of those 2019 Bonds at their addresses as shown on the Trustee's registration books, by registered or certified mail; and 6 29 (iii) In any case, both (A) to the MSRB for posting on the EMMA System and (B) to the LGC. The County, however, acknowledges and agrees that the Trustee is not acting as the disclosure or dissemination agent for purposes of Rule 15c2-12 in connection with any notice to be posted with the MSRB via the EMMA System. Failure to give any notice specified in (i) or (ii), as applicable, or any defect in that notice, will not affect the validity of any proceedings for the redemption of any 2019 Bonds with respect to which no failure has occurred. Failure to give any notice specified in (iii), or any defect in that notice, will not affect the validity of any proceedings for the redemption of any 2019 Bonds with respect to which the notice specified in (i) or (ii) is correctly given. Any notice mailed as provided in this Agreement will conclusively be presumed to have been given regardless of whether received by any Owner. (b) Any redemption notice, except a redemption notice in respect of a sinking fund payment date, may state that the redemption to be effected is conditioned upon -- (i) the Trustee's receipt on or prior to the redemption date of moneys sufficient to pay the principal of and interest on the 2019 Bonds to be prepaid; or (ii) any other condition not unacceptable to the Trustee. If a notice contains a condition and the Trustee either (i) does not receive moneys sufficient to pay the principal of and premium, if any, and interest on the 2019 Bonds on or prior to the redemption date, or (ii) the stated condition is not fulfilled, in either case on or prior to the redemption date, then redemption will not be made, and the Trustee must, within a reasonable time, give notice the same way the redemption notice was given that the moneys were not so received (or condition was not fulfilled) and the redemption was not made. 7 30 (c) Each redemption notice must specify (i) the complete designation of the 2019 Bonds to be redeemed, (ii) the CUSIP numbers of the 2019 Bonds to be redeemed, (iii) the dated dates, maturity dates and interest rates of the 2019 Bonds to be redeemed, (iv) the date fixed for redemption, (v) any conditions to the redemption, as contemplated by subsection (b) above, (vi) the principal amount of 2019 Bonds or portions thereof to be redeemed, (vii) the applicable redemption price, (viii) the address of the place or places of payment, (ix) the Trustee's name and telephone number, and the name of a contact person, (x) that interest accrued to the date fixed for redemption will be paid as specified in the notice, and (xi) that on and after the established redemption date interest on 2019 Bonds which have been redeemed will cease to accrue. The Trustee must also include in any redemption notice any additional information provided by the County for use in the notice. Section 2.04. 2019 Bonds Payable on Redemption Date; Interest Ceases To Accrue. If on or before the date fixed for redemption funds are deposited with the Trustee to pay the principal of and interest accrued to the redemption date on 2019 Bonds called for redemption, the 2019 Bonds (or portions of 2019 Bonds) called for redemption cease to accrue interest from and after the redemption date. Thereafter, those 2019 Bonds (a) are no longer entitled to the benefits provided by the Trust Agreement and (b) are not deemed to be Outstanding under the Trust Agreement. Section 2.05. Mandatory Sinking Fund Redemption. (a) The Trustee, from amounts received from or on behalf of the County, will redeem 2019 Bonds maturing on October 1, 20_, on October 1 in years and amounts upon payment of 100% of the principal amount thereof plus interest accrued to the redemption date, as follows: Year Amount ($1 8 31 *Final maturity The Trustee shall take all appropriate action to withdraw funds from the Principal Account and make timely payment to the Owners of the Term Bonds subject to sinking fund redemption. (b) Notwithstanding the foregoing, on or before the 70th day next preceding any sinking fund payment date, the County may do either of the following: (i) deliver to the Trustee for cancellation Term Bonds required to be redeemed on that sinking fund payment date in any aggregate principal amount desired; or (ii) instruct the Trustee to apply a credit against the County's sinking fund payment obligation for any Term Bonds that previously have been redeemed (other than through the operation of the sinking fund requirements) and canceled by the Trustee but not previously applied as a credit against any sinking fund payment obligation. The Trustee will credit against the County's sinking fund payment obligation on each sinking fund payment date the amount of 2019 Bonds so purchased, delivered or previously redeemed as described in paragraphs (i) or (ii) above. (c) Within seven days of receipt of the funds, Term Bonds or instruction to apply a credit (as described in subsection (b) above), the County will deliver a County Certificate to the Trustee directing that any amounts remaining in the Principal Account in excess of the amount required to fulfill the remaining required principal and sinking fund redemption obligations on the next sinking fund payment date be either (i) transferred to the Interest Account or (ii) used to redeem 2019 Bonds as soon as practicable (as may be specified in the Certificate). In the absence of any written direction from the County, the Trustee will deposit those amounts to the Interest Account. ARTICLE III DEPOSIT AND USE OF 2019 PROCEEDS; OTHER FUNDS 9 32 Section 3.01. Disbursement of Proceeds. The Trustee will apply proceeds from the sale of the 2019 Bonds as provided in the certificate described in Section 1.06(e). Section 3.02. Creation and Use of 2019 Proceeds Fund. The Trustee will establish a special fund designated as the "Orange County 2019 Proceeds Fund." The Trustee will keep this Fund separate and apart from all other funds and moneys held by it, and will hold and administer this Fund as provided in this Supplemental Agreement. Moneys in the 2019 Proceeds Fund will be expended only as described in Sections 3.03 and 3.04. The Trustee is not required to disburse any moneys from the 2019 Proceeds Fund during the continuation of any Event of Default. Section 3.03. Deposits to 2019 Proceeds Fund; Payment of Project Costs. (a) The Trustee will deposit into the 2019 Proceeds Fund the amount specified in the certificate referenced in Section 1.06(f) and all other amounts paid to it for deposit in the 2019 Proceeds Fund. (b) The Trustee will disburse moneys in the 2019 Proceeds Fund from time to time, either to pay 2019 Project Costs directly or to reimburse the County for previous expenditures on any of those costs, upon receipt by the Trustee of a requisition substantially in the form of Exhibit E. The Trustee will accept requisitions that the County submits by electronic mail or by facsimile transmission. The Trustee may rely conclusively on requisitions as authorization for payments, and the Trustee has no duty or responsibility to verify any matters in the requisitions. (c) Unless otherwise directed by the County, the Trustee will disburse moneys from the 2019 Proceeds Fund that are due to the County by wire transfer to any bank account in the United States as the County may designate to the Trustee from time to time. Section 3.04. Transfer of Unexpended Proceeds. Upon the first to occur of(a) June 15, 2022, or (b) receipt of a County Certificate stating that there are no more Project Costs to be paid from the 2019 Proceeds Fund, the Trustee will withdraw all remaining moneys in the 2019 Proceeds Fund and deposit those moneys in the Payment Fund. The Trustee will then apply those moneys to Bond 10 33 payments as directed by a County Representative. In the absence of any direction from the County, the Trustee will deposit those moneys in the Interest Account and use them to pay interest on the 2019 Bonds as the same becomes due. Section 3.05. Use of Funds and Accounts from 2018 Agreement. The Trustee is to maintain and administer the Bond Payment Fund (and its principal and interest accounts) and the Net Proceeds Fund established under the 2018 Agreement to the same effect and purpose as provided in the 2018 Agreement with respect to the 2019 Bonds as to the 2018 Bonds and all Bonds generally. ARTICLE IV OTHER MODIFIED PROVISIONS Section 4.01. County's Updated Undertaking for Continuing Disclosure. The County undertakes, for the benefit of the beneficial owners of the Bonds, to provide the following items and information to the Municipal Securities Rulemaking Board ("MSRB"): (a) by not later than seven months from the end of each of the County's Fiscal Years, beginning with the Fiscal Year that ends June 30, 2019, audited County financial statements for such fiscal year, if available, prepared in accordance with Section 159-34 of the General Statutes of North Carolina, as it may be amended from time to time, or any successor statute, or, if such audited financial statements are not available by seven months from the end of any fiscal year, unaudited County financial statements for such fiscal year, to be replaced subsequently by audited County financial statements to be delivered within 15 days after such audited financial statements become available for distribution; (b) by not later than seven months from the end of each of the County's Fiscal Years, beginning with the Fiscal Year that ends June 30, 2019, the financial and statistical data as of a date not earlier than the end of the preceding fiscal year (which data will be prepared at least annually, will specify the date as to which such information was prepared and will be delivered with any subsequent material events notices specified in subparagraph (c) below) for the type of information [included in Appendix A to the final Official Statement relating to the 2019 Bonds under the captions "Debt Information" and "Tax Information" (excluding any 11 34 information on overlapping or underlying debt)] to the extent such items are not included in the audited financial statements referred to in (a) above; (c) in a timely manner, not in excess of ten Business Days after the occurrence of the event, notice of any of the following events with respect to the 2019 Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of the beneficial owners of the Bonds, if material; (8) calls for redemption of the Bonds (other than calls pursuant to sinking fund redemption), if material, and tender offers; (9) defeasances; (10) release, substitution or sale of any property securing repayment of the Bonds, if material; 12 35 (11) rating changes; (12) bankruptcy, insolvency, receivership or similar proceedings related to the County or any other person or entity that may at any time become legally obligated to make payments on the Bonds (collectively, the "Obligated Persons"); (13) the consummation of a merger, consolidation, or acquisition involving an Obligated Person or the sale of all or substantially all of the assets of the Obligated Person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material; (15) Incurrence of a financial obligation of the County, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the County or any Obligated person, any of which affect Bondholders, if material; and (16) Default, event of acceleration, termination event, modification of terms or other similar events under the terms of a financial obligation of the County, any of which reflect financial difficulties; and (d) in a timely manner, notice of a failure of the County to provide required annual financial information described in (a) or (b) above on or before the date specified. In this Section, "financial obligation" means (a) a debt obligation, (b) a derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation, or (c) a guarantee of an obligation described in either clause (a) or (b). The term "financial obligation" shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with Rule 15c2-12. 13 36 For the purposes of the events identified in subparagraph (c)(12) above, the event is considered to occur when any of the following occurs: the appointment of a receiver, fiscal agent or similar officer for an Obligated Person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Obligated Person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Obligated Person. If the County fails to comply with the undertaking described above, the Trustee may take action to protect and enforce the rights of all the beneficial owners of the 2019 Bonds with respect to such undertaking, including an action for specific performance; provided, however, that failure to comply with such undertaking will not be an Event of Default and will not result in any acceleration of payment of the 2019 Bonds. All actions will be instituted, had and maintained in the manner provided in this paragraph for the benefit of all beneficial owners of the 2019 Bonds. The County must provide the documents and other information referred to above to the MSRB in an electronic format as prescribed by the MSRB and accompanied by identifying information as prescribed by the MSRB. The County may discharge its undertaking as set forth in this Section by providing such information in any manner that the United States Securities and Exchange Commission subsequently authorizes in lieu of the manner described above. The County reserves the right to modify from time to time the information to be provided to the extent necessary or appropriate in the County's judgment, provided that: (A) any such modification may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the County; 14 37 (B) the information to be provided, as modified, would have complied with the requirements of Rule 15c2-12 as of the date of the final Official Statement, after taking into account any amendments or interpretations of Rule 15c2-12, as well as any changes in circumstances; and (C) any such modification does not materially impair the interests of the beneficial owners, as determined either by parties unaffiliated with the County or by the approving vote of the Majority Owners pursuant to the terms of this Trust Agreement, as it may be amended from time to time, at the time of the amendment. Any annual financial information containing modified operating data or financial information will explain, in narrative form, the reasons for the modification and the impact of the change in the type of operating data or financial information being provided. The provisions of this Section will terminate upon payment, or provision having been made for payment, in a manner consistent with Rule 15c2-12, in full of the principal of and interest on all the Bonds. Section 4.02. Definition of "Restricted Yield." With respect to the 2019 Bonds, a "Restricted Yield" means a "yield," within the meaning of Treas. Regs. Secs. 1.103-13(c), -13(d), 1.148-9T(a), or any successor or other provision that may be applicable, not in excess of a "yield" equal to %. ARTICLE V MISCELLANEOUS PROVISIONS Section 5.01. Notices. (a) Any communication provided for in this Supplemental Agreement or the 2019 Bonds must be in writing (not to include facsimile transmission or electronic mail, except as provided in Section 3.03). (b) Any communication under this Supplemental Agreement will be deemed given on the delivery date shown on a United States Postal Service certified 15 38 mail receipt, or a delivery receipt (or similar evidence) from a national commercial package delivery service, if addressed as follows: (i) if to the County, to Orange County Manager, Re: Notice under 2019 LOBS Trust Agreement, Post Office Box 8181, Hillsborough, NC 27278 (ii) if to the Trustee, to The Bank of New York Mellon Trust Company, N.A., Re: Notice for 2019 Financing for Orange County, 10161 Centurion Parkway North, Jacksonville, FL 32256 (iv) If to the LGC, to the North Carolina Local Government Commission, Attn: Secretary of the Commission, Re: Notice for 2019 Orange County LOBS Financing, Bonds, Longleaf Building, 3200 Atlantic Ave., Raleigh, NC 27604 (c) Any communication sent under this Agreement must also be sent to the County and the Trustee, along with any other parties to which the communication may be addressed. Any party sending a communication under this Supplemental Agreement that relates to amendments or defaults must also send a copy to the LGC. (d) Any addressee (including the LGC) may designate additional or different addresses for communications by notice given under this Section to each of the others. (e) Whenever this Supplemental Agreement requires the giving of a notice, the person entitled to receive the notice may waive the notice, in writing. The giving or receipt of the notice will then not be a condition to the validity of any action taken in reliance upon the waiver. Section 5.02. Consent to Jurisdiction. The Trustee consents to jurisdiction in the State of North Carolina for any lawsuit arising from this Supplemental Agreement, or from the related transactions contemplated by this Supplemental Agreement. Section 5.03. Binding Effect; Limitation of Rights. This Supplemental Agreement is binding upon, inures to the benefit of and is enforceable by the parties and their respective successors and assigns. Nothing expressed or implied in this Supplemental Agreement or the 2019 Bonds gives any person other than the 16 39 Trustee, the County and the Owners any right, remedy or claim under or with respect to this Supplemental Agreement. Section 5.04. Severability. If any provision of this Supplemental Agreement is determined to be unenforceable, that does not affect any other provision of this Supplemental Agreement. Section 5.05. Counterparts. This Supplemental Agreement may be signed in several counterparts, including separate counterparts. Each will be an original, but all of them together constitute the same instrument. Section 5.05. Definitions; Rules of Interpretation. Unless the context clearly requires otherwise, capitalized terms used as defined terms in this Supplemental Agreement and not otherwise defined have the meanings set forth in Exhibit A, and if not defined there will have the meanings set forth in the 2018 Agreement. This Supplemental Agreement will be interpreted in accordance with the rules of interpretation set forth in Exhibit A. [The remainder of this page has been left blank intentionally.] 17 40 IN WITNESS WHEREOF, the parties have caused this First Supplemental Trust Agreement to be executed in their corporate names by their duly authorized officers, all as of May 1, 2019. (SEAL) ATTEST: ORANGE COUNTY, NORTH CAROLINA By: Donna S. Baker Bonnie B. Hammersley Clerk, Board of Commissioners County Manager The Bank of New York Mellon Trust Company, N.A., as Trustee By: Terence Rawlins,Vice President [First Supplemental Trust Agreement dated as of May 1, 2019] 18 41 Exhibit A - list of projects to be financed with estimated amounts Component Estimated Cost IT Infrastructure and Governance Council Initiatives $ 455,410 Sheriff- Body Cameras 300,000 Parks and Recreation Facility Renovations 100,000 Vehicle Replacements 689,328 Solid Waste System- Trucks 984,000 Communication Systems - Portable Radios 505,000 Emergency Services (Backup Center Equipment) 969,000 Facility Improvements (Accessibility/ Security/ HVAC) 70,000 Link Center Improvements 483,219 IT Broadband Connectivity 210,000 Land/ Easements (Conservation & Mountains to Sea Trail) 370,000 Schools Facilities Improvements 2,681,499 School Capital 3,000,000 Historic Rogers Road Neighborhood Community Center/ Infrastructure 1263225 Meadowlands Emergency Center Remediation 2,153,20� Government Services Annex Remediation 879,160 Battle Courtroom Remediation 217,000 District Attorney building Remediation 41,143 Solid waste system - High Rock Convenience Center Construction 571,000 Hillsborough EDD - utility projects 1,300,000 Total Projects $ 16,105,193 The County also expects to use financing proceeds to pay financing costs. The amounts stated above are estimates only. The County may use any portion of the Amount Advanced for any of the Financed Facilities or any of the Financing Costs, subject to the County's obligation to undertake and complete those 19 42 components of the project related to the Pledged Facilities and the limitation on the use of funds only for Project Costs. Improvements related to the Pledged Facilities include to the County's Emergency Operations Center. 20 43 EXHIBIT B - Definitions; Rules of Construction For all purposes of this Supplemental Agreement, unless the context requires otherwise, the following terms have the following meanings. Other defined terms used in this Supplemental Agreement are defined in the Recitals and the body of this Supplemental Agreement. "2018 Agreement" means the Trust Agreement dated as of June 1, 2018, between the County and The Bank of New York Mellon Trust Company, N.A., as trustee, as it may be properly amended or supplemented from time to time. "2018 Bonds" means the County's Limited Obligation Bonds, Series 2018, originally issued in the aggregate principal amount of $7,510,000 pursuant to the 2018 Agreement. "2018 Deed of Trust" means the Deed of Trust and Security Agreement dated as of June 1, 2018, from the County to a Deed of Trust Trustee for the County's benefit, which the County delivered to secure its obligations under the 2018 Agreement. "2019 Bonds" means the County's Limited Obligation Bonds, Series 2019, originally issued in the aggregate principal amount of $ pursuant to the 2018 Agreement and this Supplemental Agreement. "2019 Proceeds Fund" means the Orange County 2019 Bond Proceeds Fund established pursuant to Section 3.02. "2019 Project" has the meaning assigned in the preambles to this Supplemental Agreement. "2019 Project Costs" means "Project Costs," as defined in the 2018 Agreement, related to the 2019 Project. As provided in the 2018 Agreement, Financing Costs are a subset of Project Costs. "2019 Term Bonds" means the 2019 Bonds maturing in the years _ 21 44 "Deed of Trust Supplement" means the instrument of that name dated as of May 1, 2019, from the County for the Trustee's benefit, which supplements the 2018 Deed of Trust. "Modified Deed of Trust" means the 2018 Deed of Trust as modified by the Deed of Trust Supplement. "Payment Date" with respect to the 2019 Bonds means each April 1 and October 1, beginning October 1, 2019. "Supplemental Agreement" means this First Supplemental Trust Agreement, as it may be properly amended or supplemented from time to time. "Term Bonds" means Bonds of any Series that are designated as Term Bonds, including the 2019 Bonds maturing on October 1, 20xx. All other capitalized terms used in this First Supplemental Trust Agreement and not otherwise defined have the meanings ascribed thereto in the 2018 Agreement. Rules of Construction. Unless the context otherwise requires, (a) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles; (b) unless otherwise indicated, references to Articles, Sections and Exhibits are to the Articles, Sections and Exhibits of this Agreement; (c) words importing the singular will include the plural and vice versa and words importing the masculine gender will include the feminine and neuter genders as well. (d) the headings on sections and articles are solely for convenience of reference and will not constitute a part of this Agreement nor will they affect its meanings, construction or effect; 22 45 (e) words importing the prepayment or calling for prepayment of Bonds will not be deemed to refer to or connote the payment of Bonds at their stated maturity; (f) all references to the payment of Bonds are references to payment of principal of and premium, if any, and interest with respect to the Bonds; and (g) all uses of the term "including" should be understood to mean "including, but not limited to." 23 46 Exhibit C - Form of 2019 Bond Number R- REGISTERED REGISTERED LIMITED OBLIGATION BOND, SERIES 2019 ORANGE COUNTY, NORTH CAROLINA INTEREST RATE MATURITY DATE DATED DATE CUSIP % October 1, 20xx May 30, 2019 684566 XXX REGISTERED OWNER: *****CEDE & CO.***** PRINCIPAL AMOUNT: **** ORANGE COUNTY, NORTH CAROLINA (the "County"), for value received, promises to pay, but solely from the sources and in the manner provided, to the registered owner hereof, or registered assigns or legal representative, the principal amount stated above on the maturity date stated above, and to pay interest on this Bond semiannually on each April 1 and October 1, beginning October 1, 2019, at the annual rate stated above. Interest is payable (a) from the Dated Date stated above, if this Bond is authenticated prior to October 1, 2019, or (b) otherwise from the April 1 or October 1 that is, or immediately precedes, the date on which this Bond is authenticated (unless payment of interest on this Bond is in default, in which case this Bond will 24 47 bear interest from the date to which interest has been paid). Principal and interest are payable in lawful money of the United States of America. This Bond is one of an issue of$ Limited Obligation Bonds, Series 2019 (the "Bonds"), of like date and tenor, except as to number, denomination, rate of interest, privilege of redemption and maturity. The Bonds are issued under, and are equally and ratably secured by, a Trust Agreement dated as of June 1, 2018, between the County and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), as supplemented by a First Supplemental Trust Agreement between the County and that Trustee and dated as of May 1, 2019 (together, the "Trust Agreement"),. This Bond constitutes an installment contract within the meaning of Section 160A-20 of the North Carolina General Statutes, as the same may be in effect from time to time ("Section 160A-20"), between the County and the owner (from time to time) of this Bond. The Bonds are payable solely from funds appropriated on an annual basis by the County's governing Board of Commissioners, and other funds available for the purpose of payment pursuant to the Trust Agreement, such as certain net insurance and condemnation awards and the proceeds of remedial action, which revenues and other moneys have been pledged as described in the Trust Agreement to secure payment of the Bonds. Neither the County's faith and credit nor its taxing power is pledged to the payment of any amounts due under the Bonds. As provided for under Section 160A-20, no deficiency judgment may be rendered against the County in any action for breach of a contractual obligation under the Bonds or the Trust Agreement. To further secure its obligations under the Trust Agreement, the County has granted, for the benefit of the Trustee on behalf of the owners of the Bonds, a security interest in certain public facilities and the related real property, and certain other property, pursuant to the Trust Agreement and a Deed of Trust and Security Agreement dated as of June 1, 2018, as supplemented by a Deed of Trust Supplement dated as of May 1, 2019. Reference is made to the Trust Agreement, the Deed of Trust and Supplement referenced above for the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the County and the Trustee, the rights of the Owners of the Bonds and the terms upon which the Bonds 25 48 are executed, delivered and secured, to all of which provisions the owner of this Bond, by the acceptance of this Bond, agrees. Additional Bonds secured by a parity interest in the property securing the Bonds may be issued under the terms and conditions set forth in the Trust Agreement. The Bonds are issued by means of a book-entry system, with one certificate for each maturity immobilized at The Depository Trust Company, New York, New York ("DTC"), and not available for distribution to the public. Transfer of beneficial ownership interests in the Bonds in the principal amount of $5,000 or any integral multiple thereof will be effected on the records of DTC and its participants pursuant to rules and procedures established by DTC and its participants. Principal and interest on the Bonds are payable to DTC or its nominee as registered owner of the Bonds. Neither the Trustee nor the County is responsible or liable for the transfer of ownership or payments or for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. If (a) DTC determines not to continue to act as securities depository for the Bonds or (b) the County so elects, the County and the Trustee will discontinue the book-entry system with DTC. If the County does not identify another qualified securities depository to replace DTC, the County will prepare and execute, and the Trustee will authenticate and deliver in exchange, replacement Bonds in the form of fully-registered Bonds. The Bonds may not be redeemed prior to maturity except as provided in this Bond and in the Trust Agreement. The Bonds maturing on or after October 1, 20 , are subject to redemption at the County's option in whole or in part on any date on or after October 1, 20 , upon payment of the principal amount to be prepaid plus interest accrued to the redemption date, without premium. If less than all the Bonds are to be redeemed pursuant to this provision, they will be redeemed among maturities in any manner the County chooses. The Trustee will redeem Bonds maturing on October 1, 20_, upon payment of 100% of the principal amount thereof plus interest accrued to the redemption date, on October 1 in years and amounts as follows: 26 49 Year Amount ($1 *Final maturity The amount of Bonds to be redeemed on any sinking fund payment date may be reduced in accordance with the provisions of the Trust Agreement. If less than all the Bonds of any maturity are called for redemption, the Trustee will select the Bonds to be redeemed by lot; provided, however, that so long as a book-entry system with DTC is used for recording beneficial ownership of Bonds, if less than all of the Bonds within a maturity are to be redeemed, DTC and its participants will determine which of the Bonds within any such maturity are to be redeemed. In any case, (1) the portion of any Bond to be prepaid will be in the principal amount of $5,000 or some integral multiple thereof, and (2) in selecting Bonds for redemption, each Bond will be considered as representing that number of Bonds which is obtained by dividing the principal amount of that Bond by $5,000. If a portion of a Bond is called for redemption, a new Bond in principal amount equal to the unpaid portion will be issued to the registered owner upon the surrender of the Bond. The Trustee will send notice of redemption to DTC or its nominee as the Owner of the Bonds as provided in the Trust Agreement. The Trustee will send the notice not more than 60 days nor less than 30 days prior to the date fixed for redemption. Neither the Trustee nor the County is responsible for sending notices of redemption to anyone other than DTC or its nominee, so long as all the Bonds to be redeemed are held in a book-entry-only form with DTC. If on or before the date fixed for redemption funds have been deposited with the Trustee to pay the principal and interest accrued to the redemption date with 27 50 respect to the Bonds called for redemption, the Bonds or portions thereof thus called for redemption will cease to accrue interest from and after the redemption date, will no longer be entitled to the benefits provided by the Trust Agreement, and will not be deemed to be Outstanding under the Trust Agreement. The Owner of this Bond has no right to enforce the provisions of the Trust Agreement or to institute action to enforce the covenants therein, or to take any action with respect to any event of default thereunder, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Trust Agreement. Changes to or supplements of the Trust Agreement may be made to the extent and in the circumstances permitted by the Trust Agreement. Ownership of this Bond will be registered on the Bond Register (as defined in the Trust Agreement) kept for that purpose by the Trustee, which will act as Bond registrar for the Bonds. This Bond may be exchanged, and its transfer may be effected, only by the Owner hereof in person or by attorney duly authorized in writing at the designated office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Trust Agreement, and upon surrender and cancellation of this Bond. Upon exchange or registration of such transfer a new registered Bond or Bonds of the same maturity and interest rate and of authorized denomination or denominations for the same aggregate principal amount will be issued in exchange therefor. The County and the Trustee may deem and treat the person in whose name this Bond is registered on the Bond Register as the absolute owner of this Bond for the purpose of receiving payment of or on account of principal of and interest due on this Bond and for all other purposes, and neither the County nor the Trustee will be affected by any notice to the contrary, except that interest payments will be made to the persons shown as Owners on the Trustee's registration books on the Record Date, which is the end of the calendar day on the 15th day of the month (whether or not a business day) preceding each Payment Date. All acts, conditions and things required by the Constitution and laws of the State of North Carolina to happen, exist or be performed precedent to and in the execution and delivery of this Bond have happened, exist and have been performed. 28 51 This Bond and the issue of which it is a part are issued with the intent that North Carolina law will govern this Bond and all matters of its interpretation. This Bond will not be entitled to any benefit under the Trust Agreement or be valid or obligatory for any purpose until the Trustee has executed the Certificate of Authentication appearing on this Bond. IN WITNESS WHEREOF, the County has caused this instrument to be signed, sealed and delivered by duly authorized officers, as of the day and year first above written. (SEAL) ORANGE COUNTY ATTEST: NORTH CAROLINA By: Donna S. Baker Bonnie B. Hammersley Clerk, Board of Commissioners County Manager [Orange County, North Carolina $ Limited Obligation Bonds, Series 2019] 29 52 This Bond has been approved under the provisions of Section 160A-20 and Article 8, Chapter 159 of the General Statutes of North Carolina. Greg C. Gaskins Secretary, North Carolina Local Government Commission By [Greg C. Gaskins or Designated Assistant] CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds referred to in the First Supplemental Trust Agreement dated as of May 1, 2019, between Orange County, North Carolina, and The Bank of New York Mellon Trust Company, N.A., as trustee. Date of Authentication: THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee By: Authorized Officer [Orange County, North Carolina $ Limited Obligation Bonds, Series 2019] 30 53 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) unto (Please print or type transferee's name and address, including zip code) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF TRANSFEREE: the within bond and all rights thereunder, hereby irrevocably constituting and appointing , Attorney, to transfer said certificate on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: (Signature of Owner) NOTICE: The signature above must NOTICE: Signature(s) must be correspond with the name the Owner as guaranteed by a participant in the it appears on the front of this certificate Securities Transfer Agent Medallion in every particular without alteration or Program ("STAMP") or similar program enlargement or any change whatsoever. 31 54 EXHIBIT D - Schedule of Payments on 2019 Bonds Principal is payable in the amounts and on the dates as shown below, subject to redemption of the 2019 Bonds as provided in this Supplemental Agreement. Interest is payable on the dates shown below. The 2019 Bonds will bear interest from the Closing Date until paid. Interest is calculated at the rates shown in Section 1.04. The schedule below shows the expected interest payment amounts. 251" day of the Principal Interest Total Annual Debt month Payment Service preceding -- 10/1/2019 4/1/2020 10/1/2020 4/1/2021 10/1/2021 The County's obligation with respect to the 2019 Bonds on each Payment Date is the amount shown above as the "total payment" for that date, subject to adjustment as provided in Section 3.05(c) of the 2018 Agreement. 32 55 Exhibit E - Form of Requisition [Date] The Bank of New York Mellon Trust Company, N.A.,as Trustee Attention: Corporate Trust Regarding: Requisition under 2019 Trust Agreement for Orange County, North Carolina RE: Request by Orange County, North Carolina (the "County"), for disbursement of funds from a Bond Proceeds Fund created under a First Supplemental Trust Agreement dated as of May 1, 2019 (the "Supplemental Agreement"), with Orange County, North Carolina (the "County") To the Trustee: Pursuant to the terms and conditions of the Supplemental Agreement, the County authorizes and requests the disbursement of funds from the "Orange County 2019 Bond Proceeds Fund" established under that Supplemental Agreement for the costs described below. Capitalized terms used in this requisition and not otherwise defined have the meanings ascribed in the Trust Agreement dated as of June 1, 2018, between the County and the Trustee, as supplemented by the Supplemental Agreement (as supplemented, the "Trust Agreement"). This is requisition number 2019 - from the Bond Proceeds Fund. Total Amount for Disbursement Payee Payee's address 33 56 Orange County makes this requisition pursuant to the following representations: 1. The County has appropriated in its current fiscal year funds sufficient to pay the Bond Payments and estimated Additional Payments due in the current fiscal year. 2. The purpose of this disbursement is for payment of Project Costs as provided for in the Trust Agreement. 3. The requested disbursement has not been subject to any previous requisition. 4. No notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys payable herein to any of the persons, firms or corporations named herein has been received, or if any notice of any such lien, attachment or claim has been received, such lien, attachment or claim has been released or discharged or will be released or discharged upon payment of this requisition. S. This requisition contains no items representing payment on account of any percentage entitled to be retained on the date of this requisition. 6. No Event of Default is continuing, and no event or condition is existing which, with notice or lapse of time or both, would become an Event of Default. 7. The County has insurance in place that complies with the insurance requirements of the Trust Agreement. 8. No portion of the amounts set forth in this requisition represents amounts paid or payable as North Carolina state sales taxes. ORANGE COUNTY, NORTH CAROLINA By: [Exhibit Form Only-Do Not Si�an� Title: County Representative 34 57 Attachment 4 ORANGE COUNTY,NORTH CAROLINA LIMITED OBLIGATION BONDS, SERIES 2019 BOND PURCHASE AGREEMENT May , 2019 Orange County,North Carolina Hillsborough,North Carolina Ladies and Gentlemen: The undersigned, FTN Financial Capital Markets, on behalf of itself and as representative (in such capacity, the "Representative") of Robert W. Baird & Co. Incorporated (together, the "Underwriters"), offers to enter into the following purchase agreement (this "Bond Purchase Agreement") with Orange County, North Carolina (the "County"), which, upon the County's acceptance of this offer, will be binding upon the County and the Underwriters. This offer is made subject to the County's acceptance of this Bond Purchase Agreement, which acceptance shall be evidenced by the execution and delivery (manually or by facsimile transmission) of this Bond Purchase Agreement by a duly authorized officer of the County on or before 12:00 P.M., Eastern Time, on the date hereof. Upon such acceptance, execution and delivery, this Bond Purchase Agreement shall be in full force and effect in accordance with its terms and shall be binding upon the County and the Underwriters. Except as expressly otherwise defined herein, capitalized terms used herein shall have the same meanings as set forth in the Preliminary Official Statement(as defined below). (1) Purchase and Sale. (a) Upon the terms and conditions and based on the representations, warranties and covenants hereinafter set forth, the Underwriters hereby agree to purchase from the County, and the County hereby agrees to sell to the Underwriter, all (but not less than all) of the $ aggregate principal amount of the County's Limited Obligation Bonds, Series 2019 (the "Bonds"), dated the date of payment for and the delivery of the Bonds (such payment and delivery being herein sometimes called the "Closing"). The purchase price for the Bonds shall be $ (principal amount of the Bonds, plus [net] original issue premium of $ , less underwriters' discount of $ ) (the "Purchase Price"). The Underwriters shall pay the Purchase Price for the Bonds on the day of the Closing by wiring $ , at the County's direction, to the Trustee (as defined below). (b) The Bonds shall be issued and secured under and pursuant to a Trust Agreement dated as of June 1, 2018 (the "2018 Trust Agreement"), as supplemented by the First Supplemental Trust Agreement dated as of May 1, 2019 (the "Supplemental Agreement"; the 2018 Trust Agreement, as so supplemented, being referred to herein as the "Trust Agreement"), each between the County and The Bank of New York Mellon Trust Company, N.A. as trustee (the "Trustee"). The County is authorized pursuant to Section 20 of Chapter 160A of the General Statutes of North Carolina (the "Act"), to issue the Bonds for the purpose of providing 58 funds to the County to (i) acquire, construct, equip and otherwise improve the County facilities described in the Preliminary Official Statement and the Supplemental Agreement, and (ii) pay certain costs incurred in connection with the sale and issuance of the Bonds. The County's issuance of the Bonds has been authorized by a resolution adopted by the Board of Commissioners of the County on May 2, 2019 (the "Approving Resolution"). As security for performance of the County's obligations under the Trust Agreement, the County has executed and delivered to the deed of trust trustee, for the benefit of the Trustee, a Deed of Trust dated as of June 1, 2018 (the "2018 Deed of Trust") and [will, on or before the date of Closing, execute and deliver] a Deed of Trust Supplement dated as of May 1, 2019 (the "Deed of Trust Supplement"), supplementing the 2018 Deed of Trust (as so supplemented, the "Modified Deed of Trust"), granting a first lien of record on the Mortgaged Property, subject to Permitted Encumbrances. (c) The Bonds shall be dated the date of the Closing, shall mature on the dates and in the amounts, shall bear interest at the rates and shall have the terms stated in Exhibit A attached hereto. (2) Sale of All the Bonds; Offering. It shall be a condition to the County's obligation to sell and deliver the Bonds to the Underwriters, and to the obligation of the Underwriters to purchase and accept delivery of the Bonds, that the entire principal amount of the Bonds is sold and delivered by the County, and accepted and paid for by the Underwriters at the Closing. The Underwriters intend to make a bona fide public offering of all the Bonds at a price or prices not in excess of the initial public offering price or prices set forth in Exhibit A. The Bonds may be offered and sold to certain dealers (including dealers depositing such Bonds into investment trusts or mutual funds) at prices lower than such public offering prices. The Underwriters reserve the right to make such changes in such prices as the Underwriters shall deem necessary in connection with the offering of the Bonds. (3) Establishment of Issue Price. (a) The Representative, on behalf of the Underwriters, agrees to assist the County in establishing the issue price of the Bonds and shall execute and deliver to the County at Closing an "issue price" or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Representative, the County, and Sanford Holshouser LLP ("Bond Counsel"), to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. (b) Except as otherwise set forth in Exhibit B attached hereto, the County will treat the first price at which 10% of each maturity of the Bonds (the "10% test") is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Bond Purchase Agreement, the Representative shall report to the County and Bond Counsel the price or prices at which the Underwriters have sold to the public each maturity of the Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriters agree to promptly report to the County the prices at which it sells -2- 59 the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date (as hereinafter defined)has occurred, until the 10%test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the public. (c) The Representative confirms that the Underwriters have offered the Bonds to the public on or before the date of this Bond Purchase Agreement at the offering price or prices (the "initial offering price"), or at the corresponding yield or yields, set forth in Exhibit B attached hereto, except as otherwise set forth therein. Exhibit B also sets forth, as of the date of this Bond Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the County and the Underwriters agree that the restrictions set forth in the next sentence shall apply, which will allow the County to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity(the "hold-the-offering-price rule"). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the County will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following: (1) the close of the fifth(5th) business day after the sale date; or (2) the date on which the Underwriters have sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. The Representative shall promptly advise the County when the Underwriters have sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date. (d) Each Underwriter confirms that any selling group agreement and any retail distribution agreement (to which the Underwriter is a party) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the selling group and each broker- dealer that is a party to such retail distribution agreement, as applicable, to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the Underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public and (B) comply with the hold-the-offering- price rule, if applicable, in each case if and for so long as directed by the Underwriters The County acknowledges that, in making the representation set forth in this subsection, the Underwriters will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the hold-the-offering-price rule, if applicable, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a retail distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the hold-the-offering-price rule, if applicable, as set forth in the retail distribution agreement and the related pricing wires. The County further acknowledges that the Underwriters shall not be liable -3- 60 for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold-the-offering-price rule as applicable to the Bonds. (e) The Underwriters acknowledge that sales of any Bonds to any person that is a related party to the Underwriters shall not constitute sales to the public for purposes of this section. Further, for purposes of this section: i. "public"means any person other than an underwriter or a related party, ii. "underwriter" means (A) any person that agrees pursuant to a written contract with the County (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public), iii. a purchaser of any of the Bonds is a"related party"to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and iv. "sale date" means the date of execution of this Bond Purchase Agreement by all parties. (4) Official Statement. The County hereby ratifies and approves the Preliminary Official Statement dated May _, 2019 (the "Preliminary Official Statement"), and consents to its distribution and use by the Underwriters prior to the date hereof in connection with the public offering and sale of the Bonds. The County confirms that the Preliminary Official Statement was "deemed final" by the County as of its date for purposes of Rule 15c2-12 of the United States Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). Upon acceptance of this offer, the County shall prepare a final Official Statement and shall, within the earlier of seven (7) business days following the date hereof or two business days prior to the Closing Date (as hereinafter defined), deliver to the Underwriters printed copies of such final Official Statement (such final Official Statement, together with any amendment or supplement thereto, being the "Official Statement") in sufficient quantity as may reasonably be required by the Underwriters in order to comply with the Rule and any applicable rules of the -4- 61 Municipal Securities Rulemaking Board (the "MSRB"). The County hereby authorizes and approves the Official Statement and consents to the use and distribution of the Official Statement by the Underwriters in connection with the public offering and sale of the Bonds. At the time of or prior to the Closing, the Underwriters will file, or cause to be filed, the Official Statement with the MSRB. In addition, the County hereby approves and authorizes the Underwriters to coordinate the printing of the Official Statement and consents to the electronic distribution of the Official Statement. (5) Representations of the County. The County hereby represents, warrants and covenants that: (a) The County is a political subdivision duly organized and validly existing under the Constitution and laws of the State of North Carolina (the "State"), and is authorized pursuant to the laws of the State, including the Act, and the Approving Resolution to issue the Bonds. (b) The County has full legal right, power and authority to (i) adopt the Approving Resolution, (ii) execute, deliver and perform its obligations under this Bond Purchase Agreement, the Trust Agreement, the Bonds, and the Modified Deed of Trust; (iii) issue and deliver the Bonds to the Underwriters as provided in this Bond Purchase Agreement; (iv) approve and authorize the distribution of the Preliminary Official Statement and the Official Statement; and (v) carry out and consummate all other transactions contemplated by this Bond Purchase Agreement, the Trust Agreement, the Bonds, the Modified Deed of Trust and the Official Statement. (c) The Approving Resolution has been duly adopted by the County, and the County has duly authorized all necessary action to be taken by the County for: (i) the offering, issuance, sale, and delivery of the Bonds upon the terms set forth herein and in the Official Statement, (ii) the execution and delivery by the County of the Bonds, this Bond Purchase Agreement, the Trust Agreement, the Modified Deed of Trust, and the performance of its obligations under the Bonds, this Bond Purchase Agreement, the Trust Agreement, the Modified Deed of Trust and any and all such other agreements and documents as may be required to be executed, delivered, and received by the County in order to carry out, give effect to, and consummate the transactions contemplated hereby and by the Official Statement (the Bonds, this Bond Purchase Agreement, the Trust Agreement, the Modified Deed of Trust and such other agreements and documents being collectively referred to herein as the "County Documents"), and(iii) the authorization of the use and distribution of the Official Statement. (d) The Approving Resolution was duly adopted at a meeting of the Board of Commissioners of the County called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and is in full force and effect and has not been amended or repealed. (e) This Bond Purchase Agreement, the Trust Agreement, the Modified Deed of Trust and any other instrument or agreement to which the County is a party in connection with the consummation of the transactions contemplated by the foregoing documents, when executed and delivered by the parties thereto, and assuming such documents are enforceable against the -5- 62 parties thereto other than the County, will constitute legal, valid and binding obligations of the County (subject, as to the enforcement of remedies, to the valid exercise of judicial discretion, the sovereign police powers of the State and constitutional powers of the United States of America and to any valid applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the rights of creditors generally and the exercise of judicial discretion in accordance with general principles of equity). (f) When delivered to and paid for by the Underwriters at the Closing, in accordance with the provisions of this Bond Purchase Agreement, the Bonds will have been duly authorized, executed and delivered by the County and will constitute legal, valid and binding special obligations of the County, enforceable in accordance with their terms (subject, as to the enforcement of remedies, to the valid exercise of judicial discretion, the sovereign police powers of the State and constitutional powers of the United States of America and to any valid applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the rights of creditors generally and the exercise of judicial discretion in accordance with general principles of equity) and will be entitled to the benefits of, and secured as provided in, the Trust Agreement. (g) The County has complied, and will at the Closing be in compliance, in all material respects, with the Approving Resolution, the Trust Agreement and the Act and all other agreements relating to projects undertaken by the County or with respect to which the County has assumed responsibility. (h) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court,public board or body, pending or, to the knowledge of the County, threatened against or affecting the County (or, to the knowledge of the County, any meritorious basis therefor) (i) attempting to limit, enjoin or otherwise restrict or prevent the County from functioning or contesting or questioning the existence of the County or the titles of the present officers of the County to their offices or (ii) wherein an unfavorable decision, ruling or finding would(A) adversely affect the existence or powers of the County or the validity or enforceability of the Bonds, the Approving Resolution, the Trust Agreement, this Bond Purchase Agreement, the Modified Deed of Trust or any agreement or instrument to which the County is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby including, without limitation, the County Documents and the Official Statement; or (B) materially adversely affect (1) the transactions contemplated by the County Documents or the Official Statement, or (2) the exemption of the interest on the Bonds from federal or State income taxation. (i) The County's adoption of the Approving Resolution, its execution and delivery of the County Documents and the Bonds, and compliance with the provisions thereof and hereof, do not and will not conflict with or constitute, on the County's part, a violation of, breach of or default under any material statute, existing law, administrative regulation, filing, decree or order, state or federal, or any provision of the Constitution or laws of the State, or any rule or regulation of the County, or any material indenture, mortgage, lease, deed of trust, note, resolution, or other agreement or instrument to which the County, or its properties, are subject or by which the County, or its properties, are or may be bound or, to the knowledge of the County, -6- 63 any order, rule or regulation of any regulatory body or court having jurisdiction over the County or its activities or properties. 0) The County is not in default in the payment of the principal of or interest on any of its indebtedness for borrowed money and is not in default in any material respect under any document or instrument under and subject to which any indebtedness for borrowed money has been incurred which default would affect materially and adversely the transactions contemplated by any of the County Documents. No event has occurred or is continuing under the provisions of any such document or instrument that, with the lapse of time or the giving of notice, or both, would constitute an event of default thereunder, which event of default would affect adversely the transactions contemplated by any of the County Documents. (k) The County is not in material breach of or in default under the Approving Resolution, any applicable law or administrative regulation of the State or the United States, or any applicable judgment or decree, or any loan agreement, note, resolution or other agreement or instrument to which the County is a party or is otherwise subject, which breach or default would in any way materially adversely affect the authorization or issuance of the Bonds and the transactions contemplated hereby, and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute such a breach or default. (1) On and as of the Closing, all authorizations, consents, and approvals of, notices to, registrations or filings with, or actions in respect of any governmental body, agency, or other instrumentality or court required to be obtained, given, or taken on behalf of the County in connection with the execution, delivery and performance by the County of the County Documents, and any other agreement or instrument to which the County is a party and which has been or will be executed in connection with the consummation of the transactions contemplated by the foregoing documents, will have been obtained, given, or taken and will be in full force and effect. (m) Any certificate signed by an authorized officer of the County delivered to the Underwriters shall be deemed a representation and warranty by the County to the Underwriters as to the truth of the statements made therein. (n) The County has and will cooperate with the Underwriters and their counsel in any endeavor to qualify the Bonds for offering and sale under the securities or "Blue Sky" laws of such jurisdictions of the United States as the Underwriters may request; provided, however, that the County will not be required to execute a general or special consent to service of process or qualify to do business in connection with any qualification or determination in any jurisdiction. (o) The audited financial statements of the County as of June 30, 2018, present fairly the County's financial condition as of such date and the results of its operations for the respective periods set forth therein and have been prepared in accordance with generally accepted accounting principles consistently applied. There has been no material change in the financial affairs of the County since June 30, 2018, except as disclosed specifically in the Official Statement. -7- 64 (p) If between the date of this Bond Purchase Agreement and the date 25 days after the "end of the underwriting period" for the Bonds, as defined in the Rule, any event occurs which might or would cause the Official Statement to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the County shall promptly provide written notice to the Underwriters thereof, and if, in the opinion of the County or the Underwriters, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the County shall at its expense supplement or amend the Official Statement in a form and in a manner approved by the Underwriters. For purposes of this Bond Purchase Agreement, the "end of the underwriting period" shall be deemed to be the Closing Date (as hereinafter defined), unless the Underwriters shall have notified the County to the contrary on or before the Closing Date. (q) If the Official Statement is supplemented or amended pursuant to subsection (p) of this Section, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such subsection) at all times subsequent thereto up to and including the Closing Date, the County shall take all steps necessary to ensure that the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (r) The information in the Preliminary Official Statement (excluding therefrom the information under the captions "INTRODUCTION — Book-Entry Only" and "UNDERWRITING" and in Appendix E, as to which no representations or warranties are made), including its attachments and appendices, at the time of acceptance hereof is correct in all material respects, and such Preliminary Official Statement does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; and the information in the Official Statement (excluding therefrom the information under the captions "INTRODUCTION — Book-Entry Only" and "UNDERWRITING" and in Appendix E, as to which no representations or warranties are made) as of its date and as of the Closing Date, will be true and correct and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. (s) Between the date hereof and the Closing, the County shall not, without the prior written consent of the Underwriters, offer or issue in any material amount any bonds, notes or other obligations for borrowed money, or incur any material liabilities, direct or contingent, except in the course of normal business operations of the County or except for such borrowings as may be described in or contemplated by the Official Statement. (t) Except as described in the Official Statement, during the last five years, the County has not failed to materially comply with any previous undertaking relating to continuing disclosure of information pursuant to Rule 15c2-12. -8- 65 The execution and delivery of this Bond Purchase Agreement by the County shall constitute a representation by the County to the Underwriters that the representations, warranties and covenants contained in this Section 5 are true as of the date hereof, provided that no officer of the County shall be individually liable for the breach of any representation, warranty or covenant made by the County in this Section 5. (6) Closing. At 10:00 a.m., Eastern Time, on May_, 2019, or at such other time or date as the County and the Underwriters shall mutually agree upon (the "Closing Date"), the County shall (a) deliver or cause to be delivered, through the facility of The Depository Trust Company,New York,New York("DTC"), or at such place as the County and Underwriters shall mutually agree upon, for the account of the Underwriters, the Bonds duly executed by the County in fully registered form, bearing proper CUSIP numbers, and registered in the name of Cede & Co., as nominee of DTC, which will act as securities depository for the Bonds; and (b) deliver or cause to be delivered, to the Representative at Charlotte, North Carolina, or at such other place as the County and Underwriters may mutually agree upon, the documents described in Section 7(d) hereof. Concurrently with the delivery of the Bonds and the documents mentioned in Section 7(d) hereof at the Closing, subject to the conditions contained herein, the Underwriters will accept such delivery and will pay the purchase price of the Bonds in the amount set forth in Section 1 hereof by wire transfer in immediately available funds to the Trustee for the account of the County. The Closing shall take place at the offices of the County. The Bonds shall be available for inspection by the Underwriters at least two business days prior to Closing. (7) Closing Conditions/Right to Cancel. The Underwriters enter into this Bond Purchase Agreement in reliance upon the County's representations and agreements herein and the performance by the County of its obligations hereunder, both as of the date hereof and as of the date of Closing. The Underwriters' obligations under this Bond Purchase Agreement are and shall be subject to the following additional conditions: (a) At the time of the Closing, the Approving Resolution, the Trust Agreement, and the Modified Deed of Trust shall be in full force and effect and none of the Approving Resolution, the Trust Agreement, the Modified Deed of Trust or the Official Statement shall have been amended, modified or supplemented, except as may have been approved in writing by the Underwriters, and the County shall have duly adopted, and there shall be in full force and effect, such other resolutions as, in the opinion of Bond Counsel, shall be necessary in connection with the transactions contemplated hereby. (b) The Bonds, as set forth in Section 7, shall be delivered to the Trustee to be held by the Trustee under DTC's FAST program. (c) The Underwriters shall have the right to cancel its obligation to purchase the Bonds at the time of Closing if any of the documents, certificates or opinions to be delivered to the Underwriters hereunder is not delivered at the time of Closing or if, between the date hereof and the time of Closing, one or more of the following occurs: (i) Legislation (whether or not yet introduced in Congress of the United States ("Congress")) shall be enacted or be actively considered for enactment by -9- 66 the Congress or recommended to the Congress by the President of the United States or favorably reported for passage to either House of Congress by any committee of such House, or a conference committee of both Houses, to which such legislation had been referred for consideration, or a decision by a federal court of the United States or the United States Tax Court shall be rendered, or an order, ruling, regulation or official statement by or on behalf of the Treasury Department of the United States or the Internal Revenue Service or other governmental agency shall be made or proposed, or a release or official statement made by the President of the United States or by the Treasury Department of the United States or the Internal Revenue Service, with respect to federal taxation upon revenues or other income of the general character to be derived by the County or upon interest received on obligations of the general character of the Bonds which in the Underwriters' judgment, materially adversely affects the market for the Bonds; or (ii) Legislation shall hereafter be enacted or actively considered for enactment or introduction, with an effective date on or prior to the Closing, or a decision by a court of the United States shall be rendered or a stop order, ruling, regulation or proposed regulation by or on behalf of the Securities and Exchange Commission or other agency having jurisdiction shall be made, to the effect that the issuance, sale and delivery of the Bonds, or any other obligations of any similar public body of the general character of the County is in violation of the Securities Act of 1933, as amended, of the Securities Exchange Act of 1934, as amended, or of the Trust Indenture Act of 1939, as amended or with the purpose or effect of otherwise prohibiting the issuance, sale or delivery of the Bonds, as contemplated hereby, or of obligations of the general character of the Bonds; or (iii) There shall have occurred any outbreak or escalation of hostilities or other national or international calamity or crisis, the effect of such outbreak, calamity or crisis on the financial markets of the United States being such as, in the Underwriters' judgment, would materially adversely affect the market for, or market price of, the Bonds; or (iv) There shall be in force a general suspension of trading on the New York Stock Exchange or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on The New York Stock Exchange whether by virtue of a determination by that Exchange or by order of the Securities and Exchange Commission or any other governmental authority having jurisdiction; or (v) A general banking moratorium shall have been declared by federal, State or New York authorities having jurisdiction, and be in force, or a major financial crisis or a material disruption in commercial banking or securities settlement or clearances services shall have occurred such as to make it, in the judgment of the Underwriters, impractical or inadvisable to proceed with the offering of the Bonds as contemplated in the Official Statement; or (vi) an event shall occur which makes untrue or incorrect in any material respect, as of the time of such event, any statement or information contained in -10- 67 the Official Statement or which is not reflected in the Official Statement but should be reflected therein in order to make the statements contained therein not misleading in any material respect and requires an amendment of or supplement to the Official Statement and the effect of which, in the judgment of the Underwriters, would materially adversely affect the market for the Bonds or the sale, at the contemplated offering prices (or yields), by the Underwriters of the Bonds; or (vii) any of Fitch Ratings Inc. ("Fitch"), Moody's Investors Service, Inc. ("Moody's) or S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC ("S&P") shall have taken any action to lower, suspend or withdraw their respective ratings on the Bonds and such action, in the opinion of the Underwriters, would adversely affect the market price or marketability of the Bonds. (d) At the Closing, the Underwriters shall receive the following documents: (i) Duly executed or certified copies of each of the Trust Agreement and Modified Deed of Trust; (ii) The approving opinion of Bond Counsel in the form set forth in Appendix D of the Official Statement together with a supplemental opinion in form and substance satisfactory to the Underwriters, and a reliance letter addressed to the Underwriters, each of which shall be dated the Closing Date; (iii) The opinion of John L. Roberts, Esq., County Attorney, dated the Closing Date and addressed to the Underwriters and Bond Counsel in form and substance satisfactory to the Underwriters; (iv) An opinion of Pope Flynn, LLC, as counsel to the Underwriters, dated the Closing Date and addressed to the Underwriters in form and substance satisfactory to the Underwriters; (v) A certificate, dated the Closing Date, of the duly authorized representative(s) or officer(s) of the County and in form and substance satisfactory to the Underwriters, to the effect that (A) the representations and agreements of the County herein are true and correct in all material respects as of the date of Closing; (B) there are not pending or, to such officials' knowledge, threatened legal proceedings that will materially adversely affect the transactions contemplated hereby or by the Trust Agreement, or the validity or enforceability of the Bonds, or the security therefor; (C) the financial information relating to the County provided to the Underwriters presents fairly the financial position of the County as of the date indicated therein and the results of its operations for the period specified therein and the financial statements from which such information was derived have been prepared in accordance with applicable law with respect to the period involved; (D) since June 30, 2018, there has not been any material adverse change in the financial condition of the County taken as a whole or no increase in the County's indebtedness for borrowed money, other than as disclosed in the Official Statement or otherwise disclosed in writing to the Underwriters; (E) there are not pending or, to such officials' knowledge, threatened legal proceedings that will materially -11- 68 adversely affect the transactions contemplated hereby or by the Trust Agreement, or the validity or enforceability of the Bonds, or the security therefor; (F) the information contained in the Official Statement as of the Closing Date is true and correct in all material respects and did not and does not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (G) the County has complied with all agreements and satisfied all the conditions on its part required to be performed or satisfied at or prior to the Closing, other than those specified hereunder that have been waived by the Underwriters; (vi) Two copies of the final Official Statement; (vii) One counterpart original of a transcript of all proceedings taken by the County relating to the authorization and issuance of the Bonds; (viii) Specimen Bonds; (ix) A certificate, dated the date of the Closing, of the duly authorized representative(s) or officer(s) of the County, with a copy of the Approving Resolution attached, to the effect that the Approving Resolution has been duly adopted and remains in full force and effect; (x) A certificate, dated on or before the closing date, evidencing the property insurance required by the Trust Agreement; (xi) A pro forma title insurance policy or other evidence of title insurance satisfactory to the Underwriters issued by Investors Title Insurance Company, relating to the Modified Deed of Trust and naming the Trustee as a beneficiary; (xii) Federal tax form 8038-G prepared with respect to the Bonds and ready for filing; (xiii) A tax certificate of the County in form and content reasonably satisfactory to the Underwriters; (xiv) Evidence that Moody's, S&P and Fitch have issued ratings for the Bonds of not less than"Aal," "AA+" and"AA+", respectively; and (xv) Such additional legal opinions, certificates, proceedings, instruments and other documents, as the Underwriters or legal counsel to the Underwriters may reasonably request to evidence compliance by the County with legal requirements relating to the issuance of the Bonds, the truth and accuracy, as of the date of Closing, of all representations contained herein and the due performance or satisfaction by the County at or prior to the date of Closing of all agreements then to be performed and all conditions then to be satisfied as contemplated under this Bond Purchase Agreement and the Trust Agreement. If the County shall be unable to satisfy the conditions to the obligations of the -12- 69 Underwriters contained in this Bond Purchase Agreement or if the obligations of the Underwriters shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and none of the County or the Underwriters shall have any further obligations hereunder, except that Sections 9 and 10 and the representations and warranties of the County contained herein (as of the date made) will continue in full force and effect. (8) Survival. All representations, warranties and agreements of the County set forth in or made pursuant to this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of any investigations made by or on behalf of the Underwriters and shall survive the delivery of and payment for the Bonds. (9) Payment of Expenses. The County shall pay, out of the proceeds of the Bonds or from its own funds, any expenses incident to the performance of the obligations of the County or the Underwriters hereunder, including but not limited to: (i) the cost of the preparation, reproduction, printing, distribution, and mailing, of the Official Statement; (ii) the fees and disbursements of Bond Counsel, counsel for the County and counsel for the Underwriters; (iii) the fees and disbursements of any experts retained by the County or the Underwriters; (iv) fees charged by the rating agencies for the rating of the Bonds; and (v) the cost of qualifying the Bonds under the laws of such jurisdictions as the Underwriters may designate, including filing fees and fees and disbursements of counsel for the Underwriters in connection with such qualification and the preparation of Blue Sky Memoranda. If the Bonds are not delivered to the Underwriters pursuant to this Bond Purchase Agreement, the County shall pay all expenses incident to the performance of the County's and the Underwriters' obligations hereunder as provided in this Section. The Underwriters shall pay (i) any fees of the MSRB in connection with the issuance of the Bonds and(ii) the cost of obtaining CUSIP number(s) assigned for the Bonds. (10) Indemnification. To the extent permitted by law, the County agrees to indemnify and hold harmless the Underwriters, the directors, officers, employees and agents of the Underwriters and each person who controls the Underwriters within the meaning of either the Securities Act of 1933, as amended (the "Securities Act") or the Securities Exchange Act of 1934, as amended(the "Exchange Act") against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities arise out of or are based upon any untrue statement or alleged untrue statement of a material fact (except statements pertaining to the Underwriters) contained in the Preliminary Official Statement, the Official Statement (or in any supplement or amendment thereto), or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (except omissions or alleged omissions pertaining to the Underwriters). This indemnity agreement will be in addition to any liability which the County may otherwise have. The Representative, on behalf of the Underwriters, agrees to indemnify and hold -13- 70 harmless the County, and its officials, directors, officers and employees, and each person who controls the County within the meaning of either the Securities Act or the Exchange Act, to the same extent as the foregoing indemnity from the County to the Underwriters, but only with reference to written information furnished by the Underwriters to the County or information provided by the Underwriters specifically for inclusion in the Preliminary Official Statement or the Official Statement (or in any amendment or supplement thereto). Promptly after receipt by an indemnified party of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party, notify the indemnifying party in writing of the commencement thereof, but the failure so to notify the indemnifying party (i) will not relieve it from liability unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation. The indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought provided, however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if(i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. In the event that the indemnity provided herein is unavailable or insufficient to hold harmless an indemnified party for any reason the County and the Underwriters agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same) to which the County and the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the County on the one hand and by the Underwriters on the other from the offering. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the County and the Underwriters shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the County on the one hand and of the Underwriters on the other in connection with the statements or -14- 71 omissions which resulted in such losses, as well as any other relevant equitable considerations. In no case shall the Underwriters be responsible for any amount in excess of the purchase discount or fee applicable to the Bonds purchased by the Underwriters hereunder. Benefits received by the County shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by it, and benefits received by the Underwriters shall be deemed to be equal to the total purchase discounts and commissions in each case set forth on the cover of the Official Statement. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the County on the one hand or the Underwriters on the other, the intent of the parties and their relative knowledge, information and opportunity to correct or prevent such untrue statement or omission. The County and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Each person who controls an Underwriters within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee and agent of the Underwriters shall have the same rights to contribution as the Underwriters, and each person who controls the County within the meaning of either the Securities Act or the Exchange Act and each official, director, officer and employee of the County shall have the same rights to contribution as the County, subject in each case to the applicable terms and conditions of this paragraph. (11) Notices. Any notice or other communication to be given to the County under this Bond Purchase Agreement must be given in writing (not to include facsimile transmission or electronic mail) to the applicable address shown below, and any notice under this Bond Purchase Agreement to the Underwriters may be given by delivering the same in writing to the Representative as follows: Orange County,North Carolina 200 South Cameron Street Hillsborough,North Carolina 27278 Attention: County Manager FTN Financial Capital Markets 1017 East Morehead St., Suite 201 Charlotte,North Carolina 28204 Attention: Chris Alexander, Senior Vice President (12) Governing Law. This Bond Purchase Agreement shall be governed by and construed in accordance with the laws of the State. (13) Effectiveness. This Bond Purchase Agreement shall become effective upon the acceptance hereof by the County. -15- 72 (14) Arm's-Length Transaction. The County acknowledges and agrees that the purchase and sale of the Bonds pursuant to this Bond Purchase Agreement is an arm's-length commercial transaction between the County and the Underwriters, acting solely as principal and not as municipal advisor, financial advisor or agent of the County. The Underwriters have not assumed a financial advisory responsibility in favor of the County with respect to the offering of the Bonds or the process leading thereto (whether or not the Underwriters, or any affiliate of the Underwriters, has advised or is currently advising the County on other matters) or any other obligation to the County except the obligations expressly set forth in this Bond Purchase Agreement, it being the County's understanding that a financial advisory relationship shall not be deemed to exist when, in the course of acting as an underwriter, a broker, dealer or municipal securities dealer, a person renders advice to an issuer, including advice with respect to the structure, timing, terms and other similar matters concerning a new issue of municipal securities. The Underwriters have provided to the County prior disclosures regarding its role as underwriter, its compensation, any potential or actual material conflicts of interest, and material financial characteristics and material financial risks associated with the transaction to the extent required by MSRB rules. The Underwriters hereby notify the County that the Underwriters are not acting as Municipal Advisors (as defined in Section 15B of the Securities Exchange Act of 1934, as amended), the Underwriters are not agents of the County, and the Underwriters do not have a fiduciary duty to the County in connection with the matters contemplated by this Bond Purchase Agreement. The County has consulted its own legal, financial, and other advisors to the extent it has deemed appropriate. (15) Miscellaneous. (a) If any provision of this Bond Purchase Agreement shall be held or deemed to be or shall, in fact, be inoperative, invalid or unenforceable as applied in any particular case in any jurisdiction or jurisdictions because it conflicts with any provisions of any constitution, statute, rule or public policy, or any other reason, such circumstances shall not have the effect of rendering the provision in question inoperable or unenforceable in any other case or circumstance, or of rendering any other provision or provisions of this Bond Purchase Agreement invalid, inoperative or unenforceable to any extent whatever. (b) This Bond Purchase Agreement may be signed in any number of counterparts, each of which shall which shall be an original, but all of which shall constitute but one and the same instrument. (c) This Bond Purchase Agreement is made solely for the benefit of and is binding on the County and the Underwriters (including successors or assigns of the Underwriters) and no other person shall acquire or have any right hereunder or by virtue hereof. It is the entire agreement of the parties, superseding all prior agreements, and may not be modified except in writing signed by both of the parties hereto. (d) Under this Bond Purchase Agreement, the Underwriters are acting as principals and not as agents or fiduciaries, and the Underwriters' engagement is as independent contractors and not in any other capacity. The County agrees that it is solely responsible for making its own judgments in connection with the offering of the Bonds regardless of whether the Underwriters have or are currently advising the County on related or other matters. -16- 73 (e) On April 1, 2019, Baird Financial Corporation, the parent company of Robert W. Baird & Co. Incorporated ("Baird"), acquired HL Financial Services, LLC, its subsidiaries, affiliates and assigns (collectively "Hilliard Lyons"). As a result of such common control, Baird and Hilliard Lyons are now affiliated. It is expected that Hilliard Lyons will merge with and into Baird later in 2019. [Remainder of Page Intentionally Left Blank] -17- 74 Attachment 4 Very truly yours, FTN FINANCIAL CAPITAL MARKETS, on behalf of itself and as representative of Robert W. Baird& Co., as underwriters By: Its: Approved, accepted and agreed to: ORANGE COUNTY, NORTH CAROLINA By: Bonnie B. Hammersley, County Manager [Signature Page for Bond Purchase Agreement] 75 EXHIBIT A Terms of the Bonds Principal Amounts, Interest Rates and Prices Maturity Date (October 1) Principal Amount Interest Rate Yield Price 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 *Yield to October 1,20_call date at par. Redemption Provisions A-1 76 EXHIBIT B Orange County, North Carolina Limited Obligation Bonds, Series 2019 ISSUE PRICE CERTIFICATE The undersigned, FTN Financial Capital Markets, on behalf of itself and as representative (the "Representative") of Robert W. Baird & Co. Incorporated (together, the "Underwriting Group"), hereby certifies as set forth below with respect to the sale and issuance of the above- captioned obligations (the "Bonds"). 1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A. 2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) The Underwriting Group offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the "Initial Offering Prices") on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. (b) As set forth in the Bond Purchase Agreement, the Underwriting Group has agreed in writing that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, they would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity(the "hold-the-offering-price rule"), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. The Underwriting Group has not offered or sold any Maturity of the Bonds at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period. 3. Defined Terms. (a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the"General Rule Maturities." (b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the "Hold-the-Offering-Price Maturities." (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of(i) the close of the fifth business day after the Sale Date (May , 2019), or(ii) the date on which the Underwriting Group has sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity. B-1 77 (d) Issuer means Orange County,North Carolina. (e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is May_, 2019. (h) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the undersigned's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of Internal Revenue Service Form 8038-G, and other federal income tax advice it may give to the Issuer from time to time relating to the Bonds. The representations set forth herein are not necessarily based on personal knowledge. B-2 78 FTN FINANCIAL CAPITAL MARKETS, on behalf of itself and as representative of Robert W. Baird& Co. Incorporated, as underwriters By: Its: Dated: May_, 2019 B-3 79 Schedule A Sale Prices of the General Rule Maturities and Initial Offering Prices of the Hold-the-Offering Price Maturities Sale Prices of the General Rule Maturities Maturity Date (October 11 Principal Amount Interest Rate Price 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2038 2039 Initial Offering Prices of the Hold the Offering Price Maturities Maturity Date (October Ij Principal Amount Interest Rate Price B-4 80 Schedule B Pricing Wire or Equivalent Communication (Attached) B-5 81 ORANGE COUNTY NORTH CAROLINA Series 2019A Limited Obligation Bonds Final Financing Resolution Gary Donaldson, Chief Financial Officer May 2, 2019 82 Purposi ➢ Limited Obligation Bonds pursuant to NC Statute Section 160A-20 ➢ Payments for the Limited Obligation Bonds, Series 2019A will be made to Trustee by March 25 (for April 1 debt service) and by September 25 (for October 1 debt service); estimated interest rate not to exceed 4% ➢ The Series 2019A Limited Obligation Bonds are secured by a Deed of Trust, with a security interest in various County buildings and land with a total collateral value estimated at $15.7 million ➢ The Series 2019A Limited Obligation Bonds will fund various County projects including: - Vehicles and Equipment (5-8 Years): $4.0 Million - County/School Facility Improvements: $11 .7 Million - Land/ Easements: $0.4 Million - Total: $16.1 Million ORANGE COUNTY NORTH CAROLINA 83 Final Projects to be Financed FY 2018-19 Final Projects Estimated Dollars IT Infrastructure and Governance Council Initiatives 455,410 Sheriff-Body Cameras 300,000 Parks and Recreation Facility Renovations 100,000 Vehicle Replacements 689,328 Solid Waste System-Trucks 984,000 Communication Systems-Portable Radios 505,000 Emergency Services(Backup Center Equipment) 969,000 Facility Improvements(Accessibility/Security/HVAC) 70,000 Link Center Improvements 483,219 IT Broadband Connectivity _ 210,000 Land/Easements(Conservation&Mountains to Sea Trail) 370,000 Schools Facilities Improvements 2,681,499 School Capital 3,000,000 Historic Rogers Road Neighborhood Community Center/ Infrastructure 126,225 Meadowlands Emergency Center Remediation 2,153,209 Government Services Annex Remediation 879,160 Battle Courtroom Remediation 217,000 District Attorney building Remediation 41,143 Solid waste system—High Rock Convenience Center Construction 571,000 Hillsborough EDD—utility projects 1,300,000 Total Projects $ 16,105,193 ORANGE COUNTY NORTH CAROLINA ■ Key Financing Terms 84 ➢ Security Pledge- County collateral Government Services Annex, Government Services Link Center, District Attorney Building, Emergency Operations Center and the Northern Campus Site Land ➢ Maturity Term- 5- 20 Year maturities matches with the useful life of the assets ➢ Estimated Interest Rates- up to 4% subject to market conditions ➢ Maximum Annual Debt Service not exceeding $1 .7 Million (FY 2020-21 ) ➢ Source of Repayment- Property Tax, Article 46 Sales Tax (for Hillsborough EDD Utility) and Solid Waste Fees (for Vehicles and Equipment) ➢ Subordinate Lien and Pledge to General Obligation Bonds ➢ Rating Affirmations- AA1/AA+/AA+ from Moody's, Standard & Poor's and Fitch Ratings ORANGE COUNTY NORTH CAROLINA 85 Key Debt Model Metrics Debt Ratios 10-Year Payback Debt to Assessed Value DS to GF Revenues 2019 71.60% 1.37% 13.44% 2020 63.81% 1.77% 13.53% 2021 65.31% 1.80% 14.59% 2022 65.89% 1.80% 17.94% 2023 66.63% 1.70% 17.14% 2024 68.03% 1.58% 16.19% 2025 69.49% 1.41% 14.76% ORANGE COUNTY NORTH CAROLINA 86 Financing Schedule Wr March 3rd and 6th Public Hearing Notice Advertisement in Herald-Sun and News of Orange March 19th Public Hearing and Board Action Adopting Resolution Supporting LGC Application April 12 and 18th County Submitted LGC Application and Credit Rating Reviews May 2nd Board Action Adopting Final Resolution pursuant to Section 160A-20 of North Carolina General Statutes May 7th LGC Approves Installment Purchase Financing May 30th Installment Purchase Closing -Sign Bond Purchase Agreement on May 23 UKANC.31: C.:UUN I Y NORTH CAROLINA 87 Questions/Comments ORANGE COUNTY