Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
Agenda 10-01-19 Item 6-a - Adoption of the Final Financing Resolution Authorizing the Issuance of $37,000,000 in Installment Purchase Financing for Various CIP Projects Including Refinancing County Debt
1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 1, 2019 Action Agenda Item No. 6-a SUBJECT: Adoption of the Final Financing Resolution Authorizing the Issuance of $37,000,000 in Installment Purchase Financing for Various Capital Investment Plan Projects Including Refinancing Existing County Debt of$16,359,886 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. Draft Preliminary Official Statement Attachment 5. Bond Purchase Agreement Attachment 6. PowerPoint PURPOSE: To adopt the final financing resolution authorizing the issuance of approximately $37,000,000 in installment financing to finance capital investment projects and equipment which includes refinancing $16,359,886 of existing County debt. The financing includes amounts to pay transaction costs. BACKGROUND: At the September 3 and 17, 2019 regular Board meetings, the Board of County Commissioners conducted public hearings and received preliminary information on capital projects and equipment financing and refinancing existing debt obligations. The Board made a preliminary determination to finance these capital projects and equipment, and financing costs by the use of an installment financing, as authorized under Section 160A-20 of the North Carolina General Statutes. The statutes require that the County adopt a financing 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 expects no issues in receiving full LGC approval. If the Board adopts the final financial resolution authorizing final approval for the financing, staff expects the LGC to approve the financing plan at its October 1, 2019 meeting as well. Under 2 the current schedule, staff expects to set the final interest rates and other terms of the financing on October 16, 2019 and to close on the financing in November. FINANCIAL IMPACT: An estimate of maximum debt service applicable to the capital investment projects and equipment financing would require the highest debt service payment of $1.9 million in FY 2020-21. The savings from Refinancing existing debt is $599,561 and consistent with the County's 3% threshold policy which measures the savings as a percentage of the Refinancing Bonds. The tax rate equivalent for the estimated highest debt service payment is approximately 1.2 cents. A portion of this debt financing is related to projects where the debt service payments will be paid from Sportsplex User Fees. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable to this item: • GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND INEQUITY The fair treatment and meaningful involvement of all people regardless of race or color; religious or philosophical beliefs; sex, gender or sexual orientation; national origin or ethnic background; age; military service; disability; and familial, residential or economic status. • GOAL: CREATE A SAFE COMMUNITY The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang activity, substance abuse and domestic violence. • GOAL: ENABLE FULL CIVIC PARTICIPATION Ensure that Orange County residents are able to engage government through voting and volunteering by eliminating disparities in participation and barriers to participation. ENVIRONMENTAL IMPACT: The following Orange County Environmental Responsibility Goal impacts are applicable to this item: • ENERGY EFFICIENCY AND WASTE REDUCTION Initiate policies and programs that: 1) conserve energy; 2) reduce resource consumption; 3) increase the use of recycled and renewable resources; and 4) minimize waste stream impacts on the environment. • RESULTANT IMPACT ON NATURAL RESOURCES AND AIR QUALITY Assess and where possible mitigate adverse impacts created to the natural resources of the site and adjoining area. Minimize production of greenhouse gases. RECOMMENDATION(S): The Manager recommends that the Board approve the final financing resolution authorizing the steps to proceed with the financing of the stated capital projects and equipment and refinancing of existing debt obligations. 3 RES-2019-059 Attachment 1 Resolution providing final approval of terms and documents for Fall 2019 installment financing WHEREAS- The Board of Commissioners has previously determined to carry out various public improvements and acquisitions, as identified in the County's capital improvement plan and as described on Exhibit A. In addition, the Board has previously determined to refinance certain County obligations to achieve savings through lower interest rates. Exhibit B describes some of the existing County obligations that are being evaluated for refinancing. The Board has determined to carry out the financings by using a single 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 C (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, to provide financing for new public assets and improvements and to provide for refinancings. As part of this financing, the County will refinance those obligations as shown on Exhibit B as the Finance Officer may determine. 4 Under the financing plan, the County will receive funds from the sale of the limited obligation bonds to carry out the projects and the refinancings. 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 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; (d) the proposed site of the new Northern County Campus; and (e) the County's Southern Campus in Chapel Hill. 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 the Documents when in final form. 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 $37,000,000, an annual true interest cost of the financing not to exceed 3.75%, and a financing term not to extend beyond December 31, 2039. Any obligations to be refinanced should be refinanced over approximately the same financing term as the existing obligation. 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 Robert W. Baird & Co. Incorporated, as senior manager, and FTN Financial Capital Markets, 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 2 5 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. 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. Call of Existing Obligations for Prepayment -- The Board authorizes the Finance Officer to make, on the County's behalf, an irrevocable call for redemption or prepayment of such of the obligations shown on Exhibit B as the Finance Officer deems beneficial to the County. The Finance Officer will make this call for redemption by the execution and delivery of an appropriate certificate in connection with the original delivery of the planned limited obligation bonds. 5. 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 3 6 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. 6. 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 Trustee under the Supplemental Trust Agreement referenced in Exhibit B. 7. 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. 4 7 Exhibit A - list of projects to be financed with estimated amounts Component Estimated Cost Northern Campus Project: site preparation and preliminary costs for new detention center, agriculture-environment center, and parks operations base $10,019,850 i Southern Campus Project: improvements to the driveway and access road to the Southern Campus, as well as providing additional parking for the Seymour Center 4,675,000 Seymour Center Building Expansion 990,000 River Park Phase II 298,500 Passmore Center Remediation 199,114 Sportsplex Improvements/ Equipment 605,036 Community Loan Fund 224,340 Vehicle Replacements 1,030,550 Whitted Building — Elevator Work 154,000 Emergency Services Building Remediation 731,000 Total 18,927,390 The County will also use additional loan proceeds to pay financing costs. 5 8 Exhibit B - refunding candidates 2010 General Obligation Refunding Bonds 2011 General Obligation Refunding Bonds 2012 DENR State water loan 2012 Limited Obligation Bonds 2013 SunTrust installment financing 2016 First Bank installment financing 6 9 Exhibit C -- Draft Documents (a) A draft dated September 10, 2019, of a Second Supplemental Trust Agreement to be dated on or about November 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 September 10, 2019, of a Deed of Trust Supplement #2 to be dated on or about November 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 limited obligation bonds and the other financing documents. (c) A draft of a Bond Purchase Agreement to be dated on or about October 16, 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. 7 10 Attachment 2 s*h draft of September 10 Prepared by and return after recording to: Robert M. Jessup Jr. Sanford Holshouser LLP 209 Lloyd St., Suite 350 Carrboro, NC 27510 DEED OF TRUST SUPPLEMENT #2 PINS 9874-15-3612 9864-39-2344, 9864-39-8253, 9864-39-7758 9874-80-2738 9788-15-1996 [New parcel PINs to come] 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 [Will need to add Southern Campus sites as well] (supplements RB 6486, Page 413, and RB 6613, Page 17) STATE OF NORTH CAROLINA ) The collateral is or includes fixtures. ORANGE COUNTY ) This instrument secures future advances. 11 DEED OF TRUST SUPPLEMENT #2 THIS DEED OF TRUST SUPPLEMENT #2 (this "Supplement") is dated as of November 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 [$50,000,000] Limited Obligation Bonds, Series 2019B (the "2019B Bonds"), under a Second Supplemental Trust Agreement dated as of November 1, 2019 (the "2019B Agreement"), between the County and BNY-M, as trustee. The County is issuing the 2019B 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 2019B Agreement supplements a Trust Agreement dated as of June 1, 2018 (the "2018 Agreement"), between the County and BNY-M, as trustee, which the parties previously supplemented by a First Supplemental Trust Agreement dated as of May 1, 2019 (as supplemented, the "Prior Agreement"). Under the Prior Agreement, the County issued its $7,510,000 Limited Obligation Bonds, Series 2018, and its $14,135,000 Limited Obligation Bonds, Series 2019A (together, the "Prior Bonds"), and secured its repayment obligation with respect to the Prior Bonds by granting a security interest in property pursuant to the Existing Deed of Trust, as defined below. The parties have now agreed that additional property will be added to the property that secures the County's obligations under the Prior Bonds, and that all this property (the "Mortgaged Property," as defined below) will also secure the County's repayment obligations under the 2019B Bonds as provided in the 2019B 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 2 12 June 1, 2018 (the "2018 Deed of Trust") and recorded at RB 6486, Page 413, Orange County Registry, which has been previously supplemented by the Deed of Trust Supplement dated as of May 1, 2019 and recorded at RB 6613, Page 17, Orange County Registry (that supplement together with the 2018 Deed of Trust, the "Existing Deed of Trust). The Existing Deed of Trust, as modified by this Supplement, is referred to as the "Modified Deed of Trust" in this Supplement. The Mortgaged Property includes the real property and facilities described in Exhibits A-1 and A-2. The County is the record owner of that real property. The County executes and delivers this Supplement to secure current advances under the 2019B Agreement of [$50,000,000] as well as (1) outstanding advances under the Prior Agreement with respect to the Prior Bonds of approximately $20,850,000, and (2) potential future advances up to a total maximum principal amount of$200,000,000, all as described and pursuant to the Existing 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 the Modified Deed of Trust is October 1, 2039. NOW, THEREFORE, (1) in consideration of the execution and delivery of the 2019B Bonds and the 2019B 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 Existing Deed of Trust, the Prior Agreement, the 2019B Agreement, the Prior Bonds and the 2019B Bonds (together, the "Loan Documents"), and (3) to charge the Mortgaged Property 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 following (collectively, the "Mortgaged Property"): (a) the Mortgaged Property as that term is defined in the Existing Deed of Trust, which includes the real property and all related improvements and fixtures show on Exhibit A-1; 3 13 (b) the property described in Exhibit A-2 and any real property later acquired by the County in exchange for, or in consideration of the exchange of, or with the proceeds from any disposition of, all or any part of any property described in this paragraph, and in all cases together with all easements, rights, rights-of-way and appurtenances belonging to any of that property (collectively, the "2019B Sites"); and (c) all buildings and other improvements and fixtures (including any "Fixtures," as defined in Section 1-4 of the 2018 Deed of Trust) now or later attached to or used in or on those improvements or the 2019B Sites, including (i) all renewals, replacements, and additions, (ii) all articles in substitution, (iii) all building materials for construction, improvement, modification or repair of improvements upon their delivery to the 2019B Sites, and (iv) all proceeds of all the foregoing in whatever form resulting from the loss or disposition of the foregoing, including all proceeds of and unearned premiums for any insurance policies covering the 2019B Sites and the improvements, proceeds of title insurance and payments related to the exercise of condemnation or eminent domain authority, and all judgments or settlements in lieu of any of the foregoing; 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 void and will be canceled of record at the County's request and cost, and title will revest 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 the Modified Deed of Trust, including directing the Deed of Trust Trustee to sell the Mortgaged Property under power of sale. 4 14 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 Prior Agreement and the 2019B 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 Prior 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 Existing Deed of Trust. The total amount, including present and future obligations, that may be secured by the Modified Deed of Trust at any one time is $200,000,000. The period within which future obligations maybe incurred is 30 years from June 1, 2018. 1-3 Existing Deed of Trust Otherwise Confirmed. Except as provided by this Supplement, the County ratifies, approves and confirms the terms of the Existing Deed of Trust. 1-4 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. 5 15 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. (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 2019B 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 2019B 6 16 Financing for Orange County, 10161 Centurion Parkway North, Jacksonville, FL 32256 (iii) if to BNY-M, to The Bank of New York Mellon Trust Company, N.A., Re: Notice for 2019B 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 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 the Modified Deed of Trust Supplement run with the real estate encumbered by the Modified Deed of Trust. 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 17 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.] 8 18 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 , 2019. [SEAL] Notary Public My commission expires: [Deed of Trust Supplement dated as of November 1, 2019 for the benefit of The Bank of New York Mellon Trust Company, N.A., as Trustee] 9 19 EXHIBIT A-1 - Pledged Sites Description Sites). TRACT 1 [Government Service Annex, Link Center and District Attorneys' Office]: 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, 2018 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 Tilley" by Riley Surveying, P.A., dated January 22, 2018 and recorded in Plat Book 118, Page 105, Orange County Registry. 10 20 Address: 520 Orange Heights LP, Hillsborough, NC 27278 PIN: 9864-39-8253 LESS AND EXCEPT: Beginning at an existing iron pipe located in the southern Right-of-Way of US 70 (commonly known as Cornelius Street), a 100' public Right-of-Way, said existing iron pipe having NC Grid Values: N(Y) 850,011.75 E(X) 1,963,800.94 (NAD' 83(2011)) and being the northernmost common corner between Orange County (PIN: 9864-39-7758) and William and Donna Holloway (PIN: 9864-49-0515) as shown in Plat Book 118, Page 105 of the Orange County Registry; thence S 1099'03" E 417.73' to an existing iron pipe; thence S 81245'57" W 42.04' to an iron pipe set; thence S 04249'41" E 266.09' to a set iron pipe in the common line of Orange County (PIN: 9864- 39-8253) and William and Donna Holloway (PIN: 9864-49-0515), the TRUE POINT OF BEGINNING; thence, with said common line, S 89°27'33" E 317.14' to an existing iron stake at the common corner of Orange County (PIN: 9864-39-8253), William and Donna Holloway (PIN: 9864-49-0515), and Lisa Hall (PIN: 9864-69-4322); thence, with Halls' western line, S 02036'37" E 419.74' to an existing iron stake in the northern Right-of-Way of Orange Heights Loop, a 30' public Right-of-Way; thence, with said Right-of- Way, N 89°35'47" W 200.52' to an existing iron stake at Frances Hendricks' northeast corner (PIN: 9864-38-8872); thence, with Hendricks' northern line, N 89°55'08" W 100.18' to a set iron pipe at Orange County's southeast corner (PIN: 9864-39-8253); thence, a new line through the Orange County property, N 04°49'40" W 422.24' to the point or place of beginning having an area of 2.976 acres, more or less. 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, 2018 and recorded in Plat Book 118, Page 105, Orange County Registry. Address: 1020 US 70 West, Hillsborough, NC 27278 PIN: 9864-39-7758 21 LESS AND EXCEPT: Beginning at an existing iron pipe located in the southern Right-of-Way of US 70 (commonly known as Cornelius Street), a 100' public Right-of-Way, said existing iron pipe having NC Grid Values: N(Y) 850,011.75 E(X) 1,963,800.94 (NAD' 83(2011)) and being the northernmost common corner between Orange County (PIN: 9864-39-7758) and William and Donna Holloway (PIN: 9864-49-0515) as shown in Plat Book 118, Page 105 of the Orange County Registry; thence, S 10239'03" E 330.73' to a set iron pipe in the common line of Orange County and William and Donna Holloway, the TRUE POINT OF BEGINNING; thence, with said line, S 10°39'03" E 87.00' to an existing iron pipe; thence, with said line S 81°45'57" W 42.04' to a set iron pipe; thence, a new line through the Orange County property, N 15035'05" E 95.02' to the point and place of beginning, having an area of 0.042 acres, more or less. 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 16' 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 26, 1996 and recorded in Plat Book 75, Page 146, in the Orange County Registry. PIN Number: 9874-80-2738 12 22 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 EXHIBIT A-2 - Pledged Sites Description Tracts). [Start numbering with Tract 5] [Descriptions to come] 13 23 EXHIBIT B -- Existing Encumbrances As to all Tracts: the Deed of Trust and Security Agreement granted by the County for the benefit of BNY-M dated as of June 1, 2018, and recorded at RB 6486, Page 413, Orange County Registry, as supplemented by the Deed of Trust Supplement dated as of May 1, 2019 and recorded at RB 6613, Page 17, Orange County Registry (that supplement together with the 2018 Deed of Trust, is referred to as the "Existing Deed of Trust" in this instrument.) 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. 14 24 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. 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. [Exceptions for new tracts to come] 15 25 Attachment 3 s*h draft of September 10 Second 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 [$501000,000] Limited Obligation Bonds Series 2019B 26 THIS SECOND SUPPLEMENTAL TRUST AGREEMENT is dated as of November 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 issuance of [$50,000,000] Limited Obligation Bonds, Series 2019B (the "2019B Bonds"). RECITALS The County and the Trustee executed and delivered a Trust Agreement dated as of June 1, 2018 (the "2018 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 2019B Bonds as additional bonds under the Trust Agreement. The 2019B Bonds are issued and secured on a parity with the 2018 Bonds. The County is issuing the 2019B Bonds to provide funds to be used, together with other available funds, on a project (the "2019B Project") to acquire, construct, equip and otherwise improve a variety of County facilities and assets, including those described in Exhibit A, to refinance certain existing County financing obligations, and to pay financing costs and other related costs. Each of the 2019B 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 'Prior Agreement,"as defined in Exhibit B. 1 27 NOW, THEREFORE, in consideration of the covenants contained in this Supplemental Agreement, the parties agree as follows: ARTICLE I THE 2019B Bonds Section 1.01. Provision for 2019B Bonds; Advance. (a) The County will issue, and the Trustee will authenticate and deliver, 2019B Bonds in an aggregate principal amount of [$50,000,000]. (b) The County acknowledges that the amount paid to it from the issuance and sale of the 2019B Bonds is equal to the face amount of the 2019B Bonds (i) reduced by the amount of a discount for the underwriting of the 2019B Bonds and (ii) increased by the net original issue premium in the offering of the 2019B Bonds. This total amount is $ . The County will use the amount paid as provided in this Supplemental Agreement to pay 2019B Project Costs, including Refinancing Costs. Section 1.02. Bonds Constitute Installment Contracts. Each of the 2019B Bonds, together with the County's corresponding obligations under the Trust Agreement and the Deed of Trust, constitutes a separate "installment contract" within the meaning of Section 160A-20 between the County and the owner of that Bond. The County's payment obligations, and its other obligations under this Agreement and with respect to the Bonds, are secured by the lien on the Mortgaged Property created under the Deed of Trust and by the other security provided for in the Trust Agreement. Section 1.03. Agreement Supplements 2018 Agreement; 2019B Bonds Are Additional Bonds. (a) This Supplemental Agreement is a "supplemental agreement" for the issuance of Additional Bonds as provided in the 2018 Agreement, and the 2019B Bonds are "Additional Bonds" as defined in the 2018 Agreement. (b) Except as modified by this Supplemental Agreement, all terms of the Prior Agreement remain in effect and apply with respect to the 2019B Bonds to the same extent as to all Prior Bonds. The continuing disclosure obligations set out in 2 28 Section 4.01 of the First Supplemental Trust Agreement between the County and the Trustee dated as of May 1, 2019 apply to the County with respect to the 2019B Bonds. Section 1.04. Form and Details; Payments. The 2019B Bonds will be designated "Limited Obligation Bonds, Series 2019B," and will be in substantially the form of Exhibit C, with changes as the Trust Agreement may permit or require. The 2019B Bonds will be numbered R-1 upward for identification. The 2019B Bonds are payable as to interest semiannually 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 [to come] Exhibit D shows a schedule of payments due on the 2019B Bonds with respect to each Payment Date. Upon any redemption of the 2019B 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. Redemption Dates and Prices. The 2019B Bonds are subject to redemption as described in Section 2.01. Section 1.06. Delivery of 2019B Bonds. The Trustee will authenticate and deliver the 2019B Bonds when it has received the following items: a) Certified copies of County Board resolutions (i) approving the terms and conditions under which the 2019B Bonds are to be executed and 3 29 delivered and (ii) authorizing the execution, delivery and issuance of the 2019B Bonds, this Supplemental Agreement, and Deed of Trust Supplement #2 (as described in Exhibit B) b) Evidence satisfactory to the Trustee that the LGC has approved the issuance of the 2019B Bonds c) An executed copy of this Supplemental Agreement d) An executed copy of Deed of Trust Supplement #2, which extends the benefit of the security provided to the Trustee under the Prior Deed of Trust to secure the County's performance of its obligations under this Supplemental Agreement and 2019B Bonds, as contemplated by Section 1.06(iv) of the 2018 Agreement e) An Opinion of Bond Counsel to the effect that the execution and delivery of the 2019B Bonds as Additional Bonds is permitted under the terms of the Prior 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 2019B 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 2019B Bonds, and including the instrument referenced in (d) above as an insured instrument Section 1.07. Limited Obligation. The 2019B Bonds are limited obligations of the County, as provided and described in Section 4.05 of the 2018 Agreement. ARTICLE II REDEMPTION 4 30 Section 2.01. Redemption Dates and Prices. The 2019B Bonds maturing on or after October 1, 2030, are subject to redemption at the County's option, in whole or in part on any date on or after October 1, 2029, upon payment of the principal amount to be redeemed plus interest accrued to the redemption date, without premium. Section 2.02. Selection of 2019B Bonds for Redemption. (a) If less than all the 2019B Bonds are to be redeemed, they will be redeemed among maturities in any manner the County chooses. (b) If less than all of the 2019B Bonds of any maturity are to be redeemed, the Trustee must select the 2019B 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 2019B Bonds, if less than all of the 2019B Bonds within a maturity are to be redeemed, the parties agree that DTC may determine which of the 2019B 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 2019B Bond to be redeemed must be in the principal amount of $5,000 or some integral multiple thereof, and (ii) in selecting 2019B Bonds for redemption, each 2019B Bond will be considered as representing that number of 2019B Bonds which is obtained by dividing the principal amount of that 2019B Bond by $5,000. If a portion of a 2019B Bond is called for redemption, the County will prepare, and the Trustee will deliver a new 2019B Bond of the same series in principal amount equal to the unpaid portion to the registered owner upon the surrender of the 2019B 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 2019B 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); 5 31 (ii) For any 2019B Bonds for which no book-entry-only system of registration is in effect, to each of the registered owners of those 2019B Bonds at their addresses as shown on the Trustee's registration books, by registered or certified mail; and (iii) In any case, both (A) to the MSRB for posting on the EMMA System and (B) to the LGC. 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. Notwithstanding anything in this Supplemental Agreement to the contrary, the only remedy for the Trustee's failure to post any notice (not limited to redemption notices) with the EMMA system will be an action by the holders of the 2019B Bonds, as applicable, for specific performance or similar remedy to compel performance. 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 2019B 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 2019B Bonds with respect to which the notice specified in (i) or (ii) is correctly given. Any notice mailed as provided in this Supplemental Agreement will conclusively be presumed to have been given regardless of whether received by any Owner. (b) Any redemption notice 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 2019B Bonds to be prepaid; or (ii) any other condition not unacceptable to the Trustee. 6 32 If a notice contains a condition and the Trustee either (i) does not receive moneys sufficient to pay the principal of and interest on the 2019B 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. (c) Each redemption notice must specify (i) the complete designation of the 2019B Bonds to be redeemed, (ii) the CUSIP numbers of the 2019B Bonds to be redeemed, (iii) the dated dates, maturity dates and interest rates of the 2019B 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 2019B 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 2019B 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. 2019B 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 2019B Bonds called for redemption, the 2019B Bonds (or portions of 2019B Bonds) called for redemption cease to accrue interest from and after the redemption date. Thereafter, those 2019B 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. ARTICLE III 7 33 DEPOSIT AND USE OF 2019 PROCEEDS; OTHER FUNDS Section 3.01. Disbursement of Proceeds. The Trustee will apply proceeds from the sale of the 2019B Bonds as provided in the certificate described in Section 1.06(f). Section 3.02. Creation and Use of 2019B Proceeds Fund. The Trustee will establish a special fund designated as the "Orange County 2019B 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 2019B 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 2019B Proceeds Fund during the continuation of any Event of Default. Section 3.03. Deposits to 2019B Proceeds Fund; Payment of Project Costs. (a) The Trustee will deposit into the 2019B 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 2019B Proceeds Fund. (b) The Trustee will disburse moneys in the 2019B Proceeds Fund from time to time, either to pay 2019B Project Costs (including Refinancing 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 2019B 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) December 15, 2022, or (b) receipt of a County Certificate stating that there are no more 2019B Project Costs to be paid from the 2019B Proceeds Fund, 8 34 the Trustee will withdraw all remaining moneys in the 2019B Proceeds Fund and deposit those moneys in the Payment Fund. The Trustee will then apply those moneys to Bond payments as directed by a County Representative. In the absence of any direction from the County, the Trustee will deposit those moneys in the Interest Account and use them to pay interest on the 2019B 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 2019B Bonds as to the 2018 Bonds and all Bonds generally. ARTICLE IV MISCELLANEOUS PROVISIONS Section 4.01. Notices. (a) Any communication provided for in this Supplemental Agreement or the 2019B Bonds must be in writing (not to include facsimile transmission or electronic mail, except as provided in Section 3.03). (b) 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. (c) Any communication under this Supplemental Agreement 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 2019B LOBS Trust Agreement, Post Office Box 8181, Hillsborough, NC 27278 9 35 (ii) if to the Trustee, to The Bank of New York Mellon Trust Company, N.A., Re: Notice for 2019B 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 2019B Orange County LOBS Financing, Bonds, Longleaf Building, 3200 Atlantic Ave., Raleigh, NC 27604 (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 4.02. Definition of "Restricted Yield." With respect to the 2019B 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 _ Section 4.03. Consent to Jurisdiction. The Trustee consents to jurisdiction in the State of North Carolina for any lawsuit arising from this Supplemental Agreement, or from any of the related transactions contemplated by this Supplemental Agreement. Section 4.04. 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 2019B Bonds gives any person other than the Trustee, the County and the Owners any right, remedy or claim under or with respect to this Supplemental Agreement. 10 36 Section 4.05. 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 4.06. 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 4.07. 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 B, and if not defined there will have the meanings set forth in the Prior Agreement. This Supplemental Agreement will be interpreted in accordance with the rules of interpretation set forth in the 2018 Agreement. [The remainder of this page has been left blank intentionally.] 11 37 IN WITNESS WHEREOF, the parties have caused this Second Supplemental Trust Agreement to be executed in their corporate names by their duly authorized officers, all as of November 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 [Second Supplemental Trust Agreement dated as of November 1, 2019] 12 38 Exhibit A - list of projects to be financed with estimated amounts Component Estimated Cost Northern Campus Project: site preparation and preliminary costs for new detention center, agriculture-environment center, and parks operations base $10,600,000 Southern Campus Project: improvements to the driveway and access road to the Southern Campus, as well as providing additional parking for the Seymour Center 4,675,000 Seymour Center Building Expansion 990,000 River Park Phase II 298,500 Link Center Remediation 6,500,000 Passmore Center Remediation 199,114 Sportsplex Improvements/ Equipment 605,036 Community Loan Fund 224,340 Vehicle Replacements 998,550 Whitted Building - Elevator Work 154,000 Emergency Services Building Remediation 731,000 Total 25,975,540 The County also expects to use financing proceeds to pay Financing Costs and Refinancing Costs. The amounts stated above are estimates only. The County may use any portion of the 2019B Bond proceeds for any of the 2019B Project Costs, subject to the County's obligation to undertake and complete those components of the project related to the "Mortgaged Property," as defined in the Deed of Trust, and the limitation on the use of funds only for 2019B Project Costs. Components of the 2019B Project related to the Mortgaged Property include the following: 13 39 • The Northern Campus improvements described in the table above • The Southern Campus and Seymour Center improvements described in the table above • The Link Center and Emergency Services Building remediations referenced in the table above 14 40 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. "2019B Bonds" means the County's Limited Obligation Bonds, Series 2019B, originally issued in the aggregate principal amount of [$50,000,000] pursuant to the Prior Agreement and this Supplemental Agreement. "2019B Proceeds Fund" means the Orange County 2019B Proceeds Fund established pursuant to Section 3.02. "2019B Project" has the meaning assigned in the preambles to this Supplemental Agreement. "2019B Project Costs" means "Project Costs," as defined in the 2018 Agreement, related to the 2019B Project. "Deed of Trust" means the Prior Deed of Trust as modified by the "Deed of Trust Supplement #2" dated as of November 1, 2019, also granted by the County for the Trustee's benefit. "Payment Date" with respect to the 2019B Bonds means each April 1 and October 1, beginning October 1, 2020. "Prior 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 supplemented by the First Supplemental Trust Agreement between the parties dated as of May 1, 2019. "Prior Bonds" means the County's Limited Obligation Bonds, Series 2018, originally issued in the aggregate principal amount of $7,510,000, and its Limited Obligation Bonds, Series 2019A, originally issued in the aggregate principal amount of$14,135,000, each issued pursuant to the Prior Agreement. 15 41 "Prior Deed of Trust" means the Deed of Trust and Security Agreement dated as of June 1, 2018, from the County to a Deed of Trust Trustee for the County's benefit, as supplemented by the Deed of Trust Supplement dated as of May 1, 2019. "Refinancing Costs" means the costs of principal, interest, prepayment premium or penalty and any similar costs required to pay in full all the County's obligations with respect to the following County borrowings: [2010 General Obligation Refunding Bonds; 2011 General Obligation Refunding Bonds; 2012 DENR State water loan; 2012 Limited Obligation Bonds; 2013 SunTrust installment financing; 2016 First Bank installment financing] [will use formal, complete names once we have a final selection] "Supplemental Agreement" means this Second Supplemental Trust Agreement, as it may be properly amended or supplemented from time to time. "Trust Agreement" means the Prior Agreement as modified and supplemented by this Supplemental Agreement, as it may be further amended or supplemented from time to time. All other capitalized terms used in this Second Supplemental Trust Agreement and not otherwise defined have the meanings ascribed thereto in the 2018 Agreement. 16 42 Exhibit C - Form of 2019B Bond Number R- REGISTERED REGISTERED LIMITED OBLIGATION BOND, SERIES 2019B ORANGE COUNTY, NORTH CAROLINA INTEREST RATE MATURITY DATE DATED DATE CUSIP % October 1, 20xx November 5, 2019 684566 XXX REGISTERED OWNER: *****CEDE & CO.***** PRINCIPAL AMOUNT: **** _ DOLLARS ($ )**** 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, 2020, 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, 2020, 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 17 43 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 [$50,000,000] Limited Obligation Bonds, Series 2019B (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 agreements between the County and that Trustee and dated (1) as of May 1, 2019, and (2) as of November 1, 2019 (as supplemented, 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 supplements dated (1) as of May 1, 2019, and (2) as of November 1, 2019 (as supplemented, the "Deed of Trust"). The security provided to owners of the Bonds under the Deed of Trust and otherwise is on parity with the security provided to owners of prior bonds issued under the Trust Agreement. Additional Bonds secured by a parity interest in the 18 44 property securing the Bonds may be issued under the terms and conditions set forth in the Trust Agreement. Reference is made to the Trust Agreement and the Deed of Trust 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 are executed, delivered and secured, to all of which provisions the owner of this Bond, by the acceptance of this Bond, agrees. 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. Prior to any transfer of any Bonds outside of the book-entry only system as contemplated above (including, but not limited to, the initial transfer outside the book-entry only system), the transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under the United States Internal Revenue Code Section 6045, as amended. The Trustee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information. 19 45 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, 2030, are subject to redemption at the County's option in whole or in part on any date on or after October 1, 2029, 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. If less than all the Bonds of any maturity are called for redemption, the Trustee will select the Bonds to be redeemed by lot; provided, however, that so long as a book-entry system with DTC is used for recording beneficial ownership of Bonds, if less than all of the Bonds within a maturity are to be redeemed, DTC and its participants will determine which of the Bonds within any such maturity are to be redeemed. In any case, (1) the portion of any Bond to be prepaid will be in the principal amount of $5,000 or some integral multiple thereof, and (2) in selecting Bonds for redemption, each Bond will be considered as representing that number of Bonds which is obtained by dividing the principal amount of that Bond by $5,000. If a portion of a Bond is called for redemption, a new Bond in principal amount equal to the unpaid portion will be issued to the registered owner upon the surrender of the Bond. The Trustee will send notice of redemption to DTC or its nominee as the Owner of the Bonds as provided in the Trust Agreement. The Trustee will send the notice not more than 60 days nor less than 30 days prior to the date fixed for redemption. Neither the Trustee nor the County is responsible for sending notices of redemption to anyone other than DTC or its nominee, so long as all the Bonds to be redeemed are held in a book-entry-only form with DTC. If on or before the date fixed for redemption funds have been deposited with the Trustee to pay the principal and interest accrued to the redemption date with respect to the Bonds called for redemption, the Bonds or portions thereof thus called for redemption will cease to accrue interest from and after the redemption 20 46 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. 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. 21 47 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 [$50,000,000] Limited Obligation Bonds, Series 2019B] 22 48 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 Second Supplemental Trust Agreement dated as of November 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 [$50,000,000] Limited Obligation Bonds, Series 2019131 23 49 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. 24 50 EXHIBIT D - Schedule of Payments on 2O19B Bonds Principal is payable in the amounts and on the dates as shown below, subject to redemption of the 2019B Bonds as provided in this Supplemental Agreement. Interest is payable on the dates shown below. The 2019B 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. The County's obligation with respect to the 2019B Bonds on each Payment Date is the amount shown below as the "total payment" for that date, subject to adjustment as provided in Section 3.05(c) of the 2018 Agreement. 251" day of the month preceding -- Principal Interest Total Payment 10/1/2020 4/1/2021 - 10/1/2021 25 51 Exhibit E - Form of Requisition [Date] The Bank of New York Mellon Trust Company, N.A.,as Trustee Attention: Corporate Trust Regarding: Requisition under 2019B Supplemental 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 Second Supplemental Trust Agreement dated as of November 1, 2019 (the "2019B Agreement"), with Orange County, North Carolina (the "County") To the Trustee: Pursuant to the terms and conditions of the 2019B Agreement, the County authorizes and requests the disbursement of funds from the "Orange County 2019B Proceeds Fund" established under that 2019B Agreement for the costs described below. Capitalized terms used in this requisition and not otherwise defined have the meanings ascribed in the 2019B Agreement. This is requisition number 2019 - from the 2019B Proceeds Fund. Total Amount for Disbursement Payee Payee's address 26 52 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 2019B 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 27 53 Attachment 4 MW Draft of 08/16/2019 PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER_,2019 NEW ISSUE BOOK-ENTRY ONLY Ratings:Moody's: [_] 0 Fitch: [_] ti c In the opinion of Bond Counsel, under existing law and subject to conditions described under "TAX TREATMENT" ' herein, interest on the 2019B Bonds paid by the County(1) is not includable in the recipient's gross income for federal income ti �� tax purposes, (2) is not an item of tax preference for purposes of the federal alternative minimum income tax, and(3) is exempt from current State of North Carolina income taxes. See "TAX TREATMENT"herein for additional information regarding other O federal,State and local tax consequences arising from ownership or receipt of interest on the 2019B Bonds. ORANGE COUNTY,NORTH CAROLINA LIMITED OBLIGATION BONDS,SERIES 2019B a o 2 0 qDated:Date of Delivery Due: October 1,as shown on the inside front cover This Official Statement has been prepared by Orange County,North Carolina(the"County")to provide information on �c 5 the Orange County, North Carolina, Limited Obligation Bonds, Series 2019B (the "2019B Bonds"). Selected information is presented on this cover page for the convenience of the user. Investors must read the entire Official Statement to obtain 2 information essential to the making of an informed investment decision. Security: The payment by the County of the principal of and interest on the 2019B Bonds is limited to funds appropriated for that purpose by the Board of Commissioners for the County in its sole o discretion, except to the extent payable from Bond proceeds, investment earnings, Net U s Proceeds related to casualty or condemnation proceeds, or amounts derived from the 0 enforcement of remedies on default. W As security for the 2019B Bonds, the Prior Bonds and all other Bonds issued under the Trust o Agreement(as such terms are defined herein),the County has executed and delivered a deed of trust, as amended, and will execute and deliver a second supplement to such deed of trust ogranting, among other things, a lien of record on the Mortgaged Property subject to Permitted Encumbrances(as such terms are defined herein). e THE OBLIGATION TO MAKE PAYMENTS WITH RESPECT TO THE 2019B BONDS IS NOT A 0 GENERAL OBLIGATION OF THE COUNTY, AND THE TAXING POWER OF THE COUNTY IS NOT q ,o PLEDGED DIRECTLY OR INDIRECTLY TO SECURE ANY MONIES DUE TO THE OWNERS OF THE '44 5 2019B BONDS. See the caption"SECURITY AND SOURCES OF PAYMENT OF 2019B BONDS"herein. O Redemption: The 2019B Bonds are subject to redemption as described herein. 0 0 Purpose: Proceeds of the 2019B Bonds will be used to (1) finance the acquisition, construction, h o equipping and improvement of certain County facilities as further described herein,and(2)pay o o certain costs incurred in connection with the issuance of the 2019B Bonds. O w Interest Payment Dates: April 1 and October 1 of each year,commencing October 1,2020. oo Denomination: $5,000 or integral multiples thereof. � U O q Delivery: On or about November 5,2019. 0 i Bond Counsel. Sanford Holshouser LLP W ti County Attorney: John L.Roberts,Esq. Financial Advisor: Davenport&Company LLC Underwriters'Counsel: McGuireWoods LLP J o Trustee: The Bank of New York Mellon Trust Company,N.A. y •2 Baird FTN Financial Capital Markets o The date of this Official Statement is October 2019. 5 d o ro v U h U 5 *Preliminary,subject to change. 54 MATURITY SCHEDULE FOR 2019B BONDS* $[ ] Serial 2019B Bonds Due Principal Interest October 1 Amount Rate Yield CUSIP"` 2020 $ 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 [$ %Tenn 2019B Bonds due October 1,20 Yield %,CUSIP **] Preliminary,subject to change. -CUSIP®is a registered trademark of the American Bankers Association. CUSIP Global Services is managed on behalf of the American Bankers Association by S&P Capital IQ. Copyright©2019 CUSIP Global Services. All rights reserved. CUSIP data herein is provided by S&P Capital IQ, a division of McGraw-Hill Financial,Inc. The CUSIP data herein is provided solely for the convenience of reference only. Neither the County nor the Underwriters are responsible for selection or use of these CUSIP numbers, and no representation is made as to their correctness on the 2019B Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the 2019B Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of the 2019B Bonds. 55 IN CONNECTION WITH THIS OFFERING, ROBERT W. BAIRD & CO. INCORPORATED AND FTN FINANCIAL CAPITAL MARKETS (THE "UNDERWRITERS") MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 2019B BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING,IF COMMENCED,MAY BE DISCONTINUED AT ANY TIME. No dealer, broker, salesman or other person has been authorized to give any information or to make any representation other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon. This Official Statement does not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of the 2019B Bonds by any person in any jurisdiction in which it is not lawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the County and other sources that are deemed to be reliable. NEITHER THE 2019B BONDS NOR THE TRUST AGREEMENT (AS SUCH TERMS ARE DEFINED HEREIN) HAVE BEEN REGISTERED OR QUALIFIED WITH THE SECURITIES AND EXCHANGE COMMISSION BY REASON OF THE PROVISIONS OF SECTION 3(a)(2) OF THE SECURITIES ACT OF 1933, AS AMENDED AND SECTION 304(a)(4) OF THE TRUST INDENTURE ACT OF 1939,AS AMENDED.THE REGISTRATION OR QUALIFICATION OF THE 2019B BONDS OR THE TRUST AGREEMENT IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAW OF THE STATES IN WHICH THE 2019B BONDS HAVE BEEN REGISTERED OR QUALIFIED,IF ANY,AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES,SHALL NOT BE REGARDED AS A RECOMMENDATION THEREOF. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE TERMS OF THE OFFERING,INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE,THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. All quotations from and summaries and explanations of laws and documents herein do not purport to be complete, and reference is made to such laws and documents for full and complete statements of their provisions. Any statements made in this Official Statement involving estimates or matters of opinion, whether or not expressly so stated, are intended merely as estimates or opinions and not as representations of fact. THE INFORMATION AND EXPRESSIONS OF OPINION HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE,AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE OF THE 2019B BONDS SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COUNTY SINCE THE DATE HEREOF. References to web site addresses presented herein (including the appendices hereto) are for informational purposes only and may be in the form of hyperlinks solely for the reader's convenience. Unless specified otherwise, such web sites and the information or links contained therein are not intended to be active hyperlinks or incorporated into, and are not part of, this Official Statement for purposes of, and as that term is defined in, Rule 15c2-12 under the Securities Exchange Act of 1934,as amended. The information set forth herein has been obtained from sources which are believed to be reliable and is in a form deemed final by the County for the purpose of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (except for certain information permitted to be omitted under Rule 15c2-12(b)(1)). The information contained herein is subject to change after the date of this Official Statement,and this Official Statement speaks only as of its date. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction,but the Underwriters do not guarantee the accuracy or completeness of such information. 56 ORANGE COUNTY,NORTH CAROLINA BOARD OF COMMISSIONERS Penny Rich, Chair Renee Price,Vice-Chair Jamezetta Bedford Mark Dorosin Sally Greene Mark Marcoplos Earl McKee COUNTY STAFF Bonnie B. Hammersley........................................................................................................County Manager Travis Myren........................................................................................................... Deputy County Manager Gary Donaldson.........................................................................................................Chief Financial Officer Paul Laughton.......................................................... Deputy Director,Finance and Administrative Services John L. Roberts,Esq............................................................................................................County Attorney BOND COUNSEL Sanford Holshouser LLP FINANCIAL ADVISOR Davenport&Company LLC 57 TABLE OF CONTENTS Page INTRODUCTION.......................................................................................................................................3 TheCounty.....................................................................................................................................3 Purpose............................................................................................................3 Security...........................................................................................................................................3 The2019B Bonds...........................................................................................................................4 AdditionalBonds............................................................................................................................5 Book-Entry Only.............................................................................................................................5 TaxStatus.......................................................................................................................................5 Professionals...................................................................................................................................5 AdditionalInformation...................................................................................................................5 THE2019B BONDS....................................................................................................................................6 Authorization..................................................................................................................................6 General ...........................................................................................................................................6 RedemptionProvisions...................................................................................................................6 SECURITY AND SOURCES OF PAYMENT OF 2019B BONDS...........................................................8 General ...........................................................................................................................................8 Payment of Bonds; Limited Obligation; Budget and Appropriations.............................................8 TrustAgreement.............................................................................................................................8 Deedof Trust..................................................................................................................................9 Enforceability................................................................................................................................10 AdditionalBonds..........................................................................................................................I I Useof Net Proceeds......................................................................................................................11 AVAILABLE SOURCES FOR PAYMENT.............................................................................................11 General .........................................................................................................................................11 General Fund Revenues................................................................................................................11 THEPLAN OF FINANCE........................................................................................................................11 TheProjects..................................................................................................................................12 TheMortgaged Property...............................................................................................................12 ESTIMATED SOURCES AND USES OF FUNDS .................................................................................14 TOTAL ANNUAL DEBT SERVICE REQUIREMENTS........................................................................14 CERTAIN RISKS OF 2019B BOND OWNERS......................................................................................15 Insufficiencyof Payments.............................................................................................................15 Riskof Nonappropriation.............................................................................................................15 Valueof Collateral........................................................................................................................15 UninsuredCasualty.......................................................................................................................16 Outstanding General Obligation Debt of the County....................................................................16 EnvironmentalRisks.....................................................................................................................16 AdditionalBonds..........................................................................................................................17 Bankruptcy....................................................................................................................................17 THECOUNTY..........................................................................................................................................17 General .........................................................................................................................................17 FinancialInformation....................................................................................................................17 LEGALMATTERS...................................................................................................................................18 Litigation.......................................................................................................................................18 Opinionsof Counsel.....................................................................................................................18 TAXTREATMENT..................................................................................................................................18 Opinionof Bond Counsel.............................................................................................................18 i 58 TABLE OF CONTENTS (continued) Page DiscountBonds.............................................................................................................................19 PremiumBonds.............................................................................................................................19 OtherTax Consequences..............................................................................................................20 CONTINUING DISCLOSURE OBLIGATION.......................................................................................21 The County's Continuing Disclosure Compliance.......................................................................23 UNDERWRITING....................................................................................................................................24 RATINGS..................................................................................................................................................24 MISCELLANEOUS..................................................................................................................................25 Appendix A The County Appendix B Management's Discussion and Analysis and the Basic Financial Statements of Orange County,North Carolina Appendix C Summary of Principal Legal Documents Appendix D Form of Opinion of Bond Counsel Appendix E Book-Entry Only System ii 59 Orange County,North Carolina Limited Obligation Bonds, Series 2019B INTRODUCTION The purpose of this Official Statement, which includes the Appendices hereto, is to provide certain information in connection with the Orange County, North Carolina Limited Obligation Bonds, Series 2019B in the aggregate principal amount of$[ ]*(the"2019B Bonds"). The 2019B Bonds will be issued pursuant to a Trust Agreement dated as of June 1, 2018 (the "2018 Trust Agreement"), as previously supplemented and as supplemented by a Second Supplemental Trust Agreement dated as of November 1, 2019 (the "Second Supplemental Trust Agreement"), each between Orange County, North Carolina (the "County") and The Bank of New York Mellon Trust Company,N.A., as trustee(the"Trustee"). The County has previously issued its $7,510,000 Limited Obligation Bonds, Series 2018 (the "2018 Bonds"), of which$[6,715,000] in principal amount is currently Outstanding,pursuant to the Trust Agreement and its $14,135,000 Limited Obligation Bonds, Series 2019A (the "2019A Bonds" and, together with the 2018 Bonds, the "Prior Bonds"), all of which remain Outstanding, pursuant to the Trust Agreement and the First Supplemental Trust Agreement dated as of May 1, 2019 (the"First Supplemental Trust Agreement" and, together with the 2018 Trust Agreement and the Second Supplemental Trust Agreement,the"Trust Agreement"),each between the County and the Trustee. Capitalized terms used in this Official Statement, unless otherwise defined herein, have the meanings set out in Appendix C hereto under the caption"DEFINITIONS." This Introduction provides only certain limited information with respect to the contents of this Official Statement and is expressly qualified by the Official Statement as a whole. Prospective investors should review the full Official Statement and each of the documents summarized or described herein. This Official Statement speaks only as of its date, and the information contained herein is subject to change. THE COUNTY The County is a political subdivision of the State of North Carolina (the "State"). See Appendix A,"THE COUNTY,"hereto for certain information regarding the County. The County's most recent audited financial statements are contained in Appendix B hereto. PURPOSE The 2019B Bonds are being issued in order to (1) finance the acquisition, construction, equipping and improvement of certain County facilities as further described herein and (2)finance certain costs incurred in connection with the execution and delivery of the 2019B Bonds. See "THE PLAN OF FINANCE"and"ESTIMATED SOURCES AND USES OF FUNDS"herein. SECURITY The payment by the County of the principal of and interest on the 2019B Bonds is limited to funds appropriated for that purpose by the Board of Commissioners for the County in its sole discretion, *Preliminary,subject to change. 119081418_1 60 except to the extent payable from Bond proceeds,investment earnings,Net Proceeds related to casualty or condemnation proceeds,or amounts derived from the enforcement of remedies on default. As security for the 2019B Bonds, the Prior Bonds and any additional bonds issued under the Trust Agreement on a parity therewith (the "Additional Bonds" and, together with the 2019B Bonds and the Prior Bonds,the"Bonds"),the County has executed and delivered to a deed of trust trustee(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 a Deed of Trust Supplement dated as of May 1, 2019 (the "First Deed of Trust Supplement"), supplementing the 2018 Deed of Trust(as so supplemented,the"Existing Deed of Trust"), granting a lien of record on the site of the County's Government Services Annex located in Hillsborough, North Carolina (the "Government Services Annex"), the County's Meadowlands Emergency Operations Center located in Hillsborough, North Carolina (the "Emergency Operations Center"), the County's Visitors Center in Chapel Hill, North Carolina (the "Visitors Center") and land owned by the County in Hillsborough, North Carolina, which will be the site of the County's Northern Campus (the "Northern Campus"), the County's Link Center (the "Link Center"), the County District Attorney's office building (the "District Attorney's Building"), and the real estate improvements thereon and appurtenances thereto (collectively, the "Existing Mortgaged Property"), all as more particularly described in the Existing Deed of Trust, subject only to Permitted Encumbrances (as defined in Appendix C hereto). As security for the Bonds and in connection with the issuance of the 2019B Bonds, the County will execute and deliver to the Deed of Trust Trustee, for the benefit of the Trustee, a Deed of Trust Supplement #2 dated as of November 1, 2019 (the "Second Deed of Trust Supplement"), supplementing the Existing Deed of Trust (as so supplemented, the "Modified Deed of Trust"), granting a lien of record on the site of the County's Southern Campus, located in Chapel Hill, North Carolina (the "Southern Campus"), and the real estate improvements thereon and appurtenances thereto (the "2019B Mortgaged Property" and, together with the Existing Mortgaged Property,the"Mortgaged Property"), subject only to Permitted Encumbrances. The Modified Deed of Trust authorizes future obligations evidenced by Additional Bonds as described below, to be secured by the Modified Deed of Trust, provided that the total amount of present and future obligations secured by the Modified Deed of Trust at any one time does not exceed $200,000,000 and such future obligations are incurred not later than 30 years from the date of the 2018 Deed of Trust. In addition, the County will grant to the Trustee a lien on and security interest in all moneys held by the Trustee in the funds and accounts created under the Trust Agreement. If a default occurs under the Trust Agreement, the Trustee is authorized to direct the Deed of Trust Trustee to foreclose on the Mortgaged Property and apply the proceeds received as a result of any such foreclosure to the payment of the amounts due to the owners of the 2019B Bonds and the Prior Bonds, subject to the rights of the owners of any other Bonds. No assurance can be given that any such proceeds will be sufficient to pay the principal of and the interest on the Bonds. In addition, no deficiency judgment can be rendered against the County if the proceeds from any such foreclosure sale (together with other funds that may be held by the Trustee under the Trust Agreement) are insufficient to pay the Bonds in full. The 2019B Bonds do not constitute a pledge of the County's faith and credit within the meaning of any constitutional provision. See the caption "SECURITY AND SOURCES OF PAYMENT OF 2019B BONDS"herein. THE 2019B BONDS The 2019B Bonds will be dated as of their date of delivery. Interest is payable on April 1 and October 1 of each year, beginning October 1, 2020, at the rates set forth on the inside front cover page of 4 61 this Official Statement. Principal is payable, subject to redemption as described herein, on October 1 in the years and in the amounts set forth on the inside front cover page of this Official Statement. ADDITIONAL BONDS Under the conditions described in the Trust Agreement, without the approval or consent of the Owners of the then-outstanding Bonds and without notice to such Owners, Additional Bonds may be delivered and secured on parity with the 2019B Bonds and the Prior Bonds to provide funds (a)to expand or improve the Pledged Facilities, (b)to construct further improvements to the Pledged Sites,(c)to refund any Outstanding Bonds, (d)to pay financing costs or establish reserves in connection with the issuance of Additional Bonds, (e)for any other purpose that may be allowed by law from time to time, including the acquisition and construction of additional public facilities,whether or not those facilities are related to the Pledged Facilities or the Pledged Sites, or(f)for any combination of such purposes. BOOK-ENTRY ONLY The 2019B Bonds will be delivered in book-entry form only without physical delivery of certificates to beneficial owners of the 2019B Bonds. Payments to beneficial owners of the 2019B Bonds will be made by The Depository Trust Company ("DTC"), New York, New York, and its participants. See Appendix E, "BOOK-ENTRY ONLY SYSTEM" hereto. So long as Cede & Co. is the registered owner of the 2019B Bonds, references herein to registered owner or Owners of the 2019B Bonds means Cede&Co. and not the beneficial owners of the 2019B Bonds. TAx STATUS In the opinion of Bond Counsel, under existing law and subject to conditions described under "TAX TREATMENT" herein, interest on the 2019B Bonds paid by the County (1) is not includable in the recipient's gross income for federal income tax purposes, (2) is not an item of tax preference for purposes of the federal alternative minimum income tax, and (3) is exempt from current State of North Carolina income taxes. See"TAX TREATMENT." PROFESSIONALS Robert W. Baird& Co. Incorporated and FTN Financial Capital Markets (the"Underwriters")are underwriting the 2019B Bonds. The Bank of New York Mellon Trust Company, N.A. is serving as Trustee with respect to the 2019B Bonds. Davenport & Company LLC is serving as financial advisor. Sanford Holshouser LLP is serving as Bond Counsel. John L. Roberts, Esq. is the County Attorney. McGuireWoods LLP is serving as counsel to the Underwriters. ADDITIONAL INFORMATION Summaries of the Trust Agreement and the Modified Deed of Trust, including a list of definitions of certain terms, are included as Appendix C. All quotations from and summaries and explanations of the Trust Agreement and the Modified Deed of Trust contained in this Official Statement, including in Appendix C, do not purport to be complete. Reference is made to such documents for full and complete statements of their respective provisions. Additional information and copies in reasonable quantity of the principal financing documents may be obtained from the County at 200 South Cameron Street, Hillsborough, North Carolina 27278, Attention: Chief Financial Officer. Copies of such documents can also be obtained during the offering period from Robert W. Baird & Co. Incorporated at 380 Knollwood Street, Suite 440, Winston-Salem, 5 62 North Carolina 27103 or FTN Financial Capital Markets at 845 Crossover Lane, Memphis, Tennessee 38117. After the offering period, copies of such documents may be obtained from the Trustee at 10161 Centurion Parkway,Jacksonville,Florida 32256. THE 2019B BONDS AUTHORIZATION The County is issuing the 2019B Bonds pursuant to the provisions of Section 20 of Chapter 160A of the North Carolina General Statutes and Article 8 of Chapter 159 of the North Carolina General Statutes, each as amended (collectively, the "Act"), and a resolution of the Board of Commissioners of the County adopted on October 1, 2019. Each 2019B Bond will be deemed an "installment contract" under the Act. hi addition, the County's issuance of the 2019B Bonds received the unanimous approval of the North Carolina Local Government Commission (the "LGC") on October 1, 2019. The LGC is a division of the State Treasurer's office charged with general oversight of local government finance in the State of North Carolina (the "State"). LGC approval is required for substantially all bond issues and other local government financing arrangements in the State. Before approving an installment financing (which includes the financing arrangement for the 2019B Bonds), the LGC must determine, among other things, that (1) the proposed financing is necessary and expedient, (2) the financing, under the circumstances, is preferable to a general obligation or revenue bond issue for the same purpose, and(3)the sums to fall due under the proposed financing are not excessive for the local government. GENERAL Payment Terms. The 2019B Bonds will be dated their date of delivery. Interest on the 2019B Bonds is payable on each April 1 and October 1 (the"Payment Dates"),beginning October 1,2020, at the rates set forth on the inside front cover page of this Official Statement (calculated on the basis of a 360- day year consisting of twelve 30-day months). Interest payments will be made to the person shown as the owner of the 2019B Bond as of the applicable Record Date. "Record Date"means the end of the calendar day on the 15th day of the month (whether or not a Business Day) preceding a Payment Date. Principal on the 2019B Bonds is payable on October 1 in the years and amounts set forth on the inside front cover page of this Official Statement. Payments will be effected through DTC. See Appendix E, "BOOK-ENTRY ONLY SYSTEM"hereto. Registration and Exchange. So long as DTC or its nominee is the registered owner of the 2019B Bonds, transfers and exchanges of beneficial ownership interests in the 2019B Bonds will be available only through DTC Participants and DTC Indirect Participants. See Appendix E, "BOOK-ENTRY ONLY SYSTEM" hereto. The Trust Agreement describes provisions for transfer and exchange applicable if a book-entry system is no longer in effect. These provisions generally provide that the transfer of the 2019B Bonds is registrable by the Owners thereof, and the 2019B Bonds may be exchanged for an equal aggregate, unredeemed principal amount of 2019B Bonds of the authorized denomination and of the same maturity and interest rate, only upon presentation and surrender of the 2019B Bonds to the Trustee at the principal corporate trust office of the Trustee together with an executed instrument of transfer in a form approved by the Trustee in connection with any transfer. The Trustee may require the person requesting any transfer or exchange to reimburse it for any shipping and tax or other governmental charge payable in connection therewith. REDEMPTION PROVISIONS 6 63 Optional Redemption. The 2019B 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. Mandatory Sinking Fund Redemption. [To be added if needed] Selection. If less than all of the 2019B Bonds are to be optionally redeemed as described above, the County in its discretion may elect which maturities of 2019B Bonds are to be redeemed. If less than all the 2019B Bonds of any maturity are to be redeemed, the Trustee shall select the 2019B 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 2019B Bonds, if less than all the 2019B Bonds within a maturity are to be redeemed,the parties agree that DTC may determine which of the 2019B Bonds within the maturity are to be redeemed in accordance with DTC's then-current rules and procedures. In any case, (1)the portion of any 2019B Bond to be redeemed must be in the principal amount of $5,000 or some multiple thereof, and(2)in selecting 2019B Bonds for redemption, each 2019B Bond will be considered as representing that number of 2019B Bonds which is obtained by dividing the principal amount of that 2019B Bond by $5,000. If a portion of a 2019B Bond is called for redemption, a new 2019B Bond of the same maturity in principal amount equal to the unpaid portion will be delivered to the registered owner upon the surrender of the 2019B Bond. Effect of Call for Redemption. If on or before the date fixed for redemption funds are deposited with the Trustee to pay the principal and interest accrued to the redemption date with respect to the 2019B Bonds called for redemption, the 2019B Bonds or portions of the 2019B Bonds called for redemption cease to accrue interest from and after the redemption date, and thereafter those 2019B Bonds (1) are no longer entitled to the benefits provided by the Trust Agreement and(2) are not deemed to be Outstanding under the Trust Agreement. Notice of Redemption. 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: (1) with respect to any 2019B 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); (2)with respect to any 2019B Bonds for which no book-entry only system of registration is in effect,to each of the registered owners of those 2019B Bonds at their addresses as shown on the Trustee's registration books, by registered or certified mail; and (3) in any case, both (A) to the Municipal Securities Rulemaking Board for posting on its "ENEMA" continuing disclosure system, or any successor system, and(B)to the LGC. Failure to give any notice specified in (1) or (2), as applicable, or any defect in that notice, will not affect the validity of any proceedings for the redemption of any 2019B Bonds with respect to which no failure has occurred. Failure to give any notice specified in (3), or any defect in that notice, will not affect the validity of any proceedings for the redemption of any 2019B Bonds with respect to which the notice specified in (1) or (2) is correctly given. Any notice mailed as provided in the Trust Agreement will conclusively be presumed to have been given regardless of whether received by any Owner. Notwithstanding anything in the Trust Agreement to the contrary, the only remedy for the Trustee's failure to post any notice with the EMMA system will be an action by the holders of the 2019B Bonds,as applicable,in mandamus for specific performance or similar remedy to compel performance. 7 64 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(1)the Trustee's receipt on or prior to the redemption date of moneys sufficient to pay the principal of and premium, if any, and interest on the 2019B Bonds to be redeemed; or (2) 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 2019B 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 in a manner in which the redemption notice was given that the moneys were not so received(or condition was not fulfilled) and the redemption was not made. SECURITY AND SOURCES OF PAYMENT OF 2019B BONDS GENERAL The 2019B Bonds are payable from payments to be made by the County pursuant to the Trust Agreement and from certain other moneys, including certain Net Proceeds, if any, and certain amounts realized from any sale or lease of the Mortgaged Property, which payments and other moneys have been pledged to such payment as provided in the Trust Agreement. PAYMENT OF BONDS;LIMITED OBLIGATION;BUDGET AND APPROPRIATIONS The County shall cause to be paid, when due, the principal of (whether at maturity, by acceleration, or otherwise) and the premium, if any, and interest on the Bonds at the places, on the dates and in the manner described in the Trust Agreement. The County is obligated to pay Additional Payments in amounts sufficient to pay the fees and expenses of the Trustee, taxes or other expenses required to be paid pursuant to the Trust Agreement. Additional Payments are to be paid by the County directly to the person or entity to which such Additional Payments are owed. hi the Trust Agreement, the County agrees to include in the initial proposal for each of the County's annual budgets for review and consideration by the Board of Commissioners for the County, in any Fiscal Year, items for all Bond Payments and the reasonably estimated Additional Payments coming due in such Fiscal Year. Notwithstanding that the initial proposed budget includes an appropriation for Bond Payments and Additional Payments, the Board of Commissioners may determine not to include such an appropriation in the final County budget for such Fiscal Year; further, the Board of Commissioners may amend an adopted budget to reduce or delete an approved appropriation. An Event of Nonappropriation constitutes an Event of Default under the Trust Agreement, which entitles the Trustee to exercise its remedies under the Trust Agreement, including its rights to foreclose on the Mortgaged Property under the Modified Deed of Trust. IN CONNECTION WITH THE BOND PAYMENTS AND THE ADDITIONAL PAYMENTS, THE APPROPRIATION OF FUNDS THEREFOR IS WITHIN THE SOLE DISCRETION OF THE BOARD OF COMMISSIONERS OF THE COUNTY. TRUST AGREEMENT Under the Trust Agreement, the County has granted to the Trustee for the benefit of the Owners of the Bonds a lien on and security interest in all moneys and securities from time to time held by the Trustee under the Trust Agreement. 8 65 DEED OF TRUST General. In connection with the execution and delivery of the 2018 Bonds and the 2019A Bonds, the County executed and delivered the Existing Deed of Trust, to provide security for its obligations under the Trust Agreement by granting a lien of record on the Government Services Annex, the Emergency Operations Center, the Visitors Center, the Link Center, the District Attorney's Building and the Northern Campus. In connection with the execution and delivery of the 2019B Bonds, the County will execute and deliver the Second Deed of Trust Supplement, granting a lien of record on the Southern Campus. The Modified Deed of Trust secures the Prior Bonds, the 2019B Bonds and any Additional Bonds issued under the Trust Agreement. ONLY THE SITES ON WHICH (1) THE GOVERNMENT SERVICES ANNEX, (2) THE EMERGENCY OPERATIONS CENTER, (3) THE VISITORS CENTER, (4) THE LINK CENTER(5) THE DISTRICT ATTORNEY'S BUILDING, (6) THE NORTHERN CAMPUS, AND (7) THE SOUTHERN CAMPUS ARE LOCATED WILL BE INCLUDED IN THE DEFINITION OF"MORTGAGED PROPERTY"AND,CONSEQUENTLY,SUCH REAL PROPERTY AND ANY IMPROVEMENTS THEREON WILL BE SUBJECT TO THE LIEN CREATED BY THE MODIFIED DEED OF TRUST. See"THE PLAN OF FINANCE"herein. The Modified Deed of Trust authorizes future obligations evidenced by Additional Bonds executed and delivered under the Trust Agreement to be secured by the Modified Deed of Trust,provided that the total amount of present and future obligations secured thereby at any one time does not exceed $200,000,000 and such future obligations are incurred not later than 30 years from June 1,2018. The Modified Deed of Trust will be recorded in the office of the Register of Deeds of Orange County,North Carolina, and the liens created thereby will be insured by a title insurance policy. Release of Security. The Trustee is required, upon the County's direction and at any time, to execute and deliver all documents necessary to effect the release of all or a portion of the Mortgaged Property from the lien of the Modified Deed of Trust upon the County's compliance with the following requirements: (a) The County must file with the Trustee a certificate executed by a County Representative, (i) stating that(A) no Event of Default is continuing, (B)that the grant or release will not materially impair the intended use of the property remaining subject to the Modified Deed of Trust and (C) the release complies with the requirements of the Modified Deed of Trust, (ii) providing a copy of the proposed instrument of grant or release, including a complete legal description of the property to be released, (iii) providing a written application signed by a County Representative requesting such instrument be executed and delivered, and(iv)providing evidence of compliance with(b) or(c)below,and. (b) In the case of a proposed release of all the Mortgaged Property, the County must pay to the Trustee (or other fiduciary) an amount (i) which is sufficient to provide for the payment in full of all Outstanding Bonds in accordance with the Trust Agreement and(ii)which is required to be used for such payment. (c) In connection with the release of a portion (but less than all) of the Mortgaged Property, the County must provide evidence to the Trustee that the appraised, tax or insured value of that portion of the Mortgaged Property that is proposed to remain subject to the lien of the Modified Deed of Trust is not less than 50% of the aggregate principal component of the Bonds Outstanding at the time the release is effected. 9 66 (d) Notwithstanding the requirements described in (c) above, the County need not make any showing as to the value of the remaining Mortgaged Property and is not required to represent that there is no Event of Default continuing in connection with the release of(i) any building that lies on the same parcel of property as the Government Services Annex, along with (ii) ingress, egress and parking facilities reasonably appropriate for the use of that building. The Trustee is required to grant the release described in this paragraph even during the continuation of an Event of Default, but may not otherwise release property under (c) above during the continuation of an Event of Default. In addition to the provisions for release described above, the County may from time to time grant easements, licenses, rights-of-way and other similar rights with respect to any part of the Mortgaged Property, and the County may release such interests, with or without consideration, and the County may dispose of any undesirable or unnecessary Fixture, so long as such grant or disposition does not materially impair the intended use of the Mortgaged Property. See "THE DEED OF TRUST—No Transfers; Releases; Grants of Easements" in Appendix C hereto. ENFORCEABILITY The enforceability of the parties' obligations under the Trust Agreement and the Modified Deed of Trust are subject to bankruptcy, insolvency, reorganization and other laws related to or affecting the enforcement of creditors' rights generally and, to the extent that certain remedies under such instruments require or may require enforcement by a court,to such principles of equity as the court having jurisdiction may impose. NOTWITHSTANDING ANYTHING THEREIN TO THE CONTRARY, THE DELIVERY OF THE 2019B BONDS SHALL NOT BE CONSTRUED OR INTERPRETED AS CREATING A PLEDGE OF THE FAITH AND CREDIT OF THE COUNTY WITHIN THE MEANING OF ANY CONSTITUTIONAL DEBT LIMITATION. IN ADDITION, NEITHER THE 2019B BONDS NOR THE TRUST AGREEMENT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATES THE COUNTY TO MAKE ANY PAYMENTS BEYOND THOSE APPROPRIATED IN THE SOLE DISCRETION OF THE BOARD OF COMMISSIONERS FOR ANY FISCAL YEAR IN WHICH THE 2019B BONDS ARE OUTSTANDING. IF THE COUNTY FAILS TO MAKE PAYMENTS OF PRINCIPAL OF OR INTEREST ON THE BONDS,THE TRUSTEE MAY DECLARE THE ENTIRE UNPAID PRINCIPAL OF THE BONDS TO BE IMMEDIATELY DUE AND PAYABLE AND DIRECT THE DEED OF TRUST TRUSTEE TO INSTITUTE FORECLOSURE PROCEEDINGS UNDER THE MODIFIED DEED OF TRUST AND PROCEED IN ACCORDANCE WITH LAW TO ATTEMPT TO DISPOSE OF THE MORTGAGED PROPERTY AND APPLY THE PROCEEDS OF SUCH DISPOSITION TOWARD ANY BALANCE, OWING BY THE COUNTY ON THE BONDS. NO ASSURANCE CAN BE GIVEN THAT SUCH PROCEEDS WILL BE SUFFICIENT TO PAY ALL PRINCIPAL OF AND INTEREST ON THE BONDS. IN ADDITION, SECTION 160A-20(f) OF THE NORTH CAROLINA GENERAL STATUTES PROVIDES THAT NO DEFICIENCY JUDGMENT MAY BE RENDERED AGAINST THE COUNTY FOR BREACH OF ANY CONTRACTUAL OBLIGATION AUTHORIZED UNDER SECTION 160A-20 AND THAT THE TAXING POWER OF THE COUNTY IS NOT AND MAY NOT BE PLEDGED DIRECTLY OR INDIRECTLY TO SECURE ANY MONEYS DUE FROM THE COUNTY. See "THE TRUST AGREEMENT—Defaults and Remedies under the Trust Agreement- Acceleration" and "— Other Remedies" and "THE DEED OF TRUST—Defaults and Remedies; Foreclosure" in Appendix C hereto and the caption"CERTAIN RISKS OF 2019B BOND OWNERS" herein. 10 67 ADDITIONAL BONDS Under the conditions described in the Trust Agreement, without the approval or consent of the Owners of the then Outstanding 2019B Bonds, Additional Bonds may be delivered and secured on parity with the 2019B Bonds and the Prior Bonds to provide funds (a)to expand or improve the Pledged Facilities, (b)to construct further improvements to the Pledged Sites, (c) to refund any Outstanding Bonds, (d)to pay financing costs or establish reserves in connection with the issuance of Additional Bonds, (e) for any other purpose that may be allowed by law from time to time, including the acquisition and construction of additional public facilities, whether or not those facilities are related to the Pledged Facilities or the Pledged Sites, or (f)for any combination of such purposes. See "THE TRUST AGREEMENT—Additional Bonds"in Appendix C hereto. USE OF NET PROCEEDS The County must elect to use Net Proceeds and other funds available therefor, subject to provisions of the Trust Agreement, to repair and restore the Mortgaged Property or to redeem or defease the Bonds in whole(but not in part)pursuant to the optional redemption provisions described above or the defeasance provisions of the Trust Agreement, as appropriate. The County has no option to redeem the 2019B Bonds from Net Proceeds other than in accordance with the optional redemption provisions described above (which provide for no optional redemption prior to October 1,20). AVAILABLE SOURCES FOR PAYMENT GENERAL The County may pay its obligations under the Trust Agreement from any source of funds, including revenues generated by the projects financed under the Trust Agreement and other facilities in the County, available to it in each year and appropriated therefor until maturity of the 2019B Bonds. GENERAL FUND REVENUES The County's unaudited general fund revenues for the fiscal year ended June 30, 2019 were approximately $[_] million and for the fiscal year ending June 30, 2020 are budgeted to be $[_] million. General fund revenues are derived from various sources, including property taxes (which account for approximately 70% of the general fund revenues), sales taxes, fees and charges, as well as intergovernmental revenues. For the fiscal year ended June 30, 2019, the County imposed a property tax of$0.8504 per$100 of assessed value, all of which was appropriated to the General Fund by the County's Board of Commissioners. For the fiscal year ending June 30,2020,the County will impose a property tax of$0.8654 per $100 of assessed value. A rate of$0.8504 per $100 of assessed value in the fiscal year ended June 30, 2019 generated approximately $[_] million. A rate of $0.8654 per $100 of assessed value in the fiscal year ending June 30, 2020 is estimated to generate approximately $[_] million. The General Statutes of North Carolina permit counties to impose property taxes of up to $1.50 per $100 of assessed value for certain purposes without the requirement of a voter referendum. See Appendix B hereto for a description of the uses of the County's general fund revenues for the fiscal year ended June 30,2018. THE PLAN OF FINANCE The 2019B Bonds are being issued to provide funds to (1) finance the acquisition, construction, equipping and improvement of certain County facilities as further described below and(2)finance certain costs incurred in connection with the execution and delivery of the 2019B Bonds. 11 68 THE PROJECTS Proceeds of the 2019B Bonds will be used to finance a variety of County projects. The County has adopted a practice of completing an annual financing to finance a broad range of acquisitions and improvements, so as to reduce its frequency of transactions and to handle projects that do not lend themselves conveniently to separate financings. The projects included in the current financing can be summarized, and the current estimates of the costs thereof, as follows: Category Estimated Cost Northern Campus Project: site preparation for new detention center, agriculture- $6,880,837 environment center, and parks and recreation administration building Southern Campus Project: improvements to the driveway and access road to the 4,675,000 Southern Campus,as well as providing additional parking Seymour Center Expansion 990,000 River Park Phase II 160,000 Link Center Remediation 6,500,000 Passmore Center Remediation 199,114 Sportsplex Improvements/Equipment 605,036 Community Loan Fund 224,340 Vehicle Replacements 998,550 Whitted Building—Elevator Work 154,000 Emergency Services Building Remediation 324,000 Total $21,710,877 THE MORTGAGED PROPERTY The 2019B Bonds, the Prior Bonds and any Additional Bonds will be secured by the Mortgaged Property. The Mortgaged Property includes the County's Government Services Annex, the Emergency Operations Center, the Visitors Center, the Link Center, the District Attorney's Building, the County's Southern Campus (all as described below), and the associated real estate, and the planned site for the County's proposed new Northern Campus (as further described below). The "Mortgaged Property" is defined in the Modified Deed of Trust to include these facilities and real estate, and any additional improvements to the facilities and real estate,but generally does not include any equipment or furnishings associated with the property. Government Services Annex. The Government Services Annex is a one-story building consisting of approximately 12,000 square feet on an approximately 9.32-acre site located at 208 South Cameron Street in Hillsborough, North Carolina. The Government Services Annex currently houses the County's Board of Elections and related functions. The County has owned this property since it was built in 1968. The County estimates the insured value of this building (not including the equipment associated with the building, which is generally not part of the Mortgaged Property) to be approximately $1.6 million. The Government Services Annex lies on the same platted lot as other County buildings and the Modified Deed of Trust allows the County to release either or both of those other buildings (along with the associated real estate, ingress and egress, and related parking) at any time at the County's option, even during the continuation of an Event of Default. 12 69 Meadowlands Emergency Operations Center. The Emergency Operations Center is a two-story building consisting of approximately 22,000 square feet on an approximately three-acre site located in the Meadowlands Office Park in Hillsborough, North Carolina. This facility serves as the headquarters for the County's Emergency Management Services, including Public Safety Answering Point and all other E- 911 operations. The County used a portion of the proceeds of the 2019A Bonds to finance certain repairs to the Emergency Operations Center necessary to address water intrusion. The County has owned this property since 2005. The County estimates the insured value of this building(not including the equipment associated with the building, which is generally not part of the Mortgaged Property) at approximately $4.6 million. Visitors Center. The Visitors Center is a two-story building consisting of approximately 7,400 square feet on an approximately 0.32-acre site located at 501 West Franklin Street in downtown Chapel Hill,North Carolina. The County has owned this property since 1997. The County estimates the insured value of this building (not including the equipment associated with the building, which is generally not part of the Mortgaged Property) at approximately$1.6 million. The real estate on which the building sits has a tax value, according to County tax records, of approximately $1.7 million for a total value of approximately$3.3 million. Link Center. The Link Center is located at 200 South Cameron Street in Hillsborough, North Carolina. The County used a portion of the proceeds of the 2019A Bonds to finance improvements to the Link Center. The County will use a portion of the proceeds of the 2019B Bonds to finance [repairs to the Link Center to remediate water intrusion]. The County estimates the value of this building(not including equipment,which is generally not part of the Mortgaged Property) at approximately$4.7 million. District Attorney's Building. The District Attorney's Building is located at 144 East Margaret Lane in Hillsborough,North Carolina. The County used a portion of the proceeds of the 2019A Bonds to finance certain repairs to the District Attorney's Building to remediate water intrusion. The County estimates the value of this building (not including equipment, which is generally not part of the Mortgaged Property)at approximately$1.3 million. Southern Campus. The County's Southern Campus is located at 2551 Homestead Road in Chapel Hill, North Carolina. The Southern Campus is the site of the County's Seymour Senior Center and the Southern Human Services Center. The County intends to construct and equip an expansion to the Seymour Senior Center with the proceeds of the 2019B Bonds, which expansion will include [ The County also intends to construct and equip additional parking spaces and improvements to the driveway and access road to the Southern Campus with the proceeds of the 2019B Bonds. The County estimates the value of the buildings located on the Southern Campus (not including equipment, which is generally not part of the Mortgaged Property) at approximately $[ ]. The real estate on which the Southern Campus sits has a tax value, according to County tax records, of approximately$[_] million for a total value of approximately$[_] million. Northern Campus Site. The County acquired approximately 21 acres of land off U.S. Highway 70 in the northern section of the County in April 2018 to be the site of a new "Northern Campus" for the County. There are no structures currently on this property. Over the next several years, the County plans to build several buildings on this site, including a new [144]-bed detention center, an agricultural and environmental center, and a parks and recreation administration building. The County will finance site preparation related to such planned buildings with the proceeds of the 2019B Bonds. Such buildings will become part of the collateral for the Bonds, but the County may borrow to finance those buildings such that the new debt will also be secured by such buildings and the remainder of the Mortgaged Property. The County paid approximately $394,500 for this property, and after providing for the rezoning of the property from an agricultural-residential classification to an institutional classification (to allow for the 13 70 construction of the detention center and other buildings), the County estimates the current value of this property to be approximately $1.2 million. The County commissioned an independent environmental evaluation of the Northern Campus before completing the acquisition, and this evaluation called for no additional environmental action to be undertaken by the County prior to construction. NO OTHER FACILITY OR IMPROVEMENT FINANCED WITH THE 2019B BONDS WILL BE INCLUDED AS PART OF THE MORTGAGED PROPERTY. The Trust Agreement and Modified Deed of Trust generally allow the County to direct the release of any portion of the Mortgaged Property, in the County's discretion, so long as the taxable, appraised or insured value of the property remaining subject to the lien of the Modified Deed of Trust following such release is at least equal to 50% of the principal amount of the Outstanding Bonds. See "THE DEED OF TRUST—No Transfers; Releases; Grants of Easements"in Appendix C hereto. ESTIMATED SOURCES AND USES OF FUNDS The County estimates the sources and uses of funds for the plan of finance to be as follows: SOURCES: Par Amount of the 2019B Bonds [Net] Original Issue Premium/Discount TOTAL SOURCES OF FUNDS USES: Deposit to Project Fund Costs of Issuance' TOTAL USES OF FUNDS ' Includes legal fees,underwriters' compensation,financial advisor fees,rating agency fees,fees and expenses of the Trustee and miscellaneous fees and expenses. TOTAL ANNUAL DEBT SERVICE REQUIREMENTS The following table sets forth for each Fiscal Year of the County, the debt service required to be paid by the County under the Trust Agreement with respect to the 2019B Bonds and the Prior Bonds. 2019B Prior Bonds Total Bonds Total Fiscal Year Principal Principal (Ended June 30) and Interest and Interest'- Total 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 14 71 2035 2036 2037 2038 2039 TOTAL' 'Includes debt service on the 2018 Bonds and the 2019A Bonds. Note:Totals may not foot due to rounding. CERTAIN RISKS OF 2019B BOND OWNERS INSUFFICIENCY OF PAYMENTS If the County fails to pay any payments on the Bonds as the same become due or if another event of default occurs under the Trust Agreement, the Trustee may accelerate the principal with respect to the Bonds, direct the Deed of Trust Trustee to foreclose on the Mortgaged Property under the Modified Deed of Trust, take possession of the Mortgaged Property and attempt to dispose of the Mortgaged Property. See "THE DEED OF TRUST" in Appendix C hereto. Zoning restrictions and other land use factors relating to the Mortgaged Property may limit the use of the Mortgaged Property and may affect the proceeds obtained on any disposition by the Deed of Trust Trustee. THERE CAN BE NO ASSURANCE THAT THE MONEYS AVAILABLE IN THE FUNDS AND ACCOUNTS HELD BY THE TRUSTEE AND THE PROCEEDS OF ANY SUCH DISPOSITION OF THE MORTGAGED PROPERTY WILL BE SUFFICIENT TO PROVIDE FOR THE PAYMENT OF THE PRINCIPAL AND INTEREST WITH RESPECT TO THE BONDS. SECTION 160A-20(f) OF THE GENERAL STATUTES OF NORTH CAROLINA PROVIDES THAT NO DEFICIENCY JUDGMENT MAY BE RENDERED AGAINST THE COUNTY FOR ANY AMOUNTS THAT MAY BE OWED BY THE COUNTY UNDER THE TRUST AGREEMENT, AND THE TAXING POWER OF THE COUNTY IS NOT AND MAY NOT BE PLEDGED DIRECTLY OR INDIRECTLY OR CONTINGENTLY TO SECURE ANY MONEYS OWING BY THE COUNTY UNDER THE TRUST AGREEMENT. THE REMEDIES AFFORDED TO THE TRUSTEE AND THE OWNERS OF THE BONDS ON A DEFAULT BY THE COUNTY UNDER THE TRUST AGREEMENT ARE LIMITED TO THOSE OF A SECURED PARTY UNDER THE LAWS OF THE STATE OF NORTH CAROLINA, INCLUDING FORECLOSING ON THE MODIFIED DEED OF TRUST. RISK OF NONAPPROPRIATION The appropriation of moneys to make payments pursuant to the Trust Agreement is within the sole discretion of the Board of Commissioners of the County. If the Board of Commissioners fails to appropriate such moneys, the only sources of payment for the Bonds will be the moneys, if any, available in certain funds and accounts held by the Trustee under the Trust Agreement and the proceeds of any attempted foreclosure on the County's interest in the Mortgaged Property under the Modified Deed of Trust. VALUE OF COLLATERAL The County's estimated value of the Mortgaged Property (as further described under the caption above "THE PLAN OF FINANCE — The Mortgaged Property") is at least $[ ] million, which is approximately [_]%*of the aggregate principal amount of the 2019B Bonds and the outstanding 2019A Bonds and 2018 Bonds. This value is based in part on the County's own estimates, and the County has not commissioned or obtained any appraisals for the purpose of this valuation. The amount of proceeds received through foreclosure of the County's interest in the Mortgaged Property may be affected by a number of factors, including (1) the costs and expenses in enforcing the lien and security, (2) the Preliminary,subject to change. 15 72 condition of the Mortgaged Property, (3) the occurrence of any damage, destruction, loss or theft of the Mortgaged Property which is not repaired or replaced and for which there are not received from insurance policies or appropriated moneys from any risk management program, (4)problems relating to the paucity of alternative uses of the facilities arising from their design, zoning restrictions, use restrictions, easements and encumbrances on the Mortgaged Property and (5) environmental problems and risks with respect to the Mortgaged Property. The Trust Agreement permits the issuance of Additional Bonds without regard to the value of the Mortgaged Property, and the Modified Deed of Trust allows for up to $200 million in principal amount of Bonds to be secured thereby. To the extent that Additional Bonds are issued and no additional property is subject to the Modified Deed of Trust, the value of the collateral as a percentage of the outstanding principal amount of Bonds should be expected to decrease,which decrease may be material. NO REPRESENTATION IS MADE AS TO THE VALUE OF, OR THE AMOUNT OF PROCEEDS THAT MAY BE REALIZED FROM, THE COUNTY'S INTEREST IN THE MORTGAGED PROPERTY IN THE EVENT OF A FORECLOSURE. UNINSURED CASUALTY If all or any part of the Mortgaged Property is damaged or destroyed by any casualty or taken by any governmental authority, the County is obligated under the Trust Agreement to apply any Net Proceeds from insurance or condemnation (1)to repair, restore or rebuild the Mortgaged Property or (2)to provide for the redemption or defeasance of all, but not less than all, of the Bonds. If the County applies any Net Proceeds to repair, restore or rebuild the Mortgaged Property and such Net Proceeds are not sufficient to repair, restore or rebuild the Mortgaged Property to its condition prior to such damage, destruction or taking, then the value of the Mortgaged Property would be reduced. The Trust Agreement requires that certain insurance be maintained with respect to the Mortgaged Property. Such insurance may not,however, cover all perils to which the Mortgaged Property is subject. OUTSTANDING GENERAL OBLIGATION DEBT OF THE COUNTY The County has issued general obligation bonds and may issue general obligation bonds and notes in the fixture. The County will pledge its faith and credit and taxing power to the payment of its general obligation bonds and notes to be issued. See Appendix A, "THE COUNTY—DEBT INFORMATION" attached hereto. FUNDS WHICH MAY OTHERWISE BE AVAILABLE TO PAY BOND PAYMENTS OR ADDITIONAL PAYMENTS OR TO MAKE OTHER PAYMENTS TO BE MADE BY THE COUNTY UNDER THE TRUST AGREEMENT MAY BE SUBJECT TO SUCH FAITH AND CREDIT PLEDGE BY THE COUNTY AND THEREFORE MAY BE REQUIRED TO BE APPLIED TO THE PAYMENT OF ITS GENERAL OBLIGATION INDEBTEDNESS. ENVIRONMENTAL RISKS A Phase I environmental site assessment was performed on the site of the Northern Campus in 2018, which revealed no recognized environmental conditions. [Is there a Phase I for the Southern Campus?] The sites of the Government Services Annex, the Emergency Operations Center and the Visitors Center have been owned by the County since 1968, 2005 and 1997,respectively. The sites of the Link Center and the District Attorney's office have been owned by the County since 1967 and 1992, respectively. [The site of the Southern Campus has been owned by the County since_]. The County is not aware of any material environmental contamination on such sites. 16 73 Undiscovered or future environmental contamination could have a material adverse effect on the value of the Mortgaged Property; however, the County is required under the Trust Agreement to undertake whatever environmental remediation may be required by law. ADDITIONAL BONDS The County may execute and deliver Additional Bonds under the Trust Agreement that are secured by the Mortgaged Property, thereby diluting the relative value of the collateral with respect to the 2019B Bonds, the 2019A Bonds and the 2018 Bonds. hi addition, remedies under the Trust Agreement and the Modified Deed of Trust are controlled by the Majority Owners. Upon issuance of the 2019B Bonds,the Owners of the 2019B Bonds will be Majority Owners,but may not continue to be the Majority Owners if Additional Bonds are issued or if a portion of the 2019B Bonds are redeemed or discharged prior to maturity. BANKRUPTCY Under current North Carolina law, a local governmental unit such as the County may not file for bankruptcy protection without(1)the consent of the LGC and(2)the satisfaction of the requirements of§ 109(c) of the United States Bankruptcy Code. If the County were to initiate bankruptcy proceedings with the consent of the LGC and satisfy the requirements of 11 U.S.C. § 109(c), the bankruptcy proceedings could have material and adverse effects on holders of the 2019B Bonds, including (a) delay in enforcement of their remedies, (b) subordination of their claims to claims of those supplying goods and services to the County after the initiation of bankruptcy proceedings and to the administrative expenses of bankruptcy proceedings and (c) imposition without their consent of a plan of reorganization reducing or delaying payment of the 2019B Bonds. The effect of the other provisions of the United States Bankruptcy Code on the rights and remedies of the holders of the 2019B Bonds cannot be predicted and may be affected significantly by judicial interpretation, general principles of equity(regardless of whether considered in a proceeding in equity or at law) and considerations of public policy. THE COUNTY GENERAL The County is located in the north-central portion of the State. The Town of Chapel Hill is the largest municipality in the County and is the home of The University of North Carolina at Chapel Hill. See Appendix A for a description of the County. FINANCIAL INFORMATION The financial statements of the County have been audited by certified public accountants for the fiscal year ended June 30, 2018. Excerpts from the financial statements of the County for the fiscal year ended June 30, 2018 are available in Appendix B hereto. Copies of the complete financial statements containing the unqualified report of the independent certified public accountants are available in the office of Gary Donaldson, Chief Financial Officer, 200 South Cameron St., Hillsborough, North Carolina 27278. 17 74 LEGAL MATTERS LITIGATION [County to confirm] To the best of the knowledge of the County, no litigation is now pending or threatened against or affecting the County which seeks to restrain or enjoin the authorization,execution or delivery of the 2019B Bonds, the Trust Agreement or the Modified Deed of Trust, or which contests the County's creation, organization or corporate existence, or the title of any of the present officers thereof to their respective offices or the authority or proceedings for the County's authorization, execution and delivery of the 2019B Bonds, the Trust Agreement or the Modified Deed of Trust, or the County's authority to carry out its obligations thereunder or which would have a material adverse impact on the County's condition, financial or otherwise. OPINIONS OF COUNSEL Legal matters related to the execution, sale and delivery of the 2019B Bonds are subject to the approval of Sanford Holshouser LLP. Certain legal matters will be passed upon for the County by its counsel, John L. Roberts, Esq., and for the Underwriters by their counsel, McGuireWoods LLP. The opinion of Sanford Holshouser LLP, as Bond Counsel, substantially in the form set forth in Appendix D hereto,will be delivered at the time of the delivery of the 2019B Bonds. Bond Counsel's approving legal opinion expresses Bond Counsel's professional judgment as to the legal issues explicitly addressed in the opinion. By rendering a legal opinion, an opinion giver does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of parties to the transaction. Additionally, the rendering of an opinion does not guarantee the outcome of any legal dispute that may arise out of the transaction, and a bond opinion is not a statement (either expressly or by implication) concerning the marketability, value or likelihood of payment of the bonds. Bond Counsel has not been engaged to investigate the County's operations or condition or the County's ability to provide for payments on the 2019B Bonds. Bond Counsel will express no opinion(1) as to the County's financial condition or its ability to provide for payments on the 2019B Bonds, or(2)as to the accuracy, completeness or fairness of any information that may have been relied on by anyone in making a decision to purchase 2019B Bonds, including this Official Statement. In this transaction, Bond Counsel serves only as bond counsel to the County. TAX TREATMENT OPINION OF BOND COUNSEL In the opinion of Sanford Holshouser LLP, Carrboro, North Carolina, Bond Counsel for the County ("Bond Counsel"), under existing law, interest on the 2019B Bonds paid by the County (1) will not be included in gross income for federal income tax purposes, (2) will not be a specific item of tax preference for purposes of the federal alternative minimum income tax, and (3) will be exempt from existing State of North Carolina income taxes. The proposed form of Bond Counsel's opinion is attached as Appendix D. Bond Counsel's opinion does not address the tax-exempt status of payments on the 2019B Bonds derived from parties other than the County(for example,payments derived from proceeds of a foreclosure 18 75 on the Mortgaged Property), even if those payments are denominated as interest with respect to the 2019B Bonds. Bond Counsel will give its opinion in reliance upon certifications by County representatives and others as to certain facts relevant to the opinion. The County has covenanted to comply with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), regarding, among other matters, the use, expenditure and investment of the proceeds derived from the sale of the 2019B Bonds and the timely payment to the United States of any arbitrage profit with respect to the 2019B Bonds. The County's failure to comply with its covenants could cause interest on the 2019B Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the 2019B Bonds. DISCOUNT BONDS The initial public offering prices of the 2019B Bonds maturing on October 1, 20 through October 1, 20_, inclusive (collectively, the "Discount Bonds"), are less than the amounts payable at maturity. An amount not less than the difference between the initial offering prices to the public (excluding bond houses,brokers or similar persons or organizations acting in the capacity of underwriters, placement agents,wholesalers or other intermediaries) of the Discount Bonds and the amounts payable at maturity constitutes original issue discount. Under existing federal income tax law and regulations, the original issue discount on a Discount Bond is interest not includable in the gross income of an owner who purchases such Discount Bond in the original offering at the initial public offering price thereof and holds it to maturity, and such owner will not realize taxable gain upon payment of such Discount Bond at maturity. Owners who purchase Discount Bonds at a price other than the initial offering price or who do not purchase Discount Bonds in the initial public offering should consult their tax advisors with respect to the consequences of the ownership of such Discount Bonds. An owner who purchases a Discount Bond in the initial offering at the initial offering price and holds such Discount Bond to maturity is deemed under existing federal tax laws and regulations to accrue original issue discount on a constant yield basis under Section 1288 of the Code from the date of original issue. An owner's adjusted basis in a Discount Bond is increased by accrued original issue discount for purposes of determining gain or loss on sale, exchange or other disposition of such Discount Bond. Accrued original issue discount may be taken into account as an increase in the amount of tax-exempt interest received or deemed to have been received for purposes of determining various other tax consequences of owning a Discount Bond, including in the calculation of adjusted current earnings of corporations for purposes of computing the alternative minimum tax imposed by the Code on corporations, even though there will not be a corresponding cash payment. Bond Counsel's opinion will not address issues relating to the treatment of original issue discounts on Discount Bonds. Owners and prospective purchasers of Discount Bonds should consult their own tax advisors regarding the calculation of accrued original issue discount for federal income tax purposes and any North Carolina or other state and local tax consequences in connection with the ownership or disposition of Discount Bonds. PREMIUM BONDS The initial public offering prices of the 2019B Bonds maturing on October 1, 20_ through October 1, 20_, inclusive (collectively, the "Premium Bonds"), are greater than the amounts payable at maturity. The difference between (a) the initial offering prices to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents, wholesalers or other intermediaries) at which a substantial amount of each maturity of the Premium Bonds is sold and (b) the principal amount payable at maturity of such Premium Bonds constitutes original issue premium. In general, an owner of a Premium Bond must amortize the bond premium over 19 76 the remaining term of the Premium Bond based on the owner's yield over the remaining term of the Premium Bond, determined based on constant yield principles (in certain cases involving a Premium Bond callable prior to its stated maturity date, the amortization period and yield may be required to be determined on the basis of an earlier call date that results in the lowest yield on such Premium Bond). An owner of a Premium Bond must amortize the bond premium by offsetting the qualified stated interest allocable to each interest accrual period under the owner's regular method of accounting against the bond premium allocable to that period and subtract such bond premium from the owner's basis in such Premium Bond. If the bond premium allocable to an accrual period exceeds the qualified stated interest allocable to that accrual period, the excess is a nondeductible loss. Under certain circumstances, the owner of a Premium Bond may realize a taxable gain upon disposition of the Premium Bond even though it is sold or redeemed for an amount less than or equal to the owner's original acquisition cost. Bond Counsel's opinion will not specifically address any issues relating to the treatment of premium paid on, or attributable to,Premium Bonds. Owners and prospective purchasers of Premium Bonds should consult their own tax advisors regarding the treatment of bond premium for federal income tax purposes and any North Carolina or other state and local tax consequences in connection with receipt of bond premium or otherwise with respect to the ownership and disposition of Premium Bonds. OTHER TAX CONSEQUENCES Ownership or transfer of, or the accrual or receipt of interest on, the 2019B Bonds may result in collateral federal, State of North Carolina, and other state or local tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, certain foreign corporations doing business in the United States, certain S corporations with excess passive income, individual recipients of Social Security or Railroad Retirement benefits, taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations,taxpayers who may be eligible for the federal earned income tax credit, and taxpayers subject to franchise, estate, inheritance, gift or capital gains taxes. Owners and prospective purchasers of the 2019B Bonds should consult their tax advisors as to any such possible tax consequences. Except to the extent covered in its legal opinion,Bond Counsel expresses no opinion regarding any such collateral tax consequences. Interest on the 2019B Bonds may or may not be subject to state or local taxation in jurisdictions other than North Carolina. Owners and prospective purchasers of the 2019B Bonds should consult their own tax advisors as to the status of interest on the 2019B Bonds under the tax laws of any such jurisdiction other than North Carolina. Bond Counsel will express no opinion as to any such matters. No assurance can be given that future legislation, including amendments to the Code or interpretations thereof, if enacted into law, or certain litigation or judicial decisions, if upheld, will not contain provisions or produce results which could, directly or indirectly, reduce the benefit of the excludability of interest on the 2019B Bonds from gross income for federal income tax purposes. The Internal Revenue Service (the "Service") has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. No assurances can be given as to whether or not the Service will commence an audit of the 2019B Bonds. Interest paid on tax-exempt obligations, such as the 2019B Bonds, will be subject to information reporting in a manner similar to interest paid on taxable obligations. Although such reporting requirement does not, in and of itself, affect the excludability of interest with respect to the 2019B Bonds from gross income for federal income tax purposes, such reporting requirement causes the payment of interest with 20 77 respect to the 2019B Bonds to be subject to backup withholding if such interest is paid to beneficial owners who (a) are not "exempt recipients," and (b) either fail to provide certain identifying information (such as the beneficial owner's taxpayer identification number) in the required manner or have been identified by the Service as having failed to report all interest and dividends required to be shown on their income tax returns. Generally, individuals are not exempt recipients, whereas corporations and certain other entities generally are exempt recipients. Amounts withheld under the backup withholding rules from a payment to a beneficial owner would be allowed as a refund or credit against such beneficial owner's federal income tax liability provided the required information is furnished to the Service. CONTINUING DISCLOSURE OBLIGATION In accordance with the requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 ("Rule 15c2-12"), the County has undertaken in the Trust Agreement to provide, or cause to be provided through the Trustee, to the Municipal Securities Rulemaking Board(the"MSRB"): (1) by not later than seven months after the end of each fiscal year, beginning with the fiscal year ended June 30, 2019, the audited financial statements of the County 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 then available,unaudited financial statements of the County for such fiscal year to be replaced subsequently by audited financial statements of the County to be delivered within 15 days after such audited financial statements become available for distribution; (2) by not later than seven months after the end of each fiscal year, beginning with the fiscal year ended June 30, 2019, the financial and statistical data as of a date not earlier than the end of the preceding fiscal year for the type of information included under the captions "THE COUNTY—DEBT INFORMATION" and "—TAX INFORMATION" in Appendix A relating to the 2019B Bonds (excluding any information on overlapping or underlying debt) to the extent such items are not included in the audited financial statements referred to in(1)above; (3) 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 2019B Bonds: (a) principal and interest payment delinquencies; (b) non-payment related defaults,if material; (c) unscheduled draws on debt service reserves reflecting financial difficulties; (d) unscheduled draws on credit enhancements reflecting financial difficulties; (e) substitution of credit or liquidity providers, or their failure to perform; (f) 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 2019B Bonds, or other material events affecting the tax status of the 2019B Bonds; (g) modifications to rights of holders of the 2019B Bonds,if material; 21 78 (h) calls for redemption of 2019B Bonds (other than calls pursuant to sinking fund redemption),if material, and tender offers; (i) defeasances; (j) release, substitution, or sale of property securing repayment of the 2019B Bonds, if material; (k) rating changes; (1) 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 2019B Bonds (collectively,the"Obligated Persons"); (m) 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; (n) appointment of a successor or additional trustee or the change of name of a trustee, if material; (o) 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 security holders,if material; and (p) 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 (4) in a timely manner, notice of a failure of the County to provide required annual financial information described in(1) or(2) above on or before the date specified. For purposes of the foregoing, "financial obligation" means a (a) debt obligation, (b) 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 (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. For the purposes of the event identified in subparagraph (1) 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. 22 79 The County shall provide the document 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 described above by transmitting the documents referred to above to any entity and by any method authorized by the U.S. Securities and Exchange Commission. At present, Section 159-34 of the General Statutes of North Carolina requires that the County's financial statements be prepared in accordance with generally accepted accounting principles and that they be audited in accordance with generally accepted auditing standards. The County has acknowledged in the Trust Agreement that its undertaking pursuant to Rule 15c2- 12 is intended to be for the benefit of the registered owners of the 2019B Bonds and is enforceable by the Trustee or by any registered owner of the 2019B Bonds. THE RIGHT TO ENFORCE THE PROVISIONS OF THE COUNTY's RULE 15C2-12 UNDERTAKINGS IS LIMITED TO A RIGHT TO OBTAIN SPECIFIC PERFORMANCE OF THE COUNTY'S OBLIGATIONS AND A FAILURE BY THE COUNTY TO COMPLY WITH ITS RULE 15C2-12 UNDERTAKINGS WILL NOT BE AN EVENT OF DEFAULT UNDER THE TRUST AGREEMENT AND WILL NOT RESULT IN ACCELERATION OF THE INSTALLMENT PAYMENTS. The County may modify from time to time, consistent with Rule 15c2-12, the information provided or the format of the presentation of such information, to the extent necessary or appropriate in the judgment of the County; provided that (1) 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; (2)the information to be provided, as modified,would have complied with the requirements of the Rule 15c2-12 as of the date of this Official Statement, after taking into account any amendments or interpretations of the Rule 15c2-12, as well as any changes in circumstances; and(3) any such modification does not materially impair the interest of the Owners or the beneficial owners, as determined by the Trustee or nationally recognized bond counsel or by the approving vote of the Owners of a majority in principal amount of the 2019B Bonds. 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 County's Rule 15c2-12 undertakings will terminate on payment, or provision having been made for payment in a manner consistent with the Rule 15c2-12, in full of the principal and interest with respect to the 2019B Bonds. THE COUNTY'S CONTINUING DISCLOSURE COMPLIANCE [To be reviewed/confirmed][During the past five years,the County has not failed to comply in all material respects with the terms of its prior undertakings under Rule 15c2-12, except as described in the following paragraphs. The County had certain disclosure information that was due to be posted by January 31, 2017, with respect to the fiscal year ended June 30, 2016. At that deadline, however, the County's CAFR (including its audit) for the fiscal year ended June 30, 2016, was not yet available. Prior to the deadline, the County posted certain unaudited financial statements as called for by the terms of its continuing disclosure undertakings. In this posting, however, by oversight, the County did not post its adopted budget or the supplemental financial information as required by its continuing disclosure undertakings. The County posted such required supplemental financial information in March 2017 and its adopted budget in October 2017. Additionally, for some years, while the County timely posted its annual 23 80 disclosures on EMMA, such annual disclosures were not always properly linked to each of the County's CUSIP numbers. In April 2019, the County determined that it had in some circumstances inadvertently failed to post on the EMMA system information regarding its approved County budget for the 2018-19 fiscal year, as required by some of the County's continuing disclosure obligations, although the County's CAFR included some budget information. Upon becoming aware of this issue, the County promptly moved to properly link the required budget information to all relevant CUSIP numbers. The County has filed notices of failure to file the items described above as required by Rule 15c2- 12,which describe the occasions of non-compliance and corrected compliance. The County is not aware of any other occasions in which it was in material noncompliance with any of its continuing disclosure undertakings. The County has not knowingly failed to comply with its prior continuing disclosure undertakings. The County believes that at this point, it has filed all the financial information that its previous commitments require, and that all required financial information is posted with regard to all relevant CUSIP numbers.] UNDERWRITING The Underwriters have agreed under the terms of a Bond Purchase Agreement (the "Purchase Agreement") to purchase all of the 2019B Bonds, if any of the 2019B Bonds are to be purchased, at a purchase price equal to 100% of the principal amount of the 2019B Bonds, plus/less [net] original issue premium/discount of$ , less an Underwriters' discount of$ . The Underwriters' obligation to purchase the 2019B Bonds is subject to certain terms and conditions set forth in the Purchase Agreement. FTN Financial Capital Markets is a division of First Tennessee Bank National Association and FTB Advisors, Inc. is a wholly-owned subsidiary of First Tennessee Bank National Association. FTN Financial Capital Markets has entered into a distribution agreement with FTB Advisors, Inc. for the distribution of the Bonds at the original issue prices. Such arrangement generally provides that FTN Financial Capital Markets will share a portion of its underwriting compensation or selling concession with FTB Advisors,Inc. 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. The Underwriters may offer and sell the 2019B Bonds to certain dealers (including dealers depositing the 2019B Bonds into investment trusts) and others at prices lower than the initial public offering prices stated on the inside front cover page hereof. The public offering prices may be changed from time to time by the Underwriters. RATINGS Moody's, S&P and Fitch have assigned ratings of"�]," "[�" and "�]," respectively, to the 2019B Bonds. These ratings reflect only the view of such rating agencies, and an explanation of the significance of such ratings may be obtained from such rating agencies. Certain information and materials not included in this Official Statement were furnished to such rating agencies. There is no assurance that such ratings will continue for any given period of time or that such ratings will not be 24 81 revised downward or withdrawn entirely if, in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the 2019B Bonds. MISCELLANEOUS All quotations from and summaries and explanations of the Trust Agreement and the Modified Deed of Trust contained herein or in Appendix C hereto do not purport to be complete, and reference is made to such documents for full and complete statements of their respective provisions. The Appendices attached hereto are a part of this Official Statement. Copies in reasonable quantity of the Trust Agreement and the Modified Deed of Trust may be obtained during the offering period from Robert W. Baird & Co. Incorporated at 380 Knollwood Street, Suite 440, Winston-Salem, North Carolina 27103 or FTN Financial Capital Markets at 845 Crossover Lane,Memphis,Tennessee 38117. The information contained in this Official Statement has been compiled or prepared from information obtained from the County and other sources deemed to be reliable and, although not guaranteed as to completeness or accuracy, is believed to be correct as of this date. Any statements involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. 25 82 APPENDIX A THE COUNTY 83 APPENDIX B MANAGEMENT'S DISCUSSION AND ANALYSIS AND THE BASIC FINANCIAL STATEMENTS OF ORANGE COUNTY,NORTH CAROLINA 84 [THIS PAGE INTENTIONALLY LEFT BLANK] 85 Management's Discussion and Analysis The Management's Discussion and Analysis of the financial activities of the County, lifted from the Comprehensive Annual Financial Report for the County for the fiscal year ended June 30, 2018, is included in this Appendix. Management's Discussion and Analysis provides an objective and easily readable short and long-term analysis of the County's financial activities based on currently known facts, decisions or conditions. Management's Discussion and Analysis is not a required part of the Basic Financial Statements but is supplementary information required by the Governmental Accounting Standards Board. The independent auditors of the County have applied certain limited procedures,which consist primarily of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However,they did not audit this information and did not express an opinion on it. B-1 86 Financial Information The financial statements of the County have been audited by certified public accountants for the fiscal year ended June 30, 2018. Copies of these financial statements containing the unqualified report of the independent certified public accountant are available in the office of the Chief Financial Officer at 200 South Cameron St.,Hillsborough,North Carolina 27278. The following financial statements are the Basic Financial Statements of the County, the notes thereto and certain required supplementary information, lifted from the Comprehensive Annual Financial Report of the County for the fiscal year ended June 30,2018. B-2 87 APPENDIX C SUMMARY OF PRINCIPAL LEGAL DOCUMENTS 88 [THIS PAGE INTENTIONALLY LEFT BLANK] 89 APPENDIX D FORM OF OPINION OF BOND COUNSEL 90 [THIS PAGE INTENTIONALLY LEFT BLANK] 91 APPENDIX E BOOK-ENTRY ONLY SYSTEM 92 [THIS PAGE INTENTIONALLY LEFT BLANK] 93 APPENDIX E BOOK-ENTRY ONLY SYSTEM Beneficial ownership interests in the 2019B Bonds will be available only in a book-entry system. The actual purchasers of the 2019B Bonds (the`Beneficial Owners")will not receive physical certificates representing their interests in such 2019B Bonds purchased. So long as The Depository Trust Company ("DTC"),New York,New York, or its nominee is the registered owner of the 2019B Bonds,references in this Official Statement to the Owners of the 2019B Bonds shall mean DTC or its nominee and shall not mean the Beneficial Owners of the 2019B Bonds. The Trust Agreement contains provisions applicable to periods when DTC or its nominee is not the registered owner. The following description of DTC, its procedures and record keeping with respect to beneficial ownership interests in the 2019B Bonds, payment of interest and other payments with respect to the 2019B Bonds to DTC Participants or to beneficial owners, confirmation and transfer of beneficial ownership interests in the 2019B Bonds and/or other transactions by and between DTC,DTC Participants and beneficial owners is based on information furnished by DTC. DTC will act as securities depository for the 2019B Bonds. The 2019B Bonds will be registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate in the aggregate principal amount of each maturity of the 2019B Bonds will be deposited with DTC or its designee. So long as Cede & Co. is the registered owner of the 2019B Bonds, as DTC's Partnership nominee, reference herein to the Owners or registered owners of the 2019B Bonds shall mean Cede & Co. and shall not mean the beneficial owners of the 2019B Bonds. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book- entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation as well as by the New York Stock Exchange, Inc., the American Stock Exchange, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non- U.S. securities brokers and dealers, banks trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants" and collectively with the Direct Participants, the "Participants"). DTC has a Standard & Poor's rating of AA+. The DTC rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of 2019B Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for 2019B Bonds on DTC's records. The ownership interest of E-1 94 each actual purchaser of the 2019B Bonds(the`Beneficial Owner")is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 2019B Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners of such 2019B Bonds. Beneficial Owners will not receive certificates representing their ownership interests in 2019B Bonds, except in the event that use of the book-entry system for such 2019B Bonds is discontinued. To facilitate subsequent transfers,all 2019B Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such name as may be requested by an authorized representative of DTC. The deposit of 2019B Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the identities of the actual Beneficial Owners of the 2019B Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such 2019B Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the 2019B Bonds may wish to take certain steps to augment transmission to them of notices of significant events with respect to such 2019B Bonds, such as redemptions, defaults and proposed amendments to the security documents. For example, Beneficial Owners of the 2019B Bonds may wish to ascertain that the nominee holding such 2019B Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the 2019B Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in the 2019B Bonds of such maturity to be redeemed. Neither DTC nor Cede & Co. (nor such other DTC nominee)will consent or vote with respect to the 2019B Bonds unless authorized by a Direct Participant in accordance with DTC's procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Trustee as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting and voting rights to those Direct Participants to whose accounts such 2019B Bonds are credited on the record date(identified in a listing attached to the Omnibus Proxy). Because DTC is treated as the owner of the 2019B Bonds for substantially all purposes under the Trust Agreement, Beneficial Owners may have a restricted ability to influence in a timely fashion remedial action or the giving or withholding of requested consents or other directions. In addition, because the identity of Beneficial Owners is unknown to the County, to DTC or to the Trustee, it may be difficult to transmit information of potential interest to Beneficial Owners in an effective and timely manner. Beneficial Owners should make appropriate arrangements with their broker or dealer regarding distribution of information regarding the 2019B Bonds that may be transmitted by or through DTC. E-2 95 Principal, premium, if any, and interest payments on the 2019B Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Trustee, on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participants and not of DTC (nor its nominee), the Trustee or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, if any, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the Trustee's responsibility, disbursement of such payments to Direct Participants is DTC's responsibility, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. The County cannot and does not give assurance that Direct and Indirect Participants will promptly transfer payments to Beneficial Owners. DTC may discontinue providing its services as securities depository with respect to the 2019B Bonds at any time by giving reasonable notice to the County and the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical certificates representing interests in 2019B Bonds are required to be printed and delivered. The County may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, physical certificates will be printed and delivered to DTC. The County and the Trustee have no responsibility or obligation to DTC, the Direct Participants, the Indirect Participants or the Beneficial Owners with respect to (1) the accuracy of any records maintained by DTC or any Participant, or the maintenance of any records; (2)the payment by DTC or any Participant of any amount due to any Beneficial Owner in respect of the 2019B Bonds, or the sending of any amount due to any beneficial owner in respect to the 2019B Bonds or the sending of transaction statements; (3) the delivery or timeliness of delivery by DTC or any Participant of any notice to any Beneficial Owner which is required or permitted under the Trust Agreement to be given to Owners; (4) the selection of the Beneficial Owners to receive payments upon any partial redemption of the 2019B Bonds; or (5) any consent given or other action taken by DTC or its nominee as the registered owner of the 2019B Bonds,including any action taken pursuant to an omnibus proxy. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources the County believes to be reliable, but the County takes no responsibility for the accuracy thereof. E-3 96 Attachment 5 MW Draft of 08/16/2019 $[ 1 ORANGE COUNTY,NORTH CAROLINA LIMITED OBLIGATION BONDS, SERIES 2019B BOND PURCHASE AGREEMENT October [_], 2019 Orange County,North Carolina Hillsborough,North Carolina Ladies and Gentlemen: The undersigned, Robert W. Baird & Co. Incorporated ("Baird") on its own behalf and as representative of FTN Financial Capital Markets (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 Underwriters, all (but not less than all) of the $[ ] aggregate principal amount of the County's Limited Obligation Bonds, Series 2019B (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 $[] (representing the principal amount of the Bonds, plus/less [net] original issue premium/discount of $[ ], and less underwriters' discount of$[ ]) (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"), and a Second Supplemental Trust Agreement dated as of November 1, 2019 (the "Second Supplemental Trust Agreement" and, collectively with the 2018 Trust Agreement, as previously supplemented, 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 funds to the County to (i) acquire, construct, equip and otherwise improve a variety of County facilities and assets, 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 October [_], 2019 (the "Approving Resolution"). As security for performance of the County's obligations under the Trust Agreement, the County will execute and deliver to a deed of trust trustee (the "Deed of Trust Trustee"), 97 for the benefit of the Trustee, a Deed of Trust Supplement#2 dated as of November 1, 2019 (the"Second Deed of Trust Supplement"), supplementing the Existing 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) Baird, 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 Baird, 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,] [t]he 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, Baird shall report to the County 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, Baird agrees to promptly report to the County the prices at which it sells 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) [Baird 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 Baird, on behalf of the Underwriters, agrees 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 Underwriters 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: -2- 98 (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 Underwriters 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) Baird confirms that any selling group agreement and any retail distribution agreement (to which Baird 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 Baird 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 Baird. The County acknowledges that, in making the representation set forth in this subsection, Baird 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 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 either of 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 -3- 99 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 October [], 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 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 Approving Resolution, 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 -4- 100 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 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 -5- 101 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, 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 for the period ended 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. (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 -6- 102 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. 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 November [_], 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 custody 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 -7- 103 securities depository for the Bonds; and (b) deliver or cause to be delivered, to the Underwriters at Winston-Salem, 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 6, 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 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, -8- 104 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 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 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; -9- 105 (iv) An opinion of McGuireWoods LLP, 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 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) A photocopy of the 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 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; -10- 106 (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"[ ],""[ ]"and"[I",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 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 neither the County nor 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 and counsel for the County; (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, (ii)the cost of obtaining CUSIP number(s) assigned for the Bonds, and (iii) the fees and disbursements of counsel for the Underwriters. (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 each Underwriter and each person who controls any Underwriter 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 -11- 107 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. Each Underwriter severally and not jointly agrees to indemnify and hold 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 each Underwriter, 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 one or more of 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 -12- 108 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 omissions which resulted in such losses, as well as any other relevant equitable considerations. In no case shall any Underwriter(except as may be provided in any agreement among the Underwriters relating to the offering)be responsible for any amount in excess of the purchase discount or fee applicable to the Bonds purchased by such Underwriter 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 Underwriter within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as the Underwriter, 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 Baird as follows: Orange County,North Carolina 200 South Cameron Street Hillsborough,North Carolina 27278 (Attention: County Manager) Robert W. Baird&Co. Incorporated 380 Knollwood Street, Suite 440 Winston-Salem,North Carolina 27103 (Attention: Ryan Maher,Managing Director) (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. (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 principals and not as municipal advisors, financial advisors or agents 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 -13- 109 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 their role as underwriters, their 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. (e) On April 1, 2019, Baird Financial Corporation, the parent company of 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] -14- 110 Very truly yours, ROBERT W.BAIRD& CO.INCORPORATED, on its own behalf and on behalf of FTN Financial Capital Markets By: Ryan Maher,Managing Director Approved, accepted and agreed to: ORANGE COUNTY,NORTH CAROLINA By: Bonnie B. Hammersley, County Manager [Signature Page for Bond Purchase Agreement] 111 EXHIBIT A Terms of the Bonds Principal Amounts,Interest Rates and Prices Maturity Date (October 1) Principal Amount Interest Rate Yield Price * Yield to October 1, 20[ ] call date at par. Redemption Provisions A-1 112 EXHIBIT B �[ 1 Orange County,North Carolina Limited Obligation Bonds, Series 2019B ISSUE PRICE CERTIFICATE The undersigned, on behalf of Robert W. Baird & Co. Incorporated("Baird"), on behalf of itself and FTN Financial Capital Markets (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 Bonds. As of the date of this certificate, for each Maturity of the Bonds, 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.][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 members of the Underwriting Group have 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. Baird 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. Each of the other members of the Underwriting Group [and each selling group member] has represented that it would not offer or sell any Maturity of the Hold the-Offering-Price Maturities 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 (October [ 1, 2019), or (ii) the date on which the Underwriters have 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-1 113 (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 October[_],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 Baird'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 and, in certain cases,the undersigned is relying on representations made by other members of the Underwriting Group. B-2 114 ROBERT W.BAIRD& CO.INCORPORATED, on its own behalf and as representative of FTN Financial Capital Markets By: Ryan Maher,Managing Director Dated: November , 2019 B-3 115 Schedule A Sale Prices of the [Bonds][General Rule Maturities and Initial Offering Prices of the Hold-the-Offering Price Maturities] B-4 116 [Schedule B Pricing Wire or Equivalent Communication (Attached)] B-5 117 ORANGE COUNTY NORTH CAROLINA FY 2019=20 Fall Financing Series 2019B New Money and Refunding Limited Obligation Bonds Gary Donaldson, Chief Financial Officer October 1 , 2019 118 Boar' end LGC Authorization ➢ Board Approval for FY 2018-19 Installment Purchase Financing as authorized under Section 160A-20 of North Carolina General Statutes ➢ Fall Financing Issuances comprised of: • $18.9 Million New Money Bonds for CIP • $16.4 Million in Refunding Bonds Total $35.3 Million (Refunding component Subject to market conditions on pricing date) ORANGE COUNTY NORTH CAROLINA Revised List of Financed Projects 119 Component Estimated Cost Northern Campus Project: site preparation and preliminary costs for new detention center, agriculture-environment center, and parks operations base $10,019,850 Southern Campus Project: improvements to the driveway and access road to the Southern Campus, as well as providing additional parking for the Seymour Center 4,675,000 Seymour Center Building Expansion 990,000 River Park Phase II 298,500 1 nk. f "enteF aeR;ediatiGn To Be Re-bid 6,500,0 Passmore Center Remediation 199,114 Sportsplex Improvements/ Equipment 605,036 Community Loan Fund 224,340 Vehicle Replacements 1 ,030,550 Whitted Building — Elevator Work 154,000 Emergency Services Building Remediation 731 ,000 Total $18,927,390 Note: Vehicle Replacement includes Public Safety,Animal Control and Emergency Services vehicles. ORANGE COUNTY NORTH CAROLINA 120 RefinancingSavings Summary SAVINGS Orange County, North Carolina Limited Obligation Bonds, Series 2019E Prior Prior Prior Refunding Date Debt Service Receipts Net Cash Flow Debt Service Savings 06/30/2020 1,529,691.28 1,529,691.28 06/30/2021 4,735,812.26 4,735,812.26 4,621,293.05 114,519.21 06/30/2022 3,297,389.98 3,297,389.98 3,181,250.00 116,139.98 06/30/2023 1,483,127.20 1,483,127.20 1,429,125.00 54,002.20 06/30/2024 1,109,923.92 1,109,923.92 1,071,125.00 38,798.92 06/30/2025 1,093,622.34 1,093,622.34 1,050,375.00 43,247.34 06/30/2026 1,076,192.96 1,076,192.96 1,028,625.00 47,567.96 06/30/2027 1,059,657.08 1,059,657.08 1,015,625.00 44,032.08 06/30/2028 1,041,993.40 1,041,993.40 996,250.00 45,743.40 06/30/2029 519,223.22 519,223.22 488,125.00 31,098.22 06/30/2030 507,103.04 507,103.04 481,500.00 25,603.04 06/30/2031 494,982.86 494,982.86 464,375.00 30,607.86 06/30/2032 91,862.68 91,862.68 86,250.00 5,612.68 06/30/2033 89,713.02 89,713.02 87,125.00 2,588.02 18,130,295.24 1,529,691.28 16,600,603.96 16,001,043.05 599,560.91 Note: Actual savings subject to market on October 16 Bond Pricing ARM- ORANGE COUNTY NORTH CAROLINA 121 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 63.84% 1.77% 13.53% 2021 65.41% 1.80% 14.59% 2022 65.97% 1.80% 17.94% 2023 66.72% 1.70% 17.18% 2024 68.11% 1.58% 16.23% 2025 69.57% 1.41% 14.80% ORANGE COUNTY NORTH CAROLINA 122 Financing Team and Pricing Schedule Financing Schedule Financing Participants Sep-19 Oct-19 ■ Issuer Orange County, NC 5u Mo Tu We Th Fr Sa Su Mo Tu Ae Th Fr Sa Local Government Commission 1 2 3 4 5 6 7 1 2 3 4 5 8 9 10 11 12 13 14 6 7 8 9 10 11 12 15 16 17 18 19 20 21 13 14 15 16 17 18 19 ■ Financial Advisor: Davenport&Company LLC 22 23 24 25 26 27 28 20 21 22 23 24 25 26 29 30 27 28 29 30 31 ■ Bond Counsel: Sanford Holshouser LLP Nov-19 Su Ma Tu 'uVe Th Fr Sa 1 2 ■ Senior Managing Underwriter: RW Baird &Co. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 ■ Co-Managing Underwriter_ FTN Financial Capital Markets 24 25 26 27 28 29 30 ■ Underwriter's Counsel McGuireWoods LLP ■ September 19t', Rating Agency Calls ■ Trustee: Bank of New York Mellon ■ By October 3r� Receive Ratings ■ October 16th Sell Bonds ■ November 5th Closing ORANGE COUNTY NORTH CAROLINA 123 Questions/Comments ORANGE COUNTY