Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
Agenda 05-21-24; 6-b - Adoption of the Final Financing Resolution Authorizing the Issuance of Installment Purchase Financing for Various Capital Investment Plan Projects
1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 21, 2024 Action Agenda Item No. 6-b SUBJECT: Adoption of the Final Financing Resolution Authorizing the Issuance of Installment Purchase Financing for Various Capital Investment Plan Projects DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: Attachment 1. Resolution Approving Gary Donaldson, (919) 245-2453 Financing Terms and Robert Jessup, (919) 933-9891 Documents for 2024 Installment Financing Attachment 2. Deed of Trust Attachment 3. Trust Agreement Attachment 4. Preliminary Official Statement Attachment 5. Bond Purchase Agreement Attachment 6. Sample School Lease Extension Document PURPOSE: To adopt the final financing resolution authorizing the issuance of up to $13,000,000 in installment financing to finance capital investment projects and equipment for the fiscal year. The financing will also include amounts to pay transaction costs. BACKGROUND: At the May 7, 2024 Business meeting, the Board of County Commissioners conducted a public hearing and received preliminary information on capital projects and equipment financing. The Board approved a resolution making a preliminary determination to finance costs of these 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 County routinely uses installment financing as the vehicle for the annual spring financing. With adoption of the attached resolution, the Board gives final approval for the financing. It substantially approves the final financing documents, and authorizes staff to complete the closing. Staff anticipates receiving the required approval of the Local Government Commission on the afternoon of June 4, 2024, establishing the final bond amount and financing terms on June 13, 2024, and then closing the financing by the end of June 2024. As the process continues, staff will work with the other financing team members to confirm final details of the funding and County payment arrangements, allowing the remaining blanks in the documents to be completed. This process is consistent with past practice. 2 FINANCIAL IMPACT: A preliminary estimate of maximum debt service applicable to the capital investment projects and equipment financing would require the highest debt service payment of $1.3 million in FY 2026. The tax rate equivalent for the estimated highest debt service payment is approximately 0.37 cents. 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, in the form presented. 3 RES-2024-028 Attachment 1 s*h draft of May 6 Resolution providing final approval of terms and documents for Spring 2024 installment financing Introduction -- The Board of Commissioners (the "Board") of Orange Conty, North Carolina (the "County") 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. The Board has determined to finance these undertakings by using an installment financing, as authorized under Section 160A-20 of the North Carolina General Statutes. In an installment financing, the County secures the financing by its promise to pay and a mortgage-like interest in some or all of the property to be acquired or improved, but not by a pledge of specific revenues or the County's taxing power. The County's financing plan also includes the use of limited obligation bonds (the "Bonds"), which represent interests in County payments that can be sold to investors. County staff has made available to the Board the draft documents listed on Exhibit B (the "Documents"), and a draft of an official statement designed to provide information about the County and the financing to prospective investors in the Bonds. These items all relate to the County's carrying out the financing plan. This resolution provides the Board's final approval of the financing terms and the substantially final financing documents, and authorizes County staff to complete the financing process. The Board of Commissioners of Orange County, North Carolina, RESOLVES, 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 improvements and acquisitions. Under the financing plan, the County will receive funds from the sale of the 4 Bonds to carry out the projects. The County will repay the funds over time, with interest. The County will secure its repayment obligation by granting a mortgage-like interest in some or all of the facilities listed on Exhibit C. 2. Approval of Documents;Direction To Execute Documents--The Board approves the forms of the Documents submitted to this meeting. The Board authorizes the Board 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 be consistent with the financing plan described in this resolution and must provide (a) for the amount financed by the County not to exceed $13,000,000 and (b) for a financing term not to extend beyond December 31, 2044.The amount financed under the Documents may include amounts to pay financing expenses and other necessary and incidental costs. As indicated in the draft Documents, some of the Bonds will be issued on a taxable basis, and some on a tax-exempt basis. The true interest cost on the tax- exempt bonds must not exceed 5.00%, and the true interest cost on the taxable bonds must not exceed 6.50%. 3. Sale of Bonds; Approval of Official Statement - The Board appoints Robert W. Baird & Co. Incorporated, as senior manager, and FHN 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 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. 2 5 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 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 the Official Statement is to be used or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 4. Officers To Complete Closing - The Board authorizes the County Manager, the Finance Officer and all other County officers and employees to take all proper steps to complete the financing in accordance with this resolution. The Board authorizes the County Manager to hold executed copies of all financing documents authorized by this resolution in escrow on the County's behalf until the conditions for their delivery have been completed to her satisfaction, and then to release the executed documents for delivery to the appropriate persons or organizations. Without limiting the generality of the previous paragraphs, the Board specifically authorizes the County Manager (a) to approve and enter into, on behalf of the County, any additional agreements appropriate to carry out the financing plan contemplated by this resolution, and (b) to approve changes to any documents previously signed by County officers or employees, provided that the changes do not substantially alter the intent from that expressed in the form originally signed. The County Manager's authorization of the release of any document for delivery will constitute conclusive evidence of her approval of any changes. In addition, the County Manager and the Finance Officer are authorized to take all appropriate steps for the efficient and convenient carrying out of the County's on- going responsibilities with respect to the financing. This authorization includes, without limitation, contracting with third parties for reports and calculations that may be required under the Documents, this resolution or otherwise with respect to the financing. 3 6 5. Additional 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 - Tentative Project List with Estimated Amounts Project Est.Amount ($) Research Triangle Logistics Park $1,684,707 Lake Orange Dam Rehabilitation 252,024 Neuse River Rules/Gravelly Hill Middle School 300,000 Solid Waste Equipment Replacement 574,971 501 West Franklin improvements 2,000,000 Whitted Stormwater Improvements 175,000 Bi-Directional Emergency Response K12 Coverage 1,344,674 Assorted Vehicles 805,743 Deferred Maintenance - capital projects for Chapel 5,118,023 Hill-Carrboro City Schools Project Totals $12,255,142 Financing Costs and Contingencies - estimate 744,858 TOTAL $13,000,000 The final amount financed will not exceed the estimated total needed for the projects and the financing costs. The final amount financed will likely be less than $13,000,000. 5 8 Exhibit B -- Draft Documents (a) A draft dated May 6, 2024 of a Second Supplemental Trust Agreement to be dated on or about June 1, 2024, between the County and The Bank of New York Mellon Trust Company,N.A. (the"Trustee").This instrument provides for the advance of funds to the County, for the issuance of the 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. The Trustee keeps certain official records for the bonds, processes bond payments and other payments, and acts as a representative of the bondholders. (b) A draft dated May 6, 2024 of a Deed of Trust Supplement #2 to be dated on or about June 1, 2024, from the County to a deed of trust trustee for the Trustee's benefit. This instrument provides for a security interest in property to secure the County's repayment obligations and its other obligations under the financing documents. (c) A draft of a Bond Purchase Agreement to be dated on or about June 13, 2024, 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. (d) A draft dated May 6, 2024 of a Lease Extension to be dated on or about June 1, 2024, between the County and The Orange County Boad of Education. Some of the collateral consists of County Schools, for which ownership has been transferred to the County to facilitate the financing of some improvements. The County then leases the schools back to the Board of Education for continued use as schools. As we are continuing to sue the schools as collateral, we need to extend the term of the leases to match the new financing term.The financing plan contemplates similar lease extension with the Chapel Hill - Carrboro Schools, which will proceed according to similar form documents. 6 9 Exhibit C - Potential Collateral Facilities Orange County Library in Hillsborough, Culbreth Middle School, Whitted Building, and Blackwood Farm Park Also from Orange County Schools: Orange Middle, Hillsborough Elementary, New Hope Elementary, Pathways Elementary and Orange High Also Ephesus Elementary School from the Chapel Hill - Carrboro City Schools. Attachment 2 10 s*h draft of May 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 and brief descriptions 9874-05-2954 Orange County Library, Hillsborough 9777-99-9032 Culbreth Middle School 9872-55-7302, 9872-63-3300 Blackwood Farm Park 9864-87-8123 Whitted Building 9875-21-0552 Orange Middle School 9864-78-3471 Hillsborough Elementary School 9872-75-5904 New Hope Elementary School 9865-99-3002 Pathways Elementary School 9875-12-5819 Orange High School 9799-54-17341 9799-44-8776 Ephesus Elementary School Supplements RB 6730, Page 209, and RB 6818, Page 817. 11 STATE OF NORTH CAROLINA ) The collateral is or includes fixtures. ORANGE COUNTY ) This instrument secures future advances. DEED OF TRUST SUPPLEMENT #2 THIS DEED OF TRUST SUPPLEMENT #2 (this "Supplement") is dated as of June 1, 2024, 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"). Introduction The County is issuing its [$13,000,000] (aggregate principal amount) Limited Obligation Bonds, Series 2024 (the "2024 Bonds"), under a Second Supplemental Trust Agreement dated as of June 1, 2024 (the "2024 Agreement"), between the County and BNY-M, as trustee. The County is issuing the 2024 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 2024 Agreement supplements a Trust Agreement dated as of June 1, 2021 (the "2021 Agreement"). Under the 2021 Agreement, as previously supplemented, the County has issued the "Prior Bonds," as defined in Section 2-2. The County secured its repayment obligation with respect to the Prior Bonds by granting a security interest in certain Mortgaged Property, as defined in the Existing Deed of Trust (as defined below). The parties have now agreed that the Mortgaged Property will also secure the County's repayment obligations with respect to the 2024 Bonds as provided in the 2024 Agreement. 2 12 Accordingly, this Supplement supplements the Deed of Trust and Security Agreement granted by the County for the benefit of BNY-M dated as of June 1, 2021, and recorded at RB 6730, Page 209, Orange County Registry, as previously supplemented by the instrument recorded at RB 6818, Page 817, Orange County Registry (together, 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 described in Exhibit A. The County is the record owner of that real property. The County executes and delivers this Supplement to secure current advances under the 2024 Agreement of [$13,000,000], as well as (a) total outstanding advances with respect to the Prior Bonds of approximately $ , and (b) potential future advances up to a total maximum principal amount outstanding at any one time 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, 2021. The current scheduled date for final repayment of amounts secured under the Modified Deed of Trust is October 1, 2044. NOW, THEREFORE, (1) in consideration of the execution and delivery of the 2024 Bonds and the 2024 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 the "Loan Documents," as defined in Section 2-2, (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 "Mortgaged Property," as defined in the Existing Deed of Trust; along with TO HAVE AND TO HOLD the Mortgaged Property with all privileges and appurtenances belonging thereunto, to the Deed of Trust Trustee, her successors 3 13 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 this Modified Deed of Trust, including directing the Deed of Trust Trustee to sell the Mortgaged Property under power of sale. The County covenants with the Deed of Trust Trustee and BNY-M that the County is seized of and has the right to convey the Mortgaged Property in fee simple, that the Mortgaged Property is free and clear of all liens and encumbrances other than Permitted Encumbrances, as defined in Section 2-2, 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 2021 Agreement, as supplemented from time to time. 4 14 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 Modified Deed of Trust. The total amount, including present and future obligations, that may be secured by this Modified Deed of Trust at any one time is $200,000,000. The period within which future obligations may be incurred is 30 years from June 1, 2 02 1. 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. 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. 5 15 2. Miscellaneous 2-1 Notices. (a) Any communication provided for in this Supplement must be in English and must be in writing. "Writing" includes electronic mail but does not include facsimile transmission. (b) For the purposes of this Supplement, any communication sent by or electronic mail will be deemed to have been given on the date the communication is similarly acknowledged by a County Representative (in the case of the County) or other authorized representative (in the case of any other party). No such communication will be deemed given or effective without such an acknowledgment. Any electronic communication to the Trustee is subject to the provisions of Section 9.02 of the 2021 Agreement. (c) Any other 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 2024 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 2024 Orange County (NC) Financing, 4655 Salisbury Rd., STE 300, Jacksonville, FL 32256 (iii) if to BNY-M, to The Bank of New York Mellon Trust Company, N.A., Re: Notice for 2024 Orange County (NC) Financing, 4655 Salisbury Rd., STE 300, Jacksonville, FL 32256 (d) 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. 6 16 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. In addition, the following terms used in this Supplement have the following meanings, unless the context clearly requires otherwise: The "Loan Documents" are the 2021 Agreement, the First Supplemental Trust Agreement dated as of June 13, 2023 (the "2023 Agreement"), which provided for the issuance of the 2023 Bonds, the 2024 Agreement, the 2024 Bonds, the Prior Bonds and the Modified Deed of Trust. "Permitted Encumbrances" means, as of any particular time, (a) the encumbrances on the County's title to the Mortgaged Property that are stated on Exhibit B, (b) liens for taxes and assessments not then delinquent, or liens which may remain unpaid pursuant to the Modified Deed of Trust, (c) the Modified Deed of Trust, (d) any lien or encumbrance which is made by its terms expressly subordinate to the lien of the Modified Deed of Trust, including leases of Mortgaged Property made by the County, as lessor, to other units of State or local government, (e) easements and rights-of-way granted by the County pursuant to the Modified Deed of Trust, and (f) encumbrances on the County's title to property that may be added in the future to the definition of the Mortgaged Property existing at the time the property becomes part of the Mortgaged Property. "Prior Bonds" means all the County's limited obligation bonds issued pursuant to the 2021 Agreement, as previously supplemented, and specifically means the following bonds: $12,585,000 original aggregate principal amount Limited Obligation Bonds, Series 2021A and 2021B (the "2021 Bonds") $14,298,000 original aggregate principal amount Limited Obligation Bonds, Series 2023A and 2023B (the "2023 Bonds") 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. 17 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 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 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 entire agreement with respect to its general subject matter between the County, the Trustee and the Deed of Trust Trustee. This Supplement may not be changed except in accordance with the other Loan Documents. The Deed of Trust Trustee's consent 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: Laura Jensen 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 Laura Jensen 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 June, 2024. [SEAL] Notary Public My commission expires: [Deed of Trust Supplement#1 dated as of June 1, 2024, for the benefit of The Bank of New York Mellon Trust Company, N.A., as Trustee] 9 19 EXHIBIT A - Pledged Sites Description PARCEL ONE- ORANGE COUNTYLIBRARY: THAT CERTAIN REAL PROPERTY AND IMPROVEMENTS THEREON SITUATED IN HILLSBOROUGH, HILLSBOROUGH TOWNSHIP, ORANGE COUNTY, NORTH CAROLINA, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEING ALL OF LOT 1 CONTAINING 0.498 ACRE, MORE OR LESS, AS SHOWN ON THAT CERTAIN PLAT OF SURVEY ENTITLED "FINAL PLAT RECOMBINATION ORANGE COUNTY COMPLEX" RECORDED IN PLAT BOOK 105, PAGE 117, ORANGE COUNTY REGISTRY, REFERENCE TO WHICH PLAT OF SURVEY IS HEREBY MADE FOR A MORE PARTICULAR DESCRIPTION OF LOT 1; TOGETHER WITH ANY AND ALL ACCESS, UTILITY AND OTHER EASEMENTS AND RIGHTS OF ANY KIND OR NATURE APPURTENANT TO THE ABOVE-DESCRIBED LOT 1, INCLUDING, BUT NOT LIMITED TO (A) THE MOTOR VEHICLE ACCESS EASEMENT(S) IDENTIFIED AND DESCRIBED IN THAT CERTAIN MOTOR VEHICLE ACCESS EASEMENTS AND MAINTENANCE AGREEMENT RECORDED IN BOOK 4834, PAGE 63, ORANGE COUNTY REGISTRY ; AND (B) THE PEDESTRIAN ACCESS EASEMENT(S) IDENTIFIED AND DESCRIBED IN THAT CERTAIN PEDESTRIAN ACCESS EASEMENTS AND MAINTENANCE AGREEMENT RECORDED IN BOOK 4834, PAGE 46, ORANGE COUNTY REGISTRY ; PROVIDED, HOWEVER, THAT THE FOREGOING CONVEYANCE OF THE ABOVE-DESCRIBED LOT 1 IS MADE SUBJECT TO EACH OF THE EASEMENTS, COVENANTS, CONDITIONS AND OBLIGATIONS APPLICABLE TO THE ABOVE-DESCRIBED LOT 1 AND/OR THE OWNER OF THE ABOVE-DESCRIBED LOT 1 AS PROVIDED IN THE ABOVE-REFERENCED MOTOR VEHICLE ACCESS EASEMENTS AND MAINTENANCE AGREEMENT AND PEDESTRIAN ACCESS EASEMENTS AND MAINTENANCE AGREEMENT. PIN: 9875-05-2954 PARCEL TWO- CULBRETH MIDDLE SCHOOL: TRACT 1: BEGINNING AT A SMALL HICKORY AT THE INTERSECTION OF THE BOUNDARY LINES OF THE PROPERTY OF CLEVELAND ATWATER AND THE BENNETT HEIRS WITH THE PROPERTY OF E.G. MERRITT AND MRS. ALFRED BRANDON; RUNNING THENCE FROM SAID BEGINNING POINT ALONG AND WITH THE SOUTHERN PROPERTY LINE OF THE BENNETT HEIRS SOUTH 510 15' EAST 971.79 FEET TO AN IRON STAKE; RUNNING THENCE NORTH 240 20' EAST 364.4 FEET TO AN IRON STAKE, A NEW CORNER OF THE BENNETT 10 20 HEIRS; RUNNING THENCE NORTH 22' 40' WEST 738.68 FEET TO AN IRON STAKE, SAID STAKE BEING LOCATED IN THE SOUTHERN LINE OF A 60 FOOT RIGHT OF WAY FOR A PROPOSED ROAD BY THE STATE HIGHWAY COMMISSION A DISTANCE OF 2090 FEET ALONG THE SAID SOUTHERN RIGHT OF WAY LINE FROM THE INTERSECTION OF THE PITTSBORO AND FARRINGTON ROADS ; RUNNING THENCE ALONG THE SOUTHERN RIGHT OF WAY LINE OF SAID PROPOSED ROAD NORTH 760 08' WEST 563.27 FEET TO AN IRON STAKE, CORNER WITH H. D. BENNETT; RUNNING THENCE WITH THE LINE OF H. D. BENNETT AND CLEVELAND ATWATER THE FOLLOWING COURSES AND DISTANCES: SOUTH 21' 00' WEST 9.18 FEET, SOUTH 6° 30' EAST 13.2 FEET, SOUTH 60 30' EAST 99.0 FEET, SOUTH 360 30' EAST 41.6 FEET AND SOUTH 160 00' WEST 402.6 FEET TO A SMALL HICKORY, THE POINT AND PLACE OF BEGINNING, CONTAINING 13.336 ACRES, MORE OR LESS, AND BEING THE TRACT OF LAND DESIGNATED "BENNETT HEIRS" ON THE PLAT ENTITLED FINAL BOUNDARY SURVEY FOR CHAPEL HILL BOARD OF EDUCATION BY ENGINEERING SURVEY, INC., DATED 7-27-67 AND REVISED 1-6-68, TO WHICH PLAT REFERENCE IS HEREBY MADE FOR A MORE PARTICULAR DESCRIPTION. SEE DEED IN BOOK 214, PAGE 741, ORANGE COUNTY REGISTRY. TRACT 2: BEGINNING AT A STAKE LOCATED IN THE SOUTHERN RIGHT OF WAY LINE OF A 60 FOOT RIGHT OF WAY FOR A PROPOSED ROAD BY THE STATE HIGHWAY COMMISSION, SAID STAKE LYING IN THE WESTERN LINE OF THE BENNETT HEIRS LANDS; RUNNING THENCE ALONG THE LINE OF THE BENNETT HEIRS, SOUTH 210 00' WEST 9.18 FEET, SOUTH 6° 30' EAST 13.2 FEET, CORNER WITH CLEVELAND ATWATER ; RUNNING THENCE ALONG THE NORTHERN LINE OF ATWATER NORTH 670 30' WEST 143.16 FEET TO AN IRON STAKE LOCATED IN THE SOUTHERN RIGHT OF WAY LINE OF SAID PROPOSED ROAD; RUNNING THENCE ALONG WITH THE SOUTHERN RIGHT OF WAY LINE OF SAID PROPOSED ROAD SOUTH 760 08' EAST 137.83 FEET TO THE POINT AND PLACE OF BEGINNING, CONTAINING 0.033 ACRES, MORE OR LESS, AND BEING A SMALL TRIANGULAR SHAPED PARCEL OF LAND DESIGNATED "(H,D. BENNETT LAND)" ON PLAT ENTITLED FINAL BOUNDARY SURVEY FOR CHAPEL HILL BOARD OF EDUCATION BY ENGINEERING SURVEYS, INC. DATED 7-27-67, REVISED 1-6-68, TO WHICH SAID PLAT REFERENCE IS HEREBY MADE FOR A MORE PARTICULAR DESCRIPTION. SEE DEED IN BOOK 214, PAGE 743, ORANGE COUNTY REGISTRY. TRACT 3: BEGINNING AT A SMALL HICKORY AT THE INTERSECTION OF THE BOUNDARY LINES OF THE PROPERTY OF CLEVELAND ATWATER, THE BENNETT HEIRS, WITH THE PROPERTY OF E.G. MERRITT, AND MRS. ALFRED BRANDON; RUNNING THENCE FROM SAID BEGINNING POINT ALONG AND WITH THE SOUTHERN PROPERTY LINE OF THE BENNETT HEIRS SOUTH 510 15' EAST 971.79 FEET TO AN IRON STAKE; RUNNING THENCE A NEW LINE WITH E.G. MERRITT AND MRS. 11 21 ALFRED BRANDON SOUTH 240 20' WEST 185.6 FEET TO AN IRON STAKE, A NEW CORNER WITHE. G. MERRITT AND MRS. ALFRED BRANDON; RUNNING THENCE A NEW LINE NORTH 770 10' WEST 1200.0 FEET TO AN IRON STAKE AND NORTH 30 40' WEST 445.96 FEET TO AN IRON STAKE IN THE SOUTHERN PROPERTY LINE OF CLEVELAND ATWATER; RUNNING THENCE ALONG AND WITH SAID ATWATER'S SOUTHERN LINE NORTH 820 45' EAST 521.33 FEET TO A SMALL HICKORY, THE POINT AND PLACE OF BEGINNING, AND CONTAINING 13.024 ACRES, MORE OR LESS, AND BEING THAT PARCEL OF LAND DESIGNATED AS "E.G. MERRITT AND MRS. ALFRED BRANDON" AS SHOWN ON PLAT ENTITLED FINAL BOUNDARY SURVEY FOR CHAPEL HILL BOARD OF EDUCATION BY ENGINEERING SURVEYS, INC. DATED 7-27-67, REVISED 1-6-68, TO WHICH PLAT REFERENCE IS HEREBY MADE FOR A MORE PARTICULAR DESCRIPTION. SEE DEED IN BOOK 215, PAGE 128, ORANGE COUNTY REGISTRY. TRACT 4: BEGINNING AT A SMALL HICKORY AT THE INTERSECTION OF THE BOUNDARY LINES OF THE PROPERTY OF CLEVELAND ATWATER , BENNETT HEIRS AND MRS. ALFRED BRANDON AND E.G. MERRITT; RUNNING THENCE FROM BEGINNING POINT ALONG AND WITH THE NORTHERN PROPERTY LINE OF E.G. MERRITT AND MRS. ALFRED BRANDON SOUTH 820 45' WEST 521.33 FEET TO AN IRON STAKE, A NEW CORNER WITH ATWATER ; RUNNING THENCE A NEW LINE WITH ATWATER NORTH 30 40' WEST 768.66 FEET TO AN IRON STAKE LOCATED IN THE SOUTHERN RIGHT OF WAY LINE OF A 60 FOOT RIGHT OF WAY FOR A PROPOSED ROAD BY STATE HIGHWAY COMMISSION; RUNNING THENCE WITH THE SOUTHERN RIGHT OF WAY LINE OF SAID PROPOSED ROAD SOUTH 740 51' EAST 42.21 FEET TO A POINT AT THE BEGINNING OF A CURVE; RUNNING THENCE WITH THE SOUTHERN RIGHT OF WAY LINE AS THE SAME CURVES RIGHT IN A GENERAL SOUTHEASTERLY DIRECTION WITH A RADIUS OF 5760 FEET A DISTANCE OF 128.97 FEET TO AN IRON STAKE, CONTINUING WITH THE SOUTHERN RIGHT OF WAY LINE OF SAID PROPOSED ROAD SOUTH 760 08' EAST 353.67 FEET TO AN IRON. STAKE IN THE LINE OF H. D. BENNETT; RUNNING THENCE WITH THE LINE OF BENNETT SOUTH 670 30' EAST 143.16 FEET, CORNER OF ATWATER, H. D. BENNETT AND BENNETT HEIRS; RUNNING THENCE WITH THE LINE OF THE BENNETT HEIRS THE FOLLOWING COURSES AND DISTANCES: SOUTH 60 30' EAST 99.0 FEET, SOUTH 36° 30' EAST 41.6 FEET AND SOUTH 160 00' WEST 402.6 FEET TO A SMALL HICKORY, THE POINT AND PLACE OF BEGINNING AND CONTAINING 8.970 ACRES, MORE OR LESS, AND BEING THE TRACT OF LAND DESIGNATED "CLEVELAND ATWATER" ON PLAT ENTITLED FINAL BOUNDARY SURVEY FOR CHAPEL HILL BOARD OF EDUCATION BY ENGINEERING SURVEYS, INC. DATED 7- 27-67, REVISED 1-6-68, TO WHICH SAID PLAT REFERENCE IS HEREBY MADE FOR A MORE PARTICULAR DESCRIPTION. SEE DEED IN BOOK 215, PAGE 180, ORANGE COUNTY REGISTRY. PIN: 9777-99-9032 THIS PROPERTY IS TO REMAIN AS ONE PARCEL FOR TAX PURPOSES 12 22 PARCEL THREE-BLACKWOOD FARM PARK: BEING ALL OF THAT 151.22 ACRE TRACT OF LAND IDENTIFIED AS TRACT NO. 1 AND THE .44 ACRE TRACT OF LAND IDENTIFIED AS TRACT NO. 2 ON THE PLAT OF PROPERTY TITLED "FINAL PLAT BOUNDARY SURVEY FOR HERBERT N. BLACKWOOD HEIRS," PREPARED BY J. DAVID THOMPSON, PROFESSIONAL R.L.S., WHICH PLAT IS RECORDED AT PLAT BOOK 89, PAGE 138, ORANGE COUNTY REGISTRY. THE PROPERTY IS FURTHER IDENTIFIED AS ORANGE COUNTY P.I.N. 9872-55-7302, ORANGE COUNTY TAX MAP 7.9..2 AND PIN 9872-63-3300, ORANGE COUNTY TAX MAP 7. PIN: 9872-55-7302 PARCEL FOUR- WHITTED BUILDING: BEGINNING AT THE SOUTHEAST CORNER OF THE INTERSECTION OF QUEEN STREET AND HASELL STREET, FORMERLY NEW HAZEL STREET, SAID POINT BEING THE NORTHEAST CORNER OF RALPH C. NEIGHBOURS AND WIFE, MAE A NEIGHBOURS; THENCE EASTERLY WITH WEST QUEEN STREET APPROXIMATELY Y 416 FEET TO A POINT IN THE NORTHWEST CORNER OF ANNIE CAMERON; THENCE SOUTH WITH ANNIE CAMERON APPROXIMATELY 291 FEET TO A POINT IN THE SOUTHWEST CORNER OF ANNIE CAMERON; THENCE EAST WITH ANNIE CAMERON APPROXIMATELY 106.5 FEET TO A POINT, BEING THE NORTHWEST CORNER OF FLORA RAY MILLER; THENCE SOUTH WITH FLORA RAY MILLER'S WEST LINE APPROXIMATELY 293 FEET TO A POINT ON THE NORTHERN LINE OF WEST TRYON STREET; THENCE WEST WITH WEST TRYON STREET APPROXIMATELY 488 FEET TO AN IRON STAKE,THE NORTHEAST CORNER OF THE INTERSECTION OF WEST TRYON STREET AND HASELL STREET; THENCE NORTH WITH HASELL STREET 532 FEET TO THE POINT AND PLACE OF BEGINNING. PIN: 9864-87-8123 PARCEL FIVE- ORANGE MIDDLE SCHOOL BEING all that certain tract or parcel of land containing 11.918 acres more or less and identified as Tract 2 on the plat of survey entitled "Exempt Division Survey Property of Orange County Board of Education for the Redevelopment of C.W. Stanford Middle School" by Riley Surveying, P.A., which plat is recorded in Plat Book 107, Page 137, of the Orange County Registry and to which plat reference is hereby made for a more particular description of same. 308 Orange High School Road, Hillsborough, NC 27278 Orange County PIN: 9875-21-0552 13 23 PARCEL SIX-HILLSBOROUGH ELEMENTARY- Tracts 1 through 10 BEING all of that property containing 9.39 acres, more or less, having Orange County, North Carolina PIN Number: 9864-78-3471 and being more further described by those legal descriptions of Parcels 1 through 10 included below. This property is to remain as one tract. Tractl: BEGINNING at a stake in the Northeast intersection of Union and Nash Streets in the Town of Hillsborough and running thence in an Easterly direction with the Northern line of Union Street approximately 5 chains to a stake; thence North 4 chains to a stake in the South property line of Orange Street; thence West with Orange Street 5 chains to a stake the Southeast intersection of Orange and Nash Streets; thence with Nash Street South 4 chains to the first station, the same being Lot Numbers 248 and 249 in the plan of the Town of Hillsborough, N.C. and acquired by the Board of Education of Orange County by that Deed recorded in Book 104, Page 37, Orange County Registry. Tract 2: BEGINNING at a stake in the Northwest intersection of Occoneechee Street and Union Street in the Town of Hillsborough, N.A. and running thence North with Occoneechee Street 4 chains to a stake, the intersection of Occoneechee and Orange Streets; thence with the South line of Orange Street West 5 chains to a stake; thence South 4 chains to Union Street; thence East with Union Street 5 chains to the first station, same being known and designated as Lot Numbers 250 and 251 in the plan of the Town of Hillsborough, N.C. and acquired by the Board of Education of Orange County by that Deed recorded in Book 104, Page 36, Orange County Registry. Tract 3: Lying and being situate in the Town of Hillsboro. BEGINNING at a stake in the East property line of Nash Street, the Southwest corner of Lot No., 257 in the Plan of the Town of Hillsboro, and running thence East 660 feet to a stake in the West property line of Occoneechee Street; thence South 66 feet to a stake; thence West 660 feet to a stake; thence North 66 feet to the place or point of BEGINNING. It being that part of the property known as Orange Street which lies between Nash and Occoneechee Streets. Reference is hereby made to the map of the survey made by J. Ralph Weaver, Registered Surveyor, September 28, 1949. Subject to the restrictions as outlined in Book 134, Page 222, Orange County Registry. Acquired by the Board of Education of Orange County by that Deed recorded in Book 134, Page 222, Orange County Registry. Tract 4: Lying and being situate on the North side of Orange Street and on the East side of Nash Street in the Town of Hillsborough, BEGINNING at a stake in the North property line of Orange Street, the Northeast intersection of said Orange Street with Nash Street and running thence along the East property line of Nash Street North 92 feet to a stake, corner with Moss Turner; thence with Turner's line East 144 feet to a stake; thence South 92 feet to a stake in the North property line of 14 24 Orange Street; thence with the North property line of Orange Street West 144 feet to the place or point of BEGINNING. Acquired by the Board of Education of Orange County by that Deed recorded in Book 134, Page 124, Orange County Registry. Tract 5: Lying and being situate on the East side of Nash Street in the Town of Hillsborough. BEGINNING at a stake in the East property line of Nash Street, the Northwest corner of lot conveyed to the Board of Education of Orange County by Irene T. Cardwell, and running thence North with the East property line of Nash Street 134 feet to an iron stake, Turner's corner; thence with Turner's line East 165 feet to an iron stake, the Northwest corner of Lot No. 258; thence with the line of Lot No. 258 South 226 feet to a stake in the North property line of Orange Street; thence with the line of said Orange Street West 21 feet to a stake, corner with Irene T. Cardwell lot; thence North 92 feet to a stake; thence West 144 feet to the place or point of BEGINNING. This property being a part of Lot No. 257 in the Plan of the Town of Hillsborough. For further reference see map of the survey made by J. Ralph Weaver, Registered Surveyor, September 28, 1949. Acquired by the Board of Education of Orange County by that Deed recorded in Book 134, Page 169, Orange County Registry. Tract 6: Lying and being situate in the Town of Hillsboro. BEGINNING at a stake in the North property line of Orange Street, the Southwest corner of Lot 259 in the Plan of the Town of Hillsborough and running thence with the North property line of Orange Street West 165 feet to a stake; thence North 226 feet to a stake; thence East 165 feet to a stake; thence South 226 feet to the point and place of BEGINNING. It being Lot No. 258 on the Plan of the Town of Hillsborough. Acquired by the Board of Education of Orange County by that Deed recorded in Book 134, Page 224, Orange County Registry. Tract 7: Lying and being situate in the Town of Hillsborough. BEGINNING at a stake in the North property line of Orange Street, the Southeast corner of Lot No. 258 in the Plan of the Town of Hillsborough and running thence with the line of Lot No. 258 North 226 feet to a stake; thence East 330 feet to a stake in the West property line of Occoneechee Street; thence with the West property line of said Occoneechee Street South 226 feet to a stake in the North property line of Orange Street; thence with the said North property line of Orange Street West 330 feet to the point or place of BEGINNING. It being Lot Numbers 259 and 260 in the Plan of the Town of Hillsborough and according to the map of the survey made by J. Ralph Weaver, Registered Surveyor, September 28, 1949. Acquired by the Board of Education of Orange County by that Deed recorded in Book 134, Page 223, Orange County Registry. Tract 8: BEGINNING at a stake on Nash Street at the Northeast corner of Colored High School property, and running North with Nash Street 95 feet to a stake, corner of Lot No. 1; thence with Lot No. 1 West approximately 336 feet to a stake; thence South 95 feet to a stake, Northwest corner of School property; thence East approximately 336 feet to the place or point of BEGINNING. 15 25 Acquired by the Board of Education of Orange County by that Deed recorded in Book 130, Page 53, Orange County Registry. Tract 9: BEGINNING at a stake at the Southeast corner of Lot No. 287 as shown on the Map or Plan of the Town of Hillsborough and the Northeast corner of the Hillsborough Central High School Property in the West property line of Occoneechee Street; running thence along and with the North line of the said Central High School Property North 87' 30' West 165 feet to a stake; the Southeast corner of Samuel Green and wife, Mable Green Lot (formerly Dewey Thompson); thence with the East line of the said Samuel Green Lot North 2° 30' East 100 feet to a stake; thence East with Dora Roberta Latta's new South line South 87' 30' East 165 feet to a stake in the West property line of Occoneechee Street; thence with the West property line of Occoneechee Street South 2° 30' West 100 feet to an iron stake, the place or point of BEGINNING, and being the Southern part of Lot 287 in the plan of the Town of Hillsborough. Acquired by the Board of Education of Orange County by that Deed recorded in Book 160, Page 486, Orange County Registry. Tract 10: BEGINNING at the Southeast corner of the Ross Turner lot in the North line of the property of the Board of Education of Orange County known as the Hillsborough Central High School Property; running thence along the East line of the said Ross Turner lot North 2° 30' East 100 feet to a stake in the James Thompson South line; thence with the James Thompson new South line South 87' 30' East 150 feet to a stake in the West line of the property of Samuel Green and wife, Mable Green (formerly Dewey Thompson property); thence with the West line of said Samuel Green lot South 2° 30' West 100 feet to a stake in the North line of Central High School property; thence along and with the North line of said High School property North 87' 30' West 150 feet to a stake, the place or point of BEGINNING. Acquired by the Board of Education of Orange County by that Deed recorded in Book 160, Page 487, Orange County Registry. Parcels 1-10: 402 N. Nash Street and 500 N. Nash Street, Building 5, Hillsborough,NC 27278 PARCEL SEVEN-NEW HOPE ELEMENTARY BEING all of those certain tracts identified as "Lot-A", containing 7.21 acres, more or less, "Lot -B", containing 19.95 acres more or less, and "Lot-F", containing 1.38 acres, more or less with all three lots together containing a total of 28.54 acres as shown on that plat entitled "Recombination of Property Surveyed for Orange County Board of Education" by Alois Callemyn Land Surveyor dated as of July 9,1987 and recorded in Plat Book 52, Page 51, Orange County Registry. 1900 New Hope Church Road, Chapel Hill,NC 27514 Orange County PIN: 9872-75-5904 16 26 PARCEL EIGHT-PATHWAYS ELEMENTARY BEING all of that parcel containing 18.13 acres, more or less, identified as "Lot A" on that plat entitled "Property Surveyed for Orange County Board of Education" by Callemyn Parker Inc. dated as of December 18, 1998, and recorded in Book 83, Page 85, Orange County Registry. 431 Strouds Creek Road, Hillsborough,NC 27278 Orange County PIN: 9865-99-3002 PARCEL NINE- ORANGE HIGH SCHOOL BEING all of that parcel containing 17.48 acres, more or less, labeled as Tract 2 on that plat entitled"Orange High School Exempt Division Survey Property of County of Orange"by Riley Surveying, P.A. dated as of June 26, 2014, and recorded in Book 113, Page 24, Orange County Registry. 500 Orange High School Road, Hillsborough,NC 27278 Orange County PIN: 9875-12-5819 PARCEL TEN-EPHESUS ELEMENTARY SCHOOL - Tracts 1 and 2 Tract 1: All of that certain tract or parcel of land, together with all improvements thereon and more particularly described as BEGINNING at a point in the Northern right of way line of Ephesus Church Road, which point is located South 89' 37' West 700.75 feet as measured along the Northern right of way line of Ephesus Church Road from an N.C. State Highway Monument located in the Northern right of way line of said road, said monument being also located 60 feet, more or less, northwardly from the intersection of the southern right of way of Ephesus Church Road and the Eastern right of way line of Long Leaf Drive of Ridgefield Subdivision: (said beginning point may also be located as being approximately 60 feet northwardly from a point near the center line of Churchill Drive where the same intersects the South line of the Ephesus Church Road); running thence from said beginning point, North 3° 19' East 878.51 feet, more or less, to a point in the northern property line of the Ferrell property (which point is located North 84' 49' West 659 feet as measured along said northern property line from an old iron control corner located in the western line of the Colony Wood Subdivision, Section II); running thence along the northern line of the Ferrell property, North 84' 49' West 521.45 feet to a corner marked by an old iron; thence South 64' 27' West 279.49 feet to a corner marked by an old iron; thence South 5° 13' East 486.43 feet to a stake; thence South 13' 51' West 60 feet to a corner marked by an old iron; thence South 88' 09' East 192.33 feet to another corner marked by an old iron; thence South 2° 34' West 204.50 feet to a stake in the Northern right of way one of Ephesus Church Road; thence along the Northern right of way line of Ephesus Church Road, 17 27 South 84' 10' East 498.21 feet and North 89' 37' East 12.12 feet to the point of BEGINNING containing 13.36 acres, more or less. LESS AND EXCEPT: BEGINNING at an iron stake in the center of the Old Rocky Ridge Road in the southern line of the J.H. McFarland land, and running thence North 68' 15' East 280 feet to an iron stake; thence South 4° 15' West 660 feet to an iron stake; thence North 86' 30' West 193 feet along the northern line of the John McFarland property to an iron stake; thence North 15' 30' East 60 feet to an iron take in the center of said Old Road; and thence North 4° 10' West 486 feet along the center of said Old Road to the place of BEGINNING, containing 3 acres, more or less, the same being Tract No. 1 according to the map of the property of Lillian G. Lloyd and others by Robert A. Jones, Registered Surveyor, dated November 12, 1957, recorded in the Office of the Register of Deeds of Durham County in Plat Book 34, Page 73, to which reference is hereby made for a more particular description of same. 1495 Ephesus Church Road, Chapel Hill,NC 27517 Orange County PIN: 9799-54-1734 Tract 2: BEGINNING at an iron stake in the center of the Old Rocky Ridge Road in the southern line of the J.H. McFarland land, and running thence North 68' 15' East 280 feet to an iron stake; thence South 4° 15' West 660 feet to an iron stake; thence North 86' 30' West 193 feet along the northern line of the John McFarland property to an iron stake; thence North 15' 30' East 60 feet to an iron take in the center of said Old Road; and thence North 4° 10' West 486 feet along the center of said Old Road to the place of BEGINNING, containing 3 acres, more or less, the same being Tract No. 1 according to the map of the property of Lillian G. Lloyd and others by Robert A. Jones, Registered Surveyor, dated November 12, 1957, recorded in the Office of the Register of Deeds of Durham County in Plat Book 34, Page 73, to which reference is hereby made for a more particular description of same. Orange County PIN: 9799-44-8776 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, 2021, and recorded at RB 6730, Page 209, Orange County Registry, as previously supplemented (referred to as the "Existing Deed of Trust" in this instrument, and further defined above). All references to books and pages in the lists below are to the Orange County Registry. is 28 THE FOLLOWING EXCEPTIONS APPLY TO PARCEL ONE- ORANGE COUNTY LIBRARY: 1. Matters shown on plats recorded in Plat Book 101, Pages 82 and 95; Plat Book 102, Pages 52, 53 and 54; Plat Book 103, Pages 20, 21 and 197; Plat Book 105, Page 117; and Plat Book 105, Pages 157, 158 and159. 2. Public Utility Acceptance by the Town of Hillsborough recorded in Book 4485, Page 260, and Book 4801,Page 251, and Town of Hillsborough abandonment of Public Water Easement recorded in Book 4801, Page 252. 3. Motor Vehicle Access Easements and Maintenance Agreement recorded in Book 4834, Page 63. 4. Pedestrian Access Easements and Maintenance Agreement recorded in Book 4834, Page 46. 5. Matters shown on plat recorded Plat Book 107 at Page 117 including their right of way of West Margaret Lane; Private Storm Sewer Easement and Public Water Easement located on the Land. 6. Title to that portion of Land within the right-of-way of W. Margaret Lane. 7. Right of Way Easement to the Town of Hillsborough for sanitary sewer outfall line recorded in Book 253, Page 613. THE FOLLOWING EXCEPTIONS APPLY TO PARCEL TWO- CULBRETH MIDDLE SCHOOL: 8. Annexation bythe Town of Chapel Hill as recorded in Book 1376, Page 515. 9. Easement between Chapel Hill-Carrboro City Board of Education and Southern Village Limited Partnership recorded in Book 1702, Page 520. 10. Terms and conditions of Lease as evidenced by Memorandum of Lease Agreement with GTE Mobilnet of Raleigh Incorporated as recorded in Book 1849, Page 546, along with the Easement Agreement as recorded in Book 1849, Page 554 and Assignment and Assumption Agreement to Crown Castle GT Company LLC as recorded in Book 2445, Page 417; further affected by Assignment Agreement recorded in Book 6550, Page 558; Memorandum of First Amendment to Light Standard Lease Agreement recorded in Book 6550, Page 585 and First Amendment to Easement Agreement recorded in Book 6551, Page 17. 11. Terms and conditions of Lease as evidenced by Memorandum and Amendment of Lease with BellSouth Carolinas PCS, L.P. as recorded in Book 1861, Page 586; along with the Site Designation Supplement and Memorandum of Sublease with Crown Castle South, Inc. as recorded in Book 2301, Page 384; further affected 19 29 by Assignment Agreement recorded in Book 6550, Page 558 and Memorandum of Second Amendment to Option and Lease Agreement recorded in Book 6550, Page 570. 12. Sewer Easement recorded in Book 219, Page 412. 13. Terms and conditions of Lease by and between Orange County, North Carolina and The Board of Education for The Chapel Hill - Carrboro City Schools dated January 1, 2014 and recorded January 15,2014 and recorded in Book 5743 at Page 518. 14. Right of way to Duke Energy Carolinas, LLC recorded in Book 5800 at Page 481. 15. Matters shown on recorded Plat Book 114 at Page 76. 16. Culbreth Middle School Stormwater Easement to the Town of Chapel Hill recorded in Book 5932 at Page94. 17. Stormwater Operations and Maintenance Plan for Culbreth Middle School Science Wing Expansionrecorded in Book 5932, Page 97. THE FOLLOWING EXCEPTION APPLIES TO PARCEL THREE- BLACKWOOD FARM PARK: 18. Matters shown on plat recorded Plat Book 89, Page 138. 19. Terms and conditions of Right of Way Agreement between Orange County and Piedmont Electrical Membership Corporation recorded in Book 6795, Page 585. THE FOLLOWING EXCEPTION APPLIES TO PARCEL FOUR- WHITTED BUILDING: 20. Terms and conditions of Encroachment Agreement for a Structure Other than a Sign between OrangeCounty and the Town of Hillsborough recorded in Book 6703, Page 623. THE FOLLOWING EXCEPTION APPLIES TO PARCELS FIVE THROUGH TEN 21. All encumbrances existing at the time of the recording of this Deed of Trust. 20 30 Attachment 3 s*h draft of May 6 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 [$13,000,000] Limited Obligation Bonds Series 2024 31 Attachment 3 THIS SECOND SUPPLEMENTAL TRUST AGREEMENT is dated as of June 1, 2024 (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 [$13,000,000] Limited Obligation Bonds, Series 2024 (the "2024 Bonds"). Introduction The County and the Trustee executed and delivered a Trust Agreement dated as of June 1, 2021 (the "2021 Agreement"). The 2021 Agreement provides for the issuance of a 2021 series of limited obligation bonds (the "2021 Bonds"), and allows for the issuance of additional series of limited obligation bonds from time to time. The 2021 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 provide for the issuance of the 2024 Bonds as additional bonds under the 2021 Agreement. The County is issuing the 2024 Bonds to provide funds to be used, together with other available funds, on a project (the "2024 Project") to acquire, construct, equip and otherwise improve a variety of County facilities and assets, including those described in Exhibit A, and to pay financing costs and other related costs. Each of the 2024 Bonds represents an "installment contract" within the meaning of Section 160A-20 of the North Carolina General Statutes ("Section 160A- 20"), 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. NOW, THEREFORE, in consideration of the covenants contained in this Supplemental Agreement, the parties agree as follows: 32 ARTICLE I THE 2024 BONDS Section 1.01. Provision for 2021 Bonds; Advance. (a) The County will issue, and the Trustee will authenticate and deliver, 2021 Bonds in an aggregate principal amount of[$13,000,000], consisting of two separate series as follows: * $ Limited Obligation Bonds, Series 2021A (the "Series A Bonds"); and * $ Taxable Limited Obligation Bonds, Series 2021B (the "Series B Bonds"). (b) The County is receiving a total of $ (the "Amount Advanced") from the sale of the 2021 Bonds. The County will use the Amount Advanced as provided in this Supplemental Agreement to pay Project Costs. Section 1.02. Bonds Constitute Installment Contracts. Each of the 2024 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 Prior Agreement; 2024 Bonds Are Additional Bonds. (a) This Supplemental Agreement is a "supplemental agreement" for the issuance of Additional Bonds as provided in the Prior Agreement, and the 2024 Bonds are "Additional Bonds" as defined in the Prior Agreement. (b) Except as modified by this Supplemental Agreement, all terms of the Prior Agreement remain in effect and apply with respect to the 2024 Bonds to the same extent as to all Prior Bonds. 3 33 Section 1.04. Form and Details; Payments. The Series A Bonds will be numbered RA-1 upward for identification, will be designated "Limited Obligation Bonds, Series 2024A," and will be in substantially the form of Exhibit C, with any changes as this Supplemental Agreement permits or requires. The Series B Bonds will be numbered RB-1 upward for identification, will be designated "Taxable Limited Obligation Bonds, Series 2024B," and will be in substantially the same form as the Series A Bonds. The 2024 Bonds will be issued as fully registered bonds payable as to interest semiannually until payment on each Payment Date at the following rates (calculated based on a 360-day year consisting of twelve 30-day months), and payable as to principal on October 1 in the following years and amounts: Series A Bonds Installment Date Principal Installment Date Principal (October 11 Amount f$1 (October ij Amount ($1 [To come Series B Bonds Installment Date Principal Installment Date Principal (October 1) Amount ($1 (October Amount ($1 To come (d) Exhibit D shows a schedule of payments due on the 2024 Bonds with respect to each Payment Date. Upon any redemption of any 2024 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. The Trustee has no responsibility to confirm any recalculated payment schedule. (e) The County shall pay or cause to be paid, when due, the principal of (whether at maturity, by acceleration, by mandatory redemption as provided in Section 2.05 or otherwise), and interest on the 2024 Bonds at the places, on the dates, and in the manner provided in this Supplemental Agreement, in the 2024 4 34 Bonds, and in the documentation securing the 2024 Bonds, all according to their true intent and meaning, subject to the provisions described n Section 1.07. Section 1.05. Redemption Dates and Prices. The 2024 Bonds are subject to redemption as described in Section 2.01. Section 1.06. Delivery of 2024 Bonds. The Trustee will authenticate and deliver the 2024 Bonds when it has received the following items: (a) Certified copies of County Board resolutions (i) approving the terms and conditions under which the 2024 Bonds are to be executed and delivered and (ii) authorizing the execution, delivery and issuance of the 2024 Bonds, this Supplemental Agreement, and Deed of Trust Supplement #2 (as identified in Exhibit B) (b) Evidence that the LGC has approved the issuance of the 2024 Bonds (c) An executed copy of this Supplemental Agreement and a certified copy of the 2021 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 2024 Bonds, as contemplated by Section 1.06(iv) of the Prior Agreement (e) An Opinion of Bond Counsel to the effect that the execution and delivery of the 2024 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 to authenticate and then deliver the 2024 Bonds to the person or persons named therein upon payment to the Trustee of a specified sum (g) A County Certificate directing the Trustee as to the application of the proceeds from the sale of the 2024 Bonds (h) 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 5 35 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 2024 Bonds, and including the instrument referenced in (d) above as an insured instrument Section 1.07. Limited Obligation. The 2024 Bonds are limited obligations of the County, as provided and described in Section 4.05 of the 2021 Agreement. ARTICLE II REDEMPTION Section 2.01. Redemption Dates and Prices. The 2024 Bonds are subject to redemption only as provided in this Section. (a) Optional Redemption of Series A Bonds - The Series A Bonds maturing on or after October 1, are subject to redemption at the County's option, in whole or in part on any date on or after October 1, . upon payment of the principal amount to be redeemed plus interest accrued to the redemption date, without any prepayment penalty or premium. (b) Mandatory Sinking Fund Redemption of Series A Bonds -- The Series A Bonds maturing on October 1, and October 1, are required to be redeemed in part prior to maturity pursuant to the terms of the sinking fund requirements of Section 2.05 at a redemption price equal to the principal amount to be redeemed plus interest accrued to the redemption date, without any prepayment penalty or premium. (c) No Redemption of Series B Bonds. The Series B Bonds are not subject to redemption prior to their stated maturity dates. Section 2.02. Selection of Series A Bonds for Redemption. (a) If less than all the Series A Bonds are to be redeemed pursuant to the provisions of subsection 2.01(a), they will be redeemed among maturities in any manner the County chooses. (b) If less than all of the Series A Bonds of any maturity are to be redeemed, the Trustee must select the Series A Bonds to be redeemed by lot; 6 36 provided, however, that so long as a book-entry system with DTC is used for determining beneficial ownership of Series A Bonds to be redeemed, if less than all of the Series A Bonds within a maturity are to be redeemed, the parties agree that DTC may determine which of the Series A 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 Series A Bond to be redeemed must be in the principal amount of $5,000 or some integral multiple thereof, and (ii) in selecting Series A Bonds for redemption, each Series A Bond will be considered as representing that number of Series A Bonds which is obtained by dividing the principal amount of that Series A Bond by $5,000. If a portion of a Series A Bond is called for redemption, the County will prepare, and the Trustee will deliver, a new Series A Bond of the same series in principal amount equal to the unpaid portion to the registered owner upon the surrender of the Series A 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) With respect to any Series A Bonds being called for redemption for which DTC or its nominee is the registered owner, to DTC, in whatever manner may be provided for under DTC's standard operating rules as then in effect (and if the Trustee is unable to determine those rules, by registered or certified mail, return receipt requested); (ii) With respect to any Series A Bonds for which no book-entry-only system of registration is in effect, to each of the registered owners of those Series A 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. Notwithstanding anything to the contrary in this Supplemental Agreement, the County 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. 7 37 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 Series A 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 Series A 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, except a notice given in respect of a mandatory sinking fund redemption, 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 premium, if any, and interest on the Series A Bonds to be prepaid; or (ii) any other condition not unacceptable to the Trustee. If a notice contains a condition and the Trustee either (A) does not receive moneys sufficient to pay the principal of and premium, if any, and interest on the Series A Bonds on or prior to the redemption date, or (B) the stated condition is not fulfilled, as evidenced to the Trustee by a County Certificate, 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 Series A Bonds to be redeemed, including the Series designation, (ii) the CUSIP numbers of the Series A Bonds to be redeemed, (iii) the dated dates, maturity dates and interest rates of the Series A 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 Series A Bonds or portions of Bonds to be 8 38 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 Series A 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. Series A 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 Series A Bonds called for redemption, the Series A Bonds (or portions of Series A Bonds) called for redemption cease to accrue interest from and after the redemption date. Thereafter, those Series A Bonds (a) are no longer entitled to the benefits provided by this Agreement and (b) are not deemed to be Outstanding under this Agreement. Section 2.05. Mandatory Sinking Fund Redemption of Series A Bonds. (a) The Trustee, from amounts received from or on behalf of the County, will redeem Series A Bonds maturing on October 1, on October 1 in years and amounts upon payment of 100% of the principal amount thereof plus interest accrued to the redemption date, as follows: Year Amount f$1 To come *Final maturity (b) In addition, the Trustee, from amounts received from or on behalf of the County, will redeem Series A Bonds maturing on October 1, on October 1 in years and amounts upon payment of 100% of the principal amount thereof plus interest accrued to the redemption date, as follows: Year Amount ($1 To come 9 39 *Final maturity The Trustee shall take all appropriate action to withdraw funds from the Principal Account and make timely payment to the Owners of the Term Bonds subject to sinking fund redemption. (c) Notwithstanding the foregoing, on or before the 70th day next preceding any sinking fund payment date, the County may do either of the following: (i) deliver to the Trustee for cancellation Term Bonds required to be redeemed on that sinking fund payment date in any aggregate principal amount desired; or (ii) instruct the Trustee to apply a credit against the County's sinking fund payment obligation for any Term Bonds that previously have been redeemed (other than through the operation of the sinking fund requirements) and canceled by the Trustee but not previously applied as a credit against any sinking fund payment obligation. The Trustee will credit against the County's sinking fund payment obligation on each sinking fund payment date the amount of Series A Bonds so purchased, delivered or previously redeemed as described in paragraphs (i) or (ii) above. (d) Within seven days of receipt of the funds, Term Bonds or instruction to apply a credit (as described in subsection (b) above), any amounts remaining in the Principal Account in excess of the amount required to fulfill the remaining required principal and sinking fund redemption obligations on the next sinking fund payment date will, as specified in a County Certificate, either be (i) transferred to the Interest Account or (ii) used to redeem Series A Bonds as soon as practicable. In the absence of any written direction from the County, the Trustee will deposit those amounts to the Interest Account. ARTICLE III DEPOSIT AND USE OF 2024 PROCEEDS; OTHER FUNDS 10 40 Section 3.01. Creation and Use of 2024 Project Fund. The Trustee will establish a special fund designated as the "Orange County 2024 Project Fund." The Trustee will keep this Fund separate and apart from all other funds and moneys held by it, and the Trustee will hold and administer this Fund as provided in this Agreement. Moneys in the 2024 Project Fund will be expended only as described in Sections 3.02 and 3.03. The Trustee is not required to disburse any moneys from the 2024 Project Fund during the continuation of any Event of Default. Section 3.02. Deposits to 2024 Project Fund; Payment of 2024 Project Costs. (a) The Trustee will deposit into the 2024 Project Fund the amount specified in the certificate referenced in Section 1.06(g) and all other amounts paid to it for deposit in the 2024 Project Fund. The certificate referenced in Section 1.06(g) may also direct the Trustee as to the further application of amounts in the 2024 Project Fund without any requirement for additional direction or requisition. (b) In addition, the Trustee will disburse moneys in the 2024 Project Fund from time to time, either (i) to pay 2024 Project Costs directly to the County, or (ii) to pay the person indicated in the requisition to pay 2024 Project Costs, or (iii) to reimburse the County for previous expenditures on 2024 Project Costs, upon the Trustee's receipt of a requisition substantially in the form of Exhibit E. The County need not submit any additional information other than the requisition. 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 2024 Project Fund that are due to the County by wire transfer to any bank account in the United States as a County Certificate may designate from time to time. Any electronic notice to the Trustee is subject to the provisions of Section 9.02 of the 2021 Agreement. Section 3.03. Transfer of Unexpended Proceeds. When the County determines there are no more 2024 Project Costs to be paid from the 2024 Project Fund, the County will send a County Certificate to that effect to the Trustee. The Trustee will then withdraw all remaining moneys in the 2024 Project Fund and deposit those moneys in a separate account within the Payment Fund. The Trustee will then apply those moneys to Bond payments as directed by a County 11 41 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 2024 Bonds as the same becomes due. Section 3.04. Creation of Accounts in Payment Fund. (a) The Trustee shall establish, in the 2021 Bond Payment Fund established under the 2021 Agreement, three special accounts to be designated as the "2024 Interest Account," the "2024 Principal Account" and the "2024 Redemption Account." The Trustee shall keep these accounts separate and apart from all other funds and moneys held by it, and must hold and administer the same as provided below. The Trustee must deposit in the proper account in the Payment Fund all amounts paid to it for deposit in the Payment Fund, including all amounts paid to it by the County for payments on Bonds. (b) Not less than 1S days prior to each Payment Date for the 2024 Bonds, the Trustee must determine the amounts on deposit and available to make the payments due on that Payment Date with respect to the 2024 Bonds, whether in (i) the 2024 Interest Account or the 2024 Principal Account of the Payment Fund, or (ii) any special trust fund established pursuant to Section 11.01 of the 2021 Agreement. The Trustee must notify the County of the available amounts not less than 10 days prior to the applicable Payment Date. The County's obligation to make payments with respect to any Payment Date is reduced by the available amounts the Trustee determines. (c) The Trustee must pay the principal of the 2024 Bonds from the 2024 Principal Account and the interest on the 2024 Bonds from the 2024 Interest Account, as the same become due. On or before each Payment Date, the Trustee must first determine if it has on hand amounts sufficient to pay the principal and interest coming due on the Bonds on the Payment Date. Then, the Trustee must set aside an amount sufficient to pay the interest on the Bonds becoming due and payable on that Payment Date, and then an amount sufficient to pay the principal on the Bonds becoming due and payable on that Payment Date. The Trustee must then transfer on the Payment Date the amounts due to the registered owner of the Bonds. (d) If the amount on deposit in the 2024 Principal Account or the 2024 Interest Account is insufficient for its purposes two Business Days before any Payment Date, the Trustee must notify the County of the amount of the insufficiency. 12 42 The Trustee must then transfer the required amounts to those Accounts from any amounts as may be available in the 2024 Redemption Account. If the amount on deposit in the 2024 Interest Account on any Payment Date exceeds the amount payable on account of interest on the 2024 Bonds on that date, the Trustee must, as directed by a County Certificate, retain the excess in the 2024 Interest Account or transfer the excess to the 2024 Principal Account to be credited against subsequent required deposits to the 2024 Principal Account. In the absence of any direction from the County, the Trustee will retain the excess in the 2024 Interest Account. If the amount on deposit in the 2024 Principal Account on any October 1 exceeds the amount required on that date to pay principal of 2024 Bonds coming due on that date, then the Trustee must, as directed by a County Certificate, retain the excess in the 2024 Principal Account or transfer the excess to the 2024 Interest Account to be credited against subsequent required deposits to the 2024 Interest Account. In the absence of any direction from the County, the Trustee will transfer the excess to the 2024 Interest Account. (e) The Trustee must deposit in the 2024 Redemption Account all amounts paid to it for deposit in that Account, and must use those amounts within 12 months of their deposit to pay 2024 Bonds called for redemption on their redemption dates. The Trustee must transfer any amounts not so used within 12 months of their deposit in the 2024 Redemption Account to the 2024 Interest Account for use on the next Payment Date to pay interest on the 2024 Bonds, and pending that use or in the absence of direction must invest those funds in Legal Investments identified in Section 3.06(b). Subject to retaining moneys necessary to pay 2024 Bonds that have been called for redemption but not yet presented for payment, the Trustee must use amounts in the 2024 Redemption Account as directed by a County Certificate to make transfers to the 2024 Interest Account or the 2024 Principal Account to the extent the balances in those Accounts may be insufficient. (f) The Trustee must apply Net Proceeds deposited in the Redemption Account pursuant to Section 5.16 of the 2021 Agreement to the redemption of Bonds pursuant to the Trust Agreement as directed by a County Representative. 13 43 Section 3.OS. Use of Net Proceeds Fund from Prior Agreement. The Trustee is to maintain and administer the Net Proceeds Fund established under the Prior Agreement to the same effect and purpose as provided in the Prior Agreement with respect to the 2024 Bonds as to all Prior Bonds generally. Section 3.06. Restricted Yield Investment. Not later than June 1, 2027, the County shall (a) invest any "Covered Proceeds," as defined below, that the County holds, and (b) direct the Trustee to invest any Covered Proceeds the Trustee holds, in either (i) Legal Investments providing a fixed yield at or below the "Restricted Yield," as defined below, (ii) obligations described in Code Section 103 that are not "private activity bonds" within the meaning of Code Section 141, or (iii) any other approved by a written opinion of Bond Counsel that is satisfactory to the Trustee; in any case the County may specify from time to time. It is the County's responsibility, and not the Trustee's, to identify and maintain investments as required by this Section. The "Covered Proceeds" are any amounts on deposit in any Fund or Account under the Trust Agreement that represent proceeds of the 2024 Bonds, including proceeds from the investment of the 2024 Bond proceeds or proceeds from the sale or other disposition of property acquired or improved through the proceeds of the 2024 Bonds (including insurance proceeds). 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 the "yield" on the 2024 Bonds, which is approximately equal to %. ARTICLE V COUNTY'S UNDERTAKING FOR CONTINUING DISCLOSURE. The County undertakes, for the benefit of the beneficial owners of the 2024 Bonds, to provide the following items and information to the MSRB: 14 44 (a) by not later than seven months from the end of each of the County's Fiscal Years, beginning with the Fiscal Year that ends June 30, 2024, audited County financial statements for such fiscal year, if available, prepared in accordance with Section 159-34 of the General Statutes of North Carolina, as it may be amended from time to time, or any successor statute, or, if such audited financial statements are not available by seven months from the end of any fiscal year, unaudited County financial statements for such fiscal year, to be replaced subsequently by audited County financial statements to be delivered within 15 days after such audited financial statements become available for distribution; (b) by not later than seven months from the end of each of the County's Fiscal Years, beginning with the Fiscal Year that ends June 30, 2024, the financial and statistical data as of a date not earlier than the end of the preceding fiscal year (which data will be prepared at least annually, will specify the date as to which such information was prepared and will be delivered with any subsequent material events notices specified in subparagraph (c) below) for the type of information included in Appendix A to the final Official Statement relating to the 2024 Bonds under the captions "THE COUNTY - DEBT INFORMATION" and "—TAX INFORMATION" (excluding any information on overlapping or underlying debt) to the extent such items are not included in the audited financial statements referred to in (a) above; (c) in a timely manner, not in excess of ten business days after the occurrence of the event, notice of any of the following events with respect to the 2024 Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on any credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; 15 45 (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the 2024 Bonds, or other material events affecting the tax status of the 2024 Bonds; (7) modifications to rights of the beneficial owners of the 2024 Bonds, if material; (8) calls for redemption of 2024 Bonds (other than calls pursuant to sinking fund redemption), if material, and tender offers; (9) defeasances; (10) release, substitution or sale of any property securing repayment of the 2024 Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar proceedings related to the County, the Trustee or any other person or entity that may at any time become legally obligated to make Bond Payments (collectively, the "Obligated Persons"); (13) The consummation of a merger, consolidation, or acquisition involving an Obligated Person or the sale of all or substantially all of the assets of the Obligated Person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material; (15) Incurrence of a financial obligation (as defined below) 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, any of which affect Bondholders, if material; and 16 46 (16) Default, event of acceleration, termination event, modification of terms or other similar events under the terms of a financial obligation of the County, any of which reflect financial difficulties; and (d) in a timely manner, not in excess of ten Business Days after the occurrence of the failure, notice of a failure of the County to provide required annual financial information described in (a) or (b) above on or before the date specified. "Financial obligation" means (a) a debt obligation, (b) a derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation, or (c) a guarantee of an obligation described in either clause (a) or (b). The term "financial obligation" shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with Rule 15c2-12 of the Securities and Exchange Commission promulgated under the Securities Exchange Act of 1934, as amended. As used above, the "final Official Statement" means the Official Statement dated June , 2024, that the County has approved and authorized for use in connection with the offering and sale of the 2024 Bonds. For the purposes of the events identified in subparagraph (c)(12) above, the event is considered to occur when any of the following occurs: the appointment of a receiver, fiscal agent or similar officer for an Obligated Person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Obligated Person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Obligated Person. If the County fails to comply with the undertaking described above, the Trustee may take action to protect and enforce the rights of all the beneficial owners of the 2024 Bonds with respect to such undertaking, including an action for specific performance; provided, however, that failure to comply with such undertaking will not be an Event of Default and will not result in any acceleration of payment of the 17 47 2024 Bonds. All actions will be instituted, had and maintained in the manner provided in this paragraph for the benefit of all beneficial owners of the 2024 Bonds. The County must provide the documents and other information referred to above to the MSRB in an electronic format as prescribed by the MSRB and accompanied by identifying information as prescribed by the MSRB. The County may discharge its undertaking as set forth in this Section by providing such information in any manner that the United States Securities and Exchange Commission subsequently authorizes in lieu of the manner described above. The County reserves the right to modify from time to time the information to be provided, or the presentation of the information to be provided, to the extent necessary or appropriate in the County's judgment, provided that: (A) any such modification may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the County; (B) the information to be provided, as modified, would have complied with the requirements of Rule 15c2-12 as of the date of the final Official Statement, after taking into account any amendments or interpretations of Rule 15c2-12, as well as any changes in circumstances; and (C) any such modification does not materially impair the interests of the beneficial owners, as determined by the Trustee, by Bond Counsel, or by the approving vote of the Majority Owners pursuant to the terms of this Agreement, as it may be amended from time to time, at the time of the amendment. Any annual financial information containing modified operating data or financial information will explain, in narrative form, the reasons for the modification and the impact of the change in the type of operating data or financial information being provided. The provisions of this Section will terminate upon payment, or provision having been made for payment, in a manner consistent with Rule 15c2-12, in full of the principal of and interest on all the Bonds. 18 48 ARTICLE V ADDITIONAL PROVISIONS Section 5.01. Notices. (a) Any communication provided for in this Supplemental Agreement must be in English and must be in writing. "Writing" includes electronic mail but does not include facsimile transmission. (b) For this Supplemental Agreement, any communication sent by electronic mail will be deemed to have been given on the date the communication is similarly acknowledged by a County Representative (in the case of the County) or other authorized representative (in the case of any other party). No such communication will be deemed given or effective without such an acknowledgment. Any electronic communication to the Trustee is subject to the provisions of Section 9.02 of the Prior Agreement. (c) Any other 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 2024 LOBS Trust Agreement, Post Office Box 8181, Hillsborough, NC 27278 (ii) if to the Trustee, to The Bank of New York Mellon Trust Company, N.A., Re: Notice for 2024 Financing for Orange County, 4655 Salisbury Rd., STE 300, Jacksonville, FL 32256 (iii) If to the LGC, to the North Carolina Local Government Commission, Attn: Secretary of the Commission, Re: Notice for 2024 Orange County LOBS Financing, Longleaf Building, 3200 Atlantic Ave., Raleigh, NC 27604 19 49 (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) 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. (f) 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. (g) Notwithstanding any contrary provision of the Trust Agreement, the County agrees that it may not provide any notices or other communications to the Trustee by facsimile transmission. Section 5.02. Consent to Jurisdiction. The Trustee consents to jurisdiction in the State of North Carolina for any lawsuit arising from this Supplemental Agreement, or arising from any of the related transactions contemplated by this Supplemental Agreement. Section 5.03. Binding Effect; Limitation of Rights. This Supplemental Agreement is binding upon, inures to the benefit of and is enforceable by the parties and their respective successors and assigns. Nothing expressed or implied in this Supplemental Agreement or the 2024 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. Section 5.04. Severability. If any provision of this Supplemental Agreement is determined to be unenforceable, that does not affect any other provision of this Supplemental Agreement. Section 5.05. Counterparts. This Supplemental Agreement may be signed in several counterparts, including separate counterparts. Each will be an original, but all of them together constitute the same instrument. 20 50 Section 5.06. 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 2021 Agreement. [The remainder of this page has been left blank intentionally.] 21 51 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 June 1, 2024. (SEAL) ATTEST: ORANGE COUNTY, NORTH CAROLINA By: Laura Jensen Bonnie B. Hammersley Clerk, Board of Commissioners County Manager The Bank of New York Mellon Trust Company, N.A., as Trustee By: Printed name: Title: [Second Supplemental Trust Agreement dated as of June 1, 2024] 22 52 Exhibit A - list of projects to be financed with estimated amounts Project Est.Amount ($) Research Triangle Logistics Park $1,684,707 Lake Orange Dam Rehabilitation 252,024 Neuse River Rules/Gravelly Hill Middle School 300,000 Solid Waste Equipment Replacement 574,971 501 West Franklin improvements 2,000,000 Whitted Stormwater Improvements 175,000 Bi-Directional Emergency Response K12 Coverage 1,344,674 Assorted Vehicles 805,743 Deferred Maintenance - capital projects for Chapel 5,118,023 Hill-Carrboro City Schools Project Totals $12,255,142 The County will also use financing proceeds, in the estimated amount of $ to pay financing costs. The amounts stated above are estimates only. The County may use any portion of the 2024 Bonds proceeds for any of the 2024 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 2024 Project Costs. Components of the 2024 Project related to the Mortgaged Property include the following: • Whitted Building - stormwater improvements • Culbreth Middle School - compressor replacement, HVAC improvements • Ephesus Elementary School - Playground equipment and upgrades, cafeteria furniture 23 53 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. "2024 Bonds" means the County's Limited Obligation Bonds, Series 2024, originally issued pursuant to this Supplemental Agreement as (a) $ Limited Obligation Bonds, Series 2024A, and (b) $ Taxable Limited Obligation Bonds, Series 2024B. The Series A Bonds and the Series B Bonds together constitute all the 2024 Bonds. "2024 Project" means the following: (a) carrying out the planned acquisitions and improvements referenced in the Introduction to this Supplemental Agreement and specified in Exhibit A; (b) carrying out any additional public acquisitions and improvements as the County may designate to the Trustee in a County Certificate, subject to the restrictions in Exhibit A; and (c) paying Financing Costs related to the 2024 Bonds. "2024 Project Costs" means "Project Costs," as defined in the Prior Agreement, related to the 2024 Project. "2024 Project Fund" means the 2024 Orange County Project Fund established pursuant to Section 3.01. "Deed of Trust" means the Prior Deed of Trust as modified by the "Deed of Trust Supplement #2" dated as of June 1, 2024, also granted by the County for the Trustee's benefit. "Mortgaged Property" has the meaning assigned to that term in the Deed of Trust. "Payment Date" with respect to the 2024 Bonds means each April 1 and October 1, beginning October 1, 2024. "Prior Agreement" means the Trust Agreement dated as of June 1, 2021, between the County and The Bank of New York Mellon Trust Company, N.A., as 24 54 trustee, as supplemented by a First Supplemental Trust Agreement dated as of June 13, 2023, also between the County and the Trustee. "Prior Bonds" means the following bonds issued pursuant to the Prior Agreement: $12,585,000 original aggregate principal amount Limited Obligation Bonds, Series 2021A and 2021B $14,298,000 original aggregate principal amount Limited Obligation Bonds, Series 2023A and 2023B "Prior Deed of Trust" means the Deed of Trust and Security Agreement dated as of June 1, 2021, from the County to a Deed of Trust Trustee for the County's benefit, as supplemented by a Deed of Trust Supplement #1 dated as of June 13, 2023. "Supplemental Agreement" means this Second Supplemental Trust Agreement, as it may be properly amended or supplemented from time to time. "Trust Agreement" means the Prior Agreement as modified and supplemented by this Supplemental Agreement, as it may be further amended or supplemented from time to time. All other capitalized terms used in this Second Supplemental Trust Agreement and not otherwise defined have the meanings ascribed thereto in the Prior Agreement. 25 55 Exhibit C - Form of Series A Bond Number R-X REGISTERED REGISTERED ORANGE COUNTY, NORTH CAROLINA Limited Obligation Bond, Series 2024A INTEREST RATE MATURITY DATE DATED DATE CUSIP % October 1, June , 2024 684566 XXX REGISTERED OWNER: *****CEDE & CO.***** PRINCIPAL AMOUNT: **** THOUSAND DOLLARS**** ****($ 000)*** 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, 2024, 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, 2024, 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 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. 26 56 This Bond is one of an issue of$ Limited Obligation Bonds, Series 2024A (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, 2021 (the "Trust Agreement"), as supplemented, between the County and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). 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, including the underlying real property, and certain other property pursuant to the Trust Agreement and a Deed of Trust and Security Agreement dated as of June 1, 2021, as modified. Reference is made to the Trust Agreement, the Deed of Trust referenced above and all amendments and supplements 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. Additional Bonds secured by a parity interest in the property securing the Bonds have been and may be issued under the terms and conditions set forth in the Trust Agreement. 27 57 The Bonds are issued by means of a book-entry system, with one certificate for each maturity immobilized at The Depository Trust Company, New York, New York ("DTC"), and not available for distribution to the public. Transfer of beneficial ownership interests in the Bonds in the principal amount of $5,000 or any integral multiple thereof will be effected on the records of DTC and its participants pursuant to rules and procedures established by DTC and its participants. Principal and interest on the Bonds are payable to DTC or its nominee as registered owner of the Bonds. Neither the Trustee nor the County is responsible or liable for the transfer of ownership or payments or for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. If (a) DTC determines not to continue to act as securities depository for the Bonds or (b) the County so elects, the County and the Trustee will discontinue the book-entry system with DTC. If the County does not identify another qualified securities depository to replace DTC, the County will prepare and execute, and the Trustee will authenticate and deliver in exchange, replacement Bonds in the form of fully registered Bonds. The Bonds may not be redeemed prior to maturity except as provided in this Bond and in the Trust Agreement. The Bonds maturing on or October 1, , are subject to redemption at the County's option in whole or in part on any date on or after October 1, , upon payment of the principal amount to be prepaid plus interest accrued to the redemption date, without premium. If less than all the Bonds are to be redeemed pursuant to this provision, they will be redeemed among maturities in any manner the County chooses. The Trustee, from amounts received from or on behalf of the County, will redeem Bonds maturing on October 1, on October 1 in years and amounts upon payment of 100% of the principal amount thereof plus interest accrued to the redemption date, as follows: Year Amount ($1 To come *Final maturity 28 58 In addition, the Trustee, from amounts received from or on behalf of the County, will redeem Bonds maturing on October 1, on October 1 in years and amounts upon payment of 100% of the principal amount thereof plus interest accrued to the redemption date, as follows: Year Amount ($1 To come *Final maturity The amount of Bonds to be redeemed on any sinking fund payment date may be reduced in accordance with the provisions of the Trust Agreement. If less than all the Bonds of any maturity are called for redemption, the Trustee will select the Bonds to be redeemed by lot; provided, however, that so long as a book-entry system with DTC is used for recording beneficial ownership of Bonds, if less than all of the Bonds within a maturity are to be redeemed, DTC and its participants will determine which of the Bonds within any such maturity are to be redeemed. In any case, (1) the portion of any Bond to be prepaid will be in the principal amount of $5,000 or some integral multiple thereof, and (2) in selecting Bonds for redemption, each Bond will be considered as representing that number of Bonds which is obtained by dividing the principal amount of that Bond by $5,000. If a portion of a Bond is called for redemption, a new Bond in principal amount equal to the unpaid portion will be issued to the registered owner upon the surrender of the Bond. The Trustee will send notice of redemption to DTC or its nominee as the Owner of the Bonds as provided in the Trust Agreement. The Trustee will send the notice not more than 60 days nor less than 30 days prior to the date fixed for redemption. Neither the Trustee nor the County is responsible for sending notices of redemption to anyone other than DTC or its nominee, so long as all the Bonds to be redeemed are held in a book-entry-only form with DTC. 29 59 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 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 provided for in the Trust Agreement) to be 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 will be 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. 30 60 This Bond and the issue of which it is a part are issued with the intent that North Carolina law will govern this Bond and all matters of its interpretation. This Bond will not be entitled to any benefit under the Trust Agreement or be valid or obligatory for any purpose until the Trustee has executed the Certificate of Authentication appearing on this Bond. [The remainder of this page has been left blank intentionally.] 31 61 IN WITNESS WHEREOF, the County has caused this instrument to be signed, sealed and delivered by duly County Representatives, as of the day and year first above written. (SEAL) ORANGECOUNTY, ATTEST: NORTH CAROLINA By: Laura Jensen Bonnie B. Hammersley Clerk, Board of Commissioners County Manager [Orange County, North Carolina $ Limited Obligation Bonds, Series 2024A] 32 62 This Bond has been approved under the provisions of Section 160A-20 and Article 8, Chapter 159 of the General Statutes of North Carolina. Jennifer Wimmer Deputy Secretary, North Carolina Local Government Commission By [Jennifer Wimmer or Designated Assistant] CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds referred to in the Second Supplemental Trust Agreement dated as of June 1, 2024 (the "Trust Agreement"), between Orange County, North Carolina, and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). Date of Authentication: The Bank of New York Mellon Trust Company, N.A., as Trustee By: Authorized Representative [Orange County, North Carolina $ Limited Obligation Bonds, Series 2024A] 33 63 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. 34 64 EXHIBIT D - Schedule of Payments on 2024 Bonds Principal is payable in the amounts and on the dates as shown below, subject to redemption of the 2024 Bonds as provided in this Supplemental Agreement. Interest is payable on the dates shown below. The 2024 Bonds will bear interest from the Closing Date until paid at the rates shown below. The schedule below shows the expected interest payment amounts. The County's obligation with respect to the 2024 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 Prior Agreement. The amounts shown as Total Payments include amounts required to pay the Series A Bonds that are subject to mandatory sinking fund redemption, as provided in Section 2.05, on the dates and in the amounts indicated in Section 2.05. Payments are due to the Bondholders on the indicated Payment Dates. The County will deposit the amounts required for payment with the Trustee by the 25tn day of the month preceding the Payment Date. Principal - Interest- Principal - Interest-Date 2024A 2024A 2024B 2024B Total Payment [To come] 35 65 Exhibit E - Form of Requisition [Date] The Bank of New York Mellon Trust Company, N.A., as Trustee Attention: Corporate Trust Regarding: Requisition under a Second Supplemental Trust Agreement dated as of June 1, 2024, with Orange County, North Carolina To the Trustee: Pursuant to the terms and conditions of the above-referenced Trust Agreement, the County authorizes and requests the disbursement of funds from the "Orange County 2024 Project Fund" established under that Trust Agreement for the costs described below. Capitalized terms used in this requisition and not otherwise defined have the meanings ascribed in the Trust Agreement. This is requisition number from the Orange County 2024 Project Fund. Total Amount for Disbursement Payee Payee's address or wiring instructions The County makes this requisition pursuant to the following representations: 1. The County has appropriated in its current fiscal year funds sufficient to pay the Bond Payments and estimated Additional Payments due in the current fiscal year. 36 66 2. The purpose of this disbursement is for payment of 2024 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 Sian Title: County Representative 1 67 Attachment 4 = y PRELIMINARY OFFICIAL STATEMENT DATED JUNE 2024 NEW ISSUE BOOK-ENTRY ONLY Ratings:Moody's: �] S&P: [_] o Fitch: �] 'o In the opinion of Bond Counsel and subject to the qualifications described in this Official Statement, interest on the 2024A Bonds is not includable in gross income for federal income tax purposes,interest on the 2024B Bonds is includable in gross o income for federal income tax purposes,and interest on all the Bonds offered hereby is exemptfrom current State of North Carolina income taxes.See "TAX TREATMENT"herein for additional information regarding tax consequences arising from ownership or receipt of interest on the Bonds. O � x ORANGE COUNTY,NORTH CAROLINA w o ° $ *LIMITED OBLIGATION BONDS,SERIES 2024A 73 $ *TAXABLE LIMITED OBLIGATION BONDS,SERIES 2024B o wN `e Ca°�•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 the 2024 Bonds described herein. Selected information is presented on this cover page for the convenience of the user. Investors O must read the entire Official Statement to obtain information essential to the making of an informed investment decision. O o Security: The payment by the County of the principal of and interest on the 2024 Bonds is limited to w Ei funds appropriated for that purpose by the Board of Commissioners for the County in its sole discretion, except to the extent payable from Bond proceeds, investment earnings, Net O Proceeds related to casualty or condemnation proceeds, or amounts derived from the o enforcement of remedies on default. UAs security for the 2024 Bonds,the Prior Bonds and all other Bonds issued under the Trust w Agreement(as such terms are defined herein),the County has executed and delivered a deed oof trust,as amended,and will execute and deliver a supplement to such deed of trust,granting, C ; among other things, a lien of record on the Mortgaged Property subject to Permitted oo Encumbrances(as such terms are defined herein). ti THE OBLIGATION TO MAKE PAYMENTS WITH RESPECT TO THE 2024 BONDS IS NOT A GENERAL OBLIGATION OF THE COUNTY,AND THE TAXING POWER OF THE COUNTY IS NOT PLEDGED DIRECTLY OR INDIRECTLY TO SECURE ANY MONIES DUE TO THE OWNERS OF THE 2024 BONDS. q : y See the caption"SECURITY AND SOURCES OF PAYMENT OF 2024 BONDS"herein. Redemption: The 2024 Bonds are subject to redemption as described herein. Uo Purpose: Proceeds of the 2024 Bonds will be used to(1)finance the acquisition,construction,equipping 2 y .2 and improvement of certain County facilities as further described herein and(2)pay certain O o costs incurred in connection with the issuance of the 2024 Bonds. o Interest Payment Dates: April 1 and October 1 of each year,commencing October 1,2024 O� o Denomination: $5,000 or integral multiples thereof ti •w ,o Delivery: On or about June ,2024 2 �o Bond Counsel: Sanford Holshouser LLP ° County Attorney: John L.Roberts,Esq. � � o Wti a Financial Advisor: Davenport&Company LLC h Underwriters'Counsel: McGuireWoods LLP h O ° CIO Trustee: The Bank of New York Mellon Trust Company,N.A. o BAIRD FHN Financial Capital Markets xti 2 The date of this Official Statement is June_,2024. N o *Preliminary,subject to change. 68 MATURITY SCHEDULE FOR 2024 BONDS* Series 2024A Bonds Due Principal Interest October I Amount Rate Yield CUSIP** Series 2024B Bonds Due Principal Interest October I Amount Rate 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©2024 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 2024 Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the 2024 Bonds as a result of various subsequent actions including, but not limited to,a refunding in whole or in part of the 2024 Bonds. 69 IN CONNECTION WITH THIS OFFERING, ROBERT W. BAIRD & CO. INCORPORATED AND F14N FINANCIAL CAPITAL MARKETS (THE "UNDERWRITERS") MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 2024 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 2024 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 2024 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 2024 BONDS OR THE TRUST AGREEMENT IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAW OF THE STATES IN WHICH THE 2024 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 2024 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. 70 ORANGE COUNTY,NORTH CAROLINA BOARD OF COMMISSIONERS Jamezetta Bedford, Chair Sally Greene,Vice Chair Amy Fowler Jean Hamilton Earl McKee Phyllis Portie-Ascott Anna Richards COUNTY STAFF Bonnie B. Hammersley.......................................................................................................County Managerl Travis Myren........................................................................................................... Deputy County Manager Gary Donaldson.........................................................................................................Chief Financial Officer John L. Roberts,Esq............................................................................................................County Attorney BOND COUNSEL Sanford Holshouser LLP FINANCIAL ADVISOR Davenport&Company LLC I Bonnie B.Hamersley has announced her intent to retire as the County Manager as of July 17,2024.The County [has/will] commence[d]a search for a new County Manager.] 71 TABLE OF CONTENTS Page INTRODUCTION.......................................................................................................................................1 TheCounty.....................................................................................................................................1 Purpose ...........................................................................................................................................1 Security...........................................................................................................................................2 The2024 Bonds..............................................................................................................................3 AdditionalBonds............................................................................................................................3 Book-Entry Only.............................................................................................................................3 TaxStatus .......................................................................................................................................3 Professionals...................................................................................................................................3 AdditionalInformation...................................................................................................................3 THE2024 BONDS......................................................................................................................................4 Authorization..................................................................................................................................4 General ...........................................................................................................................................4 RedemptionProvisions...................................................................................................................5 SECURITY AND SOURCES OF PAYMENT OF 2024 BONDS .............................................................6 General ...........................................................................................................................................6 Payment of Bonds;Limited Obligation;Budget and Appropriations.............................................6 TrustAgreement.............................................................................................................................7 Deedof Trust..................................................................................................................................7 Enforceability..................................................................................................................................8 AdditionalBonds............................................................................................................................9 Useof Net Proceeds........................................................................................................................9 AVAILABLE SOURCES FOR PAYMENT...............................................................................................9 General ...........................................................................................................................................9 General Fund Revenues..................................................................................................................9 THEPLAN OF FINANCE........................................................................................................................10 TheProjects..................................................................................................................................10 TheMortgaged Property...............................................................................................................10 ESTIMATED SOURCES AND USES OF FUNDS .................................................................................12 TOTAL ANNUAL DEBT SERVICE REQUIREMENTS........................................................................13 CERTAIN RISKS OF 2024 BOND OWNERS.........................................................................................13 Insufficiency of Payments.............................................................................................................13 Riskof Nonappropriation.............................................................................................................14 Valueof Collateral........................................................................................................................14 UninsuredCasualty.......................................................................................................................14 Outstanding General Obligation Debt of the County....................................................................15 EnvironmentalRisks.....................................................................................................................15 AdditionalBonds..........................................................................................................................15 Bankruptcy....................................................................................................................................15 Cybersecurity................................................................................................................................16 ClimateChange.............................................................................................................................16 THECOUNTY..........................................................................................................................................16 General .........................................................................................................................................16 FinancialInformation....................................................................................................................16 LEGALMATTERS...................................................................................................................................17 Litigation.......................................................................................................................................17 Opinionsof Counsel.....................................................................................................................17 i 72 TABLE OF CONTENTS (continued) Page TAXTREATMENT..................................................................................................................................17 Opinionof Bond Counsel.............................................................................................................17 Federal Tax Matters Related to the Taxable 2024B Bonds..........................................................18 Notice Pursuant to IRS Circular 230 ............................................................................................19 OriginalIssue Premium................................................................................................................19 OriginalIssue Discount.................................................................................................................20 CONTINUING DISCLOSURE OBLIGATION.......................................................................................21 The County's Continuing Disclosure Compliance.......................................................................23 UNDERWRITING....................................................................................................................................24 RATINGS..................................................................................................................................................24 MISCELLANEOUS..................................................................................................................................24 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 Forms of Opinions of Bond Counsel Appendix E Book-Entry Only System ii 73 Orange County,North Carolina $ *Limited Obligation Bonds, Series 2024A $ Taxable Limited Obligation Bonds, Series 2024B 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 2024A in the aggregate principal amount of $ * (the "2024A Bonds") and Taxable Limited Obligation Bonds, Series 2024B in the aggregate principal amount of$ *(the"2024B Bonds"and, together with the 2024A Bonds,the"2024 Bonds"). The 2024 Bonds will be issued pursuant to a Trust Agreement dated as of June 1, 2021 (the"2021 Trust Agreement"), as previously supplemented and as supplemented by a Second Supplemental Trust Agreement(the"Second Supplemental Trust Agreement"and,together with the 2021 Trust Agreement,as previously supplemented, the "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"). Pursuant to the Trust Agreement, the County has previously issued its (1) $19,355,000 Limited Obligation Bonds, Series 2021A (the "2021A Bonds"), of which $15,650,000 in principal amount is currently Outstanding, (2) $4,230,000 Taxable Limited Obligation Refunding Bonds, Series 2021B (the "2021B Bonds"),of which$1,945,000 in principal amount is currently Outstanding,(3)$ Limited Obligation Bonds, Series 2023A (the "2023A Bonds"), [all of which remain Outstanding], and (4) $ Limited Obligation Bonds, Series 2023B (the "2023B Bonds" and, together with the 2021A Bonds,the 2021B Bonds and the 2023A Bonds,the"Prior Bonds"), [all of which remain Outstanding]. 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 2024 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 2024 Bonds. See "THE PLAN OF FINANCE"and"ESTIMATED SOURCES AND USES OF FUNDS"herein. *Preliminary,subject to change. 74 SECURITY The payment by the County of the principal of and interest on the 2024 Bonds is limited to funds appropriated for that purpose by the Board of Commissioners for the County in its sole discretion, 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 2024 Bonds, the Prior Bonds and any additional bonds issued under the Trust Agreement on a parity therewith(the"Additional Bonds"and,together with the 2024 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, 2021 (as previously supplemented and amended, the "Existing Deed of Trust"), granting a lien of record on the sites of the County's Whitted Building located in Hillsborough,North Carolina(the"Whitted Building"),the County's Blackwood Farm Park located in Hillsborough, North Carolina (the "Blackwood Farm Park"), Culbreth Middle School located in Chapel Hill, North Carolina ("Culbreth Middle School"), the Orange County Main Library located in Hillsborough, North Carolina (the "Orange County Library"), Orange Middle School located in Hillsborough, North Carolina ("Orange Middle School"), Hillsborough Elementary School located in Hillsborough, North Carolina ("Hillsborough Middle School"), New Hope Elementary School located in Chapel Hill, North Carolina ("New Hope Elementary School"), Pathways Elementary School located in Hillsborough, North Carolina ("Pathways Elementary School"), Orange High School located in Hillsborough,North Carolina("Orange High School"), and Ephesus Elementary School located in Chapel Hill,North Carolina ("Ephesus Elementary School"), and the real estate improvements thereon and appurtenances thereto, all as more particularly described in the Existing Deed of Trust (collectively, the"Mortgaged Property"), subject only to Permitted Encumbrances(as defined in Appendix C hereto). As security for the Bonds and in connection with the issuance of the 2024 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 June 1,2024(the"Second Deed of Trust Supplement"),supplementing the Existing Deed of Trust(as so supplemented,the"Modified Deed of Trust"),to provide that the Modified Deed of Trust shall also secure the 2024 Bonds. 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 June 1,2021. 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 2024 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 2024 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 2024 BONDS"herein. 2 75 THE 2024 BONDS The 2024 Bonds will be dated as of their date of delivery. Interest is payable on April 1 and October 1 of each year,beginning October 1,2024,at the rates set forth on the inside front cover page of 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 2024 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 2024 Bonds will be delivered in book-entry form only without physical delivery of certificates to beneficial owners of the 2024 Bonds. Payments to beneficial owners of the 2024 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 2024 Bonds,references herein to registered owner or Owners of the 2024 Bonds means Cede & Co. and not the beneficial owners of the 2024 Bonds. TAX STATUS In the opinion of Bond Counsel and subject to the qualifications described in this Official Statement, interest on the 2024A Bonds is not includable in gross income for federal income tax purposes, interest on the 2024B Bonds is includable in gross income for federal income tax purposes, and interest on all the Bonds offered hereby is exempt from current State of North Carolina income taxes. See "TAX TREATMENT"herein for additional information regarding tax consequences arising from ownership or receipt of interest on the Bonds, including information regarding the application of federal alternative minimum tax provisions to the Bonds and certain other federal, State and local tax consequences. PROFESSIONALS Robert W.Baird&Co. Incorporated and FHN Financial Capital Markets (the"Underwriters") are underwriting the 2024 Bonds. The Bank of New York Mellon Trust Company,N.A. is serving as Trustee with respect to the 2024 Bonds. Davenport&Company LLC is serving as the County's 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 3 76 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 131 West Margaret Lane, Third Floor,PO Box 8181, 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,North Carolina 27103 or FHN Financial Capital Markets at 1000 Ridgeway Loop Road, Suite 200, Memphis, Tennessee 38120. After the offering period, copies of such documents may be obtained from the Trustee at 4655 Salisbury Road, Suite 300,Jacksonville,Florida 32256. THE 2024 BONDS AUTHORIZATION The County is issuing the 2024 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 May 21,2024. Each 2024 Bond will be deemed an"installment contract"under the Act. In addition, the County's issuance of the 2024 Bonds was approved by the North Carolina Local Government Commission (the "LGC") on June 4, 2024. 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 2024 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 2024 Bonds will be dated their date of delivery. Interest on the 2024 Bonds is payable on each April 1 and October 1 (the "Payment Dates"), beginning October 1, 2024, 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 2024 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 2024 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 2024 Bonds,transfers and exchanges of beneficial ownership interests in the 2024 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 2024 Bonds is registrable by the Owners thereof, and the 2024 Bonds may be exchanged for an equal aggregate, unredeemed principal amount of 2024 Bonds of the authorized denomination and of the same maturity and interest rate, only upon presentation and surrender of the 2024 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 4 77 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 2024A Bonds Optional Redemption. The 2024A 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. The 2024A Bonds maturing on October 1,20_,are subject to mandatory sinking fund redemption, at a redemption price equal to the principal amount to be redeemed plus accrued interest, if any, to the redemption date, without premium, on October 1, in the years and amounts as follows: Year Amount *Maturity. Selection. If less than all of the 2024A Bonds are to be optionally redeemed as described above, the County in its discretion may elect which maturities of 2024A Bonds are to be redeemed. If less than all the 2024A Bonds of any maturity are to be redeemed, the Trustee shall select the 2024A 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 2024A Bonds, if less than all the 2024A Bonds within a maturity are to be redeemed,the parties agree that DTC may determine which of the 2024A 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 2024A Bond to be redeemed must be in the principal amount of $5,000 or some multiple thereof, and(2)in selecting 2024A Bonds for redemption, each 2024A Bond will be considered as representing that number of 2024A Bonds which is obtained by dividing the principal amount of that 2024A Bond by$5,000.If a portion of a 2024A Bond is called for redemption,a new 2024A 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 2024A 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 2024A Bonds called for redemption,the 2024A Bonds or portions of the 2024A Bonds called for redemption cease to accrue interest from and after the redemption date, and thereafter those 2024A 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 2024A Bonds being called for redemption for which DTC or its nominee is the registered owner,to 5 78 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 2024A Bonds for which no book-entry only system of registration is in effect, to each of the registered owners of those 2024A 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 "EMMA" 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 2024A 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 2024A 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 2024A Bonds, as applicable, in mandamus for specific performance or similar remedy to compel performance. 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 2024A 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 2024A 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. 2024B Bonds. The 2024B Bonds are not subject to redemption prior to maturity. SECURITY AND SOURCES OF PAYMENT OF 2024 BONDS GENERAL The 2024 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. In 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 6 79 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. If for any Fiscal Year the County adopts an annual budget that does not appropriate (for that purpose) an amount equal to the Bond Payments or estimated Additional Payments for that Fiscal Year,fails to adopt an annual budget that appropriates(for that purpose) an amount equal to the Bond Payments and estimated Additional Payments coming due during that Fiscal Year within 15 days after the beginning of any Fiscal Year, or amends the annual budget to reduce the amounts appropriated for Bond Payments and Additional Payments below the amounts expected to be required for the remainder of that Fiscal Year, then the County must provide notice of such event to the Trustee and the LGC and post such notice on the MSRB's EMMA system. 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. DEED OF TRUST General. In connection with the execution and delivery of the Prior 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 Mortgaged Property. In connection with the execution and delivery of the 2024 Bonds,the County will execute and deliver the Second Deed of Trust Supplement to provide that the Modified Deed of Trust secures the Prior Bonds, the 2024 Bonds and any Additional Bonds issued under the Trust Agreement. ONLY THE SITES ON WHICH (1) THE WHITTED BUILDING, (2) BLACKWOOD FARM PARK, (3) CULBRETH MIDDLE SCHOOL, (4) THE ORANGE COUNTY LIBRARY, (5) ORANGE MIDDLE SCHOOL, (6) HILLSBOROUGH ELEMENTARY SCHOOL, (7) NEW HOPE ELEMENTARY SCHOOL, (8) PATHWAYS ELEMENTARY SCHOOL, (9) ORANGE HIGH SCHOOL, AND (10) EPHESUS ELEMENTARY SCHOOL 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 1,2021. 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 with respect to a portion of the Mortgaged Property will be insured by a title insurance policy. The title insurance policy only insures the County's title to the 7 80 sites of(1)the Whitted Building,(2)Blackwood Farm Park,(3)Culbreth Middle School and(4)the Orange County Library. The other properties comprising the Mortgaged Property are not covered by the title insurance policy. The title insurance policy is subject to certain exceptions described therein, including a survey exception with respect to the Mortgaged Property. 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. 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; Provision for 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 2024 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 8 81 2024 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 2024 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 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 2024 BOND OWNERS"herein. ADDITIONAL BONDS Under the conditions described in the Trust Agreement, without the approval or consent of the Owners of the then Outstanding 2024 Bonds, Additional Bonds may be delivered and secured on parity with the 2024 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 2024 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 2024 Bonds. GENERAL FUND REVENUES The County's general fund revenues for the fiscal year ended June 30, 2023 were $269.2 million and for the fiscal year ending June 30,2024 are budgeted to be [$279.5 million]. General fund revenues are 9 82 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 30,2023,the County imposed a property tax of$0.8312 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 30,2024,the County imposed a property tax of$0.8353 per$100 of assessed value. A rate of $0.8312 per$100 of assessed value in the fiscal year ended June 30,2023 generated approximately$188.2 million. A rate of$0.8353 per$100 of assessed value in the fiscal year ending June 30, 2024 is estimated to generate approximately [$190.7 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 30,2023. THE PLAN OF FINANCE The 2024 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 2024 Bonds. THE PROJECTS A portion of the proceeds of the 2024A 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: Project Estimated Cost Research Triangle Logistics Park $1,684,707 Lake Orange Dam Rehabilitation 252,024 Neuse River Rules/Gravelly Hill Middle School 300,000 Solid Waste Equipment Replacement 574,971 501 West Franklin building upfit 2,000,000 Whitted Stormwater Improvements 175,000 Bi-Directional Emergency Response K12 Coverage 1,344,674 Assorted Vehicles 805,743 Deferred Maintenance—capital projects for Chapel Hill-Carrboro City Schools 5,118,023 Total Project Costs $12,255,142 THE MORTGAGED PROPERTY The 2024 Bonds, the Prior Bonds and any Additional Bonds will be secured by the Mortgaged Property. The Mortgaged Property includes the County's Whitted Building, Blackwood Farm Park, Culbreth Middle School,Orange County Library,Orange Middle School,Hillsborough Elementary School, New Hope Elementary School,Pathways Elementary School,Orange High School and Ephesus Elementary School(all as described below),and the associated real estate. The"Mortgaged Property"is defined in the 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. Whitted Building. The Whitted Building is a three-story building consisting of approximately 56,984 square feet on an approximately 5.7-acre site located at 300 West Tryon Street in Hillsborough, 10 83 North Carolina. The Whitted Building houses certain of the County's administrative offices, Board of Commissioners' meeting space and event space. A portion of the proceeds of the 2024A Bonds will be used to make certain improvements to the Whitted Building, including storm water improvements. 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 [$9.7 million]. Blackwood Farm Park. Blackwood Farm Park consists of approximately 149 acres of land located at 4215 N.C. Highway 86 South in Hillsborough,North Carolina. The park includes a historic farmhouse, barn,smokehouse,corncrib and other outbuildings,a picnic shelter,restrooms,4 miles of hiking trails,and fishing pond. The County estimates the insured value of this property (not including the equipment associated with the property, which is generally not part of the Mortgaged Property) to be approximately [$0.25 million]. Culbreth Middle School. Culbreth Middle School is a one-story building consisting of approximately 122,500 square feet on an approximately 35-acre site located at 225 Culbreth Road in Chapel Hill, North Carolina. A portion of the proceeds of the 2024A Bonds will be used to make certain improvements to Culbreth Middle School, including a compressor replacement and other HVAC improvements. 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 [$21.5 million]. Orange County Library. The Orange County Library Main Branch is a two-story building consisting of approximately 23,454 square feet on an approximately 0.5-acre site located at 137 W. Margaret Lane in Hillsborough, North Carolina. 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[$5.6 million]. Orange Middle School. Orange Middle School is a_-story building consisting of approximately square feet on an approximately _-acre site located at 308 Orange High School Road in Hillsborough,North Carolina. 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[$22.8 million]. Hillsborough Elementary School. Hillsborough Elementary School is a -story building consisting of approximately square feet on an approximately_-acre site located at 402 North Nash Street in Hillsborough,North Carolina. 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 [$12.4 million]. New Hope Elementary School. New Hope Elementary School is a_-story building consisting of approximately square feet on an approximately_-acre site located at 1900 New Hope Church Road in Chapel Hill,North Carolina. 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 [$17.1 million]. Pathways Elementary School. Pathways Elementary School is a -story building consisting of approximately square feet on an approximately_-acre site located at 431 Strouds Creek Road in Hillsborough, North Carolina. 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 [$16.8 million]. 11 84 Orange High School. Orange High School is a _-story building consisting of approximately square feet on an approximately _-acre site located at 500 Orange High School Road in Hillsborough,North Carolina. 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 [$43.2 million]. Ephesus Elementary School. Ephesus Elementary School is a _-story building consisting of approximately square feet on an approximately --acre site located at 1495 Ephesus Church Road in Chapel Hill,North Carolina. A portion of the proceeds of the 2024A Bonds will be used to make certain improvements to Ephesus Elementary School, including installation of playground equipment and upgrades and cafeteria furniture. 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 [$11.7 million]. NO OTHER FACILITY OR IMPROVEMENT FINANCED WITH THE 2024 BONDS WILL BE INCLUDED AS PART OF THE MORTGAGED PROPERTY. The Trust Agreement and the 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 2024 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. 12 85 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 2024 Bonds and the Prior Bonds. 2024A Bonds 2024B Bonds Prior Bonds Fiscal Year Total Principal Total Principal Total Principal (Ended June 30) and Interest and Interest and Interest' Total 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 TOTAL' 'Includes debt service on the 2021A Bonds,2021B Bonds,2023A Bonds and 2023B Bonds. Note:Totals may not foot due to rounding. CERTAIN RISKS OF 2024 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 13 86 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 2024 Bonds and the outstanding Prior 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 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 *Preliminary,subject to change. 14 87 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 future. 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 The site of the Whitted Building has been owned by the County since 1975. The site of the Blackwood Farm Park has been owned by the County since 2001. The site of the Orange County Library has been owned by the County since 2010. Culbreth Middle School has been owned by the County since 2014 and has been operated as a public school in the County since . Orange Middle School has been owned by the County since 2023 and has been operated as a public school in the County since 1968. Hillsborough Elementary School has been owned by the County since 2023 and has been operated as a public school in the County since . New Hope Elementary School has been owned by the County since 2023 and has been operated as a public school in the County since 1991. Pathways Elementary School has been owned by the County since 2023 and has been operated as a public school in the County since 2000. Orange High School has been owned by the County since 2023 and has been operated as a public school in the County since 1963. Ephesus Elementary School has been owned by the County since 2023 and has been operated as a public school in the County since 1972. [County to confirm] The County is not aware of any material environmental contamination on such sites. 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 2024 Bonds and the Prior Bonds. In addition, remedies under the Trust Agreement and the Modified Deed of Trust are controlled by the Majority Owners. Upon issuance of the 2024 Bonds, the Owners of the 2024 Bonds will not own a majority of the Bonds. 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 2024 Bonds, including (a) delay in enforcement of their remedies, (b) subordination of their claims to claims of those supplying goods and services to the 15 88 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 2024 Bonds. The effect of the other provisions of the United States Bankruptcy Code on the rights and remedies of the holders of the 2024 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. CYBERSECURITY The County, like many other large public and private entities, relies on a large and complex technology environment to conduct its operations, and faces multiple cybersecurity threats including, but not limited to, hacking, phishing, viruses, malware and other attacks on its computing and other digital networks and systems (collectively, "Systems Technology"). As a recipient and provider of personal, private, or sensitive information, the County may be the target of cybersecurity incidents that could result in adverse consequences to the County and its Systems Technology,requiring a response action to mitigate the consequences. Cybersecurity incidents could result from unintentional events, or from deliberate attacks by unauthorized entities or individuals attempting to gain access to the County's System Technology for the purposes of misappropriating assets or information or causing operational disruption and damage. To mitigate the risk of business operations impact and/or damage from cybersecurity incidents or cyber- attacks,the County invests in multiple forms of cybersecurity and operational safeguards. While the County's cybersecurity and operational safeguards are periodically tested,no assurances can be given by the County that such measures will ensure against other cybersecurity threats and attacks. Cybersecurity breaches could cause material disruption to the County's finances or operations. The costs of remedying any such damage or protecting against future attacks could be substantial. Further, cybersecurity breaches could expose the County to material litigation and other legal risks, which could cause the County to incur material costs related to such legal claims or proceedings. CLIMATE CHANGE The County is susceptible to the effects of extreme weather events and natural disasters, including floods,droughts and hurricanes,and has experienced severe weather events in the past. These effects may be amplified by a prolonged global temperature increase over the next several decades(commonly referred to as"climate change"). No assurances can be given that a future extreme weather event driven by climate change will not adversely affect the operations of the County. 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, 2023. Excerpts from the financial statements of the County for the fiscal year ended June 30, 2023 are available in Appendix B hereto. Copies of the complete financial statements 16 89 containing the unqualified report of the independent certified public accountants are available in the office of Gary Donaldson, Chief Financial Officer, 131 West Margaret Lane, Third Floor, PO Box 8181, Hillsborough,North Carolina 27278. 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 2024 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 2024 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 2024 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 opinions of Sanford Holshouser LLP, as Bond Counsel, substantially in the forms set forth in Appendix D hereto,will be delivered at the time of the delivery of the 2024 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 2024 Bonds. Bond Counsel will express no opinion(1)as to the County's financial condition or its ability to provide for payments on the 2024 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 2024 Bonds, including this Official Statement. Bond Counsel has,however,provided the sample legal opinion forms that appear as Appendix D,prepared the document summaries that appear as Appendix C,and approved the descriptions in this Official Statement of(1)the terms of the 2024 Bonds and the financing documents and (2) its legal opinion. In this transaction, Bond Counsel serves only as bond counsel to the County. TAX TREATMENT OPINION OF BOND COUNSEL Tax Treatment of 2024A Bonds. In the opinion of Sanford Holshouser LLP, Carrboro, North Carolina,Bond Counsel for the County("Bond Counsel"),under existing law,interest on the 2024A Bonds (1) will not be included in gross income for federal income tax purposes, and (2) will be exempt from existing State of North Carolina income taxation. Interest on the 2024A Bonds is not a separate tax 17 90 preference item for purposes of the federal alternative minimum tax; however, such interest is taken into account in determining the annual adjusted financial statement income of applicable corporations (as defined in Section 59(k) of the "Code," as defined below) for the purpose of computing the alternative minimum tax imposed on corporations for tax years that begin after December 31,2022. 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 2024A Bonds and the timely payment to the United States of any arbitrage profit with respect to the 2024A Bonds.The County's failure to comply with such covenants could cause interest on the 2024A Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the 2024A Bonds. In addition to the matters addressed above,prospective purchasers of the 2024A Bonds should be aware that the ownership of tax-exempt obligations may result in collateral federal income tax consequences to certain taxpayers,including without limitation financial institutions,property and casualty insurance companies, certain S corporations, certain foreign corporations subject to the branch profits tax, corporations subject to the environmental tax,recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax- exempt obligations. Prospective purchasers of the 2024A Bonds should consult their tax advisors as to the applicability and impact of such consequences. Tax Treatment of 2024B Bonds — Federally Taxable. In the opinion of Bond Counsel, under existing law,interest payments on the 2024B Bonds will be included in gross income for federal income tax purposes,but will be exempt from State of North Carolina income taxation. Other Matters. Bond Counsel will give its opinions in reliance upon certifications by County representatives and others as to certain facts relevant to the opinion. Bond Counsel's opinions do not address the tax-exempt status of payments on the 2024 Bonds derived from parties other than the County,even if those payments are denominated as interest with respect to the 2024 Bonds.Bond Counsel will express no other opinion regarding the federal or North Carolina tax consequences of the ownership of or the receipt or accrual of interest on the 2024 Bonds. Interest on the 2024 Bonds may or may not be subject to state or local taxation in jurisdictions other than North Carolina. Prospective purchasers of the 2024 Bonds should consult their own tax advisors as to the status of interest on the 2024 Bonds under the tax laws of any such jurisdiction other than North Carolina. FEDERAL TAX MATTERS RELATED TO THE TAXABLE 2024B BONDS The following is a summary of certain U.S. federal income tax consequences relating to the purchase, ownership and disposition of the taxable 2024B Bonds. It does not provide a complete analysis of all potential tax considerations relating to the purchase, ownership and disposition of the 2024B Bonds that may be relevant to investors in light of their particular investment or other circumstances. This summary is based on the provisions of the Code, the applicable Treasury Regulations promulgated or proposed under the Code(the"Treasury Regulations"),judicial authority and administrative rulings and practice,all of which are subject to change,possibly retroactively,or to different interpretation. This summary applies only to initial purchasers of the 2024B Bonds that are "U.S. holders" (as defined below), acquire the 2024B Bonds at their original issue price within the meaning of Section 1273 18 91 of the Code and hold the 2024B Bonds as capital assets. A capital asset is generally an asset held for investment rather than as inventory or as property used in a trade or business. This summary also does not discuss the particular tax consequences that might be relevant to investors that are subject to special rules under the federal income tax laws. Special rules apply,for example,to trusts; estates;tax-exempt investors; foreign investors; banks, thrifts, insurance companies, regulated investment companies, or other financial institutions or financial service companies; brokers or dealers in securities, commodities or foreign currency;U.S.persons that have a functional currency other than the U.S.dollar;partnerships or other flow- through entities; real estate investment trusts, financial asset securitization investment trusts, subchapter S corporations;person subject to alternative minimum tax;persons who own the Bonds as part of a straddle, hedging transaction, constructive sale transaction or other risk-reduction transaction; persons who have ceased to be U.S. citizens or to be taxed as resident aliens; or persons who acquire the 2024B Bonds in connection with their employment or other performance of services. The following summary does not address all possible tax consequences. In particular, except as specifically described below, it does not discuss any estate, gift, generation skipping, transfer, state, local or foreign tax consequences.No ruling from the Internal Revenue Service(the"IRS")has been sought with respect to the statements made and the conclusions reached in the following summary, and there is no assurance that the IRS will agree with those statements and conclusions. For all these reasons, each prospective investor should consult with its tax advisor about the federal income tax and other tax consequences of the acquisition, ownership and disposition of the 2024B Bonds. As used herein, a"U.S. holder"is a beneficial owner of the 2024B Bonds who is a"United States person"and whose status as a U.S.holder is not overridden under the provisions of an applicable tax treaty. For these purposes, a"United States person" is a citizen or resident of the United States; a corporation or partnership that is created or organized in or under the laws of the United States or any of the fifty states or the District of Columbia, unless, in the case of a partnership, otherwise provided by the Treasury Regulations; an estate the income of which is subject to federal income taxation regardless of its source;or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S.persons have the authority to control all substantial decisions of the trust. NOTICE PURSUANT TO IRS CIRCULAR 230 This discussion was not intended or written to be used,and cannot be used by any taxpayer,for the purpose of avoiding penalties that may be imposed on the taxpayer. This discussion was written to support the promotion or marketing of the 2024B Bonds.Each taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor. ORIGINAL ISSUE PREMIUM The 2024 Bonds maturing on October 1, (collectively, the "Premium Bonds") are being sold at an initial offering price in excess of the principal amounts payable at maturity. Under the Code,the difference between(a)the initial offering prices to the public(excluding bond houses and brokers)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". Original issue premium is not deductible for federal income tax purposes. For an owner of a Premium Bond, the amount of the original issue premium which is treated as having accrued over the term of such Premium Bond is reduced from the owner's cost basis of such Premium Bond in determining, for federal income tax purposes,the gain or loss upon the sale,redemption or other disposition of such Premium Bond(whether upon its sale,redemption or payment at maturity). 19 92 Bond Counsel's opinion will not specifically address any issues relating to the treatment of premiums paid on Premium Bonds. Owners of Premium Bonds should consult their tax advisors with respect to the tax consequences of owning or disposing of a Premium Bond. ORIGINAL ISSUE DISCOUNT The 2024 Bonds maturing on October 1, (collectively, the "Discount Bonds") are being sold at initial offering prices which are less than the principal amounts payable at maturity.Under the Code, the difference between (a)the initial offering prices to the public (excluding bond houses and brokers) at which a substantial amount of each maturity of the Discount Bonds is sold and (b)the principal amount payable at maturity of such Discount Bonds constitutes original issue discount treated as interest which(in the case of the 2024A Bonds)will be excluded from the gross income of the owners of such Discount Bonds for federal income tax purposes. In the case of an owner of an Discount Bond,the amount of original issue discount on such Discount Bond is treated as having accrued daily over the term of such Discount Bond on the basis of a constant yield compounded at the end of each accrual period and is added to the owner's cost basis of such Discount Bond in determining, for federal income tax purposes, the gain or loss upon the sale, redemption or other disposition of such Discount Bond (including its sale, redemption or payment at maturity). Amounts received on the sale,redemption or other disposition of an Discount Bond which are attributable to accrued original issue discount on such Discount Bond will be treated(in the case of the 2024A Bonds) as interest exempt from gross income,rather than as a taxable gain, for federal income tax purposes,and will not be a specific item of tax preference for purposes of the federal alternative minimum tax imposed on corporations and individuals. However, it should be noted that with respect to certain owners, a portion of the original issue discount that accrues in each year w may result in other collateral federal income tax consequences for certain taxpayers in the year of accrual. Consequently,owners of a Discount Bond should be aware that the accrual of original issue discount on any Discount Bond in each year may result in a federal alternative minimum tax liability or other collateral federal income tax consequences, even though such corporate owner may not have received any cash payments attributable to such original issue discount in such year. Original issue discount is treated as compounding semiannually(which yield is based on the initial public offering price of such Discount Bond) at a rate determined by reference to the yield to maturity of each individual Discount Bond. The amount treated as original issue discount on an Discount Bond for a particular semiannual accrual period is equal to(a)the product of(1)the yield to maturity for such Discount Bond (determined by compounding at the close of each accrual period) and (2)the amount which would have been the tax basis of such Discount Bond at the beginning of the particular accrual period if held by the original purchaser, less(b)the amount of interest payable on such Discount Bond during the particular accrual period. The tax basis is determined by adding to the initial public offering price on such Discount Bond the sum of the amounts which have been treated as original issue discount for such purposes during all prior accrual periods.If an Discount Bond is sold between semiannual compounding dates,original issue discount which would have accrued for that semiannual compounding period for federal income tax purposes is to be apportioned in equal amounts among the days in such compounding period. The Code contains additional provisions relating to the accrual of original issue discount in the case of owners of the Discount Bonds who subsequently purchase any Discount Bonds after the initial offering or at a price different from the initial offering price during the initial offering of the 2024 Bonds. Owners of Discount Bonds should consult their own tax advisors with respect to the precise determination for federal and state income tax purposes of the amount of original issue discount accrued upon the sale, redemption or other disposition of a Discount Bond as of any date and with respect to other federal, state and local tax consequences of owning and disposing of an Discount Bond. It is possible that under the applicable provisions governing the determination of state or local taxes,accrued original issue discount on 20 93 an Discount Bond may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment attributable to such original issue discount until a later year. Bond Counsel's opinion will not address issues relating to the treatment of original issue discounts on Discount Bonds. Owners of Discount Bonds should consult their tax advisors with respect to the tax consequences of owning or disposing of a Discount Bond. 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 ending June 30, 2024,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 ending June 30, 2024, 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 2024 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 2024 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 2024A Bonds, or other material events affecting the tax status of the 2024A Bonds; (g) modifications to rights of holders of the 2024 Bonds,if material; 21 94 (h) calls for redemption of 2024 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 2024 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 2024 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 95 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 2024 Bonds and is enforceable by the Trustee or by any registered owner of the 2024 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 2024 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 2024 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. [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 fiscal year ended June 30, 2019, 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. 23 96 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 2024 Bonds,if any of the 2024 Bonds are to be purchased,at a purchase price equal to 100% of the principal amount of the 2024 Bonds, plus/less net original issue premium/discount of$ , less an Underwriters' discount of$ . The Underwriters' obligation to purchase the 2024 Bonds is subject to certain terms and conditions set forth in the Purchase Agreement. The Underwriters may offer and sell the 2024 Bonds to certain dealers(including dealers depositing the 2024 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 Investors Service,Inc., S&P Global Ratings and Fitch Ratings Inc. have assigned ratings of"_," " " and "_," respectively, to the 2024 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 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 2024 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. 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. 24 97 APPENDIX A THE COUNTY 98 GENERAL DESCRIPTION Orange County,founded in 1752,is located in the north-central portion of the State on the Piedmont Plateau. The County lies approximately midway between the cities of Atlanta, Georgia and Washington, D.C. Interstate Highway 40 connects to Interstate Highway 85 within the County. Interstate Highway 85 connects the region west through Greensboro to Charlotte and Atlanta,and connects to Interstate Highway 95 just south of Richmond,Virginia. There are four municipalities in the County: the Towns of Chapel Hill and Carrboro in the southeastern part of the County and the Town of Hillsborough and the City of Mebane in the central corridor of the County along Interstate Highway 85 and Interstate Highway 40. The Town of Chapel Hill is the largest municipality in the County and the home of The University of North Carolina at Chapel Hill. The Town of Hillsborough is the County seat. The County is part of the Durham-Chapel Hill Metropolitan Statistical Area, which also includes the Research Triangle Park, a major complex of research and research-oriented manufacturing facilities. Interstate Highway 40 connects the County directly with the Research Triangle Park and Raleigh-Durham International Airport. The City of Mebane,home of most of the County's major manufacturing employers, is on the westernmost boundary of the County. A major portion of the City of Mebane lies in neighboring Alamance County. North of Interstate Highway 85 the County is mostly rural,with a mixture of farming, residential and light industrial and commercial uses. The County is approximately 401 square miles in area, of which approximately 177 square miles are unincorporated, 39 square miles are farmland, 132 square miles are forested, and 53 square miles are urbanized. New York,New York 438 Miles Vicinity Map(50 Mile Radius) Washington,D.C.251 Miles r 9s ' nm, 5 " Trea.Nlb Sole � ` e.m rnn 58 ° 360 �Sla r v, 1 J , Ise .tl.,e}nlll ,�a- C A �"° urlin S W E L .L! +^, •w R M li G \\o.x inn V I is L E w .1. ° 9 c LSH' r."uwlii�:C'v' �l a R A\N S I III1.m 4. o G yiOF ��� Gal �nrm..e a 'i§a ►n.ee Flinn nlntw++l'le, �,�,n n.nms.eim ��•�° n'� w aeacwlee ° F.sp°NI 1 ddd ,ormnwn e501 I+nn:ni Willi.mebury: • Mll Tevltl.nu °- � Monticello 'a mesa .��1 ! � Galtlnell { Beneenaf' 9Nm e _ - Luer/ —r lam �ae.e elpw seiner° �'vr`-�eJButll¢ r,aoree �f F O R O urh°Y�Oa O R A N G E `, ,<..'i:,l.R win d �e.k.ns.11 iElsn��n -..� itAeben � c�}�5�.� F 0 n•II.� l,.ra IaE°r°�DU'R,f�•M .e:..m'�� ' , -.,Ourfl�ro pJ _ 1A �421... 1 ' I Chapel"HIII �cuna ' nrena..al .p,k„r CarYoreSz, �- Ilen - Wino n�a'aM1 �._/ _ 3 .1• � nntantbtl +' Fe„.umal u•l da dYra�•• A 3=s '7 a Mini h6de e rc, *���` ,•1 ti�e W I� n. fAptlx.`�7.�.I^`�el'119f�L enn?: \_ i Atlanta,Georgia 351 Miles 26 99 DEMOGRAPHIC CHARACTERISTICS The United States Department of Commerce, Bureau of the Census, has recorded the County's population to be as follows: 1990 2000 2010 2020 93,851 118,227 133,801 148,696 The North Carolina Office of State Budget and Management has estimated the County's population at July 1 of each of the past five years to be as follows: 2018 2019 2020 2021 2022 142,148 142,597 148,613 148,331 148,707 According to the North Carolina Office of State Budget and Management, as of July 1, 2022, the Town of Chapel Hill(the portion located in the County)had an estimated population of 59,270, the Town of Carrboro had an estimated population of 21,136,the Town of Hillsborough had an estimated population of 9,902 and the City of Mebane(the portion located in the County)had a population of 3,675. The following table presents per capita personal income figures for the County, the State and the United States: Year Co un State U.S. 2018 61,803 $46,040 $53,309 2019 65,941 48,366 55,547 2020 72,271 51,781 59,153 2021 75,349 56,705 64,430 2022 77,568 58,109 65,470 Source:United States Department of Commerce,Bureau of Economic Analysis(most recent data available). [County to review/update] Commercial,Industrial and Institutional Profile The County's economy is characterized by a high degree of institutional and public-sector activity, plus office, commercial and service-oriented business. According to the Orange County Economic Development Commission,the leading industries in the County are educational,health and social services, professional, scientific, management, administrative and waste management services and arts, entertainment, recreation, accommodation and food services. The County's most common occupations, according to the Orange County Economic Development Commission, are educational services (28.7%), health care and social assistance (25.2%) and service occupations (16.4%). Professional and scientific services and manufacturing and agriculture are smaller portions of the County's economy. The University of North Carolina at Chapel Hill and UNC Health Care System,both located in the Town of Chapel Hill, are the largest employers in the County. As of June 30, 2023, they employed approximately 13,108 and 13,536 employees, respectively. Established in 1789, The University of North Carolina at Chapel Hill occupies 729 acres in the County and had an enrollment of approximately 31,705 undergraduate, graduate and professional students for the 2022-2023 academic year. UNC Health Care System opened in 1952 and occupies over 2 million square feet of leased and owned floor space. UNC 27 100 Health Care System has approximately [901] beds, [1,700] attending physicians and [816] residents and interns. In 2015, UNC Health Care System opened a new medical campus in Hillsborough. The new campus includes 50 acute care beds, an 18-bed intensive care unit, six operating rooms, two procedure rooms, an emergency department and outpatient medical and surgical specialty services, including urgent care, imaging and oncology. The new facilities were constructed at a cost of approximately$200 million. The County is also the place of residence for many technical, professional and executive people who work in the Research Triangle Park and neighboring cities of Durham, Raleigh, and Burlington. The Research Triangle refers to an area located among three municipalities: Chapel Hill,Durham and Raleigh. In addition to The University of North Carolina at Chapel Hill,universities located in these municipalities include Duke University and North Carolina Central University in the City of Durham and North Carolina State University in the City of Raleigh. The proximity of these universities makes the Research Triangle area well-suited to many types of research activities. The Research Triangle Park(the"Park"),located ten miles east of the County,contains 7,000 acres of land which has been reserved for research and research-oriented manufacturing. Since its inception in the 1950's, approximately 250 private and governmental organizations have located facilities in the Park and currently employ approximately 55,000 people.Approximately 87%of the employees in the Park work for multinational corporations. The largest employers in the Park include: G1axoSmithKline, Cisco Systems,Inc.,IBM Corporation,Credit Suisse,Cree,Inc.,Grifols,RTI International,Fidelity Investments, U.S.Environmental Protection Agency,National Institute of Environmental Health Sciences,NetApp,and BASF Corporation. Because of its close proximity to the County and the fact that many of the Park's employees reside in the County,the impact of the Park on the County's economy is significant. In addition to the Park,the County has several areas within its borders that are focused on industry and manufacturing. Several manufacturing firms are located along Interstate Highway 85 in the western portion of the County, and the County is targeting this area for future growth of industrial and commercial concerns.Additionally,the County has designated over 2,450 acres in three strategically-placed areas along Interstates 85 and 40 as Economic Development Districts. The County's location, midway between the Piedmont Triad and Research Triangle metropolitan areas, makes these sites extremely attractive. The districts offer development potential for light industrial, warehouse/flex space, office, retail and business service.Numerous tracts,ranging in size from 20 to 100 acres or more, are available. The County is also seeking to spur economic development by providing funds through the Article 46 Sales Tax to finance the development of utility extensions for commercial entities. The County uses the Article 46 Sales Tax to provide a portion of the upfront water/sewer infrastructure costs for businesses. The first project funded by the County was a $4 million water and sewer infrastructure project in the Mebane/Buckhorn area, on land owned by the County. The site is being developed as an industrial park. Morinaga American Foods, Inc., the American affiliate of the Japanese candy maker of Hi-Chew candies purchased 21 acres of land and has constructed a manufacturing plant that initially employed 90 people. The 100,000 square foot plant opened in 2015,representing a$48 million investment within the County. In July 2019,Swiss-Swedish company ABB announced an expansion to its existing 400,000 square foot manufacturing facility in the County. The company said it would spend$40 million over five years to build a new 200,000 square foot manufacturing facility and create approximately 400 new manufacturing jobs at the site. This investment has now been completed, creating approximately 400 electrical assembly jobs. ABB has its United States headquarters in nearby Cary,North Carolina. ABB's previous acquisition of an existing GE manufacturing facility now makes it the County's largest private employer. 28 101 In September 2019, Medline Industries, a distributor and manufacturer of medical supplies announced plans to invest$65 million to construct an approximately 1.2 million square foot facility located near the City of Mebane in the County. The company anticipates the creation of 250 new jobs in its first five years, and Medline ultimately expects to employ up to 700 full time workers. Construction on the company's new facility began in fall 2019, and the facility opened in February 2021. The Board of County Commissioners approved the Research Triangle Logistics Park to be built at the southeastern corner of NC 86 and Interstate 40 in Hillsborough and is projected to begin construction in March 2024. The 2.4 million square foot research park project is aimed at attracting warehouse, light industry and research companies. The $150 million project could generate up to 1,500 jobs. In November 2019, Well Dot announced an expansion in the County. The company provides healthcare IT call center services, and will employ approximately 400 jobs. In November 2021, Thermo Fisher Scientific announced an investment of $192.5 million for a 375,000 square foot facility to manufacture precision pipette tips for laboratory, research and bioscience use employing up to 200 jobs with the potential for future expansion. The following table lists the ten largest employers in the County as of June 30,2023: Number of Percentage of Total Comp anX IndusLry Employ County Employ UNC Health Care Health Services 13,536 27.57% UNC Chapel Hill Higher Education 13,108 26.69 Chapel Hill-Carrboro City Schools Education 1,787 3.64 Orange County Government Public Administration 1,383 2.82 Orange County Schools Education 1,280 2.61 Town of Chapel Hill Public Administration 825 1.68 ABB (formerly General Electric) Manufacturing 805 1.64 AKG of America Manufacturing 430 0.88 Wegmans Grocery Services 372 0.76 Armacell Manufacturing 351 0.71 Source:Annual Comprehensive Financial Report of the County for the year ended June 30,2023. Construction activity in the County for the past five calendar years is indicated by the number and construction value of building permits as set forth in the following table: (Value in Thousands) Year Number Non-Residential Residential Total 2019 2,659 $31,543 $159,928 $191,471 2020 2,777 37,282 159,938 197,220 2021 2,602 11,045 168,388 179,433 2022 2,436 25,689 141,823 167,513 2023 2,640 25,347 182,138 207,485 2024' 2,194 8,452 142,178 150,631 1 For the months ended ,2024. The number of permits issued for the months ended 2023 were with a value for non-residential of$ and residential value of$ Source:County Permits and Inspections Division. Note:Does not include permits issued in Chapel Hill,Carrboro and Mebane. 29 102 Total taxable retail sales in the County for the past five fiscal years and for a portion of the current fiscal year are shown in the following table: Fiscal Year Taxable Increase Over Ended June 30 Retail Sales Previous Year 2019 $1,923,461,091 8.9% 2020 1,955,949,713 1.7 2021 2,149,246,638 9.9 2022 2,482,070,449 15.5 2023 2,788,217,449 12.3 2024' 1,936,695,378 -- Source:North Carolina Department of Revenue. 'For the eight months ended February 29,2024. Taxable sales for the eight months ended February 28,2023 were$1,856,590,265. Sales tax revenue of the County for past five fiscal years and for a portion of the current fiscal year is shown in the following table: Fiscal Year Sales Tax Increase Over Ended June 30 Revenue Previous Year 2019 $31,843,731 8.3% 2020 31,800,771 (0.1) 2021 36,008,088 14.5 2022 37,755,859 18.3 2023 43,396,780 14.5 2024' 31,866,417 -- Source: Annual Comprehensive Financial Reports of the County. For the eight months ended February 29,2024. Sales Tax Revenue for the eight months ended February 28,2023 was$ The Article 46 one-quarter cent sales tax (the "Article 46 Sales Tax") was approved by Orange County voters in a November 2011 referendum, and became effective April 1, 2012. A Special Revenue Fund was established to account for the Article 46 Sales Tax. The Article 46 Sales Tax was initially estimated to generate $2,500,000 annually. Article 46 sales tax revenue for the fiscal year ended June 30, 2023 was approximately $5.9 million, and the County has estimated Article 46 sales tax revenue for the fiscal year ended June 30,2024 to be approximately$ million. The Board of County Commissioners approved a ten-year commitment which authorized equal distributions of the one-quarter cent sales tax to support Schools and Economic Development. Fifty percent of the one-quarter cent sales tax is allocated to both County school systems on an average daily membership percent basis to fund capital projects. The other 50% is allocated to economic development initiatives including supporting water and sewer infrastructure funding in the County's three economic development districts. The County's other sales and use taxes(Articles 39,40,42,and 44 Sales Taxes)are reported in the County's General Fund and are included in the above table with Article 46 Sales Tax. The County's Articles 40 and 42 one-half cent local option sales and use taxes, which were authorized by the North Carolina General Assembly in 1983 and 1986, respectively, comprise significant funding sources for the County's school capital requirements and school debt retirement. 30 103 Employment The North Carolina Department of Commerce has estimated the percentage of unemployment in the County to be as follows: 2020 2021 2022 2023 2024 January 3.2% 4.6% 3.1% 3.0% 2.7% February 3.2 4.3 2.9 2.9 2.8 March 4.01 3.8 2.7 2.8 April 9.01 3.5 2.7 2.5 May 8.21 3.8 3.1 2.9 June 7.4 4.1 3.4 3.1 July 6.8 4.1 3.6 3.2 August 5.0 3.9 3.6 3.2 September 4.4 3.1 2.9 2.8 October 3.9 3.1 3.1 2.8 November 4.0 2.9 3.1 2.8 December 4.3 2.5 2.7 2.6 1 Layoffs began in March,April and May due to the COVID-19 pandemic. Note: Not seasonally adjusted. Source:N.C.Department of Commerce:Labor and Economic Analysis Division. The County's unemployment rate averaged 2.9% in 2023, as compared to 3.5% for the State and 3.6%for the United States. Government and Major Services Government Structure. The County has a commission-manager form of government with a seven- member Board of Commissioners comprising the governing body. The commissioners are elected on a partisan basis for staggered four-year terms.The County manager is appointed by and serves at the pleasure of the Board of Commissioners. The Board of Commissioners annually adopts a balanced budget and establishes a tax rate for the support of the County's programs. The County Manager has the responsibility of administering these programs in accordance with the policies and the annual budget adopted by the Board of Commissioners. Education. Two separate school administrative units, Chapel Hill-Carrboro City Schools ("CHCCS")and Orange County Schools("OCS"),provide public education in the County. CHCCS serves the Towns of Chapel Hill and Carrboro and a small area outside the Towns, and OCS serves the remainder of the County. CHCCS has the highest average SAT scores in the State for public school systems and its high schools have been recognized in national publications for their excellent academic performance. Non- partisan elected boards of education administer both units. The State pays for the basic minimum education program for each school administrative unit. Funding for this basic program is provided by appropriations from the State Public School Fund.Additional funding is provided by special State and federal grants. The County also appropriates funds to each school system, which provides for program expansions beyond the State basic minimum. The County has consistently maintained among the highest per pupil appropriations of any county in the State. A special school district tax is levied in CHCCS. This tax is a significant revenue source for the CHCCS system. (See the section"Tax Information"below.) The County Commissioners have adopted a policy of allocating approximately 50%of unrestricted locally-generated revenues to public school purposes. 31 104 The following table reflects average daily membership ("ADM")' and the number of schools for both OCS and CHCCS for the past five academic years. Chapel Hill-Carrboro City Schools Elementary Intermediate Secondary Grades K-5 Grades 6-8 Grades 9-12 School No. of No. of No. of Total Year Schools ADM Schools ADM Schools ADM ADM 2019-20 11 5,354 4 3,051 3 3,950 12,355 2020-21 11 4,893 4 2,912 3 3,932 11,737 2021-22 11 5,054 4 3,188 3 4,206 12,448 2022-23 11 4,657 4 2,794 3 3,918 11,369 2023-24 11 4,565 4 2,706 3 3,969 11,240 Orange County Schools Elementary Intermediate Secondary Grades K-5 Grades 6-8 Grades 9-12 School No. of No. of No. of Total Year Schools ADM Schools ADM Schools ADM ADM 2019-20 7 3,216 3 1,805 2 2,367 7,388 2020-21 7 3,047 3 1,654 2 2,381 7,082 2021-22 7 3,040 3 1,651 2 2,278 6,969 2022-23 7 3,056 3 1,601 3 2,409 7,066 2023-24 7 3,066 3 1,567 3 2,354 6,987 1 ADM or average daily membership,determined by actual records at the schools,is computed by the North Carolina Department of Public Instruction on a uniform basis for all public school units in the State. The ADM computations are used as a basis for teacher allotments. Note: Enrollment declines for FY 2020-21 reflect impacts from remote learning attributed to public health protocols to counter the COVID-19 pandemic.Additional factors include increases throughout the State in enrollment growth among private schools,public charter schools and homeschooling. Source: Orange County Board of Education and the Chapel Hill-Carrboro City Schools Board of Education Finance Offices. The County is home to two institutions of higher learning. The University of North Carolina at Chapel Hill is the flagship university in the State's 17 institution system and is consistently ranked one of the top public universities in the country. Enrollment at The University of North Carolina at Chapel Hill rose from 8,791 in 1960 to 31,705 for the 2022-23 academic year. The University is planning a new living and learning community in Chapel Hill, called Carolina North, which will occupy over 250 acres of land in the County. Durham Technical Community College is a public two-year accredited institution of higher education and technical training school primarily located in Durham, North Carolina that has a 20-acre Orange County campus located outside the Town of Hillsborough. Durham Tech serves more than 18,000 students and offers programs leading to over 110 degrees, certificates and diplomas. The County contributed $884,405 toward operating expenses of Durham Technical Community College in the fiscal year ended June 30, 2023 and has budgeted $975,346 toward such operating expenses for the fiscal year ended June 30, 2024. Additionally, the County is located within a one-hour drive of several other colleges and universities. These include Alamance Community College, Duke University, Elon University,High Point 32 105 University,North Carolina Agricultural and Technical State University,North Carolina Central University, North Carolina State University and the University of North Carolina at Greensboro. Transportation. Major expansion and maintenance of primary and secondary highways within the County are primarily the responsibility of the State.Municipalities within the County bear the responsibility for local street systems. The County has no responsibility for the construction or maintenance of streets or highways. The County is served by two interstate highways, which merge in the center of the County. Interstate Highway 85 connects the County to the cities of Greensboro, Charlotte and Atlanta to the south and west, and the cities of Durham, Richmond and Washington, D.C. to the north and east. Interstate Highway 40 connects the County to the cities of Winston-Salem, Greensboro and Asheville to the north and west, and the Research Triangle Park and the City of Raleigh to the south and east. Other major highways include U.S.highways 15-501 and 70 and N.C. highways 54, 57 and 86. The Town of Chapel Hill operates a local bus system that provides public transportation services to the Town and adjacent areas, including services to the Town of Carrboro and the University of North Carolina at Chapel Hill on a contractual basis. Effective January 1, 2002, the Town instituted the State's first fare free transportation system for passengers on all regular routes and services. Bus routes and stops are located so that 90% of all households are within one-quarter mile of a bus stop. The Town has established several park-ride lots on the perimeter of the Town to facilitate transportation in and out of the University and downtown area. The system operates 99 buses during weekday peak periods, and shared- ride, demand responsive programs to provide evening services. The bus system is the second largest transit system in the State by ridership,providing over seven million rides per year prior to COVID-19. The bus system is financed primarily with a special ad valorem tax levy,federal and State operating and capital assistance,and contractual contributions from the Town of Carrboro and the University. The Town receives federal operating assistance from the Federal Transit Administration and State operating assistance which combined equals about 30%of eligible operating costs for the system. Orange County Transportation Services offers a continuum of locally accessible transportation services, including pick-up and drop-off services for the elderly and disabled. The Hillsborough circulator connects major destinations throughout Hillsborough with hourly service Monday through Friday. This service is free to all passengers. In addition,Triangle Transit Authority operates a bus system that provides commuter services to County residents. Orange County Transportation Services was awarded$1.7 million in COVID-19 grant funding to support operating and capital requirements. Air transportation is provided by various major, commuter and commercial airlines at the Raleigh- Durham International Airport("RDU"), approximately ten miles from the County. RDU is serviced by ten major airlines and 8 regional airlines. Approximately 14.5 million people boarded or deplaned aircraft at this airport in calendar year 2023, as compared to 11.8 million passengers in calendar year 2022. RDU currently has non-stop service to 47 domestic and 10 international destinations. Rail freight service is provided by Norfolk Southern Railway. Railway passenger service is provided by Amtrak through its terminals located in Durham, Cary and Raleigh. Human Services Social Services Programs. Social Services programs are provided for by a combination of federal, state and local funds. Among the programs provided are: Work First, Temporary Aid to Needy Families 33 106 Child Protective Services, Daycare Administrative, Foster Care, Energy Assistance, Medicaid, Child Support Enforcement and programs for the elderly. The Department of Social Services has received $318,680 in COVID-19 Grants to support various human service requirements. Housing Programs. The Department of Housing and Community Development has been awarded $8.7 million in CARES Rounds 1 and 2 funds, CDBG-CV, ESG-CV, HUD and NCORR Hope grants. These funds have supported the County's Housing Stabilization programs which include emergency rental assistance, eviction mitigation, housing vouchers and landlord incentives. The County has coordinated its housing response with the Towns of Carrboro, Chapel Hill and Hillsborough. Health Programs. The County provides environmental, sanitation, family planning, dental and nursing services throughout the County. Clinics are offered in the towns of Hillsborough and Chapel Hill and in the public schools. The County has access to the services of the schools of medicine, dentistry, nursing and public health at The University of North Carolina at Chapel Hill and the University Hospitals, as well as Duke University Medical Center and a U.S. Veterans Administration Hospital within five miles of the County. No County investment in hospital or major medical facilities is anticipated. The County Health Department received $1.4 million in COVID-19 funds to support contact tracing and vaccine distribution throughout the County. Mental Health Programs. The County currently provides funding for mental health, development disabilities, and substance abuse services through Alliance Healthcare, a Managed Care Organization. On February 16, 2021, the Board of Commissioners approved a Local Management Entities/Managed Care Organizations (LME/MCO)Disengagement Plan to transition the management of Medicaid and uninsured behavioral health and intellectual/developmental disability (I/DD) services from Cardinal Innovations Healthcare to Alliance Healthcare. The County, Alliance Healthcare and Cardinal Innovations Healthcare are implementing a Continuity of Services Plan to ensure a seamless transition for stakeholders. The transition to Alliance became effective January 1,2022. Other Human Services.In addition to social service,health and mental health programs,the County provides agricultural services, housing and community development services, library services aging services, criminal justice resources and support to various private non-profit agencies located within the County. Parks, Recreation and Open Space. The North Carolina Department of Natural and Cultural Resources works to conserve and manage the natural and cultural resources of the County. Included within this "green infrastructure" are natural areas and nature preserves, open spaces, parks and recreation facilities,water resources, and agricultural and resource lands.Programs ranging from athletics to fine arts are offered to residents of all ages at several park sites and community centers. Public Service Enterprises Water and Sewer Services.Water and sewer services are provided to the majority of the population of the County by the Orange Water and Sewer Authority (the "Authority"). The Authority was created in 1975 by the Board of Commissioners for the County and the boards of aldermen of the towns of Chapel Hill and Carrboro for the purpose of acquiring, consolidating, improving, and operating the existing water and sewer systems in the southern portion of the County. Prior to the formation of the Authority, water service was provided by the University of North Carolina at Chapel Hill and the Town of Carrboro and sewer service was provided by the towns of Chapel Hill and Carrboro in conjunction with the University. The Authority began utilities operations in 1977 when the Towns of Chapel Hill and Carrboro and the University of North Carolina at Chapel Hill conveyed their water and sewer facilities to the Authority. 34 107 Under the terms of the transfer, the Authority provides and maintains sewage collection and treatment facilities and water supply,treatment and distribution facilities. The Town of Hillsborough and the City of Mebane, which is partly located within the corporate limits of the County,also own and operate water and sanitary sewer systems. The County issued water and sanitary sewer bonds in the late 1960s to finance the construction of the Lake Orange reservoir, which serves the water system of the Town of Hillsborough, and the construction of improvements which serve the water and sanitary sewer systems of the City of Mebane. In addition, the Orange Alamance Water System, a private corporation,utilizes Lake Orange and provides water service to a part of the west central portion of the County. The County's water supply has been supplemented by the addition of the Cane Creek Reservoir, which was built by the Authority in 1989. Increased water supply has also resulted from the renovations to the dam at Lake Orange,which is owned by the County. Sanitary Landfill.The County owned and operated a sanitary landfill serving County residents until that landfill closed in June 2013. On July 1,2013,the County entered into an interlocal agreement with the nearby City of Durham,North Carolina, for certain solid waste purposes. The City of Durham has agreed to allow the County to deliver solid waste to a City-operated transfer station in Durham. The agreement provides the opportunity to renew the agreement upon written execution by both parties. The County continues to evaluate other options for solid waste disposal. Other Public Service Enterprises. Telephone service in the County is provided by Sprint, BellSouth,Mebtel and Verizon Communication.Electric service is provided by Duke Energy and Piedmont Electric Membership Corporation. Gas service is provided by Dominion Energy. Other Services. Fire and police protection are provided by the Towns of Chapel Hill, Carrboro, Hillsborough and Mebane within their respective jurisdictions. In the unincorporated areas of the County fire protection is provided in 12 fire districts pursuant to contracts between the County, the municipalities and various fire departments.Police protection in the unincorporated areas of the County is provided by the County Sheriff's Department. The County's Emergency Services Department provides four general areas of countywide emergency assistance, emergency communications (911), emergency medical services, fire marshal and emergency management. Volunteer rescue squads work jointly with the County to provide a significant amount of such services. DEBT INFORMATION Legal Debt Limit In accordance with the provisions of the State Constitution and The Local Government Bond Act, as amended, the County had the statutory capacity to incur additional net debt in an approximate amount of$1.5 billion as of June 30,2023. Outstanding General Obligation Debt General Obligation Bonds June 30,2020 June 30,2021 June 30,2022 June 30,2023 School Bonds $110,360,000 $109,450,000 $120,435,000 $114,255,000 Refunding Bonds 20,080,000 14,550,000 7,815,000 2,560,000 35 108 Other Bonds 560,000 -- -- -- Total Outstanding Debt $131,000,000 $124,000,000 $128,250,000 $116,815,000 General Obligation Debt Ratios Total GO Debt Total GO Total Outstanding Assessed To Assessed Debt June 30, GO Debt Valuation Valuation Population) Per Capita 2019 $125,740,000 $18,681,613,587 0.67% 145,574 $863.75 2020 131,000,000 18,956,491,582 0.69 148,613 881.48 2021 124,000,000 19,449,954,413 0.64 148,331 835.97 2022 128,250,000 21,944,533,529 0.58 148,707 862.43 2023 116,815,000 22,421,502,597 0.52 148,7072 785.54 1 Estimate of North Carolina Office of State Budget and Management. 2 2022 population estimate. General Obligation Debt Service Requirements and Maturity Schedule as of June 30,2023 Outstanding GO Debt Fiscal Year Principal and Ending June 30, Principal Payment Interest Payment 2024 $9,470,000.00 $13,844,575 2025 6,910,000.00 10,843,975 2026 6,910,000.00 10,498,475 2027 6,910,000.00 10,154,850 2028 6,910,000.00 9,811,225 2029 6,910,000.00 9,496,058 2030 6,910,000.00 9,232,313 2031 6,910,000.00 9,002,163 2032 6,900,000.00 8,733,538 2033 6,900,000.00 8,474,025 2034 6,895,000.00 8,242,660 2035 6,895,000.00 8,031,310 2036 6,895,000.00 7,816,275 2037 6,895,000.00 7,596,661 2038 6,895,000.00 7,374,525 2039 5,425,000.00 5,691,219 2040 1,850,000.00 2,005,375 2041 1,850,000.00 1,952,000 2042 850,000.00 909,250 2043 725,000.00 754,000 Total $116,815,000.00 $150,464,470 Note:Totals may not foot due to rounding. 36 109 General Obligation Debt Information for Underlying Units as of June 30,2023 2022 Assessed' Tax Rate Bonds Authorized and Total GO Total GO Debt Unit Population' Valuation Per 100 Unissued Debt' Per Capita Carrboro 21,136 $2,848,373,576 .6044 -- $2,100,000 $99.36 Chapel Hill 62,195 9,514,586,959 .5220 $24,045,000 47,516,000 763.98 Hillsborough 9,902 1,584,586,675 .5870 -- -- -- Mebane' 19,338 2,860,603,424 .4700 -- -- -- 'Estimates of North Carolina Office of State Budget and Management. 2 Does not include installment financing agreements,revolving loans and revenue bonds as these obligations are not general obligations. 'Approximately 19%of this population resides in Orange County and 81%resides in Alamance County. Other Long-Term Commitments The County currently has a variety of financing agreements for vehicles and other equipment.In addition, the County has financed school, public buildings, landfill and water and sewer projects through installment financing agreements which, as of June 30, 2023, had a combined principal balance of approximately$190.79 million. Annual requirements to service these obligations are as follows: Fiscal Year Landfill and Sportsplex Governmental Purposes Totals Ending Principal Principal Principal June 30 Principal and Interest Principal and Interest Principal and Interest 2024 $ 1,268,590 $1,594,130 $18,406,468 $24,320,036 $19,675,058 25,914,166 2025 1,131,406 1,412,446 18,444,652 23,913,150 19,576,058 25,325,596 2026 1,028,216 1,267,508 16,286,081 21,083,655 17,314,297 22,351,163 2027 1,227,576 1,420,918 16,993,423 21,068,209 18,220,999 22,489,127 2028 750,577 905,045 12,219,422 15,706,148 12,969,999 16,611,193 2029-2033 2,460,542 2,927,708 47,225,459 58,947,289 49,686,001 61,874,997 2034-2038 1,452,000 1,616,135 31,469,000 36,754,833 32,921,000 38,370,968 2039-2043 419,000 441,989 20,008,000 21,212,544 20,427,000 21,654,533 TOTALS $9,737,907 11,585,879 $181,052,505 $223,005,864 $190,790,412 $234,591,743 Debt Outlook The County has an extensive ten-year capital improvement program underway to provide public safety, school facilities, government facilities, affordable housing, and park improvements. The County's program will be funded through bond proceeds, installment financing proceeds, and pay-as-you go funds for specific County capital projects as identified in its long-term debt model. The County Manager's recommended ten-year capital investment program contemplates total borrowings of approximately$631.4 million including$13 million in Limited Obligation Bonds in fiscal year 2024 and$300 million in pending voter approval of Referendum General Obligation Bonds for both school districts beginning in fiscal year 2027. The County has factored in an estimated future tax rate increases of 8.88 [percent?][cents?] in FY2025-26 to fund the capital program. TAX INFORMATION General Information Fiscal Year Ended or Ending June 30, 2020 2021 2022 2023 Assessed Valuation 37 110 Assessment Ratio' 100% 100% 100% 100% Real Property $16,974,899,491 $17,333,962,055 $19,776,883,656 $20,915,506,497 Personal Property 1,726,673,593 1,769,659,485 1,884,947,740 1,504,996,150 Public Service Companies2 337,564,917 346,332,873 364,879,155 386,793,191 Less Tax-Exempt Property (82,646,419) (77,934,293) (82,177,022) (81,256,223) Total Assessed Valuation $18,956,491,582 $19,449,954,413 $21,944,533,529 $22,421,502,597 Tax Rate per$1003 0.8679 0.8679 0.8187 0.8312 Levy $ 164,884,700 $ 168,893,588 $ 179,742,965 $ 186,464,351 1 Percentage of appraised value has been established by statute. 2 Valuation of railroads,telephone companies and other utilities as determined by the North Carolina Property Tax Commission. 3 Revaluation of real property became effective with the 2021-22 tax levy.Real property was previously reappraised for 2017-18 and the next appraisal will be effective in 2025-26. In addition to the County-wide rate shown in the previous chart, all taxable property within the Chapel Hill-Carrboro City School Administrative Unit is subject to a special school district tax. The special school district tax rates per$100 assessed valuation for the past five fiscal years are as follows: Fiscal Year Ended or Ending June 30, 2019 2020 2021 2022 2023 Special School District Chapel Hill-Carrboro City Schools $.2018 $.2018 $.2018 $.1830 $.1830 Special Fire Districts. Most property in the unincorporated portions of the County is also subject to an additional tax rate for one of the 12 fire districts,which range from$0.09092 to$0.16693 for the fiscal year ending June 30,2023. Tax Collections Fiscal Year Prior Year's Current Year's Percentage Ended June 30, Levy Collections Levy Collections Collected 2019 $967,983 $157,743,510 99.14% 2020 805,605 163,403,993 99.10 2021 853,760 167,481,534 99.16 2022 952,893 178,314,181 99.21 2023 - 185,261,931 99.36 2024' 188,300,309 1 For the nine months ended March 31,2024. For the nine month period ended March 31,2023,current year levy collections were Source:Annual Comprehensive Financial Report of the County for fiscal year ended June 30,2023. Ten Largest Taxpayers for the Fiscal Year ended June 30, 2023 Percentage Assessed of Assessed Name Type of Enterprise Valuation Value Duke Energy Carolina LLC Public Utility $188,387,969 0.84% Chapel Hill Foundation Real Estate Holdings Inc Apartments/Retail 112,650,500 0.50 Mre Propco LP (Medline) Industrial 86,510,700 0.39 BIR Chapel Hill LLC Apartments/Retail 80,124,700 0.36 38 111 Percentage Assessed of Assessed Name Type of Enterprise Valuation Value NR Edge Apartments Property Apartments/Retail 78,566,982 0.35 Piedmont Electric Membership Public Utility 70,666,044 0.32 Northwestern Mutual Life Insurance Co. Apartment Rentals 68,794,458 0.31 Townhouse Apartments Apartment Rentals 67,581,700 0.30 Industrial Connections& Solutions LLC (ABB) Office/Industrial 60,899,638 0.27 State Employees Credit Union Bank 57,475,536 0.26 $871,658,227 3.90% Source:Annual Comprehensive Financial Report of the County for fiscal year ended June 30,2023. FISCAL YEAR 2023-24 BUDGET COMMENTARY The adopted General Fund budget for fiscal year 2023-24 totals $279.5 million, which represents a $21.4 million or 8.2% increase over the fiscal year 2022-23 adopted budget. The County budget factors in a .46 cent increase from 83.12 cents to 83.58 cents per $100 of assessed value to fund the County and School continuation budgets. The County is on a four-year revaluation cycle. The next revaluation will be effective January 1,2025 for fiscal year 2025-26. The fiscal year 2023-24 budget assumed a 2.1%increase in assessed value with the tax base increasing from$22.2 billion to$22.9 billion or over the prior year.The real and personal collection rate is budgeted to remain the same at 99.2%. The County budget maintains a goal of allocating 48.1% of General Fund revenues to education spending. The budget increases per pupil expenditures by$538.46 to$5,346 which has consistently been among the highest per pupil appropriations in the State. The fiscal year 2023-24 appropriations represents 48.07%of total General Fund revenues.The budget appropriates$3.8 million to fund school health and safety contractual services.The fiscal year 2023- 24 budget fully funds all positions of the County and includes a 6%wage increase effective July 1,2023 at a cost of$4.4 million. Property tax revenues comprise $190.7 million or 68% of General Fund revenues. Sales tax revenues comprises 16%of the budget and has been budgeted to increase 4%over the fiscal year 2022-23 projections. The remaining 16% of General Fund revenues are comprised of intergovernmental revenues,charges for services, licenses and permits, and miscellaneous revenues. CYBERSECURITY The County, like many other large public and private entities, relies on a large and complex technology environment to conduct its operations and faces multiple cybersecurity threats involving, but not limited to, hacking, phishing viruses, malware and other attacks on its computing and other digital networks and systems (collectively, "Systems Technology"). As a recipient and provider of personal, private, or sensitive information, the County may be the target of cybersecurity incidents that could result in adverse consequences to the County and its Systems Technology,requiring a response action to mitigate the consequences. The County has hired a Security Officer that dual reports to the County Manager and Chief Investment Officer. The County deploys regular training to all County employees throughout the year. Orange County IT takes a multi-layered approach regarding enterprise security and data loss prevention to protect against internal and external threats. ■ Perimeter security is handled by employing state of the art firewall(s), and intrusion detection and prevention systems as well as email scanning prior to email being delivered to county servers for processing. 39 112 ■ Multifactor authentication is used for user device access to network resources. ■ VPN and virtual desktop technologies are deployed for secure and managed remote access. ■ The principal of least privilege access is used for all uses both common and administrative. ■ Beyond the perimeter all network traffic is monitored north, south, east and west. Appropriate alerts are configured for anomalous behavior. ■ Network traffic is segmented to prevent the risk of cross contamination during security events. ■ Multiple security incident/information and event management strategies are used, i.e., SIEM technology to monitor server and device events. ■ File level access and permissions are systematically audited on access to comply with various compliance and standards requirements.. ■ Along with typical nightly, weekly and monthly backups routines, data is sent off site and database data is stored immutably in the cloud. ■ Next Generation end point detection and response is deployed across the enterprise with dedicated third-party staff reviewing incidents as they occur, 24 hours per day, 365 days per year. Orange County Information Technologies' multi-layered approach includes mandatory security training for all employees that access the network as well as having an IT Security Officer to review and create appropriate security policies and procedures. PENSION PLANS The County participates in the North Carolina Local Governmental Employees'Retirement System (the "LGERS"). The North Carolina Local Governmental Employees' Retirement System is a service agency administered through a board of trustees(the"Board of Trustees")by the State for public employees of counties,cities,boards,commissions and other similar governmental entities. While the State Treasurer is the custodian of system funds,administrative costs are borne by the participating employer governmental entities. The State makes no contributions to the system. The system provides, on a uniform system-wide basis, retirement and, at each employer's option, death benefits from contributions made by employers and employees. Employee members contribute six percent of their individual compensation. Each new employer makes a normal contribution plus, where applicable,a contribution to fund any accrued liability over a 24-year period. The normal contribution rate, uniform for all employers for fiscal year 2022-23, was 12.14% of eligible payroll for general employees and 13.24% of eligible payroll for law enforcement officers ("LEO"). The normal contribution rate, uniform for all employers for fiscal year 2023-24, is 12.89%of eligible payroll for general employees and 14.04% of eligible payroll for LEOs. The accrued liability contribution rate is determined separately for each employer and covers the liability of the employer for benefits based on employees' service rendered prior to the date the employer joins the system. Additional rates,such as rates associated with death benefits or past service liabilities,will be added to the base rate to determine the actual contribution percentage for each employer. 40 113 Members qualify for a vested deferred benefit at age 50 with at least 20 years of creditable service; at age 60 after at least five years of creditable service to the unit of local government. Unreduced benefits are available: at age 65, with at least five years of service; at age 60, with at least 25 years of creditable service; or after 30 years of creditable service,regardless of age. Benefit payments are computed by taking an average of the annual compensation for the four consecutive years of membership service yielding the highest average. This average is then adjusted by a percentage formula, by a total years of service factor, and by an age service factor if the individual is not eligible for unreduced benefits. Contributions to the system are determined on an actuarial basis. For information concerning the County's participation in the North Carolina Local Governmental Employees' Retirement System and the Supplemental Retirement Income Plan of North Carolina see the Notes to the County's Audited Financial Statements in Appendix B. Financial statements and required supplementary information for LGERS are included in the Annual Comprehensive Financial Report ("ACFR") for the State. Please refer to the State's ACFR for additional information. OTHER POST-EMPLOYMENT BENEFITS The County administers a single employer defined benefit Retiree Healthcare Benefits Plan. This plan provides post-employment health care benefits to retirees of the County. A Permanent Employee employed on or before June 30,2012 and who commences retirement and meets the following conditions receives an annual retirement medical allowance. A participant must be eligible and approved to receive retirement benefits in accordance with the regulations of the North Carolina Local Government Employees Retirement System and meet one of the following conditions: 1) A minimum of ten years of service with the County, 2) Age 65 with a minimum of five years of service with the County,or 3) Disabled retirement with a minimum of five years of service with the County. A Permanent Employee employed after June 30, 2012 and who commences retirement and meets the following conditions receives an annual retirement medical allowance. A participant must be eligible and approved to receive retirement benefits in accordance with the regulations of the North Carolina Local Government Employees Retirement System and meet one of the following conditions: 1) A minimum of 20 years of service with the County, 2) Age 65 with a minimum of ten years of service with the County, or 3) Disabled retirement with a minimum of ten years of service with the County. The County contributes to the cost of health insurance premiums for both non-Medicare eligible retirees and Medicare eligible retirees based on the years of service with Orange County using the following schedule: If hired on or before June 30,2012: Years of Service at Retirement Age at Retirement County Contribution 10 or more Any Age 100% 5-9 65 50% If hired after June 30,2012: 41 114 Years of Service at Retirement Age at Retirement County Contribution 20 or more Any Age 100% 10-19 65 50% Per resolution, the County is required to contribute the projected pay-as-you financing requirements, with an additional amount to prefund benefits as determined annually by the Board. Benefit payments by the County were$3,529,472 for the fiscal year ended June 30,2023. The Annual OPEB Cost (AOC) is equal to the Annual Required Contribution (ARC), one year's interest on the Net OPEB Obligation, and an adjustment to the ARC to offset the effect of actuarial amortization of past under or over contributions. The County funds its OPEB healthcare benefits on a pay as you go basis as part of the annual budget process.The County paid$3,529,472 in OPEB benefits in fiscal year 2023,and has budgeted approximately $3,089,464 for benefit payments in fiscal year 2024. In addition to these annual payments, the County has reserved approximately $8.2 million of committed fund balance toward its OPEB obligations. The County has also established an irrevocable trust for OPEB benefits that contains approximately$[381,735]. The following table presents additional information on the County's OPEB liabilities. Measurement Net OPEB NOL as % of Date Liability(NOL) Covered Payroll June 30, 2023 $120,541,187 231.2% June 30,2022 132,374,775 238.2 June 30,2021 161,449,960 290.5 GASB 74 requires the presentation of the Net OPEB Liability ("NOL") effective as of June 30, 2017. The GASB 74 required NOL actuary methodology and assumptions results in a higher liability than the unfunded actuarial accrued liability("UAAL"). CONTINGENT LIABILITIES The County is not aware of any contingent liabilities that it expects would materially adversely affect its ability to meet its financial obligations. 42 115 APPENDIX B MANAGEMENT'S DISCUSSION AND ANALYSIS AND THE BASIC FINANCIAL STATEMENTS OF ORANGE COUNTY,NORTH CAROLINA 116 [THIS PAGE INTENTIONALLY LEFT BLANK] 117 Management's Discussion and Analysis The Management's Discussion and Analysis of the financial activities of the County, lifted from the Annual Comprehensive Financial Report for the County for the fiscal year ended June 30, 2023, 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-1 118 Financial Information The financial statements of the County have been audited by certified public accountants for the fiscal year ended June 30, 2023. 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 131 West Margaret Lane, Third Floor,PO Box 8181,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 Annual Comprehensive Financial Report of the County for the fiscal year ended June 30, 2023. B-2 119 APPENDIX C SUMMARY OF PRINCIPAL LEGAL DOCUMENTS 120 [THIS PAGE INTENTIONALLY LEFT BLANK] 121 APPENDIX D FORMS OF OPINIONS OF BOND COUNSEL 122 [THIS PAGE INTENTIONALLY LEFT BLANK] 123 APPENDIX E BOOK-ENTRY ONLY SYSTEM 124 [THIS PAGE INTENTIONALLY LEFT BLANK] 125 APPENDIX E BOOK-ENTRY ONLY SYSTEM Beneficial ownership interests in the 2024 Bonds will be available only in a book-entry system. The actual purchasers of the 2024 Bonds (the `Beneficial Owners") will not receive physical certificates representing their interests in such 2024 Bonds purchased. So long as The Depository Trust Company ("DTC"), New York, New York, or its nominee is the registered owner of the 2024 Bonds, references in this Official Statement to the Owners of the 2024 Bonds shall mean DTC or its nominee and shall not mean the Beneficial Owners of the 2024 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 2024 Bonds, payment of interest and other payments with respect to the 2024 Bonds to DTC Participants or to beneficial owners, confirmation and transfer of beneficial ownership interests in the 2024 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 2024 Bonds. The 2024 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 2024 Bonds will be deposited with DTC or its designee. So long as Cede&Co. is the registered owner of the 2024 Bonds, as DTC's Partnership nominee, reference herein to the Owners or registered owners of the 2024 Bonds shall mean Cede & Co. and shall not mean the beneficial owners of the 2024 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 2024 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for 2024 Bonds on DTC's records. The ownership interest of each actual E-1 126 purchaser of the 2024 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 2024 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners of such 2024 Bonds. Beneficial Owners will not receive certificates representing their ownership interests in 2024 Bonds, except in the event that use of the book-entry system for such 2024 Bonds is discontinued. To facilitate subsequent transfers, all 2024 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 2024 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 2024 Bonds;DTC's records reflect only the identity of the Direct Participants to whose accounts such 2024 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 2024 Bonds may wish to take certain steps to augment transmission to them of notices of significant events with respect to such 2024 Bonds, such as redemptions, defaults and proposed amendments to the security documents. For example, Beneficial Owners of the 2024 Bonds may wish to ascertain that the nominee holding such 2024 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 2024 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 2024 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 2024 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 2024 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 2024 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 2024 Bonds that may be transmitted by or through DTC. Principal,premium, if any, and interest payments on the 2024 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 E-2 127 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 2024 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 2024 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 2024 Bonds,or the sending of any amount due to any beneficial owner in respect to the 2024 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 2024 Bonds; or(5) any consent given or other action taken by DTC or its nominee as the registered owner of the 2024 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-3 128 Attachment 5 ORANGE COUNTY,NORTH CAROLINA $ LIMITED OBLIGATION BONDS, SERIES 2024A $ TAXABLE LIMITED OBLIGATION REFUNDING BONDS, SERIES 2024B BOND PURCHASE AGREEMENT June , 2024 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 FHN 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 5:00 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 2024A(the"2024A Bonds") and the $ aggregate principal amount of the County's Taxable Limited Obligation Refunding Bonds, Series 2024B (the "2024B Bonds" and, together with the 2024A Bonds, 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 2024A Bonds shall be $ (representing the principal amount of the 2024A Bonds, plus [net] original issue premium of $ , and less underwriters' discount of$ ) and the purchase price for the 2024B Bonds shall be $ (representing the principal amount of the 2024B Bonds, less underwriters' discount of $ ) (collectively, 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 1,2021 (the"2021 Trust Agreement"),and a Second Supplemental Trust Agreement dated as of June 1, 2024 (the "Second Supplemental Trust Agreement" and, together with the 2021 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 May_, 2024 (the "Approving Resolution"). As security for 129 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"), for the benefit of the Trustee, a Deed of Trust Supplement #2 dated as of June 1, 2024 (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; Offeriniz. 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 2024A 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 2024A Bonds. (b) [Except as otherwise set forth in Exhibit B attached hereto,] the County will treat the first price at which 10% of each maturity of the 2024A 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 2024A Bonds. If at that time the 10%test has not been satisfied as to any maturity of the 2024A Bonds, Baird agrees to promptly report to the County the prices at which it sells the unsold 2024A 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 2024A Bonds of that maturity or until all 2024A Bonds of that maturity have been sold to the public. (c) [Baird confirms that the Underwriters have offered the 2024A 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 2024A 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 2024A Bonds, the Underwriters will neither offer nor sell unsold 2024A Bonds of that maturity to any person at a price that is higher than the initial -2- 130 offering price to the public during the period starting on the sale date and ending on the earlier of the following: (1) the close of the fifth(5"`)business day after the sale date; or (2) the date on which the Underwriters have sold at least 10%of that maturity of the 2024A 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 2024A 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 2024A 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 2024A Bonds of each maturity allotted to it until it is notified by Baird that either the 10% test has been satisfied as to the 2024A Bonds of that maturity or all 2024A 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 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 2024A 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 2024A 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 2024A Bonds. (e) The Underwriters acknowledge that sales of any 2024A 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 2024A 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 2024A 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 2024A Bonds to the public), iii. a purchaser of any of the 2024A 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 -3- 131 another),(ii)more than 50%common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or(iii)more than 50%common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and iv. "sale date" means the date of execution of this Bond Purchase Agreement by all parties. (4) Official Statement. The County hereby ratifies and approves the Preliminary Official Statement dated June_, 2024 (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 -4- 132 consummate the transactions contemplated hereby and by the Official Statement (the Bonds, this Bond Purchase Agreement, the Trust Agreement, the Modified Deed of Trust and such other agreements and documents being collectively referred to herein as the"County Documents"), and(iii)the authorization of the use and distribution of the Official Statement. (d) The Approving Resolution was duly adopted at a meeting of the Board of Commissioners of the County called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and is in full force and effect and has not been amended or repealed. (e) This Bond Purchase Agreement,the Trust Agreement,the Modified Deed of Trust and any other instrument or agreement to which the County is a party in connection with the consummation of the transactions contemplated by the foregoing documents, when executed and delivered by the parties thereto, and assuming such documents are enforceable against the 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 2024A 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- 133 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 30,2023, 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 30,2023, 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- 134 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 June_, 2024, 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 securities -7- 135 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, or of the Trust Indenture -8- 136 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- 137 (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, 2023, 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)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 (F) 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 2024A Bonds and ready for filing; (xiii) A tax certificate of the County in form and content reasonably satisfactory to the Underwriters; (xiv) Evidence that Moody's, S&P and Fitch have issued ratings for the Bonds of not less than" ""_"and"_",respectively; and -10- 138 (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 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 -11- 139 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 parry.Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified parry in an action,the indemnified parry 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 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 -12- 140 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 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 -13- 141 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. [Remainder of Page Intentionally Left Blank] -14- 142 Very truly yours, ROBERT W.BAIRD & CO.INCORPORATED, on its own behalf and on behalf of FHN 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—Orange County 2024 LOBs] 143 EXHIBIT A Terms of the Bonds Principal Amounts,Interest Rates and Prices—2024A Bonds Maturity Date (October 1) Principal Amount Interest Rate Yield Price $ %Term Bonds due October 1,20_,Yield: %*,Price: Principal Amounts,Interest Rates and Prices—2024B Bonds Maturity Date (October 1) Principal Amount Interest Rate Yield Price Redemption Provisions [to be inserted] *Yield to October 1,20 call date at par. A-1 144 EXHIBIT B Orange County,North Carolina Limited Obligation Bonds, Series 2024A ISSUE PRICE CERTIFICATE The undersigned, on behalf of Robert W. Baird & Co. Incorporated ("Baird"), on behalf of itself and FHN 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 (June_, 2024), 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-1 145 (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 June_, 2024. (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-2 146 ROBERT W.BAIRD & CO.INCORPORATED, on its own behalf and on behalf of FHN Financial Capital Markets By: Ryan Maher,Managing Director Dated: June , 2024 B-3 147 Schedule A Sale Prices of the [Bonds][General Rule Maturities and Initial Offering Prices of the Hold-the-Offering Price Maturities] Sale Prices of the General Rule Maturities Maturity Date (October 1) Principal Amount Interest Rate Price Initial Offering Prices of the Hold-the-Offering Price Maturities Maturity Date (October 1) Principal Amount Interest Rate Price B-4 148 [Schedule B Pricing Wire or Equivalent Communication (Attached)] B-5 149 Attachment 6 s*h draft of May 9 Prepared by and return after recording to: Robert M. Jessup Jr. Sanford Holshouser LLP 209 Lloyd St., Suite 350 Carrboro, NC 27510 STATE OF NORTH CAROLINA ) LEASE MODIFICATION ORANGE COUNTY ) PINS and brief descriptions: 9875-21-0552 Orange Middle School -- 308 Orange High School Road, Hillsborough 9864-78-3471 Hillsborough Elementary School - 402 North Nash Street, Hillsborough 9872-75-5904 New Hope Elementary- 1900 New Hope Church Road, Chapel Hill 9865-99-3002 Pathways Elementary- 431 Strouds Creek Road, Hillsborough 9875-12-5819 Orange High School - 500 Orange High School Road, Hillsborough Modifies Book 6818, Page 1070 THIS LEASE MODIFICATION is dated as of June 1, 2024, and is entered into by and between ORANGE COUNTY, NORTH CAROLINA, as lessor (the "County"), and THE ORANGE COUNTY BOARD OF EDUCATION, as lessee (the "School Board"). This Modification modifies and amends the Lease dated as of June 13, 2023, and recorded at Book 6818, Page 1070, Orange County Registry (the "Original Lease"). The County is the record owner of the property subject to the Original Lease and this 150 Modification. This Modification affects all and only the property subject to the Original Lease. Introduction The County and the School Board have previously agreed to cooperate in a plan to finance, construct and equip improvements to various schools administered by the School Board, including the schools referenced above.The parties entered into the Original Lease to facilitate the County's financing improvements to the schools. The County has asked the School Board to modify the Original Lease to extend its term,to facilitate an additional financing transaction contemplated by the County. In connection with its financing,the County is entering into a Second Supplemental Trust Agreement dated as of June 1, 2024 (the "2024 Trust Agreement"). The County is similarly entering into a Deed of Trust Modification #2, also dated as of June 1, 2024 (the "Deed of Trust"), to secure the County's repayment obligations under the 2024 Trust Agreement. The School Board has agreed to subordinate its leasehold interest to the 2024 Deed of Trust, just as the School Board subordinated its interest to the deed of trust delivered by the County in connection with the originally referenced financing. NOW THEREFORE, for and in consideration of the Mutual promises contained in this Lease. the parties agree as follows: 1. Definition. The term "Modified Lease" means the Original Lease as modified by this Modification. All other capitalized terms used in this Modification and not otherwise defined have the meanings ascribed in the Original Lease. 2. Change to Lease Term. Section 3.2(c) of the Original Lease is hereby amended to read as follows, in order to extend the expected Lease Term. 3.2. Termination. [subparagraphs (a) and (b) intentionally omitted] (c) The date that is 30 days after October 1, 2044, which is the scheduled date for the County's final payment under the "2024 Trust Agreement," as defined below, except that the Lease Term ends immediately 2 151 upon the termination of the 2024 Trust Agreement if the 2024 Trust Agreement is terminated following an event of default by the County under the 2024 Trust Agreement. The"2024 Trust Agreement"means the Second Supplemental Trust Agreement dated as of June 1, 2024, between the County and a corporate trustee. Termination of the Lease Term terminates all the County's obligations under the Modified Lease, and terminates the School Board's rights of possession under the Modified Lease; but all other provisions of the Modified Lease, including the receipt and disbursement of funds, shall continue until the 2024 Trust Agreement is discharged as provided therein. 3. Priority of 2024 Deed of Trust. Notwithstanding anything in the Modified Lease to the contrary, the School Board's rights to possession of the Leased Property and all its other rights under the Modified Lease are subordinate to the rights of the beneficiary under the 2024 Deed of Trust. Any judicial sale of, or foreclosure on, the Leased Property pursuant to the 2024 Deed of Trust terminates all the School Board's rights under the Modified Lease. 4. Confirmation of Remaining Lease Terms. Except as provided by this Agreement, the parties ratify, approve and confirm the terms of the Original Lease. [The remainder of this page has been left intentionally blank.] 3 152 IN WITNESS WHEREOF, the parties hereto have caused this Lease Modification to be signed in their corporate names and delivered by their duly authorized officers, all as of June 1, 2024. [SEAL] ORANGE COUNTY, ATTEST: NORTH CAROLINA By: Laura Jensen Bonnie Hammersley Clerk, Board of Commissioners County Manager [SEAL] THE ORANGE COUNTY ATTEST: BOARD OF EDUCATION By: Anne Purcell Danielle Jones Chair Secretary This instrument has been preaudited in the manner required by The Local Government Budget and Fiscal Control Act. Gary Donaldson Finance Officer Orange County, North Carolina 4 153 STATE OF NORTH CAROLINA; ORANGE COUNTY I, , a Notary Public of said State and County, do hereby certify that Bonnie Hammersley and Laura Jensen 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 seal this day of June, 2024. Notary Public My commission expires: STATE OF NORTH CAROLINA; ORANGE COUNTY I, , a Notary Public of said State and County, do hereby certify that Danielle Jones,with whom I am personally acquainted,who,being by me duly sworn, says that she is the Secretary of The Orange County Board of Education and that Anne Purcell is the Chair of such Board of Education, the Board described in and which executed the foregoing instrument; that she knows the common seal of said Board; that the seal affixed to the foregoing instrument is said common seal, and the name of the Board was subscribed thereto by the said Chair, and that said Chair and Secretary subscribed their names thereto, and said common seal was affixed, all by order of the Board and that the said instrument is the act and deed of said Board. Witness my hand and official seal this day of June, 2024. Notary Public My commission expires: 5